Opmaak JV 05 eng.indd

Consultancy and Engineeringdhv.comAnnual Report 2005 DHV GroupGateway to solutions

ProfileDHV is a leading international consultancy and engineeringgroup which provides services and sustainablesolutions for the following markets:• Transportation• Water• Building and Manufacturing• Spatial Planning and the Environment• AviationKey valuesDHV has seven key values which guide DHVprofessionals in taking responsibility, makingchoices and addressing stakeholders’questions:• Integrity• Top expertise• Respect and trust• Loyalty• Initiative• Customer focus• Results orientationMore than 3,700 socially committed DHV professionalsdevelop innovative concepts in the fields ofconsultancy and engineering.DHV offers its recognized expertise worldwide toclients in the public and private sectors through itsclose-knit knowledge network.DHV’s services include management consultancy, advice,design and engineering, project management,contract management and operational management.www.dhv.comHome marketsDHV is active in some fifty countries worldwidethrough its network of local officesin almost thirty countries. DHV offers abroad range of services in its home marketswhich, between them, account for thegreater part of the company’s turnover.• Canada• China• India• Indonesia• Poland• Portugal• South Africa• The Netherlands• United StatesProfile3

Executive Board ReportWil GroenhuijsenDHV’s Executive Board: Renko G. Campen (President, left) and Bertrand M. van Ee.Renko CampenRenko Campen (b. 1946, Dutch) joined DHV in 1972. He wasappointed to the Executive Board in 1995 and became itsPresident in 2003.His other appointments include:• Chairman of the Developing Countries Commission (COL) ofthe Dutch employers’ organization VNO-NCW• Member of the Supervisory Board of the Delft Cluster, aknowledge network for the sustainable structuring of denselypopulated regions• Member of the Executive Committee of SANEC (the SouthAfrican-Netherlands Chamber of Commerce).Bertrand van EeBertrand van Ee (b. 1957, Dutch) was appointed to the ExecutiveBoard in 2004. His additional appointments include:• Member of the GWW (groundwork, road and hydraulicengineering) workgroup of the Dutch ConstructionSupervisory Council• Chairman of the Building Taskforce of the InnovationPlatform (Ministry of Transport, Public Works and WaterManagement)• Member of the Policy Committee of AmCham (AmericanChamber of Commerce in the Netherlands)• Amsterdam Chapter board member of the YoungPresidents’ Organization (YPO).4 Executive Board Report

Strategy and policyVisionDHV aims to be a leading international engineering consultancy, active inboth the public and private sectors.MissionTo provide multidisciplinary services for the sustainable development ofour environment, in a close relationship with clients, staff, partners andshareholders, based on mutual loyalty.The DHV Group is an international engineeringconsultancy, active in both thepublic and private sectors. In essence, theGroup’s strategy has remained unalteredcompared to previous years, the objectivesbeing to achieve long-term continuity anda prominent position among comparablecompanies worldwide. However, changingmarket conditions, both in Europe andelsewhere, now demand a sharper focus,greater awareness and a faster responsetime. This has led to some adjustment tothe Group’s policy, and calls for greaterflexibility on the part of the organization.The process of internationalization continuesunabated. The DHV Group has optedto undertake a greater number of activitiesin fewer countries. Concentration on theKey figures(€ million, except where otherwise indicated)strongest markets will enable us to realizegrowth in the relevant markets.Looking back to the expectations formulatedin the 2004 Annual Report, we maystate that DHV has, in general, been ableto meet the stringent requirements of themarket. Projects have been completed successfullyand there is a high level of clientsatisfaction. However, DHV was not alwaysable to demonstrate the alertness requiredto address the effects of new developments,and the organization can occasionallybe seen to lack the necessary flexibility.2005 2004 change (%)Net turnover 300.6 294.1 + 2.2 %Proportion of turnover derived from the Netherlands (%) 57 58 - 1.0 %Proportion of turnover derived elsewhere (%) 43 42 + 1.0 %Added value 229.0 229.1 - 0.0 %Operating profit before amortization of goodwill 6.3 9.5 - 33.7 %Operating margin on added value (%) 2.7 4.1 - 1.4 %In recent years, the DHV Group has shownitself able to devise, implement and managenew forms of contract on behalf of itsclients. Similarly, during the year under reviewthe company has again demonstratedthat it maintains a corporate culture inwhich innovation can flourish, havingintroduced or embraced several new technologies.The most effective way to render visiblethe added value offered by the DHV Groupis to offer innovative solutions within localmarkets, making full use of local talent.Growth, innovation and internationalizationremain the three spearheads of policy.The preconditions to achieve this policy are:• Client-orientation coupled with internalefficiency.• Sound financial performance, ensuringthe ongoing ability to make appropriateinvestments.• A higher degree of staff flexibility.• Staff who are able to meet the very highestdemands of the industry.• Active internationalization, aided byleading, innovative technology.GrowthDHV aims to achieve growth in turnoveraveraging 10% per annum, half throughorganic growth and half through acquisitions.The consolidation of the Group’sholding in Stewart Scott International willhave a positive effect on the growth figuresfor 2006.In the medium-to-long term, the Groupaims to achieve an operating margin of 7%on added value. A satisfactory profit marginand efficient use of capital will lead to asound increase in the value of DHV shares.Executive Board Report5

InternationalizationThe increase in the DHV Group’s interestin Stewart Scott International represents asignificant step forward in the process ofinternationalization. The current objectiveis that 60% of turnover should be derivedfrom countries other than the Netherlandsby the year 2009. The Netherlands will accountfor the remaining 40%, thus continuingto be the Group’s main home market.Other than the Netherlands itself, the mostimportant regions are the rest of Europe,Asia, North America and Africa. DHV hasestablished a strong position in severalmember states of the European Union,enabling further growth to be achieved indue course.The public sector market, both in the Netherlandsand elsewhere, remains important.However, DHV also wishes to achieve furthergrowth on the private sector markets.Doing so will have consequences in termsof the role, the work dynamic and risk managementstrategy of the company.InnovationInnovation is at the heart of the DHVGroup’s strong image. Our expertise inairports, railways, harbours, traffic management,roads, water and buildings isinternationally recognized. Clients call forstate-of-the-art solutions. We are able toprovide such solutions by virtue of a professionalworking environment with all necessarycertifications.The DHV Group’s prominent consultancyprofile reflects the fact that it also focusseson the initiation phase of projects. Thehigher in the chain of consultancy and engineeringservices that we can operate, themore effectively our innovative strengthswill be demonstrated. The conceptualdesign and the ‘total life-cycle approach’,which includes attention for sustainabilityand asset management, are now amongDHV’s recognized specialist areas of expertise.PortfolioDHV operates a system of ongoing portfolioevaluation, an approach which willbecome increasingly important in the yearsahead. Scale is a critical factor in determiningthe potential of business units and thatof overseas markets. In the case of someunits and regions, concentration of activitieswill result in greater opportunity. Incountries other than the Netherlands, DHVrecognizes three levels of presence: projectpresence, permanent presence and ‘homemarket’. A ‘permanent presence’ requiresparticularly close monitoring to ensure thatappropriate investment decisions are madeat all times.The labour marketThe quality of DHV is reflected by the appreciativecomments received from itsclients and by the innovative solutions it isable to offer. This quality is entirely due tothe staff of DHV. Developments on the nationaland international labour market aretherefore important. For some people it ishard to cope with the ever increasing speedof change, but it cannot be ignored. DHVstrives to recruit and retain the best possiblepeople in each market by providing achallenging working environment, ongoingtraining, programs designed to encourageinnovation, and an appropriate package ofemployment conditions and benefits.6 Executive Board Report

2005 ReportThe year under review was one of transition.The organization was subject to somerestructuring, while a number of termsand conditions of employment demandedconsiderable attention. In two of the threespearheads of policy – innovation andinternationalization – DHV performedwell. Several innovative technologies weredeveloped, and the process of internationalizationmade a significant step forwardin South Africa. However, performancewas not so propitious in terms of the thirdspearhead of policy: growth. In 2005, DHVachieved only minor growth and a modestprofit, both being lower than the targetsset out in the previous annual report. Thiswas partly due to over-optimistic economicforecasts, and partly to our failure to acquirea number of major projects. Competitionis fierce, and clients are increasinglycalling upon the services of purchasing andprocurement organizations. The emphasisthen falls on price rather than quality,while our acquisition costs increase. Moreover,not only in the Netherlands, but alsoin Poland, the Czech Republic and SouthAfrica the percentage ‘increase of staffcosts rose’ is greater than any increase inthe fees. In the Netherlands, the increasedcosts due to new pension arrangementshave made a significant contribution to risingexpenditure.During the year under review, a number ofcorrective measures were implemented toimprove the market approach, increase thecapacity utilization rate and control expenditure.New guidelines covering the ratioof direct to indirect staff were introducedmid-year, with the indirect functions moreefficiently concentrated. Greater attentionwas devoted to staff members’ market orientation,with support provided as necessary.Dialogue with clients will ensure thatclient demand remains the key guidingprinciple.In Europe, performance was particularlygood in Poland, the Czech Republic andHungary, where substantial growth wasrealized. Our early, long-term presence inthese countries has given us a distinct advantageupon which we can now capitalize.The results on the Portuguese market werevaried. Two of the three company unitsin Portugal performed reasonably or evenwell, while the third experienced a difficultyear. The negative results of this thirdunit affected the overall performance ofthe DHV Group in Europe, and prompted arestructuring process which involved thereducion of approximately 5% of our staffin Portugal.In Asia, growth lagged behind expectations.Although the Chinese market remainsextremely dynamic, the acquisitionof profitable projects on the local market isa lengthy process. In other Asian countries,a worsening business climate promptedan adjustment of the expectations. Themarket in Indonesia was particularly difficultand, despite the Group’s long andsometimes fruitful presence in the region,the future remains uncertain. Followingthe tsunami of 26 December 2004, it wouldseem that people now realize that marketrelationships must change.In North America, the Group’s participationin Delcan (40% DHV) once again proved tobe a strong strategic move. The company’stechnological and innovative strengths arewell matched to those of DHV and providea favorable position for a further expansionof activities.The increase of the DHV Group’s interest inStewart Scott International of South Africa(65% DHV), together with the acquisitionof Bohlweki Environmental, represents asignificant strengthening of DHV’s positionon this market, whereby opportunities forsynergy with other divisions of the Groupcan be better utilized.Jade PhotographyDHV’s increased shareholding in StewartScott International is sealed with a handshake.(Left to right) Vic Prins, RenkoCampen, Rufus Maruma and Bahle Sibisi.Executive Board Report7

Reorganizations and acquisitions• On 1 January 2005, DHV implementedan organizational structure based on thefour business groups (Environment andTransportation, Building and Industry,Water, and Aviation), and on the fourworld regions in which the companywishes to maintain a prominent presence:Europe, North America, Asia andAfrica.• On 1 January 2005, DHV closed its DesignOffice in Liberec, the Czech Republic. Alternativeemployment was found for allfour staff.• On 5 July 2005, Stewart Scott International(SSI) acquired Bohlweki Environmental,a consultancy with 17 employees.This enables SSI and DHV to strengthentheir joint position on the environmentalconsultancy market in South Africa.• On 20 October 2005, DHV increased itsholding in Stewart Scott International(500 employees) from 32% to 65%. DHVis the first Dutch engineering firm toacquire a majority interest in a South Africanconsultancy.• On 1 December 2005, DHV ANR BV formallybecame part of DHV Water BV. Theactivities of DHV ANR BV and its 20 employeeshad already been transferred toDHV Water BV.• On 12 December 2005, DHV acquiredthe research and consultancy firm TrafficTest (12 employees) from the DutchCentral Driving License Issuing Authority(CBR). This acquisition represents astrengthening of DHV’s position on themarket for transportation solutions.• On 16 December 2005, a downsizing ofthe organization in Portugal by approximately5% took effect. The intended saleof DHV CEM did not proceed; the companyhas been reformed and will continueits activities with the existing staff.• On 28 December 2005, DHV disposed ofits 97.7% interest in Iris Consulting of Belgium(20 employees).During the year under review, DHV commencedpreparations for the implementationof the ‘one company concept’. On3 January 2006, DHV Environment andTransportation BV, DHV Water BV andDHV Consultants BV merged within DHVBV (formerly DHV Services BV), while DHVBuilding and Industry BV transferred itsactivities to DHV B.V..Executive Board Report9

Developments within the Global NetworkDHV is active throughout the world. Projects are undertaken byvarious organizational units, although DHV always strives to offerthe knowledge and expertise available throughout the entiregroup, wherever it is required. That expertise covers such areasas waste water treatment, harbor development, waterways andcoastal development, airport development, roads and highways,railways and urban public transport, traffic management, watertreatment and water management.De Blauwe Stad newtown developmentand landscapingproject, Groningenbusiness groupSpatialPlanning andEnvironmentbusiness groupBuilding andManufacturingDevelopment objectives for 2005- To raise and redefine the consultancyprofile.- Integration of Temid.- Development of regional offices.- Program management and delegatedcommissioning.- International growth.- Fulfillment of the total market demand.- Taking initiative in project development.- Possible risk-bearing role.Groene ZodenVietcom Bank,Ho Chi Minh Citybusiness groupWater- Further internationalization.- Project manager to develop business indrinking water and waste water markets.- Development of knowledge and innovativestrength.CepezedWaste watertreatment plant,Varsseveldbusiness groupAviation- Greater attention for home markets.- Further steps towards a permanent presencein China.- Joint venture in Africa with Stewart ScottInternational.- Exploration of opportunities in the UnitedStates.DHVAthens InternationalAirportregionEuroperegionNorth America- Growth in Central Europe.- Further cooperation between Europeanoffices.- Assimilation of Aviation business group.- Actively follow international private clients.- Intensification of cooperation with Delcan-NET.- High-grade consultancy services in thewater sector.- Grouping of traffic management expertisefor Europe and Asia.- Focus on the United States on the NorthAmerican continent.NACOTraffic management,BeijingregionAsia- Investment in local DHV companies inorder to benefit from regional growth.DHVregionAfrica- Intensification of cooperation with SSI.- Active project acquisition further to the2010 FIFA World Cup.- Focus on airports, highways, water andrural development.10 Executive Board Report

Results in 2005- Growth in consultancy activities.- Integration of Temid and growth in rail-related turnover on-target.- Local market at required level; expansion of Rotterdam office.- Strengthening of position in delegated commissioning.- De Blauwe Stad landscaping project in Groningen, the Netherlands (which wonthe ‘Golden Pyramid’ award) is officially opened by HM Queen Beatrix.- Delays to several large infrastructural projects in the Netherlands.- Acquisition of Traffic Test strengthens position on transportation market.- Growth in Europe and Asia.- Reduction in number of internationally financed projects in Africa and Asia.- Growth in turnover, profit margins under pressure.- Positioning in parks, facility and asset management.- Dutch office market remains difficult.- Cooperation with BAM Utiliteitsbouw for the Dutch education sector (Schoolcompagnie).- Strong international position in the industrial market due to good contacts withmultinational clients active in many countries.- Total, integrated design and engineering projects, such as the Vietcom Bank inVietnam.- Internationalization continued.- Project managers will prepare and implement business plans for new technologiesand services.- Leading partner in H2O Partners (drinking water and waste water sector, Dutchfederations of Municipalities and Provinces, Ministry of Foreign Affairs) focusingon Tsunami Rehabilitation and Reconstruction Project in Aceh, Indonesia.- Innovation Manager appointed.- Several important innovations:• Waste water treatment plant in Varsseveld (NL), based on Membrane Bioreactortechnology, opened by HRH Prince Willem-Alexander.• Nereda TM , aerobic sludge pellet technology wins Dutch ‘Vernufteling’ Prize.• Moving Bed Trickling Filter also used for air treatment (for the first time).- Considerable attention devoted to the home markets. No immediate results, butposition improved with regard to future potential.- Chinese market remains extremely dynamic but difficult.- Successful joint venture in Africa.- Important foothold gained in Saudi Arabia.- Active in Europe: Schiphol (Amsterdam), Frankfurt and Athens.- Outline agreement for cooperation with Innova in the United States, representingaccess to the world’s largest airport market. First joint project in Jordan.- Growth in turnover in Czech Republic, Romania and Turkey; improved profitmargins in Poland and Hungary.- Growth in joint consultancy activities by European offices.- Active marketing for both national and international airports.- Private market lags slightly behind EU-financed projects.- Intensification of cooperation with Delcan-NET, including traffic managementcontract for Beijing, China.- Delcan advises Canadian water companies with regard to system management,using DHV technology.- Delcan-NET strengthens position in the US, including contract for the supervisionof quality management on the FasTracks project in Denver, Colorado, the largesttransport system expansion in the history of the United States.- ITS Global realized: a joint approach by Delcan and DHV for the international IntelligentTransport Systems (ITS) market.- Strengthening of local management, sales capacity and project management.- New projects, including the Philips Innovation Campus and the Eurocampus (bothin Shanghai).- Restructuring of organizations in India and Indonesia; high costs in China erodeprofit margins.- DHV increases holding in Stewart Scott International to 65%, and simultaneouslystrengthens the ‘Black Empowerment’ profile.- Acquisition of Bohlweki provides strong position on environmental market.- Large number of airport development projects (12) acquired through cooperationbetween SSI and NACO.Prospects for 2006- Attention for postponed projects (in the Netherlands) which will be reinstatedthis year.- Growth of regional offices in the Netherlands; new office in Bergen op Zoom.- Targeted marketing of both consultancy services and technological solutions.- Changing government role; expertise is shifting to the market, where responsibilitywill be assumed and developed.- Opportunities in the roads and hydraulic engineering market will be exploited.- Continuation of international growth.- Top expertise strongly profiled to restore profit margins.- Further development of position in parks, facility and asset management.- Focus on market for redevelopment and re-use of offices (2007-2010).- Strengthening of international position in office buildings, working with internationallyrenowned architects.- Further development of the ‘Schoolcompagnie’ (DHV-BAM) partnership’s position.- Further use of the DHV network to achieve international growth.- Active marketing of Nereda TM technology in the Netherlands and elsewhere.- Expansion of water treatment and water management activities in the Netherlands.- Dissemination of vision and ideas regarding optimization and renovation in thedrinking water supply sector.- New opportunities provided by Airbus A380 introduction and the rising popularityof low cost carriers will be exploited.- Further shift from public to private investors; more Design & Build projects.- Middle Eastern market developing strongly.- Ongoing attention to European market and existing clients.- Exploration of opportunities in Indonesia.- Exploration of opportunities in India.- Exploration of opportunities for further project cooperation with Innova.- Opportunities presented by extensive EU funds for Central and Eastern Europe.- Expansion and improvement of the local offices in Central and Eastern Europe.- Improvement of results in Portugal.- Ongoing focus on growth in the United States; top-level expertise, technologyand program management for roads, light rail, transportation, airports and water.- Bundling of DHV and Delcan-NET expertise to strengthen position in Europe andAsia.- Cooperation between NACO and Delcan on airport projects.- Further marketing of ITS Global.- Further investment in local offices, geared to expanding activities on behalf ofprivate clients.- Opportunities presented by strong economic growth in the region and by theincreasing concern for sustainability.- Focus on Indonesia (reconstruction of Aceh) and India (international investors andproperty developers).- Further growth in all services and in all African countries, but with particularemphasis on South Africa.- Further geographic spread based on strong position in South Africa.- Marketing and positioning in anticipation of major events such as the 2010 FIFAWorld Cup.Executive Board Report11

Finances12 Executive Board ReportTurnover by client groupTurnover by business groupTurnover by regionGovernment 41%Industry and commercialservices 26%Public utilities andsemi-government 26%International financiers 7%Spatial Planningand Environment 51%Building andManufacturing 23%Water 22%Aviation 4%The Netherlands 57%Europe 19%(excl. The Netherlands)Asia 10%North America 6%Africa 6%Other 2%Net turnoverNet turnover rose by 2.2% in 2005, to 300.6 million. The increase is entirely dueto the acquisition of Temid (effective per31 December 2004). If this acquisition isdiscounted, turnover may be seen to havefallen by 0.9% (allowing for currency exchangerate effects).Added valueAdded value remained stable during thereview year, at € 229 million. The developmentin added value was less than that ofnet turnover, due to a slight shift towardsactivities with a higher percentage of outsourcedwork and other external projectcosts.Costs developmentTotal operating expenditure (excluding thecosts of outsourcing and other externalproject costs) increased by 1.4% to € 222.7million. Staffing costs, comprising salariesand social insurance premiums, rose by4.8% to € 158.7 million, thus representing71.3% of the total operating expenditure.An amount of approximately € 2 millionhas been included in the account entryfor operating expenditure with respect tothe costs of restructuring programs. Thisrestructuring is expected to result in a permanentcost reduction in the order of € 4million per annum.Operating profit and operatingmarginThe operating profit fell by € 3.2 millioncompared to the previous year, to € 6.3million. This was primarily due to disappointingresults in Asia and Europe, andin the Water business group as well asthe costs of the aforementioned restructuringprograms. Overall, the operatingmargin (operating profit before amortizationof goodwill/added value) fell from4.1% to 2.7%. If the restructuring costs arediscounted, the margin would have been3.6%.GoodwillIn 2005, € 0.75 million in regular goodwillwas written off. An amount of € 1.0 millionin goodwill was paid out during the year in

espect of the various acquisitions and theincreased holding in Stewart Scott International.DHV makes its acquisitions for the longterm. An amortization period of twentyyears is applied to goodwill, in accordancewith the expected economic life expectancyof the company or activities concerned.Financing costsInterest paid in 2005 totalled € 1.7 million.This represents a slight increase comparedto the previous year, largely due to a higheraverage working capital financing requirement.TaxationThe tax burden for the year was 10.0% ofprofit. The overall tax burden was reducedby tax compensation relating to the liquidationof overseas participations, andincreased by non-valuation of loss compensationrelating to overseas subsidiaries, andby non-deductible amortization of goodwill.Net profitNet profit fell by € 0.4 million compared tothe previous accounting year, to € 3.7 million.The net profit margin on turnover wastherefore 1.2%.Balance sheet ratiosThe balance sheet total fell to € 137.4 million,a decrease of 4.6% compared to the2004 level. This was primarily due to a6543210Net profit(€ million)5.2nettoresultaat (in miljoenen €)5.91.04.13.72001 2002 2003 2004 20051210 121086864420200,6bedrijfsresultaat(voor afschrijving goodwill) (in €)0,411.7bedrijfsresultaat11.1 (voor afschrijving goodwill) (in €)11.10,211.70,0decrease in the gross working capital (accountsreceivable (voor afschrijving plus goodwill) work 6.3 (in €) in hand, minusbedrijfsresultaat12advances and pre-invoiced work) of €2.911.75.5 million11.1and a decrease in the value offixed 10assets in the amount of € 2.5 million.Working capital was outstanding 9.5 for an average2.98of 80 days in 2005, compared to 862001 2002 2003 2004 2005days in 2004.Equity rose by € 1.4 million in 2005. This66.32001increase2002is due2003to the2004addition 2005of the netprofit of € 3.7 million, offset by provisions4for pension liabilities further to the newreporting requirements in the amount of 2.94.2 million 2 and an active tax deferral in theamount of € 1.3 million.Net interest-bearing0liabilities (long-termliabilities 2001 plus 2002 liabilities 2003 2004 to credit 2005 institutions,less cash at bank and cash inwinst per aandeel (in €)hand) decreased due to a reduction in the1,2 winst per aandeel (in €)working capital requirement. The total1,2credit facility available 1.11 for current accountoverdraft 1,0 and 1.11 guarantees, plus long-termliabilities, 1,0 0.97amounted to € 99 million at0.9731 December 0,8 2005. The ratio of interestbearing0,8 liabilities to equity 0.76 was 0.51 at 31December 2005, compared 0.76 to 0.53 0.68 at the0,6end of 2004.0.680,60,4Cash flow0,4The total cash flow (net profit plus depreciation0,2of fixed assets and amortizationof goodwill) 0,2 was € 10.6 0.14 million (2004:€ 12.20,0million). The 0.14 cash flow from operational0,0 activities 2001 2002 was 2003 € 5.1 million 2004 2005 (2004:€ 7.5 million). 2001 2002 2003 2004 2005of goodwill) bedrijfsresultaat(€ million)(voor afschrijving goodwill) (in €)12 bedrijfsresultaat(voor afschrijving goodwill) (in €)11.71211.111.71011.110864202001 2002 2003 9.5 2004 2005Operating profit (before amortization864209.50.142.92.96.39.59.56.32001 2002 2003 2004 20052001 2002 2003 2004 20056.330netto-omzet en toegevoegde waarde(in miljoenen €)35020netto-omzet en toegevoegde waarde321.3 (in miljoenen €)300311.2350 300.2300.610294.1250321.3300311.20300.2300.6230.9 234.7 294.1223.4229.1 229.02001 Net 2002 turnover 2003 2004 2005200250 Added value230.9 234.7223.4229.1 229.0150200 Net turnover and Addedvaluenetto-omzet (€ million) en toegevoegde waarde(in miljoenen €)10035015050300100 300.20250502001 2002 230.9 2003 234.7223.42004 229.1 2005 229.020001502001 2002 2003 2004 200510050060 eigen vermogen (in miljoenen €)(€ million)60504030201001500,41001000,2505005040302010042.342.3eigen vermogen (in miljoenen €)46.646.645.949.345.949.350.82001 2002 2003 2004 20052001 2002 2003 2004 2005(€ netto-omzet million) winst perenaandeeltoegevoegde waarde(in €)(in miljoenen €)1,2350netto-omzet en toegevoegde waarde(in miljoenen €)3501.11 321.3300311.21,0 300.2300.6321.3294.1300 0.97311.2300.2300.6294.12500,8250230.9 234.7223.4229.1 229.00.76200230.9 234.7223.4229.10.68 229.0200 0,60,0Shareholders’ equityProfit per share1500321.3311.22001 2002 2003 2004 20050.14294.1300.650.82001 20012002 20022003 20032004 2004200520052001 2002 2003 2004 2005Executive Board Report13

Employment marketDHV wishes to achieve ongoing flexibilitywithin the organization. Competition onthe employment market continues to increaseworldwide. DHV carefully monitorsthe employment markets in all the regionsand countries in which it is active. Variousbenchmark surveys suggest that DHV’simage among (technology) students in theNetherlands improved during the year underreview. Our positioning in other countriescontinues to demand attention.Age-related personnel policyIt is becoming increasingly important toapply an ‘age-conscious’ personnel policy.As the retirement age has increased,greater account must be taken of their age,career phase and the relevant ambitionsand requirements. Employability and opportunitiesfor mobility change, but remaincrucial for both employer and employee. Itis now necessary to devote more attentionto training and coaching which will enableolder staff to take a full part in the company’sbusiness activities.Management DevelopmentDHV has approximately 230 managementpositions worldwide. The sixty most seniormanagers are appointed on the recommendationof the Management DevelopmentCommittee. The remainder are subject tolocal nomination.In 2005, many relatively young people wereappointed to management positions, fromhead of department to unit manager. Mandatorymanagement training courses wereintroduced, to be completed by all newappointees. During the year under review,a total of 89 people took part in the followingcourses: People Management (15), ProjectDirection (33), Project Management(14), Operational Management (27).Project directors and project managersmust also complete a mandatory trainingcourse upon appointment. Alongside suchmandatory courses, corporate trainingcourses such as the ‘Masterclass in Consultancy’are available.Objective for 2006: to implement a certificationprocess for project directors andproject managers.Health and SafetyThe European Union’s Health and Safetydirectives are incorporated into nationallegislation by each member state, whichcan lead to some discrepancy between theregulations in one country and those in another.DHV always observes the local legislation.In the Netherlands, this legislation isknown as the ‘ARBO norms’ for health andsafety of employees.In the Netherlands, absenteeism throughillness was 3.6% in 2005 (against 3.7% inthe preceding year). Insufficient figures areavailable to provide a reliable picture regardingthe offices in other countries.DHV has a contingency plan for the protectionof staff working in high-risk areas. Thisplan will be revised and updated in 2006.Insufficient figures are available to providea reliable picture regarding the offices inother countries.Principal consultantDuring the year under review, the title of‘principal consultant’ was given furtherform. Principal consultants determine theimage of DHV, both in general and in therelevant professional discipline. They areregularly asked to give their views on themarket and on strategic questions.The DHV websiteFurther information about personnel issues,human resources management andfigures relating to the DHV organizationin the Netherlands is to be found at www.dhv.com/hrm.Kitty van DijkYoungDHV launched its ‘Strategy Game’ in2005.YoungDHVYoungDHV, the network of younger DHVstaff, launched its ‘Strategy Game’ in 2005.Ten international teams (of five or sixplayers) are taking part. Their task is toformulate various scenarios for the futureof DHV, and to determine the best ‘fit’ withthe current DHV business. The teams’ suggestionsare evaluated by a panel of DHVmanagers.The aim of the game is twofold: it allowsthe ‘new generation’ to present their visionand views, while also encouraging youngerstaff to think about strategic issues thatthey might not meet in their day-to-daywork. Their horizons are broadened andthey come to feel part of the DHV Group asa whole. In March 2006, the four winningteams presented their scenarios during theInternational Management Meeting.Executive Board Report15

Business and stakeholdersThe DHV Group has a large internationalclient base, representing all levels of theprivate and public sectors. Governmentsand government departments, as well asregional and local authorities, regularlycall upon our services. Private sector clientsinclude many multinationals, privatizedcompanies and semi-government organizations,business-to-business service providers,and contractors. A separate and veryimportant group is formed by the bilateraland multilateral financing institutions.DHV conducts its various activities withinnumerous projects of varying sizes. Our servicesare primarily concerned with consultancyand engineering in five main markets:building and industry, spatial design andenvironment, transportation, airport development,and water.Specific services include: (project) preparation,consultancy and advice, conceptual design,design, supervision, management andmaintenance, and project implementationin the broadest sense of the word, wherebyDHV does not undertake the ‘hands-on’construction or manufacture of any projectrelatedcomponents.Such project-related activities demandgood cooperation, not only with the clientbut with all other parties involved in, or affectedby, the project: the ‘stakeholders’.These include licensing authorities, socialand societal organizations, local residents,providers of specialist services, financiers,contractors, suppliers and operators.Changing relationships within projects andnew forms of contract now call for certainroles to be redefined.In order to meet all the requirements ofbusiness integrity and to avoid any conflictof interests, there must be full transparencyin every respect and within every relationship.This is seen as a sine qua non.DHV has the following stakeholders: staff,clients, shareholders, government (at variouslevels), suppliers, financiers, knowledgeinstitutes, special interest groups and industryorganizations. DHV maintains closecontact with all these stakeholders, withregular consultation on all issues which areof mutual importance.In China and Portugal, DHV has establishedan Advisory Council to monitor local developmentsand maintain good contact withexternal parties. Delcan (Canada) and StewartScott International (South Africa) alsohave their own Advisory Councils.DHV staff take an active part in nationaland international industry federations, consultationplatforms, employers’ organizations,Chambers of Commerce, professionalassociations and knowledge institutes. Theydo so to cement the ties between the companyand society at large, which is clearlyvery important. The involvement of DHVstaff, many of whom sit on the committeesand governing boards of these organizations,serves to keep the company abreastof relevant developments. A list of the externalappointments held by DHV staff is tobe found at www.dhv.nl/nevenactiviteiten.Corporate stakeholdersStaffCentral consultation with the Central Works Council:Decentralized consultation with local works councils:Surveys were held in 2005 on three topics:• Regular consultation; in 2005 additional consultation meetings were held to discuss:- pensions.- organizational restructuring.• Regular consultation, by business unit.• Corporate Social Responsibility.• ICT.• Human Resources Management.ClientsShareholdersOther interestedpartiesSector-specific:DHV Foundation;Employee Share Ownership Trust Office Foundation (StichtingAdministratiekantoor DHV Medewerkersaandelen)together with certificate holders, employees, pensioners);DHV Priority Foundation (Stichting Prioriteit DHV);DHV Pension Fund Foundation (Stichting Pensioenfonds DHV).Government bodies:Financiers:Knowledge institutes:Special interest groups:Industry organizations:• Customer satisfaction surveys.• General Meeting of Shareholders; once a year.• General Meeting of Certificate Holders; once a year.• Dutch Construction Supervisory Council (GWW workgroup).• Developing Countries Commission (COL) of the Dutch employers’ organizationVNO-NCW: a platform for government and the private sector.• Participation in FIDIC (International Federation of Consulting Engineers); regularconsultation with the World Bank, the Asian Development Bank and the Inter-American Development Bank.• Participation in EFCA (European Federation of Engineering Consultancy Associations);regular consultation with the European Union.• Close contacts are maintained with knowledge institutes, which is relevant toboth parties. DHV actively encourages consultation with knowledge institutes atlocal and regional level: see www.dhv.nl/nevenactiviteiten.• Consultation with special interest groups is undertaken at local level.• Organization of Dutch Engineering Consultancies (ONRI).• International Federation of Consulting Engineers (FIDIC).16 Executive Board Report

Corporate Social ResponsibilityThe DHV Group is fully aware of its influenceon society, the human environmentand the interests of both individuals andother organizations. The company strivesto address all such interests with respect,this being at the heart of Corporate SocialResponsibility.A survey held among staff in the Netherlandsreveals that the company’s socialrole and responsibility are considered to beextremely important. In future, DHV’s performancein this area will come to play aneven more important part in the award ofcontracts and projects. Concern for people,the environment and society at large isdirectly linked to the company’s long-termcontinuity. The key to success lies in theability to evolve to the next level of doingbusiness, on which corporate interests coincidewith those of the people with whomDHV works, and those of the environmentwithin which it works.DHV endorses and observes the OECDGuidelines for Multinational Corporationsand the relevant conventions of the InternationalLabor Organization (ILO). The UnitedNations’ Global Compact is also seen asan important incentive to appropriate performance,establishing as it does standardsand values with regard to the reductionof poverty, justice and human rights, employmentconditions, non-discrimination,health and environmental concern.Four pillarsVarious aspects of Corporate Social Responsibilityare an intrinsic part of DHV’s day-todayactivities. The company contributes tothe processes of social change, developingits own solutions to sustainability issuesand applying sustainable technology. TheDHV Group also acknowledges its responsibilitiesas an employer, as stated in itspersonnel policy.Since 2002, the policy with regard to corporatesocial responsibility has been madeexplicit in a number of focus areas:• Integrity management• Sustainable innovation• Sustainable business operations• Corporate social involvement.Objective for 2006: the Sustainable DHVworkgroup is to develop a model for theDutch companies, which can then formthe basis for international policy. Until thisprocess is complete, efforts in the field ofCorporate Social Responsibility will be coordinatedby the Executive Board and theInternational Policy Board.DHV wishes to establish a clear profile interms of Corporate Social Responsibility. Ittherefore applies the four pillars of policy inaddressing People, Planet and Profit.PeopleDHV aims to achieve a balanced staffingstructure throughout the organization,with particular attention for the employabilityof older staff members. Ongoinginvestment in training offers staff the opportunityto develop their own skills andabilities while also strengthening DHV’smarket position.DHV is active throughout the world, and alwaysstrives to work in full accordance withits own corporate values. These includeproviding equal opportunities for men andwomen, particularly in countries in whichthis cannot be taken for granted. Nevertheless,it is not always possible to apply thestandards in full in every situation. In practicetherefore, DHV seeks to maintain anappropriate balance between its standardsand the local cultural context. Where sucha balance cannot be achieved in a responsiblemanner, DHV will consider to refrainfrom participation. Under no circumstanceswhatsoever will DHV condone or makeuse of child labor, and will never cooperatewith any company that does.The new agreement between DHV andStewart Scott International provides animportant boost to the South Africangovernment’s policy of ‘broad-based blackeconomic empowerment’. Stewart ScottInternational maintains an active policydesigned to help historically disadvantagedindividuals, whereby training and educationare provided to equip them for employmentwith the company. Eventually,it is hoped that the disadvantaged groupswill be fully represented in every unit anddepartment of the company.DHVBusiness Integrity Management SystemIn 1999, integrity was declared one of theseven key values of DHV. In 2003, a BusinessIntegrity Management System (BIMS)became fully operational. The BIMS comprisesseven interrelated components:1 The business principles, as stated on thewebsite at www.dhv.nl/code.2 Commitment to those business principlesby management and staff, establishedby means of individual contractsof employment.3 Managers are required to report quarterlyon (non-) compliance with the businessprinciples, and must sign a Letter ofRepresentation annually, reporting onhow the system functions within theirorganizational unit.4 Dialogue: all staff are expected to discussany dilemmas with their immediate linemanagers.5 The reference book, which describes theintegrity management system, instrumentsand possible dilemmas in full, providingexamples.6 A Compliance Officer has been appointedto advise management and staff on anydilemma that may arise and to overseecompliance with the business principles.7 A whistleblower scheme, enabling staffto report any (suspected) irregularitywithout fear of recrimination or reprisals.Implementation of the Business IntegrityManagement System continued in 2005.Meetings were held within various businessunits, at which staff were encouragedDHV’s standards and values are establishedwithin its business principles.Executive Board Report17

to discuss examples of various possibledilemmas. The requirement to observe thebusiness principles at all times is now establishedin the company’s standing ordersand in individual contracts of employment.The system of quarterly reporting has beenimproved. An Internal Audit departmenthas been created, the responsibilities ofwhich will include monitoring compliancewith the BIMS. The Compliance Officer wascalled upon to advise on a number of actualdilemmas, while the business groupsreported several incidents, most of whichcould be resolved in full accordance withthe business principles. There were alsosome reported incidents in which this wasnot the case, whereupon immediate measureswere taken to preclude any recurrence.In some cases, action is still ongoing.The strict observance of its integrity rulesrequired DHV to decline a number of projectsduring the year under review. With aview to future continuity, the company regardsthis as the only appropriate strategy.A number of staff approached the confidentialadvisor to report suspected irregularitiesfurther to the ‘whistleblower’scheme. In no instance was it considerednecessary to make a formal report.Objectives for 2006: a further roll-out ofthe BIMS into the international businessunits and into the international trainingcourses for project directors and projectmanagers. The process of providing informationand advice will be continued. Therewill be a study of risk situations with inputfrom the Internal Audit department.Local management. In every country inwhich DHV is active, efforts are undertakento ensure that the staffing reflects localdemographics. This is often difficult toachieve in practice, but policy demands appropriatesolutions to be found. Since 2005,almost all overseas DHV companies are ledby local managers from the countries concerned.Local managers receive full trainingin working according to the general businessprinciples of DHV.Corporate Social Responsibility. The socialinvolvement of DHV staff is amply demonstratedby the manner in which theyfrequently volunteer to help others. The appallingdevastation caused by the 2004 tsunamiin south-east Asia prompted DHV toprovide expertise at no charge. Staff gaveup part of their holiday entitlement (totaling420 days) to offset the costs, and theExecutive Board dispatched volunteer DHVexperts to the region to provide immediatehands-on assistance.The main new contacts and activities in2005 were:• Assistance in reconstruction efforts inthe areas affected by the tsunami.• Partnership with SOS-Kinderdorpen, aNetherlands-based charity providing village-styleaccommodation for orphansand displaced children in developingcountries. DHV provides expertise andexperience, and was pleased to make acash donation to mark the fortieth anniversaryof SOS-Kinderdorpen in theNetherlands.• Partnership with the WWF (formerlyWorldwide Fund for Nature) in the Netherlands,with assistance in the form ofconsultancy services.• Scholarships: scholarships are providedthrough Delcan of Canada and StewartScott International of South Africa toenable promising students to completecourses in engineering and applied sciences.• DHV assisted an orphanage in Shanghai,China, providing project management forrenovation.In South Africa, ongoing commitment tocommunity development is demonstratedby an approach in which large projects aredivided into smaller components which canbe undertaken by the local population. Thisserves to strengthen the local economywhile also ensuring that the overall projectis completed.PlanetThere are two ways in which DHV’s workhas an impact on the environment. Themore significant of these is the way inwhich it conducts projects on behalf of clients.For example, the design of a new watertreatment plant which will meet strictereffluent requirements has obvious positiveDHVSOS-KinderdorpenThe Future 500Following the tsunami in south-east Asia,DHV staff donated 420 days’ holiday entitlementto help the reconstruction efforts inAceh, Indonesia, and on the coastal islandof Nias.Steward Scott International supplies technicalassistance to all SOS Kinderdorpen inSouthern Africa.In China, DHV has earned a place on theFuture 500 list of companies which areseen to be actively promoting the greeneconomy.18 Executive Board Report

2006 and beyondDHV operates based on the concept of‘Local Delivery of Global Solutions’: a localpresence in the most important marketsin order to make the company’s leadingexpertise available exactly where it is requiredby the client. During the year underreview, DHV devoted considerable attentionto rendering the organization moreflexible, to knowledge management andto the efficiency and market-orientation ofthe international network. These aspectswill continue to be developed in the yearsto come.Opportunities for DHV are to be seen inmany fields of endeavor and in many countries.There is a demonstrable demand forthe Group’s expertise and for the innovationswhich DHV develops. Today morethan ever before, the challenge facing DHVis to convert these opportunities into actualprojects.In practice, DHV wishes to achieve:• Growth of 10% in line with the long-termfinancial objectives: average growth inturnover of approximately 10% (half ofwhich will be achieved through acquisitions),with an operating margin of 7%on added value. It will do so by means of:- better budget discipline- limitation of project losses- further implementation of the ‘onecompanyconcept’ (to include outsourcingof ICT activities and furtherdevelopment of shared services)- greater emphasis on client-orientationand internal efficiency.• The process of internationalization willbe continued in line with the targetfor 2009 – deriving 60% of turnover incountries other than the Netherlands– through undertaking a greater numberof activities in fewer countries.• Reinforcing the innovative strength ofthe company, by encouraging developmentsand making manpower and resourcesavailable.Economic outlookThe developments of the coming yearswill be determined by a number of globaltrends. The most significant will be a shiftin the major centers of economic activity.Growth in Asia, and to a lesser extent inthe Middle East and Africa, is important.Energy, environment and safety are importantthemes. Both in the west and inthe emerging economies, there is likely tobe increasing demand for new solutionsin the sphere of public services. There willbe a substantially greater demand forraw materials and for water, as well as fornew methods and systems for production,transport and distribution.Increasingly, knowledge-intensive companiessuch as DHV will be forced to seekstaff on the international labor markets,where the supply of suitably qualifiedpeople is greatest.In the shorter term, there will be substantialgrowth in international investments.The European economy is now showingsigns of recovery, while growth in NorthAmerica remains constant. Investments inAsia are still at a very high level, while Africaseems to offer good opportunities. TheMiddle East is showing significant activity.Market growth in Central Europe is expectedto continue. However, the EuropeanUnion currently shows a lack of clear direction,while the Netherlands itself is stillsomewhat cautious.DHV is partly dependent on governmentinvestment. In the Netherlands, the investmentlevel remains relatively low, althoughnew possibilities may be seen to be emerging.Private sector investment levels areincreasing, and DHV will continue to followthe large multinational clients.Alongside opportunities come risks. Theseare largely due to the speed of the changesall around us and the level of alertnessthat is required to address such changeseffectively. Economy recovery in the Westremains fragile; stock exchanges are stillsomewhat volatile and markets are heavilydependent on local events.Objectives for 2006: to increase flexibilityand awareness. There will be greater focuson the synergy of global expertise and localpresence.MarketsThere is growing international demand forservices in the wide arena which includesroads and highways, railways, harboursand airports: from high-level consultancyto construction supervision. The introductionof new and extremely large airlinerswill produce additional demand for airportmodernization projects.DHV has now established a very respectableposition in this market. Its expertiseis ranked very highly, being among the topfive companies worldwide in the field of IntelligentTransport Systems, and among thetop ten in harbor development. Its positionin highways and railways falls just outsidethe top ten. Efforts will be made to improvethese positions further in the coming years.In many parts of the world, safety and securityrequirements have been made morestringent, whereupon there is also increasingdemand for services in this field. Thedevelopment of control systems for stationsand airports will continue unabated.Almost everywhere, there is growing dependencyon water. The demand for puredrinking water and purified waste water isincreasing. Reliable and manageable solutionsare sought, particularly in the largeurban areas. DHV offers internationallyrecognized expertise in various water treatmenttechnologies, such as Carrousel®,MBR and Nereda TM . DHV is among the topten companies worldwide in the field ofwater treatment, and among the top fivein drinking water supply. The objective is toconsolidate and build upon these excellentpositions.Demand is also growing in the area of assetmanagement and park management.Here too, DHV intends to establish a strongposition.The natural disasters of recent times, inboth Asia and the United States, causedunimaginable devastation. Reconstructionwork, as well as the development ofmeasures to preclude such dramatic consequencesin future, make significant demandson the expertise of the engineeringindustry as a whole, and in some cases onthat of DHV itself. There are, for example,20 Executive Board Report

opportunities to develop our strong profilein coastal defenses yet further.In North America, the market remainsstrong. The Public Private Partnership hasproven itself a successful approach in manyprestigious projects. Here too, DHV hasvaluable expertise which can be deployedto exploit the opportunities to the full.Asia continues to show unbridled growthin many markets, including environmentalactivities. At the same time however, thelimited absorption capacity of clients canlead to restrictions and project delays. DHVwishes to strengthen its position in theregion, an ambition that will require bothfocus and a carefully considered approach.This may entail winding down activitiesthat no longer address the group’s objectives.In Europe, demand is greatest in the areasof mobility and transportation, safety andspace utilizations (spatial design, infrastructure,drainage systems, etc.), all withina setting of increasing legislation and control.Environmental management requirements,such as those designed to addressair pollution, will create new demand interms of both technology and the interpretationof legislation.In Africa, demand is growing in all the mainmarket fields: transport, water, environmentand aviation. The enhanced positionof Stewart Scott International and optimumuse of the international DHV networkwill enable the Group to take full advantageof this growth.In the Middle East, opportunities could wellbe presented by a number of new investmentprograms currently in preparation.Objectives for 2006:• Increase focus on specific countries,regions and areas of expertise. Strengtheningof the DHV Group’s position inEurope, which may entail one or more acquisitions.Strengthening of the positionin North America; investments in organicgrowth in Asia; further development ofthe position in Africa.• Capitalize on knowledge of logistic flows,particularly with regard to traffic managementand airports.• Make full use of the combination of technicalexpertise with that in financing andmanagement to secure involvement inlarge-scale projects, particularly those inthe public-private arena.OrganizationThe DHV organization is structured in sucha way as to promote and facilitate cooperationbetween all staff and units, therebymaking best possible use of the company’sresources. Knowledge management, efficiencyand client-orientation will continueto enjoy attention in the years ahead. Thefurther development of the ‘one-companyconcept’ also forms part of this process.The DHV Global Engineering Center in Indiawill be further expanded, eventually havingsome 150 staff. This process will alsodemand due supervision.The relevant risks are largely to be seen interms of the negative effects of conflictingdevelopments: rapid changes demandgreat flexibility on the part of people andthe organization, but not all staff are ableto follow those changes. Moreover, an emphasison efficiency could, if taken too far,impair both the innovative ability and theflexibility of the company.Objectives for 2006:• Achieve greater diversity, supported byan active management developmentpolicy.• Raise production capacity and the capacityutilization rate to the required level;increase flexibility.• Increase productivity.• More emphasis on training.• Make use of each staff member’s specificknowledge and experience in addressingthe changing market demand.• Positioning on the employment marketsof the various countries and regions inorder to ensure the company’s attractivenessas an employer.During the course of 2006, the developmentsdescribed above are likely to assistDHV in making significant progress towardsachieving its longer-term objectives.In particularly, increased efficiency anda prompt response to the opportunitiespresented by the market will lead to profitrecovery.The anticipated growth will lead to a slightincrease in the number of employees.Any acquisitions can be financed using theexisting facilities. No significant investmentsin tangible fixed assets are plannedfor 2006.The market is challenging and it is competitive.If client-orientation and internalefficiency can be combined effectively, DHVwill be able to rise to any challenge. Thecompany’s innovative strength is derivedfrom its staff. The market has indicatedthat our innovative strength is appropriateto demand, and is highly appreciated. Thisgives us great confidence in the future.The Executive Board wishes to thank allstaff for their commitment and efforts.Amersfoort, 2 March 2006Renko G. Campen (President)Bertrand M. van EeExecutive Board Report21

Report from the Supervisory BoardPreliminary recommendation tothe Annual General Meeting ofShareholdersIt is with great pleasure that we presentthe DHV Group Annual Report for 2005.The annual accounts have been preparedby the Executive Board, audited by PricewaterhouseCoopersAccountants of Utrecht,the Netherlands, and signed by ourselvesfollowing discussion with the ExecutiveBoard and the auditor.The Executive Board has proposed that acash dividend in the amount of € 0.25 pershare certificate should be paid from theprofits for the year (2004: € 0.30). We arehappy to support this proposal.We recommend that the Annual GeneralMeeting should approve the annual accountsfor 2005, together with the dividendproposal incorporated therein. Wefurther request that you give discharge tothe Executive Board from liability for theirmanagement, and to the members of theSupervisory Board for their supervision duringthe 2005 financial year.Report 2005During the year under review, the SupervisoryBoard convened with the ExecutiveBoard on six occasions. The Finance& Control Director was also present. Allsupervisory directors maintained a goodattendance record. In addition to thesemeetings, there was regular consultationbetween the Chairman of the SupervisoryBoard and the President of the ExecutiveBoard concerning ongoing matters.A number of meetings considered theDHV Group’s strategy for the longer term.Discussions were based in part on theCorporate Policy Paper, which sets out thePhoto’s: Wil GroenhuijsenH. Zwarts (Chairman)Hans Zwarts (b. 1940, Dutch)is Chairman of the AmsterdamChamber of Commerce. Heholds a number of appointments,of which the mostnotable include membershipof the supervisory boards ofNuon, NS (Dutch Railways), SduPublishers and Raet. He is alsoPresident of the Dutch TradeBoard.Mr Zwarts joined the DHV SupervisoryBoard in 1995 and hasbeen its chairman since 1996.His current term of office willexpire in 2007.J.H.M. LindenberghHessel Lindenbergh (b. 1943,Dutch) is a member of theSupervisory Board of the Universityof Amsterdam. He isalso Chairman of the Board ofthe Dutch-German Chamberof Commerce, and sits on thesupervisory boards of the Bankfor the Construction Industry,Gamma Holding, Royal Numico,Ortec International, PetroplusInternational and the ZeemanGroup. He also chairs the supervisoryboards of NIB Capital andSpyker Cars.Mr Lindenbergh joined the DHVSupervisory Board in 2003. Hiscurrent term of office will expirein 2007.A.B.M. van der PlasSeen van der Plas (b. 1938,Dutch) is chairman of theSupervisory Board of the NetherlandsResearch School forTransport, Infrastructure andLogistics (TRAIL) at Delft Universityof Technology, Chairman ofthe Safety Advisory Committeeof Amsterdam Airport Schiphol,a member of the supervisoryboards of Rijnmond Waste Processing(AVR) and the BlijdorpZoological Gardens, and is atrustee of the Rotterdam PhilharmonicOrchestra.Mr Van der Plas joined the DHVSupervisory Board in 1998. Hiscurrent term of office will expirein 2006.A.P.M. van der PoelArthur van der Poel (b. 1948,Dutch) is chairman of thepan-European MEDEA+ (MicroElectronics Development forEuropean Applications) R&Dprogram, and sits on the supervisoryboards of ASML, Axaltoand the Dutch soccer club PSV.Mr Van der Poel joined the DHVSupervisory Board in 2004. Hiscurrent term of office will expirein 2008.22 Report from the Supervisory Board

corporate objectives, strategy and attendantrisks.During the year, the Supervisory Board devotedparticular attention to the strategicpositioning of DHV, measures intendedto ameliorate the disappointing results,the concentration of companies in theNetherlands, corporate integrity, and thefar-reaching consequences of new socialsecurity legislation in the Netherlandscovering pensions and health insurancecontributions.As in previous years, the Supervisory Boardmet with the Director of Human Resourcesto assess the suitability of internal candidatesfor senior management positions.The accountant attended those meetingsat which the half-yearly and annual figureswere discussed.In 2005, the Supervisory Board appointedan Audit Committee, its members beingMessrs Lindenbergh and Van der Plas. Thiscommittee held two meetings during theyear under review, the first of which wasprimarily concerned with the ratificationof its own standing orders and an assessmentof the half-yearly figures. The secondmeeting was attended by the accountantand discussed the first report for 2005.In future, the Audit Committee will meetwith the accountant three times a year: inFebruary to discuss the annual accounts forthe preceding year, in August to discuss thehalf-yearly figures, and in December to discussthe budgets for the coming year.The standing orders of the Audit Committeehave been published on the corporatewebsite at www.dhv.com/code.On one occasion, the Supervisory Boardmet without the Executive Board in attendanceto discuss its own compositionand performance, the contributions of itsindividual members, and to review thecomposition of the Supervisory Board. Themeeting concluded that the compositionof the Supervisory Board remains appropriateand that its members possess therequired competencies. All members otherthan Mr Lindenbergh may be deemed to be‘independent’ within the meaning of bestpractice provision III.2.2 of the NetherlandsCode of Corporate Governance. Mr Lindenberghcannot be regarded as independentunder the definition applied by the Code,since in the year of his appointment to theSupervisory Board he was an executive directorof a banking institution with whichDHV maintains a business relationship.Mr Lindenbergh has been designated a‘financial expert’ further to provision III.3.2of the Code. Mr Van der Plas has been appointedDeputy Chairman of the SupervisoryBoard.In June 2005, Mr Van Miert stepped downfrom the Supervisory Board. The Boardthanks him for his significant contributionsand proposes Dr. W. van Vonno to fill theresulting vacancy.Further to the roster, Mr Van der Plas willstep down from the Supervisory Board atthe 2006 Annual General Meeting. He willbe proposed for reappointment for a furtherfour-year term.The composition of the Executive Boardwas also discussed at the closed meeting,as were the performance and remunerationof its members. The current Presidentof the Executive Board will step down bythe end of 2006. The Supervisory Board hasdecided to appoint Mr P.W. Besselink to theExecutive Board with effect from 3 April2006. This appointment will return theBoard to the appropriate strength forthe period ahead. It was agreed that themembers of the Executive Board possessthe required competencies and continueto perform to the fullest satisfaction of theSupervisory Board, both individually andcollectively. The remuneration policy forBoard members is set out in the RemunerationReport (see page 38).General operational aspects of the Groupwere discussed with the Central WorksCouncil on two occasions. The SupervisoryBoard considers these meetings to be extremelyworthwhile, the forthright andconstructive input of the Council representinga valuable aid to the Board’s deliberations.In 2005, members of the Supervisory Boardmade working visits to DHV Environmentand Transportation in Amersfoort, and toStewart Scott International in Cape Town,South Africa. Mr Van der Plas accompaniedthe Executive Board on a working visit toChina.The Supervisory Board wishes to thank allstaff for their ongoing commitment andeffort during the year under review.Amersfoort, 2 March 2006H. Zwarts (Chairman)J.H.M. LindenberghA.B.M. van der Plas (Deputy Chairman)A.P.M. van der PoelReport from the Supervisory Board23

Theme: InnovationWhether in water treatment, traffic management or the reduction ofCO 2 emissions, the demands of society and the market are becomingever more stringent. The world faces complex problems and must oftenturn to innovative technologies and ideas in order to arrive at breakthroughs.But innovation doesn’t just happen. First, there must be room for newideas to be formed. There must be the type of vision which enablesseveral seemingly unrelated problems to be addressed as one. Theremust be ongoing investment. Only then can true progress be made.The desire for innovation is firmly embedded within DHV. The manynew technologies and systems which it has developed over the yearshave earned the company an enviable international reputation.DHV offers its consultants and specialists the opportunity to combinecreativity and knowledge, and hence to arrive at new approaches andeffective solutions. The latest technological developments then gohand-in-hand with social developments and those in every other field ofhuman endeavor. In many cases, this results in sustainable solutions beingincorporated into the projects we undertake on behalf of our clients.Innovation – the development of new ideas which can then be implementedin a creative way – is not only important to our clients and tothe social setting, but is crucial to commercial success.24 Theme: innovation

“Look at it the other way round and let trafficcontrol traffic lights. That’s the revolutionthat is unfolding internationally”Joe Lam,Director Traffic Planning and Management“People like to live close to water. If theyare to do so in safety, we need new insightsand new solutions.”René Hopstaken,Project Manager and Structural Engineer“Cleaner water, with a smaller installationand at lower costs. This is something forwhich there is global demand.”Andreas Giesen,Innovation Manager, Water“Viewing topical issues in a new contextand combining existing solutions in a‘smart’ way: that is how you achieveunexpected breakthroughs.”Marjolein Demmers,Senior Partner, Sustainability“Compact airports which are run alongcommercial lines, and their development tobecome ‘airport living cities’: this is wherethe opportunities lie.”Hein Baijer,Senior Airport AdvisorTheme: innovation25

MobilityFor decades mobility issues used to be solved by enlarging the infrastructure.This approach appears to have reached its limit in the world’smajor conurbations. Shortage of space, more and more regulations andconcerns about air pollution necessitate a different approach throughthe optimum use of available infrastructure. Over the past twenty yearsthe Intelligent Transport System (ITS) has demonstrated that this is undoubtedlythe field where big gains are achievable. The challenges lie inimproving and integrating traffic management systems.“Look at it the other wayround and let traffic controltraffic lights. That’s therevolution that is unfoldinginternationally”Wil GroenhuijsenJoe Lam, Director Traffic Planning and ManagementCorbis26 Theme: innovation

Big gains through better use of infrastructure“Mobility - the quality of moving people and goods through oftendensely populated regions - is one of the decisive factors ina region’s economic vitality. Poor accessibility costs more thanjust time and money. So new solutions are necessary. Integratinginformation systems produces a better insight into traffic flowsand better information for users. Dividing lines between differenttechnologies are disappearing to make way for seamlessly interconnectedinformation systems for large, international regions.The Adaptive Traffic Signal Control Package developed by Delcan(DHV’s Canadian partner) is an example of the way forward. Thisnew system for controlling traffic lights constantly adapts to thetraffic load. The result is a better flow of traffic and less air pollution.The Federal Highways Administration in the United Statesexamined the benefits of adaptive control and decided to supportit if an easily implementable and cost-effective system is available.The Delcan system meets those requirements. It is based onwireless technology and a software platform that processes dataobtained from all kinds of different traffic sensors like loop detectors,infrared, video cameras, above-ground microwave detectorsand cell probes. This allows faster and cheaper installation of thesystem. What’s more, it is possible to connect and use existingmonitor systems.Cell probing is one of the latest technologies. Every active cellphone searches for and registers with the mobile phone network.Via that network it is possible to see where individual mobilephones are located and how they are moving along the road.This data is anonymous, but yields real-time information usablefor traffic management. Delcan is already using this cutting edgetechnology in and around Baltimore in the United States, andmore implementations are being planned elsewhere.Successful partnership forRotterdam Central StationDHV is involved in five of the six ‘keyprojects’ to develop the stations servingthe High Speed Rail Link. In many cases,we have taken on an unconventionalrole. For example, DHV’s consultants andconceptual designers were called upon toassist the team of architects responsiblefor designing Rotterdam’s new CentralStation. The resulting combination of aestheticcreativity and engineering expertiseresulted in an inspirational and innovativeconcept.Team CSIntegrated transport policy forthe Czech RepublicThe transport sector in the Czech Republichas seen substantial growth over the pastdecade, while the country’s recent accessionto the European Union has given riseto new requirements and obligations.A visionary national transport policy istherefore required. The Czech Ministry ofTransport has requested DHV to produceproposals for such a policy. DHV will offeran integrated solution which addressesnot only transport issues, but also environmentalaspects and ways to promoteregional development.DHVIn Beijing, DHV and Delcan are cooperating in the implementationof a traffic management system for effective control of thecity’s fast-growing traffic. As part of the preparations for theOlympic Games that will be held in Beijing in 2008, DHV and Delcanwill deliver a combined Incident Management System and DecisionSupport System to allow the police to assess the impact ofincidents faster and more accurately and take more effectivemeasures.Considerable synergy exists between DHV and Delcan. The expertiseand experience of the two companies add up to a strongcombination in which creativity, commitment and cooperationdrive innovation to meet market demands.”Black empowerment and a newhighway in Kwazulu-NatalStewart Scott International (SSI), DHV’sSouth African subsidiary, is working onthe new P700 Main Road between Ulundiand Richards Bay in the province of Kwa-Zulu-Natal. The project is a joint venturewith Ibhongo Consulting, in which thepartners are responsible for the design ofa 94-kilometer stretch of the highway andfor construction supervision. The projectis notable for its contribution to ‘blackeconomic empowerment’ and communitydevelopment in a previously isolatedregion. One of the conditions establishedfor the joint venture is that Ibhongo’s predominantlyblack staff will be trained andcoached by their SSI counterparts in orderto enhance the expertise of the company.SSITheme: innovation27

Building and ManufacturingBuilding in coastal areas and alongside rivers presents many specificchallenges. Rivers can burst their banks; hurricanes can cause devastatinginland flooding. Entire delta regions can become submerged. Waterseems to demand ever more space. New technologies are required toensure human safety near water, and to enhance the flexibility withwhich we can build.“People like to live close towater. If they are to do so insafety, we need new insightsand new solutions.”Wil GroenhuijsenRené Hopstaken, Project Manager and Structural EngineerJeroen Musch28 Theme: innovation

Building on the water“Areas with an abundance of water, such as the large delta regionsor those alongside the major rivers, often pose conflictingdemands. There must be more room for the water itself, so that itcan be contained during any period of flooding. At the same time,the demands of urban expansion must be addressed. As the likelihoodof flooding increases, so does the need for new technologies.‘Floating’ land for construction may therefore be seen as an importantdevelopment. In fact, the concept of living on water is notnew. We have all seen houseboats in various forms, while considerableexperience in building ‘floating homes’ has been gainedin both the Netherlands and Canada. In 2002, a new techniquewas used to create a floating exhibition pavilion at the Floriadehorticultural show in Haarlemmermeer (NL). That involved linkingfour floating thin-walled concrete platforms, but many more suchplatforms could be used. By joining them together, you create alarge area on which to build one or more superstructures. All sortsof uses are imaginable: a sports complex, an events centre or evenentire residential neighborhoods. In the Dutch province of Zeeland,for example, work is now in progress on a floating resort. In Budapest,DHV is involved in the development of a large floating hotelon the River Danube, which will alleviate the serious shortage oftourist accommodation in the city.DHV combines specialist knowledge in construction with thatin water management. The company can therefore offer a ‘totalpackage’ which includes all the facilities needed in this type ofproject. New construction land can be created without affectingthe water storage capacity of the area. The platforms can have atotal surface area of over one hectare. The technique used to interlinkthe platform sections will depend on the type of water featureinvolved (lake, river or sea), and the nature of the building to constructed.One remarkable design, produced by DHV in partnershipwith Waterstudio.nl, is for a floating tower, one hundred meterstall, in Dubai. The design and architecture allow for an even distributionof forces over the supporting platforms.Other countries, including India and Bangladesh, have expressedinterest in these techniques. There have also been enquiriesfrom the United States, where floating buildings could providean appropriate solution during the New Orleans reconstructionprogram. However, the technique does call for new productionmethods and, in some countries, new legislation since ‘movable’property (the traditional houseboat) must now be classified as ‘immovable’property. This is an entirely new development.”Compliance Audit Services for aCanadian mining companyFalconbridge is one of the largest miningcompanies in Canada. It now wishes tooptimize maintenance of selected assetsat its facilities in Canada, Chile, theDominican Republic and the USA. DHV’sCanadian partner Delcan is currently providingCompliance Audit Services (CAS) toFalconbridge, whereby the key objectivesare to sustain asset value and minimizerisks, both in Health & Safety and in commercialoperation. The assessment informationis stored in a customized projectdatabase which accepts entries in English,French and Spanish. The reports generatedduring the Compliance Assessments cantherefore be prepared in the languagespoken by the personnel responsible forimproving the Asset Management Systemat a specific site.FalconbridgeHi-tech nanotechnologybuildingA new nanotechnology research center iscurrently being built in Delft. Its extremelyadvanced facilities will be shared by theDelft University of Technology and theScientific Research Organization (TNO).The ‘hi-tech’ nature of the research to beconducted here gives rise to very high demandsin terms of temperature stability,cleanroom technology, vibration controland exclusion of electro-magnetic radiation.DHV is responsible for the externaland internal architecture of the building,together with the structural design,structural engineering, infrastructure, andconsultancy services in building physicsand acoustic engineering. In partnershipwith Deerns, DHV is also overseeing theconstruction work during project implementation.And all this to enable researchinto ‘nanostructures’ in units of one nanometer:the millionth part of a millimeter.DHVPhilips Innovation CampusShanghaiPhilips is setting up an ‘Innovation Campus’in Shanghai, China, at which the company’sChinese Research and Developmentactivities will be clustered. DHV producedthe Masterplan for the Philips InnovationCampus, which covers an area of 100,000square meters. Philips wishes to promotethe synergy between its various units,regarding coordination and open communicationbetween them as extremely important.This requirement has given rise toa design which incorporates atriums andopen work floors, with short walking distancesbetween departments. The officelayout can readily be adjusted in line withchanging organizational requirements.Theme: innovationRMJM29

WaterWater is poorly distributed across the world. Over two billion peoplehave inadequate (or no) access to clean drinking water. The world’sconsumption of water is increasing, while the standards which purifiedwater must meet are being made more stringent every year. In denselypopulated industrial and urban areas, there is not enough space to accommodateany major expansion of existing water treatment facilities.Smaller communities are unlikely to have the resources to purchase andoperate the required installations. However, innovation can offer someunexpected solutions.Andreas Giesen, Innovation Manager, Water“Cleaner water, with a smallerinstallation and at lower costs.This is something for whichthere is global demand.”Peter Essick/Getty ImagesWil Groenhuijsen30 Theme: innovation

New technology: a breakthrough in water treatment“The demand for purification and treatment of, both drinking waterand domestic or industrial wastewater, continues to rise. This isa global trend and in those regions in which water is scarce, reuseof water is essential if the demand is to be met. In Durban, SouthAfrica, DHV’s local subsidiary Stewart Scott International wasinvolved in the designed and construction of an installation to upgradedomestic wastewater into process water for a paper mill anda refinery. At Tel Aviv Airport, wastewater is treated and re-usedfor irrigation and as cooling water. Singapore is the world’s firstmajor city with a large-scale system to treat wastewater for re-useas drinking water, thus satisfying local demand more effectively.Such developments raise new, stringent requirements that canonly be addressed using new technologies and new systems. Thisis a field in which DHV has an extremely good reputation worldwide,with extensive experience in water treatment and purification.The company is also well known as developer and provider ofunique ‘total solutions’, such as the Carrousel® 2000, the Crystalactor®and the Nautilus TM membrane bioreactor.In 2005, a new breakthrough technology could be added to the list:Nereda TM , a wastewater treatment technique which uses aerobicsludge pellets. The footprint of the installation takes up only 25%of the space required by a conventional plant, yet produces waterof comparable or even better effluent quality. Moreover, it does soat significantly lower construction and operating costs. The technologyis therefore ideal for use in densely populated areas as wellas less capital intensive rural areas.Nereda TM was developed in partnership with Delft University ofTechnology, the Dutch Foundation for Applied Water Research(STOWA) and the Technology Foundation (STW). The technologyis expected to be in use as a new standard throughout the worldwithin a few years.Prince opens the Netherlands’first membrane bioreactorOn 3 May 2005, HRH Prince Willem-Alexander of the Netherlands openedthe country’s first membrane bioreactor(MBR) for the treatment of domestic wastewater in Varsseveld. The MBR representsa revolutionary innovation in wastewaterprocessing, taking up less space thanconventional alternatives and producingwater of higher quality.DHV was responsible for the design of theVarsseveld MBR and was closely involvedin its operationalization. The companyalso participated in the research programwhich sought to increase knowledge ofthe MBR technology and to devise theoptimum design principles for an MBRinstallation.Jan LieftinkInnovative water treatment forChinese industrial marketDHV is currently working on industrialwastewater treatment projects for threepaper mills in different Chinese provinces:Chengwu Paper Mill in Shandong, TigerPaper in Hunan and Dongya Paper inGuangxi. In two cases, DHV’s own Carrousel®technology is to be used in conjunctionwith an ABR TM Anti Bulking Reactor,resulting in the world’s first AB-Carrousel®unit. The innovative combination addressespotential problems with lightsludge and enhances the efficiency of theCarrousel®, whereby the overall energyconsumption of the treatment plant isreduced by some 20%.DHVNerada TM is an example of efficient innovations that are partand parcel of optimizing the entire water chain: from extractionand purification of drinking water, usage, discharge into drainagesystems, to treatment of the wastewater. To use and processwater more efficiently, DHV is seeking and finding the solutionsfor the future.”Unique PPP contract for drinkingwater supply in GhanaIn 2005, the consortium of Dutch watercompany Vitens and Rand Water, a largedrinking water supply company in SouthAfrica, was awarded an extensive contractto upgrade and operate drinking watersupply systems in Ghana, including thosein the major cities of Accra and Kumasi.This is the first overseas Public-PrivatePartnership in the water sector to involvea Dutch company. Preparations involvedsubstantial input from DHV and its SouthAfrican subsidiary Stewart Scott International,which will continue to assist theconsortium during the lifetime of theproject.CorbisTheme: innovation31

Spatial Planning andthe EnvironmentPoor air quality is a topical issue. In much of the Netherlands, and manyother countries besides, airborne particulates and other pollutants posea significant risk to public health. The environment is under pressure,and society now has higher demands in terms of the quality of the humanenvironment. The complexity of the problem calls for firm actionand broader perspectives. .Marjolein Demmers, Senior Partner, Sustainability“Viewing topical issues in anew context and combiningexisting solutions in a ‘smart’way: that is how you achieveunexpected breakthroughs.”Michiel WijnberghWil Groenhuijsen32 Theme: innovation

Air pollution calls for immediate measures andsustainable innovation“There is a direct relationship between the air we breathe andvarious societal aspects: the quality of the human environment,mobility, energy, industry and spatial planning, for example. Thereare several areas in Europe in which the concentration of airborneparticulates exceeds the EU norms. One of the main causes is roadtransport. For the sake of our health, as well as our ability to realizethe spatial plans of the future, measures to address the problemsmust be taken sooner rather than later. The use of particulatefilters would have an immediate effect on traffic pollution andshould be encouraged by governments. Perhaps freight transportshould even be banned in certain areas. In the longer term, the appropriateresponse entails incorporating sustainability into spatialplans and looking at ways to promote sustainable mobility. Boththe government and the private sector have an important part toplay.One company that has already taken action of its own accord is thelogistic service provider TNT. It decided to publish a ‘sustainabilityreport’ and called upon DHV’s assistance in doing so. We alsoconducted a study into opportunities for converting TNT’s fleet ofvehicles to use cleaner fuels, thus anticipating more stringent EUlegislation.Another topical air quality issue is the increase in the emissionsof greenhouse gases. DHV is investigating various means to reducesuch emissions, including finding new uses for the peatlandmeadow areas in the Netherlands. The proposed approach not onlysolves the problem of soil compaction and subsidence, but may alsopresent an answer to the economic decline currently experienced bythe agricultural sector. The key is to raise the water table; this haltsthe oxidization and compaction of the peat strata, thus reducingthe emission of CO 2 . The land can then be used for the productionof biomass in the form of, say, reeds, which can in turn be used toproduce environmentally friendly ‘green’ energy. The peatland areaswill undergo a metamorphosis and will make a significant contributionto the reduction of emissions. The plan represents a newway of thinking, with which DHV hopes to inspire stakeholders suchas dairy farmers, Staatsbosbeheer (the Dutch Forestry Department)and the Ministry of Agriculture, Nature and Food Quality to make agiant stride forward in the battle against greenhouse gas emissions.DHV seeks ‘smart’ combinations of solutions. Within project specifications,and sometimes on our own initiative, we try to place topicalissues within a new framework and to take a different perspective.This is how to force unexpected breakthroughs.”Innovation in water defenses Emissions trading in Bulgaria Eco-industrial Park in ChinaAn innovative solution which can be usedto strengthen water defenses such asdikes and embankments is the ‘ExpandingColumns’ approach. The technique is sustainable,space-saving and relatively inexpensive.A light boring machine pushesa hollow steel tube into the load-bearingsand strata under the embankment. Thetube has an outer plastic cover, which isthen filled with cement under high pressure.This creates a cylindrical foundationelement known as the ‘Expander’. Themovement caused in the soil actuallycompacts and strengthens it, and thusprovides greater support for the embankment.The Expanding Columns technologyhas been developed by the Delta Dikeconsortium, which includes DHV, BAMGrondtechniek, Fugro, GMB Infra Projecten,Arcadis and Van Oord Nederland.The project is part of the ‘Inside’ researchprogram run by Rijkswaterstaat.CURCorbisDHVDHV is assisting Bulgaria in preparing the The development of an Eco-IndustrialNational Allocation Plans for distributing Park (EIP) in Guangzhou Luogang District,CO 2 emission quota to energy-intensive China, represents an innovative projectindustrial companies. Bulgaria will then be with a high ‘sustainability factor’. On theable to comply with the European directivescovering the CO 2 emission trading become another’s raw materials. DHV22.2 km 2 site, one company’s waste willsystem. DHV consultants were invited is conducting a strategic study for the‘behind the scenes’ to examine Bulgarian project, the challenge being to combineindustry in some detail, placing them in a state-of-the-art expertise in the fields ofunique position of trust. DHV is also providingtraining to environmental officials waste processing. DHV is undertaking thisindustry, environment, energy, water andand other stakeholders, and is advising on project in partnership with Sun Yat-Senthe amendments to national laws required University, Guangzhou.to bring them into line with European legislation.DHV is conducting the project inassociation with KPMG Management Consultantsand various local partners. Theproject is part of the Dutch government’spre-accession program which will assistpublic sector organizations in Central andEastern Europe to bring about the reformsrequired if they are to join the EU.Theme: innovation33

AviationOver the next two decades, global air traffic is expected to increase byan average of five per cent per annum. Airports will have to accommodatethat growth, while also responding to major new developmentssuch as rapid, far-reaching changes within air carrier alliances and theintroduction of new ‘super-airliners’. Increasingly, airports must operateas a commercial business rather than as a public amenity, and mustredefine and expand their role in the urban environment. Enormouspotential exists: the challenge lies in identifying and exploiting that potential.Wil GroenhuijsenHein Baijer, Senior Airport Advisor“Compact airports which arerun along commercial lines,and their development to become‘airport living cities’: thisis where the opportunities lie.”ANP/KINA34 Theme: innovation

Hidden gold at the airport“Airports face developments which can already be seen worldwide.The introduction of new, extremely large ‘super-airliners’ and theongoing growth in air traffic require airports to adapt their facilitiesand infrastructure. By virtue of its unparalleled experience anda unique vision of optimum airport design, DHV subsidiary NACOcan find solutions which often remain hidden to others.NACO bases much of its work on the concept of the ‘compact airport’.Its services are designed to help the airport conduct its corebusiness as efficiently and effectively as possible. That demandsa combination of good design skills, a sound financial-economicconcept, and knowledge of the relevant administrative aspects.NACO begins by resolving capacity problems through better useof the existing facilities. Buildings and infrastructure are designedand planned as part of a fully coordinated whole, enabling maximumefficiency of logistics and handling. For Frankfurt Airport, forexample, NACO produced an ingenious design for the conversionand development of existing facilities. It includes the modificationsneeded to accommodate the new Airbus A380 and to allowa significant increase in passenger capacity, without going beyondthe airport’s existing boundaries.The role of airports is also changing. They are no longer merelya ‘plane station’, but function as the beating heart of an entireregion. They attract other forms of economic and commercial activity.They have their own retail centers. Hotels, restaurants andsuchlike are keen to start business within or close to the airport.The result is a new center of travel, work and relaxation, withneighboring towns eager to have good access to these new centersof activity.The time has come for airports to take a more proactive role intheir transformation into fully developed ‘airport living cities’,with all the amenities usually associated with large urban centers.This demands a more innovative approach, not only on the partof the airports themselves, but also by the relevant regulatoryauthorities. NACO’s strength lies in the combination of practicalexperience and innovative vision with regard to ‘compact airports’and ‘airport living cities’. And that strength is now being tappedby many enterprising airports in order to make the best possibleuse of their potential, which has to date, often remained unrecognized.They do so not only in their own commercial interests,but also to promote socio-economic development throughout theregion.”Shanghai International AirportDHV subsidiary NACO, the local DHV officein Shanghai, and Districon ManagementConsultants have joined forces to plan anddesign Pudong International Airport LogisticPark in Shanghai. The project includesa full market analysis, a logistics concept,a planning strategy and the elaborationof that strategy to form the conceptualdesign. The added value of DHV’s partnershipwith Districon can be seen in the synergybetween the two companies: NACOspecializes in airport planning and design,while Districon is able to offer extensiveexpertise in logistics and distribution, witha strong focus on air cargo logistics.Modern contract form forMoscow Airport projectA third terminal with a capacity of ninemillion passengers a year is to be built atMoscow’s Sheremetyevo InternationalAirport. The project is being led by theTurkish contractor ENKA, under a modern‘Design & Build’ contract which doesnot observe the traditional distinctionbetween designer and constructor. Theresponsibility for both processes – designand construction – falls entirely to thecontractor. ENKA has retained NACO toprovide advice and consultancy serviceswith regard to all airport-specific aspectsof the design. NACO’s position in the projectis therefore also substantially differentfrom its traditional role.NACONACOExpansion of JohannesburgInternational AirportThe joint venture between DHV subsidiariesNACO and Stewart Scott Internationalhas created the largest airport consultancyon the African continent. This prominentposition has led to the acquisition of airportdevelopment projects in Kenya, Botswanaand Liberia, as well as the contractto update the masterplan for JohannesburgInternational Airport, further to therequired increase in capacity.ACSATheme: innovation35

Corporate GovernanceThe Executive Board and the Supervisory Board of DHV Holding B.V.aim to comply with the principles and best practices of the NetherlandsCode of Corporate Governance, which forms the basis for their conduct.ComplianceThe Executive Board and Supervisory Boardof DHV are jointly responsible for compliancewith the Code, as it applies to DHVHolding B.V. as a closed, unlisted company.There are some instances in which theCode can not be considered directly applicableto DHV and in which exceptionsare therefore made. The reasons are givenbelow.The company reserves the right to amendany of the adopted standpoints and todeviate from any of the voluntary provisionsof the Code. Every instance in whichit is decided not to observe the strict letterof the Code will be reported to the AnnualGeneral Meeting of Shareholders, with fullreasons being given. If changes to the currentsituation result in further provisionsof the Code becoming applicable to DHV,the company will make its position knownto the Annual General Meeting of Shareholders.The Executive BoardThe management of the DHV Group falls tothe Executive Board, which is responsiblefor such matters as formulating and implementingthe corporate objectives, strategyand policy. It is therefore also accountablefor the financial results. The ExecutiveBoard ensures that the DHV Group appliesan appropriate system of risk managementand internal auditing (see page 40: Risksand Risk Management).Information concerning the remunerationof the Executive Board is given on page 38.Information about the composition of theExecutive Board is given on page 4.The Supervisory BoardThe Supervisory Board oversees the generalcourse of the company’s operations andoverall policy, and monitors the performanceof the Executive Board. In 2005, theSupervisory Board appointed a separateAudit Committee (see page 22: Report fromthe Supervisory Board).Information concerning the remunerationpayable to the Supervisory Board may befound on page 38. Information about thecomposition of the Supervisory Board isgiven on page 22.Annual General Meeting ofShareholdersDHV is a large closed corporation to whichthe full ‘structure regime’ is applicable.The Annual General Meeting appointsthe external accountant, approves theannual accounts, appoints the membersof the Supervisory Board, and establishesthe remuneration payable to both the SupervisoryBoard and the Executive Board.Appointments to the Executive Board aremade by the Supervisory Board, which alsohas the authority to dismiss any memberin the event of poor performance. Furtherinformation concerning the shareholders isgiven on page 39: Shareholding structure.Financial reportingThe Executive Board is responsible for thequality and completeness of the publishedfinancial reports, which are produced underthe supervision of the Supervisory Boardand the Audit Committee. Strict internalprocedures are in place with regard to theproduction and publication of the annualaccounts, the half-yearly figures and anyincidental announcements of a financialnature. These procedures are also subjectto the scrutiny of the Supervisory Board.The external accountant attends the AnnualGeneral Meeting of Shareholders atwhich the annual accounts are approved.In 2005, an internal auditing organizationwas instituted under the responsibility ofthe Executive Board.36 Corporate Governance

Exceptions to the principles andbest practice provisionsDHV endorses the principles stated in sectionsI, II, III and V of the Code. However, ithas been decided to deviate from the Codeon the following points:• Best practice provision II.2.7 (the maximumremuneration in the event ofdismissal): under the agreements madewith executive directors appointed after9 December 2003, the amount of anyseverance payment is limited to theequivalent of one year’s (fixed) salaryplus the average of variable emolumentsthroughout the period of service.• Principle III.5 (three key committees):since all Supervisory Board members areclosely involved in the relevant issues, ithas been decided not to appoint separateremuneration and selection committees.• Principle IV (the general meeting ofshareholders): DHV is a closed corporationwith only four legal entities as shareholders.Specific provisions to ensure thegreatest possible participation of thoseshareholders in the corporation’s decision-makingprocesses are not thereforerequired. Similarly, arrangements forpostal ballots and communication withshareholders are not relevant since theDHV Group has adequate procedures forthese matters.• Best practice provisions IV.1.1 (no statutorytwo-tier status), IV.1.2 (voting righton financing preference shares), IV.1.3(private bid) and IV.1.7 (registration date)do not apply.Section IV.2 (the issue of depositaryreceipts for shares) is of limited applicability.The depositary receipts for sharesissued by the company are not listed onany stock exchange and can be held onlyby DHV employees.• Best practice provision IV.2.8 (proxies andbinding voting instructions) is observedwith regard to proxy votes, but the issuanceof voting instructions is not considerednecessary.• Section IV.3 (provision of informationto the general meeting of shareholders)is also of limited applicability. Financialinformation issued by DHV can not influencea decision to acquire or dispose ofshares or depositary receipts, other thanby DHV employees.• Best practice provision IV.3.1 (meetingswith analysts, presentations and pressconferences) is only partly applicable.DHV issues press releases regarding itsannual and half-yearly figures.• Best practice provisions IV.3.2 (analysts’reports and valuations), IV.3.4 (meetingswith analysts and investors), IV.3.7(shareholders’ circular) and IV.3.9 (antitakeovermeasures) are not applicable.• Principle IV.4 (responsibility of institutionalinvestors) is not applicable.Further information about DHV’s CorporateGovernance procedures, its internal Codeof Conduct, the ‘Whistleblower’ schemeand the standing orders of the Supervisoryand Executive Boards may be found atwww.dhv.com/code.Corporate Governance37

Remuneration reportThe Executive BoardThe remuneration policy applying to membersof the Executive Board requires theapproval of the Annual General Meeting ofShareholders. The policy seeks to providedirectors with a remuneration package thatallows the company to recruit and retainexecutive directors of appropriate qualityand ability. Each year, the Supervisory Boardreassesses the remuneration of ExecutiveBoard members against current marketnorms. The arrangements are also scrutinizedby Hay Management Consultantsonce every three years, the most recentassessment having taken place during theyear under review. Further to this assessment,the principle on which the remunerationstructure is based has been changedfrom ‘median -5%’ to ‘Q1’. This is consideredmore in keeping with the remunerationpackage recommended for companies inthe services sector. The executive directors’fixed salary was then found to be approximately25% below the recommended level.An account of the fixed salary, variableemoluments and pension contributionsmade by or on behalf of the members ofthe Executive Board is given on page 53.During the year under review, no extraordinarypayment was made to any companyofficer or former officer.Fixed salary The executive directors’ fixedsalary will be increased in two phases (2005and 2006) to bring it to the recommendedlevel identified by the independent review.This increase does not include any compensationfor inflation. Executive directors’ salarieswill be reviewed once again in 2007.Variable emoluments Variable emolumentsare directly related to performance, and tothe targets established annually by the SupervisoryBoard:• The achievement of the profit (margin)target during the accounting year• Development and attainment of strategicobjectives• Implementation and compliance withthe corporate integrity system• Attainment of personal targets.This system provides a balanced combinationof short-term and longer-term objectives(the attainment of which can be38 Remuneration reportmeasured relatively easily), representing anadequate incentive to performance.To establish whether the targets haveindeed been met, the Supervisory Boardexamines the results achieved (against thefinancial targets), the proposed strategyand the measures taken to implement thatstrategy. The targets are based in part onthe results and objectives of comparablefirms such as Arcadis, Grontmij, Royal Haskoningand Witteveen+Bos. The ratio of thevariable remuneration component to thefixed salary is 1:4. The Supervisory Boardprefers a relatively modest variable remunerationcomponent, believing that thissufficiently ensures the loyalty of ExecutiveBoard members, both to DHV and to its corporateobjectives.An increase from 25% to 35% has beenagreed for 2006. In view of the disappointingresults for 2005, no variable emolumentis to be paid with respect to the yearunder review.Pension The pension scheme for ExecutiveBoard members is identical to that for allother employees. The pensionable age is65, with early retirement permitted fromthe age of 56. The current President of theExecutive Board is subject to the arrangementspreviously stated in the company’sstatutes, whereby he is required to stepdown from the Executive Board on reachingthe age of 60. Under the Legal StatusRegulation which applies to all employees,the company pays 71% of the pension contributionsfor Executive Board members(from 1 January 2006).Secondary conditions of employment Withregard to secondary conditions of employment,the company generally follows theGeneral Conditions of Employment forthe highest job grades within DHV, plus aslightly higher fixed expenses allowanceand a more expensive company car (whichdoes not require any contribution on thepart of the employee).Under the DHV employee participationscheme, an Executive Board member mayacquire 1,000 depositary receipts for sharesin DHV Holding B.V. A personal loan notexceeding € 4,600 may be extended tofinance such acquisition. The companydoes not provide any other personal loans,advances or guarantees to Executive Boardmembers. The conditions applying to anexecutive director’s acquisition of sharesor share certificates in DHV Holding B.V.remained unaltered in 2005.Contracts with executive directors ExecutiveBoard members appointed since 9December 2003 hold contracts for a termof four years. In the event of dismissal,these contracts provide for a severancepayment in the amount of one year’s fixedsalary and the average of the variableemoluments. The current President of theExecutive Board was appointed prior to 9December 2003. His contract is thereforewithout limit of time and provides for aseverance payment linked to the numberof years of service. These arrangements arein line with the national employment legislationin place at the time of the appointment.Any premature termination of thecontract of employment is subject to sixmonths’ notice on the part of the employerand three months’ notice on the part of theBoard member.The Supervisory BoardThe amount of the remuneration payableto members of the Supervisory Board isestablished by the Annual General Meetingof Shareholders and is not related tothe results attained by DHV. Supervisorydirectors are not eligible to aquire sharesor depositary receipts in DHV Holding B.V.,and DHV does not extend personal loans,guarantees or similar financial instrumentsto the directors.The remuneration paid to the Supervisorydirectors is also subject to a three-yearlyreview by Hay Management Consultants,based on a comparison with the remunerationoffered by organizations of a similarsize (the median principle). The most recentreview was conducted in 2005. As a result,the remuneration payable to the Chairmanof the Supervisory Board and to the membersof the Audit Committee was increasedby 8%. That payable to other members ofthe Supervisory Board remained unaltered.A full account of the payments made tothe individual members of the SupervisoryBoard in 2005 is given on page 53.

Shareholding structureAll shares in DHV Holding B.V. are held byfour foundations, as listed and describedalongside. The shareholding structure tracesits origins to an agreement made in 1977,whereby it was decided that capital shouldbe jointly controlled by management (theSupervisory and Executive Boards) and labor(the Central Works Council).Originally, the Executive Board, the SupervisoryBoard and the Central Works Councilformed the sole shareholder, knownas Stichting DHV (the DHV Foundation).With a view to achieving full openness ofgovernance, it was decided in 1998 thatthe governing board of the DHV Foundationshould comprise (for the most part)independent appointees. In order to ensurethat management and labor remained involvedin any substantial alteration to theactual shareholding structure, the StichtingPrioriteit DHV (DHV Priority Foundation)was then established. Its governing boardcomprises representatives of the originalparties.Stichting Administratiekantoor DHVMedewerkersaandelen (Employee ShareOwnership Trust Office Foundation) administersthe depositary receipts of sharesissued to members of staff, while theStichting Pensioenfonds DHV (DHV PensionFund Foundation) holds cumulative preferentialshares issued in redemption of adeferred loan from the pension fund.Stichting DHV (DHV Foundation)Purpose: to manage A shares in DHV Holding.Governing board:1. J.C. Blankert (Chairman), appointed by 2+3+4+52. H.H.F. Wijffels, appointed by the EB/SB*3. M.P. van Gemund, appointed by the CWC*4. R. den Besten, appointed by 2+35. M. Minderhoud, appointed by 2+3This foundation holds 4,580,000 A shares, equivalent to 91% of the issued ordinary shares.Stichting Prioriteit DHV (DHV Priority Foundation)Purpose: to manage priority shares of DHV Holding.Governing board:1. F.H.J.J. Andriessen (Chairman), appointed by 2+3+4+52. A.B.M. van der Plas, appointed by the EB/SB3. R.G. Campen, appointed by the EB/SB4. J.A.M. Tromp, appointed by the CWC5. J.J. Schreuder, appointed by the CWCThis foundation holds one priority share in DHV Holding, carrying the right of prior approvalfor any resolution to issue or transfer shares in DHV Holding, to merge, to make apublic offering, to amend the articles of association and to dissolve DHV Holding, and alsoto amend the regulations of and dissolve the DHV Foundation and to dispose of A sharesheld by the DHV Foundation.Stichting Administratiekantoor DHV Medewerkersaandelen (EmployeeShare Ownership Trust Office Foundation)Purpose: to manage B shares in DHV Holding and to issue depositary receipts for shares toemployees of the DHV Group.Governing board:1. H. Braakensiek (Chairman)2. F.L. Barel3. J.M. van den HeuvelThe members of the governing board are appointed by the general meeting of certificateholders.This foundation holds 456,281 B shares, equivalent to 9% of the issued ordinary shares.Stichting Pensioenfonds DHV (DHV Pension Fund Foundation)Purpose: to provide pensions to employees of the DHV Group.Governing board:1. J.M. van Geest (Chairman), appointed by the EB2. B.M.L. Janssen-Crijns, appointed by the EB3. J.M.N. Tummers, appointed by the EB4. J. Krijgsman, appointed by fund members5. J.M. Janus, appointed by fund members6. G.J.P.J. Laseur, appointed by fund members7. J.W. Zweers, appointed by pensionersThis foundation holds 420,000 cumulative preference shares in DHV Holding, carrying theright to a dividend of € 263,760.* EB = Executive Board; SB = Supervisory Board; CWC = Central Works CouncilShareholding structure39

Risks and risk managementGeneralDHV strives to follow responsible decision-makingprocesses, whereby carefulconsideration is given to risks and risk management.Where possible and appropriate,operational risks are insured.DHV endorses the principles of the NetherlandsCode of Corporate Governance.Accordingly, 2005 saw the start of a systematicinventory and analysis of the risksand risk management procedures in place.A Business Control Framework is beingprepared, based on the recommendationsof the Committee of Sponsoring Organizationsof the Treadway Commission. Theexternal auditor assisted in the productionof this framework.RisksThe risks faced by DHV may be grouped underfour headings: market risks, operationalrisks, financial risks and other, miscellaneousrisks.Market risksEconomic circumstances can have a majorinfluence on the volume of work. An economicrecession can mean project delaysor cancellations. Activities in the privatesector are particularly vulnerable in thisregard.Similarly, activities in the public sector areparticularly sensitive to shifting politicalpriorities (both national and international),new appointments to central or local government,and new legislation, all of whichcall for modifications to long-term plansand ongoing projects.DHV is active in countries with limited politicalstability, either directly or throughinternationally funded contracts. However,the value of the activities in question doesnot exceed 5% of the overall turnover.Operational risks and claimsThe level of operational risk is largely determinedby the form of contract underwhich DHV provides its services. Significantdevelopments are now evident in this area.Increasingly, clients demand guaranteescovering supply and performance. Paymentfor time devoted to the project is subjectto a ceiling, or may take the form of a fixed‘lump sum’ payment. Clients, particularlythose in the public sector, can imposeunilateral contract terms intended to limittheir own liability. Also common are frameworkand cluster contracts which state thefees and conditions for the services and/orhours to be provided over a longer period,perhaps up to four years. Increasingly, theonly differentiating factor in any tenderingprocedure is now price.There is growing demand for solutionsin which the design and implementationof a project fall under one and the samecontract. A “total package” is required,often involving the input of several partiesworking in partnership, and sometimesincluding financing and operational managementfor a predetermined period. Oneexample is the integrated, or ‘Design, Build,Finance and Operate’, contract form. DHVis most likely to meet this contract formin the construction, industry and watermarkets. In many cases, services are offeredin association with third parties, wherebyDHV becomes responsible for design andconsultancy, while the project partnersundertake implementation, financing andmaintenance. Considerable costs can beincurred prior to the actual award of theseprojects.Other risks are to be seen in terms of theobligations entered into (in realizationand/or financing), the limited cover offeredby standard insurance policies, and thechanging roles of all parties within the newforms of partnership.In practice, operational risks can occur inthe following areas:Liability. Errors made in the implementationof projects, such as design faults orcalculation errors, failure to meet deadlines,or failure to comply with applicablelegislation.Project risks. Inaccurate estimates of thetime or costs involved, delays in projectimplementation, lack of timely communicationwith the client.Capacity risks. Under-capacity is a risk.Employment legislation in most countriesrenders it difficult or costly to reduce thestaffing level to match that of the availablework.Contracts with partners and outsourcing.Of the Group’s total turnover, 25% is derivedfrom work which has been outsourcedto our partners. DHV is thereforesensitive to the effects of late delivery orinadequate quality.Working capital. In most cases, services aresubject to subsequent invoicing. Duringproject implementation, there could besome dispute with regard to the punctualityand quality of the services, resulting indelayed payment.Accommodation. Accommodation costs arehigh, and are for the most part inescapabledue to long-term contracts. Shrinkage ofactivities and downsizing of staff numberscreates the risk of vacancy costs.At the end of 2005, DHV was involved in anumber of legal disputes. Any consequenceshave already been incorporated into theannual accounts in previous years.Financial risksExchange rate risks at project level are limited,since DHV strives to match income andexpenditure in the same currency. If thisis not feasible, the risks are hedged to thegreatest extent possible.Translation risks are relatively minor, andare therefore not hedged. The largest investmentoutside the Netherlands is DHV’sparticipating interest in Delcan of Canada.The level of short-term interesting-bearingliabilities is low, whereby the interest risk isalso limited. Long-term liabilities are subjectto fixed interest rates for several years.Since 2002, goodwill paid out has been capitalizedand will, in principle, be amortizedover a period of 20 years. Where the companiesacquired do not meet expectationsand the capatilized goodwill can no longerbe justified, an additional amortization willbe made.In 2005, the pension scheme with the greatestnumber of participants, administeredby the DHV Pension Fund Foundation, wasconverted from an average pay scheme toa collective ‘defined contribution’ scheme.This represents a substantial reduction of40 Risks and risk management

the risks to the company. Although involvingonly a small number of participantsand hence of limited extent, obligationsfurther to the ‘defined benefit’ pensionschemes have been included in the balancesheet as at 31 December 2005.The figures relating to tax obligationsincluded in the balance sheet are basedin part on estimates. It is possible that(substantial) differences will be seen whenthe final assessments are presented by theauthorities.Miscellaneous risksDoing business with integrity is importantto the reputation of a company, andhence to its income and profits. In order tomaintain the quality of DHV’s services, it isessential to recruit and retain staff of goodquality, and to do so in sufficient numbers.If quality and quantity are not at the requiredlevel, our reputation could suffer.This would in turn lead to a reduction incontract opportunities.Risk managementDHV applies a number of instruments tomanage and control risks.• Services are spread over various geographicareas and between various clientgroups, serving to reduce the marketrisks.• The rights and responsibilities of thevarious management levels within theorganization are precisely established bymeans of an ‘authorization matrix’.• The authorities have been defined in theGroup’s standing order with respect toundertaking major projects or enteringinto long-term obligations.• Directors and senior managers arerequired to sign a “Letter of Representation”,whereby they accept express responsibilityfor compliance with internalprocedures and external legislation.• A ‘Whistleblower’ scheme is in place toprotect any member of staff who reportsa (suspected) breach of the Code of Conductor other irregularity.• The Compliance Officer oversees observanceof the business principles throughoutthe organization.• In 2005, the first steps in creating an internalauditing department were taken.• Risk management relating to the acceptanceof projects is primarily undertakenat business group level. Each businessgroup must ensure that an adequatenumber of suitably qualified staff areavailable, must maintain the requiredlevel of expertise, and must compile andmaintain the necessary procedures. Suchmatters are accountable by means of thebusiness plans, quarterly reports, and(management) meetings.• A Tender Board exists to manage therisks of integrated, major or particularlyrisk-laden projects. This board advisesthe business groups and the ExecutiveBoard.• Professional and corporate liability risksfor the Dutch and main business unitsabroad are covered under Group insurancepolicies (which have a combinedown-risk excess of € 450,000 per year).• The holding company, the DHV Group’soverall management system and thoseof the operational business units are allcertified to ISO 9001:2000 standard. Thequality systems in place ensure structuredprocedures in tendering for andimplementing contracts, and provideguidelines for the retention of thirdpartyservices.• Expertise in Dutch construction law andits part in project acceptance and implementationis provided by the ConstructionLaw Steering Group.Management controlDHV has embedded performance planningand monitoring into the following procedures.• The long-term strategy is established bymeans of the Corporate Policy Paper. Thebusiness groups develop their mediumtermplans on the basis of this document.These plans are subject to annualreview. Progress is reported and discussedquarterly.• Reporting guidelines and formats areestablished in a Financial Manual that isupdated regularly.• Key information, including cash flow, isreported monthly. Frequent consultationis held between the Executive Board andthe directors of each business group.• Since mid-2005, the business group andregions controlers are directly reportingto the holding company. This proceduralamendment, together with the matrixstructure introduced on 1 January 2005,can already be seen to have improvedthe reporting and control structure.• The Executive Board meets with the SupervisoryBoard at least five times a yearto discuss strategy, results, risks and anyother matters that may arise.• The Supervisory Board consults with theexternal auditor at least twice a year.The auditor is appointed annually by theshareholders.• In 2005, the Supervisory Board appointedan Audit Committee from among its ownmembers. The Committee will overseecompliance with financial legislation,the quality of reporting procedures andproducts, and the efficacy of the internalcontrol systems.Risks and risk management41

Financial statements 2005Consolidated balance sheet after profit appropriationAssets(€ thousands)31-12-2005 31-12-2004Fixed assets(1)Intangible fixed assets14,35113,888(2)Tangible fixed assets36,44338,920(3)Financial fixed assets2,8472,19053,64154,998Current assets(4)Work in progress10,5516,291(5)Receivables63,03172,786Cash at bank and in hand10,1499,93983,73189,016137,372144,014Group equity and liabilities(€ thousands)31-12-2005 31-12-2004(6)Group equityShareholders' equity50,83049,337Minority interests51761551,34749,952(7)Provisions13,31411,741(8)Long-term liabilities19,00119,428(9)Current liabilities53,71062,893137,372144,01442 Financial statements 2005

Consolidated profit and loss account(€ thousands)2005 2004(10)Net turnover300,601294,118Movement in work in progress- 390- 3,760Total operating income300,211290,358Costs of work contracted out and other external chargesWages and salariesSocial security costsProfit sharingDepreciation of tangible fixed assetsOther operating expenses71,201130,37228,3551,4096,19456,39761,299124,20927,2721,9306,59959,562Operating expenses before goodwill amortization293,928280,871Operating profit before goodwill amortizationAmortization of goodwill6,283- 7509,487- 1,492Operating profit5,5337,995Interest incomeInterest expense871,7553551,980Net interest expense- 1,668- 1,625Profit on ordinary activities before taxation3,8656,370(11)Taxation- 388- 2,506Profit of non-consolidated participating interests233259Group profit after taxation3,7104,123Minority interests- 41- 54Net profit3,6694,069Financial statements 2005 43

Consolidated cash flow statement(€ thousands)2005 2004Cash flow from operating activitiesOperating profitDepreciation of tangible fixed assetsAmortization of intangible fixed assetsMovement in work in progressMovement in debtorsMovement in current liabilities5,5336,194750- 4,2609,755- 9,0587,9956,5991,492- 19,40611,3312,012Cash flow from business operations8,91410,023Net interest expenseMovement in provisionsTaxationDividendOther movements- 1,668- 1,357- 388- 401- 41- 1,6252,011- 2,506- 355- 54Total cash flow from operating activities5,0597,494Cash flow from investing activitiesAdditions to intangible fixed assetsAdditions to tangible fixed assetsDisposals of tangible fixed assetsInvestments in group companiesInvestmenst in non-consolidated participating interestsOther movementsCash flow from financing activitiesRepayments- 1,213- 3,913297- 18463780- 4,296- 427- 2,538- 9,6284,741- 580278- 60- 7,787- 1,508Total net cash flow336- 1,801(€ thousands)2005 2004Cash at bank and in hand less amounts owed to creditinstitutions at 1 January2,9414,742Cash at bank and in hand less amounts owed to creditinstitutions at 31 December3,2772,941Movement in cash position336- 1,80144 Financial statements 2005

Accounting policiesBasis of preparationThe consolidated financial statements have been prepared underthe historical cost convention.Basis of consolidationThe consolidated balance sheet and profit and loss accountinclude the financial data of DHV Holding BV and those groupcompanies in which DHV Holding BV has a direct or indirectcontrolling interest. The financial data of these companies areconsolidated in full, with minority interests being disclosedseparately in the consolidated balance sheet and profit and lossaccount. Joint ventures are consolidated proportionally, unlessthe financial interest is negligible. The results of participatinginterests are consolidated from the date of acquisition orincorporation until the date on which the unconditional decisionis taken to wind up such interests. Consolidated companies arevalued in accordance with uniform accounting policies. Results ofparticipating interests are consolidated up to the date on whichcontrol is transferred. The exemption referred to in section 403 (1)of Book 2 of the Netherlands Civil Code is applied to the financialstatements of most of the Dutch companies included in theconsolidated financial statements of DHV Holding BV.Foreign currency translationAssets and liabilities denominated in foreign currencies aretranslated at the exchange rates ruling at the balance sheetdate. Turnover, expenses and results included in the profit andloss accounts of foreign companies are also translated at theexchange rates ruling at the balance sheet date. Othertransactions in foreign currencies during the year under revieware translated at the rate ruling on the settlement date.Exchange differences are taken to the profit and loss account,except for exchange differences arising from the conversion ofthe net investment in a participating interest, which are takendirectly to reserves, net of taxes where necessary.Financial instrumentsDHV Holding B.V. hedges currency risks through the use offinancial instruments. In accordance with the treasury policy ofthe DHV Group, no financial instruments are held for tradingpurposes. Financial instruments are not disclosed in the balancesheet. Their fair value as disclosed in the notes is the forwardrate as at the balance sheet date.Changes in accounting policiesWith effect from 2005, DHV has recognised pension plans inaccordance with the provisions of Dutch Accounting Standard271. Where the defined benefit plans are concerned, this meansthat the balance sheet discloses the present value of the pensionobligation by virtue of the defined benefit plans net of the fairvalue of the plan assets and having regard to the past-servicecost attributable to the following financial years.Where the obligation exceeds that based on the accountingpolicies applied up until the previous year, the excess is chargedagainst equity, taking account of the relevant tax effects. Up toand including 2004, the contributions to all existing pensionplans were recognised in the income statement.Impact of changes in accounting policies(€ thousands)Shareholders’equityMinorityinterestGroupequityBalance at 1 January 200549,33761549,952Pension obligationsChanges in accounting policies- 4,184-- 4,184Taxation1,255-1,255Balance at 31 December 200546,40861547,023Financial statements 2005 45

Intangible fixed assetsThis item consists for the most part of goodwill. The goodwillpaid on the acquisition of participating interests is calculated asthe difference between the fair value ofthe assets and liabilities (determined in accordance with DHV’saccounting policies) and the cost of the acquired company. Ifapplicable, goodwill is translated into euros at the rate ruling atthe date of acquisition and is amortized over its expected usefuleconomic life, subject to a maximum of 20 years.On a yearly basis management reviews the goodwill for potentialimpairment.The other intangible fixed assets are costs related to owndeveloped software. This software is amortized over its expecteduseful economic life with a maximum of 5 years.Tangible fixed assetsTangible fixed assets are stated at cost, net of depreciation. Fixedassets produced by the company are carried at full absorptioncost, including labor costs.Depreciation is calculated using fixed percentages of cost, takinginto account the expected useful economic lives of the assetsand their estimated residual values.The estimated useful lives per category is:Land and buildings10-33 yearsOther fixed assets3-10 yearsAssets in course of construction3 yearsLand is not depreciated.ProvisionsProvisions are stated at face value. The provision for deferredtaxes relates to the face value of deferred tax liabilities resultingfrom temporary differences between the tax bases of assets andliabilities and their carrying amounts for financial reportingpurposes. In addition, the provision includes deferred tax assetsconnected with the provision for defined benefit plans. DHVoperates a number of defined benefit plans with a limitednumber of members. The pension obligation disclosed in thebalance sheet represents the present value of the pensionobligation net of the fair value of the plan assets. This is offsetagainst unrecognised actuarial gains and losses andunrecognised past-service cost. Independent actuaries calculatethe pension provision annually based on the projected unit creditmethod. The discounted cash flow analysis of the pensionobligation is based on interest rates applicable to high-qualitycorporate bonds whose term is more or less equal to that of thepension obligation. Actuarial gains and losses following changesin actuarial principles that exceed 10% of the higher of thepension obligation and the fair value of the plan assets at thebeginning of the year are recognised as income or expense overthe expected average remaining working lives of the employeesin question. Unless stated otherwise, the provisions are of a longtermnature.Other itemsThe other items are valuated against face value.Financial fixed assetsConsolidated participating interests and non-consolidatedparticipating interests over whose operating and financialpolicies the company exercises a significant influence are valuedat the company’s share of their net asset value. Net asset value isdetermined in accordance with the accounting policies set out inthese financial statements.Amounts owed by participating interests included underfinancial fixed assets are carried net of any provisions fordoubtful debts deemed necessary.Work in progressWork in progress are valuated at market value, net of provisionsfor known risks and expected losses on specific orders and net ofinstalments invoiced.ReceivablesDebtors are stated net of provisions for doubtful debts.46 Financial statements 2005

Net turnoverTurnover is stated net of discounts and value added taxes and isaccounted for in the year in which goods or services are delivered.Operating expensesExpenses and interest are allocated to the financial year to whichthey relate.Profit on ordersProfit on orders is calculated in accordance with the percentageof completion method. It includes profit on orders executedentirely for the company’s own account and risk and a share ofthe profit on orders executed together with partners. Whencalculating profit on orders, expected losses are charged in full tothe financial year.TaxationCorporate income tax is calculated on the basis of theregulations and tax rates applicable in the countries where theconsolidated companies are established.This item includes both taxes payable in the short term anddeferred taxes. Deferred tax assets on account of the carryforward tax losses, are recognized if it can be reasonablyassumed that the assets will be realized in due course.Notes to the consolidated financial statementsFixed assets1Intangible fixed assets(€ thousands)GoodwillOther intangiblefixed assetsTotalBalance at 1 January 2005Costs16,339-16,339Amortization2,451-2,451Book value13,888-13,888Movements in book valueAdditions1,0661471,213Amortization750-750Total movements316147463Balance at 31 December 2005Costs17,40514717,552Amortization3,201-3,201Book value14,20414714,351Financial statements 2005 47

2Tangible fixed assetsLand is stated at cost, being € 1,711,000. Based on a recent appraisal,the private sale of the buildings with vacant possession would yieldsome € 46 million.(€ thousands)Land and buildings Other fixed assets TotalBalance at 1 January 2005Purchase price40,35344,33484,687Depreciation- 14,511- 31,256- 45,767Book value25,84213,07838,920Movements in book valueAdditions2363,6773,913Disposals- 14- 283- 297Depreciation- 1,983- 4,211- 6,194Exchange differences1100101Re-allocation1,356- 1,3560Total movements- 404- 2,073- 2,477Balance at 31 December 2005Purchase price41,93346,47288,405Depreciation16,49535,46751,962Book value25,43811,00536,4433Financial fixed assets(€ thousands)31-12-2005 31-12-2004Participating interestsAmounts owed by participating interests2,3494981,9122782,8472,19048 Financial statements 2005

Participating interests(€ thousands)2005 2004Balance at 1 JanuaryMovement in consolidationInvestmentsDisposals and impairmentShare of profitsDividend distribution and other movements1,912-497- 6233- 2872,052- 103- 271259- 121Balance at 31 December2,3491,912Amounts owed by participating interests(€ thousands)2005 2004Balance at 1 JanuaryLoans grantedRepayments278220-34142- 105Balance at 31 December498278Current assets4Work in progress(€ thousands)31-12-2005 31-12-2004Balance of work in progressPayments on accountInvoiced in advance28,866- 5,277- 13,03829,253- 6,057- 16,90510,5516,2915Receivables(€ thousands)31-12-2005 31-12-2004DebtorsParticipating interestsOther receivablesPrepayments and accrued income55,4636363,4293,50363,0531,7905,4982,44563,03172,786Other receivables include loans to staff totaling € 1,183,000.The term of these loans is more than one year.Financial statements 2005 49

6Group equityFor details of the composition of and movements inshareholders’ equity, please refer to the notes to the companybalance sheet on pages 57-59.7Provisions(€ thousands)PensionsDeferedtaxationOtherTotalBalance at 1 January 20051842,0929,46511,741Provision defined benefit pension plans 1 January 20054,184- 1,255-2,929Amounts charged to the provision- 57- 32- 4,241- 4,330Additions charged to profit-3472,6272,974Balance at 31 December 20054,3111,1527,85113,314Provisions for deferred taxation and pensions are predominantlylong-term in nature.since DHV has decided to apply the relevant option offered byDutch Accounting Standard 271.PensionsMost of the Dutch defined pension plans are administered byStichting Pensioenfonds DHV. In 2005, the plan was convertedfrom an average-pay scheme into a group defined contributionplan. The contribution to this scheme paid to StichtingPensioenfonds DHV amounted to EUR 11.4 million in 2005.DHV introduced new accounting policies for the recognition andmeasurement of its pension obligation in 2005. A number ofsmaller defined benefit obligations are disclosed based on theaccounting policies described. The comparative figures for 2004have not been revised based on the new accounting policiesFor a breakdown of the pension obligation as at 31 December2005, reference is made to page 45. The measurement of thisobligation by virtue of the defined benefit plan in 2005 does notaffect cash flows for 2005. In addition to the aforementionedplans, DHV operates defined contribution plans both in andoutside the Netherlands.The pension obligation can be broken down as follows:(€ thousands)Position on1-1-2005Profit andloss accountCash andcashequivalentsEstimatedposition on31-12-2005Present value of pension obligation- 17,179- 1,615248- 18,546Fair value of plan assets12,99565972114,375Pension obligation- 4,184- 956969- 4,171Recognised actuarial gains and losses----Net pension obligation- 4,184- 956969- 4,17150 Financial statements 2005

The key actuarial principles are as follows:(as a %)2005Discount rateExpected return on investmentsExpected pension indexationExpected salary increases4,754,752,002,00In the pensionobligation in the balance sheet is also a provisionfor accumulated benefit obligation for personell of one of thegroupcompanies.OtherThe other provisions concern mainly liabilities for restructuring,social plans and claims.8Long-term liabilities(€ thousands)31-12-2005 31-12-2004Mortgage loanLease commitmentsOther10,4047,5301,06711,4167,53048219,00119,428The mortgage loan has a remaining term of 14 years and is beingrepaid in three-monthly installments. A fixed interest rate of4,79% is payable on an amount of € 5,427,000 until 1 April 2015for an amount of € 4,978,000 the interest percentage is 5,8%until 1 January 2010. The repayment for 2006 of € 281,000 hasnot been deducted from the principal.The mortgage loan is secured on real estate of DHV inAmersfoort, the Netherlands.The lease commitments have a term to 2018. A purchase optioncan be exercised in 2013. There is no repayment obligation beforethe end of the lease contract. The annual rate of interest up to2013 is 5.54%.9Current liabilities(€ thousands)31-12-2005 31-12-2004Amounts owed to credit institutionsTrade creditorsTaxation and social securityAmounts owed to participating interestsOther liabilitiesAccruals and deferred income6,87220,8542,70021916,0247,0416,99822,7816,37016916,9009,67553,71062,893Bank overdrafts and short-term loans have been contracted fromcredit institutions. No securities have been furnished except forpari passu clauses.Financial statements 2005 51

Commitments not disclosed in the balance sheetLong-term commitmentsFuture commitments under lease and rental agreements at 31December 2005 amounted to:(€ thousands)20062007200820092010Later yearsTotal9,2087,0355,6053,4882,0624,83032,228Forward exchange contractsAt 31 December 2005, DHV held exchange contracts with thecontract value of € 5,5 million.The real value amounts per 31 December 2005 to € 5,8 million.Guarantee commitmentsBanks have issued guarantees to third parties (banks and clients)totalling € 30.542,000 (2004: € 36.480.000. Of this amount,€ 17.734.000 (2004: 27.889.000) relates to clients outside theNetherlands. The guarantees concern mostly commitmentsarising from advance payments received from clients andcommitments concerning current tenders and projects.Tax risksBy virtue of its operations in various countries, DHV incursoperational and/or tax claims. Where their effect can bereasonably estimated, such claims are provided for as soon asthey arise. The existing provisions are considered sufficient tocover the potential consequences of pending claims.assuming joint and several liability for commitments arisingfrom the legal acts of the majority of its Dutch group companies.None of the group companies is involved in legal proceedings,either as a plaintiff or as a defendant that could significantlyaffect the group’s financial position.The company is obliged to grant loans to the Employee ShareOwnership Trust Foundation (Stichting AdministratiekantoorDHV Medewerkersaandelen), enabling the foundation torepurchase the depositary receipts for shares offered byemployees.A loan of € 1.7 million was granted to the foundation on 31December 2005. The repurchase price of the shares held byemployees at the balance sheet date amounted to € 2.3 million.Other commitmentsThe company has filed statements with the trade registries10Net turnoverGeographical spread of net turnover:(€ thousands)The NetherlandsEurope (excl. the Netherlands)North AmericaAsiaAfricaOther170,30356,59418,45231,29018,4535,5092005 2004(%)571961062170,75349,29115,22733,99717,2837,567(%)581751262300,601100294,11810052 Financial statements 2005

Restructuring costsOperating expenses include restructuring costs of € 1,970.000(2004: € 1.085.000). This amount relates mainly to wages andsalaries.WorkforceAt the end of 2005 DHV Holding BV and its group companiesemployed 3,762 people (2004: 3,867). In average fte’s this were3,574 (2004: 3,683), of which 1,545 (2004:1,503) stationed outsidethe Netherlands. The item social security costs includes anamount of € 12,036,000 (2004: € 11,746,000) in pension and earlyretirement costs.The geographical spread of the average work force is as follows:(in fulltime-equivalenten)2005The Netherlands2,029Europe (excl. the Netherlands)504North America188Asia650Africa20320042,1804751826501963,5743,683Remuneration of the Executive Board and the Supervisory BoardThe Supervisory Board determines the compensation of themembers of the Executive Board. In addition, the Executive Boardmembers are entitled to a monthly expense allowance, as well(in €)Fixed salary(incl socialcharges)VariableremunerationPensioncostsas to a company car. Furthermore, they receive a contributionir. R.G. Campen, President328,000-51,000towards group health insurance and telephone expenses.ir. B.M. van Ee299,000-45,000At year-end 2005, the two members of the Executive Board eachheld 1,000 depositary receipts for shares in the company. Thiscorresponds with the maximum interest that individualemployees are allowed to hold in the company. In accordancewith the employee participation scheme, a loan was granted inthe sum of EUR 2,830.The remuneration of the members of the Supervisory Board over2005 is as follows:(in €) 2005H. Zwarts, chairman32,500Ir. J.H.M. Lindenbergh27,500Prof. Dr. K.A.L.M. van Miert12,500Ir. A.B.M. van der Plas27,500Ir. A.P.M. van der Poel25,000Beside above-mentioned remuneration, all members of theSupervisory Board receive a monthly expense allowance. Noloans or advances were granted to the Supervisory Boardmembers. At year-end 2005, no Supervisory Board members heldany shares in the company.Mr. Van Miert was member of the Advisory Board untill 1 July2005Financial statements 2005 53

11TaxationThe tax burden for 2005 can be broken down as follows:(in %)2005 2004Applicable tax rate on profits 28,5 33,4Transparent participating interests - 0,4Tax relief facilities - 28,2 3,2Losses not accounted for 9,7 2,4The effective tax expense in 2005 was greatly affected by taxdeductibleliquidation losses suffered on IRIS N.V., a Belgiangroup company, and DHV International (UK) Ltd., a UK-basedgroup company. As a result of these liquidation losses, no Dutchcorporate income tax is due for 2005, as well as allowing a carrybackto prior years. The tax effects of the winding-up of foreigngroup companies are recognised as current liabilities.Effective rate 10,0 39,4Other information relating to financial instrumentsInterest rate riskNo financial instruments were employed in the 2005 financialyear to hedge the interest rate risk on net current assets andliabilities.Credit riskThe maximum credit risk for instruments included in the balancesheet at 31 December 2005 is equal to their net book value. Thereis virtually no concentration of credit risk.Fair value of financial assets and liabilitiesWith the exception of long-term liabilities, the fair value offinancial assets and liabilities is equal to their net book value.The fair value of long-term liabilities is approximately € 19.2million (2004: € 20.7 million).Related partiesThe following are related parties:• Stichting DHV (DHV Foundation);• Stichting Administratiekantoor DHV Medewerkersaandelen(Foundation for the Employee Share Ownership Trust Office);• Stichting Prioriteit DHV (DHV Priority Foundation).54 Financial statements 2005

Company balance sheet after profit appropriationAssets(€ thousands)31-12-2005 31-12-2004Fixed assets(12)Intangible fixed assets13,79613,570(13)Tangible fixed assets9723(14)Financial fixed assets68,63375,93982,52689,532Current assets(15)Subsidiary companies2,1292,118Other receivables4,681926Cash at bank and in hand5106,8153,05489,34192,586Liabilities(€ thousands)31-12-2005 31-12-2004(16)Shareholders' equity(16,1)Issued share capital546546(16,2)Share premium account6,1396,303(16,3)Reserve for translation differences relating to group companies- 60- 1,378(16,4)Statutory reserve for loans to shareholders8781,012(16,5)Statutory reserve for participating interests1,6281,680(16,6)Other reserves41,58541,037(16,7)Proposed dividend11413750,83049,337(17)Provisions9,1795,820(18)Current liabilitiesSubsidiary companies4311,415Other liabilities28,90136,01429,33237,42989,34192,586Financial statements 2005 55

Company profit and loss account(€ thousands)2005 2004Profit of participating interestsBalance of other income and expenses after taxation6,769- 3,10011,986- 7,917Net profit3,6694,069The company profit and loss account has been prepared inaccordance with the provisions of section 402 of Book 2 of theNetherlands Civil Code.Notes to the company balance sheetFixed assets12Intangible fixed assets (goodwill)(€ thousands)2005 2004Balance at 1 JanuaryAdditionsAmortization13,570976- 75012,4572,538- 1,425Balance at 31 December13,79613,570Accumulated amortizationOriginal amount of goodwill paid3,12916,9252,37915,94913Tangible fixed assetsUnder the provisions of section 363 (3), Book 2, of the NetherlandsCivil Code, no details are given of this item because of its negligiblesignificance for the company balance sheet as a whole.14Financial fixed assets(€ thousands)31-12-2005 31-12-2004Subsidiary companiesOther participating interests46,6441,03647,68050,00164350,644Amounts owed by group companies20,95325,29568,63375,93956 Financial statements 2005

Group companies and other participating interests(€ thousands)2005 2004Balance at 1 JanuaryCapital contribution/acquisitionsGoodwillNet profitDividend receivedExchange differences and other movements50,6441,990- 9766,769- 12,7031,95647,2048,029- 2,43411,986- 13,750- 391Balance at 31 December47,68050,64415Amounts owed by group companies and other participating interests(€ thousands)2005 2004Balance at 1 JanuaryLoans grantedRepayments conversions into share capitalExchange differences25,2957,306- 11,75610825,1586,084- 6,099152Balance at 31 December20,95325,29516Shareholders' equityThe authorized share capital amounts to € 2,500,000 andcomprised 25 million shares of € 0.10 each. For an amount of€ 545,628 these shares are issued and fully paid up in cash.The Employee Share Ownership Trust Foundation (StichtingAdministratiekantoor DHV Medewerkersaandelen) currentlyholds 9.1% of the ordinary shares (B shares). DHV Foundation(Stichting DHV) holds the remaining 90.9% of the ordinaryshares (A shares).DHV Pension Fund (Pensioenfonds DHV) holds the cumulativepreference shares. These shares are entitled to an annual profitshare of € 263,760 under the Articles of Association.DHV Priority Foundation (Stichting Prioriteit DHV) holds oneissued priority share. The approval of DHV Priority Foundation isrequired in order to:• issue shares;• grant rights to acquire shares in the company;• transfer A and B shares and cumulative preference shares ifsuch transfer will result in others obtaining control;• propose a merger;• apply for a stock exchange listing;• amend the Articles of Association or dissolve the company.16,1Issued share capital(€ thousands)A sharesB sharesCumulativepreferencesharesPrioritysharesTotalBalance at 1 January and 31 December 20054584642-546Financial statements 2005 57

16,2Share premium account(€ thousands)2005 2004Balance at 1 JanuaryLoan to finance repurchase of own shares6,303- 1646,364- 61Balance at 31 December6,1396,30316,3Reserve for translation differences relating to group companies(€ thousands)2005 2004Balance at 1 JanuaryMovement in year under review- 1,3781,318- 1,178- 200Balance at 31 December- 60- 1,37816,4Statutory reserve for loans to shareholders(€ thousands)2005 2004Balance at 1 JanuaryTransfer to other reserves1,012- 1341,146- 134Balance at 31 December8781,012The statutory reserve is formed for loans provided to staff underemployee share ownership schemes.16,5Statutory reserve for participating interests(€ thousands)2005 2004Balance at 1 JanuaryTransfer from other reservesTransfer to other reserves in connection with dividends received1,6801,048- 1,1005391,288- 147Balance at 31 December1,6281,68016,6Other reserves(€ thousands)2005 2004Balance at 1 JanuaryReservation defined benefit pensionplans 1 January 2005Transfer from/to statutory reserve for loans to shareholdersTransfer to statutory reserve for participating interestsCumulative preference dividend for year under reviewProfit for the financial yearProposed dividend41,037- 2,92913452- 2643,669- 11438,376-134- 1,141- 2644,069- 137Balance at 31 December41,58541,03758 Financial statements 2005

16,7Proposed dividend(€ thousands)2005 2004Balance at 1 JanuaryDividend distributedProposed dividend137- 13711491- 91137Balance at 31 December11413717Provisions(€ thousands)31-12-2005 31-12-2004Deferred taxesOther4578,7221,7124,1089,1795,82018Current liabilities(€ thousands)31-12-2005 31-12-2004Amounts owed to credit institutionsTrade creditorsTaxation and social securityOther liabilitiesAccruals and deferred income25,1062011,0759191,60032,983745-8121,47428,90136,014Amersfoort, 2 March 2006Executive BoardR.G. Campen, PresidentB.M. van EeSupervisory BoardH. Zwarts, ChairmanIr. J.H.M. LindenberghIr. A.B.M. van der PlasIr. A.P.M. van der PoelFinancial statements 2005 59

Other informationAudit opinonProfit appropriationIntroductionWe have audited the annual accounts of DHV Holding B.V.,Amersfoort, for the year 2005. These annual accounts are theresponsibility of the company's management. Our responsibilityis to express an opinion on these annual accounts based on ouraudit.ScopeWe conducted our audit in accordance with auditing standardsgenerally accepted in the Netherlands. Those standards requirethat we plan and perform the audit to obtain reasonableassurance about whether the annual accounts are free ofmaterial misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in theannual accounts. An audit also includes assessing the accountingprinciples used and significant estimates made by management,as well as evaluating the overall presentation of the annualaccounts. We believe that our audit provides a reasonable basisfor our opinion.OpinionIn our opinion, the annual accounts give a true and fair view ofthe financial position of the company as at 31 December 2005and of the result for the year 2005 in accordance withaccounting principles generally accepted in the Netherlands andcomply with the financial reporting requirements included inPart 9 of Book 2 of the Netherlands Civil Code.Furthermore, we have to the extent of our competence,established that the annual report is consistent with the annualaccounts.Articles of Association provisions governingprofit appropriationArticle 22 of the Articles of Association contains the followingprovisions on profit appropriation:1 The profit shall first be used to pay the cumulativepreference dividend of € 263,760 per year.2 The remaining profit shall be at the disposal of the AnnualGeneral Meeting.3 The profit referred to under paragraph 2 shall be distributedproportionally to the holders of A and B shares. The AnnualGeneral Meeting may decide to deviate from a proportionaldistribution of profit.4 Profit shall be distributed only if shareholders' equity exceedsthe paid-up and called-up capital plus the statutory reserves.5 The Annual General Meeting may decide to pay interimdividends.6 The Annual General Meeting may decide to makedistributions on A and B shares chargeable to a reserve.Proposed profit appropriationUnder the Articles of Association, the holders of preferenceshares are entitled to an annual dividend of € 263,760. Thisdistribution of the profit for 2005 is accounted for as a currentliability in the balance sheet at 31 December 2005. The remainingprofit for 2004 is at the free disposal of the general meeting ofshareholders. It will be proposed to the general meeting ofshareholders to distribute a dividend of € 114,000, representing€ 0,25 per share, to the holders of B shares. The Board ofManagement proposes that no dividend be distributed toholders of A shares. The remaining profit of € 3,291,000 will beadded to other reserves.Utrecht, 2 March 2006PricewaterhouseCoopers Accountants N.V.J.A. Nijhuis RAPartner60 Financial statements 2005

Interests held in the following companies havebeen accounted for as group companiesOther participating interests(Unless stated otherwise, all interests are 100% interests)A+D Engels NV, Genk, BelgiumDHV Bouw en Industrie BV, Eindhoven and Amersfoort, the NetherlandsDHV Canada Holding Inc., Saint John, Canada, including:Delcan Group Inc., Toronto, Canada (40%)*DHV China BV, Amersfoort, including:DHV Hong Kong , Hong KongDHV (Beijing) Environmental Engineering Co. Ltd., Beijing, ChinaDHV Engineering Consultancy Co. Ltd, Shanghai, ChinaDHV CIS BV, AmersfoortDHV Consultants BV, Amersfoort, including:Environment and Management Lanka (Pvt) Ltd , Colombo, Sri Lanka (67%)DHV CR s.r.o, Prague, Czech RepublicDHV Global Engineering Consultancy BV, AmersfoortDHV Holding (South Africa) (Pty) Ltd, Johannesburg, South Africa, including:Stewart Scott International, Johannesburg, South Africa (65%)*DHV Holdings USA, Inc. , Wilmington, Delaware, United StatesDHV Hungary Kft., Budapest, HungaryDHV Polska Sp. z o.o. , Warsaw, PolandDHV Ruimte en Mobiliteit BV, Amersfoort, including:IBZH Raadgevend Ingenieursbureau BV, The Hague, the NetherlandsDHV SGPS, S.A., Algés, Portugal, including:DHV CEM, S.A., Algés, PortugalFBO-Consultores, S.A., Algés, PortugalSEED Lda. , Maputo, Mozambique (50%)TECNOPOR Lda. , Porto, Portugal (90%)Temid BV, Heerhugowaard, the NetherlandsDHV Water BV, Amersfoort, including:DHV Sudamérica S.R.L., La Paz, BoliviaMDP Consultants Private Ltd., New Delhi, IndiaNACO, Netherlands Airport Consultants B.V., The HaguePrisma BV, Heerhugowaard, the Netherlands (64%)PT DHV Indonesia , Jakarta, Indonesia (85%)PT Mitra Lingkungan Dutaconsult , Jakarta, Indonesia (77,4%)DHV MED Ltd., Ra'anana, Israel (37%)DHV Planetek Co. Ltd., Kaohsiung, Taiwan R.O.C. (49,8%)DHV Hsiung Ling Engineering Co. Ltd., Kaohsiung, Taiwan R.O.C. (36%)Infraflex BV, Utrecht, the Netherlands (33%)TEC vof, Veenendaal, the Netherlands (33,3%)Holland Railconsult-DHV vof, Utrecht, the Netherlands (50%)Schoolcompagnie vof, Amersfoort, The Netherlands (50%)Under the provision of section 363 of Book 2 of the Netherlands Civil Code,several companies in which DHV holds only minor interests have not beenlisted.In 2005, the foundation was laid for the one-company concept. On 3 January2006, DHV Ruimte en Mobiliteit BV, DHV Water B.V. and DHV Consultants B.V.merged with DHV B.V. (formerly known as DHV Services B.V.) and DHV Bouw enIndustrie B.V. hived off its operations to DHV B.V..* Consolidated proportionallyFinancial statements 2005 61

Structure and management DHV GroupD H V H O L D I N G B . V .Executive Board:R.G. Campen (President), B.M. van EeWaterP.C.A.M. van HelvoortA.M.G. van HamburgBuilding and IndustryEnvironment andTransportationP.W. BesselinkAviationG.L. HondiusEuropeD.J. BleyerveldAsiaA.J.M. GalavaziAfricaV. PrinsNorth AmericaC.M. Engelsman a.i.The NetherlandsDHV B.V.NACO, Netherlands Airport Consultants B.V.Temid B.V.Participating interests:Holland Railconsult-DHVInfraflex B.V.Ingenieursbureau VathorstTECProtected Storage EngineersSchoolcompagnieEuropeDHV CIS B.V. (Russia)Outside EuropeDHV Consultants GuatemalaDHV Hsiung Ling Engineering Co. Ltd. (Taiwan)DHV Sudamérica S.R.L. (Bolivia)DHV MED Ltd. (Israel)DHV Consultants Representative Office (Nepal)DHV Planetek Co. Ltd. (Taiwan)DHV Tunisie SA (Tunisia)DHV Consultants Representative Office (Vietnam)SADECO (Saudi Arabia)NACO-Stewart Scott Airport Consultants (South Africa)EuropeA+D Engels NV (Belgium)DHV CR s.r.o. (Czech Republic)DHV Hungary Kft. (Hungary)DHV Polska Sp. z o.o. (Poland)FBO-Consultores, S.A. (Portugal)TECNOPOR Lda. (Portugal)DHV CEM, S.A. (Portugal)Outside EuropeDHV China B.V.DHV (Beijing) Environmental Engineering Co. Ltd. (China)DHV Engineering Consultancy Co. Ltd. (China)Global Engineering Center B.V. (India)MDP Consultants Private Ltd. (India)PT Mitra Lingkungan Dutaconsult (Indonesia)Environment and Management Lanka (Pvt) Ltd. (Sri Lanka)Stewart Scott International (Pty) Ltd. (South Africa)Panafcon Ltd. (Kenya)SEED-Sociedade de Engenharia e Desenvolvimento Ltd. (Mozambique)Bohlweki Environmental (Pty) Ltd. (South Africa)Delcan Inc. (USA)Delcan Group Inc. (Canada)National Engineering Technology Corporation Inc. (USA)Perlstein Galit Ltd. (Israel)62 Structure and management DHV Group(January 2006)

AddressesThe NetherlandsDHV GroupExecutive BoardR.G. Campen (President)B.M. van EeBusiness Development:C.M. EngelsmanFinance and Control:J.T. van ManenLegal Affaires:J.C. OverboschHuman Resource Management:drs. B.M.L. Janssen-CrijnsInformation and Knowledge:J.H. KulickiCommunications:M.J.L.A.M. Voestermans a.i.Laan 1914 no 353818 EX AmersfoortP.O. Box 2193800 AE AmersfoortTel +31 33 4683700E-mail info@dhv.nlWebsite www.dhv.comTrade namesDHV ANRAmersfoortTel +31 33 4682020DHV ConsultantsAmersfoortTel +31 33 4683990DHV Interim ManagementAmersfoortTel +31 33 4682000www.dhvinterimmanagement.nlDHV Investment ServicesAmersfoortTel +31 33 468 35 80www.dhv.nl/disDHV Management ConsultantsAmersfoortTel +31 33 4683529www.dhv.nl/mcNACO, NetherlandsAirport Consultants B.V.management: H.A. BrockmeierAnna van Saksenlaan 102593 HT Den HaagP.O. Box 930562509 AB Den HaagTel +31 70 3446300E-mail naco-haag@naco.nlwww.naco.nlEuropeBELGIUMA + D Engels n.v.management: V.L. Langenaeker, G.L.LeemansDieplaan 553600 GenkP.O. Box 903600 GenkTel +32 89 32 26 00E-mail info@adengels.bewww.adengels.beDHV CEM, S.A.management: L. RebouçoRua Dr. António Loureiro Borges, 5-6 oArquiparque - Miraflores1495-131 AlgésTel +351 21 412 74 00E-mail info@dhvcem.ptwww.dhvcem.ptDHV Tecnopor, Lda.management: M. Braga da CruzRua Ricardo Severo, 3-4 o4050-515 PortoTel +351 22 606 13 40E-mail info@dhvtecnopor.ptwww.dhvtecnopor.ptRUSSIADHV CIS B.V.management: A.E. KossovVorontsovskaya Street 41, 7th FloorMoscow 109147Tel +7 495 911 69 96E-mail cis@dhv.ruwww.dhv.ruDHV B.V.management:P.W. BesselinkA.M.G. van HamburgP.C.A.M. van HelvoortLaan 1914 no 353818 EX AmersfoortP.O. Box 11323800 BC AmersfoortTel +31 33 4682000E-mail info@dhv.comArnhemTel +31 26 3540450E-mail arnhem@dhv.nlDen HaagTel +31 70 314 33 33E-mail denhaag@dhv.nlEindhovenTel +31 40 2509250E-mail eindhoven@dhv.nlGroningenTel +31 50 3695300E-mail groningen@dhv.nlHengeloTel +31 74 2552000E-mail hengelo@dhv.nlMaastricht AirportTel +31 43 3294848E-mail maastricht@dhv.nlRotterdamTel +31 10 4044040E-mail rotterdam@dhv.nlWesterhovenTel +31 40 2074545E-mail westerhoven@dhv.nlZaandamTel +31 75 6530300E-mail zaandam@dhv.nlDHV SustainabilityAmersfoortTel +31 33 4682000www.dhv.nl/milieuDHV Temid Bouw en IndustrieHeerhugowaardTel +31 72 5750505www.dhvtemidbouwenindustrie.nlRijswijkTel +31 70 3070888DHV Temid RailAmersfoortTel +31 33 4683310www.dhvtemidrail.nlHeerhugowaardTel +31 72 5750533IBZH Ingenieursbureau Zuid-HollandDen HaagTel +31 70 3143333Holland Railconsult-DHV vofAmersfoortTel +31 33 4683300E-mail hsl-zuid@dhv.nlInfraflex B.V.UtrechtTel +31 30 2239799E-mail infraflex@infraflex.nlwww.infraflex.nlIngenieursbureau Vathorst vofAmersfoortTel +31 33 4682685E-mail piet.westeneng@dhv.nlTunnel EngineeringConsultants (TEC) vofVeenendaalTel +31 318 554666E-mail info@tec-tunnel.comwww.tec-tunnel.comProtected StorageEngineers vofRotterdamTel +31 10 4044040E-mail info@psengineers.nlwww.psengineers.nlNijlenTel +32 34 11 09 07E-mail sb-engels@pandora.beTienenTel +32 16 76 52 98E-mail adtienen@belgacom.netCZECH REPUBLICDHV CR, spol. s r.o.management: V. BízekTáboritská 1000/23130 87 Prague 3Tel +4 20 267 092 350E-mail dhv@dhv.czwww.dhv.czBrnoTel +420 545 212 671-2E-mail dhv@brn.dhv.czOstravaTel +420 597 310 229E-mail dhv@ova.dhv.czHUNGARYDHV Hungary Kft.management: L. DemeDevai utca 26-28, 4th floor1134 BudapestTel +36 1 450 27 30E-mail dhv@dhv.huwww.dhv.huPOLANDDHV POLSKA Sp. z o.o.management: C. Luczakul. Domaniewska 41Warsaw 02-672Tel +48 22 606 28 02E-mail dhvpolska@dhv.plwww.dhv.plPORTUGALDHV FBO - Consultores, S.A.management: J. VianaRua Dr. António Loureiro Borges, 5-6 oArquiparque - Miraflores1495-131 AlgésTel +351 21 412 74 00E-mail info@dhvfbo.ptwww.dhvfbo.ptNear EastISRAELDHV MED Ltd.management: G. Siboni1 Gad Manela st., P.O. Box 8058New Industry ZoneNetanyaTel +972 9 8852312E-mail contact@dhvmed.comwww.dhvmed.comDELCAN Perlstein Galit Ltd. (PGL)management: D.H. Smith16 Shoncino streetTel Aviv 61570Tel +972 3 56 16333E-mail israel@delcan.comwww.delcan.comAfricaBOTSWANAStewart Scott Botswana (Pty) Ltd.management: P. Manyumwa1st Floor, Modiri HousePlot 22076, P.O. Box 1517Gaborone WestP.O. Box 1517Tel +267 395 2557E-mail gabs@ssi.info.bwwww.stewartscott.comKENYAPanafcon Ltd.management: R. OkelloWood Avenue No 1/779(off Argwings Kodhek Rd)P.O. Box 5314700200 City Square, NairobiTel +254 20 57 1017/18/20E-mail info@panafcon.comwww.stewartscott.comMOZAMBIQUESEED, Sociedade de Engenharia eDesenvolvimento, Lda.management: H. CardosoAv. Patrice Lumumba no. 178CP 1923, MaputoTel +258 1 322502/3E-mail seed@seed.co.mzwww.seed.co.mzwww.dhv.com/officesAddresses63

SOUTH AFRICAStewart Scott Internationalmanagement: N. Bhojaram2 Norwich CloseSandown2196 SandtonP.O. Box 7845062146 SandtonTel +27 11 780 0821E-mail corporate@ssi.co.zawww.stewartscott.comBohlweki Environmental (Pty) Ltd.management: G. Moon271 Monte Carlo CrescentKyalami Office ParkKyalami 1684P.O. Box 11784Vorna Valley1686 MidrandTel +27 11 466 3841E-mail info@bohlweki.co.zawww.bohlweki.co.zaTUNISIADHV Tunisiamanagement: H. DaoudImmeuble FékiBloc A – 1er étageLes Berges du Lac1053 TunisTel +216 71 962 326/961 799E-mail dhvt@dhv.com.tnZIMBABWEStewart Scott Zimbabwemanagement: H. Rapson10th FloorPax House87-89 Kwame Nkrumah AvenueP.O. Box 1748HarareTel +263 4 79 7108/9E-mail sshre@ssi.co.zwAsiaCHINADHV China BVmanagement: H.R.J. van MaanenEstoril House 405-4082 Jiangtai RoadBeijing 100016Tel +86 10 64379187E-mail info@dhv.cnwww.dhv.cnDHV Beijing EnvironmentalEngineering Company Ltd.management: D. JiEstoril House 405-4082 Jiangtai RoadBeijing 100016Tel +86 10 64379187E-mail info@dhv.cnwww.dhv.cnDHV Engineering ConsultancyShanghai Ltd.Shanghaimanagement: T. JeannéTel +86 21 6447 0808E-mail dhv.sh@dhv.shGuangzhoumanagement: T. JeannéTel +86 20 8732 1551E-mail lucy.gong@dhv.sh,maggie.ma@dhv.shHONG KONGDELCANWanchaiTel +852 2836 3191INDIADHV Global Engineering Center BVmanagement: M.A.M. WillemsenIndia Branch Office13 & 14, I Block SDFNoida Special Economic ZoneNoida – 201 305Tel +91 120 530 5000E-mail info@dhv.inMDP Consultants Pvt. Ltd.management: M.S. PrakashC-154, Greater Kailash - INew Delhi – 110 048Tel +91 11 2923 2433E-mail mdpdelhi@airtelbroadband.inmdpdelhi@del6.vsnl.net.inwww.mdpindia.comLucknowTel +91 522 2393152/052E-mail mdplkogc@satyam.net.inChennaiTel +91 44 2434 4138/140E-mail mdp_chennai@vsnl.netchennai@mdpindia.comINDONESIAPT Mitra LingkunganDutaconsultmanagement: E.B. DeliantoVentura Building, Suite 405Jl. RA. Kartini No. 26(Outer Ring Road)Cilandak Barat,Jakarta Selatan 12430P.O. Box 1015Jakarta Selatan 12010Tel +62 21 7504605E-mail mitrald@rad.net.idwww.mld.co.idNEPALDHV Consultants Representative Officemanagement: H.R. SubediLokanthali, Madhyapur(Thimi)-16P.O. Box 5685KathmanduTel +977 1 6631077E-mail subedi@wlink.com.npSAUDI ARABIASADECOmanagement: M.Z. ChouayebDar Al-Hijaz Building 2, Floor 5apt. 25, Tahliya Street, JeddahP.O. Box 2320Jeddah 21451Tel +966 2 667 9071E-mail info@naco-jeddah.com.sawww.sadeco.bizSRI LANKAEnvironment & Management Lanka(Pvt) Ltd.management: A. Jayatilake68, Davidson RoadColombo 4Tel +94 11 5535880E-mail eml@sltnet.lkwww.eml-consultants.comTAIWANDHV Hsiung Ling Engineering Co., Ltd.management: S.T. Chiang9F-1, No. 80, Szu Wei 3 RoadKaohsiungTel +886 7 3392083E-mail dhvhl@ms54.hinet.netDHV Planetek Co., Ltd.management: C.F. Su, dr. W.K. Liu4F, 505, Chung Shan 2nd RoadKaohsiung, 801Tel +886 7 215 0508E-mail planetek@ms7.hinet.netwww.dhvplanetek.com.twTaipeiTel +886 2 25603303E-mail planetek@tpts7.seed.net.twDELCANTaipeiTel +886 2 2792 0699VIETNAMDHV BV Representative Officemanagement: D.H. BacSuites 810 - Artexport Building31 - 33 Ngo Quyen StreetHoan Kiem DistrictHanoiTel +84 4 936 3889/878E-mail dhvvietnam@hn.vnn.vnNorth AmericaCANADADELCANmanagement: J.A. Kerr625 Cochrane Drive, Suite 500MarkhamOntario, L3R 9R9Tel +1 905 943 0500E-mail info@delcan.comwww.delcan.comCalgary, AlbertaTel +1 403 228 9450Hamilton, OntarioTel +1 905 525 2554London, OntarioTel +1 519 681 8771Montreal, QuebecTel +1 514 694 1744Niagara Falls, OntarioTel +1 905 356 7003Ottawa, OntarioTel +1 613 738 4160Vancouver, British ColumbiaTel +1 604 438 5300Victoria, British ColumbiaTel +1 250 477 2206UNITED STATESDELCAN Inc.Vienna, VirginiaTel +1 703 752 6060Atlanta, GeorgiaTel +1 404 320 1776Chicago, IllinoisTel +1 847 577 6257Denver, ColoradoTel +1 720 228 4051Los Angeles, CaliforniaTel +1 714 521 3999DELCAN.NETDenver, ColoradoTel +1 720 228 4051Vienna, VirginiaTel +1 703 752 6060National EngineeringTechnology (NET) Corporationmanagement: J. Prince14320 Firestone Blvd., Suite 100La Mirada, CA 90638Tel +1 714 562 5725E-mail web@la.nateng.comwww.nateng.comArlington Heights, IllinoisTel +1 847 394 8287Atlanta, GeorgiaTel +1 404 320 1776Jefferson City, MissouriTel +1 573 893 4508Milwaukee, WisconsinTel +1 414 225 3725Overland Park, KansasTel +1 913 897 9030Schaumburg, IllinoisTel+1 847 925 0120Towson, MarylandTel +1 443 838 7755Vienna, VirginiaTel +1 703 752 6060Latin AmericaBARBADOSDELCAN International CorporationTel +1 246 430 5166BOLIVIADHV Sudamérica S.R.L.management: G.W. van BarneveldAvenida Arce 2799, Esq. CorderoEdif. Fortaleza, Piso 16, Of. 1601Casilla Postal 5147La PazTel +591 2 243 5379E-mail dhvbolivia@megalink.comGUATEMALADHV Consultants Guatemalamanagement: J.M. SolaresKm. 8.6, Antigua Carretera a El SalvadorCentro Corporativo Muxbal,Torre Este 6to. NivelSanta Catarina PinulaTel +502 6637 2221E-mail jmsolares@dhv-ca.comwww.dhv-ca.comVENEZUELADELCAN International CorporationCaracasTel +58 212 953 0041Margarita IslandTel +58 295 264 305564 Addresses www.dhv.com/offices