Annual Report 2008 Sustainable design & engineering - Grontmij

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Annual Report 2008 Sustainable design & engineering - Grontmij

Annual Report 2008

Sustainable design & engineering


Profile

When Grontmij N.V. was founded in 1915, its vision was

sustainable land consolidation and reclamation for the

agricultural sector and the development of the rural areas.

Almost a century later, the company has developed and

grown, but it is essentially the same: Grontmij creates

value for its customers and shareholders by designing and

realising sustainable living and working environments.

Grontmij’s mission is to be the best local service provider

for design, consultancy, management, engineering and

contracting in the environmental, water, energy, building,

industry and transportation sectors.

We aim to achieve this through the design and realisation

of plans for the future together with the people and

parties in our regions. Our highly skilled and expert staff

have a deep knowledge of the chosen markets and

sectors and provide a full range of services throughout

the project chain.


Annual report 2008

Sustainable design & engineering


Contents

Key figures 3

Overview 2008 4

Foreword 8

Information for shareholders 10

Supervisory Board 13

Report of the Supervisory Board 14

Meetings 14

Committees 15

Remuneration report 15

Composition 18

Financial statements and dividend 19

Executive Board 22

Report of the Executive Board 24

Mission, objectives and strategy 24

Market 29

Risk management 37

Financial performance 43

Organisation and personnel 50

Corporate Governance 52

Declarations 55

Corporate Social Responsibility Report 58

Financial statements 71

Report of Stichting Preferente Aandelen Grontmij 127

Report of Stichting Administratiekantoor van Aandelen Grontmij N.V. 128

Country management 130


Key figures

2008 2007 2006 2005 2004

Revenue EUR 1,000

Total revenue 846,223 772,846 543,122 441,481 472,884

Third-party projects expenses 182,254 174,701 158,612 147,977 184,343

Net revenue 663,969 598,145 384,510 293,504 288,541

Workforce (average)

fte

Own staff 6,816 6,256 4,140 3,391 3,381

Agency staff 511 400 334 279 230

Total 7,327 6,656 4,474 3,670 3,611

Workforce (at year-end) fte 7,478 6,780 6,337 3,514 3,502

Profitability

Earnings before interest and income tax (EBIT) EUR 1,000 58,186 47,992 30,362 20,036 18,415

Amortisation of intangible assets EUR 1,000 6,948 6,087 2,633 - -

Earnings before interest, income tax and amortisation (EBITA) EUR 1,000 65,134 54,079 32,995 20,036 18,415

EBIT as percentage of total revenue % 6.9 6.2 5.6 4.5 3.9

EBIT as percentage of net revenue % 8.8 8.0 7.9 6.8 6.4

EBITA as percentage of total revenue % 7.7 7.0 6.1 4.5 3.9

EBITA as percentage of net revenue % 9.8 9.0 8.6 6.8 6.4

Profit after income tax EUR 1,000 38,770 32,720 22,053 13,229 11,388

Profit after income tax as a

percentage of total revenue % 4.6 4.2 4.1 3.0 2.4

Profit after income tax as a

percentage of net revenue % 5.8 5.5 5.7 4.5 3.9

Profit per employee € 5,291 4,916 4,929 3,605 3,154

Return on Equity % 23.3 22.1 18.7 14.1 11.2

Shares*

Shares in issue at year-end 17,764,920 17,794,920 17,794,920 16,164,920 16,164,920

Shares in issue, average 17,764,920 17,794,920 16,698,252 16,164,920 16,164,920

Earnings per share € 2.16 1.84 1.31 0.81 0.69

Dividend per share (2008: proposal) € 1.15 1.10 0.75 0.53 0.44

Dividend/earnings per share % 53 60 57 65 64

Highest price € 30 41 23 15 10

Lowest price € 14 22 15 10 6

Closing price € 18 24 22 15 10

Year-end balance sheet

Total equity EUR 1,000 174,943 157,203 138,708 97,042 91,247

Total assets EUR 1,000 627,344 596,619 533,810 351,399 327,672

Intangible assets and goodwill EUR 1,000 202,071 168,776 170,723 8,834 8,361

Loans and other interest bearing liabilities EUR 1,000 116,330 102,211 117,707 32,674 18,544

Solvency ratio % 27.9 26.4 26.0 27.6 27.8

* Adjusted in accordance with share split 1:4 as per June 1, 2007

GRONTMIJ | ANNUAL REPORT 2008

3


Overview 2008

900

800

700

600

500

400

300

200

Revenue

In millions of euros

472.9

441.5

735.1*

543.1 772.8 846.2

2004 2005 2006 2007 2008

*2006 pro forma (including 12 months Carl Bro)

45

40

35

30

25

20

15

10

5

0

Result after tax

In millions of euros

28.3*

11.4 13.2

22.1

32.7 38.8

2004 2005 2006 2007 2008

*2006 pro forma (including 12 months Carl Bro)

2.20

Earnings per share

In euros

1.70

1.20

0.70

0.69 0.81

1.31 1.84

2.16

0.20

2004 2005 2006 2007 2008

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Number of staff at end of year (in FTEs)

In miljoen euro

3,502 3,514

6,337 6,780 7,354

2004 2005 2006 2007 2008

4

GRONTMIJ | ANNUAL REPORT 2008


Overview 2008

Net margin (%)

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

4.1%

2.4% 3.0%

3.9%* 4.2% 4.6%

2004 2005 2006 2007 2008

*2006 pro forma (including 12 months Carl Bro)

11

10

9

8

7

6

5

4

3

2

1

EBITA (% based on net revenue)

In EBITA miljoen (% euro based on revenue)

8.6%

6.1%

6.4% 3.9% 6.8% 4.5%

8.0%* 5.8%*

9.0% 7.0% 9.8% 7.7%

2004 2005 2006 2007 2008

*2006 pro forma (including 12 months Carl Bro)

13

12

11

10

9

8

7

6

5

4

EBIT by country (%) (amortisation allocated in Holdings & Eliminations)

10.3% 9.2%

6.1% 6.1% 6.3% 12.6% 7.8% 8.2% 7.5% 8.0% 8.4% 8.1%

Belgium Denmark Germany/Poland The Netherlands Sweden United Kingdom/

Ireland

2008

2007

Revenue by country (%)

1.6%

10.5% 6.9%

12.4%

2.7%

6.9%

13.7%

2008

20.2%

7.9%

11.1%

1%

40.8%

2007

19.5%

6.6%

Belgium

Denmark

Germany/Poland

The Netherlands

United Kingdom/Ireland

Sweden

Holdings & Eliminations

39.2%

GRONTMIJ | ANNUAL REPORT 2008

5


Text Environment 1... | ongoing challenges

GRONTMIJ | ANNUAL REPORT 2008


Text 1...

Regional & rural development Environmental management Soil

Waste Nature & ecology Outdoor sports & leisure

GRONTMIJ | ANNUAL REPORT 2008


Foreword

At the end of 2008 and with many markets in turmoil, Grontmij can look back on a period in which a lot has been achieved.

Over the last five years, the strategy and services portfolio have been adjusted, our debts have been reduced significantly,

profitability has increased and, due to the acquisition and subsequent integration of Carl Bro, the Group has become a major

European player. In 2008, we further strengthened our international portfolio through strategic acquisitions, including Whitelaw

Turkington, Trett Consultants, Roger Preston & Partners in the United Kingdom; Teldako in Sweden and KPI Systems in Poland. In

Belgium we acquired a participation in Libost, and in the Netherlands we strengthened our portfolio with the acquisition of

Stoel & Partners. We reduced our project development and waste processing operations and earned prestigious awards.

We also made ourselves heard in international debates on sustainability. At the end of 2008 we have a full order book for over

a year going forward.

Our most important targets achieved in 2008:

o an operating margin on revenue (EBITA on Total Revenue) of 7.7%;

o an increase in earnings per share of more than 17% compared with 2007;

o an interest cover ratio in excess of 9.3;

o repayment of € 20 million on the loans for the Carl Bro and United Kingdom acquisitions.

Our strength lies in a combination of deep knowledge of technical solutions and the environment, organisational skills and

project management capabilities throughout the lifecycle of the built and natural environments. Our extensive network of

offices in Europe ensures that we are capable of making a substantial contribution to the achievement of a sustainable working

and living environment, not only through large-scale projects but also and primarily through numerous smaller, regional

projects. From 2009, we have adopted the Global Reporting Initiative throughout the Group. Conducting business in a

sustainable, socially involved manner is encapsulated in the day-to-day work of our planners, designers and engineers.

The international economic crisis may lead to new opportunities for the creation of a fundamentally new vision on a sustainable

society and economy. Climate change and the need for greater sustainability in the global economy compel us to search out

and achieve new concepts and solutions through multidisciplinary processes.

We intend to be one of the leading companies in the field of sustainable design, consultancy and management. Thanks to hard

work and good collaborations of our people, we have already taken huge steps in the right direction. The Executive Board would

like to express its appreciation to the Group’s clients and staff.

Douwe van der Werf, CFO of Grontmij N.V., has decided to leave the company. For more than five years he has successfully

contributed to the development of Grontmij. I would like to thank Douwe for his hard work, loyalty and support in helping

to restructure and grow the company.

The outlook for 2009

In the autumn of 2008, what had started with the US sub-prime mortgage crisis, rapidly turned into a full-blown, global financial

crisis – almost overnight. The shock was tremendous and its tremors are being felt in the real economies of both our home

markets and the rest of the world.

Since the fourth quarter of last year, market conditions have continued to deteriorate, mainly affecting the building and

industrial related services. Our focus on sustainable design and management services, however, delivers strong inflow in our

order book in the energy, water and environment sectors not least through our innovative solutions, such as SHARON and

Pharmafilter, and other technologies. Our knowledge and the increasing needs of our clients in the transportation sector also

secure a steady stream of orders that we expect to be of a structural nature.

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GRONTMIJ | ANNUAL REPORT 2008


With about 70% of our assignments coming from governments, semi-governmental and utility companies and with a diversified

order book for well over one year in Europe, we are well positioned.

The economic crisis is causing some governments to stimulate their economies by investing substantially in major infrastructural

and energy-saving projects. We expect this will positively affect the greater part of our activities. On the other hand, the

deteriorating market circumstances will lead to greater uncertainty and unpredictability of market growth and price setting.

Our strategy is clear, our portfolio has a sound spread and we have a committed and experienced workforce. Although we are

confident about the future, given the increased uncertainty and dynamics of the current economic environment, we will further

refine our outlook when we announce interim 2009-performance.

De Bilt, 11 March 2009

Sylvo Thijsen

Chief Executive Officer

GRONTMIJ | ANNUAL REPORT 2008

9


Information for shareholders

CAPITAL STRUCTURE, DEPOSITARY RECEIPTS AND LISTING

Grontmij´s authorised capital consists of 30 million ordinary shares with a nominal value of € 0.25 each and 30 million preference

shares with a nominal value of € 0.25 each. As at 31 December 2008, 17,764,920 ordinary shares were issued. No preference

shares were issued as per that date. Stichting Administratiekantoor van Aandelen Grontmij N.V. (the Foundation) administrates

approximately 98% of Grontmij´s ordinary shares, against which depositary receipts have been issued. The depositary receipts

for ordinary shares in Grontmij are listed on Euronext Amsterdam and are included in the Amsterdam Small Cap Index (AScX).

As per the end of 2008 the market capitalisation of Grontmij amounted to € 311 million (€ 17.51 as per year-end 2008).

Aside from legal limitations, there are no restrictions on the transfer of shares or depositary receipts for shares. No special

controlling rights are attached to ordinary or preference shares. Holders of depositary receipts for ordinary shares may exchange

these receipts for ordinary shares without any restrictions. The 2008 report of the Foundation can be found on page 128.

EARNINGS AND DIVIDEND PER SHARE

Grontmij seeks to achieve an annual increase in earnings per share and wants its shareholders to benefit from this. Earnings per

share increased by 17.4% to € 2.16 (2007: € 1.84). In determining the proposed dividend for 2008, the company’s solvency, cash

position and anticipated cash flow have been considered. Based on these considerations, the dividend for the year, as proposed

to the Annual General Meeting of Shareholders, will be € 1.15 (2007: € 1.10) per share. This means approximately 53% of the

company’s profit will be distributed through dividends. Payment of the dividend will be in cash.

INVESTOR RELATIONS

Grontmij strives to ensure equal access to all relevant financial and non-financial information. We provide information on

financial results, strategy and developments within the Group through our annual report and regular press releases. In addition,

Grontmij actively maintains contacts with the financial community through road shows (one-on-one meetings with investors),

investor conferences and analysts’ meetings. During 2008, road shows were organised in Grontmij´s six home markets (Belgium,

Denmark, Germany, the Netherlands, Sweden and the United Kingdom) and France. Our CEO and CFO are closely involved in all

investor relations activities. Moreover, the Annual General Meeting of Shareholders and the analysts’/press meetings can be

followed by audio webcast.

In 2008, we provided more qualitative and quantitative information on the first and third-quarter results. Compared to previous

years, our reporting on the first-half and year-end results included more information on geographical segmentation, market

developments and organic growth.

EMPLOYEE SHARE-OWNERSHIP SCHEME

Grontmij introduced an employee share-ownership scheme in 1999. This scheme offers our Dutch employees the opportunity

to invest in the company through Stichting Medewerkersparticipatie Grontmij without incurring transaction or custody fees.

These participations are represented by depositary receipts, purchased on Euronext Amsterdam by the Stichting.

At the end of 2008, 2,725 members of staff (2007: 2,968) were registered for 94,050 participations (2007: 99,248).

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GRONTMIJ | ANNUAL REPORT 2008


Information for shareholders

During 2008, a new employee share-ownership scheme was introduced. The new scheme is designed for all Grontmij employees

with the exception of the members of the Executive Board. So far, the scheme has been rolled out in the Netherlands, the United

Kingdom, Ireland and Poland. Under the new scheme and based on a resolution of the Executive Board, employees may, up to a

certain percentage of their fixed income, invest in the company through Stichting Employee Share Purchase Plan. The employee

acquires participations in Stichting Employee Share Purchase Plan, which in turn buys a corresponding number of depositary

receipts in Grontmij N.V. on Euronext Amsterdam. The participations are issued at a discount of 15% of the underlying market

value of the depositary receipts. Participations must be retained for a period of three years. After this period, each employee

receives one additional participation for every four participations he or she holds. Matching participations and their corresponding

initial participations must be held for a further two years before they can be sold. As in the other plan, the employee incurs no

transaction or custody fees. At the end of 2008, 32 members of staff were registered for 1,973 participations.

The maximum amount that may be invested through these schemes is set at 5% of the issued share capital of Grontmij N.V.

There are no options schemes available at Grontmij.

EQUITY INTERESTS

Based on information publicly available as of 31 December 2008 and/or information provided by major shareholders,

the following shareholders have an interest of more than 5% in the share capital of Grontmij:

Delta Deelnemingen Fonds 10.6%

Parcom Quoted Equity Management BV 6.3%

Capital Research and Management Company 5.2%*

Aviva plc 5.1%

Optiverder B.V. 5.1%

* Voting rights on these shares are held by Smallcap World Fund Inc.

KEY FIGURES PER SHARE

Amounts in euros per share*

2008 2007 2006 2005 2004

Result after tax 2.16 1.84 1.31 0.81 0.69

Result after tax + depreciation and amortisation 3.19 2.27 1.91 1.43 1.42

Dividend 1.15 1.10 0.75 0.53 0.44

Payout ratio 53% 60% 61% 65% 64%

Highest price 30 41 23 16 10

Lowest price 14 22 15 10 6

Closing price 18 24 22 15 10

Number of ordinary shares (at year-end) 17,764,920 17,764,920 17,764,920 16,164,920 16,164,920

Increase of earnings per share 17% 40% 62% 17% 123%

* Adjusted to accommodate the share split of 1 June 2007.

GRONTMIJ | ANNUAL REPORT 2008

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Information for shareholders

SHARE PRICE MOVEMENTS

The price of Grontmij shares has varied as follows compared to the AEX and AScX (indexed on the basis of 100 as at 3 March 2005)

since 2004 (Source: Euronext).

Indexed share price movement (100 on 3 March 2005)

400

350

300

250

Grontmij

AEX

AScX

200

150

100

50

0

2004 2005 2006 2007 2008

Source: Euronext

FINANCIAL CALENDER 2009

14 May Publication of first quarter figures for 2009

14 May Annual General Meeting of Shareholders

20 August Publication of half year figures for 2009

12 November Publication of third quarter figures for 2009

Dates for 2010 will be published on our website:

www.grontmij.com/investorrelations/financialcalendar

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GRONTMIJ | ANNUAL REPORT 2008


Supervisory Board

F.L.V. Meysman (chairman)

Year born 1952 Nationality Belgian Appointed 2001 Reappointed 2005 Current term

expires and eligible for reappointment 2009 Most important previous positions

chairman of the Executive Board of Sara Lee/DE NV, Executive Vice-president and Director of

Sara Lee Corporation and chairman of the Supervisory Board of Corporate Express Current

positions Member of the Supervisory Board of GIMV (Gewestelijke Investerings Maatschappij

voor Vlaanderen), Spadel SA and Picanol NV.

S.E. Eisma (vice-chairman)

Year born 1949 Nationality Dutch Appointed 2005 Current term expires and eligible

for reappointment 2009 Current positions lawyer and partner with De Brauw Blackstone

Westbroek NV, chairman of the Supervisory Board of HAL Holding NV and member of

the Supervisory Board of Rabobank Nederland, professor at the University of Amsterdam,

member of the capital market committee of the Authority Financial Markets and chairman of

the Supervisory council of Hogeschool van Beeldende Kunsten, Muziek en Dans in The Hague.

P.E. Lindquist

Year born 1960 Nationality Swedish Appointed 2007 Current term expires and eligible

for reappointment 2011 Most important previous positions Group Vice-president,

Head of Franchise and Factory Sales at Scania, Executive Vice-president at Europe Alfa Laval.

Current position CEO of PIAB AB.

J.H.J. Zegering Hadders

Year born 1946 Nationality Dutch Appointed 2005 Current term expires and eligible

for reappointment 2009 Most important previous positions CEO of ING Nederland,

Director of Exploitatiemaatschappij Tunnel onder de Noord, Director of Exploitatiemaatschappij

Wijkertunnel Current positions Member of the Supervisory Board of Fortis NV,

Econcern NV and GET Holding NV, Member of the Bussum Municipal Council, Member of the

Supervisory Council of ICT Regie, chairman of Stichting Nieuw Holland and Member of the

Executive Committee of the BKVB (Beeldende Kunsten, Vormgeving en Bouwkunst) fund.

On 31 December 2008, none of the members of the Supervisory Board held any shares or depositary receipts in Grontmij N.V.

The remuneration of the members of the Supervisory Board is described on page 116.

GRONTMIJ | ANNUAL REPORT 2008

13


Report of the Supervisory Board

It has been a turbulent year in many of the markets where Grontmij operates. However, the Supervisory Board is gratified

to report that Grontmij has managed to remain on track, pursuing its strategy vigorously throughout the reporting year.

Performance is commendable, especially at a time when many sectors are under pressure.

MEETINGS

During 2008, the full Supervisory Board met with the Executive Board on six occasions. During those meetings all members were

present. In view of the current economic downturn, considerable time was spent on the possible effects for Grontmij, its

strategy, results, outlook, financing arrangements and employee base. In addition to these extensive discussions, strategic

targets were monitored to 2010, especially given Grontmij’s growth ambitions. Potential acquisitions and divestments were

evaluated against projected growth scenarios. In 2008, acquisitions were made in the United Kingdom (three companies),

Sweden, Poland and the Netherlands (two companies). Developments in all home markets and focus countries were regular

agenda points, as were specific market sectors and expansion of fields of expertise. The Supervisory Board also discussed

corporate governance developments especially in view of the report of the Monitoring Committee Corporate Governance of

December 2008 and recommendations of representatives of stakeholder groups. Most of the recommendations were applied.

In 2008, no changes were made to Grontmij’s governance structure.

Supervisory Board meetings are pre-scheduled, also to ensure proper supervision of the Group’s reporting commitments.

Quarterly, interim and full-year results were reviewed in depth. Representatives of KPMG, Grontmij’s auditor, attended the

meeting where the full-year results were discussed. Key topics throughout the year are close monitoring of finance and treasury

activities, budgets and forecasts, the Group’s cash-flow situation, share-price developments and share-price performance in

comparison with Grontmij’s peers, not least in light of the current volatility on financial markets. Similarly, risk management and

control systems, potential risks and claims, the operation of systems (IT and others), business procedures and contingencyscenario

planning were recurring topics. Human Resources are always on the agenda. Priority topics are developments affecting

staff, turnover of employees, recruitment of professionals and management development. In 2008 the Supervisory Board also

discussed Grontmij’s commitment to corporate social responsibility and the way it would report on this topic.

Two of the Supervisory Board meetings were held on location: one in our office in Leeds in the United Kingdom, and the other in

our office in Waddinxveen, the Netherlands. During the meeting in Leeds, the Supervisory Board met with local management

who presented an overview of activities per sector, economic developments and outlook for the United Kingdom market. The

meeting in Waddinxveen offered the opportunity to meet with local staff and was combined with a site visit. As part of the

introduction and training programme, some of the non-Dutch members of the Executive and Supervisory Boards attended a

session with an external lawyer where they were introduced to Dutch corporate governance principles and best practices.

During 2008, the Supervisory Board had one closed meeting (without the presence of the members of the Executive Board).

During this meeting, the Supervisory Board discussed its own performance and performance of each committee based on

a questionnaire completed by all members of the Supervisory Board and Executive Board. It also discussed its composition in

view of the specific competences of each member, the rotation schedule and the profile of a potential future Supervisory Board

member. Finally, the Supervisory Board reviewed the functioning of the Executive Board as a whole, and its individual members,

the result of which was satisfactory.

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GRONTMIJ | ANNUAL REPORT 2008


Report of the Supervisory Board

COMMITTEES

The Supervisory Board has two committees. Each committee reports to the Supervisory Board and informs same of the content

of their meetings at the next Supervisory Board meeting.

Audit committee

The Supervisory Board as a whole serves as the audit committee. Mr Zegering Hadders chairs the audit committee. In 2008,

the audit committee met four times. The external auditor attended the meetings where the interim and full-year results were

discussed.

The following matters, among others, were discussed in the audit committee meetings:

o the annual figures for 2007 and the quarterly and half-yearly figures for 2008;

o budget 2009 and quarterly comparison of actual figures against budgets;

o the auditor’s management letter and Board report;

o treasury and working-capital management;

o financing position, including repayment schedules and loan covenants;

o the structure and performance of the Group’s internal risk-management and control systems;

o the role and performance of the external auditor;

o the role and appointment of our new internal auditor.

Minutes have been taken of all of the meetings.

Appointment and remuneration committee

The appointment and remuneration committee, consisting of Mr Meysman and Mr Eisma, met twice during 2008.

Main points at these meetings were the individual performance of Executive Board members and their remuneration in 2008.

The achievement of targets in 2007 and related short-term bonus for Executive Board members payable in 2008 was reviewed.

The committee approved the profile and appointment of a new company secretary and reviewed the Group’s corporate

head-office organisation. The committee also discussed the design and implementation of a new Employee Share Purchase plan.

The appointment and remuneration committee reported on the above matters to the Supervisory Board through the minutes

of its meetings. In addition, the committee prepared the remuneration report for 2008 for approval by the Supervisory Board.

REMUNERATION REPORT

This report was prepared by the appointment and remuneration committee and approved by the Supervisory Board on

11 March 2009. The report describes current policy, as adopted by the Extraordinary General Meetings of Shareholders in

May 2005, August 2006 and May 2007. The actual remuneration in 2008 is included in the annual accounts, page 116.

Since May 2007, the remuneration policy has remained unchanged. During 2008 the policy was reviewed leading to only

one addition, that is described below.

Remuneration policy

General

The aim of our remuneration policy is to attract, motivate and retain qualified board members who will contribute to

the long-term success of Grontmij as a leading international consulting and engineering firm active primarily in North-West

Europe. The policy is designed to reward members of the Executive Board for their contribution to the Group’s performance

and shareholder value.

GRONTMIJ | ANNUAL REPORT 2008

15


Report of the Supervisory Board

Supervisory Board remuneration

The appointment and remuneration committee periodically assesses the remuneration for the members of the Supervisory

Board. The Annual General Meeting of Shareholders (AGM) decides on the actual remuneration.

The members of the Supervisory Board receive a fixed compensation not related to the results of the Group.

In 2007, the AGM approved a proposal to fix the remuneration of the members of the Supervisory Board at € 28,000 per annum

and at € 40,000 per annum for its chairman. In addition, a proposal was approved to pay an amount of € 1,000 per meeting to

those members of the Supervisory Board who are required to attend such meetings outside the country in which they are

domiciled. The approved remuneration of the members of the Supervisory Board constitutes a realistic payment for the duties

performed and responsibilities held by the members of a Supervisory Board of an international, listed company. Details of the

remuneration of the members of the Supervisory Board in 2008 are provided on page 116.

Executive Board remuneration

o Contract terms: Mrs Nørgaard was appointed for a period of four years in August 2006. The other members of the Executive

Board were appointed for an indefinite term. If members of the Executive Board are asked to leave the company, they will

receive an amount equal to one year’s salary. No specific agreement has been entered into between any member of the

Executive Board and Grontmij N.V. providing for compensation in the event of termination of employment or dismissal as

member of the Executive Board following a public bid for the company.

o Benchmarking and peer group: The remuneration of the members of the Executive Board is based on a comparison with

the remuneration of members of Executive Boards of other listed and non-listed European companies active in the same sector,

taking into account the relevant complexity, scope and risk profile. In addition, the remuneration for each member is

determined by taking into account the specific responsibilities of the members of the Executive Board. The companies in

the peer group are: ARCADIS, Fugro, DHV, Ballast Nedam, WS Atkins plc, WSP, Sweco and the Pöyry Group. The following

elements of the total remuneration were included in the comparison: total cash per year (fixed and variable salary) plus

long-term incentives such as share and/or option schemes. The benchmarking exercise is performed by the appointment

and remuneration committee with the advice of an external compensation and benefits consultant, and was carried out most

recently in 2006.

o Fixed remuneration: The fixed annual salary bandwidths were set in 2006. The Supervisory Board sets the fixed annual

salaries for the members of the Executive Board within these bandwidths. In principle, these bandwidths are indexed annually.

In 2007, neither the bandwidth nor the fixed salaries were adjusted. In 2008, indexation (4%) led to the following new

bandwidths:

Chairman of the Executive Board: € 364,000 – € 437,000

Other members of the Executive Board: € 260,000 – € 333,000

Mrs B.W. Nørgaard: € 364,000 – € 437,000

Within these bandwidths, the fixed remuneration of the members of the Executive Board was increased in 2008 according to

their performance. Further details are provided on page 116. In view of current economic market conditions, the Executive

Board proposed to the Supervisory Board not to make a proposal to the Shareholders meeting to amend the bandwidth of the

individual salaries for the year 2009 nor to increase the salaries in 2009 which proposal was adopted by the Supervisory Board.

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GRONTMIJ | ANNUAL REPORT 2008


Report of the Supervisory Board

o Variable remuneration: In designing this remuneration policy, the Supervisory Board analysed the possible outcome of

the variable remuneration components and the effect thereof on remuneration. The variable remuneration consists of two

elements: a result-dependent bonus and a value-dependent bonus. The variable remuneration is linked to predetermined,

assessable and influenceable targets as described below.

These targets underpin the strategy of the company as they relate to the strategic and financial targets set for the years

2007-2010. The maximum variable remuneration for the chairman of the Executive Board amounts to 90% of the fixed annual

salary. The maximum variable remuneration for the other members of the Executive Board amounts to 65% of the fixed annual

salary.

o Performance-dependent bonus

For the chairman of the Executive Board, the performance dependent bonus represents a maximum of 60% of the fixed annual

salary, two-thirds of which (40%) is based on operational objectives and one-third (20%) on individual objectives.

For all other members of the Executive Board, this part represents a maximum of 45% of the fixed annual salary, two-thirds of

which (30%) is based on operational objectives and one-third (15%) on individual objectives. For commercial and strategic

reasons, the operational targets are only disclosed ex post whilst individual targets are not disclosed ex post or ex ante.

In 2008, the criteria for operational targets were as follow:

a Net earnings per share after tax (weighting: 30% in the case of the chairman and 20% for the other members). The target was to

achieve net earnings per share after tax of 13.5-15% above 2007 level (100% pay out when 15% or more is realised). In 2008,

the net earnings per share after tax amounted to € 2.16, thus fully achieving the set target.

b Return on Equity (RoE): return on average equity (weighting: 10% for all members). The target is an RoE of 15-20% (100% pay

out when 20% is realised). RoE amounted to 23.3% in 2008, thereby fully achieving the set target.

Individual performance criteria are based on the individual responsibilities of the members of the Executive Board. There are

four to six targets, some quantitative and others qualitative. Two targets are of a financial nature (solvency ratio and interest

coverage ratio) while at least two targets are of an operational, Group-wide nature (such as growth in home markets and cross

selling synergies). In 2008, the members of the Executive Board achieved 16-12% of the maximum of 20% and 15%, respectively

(2007: 12.5-13.6%).

o Value-dependent bonus

For the chairman of the Executive Board, this part represents a maximum of 30% of the fixed annual salary; for all other

members of the Executive Board this represents a maximum of 20% of the fixed annual salary. The value dependent bonus is

related to the annual average performance of Grontmij’s share price. Grontmij’s annual average share price performance

is compared with the average annual share price performance over a three-year period of all companies included in the AEX,

AMX and AScX of Euronext Amsterdam. No payments are made if Grontmij’s performance is the same or less than that of the

Euronext group of companies. If there is a positive difference of 10% or more (Grontmij’s share-price performance is above

the Euronext group of companies’ share-price performance), the maximum value-dependent bonus is paid. A proportionate

amount is paid for a positive difference between more than 0% and 10%. The bonus is paid once every three years in the

financial year following the approval of the financial statements of the last year of the three-year period. The current three-year

period runs from 2006 through 2008. Grontmij’s share-price performance in comparison with the Euronext group of companies

over each of the years 2006 through 2008 is >10% positive. As a consequence, the maximums of 30% and 20% over the years

2006-2008 respectively will be paid in 2009.

A breakdown of the variable remuneration paid to the members of the Executive Board in 2008 is provided on page 116.

GRONTMIJ | ANNUAL REPORT 2008

17


Report of the Supervisory Board

Pensions

In 2006, the pension scheme for all members of the Executive Board was changed to a combination of a final-pay and a

defined-contribution scheme. No pension premiums are paid over fixed income above a maximum of € 300,000. In addition,

the company’s maximum annual pension contributions will not exceed € 75,000 per member of the Executive Board.

In 2008, the following scheme applied to the Dutch members of the Executive Board:

o up to € 64,230 of a member’s fixed salary – a final-pay plan (via Stichting Pensioenfonds Grontmij);

o from € 64,230 to € 108,449 – a defined-contribution plan (via Stichting Pensioenfonds Grontmij);

o from € 108,449 to € 300,000 – an additional defined-contribution plan based on which up to 25% of the fixed income from

€ 108,449 to € 300,000 of the relevant member is paid into an individual pension plan.

Other benefits

Since 1999, the members of the Executive Board have the opportunity to invest in the company through Stichting Medewerkersparticipatie

Grontmij without incurring transaction or custody fees. The new Employee Share Purchase Scheme introduced in

2008 is not open to members of the Executive Board nor is there an option scheme available for the members of the Executive

Board.

Supervisory Board fairness review

The Supervisory Board retains the option of a so-called fairness review only on the variable remuneration related to individual

targets. All other parts of the remuneration are fixed or related to predetermined and assessable targets and based on Dutch

labour law and the applicable labour contracts not subject to a discretionary review.

Remuneration in 2008

Full details of remuneration in 2008 can be found on page 116 of this annual report.

Remuneration policy for 2009 and beyond

The appointment and remuneration committee has reviewed the current policy and decided to add the following.

The members of the Supervisory Board consider it important to align the interest of management with the interest of Grontmij’s

shareholders. In recent years, some of our shareholders have also indicated that they would appreciate an alignment through

share ownership. At the same time, however, the Supervisory Board is well aware of the social debate concerning (free) share

purchase and/or option schemes. In light of the above, the Supervisory Board has decided not to introduce a share bonus or

option scheme, but instead discussed the introduction of voluntary share ownership guidelines with the members of the

Executive Board. The Supervisory Board is pleased to announce that the members of the Executive Board have indicated

that they are willing to voluntarily invest part of their value dependent cash bonus in (depositary receipts for) Grontmij shares.

Such investment could, over time and on a voluntary basis, rise to approximately one-year’s fixed annual salary. Investing in

(depositary receipts for) Grontmij shares will take place within the rules and regulations for insider trading, as approved by

the Supervisory Board.

Other than the above, no additions or changes to the policy are deemed necessary.

Composition of the Supervisory Board

During 2008, no changes occurred in the composition of the Supervisory Board. All members of the Supervisory Board are

independent, as required in best-practice Clause III.2 of the Dutch Corporate Governance Code.

18

GRONTMIJ | ANNUAL REPORT 2008


Report of the Supervisory Board

Financial statements and dividend

The financial statements for 2008 were prepared and endorsed by the Executive Board pursuant to their statutory obligation

under article 2:101 (2) of the Dutch Civil Code and article 2:25c (2c) of the Financial Markets Supervision Act. The statements

were discussed by the Supervisory Board in the presence of the external auditor. After the review of the unqualified opinion

provided by KPMG Accountants N.V., as well as the findings of the external auditor as summarised in a report to the Board

of Supervisory Directors and the Executive Board, the financial statements were endorsed by all members of the Board of

Supervisory Directors pursuant to their statutory obligation under article 2:101 (2) Dutch civil code. The Supervisory Board

recommends the Annual General Meeting of Shareholders adopt these financial accounts. In addition, it recommends that

the Executive and Supervisory Boards be discharged from liability in respect of the managerial and supervisory duties

respectively that they have performed.

The Supervisory Board has approved the Executive Board’s proposal to add € 18.8 million of the result after tax and minority

interest of € 38.3 million (2007: € 32.7 million) to the other reserves. It further recommends the Annual General Meeting of

Shareholders approves the remaining € 19.5 million to be paid out as dividend of € 1.15 (2007: € 1.10) per share.

The Supervisory Board regrets the resignation of CFO Douwe van der Werf as per March 31, 2009 but is grateful for his enormous

dedication to the company over the past five years and wishes him every success on the road ahead.

As the Supervisory Board of Grontmij, we would like to extend our thanks to management and employees. It is their ongoing

commitment to Grontmij that has generated such excellent results.

De Bilt, 11 March 2009

F.L.V. Meysman (chairman)

S.E. Eisma (vice-chairman)

P.E. Lindquist

J.H.J. Zegering Hadders

GRONTMIJ | ANNUAL REPORT 2008

19


Text Water 1... | source of innovation

GRONTMIJ | ANNUAL REPORT 2008


Text 1...

European Water Framework Directive Water resources management

Water treament & supply Waste water treatment Sewerage systems

Flood & coastal protection

GRONTMIJ | ANNUAL REPORT 2008


Executive Board

Gert Dral, Sylvo Thijsen, Birgit Nørgaard and Douwe van der Werf.

22

GRONTMIJ | ANNUAL REPORT 2008


Executive Board

S. Thijsen (Chief Executive Officer)

Year born 1959 Nationality Dutch Appointed 2001 (member), 2003 (Chief Executive Officer), joined Grontmij in 1984 Most

important previous position Managing Director of Grontmij Advies & Techniek Other positions Vice-chairman of the Dutch

Council for Housing, Spatial Planning and the Environment, chairman of the Government Tenders Committee of the Confederation

of Netherlands Industry and Employers (VNO-NCW), chairman of Commission of Economic and Legal Affairs of the Dutch

Association of Consulting Engineers (ONRI), member of the Board of Wood and Timber Platform in the Netherlands, and

member of the Supervisory Council of CUR-net and Utrechts Landschap.

D.G.H. van der Werf (Chief Financial Officer)

Year born 1955 Nationality Dutch Appointed 2003, joined Grontmij in 2003 Most important previous position Chief

Financial Officer of Heerema Fabrication Group Other position lecturer in financial audit and accounting at the Erasmus

University in Rotterdam.

B.W. Nørgaard (Chief Operating Officer)

Year born 1958 Nationality Danish Appointed 2006, joined Grontmij (previously Carl Bro) in 2001 Most important previous

position CEO of Carl Bro A/S Other positions chairman of the Stakeholder Council of Energinet.dk, member of the Board of

DTU - Technical University of Denmark, Member of the General Council of Dansk Industri, member of the Board of Roskilde

Bank A/S, member of the Board of EUDP, the Danish Energy Authority’s Energy Technology Development and Demonstration

programme

G.P. Dral (Chief Operating Officer)

Year born 1955 Nationality Dutch Appointed 2003, joined Grontmij in 1976 Most important previous position Managing

Director of Grontmij Bouw & Installaties Other positions chairman of the Supervisory Board of Rabobank Zaanstreek e.o.,

vice-chairman of the Dutch Association of Consulting Engineers (ONRI), member of ConsulTable, member of the Board of Bouw

van de Randstad, member of the Maritime & Water Project Team of the Economic Advisory Council of Dordrecht, member of the

Board of Stichting ‘Nieuw Holland’.

On 31 December 2008 Mr S. Thijsen held 3,361 (2007: 3,361) participations Grontmij and 2,000 (2007: 0) shares Grontmij

(or depository receipts for them). On 31 December 2008 Mr G.P. Dral held 1,486 (2007: 1,442) participations Grontmij and 1,500

(2007: 100) shares Grontmij (or depositary receipts for them). Mr D.G.H. van der Werf and Mrs B.W. Nørgaard did not hold any

participations or shares (or depositary receipts for them) in Grontmij on 31 December 2008.

The remuneration of the Executive Board is described on page 116.

S. van Nieuwkuyk

Year born 1964 Nationality Dutch Position company secretary.

GRONTMIJ | ANNUAL REPORT 2008

23


Report of the Executive Board

Mission statement, objectives and strategy

When Grontmij N.V. was founded in 1915, its vision was sustainable land consolidation and reclamation for the agricultural

sector and the development of the rural areas. Almost a century later, the company has developed and grown, but it is essentially

the same: Grontmij creates value for its customers and shareholders by designing and realising sustainable living and working

environments.

Grontmij’s mission is to be the best local service provider for design, consultancy, management, engineering and contracting in

the environmental, water, energy, building, industry and transportation sectors. We aim to achieve this through the design and

realisation of plans for the future together with the people and parties in our regions. Our highly skilled and expert staff have a

deep knowledge of the chosen markets and sectors and provide a full range of services throughout the project chain.

FINANCIAL OBJECTIVES

Grontmij is focused on improving results and value creation in the long term. Consequently, the company does not provide

targets for earnings per share per quarter or per year.

Grontmij’s goal is to achieve an annual increase in earnings per share. Its long-term policy is aimed at securing a rise in net profit

by widening margins and increasing revenue. This is based on the following financial objectives:

o an operating margin (EBITA based on Total revenue) of 8-9% in 2010;

o an annual increase in revenue of 10-15% per annum (a combination of organic growth and add-on acquisitions);

o a sound solvency ratio (in the range of 25-30%);

o a healthy interest coverage ratio (EBIT/interest ≥5);

Grontmij’s financial strategy is designed to take advantage of and/or optimise:

o the relationship between the risks involved in its various business operations and their income;

o the relationship between equity, and short- and long-term loans;

o the use of both public and private capital markets;

o the term and stages of various funding components.

STRATEGY 2007–2010

Our core business is provided through the Group’s consulting and engineering firms. We have office networks in six home

markets and we deliver project services in a selected number of other markets in Europe. Our highly-expert operating companies

work in the environmental, water, energy, building, industry and transportation sectors, delivering services to the public

and private sectors in urban areas (or regions of economic development) and covering all segments of the project chain,

including design, consultancy, management and engineering.

- Consolidation in our home markets (Belgium, Denmark,

Germany, the Netherlands, Sweden and United Kingdom)

- Top 3 position in Europe

Enhanced

profitability

8-9%

- Expansion in new niche markets involving products such

as water, energy and transportation (including rail)

Reorganisation

of current

business

Strategy

Portfolio

Management

Divestments

step by step

- non core

- poor performers

- Gaining new market share

- Entering new regions in Central and Eastern Europe

- Selected PFI’s (Private Finance Initiatives)

24

GRONTMIJ | ANNUAL REPORT 2008


Report of the Executive Board

Temporary and limited financial involvement in projects can generate additional cash flow for the expansion of our consultancy

and engineering operations. Long-term involvement in development projects and commercial operations is not part of our core

business.

14

12

EBIT %

10

8

6

4

2

0

Cross selling

2008

2007

2006

2003

norm

repair

sell/stop

Consultancy

& design

Multidisciplinary

project management

Engineering

Contracting

Asset management

& maintenance

- More cooperation

top design firms

- Limited “own”

technology

- Invest in

competences

- Training

- Cost cutting

- Sell/partner

industr. eng.

- Decrease volume

- Risk management

- Training

- PFI with contractors

- Invest

- Frameworkcontract

In the long term, Grontmij aims to achieve a balance between the various activities in its six market sectors and in the different

phases of the project chain. Due to the diverse range of its related activities, Grontmij can reduce its vulnerability to fluctuations

in the market sectors considerably. The Group constantly assesses its portfolio and product market combinations. Based on these

assessments it decides whether to start up, improve, acquire or divest activities in specific product market combinations.

The broad spread of its activities in mature European economies ensures good control of business risks. Avoiding dependence

on one market or single group of clients is an essential component of Grontmij’s strategy. The result is a Group that is less cyclical

than it would be if it did not operate in different market sectors and countries. Profit margins vary by activity, depending on

the specific market circumstances. On average, the target profit margin is higher for activities with a relatively high-risk profile or

activities with substantial impact on the value of clients’ assets, compared to mono-disciplinary engineering activities.

GRONTMIJ | ANNUAL REPORT 2008

25


Report of the Executive Board

MARKET SECTORS

ENVIRONMENT

o Regional & rural development

o Environmental management

o Soil

o Waste

o Nature & ecology

o Outdoor sports & leisure

WATER

o Water framework directive

o Water resources management

o Water treatment & supply

o Waste water treatment

o Sewerage systems

o Flood & coastal protection

ENERGY

o Energy management

o Conventional power plants (fossil)

o Energy storage

o Renewable energy

o Energy transmission & distribution

o Nuclear power plants

o Energy consumption

BUILDING

o Urban development

o Residential building

o Retail & commercial building

o Logistics & distribution

o Offices

o Education, health, culture

o Indoor sports & leisure

o Parking

o Real estate management

INDUSTRY

o Industrial site development

o Chemical industry

o Food & pharmaceutical

o Oil & gas industry

o Mining, steel & metal

o Biochemical

TRANSPORTATION

o Transportation planning & logistics

o Highways & roads

o GIS & ICT

o Railways & rail stations

o Waterways & harbours

o Geo-data

Regional European player

Increasing internationalisation and European integration means that from a strategic viewpoint it is relevant to compare

Grontmij’s position with larger engineering firms in Europe. Based on details provided by the Swedish Federation of Consulting

Engineers and Architects (2007 figures), Grontmij ranked seventh (2006: 7th) among similar European engineering firms in terms

of personnel numbers. Based on revenue, Grontmij is ranked fourth in Europe (2006: 4th).

The increase in internationalisation is a result of the need to create a larger platform to better exploit knowledge with international

clients and large(r) projects. At the same time, economies of scale can be used to cope with rising overheads, investments in IT

and participation in various types of contracts. A common feature of all large engineering firms is that they are working on

forward integration to create added value and stabilise their cash flows.

Global players

- € 1 billion

Grontmij

Regional players

- >70% in home markets

- multidisciplinary generalists

- local clients

- market cap € 100-750 million

Even for international engineering firms, projects essentially remain a local activity. In light of the local nature of the European

market, the large differences between regions and countries in terms of economic activity and the complexity of projects,

consolidation will take place in phases. Building up a network of offices that is firmly anchored locally or regionally so that every

office can offer several disciplines across the entire project chain sets high requirements in terms of knowledge and the

organisational capacity of a company.

26

GRONTMIJ | ANNUAL REPORT 2008


Report of the Executive Board

For Grontmij, it is important to keep pace with developments in the international engineering market. In addition to a strong

position in our home markets, market positions in the Eastern European economy are important to future growth. Grontmij is

aiming for a clear regional European profile, with a strong presence in a limited number of countries or regions. In the years

2009 and 2010, we will start to select and develop one or two market sectors for further global growth.

1,500

Revenues € x 1,000

1,250

1,000

750

500

Sector specialisations

to global services

250

B, GE, NL B, DK, GE, NL, S, UK B, DK, GE, NL, S, UK

0

2004

nr. 1 in the Netherlands

2007

nr. 4 in Europe

> 2010

nr. 1-3 in Europe

Home markets

Our home markets are Belgium, Denmark, Germany, the Netherlands, Sweden and the United Kingdom. These countries have a

decentralised political decision-making structure where our dense office network located close to the client is of great value.

Decisions, especially on spatial planning, building and infrastructure, are taken by municipalities and provincial administrations.

Through our close location and solid connections with these local authorities, Grontmij is able to attract a constant stream of

assignments. Our aim is to be among the top three firms in our business in these countries. Further growth in our home markets

will largely take place through a combination of organic growth and acquisitions. Potential acquisitions will focus on companies

with specialist knowledge and/or acquiring privatised government stakeholdings.

Focus countries

Focus countries are countries where Grontmij is represented in one or two specific market segments, such as environment or

transportation. The Baltic States, the Czech Republic, Hungary, Ireland, Poland and Turkey are our focus countries; the majority

are members of the European Union. Many of the European Union’s long-term programmes in the field of transportation,

the environment and agriculture, among other things, serve to strengthen economic structures.

We expect above-average growth in the following market segments in these focus countries in the years ahead:

o water (flooding and waste water);

o transportation (roads, railways and parking solutions);

o energy (biomass and residual heat, among other technologies).

Private investment is required in other market segments as a response to urbanisation and growing prosperity:

o area development (residential and commercial);

o transportation management.

A local presence is vital, as is thorough knowledge of and the ability to navigate European tendering legislation and procedures.

In order to carry out projects profitably in our focus countries, we will invest in local consultancy firms. These firms will constitute

the basis for the future expansion of the Grontmij network.

By combining operations in our home markets with those in our focus countries, Grontmij will enlarge its footprint as a regional

European player. Grontmij aims to secure a superior position in the European market by 2010.

GRONTMIJ | ANNUAL REPORT 2008

27


Report of the Executive Board

International project management

Thanks to its acquisition of Trett Consulting in the United Kingdom, Grontmij now has the ability to provide high-end management

services for blue chip clients worldwide. Grontmij Trett Consulting is a recognised leader in providing project (contract)

management and consultancy services solving contractual, financial and management problems worldwide. For the larger

projects in the building, industry, transportation and energy sectors we are asked to investigate both technical and legal

matters. Our specialist teams combine particular construction and engineering expertise with law and arbitration practice. This

enables them to scrutinise problems in light of related legislation and recent court decisions and to bridge the technical-legal

gap.

Continuity and growth

Grontmij intends to consolidate its strong market positions and to expand them where possible. Among other things, our

margins can be improved in regions where our core business has a relatively large market share. We expect to extend our range

of services and to ensure ongoing sustainable growth by organic growth and acquisitions. In this respect, we will also examine

the potential for cooperation with the larger firms in the engineering and consultancy sector to achieve our objectives sooner.

In addition to financial considerations, our acquisitions need to satisfy the following criteria:

o enhance our market share in regions where we currently have a limited market share;

o penetrate new and interesting regions for Grontmij (economic growth);

o acquire new competencies, technologies or groups of customers, provided that this strengthens our market position

(especially environmentally related e.g. water, energy).

In addition, we assess acquisitions in terms of their:

o relationship with our operations and culture;

o potential for growth;

o client base;

o leading position in the market or region;

o managerial qualities and styles;

o risk profile.

BUSINESS OPERATIONS

Our target margins can be achieved through economies of scale, market positioning and selective project acceptance. Grontmij

is managed on the basis of its net results and, to a lesser extent, on the basis of growing revenue. The successful execution of

projects is based on effective and efficient collaboration between the various business units, a critical mass and having sufficient

qualified professionals. We have improved our capacity-utilisation rate by moving staff between various activities within

regional office networks and by sharing information through our IT systems. Our day-to-day business operations in our existing

markets are predominantly directed in accordance with the following factors, which determine profit:

o order book and tender-hit rate;

o project management;

o capacity management;

o working-capital management;

o labour costs.

The Executive Board monitors these factors and manages our business operations in this spirit. The following aspects are

important for increasing our net results:

o increasing sales to our existing clients through innovation and better cross-selling techniques;

o focusing on education and training for staff in project management, commercial and general managerial positions;

o continuous alignment with the market and capitalisation of future market demands.

28

GRONTMIJ | ANNUAL REPORT 2008


Report of the Executive Board

STRATEGIC ACTIONS TAKEN IN 2008

As part of its 2007-2010 strategy, action taken by Grontmij in 2008 included:

o consolidating its position in the United Kingdom through the acquisition of Whitelaw Turkington, Trett Consulting and

Roger Preston & Partners;

o participation in Libost in Belgium;

o acquisition of Teldako (energy consultants) in Sweden;

o acquisition of KPI (transportation consultants) in Poland;

o establishing four Group committees in the fields of Market and customers, Systems (IT), Values (CSR) and HR.

SUMMARY OF STRATEGIC ACTION POINTS FOR 2009 AND 2010

In the next two years, Grontmij will focus on the following strategic action points:

o consolidating its position in its home markets (especially in the United Kingdom and Germany), in selected urban regions

(including Central and Eastern Europe);

o consolidating, and where opportune, expand market sectors and fields of expertise;

o meeting its financial objective of EBITA based on revenue of 8–9% (including third-party project expenses);

o consolidating its leading position in the fields of sustainable design, consultancy and management.

Market

GENERAL MACRO-ECONOMIC DEVELOPMENTS AND PROSPECTS

In 2008, GDP in most European Union (EU) economies hovered close to recession: the most recent official data estimate sharp

falls to just under 1% growth in Europe in 2008 and negative growth in 2009; growth in 2007 was still around 3%. A slight upturn

is predicted for 2010. We have already seen a severe contraction in world trade and manufacturing output. The housing market,

usually a key indicator, is also stagnating and has collapsed in some countries. It seems no economy is immune, although

forecasts for some Eastern European countries are more positive than those for the north-west of Europe.

It is against this backdrop that many sectors are looking to government consumption and public spending to provide some relief.

However, while this is welcome news in the short-term, it will have significant impact on public finance deficits in the longer term.

For Grontmij, the economic environment will result in moderate demand for most consulting and engineering services in

North-West Europe. In the Industry and building sector demand will slow down. Pressure on the labourmarket segments

relevant for Grontmij will impact organic growth due to scarcity in professional recruitment pools, especially in the Netherlands

and Denmark, and some specific niches, such as energy. This will oblige the organisation to select projects and financial

resources to obtain a better mix at higher rates. Training and retaining existing employees will become more important.

Growth rates vary from one EU member state to the next. This can be explained in part by new member states playing catch up

and by where ‘old’ members are in their economic cycle, although outlooks for all are dismal.

GDP growth (%) Euro statistics 1/2009

2007 2008 2009 2010

Home markets

Belgium 2.8 1.4 -1.9 0.3

Denmark 1.9 0.2 -1.0 0.6

Germany 2.5 1.7 -2.3 0.7

The Netherlands 2.7 1.8 -2.0 0.2

Sweden 3.5 1.0 -1.4 1.2

United kingdom 3.1 1.0 -2.8 0.2

Focus countries

Czech Republic 5.8 4.1 1.7 2.3

Hungary 2.0 2.0 -1.6 1.0

Ireland 4.9 -2.4 -5.0 0.0

Poland 6.5 5.4 2.0 2.4

Turkey 4.5 4.5 4.3 5.2

Baltics (average) 6.3 -2.4 -5.0 -2.6

Source: www.Europa.Eu/rapid/pressreleases; january 2009

GRONTMIJ | ANNUAL REPORT 2008

29


Text Energy 1... | thinking generates power

GRONTMIJ | ANNUAL REPORT 2008


Text 1...

Energy management Conventional powerplants

Energy storage Renewable energy Energy transmission & distribution

Nuclear powerplants Energy consumption

GRONTMIJ | ANNUAL REPORT 2008


Report of the Executive Board

MARKET DEVELOPMENTS BY COUNTRY

Grontmij’s strategy is based on geographical market penetration. We offer and provide a full range of services spanning the

entire project chain, from consultancy, design and engineering to overall management. Operating through a network of local

and regional offices within selected European markets, Grontmij provides comprehensive services to both the public and

private sectors. For decades, we have pursued this comprehensive approach to servicing our clients and executing projects.

Our long-standing expertise has generated a highly experienced, efficient and decentralised managerial structure in our home

markets and focus countries with access to strong product know-how and expertise within the organisation. As a Group,

Grontmij is involved in more than 25,000 projects every year. Of these projects, 90% are multidisciplinary, executed by teams

representing more than one field of expertise. Grontmij brings together a range of technical and management expertise to

address our clients’ projects in the urban and natural environments.

Over the past year, demand for our services has continued to grow despite a weakening economic outlook in the whole of

Europe. The Group reports on business activities in the six main geographic operating units.

Belgium

Review of 2008

Economic growth remained relatively strong in 2008, largely due to continuing demand from the public sector. Grontmij

reinforced its already strong position in the Belgian market by securing a number of larger projects in urban areas, such as

Brussels and Antwerp. We also won assignments from major industrial clients, such as BP and Jansen Pharma. Through the

participation in Libost, Grontmij is consolidating its geographical spread and

position in the infrastructure sector in Flanders. Our Belgian organisation proved

that EBIT in excess of 10% on revenues (including third-party costs) can be achieved,

even in the current climate.

Solutia,

Gent

Examples of new assignments in 2008 are:

o design of the cycling infrastructure along the ‘inner ring’ (R20) in Brussels.

Besides meeting the needs of increasing cycle traffic, an improved

public-transport flow is a priority in the plans;

o Grontmij manages the execution of maintenance and repairs for 150 school

buildings in Flanders. Sustainability and energy performance are important

items in this project;

o design for the construction of a separated sewer system along the

N253 (between Leuven and Overijse) and adjacent streets.

Belgium Revenue (in millions of euros) EBIT (%) Staff (FTEs) at year end

2008 2007 Δ 2008 2007 Δ 2008 2007 Δ

58.5 53.0 10.3% 9.2 10.3 -10.7% 611 554 10.3

Outlook for 2009

The economic and political uncertainty in Belgium will lead to a provisional 2009 Budget, which is unlikely to contain any

significant new policies. If policy remains unchanged, the budget deficit will increase, reflecting the impact of declining

economic growth on public revenues and spending. This will affect our operational margin by minus 1-2% in 2009.

Denmark

Review of 2008

Although the Danish economy was slowing down, especially in the building sector, Grontmij has further strengthened its

position in the transport, water and environmental sectors. Revenue rose by 13.7% in Denmark through organic growth,

while EBIT remained unchanged.

32

GRONTMIJ | ANNUAL REPORT 2008


Report of the Executive Board

In 2008, Grontmij in Denmark worked on the following on-going and new projects:

o Grontmij is tasked with the consultancy and basic design related to the construction

of the Rødsand 2 Offshore Wind Farm, located south of Lolland in Denmark.

Our consultancy services will include: optimisation of the wind farm’s layout with

respect to visual and environmental impacts, geotechnical considerations, water

depths, grid connection, construction costs and production yield;

o the district heating company in Århus, the second-largest city in Denmark,

extended its contract with Grontmij for energy-saving measures into 2009 and

2010;

o the municipality of Skive has been chosen as Denmark’s Energy City in recognition

of its pioneering approach to both climate and energy. Grontmij plays an active

role in facilitating the process.

Renewable

energy

Denmark Revenue (in millions of euros) EBIT (%) Staff (FTEs) at year end

2008 2007 Δ 2008 2007 Δ 2008 2007 Δ

171.2 150.6 13.7% 6.1 6.1 0% 1,331 1,200 10.9%

Outlook for 2009

Although GDP will decline in Denmark, Grontmij is strongly positioned in design and project management for the transportation,

water and environmental sectors.

Germany/Poland

Review of 2008

Grontmij has considerable critical mass in Germany/Poland (more than 700

employees) in the building, transportation and environmental sectors. Strong

order intake combined with a motivated management team created sustainable

improvements in profitability (EBIT) throughout 2008.

In 2008, Grontmij raised its profile through a number of remarkable projects:

o Grontmij was mandated by WINGAS, a consortium of Wintershall (BASF) and

Gazprom, to acquire the property rights for the construction of a 120-kilometre

section of the Ostsee-Pipeline-Anbindungs-Leitung – the landside connection of

the North-Stream-Pipeline from Russia through the Baltic Sea in eastern

Germany. Grontmij will conduct negotiations with some 1,250 property owners;

o Grontmij will plan the structural framework for the new 70-metre high-rise office

building for the Deutsche Börse AG in Frankfurt/Eschborn. This building project

is based on an ecological concept that includes heat recovery, combined

heat-power-cooling generation and the use of solar energy and resource-saving

building materials.

DZ Bank,

Frankfurt

Germany/Poland Revenue (in millions of euros) EBIT (%) Staff (FTEs) at year end

2008 2007 Δ 2008 2007 Δ 2008 2007 Δ

66.6 51.4 29.6% 12.6 6.3 100% 729 522 39.7%

Outlook for 2009

The German government is working on a stimulus plan designed to boost the economy. As a result, we expect increased

growth in our order inflow in the building, transportation and energy sectors. Grontmij expects profitability levels in 2009

to be comparable to 2008.

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The Netherlands

Review of 2008

The Netherlands is Grontmij’s largest home market (representing approximately 39% of Group revenue). Our market position in

the Netherlands has improved in the energy, water and transportation sectors. Due to the long-term nature of many of the projects

we are carrying out in the infrastructure, environmental and water sectors, we have a well-spread portfolio for the future.

Spoorzone

Delft

In the Netherlands, Grontmij acquired the following consultancy assignments:

o development of the Spoorzone Delft (railway area), generating revenue of

approximately € 13.5 million. Grontmij is drawing up design plans to double the

current track and develop a 2.3-kilometre rail tunnel, underground station and

car park, while creating public space. The project has been set up according to

the innovative Systems Engineering process to achieve a proper balance

between economic results, and social and environmental requirements;

o assignment for the design and engineering of energy-saving aspects for the new

Waste Management Services plant in ‘s-Hertogenbosch;

o the Pharmafilter technology is a highly innovative way to achieve better water

quality while also saving on water and energy consumption. In September 2008

Grontmij received the biennial Aquatech Innovation Award for the Pharmafilter

project. Earlier in the year, the Pharmafilter Concept received other awards

including the European Environmental Press Award and the prestigious 2008

‘De Vernufteling’ award.

The Netherlands Revenue (in millions of euros) EBIT (%) Staff (FTEs) at year end

2008 2007 Δ 2008 2007 Δ 2008 2007 Δ

332.1 315.2 5.4% 8.2 7.8 5.1% 2,666 2,551 4.5%

Outlook for 2009

Economic slowdown will strongly affect the housing and building market. However, we see an increase in the transportation,

environment, water and energy sectors on both national and local levels.

Sweden

Review of 2008

In Sweden, Grontmij is transforming itself from a production engineer to a highcalibre

technical consultant. Some of our low-yield operations were discontinued,

while our more profitable services were strengthened. The acquisition of the

energy consultants firm, Teldako, is in line with this strategy.

Essingeleden

o

Major projects in 2008:

o Grontmij is involved in the extension of an existing tramway in Stockholm.

The assignment includes planning and designing all constructions and bridges

for the approximately three-kilometre extension;

o design of a 70-megawatt wind farm. This is an overall commitment and Grontmij

will be responsible for all aspects of the project, from applying for environmental

permits to infrastructure and park layout;

the Municipality of Täby, north of Stockholm, is planning a new large-scale district heating network and cogeneration

plant over the coming four to five years. Grontmij Sweden is responsible for researching the network infrastructure,

project management and setting up a distribution organisation.

Sweden Revenue (in millions of euros) EBIT (%) Staff (FTEs) at year end

2008 2007 Δ 2008 2007 Δ 2008 2007 Δ

89.0 96.3 -7.6% 8.0 7.5 6.7% 738 735 0.4%

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Outlook for 2009

Grontmij has a good order book for 2009, especially in the transportation and energy sectors. We expect a slight growth in

revenues, despite a slow-down in the general economy.

United Kingdom and Ireland

Review of 2008

Despite the financial crisis and its impact specifically on the United Kingdom building sector, Grontmij maintained profitability

and still has an impressive order intake and pipeline for its multidisciplinary services. The three companies acquired in the first

half of 2008 contributed to revenue and results in line with expectations. The results were however negatively affected by the

decline of the pound sterling.

Important projects in 2008:

o as part of our framework with Yorkshire Water to provide telemetry consultancy

services, Grontmij has been awarded a commission to manage the installation of

first-time telemetry at 700 combined sewer overflows and sewage pumping

stations. This is part of Yorkshire Water’s pollution prevention programme;

o Grontmij was part of the project team that received three Highways Agency

Major Project awards in December 2008 for work undertaken on the 9 km stretch

of motorway from Carlisle to Guardsmill. Grontmij delivered some of the

most technically challenging aspects of the job, including two very large and

complex bridge designs. In doing so, we helped deliver the whole scheme under

budget, ahead of schedule, and to a very high standard of quality;

o in conjunction with the @one Alliance partners that are delivering Anglian

Water’s current capital expenditure programme, Grontmij is developing an

innovative carbon footprint calculator. Based on newly developed embodied and

operational carbon models, this new tool will enable design engineers to

measure carbon impact at every stage of the development of an asset, from

choosing the optimum design to completion and operation.

M6 from

Carlisle to

Guardsmill

United Kingdom/Ireland Revenue (in millions of euros) EBIT (%) Staff (FTEs) at year end

2008 2007 Δ 2008 2007 Δ 2008 2007 Δ

115.4 85.8 34.5% 8.1 8.4 -3.6% 1,279 949 34.8%

Outlook for 2009

Grontmij is strongly positioned in asset management, especially in the water sector. A large proportion of the United Kingdom

water business is tied up in framework contracts. In 2009, the biggest challenge to and influence on our United Kingdom

performance will be the effect of the framework renewal cycle of the water companies’ asset management programmes

(AMP). We expect that after tendering, start-up procedures on the terms of the AMP-5-year cycle frameworks should be

constituted before the summer of 2009. At the end of 2008, we have a considerable order book in other market sectors for

2009.

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Focus countries

Grontmij has a growing number of offices and approximately 400 employees in its focus countries: the Baltic States, the Czech

Republic, Hungary, Ireland and Poland. In 2008 we also opened an office in Turkey. In these countries, we are predominantly

active in either the water, environmental and/or transportation sectors. These operations are all expanding and profitable.

Interaction between our home markets and focus countries can produce a stable, modern consultancy network that will help

shape economic developments in Central and Eastern Europe, in particular.

Outlook for 2009

In our focus countries there is good demand for our services. Our largest unit, Poland, is doing well in the environmental, water

and transportation sectors. In addition, our involvement in EU programmes until 2013 secures a stable position in the near

future.

GENERAL DEVELOPMENTS BY SEGMENT

Grontmij is active in six market sectors: Environment, Water, Energy, Transportation, Building & Industry. Due to the multidisciplinary

nature of our sustainable design and managements services, most areas of expertise are usually integrated in

every project. Based on occurrence in product/client combinations and professional background of our teams and apart from

the formal geographic organisation, at Group level we distinguish three main market segments:

1 Environment, Water & Energy: all services related to a better use of our natural resources;

2 Transportation: all services related to solve transport and mobility issues for rail, water, road and air;

3 Building & Industry: all services related to improving economic functional and ecological performance of existing and new

buildings.

Environment, water and energy

Environmental components are increasingly integrated in projects undertaken in the built-up environment. Awareness of

climate change and CO 2

reduction means that this area of expertise is a natural part of almost every multidisciplinary project.

In addition, restructuring rural areas and development of recreational and natural areas fall within this sector. Although

environmental and climate awareness is high, we expect moderate growth.

The EU Water Directive coupled with our specialist waste water/sewerage knowledge, means Grontmij is well positioned in this

sector. Grontmij is strongly positioned in asset management. A large proportion of the United Kingdom water business is tied

up in framework contracts. In 2009, the biggest challenge and influence on the United Kingdom’s performance is the effect of

the framework renewal cycle of the Asset Management Programme of the water companies.

We foresee healthy growth in the coming year, especially in technical services such as waste-water treatment, water supply

and suppliers, and the management of these assets. In Central Europe, an enormous effort is required in this area.

For Grontmij, capacity building and staff retention in this segment are as important as recruitment.

Building and industry

The current economic crisis will slow down investment decisions for larger, new commercial and residential projects.

The outlook for renovations and maintenance (70-80% of the building market) will remain stable. We anticipate stronger

demand from the healthcare and education sectors, as well as from larger multinational companies that would like to reduce

their water and energy consumption. However, there are major regional differences in our capacity and services we provide in

the building sector. Some industrial segments, such as pharma, oil & gas and agrifood, still have a strong ongoing demand.

Other segments, such as the automotive and logistic segment show a heavy decline in demand. For 2009 we expect our

activities for larger multinationals to remain at the same level as in 2008, or decline slightly.

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Transportation

This market sector is one of the cornerstones of the Group (approximately 28% of revenue). In all home markets and in Ireland,

the Group is well positioned to win tenders for main road axes, conjunctions, and rail and tunnel projects. We foresee ongoing

demand for consultancy and engineering services related to the Trans European Network structure.

In some regions, our capabilities should be expanded to benefit from the market situation. The Transportation sector is a

sector dominated by public investment and/or government initiatives. The tender procedures result in relatively higher

transaction costs, with price, rather than quality, still the ultimate deciding criterion.

Risk management

Risk management is embedded in our daily activities. Action, guidelines and procedures are defined throughout the entire

Group in order to manage one or more specific risk categories. Examples include our internal planning and control procedures,

our reporting guidelines and our organisational structure, accompanied by an appropriate delegation of powers.

In order to maintain an appropriate internal-control regime and a balanced approach to risk management in accordance with

our risk appetite and profile, risk management is an integral part of our organisation. This involves our staff taking responsibility

for identified risks as part of doing business. Our approach to risk management is based on our aim to obtain a reasonable

degree of certainty in achieving our business objectives, while complying with applicable legislation and internal and external

regulations.

Although our internal control mechanisms, our people, our available processes and guidelines, and our approach to risk

management all help to limit uncertainty or unexpected losses, which could constitute obstacles to the achievement of our

business objectives, a risk management process cannot offer an absolute guarantee that we will achieve these objectives.

Nor can risk-management processes preclude the occurrence of material reporting errors, losses, fraud, human error, insufficiently

substantiated decision-making or contraventions of the relevant legislation and regulations. There may even be other

considerable risks that we have not yet identified or risks that we assume do not have a potentially significant impact on our

results, although this may subsequently prove to be the case.

In 2009, we will further improve our pragmatic approach to risk management and will further incorporate it into our business

operations. In the coming two to three years, our focus will be on the implementation and monitoring of a risk control

framework based on the COSO framework. Further to the decision taken in 2008 to embed an internal audit function, an internal

auditor has been hired and started as of 1 January 2009.

We have identified the following categories of risks: strategic and operational risks, those associated with legislation and

regulations, and those concerning financial reporting. The overview is not exhaustive. In view of the great diversity of our

markets, clients and regions, and our broad spectrum of operations, it is virtually impossible to quantify all of the risks that may

occur and which are relevant to the entire Group. We have listed the most relevant risks in the paragraph below.

STRATEGIC AND OPERATIONAL RISKS

Main strategic risks

The most important risks that could pose a threat to a consultancy and engineering firm are:

o wage demands that cannot be passed on in the form of higher fees;

o shortage of available professionals;

o a significant change in public investment behaviours at all or any government level.

Grontmij’s day-to-day operations are less sensitive to fluctuations in prices of fuel, raw and building materials, interest rates and

fluctuations in financial markets.

While it is true that the various aspects of our core business are interrelated, they are also linked to various markets, clients and

sectors.

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The influence of positive and negative cyclical effects is tempered by:

o the cohesion of the Group’s operations;

o our broad geographical distribution;

o the diversity of our client base and market sectors;

o our strong market position and size.

Markets: Grontmij’s former dependence on the Dutch market has been transformed into a geographical spread over six

economies. Grontmij remains alert to signals of changes in market conditions in each of the countries where it operates.

However, it is always possible for market conditions to change unexpectedly. Postponements and a halt in the flow of orders

may result in losses due to a temporary under-utilisation of capacity.

Sectors: Our operations are spread over six sectors: environment, water, energy, building, industry and transportation.

As our portfolio is diversified over six sectors, we are dependent to a limited extent on the performance of the weakening

building sector. Within this sector, we focus on asset management, energy and climate control, and the safety aspects of

construction within management and maintenance services. Consultancy services for the construction of new commercial

buildings only account for a limited proportion of our revenue.

Clients: A large proportion of the services we provide (approximately 70%) is directly and indirectly related to the (semi)publicsector

and utility companies.

Grontmij’s revenues are largely based on investments expected from the governments of European countries and a large

number of industries. To a certain degree, Grontmij is sensitive to changes in price and sudden amendments in government

policy, but we are able to adapt to these promptly by flexible (re-)allocation of specialists in our decentralised multidisciplinary

teams. Sharp fluctuations in price, energy or labour costs (up or down) do not result in changes being made to the investments

made by governments, unless a simultaneous structural economic downturn occurs in all countries and sectors.

The GDP growth rate projections of each country in Europe is therefore one of our guiding indicators.

Contract risks

Thanks to our decentralised network of offices, we generate a considerable portion of our revenue from a large number of

contracts of a relatively limited size with correspondingly limited risks. The largest project in our portfolio accounts for less that

2% of our revenue. Where risks are suspected, they are covered, where possible, by appropriate insurance (for projects and

otherwise). Some contracts are awarded to Grontmij on the basis of long-term agreements stipulating that it is the preferred

supplier.

The majority of our projects is carried out by Grontmij companies acting as the chief contractor for clients, and usually involve

a fixed contract fee.

Project risks

Given the nature and complexity of the consulting and engineering business, Grontmij has developed a robust risk-management

policy for its business operations: an alternating contract portfolio provides the protection required against contract

losses, thorough disciplinary controls have been embedded and funds are actively managed on a daily basis.

Grontmij systematically (ISO-9001 and ISO-14001) adopts a bottom-up approach to its business operations. Risks are identified

at project level, which means it is possible to oversee the risk profiles of all projects by market sector and/or client categories

in each region. This enables us to assess the conditions and risks involved in individual projects and spread the risk adequately.

The diagram on the next page shows the type of risks involved in the execution of projects.

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Types of risks involved in the execution of projects

INTERNAL RISKS:

- Cooperation and process risks

- Organisation risks

EXTERNAL RISKS:

- Politics

- Public Law

- Social

Environmental - Technical risks

Delay >> Interest

Design, preparation

and planning risks

Project realisation risks

FINANCIAL RISKS:

- Interest

- Investment

Sales risks

Exploitation risks

Projects are evaluated against their financial projections at least once per month based on the PCM-method so that necessary

amendments can be made promptly if and when necessary.

Grontmij also carries out area development projects in conjunction with external partners that require a limited capital

contribution. In order to limit the operational and financial risks of such projects, Grontmij regularly opts to place these activities

in separate legal entities in which the Group has an interest of 50% or less. For a limited period of three to four years, Grontmij is

usually able to convert the time spent by our engineers into a (minority) interest in the joint venture company and to invest the

additional cash flow from dividends generated in this way in its core business. Because the organisation has placed limits on its

capital, it applies a very strict investment selection policy when investing in such development projects. The return on equity

from these selected projects amounts to at least 20%.

Such joint ventures are a structural part of our business; they have contributed to Grontmij´s results for many years.

The involvement of Grontmij in joint ventures varies from year to year. Results from joint ventures also vary from year to year

and have to be seen in conjunction with the Group’s other business results. The composition of our project portfolio for the

coming years provides sufficient confidence in the combined results of our engineering and consultancy activities and related

joint ventures.

Risks related to systems

IT systems are a core enabler of business operations at Grontmij. Therefore, it is crucial to have appropriate Information Security

in place. During 2008, a formal Corporate Information Security Policy in line with the ISO-27001 Code of Practice was developed

and approved by the Executive Board. This policy is underpinned by a risk-analysis framework that stress tests the availability,

integrity and confidentiality of information and other operating assets against specific threats to Grontmij’s business processes

and supporting information systems and IT infrastructure. We will roll out and implement this policy Group-wide, starting in

2009.

Labour market risks

Our ability to grow our revenue base is driven to a large extent by the number of qualified staff we are able to recruit and retain.

Our position in the labour market is vitally important for our business operations.

Grontmij strives to have a balanced workforce. About 85% of our people is employed under an employment contract for

indefinite term and the remaining 15% is hired for a particular project or on a flexible basis. Sharing manpower between the

various business units can produce a higher capacity utilisation rate.

GRONTMIJ | ANNUAL REPORT 2008

39


Text Building 1... | linking function into design

GRONTMIJ | ANNUAL REPORT 2008


Text 1...

Urban development Residential building Retail & commercial building

Logistics & distribution Offices Education, health care & culture

Indoor sports & leisure Parking Real estate management

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COMPLIANCE RISKS

Insurance and legal risks

Grontmij is insured against a number of risks, such as professional and general liability and project risk. These risks are insured at

Group and local (national) level. Appropriate cover is arranged at local level for those aspects of normal ongoing business.

At Group level, Grontmij has a director’s’ and officers’ liability insurance in place. From time to time, Grontmij N.V. and its

subsidiaries are involved in legal disputes. Based on legal advice, the Executive Board is of the opinion that the outcome of

current disputes will have no significant effect on the Group’s financial position. Appropriate provision has been made in so far

as there are grounds for doing so. Should the final outcome differ, it will be accounted for in the income statement.

Tax risks

As Grontmij has operating companies in a number of countries, its results depend on the taxes levied in the various jurisdictions.

It is our policy to comply with tax laws in each jurisdiction while striving to mitigate tax costs. Changes in tax law in these

jurisdictions, however, may lead to higher tax costs.

FINANCIAL RISKS

Balance sheet and access to capital

Grontmij pursues an active policy to optimise its balance sheet ratios to limit its financial risks and ensure that it is financially

solvent in the long term. Public listing makes a particularly valuable contribution in the achievement of Grontmij’s objectives

(financial and otherwise). It enables the Group to access a variety of funding sources so that when considering an acquisition,

for example, we can opt for the best possible available funding mix.

Off-balance sheet constructions are avoided. Purchased or internally developed software is not capitalised in the balance sheet,

with the exception of substantial external expenditure on programmes for administrative and technical use. The costs involved

in research are debited directly to the results. Part of this expenditure is expressed as project-related cost of sales. Grontmij has

valued the carrying amount of its assets, including the goodwill paid for the companies acquired in 2008, within the framework

of its normal balance sheet assessment. This assessment has revealed that no impairment needs to be accounted for in the case

of these assets.

Interest rates

Grontmij seeks to safeguard its results and cash flow against interest-rate fluctuations by securing fixed interest loans or variable

interest loans in combination with derivative financial instruments (interest rate swaps).

Currency translation

Although Grontmij limits its sensitivity to foreign-exchange-rate variations, it is not insensitive to such variations. Grontmij has

activities in countries outside the euro-zone. When converted into euros, the income may be influenced by fluctuations in

exchange rates against the euro. Local currency income is largely used to fund local payments; consequently, foreign exchange

rate variations play a limited role at local level. Foreign exchange rate variations can also affect the balance sheet and the

income statement partly because of the interval between the submission of a tender, the award of a project contract and the

time of payment. Forward contracts are concluded where advisable and possible.

Pensions

Grontmij has established pension plans for its people in accordance with the relevant regulations and practice in each of its

home markets. In the Netherlands, the company has set up a separate pension fund. Despite the downturn of the financial

markets, Stichting Pensioenfonds Grontmij complies with the guidelines of the Pensioen- en Verzekeringskamer (PVK)

(the Dutch pensions and insurance supervisory authority) in terms of its cover ratio as per the end of 2008 (111%).

On 1 January 2006, Grontmij introduced a so-called hybrid plan in the Netherlands, which entails a final-pay scheme up to

a gross salary of € 64,230 combined with a defined contribution scheme for the salary above that amount. As a result of the

final-pay scheme, Grontmij is still sensitive to the fund’s performance. The Group can mitigate this risk by adjusting the

contributions payable by its employees. The company runs no risk in relation to the defined contribution scheme.

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A combination of a final-pay and a defined-contribution plan applies in Germany, while Belgium, Denmark and the United

Kingdom have defined-contribution schemes. Sweden has a final-pay scheme involving multiple employers – the ITP plan.

However, there is no consistent, reliable basis to allocate assets or liabilities to the entities participating in the ITP pension

insurance scheme, with the result that it is treated as a defined-contribution plan.

Financial reporting risks

Quality transparent financial reporting is seen as crucial for Grontmij. It facilitates a true and fair view of the Group’s financial

performance so that strategy can be developed and shareholders and other stakeholders can be assured of continuity.

To guarantee the quality of our financial reporting, we use the following risk management and internal control systems:

o a standard annual-planning and reporting cycle, comprising an annual operational plan at operating company level, an

annual budget, quarterly projections and monthly financial reports;

o periodic/regular business assessments, at which the management teams of the various operating companies discuss with the

Executive Board progress made on their operational plans and any measures designed to limit their business risks;

o standard procedures and guidelines, including regulations governing insider trading, an integrity code, an accounting manual

and a whistleblower’s procedure;

o policy for the recruitment and retention of high-calibre financial professionals in all business units.

Based on the results achieved to date through our existing risk management and internal control systems, and following

consultation with the Supervisory Board and its Audit Committee, Grontmij’s Executive Board is of the opinion that to the best

of its knowledge these risk-management and control systems provide a reasonable degree of certainty that its financial report

for the year 2008 does not contain any errors of material significance.

The Group is constantly improving its risk-management and internal-control systems. In the years ahead we will continue to give

top priority to improving the design and effectiveness of these systems and their further integration into our day-to-day

business operations.

Financial performance

FINANCIAL OBJECTIVES

Grontmij has a clear mission. It has defined a number of equally clear financial objectives based on that mission. Performance in

2008 is measured here against those objectives:

Objective

Realisation

Operating margin (EBITA) of 8-9% in 2010 EBITA 2008: 7.7% (2007: 7.0%)

Annual increase of revenue of 10-15% Growth 2008: 9.4% (excluding currency 13.0%)

Solvency ratio of 25-30% Solvency ratio as per 31-12-2008: 27.9%

Interest cover ratio >5 Interest cover ratio 2008: 9.3 (2007: 9.0)

Increase in earnings per share (EPS) EPS increased from € 1.84 in 2007 to € 2.16 in 2008

Increase in dividend per share

Dividend increased to € 1.15 per share

EARNINGS AND DIVIDEND PER SHARE

At year-end 2008 Grontmij had the same number of issued shares, 17,764,920, as at year-end 2007. Earnings per share in 2008

increased by almost 18% to € 2.16 (2007: € 1.84). Grontmij seeks to achieve an annual increase in earnings per share and wants

its shareholders to benefit from this. In determining the proposed dividend for 2008, consideration was given to the Group’s

contractual redemption on existing loans, solvency, liquidity and anticipated cash flow for 2009. In light of the current uncertainty

in the financial markets it is necessary to maintain a solid financial position. It is proposed to increase the dividend per

share to € 1.15. This means that more than 53% of the company’s profit will be paid out to shareholders, in cash.

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RESULTS

Total revenue increased by € 73 million (up 9.5%, excluding currency effects 13.0%) to € 846 million in 2008. Excluding

acquisitions and disposals in 2008 (€ 31 million) revenue climbed by € 42 million (almost 5.5%) from € 773 million (2007) to

€ 815 million.

Net revenue rose to € 664 million (2007: € 598 million), an increase of about 11%. Taking into account disposals and acquisitions,

organic growth in 2008 was 5.5%. The negative impact of changes in currency rates (GBP, SEK) on net revenue was € 16.3 million

or 2.7%; without these effects, organic growth for 2008 would have been 8.2%.

The net margin (profit after tax expressed as a percentage of total revenue) increased to 4.6% in 2008 (2007: 4.2%).

(In millions of euros)

2008 2007 Δ 2008 vs 2007

Revenue 846.2 772.8 + 9.5%

Third-party project expenses 182.2 174.7 + 4.3%

Net revenue 664.0 598.1 + 11.0%

Earnings before interest and taxes 58.2 48.0 + 21.2%

Amortisation 6.9 6.1

EBIT (% revenue) 6.9% 6.2%

EBIT (% net revenue) 8.8% 8.0%

EBITA (% revenue) 7.7% 7.0%

EBITA (% net revenue) 9.8% 9.0%

Profit after tax 38.8 32.7 +18.5%

Net margin (profit after tax/revenue) 4.6% 4.2%

Due to the acquisitions in 2008, the amortisation of intangible assets on balance increased to € 6.9 million (2007: € 6.1 million).

Net interest expenses increased from € 6.0 million in 2007 to € 7.4 million in 2008, primarily because the Group took up a loan (GBP

25 million) to finance the 2008 acquisitions in the United Kingdom.

In 2008, a loss of € 3.6 million was recorded on a number of non-operational property development projects (2007: € 4.5 million).

Changes in currency rates (GB, SEK, PL) on balance impacted EBIT negatively by approximately € 1.6 million, and total revenue

by approximately € 18 million.

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Grontmij’s business models in both the Netherlands and Belgium utilise the selected use of joint ventures and associates to

share knowledge and to mitigate risks. Grontmij therefore includes all results from joint ventures and associates (equity

accounted investees) in the calculation of EBITA and EBIT. The total profit from our activities through equity accounted investees

in 2008 amounted to € 12.7 million (2007: € 15.5 million). These earnings result from the fact that Grontmij carries out projects in

cooperation with external partners under joint control. The involvement of Grontmij in joint ventures varies from year to year.

Results from joint ventures also vary from year to year and have to be seen in conjunction with the Group’s other business

results. The composition of our project portfolio for the coming years provides sufficient confidence in the combined results of

our engineering and consultancy activities and related joint ventures.

PERFORMANCE BY COUNTRY

€ million or %

Belgium Denmark Germany/Poland The Netherlands Sweden UK/Ireland

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Total revenue (TR) 58.5 53.0 171.2 150.6 66.6 51.4 332.1 315.2 89.0 96.3 115.4 85.8

Net revenue (NR) 53.2 49.5 126.9 112.8 53.5 44.8 248.1 231.0 75.0 80.0 102.1 73.9

EBIT 5.4 5.4 10.4 9.2 8.4 3.2 27.3 24.5 7.1 7.2 9.3 7.2

EBIT (% van TR) 9.2 10.3 6.1 6.1 12.6 6.3 8.2 7.8 8.0 7.5 8.1 8.4

EBIT (% van NR) 10.1 11.0 8.2 8.2 15.7 7.2 11.0 10.6 9.5 9.0 9.1 9.7

Belgium

Grontmij Belgium increased total revenue by 10.4% and net revenue by almost 7.5%. Net revenue growth was fully organic.

Grontmij Belgium’s joint venture results, including Libost, were again strong, resulting in another excellent year for Belgium

with an EBIT margin on net revenue of 10.1%.

Denmark

Grontmij Denmark turned in record levels of both total revenue and net revenue. The latter increased by 12.5% to € 126.9

million, doubling Denmark’s growth (almost fully organic) compared to last year’s figure. Despite some restructuring expenses

in 2008, the EBIT margin on both total and net revenue was maintained at 2007 level.

Germany/Poland

Grontmij Germany profited from strong demand throughout the year in all expertise areas and from record levels of revenue in

BGS, acquired as per 1 January 2007. The growth increase that was expected at the end of last year in the energy, building and

transportation sectors materialised during the third and, in particular, the fourth quarter. In addition to the superb results in

Germany, Grontmij Poland’s acquisition of KPI added to its critical mass and enabled its operation to profit from high productivity

levels in the second half of 2008.

Total revenue in Germany/Poland increased by 30% to € 66.6 million (2007: € 51.4 million). As operational expenses obviously

increased to a far lesser extent, the region’s EBIT increased to € 8.4 million resulting in an EBIT margin on total revenue of a

considerable 12.6% (2007: 6.3%).

The Netherlands

Grontmij´s operations in the Netherlands recorded growth in total revenue of 5.4% to € 332.1 million (2007: € 315.2 million).

Net Revenue also increased in line with expectations, from € 231.0 million in 2007 to € 248.1 million in 2008. After eliminating

the effects of some divestments as well as those of two minor acquisitions in 2008, organic growth of net revenue was 8.6%.

The joint venture result is € 10.6 million in 2008 (2007: € 13.3 million).

GRONTMIJ | ANNUAL REPORT 2008

45


Report of the Executive Board

Sweden

In 2008, Grontmij Sweden completed the process of adjusting its business mix. The successful acquisition and integration

of Teldako energy consultants meant that the decrease of net revenue was limited to 6%. Net revenue amounted to

€ 75.0 million (2007: € 80.0 million). Total revenue was € 89.0 million (2007: € 96.3 million) with EBIT margins on both total and

net revenue improving from 7.5% to 8.0% and from 9.0% to 9.5%, respectively.

The actual EBIT as reported in euro was influenced negatively by the decline of the Swedish Krona to an amount of € 0.1 million.

United Kingdom and Ireland

Despite the sharp decline in the British and Irish economies towards the end of the year, Grontmij in the United Kingdom can

report a good year. Three successful acquisitions decreased the United Kingdom´s dependence on the water sector and

contributed to a total revenue increase of 34.5% to € 115.4 million (2007: € 85.8 million). The EBIT margin on total revenue

decreased slightly to 8.1% (from 8.4% in 2007) following the postponement of assignments within existing and expiring

framework contracts with several large water companies.

In the course of 2008, the decline of Sterling accounted for the loss of net revenue as reported in euro to an amount

of € 16.2 million, with EBIT similarly affected by an amount of € 1.6 million. Apart from currency effects, Grontmij United

Kingdom’s organic net revenue growth amounted to 15.2%.

PERFORMANCE BY MARKET SEGMENT

Grontmij offers consultancy, engineering and managerial services throughout the entire project chain (from design to

execution). By far the bulk of our projects are of a multidisciplinary nature with multiple forms of expertise represented within

a project team.

Our performance in the various market sectors shows that our Environment, Water and Energy sectors accounted for approximately

41% of revenue, representing around 8% of Group earnings before interest and tax. The transportation sector (28%)

and building and industry (31%) generated earnings before interest and tax of 8% and 7%, respectively. The services Grontmij

provides in the building sector include project and asset management, the design of sustainable processes and systems for

installations, energy, water and raw materials, and related consultancy.

About half of our clients are active in the public sector, 20% in the semi-public sector and utilities and the rest in the private

sector (of which half are multinational).

Market segment Revenue Revenue EBIT Professionals

(In millions of euros) (in %) (FTEs)

2008 2007 2008 2007 2008 2007 2008 2007

Environment, Water

and Energy 340 310 41% 40% 8% 8% 2,950 2,800

Building and Industry 260 260 31% 35% 7% 6% 2,400 2,300

Transportation 230 180 28% 25% 8% 8% 1,800 1,500

NB. The amounts and percentages stated above are based on various assumptions and do not include Holdings & Eliminations.

46

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Report of the Executive Board

BALANCE SHEET

As a result of acquisitions, goodwill of approximately € 130 million has been capitalised under non-current assets in the

balance sheet, of which Carl Bro accounts for € 99 million. The annual impairment tests did not give rise to any impairment

losses through profit or loss.

In millions of euros

2008 2007 2008 2007

Non current assets 292 249 Equity 175 157

Current assets 335 347 Non current liabilities 130 148

Current liabilities 322 291

627 596 627 596

The increase in total assets, from € 596 million to € 627 million, is related to companies acquired in 2008. In the balance sheet,

amounts due from and due to customers for the rendering of services are, on a contract-for-contract basis, presented

seperately in the line items receivables and liabilities. The impact on the balance sheet per December 31, 2008 and 2007 is

€ 74 million and € 67 million respectively.

Cash in hand amounted to € 30 million as at 31 December 2008 (31 December 2007: € 34 million), which can be considered

normal in view of the scope and nature of our operations and the cash flow fluctuations anticipated during the year.

To illustrate this point, the average salary payment amounts to approximately € 36 million per month.

The increase in equity from € 157 million to € 175 million is due largely to the addition of the 2008 profit (€ 39 million) less

dividends paid (€ 19 million). Our solvency ratio (equity in relation to total assets) increased from 26% to 28%.

To finance the acquisitions in the United Kingdom in April 2008, Grontmij agreed an extension to the existing loan agreement

of GBP 25 million.

Vis a vis the future implementation of our strategy, the situation prevailing in the market, the conditions stipulated by

financiers and a sound risk policy, the balance sheet can be considered as a healthy base.

GRONTMIJ | ANNUAL REPORT 2008

47


Text Industry 1... | sustainable solutions add value

GRONTMIJ | ANNUAL REPORT 2008


Text 1...

Industrial site development Chemical industry Food &

pharmaceutical Oil & gas industry Mining, steel & metal Biochemical

GRONTMIJ | ANNUAL REPORT 2008


Report of the Executive Board

Organisation and personnel

ORGANISATIONAL STRUCTURE

Grontmij operates in six countries and its organisation is structured according to this decentralised geographic spread.

However, the Executive Board is responsible for policy, strategy, acquisitions, investments, risk management, finance and the

Group’s internal coordination. Services are provided at Group level that are best tackled centrally for reasons of efficiency or

because they require a large degree of specialisation or funding.

Grontmij’s philosophy is that its operating companies should be able to operate as independently as possible within the

framework of the Group’s policy, corporate principles and internal risk management and control systems. Strong management

and local knowledge is crucial to our business objectives. To further develop and enhance Grontmij’s culture and exchange

knowledge and know how, four Group-wide committees have been established in the fields of:

o market and customers;

o systems (IT);

o values (CSR);

o human Resources.

Delegation is firmly anchored within Grontmij’s culture, both internally and when offering our services to clients.

As an organisation, we are adept at creating multidisciplinary teams based on the fields of expertise within a country or several

countries. This creates synergy, especially where complex, comprehensive projects are involved, resulting in greater profitability.

It can also boost the creativity and involvement of the organisation as a whole, and can present our people with more opportunities

to tackle professional challenges and develop their potential.

EXECUTIVE

BOARD

Environment

Water

BE

DK

GE

NL

SE

UK

C+E

EU

Energy

Building

Industry

Transportation

KNOWLEDGE MANAGEMENT

Due to the knowledge-intensive nature of our operations, we need to ensure that knowledge and information are widely

accessible. Our network structure offers the significant advantage that our people in all our home markets are connected

through networks that enable us to share knowledge rapidly. Based on a strong IT platform, we can improve the development

and quality of our services and use our resources more efficiently.

We provide as much encouragement as possible to professional networks active in various fields of expertise throughout the

organisation. Senior management supervises the development of networks. In addition, we regularly organise meetings and

seminars at Group, national and regional levels. Targets are set for these professional networks in annual programmes, and

measured by the management teams of relevant operational units and the Executive Board.

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Report of the Executive Board

With the aid of sophisticated tools, the knowledge available within our organisation is used effectively, efficiently and with

growing frequency, even across borders, providing the right information in the right place at the right time. This represents one

of the most important pillars underpinning the Group’s future development.

HUMAN RESOURCES MANAGEMENT

The services Grontmij provides must be expertise-based and of high quality. Grontmij’s human resource policy is designed to

enable the Group to attract and retain professionals and skilled people, and to offer them development opportunities so that

they can grow their potential. Grontmij aims to be a preferred employer, sensitive to local conditions. The limited outflow of

highly trained managers and staff indicates that Grontmij is succeeding. In 2008, staff turnover has decreased slightly compared

to 2007. The quality of our people is a key selling point. In tight labour markets, our clients still rely on us to deploy the best. This

means that sound policies to ensure internal career development is vitally important if we are to retain good people and skills,

and utilise them fully for both Grontmij and our clients’ benefit. Our policy is aimed at developing people who are flexible and

capable of going on to hold managerial positions, become technical specialists or project managers

Business and managerial skills are becoming increasingly important, and Grontmij accordingly supports the development of

talented staff and managers. The Group’s international departments also have a global pool of experienced freelance professionals

who are regularly retained to serve on a project basis.

Flexibility through staff interchange is an important aspect of Grontmij’s policy. Where possible, the same systems are used

throughout the Group and both short- and long-term staff-exchange programmes have been developed. This has helped to

ensure a high capacity-utilisation rate and has made it possible for the company to retain valuable staff.

Workforce (FTEs) at year-end 2008

Belgium Denmark Germany Netherlands Poland Sweden UK/Ireland Total

Permanently employed 515 1,250 526 2,204 159 738 1,181 6,573

Temporarily employed 10 81 29 192 15 - - 327

Employed by Grontmij 525 1,331 555 2,396 174 738 1,181 6,900

Agency (external) staff 86 - - 270 - - 98 454

Total* 611 1,331 555 2,666 174 738 1,279 7,354

Women (% – Grontmij payroll) 32% 28% 37% 22% 48% 25% 25% 27%

Fulltime (% – Grontmij payroll) 78% 94% 83% 72% 98% 85% 97% 82%

* Grontmij employed a total of 8,237 staff at the end of 2008.

Workforce (FTEs) at year-end 2007

Belgium Denmark Germany Netherlands Poland Sweden UK/Ireland Total

Permanently employed 452 1,129 497 2,211 115 733 826 5,963

Temporarily employed 25 71 - 194 15 2 41 348

Employed by Grontmij 477 1,200 497 2,405 130 735 867 6,311

Agency (external) staff 77 - 25 285 - - 82 469

Total* 554 1,200 522 2,551 130 735 949 6,780

Women (% – Grontmij payroll) 31% 28% 36% 21% 49% 25% 24% 26%

Fulltime (% – Grontmij payroll) 77% 94% 82% 73% 98% 85% 99% 83%

* Grontmij employed a total of 7,594 staff at the end of 2007.

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Report of the Executive Board

Grontmij participates in structural programmes to train and otherwise assist students by offering them the opportunity to

acquire practical experience through work placements and research assignments. A number of our people act as guest

lecturers or student advisers at technical universities and other higher-education institutions in many of our home markets

and focus countries. Examples include Warsaw Polytechnic and the Academy of Economics in Poznan (Poland), the technical

universities of Delft, Eindhoven, Enschede and Wageningen (the Netherlands), the technical university in Denmark, Wiesbaden

(Germany), Edinburgh and Glasgow (Scotland) and Wuhan (China) and Chalmers University of Technology (Sweden). Grontmij

also sponsors scientific projects focusing on sustainability and an international group of young scientists (SYISS) in Sweden.

PENSIONS

Local conditions and regulations are taken into account when designing pension plans and similar facilities for staff. Stichting

Pensioenfonds Grontmij (the Foundation) is responsible for administering the pension entitlements granted by the Group’s

Dutch subsidiaries. At the end of 2008, the pension fund had 2,653 members (2007: 2,549) and 1,204 pensioners (2007: 1,022).

At the end of 2008, the fund had an invested capital in excess of € 517million (2007: € 544 million). The decision to index the

pensions and non-contributory entitlements has been postponed until mid-2009 (1 January 2008: 1.19%). The same applies to

the decision to change pension premiums. The pension fund cover ratio was reported in accordance with the Pensioenwet

(Pensions Act) for the first time in 2006. At the end of 2008, the cover ratio amounts to 111% (2007: 146%), based on preliminary

calculations.

STAFF REPRESENTATION

In most countries where Grontmij is active, a works’ council is in place. Representatives of these councils together form the

European Works’ Council. A covenant entered into between the European Works’ Council and the Executive Board describes

the role, responsibility and powers of the European Works’ Council. According to its covenant, the European Works’ Council

had two regular meetings with the Executive Board. In addition to explaining Grontmij’s current business, operations and

results, best practices for workforce retention and economic developments and potential consequences into the future we’re

discussed.

Corporate governance

Grontmij N.V. is committed to sound corporate governance. In 2007 it adjusted its corporate governance structure to reflect

the increasing internationalisation of the organisation. Grontmij has taken note of the revised Dutch corporate governance

code published by the Corporate Governance Code Monitoring Committee on 10 December 2008 (the “revised Code”).

Although the revised Code only becomes effective as of 2009, Grontmij is already reporting on its compliance with the

principles and best practice guidelines of the revised Code.

GOVERNANCE STRUCTURE

Grontmij’s governance is structured effectively. This organisational structure, supported by our core values and Code of

Conduct, facilitates transparent reporting throughout the Group to both the Supervisory Board and the Executive Board.

In turn, both Supervisory Board and Executive Board report to the Annual General Meeting of Shareholders.

The Annual General Meeting of Shareholders, Supervisory Board and Executive Board each have specific powers and

responsibilities; these are described comprehensively in the Articles of Association and separate charters that are available

on our website: www.grontmij.com/investorrelations/corporategovernance

The role of the Annual General Meeting of Shareholders

An Annual General Meeting of Shareholders is organised within six months of the end of the financial year. Further shareholders’

meetings may be held at the request of the Executive or Supervisory Boards, subject to the provisions of Sections 110–112

of the Dutch Civil Code. Shareholders or holders of depositary receipts who, on their own or together, represent no less than

1% of the company’s issued share capital or whose shares or depositary receipts have a market value of at least € 2 million,

are entitled to request the Executive or Supervisory Boards to put items on the agenda of a general meeting of shareholders.

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The Annual General Meeting of Shareholders appoints, suspends and dismisses members of both the Supervisory and

Executive Boards, usually following a non-binding recommendation from the Supervisory Board. If no such recommendation

has been submitted or if the Annual General Meeting of Shareholders wishes to deviate from such recommendation, the

decision must be taken by an absolute majority of the votes cast, representing at least one-third of the Grontmij’s issued share

capital. When appointing a member of the Executive Board, a ballot may only include candidates whose names are stated in

the agenda.

The Annual General Meeting of Shareholders may only decide to amend the company’s Articles of Association based on

a proposal presented by the Executive Board that has been approved by the Supervisory Board. Amendments require an

absolute majority.

The procedure for appointing and replacing members of the Executive and Supervisory Boards, and the rules governing

amendments to the Articles of Association, are set out in Grontmij’s Articles of Association, which can be found on

www.grontmij.com/investorrelations/corporategovernance/structure

The role of the Supervisory Board

Grontmij’s Supervisory Board has the duty to oversee all our activities and provide guidance and advice to the Executive

Board. Supervision focuses on the realisation of strategy, proper execution of internal risk management and control structures,

adequate financial reporting and legal and regulatory compliance. In pursuing these tasks, the Supervisory Board takes the

interest of all stakeholders into account. The Supervisory Board has two permanent committees that report directly to it, the

Audit and the Appointment and Remuneration Committees. For a detailed description of the tasks and responsibilities see our

website: www.grontmij.com/investorrelations/corporategovernance/Supervisory Board

The role of the Executive Board

The Executive Board is responsible for managing the company. Among other things, this means the Executive Board is in

charge of determining and realising the Group’s objectives, strategy, financing and policy, and its results. The Executive Board

bears collective responsibility for managing the company. The specific roles and responsibilities of the CEO and CFO are laid

down in the Executive Board charter which can be found on our website: www.grontmij.com/investorrelations/corporategovernance/executiveboard

During the Annual General Meeting of Shareholders held on 15 May 2008, the Executive Board was authorised to issue shares,

grant rights to acquire shares, and to limit or exclude pre-emptive rights pertaining to the issue of shares. During the same

Annual General Meeting of Shareholders, the Executive Board was given the power to decide to acquire shares in Grontmij N.V.

or depositary receipts for such shares. These decisions were recorded in the minutes of this meeting and have been published

on the website: www.grontmij.com/investorrelations/corporategovernance/annualgeneralmeeting

THE CODE

Grontmij applies the principles and best practices guidelines of the revised Code, except for the following principles and best

practice guidelines below that are not or not fully applied.

o II.1.1: Mrs B.W. Nørgaard was appointed for a four year period in August 2006. Members of the Executive Board appointed

before 2004 all have a contract for an indefinite term. Future contracts will be made for a period of four years;

o II.2.10 & II.2.11: The Supervisory Board retains the option of a so-called fairness review only on the variable remuneration

related to individual targets. All other parts of the remuneration are fixed or related to predetermined and assessable targets

and based on Dutch labour law and the applicable labour contracts not subject to a discretionary review.

The Supervisory Board does not have the power, other than by law, to recover from the members of the Executive Board

variable remuneration awarded on the basis of incorrect financial or other data. Future contracts will allow for such power;

GRONTMIJ | ANNUAL REPORT 2008

53


Report of the Executive Board

o II.2.13f.: Individual targets are not disclosed. Similarly to some of the performance-related targets, these could contain

competition sensitive information or information of an otherwise confidential nature that Grontmij does not want to

disclose;

o III.3.1 The profile of the Supervisory Board does not address the aspect of diversity nor does it contain a specific objective in

this respect. We will review the profile in 2009 and, if considered necessary, propose a revised profile at the 2010

shareholders’ meeting;

o III.5.11 The chairman of the Appointment and Remuneration Committee also chairs the Supervisory Board. Usually the

chairman of the Supervisory Board is also chairman of the appointment committee. At Grontmij the appointment

committee is combined with the remuneration committee. Given the leading role of the chairman of the appointment

committee in the selection and nomination process of members of the Executive and Supervisory Boards, it is decided that

the chairman of the Supervisory Board also chairs the combined Appointment and Remuneration Committee.

In 2009, we will review the above deviations and determine, also in view of general market practice, whether any changes need

to be made.

LARGE COMPANIES REGIME

In 2007, Grontmij changed its corporate governance structure to reflect the Group’s international character. As an internationally

active holding company with the majority of its employees working outside the Netherlands, Grontmij N.V. is exempt from the

large companies regime (structuurregime). A separate holding company has been established for the Dutch entities.

The mitigated large companies regime (verzwakt structuurregime) has been introduced into Grontmij Nederland Holding B.V.

in accordance with Sections 153(3)(b) and 155 of the Dutch Civil Code, Vol. 2. As a result, the Dutch entities are managed by a

Dutch Management Board and supervised by a Dutch Supervisory Board. A Dutch Works’ Council is active for Grontmij

Nederland Holding B.V. while representation at Group level is organised in the form of a European Works’ Council. A covenant

entered into between the European Works’ Council and the Executive Board describes the role, responsibility and powers of

the European Works’ Council.

DEVELOPMENTS DURING 2008

As stated in the Supervisory Board’s report, the Supervisory Board regularly reviews (elements) of Grontmij’s corporate

governance structure. Any material changes to the structure will be proposed for approval at the Annual General Meeting of

Shareholders. During the year, no changes were made or proposed to Grontmij’s corporate governance structure.

DEPOSITARY RECEIPTS FOR SHARES

As of 29 May 2006, issuing depositary receipts for ordinary shares no longer constitutes an anti-takeover measure. In accordance

with the Code, Stichting Administratiekantoor van Aandelen Grontmij N.V. will provide depositary receipt holders with a proxy to

vote in all circumstances. Grontmij N.V. and Stichting Administratiekantoor van Aandelen Grontmij N.V. make it easy for depositary

receipt holders to exercise their right to vote at shareholders’ meetings. Any depositary receipt holder who provides timely notice

of their depositary receipts before a shareholders’ meeting, subject to relevant stipulations in the Group’s Articles of Association,

is also deemed to have submitted an application for a proxy to vote. Consequently, the receipt-holder is no longer required to

pursue a separate procedure to obtain a proxy. There are no restrictions for the transfer of - or votings rights on - shares or

depositary receipts for shares

PREVENTION OF INSIDER TRADING

Grontmij has regulations for the prevention of insider trading. These regulations were approved by the Supervisory Board and

were distributed to supervisory and managing directors, the managers of the various business units and other staff who have

access to confidential information. Our insider trading rules comply with the relevant provisions of the Wet op het financieel

toezicht.

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Report of the Executive Board

ANTI-TAKEOVER MEASURES

Grontmij’s Articles of Association provide for the option of issuing preference shares. Stichting Preferente Aandelen Grontmij

(the Foundation) has been established to safeguard the interests of Grontmij, its associated companies and all stakeholders.

It is possible to safeguard these interests by acquiring preference shares and exercising the rights associated with them.

The option to issue preference shares must be deemed to constitute a protective measure.

This measure is of a temporary nature and will enable Grontmij to assess the merits of any potentially undesirable hostile

takeover bid or concentration of voting rights. No preference shares had been issued as at 31 December 2008.

Grontmij and the Foundation have entered into agreements to enable Grontmij preference shares to be issued to the

Foundation, which would then purchase them. Through these agreements, Grontmij has acquired a put option to issue a

number of preference shares equivalent to no more than 100% of its issued share capital in the form of ordinary shares,

less one. The Foundation has a call option to buy a number of preference shares for no more than 100% of the company’s

issued share capital in the form of ordinary shares, less one.

The Foundation has a credit facility to enable it to pay the issue price. This price will amount to 25% of the nominal value of

the preference shares issued.

Both the put and call option agreements were renewed on 30 May 2006 following the amendment of Grontmij’s Articles of

Association on 29 May 2006. The reasons for renewing the call option agreement were explained during the Annual General

Meeting of Shareholders held on 17 May 2006. Grontmij is of the opinion that the period during which preference shares are

issued should not be longer than strictly necessary. Therefore, the period within which a shareholders’ meeting whose agenda

includes a proposal for the redemption of preference shares should be held, was reduced from 24 to 12 months following the

initial issue of such preference shares. These amendments have been incorporated into the Articles of Association currently

applicable.

Declarations

No transactions of material significance were conducted during the year under review that involved a conflict of interest for

any member of the Executive or Supervisory Boards. No transactions of material significance were conducted between the

Group and any natural person or legal entity holding more than 10% of Grontmij N.V.’s shares.

To the best of the Executive Board’s knowledge, no agreement has been entered into by shareholders for the purposes of

restricting the transfer of shares (or depositary receipts).

Apart from the credit-facility agreement entered into with Fortis Bank Nederland N.V. mentioned in the note to the

consolidated financial statements for 2008, no major contracts contain ‘change of control’ clauses in relation to Grontmij.

Pursuant to article 5:25c of the Financial Markets Supervision Act (“FMSA”; Wet op het financieel toezicht, “Wft”) and to the best

of our knowledge, the annual financial statements of Grontmij N.V. of 2008 give a true and fair view of the assets, liabilities,

financial position and profit of Grontmij N.V. and the entities included in the consolidation. The report of the Executive Board

(annual report) provides a true and fair view of the state of affairs on the reporting date, the course of business during the year

under review of Grontmij N.V. and its subsidiaries included in the financial statements and includes a description of the

principal risks Grontmij faces.

De Bilt, 11 March 2009

S. Thijsen, CEO

D.G.H. van der Werf, CFO

B.W. Nørgaard, COO

G.P. Dral, COO

GRONTMIJ | ANNUAL REPORT 2008

55


Text Transportation 1... | supporting mobility

GRONTMIJ | ANNUAL REPORT 2008


Text 1...

Transportation planning & logistics Highways & roads GIS & ICT

Railways & rail stations Waterways & harbours Geodata

Bridges & tunnels

GRONTMIJ | ANNUAL REPORT 2008


Corporate Social Responsibility

CSR and Grontmij – Integrated in

the way we work

CSR is integral to what Grontmij does as an organisation; the essence

of our business is to participate in creating sustainable living and

working environments. Our ambition is to be at the forefront of the

consulting engineering industry by supplying skills and services that

will take our clients further towards sustainability. Our main focus

and priority is to play a major part in addressing the effects of climate

change.

We have defined the following objective for Grontmij’s commitment

to our corporate responsibilities:

Grontmij wishes to play an active part in sustainable development in

the societies in which it operates by acting responsibly with respect to:

Our workplace and

the employment of

our staff.

The market and

delivering best

practice in

sustainability to

our customers

Our partners and ensuring

integrity in our supply of

services and our

purchasing policies

Our environment and

playing our part

in mitigating and

adapting to

climate change

Our society and

being good citizens

We view CSR reporting as a way to demonstrate our efforts in these

areas and how we plan to continuously improve our performance. Our

ambition is to lead the industry in developing sustainable practices, for

the benefit of all our stakeholders.

CSR – governance, management

and stakeholder engagement

Grontmij’s annual report has contained a section on CSR for several

years. However, with this report covering 2008, we will take Grontmij’s

CSR reporting a step further by introducing the Global Reporting

Initiative (GRI) standards for reporting on our performance.

The decision to prepare our CSR report in accordance with GRI

standards was taken by the Executive Board. A CSR committee, under

the direction of the Executive Board, is responsible for defining our

approach, reporting and ongoing performance improvement

initiatives. The Group CSR manager is responsible for coordinating

the reporting from the countries and guiding and assisting our

improvement. The managing directors in our home markets are

responsible for ensuring the implementation of our initiatives and

have appointed individuals to support and coordinate regional

action. Our decision was to report a self-certified application at level

C within the GRI framework. The illustration on the right illustrates

our application level in the GRI format.

Mandatory

Optional

Self

Declared

Third

Party

Checked

GRI

Checked

Report Externally Assured

Report Externally Assured

Report Externally Assured

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Corporate Social Responsibility

The selection of which indicators to report against was taken

following a process of internal and external stakeholder engagement.

We determined which of the GRI core indicators were of

material importance to both the Group and its key stakeholders of

staff, clients and investors. Specifically, this process determined

which indicators had key strategic significance for the Group when

considered against our core values and mission statements, the

expectations of staff and clients and the opportunities we may

present to investors. Similarly, our priorities for CSR were derived

from a stakeholder-engagement process across the Group. We have

defined these in terms of our CSR objectives, which are shown above

in our opening paragraph and in the following sections.

The CSR report is based solely on the operations of our home

markets (these are Belgium, Denmark, Germany, the Netherlands,

Sweden and the United Kingdom). Legal entities with fewer than 100

staff and non-incorporated joint ventures are omitted. In many

regions we adopt a proactive approach to engaging only with

suppliers and sub-consultants who can contribute to our corporate

goals and objectives. However, since we have determined that we

have no direct influence over their performance, we have excluded

our supply chain from our reporting. We are not aware of any specific

limitations to our report other than those stated in the detailed

report for each of our chosen indicators.

We are modernising the Öresundsverket power plant in Malmö for

E.ON. A new gas-fired plant replaces the old facility, saving

1 Mt of CO 2

per year. Working at approximately 90% efficiency, it

will supply 3 TWh of electricity and 1 TWh of heat per year to

Malmö’s district heating network. Grontmij has been responsible

for making the environmental impact assessment included in the

environmental license for the project. Together with the client we

drew up environmental criteria and goals. Grontmij carried out all

the studies, technical specifications and planning required to

design a highly efficient production facility that minimises carbon

emissions.

On page 66 and 67, we summarise the GRI indicators selected and

how we score per indicator. Pages 68 and 69 present our GRI content

index, with references to the pages in the annual report where they

are documented.

CSR and customers – delivering

sustainable consulting

Grontmij’s approach to CSR is aimed at playing our part in a more

sustainable society. The most tangible way we can achieve this is by

adding value to our clients’ efforts in this regard. Our own carbon

footprint, for example, is small and so our efforts to manage and

reduce it may only have modest impacts. However, the indirect

effects we can set in motion through being at the forefront of

sustainable development technology and thinking are significant.

To this end, we have put active project management systems in place

in many of our operations to ensure that we consider and deliver

designs and outputs that enhance sustainability. To illustrate this,

64% of employees are covered by procedures for minimising the

environmental impact of appropriate projects. We intend to

increasingly share best practices across our operating regions and

widen the coverage of our formal procedures for managing projects

in a way that enhances their contribution to sustainability.

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Corporate Social Responsibility

In all that we do, whether this relates to information and

communications technology, industry, building, energy, water,

environment or transportation, our aim is to reduce the use of energy

and raw materials, produce less waste, move things

and people over smaller distances and produce less CO 2

. We use

ourdesign skills to remove embedded energy, our process skills to

make systems work more efficiently and our management skills to

plan and enable programmes to deliver a more sustainable future.

Our team on the M6 motorway extension at Guardsmill, United

Kingdom won a safety award in December 2008 from the United

Kingdom Highways Agency. Over 1,250,000 hours of work were

recorded without a reportable incident and there was a 12-month

period when the rolling accident-frequency rate was zero.

In addition, the team was commended for several innovative

improvements to ensure public safety during construction.

All employees in the countries covered by this CSR report work under

quality-management systems that detail the procedures to be

followed for managing our efforts in sustainable design and

consulting. 98% of our employees work under ISO-9001-certified

quality-management systems. This is our guarantee to our customers

that we pay close attention to design reviews, risk assessment and

project management. It is our ambition that all countries become

ISO-9001 certified in 2009.

We also actively ensure that our projects are managed with health

and safety in mind at all times. We focus not only on our own

employees but also on all participants and procedures related to our

projects.

In our CSR processes, our customers are important stakeholders and

we often ask for their opinions of our work. 98% of employees work

in countries covered by systems to measure customer satisfaction.

We believe that dialogue with customers is very important to ensure

that we are fulfilling our aspirations and identifying potential areas

for improvement. In Sweden we are recording a steady increase in

the percentage of customers who state that we are making a positive

contribution to their overall sustainable performance.

CSR and climate change – central

to anything we do

The climate change challenge can be met from two aspects:

mitigation through measures to reduce CO 2

emissions and

adaptation through enabling societies to deal with its effects, such as

shifting weather patterns and sea-level rises. Dealing with climate

change is vital to creating sustainable solutions for the future.

Taking CO 2

out of developments and reducing CO 2

emissions is

central to many of the types of projects we undertake. For instance,

designing low-energy or even no-energy houses, devising measures

to reduce energy consumption in industries and refurbished

buildings, advising on options for sources of renewable energy

including wind farms, waste to energy plants and extracting landfill

gas waste for use in transportation, designing biomass plants and

geothermic plants.

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Grontmij Denmark has provided consultancy on SIB Zero+, the first

+energy house in Denmark, which will deliver more energy than it

consumes. Designed for the average Danish family, it is 200 m 2 and is

modern and comfortable.

Mitigating the effects of climate change is deeply embedded in

Grontmij’s roots. The company was established to reclaim arable land

from the sea. With roughly half of the country below sea level, the

Netherlands is a living example of managing high sea and

ground-water levels and the risks of flooding from rivers. We are

currently working on a project to develop a ‘sand motor’, which will

add 20 m 3 of sand to the Delfland coastal system. The sand will be

redistributed through natural current processes. This will result in the

expansion and development of the coastline. The principle of

‘building with nature’ has never been applied before in the

Netherlands – or anywhere in the world – on the scale of the ‘sand

motor’. Grontmij has been given the assignment of drawing up an

extensive introductory memorandum for an environmental impact

study for this scheme.

We are lead consultant for Volvo Logistics Corporation in Gent in

the construction of the first CO 2

-free enterprise in Belgium and the

fi r s t C O 2

-free automotive company in the world. Our work has

resulted in a building with energy consumption four times lower

than that of an average new construction and ten times

lower than that of a standard office unit.

On a day-to-day basis in all countries Grontmij is involved in work to

mitigate such challenges through the establishment of dykes and

sustainable urban drainage, undertaking urban and rural planning in

harmony with the water environment and developing buildings and

infrastructure in a manner that is ‘waterproof’.

We work extensively across Europe on issues relating to water supply

– an area of increasing challenge as our weather patterns alter with

the changing climate. We are working across Europe to assist In the

implementation of the Water Framework Directive (WFD) and the

Birds and Habitats Directives

We have begun to establish common databases across the group

with ideas and solutions for many of the kinds of projects on which

we work. Through this initiative we will inspire our designers and

consultants to share best practices in sustainable projects. We also

want to be able to share these ideas with our customers to inspire

them to demand more sustainability and improve the solutions they

require. By working together in this way, we aspire to put climate

change and other sustainability measures firmly into project

planning and into the design of sustainable solutions.

We have selected a measure from the core financial indicators of

GRI guidelines to demonstrate our performance in this area.

Our full report is shown in the table on page 67.

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Corporate Social Responsibility

© Bram Goots

We are working with Scottish Water to study sites affected by

European legislation to determine the link between water regimes

potentially under stress due to climate change and the need for

sustainable supplies to homes and industry, for example

abstractions from the River Tweed.

CSR and society – displaying

good citizenship

Grontmij is first and foremost a business and as such aspires to

deliver value to its customers and thereby to its shareholders.

However, displaying good citizenship is also very important to

Grontmij. We are extremely integrated in the societies in which we

operate. We serve all public and private sectors as customers and we

are large employers in many of the regions in which we operate.

We strive to create value not only for our clients but also for the

ultimate users of the schemes on which we work, as well as for our

staff and the communities in which they live and participate.

Ultimately, we can include a large part of the population in our

operating countries as stakeholders in and beneficiaries of our

activities.

In Sweden, Grontmij has been involved for a number of years in a

Mentor Project together with a range of large Swedish partners.

The project works with young people to increase their awareness

and knowledge of technical professions and business practices.

Aged between 14 and 15 years, the participants are drawn from

families who originate far from Sweden. The selected students are

part of an extensive program, including excursions to some of

Grontmij’s largest projects in Stockholm: the North Link (transportation),

Stockholm Waterfront Conference (construction),

award-winning parks (landscape architecture) and Lidingö Bridge

(construction maintenance).

CSR and business standards –

ensuring integrity

Exercising a high degree of business integrity in all aspects of how

the company goes about its business is vital to Grontmij. All our

home markets have codes of conduct in place covering aspects such

as our responsibility to society, professional and management skills,

integrity, impartiality, fairness and corruption. A new groupwide

code of conduct conforming to the guidelines in the

International Federation of Consulting Engineers (FIDIC) Business

Integrity Management System (BIMS) has been adopted. These

requirements will be rolled out in 2009 across the group as each

country adopts a code of conduct in line with the overall group code.

In relation to human rights, Grontmij Denmark was one of the first

members of Global Compact, the United Nations’ initiative to

promote human rights and the millennium goals. We hope to initiate

full membership of Global Compact for the Grontmij Group in 2009.

Through this membership we demonstrate our support for the UN’s

human rights policies. In 2009, we also intend to adopt a human

rights and equal opportunity policy for Grontmij.

The importance of attention to business integrity is stressed in our

day-to-day business. For instance during all board meetings the topic

of integrity is addressed. Likewise, integrity issues are openly

debated with new staff to underline expected behaviour.

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Corporate Social Responsibility

We have selected a number of measures from the core social

indicators of the GRI guidelines to demonstrate our performance in

this area. The full report is shown on page 67.

CSR – adding value to the workplace

Grontmij cannot be responsible consultants and designers unless we

also undertake good environmental stewardship in our own internal

operations. We believe that in order to credibly help our customers

reduce their environmental footprint, we also need to manage and

document our own efforts, in spite of the fact that the very nature of

our business limits our direct environmental footprint. To ensure that

we do this, 90% of Grontmij employees work in countries where we

have fully implemented an environmental management system

according to ISO-14001. We are aiming for all countries covered in

this CSR report to be fully certified according to ISO-14001 by the end

of 2010.

We have selected a number of measures from the core environmental

indicators of the GRI guidelines to demonstrate our performance

in this area. Our full report is shown in the table on page 66.

Grontmij was commissioned by SenterNovem (the Dutch agency

for promoting sustainable development and innovation) to draw

up criteria for sustainable purchasing for use from 2010.

The criteria include working conditions, fair trade, child labour

and forced labour in product groups for sewer systems, cables and

pipes, pumping stations, wastewater treatment plants, sludge

processing, train rails and dams.

In Denmark we have launched campaigns to improve the sustainable

operation of our offices. Our goal is to reduce both our energy and

water consumption significantly over the coming years. Campaign

activities include replacement of ordinary light bulbs with low energy

bulbs, automatic lighting control, the replacement of old refrigerators

and freezers with low energy appliances as well as installation of

water saving toilets. More initiatives are in the pipeline. In 2008 we

achieved energy savings of more than 7% of the total energy

consumption – equivalent to 63,000 kg CO 2

.

In the United Kingdom we have begun the process of declaring

carbon budgets for each office location and in each operational area.

In this way we aim to devolve the management of our carbon

footprint to the business managers who have the operational control

over our emissions.

Grontmij Sweden has several ongoing initiatives aimed at positioning

us as the most attractive employer in the consultancy sector. We

strongly believe that competitive rewards and benefits is only part of

the solution. Rather, a strong corporate culture, personal influence on

the organisation’s development and broad career possibilities are

factors differentiating Grontmij from other companies. One initiative

is the Grontmij Academy. Launched in 2007, it comprises all in-house

training and development initiatives within Grontmij Sweden. It is

widely recognised as the initiative that has the most fundamental

impact on creating an attractive working environment.

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Corporate Social Responsibility

This is reflected in our employee surveys, in which more than 90% of

respondents reported job satisfaction and would recommend us as

their employer of choice.

Occupational health and safety is an important issue for Grontmij:

82% of our employees work in countries covered by an Occupational

Health and Safety Management System and 32% work in countries

certified according to the OHSAS-18001 standard. It is our ambition

to have all countries certified by the end of 2010.

We are working in Munich on Germany’s largest planned

geothermal plant with a generating capacity of 8 MW. The project

entails drilling to depths of approximately 4,000 m below ground

level. Our work commences when the hot water reaches the

surface, and in addition to the general planning assignment

comprises all the mechanical and electrical engineering together

with the control systems and the construction designs.

We have selected a measure from the core social indicators of GRI

guidelines to demonstrate our performance in this area. Our full

report is shown in the table on page 66.

Our employees are our greatest asset, and ensuring that they feel

that Grontmij is their preferred place of work is a key driver for our

business. 79% of employees work in countries with systems to

monitor employee satisfaction, which include questions on strategy,

integrity, career progression, management and how we perform

against a number of indicators. The results of the detailed surveys are

used to improve our ability to attract and retain employees; for

instance, we have initiated a focused management-development

programme in the Netherlands and training for all managers and

project managers in Denmark in the tools and methodologies

related to coaching-based leadership.

As a direct result of employee feedback, the United Kingdom

introduced a programme of technical-skills mapping for each

individual. This was linked to both their annual performance review

and the graduate and professional development programmes to

create a detailed career path for each member of staff.

CSR in the future –

continuous improvement

This year we have built on the CSR sections of our previous annual

reports by incorporating GRI standards and next year we will do

more in our programme of continuous improvement. Our first step

will be a group-wide systematic approach to reporting on CSR

indicators. Our objective will be the exchange of best practices

between home markets, sharing our inspiration to perform better on

the indicators chosen to represent our performance. We will prepare

CSR improvement plans that encompass the management improvement

plans that we prepare annually for our existing health and

safety, quality and environment standards.

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Corporate Social Responsibility

As a further demonstration of our commitment to continuous

improvement is our ambition to gradually increase our application

level under the GRI framework. In 2009, we aim to report at level B+,

adding more indicators to our public reporting and having that

report verified by an independent third party.

1994

ISO-9001 standards

begun 1 st certified 1996

1995

ISO-14001 standards

begun 1 st certified 1997

1996-1997

Intellectual capital

reporting

2000

Global compact adopted by

Grontmij Carl Bro

2005

OHSAS-18001 standards

begun 1 st certified 2006

2006

BIMS business integrity

code adopted Grontmij

Carl Bro

Code of conduct 1 st

applied

2008

CSR report prepared to GRI level C

Human rights/equal ops policy

adopted across Grontmij

2009

Global compact for Grontmij N.V.

GRI reporting level B+

CSR improvement plans incorporate

standard ISO improvement plans

Code of conduct adopted across Grontmij

2010

OHSAS-18001, ISO-14001 &

ISO -9001 adopted across Grontmij

We have said much about sustainability in this report. We have

shown that by ensuring that our clients can rely on us to deliver

solutions to their sustainability goals today, we can work with them

in the future to extend their horizons. We have shown our

commitment to reducing Grontmij’s environmental footprint per

employee over time and to adopting targets for these reductions in

line with global or national standards. We have stated that our aim is

to lead the industry in applying the principles and practices of

sustainable development and sound business integrity.

These are not idle words, through our commitment to our corporate

responsibilities as employers, as service providers and as the

stewards of a business that represents a sound investment, we

believe we are able to demonstrate true leadership in sustainability.

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Corporate Social Responsibility

Verslag van de Raad van Bestuur

Standard GRI-reporting – Performance indicators

Performance indicators - Environment

EN3 & EN4 - Energy consumption

We have included in this indicator all of our direct and indirect use of energy. For

our 2008 report we were not able to disaggregate our direct and indirect energy

use in all our offices and so we have reported one set of data. Our direct energy

consumption relates to the use of natural gas as a source of office heating, our

indirect energy consumption relates to the use of electricity to power all other

office operations. The data reported are the average amounts of energy used per

head in MWh in 2008 for our full time equivalent staff across all of our operations.

In future years we will report separately our direct and indirect energy use.

Average energy consumption per head, 2008

4.4 MWh

4.4 MWh

EN8 - Water use

Our water use relates directly to the use of water in our offices for consumption

and sanitation. All sources are from public supplies. The data reported are the

average amounts of water used per head in m 3 in 2008 for our full time

equivalent staff across all of our operations.

Average water use per head, 2008

6.3 m 3

EN16 - Total greenhouse emissions

Our reported CO 2

data are comprised of direct emissions, which are our emissions

from the use of vehicles for business use and direct energy consumption, and

indirect emissions which are emissions related to our use of electricity purchased

from energy suppliers. In our 2008 report we have not reported emissions from

rail or air travel; this data will be included in subsequent reports from 2009. The

data reported are the average emissions of CO 2

in tonnes per head in 2008 for our

full time equivalent staff across all of our operations.

Average CO 2

emissions per head, 2008

2.6 t

2.6 t

EN29 - Environmental impact of transportation

The environmental impact of transportation in Grontmij relates primarily to the

use of vehicles for moving people and some equipment between our offices and

other operational sites. For our 2008 report we have reported the average

kilometres driven per head for our full time equivalent staff across all of our

operations. In subsequent years we will extend our report to include rail and air

travel.

Average distance travelled by car per head, 2008

7,300 km

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Corporate Social Responsibility

Performance indicators – Labour practices

LA7 - Rates of injury, occupational disease, lost days and absenteeism and work

related fatalities by region

We have included in this indicator all of own staff and those contract staff for whom we

have operational responsibility in each of our home markets. Our reported data for

rates of injury and lost time are reported relative to 200,000 hours of operation which is

equivalent to 100 staff. The reported injury rates exclude minor injuries.

In Poland, Belgium and Germany we reported no injuries in 2008.

Our absentee rate across our home markets varied between 2.1% and 3.6% of staff time,

through benchmarking exercises we have determined that this is in line with our

industry sector.

We suffered no fatalities in our operations in 2008 and there were no confirmed cases

of occupational disease.

Rate per 100 staff

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Injury rate

Lost day rate

Performance indicators – Economic

EC1- Direct economic value

EC2 - Risks and opportunities due to climate

change

Our report on this indicator is contained in our financial report

At the level of our Executive Board and in all regional boards we take our responsibility

towards sustainability very seriously. Led by these boards we have clear policies and

activities aimed at ensuring our operations are as sustainable as we can make them.

We have also reshaped our consultancy activities to deliver a more sustainable solution

to our clients.

We have risen to the business challenge by increasing our offering of services directly

related to addressing the needs of clients in adaptation to, and mitigation of, climate

change.

We offer a number of skills and services in adaptation to climate change and in

particular these are associated with flood defence and river and coastal engineering,

sustainable water supply and development planning. We also have a wide range of skills

and services that will allow some mitigation of the increasing effects of our changing

climate. First among these is our approach to sustainable energy. As we move to an

economy based less on fossil fuel based energy we have to look more to renewable

supplies and increased energy efficiency and management.

In our analysis we believe there are no direct risks to our essential operations as a result

of climate change. Our principal offices are secure from adverse flooding, sea level rise

and changing weather patterns. There are no anticipated regulatory issues or

regulatory changes that relate to our operations that result from climate change.

The majority of our operations are conducted in temperate climates where there are

no recognisable risks to our staff due to climate change. Consequently, there are no

financial implications to Grontmij as a result of climate change.

Performance indicators - Compliance

EN28 – Compliance with environmental

laws and regulations

HR4 – Incidents of discrimination

SO4 – Incidents of corruption

SO8 – Compliance with laws and regulations

PR9 – Compliance with laws and regulations

concerning the use of services

PR2 – Compliance with regulations

concerning health and safety

In 2008 we had no incidents of non-compliance with laws or regulations in relation to

the environment, discrimination, corruption or product responsibility and we were not

subject to any fine or sanction relating to these issues.

In 2008 we had one incident of non-compliance with health and safety regulations

and voluntary codes; subsequent investigation found that we were not at fault in our

operations.

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Corporate Social Responsibility

Verslag van de Raad van Bestuur

Standard GRI-disclosures Detail Location in report Page

Strategy and Analysis

Reporting requirements

Section 1.1 CEO Statement CEO Statement as Forward to the Annual Report 8

Report of the Executive board 24

Organisational Profile

Section 2.1 Name of the organisation Grontmij N.V.

De Holle Bilt 22

3732 HM De Bilt

The Netherlands

Section 2.2 Services provided Mission, Objectives & Strategy 24-28

General developments by segment 36

Section 2.3 Operational structure Market developments by country 32

Section 2.4 Location of organisations’s Grontmij N.V.

headquarters De Holle Bilt 22

3732 HM De Bilt

The Netherlands

Section 2.5 Number of countries where Home markets and focus countries 27

the organisation operates

Section 2.6 Ownership and Information for shareholders 10, 11

legal form

Section 2.7 Markets served Market development by country and segment 32, 36

Section 2.8 Scale of the reporting Key figures 3

organisation Information for shareholders 10

Market development by country and segment 32, 36

Organisation and personnel 50

Financial statements 71

Section 2.9 Significant changes Foreword 8

during the reporting Market development by country and segment 32, 36

Financial performance 43

Financial statements 71

Section 2.10 Awards received in the Market development by country 32

reporting period

Report parameters

Section 3.1 Reporting period 2008 Calender year

Section 3.2 Date of most recent This is our first report to GRI

previous report

guidelines

Section 3.3 Reporting cycle Annual

Section 3.4 Contact point for questions Mrs S. van Nieuwkuyk,

regarding the report

Company Secretary

or its contents

Grontmij N.V.

De Holle Bilt 22

3732 HM De Bilt

The Netherlands

T +31 30 220 75 39

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Corporate Social Responsibility

Reporting requirements

Standard GRI-disclosures Detail Location in report Page

Section 3.5

Process for defining report

content, including:

CSR-governance, management and 58

Section 3.6 Boundary of the report stakeholder engagement

Section 3.7

Limitations on the scope or

boundary of the report

Basis for reporting on

The boundary set for this report excludes reporting GRI

Section 3.8 joint ventures etc. indicators for these arrangements

Project risks 39

Explanation of the effect of

Section 3.10

any re-statements of

information

This is our first CSR report to

Significant changes from GRI guidelines

Section 3.11

previous reports

Governance, commitments and engagements

Section 4.1 Governance structure of the Corporate Governance 52

organisation

Section 4.2 Role of chair of the highest Corporate Governance 52, 53

governance body

Section 4.3 Independent and/or This section is not applicable to Grontmij as we have

non-executive directors

a two tier board structure

Section 4.4 Mechanisms for shareholders CSR-governance, management and

and employees to stakeholder engagement 58

make recommendations

Section 4.14

List of stakeholder groups

engaged by the organisation CSR-governance, management and

Section 4.15 Basis for the selection stakeholder engagement 58

stakeholders

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GRONTMIJ | JAARVERSLAG 2008


Financial statements

Contents

Financial statements

Consolidated balance sheet as at 31 December 2008 72

Consolidated income statement 2008 73

Consolidated statement of recognised income and expenses 2008 74

Consolidated statement of cash flows 2008 75

Notes to the consolidated financial statements 76

Company balance sheet as at 31 December 2008 118

Company income statement 2008 119

Notes to the company financial statements 120

Other information

Statutory provisions on profit appropriation 125

Proposed profit appropriation 2008 125

Auditor’s report 126


Consolidated balance sheet as at 31 December 2008

In thousands of euros

Note 31 December 2008 31 December 2007

Goodwill 8 130,458 108,441

Intangible assets 9 71,613 60,335

Property, plant and equipment 10 40,480 43,348

Equity accounted investees 11 14,288 12,848

Other financial assets 12 24,588 11,100

Deferred tax assets 13 10,773 13,505

Non-current assets 292,200 249,574

Receivables 14 305,694 313,291

Cash and cash equivalents 16 29,450 33,654

Current assets 335,144 346,945

Total assets 627,344 596,519

Equity 135,291 123,947

Profit for the year 38,320 32,688

Total equity attributable to equity holders of Grontmij 173,611 156,635

Minority interest 1,332 568

Total equity 17 174,943 157,203

Loans and borrowings 21 53,362 64,690

Employee benefits 19 22,413 29,769

Provisions 22 23,943 25,425

Deferred tax liabilities 13 30,727 28,068

Non-current liabilities 130,445 147,952

Bank overdrafts 36,021 16,023

Loans and borrowings 21 26,947 21,498

Income taxes 4,054 9,542

Trade and other payables 23 253,681 242,797

Provisions 22 1,253 1,504

Current liabilities 321,956 291,364

Total equity and liabilities 627,344 596,519

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GRONTMIJ | ANNUAL REPORT 2008


Consolidated income statement 2008

In thousands of euros

Note 2008 2007

Revenue 27 844,478 768,011

Other operating income 27, 28 1,745 4,835

Total revenue 846,223 772,846

Third-party project expenses -182,254 -174,701

Net revenue 663,969 598,145

Employee expenses 29 504,528 456,907

Amortisation 9 6,948 6,087

Depreciation 10 11,389 12,160

Other operating expenses 30 95,602 90,503

Total operating expenses -618,467 -565,657

Net revenue less operating expenses 45,502 32,488

Share of results of equity accounted investees 11,27 4,534 14,451

Result on sale of equity accounted investees (net of income tax) 8,150 -

12,684 14,451

Operating result 27 58,186 46,939

Finance income 4,448 4,566

Finance expenses 11,913 10,566

Net finance expense 31 -7,465 -6,000

Profit before income tax 50,721 40,939

Income tax 32 -11,951 -9,272

Profit after income tax, but before result on sale of

discontinued activities 38,770 31,667

Result on sale of discontinued operations (net of income tax) - 1,053

Profit after income tax 38,770 32,720

Attributable to:

Equity holders of Grontmij 38,320 32,688

Minority interest 450 32

Profit after income tax 38,770 32,720

Earnings per share 18

Basic earnings per share (in euro) 2.16 1.84

Diluted earnings per share (in euro) 2.16 1.84

Average number of shares (basic and diluted) 17,764,920 17,764,920

GRONTMIJ | ANNUAL REPORT 2008 73


Consolidated statement of recognised income and expenses 2008

In thousands of euros

Note 2008 2007

Foreign exchange translation differences 17 -5,573 -1,481

Net change in fair value of available-for-sale financial assets 17 5,249 -

Net change in fair value of cash flow hedges 17 -1,479 647

Other 314 -

Net result recognised directly in equity -1,489 -834

Profit after income tax 38,770 32,720

Recognised income and expenses 37,281 31,886

Attributable to:

Equity holders of Grontmij 36,831 31,924

Minority interest 450 -38

Recognised income and expenses 37,281 31,886

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GRONTMIJ | ANNUAL REPORT 2008


Consolidated statement of cash flows 2008

In thousands of euros

Note 2008 2007

Profit after income tax 38,770 32,720

Adjustments:

Depreciation of property, plant and equipment 10 11,389 12,160

Amortisation of intangible assets 9 6,948 6,087

Impairment losses - 151

Share of results of equity accounted investees 11 -4,534 -14,451

Results on sale of property, plant and equipment -121 -84

Gain on sale of equity accounted investees (net of income tax) -8,150 -

Gain on sale of a subsidiary -368 -

Net finance expense 31 7,465 6,000

Income tax expense 32 12,206 9,272

24,835 19,135

Change in amounts due and from customers -185 -24,579

Change in other receivables 3,555 6,007

Change in provisions and employee benefits 19, 22 -9,845 -5,483

Change in trade and other payables -9,577 207

8,783 -4,713

Dividends received from equity accounted investees 33 5,765 17,062

Interest paid -11,283 -8,421

Interest received 4,560 2,977

Gain on sale of discontinued operations (net of income tax) - -1,053

Income taxes paid -12,051 -9,421

-18,774 -15,918

Net cash from operating activities 34,544 29,151

Proceeds from sale of property, plant and equipment 591 1,853

Proceeds from sale of a subsidiary 695 -

Acquisition of intangible assets 9 -2,707 -1,506

Acquisition of property, plant and equipment 10 -9,825 -11,546

Acquisition of subsidiaries (net of cash acquired) 6 -27,801 -3,543

Acquisition of equity accounted investees -8,279 -803

Disposal of equity accounted investees 10,545 -

Repayments from and acquisition of other investments, net -2,835 7,330

Proceeds from sale of discontinued operations (net of cash disposed of) - 9,179

Net cash used in investing activities -39,616 964

Dividends paid 17 -19,541 -13,323

Proceeds from the issue of loans and borrowings 21 31,499 3,392

Redemption of loans and borrowings 21 -29,722 -28,195

Net cash used in financing activities -17,764 -38,126

Movements in net cash position for the year -22,836 -8,011

Cash and cash equivalents 33,654 47,257

Bank overdraft -16,023 -21,257

Net cash as at 1 January 17,631 26,000

Effect of exchange rate fluctuations on cash held -1,366 -358

Cash and cash equivalents 29,450 33,654

Bank overdraft -36,021 -16,023

Net cash as at 31 December -6,571 17,631

GRONTMIJ | ANNUAL REPORT 2008 75


Notes to the consolidated financial statements

Contents

1 Reporting entity 76

2 Basis of preparation 76

3 Significant accounting policies 78

4 Determination of fair values 86

5 Financial risk management 86

6 Business combinations 88

7 Subsidiaries 89

8 Goodwill 90

9 Intangible assets 91

10 Property, plant and equipment 93

11 Equity accounted investees 94

12 Other financial assets 95

13 Deferred tax assets and liabilities 96

14 Receivables 97

15 Amounts due from and due to customers 97

16 Cash and cash equivalents 97

17 Total equity 98

18 Earnings per share 99

19 Employee benefits 99

20 Share-based payments 102

21 Loans and borrowings 102

22 Provisions 104

23 Trade and other payables 105

24 Financial instruments 105

25 Leases 109

26 Liabilities not recognised in the consolidated balance sheet 109

27 Segment reporting 110

28 Other operating income 113

29 Employee expenses 113

30 Other operating expenses 113

31 Finance income and expenses 114

32 Income tax 114

33 Related parties 115

34 Subsequent events 117

1. Reporting entity

The reporting entity is Grontmij N.V. (´Grontmij´), a company domiciled in the Netherlands.

The financial statements include the consolidated financial statements and the separate financial statements of Grontmij. The consolidated

financial statements comprise Grontmij and its subsidiaries, all entities which Grontmij directly or indirectly controls (together referred to as the

‘Group’).

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European

Union (hereinafter referred to as: ‘EU-IFRSs’). As the results of Grontmij are included in the consolidated income statement, the Company income

statement is, in accordance with Part 2:402 of the Dutch Civil Code, provided in abbreviated format.

The financial statements were authorised for issue by the Executive Board on 11 March 2009.

2. Basis of preparation

Basis of measurement

The financial statements have been prepared on the historical cost basis. In case assets or liabilities are measured at fair value, it is indicated as

such in the notes to the concerning items.

Functional currency and presentation currency

The functional currency of Grontmij is the euro. All amounts in these financial statements are presented in thousands of euros, rounded to

the nearest thousand, unless stated otherwise.

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Notes to the consolidated financial statements

Presentation

Grontmij has opted for early adoption of IFRS 8, which replaces IAS 14 Segment Reporting for periods beginning on or after 1 January 2009.

Secondary segmentation is, consequently, as of 2008 no longer included in the notes to the consolidated financial statements. Further reference

is made to note 27.

In addition, as of 2008, Grontmij has changed the presentation of certain financial information in its financial statements. These changes in

presentation do not in any way constitute a change in accounting policies, nor do they affect results or equity in 2008 or previous periods.

The changes can be summarised as follows:

o all results from equity accounted investees are presented as part of operating result in the (consolidated) income statement as this

presentation reflects Grontmij´s business model more properly;

o as of 2008, also amounts due from and to customers relating to service contracts are, on a contract-for-contract basis, presented broken down

in receivables and liabilities. Until 2007 the majority thereof were netted in the presentation as relevant information was not available.

The effect of the change to a broken down presentation is an increase of the balance sheet total by € 73.8 million as at 31 December 2008 and

by € 67.3 million as at 31 December 2007. This changes does not affect shareholders´ equity, results and cash flows for 2008 or other periods;

o amounts due from and to customers are no longer disclosed on the face of the balance sheet but are included in the line Receivables to

the extent they represent unbilled revenue at the reporting date, and in Trade and other payables to the extent they represent advances.

Comparative amounts have been reclassified to conform to the current year presentation. The changes do not affect results, shareholders´ equity

or cash flows in the concerning years.

Use of estimates and judgements

The preparation of financial statements in conformity with EU-IFRSs requires the Executive Board to make judgements, estimates and

assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expenses.

The estimates and underlying presumptions are based on past experiences and on various other factors which may be assumed to be reasonable

based on the given circumstances. The results of this process form the basis for the assessment of the carrying amount of assets and liabilities

that may be difficult to identify from other sources. The actual results may differ from these estimates.

Information regarding the most important estimates in the financial statements is included in the following notes:

Note

6 Business combinations

8 Calculation of the realisable value of cash flow generating units that contain goodwill

9, 10 Economic life of property, plant & equipment and intangible assets

13 Utilisation of deferred tax assets

14,15 Revenue recognition

19 Measurement of defined benefit obligations and other employee benefits

20 Measurement of non-cash share based payments

22 Aftercare liabilities

24 Measurement of financial instruments

Important estimates and underlying presumptions are periodically reviewed. Revised estimates are incorporated in the year during which

the estimate was revised, if the revision impacts only on that year, or else in the year under review and future periods, if the revision impacts both

the year under review and on future periods.

GRONTMIJ | ANNUAL REPORT 2008 77


Notes to the consolidated financial statements

3. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods accounted for in these consolidated financial statements and

by all entities included in the consolidation.

Grontmij has opted for early adoption of IFRS 8, which replaces IAS 14 Segment Reporting for periods beginning on or after 1 January 2009.

The Executive Board organises the Group around differences in geographical areas. In this respect, the Group recognizes six geographical

segments and Holdings & Eliminations. The latter reconciles the financial data as reported in the six segments to the consolidated balance sheet

and consolidated income statement and includes the Group’s operations in Hungary and Turkey as well as the amortisation expense of intangible

assets relating to business combinations. The latter is in order to show the geographical segments’ operational results in the segment reporting.

The Group’s operations in Poland are reported in the segment Germany & Poland; the Group’s operations in Ireland are reported in the segment

UK & Ireland. The Group’s operations in a number of other countries – in total less than 3% of the Group’s revenue and assets – are reported in

the segments whose management is primarily responsible for their performance.

Consolidation principles

Capital interests

Grontmij directly or indirectly holds interests in other companies: subsidiaries and equity accounted investees (joint ventures and associates).

Subsidiaries

With regard to subsidiaries, Grontmij has the power, directly or indirectly, to govern their financial and operational policies. In assessing the level

of control, account is taken of the potential voting rights which may be exercised or converted.

Equity accounted investees

Joint ventures concern co-operation agreements whereby the Group and one or more other parties undertake an economic activity in the form

of an enterprise, in respect of which they exercise joint control only, requiring unanimous consent for strategic financial and operating decisions.

Associates are those entities in which the Group has significant influence on their financial and operating policies but not control, nor in respect

of which control is exercised jointly: the other parties involved have the power to jointly exercise control. Significant influence is presumed to

exist when the Group holds between 20 and 50 percent of the voting power.

Scope of consolidation

The consolidation includes the financial data of Grontmij and its subsidiaries. The financial data of subsidiaries are included in the consolidated

financial statements as from the date on which they come under Grontmij´s control to the date on which Grontmij´s control has ceased.

Joint ventures and associates are not consolidated. They are accounted for using the equity method; the consolidated financial statements

include the Group’s share of results and equity movements of equity accounted investees, after adjustments to align their accounting policies

with those of the Group, from the date that joint control or significant influence commences until the date that joint control or significant

influence has ceased.

Method of consolidation

The financial statements of the subsidiaries are consolidated based on the integral method, whereby third party interests are accounted for

separately.

Intra-group balances, intra-group transactions and any unrealised profits from intra-group transactions are eliminated in the consolidation.

Unrealised profits from transactions with equity accounted investees are eliminated, to the extent of the Group’s interest in the entity concerned.

Unrealised losses are eliminated in the same way as unrealised profits, but only to the extent that there is no evidence of impairment.

Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the functional currencies at exchange rates at the dates of the transactions. The Group uses

periodically fixed average exchange rates that adequately approximate the exchange rates prevailing at the transaction dates.

Monetary assets and liabilities

Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevailing on the balance sheet date.

The exchange differences arising are recognised in profit or loss.

Non-monetary assets and liabilities

Non-monetary assets and liabilities denominated in foreign currency which are stated at historical cost are translated at the exchange rate

prevailing at the date of transaction. Non-monetary assets and liabilities in foreign currency recognised at their fair value are translated at

the exchange rates that were applicable at the date on which the value was determined.

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Notes to the consolidated financial statements

Operations of entities having a functional currency other then the euro

The assets and liabilities of such entities including fair value adjustments on consolidation are translated at the exchange rate prevailing at

the balance sheet date. Income and expenses of such entities are translated at the exchange rate, prevailing at the date of translation.

The Group uses periodically fixed average exchange rates which approximate the exchange rates on transaction dates effectively.

Exchange differences arising from this method as at the balance sheet date are recognised directly in the translation reserve, part of equity.

In the reporting period that such an entity is disposed of, the relating accumulated exchange differences are transferred from the translation

reserve to profit or loss.

Financial instruments

Non-derivative financial instruments

Non-derivative financial instruments comprise loans and receivables, amounts due from and to customers, trade and other receivables, cash and

cash equivalents, loans and borrowings, and trade and other payables.

These are recognised initially at fair value: non-derivative financial instruments not at fair value through profit or loss are recognised initially at

fair value plus any directly attributable transaction costs.

Amounts due from and to customers are stated at the accumulated recognised revenue less progress billings and advance payments and,

to the extent necessary, less a provision for expected losses. Amounts due from customers are presented as part of receivables. Amounts due to

customers are presented as part of trade and other payables.

Subsequent to initial recognition, loans and receivables and other non-derivative financial instruments are measured on the reporting date at

amortised cost, which is determined by use of the effective interest method.

Held-to-maturity investments

If the Group has the positive intent and ability to hold investments to maturity, then they are classified as held-to-maturity. Held-to-maturity

investments are measured at amortised cost using the effective interest method, less any impairment losses.

Financial lease

Long term leases where Grontmij transfers substantially all the risks and rewards resulting from ownership of an asset to a lessee are classified

as finance leases. A receivable at an amount equal to the present value of the lease payments, using the implicit interest rate, including any

guaranteed residual value, is recognised at the reporting date.

Available-for-sale financial assets

Subsequent to initial recognition they are measured at fair value and changes therein, other than impairment losses and foreign currency

differences on available-for-sale monetary items, are recognised directly in equity. When an investment is derecognised, the cumulative gain

or loss in equity is transferred to profit or loss.

Derivative financial instruments

Where considered necessary, the Group uses derivative financial instruments to hedge its foreign currency and interest rate risk exposures.

Embedded derivates are separated from the host contract and accounted for separately if the economic characteristics and rules of the host

contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would

meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial

recognition, derivatives are measured at fair value and changes therein are accounted for as described below.

Cash flow hedges

When a derivative financial instrument is designated as a cash flow hedge, the effective part of any gain or loss on the derivative financial

instrument is recognised directly in equity. The ineffective part of any gain or loss is recognised immediately in the income statement.

The associated cumulative gain or loss is removed from equity and recognised in the income statement in the same period or periods during

which the hedged transaction affects the income statement.

When a derivative financial instrument or hedge relationship no longer meets the criteria for hedge accounting, expires or is sold, but the hedged

transaction still is expected to occur, the cumulative unrealised gain or loss remains in equity. The cumulative gain or loss will be recognised in

the income statement in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected to take

place, the cumulative unrealised gain or loss will be immediately recognised in the income statement.

GRONTMIJ | ANNUAL REPORT 2008 79


Notes to the consolidated financial statements

Share capital

Grontmij´s share capital as at 31 December 2008 comprises common shares only, at a nominal value of € 0.25 per share. The share capital

is classified as equity.

Intangible assets

Research expenditure

Expenditure in respect of research activities for the purpose of obtaining new knowledge of a scientific or technological nature is recognised

in the income statement as an expense as incurred.

Development expenditure

Expenditure in respect of development activities is capitalised and subsequently, at reporting date, measured at cost less accumulated

amortisation and impairment losses.

The development costs are, however, capitalised only when it is likely that the future economic benefits from the asset will accrue to the Group

and the costs can be reliably determined. Expenditure capitalised in such case comprise direct labour and indirect costs which are directly

allocatable as well as direct cost of material and third-party expenses. Finance expenses related to the development are recognised in the income

statement as an expense as incurred.

Trade names

Trade names concern the expected value of established brand names acquired in business combinations and are measured at cost, being the fair

value at acquisition date, less accumulated amortisation and impairment losses.

Customer relations

Customer relations concern the expected value of the sales attributable to customer relationships of acquired businesses at the date of

acquisition, and are measured at cost, being the fair value at the acquisition date, less accumulated amortisation and impairment losses.

Order backlogs

Order backlogs concern the remaining expected value of orders of acquired businesses at the date of the acquisition, and are measured at cost,

being the fair value at acquisition date, less accumulated amortisation and impairment losses.

Other intangible assets

The other intangible assets are stated at cost, less accumulated amortisation and impairment losses.

Subsequent expenditure

Expenditure for intangible assets after initial recognition is capitalised only when it increases the future economic benefits embodied in

the specific asset to which it relates. All other expenditure, including internally generated goodwill and trade names, are recognised in

the income statement as incurred.

Amortisation

Amortisation of intangible assets is recognised in the income statement on a straight-line basis over the estimated useful lives of the intangible

assets.

The estimated useful life of trade names, customer relations and order backlogs is determined individually upon each acquisition and are

dependent on expectations upon first time recognition.

Goodwill

Goodwill concerns the difference between the consideration for a business combination and the net fair value of acquired identifiable assets,

liabilities and contingent liabilities.

Goodwill is stated at cost less accumulated impairment losses, if any. An impairment loss is recognised when the realisable value of the cash

generating unit to which the goodwill pertains, is lower than its carrying value. Negative goodwill arising on an acquisition is recognised in

the income statement directly.

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Notes to the consolidated financial statements

Property, plant and equipment

General

Property, plant and equipment are measured at cost, less accumulated depreciation and impairment losses. Cost includes expenditure that is

directly attributable to the acquisition of the asset. Property, plant and equipment which on or before 1 January 2004 were measured at fair value

are measured on deemed cost, the revaluated value as per the date of the valuation concerned. Property, plant and equipment under

construction are stated at cost until construction is complete, at which time it is reclassified under the relevant category.

At the moment an obligation arises in regard to aftercare liabilities, a provision is recognised for the present value of the total amount of

the future liabilities. At the same time, an amount equal to the amount of the liability is capitalised as part of the cost of the asset.

Gains and losses on disposal of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying

amount and are recognised as part of other operating income in profit or loss.

Subsequent expenditure

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that

the future economic benefits embodied within the concerning part will flow to the Group and its cost can be measured reliably. The carrying

amount of the replaced part is derecognised.

The costs of day-to-day maintenance of property, plant and equipment are recognised in the income statement as incurred.

Financial leases

Leases in terms on which the Group assumes substantially all the risks and rewards of ownership are classified as financial leases. Upon initial

recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments

at inception of the lease, less accumulated depreciation and impairment losses.

Depreciation

The depreciation of landfill sites is systematically recorded in line with waste units disposed.

Depreciation of other property, plant and equipment is recognised in the income statement on a straight-line basis over the estimated useful

lives. In case an item of property, plant and equipment consists of parts with an unequal useful life, these are depreciated separately.

Land is not depreciated.

Impairment

General

The carrying amount of the Group’s assets, with the exception of deferred tax assets, is reviewed as per every reporting date to determine

whether there is an indication that it is impaired. If such an indication is established, the fair value of the asset is estimated. For goodwill and

intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date,

irrespective of indications that they are impaired.

The recoverable amount of an asset represents the greater of the recoverable amount less sale costs and the value in use. In determining the

value in use, the present value of the estimated future cash flows is calculated on the basis of a discount factor before tax which reflects the

current market estimates of the time value of money and the specific risk to the asset. An impairment loss is recognised once the carrying

amount of an asset or its cash generating unit exceeds the recoverable amount.

Impairment losses are recognised in the income statement. Any cumulative loss in respect of an available-for-sale financial asset recognised

previously in equity is transferred to profit or loss.

Reversal of impairment losses

Impaired assets are assessed on the reporting date for evidence that impairment losses recognised in previous years have lessened or do no

longer exist. An impairment loss is in that case reversed only as far as the carrying amount of the asset on the reporting date does not exceed

the carrying amount that would have been determined in the case no impairment loss was ever recognised.

Impairment losses in respect of goodwill are never reversed.

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Notes to the consolidated financial statements

Equity accounted investees

All joint ventures and associates are recognised initially at cost and are measured based on the ‘equity’ method.

From the moment the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including

any receivables) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has a legal obligation

to settle the losses.

Employee benefits

Pension schemes

The Group has granted pension rights in the form of defined contribution plans and defined benefit plans.

Defined contribution plans

A defined contribution plan is a plan relating to employee benefits after retirement for which the Group pays contributions to the entity that

administers the concerning plan, and for which no legal or constructive obligation exists to pay any further contributions.

Obligations for contributions to defined contribution pension plans are recognised as personnel expenses in profit or loss when they are due.

Defined benefit plans

Defined benefit plans concern all post-employment plans, other than defined contribution plans. The Group’s net obligation in respect of defined

benefit pension plans is calculated separately for each plan; these calculations are performed by qualified actuaries in accordance with the

‘projected unit credit’ method.

For this calculation the amount of future benefits that employees have earned in return for their services in the current and prior periods are

estimated. These benefits are discounted to determine their present value, and any unrecognised past service costs and the fair value of the plan

assets are deducted.

The discount rate used is the yield on the balance sheet date for high quality corporate bonds whose maturity is approaching the terms of the

Group’s liabilities. The fair value of the plan’s assets is subsequently deducted.

When the calculation results in a benefit for the Group, the recognised asset is limited to the total of any unrecognised actuarial losses and

past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future

contributions to the plan. An economic benefit is available to the Group if it is realizable during the life of the plan, or on settlement of the plan

liabilities.

Actuarial gains and losses that arise are recognised in the income statement over the expected average remaining working lives of the employees

participating in the plan, to the extent that any cumulative unrecognised actuarial gains or losses exceed 10% of the greater of the present value

of the defined benefit obligation and the fair value of plan assets. Otherwise the actuarial gain or loss is not recognised.

Pension expenses are accounted for under personnel expenses.

Improvement, reducement or settlement of pension plans

When the pension rights arising from a plan are improved, the portion of the increased pension rights pertaining to the employees’ period of

service that has expired is recognised linearly as expenditure in the income statement over the average period until such time as the pension

rights become vested.

Where the entitlements vest directly, the expenditure is recognised directly in the income statement.

When the pension rights arising from a scheme have been reduced or settled, the profit or loss arising from the curtailment or settlement is

recognised in the income statement at the moment the curtailment or settlement occurs. In the case of a partial curtailment, a pro rata portion

of the previously unrecorded pension costs for expired periods of service and unrecognised actuarial profits and losses are accounted for in the

income statement.

Other long-term employee benefits

Other long-term employee benefits are measured at the actuarial present value of the liability. The discount rate used is the yield on the balance

sheet date for high level corporate bonds whose maturity is approaching the terms of the Group’s liabilities. Any actuarial gains and losses are

recognised in the income statement in the period in which they arise.

Share based payments

The fair value of value-dependent variable remuneration that has been granted to the Executive Board is accrued over the period to the moment

an unconditional right on payment has been vested. The valuation of the accrual is reviewed on every reporting date.

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Notes to the consolidated financial statements

Provisions

General

A provision is recognised in the balance sheet when the Group has a legal or constructive obligation, that can be measured reliably, as a result of

a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are

determined by discounting the expected future cash flows at a pre-tax rate that reflects current market estimates of the time value of money and,

where necessary, of the specific risk pertaining to the liability.

Aftercare liabilities

At the moment an obligation arises in regard to aftercare liabilities, a provision is recognised for the present value of the total amount of

the future liabilities.

Revenue

The major part of the Group’s revenue relates to contracts for services in the areas of design, consultancy, project management, engineering and

contracting.

Revenue from services based on fixed-price contracts is recognised in profit or loss pro rata of the services rendered on the reporting date in

proportion to the total of the contracted services; the stage of completion is assessed on the reporting date by reference to surveys of actual

work performed. Revenue from services based on cost plus contracts is recognised in profit or loss pro rata of the time spent and based on

the contractual net hourly rates.

Contract revenue include the initial amount agreed upon plus any variations in contract work, claims and incentive payments to the extent that it

is probable they will result in revenue and can be measured reliably. An expected loss on any contract is recognised immediately in profit or loss.

Costs incurred in the period prior to securing a signed contract are recognised directly in profit or loss.

Revenue from contract work relates to assignments for the construction of assets. Revenue from contract work and the relating expenses are

recognised in profit or loss in proportion to the stage of completion of the contract on the reporting date; the stage of completion is determined

based on the technical completeness proportionate to the project as a whole. An expected loss on any contract is recognised immediately in

profit or loss. Costs incurred in the period prior to securing a signed contract are recognised directly in profit or loss.

Other operating income

Other operating income concerns income not related to the Group’s core activities such as gains on the sale of property, plant and equipment.

Third party project expenses

Third party project expenses represent the total costs of services and materials which relate directly to contracts carried out for the Group’s

customers.

Operating lease payments

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease.

Lease incentives received are recognised as an integral part of the total lease expenses.

Finance income and expense

Finance income comprises interest income on cash at banks and from loans and receivables (including available-for-sale financial assets), positive

changes in the fair value of financial assets at fair value through profit or loss and net foreign currency gains. Interest income is recognised in

the income statement as it accrues, using the effective interest method.

Finance expense comprises the interest due on loans and borrowings, interest added to provisions, negative changes in the fair value of financial

assets at fair value through profit or loss, impairment losses on financial assets and net foreign currency losses.

All finance expenses are calculated using the effective interest method. Currency exchange gains and losses are recognised in profit or loss on

a net basis.

GRONTMIJ | ANNUAL REPORT 2008 83


Notes to the consolidated financial statements

Income taxes

Income taxes comprises current and deferred tax. Income taxes are recognised in profit or loss except to the extent that it relates to items

recognised directly in equity, in which case they are recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date,

and any adjustment to tax payable in respect of previous years.

Deferred tax is not recognised for the following temporary differences:

o the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor

taxable profit;

o differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the

foreseeable future.

Deferred tax is recognised using the balance sheet method providing for temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the carrying amounts used for taxation purposes.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that

have been enacted or substantially enacted at the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be

utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.

Earnings per share

Grontmij presents basic and diluted earnings per share (EPS) data. Basic EPS is calculated by dividing the profit or loss attributable to ordinary

shareholders of Grontmij by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting

the profit or loss attributable to ordinary shareholders of Grontmij and the weighted average number of ordinary shares outstanding for the

effects of all dilutive potential ordinary shares.

Cash flow statement

The cash flow statement is prepared in accordance with the indirect method and constitutes an explanation of the change in net cash, defined

as cash and cash equivalents less bank overdrafts. In the cash flow statement, a differentiation is made between cash flows from operating,

investing, and financing activities.

Considering the nature of the Group’s operations, the share in the results of equity accounted investees and dividends received is regarded as

part of cash flow from operating activities.

Cash flows in other currencies then the euro are translated at the exchange rates, prevailing against at the date of transaction. The Group uses

periodically fixed average exchange rates which effectively approximate the exchange rates on transaction dates.

Segment reporting

A segment is a distinguishable component of the Group that is engaged in providing services within a particular economic environment

(geographical segment). The business segments are determined based on the Group’s management and internal reporting structure.

Inter-segment pricing is determined on an arm’s length basis.

Results, assets and liabilities of a segment include items directly attributable to a segment as well as those that can be allocated on a reasonable

basis.

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Notes to the consolidated financial statements

New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2008, and have

consequently not been applied in preparing these consolidated financial statements. The introduction of IAS 23 revised is the most relevant to

the Group.

o revised IAS 23 ‘Borrowing Costs’ (EU endorsed) removes the option to expense borrowing costs and requires that an entity capitalise borrowing

costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The revised IAS

23 will become mandatory for the Group’s 2009 financial statements. In accordance with the transitional provisions the Group will apply the

revised IAS 23 to qualifying assets for which capitalisation of borrowing costs commences on or after the effective date. Therefore there will be

no impact on prior periods in the Group’s 2009 consolidated financial statements;

o revised IAS 1 Presentation of Financial Statements (2007) (EU endorsed) introduces the term total comprehensive income, which represents

changes in equity during a period other than those changes resulting from transactions with shareholders in their capacity as owners. Total

comprehensive income may be presented in either a single statement of comprehensive income (effectively combining both the income

statement and all non-owner changes in equity in a single statement), or in an income statement and a separate statement of comprehensive

income. Revised IAS 1, which becomes mandatory for the Group’s 2009 financial statements, is expected to have a significant impact on

the presentation of the consolidated financial statements. The Group plans to provide total comprehensive income in a single statement of

comprehensive income for its 2009 consolidated financial statements;

o amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements – Puttable Financial Instruments

and Obligations Arising on Liquidation (EU endorsed) requires puttable instruments, and instruments that impose on the entity an obligation

to deliver to another party a pro rata share of the net assets of the entity only on liquidation, to be classified as equity if certain conditions

are met. The amendments, which become mandatory for the Group’s 2009 consolidated financial statements, with retrospective application

required, are not expected to have any impact on the consolidated financial statements;

o revised IFRS 3 Business Combinations (2008) incorporates the following changes that are likely to be relevant to the Group’s operations:

The definition of a business has been broadened, which is likely to result in more acquisitions being treated as business combinations:

Contingent consideration will be measured at fair value, with subsequent changes therein recognised in profit or loss. Transaction costs, other

than share and debt issue costs, will be expensed as incurred; Any pre-existing interest in the acquiree will be measured at fair value with

the gain or loss recognised in profit or loss; Any non-controlling (minority) interest will be measured at either fair value, or at its proportionate

interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis. Revised IFRS 3, which becomes

mandatory for the Group’s 2010 consolidated financial statements, will be applied prospectively and therefore there will be no impact on prior

periods in the Group’s 2010 consolidated financial statements;

o amended IAS 27 Consolidated and Separate Financial Statements (2008) requires accounting for changes in ownership interests by the Group

in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the Group loses control of a subsidiary, any interest

retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. The amendments to IAS 27,

which become mandatory for the Group’s 2010 consolidated financial statements, are not expected to have a significant impact on the

consolidated financial statements;

o amendment to IFRS 2 Share-based Payment – Vesting Conditions and Cancellations (EU endorsed) clarifies the definition of vesting conditions,

introduces the concept of non-vesting conditions, requires non-vesting conditions to be reflected in grant-date fair value and provides the

accounting treatment for non-vesting conditions and cancellations. The amendments to IFRS 2 will become mandatory for the Group’s 2009

consolidated financial statements, with retrospective application. The Group has not yet determined the potential effect of the amendment;

o IFRIC 16 Hedges of a Net Investment in a Foreign Operation discusses a number of issues in relation to hedging currency risks on foreign

operations (net investment hedges). IFRIC 16 specifically confirms only the risk from differences between the functional currencies of the

parent and the subsidiary can be hedged. Additionally, currency risks can only be hedged by every (direct or indirect) parent company, as long

as the risk is only hedged once in the consolidated financial statements. IFRIC 16 also determines the hedge instrument of a net investment

hedge can be held by every group company, except for the foreign operation itself. IFRIC 16 becomes mandatory for the Group’s 2009

consolidated financial statements with prospective application. The Group has not yet determined its potential effect.

GRONTMIJ | ANNUAL REPORT 2008 85


Notes to the consolidated financial statements

4. Determination of fair values

A number of the Group’s accounting policies and disclosures require the determination of fair value.

Property, plant and equipment

The fair value of property, plant and equipment recognised in the course of a business combination is based on market value.

The market value of real estate is the value for which the asset on the valuation date can be sold in a businesslike, arm’s length transaction, as

estimated by a third party. The market value of other property, plant and equipment is based on market prices of comparable assets.

Intangible assets

Trade names

The fair value of trade names acquired in a business combination is based on the discounted estimated royalty payments that have been avoided

as a result of the trade name being owned. The determination of the fair value is based on reasonable assumptions and estimations of the

economic situation during the lifetime of the asset.

Order backlogs

The fair value of order backlogs acquired in a business combination is based on the future economic benefits associated with the order backlog

that are due to the Group. The determination of the fair value is based on reasonable assumptions and estimations of the economic situation

during the lifetime of the asset.

Customer relations

The fair value of customers relations acquired in a business combination is based on the sales that are attributable to customer relationships and

their associated attrition rates at the date of acquisition and the future economic benefits associated with the customer relationship that are due

to the Group. The determination of the fair value is based on reasonable assumptions and estimations of the economic situation during

the lifetime of the asset.

Receivables

The fair value of receivables, excluding amounts due from customers for contract work, is estimated at the present value of future cash flows;

these are where applicable discounted, using the market interest at the reporting date.

Derivative financial instruments

The fair value of currency exchange contracts is based on the quoted market price, when available. If this market price is not available, the fair

value is estimated by discounting the difference between the contractual and the actual future price for the remaining duration, based on a risk

free interest rate (Dutch state bonds).

Brokers’ quotes are used in determining the fair value of interest rate swaps. These quotes are tested for reasonableness by use of techniques

which are based on discounted cash flows on the basis of the terms and conditions of the contract, using the market interest rate for similar

instruments on the reporting date.

Non-derivative financial liabilities

The fair value of non-derivative financial liabilities is calculated on the basis of the present value of future redemptions and interest payments,

discounted at the market interest as per reporting date. For finance leases, the market interest on the reporting date is determined with reference

to similar lease contracts. Where applicable, further information about the method and the assumptions made in determining fair values is

disclosed in the note to that asset or liability.

5. Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

o credit risk;

o liquidity risk;

o market risk.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for

measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these

consolidated financial statements. The Executive Board has overall responsibility for the establishment and oversight of the Group’s risk

management framework. The Group’s risk management policy is aimed at the long-term sustainable management of its business activities

and limiting or, where possible, appropriate hedging of the risks.

The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment

in which all employees understand their roles and obligations. The Group’s Audit Committee oversees how management monitors compliance

with the Group’s risk management procedures.

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Notes to the consolidated financial statements

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations,

and arises principally from the Group’s receivables from customers, both before and after billing.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s

customer base, including the default risk of the industry and country, in which customers operate, has less of an influence on credit risk. The large

number of principals is a major reason for the absence of concentration of credit risk.

A credit policy has been established under which important new customers are analysed individually for creditworthiness before the standard

payment and delivery terms and conditions are offered by the Group’s entities. The major part of the Group’s customers has been transacting

with the Group for over four years, and losses have occurred infrequently.

The Group does not require collateral in respect of trade and other receivables.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade receivables. The main

component of this allowance is a specific loss component that relates to individually significant exposures.

Liquidity risk

The liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities

when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group’s policy is to provide financial guarantees only to wholly-owned subsidiaries, when deemed necessary.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income

or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures

within acceptable parameters, while optimising the return.

Currency risk

The Group’s sensitivity to changes in foreign currency exchange rates is relatively limited. A major part of both the Group’s income and expenses

is denominated in euro. Further, most of the income of the Group’s entities that have a functional currency other than the euro is used to offset

expenses denominated in the same currency.

Interest rate risk

The Group uses interest rate swaps to hedge its interest rate risk exposure arising from corporate financing activities, where considered

necessary. Interest rate swaps are measured at fair value, with changes in fair values booked through profit or loss unless the derivative is

designated and effective as hedge of future cash flows, in which case changes are booked in equity.

Capital management

The Executive Board’s policy is to maintain a strong capital base so as to maintain investor, principal, creditor and market confidence and to

sustain future development of the business. The Executive Board also monitors the level of dividends to ordinary shareholders.

The Group’s policy relating to capital management did not change in the year under review.

GRONTMIJ | ANNUAL REPORT 2008 87


Notes to the consolidated financial statements

6. Business combinations

In the course of 2008, the Group acquired the following businesses:

Date of

acquisition

Acquired

share

CANOR International kft., Budapest Hungary 1 January 75%

Stoel & Partners Holding B.V, Zwolle The Netherlands 17 March 100%

Whitelaw Turkington Ltd., London United Kingdom 28 February 100%

Trett Consultancy Ltd., London United Kingdom 1 April 100%

Roger Preston & Partners LLP, Maidenhead United Kingdom 5 April 100%

KPI System, Katowice Poland 30 April 100%

Teldako AB, Sundsvall Sweden 30 April 100%

Groenplanning B.V., Maastricht The Netherlands 1 December 100%

In addition, DPR Ingeniørerne, Hjorring, Denmark was acquired as per 1 April 2009 by means of an asset deal.

The shares in the above businesses have been acquired for a total expected consideration of € 46,209,000. The acquisitions of Trett Consultancy

and Roger Preston & Partners represented at a total expected consideration in excess of € 15 million each the largest part thereof. The total

expected consideration relating to the seven other acquisitions amounts to € 11,285,000.

In thousands of euros

The total effect on the Group’s assets and liabilities relating to the acquisitions can be summarized as follows:

Carrying values at Fair value Fair values at

date of aquisition adjustments date of acquisition

Intangible assets 2,378 15,274 17,652

Property, plant & equipment 965 - 965

Other financial assets 64 - 64

Current assets 16,698 -280 16,418

Cash and cash equivalents less bank overdraft 9,739 - 9,739

Deferred taxes -4 -165 -169

Non-current liabilities -1,002 - -1,002

Current liabilities -18,242 -100 -18,342

Identifiable assets and liabilities 10,596 14,729 25,325

Acquired share 25,245

Preliminary goodwill 20,964

Expected consideration 46,209

Expected to be paid in future years -8,669

Acquired net cash -9,739

Net cash outflow 27,801

In relation to the 2008 acquisitions, a relatively low amount of deferred taxes has been recognised due to the fact that the major part of

the acquired intangible assets is tax depreciable.

The goodwill recognised on acquisitions is attributable mainly to the skills and technical talent of the acquired businesses’ workforce and

the synergies expected to be achieved from integrating the companies involved into the Group’s existing business.

The acquired businesses contributed an amount of in total € 41.9 million on net revenue and an amount of in total € 2.4 million on the net result

from the moment they were acquired through the reporting date. If they all would have been acquired as per 1 January 2008, the contribution

would have been € 56.8 million and approx. € 4.2 million, respectively.

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Notes to the consolidated financial statements

7. Subsidiaries

The main (operational) subsidiaries included in the consolidation are:

In alphabetical order

2008 2007 2008 2007

BnS Contracting NV, Zelzate 100 100 Grontmij | Kats & Waalwijk Bouwadvies &

Projectmanagement BV, Gorinchem 100 100

BnS Engineering NV, Zelzate 100 100 Grontmij | Kats & Waalwijk

Vastgoedmanagement BV, Gorinchem 100 100

Carl Bro Vietnam Company Ltd., Hanoi 100 100 Grontmij | Kats & Waalwijk Vermogensbeheer

BV, Gorinchem 100 100

Grontmij AB, Stockholm 100 100 Grontmij Maunsell ICS BV, De Bilt 51 51

Grontmij Assetmanagement Holding BV, De Bilt 100 100 Grontmij Nederland BV, De Bilt 100 100

Grontmij AEW Plan GmbH, Cologne 87 87 Grontmij Nederland Holding BV, De Bilt 100 100

Grontmij Auweck GmbH, Bremen 51 51 Grontmij Nederland Ontwikkeling BV, De Bilt 100 100

Grontmij A&T GmbH, Bremen 100 100 Grontmij Nederland Projecten BV, De Bilt 100 100

Grontmij Beheer Reststoffen Grontmij Polska Sp. Z o.o., Poznan 100 100

Projecten BV, De Bilt 100 100

Grontmij BGS Ingenieurgesellschaft mbH, Grontmij Stockholm Konsult AB, Stockholm 100 100

Frankfurt am Main 86 86

Grontmij Business Services BV, De Bilt 100 100 Grontmij Vastgoed Holding BV, De Bilt 100 100

Grontmij | Canor Kft., Budapest 75 - Grontmij Wallonie N.V., Ottignies-Louvain

la-Neuve 100 100

Grontmij | Carl Bro a/s, Glostrup 100 100 Grontmij Water & Reststoffen Contracting BV,

De Bilt 100 100

Grontmij | Carl Bro Pavement Ingenieursbureau Het Noorden BV, Groningen 100 100

Consultants AB, Göteborg 100 100

Grontmij Climate & Energy, De Bilt 100 100 Kontrola GmbH & Co KG, Cologne 100 100

Grontmij Energikonsult AB, Stockholm 100 100 MaasBilt BV, De Bilt 100 100

Grontmij Gfl Planungs- und Naarderbos Ontwikkeling BV, Naarden 100 100

Ingenieursgesellschaft GmbH, Bremen 100 100

Grontmij Group Ltd., Leeds 100 100 Roger Preston Group Ltd., Maidenhead 100 -

Grontmij Ireland Ltd., Dublin 100 100 Trett Ltd., London 100 -

Grontmij Ltd., Leeds 100 100 Whitelaw Turkington Landscape Architects

Ltd., London 100 -

A full list of Grontmij´s subsidiaries is available at the Trade Register in Utrecht, the Netherlands.

GRONTMIJ | ANNUAL REPORT 2008 89


Notes to the consolidated financial statements

8. Goodwill

In thousands of euros

The movements in the carrying amount are as follows:

Cost 107,522

Accumulated impairment losses -

Balance as at 1 January 2007 107,522

Movements during 2007

Acquisition through business combinations 1,070

Impairment loss -151

919

Cost 108,592

Accumulated impairment losses -151

Balance as at 31 December 2007 108,441

Movements during 2008

Acquisition through business combinations 20,964

Earn out adjustments on prior years’ business combinations 4,323

Currency differences - 3,270

Impairment losses -

22,017

Cost 133,879

Accumulated currency differences -3,270

Accumulated impairment losses -151

Balance as at 31 December 2008 130,458

Goodwill is capitalised in respect of the following entities:

In thousands of euros

31 December 2008 31 December 2007

Grontmij Carl Bro a|s 60,042 59,987

Grontmij Sverige AB 25,120 25,120

Grontmij Group Ltd. 13,894 13,894

Trett Consulting 6,827 -

Roger Preston & Partners 5,921 -

Grontmij BGS Ingenieurgesellschaft mbH 5,393 1,070

Grontmij Kats & Waalwijk Vastgoedmanagement B.V. 3,378 3,378

Whitelaw Turkington 1,661 -

Other (individually less than € 1.5 million) 8,222 4,992

130,458 108,441

The Group annually carries out impairment tests on capitalised goodwill, based on the cash flows of the relating cash generating unit (CGU).

Determination of the realisable value is performed by using estimated future cash flows, based on actual results from operations and a forecast

for five years, including authorised budgets. Cash flows after five years are extrapolated by using a 1% growth rate.

To calculate the present value of the estimated future cash flows, pre-tax discount rates between 9.0% and 12.0% have been applied (2007: 10.5%

and 11.5%). The impairment tests at the reporting date showed that no impairments needed to be recognised.

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GRONTMIJ | ANNUAL REPORT 2008


Notes to the consolidated financial statements

There are no cash generating units where, based on current information, a downward adjustment of estimated future cash flows results in an

impairment of goodwill. Adjusting the discount rate by 100 basis points does not give a different outcome of the impairment test.

The change in the carrying value of the goodwill relating to Grontmij BGS Ingenieurgesellschaft mbH relates to a revaluated earn out payment,

becoming due at the end of the reporting period.

9. Intangible assets

The breakdown of and movements in the carrying amounts are as follows:

In thousands of euros

Total Development Software Trade Customer Order Other

costs names relations backlog

Balance as at 1 January 2007

Cost 77,783 993 10,795 4,474 57,206 3,612 703

Accumulated amortisation and

impairment losses -14,582 -822 -10,795 -100 -813 -1,445 -607

Carrying amount 63,201 171 - 4,374 56,393 2,167 96

Movements during 2007

Acquisitions 1,506 - 1,506 - - - -

Acquisitions through business combinations 1,715 - 91 - - 1,624 -

Amortisation for the period -6,087 -156 -499 -298 -2,422 -2,708 -4

Currency differences - -8 75 - - - -67

-2,866 -164 1,173 -298 -2,422 -1,084 -71

Balance as at 31 December 2007

Cost 81,965 993 13,353 4,474 57,206 5,236 703

Accumulated amortisation and

impairment losses -21,630 -978 -12,255 -398 -3,235 -4,153 -611

Accumulated currency differences - -8 75 - - - -67

Carrying amount 60,335 7 1,173 4,076 53,971 1,083 25

Movements during 2008

Reclassification from property,

plant & equipment 445 - 445 - - - -

Acquisitions 2,707 - 2,685 - - - 22

Acquisitions through business combinations 17,652 - - 4,329 9,560 3,357 406

Disposals -2 - -2 - - - -

Amortisation for the period -6,948 -7 -965 -671 -3,267 -1,922 -116

Currency differences -2,576 - - -705 -1,500 -316 -55

11,278 -7 2,163 2,953 4,793 1,119 257

Balance as at 31 December 2008

Cost 102,881 970 17,281 8,803 66,766 8,593 468

Accumulated amortisation and

impairment losses -28,692 -970 -13,945 -1,069 -6,502 -6,075 -131

Accumulated currency differences -2,576 - - -705 -1,500 -316 -55

Carrying amount 71,613 - 3,336 7,029 58,764 2,202 282

GRONTMIJ | ANNUAL REPORT 2008 91


Notes to the consolidated financial statements

In years

The estimated useful lives of development costs and (purchased) software are as follows:

Development costs 3

Software 3 – 5

In years

The remaining periods of amortisation as at 31 December 2008 are:

Trade names 5–12

Customer relations 5–36

Order backlog 1–2

Other 2–3

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Notes to the consolidated financial statements

10. Property, plant and equipment

The movements in the carrying amount are as follows:

In thousands of euros

Total Land and Plant and Other Landfill

buildings equipment equipment sites

Balance as at 1 January 2007

Cost 152,905 38,172 6,708 102,347 5,678

Accumulated depreciation and impairment losses -107,900 -22,885 -4,110 -77,688 -3,217

Carrying amount 45,005 15,287 2,598 24,659 2,461

Movements in 2007

Capital expenditure 13,141 98 708 12,335 -

Acquisitions through business combinations 450 - - 450 -

Reclassification 671 1,668 152 -1,149 -

Disposal of discontinued operations -1,637 -1,465 -102 -70 -

Disposals -1,769 -521 -112 -1,136 -

Depreciation -12,160 -1,385 -803 -9,564 -408

Currency differences -353 - - -353 -

-1,657 -1,605 -157 513 -408

Balance as at 31 December 2007

Cost 145,013 37,852 7,217 94,266 5,678

Accumulated depreciation and impairment losses -101,312 -24,170 -4,776 -68,741 -3,625

Accumulated currency differences -353 - - -353 -

Carrying amount 43,348 13,682 2,441 25,172 2,053

Movements in 2008

Capital expenditure 9,825 177 601 9,047 -

Acquisitions through business combinations 965 - 11 954 -

Reclassifications -445 559 180 -1,184 -

Disposals -470 -91 -1 -378 -

Depreciation -11,389 -1,583 -864 -8,456 -486

Currency differences -1,354 - 10 -1,364 -

-2,868 -938 -63 1,381 -486

Balance as at 31 December 2008

Cost 141,410 38,395 8,409 88,928 5,678

Accumulated depreciation and impairment losses -99,223 -25,651 -6,041 -63,420 -4,111

Accumulated currency differences -1,707 - 10 -1,717 -

Carrying amount 40,480 12,744 2,378 23,791 1,567

As at 31 December 2008, real estate (buildings) to an amount of € 4,185,000 (2007: € 4,609,000) have been pledged as collateral for a mortgage bank loan.

The Group leases operating assets by means of finance lease contracts with the option to acquire these assets at the end of the term at a reduced

price in comparison to market value. These assets serve as collateral in respect of the lease liabilities (refer to note 25); their carrying amount as at

31 December 2008 amounts to € 503,000 (2007: € 1,287,000).

GRONTMIJ | ANNUAL REPORT 2008 93


Notes to the consolidated financial statements

11. Equity accounted investees

Joint ventures

Activities engaged in by the joint ventures include among other things the consultancy, design and management activities relating to

the construction of railways, development, management and operation of business parks, development of glasshouse horticultural sites,

development and operation of hot and cold storage systems, urban development, waste water solutions in outlying areas and large

infrastructural projects.

The Group’s main joint ventures are:

Capital interests (%)

2008 2007

A&G Holding B.V., Utrecht - 50

Agriport A7 B.V., Alkmaar 50 50

Grontmij ProArgos Developments SL, Madrid 49 49

Grontmij De Weger V.o.f., Rotterdam 50 50

Libost Groep NV, Hasselt, Belgium 55 -

OGAR V.o.f., Oude Pekela 50 50

Oolder Veste B.V., Heerlen 49 49

Ontwikkelingscombinatie “de Hildenberg B.V.”, Amsterdam 50 50

Park De Bavelse Berg C.V., The Hague 33 -

Skinkeskans V.o.f., Leeuwarden 50 50

The Group’s share of the results of joint ventures in 2008 amounted to € 2,964,000 (2007: € 13,004,000).

The Group recognises the net investments in and the share in the results of joint ventures in the consolidated balance sheet and consolidated

income statement, respectively.

In 2008 a joint venture arose from the acquisition of a capital interest in Libost Group NV, Hasselt, Belgium. The relating 2008 cash outflow

amounted to approx. € 5.1 million.

The table below shows the most recent aggregated financial data of the main joint ventures, on a 100% basis. The figures are partly based on

preliminary figures and on financial statements of the previous year.

In thousands of euros

2008 2007

Non-current assets 7,805 11,881

Current assets 74,631 124,662

Non-current liabilities 39,222 68,794

Current liabilities 34,033 56,025

Revenue 41,087 123,825

Result after income tax 5,460 26,578

The Group has entered into contingent liabilities with regards to the joint ventures to an amount of € 28,691,000. The joint ventures themselves

have entered into contingent liabilities to an amount of nil (2007: € 4,000,000). The Group’s share thereof is nil (2007: € 2,000,000).

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Notes to the consolidated financial statements

Associates

The share of associates in the total carrying amount of equity accounted investees as at 31 December 2008 amounts to € 3,611,000

(2007: € 4,627,000).

The Group’s main associates are:

Capital interests (%)

2008 2007

Coldenhove West Beheer B.V., Maasland 25 25

Infraflex B.V., Utrecht 33,3 33,3

Koekoekspolder Beheer B.V., The Hague - 20

Nederlands Bureau Waardebepaling Onroerende Zaken B.V., Amsterdam - 33,3

Ruimte voor Ruimte CV, Den Bosch 24 24

Segmeer V.o.f., Rotterdam 25 25

Soldata Grontmij V.o.f., De Bilt 40 40

The Group’s share of the results of associates in 2008 amounted to € 1,570,000 (2007: € 1,447,000).

The table below shows the most recent aggregated financial data of the main associates, on a 100% basis. The figures are partly based on

preliminary figures and on financial statements of the previous year.

In thousands of euros

2008 2007

Assets 98,680 125,985

Liabilities 87,570 110,316

Revenue 57,006 66,255

Result after income tax 4,262 5,315

The Group has not entered into any contingent liabilities relating to its associates. The contingent liabilities of the associates themselves as at

31 December 2008 amount to nil (2007: nil, the Group’s share was also nil).

12. Other financial assets

In thousands of euros

2008 2007

Loans and receivables 9,266 10,155

Derivatives used for hedging - 869

Investments held to maturity 3,281 -

Participating interests 70 76

Long-term finance receivable 11,971 -

24,588 11,100

The loans carry interest rates between and 0 and 8 percent (2007: between 3 months Euribor and 8 percent) and have a maturity of between two

and forty two years.

Investments held to maturity

This item relates to a deposit with a bank to cover the future cash outflow relating to expenses on one of the Group’s landfill sites. The Group has

an obligation to pay an additional € 3.2 million in 2009 in respect of this arrangement.

GRONTMIJ | ANNUAL REPORT 2008 95


Notes to the consolidated financial statements

Long-term finance receivable

This concerns the net receivable on a financial lease contract relating to a golf course. The maturity of this lease contract ends in 2055.

In thousands of euros

2008 2007

Gross receivables 35,086 -

Unearned finance income -23,115 -

Net finance receivable 11,971 -

The contract is priced at an interest rate that reflects all risks and the nature of the contract. Gross receivables relating to payments after five years

amount to € 31.4 million.

The credit, liquidity and market risks associated with these financial assets are discussed in note 24.

13. Deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

In thousands of euros

Assets Liabilities Net

2008 2007 2008 2007 2008 2007

Intangible assets, PP&E -113 177 15,519 16,143 -15,632 -15,966

Amounts due from and to customers - - 12,946 10,258 -12,946 -10,258

Employee benefits 3,775 6,064 - - 3,775 6,064

Aftercare liabilities 1,010 889 - - 1,010 889

Untaxed reserves - - 1,019 1,310 -1,019 -1,310

Other provisions 1,004 315 1,453 54 -449 261

Other items 307 50 -210 303 517 -253

Gross tax assets and liabilities 5,983 7,495 30,727 28,068 -24,744 -20,573

Tax losses carried forward 4,790 6,010 - - 4,790 6,010

Net deferred tax assets and liabilities 10,773 13,505 30,727 28,068 -19,954 -14,563

Movements in net deferred taxes during the year under review can be summarised as follows:

In thousands of euros

1 January Recognised in Acquired in Reclassifications 31 December

2008 profit or loss business and other 2008

combinations

Intangible assets, PP&E -15,966 -83 -224 641 -15,632

Amounts due from and to customers -10,258 -2,748 60 - -12,946

Employee benefits 6,064 -2,218 - -71 3,775

Aftercare liabilities 889 121 - - 1,010

Untaxed reserves -1,310 100 -5 196 -1,019

Other provisions 261 -702 - -8 -449

Other items -253 258 - 512 517

Tax losses carried forward 6,010 -1,217 - -3 4,790

Net deferred taxes -14,563 -6,489 -169 1,270 -19,954

Unrecognised tax losses as at 31 December 2008 amount to € 1,352,000 (2007: € 904,000), the majority of which has an indefinite duration.

In relation to the 2008 acquisitions, a relatively low amount of deferred taxes has been recognised due to the fact that the major part of

the acquired intangible assets is tax depreciable.

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Notes to the consolidated financial statements

14. Receivables

In thousands of euros

31 December 2008 31 December 2007

Amounts due from customers 127,632 141,733

Trade receivables 140,710 142,690

Equity accounted investees 3,303 773

Prepaid expenses 10,997 11,342

Other receivables 14,492 16,753

Available-for-sale financial assets 8,560 -

305,694 313,291

Amounts due from customers relates to unbilled revenue at the reporting date; reference is made to note 15. Trade receivables concerns billed

revenue as per the reporting date that has not yet been received, net of adjustments for impairment.

The item Available-for-sale financial assets concerns the remainder of the shareholding in two former joint ventures. In February 2009 the Group

transferred its remaining 20% shareholding in A&G Holding B.V. and its remaining 40% shareholding in Afvalverwerking Maasvlakte B.V. to its

former partner in this joint venture project. The Group realised a cash inflow of approx. € 6.4 million.

With the exception of an amount of € 2,200,000, all amounts receivable as at 31 December 2008 are due within one year. Credit and currency risks

relating to trade and other receivables as well as impairments are disclosed in note 24.

15. Amounts due from and due to customers

In thousands of euros

Asset item Liability item Total

31 December 31 December 31 December 31 December 31 December 31 December

2008 2007 2008 2007 2008 2007

Contract work

Contract costs 132,992 143,123 87,470 58,900 220,462 202,023

PoC profit 12,466 11,987 9,985 11,925 22,451 23,912

Provisions -6,335 -7,212 -4,974 -4,066 -11,309 -11,278

Progress billings -91,426 -79,053 -107,344 -90,166 -198,770 -169,219

47,697 68,845 -14,863 -23,407 32,834 45,438

Services

Contract costs 578,257 432,776 384,775 326,286 963,032 759,062

PoC profit 123,167 112,151 109,520 109,477 232,687 221,628

Provisions -27,122 -25,874 -25,461 -23,563 -52,583 -49,437

Progress billings -594,367 -446,165 -542,676 -479,549 -1,137,043 -925,714

79,935 72,888 -73,842 -67,349 6,093 5,539

127,632 141,733 -88,705 -90,756 38,927 50,977

16. Cash and cash equivalents

Cash and cash equivalents concern cash at hand and in banks and other demand deposits. Overdraft balances payable on demand are, as far as

these relate to compensating balances, netted against Cash and cash equivalents.

As at 31 December 2008, an amount of € 96,000 relates to cash at hand (2007: € 291,000). The total balance of cash and cash equivalents is unrestricted

with the exception of an amount of € 972,000. The interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed

in note 24.

GRONTMIJ | ANNUAL REPORT 2008 97


Notes to the consolidated financial statements

17. Total equity

Changes in Equity were as follows:

In thousands of euros

Attributable to equity holders of Grontmij

Total Minority Total Share Share Translation Hedging Other Unapproequity

interest capital premium reserve reserve reserves priated

proft

Balance as at

1 January 2007 138,708 606 138,102 4,441 61,342 651 - 49,722 21,946

2006 profit

appropriation -13,323 - -13,323 - - - - 8,623 -21,946

Net profit 2007 32,720 32 32,688 - - - - - 32,688

Currency differences -1,481 - -1,481 - - 1,481 - - -

Other movements 579 -70 649 - - - 647 2 -

Balance as at

31 December 2007 157,203 568 156,635 4,441 61,342 -830 647 58,347 32,688

2007 profit

appropriation -19,541 - -19,541 - - - - 13,147 -32,688

Net profit 2008 38,770 450 38,320 - - - - - 38,320

Currency differences -5,573 - -5,573 - - -5,573 - - -

Other movements 4,084 314 3,770 - - - -1,479 5,249 -

Balance as at

31 December 2008 174,943 1,332 173,611 4,441 61,342 -6,403 -832 76,743 38,320

Share capital

On 10 May 2007, the Annual General Meeting of Shareholders of Grontmij decided to split the shares in the proportion of 1:4. The relating

necessary amendment of the Articles of Association took place on 1 June 2007. As a consequence of this split, every share with a nominal

value of € 1 was split in four shares with a nominal value of € 0.25.

Issued and fully paid-up, in numbers

2008 2007

On issue at 1 January 17,764,920 4,441,230

Adjustment following stock split - 13,323,690

On issue at 31 December 17,764,920 17,764,920

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GRONTMIJ | ANNUAL REPORT 2008


Notes to the consolidated financial statements

The authorised share capital of 60 million shares is divided into 30 million ordinary shares each with a nominal value of € 0.25, and 30 million

preference shares each with a nominal value of € 0.25. The number of ordinary shares issued and fully paid-up as at 31 December 2008 and as at

31 December 2007 was 17,764,920.

No preference shares are issued. Grontmij did not purchase any own shares.

The Executive Board proposes to make a dividend payable chargeable to the unappropriated profit for 2008 of € 1.15 (2007: € 1.10) per

(depositary receipt of a) share issued.

Share premium

The share premium is comprised of capital contributions from shareholders above nominal value, and is regarded as paid up capital. Share

premium is tax-free distributable.

Translation reserve

This reserve comprises the currency translation differences relating to the translation of the financial statements of Group entities having a

functional currency other than the euro. This reserve qualifies as a legal reserve under Dutch law.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to

hedged transactions that have not yet occurred.

Other reserves

The reserve contains retained earnings of previous years and also includes changes in the legal reserve.

The latter relates to a legal reserve under Dutch law, relating to retained profits from equity accounted investees as far as the Group is not able to

manage the distribution thereof independently.

18. Earnings per share

The profit attributable to shareholders of Grontmij amounts to € 38,320,000 (2007: € 32,688,000). The weighted average number of shares issued

for 2008 and 2007 is 17,764,920.

Earnings per share in 2008 amount to € 2.16 (2007: € 1.84). The diluted earnings per share are equal to the basic earnings per share for both 2008

and 2007.

19. Employee benefits

The Group has entered into several plans that provide pension for employees upon retirement. These concern both defined contribution plans

and defined benefit plans.

The Dutch defined benefit plan is administered by Stichting Grontmij Pensioenfonds. Reference is made to note 33 of the consolidated financial

statements.

In Germany as well as in the United Kingdom there is a limited defined benefit plan for one of the operating companies only. The German plan is

unfunded.

The pension scheme for Sweden constitutes a hybrid plan. The part of the plan that can be considered as a defined benefit plan is a multi

employer plan. There is no consistent and reliable basis of information to recognize the plan as a defined benefit plan; for this reason, the plan is

accounted for as a defined contribution plan.

The Group participates in defined contribution plans only in Belgium, Denmark, the United Kingdom and Ireland. In Poland there is no

post-employment benefit plan, as is the case with the entities in the focus countries that are part of the Group.

GRONTMIJ | ANNUAL REPORT 2008 99


Notes to the consolidated financial statements

Break down of the accumulated total of employee benefits

In thousands of euros

31 December 2008 31 December 2007

Present value of funded obligations 513,474 507,481

Present value of unfunded obligations 2,540 2,597

516,014 510,078

Fair value of plan assets -517,842 -545,600

Present value of net obligations - 1,828 -35,522

Unrecognised actuarial gains and losses 20,049 61,241

Recognised liability for defined benefit obligations 18,221 25,719

Liability for jubilee benefits and supplementary payments for early retirement 4,192 4,050

Total employee benefits 22,413 29,769

Changes in the present value of funded and unfunded obligations

In thousands of euros

2008 2007

Balance as at 1 January 510,078 547,593

Acquired through business combinations 1,937 -

Reclassification from provision for early retirement and current liabilities - 2,663

Benefits paid -16,284 -14,800

Current service cost 11,098 16,454

Employee contributions 4,020 3,800

Interest cost 26,831 23,991

Actuarial gains -20,938 -69,623

Currency differences 36 -

5,936 -37,515

Balance as at 31 December 516,014 510,078

100

GRONTMIJ | ANNUAL REPORT 2008


Notes to the consolidated financial statements

Changes in the present value of plan assets

In thousands of euros

2008 2007

Balance as at 1 January 545,600 549,725

Acquired through business combinations 1,117 -

Benefits paid -16,284 -14,800

Employers’ contributions 17,039 14,600

Employees’ contributions 4,020 3,800

Expected return on plan assets 29,053 28,718

Actuarial losses -62,512 -36,443

Currency differences -191 -

-27,758 -4,125

Fair value of plan assets as at 31 December 517,842 545,600

Actual return on plan assets in 2008: € -33,459,000 (2007: € -7,725,000).

Expense recognised in profit or loss

In thousands of euros

2008 2007

Current service cost 11,098 16,454

Interest cost 26,831 23,991

Amortisation of actuarial gains and losses -382 -

Expected return on plan assets -29,053 -28,718

Expenses related to defined benefit plans 8,494 11,727

Expenses related to defined contribution plans 15,578 15,342

Total pension expenses (all recognised in employee expenses) 24,072 27,069

All pension expenses are included in the consolidated income statement under the line Employee expenses.

Expected contributions for 2009 amount to approximately € 20.8 million (including employees’ contributions).

Principal actuarial assumptions

In %

2008 2007

Discount rate as at 31 December 5.40% 5.40%

Expected return on plan assets 5.75% 5.30%

Future salary increases 2.00% 2.00%

Future pension increases 1.65% 2.00%

The increase of the expected return in plan assets follows a change in the asset mix.

GRONTMIJ | ANNUAL REPORT 2008 101


Notes to the consolidated financial statements

Composition of plan assets

In %

2008 2007

Equity securities 30.0% 35.0%

Fixed income and other investments 70.0% 65.0%

Total 100.0% 100.0%

The plan assets do not include Grontmij shares.

Experience adjustments arising on liabilities in 2008 amount to € 1,574,000, in 2007 amount to € -4,377,000 and in 2006 amount to € 3,086,000.

Experience adjustments arising on plan assets in 2008 amount to € -61,962,000, in 2007 amount to € 36,343,000 and in 2006 amount to

€ 3,321,000. Experience adjustments do not include gains and losses due to changes in the discount rate.

20. Share-based payments

As of August 2008, the Group offers all employees of Grontmij N.V. and its wholly-owned (direct and indirect) subsidiaries on a permanent

employment contract the opportunity to acquire participations in Stichting Employee Share Purchase Plan (‘Stichting ESPP’), against which

Stichting ESPP acquires and holds depositary receipts for shares Grontmij. Eligible employees will be granted one participation free of charge for

every four participations acquired after holding on to these participations for three years, provided they are still employed by the Group at that

time. In the start-up phase, a number of 1,972 participations have been subscribed to, resulting in a liability for the Group as per 31 December

2008 to acquire 492 depositary receipts for shares Grontmij through Stichting ESPP. Given the current non-materiality of the relating liability, it

has not been measured and recognized in the balance sheet as at 31 December 2008.

The members of the Executive Board receive a value-dependent variable remuneration which is based on the relative change in the value of the

share price. Reference is made to note 33.

21. Loans and borrowings

This part of the notes contains information on the terms and conditions of the Group’s interest bearing loans and other financial liabilities, valued

at amortised cost.

In thousands of euros

31 December 2008 31 December 2007

Non-current liabilities

Bank loans 48,647 48,507

Secured bank loans 4,412 13,023

Unsecured other loans 129 2,600

Financial lease liabilities 174 560

53,362 64,690

Current liabilities

Bank loans 23,236 20,500

Secured bank loans 3,325 -

Unsecured other loans - 133

Financial lease liabilities 386 865

26,947 21,498

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Notes to the consolidated financial statements

Terms and redemption scheme

In thousands of euros

31 December 2008 31 December 2007

Currency Nominal interest rate Year of Nominal Carrying Nominal Carrying

maturity value value value value

Bank loan EUR Euribor + 1.25% 2011 47,500 46,980 65,000 64,507

Bank loan GBP LIBOR + 1.25% 2014 23,539 23,403 - -

Bank loan EUR 7.875% 2009 1,500 1,500 4,500 4,500

Secured bank loan EUR Euribor + 2.00% Variabel 1,047 1,047 985 985

Secured bank loan HUF 4.75% 2009 248 248 - -

Secured bank loan EUR Euribor + 1.50% 2022 692 692 685 685

Secured bank loan EUR 5.50% 2009 3,200 3,200 8,800 8,800

Secured bank loan DKK 4.75% 2022 2,496 2,550 2,617 2,676

Unsecured other loan EUR 5.00% 2008 - - 10 10

Unsecured other loan EUR 4.00% Variabel 129 129 124 124

Unsecured other loan EUR 0.00% 2009 - - 2,476 2,476

Financial lease liability DKK 3.00% - 5.00% 2009-2011 588 560 1,302 1,225

Financial lease liability EUR 5.00% 2008 - - 200 200

Total loans and borrowings 80,939 80,309 86,699 86,188

The loan at a nominal value of € 47,500,000 was acquired as part of a 2006 term loan facilities agreement and relates to the acquisition of Carl Bro;

this loan is redeemed on a straight-line basis during the period 2008-2011.

The redemption for 2009 amounts to € 17,500 000; the redemption obligation for the period 2010-2011 amounts to € 30,000,000, of which

€ 17,500,000 is due in 2010. The floating interest rate equals Euribor +1.25% a year and is set on a quarterly basis in arrear. For this loan,

an interest rate swap contract has been entered into.

In the course of 2008 the Group acquired three United Kingdom based companies for which the above-mentioned term loan facilities agreement

was amended and restated as per 1 April 2008. Under the amended agreement, an additional Acquisition Facility to an amount of € 25,000,000

was acquired, redeemable on a straight-line basis over the period 31 December 2008-30 June 2014 and at a floating interest equalling

LIBOR +1.25%.

For further information on the Group’s interest rate, currency and lquidity risks, reference is made to note 24.

The main conditions and securities concerning the loan facility from Fortis Bank N.V. are as follows:

o the loan is payable on demand if the Group’s share in Carl Bro, partly or in full, is disposed of, Grontmij is no longer able to appoint the

Board of Directors of Carl Bro, the governance structure of Grontmij regarding the appointment of the Supervisory Board or the Executive

Board is changed, Stichting Administratiekantoor Grontmij N.V. holds less than 95% of voting rights in Grontmij or if a main part of the Group

is disposed of;

o the interest cover ratio, total net debt leverage ratio and the net equity ratio are to meet specific requirements;

o the Group is not allowed to pledge its assets as security, to sell, lease or transfer assets, or arrange for new or extend its interest bearing

liabilities.

As at 31 December 2008, the Group meets these requirements.

GRONTMIJ | ANNUAL REPORT 2008 103


Notes to the consolidated financial statements

Financial lease liabilities

In thousands of euros

31 December 2008 31 December 2007

Future Interest Present value Future Interest Present value

minimum of minimum minimum of minimum

lease lease lease lease

payments payments payments payments

Less than one year 408 22 386 916 51 865

Between one to five years 180 6 174 586 26 560

588 28 560 1,502 77 1,425

22. Provisions

The movements in the provisions are as follows:

In thousands of euros

Total Aftercare liabilities Other

Balance as at 1 January 2008 26,929 22,080 4,849

Additions 919 35 884

Expenditure charged to provisions - 1,329 -664 -665

Amounts released to the income statement - 2,018 -1,449 -569

Interest added 695 695 -

- 1,733 - 1,383 - 350

Balance as at 31 December 2008 25,196 20,697 4,499

Current part of provisions 1,253 131 1,122

Balance as at 31 December 2008, non-current part 23,943 20,566 3,377

Aftercare liabilities

The Group has the obligation for the aftercare of sites, ensuring that waste products are processed for storage and ensuring its long term

maintenance. Provisions for landfill sites are calculated on the basis of the RINAS model and in conformity with this model calculated at a

discount rate of 4%. The accumulation of these provisions is realised in proportion to the disposal of waste per sector.

Of these provisions, an amount of € 8,248,000 relates to the period up to 2013, and an amount of € 12,318,000 relates to the period after 2013.

The provision is measured at the present value of estimated future expenditure. In this respect, account is taken of the current market and the

risks attached to the liability, in as far as the risks have not been taken into account already when determining the future cash flows.

The provision is calculated on the basis of the RINAS-model of the IPO (the umbrella organisation for the twelve provinces in the Netherlands).

Other provisions

The other provisions mainly relate to provisions for warranties and claims for damages.

104

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Notes to the consolidated financial statements

23. Trade and other payables

In thousands of euros

31 December 2008 31 December 2007

Amounts due to customers for services and project work 88,705 90,756

Trade creditors 37,761 42,768

VAT and wage tax 21,093 22,983

Social insurance contributions 804 2,648

Pension contributions 3,590 927

Equity accounted investees 1,076 4,436

Employee related expenses 53,946 47,538

Deferred consideration relating to acquisitions 14,343 -

Derivatives used for hedging 1,117 -

Other 31,246 30,741

253,681 242,797

The Group’s currency and liquidity risk relating to trade and other payables is disclosed in note 24.

24. Financial instruments

Credit risk

The carrying amount of the financial assets represents the maximum credit risk. The maximum exposure to credit risk at the reporting date was as follows:

In thousands of euros

31 December 2008 31 December 2007

Loans and receivables 9,266 10,155

Investments held to maturity 3,281 -

Finance receivable 11,971 -

Trade and other receivables 167,065 171,562

Cash and cash equivalents 29,450 33,654

Interest rate swaps used for hedging:

Assets - 869

221,033 216,240

The maximum exposure to credit risk at the reporting date (by geographic region):

In thousands of euros

31 December 2008 31 December 2007

Belgium 20,591 22,538

Denmark 37,305 34,419

Germany/Poland 25,826 23,654

The Netherlands 97,855 86,091

Sweden 14,678 27,027

United Kingdom/Ireland 22,126 18,496

Other 2,652 4,015

221,033 216,240

GRONTMIJ | ANNUAL REPORT 2008 105


Notes to the consolidated financial statements

Impairment losses

The aging of trade receivables at the reporting date was:

In thousands of euros

31 December 2008 31 December 2007

Gross Impairment Gross Impairment

Not past due 128,223 - 100,803 -

Past due: 0 to 30 days 27,872 - 43,273 -

Past due: 31 to 180 days 17,555 1,291 21,238 799

Past due: more than 180 days 9,536 3,833 11,781 4,738

183,186 5,124 177,095 5,537

The movements in the allowance for impairment in respect of trade receivables during the year were as follows:

In thousands of euros

2008 2007

Balance as at 1 January 5,537 8,547

Reclassification relating to assets held for sale - 1,112

Entities disposed of -166 -110

Employment -312 -3,773

Movements through profit or loss 363 -301

Currency differences -298 62

Balance as at 31 December 5,124 5,537

The Group believes that no impairment allowance is necessary in respect of trade receivables not past due or past due to 30 days.

The allowance for trade and other receivables is used to post impairment losses unless the Group is satisfied that no recovery of the amount

owing is possible. In that case the amount is written off against the financial asset directly.

At 31 December 2008 the Group does not have any collective impairment on its trade receivables (2007: nil).

Fair values versus carrying amounts

The estimated values as at 31 December 2008 of financial assets and liabilities are equal or nearly equal to the carrying amounts of the

concerning items.

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Notes to the consolidated financial statements

Liquidity risk

The following are the contractual maturities of the financial liabilities, including the estimated interest payments and excluding the impact of netting agreements.

In thousands of euros

31 December 2008

Carrying Contractual 1 year 2-5 years More than

amount Cash flows or less 5 years

Non-derivative financial liabilities

(Secured) bank loans 79,620 -80,550 -26,559 -51,492 -2,499

Unsecured other loans 129 -129 - -129 -

Financial lease liabilities 560 -588 -397 -191 -

Trade and other payables 163,859 -163,983 -159,632 -4,101 -250

Bank overdraft 36,021 -36,021 -36,021 - -

Non-derivative financial liabilities

Interest rate swaps used for hedging 1,117 -1,117 -428 -689 -

281,306 -282,388 -223,037 -56,602 -2,749

31 December 2007

Carrying Contractual 1 year 2-5 years More than

amount Cash flows or less 5 years

Non-derivative financial liabilities

(Secured) bank loans 69,007 -91,365 -15,837 -72,443 -3,085

Unsecured other loans 3,461 -3,805 - -2,820 -985

Financial lease liabilities 1,425 -1,502 -908 -594 -

Trade and other payables 161,583 -161,583 -161,583 - -

Bank overdraft 16,023 -16,023 -16,023 - -

263,794 -274,278 -194,351 -75,857 -4,070

Currency risk

The group’s exposure to foreign currency risk was as follows, based on notional amounts:

In thousands of euros

31 December 2008 31 December 2007

EUR DKK SEK GBP PLN EUR DKK SEK GBP PLN

Trade and other

receivables 109,970 30,944 12,429 21,187 3,532 99,607 29,120 23,839 17,027 1,969

(Secured) bank loans -52,620 -2,550 - -23,403 - -78,626 -2,676 - - -

Unsecured

other loans -1,176 - - - - -3,461 - - - -

Financial lease

liabilities - -560 - - - -200 -1,225 - - -

Trade and other

payables -107,094 -25,626 -13,049 -15,347 -3,860 -103,050 -24,512 -18,257 -12,394 -3,370

Gross exposure -50,920 2,208 -620 -17,563 -328 -85,730 707 5,582 4,633 -1,401

Forward exchange

contracts - - - - - - - - - -

Net exposure -50,920 2,208 -620 -17,563 -328 -85,730 707 5,582 4,633 -1,401

GRONTMIJ | ANNUAL REPORT 2008 107


Notes to the consolidated financial statements

Exchange rates applied during the year

Average rate

Reporting date spot rate

2008 2007 2008 2007

DKK 0.134 0.134 0.134 0.134

GBP 1.259 1.462 1.027 1.485

PLN 0.286 0.265 0.242 0.263

SEK 0.104 0.108 0.091 0.111

Sensitivity analysis

A 5 percent strengthening of the euro against the following currencies at 31 December would have increased (decreased) equity and profit or

loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is

performed on the same basis for 2007.

In thousands of euros

2008 2007

Equity Profit or loss Equity Profit or loss

DKK 5,304 426 4,876 131

GBP 984 230 999 277

PLN 315 55 155 5

SEK 635 261 656 263

A 5 percent weakening of the euro against the above currencies at 31 December would have had the equal but opposite effect on the above

currencies to the amounts shown above, on the basis that all other variables would remain constant.

Interest rate risk

Profile

At the reporting date the interest rate profile of the Group’s interest bearing financial instruments was as follows:

Carrying amount, in thousands of euros

31 December 2008 31 Dcember 2007

Fixed rate instruments:

Assets 11,624 7,293

Liabilities -7,379 -5,935

4,245 1,358

Variable rate instruments:

Assets 60 2,187

Liabilities -72,682 -77,653

-72,622 -75,466

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate

derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the

reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts

shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on

the same basis for 2007.

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Notes to the consolidated financial statements

Effects in thousands of euros

Profit or loss

Equity

100 bp 100 bp 100 bp 100 bp

increase decrease increase decrease

31 December 2008:

Variable rate instruments -700 700 - -

Interest rate swap 579 -579 286 -286

Cash flow sensitivity (net) -121 121 286 -286

31 December 2007:

Variable rate instruments -717 717 - -

Interest rate swap 650 -650 342 -342

Cash flow sensitivity (net) -67 67 342 -342

25. Leases

In thousands of euros

31 December 2008 31 December 2007

Non-cancellable operational leases and rentals

Less than one year 30,066 29,487

Between two to five years 74,700 72,279

More than five years 34,974 42,877

139,740 144,643

The Group has entered into a number of operational lease contracts relating to the use of office buildings, cars and office machinery. The lease

contracts typically run for an initial period of between two and thirteen years.

In 2008, an amount of € 31,254,000 was recognised as an expense in the income statement in respect of these rental agreements and operating

leases (2007: € 27,742,000).

26. Liabilities not recognised in the consolidated balance sheet

Liabilities not recognised in the consolidated balance sheet

Joint ventures such as general partnerships (`V.o.f.`) are subject to joint and several liability. Any risks arising in connection with these

partnerships are generally mitigated through the use of project private limited companies.

The Group has agreed in 2008 to obtain the remaining 45% shareholding in Libost Groep NV, Hasselt, Belgium at a price to be fixed.

This acquisition will be completed before the end of 2013 and is expected to have a value of approx. € 5 million.

Contingent liabilities

The bank guarantees for in-house projects, joint ventures, associates and lease contracts amount to € 28,534,000 (2007: € 35,596,000).

Further, the security commitments for projects amount to € 5,118,000 (2007: € 13,315,000). Guarantees provided by the parent company amount

to € 37,422,000 (2007: € 10,552,000).

Legal disputes

The Group is from time to time involved in legal disputes. On the basis of legal and other advice, the Executive Board is of the view that the

outcome of pending cases will not have a significant impact on the consolidated financial position of Grontmij. However, should this be the case,

adequate provisions have been formed.

GRONTMIJ | ANNUAL REPORT 2008 109


Notes to the consolidated financial statements

27. Segment reporting

Grontmij has opted for early adoption of IFRS 8, which replaces IAS 14 Segment Reporting for periods beginning on or after 1 January 2009.

The Executive Board organises the Group around differences in geographical areas. In this respect, the Group recognizes six geographical

segments and Holdings & Eliminations. The latter reconciles the financial data as reported in the six segments to the consolidated balance sheet

and consolidated income statement, and includes the Group’s operations in Hungary and Turkey as well as the amortisation expense of

intangible assets relating to business combinations in order to show the geographical segments’ operational results in the segment reporting.

The Group’s operations in Poland are reported in the segment Germany/Poland; the Group’s operations in Ireland are reported in the segment

UK & Ireland. The Group’s operations in a number of other countries – in total less than 3% of the Group’s revenue and assets – are reported in the

segments whose management is primarily responsible for their performance.

Segment information is presented in respect of the Group’s geographical segments. This segmentation of the Group is based on its geographical

management structure, i.e.:

o Belgium;

o Denmark;

o Germany/Poland;

o The Netherlands;

o Sweden;

o United Kingdom/Ireland.

Holdings & Eliminations includes all reconciling items as well as a number of focus countries.

The results of a segment comprise such items as are charged to the segment or may reasonably be charged thereto. Inter-segment prices have an

arm’s length basis.

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Notes to the consolidated financial statements

Segment information, 2008

Belgium Denmark Germany/ The Sweden UK/Ireland Holdings & Total

Poland Netherlands Eliminations

Customers 57,587 169,703 65,402 328,318 88,313 115,310 19,845 844,478

Other segments 793 1,446 329 3,193 173 102 -6,036 -

Other income 109 48 876 539 512 - -339 1,745

Total revenue 58,489 171,197 66,607 332,050 88,998 115,412 13,470 846,223

Revenue less operating

expenses 3,225 10,416 8,455 16,739 7,147 9,325 -9,805 45,502

Share of profit of

joint ventures and associates 2,172 8 -80 2,434 - - - 4,534

Result on sale of

joint ventures and associates - 7 - 8,143 - - - 8,150

EBIT 5,397 10,431 8,375 27,316 7,147 9,325 -9,805 58,186

EBIT margin (%) 9,2 6,1 12,6 8,2 8,0 8,1 pm 6,9

Net finance expense 470 3,536 38 2,107 383 -528 -13,471 -7,465

Income tax -1,757 -3,576 -2,359 -4,341 -2,203 -1,924 4,209 -11,951

Net result 4,110 10,391 6,054 25,082 5,327 6,873 -19,067 38,770

Avg. number of staff (fte) 624,3 1,278,5 724,8 2,605,9 741,0 1,233,1 119,6 7,327,2

Total assets 25,551 92,560 54,485 269,347 27,455 68,037 89,909 627,344

Total liabilities 17,811 61,541 36,055 200,015 14,649 46,101 76,229 452,401

Depreciation 1,067 1,697 672 4,986 608 823 1,536 11,389

Amortisation of

intangible assets - 355 90 7 - - 6,496 6,948

Capital expenditure 477 1,895 588 3,790 509 1,820 746 9,825

Acquisition of intangible

assets & goodwill - 2,783 111 2,805 1,071 33,687 866 41,323

Investments in joint ventures

and associates 5,097 - - 3,182 - - - 8,279

GRONTMIJ | ANNUAL REPORT 2008 111


Notes to the consolidated financial statements

Segment information, 2007

Belgium Denmark Germany/ The Sweden UK/Ireland Holdings & Total

Poland Netherlands Eliminations

Customers 52,296 148,381 50,329 310,225 95,299 85,764 25,717 768,011

Other segments 569 1,884 629 1,780 327 - -5,189 -

Other income 158 322 419 3,190 651 - 95 4,835

Total revenue 53,023 150,587 51,377 315,195 96,277 85,764 20,623 772,846

Revenue less

operating expenses 3,181 9,200 3,236 11,222 7,221 7,186 -8,758 32,488

Share of profit of

joint ventures and associates 2,254 3 - 12,213 - -19 - 14,451

Result on sale of

joint ventures and associates - - - - - - - -

Result on sale of

discontinued operations - - - 1,053 - - - 1,053

EBIT 5,435 9,203 3,236 24,488 7,221 7,167 -8,758 47,992

EBIT (%) 10,3 6,1 6,3 7,8 7,5 8,4 pm 6,2

Finance income and expense -438 3,292 89 264 573 209 -9,989 -6,000

Income tax -1,782 -3,258 -369 -3,671 -2,140 -2,228 4,176 -9,272

Net result 3,215 9,237 2,956 21,081 5,654 5,148 -14,571 32,720

Avg. number of staff (fte) 554,5 1,166,0 627,5 2,543,2 763,4 907,0 95,0 6,656,6

Total assets 28,489 85,922 36,613 297,886 33,315 38,102 76,192 596,519

Total liabilities 24,860 57,434 22,893 223,728 20,193 18,116 72,092 439,316

Depreciation 1,074 1,965 674 4,859 746 1,196 1,646 12,160

Amortisation of

intangible assets - 4 128 256 - - 5,699 6,087

Capital expenditure 1,250 2,763 448 4,575 1,307 1,392 1,406 13,141

Acquisition of intangible

assets & goodwill - - 2,847 - - - 1,444 4,291

Investments in joint ventures

and associates - - - 803 - - - 803

112

GRONTMIJ | ANNUAL REPORT 2008


Notes to the consolidated financial statements

28. Other operating income

In thousands of euros

2008 2007

Gains on sale of property, plant and equipment 121 84

Gain on the sale of a subsidiary 368 -

Release of accruals, previous years - 1,527

Property valuation services - 1,380

Rental income and other items 1,256 1,844

1,745 4,835

29. Employee expenses

In thousands of euros

2008 2007

Wages and salaries 351,006 310,803

Social security contributions 47,124 43,356

Contributions to defined contribution plans 15,578 15,342

Expenses related to defined benefit plans 8,494 11,727

Cash-settled share-based payment transactions 214 324

Agency staff 39,642 35,921

Other employee expenses 42,470 39,434

504,528 456,907

Staff (fulltime equivalents)

In 2008, the average number of employees was 7,327 (2007: 6,656), of which 6,816 were employed by the Group (2007: 6,255), and 511 concerned agency staff

(2007: 401). Of total staff a number of 4,629 (2007: 3,918) were employed outside the Netherlands; the number of agency staff abroad was 238 (2007: 118).

30. Other operating expenses

In thousands of euros

2008 2007

Housing expenses 34,656 31,074

Office expenses 37,339 33,529

Marketing expenses 6,154 5,415

Other operating expenses 17,453 20,485

95,602 90,503

GRONTMIJ | ANNUAL REPORT 2008 113


Notes to the consolidated financial statements

31. Finance income and expense

In thousands of euros

2008 2007

Interest income on bank balances and deposits 3,628 3,524

Interest income from loans and receivables 702 961

Net foreign exchange profit 94 -

Other interest income 24 81

Finance income 4,448 4,566

Interest expense on bank overdraft and short term loans 4,002 3,287

Interest expense on loans and borrowings 6,718 5,833

Interest expense on aftercare liabilities 695 731

Net foreign exchange profit - 28

Other finance expenses 498 687

Finance expenses -11,913 -10,566

Finance income and expense -7,465 -6,000

32. Income tax

Income tax recognised in the consolidated income statement amount to € 11,951,000 (2007: € 9,272,000). This item consists of current and

deferred income tax and is composed as follows:

In thousands of euros

2008 2007

Current income tax:

Current year 5,490 14,575

Adjustments for prior years -28 -71

5,462 14,504

Deferred income tax:

Deferred income tax relating to temporary differences and recognised tax losses 6,558 -4,231

Reduction of tax rates -69 -1,001

6,489 -5,232

Income tax expense 11,951 9,272

In addition, for 2008 a tax charge to an amount of € 255,000 has been included in result on sale of equity accounted investees.

114

GRONTMIJ | ANNUAL REPORT 2008


Notes to the consolidated financial statements

The reconciliation of the applicable tax rate and the effective tax rate is as follows:

In thousands of euros; percentages rounded off to the nearest decimal

2008 2007

Profit before income tax 50,721 40,939

Tax charge based on weighted average applicable rate 13,920 27.4% 11,939 29.2%

Reduction of tax rates -69 -0.1% -1,001 -2.4%

Unrecognised income tax losses -150 -0.3% -723 -1.8%

Recognition of previously unrecognised income tax losses - - -38 -0.1%

Over- (under) provision in prior years -28 -0.1% 210 0.5%

Tax exempted results from equity accounted investees -2,585 -5.1% -2,328 -5.7%

Non-deductable expenses 836 1.7% 1,269 3.1%

Other 27 0.1% -56 -0.1%

Tax charge and effective tax rate, respectively 11,951 23.6% 9,272 22.7%

33.Related parties

Grontmij´s and/or the Group’s related parties comprise subsidiaries, joint ventures, associates, the Executive Board, the Supervisory Board,

Stichting Pensioenfonds Grontmij, Stichting Administratiekantoor van Aandelen Grontmij N.V., Stichting Medewerkersparticipatie Grontmij and

Stichting Employee Share Purchase Plan.

A full list of subsidiaries, joint ventures and associates is filed with the Trade Register in Utrecht, the Netherlands.

Subsidiaries Grontmij

Transactions between Grontmij and its subsidiaries in 2008 concerned an amount of € 4,524,000 in management fees (2007: € 4,862,000),

€ 14,398,000 in operational transactions (2007: € 10,587,000), and € 24,800,000 in financing (2007: € 36,254,000).

Grontmij has as at 31 December 2008 amounts due from subsidiaries of € 101,182,000 (2007: € 105,922,000). Further, Grontmij has as at

31 December 2008 amounts due to subsidiaries of € 27,033,000 (2007: € 20,844,000).

Joint ventures

Transactions between the Group and its joint ventures comprise among other things financing. At the end of 2008 this concerned an amount

of € 15,573,000 (2007: € 7,318,000). In 2008, dividends to an amount of € 4,435,000 (2007: € 16,525,000) were received.

At year-end 2008, amounts totalling € 450,000 are due to the Group from its joint ventures (2007: € 347,000) and amounts totalling € 945,000

are due to its joint ventures from the Group (2007: € 3,687,000). Transactions with joint ventures are on an arm’s length basis. In 2008 a project

was sold to a joint venture to an amount of € 2.1 million.

Associates

Transactions between the Group and its associates comprise among other things financing. At the end of 2008 this concerned an amount

of € 2,634,000 (2007: € 2,296,000). In 2008, dividends to an amount of € 1,330,000 (2007: € 537,000) were received.

At year-end 2008, amounts totalling € 2,853,000 are due to the Group from its associates (2007: € 426,000) and amounts totalling € 131,000

are due to its associates from the Group (2007: € 749,000).

GRONTMIJ | ANNUAL REPORT 2008 115


Notes to the consolidated financial statements

Executive Board

Executive Board members received the following remuneration:

In thousands of euros

Period Pension Variable Total

remunerations contributions remunerations

Result

dependent part

Paid value

dependent part

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

S. Thijsen (chairman) 418 387 75 75 230 207 - - 723 669

D.G.H. van der Werf 307 287 72 72 138 125 - - 517 484

B.W. Nørgaard 431 407 75 75 181 173 - - 687 655

G.P. Dral 307 287 72 72 138 124 - - 517 483

1,463 1,368 294 294 687 629 - - 2,444 2,291

Members of the Executive Board receive an allowance for representation expenses and dispose of a company car. There were no other

transactions with members of the Executive Board.

The members of the Executive Board receive a value-dependent variable remuneration, which is based on the average annual value

development of the Grontmij share compared to the development of the prices of the shares, quoted at Euronext Amsterdam Stock Market in

the AEX, AMX and AScX indices for a period of three years. The present scheme is valid for the years 2006, 2007 and 2008. The remuneration is

at a maximum if the positive difference exceeds 10%, is paid pro rata if this positive difference is between 0% and 10%, and will not be negative.

The fair value of the value dependent part for the years 2006, 2007 and 2008 amounts to € 864,000 and will be paid in 2009.

Supervisory Board

Supervisory Board members received the following remuneration:

In thousands of euros

2008 2007

F.L.V. Meysman (chairman) 46 46

S.E. Eisma 29 29

P.E. Lindquist (as of 10 May 2007) 34 26

J.H.J. Zegering Hadders 29 29

P.P. Snoep (until 11 May 2007) - 10

J.P. Teelen (until 11 May 2007) - 10

D. Terpstra (until 11 May 2007) - 10

138 160

There were no other transactions with members of the Supervisory Board, other than the reimbursement of travel expenses.

Stichting Pensioenfonds Grontmij

Stichting Pensioenfonds Grontmij is charged with administering the committed pension rights allocated to the employees of Grontmij and its

Dutch subsidiaries. Transactions between the Group and Stichting Pensioenfonds Grontmij mainly comprise the transfer of pension premiums.

In 2008, an amount of € 16,428,000 (2007: € 14,600,000) was paid by the Group in respect of pensions premiums.

At year-end 2008 a nominal amount of € 2,323,000 was due to Stichting Pensioenfonds Grontmij from Grontmij (2007: € 271,000 due to

Stichting Pensioenfonds Grontmij from Grontmij).

Both at year-end 2008 and 2007, Stichting Pensioenfonds Grontmij held no shares in Grontmij.

116

GRONTMIJ | ANNUAL REPORT 2008


Notes to the consolidated financial statements

Stichting Administratiekantoor van Aandelen Grontmij N.V.

Stichting Administratiekantoor van Aandelen Grontmij N.V. holds approximately 98.4% of the shares in Grontmij.

The transactions in 2008 between Grontmij and Stichting Administratiekantoor van Aandelen Grontmij N.V. are mainly dividend related. In 2008,

Grontmij paid a dividend of € 16,354,000 (2007: € 11,143,000) to Stichting Administratiekantoor van Aandelen Grontmij N.V.

The operational expenses of Stichting Administratiekantoor van Aandelen Grontmij N.V. are borne by Grontmij.

Both at year-end 2008 and 2007, Grontmij has neither amounts due from nor amounts due to Stichting Administratiekantoor van Aandelen

Grontmij N.V.

Stichting Medewerkersparticipatie Grontmij

Stichting Medewerkersparticipatie Grontmij offers employees the opportunity to indirectly acquire depositary receipts for shares. Stichting

Medewerkersparticipatie Grontmij holds 0.6% of the shares in Grontmij via Stichting Administratiekantoor van Aandelen Grontmij N.V.

Transactions between Grontmij and the Stichting Medewerkersparticipatie Grontmij generally comprise financing and dividend payments. In

2008, Grontmij paid a dividend of € 109,173 (2007: € 85,551) to Stichting Medewerkersparticipatie Grontmij.

At year-end 2008, Grontmij has neither amounts due from nor amounts due to Stichting Medewerkersparticipatie Grontmij (2007: none).

Stichting Employee Share Purchase Plan

As of August 2008, Stichting Employee Share Purchase Plan (‘Stichting ESPP’) offers all employees of Grontmij N.V. and its wholly-owned (direct

and indirect) subsidiaries on a permanent employment contract the opportunity to acquire participations in Stichting ESPP, against which

Stichting ESPP acquires and holds depositary receipts for shares Grontmij. Eligible employees are granted a discount of 15% on the market value,

are to hold the participations for a period of three years and will be granted one participation free of charge after three years for every four

participations acquired, provided they are still employed by the Group at that time.

Transactions between Grontmij and the Stichting ESPP will usually comprise financing and dividend payments. In the start-up phase, a number of

1,972 participations have been subscribed to, resulting in cash transactions to an amount of € 36,522.

34. Subsequent events

The Group has agreed to acquire the minority shareholding in AEW Plan GmbH, Cologne, Germany with effect from 1 January 2009.

On 31 December 2008 the Group already owned 87% of the shares and consequently, so the acquisition will have no major impact on the

consolidated results and financial position.

In February 2009, the Group transferred its remaining 20% shareholding in A&G Holding B.V. and its remaining 40% shareholding in

Afvalverwerking Maasvlakte B.V. to its former partner in this joint venture project. As a result of this transfer, the Group realised cash in of

approximately € 6.4 million.

The 2008 financial statements are presented for adoption to the Annual General Shareholders Meeting, which is not entitled to revise the

financial statements.

GRONTMIJ | ANNUAL REPORT 2008 117


Company balance sheet as at 31 December 2008

In thousands of euros

Before profit appropriation

Note 2008 2007

Non-current assets

Subsidiaries 91,922 54,541

Loans to subsidiaries - 16,252

Equity accounted investees 550 476

Other financial assets 98 111

Financial assets 3 92,570 71,380

Current assets

Receivables 4 101,432 107,564

Cash and cash equivalents 2,751 -

104,183 107,564

Total assets 196,753 178,944

Shareholders’ equity 5

Share capital 4,441 4,441

Share premium 61,342 61,342

Legal reserve 4,244 3,663

Translation reserve -6,403 -830

Hedging reserve -832 647

Other reserves 72,499 54,684

Profit for the year 38,320 32,688

173,611 156,635

Non-current liabilities 6 409 1,500

Current liabilities 8 22,733 20,809

Shareholders’ equity and liabilities 196,753 178,944

118

GRONTMIJ | ANNUAL REPORT 2008


Company income statement 2008

In thousands of euros

Note 2008 2007

Result from participating interests after tax 3 40,600 30,117

Other results -2,280 2,571

Profit after income tax 38,320 32,688

Application of Part 2:402 of the Dutch Civil Code

As the results of Grontmij are included in the consolidated financial statements, the Company income statement is, in accordance with Part 2:402

of the Dutch Civil Code, provided in abbreviated format.

GRONTMIJ | ANNUAL REPORT 2008 119


Notes to the company financial statements

Contents

1 Basis of valuation 121

2 Goodwill 121

3 Financial assets 121

4 Receivables 122

5 Shareholders’ equity 122

6 Loans and borrowings 123

7 Related parties 123

8 Current liabilities 124

9 Remuneration of Executive Board and Supervisory Board 124

10 Auditors´ remuneration 124

11 Liabilities not recognised in the balance sheet 124

120

GRONTMIJ | ANNUAL REPORT 2008


Notes to the company financial statements

1. Basis of valuation

The relevant accounting policies set out in note 3 to the consolidated financial statements as provided in pages 78 to 86, have been applied

consistently to all periods accounted for in these company financial statements.

The company financial statements form part of the financial statements of Grontmij for the year 2008. For the valuation of assets and liabilities

and in determining the result in its company financial statements, Grontmij has availed of the option provided for in Article 2:362 par. 8 of the

Dutch Civil Code. This states that the policies regarding the valuation of assets and liabilities and determination of the result of the company

financial statements correspond with those applied for the consolidated financial statements, which are prepared in conformity with IFRS as

adopted by the European Union (EU-IFRSs). Subsidiaries, joint ventures and associates are consequently measured on the basis of the ‘equity’

method.

2. Goodwill

Following a legal restructuring within the Group, all capital interests in the Carl Bro entities were sold and transferred to a sub holding within

the Group, Grontmij Buitenland Holding BV, in the course of 2007.

3. Financial assets

A summary of the main (operational) subsidiaries is provided in note 7 of the consolidated financial statements. A full list of subsidiaries,

joint ventures and associates is filed with the Trade Register in Utrecht, the Netherlands.

The movements in the carrying amount of financial assets are as follows:

In thousands of euros

Total Subsidiaries Loans to Joint Associates Other

subsidiaries ventures financial

assets

Balance as at 1 January 2007 119,757 102,737 16,252 185 472 111

Movements in 2007:

Capital interests, acquired in the course

of a legal restructuring within the Group 1,185 1,185 - - - -

Incorporation of subsidiaries, called capital 18 18 - - - -

Capital interests disposed of in the course

of a legal restructuring within the Group -79,495 -79,495 - - - -

Share in the result 30,117 30,092 - 25 - -

Dividends received -206 - - -206 - -

Other movements 4 4 - - - -

Balance as at 31 December 2007 71,380 54,541 16,252 4 472 111

Movements in 2008:

Share in the results 40,600 40,526 - 75 -1 -

Redemption of loans -16,252 - -16,252

Currency differences and other movements -3,158 -3,145 - - - -13

Balance as at 31 December 2008 92,570 91,922 - 79 471 98

GRONTMIJ | ANNUAL REPORT 2008 121


Notes to the company financial statements

4. Receivables

In thousands of euros

31 December 2008 31 December 2007

Subsidiaries 101,182 105,922

Prepaid expenses and other receivables 250 1,642

101,432 107,564

5. Shareholders’ equity

Movements in shareholders’ equity are as follows:

In thousands of euros

Total Share Share Legal Translation Hedging Other Unapprocapital

premium reserve reserve reserve reserves priated

profit

Balance as at 1 January 2007 138,102 4,441 61,342 8,584 651 - 41,138 21,946

2006 profit appropriation -13,323 - - - - - 8,623 -21,946

Net result 2007 32,688 - - - - - - 32,688

Currency differences -1,481 - - - -1,481 - - -

Other movements 649 - - -4,921 - 647 4,923 -

Balance as at

31 December 2007 156,635 4,441 61,342 3,663 -830 647 54,684 32,688

2007 profit appropriation -19,541 - - - - - 13,147 -32,688

Net result 2008 38,320 - - - - - - 38,320

Currency differences -5,573 - - - -5,573 - - -

Other movements 3,770 - - 581 - -1,479 4,668 -

Balance as at

31 December 2008 173,611 4,441 61,342 4,244 -6,403 -832 72,499 38,320

122

GRONTMIJ | ANNUAL REPORT 2008


Notes to the company financial statements

Share capital

On 10 May 2007, the Annual General Meeting of Shareholders of Grontmij decided to split the shares in the proportion of 1:4. The relating

amendment of the Articles of Association necessary took place on 1 June 2007.

As a consequence of this split, the share with a nominal value of € 1 was split into four shares with a nominal value of € 0.25.

The authorised share capital of 60 million shares is divided into 30 million ordinary shares each with a nominal value of € 0.25, and 30 million

preference shares each with a nominal value of € 0.25.

The number of ordinary shares issued and fully paid-up as at 31 December 2008 was 17,764,920 (31 December 2007: 17,764,920).

Grontmij did not purchase any own shares. No preference shares were issued.

The Executive Board proposes to make a dividend payable out of the unappropriated profit for 2008 in the amount of € 1.15 (2007: € 1.10) per

(depositary receipt of a) share issued.

Share premium

The share premium is comprised of capital contributions from shareholders above nominal value, and is regarded as paid up capital.

Share premium is tax-free distributable.

Legal reserve

The legal reserve relates to the retained profits from equity accounted investees to the extent that the Group is not able to manage the

distribution thereof independently.

Translation reserve

This reserve comprises of currency translation differences relating to the translation of the financial statements of Group entities having a

functional currency other than the euro. This reserve qualifies as a legal reserve under Dutch law.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to

hedged transactions that have not yet occurred.

Other reserves

The reserve contains retained earnings of previous years and also includes changes in the legal reserve relating to retained earnings of equity

accounted investees.

Other movements in 2008 include the changes in fair value of available-for-sale financial assets during the year under review.

6. Loans and borrowings

This item concerns a straight-line redeemable subordinated loan, the balance of which by year-end 2008 is € 1,500,000 (2007: € 4,500,000).

The residual maturity is less than one year. The rate of interest is fixed at 7.875%. The factored repayment of the principal amount has been

subordinated to all other claims of existing and future creditors.

7. Related parties

A summary of Grontmij´s related parties is provided in note 33 to the consolidated financial statements.

GRONTMIJ | ANNUAL REPORT 2008 123


Notes to the company financial statements

8. Current liabilities

In thousands of euros

2008 2007

Loans and borrowings 1,500 3,000

Income tax -8,224 -4,715

Subsidiaries 27,033 20,844

Other liabilities 2,424 1,680

22,733 20,809

9. Remuneration of Executive Board and Supervisory Board

A summary of the remuneration of the Executive Board and the Supervisory Board pursuant to Article 2:383 par.1 of the Dutch Civil Code is

provided in note 33 of the consolidated financial statements.

In 2008 the Company employed four persons (2007: four).

10. Auditors´ remuneration

In thousands of euros

2008 2007

KPMG Other KPMG KPMG Other KPMG

Accountants network Total Accountants network Total

N.V.

N.V.

Audit of the financial statements 407 453 860 368 382 750

Other audit assignments 131 218 349 101 107 208

Tax advice - 87 87 - 53 53

Other non-audit services - - - - - -

538 758 1,296 469 542 1,011

11. Liabilities not recognised in the balance sheet

Contingent liabilities

Grontmij N.V. provided guarantees in 2008 amounting to € 32,907,000 (2007: € 521,000).

Liabilities not recognised in the balance sheet

Grontmij heads a single tax entity for corporate tax purposes, encompassing practically all of its 100% subsidiaries in the Netherlands.

As a consequence, Grontmij is severally liable for the tax debts of the single tax entity as a whole.

De Bilt, 11 March 2009

Executive Board

Supervisory Board

S. Thijsen F.L.V. Meysman

D.G.H. van der Werf

S.E. Eisma

Mrs B.W. Nørgaard

P.E. Lindquist

G.P. Dral

J.H.J. Zegering Hadders

124

GRONTMIJ | ANNUAL REPORT 2008


Other information

Statutory provisions on profit appropriation

The rules provided for under the Articles of Association governing the appropriation of profit can be summarised as follows:

o each year, the Executive Board, with the approval of the Supervisory Board, decides on what part of the profit is to be allocated to the reserves;

o profit distributions may not exceed the distributable part of the shareholders’ equity;

o no dividend is paid in any year in which a loss has been recorded. In subsequent years, no dividend may be paid until the recorded loss has

been reversed;

o the Annual General Meeting of Shareholders is entitled, however, based on an Executive Board proposal duly approved by the Supervisory

Board, to discharge this loss to the distributable part of the shareholders’ equity or to pay out a dividend chargeable to the distributable part of

the shareholders’ equity;

o profit is appropriated following adoption of the financial statements in which this is deemed to be justifiable.

Proposed profit appropriation 2008

The Executive Board proposes to pay a dividend chargeable to the unappropriated profit for 2008 in the amount of € 1.15 (2007: € 1.10) per

(depositary) share. In conformity with the report of the Supervisory Board, the following profit appropriation is proposed:

In thousands of euros

2008 2007

Net result for the year 38,320 32,688

Allocation to other reserves -17,890 -13,147

Dividend 20,430 19,541

GRONTMIJ | ANNUAL REPORT 2008 125


Auditor’s report

To: the Annual General Meeting of Shareholders of Grontmij N.V.

Report on the financial statements

We have audited the financial statements for the year 2008 of Grontmij N.V. (“the company”), De Bilt, as set out on pages 71 to 124. The financial

statements consist of the consolidated financial statements and the company financial statements. The consolidated financial statements

comprise the consolidated balance sheet as at 31 December 2008, consolidated income statement, statement of recognised income and

expenses and cash flow statement for 2008 and a summary of significant accounting policies and other explanatory notes. The company financial

statements comprise the company balance sheet as at 31 December 2008, company income statement for 2008 and the notes.

Management’s responsibility

The Executive Board of the company is responsible for the preparation and fair presentation of the financial statements in accordance with

International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code, and for

the preparation of the report of the Executive Board in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility

includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements

that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making

accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law.

This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures

selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation

of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of accounting estimates made by the company’s management, as well as evaluating the overall

presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our audit opinion.

Opinion with respect to the consolidated financial statements

In our opinion, the consolidated financial statements give a true and fair view of the financial position of Grontmij N.V. as at 31 December 2008,

and of its result, its cash flow and its recognised income and expenses for the year then ended in accordance with International Financial

Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code.

Opinion with respect to the Company financial statements

In our opinion, the company financial statements give a true and fair view of the financial position of Grontmij N.V. as at 31 December 2008 and

of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

Report on other legal requirements

Pursuant to the legal requirement under 2:393 sub 5 part f of the Netherlands Civil Code, we report, to the extent of our competence,

that the report of the Executive Board as set out on pages 24 to 57 is consistent with the financial statements as required by 2:391 sub 4 of

the Netherlands Civil Code.

Rotterdam, 11 March 2009

KPMG Accountants N.V.

W.L. van de Vrie RA

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GRONTMIJ | ANNUAL REPORT 2008


Report Stichting Preferente Aandelen Grontmij

The object of Stichting Preferente Aandelen Grontmij (the “Foundation”) is to look after the interests of Grontmij N.V., its related operations and all

stakeholders. This object can be pursued by acquiring preference shares and exercising the rights attached to those shares.

The option of issuing preference shares should be seen as an anti-take over measure. This protective measure, when taken, is temporary of nature

and would enable Grontmij N.V. to judge any undesired hostile take over bid or an undesirable concentration of voting power on its merits.

The articles of association of Grontmij N.V. provide the option of issuing preference shares. Pursuant to specific agreements, these shares may be

placed with the Foundation, established for that purpose. As at 31 December 2008, no preference shares were issued.

Activities

The board met on two occasions during the year under review. The following topics were dealt with during these meetings:

o the annual figures for 2007 and the half-year figures for 2008;

o the financing facility;

o the membership of the foundation’s board and its retirement schedule.

Membership

On 31 December 2008 the board consisted of the following members:

Jhr. R.J.M. de Beaufort (chairman)

Year born 1947 Nationality Dutch Retiring and eligible for reappointment 2011 Present position managing director of Bank Insinger

De Beaufort.

S.C. Peij

Year born 1970 Nationality Dutch Retiring and eligible for reappointment 2009 Present position director of Governance

University (Netherlands) BV.

A.J. ten Cate

Year born 1953 Nationality Dutch Retiring and eligible for reappointment 2012 Present position owner-director of Enatco BV,

a consultancy firm for the pharmaceutical industry.

During 2008, the Board reappointed Mr ten Cate for another four year term.

On 31 December 2008 Mr De Beaufort held 4,316 (depositary receipts) for Grontmij shares. On December 31 2008 Mr Peij and Mr Ten Cate

did not have (depositary receipts) for Grontmij shares. The remuneration of the chairman and the other board members amounted to € 4,538

(2007: € 4,538).

Other

The costs of the Foundation’s activities came up to a total of € 16,541 (2007: € 16,472) and are at the expense of Grontmij N.V., in conformity with

existing agreements. The Foundation is an independent legal entity in accordance with the provisions of Article 5: 71 paragraph 1 sub c of the

Act on Financial Supervision (Wet op het financieel toezicht).

Contact details

Stichting Preferente Aandelen Grontmij

P.O. Box 203

3730 AE De Bilt

The Netherlands

Contact: Grontmij N.V. company secretary,

Mrs S. van Nieuwkuyk, phone +31 30 220 75 39, email suzan.vannieuwkuyk@grontmij.com.

De Bilt, 18 March 2009

R.J.M. de Beaufort (chairman)

S.C. Peij

A.J. ten Cate

GRONTMIJ | ANNUAL REPORT 2008 127


Report Stichting Administratiekantoor van Aandelen Grontmij N.V.

With effect from 29 May 2006 certification is no longer considered as a protective measure. In accordance with the Code, the Stichting

Administratiekantoor van Aandelen Grontmij N.V. shall grant holders of depositary receipts a proxy in all circumstances and without limitation to

the holders of depositary receipts who so request. In exercising its voting rights, the trust office shall be guided primarily by the interests of the

depositary receipt holders, taking the interests of the company and its affiliated companies.

Activities

The Board met on two occasions during the year under review. In addition, informal consultations were also held with the Executive Board and

Supervisory Board of Grontmij N.V. The following topics were discussed during these meetings:

o the annual figures for 2007 and the half-year figures for 2008;

o preparations for the Annual General Shareholders Meeting of Grontmij N.V.;

o the membership of the foundation’s board and its retirement timetable.

During the year, the board of Stichting Administratiekantoor van Aandelen Grontmij N.V. (“the Board”) carried out its customary activities,

including accepting ordinary registered shares to administer them, issuing bearer depositary receipts for them and exercising the voting rights

attached to the shares. Proxies were also granted to holders of depositary receipts to enable them to exercise voting rights in respect of

the shares corresponding to their depositary receipts.

Nominal value of shares held in trust as at 31 December 2007 € 4,371,430

Increase in 2008 € 2,525

Nominal value of shares held in trust as at 31 December 2008 € 4,373,955

The Board was present at the Annual General Meeting of Shareholders of Grontmij N.V. held on 14 May 2008.

During this meeting the Board exercised it’s voting right on approximately 69% of the total number of available votes. After the explanations of

the Supervisory Board and the comments of the shareholders present, the Board explained its voting intentions to those present at the General

Meeting of Shareholders. On all resolutions, the Board voted in accordance with the recommendations made by the Supervisory Board of Grontmij

N.V. to its shareholders.

Membership

On 31 December 2008 the Board consisted of the following members:

B. van Nederveen (chairman)

Year born 1935 Nationality Dutch Retiring and eligible for reappointment 2009 Most important previous positions chairman of the board

of Hoechst Holland NV, president of the Royal institute of Engineers.

G.J.M. Braks

Year born 1933 Nationality Dutch Retiring and eligible for reappointment 2011 Most important previous positions President of the Upper

House of the Dutch Parliament, Minister of Agriculture, Nature Conservation and Fisheries.

E.P. Heiden

Year born 1939 Nationality Dutch Retiring and not eligible for reappointment 2008 Most important previous positions General Counsel

Royal DSM NV.

Mr Heiden served the Board until the end of 2008. The Board would like to extend its thanks to Mr Heiden for his contribution to the Stichting.

In 2009 the vacancy relating to the resignation of Mr Heiden will be filled. The Board will, before appointing a new Board member, enable holders

of depositary receipts to recommend to the Board a person for appointment as Board member.

On 31 December 2008 Mr Van Nederveen, Mr Braks and Mr Heiden did not have any (depositary receipts for) Grontmij shares in their

possession. The remuneration for the chairman amounted to € 6,807 (2007: 6,807) while that of the other board members amounted to

€ 4,538 (2007: € 4,538).

Other

The operating expenses of Stichting Administratiekantoor van Aandelen Grontmij N.V. amounted to € 22,937 (2007: € 22,859) and are borne by

Grontmij N.V. in accordance with agreements. The Foundation is an independent legal entity in conformity with the provisions of Article 5 : 71

paragraph 1 sub d of the Act on Financial Supervision (Wet op het financieel toezicht).

128

GRONTMIJ | ANNUAL REPORT 2008


Report Stichting Administratiekantoor van Aandelen Grontmij N.V.

Contact details

Stichting Administratiekantoor van Aandelen Grontmij N.V.

P.O. Box 203

3730 AE De Bilt

The Netherlands

Contact: Grontmij N.V. company secretary,

Mrs S. van Nieuwkuyk, phone +31 30 220 75 39, email suzan.vannieuwkuyk@grontmij.com.

De Bilt, 18 March 2009

B. van Nederveen (chairman)

G.J.M. Braks

GRONTMIJ | ANNUAL REPORT 2008 129


Country management

BELGIUM

DENMARK

J. Bosschem,

managing director

R.J. Boer,

controller

B.W. Nørgaard,

managing director

J.C. Wrang,

financial director

GERMANY

THE NETHERLANDS

B. Schierenbeck,

managing director

A. Lühr,

controller

G.P. Dral,

managing director

E.J.F. Bos,

financial director

POLAND

SWEDEN

M. Chrzanowski,

managing director

P. Glogowski,

financial director

U. Palmblad,

managing director

T. Stegerud,

financial director a.i.

UNITED KINDOM

L. Hughes,

managing director

D. Sadler,

financial director

130

GRONTMIJ | ANNUAL REPORT 2008


Country management

BELGIUM

Frans Smoldersstraat 18

1932 Zaventem

Belgium

T +32 27 25 01 10

F +32 27 25 45 02

www.grontmij.be

DENMARK

Granskoven 8

2600 Glostrup

Denmark

T +45 4348 6060

F +45 4348 6660

www.grontmij-carlbro.dk

GERMANY

Friedrich-Missler-Straße 42

28211 Bremen

Germany

T +49 421 20 32 6

F +49 421 20 32 747

www.grontmij.de

THE NETHERLANDS

De Holle Bilt 22

3732 HM De Bilt

P.O. Box 203

3730 AE De Bilt

The Netherlands

T +31 30 220 79 11

F +31 30 220 01 74

www.grontmij.nl

POLAND

ul. Ziębicka 35

60-164 Poznań

Poland

T +48 61 864 93 00

F +48 61 864 93 01

www.grontmij.pl

SWEDEN

P.O. Box 47303

100 74 Stockholm

Mejerivägen 1

Sweden

T +46 10 480 00 00

F +46 10 480 19 00

www.grontmij.se

UNITED KINDOM

Grove House

Mansion Gate Drive

Leeds

LS7 4DN

United Kindom

T +44 113 262 00 00

F +44 113 262 07 37

www.grontmij.co.uk

GRONTMIJ | ANNUAL REPORT 2008 131


Colophon

Edition Grontmij N.V., April 2009 Lay-out and design IK communicatie, the Netherlands Photography Grontmij Image

Database, Hadewych Veys, the Netherlands Spreads Lieske Meima Fotografie, the Netherlands Printer Drukkerij

De Raat & De Vries (Thieme GrafiMedia, Amsterdam, the Netherlands) Paper cover Propoff 250 gr/m 2 Paper Nordland

FSC 120 gr/m 2 Profijt; Nordland and Propoff are manufactured in a sustainable way and are ISO en FSC certified.

The original annual report is stated in Dutch. This document is a translation of the annual report in English.

In case of deviations between the English and the Dutch version, the latter prevails.

132

GRONTMIJ | ANNUAL REPORT 2008


Offices

See for our offices: www.grontmij.com


Grontmij N.V.

De Holle Bilt 22

Postbus P.O. Box 203

3730 AE De Bilt

T The +31 Netherlands

30 220 79 11

F T +31 30 220 34 79 67 11

corporate.communication@grontmij.com

F +31 30 220 34 67

www.grontmij.com

corporate.communication@grontmij.com

www.grontmij.com

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