Fortis Investments - BNP Paribas Investment Partners

Fortis InvestmentsFortis Funds (Nederland) N.V.(Previously ABN AMRO Investment Management Funds B.V.)Annual Report I 200829 April 2009For Professional Investors

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008ContentsReport of the Board of Directors 3FINANCIAL STATEMENTSBalance sheet 7Income statement 8Statement of changes in equity 9Cash flow statement 10Notes to the Financial Statements1. Corporate information 112. Summary of significant accounting policies 113. Financial risk management objectives and policies 174. Critical accounting estimates and judgements 185. Business combinations under common control 186. Trade and other receivables 197. Cash and cash equivalents 198. Share capital and share premium 209. Retained earnings 2110. Trade and other payables 2111. Management and other fees 2112. Distribution, sales and advisory costs 2113. Administrative expenses 2114. Finance income and costs 2215. Income tax expenses 2216. Earnings per share 2217. Dividends per share 2318. Contingencies 2319. Commitments 2320. Related-party transactions 2321. Employees 2522. Declaration of liability 2523. Events after the balance sheet date 2524. Compliance 261

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008OTHER INFORMATIONAuditors’ report 27Stipulations of the articles of association with respect to profit appropriation 29Proposed profit appropriation 29Organisation 30List of investment funds managed in 2007 31For more information 322

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Report of the Board of DirectorsGeneralFortis Investments is the autonomous global asset management arm of the Fortis Group. FortisFunds (Nederland) N.V. (the Company) (previously ABN AMRO Investment Management FundsB.V.), wholly owned by Fortis Investment NL Holding N.V., is part of Fortis Investments. TheCompany acts, amongst others, as director for other companies and operates as managementcompany for investment institutions and investment funds.Corporate developmentsOn 1 April 2008, Fortis Investments and ABN AMRO Asset Management combined to form a top-tierasset management company which initiated a number of integration activities.On 1 November 2008, ownership over ABN AMRO Investment Management Funds B.V. changedfrom ABN AMRO Asset Management (Netherlands) B.V. to Fortis Investment NL Holding N.V.followed by ABN AMRO Investment Management Funds B.V. acquiring the entire assets of FortisFunds (Nederland) N.V. (hereafter the amalgamated company) under universal title in which theacquired company ceased to exist. Subsequently the name ABN AMRO Investment ManagementFunds B.V. has been changed to Fortis Funds (Nederland) and the legal form changed from a privatelimited company to a public limited liability company.In the condensed Interim Report we reported on Fortis Investments intended strategic partnershipwith Ping An. As at the end of September 2008, it was announced that this partnership would notpursue.The ownership of Fortis and therefore also indirectly of Fortis Funds (Nederland) N.V. changeddramatically due to the nationalisation in fall 2008. The Belgian and Netherlands Governmentspurchased almost 100% and the Luxembourg government almost 50% of the shares in the Fortisbank entity in their country.Early March 2009, the Belgium Government, Fortis Holding and BNP Paribas came to a newagreement in which BNP Paribas would become the future majority shareholder of Fortis Bank. Thiswill indirectly affect control over Fortis Investments and may lead to integration activities with BNPParibas’ asset management arm. The agreement is subject to a positive vote of Fortis shareholders.The Ordinary Meeting of the Shareholders will take place on 28 April 2009 (Fortis S.A./ N.V.) and theAnnual General Meeting of Shareholders on 29 April 2009 (Fortis N.V.). The Board of Directors ofFortis Funds (Nederland) N.V. are of the opinion that it is too early to oversee all possibleconsequences for the Company, but believe in its continued operations.Year results 2008The financial data of the amalgamated company is recorded in the Company’s financial statementsas of 1 January 2008. The Company does not restate its comparatives, which explains the mainvariances between reported financial data over the years reported.3

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008The Company’s net profit increased by EUR 9,6 million to EUR 11,6 million compared to the sameperiod in 2007. Income from fees was negatively affected due to significant lower assets undermanagement levels compared to the same period in 2007. Outflows and negative market conditionscontributed to these lower assets under management in conjunction with the mergers of investmentfunds managed by the Company into the in Luxembourg domiciled Fortis L Fund range. See forfurther details the Strategy, products and services section. Distribution, sales and advisory costsfollow the movements in management and other fees.Administrative expenses increased by EUR 5,0 million to EUR 17,4 million, compared to 2007, mainlydue to higher reinvoicing expenses.ComplianceThe Board of Directors paid significant attention to applicable law and regulations, including theFinancial Supervision Act (Wet op het financieel toezicht (Wft)) and the in 2008 published DUFASPrinciples of Fund Governance. The Company’s Board assured that required amendments, wherenecessary, were made in a timely manner, in prospectuses and other public information, internalprocedures, organisation and guidelines, amongst others.Strategy, products and servicesFortis Investments is a top-tier asset management company with a truly global footprint. The broadrange of investment products managed means that our clients can choose the appropriate solution totheir individual needs. Fortis Investments’ core company values are centred around innovation,performance and client focus. Fortis Investments mission is to provide optimal solutions by beingagile, innovative and client-focused.The year started with the introduction of the new ABN AMRO Premium Global Dividend Fund inFebruary 2008. The fund was launched with EUR 430m assets under management.During 2008, the range of funds managed by Fortis Funds (Nederland) N.V. was rationalised. Thefund ranges of former ABN AMRO Asset Management and Fortis Investments were combined toreach synergies and to create a stronger combined fund range.Five ex ABN AMRO investments funds managed by the Company migrated into the Fortis L Fundflagship fund range domiciled in Luxembourg in the summer of 2008. Details are as follows:- The following four Dutch Institutional funds migrated into the Fortis L Fund range at the end ofJune 2008: ABN AMRO Institutional Euro Government Bond Fund, ABN AMRO InstitutionalEuro Bond Fund, ABN AMRO Institutional Euro Credit Fund and the ABN AMRO InstitutionalEuro Long Bond Fund. The institutional investors received institutional shares of Fortis L Fund inexchange for their participations in the Dutch Funds;- ABN AMRO Trans Europe Fund migrated into the new Fortis L Fund Equity Growth Europe atthe end of August 2008. Shareholders of ABN AMRO Trans Europe Fund received 1 share ofFortis L Fund Equity Growth Europe in exchange for 1 share of ABN AMRO Trans Europe Fund.Four other Dutch Institutional funds were closed. This concerned ABN AMRO Institutional GlobalEquity Fund and ABN AMRO Institutional Global Equity Europe Tilted Fund which were closed shortly4

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008before the migration of the institutional funds mentioned above. Due to the size of the assets undermanagement of these funds, it was not efficient to migrate the assets. ABN AMRO Institutional UKPlus Fund and ABN AMRO Institutional Euro Domestic Plus Fund were closed earlier in the year, inMarch 2008. ABN AMRO Global Fund merged with ABN AMRO Global High Income Equity Fund inAugust 2008.The Company’s income from fees was negatively affected by the above mentioned events.In November 2008, the names of most former ABN AMRO investment funds were changed intoFortis.Internal control framework and risk assessment policiesAlthough the Company is not exposed significantly to financial risks from financial instruments,market movements may impact financial results as net income from fees is closely related to theunderlying net asset value of the investment funds while administrative expenses are only up to acertain extend related to movements in net asset value. Furthermore, the performance of theCompany might be affected by a significant loss of clients due to weak performances of ourinvestments funds, changes in strategy by our distribution partners, inability to deliver the productsour clients need, operational errors and negative sentiment in the market in general.The Board of Directors of Fortis Funds (Nederland) N.V. is responsible for the daily business, but thedaily operations are outsourced to other Fortis Investments entities. The Board has designed policies,procedures and structures as well as reporting lines to monitor outsourced activities, to controloperational activities and to identify risks. The internal control framework has been designed toachieve the Company goals by effectively evaluating and monitoring risks. Within this frameworkCompliance department ensures overall compliance with external regulations and applicable law. Thedepartment of Operational Risk Management assures the accuracy of the internal control measuresand administration descriptions.OtherAs a consequence of the integration activities, all the former Board members of ABN AMROInvestment Management Funds stepped down gradually during the year. The undersigned Boardmembers were appointed during the course of 2008. Mr. J.L. Roebroek and Mw. M.P. Maagdenbergwere already directors of the amalgamated company prior to the acquisition by ABN AMROInvestment Management Funds B.V..Amsterdam, 29 April 2009The Board of DirectorsJ.L. Roebroek (Chairman)C.A.M. Haas M.C. Van Beusekom M.P. Maagdenberg5

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008FINANCIAL STATEMENTS6

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Balance sheet 1(x € 1,000)As at 31 DecemberNotes 2008 2007ASSETSCurrent assetsTrade and other receivables 6 13,645 17,174Cash and cash equivalents 7 44,656 13,51758,301 30,691Total assets 58,301 30,691EQUITY AND LIABILITIESEQUITYEquity attributable to the equity holders of the CompanyShare capital 8 225 227Share premium 8 12,102 828Other reserves 8 2 -Retained earnings 9 14,032 4,44926,361 5,504LIABILITIESCurrent liabilitiesTrade and other payables 10 31,940 25,18731,940 25,187Total equity and liabilities 58,301 30,691The notes on pages 11 to 25 are an integral part of these Financial Statements.1 Refer to paragraph 5 Business combinations under common control7

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Income statement 2(x € 1,000)Year ended 31 DecemberNotes 2008 2007Management and other fees 11 158,707 182,068Distribution, sales and advisory costs 12 (127,142) (167,616)Income from fees - net 31,565 14,452Administrative expenses 13 (17,403) (12,371)Operating profit 14,162 2,081Finance income 14 1,397 609Finance income 1,397 609Profit before income tax 15,559 2,690Income tax expenses 15 (3,972) (686)Net profit for the year 11,587 2,004The notes on pages 11 to 25 are an integral part of these Financial Statements.2Refer to paragraph 5 Business combinations under common control8

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Statement of changes in equity(x € 1,000)Attributable to equityholders of the CompanyShare Other Share Retained TotalCapital Reserve Premium Earnings EquityNotesAt 1 January 2008 227 - 828 4,449 5,504Profit for the year 11,587 11,587Dividend 2007 16 (13,925) (13,925)Business combination 11,274 11,921 23,195Conversion NLG to EUR (ex art. 178a (2) 2 -Part 5, Book 2 Dutch Civil code)At 31 December 2008 225 2 12,102 14,032 26,361At 1 January 2007 227 - 828 4,101 5,156Profit for the year 2,004 2,004Dividend 2006 (1,656) (1,656)At 31 December 2007 227 - 828 4,449 5,504The notes on pages 11 to 25 are an integral part of these Financial Statements.9

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Cash flow statement(x € 1,000)Year ended 31 DecemberNotes 2008 2007Operating activitiesProfit before income tax 15,559 2,690Adjustment to reconcile profit before income tax to net cash flowsNon-cash:Business Combination 5 23,195 -Finance income (1,397) (609)Working capital adjustments:Decrease/ increase in trade and other receivables 3,470 709Increase/ decrease in trade and other payables 3,580 2,163Income tax paid (799) (1,178)Net cash flows from/ used in operating activities 43,608 3,775Investing activitiesInterest received 1,456 571Net cash flows from investing activities 1,456 571Financing activitiesProceeds from capital contribution 7 - -Dividends paid to equity holders of the Company 16 (13,925) (1,656)Net cash flows used in financing activities (13,925) (1,656)Net increase/ decrease in cash and cash equivalents 31,139 2,690Cash and cash equivalents at 1 January 6 13,517 10,827Cash and cash equivalents at 31 December 6 44,656 13,517The notes on pages 11 to 25 are an integral part of these Financial Statements.10

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Notes to the Financial Statements1. Corporate information 3Fortis Funds (Nederland) N.V (the Company) is a Public limited liability company domiciled in TheNetherlands and is a wholly-owned subsidiary of Fortis Investment NL Holding N.V. The Companywas incorporated in The Netherlands on 30 December 1966. The organisation chart of the group towhich the Company belongs is as follows:Fortis Investment Management S.A.Fortis Investment NL Holding N.V.Fortis Funds (Nederland) N.VThe Company acts, amongst others, as director for other companies and operates as managementcompany for investment institutions and investment funds. Investment funds offered to Dutch privateclients are registered with the Netherlands Authority for the Financial Markets (AFM). The Companyis subject to supervision of the Netherlands Central Bank (DNB) and the AFM and holds a licenseunder the Financial Supervision Act (Wet op het financieel toezicht (Wft)).On 1 April 2008, Fortis Investments and ABN AMRO Asset Management combined to form a top-tierasset management company which initiated a number of integration activities.On 1 November 2008, ownership over ABN AMRO Investment Management Funds B.V. changedfrom ABN AMRO Asset Management (Netherlands) B.V. to Fortis Investment NL Holding N.V.followed by ABN AMRO Investment Management Funds B.V. acquiring the entire assets of FortisFunds (Nederland) N.V. (hereafter the amalgamated company’). Subsequently the name ABN AMROInvestment Management Funds B.V. has been changed to Fortis Funds (Nederland) N.V. and thelegal form changed from a private limited company to a public limited liability company.These Financial Statements of Fortis Funds (Nederland) N.V. have been authorised for issue by theBoard of Directors on 29 April 2009.2. Summary of significant accounting policiesThe principal accounting policies applied in the preparation of these Financial Statements are set outbelow. These policies have been consistently applied to all the years presented, unless otherwisestated. The Financial Statements are presented in euros, which is also the functional currency of thegroup to which the Company belongs, rounded to the nearest thousand, unless otherwise stated.3 Also see paragraph 5 Business combinations under common control11

Fortis Funds (Nederland) N.V. Annual Report 200831 December 20082.1 Basis of preparationStatement of complianceThe Financial Statements of Fortis Funds (Nederland) N.V. have been prepared in accordance withthe International Financial Reporting Standards (IFRS) as adopted by the European Union (EU).Basis of measurementThe Financial Statements have been prepared under the historical cost convention.The preparation of financial statements in conformity with IFRS requires the use of certain criticalaccounting estimates. It also requires management to exercise its judgement in the process ofapplying the Company’s accounting policies. The areas involving a higher degree of judgement orcomplexity, or areas where assumptions and estimates are significant to the Financial Statements aredisclosed in note 4.Following the current standards and interpretations, IFRS control criteria with regard to consolidationof investment funds are not met. As a result, investment funds are not consolidated. Current IFRSconsiderations indicate that consolidation of investment funds, which do not meet the IFRS controlcriteria, does not appear likely. Nevertheless, the Company will closely monitor the IFRSdevelopments on this subject.Tax statusThe fiscal unity structure of the Company was amended from time to time during the year followingthe developments of Fortis Group and restructuring activities within Fortis Investments. The fiscalunity structure during 2008 was a follows:Up to 1 April 2008, the Company formed a fiscal unity with ABN AMRO Holding N.V. for income taxpurposes and with ABN AMRO Bank N.V. for value added tax.As a consequence of the purchase of ABN AMRO Asset Management by Fortis Investments on 1April 2008, the fiscal unity in place for income tax as well as value added tax ceased to exists per thatdate. As per 1 April 2008, the Company forms a fiscal unity with ABN AMRO Asset ManagementHolding N.V., on 1 July 2008 renamed into Fortis Investment NL Holding N.V. after it purchased theFortis Investment Holding company in The Netherlands, for income tax and for value added tax withFortis Bank Nederland.Up to 30 June 2008, the amalgamated company formed a fiscal unity for income tax with FortisInvestment Management (Netherlands) N.V., Fortis Investment NL Holding N.V. and GroeiVermogenN.V. For value added tax the amalgamated company formed a fiscal unity with Fortis BankNederland.As per 1 July 2008, the Company’s fiscal unity for income tax has been extended with the other FortisInvestment entities in The Netherlands, amongst others, with the amalgamated companyThe fiscal unity for value added tax ceased to exist on 31 December 2008 in consultation with theDutch Tax authorities following the nationalisation of Fortis Bank Nederland and subsequent12

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008departure out of the Fortis Group in fall 2008. As of 1 January 2009, the fiscal unity structure for valueadded tax is similar to the fiscal unity structure for income tax.Corporate income tax is calculated and settled by using a standard rate which is 25.5% for bothreporting years.Amendments to standards(a) New standards, amendments and interpretations applicable for 2008There are no new standards, amendments and interpretations applicable for December 2008 yearendrelevant to the Company’s operations.(b) New standards, amendments and interpretations applicable for 2008, but not relevantThe following new standards, amendments and interpretations are applicable for December 2008year-end, but are not relevant to the Company’s operations:• IFRIC 11, IFRS 2 – Group and Treasury Share Transactions;• IFRIC 12, Service Concession Arrangements;• IFRIC 14, IAS 19 – The limit on a Defined Benefit Asset, Minimum Funding Requirementsand their Interaction;(c) New standards, amendments and interpretations that are not applicable yet and are notrelevant to the CompanyThe following new standards, amendments and interpretations are not required to be applied forDecember 2008 year-end, although they may be applied early:IFRS 2 (Amendment) Share-based Payment – Vesting Conditions and Cancellations (effective forperiods beginning on or after 1 January 2009)This amendment clarifies the definition of vesting conditions, introduces the concept of non-vestingconditions, requires non-vesting conditions to be reflected in grant-date fair value and provides theaccounting treatment for non-vesting conditions and cancellations. Not having any staff, thisamendment is not relevant to the Company.Revised IFRS 3 Business Combinations (effective for period beginning on or after 1 July 2009)IFRS 3 revised introduces a number of changes in the accounting for business combinationsoccurring after this date that will impact the amount of goodwill recognised, the reported results in theperiod that an acquisition occurs, and future reported results. Revised IFRS 3 will be appliedprospectively and therefore there will be no impact on prior period in the Companies FinancialStatements.IFRS 8, Operating Segments (effective for periods beginning on or after 1 January 2009)IFRS 8 replaces IAS 14 Segment Reporting and adopts a full management approach to identifying,measuring and disclosing the results of its operating segments. As neither the Company’s debt orequity instruments are traded in a public market nor the Company files, or is in the process of filing its13

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008financial statements with a security commission or other regulatory organisation for the purpose ofissuing any class of instruments in a public market this interpretation is not relevant to the Company.Revised IAS 1 Presentation of Financial Statements (effective for period beginning on or after 1January 2009)This revised standard introduces the term total comprehensive income, which represents changes inequity during a period other than those changes resulting from transactions with owners in theircapacity as owners. Total comprehensive income may be presented in either a single statement ofcomprehensive income (effectively combining both the income statement and all non-owner changesin equity in a single statement), or in an income statement and a separate statement ofcomprehensive income. The Company is still evaluating whether it will have one or two statements.IAS 23 (Amendment), Borrowing Costs (effective for period beginning on or after 1 January 2009)This amendment requires an entity to capitalise borrowing costs directly attributable to the acquisition,construction or production of a qualifying asset (one that takes a substantial period of time to getready for use or sale) as part of the cost of that asset. The option of immediately expensing thoseborrowing costs will be removed. The Company will apply IAS 23 amendment, but is currently notrelevant as the entity has no qualifying assets.IAS 27 (Amendment) Consolidated and Separate Financial Statements (effective for period beginningon or after 1 July 2009)This amendment requires accounting for changes in ownership interests in a subsidiary, whilemaintaining control, to be recognised as an equity transaction. On loss of control of a subsidiary, anyinterest retained in the former subsidiary will be measured at fair value with the gain or lossrecognised in profit or loss. This interpretation is currently not relevant to the Company because theentity has no subsidiaries.Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of FinancialStatements – Puttable Financial Instruments and Obligations Arising on Liquidation (effective forperiod beginning on or after 1 January 2009)These amendments provide a limited scope exception for puttable instruments to be classified asequity if they fulfill a number of specified features. The amendments to the standards will have noimpact on the financial position or performance of the Company, as the entity has not issued suchinstruments.IAS 39 (Amendment) Financial Instruments: Recognition and Measurement – Eligible Hedged Items(effective for period beginning on or after 1 July 2009)The amendment addresses the designation of a one-sided risk in a hedged item, and the designationof inflation as a hedged risk or portion in particular situations. It clarifies that an entity is permitted todesignate a portion of the fair value changes or cash flow variability of a financial instrument ashedged item. The Company has concluded that the amendment will have no impact on the financialposition or performance of the entity, as the Company has not entered into any such hedges.IFRIC 13, Customer Loyalty Programmes (effective for periods beginning on or after July 2008)14

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008This interpretation clarifies that where good or services are sold together with a customer loyaltyincentive, the arrangement is a multiple-element arrangement and the consideration receivable fromthe customer is allocated between the components of the arrangement in using fair values. Thisinterpretation is not relevant to the Compan, because the entity has no such programmes.IFRIC 15 Agreement for the Construction of Real Estate (effective for period beginning on or after 1January 2009)The interpretation is to be applied retrospectively. It clarifies when and how revenue and relatedexpenses from the sale of a real estate unit should be recognised if an agreement between adeveloper and a buyer is reached before the construction of the real estate is completed.Furthermore, the interpretation provides guidance on how to determine whether an agreement iswithin the scope of IAS 11 or IAS 18. IFRIC 15 will not have an impact on the Financial Statementsbecause the Company does not conduct such activity.IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective for period beginning on orafter 1 October 2008)This interpretation provides guidance in respect of hedges of foreign currency gains and losses on anet investment in a foreign operation. The interpretation is not relevant to the Company, because theentity has no net investment in a foreign entity.2.2 Segment reportingThe Company has availed of the exemption under IAS 14.4 which exempts entities, whose equity ordebt are not publicly traded and are not in the process of issuing equity or debt securities in publicsecurity markets, to disclose segment information.2.3 Cash and cash equivalentsCash comprises cash at banks, cash equivalents are short-term, highly liquid investments that arereadily convertible to known amounts of cash and which are subject to an insignificant risk of changesin value.2.4 Cash flow statementThe cash flow statement, based on the indirect method of calculation, gives details of the source ofcash which became available during the year and the application of these cash over the course of theyear. Profit before income tax has been adjusted for costs and income that did not result in anyexpense or revenues during the reporting year. The dividends paid have been included underfinancing activities.2.5 Share capitalOrdinary shares are classified as equity.2.6 Earnings per shareEarnings per share are calculated by dividing the profit attributable to shareholders of the Companyby the weighted average number of shares in issuance during the year.15

Fortis Funds (Nederland) N.V. Annual Report 200831 December 20082.7 Trade receivables, trade payablesTrade receivables and trade payables are recognised initially at fair value and subsequentlymeasured at amortised cost using the effective interest rate method. A provision for impairment oftrade receivables is established when there is objective evidence that the Company will not be able tocollect all amounts. The provision for impairment is assessed individually.2.8 Employee benefitsThe Company does not employ any staff. The Board of Directors of Fortis Funds (Nederland) N.V. isemployed by Fortis Investment Management Netherlands N.V. Therefore, accounting policies foremployee benefits are not applicable.2.9 Revenue recognitionIncome from fees - netIncome from fees - net comprises the fair value of the service rendered in the ordinary course of theCompany’s activities, net of distribution (which also includes rebates), sales and advisory costs. TheCompany recognises income from fees in the accounting period in which the service is provided, theamount can be reliably measured, it is probable that future economic benefits will flow to or out theentity and specific criteria have been met for each of the Company’s activities as described below.Management fees and other feesManagement and other fees include service fees and performance fees. Management and servicefees are calculated on the Fund’s (average) month-end net asset value using predetermined feepercentages, as disclosed in the Fund prospectuses. Service fees are charged to coveradministrative, custody and other operational costs. Operational cost includes cost of auditors,registration, supervision and external reporting. Performance fees are calculated on the performanceof the Funds and predetermined fee percentages, as disclosed in the Fund prospectuses, and arerecognised when earned.Distribution, sales and advisory costsDistribution cost, (including rebates), sales and advisory cost which are payable to third parties andrelated parties. These costs are recorded when the services have been provided and are primarilybased on, in agreements, predetermined percentages of the (average) management fee related tothe underlying holdings in a Fund.Finance income and costsInterest income and costs are recognised on a time-proportion basis.2.10 CostsCosts are recognised in the period to which they relate.2.11 Income taxesIncome tax, based on the applicable standard rate, is recognised in the period in which the resultarises.16

Fortis Funds (Nederland) N.V. Annual Report 200831 December 20082.12 Dividend distributionDividend distribution to the Company’s shareholder is recognised as a liability in the Company’sFinancial Statements in the period in which the dividends are approved by the Company’sshareholder.2.13 Business combinations under common controlBusiness combinations for involving entities under common control are accounted for using thepooling of interest method (book value accounting).3. Financial risk management objectives and policies3.1 Financial risk factorsThe Company has a limited number of financial instruments. Financial assets relate to tradereceivables, other financial assets and cash and cash equivalents. Financial liabilities relate to tradepayables. Both arise directly from the Company’s operations. The Company does not use derivativefinancial instruments. Corporate policies & procedures are disclosed on the Fortis Investmentsintranet web site assessable for all Fortis investments employees.(a) Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss for the otherparty by failing to discharge an obligation. Trade and other receivables mainly relate to managementand service fees receivable from investment funds for which the Company is the manager.Receivable balances are monitored on an ongoing basis with the result that the Company’s exposureto bad debts is not significant. Furthermore, the Company has no positions which could lead tosignificant concentrations of credit risk. The maximum exposure is the carrying amount as disclosedin note 6. With respect to credit risk related to cash and cash equivalents, the Company’s exposurearises from default of the counterparty, which is ABN AMRO Bank and Fortis Bank in TheNetherlands, with a maximum exposure equal to the carrying amount disclosed in note 7.(b) Market riskMarket risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in market prices. The Company does not have open market positions andtherefore changes in market prices do not have any impact. However, changes in market prices mightimpact financial results due to net income from fees is closely related to the net asset value of theinvestment funds while administrative expenses are only to a certain extend related to movements innet asset value. The Company is not exposed to any material foreign exchange risks. Interest raterisk arising from cash and cash equivalents is considered to be remote.(c) Liquidity riskLiquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated withfinancial liabilities. The Company monitors its risk to a shortage of funds on an ongoing basis. Due tothe nature of its activities management and other fees are generally received prior payment ofdistribution, sales and advisory fees thereby limiting the risk of a shortage of funds.17

Fortis Funds (Nederland) N.V. Annual Report 200831 December 20083.2 Capital risk managementThe Company’s objectives when managing capital are to safeguard the Company’s ability to continueas a going concern in order to provide returns for the shareholder and to assure compliance with thein the Wft mentioned capital requirements. Reference is made to note 24 for details about the capitalrequirements under the Wft. The Company monitors its capital on an ongoing basis. In order tomaintain or adjust the capital structure, the Company may adjust the amount of dividends paid to itsshareholder, return capital to its shareholder, requests its shareholder to make an informal capitalcontribution without the issuance of share or issue new shares.3.3 Fair value estimationThe carrying amounts are assumed to approximate their fair values.4. Critical accounting estimates and judgementsEstimates and underlying assumptions are continually evaluated and are based on historicalexperience and other factors, including expectations of future events that are believed to bereasonable under the circumstances. Revisions to estimates are recognised in the period in which theestimate is revised. The estimates and assumptions that have a significant risk of causing a materialadjustment to the carrying amount of assets and liabilities within the next year are outlined below.Distribution costDistribution and rebate costs regarding third party distributors are accrued for monthly using the latestavailable information on the number of shares distributed. The number of shares is communicated tothe Company normally quarterly in areas and might therefore deviate from the number of shares usedto determine the monthly accrual.5. Business combination under common controlOn the 1 November 2008, ABN AMRO Investment Management Funds B.V. acquired the entireassets of Fortis Funds (Nederland) N.V. under universal title in which the acquired company ceasedto exist. Subsequently the name has been changed to Fortis Funds (Nederland) N.V.The acquisition is defined as a business combination under common control. The financial data of theamalgamated company is recorded in these Financial Statements as if the business combination tookplace on 1 January 2008. Till acquisition date ABN AMRO Investment Management Funds B.V.reported a net profit of EUR 437,000 against EUR 8,785,000 for Fortis Funds (Nederland) N.V. Totalequity of ABN AMRO Investment Management Funds B.V. amounted to EUR 3,393,000 compared toEUR 11,759,000 for Fortis Funds (Nederland) N.V. The Company does not restate its comparatives.18

Fortis Funds (Nederland) N.V. Annual Report 200831 December 20086. Trade and other receivables2008 2007Trade receivables 2,974 1,369Accrued management and other fees 7,064 14,187Receivables from related parties (Note 20) 3,372 1,618Other accrued receivables 235 -13,645 17,174Trade and other receivables are non-interest bearing and mainly relate to invoiced and accruedmanagement and other fees which settle normally monthly.The aging analysis of trade receivables is as follows:TotalNeither pastdue norimpairedPast due but not impaired< 30 days 30 - 60 days 60 - 90 days > 90 daysAt 31 December 2008 2,974 2,052 338 205 379At 31 December 2007 1,369 - 1,226 49 - 94Amounts past due, but not impaired at 31 December 2008 relate to Management Fees for which noindications exist for default.7. Cash and cash equivalents2008 2007Cash at bank 21,531 13,517Cash at bank earns interest at floating rates based on one months average EURIBOR.Cash and cash equivalents include the following for the purposes of the cash flow statement:2008 2007Cash at bank 21,531 13,517Cash equivalents 23,125 -44,656 13,517Cash equivalents relate to investments in the French investment fund, Fortis Tresorerie Jours.19

Fortis Funds (Nederland) N.V. Annual Report 200831 December 20088. Share capital and share premiumNumber of shares Ordinary Share Totalshares premiumx € 1,000 x € 1,000 x € 1,000At 1 January 2008 500 227 828 1,055Business combination 11,274 11,274Coversion capital from NLG to EUR -2 (2)At 31 December 2008 500 225 12,102 12,327At 1 January 2007 500 227 828 1,055At 31 December 2007 500 227 828 1,055Issued and paid up capitalOn 1 November 2008, the Company’s articles of association were amended with regard to sharecapital for the conversion of NLG to EUR ex article 178b Part 5, book 2 of the Dutch Civil Code.Before this amendment NLG amounts were converted into EUR in accordance with article 178c of theDutch Civil Code. After conversion the authorised share capital amounts to EUR 450,000 consistingof 1,000 shares with a face value of EUR 450 each.In accordance with article 178a Part 5, book2 of the Dutch Civil Code a legal reserve is recognised forthe difference between the value of the issued capital by using the official European Union conversionrate and the amended value in the articles of association.At 31 December 2008, 500 shares have been issued and fully paid.Share premiumShare premium increased in 2008 compared to 2007 due to the acquisition of the amalgamatedcompany by the Company on 1 November 2008. The amalgamated company’s issued capital hasbeen reclassified into share premium.Distribution of profitDividends are recognised as a liability in the period in which they are declared.20

Fortis Funds (Nederland) N.V. Annual Report 200831 December 20089. Retained earnings2008 2007At 1 January 4,449 4,101Net profit for the year 11,587 2,004Business combination 11,921Dividends paid (13,925) (1,656)At 31 December 14,032 4,44910. Trade and other payables2008 2007Trade payables 2,418 4,807Accrued distribution fees to third parties 11,247 8,007Payables to related parties (Note 20) 10,912 10,275Other payables to third parties 7,363 2,09831,940 25,187Accrued distribution fees to third parties include rebates. Distribution fees settle normally quarterlyand rebates settle normally monthly.11. Management and other fees2008 2007Management fees 152,445 173,604Service fees / Administration fees 5,070 7,982Performance fees 60 482Other fees 1,132 -158,707 182,06812. Distribution, sales and advisory costs2008 2007Distribution cost 65,977 70,297Rebates 13,218 21,276Sales costs - net 23,201 37,797Advisory costs - net 24,746 38,246127,142 167,61613. Administrative expenses2008 2007Professional fees 1,136 1,275Reinvoicing 13,201 7,624Other expenses 3,066 3,47217,403 12,37121

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Professional fees include legal and fiscal advice cost and audit costs. Activities outsourced to FortisInvestment Management Netherlands N.V. (in which ABN AMRO Asset Management (Netherlands)B.V. merged on 1 December 2008) are documented into service level agreements and are presentedas reinvoicing. Such cost include cost for Product Management, Client Services, Finance, Legal, Tax,Risk Management, Compliance, Dealing and Operations. Other expenses include listing cost andcustody fees.The Company distinguishes audit costs related to the investment funds which are covered by theservice fees or are part of the total expense ratio and audit costs directly related to the Companyitself. The audit costs directly related to the Company amounts to EUR 137 thousand (2007: EUR 87thousand).The audit costs related to the investment funds managed by the Company amounts toEUR 855 thousand (2007: EUR 1,064 thousand).14. Finance income and costs2008 2007Finance income 1444 609Finance costs (47) -Finance income net 1,397 60915. Income tax expenses2008 2007Current tax 3,972 686The tax on the Company’s profit before tax does not differ from the theoretical amount that arisesusing the basic tax rate applicable to the profit. The standard and effective tax rate was 25.5% (2007:25.5%).16. Earnings per share(a) BasicBasic earnings per share are calculated by dividing the profit attributable to equity holders of theCompany by the weighted average number of ordinary shares in issue during the year.2008 2007Profit attributable to equity holders of the Company 11,587 2,004Weighted average number of ordinary shares in issue 500 500Basic earnings per share 23.17 4.01(b) DilutedThe Company has no categories of dilutive potential ordinary shares. As a result, the diluted earningsper share are identical to the basic earnings per share as per the above summary.22

Fortis Funds (Nederland) N.V. Annual Report 200831 December 200817. Dividends per shareThe dividends paid by ABN AMRO Investment Management Funds B.V. in 2008 and 2007 were EUR2,003,838 (EUR 4,007.77 per share) and EUR 1,656,268 (EUR 3,312.54 per share) respectively.Fortis Funds (Nederland) N.V. only paid a dividend of EUR 11.920.874 (EUR 5,251.49 per share) over2008.A dividend in respect of the year ended 31 December 2008 of EUR 23,173.71 per share, amounting toa total dividend of EUR 11,586,853 is to be proposed at the General Meeting of Shareholders. TheseFinancial Statements do not reflect this dividend payable.18. ContingenciesUpon final settlement with the Tax authorities the Company is liable for all the tax liabilities of thefiscal unities (reference is made to the paragraph Basis of preparation – Tax status)19. CommitmentsCapital commitmentsCapital expenditure contracted for at the balance sheet date, but not yet incurred does not exist.Service Level AgreementsThe Company is committed to payments under service level agreements with Fortis InvestmentManagement Netherlands N.V.20. Related-party transactionsThe Company has related-party transactions with its direct shareholder; Fortis Investment NL HoldingN.V., other Fortis Investments related entities and other related-parties i.e. Fortis Group entities notbeing Fortis Investments and its key management.In 2007 the Company had related-party transactions with its direct shareholder; ABN AMRO AssetManagement (Netherlands) B.V., other ABN AMRO Asset Management related entities and otherrelated-parties i.e. ABN AMRO Bank N.V. including its branches, other (non - Asset Management)ABN AMRO entities, Consortium banks and its key management.The following transactions were carried out with related parties:Cash and cash equivalents2008 2007Current accounts (nostro accounts) 21,531 13.51721,531 13.51723

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Distribution, sales and advisory costs, interest and re-invoicing2008 2007Shareholder 3,520 61,428Other Fortis Investments/ ABN AMRO Asset Management entities 54,163 20,545Other related-parties - 50,92657,683 132,899Year-end balances arising from related-parties transactions:Receivables from related-parties:2008 2007Other Fortis Investments/ ABN AMRO Asset Management entities 3,372 1,475Other related-parties - 1433,372 1,618Receivables from related-parties relate to prepayments to third party clients on behalf of other FortisInvestment entities and accrued interest on bank accounts. These receivables are not secured andnon-interest bearing. Prepayments on behalf of other Fortis Investments entities normally settle within30 - 90 days. Interest receivable normally settles quarterly.Payables to related-parties:2008 2007Shareholder 4,922 2,605Other Fortis Investments/ ABN AMRO Asset Management entities 5,990 2,423Other related-parties - 5,24710,912 10,275Payables to related-parties relate to distribution, sales and advisory fees and internal settlement cost.The payables bear no interest. No guarantees are given. Depending on the underlying agreementpayables settle normally within 30 - 90 days.Key management compensationThe Board of Directors have the authority and responsibility for planning, directing and controlling theactivities of the Company and are acknowledged as key management personnel as defined in IAS24.9. Below table includes management compensation only for the period the members wereappointed as a Board member.24

Fortis Funds (Nederland) N.V. Annual Report 200831 December 20082008 2007Salaries and other short-term employee benefits 1,013 1,620Termination benefits 470 -Post-employment benefits 117 144Share-based payments - 4011,600 2,16521. EmployeesThe Company does not employ any staff. The Board of Directors of Fortis Funds (Nederland) N.V. isemployed by Fortis Investment Management Netherlands N.V.and Fortis Investment ManagementBelgium S.A. respectively.22. Declaration of liabilityFortis Investment Management S.A., having its offices at Avenue de l’Astronomie 14, 1210 Brussels,Belgium, declared that it assumes as per 1 January 2008 the joint and several liabilities for the debtsresulting from Legal acts of the Company, such in accordance with Section 2:403, section 1(f) of theDutch Civil Code.The financial data of Fortis Funds (Nederland) N.V. is consolidated in the annual accounts of FortisInvestment Management S.A.The earlier declaration of liability assumed by ABN AMRO Holding N.V. has been withdrawn on 19December 2008.23. Events after the balance sheet dateProposed profit appropriationReference is made to the paragraph ‘Proposed profit appropriation’ page 29 for details about theproposed dividend.BNP Paribas transactionEarly March 2009, the Belgium Government, Fortis Holding and BNP Paribas have come to a newagreement in which BNP Paribas will become the future majority shareholder of Fortis Bank. This willindirectly affect control over Fortis Investments and may lead to integration activities with BNPParibas’ asset management arm. The agreement is subject to a positive vote of Fortis shareholders.The Ordinary Meeting of Shareholders will take place on 28 April 2009 (Fortis S.A./ N.V.) and theAnnual General Meeting of Shareholders on 29 April 2009 (Fortis N.V.). The Board of Directors ofFortis Funds (Nederland) N.V. are of the opinion that it is too early to oversee all possibleconsequences for the Company, but believe in its continued operations.25

Fortis Funds (Nederland) N.V. Annual Report 200831 December 200824. ComplianceFinancial Supervision Act (Wft)The license under the Financial Supervision Act requires the Company, amongst other requirementsto:• Publish its Financial Statements within 4 months after end book year;• Comply with a minimum amount of shareholders equity.Shareholders’ equityThe shareholders’ equity of the Company amounts to at least EUR 125,000 together withsupplementary shareholders’ equity of at least 0.02% of the amount by which the value of the assetsunder management exceeds EUR 250,000,000, up to a required maximum of EUR 10,000,000.The Company’s shareholders’ equity at 31 December 2008 (and 2007) is sufficient.OTHER INFORMATION26

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Auditors’ reportTo: The General Meeting of Shareholders of Fortis Funds (Nederland) N.V.Report on the financial statementsWe have audited the accompanying financial statements 2008 of Fortis Funds (Nederland) N.V.,Amsterdam, which comprise the balance sheet as at 31 December 2008, the profit and loss account,statement of changes in equity and cash flow statement for the year then ended and a summary ofsignificant accounting policies and other explanatory notes.Management’s responsibilityManagement is responsible for the preparation and fair presentation of the financial statements inaccordance with International Financial Reporting Standards as adopted by the European Union andwith Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the management boardreport in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes:designing, implementing and maintaining internal control relevant to the preparation and fairpresentation of the financial statements that are free from material misstatement, whether due tofraud or error; selecting and applying appropriate accounting policies; and making accountingestimates that are reasonable in the circumstances.Auditor’s responsibilityOur responsibility is to express an opinion on the financial statements based on our audit. Weconducted our audit in accordance with Dutch law. This law requires that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financialstatements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity'spreparation and fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, aswell as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.27

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008OpinionIn our opinion, the financial statements give a true and fair view of the financial position of FortisFunds (Nederland) N.V. as at 31 December 2008, and of its result and its cash flows for the year thenended in accordance with International Financial Reporting Standards as adopted by the EuropeanUnion and with Part 9 of Book 2 of the Netherlands Civil Code.Report on other legal and regulatory requirementsPursuant to the legal requirement under 2:393 sub 5 part f of the Netherlands Civil Code, we report,to the extent of our competence, that the management board report is consistent with the financialstatements as required by 2:391 sub 4 of the Netherlands Civil Code.Amsterdam, 29 April 2009KPMG ACCOUNTANTS N.V.M.A. Huiskers RA28

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008Stipulations of the articles of association with respect to profitappropriationProfit is appropriated in accordance with article 25 of the articles of association. The stipulations areas follows:25.1 The profit is at the disposal of the general meeting.25.2 Profits will be distributed after adoption of the annual accounts/ financial statements showingthat this is justified.25.3 In accordance with a proposal of the board of directors, the company may distribute an interimdividend, by resolution of the general meeting, from profit of the current financial year, withoutprejudice to the provisions in article 26.1 (the company may only distribute to shareholders asfar as its own assets are larger than the issued capital plus reserves pursuant to the law)subject to provisions in Book 2, section 105, paragraph 4 of the Dutch Civil Code.Proposed profit appropriationIt is proposed to distribute the profit for the year 2008 amounting to EUR 11,586,853 (EUR 23,173.71per share) to Fortis Investment NL Holding N.V.29

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008OrganisationFortis Funds (Nederland) N.V.Registered officeDe Entrée 99-1971101 HE AmsterdamThe NetherlandsDirectorsJ.L. Roebroek (Chairman)C.A.M. HaasM.C. Van BeusekomM.P. MaagdenbergCompany secretariatM.D. SchuurmanAuditorKPMG AccountantsBurgemeester Rijnderslaan 10-201185 MC AmsterdamThe NetherlandsBanksABN AMRO Bank N.V.AmsterdamThe NetherlandsFortis BankUtrechtThe NetherlandsRegulatorsThe Netherlands Authority for the Financial Markets (AFM) (supervision of conduct of business)The Netherlands Central Bank (DNB) (prudential supervision)30

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008List of investment funds managed in 2008Fortis GarantiefondsenFortis Paraplu FondsFortis Best of World Garantie Fonds – Fortis Garantie Klik Fonds 80%– Fortis Index Garantie FondsFortis Mix Umbrella Fund N.V.– Fortis Rente Gigant Garantie Fonds– Fortis Netherlands Fund – Fortis Rente Gigant Garantie Fonds II– Fortis Global Property Securities Fund – Fortis 5 x 5 Garantie Fonds– Fortis Property Securities Fund America – Fortis 5 x 5 Garantie Fonds II– Fortis Property Securities Fund Europe– Fortis Property Securities Fund Far East ABN AMRO Equity Umbrella Fund N.V.– Fortis Small Companies Netherlands Fund – ABN AMRO Global Fund ***– Fortis AEX Index Fund – ABN AMRO Trans Europe Fund ****– Fortis High Income Property Fund– Fortis Global High Income Equity Fund ABN AMRO Beleggingsmodel Fondsen *– Fortis Asia Pacific High Income Equity Fund – ABN AMRO Beleggingsmodel Fonds 1– ABN AMRO Beleggingsmodel Fonds 2Fortis Umbrella Fund II N.V. – ABN AMRO Beleggingsmodel Fonds 3– Fortis All In Fund – ABN AMRO Beleggingsmodel Fonds 4– Fortis Euro Obligatie Fonds – ABN AMRO Beleggingsmodel Fonds 5– Fortis All Income Fund – ABN AMRO Beleggingsmodel Fonds 6– Fortis Premium Global Dividend Fund **ABN AMRO Institutional Funds*Fortis Groen Fonds – ABN AMRO Institutional Euro Government Bond Fund ****– ABN AMRO Institutional Euro Bond Fund ****Fortis OBAM – ABN AMRO Institutional Euro Credit Fund ****– ABN AMRO Institutional Euro Long Bond Fund ****Fortis Strategie Fondsen – ABN AMRO Institutional Euro Domestic Plus Fund *****– Fortis Duurzaam Donatie Fonds – ABN AMRO Institutional UK Plus Fund *****– ABN AMRO Multi Manager Profiel Fonds 2 – ABN AMRO Institutional Global Equity Fund *****– ABN AMRO Multi Manager Profiel Fonds 3 – ABN AMRO Institutional Equity Europe Tilted Fund *****– ABN AMRO Multi Manager Profiel Fonds 4 – ABN AMRO Support Fund I *****– ABN AMRO Multi Manager Profiel Fonds 5 – ABN AMRO Support Fund II *****– ABN AMRO Institutional Dynamic Asset Allocation Fund– ABN AMRO Multi Manager Profiel Fonds 6(GBP)Fortis Institutional Inflation Linked Bond Funds *– Fortis Institutional Inflation Linked Bond Fund I– Fortis Institutional Inflation Linked Bond Fund II– Fortis Institutional Inflation Linked Bond Fund III– Fortis Institutional Inflation Linked Bond Fund IVColumbia Securities N.V.* These funds are not under Supervision of The Netherlands Authorityfor the Financial Markets (AFM) and The Netherlands Central Bank(DNB)** Fund started in 2008*** Fund merged with other Fortis Investment fund and ceased to existin 2008.**** Fund closed down in 2008. Participants received shares ofanother Fortis Investment Fund as payout.***** Fund closed down in 2008. Participants received underlyingsecurities and/or cash as payout.31

Fortis Funds (Nederland) N.V. Annual Report 200831 December 2008For more informationInvestor ServicesFortis InvestmentsMarketing & Communications (AF 0340)P.O. Box 2831000 EA AmsterdamThe NetherlandsWebsite: www.fortisinvestments.comEmail: clientservices@fortisinvestments.comAmsterdam Trade Register no. 33.179.578How to order reportsPublications can be downloaded from www.fortisinvestments.com. Where available, printed copiescan be ordered:• on the internet at www.fortisinvestments.com• by email: clientservices@fortisinvestments.com32

Fortis Funds (Nederland) N.V. Annual Report 200831 December 200833