Half-yearly report 2011 - Aquafin

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Half-yearly report 2011 - Aquafin

Green light for clear water

Half-yearly report

2011


Half-yearly report

2011


4

Half-yearly report 2011

Contents

10

Key figures

5

Declaration of

responsible persons

6

Interim

management

report

11

Operational

activities

13

Summary

of financial

statements

20

Auditor’s report

21

General information


Declaration of responsible

persons

n

n

The undersigned declare that:

The financial summaries that are presented in this report in accordance with the bookkeeping reference system in effect in

Belgium, gives a true picture of the assets, the financial situation and the results of Aquafin.

The interim financial report gives a true picture of the developments, the results and the position of Aquafin, as well as a

description of the primary risks and uncertainties that Aquafin faces.

Aartselaar, 25 August 2011

Luc Bossyns

Managing Director

Marc van den Abeelen

Chairman

Declaration of responsible persons

5


6

Half-yearly report 2011

Interim management report

IMPORTANT EVENTS BETWEEN 1 JANUARY 2011

AND 30 JUNE 2011

n

Company in motion

Aquafin has chosen a customer-intimacy business model

for creating added value for our customers and stakeholders.

The organisation had already been structured on the basis

of four core processes: vision development, accelerated project

execution, network operations, and financing. The control

processes and management processes were also redefined.

To be able to work with a stronger customer focus,

the interaction between the ‘vision’ and ‘accelerated

execution’ processes on the one hand and the ‘account

management’ process on the other hand was increased.

Starting in September 2011, projects will be executed

within four business units that operate geographically.

These are production units that can manage projects from

beginning to end. It is therefore logical that the project leaders

are supported by personnel from Permits, Ground Acquisition,

and Job-site Management. A business-unit manager must

ensure that the turnover targets for each unit are achieved.

The hierarchical management will be done by group leaders

who are responsible for teams of 12 to 15 competent personnel

within the same process. The account management team is

our link with the customers. One team per business unit is

collectively and jointly responsible for customer satisfaction.

n

Confirmation of the credit-worthiness of Aquafin

In June 2011, Aquafin again received an excellent report

from the independent rating service Moody’s. For long-term

credit, Aquafin retains its Triple-A rating. Aquafin has also

been given the highest possible P-1 rating for its commercial

paper programme, by which Aquafin borrows short-term

money from private investors. Thanks to those very positive

ratings, Aquafin is still able to borrow today from the banks at

extremely favourable rates.

n

Continued trust of our financiers

Over the past few years and months, when the financial

markets have been very turbulent, Aquafin’s financing has

never been at risk. Our creditors have always maintained their

confidence in the company. For both short-term and long-term

financing, Aquafin has seen its credit lines extended. In the

aftermath of the banking and financial crisis, the financing

landscape has changed drastically.

In addition to the new issues of government debt in the

Eurozone, Aquafin has also been confronted with the

consequences of the Basel III regulations. Due to their

requirement of strengthening the solvency of the banking

sector, they cause the banks' cost of fund to increase.

Those regulations will make some types of financing more

costly, which will make it necessary for Aquafin to use a broader

range of products to finance its investment programmes.

n

Establishment of rio-link

In 2010, drinking water companies AWW and TMVW

founded Waterlink cvba, a service company that offers

water-related products and services to residential clients,

municipalities and industry. In 2011, Aquafin became a partner

of rio-link, the wastewater treatment section of the company.

The board of directors gave its approval to do so on 8 March.


TMVW, AWW and Aquafin are all active in the municipal

sewer management sector, along with many other players.

The fact that these three large companies from the Flemish

water sector are bundling their expertise and experience is a

major step in the establishment of integrated water

management.

Via rio-link, the expertise that Aquafin has built up over the

years in the Flemish Region can be used on a larger scale and

in more municipalities. Aquafin’s operational experience and

scope of knowledge are among the important added values

that Aquafin brings to rio-link. For its part, Aquafin will be

primarily responsible in rio-link for project management and

the operational projects.

n

First EU fine for Belgium?

With Belgium still not complying with the EU Urban Waste

Water Treatment directive, the country has been sent to the

European Court of Justice for the second time. That could lead

to a lump-sum fine of more than €15 million and a daily

penalty of nearly €62,000 until such time as Belgium complies

with the directive.

In Belgium, environmental matters are a regional

responsibility. None of the three regions is fully compliant

with the directive at the moment. Since the foundation of

Aquafin in 1990, the Flemish Region has eliminated much of

the enormous arrears that Flanders had vis-à-vis the

neighbouring countries. The greatest delays are found in

Wallonia and Brussels. As of today, there are no agreements

concerning the allocation of the aforementioned fine and

penalties among the three regions. Aquafin does not expect

an EU fine for Belgium to have immediate consequences for

the company.

IMPORTANT EVENTS AFTER CLOSING OF

THE PERIOD 1 JANUARY 2011 - 30 JUNE 2011

n

Approval of the financial statements for the financial years

2008 - 2009

On 15 July 2011, the Flemish Government approved the

financial reports of Aquafin NV for the years 2008 and 2009.

Those reports were prepared in accordance with the

stipulations of the management agreement. The decision

implies that only a marginal amount – less than €6,000 –

was found not to be reasonable. The Flemish Government

has also decided to modify the procedure of review so that

the reasonableness of the costs can be assessed on an

objective basis.

n

Further sale of VMM assets

In 1994, under the terms of the management agreement

between the Flemish Region and Aquafin, the company

acquired the user rights for the installations that had already

been established before the company had become active.

Only investments for renovation and expansion of installations

financed by Aquafin are carried under tangible fixed assets.

It has become clear in the meantime that it is not efficient

to have to have two entities be responsible for this property.

For that reason, the Flemish government decided to allow

Aquafin to purchase the installations and the associated

property that are owned by the Flemish Environment

Company (VMM).

To make the financing of the purchase possible, the

management agreement and the assignment agreement were

expanded by addendum no. 7 and addendum no. 2, respectively.

The first phase of that purchase took place at the end of 2010

for a purchase amount of €158 million. The execution of

the second phase of addendum 7 was approved by the Flemish

Region on 15 July 2011 and has a value of €200 million.

Interim management Aquafin report kort

7


8

Half-yearly report 2011

OVERVIEW OF THE MOST IMPORTANT

TRANSACTIONS WITH THE AFFILIATED PARTIES

In the period 1 January 2011 - 30 June 2011, no transactions

took place with affiliated parties that would have material

consequences for the financial position or results of Aquafin.

PRIMARY RISKS AND UNCERTAINTIES FOR THE

REMAINING MONTHS OF THE FINANCIAL YEAR

No material modifications were made to the ongoing legal

disputes and insurance matters. There are no new disputes

with a major financial impact known.

PROSPECTS FOR THE FINANCIAL YEAR

n

Deliveries and contracts

On an annual basis, we expect that the target delivery

budget (€158 million) and the contract budget (€160 million)

will be achieved. Most of the deliveries will be made in the

second half of 2011.

n

Effluent results

On the basis of the results of the first half of 2011, we expect

that the excellent effluent results from the past few years will

be achieved again.

n

Profit forecast

Due to a change in the valuation regulations with respect

to commercial projects with a duration of greater than 1 year,

we expect to achieve a higher bookkeeping profit in 2011 than

we did last year. Concretely, the valuation regulations under

Belgian accounting law were brought into line with the IFRS

standard “IAS 11 Accounting for Construction Contracts”.

Under that standard, only the “percentage of completion”

method is permitted, which means that the projects must be

included in results on the basis of how much has been

completed. Under the previous valuation regulations, the

'completed contract' method was used, by which projects were

included fully in the results at the moment of their delivery.

As a result of this change, a one-time profit of

approximately €1.5 million was posted in the first half

of 2011. That is the result of undelivered commercial projects

as of 31 December 2010.

Just like last year, the forecast contractual compensation

for 2011 amounts to 3.5% of the company resources used over

the financial year.

n Meeting the financial needs for 2011

The financing needs for 2011 amount to €400 million in

order to finance the investment program and to implement

addendum 7. To meet the normal financing needs, Aquafin has

obtained financing from the banks, and €150 million in

bilateral lines has been set aside, €75 million of which is with

the European Investment Bank and the same amount with the

commercial banks. To finance addendum 7, in the short-term

a commercial paper was issued for phase 1 in 2010. In 2011,

a long-term financing package is being worked out for phases 1

and 2. Aquafin consulted the banks to develop proposals, with

due regard for the possibilities of the market for specific

products. Aquafin is planning to borrow €250 million in the

autumn. Within the existing commercial paper programme

and the bilateral credit lines, there is more than enough room

that we can still call on.


n

Capital increase

As part of the second phase of the purchase of the VMM

assets, it is expected that Aquafin's shareholder, the Flemish

Environmental Holding Company, will execute a capital

increase of €50 million before the end of the year.

n

Launch of new loan application with EIB

An application has been submitted to the European

Investment Bank (EIB) to work out a new framework

agreement. The negotiations for that new loan will begin in

the autumn with the intention of being able to use it starting

in 2012. 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 over that entire period.

Interim management report

9


10

Half-yearly report 2011

Key figures

KEY FIGURES

(amounts in '000 EUR) 30-06-2011 31-12-2010

Operating income 211,140 362,540

Profit to be appropriated 5,233 7,084

Balance total 2,738,011 2,671,015

Equity 221,794 216,561

Financing short term 184,900 140,600

Financing long term 1,362,346 1,355,481

On 30 June 2011, Aquafin was responsible

for the operation of 251 wastewater treatment

plants. To transport the wastewater to the

treatment plants, Aquafin manages 4,808 km

of sewer pipes and 1,170 supra-municipal

pumping stations and storage basins.

Employees Aquafin 884 882

Employees VMM 88 89

Employees total 972 971

PORTFOLIO (supra-municipal)

number

mio EUR

Completed projects (1) 2,182 2,857.87

Granted and tendered (2) 320 401.38

Design (3) 987 1,035.69

Total in execution (2) + (3) 1,307 1,437.07


Operational activities

EXPANSION AND MANAGEMENT OF

THE TREATMENT INFRASTRUCTURE

n

Deliveries and contracts

Twenty-eight investment projects, with a combined value

of €40 million, were delivered in the first half of 2011. On an

annual basis, we expect that the delivery budget of €158 million

will be achieved. Most of the deliveries will be made in the

second half of 2011.

In the first half of 2011, Aquafin contracted projects worth

€50 million. On an annual basis, we expect that the delivery

budget of €160 million will be achieved.

n

Last ERSA project completed

At the end of June 2011, the Elsemheide pumping station in

Beersel was started up. That is the last project to be carried out

for Flanders to comply with the first part of the European

Directive on Municipal Waste Water – the treatment of all

urban areas with the equivalent of more than 10,000 residents.

The second part of the Directive states that the wastewater

of the urban areas with between 2,000 and 10,000 residents

must be treated. The last treatment plant on the list of

the so-called ERSA-P bis projects will be completed this year.

The last transport project will end in 2012.

n

Effluent results

The effluent results in the first half of 2011 are in line with

those of previous years, with excellent results having been

repeatedly achieved. We expect the confirmation of that

forecast by the end of 2011.

FINANCING

n

Confirmation of credit-worthiness of Aquafin

In June 2011, Aquafin’s high creditworthiness was again

confirmed by Moody’s, the independent credit rating agency.

Thanks to those very positive ratings, Aquafin is still able to

borrow today from the banks at extremely favourable rates.

n

Interest management - policy change

Under the existing policy, there was no possibility of keeping

part of the debt variable. As a result, it was not possible to

respond to possible opportunities with a loan being kept liquid

during the first years. The Board of Directors has decided to

provide for such a possibility in the hedging policy.

In the first half of 2011, new structures were set up with an

eye on meeting future financing needs. Existing strategies

were also optimised.

n

Commercial paper documentation - update

Aquafin has had a commercial paper programme since

2000. The issue of this debt paper with professional investors

is done on the basis of standard documentation, which

determines the modalities. On the one hand, it was necessary

to update the documentation because the legal provisions

had become obsolete. On the other hand, redefining the

modalities makes it possible for Aquafin to work out alternate

financing quickly. That can be done in part by setting up

the documentation to make it possible to issue longer-term

debt paper.

Operational activities

11


12

Half-yearly report 2011

COMMERCIAL ACTIVITIES

In addition to the activities under the management

agreement with the Flemish Region, Aquafin also provides

services to the municipalities. Aquafin is one of several players

in the municipal wastewater treatment sector and has earned its

place in that market over the years. The growth that was seen

over the past few years was confirmed in 2011. The commercial

activities contribute to the profit of Aquafin, but those

municipal projects remain limited in terms of turnover.

The board of directors gave its approval to do so on 8 March.

Via rio-link, the expertise that Aquafin has built up over the

years in the Flemish Region can be used on a larger scale and

in more municipalities.

n

Establishment of rio-link

In 2010, drinking water companies AWW and TMVW

founded water-link cvba, a service company that offers

water-related products and services to residential clients,

municipalities and industry. In 2011, Aquafin became a partner

of rio-link, the wastewater treatment section of the company.


Summary of financial

statements

BASIS FOR THE PRESENTATION OF

THE FINANCIAL STATEMENTS

The accounting is done and the annual accounts prepared

in accordance with the Belgian generally accepted accounting

principles (Belgian GAAP) and the applicable legal directives,

especially the Act of 17 July 1975 concerning company

accounting, the Royal Decree of 30 January 2001 to implement

the Companies Code, and the Royal Decree of 12 September

1983 to implement the Act of 17 July 1975 concerning company

accounting. Those legal regulations were applied consistently

over the closed periods.

Aquafin has been exempted from preparing a consolidated

annual account because the company is a subsidiary of

a parent company (the Flemish Environmental Holding

Company (Vlaamse Milieuholding NV), which prepares and

publishes a consolidated annual account in which the annual

account of Aquafin is included.

Starting with the year closing on 31 December 2011, Aquafin

will report in accordance with the applicable IFSR standards.

A working group was established early in 2010 to manage

the implementation of IFRS.

The installations remain the property of Aquafin, until the

termination of the management contract with the Flemish

Region.

The increase of the contract level over the past few years

has been reflected in the substantial increase in the works in

progress by 31% to €330 million.

Included in the financial fixed assets is the majority

participation of Aquafin in Aquaplus, amounting to 0.663

million euros.

The performances outside the scope of the management

contract that have not yet been completed are included in

the category ‘orders in progress’. The only exceptions here are

the projects for providing transport services. Inasmuch as

those assets remain the property of Aquafin, they are included

under material fixed assets.

On 2 December 2010, the Vlaamse Milieuholding (Flemish

Environmental Holding Company) made a full contribution to

capital to the amount of nearly €49 million. That contribution

to capital is in the context of the financing of phase 1 of

the purchase of the VMM installations by Aquafin.

EXPLANATION OF THE BALANCE AND

RESULTS ACCOUNT

n

Comments with regard to the balance sheet

On 30 June 2011, the balance total amounted to €2,738

million, which was €67 million higher than it was the previous

year. This increase is due to a net growth of investments in the

water treatment infrastructure, which have been carried out

on behalf of the Flemish Region.

Summary of financial Aquafin statements kort

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14

Half-yearly report 2011

In implementation of the management agreement with

the Flemish Region, the investments 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. With the approval of the Accounting Standards

Committee, this positive balance was booked to a special

passive bank account, namely ‘repayment to the Flemish

Region’. The amount of €799 million relates to all projects that

were delivered up to the end of the period.

At the end of 2008, the term of the annual compensation

for architecture undertakings was changed from 15 to 30 years

for the deliveries scheduled for after 1 January 2009. That was

done by means of an addendum to the management

agreement between the Flemish Region and Aquafin. This new

period conforms more closely with the economic lifespan of

the infrastructure. In 2009, the remaining repayment term for

construction projects delivered prior to 1 January 2009 was

also doubled. That change took effect on 1 January 2010.

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. Including all long-term

loans – under affectation, with a general or commercial

purpose – and the repayments of loans taken out previously,

the balance of the long-term bank accounts was €1,362 million,

including the part that must be repaid within the year.

Aquafin took out €75 million of long-term credits with

the European Investment Bank in the first half of 2011.

The short-term loans increased from €140.6 million at

the end of 2010 to €184.9 million at the end of June 2011.

Within the €400 million commercial-paper programme,

€180.3 million was taken up. Only €4.6 million was used of the

existing credit lines of €222 million, including the syndicated

loans and the municipal credit lines.

In comparison to 2010, the provisions for risks and charges

were down slightly. The necessary adjustments were made on

the basis of the latest data. The provision for risks and charges

relates to legal disputes, insurance dossiers, disputes in the

context of the execution of the management agreement,

processing of the sludge buffered in the plants and early

retirement provisions.


BALANCE SHEET

ASSETS (in '000 EUR) Codes 30-06-2011 31-12-2010

FIXED ASSETS 20/28 2,637,759 2,609,878

Tangible Assets 22/27 2,636,993 2,609,105

Land and buildings 22 113,672 124,055

Plant, machinery and equipment 23 2,189,077 2,228,707

Furniture and vehicles 24 1,919 2,435

Leasing and other similar rights 25 1,041 1,151

Other tangible assets 26 1,558 1,489

Assets under construction and advance payments 27 329,725 251,269

Financial fixed assets 28 766 773

Affiliated enterprises 280/1 663 692

Participating interests 280 663 692

Other financial assets 284/8 103 81

Shares 284 100 78

Amounts receivable and cash guarantees 285/8 3 2

CURRENT ASSETS 29/58 100,252 61,137

Stocks and contracts in progress 3 68,864 44,253

Contracts in progress 37 68,864 44,253

Amounts receivable within one year 40/41 19,769 9,313

Trade debtors 40 13,679 5,152

Other amounts receivable 41 6,091 4,160

Current investments 50/53 2,600

Other investments and deposits 51/53 2,600

Cash at bank and in hand 54/58 5,147 1,154

Deferrred charges and accrued income 490/1 6,472 3,817

TOTAL ASSETS 20/58 2,738,011 2,671,015

Summary of financial Aquafin statements kort

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16

Half-yearly report 2011

BALANCE SHEET

EQUITY AND LIABILITIES (in '000 EUR) Codes 30-06-2011 31-12-2010

EQUITY 10/15 1,020,960 1,024,918

Capital 10 198,400 198,400

Issued capital 100 198,400 198,400

Uncalled capital 101

Reserves 13 18,156 18,156

Legal reserve 130 10,556 10,556

Available reserves 133 7,600 7,600

Accumulated profits 14 5,238 5

Investment grants 15 799,166 808,357

PROVISIONS AND DEFERRED TAXATION 16 2,204 2,402

Provisions for liabilities and charges 160/5 2,204 2,402

Pensions and similar obligations 160 263 263

Other liabilities and charges 163/5 1,941 2,139

AMOUNTS PAYABLE 17/49 1,714,846 1,643,695

Amounts payable after more than one year 17 1,224,321 1,217,528

Financial debts 170/4 1,224,174 1,217,408

Leasing and other similar obligations 172 1,965 2,122

Credit institutions 173 1,222,209 1,215,286

Other amounts payable 178/9 146 120

Amounts payable within one year 42/48 471,119 412,568

Current portion of amounts payable after more than one year 42 140,463 140,433

Financial debts 43 186,792 142,198

Credit institutions 430/8 186,792 142,198

Trade debts 44 76,827 72,093

Suppliers 440/4 76,827 72,093

Advances received on contracts in progress 46 58,862 42,205

Taxes, remuneration and social security 45 8,162 8,902

Taxes 450/3 2,481 1,691

Remuneration and social security 454/9 5,681 7,211

Other amounts payable 47/48 13 6,737

Deferred charges and accrued income 492/3 19,407 13,599

TOTAL LIABILITIES 10/49 2,738,011 2,671,015


n

Commentary on the profit-and-loss statement

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

share of the company’s equity. From this, it follows that the

costs and profits are reflections of each other to a large extent.

The increase in costs, and in particular those of the

commercial goods, raw and auxiliary materials, services and

miscellaneous goods, salaries, social charges and pensions,

are in line with the growth of the infrastructure that is being

operated by Aquafin.

The relatively favourable short-term and long-term market

interest rates have a major impact on the cost of debt.

Through active management of the interest risk, Aquafin aims

to optimise the financing costs. By converting part of the debt

from fixed to variable interest rates, advantage can be taken of

the current level of interest rates, while a mechanism is set up

to protect against the risk of rising interest rates.

After booking the provisions, the value depreciation, the costs

not passed on to the Flemish Region and the revenues, and

including the results of the commercial activities, profits

before taxes amount to €6.61 million.

The ever-growing property portfolio also explains the

continuous growth of the write-offs. As of 2006, investments

will be written off on a pro rata basis.

The changes to the valuation regulations with respect to

commercial projects with a duration of more than one year

(see above) has a major impact on the accounting results for

the first half of 2011. As a result of this change, a one-time

profit of approximately €1.5 million was posted in the first half

of 2011. That is the result of undelivered commercial projects

as of 31 December 2010.

The fluctuations in the depreciations and provisions relates

to depreciations and provisions for amounts that the Flemish

Region has disputed during the closed period.

Summary of financial Aquafin statements kort

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18

Half-yearly report 2011

PROFIT AND LOSS ACCOUNT (in '000 EUR)

Codes 30-06-2011 30-06-2010

Operating income 70/74 211,140 174,009

Turnover 70 182,158 161,066

Decrease in stocks of finished goods, work and contracts in progress 71 24,610 10,316

Own construction capitalised 72

Other operating income 74 4,373 2,627

Operating charges 60/64 174,269 141,314

Raw materials, consumables and goods for resale 60 50,435 38,955

Purchases 600/8 50,435 38,955

Services and other goods 61 29,344 17,648

Remuneration, social security costs and pensions 62 29,033 27,788

Depreciation of and other amounts written off formation expenses,

intangible and tangible fixed assets 630 63,029 54,357

Amounts written down stocks, contracts in progress and trade debtors

- Appropriations (write-backs) 631/4 195 84

Provisions for risks and charges - Appropriaton (uses and write-backs) 635/7 -198 -30

Other operating charges 640/8 2,432 2,510

Operating profit 9901 36,872 32,695

Financial income 75 821 400

Income from current assets 751 811 385

Other financial income 752/9 10 16

Financial charges 65 31,084 29,265

Debt charges 650 30,554 28,669

Other financial charges 652/9 530 596

Profit on ordinary activities before taxes 9902 6,609 3,831

Extraordinary income 76

Write-back of amounts written down financial fixed assets 761

Extraordinary charges 66 29

Amounts written down financial fixed assets 661 29

Profit for the period before taxes 9903 6,580 3,831

Income taxes 67/77 1,347 566

Income taxes 670/3 1,347 566

Adjustment of income taxes and write-back of tax provisions 77

Profit for the period 9904 5,233 3,264

PROFIT FOR THE PERIOD AVAILABLE FOR APPROPRIATION 9905 5,233 3,264


PROFIT PER SHARE (in EUR)

30-06-2011 30-06-2010

Profit after taxes 5,232,763 3,264,434

Profit per share 75.27% paid 4.08

Profit per share 100% fully paid 6.54 5.42

CASH FLOW TABLE (in '000 EUR)

30-06-2011 30-06-2010

Profit after taxes 5,233 3,264

Capital payment 0 0

Non-cash charges 63,025 54,412

Extended cash flow 68,258 57,676

Investments in fixed assets -90,909 -98,889

Paid-up capital and issue premiums 0 0

Remunerations Flemish Region -9,190 -1,551

Amounts payable after more than one year 6,793 -17,754

Current assets -39,309 31,320

Amounts payable within one year 64,358 29,198

Appropriation and sources -68,258 -57,676

Summary of financial Aquafin statements kort

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Half-yearly report 2011

Auditor’s report

REPORT OF THE AUDITOR OF AQUAFIN NV

ON THE LIMITED REVIEW OF THE INTERIM

SUMMARY FINANCIAL STATEMENTS FOR

THE PERIOD CLOSED ON 30 JUNE 2011

n

Introduction

We have reviewed the attached interim summary balance

of Aquafin NV (the ‘Company’) as at 30 June 2011, as well as the

associated interim summary results account for the half-year

closed on that date, and the explanations. The management is

responsible for the preparation and presentation of these

interim summary financial statements prepared in accordance

with the accounting reference system in force in Belgium.

Our responsibility consists of reporting on those interim

summary financial statements on the basis of our limited

review.

n

Scope of our review

n

Conclusion

On the basis of our limited review, there is nothing to

indicate that the enclosed interim summary financial

statements were not prepared in all respects in accordance

with the accounting reference system in force in Belgium.

Antwerp, 25 August 2011

Ernst & Young Bedrijfsrevisoren BCVBA

Statutory Auditor

Represented by

Ronald Van den Ecker

Partner

We have carried out our limited review in accordance with

the recommendations of the Institute of External Auditors

(Instituut van de Bedrijfsrevisoren) concerning assignments

of limited review. A limited review of interim financial

information consists of obtaining information, primarily from

people responsible for financial and accounting matters and

the conduct of analytical and other activities. A limited review

is substantially less comprehensive than an audit carried out

in accordance with the control standards of the Institute of

External Auditors. As a result, a limited review does not

guarantee that we would learn of all of the important

elements that would come to light during a complete audit.

We therefore refrain from issuing an audit opinion.


General information

On 25 April 1990, Aquafin was established as a limited liability company under Belgian law (N.V.) for an indefinite period.

Aquafin’s registered offices are at Dijkstraat 8, BE-2630 Aartselaar (telephone: +32 3 450 45 11). The company’s corporate number

is 0440.691.388.

The direct reason for the establishment of Aquafin was the European Directive “Urban Waste Water" (91/271), which required

the Member States to collect and treat all residential wastewater by the end of 2005. As a result of that directive, the Flemish

Region began investing substantially in water treatment starting in 1990 and, in 1990, established Aquafin NV with the

assignment of the accelerated implementation and operation of the aforementioned sewer-water treatment infrastructure.

Since 22 December 2000, the European Water Framework Directive is also in effect; it aims at achieving good quality for the

ground water and the surface water, into which the treated sewer water is discharged.

The core activity is the expansion, financing and management of the treatment infrastructure for the Flemish Region.

In addition, Aquafin provides services outside the scope of the management agreement with the Flemish Region; for the

expansion and management of the municipal system.

The authorised share capital of Aquafin is €198,400,000, represented by 800,000 shares, all of which are fully paid-up.

The Flemish Environmental Holding Company (Vlaamse Milieuholding NV), Oude Graanmarket 63, BE-1000 Brussels, holds 100%

of the shares. The shares of Aquafin are not traded on a regulated market.

Aquafin has one subsidiary, Aquaplus, which concentrates on consultancy assignments abroad and on industry in Flanders.

The External Auditors of Aquafin are Ernst & Young Bedrijfsrevisoren BV o.v.v.e. CVBA, with registered offices at De Kleetlaan 2,

BE-1831 Diegem, represented by Mr Ronald Van den Ecker for the execution of their assignments. Ernst & Young Bedrijfsrevisoren BV

o.v.v.e. CVBA is a member of the Institute of External Auditors.

You can find the articles of association of Aquafin, along with additional information, at www.aquafin.be.

General information

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Half-yearly report 2011

AQUAFIN NV

Credits

Responsible Publisher: Luc Bossyns, Managing Director of Aquafin NV

Graphic design: Altera

Photography: fotovdb.com, Jan Locus, Misjel Decleer and employees of Aquafin NV

The half-year report for 2011 is also available in Dutch.


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. + 32 3 450 45 11 n fax + 32 3 458 30 20

e-mail: info@aquafin.be n www.aquafin.be

Publisher: Luc Bossyns

Also available in Dutch

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