Corporate Governance Statement

We innovate in all our activities and we anticipate new challenges.

In line with the provisions of the Belgian Corporate Governance Code of 9 December 2004, the first charter was approved by the Board of Directors on 26 January 2006. The corporate governance charter was reviewed in the light of general developments in the area of corporate governance and the Board of Directors approved a new charter on 6 February 2014. Following the appointment of a General Manager, the corporate governance charter was brought into line with this decision. The Board of Directors approved this new charter on 15 September 2016. The latest version – applying from 1 November 2016 –is available at www.aquafin.be. The latest composition of the Board of Directors can also be found on that website.

Board of Directors

COMPOSITION

A new Board of Directors was appointed during the General Meeting held on 16 April 2019. A further change subsequently took place to the Board. Kathleen Depoorter’s position fell vacant. In this situation, the Articles of Association (Art. 13) permit the remaining directors to fill the position temporarily. The next General Meeting will decide on the final appointment. Once the appointment is confirmed, this director completes the term of the person she replaces.

Nathalie Heremans was appointed according to this procedure during the meeting of the Board of Directors held on 17 October 2019.

The latest composition of the Board of Directors is as set out below. In 2019, the Aquafin Board of Directors had ten nonexecutive directors who meet the criteria set out in the Companies Code. Eight directors also meet the independence criteria stated in Schedule A to the Belgian Corporate Governance Code. As such, the Board of Directors complies with Section 2.3 of the Corporate Governance Code, which states that at least three Board members must be independent.

The Board of Directors is assisted by its secretary, Mr Alain Vanden Bon.

Name Type of directorship/Independent/ (Non-)executive

Alain Bernard

non-executive Marleen Evenepoel, as permanent representative non-executive of the Flemish Environmental Holding Koen Helsen Renaat De Sutter Jef Wittouck Dirk Lybaert Independent, non-executive Independent, non-executive Independent, non-executive Independent, non-executive

Jochen Bultinck Independent, non-executive

Katrien Desomer Katrijn Faket Independent, non-executive Independent, non-executive

Nathalie Heremans Independent, non-executive

* subject to approval at the next meeting of shareholders

End of term of office

2024 2024

2024 2024 2024 2024 2024 2024 2024 2024*

REPORT OF ACTIVITIES AND ATTENDANCE

As well as exercising the powers defined in the charter, in the last financial year, the Board of Directors once again paid close attention to the subjects of safety and well-being.

During each meeting, the directors were informed of occupational accidents which had occurred in the period under review, among both employees and contractors. Substantial progress has been made, for instance by setting up a long-term safety programme with the ultimate goal of zero occupational accidents.

The various long-term, annual and permanent objectives were also reviewed in order to realise Aquafin’s vision within the context of the corporate values and the policy around corporate social responsibility.

The impact of the Flemish Coalition Agreement with the new coordinating role for Aquafin as asset manager with respect to the sewer operators and municipalities was discussed at length. The implementation of Aquafin’s longterm strategy for sludge treatment continues. Some time ago, the Board of Directors approved a strategy focussing on recovery of raw materials and energy, which is also in keeping with the company’s energy policy: reducing the CO2 footprint through annual energy saving, phasing out and eventually ceasing the use of fossil fuels and producing (more) green energy.

During 2019, the Board of Directors met six times. The meetings in January and March took place with the previous composition. All directors were present at these meetings.

The meetings in June and September took place with Kathleen Depoorter as director. The last two meetings went ahead with Nathalie Heremans as co-opted director. There were two meetings at which one director was absent and one meeting at which two directors were absent. There was one meeting at which all directors were present.

Due to the changes in the composition of the Board of Directors, the composition of the Audit Committee and the Appointments and Remuneration Committee has also altered.

Audit Committee

Following the change of director, the Board of Directors also deliberated on the composition of the Audit Committee and its chairman. In view of his experience with his employer and his status as independent director, Jochen Bultinck was appointed as chairman of this committee. Nathalie Heremans also joined this committee.

COMPOSITION SINCE 17 OCTOBER 2019:

Chairman Jochen Bultinck Katrien Desomer Katrijn Faket Koen Helsen Nathalie Heremans

REPORT OF ACTIVITIES AND ATTENDANCE

The main function of the Audit Committee is to assist the Board of Directors in the fulfilment of supervisory responsibilities concerning the financial reporting process, the internal control system and risk management, the internal and external audit process, the business process for monitoring compliance with laws and regulations. The Audit Committee is the main link between the Board of Directors, the internal auditor and the statutory auditor.

In 2019, the Audit Committee dealt with the usual matters: supervision of financial reporting, the accounts and budgets, follow-up of management of interest rate risk, monitoring of the effectiveness of the systems of internal controls and risk management, monitoring of internal audit activities, approval of the internal audit plan, discussion of the management letter of the statutory auditor and review of the nature and scope of the non-audit services provided by the statutory auditor.

After each meeting of the Audit Committee, the chairman of the committee gives a brief account of its findings and/or recommendations during the next meeting of the Board of Directors. The Audit Committee also reports on its activities to the Board of Directors annually.

The financial reporting was discussed in depth at all meetings. The annual and interim results were discussed at the March and September meetings respectively. At the March meeting, the Audit Committee also evaluated the Corporate Governance section of the annual report.

In the 2019 financial year, the Audit Committee also focussed in particular on the following points:

• the impact of the change of accounting method from percentage of completion to completed contract for municipal projects; • points for attention raised by the statutory auditor regarding the monitoring of municipal activities and subsequent costs and, following on from this, the internal approach for organising the effective control and monitoring of project administration; • the issue of delivery and the fact that deliveries are still proving tricky; • the provision for rejected costs for projects submitted for delivery; • the monitoring of the performance budget; • the credit risk for Aquafin with regard to counterparties as a result of the management of interest rate risk.

Based on the internal controls components of COSO methodology, the committee evaluated the internal control system and risk management within the organisation.

The Audit Committee met three times in 2019. Four of the five directors took part in all meetings, one director was absent from one meeting. This represents average attendance of 93%. RESPONSIBILITY OF THE AUDIT COMMITTEE FOR INDEPENDENCE AND COLLECTIVE EXPERTISE IN THE FIELD OF THE ACTIVITIES OF THE AUDITED COMPANY

All members of the Audit Committee are independent directors. In view of their qualifications, professional experience and/or experience with Aquafin, the members of the Audit Committee possess ample knowledge of the activities of the company audited by them.

Appointments and Remuneration Committee

COMPOSITION SINCE APRIL 2019:

Chairman Flemish Environmental Holding, represented by Marleen Evenepoel Renaat De Sutter Dirk Lybaert Jef Wittouck

REPORT OF ACTIVITIES AND ATTENDANCE

During the meetings in the past financial year, the objectives of the Management Committee for 2018 were reviewed. The committee then decided on the objectives for 2019. Besides the overall remuneration for 2019, the remuneration of the Management Committee was also discussed.

The Appointments and Remuneration Committee advised on the acceptance of applications for new independent directors. As at 1 January 2018, Aquafin’s organisational model was radically overhauled. Since then, the various managerial members and departments have been subjected to a growth analysis, generally with external assistance. The completed growth analyses led to additional organisational adjustments and management changes below senior management level.

The Appointments and Remuneration Committee met five times during the past financial year. Three meetings took place under the previous composition. All directors were present at each of these meetings.

Management Committee

COMPOSITION

The composition of the Management Committee remained unchanged in 2019:

The Management Committee meets on a weekly basis. As part of his training for the role of Finance & Procurement director, Glenn Van Olmen, Finance & Procurement manager, attends the meetings.

The Management Committee also meets once a quarter to review progress towards the objectives contained in the Strategic Aquafin Management Plan.

General Manager Asset Management Finance & Procurement Project Management Business Development & Innovation Operations HR & Organisational Development Jan Goossens Bart Van Eygen Johan Maes Dirk De Waele Danny Baeten Hans Bruynooghe Sabine Schellens

Key elements of the evaluation process of the Board of Directors, the committees and the individual directors

The members of the Board of Directors regularly evaluate the size, composition and functioning of this body. The current composition is evaluated in terms of the desired composition. The relationship and interaction with the Management Committee are also reviewed. In this respect, the directors were provided with an analysis of the Appointments and Remuneration Committee.

The following elements are discussed during the evaluation process for the Audit Committee: internal regulations, composition and appointments, meetings, training of members and resources available for this, the integrity reporting procedure and relations with the Board of Directors. The Audit Committee evaluates its effectiveness and efficiency once every two years. An evaluation is also made of the responsibilities with respect to the company’s financial reporting, internal controls and risk management systems and both internal and external audits. The Appointments and Remuneration Committee evaluates its own effectiveness and efficiency once every two years. For the purpose of this self-evaluation, an individual questionnaire is sent to each member of the committee. The results are discussed at a meeting of the committee and submitted to the Board of Directors. An analysis is also carried out of the interaction between the Management Committee and the Board of Directors. Finally, the committee issues an opinion on the performance of the individual directors, with a view to their possible reappointment, focussing in particular on the evaluations of the various chairmen.

Remuneration Report

NON-EXECUTIVE DIRECTORS

Aquafin applies the following remuneration model for directors:

On the one hand, there is an annual flat fee for attending meetings of the Board of Directors. This flat fee stands at 6,500 euros for directors and 13,000 euros for the chairman. Payment of the fee is conditional on attending at least two thirds of the total number of meetings, barring force majeure. In addition, a fee is paid per meeting of the Audit Committee and the Appointments and Remuneration Committee amounting to 380 euros for the chairmen and 320 euros for the members of these committees.

Jochen Bultinck (C) Katrien Desomer Renaat De Sutter Katrijn Faket Koen Helsen Alain Bernard (C) Dirk Lybaert Jef Wittouck Marleen Evenepoel (C) Nathalie Heremans Kathleen Depoorter (C) Francine Swiggers Ludo Suy Jean Vandecasteele Marijke Mahieu VOF Luga Consult VOF Materie (C)

Total

((C) = Chairman)

Remuneration from Remuneration from 01/01/2019 to 16/04/2019 16/04/2019 to 31/12/2019 Total remuneration 2019

2,320 2,960

3,140

2,380 2,320 2,960 2,320 2,320 2,960 5,280

28,960

5,200 5,140 5,140 5,140 4,820 9,640 5,140 5,140 5,260 2,818 3,158

56,596

5,200 5,140 5,140 5,140 7,140 12,600 5,140 5,140 8,400 2,818 5,538 2,320 2,960 2,320 2,320 2,960 5,280 85,556

MANAGEMENT COMMITTEE

The total gross remuneration paid for 2019 to the members of the Management Committee amounts to:

• basic salary: 1,174,828.39 euros • variable part: 206,844 euros • pension entitlements: 199,308.06 euros • other remuneration components: 168,992.69 euros

The variable remuneration for the 2019 financial year will be paid in 2020 in the form of warrants.

GENERAL

Based on the advice of the Appointments and Remuneration Committee, the Board of Directors determines the remuneration policy for the executive management team. The aim of this policy is to attract, retain and motivate knowledgeable people. The amount of the remuneration takes into account the individual tasks and responsibilities of the members of the Management Committee.

The performance of the Management Committee is evaluated once a year in the presence of the General Manager. The appraisal of the General Manager takes place in his absence. The Appointments and Remuneration Committee closely monitors the entire procedure, which is also approved by the Board of Directors. Individual and collective objectives are set each year, based on the regulations. A certain weighting is assigned to each objective within the evaluation in advance. For 2019, the elements of the evaluation related to organisational, budgetary, economic and environmental aspects and/or results, among other factors. The overall performance of each member of the Managing Committee is also evaluated, in addition to the evaluation based on the objectives set. The period during which this performance is evaluated extends from 1 January 2019 to 31 December 2019 inclusive.

REMUNERATION FOR MAYORS’ ADVISORY BODY

As part of its municipal activities, Aquafin has set up an advisory body for mayors. This group meets several times a year to exchange views about a variety of water-related subjects or Aquafin puts a range of questions to this group. The mayors sitting on this advisory body receive a gross remuneration of 250 euros for every meeting they actually attend. A total of 2,000 euros was paid for this in 2019. Here is an overview of the meetings:

Date Location

20/06/2019 De Kruitfabriek, Vilvoorde

06/09/2019 Overijse

Notes on deviations from the Code

Aquafin applies the provisions contained in the “Belgian Corporate Governance Code” for listed companies. Deviations are made from the Code in certain instances, due to the specific nature of the company’s share ownership. Further details of the provisions of the Code with which the company does not comply are given below.

SECTION 8.8: CONVENING OF/SUBMISSION OF MOTIONS FOR GENERAL MEETINGS

The company’s Articles of Association stipulate the statutory threshold of 20% for convening a General Meeting. In view of the specific shareholdership characteristics of the company, there is no reason to lower the threshold for submitting motions for the General Meeting at this point.

Insider dealing and market abuse

As Directive 2003/6/EC on insider dealing and market manipulation applies to the company since the debenture loan was issued, measures were taken in the charter to comply with the provisions of this directive. The role of the Compliance Officer concerning compliance with relevant provisions and the necessary provision of information is defined. If necessary, the Board of Directors will draw up a dealing code.

Alain Vanden Bon, Secretary to the Board of Directors, has been appointed as the Compliance Officer.

Matters discussed

- Presentation on Aquafin - Decentralised treatment - Compact forms of housing - Demo installation on site

- Climate and water management for tomorrow - Blue/green networks - Case of Southern flank Overijse

To develop reliable waste water and stormwater management, tailored to our customers’ requirements, with respect for those around us and the environment.

AQUAFIN NV

Colophon

Publisher : Jan Goossens, Dijkstraat 8 - 2630 Aartselaar Graphic design: altera Photography : Misjel Decleer, Frederik Beyens, Frank Resseler, Shutterstock and Aquafin NV

The 2019 annual report is also available in Dutch. Additional paper copies can be ordered via info@aquafin.be

Aquafin NV, Dijkstraat 8, B-2630 Aartselaar tel. 03 450 45 11 l whatsapp 0474 56 39 12 e-mail: info@aquafin.be l www.aquafin.be