Corporate governance structure at Aalberts Industries N.V.

Since the introduction of the Dutch Corporate Governance Code in 2004, the principles of sound company management and best practice provisions included in this Code have been discussed regularly during the Supervisory Board and Management Board meetings. In the opinion of the Supervisory Board and the Management Board Aalberts Industries pursues a consistent corporate governance policy based on the ‘apply or explain’ rule. Aalberts Industries endorses the principles of the Corporate Governance Code and applies virtually all the best practice provisions of this Code. Aalberts Industries has, to a limited extent, tailored the Code to specific circumstances within the company. A detailed explanation can be found on the company’s website as can the exceptional rules and regulations that have been drawn-up in response to the current Corporate Governance Code. The Management Board views the corporate governance structure as approved by the shareholders and applied within the company as formal confirmation of the implementation of an open, dynamic and honest management policy. This has been company tradition since its initial stock exchange listing in 1987. The main amendments to the standard Corporate Governance Code relate to the following topics:

1. Management Board: The company deems it important that it is able to offer employment conditions such that the right people can be recruited for the right positions. The term of the appointment is unlimited. Management Board members must obtain the approval of the Supervisory Board before accepting Supervisory Board memberships of other companies. Private investments need not be disclosed. When employment is terminated existing employment conditions and relationships are taken into account. This also applies to new appointments.
2. Supervisory Board: Supervisory Board members are not prohibited from holding shares in Aalberts Industries. A former Management Board member may be appointed a member of, or the Chairman of, the Supervisory Board. With regard to expertise, the composition of the Supervisory Board will be such that together its members can fulfil their responsibilities. The maximum duration of membership is three terms of four years, but in the interests of the company deviation from this is possible. Aalberts Industries does not specify the maximum number of Supervisory Board memberships that may be held by a member of its Supervisory Board but strives to apply a qualitative check. Before accepting an appointment (reappointment) as a member of the Supervisory Board of another company, a member of Aalberts Industries’ Supervisory Board must consult the Supervisory Board and the President of the Management Board in order to establish whether the acceptance of the (re)appointment is compatible with membership of Aalberts Industries’ Supervisory Board.
3. Company Secretary: The nature and size of the group is such that the creation of the position of Company Secretary is deemed unnecessary.
4. Provision of information: New information will be disseminated simultaneously and equally. Individuals are provided with information on the basis of the above principle. The external auditor will not be invited to attend the General Meeting unless this is legally required or the Supervisory Board decides otherwise; the company will enable questions regarding the audit to be submitted to the external auditor in writing prior to this meeting.

The Management Board believes that with the explanatory notes as published on the website it has complied in full with the principle of ‘apply or explain’. All the regulations pursuant to the Code that are applicable to Aalberts Industries in respect of reporting and transparency of information have been incorporated in this annual report and Aalberts Industries’ website. During 2009 there were no changes to the corporate governance structure as applied by Aalberts Industries.