1 Strukton Annual Report annual report 2011

Transcription

1 1 Strukton Annual Report 2011 annual report 2011

2 Annual Report 2011 This Annual Report is issued in digital form only. The PDF can be downloaded from and is also available in Dutch. Strukton also publishes an Annual Review in printed format, giving the key developments in The Annual Review can be viewed or ordered online. Strukton Groep nv Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands Telephone +31 (0) Website Registered in the Trade Register of the Chamber of Commerce in Utrecht under number Strukton Annual Report 2011

3 Contents Report by the Group Management Board 4 Profile 7 Composition of the Group Management Board and Group Management Committee 9 Key figures 10 Strukton s specialist areas 11 Financial results 13 Corporate social responsibility 17 Strukton Rail 23 Strukton Civiel 30 Strukton Bouw 34 Strukton Worksphere 38 Strukton Integrale Projecten 42 Corporate governance 46 Risk management 49 Financial statements 54 Auditor s Report 118 Names and addresses 120 Glossary 126 Acknowledgements Strukton Annual Report 2011

4 Report by the Group Management Board Strukton achieved a positive operational result in This is a good performance, given that markets are still difficult. The various business units are now collaborating to an extensive degree, and as a result Strukton can carry out integrated projects in their entirety. Measures were required at a number of points in the organisation in order to adjust costs in line with market conditions. Unfortunately, this involved the loss of around one hundred and fifty jobs. The order book is well filled, with orders totalling EUR 2.0 billion. Result As in 2010, Strukton achieved a good result. Unfortunately there were two anomalies, one involving a branch office outside the Netherlands and the other an infrastructure project, that have had a negative effect on the results. We are seeking to improve control and prevent such unexpected losses in future by having more design checks and audits during project execution as well as by monitoring operations more closely. Revenue fell slightly compared with 2010, partly due to two large projects that were still in the preliminary phase in 2011 and not yet in full production. These were the Groene Loper (Green Carpet) for the A2 motorway in Maastricht and the A15 Maasvlakte-Vaanplein motorway section near Rotterdam, both Strukton Civiel projects. There was also a slight decrease in the revenue from Strukton Rail s domestic and foreign operations. Acquisitions and disposals Two significant sales took place in The first was the sale of an industrial site of 36,000 m 2 including buildings in Utrecht as well as a number of operations run by the plant business, Strukton Materieel. These operations mainly concern the hire and management of plant and tools. Strukton decided on this partial disposal as there is no strategic need to have its own internal department for construction equipment. A preferred supplier contract for plant hire has been concluded with the buyer. The second sale was of 80% of the stake in six PPP projects to DIF Infrastructure II. Besides its 20% minority interest, Strukton will remain very actively involved operationally during the construction and commercial operation phases of these projects. This sale is strategically important for Strukton because it lets the company release capital that will allow it to continue to play a leading role in future PPP projects as a provider of equity. Strukton also continues to use its know-how and experience with DBFM(O) to find the best possible solution for its clients. 4 Strukton Annual Report 2011

5 Report by the Group Management Board Both these sales had a positive impact on the balance sheet and led to a substantial reduction in Strukton s indebtedness. Strukton s solvency has increased as a result and is now more in line with that of the shareholder, Oranjewoud nv. The low interest rates in the market enabled healthy returns to be achieved and a reduction in the balance-sheet total. The disposals have not had a negative impact on the company s commercial operation; this is secured. Preparations for the acquisition of road construction company Ooms Nederland Holding bv took place in This acquisition was completed at the start of The acquired operations were the groundwork, road building and hydraulic engineering operations, the Dutch consultancy operations (Unihorn) and part of the non-dutch infrastructure operations within Ooms International Holding Company. They form a separate business within Strukton Civiel under the name Ooms Civiel. The acquisition fits in with Strukton s strategy of focusing on broadening and deepening its activities in the supply chain. This acquisition bolsters Strukton s infrastructure operations and its position in this market by giving it nationwide coverage: Ooms Civiel serves the west of the Netherlands while Reef Infra, acquired in 2006, mainly operates in the east of the Netherlands. Operating companies and integral solutions Strukton took significant steps in 2010 to restore profitability and continued on this course, with success, in Strukton Rail performed well, particularly in the Netherlands and Sweden, and Strukton Systems also achieved very strong results once again. The loss-making operations in Norway have been discontinued. Strukton Rail s order book is well-filled. Strukton Civiel has successfully completed one part of the work on the Noord/Zuidlijn underground and has a well-filled order book. Strukton Bouw has completed a large number of projects. It has refined its strategy with a view to increasing its success in bidding for tenders. Strukton Worksphere made considerable progress in 2011 and put substantial effort in improving its organisation. This operating company holds a unique position in relation to its competitors and this offers many opportunities for Strukton Integrale Projecten has successfully and professionally managed the sale of an 80% stake in the PPP projects. There is increasing demand in the market for companies that are able to take on work using an integrated approach, dealing with the design, construction, maintenance and operation. Most of the projects on Strukton s books are large, complex projects in which different business units work together. Strukton is capable of offering the integrated approach clients demand and the company made major progress again in 2011 in developing collaboration within the supply chain. 5 Strukton Annual Report 2011

6 Report by the Group Management Board Strategy Strukton s strategic focus remains the Netherlands, as well as other countries in specific instances certain business units and niches. Within this framework, Strukton operates in three markets: rail infrastructure, civil infrastructure and the construction, maintenance and management of buildings. The company is seeking to concentrate on specialist areas within these markets in order to create a distinctive profile. For instance, Strukton Rail will increasingly be operating on the international stage, concentrating not just on track maintenance but also on the electronics in the trains themselves. Strukton Systems is currently exploring the wind turbine market, where it has two projects. The acquisition of Ooms Civiel has improved Strukton Civiel s position. Strukton Civiel will be focusing more on traffic management systems and technical systems for tunnels in collaboration with Strukton Worksphere. There are also opportunities in hydraulic engineering. Strukton Bouw and Strukton Worksphere will be targeting a limited number of segments, namely healthcare, hotels, accommodation for students and young people, data centres, temporary housing and the conversion of office buildings for other purposes. In 2012 Strukton will not only be focusing on the three markets mentioned above, it will also be concentrating on a number of other strategic priorities. There will be more emphasis on the consolidation of client relationships. Furthermore, Strukton will focus more on actively approaching clients and explicitly promoting its range of services. The company also aims to develop more products into fully-fledged concepts, which it then markets. Outlook The strategic and commercial decisions that were made in 2011 mean that Strukton can face 2012 with confidence. It has been said often enough: market conditions are difficult. That is an unavoidable fact. It therefore makes more sense to concentrate on what we are able to influence ourselves. As an example, we will be focusing more on having our projects under control so that we can further reduce the costs of failure. Strukton has demonstrated that it is a professional organisation. The fact that the company marked its ninetieth year in 2011 shows that Strukton has earned its position. What is more, Strukton was among the top three in the reputation monitor for the third consecutive year. The organisation is well placed for the future as it has made the right choices at the right times. Board member Raymond Steenvoorden left Strukton in December 2011 after serving the company for nearly ten years. He has had a big hand in creating the company we have today through his inspiring personality and professional approach, and I would like to thank him very much for all he has done. I am also very grateful to our staff. They show incredible drive and dedication in their efforts to please clients and complete projects successfully. I have every confidence that together we will make 2012 a successful year. Utrecht, 8 May 2012 Gerard Sanderink Chairman of the Board 6 Strukton Annual Report 2011

7 Profile Strukton is a full service provider for infrastructure and accommodation solutions. Our goal is to enable end users to live, work, travel, learn and relax in comfort. Strukton operates in three markets that are subdivided into four segments: Rail infrastructure market: rail infrastructure and information systems (Strukton Rail) Civil infrastructure market: civil infrastructure (Strukton Civiel) Buildings: construction and property development (Strukton Bouw) and technical management and services (Strukton Worksphere) Strukton Integrale Projecten operates in each of these markets as well as in multi-market projects. It focuses on PPP concession projects, new concepts and in-house initiatives. Philosophy Strukton s starting point is the functionality and lifespan of buildings and civil engineering infrastructure. That is why the company chooses integrated contract forms that create opportunities for quality, comfort and sustainability. Two examples of such integrated contract forms are Design and Build (DB), and Design, Build, Finance, Maintain and Operate (DBFMO). Strategy Strukton s strength lies in realising complex projects in complex environments. Its aim is to provide even greater added value, which will enable it to develop a distinct identity and position in the market. Clients need to realise that they can rely on Strukton, that they will get value for money and that they can expect trend setting solutions. Strukton focuses on mobility, transport hubs and uninterrupted operation. The collaboration between the various Strukton businesses means Strukton is able to carry out integrated projects in their entirety. The core strategic themes are: the mindset of the company s employees, as that is what determines Strukton s distinctive capabilities the expansion of the construction chain in both length and breadth the further development of market niches 7 Strukton Annual Report 2011

8 Profile Mindset Strukton staff not only have a good grounding in their disciplines, they also take the initiative to come up with innovative solutions. They consider problems from the client s perspective and then suggest new, sustainable concepts and solutions. CSR policy Strukton conducts its business in a socially responsible manner, leading the way in the sector. Strukton thinks in terms of lifespan; it can achieve a great deal for clients, for instance by making buildings more sustainable and by providing employment opportunities locally (social returns). Staff are also encouraged always to weigh up explicitly what is best for people, the environment and the business. In 2011, Strukton had an average of 5,906 employees and revenue of EUR 1.3 billion. For more information on: Strukton and the operating companies: The financial situation and the financial statements: report Risk management and corporate governance: (see Finance and Governance ) Strukton s CSR policy: Strukton as an employer: Revenue in 2011 Rail infrastructure and information systems Civil infrastructure Construction and property development Technical management and services 19.1 % 13.7 % 44.5 % 22.7 % 8 Strukton Annual Report 2011

9 Composition of the Group Management Board Chairman of the Group Management Board Gerard Sanderink Chairman of the Board Nationality Dutch Joined Strukton October 2010 External positions Managing Director of Oranjewoud nv Director/owner Centric Group Management Committee Jos Hegeman Erik Hermsen Marinus Schimmel Aike Schoots Gert Jan Vos Strukton Civiel Strukton Integrale Projecten Strukton Worksphere Strukton Rail Strukton Bouw From left to right: Marinus Schimmel, Aike Schoots, Gerard Sanderink, Jos Hegeman and Gert Jan Vos. Not in the photo: Erik Hermsen 9 Strukton Annual Report 2011

10 Key figures (amounts in millions of euros) Revenue 1, , , , ,144.8 Operational result (EBITDA) Operating result (EBIT) 24.1 (6.4) Profit for the period 14.4 (15.5) Cash flow Operational > Regular (10.6) > PPP projects (29.1) (76.3) (70.5) (30.5) (0.3) Investments 13.0 (5.8) (25.6) (26.0) (39.8) Financing > Regular (9.2) (9.4) (4.3) (20.1) (2.1) > PPP projects (0.5) Translation differences - (0.1) Total cash flow (7.4) (18.8) 16.3 Additions to property, plant and equipment Depreciation/impairment of property, plant and equipment Excluding consolidation of non-recourse PPP projects Balance-sheet total Capital employed Net cash (debt) (52.2) (51.8) (42.5) Solvency (%) Return op capital employed (%) 13.2 (3.6) Order book at year-end 1, , , , ,210.8 Including consolidation of non-recourse PPP projects Balance-sheet total Total equity/group equity Capital employed Net cash (debt) (62.6) (198.9) (174.9) (101.4) (49.7) Solvency (%) Profit for the period as a percentage of average total equity 8.1 (9.1) Profit for the period as a percentage of revenue 1.1 (1.1) Non-financial indicators Average number of employees * 5,906 6,159 6,232 5,962 5,514 Sickness absence (%) Accident frequency (IF index) Average duration of sickness absence Accident figure Frequency figure Expenditure on management development and training Percentage of staff reviewed (%) * The figure for the average number of employees relates to the company as a whole. The other figures only relate to the 4,963 employees in the Netherlands. 10 Strukton Annual Report 2011

11 Strukton s specialist areas Core activities Strukton Rail A European full service provider of rail systems. Operations in infrastructure, maintenance management, rolling stock, machinery and logistics. Strukton Civiel Design, realisation, maintenance and management of infrastructure projects, with specific knowledge of underground construction, road construction, viaducts, stations, noise barriers, techniques for constructing foundations and immersing segments, and the environment. Strukton Bouw Providing customised accommodation for people, companies and business processes. Planning and project development can have an important supporting role in this. Strukton Worksphere Technical management and plant management: providing integrated services in the field of technical installations in buildings and hard services, working from the premise that people who feel comfortable in the areas where they work and stay will perform best. The sustainable and inflation-proof development of existing properties. Strukton Integrale Projecten Innovative and integral solutions based on the overall lifecycle of the infrastructure or the built-up environment. This includes integrated forms of contracts and cooperation, such as DBFM and DBFMO: Design, Build, Finance, Maintain & Operate. Maintenance, renovation and new construction of railways and rail systems for both heavy rail and light rail Information systems (including systems for passengers) Safety systems Data acquisition and data management Development and integration of electrical systems in rolling stock Energy systems Wet and dry infrastructure (in situ, bored and submerged tunnels, bridges, stations, roads and road maintenance, construction and maintenance of dams) Building in complex environments Industrial construction Water management and water treatment Specialist fields: immersion techniques, multi-storey car parks, foundations, noise barriers, roads, renewable energy Prefab concrete Surveying and marine surveys Traffic management Management of assets Building in complex environments Residential and non-residential construction Renovation, rebuilding and (scheduled) maintenance Technical management Property Development Redevelopment Technical service, management and maintenance New construction and renovation of technical installations, including making properties more sustainable through innovative contract forms such as ESCos (Energy Service Companies) Acquisition, design, construction and commercial operation, based on concession performance contracts and the outsourcing of technical services Management of the commercial operation of PPPs: integrated facility management services and property management Main contracting Consultancy and interim management Development and supervision of construction and rebuilding projects and planning the hard service aspects of accommodation, tenancy and rental Acquisition, financing and management of PPP projects Management of risk-bearing PPP investments Further development of PPP, concept development and in-house initiatives 11 Strukton Annual Report 2011

12 Market segments/clients Rail infrastructure managers, primarily in Western Europe Transport companies (municipal, regional, national) Government (local and provincial) Industry Stock suppliers and leasing companies Public highway administrators Rail infrastructure administrators (primarily in the Netherlands) Mainports, airports Major cities and governmental bodies Industrial clients (companies involved in storage, utilities, waste processing and water treatment) Transport companies (municipal, regional, national) Healthcare Hotels Accommodation for students and young people Data centres Temporary housing Conversion of offices for new use Professional and financial service providers Educational institutions Healthcare institutions Sustainable buildings Data centres Multi-storey car parks Traffic systems Entertainment industry Industry Government Transport sector Government (national, provincial, municipalities and water boards) Healthcare and educational institutions Rail infrastructure administrators in Western Europe Market features High barrier to entry (knowledgeintensive and capital-intensive) Focus on safety and quality for a fair price Increasing competition Europe-wide market in which every country is different Niche market Competitive Cyclical Fragmented market with just a few players in the top segment and a lot of local/regional parties Focus on quality and added value Shifting to new forms of contracting and tendering Focus on sustainability Developing and growing High level of complexity and risk of failure Focus on service ethos Focus on value retention Knowledge-intensive Increasing degree of outsourcing Increasing complexity and risk of failure Growing (accommodation for governmental bodies, infrastructure) Developing (education, light rail and healthcare) Quality-driven (sustainable/socially responsible) Room for private initiatives International power relationships Strukton s skills Data acquisition and data management Consulting and engineering Machines and logistics Rolling stock Project management and process management Broad knowledge of technology (in-house engineering and specialist skills) Knowledge of innovative contractual and cooperative forms Specialist in underground construction Realisation of projects while client processes are ongoing Systems engineering Risk management Optimisation of costs versus revenues, with a strong customer focus Integral approach to the construction process, focusing on the property, from the planning and project phases through to commercial operation Lifecycle/total cost of ownership approach Offering operational reliability for processes that support clients core business operations Creating environments in which people can work and stay and excel Approach that takes account of both community interests and the individual interests of the owner and end user Customer focus Central control based on technology Professional methods and resources Knowledge of clients core processes Project management, risk management, contract management and financial management Lifecycle-based approach and longterm responsibility Knowledge of innovative contractual and cooperative forms 12 Strukton Annual Report 2011

13 Financial results Major improvement in net result with a profit of 14.4 million euros (2010: loss of 15.5 million euros) Fall of 8.3% in revenue to 1,318 million euros (2010: 1,438 million euros) Slight fall of 4% in operational result to 55.3 million euros (2010: 57.6 million euros) Impairment losses of 6.4 million euros in goodwill and intangible assets (2010: 35.9 million) Dividend proposal: no dividend payments Substantial increase in solvency to 23.2% (2010: 17.2%). If PPP non-recourse financing is excluded, solvency is 26.6% (2010: 23.1%) Size of order book virtually unchanged at 2.0 billion euros (2010: 2.1 billion euros) Operating performance An operational result of 55.3 million euros was achieved despite a slight fall in revenue and difficult market conditions. All segments made positive contributions to this operational result. The net result improved significantly in 2011 with a profit of 14.4 million euros. Revenue After a period in which revenue increased every year, revenue fell in 2011 by 8.3% to 1,318 million euros. This was mainly due to two large civil engineering projects that were still in the preliminary phase in 2011 and were not yet in full production (the Groene Loper project for the A2 motorway in Maastricht and the A15 Maasvlakte-Vaanplein motorway section near Rotterdam) and to lower levels of production by Strukton Civiel s specialist business units. There was also a slight drop in revenue from Strukton Rail s domestic and foreign operations. The size of the order book fell slightly but is still high at 2.0 billion euros. All four segments have well-filled order books for The proportion of the order book accounted for by long-term PPP projects is 429 million euros. 13 Strukton Annual Report 2011

14 Financial results Revenue in millions of euros Rail infrastructure and information systems Civil infrastructure Construction and property development Technical management and services Total 1, ,437.5 Result A sound operational result (EBITDA) of 55.3 million euros was achieved in All segments made positive contributions to this operational result. There was a one-off transaction gain of 18.6 million euros due to the sale of an 80% stake in Strukton Finance Holding (PPP projects) and the sale of property and assets belonging to Strukton Materieel. This result benefited all four business segments. Even when this result from disposals is excluded, all four business segments made positive contributions to the operational result. Operational result in millions of euros Rail infrastructure and information systems Civil infrastructure Construction and property development Technical management and services Total The development of Strukton Rail s results both in the Netherlands and abroad has been satisfactory with the exception of Norway. This is a good performance given the pressure in the market on prices. The result for the operations in Norway and the termination of these operations had a substantial negative impact on Strukton Rail s results. Strukton Rail achieved a profit of 27.0 million euros, which is 10.2 million euros less than in At Strukton Civiel, a setback in a project led to a setback in the result. Furthermore, margins were lower due to lower capacity utilisation within Strukton Civiel s specialist business units. An operational result of 10.1 million euros, including the one-off transaction result, is a good performance in this difficult market (2010:13.3 million euros). Strukton Bouw recorded a modest positive result if the one-off transaction result is excluded. Positive results were recorded despite a provision being made for a reorganisation and despite markets with considerable pressure on prices. 14 Strukton Annual Report 2011

15 Financial results Strukton Worksphere s results are good. Revenue and profits have remained stable (before taking account of the one-off transaction result) even though there has been a downturn in the market. The overall result shows a significant improvement on 2010 of 5.5 million euros. There were cuts in costs and a limited reduction in staffing levels in all business segments in Operating result in millions of euros Operational result Depreciation of property, plant and equipment (21.0) (22.5) Depreciation of intangible fixed assets (3.8) (5.6) Impairments (6.4) (35.9) Operating result 24.1 (6.4) Impairments totalling 6.4 million euros were recognised in 2011 (2010: 35.9 million euros). This sum was largely for the write-down on goodwill for Strukton Rail s participating interest in Norway. In 2010 and 2011, impairments were recognised in goodwill and intangible assets acquired as part of takeovers in previous years. Financial result There was a further improvement in the financial result in 2011 compared with the previous year. The loss of 5.1 million euros meant that the financial result was 19.1% better than in 2010 (a loss of 6.3 million euros). This improvement was a result of lower financing costs and increased financial income from PPP projects. The tax burden in 2011 was 7.0 million euros (2010:5.5 million euros). That gives an effective tax rate of 32.8%. This relatively high effective tax rate is mainly due to the impairment of goodwill, costs outside the Netherlands that are not tax deductible and the write-off of a deferred tax asset because of the termination of Strukton Rail s operations in Norway. Net result There was a substantial improvement in the net result for 2011, giving a profit of 14.4 million euros as opposed to a loss of 15.5 million euros in Capital expenditure Capital expenditure on property, plant and equipment amounted to 19.7 million euros in 2011 (2010: 16.7 million euros). Most of the capital expenditure was made in the Strukton Rail segment. Strukton seeks to optimise the quality of its capital expenditure, which means such expenditure must contribute to Strukton s core operations. 15 Strukton Annual Report 2011

16 Financial results Cash flow and financing The total net cash flow in 2011 was a negative flow of 7.4 million euros (2010: positive flow of 9.6 million euros). This was mainly due to a fall in the pre-financing for large infrastructure projects and the loss on Strukton Rail s operations in Norway. The cash flows from the sale of the PPP projects and Strukton Materieel s assets are recognised in the investment cash flows. The net cash flow from investment activities was 13.0 million euros (2010: a negative flow of 5.8 million euros). This means the extensive programme of capital expenditure on property, plant and equipment was fully funded by the proceeds from the disposals. There was an early repayment of 15.0 million euros on bank loans in December The net cash flow from financing activities in 2011 was 19.3 million euros (2010: 53.3 million euros). This mainly reflects the loans taken out as part of the non-recourse financing for the PPP projects. Acquisitions and disposals On 6 December 2011, Strukton reduced its share in six PPP projects by selling an 80% stake in Strukton Finance Holding to DIF Infrastructure II. This disposal fits in with the strategy of freeing up capital in order to invest further in Strukton s new activities. Strukton remains operationally responsible for these projects and will continue to invest in PPP projects in future. On 13 October 2011 Strukton sold the land, property, plant and equipment owned by its plant business, Strukton Materieel, to RECO/BUKO. The operations of the plant business are not part of Strukton s core activities and this disposal frees up money for the repayment of debts and investments in core activities. On 5 January 2012 Strukton Civiel acquired a 100% stake in Ooms Nederland Holding bv. This transaction involved Strukton Civiel taking over the infrastructure operations of Ooms Avenhorn Group bv. The details of this transaction will be included in the 2012 financial statements. Capital position Strukton s solvency improved considerably in Solvency in 2011 was 23.2% (2010: 17.2%). If PPP non-recourse financing is excluded, solvency was 26.6% (2010: 23.1%). The sale of an 80% stake in the PPP projects also meant that the non-recourse PPP financing included in the balance sheet fell to 64.2 million euros (2010: million euros). The net cash position of 0.4 million euros at the end of 2010 improved in 2011 to become 16.3 million euros. These improvements in solvency and the net cash position give Strukton a firm basis on which to do sound business. 16 Strukton Annual Report 2011

17 Corporate social responsibility Strukton s basic premise is that people, the environment and clients deserve just as much care and attention as its business operations. The interests of People and Planet are of equal value and complementary to commercial requirements and quality (Profit). Strukton sees fair, honest business practices as the basis for its operations and its contacts with its stakeholders. Still at level 5 on the CO2 performance ladder In 2011 Strukton retained level 5 the highest level on the CO2 performance ladder. This is a unique achievement in the sector because no other company is at level 5 for rail and civil engineering and construction and electrical and mechanical engineering all at once. Strukton was able to maintain this level thanks to various measures. For example, measures were taken to deal with the lease fleet, the biggest source of CO2 emissions. The permissible level of emissions the emissions ceiling for lease vehicles has been made more stringent. Lease vehicles with emissions of 155 g/km (petrol) or 136 g/km (diesel) were still allowed until September 2011 but those limits have now been replaced by a maximum of 140 g/km (petrol) or 116 g/km (diesel) for most of the 17 Strukton Annual Report 2011

18 Corporate social responsibility fleet. Further measures are planned for 2012 relating to mobility budgets and management. The CO2 performance ladder is used not just by ProRail but also by the Dutch Directorate-General for Public Works and Water Management (Rijkswaterstaat). A new version has now been developed: the CO2 performance ladder 2.0. This new version assesses not just the emissions produced by the building companies themselves but also the emissions produced by the projects. One of the first projects to be put out to tender using this performance ladder in 2011 was the Reconstruction of the Kunderberg A76/A79 motorway interchange. Strukton Civiel won this tender because it was expected to keep its level 5 position on the modified ladder. In 2012 Strukton as a whole will meet the requirements for level 5 of the CO2 performance ladder 2.0. The business units that Strukton Civiel purchased from the building company Ooms Civiel had already obtained certification at this level by the end of Ooms Civiel has a number of sustainable innovations in its product range, such as the solar road a bicycle path with solar panels embedded in the asphalt. Sector initiatives aimed at reducing CO2 emissions Strukton is championing CO2 reduction throughout the supply chain. A third of heavy goods vehicles on the motorways are connected to the construction industry. Strukton is collaborating with partners in the concrete and glass supply chains to investigate the options for organising transport more efficiently, for example by combining delivery and collection journeys. Strukton is also examining the options for making the logistics more sustainable and perfecting them together with suppliers in the Den Haag Centraal Public Transport Terminal project. As part of the Green Deal programme, Strukton and a number of fellow contractors and cement and concrete supply companies have started up the Sustainable Concrete Green Deal. The aim of this Green Deal is to make concrete even more sustainable. The initiative was signed by MVO Nederland (the national CSR expertise and network organisation) and the State Secretary for Infrastructure and the Environment, Mr Atsma, during the so-called Maarssen Day, dedicated to innovation, on 4 October Sustainability within Strukton Strukton is continually looking for ways within its own organisation of making business processes even more sustainable. That is why in 2011 Strukton Bouw, Strukton Civiel and Strukton Worksphere jointly appointed two employees who will be working full-time on sustainability. Strukton Rail had already appointed a sustainability officer. 18 Strukton Annual Report 2011

19 Corporate social responsibility In 2011 Strukton Rail and Strukton Civiel joined the B50, fifty high-profile employers in the Netherlands that are setting trends in smart working and travelling and want to encourage such smart practices. This encouragement is evident in the Strukton Shuttle at Strukton, for instance, which started as a pilot project in This taxi service operates a shuttle between Maarssen station and the head office for staff and visitors during off-peak times. A similar service was already available during peak hours. By offering the shuttle service in off-peak hours as well, Strukton is aiming to encourage the use of public transport. The vehicle used for the shuttle service is a Toyota Prius. If the pilot is a success, Strukton will purchase an even more sustainable vehicle. Staff were also made aware of the possibilities of electric transport in Employees were introduced to electric cars and scooters at the Electric Roadshow held during the Sustainability Day. Sustainable projects and working practices The Thinking Green think tank was set up in This team, which has members from all parts of the organisation, acts as an advocate for sustainability projects. Indeed, sustainability features in numerous projects executed by Strukton, whether at the request of clients or on the initiative of Strukton itself. For example in Amsterdam, Strukton Worksphere has started installing two thousand five hundred public recharging outlets for electric vehicles. Energy company Essent in partnership with Strukton are responsible for installing a large proportion of these recharging outlets. Strukton itself is increasingly opting for electrically powered transport in its projects. For instance, Strukton Worksphere uses electric scooters in the municipality of The Hague, the HanzaRailTeam is using an electric car for the Hanseatic Rail Line project and Strukton Rail West has an electric car for business travel. In Rotterdam, Strukton is working on making nine municipal swimming pools more sustainable. The swimming pools will be more energy-efficient, CO2 emissions will be reduced, and water and air quality will be improved. Strukton set up an Energy Service Company (ESCo) for the purpose of this project. The ESCo designs and executes the energy-saving measures, arranges the funding and guarantees the energy savings. This is not only an opportunity for improving sustainability; Strukton also sees it as a good example of a business model that is appropriate for the company s CSR policy. The business unit Afvalbank Nederland (for waste recycling) was set up in 2010 and developed 19 Strukton Annual Report 2011

20 Corporate social responsibility further in The aim is to improve separation of the company s own waste streams at the source and reuse the materials released in the company s own projects. A good example is the Hilton Hotel in Amsterdam, where 87% of the waste has been made fit for reuse. In the DUO project in Groningen, Strukton Civiel is collaborating with Delft University of Technology, MVO Nederland and other partners in the supply chain to see whether it is possible to reuse all of the concrete from the demolished offices of the Education Executive Agency and Regional Tax Office for the construction of the garage car park. This would keep the use of new raw materials to a minimum. The technological developments to allow this were made in 2011 and implementation will take place in Consideration for people and the local area In the Groene Loper project, the Avenue2 school was set up to ensure social returns. A total of 750 unemployed and people with difficulty finding work will receive training through this school during the ten years in which Strukton will be working on the project in Maastricht. These people live in or near Maastricht. After their training has finished, they will be given a temporary employment contract with the Groene Loper, for example in security, traffic control or administration. Strukton is collaborating with the municipality for this. When working on a project, Strukton always tries to keep disruption to the surrounding area to a minimum. That is demonstrated by the Considerate Constructors certificate, which Strukton set up in partnership with BAM, Ballast Nedam and VolkerWessels in Workers at building sites with this certificate ensure safety at the building site as well as the safety of passers-by. They also ensure that noise disturbance is kept to a minimum and they are environmentally aware. As of 2011, all Strukton Civiel s projects are registered for this certificate as a matter of course. Safety and occupational health Strukton has been running the Zero Accidents programme for a number of years and it was continued in The term Zero Accidents is repeatedly used in publications on the subject of safety in order to keep the goal of zero accidents top of mind. There are regular communications giving the number of consecutive days worked without an accident resulting in absence. Furthermore, a range of company-wide initiatives are used to continually draw the attention of staff to the issue of safety. Strukton Rail started the Safety First campaign to encourage safety awareness and safe practices. In addition, Safety Awareness Team Training Courses were organised. The aim of these courses 20 Strukton Annual Report 2011

21 Corporate social responsibility is to develop a critical attitude to safety among staff and to teach them to pass on key safety information to their fellow workers. Strukton Civiel organised the Safety Experience. This was a two-day long meeting in which foremen, chief foremen and building site workers received instruction and training in various safety aspects: building scaffolding, using drilling tools with and without dust extraction, and using personal protective equipment such as hearing protection and a new helmet with safety glasses. A Safety Masterclass was also developed in In 2012 this will be given to directors, project managers and chief foremen in order to further encourage an awareness of safety and safe practices. Strukton Bouw paid considerable attention to the Last-Minute Risk Analysis (LMRA) in The LMRA is a brief risk assessment for a specific task, made by the person who will be carrying out the task. The analysis consists of three steps: assessing the dangers, determining the measures to eliminate those dangers and taking action. An LMRA flyer was produced and publicised among those staff who work at the building sites. There are checks during audits to see whether the flyer is really being used. The flyer has turned out to have a positive effect on safety. There was a large reduction in the number of times that something was found not to be right during an audit, in comparison with Staff attended more toolbox (safety) meetings on average in 2011 than in previous years. Like the other operating companies, Strukton Worksphere also paid systematic attention to safety. A start was made on improving the HSE structure (health, safety and the environment) within Strukton Worksphere. This was done not just through the Zero Accidents programme but also through courses repeated every year on such topics as working safely with electricity and how to recognise asbestos. Strukton Worksphere also held Safety Awareness Training Courses in Within Strukton as a whole, there were 93 accidents resulting in absence in 2011 as opposed to 81 in Strukton Bouw and Strukton Worksphere recorded record numbers of consecutive days without any accidents resulting in absence as at 31 December 2011, with 212 days and 248 days respectively. Certificates and standards In 2011 Strukton achieved various certificates and accreditation for standards. For instance, Strukton Civiel qualified for the international standard OHSAS for underwater techniques, which are frequently used by Strukton Civiel. Strukton Worksphere obtained the ISO certificate in 2011, a certificate for environmental management. This certificate shows that the operating company is investing in limiting the environmental risks to the organisation, in covering these risks and in making sure staff know how to act in the case of an emergency. Strukton Rail and Strukton Civiel already have this certificate. Furthermore, Strukton as a whole is working on obtaining ISO 26000, a selfreported standard for policy in the field of socially responsible business practices. Management development and training Despite the current difficult economic conditions, Strukton continued to invest in staff training in 2011, through various routes and training programmes. For instance, there is the Strukton Young Management training programme. This is a programme for graduates of applied and academic universities aged between 23 and 30 who have been working for Strukton for two to five years and have the ambition and potential to progress to managerial positions. In collaboration with the HU University of Applied Sciences in Utrecht, Strukton is offering a maximum of sixteen people each year a training path lasting ten months. In this path they are offered a programme focusing on cognitive development, personal development and professional development. The aim of Strukton Young Management is to give talented young people in the company the chance to develop, to retain talented staff for the company and to ensure a supply of 21 Strukton Annual Report 2011

22 Corporate social responsibility staff who are properly equipped for managerial positions. Various graduates have now progressed to middle-management positions. All sixteen participants in the programme in 2011 completed it successfully and a new group has now started on their programme. Another initiative for younger Strukton employees is Scope. This network offers employees aged 36 and younger the opportunity to develop a network within Strukton and to become acquainted with the different operating companies within Strukton. Scope members are responsible for organising project visits and other activities while the directors support the network financially. In 2011 Strukton Rail organised training courses in coaching management for managers. Follow-up workshops have been started in In the Netherlands, ProRail and the rail contractors (including Strukton Rail) and engineering consultancies have taken the initiative to develop an applied university degree in Rail Technology. They have concluded an agreement for this purpose with HU University of Applied Sciences in Utrecht. The objective is to ensure a sufficient supply of well-qualified technicians in the field of rail technology in the future. This degree subject will be available at HU University of Applied Sciences from September 2013 and a minor will be offered in rail technology from September Strukton Rail is also involved in the effort to set up a Rail College offering vocational secondary education. This is an initiative of Nederlandse Spoorwegen (Dutch Railways). A link will be made between the training offered by this college and the degree at the applied university. An intensive training course in senior project management was started at Strukton Civiel in It aims to train project managers in dealing with the increasing complexity of the projects Strukton Civiel has on its order books. In 2011 Strukton Worksphere resurrected the old principle of master/journeyman/apprentice. It freed up people to implement this. In addition, various in-company programmes were organised. A substantial number of training courses are also scheduled for Example, all non-technical staff from directors to managers and from controllers to legal officers are being given additional training in installation technology. Strukton Worksphere has chosen to do this so that every member of staff can talk knowledgeably about the operating company s core business. In 2011 Strukton Integrale Projecten implemented the Strategic Talent Management Programme. A key theme of this programme is assessment plus coaching. Targeting behavioural skills, targeting output and striving for a continual process of improvement means that every employee needs to be informed regularly about results and how they were achieved. Staff are encouraged to develop further in the specialist areas within Strukton Integrale Projecten: project management, contract management and financial management. In 2011 Strukton made a conscious effort to promote itself to the outside world. For example, one of the directors took part in the television programme Undercover Boss, in which a senior executive mixes with ordinary workers incognito. Strukton chose to take part in the programme so that it could introduce the company to a wider public and to gain favourable publicity for the construction sector. After all, there is a need for enthusiastic staff, certainly in the longer term, which is why it is important to get people interested in the company s business. Another reason for taking part in the programme was to generate pride in the company. That pride in their company ensures growth and development among its staff, which is something Strukton considers very important. There was a huge surge in the number of visits to Strukton s website after the transmission, as well as a large number of unsolicited job applications. The same happened after the transmissions to 193 countries around the world of the Megastructures Korean SuperLink programme on the National Geographic Channel, which featured the Busan-Geoje Fixed Link Project in South Korea. In this project, Strukton laid one of the deepest and longest immersion tunnels in the world: 3.2 kilometres long and 48 metres deep. 22 Strukton Annual Report 2011

23 Strukton Rail With the exception of Norway, all Strukton Rail countries and specialist areas achieved good results despite the fact that market conditions are still difficult in some countries. There was a very tragic accident in Sweden, in which one Strukton Rail employee died. Result and markets Countries In the Netherlands, Strukton Rail is having to deal with a very volatile market with an ongoing price war. Clients expect ever-increasing quality combined with ever-decreasing prices. The volumes of work are reasonable. In 2011, Strukton Rail maintained its market share in maintenance and projects in the Netherlands, achieving a sound profit. A major reorganisation took place in the Netherlands in 2010 and was completed early in millions of euros Revenue Operational result Number of employees (year-end) 3,125 3, Strukton Annual Report 2011

24 2011 in brief Good results achieved in all countries and specialist areas, with the exception of Norway Strukton Rail is managing to hold its own throughout Europe despite the challenging market and (political) uncertainty Machinery with high levels of production capacity is being deployed successfully across Europe The organisation is future proof Operations in Norway have been discontinued An interesting project has been secured in Australia These changes made it possible for Strukton Rail to maintain its strong position in the difficult Dutch market. A good result was also obtained in Belgium. Germany was able to finish 2011 with a break-even result and its organisation is up to strength. The organisation in Germany has been given a more international market profile with a focus on the use of sophisticated machinery with high levels of production capacity. There was a fatal accident in Sweden, in which one Strukton Rail employee died. The accident has had an enormous impact within the company. Strukton Rail regrets this incident intensely. In terms of business, things are going very well in Sweden. Strukton Rail is in a strong position both with regard to size and with regard to the quality of its work. Clients consider the company to be reliable and a player that stands out from the crowd. Sweden will be the main driving force in Scandinavia. A modest profit was recorded in Denmark in Healthy results were also achieved for Italy, mainly in Italy itself but with some revenue from the Balkans. In Norway, Strukton Rail was unable to build up the organisation to the desired level. The company also sees insufficient continuity and perspectives in the Norwegian market. Consequently Strukton Rail decided in January 2012 to discontinue its operations in Norway with immediate effect. Specialist fields Strukton Systems recorded excellent results in 2011, as it did in This business unit performed well, both in track-related work and in all the product-market combinations (PMCs), including Energy Solutions, Cable, Electric, Monitoring & Travel Systems, Telecom & Technical Installations, Signalling & Power Supplies and Installation Services. Strukton Rolling Stock made a profit in 2011 and is now in a further development phase. It works on electrical systems in rail vehicles and offers all-in train maintenance in partnership with Strukton Rail Equipment. This varies from renovation to mechanical maintenance and repairs. Rolling Stock also designs, engineers, manufactures and installs electrical and electronic systems such as panels, switch boxes and cabling. Its principal specialist field is traction electronics for driving and controlling trains. Strukton Rolling Stock has developed a mature product range of on-board power supply systems and traction electronics. Eurailscout achieved a break-even result in This business unit remains a key priority and of great strategic importance for data management and verifying track maintenance status. 24 Strukton Annual Report 2011

25 Strukton Rail Strategy The strategy Strukton Rail pursued in previous years turned out to be successful in 2011 as well. Strukton Rail functions as a Europe-wide company and has operations in various European countries where it aims to help make travelling by train and rail transport attractive. It also has a number of specialist areas: Strukton Systems, Strukton Rolling Stock, Strukton Rail Equipment and Eurailscout. Strukton Rail s European character is above all reflected in its deployment of machinery and specialist know-how throughout Europe. The greater scale means that Strukton Rail can continue to invest in larger, more sophisticated machinery and work in a commercially viable way in each country. Some examples of these machines are the ballast undercutter, track renewal train and the tamping machine. Strukton Rail will continue its strategy of internationalisation unchanged in As in previous years, in 2011 there were lively debates in various European countries about the future of the railways and the option of privatisation. Strukton Rail is in favour of Europe and the individual countries studying the situation of the railways in depth. Rail transport has a huge future it offers sustainable, safe transport and takes up relatively little space. There is substantial demand among stakeholders for reliable, affordable transport. Strukton Rail s goal is to use its staff and technology to contribute to the growth in rail transport, allowing more traffic to run with improved punctuality and safety on the existing track. In the opinion of Strukton Rail, privatisation and deregulation of the rail market are good choices. This approach is bearing fruit in the Netherlands and Sweden in comparison with other countries. There is considerable pressure to improve and innovate. In Sweden this has led to a huge surge in the number of passengers as well as falling costs. Rail transport has become a more competitive alternative to other forms of transport. If the same result is to be achieved in the Netherlands, the tracks will have to be capable of coping with more trains per hour. Consequently the development of Strukton Rail s operations its staff and technology is focused on making sure the track is out of service for as brief a period as possible during maintenance work. In view of this, Strukton Rail implemented a new, automated inspection method in The company also made an unsolicited proposal in 2011 for increasing Strukton Rail aims to help make travelling by train and rail transport attractive in Europe, a strategy that again proved successful in 2011 Aike Schoots director of Strukton Rail 25 Strukton Annual Report 2011

26 Strukton Rail electricity supplies to the rail networks through the use of new technology. Strukton Rail is proposing using an auto-transformer substation for highly targeted increases in the amount of electrical power supplied. This relatively minor adjustment doubles the amount of power available on the track precisely at the locations where it is needed, for instance at busy stations. This will let trains accelerate more quickly and increase the track s capacity. Furthermore, the system will bring annual savings of 14,000 tons in CO2 emissions for the Dutch rail network. Sustainability Strukton Rail was able to retain its level 5 on the CO2 performance ladder in Increasingly far-reaching measures need to be taken, reducing CO2 emissions yet further, in order to maintain this position. The vehicle fleet is the main source of emissions. That is why the decision was taken in October 2011 to encourage lease vehicle drivers not to use their car one day a week, but instead to commute by public transport, or carpool or work from home. As of 2013 there will be audits of Strukton Rail for the revised version of the CO2 performance ladder. Strukton Rail is also taking various initiatives in the sector that are aimed at reducing CO2 emissions. One such example is the unsolicited proposal to increase the supply of electricity in the rail network using new technology. Strukton is looking for parties interested in carrying out a pilot project based on the wireless green concept developed by Strukton Rolling Stock. The wireless green concept is for the storage and reuse of braking energy. Within Railforum, Strukton Rail is collaborating with other rail sector parties in the Sustainability group on various actions to improve the carbon footprint of the Dutch rail supply chain. The focus is on the materials used in the infrastructure, the energy consumption of trains and modifications to rolling stock. 26 Strukton Annual Report 2011

27 Strukton Rail Rail maintenance and projects The Netherlands In 2011 Strukton Rail started on the Drenthe PBM and the Rijn-Gouwe PBM. This brings the total number of PBMs (contracts for performance-based day-to-day maintenance) obtained by Strukton to three. Strukton Rail is also carrying out the work for the performance-based maintenance contract for Keyrail on the Betuwe route. There are also various output performance contracts ongoing for day-to-day maintenance in other contract areas. The construction of the Hanseatic rail line is nearly complete and the entire line will be tested in The work is on schedule and within budget, and the client is satisfied. The work on the Merwede-Linge rail line was also finished in This work on the light rail link between Dordrecht and Geldermalsen involved doubling part of the track, the construction of three new stops and the design and implementation of a train detection system. In 2011 Strukton Rail won the contract for the Spoorzone Delft multidisciplinary project. This project involves the construction of new tracks in the Delft rail tunnel, their connection to the existing track, the demolition of the current railway yard, the construction of a new railway yard for DSM and the construction of a substation. Work starts in 2012 and will continue through to Furthermore, Strukton Rail added various upgrade projects to its order book in 2011, including the conversion of the Zutphen railway yard, the upgrade of superstructure in Groningen and Friesland, a superstructure upgrade between Rotterdam and Woerden, and the conversion of holding sidings along the Westhavenweg road in Amsterdam. Belgium In Belgium work is in progress renewing the overhead lines for North Brussels in the direction of Schaarbeek. To do this, Strukton Rail is using the Gemma catenary renewal machine. Strukton Rail is working in Bakenbos in Wallonia, just outside Brussels, on the preparations for doubling the track for the main Brussels-Namur rail link. This project combines work on the track, renewing the ballast and work on the overhead lines. In general, Strukton Rail is seeing a shift in Belgium from track work to signalling and overhead lines. Denmark In Denmark, Strukton Rail and Aarsleff Rail have successfully completed the upgrade of a major section of track between Bramming and Tønder, with a length of 46 kilometres. Furthermore, the two companies have been jointly awarded a contract by Siemens for a major security system. Strukton Rail and Aarsleff Rail will be installing cables and equipment along 170 kilometres of double track and in 85 stations for the Copenhagen S-train. They will also be carrying out the renewal of 70 kilometres of track in Strukton Annual Report 2011

28 Germany In Germany, Strukton Rail successfully carried out various track renewal projects in 2011 using its own sophisticated machines. They included the sections between Cornberg and Sondra and between Cornberg and Bebra. In January 2012, Strukton Rail started on the renewal of a mid-sized section of track in Stuttgart. Sweden In the summer of 2011, Strukton Rail worked on the renewal and modernisation of the Hagsätra metro line in Stockholm, between Gullmarsplan and Hagsätra. It was a multidisciplinary project that included work on the track, energy supplies, overhead lines, signalling and telecoms. Strukton Rail also started the work for extending the Pågatåg-Krösatåg line in Southern Sweden. Strukton Rail is building 16 new stations for this project in partnership with SVEAB. The work is scheduled to finish in Furthermore, Strukton Rail is responsible for the extremely precise maintenance work on more than 2,000 kilometres of main track in Sweden, including most of the metro network in Stockholm as well as the main rail line between Stockholm and Malmö. In 2011 Strukton Rail started the implementation of the new maintenance contracts in the vicinity of Luleå, in the far north of Sweden. 28 Strukton Annual Report 2011

29 Strukton Rail Australia At the start of 2012, Strukton Rail was awarded a contract by John Holland for the hire of ballast removal wagons and the provision of training and technical support for a major ballast renewal project in the Pilbara region in Western Australia. John Holland is the biggest rail contractor in Australia; it is carrying out this project on the orders of BHP Billiton. BHP Billiton s goal with this project is to improve the condition of an important part of the rail network that is used for the export of ore from Australia to various countries, including China. The global demand for raw materials is huge and a sound infrastructure is an important factor in ensuring the transport of these raw materials. Rail is a form of transport well-suited to the purpose, and major mining companies are looking for solutions and parties able to realise these solutions. This marks the start of an important new market segment for Strukton Rail. There are also synergy opportunities here with the shareholder Oranjewoud, which carries out environmental assessments in Colombia and the United States for major mining corporations. Strukton Rolling Stock In 2011, Strukton Rolling Stock worked on various contracts for the Indian company BHEL, which supplies trains and locomotives for Indian Railways. A prototype locomotive created by Strukton Rolling Stock is currently running in India. The prototype is in the final phase with important tests that have nearly been completed. The locomotive satisfies all the requirements. Strukton Rolling Stock also delivered the first drive systems for the metro in Toulouse. In 2011 Strukton Rolling Stock was awarded a contract by the Malaysian monorail construction company Scomi Rail. Strukton Rolling Stock will be delivering 72 traction inverters for a total of 12 new monorail vehicles in Kuala Lumpur. Scomi Rail chose Strukton as the supplier for the traction systems because of its experience in the field of drive systems for similar vehicles. The first inverters were delivered at the end of February The company also acquired a contract for inverters for on-board power supply systems for fast tram vehicles in Amsterdam. Strukton Systems Strukton Systems acquired a large number of projects in 2011 and carried out various projects in a range of different disciplines. For example, the company started on the work for two wind turbine parks in the North Sea in For both parks, DanTysk and Riffgat, Strukton Systems is supplying high-voltage transformer platforms in partnership with Hollandia. Strukton Systems was also awarded a contract in 2011 by Serco Docklands Ltd for the delivery of hardware for a Preventive Maintenance and Disruption Diagnosis System (PMDDS). Serco will use the system, which was developed by Strukton, for monitoring the points and axle counters on the Docklands Light Railway in London, with the aim of preventing disruptions and reducing disruption recovery times. The Docklands Light Railway is a crucial public transport artery in the area that is to host the Olympic Games in the summer of Strukton Annual Report 2011

30 Strukton Civiel In 2011, Strukton Civiel was able to hold its own reasonably well in the recession. Strukton Civiel did have to deal with one infrastructure project with disappointing results. However, that was compensated by other projects that delivered good results. Result Strukton Civiel had to adjust revenue expectations for 2011 downwards. This was due to three factors. The first factor is the adverse market conditions in the lower-end regional segment, with poor price levels. Strukton Civiel has taken the decision not to compete with cut-price operators but this does mean that it was not able to achieve as much revenue in this segment. The second reason for the downward adjustment to revenue expectations is that Strukton Civiel was awarded fewer new projects than had been budgeted beforehand. The final reason is that a few very large projects were still in the design phase in 2011, which meant they were not yet generating much revenue. That was the case for the Groene Loper (the redesign of the A2 motorway at Maastricht) and the A15 Maasvlakte-Vaanplein motorway section, for example. These projects will only enter in millions of euros Revenue Operational result Number of employees (year-end)) Strukton Annual Report 2011

31 2011 in brief The results are good, although one project is performing less well The acquisition of Ooms Civiel gives nationwide coverage in road construction A large number of projects were delivered in 2011 Preparations work for the Groene Loper and A15 Maasvlakte-Vaanplein projects are in full swing Interest in immersed tunnel projects is ensuring spin-offs all around the world The work on the Noord/Zuidlijn underground is progressing successfully and smoothly There is considerable interest in Strukton Civiel s engineering works in the form of prizes and nominations the production phase in But these projects do give Strukton Civiel s order book a sound base. Less revenue meant that Strukton Civiel needed to take a critical look at the general level of costs. Costs were already low but have still been further improved. Staffing levels were included in the assessment and the lower revenue unfortunately necessitated the loss of jobs, although only to a limited degree. Strategy Strukton Civiel s strategy is focused on achieving steady, viable growth with a target volume of around half a billion euros. The company aims to achieve this by extending the infrastructure chain and broadening its coverage of the supply chain in specialist areas. Strukton Civiel will do this by entering into partnerships and acquiring or developing specialist expertise. An important strategic decision was to achieve nationwide coverage in road construction. To realise this, Reef Infra was acquired in 2006, giving the company coverage of the eastern part of the Netherlands. Ooms Civiel, which has operations in the west of the Netherlands, was purchased in This coverage has improved Strukton Civiel s strategic position, enabling it to operate at the national level in the road construction segment as well as to take on major integrated projects. Over the next few years, clients will take on a more prominent role within the existing strategy. Strukton Civiel will also start concentrating on a number of specialist techniques and project categories such as the realisation of parking solutions and the consolidation of its position as global market leader in tunnel immersion. The National Geographic Channel documentary about the Busan-Geoje Fixed Link project in South Korea, which was transmitted in 193 countries, resulted in global spin-off; parties around the world have approached Strukton Civiel as a sparring partner or participant in tunnel projects. In addition to the two aforementioned priority activities, Strukton Civiel is focusing on specialist foundation technology, renewable energy and soundproofing facilities using alternative materials. A new business unit Strukton Asset Management Civiel was set up in This business unit will focus on the long-term maintenance of DBFMO projects such as the A15 Maasvlakte- Vaanplein and Groene Loper projects. In creating this business unit, Strukton is making sure it will have expertise in long-term maintenance. In the first place, it will be able to offer that expertise to clients. However, it will also be able to use it during the design process in order to create smart designs from a maintenance point of view. Another new strategic business unit is Strukton Verkeerstechnieken, which focuses on traffic management systems and technical systems for tunnels. Sustainability Strukton Civiel reinforced its CSR policy in Its directors see this as a key element within its general policy and as a means of generating new business. Accordingly, sustainability is 31 Strukton Annual Report 2011

32 Strukton Civiel a recurring theme in Strukton Civiel s projects. Thanks to the Afvalbank Nederland business unit, Strukton Civiel is increasingly able to separate its own waste streams at the source and reuse the materials released in its own projects. Strukton Civiel s aim in the construction of the car park garage for the DUO project is to use only recycled concrete. As in 2010, Strukton again obtained certification for level 5 of the CO2 performance ladder in The business units acquired from Ooms Civiel had even already been certified for level 5 of the revised performance ladder in December. Strukton Sustainable Energy is working on the development of a tidal power plant at the Oosterschelde storm surge barrier. Planning permission was obtained for this in Prizes and nominations Strukton Civiel attracted considerable interest in its projects in 2011 in the form of prizes and nominations. For example, Strukton Afzinktechnieken won both the jury prize and the public prize for best infrastructure team in the Netherlands for its work in immersing the tunnel section under Amsterdam Centraal Station. The Strukton Afzinktechnieken team was also nominated for the Erasmus Innovation Award, the International Tunnelling Awards in Hong Kong and the Cobouw Award. The Groene Loper project in Maastricht was nominated for the Schreuder prize and the Busan-Geoje Fixed Link in South Korea received a nomination for the Concrete Prize. The DUO project was awarded the Golden Brick. The acquisition of the road construction company Ooms Civiel gives nationwide coverage and has improved Strukton Civiel s strategic position Jos Hegeman chairman of the board at Strukton Civiel 32 Strukton Annual Report 2011

33 Strukton Civiel Projects Strukton Civiel built two ecoducts in 2011 for the Groene Loper project. Furthermore, the legal decision on the routing became final and conclusive, which meant construction work could start. The preparatory work has now started: rerouting the cabling and piping, diverting the traffic, demolishing a number of houses and starting with building the construction pit walls. Key milestones have also been achieved in the Noord/Zuidlijn underground. For example, the basic shell has been completed for the underground metro station under the forecourt. As a result, the main entrance to Amsterdam CS could be reopened. The underground pedestrian connection between the new metro station and the existing eastern metro line was also finished. The immersion of the tunnel element under the station has also successfully been completed. Interested parties around the world were able to follow this exciting process live via the Internet. The first phase of the roofing for the bus station and the walkway on the River IJ side has also been completed. The second and final phase is scheduled for the second half of Strukton Infratechnieken completed the traverse known as Via de Kijkbuis at the Media Park in Hilversum. Another delivery in 2011 was the Hilton Hotel, a hotel in the heart of Amsterdam with 553 rooms. Strukton Civiel Projecten completed the work on the Muiderbrug bridge, which has been covered with a new layer of reinforced concrete. The Houtwal multi-storey car park in Harderwijk has also been completed. The disruption to local residents was kept to a minimum, partly because Strukton Civiel removed the soil that was excavated via discharge pipes through the sewers rather than over the road. At the start of January 2012, Strukton Civiel started the construction of the Westerstraat underground car park in Emmen. The same approach will be used here as for Harderwijk: diaphragm walls built in situ. The experience gained with previous underground car parks means new clients are able to benefit from high quality at a competitive price while the disruption caused by the building work is kept to a minimum. Furthermore, the N57 aqueduct was delivered and Strukton Civiel started on the preparatory work for the construction of the Botlekbrug bridge for the A15 Maasvlakte-Vaanplein project. In Rotterdam, Strukton delivered the Museumpark garage. This car park includes a water reservoir; in the event of heavy rain, it temporarily stores excess water from the surrounding area, which can then be discharged. The new foundations for Kasteel de Haar in Haarzuilens were also finished. The Colijn business unit completed the Rijnhavenbrug in 2011, a new bascule bridge in Rotterdam. In 2011 the VleuGel project was taken on and started. This project involves widening the track on the south side of Utrecht and building a new station, Vaartsche Rijn. 33 Strukton Annual Report 2011

34 Strukton Bouw Strukton Bouw achieved a profit in 2011, albeit a small one. Strukton Bouw was able to hold its ground despite the problematic market conditions. The order book is reasonably full. Result A profit, albeit a modest one, was recorded for both the EBIT and the net result. Prior-year charges for projects that have already been closed and a provision for reorganisation had negative effects, which were offset by a good operational result. in millions of euros Revenue Operational result Number of employees (year-end) Strukton Annual Report 2011

35 2011 in brief The net result for 2011 was positive Most of the revenue for 2012 has already been secured Revenue in 2012 is expected to be down on 2011, so another round of redundancies was needed at the end of 2011 More foreign players in the Dutch market means both competition and opportunities The strategy has been refined further; the focus is on healthcare projects, building hotels, accommodation for students and young people, data centres and temporary housing, and the conversion of offices for other uses The smart construction method is being introduced Market situation and organisation The market is still exceptionally challenging. There has been a clear increase in the number of foreign players present on the Dutch market, a logical consequence of the market situation elsewhere in Europe. These parties are looking for Dutch partners, such as Strukton, in their efforts to win contracts. This development obviously means that the company is facing more competition, but also ensures that Strukton Bouw stays alert and focused. International collaboration has led to interest in cooperation with the other Strukton operating companies. One example is the tender for the European Patent Office, where Strukton Bouw, Strukton Civiel and Strukton Worksphere are participating in partnership with the Spanish company FCC. A further adjustment to the size of the workforce was unavoidable at the end of 2011, given order book volumes. After this reorganisation, Strukton Bouw can face 2012 with confidence. Much of the revenue has already been secured and the tendering efforts are focused on the second half of 2012 and Strategy The strategy has been refined further; the focus is on healthcare projects, construction (building hotels, accommodation for students and young people, data centres and temporary housing) and the conversion of offices for other uses. There are a reasonable number of projects on the market but Strukton Bouw has decided to be very selective in its bidding and only to take part in tenders where it has a sufficient probability of success. There has also been a slight adjustment to the approach in existing projects. Strukton Bouw has decided to introduce the smart construction method among its employees. The inspiration for this is the Lean Production method adopted in the automobile industry where this way of thinking and working has turned out to be very successful. The expectation is that a more efficient approach can be achieved by sitting down to discuss the plan of approach with all the relevant parties in the supply chain before a project starts. This has a positive effect on the quality, the schedule, productivity and job satisfaction. Strukton Bouw is adopting this way of working with the aim of reducing project costs and thus strengthening its competitive position. 35 Strukton Annual Report 2011

36 Strukton Bouw Sustainability Sustainability is part and parcel of the business process at Strukton Bouw. Accordingly, this aspect is taken into account as a matter of course in decisions made by its directors and project managers. Some examples are the choice of company vehicles, the layout for its offices and the advice Strukton Bouw gives to clients. In addition, a pilot for building site logistics was started in 2011 in collaboration with TNO and five subcontractors and suppliers. The options considered were reducing the number of empty journeys through collaboration, outsourcing transportation to a single logistics provider, the possibility of letting staff travel to the building site by public transport or else to stay in a hotel and finally, a distribution centre where goods from multiple suppliers could be combined and then transported to the building site. Projects Various construction projects were delivered in For example the DUO building for the Education Executive Agency and Regional Tax Office in Groningen was put into use. This architectural tour de force has attracted considerable interest. For example, DUO won the Golden Brick in 2011 for the most attractive building in Groningen. Work will continue over the next few years on the construction of the underground car park, the pavilion and the city garden. Staying in Groningen, the shell for the offices and the multi-storey car park on Damsterdiep road were delivered. The final phase of the Kromhout Barracks in Utrecht was delivered, as was the Conservatorium Hotel in Amsterdam. The renovation of the Utrecht Provincial Government Building was finished at the start of A number of new projects were started in 2011, including the Ziggo Dome concert venue. Strukton Bouw took over this project after another building company went into liquidation. The Ziggo Dome can seat more than 15,000 visitors and is constructed in such a way that a performer or organiser can use the building as they see fit. For instance, the ceiling is so strong that a truck can be hung from it and the floor has been designed to be strong enough to support the load of a swimming pool. The Ziggo Dome is expected to be completed in spring Strukton Bouw has refined its strategy and is now focusing on healthcare, accommodation for students and young people, hotels and the conversion of offices for other uses Gert Jan Vos director of Strukton Bouw 36 Strukton Annual Report 2011

37 Strukton Bouw At a stone s throw from the Ziggo Dome, Strukton Bouw is working on the Fletcher Hotel along the A2 motorway close to Amsterdam. Strukton Bouw was able to win this contract because it proposed an extremely efficient construction method. Building up the completely circular building from a prefab core enables a substantial reduction in the time for the construction phase and also limits the risks. The compact structure makes the building very energy efficient. The hotel will open at the end of Other projects in progress are Nieuwe Voorstad in Nijmegen, the new workshop for Strukton Rail in Zutphen, the Den Haag CS public transport terminal and platforms 3, 4 and 5 at Utrecht Centraal station. The work on this transport hub in the The Hague began at the start of One very prominent activity was the installation of the construction crane in the station concourse. The 74 metre long boom was lifted over an office block using the largest mobile crane in Europe and was then fitted onto the 75 metre high mast. Over the next eighteen months the crane will be used to dismantle the old roof and install the new roof. The work on the public transport terminal is particularly complex as the station is remaining in use while the work is carried out. Strukton is carrying out as much of the work as possible at night in order to minimise disruption to passengers. Various projects are scheduled for For example, Strukton Bouw will start on the work for the Eindhoven International School and the construction of houses and apartments for the Land in Zicht project in Haarlem. The Nieuw Graswijk project in Assen was acquired at the start of This involves demolition work and new buildings for a care institution and the construction of detached homes. De Basis in Doorn was also acquired in early This project is for the construction of a new building for the training and after-care centre. The new building will have conference facilities, accommodation and offices (totalling approx. 7,000 m 2 ). 37 Strukton Annual Report 2011

38 Strukton Worksphere Strukton Worksphere had an extremely good year in 2011 and was able to realise good results, achieving growth despite a substantial falling-off in the market and pressure on margins. Result Strukton Worksphere has managed to achieve these results (as in 2010) by running a tight ship and keeping a close eye on the costs. That policy will also be continued in Jobs have been retained and there have been no reorganisations. The good results are a direct consequence of the strategy of ensuring proper customer intimacy. Strukton Worksphere has long-term, stable contracts with long-standing clients; this ensures a systematic flow of orders. The company was responsible for maintaining an area totalling 20 million square metres in 2011, in millions of euros Revenue Operational result Number of employees (year-end) 1,466 1, Strukton Annual Report 2011

39 2011 in brief The results for 2011 are good Strukton Worksphere was responsible for the maintenance of an area totalling 20 million square meters in 2011 There are opportunities for growth in revitalising property, in healthcare and in data centres Substantial financial investments were required for starting up PPP projects. Strukton Worksphere is now reaping the benefits of these investments The client for the innovative Green Buildings project in Rotterdam is very satisfied with progress representing a strong position in the market. The focus is on further strengthening this position and investing in long-term client relationships. In addition to its maintenance activities, Strukton Worksphere has been successful in a number of large projects. These involved data centres and office renovations in particular and included preparing them for the New World of Work. Market situation and strategy There are increasing numbers of players in the maintenance market who compete exclusively on price. Strukton Worksphere would also like to compete in that segment by developing an alternative for this approach and becoming the cost leader. Strukton Worksphere is doing that by investing in efficiency and IT applications, bringing the costs down. Lean Six Sigma will allow Strukton Worksphere to constantly analyse its working processes, looking at where there are possibilities for improvement and where efficiency gains could potentially be made. This results in a customised model for the client in which depending on the project and the budget a choice can be made between a competitive, no-frills offer, a high-quality offer or anything in between. This approach allows Strukton Worksphere to improve its pricing levels and market offerings without compromising on the basic quality, of course. Increasing numbers of clients are realising that lifecycle costs are more important than the construction costs alone. Strukton Worksphere will be making investments once again in 2012 in further improvements to maintenance and management. It will also be focusing on revitalising buildings for new and existing clients. There are substantial opportunities in this final category, both in national and local government and among the owners and users of buildings. Healthcare is another growth market. Strukton Worksphere envisages a transition from the traditional healthcare sector models towards closer co-operation between hospitals with their cure function and care institutions. These healthcare components are coming closer together in a literal sense too. This transition naturally requires changes to healthcare facilities as well. Data centres are also an interesting, growing market for Strukton Worksphere where it is already carrying out various activities. A complicating factor with these activities is that the existing customer processes must be able to continue during the work. Strukton Worksphere s distinguishing features are the degree to which it takes its clients into account and its affinity with client processes. The projects it has completed, which all involved a substantial risk of failure, have gone thoroughly satisfactorily as far as the clients are concerned. 39 Strukton Annual Report 2011

40 Strukton Worksphere Various orders have been won and completed in cooperation with the other operating companies. For instance, Strukton Worksphere completed the work on the car park and underground water reservoir for Museumpark in Rotterdam together with Strukton Civiel. The activities for the Global Switch data centre were realised jointly with Strukton Bouw. There has also been close cooperation with Strukton Integrale Projecten, including for the realisation of the Energy Service Companies (ESCOs). The benefits for clients are obvious: a single point of contact. Sustainability Strukton Worksphere gives structural advice to clients about sustainable solutions. Our proposals often contain a sustainable alternative in addition to the activities requested. Moreover, Strukton Worksphere is also making internal investments in sustainability, including the purchase of sustainable printers, emission-free paper and electric scooters, as well as by introducing video conferencing and providing recharging points for electric vehicles at various offices. All our energy purchases are green and staff are encouraged strongly to choose more environmentally friendly vehicles. Strukton Worksphere took energy-saving measures, such as installing LED lighting, in the conversion of the new accommodation in the Strukton head office in Utrecht. These measures will be used as a business case for clients. Additionally, energy management has been introduced at all the offices. This is a system that gives a picture of the energy output every fifteen minutes. The output is analysed every month and consumption is adjusted where necessary. This system will also be applied at Strukton Bouw and Strukton Civiel buildings in This will realise energy savings of 2 to 3% per year. Projects In 2011, Strukton Worksphere started the maintenance and commercial operation of a number of PPP projects such as DUO (the Education Executive Agency and Regional Tax Office building), the Kromhout Barracks and the Ministry of Finance. The International School in Eindhoven will be added to that list in Substantial financial investments were required over recent years for starting up these PPP projects. Strukton Worksphere is now reaping the benefits of those investments. Many elements in a PPP project also turn out to provide added value in all other performance-driven maintenance contracts also saw the completion of the work for the Princess Máxima Medisch Centrum, a hospital in Veldhoven. In the meantime, Strukton Worksphere has been able to start follow-on orders for the same client, thanks to the level of satisfaction with what has been completed so far. 40 Strukton Annual Report 2011

41 Our distinguishing features are the degree to which we take our clients into account and our affinity with the client s processes. They can keep working while we go about our work Marinus Schimmel director of Strukton Worksphere In April 2011, work was commenced on the energy management and maintenance of nine swimming pools in Rotterdam as part of the Rotterdam Green Buildings project. At the same time, a start was made on the realisation of energy-saving measures and other measures for increased comfort, such as installing new boilers, structural alterations, thermal storage (heat and cold), covering the swimming pools and installing UV cleaning equipment so that a great deal less chlorine is needed for cleaning the water. All these measures and activities were completed in 2011 and have yielded energy savings of 34%. They have been fully financed from the savings on energy and maintenance. Both the client and the users are very happy with the results in terms of energy savings and comfort. Strukton Worksphere completed the pilot Transition to a control model for the Government Buildings Agency in This pilot project examined whether it would be desirable and more efficient to place all the hard service activities with a single party Strukton Worksphere rather than having the Government Buildings Agency manage all the maintenance contracts itself. The pilot went smoothly and both the client and the end user are extremely satisfied with the results. The Government Buildings Agency will be testing the results further on the market during Strukton Worksphere is involved as a partner in an advisory capacity and has produced the guideline entitled Maincontracting an integrated view of management and maintenance. Global Switch is one of the largest data centres in the Netherlands; it provides server space for its customers. These include a number of very big, prestigious customers. Strukton Worksphere obtained the order in 2011 for creating a large number of rooms within the existing Global Switch building. This is another order with a high risk of problems because many installations have to be built in a short timeframe in a critical and vulnerable environment. The activities were a success and have been completed to the client s satisfaction. A new maintenance contract has been signed with TNO for their office premises in the Randstad conurbation, including Delft and Leiden. Strukton Worksphere won this order thanks to its specialist experience in the field. A performance-related contract has been signed for the office premises, whereas the contract for the laboratories has a best-effort obligation with the intention of developing it to become a performance-related contract. As of January 2012, Strukton Worksphere is handling the maintenance of the technical installations of the buildings at the nine sites of the Inholland university of applied sciences. The contract is for a one-year term and, if the client is satisfied, can be extended to ten years. The principles underpinning the agreement are sustainability, quality and service. 41 Strukton Annual Report 2011

42 Strukton Integrale Projecten The disposal of 80% of the stake in six PPP projects has had a positive effect on the operating result. The financial resources that have been released by this transaction are being used for investments in new PPP projects. Result 80% of the stake in six of the seven PPP projects on the order book of Strukton Integrale Projecten has been transferred to DIF Infrastructure II (DIF). These projects represent a total contract value of approximately 2.3 billion and run for 20 to 28 years after the construction phase. Strukton is retaining a 20% shareholding and remains operationally responsible for the projects. Strukton Integrale Projecten remains responsible for the day-to-day management of the project companies and the special-purpose company management. This transaction has allowed Strukton Integrale Projecten to realise significant added financial value. The financial resources that have been released by this transaction are being used by Strukton in part to pay off debts and in part for participation in new tenders and for investments in new PPP projects. Strukton s strategy for 42 Strukton Annual Report 2011

43 2011 in brief 80% of the stake in six PPP projects has been transferred to an investor. Strukton retains operational responsibility There are increasing numbers of PPP projects on the market, both national and regional projects Strukton has set up an ESCo to improve the sustainability of municipal swimming pools in Rotterdam The Education Executive Agency and Regional Tax Office building in Groningen and the Kromhout Barracks were put into use future projects will continue to consist of transferring the majority interests to other investors after a number of years, once the key project risks have been managed by Strukton Integrale Projecten. It should be emphasised here that Strukton will remain operationally responsible throughout the term of the contract. Strategic focus and market situation The strategy of Strukton Integrale Projecten will continue to focus on projects that contain the maximum potential for profit for all Strukton s operating companies. Clear growth can be seen in the market as a whole and the PPP market is becoming increasingly mature. This can be seen e.g. from the interest in such projects from both Dutch and foreign market players. In the coalition agreement, the Cabinet has made clear that it can see the added value of PPP projects in both quality and financial terms. The Department of Public Works and Water Management has announced a programme of 32 PPP projects, as described in its own long-term forecast. These projects involve infrastructure, wet infrastructure and rail. Strukton sees this announcement as confirmation of the growth in the market. The growth in the number of PPP projects can also be seen at the Government Buildings Agency. There are indeed fewer new construction projects because of the number of unoccupied offices, but the Government Buildings Agency is busy preparing five new projects. The RIVM (National Institute for Public Health and the Environment) will be moving from Bilthoven to Utrecht and the building of the former Ministry of Housing, Spatial Planning and the Environment in The Hague is being renovated to provide accommodation for two ministries there in future. Additionally, the Dutch Bureau for Economic Policy Analysis (CPB), the Dutch Institute for Social Research and the Dutch Environmental Assessment Agency will be jointly accommodated in the listed building at Bezuidenhoutseweg 30 in The Hague. As well as growth at the national government level, Strukton Integrale Projecten is also seeing clear growth in the number of regional PPP projects. Strukton has always been an advocate of this and is pleased to see that these efforts are bearing fruit. For instance, Strukton Integrale Projecten has been heavily involved in the market consultations for regional projects, preparatory to putting them on the market. This applies for example to the town hall in Den Helder, a multifunctional centre in Venlo and the most striking example the RegioTram project in Groningen. This demonstrates that there are more opportunities for DBFMO projects within regional and local governmental authorities. Another important development in PPP projects is the establishment of PPS support, a PPP office that has been set up by the ministries of Infrastructure & the Environment, Security & Justice, and Finance. The initiative focuses on making the knowledge and experience that the national governmental authorities have about DBFM and DBFMO projects available for the regional and local governmental authorities, thereby providing a stimulus for those parties. 43 Strukton Annual Report 2011

44 Strukton Integrale Projecten This knowledge is being bundled with that of PPS Netwerk Nederland, the body that gathers the know-how available within the market and thereby helps to develop the market further. PPP Awards Strukton won three important prizes in 2011 at the Building Business and International Project Finance Association PPP Awards. For instance, the Safire consortium (of which Strukton is a member) won the main prize of the PPP Awards for the best PPP example project over the last ten years the renovation of the Ministry of Finance building. This was the first PPP project for government buildings and therefore sets an example for current and future projects. New standards were developed for this project, including a DBFMO contract, output specification, payment mechanisms and a monitoring system, all of which have been applied in other government building projects. Experience has also been acquired in setting up the correct development and service organisations for this type of project. With the Komfort and DUO2 consortia, Strukton also won all the subsidiary prizes, namely those for the best technical and legal team (for the Kromhout Barracks in Utrecht) and the best financial team (for the Education Executive Agency and Regional Tax Office in Groningen). Strukton Integrale Projecten is proud of these awards and sees it as confirmation of the leading position it has in de PPP project market, particularly for business accommodation. Projects Good progress was made in 2011 with the realisation of a new building for the Education Executive Agency and Regional Tax Office in Groningen. Phase 1 the building itself has been in use since March This project has constructed one of the most sustainable offices in the Netherlands. Thanks to its innovative architecture, the office building is seen as a genuine landmark for Groningen. Currently, Strukton is working on the realisation of the garage for parking, the town gardens and the pavilion. These are expected to be in use by 2013, after which Strukton and the consortium will also be handling their maintenance and commercial operation. In 2011, Strukton and the Komfort consortium completed the second phase of the Kromhout Barracks in Utrecht; the complete complex has been in use since 1 February We have always made efforts to broaden the market and we are now seeing a clear increase in the number of regional PPP projects. The tender for RegioTram in Groningen is a prime example of this. Erik Hermsen director of Strukton Integrale Projecten 44 Strukton Annual Report 2011

45 Strukton Integrale Projecten The first phase was completed back in 2010 and since then, two thousand Defence staff have been working on the site. The completion of the second phase meant that the remaining thousand staff could also be relocated. The complex now accommodates more than three thousand Ministry of Defence staff. The Kromhout Barracks is the largest DBFMO office accommodation project in the Netherlands to date. The Rotterdam Green Buildings project started in For this project, Strukton is investing in energy-saving measures for nine swimming pools and is moreover giving a guarantee for the savings to be made during the first ten years. This refers not only to financial savings, but also to a reduction in CO2 emissions, improvement of air quality and more comfort overall for the swimming-pool visitors. What is unique about this is that the client has linked a long-term maintenance contract to these energy-saving measures. It is the first time that a maintenance plus energy performance contract has been signed in the Netherlands. Strukton Integrale Projecten set up an Energy Service Company (ESCo) in 2011 for the purpose. A unique contract structure and warranty structure allowed external financing to be attracted for this. In addition to setting up the ESCo and signing the contract, Strukton started management and maintenance in April 2011 as well as the realisation of the energy-saving measures. Strukton is using its own specialists for this, and is also cooperating with an external partner, Hellebrekers Technieken. The swimming pool managers are extremely satisfied with the knowledge and experience that Strukton is bringing to the table for the joint management of the swimming pools. This ESCo format can be seen as a light variant of a PPP. It is also applicable e.g. for buildings with a social function such as theatres, care institutions and schools. For the A15 Maasvlakte-Vaanplein, a large scale DBFMO road project, 2011 was primarily about the startup and the preparations. At the end of 2011, the Minister of Infrastructure & the Environment gave the official green light for the visible work. The road capacity on the A15 motorway between the Maasvlakte and the Vaanplein will be increased by 65% over the coming years. Additionally, a new Botlekbrug bridge will allow better shipping traffic flows. Tenders Together with the TramTeam consortium, Strukton has come through the project vision phase in the tender for RegioTram Groningen. Which of the two remaining parties will be chosen as the preferred bidder will be announced at the end of Strukton Integrale Projecten sees this as an example project that may act as a breakthrough for the regional light rail market. The RegioTram project is also being monitored closely by other municipalities. The FAST Lanes consortium, which includes Strukton, is one of the three candidates that have passed the prequalification stage for the SAA-A1/A6 project, a DBFM project for the Department of Public Works and Water Management. This is the first DBFM project for the Schiphol- Amsterdam-Almere corridor (the A1-A6 motorway route section). The project will be awarded at the end of The Hart van Zuid ( Heart of the South ) project also came on the market in This is a PPP project in Rotterdam for redesigning the area around the Zuidplein shopping centre and the Ahoy exhibition halls/events centre, including a renovated bus station, the construction of a theatre, renovating swimming pools and future-proofing the Ahoy. Strukton has registered for this project and is currently in the competitive dialogue phase. 45 Strukton Annual Report 2011

46 Corporate Governance Sound business practices, acting with integrity, respect, supervision, transparent reporting and accountability: these are the key aspects of Strukton s corporate governance policy. Strukton s corporate governance is determined by the legislation, judicial practice and codes of best practice in the countries in which Strukton has its operations. Strukton has voluntarily adopted those aspects of best practices relevant to it and aims to be consistent with the Dutch Corporate Governance Code. Strukton Groep nv is a public limited company incorporated under Dutch law. The company is managed by the Chairman of the Board. Oranjewoud nv holds 100% of the shares in Strukton Groep nv. Management Board The chairman of the board has the final responsibility for the entire venture. He is responsible for running the company. The chairman of the board develops and sets the company s philosophy as well as the mission, strategy and objectives based on that philosophy. The business unit managers are responsible for formulating and executing their operating company s strategy. Responsibility for the management and day-to-day decisions of the business units also lies with the business unit management boards as defined in the articles of association. The chairmen of the business unit management boards plus the chairman of the board of Strukton Groep together constitute the Group Management Committee. This committee has the task of preparing policy and advising the chairman of the board. The chairman of the board is responsible for managing the company transparently. To this end, Group Management regulations have been drawn up and approved by the shareholder. The chairman of the board performs his tasks in the company s interests. The chairman of the board provides the shareholder and its Supervisory Board at regular intervals with the information and resources they need to exercise their duties properly. Once a year, the chairman of the board reports to the General Meeting of Shareholders on the results for the past reporting year. 46 Strukton Annual Report 2011

47 Corporate Governance Appointment and remuneration of the chairman of the board The shareholder appoints the members of the Strukton board. The company s board consists of Mr G.P. Sanderink. He was appointed as chairman on 29 October He is also Managing Director of Oranjewoud nv. Mr R.T.A. Steenvoorden was also on the board of Strukton Groep in He resigned as of 1 December The shareholder determines the remuneration for board members, based on recommendations by the Supervisory Board. Supervisory Board Strukton Groep nv does not have its own Supervisory Board. An independent Supervisory Board has been set up for the shareholder Oranjewoud nv. It is charged with supervising the Oranjewoud nv Executive Board, the policy pursued and the general affairs of the company and its associated companies, as well as advising the Oranjewoud nv Executive Board. In view of the size of Strukton Groep and its relevance within the Oranjewoud group, regular meetings are held between the chairman of the board and the Oranjewoud nv Supervisory Board. Conflict of interest and transactions between related parties The Oranjewoud nv Supervisory Board is responsible for solving any conflicts of interest between the company on the one hand and the Executive Board of Oranjewoud nv, the Supervisory Board, the Strukton Groep board and the external auditor on the other hand. All decisions to enter into transactions entailing potential conflicts of interest for the chairman of the board or any member of the Supervisory Board that are of material significance to the company and/or the chairman of the board require the approval of the Supervisory Board. The chairman of the board is required to notify the shareholder and the chairman of the Supervisory Board immediately (plus the other members of the Group Management Board, if it concerns a member of that board) of any actual or potential conflict of interest of significance to the company and/or himself and must provide all relevant information. At present, there are only limited transactions with the shareholder and these are conducted in line with market practice. 47 Strukton Annual Report 2011

48 Corporate Governance Auditor The external auditor is appointed by the General Meeting of Shareholders. Since the takeover by Oranjewoud in 2010, Ernst & Young has been appointed as the external auditor. The chairman of the board evaluates the performance of the external auditor once every four years. The conclusions are presented to the General Meeting of Shareholders. The external auditor attends the meetings between the chairman of the board and the shareholder at which the report on the audit of the financial statements is discussed and at which the adoption of the financial statements is considered. The auditor also attends the meetings at which the half year figures are discussed. Some years ago, the chairman of the board took measures to safeguard the objectivity and independence of the auditor by introducing restrictions on other work that may be assigned to the auditor. Relations with external stakeholders In view of the company s importance and position, Strukton regularly discloses results and significant events through press releases and publications on its website. Regulations Strukton has various regulations that provide a framework for the way various bodies function and a specification of the rules that apply within Strukton. Information about the various management bodies, the regulations and the code of conduct applicable to Strukton employees can be found at under Corporate Governance. The regulations are assessed from time to time and amended where necessary. These regulations are: the articles of association code of conduct the procedure for dealing with suspected inappropriate behaviour (whistleblowers scheme) details of the individual directors 48 Strukton Annual Report 2011

49 Risk management Like other companies, Strukton has to deal with various commercial, operational and financial risks. These risks are inherent in its business operations. The company aims to limit these risks through a systematic approach to tackling them, at both the strategic and the operational level. Strukton takes a systematic approach to identifying and following up risks within the company. Strukton uses the framework of the Committee of Sponsoring Organisations (COSO) of the Treadway Commission to identify and deal with duplications, inconsistencies and gaps in the risk management and internal control of existing activities. In 2011, the various risks were once again identified and assessed. The key issues relating to business risks and strategic objectives are included in this section. Safety This is the risk that operational activities may result in accidents, material damage or loss of reputation, or that they are not executed in accordance with health and safety regulations. All employees have access to the QHSE systems (quality, health, safety and the environment). These systems are regularly evaluated by external accredited bodies with certifying powers. Prevention is given the highest priority within Strukton. The safety policy also pays attention to human behaviour as a risk factor (awareness). It aims to keep this risk to a minimum through the careful preparation of operations, analyses of near accidents and toolbox (industrial safety) meetings. Safety at Strukton is discussed in more detail in the section on Corporate Social Responsibility. Clients procurement policies Strukton has a number of large clients. Around 20% of its turnover is in the Dutch rail market. This market is effectively a monopsony. There has been a fall over the past few years in the volume generated by ProRail the main client in this market. ProRail is actively encouraging new parties in their attempts to enter this technologically and logistically complex market. As the market leader, Strukton is faced with the consequences of this policy. Strukton must stay continually alert to the need to keep its organisational overhead and the quality offered in line with the market if it is to remain competitive. 49 Strukton Annual Report 2011

50 Risk management Tendering costs Strukton obtains a significant proportion of its turnover through public tenders. The costs of tendering are rising due to the increasing complexity of some of these tenders; this applies in particular to projects put out to tender on a Design and Construct (D&C) or DBFMO basis. There is generally only very limited compensation from the commissioning party for such costs. If Strukton s bid is not successful, the company does not have any way of recuperating the costs incurred. One of the procedures in its operations is therefore a critical selection of the tenders for which to bid. Conflicts of interest The takeover by Oranjewoud nv in 2010 has led to a risk of Strukton being disqualified from taking part in tenders where the Oranjewoud engineering or consultancy sides were involved in the preliminary process leading up to the tender. Various agreements have been made to avoid having the two parties fulfil incompatible roles within the same project. Implementation in the Netherlands is based on the Separation of Interests policy document issued by the Department of Public Works & Water Management. Design and execution Strukton mainly carries out its work in the form of projects for third parties. The complexity and extent of the work can vary considerably and therefore so can the size of the order. In line with the company s strategy, the business units regularly tender for complex projects in which both execution risks and design risks are involved. Incorrect estimates can lead to losses and negative cash flows, depending on the form of contract. That is why Strukton attaches such great importance to the systematic application of procedures, both during the acquisition phase and during the execution phase. Reviews by third parties are seen as a very valuable way of reducing design risks. In addition, Strukton has taken out an insurance policy for design faults. Fixed prices Strukton often operates in situations in which clients prefer to pass on risks for a fixed price. Strukton only accepts risks it can manage itself. Such risks can lead to losses and negative cash flows. For a number of years, Strukton has been using an advanced system for identifying and quantifying risks as part of its methodology for monitoring projects. This is applied in both the acquisition phase and the execution phase. This model allows the chairman of the board to determine the company s risk profile on a regular basis. Strukton is reluctant to take on inflation risks at the moment in view of the potentially fluctuating prices for raw materials. A suitable indexation scheme is a key point for attention in long-running projects. Labour market If Strukton is to operate successfully, it needs to have the right employees with the right skills and plenty of enthusiasm. The persistent shortages in parts of the labour market make it difficult to recruit sufficient numbers of suitably qualified people. That is why Strukton is investing in its position as a preferred employer, in particular by creating attractive working conditions in which people are able to develop their talents properly. 50 Strukton Annual Report 2011

51 Risk management Recession The construction sector operates at the tail end of the economic cycle, which means that the effects of the recession will still be clearly noticeable in 2012 and beyond. Companies are investing less and are cutting back on excess credit facilities. The expectation is that Strukton will continue to be confronted with cautious clients and even in a few cases with the cancellation of contracts for the time being mainly in the private client market. However, its current order book consists primarily of projects for public sector authorities. Strukton is keeping a close watch on developments in its order book and the level of activity in relation to the size of the organisation so that it can take appropriate measures in good time. With regard to solvency, the company needs to be extra alert about payment risks where additional collateral is regularly required and the transfer of risks down the supply chain to subcontractors and suppliers. Strukton aims to reduce its vulnerability to cyclical fluctuations by ensuring that a substantial proportion of the turnover is from long-running and recurring projects. Client s wishes Strukton depends on contracts put out to tender by public and semi-public authorities for a large part of its turnover. Delays in political decision-making and changes to public authorities investment budgets affect the granting of contracts. During the preparations, Strukton pays a considerable amount of attention to the provision of information and publicity in order to create broad public support. Capacity utilisation Strukton is a capital-intensive company that manages an extensive, specialised range of equipment, particularly for rail infrastructure. This equipment is generally owned by Strukton. The costs are depreciated over the useful economic life of the equipment. If Strukton is unable to deploy this equipment to a sufficient extent at break-even rates, this may not lead directly to cash outflows but it does still have a negative impact on Strukton s results. Furthermore, many of Strukton s employees have permanent employment contracts. If these people cannot be deployed on current projects at break-even rates, for example because there is insufficient work, this will have a negative effect on the company s profitability and cash flows. Strukton Rail is dealing with this through international expansion in the European market and through the cross-border deployment of equipment and employees. In some cases, major investments are being shared with partners. Moreover, the risk of under-utilisation is limited throughout Strukton by continual efforts to increase the share of non-project related activities. The lifecycle approach used within all Strukton companies fits in with this. 51 Strukton Annual Report 2011

52 Risk management Available credit facilities As at the reporting date, Strukton had access to 95 million euros in committed credit facilities. The company s funding needs are forecast on a regular basis and the use of this credit facility is also monitored frequently. The funding documentation includes various covenants, primarily dealing with the company s ability to generate cash. These too are assessed with great regularity. The funding requirements take account of Strukton s capital expenditure obligations and payment obligations under the ongoing capital expenditure programmes, projects and PPP interests. Because the company s operations tend to be project-based, one-off negative project results can affect both funding requirements and the covenants. The size of that risk is restricted by a sharp focus on process control and by increasing the share of non-project related activities. Strukton also seeks to make further reductions in the company s net liabilities in the short term and thereby to repay the loans. Internal control systems The management board is responsible for the company s internal risk management and the control system and for assessing its effectiveness. The system is aimed at controlling risks associated with the business operations and realisation of the company s objectives. It also safeguards the effectiveness and efficiency of business processes and the consistency of the administrative processes. The risk management framework has been implemented throughout the group. Primary responsibility for the control system resides with the business units. Risk assessments are an integral part of the company s annual planning and control cycle, which is discussed each year with the shareholder. The risk management and risk control system for financial reporting purposes is based on the Strukton Code of Conduct. Clearly-defined accounting rules are laid down in the Strukton Reporting Manual and there is also a standard reporting structure. Once a year, the external auditor carries out audit activities in order to provide an auditor s report on the financial statements. The external auditor is appointed by the shareholder. Each year, in consultation with the chairman of the board, the shareholder determines the additional activities besides those required in the auditor s opinion. These may relate to specific risks, business processes or locations where the chairman of the board or shareholder considers further investigations to be desirable. Recommendations arising from external audit activities at every level are reported and followed up by the chairman of the board. Risk management framework The risk management framework includes the applicable Code of Conduct, the Management Board regulations, the assigned authorities, the planning and control cycle, and reports on these. 52 Strukton Annual Report 2011

53 Risk management Code of Conduct The whistleblowers scheme enables employees to reports alleged or actual irregularities within the company to a counsellor or the Group Management Board. The code of conduct can be found at and includes the whistleblowers scheme. Management Board regulations and representative authority There are regulations in place for both the chairman of the board and the management boards of the business units. In addition to duties, responsibilities and required approvals, these regulations also deal with representative authority. Representative authority, including the authority to sign documents, is held by each individual member of the Management Board as well as other officers appointed for this purpose by the Board, subject to the restrictions as filed with the Chamber of Commerce and Industry. Reporting structure The reporting structure at Strukton reflects the way in which the individual business units are run. The chairman of the board is responsible for introducing and guaranteeing effective controls. The success of these controls is measured through self-assessment by the business unit management boards and through regular assessments of the adequacy of the internal control system. Conclusions Based on the above-mentioned systems, the applicable frameworks and the associated reporting structure, our opinion is that the risk management and control system has been set up properly and that it functioned as it should during the year under review. The Group Management Board also believes that the financial statements do not contain any material misstatements. At present, there are no indications that the risk management and control system will fail to function properly in Utrecht, 8 May 2012 Chairman of the Board Gerard Sanderink 53 Strukton Annual Report 2011

54 Financial statements Consolidated statement of financial position 55 Consolidated statement of income 56 Consolidated statement of comprehensive income 57 Consolidated statement of changes in equity 58 Consolidated statement of cash flows 59 Notes to the consolidated financial statements 60 Accounting policies 60 Significant estimates and assumptions in the consolidated financial statements 74 Financial risk management Property, plant and equipment Intangible assets Investment property Associates Other financial assets Deferred tax assets and liabilities Inventories Trade and other receivables Construction work in progress Cash and cash equivalents Total equity Subordinated loans Long-term liabilities Provisions Trade and other payables Operating income and operational result Cost of raw materials, equipment and outsourced work Personnel expenses Other operating expenses Finance income and costs Income tax expense Workforce Financial instruments Statement of cash flows Commitments and contingencies, and security provided Related party transactions Events after the reporting period Services for concessions and PPPs Assets and liabilities held for sale Acquisitions Joint ventures Summary of principal group companies and associates 108 Company statement of financial position 111 Company statement of income 112 Notes to the company financial statements 113 Other information 117 Independent auditor s report Strukton Annual Report 2011

55 Consolidated statement of financial position (x EUR 1,000) Assets Notes Non-current assets Property, plant and equipment (1) 108, ,642 Intangible assets (2) 42,234 51,393 Investment property (3) 4,038 4,038 Associates (4) 32,891 31,006 Other financial assets (5) 82, ,049 Deferred tax assets (6) 3,546 8, , ,386 Current assets Current assets (7) 29,263 23,818 Trade and other receivables (8) 288, ,301 Construction work in progress (9) 106, ,766 Current income tax assets 813 1,074 Cash and cash equivalents (10) 104, , , ,795 Total assets 803, ,181 Equity and liabilities Equity Issued capital 2,269 2,269 Share premium reserve 10,000 10,000 Other reserves 160, ,927 Retained earnings 14,362 (15,486) Total equity (11) 186, ,710 Non-current liabilities Subordinated loans (12) 2,664 8,357 Non-current liabilities (13) 138, ,216 Provisions (14) 18,015 14,722 Liabilities (6) 6,382 7, , ,355 Current liabilities Trade and other payables (15) 360, ,165 Bank overdraft 3,762 27,428 Construction work in progress (9) 80, ,813 Current income tax liability 4,244 3,775 Provisions (14) 1,770 2, , ,116 Total equity and liabilities 803, , Strukton Annual Report 2011

56 Consolidated statement of income (x EUR 1,000) Notes Revenue (16) 1,317,976 1,437,475 Cost of raw materials, equipment and outsourced work (17) 666, ,492 Personnel expenses (18) 371, ,229 Other operating costs (19) 224, ,151 Total operating costs 1,262,699 1,379,872 Operational result (EBITDA) (16) 55,277 57,603 Amortisation of intangible assets and depreciation of property, plant and equipment (1)(2) 24,841 28,077 Impairment of intangible assets and property, plant and equipment (1)(2) 6,352 35,896 31,193 63,973 Operating result (EBIT) 24,084 (6,370) Finance income (20) 17,011 13,802 Finance costs (20) 22,097 20,086 (5,086) (6,284) Result of associates (4) 2,365 2,637 Profit before income tax (EBT) 21,363 (10,017) Income tax expense (21) 7,001 5,469 Profit for the period 14,362 (15,486) Attributable to: Equity holders in the parent company 14,362 (15,486) Non-controlling interest - - Profit for the period 14,362 (15,486) 56 Strukton Annual Report 2011

57 Consolidated statement of comprehensive income (x EUR 1,000) Notes Profit for the period 14,362 (15,486) Changes in fair value of derivatives for hedge accounting (11) 9,242 (3,004) Exchange rate differences (11) 53 2,912 Unrealised results of associates Change in actuarial reserve (2,424) (946) Other changes (14) 12 Income tax on unrealised results (1,671) 976 Unrealised results 5,737 (50) Total recognised income and expense for the period 20,099 (15,536) Attributable to: Equity holders in the parent company 20,099 (15,536) Non-controlling interest Strukton Annual Report 2011

58 Consolidated statement of changes in equity (x EUR 1,000) Notes Issued and Share Translation Statutory Hedging Actuarial Retained Undistributed Total paid-up premium reserve reserve reserve reserves profits earnings equity capital reserve of associates Equity as at 1 January 2010 (11) 2,269 - (1,586) 578 (14,324) (27) 184, ,246 Appropriation of profit (780) - Profit for the period (15,486) (15,486) Unrealised results - - 2, ( 2,238) (690) (22) - (50) Total recognised income and expense for the period - - 2, (2,238) (690) (22) (15,486) (15,536) Share premium - 10, ,000 Dividend paid Equity as at 31 December ,269 10,000 1, (16,562) (717) 185,314 (15,486) 166,710 Equity as at 1 January 2011 (11) 2,269 10,000 1, (16,562) (717) 185,314 (15,486) 166,710 Appropriation of profit (15,486) 15,486 - Profit for the period ,362 14,362 Unrealised results ,831 (1,784) 537-5,737 Total recognised income and expense for the period ,831 (1,784) ,362 20,099 Share premium Dividend paid Equity as at 31 December ,269 10,000 1, ( 9,731) (2,501) 170,365 14, , Strukton Annual Report 2011

59 Consolidated statement of cash flows (x EUR 1,000) Notes Cash flow from operating activities Profit for the period 14,362 (15,486) Changes without cash flows: Depreciation, amortisation and impairment 31,193 63,973 Ineffectiveness of interest-rate swaps 85 (434) Changes in provisions 2, Result of associates (2,365) (2,637) 30,946 61,076 Dividend distributed by associates Interest income and expense 16,070 17,585 Income tax 7,001 5,469 Interest received 8,143 4,633 Interest paid (7,331) (19,712) Income tax paid (3,908) (3,891) Result from disposal of PPP projects (12,415) - Result from disposal of property, plant and equipment (6,064) - Changes in working capital: Inventories (5,443) 777 Receivables (9,104) 51,608 Construction work in progress (9) (22,707) (50,325) Current liabilities, excluding banks (20,944) (14,025) Cash flow from ordinary activities (10,594) 38,509 PPP Receivables (29,077) (76,332) Cash flow from operating activities (39,671) (37,823) Cash flow used in investing activities Additions to intangible assets (678) (549) Additions to property, plant and equipment (18,756) (15,046) Additions/disposals of group companies 15,765 (305) Additions/disposals of associates (435) - Disposals of property, plant and equipment, including other changes 17,514 4,969 Other changes in shares in associates - - Decrease/increase in other financial assets (436) 5,086 Cash flow used in investing activities 12,974 (5,845) Cash flow from financing activities Subordinated loans taken out - - Repayments of subordinated loans - - Long-term loans taken out 52, ,840 Repayment of long-term loans (34,807) (88,737) Dividend paid - - Share premium - 10,000 Other changes 1,702 (829) Cash flow from financing activities 19,296 53,274 Recapitulation of cash flows From operating activities (39,671) (37,823) From investing activities 12,974 (5,845) From financing activities 19,296 53,274 Total cash flow (7,401) 9,606 Cash and cash equivalents at year-start 108,408 98,100 Cash and cash equivalents at year-end 101, ,408 Translation differences (45) (702) Change in cash and cash equivalents (24) (7,401) 9, Strukton Annual Report 2011

60 Notes to the consolidated financial statements Accounting policies Reporting entity Strukton Groep nv is a holding company that directly or indirectly holds a number of associates collectively known as Strukton. Strukton Groep nv has its registered office in Maarssen and is based in Utrecht. The 2011 consolidated financial statements of the company include the company and its subsidiaries (collectively referred to as the Group ) and the Group s interests in associates and entities over which joint control is exercised. The core activities of Strukton cover the areas of rail infrastructure and information systems, civil infrastructure, construction and property development, technical management and installation technology, and integrated projects. A summary of principal group companies and associates is included in Note 32, showing the companies included in the consolidation. Statements of joint and several liability have been filed for a number of group companies. As at 31 December 2011, Oranjewoud nv held all the shares of Strukton Groep nv. Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use within the European Union (EU-IFRS). The consolidated financial statements were issued on 8 May 2012 by the Group Management Board and will be presented to the General Meeting of Shareholders of 8 May 2012 for adoption. Policies applied for the consolidated financial statements The consolidated financial statements are presented in euros, serving as the company s functional currency. All the financial figures in euros have been rounded to the nearest thousand. The consolidated financial statements are prepared on the basis of historical cost, unless otherwise indicated. The accounting policies set out below have been applied consistently to all the periods presented in these consolidated financial statements, with the exception of the new Standards and Interpretations effective 1 January 2011 and applied as from that date. The changes in question to the accounting policies are set forth on page 72. Strukton Groep nv s financial information has been included in the consolidated financial statements, so that a condensed statement of income has been included in the company financial statements, invoking Section 402 of Book 2 of the Dutch Civil Code (Burgerlijk Wetboek). 60 Strukton Annual Report 2011

61 Notes to the consolidated financial statements Basis of consolidation Subsidiaries ( full consolidation) Subsidiaries are those entities controlled by the company. The company is supposed to control an entity when the Group is in the position, directly or indirectly, to determine the financial and operating policy of an entity so as to obtain benefits from the entity s joint venture s activities. The financial statements of the subsidiaries are fully incorporated in the consolidated financial statements as from the date that control commences until the date that control ceases. Joint ventures (proportional consolidation) Joint ventures are those entities of which the Group has joint control with third parties, with this control laid down in an agreement. The consolidated financial statements include the Group s proportionate share in the assets, liabilities, income and expenses of the joint ventures, with items of a similar nature being combined on a line-by-line basis, from the date that joint control commences until the date that joint control ceases. Associates (equity method) Associates are entities in which the Group has significant influence on the financial and operational policy, but which it does not control. The consolidated financial statements include the Group s share in the overall result of non-consolidated investments in accordance with the equity method, after adjustment of the policies in accordance with the Group s policies, from the date that significant influence commences until the date that significant influence ceases. Associates without significant influence Associates without significant influence are stated at fair value. If the fair value cannot be determined reliably, valuation is at cost. Elimination of transactions on consolidatione Intra-group balances and any unrealised gains and losses on transactions within the Group or income and expenses from similar transactions are eliminated in the preparation of the consolidated financial statements. Unrealised gains and losses from transactions with associates and entities that come under joint control are eliminated in proportion to the Group s share in the entity. Foreign currency Foreign currency transactions Transactions denominated in foreign currency are translated into euros at the foreign exchange rate applying at the date of transaction. Foreign currency monetary assets and liabilities are translated into euros at the foreign exchange rate applying at the reporting date. Translation gains and losses are taken to the statement of income. Non-monetary assets and liabilities in foreign currency and measured at historical cost are translated at the exchange rate applicable at the transaction date. 61 Strukton Annual Report 2011

62 Notes to the consolidated financial statements Financial statements of foreign operations The assets and liabilities of foreign operations are translated into euros at the applicable exchange rate at the reporting date. Exchange differences are taken directly to the translation reserve in equity. Translation differences are transferred to the statement of income upon the full or partial disposal of foreign subsidiaries, joint ventures and associates. Income and expenses of foreign operations are translated into euros at the approximated exchange rate at transaction date. Derivative financial instruments The Group uses interest rate swaps and inflation swaps to hedge interest rate risks and inflation risks arising from group and project financing. The interest rate swaps and inflation swaps are carried at fair value, which is equal to the present value of the expected future cash flows. Hedge accounting is applied with respect to the agreed interest rate swaps and inflation swaps. Changes in the fair value of interest rate swaps and inflation swaps that serve to hedge the interest rate risk and inflation risk arising from future interest rate payments and indexation payments receivable are taken directly to equity to the extent that the hedge can be classified as effective. The deferred amounts in equity are taken to the statement of income as soon as the future interest coupons and hedged future indexation payments are taken to the result. For the portion of which the effectiveness of the hedge cannot be shown, the change in the value is directly taken to the statement of income. When the interest rate swap or inflation swap is sold or terminated, or if the hedge can no longer be shown to be effective, the cumulative gains or cumulative losses at that moment are taken to equity until the basic hedged position is settled. At that moment, the cumulative gains or cumulative losses will immediately be transferred to the statement of income. Property, plant and equipment Recognition and measurement Property, plant and equipment are measured at cost, less cumulative depreciation and impairment losses. The cost of self-constructed assets includes materials and equipment, direct labour and a reasonable proportion of the indirect production overheads and where relevant the estimated cost of dismantling and removing the asset and restoring the site on which the asset is located. Purchased software that forms an inseparable part of the operation of the related equipment (firmware) is capitalised as part of relevant equipment. When property, plant and equipment consist of components that have different useful lives, these components are accounted for as separate components under property, plant and equipment. 62 Strukton Annual Report 2011

63 Notes to the consolidated financial statements Costs after initial recognition The cost of replacing a component of property, plant and equipment is included in the carrying amount of that asset if it is probable that the future economic benefits of the asset in question will accrue to the Group and if the cost of the assets can be reliably determined. The costs of the day-to-day maintenance of property, plant and equipment are charged to the statement of income when incurred. Depreciation Depreciation is charged to the statement of income according to the straight-line method based on the estimated useful life of each component of property, plant and equipment. Every component of an item of property, plant and equipment with a substantial cost in relation to the overall cost of the asset is depreciated separately, except for: land, which is not depreciated (except for paved surface); and assets under construction, which are stated at incurred costs. Depreciation methods, useful lives and residual values are reassessed at the reporting date. Leased assets Group is Lessee Leases pursuant to which the Group assumes virtually all risks and benefits attaching to the property are classified as finance leases. Upon its initial recognition, the leased asset is stated at the lower of fair value and present value of the minimum lease payments. After its initial recognition, the leased asset is recognised in accordance with the applicable policy. Other leases are operating leases whose leased assets are not recognised in the Group s statement of financial position. Intangible assets Goodwill All business combinations are accounted for by applying the purchase method. Goodwill is recognised upon the acquisition of subsidiaries and joint ventures. Goodwill equals the difference between the cost of the acquisition and the fair value of the net identifiable assets and liabilities at the moment of the transaction. Each year, an impairment test is carried out. Negative goodwill from an acquisition is taken directly to the statement of income. Other intangible assets Other intangible assets are intangible assets that have arisen from acquisitions recognised as business combinations (IFRS 3), as well as software, patents and licences. Upon recognising software with both tangible and intangible features, it is determined which of the two features is the most characteristic one. Depending on the result of this determination, the software is classified under property, plant and equipment or under intangible assets. Other intangible assets with finite lives acquired by the Group are stated at cost, less cumulative amortisation and cumulative impairment losses. 63 Strukton Annual Report 2011

64 Notes to the consolidated financial statements Expenses after initial recognition Subsequent expenditure on capitalised intangible assets is capitalised only if the future economic benefits contained in the specific assets to which the expenditure relates are increased. All other expenses, including internally generated goodwill and trademarks, are charged to the statement of income when they are incurred. Amortisation Amortisation is charged to the statement of income on a straight-line basis over the estimated useful lives of the intangible assets, with the exception of goodwill and intangible assets arising from an acquisition, from the date of becoming operational. Investment property Recognition and measurement Investment property is property which is held either to earn rental income or for capital appreciation, or for both. Investment property is measured at cost, less cumulative depreciation and impairment losses. Investment property for own use is presented as property, plant and equipment. The fair value of the investment property is disclosed in the notes to the consolidated financial statements. The fair value is based on the market value, being the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm s length transaction after proper marketing wherein the parties act knowledgeably, prudently and without compulsion. Depreciation of investment property Depreciation is charged to the statement of income according to the straight-line method based on the estimated useful life of each component. Depreciation rates correspond to those of the categories of property, plant and equipment. The method of depreciation, useful life and residual value are reassessed at the reporting date. PPP receivables PPP receivables concern concessions payments still due from public bodies (authorities) in connection with PPP concession projects. PPP receivables are recognised as financial assets. Upon initial recognition in the consolidated financial statements, PPP receivables are stated at fair value and subsequently at amortised cost using the effective interest rate method. The interest rate applied is virtually equal to the interest rate (after hedging) of the associated non-recourse PPP loan. 64 Strukton Annual Report 2011

65 Notes to the consolidated financial statements Inventories Inventories are stated at the lower of cost and recoverable amount. The recoverable amount is the estimated selling price in the ordinary course of business, less the estimated costs of completion and cost of selling. The cost of the inventories is based on the average purchase or cost price and includes expenses incurred in acquiring the inventories and the associated costs of purchase. The cost of inventories of finished products includes an appropriate share of the indirect overheads based on normal production capacity. Construction work in progress Construction work in progress concerns the gross amounts to be invoiced for the contract work performed until the reporting date still to be collected from the client. This item is stated at cost plus profit recognised to date, less invoiced instalments and recognised losses. The cost comprises all the expenses directly attributable to specific projects and an allocation of fixed and variable overheads incurred in the Group s contract activities based on normal production capacity. Projects are presented in the statement of financial position as receivables from or payables to the client for the contract. A receivable is created if the amount of the expenses incurred (including the recognised result) exceeds the amount of the invoiced instalments. It constitutes a payable if the amount of the expenses incurred (including the recognised result) is lower than the invoiced instalments. Trade and other receivables Trade and other receivables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method. Cash and cash equivalents Cash and cash equivalents comprise bank balances, deposits and cash balances. Assets held for sale Non-current assets (or groups of assets and liabilities being sold) of which the carrying amount is expected to be primarily realised through a sales transaction rather than through their continued use, are classified as held for sale. Immediately before this classification, the assets (or the components of a group of assets being sold) are remeasured in accordance with the Group s accounting policies. Subsequently, the assets (or a group of assets to be sold) are stated at the lower of carrying amount and fair value (less cost of selling). An impairment loss on a group of assets for sale is allocated to goodwill in the first instance, and subsequently in proportion to the remaining assets and liabilities. Impairment losses arising from the initial classification are taken to the statement of income. 65 Strukton Annual Report 2011

66 Notes to the consolidated financial statements Impairment Financial assets A financial asset is considered to be impaired if there are objective indications that one or more events has had a negative effect on the expected future cash flows of that asset. An impairment loss for a financial asset carried at amortised cost is calculated as the difference between the carrying amount and the present value of the expected future cash flows, discounted at the original effective interest rate. All impairment losses are charged to the statement of income. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. With respect to financial assets stated at amortised cost, the reversal is added to the statement of income. In the case of the financial asset available for sale being shares, the reversal is taken directly to equity. Non-financial assets The carrying amount of the Group s non-financial assets, except for inventories and deferred tax credits, are reviewed at each reporting date to determine whether there is any indication of impairment. If there are such indications, an estimate is made of the recoverable amount of the asset in question. For goodwill and intangible assets that have infinite useful lives, or that are not yet operational, an estimate of the recoverable amount is made at each reporting date. An impairment loss is recognised if the carrying amount of an asset or the cash generating unit to which it belongs exceeds the recoverable amount. Impairment losses are taken to the statement of income. The recoverable amount of an asset or a cash generating unit equals the higher of the value in use and the fair value net of selling costs. In assessing the value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects both the current market assessments of the time value of money and the specific risks with respect to the asset. Impairment losses on goodwill (with the exception of goodwill with respect to associates) are not reversed. For other assets, impairment losses recognised in prior years are assessed at each reporting date for indications that the loss may have decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 66 Strukton Annual Report 2011

67 Notes to the consolidated financial statements Equity attributable to equity holders of the company Reserves The reserves comprise share premium, a translation reserve, a statutory reserve for associates, a hedging reserve and an actuarial reserve. The share premium is a reserve that has arisen on the basis of additional capital contributions by the shareholder. The translation reserve covers all the gains and losses from the translation of the Group s net investments in foreign subsidiaries. The statutory reserve for associates consists of undistributed results of associates, the distribution of which is bound by restrictions. The hedging reserve comprises the cumulative change in the fair value of hedging instruments related to hedged transactions that have not yet occurred or the hedged position that has not yet terminated. An actuarial reserve is formed for the cumulative change in the fair value of pension commitments resulting from changes in the actuarial assumptions. Retained earnings This item concerns the cumulative results from prior financial years net of the dividends paid. Subordinated loans A loan is classified as a subordinated loan if subordinated to all the other recognised loans. Upon initial recognition in the financial statements, subordinated loans are stated at fair value (net of transaction costs) and subsequently at amortised cost using the effective interest rate method. Long-term liabilities Long-term liabilities concern liabilities for financing real estate projects, financing publicprivate partnerships, bank credit facilities, financial derivatives (non-current portion) and other long-term liabilities. Liabilities for financing property projects, financing public-private partnerships, bank credit facilities and other long-term liabilities. Upon initial recognition in the consolidated financial statements, liabilities for financing property projects, financing public-private partnership projects, bank credit facilities, and other long-term liabilities are stated at fair value (net of transaction costs) and subsequently at amortised cost using the effective interest rate method. 67 Strukton Annual Report 2011

68 Notes to the consolidated financial statements Provisions A provision is formed in the statement of financial position if the Group has a legal or constructive obligation as a result of an event in the past and of which a reliable estimate can be made, and it is probable that, to settle the obligation, an outflow of resources will be required. Provisions are determined by discounting the estimated future cash flows. The applied discount rate reflects the current market assessments of the time value of money and the risks specific to the obligation. Restructuring provisions A restructuring provision is formed if a detailed formal restructuring plan has been approved and those who will be affected have valid expectations that the restructuring will be effected by starting with the implementation of the plan or that the main features of the plan have been announced to those affected. Employee benefits a. Defined contribution plans: For defined contribution plans, the Group pays contributions on a mandatory, contractual or voluntary basis to pension funds or insurance companies. Apart from paying contributions, the Group has no other liabilities. Obligations for contributions to defined contribution pension plans are recognised as an expense in the statements of income when the contributions are due. b. Defined benefit plans: Defined benefit plans are post-employment benefit plans other than defined contribution plans. The Group s net obligation for defined benefit plans is calculated separately for each plan by estimating the amount of future entitlements that employees have accrued in return for their services in the current and prior periods. These entitlements are discounted to determine the present value, and the fair value of the plan assets deducted from this. The yield at the reporting date of gilt-edged corporate bonds of which the term approaches that of the Group s obligations serves as the discount rate. The calculation is made by an accredited actuary in accordance with the projected unit credit method. This method takes account of future salary increases as a result of employees career opportunities and general wage trends, including adjustments for inflation. When entitlements under a plan are improved, the portion of the improved entitlements relating to past service by employees is recognised as an expense in the statement of income on a straight-line basis over the average period until the entitlements vest. To the extent that the entitlements vest immediately, the expense is recognised immediately in the statement of income. The Group takes actuarial gains and losses with respect to defined benefit plans directly to unrealised results. When the plan assets exceed the obligations, the recognition of the assets is limited to the net total of any unrecognised past service pension costs and the present value of any currently available future refunds from the fund or lower future pension premiums. 68 Strukton Annual Report 2011

69 Notes to the consolidated financial statements c. Other non-current employee benefits: The Group s net obligation for long-term employee benefits, other than pension plans, is the amount of future entitlements, such as jubilee benefits, bonuses and gratuities, that employees have accrued in return for their service in the current and prior periods. The liability is calculated using the projected unit credit method and is discounted to the present value. The discount rate is the yield at the reporting date of gilt-edged corporate bonds of which the term approaches that of the Group s obligations. Any actuarial gains or losses are recognised in the statement of income in the period in which they occur. Guarantee commitments A guarantee provision is recognised if the underlying products or services have been sold and delivered. This provision is formed for the costs that will have to be incurred to rectify deficiencies that become evident after the delivery, yet during the guarantee period. The provision is based on the best estimate for the cash outflow. Other provisions The other provisions comprise provisions for specific guarantees issued when associates are sold, risks of legal proceedings against Strukton Groep nv and/or its operating companies, redundancy arrangements and other relatively minor risks. Trade and other payables, amounts payable to credit institutions and income tax payable Trade and other payables, and amounts payable to credit institutions are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method. Any income tax payable is recognised at face value. Revenue Projects for third parties Revenues and costs are recognised in the statement of income in proportion to the stage of completion of the contract with reference to a reliable estimate of the outcome of the relevant project in progress. Revenue comprises the amount agreed in the contract, variations in the work due to changes in the agreement, claims and performance bonuses to the extent that it is probable that these will generate income and can be reliably determined. The interest charges attributed to a project are part of the costs. The stage of completion is assessed by reference to the ratio of the recognised costs to the total expected costs. If the outcome of a project cannot be estimated reliably, income is only recognised to the extent that the contract expenses in all probability can be recovered. Expected losses on projects are taken directly to the statement of income. Service and maintenance contracts Revenues from service and maintenance contracts are recognised in the statement of income in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed. 69 Strukton Annual Report 2011

70 Notes to the consolidated financial statements Revenue from sale of goods from inventories The sale of goods from inventories primarily pertains to the sale of prefabricated concrete applications. Revenue from the sale of inventories is recognised in the statement of income when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration due is likely, the associated costs or possible returns of goods can be estimated reliably and when there is no ongoing management interest in the goods. Concessions During the operational phase, revenues from concession management comprises: the fair value of the provision of the contractually agreed services; the interest income related to the investment in the project. Revenue is recognised as soon as the related services are provided. Interest is recognised as income in the period to which it relates. Other Other revenue includes transaction results of associates interests, property transaction results and property, plant and equipment transaction results. Transaction results are recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is likely, the associated costs can be estimated reliably and there is no ongoing management involvement in the relevant assets anymore. Expenses Lease payments under operating leases Payments made under operating leases are recognised in the statement of income on a straightline basis over the term of the lease. Public-private partnerships (concessions) The proposal costs for public-private partnerships are charged to the statement of income until the moment at which it is likely that the contract will be awarded. As from the moment at which it is likely that the contract will be awarded, these costs are capitalised. In practice, the moment at which it is likely that the contract will be awarded will generally coincide with the moment of preferred bidder. If at the time of Financial Close a (preliminary) design is delivered, this can be recognised as income less the capitalised costs. This income has been agreed between the contracting parties and represents the fair value. Finance income and costs Finance income and costs comprises interest receivable on invested funds, exchange rate gains, gains on hedging instruments that are recognised in the statement of income and returns on investments. Returns on investments are recognised when the right to payment vests. Finance expenses comprise interest payable on borrowings, interest added to provisions, exchange rate losses, impairment losses on financial assets and losses on hedging instruments that are recognised in the statement of income. Finance income and costs that are directly attributable to the acquisition, construction or production of a qualifying asset are recognised as components of the cost of that asset in the period during which the asset is in production. 70 Strukton Annual Report 2011

71 Notes to the consolidated financial statements Operating segments The Group does not apply IFRS 8, Operating Segments. Government grants Government grants are recognised if there is reasonable certainty that the entity will comply with the conditions attached to them and that the grants will be received. Government grants are deducted from the associated costs. Income tax Income tax comprises current and deferred income tax. Income tax is recognised in the statement of income, except to the extent that it concerns items stated directly in equity, in which case the tax is recognised in equity. Current income tax liability for the financial year and losses carried forward and back is the tax expected to be paid on taxable income for the financial year, based on tax rates enacted or substantively enacted at the reporting date, and any adjustments to tax payable for prior years. Deferred tax liabilities are recognised using the balance sheet liability method, with a provision formed for temporary differences between the carrying amounts of assets and liabilities for financial accounting purposes and the amounts used for taxation purposes. Deferred tax liabilities are not recognised for the following temporary differences: the initial recognition of goodwill, initial recognition of assets and liabilities in a transaction that does not involve a business combination and that affects neither the accounting nor the taxable profit, and differences relating to investments in subsidiaries and entities over which joint control is exercised to the extent that they are unlikely to be settled in the foreseeable future. Deferred tax liabilities are measured using tax rates expected to apply when the temporary differences are reversed, based on legislation enacted or substantively enacted at the reporting date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available for the realisation of the temporary difference. At each reporting date, deferred tax assets are reviewed and reduced to the extent that it is no longer probable that the corresponding tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend. Until 29 October 2010, Strukton Groep nv, with the majority of its wholly-owned Dutch subsidiaries, formed part of the fiscal unit of nv Nederlandse Spoorwegen. On the grounds of this fiscal unit, the company was jointly and severally liable for the tax debt of the fiscal unit until 29 October Since 29 October 2010, Strukton Groep nv has formed an independent fiscal unit with most of its fully owned Dutch subsidiaries. 71 Strukton Annual Report 2011

72 Notes to the consolidated financial statements Discontinued operations Discontinued operations are part of the Group s activities which represent an important separate activity or a separate important geographical business area that is sold or held for sale, or a subsidiary that was acquired with the sole aim of reselling it. Discontinued operations are qualified as such upon disposal or as soon as the business activity satisfies the criteria for classification as held for sale. When an activity is classified as discontinued, the comparative figures in the statement of income are restated as if the activity had been discontinued at the beginning of the comparative period. Changes in accounting policies The accounting standards used are consistent with the standards used in the 2010 financial year, with the exception of the following new standards and interpretations that are applicable as of 2011: IAS 24 (amendment) Related party disclosures IAS 32 (amendment) Financial instruments: presentation IFRIC 14 (amendment) Prepayments of a minimum funding requirement IFRIC 19 Extinguishing financial liabilities with equity instruments Improvements to IFRS IAS 24 (amendment) Related party disclosures This revised standard applies to all financial years starting on or after 1 January The revised standard simplifies the disclosure requirements for entities with significant state ownership by giving such entities partial exemption, and it also clarifies the definition of an associate. The changes in this standard do not significantly affect the consolidated financial statements for the Group. IAS 32 (amendment) Financial instruments: presentation This revised standard applies to all financial years starting on or after 1 February The amendment to IAS 32 clarifies how certain rights should be processed in the accounts if the instruments have been issued in a currency other than the issuer s functional currency. These instruments must be classified as equity if they are issued to the issuer s current shareholders pro rata for a fixed sum of money, even if the exercise price is denoted in a currency other than the issuer s functional currency. This revised standard has no effect on the Group s consolidated financial statements as the Group does not have financial instruments of this nature. IFRIC 14 (amendment) Prepayments of a minimum funding requirement This revised standard applies to all financial years starting on or after 1 January The amendment to IFRIC 14 redresses an unintended consequence of the interpretation: if an entity subject to a minimum funding requirement were to make a prepayment of future contributions, under certain circumstances the entity making such a prepayment would have to recognise this as an expense. According to the amendment to IFRIC 14, if there is a minimum funding requirement for a defined benefit pension plan, any such prepayment should be treated as an asset. The amendment to IFRIC 14 has no effect on the Group s consolidated financial statements. 72 Strukton Annual Report 2011

73 Notes to the consolidated financial statements IFRIC 19 Extinguishing financial liabilities with equity instruments This interpretation clarifies the position that equity instruments issued to a creditor can be considered as payment of the debt. Improvements to IFRS In May 2010 the IASB published a third collection of changes to the standards, primarily aimed at removing inconsistencies and clarifying points. Different transitional arrangements apply for the different standards. The amendments and improvements are as follows: IFRS 3 Business combinations IFRS 7 Financial instruments: disclosures IAS 1 Presentation of financial statements IAS 27 Consolidated and separate financial statements IAS 34 Interim financial reporting IFRIC 13 Customer loyalty programmes Changes to these standards arising from improvements did not have any effect on the accounting policies, the results or the Group s financial position. New Standards and Interpretations not yet applied The future amendments announced by the IASB have not yet been approved by the European Union. As a result there are no known new, approved standards or interpretations at present. The planned amendments were therefore not applied in Policies for the consolidated statement of cash flows The statement of cash flows is drawn up according to the indirect method. The inventories, receivables, debts, provisions, and debts to credit institutions included in acquisitions are incorporated in the statement of cash flows under investing activities. Income on the basis of interest, dividends and income taxes are included in the cash flow from operating activities. Transactions that do not involve cash exchanges are not included in the statement of cash flows. Immediately due and payable bank debts forming an integral part of the company s cash management system are recognised as cash and cash equivalents in the statement of cash flows. 73 Strukton Annual Report 2011

74 Significant estimates and assumptions in the consolidated financial statements The preparation of the consolidated financial statements requires the management to make judgements, estimates and assumptions that influence the application of the policies and the reported values of assets and liabilities and of income and expenses. The estimates and corresponding assumptions are based on experiences from the past and various other factors that could be considered reasonable under the circumstances. The actual outcomes may differ from these estimates. The estimates and the underlying assumptions are constantly assessed. Revisions of estimates are recognised in the period in which the estimate is revised or in future periods if the revision has consequences for these periods. The most important elements of the estimation uncertainties are listed below. Project revenue recognition As soon as the outcome of a project can be estimated reliably, income and expenses are recognised in the statement of income in proportion to the stage of completion of the contract. The stage of completion is assessed by reference to the ratio of the recognised costs to the total expected costs. Loss provisions on projects are recognised if it is likely that the costs will exceed the revenues of a project. For each project, the project leader and the management assess this on a regular basis. This assessment is based on the project accounting, the project monitoring system, project files and the knowledge and experience of those involved. Using estimates is an inherent part of this process. Especially long-term projects run the risk of reality differing from the estimates. The past has shown that the assessments on which the project provisions are based are generally sufficiently reliable. Performance bonuses and claims on projects Bonuses on projects are recognised if projects have made sufficient progress, the amount of the bonus can be reliably determined and it is probable that specified performance standards will be met or that they will be exceeded. Claims are recognised if negotiations between parties have advanced such that it is probable that the opposite party will accept the claim and the amount of the claim can be determined reliably. Restructuring provision The recognised restructuring provision is based on a detailed formal restructuring plan. A restructuring provision is only recognised if a reliable estimate can be made. 74 Strukton Annual Report 2011

75 Notes to the consolidated financial statements Guarantee commitments The provision for guarantee commitments is based on specific claims, with the possible outcomes being weighed on the basis of the best estimate of the likelihood that they will indeed occur. Provision for bad debts The provision for bad debts is calculated statistically based on an individual assessment of the outstanding receivables, with an objective estimate being made of the risk of uncollectibility of each of the receivables. This estimate is based on historical experiences, information about the relevant debtor among those involved, correspondence, etc. Defined benefit plans and employee benefits The most important actuarial principles at the basis of the recognised pension commitments and other employee benefits are included in the notes to the relevant items. Investment property The main principles for determining any impairment losses of the investment property are included in the notes to this item. Intangible assets Goodwill is subject to annual impairment tests. In accordance with the business plan agreed for the next five years, the expected cash flows of each business unit are considered. With reference to a representative peer group for each business unit, a weighted average cost of capital (WACC) is calculated. The expected cash flows and the WACC form the basis of the discounted cash flow method for testing the goodwill. The Group has developed a standard method for this. 75 Strukton Annual Report 2011

76 Notes to the consolidated financial statements Impairment In order to ascertain whether assets are impaired it is necessary to make an estimate of the recoverable amount. The recoverable amount of an asset or a cash generating unit equals the higher of the value in use and the fair value net of cost of selling. If possible, the fair value net of cost of selling is calculated on the basis of a binding sales contract in an arm s length and objective transaction between independent parties. If there is no binding sales contract, but the asset is traded on an active market, the fair value net of cost of selling is equal to the market price of the asset net of cost of selling. If there is neither a binding sales contract nor an active market for an asset, the fair value net of cost of selling is based on the best information available to agree a price that could be achieved at reporting date from the sale of the asset in a transaction between properly informed, willing and independent parties, net of the cost of selling. When calculating this value, account is taken of the results of recent transactions involving similar assets in the same business sector. In assessing the value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects both the current market interest rate and the risks specific to the asset. The cash flow forecasts are based on reasonable and substantiated assumptions representing the best estimates by the management of the economic circumstances that will exist during the residual useful life of the asset. 76 Strukton Annual Report 2011

77 Financial risk management The Group pursues a strict policy focused on mitigating and managing present and future risks as best as possible and minimising the finance costs. This is achieved by general control measures such as internal procedures and instructions and specific measures focused on managing defined risks. The financial risks facing the Group primarily concern credit risks, interest rate risks, currency risks, liquidity risks and inflation risks. The risk of fluctuations in currency rates and interest rates is hedged with the aid of various derivatives, with risks faced by the primary financial instruments being transferred to other contract parties. Interest rate and currency risks are predominantly managed centrally. Credit risk The majority of clients consist of public organisations (public authorities), as a result of which the credit risk is minimal. In the case of delivery to commercial clients at values higher than a specific amount, the credit risk is also included in assessment of the contract. Moreover, projects are invoiced (in advance) as they progress. The available cash has been transferred to creditworthy banks. Interest rate risk Variable interest credits are exposed to changes in cash flows due to interest rate changes. The Group s policy is intended to conclude interest-bearing long-term liabilities at a fixed rate. Interest rate swaps are agreed to this end. The interest rate risk with respect to the financing of the long-term PPP projects is always hedged using interest rate swaps. Currency risk The bulk of the Group s operations take place in the euro zone. Incidental foreign currency positions are hedged with forward exchange contracts. The foreign currency risk in respect of the equity of foreign subsidiaries and long-term loans granted to such subsidiaries, the so-called translation risk, is not hedged. Liquidity risk The liquidity risk is the risk that the Group is unable to meet its financial obligations when required. The principles underlying cash management are that the liquidity margin is sufficient to be able to meet current and future financial obligations, under normal and special circumstances, without any unacceptable losses being sustained or the Group s reputation being jeopardised. 77 Strukton Annual Report 2011

78 Notes to the consolidated financial statements Progressive cash flow forecasts are used to establish whether sufficient cash is available. In the event of long-term contracts, clients are commonly requested to pay in instalments to finance project costs. The liquidity margin is guaranteed by a EUR 95.0 million committed facility (2010: million). This facility consists of a long-term loan of EUR 45.0 million and a current account overdraft facility of EUR 50.0 million (2010: EUR 50.0 million). There is also an additional current account overdraft facility of EUR 10.0 million (2010: EUR 10 million). Of those current account overdraft facilities, EUR 3.8 million was drawn (2010: 27.4 million). EUR 45.0 million was drawn under the long-term loan (2010: EUR 60.0 million). As at year-end 2011, the Group had EUR million in cash (2010: EUR million). Financial covenants apply to the committed financing facilities referred to above. As at 31 December 2011, the Group complied with those financial covenants. Security was provided to the banks in respect of the creation of the facility. This means that the majority of the Group s assets (at least 55%) have been pledged to the banks that provided the committed facility. In addition, the shares of operating companies Strukton Worksphere bv and Strukton Rail bv were provided to those banks as security. Inflation risk Long-term contracts usually contain indexations to the client. The inflation risk is hedged incidentally by means of an inflation swap. Capital management The policies of the Group Management Board focus on maintaining a strong financial position so as to retain the trust of clients, creditors and the markets, and to secure the business operations future development. Capital consists of issued and paid-up capital, retained earnings, share premium, the hedging reserve, the translation reserve, the statutory participating-interest reserve and an actuarial reserve. Management seeks to achieve a solvency ratio of at least 25%, excluding the PPP projects (2010: 20%). In 2011, the solvency ratio, excluding the PPP projects, was 26.9% (2010: 23.1%). 78 Strukton Annual Report 2011

79 Notes to the consolidated financial statements (x EUR 1,000) 1. Property, plant and equipment Land Buildings Plant and Other Assets under Total machinery equipment construction As at 1 January 2010 Cost 6,526 50, ,962 18,632 5, ,174 Cumulative depreciation and impairment , ,403 13, ,336 Carrying amount 6,211 28,658 85,559 5,569 5, , Carrying amount as at 1 January 6,211 28,658 85,559 5,569 5, ,838 Consolidated through business combinations Investments ,065 3, ,713 Disposals , ,662 Impairment Depreciation 24 2,048 19,008 1,390-22,470 Exchange rate differences Deconsolidation Other changes (4) - (275) (28) - (307) Carrying amount as at 31 December 5,965 26,588 74,952 7,321 6, ,642 As at 31 December 2010 Cost 6,654 49, ,387 21,056 6, ,550 Cumulative depreciation and impairment , ,435 13, ,908 Carrying amount 5,965 26,588 74,952 7,321 6, , Carrying amount as at 1 January 5,965 26,588 74,952 7,321 6, ,642 Consolidated through business combinations Investments ,393 2,091 6,018 19,715 Disposals 1,470 4,422 5, ,450 Impairment Depreciation 24 1,766 17,499 1,758-21,047 Exchange rate differences Deconsolidation Other changes (4) (654) (635) Carrying amount as at 31 December 4,471 20,342 63,676 7,314 12, ,018 As at 31 December 2011 Cost 5,184 40, ,004 21,739 12, ,909 Cumulative depreciation and impairment , ,328 14, ,891 Carrying amount 4,471 20,342 63,676 7,314 12, ,018 In 2011 a negative amount of EUR 0.65 million was recognised in the other changes item as assets under construction. This relates to the purchase and development of software, which was reclassified as other intangible assets in Strukton Annual Report 2011

80 Plant and machinery includes: plant and machinery used for production; equipment used for carrying out contracts; and/or office equipment, computer equipment, telephone equipment, etc. The assets under construction item consists primarily of instalments for the acquisition of equipment that is not yet operational. The disposals include the sum of EUR 8.2 million for the sale of the plant business. Property, plant and equipment financed on the basis of finance leases have a carrying amount of EUR zero (2010: EUR 3.4 million) and pertain to plant and machinery. The payment obligations associated with the leases are recognised under the short-term liabilities and long-term liabilities item. Strukton Groep nv is not the legal owner of the assets. The majority of property, plant and equipment items have been provided as security for the benefit of banks and/or other lenders, within the context of the banks committed facility. In addition, mortgage interests of EUR 7.8 million (2010: EUR 4.7 million) have specifically been provided as security. Depreciation periods are based on the expected lives of the assets. Foundations/carcassing/other 50 years Roofs/heating/ventilation 15 years Casings/exterior walls/gas/electricity/lifts 25 years Plant and machinery 5 years Other equipment 5 years 80 Strukton Annual Report 2011

81 2. Intangible assets Goodwill Other Total intangible assets As at 1 January 2010 Cost 80,067 48, ,115 Cumulative depreciation and impairment 16,339 21,167 37,506 Carrying amount 63,728 26,881 90, Carrying amount as at 1 January 63,728 26,881 90,609 Consolidated through business combinations Investments Disposals Impairment 28,615 6,931 35,546 Depreciation - 5,555 5,555 Exchange rate differences 1,336-1,336 Other changes Carrying amount as at 31 December 36,449 14,944 51,393 As at 31 December 2010 Cost 81,403 48, ,000 Cumulative depreciation and impairment 44,954 33,653 78,607 Carrying amount 36,449 14,944 51, Carrying amount as at 1 January 36,449 14,944 51,393 Consolidated through business combinations Investments Disposals Impairment 6,078-6,078 Depreciation - 3,794 3,794 Exchange rate differences Other changes Carrying amount as at 31 December 30,406 11,828 42,234 As at 31 December 2011 Cost 81,438 49, ,713 Cumulative depreciation and impairment 51,032 37,447 88,479 Carrying amount 30,406 11,828 42, Strukton Annual Report 2011

82 The amortisation of EUR 3.8 million in 2011 relates to the business segment Worksphere. The impairment of EUR 6.9 million for the other intangible assets in 2010 also relates to the business segment Worksphere. The Group measures its intangible assets in accordance with IAS 38 and IFRS 3. In accordance with IAS 36, the Group performs an impairment test on capitalised goodwill at cash flow generating units. The discounted cash flow method is applied, assuming infinite useful lives, stabilisation and limited growth in sub-segments. The business plans used are exclusive of acquisitions. Cash flows are based on the business plans drawn up by the relevant unit for a period of five years. For each cash generating unit, a discount rate (weighted average cost of capital (WACC) ) has been determined with reference to a representative peer group. The forecast takes account of cash flows after tax. The cash flows have been discounted at a net WACC (WACC after tax). In accordance with IAS 36.44, the forecast years do not take account of expansion investments. The goodwill that has arisen for the Worksphere business combination acquired in 2006 has been allocated to the Group as a cash generating unit on the basis of the purchase price allocation, given the synergies to be expected in the Group as a whole. Owing to the amendment to IAS 36, such goodwill has been allocated to the operating segment effective In 2010 the Group recognised an impairment of EUR 23.4 million in the goodwill for Worksphere. Goodwill per cash generating unit country Strukton Worksphere Netherlands 20,999 20,999 Strukton Rail AB Sweden 5,424 5,383 Strukton Rail AS Norway 0 6,084 Colijn Netherlands 3,830 3,830 Grondbank Nederland Netherlands ,406 36, Strukton Annual Report 2011

83 The main assumptions and the method of quantifying each cash generating unit are the following: Strukton Worksphere The test was performed on future cash flows in the Netherlands. The cash flows are discounted at a net WACC of 10.5% (2010: 10.5%). Further growth was assumed for the business plan period. No limited growth was included in the residual value period. Revenue of EUR 271 million is expected at the end of the business plan period. The calculated recoverable amount is greater than the carrying amount of the company including the recognised goodwill. Therefore, the Group has not recognised a goodwill impairment for Worksphere in this financial year. Even in the unlikely event of the key variables changing, this would still not lead to an impairment. Strukton Rail AB (Sweden) The test was performed on future cash flows in Sweden. The cash flows are discounted at a net WACC of 11.45%. Further growth was assumed for the business plan period. No further growth was included in the residual value period. Revenue of EUR 180 million is expected at the end of the business plan period. The calculated recoverable amount exceeds the carrying amount of the company including the recognised goodwill. Therefore, the Group did not recognise any goodwill impairment for Rail AB in this financial year. In the event of any unlikely change in key variables, no impairment will arise. Strukton Rail AS (Norway) The operations of Rail AS were discontinued with effect from 5 January The associated goodwill of EUR 6.1 million has therefore been written off. Colijn/Grondbank The test was performed on future cash flows. The cash flows are discounted at a net WACC of 12.5%. Limited growth was assumed for the business plan period. No further growth was included in the residual value period. The calculated recoverable amount is higher than the carrying amount of the company including the recognised goodwill. Therefore, the Group did not recognise any goodwill impairment for Colijn and Grondbank in this financial year. In the event of any unlikely change in key variables, no impairment will arise. 83 Strukton Annual Report 2011

84 3. Investment property As at 1 January Cost 4,038 11,622 Cumulative depreciation and impairment - 7,468 Carrying amount 4,038 4,154 Changes in financial year Carrying amount as at 1 January 4,038 4,154 Consolidated through business combinations - - Investments - 52 Disposals - 23 Impairment - - Depreciation - 52 Exchange rate differences - - Deconsolidation - 93 Other changes - - Carrying amount as at 31 December 4,038 4,038 As at 31 December Cost 4,038 4,038 Cumulative depreciation and impairment - - Carrying amount 4,038 4,038 The fair value of investment property as at 31 December 2011 was EUR 4.0 million (2010: EUR 4.0 million). The value was determined in an independent manner by calling in recognised experts. Investment property is operated by a joint venture in which the Group holds a 50% interest. The Group receives EUR 0.03 million annually for operating the property (2010: EUR 0.03 million). Depreciation periods are based on the expected useful lives of the assets. Foundations/carcassing/other 50 years Roofs/heating/ventilation 15 years Casings/exterior walls/gas/electricity/lifts 25 years 84 Strukton Annual Report 2011

85 4. Associates The Group has investments in (unlisted) associates. In 2011, the Group had a 40% interest in Construzione Linee Ferroviarie S.p.A. in Bologna, Italy (2010: 40%). In addition, the Group has interests in a number of small companies. Assets Liabilities Balance Revenue Result 2010 Construzione Linee Ferroviarie S.p.A. 50,125 20,666 29,459 45,510 2,614 Other - - 1, ,006 2, Construzione Linee Ferroviarie S.p.A. 60,706 29,662 31,044 38,429 2,494 Other - - 1,847 - (129) 32,891 2,365 A statutory reserve is kept at Construzione Linee Ferroviarie S.p.A. In view of the 40% interest, this reserve amounted to EUR 0.4 million in 2011 (2010: EUR 0.3 million) As at 1 January 31,006 29,148 Exchange rate differences 2 21 Expansion Result for current year 2,365 2,637 Dividend paid Other changes (117) - As at 31 December 32,891 31, Strukton Annual Report 2011

86 5. Other financial assets Non-current PPP Investments Financial Total receivables receivables derivatives As at 1 January ,157 90,396 5, ,544 Investments - 67, ,132 Disposals Consolidated through business combinations Loans extended 3, ,495 Loan repayments 8, ,308 Exchange rate differences Deconsolidation Discounting other investments - 9, ,199 Change in fair value ,292 1,292 Other changes (12) - (293) - (305) As at 31 December , ,727 5,492 1, ,049 As at 1 January , ,727 5,492 1, ,049 Investments - 37, ,352 Disposals 9, ,141 1, ,555 Consolidated through business combinations Loans extended 2,781-2,182-4,963 Loan repayments ,837 3,490-22,866 Exchange rate differences Deconsolidation Discounting other investments - 10, ,104 Change in fair value (1,327) (776) Other changes As at 31 December ,324 64,663 4, ,271 The PPP receivables concern payment due under concession agreements in the Netherlands. The fall in the PPP receivables in 2011 is mainly due to the sale of an 80% stake in Strukton Finance Holding. The terms of the various PPP receivables come to approximately 25 years. Most have terms of more than five years. The interest rate for these PPP receivables on average amounts to approximately 5% (2010: 5%). Long-term receivables includes EUR 2.6 million for subordinated loans from the shareholders of special purpose companies by the special purpose companies which perform the PPP projects (2010: EUR 8.7 million). Investments include the interests in Voestalpine Railpro bv (10%), Delfluent bv (2%) and Safire bv (1%). 86 Strukton Annual Report 2011

87 6. Deferred tax assets and liabilities The deferred tax assets and liabilities can be specified as follows: Assets Liabilities Balance Property, plant and equipment - - 3,152 2,472 (3,152) (2,472) Intangible assets - - 2,681 3,536 (2,681) (3,536) Construction work in progress (344) (339) Financial derivatives 3,204 5, ,161 5,537 Value for tax purposes of recognised losses carried forward 261 1, ,810 Jubilee obligation Other (130) 45 Total 3,546 8,258 6,382 7,060 (2,836) 1,198 Changes in the balance of deferred tax assets and liabilities for 2010 can be specified as follows: Balance as at Recognised Recognised Other Balance as at in 2010 in unrealised changes tax burden results Property, plant and equipment (735) (1,737) - - (2,472) Intangible assets (6,685) 3, (3,536) Construction work in progress (569) (339) Financial derivatives 5,174 (403) 766-5,537 Jubilee obligation Other (31) (2,846) 1, (612) Value for tax purposes of recognised losses carried forward 435 1, , , ,810 Total (2,411) 2, ,198 Changes in the balance of deferred tax assets and liabilities for 2011 can be specified as follows: Balance as at Recognised Recognised Other Balance as at in 2011 in unrealised changes tax burden results Property, plant and equipment (2,472) (680) - - (3,152) Intangible assets (3,536) (2,681) Construction work in progress (339) (5) - - (344) Financial derivatives 5,537 (69) (2,307) - 3,161 Jubilee obligation 153 (104) Other 45 (175) - - (130) (612) (178) (2,307) - (3.097) Value for tax purposes of recognised losses carried forwardg 1,810 (1,549) ,810 (1,549) Total 1,198 (1,727) (2,307) - (2,836) 87 Strukton Annual Report 2011

88 The sale of an 80% stake in Strukton Finance Holding (PPP projects) means the deferred tax liability for financial derivatives has fallen by EUR 2.4 million. The termination of the operations in Norway has led to a write-down of EUR 1.4 million in the losses carried forward as deferred tax assets. The Dutch deferred tax assets and liabilities are stated at the applicable rate of 25.0%. 7. Inventories Raw materials and consumables 3,743 3,141 Finished product Goods for resale 4,379 5,049 Property development 20,471 15,034 29,263 23,818 The unsold portion of property projects already taken into production increased by EUR 5.4 million in 2011 (2010: decrease of EUR 0.6 million).the unsold portion of property relates to land banks and costs incurred for property projects under construction. 8. Trade and other receivables Debtors 209, ,526 Accounts receivable from related parties 42 7 Other receivables, prepayments and accrued income 79,324 93, , ,301 For a large part, other receivables and accruals relate to instalments for work in progress as yet to be invoiced. For the bad debt risk, see Note Construction work in progress Costs net of provisions for losses and risks, plus pro rata profit taking 1,954,671 1,756,388 Less: invoiced instalments 1,928,011 1,752,435 26,660 3,953 The balance of construction work in progress can be broken down as follows: Positive balance of construction work in progress 106, ,766 Negative balance of construction work in progress 80, ,813 26,660 3,953 The positive balance of construction work in progress includes all the construction projects of which the costs incurred, plus the recognised profit, less the recognised losses exceed the invoiced instalments. The positive balance of construction work in progress is recognised under current assets. The negative balance of construction work in progress includes all the construction projects of which the costs incurred, plus the recognised profit, less the recognised losses are less than the invoiced instalments. The negative balance of construction work in progress is recognised under current liabilities. A total of EUR 5.7 million in interest was capitalised in 2011 (2010: EUR 0.3 million). In most cases, major, long-term projects are pre-financed, which means the instalments invoiced for those projects exceed the costs incurred up to that point. The positive balance of construction work in progress primarily comprises short-term projects. 88 Strukton Annual Report 2011

89 10. Cash and cash equivalents Bank and cash balances 104, ,836 Demand deposits , ,836 Cash and cash equivalents includes funds from groups of contractors amounting to EUR 22.1 million (2010: EUR 36.2 million) and funds received in guarantee accounts amounting to EUR 1.9 million (2010: EUR 1.6 million). These funds are not freely available to the company. The funds included in groups of contractors are funds in cooperative structures, with it being stipulated contractually that cash and cash equivalents are not freely available. The funds received in guarantee accounts relate, in particular, to the guarantee accounts to be maintained as required by the Dutch Ultimate Liability of Subcontractors Act (Wet ketenaansprakelijkheid). The other cash and cash equivalents are entirely freely available. 11. Equity Equity attributable to equity holders of the parent company: Issued and Share Translation Statutory Hedging Actuarial Retained Undistributed Total paid-up premium reserve reserve of reserve reserves profits earnings equity capital reserve associates 2010 As at 1 January ,269 - (1,586) 578 (14,324) (27) 184, ,246 Appropriation of 2009 profit (780) - Profit for the period (15,486) (15,486) Unrealised results - - 2, (2,238) (690) (22) - (50) Share premium - 10, ,000 Dividend paid As at 31 December ,269 10,000 1, (16,562) (717) 185,314 (15,486) 166, As at 1 January ,269 10,000 1, (16,562) (717) 185,314 (15,486) 166,710 Appropriation of 2010 profit (15,486) 15,486 - Profit for the period ,362 14,362 Unrealised results ,831 (1,784) 537-5,737 Share premium Dividend paid As at 31 December ,269 10,000 1, (9,731) (2,501) 170,365 14, ,809 Issued and paid-up capital The authorised capital of Strukton Groep nv in 2011 comprises 500 ordinary shares with a nominal value of EUR each (2010: ditto). The issued capital of Strukton Groep nv in 2011 comprises 500 ordinary shares with a nominal value of EUR each (2010: ditto). All issued shares have been fully paid up. Share premium On the acquisition date (29 October 2010), Oranjewoud nv made a share premium payment of EUR 10 million. 89 Strukton Annual Report 2011

90 Translation reserve The translation reserve covers all the gains and losses from the translation of the net investments of Strukton in foreign subsidiaries. In 2011, an amount of EUR 0.1 million was added to the translation reserve (2010: EUR 2.9 million). Statutory reserve of associates Statutory reserves were formed for Construzione Linee Ferroviarie S.p.A. and Strukton Rail nv Belgium. The statutory reserve for Construzione Linee Ferroviarie S.p.A. amounts to EUR 0.4 million (2010: 0.3 million). The statutory reserve for Strukton Rail nv Belgium amounts to EUR 0.3 million (2010: EUR 0.3 million). Hedging reserve The hedging reserve comprises the cumulative change in the fair value of hedging instruments related to hedged transactions that have not yet occurred or the hedged position that has not yet terminated. In 2011, the reserve was increased by EUR 6.9 million (2010: reduction of EUR 2.2 million), in particular because of the sale of an 80% stake in Strukton Finance Holding. Actuarial reserve The actuarial reserve comprises the cumulative change in the fair value of pension commitments as a result of changes in actuarial principles. Actuarial reserves decreased by EUR 1.8 million in 2011 (2010: decrease of EUR 0.7 million), in particular because of changed actuarial principles in Sweden. Retained earnings No dividend was distributed in 2011 (2010: no dividend payment). 12. Subordinated loans Special purpose companies for PPP projects 2,664 8,357 Other - - 2,664 8,357 Subordinated loans relates to the subordinated loans furnished by the shareholders of the special purpose companies to the special purpose companies performing the PPP projects. These subordinated loans have been subordinated at the relevant special purpose companies to the other creditors of the relevant special purpose companies. The reduction of EUR 6.0 million in 2011 is due to the sale of an 80% stake in Strukton Finance Holding. 13. Long-term liabilities Liabilities for financing property development 7,802 4,546 Bank loans 47,660 62,935 Financial derivatives 12,162 23,545 Lease commitments 0 38 Non-recourse PPP financing 64, ,265 Other long-term liabilities 7,059 6, , ,216 The reduction of EUR million in the long-term liabilities is due to a EUR 15 million repayment of the bank loan as well as a reduction in the non-recourse PPP financing following the sale of an 80% stake in Strukton Finance Holding. The other long-term liabilities include two private loans. 90 Strukton Annual Report 2011

91 The repayment schedule of the long-term liabilities is as follows: < 1 year 1-5 years > 5 years Total 2010 Liabilities for financing property development ,546 Bank loans , ,935 Financial derivatives 781 2,910 19,854 23,545 Lease commitments Non-recourse PPP financing 5,351 19, , ,265 Other long-term liabilities ,887 6,425 92, , , Liabilities for financing property development - 7,802-7,802 Bank loans ,047 1,351 47,660 Financial derivatives 1,547 3,286 7,329 12,162 Lease commitments Non-recourse PPP financing 785 8,045 55,412 64,242 Other long-term liabilities - - 7,059 7,059 2,594 65,180 71, ,925 Of the total debt, EUR 71.2 million (2010: EUR million) has a term exceeding five years. For more information about the interest and currency risks, reference is made to Note 23, Financial instruments, and the section entitled Financial risk management in the accounting policies. 14. Provisions Summary of the changes in 2011: Restructuring Pension Jubilee Guarantee Other Total provision provision commitments commitments provisions As at 1 January ,769 10,712 3, ,329 17,657 Consolidation/deconsolidation Exchange rate differences Addition 444 3, ,516 Withdrawal 1, ,572 Release (70) - (70) Provision for adding interest Other changes As at 31 December ,131 3, ,309 19,785 Non-current portion - 14,131 3, ,015 Current portion , ,131 3, ,309 19,785 The actuarial calculation of the jubilee obligation is based on a discount rate of 4.5% (2010: 4.6%). The other provisions comprise provisions for risks of legal proceedings against Strukton Groep nv and/or its operating companies, as well as other relatively minor risks. 91 Strukton Annual Report 2011

92 Pension commitments The pension plans of the following pension funds apply to Strukton group company staff, with reference being made to the number of affiliated active members as at 31 December Pension fund for the construction industry (1,244) Pension fund for the concrete manufacturing industry (17) Pension fund for metal and engineering industries (1,531) Railway Pension Fund (2,170) Zwitserleven group insurance (12) Gjensidige Fursikring pension plan Norway (192) Alecta pension insurance plan Sweden ITP scheme (195) Alecta pension insurance plan Sweden SAF-LO scheme (386) Axa pension insurance Strukton Railinfra nv Belgium (51) Reef Infra Nationale Nederlanden (0) Strukton Rail GmbH (97) The first three pension plans listed above concern the plans of industrial pension funds. In all cases where there is an affiliation with industrial pension funds, Strukton s group companies do not have any obligation, in the case of a deficit at the industrial pension fund, to pay additional amounts other than paying the future contributions. Furthermore, the Strukton group companies are not entitled to claim any surpluses in the funds. As a result of this, these pension plans are accounted for in these financial statements as defined contribution plans. With respect to the pension plan for the railway industry, which is administered by the Railway Pension Fund, employers and employee representatives reached agreement on a new pension plan in This new plan came into effect on 31 December 2005 and qualifies as a defined contribution plan for financial accounting purposes. The distinguishing characteristic of this pension plan is that the company is obliged to pay a predetermined annual premium within the scope of the plan. The premium agreed with Railway Pension Fund is an annually increasing percentage of the payroll total. In 2011, a break-even level of 20.0% was eventually achieved. After payment of the agreed premium, the company has no obligation to pay additional amounts should there be a deficit at the pension fund. Likewise, the Strukton group companies are not entitled to claim any surpluses in the funds. The actuarial risks and the investment risks are for the pension fund and its members. The pension plan administered by Zwitserleven and the pension plan administered by Gjensidige Fursikring pension plan Norway qualify as defined contribution plans. The funding ratios for the industrial pension funds are as follows: Pension provision Pension fund for the construction industry 99.8% 106.8% Pension fund for the concrete manufacturing industry 95.2% 101.0% Pension fund for the metal and engineering industries 88.5% 96.8% Railway pension fund 113.0% 126.0% 92 Strukton Annual Report 2011

93 A provision was formed for four pension plans qualifying as defined benefit plans. Pension provision Strukton Rail AB Zweden 12,576 9,024 Axa pensioenverzekering Strukton Railinfra nv België Strukton Rail GmbH Reef Nationale Nederlanden Other ,131 10,712 The Alecta pension insurance SAF-LO scheme is a defined benefit plan. Prior to the acquisition of Strukton Rail AB (formerly Svensk Banproduktion), the pension plan was administered by a public sector group plan (ITP scheme). Part of this pension plan is a defined benefit plan. The present value of this commitment is included in the company s statement of financial position. The increase in the pension provision in 2011 is almost entirely for the pension provision in Sweden. The pension insurance for Strukton Railinfra nv employees in Belgium is a defined benefit plan. Strukton Rail GmbH has a limited defined benefit plan for its employees. A provision has been made for this on the company s statement of financial position of EUR 0.6 million. Reef Infra bv recognised an indexation obligation for the pension plan administered by Nationale Nederlanden. No new rights are accrued in this pension plan. The negative difference between pension commitments and pension assets is included under the pension provision item. The pension commitments and pension assets are based on actuarial calculations as at 31 December. Assumptions, composition and movements in the pension commitments and the plan assets in relation to the defined benefit plans for Alecta Sweden, Axa Belgium, Strukton Rail Germany and Reef Nationale Nederlanden are shown below Basic principles Discount rate 4.36% 4.48% Expected return on plan assets in the long term 5.53% 5.18% Expected return on plan assets in the coming year - - Rate of increase in salaries 2.8% 2.8% Rate of increase in pensions 1.05% 1.07% Inflation 2.0% 2.0% The expected contribution to the pension plan in 2012 amounts to EUR 0.4 million. The plan assets need not be allocated to various investment instruments, such as shares, bonds and property. The pension provisions in Belgium and the Netherlands are funded on the basis of an insurance contract. In Sweden and Germany, the pension provisions are not funded externally and are accounted for in the respective companies. 93 Strukton Annual Report 2011

94 Breakdown: Fair value of the plan assets 3,747 3,848 Present value of the pension commitments (17,878) (14,560) Adverse balance (14,131) (10,712) Movement: Pension capital as at 1 January 3,848 3,185 Consolidated though business combinations - - Expected return on plan assets Pension contributions Paid pensions (314) (222) Difference between actual return and expected return (242) 417 Other changes - (34) Pension capital as at 31 December 3,747 3,848 Pension commitments as at 1 January 14,560 11,145 Consolidated though business combinations - - Entitlements to be granted in financial year Interest expenses Paid pensions (314) (222) Net actuarial gain or loss 2,141 1,388 Exchange rate differences Other changes Pension commitments as at 31 December 17,878 14,560 Actuarial results as at 1 January Consolidated though business combinations - - Write-downs on actuarial results Net actuarial gain or loss 2,141 1,388 Difference between actual return and expected return 242 (417) Exchange rate differences 41 (33) Actuarial results as at 31 December 3, Pension charge components on account of defined benefit plans: Entitlements to be granted in financial year Interest expenses Expected return on plan assets (198) (172) Other Total pension charges in the statement of income 1,178 1, Strukton Annual Report 2011

95 15. Trade and other payables Debts to suppliers 170, ,864 Amounts owed to related parties Taxes and social security contributions 54,299 48,002 Pension contributions 1,183 1,399 Other debts, accruals and deferred income 133, , , ,165 The other liabilities, accruals and deferred income consist for a large part of invoices still to be received for completed work, and holiday pay and days leave still to be paid. 16. Revenue and operational result Revenue Strukton Rail 585, ,050 Strukton Civiel 298, ,718 Strukton Bouw 181, ,882 Strukton Worksphere 252, ,825 1,317,976 1,437,475 The fall in revenue is primarily the result of a fall in revenue at Strukton Civiel. In 2011, revenue abroad amounted to EUR million (2010: EUR million). Breakdown of income categories Construction contracts 929, ,382 Service maintenance and concessions 354, ,318 Revenue from inventories 6,830 10,343 Other 27,248 8,432 1,317,976 1,437,475 The share of service, maintenance and concession assignments in total revenue rose further in 2011 to 26.9% (2010: 22.6%). Operational result (EBITDA) Strukton Rail 26,990 37,157 Strukton Civiel 10,068 13,322 Strukton Bouw 5, Strukton Worksphere 12,301 6,801 55,277 57,603 The improvement in the result for Strukton Bouw and Strukton Worksphere is largely the consequence of the transaction result for the sale of an 80% stake in Strukton Finance Holding (PPP projects). 95 Strukton Annual Report 2011

96 17. Cost of raw materials, equipment and outsourced work Cost of raw materials, equipment and outsourced work concerns external overheads directly attributable to the production process. 18. Personnel expenses Wages and salaries 297, ,689 Social insurance contributions 47,364 48,152 Defined contribution plans 25,554 25,824 Defined benefit plans 1,178 1,115 Jubilee benefits , ,229 The personnel expenses have remained the same, partly thanks to a limited decrease in the size of the workforce. 19. Other operating expenses In 2011, a total of EUR 1.0 million was received in grants, EUR 1.0 million of which was taken to the statement of income (2010: EUR 2.7 million). The grants in question were deducted from the costs to which the grant related. Research and development costs (excluding training costs) for 2011 amounted to EUR 0.5 million (2010: EUR 1.0 million). 20. Finance income and costs Finance income Third-party interest income 5,891 2,374 Group company interest income - - Discounting other investments 10,104 9,199 Return on investments Exchange rate gains Change in derivatives 113 1,241 17,011 13,802 Finance costs Third-party interest expenses 12,256 11,290 Non-recourse PPP financing interest expenses 9,705 8,669 Group company interest expenses - - Exchange rate losses Change in derivatives ,097 20,086 Net finance income and costs (5,086) (6,284) Net finance costs decreased by EUR 1.2 million on This is primarily because of higher interest income for the PPP projects. 96 Strukton Annual Report 2011

97 21. Income tax expense Tax payable 5,274 8,312 Deferred tax 1,727 (2,843) 7,001 5,469 The income tax accounted for differs from the amount that would, in theory, be payable on the basis of the weighted average tax rate (25.0%) that applies to the results of the consolidated companies. The difference can be explained as follows: Profit before tax 21,363 (10,017) Nominal Dutch income tax rate 5,341 (2,554) Effect of different tax rates in various countries (208) (229) Participation exemption (3,252) (744) Impairment of goodwill 1,520 7,296 Amortisation of intangible assets 838 3,094 Adjustment with respect to previous years Release of deferred taxes owing to purchase price allocation of acquisitions (854) (3,094) Deductible and non-deductible losses 2,013 1,807 Release of deferred taxes owing to changed tax rate - (76) Other, including non-deductible costs 818 (31) Effective tax burden 7,001 5,469 Effective tax burden (%) 32.8% (54.6%) The increase of the effective tax burden is largely due to non-deductible costs, such as goodwill impairments and other non-deductible costs abroad, as well as foreign losses not eligible for set-off. Foreign losses not eligible for set-off in 2011 primarily pertain to the operations in Norway. At year-end 2011, the Group had a total of EUR 58.7 million in unstated losses available for set-off. A sum of EUR 24.6 million in offsettable losses that have not been recognised relates to Norway. A deferred tax asset of EUR 1.4 million in Norway was written off in Workforce In 2011, an average workforce of 5,906 were employed (2010: 6,154), 943 (2010: 985) of whom were abroad. Number of employees Netherlands Abroad Total Netherlands Abroad Total Strukton Rail 2, ,130 2, ,257 Strukton Civiel Strukton Bouw Strukton Worksphere 1,481-1,481 1,539-1,539 4, ,906 5, ,159 At year-end 2011, the total number of employees was 5,868 (2010: 6,023). The drop in employee numbers on 2010 is primarily the result of restructuring operations within various Strukton business units. 97 Strukton Annual Report 2011

98 23. Financial instruments Maximum credit risk Investments available for sale - - Associates without significant influence 4,113 5,492 Financial lease receivables - - Other long-term receivables 81, ,317 Bonds - - Deposits - - Trade receivables 209, ,533 Other receivables 186, ,608 Cash and cash equivalents 104, ,836 Used for hedging: - interest-rate swaps inflation-rate swaps 165 1,473 - forward exchange contracts , ,284 The most (85%) of the maximum credit risk consists of current receivables and cash (2010: 73%). Breakdown of trade receivables Netherlands 144, ,549 Euro zone 30,330 29,571 Rest of Europe 33,778 28,139 Other , ,533 The most (84%) of the outstanding trade receivables are located in the euro zone (2010: 85%). Age analysis of receivables Gross Provided Gross Provided Not yet due 155,000 1, ,543 5 Due in days 29, , Due in days 12, , Due in days 7, , Due in days 4,991 3,085 1, Due in more than a year 6, , Total 216,008 6, ,790 2,257 Net receivables 209, ,533 In 2011, the share of exigible trade receivables rose to 28% (2010: 27%). 98 Strukton Annual Report 2011

99 Change in the provision for bad debts As at 1 January 2,257 3,101 Additions 5,786 1,379 Used 199 1,399 Released 1, Other changes (223) (28) As at 31 December 6,507 2,257 Liquidity risk Liabilities Currency Nominal Maturity Nominal Carrying Nominal Carrying interest rate date value amount value amount Long-term liabilities Subordinated loans EUR 12.00% >2025 2,664 2,664 8,357 8,357 Bank loan EUR 3.84% 2013/ ,660 47,660 62,935 62,935 Mortgage loan EUR % >2012 7,802 7,802 4,546 4,546 Non-recourse PPP financing EUR % > ,242 64, , ,265 Financial lease commitments EUR Derivatives EUR ,162-23,545 Other liabilities EUR ,456 31,456 28,669 28,669 Subtotal 153, , , ,355 Current liabilities Owed to banks EUR ,762 3,762 27,428 27,428 Other liabilities EUR , , , ,688 Subtotal 450, , , ,116 Total 604, , , ,471 The most (73%) of the liabilities are current and consist of trade payables and amounts owed to banks (2010: 64%). Security has been provided to banks within the context of the bank loan, pledging the most of the assets as well as the shares of two operating companies. 99 Strukton Annual Report 2011

100 Book value and contractual cash flows 2011 Carrying Contractual < 6 mths 6-12 mths 1-2 years 2-5 years > 5 years amount Cash flows Non-derivative financial liabilities Subordinated loans 2,664 9, ,459 Bank loans 47,660 50,339 1,047 1,047 46, ,351 Mortgage loans 7,802 8, , Non-recourse PPP financing 64,242 67, ,236 7,671 55,412 Financial lease commitments Payables and other liabilities 452, , , ,887 45, Owed to banks 3,762 4,044 2,069 1, Derivative financial commitments Interest-rate swaps used for hedging 12,162 26, ,024 5,462 16,942 Forward exchange contracts , , , , ,947 14,877 81, Non-derivative financial liabilities Carrying Contractual < 6 mths 6-12 mths 1-2 years 2-5 years > 5 years amount Cash flows Subordinated loans 8,357 36, ,003 3,009 31,422 Bank loans 62,935 64, ,914 46, Mortgage loans 4,546 5, ,914 - Non-recourse PPP financing 161, ,790 3,392 3,193 11,091 9, ,995 Financial lease commitments Payables and other liabilities 488, , , ,456 48, Owed to banks 27,428 29,485 15,085 14, Derivative financial commitments Interest-rate swaps used for hedging 23, ,027 4,177 4,206 7,202 21,573 89,869 Forward exchange contracts , , , ,369 84,203 85, ,062 In view of the policy of hedging the liquidity and interest rate risks, the Group has concluded various swaps. The special purpose companies concluded interest rate and inflation swaps for the PPP projects. All changes in those interest rate and inflation swaps are accounted for under the PPP projects. Those PPP projects have been proportionately included in the financial statements. In addition, at year-end 2011, the Group had an interest rate swap, concluded for purposes of converting a variable interesting-bearing debt into a fixed interesting-bearing debt. Hedge accounting is applied to the swaps in accordance with the cash flow model. 100 Strukton Annual Report 2011

101 Cash flows resulting from derivatives 2011 Carrying Expected < 6 mths 6-12 mths 1-2 years 2-5 years > 5 years amount cash flows Interest-rate swaps Assets Liabilities (12,162) (26,262) (893) (941) (2,024) (5,462) (16,942) Forward exchange contracts Assets Liabilities Inflation-rate swap Assets Liabilities Swaption Assets Liabilities (11,991) (26,177) (891) (939) (2,020) (5,450) (16,877) 2010 Carrying Expected < 6 mths 6-12 mths 1-2 years 2-5 years > 5 years amount cash flows Interest-rate swaps Assets Liabilities (23,545) (127,027) (4,177) (4,206) (7,202) (21,573) (89,869) Forward exchange contracts Assets Liabilities (74) (74) (74) Inflation-rate swap Assets 1, Liabilities Swaption Assets Liabilities (22,122) (126,845) (4,248) (4,202) (7,194) (21,547) (89,654) 101 Strukton Annual Report 2011

102 Foreign currency exposure The majority of the Group s activities take place in the euro zone. Subsidiaries outside the euro zone commonly trade in the local currency. The policy with respect to foreign currency is that the net position is fully hedged by means of foreign currency contracts. The translation risk on equity and loans to subsidiaries outside the euro zone is not hedged. The Group s currency exposure is limited to its foreign subsidiaries, primarily in Scandinavia, up to a converted amount of EUR 25.5 million (2010: 27.3 million). Exchange rates Average exchange rate Spot rate on the reporting date DKK NOK SEK GBP KRW A 10% increase of the euro in relation to the exchange rates stated above at year-end would have reduced equity and profit for the year under review by EUR 2.6 million (2010: 2.7 million). A 10% decrease of the euro in relation to those exchange rates at year-end would have had a comparable opposite effect. Interest exposure Carrying Carrying amount amount Instruments with fixed interest rate Financial assets 64, ,727 Financial liabilities 111, ,238 (47,239) (57,511) Instruments with variable interest rate Financial assets 104, ,836 Financial liabilities 14,228 40,331 90,588 95,505 As a result of a rise by 100 basis points in the interest rate, equity and profit for the year under review would have declined by EUR 0.35 million (2010: EUR 0.35 million), assuming that all the other variables remain constant. A fall by 100 basis points in the interest rate would have had a comparable but opposite effect. Interest rate and inflation swaps A rise by 100 basis points in the interest rate produces a positive change in the financial derivative of EUR 5.2 million (2010: EUR 15.7 million). Virtually the entire amount of EUR 5.2 million will be taken to equity. A fall by 100 basis points in the interest rate produces a negative change in the financial derivative of EUR 6.3 million (2010: EUR 19.1 million). Virtually the entire amount of EUR 6.3 million will be taken to equity. Carrying amounts versus fair values The carrying amounts of financial assets and liabilities recognised in the statement of financial position hardly differ from the fair values. 102 Strukton Annual Report 2011

103 24. Statement of cash flows The breakdown of the cash and cash equivalents is as follows: Cash and cash equivalents 104, ,836 Debts to credit institutions 3,762 27, , ,408 The statement of cash flows separately shows the changes without cash flows as part of the operating cash flow. In addition, interest received and paid, and income tax paid are stated separately. There was a negative cash flow of EUR 7.4 million in 2011 (2010: EUR 9.6 million). This is largely the result of a fall in advance funding for major infrastructure projects. EUR 29.1 million (2010: 76.3 million) of the long-term receivable with respect to the PPP concession agreements is accounted for as part of the operating cash flow. Excluding this long-term PPP receivable, the cash flow from operating activities amounted to a net outflow of EUR 10.6 million (2010: 38.5 million). The revenue includes recognition of a EUR 12.4 million transaction result for the sale of an 80% stake in Strukton Finance Holding (PPP projects). The sale value of this 80% stake was EUR 23.5 million. In the statement of cash flows, a net cash inflow of EUR 15.8 million is recognised under acquisitions/disposals of group companies. The revenue includes recognition of a EUR 6.1 million transaction result for the sale of property and assets belonging to the plant business. The sale value of these assets was EUR 14.4 million. In the statement of cash flows, this net amount of EUR 14.4 million is recognised in the disposals of property, plant and equipment. The additions to property, plant and equipment totalled EUR 18.8 million in 2011 (2010: EUR 15.0 million). An amount of EUR 15 million (2010: zero) has been recognised in the cash flow from financing activities for the repayment of bank credit for Strukton Groep nv. The loans taken out mainly concern the non-recourse PPP financing. 25. Commitments and contingencies, and security provided Contingent liabilities Contingent liabilities are commitments that ensue from past events and whose existence can only be confirmed by the occurrence of one or more uncertain future events which the entity does not fully control. If it is unlikely that an outflow of resources embodying economic benefits will be required to settle the commitment, or if the amount of the commitment cannot be measured with sufficient reliability, the relevant commitments are also regarded as contingent liabilities. The contingent liabilities relate to issued guarantees and any obligations from legal proceedings against Strukton Groep nv and/or its operating companies, the risks and possible obligations of which cannot be reliably measured. Furthermore, Strukton Groep nv is jointly and severally liable for all liabilities of general partnerships (groups of contractors) in which it directly participates. This liability is limited to the group companies participating in the general partnerships. No obligations in this respect are included in the financial statements. For credit facilities taken out by its group companies/associates, Strukton Groep nv has issued guarantees of up to EUR 13.7 million (year-end 2010: EUR 7.6 million). As at 31 December 2011, banks had issued guarantees and letters of intent of up to EUR million (year-end 2010: EUR million). These guarantees mainly concern obligations by virtue of construction work in progress, maintenance obligations with respect to completed projects and investment commitments. Security of EUR 7.8 million (2010: EUR 4.5 million) was provided in connection with loans drawn in respect of property projects. 103 Strukton Annual Report 2011

104 Leases and operating leases; investment commitments The lease commitments relate to long-term leases for office space. The operating lease commitments relate primarily to future instalments in connection with the leasing of passenger cars, delivery vans and minibuses. The investment commitments relate to contractual obligations in connection with the acquisition of property, plant and equipment. Lease commitments Less than 1 year 7,727 4,236 More than 1 year and less than or equal to 5 years 25,617 11,082 More than 5 years 10,331 14,476 43,675 29,794 Operating lease commitments Less than 1 year 19,582 19,876 More than 1 year and less than or equal to 5 years 31,337 31,706 More than 5 years ,582 51,719 Investment commitments Contractual obligations in connection with: - additions to property, plant and equipment 4,711 2,425 4,711 2, Related party transactions Identification Strukton Groep nv has been part of Oranjewoud nv since 29 October Oranjewoud nv holds 100% of the shares in Strukton Groep nv. As at year-end 2011, Centric bv held 83.6% of the shares in Oranjewoud nv.the shares of Oranjewoud nv are listed on the official market of Euronext nv in Amsterdam. As from the acquisition date, the following parties qualify as related parties: Oranjewoud nv and its subsidiaries, Centric bv and its subsidiaries, the members of the Supervisory Board of Oranjewoud nv, the Management Board of Oranjewoud nv, the Management Board of Centric bv and Stichting Administratiekantoor Centric bv of Mr G.P. Sanderink. 104 Strukton Annual Report 2011

105 Transactions with supervisory directors and managers in key positions Managers in key positions include all persons with the power and responsibility to directly or indirectly plan, manage and exercise control over the entity s activities. The remuneration of managers in key positions (14 managers in both 2011 and 2010) can be specified as follows: Short-term employee benefits 4,536 5,034 Post-employment benefits Other long-term employee benefits - - 5,286 5,034 Employee benefits for 2011 include EUR 0.7 million in pension charges (2010: EUR 0.8 million). Remuneration of the directors amounted to EUR 1,220,564 in 2011 (2010: EUR 810,076). Strukton Groep nv does not have a Supervisory Board. Other transactions with related parties Transactions with subsidiaries, associates and joint ventures are conducted on an arm s length basis, on conditions comparable to those that apply to transactions with third parties. In the financial year 2011, deliveries were made to Oranjewoud nv for EUR 0.3 million (2010: EUR 0.2 million). No deliveries were made to Centric bv in the financial year. No deliveries were made to Nederlandse Spoorwegen nv in this financial year (2010: EUR 41.0 million). At year-end, the following receivables and payables were outstanding as a result of transactions with related parties: Oranjewoud nv Centric bv Current receivables 42 - Current liabilities Loans provided - - Loans taken up Events after the reporting period On 5 January 2012 Strukton Civiel bv acquired a 100% stake in Ooms Nederland Holding bv. This transaction involved Strukton Civiel taking over the infrastructure operations of Ooms Avenhorn Groep bv. The infrastructure operations of Ooms Avenhorn Groep bv acquired by Strukton have a turnover of around EUR 100 million. On 9 January 2012 Strukton Rail bv decided to discontinue its operations in Strukton Rail AS and Strukton Railinfra AS in Norway. The costs for terminating the operations in Norway have been recognised in the result for 2011 and no further adjustments are expected in Strukton Annual Report 2011

106 28. Services for concessions and ppps Strukton s group companies participate in seven special purpose companies for PPP concession projects. These companies have concluded concession agreements for the services to be provided. All seven agreements are based on public-private partnerships (PPPs) involving DBFM(O) contracts (Design, Build, Finance, Maintain and Operate). Companies over which the Group is able to (jointly) exercise control have been proportionally included in the consolidated statements. Where the Group does not have joint control, the company is accounted for as an associate or investment. The following provisions apply to all seven concession agreements. The concession payments depend on the availability of equipment or accommodation. To the extent that the payments relate to support services being provided, recognition is proportionate to the provision of the services. The concession agreements contain indexation provisions and, with reference to a benchmark, certain elements of the agreements can be altered. The Group is not the owner of the equipment or accommodation. The volatility of revenues and results is limited. The concession agreements have no option for extension. On 6 December 2011, Strukton reduced its share in six PPP projects by selling an 80% stake in the holding company, Strukton Finance Holding, to Dutch Infrastructure Fund bv. Water treatment The Group has a 2% stake in Delfluent bv (2010: 5%). The concession agreement is a DBFMO contract for the construction, maintenance and management of a waste-water purification plant in Harnaschpolder, for the Haaglanden region. The concession commenced in 2003 and runs until School building The Group has a 9% stake in Talentgroep Montaigne bv (2010: 45%). The concession agreement is a DBFMO contract for the construction, maintenance and management of a school building for the Montaigne Lyceum in The Hague. The concession commenced in 2004 and runs until Public buildings The Group has a 1% stake in Safire bv (2010: 5%). The concession agreement is a DBFMO contract for the construction, maintenance and management of the Ministry of Finance building in The Hague. The concession commenced in 2006 and runs until The Group has a 50% stake in DC 16 bv. The concession agreement is a DBFMO contract for the construction, maintenance and management of a building for the Custodial Institutions Department (Dienst Justitiële Inrichtingen, DJI ) in Rotterdam. The concession commenced in 2008 and runs until The Group has a 6% stake in Duo2 bv (2010: 30%). The concession agreement is a DBFMO contract for the construction, maintenance and operation of the shared accommodation in Groningen of the Dienst Uitvoering Onderwijs ( DUO ) and the tax authorities. The concession commenced in 2008 and runs until The Group has a 8% stake in Komfort bv (2010: 30%). The concession agreement is a DBFMO contract for the construction, maintenance and management of the Kromhout Barracks in Utrecht. The concession commenced in 2008 and runs until Strukton Annual Report 2011

107 The Group has a 4.8% stake in A-Lanes A15 bv (2010: 24%). The concession agreement is a DBFM contract for the construction and maintenance of sustainable infrastructure solutions warranting maximum circulation and safety, both during and after construction, on the Maasvlakte - Vaanplein section of the A15 motorway. The concession commenced in 2010 and runs until The respective special purpose companies received non-recourse finance. No repayment or interest rate guarantees have been issued by the Group. At year-end 2011, the order book of the PPP projects was worth EUR million (2010: EUR million). 29. Assets and liabilities held for sale No assets and liabilities were held for sale in 2011 and Acquisitions No business combinations were acquired in Joint ventures The activities of Strukton Group are partly performed in joint ventures (temporary and permanent). The consolidated financial statements include the following items that correspond with the interest of Strukton Group in the revenues, assets and liabilities of the various joint ventures: Assets Non-current assets 87, ,767 Current assets 166, , , ,867 Liabilities Non-current liabilities 87, ,594 Current liabilities 132, , , ,669 Net assets and liabilities 34,203 47,198 Revenue 322, ,376 Expenses 315, ,395 7,019 3,981 The reduction in the assets and liabilities is mainly due to the sale of an 80% stake in Strukton Finance Holding (PPP projects). The comparative figures for 2010 have been adjusted to enable a proper comparison. 107 Strukton Annual Report 2011

108 32. Summary of principal group companies and associates The following companies are fully consolidated. Name Registered office Share in the issued capital % Strukton Rail bv Utrecht 100 Strukton Rail Regio bv Utrecht 100 Strukton Rolling Stock bv Utrecht 100 Strukton M&E bv Maarssen 100 Strukton Systems bv Utrecht 100 Strukton Rail Reserve bv Utrecht 100 Ecorail bv Den Haag 100 Strukton Rail Materieel bv Den Bosch 100 Strukton Rail Consult bv Utrecht 100 Strukton Rail Projects bv Utrecht 100 Strukton Railinfra Projecten bv Maarssen 100 Strukton Rail International bv Utrecht 100 Nova Gleisbau AG Zürich (Switzerland) 100 Strukton Rail nv Merelbeke (Belgium) 100 Strukton Railinfra AB Stockholm (Sweden) 100 Strukton Rail AB Stockholm (Sweden) 100 Strukton Railinfra Nordic AB Stockholm (Sweden) 100 Strukton Railinfra AS Oslo (Norway) 100 Strukton Rail AS* Oslo (Norway) 100 Strukton Rail Holding A/S (DK) Copenhagen (Denmark) 100 Strukton Rail A/S Copenhagen (Denmark) 100 Strukton Railinfra GmbH Munich (Germany) 100 Strukton Rail GmbH & Co KG Kassel (Germany) 100 Strukton Rail Verwaltungsgesellschaft GmbH Kassel (Germany) 100 Strukton Systems GmbH & Ko.KG Kassel(Germany) 100 Strukton Systems Verwaltungsgesellschaft GmbH Kassel (Germany) 100 Strukton Civiel bv Utrecht 100 Strukton Civiel Projecten bv Utrecht 100 Grondbank Nederland bv Utrecht 100 Colijn Beheer bv Nieuwendijk 100 Colijn Aannemersbedrijf bv Nieuwendijk 100 Tensa bv Nieuwendijk 100 Terracon Funderingstechniek bv Nieuwendijk 100 Terracon International bv Nieuwendijk 100 Terracon Spezialtiefbau GmbH Berlin (Germany) 100 Molhoek Aannemingsbedrijf bv Nieuwendijk NB 100 Strukton Engineering bv Utrecht 100 Geocon bv Utrecht 100 Strukton Infratechnieken bv Utrecht 100 Strukton Microtunneling bv Maarssen 100 Canor Benelux bv Utrecht 100 Strukton Specialistische Technieken bv Utrecht 100 Strukton Afzinktechnieken bv Maarssen 100 Strukton Prefab Beton bv Maarssen 100 Strukton Verkeerstechnieken bv Utrecht 100 Adpa Holding bv Deventer 100 Repa Infra bv Deventer 100 Reef Beheer bv Oldenzaal Strukton Annual Report 2011

109 Reef Infra bv Oldenzaal 100 Reef Milieu bv Oldenzaal 100 Omtzigt Civiel/Milieu bv Boskoop 100 Reef Infra Spoorbouw bv Oldenzaal 100 Reef Infra Netwerkbouw bv Oldenzaal 100 Reef GmbH Gronau (Germany) 100 Strukton Bouw bv Utrecht 100 Strukton Bouw & Onderhoud bv Maarssen 100 Strukton Avenue2 Onroerend Goed bv Utrecht 100 Strukton Groene Loper bv Utrecht 100 Strukton Heerderweg bv Utrecht 100 Strukton Projectontwikkeling bv Utrecht 100 Strukton Vastgoedontwikkeling Noord bv Maarssen 100 Strukton Ezinger bv Utrecht 100 Strukton Peizerhoven bv Utrecht 100 Strukton Vastgoedontwikkeling Oost bv Maarssen 100 Strukton Vastgoedontwikkeling Oost II bv Utrecht 100 Strukton Ganzenmarkt bv Utrecht 100 Strukton Vastgoedontwikkeling West bv Maarssen 100 Strukton Vastgoedontwikkeling Zuid bv Maarssen 100 Vastgoedontwikkeling Beilen Oost bv Utrecht 100 Strukton Vastgoedontwikkeling Beheer bv Maarssen 100 Strukton Vastgoedontwikkeling Ypsilon bv Maarssen 100 Strukton Oost bv Maarssen 100 Strukton Alpha bv Maarssen 100 Strukton Beta bv Maarssen 100 Strukton Gamma bv Maarssen 100 Strukton Delta bv Maarssen 100 La Mondiale nv Kortrijk (Belgium) 100 C.V. Voorstadslaan Utrecht 100 Strukton Bauprojekte GmbH & Co KG (i.l.) Bocholt (Germany) 100 Strukton Bauprojekte VerwaltungsGmbH (i.l.) Bocholt (Germany) 100 Strukton Services bv Utrecht 100 Strukton Worksphere bv Utrecht 100 Worksphere Beheer bv Utrecht 100 Strukton Worksphere België bv ba Tongeren (Belgium) 100 RGG cluster Zwembaden ESCo Exploitatie Maarssen 75 Strukton Integrale Projecten bv Maarssen 100 Strukton Finance ESCo s Holding bv Utrecht 100 RGG cluster zwembaden ESCo Invest bv Utrecht 100 Strukton Finance Holding België nv Merelbeke 100 Strukton Assets bv Utrecht 100 Strukton Management bv Utrecht 100 Strukton Vastgoedbeheer en Facility Management bv Utrecht 100 Servica bv Utrecht 100 Servica Advies bv De Meern 100 Strukton Materieel bv Maarssen 100 Strukton Vuka bv Maarssen 100 Strukton Elschot bv Maarssen 100 Strukton Zeta bv Utrecht 100 Strukton Theta bv Utrecht 100 Strukton Iota bv Utrecht 100 Strukton Kappa bv Utrecht Strukton Annual Report 2011

110 Strukton Lambda bv Utrecht 100 Parc Invest nv Ghent (Belgium) 100 SIL nv** Ghent (Belgium) 100 * in liquidation in 2012 ** in liquidation in 2011 The following companies are partially consolidated. Name Registered office Share in the issued capital % Microtunneling Exploitatie Maarssen 50 Profin bv ba Ghent (Belgium) 50 Strukton Finance Holding bv Maarssen 20 Strukton Finance bv Maarssen 20 TalentGroep Montaigne bv Rotterdam 9 TalentGroep Montaigne Holding bv Rotterdam 9 Duo2 Holding bv Utrecht 6 Duo2 bv Utrecht 6 Komfort Holding bv Nieuwegein 6 Komfort bv Nieuwegein 6 A-Lanes A15 Holding bv Nieuwegein 4,8 A-Lanes A15 bv Nieuwegein 4,8 Europool bv Maarssen 50 Eurailscout Inspection & Analysis bv Utrecht 50 Eurailscout GB Ltd Wolverhampton (UK) 25 Tribase Computer and Network Services vof Utrecht 33 1/3 Tubex bv Oostburg 50 Exploitatiemaatschappij A-Lanes A15 bv Nieuwegein 33 1/3 MT Piling bv Harmelen 50 DMI Nederland bv Weert 50 DMI Injektionstechnik GmbH Berlin (Germany) 50 DBS Spezialsanierungen GmbH Berlin (Germany) 50 ACH Beheer bv Hengelo 33 1/3 ACH Exploitatie bv Hengelo 33 1/3 Noordelijke Asfaltproduktie (NOAP) bv Heerenveen 50 Nederlands Wegen Markeerbedrijf bv Oosterwolde 25 Nebeco bv Ede 50 La Linea Leiden Beheer bv Rotterdam 50 La Linea Leiden cv Rotterdam 50 Grondontwikkeling Beilen bv Amsterdam 50 SPC Management Services bv Utrecht 33 1/3 DC 16 Holding bv Nieuwegein 50 DC 16 bv Nieuwegein 50 A-Lanes Management Services bv Nieuwegein 25 Exploitatiemaatschappij DC 16 bv Nieuwegein 50 Exploitatiemaatschappij Komfort bv Nieuwegein 50 ISE Exploitatie bv Eindhoven 12 A list of associates within the meaning of Sections 379 and 414 of Book 2 of the Dutch Civil Code has been filed with the Trade Register in Utrecht. 110 Strukton Annual Report 2011

111 Company statement of financial position (x EUR 1,000) Assets Notes Non-current assets Property, plant and equipment (1) 15,957 21,502 Financial assets (2) 267, , , ,088 Current assets Receivables (3) 8,376 10,953 Cash and cash equivalents (4) 40, ,772 11, , ,247 Equity and liabilities Equity Issued capital 2,269 2,269 Share premium reserve 10,000 10,000 Other reserves 160, ,927 Retained earnings 14,362 (15,486) Total equity (5) 186, ,710 Provisions (6) 3,562 2,818 Non-current liabilities (7) 78,776 72,373 Current liabilities (8) 62,948 86, , , Strukton Annual Report 2011

112 Company statement of income (x EUR 1,000) Notes Total profits of associates (3,764) (4,160) Other results after taxes (9) 18,126 (11,326) Profit for the period 14,362 (15,486) 112 Strukton Annual Report 2011

113 Notes to the company financial statements Strukton Groep nv has been part of Oranjewoud nv since 29 October Oranjewoud nv holds 100% of the shares in Strukton Groep nv. As at year-end 2011, Centric bv held 83.6% of the shares of Oranjewoud nv. Where reference is made in the company financial statements to transactions with group companies, this means transactions between Strukton Groep nv and its subsidiaries as well as transactions with other group companies belonging to Oranjewoud nv and Centric bv and related companies. Basis of preparation The financial statements of Strukton Groep nv are included in the consolidated financial statements. The company financial statements of Strukton Groep nv are prepared in accordance with the statutory requirements of Part 9, Book 2 of the Dutch Civil Code. Within this context, the company utilises the option provided by Section 362, paragraph 8, of Book 2 of the Dutch Civil Code to apply the same accounting policies to the company financial statements as those applied to the consolidated financial statements. The consolidated group companies are stated at net asset value in accordance with the policies used for the consolidated IFRS financial statements of Strukton Groep nv. The associates over which significant influence is exercised are also valued according to these policies as set out in the consolidated financial statements. The same applies with respect to the accounting policies. Consequently, equity and profit for the period of Strukton Groep nv are equal to those in the consolidated financial statements. Accounting policies The accounting policies applied to the company financial statements are the same as those for the consolidated financial statements. If no specific policies are mentioned, please refer to the policies mentioned in the consolidated financial statements of Strukton Groep nv. For a correct interpretation of the company financial statements of Strukton Groep nv, reference should be made to the consolidated financial statements of Strukton Groep nv. 113 Strukton Annual Report 2011

114 1. Property, plant and equipment (as at 31 December 2011) Land Buildings Plant and Total machinery Acquisition price as at 1 January ,532 32,203 2,025 37,760 Cumulative depreciation ,550 1,364 16,258 Carrying amount as at 1 January ,188 17, ,502 Investments ,037 Disposals 1,282 7,165-8,447 Depreciation 20 1, ,310 Other changes Carrying amount as at 31 December ,886 10, ,782 Acquisition price as at 31 December ,250 26,019 2,081 30,350 Cumulative depreciation ,492 1,537 14,393 Carrying amount as at 31 December ,886 13, , Financial assets Associates 121, ,729 Owed by group companies 142, ,739 Owed by third parties Deferred tax assets , ,636 Other associates 2,950 2, , ,586 The movement in the financial assets in 2011 was as follows: Participating Owed by Owed by Deferred Other Total interests from group third parties tax assets associates group companies companies As at 1 January , , , ,586 Consolidation Expansion 1, ,086 Disposal 7, ,997 Share in results (3,764) (3,764) Dividends (30,560) (30,560) Loans extended - 128, ,189 Repayments - (124,409) (280) - - (124,689) Other changes 1,396 (7,368) (507) - (6,479) As at 31 December , , , ,366 The other change relates to the write-down of EUR 7.4 million on the long-term receivable from the Belgian subsidiary Parc Invest nv, which went into liquidation in Strukton Annual Report 2011

115 3. Receivables Receivables from group companies 1,875 3,281 Taxation and social security 0 0 Other receivables, prepayments and accrued income 6,501 7,672 8,376 10, Cash and cash equivalents These cash and cash equivalents are freely available to the company. 5. Equity Notes to equity can be found in the consolidated financial statements. 6. Provisions Summary of changes in the carrying amount in 2010 Carrying amount Addition Withdrawal Release Other Carrying amount Provisions for taxes 2, ,210 Other provisions , , Long-term liabilities Long-term loans 45,000 60,000 Amounts owed to group companies 33,776 9,936 Financial derivatives 0 2,367 Other ,776 72,373 The long-term bank loan will be repaid in The interest rate is 3.84%. 8. Current liabilities Debts to credit institutions 5,812 27,266 Trade creditors Amounts owed to group companies 32,161 34,762 Taxation and social security 18,521 12,583 Other debts, accruals and deferred income 5,459 10,766 62,948 86, Other results after taxes Other results after taxes 18,126 (11,326) 115 Strukton Annual Report 2011

116 In 2011, the total tax debt amounted to EUR 1.2 million (2010: EUR 6.5 million). The other results comprise finance income and costs, and overheads. In 2011, Strukton Groep nv formed a fiscal unit with the majority of its Dutch subsidiaries. Strukton Groep nv does not charge income tax on to its individual subsidiaries. Given that the financial information on the auditor s fees is provided in the financial statements of Oranjewoud nv and nv Nederlandse Spoorwegen, the amount of the fees was not disclosed on the grounds of Section 382a, paragraph 3, of Book 2 of the Dutch Civil Code. 10. Commitments and contingencies, and security provided For credit facilities taken out by its operating companies/associates, Strukton Groep nv has issued guarantees of up to EUR 13.7 million (year-end 2010: EUR 7.6 million). As at 31 December 2011, banks had issued guarantees and letters of intent of up to EUR million (year-end 2010: EUR million). These guarantees mainly concern obligations by virtue of construction work in progress and maintenance obligations with respect to completed projects. Security of EUR 7.8 million (2010: EUR 4.5 million) was provided in connection with loans drawn in respect of property projects. Remuneration of directors and supervisory directors For a summary of the remuneration of directors and supervisory directors, please refer to the consolidated financial statements. Utrecht, the Netherlands 8 May 2012 The Group Management Board G.P. Sanderink 116 Strukton Annual Report 2011

117 Other information Provisions of the Articles of Association governing profit appropriation The provisions governing the profit appropriation are included in Article 33 of the Articles of Association. These provisions state that the profit is at the free disposal of the General Meeting of Shareholders. Proposed dividend It is proposed to the General Meeting of Shareholders not to distribute dividend and to add the total result to the general reserves (2010: ditto). Events after the reporting period For events after the reporting period, please refer to the consolidated financial statements. 117 Strukton Annual Report 2011

118 Independent auditor s report To: the Shareholder of Strukton Groep nv Report on the financial statements We have audited the financial statements 2011 included in this annual report on pages 54 through 117 of Strukton Groep nv, Maarssen. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated statement of financial position as at December 31, 2011, the consolidated statement of income, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise the company statement of financial position as at December 31, 2011, the company statement of income for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information. Management's responsibility Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code, and for the preparation of the report of the Group Management Board in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of Strukton Groep nv as at December 31, 2011 its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code. Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of Strukton Groep nv as at December 31, 2011 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code. 118 Strukton Annual Report 2011

119 Report on other legal and regulatory requirements Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the report of the Group Management Board, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further we report that the report of the Group Management Board, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code. Utrecht, May 8, 2012 Ernst & Young Accountants LLP was signed W.H. Kerst 119 Strukton Annual Report 2011

120 Names and addresses Strukton Groep nv Westkanaaldijk 2, 3542 DA Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Chairman of the Board G.P. Sanderink Group Management Committee J.J. Hegeman E.A. Hermsen RA M.H. Schimmel MBA A. Schoots G.J. Vos Composition of Central Works Council H. van der Meijden (chairman) P. Peerbooms (vice-chairman) J. Britsia (secretary) P. Molendijk M. Snijder I. Vreman M. Wierda J. Reins J. Kooter Strukton Rail 120 Strukton Annual Report 2011 Strukton Rail Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management A. Schoots (chairman) D.K. Schonebaum J.L. van Koppenhagen H.P. Huijzer Strukton Rail Oost Wijchenseweg 20, Nijmegen PO Box 6879, 6537 TL Nijmegen The Netherlands T +31 (0) Management J.E.H.M. Smits M.B.J. Maathuis Strukton Rail West De Corridor 4, 3621 ZB Breukelen The Netherlands T +31 (0) Management A.A. van Helmondt Strukton Rail Tram & Metro De Corridor ZB Breukelen The Netherlands T +31 (0) Branch management H.G. Steehouwer Strukton Rail Burgemeester Maenhautstraat Merelbeke, Belgium T +32 (0) Management P. Vanhie Strukton Rail Uddvägen Nacka, Sweden T +46 (0) Management R. Röder

121 Strukton Rail Forstfeldstrasse 5, Kassel Germany T +49 (0) Management P.H.M. de Haas Strukton Rail Production Support Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Kompagnistræde 22, 3. sal 1208 København K, Denmark T +45 (0) Management T.G.M. Weerepas Strukton Systems Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Welbergweg 60, Hengelo PO Box 258, 7550 AG Hengelo The Netherlands T +31 (0) De Corridor 2, 3621 ZB Breukelen The Netherlands T +31 (0) Forstfeldstrasse 5, Kassel Germany T +49 (0) Management P.A. van Seventer Strukton Rolling Stock Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Twekkeler Es 35, 7547 ST Enschede The Netherlands T +31 (0) Van Coulsterweg 11, 2952 CB Alblasserdam The Netherlands T +31 (0) Management G.A. Kwikkers Strukton Rail Equipment Veemarktweg 2a, Den Bosch PO Box 1281, 5200 BH Den Bosch The Netherlands T +31 (0) Technical Service Havenstraat 4, Zutphen PO Box 4097, 7200 BB Zutphen The Netherlands T +31 (0) Kanaaldijk 18, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Welding Division Kantonnaleweg 1, 3542 DB Utrecht The Netherlands T +31 (0) Management J. Zeeman Strukton Civiel Strukton Civiel Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management J.J. Hegeman (chairman) M. Smitt F.M. Bekooij Strukton Civiel Projecten Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management J.J. Hegeman (chairman) M. Smitt F.M. Bekooij P.H.K. Kastermans 121 Strukton Annual Report 2011

122 Strukton Infratechnieken Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management H.J. Spoelstra Strukton Microtunneling Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management H.J. Spoelstra Colijn Beheer Vierlinghstraat 17, Werkendam PO Box 66, 4250 DB Werkendam The Netherlands T +31 (0) Management ing. S. Doornbos (chairman) F.T. Huijer J.W.R. Brouwer Colijn Aannemersbedrijf Vierlinghstraat 17, Werkendam PO Box 66, 4250 DB Werkendam The Netherlands T +31 (0) Management F.T. Huijer Aannemingsbedrijf Molhoek Vierlinghstraat 17, Werkendam PO Box 66, 4250 DB Werkendam T +31 (0) Branch management M.A. Molhoek Terracon Funderingstechniek / Terracon International Vierlinghstraat 17, Werkendam PO Box 49, 4250 DA Werkendam T +31 (0) T +31 (0) Management S. Doornbos J.W.R. Brouwer Terracon Spezialtiefbau GmbH Tietzstraße 25 D Berlin, Germany T +49 (0) Management S. Doornbos Reef Infra Kelvinstraat 1, Oldenzaal PO Box 355, 7570 AJ Oldenzaal The Netherlands T +31 (0) Management A.W.M. Siemes (chairman) G.J. Kerkdijk A.Th.M. Derks CRS Verkeersgeleiding Kelvinstraat 1a, Oldenzaal PO Box 355, 7570 AJ Oldenzaal The Netherlands T +31 (0) Management A.W.M. Siemes (chairman) G.J. Kerkdijk A.Th.M. Derks Strukton Afzinktechnieken Mergor Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management M. Smitt Geocon Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management M. Smitt Strukton Prefab Beton Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management J.A.P. van Stratum 122 Strukton Annual Report 2011

123 Strukton Milieutechniek Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management J.E. van der Stelt Grondbank Nederland 2e Daalsedijk 8 V, Utrecht PO Box 19172, 3501 DD Utrecht The Netherlands T +31 (0) Management J.E. van der Stelt Afvalbank Nederland 2e Daalsedijk 8 V, Utrecht PO Box 19172, 3501 DD Utrecht The Netherlands T +31 (0) Management J.E. van der Stelt Strukton Industriebouw Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Branch management P.H. van der Schaaf Strukton Parkeren Westkanaaldijk 2, Utrecht PO Box 1025,3600 BA Maarssen The Netherlands T +31 (0) Branch management A. Bruins Slot Strukton Civiel Zuid-Oost Edisonlaan 37, Weert PO Box 10113, 6000 GC Weert The Netherlands T +31 (0) Management R. van der Zweep Onderwater Techniek Nederland Edisonlaan 37, Weert PO Box 10113, 6000 GC Weert The Netherlands T +31 (0) Management R. van der Zweep DMI Nederland Edisonlaan 37, Weert PO Box 10113, 6000 GC Weert The Netherlands T +31 (0) Management R. van der Zweep DMI Injektionstechnik GmbH Tietzstraße 25, Berlin, Germany T +49 (0) Management J.J. Hegeman W.I. Münch Strukton Engineering Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management H.O. Moll Strukton Sustainable Energy Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management M. Smitt C. Raijmakers Tensa Vierlinghstraat 17, Werkendam PO Box 66, 4250 DB Werkendam The Netherlands T +31 (0) Management F.T. Huijer Tubex Vierlinghstraat 17, Werkendam PO Box 183, 4250 DD Werkendam The Netherlands T +31 (0) Management H. van der Waal (ad interim) 123 Strukton Annual Report 2011

124 Strukton Bouw Strukton Bouw Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management G.J. Vos B.A.P. Nijdam MBA Strukton Bouw & Onderhoud Regio Noord Aarhusweg 4-2, Groningen PO Box 733, 9700 AS Groningen The Netherlands T +31 (0) Deputy Director E.C. Fokkema Strukton Bouw & Onderhoud Regio Midden Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Deputy Director A. Spithoven Branches Amsterdam, Utrecht Branches Assen, Zwolle Strukton Bouw & Onderhoud Regio Zuid Bokelweg 104, Schiedam PO Box 191, 3100 AD Schiedam The Netherlands 5600 AJ Eindhoven T +31 (0) Deputy Director G. van Tiem Strukton Projectontwikkeling Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management B.A.P. Nijdam MBA Strukton Integrale Projecten Strukton Integrale Projecten Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management E.A. Hermsen RA PPP Projects business unit Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management P.J.A. Peekel Strukton Worksphere Head Office Westkanaaldijk 2, Utrecht PO Box 1830, 3600 BV Maarssen The Netherlands T +31 (0) Management M.H. Schimmel MBA (chairman) G.L.H. Hoek RC T. Hoefsloot H.J. van der Meulen Businessunits Exploitatie Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management J.E.W. Winnubst 124 Strukton Annual Report 2011

125 Projecten Westkanaaldijk 2, Utrecht PO Box 1025, 3600 BA Maarssen The Netherlands T +31 (0) Management A.F. Balm Cluster Noordwest Amsterdam Naritaweg 134, Amsterdam PO Box 56383, 1040 AJ Amsterdam The Netherlands T +31 (0) Management D.H. Mulder Cluster Noordoost Groningen Lelystraat 2, Leek PO Box 147, 9350 AC Leek The Netherlands T +31 (0) Management L. Haan Leeuwarden Archimedesweg 7, Leeuwarden PO Box 518, 8901 BH Leeuwarden The Netherlands T +31 (0) Management L. Haan Deventer Maagdenburgstraat 26, Deventer PO Box 611, 7400 AP Deventer The Netherlands T +31 (0) Management L. Haan Cluster Midden Elst Industrieweg Oost 15C, 6662 NE Elst The Netherlands T +31 (0) Management J. van Leeuwen Utrecht Kantonnaleweg 1 Geb. 40, Utrecht PO Box 1819, 3600 BV Maarssen The Netherlands T +31 (0) Management J. van Leeuwen Cluster Zuidwest Capelle a/d IJssel Ligusterbaan 2, Capelle a/d IJssel PO Box 436, 2900 AK Capelle a/d IJssel The Netherlands T +31 (0) Management P.C. Verheul Cluster Zuid Eindhoven Sciencepark Eindhoven 5206, Son PO Box 356, 5600 AJ Eindhoven The Netherlands T +31 (0) Management J.T. Lemmen Elsloo Business Park Stein 107, Elsloo PO Box 519, 6180 AA Elsloo The Netherlands T +31 (0) Management J.T. Lemmen Breda Minervum 7020, Breda PO Box 9443, 4801 LK Breda The Netherlands T +31 (0) Management J.T. Lemmen 125 Strukton Annual Report 2011

126 Glossary Immersion techniques technological solutions for lowering tunnel elements onto the bed of the body of water Alliance contract CO2 performance ladder COSO DBFMO DKK EBIT (operating result) EBITDA (operational result) ESCo EUR GBP Invested capital IFRS QHSE Core values written agreement for a partnership in which the parties (client and contractor) participate on an equal basis. The crux is that the partners collaborate on an equal footing in order to realise shared objectives and obtain mutual benefits. Profits or losses are shared and risks are borne jointly. an instrument designed to encourage companies bidding for tenders to be CO2-aware in their own business operations and in the execution of projects. The CO2 performance ladder was developed by ProRail, which operates the Dutch rail infrastructure, and was transferred to the Independent Foundation for Climate-Friendly Procurement and Business (SKAO) in Committee of Sponsoring Organisations of the Treadway Commission Design, Build, Finance, Maintain, Operate - kind of contracting in which the client appoints a private consortium for a long period with responsibility for the design, execution, financing, management and maintenance and facilities services of a project. Danish krone Earnings Before Interest and Tax (winst voor interest en belastingen) Earnings Before Interest, Tax, Depreciation and Amortisation (winst voor interest, afschrijvingen en belastingen) Energy Service Company euros British pounds (pounds sterling) equity plus available loans and the net value of bank credit balances and current account overdrafts. International Financial Reporting Standards (formerly International Accounting Standards, IAS), the standard international accounting rules as of 1 January 2005 for preparing the annual accounts of all listed companies within the European Union. Quality, Health & Safety and the Environment the three components of the Strukton mentality: being proactive, taking initiative and being innovative 126 Strukton Annual Report 2011

127 Glossary Lifecycle-based approach Monopsony CSR NOK Order book PBM PMC PPP PPP project Return on capital invested SEK Preferred bidder Working capital IF Index an approach that considers the entire lifecycle of a building or civil engineering structure a market dominated by a single buyer Corporate Social Responsibility Norwegian krone contracts that have been won but still need to be carried out performance-based maintenance, a modern form of contract for track maintenance product-market combination Public Private Partnership Public-Private Partnership in which a public sector organisation appoints a private consortium for a long period with responsibility for the design, execution, financing, management and maintenance (and frequently also the facilities services) of a project. ratio of operating result (EBIT) to average invested capital Swedish krona the last remaining party in a selection procedure for a contract current assets excluding uncommitted cash and cash equivalents, less non interest bearing short-term liabilities 1,000,000 x (no. of accidents resulting in absence) no. of hours worked Frequency rate (Total no. of fatal accidents and serious accidents with absence > 3 days) x 1,000 average number of employees Accident rate Total no. of fatal accidents and serious accidents with absence > 3 days) x 100,000 total no. of hours worked 127 Strukton Annual Report 2011

128 Acknowledgements Strukton Groep nv Coordination and editing Corporate Communications Text Suus van Geffen, Utrecht Design and layout AC+M, Maarssen Photography Aerovisio/Ronald Abelskamp, Frank van Biemen, Imre Csany, Architectenbureau Paul de Ruiter, Benthem Crouwel Architekten, Jildiz Kaptein, Michael Kloeg, Stef Libbrecht, Jannes Linders, George Ongkiehong, Christian Richters, Willem Jan Ritman, Ronald Tilleman, Martin Uitvlugt, Rene van der Waal, Mark van der Zouw 128 Strukton Annual Report 2011

129 129 Strukton Annual Report