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Transparency reportDeloitte Bedrijfsrevisoren / Reviseurs d’EntreprisesBurgerlijke vennootschap onder de vorm van een coöperatieve vennootschap met beperkte aanprakelijkheid /Société civile sous forme d’une société coopérative à responsabilité limitée

December 2016

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Transparency report 2

Legal structure and ownership 2

Deloitte Touche Tohmatsu Limited network 2

List of audited public interest entities 3

Governance structure of the Audit Firm 4

Internal quality control system 5

Date of last quality assurance review 12

Statement on independence practices 12

Continuing education 15

Financial information 16

Basis for partner remuneration 16

Report’s cut-off date 16

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Transparency reportAs an audit firm that carries out statutory audits of the annual accounts orconsolidated accounts of, among others, public-interest entities, we are publishingthis annual transparency report in compliance with article 15 of the 22 July 1953Act creating the Institute of Auditors and organising the public oversight of theprofession of statutory auditor, coordinated on 30 April 2007.

All information provided in this report relates to thesituation of the Audit Firm on 31 May 2016, except ifindicated otherwise.

Legal structure and ownershipDeloitte Bedrijfsrevisoren/Reviseurs d’Entreprises (the “AuditFirm”) is a civil company under the form of a limited liability co-operative company under Belgian law, with registered office atBerkenlaan 8b, 1831 Diegem and registered in the Brussels LegalEntities Register under 0429.053.863.

The majority of the capital and voting rights of the Audit Firm areheld by individuals, who are members of the Institute ofAuditors, and the remaining capital and voting rights are held byindividuals and by Deloitte Belgium CVBA. The fixed capital of theaudit firm is 18,625 EUR and its variable capital is 2,025,575 EUR1.

Deloitte Touche Tohmatsu Limited networkDeloitte Bedrijfsrevisoren/Reviseurs d’Entreprises is part of theDeloitte network, with other firms in Belgium, as agreed withDeloitte Belgium CVBA, member firm in Belgium of the DeloitteNetwork. The “Deloitte Network” is comprised of firms that aremembers of Deloitte Touche Tohmatsu Limited (DTTL), anEnglish company limited by guarantee. DTTL does not provideprofessional services to clients, or direct, manage, control or ownany interest in any member firm or any member firm’s affiliatedentities or entities authorised by the member firm to includeDeloitte in their name. Member firms in the Deloitte Networkprovide services to clients, either directly or through theiraffiliates (member firms, their affiliates and entities authorisedby the member firm to include Deloitte in their name arecollectively referred to herein as “Member Firms”). MemberFirms operate under the Deloitte brand and related names,including “Deloitte”, “Deloitte & Touche”, “Deloitte ToucheTohmatsu”, “Tohmatsu” and others.

1 Update - 23 December 2016: The variable capital has been updated inaccordance with the annual accounts for the year ended 31 May 2016 asapproved in shareholders’ meeting.

Member Firms provide services in particular geographic areasand are subject to the laws, regulations and professionalrequirements of the jurisdictions in which they operate. EachMember Firm is structured differently in accordance with, amongothers, national laws, regulations and customary practices.

Member Firms are not subsidiaries or branch offices of DTTL anddo not act as agents for DTTL or other member firms. Rather,they are locally-formed entities with their own ownershipstructure independent of DTTL that have voluntarily becomemembers of the Deloitte Network with a primary purpose tocoordinate their approach to client service, professionalstandards, shared values, methodologies and systems of qualitycontrol and risk management. DTTL has adopted certain policiesand protocols in each of these areas in an effort to establish aconsistently high level of quality, professional conduct andservice in all member firms.

This structure confers significant strengths, combining highquality standards and methodologies with a deep understandingof local markets and a sense of responsibility and initiativeamong professionals who have a direct stake in the integrity andgrowth of their respective practices.

Please see www.deloitte.com/about for a detailed descriptionof the legal structure of Deloitte Touche Tohmatsu Limited andits member firms.

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AblynxAlliance Development Capital SIICAB-InBevArgenta VerzekeringenArgenta SpaarbankAscencioBanco Bilbao Vizcaya Argentaria (Belgian Branch)BefimmoBekaertBelfius BankBelfius VerzekeringenBeobankBinck BankBiocartis GroupBNP Paribas FortisBone TherapeuticsBrussels Waarborgfonds/Fonds bruxellois de GarantieBrouwerij Handelsmaatschappij (Co.Br.Ha)CampineCardif AssurancesCardif Assurance VieCodic InternationalCofinimmoCompagnie du Bois SauvageCompagnie d'Entreprises CFEConnect GroupCoronaCrédit Mutuel Nord Europe BelgiqueCrelanCrelan VerzekeringenDelhaize Le LionDexiaEPBFElectrabel CoGreenELINIEMANIEuropabankFluxys BelgiumGalapagosGarantiefonds ReizenGreenyard FoodsGroupe Bruxelles Lambert (GBL)Hamon & Cie (International)Hospitaal-Plus MOBImmo Moury SicafiImmobel

2 Erratum – 23 December 2016: Some entities names have been corrected for abetter accuracy.

Intervest Offices & WarehousesKeytrade BankMizuho Bank Nederland Brussels BranchNatixis BankNorth Europe Life Belgium (NELB)NyrstarOnderling BeroepskredietOptionOrange BelgiumPCBPicanolPrivate InsurerProximusRealcoRealDolmenRecticelRoularta Media GroupSecurex Caisse Commune/ Gemeenschappelijke KasSecurex LevenSecurex Risques Divers/Allerlei Risico'sShizuoka BankSioen IndustriesSipefSociété Générale Private BankingSolvacSolvayTer BekeTEXAFThe Bank of Tokyo - Mitsubishi Bank (Branch)Union Bank of IndiaVandemoorteleVerzekeringskas Arbeidsongevallen SecurexVGPWarehouses De PauwWarehouses Estates BelgiumWorldlineXerius Onderlinge Verzekeringsvereniging

List of audited public interest entities2

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Governance structure of the Audit FirmDeloitte Bedrijfsrevisoren/Reviseurs d’Entreprises is governed by the Board of Directors, appointed by theShareholders Meeting and composed of at least a majority of members of the Institute of Auditors, as well as by aManagement Committee created by the Shareholders Meeting. The Managing Directors of the Audit Firm areautomatically member of the Management Committee. Management Committee members must be members ofthe Board of Directors of the Audit Firm and a majority must be member of the Institute of Auditors.

The Board of Directors retains competence for the general strategy of the Audit Firm and for establishing itsannual accounts and the Management Committee is entrusted with the overall management of the Audit Firm. TheManagement Committee is assisted by specialised teams that advise on specific matters and/or implement policiesincluding periodical updates on technical matters such as accounting standards and auditing standards, thePractice Protection Group that assists with client and engagement acceptance and continuance matters, amongothers, and the Learning Group.

The Management Committee members3 are/were Joël Brehmen, Michel Denayer, Rik Neckebroeck, Eric Nys,Laurent Vandendooren, Tom Van Cauwenberge and Dirk Van Vlaenderen, who are/were also the ManagingDirectors of the Audit Firm, and Rik Vanpeteghem, Piet Vandendriessche and Geert Verstraeten.

The statutory auditor of the Audit Firm is Luc Callaert BV/BVBA, represented by Luc Callaert.

3 Errata – 23 December 2016: Michel Denayer has resigned as Member of the Management Committee

and Managing Director with effect as from 4 February 2016; Dirk VanVlaenderen has resigned as Member of the Management Committee andManaging Director with effect as from 31 May 2016; Rik Vanpeteghem hasresigned as Member of the Management Committee with effect as from31 May 2016.

Piet Vandendriessche and Geert Verstraeten have been appointed asMembers of the Management Committee with effect as from 1 June 2016.

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Internal quality control systemThe overall quality control system of the AuditFirm includes policies and proceduresaddressing ethics, human resources, client andengagement acceptance and continuance,engagement performance and monitoring.

Leadership responsibilities for the system ofquality controlThe Audit Firm maintains policies andprocedures to promote an internal culturebased on the recognition that quality is ournumber one priority. The Audit Firm focuses onprofessional excellence as the foundation forachieving outstanding audit quality on aconsistent basis. While the Audit Firm’sleadership assumes ultimate responsibility forthe system of quality control, the partnersassigned with operational responsibility for theAudit Firm’s quality control system havesufficient and appropriate experience andability as well as the necessary authority toassume that operational responsibility.

EthicsThe Audit Firm maintains policies andprocedures that are designed to providereasonable assurance that it and its partners,professional staff and support staff comply withrelevant ethical requirements

The ethical requirements for audit and relatedassurance services provided by the Audit Firminclude Parts A and B of the Code of Ethics forProfessional Accountants (the “Code”) issued bythe International Ethics Standards Board forAccountants, a standard-setting body of theInternational Federation of Accountants (IFAC),the legal provisions applicable in Belgium (suchas the 1953 Law creating the Institute ofAuditors and organising public supervision ofthe profession and the 1994 Royal Decree onethics of auditors) and the standards issued bythe said Institute. When national requirementsare more restrictive than the Code, the AuditFirm follows the applicable nationalrequirements.

The Audit Firm has appointed an independentand experienced Chief Ethics Officer who is nota Management Committee Member and whohas direct access to the ManagementCommittee and the Board. In addition, theAudit Firm has developed and implemented itsown code of conduct which incorporatesDeloitte’s Global Principles of Business Conductand describes, in some detail, criticalprofessional behaviour that reflects localcustoms, regulations and legal requirements.

The Audit Firm provides communicationchannels through which partners, professionalstaff and support staff can consult on andreport ethical issues and situations. The AuditFirm reinforces its commitment to ethics andintegrity through communication tools, learningprograms, compliance processes andmeasurement systems.

The Audit Firm requires all partners,professional staff and support staff to confirmannually that they have read and understoodthe code of conduct and understand that it istheir responsibility to comply with it.

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Client and engagement acceptance andcontinuanceThe Audit Firm has rigorous policies andprocedures in place for accepting prospectiveclients and engagements and assessingengagement risk, regardless of the proposedservices to be rendered.

These policies and procedures are designed toprovide the Audit Firm with reasonableassurance that it will only accept engagementswhere it:

is competent to perform the engagementand has the capabilities, including time andresources, to do so

can comply with relevant ethicalrequirements, including independence andconflicts of interest assessments andconsiderations

has considered the integrity of the clientand does not have information that wouldlead it to conclude that the client lacksintegrity

Engagement risk classification associated withaccepting an engagement is assessed as“normal”, “greater than normal” or “muchgreater than normal” and is completed prior toaccepting a client and engagement. Theengagement risk assessment process includesapproval by the recommending partner andconcurrence by at least one other Audit Firmpartner that the Audit Firm may accept theclient and the engagement.

On international engagements, engagementacceptance and continuance procedures areperformed at the member-firm level. The AuditFirm does not assume the acceptability of aclient and/or the engagement merely because ithas been referred from another member firm.

In assessing acceptability of an engagement,client and professional service risks areconsidered, which generally include thefollowing factors:

management characteristics and integrity organisation and management structure nature of the business business environment financial results business relationships and related parties prior knowledge and experience

The Audit Firm’s engagement risk assessmentprocedures identify related risks and provide abasis for tailoring the audit approach in orderto address engagement-specific risks. Theengagement risk assessment begins during theengagement acceptance/continuation processand is an ongoing process that continuesthroughout the engagement. Risk assessmenttools and programs are encompassed in theaudit approach and common documentation tofacilitate the comprehensive risk assessmentfor planning the audit once the engagement isaccepted.

On an annual basis, engagements in processfor more than one year are evaluated todetermine if the Audit Firm should continue theengagement. Factors discussed above arerevisited to ascertain whether the relationshipshould continue.

In addition, if an entity undergoes a significantchange (e.g., change in ownership ormanagement, financial condition or nature ofentity’s business), continuation of therelationship is reevaluated. Decisions ofengagement continuance are concurred by oneother partner.

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Engagement performanceAudit ApproachThe Audit Firm’s audit approach includesrequirements and guidance to assist in theplanning and performance of auditengagements and is based on the InternationalStandards on Auditing issued by theInternational Auditing and Assurance StandardsBoard of IFAC. The Audit Firm has furthersupplemented these requirements andguidance to reflect local requirements, asapplicable. Common documentation and theenabling software technology are tools thatenhance the consistent implementation of theAudit Firm’s audit approach and promoteeffectiveness and efficiency.

The following are the main elements of theAudit Firm’s audit approach:

1. Understanding of the entity and itsenvironment

An understanding of the entity and itsenvironment, including its internal controls, toassess the risks of material misstatement at thefinancial statement and assertion level is vital toperforming an effective audit.

The Audit Firm’s engagement teams developthis understanding and assess risks of materialmisstatement in a number of ways, includinganalysing financial information to identifytrends and unusual balances, holding in-depthdiscussions with management and thosecharged with governance, considering theinherent nature of each financial statementcomponent and the risks associated with thatcomponent, evaluating the design of internalcontrols and determine if they have beenimplemented, assessing the extent to whichtechnology is used in the financial reportingprocess and, if applicable, reviewing internalaudit findings.

As necessary, based on the nature of theentity’s information systems and the extent towhich technology plays a role in the transactionprocessing and financial reporting processes,information technology specialists may beinvolved in the audit engagement.

2. Audit proceduresEngagement teams develop the audit plan toaddress the risks associated with the entity, theaudit engagement and the financial statementsas a whole.

Throughout the audit, engagement teamscontinually assess risk and how audit findingsbear on the audit procedures. The Audit Firm’saudit approach allows partners andprofessional staff to modify the auditprocedures to address issues that arise in thecourse of the audit.

Audit procedures to address risks of materialmisstatement include substantive procedures,which comprises tests of details andsubstantive analytical procedures, and tests ofthe operating effectiveness of controls.

3. Use of expertsWhile the engagement partner retainsresponsibility for all aspects of the engagement,there are instances when the engagement teamutilises an expert. In such instances, anengagement team evaluates whether theexpert has the necessary competence,capabilities and objectivity.

In evaluating whether or not the expert’s workconstitutes appropriate audit evidence insupport of the financial information, theengagement team considers:

the source data used the assumptions and methods used and, if

appropriate, their consistency with thoseused in the prior period

the results of the expert’s work in light ofthe engagement team’s overall knowledgeof the business and of the results of itsaudit procedures

4. Engagement documentationThe Audit Firm maintains policies andprocedures to support the assembly andarchiving of audit files whereby the auditengagement team submits the audit files forarchiving within the shorter of (1) 60 days fromthe date of the report or (2) the period set outin applicable professional standards andregulatory and legal requirements. The AuditFirm’s policies and procedures address theretention of documents (in paper and electronicform), including those that address theconfidentiality, safe custody, integrity,accessibility and retrievability of archiveddocumentation.

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Engagement Team ReviewsA review of the audit documentation is requiredto be performed by a member of theengagement team who has more experiencethan the preparer. In some cases, elements ofaudit documentation may be reviewed byseveral team members.

Engagement Quality Control ReviewsAn engagement quality control review isperformed for all audit and related assuranceservices, in a manner that is appropriate for thesize and complexity of the engagement and itsrisk level, with certain pre-approved exceptions.The review is performed by a partner, a directoror a manager who is not directly involved in theengagement and who has the appropriateexperience and knowledge about applicableaccounting and auditing standards andregulations. The engagement quality controlreviewer is not part of the engagement teamand is not portrayed in fact or appearance as amember of the engagement team. Appropriateexperience and knowledge includes experienceand knowledge of the entity’s industry,economic environment and accountingprinciples. For all public interest entities ("PIEs")and all high-risk engagements, the review isperformed by a partner or a director withsufficient and appropriate experience andprofessional qualifications on these types ofaudits.

The reviewer is appropriately briefed by theengagement team and conducts the review insuch a manner that sufficient knowledge andunderstanding is obtained in order to reachconclusions. The reviewer’s responsibility is toperform an objective review of significantauditing, accounting and financial reportingmatters, to document the procedures thereviewer performed and to conclude, based onall the relevant facts and circumstances ofwhich the reviewer has knowledge, that nomatters that have come to his or her attentionwould cause the reviewer to believe that thesignificant judgments made and theconclusions reached were not appropriate inthe circumstances.

Special ReviewsFor some engagements relating to PIEs and/orthat have been identified as having greater thannormal engagement risk, a special reviewpartner is assigned to provide an additionallevel of competence and objectivity in planningand performing the engagement. The special

review partner is independent of theengagement. Normally this partner possessesspecialised industry and technical skillsapplicable to the engagement and, whereverpossible, is independent of the practice unit toenhance objectivity.

Consultation Network and Differences ofOpinionsThe Audit Firm has established a consultationnetwork to assist in resolving issues identifiedby the engagement team. Consultations includetechnical accounting and auditing questionsregarding the application and interpretation ofapplicable standards and reporting issues or onany other matter pertaining to an auditengagement that requires specialisedknowledge.

To facilitate the technical consultation process,the Audit Firm has a national accounting andauditing consultation structure. A Member FirmProfessional Practice Director with specialisedtechnical skills and experience is supported bysubject-matter resources in various areas suchas regulatory filing requirements, technicalauditing requirements and complex accountingmatters.

The Audit Firm maintains policies andprocedures for the resolution of differences ofopinion among partners and others who areassigned to the engagement team, includingthose who are in a consultative capacity.

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Human ResourcesHiringThe Audit Firm has established policies andprocedures designed to provide reasonableassurance that it has sufficient partners andprofessional staff with the competencies,capabilities and commitment to ethicalprinciples necessary to:

perform engagements in accordance withprofessional standards and applicable legaland regulatory requirements

enable the Audit Firm to issue reports thatare appropriate in the circumstances

AdvancementThe Audit Firm’s policies and procedures foradvancement have been established to providereasonable assurance that professional staffselected for advancement have thequalifications necessary to fulfil theresponsibilities they will be called on toassume. A few of the policies and proceduresare identified below.

Various professional staff levels within theAudit Firm and descriptions of the relatedcompetencies required to perform effectively ateach level have been established.

Advancement policies and procedures thatidentify the experience and performancequalifications for advancement to each levelhave been established and communicated tothe Audit Firm’s professional staff.

Procedures for periodic performanceevaluation have been established.

A counselling program to assist professionalstaff in identifying realistic career paths anddeveloping action plans to help realiseprofessional goals has been established.

Professional DevelopmentThe purpose of the Audit Firm’s professionaldevelopment program is to help partners andprofessional staff maintain and enhance theirprofessional competence. To supplement on-the-job development, the Audit Firm providesformal continuing professional developmentprograms in relevant subject areas.

The Audit Firm has developed a competencymodel, specific to each function, used toexpress the areas of personal capability for

partners and professional staff. Thecompetency model has two main components:technical competencies which are functionallyspecific and for audit cover technicalcompetencies and shared competencies whichare common across the functions. Thecompetency model is a combination ofknowledge, skills and attitudes that arenecessary to perform the various roles withinthe Audit Firm. As such, this competency modelforms the basis for structuring the continuingprofessional development program.

All partners and professional staff takepersonal responsibility to ensure that their owncontinuing professional development andeducation is appropriate to their roles,responsibilities and professional requirements.However, the Audit Firm establishes minimumlevels of continuing professional developmentto be undertaken by partners and professionalstaff within a specific period of time.

These levels include a minimum of 20 hours ofstructured learning per year and 120 hours ofstructured learning in every three-year period(i.e., an average of 40 hours per year). Toachieve these levels of development, the AuditFirm offers structured, formal learningprograms such as internal or external courses,seminars or e-learning covering all areas of thecompetency model (e.g., shared competencies,function-specific technical competencies andcompetencies in areas of specialisation).

Assignment of Partners and Professional Staffto Audit EngagementsThe Audit Firm assigns responsibility for eachaudit engagement to an audit engagementpartner. The Audit Firm’s policies define theresponsibilities of an audit engagement partnerand those responsibilities are communicated topartners. The identity and role of the auditengagement partner is communicated to keyindividuals of the client’s management teamand those charged with governance at theclient.

The Audit Firm also has policies and proceduresin place so that partners and professional staffassigned to all audit engagements have theappropriate degree of proficiency for their roleand the responsibilities to be performed.

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An engagement team ordinarily includes one ormore of each of the following: auditengagement partner, audit manager, fieldsenior and staff. However, the engagementteam will be developed based on the size,nature and complexity of the entity’soperations. Every audit engagement team isunder the control and supervision of the auditengagement partner to whom responsibility forthe conduct of all audit services on theengagement is assigned. The audit managerassigned to the engagement is responsible forproviding primary supervision and direction tothe professional staff in the execution of theaudit plan and in the performance of the auditengagement. The field senior is responsible forthe day-to-day supervision of the othermembers of the engagement team. Specialistsand other experts are also involved as needed.

The audit engagement partner considers manyfactors to determine that the engagement teamcollectively has the appropriate capabilities,competencies and time to perform the auditengagement. Factors considered in thisdetermination include, among others:

the size and complexity of the entity’sbusiness

the applicable financial reportingframework used in preparing the financialstatements

applicable independence considerations,including any possible conflicts of interest

the qualifications and experience ofprofessional staff

MonitoringAnnual Quality Assurance ReviewIn accordance with DTTL policies, the auditpractice of the Audit Firm is subject to anannual quality assurance review, commonlyreferred to as a “practice review”. Compliancewith this policy is achieved by an annualpractice review covering the audit practice overa three-year cycle.

The annual practice review program is designedto cover a number of partners each year. Everypartner is subject to a practice review atintervals not to exceed three years.Consideration is also given to assessing theperformance of managers and directors.Candidates for partner nomination wouldordinarily be expected to have been covered in

the most recent practice review prior to theirexpected admission.

The Audit Firm is responsible for the practicereview. DTTL provides guidance and oversightregarding the practice review plans andprocedures. The general coordination andadministration of the practice review programis the responsibility of the Audit Firm’s practicereview director, in conjunction with the regionalpractice review director.

The practice review plan, process and resultsare reviewed and concurred by a partner fromanother member firm (the “external partner”)every year, subject to due respect of clientconfidentiality and other legal requirements.The external partner who is assigned thisresponsibility works closely with the AuditFirm’s practice review director and the regionalpractice review director in overseeing andchallenging the planning and performance ofthe practice review.

1. Types of Engagements ReviewedThe engagements selected for review includenational engagements and inbound/outboundtransnational engagements (audits of financialstatements that are or may be used acrossnational borders), including PIEs, as well as anumber of high risk audit engagements. Somesensitive and complex engagements (e.g., first-year engagements, situations where there is achange in control, or deteriorating financialcondition) are also selected. All major industriesserved by the Audit Firm are considered.

2. Scope of Practice ReviewsReviewers are chosen from regional orinternational pools. The assignment ofreviewers is based on skill level, industryknowledge and experience on transnationalengagements.

The reviews of individual engagements consistof discussions with the partner, director and/ormanager responsible for the engagement and areview of related reports, working papers and,where appropriate, correspondence files.

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Engagements are reviewed to:

determine whether quality controlprocedures have been properly applied tosuch engagements

assess the adequacy of implementation ofthe audit approach, including compliancewith the policies and procedures containedin the Audit Firm’s policy manuals

monitor compliance with applicable locallaws

assess the overall quality of serviceprovided to clients

The overall risk management and qualitycontrol policies and procedures within the AuditFirm are also reviewed, including the following:

risk management program, including clientand engagement acceptance andcontinuance

independence recruitment and advancement professional development public filings in other countries information technology specialist reviews consultation with Audit Firm experts consultation with outside experts engagement quality control reviews

3. Results of Practice ReviewsThe findings and recommendations resultingfrom the practice reviews are included in theAudit Firm’s audit quality plan and presented tothe Audit Firm’s Management Committee, theCEO and other appropriate Audit Firm leadersas well as members of DTTL regional and globalleadership. The purpose of the audit qualityplan is to provide suggestions for improvementin response to findings noted and to drive auditquality within the Audit Firm overall. The AuditFirm addresses findings by conducting a rootcause analysis and drawing up a detailed actionplan setting out the action to be taken, theperson(s) responsible and the timing toimplement the recommendations.

In addition, the Audit Firm communicatesdeficiencies noted as a result of the practicereview (if any) and recommendations forappropriate remedial action to the relevantpartner and other appropriate personnel. TheAudit Firm also communicates on an annualbasis the results of the practice review andongoing consideration and evaluation of its

system of quality control to its partners andother appropriate individuals within the AuditFirm.

Regulatory requirementsThe Audit Firm has assigned a partner to followand address legislative initiatives and publicpolicy issues that may affect audit.

Complaints and AllegationsThe Audit Firm’s policies and procedures aredesigned to provide it with reasonableassurance that it deals appropriately withcomplaints and allegations that the workperformed by the Audit Firm failed to complywith professional standards and regulatory andlegal requirements and allegations ofnoncompliance with the Audit Firm’s system ofquality control.

Management Committee StatementThe Management Committee of DeloitteBedrijfsrevisoren/Reviseurs d’Entreprises issatisfied that the internal control system asdescribed above is effective in providingreasonable assurance that the Audit Firm andits personnel comply with applicableprofessional standards and regulatory and legalrequirements.

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Date of last quality assurance reviewA quality assurance review of the Audit Firmand a selection of partners has been carried outin 2013 by the Institute of Auditors under thesupervision of the public oversight authority,the Referral Chamber (“De Kamer vanVerwijzingen en instaatstelling” / “La Chambrede renvoi et de mise en état”).

Statement on independence practicesThe Audit Firm has policies and procedures thatare designed to provide reasonable assurancethat it complies with applicable professionalstandards that relate to independence. Thesepolicies and procedures are based on the Codeand DTTL policies and are enhanced to reflectthe legal provisions applicable in Belgium andthe independence standards set by the Instituteof Auditors, where more restrictive.

The Audit Firm’s system of quality controlrelated to independence includes the followingareas:

independence policies and procedures compliance business process tools including

the Deloitte Entity Search and Compliance(DESC) system, the Global IndependenceMonitoring System (GIMS), Confirmationsand Consultation

business relationship assessments andmonitoring

independence learning monitoring of independence systems and

controls relating to personal independenceand engagement and practice reviews

disciplinary measures and actions assignment of responsibility for

independence systems and controls “Tone-at-the-top” culture relating to

independence

Independence Policies and ProceduresThe Audit Firm’s independence policies andprocedures cover the Audit Firm and the AuditFirm’s partners, professional staff and supportstaff, and certain relatives thereof, whereapplicable, as well as the affiliated entities ofthe Audit Firm and other Belgian entities thatare authorised to include "Deloitte" in theirname. These policies and procedures are, insome instances, more restrictive than theindependence standards in the Code andcontain specific independence requirementsthat are applicable when the Audit Firm is to

maintain independence with respect to an auditclient (“restricted entity”) and its affiliates.

Policies require that the Audit Firm and itspartners and professional staff determine,among other things, whether an entity is arestricted entity before the Audit Firm, apartner or a professional staff member(including their spouse, spousal equivalent anddependents) engage in certain transactionswith the entity. The Audit Firm, partners andmanagerial personnel enter their financialinterests and securities accounts into a trackingsystem (GIMS). GIMS enables an electronicreview of financial interests and securitiesaccounts to help identify if independencerestrictions may affect the ability to hold suchitems.

The Audit Firm obtains confirmations from itspartners, professional staff and support staffupon joining the Audit Firm, as well as ongoingconfirmations on an annual basis, that suchindividuals are in personal compliance with theAudit Firm’s independence policies.

The Audit Firm’s independence policies andprocedures are made available electronically tothe Audit Firm’s partners, professional staff andsupport staff. Updates to these policies andprocedures are also made and communicatedelectronically to the Audit Firm’s partners,professional staff and support staff. Moreover,other independence-related materials areavailable on an independence website.Reminders on policy and other matters areroutinely published as part of communicationsto strengthen awareness and understanding ofthe independence policies and to highlightchanges to entities that are internationallyrestricted, as relevant.

Policies and procedures are in place at theengagement level to require the auditengagement partner to consider independencematters during the course of an auditengagement and to conduct communicationswith the audit committee or those charged withgovernance, where required.

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DESC System, GIMS, Confirmations andConsultationsThere are three related aspects of the AuditFirm’s systems and controls related to the AuditFirm’s independence and the personalindependence of its partners, professional staffand support staff: DESC system, GIMS and theconfirmation process. These three aspectssupport each other in that (1) partners andprofessional staff search DESC system (whichincludes a database of internationally restrictedentities) and/or GIMS (which has a database offinancial interests and securities accounts) toidentify if an entity or its financial interests orsecurities accounts are restricted, (2) partnersand managerial personnel record their financialinterests and securities accounts in theirportfolios in GIMS and (3) the Audit Firmperiodically obtains confirmations from itspersonnel as to their compliance with the AuditFirm’s independence policies, and also confirmsto DTTL its compliance and the compliance ofits personnel with the Audit Firm’sindependence policies.

1. DESC systemDESC is operated by DTTL on behalf of the DTTLmember firms. At a minimum, each DTTLmember firm reports the names of its auditclients and their affiliates that meet thedefinition of an international restricted entity.The policy definition of an internationalrestricted entity includes public audit clients, aswell as other audit clients that may be of publicinterest. Such restricted entity information isrecorded in the DESC system. The entityinformation provided by the Audit Firm to DTTLis continuously updated to help ensure itsaccuracy and completeness, including periodicvalidation processes performed by engagementteams and/or the DTTL member firms. Updatesto DESC system’s entity information are madedaily based upon these processes. The AuditFirm’s partners and professional staff accessDESC system online.

DESC system also has features that are used torequest and document approvals related toproviding services to an entity. In manyjurisdictions, a restricted entity’s auditcommittee or others charged with governancemust preapprove services that will be deliveredwithin the restricted entity group. Where suchfeatures are enabled, DESC system’s featuresestablish a standard business process amongthe DTTL member firms, whereby servicerequests are submitted to the lead client

service partner who is responsible for obtainingand documenting appropriate authorisationsprior to approving the service request. Inaddition, the Audit Firm has local riskmanagement tools that are systematically usedin relation to the Belgian market.

2. GIMS for financial interests and securitiesaccounts

Each DTTL member firm also identifies andreports the publicly available securitiesaccounts at financial institutions that areassociated with an international restrictedentity. Such securities and financial institutionsare recorded in GIMS. GIMS is operated byDTTL on behalf of the DTTL member firms andeach DTTL member firm administers therelated monitoring processes related to itspartners and professional staff.

Partners and professional staff search DESCand/or GIMS before acquiring a financialinterest or establish a securities account todetermine if restrictions apply that affect them.This includes investments and securitiesaccounts of a spouse, spousal equivalent anddependent. Partners and managerial personnelenter defined types of such financial interestsand accounts into their individual portfolios inGIMS for monitoring purposes.

In addition, GIMS assists partners andmanagerial personnel by identifying situationswhich may not comply with the Audit Firm'spolicies so that the item may either be reviewedor corrected. When such a situation is detected,the system advises the individual that anindependence-impairing situation may existand poses questions which aid the individual todetermine whether or not the item is permittedin the particular circumstances. This includesgenerating notices to the individual in situationswhere a once-permissible holding becomesnewly restricted, so that appropriate and timelyaction can be taken. The Audit Firm monitorsand follows-up on such notices until theindividual resolves the item.

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3. ConfirmationsThe Audit Firm obtains confirmations from itsprofessional staff and support staff uponjoining the Audit Firm, partners before beingadmitted to the partnership and existingpartners when a change in location or role maychange their independence requirements.Ongoing confirmations are also obtained onannual basis from all individuals. Annually, theAudit Firm reports to DTTL that the Audit Firmhas taken appropriate steps to obtain sufficientevidence that it and its partners, professionalstaff and support staff comply with applicableindependence requirements (including that theAudit Firm itself is independent of restrictedentities).

4. Consultation NetworkThe Audit Firm communicates with its partnersand employees regarding the consultationpolicies for independence matters andidentifies the individuals who are to becontacted. Additionally, the Audit Firm consultswith DTTL’s independence group and othermember firms when the Audit Firm determinesthat additional input or advice is needed underthe circumstances.

Business Relationship Assessments andMonitoringThe Audit Firm has a business relationshipsassessments and monitoring process. Theobjective of such process is to ensure that, priorto entering into any business relationship witha restricted entity or its management orsubstantial stockholders, a determination ismade to ensure such a relationship does notimpair independence with respect to thatrestricted entity. Ongoing businessrelationships are also monitored annually.

Independence LearningThe Audit Firm provides independence learningto its partners and professional staff.

Monitoring of Independence Systems andControls Relating to Personal Independenceand Engagement and Practice Reviews1. Inspection of Personal IndependenceOn a periodic basis, the Audit Firm inspects forcompliance with the Audit Firm’s independencepolicies and procedures. The objective of theinspection and testing program is to determinewhether the representations and informationsubmitted by partners and managers (directorsare included in one of these two categories,depending upon the relevant circumstances)

relating to independence matters and theinformation contained in GIMS are accurateand complete.

2. Inspection of Audit Firm’s ComplianceThe Audit Firm is subject to a practice review atintervals not to exceed three years. Compliancewith independence policies at both a firm leveland at a client level is reviewed.

See further details of engagement and practicereviews in the “Monitoring” section above.

Disciplinary Measures and ActionsThe Audit Firm has disciplinary policies andprocedures in place to address noncompliancewith the Audit Firm’s independence policies andprocedures. These disciplinary policies andprocedures are designed to provide anappropriate response to breaches of suchpolicies and procedures by partners,professional staff and support staff.

Assignment of Responsibility forIndependence Systems and ControlsThe Audit Firm has assigned a Director ofIndependence who has the responsibility toimplement and maintain quality controls overindependence. More specifically, the Director ofIndependence is responsible for taking the leadon all significant independence issues withinthe Audit Firm, including the implementationand maintenance of the Audit Firm’s businessprocesses related to: (1) independenceconsultations, (2) independence learningprograms, (3) restricted entity information inDESC system, (4) use and monitoring of thefeatures of DESC system, (5) use andmonitoring of GIMS, (6) annual confirmations,(7) testing and inspection programs, and (8)disciplinary processes. Communicationchannels exist between the Audit Firm’sDirector of Independence, Audit Firmmanagement and DTTL’s independence group.Further, the Director of Independence providesregularly an update to the Audit Firm’smanagement about the significantindependence matters that are relevant to theAudit Firm.

DTTL has assigned a senior leader and DTTLindependence team members who provideaccess to timely and accurate informationdesigned to facilitate the independencefunction at the Audit Firm level.

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“Tone-at-the-Top” Culture Relating toIndependenceAudit Firm leadership reinforces theimportance of compliance with independenceand related quality control standards, therebysetting the appropriate "tone-at-the-top" andinstilling its importance into the professionalvalues and culture of the Audit Firm. Strategiesand procedures to communicate theimportance of independence to partners,professional staff and support staff have beenadopted, emphasising each individual’sresponsibility to understand the independencerequirements. A review of independencecompliance is conducted as part of the practicereview.

Conflicts of InterestPotential conflicts of interest are considered onall prospective engagements and prior to theAudit Firm entering into a financial or businessrelationship with a third party. The Audit Firmhas policies and procedures in place to identifypotential conflicts of interest in connection withthe Audit Firm either (i) accepting a prospectiveengagement or (ii) entering into certainbusiness or financial relationships with anotherentity.

The Deloitte Conflict Checking System (DCCS) isdesigned to support the Audit Firm’s conflictchecking business process to identify andmanage potential conflicts relating toprospective engagements, business or financialrelationships. For each new engagement orrelationship opportunity, DCCS captures theprincipal parties to the engagement, the scopeof work, engagement team and specificquestions which are driven by the proposedservice offering. As part of each conflict checkrecorded in DCCS, there is an automated searchof DESC system to identify any potentialaudit/attest relationships. DCCS also providesan automated means of cross-border conflictchecking. Overall DCCS provides a record ofexisting engagement, business and financialrelationships which is automatically searchedwhen proposing for new engagements orrelationships.

Continuing educationContinuing education is a key priority of theAudit Firm, as it is an important means ofdeveloping knowledge, maintaining andimproving the quality of our services. Thelearning plan offers a variety of topics, includingtechnical matters (GAAP, GAAS, professional

rules, taxation, company law, labour law, ITsystems, internal controls), management andinterpersonal skills, business economics andindustry specific courses. The continuingeducation program is comprised of bothDeloitte organised learning sessions as well asexternal learning, organised by the Institute ofAuditors among others. Next to this, a variety ofe-learning sessions are available to deepencertain skills. Certain courses are mandatoryand others are optional, such that each auditoror trainee auditor can personalise his or herlearning programme to the specific needs.

During the first years with the Audit Firm,training is predominantly comprised ofmandatory courses on technical topics,including Deloitte methodologies andprocesses. For more experienced people, theoptional part of the learning plan increasesgiven that individual needs become morediverse. More experienced auditors areexpected to update and deepen their technicaland industry knowledge. Developingmanagement and interpersonal skills also gainimportance for this group. Selected highpotential individuals are also given theopportunity to follow long term courses, suchas management courses organised byreputable schools. In addition, auditors workingon certain U.S. Securities and ExchangeCommission (SEC) registrant engagements arerequired to be US accredited under firmpolicies. A minimum number of specifiedtraining sessions on US GAAP/Public CompanyAccounting Oversight Board standards and SECregulation need to be followed every year to beaccredited.

The learning curriculum for each professional ismonitored using an automated monitoringsystem. This allows the Audit Firm to monitorcompliance with DTTL policies on learning aswell as with rules imposed by the Institute ofAuditors. It also allows us to monitor thelearning needs and track record of eachindividual. Continuing education is also a factortaken into account for the yearly evaluation ofaudit staff and the assessment of their growthpotential within the Audit Firm.

The Audit Firm’s internal learning programmehas been accredited by the Institute ofAuditors.

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Financial information4

The total turnover of DeloitteBedrijfsrevisoren/Reviseurs d’Entreprises forthe financial year ending on 31 May 2016amounted to 127,806,726 EUR which can bebroken down into:

Fees for statutory audit work and otherlegal missions for statutory audit clients49,945,102 EUR

Fees for non statutory audit clients andother professional work: 77,861,624 EUR

The net turnover of the network to whichDeloitte Bedrijfsrevisoren/Reviseursd’Entreprises belongs in Belgium, per sector ofactivity, and including that of DeloitteBedrijfsrevisoren/Reviseurs d’Entreprises, is thefollowing (in millions of EUR):

Audit and Enterprise Risk Services(AERS)5

105

Accountancy 82Tax 125Financial Advisory (FA) 15Consulting 105

Revenue 2016(in mio of EUR)

4 Update - 23 December 2016: The numbers have beenupdated in accordance with the annual accounts for theyear ended 31 May 2016 as approved in shareholders’meeting.

Basis for partner remunerationThe remuneration of each equity partner iscomprised of a share in the net profits to bedistributed, in proportion to his or herrespective shareholding in the Audit Firm.

Partners are evaluated on a yearly basis anddepending on the outcome of the evaluation,the respective shares in the audit firm of equitypartners and the remuneration of otherpartners may increase or decrease. Partnerevaluations take the following factors intoaccount: quality, expertise, integrity,professionalism, entrepreneurship,independence and compliance.

Report’s cut-off dateAll information provided in this report relates tothe situation of the Audit Firm on 31 May 2016,except if indicated otherwise.

5 Update – 23 December 2016: Audit and Enterprise RiskServices has changed its name as from 14 October 2016and is now named Audit & Risk Advisory (ARA)

AERS105

Accountancy82

Tax125

FA15

Consulting105

1.Source: Deloitte Belgium annual report 2016

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Joël BrehmenManaging Director

Rik NeckebroeckManaging Director

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Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, andtheir related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does notprovide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

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© December 2016 Deloitte Bedrijfsrevisoren / Reviseurs d’Entreprises