HAL Trust

Annual Report 2017

he history of HAL dates back to April 18, 1873, when the Nederlandsch-Amerikaansche Stoomvaart-Maatschappij (N.A.S.M.) was founded in Rotterdam, the Netherlands. T

The Company continued its activities under various names and is now operating as HAL Holding N.V., a Curaçao company. All the shares of HAL Holding N.V. are held by HAL Trust and form the Trust's entire assets. HAL Trust was formed on October 19, 1977, by a Trust Deed which was last amended on May 18, 2011. The shares of the Trust are listed and traded on Euronext in Amsterdam.

HAL Holding N.V. Johan van Walbeeckplein 11A Willemstad Curaçao Telephone: (599) 9 4615 002 Telefax: (599) 9 4615 003

Postal address: HAL Holding N.V. 5, Avenue des Citronniers MC 98000 Monaco Telephone: (377) 92 16 75 79 Telefax: (377) 93 25 54 34 www.halholding.com

4 Corporate Administration
5 Highlights and Financial Calendar
6 Report of the Trust Committee
7 Report of the Supervisory Board of HAL Holding N.V.
9 Report of the Executive Board of HAL Holding N.V.
21 Financial Statements HAL Trust
Consolidated Statement of Financial Position, 24

Consolidated Statement of Income, 25

Consolidated Statement of Comprehensive Income, 26

Consolidated Statement of Changes in Equity, 27

Consolidated Statement of Cash Flows, 28

Basis of preparation, 29

Notes to the Consolidated Financial Statements, 34

List of Principal subsidiaries and minority interests, 108

Information relating to estimated value of the subsidiaries and minority interests of HAL Holding N.V., 109

Supplemental information, 112

Financial Statements HAL Trust, 141

Distribution of Dividends, 142

Independent Auditor's Report, 143

153 Five-Year Summary Consolidated Statement of Financial Position
154 Five-Year Summary Consolidated Statement of Income
155 Financial Statements HAL Holding N.V.
157 Distribution of Profits
158 HAL Trust Organization
159 Description Corporate Governance HAL Holding N.V.
163 Information in respect of members of the Supervisory Board
164 Notice to Trust Shareholders

HAL Holding N.V. Supervisory Board:

M. van der Vorm, Chairman L.J. Hijmans van den Bergh, vice Chairman M.P.M. de Raad C.O. van der Vorm G.J. Wijers

Executive Board:

M.F. Groot, Chairman A.A. van 't Hof, CFO J.N. van Wiechen

Highlights and Financial Calendar

In euro	2017*	2016*



Share of results of associates and joint ventures
Income from other financial assets
Income from real estate activities
Net income attributable to owners of parent
Financial position
Total assets (in millions)
Equity attributable to owners of parent (in millions)


		78,503**

Per Share






Exchange rates - December 31
*





Financial calendar
Shareholders' meeting HAL Trust and interim statement
Ex-dividend date
Dividend record date
Determination and publication dividend conversion ratio
Delivery of shares and payment of cash dividend




Shareholders' meeting HAL Trust and interim statement	May 16, 2019

HAL Trust

AL Trust was formed in 1977 and holds all the outstanding shares of HAL Holding N.V. H

For further details of the organization see page 158.

In accordance with the instructions issued on May 18, 2017, the Trust distributed a dividend of € 7.10 per Share on June 20, 2017, of which € 3.55 per share was payable in shares HAL Trust and € 3.55 per share in cash.

Accordingly, a cash dividend was paid of € 278.7 million and 1,534,952 HAL Trust shares were issued as stock dividend.

On December 31, 2017, 80,124,524 HAL Trust shares were in issue (2016: 78,589,572).

On December 31, 2017, HAL Holding N.V. owned 84,234 HAL Trust shares (2016: 86,676).

The Trust Committee HAL Trust Committee Ltd.

March 29, 2018

Report of the Supervisory Board of HAL Holding N.V.

he Supervisory Board (the 'Board') supervises the Executive Board and provides advice to the general meeting of shareholders. In performing its task, the Board is guided by the interest of HAL Holding N.V. and its business.

On May 26, 2017, the general meeting of shareholders reappointed Mr. G.J. Wijers as a member of the Board. At the end of 2017 the Board consisted of five members. Their names, nationality and other relevant information are mentioned on page 163.

The Board met during eight meetings, five of which were regularly scheduled meetings. One of the meetings was fully dedicated to the strategy of the Company. The meetings were attended by all Board members.

The Executive Board provided the Board with both written and verbal information. Based on this information, the state of affairs of the Company was discussed and evaluated. Among others, the following specific subjects were addressed: the budget, the development of the results, the investment, liquid and real estate portfolios, the quarterly, semi-annual and annual reports, the report of the financial expert (see below), the functioning and remuneration of the Executive Board, the long term compensation plan of other senior management, (potential) acquisitions, the risks associated with the Company, the treasury policy, the tax strategy and the design and implementation of the systems of internal control for financial reporting purposes including the reporting by the Executive Board on fraud cases and irregularities. The Company does not have an internal audit function. The Board requested Deloitte Risk Advisory B.V. to examine the controls over financial reporting risks (covering the processes at HAL Holding N.V., HAL Investments B.V. and HAL Real Estate Inc.) and to report on deficiencies. The findings were set out in a detailed report to the Board and the Executive Board was requested to appropriately follow up on these matters. For further information relating to the systems of internal control for financial reporting purposes, we refer to the relevant paragraph in the report of the Executive Board on page 9.

T As explained in the paragraph Administrative organization, risk management systems and financial reporting in the report of the Executive Board on page 17, the application of IFRS 10 requires the Company to consolidate the financial statements of Koninklijke Vopak N.V. ('Vopak') and Safilo Group S.p.A. ('Safilo') in its financial statements, although HAL's ownership in these companies is below 50%. In order to allow the Company to comply with IFRS, it has entered into Memoranda of Understanding with Vopak and Safilo with respect to confidentiality, the process of exchanging financial information and attendance rights to the Audit Committee meetings of Vopak and the Control, Risk and Sustainability Committee meetings of Safilo of an independent financial expert on behalf of the Company. This financial expert (Mr. J.A.M. Stael, former partner of PricewaterhouseCoopers Accountants N.V.) reports to the Executive Board and the Supervisory Board, whether there are any matters relating to Vopak and Safilo that should be brought to the attention of the Company prior to the signing of the financial statements of the Company by the Executive Board and the Supervisory Board. Moreover, the assessment that the Company's financial statements do not contain material errors attributable to the financial statements of Vopak and/or Safilo is based on the external audit. Otherwise the affairs of the publicly traded associates were discussed based on publicly available information.

In the publicly traded companies Koninklijke Boskalis Westminster N.V. ('Boskalis'), Vopak and Safilo, the Company plays its role as a large minority shareholder. This is complemented by board representation. Mr. M.F. Groot, Chairman of the Executive Board is a member of the Supervisory Board of Vopak, and a non-executive member of the Board of Safilo. Mr. J.N. van Wiechen, member of the Executive Board, is a member of the Supervisory Board of Boskalis. In their respective functions they may, from time to time, be in the possession of confidential information about these publicly traded companies that they do not share with the other members of the Executive Board and the Supervisory Board of the Company. The Executive Board and the Supervisory Board of

the Company recognize the importance of confidentiality of the discussions at the level of the Boards of the above quoted companies as this contributes to a frank exchange of ideas and fruitful discussions. This modus operandi is based on sound business principles and allows these investee companies to operate more independently from the Company.

The Board has determined the variable compensation of the Executive Board. Further information with respect to the compensation of the Executive Board is included on page 101. The remuneration per Supervisory Board member for 2017, as determined by the General Meeting of Shareholders in 2011, amounted to € 80,000.

The Board had discussions with the external auditor during three meetings. Subjects discussed were the audit plan and audit findings, the financial statements, the report on the first half of 2017, impairment testing and the systems of administrative and internal controls for financial reporting purposes as well as the independence of the auditor. The financial expert was present during two meetings.

The Board also met in the absence of the Executive Board to discuss, among other matters, the functioning and composition of the Board as well as the functioning of the Executive Board. All Board members were present during the meeting of Trust Shareholders of HAL Trust on May 18, 2017.

The Board did not form any committees. Between Board meetings, the Chairman of the Board maintained more intensive contacts with the Executive Board. Individual members of the Board provided, between the meetings of the Board, their views on specific matters relevant to the Company.

The financial statements for 2017 were prepared by the Executive Board and discussed by the Board in the presence of the external auditor and the financial expert during a meeting on March 29, 2018. After reviewing the unqualified opinion on the financial statements of HAL Trust provided by PricewaterhouseCoopers Ltd., the unqualified opinion on the financial statements of

HAL Holding N.V. provided by PricewaterhouseCoopers Curaçao, the results of the external audit as summarized in a Report to the Board and the Executive Board and the report of the financial expert, the financial statements of the Company were signed by all members of the Board. The Board approved the amounts reserved as proposed by the Executive Board.

The Board recommends that the Shareholders of HAL Trust instruct the Trustee to vote at the Annual Meeting of HAL Holding N.V., to be held on May 25, 2018, for the approval of the financial statements for 2017 as per the documents submitted and the proposed distribution of profits.

It should be noted that neither the Dutch Corporate Governance Code is applicable to HAL Holding N.V. because HAL Holding N.V. is not a Dutch company, nor are other Corporate Governance Codes applicable to HAL Holding N.V. Pages 159 through 162 of this report provide a description of HAL Holding N.V.'s corporate governance structure.

In accordance with the rotation schedule, Mr. M.P.M. de Raad will resign this year. He is available for re-election. We propose to the Shareholders of HAL Trust to instruct the Trustee to vote at the Annual Meeting of HAL Holding N.V., to be held on May 25, 2018, for the re-election of Mr. M.P.M. de Raad.

On behalf of the Supervisory Board, M. van der Vorm, Chairman

March 29, 2018

Report of the Executive Board of HAL Holding N.V.

Introduction

et income of HAL Holding N.V. for 2017 amounted to € 391 million (€ 4.93 per share) compared with € 871 million (€ 10.99 per share) for 2016. The results for 2016 included a capital gain of € 491 million on the sale of AudioNova International B.V. N

The net asset value based on the market value of the quoted companies and the liquid portfolio and on the book value of the unquoted companies, decreased by € 353 million in 2017. This decrease is primarily due to a lower stock market value of Vopak and Safilo.

After taking into account the cash portion of the 2016 dividend (€ 279 million), the net asset value on December 31, 2017, amounted to €12,122 million (€ 151.45 per share) compared to € 12,754 million (€ 162.46 per share) on December 31, 2016.

The net asset value does not include the positive difference between estimated value and book value of the unquoted companies as of December 31, 2017. This difference is calculated annually and, based on the principles and assumptions set out on pages 109 through 111 of this report, amounted to € 253 million (€ 3.16 per share) on December 31, 2017, compared with € 228 million (€ 2.91 per share) on December 31, 2016.

Dividend

he dividend policy is, barring unforeseen circumstances and provided sufficient liquid assets, to base the dividend on 4% of the volume-weighted average December share price of HAL Trust in the year prior to the year of the dividend payment. Accordingly, the proposed dividend per share over 2017 amounts to € 6.20 (2016: € 7.10) of which 50% will be paid in cash and 50% in shares. T

Prospects

uring the period from December 31, 2017, through March 23, 2018, the stock market value of the ownership interests in quoted D

companies and the liquid portfolio decreased by approximately € 920 million (€ 11.49 per share). In view of the fact that a significant part of the Company's net income is determined by the results of the quoted associates and potential capital gains and losses, we do not express an expectation as to the net income for 2018.

Strategy

he Company's strategy is focused on acquiring and holding significant shareholdings in companies, with the objective of increasing long-term shareholders' value. When selecting investment candidates the Company emphasizes, in addition to investment and return criteria, the potential of playing an active role as a shareholder and/or board member. Given the emphasis on the longer term, the Company does not have a predetermined investment horizon. T

HAL also owns real estate. The real estate activities are concentrated in the greater Seattle metropolitan area with an emphasis on the development and rental of multi-family properties and office buildings.

The liquid portfolio is primarily invested in short term cash deposits and liquid equities. This provides a high degree of flexibility for potential acquisitions.

Risks

here are a number of risks associated with the strategy and with its implementation. Financial risks are further described in the section supplemental information of the financial statements on pages 137 through 140. T

Besides risks which are specific to individual companies (these risks are not managed by HAL Holding N.V., see page 17), important risk factors are summarized below. The risks described below also exclude the risks of Koninklijke Vopak N.V. ('Vopak', 48.15%) and Safilo Group S.p.A. ('Safilo', 41.61%). Although HAL's ownership in these companies is below 50%, these companies are included in the consolidated financial statements of the

Company as, in accordance with the provisions of IFRS 10, the Company is deemed to have control over these entities. Reference is also made to the paragraph administrative organization, risk management systems and financial reporting on page 17, for the organizational and control aspects of the consolidation of Vopak and Safilo.

Concentration risk

Concentration risk exists with respect to the optical retail activities as well as the quoted associates, as each represent a significant part of the net asset value of HAL.

Optical retail activities

Revenues of the optical retail and unquoted companies for 2017 amounted to € 5,610 million of which the optical retail activities represented 61%. At the end of 2017 the stock market value of HAL's ownership interest in its optical retail subsidiary GrandVision N.V. was € 4.2 billion, representing 34% of the net asset value of HAL.

A 10% change in the share price of GrandVision N.V. has an effect on HAL's net asset value of 3.4%. Accordingly, there is a significant concentration risk with respect to the optical retail industry. A decrease in revenues of the optical retail activities, for example due to an economic recession, may have a significant impact on the net asset value and profitability of HAL. A 10% decrease in these revenues could, everything else being equal, negatively affect the profit before tax by more than € 150 million.

Quoted minority interests

At the end of 2017 the stock market value of HAL's ownership interests in quoted minority interests amounted to € 4.4 billion (2016: € 5 billion). This included Vopak (€ 2.3 billion, 2016: € 2.8 billion), Koninklijke Boskalis Westminster N.V. (€ 1.5 billion, 2016: € 1.5 billion), SBM Offshore N.V. (€ 487 million, 2016: € 495 million), and Safilo (€ 124 million, 2016: € 208 million). Changes in stock prices of these companies may have a significant effect on the net asset value of HAL.

Market value risk

In addition to the interests in quoted companies as described above, at the end of 2017 HAL owned equities which are part of the liquid portfolio, for an amount of € 529 million (2016: € 191 million). The value of these assets can be subject to significant fluctuations as a result of the volatility of the stock markets. In 2017, share price developments of the quoted companies (including GrandVision) and the equities in the liquid portfolio, including dividends received, had a negative effect of € 0.3 billion on the net asset value. The change in market value (based on stock exchange prices) of the quoted companies where HAL's ownership interest exceeds 20%, does not have an impact on the valuation in the financial statements as these assets are either consolidated or accounted for using the equity method in the pro forma financial statements.

Interest rate risk

Investments in fixed income instruments are exposed to fluctuations in interest rates. In view of the short duration of the Company's liquid assets, the interest rate risk is limited. In addition, the risk of an increase in interest rates exists with respect to the Company's debt position. At the end of 2017, this debt was exclusively at the level of the subsidiaries. Of the € 1,583 million interest bearing debt outstanding at the end of 2017 (2016: € 1,619 million), 69% (2016: 60%) was at fixed rates for an average period of 3.1 years (2016: 3.6 years).

Currency risk

The most important currency risk relates to currency translation risk as a result of the translation of (net) balance sheet positions from a foreign currency to the euro. At the end of 2017 the unhedged exposure to currency translation risk, excluding the translation risk of investee companies where the ownership interest does not exceed 50%, was € 1,427 million (2016: € 1,218 million). The largest currency exposure related to the U.S. dollar and amounted to € 485 million (2016: € 432 million). The potential impact is detailed in the section supplemental information of the

financial statements on page 139. Currency risk also exists with respect to the translation of the results of foreign currency operations. Changes in exchange rates compared with 2016 had a negative effect on revenues of € 60 million. The negative effect on operating income was € 7 million.

Credit risk

HAL is subject to credit risk with respect to financial instruments and liquid assets. This is the risk that a counterparty is unable to comply with its contractual obligations. The Company generally only enters into transactions with counterparties that have a strong credit rating (S&P long-term credit rating varying from A to AA-). At the end of 2017 the liquid assets (excluding equities) amounted to € 2,055 million (2016: € 2,767 million) of which € 1,774 million (2016: € 2,475 million) was part of the 'corporate' liquid portfolio. At the end of 2017, the corporate liquid portfolio mainly consisted of short term deposits held at banks with an average short-term S&P credit rating of A-1.

Liquidity risk

Liquidity risk relates to situations where a company is unable to comply with its financial obligations. The financial liabilities mainly relate to the consolidated subsidiaries. The liquidity risk of the consolidated subsidiaries is detailed in the section supplemental information on pages 138 and 139 of the financial statements. HAL Holding N.V had, at the end of 2017, in addition to its corporate liquid portfolio of € 2.3 billion, committed revolving bank facilities of € 225 million with an average of 2.6 years remaining until maturity. Currently, the liquidity risk is therefore limited.

Acquisition risk

In the process of acquisitions, the Company makes hypotheses, assumptions and judgments about possible future events. Actual developments may turn out to be significantly different. In addition, errors of judgment in due diligence and contract negotiations, as well as non-compliance with laws and regulations in the context of acquisitions, could result in

(opportunity) losses and/or reputational damage for the Company.

Financial reporting risk

Although HAL's ownership interest in Vopak and Safilo Group is below 50%, IFRS requires (since January 1, 2014) these associates to be consolidated in the consolidated financial statements as HAL, in accordance with the provisions of IFRS 10 (Consolidated Financial Statements), is deemed to have control over these two entities. HAL has agreed with Vopak and Safilo on certain procedures for the exchange of information which allow HAL to comply with its consolidation requirement. If however, for whatever reason, either Vopak or Safilo will not, or is not able to, provide HAL with this information, HAL may not be able to comply with its obligation to prepare consolidated financial statements on a timely basis.

Other

In addition to the above mentioned risk factors, it should be noted that the profitability and the net asset value of the Company are susceptible to economic downturns. Demand for the products and services of the subsidiaries and minority-owned affiliates and/or their profitability may decline as a direct result of an economic recession, inflation, changes in the prices of raw materials, the inability to transform business models to a digital environment, consumer confidence, interest rates or governmental (including fiscal) policies, legislation as well as geopolitical developments.

Acquisitions unquoted companies

n March 2017, AN Direct B.V. (82.7% HAL) increased its ownership in MD Hearing from 40% to 100%. MD Hearing sells hearing aids via its web site and call centers in the United States. The company reported 2017 revenues of \$ 23 million. I

In July, HAL increased its ownership interest in Coolblue from 20.0% to 30.1% by acquiring existing shares from two of the three founders of the company. Coolblue, located in

Rotterdam, is one of the leading online retailers in the Benelux. The company reported 2017 revenues of € 1,193 million (2016: € 857 million).

Also in July 2017, Atlas Professionals B.V. (70% HAL) acquired the international marine activities of Programmed Marine in Houston, Aberdeen, Dubai and Singapore (annual sales of A\$ 45 million).

In November, HAL acquired 25% of the shares of DMF Investment Management B.V., operating under the trade name Dutch Mortgage Funding Company ("DMFCO"). The company is active in the origination and management of Dutch mortgages under the label MUNT Hypotheken which are funded by Dutch pension funds. The company reported revenues of € 26 million in 2017.

In 2017, Auxilium GmbH, a 54% subsidiary of Orthopedie Investments Europe B.V. , acquired two German health care companies which manufacture and distribute medical aids. The aggregate 2017 annual sales of these acquisitions were € 16 million.

Subsidiaries

Optical retail

randVision N.V. (76.7%), is a leading global optical retailer based at Amsterdam Airport Schiphol. The shares of the company are listed on Euronext in Amsterdam. At the end of 2017, the stock market value of HAL's 76.7% ownership interest was € 4,157 million (2016: € 4,081 million). G

At the end of 2017 GrandVision was active in 44 countries and had 7,001 optical stores (2016: 6,516), of which 1,184 franchise stores (2016: 1,114). The company had 31,802 fulltime equivalent employees (FTE's) (2016: 28,766). The total 2017 system wide sales (defined as sales including sales of franchise stores) amounted to € 3,784 million. Revenues as reported in the financial statements amounted to € 3,450 million (2016: € 3,316 million), a 4% increase. In October the increase of the shareholding from 30% to 60% in Visilab S.A. was completed. Visilab is a leading optical retailer in Switzerland and

operates 98 stores across the country. The company reported 2016 revenues of CHF 173 million and has more than 900 employees. In December the acquisition of Tesco Opticians in the United Kingdom was completed. Tesco Opticians had revenues of GBP 90 million in 2016 and operated a network of 209 stores across the United Kingdom and the Republic of Ireland.

Excluding the effect of acquisitions and changes in currency exchange rates, revenues increased by 3.5%. The 2017 same store sales (defined as the sales at constant currency exchange rates of those stores, excluding franchise stores, which were both on January 1, 2016 and on December 31, 2017 part of the store network), increased by 1.8% (2016: 2.2%).

The 2017 operating income (earnings before interest, exceptional and non-recurring items, taxes and amortization of intangible assets, but including amortization of software), amounted to € 415 million (2016: € 410 million).

HAL has had an ownership interest in GrandVision since 1996.

Unquoted companies

imber and Building Supplies Holland N.V., (78.1%) located in Zaandam (the Netherlands), is one of the country's leading suppliers of timber products and building materials used for new construction, renovations and maintenance. The combination has 100 outlets throughout the Netherlands and had 1,465 FTE's at the end of 2017 (2016: 1,396). Revenues for 2017 increased by 3.8% to € 675 million (2016: € 650 million). The operating income amounted to € 44 million (2016: € 40 million). T

HAL has had an ownership interest in Timber and Building Supplies Holland since 1999.

Broadview Holding B.V. (97.4%) is located in 's-Hertogenbosch (the Netherlands) and employed 1,399 FTE's at the end of 2017 (2016: 1,436). Its main subsidiaries are Trespa International B.V. and Arpa Industriale S.p.A. Trespa is located in Weert (the Netherlands) and produces composite panels for façade cladding as well as laboratory furniture. Arpa

is located in Bra (Italy) and uses a similar technology to manufacture panels for a variety of interior surfaces such as kitchens and retail furniture. Broadview also owns the Intersafe Group and Elacin International B.V. which are active in distributing and manufacturing personal protective equipment. At the end of 2017, De Vlamboog B.V. was integrated into the Intersafe group. Since 2014, Broadview is active in the distribution of liquefied natural gas (LNG) and related activities through its subsidiaries and associates in Norway, the Netherlands and Spain. In 2017, Broadview increased its ownership interest in Chart Industries Inc. from 7.8% to 8.9%. Chart Industries is a U.S. listed company which has a leading position in cryogenic equipment manufacturing. Revenues of Broadview for 2017 increased by 3.5% to € 447 million (2016: € 432 million). The operating income amounted to € 50 million (2016: € 50 million). Results for 2017 were negatively affected by adverse changes in currency exchange rates and raw material prices as well as mix effects.

HAL has had an ownership interest in Broadview since 1996.

Koninklijke Ahrend B.V. (100%) is based in St. Oedenrode (the Netherlands) and employed 1,634 FTE's at the end of 2017 (2016: 1,762). The company is active in the office furniture industry through its subsidiaries Ahrend Office Furniture, Gispen, Roels Spaces, Presikhaaf Schoolmeubelen and Techo. Revenues for 2017 increased by 7.6% to € 311 million (2016: € 289 million). The operating income was at the same level as in 2016 (break-even) primarily due to a lower gross margin as a result of adverse product mix effects.

HAL has had an ownership interest in Ahrend since 2001.

Orthopedie Investments Europe B.V. (100%) is located in Rotterdam (the Netherlands). Its subsidiaries (Livit B.V., 100% owned and Auxilium GmbH, 54% owned) manufacture and sell orthopedic and other medical devices. Livit operates a network of 34 specialized care centers and a large number of fitting locations throughout the Netherlands. Auxilium GmbH, based in Essen (Germany), is the holding

company of a number of German companies. At the end of 2017, the company employed 2,044 FTE's (2016: 1,795).

Revenues for 2017 increased by 19% to € 205 million (2016: € 172 million). Excluding the effects of acquisitions (mainly in Germany), revenues increased by 3.9%. The operating income amounted to € 8 million (2016: € 4 million).

HAL has had an ownership interest in Orthopedie Investments Europe since 2007.

Atlas Professionals B.V. (70%), located in Hoofddorp (the Netherlands), is a temporary staffing agency supplying technical personnel to the international oil & gas, marine and offshore wind industries. The company employed 260 FTE's at the end of 2017 (2016: 210). Revenues for 2017 increased by 14% to € 170 million (2016: € 149 million). This increase is primarily due to the acquisition of the international marine activities of Programmed Marine in Houston, Aberdeen, Dubai and Singapore. Excluding this acquisition and at constant exchange rates, sales increased by 4%. Operating income for 2017 amounted to € 3 million (2016: € 3 million).

HAL has had an ownership interest in Atlas since 2011.

Anthony Veder Group N.V. (62.9%) is a Rotterdam (the Netherlands) based shipping company. At the end of 2017 the company had 686 FTE's (2016:735) and operated 30 gas tankers (2016: 29), of which 25 (2016: 24) were (partially) owned. In addition, at the end of 2017, Anthony Veder had one LNG carrier under construction. This vessel was delivered in January 2018. Revenues for 2017 (including recharged bunker and port costs) amounted to \$ 174 million (2016: \$ 167 million). Revenues excluding recharged bunker and port costs amounted to \$ 138 million (2016: \$139 million). Operating income amounted to \$ 22 million (2016: \$ 25 million). Lower freight rates of two mid-sized vessels and more docking days are the primary reasons for the lower operating income.

HAL has had an ownership interest in Anthony Veder since 1991.

FD Mediagroep B.V. (99.2%) is located in Amsterdam (the Netherlands). The company employed 315 FTE's at the end of 2017 (2016: 309). The major brands of FD Mediagroep include the Dutch financial newspaper "Het Financieele Dagblad", the radio station "BNR Nieuwsradio" and the information services provider Company.info. Revenues of FD Mediagroep for 2017 amounted to € 74 million (2016: € 75 million). Operating income amounted to € 7 million (2016: € 9 million).

HAL has had an ownership interest in FD Mediagroep since 1997.

Floramedia Group B.V. (92%) is based in Westzaan (the Netherlands) and employed 215 FTE's at the end of 2017 (2016: 216). Floramedia provides horticultural communication products and services to growers, garden centers and retailers. The company uses a horticultural database which contains more than 220,000 pictures, videos, texts and other plant-related content. Revenues for 2017 amounted to € 38 million (2016: € 37 million). The operating income was at the same level as in 2016.

HAL has had an ownership interest in Floramedia since 1999.

Sports Timing Holding B.V. (95.5%), located in Haarlem (the Netherlands), operates under the MYLAPS brand and is active in the development and production of identification and timing equipment for sports events. The company employed 138 FTE's at the end of 2017 (2016:132). Revenues for 2017 amounted to € 29 million (2016: € 28 million). Operating income for 2017 also increased.

HAL has had an ownership interest in Sports Timing Holding since 1998.

Infomedics Groep B.V. (81.0%), provides business process outsourcing and factoring services for the Dutch health care sector. The company reported 2017 revenues of € 27 million (2016: € 24 million) and had 112 FTE's at the end of 2017 (2016:117). Operating income for 2017 amounted to € 12 million (2016: € 10 million).

HAL has had a direct ownership interest in Infomedics since 2016. Before, HAL held a minority stake through InVesting B.V. (sold in 2016).

Flight Simulation Company B.V. (92%) is based at Amsterdam Airport Schiphol (the Netherlands) and provides training for pilots using flight simulators. At the end of 2017 the company owned 14 flight simulators. The company employed 52 FTE's (2016: 50) at the end of 2017. Revenues for 2017 amounted to € 20 million (2016: € 18 million). Operating income was at the same level as in 2016.

HAL has had an ownership interest in Flight Simulation Company since 2006.

Quoted minority interests

AL has ownership interests in the following quoted associates: H

Koninklijke Vopak N.V. (48.15%) is the world's leading independent tank storage company. As per February 16, 2018, Vopak operated 66 terminals in 25 countries with a combined storage capacity of 35.9 million cbm. At the end of 2017 the company employed 3,639 FTE's. The shares of the company are listed on Euronext in Amsterdam. The market value at the end of 2017 amounted to approximately € 4.7 billion.

Revenues for 2017 amounted to € 1,306 million (2016: € 1,347 million). Net income amounted to € 235 million (2016: € 534 million). Net income included exceptional losses of € 52 million (2016: gain of € 208 million).

HAL has had an ownership interest in Vopak since 1999.

For additional information on Vopak please refer to the company's annual report and its website www.vopak.com.

Safilo Group S.p.A. (41.61%) is a Padua (Italy) based manufacturer and distributor of optical frames and sunglasses. The shares of the company are listed on the Milan stock exchange. The market value at the end of 2017 amounted to approximately € 0.3 billion. At

the end of 2017 the company had 7,109 employees. Revenues for 2017 amounted to € 1,047 million (2016: € 1,253 million). The net loss amounted to € 251.6 million (2016: net loss of € 142.1 million). In 2017 Safilo recorded goodwill impairment charges of € 192 million (2016: € 150 million).

HAL has had an ownership interest in Safilo since 2005.

For additional information on Safilo please refer to the company's annual report and its website www.safilo.com.

Koninklijke Boskalis Westminster N.V. (35.71%) is a leading global services provider operating in the dredging, maritime infrastructure and maritime services sectors. The company provides creative and innovative all-round solutions to infrastructural challenges in the maritime, coastal and delta regions of the world with services including the construction and maintenance of ports and waterways, land reclamation, coastal defense and riverbank protection. In addition, Boskalis offers a wide variety of marine services and contracting for the oil and gas sector and offshore wind industry as well as salvage solutions (SMIT Salvage). With a versatile fleet of more than 900 vessels and floating equipment and 10,700 employees, including associated companies, Boskalis operates in 90 countries across six continents. The shares of the company are listed on Euronext in Amsterdam. The market value at the end of 2017 amounted to approximately € 4.2 billion. Revenues for 2017 amounted to € 2,337 million (2016: € 2,596 million). Net income for 2017 amounted to € 150.5 million (2016: a loss of € 563.7 million including net impairments of € 840 million). At the end of 2017 the order book of the company amounted to € 3.5 billion compared to € 2.9 billion at the end of 2016.

HAL has had an ownership interest in Boskalis since 1989.

For additional information on Boskalis please refer to the company's annual report and its website www.boskalis.com.

SBM Offshore N.V. (16.13%) provides floating production solutions to the offshore energy

industry. The company's main activities are the design, supply, installation, operation and the life extension of floating production solutions for the offshore energy industry. The company has approximately 4,800 employees. Its shares are listed on Euronext in Amsterdam. The market value at the end of 2017 amounted to approximately € 3 billion. Revenues for 2017 amounted to \$ 1,861 million compared with \$ 2,272 million for 2016. The net loss for 2017 amounted to \$ 155 million compared to a profit of \$ 182 million for 2016. At the end of 2017 the order backlog of the company amounted to \$ 16.8 billion compared to \$ 17.1 billion at the end of 2016.

HAL has had an ownership interest in SBM Offshore since 2012.

For additional information on SBM Offshore please refer to the company's annual report and its website www.sbmoffshore.com.

Real estate

t the end of 2017, the real estate portfolio included two fully leased office properties with accessory retail in Seattle. These properties have 175,000 net rentable square feet and a total book value (after debt financing) of \$ 30 million (€ 25 million) as of December 31, 2017. A

The portfolio also included ownership interests in five joint ventures for the development and rental of 1,478 apartments in the Seattle metropolitan area. Two projects (438 apartments) are expected to be completed by the end of 2018. The other projects will be completed during 2019-2021. The total estimated cost of the five apartment projects is \$ 420 million (€ 350 million) and the estimated HAL equity is \$ 133 million (€ 110 million). At the end of 2017, the book value of the ownership interests in these real estate joint ventures amounted to \$ 75 million (€ 62 million).

For additional information on HAL's real estate portfolio please refer to www.halrealestate.com.

Liquid portfolio

he corporate liquid portfolio decreased in 2017 by € 363 million to € 2,303 million. This decrease is primarily due to the payment of the 2016 cash dividend, the increase of the ownership interest in Coolblue as well as investments in the real estate portfolio, partially offset by dividend received from Vopak and GrandVision. On December 31, 2017, the liquid portfolio consisted for 77% (2016: 93%) of fixed income instruments and cash balances amounting to € 1,774 million (2016: € 2,475 million), and for 23% (2016: 7%) of equities, for an amount of € 529 million (2016: € 191 million). The fixed income instruments and cash balances provided a return of 0.1% (2016: 0.1% negative). This portfolio consisted for 97% of assets with a duration of less than two weeks. The equity portfolio provided a return of 23.7% (2016: 19.7%). T

Results

his paragraph refers to the segmentation in the pro forma financial statements on page 118 whereby Vopak and Safilo are accounted for on an unconsolidated basis using the equity method. T

Optical retail

evenues for 2017 amounted to € 3,450 million (2016: € 3,316 million), a 4% increase. Excluding the effect of acquisitions and changes in currency exchange rates, revenues increased by 3.5%. The 2017 same store sales increased by 1.8% (2016: 2.2%). The 2017 operating income (earnings before interest, exceptional and non-recurring items, taxes and amortization of intangible assets, but including amortization of software), amounted to € 415 million (2016: € 410 million). R

Unquoted companies

evenues from the unquoted subsidiaries for 2017 amounted to € 2,160 million (2016: € 2,182 million), representing a decrease of € 22 million (1%). Excluding the effect of R

acquisitions, divestitures and currency exchange differences, revenues from the unquoted subsidiaries increased by € 90 million (4.1%).

The operating income of the unquoted companies for 2017 amounted to € 150 million (2016: € 157 million). Divestitures, acquisitions and changes in currency exchange rates had a negative effect on operating income of € 1 million.

Quoted minority interests

et income from quoted minority interests increased by € 87 million to € 146 million. This increase is primarily due to HAL's share of an impairment charge in 2016 at Boskalis of € 840 million (effect € 298 million), partly offset by lower earnings from Vopak and Safilo. The earnings of Vopak in 2016 included exceptional gains of € 287 million relating to the divestment of subsidiaries (primarily in the United Kingdom). HAL's share was € 138 million. N

Liquid portfolio

ncome from the liquid portfolio increased by € 61 million to € 80 million due to higher capital gains on equities. I

Net financial expense

et financial expense increased by € 12 million to € 44 million primarily due to currency exchange losses. N

Non-recurring items

he pro forma results for 2017 include net exceptional and non-recurring gains (excluding those of the quoted minority interests) of € 23 million (2016: € 553 million). These gains primarily relate to the revaluation of the noncontrolling interest in Visilab S.A. prior to acquisition (€ 38 million including currency gains). In addition, goodwill impairment charges were recorded of € 82 million. The results for 2016 included a capital gain of € 491 million on the sale of T

AudioNova International B.V. and capital gains on the sale of InVesting B.V. and N.V. Nationale Borg-Maatschappij of respectively € 39 and € 30 million.

Administrative organization, risk management systems and financial reporting

he administrative procedures, the risk management and internal control systems associated with the Company's strategy and its implementation, the financial reporting and compliance are all designed to provide a reasonable degree of assurance that significant risk factors are identified, their development is monitored and, where appropriate, action is taken on a timely basis. (See also the paragraph Risks on page 9.) The Supervisory Board is regularly informed about these matters. T

The companies in which HAL has interests differ in industry, size, culture, geographical diversity and stage of development. Each company is subject to specific risks relating to strategy, operations, finance and (fiscal) legislation. HAL has therefore chosen not to institute a centralized management approach and not to develop a central risk management system. Each investee company has its own financial structure and is responsible for evaluating and managing its own risks as well as formulating and executing its own strategy with respect to issues such as sustainable development, safety, health and environment as well as cyber security (including regulations with respect to data protection). The companies generally have a supervisory board of which the majority of members is not affiliated with HAL. This corporate governance structure allows the operating companies to fully concentrate on developments which are relevant to them and to assess which risks to accept and which risks to avoid. Accordingly, in addition to risks associated with HAL's strategy and its implementation as described above, there are specific risk factors associated with each individual investee company. It is the responsibility of each investee company to evaluate these risks. These risks are therefore not managed by HAL.

HAL has a management reporting system to monitor its performance, as well as that of the companies where its ownership exceeds 50%, on a monthly basis. This system comprises a set of tools including portfolio analysis, budgeting and the reporting of actual as well as projected results, balance sheet and cash flow information and operational performance indices. In addition, management of the majority owned companies provide internal letters of representation with respect to the half-year and year-end financial statements.

HAL's objective is, in the context of the inherent limitations of the decentralized management approach described above, that its internal and external financial reporting is complete, accurate, valid and timely. Financial reporting risk can be defined as any event that impedes HAL to achieve its financial reporting objectives. Although HAL is aware that no risk management and internal control system can provide absolute assurance that its objectives will be achieved or that errors, losses, fraud or the violation of laws and regulations, human errors and mistakes will be prevented, the Company aims to further improve its risk management and internal control systems. In this context the risk management and internal control systems with respect to financial reporting were again reviewed during 2017. For the most important financial processes (financial reporting and consolidation, information technology, treasury, taxation and entity level controls), risks were identified as well as the control measures designed to mitigate these risks. These controls were also tested in order to conclude on their operating effectiveness during the year. The risk management review did not cover the key financial processes of HAL's investee companies for the reasons described above. The risk management and internal control systems, were discussed with the Supervisory Board.

The Executive Board has adopted a code of conduct and whistleblower rules (lastly revised in 2014) for the employees of HAL Holding N.V., HAL Investments B.V. and HAL Real Estate Inc. The purpose of this code of conduct is to state HAL's policies on ethics, integrity, compliance with the law, employment and business conduct. With

respect to compliance with laws, it is HAL's policy to comply with all applicable laws, including, but not limited to, those with respect to employment, anti-discrimination, health, antitrust, securities, fraud, corruption and bribery. No employee, including members of the Executive Board of HAL Holding N.V., has authority to violate any law or to direct another employee or any other person to violate any law on behalf of HAL. With respect to employment it is HAL's policy to maintain a working environment in which each individual is treated with respect and to ensure equal employment opportunity without discrimination or harassment on the basis of race, color, national origin, religion, sex, age or disability. In this context it should be noted that HAL holds personal information with respect to employment. This information is kept for employment-related purposes only. Personal information is released outside HAL only with the permission of the employee. Employees may access and review their own personal information. The code of conduct also covers subjects such as conflicts of interest, use of email, internet and social media, bribes, gifts, business courtesy, confidential information and securities transactions. The employees, including the members of the Executive Board, confirm on an annual basis that they have complied with the code of conduct. In addition, the understanding by the employees of the code of conduct is tested on an annual basis. The whistleblower rules offer the opportunity for employees to report suspected irregularities. During 2017 no such irregularities were reported.

With respect to taxation, HAL is committed to comply with all tax laws and regulations, including compliance with country by country tax reporting, in all jurisdictions where it is active. A tax strategy was adopted which provides a framework of how to operate the tax function and how risks related to taxation are managed. It also describes the various roles, responsibilities and procedures, including a quarterly reporting of the majority owned investee companies of their tax position and (potential) tax risks. These tax risks are managed by the respective investee companies and not by HAL. The tax risks of the controlled minority interests Vopak and Safilo as well as other minority interests are also not

managed by HAL. In the Netherlands, HAL Investments B.V. concluded a compliance agreement with the tax authorities in the context of the "Horizontal Supervision" model. This model is based on mutual trust, understanding and transparency. The compliance agreement ensures that the tax authorities receive current and factual information about the Company's tax strategy and control framework including the tax aspects of business developments. On their part, the tax authorities are prepared to provide swift upfront assurance about certain tax matters.

Although HAL's ownership interest in Vopak and Safilo is below 50%, IFRS requires these associates to be consolidated in the consolidated financial statements as HAL is deemed to have control, as defined in IFRS 10, over these two entities. Vopak and Safilo are both publicly traded companies. Whereas HAL has board representation and, accordingly, may be considered to have significant influence over these associates, in the past neither operational nor strategic control was exercised. Moreover, Vopak and Safilo are, for example, not part of the above mentioned management reporting system which monitors the performance of the consolidated companies on a monthly basis. In addition, in view of its minority interest, the Company has no formal instruction rights with respect to Vopak and Safilo. HAL therefore continues to include the results of Vopak and Safilo in the segment "quoted minority interests". The Company has entered into Memoranda of Understanding with Vopak and Safilo with respect to confidentiality, the process of exchanging information and attendance rights to the audit committee meetings of Vopak and the Control, Risk and Sustainability Committee meetings of Safilo for an independent financial expert on behalf of HAL. This allows HAL to comply with IFRS and prepare consolidated financial statements which include the (audited) financial statements of Vopak and Safilo. However, HAL does not have access to the financial books and records, contracts and related information of Vopak and Safilo in order to independently verify that these financial statements are complete, valid and accurate.

The Chairman of the Executive Board of the Company is a member of the Supervisory Board of Vopak and non-executive member of the Board of Safilo. Mr. J.N. van Wiechen, member of the Executive Board of the Company, is a member of the Supervisory Board of Koninklijke Boskalis Westminster N.V. The information obtained in these capacities cannot be used for the preparation of the consolidated financial statements of the Company in order to preserve confidentiality and to allow these quoted associates to operate independently from the Company. Accordingly, the risk management and internal control systems of HAL with respect to financial reporting risks are not designed and are not able to provide assurance that the information relating to quoted associates in the Company's consolidated financial statements does not contain material errors due to the inherent limitations described above. The assessment that the Company's consolidated financial statements do not contain material errors attributable to the financial statements of Vopak and/or Safilo, is based on the external audit of these companies and the involvement of the independent financial expert referred to above. Vopak and Safilo both have included a description of their risks and risk management system in their respective annual reports. These risks are neither monitored nor managed by HAL.

In view of the fact that consolidating Vopak and Safilo significantly affects the financial statements of the Company, supplemental financial information is provided where, consistent with the period before the effective date of IFRS 10, Vopak and Safilo are accounted for on an unconsolidated basis using the equity method.

Accordingly, based on the above and taking into account the inherent limitations referred to above, we are of the opinion that the risk management and internal control systems with respect to financial reporting of HAL Holding N.V. provide reasonable assurance that the financial reporting does not contain material inaccuracies and that these systems operated properly during 2017 and we declare that, to the best of our knowledge:

1º. the financial statements give a true and fair view of the assets, liabilities, financial position and profit for the year of the consolidated entities taken as a whole;

2º. the report of the Executive Board gives a true and fair view of the situation as of the statement of financial position date and the developments during the year of the entities included in the financial statements taken as a whole, and

3º. this report includes a description of the principal risks HAL Holding N.V. is facing.

Executive Board HAL Holding N.V.

M.F. Groot (Chairman) A.A. van 't Hof J.N. van Wiechen

March 29, 2018

Financial Statements HAL Trust

24 Consolidated Statement of Financial Position
25 Consolidated Statement of Income
26 Consolidated Statement of Comprehensive Income
27 Consolidated Statement of Changes in Equity
28 Consolidated Statement of Cash Flows
29 Basis of preparation

Consolidation, 31

Foreign currencies, 33

Cash flow statement, 33

34 Notes to the Consolidated Financial Statements

1. Segmentation, 34
1. Exceptional items, 37
1. Property, plant and equipment, 38
1. Intangible assets , 40
1. Acquisitions & divestments of subsidiaries, 42
1. Investments in associates and joint arrangements , 45
1. Other financial assets, 49
1. Derivatives, 50
1. Marketable securities and deposits, 51
1. Receivables, 52
1. Inventories, 53
1. Other current assets, 53
1. Cash and cash equivalents, 54
1. Assets and liabilities held for sale, 54
1. Share capital, 56
1. Other reserves, 57
1. Deferred taxes, 58
1. Pension benefits, 60
1. Provisions, 66
1. Debt and other financial liabilities, 68
1. Accrued expenses, 70
1. Revenues, 71
1. Income from marketable securities and deposits, 72
1. Share of results from associates and joint ventures, 72
1. Income from other financial assets, 73
1. Income from real estate activities, 73
1. Other income, 73
1. Employee expenses, 74
1. Other operating expenses, 75
1. Financial income and expense, 75
1. Income tax expense, 76
1. Earnings per Share, 78
1. Cash flows from operating activities, 78
1. Share-based compensation, 79
1. Impairment of non-current assets, 84
1. Financial instruments, 91
1. Financial risk management, 94
1. Capital risk management, 101
1. Related-party transactions, 101
1. Capital and financial commitments, contingent liabilities, 102
1. Non-controlling interests, 104
1. Summarized financial information on joint ventures, 106
108 List of Principal subsidiaries and minority interests
109 Information relating to estimated value of the subsidiaries and minority interests of HAL Holding N.V.
112 Supplemental information
141 Financial Statements HAL Trust
142 Distribution of Dividends
143 Independent Auditor's Report

Consolidated Statement of Financial Position

As of December 31

In millions of euro	Notes	2017	2016
Non-current assets
Property, plant and equipment	3	5,030.7	5,082.1
Investment properties		6.9	8.3
Intangible assets	4	2,568.7	2,421.8
Investments in associates and joint arrangements	6	2,521.6	2,536.0
Other financial assets	7	752.1	757.1
Derivatives	8	18.7	101.2
Pension benefits	18	86.4	72.1
Deferred tax assets	17	114.0	151.8
Total non-current assets		11,099.1	11,130.4

Current assets
Other financial assets	7	40.1	3.6
Inventories	11	842.7	768.3
Receivables	10	811.7	845.8
Marketable securities and deposits	9	584.8	229.9
Derivatives	8	6.9	43.2
Other current assets	12	492.0	426.9
Cash and cash equivalents	13	2,205.0	3,143.6
Assets held for sale	14	4.4	26.6
Total current assets		4,987.6	5,487.9
Total assets		16,086.7	16,618.3
Equity
Share capital	15	1.6	1.6
Other reserves	16	155.1	322.6
Retained earnings		7,443.1	7,300.5
Equity attributable to owners of parent		7,599.8	7,624.7
Non-controlling interest	41	2,151.1	2,134.2

Total equity		9,750.9	9,758.9
Non-current liabilities
Deferred tax liabilities	17	425.1	450.8
Pension benefits	18	248.2	285.8
Derivatives	8	90.7	83.6
Provisions	19	85.7	53.6
Debt and other financial liabilities	20	2,607.5	3,128.3
Total non-current liabilities		3,457.2	4,002.1
Current liabilities
Provisions	19	79.7	89.1
Accrued expenses	21	879.8	859.2
Income tax payable		128.3	123.6
Accounts payable		800.1	832.0
Derivatives	8	25.8	14.1
Debt and other financial liabilities	20	964.9	939.3
Total current liabilities		2,878.6	2,857.3
Total equity and liabilities		16,086.7	16,618.3

Consolidated Statement of Income

For the year ended December 31

In millions of euro	Notes	2017	2016
Revenues	22	7,970.3	8,033.1
Income from marketable securities and deposits	23	79.3	18.5
Share of results from associates and joint ventures	24	118.6	(119.1)
Income from other financial assets	25	15.4	16.7
Income from real estate activities	26	1.2	2.1
Other income	27	30.1	849.3
Total income		8,214.9	8,800.6
Usage of raw materials, consumables and other inventory		2,232.5	2,171.2
Employee expenses	28	2,339.8	2,339.8
Depreciation and impairments of property, plant,
equipment and investment properties		492.1	486.8
Amortization and impairments of intangible assets	4	199.8	109.8
Other operating expenses	29	1,983.5	2,055.4
Total expenses		7,247.7	7,163.0
Operating profit		967.2	1,637.6

Financial expense	30	(226.4)	(215.5)
Other financial income	30	39.0	63.6
Profit before income tax		779.8	1,485.7
Income tax expense	31	(186.5)	(207.9)

Net profit		593.3	1,277.8
Attributable to:
Owners of parent		390.5	871.0
Non-controlling interest		202.8	406.8
		593.3	1,277.8
Average number of Shares outstanding (in thousands)	32	79,281	77,420
Earnings per Share for profit attributable to owners of
parent during the period (in euro) - basic and diluted		4.93	10.99
Dividend per Share(in euro)		6.20*	7.10

* Proposed

Consolidated Statement of Comprehensive Income

For the year ended December 31

In millions of euro	Notes	2017	2016
Net profit		593.3	1,277.8
Other comprehensive income (OCI)

Items that will not be reclassified to statement of income in subsequent periods
Actuarial results on pension benefits obligations	18	85.6	(48.4)
Income tax	31	(25.6)	12.3
Associates and joint ventures - share of OCI, net of tax	6	(2.8)	(3.5)
		57.2	(39.6)

Items that may be reclassified to statement of income in subsequent periods
Change in fair value of available-for-sale financial assets		10.1	151.8
Income tax on change in fair value	31	0.4	(4.3)
Effective portion of hedging instruments		0.9	(5.3)
Income tax related to hedging instruments	31	0.6	1.7
Translation of foreign subsidiaries, net of hedges		(232.2)	4.0
Income tax on translation and related hedges	31	(6.0)	(2.7)
Other movements*		(13.2)	1.9
Associates and joint ventures - share of OCI, net of tax	6	(27.2)	11.2
		(266.6)	158.3
Other comprehensive income for the year, net of tax**		(209.4)	118.7

Total comprehensive income for the year, net of tax		383.9	1,396.5
Total comprehensive income for the year, attributable to:
- Owners of parent		253.4	1,002.1
- Non-controlling interest		130.5	394.4
		383.9	1,396.5

* Other movements in 2017 mainly relate to recycling of currency translation results due to the step-up acquisition of Visilab S.A. Other movements in 2016 mainly related to recycling of currency translation results due to the divestment of AudioNova International B.V.

** Of which € (137.1) million attributable to owners of parent (2016: € 131.1 million).

Consolidated Statement of Changes in Equity

		Attributable to owners of parent
In millions of euro	Share capital	Retained earnings	Other reserves	Total	Non controlling interest	Total equity
Balance on January 1, 2016	1.5	6,555.5	167.9	6,724.9	1,837.9	8,562.8
Net profit for the year Other comprehensive income for the year	- -	871.0 (23.6)	- 154.7	871.0 131.1	406.8 (12.4)	1,277.8 118.7
Total comprehensive income for the year	-	847.4	154.7	1,002.1	394.4	1,396.5
Capital increase/(decrease) Effect of acquisitions and disposals Dividend paid to minority shareholders Share-based compensation (note 34) Treasury shares Dividend paid	- - - - - 0.1	- (0.6) - 7.4 (1.7) (107.5)	- - - - - -	- (0.6) - 7.4 (1.7) (107.4)	7.2 20.8 (128.1) 3.1 - -	7.2 20.2 (128.1) 10.5 (1.7) (107.4)
Other movements	-	-	-	-	(1.1)	(1.1)
Transactions with the owners of parent recognized directly in equity	0.1	(102.4)	-	(102.3)	(98.1)	(200.4)
Balance on December 31, 2016	1.6	7,300.5	322.6	7,624.7	2,134.2	9,758.9
Balance on January 1, 2017	1.6	7,300.5	322.6	7,624.7	2,134.2	9,758.9
Net profit for the year Other comprehensive income for the year	- -	390.5 33.0	- (170.1)	390.5 (137.1)	202.8 (72.3)	593.3 (209.4)
Total comprehensive income for the year	-	423.5	(170.1)	253.4	130.5	383.9
Capital increase/(decrease) Effect of acquisitions and disposals Dividend paid to minority shareholders Share-based compensation (note 34) Treasury shares Dividend paid Reclassification Other movements Transactions with the owners of parent recognized	- - - - - - - -	- (2.0) - 1.5 0.4 (278.7) (2.6) 0.5	- - - - - - 2.6 -	- (2.0) - 1.5 0.4 (278.7) - 0.5	4.3 20.3 (139.0) (0.2) - - - 1.0	4.3 18.3 (139.0) 1.3 0.4 (278.7) - 1.5
directly in equity	-	(280.9)	2.6	(278.3)	(113.6)	(391.9)
Balance on December 31, 2017	1.6	7,443.1	155.1	7,599.8	2,151.1	9,750.9

Consolidated Statement of Cash Flows For the year ended December 31

In millions of euro	Notes	2017	2016
Cash flows from operating activities
Profit before taxes		779.8	1,485.7
Changes in working capital	33	(158.3)	2.9
Adjustments for non-cash items		758.0	116.4
Cash generated from operating activities	33	1,379.5	1,605.0
Other financial income received		13.4	14.3
Finance cost paid, including effect of hedging		(186.6)	(147.9)
Income taxes paid		(203.6)	(222.5)
Net cash from operating activities		1,002.7	1,248.9
Cash flows from investing activities
Acquisition of associates, joint arrangements and subsidiaries, net of cash
acquired	5	(333.1)	(301.3)
Proceeds from divestiture of associates, joint arrangements and
subsidiaries	14	62.5	1,519.7
Proceeds from sale of/(acquisition of) other intangibles		(84.2)	(89.2)
Purchase of property, plant, equipment and investment properties		(618.4)	(676.4)
Proceeds from sale of property, plant, equipment and investment
properties		16.4	34.8
Proceeds from/(acquisition of) other financial assets	7	(22.8)	42.6
Acquisition of marketable securities and deposits		(526.2)	(86.9)
Proceeds from marketable securities and deposits		225.6	69.2
Settlement of derivatives (net investments hedges)		10.0	(8.9)
Net cash from/(used in) investing activities		(1,270.2)	503.6
Cash flows from financing activities
Proceeds from debt and other financial liabilities		283.0	227.1
Repayment of debt and other financial liabilities		(661.8)	(747.5)
Net proceeds from / (repayments of) short-term financing		138.4	(30.5)
Other non-controlling interest transactions (mainly dividend paid)		(132.3)	(130.2)
Movement in treasury shares Dividend paid		0.4 (278.7)	(1.7) (107.5)

Net cash from/(used in) financing activities		(651.0)	(790.3)
Increase/(decrease) in cash and cash equivalents		(918.5)	962.2
Cash and cash equivalents at beginning of year		3,143.6	2,226.2
Effect of exchange rate changes and reclassifications		(20.1)	(44.8)
Cash and cash equivalents retranslated at beginning of year Net increase/(decrease) in cash and cash equivalents		3,123.5 (918.5)	2,181.4 962.2
Cash and cash equivalents at end of period		2,205.0	3,143.6

Basis of preparation

he consolidated financial statements presented are those of HAL Trust (the 'Trust'), a Bermuda trust formed in 1977, and its subsidiaries as well as the interests in associates and joint ventures. HAL Trust shares are listed and traded on Euronext in Amsterdam and were prepared in accordance with sections 14.2 and 14.3 of the Trust deed. For the years presented, the Trust's only asset was all outstanding shares of HAL Holding N.V. (the 'Company'), a Curaçao corporation. Accordingly the consolidated financial statements of the Trust are identical to those of HAL Holding N.V. T

The consolidated financial statements of the Company were authorized for issue on March 29, 2018, and have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). The consolidated financial statements have been prepared under the historical cost convention unless otherwise stated in the accounting policies. The principal accounting policies adopted by the Company in the preparation of its consolidated financial statements are unchanged compared to last year. Certain amounts in prior periods have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income, shareholders' equity or earnings per Share.

Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported assets and liabilities and the disclosure on contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results ultimately may differ from those estimates. Estimates and judgements are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future period affected. Accordingly, it is reasonably possible that outcomes within the next financial year that are different from the assumptions could have an impact on the carrying amount of the asset or liability affected. Accounting policies that are critical to the financial statement presentation and that require complex estimates or significant judgement are described in the following notes:

Deemed control over quoted minority interests consolidation section;
Useful life and residual value of property, plant and equipment note 3;
Valuation of intangible assets in acquisitions note 5;
Allowance for inventory obsolescence note 11;
Classifications of non-current assets as held for sale note 14;
Recognition of carry-forward losses and tax provisions notes 17 and 31;
Assumptions pension benefits note 18;
Estimated impairment of non-current assets note 35.

Recent accounting developments

Adopted by the Company

The significant accounting policies applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements as of and for the year ended December 31, 2016.

The Company has for the first time applied Recognition of Deferred Tax Assets for Unrealised Losses - Amendments to IAS 12 and Disclosure initiative - amendments to IAS 7 as these became effective on January 1, 2017. These amendments did not have a significant impact on the Company. However, disclosure information in relation to cash flows from financing activities was expanded.

Not yet adopted by the Company

In January 2016, IFRS 16, Leases, was issued and replaces existing lease guidance including IAS 17 and IFRIC 4. This standard sets outs the principles for the recognition, measurement, presentation and disclosures for both parties to a contract. The effects of this new standard for lessees are significant. IFRS 16 eliminates the classification of leases as either operating leases or finance leases as required by IAS 17 and, instead, introduces a single lessee accounting model. Applying that model, a lessee is required to recognize: (a) right of use assets and liabilities for all leases with a term in excess of 12 months, unless the underlying asset is of low value and; (b) depreciation of lease assets will be separately presented from interest on lease liabilities in the income statement. Elements that may affect the impact of the above changes include the change in definition of the lease term, the different treatment of variable lease payments and of extension and termination options as well as the determination of applicable discount rates. The standard is effective from January 1, 2019. It is expected to have a material impact on the financial ratios of the Company and the presentation and disclosures of its financial statements in view of the significant operating lease commitments.

On transition to IFRS 16, the Company must determine whether an arrangement contains a lease. When performing this assessment, the Company can choose whether to apply the practical expedient allowed under IFRS 16 and to not reassess whether a contract is, or contains, a lease. The Company plans to apply the practical expedient to grandfather the definition of a lease upon transition. This means that it will apply IFRS 16 to all contracts entered into before January 1, 2019 and identified as leases in accordance with IAS 17 and IFRIC 4.

In 2017 the Company has performed its initial assessment of the potential effects of this new standard on the consolidated financial statements. A detailed assessment, including data enrichment, is in progress to provide a basis for detailed calculations for the whole lease portfolio. Based on the outcomes of these calculations the Company expects to provide detailed disclosure in its 2018 half-year financial report. The actual effect of applying IFRS 16 will depend on the composition of the Company's lease portfolio at the transition date, the extent to which the Company chooses to use recognition exemptions and the Company's assessment at that time of whether it will exercise any lease renewal or termination options. At December 31, 2017, the Company reports non-cancellable undiscounted operating lease commitments of € 2,603.4 million and during 2017 approximately € 537 million of operating lease expenses were recognized in the consolidated statement of income (reference is made to note 40). Some of these lease commitments will be exempted under IFRS 16 as they relate to short-term or low-value leases. The undiscounted operating lease commitments as of December 31, 2017, include undiscounted lease commitments relating to Vopak of € 1,145.3 million which include renewal options that are reasonably expected to be exercised, but not committed. GrandVision reported non-cancellable undiscounted operating lease commitments including stores subleased to franchisees of € 1,141 million at December 31, 2017. GrandVision expects that including reasonably certain renewal and termination options, these total undiscounted operating lease commitments will increase by 10-20%. The Company will adopt the standard on the required effective date and most probably use the modified retrospective transition approach using certain practical expedients and will not restate comparative amounts for the year prior to first adoption. The Company is not required to make any adjustments for leases in which it is a lessor except where it is an intermediate lessor in a sub-lease.

In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers. This standard contains principles that an entity needs to apply to determine the measurement of revenue and timing of when revenue is recognized. The underlying principle is that an entity needs to recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The standard is effective from January 1, 2018. Impact analyses have been performed by the Company's subsidiaries, including its consolidated minority interests. Based on the finalized analyses the effects on the

consolidated financial statements are expected to be limited, apart from required additional disclosures. The Company will adopt the new standard using the full retrospective method, applying the practical expedients for significant financing components, completed contracts and certain disclosures of the allocation of the transaction price to remaining performance obligations.

IFRS 9, Financial Instruments, is also effective as from January 1, 2018, and sets out the requirements for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. The standard replaces IAS 39, Financial Instruments: Recognition and Measurement. The Company has concluded its assessment of the effects of this new standard. One effect is the change in classification of Marketable securities, from "fair value through other comprehensive income" to "fair value through profit and loss" with subsequent results being recorded through income. At December 31, 2017, the Marketable securities amounted to € 584.8 million with applicable unrealized results of € 26 million, which will be transferred from the other reserves to retained earnings upon transition. The equity investments in the Other financial assets will remain classified as "fair value through other comprehensive income", however, upon derecognition, results will no longer be recycled through income under the new standard. The effect on the Company's financial statements will depend on the unrealized result position, if any, on such equity investments at the date of their derecognition. At December 31, 2017, the unrealized results on equity investments in Other financial assets amounted to approximately € 180 million. The replacement of the incurred-loss impairment model by an expected-loss impairment model is expected to result in an increase in allowances for expected credit losses on the implementation date, as (expected) credit losses are recognized earlier. The effect on the Company's financial statements is not expected to be significant. The new hedge accounting requirements provide more flexibility to the Company as these are more aligned with financial risk management objectives. Based on its current consolidated financial position, the Company does not expect a significant quantitative impact as a result of IFRS 9 implementation other than the aforementioned.

IFRIC Interpretation 23, Uncertainty over Income Tax Treatments, was issued in June, 2017, and is effective for accounting periods beginning on or after January 1, 2019. The interpretation sets out how to determine the accounting tax positions when there is uncertainty over income tax treatments under IAS 12 Income Taxes. The Company is continuing to assess the impact on its financial statements.

There are no other new standards, amendments to existing standards or new IFRIC interpretations that are not yet effective that are expected to have a material impact on the Company.

Supplemental information

As a result of the 2014 implementation of IFRS 10, Consolidated Financial Statements, HAL Trust consolidates the financial information of Koninklijke Vopak N.V. ('Vopak') and Safilo Group S.p.A. ('Safilo'). Supplemental information has been included on pages 112 through 140 whereby Vopak and Safilo are accounted for on an unconsolidated basis using the equity method as applied in the years until 2014. The inclusion of this information is considered appropriate and useful as the control model of the Company with respect to Vopak and Safilo is materially different than the model with respect to the other consolidated entities, where the Company's ownership interest exceeds 50%, and the effect of the inclusion of Vopak and Safilo in the consolidation has a significant effect on the financial statements. This information also preserves comparability with consolidated financial statements prior to 2014.

Consolidation

ubsidiaries, which are those entities over which the Company is deemed to have control, are consolidated. The Company controls an entity when the Company is exposed to, or has rights to, S

variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In certain circumstances, significant judgement is required to assess if the Company is deemed to have (de facto) control over entities where the Company's ownership interest does not exceed 50%. Subsidiaries are consolidated from the date on which effective control is obtained and are no longer consolidated as from the date the effective control ceases.

The amounts reported by the subsidiaries are based on the Company's accounting policies. Intercompany transactions, balances and unrealized results on transactions between group companies are eliminated on consolidation. Unrealized results arising from transactions with joint arrangements and associates are eliminated to the extent of the interest of the Company in the equity.

Non-controlling interests are disclosed separately. Transactions with holders of non-controlling interests that do not result in a loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid or received and the relevant share acquired or disposed of the carrying value of net assets of the subsidiary is recorded in equity.

When the Company ceases to have control, any retained interest in the entity is re-measured at its fair value at the date when control is lost, with the change in carrying amount recognized in the consolidated statement of income. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint arrangement or other financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Company had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to the consolidated statement of income.

Critical accounting estimates and judgements

In the preparation of these financial statements, management has applied significant judgement to assess if the Company is deemed to have (de facto) control over entities where the Company's ownership interest does not exceed 50%.

Although the Company's ownership interest in Vopak and Safilo is below 50%, IFRS requires these entities to be consolidated in these financial statements as the company is deemed to have control, as defined in IFRS 10 and more specifically in example 4 of the application guidance in appendix B of this standard, over these two entities. Vopak and Safilo are both publicly traded companies. Whereas HAL has board representation and, accordingly, may be considered to have significant influence over these entities, in the past neither operational nor strategic control was exercised. Moreover, Vopak and Safilo are, for example, not part of the Company's management reporting system which monitors the performance of the consolidated companies on a monthly basis. In addition, in view of its minority interest, the Company has no formal instruction rights with respect to Vopak and Safilo. The Company has a process in place to obtain information from Vopak and Safilo in order to prepare consolidated financial statements in accordance with IFRS. The Company does not, however, have access to the financial books and records, contracts and related information of Vopak and Safilo in order to independently verify that these are complete, valid and accurate.

Management performed an assessment with respect to the other minority-owned entities and asserted that (de facto) control was not deemed present for these entities.

Accounting policies applicable to acquisitions are described in note 5. A list of the Company's principal subsidiaries is set out on page 108.

Foreign currencies

unctional and presentation currency F

Items included in the financial statements of each of the Company's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The consolidated financial statements are presented in euro, which is the Company's functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of income, except when deferred in equity as qualifying hedges. Any hedge ineffectiveness is recognized in the consolidated statement of income as it arises.

Company's subsidiaries

The results and financial position of all the Company's subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position;
(ii) the income statement, the cash flow statement and all other movements in assets and liabilities are translated at average rates of exchange as a proxy for the transaction rate, or at the transaction rate itself if more appropriate;
(iii)all resulting exchange differences are recognized as a separate component of other comprehensive income.

On consolidation, exchange differences arising from the translation of net investments in foreign entities and of borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive income. Exchange differences on intra-group monetary assets or liabilities which are not part of a net investment in foreign entities are recognized in the consolidated statement of income. When a foreign operation is sold, exchange differences previously recognized through other comprehensive income are reclassified from equity (as a reclassification adjustment) to the consolidated statement of income as part of the gain or loss on sale.

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

Cash flow statement

he consolidated statement of cash flows has been prepared using the indirect method. Cash flows denominated in foreign currencies are translated at average exchange rates, or at the transaction rate if more appropriate. The effect of exchange rates on cash and cash equivalents is presented separately. T

Interest paid and interest and dividends received are classified as operating cash flows. Dividends paid are classified as financing cash flows. Cash flows arising from income taxes are classified as operating cash flows.

(All amounts in millions of euro, unless otherwise stated)

1. Segmentation

he Company's reportable segments are defined as follows: T

Optical retail
Unquoted
Quoted minority interests
Real estate
Liquid portfolio

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources between segments and assessing the performance of the operating segments, is identified as the Executive Board. The reportable segments are defined based on differences in products and services as well as differences in the nature of the respective assets and the management thereof.

Optical retail relates to GrandVision, the Company's majority-owned retail company that derives its revenues from the sale of optical retail products to consumers.

Unquoted relates to majority-owned companies as well as non-controlling minority interests in companies that derive their revenues from various activities such as construction products, office furniture, staffing, shipping, orthopedic devices, personal protection equipment, media and other activities.

The Quoted minority interests segment comprises both the Company's consolidated and unconsolidated minority interests in publicly traded entities.

The Real estate segment relates to the development and rental of multi-family properties and office buildings.

The segment Liquid portfolio consists of available-for-sale financial assets and cash-equivalent instruments generating interest, dividend and capital gains.

Operating income (for the purpose of this report defined as earnings before interest, exceptional and non-recurring items of the optical retail and unquoted segment, taxes and amortization of intangible assets but including amortization of software) can be detailed as follows:

	2017	2016
Optical retail	415.1	410.3
Unquoted	150.2	156.6
Quoted minority interests	503.4	621.2
Real estate	(0.3)	0.8
Liquid portfolio	79.5	18.5
Total operating income	1,147.9	1,207.4
Reconciling items:
- Amortization and impairment	(199.8)	(109.8)
- Other	19.1	540.0
Operating result as per the consolidated statement of income	967.2	1,637.6
Financial expense, net	(187.4)	(151.9)
Profit before tax as per the consolidated statement of income	779.8	1,485.7

The "other" reconciling items represent mostly corporate overhead and exceptional and nonrecurring items (excluding those of Vopak, Safilo and Boskalis).

The segment quoted minority interests includes the operating income (after exceptional items) of Vopak and Safilo, the Company's share in the net income of Boskalis and dividend income from SBM Offshore.

The composition of depreciation expense by segment is as follows:

	2017	2016
Optical retail	117.1	110.2
Unquoted	79.2	78.9
Quoted minority interests	295.2	297.0
Real estate	0.5	0.5
Reconciling items	0.1	0.2
	492.1	486.8

The reconciling items represent the corporate depreciation expense.

The composition of revenues by segment is as follows:

	2017	2016
Optical retail	3,449.9	3,316.1
Unquoted	2,159.6	2,181.4
Quoted minority interests	2,360.8	2,535.6
	7,970.3	8,033.1

The composition of assets by segment is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	3,214.3	2,922.9
Unquoted	2,464.8	2,365.8
Quoted minority interests	7,892.7	8,505.8
Real estate	88.0	46.1
Liquid portfolio	2,303.1	2,665.9
Reconciling items	123.8	111.8
	16,086.7	16,618.3

The reconciling items represent corporate assets, including deferred tax, loans and pension benefit assets.

The composition of investments in associates and joint ventures by segment is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	1.2	36.4
Unquoted	323.4	227.6
Quoted minority interests	2,116.4	2,235.1
Real estate	80.6	36.9
	2,521.6	2,536.0

The composition of capital expenditures by segment is as follows:

	2017	2016
Optical retail	316.6	183.5
Unquoted	137.2	262.0
Quoted minority interests	385.8	451.4
Real estate	0.1	1.0
Reconciling items	0.1	0.2
	839.8	898.1

Capital expenditures consist of additions to property, plant and equipment, investment properties and intangible assets.

The composition of liabilities by segment is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	1,923.3	1,742.4
Unquoted	1,226.3	1,320.0
Quoted minority interests	3,160.9	3,728.7
Real estate	0.3	0.4
Liquid portfolio	2.2	0.9
Reconciling items	22.8	67.0
	6,335.8	6,859.4

The reconciling items represent corporate liabilities, including earn-out liabilities, deferred tax and loans.

The composition of revenues by geographical area is as follows:

	2017	2016
Europe	6,254.5	6,234.0
North-America	853.6	905.7
Asia	447.9	513.2
Other	414.3	380.2
	7,970.3	8,033.1

The composition of property, plant and equipment, investment properties, intangible assets and investment in associates and joint ventures by geographical area is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Europe	7,093.8	6,548.4
North-America	726.5	903.9
Asia	1,502.7	1,730.4
Other	804.9	865.5
	10,127.9	10,048.2

2. Exceptional items

o increase transparency, exceptional items are disclosed separately when relevant. These items are exceptional, by nature, from a management perspective. Exceptional items may include impairments, reversals of impairments, additions to and releases from provisions for restructuring, gains on the sale of subsidiaries, joint arrangements and associates, any other significant provisions being formed or released and any significant changes in estimates. T

Summary of exceptional items is as follows:

	Notes	2017	2016
Gain on sale of AudioNova International B.V.		-	491.0
Impairment at Royal Boskalis Westminster N.V.		-	(297.8)
Gain on sale of N.V. Nationale Borg-Maatschappij		-	30.4
Gain on sale of InVesting B.V.		-	38.7
Restructuring provision		(16.3)	(8.0)
Revaluation of previously held equity interest	24	37.9	7.9
Gain on assets held for sale Vopak	14	26.0	286.6
Impairment associates and joint ventures Vopak	6, 24, 35	(91.8)	(60.1)
Goodwill impairment	35	(81.6)	-
Other		(17.2)	(51.4)
Effect on operating profit		(143.0)	437.3
Make-whole payment on early redemption Vopak	20, 30	(17.2)	-
Other		(9.3)	5.5
Effect on profit before income tax		(169.5)	442.8
Release of deferred taxes due to change in tax rate Vopak	31	34.6	-
Income tax		13.7	14.4
Effect on net profit		(121.2)	457.2

The exceptional items are disclosed separately in the notes when relevant in order to increase transparency.

The low tax effect of the 2017 exceptional items is primarily due to impairments on associates and joint ventures at Vopak and the impairment on goodwill which are not tax deductible. The positive tax effect on the exceptional items in 2016 was primarily caused by the fact that the capital gains on the sale of AudioNova International B.V., InVesting B.V., N.V. Nationale Borg-Maatschappij and the assets held for sale of Vopak were not taxable. The impairment at Boskalis in 2016 was not tax deductible.

3. Property, plant and equipment

roperty, plant and equipment are recorded at historical cost less accumulated depreciation and impairments. Historical cost includes expenditure that is directly attributable to the acquisition of the items (such as unrecoverable taxes and transport) and construction costs that can be allocated directly (such as hours of own employees and advisory fees). Interest during construction is capitalized. To the extent that dismantling obligations exist, these are included in the cost of the assets. P

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of replaced parts is derecognized. All other repairs and maintenance costs are charged to the consolidated statement of income during the financial period in which they are incurred.

Depreciation is calculated using the straight-line method to write off the cost of each asset to their residual values over their estimated useful life as follows: buildings 10-50 years, vessels 25-30 years, tank storage terminals 10-40 years and equipment and other 2-15 years. Useful lives and residual values are reviewed annually and, if required, amended. Land is not depreciated.

Critical accounting estimates and judgements

Property, plant and equipment of Vopak represent a substantial part of the total assets of the Company and the related depreciation forms a substantial part of the annual operating expenses. The useful life and residual value of these assets, determined by the Board of Vopak based on its estimations and assumptions, have a major impact on the measurement of property, plant and equipment.

Movements for 2017 and 2016 are as follows:

	Land and		Tank storage
	buildings	Vessels	terminals	Equipment	Total

Cost value Accumulated depreciation and	1,459.5	530.0	5,251.6	2,321.2	9,562.3
impairments	(663.8)	(115.2)	(2,098.9)	(1,729.4)	(4,607.3)
Balance on January 1, 2016	795.7	414.8	3,152.7	591.8	4,955.0
Investments	109.8	110.1	276.6	178.9	675.4
Consolidation	11.1	-	1.2	6.6	18.9
Disposals	(5.1)	-	(12.2)	(6.8)	(24.1)
Depreciation and impairments Reclassification*	(66.8) (82.0)	(33.1) (0.1)	(232.5) (3.6)	(154.0) (22.8)	(486.4) (108.5)
Exchange differences	(1.0)	12.2	43.8	(3.2)	51.8
Balance on December 31, 2016	761.7	503.9	3,226.0	590.5	5,082.1
Cost value Accumulated depreciation and	1,368.1	653.0	5,528.3	2,317.3	9,866.7
impairments	(606.4)	(149.1)	(2,302.3)	(1,726.8)	(4,784.6)
Balance on December 31, 2016	761.7	503.9	3,226.0	590.5	5,082.1
Investments Consolidation and purchase price	143.0	31.7	245.1	198.5	618.3
adjustments	15.4	-	-	10.8	26.2
Disposals	(6.1)	-	(4.8)	(5.3)	(16.2)
Depreciation and impairments	(73.9)	(34.7)	(233.5)	(149.5)	(491.6)
Reclassification*	2.7	(0.6)	(0.8)	(4.7)	(3.4)
Exchange differences	(22.7)	(46.6)	(99.8)	(15.6)	(184.7)
Balance on December 31, 2017	820.1	453.7	3,132.2	624.7	5,030.7
Cost value Accumulated depreciation and	1,462.9	606.1	5,544.6	2,363.2	9,976.8
impairments	(642.8)	(152.4)	(2,412.4)	(1,738.5)	(4,946.1)
Balance on December 31, 2017	820.1	453.7	3,132.2	624.7	5,030.7

* Reclassifications primarily to assets held for sale

Note 20 details information on pledges.

4. Intangible assets

ntangible assets include goodwill, trademarks, rights of use and key money, customer relationships, computer software and other. I

Goodwill

Goodwill arises on business combinations and represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisitiondate fair value amounts of the identifiable assets, liabilities and contingent liabilities.

Goodwill is carried at cost less accumulated impairments. Goodwill is subject to annual impairment testing, as described in note 35. If an impairment is recognized, it is not reversed in subsequent periods. Goodwill relating to a business combination in foreign currency is recorded in the respective currency and converted at the exchange rate at the end of the period.

Trademarks

Trademarks are initially recognized at fair value, using the relief-from-royalty approach. They are subsequently amortized over an estimated useful life, generally a maximum of 15 years, on a straight-line basis with no residual value.

Rights of use and key money

Rights of use and key money are identified as intangible assets when they are separable and arise from contractual and legal rights. Rights of use and key money are initially recognized at fair value. Such intangible assets are generally assumed to have an indefinite life as rights of use can be renewed and resold. Therefore they are subject to an annual impairment test. Rights of use and key money in other situations are considered prepaid rent and recognized in the consolidated statement of income over the rental period.

Software

Acquired software licenses are capitalized on the basis of the costs incurred to acquire and to bring to use the specific software. Costs that are directly associated with the production of identifiable and unique software products controlled by the Company that are expected to generate economic benefits exceeding costs beyond one year, are recognized as intangible assets. Direct costs (such as software development employee costs and an appropriate portion of relevant overheads) are included in the initial measurement. Costs associated with developing and maintaining computer software that do not meet these criteria are recognized as an expense as incurred. Software licenses and products are generally amortized on a straight-line basis over an estimated useful life of maximum 5 years.

Customer relationships

The valuation of customer relationships acquired in a business combination is based on the present value of estimated future cash flows. Customer relationships are initially recognized at fair value and subsequently amortized on a straight line basis over an estimated useful life of maximum 15 years.

Movements for goodwill and other intangibles are as follows:

		Rights of use and key	Trade	Customer relation
	Goodwill	money	marks	ships	Other	Total
Cost value	2,376.5	218.1	558.6	180.9	590.0	3,924.1
Accumulated amortization and impairments	(632.8)	(9.4)	(219.6)	(59.7)	(400.6)	(1,322.1)
Balance on January 1, 2016	1,743.7	208.7	339.0	121.2	189.4	2,602.0
Investments	95.8	1.7	-	0.6	116.5	214.6
Consolidation Purchase price accounting	-	1.9	11.0	73.5	17.1	103.5
adjustments	(3.6)	-	(2.3)	5.4	-	(0.5)
Disposals	-	(0.7)	-	(0.1)	(1.5)	(2.3)
Reclassification* Amortization and impairments	(306.9) (4.2)	- (1.9)	(54.4) (35.3)	(3.4) (21.9)	(7.7) (46.5)	(372.4) (109.8)
Exchange differences and other	(13.4)	1.5	(2.4)	(0.6)	1.6	(13.3)
Balance on December 31, 2016	1,511.4	211.2	255.6	174.7	268.9	2,421.8
Cost value Accumulated amortization and	2,148.4	222.5	510.5	256.3	715.3	3,853.0
impairments	(637.0)	(11.3)	(254.9)	(81.6)	(446.4)	(1,431.2)
Balance on December 31, 2016	1,511.4	211.2	255.6	174.7	268.9	2,421.8
Investments	136.5	3.5	-	0.8	80.6	221.4
Consolidation	-	1.7	33.2	122.7	19.1	176.7
Disposals	-	(0.6)	-	-	(0.1)	(0.7)
Amortization and impairments Reclassification	(81.6) 2.9	(1.3) (2.2)	(31.6) 0.9	(25.1) 2.9	(60.2) (3.1)	(199.8) 1.4
Exchange differences and other	(34.4)	(0.8)	(4.1)	(3.4)	(9.5)	(52.2)
Balance on December 31, 2017	1,534.8	211.5	254.0	272.6	295.8	2,568.7
Cost value Accumulated amortization and	2,253.4	220.5	503.4	367.2	678.0	4,022.5
impairments	(718.6)	(9.0)	(249.4)	(94.6)	(382.2)	(1,453.8)
Balance on December 31, 2017	1,534.8	211.5	254.0	272.6	295.8	2,568.7

* Reclassifications primarily to assets held for sale

Specification of goodwill is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail Unquoted Vopak	1,250.4 175.0 109.4	1,197.0 203.2 111.2
	1,534.8	1,511.4

The other category consists of:

	Dec. 31, 2017	Dec. 31, 2016
Software Other	200.9 94.9	161.9 107.0
	295.8	268.9

Rights of use and key money primarily relate to optical retail stores in France and Brazil.

Information on impairment testing is included in note 35.

5. Acquisitions & divestments of subsidiaries

he acquisition method of accounting is used to account for the acquisition of subsidiaries by the Company. The cost of the acquisition is measured as the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of the business combination and the fair value of any contingent consideration to be transferred. Identifiable assets, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. Non-controlling interest in the acquiree is measured, on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the acquiree's identifiable net assets. T

If the business combination is achieved in stages, the Company's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date and the difference with the book value of the previously held equity interest is recognized in the consolidated statement of income. The excess of the consideration transferred, the amount of any non-controlling interests in the acquiree and the acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the identifiable net assets acquired, is recorded as goodwill. If the total of the consideration transferred, the non-controlling interest recognized and the fair value of the previously held interest is less than the fair value of the net assets of the subsidiary acquired ('badwill'), the difference is directly recognized in the consolidated statement of income. Acquisition-related costs are expensed as incurred. Subsequent changes to the fair value of the contingent consideration are recognized either in the consolidated statement of income or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Critical accounting estimates and judgements

When a company is acquired, a value is assigned to intangible assets such as trademarks and the customer relationships. The determination of the value at the time of acquisition and the estimated useful life are subject to judgment. Assumptions by management underlying the estimation of fair value include the future cash flows expected from the asset and discount rates. Useful life is estimated using past experience and relevant industry practices.

Acquisitions

Tesco

GrandVision, a 76.7% subsidiary of HAL, acquired Tesco Opticians in December 2017. The acquisition comprises Tesco Opticians' network of 209 optical stores across the United Kingdom and Ireland. The cash consideration paid is GBP 55.2 million (€ 61.8 million). An additional

consideration, contingent on the achievement of certain business targets, of GPB 5 million (€ 5.6 million) is expected to be paid in 2018 (included in other financial liabilities in note 20).

Based on the initial purchase price allocation an amount of GBP 10.1 million (€ 11.5 million) is identified as goodwill. The goodwill is attributable to the workforce and expected synergies following the integration of the acquired business into GrandVision. Due to the limited time between the acquisition and the publication of the financial statements, the purchase price allocation has not yet been finalized.

Visilab

In October, 2017, GrandVision obtained control over Visilab S.A. by increasing its ownership interest from 30.0% to 60.0%. As part of the agreement, GrandVision will further increase its shareholding, in two steps, to 79% in 2019. Visilab is an optical retail company that operates 98 stores throughout Switzerland under the brand names Visilab and Kochoptik. The cash consideration paid is CHF 76.9 million (€ 67.1 million) and an amount of CHF 43.8 million (€ 37.9 million) is expected to be paid to further increase GrandVision's shareholding by another 19% in 2018 and 2019 (included in other financial liabilities in note 20).

Based on the initial purchase price allocation an amount of CHF 121.2 million (€ 104.8 million) is identified as goodwill and represents the future synergies, workforce and expected growth and profitability of the business. Due to the limited time between the acquisition and the publication of the financial statements, the purchase price allocation has not yet been finalized.

In accordance with the applicable accounting policies, the Company realized a € 37.9 million revaluation in the consolidated statement of income on GrandVision's previously held interest in Visilab. The non-controlling interests in Visilab S.A. is measured at the proportionate share of the fair value of the acquired net identifiable assets.

SC Industries, LLC

On March 7, 2017, AN Direct, a 82.7% subsidiary of HAL, increased its ownership interest in SC Industries from 40.0% to 100.0% and obtained control. SC Industries is a hearing solutions company in the United States of America that sells products via the "direct to consumer" channel under the trade name MD Hearing. Revenues for 2017 were \$ 23 million.

Orthopedie Investments Europe B.V.

In 2017, Auxilium GmbH, a 54% subsidiary of Orthopedie Investment Europe B.V., acquired two German health care companies which manufacture and distribute medical aids. The aggregate 2017 annual sales of these acquisitions were approximately € 16 million.

Details on the acquisitions performed during the year are as follows:

	Visilab	Tesco	Other	Total
Cash paid	67.1	61.8	29.7	158.6
Future consideration	37.9	5.6	2.2	45.7
Fair value of previously held equity interests	53.6	-	7.4	61.0
Fair value of net assets acquired	(68.1)	(55.9)	(19.1)	(143.1)
Non-controlling interest recognized	14.3	-	-	14.3
Goodwill	104.8	11.5	20.2	136.5

For the 2017 acquisitions the Company has elected to recognize non-controlling interest at their proportionate share of the fair value of net assets acquired. Goodwill for an amount of € 15.0 million is expected to be deductible for tax purposes.

Details of the net assets acquired are set out below:

	Visilab	Tesco	Other	Total
Property, plant and equipment	23.8	0.3	2.0	26.1
Intangible assets	95.7	67.9	13.1	176.7
Investments in associates and joint arrangements	0.2	-	-	0.2
Other financial assets	-	-	0.1	0.1
Marketable securities and deposits	-	-	-	-
Deferred tax assets	6.5	-	-	6.5
Other non-current assets	1.2	-	0.1	1.3
Cash	3.8	-	2.3	6.1
Non-current debt	(0.3)	-	(0.5)	(0.8)
Non-current provisions	(23.9)	-	(0.3)	(24.2)
Deferred tax liabilities	(21.7)	(9.8)	(1.6)	(33.1)
Other non-current liabilities	(2.1)	-	(2.2)	(4.3)
Current debt	(13.0)	-	(0.5)	(13.5)
Accounts receivable	2.0	-	9.8	11.8
Inventories	13.7	0.9	1.8	16.4
Other current assets	4.7	-	1.9	6.6
Income tax payable	(2.2)	-	(0.3)	(2.5)
Accounts payable	(1.7)	-	(2.8)	(4.5)
Accrued expenses	(10.8)	(0.6)	(1.8)	(13.2)
Other current liabilities	(7.8)	(2.8)	(0.8)	(11.4)
Current provisions	-	-	(1.2)	(1.2)
Net working capital	(2.1)	(2.5)	6.6	2.0
Fair value of net assets acquired	68.1	55.9	19.1	143.1

The above acquisitions generated the following results:

	Visilab	Tesco	Other	Total
Contribution to 2017 revenues	43.1	5.6	50.0	98.7
Contribution to 2017 operating income Contribution to 2017 net income	9.4 7.3	(1.6) (2.2)	1.1 1.0	8.9 6.1
2017 full-year revenues	152.5	100.0	78.4	330.9
2017 full-year operating income 2017 full-year net income	23.3 18.1	1.2 0.2	2.8 1.9	27.3 20.2

Acquisition costs charged to the other operating expenses in the consolidated statement of income amounted to € 2.5 million.

Reconciliation to the cash flow statement:

	Total
Cash paid for the above acquisitions	158.6
Cash acquired	(6.1)
Cash outflow due to acquisition of subsidiaries, net of cash acquired	152.5
Acquisition of associates and joint arrangements	180.6
Cash outflow due to acquisition of associates, joint arrangements and subsidiaries, net of cash acquired	333.1

Divestments

For information on divestments we refer to note 14 assets and liabilities held for sale.

6. Investments in associates and joint arrangements

ssociates are entities over which the Company has significant influence, generally presumed to exist at a shareholding of 20% or more of the voting rights, but no (de facto) control. A

Joint arrangements are classified as either joint operations or joint ventures, depending on the contractual rights and obligations of each investor. All joint arrangements of the Company are considered joint ventures.

Associates and joint ventures are accounted for using the equity method. Under the equity method, the interest in the associate or joint venture is recognized at cost, including goodwill identified upon acquisition. The carrying value is subsequently adjusted to recognize the Company's share of the post-acquisition results and movements in other comprehensive income of the associate or joint venture. Accounting policies of the associates and joint ventures have been amended where necessary to ensure consistency with the policies adopted by the Company. When the Company's share of losses exceeds the carrying amount of an equity-accounted investment, including any unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the company in question. Significant unrealized gains on transactions between the Company and its associates and joint ventures are eliminated to the extent of the Company's interest in the specific company. Significant unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Dilution gains and losses arising on associates and joint ventures are recognized in the income statement.

If the ownership in an associate is reduced, but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is recycled to the consolidated statement of income, where appropriate.

The movements of investments accounted for using the equity method are set out on the following page.

		Joint
	Associates	ventures	Total
Share of net assets	1,602.7	814.1	2,416.8
Goodwill	73.3	81.6	154.9
Balance on January 1, 2016	1,676.0	895.7	2,571.7
Investments	231.6	38.5	270.1
Consolidation	0.6	-	0.6
Disposals	(28.9)	-	(28.9)
Share of results	(171.9)	112.9	(59.0)
Share of other comprehensive income	8.0	(0.3)	7.7
Dividends	(14.5)	(112.7)	(127.2)
Impairments	0.1	(63.2)	(63.1)
Impairment reversals	(0.1)	3.1	3.0
Reclassification* Exchange differences and other	(49.9) 7.1	(2.5) 6.4	(52.4) 13.5

Balance on December 31, 2016	1,658.1	877.9	2,536.0
Share of net assets	1,478.7	808.4	2,287.1
Goodwill	179.4	69.5	248.9
Balance on December 31, 2016	1,658.1	877.9	2,536.0
Investments	133.9	53.0	186.9
Consolidation	0.2	-	0.2
Disposals	(14.0)	-	(14.0)
Share of results	101.4	109.0	210.4
Share of other comprehensive income	(41.4)	11.4	(30.0)
Dividends	(6.4)	(94.8)	(101.2)
Impairments	-	(91.8)	(91.8)
Reclassification**	(59.9)	(5.5)	(65.4)
Exchange differences and other	(50.4)	(59.1)	(109.5)
Balance on December 31, 2017	1,721.5	800.1	2,521.6
Share of net assets	1,468.5	735.7	2,204.2
Goodwill	253.0	64.4	317.4
Balance on December 31, 2017	1,721.5	800.1	2,521.6

* Reclassifications primarily to assets held for sale and business combinations and from investment property

** Reclassifications primarily to assets held for sale and business combinations

The 2016 figures in the table above include a reclassification from joint ventures to associates by Vopak.

Joint ventures mainly relate to Vopak. The amounts recognized in the statement of financial position comprise:

	Dec. 31, 2017	Dec. 31, 2016
Publicly traded Other	1,147.8 1,373.8	1,143.4 1,392.6
	2,521.6	2,536.0

Vopak acquisitions and divestitures

In the second quarter of 2017, Vopak entered into an associate and will invest together with its partner Altagas in the development of the Ridley Island Propane Export Terminal (RIPET). RIPET is expected to be the first propane export facility on the west coast of Canada. The project is to be designed to ship 1.2 million tons of propane per annum, with approximately 96,000 cubic meters of storage capacity. The facility is expected to be commissioned in Q1 2019. Vopak has a 30% interest in RIPET.

Other acquisitions

DMF Investments Management B.V.

In November, HAL completed the announced acquisition of 25% of the shares of DMF Investment Management B.V. The company operates under the trade name Dutch Mortgage Funding Company (DMFCO). It is active in the origination and management of Dutch mortgages under the label MUNT Hypotheken which are funded by Dutch pension funds. The revenues over 2017 amounted to € 26 million.

Coolblue B.V.

In July, HAL increased its ownership interest in Coolblue from 20.0% to 30.1% by acquiring existing shares from two of the three founders of the company. Coolblue, located in Rotterdam, is one of the leading online retailers in the Benelux. The company reported 2017 revenues of € 1,193 million.

Principal associate

The principal associate of the Company is Koninklijke Boskalis Westminster N.V. ('Boskalis') in which the Company has a 35.71% (2016: 35.45%) ownership interest. Boskalis is incorporated in the Netherlands and is listed on Euronext Amsterdam. The company is a leading global service provider operating in the dredging, maritime infrastructure and maritime services sectors.

The difference between the market value of Boskalis and the book value is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Market value Book value	1,496.7 (1,147.8)	1,521.4 (1,143.4)
	348.9	378.0

Set out on the next page is summarized financial information for Boskalis. This summary is based on publicly available information.

	Dec. 31, 2017	Dec. 31, 2016
Current
Cash and cash equivalents	191.9	965.3
Other current assets	1,008.5	869.0
Total current assets	1,200.4	1,834.3
Financial liabilities (excluding trade payables)	43.3	463.1
Other current liabilities (including trade payables)	1,406.6	1,583.5
Total current liabilities	1,449.9	2,046.6
Non-current
Assets	3,613.1	3,729.7
Financial liabilities	270.6	309.0
Other liabilities	67.7	85.2
Total non-current liabilities	338.3	394.2
Non-controlling interest	2.4	2.0
Net assets	3,022.9	3,121.2
	2017	2016
Revenue	2,337.2	2,596.3
Depreciation and amortization	(251.6)	(1,025.7)
Financial income	0.4	1.0
Financial expense	(13.4)	(72.3)
Profit before tax	172.1	(529.4)
Profit after tax for owners of parent	150.5	(563.7)
Other comprehensive income for owners of parent	(138.0)	26.3
Total comprehensive income for owners of parent	12.5	(537.4)

The 2016 result of Boskalis included an impairment of € 840.1 million. The share of the Company in this impairment amounted to € 297.8 million and was included in the consolidated income statement within the line share of results from associates and joint ventures.

Reconciliation of the summarized financial information for Boskalis:

	2017	2016
Net assets January 1	3,121.2	3,714.3
Profit for the period	150.5	(563.7)
Other comprehensive income	(138.0)	26.3
Transactions with owners	(110.8)	(55.7)
Net assets December 31	3,022.9	3,121.2

Interest in Boskalis (35.71%, 2016: 35.45%)	1,079.5	1,106.5
Elimination part of gain relating to the sale of Dockwise Ltd. (2013)	(11.3)	(11.3)
Goodwill	79.6	48.2
Book value	1,147.8	1,143.4

We refer to note 42 with respect to summarized financial information on joint ventures.

7. Other financial assets

t initial recognition, the Company classifies its non-derivative financial assets as either loans and receivables or available-for-sale. The classification depends on the purpose for which the financial assets were acquired. The Company does not have any financial assets held for trading. Financial assets are first recognized on the trade date, the date on which the Company commits to purchase the asset. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. A

Loans and receivables

These are assets with an established payment profile and which are not listed on a recognized stock exchange. They are initially recognized at fair value plus any directly related transaction costs. Subsequently, loans and receivables are carried at amortized cost, less any impairment. A provision for impairment of loans and receivables is established when there is objective evidence that the Company may not be able to collect all amounts due according to the original terms. Interest income on loans and receivables is recognized using the effective interest method.

Available-for-sale

Any non-derivative financial assets not classified as loans and receivables are designated as available-for-sale. They are initially recognized at fair value plus any directly related transaction costs. Subsequently, they are measured at fair value with changes being recognized in other comprehensive income. Interest and dividend income are recognized under income from marketable securities and deposits or income from other financial assets, as applicable, in the consolidated statement of income. When the investment is sold or impaired, the accumulated gains and losses are recycled from equity to the income statement. Interest and dividends from these assets are recognized as they are declared payable.

The specification is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Investments in quoted securities	593.8	576.3
Loans to associates and joint ventures	3.6	2.0
Other loans	96.7	88.2
Other	98.1	94.2
	792.2	760.7
Current	40.1	3.6
Non-current	752.1	757.1
	792.2	760.7

The category "other" includes long-term deposits and receivables.

Investments in quoted securities include:

	Dec. 31, 2017	Dec. 31, 2016
Equity interest in SBM Offshore N.V. (16.13%, 2016: 15.54%) Equity interest in Chart Industries Inc. (8.94%, 2016: 7.8%)	486.6 107.2	494.7 81.6
	593.8	576.3

Amounts included in the cash flow statement comprise:

	Dec. 31, 2017	Dec. 31, 2016
Purchase of shares in SBM Offshore N.V.	-	(14.2)
Purchase of shares in Chart Industries Inc.	(10.6)	(56.5)
Loans provided to associates and joint ventures	(1.6)	-
Repayment of loans by associates and joint ventures	3.5	85.9
Other	(14.1)	27.4
Changes in other financial assets in cash flow statement	(22.8)	42.6

8. Derivatives

erivatives are measured at fair value with any related transaction costs expensed as incurred. Reference is made to the accounting policies in note 36 on fair value measurement. The treatment of changes in the fair value of derivatives depends on their use as explained below. D

Cash flow hedge

Derivatives held to hedge the uncertainty in timing or amount of future forecasted cash flows are classified as being part of cash flow hedge relationships. For effective hedges, gains and losses from changes in the fair value of derivatives are recognized through other comprehensive income. Any ineffective elements of the hedge are recognized in the consolidated statement of income. If the hedged cash flow relates to a non-financial asset, the amount accumulated in equity is subsequently included within the carrying value of that asset. For other cash flow hedges, amounts deferred in equity are recycled in the consolidated statement of income at the same time as the related cash flow. When a derivative no longer qualifies for hedge accounting, any cumulative gain or loss remains in equity until the related cash flow occurs. When the cash flow takes place, or if the hedged cash flow is no longer expected to occur, the cumulative gain or loss is taken to the consolidated statement of income immediately.

Net investment hedge

The Company applies hedge accounting to certain investments in foreign operations. For an effective hedge, gains and losses from changes in the fair value of derivatives are recognized through other comprehensive income. Any ineffective elements of the hedge are recognized in the consolidated statement of income. In the event of disposal or partial disposal of an interest in a foreign operation either through sale or as a result of a repayment of capital, the cumulative exchange difference is recognized in the consolidated statement of income.

Fair value hedge

Certain derivatives are held to hedge the risk of changes in value of a specific bond or other loan. In these situations, the Company designates the liability and related derivative to be part of a fair value hedge relationship. The carrying value of the bond is adjusted by the fair value of the risk

being hedged, with changes going to the consolidated statement of income. Gains and losses on the corresponding derivative are also recognized in the consolidated statement of income. The amounts recognized are offset in income to the extent that the hedge is effective. When the relationship no longer meets the criteria for hedge accounting, the fair value hedge adjustment made to the bond is amortized using the effective interest method.

Derivatives for which hedge accounting is not applied

Derivatives not classified as hedges are carried at fair value with changes being recognized in the consolidated statement of income.

Derivatives are classified as follows in the statement of financial position:

	Assets		Liabilities
	2017	2016	2017	2016
Equity derivatives	1.9	3.2	(1.9)	-
Currency derivatives	6.9	9.3	(22.2)	(13.7)
Interest rate derivatives	16.8	131.9	(92.4)	(84.0)
	25.6	144.4	(116.5)	(97.7)
Current	6.9	43.2	(25.8)	(14.1)
Non-current	18.7	101.2	(90.7)	(83.6)
	25.6	144.4	(116.5)	(97.7)

Included in non-current derivative liabilities is an embedded option (€ nil, 2016: € 0.5 million) related to Safilo's equity-linked debt. Changes in the share price of Safilo may result in changes in the fair value of the embedded financial instrument and the related amounts are recorded in the consolidated statement of income (level 2 valuation).

Information on fair value measurement of derivatives is included in note 36, disclosure on hedge accounting is provided in note 37.

9. Marketable securities and deposits

he accounting policies applied to marketable securities and deposits are the same as those applied to other financial assets (note 7). Marketable securities are classified as available-for-sale financial instruments. T

Marketable securities consist of equity securities amounting to € 528.6 million (2016: € 191.2 million) and fixed income securities amounting to € 56.2 million (2016: € 38.7 million).

10. Receivables

rade receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less a provision for impairment. An allowance is established when there is objective evidence of impairment. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization and default or delinquency in payments are considered indicators that the trade receivable may be impaired. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Additions to and releases from the provision are recognized in the consolidated statement of income. T

	Dec. 31,	Dec. 31,
	2017	2016
Trade receivables	852.5	900.9
Allowance for doubtful accounts	(40.8)	(55.1)
	811.7	845.8

The ageing analysis of the trade receivables that are past due but not impaired is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Up to 3 months	192.7	175.3
Between 3 and 6 months	17.7	26.1
Between 6 and 9 months	11.3	11.6
Over 9 months	28.7	21.2
	250.4	234.2

Movements on the allowance for impairment of trade receivables are as follows:

	2017	2016
Allowance on January 1	(55.1)	(57.6)
Addition to allowance	(19.7)	(20.8)
Utilized during the year	19.0	17.3
Released	5.0	4.2
Other movements	10.0	1.8
Allowance on December 31	(40.8)	(55.1)

The fair value of the receivables approximates their carrying value.

Information on pledges is included in note 20.

11. Inventories

nventories are stated at the lower of cost and net realizable value. Cost is generally determined using the weighted-average cost method. Cost comprises direct costs and a proportion of attributable production overheads, but excludes interest expense. Net realizable value is the estimated selling price less the estimated costs necessary to make the sale. I

Critical accounting estimates and judgements

Finished goods are regularly subjected to specific assessment tests to identify damaged, slow moving or obsolete inventory, taking into consideration past experience, historic results and the probability of sale under normal market conditions. Based on these analyses, management asserts judgement to determine the write-downs required to reduce the value of the inventory to its net realizable value.

The composition of the inventories is as follows:

	Dec. 31,	Dec. 31,
	2017	2016
Raw materials	135.3	153.0
Work in progress	29.1	29.5
Finished goods	811.6	751.1
Provision for obsolete inventory	(133.3)	(165.3)
	842.7	768.3

The cost of inventory recognized as expense amounts to € 2,075.1 million (2016: € 2,019.1 million). The total write-down of inventories recognized as expense amounts to € 74.8 million (2016: € 93.5 million).

Information on pledges is included in note 20.

12. Other current assets

ther current assets generally include prepayments relating to the following year and other receivables to be received within 12 months. O

The composition of the other current assets is as follows:

	Dec. 31,	Dec. 31,
	2017	2016
Prepaid vendors	83.8	67.2
VAT	56.5	41.9
Supplier bonus receivable	50.9	40.7
Income tax receivable	53.2	58.1
Other receivables	247.6	219.0
	492.0	426.9

13. Cash and cash equivalents

ash and cash equivalents comprise unrestricted bank balances and liquid investments with a maturity of three months or less. C

	Dec. 31, 2017	Dec. 31, 2016
Cash Cash equivalents	1,717.3 487.7	2,588.4 555.2
	2,205.0	3,143.6

Cash equivalents include time deposits with a maturity of less than three months.

14. Assets and liabilities held for sale

ssets and liabilities are classified as held for sale if their carrying amounts are to be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable at the reporting date. Assets and liabilities that meet the criteria to be classified as held for sale are measured at the lower of carrying amount and fair value less costs of disposal and are not depreciated nor amortized. In addition, if applicable, equity accounting ceases. A

When classifying non-current assets as held for sale, an estimate is made of their fair values and expected costs of disposal. Depending on the nature of the non-current assets, the estimated fair value may be associated with uncertainty and potentially adjusted subsequently.

Critical accounting estimates and judgements

Based on the facts and circumstances at the reporting date, management needs to assess if the value of the assets will be recovered principally through a divestment transaction rather than through continuing use. These facts and circumstances may change and could result in a situation where assets are divested, which were not classified as held for sale at period-end. When classifying non-current assets as held for sale, management makes estimates of their value (sales price and expected costs to sell). Depending on the nature of the non-current assets, the estimated fair value may be associated with uncertainty and possibly adjusted subsequently. Measurement of the fair value of non-current assets is categorized as level 3 in the fair value hierarchy as measurement is not based on observable market data.

The composition of the assets held for sale and related liabilities is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Property, plant and equipment	4.4	7.0
Investments in associates and joint ventures	-	19.6
Total net assets held for sale	4.4	26.6

The assets held for sale as of December 31, 2017, mainly relate to real estate in the unquoted segment. These assets were not classified as held for sale as of December 31, 2016. All assets and liabilities held for sale as of December 31, 2016, were sold during 2017 and did not qualify as discontinued operations.

The disposals in 2016 and 2017 generated the following cash inflows.

In millions of euro		Cash receipt
	2017	2016
Vopak Terminal Eemshaven	29.0	-
Vopak China joint venture	19.5	-
AudioNova International B.V.	-	850.4
Vopak UK assets	-	464.6
N.V. Nationale Borg-maatschappij	-	72.7
InVesting B.V.	-	72.1
Other	14.0	59.9
Total	62.5	1,519.7

2017

Vopak - China divestment

In the third quarter of 2017, Vopak divested a business development joint venture in China which was already classified as held for sale per year-end 2016. The exceptional gain on this divestment amounted to € 1.4 million. This capital gain is included in other income.

Vopak - Eemshaven divestment

On September 28, 2017, Whitehelm Capital and Vopak announced a change in ownership in Vopak Terminal Eemshaven, a joint venture terminal in the Netherlands between Vopak and NIBC European Infrastructure Fund I C.V. (NEIF). Whitehelm Capital acquired 90% of the shares in the company from Vopak and NEIF on behalf of two pension fund investors. Vopak retained 10% of the shares and is the terminal operator. From an accounting perspective the 10% ownership of Vopak in the terminal is classified as an investment in an associate, as Vopak has the right to appoint the management board of the terminal and one of the three members of its supervisory board and Vopak is able to participate in the decisions-making process of the entity. The cash proceeds for Vopak amounted to € 29.0 million. This partial divestment resulted in a net exceptional gain of € 24.6 million.

2016

AudioNova

On September 15, 2016, HAL completed the divestment of its 95% shareholding in AudioNova International B.V. to Sonova Holding AG for an enterprise value − excluding net debt and interest − of € 830 million. The sale resulted in a net capital gain for HAL of € 491 million. This capital gain was included in other income.

Vopak - UK assets

In the first quarter of 2016, Vopak completed the earlier announced divestment of all of its UK assets. The divestment comprised three wholly-owned terminals: Vopak Terminal London, Vopak Terminal Teesside and Vopak Terminal Windmill and Vopak's 33.3% investment in the joint venture Thames Oilport. This divestment resulted in a total pre-tax exceptional gain of € 282.9 million. The tax effects of this transaction were minimal. This capital gain was included in other income.

N.V. Nationale Borg-Maatschappij

On June 1, 2016, HAL completed the divestment of its 46.7% ownership interest in N.V. Nationale Borg-Maatschappij to AmTrust Financial Services Inc. This divestment resulted in a capital gain of € 30.4 million. This capital gain was included in other income.

InVesting B.V.

On May 4, 2016, HAL sold its 80.6% shareholding in InVesting B.V. to Arrow Global Group PLC. The divestment resulted in a net capital gain of € 38.7 million. This capital gain was included in other income.

15. Share capital

hen share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are deducted from equity. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is also presented in equity. W

The issued share capital at December 31, 2017, consists of 80,124,524 shares of which 84,234 are held as treasury stock by the Company.

Movements in the number of shares were as follows:

x 1,000	Issued shares	Treasury shares
Balance on January 1, 2016	76,399.6	127.3
Sale and transfer of treasury shares	-	(0.7)
Purchase of treasury shares, including stock dividend		10.1
Dividend paid in stock	2,190.0
Shares granted	-	(50.0)
Balance on December 31, 2016	78,589.6	86.7
Balance on January 1, 2017	78,589.6	86.7
Sale and transfer of treasury shares	-	(4.1)
Purchase of treasury shares, including stock dividend	-	1.7
Dividend paid in stock	1,535.0
Balance on December 31, 2017	80,124.6	84.3
		December

31, 2017
85,000.0
80,040.3
0.02
1.6

The treasury shares above are HAL Trust Shares held by HAL Holding N.V. and are not expected to be cancelled. Each share has one voting right.

A 2016-related dividend of € 557.4 million (excluding dividend on treasury shares) or € 7.10 per Share was paid on June 20, 2017 (2016: € 495.8 million or € 6.50 per Share), of which € 278.7 million in cash and € 278.7 million in Shares. Shareholders received one new Share for 51.2 existing Shares held. The calculation of the 2016 earnings per Share has been adjusted to take account of this stock dividend (in accordance with IAS 33.64).

The conversion ratio was determined based on the volume-weighted average share price of HAL Trust Shares traded on Euronext in Amsterdam during the period May 24, 2017, through June 13, 2017. Accordingly, 1,534,952 Shares were issued on June 20, 2017.

16. Other reserves

ther reserves include the cumulative valuation reserve, the cash flow hedge reserve and the cumulative currency translation reserve. O

The cumulative valuation reserve includes the unrealized results on available-for-sale financial assets.

The cash flow hedge reserve contains the effective part of the accumulated change in the fair value of cash flow hedges, net of tax, in respect of which the hedged future transaction has not yet taken place.

The cumulative currency translation reserve includes all exchange differences resulting from the translation of the financial statements of foreign entities. It also includes the exchange differences on liabilities and the effective currency component of fair value changes of derivative financial instruments, net of tax, to the extent that they are part of an effective net investment hedge relationship.

In millions of euro	Cumulative valuation reserve	Cash flow hedge reserve	Cumulative currency translation reserve	Total other reserves

Balance on January 1, 2016	36.5	(70.9)	202.3	167.9
Change in fair value of available-for-sale financial assets	144.9	-	-	144.9
Translation of foreign subsidiaries, including share of associates and joint arrangements	-	-	4.4	4.4
Effective portion of hedging instruments, including share of associates and joint
arrangements	-	3.5	-	3.5
Other	-	-	1.9	1.9
Balance on December 31, 2016	181.4	(67.4)	208.6	322.6
Balance on January 1, 2017	181.4	(67.4)	208.6	322.6
Change in fair value of available-for-sale
financial assets Translation of foreign subsidiaries, including	17.8	-	-	17.8
share of associates and joint arrangements	-	-	(185.6)	(185.6)
Effective portion of hedging instruments, including share of associates and joint
arrangements	-	7.8	-	7.8
Other	2.6	-	(10.1)	(7.5)
Balance on December 31, 2017	201.8	(59.6)	12.9	155.1

17. Deferred taxes

eferred tax is recognized using the liability method on taxable temporary differences between the tax base and the accounting base of items included in the consolidated financial statements. Temporary differences are not provided if they relate to goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit or differences relating to investments in subsidiaries, associates and joint ventures to the extent that the reversal of the temporary differences are controlled by the Company and it is probable that they will not reverse in the foreseeable future. Withholding tax and any other tax due for unremitted earnings of subsidiaries are not recognized as deferred tax liability unless there is an intention to distribute these earnings in the foreseeable future. D

The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, at the year end. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax is recognized in the consolidated statement of income unless it relates to items recognized through other comprehensive income.

Tax assets and liabilities are offset when there is a legally enforceable right to set off the recognized amounts and that there is an intent to either settle on a net basis, or to realize the asset and settle the liability simultaneously.

Critical accounting estimates and judgements

Deferred tax assets, including those arising from carry-forward losses, are recognized if it is likely that taxable profits will be available against which losses can be set off. Management exercises judgment to establish the extent to which expected future profits substantiate the recognition of a deferred tax asset.

The movement in deferred tax assets and liabilities during the period is set out on the next page:

	Carry forward losses	PP&E	Intangibles	Inventories	Employee benefits	Other	Offset assets and liabilities	Total
Assets	106.6	31.7	11.1	52.7	52.5	81.1	(160.9)	174.8
Liabilities	-	(342.8)	(220.3)	(4.9)	(12.1)	(37.7)	160.9	(456.9)
Net book value on January 1, 2016	106.6	(311.1)	(209.2)	47.8	40.4	43.4	-	(282.1)
Credited/(charged) to
net income Credited/(charged) to other comprehensive	(9.2)	(21.6)	21.0	(1.9)	5.8	4.2	-	(1.7)
income Acquisitions and purchase price accounting	-	-	-	-	12.3	(8.5)	-	3.8
adjustments	3.4	-	(23.0)	-	-	(0.1)	-	(19.7)
Divestitures	4.4	-	2.5	-	-	2.5	-	9.4
Reclassifications*	(23.1)	10.7	5.5	0.1	-	2.2	-	(4.6)
Exchange differences	(0.8)	(5.9)	(0.3)	1.3	0.3	1.3	-	(4.1)
Net book value on December 31, 2016	81.3	(327.9)	(203.5)	47.3	58.8	45.0	-	(299.0)
Assets Liabilities	81.3 -	31.5 (359.4)	10.0 (213.5)	53.1 (5.8)	70.4 (11.6)	85.0 (40.0)	(179.5) 179.5	151.8 (450.8)
Net book value on January 1, 2017	81.3	(327.9)	(203.5)	47.3	58.8	45.0	-	(299.0)
Credited/(charged) to net income Credited/(charged) to	(19.0)	33.1	28.6	(7.2)	1.9	(6.6)	-	30.8
other comprehensive income Acquisitions and purchase price	-	-	-	-	(25.6)	(0.3)	-	(25.9)
accounting adjustments	-	-	(32.6)	0.2	4.4	1.3	-	(26.7)
Reclassifications*	(0.3)	(0.3)	(1.6)	0.2	(0.1)	2.1	-	-
Exchange differences	(4.0)	14.7	3.6	(2.8)	(1.9)	0.1	-	9.7
Net book value on
December 31, 2017	58.0	(280.4)	(205.5)	37.7	37.5	41.6	-	(311.1)
Assets Liabilities	58.0 -	27.6 (308.0)	11.6 (217.1)	46.8 (9.1)	53.0 (15.5)	71.0 (29.4)	(154.0) 154.0	114.0 (425.1)
Net book value on December 31, 2017	58.0	(280.4)	(205.5)	37.7	37.5	41.6	-	(311.1)

* Reclassifications primarily relate to reclassification to assets held for sale, and related liabilities, and adjustments for prior year offsetting within fiscal unities

Withholding tax and any other tax due for unremitted earnings of subsidiaries are not recognized as these earnings are assumed to be permanently invested. The portion of the deferred tax liabilities that is expected to be recovered within 12 months amounts to € 24.7 million (2016: € 21.6 million), the portion of the deferred tax assets that is expected to be recovered within 12 months amounts to € 80.2 million (2016: € 79.1 million).

Unused tax losses for which deferred tax assets have not fully been recognized are as follows:

Expiration	2017	2016
2017	-	9.7
2018	8.7	11.3
2019	6.9	11.3
2020	11.6	17.0
2021	23.5	31.8
2022 and further years	249.5	153.2
No expiration date	500.7	470.4
	800.9	704.7

Deferred tax assets for which the utilization is dependent on future taxable profits in excess of the profits arising from the reversal of existing taxable temporary differences amount to € 114.0 million (2016: € 151.8 million).

Deferred tax assets of € 68.9 million (2016: € 74.0 million) relate to entities which suffered a loss in either the current or the preceding period. Their recognition is supported by projections of future taxable income. Unused tax losses with no expiration date include tax losses relating to acquired entities. These tax losses relate to business models which were different than the activities of the entity at the moment of acquisition. This is an important reason for the fact that these losses have not been valued.

Unused tax credits for which deferred tax assets have not been fully recognized are not significant.

18. Pension benefits

he Company has both defined benefit and defined contribution plans. T

Defined benefit plans

Defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The pension charges for defined benefit plans are based on actuarial calculations and calculated in accordance with the projected unit credit method. Under this method, the cost of providing pensions is charged to the consolidated statement of income so as to spread the regular costs over the service lives of employees in accordance with the advice of independent qualified actuaries who carry out a full valuation of the plans every year. The pension obligation is measured as the present value of the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related liability. The plan assets are measured at fair value. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Past service costs are recognized immediately in the consolidated statement of income.

Defined contribution plans

A defined contribution plan is a pension plan under which the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

Critical accounting estimates and judgements

The defined benefit obligation is determined on the basis of assumptions for future developments in variables such as salary increase, price index increase, life expectancy and discount rate. All assumptions are assessed at the reporting date. Changes in the assumptions may significantly affect the liabilities and pension costs under the defined benefit plans. The weighted average of these assumptions as well as sensitivities of key assumptions are disclosed in this note.

The net amounts recognized in the statement of financial position for pension benefits are as follows:

	Dec. 31,	Dec. 31,
	2017	2016
Pension benefit assets	86.4	72.1
Pension benefit liabilities	(248.2)	(285.8)
	(161.8)	(213.7)

The net pension benefit liability consists of:

	Dec. 31, 2017	Dec. 31, 2016
Present value of funded obligations	(1,425.6)	(1,376.1)
Fair value of plan assets	1,389.8	1,294.2
Surplus/(deficit) of funded obligations	(35.8)	(81.9)
Present value of unfunded obligations	(122.3)	(126.8)
Total defined benefit plans	(158.1)	(208.7)
Defined contribution plans	(3.7)	(5.0)
Net asset/(liability) in the statement of financial position	(161.8)	(213.7)

Pension benefit liabilities

The Dutch pension fund Stichting Pensioenfonds Vopak (the 'Vopak pension fund') represents 73.1% of the total defined benefit obligation. Plan participants are insured against the consequences of old age, disability and death. The employer and employees each pay contributions to the pension plan.

The Vopak pension fund has the legal structure of a foundation. The (actuarial) risks related to the pension plan consist of demographic risks (primarily life expectancy) and financial risks (primarily discount rate and return on plan assets) and are regularly reviewed by the board of trustees. The board of trustees is the most senior governing body of the Vopak pension fund and is composed of equal numbers of employer and employee representatives (including pensioners). Pension plans in the Netherlands are subject to the Pension Act which includes the Financial Assessment Framework. This framework sets out minimum and buffer requirements for pension funds. A pension fund's financial position is reflected mainly in the funding level. This expresses the relationship between the fair value of plan assets and the present value on a local basis of the

benefits relating to past service, averaged over the last twelve months. The minimum required funding level for the Vopak pension fund is 104%. In addition, a pension fund must hold sufficient buffers (equity) to be able to cope with financial setbacks. The greater the investment risks in the pension fund, the higher the buffer requirements. The buffer requirement for the Vopak pension fund is 116%. The Vopak pension fund had a funding level of 112% at year-end 2016. Averaged out over the last twelve months the funding level at year-end 2016 amounted to 109%. The funding level at December 31, 2017, was calculated preliminarily at 118%. Averaged out over the last twelve months the funding level at year-end 2017 amounted to 116%. At year-end 2017 the Vopak pension fund holds sufficient buffers and therefore a recovery plan is no longer applicable.

Pension supervision in the Netherlands

Pension funds in the Netherlands are overseen by the Authority for the Financial Markets (AFM) and the DNB. An annual report including an actuarial review on the plan is prepared in accordance with legal requirements. Additional reports are prepared periodically in accordance with IFRS requirements.

Pension benefit assets

The pension benefit assets of € 86.4 million relates for € 27.3 million to the surplus of a pension plan which currently has no participants and for € 59.1 million to a surplus of a pension fund in the Netherlands (the 'pension fund') that insures its participants against the consequences of old age, death and disability. The Company and its employees currently do not pay contributions to these pension plans.

The pension fund, which represents 5.3% of the total defined benefit obligation, has the legal structure of a foundation. The (actuarial) risks related to the pension plan consist of demographic risks (primarily life expectancy) and financial risks (primarily discount rate, future increases in salaries, and return on plan assets) and are regularly reviewed by the board of the pension fund. The board of the pension fund is the most senior governing body of the pension fund and is composed of equal numbers of employer and employee representatives (including pensioners). Modification of the pension plan requires the approval of the Company. The minimum required funding level for the pension fund is 104%. The pension fund had a funded level of 184% at yearend 2016. The funding level at December 31, 2017, was preliminary calculated at 212%. The pension asset is calculated, in accordance with IFRIC 14, as the lower of the surplus and the present value of the future service cost using assumptions (including the discount rate) consistent with those used to determine the defined benefit obligation, taking into account minimum funding requirements.

Multi-employer plans

Multi-employer pension plans are defined benefit plans classified as defined contribution, as the information received from these plans is not detailed per employee and per company. In case of a deficit in the multi-employer plans, future pension premiums may increase.

For one multi-employer plan in the Netherlands the share of premiums contributed by a consolidated subsidiary, as part of total premiums paid to the plan by all participating employers in the plan, is significant. During the fourth quarter of 2017 this plan communicated a funded level of 108% (2016: 102%) compared to a required 113%. The plan has submitted a recovery plan to the DNB in 2016 as it holds insufficient buffers. The exposure for the Company's subsidiary is limited to potential increases in future pension premiums. The expected contribution to this plan by the respective subsidiary in 2018 is approximately € 4 million.

The movement in the provision for defined benefit plans is as follows:

	2017	2016
Balance on January 1	(208.7)	(150.2)
Pension charge defined benefit plans	(43.2)	(35.6)
Consolidation	(23.9)	-
Contributions	27.8	25.6
Remeasurement effects	85.6	(48.4)
Exchange differences and other	4.3	(0.1)
Balance on December 31	(158.1)	(208.7)

In 2017 the remeasurement effects of € 85.6 million are primarily the result of higher returns on plan assets. In 2016 the remeasurement effects of € (48.4) million were primarily the result of lower discount rates.

The amounts recognized in the consolidated statement of income are as follows:

2017	2016
	29.6
	-
	4.4
	-
1.5	1.6
	35.6
39.6	40.6
82.8	76.2
	36.7 1.5 4.2 (0.7) 43.2

Other costs mainly include costs related to defined contribution plans and multi-employer plans classified as defined contribution plans, as referred to above.

Movements in the defined benefit obligation, for both funded and unfunded plans, and plan assets are as follows:

	Plan assets		Obligation
	2017	2016	2017	2016
Balance on January 1	1,294.2	1,221.1	1,502.9	1,371.3
Consolidation	40.0	-	63.9	-
Service cost	-	-	38.2	29.6
Interest income	25.9	28.1	-	-
Interest expense	-	-	30.1	32.5
Employer contributions	27.8	25.6	-	-
Employee contributions	2.3	1.4	2.3	1.4
Return on plan assets (excluding
amounts included in interest income)	68.0	68.6	-	-
Experience adjustments	-	-	(18.8)	3.5
Change in financial assumptions	-	-	2.5	112.0
Change in demographic assumptions	-	-	(1.3)	1.5
Plan amendments, settlements and
curtailments	(3.5)	-	(4.2)	-
Benefits paid	(53.7)	(53.0)	(53.7)	(53.0)
Reclassification to held for sale	-	-	-	0.1
Exchange differences and other	(11.2)	2.4	(14.0)	4.0
Balance on December 31	1,389.8	1,294.2	1,547.9	1,502.9

The line "Consolidation" relates to the acquisition of Visilab by GrandVision.

Benefits paid for unfunded plans amount to € 6.4 million (2016: € 6.1 million). This amount is included in employer contributions.

The Company expects to contribute € 11.5 million to defined benefit plans in 2018.

Early 2018 Vopak reached an agreement with the labor unions and the works council regarding a new pension plan in the Netherlands effective per January 1, 2018. This new pension plan is expected to qualify as a defined contribution plan and this will result in the settlement of the pension liability of the Dutch pension fund of Vopak during 2018. The net pension liability of this pension fund amounted to € 54.2 million per year-end 2017. As a result, the pension expenses for the defined benefit plans of Vopak are expected to decrease from € 35.5 million in 2017 to approximately € 6.6 million in 2018. Furthermore, the pension costs recognized for this plan in the financial statements will, as of 2018, equal the contributions paid to the Dutch pension fund. The expected regular contribution to be paid to the Dutch pension plan in 2018 amounts to € 24.7 million. The settlement of the pension liability may also lead to a final funding payment to this pension fund. The expected gain resulting from the settlement of the pension liability will be classified as an exceptional item in 2018.

The expected maturity analysis of undiscounted pension benefits is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Less than 1 year	49.4	49.0
1-2 years	51.1	51.1
2-5 years	153.4	64.0
> 5 years	2,072.1	2,265.6
	2,326.0	2,429.7

The principal weighted-average assumptions used were:

	Dec. 31, 2017	Dec. 31, 2016
Discount rate/return on assets	1.92%	1.97%
Future inflation rate	1.80%	1.84%
Future salary increases	2.83%	2.94%
Life expectancy in years:
Age 65 for men	21.6	21.4
Age 65 for women	24.1	23.8
Age 65 in 20 years for men	23.9	23.7
Age 65 in 20 years for women	26.3	26.2

The latest available mortality tables were used. The discount rates used in the determination of defined benefit obligations and pension charges are based on high quality corporate bonds (AArated) with a duration matching the duration of the pension benefit liabilities.

Plan assets include as of December 31, 2017:

	Level 1	Level 2	Level 3	Total	Total (%)
Equity instruments	472.8	0.1	-	472.9	34.0%
Debt instruments	420.5	246.9	-	667.4	48.0%
Cash and cash equivalents	121.0	-	-	121.0	8.7%
Other	70.0	58.5	-	128.5	9.3%
	1,084.3	305.5	-	1,389.8	100.0%

Plan assets included as of December 31, 2016:

	Level 1	Level 2	Level 3	Total	Total (%)
Equity instruments	457.3	-	-	457.3	35.3%
Debt instruments	424.7	233.7	-	658.4	50.9%
Cash and cash equivalents	92.9	-	-	92.9	7.2%
Other	64.4	21.2	-	85.6	6.6%
	1,039.3	254.9	-	1,294.2	100.0%

Other assets mainly represent assets at insurance companies with respect to vested benefits, real estate and derivatives.

The sensitivity of the defined benefit obligation to changes in the weighted-average principal assumptions is as follows:

		Impact on obligation
	Change	Increase	Decrease
Discount rate/return on assets	1.00%	(251.2)	332.0
Future inflation rate Future salary increases	1.00% 0.25%	288.4 4.8	(221.2) (4.8)
Life expectancy	1 year	58.8	N/A

The plan liabilities are calculated using a discount rate set with reference to high quality corporate bond yields. If plan assets underperform this yield, this will create a deficit. A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans' bond holdings. The majority of the plans' obligations are to provide benefits for the lifetime of the members, therefore increases in life expectancy will result in an increase in the plans' liabilities.

19. Provisions

provision is recognized for a present legal or constructive obligation as a result of past events, when it is more likely than not that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognized as interest expense. A

Provisions are presented in the statement of financial position as follows:

	Dec. 31, 2017	Dec. 31, 2016
Current Non-current	79.7 85.7	89.1 53.6
	165.4	142.7

	Environmental	Employee related	Warranties	Regulatory	Other	Total
Balance on January 1, 2016	24.3	13.1	27.2	68.0	38.8	171.4
Addition to provision	2.7	27.9	4.5	15.5	7.7	58.3
Consolidation	-	-	(0.3)	-	(7.3)	(7.6)
Utilized during the year	(3.1)	(26.9)	(4.4)	(9.8)	(10.6)	(54.8)
Exchange differences	0.4	-	-	0.7	0.7	1.8
Released	(2.0)	(1.0)	(1.3)	(7.9)	(0.4)	(12.6)
Reclassifications and other movements	0.2	(0.3)	(6.3)	-	(7.4)	(13.8)
Balance on December 31, 2016	22.5	12.8	19.4	66.5	21.5	142.7
Balance on January 1, 2017	22.5	12.8	19.4	66.5	21.5	142.7
Addition to provision	0.5	31.9	5.0	25.2	19.8	82.4
Consolidation	-	-	-	-	0.3	0.3
Utilized during the year	(5.0)	(24.9)	(4.7)	(7.9)	(11.0)	(53.5)
Exchange differences	(1.1)	(0.3)	(0.1)	(1.2)	(0.4)	(3.1)
Released Reclassifications and other	(1.0)	(1.5)	(0.2)	(1.8)	(0.8)	(5.3)
movements	0.1	2.5	-	(2.0)	1.3	1.9
Balance on December 31, 2017	16.0	20.5	19.4	78.8	30.7	165.4

The breakdown and movement in provisions is as follows:

Regulatory

This line item includes a provision for potential fines in connection with an investigation in France by the French Competition Authority (FCA) and relates to GrandVision and Safilo. In June 2009, the FCA began investigations into certain optical suppliers and optical retailers active in the branded sunglasses and branded frames sector in France, including GrandVision and Safilo. The authorities are investigating whether these parties have entered into vertical restraints in relation to the distribution of branded sunglasses and branded frames. In May 2015, GrandVision and Safilo received a statement of objections ('notification de griefs') from the FCA, which contains the FCA's preliminary position on alleged anti-competitive practices and does not prejudice its final decision. If the FCA concludes that there was a violation, it will impose a fine, which may be contested in court. GrandVision and Safilo have examined the FCA's preliminary findings reported in the statement of objections and a provision has been recorded, determined by an assessment of the probability and amount of potential liability. A report dated July 21, 2016, was received from the FCA, reconfirming the accusation and confirming the assumptions of the probability and amount of the potential liability. On December 15, 2016, a hearing was held before the FCA during which all parties were given the opportunity to defend their case. On February 24, 2017, the FCA decided to refer the entire case back for further investigation to the FCA's investigation services, without imposing any sanction on any of the companies currently under investigation.

Regulatory provisions also include legal and claims-related provisions.

20. Debt and other financial liabilities

ebt and other financial liabilities are initially recognized at fair value, less any directly related transaction costs. Certain debt is designated as being part of a fair value hedge relationship. In these cases, the debt is carried at amortized cost, adjusted for the fair value of the risk being hedged, with changes in value shown in the consolidated statement of income. Other debt and financial liabilities are subsequently carried at amortized cost, using the effective interest method. Convertible (equity-linked) borrowings which include a cash-settlement option are carried at amortized cost using an effective interest rate deemed appropriate for the risk profile of an equivalent financial instrument without the conversion component. D

Debt and other financial liabilities are classified as current unless the Company has an unconditional right to defer settlement until at least twelve months after statement of financial position date.

Fees paid with respect to loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.

Other financial liabilities include contingent considerations related to acquisitions and obligations to acquire non-controlling interests from management of certain subsidiaries. Both are initially recognized and subsequently measured at fair value with remeasurements differences recorded as financial income or expense in the consolidated statement of income. Refer to note 36 on fair value measurement.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership. Assets held under finance leases are initially recognized at the lower of fair value at the date of commencement of the lease and the present value of the minimum lease payments. Subsequent to initial recognition, these assets are accounted for in accordance with the accounting policy relating to that specific asset. The corresponding liability is included in other financial liabilities. Lease payments are apportioned between finance costs in the income statement and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.

At December 31, 2017, debt and other financial liabilities is comprised of:

	Dec. 31, 2017	Dec. 31, 2016
Debt Other financial liabilities	3,460.8 111.6	3,891.4 176.2
	3,572.4	4,067.6

	Dec. 31, 2017	Dec. 31, 2016
Non-current debt and other financial liabilities
Mortgage loans	351.7	409.8
Private placements	1,464.0	1,843.5
Other loans	710.8	716.8
Total non-current debt	2,526.5	2,970.1
Non-current other financial liabilities	81.0	158.2
Total non-current debt and other financial liabilities	2,607.5	3,128.3
Current debt and other financial liabilities
Bank overdrafts	226.3	228.9
Bank loans	149.9	245.9
Current portion of long-term debt	68.5	65.7
Commercial paper	398.9	342.0
Other current loans	90.7	38.8
Total current debt	934.3	921.3
Current other financial liabilities	30.6	18.0
Total current debt and other financial liabilities	964.9	939.3
Total debt and other financial liabilities	3,572.4	4,067.6

The summary of debt per currency is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Euro	1,732.4	1,511.4
U.S. dollar Singapore dollar	1,429.3 68.9	2,066.3 88.6
Other currencies	230.2	225.1
	3,460.8	3,891.4

Mortgage loans are secured by mortgages and pledges on vessels, real estate, inventory and receivables with a corresponding carrying value of € 616.6 million (2016: € 601.0 million). These are non-possessory pledges which means that only in case of default under the mortgage loan agreements, the lender will have the right to sell the vessels, real estate or inventory and receive the cash flows from the receivables. The other loans are secured to an amount of € 326.1 million (2016: € 320.3 million) by non-possessory pledges on machinery and equipment, receivables, inventories and other current assets.

The debt position relates for € 1,664 million (48.1%) to Vopak (2016: € 2,110 million, 54.2%). This debt mainly consists of unsecured private placements in the U.S. and Asian markets. The average remaining maturity at the end of 2017 was 7.7 years (2016: 7.9 years). In 2017, Vopak voluntarily prepaid a U.S. private placement of US\$ 200 million (€ 169.8 million) with contractual maturity dates in 2019 and 2022. In relation to this repayment, a make-whole amount of € 17.2 million was included in financial expense in the consolidated statement of income.

Debt also includes a € 150 million unsecured, unsubordinated equity-linked bond issued by Safilo (the 'Bond'), maturing on May 22, 2019, with a coupon of 1.25% per annum. The Bond is convertible into ordinary shares of Safilo Group S.p.A. at a conversion price of € 21.8623 per share. At final maturity, the Bond will be redeemed at its principal amount unless previously

redeemed, converted or purchased and cancelled. Safilo will have the option to redeem any outstanding Bonds at their principal amount (plus accrued but unpaid interest) on or after June 6, 2017, if the volume-weighted average price of a share for a specified period is at least 130% of the conversion price in effect on each relevant dealing day. Safilo may also redeem the Bonds at any time at their principal amount (plus accrued but unpaid interest) if less than 15% of the Bonds originally issued remain outstanding. The conversion component represents an embedded derivative financial instrument, disclosed in note 8.

For 100% of the bank debt, the applicable covenants were complied with during 2016 and 2017. The table below provides details on certain company-specific covenants that applied in 2017.

	Debt	Required	Actual
GrandVision syndicated facility	375.0
Maximum net debt:EBITDA ratio		3.25	1.50
Minimum interest cover ratio		5.00	37.50
Vopak	1,636.8
Maximum senior net debt:EBITDA ratio		3.75	2.02
Minimum interest cover ratio		3.50	6.40
Other	1,449.0
Total debt	3,460.8

Included in other financial liabilities is the obligation to acquire equity instruments in certain subsidiaries from the management of these subsidiaries and liabilities related to share-based payment plans for an aggregate amount of € 24.8 million (2016: € 28.0 million), of which € 13.1 million (2016: Є 16.1 million) is included as non-current liabilities. Reference is made to note 34 on share-based compensation. Also included are earn-out and deferred/contingent payments with respect to acquisitions for € 70.5 million (2016: € 92.1 million). These liabilities expire during 2018, 2019 and 2021.

The fair value of debt and other financial liabilities is disclosed in note 36.

21. Accrued expenses

ccrued expenses consist of: A

	Dec. 31, 2017	Dec. 31, 2016
Employee-related accruals	273.5	251.6
Customer prepayments	61.1	42.3
VAT and other tax liabilities	64.9	61.9
Deferred revenue	151.0	146.9
Other	329.3	356.5
Total accrued expenses	879.8	859.2

22. Revenues

evenue is recognized at the fair value of consideration received or receivable for the sale of products or rendering of services in the period in which they occur. Revenue is shown net of sales tax, returns, rebates and discounts and after eliminating intercompany revenues. R

Sale of goods

Revenue is recognized when the amount of revenue can be reliably measured, the risks and rewards of the underlying products have been substantially transferred to the customer and it is probable that the economic benefits associated with the transaction will flow to the Company. Depending on individual customer terms, this can be at the time of dispatch, delivery or upon formal customer acceptance. If sold with a right of return, accumulated experience is used to estimate and provide for such returns at the time of sale.

Retail sales are recorded at the amount of the sale, including (credit card) fees payable for the transaction, when the sales process is complete. As a result, any prepayments by customers are not considered as revenue but are accounted for as liabilities.

Rendering of service

Revenue is recognized when the amount of revenue can be reliably measured, it is probable that the economic benefits associated with the transaction will flow to the Company and the stage of completion of the transaction can be measured reliably as well as the costs associated with the transaction. With respect to debt collection activities, the stage of completion and the possibility to recover recharged expenses is determined per individual debt collection file. Tank rentals, including minimum guaranteed throughputs, are recognized on a straight-line basis over the contractual period. Revenues from excess throughputs and other services are recognized on completion of the services. If the revenue cannot be reliably measured, only the income up to the level of the expenses to be claimed will be recognized. Modifications of property, plant and equipment paid upfront by customers are accounted for as prepaid revenues and recognized in the consolidated statement of income over the contractual period on a straight-line basis.

Franchise fee income

Revenue is recognized when the amount of revenue can be reliably measured and it is probable that the economic benefits associated with the transaction will flow to the Company. Franchise fees are recognized on an accrual basis in accordance with the terms of the respective agreements.

The Company's revenue can be divided as follows:

	2017	2016
Sale of goods	6,086.2	6,235.3
Services	1,750.4	1,713.1
Franchise fees	68.8	69.0
Other operating income	64.9	15.7
	7,970.3	8,033.1

Other operating income for 2017 includes € 43.0 million related to compensation for early termination of the Gucci license at Safilo. The total compensation amounts to € 90 million of which € 8 million was received in 2016 and € 39 million is receivable in 2018, this amount is included in other financial assets.

23. Income from marketable securities and deposits

ncome from marketable securities and deposits includes realized capital gains and losses, impairment losses, interest, dividends and management fees. I

Realized capital gains and losses are calculated on an average-cost basis. Interest income on financial instruments recorded at amortized cost is recognized on an accrual basis, using the effective interest rate method. Dividends and interest on available-for-sale financial instruments are recognized when the right to receive payment is established.

	2017	2016
Capital gains/(losses)	63.4	15.8
Interest income	0.3	1.8
Dividends	16.7	1.8
Management fees	(1.1)	(0.9)
	79.3	18.5

24. Share of results from associates and joint ventures

ssociates and joint ventures are accounted for using the equity method, which involves recognition in the consolidated statement of income the Company's share of the net result of the associate or joint venture. When the Company's share of losses exceeds the carrying amount of an equity-accounted investment, including any unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the company in question. Significant unrealized gains on transactions between the Company and its associates and joint ventures are eliminated to the extent of the Company's interest in the specific company. Significant unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Dilution gains and losses arising on associates and joint ventures are recognized in the income statement. A

	2017	2016
Share of results	172.5	(66.9)
Revaluation upon gaining control	37.9	7.9
Impairments	(91.8)	(63.1)
Reversal of impairments	-	3.0
	118.6	(119.1)

The 2017 revaluation gain on the step-up acquisition of Visilab in 2017 includes recycling of € 13.2 million of currency results from equity. The revaluation in 2016 related to the revaluation of previously held interests in Atlas Services Group Holding B.V. and Infomedics Groep B.V., upon gaining control over these companies.

For details on impairments, reference is made to note 35.

25. Income from other financial assets

nterest income on loans granted is recognized on an accrual basis, using the effective interest method. Interest and dividend income on available-for-sale instruments is recognized when the right to receive payment is established. I

	2017	2016
Interest income on loans and debt portfolio Dividends	7.3 8.1	10.8 5.9

	15.4	16.7

26. Income from real estate activities

ncome from real estate activities includes rental income less related operation costs, excluding depreciation. Income also includes realized results on the sale of real estate assets. Rental income is recorded on a straight-line basis over the lease term. I

	2017	2016
Capital gains Rental and residential income	- 1.9	0.8 1.8
Operating expenses	(0.7)	(0.5)
	1.2	2.1

27. Other income

ains on the sale of assets, including associates and joint ventures, are deemed realized at the time the benefits and the risks of the assets are entirely borne by the buyer and there is no uncertainty as to whether the agreed payment is received. Gains on the sale of subsidiaries are realized at the time control is no longer exercised. G

Other income relates to the following:

	2017	2016
Gain on sale of AudioNova International B.V.	-	491.0
Gain on assets held for sale Vopak, net	26.0	286.6
Gain on sale of InVesting B.V.	-	38.7
Gain on sale of N.V. Nationale Borg-Maatschappij	-	30.4
Other	4.1	2.6
Total other income	30.1	849.3

For details on disposals included in other income reference is made to note 14.

28. Employee expenses

hort-term employee benefits S

Wages, salaries, social security contributions, annual leave, sickness absenteeism, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognized as an expense as the related service is provided by the employee of the Company. A liability is recognized for the amount expected to be paid under short-term cash bonus plans if there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Termination benefits

Termination benefits are recognized as an expense when the Company and its subsidiaries are committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.

Termination benefits for voluntary redundancies are recognized as an expense if an offer has been made of voluntary redundancy, it is probable that the offer will be accepted and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting period they are discounted to their present value.

Share-based compensation

The compensation cost for share-based payment plans is recognized as an expense on a straightline basis over the vesting period. The amounts expensed are adjusted over the vesting period for changes in the estimate of number of shares and the equivalent in cash that will eventually vest. Adjustments are made at the end of each reporting period to reflect expected and actual forfeitures during the vesting period due to the failure to satisfy service conditions or non-market performance conditions (e.g. profitability growth targets or continued employment over a specified time period). Refer to note 34 for more details on share-based payment plans.

Participation by management of unquoted subsidiaries

Management of certain subsidiaries own non-controlling interests in the capital of these subsidiaries. With respect to certain subsidiaries, the Company has the conditional obligation to acquire these equity instruments for cash. Obligations to acquire non-controlling interest are fair valued, generally, based on a multiple of EBITA less net debt, with measurement differences recorded as employee expense in the consolidated statement of income in accordance with IAS19. Multiples applied are either contractually determined or, generally, in accordance with those applied in the section on the estimated value of the subsidiaries and associates.

	2017	2016
Wages and salaries	1,658.2	1,674.8
Social security costs	324.7	316.8
Pension costs	82.8	76.2
Other	274.1	272.0
	2,339.8	2,339.8

The average number of persons employed by the Company and its subsidiaries during 2017 was 51,397 (2016: 49,754) on a full-time equivalent basis.

29. Other operating expenses

perating expenses, including rent and marketing, are recognized in the consolidated statement of income when incurred. O

Other operating expenses include the following:

	2017	2016
Rent	647.6	653.0
Marketing and publicity expenses	308.6	333.4
Staffing expenses Atlas Professionals B.V.	122.9	98.5
Royalty expenses	68.0	107.7
Other	836.4	862.8
	1,983.5	2,055.4

Research and development costs expensed, included in other, amounted to € 26.6 million (2016: € 27.9 million).

30. Financial income and expense

inancial income includes income on cash and cash equivalents and income on financial assets not included in marketable securities and deposits or in other financial assets. Financial expense includes net finance costs in relation to financial liabilities. Fair value changes of (embedded) derivatives not included in a hedge relationship, fair value changes of contingent consideration related to acquisitions ('earn-out' liabilities) and results from foreign currency translation of monetary items can be either financial income or expense. F

Interest income and expense on financial instruments recorded at amortized cost is recognized on an accrual basis, using the effective interest method.

Financial income and expense include:

	2017	2016
Financial expense Other financial income	226.4 39.0	215.5 63.6
Net finance costs	187.4	151.9

Financial expense includes:

	2017	2016
Interest expense	144.9	139.5
Exchange differences, net of hedges	45.8	58.0
Other	35.7	18.0
	226.4	215.5

In 2017, a make-whole payment of € 17.2 million was recognized under the finance expenses relating to the voluntary early redemption of a U.S. private placement by Vopak, refer to note 20 for details.

Other financial income includes:

	2017	2016
Interest income	10.2	15.7
Exchange differences	22.9	38.2
Fair value gain on embedded option in Safilo equity-linked bond	0.5	3.1
Revaluation of earn-out liabilities	0.9	-
Derivatives, not included in hedge accounting	-	3.8
Other	4.5	2.8
	39.0	63.6

31. Income tax expense

he current income tax charge is calculated on the basis of the tax law enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries have operations, taking into account tax-exempt income and tax losses carried forward. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretations. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. T

Income tax is recognized in the consolidated statement of income unless it relates to items recognized in the consolidated statement of comprehensive income or in the consolidated statement of changes in equity. Where the final outcome of tax-related provisions is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

Critical accounting estimates and judgements

Significant judgement is required in determining the worldwide provision for income tax, as subsidiaries are subject to income taxes in numerous jurisdictions. There are many transactions and calculations for which the ultimate tax determination is uncertain. Provisions for anticipated tax audit issues are recognized based on management's estimates of whether additional taxes will be due.

	2017	2016
Current income taxes	217.3	206.2
Deferred income taxes	(30.8)	1.7
	186.5	207.9

In 2017, gains were recognized in the income tax line related to (future) decreases in (enacted) tax rates in the United States of America, Belgium and Italy. These rate decreases primarily impacted Vopak (€ 34.6 million).

Income taxes differ from the theoretical amount that would arise using the domestic tax rates applicable to profits of taxable entities in the countries concerned, as follows:

			2017	2016
Profit before income tax Less: after-tax share of results from associates and joint ventures Less: non-taxable other income (sale of subsidiaries and associates)			779.8 (118.6) (30.1)	1,485.7 119.1 (849.3)
Adjusted profit before income tax			631.1	755.5
Income tax expense			186.5	207.9
Effective tax rate (%)			29.6	27.5

	2017		2016
Composition	Amount	%	Amount	%
Weighted-average statutory tax rate	169.5	26.9	201.0	26.6
Goodwill impairment	21.4	3.4	1.2	0.2
Recognition of tax losses	48.7	7.7	33.2	4.4
Non-taxable income	(23.6)	(3.7)	(36.1)	(4.8)
Non-deductible expenses	23.2	3.7	33.4	4.4
Prior year movements	(13.9)	(2.2)	(13.0)	(1.7)
Rate changes and other effects	(38.8)	(6.2)	(11.8)	(1.6)
Effective tax (rate)	186.5	29.6	207.9	27.5

Other effects include the effect of changes in tax rates and income tax on intra-group dividends.

Taxes recognized in other comprehensive income:

	2017	2016
Deferred tax
On changes in the fair value of cash flow hedges	0.6	3.1
On translation and related hedges	(1.3)	(7.3)
On changes in the fair value of available-for-sale financial assets	0.4	(4.3)
On changes in defined benefit obligations	(25.6)	12.3
	(25.9)	3.8
Current tax
On changes in the fair value of cash flow hedges	-	(1.4)
On translation and related hedges	(4.7)	4.6
	(4.7)	3.2
	(30.6)	7.0

32. Earnings per Share

arnings per Share for profit attributable to the owners of parent are calculated by dividing the profit attributable to the owners of parent by the time-weighted average number of outstanding Shares. The calculation of the previous year earnings per Share is adjusted to take into account the stock dividend paid in the current year, in respect of the previous year, in accordance with IAS 33.64. E

The calculation of the time-weighted average number of outstanding shares is as follows:

x 1,000	2017	2016
Issued and outstanding Shares at January 1	78,464	76,233
Sale and transfer of treasury shares	2	1
Purchase of treasury shares	-	(6)
Shares granted to a member of the Executive Board	-	31
Dividend paid in stock	815	1,161
Average number of outstanding Shares	79,281	77,420

There was no dilutive effect on earnings per Share in the years presented.

33. Cash flows from operating activities
Cash flows from operating activities		2017	2016
Profit before taxes		779.8	1,485.7
Depreciation and impairments		492.1	486.8
Amortization and impairments	4	199.8	109.8
(Profit)/loss on sale of property, plant, equipment and
investment properties		(0.2)	(0.5)
(Profit)/loss on sale of other financial assets and marketable
securities		(63.4)	(15.8)
Fair value gain on remeasurement of previously held equity
interest	24	(24.7)	(7.9)
Results from associates and joint ventures, net of
impairments	24	(93.9)	127.0
(Profit)/loss on assets and liabilities held for sale	14,27	(29.9)	(849.3)
Net financial expense	30	187.4	151.9
Other movements in provisions and pension benefits		2.3	(12.8)
Dividend from associates and joint ventures		88.5	127.2
Changes in working capital		(158.3)	2.9
Cash generated from operating activities		1,379.5	1,605.0

Changes in working capital in the consolidated statement of cash flows exclude exchange differences and the effect of acquisitions.

	2017	2016
Accounts receivable	51.5	(19.1)
Inventories	(68.8)	(63.1)
Other current assets	(49.3)	(77.0)
Accounts payable	(50.4)	111.2
Accrued expenses	(41.3)	50.9
	(158.3)	2.9

34. Share-based compensation

he Company and its subsidiaries operate a number of equity-settled and cash-settled sharebased compensation plans. Under the plans these entities receive services from employees as consideration for respectively ordinary shares of the respective entity or for the cash equivalent to the value of the underlying ordinary shares of the respective entity. T

For equity-settled share-based compensation plans, the fair value is determined at the date of grant and expensed in the consolidated statement of income with a corresponding adjustment directly in equity. For cash-settled share-based compensation plans, the fair value is determined at the date of the grant and is re-measured at each reporting date until the liability is settled.

The compensation cost is recognized as an expense on a straight-line basis over the vesting period. The amounts expensed are adjusted over the vesting period for changes in the estimate of number of shares and the equivalent in cash that will eventually vest. Adjustments are made at the end of each reporting period to reflect expected and actual forfeitures during the vesting period due to the failure to satisfy service conditions or non-market performance conditions (e.g. profitability growth targets or continued employment over a specified time period).

Expenses related to share-based compensation consist of:

	2017	2016
HAL Holding N.V.
Share Plan*	1.6	1.7
GrandVision
Equity plan*	0.9	1.5
Long-Term Incentive Plan**	10.3	13.8
Vopak
Long-Term Share Plans 2015-2017*	(0.5)	3.3
Long-Term Share Plans 2015-2017***	(0.8)	3.9
Long-Term Cash Plans 2015-2017***	(0.6)	3.3
Unquoted subsidiaries
Cash Plans***	7.9	7.1
Total	18.8	34.6

* Equity-settled

** Converted to equity-settled in 2015

*** Cash-settled

Changes in equity for share-based compensation plans amounted to:

	2017	2016
HAL Holding N.V.
Share Plan	1.6	1.7
GrandVision
Equity plan	0.9	1.5
Long-Term Incentive Plan	10.3	13.7
Vopak
Long-Term Share Plans 2015-2017	(0.5)	3.2
	12.3	20.1

Liabilities recognized in relation to cash-settled share-based compensation are comprised of:

	Dec. 31, 2017	Dec. 31, 2016
GrandVision
Long-Term Incentive Plan	-	0.2
Vopak
Long-Term Share Plans 2015-2017	1.0	7.2
Long-Term Cash Plans 2015-2017	1.2	7.4
Unquoted subsidiaries
Cash Plans	22.6	13.2
	24.8	28.0

The current part of this liability of € 11.7 million (2016: € 11.9 million) is included under current other financial liabilities and the non-current part of € 13.1 million (2016: € 16.1 million) under non-current other financial liabilities.

HAL Holding N.V.

The HAL Supervisory Board has the power to grant Executive Board members shares HAL Trust.

The granted shares can be summarized as follows:

x 1,000	2017	2016
Outstanding shares on January 1	59	89
Granted	-	20
Vested	-	(50)
Outstanding shares on December 31	59	59

On May 18, 2016, the Supervisory Board resolved to grant Mr. M.F. Groot, chairman of the Executive Board, 20,000 shares HAL Trust, under the condition precedent that he is still employed with the Company on June 1, 2021. These shares are restricted until June 1, 2026. The fair value of the shares granted of € 149.40 has been determined based on the HAL Trust share price at the grant date, reduced with the expected discounted future dividends payable during the respective vesting period since Mr. M.F. Groot is not entitled to receive dividends during the vesting period.

The Supervisory Board resolved, on November 19, 2014, to grant each of Messrs. A.A. van 't Hof and J.N. van Wiechen, members of the Executive Board, a one-time allotment of 19,500 shares HAL Trust. The shares need to be returned to the Company if the respective Board member is not employed by the Company on or before November 19, 2019. The above shares are restricted until November 19, 2024.

On May 18, 2011, the Supervisory Board resolved to grant Mr. M.F. Groot, chairman of the Executive Board, 50,000 shares HAL Trust, under the condition precedent that he would still be employed with the Company on May 18, 2016. These shares vested in 2016 and are restricted until May 18, 2021.

GrandVision

Equity plan

The equity plan provides for the purchase of GrandVision shares to eligible participants which is subject to a vesting term and holding conditions. Vesting of awards made under the equity plan is subject to a vesting condition that can vary from 3 to 5 years. Awards are no longer granted under the equity plan since February 6, 2015, when the company's shares were listed on Euronext Amsterdam.

The shares granted under the equity plan can be summarized as follows:

x 1,000	2017	2016
Outstanding shares on January 1	1,065	2,081
Settled	(605)	(1,016)
Outstanding shares on December 31	460	1,065

Out of the shares outstanding under the equity plan at December 31, 2017, for 168,930 (2016: 480,920) the vesting period has ended.

Long-Term Incentive Plan (LTIP)

The LTIP represents conditional share and option awards. Option awards are in the form of stocksettled share appreciation rights, meaning that at exercise the participant receives shares which are in total equal in value to the total value of the exercised options.

Until the listing of GrandVision's shares in February 2015, eligible participants were granted a combination of (cash-settled) phantom shares and phantom options. Upon the moment of listing, the majority of these plans were converted to equity-settled long-term incentive plans. Since the listing of the GrandVision's shares, only (equity-settled) conditional share and option awards have been granted to eligible participants. The cash-settled plans were fully settled in 2017.

The outstanding conditional shares and options can be summarized as follows:

x 1,000	LTIP shares	LTIP options	Average exercise price
Outstanding on January 1, 2016	1,362	1,578	6.94
Adjustment for performance conditions	76	187	6.66
Granted	256	144	27.47
Forfeited	(126)	(95)	6.10
Settled	(325)	(758)	6.64
Outstanding on January 1, 2017	1,243	1,056	10.33
Granted	265	363	25.43
Forfeited	(107)	(55)	6.59
Settled	(785)	(715)	24.53
Outstanding on December 31, 2017	616	649	21.71

The weighted average fair value of the share awards granted in 2017 at grant date is € 23.50 (2016: € 23.32). The weighted-average fair value of the option awards granted during 2017 at grant date is € 3.20 (2016: € 2.83).

The fair value of these option awards was estimated using the Black-Scholes-Merton option pricing model. The main market inputs used in the model were annual risk-free rates between (0.36)% and 0.15%, expected volatilities between 22.1% and 25.2%, a dividend yield between 0.7% and 1.7% and a share price of € 20.00 to € 23.50. The expected volatility applied is based on the weighted-average historical volatility of closing prices of GrandVision and a group of comparable, listed companies.

The weighted-average share price of GrandVision at the date of exercise for option awards exercised in 2017 was € 23.12 (2016: € 24.97). Out of the share awards outstanding at December 31, 2017, none were vested (2016: nil). Option awards outstanding at December 31, 2017, have an exercise price between € 5.98 and € 27.47. Out of the option awards outstanding at December 31, 2017, 139,736 were exercisable (2016: 130,232). The weighted-average exercise price of these exercisable option awards was € 6.37 (2016: € 5.99). As of December 31, 2017, the weightedaverage remaining contractual life for all outstanding option awards was 3.0 years (2016: 1.1 years).

Vopak

Long-Term Share Plan (LTSP)

The LTSPs 2015, 2016 and 2017 reward participants for the increase in Vopak's earnings per share (Vopak's EPS) performance during a three-year performance period, respectively from 2015 to 2017, 2016 to 2018 and 2017 to 2019 at a pre-set Vopak EPS target. If a considerable, ambitious improvement in Vopak's EPS has been achieved during the three-year performance period, a long-term remuneration will be awarded. The 2014 LTSP was vested and settled during 2017.

The conditional awards granted under the LTSPs 2015-2017 can be summarized as follows:

x 1,000	2017	2016
Outstanding conditional awards on January 1	366	275
Granted	86	94
Forfeited	(2)	-
Settled	(194)	-
Other changes	(1)	(3)
Outstanding conditional awards on December 31	255	366

The weighted-average fair value of the equity-settled LTSP awards granted in 2017 of € 39.74 (2016: € 34.42) has been determined based on Vopak's share price at the grant date, reduced with the expected discounted future dividends payable during the respective vesting periods since the participants are not entitled to receive dividends during the vesting period.

Long-Term Cash Plan (LTCP)

For Vopak senior managers who are not eligible to participate under the LTSP but who contribute significantly to Vopak's shareholder value, three-year cash plans have been granted. These plans provides for additional pay in the form of deferred compensation under the terms and conditions of the plan after the vesting period. The financial performance is measured by Vopak's EPS growth during the three-year performance period.

Safilo

Stock Option Plan (SOP)

The options granted to the beneficiaries of the SOP 2010-2013, 2014-2016 and 2017-2020 may be exercised after a minimum of two to three years from the grant date. The plans have a duration between nine and eleven years.

The options attributed will vest when the following vesting conditions are met: (1) continued employment at the options' vesting date and (2) the achievement of differentiated performance objectives for the relevant period of each tranche.

During 2017, 1,020,000 options were granted with an exercise price of 6.54, an eight-year maturity and a fair value of € 1.09. The fair value of these options was estimated using the Black-Scholes model. The main market inputs used in the model were an annual risk-free rate of 0.291%, expected volatility of 32.5% and the share price at grant date of € 6.54. The expected volatility applied is based on the weighted-average historical volatility of closing prices of Safilo.

The options granted under the 2017-2020 plan can be summarized as follows:

x 1,000	2017	Average exercise price	2016
Outstanding options on January 1 Granted Forfeited	- 1,020 (130)	- 6.54 6.54	- - -
Outstanding options on December 31	890	6.54	-

The average remaining contract life of the options at year-end is 7.4 years.

The options granted under the 2014-2016 plan can be summarized as follows:

x 1,000	2017	Average exercise price	2016
Outstanding options on January 1 Granted	1,305 -	11.61	845 585
Forfeited	(540)	13.25	(125)
Outstanding options on December 31	765	10.45	1,305

Exercise prices for options outstanding at the year-end range from € 8.35 to € 15.05, similar to last year, with an average remaining contract life of 5.8 years (2016: 6.6 years). Among the options outstanding at the end of the period, 240,000 are exercisable until May 31, 2022.

The options granted under the 2010-2013 plan can be summarized as follows:

x 1,000	2017	Average exercise price	2016
Outstanding options on January 1 Exercised	453 -	8.59	600 (30)
Expired	(35)	12.55	(117)
Outstanding options on December 31	418	8.26	453

Exercise prices for options outstanding at the year-end range from € 8.05 to € 14.54, similar to previous year, with an average remaining contract life of 1.0 years (2016: 1.9 years). The options outstanding at the end of the period are exercisable until May 31, 2018, and May 31, 2019.

35. Impairment of non-current assets

ssets that have an indefinite useful life are tested for impairment annually, while all non-current assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. A

Non-financial assets

An impairment loss on non-financial assets is recognized in the consolidated statement of income for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and an asset's value in use. Goodwill is allocated to groups of cash-generating units (CGU's) for the purpose of impairment testing. A CGU is in no event larger than the operating segment it belongs to.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Available-for-sale financial assets

In the case of equity securities or fixed income securities, a significant or prolonged decline in the fair value of the security below its cost is considered in determining whether the securities are impaired. If any such evidence exists, the cumulative loss – measured as the difference between the acquisition cost and the current fair value – is recycled from equity and recognized in the consolidated statement of income. Impairment losses previously recognized in the consolidated statement of income on equity instruments are not reversed through the consolidated statement of income in subsequent reporting periods.

Loans and receivables

A provision for impairment is recognized when there is objective evidence that the Company may not be able to collect all amounts due according to the original terms. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization and default or delinquency in payments are considered indicators that the loan or receivable may be impaired. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Additions to and releases from the provision are recognized in the consolidated statement of income.

Significant accounting estimates and judgements

The recoverable amounts in impairment testing are determined based on the value in use and fair value less costs of disposal of the asset or cash-generating unit. The calculation of these values require the use of estimates.

Calculation of the value in use requires management to apply judgements around future cash flows, discount rates and growth rates. In calculating fair value less cost of disposal the selection of relevant market multiples is the primary judgement made by management. Where preliminary or indicative non-binding offers are used as inputs, management needs to assess that these offers are a good reflection of fair value.

The primary impairment test for the Company relates to annual goodwill impairment testing and the annual impairment test on indefinite-lived key money. Property, plant and equipment (i.e. terminals) as well as joint ventures are reviewed and, when required, tested. This primarily occurs at the level of Vopak whereby judgement is exercised by Vopak management. In performing the impairment test, Vopak management makes an assessment of whether the cash-generating unit (mostly an individual terminal) will be able to generate positive net cash flows that are sufficient to support the value of the intangible assets, property, plant and equipment, and financial assets. For value in use calculations, the assessment is based on estimates of future expected cash flows on the basis of the budget for the coming year and two subsequent plan years which form the basis for a 15-year discounted cash flow model. Key assumptions applied are the expected occupancy, the estimated storage rate per cbm (for revenues not covered by long-term contracts), sustaining capital expenditures, expected growth rates and the estimated terminal value after the 15-year period, together with the applied discount rates. The discount rates are based on 15-year government bonds, adjusted for a risk premium and specific country risks. The equity risk premium is assumed to be 6.0% by Vopak management (2016: 6.0%). Fair value less cost of disposal calculations are primarily based either on comparable market multiples and/or (indicative non-)binding bids or discounted cash flow models from the perspective of a willing buyer in an orderly transaction. When the fair value less cost of disposal of a terminal is based on (preliminary) offers received from interested parties, Vopak management has assessed that these offers are a good reflection of the fair value of the terminals concerned and assesses whether it is probable that these terminals will be sold in the near future resulting in a situation where the carrying amount will be recovered principally through a sale instead of by continuing use. A change in one of these assumptions could potentially lead to a future impairment.

Vopak Terminal Haiteng (China)

As a result of the incident that occurred in April 2015 at the production facility of the main customer of Vopak's associate Vopak Terminal Haiteng, as disclosed in the annual report 2016, the customer has not yet resumed operations. Based on the current facts and circumstances available, including the estimated long-term demand for the product manufactured at the facility, the technological state of the facility/terminal and information from the customer and authorities, management has assessed that it is most likely that the facility will be taken into operation again. The date on which the facility, on which the terminal is dependent, will be taken into production again is estimated by Vopak's management to be in the second half year of 2018. In the unlikely event that the production facility will not be taken into operation again, this may result in a significant impairment on Vopak's investment in the associate Vopak Terminal Haiteng, which is an industrial terminal. The maximum risk exposure amounts to the group's equity investment in the company of € 44.1 million per year-end 2017 (2016: € 54.8 million). Please note that additional proportionate shareholder funding may be required going forward in relation to required repair and maintenance. If such funding occurs, the maximum risk exposure increases and as such, the risk of impairment could increase. Furthermore, changes in the facts and circumstances, among others, related to the timing and conditions of the restart, could potentially lead to one-offs and/or exceptional losses in the coming years within the aforementioned range of the maximum exposure. A successful restart could result in additional gains from this associate, due to the fact that certain revenues, which were not recognized after the incident, could still be recovered from the associate's customers.

The following impairment losses, net of reversals, are recognized:

	2017	2016
Property, plant and equipment	5.3	6.8
Goodwill	81.6	4.2
Other intangibles	3.2	5.4
Investments in associates and joint arrangements	91.8	60.1
	181.9	76.5

Impairment losses by segment are as follows:

	2017	2016
Optical retail	41.7	7.5
Unquoted	44.5	1.3
Quoted minority interests	95.7	67.7
	181.9	76.5

Impairment losses are included as follows in the consolidated statement of income:

	2017	2016
Amortization and impairment of intangible assets	84.8	9.6
Depreciation and impairment of property, plant, equipment and
investment properties	5.3	6.8
Share of results of associates and joint arrangements	91.8	60.1
	181.9	76.5

Impairments of property, plant and equipmentand associates and joint arrangements primarily relate to Vopak and can be detailed as follows.

Property, plant and equipment

2017

Cancelled projects

In the first half year of 2017 Vopak recognized an impairment of € 2.1 million, related to a scope change of a business development project in the Netherlands.

2016

Cancelled projects

The cancellation of a business development project in the EMEA division and a scope change in a construction project in the Americas division led to a total impairment on property, plant and equipment at Vopak of € 5.3 million.

Terminals in operation

For a very limited number of terminals in operation, Vopak management has assessed, based on consistently applied methodology, that the value in use is lower than the carrying amount. For these individual terminals, the fair value less cost of disposal has been calculated in order to assess whether this value exceeds the value in use and the carrying amount of the assets. For terminals or assets which are actively being marketed by Vopak, the fair value less cost of disposal is based primarily on offers received from interested parties (level 2 fair value). For the other terminals the fair value less cost of disposal is primarily based on a combination of the estimated normalized EBITDA and transaction multiples observable in the M&A markets for comparable terminals (level 2 fair value) together with discounted cash flow models (level 3 fair value). The value in use and fair value less cost of disposal assessments may change over time and, when applicable, could result in (partial) reversal of recognized impairments. The abovementioned approach did not result in any impairment of the terminals in operation in 2017 and 2016.

Joint ventures and associates

2017

Vopak E.O.S. (Estonia)

In the fourth quarter of 2017, an impairment of the book value of the equity participation in the joint venture was recognized for the amount of € 52.0 million. The joint venture terminal Vopak E.O.S. (Vopak EMEA division) is currently under strategic review. The impairment is primarily related to a further structural deterioration of the business environment in which the terminal operates, which is heavily dependent on the flows of Russian oil products. The continued low oil product prices and premiums together with structural changes in product flows and the preference to use Russian ports for products flow from Russia, limit demand for terminal services. The overcapacity in the Baltic region has led to a further increase in competition and significant pressure on storage and terminal service rates. It is not expected that these structural adverse market circumstances will reverse in the coming years. The recoverable value was based on the value in use, Vopak management's best estimate of the future cash flows of the terminal, for which the expected performance for the coming year was the basis. In 2016 an impairment for the amount of € 55.7 million was already recognized. The carrying value of Vopak's investment in the joint venture after impairment amounted to nil at year-end 2017. Vopak has not provided any financial guarantees in relation to this joint venture and does not have any legal obligation to support the joint venture with additional funding. As such, Vopak is not exposed to further losses from this joint venture going forward. Although currently not foreseen, Vopak may decide to voluntary provide additional funding to the joint venture at a later moment.

Vopak SDIC Yangpu Terminal (China)

During 2017, an impairment was recognized on the joint venture Vopak SDIC Yangpu Terminal (Vopak Asia Division) for € 39.8 million. The terminal is currently under strategic review. Since commissioning in the third quarter of 2015, the terminal experienced mostly healthy occupancy levels. However, due to current uncertainties, market conditions and dependence on short-term trading contracts, an impairment was recognized. As part of the strategic review and discussion currently ongoing for this terminal, Vopak management is considering various options, including a divestment of the terminal. In case the future economic performance of the terminal will improve or a fair value is available that supports a higher recoverable amount, a (partial) reversal of the impairment will be recognized. The impairment was recognized based on the value in use, which includes an assumption of an unchanged oil market environment and structure, no major changes in the regulatory environment and the assumption that the terminal will continue to be operated as an independent third party storage terminal. The fair value of the terminal, taking into account the specific characteristics of the assets and their strategic value for other players and potential changes in the oil market environment may be higher than the value in use that Vopak as an independent terminal operator is able to generate from this terminal. Discussions regarding the strategic review and a potential higher fair value are not sufficiently progressed hence Vopak management based the recoverable value of the terminal on the value in use. In 2015 an impairment was recognized on this investment of € 15.0 million. The carrying value of Vopak's investment in the joint venture after impairment amounted to nil at year-end 2017. Vopak has not provided any financial guarantees in relation to this joint venture and does not have any legal obligation to support the joint venture with additional funding. Given that the terminal is under strategic review and discussions regarding the fair value continue, Vopak currently has the intention to positively consider a future decision to provide additional funding to the joint venture during 2018 for the amount of € 6.3 million. This has resulted in a constructive obligation per year-end 2017 and a corresponding loss in the net finance expenses. Any additional funding at a future date, may result in additional impairments going forward for the maximum amount of the provided additional funding

Goodwill

Vopak and Safilo are both listed entities. There is no goodwill included in the financial statements as of December 31, 2017, relating to Safilo. In its 2017 financial statements, Safilo impaired goodwill for an amount of € 192 million (2016: € 150 million). Due to the fact that HAL acquired Safilo shares below their book value, the 2017 financial statements includes no goodwill relating to Safilo. The Company performed an assessment of its investment in Safilo and concluded no other assets require impairment. The impairment test with respect to the goodwill of Vopak primarily consists of comparing the carrying value of the Company's ownership interest to the stock market value. At the end of 2017 the stock market value of the ownership interest in Vopak exceeded the carrying value by € 983.5 million. No impairment was recognized. This stock market value qualifies as level 1 in the fair value hierarchy.

Goodwill for the Optical and Unquoted segments has been tested for impairment losses at a level that reflects the way the operations are managed and with which the goodwill would naturally be associated. Management reviews the Unquoted business performance on an entity level and for Optical on a country or regional level. Goodwill is also monitored on this level.

The recoverable amount of cash-generating units is generally determined based on the calculation of their value in use. These calculations use cash flow projections covering a five-year period. Cash flows beyond this five-year period are extrapolated using an estimated growth rate of nil.

In the following table a distinction is made between Optical retail Europe, Optical retail Americas & Asia and unquoted investments as within these groups assumptions are broadly comparable. Key assumptions used for value-in-use calculations are as follows:

	2017	2016
Optical retail Europe
Weighted-average increase in revenues	5.2%	4.3%
Weighted-average gross margin	72.8%	73.5%
Weighted-average pre-tax discount rate	10.8%	12.9%
Growth rate beyond year five	0.0%	0.0%
Optical retail Americas & Asia
Weighted-average increase in revenues	12.2%	12.9%
Weighted-average gross margin	67.5%	67.5%
Weighted-average pre-tax discount rate	14.4%	20.0%
Growth rate beyond year five	0.0%	0.0%
Unquoted investments
Weighted-average increase in revenues	4.0%	7.1%
Weighted-average gross margin	56.3%	56.6%
Weighted-average pre-tax discount rate	15.2%	14.2%
Growth rate beyond year five	0.0%	0.0%

Goodwill, excluding amounts related to Vopak and Safilo, is comprised of the following:

	2017	2016
Optical retail Europe	1,088.4	974.8
Optical retail Americas & Asia	162.0	222.2
Other unquoted investments	175.1	203.2
Total	1,425.5	1,400.2

The result of the goodwill impairment testing process was that the carrying value of goodwill relating to one cash-generating unit at GrandVision was impaired for € 38.0 million and goodwill relating to two cash-generating units in the Unquoted segment was impaired for € 43.6 million, which is recorded under amortization and impairments of intangible assets in the consolidated statement of income.

The impairment charges and recoverable amounts in the segments Optical and Unquoted can be detailed as follows:

	Impairment		Recoverable amount
	2017	2016	2017	2016
GrandVision N.V. - Argentina & Peru	-	2.3	-	52.3
GrandVision N.V. - United States	38.0	-	107.1	-
Koninklijke Ahrend B.V.	26.2	-	64.7	-
Atlas Professionals B.V.	17.4	-	66.2	-
	81.6	2.3	238.0	52.3

The impairment with respect to GrandVision N.V. - United States relates to the For Eyes subsidiary. The impairment mainly resulted from the continued investments in a growth platform and a longer than expected organizational rebuild including the recently completed management restructuring which delayed the improvement of the profitability. The recoverable amount was determined by the value in use method using a pre-tax discount rate of 11.3%.

The impairment on Koninklijke Ahrend B.V. is due to continuing challenging market conditions in the office furniture industry which affects profitability. The recoverable amount was determined by the value in use method using a pre-tax discount rate of 16.4%.

The impairment with respect to Atlas Professionals B.V. is due to adverse market conditions in the offshore energy industry affecting gross margins. The recoverable amount was determined by the value in use method using a pre-tax discount rate of 15.4%.

The valuation models include certain assumptions with respect to revenue growth. If the models included a 2% lower increase in revenues, assuming an unchanged cost structure and unchanged capital expenditures, the calculations would result in a potential further impairment charge as follows:

	2017	2016
Optical retail	16.2	-
Other unquoted investments	5.2	7.1
	21.4	7.1

A 2% increase in the discount rate would potentially result in a further impairment charge as follows:

	2017	2016
Optical retail	29.1	-
Other unquoted investments	9.5	3.3
	38.6	3.3

If the cash flows beyond the five-year period were extrapolated using an estimated growth rate of 2%, the value-in-use of the cash-generating units that indicated a potential impairment in the above sensitivity analyses would increase as follows:

	2017	2016
Optical retail	29.5	-
Other unquoted investments	7.5	20.7
	37.0	20.7

If the models included a 2% lower gross margin, and assuming an unchanged cost structure and unchanged capital expenditures, the calculations would result in a potential further impairment charge as follows:

	2017	2016
Optical retail	23.0	-
Other unquoted investments	13.4	27.2
	36.4	27.2

Other intangibles

Indefinite-life rights of use and key money primarily relate to optical retail stores in France and Brazil. These assets are subject to an annual impairment test using cash-flow projections covering a five-year period, using pre-tax discount rates of 8% to 16% and revenue growth rates of 2% to 13%.

The result of this process was that the rights of use and key money relating to optical retail stores were impaired for € 1.3 million (2016: € 1.9 million). This amount is included in the consolidated statement of income under amortization and impairments of intangible assets.

If the revenue growth rate had been set at 0%, an additional impairment could have been required for an amount of € 5.3 million (2016: € 4.8 million).

Trademark valuations are most sensitive to the royalty rate, revenue growth and the discount rate used. Primary inputs for the valuation of customer relationships are the churn rate, EBITA growth and the discount rate.

The total amount of impairments recognized on other intangibles was € 3.2 million (2016: € 5.4 million).

36. Financial instruments

he classification of financial assets is detailed in the notes on other financial assets and derivatives. The classification of financial liabilities is detailed in the notes on debt and other financial liabilities and derivatives. T

A number of the accounting policies and disclosures requires the determination of fair value for financial instruments. The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair values calculated are classified into three categories depending on the inputs used in the valuation technique. Where available, fair values are derived from quoted prices for identical instruments (level 1). In the absence of such information, other observable inputs, either directly or indirectly, are used to estimate fair values (level 2). Where insufficient observable market data is available, the best applicable unobservable inputs are used to perform the valuation (level 3). The valuation techniques used per type of financial instrument are described in more detail below.

Equity securities

The Company holds direct investments in equity securities and indirect investments in equity securities through managed portfolios. When available, the Company uses quoted market (bid) prices in active markets to determine the fair value of its investments in equity securities (level 1). Fair values for unquoted shares are estimated using valuation techniques such as discounted cash flow analysis, using expected future cash flows and a market-related discount rate, or a marketmultiples approach (level 2 or 3).

Investments funds

Investment funds include private equity funds. The fair values of investments held in unquoted investment funds are determined by the Company after taking into consideration information provided by the fund managers and the liquidity of the investments. The Company reviews the

valuations and performs analytical procedures to ensure the fair values are appropriate (level 2 or 3).

Debt securities and own debt

When available, the Company uses quoted market (bid) prices in active markets to determine the fair value of its debt investments (level 1). When the Company cannot make use of quoted market prices, market prices from indices, corroborating broker quotes or discounted cash flow analysis, using expected future cash flows and a market-related discount rate, are used (level 2).

Other liabilities

Obligations to acquire non-controlling interests are fair valued, generally, based on a multiple of EBITA less net debt. Multiples applied are either contractually determined or in accordance with those applied in calculating estimated value of the subsidiaries and associates (level 3). Contingent considerations are fair valued based on the expected cash outflows, taking into account the effects of discounting (level 3).

Derivatives

Where quoted market prices (level 1) are not available, other valuation techniques and corroborating broker quotes are used that maximize the use of observable inputs. These valuation techniques include option pricing or discounted cash flow analysis, using expected future cash flows and a market-related discount rate. The models used incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, expected volatility and interest rate curves (generally level 2).

Embedded derivatives

A bifurcated cash-settlement option of a convertible equity-linked bond issued by Safilo is carried at fair value. The fair value of the embedded derivative is calculated using the Black & Scholes option pricing model. Inputs in the model include risk-free rates and share price, expected volatility and dividend yield data for Safilo (level 2).

Financial instruments for which carrying value approximates fair value

Certain financial instruments that are not carried at fair value are carried at amounts that approximate fair value, due to their short-term nature and generally negligible credit risk. These instruments include cash and cash equivalents, short-term receivables and accrued interest receivable, short-term liabilities and accrued liabilities.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a current, legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The offset is limited to the amount actually expected to be offset.

The following tables provide an analysis of the Company's financial instruments per line item, stating the classification of the instruments, their fair value and their level within the fair value hierarchy:

December 31, 2017	Fair value level	Available for-sale	Loans and receivables	Derivatives	Total book value	Total fair value
Assets
Other financial assets
- Quoted equity securities	1	593.8	-	-	593.8	593.8
- Unquoted debt securities	2	-	198.4	-	198.4	198.4
Marketable securities
- Quoted equity securities	1	476.8	-	-	476.8	476.8
- Quoted debt securities	1	56.2	-	-	56.2	56.2
- Unquoted equity securities	2	51.8	-	-	51.8	51.8
Derivatives	2	-	-	25.6	25.6	25.6
Other current assets		-	298.5	-	298.5	298.5
Receivables		-	811.7	-	811.7	811.7
Cash		-	2,205.0	-	2,205.0	2,205.0
Total financial assets		1,178.6	3,513.6	25.6	4,717.8	4,717.8

December 31, 2017	Fair value level	Liabilities at amortized cost	Fair value through profit or loss	Derivatives	Total book value	Total fair value
Liabilities
Debt and other financial
liabilities
- Non-current debt	2	2,526.5	-	-	2,526.5	2,600.3
- Current debt	2	934.3	-	-	934.3	934.3
- Other financial liabilities	2	16.3	-	-	16.3	16.3
- Other financial liabilities	3	-	95.3	-	95.3	95.3
Derivatives	2	-	-	116.5	116.5	116.5
Accounts payable		800.1	-	-	800.1	800.1
Total financial liabilities		4,277.2	95.3	116.5	4,489.0	4,562.8

Available for-sale	Loans and receivables	Derivatives	Total book value	Total fair value


				576.3
				184.4

				142.6
				38.7
				48.6
				144.4
				259.7
				845.8
-	3,143.6	-	3,143.6	3,143.6
806.2	4,433.5	144.4	5,384.1	5,384.1
1 2 1 1 2 2	576.3 - 142.6 38.7 48.6 - - -	- 184.4 - - - - 259.7 845.8	- - - - - 144.4 - -	576.3 184.4 142.6 38.7 48.6 144.4 259.7 845.8

December 31, 2016	Fair value level	Liabilities at amortized cost	Fair value through profit or loss	Derivatives	Total book value	Total fair value
Liabilities
Debt and other financial
liabilities
- Non-current debt	2	2,970.1	-	-	2,970.1	3,194.8
- Current debt	2	921.3	-	-	921.3	921.3
- Other financial liabilities	2	56.0	-	-	56.0	56.0
- Other financial liabilities	3	-	120.2	-	120.2	120.2
Derivatives	2	-	-	97.7	97.7	97.7
Accounts payable		832.0	-	-	832.0	832.0
Total financial liabilities		4,779.4	120.2	97.7	4,997.3	5,222.0

Valuation techniques used to value level 2 financial instruments include, for unquoted securities, quoted market prices or dealer quotes for similar instruments. Derivatives and debt instruments are valued using present value calculations of estimated future cash flows, based on observable yield curves and forward exchange rates. These calculations include credit spreads based on recent borrowing contracts and observable credit information on counterparties.

Level 3 financial instruments include contingent considerations that are remeasured based on the achievement of agreed business targets, taking into account the effect of discounting.

There were no transfers between levels 1, 2 and 3 during the period. The Company's policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the beginning of the period.

A reconciliation of level 3 financial instruments for the period is given below:

2017	2016
	36.3
	95.5
(78.2)	(4.6)
-	(17.0)
6.6	9.6
(5.5)	0.4
95.3	120.2
	120.2 52.2

* Reclassifications primarily to liabilities related to assets held for sale

37. Financial risk management

he Company is exposed to credit risk, liquidity risk and market risk. Market risk primarily relates to movements in exchange rates, interest rates and the market value of investments in equity securities. T

Financial risk management activities are carried out both on a central level and on the level of individual subsidiaries and controlled minority interests. For managing these risks, both derivative and non-derivative financial instruments are used.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations, including committed credit facilities extended to the Company. Credit risk on trade receivables is generally monitored and managed on the level of each subsidiary and on the level of the controlled minority interests (Vopak and Safilo). Credit risk with respect to loans, other financial instruments, cash and cash equivalents and credit facilities is managed by the Company for the Real estate and Liquid portfolio segments. The aim is to mitigate this risk by only concluding transactions with counterparties that have a strong credit rating. The credit risk on these financial instruments with respect to the other segments is managed by the respective subsidiary or controlled minority interest.

The maximum exposure to credit risk is the carrying value of the consolidated financial assets, excluding equity securities, which can be specified by segment as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	465.9	464.0
Unquoted	594.0	594.7
Quoted minority interests	759.1	1,083.2
Real estate	2.0	0.2
Liquid portfolio	1,774.4	2,474.5
	3,595.4	4,616.6

These financial assets can be further specified as follows:

	Dec. 31, 2017	Dec. 31, 2016
Loans	100.3	90.2
Trade and other receivables	811.7	845.8
Marketable securities and deposits	56.2	38.7
Derivative financial instruments	25.6	144.4
Other financial assets	98.1	94.2
Other current assets	298.5	259.7
Cash and cash equivalents	2,205.0	3,143.6
	3,595.4	4,616.6

Cash and cash equivalents can be specified by segment as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	164.7	181.1
Unquoted	115.8	111.5
Quoted minority interests	206.2	415.0
Real estate	0.1	0.2
Liquid portfolio	1,718.2	2,435.8
	2,205.0	3,143.6

For the Liquid portfolio and Real estate segments, cash and cash equivalents were held by counterparties with the following short-term Standard & Poor ratings:

	Dec. 31, 2017	Dec. 31, 2016
A-1+	-	143.6
A-1	1,716.5	2,286.3
A-2	-	1.0
Not rated	1.8	5.1
	1,718.3	2,436.0

The Company is not exposed to any significant concentration of credit risk.

Liquidity risk

Liquidity risk is the risk that the financial obligations associated with financial instruments cannot be met.

The risks with respect to the individual entities belonging to the Optical retail, Unquoted and Quoted minority interests segments are managed by these entities. The Company has no ability to transfer cash (or other assets) from the entities belonging to the segment Quoted minority interests which may be consolidated in these financial statements (i.e. Vopak and Safilo).

The approach to managing liquidity at the level of the Company is to ensure, as far as possible, that there will be sufficient liquidity to meet liabilities when due, both under normal and stressed conditions, without incurring unacceptable losses or risk damaging to the Company's reputation. The Company seeks to mitigate liquidity risk through its cash reserves held in the Liquid portfolio segment and committed credit facilities entered into at corporate level. Reference is made to the table on cash and cash equivalents per segment above.

The following tables categorize the consolidated, undiscounted cash flows of non-derivative financial liabilities and derivative financial liabilities into relevant maturity groupings based on the remaining lifetime of the contract at the end of the reporting periods. The financial guarantee contracts are contingent liabilities.

		December 31, 2017
	< 1 year	1-2 years	3-5 years	> 5 years
Non-derivative liabilities
Redemption of debt	934.3	355.7	969.6	1,201.2
Redemption of other financial liabilities	30.6	33.9	25.6	23.0
Interest payments	92.1	81.9	177.2	152.0
Accounts payable	800.1	-	-	-
Financial guarantee contracts	213.8	3.3	1.0	0.6
Total undiscounted non-derivative financial
liabilities	2,070.9	474.8	1,173.4	1,376.8

Derivative liabilities
Gross-settled derivative liabilities outflow	935.1	221.3	163.6	346.3
Gross-settled derivative liabilities inflow	(912.9)	(239.0)	(180.7)	(337.6)
Total gross-settled derivative liabilities	22.2	(17.7)	(17.1)	8.7
Net-settled derivative liabilities	6.3	3.7	10.2	76.9

Total undiscounted derivative liabilities	28.5	(14.0)	(6.9)	85.6
Total undiscounted financial liabilities	2,099.4	460.8	1,166.5	1,462.4

		December 31, 2016
	< 1 year	1-2 years	3-5 years	> 5 years
Non-derivative liabilities
Redemption of debt	921.3	98.6	1,439.7	1,431.8
Redemption of other financial liabilities	18.0	95.8	37.1	42.5
Interest payments	117.6	106.7	253.4	269.7
Accounts payable	832.0	-	-	-
Financial guarantee contracts	134.5	6.5	3.4	2.8
Total undiscounted non-derivative financial
liabilities	2,023.4	307.6	1,733.6	1,746.8
Derivative liabilities
Gross-settled derivative liabilities outflow	766.8	-	-	145.8
Gross-settled derivative liabilities inflow	(753.1)	-	-	(130.2)
Total gross-settled derivative liabilities	13.7	-	-	15.6

Net-settled derivative liabilities	(1.7)	3.1	(2.3)	80.0
Total undiscounted derivative liabilities	12.0	3.1	(2.3)	95.6

Total undiscounted financial liabilities	2,035.4	310.7	1,731.3	1,842.4

The total debt as of December 31, 2017, amounted to € 3,460.8 million (2016: € 3,891.4 million). For 100% of the bank debt, the applicable covenants were complied with during 2016 and 2017. Refer to note 20 for details on applicable covenants.

The movements during 2017 in the net debt position were as follows:

	Cash and cash equivalents	Marketable securities and deposits	Total debt	Net (debt) / cash

Balance on January 1, 2016	2,226.2	164.6	(4,381.6)	(1,990.8)
Cash flows	962.2	17.7	550.5	1,530.4
Foreign exchange adjustments	10.2	9.9	(69.0)	(48.9)
Fair value movements	-	37.7	-	37.7
Other non-cash movements	(55.0)	-	8.7	(46.3)
Balance on December 31, 2016	3,143.6	229.9	(3,891.4)	(517.9)
Cash flows	(918.5)	300.6	201.4	(416.5)
Foreign exchange adjustments	(20.1)	(12.6)	265.5	232.8
Fair value movements	-	66.9	-	66.9
Other non-cash movements	-	-	(36.3)	(36.3)
Balance on December 31, 2017	2,205.0	584.8	(3,460.8)	(671.0)

This net debt position represents a ratio of 0.5 (2016: 0.2) when compared to the operating result before depreciation, amortization and impairments, less income from marketable securities and share of profit of associates and joint ventures. The differences between the debt cash flows in the table above and those in the cash flow statement relate to cash flows on other financial liabliities which are not part of the net debt definition.

At the end of 2017, unused committed credit facilities were available to an amount of € 2,492.7 million (2016: € 2,221.8 million).

Market risk – currency risk

Foreign currency exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. The risks with respect to the individual entities belonging to the Optical retail, Unquoted and Quoted minority interests segments are managed by these entities.

The table on the following page shows the net assets per currency, taking into account debt instruments denominated in foreign currency and related hedging instruments. The main currency exposures relate to investments in foreign operations, which the Company does not hedge.

	Dec. 31, 2017	Dec. 31, 2016
U.S. dollar	924.9	871.3
Chinese yuan renminbi	389.9	430.6
Swiss franc	208.4	47.2
U.K. pound sterling	121.7	141.7
Brazilian real	119.1	110.9
Others	98.6	93.7
Canadian dollar	83.0	65.0
Australian dollar	70.4	79.0
Hong-Kong dollar	70.3	81.3
Swedish krona	68.9	77.2
Danish krone	64.6	49.9
Mexican peso	63.6	59.6
Singapore dollar	60.2	52.5
Other	453.6	457.6
	2,797.2	2,617.5

An average change in value of these currencies by 10% would have a pre-tax effect on equity of € 279.7 million.

The market value of the currency derivative financial instruments per the consolidated financial statements were as follows.

			December 31, 2017			December 31, 2016
	Maturity	Assets	Liabilities	Notional amount	Assets	Liabilities	Notional amount
Fair value hedge	< 1 year	-	-	-	-	-	-
		-	-	-	-	-	-
Cash flow hedge	< 1 year	4.0	(19.3)	685.0	6.4	(9.0)	663.2
Cash flow hedge	1-5 years	-	-	-	-	-	-
		4.0	(19.3)	685.0	6.4	(9.0)	663.2
Net investment hedge < 1 year		0.6	(0.8)	340.3	0.3	(2.4)	395.3
		0.6	(0.8)	340.3	0.3	(2.4)	395.3
No hedge accounting	< 1 year	2.3	(2.1)	303.6	2.6	(2.3)	326.8
		2.3	(2.1)	303.6	2.6	(2.3)	326.8
Total currency derivative
financial instruments		6.9	(22.2)	1,328.9	9.3	(13.7)	1,385.3

In addition, one of the Company's consolidated minority interests holds cross-currency interest rate swaps to hedge fixed rate debt denominated in U.S. dollar. These interest rate swaps, with a notional amount of € 731.3 million (2016: € 896.5 million), are included under interest rate derivatives.

Sensitivity of profit and equity to financial instruments, with respect to exchange rate changes The value of debt and hedging instruments denominated in currencies other than the functional currency of the entities holding them are subject to exchange rate movements. This primarily

relates to instruments denominated in Chinese yuan renminbi, U.S. dollar and Singapore dollar. The aggregate effect on net profit of a 10% depreciation in exchange rates is € (29.5) million (2016: € (22.4) million), with an equal but opposite effect of a 10% appreciation in exchange rates. The aggregate effect on equity of a 10% appreciation of the foreign currencies against the euro is € 80.6 million (2016: € 85.1 million). The aggregate effect on equity of a 10% depreciation of the foreign currencies against the euro is € (65.2) million (2016: € (69.1) million).

Sensitivity of revenues and profit to the translation of the revenues and results of foreign operations, with respect to exchange rate changes

The result is impacted by translating the result of foreign currency operations. The translation risk of converting the net result of foreign entities into euro mainly concerns the British pound, the Singapore dollar and the U.S. dollar. The sensitivity to these currencies is as follows:

	EUR/USD ∆ \$10ct			EUR/GBP ∆ £10ct		EUR/SGD ∆ \$10ct
	2017	2016	2017	2016	2017	2016
Impact on revenues	79.3	86.8	52.7	55.4	17.3	18.8
Impact on net profit	2.3	9.9	4.6	5.4	6.0	9.2

Market risk – interest rate risk

The risks with respect to the individual entities belonging to the Optical retail, Unquoted and Quoted minority interests segments are managed by these entities. There is no debt at other segments.

Fixed income investments which are part of the Liquid portfolio are subject to fair value interest rate risk. In view of the short average duration of this portfolio, this risk is limited.

As of December 31, 2017, taking into account interest rate swaps, 81% (2016: 82%) of the total debt of € 3,460.8 million (2016: € 3,891.4 million) was at fixed rates for an average period of 5.7 years (2016: 6.3 years).

The market value of the interest rate derivative financial instruments per the consolidated financial statements is shown below.

			December 31, 2017			December 31, 2016
	Maturity	Assets	Liabilities	Notional amount	Assets	Liabilities	Notional amount
Cash flow hedge Cash flow hedge Cash flow hedge	< 1 year 1-5 years > 5 years	- 11.4 5.4	(1.7) (2.0) (88.4)	37.4 796.5 821.3	33.9 92.5 1.7	(0.4) (4.2) (78.1)	191.2 632.4 596.1
No hedge accounting	< 1 year	16.8 -	(92.1) -	1,655.2 -	128.1 -	(82.7) -	1,419.7 -
No hedge accounting No hedge accounting	1-5 years > 5 years	- - -	(0.3) - (0.3)	92.8 - 92.8	3.8 - 3.8	(1.2) (0.1) (1.3)	98.5 11.5 110.0
Total interest rate derivative financial instruments		16.8	(92.4)	1,748.0	131.9	(84.0)	1,529.7

The weighted-average interest rate on total debt was 2.5% (2016: 2.9%).

If variable interest rates in 2016 or 2017 had decreased/increased by 25%, the impact on the consolidated statement of income for the year would have been insignificant.

An increase of 25% in interest rates underlying the calculation of the valuation of interest rate swaps would have had a pre-tax positive impact on equity of € 9.0 million (2016: € 6.3 million). An equal but opposite change would have had a pre-tax negative impact on equity of € 3.3 million (2016: € 5.1 million negative).

Market risk – price risk

At the end of 2017, the Company had investments in equity securities (included in marketable securities and deposits and other financial assets) amounting to € 1,122.4 million (2016: € 767.5 million), based on quoted market prices at the statement of financial position date. These investments are classified as available-for-sale. If at December 31, 2017, equity markets had fallen 10% overall, the portfolio value could have decreased by 10%, which would have resulted in a negative impact of € 112.2 million (2016: € 76.8 million) in other reserves. A 10% increase would have had the equal but opposite effect. Potentially the whole or a part of the negative impact would have required recognition through the consolidated statement of income as an impairment charge.

38. Capital risk management

he Company manages its capital to safeguard its ability to continue as a going concern and to provide an adequate return on its invested capital. T

The capital structure at the end of the reporting periods is summarized in the table below:

	Dec. 31, 2017	Dec. 31, 2016
Equity	7,599.8	7,624.7
Non-current debt	2,526.5	2,970.1
Current debt	934.3	921.3
Cash and cash equivalents	(2,205.0)	(3,143.6)
Total capital employed	8,855.6	8,372.5

39. Related-party transactions

related party is a person or entity that is related to the Company. These include both people and entities that have, or are subject to, the influence or control of the Company. A

Employment benefits for the Executive Board charged to the income statement are as follows:

	2017	2016
Members of the Executive Board
Short-term employee benefits	3.3	4.5
Post-employment benefits	0.6	0.5
Share-based compensation	1.6	1.7
	5.5	6.7

For details on share-based compensation plans refer to note 34.

The fixed 2017 remuneration for the Supervisory Directors of HAL Holding N.V. was € 0.4 million (2016: € 0.4 million) in total.

40. Capital and financial commitments, contingent liabilities

ontingent liabilities are either possible obligations that will probably not require a transfer of economic benefits, or present obligations that may, but probably will not, require a transfer of economic benefits. It is not appropriate to make provisions for contingent liabilities, but there is a chance that they will result in an obligation in the future. C

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership. All other leases are classified as operating leases. Lease payments under operating leases are charged to the income statement on a straight-line basis over the term of the lease. For finance leases refer to note 20

Capital commitments

On December 31, 2017, capital commitments in respect of property, plant and equipment amounted to € 329.3 million (2016: € 180.5 million).

Financial commitments

The future minimum lease payments under non-cancellable operating leases and similar commitments are as follows:

	2017	2016*
No later than 1 year	446.8	448.8
Later than 1 year and no later than 5 years	1,003.2	973.4
Later than 5 years	1,153.4	1,146.6
	2,603.4	2,568.8

* Revised following a reassessment by Vopak of the likelihood of exercising the contractual extension options.

The lease commitments are mainly in respect of the leasehold on land and the lease of stores, offices and other buildings.

Operating leases recognized in as expenses in the consolidated statement of income amounted to € 537.3 million (2016: € 547.8 million).

At year end, Safilo had contracts with licensors for the production and sale of branded sunglasses and frames. These contracts include guarantees for a minimum amount of production as well as commitments for advertising. These licensing commitments can be summarized as follows:

	2017	2016
No later than 1 year	113.2	120.5
Later than 1 year and no later than 5 years	312.4	401.2
Later than 5 years	36.3	77.1
	461.9	598.8

Contingent liabilities

The Company and its subsidiaries and controlled minority interests entered into various commitments to provide debt and equity financing. These commitments mainly relate to Vopak. In addition, guarantees and commitments were provided by Vopak on behalf of its associates and joint ventures. The total estimated amount of these commitments not recognized in the statement of financial position comprises:

	2017	2016
Commitments to provide debt or equity funding	176.3	119.6
Guarantees and securities provided	209.9	128.9
	386.2	248.5

The 2017 commitments for joint ventures and associates mainly relate to Vopak, in respect of the expansion of PITSB in Pengerang (Malaysia) and RIPET (Canada).

In 2017, guarantees and securities provided on behalf of participating interests in joint ventures and associates mainly increased due to a guarantee provided by Vopak for Ridley Island LPG Export (RIPET) of € 89.3 million.

The amount of guarantees and securities provided can potentially be called within one year.

Environmental obligations Vopak

Vopak is exposed to risks regarding environmental obligations arising from past activities. For example, a number of sites has to be decontaminated before being handed back at the end of the contractual period. Under current legislation, environmental plans and any other measures to be adopted have to be agreed with local, regional and national authorities as appropriate. As soon as such plans are approved or other legal obligations arise, a provision is formed based on the most reliable estimate possible of future expenses. Vopak management is of the opinion that the provisions are adequate, based on information currently available. However, given the degree of difficulty in making estimates, this does not guarantee that no additional costs will arise going forward.

Legal proceedings Vopak

As a result of its day-to-day activities, Vopak is involved in a number of legal proceedings. Vopak management is of the opinion that for the legal cases and risks for which no provision has been recognized, it is not probable that the final outcome will result in a cash outflow, therefore no provisions have been recognized. In addition, Vopak can be held liable for any non-compliance with laws and regulations, including for potential compliance shortfalls.

As part of divestments of terminals and assets, Vopak has provided certain customary representations and warranties in the relevant sales purchase agreements. These representations and warranties will generally terminate, depending on their specific features, a number of years after the date of the relevant transaction completion date. Based on the current facts and circumstances, Vopak management has determined that for the items for which no provision is currently recognized, the likelihood of a cash outflow relating to these items is considered to be remote.

GrandVision

GrandVision has been in dispute with a lens manufacturer, Zeiss, who participated in, but did not win, the lens tender organized by GrandVision in 2012. Consequently Zeiss' existing lens-supply contract expired on the contractual expiration date of October 31, 2013. Zeiss subsequently claimed that GrandVision's termination of the agreement was unlawful. Zeiss formally sued GrandVision France before the Paris Commercial Court on April 10, 2014, claiming damages of approximately € 57 million on the ground of unlawful termination of the lens purchase agreement. A number of hearings took place in 2015 and the Paris Commercial Court declared itself not competent to hear this matter in its January 25, 2016 decision. Zeiss appealed this decision and

the French Court of Appeal confirmed the decision of the Paris Commercial Court in its June 17, 2016 decision. No additional procedural steps have been taken by Zeiss since 2016. As GrandVision is confident to sustain its legal position in this dispute, no provision was recognized in the consolidated financial statements. GrandVision is of the opinion that the probability of any further developments on this matter is remote and therefore deems this matter to be closed.

In November, 2015, GrandVision received a report from the German tax authorities following their tax audit covering Apollo-Optik for the years 2008-2012. This report included findings and viewpoints of the tax authorities on German VAT aspects. GrandVision is contesting the viewpoints of the German tax authorities on the tax position and will defend its position vigorously, if needed in court. As GrandVision is sufficiently confident to sustain its position on this matter, no provision has been recognized in the consolidated financial statements. If GrandVision is unsuccessful in resolving this matter, the exposure, including the period after 2012, is estimated at € 22 million. Formalities are proceeding at this stage and did not result in changes in 2017.

41. Non-controlling interests

on-controlling interests with respect to Vopak, Safilo and GrandVision are significant to the Company and can be detailed as follows: N

	Vopak 2017	Vopak 2016	Safilo 2017	Safilo 2016	GrandVision 2017	GrandVision 2016	Total 2017	Total 2016
Profit / (loss) allocated to the non-controlling interest during the year	161.4	322.0	(39.9)	(5.1)	74.1	74.5	195.6	391.4
Accumulated non controlling interest at December 31	1,437.7	1,400.0	227.4	297.3	365.1	321.9	2,030.2	2,019.2

Set out below is the summarized financial information for Vopak, Safilo and GrandVision. These are the financial statements as reported by these companies including purchase price accounting adjustments made by the Company.

	Vopak		Safilo		GrandVision
	2017	2016	2017	2016	2017	2016
Summarized balance sheet As of December 31
Current Assets Liabilities	413.1 (501.1)	608.0 (570.2)	604.6 (420.5)	683.6 (408.4)	850.5 (1,320.9)	776.9 (1,200.3)
Non-current	(88.0)	37.8	184.1	275.2	(470.4)	(423.4)
Assets Liabilities	4,770.9 (1,977.8)	5,044.6 (2,453.4)	472.2 (253.0)	552.4 (305.2)	2,205.7 (614.9)	1,997.6 (567.6)
	2,793.1	2,591.2	219.2	247.2	1,590.8	1,430.0
Net assets	2,705.1	2,629.0	403.3	522.4	1,120.4	1,006.6
Summarized income statement For the year
Revenue	1,329.2	1,362.5	1,089.9	1,252.9	3,449.9	3,316.1
Other income Profit before tax	- 299.3	287.6 650.9	- (50.7)	- 6.8	- 349.9	- 347.7
Income tax expense	(25.0)	(72.2)	(21.6)	(12.5)	(101.1)	(95.7)
Profit after income tax Other comprehensive income	274.3 (30.8)	578.7 (13.6)	(72.3) (52.2)	(5.7) 4.2	248.8 (58.9)	252.0 (36.1)
Total comprehensive income (CI)	243.5	565.1	(124.5)	(1.5)	189.9	215.9
CI allocated to non-controlling interest Dividend paid to non-controlling interest	31.4 38.9	47.3 41.3	- -	- -	18.5 11.5	17.3 10.9
Summarized cash flow statement
For the year Cash from operating activities Interest paid net Income tax paid	713.8 (136.7) (51.7)	783.2 (97.9) (70.9)	(18.9) (2.1) (10.1)	119.2 (2.1) (28.0)	460.3 (7.2) (119.3)	533.6 (10.0) (103.0)
Net cash from operating activities Net cash from investing activities Net cash from financing activities	525.4 (320.6) (376.4)	614.4 114.7 (534.7)	(31.1) (39.0) 45.4	89.1 (44.3) (23.9)	333.8 (312.5) (32.4)	420.6 (169.5) (266.9)
Increase/(decrease) in cash and cash equivalents	(171.6)	194.4	(24.7)	20.9	(11.1)	(15.8)
Cash and cash equivalents at beginning of year Effect of exchange rate changes and	306.0	109.9	109.0	86.6	181.1	198.3
reclassifications Increase/(decrease) in cash and cash equivalents	(4.4) (171.6)	1.7 194.4	(8.1) (24.7)	1.5 20.9	(5.3) (11.1)	(1.4) (15.8)
Cash and cash equivalents at end of year	130.0	306.0	76.2	109.0	164.7	181.1

42. Summarized financial information on joint ventures

or the disclosure of the nature, extent and financial effects of joint ventures, Vopak makes a distinction between the activities in Europe, Middle East & Africa, LNG and Asia. The summarized financial information of the joint ventures of Vopak is as follows. F

Summarized statements of financial position on a 100% basis:

	Europe, Middle East and Africa		Asia			LNG	Other		Total
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Non-current assets Cash and cash equivalents Other current assets	430.5 34.9 23.8	610.4 40.1 24.1	1,340.0 152.2 53.0	1,548.2 170.2 59.4	1,076.9 73.4 23.8	1,162.4 67.4 25.3	157.8 5.7 2.0	253.9 11.2 9.4	3,005.2 266.2 102.6	3,574.9 288.9 118.2
Total assets	489.2	674.6	1,545.2	1,777.8	1,174.1	1,255.1	165.5	274.5	3,374.0	3,982.0
Financial non-current liabilities Other non-current liabilities Financial current liabilities Other current liabilities Total liabilities	44.0 6.0 41.3 77.4 168.7	80.4 18.4 48.2 61.9 208.9	598.3 37.3 46.0 78.9 760.5	693.7 37.6 48.8 84.1 864.2	638.3 205.7 67.8 37.2 949.0	716.0 250.4 68.6 25.7 1,060.7	5.9 1.5 1.0 4.5 12.9	80.0 18.2 5.8 4.5 108.5	1,286.5 250.5 156.1 198.0 1,891.1	1,570.1 324.6 171.4 176.2 2,242.3
Net assets	320.5	465.7	784.7	913.6	225.1	194.4	152.6	166.0	1,482.9	1,739.7
Vopak's share of net assets Goodwill on acquisition	117.4 5.1	185.0 5.8	369.7 0.6	431.1 0.6	122.7 58.7	106.9 63.1	45.3 -	48.5 -	655.1 64.4	771.5 69.5
Vopak's carrying amount of net assets	122.5	190.8	370.3	431.7	181.4	170.0	45.3	48.5	719.5	841.0

	Europe, Middle East and Africa		Asia		LNG		Other		Total
	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016
Revenues Operating expenses Depreciation, amortization	193.1 (87.8)	211.1 (81.5)	349.9 (100.6)	373.3 (116.6)	223.9 (42.1)	217.1 (39.6)	10.0 (5.1)	28.9 (12.7)	776.9 (235.6)	830.4 (250.4)
and impairment	(157.7)	(157.2)	(151.8)	(78.5)	(45.6)	(45.5)	(1.6)	(5.7)	(356.7)	(286.9)
Operating profit (EBIT) Net finance costs Income tax	(52.4) (3.5) 5.8	(27.6) (3.6) 12.6	97.5 (28.6) (37.5)	178.2 (30.3) (35.9)	136.2 (41.1) (26.7)	132.0 (42.1) (28.4)	3.3 2.3 (0.5)	10.5 (2.7) (1.1)	184.6 (70.9) (58.9)	293.1 (78.7) (52.8)
Net profit Other comprehensive income	(50.1) 0.4	(18.6) 0.1	31.4 (4.8)	112.0 (3.9)	68.4 21.1	61.5 2.4	5.1 -	6.7 0.5	54.8 16.7	161.6 (0.9)
Total comprehensive income	(49.7)	(18.5)	26.6	108.1	89.5	63.9	5.1	7.2	71.5	160.7
Vopak's share of net profit Vopak's share of OCI	(31.8) 0.1	(30.1) 0.1	9.5 (2.3)	47.1 (1.8)	36.5 10.6	32.8 1.2	3.2 3.0	3.0 0.2	17.4 11.4	52.8 (0.3)
Vopak's share of total comprehensive income	(31.7)	(30.0)	7.2	45.3	47.1	34.0	6.2	3.2	28.8	52.5

Summarized statements of total comprehensive income on a 100% basis:

List of Principal subsidiaries and minority interests

as of December 31, 2017

	Country of		Interest in common	Interest in preferred	Non controlling
Name	incorporation	Nature of business	shares	shares	interest
Subsidiaries
HAL Holding N.V.	Curaçao	Holding company	100.0%	0.0%	0.0%
HAL International N.V.	Curaçao	Holding company	100.0%	0.0%	0.0%
HAL International Investments N.V.	Curaçao	Holding company	100.0%	0.0%	0.0%
HAL Investments N.V.	Curaçao	Holding company	100.0%	0.0%	0.0%
HAL Real Estate Inc.	U.S.A.	Real estate	100.0%	0.0%	0.0%
HAL Investments B.V.	The Netherlands	Holding company	100.0%	0.0%	0.0%
Koninklijke Ahrend B.V.	The Netherlands	Office furniture	100.0%	100.0%	0.0%
Orthopedie Investments Europe B.V.	The Netherlands	Orthopedic devices	100.0%	100.0%	0.0%
FD Mediagroep B.V.	The Netherlands	Media	99.2%	100.0%	0.8%
Broadview Holding B.V.	The Netherlands	Industrial	97.4%	0.0%	2.6%
Floramedia Group B.V.	The Netherlands	Communication	92.0%	100.0%	8.0%
Sports Timing Holding B.V.	The Netherlands	Timing equipment	95.5%	100.0%	4.5%
Flight Simulation Company B.V.	The Netherlands	Flight simulators	92.0%	100.0%	8.0%
Infomedics Groep B.V.	The Netherlands	Financial services	81.0%	0.0%	19.0%
Timber and Building Supplies Holland
N.V.	The Netherlands	Building materials	78.1%	0.0%	21.9%
GrandVision N.V.	The Netherlands	Optical retail	76.7%	0.0%	23.3%
AN Direct B.V.	The Netherlands	E-commerce	82.7%	0.0%	17.3%
Atlas Professionals B.V.	The Netherlands	Staffing	70.0%	0.0%	30.0%
Anthony Veder Group N.V.	Curaçao	Shipping	62.9%	0.0%	37.1%
Controlled minority interests
Koninklijke Vopak N.V.	The Netherlands	Tank terminals	48.15%	0.00%	51.85%
Safilo Group S.p.A.	Italy	Optical products	41.61%	0.00%	58.39%

All the above entities are included in the consolidation. The proportion of the effective voting rights in the respective entity are virtually equal to the proportion of the ordinary shares held.

Non-controlled minority interests
Publicly traded
Koninklijke Boskalis Westminster N.V.	35.71%
SBM Offshore N.V.	16.13%
Chart Industries Inc.	8.94%

Other
Coolblue B.V.	30.10%
DMF Investment Management B.V.	25.00%

Information relating to estimated value of the subsidiaries and minority interests of HAL Holding N.V.

As of December 31, 2017

General

his section provides additional information about the investment portfolio of HAL Holding N.V. ('the Company'). T

For the purpose of this section, book value includes goodwill and loans to the investee companies. Amounts denominated in foreign currencies have been translated at year-end exchange rates.

We emphasize that, especially with respect to unquoted investments, estimated value is based upon a number of assumptions. Values as realized upon sale of an investment can be materially different from these estimates.

Portfolio valuation methodology

The valuation of the Company's portfolio for this section is arrived at using a systematic process. The aim is to value the portfolio as a whole on a prudent and consistent basis.

Quoted investments

Quoted investments are valued at the closing price on the statement of financial position date. In certain circumstances, for example in case of trading restrictions, an appropriate discount may be applied.

Unquoted common equity investments

Unquoted investments are valued subject to overriding requirements of prudence, according to one of the following bases:

Cost (less any provisions required);
Recent transactions in the investee company;
Earnings multiple;
Other.

Cost

New investments are generally valued at cost during the first 12 months or, if later, until the availability of the first set of audited financial statements post completion of the acquisition. However, provisions against cost will be made if the performance of the investment is significantly below the expectations on which the acquisition was based.

After this initial period, investments can also remain valued at cost in the following situations:

If an investment is loss-making and therefore the use of an earnings multiple does not seem appropriate, an investment is valued at cost less a provision in case of a possible diminution of value.
If comparable quoted companies are not primarily valued on an earnings basis, an investment is valued at cost including any adjustments deemed appropriate.

After the twelve-month period the investments are, generally, valued based on an earnings multiple. It is possible that the multiple applied is lower than the multiple paid at the time of the acquisition.

Recent transactions in the investee company

In case of a recent significant and at arm's length share transaction in an investee company, the share price involved in this transaction can be used to value the investment.

Earnings multiple

Valuations using an earnings multiple are principally based on the following method:

The EBITA (earnings before interest, tax and amortization) of the current year is used, adjusted for non-recurring items when appropriate. The estimated value of the common equity of the investee company is determined by multiplying the (adjusted) EBITA with a multiple and subtracting the net debt and preferred shares of the investee company. The following factors may, among other things, be considered when selecting multiples:

the multiple paid at the time of the investment;
the multiples the Company generally would be prepared to pay for comparable investments;
multiples of a meaningful sample of comparable quoted companies. When referring to multiples of comparable companies, a discount of at least 25% is taken into account for limited marketability, unless there is a strong possibility of a short-term realization.

Unquoted other investments

Unquoted preferred shares and loans to investee companies are generally valued at cost unless the investee company has failed or is expected to fail its payment obligations within the next 12 months. In these circumstances, these assets are valued at the lower of cost and net realizable value.

Valuation investments

	Estimated value	Book value	Difference
Quoted investments Unquoted investments	8,622.5 1,264.6	4,099.9 1,012.0	4,522.6 252.6
	9,887.1	5,111.9	4,775.2
Unquoted investments Value based on an earnings multiple	821.6	593.0	228.6
Valued using other methods	443.0	419.0	24.0
	1,264.6	1,012.0	252.6

Estimated value less book value of the unquoted investments amounted to € 253 million at the end of 2017 (2016: € 228 million) respectively € 3.16 and € 2.91 per Share.

The EBITA multiples applied vary from 7 to 8. Realized multiples may be materially different. With respect to Broadview Holding B.V. and Timber and Building Supplies Holland N.V. a multiple of 7 was applied, consistent with 2016. The investment in Coolblue was valued at cost.

Quoted investments

		December 31, 2017
	Interest in common shares	Share price	Market value
Share price in euro
GrandVision N.V.	76.72%	21.30	4,156.9
Koninklijke Vopak N.V.	48.15%	36.57	2,250.8
Koninklijke Boskalis Westminster N.V.	35.71%	31.43	1,496.7
Safilo Group S.p.A.	41.61%	4.77	124.3
SBM Offshore N.V.	16.13%	14.67	486.6
Share price in U.S. dollar
Chart Industries Inc.	8.94%	46.86	107.2
			8,622.5

No discount was applied to the above market prices.

General

he consolidated financial statements of HAL Trust include the financial statements of Koninklijke Vopak N.V. ('Vopak') and Safilo Group S.p.A. ('Safilo'). This section provides supplemental information where Vopak and Safilo are accounted for on an unconsolidated basis using the equity method. This was the accounting treatment until the application of IFRS 10, effective January 1, 2014, which requires consolidation of these entities. In all other respects, the accounting policies applied are consistent with those applied to the consolidated financial statements. The inclusion of this supplemental information is considered appropriate and useful as the control model of the Company with respect to the entities where its ownership interest exceeds 50% is materially different from the model with respect to Vopak and Safilo. Moreover, the inclusion of Vopak and Safilo in the consolidation has a significant effect on the financial statements. The following supplemental information also preserves comparability with consolidated financial statements prior to 2014. T

The following pro forma consolidated statements are included as supplemental information:

Statement of Financial Position
Statement of Income
Statement of Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows

The pro forma consolidated statements of financial position and income as well as the statement of changes in equity, include a bridge from the consolidated financial statements (including consolidation of Vopak and Safilo) to these pro forma statements.

A number of notes has been added to the above statements in order to provide additional information on the effect of the inclusion of Vopak and Safilo in the consolidated financial statements. These notes are based on the notes to the consolidated financial statements on pages 34 through 107. Certain notes are summarized for practical purposes.

Pro forma Consolidated Statement of Financial Position

As of December 31

			Effect
		Consolidated	exclusion	Pro forma
In millions of euro	Notes	2017	Vopak/Safilo	2017	Pro forma 2016
Non-current assets
Property, plant and equipment	2	5,030.7	(3,703.2)	1,327.5	1,301.5
Investment properties		6.9	-	6.9	8.3
Intangible assets	3	2,568.7	(392.6)	2,176.1	2,014.2
Investments in associates and joint
arrangements	5	2,521.6	427.5	2,949.1	2,854.1
Other financial assets	6	752.1	(87.1)	665.0	646.8
Derivatives		18.7	(16.3)	2.4	7.0
Pension benefits	10	86.4	-	86.4	72.1
Deferred tax assets	9	114.0	(74.0)	40.0	39.3
Total non-current assets		11,099.1	(3,845.7)	7,253.4	6,943.3
Current assets
Other financial assets	6	40.1	(38.8)	1.3	3.6
Inventories	8	842.7	(238.3)	604.4	521.9
Receivables	7	811.7	(282.5)	529.2	521.0
Marketable securities and deposits		584.8	-	584.8	229.9
Derivatives		6.9	(2.8)	4.1	5.3
Other current assets		492.0	(222.2)	269.8	241.8
Cash and cash equivalents		2,205.0	(206.2)	1,998.8	2,728.6
Assets held for sale		4.4	(1.2)	3.2	-
Total current assets		4,987.6	(992.0)	3,995.6	4,252.1
Total assets		16,086.7	(4,837.7)	11,249.0	11,195.4
Equity
Share capital		1.6	-	1.6	1.6
Other reserves		155.1	-	155.1	322.6
Retained earnings		7,443.1	(27.2)	7,415.9	7,275.2
Equity attributable to owners of parent		7,599.8	(27.2)	7,572.6	7,599.4
Non-controlling interest		2,151.1	(1,665.5)	485.6	436.2
Total equity		9,750.9	(1,692.7)	8,058.2	8,035.6
Non-current liabilities
Deferred tax liabilities	9	425.1	(242.9)	182.2	161.6
Pension benefits	10	248.2	(141.1)	107.1	83.9
Derivatives		90.7	(83.8)	6.9	11.9
Provisions	11	85.7	(56.9)	28.8	18.4
Debt and other financial liabilities	12	2,607.5	(1,724.6)	882.9	974.4
Total non-current liabilities		3,457.2	(2,249.3)	1,207.9	1,250.2
Current liabilities
Provisions	11	79.7	(51.8)	27.9	36.3
Accrued expenses	13	879.8	(248.5)	631.3	607.1
Income tax payable		128.3	(66.8)	61.5	57.1
Accounts payable		800.1	(331.6)	468.5	470.9
Derivatives		25.8	(17.6)	8.2	1.5
Debt and other financial liabilities	12	964.9	(179.4)	785.5	736.7
Total current liabilities		2,878.6	(895.7)	1,982.9	1,909.6
Total equity and liabilities		16,086.7	(4,837.7)	11,249.0	11,195.4

Pro forma Consolidated Statement of Income

		Consolidated	Effect exclusion	Pro forma	Pro forma
In millions of euro	Notes	2017	Vopak/Safilo	2017	2016

Revenues	14	7,970.3	(2,360.8)	5,609.5	5,497.5
Income from marketable securities and
deposits		79.3	0.2	79.5	18.5
Share of results from associates and joint
ventures	15	118.6	65.7	184.3	73.7
Income from other financial assets		15.4	(7.9)	7.5	10.2
Income from real estate activities		1.2	-	1.2	2.1
Other income		30.1	(26.0)	4.1	561.7
Total income		8,214.9	(2,328.8)	5,886.1	6,163.7
Usage of raw materials, consumables and
other inventory		2,232.5	(307.6)	1,924.9	1,864.9
Employee expenses	16	2,339.8	(660.1)	1,679.7	1,672.3
Depreciation and impairments of
property, plant, equipment and
investment properties		492.1	(295.2)	196.9	189.8
Amortization and impairments of
intangible assets		199.8	(43.4)	156.4	70.0
Other operating expenses	17	1,983.5	(708.5)	1,275.0	1,251.1
Total expenses		7,247.7	(2,014.8)	5,232.9	5,048.1

Operating profit		967.2	(314.0)	653.2	1,115.6
Financial expense		(226.4)	176.4	(50.0)	(48.1)
Other financial income		39.0	(32.8)	6.2	16.3

Profit before income tax		779.8	(170.4)	609.4	1,083.8
Income tax expense	18	(186.5)	49.6	(136.9)	(123.2)

Net profit		593.3	(120.8)	472.5	960.6

Attributable to:
Owners of parent		390.5	0.7	391.2	870.7
Non-controlling interest		202.8	(121.5)	81.3	89.9
		593.3	(120.8)	472.5	960.6
Average number of Shares outstanding
(in thousands)		79,281	-	79,281	77,420
Earnings per Share for profit attributable to owners of parent during the period (in euro)
- basic and diluted		4.93	-	4.93	10.98
Dividend per Share(in euro)		6.20*	-	6.20*	7.10
* Proposed

114

Pro forma Consolidated Statement of Comprehensive Income

For the year ended December 31

In millions of euro	Pro forma 2017	Pro forma 2016
Net profit	472.5	960.6
Other comprehensive income (OCI)
Items that will not be reclassified to statement of income in
subsequent periods Actuarial results on post-employment benefit obligations Income tax	18.7 (4.8)	(12.1) 3.5
Associates and joint ventures - share of OCI, net of tax	19.4 33.3	(16.6) (25.2)
Items that may be reclassified to statement of income in subsequent periods
Change in fair value of available-for-sale financial assets Income tax on change in fair value	10.1 0.4	151.8 (4.3)
Effective portion of cash flow hedges Income tax on cash flow hedges	(3.7) 1.5	3.7 (0.4)
Translation of foreign subsidiaries, net of hedges Other movements*	(91.3) (13.2)	(24.0) 1.9
Associates and joint ventures - share of OCI, net of tax	(95.1) (191.3)	19.0 147.7
Other comprehensive income for the year, net of tax	(158.0)	122.5
Total comprehensive income for the year, net of tax	314.5	1,083.1
Total comprehensive income for the year, attributable to:
- Owners of parent** - Non-controlling interest	254.1 60.4	1,001.8 81.3
	314.5	1,083.1

** For both reporting periods there are no differences in other comprehensive income attributable to the owner of parent between the consolidated and the pro forma consolidated statements of comprehensive income.

Pro forma Consolidated Statement of Changes in Equity

		Attributable to owners of parent
In millions of euro	Share capital	Retained earnings	Other reserves	Total	Non controlling interest	Total equity
Balance on January 1, 2016	1.5	6,528.6	167.9	6,698.0	345.8	7,043.8
Net profit for the year Other comprehensive income for the year	- -	870.7 (23.6)	- 154.7	870.7 131.1	89.9 (8.6)	960.6 122.5
Total comprehensive income for the year	-	847.1	154.7	1,001.8	81.3	1,083.1
Capital increase/(decrease) Effect of acquisitions and disposals Dividend paid to minority shareholders Share-based compensation Treasury shares	- - - - -	- 2.8 - 5.9 (1.7)	- - - - -	- 2.8 - 5.9 (1.7)	4.9 23.8 (20.8) 1.2 -	4.9 26.6 (20.8) 7.1 (1.7)
Dividend paid	0.1	(107.5)	-	(107.4)	-	(107.4)
Transactions with the owners of parent recognized directly in equity	0.1	(100.5)	-	(100.4)	9.1	(91.3)
Balance on December 31, 2016	1.6	7,275.2	322.6	7,599.4	436.2	8,035.6
Balance on January 1, 2017	1.6	7,275.2	322.6	7,599.4	436.2	8,035.6
Net profit for the year Other comprehensive income for the year	- -	391.2 33.0	- (170.1)	391.2 (137.1)	81.3 (20.9)	472.5 (158.0)
Total comprehensive income for the year	-	424.2	(170.1)	254.1	60.4	314.5
Capital increase/(decrease) Effect of acquisitions and disposals Dividend paid to minority shareholders Share-based compensation Treasury shares Dividend paid Reclassification Other	- - - - - - - -	- (4.5) - 1.7 0.4 (278.7) (2.6) 0.2	- - - - - - 2.6 -	- (4.5) - 1.7 0.4 (278.7) - 0.2	0.2 19.6 (30.8) - - - - -	0.2 15.1 (30.8) 1.7 0.4 (278.7) - 0.2
Transactions with the owners of parent recognized directly in equity	-	(283.5)	2.6	(280.9)	(11.0)	(291.9)
Balance on December 31, 2017	1.6	7,415.9	155.1	7,572.6	485.6	8,058.2
Equity reconciliation

Equity attributable to owners of parent per consolidated statement of financial position 7,599.8 Equity attributable to owners of parent per pro forma consolidated statement of financial position 7,572.6 Difference 27.2

The difference is due to purchase price accounting adjustments as a result of the retrospective application of IFRS 10 to Vopak and Safilo.

Pro forma Consolidated Statement of Cash Flows For the year ended December 31

In millions of euro	Notes	Pro forma 2017	Pro forma 2016

Cash flows from operating activities
Profit before taxes		609.4	1,083.8
Changes in working capital Adjustments for non-cash items	19	(89.9) 213.6	(26.4) (294.2)

Cash generated from operating activities	19	733.1	763.2
Other financial income received Finance cost paid, including effect of hedging		6.6 (41.0)	10.3 (43.9)
Income taxes paid		(141.8)	(123.6)
Net cash from operating activities		556.9	606.0

Cash flows from investing activities
Acquisition of associates and subsidiaries, net of cash acquired	4	(309.8)	(227.0)
Proceeds from divestiture of associates, joint arrangements and subsidiaries		14.0	1,055.0
Proceeds from sale of/(acquisition of) other intangibles		(46.9)	(41.1)
Purchase of property, plant, equipment and investment properties		(269.9)	(307.6)
Proceeds from sale of property, plant, equipment and investment
properties		13.9	11.6
Proceeds from/(acquisition of) other financial assets	6	(8.7)	(44.9)
Acquisition of marketable securities and deposits		(526.2)	(86.9)
Proceeds from marketable securities and deposits		225.6	69.2
Net cash from/(used in) investing activities		(908.0)	428.3
Cash flows from financing activities
Proceeds from debt and other financial liabilities		256.0	218.1
Repayment of debt and other financial liabilities		(326.9)	(474.2)
Net proceeds from / (repayments of) short-term financing		7.9	97.2
Other non-controlling interest transactions (mainly dividend paid)		(29.8)	(19.3)
Movement in treasury shares		0.4	(1.7)
Dividend paid		(278.7)	(107.5)
Net cash from/(used in) financing activities		(371.1)	(287.4)
Increase/(decrease) in cash and cash equivalents		(722.2)	746.9
Cash and cash equivalents at beginning of year		2,728.6	2,029.7
Effect of exchange rate changes, reclassifications and accounting policy
change		(7.6)	(48.0)
Cash and cash equivalents retranslated at beginning of year		2,721.0	1,981.7
Net increase/(decrease) in cash and cash equivalents		(722.2)	746.9
Cash and cash equivalents at end of period		1,998.8	2,728.6

All amounts in millions of euro, unless otherwise stated

1. Segmentation

he consolidated financial statements are significantly affected by the consolidation of Vopak and Safilo. Accordingly, the segmented information on a basis whereby Vopak and Safilo are not consolidated is materially different. This section provides segmented information excluding the effect of the consolidation of Vopak and Safilo. T

Operating income by segment

	2017	2016
Optical retail	415.1	410.3
Unquoted	150.2	156.6
Quoted minority interests	145.9	59.3
Real estate	(0.3)	0.8
Liquid portfolio	79.5	18.5
Total operating income	790.4	645.5
Reconciling items:
- Amortization and impairment	(156.4)	(70.0)
- Other	19.2	540.1
Operating result as per the pro forma consolidated statement of income	653.2	1,115.6
Financial expense, net	(43.8)	(31.8)
Profit before tax as per the pro forma consolidated statement of income	609.4	1,083.8

The other reconciling items include corporate general and administrative expenses as well as nonrecurring gains and losses (excluding those of Vopak, Safilo and Boskalis).

The composition of revenues by segment is as follows:

	2017	2016
Optical retail	3,449.9	3,316.1
Unquoted	2,159.6	2,181.4
	5,609.5	5,497.5

The composition of assets by segment is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	3,238.9	2,957.9
Unquoted	2,464.8	2,365.8
Quoted minority interests	3,030.5	3,047.9
Real estate	88.0	46.1
Liquid portfolio	2,303.1	2,665.9
Reconciling items	123.7	111.8
	11,249.0	11,195.4

Dec. 31, 2017 Dec. 31, 2016 Optical retail 1.2 36.4 Unquoted 323.4 227.6 Quoted minority interests 2,543.9 2,553.2 Real estate 80.6 36.9 2,949.1 2,854.1

The composition of investments in associates and joint ventures by segment is as follows:

The composition of capital expenditures by segment is as follows:

	2017	2016
Optical retail	316.6	183.5
Unquoted	137.2	262.0
Real estate	0.1	1.0
Reconciling items	0.1	0.2
	454.0	446.7

Capital expenditure consists of additions of property, plant and equipment, investment properties and intangible assets. The reconciling items represent corporate capital expenditure.

The composition of liabilities by segment is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	1,938.7	1,771.8
Unquoted	1,226.3	1,320.0
Real estate	0.3	0.4
Liquid portfolio	2.2	0.9
Reconciling items	23.3	66.7
	3,190.8	3,159.8

The composition of revenues by geographical area is as follows:

	2017	2016
Europe	5,129.4	5,074.3
North-America	145.3	122.4
Asia	24.0	20.4
Other	310.8	280.4
	5,609.5	5,497.5

The composition of property, plant and equipment, investment properties, intangible assets and investment in associates and joint ventures by geographical area is as follows:

	Dec. 31,	Dec. 31,
	2017	2016
Europe	6,112.2	5,779.7
North-America	136.3	186.5
Asia	36.5	40.8
Other	174.6	171.1
	6,459.6	6,178.1

2. Property, plant and equipment

he amount of property, plant and equipment as per the consolidated financial statements (€ 5,030.7 million) is significantly affected by the consolidation of Vopak and Safilo and in particular the tank storage terminals of Vopak (€ 3,132.2 million at the end of 2017). T

The table on the next page provides information on property, plant and equipment excluding the assets of Vopak and Safilo.

	Land and buildings	Vessels	Equipment	Total
Cost value	899.2	530.0	1,637.2	3,066.4
Accumulated depreciation	(483.1)	(115.2)	(1,238.2)	(1,836.5)
Balance on January 1, 2016	416.1	414.8	399.0	1,229.9
Investments	73.4	110.1	123.1	306.6
Consolidation	5.2	-	6.6	11.8
Disposals	(4.6)	-	(5.4)	(10.0)
Depreciation and impairments	(53.0)	(33.2)	(103.2)	(189.4)
Reclassification*	(29.9)	-	(18.9)	(48.8)
Exchange differences	(6.1)	12.2	(4.7)	1.4
Balance on December 31, 2016	401.1	503.9	396.5	1,301.5
Cost value	809.1	653.1	1,585.8	3,048.0
Accumulated depreciation	(408.0)	(149.2)	(1,189.3)	(1,746.5)
Balance on December 31, 2016	401.1	503.9	396.5	1,301.5
Investments	79.8	31.7	158.3	269.8
Consolidation and purchase price adjustments	15.4	-	10.8	26.2
Disposals	(5.6)	-	(4.4)	(10.0)
Depreciation and impairments	(56.3)	(34.7)	(105.4)	(196.4)
Reclassification	(0.8)	(0.6)	(2.0)	(3.4)
Exchange differences	(6.9)	(46.6)	(6.7)	(60.2)
Balance on December 31, 2017	426.7	453.7	447.1	1,327.5
Cost value	865.5	606.1	1,621.8	3,093.4
Accumulated depreciation	(438.8)	(152.4)	(1,174.7)	(1,765.9)
Balance on December 31, 2017	426.7	453.7	447.1	1,327.5

* Reclassifications primarily to assets held for sale

3. Intangible assets

he intangible assets are significantly affected by the consolidation of Vopak and Safilo. This section provides information on the intangible assets excluding those of Vopak and Safilo. T

Movements for goodwill and other intangibles are as follows:

		Rights of use and key	Trade	Customer
	Goodwill	money	marks	relationships	Other	Total
Cost value Accumulated amortization and	2,243.5	218.1	391.8	89.4	395.4	3,338.2
impairments	(611.5)	(9.4)	(171.4)	(30.0)	(284.1)	(1,106.4)
Balance on January 1, 2016	1,632.0	208.7	220.4	59.4	111.3	2,231.8
Investments Consolidation	95.8 -	1.7 1.9	- 11.0	0.6 73.5	41.0 17.1	139.1 103.5
Purchase price accounting adjustments Disposals Amortization and impairments Reclassification*	(3.6) - (2.3) (306.9)	- (0.7) (1.9) -	(2.3) - (24.6) (54.4)	5.4 (0.1) (12.0) (3.4)	- (1.4) (29.2) (7.8)	(0.5) (2.2) (70.0) (372.5)
Exchange differences and other	(14.8)	1.5	(2.4)	(0.6)	1.3	(15.0)
Balance on December 31, 2016	1,400.2	211.2	147.7	122.8	132.3	2,014.2
Cost value Accumulated amortization and	2,014.0	222.5	343.7	164.8	445.6	3,190.6
impairments	(613.8)	(11.3)	(196.0)	(42.0)	(313.3)	(1,176.4)
Balance on December 31, 2016	1,400.2	211.2	147.7	122.8	132.3	2,014.2
Investments Consolidation	136.5 -	3.5 1.7	- 33.2	0.8 122.7	43.3 19.1	184.1 176.7
Disposals Amortization and impairments Reclassification	- (81.6) 2.2	(0.6) (1.3) (2.2)	- (20.9) 0.3	- (15.2) 2.9	(0.1) (37.4) (2.5)	(0.7) (156.4) 0.7
Exchange differences and other	(31.8)	(0.8)	(4.1)	(3.4)	(2.4)	(42.5)
Balance on December 31, 2017	1,425.5	211.5	156.2	230.6	152.3	2,176.1
Cost value Accumulated amortization and	2,120.9	220.5	336.1	275.7	394.0	3,347.2
impairments	(695.4)	(9.0)	(179.9)	(45.1)	(241.7)	(1,171.1)
Balance on December 31, 2017	1,425.5	211.5	156.2	230.6	152.3	2,176.1

* Reclassifications primarily to assets held for sale

The "other" category consists of:

	Dec. 31, 2017	Dec. 31, 2016
Software Other	115.0 37.3	92.7 39.6
	152.3	132.3

4. Acquisitions

elow a summary is included of the acquisitions during 2017, excluding the acquisitions made by Vopak and Safilo. B

	Visilab	Tesco	Other	Total
Cash paid	67.1	61.8	29.7	158.6
Future consideration	37.9	5.6	2.2	45.7
Fair value of previously held equity interests	53.6	-	7.4	61.0
Fair value of net assets acquired	(68.1)	(55.9)	(19.1)	(143.1)
Non-controlling interest recognized	14.3	-	-	14.3
Goodwill	104.8	11.5	20.2	136.5

Reconciliation to cash flow statement:

	Total
Cash paid for the above acquisitions	158.6
Cash acquired	(6.1)
Cash outflow due to acquisition of subsidiaries, net of cash acquired	152.5
Acquisition of associates and joint arrangements	157.3
Cash outflow due to acquisition of associates, joint arrangements and subsidiaries, net of cash acquired	309.8

5. Investments in associates and joint arrangements

he amount of investments in associates and joint arrangements in the consolidated financial statements is significantly affected by the consolidation of Vopak. Vopak has a significant amount of associates and joint arrangements on its balance sheet (€ 968.7 million at the end of 2017). T

This section provides information about the investments in associates and joint arrangements excluding the investments in associates and joint arrangements of Vopak and Safilo.

The movement of investments accounted for using the equity method is as follows:

		Joint
	Associates	ventures	Total
Share of net assets	2,607.5	-	2,607.5
Goodwill	119.5	-	119.5
Balance on January 1, 2016	2,727.0	-	2,727.0
Investments	165.8	30.0	195.8
Consolidation	0.6	-	0.6
Disposals	(28.9)	-	(28.9)
Share of results	73.7	-	73.7
Share of other comprehensive income	2.4	-	2.4
Dividends	(76.0)	-	(76.0)
Reclassification*	(49.9)	5.0	(44.9)
Exchange differences and other	2.5	1.9	4.4
Balance on December 31, 2016	2,817.2	36.9	2,854.1
Share of net assets Goodwill	2,591.3 225.9	36.9 -	2,628.2 225.9
Balance on December 31, 2016	2,817.2	36.9	2,854.1

Investments	110.7	52.9	163.6
Consolidation	0.2	-	0.2
Disposals	(14.0)	-	(14.0)
Share of results Share of other comprehensive income	184.5 (75.7)	(0.2) -	184.3 (75.7)
Dividends	(71.0)	(0.2)	(71.2)
Reclassification**	(61.0)	-	(61.0)
Exchange differences	(22.4)	(8.8)	(31.2)

Balance on December 31, 2017	2,868.5	80.6	2,949.1
Share of net assets Goodwill	2,569.2 299.3	80.6 -	2,649.8 299.3
Balance on December 31, 2017	2,868.5	80.6	2,949.1

* Reclassifications primarily to business combinations and from investment property

** Reclassifications primarily to business combinations

The amounts recognized in the statement of financial position consist of:

	Dec. 31, 2017	Dec. 31, 2016
Publicly traded Other	2,543.9 405.2	2,553.2 300.9
	2,949.1	2,854.1

The difference between the market value of the Company's share in its publicly traded associates and the book value is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Market value Book value	3,871.8 (2,543.9)	4,490.9 (2,553.2)
	1,327.9	1,937.7

6. Other financial assets

he amount of other financial assets as per the consolidated financial statements (€ 792.2 million at the end of 2017) is affected by the consolidation of Vopak and Safilo. T

The table below provides information on other financial assets excluding the assets of Vopak and Safilo.

	Dec. 31, 2017	Dec. 31, 2016
Investments in quoted securities	593.8	576.3
Loans to associates and joint ventures	1.6	-
Other loans	40.9	45.2
Other	30.0	28.9
	666.3	650.4
Current	1.3	3.6
Non-current	665.0	646.8
	666.3	650.4

The category Other includes non-current deposits and receivables.

Investments in quoted securities include:

	Dec. 31, 2017	Dec. 31, 2016
Equity interest in SBM Offshore N.V. (16.13%, 2016: 15.54%) Equity interest in Chart Industries Inc. (8.94%, 2016: 7.8%)	486.6 107.2	494.7 81.6
	593.8	576.3

Amounts included in the cash flow statement comprise:

	Dec. 31, 2017	Dec. 31, 2016
Purchase of shares in SBM Offshore N.V.	-	(14.2)
Purchase of shares in Chart Industries Inc.	(10.6)	(56.5)
Loans provided to associates	(1.6)	-
Repayment of loans	3.5	-
Other	-	25.8
Changes in other financial assets in cash flow statement	(8.7)	(44.9)

7. Receivables

he amount of receivables in the consolidated financial statements (€ 811.7 million at the end of 2017) is significantly affected by the consolidation of Vopak and Safilo. T

This section provides information on the receivables, excluding those of Vopak and Safilo.

	Dec. 31,	Dec. 31,
	2017	2016
Trade receivables	553.2	543.5
Allowance for doubtful accounts	(24.0)	(22.5)
	529.2	521.0

The ageing analysis of the trade receivables that are past due but not impaired is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Up to 3 months	128.2	120.9
Between 3 and 6 months	9.7	16.9
Between 6 and 9 months	5.4	6.2
Over 9 months	14.1	17.2
	157.4	161.2

8. Inventories

he amount of inventories in the consolidated financial statements (€ 842.7 million at the end of 2017) is significantly affected by the consolidation of Vopak and Safilo. This section provides information on the inventories, excluding those of Vopak and Safilo. T

The composition of the inventories is as follows:

	Dec. 31,	Dec. 31,
	2017	2016
Raw materials	39.6	41.4
Work in progress	23.8	21.3
Finished goods	577.5	497.5
Provision for obsolete inventory	(36.5)	(38.3)
	604.4	521.9

9. Deferred taxes

he movement in deferred tax assets and liabilities during the period are set out on the following page. T

	Carry						Offset
	forward losses	PP&E	Intangibles	Inventories	Employee benefits	Other	assets and liabilities	Total
Assets	94.4	9.4	7.9	7.3	15.2	26.2	(93.0)	67.4
Liabilities	-	(64.7)	(159.3)	(13.1)	(12.1)	(24.4)	93.0	(180.6)
Net book value on January 1, 2016	94.4	(55.3)	(151.4)	(5.8)	3.1	1.8	-	(113.2)

Credited/(charged) to net income Credited/(charged) to other comprehensive	(10.2)	(0.9)	14.5	(1.5)	0.1	4.3	-	6.3
income Acquisitions and purchase price accounting	-	-	-	-	3.5	(4.7)	-	(1.2)
adjustments	3.3	-	(23.0)	-	-	-	-	(19.7)
Divestitures	4.4	-	2.5	-	-	2.5	-	9.4
Other movements	0.3	0.4	-	-	-	0.1	-	0.8
Reclassifications*	(23.1)	2.1	11.7	-	(0.1)	4.8	-	(4.6)
Exchange differences	0.9	(0.5)	(0.2)	(0.1)	(0.2)	-	-	(0.1)
Net book value on December 31, 2016	70.0	(54.2)	(145.9)	(7.4)	6.4	8.8	-	(122.3)
Assets Liabilities	70.0 -	10.5 (64.7)	6.9 (152.8)	6.6 (14.0)	17.8 (11.4)	25.7 (16.9)	(98.2) 98.2	39.3 (161.6)
Net book value on
January 1, 2017	70.0	(54.2)	(145.9)	(7.4)	6.4	8.8	-	(122.3)
Credited/(charged) to net income Credited/(charged) to	(22.3)	0.8	21.0	0.2	1.0	4.3	-	5.0
other comprehensive
income	-	-	-	-	(4.8)	1.9	-	(2.9)
Acquisitions	-	-	(32.6)	0.2	4.4	1.3	-	(26.7)
Other movements	0.8	-	-	-	-	0.7	-	1.5
Reclassifications	(0.3)	(0.1)	(1.6)	0.2	(0.1)	1.9	-	-
Exchange differences	(1.8)	2.7	3.2	(0.1)	(0.2)	(0.6)	-	3.2
Net book value on December 31, 2017	46.4	(50.8)	(155.9)	(6.9)	6.7	18.3	-	(142.2)
Assets Liabilities	46.4 -	11.1 (61.9)	8.9 (164.8)	7.4 (14.3)	22.1 (15.4)	27.2 (8.9)	(83.1) 83.1	40.0 (182.2)
Net book value on December 31, 2017	46.4	(50.8)	(155.9)	(6.9)	6.7	18.3	-	(142.2)

* Reclassifications primarily relate to reclassification to assets held for sale, and related liabilities, and adjustments for prior year offsetting within fiscal unities

Unused tax losses, excluding those of Vopak and Safilo, for which deferred tax assets have not been recognized are as follows:

Expiration	2017	2016
2017	-	0.1
2018	0.2	9.2
2019	6.3	10.7
2020	10.2	13.8
2021	13.6	22.8
2022 and further years	222.9	140.8
No expiration date	289.6	291.1
	542.8	488.5

Amounts including Vopak and Safilo	800.9	704.7

10. Pension benefits

he pension obligations are significantly affected by the consolidation of Vopak. The present value of the funded obligations and the fair value of the plan assets as per the consolidated financial statements are € (1,425.6) million, respectively € 1,389.8 million whereas excluding Vopak these amounts are significantly lower. This section therefore provides additional information on the pension obligations, excluding those of Vopak and Safilo. T

The amounts recognized on the pro forma statement of financial position comprise:

	Dec. 31, 2017	Dec. 31, 2016
Pension benefit assets Pension benefit liabilities	86.4 (107.1)	72.1 (83.9)
	(20.7)	(11.8)

The net pension benefits consist of:

	Dec. 31, 2017	Dec. 31, 2016
Present value of funded obligations	(157.8)	(97.7)
Fair value of plan assets	212.4	162.3
Surplus/(deficit) of funded obligations	54.6	64.6
Present value of unfunded obligations	(75.3)	(76.4)
Net asset/(liability) in the statement of financial position	(20.7)	(11.8)

The movement in the net liability is as follows:

	2017	2016
Balance on January 1	(11.8)	2.2
Pension charge defined benefit plans	(6.8)	(4.2)
Consolidation	(23.9)	-
Contributions	2.3	2.0
Remeasurement effects	18.7	(12.1)
Exchange differences and other	0.8	0.3
Balance on December 31	(20.7)	(11.8)

The increase of 23.9 million included in the line "Consolidation" is due to the acquisition of Visilab S.A. by GrandVision N.V.

The amounts recognized in the pro forma consolidated statement of income are as follows:

	2017	2016
Current service costs	4.6	3.3
Past service costs	1.5	-
Interest expense/(income)	0.6	0.7
Administrative costs	0.1	0.2
Total defined benefit costs	6.8	4.2
Other costs	22.8	23.5
Total, included in employee expenses	29.6	27.7

Other costs mainly relate to defined contribution plans and multi-employer pension plans classified as defined contribution plans.

The principal, weighted-average assumptions used were:

	Dec. 31, 2017	Dec. 31, 2016
Discount rate/return on assets	1.63%	1.82%
Future inflation rate Future salary increases	1.54% 2.43%	1.73% 2.88%

The latest available mortality tables were used.

The discount rates used in the determination of defined benefit obligations and pension charges are based on high quality corporate bonds (AA-rated) with a duration matching the duration of the pension liabilities.

As of December 31, 2017, the plan assets consist of:

	Level 1	Level 2	Level 3	Total	Total (%)
Equity instruments	91.1	0.1	-	91.2	42.9%
Debt instruments	29.4	0.5	-	29.9	14.1%
Cash and cash equivalents	49.7	-	-	49.7	23.4%
Other*	0.5	41.1	-	41.6	19.6%
	170.7	41.7	-	212.4	100.0%

* Other financial instruments in level 2 relate to the indirect right to the assets held by the Swiss foundation discussed in note 18 to the consolidated financial statements.

	Level 1	Level 2	Level 3	Total	Total (%)
Equity instruments	79.0	-	-	79.0	48.7%
Debt instruments	19.4	0.5	-	19.9	12.3%
Cash and cash equivalents	62.8	-	-	62.8	38.7%
Other	0.1	0.5	-	0.6	0.3%
	161.3	1.0	-	162.3	100.0%

As of December 31, 2016, the plan assets consisted of:

The sensitivity of the defined benefit obligation to changes in the principal, weighted-average assumptions is as follows:

	Impact on obligation
	Change	Increase	Decrease
Discount rate/return on assets	1.00%	(40.1)	54.2
Future inflation rate	1.00%	32.6	(25.5)
Future salary increases	0.25%	2.5	(2.5)
Life expectancy	1 year	7.6	N/A

The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. If plan assets underperform this yield, this will create a deficit. A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans' bond holdings. The majority of the plans' obligations are to provide benefits for the lifetime of the members, so increases in life expectancy will result in an increase in the plans' liabilities.

11. Provisions

he provisions (current and non-current) as per the consolidated financial statements amount to € 165.4 million. This amount is significantly affected by the consolidation of Vopak and Safilo. T

This section provides information on provisions excluding the amounts relating to Vopak and Safilo.

The composition and movement of the provisions is as follows:

	Dec. 31, 2017	Dec. 31, 2016
Current Non-current	27.9 28.8	36.3 18.4
	56.7	54.7

The breakdown and movement in provisions is as follows:

		Employee
	Environmental	related	Warranties	Regulatory	Other	Total
Balance on January 1,
2016	6.7	13.1	19.6	21.7	23.1	84.2
Addition to provision	0.1	27.9	3.8	4.9	1.4	38.1
Consolidation	-	-	(0.3)	-	(7.3)	(7.6)
Utilized during the year	(0.8)	(26.9)	(3.8)	(3.1)	(6.7)	(41.3)
Exchange differences	-	-	-	0.1	0.8	0.9
Released	(1.8)	(1.0)	(1.3)	(1.2)	(0.4)	(5.7)
Reclassifications and
other movements	(0.1)	(0.2)	(6.3)	-	(7.3)	(13.9)
Balance on December 31,
2016	4.1	12.9	11.7	22.4	3.6	54.7

Balance on January 1,
2017	4.1	12.9	11.7	22.4	3.6	54.7
Addition to provision	-	27.6	4.2	2.8	4.8	39.4
Consolidation	-	-	-	-	0.3	0.3
Utilized during the year	(0.6)	(24.9)	(3.6)	(2.9)	(2.9)	(34.9)
Exchange differences	-	(0.3)	-	(0.4)	(0.2)	(0.9)
Released	(0.3)	(1.5)	(0.2)	(1.2)	(0.8)	(4.0)
Reclassifications and
other movements	0.1	2.5	-	(2.0)	1.5	2.1
Balance on December 31,
2017	3.3	16.3	12.1	18.7	6.3	56.7

12. Debt and other financial liabilities

he amount of debt and other financial liabilities in the consolidated financial statements (€ 3,572.4 million) is significantly affected by the consolidation of Vopak and Safilo. The amount excluding Vopak and Safilo is significantly lower as set out below. T

Debt and other financial liabilities excluding Vopak and Safilo consists of:

	Dec. 31, 2017	Dec. 31, 2016
Debt Other financial liabilities	1,583.2 85.2	1,618.8 92.3
	1,668.4	1,711.1

	Dec. 31, 2017	Dec. 31, 2016
Non-current debt and other financial liabilities
Mortgage loans Other loans	351.7 475.1	409.8 479.2
Total non-current debt Non-current other financial liabilities	826.8 56.1	889.0 85.4
Total non-current debt and other financial liabilities	882.9	974.4
Current debt and other financial liabilities
Bank overdrafts	197.8	220.7
Bank loans	91.2	101.7
Current portion of long-term debt	68.5	65.4
Commercial paper	398.9	342.0
Total current debt	756.4	729.8
Current other financial liabilities	29.1	6.9
Total current debt and other financial liabilities	785.5	736.7
Total debt and other financial liabilities	1,668.4	1,711.1
The summary of debt per currency is as follows:
	Dec. 31, 2017	Dec. 31, 2016

	1,249.8
	365.4
19.4	3.6
1,583.2	1,618.8
	1,338.8 225.0

13. Accrued expenses

ccrued expenses in the consolidated financial statements amount to € 879.8 at the end of 2017, which is significantly influenced by the consolidation of Vopak and Safilo. The accrued expenses excluding the amounts related to Vopak and Safilo consist of: A

	Dec. 31, 2017	Dec. 31, 2016
Employee-related accruals	228.2	205.2
Customer prepayments	61.1	42.3
VAT and other tax liabilities	64.9	61.9
Deferred revenue	63.4	59.8
Other	213.7	237.9
Total accrued expenses	631.3	607.1

14. Revenues

evenues included in the consolidated financial statements amount to € 8.0 billion of which € 2.4 billion is related to Vopak and Safilo. R

Revenues excluding those of Vopak and Safilo can be detailed as follows:

	2017	2016
Sale of goods	5,096.2	5,062.3
Services	444.5	366.2
Franchise fees	68.8	69.0
	5,609.5	5,497.5

15. Share of results from associates and joint ventures

esults from associates and joint ventures as per the consolidated financial statements is affected by the inclusion of the results Vopak and Safilo, in particular by the results of the joint ventures of Vopak. R

The table below provides information on the results from associates excluding those of Vopak and Safilo.

	2017	2016
Share of results	146.4	65.8
Revaluation upon gaining control	37.9	7.9
	184.3	73.7

16. Employee expenses

he table below provides information on the employee expenses excluding the employee expenses of Vopak and Safilo. T

	2017	2016
Wages and salaries	1,213.1	1,211.4
Social security costs	236.9	239.2
Pension costs	29.6	27.7
Other	200.1	194.0
	1,679.7	1,672.3

The average number of persons employed by the Company and its subsidiaries, excluding Vopak and Safilo, during 2017 was 40,231 (2016: 38,773) on a full-time equivalent basis.

Reference is made to note 10 for details of the pension costs.

17. Other operating expenses

he table below provides information on the other operating expenses excluding the other operating expenses of Vopak and Safilo. T

	2017	2016
Rent	538.8	545.9
Marketing and publicity expenses	198.8	200.9
Staffing expenses Atlas Professionals B.V.	122.9	98.5
Other	414.5	405.8
	1,275.0	1,251.1

Research and development costs expensed, excluding Vopak and Safilo, during 2017 was € 7.5 million (2016: € 8.3 million).

18. Income tax expense

ncome taxes in the consolidated financial statements, and in particular the analysis of the effective tax rate, are significantly affected by the consolidation of Vopak and Safilo. I

The tax charge excluding the consolidation of Vopak and Safilo can be detailed as follows:

	2017	2016
Current income taxes	141.9	129.5
Deferred income taxes	(5.0)	(6.3)
	136.9	123.2

The table below provides an analysis of the effective tax rate excluding the consolidation of Vopak and Safilo.

	2017	2016
Profit before income tax	609.4	1,083.8
Less: after-tax share of results from associates	(184.3)	(73.7)
Less: non-taxable other income (sale of subsidiaries and associates)	(4.1)	(561.7)
Adjusted profit before income tax	421.0	448.4
Income tax expense	136.9	123.2
Effective tax rate (%)	32.5	27.5

	2017		2016
Composition	Amount	%	Amount	%
Weighted-average statutory tax rate	113.7	27.0	123.8	27.6
Goodwill impairment	21.4	5.1	0.7	0.2
Recognition of tax losses	21.5	5.1	20.6	4.6
Non-taxable income	(22.8)	(5.4)	(35.6)	(7.9)
Non-deductible expenses	13.4	3.2	18.2	4.1
Prior year movements	(4.7)	(1.1)	2.5	0.6
Rate changes and other effects	(5.6)	(1.4)	(7.0)	(1.7)
Effective tax (rate)	136.9	32.5	123.2	27.5

The increase in the effective tax rate compared to the prior year is primarily due to the nondeductibility of the goodwill impairments.

19. Cash flows from operating activities

Cash flows from operating activities	2017	2016
Profit before taxes	609.4	1,083.8
Depreciation and impairments	196.9	189.8
Amortization and impairments 3	156.4	70.0
(Profit)/loss on sale of property, plant and equipment and
investment properties	(3.9)	(0.8)
(Profit)/loss on sale of other financial assets and marketable
securities	(63.4)	(15.8)
Fair value gain on remeasurement of previously held equity
interest 15	(24.7)	(7.9)
Results from associates and joint ventures, net of
impairments 15	(159.6)	(65.8)
(Profit)/loss on assets and liabilities held for sale	-	(561.7)
Net financial expense	43.8	31.8
Other movements in provisions and pension benefits	(3.1)	(9.8)
Dividend from associates and joint ventures 5	71.2	76.0
Changes in working capital	(89.9)	(26.4)
Cash generated from operating activities	733.1	763.2

20. Share-based compensation

he amount of expenses and liabilities related to share-based compensation in the consolidated financial statements (€ 18.8 million and € 24.8 million, respectively) is also affected by the consolidation of Vopak and Safilo. The amounts excluding Vopak and Safilo are lower, as set out below. T

Expenses related to share-based compensation consist of:

	2017	2016
HAL Holding N.V.
Share Plan*	1.6	1.7
GrandVision
Equity plan*	0.9	1.5
Long-Term Incentive Plan*	10.3	13.8
Unquoted subsidiaries
Cash Plans**	7.8	7.1
Total	20.6	24.1
* Equity-settled

** Cash-settled

2017 2016 HAL Holding N.V. Share Plan 1.6 1.7 GrandVision Equity plan 0.9 1.5 Long-Term Incentive Plan 10.3 13.7 12.8 16.9

Increases in equity for share-based compensation plans amounted to:

Liabilities recognized in relation to cash-settled share-based compensation are comprised of:

	Dec. 31, 2017	Dec. 31, 2016
GrandVision
Long-Term Incentive Plan	-	0.2
Unquoted subsidiaries
Cash Plans	22.6	13.2
	22.6	13.4

The current part of this liability of € 0.6 million (2016: € 0.8 million) is included under current debt and the non-current part of € 22.0 million (2016: € 12.6 million) under non-current debt.

21. Financial risk management

he financial risk management of the Company is set out in note 37 to the consolidated financial statements. In this note it is set out that the financial risks of Vopak, Safilo and the companies belonging to the optical retail and unquoted segment are not managed by the Company but by these entities. T

As the financial risks of Vopak and Safilo are, in aggregate, substantial, the tables below provide quantitative information with respect to the financial risks of the Company excluding the amounts relating to Vopak and Safilo.

Credit risk

The maximum exposure to credit risk can be specified by segment as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	465.9	464.0
Unquoted	594.2	594.7
Real estate	2.0	0.2
Liquid portfolio	1,774.4	2,474.5
	2,836.5	3,533.4

These financial assets can be further specified as follows:

	Dec. 31, 2017	Dec. 31, 2016
Loans	42.5	45.2
Trade and other receivables	529.2	521.0
Marketable securities and deposits	56.2	38.7
Derivative financial instruments	6.5	12.3
Other financial assets	30.0	28.9
Other current assets	173.3	158.7
Cash and cash equivalents	1,998.8	2,728.6
	2,836.5	3,533.4

At the end of 2017, cash and cash equivalents can be specified by segment as follows:

	Dec. 31, 2017	Dec. 31, 2016
Optical retail	164.7	181.1
Unquoted	115.8	111.5
Real estate	0.1	0.2
Liquid portfolio	1,718.2	2,435.8
	1,998.8	2,728.6

Liquidity risk

The following tables categorize the undiscounted cash flows of non-derivative financial liabilities and derivative financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting periods to the contractual maturity date, excluding the amounts relating to Vopak and Safilo. The financial guarantee contracts are contingent liabilities.

	December 31, 2017
	< 1 year	1-2 years	3-5 years	> 5 years
Non-derivative liabilities
Redemption of debt	756.4	120.5	605.3	101.0
Redemption of other financial liabilities	29.1	26.8	17.8	11.5
Interest payments	23.3	14.3	23.8	10.0
Accounts payable	468.5	-	-	-
Financial guarantee contracts	6.9	3.3	1.0	0.6
Total undiscounted non-derivative financial liabilities	1,284.2	164.9	647.9	123.1
Derivative liabilities
Gross-settled derivative liabilities outflow	245.2	-	-	-
Gross-settled derivative liabilities inflow	(240.6)	-	-	-
Total gross-settled derivative liabilities	4.6	-	-	-
Net-settled derivative liabilities	5.9	3.0	1.5	0.3
Total undiscounted derivative liabilities	10.5	3.0	1.5	0.3
Total undiscounted financial liabilities	1,294.7	167.9	649.4	123.4

	December 31, 2016
	< 1 year	1-2 years	3-5 years	> 5 years
Non-derivative liabilities
Redemption of debt	729.8	97.0	689.2	102.8
Redemption of other financial liabilities	6.9	55.5	35.3	11.8
Interest payments	22.6	18.0	33.4	9.9
Accounts payable	470.9	-	-	-
Financial guarantee contracts	8.0	6.5	3.4	2.8
Total undiscounted non-derivative financial
liabilities	1,238.2	177.0	761.3	127.3
Derivative liabilities
Gross-settled derivative liabilities outflow	151.8	-	-	-
Gross-settled derivative liabilities inflow	(150.7)	-	-	-
Total gross-settled derivative liabilities	1.1	-	-	-
Net-settled derivative liabilities	3.9	6.4	1.0	3.1
Total undiscounted derivative liabilities	5.0	6.4	1.0	3.1
Total undiscounted financial liabilities	1,243.2	183.4	762.3	130.4

The total debt, excluding the debt of Vopak and Safilo, as of December 31, 2017, amounted to € 1,583.2 million (2016: € 1,618.8 million). For 100% of the bank debt, the applicable covenants were complied with during 2016 and 2017. At the end of 2017, unused committed credit facilities were available to an amount of € 1,204.2 million (2016: € 1,035.7 million). These exclude the facilities of Vopak and Safilo.

Market risk - currency risk

The table below shows the net assets per currency (taking into account debt and hedging instruments denominated in foreign currency), excluding the exposures of Vopak and Safilo.

	Dec. 31, 2017	Dec. 31, 2016
U.S. dollar	485.1	432.2
Swiss franc	197.8	35.6
U.K. pound sterling	108.9	122.2
Swedish krona	69.3	71.2
Danish krone	64.6	49.9
Mexican peso	62.2	58.6
Chilean peso	58.8	58.6
Hungarian forint	53.9	43.6
Norwegian krone	47.8	71.2
Turkish lira	29.3	26.9
Other	248.9	247.7
	1,426.6	1,217.7

An average change in value of these currencies by 10% would have a pre-tax effect on the pro forma consolidated equity of € 142.7 million. The market value of the currency derivative financial instruments at December 31, 2017, per the consolidated financial statements is a net liability of € 15.3 million on a notional amount of € 1,328.9 million (2016: net liability € 4.4

million, notional amount € 1,385.3 million). These amounts are primarily comprised of derivatives of Vopak and Safilo. The amount excluding Vopak and Safilo is a net liability of € 0.5 million on a notional amount of € 356.8 million (2016: net asset € 4.2 million, notional amount € 341.2 million).

Market risk - interest rate risk

As of December 31, 2017, taking into account interest rate swaps, 69% (2016: 60%) of the total debt, excluding the bank debt of Vopak and Safilo, of € 1,583.2 million (2016: € 1,618.8 million) was at fixed rates for an average period of 3.1 years (2016: 3.6 years). The weighted-average interest rate was 0.8% (2016: 1.2%).

22. Capital risk management

he table below summarizes the capital structure excluding the impact from the consolidation of Vopak and Safilo. T

	Dec. 31,	Dec. 31,
	2017	2016
Equity	7,572.6	7,599.4
Non-current debt	826.8	889.0
Current debt	756.4	729.8
Cash and cash equivalents	(1,998.8)	(2,728.6)
Total capital employed	7,157.0	6,489.6

The net asset value based on the market value of the ownership interests in quoted companies and the liquid portfolio and on the book value of the unquoted companies amounted to € 12,122 million on December 31, 2017 (2016: € 12,754 million). The net asset value consists of the sum of the shareholders' equity attributable to the owners of the parent (€ 7,573 million) and the difference between the market value of the ownership interests in quoted companies and their book value (as disclosed on page 110), calculated based on equity accounting and excluding the difference due to purchase price accounting adjustments (€ 4,549 million).

23. Capital and financial commitments

apital commitments C

The capital commitments in respect of property, plant and equipment under construction, excluding those of Vopak and Safilo, amounted to € 63.5 million (2016: € 74.4 million).

Financial commitments

The future minimum lease payments under non-cancellable operating leases and other commitments, excluding those of Vopak and Safilo, are as follows:

	2017	2016
No later than 1 year	365.6	353.0
Later than 1 year and no later than 5 years	736.2	686.3
Later than 5 years	259.1	186.7
	1,360.9	1,226.0

The lease commitments are mainly in respect of the lease of stores, offices and other buildings.

Financial Statements HAL Trust

	2017	2016
Assets
Shareholding in HAL Holding N.V.	69.3	69.3
Trust Property	69.3	69.3
Statement of Comprehensive Income HAL Trust (in millions of euro)
	2017	2016
Dividend received from HAL Holding N.V.	558.0	496.6
Net Income	558.0	496.6
Statement of Changes in Trust Property (in millions of euro)

Balance on January 1, 2017 Dividend received from HAL Holding N.V. (in cash and in shares)		69.3 558.0
Distributed to unit holders (in cash and in shares)		(558.0)
Balance on December 31, 2017		69.3
Statement of Cash Flows HAL Trust (in millions of euro)
	2017	2016
Dividend received from HAL Holding N.V.	(278.7)	(107.5)
Distributed to Unit Holders Net change	278.7 -	107.5 -
Notes to the statutory financial statements (in millions of euro)

Statement of Financial Position HAL Trust (in millions of euro)

he shares in HAL Holding N.V. are accounted for at historical cost. As of December 31, 2017, HAL Trust owned 80,124,524 shares of HAL Holding N.V. (2016: 78,589,572) T

t is proposed to the Shareholders' Meeting of HAL Trust to instruct the Trustee to vote, at the General Meeting of Shareholders of HAL Holding N.V., in favor of the proposals to approve the Financial Statements for 2017 and to pay a dividend of € 6.20 per Share outstanding of which € 3.10 per Share shall be payable in Shares in the share capital of HAL Holding N.V. and € 3.10 per Share in cash. I

It is proposed to direct the Trustee:

to issue by way of stock dividend distribution to each HAL Trust Shareholder: such number of Shares as shall be based on the Conversion ratio, the number of Shares held by such HAL Trust Shareholder and the dividend per HAL Trust Share of € 3.10 payable in shares (refer to the explanatory notes to the agenda items 2(d) and 4 of the Notice to Trust Shareholders);
to pay a cash dividend of € 3.10 per HAL Trust Share; and
to convey to HAL Holding N.V. prior to June 19, 2018, for what amount cash payments are to be made to the Trustee representing the value of fractions of HAL Trust Shares (if any) to which the respective HAL Trust Shareholders will be entitled on the basis of the Conversion ratio.

Shareholders holding their shares through Euroclear Nederland will be paid via affiliated banks and security brokers. To the other Shareholders payment of the dividend due is made directly, in accordance with the conditions agreed upon with these Shareholders.

The text of Article VII, Section 7.1 of the Trust Deed reads:

Profits of the Trust. The profits of the Trust in respect of a Financial Year as they appear in the profit and loss account of the Trust as approved by an Ordinary Resolution as provided in Section 14.3 shall be applied as follows:

(A) FIRST: out of the profits such dividend as may be determined by Ordinary Resolution shall be distributed to the Trust Shareholders in proportion to the number of Units represented by the Shares held by such Trust Shareholders
(B) SECOND: the remaining part of the profits, if any, shall be retained as Trust Property.

o the Trustee and Shareholders of HAL Trust T

Report on the financial statements

Our opinion

In our opinion the accompanying consolidated financial statements and stand-alone financial statements give a true and fair view of the consolidated financial position of HAL Trust (the 'Trust') and its subsidiaries (together: the 'Group') and the stand-alone financial position of the Trust as at December 31, 2017, and of their consolidated and stand-alone financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS).

What we have audited

The consolidated financial statements and the stand-alone financial statements (collectively referred to as the 'financial statements') are included on pages 21 to 141.

The financial statements comprise:

the consolidated and stand-alone statements of financial position as at December 31, 2017;
the consolidated statement of income for the year ended December 31, 2017;
the consolidated and stand-alone statements of comprehensive income for the year ended December 31, 2017;
the consolidated statement of changes in equity and the stand-alone statement of changes in trust property for the year ended December 31, 2017;
the consolidated and stand-alone statements of cash flows for the year ended December 31, 2017; and
the notes to the consolidated and stand-alone financial statements, comprising a summary of significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the 'Auditor's responsibilities for the audit of the financial statements' section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the ethical requirements of the Chartered Professional Accountants of Bermuda Rules of Professional Conduct (CPA Bermuda Rules) that are relevant to our audit of the financial statements. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the ethical requirements of the CPA Bermuda Rules.

Our audit approach

The Group is comprised of several components and therefore we considered our Group audit scope and approach as set out in the "How we tailored our group audit scope" section of our report. We paid specific attention to the areas of focus driven by the operations of the Group, as set out below.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the Executive Board of HAL Holding N.V. made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.

In the "Basis of preparation" section on page 29 of the financial statements, HAL Holding N.V. describes the areas of judgment in applying accounting policies and the key sources of estimation uncertainty. Given the higher inherent risks of material misstatement in the impairment testing of goodwill, valuation of intangible assets in acquisitions and impairment testing of tank terminal assets and joint ventures and associates, we considered these to be key audit matters as set out in the "Key audit matters" section of this report. As in all of our audits, we addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the Executive Board of HAL Holding N.V. that may represent a risk of material misstatement due to fraud. Another area of focus that was not considered to be a key audit matter was the risk of fraud in revenue recognition.

The key audit matters "Impairment testing of goodwill" and "Impairment testing of tank terminal assets and joint ventures and associates" are similar in nature to the key audit matters we reported in 2016 as these are inherent to the Group's business and its environment. Last year's key audit matter on the 'Accounting for acquisitions and divestments' was specific for 2016 only whilst the key audit matter "Valuation of intangible assets in acquisitions" specifically relates to 2017 acquisitions.

We ensured that the audit teams both at Group and at component levels included the appropriate skills and competencies which were needed for the audit. We included specialists in the areas of IT, valuation, pensions, share-based compensation and taxes in the audit teams.

The outline of our audit approach was as follows:

Materiality	• Overall materiality: € 34.5 million which represents 5% of profit before tax (adjusted for specific non-recurring items and non controlling interest).
Group scoping	• We conducted our audit work at the Trust and HAL's corporate entities and 16 components, as described in the section 'How we tailored our group audit scope'. • Each of the 16 components was audited by a local component audit team with whom the group audit team has been in frequent contact. Site visits were conducted for 6 components including the individually financially significant components Koninklijke Vopak N.V. ('Vopak'), Safilo Group S.p.A. ('Safilo') and GrandVision N.V. ('GrandVision').
	• Audit coverage: 100% of consolidated revenue, 91% of consolidated total assets and 92% of profit before tax.
Key audit matters	• Impairment testing of goodwill • Valuation of intangible assets in acquisitions • Impairment testing of tank terminal assets and joint ventures and associates

Materiality

The scope of our audit was influenced by our application of materiality which is further explained in the section "Auditor's responsibilities for the audit of the financial statements" of our report. An audit is designed to obtain reasonable assurance about whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Based on our professional judgment, we determined certain quantitative thresholds for materiality, including the overall Group materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole.

Overall group materiality	€ 34.5 million
How we determined it	5% of adjusted profit before tax
Rationale for the materiality benchmark applied	We used profit before tax as the primary benchmark, a generally accepted auditing practice, based on our analysis of the common information needs of users of the financial statements. On this basis we believe that profit before tax is an important metric for the financial performance of the Group. We adjusted profit before tax to exclude the effect of specific non-recurring items from our benchmark. Adjusted profit before tax therefore excludes specific non-recurring items including the gains realized on revaluation of previously held equity interest of € 37.9 million, impairments of € (181.9) million and certain other items of € (25.5) million as disclosed in note 2 to the consolidated financial statements. At the request of the Executive Board of HAL Holding N.V., we further reduced materiality by excluding the effect of profits attributable to non-controlling interest from our benchmark insofar as they are not already excluded by the specific non-recurring items above. In 2017 this amount totals to € 259.2 million.
Component materiality	To each component in our audit scope, we, based on our judgement, allocated materiality that is less than our overall group materiality. The materiality allocated across components was in the range of € 0.2 million to € 18.5 million.

We also take misstatements and/or possible misstatements into account that, in our judgement, are material for qualitative reasons.

We agreed with the Executive Board and the Supervisory Board of HAL Holding N.V. that we would report to them misstatements identified during our audit above € 250,000 other than for Vopak and Safilo as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons. In relation to Vopak and Safilo, we agreed with the Executive Board and Supervisory Board of HAL Holding N.V. that we would report to them misstatements identified during our audit above € 925,000 and € 275,000, respectively.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. We have communicated the key audit matters and a summary of the audit procedures we performed on those matters, to the Supervisory Board of HAL Holding N.V. The key audit matters are not a comprehensive reflection of all matters that were identified by our audit and that we discussed.

The key audit matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon. We do not provide a separate opinion on these matters or on specific elements of the financial statements. Any comments we make on the results of our procedures should be read in this context.

Key audit matter How our audit addressed the key audit matter

Impairment testing of goodwill

See notes 4 and 35 of the consolidated financial statements for the Executive Board's disclosures of related accounting policies, judgements and estimates.

The goodwill on the consolidated statement of financial position of the Group totals to € 1,534.8 million. Of this amount, € 1,250.4 million relates to the segment 'Optical retail', € 175.0 million to the segment 'Unquoted' and the remainder relates to the segment 'Quoted minority interests'. In assessing whether these amounts are recoverable, management used the higher of the value in use (VIU) and the fair value less cost of disposal (FVLCOD).

We considered this to be an area of focus given the level of management judgement involved in assessing the recoverable amounts through either continued use or sale. In relation to discounted cash flow assumptions within the VIU and FVLCOD assessments, the growth rates of revenue, anticipated gross margin improvements and discount rates are considered to be the most sensitive assumptions. For the FVLCOD assessment based on the sales multiple, the key assumption applied is the determination of the sales multiple applied to a particular market.

Management's annual impairment assessment resulted in the recognition of an impairment of goodwill of € 81.6 million (note 35).

Our audit procedures included, amongst others, an evaluation of the Group's policies and procedures applied in the annual impairment of goodwill test performed to identify potential impairments of goodwill balances.

For management's VIU and FVLCOD calculations using the discounted cash flow method, we have evaluated and challenged component management's key cash flow assumptions, including but not limited to growth rates of revenue and anticipated gross margin improvements, and corroborated them by comparing to internal forecasts and long-term and strategic plans that were approved by component management and the respective local supervisory boards. We also performed historic trend analyses to assess the quality of the component's forecasting process and – with the assistance of our valuation experts – evaluated the discount rate applied for each cashgenerating unit.

For the FVLCOD calculations based on the sales multiple, we evaluated the reasonableness of management's applied sales multiples by comparing them with recent market transactions and listed peer companies.

Based on our procedures, we consider management's key assumptions used to be reasonable and the related disclosures in note 35 to the financial statements to be adequate.

Key audit matter How our audit addressed the key audit matter

Valuation of intangible assets in acquisitions

See notes 5 and 6 of the consolidated financial statements for the Executive Board's disclosures of related accounting policies, judgements and estimates.

During 2017 certain entities controlled by the Trust entered into various acquisition agreements with several unrelated parties. The Our audit procedures on acquisitions included an assessment of the purchase agreements, the process that management has undertaken to

combined purchase amount of these acquisitions totals to € 333.1 million.

We considered this to be an area of focus given that the valuation of intangible assets in acquisitions requires significant judgement by management in allocating the purchase consideration to assets acquired and liabilities assumed based on their respective fair values. This included, but was not limited to, assessing the fair value of intangible non-current assets acquired including trademarks and customer databases totaling to € 176.2 million and the valuation of the future consideration of € 45.7 million. The remaining unallocated balance determined the value of goodwill, which totaled to € 136.5 million.

As part of the valuation process, management utilizes valuation experts to assist in the determination of the total consideration and valuation of identified assets.

determine the allocation of purchase consideration including contingent adjustments, including but not limited to, understanding the scope of work, assessing the qualifications, competence and objectivity of the valuation experts engaged by the Group and evaluating the process and oversight performed by the Group's finance team on harmonizing the accounting policies.

Furthermore, with the assistance of our valuation experts we tested the fair value measurements prepared by management and their valuation experts, including evaluating the key valuation assumptions used and the accounting for the future consideration in relation to the remaining non-controlling interest which may be acquired in the future. We corroborated and, where appropriate, benchmarked key data used in the valuation model, such as the pre-acquisition carrying values, discount rates, royalty rates and retention rates for the valuation of customer databases.

Based on our procedures, we considered management's allocation of purchase consideration including contingent adjustments and fair value measurements to be appropriate. Further, we consider the related disclosures in notes 5 and 6 to the financial statements to be adequate.

Key audit matter How our audit addressed the key audit matter

Impairment testing of tank terminal assets and joint ventures and associates

See notes 3, 6 and 35 of the consolidated financial statements for the Executive Board's disclosures of related accounting policies, judgements and estimates.

Vopak controls a number of tank storage terminals with a total carrying value of € 3,132.2 million (note 3). Furthermore, Vopak has an interest in a number of joint ventures and associates, with a total carrying value of € 968.7 million (note 5 Supplemental Information).

We considered this to be an area of focus as the determination as to whether or not these assets are carried at more than their recoverable

We evaluated the policies and procedures to identify triggering events for potential impairments of terminal assets, joint ventures and associates.

For the tank terminal assets, joint ventures and associates that triggered impairment testing, we evaluated the impairment testing policies and procedures, we challenged primary cash flow assumptions and corroborated them by comparing to commercial contracts, customer

amounts is subject to significant management judgement. Such judgement focuses predominantly on future cash flows, which are, amongst others, dependent on economic conditions, the continued attractiveness of the terminal location for users along the major shipping routes and local market circumstances and as such are inherently uncertain.

As described in note 35 of the consolidated financial statements, Vopak recognized (net) impairments on tank terminal assets and joint ventures and associates in an amount totaling € 93.9 million. The Group has also provided disclosures for the uncertainties in relation to the recoverable value of the tank terminal assets, joint ventures and associates.

relationship management information, available market reports, historic trend analyses and, where available, market multiples from recent tank terminal sales transactions in the region.

Valuation experts were involved to evaluate the discount rate by country as applied by Vopak and the appropriateness of certain assumptions in the applied value in use calculations or, when applicable, the fair value less cost of disposal calculations.

Based on our procedures, we consider management's key assumptions used in measuring the recoverable amount to be within a reasonable range of our own expectations and the related disclosures on key estimates, uncertainties and impairments in note 35 to the financial statements to be adequate.

How we tailored our group audit scope

HAL Trust holds 100% of the shares of HAL Holding N.V., a Curaçao based limited liability company, that manages the group of entities included in the financial statements. The financial information of HAL Holding N.V. and this group of entities are included in the financial statements of HAL Trust. As indicated on page 159 to 162, the Executive Board and the Supervisory Board reside at the level of HAL Holding N.V.

We tailored the scope of our audit to ensure that we performed sufficient work to be able to provide an opinion on the financial statements as a whole, taking into account the management structure of the Group, the nature of operations of its components, the accounting processes and controls, and the markets in which the components of the Group operate.

We conducted audit work at HAL Trust, HAL's corporate entities and 16 of its components. A full-scope audit was performed at three components as we determined these components to be individually financially significant to the Group. These three components are: Vopak (The Netherlands), Safilo (Italy) and GrandVision (The Netherlands). Additionally, two components were selected for full scope audit procedures based on our scoping determinations. At the request of the Executive Board and the Supervisory Board of HAL Holding N.V., we undertook full scope audits at 11 additional components. For HAL Trust and HAL's corporate entities including HAL Holding N.V., the group engagement team performed the audit work. For all other components that are in scope of the Group audit, the group audit team used component auditors, who are familiar with the local laws and regulations, to perform this audit work.

In establishing the overall group audit strategy and plan, we determined the type of work required to be performed at the component level by the group engagement team and by each component auditor. Where the work was performed by component auditors, the group audit team determined the level of involvement it needed to have in the audit work at those components, to be able to conclude whether sufficient appropriate audit evidence had been obtained, to support our opinion on the financial statements as a whole. The group engagement team visited local management and the component auditors of Vopak (The Netherlands), Safilo (Italy) and GrandVision (The Netherlands) given the significance of these components. For each of these components the group audit team reviewed all reports regarding the audit approach and audit findings of the component auditors, has held several meetings with and reviewed the selected working papers of the

component auditors and assessed the sufficiency and appropriateness of the work performed by the component auditors.

The group audit team also attended the meetings of the component auditors with local management where the outcome of the component audit was discussed for Timber and Building Supplies Holland N.V. (The Netherlands), Broadview Holding B.V. (The Netherlands), Atlas Services Group Holding B.V. (The Netherlands) and Orthopedie Investments Europe B.V. (The Netherlands). The group audit team reviewed all reports regarding the audit approach and audit findings of the component auditors.

In total, by performing these procedures, we achieved the following coverage on the financial line items:

Audit coverage per financial statements line item*
Revenue	100%
Total assets	91%
Profit before tax	92%

* In our audit coverage percentages we included the portions of the full scope components on a 100% basis. Taken together, and excluding our group analytical procedures, our audit coverage defined in percentages in the table above is based on the full scope audits performed as described above.

None of the remaining components represented more than 1% of total group revenue or 7% of total group assets. For those remaining components the group audit team performed analytical procedures to corroborate the assessment that there were no significant risks of material misstatements within those components. In instances where the remaining component was a quoted entity, the group audit team also performed reconciliations to the audited financial statements.

By performing these procedures, sufficient and appropriate audit evidence has been obtained on the Group's financial information, as a whole, to provide a basis for our opinion on the financial statements.

Other information

The Executive Board of HAL Holding N.V. is responsible for the other information, which comprises the report of the Trust Committee, the report of the Supervisory Board of HAL Holding N.V. and the report of the Executive Board of HAL Holding N.V., which we obtained prior to the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financial statements

The Executive Board of HAL Holding N.V. is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS, and for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Executive Board of HAL Holding N.V. is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going-concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The Supervisory Board is responsible for supervising the procedures followed by the Executive Board of HAL Holding N.V. in the preparation of the financial statements.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are 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 financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures of the Group and of the Trust, made by the Executive Board of HAL Holding N.V.
Conclude on the appropriateness of the HAL Holding N.V. Executive Board's use of the goingconcern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Trust'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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Trust to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Group financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion on the Group financial statements.

We communicate with the Supervisory Board of HAL Holding N.V. 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.

We also provide the Supervisory Board of HAL Holding N.V. 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 reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Supervisory Board of HAL Holding N.V., we determine those matters that were of most significance in the audit of the financial statements of the Trust for the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Scott Watson-Brown.

Hamilton, Bermuda, March 29, 2018

PricewaterhouseCoopers Ltd.

Chartered Professional Accountants

Five-Year Summary Consolidated Statement of Financial Position

In millions of euro	2017*	2016*	2015*	2014	2013
Non-current assets
Property, plant and equipment	1,327.5	1,301.5	1,229.9	1,084.7	983.1
Investment properties	6.9	8.3	13.3	1.4	32.2
Intangible assets	2,176.1	2,014.2	2,231.8	2,065.7	1,885.3
Investments in associates and joint
arrangements	2,949.1	2,854.1	2,727.0	2,419.6	2,148.8
Other financial assets	667.4	653.8	474.1	399.7	516.6
Pension benefits	86.4	72.1	74.7	64.8	75.7
Deferred tax assets	40.0	39.3	67.4	71.6	76.9
Total non-current assets	7,253.4	6,943.3	6,818.2	6,107.5	5,718.6
Current assets
Other financial assets	5.4	8.9	23.3	0.9	0.1
Inventories	604.4	521.9	500.8	410.0	364.1
Receivables	529.2	521.0	446.1	382.1	339.8
Marketable securities and deposits	584.8	229.9	164.6	141.1	81.8
Other current assets	269.8	241.8	192.0	203.5	193.1
Cash and cash equivalents	1,998.8	2,728.6	2,029.7	876.8	474.9
Assets held for sale	3.2	-	50.0	-	-
Total current assets	3,995.6	4,252.1	3,406.5	2,014.4	1,453.8
Total assets	11,249.0	11,195.4	10,224.7	8,121.9	7,172.4
Equity attributable to owners of parent	7,572.6	7,599.4	6,698.0	5,034.5	4,640.8
Non-controlling interest	485.6	436.2	345.8	88.9	79.6
Non-current liabilities
Deferred tax liabilities	182.2	161.6	180.6	133.0	138.3
Provisions	135.9	102.3	99.5	119.2	109.0
Debt and other financial liabilities	889.8	986.3	1,244.1	1,488.4	1,079.1
Total non-current liabilities	1,207.9	1,250.2	1,524.2	1,740.6	1,326.4
Current liabilities
Provisions	27.9	36.3	49.9	28.6	27.5
Accrued expenses	631.3	607.1	665.3	599.5	501.2
Income tax payable	61.5	57.1	45.3	27.2	35.8
Accounts payable	468.5	470.9	301.0	289.6	254.4
Debt and other financial liabilities	793.7	738.2	595.2	313.0	306.7
Total current liabilities	1,982.9	1,909.6	1,656.7	1,257.9	1,125.6
Total equity and liabilities	11,249.0	11,195.4	10,224.7	8,121.9	7,172.4
Equity per share (in euro)	94.61	96.80	87.82	68.00	64.86
Net asset value per share at market value of quoted companies (in euro)	151.45	162.46	172.80	103.71	102.38

* Figures used are based on the pro forma consolidated financial statements

Five-Year Summary Consolidated Statement of Income

In millions of euro	2017*	2016*	2015*	2014	2013
Revenues	5,609.5	5,497.5	5,174.7	4,546.5	4,249.7
Earnings from marketable securities and
deposits	79.5	18.5	6.8	2.8	15.5
Share of results of associates	184.3	73.7	293.6	316.6	308.8
Income from other financial assets	7.5	10.2	25.5	9.1	36.1
Income from real estate activities	1.2	2.1	2.3	10.9	12.2
Other income	4.1	561.7	34.8	-	-
Total Income	5,886.1	6,163.7	5,537.7	4,885.9	4,622.3
Raw materials, consumables used and
changes in inventories	1,924.9	1,864.9	1,702.6	1,426.4	1,346.8
Employee expenses	1,679.7	1,672.3	1,602.8	1,416.0	1,357.2
Depreciation and impairments property, plant and equipment and investment
properties	196.9	189.8	189.3	166.2	165.8
Amortization and impairments intangible
assets	156.4	70.0	79.5	75.2	109.7
Other operating expenses	1,275.0	1,251.1	1,131.9	1,103.1	1,056.4
Total expenses	5,232.9	5,048.1	4,706.1	4,186.9	4,035.9
Operating profit	653.2	1,115.6	831.6	699.0	586.4
Financial income and (expense)	(43.8)	(31.8)	3.5	(25.1)	(49.1)
Profit before income tax	609.4	1,083.8	835.1	673.9	537.3
Income tax expense	(136.9)	(123.2)	(120.5)	(97.8)	(50.1)
Profit before non-controlling interest	472.5	960.6	714.6	576.1	487.2
Non-controlling interest	(81.3)	(89.9)	(85.0)	(19.7)	(14.4)
Net profit	391.2	870.7	629.6	556.4	472.8
Earnings per Share (in euro)	4.93	10.98	8.13	7.40	6.49
Dividend per Share (in euro)	6.20**	7.10	6.50	5.05	4.10

* Figures used are based on the pro forma consolidated financial statements

** Proposed

Financial Statements HAL Holding N.V.

	2017	2016
Non-current assets
Financial assets	6,059.2	6,100.3
Current assets
Other current assets	2.4	1.2
Cash and deposits	1,540.8	1,526.2
Total assets	7,602.4	7,627.7
Equity	7,599.8	7,624.7

Current liabilities
Accrued expenses	2.6	3.0
Total equity and liabilities	7,602.4	7,627.7
Statement of Income HAL Holding N.V. (in millions of euro)
	2017	2016
Income from financial assets	391.6	890.7
General and administrative expenses	(9.9)	(10.8)
	381.7	879.9
Financial income/(expense)	8.8	(8.9)
Net income	390.5	871.0

Statement of Financial Position HAL Holding N.V. (in millions of euro)

Notes to the company financial statements HAL Holding N.V. (in millions of euro)

he company financial statements of HAL Holding N.V. have been prepared in accordance with book 2 of the Civil Code applicable for Curaçao. For details concerning the accounting principles in respect of the statement of financial position and statement of income, reference is made to the consolidated financial statements of HAL Trust (which are identical to the consolidated financial statements of HAL Holding N.V.) except for investments in subsidiaries which are carried at net asset values. T

Financial assets

Balance on January 1, 2017	6,100.3
Income	391.6
Increase/(decrease) in loans, net	(295.6)
Exchange differences, valuation differences and equity adjustments	(137.1)
Balance on December 31, 2017	6,059.2

Equity

The movement for 2017 of Shareholders' equity is included on pages 27 and 57.

On December 31, 2017 and 2016, 80,124,524 and 78,589,572 Shares respectively were outstanding, with a nominal value of € 0.02 each, and all were held by HAL Trust.

The Company may purchase HAL Trust Shares, when deemed appropriate, up to a maximum of 10% per year of the number of Shares outstanding at the beginning of the year. In 2017, a net balance of 4,134 Shares was sold for € 0.4 million.

A 2016 dividend of € 557.4 million (excluding dividend on treasury shares) or € 7.10 per Share was distributed on June 20, 2017 (2016: € 495.8 million or € 6.50 per Share), of which € 278.7 million in cash and € 278.7 million in stock. The conversion ratio of 1:51.2 resulted in 1,534,952 new Shares being issued.

The Company owned 84,234 HAL Trust Shares as of December 31, 2017. These shares are to hedge the obligation to allot – under certain conditions – 20,000 shares HAL Trust to a member of the Executive Board and may also be used in the context of a share participation plan for management (not being members of the Executive Board).

Supervisory Directors

The 2017 fixed remuneration for the Supervisory Directors of HAL Holding N.V. was € 0.4 million in total (2016: € 0.4 million).

Distribution of Profits

he profit to be decided upon by the General Meeting of Shareholders of HAL Holding N.V. for 2017 is as follows: T

In millions of euro	2017
Net income according to the Statutory Statement of Income	390.5
Available for distribution to Shareholders	390.5
Proposed distribution
In accordance with Article 31 (1), 0.03 euro for each of the 80,124,524 Shares	2.4
Available to the General Meeting of Shareholders in accordance with Article 31 (2)	388.1
From the available reserves	106.3
Available for distribution	496.8
After approval of the dividend proposal of € 6.20 per Share by the General Meeting of Shareholders of HAL Holding N.V., the dividend shall be distributed to HAL Trust for 80,124,524 Shares at € 6.20 per Share	496.8

The above references to Articles refer to the Articles of Association of the Company.

The dividend shall be payable in Shares in the share capital of the Company for an amount of € 3.10 per Share and € 3.10 per Share in cash. The conversion ratio for the dividend in Shares will be determined on June 12, 2018, after the close of trading on Euronext in Amsterdam.

Trust, which is quite common in Anglo-American law, is a property managed in accordance with a trust deed by a Trustee on behalf of the beneficial owners. A

The Trust has the following three components:

The Meeting of Shareholders of HAL Trust

xcept for the powers of the Trust Committee described below, control of the Trust rests with the Meeting of Trust Shareholders. The Meeting of Trust Shareholders approves the annual accounts and decides on the distribution of profits. E

Execution of the decisions of the Meeting of Trust Shareholders is the task of the Trustee. The Trustee therefore votes at the General Meeting of Shareholders of HAL Holding N.V. in accordance with the outcome of the vote taken at the Meeting of Shareholders of HAL Trust.

The Annual Meeting of Trust Shareholders takes place in Rotterdam. The members of the Board of Supervisory Directors and the Executive Board of HAL Holding N.V. shall be present at the meeting in order to explain policies pursued.

The Trustee

he function of Trustee is exercised by HAL Trustee Limited, Hamilton, Bermuda. The Board consist of Messrs. D.C. Meerburg, Chairman, C. MacIntyre, A.R. Anderson, M.P.M. de Raad and H. van Everdingen, members. T

The Trustee is the legal owner of the assets of the Trust, which consist of Shares in HAL Holding N.V., Curaçao.

The powers of the Trustee are limited to execution of the decisions of the Meeting of Trust Shareholders of HAL Trust and of the Trust Committee.

The Trustee votes at the General Meeting of Shareholders of HAL Holding N.V. in accordance with the instructions of the Meeting of Shareholders of HAL Trust.

The Trust Committee

he Trust Committee is HAL Trust Committee Limited, Hamilton, Bermuda. The Board of HAL Trust Committee Limited consists of Messrs. P.J. Kalff, Chairman, C. MacIntyre, A.R. Anderson, M. van der Vorm and A.A. van 't Hof, members. This Board is appointed by the Stichting HAL Trust Commissie, shareholder of HAL Trust Committee Limited. The Board of the Stichting is appointed by the shareholders of HAL Trust and consists of Messrs. P.J. Kalff, M. van der Vorm and A.A. van 't Hof. T

The Trust Committee is empowered to regroup the assets of the enterprise if, in special circumstances such as international political complications, it considers it necessary to do so in the interest of the shareholders and/or the enterprise. The objective of such regrouping is to replace HAL Holding N.V. with a company situated in another jurisdiction. To achieve this, HAL Holding N.V. may transfer its assets to that new company in exchange for a repurchase of shares. The Trust Committee also has the power to appoint another Trustee, if necessary. Finally, the Trust Committee has some duties of an administrative nature.

A Curaçao public company

AL Holding N.V. is a public company with its corporate seat in Curaçao. The Corporate Governance of HAL Holding N.V. is subject to the law of Curaçao as well as the articles of association and regulations adopted in accordance with such law. HAL Holding N.V. reports its financial position in accordance with International Financial Reporting Standards as adopted by the European Union. H

HAL Holding N.V. is a holding company and parent company of a number of subsidiaries.

Share capital

AL Holding N.V. has a share capital that is divided in shares with a nominal value of € 0.02 each. All shares have the same rights. Each share carries the right to exercise one vote in the General Meeting of Shareholders. All shares are in registered form. H

HAL Trust

ll shares in the capital of HAL Holding N.V. are held by HAL Trust on behalf of the Trust Shareholders. For each share in the capital of HAL Holding N.V. one Trust Share has been issued by HAL Trust. All Trust Shares have the same rights. Each Trust Share carries the right to exercise one vote in the meeting of Trust Shareholders. All distributions made by HAL Holding N.V. in respect of its shares are distributed by HAL Trust to the Trust Shareholders. A

HAL Trust is a trust under Bermuda law and is subject to a trust deed, the text whereof has most recently been changed on May 18, 2011. The function of Trustee is exercised by HAL Trustee Limited. In addition, the trust deed grants certain powers to HAL Trust Committee Limited. For further information on HAL Trustee Ltd. and HAL Trust Committee Limited, see page 158. The Trust Shares are listed and traded on Euronext in Amsterdam.

Meetings of Trust Shareholders

n accordance with the provisions of the trust deed each year a meeting of Trust Shareholders is held in Rotterdam prior to the General Meeting of Shareholders of HAL Holding N.V. I

The meeting of Trust Shareholders has, inter alia, the power to direct the Trustee as to the exercise by the Trustee of its voting rights in the General Meeting of Shareholders of HAL Holding N.V. This means that the Trust Shareholders have de facto control in the General Meeting of Shareholders of HAL Holding N.V.

Neither the articles of association of HAL Holding N.V. nor the trust deed contain any protective provisions which limit the control of the Trust Shareholders. All resolutions of the General Meeting of Shareholders of HAL Holding N.V. require a simple majority of the votes cast. The same holds for the decision-making process in the meeting of Trust Shareholders.

Rights of Trust Shareholders

ach Trust Shareholder has the right to attend the meetings of Trust Shareholders, either in person or by written proxy, to speak at such meetings and to exercise his voting rights. In addition, Trust Shareholders who together represent at least 10% of all outstanding Trust Shares are entitled to request the Trustee to convene a meeting of Trust Shareholders. E

Powers General Meeting of Shareholders

n accordance with the articles of association of HAL Holding N.V. the General Meeting of Shareholders of HAL Holding N.V. and therefore indirectly the meeting of Trust Shareholders, has the following powers: I

1. appointment and dismissal of the members of the Executive Board and the Supervisory Board;
1. approval of the financial statements;
1. granting discharge to the members of the Executive Board and the Supervisory Board;
1. amendment of the articles of association, provided such amendment is proposed by the Executive Board and has been approved by the Supervisory Board;
1. remuneration of supervisory directors;
1. appointment of the external auditor;
1. decisions about the distribution of profits following payment of the primary dividend on shares, as set out in the articles of association, and after the taking of certain reserves by the Executive Board subject to the approval of the Supervisory Board;
1. all other powers which the articles of association do not grant to another corporate body.

Executive Board

he Executive Board of HAL Holding N.V. is responsible for the management of the Company, which means, among other things, that it is responsible for achieving the company's objectives, strategy and policy. The Executive Board is accountable to the Supervisory Board and to the General Meeting of Shareholders. In discharging its role, the Executive Board is guided by the interests of the Company and its business, taking into consideration the relevant interests of all those involved in the Company. T

The Executive Board is responsible for complying with all relevant legislation and regulations, for managing the risks associated with the Company's activities and for the financing of the Company.

The number of members of the Executive Board is determined by the Supervisory Board. At present the Executive Board consists of three members. All members have been appointed by the General Meeting of Shareholders for an indefinite period of time. They can be dismissed by the General Meeting of Shareholders. In addition they can be suspended by the Supervisory Board.

With the approval of the Supervisory Board the Executive Board has adopted regulations which, inter alia, provide for additional rules in respect of the decision taking process within the Executive Board, the reporting to the Supervisory Board, the treatment of possible conflicts of interest and the fulfilment by members of the Executive Board of additional offices.

The Supervisory Board determines the remuneration of each member of the Executive Board. The remuneration consists of a fixed part and a variable part, the size whereof is determined by the Supervisory Board who also decides on additional benefits. The members of the Executive Board do not participate in any option scheme and do not receive any personal loans or guarantees from the Company.

Supervisory Board

he Supervisory Board is responsible for the supervision of the policies of the Executive Board and the general affairs of the Company and its business. It also assists the Executive Board by providing advice. In discharging its role the Supervisory Board is guided by the interests of the T

Company and its business and shall take into account the relevant interests of all those involved in the Company. The Supervisory Board is responsible for the quality of its own performance.

The Supervisory Board consists of at least five members. The Supervisory Board can determine that the Board consists of more members. At present the Board has five members which have been appointed by the General Meeting of Shareholders for an indefinite period of time. Each year at least one supervisory director resigns in accordance with a retirement schedule set by the Board. A supervisory director resigning in accordance with the retirement schedule is eligible for re-appointment.

The Supervisory Board has chosen a chairman and a vice chairman from among its members.

All tasks and duties of the Supervisory Board are exercised on a collegiate and full-board basis. The Supervisory Board has adopted regulations which, inter alia, provide for rules in respect of the providing of information by the Executive Board, the matters that in any case must be addressed each year, the manner of meeting and decision taking by the Board, the treatment of potential conflicts of interest, the individual investments by supervisory directors and the criteria which may possibly jeopardize the independent exercise of the position of supervisory director.

The Supervisory Board has prepared a profile for its composition. Each member is capable of assessing the broad outline of the overall policy. Together the supervisory directors have sufficient expertise to carry out the tasks of the Supervisory Board taken as a whole.

The General Meeting of Shareholders determines the remuneration of the members of the Supervisory Board.

Supply of information/logistics General Meeting of Shareholders

he Executive Board and the Supervisory Board provide the General Meeting of Shareholders, and the meeting of Trust Shareholders, with all relevant information that they require for the exercise of their powers, unless this would be contrary to an overriding interest of the Company. T

The Executive Board and the Supervisory Board will provide all shareholders and other parties in the financial markets who find themselves in an equal position with equal and simultaneous information about matters that may influence the price of the Trust Shares.

Any possible contacts between the Executive Board on the one hand and the press and financial analysts on the other will be carefully handled and structured, and the Company shall not engage in any acts that compromise the independence of analysts in relation to the Company and vice versa.

Financial reporting

he Executive Board is responsible for the quality and completeness of publicly disclosed financial reports. The Supervisory Board sees to it that the Executive Board fulfils this responsibility. T

The consolidated financial statements of HAL Holding N.V. are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. In addition HAL Holding N.V. publishes interim reports in accordance with the relevant provisions of the law and the listing requirements of Euronext in Amsterdam. All financial information is also published on the web site www.halholding.com. The financial statements are signed by the members of the Executive Board and the Supervisory Board. The Supervisory Board discusses the financial statements with the external auditor prior to signing of the statements by the supervisory directors.

Reference is made to the Report of the Supervisory Board (page 7) and the report of the Executive Board (page 9). These reports explain the implications and the measures that have been taken as a consequence of the application of IFRS 10 which requires the Company to consolidate the financial statements of Koninklijke Vopak N.V. ('Vopak') and Safilo Group S.p.A. ('Safilo'). As explained in these reports, the Company has entered into Memoranda of Understanding with Vopak and Safilo with respect to confidentiality, the process of exchanging information and attendance rights to the Audit Committee meetings of Vopak and the Control, Sustainability and Risk Committee meetings of Safilo of an independent financial expert appointed by the Company. This independent financial expert reports to the Company if there are any matters which should be brought to the attention of the Company prior to the signing of the financial statements.

The assessment that the Company's financial statements do not contain material errors attributable to the financial statements of Vopak and/or Safilo is based on the external audit of these companies and the involvement of the independent financial expert referred to above. The Executive Board and the Supervisory Board felt that it was necessary to take the measures outlined above, in order to provide additional comfort to the Executive Board when discharging itself of its responsibility for financial statements of the Company and to the Supervisory Board when discharging itself of its responsibilities to supervise the Executive Board and to review and sign the annual financial statements.

The General Meeting of Shareholders appoints the external auditor. Following receipt by the Board of Supervisory Directors of advice from the Executive Board, the Supervisory Board prepares a nomination for the appointment of the external auditor. HAL Holding N.V. has no internal audit function.

Material remuneration for instructions to the external auditor other than for auditing activities requires the approval of the Supervisory Board in respect of which the Board will consult with the Executive Board.

The external auditor is represented at the meetings of Trust Shareholders.

M. van der Vorm (59) is a Dutch citizen. Mr. van der Vorm was appointed member of the Supervisory Board of HAL Holding N.V. in 2014. In 2016 he was appointed Chairman. His current term is from 2014-2020. Mr. van der Vorm was Chairman of the Executive Board of HAL Holding N.V. from 1993-2014.

M.P.M. de Raad (73) is a Dutch citizen. In 2006 he was appointed member of the Supervisory Board of HAL Holding N.V. His current term is from 2013-2018. Mr. de Raad was Chief Executive Officer of SHV Makro N.V. and member of the Executive Board of SHV Holdings N.V., Metro AG (Germany) and Royal Ahold N.V. Mr. de Raad is currently member of the Supervisory Board of Metro AG (Germany). It will be proposed to re-elect Mr. de Raad.

L.J. Hijmans van den Bergh (54) is a Dutch citizen. In 2013 he was appointed member of the Supervisory Board of HAL Holding N.V. In 2016 he was appointed vice-Chairman. His current term is from 2014-2019. Mr. Hijmans van den Bergh is a partner of De Brauw Blackstone Westbroek N.V. which is one of the legal advisers of HAL Holding N.V. Mr. Hijmans van den Bergh is not involved in the provision of legal services by De Brauw Blackstone Westbroek N.V. to HAL Holding N.V. Prior to joining De Brauw Blackstone Westbroek N.V., Mr. Hijmans van den Bergh was a member of the Management Board of Royal Ahold N.V. He is the chairman of the Utrecht University Fund and a member of the Supervisory Councils of Air Traffic Control the Netherlands and the Netherlands Cancer Institute/Antoni van Leeuwenhoek Hospital.

G.J. Wijers (67) is a Dutch citizen. In 2014 he was appointed member of the Supervisory Board of HAL Holding N.V. His current term is from 2017-2022. He is a former Minister of Economic Affairs, former Senior Partner at the Boston Consulting Group and former CEO of Akzo Nobel N.V. He is Chairman of the Supervisory Board of Heineken N.V., Deputy Chairman of Royal Dutch Shell Plc. and member of the Supervisory Board of ING Groep N.V.

C.O. van der Vorm (47) is a Dutch citizen. In 2015 he was appointed member of the Supervisory Board of HAL Holding N.V. His current term is from 2015-2021. He is based in London and serves as a managing director of Southberg Holdings Ltd., which is active in agricultural operations in South America and Eastern Europe.

Notice to Trust Shareholders

e hereby invite you to attend the meeting of Trust Shareholders of HAL Trust, which will be held on Thursday, May 17, 2018, at 11:00 a.m. in the Rotterdamse Schouwburg, Schouwburgplein 25, Rotterdam. The agenda of the meeting is as follows: W

1. Opening
1. Instructions for the Trustee to vote at the General Meeting of Shareholders of HAL Holding N.V., to be held on Friday, May 25, 2018, with regard to the following items on the agenda:
(a) Report of the Executive Board of HAL Holding N.V.
(b) Report of the Supervisory Board of HAL Holding N.V.
(c) Approval of the financial statements of HAL Holding N.V.
(d) Dividend payment against the available reserves and profits of 2017 in the amount of € 6.20 per Share as published in the Annual Report 2017, of which € 3.10 per Share shall be payable in Shares in the share capital of HAL Holding N.V., and € 3.10 per Share in cash and, with the approval of the Supervisory Board, to direct and authorize the Executive Board to effectuate such share issue and cash payments and to approve the share issue. If applicable, cash payments will be made to the Trustee representing the value of fractions of HAL Trust Shares (if any) to which the respective HAL Trust Shareholders will be entitled based on the Conversion ratio
(e) Election Supervisory Director. It is proposed to re-elect Mr. M.P.M. de Raad
(f) Discharge of the members of the Executive Board in respect of their duties of management during the financial year 2017
(g) Discharge of the members of the Supervisory Board in respect of their duties of supervision during the financial year 2017
1. Approval of the financial statements of HAL Trust
1. (i) Proposal to distribute a dividend against the profits of 2017 of € 6.20 per Share of which € 3.10 per Share shall be payable in HAL Trust Shares, and € 3.10 per Share in cash subject to
(ii) below:
(ii) to direct the Trustee:
(a) to issue by way of stock dividend distribution to each HAL Trust Shareholder such number of HAL Trust Shares as shall be based on the Conversion ratio, the number of HAL Trust Shares held by such HAL Trust Shareholder and the dividend per Share of € 3.10 payable in Shares; and
(b) to convey to HAL Holding N.V., prior to June 19, 2018, for what amount cash payments are to be made to the Trustee representing the value of fractions of HAL Trust Shares (if any) to which the respective HAL Trust Shareholders will be entitled on the basis of the Conversion ratio.
1. Report of the Trust Committee
1. Other business
1. Closing

Shareholders who wish to attend the meeting must notify this not later than May 10, 2018, through their bank or intermediary, to ABN AMRO Bank N.V.; at the office of Conyers, Dill & Pearman, Clarendon House, 2 Church Street, Hamilton, Bermuda; or at the office of HAL Holding N.V., 5 Avenue des Citronniers, MC 98000 Monaco, and must receive a written confirmation of their entitlement to HAL Trust Shares, which confirmation will at the same time serve as a permit providing admission to the meeting. Attention is drawn to the fact that Shareholders who will not be able to attend the meeting but wish to be represented at the meeting must provide a written proxy. For the sake of good order it is pointed out that proxy holders will only be admitted to the meeting against surrender of the confirmation of entitlement referred to above together with a duly signed proxy statement.

This notice is enclosed with the 2017 Annual Report which is presented to you in accordance with Section 14.4 of the trust deed of HAL Trust.

HAL Trustee Ltd. Hamilton, Bermuda, April 4, 2018

Explanatory notes to agenda item 2.d and 4

It is proposed to distribute a dividend of € 6.20 per HAL Trust Share against the profits of 2017 and that this dividend will be paid in HAL Trust Shares for € 3.10 per HAL Trust Share and in cash for € 3.10 per HAL Trust Share. The Conversion ratio for the dividend in HAL Trust Shares will be determined on the basis of the volume weighted average share price during the period May 23, 2018, through June 12, 2018, (the 'Conversion ratio'), and will be announced on June 12, 2018, after the close of business of Euronext in Amsterdam. The value of the stock dividend, at the above volume weighted average share price, will be virtually the same as the value of the cash dividend. The number of shares acquired after conversion will be rounded down whereby any fraction of a Share will be settled in cash. The newly issued Shares will carry dividend rights for 2018 and subsequent years.

Dividend rights will not be traded on Euronext in Amsterdam.

The time-table is as follows:

2018 May 21 May 22 June 12 (after close of trading) June 19

Ex-dividend date Dividend record date Determination and publication Conversion ratio Delivery of Shares and payment of cash dividend

The distribution of dividend in Shares is free of charge for Shareholders.

AI assistant

HAL Trust — Annual Report 2017

9905_10-k_2018-04-04_6700f576-fdec-452a-91b2-363348872596.pdf

HAL Trust

Contents

HAL Holding N.V. Supervisory Board:

Executive Board:

Highlights and Financial Calendar

HAL Trust

Report of the Supervisory Board of HAL Holding N.V.

Introduction

Dividend

Prospects

Strategy

Risks

Concentration risk

Optical retail activities

Quoted minority interests

Market value risk

Interest rate risk

Currency risk

Credit risk

Liquidity risk

Acquisition risk

Financial reporting risk

Other

Acquisitions unquoted companies

Subsidiaries

Optical retail

Unquoted companies

Quoted minority interests

Real estate

Liquid portfolio

Results

Optical retail

Unquoted companies

Quoted minority interests

Liquid portfolio

Net financial expense

Non-recurring items

Administrative organization, risk management systems and financial reporting

Contents

34 Notes to the Consolidated Financial Statements

Consolidated Statement of Financial Position

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows For the year ended December 31

Basis of preparation

Use of estimates and judgements

Recent accounting developments

Adopted by the Company

Not yet adopted by the Company

Supplemental information

Consolidation

Critical accounting estimates and judgements

Foreign currencies

unctional and presentation currency F

Transactions and balances

Company's subsidiaries

Cash flow statement

1. Segmentation

2. Exceptional items

3. Property, plant and equipment

Critical accounting estimates and judgements

4. Intangible assets

Goodwill

Trademarks

Rights of use and key money

Software

Customer relationships

5. Acquisitions & divestments of subsidiaries

Critical accounting estimates and judgements

Acquisitions

Tesco

Visilab

SC Industries, LLC

Orthopedie Investments Europe B.V.

Divestments

6. Investments in associates and joint arrangements

HAL Trust Annual Report 2017