Consolidated financial statement 2011 - Aquafin

Green light for clear water
Annex to the Annual Report
Consolidated financial
statement 2011
According to IFRS

Content
3
Report of the Board
of Directors on the
financial year 2011
21
Consolidated
financial statement
1

2
Consolidated financial statement 2011

Report of the Board
of Directors for
the financial year 2011
Consolidated financial statement
Most important developments during the financial year 4
Expansion of the wastewater treatment infrastructure for the Flemish Region 7
Management of the wastewater treatment infrastructure for the Flemish Region 10
Services beyond the scope of the agreement with the Flemish Region 13
Research and product development 14
Major risk factors 15
The most important developments after the close of the financial year 16
Comments with regard to the consolidated balance sheet 17
Comments on the consolidated profit and loss statement
and the overview of realised and unrealised results 18
3

4
Consolidated financial statement 2011
As set out in our strategic plan, Aquafin has continued with
the expansion and intensification of our core activities in
accordance with the model of 'customer intimacy'. The volume
of studies and tendered projects for the Flemish Region
and the municipal clients combined was exceptionally high
in 2011.
Operationally, we scored very well, with a treated-water
quality that was better than it had ever been. With those
results, we were able to strengthen our reputation as a centre
of expertise throughout the wastewater cycle in Belgium
and abroad.
Most important developments during
the financial year
FROM SUPPLY TO DEMAND-DRIVEN COMPANY
n
Clear commitments to stakeholders
Aquafin's unique selling proposition is our complete
familiarity with the wastewater cycle. At the European level,
we are among the leaders in every aspect of water treatment:
from sector expertise, technical and technological expertise
to operational experience, asset management and financial
expertise. As a result, we can offer our clients a full range of
services within the business model of 'customer intimacy'.
For our clients, that means custom work, transparent
budgets and clear schedules. We are not concerned solely
with satisfied customers who will return. We want all of our
stakeholders to have pleasant experiences when they have
dealings with Aquafin.
The greater the level of autonomy of teams and individual
employees, the clearer it will have to be for everyone what
the company stands for and where we want to go.
Aquafin already had a clearly defined mission, a vision and
explicit company values. Those values have been translated
further over the past year into concrete commitments to all
of our stakeholders. These commitments are not inflexibly
cast in stone; they are a framework that clearly shows how
personnel should treat customers and other stakeholders on
the basis of the company philosophy, without having to check
with superiors at every turn. That gives more freedom of
movement for taking initiative.
n
Creation of process-driven teams
To be able to work customer-driven, Aquafin had to
transform itself from being supply-driven to demand-driven.
In 2011, we went further with the implementation of processdriven
work throughout the organisation. As part of that
programme, the complete IT architecture was redesigned.
The first migrations will take place in 2012.
Demand-driven operations means much more than simply
turning the company structure, however. To be successful,
the learning capability of the organisation must be improved
and the autonomy of the personnel strengthened. Within the
company, we are creating multidisciplinary teams that are
collectively responsible for a complete process and we are
essentially abandoning the idea of specialised departments.
The biggest step in that area was the installation of the
business units at the end of last year; which should improve
the interaction between the core processes of Vision creation
on the network and Accelerated project execution and the
management process of Account management.
CONTINUOUS IMPROVEMENT
We believe that Continuous Improvement is such
a necessity that the way that we want to grow as an
organisation is defined as a process in Aquafin.
It is expressed by bringing improvement proposals
together across departments and prioritising them
on the basis of business cases, by monitoring
implementation and checking on the results achieved.
Specific Continuous Improvement disciplines, which
were previously scattered throughout the company,
have been brought together in the Business Excellence
department, which was established in 2011: Process
Management, Knowledge Creation, Cost Management,
and Energy Management.

FINANCING AQUAFIN IN A CHANGED MARKET
n
Implementation phase 2 purchase of VMM assets
n
Shift to institutional investors
In 2011, Aquafin's financing needs were much greater than
they had been in the previous years. That was primarily due
to the purchase of the properties and plants of the Vlaamse
Milieumaatschappij (Flemish Environmental Agency) that
the region had imposed. In the current financial situation,
it is advisable to prepare the financing before it is needed,
even though Aquafin had never had problems in that respect.
After the banking and financial crisis, the financing
landscape had become drastically different. The 'cost of fund' of
the banks has risen sharply and a high degree of diversification
between the banks has taken place. As a result, the banks
were limited in their ability to provide additional loans, but
the possibilities of borrowing via commercial paper from other
investors were sufficiently extensive. With its strong credit
rating, Aquafin certainly qualified. That alternative financing
was found with Belgian institutional investors, based on our
own borrowing documentation, and sought via BNP Paribas
Fortis and Dexia Bank Belgium.
n
New borrowing from the European Investment Bank
Negotiations are also underway with the European
Investment Bank for new credit. The EIB and Aquafin have been
working together since 1994. Aquafin is very grateful to that
institution for the advice and the support it has given during all
this time. Including the eighth loan that is now in preparation,
the European Investment Bank has supported the watertreatment
sector in Flanders to the amount of €1.4 billion.
n
New financing challenges
The evolution on the financial markets has had an impact
on the structure under which Aquafin meets its financial
needs. Until 2010, there was a match between the payments
of the principle on the loans over the long term and the
receipts from invoices to the Flemish Region / drinking water
companies. The result of the changed market conditions is
that Aquafin cannot continue to meet the financing
requirement with credit with the desired characteristics (loans
with terms of less than 30 years and 'bullet' loans where only
the interest is paid and not the principal, rather than loans
where the principle is also paid down). It therefore becomes
possible for the payments by the drinking water companies
not to completely cover the repayments of the loans, with the
result that there is a risk that no financing at reasonable terms
is available in the cash or capital markets at the moment that
the existing financing arrangements expire. Aquafin will always
be able to count on the drinking water companies/the Flemish
Region for revenues to repay all of the loans. The latter is
explicitly stated for the long-term loans, which fall under the
allocation agreement (allocation ratio).
In addition to the financing of the optimisation programme,
long-term financing has been acquired to purchase treatment
plants and the property of the Vlaamse Milieumaatschappij
(Flemish Environmental Agency). The first phase of the
purchase took place in 2010, for an amount of more than
€150 million. In 2011, the second phase of that operation
was executed and Aquafin purchased property and plants of
the VMM assets for nearly €154 million.
In 1994, under the terms of the management agreement
between the Flemish Region and Aquafin, the company
acquired the user rights for the treatment plants that had
already been established before the company was operating.
Those plants are not carried on the Aquafin balance sheets.
The capital spending for the renovations and expansion of
those plants, which Aquafin has had done over the previous
several years, are carried on our balance sheets. Inasmuch as
the management of those assets by two parties proved not
to be efficient, the Flemish Government decided to allow
Aquafin to purchase, operate and finance the plants and
the property that were in the hands of the VMM. To make
the financing of those purchases of the VMM plants possible,
the management agreement and the affectation agreement
were amended.
Part of the purchase was not done with borrowed capital,
but financed from equity, and is not charged in the drinking
water invoices. The matching amount may be charged if
the management agreement were ever to come to an end.
The part that is being financed with borrowed capital will
be charged over a period of 20 years. To finance the purchase,
Aquafin approached non-financial institutions, including
insurance companies and pension funds, whose own
obligations (cf. Solvency II) led them to favour this credit
formula. In general, they were interested in an amortised debt
repayment over 20 years, which matches the invoice streams
to the drinking water companies.
n
Aquafin´s credit rating matches that of the Flemish Region
Credit rating agency Moody´s lowered Belgium´s credit
rating at the end of 2011. A short time later, the Flemish Region,
the Francophone Community and the Walloon Region also
saw their credit ratings lowered. The Flemish Region went down
by two levels to Aa2, with negative prospects. That rating was
still higher than the rating of Belgium, which is Aa3.
The assessment of the creditworthiness of Aquafin is at the
same level as the Flemish Region. That adjustment was only
inspired by the close band that Aquafin has with the Flemish
Region. It is not affected by Aquafin's financial structure,
which is unchanged.
Report of the Board of Directors
5

6
Consolidated financial statement 2011
The P-1 short-term rating remained unchanged. Even with
that changed rating, Aquafin was still at the top of creditworthy
companies. The company continued to enjoy the
confidence of various lenders.
n
Active interest management
Through active management of the interest risk Aquafin
wishes to optimize the financing costs. In May 2006, the Board
of Directors approved the outlines of a dynamic management
procedure for interest-rate risks. The interest policy was
modified in 2008. In 2009, primarily the descriptions and
definitions were modified. No changes were made to the
principles themselves.
Active interest management can be applied to a maximum
of 35% of the underlying debt of Aquafin’s total long-term
debts. Its objective is to achieve interest savings. The portfolio
may be built up as follows: minimum of 65% of fixed interest
rates and 35% of variable rates, 25% of which with a maximum
ceiling and 10% fully variable. To cover future financing needs,
the interest rate policy results in a dynamic interestmanagement
programme up to 50% of the future long-term
debts, with a 5-year horizon. It is important to ensure that
the risks are covered and that an underlying loan matches
the coverage structure.
n
Bookkeeping converted to the international standard
As of year-end at 31 December 2011, Aquafin reports
according to the IFRS standards that apply. In addition to
reporting in accordance with the Belgian Generally Accepted
Accounting Principles (Belgian GAAP), consolidated IFRS
financial statements are also prepared. They include a balance
statement, an overview of realised and unrealised results,
a change overview of net equity, cash flow statement and
extensive explanations, including valuation rules.
EU FINE FOR BELGIUM - THE LATEST STATE
OF AFFAIRS
At the moment, Belgium is not compliant with the
provisions of the European Urban Waste Water Directive for
agglomerations of more than 10,000 people equivalents.
In respect of that situation, Europe is filing an application with
the European Court to have Belgium found to be in violation.
With respect to Flanders, there is only one agglomeration/
treatment plant – the one in Beersel – that is not completely
compliant. That plant is operational, but the mandatory
samples couldn’t be submitted for a full year yet.
The financial results of the interest management are
calculated against individual benchmarks (the result of an
individual strategy in comparison with the applicable interest
swap at the moment of the establishment/execution of the
structure). The interest cost of the underlying loan must be
taken together with the results of the structure built on top of
it, in order to see Aquafin's ultimate debt burden. The financial
results are offset with the drinking-water companies.
New structures were established in 2011 for our future
financing requirements. Existing strategies were also optimised.
That allows Aquafin to stay within the 35% to 50% range.
Half of the returns from the interest-rate management are
deducted immediately from the invoice to the drinking-water
companies. The other half is retained within the company as
a buffer for possible optimisations. At the end of the year,
the global result of all of the hedging operations combined is
reviewed so that every euro placed in the buffer is deducted
from the invoice to the drinking-water companies.

Expansion of the wastewater treatment
infrastructure for the Flemish Region
During 2011, we brought the people who were working on
the Vision creation of the network, the Accelerated Execution
of Projects and Account Management together into business
units. In doing that, we prepared our core processes for
future growth. In spite of the internal focus, a large number
of projects for expanding the treatment infrastructure in
Flanders were carried out. When we look at all of the contract
amounts for the region and for client municipalities
combined, 2011 was even one of the best years ever. We expect
that working in business units will really start to pay off in
2012, so that we can develop, execute and finish projects
completely in accordance with our own high quality standards
and we can also deliver the results that the clients want.
On 31 December 2011, the investment-project order
portfolio for the Flemish Region amounted to more than
€1.3 billion for 1,316 projects. Up until that date, Aquafin had
delivered 2,268 new-build and renovation projects worth
nearly €3 billion.
VALUE PROJECT PORTFOLIO
n
In design phase:
€934.03 mio
n
Delivered
€2,964.21 mio
Last year, we developed a multilateral agreement for
study contracts. That way, we want to expand a long-term
relationship with high-quality study bureaus and we can reserve
capacity in the market without disrupting it. The agreement
should also reduce the time required to award contracts.
The call for candidates has gone out.
The business units will also intensify the cooperation with
the operational teams and lead to treatment areas that
function optimally. The regional engineers within the Vision
creation process will play a particularly important role in our
asset management.
n
Increased tendering volumes
In 2011, Aquafin put projects worth €154 million out to
tender for the Flemish Region. That is €3 million more than in
2010. The target of €160 million was adjusted to €157 million
based on the actual prices that the contractors submitted
during the project tender process. Ninety-eight per cent of
that amount has been achieved. With the Urban Waste
Water Directive having been nearly completely implemented,
the projects that remained to be tendered were relatively
small. Such projects demand a lot of technical and
administrative monitoring, but each one of them contributes
individually to the global tendering volumes. For 2012,
the target has been set at €183 million, on the assumption that
that objective fits within the budgets of the Flemish Region.
n
n
Awarded and
contracted out:
€403.51 mio
Vision development concerning the expansion and
management of the wastewater treatment infrastructure
In hydraulic studies, the physical parameters of the system
are registered and formalised. In 2011, Aquafin delivered
36 hydronaut studies worth a total of more than €3 million.
Twenty-five of those were needed for the expansion of the
sewer system. The other 11 studies were intended to increase
the knowledge about the wastewater treatment areas.
For all agglomerations, a determination has been
made of the water-treatment infrastructure that is
a priority in order to comply with the Urban Waste
Water Directive. In municipalities of greater than
10,000 people equivalents, all of the treatment plants
have been delivered. All of the collector sewers have
already been put into use, but three projects are still to
be delivered. At the beginning of 2012, in agglomerations
of between 2,000 and 10,000 people equivalents, only
one treatment plant – in Melsbroek – was still missing.
That plant will become operational in the course of
2012. The remaining 13 priority collector sewers are all
in progress.
Report of the Board of Directors
7

8
Consolidated financial statement 2011
TENDER RHYTHM
mio EURO
300
250
200
150
100
50
DELIVERING RHYTHM
mio EURO
300
250
200
150
100
50
0
2003 2004 2005 2006 2007 2008 2009 2010 2011
0
2004 2005 2006 2007 2008 2009 2010 2011
n Aquafin n Other parties
n Budget n Total
By cooperating with municipalities and supramunicipalities,
the amount that Aquafin executed for the Region rose from
€154 million to €250 million.
For the tendering of commercial projects, 2011 was a top
year, with a total amount of more than €45 million. Both types
of projects combined give one of the highest tendering
volumes ever for projects for the expansion and optimisation
of the treatment infrastructure in Flanders.
n
Just as many projects completed, but fewer delivered
In 2011, Aquafin delivered projects worth a total of
€146 million for the Flemish Region. We executed projects
worth €158 million, in accordance with the agreed target,
but due to formal shortcomings in our delivery dossiers,
the client only considered €146 million in projects as having
been delivered. All of the treatment infrastructure built was
put into service though and the formal aspects in the
remaining dossiers were corrected early in 2012.
In 2011, 13 wastewater treatment plants were delivered:
in Engsbergen, Sint-Joris-Winge, Kemmel, Vissenaken,
Wetteren-Westrem, Kruiseke, Bavegem, Heldergem, Oplinter,
Asse-Bekkerzeel, Duffel-Mijlstraat, Hoepertingen and Geetbets.
Four treatment plants were renovated. Those plants are in
Sint-Armands, Heist, Bocholt and Itegem.
To transport the wastewater to the treatment
plants, Aquafin laid 171 km of additional pipelines
and put 55 pumping stations into operation. By the
end of 2011, Aquafin had a total of 256 treatment
plants, 1,252 pumping stations and 4,914 km of
pipelines under management. Of those pipelines,
3,734 km were laid by Aquafin. The remaining 1,180 km
is infrastructure that was taken over.
The delivery target for 2012 amounts to €183 million,
subject to the budgets and resources required being approved.
This target has not been that high for more than 10 years.
The targets for the commercial projects on behalf of the
municipalities are also getting higher every year.

WATER TREATMENT IN FLANDERS IS NEARLY AT THE LEVEL OF
THE NEIGHBOURING COUNTRIES
Before the establishment of Aquafin, barely 28% of
the household wastewater in Flanders was being treated.
Twenty years on, the gap in the degree of treatment
between the different basins is clearly narrowing and
the total amount of treated water has more than doubled
to 80%. That means that the Region is approaching the
treatment levels of the neighbouring countries.
Our neighbours began implementing the Urban Waste
Water Directive in 1991 with a much higher level of
treatment than Flanders: 94% in the Netherlands, 69% in
France, 83% in the United Kingdom and 86% in Germany.
Today, the treatment level in these countries is 5% to 14%
higher, while Flanders made progress of 52% during that
period. In absolute figures, there were more inhabitants
connected over the past 20 years in the neighbouring
countries, of course, but we are nevertheless proud of the
results achieved.
The progress that has been made is especially
noteworthy because it is more complex in Flanders to
expand the treatment infrastructure required than it is in
the neighbouring countries.
That is because of our high degree of ribbon
construction. Germany and the Netherlands, for example,
have very highly concentrated residential cores, making it
possible to connect hundreds of thousands of residents
to a single treatment plant with a limited number of
pipelines. In Flanders, many more collector sewers and
more small sewage works are needed to connect the same
number of inhabitants. In terms of the process technology,
those small works are also more complex.
With respect to the quality of the household waste
water treated, Flanders is already a leader in Europe.
Our treatment plants are at the top of the league tables
with respect to eliminating the waste flows delivered.
England and Wales may well be able to show treatment
percentages of 97%, for example, but only half (47%) of
the treatment plants remove the nutrients nitrogen and
phosphor. Several years ago, that percentage was only
42% of the plants in France.* In Flanders, on the other
hand, nutrients are removed from 98% of the sewer water
that is connected to the treatment infrastructure.
* Source: Eurostat.
Report of the Board of Directors
9

10
Consolidated financial statement 2011
Management of the wastewater treatment
infrastructure for the Flemish Region
In 2011, Aquafin achieved the best treatment results for
the household wastewater ever. Those good results are partly
due to the weather, but our good process management was
the decisive factor.
The effluent results of 2011 were evaluated for 249 wastewater
treatment plants (WWTPs). Those are the watertreatment
plans that the Flemish Region entrusted the
operation of to Aquafin in 1994 and the plants that Aquafin
built itself and delivered to the Flemish Region and that
the Flemish Environmental Agency currently has an inspection
programme for.
RECORD NUMBER OF TREATMENT PLANTS
COMPLIED WITH ALL OF THE STANDARDS
One water-treatment plant (light blue bar in the graph)
did not satisfy the effluent standards of the European Urban
Waste Water Directive. Until April 2004, the same standards
were also the sector standards for the Flemish Region.
The Jabbeke WWTP did not comply because of too many slight
standard overruns for BOD and COD. The plant also did not
achieve the mandatory elimination percentage for those
parameters and for suspended solids.
Two other treatment plants were only not compliant
because of the stricter standards of the VLAREM amendment.
They are shown in the graph with a middle blue bar.
The Lede WWTP came up 4% short from achieving the
mandatory elimination percentage for nitrogen. The annual
average for phosphor for the Eksel WWTP was 0.1 mg/l
too high.
In 2011, 246, or 98.8% of all plants, were compliant with the
emission limits imposed (orange bar in the figure). The graph
shows the development for the last ten years only, but there is
no doubt that these are the best effluent results since Aquafin
was founded.
EVALUATION OF THE WASTEWATER TREATMENT PLANTS
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
n Complying with all standards
n Non-compliant with the stricter Flemish standards of the “Vlarem Kleine Trein”
n Non-compliant with the 2003 standards

LARGEST AMOUNT OF NUTRIENTS
EVER SUPPLIED AND ELIMINATED
The average elimination percentage has been stable for
several years for BOD (98%), COD (90%) and suspended solids
(96%). In 1995, the Flemish government adopted a standard
of 75% for nitrogen and phosphorus for all of the public
wastewater treatment plants combined. Those targets were
also more than achieved in 2011 with 82% for nitrogen and
86% for phosphorus. 2011 was a top year with new record
elimination percentages for all of the parameters. Furthermore,
there have never been such large volumes of phosphor and
nitrogen delivered and eliminated.
An inhabitant would, according to an EPAS study
commissioned by the Vlaamse Milieumaatschappij (Flemish
Environmental Agency), not discharge 54 g BOD per day,
but only 44 g. Later studies by EPAS gave an average BOD load
of only 38 g per inhabitant. If the number of connected people
equivalents (PE) is determined on the basis of 44 g/PE/day,
then the result for BOD is also 4.7 million PE. During the
transportation of wastewater, no nutrient removal occurs.
Organic nitrogen is certainly bacterially converted to ammonia,
but this does not reduce the total nitrogen load. The over -
estimate for nutrients can be explained by nutrient-rich seepage
or discharged ground water and water from connected canals.
ONCE AGAIN MORE POLLUTANT LOAD
DELIVERED AND BIOLOGICALLY PROCESSED
The measured pollutant loads that are delivered to the
treatment plants can be expressed in terms of the number of
inhabitants that are already connected to the wastewater
treatment infrastructure. Flanders Region has more than
6.25 million inhabitants. With the treatment levels amounting
to approximately 80% in 2011, there are theoretically 4.9 million
residents connected to the collective wastewater treatment.
If the Flemish households whose wastewater is treated in the
two Brussels waste water treatment plants are deducted from
that total, this gives a total of 4.8 million people whose
pollutant load is assumed to be connected to the Aquafin
wastewater treatment plants. The pollutant loads of the
businesses that are connected to the collective treatment
system have not been included in that count.
For the design of wastewater treatment plants, the
calculations take account of the theoretical daily pollutant
load of each Flemish resident: 54 g BOD, 135 g COD, 90 g
suspended solids, 10 g nitrogen and 2 g phosphorus. If we
calculate the pollutant loads that were delivered in 2011 on the
basis of these quantities, then there is currently a pollutant
load for 4.7 million inhabitants being delivered (average of
the estimates on the basis of the 5 parameters). The data
on nutrients give an overestimate, the data on BOD and
suspended solids reveal an underestimate. Those figures are
accurate in terms of size with the pollutant loads that should
theoretically arrive at the water treatment plants.
There are two explanations for the underestimate on the
basis of the BOD data. Measurements conducted on the sewer
system in Tielt showed a decrease in the BOD concentration
of 18% as a consequence of biodegradation: micro-organisms
break down the BOD in the sewer. Moreover the assumed
theoretical daily pollutant load also seems to be incorrect.
BENCHMARKS CONFIRM GOOD
OPERATIONAL APPROACH
In 2011, Aquafin again took part in two international
benchmarks, the results of which were in line with
expectations. Participation in such exercises is also
interesting because it offers possibilities for
exchanging knowledge with the other participants.
The first study was carried out by the European
Benchmarking Cooperation, a not-for-profit organisation
that compares the performance of (waste) water
companies. Twenty-eight wastewater operators, most
of them European, took part in their most recent project.
The exercise showed that Aquafin is maintaining
a very high investment level in comparison with
the other companies. Our personnel cost per treated
cubic meter of wastewater was among the lowest.
That means that we work efficiently, especially given
the high labour costs in Belgium.
The second study was organised by the German
Aquabench, an organisation that is comparable to
the EBC, but then specifically for German (waste) water
companies. Eight wastewater treatment operators
of varying sizes participated. As the only foreign
participant in this exercise, Aquafin once again scored
well in terms of operations, in our cost per treated
people equivalent. Aquafin's were approximately
20% lower than with other participants, partly due to
different local conditions. The figures showed clearly
that our plants were running at high utilisation levels
vis-à-vis their design capacity. In terms of the use of
electrical energy, we scored average. The German
companies did score considerably higher in terms of
production of green energy, which is largely due to
other influent composition and more possibilities in
terms of co-digestion.
Report of the Board of Directors
11

12
Consolidated financial statement 2011
REMOVED POLLUTANT LOAD AND TREATMENT EFFICACY OF WASTEWATER TREATMENT PLANTS
n
Biological oxygen demand
n
Suspended solids
75
100
120
100
Removed waste load
(1,000 tonnes/year)
70
65
60
95
90
85
Removal percentage
Removed waste load
(1,000 tonnes/year)
110
100
90
95
90
85
Removal percentage
55
80
80
80
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
n
Chemical oxygen demand
n
Nitrogen
200
100
20
85
190
95
18
80
Removed waste load
(1,000 tonnes/year)
180
170
160
90
85
Removal percentage
Removed waste load
(1,000 tonnes/year)
16
14
12
75
70
65
Removal percentage
150
80
10
60
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
8
55
n
Phosphorus
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
Removed waste load
(1,000 tonnes/year)
3,2
2,8
2,4
2,0
90
85
80
75
70
Removal percentage
The graphs show the removed pollutant load of all of
the wastewater treatment plants combined, as well as the
elimination percentage. Per measured parameter (BOD, COD,
suspended solids, nitrogen and phosphorus) the difference is
determined between the biologically treated pollutant load
and the residual pollutant load that is discharged after
biological treatment. The different is the removed pollutant
load, expressed in 1,000 tonnes/year. The removal percentage
is the equivalent to the pollutant load removed during the
biological treatment, divided by the total biologically treated
pollutant load.
‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11
n
Removed waste load
l
Removal percentage

STANDARDS FOR TREATED DOMESTIC WASTEWATER
The treated waste water (effluent) must meet certain
standards, which depend on the size of the agglomeration
for which the plant was built. Up to 2004 these norms
were a copy of the European standards, imposed via
the European Urban Wastewater Directive. At the Flemish
level they were made stricter by a Vlarem amendment
during 2004 and 2006. Aquafin monitors five parameters:
biological oxygen demand (BOD), chemical oxygen
demand (COD), total nitrogen, total phosphorus and
suspended solids. The biological oxygen demand indicates
how much oxygen bacteria need to be able to break down
the organic pollutant load in 5 days’ time at 20° C in 1 litre
of treated wastewater.
When BOD values are high the bacteria develop so fast
that there is a risk that through their respiration all oxygen
in the water will be used. The chemical oxygen demand
indicates how much oxygen is needed to fully oxidize
the pollutant load present. The parameter suspended solids
provides a measure for the suspended (non-dissolvable)
solids that may remain in the treated wastewater.
Too much nitrogen and phosphorus in the water produces
an explosive algae growth. At night, these algae remove
oxygen from the water creating difficulties for fish, aquatic
plants and other organisms.
Services beyond the scope of the agreement
with the Flemish Region
The Minister of the Environment encourages Aquafin to
valorise its expertise with the municipalities and industry in
Flanders as well as abroad. Thanks to the custom work that
we do for our clients, we have become the biggest player in
the municipal segment. Cities and smaller municipalities are
increasingly choosing an agreement with Aquafin, sometimes
in conjunction with a drinking water company. Aquafin's
subsidiary Aquaplus has become well-known in Belgium over
the past year for the operation of industrial water treatment.
Outside Belgium, we have cast our net further with the
establishment of ASEWater Technologies, a joint venture with
a partner from India.
RELIABLE PARTNER FOR THE EXPANSION
AND MANAGEMENT OF THE MUNICIPAL
WATER-TREATMENT INFRASTRUCTURE
In order to comply with the Water framework directive,
the municipalities are expecting capital spending in the
amount of nearly €7 billion. Part of that (€0.7 billion) has been
taken over by the Region via the Local Pact with the
municipalities. But the remaining projects still require massive
capital investments, for most of which the municipalities
do not have the required technical expertise in-house.
Since the end of 2004, Aquafin has been permitted to
compete with the other sewer operators in the municipal
market. Municipalities may choose for a direct concession
agreement with Aquafin or join one of the cooperative
ventures that Aquafin has entered into with Vivaqua,
VMW (RioAct and Rio-P) and TWVW and AWW (rio-link).
In March, Aquafin joined rio-link by acquiring one third
of the shares. The other shares are held by water-link cvba.
In that way, the previous cooperation between AWW and
Aquafin (under the RI-ANT name) can be valorised further
within rio-link.
Operationally, rio-link works in two business units, with the
unit in Antwerp being responsible for sewage management
of the sanitation partners of AWW and the team in Ghent for
the sanitation partners of TMVW.
In 2011, one new concession started up and three
municipalities decided to take out expanded Rio-Totaal contracts
with different modules. Three municipalities joined RioAct and
two municipalities joined Rio-P. One municipality ended its
collaboration with Aquafin. At the beginning of 2012, 87 cities
or smaller municipalities had entered into a contract with
Aquafin, either directly or in combination with another party.
Report of the Board of Directors
13

14
Consolidated financial statement 2011
We have seen strong growth in the number of tenders and
deliveries both in our own concessions and in our cooperative
links. An increasing number of projects in progress are also
resulting from our own proposals for renovation, optimisation
or connection of remaining drainage points. We expect
that turnover in the municipal market will increase further
over the next few years, even though that volume will not
be significant in comparison with the turnover from our
regional contract.
By bundling the process of Vision creation, Accelerated
execution of projects, and Account management into business
units in Aquafin, we shall undoubtedly be better able to satisfy
the desires that our clients have.
SUPPORT FOR INDUSTRY AND FOREIGN
PROJECTS VIA AQUAPLUS
Aquaplus NV, the commercial subsidiary of Aquafin,
concentrates on industrial requirements in Belgium.
Abroad Aquaplus assists to governments, administrations
and companies in achieving their environmental norms.
Aquaplus offers customised solutions for all stages within
the wastewater cycle.
Aquaplus has some good contracts in Flanders that link
to the core activities of Aquafin. Over the past few years, the
primary growth was taking place in large operating contracts
for companies. The Flemish Region had clearly asked Aquafin
to apply its knowledge and experience abroad as well, however.
Aquaplus itself does not have enough brand-awareness or
financial resources to be able to attract and execute large
projects. Usually, our subsidiary has a role as a subcontractor
to apply specific knowledge in foreign projects. Aquaplus is
now walking a second path, though. November 2011 saw the
christening of ASEWater Technologies, a joint venture between
Aquaplus and the India-Belgium company ASE Structure
Design. Thanks to that cooperation with a foreign partner,
which is solidly anchored in the local market, Aquaplus
expects to be able to avoid those obstacles and penetrate
a large sales market. The company will be presenting itself as
an Indian company with European expertise.
PROTOCOL FOR COMMERCIAL CONTRACTS
In 2011, Aquafin signed a protocol with the Flemish Region
that determines the conditions under which Aquafin is
permitted to provide personnel and resources to Aquaplus
and for municipal contracts. That protocol provides clarity
for both parties.
Research and product development
Aquafin's research activities help to make it possible to
offer customised sustainable technological solutions to our
clients. Aquafin is considered to be the leading technical
expert in Flanders with respect to the complete wastewater
cycle. The immediately usable research that Aquafin conducts
concentrates on cost-control, guaranteeing the effluent
standards and introducing the best available technologies.
The strategic research is grouped around the theme areas
of climate change, integrated water management and asset
management of the (sewer) infrastructure.
IMMEDIATELY USABLE RESEARCH
With Aqua3M, our proprietary dynamic water-treatment
modelling system, proposals were made in 2011 to make the
operations at six treatment plants more sustainable. The same
exercise was done for a foreign client of subsidiary company
Aquaplus.
The Flemish Region (CIW) called on our knowledge and
experience with integrated detail modelling of our hydraulic
experts in the context of the review of the Code of Good
Practice for the design of a sewage system. We have also taken
great steps in the implementation of real-time control of
the sewage system in the Kessel-lo study area. Over the course
of the year, a new methodology for corrosion protection
was implemented and validated in several test cases.
The Aqua3S platform for dynamic modelling of the
formation of sulphides in sewage systems is ready for
validation based on the measurement results. A new
automated clearing programme for sewers was also
implemented last year.

STRATEGIC RESEARCH
In 2011, Aquafin was active in five research projects with
external partners. Sewage+ is a Flemish research project
financed as part of MIP2 and coordinated by Vito. The aim is
to develop new concepts in water treatment to achieve
maximum energy recovery, such as by mixing household
wastewater with concentrated waste flows. Four projects are
being financed by Europe and were started up last year.
In a municipal environment, the heat that is still present in
the sewage can be profitably put to use. As part of the INNERS
project, Aquafin is helping to study the potential benefits
for the environment of an application at large scale.
Minotaurus is testing new technologies for eliminating
organic polluting substances from wastewater, ground water
and the soil. In the future, the standards that the treated
water will have to comply with will only become more strict.
Sanitas wants to minimise the impact of urban water systems
on climate change and deal with future variations in water
quantity and quality. Raingain looks at the availability of
detailed precipitation and flooding data. That should make it
possible for operational water managers in the city to respond
adequately to heavy precipitation and to prevent damage due
to flooding.
MEMBRANE EXPERT
With the rise of membrane technologies,
Aquafin carried out extensive pilot studies, followed
quickly the first operational membrane bio-reactor in
the Benelux. That technology is now being used to
treat the wastewater at several large and small plants.
Based on our experience, we developed our own
hybrid treatment process, with a demonstration
installation at the Aartselaar water treatment plant.
The Aquafin concept is distinguished from other
concepts by using only one common bio-reactor and
because the process control is based on whether there
is precipitation. That makes it ideal for expanding the
capacity of traditional activated sludge system where
little extra space is available.
Major risk factors
This section gives an overview of developments in the areas
that include any risk to the company.
LEGAL DISPUTES
n
Flooding in a residential area
This dossier deals with water damage suffered by
approximately four hundred residents of a residential
neighbourhood in 1998. At the end of 2010, the court made
a ruling that was favourable to Aquafin, with the majority of
the claims having lapsed, or being ruled to be inadmissible or
unfounded. The plaintiffs filed an appeal against that ruling
in April 2011. The aforementioned developments do not give
any cause for changing the previous decision of not making
any provision in this matter.
INSURANCE CLAIMS
n
Insufficient concrete reinforcement at the Deurne WWTP
In 2007, it was discovered that, due to a design error at the
water treatment plant in Deurne, the walls of certain aeration
basins were not reinforced adequately. According to Aquafin,
that damage claim is partially covered by our ABR (all
construction risks) insurance policy and largely by the
professional liability insurance policy of the study firm
concerned. In 2008, an investigation was held with regard to
a suitable repair method, the most obvious repair period and
a suitable contractor. Repair work started effectively in 2009.
The work has largely been completed at the time of writing.
The requests for repayment of the repairs costs, that have
been submitted thus far, were effectively compensated by
the ABR insurance company.
Report of the Board of Directors
15

16
Consolidated financial statement 2011
In 2011, the amount not paid out by the ABR insurer was
partly recovered from the study bureau that made the design
error and partly from the inspection body that was active on
the job site. Those recovery procedures are ongoing. For the
part not paid by the ABR insurer, a provision has been made as
a precaution.
n
Problems with concrete at the Bruges WWTP
During the provisional delivery of the renovated waste -
water treatment plant in Bruges, an outline of the armouring
in the concrete was detected in one of the aeration basins.
It was determined later that the damage continued to spread,
and not only in this basin. An analysis commissioned by
Aquafin identified two causes: insufficient concrete coverage
and increased chloride values. A repair methodology was
devised in consultation with the contractor. Where necessary,
the concrete has to be repaired and augmented. Additionally,
cathodic protection also has to be implemented.
The actual repairs were carried out over the past few years
and are continuing in 2012. The costs of the first part of
the repairs referred to were borne by the contractor, the costs
for the last part by Aquafin. A settlement has been reached
between the insurance company and the policyholders and
between the policyholders themselves. The ABR insurance
company, ACI, paid out a substantial amount. That amount
covered the repair and protection measures already taken
and will also cover the costs of the work that is still to
be done. In this dossier, the facts don’t show the necessity
of making provisions.
FINANCIAL REPORTING
Inasmuch as the methodology of the management
agreement provides for a posteriori approval of Aquafin's
annual financial report, the possibility that some compensations
may not ultimately be approved by the Flemish Region cannot
be discounted entirely.
The most important developments after
the close of the financial year
APPROVAL OF THE OPTIMISATION
PROGRAMME 2013
On 16 December 2011, the Flemish Government again set
the budget for the expansion of the supramunicipal
water-treatment infrastructure for programme year 2013 at
€250 million. On 31 January 2012, the assignment to
implement that programme was presented to Aquafin by
the Flemish Minister of the Environment Joke Schauvliege.
The optimisation programme 2013 provides for a budget
for 134 new projects and 21 projects that have been moved
into this programme. In addition, the study work only
(preparation of the technical plan) was assigned for 10 projects.
The initial estimates for those projects amount to €112 million,
€74 million of which has been designated for capital spending
under the local pact with the municipalities.
To cope with future price increases for those projects,
€88 million has been reserved. In this programme, the
remaining €50 million has been explicitly allocated to cover
the overruns of the investment and renovation programme
from previous programme years.
The optimisation programmes are being drawn up by
the Vlaamse Milieumaatschappij (Flemish Environmental
Agency), in consultation with Aquafin, the provinces and
the basin administrators. They include projects that focus on
the additional sanitation of various discharge locations,
the construction of small-scale wastewater treatment works
and the construction of strategic rainwater piping to improve
the existing infrastructure. When choosing the projects,
attention is given to their ecological and economical
profitability.

Comments with regard to the consolidated
balance sheet
At the end of the financial year, the balance sheet total
amounted to €2,296 million, which is €425 million higher than
the last financial year.
That increase is largely due to the growth of the long-term
receivables in the context of the management agreement.
This increase of those receivables is due to a net growth
of investments in the water treatment infrastructure, which
have been carried out at the order of the Flemish Region.
In 2011, for example, investment and optimisation projects of
a total contracting value of nearly €146 million were delivered.
On the other hand, Aquafin bought plants from the Vlaamse
Milieumaatschappij (Flemish Environmental Agency) in 2011,
for nearly €154 million as part of the implementation of
addendum No. 7 to the management agreement. All of the
plants remain the property of Aquafin until the end of the
management agreement with the Flemish Region. The assets
under construction, which saw growth of 8% to €271 million in
2011, are part of those receivables.
The compensations that are yet to be invoiced for work
outside the management agreement are included under
the other financial assets. The increase in that entry is
the result of the increased construction activity for similar
'commercial' projects.
In 2011, Aquafin found itself facing greater financing
requirements than it had in previous years due to the
purchase of property and plants of the VMM in the context
of addendum no. 7 of the management agreement. The banks
were limited in their ability to provide additional loans
because they were themselves confronted with increased
costs and new regulations. Belgian institutional investors,
on the other hand, were very interested in financing Aquafin.
That opportunity was therefore utilised to the full: €285
million in financing was obtained via that channel. Inasmuch
as it was not possible to apply that full amount to financing
projects immediately, there was a temporary cash surplus and
investments of nearly €53 million were made. In 2012, those
funds are to be used to finance projects.
The provision for risks and charges relates to legal disputes,
insurance dossiers, disputes in the context of the execution
of the management agreement, and processing the sludge
buffered in the plants.
Long-term financing is based on the allocation agreement.
It stipulates that the balance of the long-term credits must be
smaller than the future claims that Aquafin has on the drinking
water companies and the Flemish Region, respectively.
These claims consist of the parts of the investment projects
that have not been paid, but that have already been delivered.
At the end of 2011, this sum amounted to €1,495 million.
In 2011, Aquafin had taken up €510 million in long-term credits,
€75 million of which was with the European Investment Bank,
€150 million with commercial banks, and €285 million with
institutional investors. Taking the repayment of loans that had
already been taken up into account, the balance of the longterm
bank debt under affectation amounts to €1,459 million,
nearly €157 million of which must be repaid within the year.
At the end of 2011, short-term financing had been reduced
sharply due to the long-term financing of the VMM assets
purchased. In the past book year, there was a decrease in shortterm
financing via commercial paper, from €140.6 million at
the end of 2010 to €73.0 million at the end of 2011.
Aquafin has a credit line of €180 million, including the
syndicated loan for the short-term financing of activities in
the context of the management agreement. None of the
credit line was taken up by the end of 2011. Aquafin has a credit
line of €17 million available for the short-term financing of
municipal projects. Of that amount, €9 million was taken up
by the end of 2011.
Aquafin uses derivatives to hedge interest risks arising
from the financing activities. The (negative) market value of
the hedging structures is included under the other long-term
financial liabilities.
In the context of the financing for the aforementioned
purchase of plants from the VMM, the capital was increased
by €50 million on 13 December 2011. Of that amount, €12.5
was deposited.
Report of the Board of Directors
17

18
Consolidated financial statement 2011
Comments on the consolidated profit and loss
statement and the overview of realised
and unrealised results
The management contract with the Flemish Region
stipulates that the compensation of Aquafin will take place
on the basis of passing on all reasonable costs, increased by
a compensation for the shareholders that is based on their
contribution to the company’s equity capital. From this, it follows
that to a large extent the costs and revenues are a reflection
of each other.
The increase in costs, and in particular the costs of raw
materials and additives, services and various goods, and
personnel costs is in line with the growth of the infrastructure
that is being operated and extended by Aquafin, both within
and outside the management agreement.
The part of the income tax that relates to the activities
under the Management Agreement can be charged to the
drinking water companies as a reasonable cost.
The biggest part of the changes to the market value of
the hedging structures over 2011 – the part that relates to
the qualifying cash-flow hedges – is included in the overview
of the realised and unrealised results. Inasmuch as Aquafin
is entitled under the management agreement to receive
compensation for the costs of financing, changes in
the market value of the financial instruments are recognised
as receivables vis-à-vis the unrealised results.
The major increase in financing through borrowing resulted
in an increase of the costs of debt by €7.3 million in comparison
with the financial year 2010. On the other hand, some of the
change to the market value of the hedging structures over 2011
has been included in the profit and loss statement.
With the active management of the interest risk, Aquafin
wishes to optimise the financing costs. Since 2006, the Board
of Directors has approved the implementation of the dynamic
management of the interest risk, with the outlines for interest
management being defined.
After booking the provisions, the value depreciation, the costs
not passed on to the Flemish Region and the revenues, and
with the inclusion of the results of the commercial activities,
profits before taxes amount to €8.03 million.
Starting with tax year 2007, the concept of notional
interest deduction was introduced in the corporate tax, so that
the cost of wastewater treatment is limited for residents.
Also the application of the increased investment deduction
for energy-saving and environmentally friendly investments
for Research and Development has a favourable effect on
the corporate tax.

Report of the Board of Directors
19

20 Consolidated financial statement 2011

Consolidated financial
statement
Statutory auditor’s report 22
Consolidated financial statement 24
Notes to the consolidated financial statement 29
21

22
Consolidated financial statement 2011
Statutory auditor’s report
STATUTORY AUDITOR’S REPORT TO
THE GENERAL MEETING OF SHAREHOLDERS
OF AQUAFIN NV ON THE CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2011
In accordance with the legal requirements, we report to
you on the performance of our mandate of statutory auditor.
This report contains our opinion on the consolidated financial
statements as well as the required additional comments.
UNQUALIFIED OPINION ON THE CONSOLIDATED
FINANCIAL STATEMENTS
We have audited the consolidated financial statements
of Aquafin NV and its subsidiaries (collectively referred to as
‘the Group’) for the year ended 31 December 2011, prepared in
accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union, and with the legal and
regulatory requirements applicable in Belgium. These consolidated
financial statements comprise the consolidated balance sheet
as at 31 December 2011, and the consolidated statements of
income, changes in equity and cash flows for the year then
ended, as well as the summary of significant accounting
policies and other explanatory notes. The consolidated
balance sheet shows total assets of € 2.296.068 (‘000) and the
consolidated statement of income shows a profit for the year,
share of the Group, of € 8.028 (‘000).
n
Responsibility of the board of directors for the preparation
and fair presentation of the consolidated financial
statements
n
Responsibility of the statutory auditor
Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
We conducted our audit in accordance with the legal
requirements and the auditing standards applicable in
Belgium, as issued by the Institute of Registered Auditors
(Instituut van de Bedrijfsrevisoren). Those standards require
that we plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from
material misstatement.
In accordance with these standards, we have performed
procedures to obtain audit evidence about the amounts
and disclosures in the consolidated financial statements.
The procedures selected depend on our judgment, including
the assessment of the risks of material misstatement of
the consolidated financial statements, whether due to fraud
or error. In making those risk assessments, we have considered
internal control relevant to the Group’s preparation and fair
presentation of the consolidated 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 Group's internal control.
We have evaluated the appropriateness of accounting policies
used, the reasonableness of significant accounting estimates
made by the Group and the presentation of the consolidated
financial statements, taken as a whole. Finally, we have
obtained from the board of directors and the Group’s officials
the explanations and information necessary for executing
our audit procedures. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our opinion.
The board of directors is responsible for the preparation
and fair presentation of the consolidated financial statements.
This responsibility includes: designing, implementing and
maintaining internal control relevant to the preparation and
fair presentation of consolidated 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.

n
Opinion
In our opinion, the consolidated financial statements for
the year ended 31 December 2011 give a true and fair view
of the Group’s financial position and of the results of its
operations and its cash flows in accordance with IFRS as
adopted by the European Union, and with the legal and
regulatory requirements applicable in Belgium.
ADDITIONAL COMMENTS AND INFORMATION
The preparation and the assessment of the information
that should be included in the directors’ report on the
consolidated financial statements are the responsibility of
the board of directors.
Our responsibility is to include in our report the following
additional comments, which do not modify the scope of our
opinion on the consolidated financial statements:
• The directors’ report on the consolidated financial
statements deals with the information required by law and
is consistent with the consolidated financial statements.
We are, however, unable to comment on the description
of the principal risks and uncertainties which the entities
included in the consolidation are facing, and on their
financial situation, their foreseeable evolution or the
significant influence of certain facts on their future
development. We can nevertheless confirm that
the matters disclosed do not present any obvious
inconsistencies with the information that we became
aware of during the performance of our mandate.
Antwerp, 8 March 2012
Ernst & Young Reviseurs d’Entreprises SCCRL
Statutory auditor
represented by
Ronald Van den Ecker
Partner
Ref.: 12RVE0088
Consolidated financial statement
23

24
Consolidated financial statement 2011
Consolidated financial statement
CONSOLIDATED BALANCE SHEET (at 31 December 2011)
At 1 January
(in €000) Background 2011 2010 2010
ASSETS
FIXED ASSETS
Long-term receivables Management Agreement 5 2,056,559 1,727,763 1,464,186
Other financial assets 5.1 27,440 10,373 9,884
Total 2,083,999 1,738,136 1,474,069
CURRENT ASSETS
Short-term receivables Management Agreement 5 111,643 107,436 88,684
Trade receivables and other receivables 5.2 27,188 20,477 25,226
Other financial liquid assets 5.3 1,476 913 452
Funds and cash equivalents 5.4 71,763 4,259 38,340
Total 212,069 133,085 152,701
TOTAL ASSETS 2,296,068 1,871,220 1,626,770
EQUITY AND LIABILITIES
NET EQUITY
Share capital 5.5 210,900 198,400 149,429
Group reserves 5.6 & 5.7 27,741 26,437 28,188
Total equity 238,641 224,837 177,617
LONG-TERM LIABILITIES
Interest-bearing loans 5.8 1,568,254 1,217,408 1,173,362
Other long-term financial liabilities 5.9 135,401 44,691 20,096
Provisions 5.1 7,064 2,139 2,173
Pension liabilities 5.11 6,827 6,907 6,589
Total 1,717,546 1,271,145 1,202,219
CURRENT LIABILITIES
Commercial debts and other payables 5.12 83,115 79,447 69,559
Interest-bearing loans 5.8 239,910 281,033 163,487
Other short-term financial liabilities 5.13 15,086 13,056 13,768
Taxes payable 5.14 1,770 1,701 121
Total 339,881 375,238 246,935
Total liabilities 2,057,427 1,646,383 1,449,153
TOTAL EQUITY AND LIABILITIES 2,296,068 1,871,220 1,626,770

CONSOLIDATED PROFIT AND LOSS ACCOUNT (for financial year 2011)
(in €000) Background 2011 2010
CONTINUING OPERATIONS
Services rendered 6 297,445 247,956
Revenues 297,445 247,956
Other company income 6.1 15,804 6,803
Raw materials and additives, services and miscellaneous goods 6.2 -163,426 -125,755
Personnel costs 6.3 -59,187 -55,982
Write-offs, amortisations and special devaluations 6.4 -344 -212
Other charges 6.5 -4,074 -3,394
Costs of financing 6.6 -79,323 -62,302
Financing income 6.7 2,237 846
Profit before taxes from ongoing business activities 9,132 7,960
Tax burden 6.8 -1,980 -910
Charge-through of tax burden via Management Agreement receivables 6.8 876 397
Profit from ongoing business activities 8,028 7,447
NET PROFIT 8,028 7,447
To be allocated to:
Owners of equity instruments of the parent company 8,028 7,447
Result per share (€)
ordinary profit per share, to be allocated to holders of
ordinary shares of the parent company 6.9 9.91 9.31
diluted profit per share, to be allocated to holders of
ordinary shares of the parent company 6.9 9.91 9.31
Profit per share from ongoing business activities (€)
ordinary profit per share from ongoing business activities,
to be allocated to holders of ordinary shares of the parent company 6.9 9.91 9.31
diluted profit per share from ongoing business activities,
to be allocated to holders of ordinary shares of the parent company 6.9 9.91 9.31
Consolidated financial statement
25

26
Consolidated financial statement 2011
CONSOLIDATED OVERVIEW OF REALISED AND UNREALISED RESULTS
(for financial year 2011)
(in €000) Background 2011 2010
NET PROFIT 8,028 7,447
UNREALISED RESULTS
Net increase in value of cash flow hedges 5.9 -79,711 -20,303
Charge-through of tax burden via Management Agreement receivables 5.9 79,711 20,303
Actuarial profits and losses on defined contribution plans 5.11 564 172
Charge-through of tax burden via Management Agreement receivables 5.11 -564 -172
Unrealised results after taxes 0 0
TOTAL REALISED AND UNREALISED RESULTS AFTER TAXES 8,028 7,447
To be allocated to:
Owners of equity instruments of the parent company 8,028 7,447

CONSOLIDATED CHANGE OVERVIEW OF EQUITY
(at 31 December 2011)
EQUITY ATTRIBUTABLE TO HOLDERS
OF THE EQUITY INSTRUMENTS
OF THE PARENT COMPANY
(in €000) Share capital Group reserves Total equity
AT 1 JANUARY 2011 198,400 26,437 224,837
Profit over the financial year 8,028 8,028
Unrealised results 0 0
REALISED AND UNREALISED RESULTS 0 8,028 8,028
Paid-up capital 12,500.0 0.0 12,500
Dividends -6,724 -6,724
AT 31.12.11 210,900 27,741 238,641
CONSOLIDATED CHANGE OVERVIEW OF EQUITY
(at 31 December 2011)
EQUITY ATTRIBUTABLE TO HOLDERS
OF THE EQUITY INSTRUMENTS
OF THE PARENT COMPANY
(in €000) Share capital Group reserves Total equity
AT 1 JANUARY 2010 149,429 28,188 177,617
Profit over the financial year 7,447 7,447
Unrealised results 0 0
REALISED AND UNREALISED RESULTS 0 7,447 7,447
Paid-up capital 48,971 0 48,971
Dividends -9,198 -9,198
AT 31.12.10 198,400 26,437 224,837
Consolidated financial statement
27

28
Consolidated financial statement 2011
CONSOLIDATED CASH-FLOW OVERVIEW (for financial year 2011)
(in €000) Background 2011 2010
OPERATIONAL ACTIVITIES
Payments to suppliers -157,537 -119,758
Payments to personnel -59,189 -55,982
Client receipts 7.1 407,661 364,992
Corporate taxes paid -1,713 -102
Net operational cash flow 189,223 189,150
INVESTMENT ACTIVITIES
Acquisitions under the Management Agreement receivables -367,673 -366,476
Net investment cash flow -367,673 -366,476
FINANCING ACTIVITIES
Financing receipts 442,400 295,413
Financing repayments -141,357 -133,529
Interest paid -56,419 -56,357
Receipts from capital increase 12,500 48,971
Dividends paid out -6,724 -9,198
Other investment transactions (net) -4,446 -2,056
Net financing cash flow 245,954 143,245
Net increase in funds and cash equivalents 67,504 -34,081
FUNDS AND CASH EQUIVALENTS ON 1 JANUARY 4,259 38,340
FUNDS AND CASH EQUIVALENTS ON 31 DECEMBER 71,763 4,259

Notes to the consolidated financial
statement
General information
INFORMATION ABOUT THE COMPANY
Aquafin is a limited liability public company that was
founded on 25 April 1990. The company is located at
2630 Aartselaar, Belgium. On 29 September 2009, Aquafin
issued a bond loan that is listed on Euronext Brussels
(www.aquafin.be/UserFiles/File/pdf/KT_-_Fortis_Aquafin_-
_Prospectus__final.pdf).
For a description of the company's primary activities,
please see the annual report.
The consolidated financial statement for financial year 2011
was authorized for issue by the Board of Directors of the
company on 8 March 2012.
Aquafin NV is a 100% subsidiary of the Vlaamse Milieu -
holding (Flemish Environmental Holding Company).
Critical accounting judgments and key sources
of estimation uncertainty
BASIS FOR THE PREPARATION, VALUATION
RULES AND CONSOLIDATION
n
Basis of presentation
The consolidated financial statements are presented under
the historical cost convention, except for derivatives that were
valued at their fair value. The consolidated financial statement
is presented in (thousands of) euros.
n
Conformity declaration
The consolidated financial statement of the group was
prepared in accordance with the International Financial
Reporting Standards (IFRS), as published by the IASB and
accepted in the European Union.
n
Principles of consolidation
The consolidated financial statement of financial year 2011,
ending on 31-12-2011, comprises the company and its
subsidiaries (hereinafter: 'the group') and the interests of
the group in related participations.
All of the entities of the group use the same principles for
financial reporting.
a. Subsidiaries
Subsidiaries are entities over which the group has
decisive influence, which means that the group is able,
directly or indirectly, to govern the financial and
operational policies of an entity so as to obtain benefits
from its activities. The financial statement of a
subsidiary is included in the consolidated financial
statement from the date of acquisition until the date
when control is relinquished.
b. Transactions eliminated by the consolidation
All of the intercompany balances, profits and losses, and
unrealised profits, losses and dividends arising from
transactions within the group are eliminated completely
when preparing the consolidated financial statement.
IMPORTANT ACCOUNTANT EVALUATIONS,
ASSESSMENTS AND ASSUMPTIONS
n
Evaluations
It is the opinion of management that provisions for
personnel remuneration, extraordinary devaluations, etc.,
are assessed on the basis of market-value parameters.
Consolidated financial statement
29

30
Consolidated financial statement 2011
The early retirement scheme is also processed as a defined
benefit plan inasmuch as the group has an actual liability with
respect to the employees concerned. The group acknowledges
a provision on the balance that is calculated in accordance
with the ‘projected unit credit method’.
n
Estimates and assumptions
To execute its (supramunicipal) contracts, Aquafin NV
entered into a management agreement with the Flemish
Region. The management agreement sets out the tasks of
Aquafin NV and the payments that the company will receive
for those tasks.
The elements from that management agreement, which
have been set out below, are crucial to the further assessment
of the accounts.
• All of the reasonable costs that Aquafin NV makes in the
context of the supramunicipal sanitation of household
wastewater are paid by the Flemish Region through
the drinking water companies.
• The management agreement has a rolling nature, which
means that it is automatically extended every year
unless one of the parties has terminated the agreement.
The notice period for termination is 20 years.
• During the execution of the management agreement,
Aquafin NV has the right of use and enjoyment of the
infrastructure created, purchased or leased by the
company. At the end of the management agreement
– after the settlement of all remaining payments due –
the ownership of that infrastructure will be transferred
to the Flemish Region at no charge.
• During the execution of the management agreement,
the construction and operations risks are borne by
Aquafin NV.
The interpretation IFRIC 12 - Service Concession Agreements
applies to public-private agreements if the following
conditions are satisfied:
• the party that grants the concession ('grantor') controls
or regulates the services that the operator is required
to provide with the infrastructure, whom those services
are to be delivered to, and the price;
• the grantor controls the ultimate right through
ownership. In other words, the grantor has control over
the significant residual value in the infrastructure at
the end of the life of the agreement.
The most important characteristic of the aforementioned
interpretation is the nature of the services. The activities of
the operator must be of ´public utility´ (the so-called 'public
service obligation'). The services related to the infrastructure
are provided by Aquafin to the public (in the broad sense of
the term) within a pre-determined policy, i.e. the management
agreement. This determines which 'public' services are to be
provided, to wit, the expansion and management of the
supramunicipal infrastructure for treating household
wastewater.
Infrastructure assets within the scope of the agreement
are assets built or acquired for use within the context of
the concession agreement or existing infrastructure to which
the operator has been granted access.
All of the infrastructure built, purchased or leased by
Aquafin NV in the context of the management agreement
with the Flemish Region falls within the scope of this
interpretation. As a result, the infrastructure concerned is not
treated as tangible fixed assets in the financial statement
of the company.
PRINCIPLES FOR THE ITEMS OF THE BALANCE
STATEMENT
n
n
Intangible assets
Research and development
Expenditures on research activities are recognized in the
results for the period in which they were incurred.
Lease agreements
a. The group as lessee
The group has entered into several operational lease
agreements. They therefore do not include a transfer of
the actual risks and rewards of ownership. In the event
of operational leases, the lease payments are shown as
costs and are distributed linearly over the lease period.
b. The group as lessor
Lease agreements in which the group acts as lessor are
classified as financial leases if the group transfers
substantially all of the risks and rewards of ownership
of an asset to the lessee. The group will include a claim
in the balance statement that is equal to the net
investment in the lease.

n
Financial assets
n
Debts
a. Receivables in the context of the concession agreement
In the context of the application of IFRIC 12, the group
applies the "financial asset model". That applies when
the operator has an unconditional right to actively
receive cash or other financial asset from the grantor.
In exchange for the services performed under the
concession agreement, the group has an unconditional
right as an operator and is contractually – within the
context of the management agreement – remunerated
by the grantor (the Flemish Region).
The group will consider this financial asset as a
receivable in the category of "Loans and receivables".
It is valued at the amortized cost price, which is
calculated based on the so-called effective interest
method. The consequences of the specific context in
which the group carries out its activities and the fact
that the group is not allowed to charge interest
compensation are that the calculation of the effective
interest rate has no impact.
b. Trade receivables and other receivables
These financial assets are valued at the amortized cost
price in accordance with IAS39 §46 (a) – at fair value
increased by any transaction costs when first booked.
The valuation of the fixed income securities follows the
same rules.
The uncollectable receivables are written off against
the relevant provision account at each balance sheet
date. The additions to and recoveries from this account
are both reported in the profit and loss account.
c. Funds and cash equivalents
Funds consist of cash and demand deposits.
Cash equivalents are short-term, extremely liquid
investments that can be converted immediately into
a known amount of cash and that do not have an
inherent material risk of change of value.
d. Financial assets available for sale
Financial assets available for sale are the non-derived
financial assets that are designated as being available for
sale or that are not classified as (a) loans and receivables,
(b) investments retained until the end of the maturity
period, or (c) financial assets valued at fair value with the
changes in value being shown in the profit and loss
account. They are valued at the fair value in the balance
statement, with the changes in value being incorporated
in the unrealised results.
n
a. Financial debts
When first included in the balance statement, financial
liabilities are valued at fair value, increased by the
transaction costs that are directly attributable to the
issue of the financial liability. After the first inclusion,
those financial liabilities are valued at the amortized
cost price, with the effective interest methodology
being used.
b. Commercial debt and other short-term debts
Commercial debt and other short-term debt are valued
at the amortized cost price.
Provisions
Provisions are shown in the balance statement if:
• the group has a present liability (legal or constructive)
as a result of a past event;
• it is probable that an outflow of resources embodying
economic benefits will be required to settle the liability;
• a reliable estimate can be made of the amount of
the liability.
In other words, provisions are shown if they are probable
and if there is a current liability on the date that the balance
is prepared.
Provisional assets are not shown in the balance statement
but are shown in the explanations if an inflow of economic
rewards is probable. Provisional liabilities are not shown on
the balance statement but are shown in the explanations
unless the chance of a loss is negligible.
The burden that is associated with a provision is shown
in the profit and loss account. The group shows the certain
payments (from the Flemish Region or the insurance
company) as an asset.
If the impact due to discounting of the future cash
outflows required is material, the provisions are updated
annually based on the generally used discounting rate
that expresses the time value of money that applies on the
balance date.
Consolidated financial statement
31

32
Consolidated financial statement 2011
n
Employee benefit provisions
There are two types of pension schemes within the group:
the defined contribution plan and the defined benefit plan.
Liabilities with respect to defined contribution plan are
immediately applied against the profit and loss account.
The periodic premium payment is registered as a period cost.
The debt or possible receivable from the defined benefit
plan is shown in the balance statement. In such schemes,
the amount in the balance statement (the net liability)
matches the cash value of the gross liability, reduced by the
fair value of the fund investments and adjusted for not-taken
pension costs for past employment.
To be able to estimate future liabilities accurately, a specific
actuarial calculation, the projected unit credit method will be
used. For dealing with actuarial profits and losses, a choice
has been made to deduct equity immediately by means of an
equity change overview.
Early retirement schemes are also treated as defined
benefit plans. The group shows a provision that is calculated
in accordance with the project unit credit method.
n
Taxes
a. Tax on profits
Current tax receivables and liabilities for the current and
previous periods are valued at the amount that
is expected to be received from or paid to the tax
authorities in Belgium or elsewhere.
In accordance with Article 43 of the management
agreement with the Flemish Region, all of the reasonable
costs incurred by the group in the context of this
agreement will be compensated by the drinking water
companies/the Flemish Region, including all levies
and taxes owed by the group due to the execution of
that agreement.
b. VAT
Revenues, costs and assets are shown after deducting
the value-added tax, except: :
• when the value-added tax on the purchase of assets or
services cannot be recovered from the tax authorities,
in which case the value-added tax will be shown as
part of the cost of the acquisition of the asset or as
part of the cost item;
• for receivables and debts that are accounted for
including the value-added tax.
The net amount of the value-added tax that can be
recovered or that is payable to the tax authorities is
shown as part of the receivables and debts in the
balance statement.
c. Deferred taxes
In view of the specific provisions of the management
agreement, the group does not have any temporary
differences in assets or liabilities that could give cause to
establish a deferred tax debt or receivable.
PRINCIPLES FOR ELEMENTS OF THE PROFIT
AND LOSS ACCOUNT
n
Revenues
In accordance with the management agreement, all
reasonable costs of the company are compensated by the
Flemish Region through the drinking water companies.
Revenues are shown if it is probable that the economic
rewards associated with the transaction will flow to the
company and if the amount of the revenues can be measured
in a reliable way. Turnover is shown after deducting the valueadded
taxes and discounts. Revenues from the sale of goods
or the delivery of services are shown when the delivery and
the full transfer of risks and rewards have taken place.
Dividends are shown at the moment that the right of
the shareholder to receive the dividend has been set.

n
a. Projects in progress on behalf of third parties
For projects in progress on behalf of third parties that do
not fall under the concession agreement, the revenues
are shown in the profit and loss account based on
the stage of completion of the project activities (the
percentage of completion method). That method can
only be used if the result of a project in progress on
behalf of third parties can be estimated reliably.
On the balance date, the group prepares an estimate
of the results of the project: the difference between the
expected contract revenues and the contract costs, as
well as the stage of completion of the project activities.
On the reporting date, that completion level is applied
to the total of the expected revenues and costs in order
to determine the amount of costs and revenues that
are to be applied to the profit and loss account for
the period.
If the group expects a loss on the project in progress on
behalf of third parties, that is posted against the results
immediately.
If the result of a project in progress on behalf of third
parties cannot be estimated in a reliable way, only the
revenues are shown to the value of the costs that will
probably be recoverable.
Costs of financing
Financing costs are shown as an immediate charge in
the period in which they are incurred. The group has no assets
for which financing costs must be activated.
n
Hedging
The group uses derivatives to hedge interest risks arising
from the financing activities. Active interest management is
done in accordance with the objectives and regulations
imposed by the managing body. It is group policy not to enter
into speculative transactions or leverage transactions.
Hedge categories
A distinction is made between two hedge categories: fair
value hedges and cash flow hedges.
Fair value hedges are hedges of the risk of change to
the fair value of assets and liabilities. Both the derivatives
that were designated as real-value hedges and their
covered assets or liabilities are valued at fair value in the
balance statement and changes in fair value are shown in
the profit and loss account. If a hedge appears to no longer
be very effective, the hedge accounting will be stopped and
the adjustment to the book value of the covered interestbearing
financial instrument will be written off linearly
in the profit and loss account up to the expiry date of
the covered position.
Cash flow hedges are hedges of the possible variability of
future cash flows that are related to the assets or liabilities
shown, very probable expected future transactions or
not-taken fixed commitments. Changes to the fair value of
a hedging instrument that serves as a very effective
cash flow hedge are shown in the overview of the
unrealised results, more specifically in the hedge reserve.
The ineffective part is shown in the profit and loss account
immediately.
Fair value hedge
Cash flow hedge
Qualified • Variation in time value = • Variation in time value =
impact on results account
impact on results account
• Variation in intrinsic value = • Variation in intrinsic value =
to be compensated mutually
component of unrealised results
• Coupon: calculated pro rata over the year
• Coupon: calculated pro rata over the year
Unqualified • Variation in total value = • Variation in total value =
impact on results account
impact on results account
• Coupon: cash flow in that year
• Coupon: cash flow in that year
Consolidated financial statement
33

34
Consolidated financial statement 2011
n
If the covered cash flow results in the uptake of a nonfinancial
asset or liability, the cumulative fair value
adjustment of the derivative will no longer be shown in the
overview of the unrealised results, but will be included in
the initial valuation of the cost price or the book value of
the asset or liability. In all other cases, the cumulative fair
value adjustment of the derivative will be transferred
from the overview of the unrealised results to the profit
and loss account at the moment that the covered fixed
commitment or the planned action results in the posting of
a profit or a loss. If a hedge no longer appears to be very
effective, the hedge accounting will be stopped, but not
retroactively. In that case, the cumulative fair value
adjustment of the hedge instrument will be retained in
the overview of unrealised results until the committed
or expected transaction occurs. If a committed or
scheduled transaction is no longer expected to take place,
the cumulative fair value adjustments will be transferred
from the overview of the unrealised results to the profit
and loss account.
Booking the movements
The distinction between qualified and unqualified financial
instruments determines the methodology to be used.
Events after the balance date
Events after the balance that provide additional information
concerning the company's situation on the balance date
(so-called 'adjusting events') are shown in the financial
statement. Other events after balance date (so-called 'nonadjusting
events’) are only shown in the explanations if they
are considered to be important.
n
Segmented information
For management purposes, the group is organised in two
operational segments. One segment comprises the company
activities under the concession agreement (management
agreement) with the Flemish Region and the other comprises
the commercial activities carried out primarily for (Flemish)
cities and municipalities. In the second segment, the group is
in direct competition with other sewerage managers.
NEW AND AMENDED STANDARDS AND
INTERPRETATIONS IN EFFECT FOR FINANCIAL
YEARS COMMENCING ON 1 JANUARY 2011
n
Amendments to principles or explanations
The principles of financial reporting applies are consistent
with those for the previous fiscal year, with the following
exceptions.
As of 1 January 2011, the group has implemented the
following new and amended IFRS standards and IFRIC
interpretations:
• IAS 24 Related Party Disclosures, in effect from 1 January
2011
• IAS 32 Financial Instruments: Presentation - Classification
of Claim Emissions, in effect from 1 February 2010
• IFRIC 14 - Prepayments of Minimum Funding Requirements,
in effect from 1 January 2011
• IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments, in effect from 1 July 2010
• Improvements to IFRSs (May 2010), in effect from 1 January
2011
If the application of the standard or interpretation has
consequences for the financial position or results of the group,
a description is provided below.
IAS 24 Related Party Disclosures
The amendment clarifies the definition of a related party.
The new definition emphasises a symmetrical view of
relationships with related parties and clarifies the
circumstances in which persons and managers in key
positions influence the related parties. In the second place,
the change introduces an exemption from the general
information provision about related parties for transactions
with governments and entities that are (collectively)
controlled by governments or which governments have a
substantial influence over. [This change had no impact on
the current related party disclosures.]
IAS 32 Financial Instruments: Presentation - Classification
of Claim Emissions
The amendment changes the definition of a financial liability
to allow entities to consider claim emissions and specific
options or warrants as equity instruments.

The amendment applies if rights have been granted pro
rate to the current owners of the same category of
non-derivative equity instruments to acquire a fixed
number of equity instruments from the entity in exchange
for a fixed amount in any currency. [This amendment
had no consequences for the financial position or results of
the group.]
IFRIC 14 – Prepayments of Minimum Funding Requirements
The amendment corrects the unintended consequence
that arises when an entity is subject to a minimum funding
requirement and makes prepayments to meet that
obligation. The amendment makes it possible for an entity
to consider a prepayment of future services costs to be a
fund investment. [The group is not subject to a minimum
funding requirement. This amendment therefore had
no consequences for the financial position or results of
the group.]
IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments
The interpretation clarifies that equity instruments
provided by a creditor to extinguish a financial liability
should be considered as paid compensation. The equity
instruments provided are valued at their fair value. If the
fair value cannot be determined in a reliable way, the equity
instruments must be valued so that they reflect the fair
value of the financial liability that has been extinguished.
The difference between the book value of the extinguished
financial liability and the compensation paid is shown in
the profit and loss account. [The first application of this
interpretation had no consequences for the financial
position or results of the group.]
Improvements to the IFRSs (published May 2010)
In May 2010, the IASB published a third bundle with
amendments to the standards, primarily to eliminate
inconsistencies and for clarification. Different transition
provisions apply to each standard. Processing the following
amendments led to changes in the principles, but had
no consequences for the financial position or results of
the group.
• IFRS 3 Business Combinations: clarifies that conditional
compensations that arise from a business combination
that took place before the first application of IFRS 3
(revised version from 2008) must be dealt with in
accordance with IFRS 3 (2005).
• IFRS 3 Business Combinations: deals with payments
based on shares that were not replaced and shares
that were replaced voluntarily and dealing with them in
the books in the context of a business combination.
• IFRS 7 Financial Instruments: Disclosures: the amendment
was intended to simplify the information provided by
reducing the scope of the information concerning
certainties and to improve the information by providing
qualitative information, in addition to quantitative
information. [The Group has illustrated this amendment
in explanation 5.9.]
• IAS 1 Presentation of Financial Statements: the amendment
clarifies that the entity has the choice of providing the
analysis of each component of the unrealised results in
the overview of changes to equity or in the explanations.
[The group provides that analysis in explanation 5.7]
• IAS 27 Consolidated and separate financial statements:
clarifies the transition obligations with respect to
the amendments to other standards as a result of the
revision of the IAS 27 standard.
• IFRIC 13 Customer Loyalty Programmes: clarifies that an
entity must take into account discounts and other
rewards that could be granted to customers that are not
participating in a loyalty programme when determining
the fair value of the rewards granted.
The amendments shown below as a result of
improvements to the IFRSs for the following standards
had no consequences for the principles, financial position
or performance of the group.
• IFRS 3 Business Combinations
• IAS 27 Consolidated and separate financial statements
• AIS 34 Interim Financial Reporting
• IFRIC 13 Customer Loyalty Programmes
• IFRS 3 Business Combinations: the options to valuations
of minority interests were amended. Only the minority
interests that give their owner right to a proportional
share of the net assets of the entity in the event of
cessation will be valued at fair value or at their
proportional share of the net assets of the entity.
All other minority interests are valued at their fair value
on the takeover date.
Consolidated financial statement
35

36
Consolidated financial statement 2011
NEW AND AMENDED STANDARDS AND
INTERPRETATIONS IN EFFECT FOR FINANCIAL
YEARS COMMENCING ON 1 JANUARY 2011
OR LATER
n
Standards that have been published but that have not yet
taken effect
The standards shown below were published on the date
of publication of the Group´s financial statements, but have
not yet taken effect:
• IFRS 7 Financial Instruments: Disclosures - Amendments
to the disclosures 1 , in effect from 1 July 2011
• IFRS 9 Financial instruments 1 , in effect from 1 January 2013
• IFRS 10 The Consolidated and Separate Financial
Statement 1 , in effect from 1 January 2013
• IFRS 11 Joint Arrangements 1 , in effect from 1 January 2013
• IFRS 12 Disclosure of Interests in Other Entities 1 , in effect
from 1 January 2013
• IFRS 13 Fair Value Measurements 1 , in effect from 1 January
2013
• IAS 1 Presentation of Financial Statements 1 , in effect from
1 July 2012
• IAS 12 Income Taxes – Settlement of Tax Claims 1 , in effect
from 1 January 2012
• IAS 19 Employee Benefits 1 , in effect from 1 January 2013
1 These amendments had not yet been approved by the EU as of
30 September 2011.
IFRS 7 Financial Instruments: Disclosures
The amendments to IFRS 7 are in effect for financial years
commencing on or after 1 July 2011 and will lead to better
understanding of transactions of financial assets, more
specifically with respect to the possible influence of risks
associated with the assets sold that continue to be on
the entity's account. The amendments furthermore require
making additional disclosures if a substantial number of
transactions took place towards the end of the financial
year. [The group does not expect the amendments to have
an impact on the current disclosures.]
IFRS 9 Financial Instruments
The current version of IFRS 9 sets the first phase for
the project of the IASB to replace IAS 39. It applies to
the classification and valuation of financial assets and
liabilities. The standard applies to financial years
commencing on or after 1 January 2013. In the following
phases, the IAS will deal with devaluations and hedging.
The IASB expects to complete the project in 2012. [The first
application of the first phase of IFRS 9 will have an impact on
the classification and valuation of the financial assets of the
group. The group will evaluate the impact of these and the
subsequent phases in its financial statement so that a
complete picture can be provided.]
IFRS 10 The Consolidated and Separate Financial Statement
The standard applies to financial years commencing on or
after January 2013. It states that the concept of control is
decisive in determining whether an entity should be
included in the consolidated financial statement of a
parent company. The standard offers additional assistance
in assessing control where necessary. [The company is
currently assessing the impact of this standard.]
IFRS 11 Joint Arrangements
The standard applies to financial years commencing on or
after 1 January 2013. With respect to the processing of joint
arrangements, it concentrates primarily on the rights
and obligations of the rules rather than the legal form.
The standard obliges the entity to apply a single
accounting treatment of interests in jointly controlled
entities. [The company is currently assessing the impact of
this standard.]
IFRS 12 Disclosure of Interests in Other Entities
The standard applies to financial years commencing on
or after 1 January 2013. It deals with disclosures for all types
of interests in other entities, including joint arrangements,
associated participation, for entities established for a
special purpose and other entities that were not included
in the balance statement. [The company is currently
assessing the impact of this standard.]
IFRS 13 Fair Value Measurements
The standard applies to financial years commencing on or
after 1 January 2013. It provides a definition of fair value
and a single source of fair value measurement and
disclosure in the application thereof in IFRS. [The company
is currently assessing the impact of this standard.]
IAS 1 Presentation of Financial Statements
The amendments apply to financial years commencing on
or after 1 July 2012. The amendments dictate splitting up
the elements in the unrealised results that can be moved to
the profit and loss account. The amendments furthermore
confirm the existing obligation to show the elements of the
unrealised results in a single overview or in two consecutive
overviews. [The company is currently assessing the impact of
this standard.]

IAS 12 Income taxes
The amended standard applies to financial years
commencing on or after 1 January 2012. The amendment
offers a practical solution to the difficult and subjective
assessment of the disposal through use or sale when the
asset is valued at fair value in accordance with the standard
IAS 40 Investment Property by introducing an assumption
that the asset will be disposed of through sale. [The group
expects this change to have no impact on its financial
position or results.]
IAS 19 Employee Benefits
The amended standard applies to financial years
commencing on or after 1 January 2013. The amendment
eliminates the possibility of deferring the recording of
profits and losses, known under the name 'corridor
method'. The amendments streamline the presentation of
changes in assets and liabilities arising from the defined
benefit plan. That includes incorporating the revaluations
in the unrealised results. Furthermore, they improve
the disclosures for defined benefit plans by asking for
additional information concerning the characteristics of
defined benefit plans and concerning the risks that entities
bear by participating in such plans. [The company is
currently assessing the impact of this standard.]
IFRS 1 – first application of IFRS
GENERAL
Since 2011 – the first IFRS reporting period – the
consolidated financial statements of the Group are prepared
in accordance with the standards and interpretations as
published by the International Accounting Standards Board
(IASB) and accepted in the European Union.
The IFRS opening balance at 1 January 2010 (the date of
transition to IFRS) was prepared in accordance with IFRS 1 -
First application of International Financial Reporting Standards.
PRINCIPLES FOR THE PREPARATION OF
THE CONSOLIDATED FINANCIAL STATEMENT
IFRS 1 requires the retroactive application of every IFRS
applicable to the reporting date of the first IFRS consolidated
financial statement. Several exceptions to that principle are
permitted. The Group made use of the following exceptions:
• Application of IAS 37 Provisions: the information that
was available at the moment of the preparation of
the opening balance and that had been sufficient under
BE GAAP was used further. The retroactive split of the net
provisions in a gross liability and compensation to be
received would have been too expensive, which would
not have been proportional to the improved quality of
the information.
IFRS OPENING BALANCE AT 01.01.2010
AND DISCUSSION OF THE DEVIATIONS BE
GAAP - IFRS PER BNALACE POST
All changes are the result of amendments to the principles
for financial reporting and are therefore not the result of
corrections of errors that would have been made due to
the application of the previous GAAP (Belgian GAAP or BE
GAAP) in the previous financial statement.
The amounts reported under BE GAAP are Aquafin's
unconsolidated figures. Legally, both Aquafin NV and
Aquaplus NV can invoke the exemption from subconsolidation
included in Section 113 §1 and §2, first paragraph of the
Companies Code. Under IFRS, the consolidated figures of
the group are reported, including the 100% subsidiary
Aquaplus NV.
n
Discussion of reworking of BE GAAP - IFRS per balance post
1. Tangible fixed assets
Assets established, purchased or leased as part of the
management agreement
The primary impact of the transition of the group to IFRS
was on the administrative procedures for the establishment
and operation of the tangible fixed assets. All of the
infrastructure established, purchased or leased as part of
the management agreement with the Flemish Region
falls within the scope of interpretation IFRIC 12 - Service
Concession Agreements (1). As a result, the infrastructure
concerned is not treated as tangible fixed assets in the
financial statement of the company.
Consolidated financial statement
37

38
Consolidated financial statement 2011
ASSETS
BE GAAP IFRS conversion IFRS - consolidated
(in €000) 31/12/2009 01/01/2010
FIXED ASSETS 2,353,822 -879,752 1,474,069
Tangible fixed assets 2,353,130 -2,353,130 (1)
Long-term receivables Management Agreement 1,464,186 1,464,186 (2)
Financial fixed assets 692 -692 (3)
Other financial assets 9,884 9,884 (4)
CURRENT ASSETS 75,532 77,169 152,701
Stocks and orders in progress 24,024 -24,024 (5)
Short-term receivables Management Agreement 88,684 88,684 (2)
Receivables of no more than one year 13,418 11,808 25,226 (6)
Cash and cash equivalents 37,639 701 38,340 (7)
Deferred accounts active 452 0 452
TOTAL ASSETS 2,429,354 -802,583 1,626,770
EQUITY AND LIABILITIES
NET EQUITY 975,485 -797,868 177,617
Share capital 149,429 0 149,429
Reserves 17,801 10,387 28,188 (8)
Profit carried forward 6 -6 (8)
Capital subsidies (Reimbursements Flemish Region/
drinking water companies) 808,248 -808,248 (8)
PROVISIONS FOR RISKS AND COSTS 2,478 6,283 8,761
Pensions and similar liabilities 305 6,283 6,589 (9)
Other risks and costs 2,173 0 2,173
DEBTS 1,451,391 -10,999 1,440,392
Interest-bearing loans with terms of more than 1 year 1,173,362 0 1,173,362
Other long-term debts 104 19,992 20,096 (10)
Interest-bearing loans with terms of less than 1 year 163,487 0 163,487
Commercial debts and other short-term debts 100,912 -31,353 69,559 (11)
Taxes payable 121 121 (11)
Deferred liability account 13,528 240 13,768 (12)
TOTAL EQUITY AND LIABILITIES 2,429,354 -802,583 1,626,770

Those provisions have particular application on the
following investments, which were activated under BE
GAAP:
• all of the investments in (supramunicipal) sewer and
treatment infrastructure, both completed investment
projects and investment projects in progress;
• hydronaut studies, completed and in progress;
• office buildings, purchased or acquired via financial
lease;
• computer and office equipment, furnishings, etc.;
for a total amount of €2,346,306 k.
Under BE GAAP, those investments were activated at the
acquisition value minus accumulated write-offs. Under IFRS,
no tangible fixed assets are recognised.
(1) Interpretation IFRIC 12 - Service Concession Agreements
as ratified on 25 May 2009 by the European Commission,
applies to Aquafin. After all:
The agreement is a 'public-to-private concession'.
In view of the legal framework of the management
agreement between Aquafin and the Flemish Region, one
could say that Aquafin is an extension of the government
from an economic perspective. That leads to the question
of whether there really is a 'public-to-private concession'.
At first glance, one would expect a private organisation
to be fully independent of the government (grantor).
Nevertheless, there could be circumstances in which an
entity that is totally or partly state property has a certain
degree of autonomy to carry out its activities, which is
the case with Aquafin.
The IFRIC has determined (in the basis for conclusion) that
if a concession agreement such as the one between
Aquafin NV and the Flemish Region is identical in all other
respects to a concession agreement between a (purely)
private organisation and the government, the operator
(in casu Aquafin) can be treated as if it were a private entity.
IFRIC 12 can therefore be applied.
The service concession agreement
The most important characteristic of services based on a
service concession agreement is the nature of the services.
The activities of the operator must be of ´public utility´
(the so-called 'public service obligation'). The services
related to the infrastructure must be provided by the
operator to the public (in the broad sense of the term)
within a pre-determined policy.
The management agreement sets out the services
between Aquafin and the government contractually
and determines which ´public´ services are to be delivered,
to wit, the expansion and the management of the
household wastewater treatment infrastructure.
Aquafin is responsible for at least part of the management
of the infrastructure and associated services and does not
operate solely as an agent on behalf of the Flemish Region.
In that respect, we report that Aquafin does, indeed, run an
operational risk, although a limited one, for example when it
fails to achieve the planned delivery of infrastructure work.
Furthermore, the management agreement states in Article
48 how payment is to be done (i.e. an invoicing agreement
between Aquafin and the user, especially the Flemish
drinking water companies) and, implicitly, also the price
that Aquafin may charge.
And finally, at the end of the concession agreement,
the complete infrastructure will be turned over to the
government at no charge. That means that Aquafin
does not, in fact, 'control' the infrastructure as the IFRS
understands 'control' and cannot sell or pledge it.
The expected economic life of the assets is longer than
the life of the concession.
Lease agreements in which the group acts as lessor
The project at Kapellen to carry out transport services is
included under BE GAAP as part of the tangible fixed assets.
Nevertheless, the Group does receive compensation via AWW
for making those assets available. From that perspective,
the group is a lessor in accordance with IAS 17 Leasing.
Consequently, those assets are presented as a receivable on
the group's balance (€6,824 k).
2. Receivables on the management agreement (long and
short term)
In the context of the application of IFRIC 12, the group
applies the financial asset model. That applies when the
operator has an unconditional right to actively receive cash
or other financial asset from the grantor.
After all, in exchange for the performance in the context of
the concession agreement, the group has an unconditional
contractual right as an operator and is contractually
compensated by the grantor (the Flemish Region).
Consolidated financial statement
39

40
Consolidated financial statement 2011
The group considers that financial asset as a receivable in
the category of "Loans and receivables". They are valued at
the amortized cost price, which is calculated based on the
effective interest method. Inasmuch as the repayment of
the receivable is done at nominal value and no interest may
be charged by the group, the effective interest rate is 0%.
In practice, that constitutes valuation at nominal value.
The receivables shown in this post related in particular to:
• investments in (supramunicipal) sewer and treatment
infrastructure, completed and in progress;
• hydronaut studies, completed and in progress;
• office buildings, purchased or acquired via a financial
lease;
• computer and office equipment, furnishings, etc.;
• alignment with the market value of the hedging
structures (as per infra);
• provisions for personnel benefits (as per infra);
for a total amount of €1,552,870 k.
Part of that amount (€88,684 k) is due within 1 year.
Under BE GAAP, those assets are posted under tangible fixed
assets.
3. Financial fixed assets
Under BE GAAP, the participation of the group in the
subsidiary Aquaplus NV is shown here. In the consolidated
IFRS financial statement, this participation expires vis-à-vis
the equity of Aquaplus NV.
Inasmuch as Aquafin NV has already posted a devaluation
on the financial fixed asset, the value of the equity at
Aquaplus NV is matched and there is therefore no impact
on the results.
4. Other financial assets
The receivable for the provision of the assets as part of the
project at Kapellen – the provision of transport services –
in the amount of €6,357 k is shown here.
The long-term receivables connected with the commercial
projects in progress are reported in this section: €3,505 k.
That receivable relates to all revenues still to be invoiced
depending on the completion percentage of those projects.
5. Stocks and orders in progress
Under BE GAAP, projects on behalf of third parties
(commercial projects in progress) are processed in accordance
with the completed contract method. Expenses for projects
that have not yet been delivered are activated under
Orders in progress.
Due to the conversion to IFRS, those projects are valued in
accordance with the percentage of completion method
and posted in the results pro rata with their percentage
of completion. Concretely, €24,024 k in receivables (orders
in progress) are shown in the results (- €24,024 k).
6. Receivables of a maximum of 1 year (commercial receivables,
other)
Receivables are valued by the amortized cost price.
The credit note still to be prepared for the drinking water
companies / the Flemish Region is reported in IFRS in
accordance with the IFRIC 12 receivable (receivables related
to the concession agreement) (+ €10,137 k). The same
reasoning applies to the credit note to be prepared with
respect to the interest management (+ €1,186 k).
The remaining difference with BE GAAP is the result of
the consolidation of the subsidiary Aquaplus NV.
7. Cash and cash equivalents
The difference with BE GAAP is the result of the
consolidation of the subsidiary Aquaplus NV.
8. Net equity
See infra: impact of the conversion on the consolidated
equity at 1 January 2010.
9. Pension obligations
There are two types of pension schemes within the group:
the defined contribution plan and the defined benefit plan.
Liabilities with respect to defined contribution plan are
applied against the profit and loss account immediately.
The periodic premium payment is registered as a period
cost. There is no difference here from the processing under
BE GAAP.
The debt or possible receivable from the defined benefit
plan is shown in the balance statement. In such schemes,
the amount in the balance statement (the net liability)
matches the cash value of the gross liability, reduced by
the fair value of the fund investments and adjusted for
not-taken pension costs for past employment.

To be able to estimate future liabilities accurately, the
projected unit credit methodology will be used, a specific
actuarial calculation. The concrete impact of the conversion
to IFRS amounts to €5,773 k.
Early retirement schemes are also treated as defined
benefit plans. The group shows a provision that is
calculated in accordance with the project unit credit
method. The concrete impact of the conversion to IFRS
amounts to €510 k.
Inasmuch as the provisions for personnel benefits fall
under 'reasonable costs' as stipulated in the management
agreement with the Flemish Region, a receivable equal
to the amount of this provision has been booked for
the Flemish Region. The impact on the consolidated equity
is hereby neutralised.
10. Other long-term debts
The group uses derivatives to hedge interest risks arising
from the financing activities. The difference with BE GAAP
relates to the alignment as of 1 January 2010 with the market
value of the hedging structures (see the explanation
concerning the financial instruments): €19,992 k.
The benefits and costs related to the interest management
(hedging) are part of the financing charges and
therefore fall under 'reasonable costs' as stipulated in
the management agreement with the Flemish Region.
For the amount of that alignment, an equal receivable was
therefore booked to the Flemish Region. The impact on
the consolidated equity is hereby neutralised.
11. Commercial debts and other short-term debts
Commercial debts and other liquid liabilities, with the
exception of derivatives, are valued at the amortized cost
price. That cost price is equivalent to the fair value of
the compensation to be paid.
Due to the conversion to IFRS, the commercial projects in
progress are valued in accordance with the percentage of
completion method and posted in the results pro rata with
their percentage of completion. Concretely, €21,702 k in
revenues (pre-payments received) are posted in the results.
In accordance with IAS 10 – Events after the reporting Period
– dividends allocated after the financial year are not posted
as a liability as long as they are payable after the end of the
financial year. The impact is €9,198 k.
Debts related to taxes due (€121 k) are shown in the IFRS
balance as a separate post.
The remaining difference with BE GAAP is the result of the
consolidation of the subsidiary Aquaplus NV.
12. Deferred liability account
The increase of the short-term financial liabilities relates to
the active interest management (€204 k).
IMPACT OF THE CONVERSION ON THE
CONSOLIDATED EQUITY AT 1 JANUARY 2010
The transition from BE GAAP to IFRS resulted in the
reduction of the consolidated equity from €975.48 million
to €177.62 million. That decrease from €797.86 million is
explained in the table shown below.
(in €000)
BE GAAP - 31/12/2009 975,484
Commercial projects in progress 1,183
Dividends 9,198
Capital subsidies -808,248
IFRS - 01/01/2010 177,617
Under BE GAAP, projects on behalf of third parties
(commercial projects in progress) are processed in accordance
with the completed contract method. Due to the conversion
to IFRS, those projects are valued in accordance with the
percentage of completion method and posted in the results pro
rata with their percentage of completion. Concretely, €1,183 k
in undelivered projects has been posted in the results; that is
the result for all of the commercial projects in progress at 31
December 2009.
In accordance with IAS 10 – Events after the reporting
Period – dividends allocated after the financial year are not
posted as a liability as long as they are payable after the end of
the financial year. The impact is €9,198 k.
In implementation of the management agreement with
the Flemish Region, the investments in (supramunicipal)
sewer and treatment infrastructure were repaid over 15 years.
The speed of repayments is higher than that of the write-offs.
That resulted in a positive balance, which will be used to
finance the write-offs further after the repayments have
been made.
Consolidated financial statement
41

42
Consolidated financial statement 2011
With the approval of the Bookkeeping Standards
Committee, this positive balance was booked to a special
liability account, Repayment to the Flemish Region (capital
subsidies). The amount of €808 million relates to all projects
that were delivered up to the end of the financial year.
As a result of the application of interpretation IFRIC 12 -
Service Concession Agreements, these sewerage and treatment
infrastructures (tangible fixed assets) are removed from the
balance and replaced by the future credits from the Flemish
Region (receivables). There will also no longer be any
equivalent of the liability account Repayment to the Flemish
Region (capital subsidies).
IMPACT OF THE CONVERSION ON THE PROFIT
AND LOSS ACCOUNT 2010
The management contract with the Flemish Region
stipulates that the compensation of Aquafin NV will take
place on the basis of passing on all reasonable costs, increased
by a compensation for the shareholders that is based on their
contribution to the company’s equity. From this, it follows that
the costs and revenues are a reflection of each other to a large
extent. The conversion to IFRS has also not had any impact on
the results for the activities covered by the concession
agreement.
Inasmuch as the IFRS balance of the group does not
recognise any tangible fixed assets, the write-offs and
therefore also the equivalent of those write-off costs are
neutralised in the turnover in the IFRS statement of results.
RESULTS ACCOUNT
BE GAAP IFRS conversion IFRS consolidated
(in €000) 31/12/2010 01/01/2010
OPERATING INCOME 362,540 -107,781 254,759
Turnover 336,891 -88,935 247,956
Changes to the orders in progress 20,229 -20,229
Produced fixed assets 12 -12
Other operating income 5,409 1,394 6,803
OPERATING EXPENSES -295,899 110,556 -185,343
Commercial goods, raw materials and consumables used -82,981 -112 -83,092
Services and miscellaneous goods -42,602 -61 -42,662
Salaries, social security contributions and pensions -55,982 0 -55,982
Write-offs to tangible fixed assets -111,261 111,261
Devaluations of orders in progress and trade receivables 245 -457 -212
Provisions for risks and costs 75 -75
Other operating costs -3,394 0 -3,394
OPERATING RESULTS 66,641 2,775 69,416
Financial results -58,656 -2,800 -61,456
Profit from ongoing operations before taxes 7,985 -25 7,960
Extraordinary results 2 -2
Profit for the financial year before taxes 7,987 -27 7,960
Income taxes -910 397 -513
PROFIT FOR THE FINANCIAL YEAR 7,078 369 7,447

The only impact that the conversion has on results
concerns the results of the projects in hand is on behalf of
third parties (commercial projects in progress).
On the date of the switch (31/12/2010), the group did not
have the necessary information to be able to apply the
percentage of completion methodology for those projects.
In 2010, those projects were still being processed in
accordance with the BE GAAP completed contract method.
The concrete impact of the conversion to IFRS amounts
to €369 k.
From 2011, those projects were being processed
consistently in accordance with the percentage of completion
method also under BE GAAP.
Notes to the consolidated balance sheet
EXPLANATION 5.0. CONCESSION CONTRACTS
(IFRIC 12
IFRIC 12 concerning services based on a concession
agreement is applied in the consolidated financial statement
of Aquafin.
n
Aquafin activities
Aquafin NV was established in 1990 by the Flemish Region
to accelerate the development of the supramunicipal
sewerage infrastructure. In order to achieve that objective,
the Flemish Region sets out Aquafin's assignments every year
in a programme. The Vlaamse Milieumaatschappij (Flemish
Environmental Agency) monitors Aquafin's economic and
ecological results. For the execution of this assignment,
a management agreement has been drawn up between
Aquafin and the Flemish Region. Amendments to the original
management agreement are set out in addenda.
In the context of the management agreement, Aquafin
collects the wastewater from the Flemish households in main
sewers and transports it to treatment plants. For that purpose,
Aquafin first expanded the necessary infrastructure:
collectors for wastewater, pumping stations and wastewater
treatment plants. Aquafin prefinances the projects awarded
and the drinking water companies repay the investments.
From projects delivered from 1 January 2009, the repayment
term is 15 years for the electromechanical works and 30 years
for the construction works.
Aquafin is also responsible for the maintenance and
operation of the supramunicipal sewer systems and the
wastewater treatment plants. The treated wastewater must
comply with Flemish and European standards.
Outside the management agreement, Aquafin has also
developed a specific offering for cities and municipalities.
Several cities and municipalities have outsourced the
complete installation and maintenance of their sewers to
Aquafin. Several companies also have their wastewater
treated by Aquafin.
The most important part of the Aquafin assets is used
in the context of a concession agreement. More specifically,
it concerns assets that are used to carry out the tasks under
the management agreement with the Flemish Region.
n Applicability of IFRIC 12
The interpretation IFRIC 12 - Service Concession Agreements
applies to public-private agreements if the following
conditions are satisfied:
• the grantor controls or regulates the services that the
operator is required to provide with the infrastructure,
whom those services are to be delivered to, and the price;
• the grantor controls through ownership the ultimate
right; in other words, the grantor has control over any
significant residual value in the infrastructure at the end
of the life of the agreement.
Infrastructure assets within the scope of the agreement
are assets built or acquired for use within the context of
the concession agreement or existing infrastructure to which
the operator has been granted access.
The interpretation is based on the concept of 'control',
i.e. whoever controls the right of use of the infrastructure.
Consolidated financial statement
43

44
Consolidated financial statement 2011
In summary, we can therefore state that the following
criteria must be satisfied in order to fall under the scope of
the interpretation (IFRIC 12 §5,7);
n
• the agreement is a public-to-private concession;
• the grantor has control over or regulates the services
that the operator must provide with the help of
the infrastructure;
• the grantor has control over any significant remaining
interest in the infrastructure;
• the infrastructure is built or acquired by the operator for
the purpose of using it in the context of the concession
agreement;
• the contract between the operator and the grantor
determines the price at which the services are to be
provided.
Analysis of the concession agreement
Service Concession Agreement
One of the characteristics of a service concession
agreement is the nature of the services. The activities of
the operator must be a public service. (the so-called ‘public
service nature of the obligation’).
The services related to the infrastructure must be provided
by the operator to the public (in the broad sense of the term)
within a pre-determined policy. The management agreement
sets out the services between Aquafin and the government
contractually and determines which ´public´ services are to be
delivered, to wit, the expansion and the management of
the household wastewater treatment infrastructure.
A second condition is that Aquafin is responsible for at
least part of the management of the infrastructure and
associated services and does not operate solely as an agent on
behalf of the Flemish Region. In that respect, we report
that Aquafin does, indeed, run an operational risk, although a
limited one, for example when it fails to achieve the planned
delivery of infrastructure work.
A third condition concerns the payments for the services.
The management agreement states in Article 48 how
payment is to be done (i.e. an invoicing agreement between
Aquafin and the user, especially the Flemish drinking water
companies) and, implicitly, also the price that Aquafin may
charge.
And finally, there is a condition concerning the ownership
of the infrastructure at the end of the agreement. At the end
of the concession agreement, the complete infrastructure will
be turned over to the government at no charge. That means
that Aquafin does not, in fact, 'control' the infrastructure
as the IFRS understands 'control' and cannot sell or pledge it.
The expected economic life of the assets is longer than the life
of the concession.
Interpretation IFRIC 12 - Service Concession Agreements
as ratified on 25 May 2009 by the European Commission,
applies to Aquafin with respect to the activities under the
management agreement.
Within IFRIC 12, that kind of infrastructure is recognised as
financial assets (financial asset model) in Aquafin's case, not
as tangible fixed assets.
n
Financial assets model
The operator posts a financial asset to the degree that an
unconditional contractual right exists to cash or other
financial assets for the delivery of services. A contractual right
exists if the grantor contractually ensures the payment of:
a) specified or calculable amounts, or
b) any negative difference between amounts received from
users of the public utility and specified or calculable
amounts, even if the payment is made dependent on
the condition that the operator ensure that the
infrastructure satisfy specified quality or efficiency
requirements.
The various compensations that the Flemish Region owes
to Aquafin are stipulated in Art. 43 of the management
agreement between Aquafin and the Flemish Region and
fit within the aforementioned conditions in order to meet
the definition of financial assets.
Art. 43 of the management agreement states:
"To fulfil its tasks under this agreement, to wit, the creation
and operation of sewer water treatment infrastructure,
Aquafin is entitled to compensation from the Flemish Region
that must cover all reasonable costs incurred and, with due
regard for the risk taken, ensure a minimum acceptable return
for the shareholders.

This compensation covers all actual reasonable costs
incurred by Aquafin within the meaning of Art. 35 of this
agreement, as well as all levies and taxes owed by Aquafin for
the execution of this agreement, including environmental levies,
all payments due to third parties and all of the payments owed
to the Flemish Region with the exception of fines, compensation
for damages for late delivery in accordance with the provisions
of articles 41.3, 41.4 and 41.5 of this agreement, lump-sum
payments under art. 41 of this agreement and compensation
for damages to third parties due to illegal acts, and are paid in
accordance with this chapter.
Without prejudice to the provisions of Art. 18 of this
agreement, this payment comprises four elements, to wit,
recovery of (a) Investment Spending, (b) Working Expenses,
(c) Fixed Costs and (d) Financing Costs."
Art. 43 gives an unconditional contractual right to receive
payment from the Flemish Government (in its capacity as
grantor). The grantor also has few or no possibilities for
avoiding payment; it is effectively enforceable in law.
The primary impact of the model on the financial position
and results of the group concerns the treatment of its tangible
fixed assets. The tangible fixed assets that fall within the
scope of this interpretation are not recognised as tangible
fixed assets, but as financial assets that comprise the
payments to be received from operations and establishment
of the concession.
As per Art. 43 of the management agreement, the contractual
rights of Aquafin are unconditional and therefore satisfy the
definition of the financial assets model.
n
IFRIC-12 receivables shown in the balance
Long-term receivables management agreement
Long-term receivables (i.e. receivables over more than
one year) as a result of the application of IFRIC 12 comprise
the following categories:
The tangible fixes asset shown in the IFRIC 12 receivables
comprises:
• Wastewater treatment infrastructure delivered to the
Flemish Region. For the part of those investment projects
and replacement investments not yet repaid on the
reporting date, and that will be received over more than
a year, the group recognises a long-term receivable with
respect to the drinking water companies/the Flemish
Region, valued at an amortized cost price.
• Infrastructure taken over from the Vlaamse Milieu -
maatschappij (Flemish Environmental Agency). The group
is also entitled to receive payment from the Flemish
Region in the amount of the as yet not repaid part and
valued at the amortized cost price. The part that is to be
recovered over more than one year is shown in the longterm
receivables.
• Hydronaut studies are studies that are carried out to
develop a correct design of the associated supra -
municipal investment project. These studies are also
carried out in the context of the management of existing
infrastructure. They are charged over a period of 15 years
to the Flemish Region/the drinking water companies.
For the part of those studies not yet repaid on the
reporting date, and that will be recovered over more than
one year, a long-term receivable is recognised.
• Investments in hardware, software, laboratory equipment,
furniture, materials and equipment required for the
functioning of the head office and investments in
hardware, software, laboratory equipment, replacement
investments, electromechanics, extraordinary maintenance
of construction and electromechanics, furniture, etc.,
are charged to the Flemish Region/the drinking water
companies pro rata with the write-offs booked. For the
part of those investments not yet repaid on the reporting
date, and that will be recovered over more than one year,
a long-term receivable is recognised.
(in €000) 2011 2010 At 1 January 2010
Tangible fixed assets included in IFRIC 12 - receivables 1,917,827 1,678,636 1,438,906
Provisions for pensions 6,313 6,644 6,283
Fair value financial instruments 132,419 42,482 18,996
TOTAL 2,056,559 1,727,763 1,464,186
Consolidated financial statement
45

46
Consolidated financial statement 2011
• Investments in the head office building (Dijkstraat 8).
They are charged to the Flemish Region/the drinking
water companies pro rata with the payment of the loan
taken out for this purpose. For the part of those
investments not yet repaid on the reporting date, and
that will be recovered over more than one year, a longterm
receivable is recognised.
• Chargeable costs of the two buildings that the group
leases. The leasing contracts satisfy the criteria of
financial leasing. The leasing costs are charged to the
Flemish Region/the drinking water companies pro rata
with the write-offs. For the part of those leased buildings
not yet repaid on the reporting date, and that will be
recovered over more than one year, a long-term
receivable is recognised.
The total book value for leasing can be broken down
into an IFRIC 12 short-term receivable of €219 k (i.e. the
annual write-off charged to the Flemish Region/the
drinking water companies) and an IFRIC 12 long-term
receivable for the part that will only be recovered from
the Flemish Region/the drinking water companies in
the years to follow.
• Assets under construction. In addition to the completed
projects, the group has a large number of projects in
progress and therefore a significant amount in assets
under construction. Also, the group has an unconditional
contractual right to receive payment from the Flemish
Government for those assets. A receivable is recognised
for their value.
The provisional pensions concern the defined contribution
plan and early-retirement plans.
• Provision for defined contribution plans. Aquafin has
two types of pension schemes: a defined contribution
plan and a defined benefit plan. All movements related
to the defined contribution plan are recognised in P&L.
For the obligations concerning the defined benefit plan,
an actuarial calculation as per IAS 19 was carried out,
as per explanation 5.10.
Inasmuch as, in accordance with the management
agreement, the group has an unconditional contractual
right to receive compensation for the provision for the
defined contribution plan from the Flemish Region/
the drinking water companies, they are shown as
receivables.
• Provision for the early-retirement pension. As per IAS 19,
an actuarial calculation of the provision for earlyretirement
pensions was carried out. The explanation
concerning that calculation is provided in explanation
5.10. Inasmuch as, in accordance with the management
agreement, the group has an unconditional contractual
right to receive compensation for the provision for the
benefit plan from the Flemish Region/the drinking water
companies, they are shown as receivables.
Fair value financial instruments
• Inasmuch as the group, in accordance with the
management agreement, is entitled to receive
compensation for the costs of financing, changes in
the market value of the financial instruments are
recognised as receivables vis-à-vis the unrealised results.
Explanation concerning the calculation and the changes
in that market value are provided in explanation 5.9.
Short-term receivables management agreement
Short-term receivables (i.e. receivables due within a
maximum of one year) as a result of the application of IFRIC 12
comprise the following categories:
(in €000) 2011 2010 At 1 January 2010
Tangible fixed assets included in IFRIC 12 - receivables 116,681 115,430 99,144
Other -5,039 -7,994 -10,460
TOTAL 111,643 107,436 88,684

The tangible fixes asset shown in the IFRIC 12 receivables
comprises:
• wastewater treatment infrastructure delivered to the
Flemish Region;
• infrastructure taken over from the Vlaamse
Milieumaatschappij (Flemish Environmental Agency);
• hydronaut studies;
• investments in hardware, software, laboratory equipment,
furniture, materials and equipment required for the
operations of the head office and investments in hardware,
software, laboratory equipment, electromechanical
replacement investments, extraordinary maintenance
for construction and electromechanics, furniture, etc.,
required for the operational activities;
• investments in the head office building (Dijkstraat 8);
• chargeable costs of the two buildings that the group
leases.
A description of those posts has been provided under the
IFRIC 12 long-term receivables. For the part of those receivables
that are to be recovered within the year, a short-term
receivable has been recognised. Those receivables are
effectively received in year n+1.
The other IFRIC 12 short-term receivables relate primarily
to credit notes/invoices for operating expenses that are yet to
be prepared. After invoicing the drinking water companies on
the basis of the estimates throughout the year, the total
invoicing is specified in detail at year-end. For the corrections
with respect to the previously invoiced amounts, the invoices/
credit notes that are still to be prepared are recognised in
the balance.
Receivables with
Receivables due within a remaining period Receivables with
a period of more than 1 year of more than 1 and a remaining period
IFRIC 12 receivables which expire within the year less than 5 years of more than 5 years Total
(in €000)
IFRIC 12 RECEIVABLES PER YEAR OF EXPIRATION
At 31/12/2011 111,643 439,184 1,617,375 2,168,202
At 31/12/2010 107,436 407,349 1,320,414 1,835,199
At 01/01/2010 88,684 356,540 1,107,646 1,552,870
EXPLANATION 5.1 TO THE 'OTHER FINANCIAL
ASSETS' POST
The other financial assets amounted to €27,440 k at 31
December 2011. With respect to the balance at 31 December
2010, that represented an increase of €17,067 k.
ASSETS
(in €000) Explanation 2011 2010 At 1 January 2010
FIXED ASSETS
Other financial assets 5.1 27,440 10,373 9,884
Consolidated financial statement
47

48
Consolidated financial statement 2011
Within the other financial assets, we distinguish between
several types.
(in €000) 2011 2010 At 1 January 2010
Financial assets available for sale 100 78 0
Warranties 3 2 2
Long-term receivables for municipal transport services 5,781 6,209 6,357
Payments still to be invoiced with respect to Aquafin-commercial projects 16,044 4,036 3,505
Payments still to be invoiced with respect to Aquaplus-commercial projects 191 46 19
Long-term receivables with respect to provisions - intervention of third parties 5,321 0 0
TOTAL 27,440 10,373 9,884
n
Financial assets available for sale
In 2010, the group joined the drinking water company
VMW in the Rio-P West Flanders water service and the East
Flanders Rio-P water service through contribution in kind.
More concretely, the group provided databases containing the
digital inventory of the sewer systems of the municipalities
concerned. For each database provided, the fair value was
determined at the moment of joining Rio-P, including the value
of the expertise provided. That valuation was coordinated with
and invoiced to VMW as main shareholder of Rio-P.
In 2010, drinking water companies AWW and TMVW
entered into a structural collaboration under the name 'waterlink'
with a subsidiary, 'rio-link' being established within it.
On 8 March 2011, the board of directors signed a shareholders'
agreement between water-link and Aquafin with respect to
collaborating in rio-link. Aquafin thereby acquired one-third of
the shares in rio-link in the amount of €22,000. In view of the
negligible material interest in that participation, it is shown
under 'financial investments available for sale'.
n
Long-term receivables for municipal transport services
In the context of the commercial contracts with the
municipalities, Aquafin is assuming responsibility for
transport services for which a system of payment modalities
can be elaborated at the municipalities' request. For the
projects carried out and repaid by the municipalities
concerned over time in this context, the group recognises a
long-term receivable in the amount of the part that is to be
recovered over more than one year from the municipalities
concerned.
n
Payments still to be invoiced with respect to Aquafin
commercial projects
In addition to the projects within the scope of the
management agreement, Aquafin also carries out commercial
projects. The “Rio-Totaal” service package that Aquafin offers
to the municipalities is modular. It makes it possible for the
municipalities to call on Aquafin to assist with those aspects
of expansion and management of a sewer system for which
there is a need. That modular offering is primarily interesting
for cities and municipalities with a good-sized in-house
technical department that wishes to acquire specific support
for one or more aspects of sewer management.
In addition to that modular offering, the municipalities can
also opt for a total solution, the “Rio-Totaal” service package
in the form of a concession of public service. That type of
collaboration makes it possible for the cities and
municipalities to lay their own accents and to decide on
timing, budgets, priorities and ways of working. To bring
integrated drinking-water policy one step closer, Aquafin has
signed agreements for structural collaboration with drinking
water companies. Municipalities can also decide to satisfy
their sanitation obligation in this way.
Based on the estimated percentage of completion of
the commercial projects at 31 December 2011, €63,869k in
revenues have been recognised in 2011 with respect to those
projects. A major part of those revenues, to wit, €16,044 k,
concerns payments that were yet to be invoiced at the end of
2011. Due to the strong increase in the commercial projects
portfolio, that post shows an increase by €12,008 k in
comparison with the end of 2010.

(in €000) 2011 2010
PROJECTS IN PROGRESS ON BEHALF OF THIRD PARTIES
Revenues charged for the financial year 63,869 33,421
Costs charged for the financial year 62,022 31,542
Profit for the financial year 1,847 1,879
n
Payments still to be invoiced with respect to Aquafin’s
commercial projects
At 31 December 2011, the total of payments that had not
yet been invoiced – based on the estimated percentage of
completion of those commercial projects on closing date –
was €191 k. At the end of 2010, those receivables were €46k.
n
Long-term receivables related to provisions - intervention
of third parties
Until 2010, a net receivable was included under the longterm
liabilities with respect to the provisions. Starting in 2011,
the gross amount of the liability was shown under the
provisions and the recoveries from third parties were shown
under the other financial tangible assets. That explains the
increase of this section by €5,321 k.
EXPLANATION 5.2 COMMERCIAL AND OTHER RECEIVABLES
The commercial and other receivables amounted to
€27,188k at the end of financial year 2011. That meant
an increase by €6,711k in comparison with the balance at
31 December 2010.
(in €000) Explanation 2011 2010 At 1 January 2010
Trade receivables and other receivables 5.2 27,188 20,477 25,226
The commercial and other receivables can be broken down
into the following categories:
(in €000) 2011 2010 At 1 January 2010
Short-term receivables for municipal transport services 494 473 473
Trading creditors 21,716 15,843 22,237
Miscellaneous receivables 4,978 4,160 2,515
TOTAL 27,188 20,477 25,226
n
Short-term receivables for municipal transport services
In the context of the commercial contracts with the
municipalities, Aquafin is assuming responsibility for
transport services for which a system of payment modalities
can be elaborated at the municipalities' request. For the
projects carried out and repaid by the municipalities
concerned over time in this context, the group recognises a
short-term receivable in the amount of the part that is to be
recovered within one year from the municipalities concerned.
Consolidated financial statement
49

50
Consolidated financial statement 2011
n
Trading creditors
The table below shows the gross and net commercial
receivables:
(in €000) 2011 2010 At 1 January 2010
TRADING CREDITORS
Gross book value 23,219 17,091 23,730
Devaluations for dubious creditors -1,503 -1,247 -1,492
NET BOOK VALUE 21,716 15,843 22,237
The commercial debtors are not interest-bearing and,
in general, have a payment period of 30 to 60 days. The table
below shows the outstanding commercial receivables by
due date.
(in €000)
Gross book Not Net book
value expired Expired Devaluations value
90 days
31/12/2011 23,219 15,867 5,384 500 340 1,127 -1,503 21,716
31/12/2010 17,091 13,611 341 509 986 1,645 -1,247 15,843
1/01/2010 23,730 20,019 1,287 139 1,537 748 -1,492 22,237
n
Miscellaneous receivables
The various receivables consist primarily of recoverable VAT.
EXPLANATION 5.3 TO THE 'OTHER FINANCIAL LIQUID ASSETS' POST
The other financial liquid assets amounted to €1,476 k at 31
December 2011. With respect to the balance at 31 December
2010, that represented an increase of €563 k.
This concerns the deferred accounts that concern the
pre-paid costs and the payments due from interest and
transport services.
(in €000) Explanation 2011 2010 Per 1 januari 2010
Other financial liquid assets 5.3 1,476 913 452

EXPLANATION 5.4 FUNDS AND CASH EQUIVALENTS
(in €000) Explanation 2011 2010 At 1 January 2010
Funds and cash equivalents 5.4 71,763 4,259 38,340
Partly due to the success of the public emission of a
debenture loan in the fall of 2009, there was a limited cash
surplus at the end of 2009. These temporary surpluses were
utilised in the course of 2010 to finance projects that
were ready to be launched.
In 2011, Aquafin found itself facing greater financing
requirements than it had in previous years due to the
purchase of property and plants of the Vlaamse Milieu -
maatschappij (Flemish Environmental Agency) in the context
of addendum no. 7 of the management agreement.
The banks were limited in their ability to provide additional
loans because they were themselves confronted with
increased costs and new regulations. Belgian institutional
investors, on the other hand, were very interested in financing
Aquafin. That opportunity was therefore utilised to the full:
€285 million in financing was obtained via that channel.
Inasmuch as it was not possible to apply that full amount to
financing projects immediately, there was a temporary cash
surplus and investments of nearly €53 million were made.
In 2012, those funds are to be used to finance projects.
EXPLANATION 5.5 CAPITAL
At the end of financial year 2011, capital amounted to
€248,400,024, of which 210,900,006 was fully deposited;
at the end of 2010, the capital was equal to the deposited
capital: €198,400,000.
In the context of the financing of the purchase of plants of
the Vlaamse Milieumaatschappij (Flemish Environmental
Agency) by Aquafin, the capital was increased by €50,000k
on 13 December 2011. Of that amount, €12.500 k was
deposited. In the same context, a capital deposit in the
amount of €48,971 k was also done in 2010.
The capital is represented by 1,001,613 shares without
nominal value. The shares are issued by name and are
recorded in a shares register by name. As of 1 January 2010,
the capital was represented by 800,000 shares, of which
1,476 were fully paid up and 798,524 were paid up to a level
of 75.27%. Following the capital pay-up on 2 December 2010,
all 800,000 shares were fully paid up. After the capital
increase on 13 December 2011, the capital consists of
800,000 fully paid-up shares and 201,613 shares that are
paid up to a level of 25%.
EXPLANATION 5.6. GROUP RESERVES
The group reserves at the end of financial year 2011
amounted to €27,741 k; that is an increase of €1,304 k in
comparison with the balance at 31 December 2010.
That increase is primarily due to an increase of €1,000 k in
the available reserve to provide the necessary funds for
possible participations in structural collaborations and the
activities of Aquaplus N.V. In addition, there was a logical
increase in the legal reserve.
(in €000) 2011 2010 At 1 January 2010
OTHER EQUITY COMPONENTS
Required reserves 11,036 10,556 10,201
Available reserve 8,600 7,600 7,600
Profit carried forward 8,105 8,281 10,387
TOTAL 27,741 26,437 28,188
Consolidated financial statement
51

52
Consolidated financial statement 2011
The group reserves consist of the legal reserve, the available
reserve and the deferred profit.
The legal reserve is topped-up annually until it reaches a
level equal to 10% of the capital. In accordance with Section
319 of the Companies Code, 5% of the after-tax profit is put
into reserve annually.
The group has had an available reserve of €7,600 k for some
time now. In 2011, that was increased by €1,000 k to provide
the funds necessary for the possible participation in structural
cooperative ventures and the activities of Aquaplus N.V.
The deferred profit amounted to €10,387 k on 1 January 2010;
€8,281 k on 31 December 2010 and €8,105 k on 31 December 2011.
Under BE GAAP, projects on behalf of third parties
(commercial projects in progress) are processed in accordance
with the completed contract method until 31 December 2010.
Due to the conversion to IFRS, those projects are valued in
accordance with the percentage of completion method and
posted in the results pro rata with their percentage of
completion. Concretely, €1,183 k in undelivered projects were
shown in the results on 1 January 2010; at 31 December 2010,
that amount was €1,552 k. Starting in 2011, the valuation rules
were aligned with the IFRS and those projects were also
valued under BE GAAP according to the percentage of
completion method.
In accordance with IAS 10 - Events after the reporting
Period dividends allocated after the financial year are not
posted as a liability as long as they are payable after the end
of the financial year. The impact amounted to €9,198 k on
1 January 2010; €6,724 k on 31 December 2010 and €8,096 k
on 31 December 2011.
EXPLANATION 5.7. CONSOLIDATED OVERVIEW OF REALISED AND UNREALISED RESULTS
(in €000) Explanation 2011 2010
NET PROFIT 8,028 7,447
UNREALISED RESULTS
Net increase in value of cash flow hedges 5.9 -79,711 -20,303
Charge-through via Management Agreement receivables 5.9 79,711 20,303
0 0
Actuarial profits and losses on defined benefit plans 5.11 564 172
Charge-through of IFRIC 12 receivables 5.11 -564 -172
0 0
Unrealised results after taxes 0 0
TOTAL REALISED AND UNREALISED RESULTS AFTER TAXES 8,028 7,447
The unrealised results with respect to cash flow hedges
must be considered as recyclable and the actuarial profits and
losses on defined benefit plans as non-recyclable.

EXPLANATION 5.8 INTEREST-BEARING LOANS - LONG-TERM AND SHORT-TERM
FINANCIAL LIABILITIES
n
Overview of interest-bearing loans - long-term and shortterm
at 31 December 2011
At 31 December 2011, the outstanding financial debts can
be broken down as follows:
• financial long-term debts, more than 1 year: €1,568,254 k;
• financial long-term debts, due within 1 year: €157,904 k;
• financial short-term debts: €82,006 k.
Detail of the financial debts by category:
Interest rate %
(in €000) (average) Term 2011 2010 At 1 January 2010
Long-term bank debt under allocation 4.39% 2012-2041 1,459,216 1,089,985 1,037,976
Private placement 4.25% 2013 100,000 100,000 100,000
Retail bond 4.00% 2015 150,000 150,000 150,000
Long-term bank debt purchase of Dijkstraat 8 4.79% 2029 8,302 8,510 8,700
Long-term bank debt commercial activities 4.46% 2024-2025 6,518 6,898 6,932
Leasing debts 7.48% 2015-2016 2,122 2,448 2,740
TOTAL LONG-TERM FINANCIAL DEBTS 1,726,158 1,357,841 1,306,348
Short-term bank debts (Commercial Paper) 1.35% 2012 73,000 140,600 30,500
Short-term bank debt commercial activities 1.66% 2012 9,006
Total short-term financial debts 82,006 140,600 30,500
TOTAL LONG-TERM & SHORT-TERM FINANCIAL DEBTS 1,808,164 1,498,441 1,336,848
n Long-term bank debts under allocation at 31 December 2011
The long-term credits are used to finance the investments
that are being repaid over time by the Flemish Region and,
since 1 January 2005, by the drinking-water companies with
the Flemish Region as co-debtor. Long-term financing is based
on the allocation agreement. It defines that the balance of
the long-term credits must be smaller than the claims that
Aquafin has on the drinking water companies, respectively
the Flemish Region. These claims consist of the investment
projects that have not been paid, but that have already
been delivered.
In 2010 and 2011, Aquafin was directed by the Flemish
Region to purchase assets from the Vlaamse Milieu -
maatschappij (Flemish Environmental Agency). Initially, the
financing for the purchase was bridged by short-term
borrowing. At the end of 2011, the commercial paper was
reduced sharply as part of the long-term financing of
those VMM assets. The share of long-term loans has therefore
increased significantly, from €1,090 million at the end
of 2010 to €1,459 million at the end of 2011.
At 31 December 2011, a nominal amount of €2,542,348 k
was taken up, of which €1,459,216 k has not yet been repaid.
In 2011, Aquafin was able to meet its long-term financing
requirements with loans from the European Investment Bank
(€75 million), the commercial banks (€150 million) and new
institutional investors (€285 million).
Consolidated financial statement
53

54
Consolidated financial statement 2011
In general, the loans have the following structure:
• take-up in EUR
• fixed interest for the full life of the loan or variable
interest hedged with a maximum ceiling interest rate
• term of 15 years (up to 2008) and 30 years (from 2009)
• equal half-yearly capital repayments
• semi-annual interest payments.
n Bond loans at 31 December 2011
Bond issue 2006 (Private placement)
On 30 May 2006, Aquafin issued a seven-year bond loan in
the amount of €100 million. Those funds are now being used
to fund the works in progress.
The bond loan issued by Aquafin has the following
characteristics:
• take-up: €100 million
• issue below par: 99.881%
• issue at a discount: 4.25% coupon
• period of 7 years
• annual repayment of interest
• security: rating at the moment of the issue.
Bond issue 2009 (Retail bond)
The net receipts from this retail bond loan will, in the first
instance, be used for a partial refinancing of existing Aquafin
debt and for general company purposes. This includes
financing the works that are in execution for the development
of the supramunicipal treatment infrastructure in Flanders.
The subscription for the bond loan that Aquafin issued has
the following characteristics:
n
• take-up: €150 million
• issue above par: 101.639%
• issue at a discount: 4.00% coupon
• annual gross return: 3,69%
• repayment: 100% on date of expiry
• period of 6 years
• annual repayment of interest
• listing: Euronext Brussels.
Bank loan for the purchase of the office building at
Dijkstraat 8 at 31 December 2011
For the purchase and renovation of the office building at
Dijkstraat 8, a long-term loan in the amount of €8,700,000 and
a term of 20 years at fixed interest of 4.79% over the entire life
of the loan was taken out.
n
Bank debts for commercial activities of the municipalities
at 31 December 2011
In the context of the commercial contracts with the
municipalities, Aquafin is assuming responsibility for
transport services for which a system of payment modalities
can be elaborated at the municipalities' request.
At the end of June 2009, the very first project (Kapellen)
was completed and the transition was made from short-term
financing to long-term financing over 15 years. Analogous to
the loan that Aquafin took out with the bank, Kappellen
receives from Aquafin an invoice every quarter with the
charges for the transport service provided. In 2010, the second
long-term project (Vilvoorde) was financed. In 2011, there were
also several projects that required new financing started.
n Leasing debts at 31 December 2011
This section contains the debts related to leased buildings:
Dijkstraat 10 and Delta for a total amount still to be repaid
of €2,122 k.
n Short-term bank debts at 31 December 2011
The short-term financing was used primarily to fund
the work in progress before delivery. The two bond loans that
Aquafin issued form the basis for the financing requirements
for the work in progress and explain the low level.
Commercial paper
Features:
• issue programme of €400 million in treasury bills
• BNP Paribas Fortis is the arrangers and domicile agent
• BNP Paribas Fortis, Dexia and KBC are the dealers
• term of at least 7 days and a maximum of half a year
• in 2011 no issues on the secondary market > 1 year
• the very first issue by Aquafin took place on 22 June 2000.
The commercial paper programme is hedged by €300
million in back-up lines, distributed over the three dealers.
At 31 December 2011, €73 million in commercial paper
was issued.
Credit lines
At 31 December 2011, there were no take-ups carried out
within the available bilateral credit lines (€80 million).
The same applies to the revolving credit facility (€100 million).

n
Short-term bank debts for commercial activities at
31 December 2011
In the context of the contracts with the municipalities
that were entered into outside the scope of the agreement
with the Flemish Region, Aquafin takes on specific sanitation
tasks; at the request of the municipalities, a system of
payment modalities can be worked out in respect of those
tasks. Aquafin finances the work in progress by means of
short-term financing. At 31/12/2011, €9,005 k was taken up
within the existing credit lines.
n
Break-out of the financial long-term debts by how much
time remains
Debts due within
Debts with
a period of more than a remaining period Debts with
1 year which expire of more than 1 and a remaining period
At 31 December 2011 within the year less than 5 years of more than 5 years Total
(in €000)
Credit institutions 157,540 752,976 813,520 1,724,036
Leasing debts 364 1,689 69 2,122
TOTAL LONG-TERM FINANCIAL DEBTS 157,904 754,665 813,589 1,726,158
Debts due within
Debts with
a period of more than a remaining period Debts with
1 year which expire of more than 1 and a remaining period
At 31 December 2010 within the year less than 5 years of more than 5 years Total
(in €000)
Credit institutions 140,107 699,526 515,760 1,355,393
Leasing debts 326 1,720 402 2,448
TOTAL LONG-TERM FINANCIAL DEBTS 140,433 701,246 516,162 1,357,841
Debts due within
Debts with
a period of more than a remaining period Debts with
1 year which expire of more than 1 and a remaining period
At 1 January 2010 within the year less than 5 years of more than 5 years Total
(in €000)
Credit institutions 132,695 551,987 618,926 1,303,608
Leasing debts 292 1,547 901 2,740
TOTAL LONG-TERM FINANCIAL DEBTS 132,987 553,534 619,827 1,306,348
Consolidated financial statement
55

56
Consolidated financial statement 2011
EXPLANATION 5.9 OTHER LONG-TERM FINANCIAL LIABILITIES
n
Hedge accounting - financial derivative instruments
(in €000) 2011 2010 At 1 January 2010
Financial instruments to hedge the interest risk at market value 135,267 44,571 19,992
Other liabilities 133 120 104
TOTAL OTHER LONG-TERM FINANCIAL LIABILITIES 135,401 44,691 20,096
n
Interest policy
Care must always be taken to ensure that:
Aquafin has significant interest burdens. They are
accompanied by interest risks due to possible changes in the
interest rates, which is both a disadvantage if the interest rate
increases and a missed benefit if the interest rate drops.
Aquafin wants to optimise the cost of financing through
the active management of the interest risk by using financial
instruments to have the cash flows be such that the risk
is limited.
In May 2006, the Board of Directors of Aquafin approved
the implementation of a dynamic management procedure
for interest rate risks. An interest policy was devised with
the outlines of interest rate management set out; the policy
was then approved by the board of directors.
At 31 December 2011, Aquafin had outstanding long-term
debt of €1.7 billion. The active interest management system
can be applied to a maximum of 35% of that debt, with the
aim of achieving interest savings for Aquafin. The interest
management may be built up as follows:
• minimum of 65% of the debt with fixed-rate interest
• maximum of 35% of the liquid debt, of which:
- 25% with limited risk (cap)
- 10% fully liquid
Aquafin not only has an existing debt that can be actively
managed, but the future budgeted debt can also be hedged.
On the basis of the investment programmes imposed on
Aquafin by the Flemish Region, Aquafin can look several years
into the future and make a reasonable assessment of its
future financing needs. To cover future financing needs,
the interest rate policy results in a dynamic interestmanagement
programme up to 50% of the future long-term
debts, with a 5-year horizon.
• the risks are covered
• an underlying loan is always budgeted against a hedging
structure
For 2011, interest savings of €2 million have been achieved
through the active management of the interest risk.
That financial result is the difference of the financing burden
that Aquafin has as a result of the interest management
and the financing burden that Aquafin would have had if it
were subject to fixed interest without active management.
This comparison is based on the so-called benchmark.
The benchmark is the interest rate in effect, the fixed interest
at which the underlying long-term loan would have been
taken out at in accordance with the characteristics (term,
repayment schedule) at the moment of finalising the financial
instruments. Different financial instruments combined
constitute the structure. The interest cost of the underlying
loan is then seen together with the cash flows from the
matching structure, resulting in the ultimate financing
burden for Aquafin.
The savings are settled with the drinking-water companies.
At least 50% of that was immediately deducted from the
invoice to the drinking-water companies. For 2011, €1.2 million
has been credited. The remaining €0.8 million serves as a
buffer for possible optimisations. At 31 December 2011, a total
of €2 million was set aside for optimisations. That amount
was built up in 2011 and previous years.
Aquafin established some new structures in 2011, with
an eye to the future financing needs. Existing strategies were
also optimised. During 2011, an additional €195 million in loans
were hedged. That allows Aquafin to stay within the 35%
to 50% range.

n
Application of Hedge accounting
The variation in the value of the financial instruments to
cover the interest risk can be compensated through hedge
accounting in the realised and unrealised results, if they
satisfy specific conditions. In the other event, the impact is
accounted for in the profit and loss account.
A distinction is made between two hedge categories.
1. Fair value hedge as a hedge of a change in the fair value
of a financial asset or liability. Aquafin has financial
instruments based on existing loans with fixed interest
rates that are classified as fair value hedges.
2. Cash flow hedge as a hedge of the variability in cash flows
that are either attributable to a particular risk of a
recognised financial asset or liability or a very probable
expected future transaction. Aquafin has financial
instruments on existing loans with variable interest rates
that are classified as cash flow hedges as well as those on
future loans with a high degree of probability with respect
to predicted financing requirements.
Within those two hedge categories, the structures can
'qualify' for hedge accounting if they satisfy the condition
that the underlying loan, in the event of an existing loan,
is a perfect match with the structure or, in the event of a
future loan, the budgeted loan will be taken up with certainty
in accordance with the established structure. If one of the
conditions is uncertain, Aquafin has opted not to qualify
the structure.
The following table shows a division of the structures by
hedge category, qualification, outstanding amount (of the
underlying loan or the future scheduled loan) and their
market value. The market value of the structures is calculated
as the discounted value of the estimated future cash flows
and reflects the sales value at the moment of the applicable
market interest rate (31/12/2011 and 31/12/2010). The figures
are shown in '000 EUR.
The decline in the total market value of the financial
instruments is due to the declining interest rate. Setting up
the structure is done at implementation at zero cost.
The use of options such as fixed interest floors have a valuereducing
effect in the event of declining interest rates.
On the other hand, there is also the fact that the hedging
portfolio is still being expanded due to the implementation
of the interest policy.
At 31 December 2011, Aquafin had established dynamic
interest management for 37 structures. Three of those do not
qualify for hedge accounting. The impact is therefore shown
completely in the results. Of the 34 qualifying structures,
four are assigned as fair value hedges. Those structures
were set up for an existing loan with a fixed interest rate
and then made variable. A fair value adjustment is applied to
the nominal value of the underlying loan of those structures.
The remaining structures all qualify for cash flow hedging.
Every hedging transaction is fully documented when it is
entered into. That includes the identification of the underlying
position, the objectives of the interest rate policy, the nature of
the hedged position and of the financial instruments.
Outstanding amount Market value Market value
Hedge category Qualifying Number 31/12/2011 31/12/2011 31/12/2010
(in €000)
Fair value hedge No 2 113,333 308 507
Fair value hedge Yes 4 134,167 1,740 -28
Cash flow hedge No 1 100,000 -16,592 -7,651
Cash flow hedge Yes 30 772,500 -120,724 -37,400
TOTAL STRUCTURES 37 1,120,000 -135,267 -44,571
Consolidated financial statement
57

58
Consolidated financial statement 2011
Within IFRS, the valuation of financial instruments to cover
the interest risk is categorised in three levels: 1) market prices,
2) valuations derived from market prices (observable input)
and 3) valuation models without observable input. Aquafin's
structures are categorised as level 2, as prescribed in IFRS.
The market value of financial instruments consists of
different components, such as the intrinsic value (value of the
instrument as such), the time value (the value between time
and expiry date) and coupons (interest still to be settled).
The following table shows the market value of the
structures with an indication of which structures run
completely via the results account and which are partly shown
in the realised and unrealised results. For the cash flow
hedges, the intrinsic value goes via the realised and unrealised
results but the time value goes to the results account.
(in €000) 2011 2010
FINANCIAL INSTRUMENTS TO HEDGE THE INTEREST RISK AT MARKET VALUE,
WITH THE VARIATION IN VALUE BEING PROCESSED VIA THE RESULTS ACCOUNT
Fair value hedge - unqualified 308 507
Fair value hedge - qualified 1,740 -27
Cash flow hedge - unqualified -16,592 -7,651
FINANCIAL INSTRUMENTS TO HEDGE THE INTEREST RISK AT MARKET VALUE,
WITH THE VARIATION IN VALUE BEING PARTLY PROCESSED VIA THE REALISED
AND UNREALISED RESULTS
Cash flow hedge - qualified -120,724 -37,399
TOTAL -135,267 -44,571
The fair value hedges that do not qualify are shown
completely in the results. That also applies for the cash flow
hedge, which Aquafin has decided not to qualify. The fair value
hedges that do qualify are settled in the results and, at the
same time, the nominal value of their underlying loans are
also adjusted.
The following table shows the impact on the results
account on the one hand and the part that is absorbed via
the realised and unrealised results on the other hand.
(in €000) 2011 2010
RESULTS ACCOUNT -10,985 -4,276
Impact of all of the structures -12,516 -2,798
Impact of the coupon -434 -1,515
Adjustment of the hedge structure of the qualifying fair value hedges 1,964 36
REALISED AND UNREALISED RESULTS -79,711 -20,302
Impact of qualified cash flow hedges -79,711 -20,302
VARIATION OF MARKET VALUE -90,695 -24,579

The impact on the results account of all of the structures
over the period 1 January 2011 – 31 December 2011 amounts
to -€12,515,674. For the qualifying fair value hedges, an
adjustment to the nominal value of the underlying loans is
made. In that way, there is a compensation in the results of the
structure on the one hand and the underlying loan on the
other hand. For 2011, a decline in value of the underlying loan
in the amount of €1,964,524 occurred to compensate for an
increase in value of the structure in the same amount.
That leads to an offset on the plus and the minus side of
the result. In addition, there is the impact of the variation in
the coupon.
The impact on equity via the realised and unrealised
results over the period 1 January 2011 – 31 December 2011
is -€79,711,154.
n
Interest risk
In general, we can state that a change in the interest rate
has no impact on Aquafin's results. The provisions of the
management agreement with the Flemish Region that cover
the compensation stipulate that all reasonable costs will be
compensated. Interest payments, just like all other financial
costs, are reasonable costs.
Aquafin has significant interest burdens and with the
active management of the interest risk, the company wants to
optimise the costs of financing. Under the active interest
management, the risks are fully covered and there is always an
underlying loan that matches the hedging structure.
The interest risk for Aquafin is primarily with respect to
financing requirements over the medium to long term.
The interest policy stipulates that 50% of those budgeted
financing requirements can be hedged five years in advance.
n
Sensitivity analysis
A large part of Aquafin´s financial liabilities are fixedinterest
long-term loans that interest rate fluctuations have
no impact on. Since the implementation of the interest policy,
that has changed and there are, on the one hand, several loans
with fixed interest rates have been made variable and, on the
other hand, several long-term loans have been taken out (or
will be) with variable interest. For the swap transactions
where variable interest rates are exchanged for fixed interest,
the impact of an interest fluctuation is zero due to the
complete neutralisation. In addition, there are several
transactions with options (caps, floors) where a change in
the interest rate – within a particular tunnel/collar – would
have an impact on the interest payments.
The following table illustrates the distribution of fixed
versus variable interest as they applied when the loans were
taken out (without taking a structure into account). Until 2011,
each loan with variable interest was fully hedged with a
structure (cap). A loan with variable interest and no hedge is
permitted under the new interest policy (10% rule).
(in €000) 2011 2010
DISTRIBUTION OF FIXED/VARIABLE INTEREST RATES EXPRESSED IN NOMINAL VALUE
Fixed interest rate 1,456,536 1,207,060
Variable interest rate 267,500 148,333
TOTAL 1,724,036 1,355,393
Consolidated financial statement
59

60
Consolidated financial statement 2011
A sensitivity analysis uses forward rates to estimate the
impact of a shift in the interest. Forward rates are the
estimated future interest rates in the assumption that all
other variables in the market will be kept constant. On that
basis, the impact of an interest decline or increase is
translated into an interest cost or interest receipts. The table
below illustrates the impact.
Net result
(in €000) impact at 31/12/12
Impact at 31/12/2012 -0,50% -717
Impact at 31/12/2012 -0,25% 322
Impact at 31/12/2012 0,00% 1,192
Impact at 31/12/2012 0,25% 1,660
Impact at 31/12/2012 0,50% 1,149
Impact at 31/12/2012 1,00% 3,200
The interest burdens are calculated on the basis of the
forward rates as set at 30 December 2011. The interest burdens
at 31 December 2012, for example, are estimated on the basis
of the estimated long-term interest in accordance with the
underlying loans. On the basis of those forward rates – with all
of the variables kept constant – the net effect at 31 December
2012 is plus €1,192 thousand. The theoretical approach
whereby a shift of the interest is simulated ranges from
-50bp to +100bp. An interest rate increase and small interest
rate decrease results in a positive impact and an interest rate
decrease of 50 bp results in a negative impact.
The assumed movement as expressed in basic points for
the sensitivity analysis of the interest is based on market
conditions that are clearly more volatile than they have been
in recent years. An increase in the interest rate results in more
savings in comparison with interest rate declines.
n
Liquidity risk
Sources of long-term financing are diversified via the issue
of private and public bond issue. In addition, there is a also
a commercial paper programme, a revolving credit facility
and there are credit and back-up lines at various banks.
n
Financial risks
Aquafin has loans and must be able to repay them.
The short-term loans are used primarily to fund the work in
progress before delivery. Long-term financing is based on the
allocation agreement. It defines that the balance of the longterm
credits must be smaller than the claims that Aquafin has
on the drinking water companies, respectively the Flemish
Region. These claims consist of the investment projects that
have not been paid, but that have already been delivered.
The covenants with the credit institutions have been
satisfied.
A breakdown of the financial instruments by year of
settlement is shown below.
Expiry year Expiry year Expiry year
(in €000) 2012 2013-2016 ≥ 2017 Total
DISTRIBUTION BY SETTLEMENT YEAR (AT NOMINAL VALUE)
Outstanding debt 24,333 219,833 875,833 1,120,000
EXPLANATION 5.10 OTHER PROVISIONS AT 31 DECEMBER 2011
The provisions provided at 31 December 2011 relate to
legal disputes, insurance dossiers, disputes in the context of
the execution of the management agreement and processing
of the sludge buffered in the plants.
From financial year 2011, the (net) provisions to be created
are broken down into gross liabilities and receipts from
third parties. The retroactive split of the net provisions at
31 December 2010 and on the situation of the opening balance
would have been too expensive, which would not have been
proportional to the improved quality of the information.
(in €000) 31/12/2011 31/12/2010 01/01/2010
Gross liabilities 7,064 2,139 2,173
Intervention of third parties -5,321 - -
Net provisions 1,743 2,139 2,173

Evolution of the provisions by type:
Disputes
Legal Insurance Management Sludge
(in €000) Arrears disputes dossiers Agreement buffers Total
PROVISIONS AT 31/12/2010 16 1,597 152 122 252 2,139
Additions 27 4,997 912 40 61 6,037
Clawbacks of unused amounts -20 -897 -45 -150 -1,112
Draws 0
PROVISIONS AT 12/31/11 23 5,697 1,019 162 163 7,064
Short-term at 31/12/2011 9 163 172
Long-term at 31/12/2011 14 5,697 1,019 162 6,892
Disputes
Legal Insurance Management Sludge
(in €000) Arrears disputes dossiers Agreement buffers Total
PROVISIONS AT 1/1/10 32 1,428 107 122 484 2,173
Additions 432 45 164 641
Clawbacks of unused amounts -16 -141 -396 -553
Draws -122 -122
PROVISIONS AT 31/12/2010 16 1,597 152 122 252 2,139
Short-term at 12/31/10 3 252 255
Long-term at 12/31/10 13 1,597 152 122 1,884
The provisions for processing the sludge that is buffered in
the plants can be charged to the drinking water
companies/the Flemish Region immediately because they fall
under 'reasonable costs' as provided for in the management
agreement with the Flemish Region.
The other posts with respect to provisions cannot be
charged to the drinking water companies/the Flemish Region
– or only over the long term – and accompanied by clear
statement of why those costs should be considered
reasonable.
n
Provisions for lateness
For delays in the delivery of investment projects, in
comparison with the agreed delivery dates, the group legally
owes compensation for damages. Provisions were made to
cover any such delays that could have been foreseen at
31 December 2011. The provision for lateness amounts to
€22,745 for five projects.
n
Provisions for insurance dossiers
At 31 December 2011, the provision amounted to
€1,018,508 for four insurance dossiers.
n
Provisions for various disputes in the context of the
management agreement
All of the remaining risks related to the management
agreement fall under this provision, especially with respect
to the possible infringements of the management agreement
or the risk of unreasonableness and thus no repayment of
specific costs.
n
Provision for sludge buffers
Every year, a provision is made for the processing costs for
the sludge in the buffers. The processing cost for the buffered
sludge falls under 'reasonable costs' as provided for in the
management agreement with the Flemish Region.
n
Provisions for legal disputes
With respect to legal disputes, a provision was made in the
amount of a reasonable estimate of the penalty in the event
that it was considered likely that the group would lose the
dispute. At 31 December 2011, the provision for legal disputes
amounted to €5,697,771 for 138 disputes.
Consolidated financial statement
61

62
Consolidated financial statement 2011
EXPLANATION 5.11 PENSION LIABILITIES
(in €000) 2011 2010 At 1 January 2010
PENSION LIABILITIES
Provision for defined benefit plans 5,926 5,894 5,773
Provision for early-retirement pensions 901 1,013 815
TOTAL 6,827 6,907 6,589
A distinction is made in the pension liabilities between:
1. Provisions for defined benefit plans
2. Provisions for early-retirement pensions
1. Provisions for defined benefit plans
There are two types of pension schemes within the group:
defined benefit plans and defined contribution plans.
• Liabilities with respect to defined contribution plans are
applied against the profit and loss account immediately.
The periodic premium payment is registered as a period
cost.
• The debt or possible receivable from the defined benefit
plans is shown in the balance statement. In such
schemes, the amount in the balance statement (the net
liability) matches the cash value of the gross liability,
reduced by the fair value of the fund investments
and adjusted for not-taken pension costs for past
employment. To be able to estimate future liabilities
accurately, a specific actuarial calculation, the projected
unit credit method, will be used.
The provision resulting from that calculation amounted to
€5,773 k on 1 January 2010; €5,894 k on 31 December 2010 and
€5,926 k on 31 December 2011.
(in €000) 2011 2010 At 1 January 2010
PROVISION FOR DEFINED BENEFIT PLANS
Current value of the liability 21,818 19,998 17,961
Fair value of the plan assets 15,892 14,103 12,188
DEFINED BENEFIT PLANS 5,926 5,894 5,773
The actuarial calculation takes the following assumptions
into account:
(in €000) 2011 2010 At 1 January 2010
ASSUMPTIONS
Salary increase 3.5% per year until age 55 3.5% per year until age 55 3.5% per year until age 55
2% per year thereafter 2% per year thereafter 2% per year thereafter
reported % include inflation reported % include inflation reported % include inflation
Inflation 2% per year 2% per year 2% per year
This % applied to calculate This % applied to calculate This % applied to calculate
the ceiling of the social security the ceiling of the social security the ceiling of the social security
Discount rate 5.15% per year 5.15% per year 5.15% per year
Retirement age 65 years for everyone 65 years for everyone 65 years for everyone
Life expectancy MR (Belgian mortality tables men) MR (Belgian mortality tables men) MR (Belgian mortality tables men)
FR (Belgian mortality tables women) FR (Belgian mortality tables women) FR (Belgian mortality tables women)

The changes in the cash value of the defined benefit plans
are as follows:
The changes in the fair value of the fund investments are
as follows:
(in €000)
DEFINED BENEFIT OBLIGATION 01/01/2010 17,961
Service cost 1,228
Interest cost 917
Plan Participants' Contributions 251
Premiums paid
Expenses paid
Benefits paid -337
Actuarial gains/losses -23
DEFINED BENEFIT OBLIGATION 31/12/2010 19,998
Service cost 1,272
Interest cost 1,025
Plan Participants' Contributions 262
Premiums paid
Expenses paid
Benefits paid -525
Actuarial gains/losses -213
DEFINED BENEFIT OBLIGATION 31/12/2011 21,818
(in €000)
FAIR VALUE OF PLAN ASSETS 01/01/2010 12,188
Expected return on plan assets 574
Expected employer contribution 1,182
Plan Participants' Contributions 251
Premiums paid
Expenses paid
Benefits paid -337
Actuarial gains/losses 245
FAIR VALUE OF PLAN ASSETS 31/12/2010 14,103
Expected return on plan assets 665
Expected employer contribution 1,282
Plan Participants' Contributions 262
Premiums paid
Expenses paid
Benefits paid -525
Actuarial gains/losses 105
FAIR VALUE OF PLAN ASSETS 31/12/2011 15,892
The cost shown in the results account with respect to
the defined benefit plans comprises the following elements.
(in €000) 2011 2010
CHANGES IN DEFINED BENEFIT OBLIGATION (1) 2,034 2,059
Service cost 1,272 1,228
Interest cost 1,025 917
Plan Participants' contributions 262 251
Benefits paid -525 -337
CHANGE IN PLAN ASSETS (2) 1,684 1,670
Return on plan assets 665 574
Employer contribution 1,282 1,182
Plan Participant's contributions 262 251
Benefits paid -525 -337
BENEFIT EXPENSE (1-2) 350 389
The fair value of the fund investments at 31 December 2010
and at 31 December 2011 consists for 100% of branch 21 products
with guaranteed returns.
Consolidated financial statement
63

64
Consolidated financial statement 2011
Sensitivity analysis
DR 5.15% 6.15% 4.15%
+ 1.00% - 1.00%
(in €000) Baseline Discount Rate Discount Rate
SENSITIVITY ANALYSIS
Gross Service Cost at 1/1/2012 (no interest) 1,481 1,238 1,785
Benefit Expense for 2012 1,666 1,436 1,921
Defined Benefit Obligation (DBO) as of 1/1/2012 21,818 18,483 25,942
With respect to pension plans of the defined contribution
plan, €468 k in premiums in 2011 were shown in the results.
2. Provisions for early-retirement pensions
Early retirement schemes are also treated as defined benefit
plans.
(in €000) 2011 2010 At 1 January 2010
EARLY RETIREMENT LIABILITIES
Defined benefit obligation 901 1,013 815
Assets 0 0 0
UNFUNDED DEFINED BENEFIT OBLIGATION 901 1,013 815
The group makes a provision that is calculated in accordance
with the project unit credit method. The early-retirement
pension liability amounted to €815 k at 1 January 2010,
€1,013 k at 1 January 2011 and €901 k at 1 January 2012.
The following assumptions were used in the calculation:
(in €000) 2011 2010 At 1 January 2010
ASSUMPTIONS
Salary increase 3.5% per year until age 55 3.5% per year until age 55 3.5% per year until age 55
2% per year thereafter 2% per year thereafter 2% per year thereafter
reported % include inflation reported % include inflation reported % include inflation
Inflation 2% per year 2% per year 2% per year
This % applied to calculate This % applied to calculate This % applied to calculate
the ceiling of the social security the ceiling of the social security the ceiling of the social security
Discount rate 5.15% per year 5.15% per year 5.15% per year
Early retirement age Until 31/12/2014: 1st day of 1st day of the month after 1st day of the month after
the month after the 58th birthday the 58th birthday the 58th birthday
From 1/1/15: 1st day of the month
after the 60th birthday
Probability of taking Age < 50 years: 0% Age < 50 years: 0% Age < 50 years: 0%
early retirement Age ≥ 50 years: 20% Age ≥ 50 years: 20% Age ≥ 50 years: 20%
Life expectancy MR (Belgian mortality tables men) MR (Belgian mortality tables men) MR (Belgian mortality tables men)
FR (Belgian mortality tables women) FR (Belgian mortality tables women) FR (Belgian mortality tables women)

The early-retirement pension liability amounted to €815 k
at 1 January 2010, €1,013 k at 1 January 2011 and €901 k at
1 January 2012. There were no assets to offset that.
Changes to the cash value of the defined benefit liability
for early-retirement pension:
(in €000)
DEFINED BENEFIT OBLIGATION
Service cost 66
Interest cost 41
Benefits paid -6
Actuarial gains/losses 96
DEFINED BENEFIT OBLIGATION 31/12/2010 1,013
Service cost 93
Interest cost 51
Benefits paid -11
Actuarial gains/losses -246
DEFINED BENEFIT OBLIGATION 31/12/2011 901
Sensibility analysis
DR 5.15% 6.15% 4.15%
+ 1.00% - 1.00%
(in €000) Baseline Discount Rate Discount Rate
SENSITIVITY ANALYSIS
Gross Service Cost at 1/1/2012 (no interest) 1,480,865 1,238,068 1,785,079
Benefit Expense for 2012 1,666,083 1,436,252 1,921,064
Defined Benefit Obligation (DBO) as of 1/1/2012 21,818,492 18,483,599 25,942,224
EXPLANATION 5.12 TO THE BALANCE ITEM 'COMMERCIAL DEBTS AND OTHER PAYABLES'
The commercial debts and other payables amounted to
€83,115 k at 31 December 2011. With respect to the balance at
31 December 2010, that represented an increase of €3,668 k.
(in €000) Explanation 2011 2010 At 1 January 2010
Commercial debts and other payables 5.12 83,115 79,447 69,559
Consolidated financial statement
65

66
Consolidated financial statement 2011
A distinction is made within the commercial debts and
other payables between: suppliers, debts with respect to
payroll and social premiums, advances received and pledges
received. At 31 December 2011, the number of days of supplier
credit - calculated as: outstanding commercial debts of no
more than one year/purchases including VAT * 365 - 55 days.
In 2010, that was 61 days. The purchases consist of: the
investments in projects during the financial year, the change
to the fixed assets under construction, the purchase of trading
goods, raw materials and additives, and the services and
miscellaneous goods.
(in €000) 31/12/2011 31/12/2010 01/01/2010
Suppliers 75,695 72,113 62,656
Debts related to salaries and social premiums 7,250 7,211 6,568
Advances received 155 110 290
Securities received 15 14 44
TOTAL 83,115 79,447 69,559
EXPLANATION 5.13 TO THE 'OTHER SHORT-TERM FINANCIAL LIABILITIES' POST
The other financial liquid assets amounted to €15,086 k at
31 December 2011. With respect to the balance at 31 December
2010, that represented an increase of €2,030 k.
(in €000) Explanation 2011 2010 At 1 January 2010
Other short-term financial liabilities 5.13 15,086 13,056 13,768
This concerns a deferred account of the liabilities, primarily
interest owed.
EXPLANATION 5.14 TO THE 'TAXES PAYABLE' ITEM
The outstanding liability at 31 December 2011 primarily
concerned income taxes due (€1,213 k) and property taxes
(€436 k).
(in €000) Explanation 2011 2010 At 1 January 2010
Taxes payable 5.14 1,770 1,701 121

Explanation to the consolidated profit and loss account
EXPLANATION 6.0 SERVICES RENDERED
(in €000) 2011 2010
Activities under the Management Agreement -232,989 -214,215
Activities outside the Management Agreement -64,456 -33,741
TOTAL -297,445 -247,956
Of that amount, €232,989 k relates to activities under the
management agreement, compared with €214,215 k in 2010.
For the activities outside the scope of the management
agreement, revenues of €64,456 k were achieved, versus
€33,741 k in 2010.
In the context of the management agreement, Aquafin
collects the wastewater from the Flemish households in main
sewers and transports it to treatment plants. For that purpose,
Aquafin first developed the necessary infrastructure:
collectors for wastewater, pumping stations and wastewater
treatment plants. Aquafin prefinances the projects awarded
and the drinking water companies repay the investments.
From projects delivered from 1 January 2009, the repayment
term is 15 years for the electromechanical works and 30 years
for the construction works.
For assets that were acquired from the Vlaamse Milieu -
maatschappij (Flemish Environmental Agency), the repayment
term is 20 years.
Aquafin is also responsible for the maintenance and
operation of the supramunicipal sewerage and the
wastewater treatment plants. The treated wastewater must
comply with Flemish and European standards.
Outside the management agreement, Aquafin has also
developed a specific offering for cities and municipalities.
Several cities and municipalities have outsourced the
construction and maintenance of their sewers completely to
Aquafin. Several companies also have their wastewater
treated by Aquafin.
EXPLANATION 6.1 OTHER INCOME
(in €000) Explanation 2011 2010
Other company income 6.1 15,804 6,803
The other income amounted to €15,804 k in 2011 and
€6,803 k in 2010.
This primarily concerns recovery of costs that cannot be
assigned to normal income.
The increase in this items relates primarily to the changes
in market value vis-à-vis the fair value hedge (qualified and
unqualified) and unqualified cash flow hedges. Based on the
concession agreement with the Flemish Region, this change
in market value is compensated for in the IFRIC 12 claim.
Changes in market value of qualified cash flow hedges do not
go via the other income item, but via the overview of the
unrealised results (in plus and minus).
Other items here are: invoicing to third parties of the costs
of incidents, invoicing of public utilities if third parties use
the public utilities of the group, invoicing of costs incurred for
treating wastewater originating outside the working area of
the group (e.g. wastewater from northern France), invoicing of
extra sludge costs if the usual sludge-processing company is
unable to process the agreement volumes, income from green
electricity certificates, recoveries related to the company
vehicles and special assignments.
Consolidated financial statement
67

68
Consolidated financial statement 2011
EXPLANATION 6.2 RAW MATERIALS AND ADDITIVES, SERVICES AND MISCELLANEOUS GOODS
(in €000) Explanation 2011 2010
Raw materials and additives, services and miscellaneous goods 6.2 -163,426 -125,755
The costs for raw materials and additives amounted to
€163,426 k in 2011 and €125,755 k in 2010. The primary cost
components include: consumption of natural gas and
electricity, removal and dumping costs for sand and sludge,
maintenance costs, consumption of chemicals, vacuuming,
spraying and cleaning and operating costs charged by the
Brussels Region for treating wastewater originating from
the Flemish Region, study bureau costs, external personnel
and vehicle costs, costs for study bureau and construction in
the context of commercial activities.
The increase in the costs of this item are primarily due to
the growth of the commercial activities.
In this item, €525 k and €531 k in research costs were posted
immediately against the results in 2010 and 2011, respectively.
The immediately usable research that Aquafin conducts
concentrates on cost-control, guaranteeing the effluent
standards and introducing the best available technologies.
The strategic research is grouped around the theme areas of
climate change, integrated water management and asset
management of the (sewer) infrastructure.
EXPLANATION 6.3 PERSONNEL COSTS
(in €000) Explanation 2011 2010
Personnel costs 6.3 -59,187 -55,982
(in €000) 2011 2010
DETAIL OF PERSONNEL COSTS
Salaries and direct social benefits 42,552 39,840
Employer contributions for social insurances 11,597 11,339
Employer's premiums for extra-legal insurances 2,711 2,446
Other personnel costs 2,216 2,271
Pensions 110 86
TOTAL 59,187 55,982
The personnel costs amounted to €59,187 k in 2011 and
€55,982 k in 2010. The personnel costs include: remuneration
and direct social benefits, employer contributions for social
insurances, employer premiums for extra-legal insurances,
other personnel costs and early-retirement payments.
During financial year 2011, an average of 845.8 FTEs were
employed; 715.4 were full-time and 172.2 were part-time.
A total of 1,384,725 hours were worked.
During financial year 2010, an average of 827.3 FTEs were
employed; 698.5 were full-time and 169.8 were part-time.
A total of 1,374,124 hours were worked.
On closing date of the financial year 2011, the group had
725 full-time employees and 167 part-time employees for a
total of 851.8 FTEs; at 31 December 2010, the group had
704 full-time employees and 178 part-time employees, for a
total of 837.9 FTEs. All of the members of personnel have
a white-collar contract.

EXPLANATION 6.4 WRITE-OFFS, AMORTISATIONS AND SPECIAL DEVALUATIONS
(in €000) Explanation 2011 2010
Write-offs, amortisations and special devaluations 6.4 -344 -212
Inasmuch as the group does not recognise any tangible
fixed assets on the balance statement, that item applies
solely to amortisations and devaluations. More specifically,
it concerns changes to provisions, defined pension schemes
and early-retirement pensions and changes in devaluations
and losses on receivables.
EXPLANATION 6.5 OTHER CHARGES
(in €000) Explanation 2011 2010
Other charges 6.5 -4,074 -3,394
The other charges amounted to €4,074 k in 2011 and
€3,394 k in 2010. They related primarily to business taxes:
non-deductible VAT, property tax, regional taxes and other
fiscal costs. Primarily the property tax was higher in
comparison with 2010.
EXPLANATION 6.6 COSTS OF FINANCING
(in €000) Explanation 2011 2010
Costs of financing 6.6 -79,323 -62,302
(in €000) 2011 2010
Interest on credits and other financing costs 66,632 59,307
Financing costs related to financial lease agreements 175 197
Changes to market value of hedge structures to P&L 12,516 2,798
TOTAL FINANCING COSTS 79,323 62,302
The financing burdens relate primarily to the costs for
interest-bearing loans, long and short term, and changes in
the market value of the hedging structures (see, also,
explanations 5.8 and 5.13).
Consolidated financial statement
69

70
Consolidated financial statement 2011
EXPLANATION 6.7 FINANCING INCOME
(in €000) Explanation 2011 2010
Financing income 6.7 2,237 846
The financing income amounted to €2,237 k in 2011 and
€846 k in 2010.
This primarily concerns the income from interest
management, interest from investments and arrears interest
received. A strong increase was shown in the income from
interest management.
EXPLANATION 6.8 INCOME TAX
Current tax receivables and liabilities for the current and
previous periods are valued at the amount that is expected
to be received from or paid to the tax authorities in Belgium
or elsewhere.
In view of the specific provisions of the management
agreement, the group does not have any temporary
differences in assets or liabilities that could give cause to
establish a deferred tax debt or receivable.
Article 43.1 of the same management agreement states
that all of the reasonable costs incurred by Aquafin are to
be paid by the Flemish Region – via the drinking water
companies – including all levies and taxes owed by Aquafin
for the implementation of this agreement.
(in €000) 2011 2010
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Current taxes 1,980 1,150
Changes to taxes from previous years -240
Taxes on profit as per consolidated profit and loss statement 1,980 910
Relationship between actual tax burden and theoretical tax burden:
Profit before taxes from ongoing business activities 9,132 7,960
Unrealised results 0 0
Projects in progress on behalf of third parties: % of completion 1,552 -369
Charge-through of taxes in the context of the concession agreement 876 397
PROFIT BEFORE TAXES 11,560 7,987
At the legal rate applicable in Belgium (34%) 3,929 2,715
Adjustments to taxes on profit from previous years -240
Non-deductible costs 673 586
Deduction for risk capital -2,512 -2,151
Investment deduction -110
At the effective applicable rate 1,980 910
TAXES ON PROFIT AS PER CONSOLIDATED PROFIT AND LOSS STATEMENT 1,980 910

The conversion to IFRS has a temporarily impact on the
results of the projects on behalf of third parties (commercial
projects in progress). Up until 2010, those ‘commercial’
projects were still being processed under BE GAAP in
accordance with the completed contract method. As from
2011, the percentage of completion method is also applied
under BE GAAP. As the corporation tax is calculated based on
accounting in accordance with BE GAAP, there is also
temporary difference in tax base.
As from fiscal year 2012, there will be no longer difference
in results of these projects under BE GAAP and IFRS.
In the context of the concession agreement with the
Flemish Region, €876 k and €397 k, respectively, was charged
to the drinking water companies/the Flemish Region in 2011
and 2010.
(in €000)
'COMMERCIAL’ RESULT BE GAAP
Opening balance sheet
2010
2011 1,552
TOTAL 1,552
'COMMERCIAL' RESULT IFRS
Opening balance sheet 1,183
2010 369
2011
TOTAL 1,552
EXPLANATION 6.9 RESULT PER SHARE
(in €000) Explanation 2011 2010
Profit before taxes from ongoing business activities 9,132 7,960
NET PROFIT 8,028 7,447
To be allocated to:
Owners of equity instruments of the parent company 8,028 7,447
RESULT PER SHARE (€)
Ordinary profit per share, to be allocated to holders of ordinary shares
of the parent company 6.9 9.91 9.31
Diluted profit per share, to be allocated to holders of ordinary shares
of the parent company 6.9 9.91 9.31
PROFIT PER SHARE FROM ONGOING BUSINESS ACTIVITIES (€)
Ordinary profit per share from ongoing business activities, to be allocated
to holders of ordinary shares of the parent company 6.9 9.91 9.31
Diluted profit per share from ongoing business activities, to be allocated
to holders of ordinary shares of the parent company 6.9 9.91 9.31
All of the shares of the group are in the hands of the Vlaamse
Milieuholding (Flemish Environmental Holding Company).
On 2 December 2010, the Vlaamse Milieuholding executed
a full contribution to capital. As a result, the fully-paid up capital
of the group consisted of 800,000 shares at the end of 2010.
On 13 December 2011, in the context of the aforementioned
acquisition of assets from the Flemish Environmental Agency,
the capital of the group was increased by €50 million,
represented by 201,613 shares. Of that amount, €12.5 million
was deposited.
Consolidated financial statement
71

72
Consolidated financial statement 2011
Calculated on a daily basis, the weighted average of
the number of shares over 2011 amounted to: 810,495 shares.
After all:
• 800,000 shares x 346 days = 276,800,000
• 1,001,613 shares x 19 days = 19,030,647
• Total: 295,830,647
295,830,647 : 365 days = 810,494 shares (weighted
average)
n
Dividend per share
On 3 May 2011, a total dividend of €6,723,734 was paid out
over financial year 2010, equivalent to:
• €10.93 for shares fully paid in on 25 April 1990
• €8.40 for shares that have not been fully paid in during
the financial year.
If the General Meeting of 17 April 2012 approves the
proposed allocation of profits for 2011, then the following
gross dividend will be paid out on 23 April 2012:
• €10.09 for shares that have been fully paid in
• €0.12 for shares that have not been fully paid in.
Explanation to the consolidate cash flow overview
EXPLANATION 7.1 EXPLANATION TO THE CONSOLIDATE CASH FLOW OVERVIEW -
RECEIVABLES FROM CLIENTS
(in €000) 2011 2010
Clients Management Agreement 355,883 332,224
Of which: Construction activity 125,366 110,178
Services 230,517 222,047
Clients commercial 51,778 32,768
TOTAL 407,661 364,992
As per Article 43 of the management agreement, Aquafin
is entitled to compensation from the Flemish Region to cover
all reasonable costs and, with due regard for the risks taken,
ensuring the minimum acceptable return for the shareholders.
Within that compensation, a distinction can be made between
compensations relating to the construction activities and
compensation with respect to services.
The compensations for construction activities concern the
payment for the wastewater treatment infrastructure.
The repayment period for that infrastructure takes the
expected life of the infrastructure into account. In 2011,
that compensation increased in comparison with 2010 as a
result of the expansion of the patrimony.
The compensation with respect to the services primarily
concerns the invoicing of the operating expenses from the
head office and operations and the interest burdens, increased
by a compensation for equity. The expansion of the patrimony
has an impact on the operating costs and the interest burdens.
As a result, we also see an increase in the receivables from
services in the context of the management agreement.
Due to the growth in the commercial activities, the client
receipts are also increasing in that segment.

Segment reporting
For management purposes, the group is organised in two
operational segments.
On the one hand, company activities are being carried out
in the context of the concession agreement (management
agreement) with the Flemish Region (the supramunicipal
sanitation). On the other hand, commercial activities are
carried out primarily on behalf of Flemish cities and
municipalities (the municipal sanitation). In the second
segment, the group is in direct competition with other
sewerage managers. Via the subsidiary Aquaplus NV, the group
also serves industry in Flanders and carries out consultancy
assignment abroad on a limited scale.
In figures:
Concession agreement Commercial Total
Cities &
(in €000) Flemish Region Municip Other
AT 31/12/2011
Services rendered 232,989 63,883 573 297,445
Profit before taxes from ongoing business activities 7,283 1,847 2 9,132
Assets 2,271,411 23,709 948 2,296,068
Liabilities 2,041,532 15,641 254 2,057,427
AT 31/12/2010
Services rendered 214,215 33,471 270 247,956
Profit before taxes from ongoing business activities 6,079 1,879 2 7,960
Assets 1,859,221 11,152 847 1,871,220
Liabilities 1,639,139 7,089 155 1,646,383
AT 01/01/2010
Assets 1,615,342 10,695 733 1,626,770
Liabilities 1,442,025 7,085 43 1,449,153
Consolidated financial statement
73

74
Consolidated financial statement 2011
Related Party Disclosures
In 2011, the following compensations were paid to managers
in key positions:
n
Executive Director
The total gross compensation that was invoiced over 2011
by Bamboss BVBA, whose Managing Director is the Executive
(Managing) Director of Aquafin, is composed as follows:
• basic compensation: € 384,415.30
• variable portion: € 139,620
• pension entitlement:
Not applicable
• other compensation components: € 1,895.95
n
Management committee
The total gross compensation that was paid to the members
of the Management Committee over 2011, with exception of
the Managing Director, amounts to:
• base salary: € 622,501
• variable portion: € 65,986
• pension entitlement: € 120,471
• other compensation components: € 127,220
He receives no compensation as a director within the Board
of Directors.
Specific explanation required as per the Companies Code
n The average employment by occupational category:
2011 2010
EMPLOYMENT BY CATEGORY
Directors 4.0 4.0
Office personnel 847.8 833.9
The consolidated financial statement for financial year 2011
comprises the following companies:
• Aquafin NV, Dijkstraat 8, 2630 Aartselaar, Belgium
• Aquaplus NV, Ingberthoeveweg 21, 2630 Aartselaar,
Belgium
TOTAL 851.8 837.9
Compensation granted to directors: See above
No advances or loans were provided to directors by the
Group or any of the companies of the Group.

Consolidated financial statement
75

Aquafin develops and implements
effective solutions that provide cleaner
watercourses and sustainable water
(re)use. We respond pro-actively to
expected developments in the water
sector. As a result, and in a close
relationship with our customers,
we bring a customised realisation of
European objectives nearer every day.
Aquafin NV, Dijkstraat 8, B-2630 Aartselaar
Tel. 03 450 45 11 n fax 03 458 30 20 n e-mail: info@aquafin.be n www.aquafin.be
Publisher: Luc Bossyns
Also available in Dutch n Aussi disponible en français