2006ANNUAL REPORT

BatenburgBeheer NV

ANNUAL REPORT

2006

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This publication is an abbreviated English translation of the official report containing the audited financial statements,which is issued in the Dutch language. In case of discrepancies, the Dutch version shall prevail.

Contents

General information

Batenburg Group Profile 5 Report of the Supervisory Board 7 Key figures 8 The Batenburg Beheer N.V. share 9

report of the exeCutive Board for 2006

General 12 Strategy and policy 17 Corporate Governance 18 Risk Management 19 Financial 22 Organisation, personnel and society 24 Developments at operating companies 27 Prospects 29

finanCial statements 2006

Consolidated Balance Sheet 32 Consolidated Income Statement 33 Consolidated Cash Flow Statement 34 Consolidated Statement of Changes in Equity 35 Financial Reporting Principles 36 Notes to the Consolidated Balance Sheet 40 Notes to the Consolidated Income Statement 45 Segment Information 48

other information

Consolidated companies 50 Auditors’ report 51 Priority shares’ controlling rights 52 Preference shares 52 Profit allocation 52

misCellaneous

Workforce over the last five years 53 Organisation structure 54 List of operating companies 55

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General information

Batenburg Group Profile:

Batenburg Beheer N.V. comprises service companies in the fields of installation engineering and technical trading. The installation companies supply electrotechnical, mechanical and sanitary installations to clients in the non-residential building, infrastructure and industrial sectors, while the technical trading companies supply products, semi-manufactured products and services in the fields of electrical engineering, energy technology and fastening systems. The bulk of sales are made in the Benelux countries, with limited exports to other countries in Europe and North America.

The Batenburg Group consists of twelve operating companies in the Netherlands and Belgium, which employ a total of more than 1,000 people. The majority of these people work in the Netherlands. The decentralised organisational structure fosters entrepreneurship at the base of the organisation.

Installation

Engineering

Technical

Trading

8 installation companies in the Netherlands

approx. 900 employees

� 102 million in turnover

4 trading companies in the Netherlands and Belgium

approx. 120 employees

� 40 million in turnover

The company was established in 1911 and has its registered office in Rotterdam. The company’s shares have been listed on Euronext N.V. in Amsterdam since 1956.

Supervisory Board:

Prof. dr. W. van Voorden (Chairman)Ir. J. SmitG.N.G. Wirken RA

Executive Board:

Drs. P.C. van der Linden (Chairman)Drs. E.M. Bosma RV

Group Council:

A.B.W. Bosman G.H. van Dalen Ing. A.M. van Gogh MBA P.Th.M. IJsselmuiden A.T. Kemperman F. Popma B. Roseboom Ing. T.P.A. Scheenen E. van Veen Drs. L.J.M. van ’t Veer Drs. G.J. de Waard AA L. Zevenbergen

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Members of the Supervisory Board

Prof. dr. W. van Voorden (Chairman)

First appointment : 1977

Current term ends : 2008

Age : 64

Gender : Male

Nationality : Dutch

Former positions : Professor at Erasmus University Rotterdam and Tilburg University.

Chairman of the Healthcare Insurance Supervisory Board.

Other position(s) : Member of the Board of Stichting Administratiekantoor Ballast Nedam

Other supervisory functions : Telegraaf Media Groep N.V., Panteia B.V.

Ir. J. Smit

First appointment : 2003

Current term ends : 2009

Age : 60

Gender : Male

Nationality : Dutch

Former positions : Chairman SAG Controlec B.V.

Other position(s) : Member Board of Deans of KIVI NIRIA

Member Advisory Board of Facto Deventer B.V.

Other supervisory functions : None

G.N.G. Wirken RA

First appointment : 1995

Current term ends : 2007

Age : 58

Gender : Male

Nationality : Dutch

Current position(s) : Managing Director Valkrust Consultancy B.V.

Other position(s) : Chairman of the board for the postdoctoral controller course at Maastricht

University,

Member of the board for the postdoctoral controller course NIVRA/Nyenrode.

Other supervisory functions : Bauer AG (Germany), Vendor Holding B.V. (Chairman),

Winters Bouw- en ontwikkeling B.V., Advang Holding B.V., Rabobank Breda,

NIBO N.V. (Chairman)

Members of the Executive Board

Drs. P. C. van der Linden

Function : Chairman

Age : 54

Gender : Male

Nationality : Dutch

Supervisory functions : Rabobank Midden-IJsselmonde (Chairman)

Drs. E. M. Bosma RV

Function : Managing Director

Age : 44

Gender : Male

Nationality : Dutch

Supervisory functions : None

financial statements 2006The Supervisory Board takes pleasure in presenting the 2006 annual report and financial statements of Batenburg Beheer N.V. The Executive Board prepared the financial statements, and Mazars Paardekooper Hoffmann Accountants N.V. audited them and issued an unqualified opinion on the official report, which is issued in the Dutch language. The financial statements were discussed with the Executive Board on 29 March 2007 and we hereby submit them to you without any amendments. At the General Meeting of Shareholders to be held on 25 April 2007, we will recommend that you approve and adopt the financial statements and subsequently discharge the Executive Board regarding the policies pursued and the Supervisory Board regarding the supervision exercised. Shareholders will further be asked to set the priority share dividend at € 0.12 and the dividend on ordinary shares at € 1.90 (2005: € 1.80).

activities in 2006The Supervisory Board held nine formal meetings with the Executive Board in 2006, attended by all the supervisory directors. Fixed items on the agenda of the meetings with the Executive Board were the strategy and risks associated with the Batenburg Group’s activities, the financial results and reporting process, the structure and operation of internal risk management and control systems, the remuneration policy and the situation at the operating companies. In response to further developments in the field of corporate governance, the Regulations on Ownership of and Transactions in Securities were updated in 2006. At a meeting without the Executive Board, the Supervisory Board discussed its functioning and the composition and the functioning of the Executive Board. There were fairly regular contacts between the Chairman of the Supervisory Board and the Chairman of the Executive Board regarding various current affairs. At three meetings, the audit findings, the operation of internal control systems and the financial results were discussed with the Executive Board and the auditor. During these discussions, supervisory directors also talked to the group’s auditor in the absence of the Executive Board about his findings. The auditor’s independence in relation to Batenburg Beheer is verified each year. The Supervisory Board attaches importance to good contacts with the employee representative bodies of the companies. Supervisory directors regularly attend consultative meetings at the different companies according to a schedule laid down from year to year. One of the supervisory directors always attends the meeting between the CPI (Central Personnel Information) and the Executive Board. The Supervisory Board appointed Mr P.Th.M. IJsselmuiden (IJsselmuiden), Mr L. Zevenbergen (Bevar) and Mr Drs. L.J.M. van ‘t Veer (Batenburg Beheer) to the Group Council of Batenburg Beheer.

other informationRules for the Supervisory Board’s work have been laid down in Regulations. All supervisory directors are independent. No supervisory directors were members of the company’s management in 2006 or in any of the five preceding years, nor have they been awarded any result-linked remuneration. The strengthened rights of recommendation enjoyed by works councils under the new two-tier structure apply to the socio-economic function of the Supervisory Board, which is fulfilled by Mr Van Voorden. Mr G.N.G. Wirken RA will be retiring by rotation in 2007. He has indicated that he is available for reappointment. Mr Wirken’s financial and economic background, combined with his managerial qualities and his affinity for the market sectors in which the Batenburg companies operate, are regarded as particularly valuable to Batenburg Beheer N.V. The Supervisory Board considers that his reappointment would be in the company’s interests and therefore recommends to the General Meeting of Shareholders that Mr Wirken be reappointed for a four-year term. The works councils have declared their support for the Supervisory Board’s recommendation. Mr Wirken’s particulars can be found on page 6.

After a difficult start to 2006, a strong recovery was realised in the second half of the year and, in the end, net profit was higher than in 2005. The Supervisory Board wishes to express its appreciation for the performance achieved and the dedication of the Executive Board and employees.

Rotterdam, 29 March 2007 supervisory Board: Van Voorden (Chairman) Smit Wirken

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report of the supervisory Board

IFRS NL GAAP

2006 2005 2004 2004 2003 2002

Result

Net turnover 142.3 130.9 130.5 126.1 133.8 117.3

Operating income before amortisation

of goodwill (EBITA) 5.8 6.0 5.9 6.1 7.2 6.4

Operating income after amortisation

of goodwill (EBIT) 5.8 6.0 5.9 5.8 7.0 6.3

Net profit 4.9 4.8 4.2 4.0 4.3 4.1

Cash flow

Cash flow 6.6 6.3 5.9 6.0 6.6 6.2

Depreciation 1.6 1.5 1.7 2.0 2.3 2.1

Investments 3.5 3.1 1.2 1.2 1.3 10.3

Dividend proposal 2.3 2.2 1.9 1.9 2.0 1.9

Capital

Balance sheet total 71.0 62.7 61.7 60.9 59.4 56.0

Shareholders’ equity1 38.8 35.9 32.7 33.0 30.5 27.8

Net working capital 23.5 23.9 22.6 23.9 19.7 15.9

Capital invested2 42.0 39.1 36.1 37.1 34.3 31.5

Employees

Average number of employees 984 961 974 974 953 871

Number of employees at year-end 1,025 943 978 978 970 935

Personnel costs 42.4 40.0 40.1 40.2 39.5 35.7

Ratios in %

Return on equity 12.7 13.4 12.7 12.1 14.1 14.7

Return on average capital invested 12.1 12.8 12.0 11.2 13.1 13.3

Operating income before amortisation

of goodwill on sales 4.1 4.6 4.6 4.8 5.4 5.5

Operating income after amortisation

of goodwill on sales 4.1 4.6 4.6 4.6 5.2 5.4

Return on sales 3.5 3.7 3.2 3.2 3.2 3.5

Solvency3 54.6 57.3 53.0 54.2 51.4 49.7

1 2002 figures adjusted to take account of revised guidelines on the recognition of the dividend proposal in the balance sheet.

2 Capital invested = fixed assets + net working capital.

3 Solvency = shareholders’ equity / balance sheet total.

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Key fiGures

Amounts in € million unless stated otherwise

the BatenBurG Beheer n.v. share

Batenburg Beheer N.V. shares

Batenburg Beheer N.V. shares have been listed on Euronext N.V. in Amsterdam since 1956. At year-end 2006, 1,204,122 ordinary shares were issued, each with a par value of € 0.80. The number of issued shares remained unchanged in 2006. To promote the marketability of the Batenburg Beheer share, SNS Securities acted as market maker during the reporting year.

Key figures per ordinary share

In € IFRS NL GAAP

2006 2005 2004 2004 2003 2002

Net profit 4.08 4.00 3.45 3.32 3.58 3.41

Cash flow 5.44 5.22 4.88 4.96 5.48 5.17

Equity 32.18 29.81 27.15 27.41 25.36 23.10

Dividend proposal 1.90 1.80 1.60 1.60 1.70 1.60

Pay-out in % 47% 45% 45% 48% 48% 47%

Highest quotation 58.90 44.55 33.98 33.98 28.00 32.04

Lowest quotation 42.20 31.20 27.15 27.15 23.00 24.95

End-of-year quotation 48.77 43.20 31.20 31.20 27.50 24.95

Since 2005, the key figures have been presented on an IFRS basis and the results for 2004 recalculated.

Batenburg Beheer’s dividend policy is intended to pay shareholders a minimum dividend of 40% of net profits each year. The proposal is to increase the dividend for 2006 to € 1.90 per share, which would result in a pay-out of 47%. The dividend yield is 3.9%, based on the year-end quotation of the Batenburg Beheer share in 2006 (€ 48.77).

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02002 2003 2004 2005 2006

Performance of the Batenburg Beheer N.V. sharein

30

35

40

60

Highest - Lowest quotation =Closing quotation =

25

45

50

55

1

02002 2003 2004 2005 2006

Net profit per share and dividendin

2

3

4

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Earnings per shareDividend

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Price-sensitive information and disclosure of major holdings

On the subject of price-sensitive information, Batenburg Beheer has drawn up a protocol based on the model of the Association of Securities-Issuing Companies (VEUO), as approved by the Netherlands Authority for the Financial Markets (AFM). The Batenburg Beheer Regulations on Ownership of and Transactions in Securities contain a clause prohibiting trading in the run-up to the publication of the annual figures and the publica-tion of the half-year figures. These regulations have been published on the company’s website.

On the basis of the new Disclosure of Major Holdings Act 2006, the AFM keeps a register of Substantial Holdings. Shareholders must disclose participations in issuing institutions as soon as they total 5% or more of the issued capital. Such participations must then be disclosed again as soon as they reach, exceed or drop below a certain threshold. The register contains the following disclosures, updated to 29 March 2007:

Disclosed by Disclosed interest

Driessen Beleggingen B.V. 9.91 %

Decico B.V. 8.68 %

Delta Deelnemingen Fonds N.V. 8.30 %

Nelclar Beheer B.V. 6.95 %

J.H. Langendoen 5.56 %

J.H. de Groen 5.40 %

VDL Beleggingen B.V. 5.23 %

Generali Holding Vienna A.G. 5.22 %

J.L. van den Heuvel 5.19 %

Monolith Investment Management B.V. 5.16 %

E.M. Aarts 5.06 %

Stichting Preferente Aandelen Batenburg Beheer NV 99.98 %

Publication date of Annual Report 2006 10 April 2007

General Meeting of Shareholders 25 April 2007

Ex-dividend quotation of the share 27 April 2007

Dividend available for payment 10 May 2007

Publication of half-year figures 2007 (after the close of trading) 30 August 2007

The General Meeting of Shareholders of Batenburg Beheer will be held at the Novotel Rotterdam Brainpark, K.P. van der Mandelelaan 150 in Rotterdam, on Wednesday 25 April 2007, commencing 10.30 a.m.

The agenda for the General Meeting of Shareholders, and explanatory notes, are also available on the company’s website (www.batenburg.nl).

Key dates

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Hoogendoorn automates innovative horticulture project in Bergerden Hoogendoorn is involved in realising the Bergerden Horticulture Cluster, a horticultural zone of 350

hectares which will gradually become home to 40 horticultural businesses. Hoogendoorn was chosen as

the exclusive supplier and innovation partner for the automation project. As well as the process computers,

which regulate greenhouse climate for the businesses, Hoogendoorn is also supplying advanced ICT products

and services at central level as part of an ASP concept that is unique in the horticultural sector.

The new horticultural zoneOver the last decade, the towns of Nijmegen and Arnhem have developed many surrounding horticultural

areas in order to meet the need for new housing. Consequently, a new location has been sought in recent

years for large-scale horticulture. So the Bergerden

horticultural zone was born, situated in Bemmel in

the province of Gelderland. Within just a few years,

350 hectares of land will be developed by some

40 horticultural businesses. A central water and energy

supply has been chosen for the new horticultural

zone, to which all the horticulture businesses will be

connected.

Energy managementHoogendoorn regulates each company’s climate

in the most energy-efficient way. The ASP concept

(Application Service Providing) makes for even greater

energy efficiency, as each company’s projected energy

requirement is calculated by an adaptive computation

model which uses a 7-day weather forecast exclusively

supplied by Meteoconsult. These forecasts are used

by the central energy supply department to optimise

the purchase of gas, energy conversion and the

distribution/logistics of the energy flows and heat

buffering for the whole zone. This system achieves

an overall cost saving of at least 10% compared with

conventional systems.

The greenhouse as an Energy source, Airco GreenhouseConditioned cultivation in (semi-)sealed greenhouses

is a major horticultural development. Greater control

over the greenhouse climate translates into higher

output and better quality vegetables and ornamental

plants. Refrigeration is particularly important. In

(semi-)sealed greenhouses, instead of being removed

by ventilation, the warmth of the sun is stored in the

ground and later re-used or supplied to third parties,

such as office buildings or homes. In 2006, with

government backing, the innovative “Greenhouses

as an Energy Source” project built a demonstration

greenhouse in the Bergerden zone. Talks are also

underway with horticultural businesses in Bergerden

about the implementation of the Airco Greenhouse concept, an advanced form of semi-sealed greenhouse

developed jointly by Hoogendoorn and Wageningen University, which was nominated for the Hortifair

Innovation Award in 2006.

Process registration, data integration and knowledge developmentAnother major objective of the Bergerden cluster, besides optimum energy management, is to further

optimise crop yield through knowledge development in a shared learning process. To do this, data about

processes at the various businesses must be gathered and stored according to a standard protocol. In

addition, various kinds of data such as temperature, CO2 concentration, irrigations, fertiliser consumption,

hours worked, crop figures, energy consumption and so on have to be integrated in a single database.

Only then, through analysis and data mining, can new connections be made and knowledge developed.

Hoogendoorn, in partnership with LetsGrow.com, developed the entire data infrastructure and all the

software facilities for this project, which it makes available to the cluster in the form of ASP services.

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report of the exeCutive Board for 2006

General

After a difficult start to the year, the situation greatly improved at Batenburg Beheer N.V. Net profit for the whole of 2006 increased modestly to € 4.9 million, while turnover grew by almost 9% in 2006, to € 142 million. The result in the Installation segment recovered in the second half of 2006, whilst business in the Trading segment developed well for the year as a whole.

The table below summarises financial developments in 2006 compared with the previous year:

Net turnover rose remarkably in 2006, from € 130.9 million to € 142.3 million. Of the total growth in turnover of 9%, 6% is organic growth. Operating income (Ebit) for 2006 was down a little in 2005. This was due to pressure on margins at the installation companies, where the cost of sales was significantly higher than the previous year. Other operating costs decreased relative to the increase in turnover. Effective taxation dropped from 22% to 18%, due in part to a reduction in the applicable rates of corporation tax in 2006 and 2007.

Installatiebedrijf en Ingenieursbureau Koldijk B.V.

Electrical and security installations for the new railway station Vathorst in Amersfoort.

x € 1 million 1st half 2nd half Total Total Change

2006 2006 2006 2005

Net turnover 65.9 76.4 142.3 130.9 9 %

EBIT 1.6 4.2 5.8 6.0 -3 %

Net profit 1.4 3.5 4.9 4.8 2 %

Net profit (in € per share) 1.13 2.95 4.08 4.00 2 %

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Net profit was up 2% compared with 2005.

We report in accordance with the International Financial Reporting Standards that have been adopted and declared applicable by the European Union (EU IFRS). New and adapted IFRS standards did not produce any significant changes compared with 2005.

2006 got off to a difficult start for the Installation group. Despite higher turnover, it made a loss in the first half of the year. This disappointing performance was caused in part by sustained, fierce price competition in the non-residential sector and discontinuity in capacity utilisation. Faced with the threat of idle capacity, a number of installation companies were compelled to submit very low-priced offers. The situation was partly the result of the postponement of orders placed. In addition, a number of companies had to contend with setbacks in the execution of projects. In the second half of 2006, however, both capacity utilisation and project management improved and projects were acquired at better prices. Consequently, operating income in the Installation group recovered and the quality of work in progress increased.The Trading Group continued to develop strongly in 2006. Turnover from trading posted organic growth of around 7%. The results of all the trading companies improved in 2006, due in part to stringent control of operating costs. The flattening out in the growth of results from trading activity that was expected halfway through the year did not materialise, as demand remained strong and costs were kept in check.

Regular talks about possible takeovers continued in 2006. Supply, particularly in the installation sector, is conspicuously strong. The talks resulted in the takeover of the multidisciplinary installation company IJsselmuiden & Zonen in Sassenheim in April 2006. At year-end 2006, the activities of Bosma Installaties in Deventer were acquired by Van Dalen Installatietechniek in Twello. The acquisition of these two installation companies strengthens activities in the field of electrotechnical, mechanical and sanitary installations. We will seek further acquisitions in 2007, focusing particularly on strengthening the trading segment in order to maintain the balance between installation and trading.

installationThe Installation group of Batenburg Beheer consists of eight companies that design, install and maintain light and power installations,

mechanical and sanitary installations, process automation, telematics, security systems and switchboard and control panels.

The Dutch non-residential building market picked up in 2006, with the budget sector leading the way. Although the market sector still lags behind, here too the outlook is more positive than in recent years. There was an increased supply of installation projects in the non-residential building sector in 2006. The market for new offices made cautious progress, but the biggest growth was achieved in housing construction, which is of less significance to our companies. Interestingly, while various indicators point to a strong recovery in the market, growth in the level of prices continues to lag behind growth in production. The shortage on the labour market is also very apparent.Over the next few years, the construction of new offices and the healthcare sector are expected to be the main areas of growth. Given the high vacancy rate of buildings at present, this is surprising. Vacancy rates decreased in 2006 for the first time in years, and the average contract duration increased. However, the lack of interest among new lessees in outdated office and business premises is becoming clearly apparent.

2006 was a year of changing fortunes for our installation companies in the non-residential building sector. After a disappointing start to the year, with discontinuity in capacity utilisation, the last six months were very busy. Planning gaps forced a few companies to tender for projects at very low prices at the start of 2006. Moreover, idle capacity, or the threat of idle capacity, is usually accompanied by lost productivity. After the summer, however, the installation companies were very busy and the volume and quality of orders in hand means that 2007 will get off to a better start than 2006.

The industry as a whole benefited from a recovering market in 2006, thanks to improved

Beenen B.V.

Production of control panels with an UL-certificate destined for a

moulding press for packaging material in Mexico.

confidence in the development of the economy. Investment activity is also brisk in the infrastructure market (rail, energy and water). As these markets pick up, our companies receive more orders for industrial process automation and machine control applications to improve efficiency and expand capacity. Ensuring the safety of employees and the environment are also major motives for further optimising industrial processes. Increasingly, communication between the production level and ERP and data management systems is becoming an important aspect of the total production management process. As a result, the companies are gradually becoming more involved in Manufacturing Execution Systems (MES). This is the automation layer between the logistics and administrative systems on the one hand and production and process control on the other.

A key factor in the profitability of installation companies is their ability to gear their available capacity to market demand. In 2006, our installation companies regularly used the capacity of sister companies in order to achieve the highest possible capacity utilisation. Acting as a turnkey supplier of technical installations can be seen as a major advantage by clients of installation companies. Although accepting turnkey projects that are not executed entirely by ourselves does increase turnover, it does not always contribute to the return on sales. Often, there is little or no margin on the outsourced components of the project. As the proportion of outsourced activities continued to grow in 2006, project management of, in particular, innovative and complex orders remains one of our focuses.

The turnover of the installation companies rose from € 92.7 million to € 102.1 million in 2006.

Construction consortium for the Oldeholtpade Drinking Water Pumping Station In 2006, the Beenen and BBF Friesland project consortium delivered the turnkey project for the expansion

of the Oldeholtpade drinking water pumping station. The project involved engineering and realising the

electrotechnical, mechanical, civil engineering, structural and building work. A new wing has been added

to the pumping station so that water can be softened.

The client, Vitens, commissioned the project in order to improve the colour and hardness of the water from

the pumping station. Although the water already met all the legal quality requirements, it had a yellowy

tint caused by the presence of humous acid in the groundwater. Although not harmful to health, this

meant that Vitens was less able to exchange water with other drinking water stations, and it impinged on

the flexibility of the supply of drinking water in South Friesland.

Bearing in mind environmental requirements, the total cost of ownership and feasibility considerations, a

pellet-based method was chosen to soften the water. The drinking water’s colour is improved by means of

ion exchange. Oldeholtpade is the only place in Europe to use this technique on such a large scale, which

enables even groundwater that is difficult to purify to be turned into clean, colourless drinking water.

The new stills for the clarification installations have been arranged in a carousel and are rinsed in cycles.

This makes for greater flexibility and less residual matter. Vitens itself can remote-control the process.

Pellet softening reactor. Ion exchangers.

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However, operating income related to turnover from installation work decreased from 3.2% to 1.3%, because of the poor first half-year. Improving the Ebit margin is a major concern for 2007. The work in progress at the installation companies increased considerably in 2006. The average number of employees at the Installation group was 865 in 2006 (2005: 828).

tradingThe Batenburg Beheer Trading Group consists of four technical trading companies, which provide advice, systems and components for applications in the fields of energy generation and distribution, instrumentation, control panels, process automation and machine and equipment building. Products and semi-finished products are supplied to the infrastructure market and to industry. We make a distinction in the infrastructure market between the energy market (network management, production and distribution of electricity) and rail infrastructure.

Energy prices again played an important role in global economic developments in 2006. The debate about dependence on oil still rages, fuelling debate about the urgent need to make other sources of energy available. A number of interesting developments are taking place in the Dutch energy market, with which our companies have dealings:a. There has been wide-ranging political debate

about free market processes in the energy sector and the desirability of unbundling

ownership, management and use of the electricity distribution networks. After many amendments, the Unbundling Act was finally adopted in November 2006. The unbundling articles will not take effect in the Netherlands until an unbundling law is adopted at European level, or when public and independent network management is jeopardised. Other components of the Act do, however, take immediate effect. Management of high-voltage lines of 110 kV and above, for instance, is being transferred to the national network manager, TenneT.

b. Economies of scale continue at European level, forcing two large energy companies in the Netherlands to start merger talks with a view to forming the Netherlands’ largest energy supplier.

From a continuity perspective, it would be a good thing, in principle, if the Dutch energy companies could establish a strong competitive position in the European energy sector. However, economies of scale do carry a number of risks. Increasing use of European tenders, and the scale of those tenders, will put prices under even heavier pressure in the face of international competition. Much more effort will have to be devoted to pre-selection processes and form-filling associated with the tenders. With regard to pre-selection processes, it is important for the technical trading companies – just like the installation companies – to maintain good technical knowledge and financial capacity.

With mounting demand from the various markets in the last two years, trading companies are increasingly having to contend with longer delivery times from manufacturers. Whereas, in the old buyer’s market, the end customer sought to reduce stocks and obtain purchasing advantages, we now seem to be returning to an environment in which trading companies that are able to supply on time have a strategic advantage. However, from a risk point of view, it is not advisable to maintain overly large stocks. Consequently, now more than ever, parties in the distribution channel will have to cooperate and harmonise their sales projections and adjustments of these projections.Timely measures taken in consultation with suppliers and customers eliminated the need to write down the value of stocks in connection with the European Directive on the “Restriction of the Use of Certain Hazardous Substances” (RoHS). However, additional costs were incurred where fastener materials had to be galvanized in order to comply with the current RoHS Directive.

Hoogendoorn Group

The Airco greenhouse concept developed by Hoogendoorn

Automation enables efficient conditioned crop cultivation.

The turnover of the Trading group rose 5%, from € 38.3 million to € 40.2 million, in 2006, while operating income related to turnover increased

from 8.8% to 11.9%. As the bulk of the trading companies’ operating costs are fixed, robust growth in turnover can result in more than a

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Seher at Rotterdam PortEuromax Terminal Euromax is a joint venture between ECT and Maersk. The state-of-the-art container terminal is being built

to accommodate the big increase in container traffic at Rotterdam Port. The terminal is being created in

the northwestern section of the Maasvlakte. Phase I of the terminal is scheduled for completion at the end

of 2007.

To supply electricity to the new container

terminal, the existing ENECO NetBeheer 150 kV

station will be expanded, with a third 150 kV

transformer. Seher has been commissioned to

supply the necessary 150 kV earthing switch and

150 kV surge diverters.

Euromax Terminal’s energy requirements will be

met by the existing 25 kV station, and the 25 kV

medium voltage installation will be extended to

accommodate this. To do this, Seher is supplying

Siemens Nederland with a 36 kV-2500A insulated

rail system.

It is also supplying sixteen transformer stations,

capacitor banks and low-voltage distributors to

GTI Infra B.V. These will be used to connect reefers

at the terminal to a 0.4 kV electricity supply.

Waalhaven A thyristor controlled capacitor bank has been

supplied to ENECO Energie Infra B.V. at the

Waalhaven. It is designed to compensate blind

current on a gantry crane at the Waalhaven

Terminal. Unusually, the capacitor bank will be

installed directly in the dock-side crane.

This means that the installation will be assembled

in situ, 25 metres above ground level. Because of this crane’s quick load reversals during loading and

unloading, the blind energy consumed cannot be compensated using conventional techniques.

The thyristor controlled capacitor bank provides a

solution to this, so that fines for consuming too much

blind energy can be avoided.

Complete in medium-voltage systems and transformer stationsBecause of its short delivery time, Seher has been

commissioned by Imtech Infratechniek to supply a

fully-equipped, concrete 630 kVA transformer station

for Damen Shiprepair.

Five transformer stations are also being supplied for

Norfolk Line’s new ferry terminal at the Vulkaanhaven

port in Vlaardingen. This port can accommodate the

latest generation of roll-on/roll-off vessels up to

200 metres in length. Seher has supplied one walk-in station of 800 kVA and four identical compact stations

of 250 kVA. All the stations are equipped with a transformer, a low-voltage installation and a Ring Main

Unit manufactured by Zpue.

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proportional increase in profits. However, it is important to guard against putting the employees under excessive strain. Timely investment in strengthening the organisations and keeping the automation systems up to date is essential. The intake of orders by the technical trading companies at year-end 2006 was much higher than at year-end 2005. The average number of employees at the Trading group was 119 in 2006 (2005: 118).

Strategy and policy

GeneralBatenburg Beheer N.V. consists of companies that provide services in the fields of installation engineering and technical trade. These activities are presently carried out by eight installation companies and four trading companies that together employ more than 1,000 people. The companies operate in the submarkets of industry, non-residential building and infrastructure in the Benelux countries. The Installation group is active mainly in the Netherlands and most of the companies fulfil a regional function. Hoogendoorn Automatisering additionally exports knowledge and automation products outside the Benelux countries and has its own branches in the United Kingdom, France and the United States. The companies of the Trading Group are based in the Netherlands and Belgium and concentrate on representing international suppliers in the Benelux market or on the order-driven supply of complete customised packages of brand-independent products. They also supply small and medium-sized series of products and semi-finished products from their own workshops with a high added value for the customer.

The Batenburg Group is a market-focused organisation made up of operationally independent companies that retain their own identity. This stimulates entrepreneurship at the base of the organisation to the fullest possible extent. We recognise the importance of striking the right balance between the individual organisations and the unity of the Batenburg Group. Batenburg Beheer strives for sustained, profitable continuity from an independent position in the Benelux market. We want to be a reliable and solid partner for all of the company’s stakeholders. Batenburg Beheer endeavours to grow by at least 5% year-on-year on average, with a net return on sales of 4% and a return of at least 12.5% on the average capital invested.

To achieve our objectives, we have opted for a flat, decentralised structure that allocates far-reaching powers to the individual operating companies, which carry out their activities in a way that allows them to retain their own identity. The companies are individually responsible for assuring profitable continuity. As and when necessary, they carry out projects jointly or use products and services of sister companies. Our control system is built on a fixed reporting structure, regular consultations with different levels of the operating companies and regular visits to the group companies.

The Batenburg companies aim to excel through a flexible and customer-focused approach and the quality of the services and products they deliver. Long-term relationships, knowledge of customers’ processes and the possibilities for using products are extremely important factors, as is brainstorming with the customer in the engineering phase. The availability of expert and motivated employees, local presence and a good price/quality ratio are also important. This approach is designed to produce a return higher than the market average. The companies endeavour to consolidate and expand existing market positions through organic and external growth.We achieve organic growth by developing existing market positions, building new, sustained relationships with our customers, being innovative and acquiring new commercial agencies. It is sometimes prudent to establish branch offices to achieve further growth in an efficient and manageable way. We also seek to grow by acquiring companies that contribute to the attainment of Batenburg Beheer’s business objectives, looking primarily for companies with a distinctive edge. Acquisition talks were a regular feature in 2006. As a result of such talks, the installation company IJsselmuiden & Zonen from Sassenheim was taken over in April, followed by the activities of Bosma Installaties

M. Seher & Co. N.V.

Seher offers Sunon fans for industrial applications.

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in Deventer at year-end 2006. In 2007 we will endeavour to strengthen our market position through further acquisitions.

Corporate governance

The Supervisory Board and Executive Board of Batenburg Beheer generally endorse the principles of corporate governance set out in the Dutch Corporate Governance Code (the Code). The central thougt is that the company, directors and regulators must aim for long-term continuity and seek to maximise benefit for the company’s stakeholders. Fair and honest representation and objective supervision are vital to a good relationship with shareholders, which is also aided by clear and open communication.

There were no changes to the way the Code is applied at Batenburg Beheer in 2006. There are a handful of best practices which Batenburg Beheer does not follow, partly because a number of provisions do not apply to Batenburg on account of the company’s size. The departures from the Code are listed and explained below:

• The four-year term of office does not apply to the current Executive Board. In principle, each time a new appointment is made to the Executive Board, a four-year term is considered (best practice II.1.1).

• For reasons of privacy, and due to the size of the company, it is not considered prudent at present for members of the Executive Board to disclose holdings in listed Dutch companies to the compliance officer. The legal provisions on abuse of insider knowledge are set out in Regulations on Ownership of and Transactions in Securities (best practice II.2.6).

• The company wishes to follow the current legal provisions on dismissal, having due regard for the specific circumstances of the termination of employment, the age of the member of the Executive Board in question, and length of service (best practice II.2.7.).

• Given the size of the company at present, there is no reason to assume that an induction programme is necessary. The Chairman of the Supervisory Board will assess training needs where necessary and use his discretion (best practice III.3.3).

• The Supervisory Board takes the view that the quality and contribution of supervisory directors in relation to the profiles drawn up and the company’s needs must determine the length of appointments. There is, however, an upper age limit of 70 years (best practice III.3.5).

• In view of the size of the company, secretarial support for the Supervisory Board is not deemed necessary (best practice III.4.3).

• For reasons of privacy, and due to the size of the company, it is not considered prudent at present for members of the Supervisory Board to disclose holdings in listed Dutch companies to the compliance officer. The legal provisions on abuse of insider knowledge are set out in Regulations on Ownership of and Transactions in Securities (best practice III.7.3).

• We are awaiting legal developments regarding the issue and financing of financial preference shares (best practice IV.1.2).

• In view of the local nature of our activities, and our diverse shareholder base, we set great store by contact and exchanges of views with shareholders at the General Meeting of Shareholders, which we prefer over proxy voting (best practice IV.1.7).

• Given the costs of using resources such as webcasting, special telephone lines etc., the company chooses to assess each occasion on its merits (best practice IV.3.1). The full corporate governance structure of Batenburg Beheer is available on the website of the company.

Schekman Elektrotechniek B.V.

Electrical installations for DHL at the Wijchen logistics centre.

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Risk Management

risk systemHaving due regard for Batenburg Beheer’s decentralised philosophy, risk is managed at different levels in the organisation. Strategic and financial risks are discussed at consultation meetings involving, as necessary, the Supervisory Board, the Executive Board of the holding company and the managements of the operating companies. The members of the Supervisory Board also pay annual visits to a number of operating companies to find out about the latest developments at the companies. Operational risks are mainly a matter for the managements of the operating companies. In 2006, the Batenburg Enterprise Risk Management system (BERM) was piloted at two operating companies. BERM is an online system based on the premises of the COSO model, which was tailored to the activities of the Batenburg Group when it was set up. Consequently, the risk assessments applied in the Installation and Technical Trading segments sometimes differ. After the pilot phase, in the second half of the year risk assessments were carried out at all Batenburg Group companies. The findings were discussed at the companies and actions were formulated. The outcomes were also discussed with the Supervisory Board.

One of the risk areas which received a lot of attention last year, including on the Group Council, was our increasing reliance on an efficient and reliable IT infrastructure. Internal IT audits were conducted at all the companies in 2006, which found scope for improvement from a financial and risk perspective. A more centrally coordinated approach to automation results in more efficient use of hardware and software, reduces administrative costs at the operating companies and significantly diminishes risks. However, the lower acquisition and administrative costs associated with a central approach are countered by higher communication costs because of the need for broadband connections.

risk profilea) Strategic risks

Batenburg Beheer endeavours to achieve controlled growth in its results and to spread its risks in a responsible way, while maintaining average growth in turnover of 5%. To this end, we seek a balance between the use of new and innovative technologies with a higher risk profile, and the supply of existing products and services. In both cases we prefer to do this in

niche markets. We also seek a good spread across the various markets. The distribution of turnover of the whole Batenburg Group in 2006 across the Industry, Non-Residential Building and Infrastructure markets is shown below.

Our trading activities are of an early-cyclical nature, while the installation activities (especially where systems for non-residential buildings are concerned) are late-cyclical. We devote attention to dependence on suppliers and customers. Existing relationships may come under pressure because of international concentrations or the relocation of companies. Distribution across markets is also important to avoid a situation where a decline in one of the submarkets impacts excessively on our total operating income. We consult periodically with the managements of the companies on changes in their business environment and the implications for the policy being conducted. Our acquisition policy pays special attention to aspects such as the management of the companies, their market position and corporate culture, and their influence on the group’s results and the target return on capital invested.

We consider the following strategic risks particularly relevant to the Batenburg Group in the short and medium terms:

• MarketdevelopmentsThe relocation of industry from the Netherlands and Belgium to low-wage countries is narrowing the possibilities for selling our products and

De Bosman Bedrijven B.V.

All electrical installations for the ISS office in Papendorp commissioned

by Kroon Group B.V. in Zeist.

Industry

38%

Non-Residential

Building 42%

Infrastructure

20%

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services, both in the installation sector and in the trading sector. Fewer sales opportunities mean more competition in the Benelux market, particularly on prices. Economies of scale in the energy market and internationalisation in industry bring both opportunities and threats. In particular, the increasing use of European tenders in various markets creates more paperwork and means that the companies have fewer opportunities to distinguish themselves on the basis of quality and knowledge of the products and services supplied.

• DependenceoncustomersandsuppliersThe increasing complexity of the solutions offered, the need for customer-focused service provisioning and network structures in industry are leading to a greater (mutual) dependence on suppliers and customers. This means there are commercial risks if a relationship is terminated for whatever reason. Wherever possible, the operating companies use “second sources” in addition to the main supplying companies. In the trading sector, however, this is often not possible, as our companies market foreign brands in the Benelux countries. This brings benefits, but also entails commercial risks.

• ContinuityofmanagementandsinglepointsoffailureThe small size of some of our operating companies means that individual managers or individual employees may sometimes be extremely important to the continuity of the organisations concerned. For cost reasons, it is not always possible to distribute the know-how possessed by employees amongst several persons. The lack of central staff departments means that knowledge often has to be available locally.

• CompetitionandpricingThe installation sector and technical trading are mature markets with growth which keeps pace with the development of the economy at large. Given the open and transparent manner in

which we do business and the large number of competitors in the Benelux countries, there is often direct competition on price and quality. In more difficult economic periods, this can exert pressure on prices. The installation companies also face competition from companies outside the installation sector which seek to maintain contact with the end user through vertical integration. The energy companies are one such example.

• QualityofthelabourmarketThe companies of the Batenburg Group are technically oriented businesses, seeking to stand out for their high quality knowledge of products and applications and good quality application or work. The limited inflow of well-trained and motivated young people in technical education and, subsequently, in our sectors is a growing cause for concern.

• TransparencyandlevelplayingfieldListed companies are still required to exercise increasing openness and transparency. Moreover, different companies in the same markets apply different reporting rules. Greater transparency and the application of different accounting principles for preparing financial statements may create a competitive disadvantage compared with similar, non-listed companies. The opportunity to compare performance levels when selecting candidates in tender procedures will also be reduced.

b) Operational risks Due to the labour-intensive nature of our activities, the development of wage costs has a strong knock-on effect on our operating result. Over the next few years, the shortage on the labour market will push up wages. A large part of our turnover is related to projects. In the non-residential building sector, projects can have a lead time longer than one year, with typically a fixed contract price. We are reducing the effect of a possible decline in our clients’ propensity to invest by devoting attention to spreading our turnover and additional activities generally undertaken on contract or as an orchestrator, such as servicing and maintenance.

Generally speaking, there is a growing litigation culture and a greater likelihood of being held liable for consequential damage due to defects in supplied equipment. We limit these risks as far as is possible through insurance and through arrangements agreed with our suppliers. Our companies have their own systems for minimising risks in the fields of quality, safety, health and the environment. The following risks in particular may arise:

Van Dalen Installatietechniek B.V.

Electrical installations in the parking of Rijnstate hospital in

Arnhem.

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• ProjectmanagementandcapacityutilisationThe results of large, complex projects influence the group’s results. Moreover, if there is a lower volume of contracts in the market, the work in hand may frequently consist of short-duration work and there may be discontinuity in the utilisation of capacity by projects obtained on contract but for which the actual work is postponed. Generally speaking, if there is some pressure on capacity utilisation, work is done more efficiently and better project results are achieved.

• EmployeesThe availability and retention of well-educated, specialised and committed personnel is crucially important to the success of our customer-focused companies. Insufficient intake curbs the potential for our activities to grow organically.

• StocksThe ability to deliver from stock helps our trading companies to gain the kind of distinctive edge they want. In recent years, customers have been pushing stocks farther back down the supply chain to the trading companies and manufacturers. The economic recovery in Europe has meant much busier order books for manufacturers, which in turn means longer delivery times. For capital goods in the energy sector, the delivery time can sometimes be as long as 18 months. In this situation, it is not easy to keep products in stock, because the period over which market demand has to be anticipated is too long. Products from the Far East generally have longer transport and delivery times. Unmarketability and the postponement and cancellation of orders are risks attached to keeping stocks.

• AccountsreceivableandfinancingofworkinhandOur companies conduct a policy of actively managing accounts receivable. Much attention is paid to the screening of customers and getting paid on time. The financing of work in progress can come under pressure when the economy weakens.

• ICTThe ongoing automation of operational and administrative processes has made the companies very reliant on properly functioning ICT systems. They cover risks as much as possible by means of backup systems and the adopted policy of centralising management and maintenance of hardware. This serves to increase reliance on broadband connections.

• SafetyandtheenvironmentThe companies have appointed prevention officers as part of their health & safety efforts, with the aim of preventing unsafe working situations. Risk analyses have been carried out

for this purpose and toolbox meetings are organised in a structured way in the installation sector.

c) Financial risksWithin the Batenburg Group, the operating companies report uniformly to the holding company in accordance with a prescribed monthly and quarterly schedule. The Supervisory Board and the Executive Board meet at least four times each year to discuss financial developments and the prospects of the individual companies and of the Batenburg Group as a whole.All operating companies apply the prescribed valuation principles and reporting rules. The consolidated financial statements are prepared according to IFRS, while the company financial statements are prepared on the basis of local accounting rules. Each year the managements of the operating companies sign a letter of representation confirming the accuracy and completeness of their company’s individual financial statements.

Pension risks attached to schemes operated by the Batenburg Group are small. The pension schemes are average wage schemes and defined contribution schemes. We have embedded pension risks mainly with industry pension funds and approved pension insurers who offer schemes in line with industry norms. Average wage schemes carry little risk for Batenburg Beheer for non-recurring additional remittances in the event of an insufficient cover ratio.

Elektrotechnisch Bureau J.H. Sparreboom B.V.

Technical management and inspections of the electrical installations

at six buildings in the Randstad region commissioned by David Hart

Vastgoed Groep.

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However, the employer’s contributions can fluctuate from year to year.

Batenburg Beheer has a healthy financial structure that provides sufficient scope for the required guarantee and credit facilities. When taking on projects, we regularly issue letters of intent and bank guarantees. Our solid financial position is also important in terms of maintaining and acquiring new commercial agencies.

The exchange rate of the euro against the US dollar and British pound is particularly important to our importing trading companies. Exchange-rate risks on foreign currency transactions are hedged as and when necessary. However, structural exchange rate swings of the currencies of non-euro countries can affect our margins. This applies particularly if, in order to maintain our competitive position in relation to suppliers from euro countries, we are unable to pass on the exchange rate effect in our selling prices. A limited exchange-rate risk is attached to our subsidiaries outside the euro zone, in the United Kingdom and United States. The Batenburg Group actively manages its working capital, principally with a view to financing work in hand and limiting the credit risk on accounts receivable and the risk of obsolescence of stocks. We have a fixed procedure for approving investment proposals made by operating companies.

risk statementRisk management at Batenburg Beheer is essentially viewed as a tool for better business management, rather than an end in itself. In an era of increasing complexity and transparency, companies have to contend with more uncertainties. Insofar as risks are manageable, they can decide to take (controlled) risks, transfer risks, or preclude them completely. However, a risk management policy designed to remain “in control” must not result in an approach geared solely towards minimising risks. Each situation must be assessed on its individual risk/return merits. If, for example, a company chooses to reduce IT risks by means of professional, central management of IT systems, this choice must not impinge on the availability of those systems. In each company’s portfolio, risks can be evened out to produce an acceptable risk for the group as a whole. Our task is to ensure that the Batenburg Group continues to do business in a responsible, controlled way. With that in mind, risk management is used in a positive way to

improve risk control, and help Batenburg Beheer N.V. take calculated and responsible risks.

The Executive Board is responsible for the establishment and effectiveness of the internal risk management and control systems, which are designed to identify and effectively manage the significant risks to which the company is exposed. It is true of this approach, both now and in future, that no system of risk management and internal control can offer absolute certainty that these objectives will be achieved, and that failure to honour arrangements made and follow prescribed procedures, unexpected events, incorrect assessments and significant errors, cases of fraud or acts that are contrary to the laws and regulations can never be entirely prevented. The findings of BERM in 2006 give credence to our view that there is scope to improve certain aspects of our approach to, and management of, risk. Bearing in mind the above comments, we believe, to the best of our knowledge, that the Batenburg Group’s internal risk management and control systems functioned properly in 2006 and that we can be reasonably certain that our financial reporting does not contain any material inaccuracies.

Financial

turnover and resultTurnover rose by almost 9%, from € 130.9 million to € 142.3 million, in 2006. 94% of our turnover was realised in the Netherlands (€ 133.6 million) and 6% outside the Netherlands (€ 8.7 million), the lion’s share of that within the European Union. The turnover of the Installation Group increased by 10%, from € 92.7 million to € 102.1 million. 5% of the increase was organic. As a result of acquiring larger projects and acting as a turnkey supplier for technical installations, the volume of outsourced work increased by 16% in 2006, to € 15.1 million. The turnover of the Trading Group rose by 5%, from € 38.3 million to € 40.2 million. Adjusted for the telecom activities sold off in 2005, the trading companies recorded organic growth in turnover of 7%.

At € 5.8 million, operating income for 2006 was down 3% compared with 2005. This can be ascribed to the pressure on margins at the installation companies in the first half of 2006. Other operating costs decreased relative to the increase in turnover, although the rise in the number of employees caused personnel costs to

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climb in absolute terms. Investments in business premises and ERP systems resulted in higher depreciation. No exceptional impairments of intangible or tangible fixed assets were necessary in 2006. At € 0.2 million, interest income was on a par with the previous year. Effective taxation decreased to around 18%, due in part to a fall in the rate of corporation tax and a release from the provisions. Net profit rose 2% in 2006, from € 4.8 to € 4.9 million.

dividendBatenburg wants to underline its confidence in the future by proposing an increase in the dividend on ordinary shares, from € 1.80 to € 1.90. This will raise the pay-out to 47% of net profit and the dividend yield will be almost 4% based on the year-end quotation in 2006. The proposal is in line with Batenburg Beheer’s dividend policy, which provides for a pay-out percentage of at least 40%. In accordance with Article 33 of the Articles of Association, 5%, or € 0.12 per share, is also being paid out on the priority shares. With a dividend of € 1.90, an amount of € 2,287,841 is available for distribution to shareholders. The remaining sum of € 2,629,560 will be allocated to the other reserves. The solvency rate will then be 54.6%, which is

fractionally lower than at year-end 2005 (57.3%). The proposed divided has been included in shareholders’ equity as part of the unappropriated profit, pending approval of the proposal by the forthcoming General Meeting of Shareholders on 25 April. Provided the General Meeting of Shareholders approves the financial statements and the dividend proposal, the dividend of € 1.90 per share will be payable on 10 May 2007.

financing and investmentsWe invested € 3.7 million and disinvested € 0.3 million in non current assets in 2006. In addition, non current assets worth € 0.2 million were acquired as a result of the acquisitions made. Besides the usual replacement investments, investments of a more incidental nature relate to the takeovers of IJsselmuiden and Bosma Installaties, the completion and fitting out of Beenen’s new business premises in Heerenveen, the start of work to extend the premises of Van Dalen Installatietechniek in Twello and the start of a joint automation project at Seher, Bevar and HPR Techniek.Batenburg Beheer N.V. acquired the shares of IJsselmuiden & Zonen and IJsselmuiden Installatietechniek Sassenheim in Sassenheim with effect from 6 April 2006. In addition, at

IJsselmuiden & Zonen B.V.

Electrical installations at Zeehospitium Katwijk.

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year-end 2006 Van Dalen Loodgieter en Centrale Verwarming B.V. acquired the activities of Bosma Installaties B.V. in Deventer by means of an assets transaction. In the course of 2006, Batenburg Beheer reissued 4,366 temporarily purchased shares in connection with the expiry of the 2001-2006 option series.Cash flow rose from € 6.3 million to € 6.6 million. Net depreciation of tangible fixed assets totalled € 1.6 million, which is more than in 2005. We actively controlled working capital, paying considerable attention to the financing of work in hand, the collection period for accounts receivable and the size of stocks.

Shareholders’ equity grew from € 35.9 to € 38.8 million in 2006, while the balance sheet total increased from € 62.7 million to € 71.0 million. Net working capital fell by 2%, from € 23.9 million to € 23.5 million, due chiefly to a rise in short-term liabilities. Average capital invested went up from€ 39.1 million to € 42.0 million in 2006, while the return on average capital invested dropped from 12.8% to 12.1%.

Investments in new ERP software are expected in 2007, in both the Installation and Trading Group. After thorough preparation, the roll-out of new office automation at HPR Techniek got underway at the start of 2007. The sister companies Seher Nederland and Bevar will switch to the same package later this year. In the Installation Group, Koldijk has also begun rolling out a new ERP package. Later in the year, a number of other installation companies will embark upon replacing their existing office automation.As regards premises, we will be investing further in extending the existing business premises of Van Dalen Installatietechniek in Twello during the first half of 2007. In addition, De Bosman Bedrijven will be moving from their various business premises in Soest to a single, rented base in Amersfoort during the first six months of this year. In Zwolle, Koldijk will be fitting out and renting extra business space.

Organisation, personnel and society

Batenburg Beheer recognises that the company has a role to play in society, helping to create a sustainable future. This means striking a harmonious balance between the interests of stakeholders and the environment in which we live and work. To achieve this, our business activities must be geared towards long-term value creation, having due regard for people, profit and planet.The total workforce of Batenburg Beheer increased in 2006 from 943 to 1,025 at year-end. In the installation sector, the number of employees rose 10%, to 906, due in part to the acquisition of installation company IJsselmuiden. At the trading companies, there was nothing of note to report on the acquisition front last year. Consequently, the number of

Technische Handelsonderneming Bevar B.V.

Bevar supplies special inserts for Dremefa’s consumer products.

The table below summarises our cash flows: x € 1.000 2006 2005 2004 2003 2002

Cash flow from operating activities 8,221 3,867 3,513 5,734 6,021

Cash flow from investing activities*) -/- 5,550 -/- 3,120 -/- 630 -/- 1,518 -/- 11,128

Cash flow from financing activities -/- 2,063 -/- 1,616 -/- 1,532 -/- 1,597 -/- 2,151

Change in cash and cash equivalents 608 -/- 869 1,351 2,619 -/- 7,258

Cash and cash equivalents at year-end 12,452 11,844 12,713 11,362 8,743

*) including cash in companies acquired

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employees remained relatively stable at 119 (2005: 118).

The installation companies and trading companies in the Batenburg Group operate largely independently and have far-reaching responsibility for their own results. Our decentralised approach fosters entrepreneurship and enables the companies to operate in a customer-focused and highly responsive way. We also firmly believe that this has a positive effect

on the commitment of our employees. Operating companies often give expression to their local ties by sponsoring local clubs and events in which their employees are frequently involved. There is a variable component to the remuneration of management and employees. The amount of this variable component usually depends on the results of the operating company concerned, and is thus linked directly to the effort and performance of the personnel. Central cash management helps encourage the good management of working capital at the companies.

The Group Council is a platform for discussion with the managements of the operating companies about developments affecting our companies. The Group Council holds two formal meetings each year and one strategic session lasting several days. Relevant and current themes are also discussed with the management of the holding company and the CPI (Central Personnel Information). The CPI is made up of members of the works councils and staff representatives from the companies. Some of the companies have works councils, while consultations at the other companies take place in accordance with the guidelines for companies with up to 50 employees.

A customer-focused strategy only works if the companies have well-trained and motivated employees. Various training opportunities are used in order to keep specialist knowledge up to date, including the courses offered by the industry organisation Uneto-VNI. In-company management development training was organised in 2006 for the staff and management of the companies, covering the subjects of leadership, project management and relationship management and acquisition. This increases ready knowledge and fosters contacts between the companies.

The ageing population of the Netherlands is a cause for concern, as is the lack of “new blood” at the bottom of the sector due to a sharp decline in the number of young people pursuing studies in electrical and mechanical engineering. This affects the installation and trading

31-12-2006 31-12-2005 Change

Installation 906 825 10 %

Trading 119 118 1 %

Total 1,025 943 9 %

HPR Techniek B.V.

Spiering Kranen in Oss uses crane seats and joysticks supplied by

HPR.

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companies alike. Contacts with schools have been further intensified, but at the present time, demand still outweighs supply. This problem is increasingly assuming a social dimension. In the cities of Western Holland in particular (the Randstad region), too many young people are dropping out of lower secondary technical education. There are various reasons for this, including the way in which schooling is organised and the sector’s failure to appeal to young people. Market-driven initiatives, such as the “Deltaplan Steel, Electronics and Installation in the Rhine Delta Region” recently launched by companies and schools, are recognising this worrying situation and taking various approaches to finding a solution.

For our organisation, it is important that we continue our efforts to secure the loyalty of well-trained and motivated employees with technical and commercial knowledge. Furthermore, at times of fluctuating capacity utilisation, it is important that we possess sufficient flexibility to allow staffing to move in step with the volume of work. The option of obtaining employees from and loaning them out to other companies, while also taking a critical view of which activities we should undertake ourselves and which should be handled by third parties, is also very important. Average annual turnover per employee rose from € 136,300 to € 144,600, influenced in part by the rise in the volume of outsourced work. Average total personnel costs per employee (wages, social security and pensions) climbed 3%, from € 41,700 to € 43,000. The current collective labour agreement for the Metal and Electrotechnical Industry was concluded in a period of wage restraint in the Netherlands, and runs until the start of 2008. With effect from January 2007, a wage adjustment of 1.25% was made under this agreement. However, as the economy has picked up, the labour shortage has been keenly felt in our sectors for some time. It will not, therefore, be easy to achieve wage restraint over the coming period. We devote considerable attention to ensuring safe and healthy working conditions, by adopting a systematic approach to quality, health & safety and environmental matters. Prevention officers oversee day-to-day operations at the companies and play an active role in improving working conditions and preventing unsafe working practices. Toolbox meetings at the installation companies and risk analyses and evaluations are part of our strategy

of regular evaluation and instruction of employees on the matter of safety at work. Moreover, employees are deemed to take personal responsibility for preventing unsafe situations. The rate of sick leave increased in 2006, from 4.1% to 4.4%. Interestingly, the rise was particularly pronounced at the trading companies, which traditionally have a low rate of sick leave. The companies keep in step with the views and norms prevailing in society with regard to the environment. Waste streams are disposed of in accordance with the normal procedures. Timely steps were taken to comply with the RoHS Directive, which became effective in the EU in 2006 and prohibits the supply of products containing and lead and tin in certain fields of application.

Many of our companies have a quality assurance and safety system certified according to the latest ISO, VCA, SCIOS and KOMO-Instal standards. The integrity of our employees’ actions in a social context is regulated by a code of conduct and supported by rules for whistleblowers. A regularly recurring dilemma in installation technology, and one which has a bearing on sustainability, is that decisions in public tenders are based solely on the lowest price. Consequently, there is insufficient scope to take account of innovative, alternative solutions which result, for instance, in more economical energy consumption and, by extension, lower

B.V. Technische Handelsonderneming M. Seher & Co.

Seher supplies inserts for the Ego lifestyle computer.

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costs and more sustainable use throughout a project’s life. Of course, we champion the cause of “lifelong thinking” and believe this better serves the quality, sustainability and efficiency which, from a social perspective, can be expected of a project delivered by a good installer.

2006 was not an easy year for our employees. Despite some idle capacity at a few installation companies in the first half of the year, motivation remained high. The pressure of work was intense in the second half of 2006. Growth in turnover was achieved in our trading activities, with almost the same number of employees. In this area too, employees had to work under a lot of pressure at times, demonstrating great dedication. We would like to thank all our employees for their efforts and trust that we can continue to rely on their dedication and commitment over the coming year to help us achieve a good result, together.

Developments at operating companies in 2006

Installation Group

Installatiebedrijf en Ingenieursbureau KoldijkKoldijk recovered well from a difficult period in 2005 and early 2006. Its return improved greatly in 2006, even though turnover was only fractionally higher. The transformation of the organisation was a success. The main spearheads are: more entrepreneurship in the organisation, better project management, paying greater heed to commercial opportunities, and improving internal communication. Responsiveness was enhanced by dividing the organisation into a number of market-oriented business units. A business opportunity test was conducted for each unit, to make the business units more market-driven and define value added for each unit. The Nijverdal premises were vacated as of 1 January 2007 and a new branch was opened in Hengelo. The volume of work in hand at the start of 2007 was much greater than the previous year. At the start of 2007, Koldijk began rolling out a new ERP system.

Beenen With much higher turnover, Beenen achieved a satisfactory result in 2006. The increase in turnover was due mainly to the completion of turnkey projects. In mid-2006, Beenen moved to new premises at a high-visibility location in Heerenveen. The move incurred non-recurring costs. In its new, modern location, Beenen is

even better equipped to distinguish itself as a high-quality turnkey supplier of industrial projects. To underline the wider scope of its activities, its name has changed from “Beenen Electrotechniek” to “Beenen”. Its clients include water companies and manufacturers in the food and non-food industry, the metal and electrotechnical industry and chemicals. Over the coming year, it will endeavour to also increase turnover at the Emmen branch, and achieve further growth in the area of mechanical engineering and the higher automation segment MES (Manufacturing Execution Systems).

Hoogendoorn GroepAlthough the turnover of Hoogendoorn increased marginally in 2006, its result fell short of the previous year. The turnover of the Horticulture business unit developed positively in the Benelux countries, but demand abroad was significantly weaker than in 2005. Interestingly, the higher energy prices are prompting horticultural businesses in the Benelux countries to invest in energy-saving systems, whereas outside the Benelux region, they have severely curtailed investment propensity. The turnover of the Industry business unit also increased as a result of strong sales efforts and good capacity utilisation during the year. That said, the costs incurred on a handful of innovative projects were higher than expected. The Data@Vision business unit posted further growth in turnover in the area of vision products in 2006. As industrial cameras are increasingly becoming commodity products and price competition is intensifying, the introduction of specific solutions for a few, very promising market sectors will be a focus in 2007.

Schekman Elektrotechniek After a difficult first half, Schekman showed striong recovery in the last few months of 2006. In the second half of the year, capacity utilisation was high. In the end, turnover for the whole year was marginally lower than in 2005. Gaps in capacity utilisation forced Schekman to submit low-priced offers for tenders in the first few months of the year. Thanks to the projects it acquired as a result, output was high in the remainder of the year and, through the hard work and dedication of employees, the year finally ended with a positive return. The volume of work in hand at the start of 2007 is much healthier than last year, which means the outlook for capacity utilisation is good. Interestingly, as demand for technical installations has increased in the region of the “Arnhem-Nijmegen Junction”,

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prices for tenders have remained poor and the participants are evidently still submitting offers below cost price on a regular basis.

De Bosman BedrijvenThe results of De Bosman Bedrijven came in short of expectations in 2006. Return was squeezed by deferred projects, insufficient capacity utilisation in electrical engineering and higher costs. Good progress was made with the expansion of technical management and increasing the share of short-term projects in order to reduce dependence on big projects.At year-end 2006, the companies Frans Bosman Electra, Bosman Klimaat & Sanitair and TMK Nederland were absorbed by De Bosman Bedrijven, by means of a legal merger. The merger decision was prompted partly by the growing complexity of executing multidisciplinary projects and the desire to simplify administrative structures. The various parts of De Bosman Bedrijven, which are based at separate locations in Soest, will be moving to shared premises in Amersfoort during the first six months of 2007.

Van Dalen Installatietechniek2006 was characterised by substantial growth in turnover, which places the organisation under considerable strain. The result fell a little way short of 2005, due in particular to a small number of projects acquired at very low prices in previous years. Van Dalen was compelled to subcontract work in 2006, in order to accommodate the large order intake. Outsourcing helps companies to manage peaks and troughs in demand, but even managing this kind of work requires a considerable amount of work, and specific knowledge. The Nijkerk branch has grown and now has its own mechanical department which means it can offer total installations to its customers. Because of its central location, this branch is able to undertake work which, because of the problems with traffic

jams in the area, can no longer be efficiently handled from Twello. At year-end 2006, Van Dalen acquired a new branch in Deventer when it took over the activities of Bosma Installaties.

SparreboomIn spite of the fact that turnover was down on 2005, Sparreboom’s result increased. Many small-scale projects and a large number of maintenance activities were undertaken. However, higher travel expenses incurred in connection with service assignments must be resolved. Sparreboom deliberately avoided taking on larger projects in 2006, because of the poor level of prices, but it did acquire some new clients and its first mechanical orders. As was the case in 2005, there was less investment in the retail segment than in previous years. Sparreboom therefore embarked upon activities in the field of management and inspection, which will be further expanded over the next few years. The company intends to acquire and execute multidisciplinary projects, working with permanent partners.

IJsselmuidenIn April 2006, Batenburg Beheer N.V. acquired the shares of IJsselmuiden Installatietechniek Sassenheim B.V. and IJsselmuiden & Zonen B.V. The organisation has been adjusted in response to the retirement of one of its former directors. Although turnover rose slightly in 2006, this did not cause the result to improve compared with 2005. This was due to the closure of a number of unprofitable plants and the postponement of a few large non-residential projects. Consequently, employees were loaned out, and this had the effect of substantially reducing materials turnover. Relationship and project management will receive a lot of attention over the coming period.

Trading Group

Seher companies The turnover and result of Seher Nederland came out higher than in 2005. The gross margin was reasonably constant, whilst operating costs were below budget. Turnover from energy generation and distribution products in the Energy Technology and Energy Products rose, due in part to the introduction of new products. Turnover from rail infrastructure products declined, partly as a consequence of major projects such as the Betuwe freight line and the HSL high-speed rail link coming to an end. In the Energy Projects department, the imminent Unbundling Act dented sales in the area of applications for the high-voltage network. The

Beenen B.V.

The technical installations in the new office of Beenen in

Heerenveen were installed by Koldijk and De Bosman Bedrijven.

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expectation is that demand will pick up in 2007, now that it has been decided that all networks above 110kV will be transferred to TenneT. The Fastening Technology and Electronics departments benefited from the clear upswing in demand from industry. The introduction of press-fit systems and supply of transformer stations at the port of Rotterdam also contributed to the growth in turnover. Finally, the Electrical Engineering department also realised higher turnover, due inter alia to the strong rise in the buying price. Two new suppliers of laminations cores were also acquired. In 2007, Seher will be implementing a new ERP package purchased jointly with its sister companies HPR Techniek and Bevar.

The turnover of Seher België increased significantly in 2006, and its result was also better than in 2005. The newfound momentum of the industrial activities is also translating into growth in turnover in Belgium. Turnover in fastening materials rose significantly compared with the previous year. Since a major brand supplier decided to abandon all of its European activities in 2005, all of its products have been replaced by products from new suppliers in Europe and Asia. The purchasing and stock policy is strategically important in order to avoid “stock-outs”. Turnover from thermal management products rose sharply, due in particular to the increased turnover of industrial ventilators. Again, the purchasing policy is important, because of the sustained pressure on prices.

BevarTurnover at Bevar was marginally higher, and the result developed positively. Both existing and new customers provided increased turnover. The most significant growth in turnover was realised in the product groups “self-tapping screws” and “specials”. A great deal of attention was paid to inventory management and realising savings in the area of purchasing. This is important in order to maintain return in a fiercely competitive market. Moreover, prominent concern for quality assurance enhances Bevar’s value added, through such means as a full goods-inward inspection of all products. As of 2007, Bevar is certified to ISO 9001-2000 standard, with special mention of its compliance with the APQP/PPAP methodologies in accordance with the requirements of the automotive industry. A good order position at year-end 2006 got business off to a good start in 2007. A new ERP package will also soon be implemented.

HPR TechniekTurnover was slightly higher, and the result increased to a satisfactory level, due in part to stringent control of operating costs. In order to better tailor its products and services to the needs of its customers, activities are now handled by the groups Resistors and Controllers, Casings and Electronic Components, Measuring and Process Technology and Safety Technology. The company also subjected its suppliers’ offerings to close scrutiny, in order to improve sales efficiency. In mid-2006, a branch was opened in Zaventem, with a view to increasing sales of components in Belgium. Various aspects of HPR Techniek’s organisation and offering are being investigated for reinforcement and expansion opportunities, respectively.

Prospects

The installation market regained some momentum in 2006, while the labour shortage became more acute. Paradoxically enough, in the non-residential building sector in particular, this has not translated into a recovery in prices which appears to be at odds with these developments. Installation companies still seem willing to bid for tenders at below cost price. The fact that installers are contending with higher travel expenses and growing problems with traffic jams also does nothing to improve the return. Conditions improved on the market for industrial automation and machine control projects in 2006. Demand remains strong, but even so, prices are still very low. As the market recovers, the labour shortage and the intake of young, qualified employees in the sector will be one of the most prominent concerns of the next few years. The number of sole traders will increase further. However, the installation companies are used to dealing with fluctuating staffing and using personnel on loan.A few of the installation companies in the Installation Group have had to contend with project postponements, compelling them to submit very low-priced bids for projects with a short lead time in order to fill the gaps in capacity utilisation. The loaning out of staff in the first half of the year made it difficult to cover costs. At the start of 2007, our planning is in better shape and the amount of work in hand has increased. Good project management, management of (complex) turnkey projects and sufficient capacity utilisation will be our main areas of concern over the coming year.

As confidence in the industry grows, and with demand from the energy market stable, the

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turnover of the Trading Group continued to develop well. This trend was still evident at the start of 2007. In industry, the ability to deliver to customers will become a key issue over the coming period. Concentrations in the energy market can alter market relationships. Internally, lowering the average age of our workforce is a major concern. Technical and sales vacancies seem to be difficult to fill, and we need a bigger intake of young people. There is a danger that highly-motivated and experienced, older employees will not be able to transfer their knowledge to a sufficient number of people.

We expect the operating result of the Installation Group to continue to recover in 2007. As long as prices remain very low, this must especially be achieved through high output, coupled with good project management. The trading companies are achieving a good return. In 2007, costs will increase somewhat as a consequence of the various ERP implementations that are planned. As there are no signs at present that demand on the market is flattening, the prospects are good, by and large. Besides organic growth, we will energetically seek out opportunities to improve our market position and further increase earnings per share in 2007, through selective acquisitions.

It is still too early to make any reliable pronouncement about the expected development of results in the coming year. We are confident about the development of the Batenburg Group and will make a concrete prediction regarding profits when our half-year report is published.

Rotterdam, 29 March 2007

Executive BoardBatenburg Beheer N.V.

FINANCIAL STATEMENTS

2006

BatenburgBeheer NV

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Consolidated BalanCe sheet(before profit allocation) in € 1,000

ASSETS 31 December 2006 31 December 2005

NON-CURRENT ASSETS

Property, plant and equipment 1. 12,228 10,324

Intangible assets 2. 5,708 4,378

Financial fixed assets 3. 469 397

18,405 15,099

CURRENT ASSETS Inventories 4. 7,031 6,606

Accounts receivable 27,567 23,879

Due from customers 5. 4,281 4,388

Other receivables 1,216 881

Cash and cash equivalents 6. 12,452 11,844

52,547 47,598

Total assets 70,952 62,697

LIABILITIES 31 December 2006 31 December 2005

EQUITY 38,753 35,899

NON-CURRENT LIABILITIES

Employee benefits 7. 656 698

Deferred tax liabilities 8. 2,534 2,482

3,190 3,180

CURRENT LIABILITIES

Provisions 9. 1,171 1,171

Due to customers 10. 7,303 4,453

Accounts payable 9,597 8,839

Tax liabilities 3,934 2,351

Other liabilities 7,004 6,804

29,009 23,618

Total liabilities 70,952 62,697

Notes

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Consolidated inCome statementin € 1,000

2006 2005

Net turnover 11. 142,304 130,937

Raw materials and trade goods 12. 61,583 55,837

Work by third parties 15,080 12,959

Salaries 13. 35,222 33,063

Social security and pension costs 13. 7,134 6,962

Depreciation 14. 1,581 1,454

Other operating expenses 15,864 14,706

Total operating expenses 136,464 124,981

Result from associates and joint ventures -/- 26 12

Operating income 5,814 5,968

Financial income 225 224

Financial expenses 12 7

213 217

Income before tax 6,027 6,185

Income taxes 15. 1,110 1,367

Net income 4,917 4,818

Earnings per share (in euro)* 4.08 4.00

Notes

* Earnings per share have been calculated without taking in account the temporary bought in shares at the end of 2005 to cover obligations from option plans. At the end of 2006 all shares bought in are reissued and earnings per share equal diluted earnings per share.

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Consolidated Cash floW statementin € 1,000

2006 2005

Cash flow from operating activities

Operating income 5,814 5,968

Adjustments for:

• depreciation 1,639 1,472

• income tax paid -/- 1,416 -/- 2,115

• interest received and paid 256 197

• result from associates and joint ventures 26 -/- 12

6,319 5,510

Changes in:

• inventories -/- 425 180

• receivables -/- 1,645 -/- 414

• non-current liabilities -/- 143 -/- 249

• current liabilities 4,115 -/- 1,160

1,902 -/- 1,643

8,221 3,867

Cash flow from investing activities

Acquisition of subsidiaries -/- 2,295 –

Investment in property, plant and equipment -/- 3,804 -/- 3,185

Divestments in property, plant and equipment 261 92

Investments in associates and joint ventures -/- 98 -/- 27

-/- 5,936 -/- 3,120

Cash flow from financing activities

Dividends paid -/- 2,160 -/- 1,903

Reissue of own shares 185 409

Other financing activities -/- 88 -/- 122

-/- 2,063 -/- 1,616

Net change in cash and cash equivalents 222 -/- 869

Cash and cash equivalents at 1 January 11,844 12,713

Cash in acquired subsidiaries 386 –

Net change in cash and cash equivalents 222 -/- 869

Cash and cash equivalents at 31 December 12,452 11,844

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Movement of equity:

Unappro-

Share Translation Other priated

capital reserve reserves result Total

Balance at 1 January 2005 963 4 27,572 4,157 32,696

Retained earnings 2004 – – 2,100 -/- 2,100 –

Dividends paid – – – -/- 1,903 -/- 1,903

IFRS adaption – – 154 -/- 154 –

Total recognised income – 1 – 4,818 4,819

Reissue of own shares – – 409 – 409

Stock options exercised – – -/- 122 – -/- 122

Balance at 31 December 2005 /

1 January 2006 963 5 30,113 4,818 35,899

Retained earnings 2005 – – 2,658 -/- 2,658 –

Dividends paid – – – -/- 2,160 -/- 2,160

Total recognised income – 9 – 4.917 4,926

Reissue of own shares – – 185 – 185

Stock options exercised – – -/- 97 – -/- 97

Balance at 31 December 2006 963 14 32,859 4,917 38,753

equityAt 31 December 2006 the authorised share capital amounts to € 3,840,192, including 2,400,000 ordinary shares with a nominal value of € 0.80, 800,000 preference shares with a nominal value of € 2.40 and 80 priority shares with an nominal value of € 2.40. Issued and fully paid up are 1,204,122 ordinary shares and 80 priority shares. In November 2006 4,366 shares were reissued as a result of exercised stock options. Preference shares can be issued not fully paid in. The articles of association of Batenburg Beheer grant these shares a yield preference based on the refunding rate of the European Central Bank. The priority shares are owned by the foundation “Stichting J.C. Hoogerheide tot beheer van de prioriteits-aandelen van Batenburg Beheer N.V.”. A description of the rights of preference shares and priority shares will be presented in the paragraph Other information. unappropriated resultIt is proposed to shareholders to pay a dividend of € 2,287,841, which amounts to € 1.90 per ordinary share. stock option plansAt 31 December 2006 all remaining 5,820 options have been exercised (exercise price € 28.00). In 2006 Batenburg Beheer N.V. reissued all 4,366 remaining temporary bought in own shares.

Consolidated statement of ChanGes in eQuityin € 1,000

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finanCial reportinG prinCiples

General information

Batenburg Beheer N.V. has its statutory seat in Rotterdam, the Netherlands. For a description of the profile of the company will be referred to the paragraph General in this annual report. In the paragraph Miscellaneous an overview of the adresses of the company and all operations is included. At 29 March 2007 the annual report 2006 of Batenburg Beheer N.V. was approved for publication by Supervisory Board and Executive Board. The financial statements are subjected to adoption by the Annual General Meeting of Shareholders on 25 April 2007.

Accounting principles for financial reporting

The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards, as adopted by the European Union (EU-IFRS). Changes in IFRS which were adopted for the year 2006 have not resulted in changes in the accounting principles for financial reporting of the company.

The consolidated financial statements are presented in euro’s and rounded to the nearest thousand. The consolidated financial statements have been prepared under the historical cost convention.

Principles for consolidation

The consolidated financial statements include the accounts of Batenburg Beheer N.V. and all operations in which Batenburg Beheer has a controlling interest. Consolidation takes place for 100%. Intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no indication for impairment. The financial statements of acquired or sold subsidiaries are consolidated or deconsolidated as from the moment a controlling interest has been acquired or lost. Joint ventures without a controlling interest are not consolidated. In the paragraph Other information an overview of all consolidated operations is included.

foreign currenciesAssets and liabilities in foreign operations are converted in euro at the exchange rates at te end of the year. Revenues and expenses in foreign operations are converted into euro at the exchange rate prevailing on the date of transaction. Foreign exchange differences are recognised directly in the translation reserve.Transactions in foreign currencies are converted into euro at the exchange rate on the date of transaction. Assets and liabilities are converted in euro at the exchange rate at balance sheet date.

derivative financial instrumentsConcerning financial instruments IAS 39 is applied. Subsidiaries use currency swaps at a limited scale to hedge transactions risks of receivables and liabilities in especially US dollars and English pounds. The derivative instruments do not qualify as hedge accounting instruments. The gain or loss on remeasurement at fair value is recognised as a profit or loss in the income statement.

Balance sheet

property, plant and equipmentProperty, plant and equipment are stated at historical costs less accumulated depreciation based on the expected useful life of the asset. Each year the assets with a significant value are tested on impairment. Assets held for sale are no longer depreciated, unless they are impaired. These assets are stated at the lower of the carrying amount and the fair value less costs to sell. Within the group no financial lease contracts are concluded. Operating lease payments are recognised as an expense on a straight-line basis over the lease term. In the paragraph Commitments and contingent liabilities an overview is given of the operating lease obligations.

intangible assetsAll business combinations are accounted for by applying the purchase method. Goodwill is stated at the total cost of the acquisition minus the fair value of the net acquired assets, and if necessary after impairments. Goodwill acquired before 1 January 2004 is stated at the initial value less depreciation (based on an economic lifetime of 20 years) until 1 January 2004. Goodwill is allocated to cash-generating units and no longer amortised but tested on impairment at least once a year. Negative adjustments are recognised directly in the income statement.

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financial fixed assetsJoint ventures in which Batenburg Beheer has a significant influence on the financial and operational policy, but not a controlling vote, are stated at net equity value. Receivables from joint ventures are stated at costs less any provisions considered necessary.

inventoriesInventories (trade goods and raw materials) are stated at the lower of costs and net realisable value. Net realisable value is the estimated selling price in the course of normal business less the estimated costs of completion an selling expenses. There is a provision for obsolete goods and materials.

Work in progressWork in progress is stated at cost plus an allocation for profit and overhead costs attributable to the contract operations less a provision for foreseeable losses and less progress billing. Work in progress is separated in amounts due from customers and due to customers, depending on the state of progress billing related to the costs incurred on the project.

accounts receivableAccounts receivable are stated at costs less provisions considered necessary for doubtful debtors. Accounts receivable with a term longer than one year will be included under non-current assets.

Cash and cash equivalentsCash and cash equivalents comprise cash and bank balances and deposits that can be withdrawn on demand and are stated at face value.

equityNet income of the current year is added to equity as unappropriated result.Dividends will be presented as a liability in the period of declaration.

provisionsFor the accounting principles used for deferred tax we refer to the accounting principles of income taxes.Other provisions include obligations with a probable outflow of resources, which can be reliably estimated.

retirement benefit costsBatenburg Beheer has both defined contribution and defined benefit pension plans. The contributions concerning defined contribution plans are recognised as employee benefit expenses when they are due. Some defined benefit plans of subsidiaries in the Netherlands are part of multi-employer plans. These plans are treated as defined contribution plans, because it is not possible to provide reliable information on the individual liabilities and assets of the participants according to IAS 19. The pension plan of one of the subsidiaries is treated as a defined benefit plan. The liabilities are calculated based on the projected unit-credit method. Actuarial gains and losses are amortised over the expected remaining service time of the employees taking part in the plan, taking into account a corridor.

other assets and liabilitiesOther assets and liabilities are stated at face value.

Income Statement

net turnoverThis is the total revenue of rendered services and sale of goods to third parties, less discounts and taxes charged on turnover.

profit on construction contracts for third partiesWhere the results of construction contracts for third parties can be estimated reliable, turnover and costs are determined in proportion to the stage of completion of the project. If the outcome of projects cannot reliably be estimated (which is generally the case with complex fixed price contracts), the turnover is considered to be equal to the costs incurred. In the case of cost plus contracts, the percentage of completion method is applied. Project costs are charged to the income statement for the period in which these are incurred.

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If it may be assumed that the total contract costs will exceed the turnover, the expected loss is recognised directly to the income statement. If the outcome of projects cannot reliably be estimated, the turnover is considered to be equal to the costs incurred, to the extent costs incurred will be paid.

raw materials and trade goodsThese include the direct costs of goods and services sold. It also includes the movement in provisions for obsolete goods.

depreciationThe depreciation of assets is calculated taking into account the remaining useful economic life of the asset and the expected residual value of the asset. The annual percentages used for different asset categories are:

The expected useful lifetime of adaptations in existing buildings equals at maximum the remaining rental period.

income taxesIncome taxes are calculated on the results shown in the income statement based upon the conditions and tax rates in force.

Deferred tax liabilities arise form the difference in commercial and fiscal valuation of assets and liabilities. The provision is calculated based on the taxes in force.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the assets can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

earnings per shareThe earnings per share are calculated as the net profit payable to shareholders divided by the number of shares outstanding. Earnings per share at the end of 2005 have been calculated without taking into account the 4,366 temporary bought in shares to cover obligations form option plans. At the end of 2006 all shares bought in are reissued.

Cash flow statement

The cash flow statement is drawn up by the indirect method, in which the movements in cash are determined on the basis of operating income as presented in the consolidated income statement.

Segment information

As primary segment the activities of the Installation group, the Trading group and Other activities are presented. As secundary segment the geographical spread of activities is presented.

Related parties

There is a related party relationship, which includes Batenburg Beheer N.V., her subsidiaries, associates and joint ventures.

Management of cash, foreign exchanges rate differences, interest and credit risk

Batenburg Beheer has a central role in the Group with regard to cash flow optimisation and the financial position of the subsidiaries. The trading companies use short term derivative financial instruments to hedge currency risks arising from transactions in especially US dollars and English pounds. Foreign exchange differences arising from transactions are recognised in the income statement.

Buildings 2.5% - 10% per year

Machines and installations 10% - 20% per year

Other equipment 15% - 50% per year

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There are no long term finance contracts which implies that the sensitivity for interest rate changes is limited. Credit risks are managed, using information from external sources and credit insurance companies.

Estimates and judgements by the management

Primary sources of uncertainties in the annual accounts are related to assumptions used in impairment calculations, the assumptions and availability of information in the calculation of pension liabilities, the need and size of provisions for losses on work in progress and unsettled tax declarations.

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1. Property, plant and equipment Property Land Machines Other

under and and tangible

construction buildings Installations assets Total

Value at costs 459 10,858 216 7,573 19,106

Accumulated depreciation (–) – 4,210 150 6,043 10,403

Balance at 1 January 2005 459 6,648 66 1,530 8,703

Changes in 2005:

Investments 2,136 181 9 859 3,185

Divestments (–) – – 45 47 92

Depreciation (–) – 523 17 932 1,472

Total changes 2005: 2,136 -/- 342 -/- 53 -/- 120 1,621

Value at costs 2,595 11,006 78 7,431 21,110

Accumulated depreciation (–) – 4,700 65 6,021 10,786

Balance at 31 December 2005 /

1 January 2006 2,595 6,306 13 1,410 10,324

Changes in 2006:

Investments -/- 2,595 4,566 47 1,655 3,673

Business combinations – – 4 127 131

Divestments (–) – 219 – 42 261

Depreciation (–) – 625 13 1,001 1,639

Total changes 2006 -/- 2,595 3,722 38 739 1,904

Value at costs – 15,269 130 8,932 24,331

Accumulated depreciation (–) – 5,241 79 6,783 12,103

Balance at 31 December 2006 – 10,028 51 2,149 12,228

The actual value of land and buildings, based on recent appraisals, amounts to € 14.9 mln

(2004: € 10.9 mln).

2. Intangible assets 2006 2005

Goodwill

Value at costs 4,776 4,776

Accumulated amortisation (–) 398 398

Balance at 1 January 4,378 4,378

Business combinations 1,330 –

Value at costs 6,106 4,776

Accumulated amortisation (–) 398 398

Balance at 31 December 5,708 4,378

notes to the Consolidated BalanCe sheetin € 1,000

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The goodwill in the consolidated balance sheet per 31 December 2006 relates to acquisitions as of 2001.

It relates (until 2006) to the acquisitions of Van Dalen Installatietechniek B.V., Elektrotechnisch Bureau

J.H. Sparreboom B.V., Technische Handelsonderneming Bevar B.V. and Van Roij Lastechniek B.V. (the latter

with B.V. Technische Handelsonderneming M. Seher & Co. as cash generating unit). The other companies

mentioned are considered to be independent cash generating units.

New business combinations in 2006 concern IJsselmuiden & Zonen B.V., IJsselmuiden Installatietechniek

Sassenheim B.V., both seated in Sassenheim, and the acquisition of the assets of Bosma Installaties B.V. in

Deventer. The first mentioned two companies are together one cash generating unit. The acquisitions are

disclosed in the paragraph ‘Business combinations’.

The recoverable amount of the cash generating units is based on value in use. For the calculation

expected cash flows are used from the budgets and long term plans over a period of four years.

Concerning the period after four years no growth rate has been applied. Expected cash flows are

calculated at a tax rate of 25,5% and discounted at a Weighted Average Cost of Capital (WACC) of 8%.

At 31 December 2006 goodwill is not impaired.

3. Financial fixed assets 2006 2005

Balance at 1 January 2006 397 402

Changes:

Investments 98 –

Divestments (–) – 18

Revenues current year (loss) -/- 26 13

Total changes 72 -/- 5

Balance at 31 December 2006 469 397

Growlab Instruments V.O.F. is a 50% participation with Growlab B.V. in Waspik. LetsGrow.com V.O.F.

is a 50% participation (40% entitled to revenues) with PPO B.V. in Wageningen. Bouwcombinatie

drinkwaterstation Oldeholtpade V.O.F. is a 50% participation with BBF B.V. in Leeuwarden.

Key financial figures of the joint ventures:

2006 Assets Liabilities Turnover Income

Growlab Instruments V.O.F. 160 200 427 -/- 57

LetsGrow.com V.O.F. 172 978 210 5

Bouwcombinatie drinkwaterstation

Oldeholtpade V.O.F. 237 116 6,105 –

Total 569 1,294 6,742 -/- 52

2005 Assets Liabilities Turnover Income

Growlab Instruments V.O.F. 138 117 557 21

LetsGrow.com V.O.F. 103 914 121 5

Total 241 1,031 678 26

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4. Inventories 2006 2005

Trade goods 5,758 5,497

Raw materials 1,273 1,109

Total 7,031 6,606

5. Work in progress 2006 2005

Cumulative incurred costs and profit at the end of the year 38,937 32,647

Progress billing 41,959 32,712

Work in progress at 31 December -/- 3,022 -/- 65

Due to customers 7,303 4,453

Due from customers 4,281 4,388

6. Cash and cash equivalents 2006 2005

Total 12,452 11,844

This includes an amount of € 8.2 million (2005: € 1.6 million) short-term deposits.

7. Employee benefits 2006 2005

Defined contribution plans

Balance at 1 January 569 622

Change – -/- 53

Balance at 31 December 569 569

Other pension liabilities 87 129

Total 656 698

The obligations arising from a defined benefit plan were calculated based on the “projected unit-credit

method” and information available at the end of the year. Actuarial gains and losses are amortised over

the expected remaining service time of the employees taking part in the plan, taking into account a

corridor.

Assumptions used in the calculation of the liabilities are:

2006 2005

Discount rate 4.5% 4.0%

Expected return on plan assets 5.5% 5.5%

Future salary increase 3.0% 3.0%

Future pension increase 2.0% 2.0%

Pension age 65 65

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8. Deferred tax liabilities 2006 2005

Balance at 1 January 2,482 2,634

Changes due to differences in commercial and fiscal valuation 307 7

Changes due to tax rate alterations -/- 408 -/- 159

Changes due to business combinations 153 –

Balance at 31 December 2,534 2,482

Non-current assets 616 765

Work in progress 1,804 1,609

Liabilities 289 296

Receivables -/- 30 -/- 20

Pensions -/- 145 -/- 168

Total 2,534 2,482

9. Current provisons 2006 2005

Warranty provision 1,165 1,110

Pension provision 6 61

Total 1,171 1,171

Warranty provision 2006 2005

Balance at 1 January 1,110 1,008

Change in provisions 55 102

Balance at 31 December 1,165 1,110

The provision is based on warranty obligations arising from projects for third parties. The warranty term is

in general 1 year. The provision is based on historical warranty information.

10. Due to customers 2006 2005

Due to customers arises when costs incurred and profit of a project less

provisions for costs is less than progress billing, taking into account the stage

of completion of the construction contract. 7,303 4,453

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Commitments and contingent liabilities

Guaranties issued by bankers amount to € 4.5 million (2005: € 2.7 million). At 31 December 2006 no

currency swaps were used.

Some subsidiaries have granted guarantees for possible bank overdrafts. Batenburg Beheer has been

granted a corporate credit arrangement in which it is severally liable for the credit lines used by its

subsidiaries.

Some of the subsidiaries are severally liable for participating in joint ventures.

Operational lease obligations for cars and office equipment amount to € 2.1 million per year

(2005: € 1.9 million). € 1.6 million concerns obligations with a lease term between 1 and 5 years,

€ 0.5 million concerns obligations with a lease term shorter than 1 year.

Rental agreement obligations amount to € 1.1 million per year (2005: € 0.9 million).

€ 0.6 million concerns agreements with terms between 1 and 5 years. € 0.5 million concerns agreements

with terms longer than 5 years.

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notes to the Consolidated inCome statementin e 1,000

11. Net turnover 2006 2005

Net turnover from trade 40,190 38,268

Net turnover from installation services 102,114 92,669

Total 142,304 130,937

2006 2005

Net turnover in the Netherlands 133,597 123,446

Net turnover in other countries 8,707 7,491

Total 142,304 130,937

12. Cost of raw materials and trade goods 2006 2005

Raw materials 35,768 31,272

Trade goods 26,053 24,851

Change in provision for obsolete inventories -/- 238 -/- 286

Total 61,583 55,837

13. Salaries, social security and pension costs 2006 2005

Salaries 35,222 33,063

Social security 4,729 4,651

Pension costs 2,405 2,311

Total 42,356 40,025

The number of employees at the end of the year amounts to: 2006 2005

Installation 906 825

Trade 119 118

Total 1,025 943

The average number of employees in 2006 amounts to: 984 (2005: 961).

Renumeration of the statutory Executive board (P.C. van der Linden) 2006 2005

Salary 216 210

Variable payments 65 59

281 269

Pension costs -/- 7 40

Total renumeration 274 309

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No loans, advances or guarantees have been issued to the statutory Executive board. The statutory

Executive board holds no shares in Batenburg Beheer N.V.

Renumeration of the Supervisory board 2006 2005

W. van Voorden 23 23

J. Smit 18 18

G.N.G. Wirken 18 18

Total 59 59

No loans, advances or guarantees have been issued to the Supervisory board. The members of the

Supervisory board hold no shares in Batenburg Beheer N.V.

14. Depreciation 2006 2005

Property, plant and equipment 1,639 1,472

Profit on non-current assets sold -/- 58 -/- 18

Total 1,581 1,454

15. Income taxes 2006 2005

Income taxes payable 1,518 1,526

Deferred income tax (reduction in tax rate) -/- 408 -/- 159

Total 1,110 1,367

Effective tax rate

Local tax rate 29.6% 31.5%

Non-deductible costs 0.6% 2.7%

Non-taxable income 0.0% -/- 12.8%

Change in deferred tax rate -/- 6.8% -/- 2.6%

Impact other countries -/- 4.7% 0.0%

Tax-loss carry forwards -/- 0.3% 3.3%

Total 18.4% 22.1%

Related party transactions

Transactions between the company and its subsidiaries, which are related parties of the company, are

eliminated on consolidation and not disclosed seperately.

Transactions between subsidiaries and investments in associates and joint ventures take place at arms

length, but aren’t material for the Group.

A disclosure of the renumeration of Executive board and Supervisory board is shown in the notes to the

consolidated income statement. The members of the Executive board and Supervisory board don’t hold

interests in shares with voting rights in Batenburg Beheer N.V.

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Business combinations

In 2006 the following business combinations took place:

Consolida-

Company name Transaction Place ted from Segment

IJsselmuiden & Zonen B.V. shares Sassenheim April 2006 Installation

IJsselmuiden Installatietechniek Sassenheim B.V. shares Sassenheim April 2006 Installation

Bosma Installaties B.V. assets Deventer January 2007 Installation

At 6 April 2006 Batenburg Beheer N.V. acquired 100% of the shares of IJsselmuiden & Zonen B.V. and

IJsselmuiden Installatietechniek Sassenheim B.V. De average annual turnover amounts to approximately

€ 7 million.

The transaction has been accounted for by applying the purchase method. The purchase price was paid in

cash.

At 22 December 2006 subsidiary Van Dalen Loodgieter en Centrale Verwarming B.V. in Twello signed an

agreement to acquire the assets of Bosma Installaties B.V. in Deventer. From 8 January 2007 the activities

will be continued under the name Van Dalen Bosma Installatietechniek.

The purchase price was paid in cash.

The fair value of the combined assets and liabilities acquired is as follows:

Non-current assets 201

Current assets 2,523

Current liabilities -/- 1,582

Net acquired assets 1,142

Purchase price 2,295

Cash acquired -/- 386

Cash outflow on acquisition 1,909

Goodwill 1,330

The book value of the combined assets and liabilities acquired does not show material differences with

the fair value at acquisition date.

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seGment informationin e 1,000

Segment information 2006

Primary segment Installation Trading Others Total

Net turnover 102,114 40,190 – 142,304

Operating income 1,371 4,799 -/- 356 5,814

Assets 35,956 14,861 20,135 70,952

Liabilities 25,886 4,313 1,999 32,198

Investments in non-current assets 2,706 376 1,922 5,004

Depreciation 881 172 586 1,639

Secundary segment Netherlands Others Total

Net turnover 133,597 8,707 142,304

Assets 68,838 2,114 70,952

Investments in non-current assets 4,970 34 5,004

Segment information 2005

Primary segment Installation Trading Others Total

Net turnover 92,669 38,268 – 130,937

Operating income 2,990 3,385 -/- 407 5,968

Assets 31,938 13,407 17,352 62,697

Liabilities 21,067 3,972 1,759 26,798

Investments in non-current assets 850 102 2,233 3,185

Depreciation 837 224 411 1,472

Secundary segment Netherlands Others Total

Net turnover 123,446 7,491 130,937

Assets 60,491 2,206 62,697

Investments in non-current assets 3,120 65 3,185

Signatures to the financial statements

Rotterdam, 29 March 2007

Executive Board

Drs. P.C. van der Linden (chairman)

Drs. E.M. Bosma RV

Supervisory Board

Prof. dr. W. van Voorden (chairman)

Ir. J. Smit

G.N.G. Wirken RA

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other information

Consolidated companies(100% participations unless stated otherwise)

The Netherlands

Batenburg Facilitair B.V. Rotterdam

HPR Techniek B.V. (formerly B.V. Ingenieursbureau voor Electrotechniek Ir. I. Hartogs e.i.) Rotterdam

Installatiebedrijf en Ingenieursbureau Koldijk B.V. Zwolle

Koldijk Beheer B.V. Rotterdam

Koldijk Onroerend Goed B.V. Rotterdam

B.V. Technische Handelsonderneming M. Seher & Co. Capelle a/d IJssel

Beenen Electro Beheer B.V. Rotterdam

Beenen B.V. (formerly Beenen Electrotechniek B.V.) Heerenveen

Batenburg Industriële Projecten B.V. Rotterdam

Beheermaatschappij Hoogendoorn Groep B.V. Vlaardingen

Hoogendoorn Automatisering B.V. Vlaardingen

H. Hoogendoorn Automation B.V. Vlaardingen

Hoogendoorn Data at Vision B.V. Vlaardingen

Innocom (I.T.) B.V. Vlaardingen

Hoogendoorn Xpertise B.V. Vlaardingen

JB Systems B.V. Vlaardingen

Indal Tuinbouwautomatisering B.V. Vlaardingen

Schekman Elektrotechniek B.V. Nijmegen

Xolver B.V. Rotterdam

Albert van der Perk B.V. Rotterdam

Van Reijsen Elektronika B.V. Rotterdam

Klees Electronics B.V. Rotterdam

De Bosman Bedrijven B.V. Soest

Van Roij Lastechniek B.V. Capelle a/d IJssel

Van Dalen Installatietechniek B.V. (formerly Van Dalen Electrotechniek B.V.) Twello

Van Dalen Beheer B.V. (formerly Van Dalen Installatietechniek B.V.) Twello

Van Dalen Loodgieter en Centrale Verwarming B.V. Twello

J.H. Sparreboom Holding B.V. Ridderkerk

Electrotechnisch Bureau J.H. Sparreboom B.V. Ridderkerk

Vestar Holding B.V. Rotterdam

Bevar Beheer B.V. Rotterdam

Technische Handelsonderneming Bevar B.V. Veenendaal

IJsselmuiden & Zonen B.V. Sassenheim

IJsselmuiden Installatietechniek Sassenheim B.V. Sassenheim

Belgium

M. Seher & Co. N.V. Ternat

Muxum Data Communications N.V. Ternat

England

Hoogendoorn Automation UK Limited Barnham

France

Hoogendoorn Automatisation S.A.R.L. Avignon

Spain

Hoogendoorn Automatización S.L. Almeria

United States of America

Hoogendoorn Automation Inc. Longmont (Denver)

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Auditors’ report

To the General Meeting of Shareholders of Batenburg Beheer N.V.

report on the consolidated financial statementsWe have audited the accompanying consolidated financial statements 2006 which are part of the financial statements of Batenburg Beheer N.V., Rotterdam, which comprise the consolidated balance sheet, the consolidated income statement, the consolidated cash flow statement and the consolidated statement of changes in equity for the year then ended and a summary of significant accounting policies and other explanatory notes.

management’s responsibilityManagement of the company is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the report of the executive board in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

auditors’ responsibilityOur responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

opinionIn our opinion, the consolidated financial statements give a true and fair view of the financial position of Batenburg Beheer N.V. as at 31 December 2006, and of 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 Netherlands Civil Code.

report on other legal and regulatory requirementsPursuant to the legal requirement under 2:393 sub 5 part e of the Netherlands Civil Code, we report, to the extent of our competence, that the report of the executive board is consistent with the consolidated financial statements as required by 2:391 sub 4 of the Netherlands Civil Code.

Rotterdam, 29 March 2007

MAZARS PAARDEKOOPER HOFFMAN ACCOUNTANTS N.V.

P.J. Steman RA

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Priority shares’ controlling rights

The main special right attached to the priority shares is the right to submit a proposal for a share issue. There are no financial preferences attached to these shares.

The object of the foundation for the management of the priority shares (“Stichting J.C. Hoogerheide tot beheer van de prioriteitsaandelen van Batenburg Beheer N.V. te Rotterdam”) is: “To ensure the continuity and efficient management of the Company and other companies or legal entities associated with the Company, and also to ensure that the Company is managed properly and that there is continuity in the management of the Company”.It is anticipated that a share issue can be used as a measure in cases where the Board of the Foundation considers that the object of the Foundation is in jeopardy.

The Executive Board of Batenburg Beheer N.V. and Board of the “Stichting J.C. Hoogerheide tot beheer van de prioriteitsaandelen van Batenburg Beheer N.V. te Rotterdam” share the view that with respect to the exercising of voting rights on the priority shares, the Foundation has met the requirements laid down in Appendix X to the Listing and Issuing Rules of Euronext N.V., Amsterdam.

the Board of the foundation:P.C. van der Linden (Chairman)J. SmitW. van VoordenG.N.G. Wirken

Preference shares

The main special rights attached to the preference shares are the right to acquire ownership of preference shares in the Company and to exercise the rights attached to those preference shares, including the voting rights and preferential subscription rights and/or in exchange for the allocation of depositary receipts to acquire and administer the ownership and management of preference shares and to exercise the rights attached to those shares.

The object of the foundation for preference shares in Batenburg Beheer (“Stichting Preferente Aandelen Batenburg Beheer”) is to ensure the continuity of the Company and the maintenance of its identity, and the continuity and identity of those companies with which it forms a group. The measures to exercise preferential subscription rights and to acquire preference shares can be expected to be used in cases where the Board of the Foundation considers that the object of the Foundation is in jeopardy.

The Executive Board of Batenburg Beheer N.V. and the Board of the foundation for preference shares share the view that, with regard to the independence of the members of the Board of the Stichting Preferente Aandelen Batenburg Beheer, the requirements laid down in Appendix X to the Listing and Issuing Rules of Euronext N.V., Amsterdam have been met.

the Board of the foundation:W. van den Herik (Chairman) (officer B)W.M. Lammerts van Bueren (officer B)J. van der Linden (officer B)J.D. Snoek (officer B)W. van Voorden (officer A)

Profit allocation 2006 2005

proposal

Net income 4,917 4,818

Added to general reserve 2,629 2,658

Dividend 2,288 2,160

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IFRS Dutch GAAP

2006 2005 2004 2004 2003 2002

Number of employees at end of year 1,025 943 978 978 970 935

Break-down by age

up to 20 years 51 42 29 29 29 30

21-25 years 97 111 107 107 116 112

26-30 years 156 147 163 163 165 155

31-35 years 150 151 191 191 181 193

36-40 years 182 180 170 170 165 148

41-45 years 130 98 106 106 104 107

46-50 years 109 103 95 95 106 97

51-55 years 75 52 60 60 58 54

over 56 years 75 59 57 57 46 39

1,025 943 978 978 970 935

Sales per employee x € 1,000 145 136 134 129 140 135

Personnel costs per employee

x € 1,000 43 42 41 41 41 41

Personnel costs in % of turnover 30 31 31 32 30 30

Average sick leave in % 4.4 4.1 4.5 4.5 4.9 4.9

Break-down by number of years employed

0-5 years 428 380 499 499 485 478

6-10 years 243 216 164 164 159 143

11-15 years 96 101 103 103 114 116

16-20 years 112 97 99 99 90 72

21-25 years 35 41 24 24 44 52

26-30 years 52 45 44 44 40 37

31-35 years 32 38 28 28 24 22

36-40 years 21 19 13 13 10 13

over 41 years 6 6 4 4 4 2

1,025 943 978 978 970 935

misCellaneous

Workforce over the last five years

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Batenburg Installation Group

Electrical

installation,

service and

maintenance

Process

automation

and software

development

Telecommunication

networks

and security

systems

Construction

of

control

panels

Mechanical

and

hygienic

installations

Koldijk

Zwolle,Almere,Lelystad,

Kampen,Emmeloord, Hengelo

Beenen

Heerenveen,Emmen

Hoogendoorn Vlaardingen,Sint-Niklaas, WestSussex,Avignon,

Longmont

Schekman

Nijmegen,Wageningen

De Bosman Bedrijven

Amersfoort,Nieuwkuijk,Raalte

Van Dalen

Twello,Nijkerk,Deventer

Sparreboom

Ridderkerk

IJsselmuiden

Sassenheim

Each company is specialised in one or more of these fields.The knowledge we have acquired of processes and applications enables us to provide a thorough and independent advice, as well as the implementation and the maintenance.

Organisation structure

Batenburg Trading Group

Components

for energy

technology and

electronics

Components

for process

control

and cybernetics

Mechanical

components

Training and

consultancy

HPR

Rotterdam,Zaventem

Seher

Capellea/dIJssel

Seher

Ternat

Bevar

Veenendaal

Each company is specialised in one or more of these fields. Knowledge of applications enables our specialists to provide the most suitable solution. We design, implement and maintain the solutions we provide. Delivery times are kept short through efficient stock keeping and in-house assembly. We transmit our knowledge by means of consultancy and training.

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List of operating companies

Installation Group

KoldijkManagement:B.Roseboom

installatiebedrijf en ingenieursbureau Koldijk B.v.Schokkerweg 17P.O. Box 460 8000 AL ZwollePhone +31 38 - 421 32 20Fax +31 38 - 421 24 94

Branch-office KampenGildestraat 20A8263 AH KampenPhone +31 38 - 331 47 50Fax +31 38 - 332 65 16

Branch-office lelystadSchroefstraat 308223 ED LelystadPhone +31 320 - 22 13 40Fax +31 320 - 22 89 22

Branch-office almereManuscriptstraat 1P.O.Box 601241320 AC AlmerePhone +31 36 - 530 00 60Fax +31 36 - 534 46 00

Branch-office emmeloordEcu 418305 BA EmmeloordPhone +31 527 - 20 35 29Fax +31 527 - 20 38 41

Branch-office hengeloAquamarijnstraat 1257554 NP HengeloPhone +31 74 - 259 63 11Fax +31 74 - 259 09 52

www.koldijkbv.nl

BeenenManagement:F.Popma

Beenen B.v.Mercurius 22P.O. Box 414 8440 AK HeerenveenPhone +31 513 - 46 95 00Fax +31 513 - 46 95 55

Branch-office emmenWillem Schoutenstraat 11B 7825 VV EmmenPhone +31 591 - 61 98 50Fax +31 591 - 63 51 56

www.beenen.nl

schekmanManagement:ing.T.P.A.Scheenen

schekman elektrotechniek B.v.Factorijweg 15P.O. Box 69806503 GL NijmegenPhone +31 24 - 371 77 77Fax +31 24 - 371 77 70

Branch-office WageningenNaaldweg 16706 JE WageningenPhone +31 317 - 41 56 80Fax +31 24 - 371 77 70

www.schekman.nl

hoogendoorn GroepManagement:ing.A.M.vanGoghMBA

hoogendoorn automatiseringJB systemsdata@visionWestlandseweg 190P.O. Box 1083130 AC VlaardingenPhone +31 10 - 460 80 80Fax +31 10 - 460 80 00

Branch-office england - Barnham, Bognor regisSussex Business VillageLake LaneBarnham, Bognor RegisWest Sussex PO22 0ALUnited KingdomPhone +44 1243 55 55 01Fax +44 1243 55 55 05

Branch-office france - avignonAgroparcBAT C, BP. 122384911 Avignon Cedex 09FrancePhone +33 490 84 14 25Fax +33 490 84 14 26

Branch-office Belgium - sint-niklaasIndustriepark-West 759100 Sint-NiklaasBelgiumPhone +32 3 780 17 62Fax +32 3 780 17 66

Branch-office usa - denver1880 Industrial Circle Suite A-1Longmont CO 80501United States of AmericaPhone +1 303 500 1077

www.hoogendoorn.nl

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de Bosman BedrijvenManagement:A.B.W.Bosman(a.i.),J.N.Domburg,R.Hamster

de Bosman Bedrijven B.v.Heliumweg 38*P.O.Box 2953800 AG AmersfoortPhone +31 33 - 469 91 99*Fax +31 33 - 469 91 00**Asof19April2007

Branch-office raalteKaagstraat 238102 GZ RaalteP.O. Box 104 8100 AC RaaltePhone: +31 572 - 34 61 88Fax: +31 572 - 34 61 89

Branch-office ‘s-hertogenboschVenbroekstraat 55253 AS NieuwkuijkP.O. Box 21065202 CC ‘s-HertogenboschPhone +31 73 - 639 40 00Fax +31 73 - 639 40 09

www.bosmanbedrijven.nl

van dalenManagement:G.H.vanDalen

van dalen installatietechniek B.v.Engelenburgstraat 217391 AM TwelloPhone +31 571 - 27 90 00Fax +31 571 - 27 90 10

Branch-office nijkerkHavenstraat 93861 VS NijkerkPhone +31 33 - 456 01 60Fax +31 33 - 453 01 29

Branch-office deventerFinsestraat 55001P.O.Box 667400 AB DeventerPhone +31 570 - 62 76 70Fax +31 570 - 62 37 04

www.vandalen-installatie.nl

sparreboomManagement:A.T.Kemperman

elektrotechnisch Bureau J.h. sparreboom B.v.Brouwerstraat 22P.O. Box 1142980 AC RidderkerkPhone +31 180 - 41 65 63Fax +31 180 - 41 20 55

www.sparreboom.nl

iJsselmuidenManagement:P.Th.M.IJsselmuiden

iJsselmuiden en Zonen B.v.Hub van Doorneweg 721271 KZ SassenheimPhone +31 252 - 26 01 01Fax +31 252 - 23 28 19

www.ijsselmuidenbv.nl

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Trading Group

hprManagement:Drs.G.J.deWaardAA

hpr techniek B.v.Stolwijkstraat 33P.O. Box 93933007 AJ RotterdamPhone +31 10 - 292 87 87Fax +31 10 - 292 87 65

Branch-office Belgium - ZaventemLeuvensesteenweg 613B-1930 Zaventem Zuid 7BelgiumPhone +32 2 253 31 20Fax +32 2 253 08 97

www.hprtechniek.nl

seher the netherlandsManagement:E.vanVeen

B.v. technische handelsonderneming m. seher & Co.Admiraal Helfrichweg 2aP.O. Box 1902900 AD Capelle a/d IJsselPhone +31 10 - 258 08 88Fax +31 10 - 258 08 99

www.seher.nl

seher BelgiumManagement:P.A.DeSmedt

m. seher & Co. n.v.Assesteenweg 117/2B-1740 TernatBelgiumPhone +32 2 521 06 00Fax +32 2 521 88 92

www.seher.be

BevarManagement:L.Zevenbergen

technische handelsonderneming Bevar B.v.Einsteinstraat 32P.O. Box 9353900 AX VeenendaalPhone +31 318 54 73 10Fax +31 318 54 73 33

www.bevar.nl

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Batenburg Beheer N.V.Stolwijkstraat 33

P.O.Box 9441

3007 AK Rotterdam

The Netherlands

Phone +31 10 292 80 80

Fax +31 10 482 51 41

www.batenburg.nl

info@batenburg.nl

CoC Rotterdam

File no. 24001907

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installation group

trading group