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APG Groep NVJAAR 2012VERSLAG2012 ANNuAl report

APG Groep NV

2012 AnnuAl RePoRt

This document can only be used for reference; it is a translation into English of an original Dutch document. In the event of any discrepancy between the two texts, the Dutch text shall prevail.

APG GroeP NV 2012 AnnuAl RepoRt tAble of CoNteNts

ApG: DeDiCAteD to proViDiNG A GooD AND AfforDAble peNsioN / 5

profile ApG / 9

Key fiGures / 11

report of the exeCutiVe boArD / 19Introduction / 19 Developments in the financial position / 19Our environment / 24Our markets / 24Our organisation / 24Our services / 26Corporate Governance / 28Responsible investment / 32Risk management / 33Personnel and organisation / 35Remuneration policy / 36Cooperation with the Works Council / 40Prospects and expected developments / 41Word of thanks / 41

report of the superVisory boArD / 45

fiNANCiAl stAtemeNts / 51Consolidated balance sheet as at 31 December 2012 / 52 Consolidated profit and loss account for 2012 / 53 Consolidated cash flow statement for 2012 / 54Accounting policies / 55 Notes to the consolidated balance sheet / 66 Notes to the consolidated profit and loss account / 76Notes to the consolidated cash flow statement / 81Other notes / 81 Company financial statements / 86Accounting policies / 87 Notes to the company financial statements / 88

other iNformAtioN / 97Independent auditor's report / 98 Profit appropriation scheme under the Articles of Association / 99 Proposal for the result appropriation / 99 Events after the balance sheet date / 99

persoNAl DetAils / 102

5APG GroeP NV 2012 AnnuAl RepoRtf

ApG: DeDicAteD to

PRoviDinG A GooD AnD AffoRDAble Pension

DeDiCAtioN

All organisations in the sectors for which APG works thrive on the dedication of their professionals. Teachers, construction workers, military personnel, police officers, civil servants, cleaners, engineers, medical specialists, researchers, and many others.

It is their dedication that inspires APG, and that serves as a shining example to us. APG aims to emulate this dedication in providing a good and affordable pension today and tomorrow for as many of our clients’ members as possible.

Through clear communication with employers and employees, precise and accurate pension administration, timely payments, a balanced and responsible investment policy focused on the long term, and expert management advice for our clients.

That is why we have chosen to highlight their dedication throughout this Annual Report of the APG Group for 2012.

Dick Sluimers, Chairman of the Executive Board of APG Group

APG GroeP NV 2012 AnnuAl RepoRt

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'She makes biology that

extra bit interesting'

iNterView

'Biology is my favourite subject and Ms Hoogervorst makes it that extra

bit interesting. She does her best to link the theory we are taught with

current affairs. She brings in news articles about topics that have to do

with our course material and then talks about them in class.

That is always very interesting, and by making that connection she

enhances the relevance of what we are learning and helps to ensure it

sticks in your memory. Thanks to her I was able to choose a scientific

subject combination with biology, physics and chemistry.'

Benjamin de Kromme, fifth‑year student, about Marjolijn Hoogervorst,

his biology teacher at the ‘Alberdingk Thijm’

International School in Hilversum

8 9APG GroeP NV 2012 AnnuAl RepoRt

profile APG

APG is a financial services provider in the collec-tive pension market, and provides pensions administration and communication services, asset management and management advice for pension funds. APG manages 324 billion euros of pension capital on behalf of these funds. Overall, APG administers the pensions of approximately 4.5 million employees and former employees in the public and private sectors. APG works on behalf of pension funds in the following sectors: government & education, construction, housing corporations, medical specialists, sheltered work-shops, cleaning & window cleaning, the brick industry, and the wholesale trade in flowers and plants.

our missioN AND strAteGy

APG’s motto is “Tomorrow is today”. This conveys the message that APG works hard every day to ensure tomorrow’s pensions. It underlines that a good pension in the future is only possible with a good investment strategy and sound pension management today. The motto furthermore constitutes the guideline for APG’s responsible investment policy, taking into account ESG factors (Environmental, Social, Governance). APG takes the creation of a livable world for present and future generations as a starting point for its business operations.

Together with our clients, we believe in a strong Dutch pension system based on collectivism and solidarity. It is our mission to support this system with our knowledge and expertise. In this way, we seek to make an essential contribution to realising a good and affordable collective pension for the present generation, and those to come. We aim to invest the contributed pension assets in a responsible and cost-effective way. Our focus on achieving stable, long-term returns with responsible risks contributes to realising a good and affordable pension for our clients’ participants. Additionally, our commitment to a sustainable world is an integral part of how we manage the investments on behalf of our clients

APG has offices in Heerlen, Amsterdam, Utrecht, Brussels, New York and Hong Kong. As APG invests extensively outside the Netherlands and on the world’s financial markets, APG has subsid-iaries in New York and Hong Kong. From our Brussels office, we bring the interests of our clients to the attention of EU policymakers.

Core ACtiVities

APG is a pension provider. APG provides the following services for pension funds:

APG Groep is only used as the legal name of the above structure.In other cases, we simply use the term APG or APG Goup for APG Group in this annual report

profile ApG


Key fiGuRes(amounts in millions of euros)

Group equity

Balance sheet total

Ratio of equity to the balance sheet total of the administrative business(according to the segmentation overview)

Investments of the insurance business(including claims from reinsurance)

Liabilities of the insurance business

Solvency of the insurance business

Individual employees

Operating income • pension management• asset management• supplementary products• other

• investment result of insurance business

Operating resultNet result

yeAR-enD

2012

901

5,221

38%

2,868

3,308

284%

4,117

2012

277369359

561,061

3481,409

22232

yeAR-enD

2011

876

4,928

42%

2,814

3,107

239%

4,187

2011

269360376

621,067

941,161

9433

Key fiGures

• Pensions administration and communication; APG collects contributions, administrates pension rights and makes pension payments for members. APG ensures reliable pensions administration of the highest quality, guaranteeing peace of mind for pension fund managers.

• Asset management; APG advises pension funds on pension asset management and conducts this on their behalf. A well-balanced investment policy with a long-term perspective and attention for risks and opportunities is essential in this regard for our clients.

• Management advice; APG provides pension funds with advice in relation to laws and regulations, actuarial matters, asset liability management (ALM) and communication. Providing management support to pension funds is an important part of APG’s services.

In addition, APG’s insurance business provides supplementary products for income security. Employees are increasingly responsible them-selves for making supplemental provisions for income in case of early retirement, retirement pension, occupational disability and death. Based on our knowledge of the different (pension) schemes, we deliver products that tie in with this under the trusted brand name Loyalis.

12 13APG GroeP NV 2012 AnnuAl RepoRt Key fiGures

Asset mANAGemeNt:Assets uNDer mANAGemeNt

iN billioNs

other

CoNstruCtioN

GoVerNmeNt & eDuCAtioN

0

totAl284

yeAr-eND 2011

8

249

27

totAl324

yeAr-eND 2012

9

283

32

peNsioN mANAGemeNt:pArtiCipANts iN AffiliAteD fuNDs

0

retireD employees

former pArtiCipANts

ACtiVe employees

totAl 4,249,000

yeAr-eND 2011*

1,506,000

1,718,000

1,025,000

totAl 4,443,000

yeAr-eND 2012

1,568,000

1,777,000

1,098,000

* Recalculated in aacordance with definition of DNB annual statements

14 15APG GroeP NV 2012 AnnuAl RepoRt Key fiGures

Number of employees affiliated with clientsAverage number of payments for clients per month

Rendementen*APG Developed Markets Equity PoolAPG Fixed Income Credits PoolAPG Euro Plus Treasuries PoolAPG Emerging Markets Equity Pool APG Index Linked Bonds PoolAPG Strategic Real Estate Pool **APG Hedge Funds PoolAPG Commodities PoolAPG Tactical Real Estate PoolAPG Core Treasuries Pool ***APG Absolute Return Strategies PoolAPG Equity Minimum Volatility Pool ****APG Alternative Inflation Pool *****

* The sequence is based on the size of the fund ** Delayed availability of the benchmark*** Commenced as of 1 January 2012**** Commenced as of 1 April 2012, return for 2012 is return over 9 months***** Commenced as of 1 March 2011, return for 2011 is return over 10 months

2012

30,000

1,144,000

2011

31,000

1,115,000

incReAse/ DecReAse

-3%

+3%

PoRtfolio RetuRn 2012

(percentages)

16.510.610.117.512.016.0

7.75.7

28.06.40.76.9

15.1

benchmARK RetuRn 2012

(percentages)

15.48.3

11.016.411.0

-1.3-1.5

27.46.0

-0.54.9

13.7

PoRtfolio RetuRn 2011

(percentages)

-3.67.43.3

-15.8-0.32.08.26.8

-3.2

-6.2

5.2

benchmARK RetuRn 2011

(percentages)

-3.97.03.4

-15.7-0.97.63.62.1

-3.4

0.9

2.6

A large part of these assets managed for clients is invested in collective investment schemes (FGR) managed by APG Group. The retruns chieved per fund (before deduction of costs) in percentages are specified below..


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'We have worked with one another for many years, so I know how he

carries out the work and he knows how I want it done. We are currently

fitting 194 housing units in the St. Anneke district in Breda with

insulation and new roofing. I can’t be present to supervise each unit,

but with Rob on the job there is no need. Good communication makes

or breaks the case. Receiving good information at the right time is

extremely valuable to me. Otherwise I am constantly behind the times.

I know I can rely on Rob for that.'

'Timely and good information

is extremely valuable'

iNterView

Peter van der Straten, supervisor at the

AlleeWonen housing association in Breda, about Rob Kienhuis,

site manager with DAKaccent

Nederland


iNtroDuCtioN

APG achieved a good return for its clients in 2012. Thanks to a strong recovery on financial markets, more than €40 billion was added to the assets under manage-ment, raising them to a total of €324 bil-lion (at 31 December 2012). APG also had a good year in terms of its own operating results. The group operating result for 2012 totalled €222 million, compared to €94 million in 2011. However, the outlook going forward is less promising. In antici-pation to this, APG announced a series of change programmes during 2012. These programmes target the integration of busi-ness units and the further professionalisa-tion of business processes. Our insurance subsidiary, Loyalis, has announced that it is embarking on a new strategic path. This is prompted by the continually changing life insurance market and developments on the financial markets.

During 2012, the pension management and asset management business units once again made a stable, positive contribution to the group operating result. However, the investments that need to be made and the change projects intended to optimise the APG organisation that were commenced during 2012 will put pressure on the annual results in 2013. These projects will continue through 2013 and 2014 and will be tangible in our day-to-

day operations. Turnover and results are furthermore expected to decrease in the coming years due to new price agreements with several clients.

The new strategic direction chosen by Loyalis has been prompted by the continu-ally changing life insurance market and the developments on the financial markets. Two significant changes are: firstly, the focus on products that supplement the pension and sectoral schemes of APG’s cli-ents’ funds, and; secondly, the adjustment of the risk profile of Loyalis’ investment portfolio in order to reduce the impact of the investments on the operating result. The recovery on the financial markets dur-ing 2012 had a positive impact on the development of Loyalis’ operating result.

APG represents dependable pensions administration of the highest quality that client pension funds know they can rely on. During a year in which pension funds found themselves under pressure, APG has supported its clients by safeguarding the sound administration of their members’ pensions. The implementation by APG of a new client’s pensions administration with effect from 1 January 2012, was successfully completed to the satisfaction of the client concerned. Additionally, by including two funds with an existing client’s portfolio, APG saw the number of participants, whose pensions it administers, increase.

Furthermore, APG modernised its product offering at its clients’ request, gave consid-erable priority once again to improving risk control, and took steps in further inte-grating sustainability and good governance in our investment processes.

The coming year promises to remain challenging for APG and its clients. The focus will be on providing continuing undiminished support to our existing clients. Together we will work on further improving our services and lowering the management costs. After all, every euro our clients can save will add to building up the pensions of our clients’ members.

DeVelopmeNts iN the fiNANCiAl positioN

Operating resultThe asset management and rights manage-ment business units made a stable, positive contribution to the group operating result, with asset management activities account-ing for the greatest share. The positive developments on the financial markets ensured Loyalis returned positive invest-ment results, which feeds through into a positive development of the insurance subsidiary’s operating result.

report of the

executive boARD

report of the exeCutiVe boArD

20 21APG GroeP NV 2012 AnnuAl RepoRt report of the exeCutiVe boArD

0%

relAtiVe DistributioNoperAtiNG

result

supplemeNtAry proDuCts

Asset mANAGemeNt

totAl (€ 94 millioN)100%

2011

-46%

123%

23%

totAl (€ 222 millioN)100%

2012

35%

57%

8%

peNsioN mANAGemeNt

APG achieved a group operating result of €222 million during 2012, compared to €94 million in 2011. The operating result is defined as the balance of operating income and operating expenses adjusted for the amortisation of certain categories of intangible fixed assets and, for 2012, also adjusted for the costs associated with the personnel-related provisions.

TurnoverThe total of the operating income (turnover and investment results) for 2012 amounts to €1,409 million and is €248 million higher than the operating income realised in 2011. The increase is mainly due to higher invest-ment income realised by Loyalis. In addi-tion, the management fee for asset manage-

ment activities rose slightly due to the increase in average invested assets.

CostsThe operating expenses for 2012 amounting to €1,187 million are €120 million higher than the operating expenses during 2011. The increase is mainly due to an increase in the total payments made and the change in the provision for insurance liabilities at Loyalis. This provision amounts to €562 million for 2012, an increase of €118 million compared to 2011 (€444 million).

Net resultAPG achieved a net result of €32 million dur-ing 2012 (2011: €33 million). The increase in operating result of €128 million is largely off-set by the following two items. In connection

with the transfer of APG personnel from Stichting Pensioen fonds ABP (ABP Pension Fund) to Personeels pensioen fonds APG (APG Personnel Pension Fund), liabilities worth €59 million were justified as compensation for the loss of support base, insurance-related loss as well as other expenses arising from the settlement. In addition, personnel-relat-ed provisions in the amount of €26 million were created in relation to the current change programmes within APG. The result from participations in 2012 relates to APG’s capital holding in Pensional; in 2011 a positive result of €34 million was realised in connection with the result from participations concerning and the sale of the interest in Alpininvest Partners NV.

Total operating incomeTotal operating expenses, excluding goodwill-related amortisationOperating resultPersonnel-related costsGoodwill-related amortisationFinancial income and expensesCorporate income taxResult from participationsConsolidated resultMinority interest of third parties in the resultNet result

2012

1,4091,187

222-/- 85-/- 80-/- 16

-/-9-

32-

32

2011

1,1611,067

94-

-/- 79-/- 15

-3434

-/- 133

Net result (amounts in millions of euros):


iNVestmeNt mixiNsurANCe busiNess

0%

oVerlAy portfolio

fixeD iNCome iNVestmeNts

reAl Assets

totAl100%

yeAr-eND 2012


totAl100%

yeAr-eND 2011*

* Brought into line with changes in presentation with regard to investments

78%

5%

17%

72%

4%

24%

DistributioNof turNoVer

0%

supplemeNtAry proDuCts

Asset mANAGemeNt

peNsioN mANAGemeNt

totAl100%

2011

31%

34%

35%

totAl100%

2012

31%

35%

34%


orGANisAtioNof the ApG Group

exeCutiVe boArD: of ApG Group

peNsioN mANAGemeNt AND peNsioN

CommuNiCAtioN

CorporAte stAff shAreD serViCes

supplemeNtAry proDuCts• Loyalis

• Subsidiaries

Asset mANAGemeNt

(year‑end 2012)


our eNViroNmeNt

There was a strong recovery in financial markets during 2012, leading to good investment results for our clients. On the other hand, the continuing uncertainty in the financial markets and in the economic conditions in Europe means that the interest on bonds of what are considered safer countries, such as Germany and the Netherlands, remained very low through-out 2012 also. The low level of the risk-free interest rate prevented any recovery of funding ratios in the Netherlands.

This has led to many pension funds taking action in order to improve their basic position. Some funds, for example, will be taking measures affecting their payments in the coming period in response to their inability to comply with the requirements of De Nederlandsche Bank before the end of 2012. Several pension funds plan to lower the pensions of their members in 2013 in an effort to return to the planned recovery paths during the coming year. Clients of APG are among those having to implement this measure.

The financial markets experienced a sharp downward readjustment in early 2012 as concerns about the European debt crisis resurfaced. Calm returned from the sum-mer onwards, however, and was followed by a strong recovery in the final months of the year. In terms of the investment results which APG achieved on behalf of our clients, 2012 must go down as an above-average year, with an average return of 16%. The good investment results achieved on financial markets con-trast sharply with the economic climate.

The pensions sector itself also was not immune to unrest during 2012. The impact of the pension agreement, the question of how to value pension liabilities in the future and the effects on different generations remained a source of debate. In addition, the austerity measures planned by the second cabinet of Prime Minister Mark Rutte, such as restricting the accrual of pensions and pensionable

income, have a direct impact on the pension funds and their members.

The economic situation has worsened and the outlook remains negative. This and other factors have prompted pension funds to remain vigilant in ensuring a competitive price/quality ratio for their administration activities. The positive steps being taken among our clients, the pension funds, in acquiring the necessary expertise also plays a significant role in this regard. As a result, they are becoming increasingly better equipped to operate as professional counterparties vis-à-vis the administrative organisations. For APG, these market developments translate into declining anticipated turnover and results, compelling us to announce a cost reduction programme, with several job losses, in 2012.

our mArKets

APG provides services in several areas: (1) pension management and pension communi cation, (2) asset management, (3) manage ment advice and (4) supplementary products.

The pension management market experi-enced a relatively modest number of commercial developments during 2012. In the period running up to 2012, APG became the largest pension provider in the Netherlands and now serves, through its clients, more than a quarter of all pension participants in the Netherlands (active participants, former participants and retired employees). APG has made it its priority to continue to provide optimum service to its existing clients, and to align its operations accordingly.

APG manages more assets than any other party in the Dutch pensions market. At year-end 2012, APG managed assets totalling €324 billion. APG competes with (foreign) asset managers and other pension providers on this market.

It is common knowledge that insurers are experiencing difficulties on their core markets. This had led several insurers to actively position themselves as broader providers of financial services, including collective or group pensions. They are expanding their activities to incorporate banking services, for example, but also to embrace the pensions market where they position themselves as a provider or premium pension institution (PPI). This widening of activities is a significant factor to take into consideration with the further development of APG as a whole. In the market for supplementary insur-ance, APG has elected to continue with its subsidiary Loyalis as a niche player in a limited number of segments, the most important being the government & education and the construction sectors.

Many pension funds in the Netherlands have outsourced (parts of) their manage-ment advice requirements to external parties. APG also provides some of its clients with management advice, in addition to pensions administration and asset management. This may involve advising them on Asset Liability Manage-ment as well as actuarial and legal consult-ancy in relation to pension schemes, for example, but can also include support with regard to laws and regulations and supervisory matters.

our orGANisAtioN

The economic situation in the sectors in which our clients operate and the previ-ously announced reductions in the pen-sions of their participants are resulting in permanent downward pressure on man-agement costs. More than ever before, administrative organisations are judged not just primarily in terms of the quality of their services, but also in terms of price. At the same time, the demands placed by clients on quality will continue to increase. In financial terms, 2012 was a good year for APG, in contrast with the prospects for the coming years. APG is tak-ing a pro-active stance in order to rise to

27APG GroeP NV 2012 AnnuAl RepoRt26 report of the exeCutiVe boArD

year, APG worked to modernise its range of products. At the request of clients, the Core Treasuries investment pool was set up, offering the possibility of more risk-free and liquid investments. Preparations were also made to establish the new Emerging Markets Debt investment pool. Of course, attention to the quality of services and cost transparency remains an unremitting priority. Moves to update client communication and to provide quarterly reports with regard to cost transparency are examples in this regard. The positive results from the 2012 client satisfaction survey showed that this is appreciated by clients.

The integrated global finance and risk function of asset management was fur-ther expanded, continuing the commit-ment to ensuring transparency, measure-ment and reporting of risks. In addition, “policy and frameworks” were defined, enabling better monitoring and control. Asset management also took steps to improve the organisation, both in finan-cial terms (investment risk) and, more

specifically, in terms of the quality of operating processes. An example in this regard is Murex, the new derivatives system that will lead to lower operating risks when trading in derivatives.

During 2012, considerable time and effort was devoted to the further integration of sustainability and good governance in the investment processes. Responsible invest-ment constitutes an integral part of APG’s investment process. We work together with other asset managers and pension funds throughout the world in order to increase the effect of the responsible investment policy. An Environmental, Social and Governance (ESG) dashboard has been launched, for example, which provides a systematic insight into matters such as external ratings, the exercise of voting rights, negative publicity and the degree of interaction with the company. It helps that APG additionally is actively engaged in the international Integrated Reporting Initiative, which seeks to restructure the annual reporting of listed

companies from a predominantly retrospective report into a more future-oriented and policy-related report. This incorporates aspects such as how a company can utilise its opportunities in the market and which non-financial indicators (such as environmental issues, for example) are important in that regard.

Furthermore, the Hedge Fund team took steps to integrate guidelines for respon-sible investment into our hedge fund investments. Last autumn, the Principles for Responsible Investment (PRI) Initia-tive published a discussion paper on responsible investment and hedge funds. This document is based on the Respons-ible Investment Policy which APG successfully applies.

ApG’s foreign offices showed during 2012 that the risk management of crucial operating processes is in order. on 24 July, hong Kong was struck by typhoon Vincent, closing down our office there for a period of time. our staff were able to continue to work without difficulty from other locations. At the end of october, New york was hit by hurricane sandy. while our office itself did not sustain any damage, many employees were left without electricity. wall street was closed for two days, and manhattan was difficult to reach for some considerable time. Nevertheless, the investment process here too was able to continue as normal, i.e. in a controlled fashion. this is due to the efforts that have gone into training crisis teams, the regular testing of critical applications in terms of business conti-nuity requirements and the annual con-ducting of business continuity exercises for all ApG asset management offices. these events in other countries have underlined once again what business continuity is all about: the resilience, inventiveness and good preparation of our people.

respoNsible iNVestmeNt

iNteGrAl pArt of

the iNVestmeNt proCess

hiGher returN

lower risK

proteCt ClieNt reputAtioN

improVe CorporAte behAViour

the demands of a changing pensions envi-ronment. Important aspects in this regard are assisting our clients in the present turbulent environment in order to cope with the pressure from a supervisory viewpoint and from financial markets, as well as further streamlining the cost-effec-tiveness of the organisation in order to absorb the pressure on prices being exert-ed by our clients.

During 2012, several organisational changes were implemented and the legal structure was brought further into line with the organisational structure. To this end, APG Deelnemingen NV was estab-lished at the end of 2012. The partial par-ticipations and the interests not directly related to the core activities were trans-ferred to this entity on 1 January 2013. Furthermore, all internal ICT-related ser-vices were transferred to APG Diensten BV on January 1, 2013. The services with regard to pensions administration and communication and management advice will be further merged under the Rights Management business unit during the course of 2013.

An important change programme was announced in 2012. At the heart of this programme lie a further focus on service to clients, cost-effectiveness and further professionalisation of services. In the present turbulent environment, it is more important than ever to be as close as possible to our clients in order to safe-guard our shared interests. We aim to provide an integrated portfolio of services to our clients. There is also potential among funds as to added value, in terms of synergy, quality or costs, for joining one of these existing clients. Finally, it is our aim, wherever possible and effective, to substitute external asset management mandates with our own solutions. Together, this constitutes a programme for optimising the services we provide to our clients.

Optimising our operations is a further objective. Different programmes exist across the company for realising this: Controlled Simplification (APG Asset

Management), Controlled Change (Rights Management), Selecting and Persisting (Loyalis), Fit for Purpose (ICT) and More with Less (Corporate Staffs).

The results of these programmes will enable APG to continue to offer its clients services of the highest quality at a competitive price into the future. The adjustments will be far-reaching, however. In addition to reducing external expenditure, these programmes also have staffing implications. These will mainly be absorbed through natural attrition.

Additionally, 2012 saw work on a large number of projects intended to further improve the services we provide to our clients. Examples in this regard are projects aimed at reducing the operating costs of the payment process, further increasing the degree of automation in, and hence the reliability of, the services provided by various pension administra-tions, the structuring of a generic and more efficient process for collecting pension contributions, safeguarding Loyalis’ compliance with regard to future EU regulations in the field of supervision as well as the implementation of the new standards for European payment transactions.

our serViCes

Pension management and pension communicationDependable pensions administration of the highest quality that client pension funds can rely on is what APG warrants. During a year in which pension funds found themselves under pressure, APG has supported its clients by ensuring that millions of people can rest assured that the administration of their pensions is in safe hands. At year-end 2012, APG man-aged the accrued pensions of 4.5 million employees and former employees in the public and private sectors.The measures announced by funds in order to improve the funding ratios will result in increased work for pensions management. Pension administrations

have been modified in order to allow changes to be implemented.

The implementation by APG of a new client’s pensions administration with effect from 1 January 2012, was success-fully completed to the satisfaction of the client concerned. APG additionally saw the number of participants whose pensions it administers increase due to the inclusion of two funds in an existing client’s portfolio.Also noted by its clients, APG is aware of the increasing importance of commu-nication, including among its clients. On the one hand, digital commu nication is exploding: self-servicing is allowing participants to access more information and services, digital archives have expanded and the use of web portals has grown. On the other hand, clients are making it known they want to commu-nicate as clearly and simply as possible. To meet these requirements, a process was started in 2012 which aims to ensure that plain language will be used in all communications about pensions.

Technological improvements within pensions management also continue. An example is the move to optimise systems in order to make the pension administrations more efficient and deployable for several clients. Work will also continue on bundling similar activities, designating generic functions and ensuring central control of project management. To this end, all activities (pension management, pension commu-nication and management advice) will be combined in a single chain. Optimising the operations will result in staffing reductions in the coming years. This process will be implemented mainly through natural attrition and on the basis of a good social plan.

Asset ManagementIn spite of the unremitting euro crisis, APG achieved a good return for its clients in 2012. More than €40 billion was added to the assets under management during 2012. At year-end 2012, APG managed assets totalling €324 billion. During the


The audit committee prepares the deci-sions of the Supervisory Board in the field of, among other things, finance, control and risk. The Corporate Governance Code was specifically used as a guide when draw-ing up the regulations of the Supervisory Board and its committees. At the end of 2012, the first steps were taken to update these regulations. ABP and pension funds affiliated with Stichting SFB are clients of APG, while ABP and Stichting SFB are also shareholders of APG. This situation demands special attention in the field of corporate governance. During 2012, APG defined further the distinction between the client and shareholder relationship, for example during the annual strategic consultation between the Executive Board, the Supervisory Board and both shareholders of APG.

During the course of 2012, APG prepared a legal restructuring of its organisation, which came into effect on 1 January 2013. APG Groep NV has (as of 1 January 2013) four fully-owned subsidiaries: APG Algemene Pensioen Groep NV (responsible for all asset management, pensions administration and communication and management advice activities), APG Diensten BV (responsible for the internal ICT services), APG Deelnemingen NV and Loyalis NV (Loyalis). In addition, APG Groep NV has a 51 percent shareholding in the joint venture APG-ABN AMRO Pensioen instelling NV (Pensional), with ABN AMRO Bank NV (ABN AMRO) holding the remaining 49 percent of the shares. APG Groep NV also has a number of indirect capital interests. The complete structure is apparent from the list of capital interests. This list has been included as part of the notes to the financial statements.

Management adviceIn these turbulent times, it is becoming increasingly important that we assist our clients by providing them with sound advice. APG assists pension fund boards in various areas, such as actuarial and legal matters and communication with their members. A particular expertise that APG is able to offer relates to Asset Liability Management. Demand for this service grew during 2012. This prompted APG to extend its advisory support in the field of Asset Liability Management to existing clients who had not previously sourced this service.

Another reason for growing demand for advice in relation to Asset Liability Manage ment and actuarial and legal support is the shaping of a new pension contract by employers’ and employees’ organisations, and services with regard to possible pension reduction scenarios by the funds. The high ratings in the customer satisfaction surveys show that these ser-vices provided by APG are greatly valued by its clients.

APG maintained contacts with political representatives in The Hague and Brussels throughout 2012. In this way, APG keeps track of developments in the political arena. APG also takes an active role in this regard, for example with its call for the establishment of a national mortgage bank.

LoyalisFor Loyalis, 2012 was also a dynamic year, with developments that have a direct impact on its services. Loyalis had pre-viously been confronted with the ban on commission. The tighter requirements in the future Solvency II regime, which the organisation is currently preparing to meet, shift the focus within Loyalis even more to transparency and risk management.

In 2012, Loyalis announced that it was embarking on a new strategic path. This is prompted by the continually changing life insurance market and developments on the financial markets. The Netherlands is a country with a very high insurance density, thus making the insurance market here

extremely competitive. Even more reason, therefore, for an insurer to place a strong focus on the target markets and the range of products it develops for those markets. One consequence of this focus is that from now on Loyalis will concentrate in parti-cular on products that supplement the pension and sectoral schemes of APG’s clients’ funds.

In the interest of efficiency and cost control, the distribution model will be aligned more closely with clients’ wishes, with greater focus on the online channel. Loyalis aims to achieve its goal by offering its clients convenience and accessibility. This is, for example, realised through the development of MijnZekerheidsGids (My Security Guide), which provides members with an up-to-date overview of their accumulated financial position. Clients should be enabled primarily to do business with Loyalis independent of time and place. Distribution will take place on a very limited scale with just a few strategic intermediaries.

A significant implication of the strategic reorientation is the adjustment of the risk profile of Loyalis’ investment portfolio in order to reduce the impact of the invest-ments on the operating result.

The strategic choices Loyalis has made will lead to staffing reductions. This process will be implemented mainly through natural attrition and on the basis of a good social plan. Loyalis’ HR programme places par-ticular emphasis on results orientation, the capacity for change and entrepreneurship. The change programme is intended to lead to a future-proof and financially sound insurance company oriented toward clients and aligned to the current trends in the market: an ageing population, increas-ing use of social media and the internet, and increasing laws and regulations.

PensionalDuring 2012, work continued on the further development of operations for Pensional, a Premium Pension Institution. APG continues to contribute its experience as a provider of collective 2nd pillar

schemes to this effort. The provision of a range of options relative to freedom of choice in asset management and insurance is perceived as a distinguishing feature in the market.

CorporAte GoVerNANCe

APG believes that good corporate govern-ance is an essential precondition for obtaining and maintaining the confidence of its clients. Sound and transparent busi-ness practices upholding principles of integrity, proper supervision and render-ing account with regard to these practices contribute to this. In structuring its own corporate governance, APG takes the laws and regulations (and new developments in this respect) into account and in particular, opting for application on a voluntary basis of a significant part of the principles and best practice provisions of the Corporate Governance Code. This choice is consistent with APG’s views concerning integrity and transparency and the role APG plays in society.APG Groep NV has two shareholders: Stichting Pensioenfonds ABP and Stichting Sociaal Fonds Bouwnijverheid. APG Groep NV is managed by an Executive Board under the supervision of a Super-visory Board and follows the mitigated two-tier system. Members of the Executive Board and the Supervisory Board are appointed by the General Meeting of Share holders. APG Groep NV, represented by the Executive Board, carries out the manage ment of APG Algemene Pensioen Groep NV and Cordares Holding NV. Loyalis en Pensional have their own manage ment boards as well as their own super visory board.

The Supervisory Board of APG has appoint-ed two committees: a combined remunera-tion and appointment committee and an audit committee. The remuneration and appointment committee prepares the deci-sions of the Supervisory Board in the field of, among other things, the remuneration of the members of the Executive Board.


'lo

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Auth

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ity

pro

ViD

eD

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t AN

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ViCe

''I received a letter from the local authority Arnhem to remind me that my

passport was about to expire. That proved a useful reminder because

otherwise I might have forgotten about it. I was told I could make

an appointment at the Town Hall online – again very easy. There was no

waiting once I arrived at the Town Hall, in fact I was helped ten minutes

ahead of my scheduled appointment. That was a lot quicker than in

the past, when you had to take a number and wait your turn. And at the

counter I was helped by an extremely friendly member of staff.

All in all, a very pleasant experience!'

'Local authority provided pleasant and easy service'

iNterView

Harrie Emonts, resident of Arnhem, about

Boudewijn Kamphuizen and his fellow counter staff

at the Municipality of Arnhem


In 2012, APG meets the requirements set by the ISO 14001 environmental management standard. The environmental management system is applicable to the management of buildings, machinery, sites, catering, cleaning activities, safety, document production, purchasing and logistics at APG’s headquarters in Heerlen.

In terms of the purchasing process, imple-menting supply chain responsibility means that both the suppliers themselves and their products and services must meet specific requirements with regard to the themes of People, Plant, Profit. These require ments are set out in a Code of Conduct for Suppliers, which since November 2008, we have asked all our suppliers to sign. The existing Code of Conduct for Suppliers was updated in August 2012. The Code of Conduct as well as a series of additional environmental requirements were applicable in the case of various large-scale purchasing processes. In 2012, preparations commenced for a sustainable mobility plan with the aim of further reducing the CO2 emissions caused by commuting traffic. Exploring employees’ current mobility patterns through a (pilot) mobility survey was a first step in this regard.

risK mANAGemeNt

General APG aims to manage risks that can jeopard-ise the realisation of the company’s strate-gic objectives in a conscious and responsi-ble manner. Furthermore, APG, in its role as a provider of services to pension funds, additionally is responsible for ensuring the controlled execution of the pension admin-istration processes and the careful manage-ment of the assets entrusted to it.

This risk management paragraph describes the risk management carried out by APG for the activities and resulting financial charges that are for its own account and risk, and not the risk control carried out on behalf of clients. Identifying, analysing, controlling and reporting risks contributes

to the realisation of APG’s ambitions. This enables APG also to fulfil obligations to clients and participants and to comply with the requirements of supervisory authorities and applicable laws and regulations.

Risk management within APG is based on the following elements: • the risk management framework; • the risk management organisation; • the risk management process; • risk management internal supervision;

The risk management framework APG's risk management framework is based on the Enterprise Risk Management model of the Committee of Sponsoring Organi-sations of the Treadway Commission (COSO ERM) and forms the framework for structuring the risk management organisa-tion, the risk management process and the internal supervision of risk management. This framework consists of a number of starting points, objectives, procedures and work instructions. This framework pro-vides APG with insight into the relevant risks and the control of these risks organi-sation-wide.

The risk management organisation The organisation of risk management is based on the Three Lines of Defense model. This model is characterised by layers of responsibility with regard to risk control:• The line management forms the first line

of defense. The management of each division of the organisation is responsible for the management of risks and monitoring the effectiveness of the control measures within the own area of focus.

• The second line of defense comprises risk control, finance and compliance. On a group level, the corporate departments Corporate Risk Control, Corporate Finance and Corporate Legal, Tax & Compliance are responsible for this line of defense. Within the business units, these are the departments and officers responsible for finance, risk management and compliance. The corporate depart-ments define the risk control frameworks, monitoring, reporting to and advising the Executive Board of APG Group on risk

management policy, the relevant risk developments within the Group, the effectiveness of risk management within the business units and compliance with risk management policy. Risk Manage-ment functions within the business units are responsible, within the group frame-works, for monitoring of and compliance with the above. They advise the manage-ment teams of the business units on matters relating to internal control.

• The internal audit function forms the third line of defense. Corporate Internal Audit conducts internal audits with regard to important processes and control measures and thus provides additional certainty on the level of risk management and the internal control. Where possible, the external auditor makes uses of the activities of Corporate Internal Audit for the performance of assurance assign-ments.

The risk management process APG has set up a risk management process in order to ensure controlled and sound business operations. Risks are identified, analysed and assessed on a regular basis. This process is carried out by the business units and on a group level and consists of, among other things, the annual perfor-mance of risk self-assessments. In these risk self-assessments, risks are identified, analysed and assessed, after which it is determined whether the existing control measures are sufficient or whether addi-tional measures are necessary. The risks and related control measures are included in the year plans and the internal control improvement plans. These control meas-ures and plans are monitored during the year by means of progress reports.

Risk management internal supervision APG's Executive Board and the management teams are responsible for steering, monitor-ing and internal supervision. A number of committees perform preparatory work for this, for example the security board, IT gov-ernance board, financial review and internal control committees. The security board focuses specifically on information risk management and business continuity man-

respoNsible iNVestmeNt

Tomorrow is todayAPG is a socially committed organisation. We continue to adapt ourselves and our business operations in order to ultimately choose the best solutions for people and the environment. By being mindful of the world around us, we aim to make a contri-bution to ensuring that future genera-tions too can grow up in a livable society.

As a pension provider, it is in our nature to have a long-term vision: we work to secure the future of the present genera-tion of members of client pension funds. For us ‘sustainability’ means that the needs of future generations also play a significant role.

APG advises its clients intensively with regard to responsible investment practice since, given the scale of the invested assets, the positive effects to be gained from such advice are considerable. It is partly for this reason that responsible investment constitutes an integral part of APG’s investment process.

APG considers sustainability to be increasingly important for the following reasons:• Companies that incorporate sustainabil-

ity in their strategic agenda adapt more easily to the changing environment.

• Sustainability yields cost savings. By decreasing waste, for example, and through lower energy costs, lower sickness absenteeism rates and more efficient business operations.

• Sustainability enhances a company’s attractiveness as an employer and increases labour productivity. Employees consider it important that they can be proud of the company they work for.

Responsible InvestmentAPG believes that concern for people and the environment can go hand in hand with good financial performance. In terms of asset management, APG utilises its scale to exert influence on companies to comply with the international guide-

lines for corporate responsibility and Corporate Governance. For example, we make maximum use of our voting rights on behalf of client funds at shareholders’ meetings of the companies in which we invest. APG focuses on investment schemes and propositions which have a sustainable nature, such as alternative energy, environmentally friendly technol-ogy and infrastructure. Moreover, we exert influence on companies by actively exercising our shareholder rights. APG issues a Responsible Investment Report (www.apgverslagverantwoordbeleggen.nl) every year. Here we report on what APG has done in terms of its responsible investment policy during the preceding year. The principle aim of APG’s respons-ible investment policy is to contribute to risk-weighted financial performance with a focus on socially responsible investment practice and making a contribution to the integrity of financial markets. Through this policy, APG expresses and gives substance to the social responsibility of its clients. The international standards for sustainability and governance APG applies in this regard are based on the United Nations Global Compact, the Interna-tional Corporate Governance Network Statement on Global Corporate Govern-ance Principles and the guide lines for multinational corporations and the OECD’s Principles of Corporate Governance.

In 2012 also, APG talked to a large number of companies about their business strategy. Subjects that were discussed included the manner in which sustainability is or is not integrated in the operating processes, and how the management of the company aims to realise this. APG expects these companies to conduct their business in line with the UN Global Compact's principles.

Sustainable business practicesWe strive to attain the smallest possible ecological footprint. We do this by reduc-ing as far as possible our environmental impact, power consumption and our CO2 emissions and, where possible, by a com-mitment to 100% clean production.

APG has taken steps that are intended to ensure the environmental policy of our own operations is properly implemented and the objectives are achieved. A concrete example of this is the decision to take part in the Heerlen mine water project.

from the start of 2013, ApG’s renovated headquarters in heerlen is to make use of mine water to cool the building. the office does not require heating since its own data centre produces sufficient warmth to heat the building. in fact, it produces excess warmth and soon this is to be fed into the mine water plant to provide heating to other clients. in this way, ApG can achieve a significant reduction of Co2 emissions. moreover, the office will become one of the most sustainable office buildings currently existing in the Netherlands and, given that the building dates from 1972, that is “quite an achievement” (De limburger, 11-12-2012).


insurance business are sensitive to interest rate changes. The interest-rate sensitivity of the insurance liabilities is largely absorbed by the fixed-income investments, with the remaining interest-rate risk being largely absorbed by a swap portfolio created for that purpose. With this, the interest-rate sensitivity of the investments has largely been brought in line with the interest-rate sensitivity of the liabilities. A significant part of Loyalis’ investment portfolio comprises fixed-income securities. The counterparty risk on these performing assets is managed by a strict and conservative selection and spread policy.

The balance sheet risk is a measure for the expected volatility of the value of the investments compared to the nominal liabilities. At APG, via the insurance company, this risk mainly arises from the interaction between the acceptance and the control of insurance and investment risks. Asset Liability Management (ALM) shows these risks in their inter relation-ship. An investment advisory committee advises the insurance business on ALM. The insurance company anticipates the regulations as these will apply under Solvency II and this is reflected, among other things, in the risk framework to be applied.

APG’s other financial risks comprise in particular risks with regard to solvency and liquidity. Safeguarding adequate solvency and liquidity is part of the financial management conducted by APG.

persoNNel AND orGANisAtioN

The environment in which APG operates has become more turbulent during the preceding year. In this environment, the commenced development from pension fund to administrative business showed positive results. The change programme dominated the HR agenda during 2012. An optimally structured organisation, lead-ership and the use of professional tools for

the further development of employees are the spearheads of the HR policy.

Structuring the organisationThe completion of the legal integration of APG and Cordares was followed in 2012 by the successful harmonisation of terms of employment for all employees of APG. Increasing price pressure from existing clients and from the market makes a structural reduction of the total costs necessary. More efficient structuring of processes and activities will make an important contribution in this regard. The first implications of this for the structuring of APG are expected to become evident during 2013. The change processes will result in a roughly 20 percent reduction in staffing levels during the next four years. It is expected that 60 per cent of this figure can be absorbed through natural attrition. APG will address this change programme and the staffing consequences with due care. A solid social plan was agreed with trade unions during 2012. At the heart of this social plan lies a commitment to assist employees whose position is discontinued to find a new job, within APG or elsewhere.

LeadershipThe significantly changed environment in which APG operates makes effective lead-ership crucial for the continuity of the company. APG’s leadership profile forms the basis for selecting, developing and assessing leaders. The capacity to deter-mine and communicate a course, custom-er orientation and securing the commit-ment of professionals play a central role. Results orientation and a willingness to take responsibility are also important aspects that are taken into consideration. Potential candidates to occupy manage-ment positions, have been identified during the preceding year. There is a focus on their development with the aid of professional support, using development assessments, training programmes, coaching and peer review, among other things. If a management vacancy arises, first consideration is always given to

appointing one of the management potentials, where possible.

Development of employeesAlongside a quality impulse, the necessary speed of response to internal and external developments calls for the potential to embrace change and power of execution among employees. Employees have their own responsibility, but managers set this process in motion and facilitate and guide in this process.

The Collective Labour Agreement (CLA) concluded in 2012 became effective on 1 January 2013. Among other things, this CLA defines a new HR cycle, with accompanying competency management. The provision of a single appraisal system for all employees represents a significant step on the road to making APG more results oriented.

Using personnel planning, a profile is made of the personnel development within the organisation on a quarterly basis. This information enables APG to take specific action in order to ensure the continued availability of the necessary knowledge, expertise and capacity in the organisation into the future. Various tools, including a personal development plan, the personal education budget, coaching, peer review, training, work-shops and targeted assistance in case of advancement and (at the employee’s request) exit, are available to managers and employees in order to achieve this. Additionally, there is a focus on develop-ing and assisting employees and mana-gers in order to safeguard the continued optimal provision of services to clients in this changing environment.

The women’s network within APG, which was established in 2011 as part of ‘Talent to the Top’, a national initiative with the aim of promoting more women in (senior) management positions, was further developed during 2012. This theme was more firmly embedded in the regular operating processes. In case of recruitment, for example, a gender-neutral profile is defined, both male and


agement, and the IT governance board focuses on the management of risks in con-nection with ICT and ICT projects. The finan-cial quarterly reviews monitor the control of the financial risks and financial reporting risks. The scope of the internal control com-mittees extends to all non-financial risks. These committees play a central role in risk management and internal control.

An internal control structure with internal control committees has been set up, with the business unit management teams exercising supervision of the following via internal control committees set up by them: • compliance with policy and management

procedures and processes, and the checks and balances;

• the functioning of the risk management and risk control systems, including the supervision of compliance with the relevant laws and regulations and codes of conduct. This is the joint basis for arriving at an ‘In Control Statement (ICS)’ for each financial year and each division;

• providing information to clients on compliance and the control of the outsourced processes (ISAE 3402);

• compliance with the recommendations of the internal auditor, the external auditor of APG and supervisory authorities;

• the reports issued by the business units concerning the functioning of their internal control, including implemen-tation of improvement plans and on the degree of compliance with the laws and regulations that are relevant to them.

In addition, these committees carry out preparations for the decision-making process of the board with regard to internal control and compliance.

Types of risk APG distinguishes five risk categories. These are strategic, operational, reporting, compliance and financial risks.

Strategic risks Strategic risks are the risks that could possibly jeopardise the realisation of the company's strategy and related objectives. Strategic risks can manifest themselves in

various areas. In the case of APG, this concerns developments that could possibly have negative consequences for confidence in the collective pension system, the insurance market, the good relationship with our clients or APG's reputation. Due to the increased focus on the current pension system, and its administration, by politicians, employers’ and employees’ organisations and supervisory authorities, the risk of laws and regulations that will have the effect of increasing costs and the likelihood of changes being made to the statutory (collective) pension system are rising. These developments can have an impact on the range of products and services offered by APG.An extra risk in this context is the economic pressure on the sectors in which our clients operate. This translates in particular into return risks. These relate to uncertainties about fluctuations in the anticipated returns from the different business activities.

Operational risks Operational risks are risks that arise as a result of inefficient or insufficiently efficient structuring of processes or the execution of processes. In order to give client pension funds additional certainty regarding their outsourcing risk, ISAE 3402 certifications are issued. This is done in the context of accountability toward client pension funds regarding the control of the process outsourced to APG.In conducting its business activities, APG is dependent to a large extent on informa-tion and communication technology (ICT). APG's ICT strategy and ICT policy aim to provide sufficient support for the internal control and execution of business processes and to safeguard the continuity. In addition, the demands of pension funds, participants and insured parties regarding up-to-date information and the availability of information and the speed at which information is provided are becoming higher and higher. The degree of reliability of the computerised process-ing of data is also verified and certified based on ISAE 3402 certificates and other certificates.

Reporting risks These are risks which, due to their nature, could possibly lead to a material misstate-ment in the financial reporting. The crite-ria and methods that are used in order to support and enable demonstrable internal control for the ISAE 3402 certificates issued to clients have also been applied for the financial administration processes and systems that are specific to APG.

Compliance risks The compliance risk is the risk that APG does not comply correctly and completely with external or internal laws and regula-tions, or changes in these laws and regula-tions, in a timely manner. A compliance risk can result in the organisation suffer-ing material losses, financial losses and/or damage to its reputation, or in legal or regulative sanctions being imposed on the organisation. These risks form an integral part of the risk management framework. APG promotes compliance with internal rules and external laws and regulations by continually encouraging awareness and by supervising compliance. Examples are the Code of Conduct, the integrity policy, the whistle blower regulation and the incidents regulation.

Financial risks APG’s financial risks comprise, among other things, market risk (such as interest rate, currency, equities, real estate, corporate bonds), counterparty risks, insurance risks and risks in relation to solvency and liquidity. Within insurance risks we make a distinction, depending on the product, between occupational disability, longevity and mortality risk. These risks are managed by a strict acceptance policy and partly through the instrument of reinsurance. The financial risks in connection with offering supple-mentary products dominate the balance sheet and the result of APG. This parti-cularly applies to the market risk and, within that risk, the interest-rate risk in particular. The interest-rate risk is the risk that fluctuations in the interest rate can lead to undesired effects on the balance sheet and the result. A large part of the investments and the liabilities of the


perCeNtAGe of mAles/femAles

ACCorDiNG to ftes

femAle

mAle

0%

totAl100%

2011

68%

32%

totAl100%

2012

68%

32%

female candidates must be nominated for every senior management position, and at least one woman sits in the selection committee for a senior management position.

Good employment practiceAPG aims to be a good and attractive employer. This is important to our employees, but is also essential in order to be able to compete on the external labour market. APG’s Recruitment Center was trans-formed during 2012 into a Recruitment & Career Center, with responsibility for facilitating directed advancement and exit actions in addition to taking care of per-sonnel inflow into APG. Employees are assisted in realising their career wishes and strengthening their employability. In addition to the focus on the advance-ment and exit of employees, APG also maintains contact with the labour market. Recruiting (young) talent remains neces-sary in order to retain a balanced and qualified pool of employees.

remuNerAtioN poliCy

APG has a controlled remuneration policy that is consistent with the strategy, the risk appetite and the core values of the organisation geared toward the long-term interests of stakeholders and the strategy of APG. APG’s Remuneration Policy is in line with the legal requirements of the Controlled Remuneration Policy Regulation of the Dutch Financial Supervision Act 2011.

The objectives of APG’s remuneration policy can be summarised as follows:• The remuneration policy enables APG to

attract, retain and motivate qualified employees. The aim is to attain a median level, with importance being given not just to the primary remuneration, but also to the entire package of fixed and variable remuneration as well as the secondary and tertiary terms of employment.

• The remuneration policy supports the corporate strategy and is consistent with the core values of APG;

• The remuneration policy contributes to sound risk management and is in accordance with APG’s risk appetite;

The remuneration policy stems from APG’s identity. This means that we seek to uphold a policy that is controlled and free of any excesses or undesirable incentives. The policy reflects a broad stakeholders approach in which the interest of participants and pension beneficiaries plays a prominent role. The yearly appraisal and reward cycle, including defining and measuring the performance objectives, is intended to select the right objectives, which strengthen the position of the clients of APG and which are in the interest of the long-term objectives and soundness of the organisation.

The remuneration policy is laid down in general remuneration principles that are applied to all employees, as follows:• Content and responsibility determine

the weight of each position. Jobs are rated according to aspects such as impact, complexity of the context in which the work is performed and the necessary knowledge, skills and competencies. The remuneration is a logical consequence of the rating of each position;

• Compliance issues and any exceeding of risk frameworks can lead to a reduction in, non-payment or reclaim of variable remuneration;

• In case of fraud and/or incorrect disclosure of information by an employee, a bonus that has been previously paid will be reclaimed.

In addition, and in line with the aforementioned laws and regulations, specific conditions are applicable to the determination of the variable remuneration of so-called Identified Staff, consisting of:1. The Executive Board, board members

and employees who have an impact on the risk profile and who receive variable remuneration in excess of 15%.

2. “Control” functions within Finance & Control, Legal & Compliance, Risk Management, Internal Audit and Human Resources.

The composition of the Executive Board meets the criteria of Section 2:166 of the Dutch Civil Code.

Governance in the context of remuneration policyA robust governance structure in which the commitment of the control functions is safeguarded is essential for an adequate risk-mitigated variable remuneration. The Executive Board is responsible for developing and determining the remuneration policy, which then is submitted to the Supervisory Board for approval and then to the General Meeting of Stockholders for adoption.

More specifically, the Supervisory Board has the following duties and responsibilities:• To approve the remuneration policy and

assess the principles of the remuneration policy on a regular basis;

• To monitor the Executive Board in terms of the implementation of the remuneration policy;

• To independently monitor compliance with the policy and the procedures laid down by the internal supervisory body;

• To assess the effectiveness of the remuneration policy and consider whether this contributes to the recruitment, retention and motivation of qualified personnel.

Changes in the remuneration policy affecting the Executive Board are submitted by the Supervisory Board to the General Meeting of Shareholders for adoption.

Loyalis has a similar governance structure to that of APG for its remuneration policy.


AGe DistributioNof stAff

0%

40 - 49 yeAr

60 - 65 yeAr

30 - 39 yeAr

50 - 59 yeAr

20 - 29 yeAr

totAl100%

2012

29%

19%

6%

8%

38%


totAl100%

2011

31%

19%

7%

37%

6%

mAles

femAles

totAl

fulltime/pArttime iN %

60%

40%

90%

10%

72%

28%

2012

pArttime

fulltime

61%

39%

90%

10%

72%

28%

2011

pArttime

fulltime


company by the General Meeting of Shareholders.

Works Council Annual ReportAs in the previous year, the Works Council published an annual report this year also, for the period 2011-2012.

prospeCts AND expeCteD DeVelopmeNts

The coming year promises to remain challenging for APG and our clients. APG’s focus will be on providing continuing undiminished, excellent support to our existing clients, while also proceeding with the necessary changes in the organisation in a controlled manner. Together we will work on further improving our services and lowering the management costs. After all, every euro our clients can save will add to building up the pensions of our clients’ members.

The precise details of the cabinet’s measures to restrict collective pensions will become clearer during 2013. These details are important for determining whether it will be necessary to develop products to enable supplemental pension accrual. We will therefore be keeping a close eye on these developments.

In 2013, several pension funds will carry through plans to reduce pensions. These reductions not only need to be processed, but must also be properly communicated to the pension fund members, thus representing an additional task for APG. In the field of asset management, the new Emerging Markets Debt investment pool

will be added to our portfolio. APG will furthermore support its clients in imple-menting the pension agreement, raising the retirement age and imple menting the SEPA Regulation.

The change projects commenced in 2012 will be continued during the coming years. The changes will require invest-ments to be made that will put pressure on the annual results in 2013. Additionally, in the field of personnel a selective recruitment policy will be pursued and the number of external contract staff will be kept to the necessary minimum.

In 2012, APG applied to the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten/AFM) for a Markets in Financial Instruments Directive (MiFID) licence to provide investment services. The criteria for awarding the licence include an assess-ment of the capitalisation of APG Algemene Pensioen Groep NV and APG Groep NV. During 2013, APG Algemene Pensioen Groep NV and APG Groep NV have consulted with the shareholders Stichting Pensioenfonds ABP and Stichting Sociaal Fonds Bouwnijverheid with a view to safeguarding the required minimum qualifying capital in accord-ance with the definitions in the Dutch Financial Supervision Act by year-end 2013 at the latest. Stichting Pensioenfonds ABP has meanwhile signed a letter of intent in this regard.

As regards the financial results, APG foresees a decrease in turnover and the result in the coming years, partly due to new price agreements with several clients. The turnover of Loyalis is also expected to decrease due to the continuing slump on the life insurance market and the restricted range of products.

worD of thANKs

The Executive Board is grateful for the considerable effort made by and the commitment of the employees, Supervisory Board and shareholders. Above all, we would like to thank our clients for their confidence in us.

Amsterdam, April 24, 2013

The Executive Board

DM Sluimers, ChairmanM BoerekampMs PHM Hofsté Ms AGZ Kemna AWIM van der Wurff


CooperAtioN with the

worKs CouNCil

The Works Council dealt with several dif-ferent matters during this reporting year. These matters were submitted to the Works Council for its advice as well as its approval. The matters concerned related, firstly, to the further integration between APG and Cordares. Additionally, the mat-ters chiefly concerned issues related to the restruct uring moves within APG announced during the year under review. The Works Council repeatedly faced the challenge of finding a good balance between the interest of the organisation and the collective interest of the employ-ees. The Executive wishes to express appreciation for the manner in which the Works Council discharged its duties in this respect.

ConsultationThe matters concerning the further integration between APG and Cordares and the restructuring moves within APG that were announced were the subject of frequent consultation between the Works Council and the Executive during the year under review. In addition to the monthly

agenda committee and consultation meetings, regular informal talks also took place between representatives of the executive committee of the Works Council and the Executive, and regular consultation took place between the various Works Council working groups and the responsible portfolio holders (Executive Board members).The Works Council issued a positive recommendation with regard to all requests for advice submitted during the year under review, granting the requested consent in all cases. However, in certain cases the Works Council did make its advice or consent subject to conditions. In order to assist the Works Council, a release calender was created, informing the council which requests for advice and approval will be submitted to the Works Council at which moment. In addition to consultation about submit-ted requests for advice and requests for approval, the Executive provided the Works Council with comprehensive infor-mation about the various developments facing the company during the year under review. The strategy to be followed by the company and the views of the stake-holders in that regard were discussed in this context.

Two consultation meetings were held as meetings under the provisions of Section 24 of the Dutch Works Councils Act. In these meetings, the general course of affairs of the company was discussed, with a review and preview of events. The meetings held under the provisions of Section 24 of the Dutch Works Councils Act were attended by members of the Supervisory Board.

Right to speak and enhanced right of recommendation vested in the Works CouncilDuring the year under review, the Works Council was invited several times to exercise its statutory right to speak and it exercised this right twice. This happened during the Annual General Meeting of Shareholders held in May with regard to the topics ‘Controlled Remuneration’ and the ‘(re)appointment of members of the Supervisory Board. In relation to the latter, the Works Council also exercised its enhanced right of recommendation as referred to in Section 2:158, subsection 6 of the Dutch Civil Code. The person nominated by the Supervisory Board with Works Council’s enhanced right of recommendation was appointed as a member of the Supervisory Board of the

Key figures Employees

Numbers of employees at the beginning of the yearJoinedLeftNumbers of employees at the end of the year

of whom emplyed in:• Heerlen• Amsterdam• New York• Hong Kong• Othertotal

Sickness absence

2012

4,187 127 197

4,117

2,702 1,230

111 29 45

4,117

3.0%

2011

4,238194245

4,187

2,801 1,200

108 29 49

4,187

3.9%


'Do

Cto

r b

lAN

KeN

Als

o h

eAr

s

wh

At y

ou

Do

N’t

sAy

'

'Charlotte Blanken is a marvellous doctor. She is enthusiastic,

realistic and honest. You couldn’t ask for any more. She listens to you,

and also hears what you don’t say out loud. She picks up any undertone

in your words or in your voice. At the time, she involved me intensively

in my personal treatment plan, and we had some robust discussions

about its details. You see, I am a rather willful patient, some might

say stubborn, patient. Sometimes I got my way, and sometimes

I had to back down. I find her approach professional and extremely

committed to her patients.”'

'Doctor Blanken also hears what you don’t say'

iNterView

Désirée Hairwassers, who was treated

for breast cancer, about Charlotte Blanken‑Peeters,

oncological surgeon at the Rijnstate hospital

in Arnhem

45APG GroeP NV 2012 AnnuAl RepoRt

iNtroDuCtioN

For APG, 2012 can be described as a variable year. APG was able to achieve good investment results for its clients. In addition, APG closed the year under review with a positive net result thanks to a higher operating result than in 2011. However, these good results contrast with the deteriorated prospects for the future. The Executive Board was therefore com-pelled to announce a series of change programmes that will also have staffing consequences.

ANNuAl report

This annual report contains the financial statements of APG Groep NV. These financial statements have been signed by the Executive Board and the Supervisory Board. PricewaterhouseCoopers Accountants NV (PwC) have audited the financial statements and have issued an unqualified opinion. The Supervisory Board has discussed this annual report with the Executive Board and the external auditor. The Supervisory Board advises the General Meeting of Shareholders, in accordance with the proposal of the Executive Board, to adopt the financial statements for the 2012 financial year.

The discharge of the members of the Executive Board for the policy pursued in 2012 and the discharge of the members of the Supervisory Board for the supervision exercised are separate agenda items for the General Meeting of Shareholders.

meetiNGs

In the year under review the Supervisory Board was extended to 10 members with the addition of Edith Snoey. She was nominated by the Supervisory Board, with the Works Council’s enhanced right of recommendation, and was appointed by the General Meeting of Shareholders. Edith Snoey joined the remuneration/appointment committee (hereinafter: the remuneration committee). Sjoerd van Keulen resigned in February 2013. The Super visory Board would like to thank him for the expertise and commitment he so ably displayed from 2008. In consult-ation with the General Meeting of Share-holders, it was decided to gradually reduce the number of members of the Super-visory Board. The Supervisory Board convened nine times during the year under review. In most cases, in the presence of the members of the Executive Board. The remuneration committee of the Supervisory Board convened eleven times and the audit committee of the Super visory Board convened eight times.

report of the

suPeRvisoRy boARD

report of the superVisory boArD


The composition of the Supervisory Board meets the criteria of Section 2:397, subsection 1 of the Dutch Civil Code.An overview of the remuneration of the Executive Board and the Supervisory Board is included in the financial state-ments section of this report.

Members of the Supervisory Board do not own any shares in APG Groep NV or in any of its subsidiaries.

worD of GrAtituDe

During 2012, APG directed its attention toward the future. The Executive Board announced a restructuring programme aimed at ensuring APG’s vitality into the future. The Supervisory Board would like to thank the Executive Board and the employees for their considerable efforts and dedication during the previous year.


LC Brinkman, Chairman GMML Verhofstadt, Vice‑ChairmanCW van Boetzelaer Ms HCJ van den BurgALM Nelissen Ms CM van Praag P RosenmöllerMs EL SnoeyKI van Splunder

report of the superVisory boArD

During the Supervisory Board meetings, matters of discussion were, amongst other things, APG’s strategy, the general and financial course of affairs of APG, the strategy pursued by Loyalis, the 2011 annual report, the unrest surrounding the euro, the internal business operations and the periodic evaluation of the Executive Board. In the second half of the year, the Supervisory Board together with the Executive Board and the shareholders dis-cussed and reviewed in some detail the necessary restructuring which will be implemented during the coming years in order to prepare APG soundly for the future. The implications of the restructur-ing for the employees were also discussed at length. Finally, the Supervisory Board approved the 2013 financial year plan.

In the meetings of the audit committee, the 2011 annual report and the accompa-nying report of the external auditor PwC and the (periodical) financial state of affairs of APG were discussed. The audit committee discussed with the Executive Board the concurrence of various internal projects with a view to merge different business units. The audit committee would like to compliment the Executive Board on the steps that have been taken in relation to risk management and internal control. The audit committee is of the opinion that the Executive Board has responded adequately to the findings and recommendations of the external auditor PwC and of the internal audit service CIA.

The audit committee paid a site visit to the Pension Management and ICT divisions in Heerlen. During this visit, the members of the Supervisory Board were informed in detail about the work being undertaken in these business divisions and the process of integration. The audit committee also visited Loyalis. During this visit, the organisation, the products, the distribution model, the investment portfolio and Solvency II were discussed.

The remuneration committee paid attention, among other things, to the preparation and implementation of the evaluation process of the members of the

Executive Board. The remuneration committee also discussed the governance and the composition of the Supervisory Board and the job profile for the Super-visory Board, in preparation for the (re)appointment of members of the Supervisory Board during the General Meeting of Shareholders this reporting year. The remuneration committee prepared the appointment of COO Mark Boerekamp. Intensive discussions on filling the vacancy for the CFRO also took place. During the year under review, this position was occupied on an ad interim basis by Peter Kok between 1 February and 1 September 2012. This position has now been filled by CFRO Petri Hofsté, with effect from 1 February 2013. The remuneration committee reviewed at length the implementation of the laws and regulations concerning controlled remuneration. Finally, the Collective Labour Agreement result that was achieved, including a social plan, was discussed during this year under review.

relAtioNship with the exterNAl AuDitor

AND CiA (CorporAte iNterNAl AuDit)

The external auditor PwC and the managing director of CIA were present at all the meetings of the audit committee. The external auditor also attended the meetings in which the Supervisory Board discussed the annual report and the audit reports. The Supervisory Board and the audit committee both held one meeting with the external auditor at which the Executive Board was not present. The audit committee also held one meeting with the managing director of CIA at which the Executive Board was not present.

CoNtACts with shAreholDers

The Annual General Meeting of Share-holders was held on 26 April 2012; the 2011 annual report and financial state-

ments were adopted at this Meeting. On 18 October 2012, an extraordinary General Meeting of Shareholders was held at which the shareholders were informed about the proposed restructuring. A meeting was also organised during this year under review for the Supervisory Board, the Executive Board members and the shareholders to discuss the strategy of the company, the strategic framework defined by the shareholders and the market developments. Following this meeting, a working group was established comprising delegations from the share-holders, the Supervisory Board and the Executive Board who will discuss these matters in further detail.

CoNtACts with the worKs CouNCil

During the year under review, members of the Supervisory Board attended several consultation meetings with the Works Council. The 2011 annual report, the general course of affairs of the company and the 2013 financial year plan were part of the subjects discussed during these meetings. The chairman of the Works Council exercised its right to speak on two separate occasions during the General Meeting of Shareholders.

remuNerAtioN of the exeCutiVe boArD AND the superVisory boArD

In general, the Supervisory Board formu-lates a proposal for the remuneration policy for the Executive Board for the General Meeting of Shareholders, which then approves the remuneration of the Executive Board. During the year under review, the Supervisory Board defined a number of principles for aligning APG’s remuneration policy with the Controlled Remuneration Policy Regulation of the Dutch Financial Supervision Act 2011, to be applied throughout the entire group.


'pet

er is

fle

xib

le

AND

CAN

wo

rK

ANyw

her

e'

'Peter has been working for the Municipality of Utrecht for roughly

thirty years and together with me for about ten years now. Peter has an

excellent work attitude and isn’t above doing anything, anytime.

He is flexible and multi-functional. He can work anywhere: laying

paving, cleaning, as a groundsman and with greenery. He is also a very

good driver, for example when covering for someone on a paving job.

Besides, Peter is a very friendly man, and that is why

I feel a real bond with him. Absolutely!'

'Peter is flexible and

can work anywhere'

iNterView

Jan Broertjes, gardening foreman at the Public

Works Department of the Municipality of Utrecht, about Peter Bruinstroop, employee seconded from

UW Reïntegratie

51APG GroeP NV 2012 AnnuAl RepoRt fiNANCiAl stAtemeNts

fiNANciAl StAtemeNtSAPG GRoeP nv

2012


Net turnoverInsurance premiums (14)Investment results (15)Income from services to third parties (16)Other operating income (17)

Total operating income

Change in provisions for insurance liabilities (18)Payments (19)Costs of outsourced work and other external costs (20)Personnel costs (21)Amortisation and depreciation (22)Impairments of current assets (23)Other operating costs (24)

Total operating expenses

Financial income and expenses (25)

Result from ordinary activities before taxesTaxes (26)Result from participations (27)

Result after taxesMinority interest of third parties in the result

Group result after taxes

2012

358,944348,370646,260

55,681

1,409,255

215,718346,646

90,465478,292

93,6721,000

126,143

1,351,936

-16,301

41,018-9,004

-393

31,621-

31,621

2011

376,13593,689

628,61262,456

1,160,892

105,152338,814101,163386,528

93,9995,882

114,584

1,146,122

-14,461

30919

33,649

33,977-685

33,292

CoNsoliDAteD profit AND loss ACCouNt 2012

in thousands of euros

fiNANCiAl stAtemeNts

31-12-2012

768,29732,87650,906

852,079

2,868,056

170,79274,388

1,255,6571,500,837

5,220,972

31-12-2012

900,991900,991

3,308,12929,919

105,4913,443,539

552,745

323,697

5,220,972

31-12-2011

847,52834,85652,073

934,457

2,814,146

150,02094,545

935,9461,180,511

4,929,114

31-12-2011

876,192876,192

3,107,47969,46125,756

3,202,696

552,745

297,481

4,929,114

Assets

Fixed assetsIntangible fixed assets (1)Tangible fixed assets (2)Financial fixed assets (3)

Investments insurance business (4)

Current assetsReceivables, prepayments and accrued income (5)Receivables from reinsurance (6)Cash (7)

totAl Assets

liAbilities

Group equity (8)Equity capital

ProvisionsInsurance liabilities (9)Deferred taxes (10)Other (11)

Long-term liabilities (12)

Current liabilities and accrued liabilities (13)

totAl liAbilities

CoNsoliDAteD bAlANCe sheet As At DeCember 31, 2012

(before profit appropriation)in thousands of euros

55APG GroeP NV 2012 AnnuAl RepoRt54

Introduction

ActivitiesAPG Groep NV provides pension management, pension commu-nication and asset management services as well as management advice for pension funds and income security schemes. APG Group has a broad but also specialist knowledge of pensions and pension schemes. APG Group makes its knowledge available to all of its clients, so that clients can offer a good and affordable pension to their participants.

Group relationsAPG Groep NV (with its registered office in Heerlen, the Netherlands) was founded on 29 February 2008. At the end of 2012, the following three wholly-owned subsidiaries belonged to APG Group: APG Algemene Pensioen Groep NV, Loyalis NV and APG Deelnemingen NV. APG Deelnemingen NV was established on 29 November 2012.

In addition, APG Group has a 51 percent shareholding in the joint venture APG-ABN AMRO Pensioeninstelling NV (Pensional), with ABN AMRO Bank NV holding the remaining 49 per cent of the shares. Pensional is not consolidated since APG Group does not exercise predominant control in the matter of management and financial policy.

APG Group has a number of indirect capital interests. The com-plete structure is apparent from the list of capital interests. This list has been included as part of the notes to the company financial statements.

APG Group has two shareholders: Stichting Pensioenfonds ABP (ABP Pension Fund / ABP) for 92.16 per cent and Stichting Sociaal Fonds Bouwnijverheid (Stichting SFB) for 7.84 percent.

General

The financial statements have been prepared on the basis of financial reporting policies generally accepted in the Netherlands and the statutory provisions concerning annual accounts con-tained in Part 9, Book 2 of the Dutch Civil Code. Section 2:402 of the Dutch Civil Code was applied for the format of the company profit and loss account. Consequently, it is sufficient to report the result from participations after deduction of taxes on the company profit and loss account as an individual item.

All amounts in the financial statements are shown in thousands of euros, unless stated otherwise.

Comparison with the previous year

Changes in accounting estimatesA change in accounting estimates was implemented in the insurance business with regard to the provision for insurance liabilities. A change took place in the mortality tables used for the warranted annuity products. The generation tables published by the Association of Insurers in 2008 are taken as the basic reference until the end of 2010. From 2011 onwards, the trend as listed in the tables published by Statistics Netherlands (CBS) is applied to the mortality rate in these generation tables. From 2013 onwards, the trend as listed the tables published by Statistics Netherlands (CBS) is applied to the resulting table. For the unindexed annuities, this table is multiplied by 87%, and for indexed annuities by 100%. This change in the mortality tables has a negative impact on the result for the financial year 2012 in the amount of €17.2 million (before taxes).

With regard to the investments of the insurance business, a change in accounting estimates has been implemented for ‘sur-plus interest’. By changing the investment policy, it is anticipated that lower ‘surplus interest’ can be realised in the future. This means that the provision is increased by part of the cost absorp-tion attributable until the end of 2012 to the ‘surplus interest’. The provisions have been increased by lowering the yield curve by 0.20%, based on which future cash flows are discounted. The effect on the result for the financial year 2012 is a negative amount of €19.8 million (before taxes).

Changes in presentationWith effect from the financial year 2012, the insurance business presents the investments and their related investment results according to the nature and risks of the respective investment positions. In terms of the balance sheet, this results in a presenta-tional shift from the item investments to the item cash. The spec-ification of the investment results has been adjusted in the profit and loss account. The comparative figures have been adjusted accordingly, with the exception of several summaries of changes in the notes due to the absence of the necessary information. This is indicated in the summaries of changes concerned. The change in presentation has no impact on the assets or the total result of APG Group.

The presentation of the cash flow statement has been adjusted following the changes in presentation in relation to the insurance business with regard to the item investments. The cash flow statement shows the income and expenditure, with the exception of the changes in cash from investments.

ACCouNtiNG poliCies


Opening balance of cash (7)Opening balance of cash from investmentsOpening balance of bank balances in current account and deposits

Cash flow from operating activitiesPremiums receivedOperating income receivedPayments madeOperating expenses paidRepayments and sale of investmentsChange in cash from investmentsBenefits and purchase of investmentsOther changesCash flow from business activities

Interest receivedInterest paidCorporate income tax receivedCorporate income tax paid

Cash flow from operating activities

Cash flow from investing activitiesInvestments in fixed assetsIncome from the sale of participations

Cash flow from investing activities

Cash flow from financing activitiesDividend paid outAmount received in advance and finalisation of separation of administrative organisations Expenditure in connection with financial restructuring

Cash flow from financing activities

Change in cash

Closing balance of cash (7)Closing balance of bank balances in current account and depositsClosing balance of cash from investments

CoNsoliDAteD CAsh flow stAtemeNt 2012


2012

935,946265,480670,466

358,535780,773

-359,588-708,686220,558130,563-76,316

4,202350,041

6,935-22,188

--11,979

322,809

-9,979-

-9,979

-6,467

13,348-

6,881

319,711

1,255,657859,614396,043

2011

451,646

373,544782,355

-338,968-706,910138,289265,480-55,530

-275457,985

6,521-21,439

280-20,693

422,654

-11,02371,514

60,491

-2,422

7,522-3,945

1,155

484,300

935,946670,466265,480

The comparative figures 2011 regarding the opening balance of cash from investments are not available and are therefore expressed entirely in the change in cash from investments.


table 1: insight into the sensitivity of mortality risks, based on the solvency ii

criteria, regarding the provision insurance liabilities in millions of euros

(before corporate income tax)

2012

2,585

+42.7

+12.5

2011

2,458

+36.2

+14.2

2012

723

+6.5

n/a

2011

650

+3.0

n/a

life non-life

Balance of provision at end of financial year

Effect on provision of 20% decrease in mortality risks/increase in longevity risk

Effect on provision of 15% increase in mortality risks/decrease in mortality risk

The longevity risk is only determined for the portfolio with annuities and the mortality risk only for the term life portfolio.

For the life insurance business, the transition to the latest mortality tables, which incorporate the improved life expectancy figures as well as the future trend, and the decrease in terms of the long-term interest rate structure result in a higher provision. For the non-life insurance business, the mortality risk has increased significantly due to the adoption of a new method (no longer based on mortality tables in line with market practice, but based on own estimate/observation).

In addition to the mortality/life risk, the disability/rehabilitation risk plays an important role. Low disability likelihood and high rehabilitation likelihood benefit both the client and the insurance business. The life insurance business does not have any products with the possibility of purchasing additional occupational disability coverage. This risk is small for the non-life insurance business. This is because the claim provisions mostly relate to claims that have already gone into effect.

The table below provides an overview of the contractual or best estimate maturity dates of financial liabilities based on the nominal cash flows stemming from the most important portfolios in the life insurance business and the non-life insurance business.

The increase in duration is due to the fact that the interest rate for both short durations and long durations has declined. In addition, there is a file effect due to the change in the product portfolio (shift from temporary to long-term policies).

LifeNon-lifeTotal

0-3 yeARs

24%8%

17%

4-6 yeARs

11%10%11%

7-9 yeARs

10%17%13%

10-12 yeARs

9%20%14%

> 12 yeARs

46%45%45%

Duration (in years)

2012

10.310.410.3

Duration (in years)

2011

8.39.88.7

table 2: duration of the main insurance liabilities


For the rest, the accounting policies applied for the financial statements are consistent with those of the previous finan-cial year.

Basis for consolidationCapital interests in entities in which the APG Group can exercise predominant control of management and financial policy are included in the consolidated financial statements by application of the integral method of consolidation. Inter-company transac-tions and financial liabilities between consolidated entities are eliminated. The minority interest of third parties is included under group equity. A list of consolidated entities is included as part of the notes to the company financial statements. Joint ven-tures are not consolidated.

De-consolidation takes place at the moment that decisive control is transferred.

EstimatesEstimates and assumptions that have an impact on the assets, liabilities, income and expenses reported are used in preparing the financial statements. This is especially the case in deter-mining the provision for insurance liabilities and in valuing the unlisted investments. It may subsequently be found that the reported amounts differ from the actual amounts.

RecognitionFinancial instruments are recognised on the balance sheet at the moment the contractual rights or liabilities arise with regard to those instruments. An asset is recognised on the balance sheet when it is likely that the future economic benefits will accrue to the company and the value of the asset can be reliably deter-mined. A liability is recognised on the balance sheet when its settlement will most probably be accompanied by an outflow of funds and the amount of the outflow can be reliably determined.

Financial instruments are no longer recognised on the balance sheet if the transaction results in the transfer to a third party of (virtually) all rights to economic benefits or risks for the position.

Income is recognised in the profit and loss account if an increase in the economic potential related to an increase in an asset or a reduction in a liability has taken place and the size of this can be reliably determined.

Expenses are recognised if a decrease in the economic potential related to a decrease in an asset or an increase in a liability has taken place and the size of this can be reliably determined.Forward exchange contracts concluded to hedge the exchange rate risk on the financing in foreign currency of the foreign subsidiar-ies are carried at cost price, for which cost price hedge accounting is applied. Cost price hedge accounting is also applied for the interest rate swap on the long-term loan, with the variable inter-est rate being converted into a fixed rate. This implies that as long

as the hedged position is recognised on the balance sheet at cost price, the derivative is also carried at cost price. As long as the hedged position under cost price hedge accounting is not recog-nised on the balance sheet, the hedge instrument is not carried. If there is an ineffective component of the hedge transaction, this component is recognised in the profit and loss account.

Foreign currency conversionItems listed in the financial statements in foreign currency are valued at the exchange rate in effect on the balance sheet date. The exchange rate differences that arise upon conversion are accounted for on the profit and loss account.

Upon consolidation, the balance sheets of group companies prepared in a functional currency other than the euro are converted into euros at the exchange rate in effect on the balance sheet date. Currency differences concerning the value of group companies included in the consolidation are recognised in the reserve for conversion differences.

Section on risk

This section discusses the quantitative risks and sensitivity analyses for the APG Group. The activities of the administrative business take place at the expense and risk of the clients and hence primarily relate to operational risks. The insurance business mainly runs financial risks as to the insurance activities and related investment activities.

The following are distinguished as significant financial risks: • actuarial and insurance risks (longevity risk, mortality risk

and disability risk);• market risk, including interest rate risk, equity risk and

currency risk;• spread and credit risk;• liquidity risk.

Actuarial and insurance risksActuarial and insurance risks are the risks related to an uncertain future event (for example, death or disability) that are transferred from the policyholder to the insurer. Solvency II focuses attention on the risks unfavourable to the insurer. For the life insurance business, the longevity risk is greater than the mortality risk. On balance, an unexpected increase in life expectancy is a risk. In contrast, for term life insurance the mortality risk dominates.


Foreign currency riskThe foreign currency risk arises due to changes in the level or the volatility of exchange rates. The insurance business assumes a long-term return on currency of developed countries of zero per cent and therefore hedges all currencies of developed countries. Positions in equities in currencies of emerging markets are deliberately not hedged. These economies are expected to grow faster than the Eurozone, and it is therefore expected that these currencies will appreciate relative to the Euro.

Exposure to the foreign currency risk is measured in accordance with the specifications of the Solvency II standard formula. Here, the impact on the result of an exchange rate movement of the unhedged currency relative to the Euro of 25 per cent is calculated. At the end of 2012, the total currency exposure was roughly € 9.7 million (2011: € 57.5 million). The decrease is

attributable to the sale of exchange-traded equities in emerging markets of which the currency of positions in equities was not hedged.

Forward exchange contracts concluded by the administrative business to hedge the exchange rate risk on the financing in foreign currency of the foreign subsidiaries are carried at cost price, for which cost price hedge accounting is applied.

Derivative positionsThe insurance business makes use of derivatives in order to hedge the interest rate risk, the equity risk and the foreign currency risk.

The table below shows the net asset value of the derivative positions in relation to the outstanding exposure.

Spread and credit riskSpread risk is the risk that the level and/or the volatility of the credit spreads above the risk-free interest rate change. There are various definitions of the risk-free interest rate: in this context, spreads are specified in relation to the swap curve. The fixed-income portfolio is widely diversified over debtors, securities and regions so that there is no specific concentration. Nearly all of these investments are investment grade debtors. If a debtor is graded lower than a BBB rating, a sale will be effected within 90 days. With regard to the creditworthiness of the fixed-income portfolio according to rating (using the ratings of S&P or Moody's) 82% belong to Class A and higher (2011: 85%).

Credit risk is defined as the risk that a counterparty to a financial instrument will not fulfil its obligation, thus causing the other party to suffer a financial loss. Credit risk, also referred to as debtor risk, is incurred on the principal and the interest. A part of the insurance investments relates to government bonds, while corporate bonds and compound securities are also held. If a credit risk exceeds the set limit due to the downward adjustment of a rating (credit spread risk), the risk must be brought back within the set limits as soon as it is practically possible.

Credit default swapFuturesForwardsSwapsOptionsTotal

cuRRent vAlue 2012

-1

1064

-75

unDeRlyinGvAlue 2012

121

5221,236

-

cuRRent vAlue 2011

-1-

-12461245

unDeRlyinGvAlue 2011

-21-

971,702

133

table 4: derivative positions at the end of the financial year


table 3: effect of change in the market interest rate by 1% point on the value of

investments and liabilities in millions of euros (before corporate income tax)

Life• •investments• liabilities• interest rate swapsImpact on result

Non-life• •investments• liabilities• interest rate swapsImpact on result

bAlAnce 31-12-2012

2,3342,585

534723

1% DecReAse in mARKet

inteRest RAte 2012

+41.5+109.1

+64.8-2.8

+16.8+60.3+41.7

-1.8

1% incReAse in mARKet

inteRest RAte 2012

-41.5-109.1

-64.8+2.8

-16.8-60.3-41.7+1.8

bAlAnce 31-12-2011

2,3152,458

499650

DecReAsein mARKet

inteRest RAte 2011

+38.6+95.8+56.1

-1.1

+15.4+50.1+34.3

-0.4

incReAse in mARKet

inteRest RAte 2011

-38.9-96.0-56.3+0.8

-15.5-50.2-34.4+0.3

Market riskMarket risk is defined as the risk that the value of a financial instrument will fluctuate as the result of changes in market prices, regardless of whether these changes are caused by factors that specifically apply for the individual security or by factors that affect all securities traded on the market. Market risk includes interest rate risk, equity risk and the foreign currency risk.

Interest rate riskInterest rate risk is defined as the risk that the value of a financial instrument will fluctuate because of changes in the market interest rate. The insurance business has an interest rate risk on the assets side as well as the liabilities side of the balance sheet.

On the assets side of the balance sheet, the insurance business has fixed income investments, which vary in line with the interest rate. On the liabilities side, the liabilities are discounted with the risk-free interest rate: the DNB interest rate term structure excluding the Ultimate Forward Rate (UFR).The interest rate risk arises due to a difference in the interest rate sensitivity of the investments and the liabilities. This interest rate risk is considered to be undesirable by the insurance business as the interest rate policy is based on a policy of interest rate risk immunisation by means of swaps. In case of immunisation, the swaps are purchased in such a way that the interest-rate sensi-tivity of the fixed-income portfolio plus the swaps is virtually identical to the interest-rate sensitivity of the liabilities.

Equity riskEquity risk is defined as the risk of a decrease in the value of investments in equities. Since June 2012, the insurance business no longer invests for its own account and risk in listed equities because the accompanying volatility no longer matches the desired risk profile of the insurance business. Exchange-traded equity investments are nonetheless still undertaken for clients’ account and risk since these can be part of an investment mix selected by the client.

At the end of 2012, the insurance business had a private equity portfolio for its own account and risk of € 61.4 million (2011: € 65.3 million). The impact of a decrease in private equity price of -44%, the current Solvency II shock (2011: 44%), would result in a decrease in value of -€ 27.1 million (2011: -28.7 million), more specifically for the life insurance business of -€17.1 million (2011: -€19.4 million) and for the non-life insurance business of -€10.0 million (2011: € 9.3 million).


If there is an active market, the current value of investments is based on the quoted bidding prices. The value of fixed-income investments for which no quoted bidding prices are available is based on third-party estimates, with this value being based on the most current available and observable market information on the investments. If applicable, for the part of the portfolio for which there is no active market, the current value is determined on the basis of model-based calculations. The valuation takes into account in any event the most current information on the term to maturity, interest rate, price of the underlying asset, volatility and interim money flows. The valuation also takes into account risks for insolvency and illiquidity according to basic, stress and extreme stress scenarios. The model-based calculations use the risk-free interest rate corresponding to the term of the particular securities.

The value of participations in unlisted real estate is based on the net asset value of the external participation fund in which an interest is held, with the value of the participation being based on the current value of the investments.

The value of private equity investments is based on third-party estimates, with this value being based on the fair value of the underlying investments. On the basis of this, the management draws up estimates, which are later reviewed against the audited financial statements.

Swaps are valued by third parties very frequently (usually daily, sometimes weekly) using models based on generally accepted principles such as the discounting of the most current expected cash flows to be exchanged with current interest rate curves.

Options are valued by third parties very frequently, using models based on generally accepted principles (Black Scholes and refinements of this). The valuation takes into account in any event the most current information on the term to maturity, exercise price, price of the underlying asset, volatility and interim money flows.

Current assets

Receivables, prepayments and accrued income (5)Receivables, prepayments and accrued income are included at fair value on initial recognition. Receivables are subsequently carried at amortised cost price, which usually corresponds to the face value less any provisions deemed necessary for bad debts.

Cash (7)Cash is carried at face value.

Provisions

Insurance liabilities (9)The provision for insurance liabilities is made up of the provision for life insurance liabilities and the provision for non-life insurance liabilities.

The provision for life insurance liabilities comprises the pro-vision for periodic benefits already in payment and deferred, the provision for unit-linked insurance with or without guarantees, the provision for end value guarantees, the provision for B insurance policies and the provision for risk insurance.

The provision is carried at the present value of the expected future cash flows.

The mortality rates used for the most important life insurance contracts are based on the generation tables, as published by the Association of Insurers in 2008, applying the trend as this was published by Statistics Netherlands (CSB) in 2010. For the years from 2013 onwards, the trend as listed in the tables published in December 2012 by Statistics Netherlands (CBS) is applied to the resulting table.For the unindexed annuities, this table is multiplied by 87%, and for indexed annuities by 100%.

Annual indexation is taken into account when determining the expected cash flows.The resulting cash flows are then converted to present value using a current risk-free yield curve; this is based on the DNB interest rate term structure excluding the Ultimate Forward Rate (UFR).Finally, provisions are increased by supplements for future administrative expenses, under the presumption that the current level of expenses constitutes a realistic assumption for future costs and expenses, adjusted for inflation.

The mortality rates used for non-life insurance contracts are the mortality rates based on mortality tables published by the Association of Insurers in 2006. Annual indexation is taken into account when determining the expected cash flows. The resulting cash flows are then converted to present value using a current risk-free yield curve; this is based on the DNB interest rate term structure excluding UFR at year-end 2012.Finally, provisions are increased by supplements for future administrative expenses, under the presumption that the level of expenses constitutes a realistic assumption for future costs and expenses, adjusted for inflation.


Liquidity riskLiquidity risk is defined as the risk that a company is unable to procure the financial resources needed to fulfil its obligations related to financial instruments. Liquidity risk can arise, for example, if a financial asset cannot be sold quickly in exchange for virtually its current value.

Basis of the valuation of assets and liabilities

Fixed assets

Intangible fixed assets (1)The intangible fixed assets are carried at acquisition price or manufacture cost, net of straight-line amortisation. The amortis-ation term is based on the expected economic earn-back period, taking into account any residual value. If there are indications that the realisable value is lower on a long-term basis than the book value, an impairment is recognised and this is explained in the notes.

Upon the acquisition of a company, all identifiable assets and liabilities of the particular company are recognised on the balance sheet at fair value on the acquisition date, unless it concerns a 'common control' transaction (common control transactions involve the purchase or sale of equity in group companies, and these are accounted for at book value) or the acquisition concerns the acquisition of the shares of (former) minority shareholders. The acquisition price consists of the monetary amount or equivalent that is agreed for the acquisition of the acquired company. Goodwill arising on acquisition is measured on initial recognition as the difference between the purchase price and (its share in) the current value of the identifiable assets and liabilities.

Tangible fixed assets (2)Tangible fixed assets are carried at acquisition price, net of straight-line depreciation or at lower going-concern value. Depreciation takes place on the basis of the expected useful economic life, taking into account any residual value. If there are indications that the realisable value is lower on a long-term basis than the book value, an impairment is recognised and this is explained in the notes.

Financial fixed assets (3)Loans provided are carried at fair value on the initial recognition. After the initial recognition, loans provided are carried at amortised cost price. In the absence of premiums/discounts this is the face value.

Participations are carried at net asset value. Participations in which APG Group NV does not have significant influence are included under financial fixed assets.

Deferred tax assets, including claims arising from loss compen-sation, are recognised on the balance sheet to the extent it is likely that there will be future gains against which temporary differences and non-compensated fiscal losses can be set off. The calculation takes into account rates in effect in coming years to the extent that these have already been set. Valuation takes place at face value. Insofar as the deferred tax asset is of a short-term nature, it is included under the receivables, prepayments and accrued income.

If there are indications that the recoverable amount of financial fixed assets is lower on a long-term basis than the book value, a value impairment is recognised and this is explained in the notes.

Investments insurance business (4) The purchase and sale of investments is included on the trans-action date, i.e. the date that the company enters into the obliga-tion to purchase or sell the asset. Investments are carried at current value. Transaction costs and changes in value are included in the profit and loss account in the period in which they occur (fair value through profit and loss).

Real assets and related derivative positions are carried at current value or at quoted market prices where available.

Fixed-income investments and related derivative positions are carried at current value, or at market value when available, and adjusted with the current interest to be attributed to it. If no stock market listing is available, the current value is based on third-party estimates, based on the current value of the underlying investments, or calculated by APG itself on the basis of contracted cash flows and the market interest rates that apply for the remaining terms.

Other investments and derivative positions relating to this asset class are carried at current value or at quoted market prices where possible.

Derivative positions are attributed to the assets to which they relate. Insofar as they cannot be assigned to fixed-income invest-ments or real assets, they are included in the other investments. These derivative positions are carried at current value. For certain instruments such as over-the-counter derivatives, valuation models are used in which certain assumptions are made, for example, with regard to credit risk, correlations and interest rate curves. Other valuation models and assumptions could result in a different estimation of the current value.

Valuation methodsThe valuation methods for determining the current value of the insurance business's investments are discussed below.


Operating expenses

Payments (19)Payments are attributed to the period to which they relate.

Personnel costs (21)Wages, salaries and social security contributions are recognised in the profit and loss account based on the employment conditions insofar as they are payable to the employees. The pension schemes are accounted for in accordance with the liabilities method; the pension premiums due for the financial year are recognised in the profit and loss account as an expense.

Amortisation and depreciation (22)Depreciation is accounted for proportionate to the expected economic useful life, according to the straight-line method.

Impairments of current assets (23)If there are indications that the recoverable amount of the current assets is lower than the book value, an impairment is recognised and this is explained in the notes.

Financial income and expenses (25)Financial income and expenses are attributed to the year under review. The interest income is income from current accounts and deposits, insofar as this is not considered part of the investment income.

Taxes (26)Taxes are calculated on the fiscal result on the basis of the tax rate in effect for the financial year. Temporary differences resulting from differences in commercial and fiscal valuation are expressed in (the development in) the deferred tax liability or asset.

LeasingLease contracts whose economic benefits and disadvantages are not for the account and risk of the company are classified and reported as operational lease. The lease obligations are recognised in the profit and loss account over the contractual lease period.

Basis of the cash flow statement

The cash flow statement is prepared in accordance with the direct method and provides a specification of movements in the balance sheet item of cash. Cash flows in foreign currency are converted at the average exchange rate.


The main non-life insurance contracts concern occupational disability insurance policies. The provisions for these non-life insurance policies are based on the estimated amounts of the benefits ultimately payable in respect of all claims arising prior to the balance sheet date, regardless of whether they have already been reported at that date, along with the associated (future) administrative expenses.

Deferred taxes (10)The provision for deferred taxes includes the deferred tax liabilities resulting from (temporary) differences between commercial and fiscal assets. The calculation takes into account rates in effect in coming years, to the extent that these have already been set. Valuation takes place at face value. Insofar as the deferred tax liability is of a short-term nature, it is included under payables.

Other provisions (11)GeneralThe other provisions concern liabilities or losses that will most likely have to be settled or taken and of which the size can be reliably estimated. The size of the provision is determined by esti-mating the amounts necessary to settle the particular liabilities and losses as of the balance sheet date and are carried, insofar as long term, at the present value of the expected future expenses. The discount rate used is based on the year-end interest rate for investment-grade Dutch corporate bonds, taking into account the remaining term of the provisions.

Personnel‑related provisionsPersonnel-related provisions, including the restructuring/integration provision, are, insofar as they are long term, carried at the present value of the expected future expenses, taking into account the relevant actuarial assumptions. The discount rate used is based on the year-end interest rate for investment-grade Dutch corporate bonds, taking into account the remaining term of the provisions. Short-term personnel-related provisions are created on the basis of the face value of the expenditures that are expected to be necessary to settle the liabilities and losses.

Other provisionsThe other long-term provisions, including the provision for the separation of the administrative organisation, are included at present value. The discount rate used is based on the year-end interest rate for investment-grade Dutch corporate bonds, taking into account the remaining term of the provisions. Short-term provisions are created on the basis of the face value of the expenditures that are expected to be necessary to settle the liabilities and losses.

Long-term liabilities (12)Long-term liabilities are carried at fair value on initial recognition and are subsequently carried at amortised cost price. This value usually corresponds to the face value.

Current liabilities and accrued liabilities (13)Current liabilities and accrued liabilities are carried at fair value on initial recognition. Current liabilities and accrued liabilities are subsequently carried at amortised cost price. This value usually corresponds to the face value.

Basis of determination of results

GeneralThe items included on the profit and loss account are largely a function of the accounting policies in respect of the investments and the provision for insurance liabilities used in the preparation of the balance sheet. Both realised and unrealised results are accounted for directly in the result.

Income, expenses and payments are attributed to the period to which they relate.

Net turnover

Insurance premiums (14)The insurance premiums are the earned premiums, single premiums and commissions attributable to the financial year, including the addition to the provision for the indexation of benefits granted on the basis of the policy terms and conditions. The unearned ANW and term life insurance premiums are added to the provision for unearned premiums.

Investment results (15)Net investment income comprises dividend on real assets and interest income from fixed-income investments for the financial year, fair value changes in investments and derivatives, and gains and losses on the sale of investments and derivatives. Dividend on investments in real assets is treated as a gain on the ex-dividend date. Interest income is accounted for in the period to which it relates. Changes in value relate to the difference between, on the one hand, the book value at the end of the year or the proceeds from sale during the year and, on the other, the book value at the end of the preceding year or the acquisition price during the year.

Income from services to third parties (16)The fees from third parties for administrative activities for pension and asset management are attributed to the period to which they relate.

Other operating income (17)The income from other services provided to third parties is accounted for less discounts and taxes levied on turnover. If the fee for a service to be provided can be reliably estimated, the income relating to this service is included proportionate to the degree to which the work has been performed.


'fle

xib

ilit

y is

A Ch

Alle

NG

e fo

r t

oN

Nie

''Tonnie is a hard worker. She is flexible, and that is essential for us.

We put on productions in all theatre genres. There are dance shows

and parties, we have a film function and also a congress function.

Sometimes these attract thousands of visitors and unexpected things

can happen. As a result, Tonnie and her crew sometimes don’t know

what awaits them in the morning. One thing that is certain is that

the cleaners must be gone before the first guests arrive.

Tonnie is always willing to rise to the challenge and for that reason

she fits in perfectly with us.”'

'Flexibility is a challenge

for Tonnie'

iNterView

Esther van Bilsen, operations manager at Theater aan de Parade

in ’s‑Hertogenbosch, about Tonnie van Rijswijk, team leader with the

Nederrijn Group


Opening balance InvestmentsDisposalsDepreciationImpairmentClosing balance

Cumulative purchase valueCumulative depreciation and impairmentBook value

Depreciation rates

fuRnishinGs AnD

inventoRy

15,9181,962

--2,753

-1115,116

25,929

-10,81315,116

5-20 %

DAtA-PRocessinG equiPment

15,2454,684

-107-5,882

-3313,907

43,542

-29,63513,907

20-25 %

otheR

3,693463

--242

-613,853

6,136

-2,2833,853

10 %

totAl 2012

34,8567,109

-107-8,877

-10532,876

75,607

-42,73132,876

totAl 2011

34,60110,191

--9,183

-75334,856

74,220

-39,36434,856

No securities have been furnished.

Financial fixed assets (3)The financial fixed assets include a deferred tax asset resulting from differences between commercial and fiscal valuations, a loan provided, participations that are not consolidated and other financial fixed assets.

The list of participations not included in the consolidation is included as part of the notes to the company balance sheet.

The movement in these items is as follows:

The deferred tax asset relates mainly to temporary differences between the commercial and fiscal valuation of the investments and insurance liabilities of the insurance business. Additionally, the deferred tax asset at year-end 2012 was attributable to an amended tax treatment of the goodwill arising from the ‘deZAFication’ (separation of the administrative organisation from the pension fund) in 2008. The impact of this amended tax treatment in the

amount of € 7.5 million as well as the change for the insurance business due to temporary differences between the commercial and fiscal valuation of the investments and insurance liabilities in the amount of € 6.3 million, among other things, are accounted for under other changes. No statement can be made with regard to the expected offsettability of the deferred tax asset in 2013.

Opening balance Purchases and benefitsSales and repaymentsResult from participationsChanges in valueOther changesClosing balance

DefeRReD tAx Assets

49,605----

-77448,831

PARticiPAtions

1,530--

-393--

1,137

otheR

938-----

938

totAl 2012

52,073--

-393-

-77450,906

totAl 2011

77,7451,500

-42,5524,187

12,629-1,436

52,073


Fixed assets

Intangible fixed assets (1)The intangible fixed assets include the goodwill calculated upon the acquisition of business activities and capital interests and the value of the client contracts and insurance portfolio identified with this acquisition. This item also includes purchased software.

Het verloop van deze posten is als volgt.

The economic useful life of the intangible fixed assets, with the exception of purchased software, is based on the period over which future economic benefits from underlying contract agree-ments with a long term are enjoyed.

There are no intangible fixed assets with limited ownership rights and no intangible fixed assets have been furnished as security for debts. Nor are there any liabilities due to the acquisition of intan-gible fixed assets.

Due to the strategic reorientation within the insurance business, an impairment has been recognised on the insurance portfolio of the insurance business.

Tangible fixed assets (2)The tangible fixed assets comprise the furnishings and inventory, data-processing equipment and other tangible fixed assets.

The movements in this item were as follows:

Notes to the CoNsoliDAteD bAlANCe sheet


Opening balance InvestmentsAmortisationImpairmentClosing balance

Cumulative purchase valueCumulative amortisation and impairmentBook value

Amortisation rates

GooDwill

261,443-

-17,147-

244,296

325,875

-81,579244,296

5-10 %

client contRActs

465,504-

-43,384-

422,120

629,702

-207,582422,120

7-10 %

insuRAnce PoRtfolio

111,443-

-18,049-1,578

91,816

181,281

-89,46591,816

10 %

softwARe

9,1385,459

-4,521-11

10,065

64,952

-54,88710,065

20-25 %

totAl 2012

847,5285,459

-83,101-1,589

768,297

1,201,810

-433,513768,297

totAl 2011

927,5744,017

-83,806-257

847,528

1,196,351

-348,823847,528


Current assets

Receivables, prepayments and accrued income (5)

Accounts receivableReceivables from affiliated partiesAmounts not yet invoicedTaxes and social security premiums Corporate income taxAccounts receivable from investmentsReceivable insurance premiumsOther receivables and accrued incomeTotal

31-12-2012

7,49590,106

5,3313,309

80819,70116,80627,236

170,792

31-12-2011

10,25480,021

3,4024,1172,8701,311

15,44332,602

150,020

A (maximum) amount of € 87.3 million of the cash (2011: € 70.9 million) may not be freely disposed of. Of this amount, collateral in the amount of € 66.9 million (2011: € 38.3 million) has been furnished as security for the fulfilment of the interest obligations

in connection with the long-term debts. No further security has been furnished, nor have any supplementary terms and condi-tions been entered into. The cash from investments may similarly not be freely disposed of.

This item includes the receivables from reinsurance accruing to the insurance business.

The term of the reinsurance portion is virtually identical to that of the respective insurance liabilities.

The receivables from affiliated parties mainly relate to the services provided to the mutual investment funds.

The receivables do not include any items with a remaining term of more than one year.

Cash (7)

Bank balances in current account DepositsCash from investmentsClosing balance

31-12-2012

234,515625,099396,043

1,255,657

31-12-2011

314,666355,800265,480935,946

Receivables and other assets from reinsurance (6)

Reinsurance portion of provisionsReceivables from reinsuranceTotal

31-12-2012

65,8108,578

74,388

31-12-2011

80,57313,97294,545


Group equity (8)

Equity capitalGroup equity

31-12-2012

900,991900,991

31-12-2011

876,192876,192

Investments insurance business (4)

The investments of the insurance business are held both at the business's own expense and at the expense and risk of policy-holders. The real assets included in these investments concern real estate funds, real estate, private equity and commodities and related derivative positions and equities (including convertible bonds). The fixed-income investments concern bonds including mortgage-backed securities and mortgage bonds and savings certificates, index bonds, mortgage loans and private loans inclu-ding the financial lease of real estate, and the related derivative positions. The other investments consist of the overlay fund (over-the-counter derivatives) and the 'rendementsrekening' [yield account]. Forward exchange contracts, options and interest rate swaps are included in the overlay fund.

Current value hierarchyInvestments are carried at current value. These are categorised based on the following hierarchy.

The majority of the insurance business's investments are valued on the basis of quoted market prices (level 1) or observable market data (level 2). Only a small portion of the total assets is included at current value based on estimates (level 3). Where estimates are used, they are based on evidence from independent third parties or internally developed models, where possible calibrated to observable market data. Although such valuations are sensitive to estimates, it is assumed that changes in one or more of the assumptions to reasonably possible alternative assumptions will not significantly change the current value.

Of the total value of the investments, 91 per cent is based on level 1 (2011: 91 per cent), 7 per cent is based on level 2 (2011: 7 per cent) and 2 per cent is based on level 3 (2011: 2 per cent).

Movements in the investments of the insurance business are as follows:

At own expenseOpening balance Purchases and sales Change in value Other changesClosing balance

At policyholders’ riskOpening balance Purchases and salesChange in value Other changesClosing balance

Total general

Of the closing balance is:• listed• unlisted

ReAl Assets

583,842-241,864

25,402-

367,380

98,711-8,606

17,618-

107,723

475,103

fixeD income investments

1,944,47862,425

175,781-200

2,182,484

71,054-11,644

7,191200

66,801

2,249,285

otheR investments

64,804-96,885

122,676-

90,595

51,257-4,4916,307

-53,073

143,668

totAl 2012

2,593,124-276,324323,859

-2002,640,459

221,022-24,74131,116

200227,597

2,868,056

2,609,117258,939

totAl 2011

2,593,124

221,022

2,814,146

With effect from the financial year 2012, the investments are presented according to the nature and risks of the respective investment positions. The comparative figures for 2011 with regard

to the above movements in the investments at the business’s own expense and at policyholders’ risk, as well as the breakdown into listed and unlisted, are not available.


The provision for life-insurance liabilities comprises the provision for periodic payments in payment and deferred in the amount of €1,058 million (2011: €1,033 million), the provision for end value guarantees in the amount of €1,128 million (2011: € 31 million), the provision for B policies in the amount of €162 million (2011: €170 million), the provision for unit-linked insurance policies in the amount of € 227 million (2011: €1,224 million) and the provision for risk insurance in the amount of €10 million (2011: nil).

The provision for non-life insurance relates to policies concluded for occupational disability in the amount of € 710 million (2011: €636 million) and sick pay in the amount of €13 million (2011: €14 million).

The provisions for these non-life insurance policies are based on the estimated amounts of the benefits ultimately payable in respect of all claims arising prior to the balance sheet date, regardless of whether or not they have already been reported at that date (incurred but not reported), along with the associated (future) administrative expenses.

Deferred taxes (10)The provision for deferred taxes chiefly stems from the difference between the fiscal valuation of the intangible fixed assets, being goodwill, client contracts and the insurance portfolio.

The withdrawals in 2012 stem from the uniform alignment of the fiscal amortisation period with the commercial amortisation period for intangible fixed assets, being the client contract that was created with the ‘deZAFication’ in 2008. In terms of the good-will arising from the ‘deZAFication’, the fiscal amortisation period has been partly brought in line with the commercial amortisation

period; the fiscal amortisation period has been partly extended relative to the commercial amortisation period. The uniform alignment leads to increased fiscal results, as a consequence of which the related deferred taxes (deferred liabilities) change to a (acute) tax liability and, as regards the portion of the goodwill with a different amortisation period, into a deferred tax asset.

Deferred taxes

Opening balance AllocationsWithdrawalsReleaseClosing balance

2012

69,461-

-33,938-5,604

29,919

2011

65,7589,307

--5,604

69,461


Opening balance Balance of allocations and releaseWithdrawalsClosing balance

PeRsonnel-RelAteD

PRovisions

17,96969,386-6,411

80,944

PRovision RestRuctuRinG/

inteGRAtion

4,37012,498-1,199

15,669

PRovision foR De-meRGeR

3,1025,960

-1,3107,752

otheRPRovisions

3151,900

-1,0891,126

totAl 2012

25,75689,744

-10,009105,491

totAl 2011

36,1711,062

-11,47725,756

Other (11)Movements in other provisions were as follows:

Of the total amount, € 6.6 million (2011: € 2.8 million) is expected to have a term of more than five years, while

€ 90.1 million is expected to be settled in 2013 (2011: €14.8 million).

Movements in the provision for insurance liabilities were as follows:

Opening balance Premium and other allocationsInterest addedProfit sharing / indexationUtilised for expensesUtilised for paymentsOther changes (expiry and surrender)Closing balance

At own exPense

2,886,457329,899228,541-16,715-18,616

-310,763-18,271

3,080,532

At Policy-holDeRs’ RisK

221,02210,89829,995

--1,195-3,707

-29,416227,597

totAl 2012

3,107,479340,797258,536-16,715-19,811

-314,470-47,687

3,308,129

totAl 2011

3,021,910356,991218,497

-1,806-15,838

-313,621-158,654

3,107,479

The APG Group's equity capital is part of the group equity and is explained in the notes to the balance sheet in the company

financial statements. Movements in the group equity were as follows:

Opening balanceGroup result after taxes Dividend paid out in cashEffect of acquisition minority interests subsidiariesOther changesTotal direct movementsClosing balance

‑6,467‑

‑355

2012

876,19231,621

-6,822900,991

‑52,711

1,144

2011

789,04533,292

53,855876,192

Provisions

Provisions for insurance liabilities (9)The insurance liabilities relate to life insurance and non-life insurance. Some of the non-life insurance liabilities are reinsured. The reinsurance portion of the provision for non-life insurance in

the amount of € 65.8 million (2011: € 80.5 million) is included under the receivables from reinsurance. The total liability is included under the provision for insurance liabilities.

Provision for life insurance• at own expense• at policyholders’ riskProvision for non-life insuranceTotal

31-12-2012

2,585,1292,357,532

227,597723,000

3,308,129

31-12-2011

2,457,8682,236,846

221,022649,611

3,107,479


Liabilities not shown on the face of the balance sheet

At the balance sheet date, liabilities under current rental contract commitments in the amount of € 197.4 million are outstanding (2011: € 197.8 million), of which € 19.1 million is due within one year (2011: € 23.0 million) and of which € 91.4 million is due between one and five years (2011: € 85.0 million).

The liabilities under long-term car lease contracts are € 14.3 million (2011: € 15.4 million), of which € 5.4 million is due within one year of the end of the financial year (2011: € 5.9 million) and of which € 8.8 million is due between one and five years (2011: € 9.4 million).Lease costs for the amount of € 7.6 million are reported for the year under review (2011: € 7.5 million). The lease company determined the lease liability on the basis of the depreciation plus a surcharge for fuel, insurance, maintenance and taxes.

The liabilities under maintenance and other contracts are € 25.5 million (2011: € 34.1 million) of which € 13.0 million (2011: € 13.9 million) is due within one year of the end of the financial year and € 12.5 million (2011: € 20.1 million) is due between one and five years.

In order to hedge the exchange rate risk on the financing in foreign currency of foreign subsidiaries, forward exchange contracts in US dollars were concluded with a current value at year-end 2012 of € 1.8 million positive. The remaining term is less than 1 year.

At the end of the reporting year, the group had entered into investment obligations in the amount of € 0.4 million (2011: € 1.6 million).

Specifically for the insurance business's investments in private equity and infrastructure, future commitments have been entered into for an amount of in total € 11.4 million (2011: € 15.4 million).

There are a number of fiscal units at the APG Group, specifically for corporate income and turnover tax. Within such a fiscal unit, the companies are jointly and severally responsible for each other's tax debts.

With regard to the performance results from investments made under old mandates at a former subsidiary, a right exists to still receive payments (carried interest notes) over the period 2013 up to and including 2015. The amount of the payments to be received is uncertain.


Premiums received in advanceOther amounts received in advanceAccounts payableHoliday pay and daysOther personnel-related liabilitiesInterest charges payable on long-term loans from affiliated partiesExternal hiringTaxes and social security premiumsCorporate income taxAmounts owed to affiliated partiesInvoices still to be receivedLiabilities in connection with pensionsOther liabilitiesTotal

31-12-2012

11,61011,43312,32824,31246,64515,846

4,48127,33545,49492,472

4,1552,918

24,668323,697

31-12-2011

22,47212,25017,61922,66747,48115,846

7,24620,13915,09882,163

4,0572,801

27,642297,481

The increase in corporate income tax is largely attributable to the uniform alignment of the fiscal amortisation period with the commercial amortisation period for intangible fixed assets, being the client contract and the goodwill that were created with the ‘deZAFication’ in 2008. The Taxes and Social security premiums include the crisis levy due in the amount of

€ 1.4 million pursuant to the Budget Agreement 2013 Tax Measures (Implementation) Act (Wet uitwerking fiscale maatregelen Begrotingsakkoord 2013).The current liabilities include items for a total amount of € 7.3 million (2011: € 9.2 million) with a remaining term of longer than one year.


furnished for an amount of €66.9 million in the form of cash as security for the fulfilment of interest rate obligations (2011: €38.3 million). Interest is paid on this security which is

reported as short-term money positions at banks, as part of the item cash.

Personnel‑related provisions This provision was formed for obligations following from long-term personnel remunerations (long-service awards), obligations arising from redundancies and (former) employment contracts (incapacity benefits (WAO), occupational disability, unemployment benefit (WW)) as well as a provision in connection with a compensation payment for the loss of support base, insurance-related loss and other charges related to the harmonisation of the pension schemes within the APG Group.

In 2012, a new APG Group Collective Labour Agreement (CLA) was concluded, incorporating a decision to harmonise the pension schemes within the APG Group. Pursuant to the APG Group CLA as well as the regulations set forth in article 4.6 of the Articles of Association of Stichting Pensioenfonds ABP and in Chapter 6 of the Administration Rules of Stichting Pensioenfonds ABP, APG Group is liable to make a payment as compensation for the loss of support base, insurance-related loss as well as other expenses arising from the settlement.

The choice made by the individual employees of APG Group with effect from 1 July 2013 will determine the composition and size of the group that will transfer to Personeelspensioenfonds APG (APG Personnel Pension Fund). The eventual choice made by the employees will determine the precise amount of the compensation payment that is to be provided. A provision for the expected impact of this so-called settlement agreement has been made in 2012 in the amount of € 57.5 million. Different scenario analyses have been carried out for the creation of this provision. In the scenarios and the calculations, account has been taken of age groups as well as current actuarial computation

rules as applied by Stichting Pensioenfonds ABP. The most likely sce-nario in APG Group’s estimation served as the basis for determining the amount of the provision at year-end 2012. A sensitivity analysis was carried out to underpin the scenario estimated by APG Group. If, at 1 July 2013,the choices made differ significantly from the esti-mated scenario that has served as the basis for the provision at year-end 2012, this might have material implications for the settlement of this provision in and the result for the 2013 financial year.

Provision for restructuring/integration This provision was formed for the costs of reorganisations related to the restructuring of automated processes and to cover the reorgani-sation costs. In 2012, an allocation in the amount of €13 million was made in connection with the change programme at the insurance business. This restructuring provision is formed when a detailed plan of the reorganisation has been formalised and this has been announced to those affected.

Provision for separation of administrative organisations This provision includes the unavoidable costs for temporary, partial vacancy of the Basisweg office building, taking into account the likelihood of subletting (2012: nil). In 2011, an amended lease was signed (expiry date 31 December 2020). Following an update of the provision during 2012, an amount of € 6.7 million was allocated from the result. This provision was formed for the period until the end of 2020.

Other provisions The other provisions concern a provision for major maintenance and an onerous contract.

Of the closing balance, an amount of € 542 million relates to financing by affiliated parties (2011: € 542 million). The total amount has a term of more than five years. There is a possibility of making early repayment of a loan in the amount of € 501 million. The interest rates range from 2.11% to 7.25% per annum (2011: 2.27% to 7.25% per annum). No security has been furnished.

Interest rate swapIn order to hedge the interest rate risk on the long-term liabilities, an interest rate swap was concluded as a result of which the variable

interest rate charges (Euribor + 50 basis points) on the 10-year loan of € 501 million have been replaced by a fixed interest rate of 3.80 per cent. The interest rate swap has a term that runs to 28 February 2018 and its conditions are the same as those of the loan, or the hedged position. The interest rate swap is valued at cost price with the application of cost price hedge accounting. The balance sheet value of the swap therefore remains zero throughout the entire term that the interest rate swap is effective as a hedge instrument. Since the market value of this swap is €66.8 million negative at the balance sheet date (2011: €44.5 million negative), security has been


Opening balance Draw downsRepaymentsClosing balance

2012

552,745--

552,745

2011

561,755500

-9,510552,745


'JAN

hAs

hel

peD

us

mAs

ter

ou

r D

eliV

ery

sCh

eDu

les'

'Part of putting work out to contract is ensuring you purchase the stones

for the job. One of the things you have to specify is the bond in which

you want the stones delivered, even though you may not yet know which

road paviour will be assigned to the job. That demands considerable

flexibility from us as well as the supplier. Jan prepares the delivery

schedules and has always proved himself very flexible in that respect.

He has been of enormous assistance to us in mastering the delivery

schedules. Our experiences have been very positive in that regard!'

'Jan has helped us master

our delivery schedules'

iNterView

Peter Blaauwehand, civil engineering

project coordinator for the Municipality of Winterswijk,

about Jan van der Drift, sales employee at

brick manufacturer Wienerberger


The increase in other personnel costs is mainly attributable to the costs related to the personnel-related provisions made and the restructuring provision (as explained under point 11 other provisions).

Employee pension schemeThe pension scheme of a large number of employees is adminis-tered by Stichting Pensioenfonds ABP. The entitlements are accrued based on average pay and the number of years of service, with conditional indexation. The pension scheme for the majority

of the remaining employees is administered by Stichting Personeels pensioenfonds Cordares (now: Personeels pensioen-fonds APG). The entitlements are accrued based on average pay and the number of years of service, with conditional indexation. The APG Group has no obligation to make additional contri-butions in the event of shortfalls at these pension funds other than the payment of future premiums. Based on the foregoing, the company can suffice by reporting the premium as a cost.

Specific schemes apply for most employees abroad.

Personnel costs (21)

Wages and salariesPension chargesSocial security chargesOther personnel costsTotal

2012

286,32840,30630,681

120,977478,292

2011

280,52635,42325,16845,411

386,528


Other operating income (17)This includes realised income other than the income arising directly from the administration contracts with pension funds and asset management for third parties. This item also includes the commissions and profit sharing received from reinsurers.

Operating expenses

Change in provisions for insurance liabilities (18)For notes to this item, see the overview of movements in the provision for insurance liabilities in the notes to the balance sheet (9).

Payments (19)This includes the payments made to policyholders. This involves sums to be paid out for life insurance in the amount of € 316.7 million (2011: € 313.5 million) and non-life insurance in the amount of € 41.4 million (2011: € 39.5 million) less reinsured life insurance amounts totalling € 6.2 million (2011: € 8.6 million) and non-life insurance in the amount of € 5.2 million (2011: € 5.4 million).

Costs of outsourced work and other external costs (20)This item includes the costs of hiring external personnel, auditor's costs and consultancy costs.

Notes to the CoNsoliDAteD profit AND loss ACCouNt


Insurance premiums (14)

Life insuranceOwn account and riskPolicyholders’ risk

Non-life insuranceOwn account and riskPolicyholders’ risk

Total

Investment results (15)

DividendsInterestChanges in value

Result from financial transactionsTotal

For own accountFor policyholders’ riskResult from financial transactionsTotal

Income from services to third parties (16)

Pension managementAsset managementTotal

ReAl Assets

26,165-

16,85543,020

fixeD income investments

-103,307

79,665182,972

otheR investments

-7,065

121,918128,983

2012

236,05712,664

248,721

110,223-

110,223358,944

2012

26,165110,372218,438354,975

-6,605348,370

323,85931,116‑6,605

348,370

2012

277,017369,243646,260

2011

254,75614,933

269,689

106,446-

106,446376,135

2011

95,463-1,774

93,689

105,003‑9,540‑1,774

93,689

2011

268,762359,850628,612

Net turnover

The comparative figures for 2011 with regard to the above break-down of the investment results into dividends, interest and changes in value are not available.

The result from financial transactions comprises, among other things, costs relating to the purchase and sale of investments as well as foreign exchange gains/losses.


Executive Board

DM SluimersABJ ten DammeM BoerekampMs AGZ KemnaAWIM van der Wurff

immeDiAte sAlARies

459,02722,071

340,467522,329381,116

PeRsonnel costs

79,2294,272

62,83991,69139,613

Pension costs

66,6294,224

49,83763,48565,441

totAl 2012

604,88530,567

453,143677,505486,170

totAl 2011

610,193486,472

-691,131494,098

With effect from 1 January 2012, the remuneration of the members of the Executive Board consists solely of immediate salaries. With effect from 1 April 2012, the salaries were raised in line with existing policy by the agreed 1.5% increase under the Collective Labour Agreement from that date. The long-term incentive scheme (in the form of deferred salaries) was abolished in 2012, partly in recognition of the applicable principles for controlled remunera-tion. This resulted in adjustment of the immediate salaries.

The column Personnel costs includes not only employer contribu-tions but also the holiday pay and end-of-year bonus. The end-of-year bonus amounts to 7.45 per cent over the salary received in 2012. As laid down in the employment agreement, the end-of-year bonus of AWIM van der Wurff is integrated in the immediate sala-ry. This explains the relatively low personnel costs in comparison to the other members of the Executive Board. No loans, advances or guarantees have been provided to current or former members of the Executive or Supervisory Board.

During the year under review, P.J.W.G. Kok occupied the position of CFRO on an interim basis. The associated costs amount to € 335,033. Between September 1, 2012, and January 31, 2013, the CEO looked after the CFRO´s portfolio. Since February 1, 2013, Ms P.H.M. Hofsté has occupied the position of CFRO.

In 2013, the so-called crisis levy in the amount of € 415,000 will be remitted over the remuneration paid during 2012.

Amortisation and depreciation (22)

Amortisation of intangible fixed assetsAmortisation due to impairmentDepreciation of tangible fixed assets

Impairments of current assets (23)The impairments in the amount of € 1 million over 2012 concern a write-down to zero on a previously provided loan. The impair-ments in the amount of € 5.9 million over 2011 concern an impairment of an interest in a limited partnership of a subsidiary and are mainly due to negative developments on the German real estate market.

2012

83,1011,6948,877

93,672

2011

83,8061,0109,183

93,999


Supervisory Board

LC Brinkman, ChairmanGMML Verhofstadt, Vice-ChairmanCW van BoetzelaerMs HCJ van den BurgS van KeulenALM NelissenMs CM van Praag P RosenmöllerKI van SplunderMs EL Snoeij

fixeD comPensAtion

40,00035,00030,00030,00030,00030,00030,00030,00030,00020,417

comPensA tion foR committee

membeRshiP

5,0005,0005,0005,0045,0005,0005,0005,0005,0003,403

emPloyeR’s chARGes

AnD tAxes

8,7752,8402,4852,4852,4856,8252,4856,8252,485

633

totAl 2012

53,77542,84037,48537,48937,48541,82537,48541,82537,48524,453

totAl 2011

53,55042,59137,59137,59137,59141,65037,59141,65037,591

-

Management Board and staffsOperating units• Administrative business• Insurance businessSupporting unitsTotal

2012

322

1,933460

1,4394,154

2011

375

1,970483

1,3914,219

The employees of the administrative business work in the areas of pension management and asset management.In 2012, an average of 128 employees was employed abroad (2011: 126). These employees all work in the administrative business.

Remuneration of Supervisory Board members and Executive Board members (in euros) The remuneration of Supervisory Board members and Executive Board members is determined by the General Meeting of Shareholders.

Number of employeesThe group employed an average of 4,154 people in 2012 (2011: 4,219), divided into the following segments.


The cash flow statement has been prepared in accordance with the direct method. The change in cash from investments as reported under the cash flow from operational activities has been balanced out. For the composition of cash, see the notes to the consolidated balance sheet.

Interest on cash or current account positions is included under the interest received or paid. These items are considered as operational activities and are therefore accounted for as such.

The investments relate to investments in furnishings and inventory, data-processing equipment and software.

The cash flow from financing activities includes several settlements with Stichting Pensioenfonds ABP.

Notes to the CoNsoliDAteD CAsh flow stAtemeNt

other Notes

Transactions with affiliated partiesTransactions between affiliated parties take place under market conditions.

Some of the office buildings are leased from Stichting Pensioen-fonds ABP under market conditions. The total contract duration is 12 years and 8 months, commencing from 1 January 2008. The costs amounted to € 7.5 million in the year under review (2011: € 10.9 million) and will amount to € 7.9 million for 2013. The future liabilities arising from this contractual relationship are included under the lease obligations entered into as included in the category or liabilities not shown on the face of the balance sheet.

The costs for the adaptation of the ICT infrastructure, positioning of the brand name and reorganisation that APG Algemene Pensioen Groep NV has incurred in connection with the separation of the administrative organisation from the pension fund are for the account of Stichting Pensioenfonds ABP insofar as these items do not exceed the advance received in 2008. The amount received relates to costs of multi-year programmes. In the year under review, an amount of € 0.8 million (2011: € 2.1 million) was spent on these purposes.

Stichting Pensioenfonds ABP, APG Groep NV, Loyalis NV and its subsidiaries, APG Algemene Pensioen Groep NV and its subsidiary APG Investment Services NV together form a fiscal unit for turnover tax. This means that these legal entities are jointly and severally liable for each other's turnover tax liabilities. Cordares Holding NV, a subsidiary of APG Algemene Pensioen Groep NV,

together with its subsidiaries (excluding Inotime BV and Inovita BV) together similarly form a fiscal unit for turnover tax. With regard to corporate income tax, APG Groep NV forms a fiscal unit together with APG Deelnemingen NV, APG Algemene Pensioen Groep NV, APG Investment Services NV and with Cordares Holding NV and its subsidiaries (excluding Inotime BV and Inovita BV). The corporate income tax of the fiscal unit is attributed to each of the companies belonging to the fiscal unit according to each company's share in the total corporate income tax.

Auditor’s feesIn 2012, the costs of PricewaterhouseCoopers, reported under 'Cost of outsourced work and other external costs', amounted to € 1.2 million for audit services (2011: € 1.5 million), € 0.5 million for audit-related services (services in connection with ISAE 3402) (2011: € 0.4 million), € 0.3 million for tax advice (2011: € 0.4 million) and € 1.7 million for other services (2011: € 0.2 million).

In 2012, PwC charged an additional € 0.9 million in the Netherlands for audit services (2011: € 0.8 million) for the certification of reporting to clients of APG Group in the context of the services provided by APG Group.


The change in the taxes during 2012 relative to 2011 is mainly due to the positive development in the results at the insurance busi-ness. Alongside the change at the insurance business, the change in deferred taxes stems from the uniform alignment of the fiscal amortization period with the commercial amortization period for intangible fixed assets, being the client contract and the goodwill that were created with the deZAFication in 2008.The effective tax rate deviates 3.0 percentage points from the applicable tax rate of 25.0 per cent. This is due to different foreign tax rates and differences between the commercial and fiscal result.

Result from participations (27)The result from participations for 2012 concerns the share in the result of Pensional (51%).The result from participations for 2011 concerns a net sales result in the amount of € 26.6 million from the sales transaction of the participation AlpInvest Partners NV on July 1, 2011. In this transaction, the shares of AlpInvest Partners NV were sold to The Carlyle Group and the management of AlpInvest Partners NV.

Taxes (26)The taxes on the consolidated profit and loss account can be specified as follows:

Of the interest charges and similar costs reported, € 19.0 million (2011: € 19.0 million) concerns relations with affiliated parties. The item changes in value in financial fixed assets excludes the result of currency hedging; this result is accounted for in the item

to which it relates, specifically the operating expenses. Interest on cash or current account positions is included under the interest received or paid.

Other operating costs (24)

Accommodation costsAutomation costsOther

Financial income and expenses (25)

Interest income and similar incomeInterest charges and similar costs

2012

32,45544,39149,297

126,143

2011

37,24141,28036,063

114,584

2012

5,813-22,114-16,301

2011

8,325-22,786-14,461

The item Other includes postage charges, office supplies, telephone charges and other tangible expenses.

Currency differences in the amount of € -0.5 million (2011: € 0.3 million) are included in the item Other.

Current period• current year• adjustments to previous yearsChange in deferred taxes• temporary differences

Effective tax burden as %

2012

-8,5432,061

-2,522-9,004

22.0%

2011

-12,221-

12,24019

-6.1%

82 83APG GroeP NV 2012 AnnuAl RepoRt fiNANCiAl stAtemeNts

Segmentation overview (in thousands of euros)

Balance sheet

Fixed assetsInvestmentsCurrent assetsTotal assets

Equity capitalInsurance liabilitiesOther provisionsLong-term liabilitiesShort-term liabilitiesTotal liabilities

Profit and loss account

Net turnoverOperating expensesFinancial income and expenses

Result from ordinary activities Taxes Result from participations

Group result after taxes

ADministRAtive business

720,257-

701,0911,421,348

537,363-

87,152500,754296,079

1,421,348

insuRAnce business

38,8692,868,056

747,4093,654,334

271,4003,308,129

24,345-

50,4603,654,334

APG GRouPcomPAny

901,716-

116,8111,018,527

900,991-

23,91351,99141,632

1,018,527

eliminAtions

-808,763-

-64,474-873,237

-808,763---

-64,474-873,237

totAl31-12-2012

852,0792,868,0561,500,8375,220,972

900,9913,308,129

135,410552,745323,697

5,220,972

ADministRAtive business

718,701-692,378

-15,210

11,113-3,251

-

7,862

insuRAnce business

742,025-681,290

1,609

62,344-13,924

-

48,420

APG GRouPcomPAny

6,513-36,252

-2,700

-32,4398,171

55,889

31,621

eliminAtions

-57,98457,984

-

--

-56,282

-56,282

totAl 2012

1,409,255-1,351,936

-16,301

41,018-9,004

-393

31,621

The categorisation of the segmentation overview is in accordance with the legal structure of APG Group.


'he

is K

eeN

to

Get

to

KN

ow

us

All'

'There have been many changes at Woonstad Rotterdam since January 1,

2013, and in addition we have all been assigned a new concierge.

That wasn’t easy, neither for us nor Mr Kabitzsch himself. That explains

why we were a bit reticent at first. But it has all worked out well.

I am secretary of our recreation room and so have more contact with him

than most other residents. You can easily discuss things with him, he is

kind and he does his best to get to know us all. I think that is important.'

'He is keen to get to know

us all'

iNterView

Ria Meijer, resident, about Klaus Kabitzsch,

concierge with the Woonstad Rotterdam housing association


CompANy profit AND loss ACCouNt

2012


Result participations after taxesOther result after taxesResult after taxes

2012

55,889-24,26831,621

2011

56,249-22,95733,292

ACCouNtiNG poliCies

For an explanation of the accounting policies used, reference is made to the consolidated financial statements.


Assets

Fixed assetsIntangible fixed assets (1)Financial fixed assets (2)

Current assetsReceivables, prepayments and accrued income (3)Cash (4)

totAl Assets

liAbilities

Equity capital (5)Paid-up and called-up share capitalShare premiumStatutory reservesOther reservesResult for the financial year

Provisions (6)



totAl liAbilities

31-12-2012

91,816809,900901,716

52,27164,540

116,811

1,018,527

31-12-2012

705,297130,414

41,679-8,020

31,621900,991

23,913

51,991

41,632

1,018,527

31-12-2011

109,586806,205915,791

8,90136,78745,688

961,479

31-12-2011

705,297130,414

34,014-26,82533,292

876,192

28,792

51,991

4,504

961,479

CompANy fiNANCiAl stAtemeNts

CompANy bAlANCe sheet As At DeCember 31, 2012

(before profit appropriation)in thousands of euros


Current assets

The receivables, prepayments and accrued income mainly relate to claims on group companies.

Equity capital (5)

Paid-up and called-up share capitalShare premiumStatutory reservesOther reservesResult for the financial year

31-12-2012

705,297130,414

41,679-8,020

31,621900,991

31-12-2011

705,297130,414

34,014-26,82533,292

876,192

Cash (4)

Bank balances in current account DepositsClosing balance

31-12-2012

19,54045,00064,540

31-12-2011

2,78734,00036,787

Receivables, prepayments and accrued income (3)

Receivables from group companiesCorporate income taxOther receivables and accrued incomeTotal

31-12-2012

50,575-

1,69652,271

31-12-2011

5,8492,562

4908,901

The movements in equity capital are shown in the overview below:

Opening balanceChanges due to profit appropriationSupplement to statutory reservesDividend paid outResult for the financial yearOther changesClosing balance

PAiD-uP AnD cAlleD-uP

shARe cAPitAl

705,297-----

705,297

shARe PRemium

130,414-----

130,414

stAtutoRy ReseRves

34,014-

8,090--

-42541,679

otheR ReseRves

-26,82533,292-8,090-6,467

-70

-8,020

Result foR the finAnciAl

yeAR

33,292-33,292

--

31,621-

31,621


Notes to the CompANy fiNANCiAl stAtemeNts


Fixed assets

Intangible fixed assets (1)The intangible fixed assets include the insurance portfolio identified with the acquisition of a capital interest.

The movements in this item were as follows:

The goodwill and the client contract pertaining to Cordares Holding were transferred in 2011 from APG Group to APG Algemene Pensioen Groep NV in connection with the financial restructuring.

Financial fixed assets (2)The item financial fixed assets concerns participations. The movements in this item were as follows:

Opening balanceInvestmentsDisposalsResult for the financial yearDividend paid outInterim dividend paid outOther changesClosing balance

2012

806,20545

-55,889

-51,884-

-355809,900

2011

773,43339,696

-17,19456,249

-17,124-30,000

1,145806,205

Opening balance Investments/disposalsAmortizationImpairmentClosing balance

Cumulative purchase valueCumulative amortization and impairmentBook value

Amortization rate

2012

109,586-

-17,770-

91,816

177,707-85,89191,816

10%

2011

149,960-20,392-19,982

-109,586

177,707-68,121

109,586

10%

The investments concern the incorporation of APG Deelnemingen NV.

90 91APG GroeP NV 2012 AnnuAl RepoRt fiNANCiAl stAtemeNts


Accounts payableDebts to group companiesTaxes and social security premiumsCorporate income taxOther liabilities

31-12-2012

1094,837

38735,377

92241,632

31-12-2011

6202,332

120-

1,4324,504

The current liabilities and accrued liabilities do not include any items with a remaining term of more than one year.

Of the closing balance, an amount of € 41.0 million relates to financing by Stichting Sociaal Fonds Bouwnijverheid (2011: € 41.0 million). The total amount of € 52.0 million has a term of more than five years. There are no interim repayments. The interest rates of these loans range from 5.40 per cent to 7.25 per cent (2011: 5.40 per cent to 7.25 per cent). No security has been furnished.

The repayment in 2011 concerns, on the one hand, the repayment in full of a loan of € 42.0 million to APG Algemene Pensioen Groep NV. On the other hand, a repayment for an amount of € 9.5 million took place on the loan of Stichting Sociaal Fonds Bouw nijverheid in connection with the financial restructuring of APG Group. Furthermore, in connection with the financial restructuring, a new loan for an amount of € 0.5 million was concluded with Stichting Pensioen fonds voor de Woningcorporaties [Pension Fund for the Housing Corporations].

Remuneration of Executive Board membersFor an explanation of the remuneration of Executive Board members, see the consolidated financial statements.

Paid‑up and called‑up share capitalThe paid-up and called-up share capital is the capital subscribed upon incorporation of the company consisting of 650,000,000 shares, each with a nominal value of € 1. Furthermore, in 2011, upon the acquisition of the minority interests in APG and Loyalis 55,297,170 new shares were issued, each with a nominal value of € 1.

Share premiumThe share premium in the amount of € 51 million, paid upon incorporation, capital contributions at a subsidiary in the amount of € 63.5 million, and the revaluation of a subsidiary at fair value in the amount of € 82 million when brought into the company were included as share premium in previous years. As a result of the shareholder's exercise of its right of recourse in 2010, the APG Group paid the shareholder € 63.5 million from the share premi-um reserve. The changes in the share premium reserve in 2011 (on balance € -2.6 million) arise from the acquisition of the minority interests in APG Algemene Pensioen Groep NV and Loyalis NV.

Statutory and other reserves The statutory and other reserves include direct changes in capital related to the acquisition and reallocation of subsidiaries from previous years in the amount of € 23.2 million. The statutory reserve also includes a reserve for participations in the amount of € 17.6 million which was formed for the unrealised increases in value of unlisted investments of subsidiaries, as well as a reserve for conversion differences in the amount of € 0.7 million related to the foreign participations and a reserve for capitalised software at a subsidiary in the amount of € 0.2 million. The changes in the statutory reserve for conversion differences is reported under other changes. The reserve for participations was formed at the expense of the other reserves.

Result for the financial yearThis includes the result for the year under review.

This concerns the provision for deferred taxes over the value of the insurance portfolio that is included under intangible fixed assets.

The personnel-related provisions at year-end 2012 relate to a provision in connection with a compensation payment for the loss of support base, insurance-related loss as well as other charges related to the harmonisation of the pension schemes within the APG Group. In 2012, a new APG Group Collective Labour Agreement (CLA) was concluded, incorporating a decision to harmonise the pension schemes within the APG Group. Pursuant to the APG Group

CLA as well as the regulations set forth in article 4.6 of the Articles of Association of Stichting Pensioenfonds ABP and in Chapter 6 of the Administration Rules of Stichting Pensioenfonds ABP, APG Group is liable to make a payment as compensation for the loss of support base, insurance-related loss as well as other expenses arising from the settlement. The total amount of the personnel-related provisions is expected to be settled in full during 2013 (2011: likewise )


Opening balanceBenefitsRepaymentsClosing balance

2012

51,991--

51,991

2011

103,001500

-51,51051,991

Provisions (6)

Opening balance Balance of allocations and releaseWithdrawalsClosing balance

DefeRReD

tAxes

27,945-4,532

-23,413

PeRsonnel-

RelAteD

PRovisions

847-347

-500

totAl 2012

28,792-4,879

-23,913

totAl 2011

38,438-9,578

-6828,792

93APG GroeP NV 2012 AnnuAl RepoRt92 fiNANCiAl stAtemeNts

Supervisory Board

LC Brinkman, ChairmanGMML Verhofstadt, Vice‑ChairmanCW van BoetzelaerMs HC van den BurgALM Nelissen CM van PraagP RosenmöllerMs EL Snoeij Ms KI van Splunder


Executive Board

DM Sluimers, ChairmanM BoerekampMs PHM HofstéMs AGZ KemnaAWIM van der Wurff

Capital interests not included in the consolidation:

ReGisteReD office

Amsterdam

nAme

APG – ABN AMRO Pensioeninstelling NV (capital interest 51%, held by APG Groep NV)

nAme

APG Algemene Pensioen Groep NV• APG Investment Services NV• APG Asset Management US Inc • Fairfield Residential I, LLC • Fairfield Residential II, LLC• APG Investments Asia Ltd• Cordares Holding NV • Cordares Fintus BV • APG Pensioenbeheer BV • Cordares Vastgoed BV • Cordares Basisweg Beheer V BV • Cordares Diensten BV • Inotime BV • Inovita BVLoyalis NV• Loyalis Leven NV • Loyalis Leven VRF I BV* • Loyalis Leven VRF II BV* • Loyalis Schade NV • Loyalis Schade VRF I BV* • Loyalis Schade VRF II BV*• Loyalis Diensten BV• Loyalis Maatwerkadministraties BV• Loyalis Kennis en Consult BV• Loyalis Sparen & Beleggen NV• Cordares Advies BVAPG Deelnemingen NV

ReGisteReD office

HeerlenAmsterdamDelawareDelawareDelawareHong KongAmsterdamAmsterdamAmsterdamAmsterdamAmsterdamAmsterdamCapelle aan den IJsselCapelle aan den IJsselHeerlenHeerlenHeerlenHeerlenHeerlenHeerlenHeerlenHeerlenHeerlenHeerlenHeerlenAmsterdamHeerlen

List of capital interestsThe following capital interests (100% interests) are included in the consolidation.

* Due to the restructuring at Vesteda, since 1 February 2012, Loyalis Leven NV and Loyalis Schade NV have held the participa-tions in Vesteda via a dual BV structure. No change is envisaged in a material sense.

The principal reasons for the restructuring are greater trans-parency of the structure and simplification of the process of entry and exit by participants, thereby realising an improvement in the liquidity of the fund.


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'The restoration of our church steeple went precisely as we wished.

During the tender phase it was already clear that Glenn Pronk and our

parish were on the same wavelength. We were immediately struck by his

ability to think along. Our parishioners’ council is made up entirely of

volunteers, who have little understanding of building and restoring work.

It is reassuring then to work with someone you know you can really trust.

The agreements made, about construction costs and construction period,

were all honoured. And our church steeple stands tall and proud again.'

'Our church steeple

stands tall and proud again'

iNterView

Margo Birkhoff, on behalf of the parishioners

council of the parish of H.H. Cosmas en Damianus

in Abcoude, about contractor Glenn Pronk

of Pronk Bouw in Warmenhuizen

96 97APG GroeP NV 2012 AnnuAl RepoRt other iNformAtioN

otheR infoRmAtion


profit AppropriAtioN sCheme uNDer the ArtiCles

of AssoCiAtioN

The profit appropriation takes place in accordance with article 36 of the Articles of Association. This article stipulates that APG Groep N.V. can only distribute profit insofar as the equity capital exceeds the paid-up and called-up portion of its capital, increased by the reserves that must be maintained pursuant to law.

proposAl for the AppropriAtioN

of the result

A proposal will be submitted to the General Meeting of Shareholders that the result for the financial year in the amount of € 31.6 million be added to the other reserves.

A proposal will be submitted to the General Meeting of Stockholders not to pay out any dividend in connection with the proposed recapitalisation.

eVeNts After the bAlANCe sheet DAte

Organisational and legal restructuring of APG Groep NVAn organisational and legal restructuring of APG Groep NV took effect from 1 January 2013. The aim of the restructur-ing is to streamline the organisational and legal responsibilities within the group structure. The transactions associat-ed with the restructuring were effected within the group and were processed at book value between the group companies. The transactions do not result in any change in the group equity. With effect from January 1, 2013, Inovita BV, Inotime BV and Cordares Vastgoed BV were reallo-cated in terms of their legal status from APG Algemene Pensioen Groep NV to APG Deelnemingen NV, an entity newly incor-porated in 2012. With effect from 1 January 2013, Cordares Diensten BV was reallocated in terms of its legal status

from APG Algemene Pensioen Groep NV to APG Groep NV and was renamed APG Diensten BV. With effect from 1 January 2013, the ICT activities of APG Algemene Pensioen Groep NV were transferred to APG Diensten BV. With effect from 1 January 2013, APG Pensioenbeheer BV (which was founded in 2012 from the legal merger between Cordares Pensioen BV and Cordares Pensioendiensten BV) was reallocated in terms of its legal status directly under APG Algemene Pensioen Groep NV.

Harmonisation of pension schemesIn 2012, a new APG Group Collective Labour Agreement (CLA) was concluded, incorporating a decision to harmonise the pension schemes within the APG Group. Employees of APG Groep NV, APG Algemene Pensioen Groep NV, APG Investment Services NV and Loyalis NV may choose from 1 July 2013, to switch from Stichting Pensioenfonds ABP to Personeelspensioenfonds APG (APG Personnel Pension Fund) for their future pension accrual. Pursuant to the APG Group CLA as well as the regulations set forth in article 4.6 of the Articles of Association of Stichting Pensioenfonds ABP and in Chapter 6 of the Administra-tion Rules of Stichting Pensioenfonds ABP, APG Group is liable to make a payment as compensation for the loss of support base, insurance-related loss as well as other charges arising from the switch. A provi-sion for the expected impact of this so-called settlement agreement has been made in 2012.

The choice made by the individual employees of APG Group with effect from 1 July 2013 will determine the composi-tion and size of the group that will trans-fer to Personeelspensioenfonds APG. The eventual choice made by the employ-ees will determine the precise amount of the compensation that has to be paid. A provision for the expected impact of this so-called settlement agreement has been made in 2012.Different scenario analyses have been carried out for the creation of this provision. In the scenarios and the

calculations, account has been taken of age groups as well as current actuarial computation rules as applied by Stichting Pensioenfonds ABP. The most likely scenario in APG Group’s estimation served as the basis for determining the amount of the provision at year-end 2012. A sensitivity analysis was carried out to underpin the scenario estimated by APG Group. If, at 1 July 2013,the choices made differ significantly from the estimated scenario that has served as the basis for the provision at year-end 2012, this might have material implications for the settlement of this provision in and the result for the 2013 financial year.

RecapitalisationIn 2012, APG Algemene Pensioen Groep NV applied to the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten / AFM) for a Markets in Financial Instruments Directive (MiFID) licence to provide investment services. The criteria for awarding the licence include an assessment of the capitalisation of APG Algemene Pensioen Groep NV and APG Groep NV. During 2013, APG Algemene Pensioen Groep NV and APG Groep NV have consulted with the shareholders Stichting Pensioenfonds ABP and Stichting Sociaal Fonds Bouw-nijverheid with a view to safeguarding the required minimum qualifying capital in accordance with the definitions in the Dutch Financial Supervision Act by year-end 2013 at the latest. Stichting Pensioen-fonds ABP has meanwhile signed a letter of intent in this regard.

other iNformAtioN

iNDepeNDeNt AuDitor's

report

To: the General Meeting of Shareholders of APG Groep N.V.

Report on the financial statementsWe have audited the accompanying finan-cial statements 2012 of APG Groep N.V., Heerlen, which comprise the consolidated and company balance sheet as at 31 December 2012, the consolidated and company profit and loss account for the year then ended and the notes, compris-ing a summary of accounting policies and other explanatory information.

The Executive Board’s responsibilityThe Executive Board is responsible for the preparation and fair presentation of these financial statements and for the prepara-tion of the report of the Executive Board, both in accordance with Part 9 of Book 2 of the Dutch Civil Code. Further more, the Executive Board is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, includ-ing the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control rele-vant to the company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opin-ion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasona-bleness of accounting estimates made by the Executive Board, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements give a true and fair view of the financial position of APG Groep N.V. as at 31 December 2012, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirementsPursuant to the legal requirement under Section 2: 393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the report of the Executive Board, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2: 392 sub 1 at b-h has been annexed. Further we report that the report of the Executive Board, to the extent we can assess, is consistent with the financial statements as required by Section 2: 391 sub 4 of the Dutch Civil Code.

Rotterdam, April 25, 2013PricewaterhouseCoopers Accountants N.V.

Originally signed bydrs. S. Barendregt‑Roojers RA


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'Roy started his career in logistics before switching to purchasing.

He recently organised a fantastic promotion of alstroemerias,

commonly called the Peruvian lily. For our wholesale customers he put

together a special alstroemeria package, with several new varieties and

support material to enable the wholesale trade to rekindle their

customers’ interest in this flower. We were very pleased about this,

in particular because the cooperation between purchasing and logistics

went so smoothly. The fact that Roy has his roots in logistics,

as it were, certainly made a contribution in that regard.'

'Excellent cooperation

between purchasing and logistics'

iNterView

Richard de Munk, logistics manager at OZ Export in

De Kwakel, about Roy van der Voort, purchaser at OZ Export


Committee memberships: chairman of the audit committee

CM van Praag Principal office:• professor of

Entrepreneurship and Organisation, Faculty of Economics and Business Administration, University of Amsterdam

• director of the Amsterdam Center for Entrepreneurship (ACE)

Other relevant offices:• crown-appointed member

of the Social and Economic Council

• member of the Centrale Plancommissie (Supervisory Body of the Centraal Planbureau)

Nationality: DutchFirst appointment: October 1, 2008 Committee memberships: member of the remuneration committee

P Rosenmöller Principal office: producer and presenter for IKON televisionOther relevant offices:• member of the supervisory

board of Nederlandse Spoorwegen

• member of the supervisory board of CSU

• chairman of the Steering Group Convenant Gezond Gewicht

• vice-chairman of the Vereniging het Nederlandse Rode Kruis

Nationality: DutchFirst appointment: September 1, 2008 Committee memberships: member of the remuneration committee

Ms EL Snoeij Principal office: noneOther relevant offices:• member of the Commissie

advies- en verwijspunt Klokkenluiders

• member of the supervisory board of HIVOS

• member of the jury of the Ien Dales Leerstoel

• member of the jury of the Veilige Taak Award

• member of Innovatietafel of PGGM

• member of the supervisory board of Centraal Orgaan Opvang Asielzoekers (COA)

• member of review committee of Pno Media pension fund

Nationality: DutchFirst appointment: April 26, 2012Committee memberships: member of the remuneration committee

KI van Splunder Principal office: noneOther relevant offices:• member of the supervisory

board of CNV Jongerenorganisatie

• board member of the Nationaal Register (Commissarissen en Toezichthouders)

• chairman of the Protestants Christelijke Ouderen Bond (PCOB)

Nationality: DutchFirst appointment: April 1, 2009Committee memberships: member of the remuneration committee

members of the exeCutiVe boArD

DM SluimersPrincipal office: Chairman of the Executive BoardOther relevant offices:• member of the Board of

Trustees IFRS Foundation• member of the supervisory

board of Atradius NV• member of Curatorium

Rijksacademie voor Financiën en Economie

• member of the board of management of Holland Financial Centre

• member of Advisory Board Netspar

Nationality: DutchFirst appointment: February 29, 2008

M BoerekampPrincipal office: member of the Executive BoardOther relevant offices:• member of SBE International

Advisory Board Nationality: Dutch First appointment: February 1, 2012

Ms PHM HofstéPrincipal office: member of the Executive BoardOther relevant offices: • member of the supervisory

board of BNG BankNationality: Dutch First appointment: February 1, 2013

Ms AGZ KemnaPrincipal office: member of the Executive BoardOther relevant offices:• member of the supervisory

board of Leiden University• chairman of the supervisory

board of Yellow & Blue• member of the board

of Duisenberg School of Finance

Nationality: DutchFirst appointment: November 1, 2009

AWIM van der WurffPrincipal office: member of the Executive BoardOther relevant offices:• member of the pension

committee at VNO-NCW• member of the advisory

board of the Vereniging van Bedrijfstakpensioenfondsen

• employer chairman of the Stichting Personeelspensioenfonds Cordares

• chairman of the Stichting SAV€

• member of the board of Werkgeversvereniging Alliates; now dissolved

Nationality: DutchFirst appointment: September 1, 2008

persoNAl DetAils

persoNAl DetAils

Below are the personal details of the members of the Supervisory Board and the Executive Board, specifying their principal office and other relevant offices.

members of the superVisory boArD

LC Brinkman, Chairman Principal office:• chairman of Bouwend

NederlandOther relevant offices:• vice-chairman of VNO-NCW• president of the supervisory

board of RABO-Vastgoed Group

• member of the supervisory board of Van Nieuwpoort (Sand, Gravel and Concrete) Group

• member of the supervisory board of BMC Policy Advice and Management Consultants for the public sector

• member of the supervisory board of Movares Group (Holland Rail Consult)

• president of the supervisory board of Cultuurfonds Triodos Bank

Nationality: DutchFirst appointment: February 29, 2008 Committee memberships: chairman of the remuneration committee

GMML Verhofstadt, Vice‑ChairmanPrincipal office:• Minister of State - Belgium• chairman of the ALDE group

in the European ParliamentOther relevant offices:• member of the Board of

Directors and the remunera-tion committee of Exmar

• member of the Board of Directors of Sofina

Nationality: BelgianFirst appointment: April 17, 2008 Committee memberships: member of the remuneration committee

CW van Boetzelaer Principal office: noneOther relevant offices: • chairman of the Trust/

Houdster Maatschappijen Compass (Bata) Group

• member of the supervisory board of Bank Ten Cate & Co

• member of the Board of Directors of Den Treek Henschoten B.V.

• various positions in the non-profit sector

Nationality: DutchFirst appointment: February 29, 2008Committee memberships: member of the audit committee

Ms HCJ van den Burg Principal office: noneOther relevant offices:• member of the supervisory

board of ASML Holding NV in Veldhoven

• member of the Monitoring Committee Corporate Governance

• member of the Stichting Toetsing Verzekeraars

• member of the Advisory Scientific Committee European Systemic Risk Board

• chairman of the Board AISBL Finance Watch

• chairman of the Foundation A PROPOS

• chairman Fair Wair Foundation

• board member Stichting IDé• board member Stichting

Nederlands Participatie Instituut

• board member Stichting Werkgemeenschappen Bergeijk

• member of the Supervisory Board of ASML Foundation

• member of the Advisory Council of the Nationaal Register Commissarissen en Toezichthouders

• member of the Advisory Council of the College Bescherming Persoonsgegevens

• member of Board of Advisors HIVOS

• deputy member Executive Committee FERPA

• committee member of the Mensenrechten Adviesraad Internationale Vraagstukken

Nationality: DutchFirst appointment: April 17, 2008 Committee memberships: member of the audit committee

ALM Nelissen Principal office: chairman Chamber of Commerce for Brabant, Eindhoven / Chamber of Commerce the Netherlands, The HagueOther relevant offices: • vice-chairman of the

supervisory board of Stichting Deltares

• member of the supervisory board of Zuid Nederlandse Theater Maatschappij NV

• chairman of the supervisory board of Stichting Exploitatie Olympisch Stadion

• board member of Stichting Administratiekantoor voor gewone aandelen A Van Lanschot Bankiers NV

• chairman of the supervisory board of Stichting Reinier van Arkel

• board member / treasurer of the Rijks Museum Fonds

• member of the supervisory board of VADO Beheer NV

• member of the supervisory board of Van Nieuwpoort Groep NV

• member of the supervisory board of TBI Holding NV

Nationality: DutchFirst appointment: September 1, 2008

105APG GroeP NV 2012 AnnuAl RepoRt104 ColofoN

ColofoN

Photography: Mark KuipersInterviews: Peter van SteenConcept and design:APG | Design Management

more iNformAtioN

APG Corporate Communicatie en BrandingTel. 045 579 81 [email protected]

CompositioN of the worKs CouNCil:

• LHA Adams (secretary)• PLJ Brouns (chairman)• HACJ Dabekaussen• HBJ van Eijsden• HJJ Erkens• AH de Heus• FD Hoekstra• PMH Hoofs• SA Jonis• RMJ Lavalle (deputy secretary)• JJ Porebski • Ms AA Pot• RMM Rekko • H Rijksen (vice-chairman)• H Schmidt • S Schüller• A Smeets • Ms CTHM Voss-Martinow • MMM Widdershoven

apg groep nv jaar 2012 2012 annual report verslag · asset management and management advice for...

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