Report 2012

Report of the Stichting Administratiekantoor TKH Group (TKH Trust Office Foundation) 2012

In accordance with the provisions of Article 9 of the Trust Conditions governing the shares of TKH Group N.V., as last amended on 14 May 2007, we wish to report that:

  • the activities during the year under review, 2012, related to the holding in trust of shares for which depositary receipts have been issued;
  • the nominal value of the ordinary shares of TKH Group N.V. held in trust amounted to € 9,527,481.50 on 31 December 2012, in exchange for which 38,109,926 depositary receipts for shares with a nominal value of € 0.25 each have been issued.

The objective of the TKH Trust Office Foundation (below: the Trust Office) is to acquire and hold in trust ordinary shares in TKH Group N.V., a public company which its registered office in Haaksbergen, in exchange for the allocation of registered depositary receipts for shares. The Trust Office is required to exercise the rights attached to the shares in such a way that the interests of the company and its business are safeguarded as effectively as possible. Hollandsch Administratiekantoor B.V. in Amsterdam is the administrator of the Trust Office.

Meetings of the Executive Committee

The Executive Committee of the Trust Office met three times during the financial year. The chair of the Executive Committee discussed with the company matters concerning the Trust Office.

At its meeting on 20 March 2012 the Executive Committee received a briefing from the company’s Executive Board on the annual report for 2011 and discussed the items on the agenda for the 2012 Annual General Meeting of Shareholders (AGM). Also discussed was the request of a depositary receipt holder to convene a meeting of depositary receipt holders. The Executive Committee noted that the request was merely to convene such a meeting and did not specify a topic for discussion or provide an agenda with explanatory notes. The Executive Committee therefore concluded that the General Meeting of Shareholders is the appropriate forum for depositary receipt holders to put questions both to the company and to Executive Committee of the Trust Office. This is conducive to transparent communication with all the company's stakeholders, to whom the Executive Committee of the Trust Office addresses itself in accordance with its constitution. Another matter discussed at this meeting was the composition of the Executive Committee of the Trust Office, since Mr Termijtelen was due to retire a member of the Executive Committee owing to the expiry of his term of office on 30 June 2012. The Executive Committee posted an appeal on its website to depositary receipt holders to nominate candidates for appointment. As no names of candidates were put forward, the Executive Committee appointed Mr Harrie Noy, former chairman of the Executive Board of Arcadis NV, as a member of the Executive Committee of the Trust Office as of 1 July 2012.

The meeting also discussed the provisions of the Dutch Corporate Governance Code affecting the issuing of depositary receipts for shares. Once again, the conclusion was reached that granting a voting proxy to depositary receipt holders regardless of the circumstances would be contrary to the objects of the Trust Office as described in its constitution. In this respect, it was determined that the law - in this case Section 118a of Book 2 of the Netherlands Civil Code – prevails over the relevant provisions of the Code. In line with this statutory provision a depositary receipt holder is granted a proxy to vote in his own right and based on his own discretion in a meeting of shareholders, but the Executive Committee will be entitled to limit, preclude or revoke that proxy in the circumstances described by law.

The members of the Executive Committee met on 15 May 2012 to prepare for the 2012 AGM. The agenda items of the AGM were discussed and the voting behaviour of the Trust Office provisionally determined, pending the deliberations in the AGM. Another matter raised at the meeting was Mr Termijtelen's retirement. The Executive Committee stated that it was very grateful to Mr Termijtelen for his commitment and professional contribution. He had managed to represent the interests of the depositary receipt holders in a very special way, without losing sight of the interests of the company and its businesses.

At the 2012 AGM the holders of depositary receipts for shares in the capital of the company were allowed to vote independently for the shares in question and subject to the relevant statutory provisions. At the meeting, 99.3% of the issued capital was represented. 62.0% of the holders of depositary receipts for shares requested a proxy from the Trust Office to vote independently on the shares in question. During the 2012 AGM the Trust Office cast votes for the remaining 37.3% of the issued capital represented at the meeting. After considering all the relevant factors the Trust Office voted at the AGM in favour of all of the items on the agenda which were put to a vote.

In its meeting of 10 September 2012 the Executive Committee of the Foundation discussed the authorisation of the Executive Board to issue preference shares as protection against a hostile takeover. The Trust Office has indicated that it will respect and honour the undertaking given by the company that, if cumulative preference shares have been issued for the protection of the company pursuant to a resolution of the Executive Board, it will - pursuant to the power granted during the 2012 AGM - call a General Meeting of Shareholders within 18 months rather than the period of 24 months referred to in the articles of association to vote on a resolution to either purchase or cancel these shares. The Trust Office considers that the wish of the depositary receipt holders has thus been met. In this meeting the Executive Board explained the published 2012 half-year figures as well as the majority interest acquired in Augusta Technologie AG in Germany. The Trust Office's website was also evaluated. The Trust Office once again noted that the website is informative and is visited regularly. The schedule of retirement in 2013 was also discussed.

Schedule of retirement

In accordance with the schedule of retirement Professor M.W. den Boogert is due to retire in 2013 and is eligible for reappointment for a further term of office. On its website the Trust Office has given the holders of depositary receipts for shares the opportunity to put forward the names of possible candidates that fit the profile. In the Trust Office's meeting of March 2013 any suggestions will be discussed by the Executive Committee.

Remuneration of the Executive Committee of the Trust Office

The remuneration for the independent members of the Executive Committee was most recently changed in 2007. The remuneration of the chairman is €10,000 per year and that of a member is €8,000 per year (excl. VAT). Additional remuneration is awarded if the Executive Committee is expected to make an extra effort. The costs of the Trust Office amounted to € 30,384 in 2012 (2011: €29.352).

Contact details

The Trust Office has its offices at the company’s address. The Trust Office can also be reached at its website at www.stichtingadministratiekantoortkh.com or by e-mail on stak@tkhgroup.com.

Haaksbergen, 12 March 2013
TKH Trust Office Foundation
The Executive Committee