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Annual Report 1999

AALBERTSINDUSTRIESN.V. ANNUALREPORT 1999

AALBERTSINDUSTRIESN.V. ANNUALREPORT 1999 3

5 Profile

6 Key data (in NLG)

7 Key data (in EUR)

8 Strategy

9 Management

11 The Aalberts Industries share

12 Report of the supervisory board

13 Report of the executive board

20 Information on group activities

25 Annual Accounts 1999

26 Consolidated balance sheet as at 31 December 1999

27 Consolidated profit and loss account for 1999

28 Consolidated cash flow statement for 1999

29 Notes to the consolidated annual accounts

30 Notes to the consolidated balance sheet and profit and loss account

33 Company balance sheet as at 31 December 1999

33 Company profit and loss account for 1999

34 Notes to the company balance sheet and profit and loss account

37 Supplementary information

38 Auditor’s report

39 Addresses

Contents

AALBERTSINDUSTRIESN.V. ANNUAL REPORT 19994

Profile

Industrial ServicesThe activities in the field of Industrial Services

comprise the development, production, treatmentand sales of complex components for high-gradeindustrial end products, on the basis of customerspecifications.

The components and services are supplied to alarge number of market sectors, notably in the fieldof telecommunications, data communication, computer peripheral equipment, the semiconductorindustry, aircraft production, automotive, medicalequipment, offshore, and the defence and aluminiumindustry.

The geographic centre of these activities lies inNorthern and Western Europe.

Flow Control SystemsThe activities in the field of Flow Control

Systems comprise the development, production andsales of dispense systems (tap systems for the beer,soft drink markets and gas industry) and accessoriesfor distribution systems for water, gas, energy,heating, ventilation and cooling systems and laboratory accessories.

The products are mainly supplied to wholesalers,contractors, breweries, barrel and gas producers, thechemical and petrochemical industry and utilitycompanies.

Dispense systems are sold worldwide, whileaccessories are mainly sold in Northern and WesternEurope.

Aalberts Industries N.V. is an international industrial group with two mainactivities, Industrial Services and Flow Control Systems, occupying strong market positions in each of these activities. With a small holding company,Aalberts Industries is strongly decentralised with significant responsibilities for operational management.

Higher sales and results are realised through autonomous growth and acquisitions. Improvement in earnings per share continues to have priority inthis policy.

AALBERTSINDUSTRIESN.V. ANNUAL REPORT 1999 5

Aalberts Industries N.V.

Industrial Services Flow Control Systems

For a more detailed description of the various product groups and group companies we refer to the website ofAalberts Industries: www.aalberts.nl.

Key data in NLG

1999 1998 1997 1996 1995

Total operating income 847.7 735.9 619.6 480.8 375.8

Net sales 848.9 723.0 611.5 470.9 365.6

Operating profit 98.9 78.0 63.8 51.0 38.9

Net profit* 60.7 47.0 36.4 26.2 20.2

Depreciation 47.8 39.3 35.9 27.9 20.7

Cash flow* 108.5 86.3 72.4 54.1 40.9

Total assets 684.5 561.4 459.8 402.4 272.0

Group equity 192.6 152.1 153.7 116.7 84.8

Long-term liabilities 212.0 188.6 104.3 101.3 67.6

Net book value 314.0 232.3 191.9 171.1 119.0

Investments 60.3 37.6 42.1 36.0 29.1

The Netherlands 1,106 1,169 1,186 1,123 1,111

Other countries 2,656 2,232 1,669 1,389 533

Total 3,762 3,401 2,855 2,512 1,644

Operating profit as a percentage of net sales 11.6 10.8 10.4 10.8 10.6

Net profit* as a percentage of net sales 7.2 6.5 6.0 5.6 5.5

Group equity as a percentage of total assets 28.1 27.1 33.4 29.0 31.2

Current ratio 1.46 1.67 1.49 1.47 1.48

Ordinary shares (average) 18.0 16.2 15.8 14.2 13.6

Cumulative preference shares 1.8 1.8 _ _ _

Cash flow* 6.02 5.32 4.58 3.82 3.01

Net profit* 3.37 2.90 2.30 1.85 1.48

Dividend* 0.84 0.72 0.57 0.45 0.38

Share price at year-end 44.29 48.50 53.50 42.50 18.60

* After incorporation of the dividend on cumulative preference shares.

Result (x NLG million)

Balance sheet(x NLG million)

Tangible fixed assets(x NLG million)

Employeesat year-end

Ratios

Shares issued(x million)

Data per ordinaryshare


Key data in EUR

1999 1998 1997 1996 1995

Total operating income 384.7 333.9 281.2 218.2 170.5

Net sales 385.2 328.1 277.5 213.7 165.9

Operating profit 44.9 35.4 28.9 23.1 17.7

Net profit* 27.5 21.3 16.5 11.9 9.2

Depreciation 21.7 17.8 16.3 12.7 9.4

Cash flow* 49.2 39.2 32.8 24.5 18.6

Total assets 310.6 254.8 208.6 182.6 123.4

Group equity 87.4 69.0 69.8 52.9 38.5

Long-term liabilities 96.2 85.6 47.3 46.0 30.7

Net book value 142.5 105.4 87.1 77.6 54.0

Investments 27.4 17.1 19.1 16.3 13.2

The Netherlands 1,106 1,169 1,186 1,123 1,111

Other countries 2,656 2,232 1,669 1,389 533

Total 3,762 3,401 2,855 2,512 1,644

Operating profit as a percentage of net sales 11.6 10.8 10.4 10.8 10.6

Net profit* as a percentage of net sales 7.2 6.5 6.0 5.6 5.5

Group equity as a percentage of total assets 28.1 27.1 33.4 29.0 31.2

Current ratio 1.46 1.67 1.49 1.47 1.48

Ordinary shares (average) 18.0 16.2 15.8 14.2 13.6

Cumulative preference shares 1.8 1.8 _ _ _

Cash flow* 2.73 2.41 2.08 1.73 1.37

Net profit* 1.53 1.32 1.04 0.84 0.67

Dividend* 0.38 0.33 0.26 0.20 0.17

Share price at year-end 20.10 22.01 24.28 19.29 8.44

* After incorporation of the dividend on cumulative preference shares.

Result (x EUR million)

Balance sheet(x EUR million)

Tangible fixed assets(x EUR million)

Employeesat year-end

Ratios

Shares issued(x million)

Data per ordinaryshare



Strategy

The strategy of Aalberts Industries is aimed atcontinuity of the growth at higher than average market levels. Aalberts Industries has managed tosuccessfully implement this strategy, in the interestof every party involved with the company, ever sinceits introduction on the AEX-Stock Exchange (in March 1987). In implementing this strategy,the goals remain unchanged:

O Growth of earnings per shareGrowth of earnings per share is the primary

objective. In the past twelve years, since the introduction on the stock exchange in 1987, thisgrowth has on average been around 20% per year.

O Balanced distribution of salesA balanced distribution of sales between the

various group activities and a very large number ofproducts, markets and niches, countries and businesscontacts strongly contribute to continuity. Thismakes Aalberts Industries less dependent on developments within one market segment, therebyalso reducing shareholders’ risks. Growth of salesoutside Europe, regarded as a necessity, is in accordance with this goal.

O SolvencyAs a result of the expansion-focused strategy and

the strong priority given to the growth of earningsper share, optimal use is made of Aalberts Industries’financing capacities. Part of the strategy is to maintain a healthy minimum of group equity as apercentage of total assets of at least 30%. An incidental departure from this minimum is, however,possible. This will result in a maximum return onthe capital invested by the shareholders with nomore than a healthy portion of risk.

The strategy is implemented per group activity,and as such recognisable for all group

companies. These companies develop theirown operational targets on the basis of this

strategy. In return, these targets contribute to the further development

of the overall strategy.

Industrial ServicesThe strategy for the Industrial Services activities

is aimed at supplying high-grade specialised technologies to the market for the production ofcomplex products, according to customer specifications. Technology is thereby regarded asmore important than providing pure productioncapacity. Aalberts Industries aims to have a top 3position in the various niche markets.

In the field of metal processing, the strategy isaimed at the building of a European network of service centres, where both standard treatments andhighly specialised applications are available for theclient, at a short distance and with the shortest possible throughput times.

Flow Control SystemsThe strategy for Flow Control Systems develops

along two tracks. On the one hand volume growth,through autonomous development and throughacquisitions, to realise even better use of both thetotal production capacity and the international distribution network. This leads to a further improvement of productivity and cost savings. On the other hand, strengthening of the position inniche markets. This concerns advanced productswhich complement the existing basic packages.These niche markets are the markets where a newtechnology is applied first.

An important element for the strategy of FlowControl Systems is the technology. AalbertsIndustries thereby focuses on three developments:O From components to systemsO Plastic materials, in addition to brass/copperO Intelligent products and systems in addition to

existing ones

Interaction between the basic products and theso-called niche products takes place both on a commercial and technological level.

The executive board, taking into account theinterests of all parties involved and the position of the company in its various markets, tries to communicate as clearly and openly as possible withregard to its strategy, goals and policies.


Supervisory board

Management

General managers group companies

P.W.A. Niessen, Chairman

C.J. Brakel

A.B. van Luyk

F.X. Noz

J. Aalberts, President & CEO

B.P. Bolkenstein, Managing Director

J. Eijgendaal, Financial Director

R.W. Jaquet, Director Aalberts Industries Finance B.V.

A.J. Walstock Adex

D. Gross Broen group

Th. Wollschlaeger Dispense Systems

R.S. Wamhser Hauck group

H. van Brug Kluin

J.A.M. van Knegsel Van Knegsel

J.J. Wammes Mamesta

H.A. Zantinge / J.J. Zitman Mifa group

J.L. Huveteau Morel group

J.Ph. Admont Nowak

G.J. Suringh Overeem/Leco

K. Meyer Rossweiner

N. Reinhardt Seppelfricke group

M. Wilfer Simplex Wilfer

Chr. Baumann TTI group

W.A. Pelsma VSH group

Management


1999 1998 1997

Highest share price in EUR 24.50 29.27 28.04Lowest share price in EUR 15.20 17.29 18.15Share price at year-end in EUR 20.10 22.01 24.28Price/earnings ratio (based on share price at year-end) 13 17 23Average daily turnover (number of shares) 71,510 41,749 50,721Shares issued at year-end x million 18.9 16.2 16.1Average number of shares issued x million 18.0 16.2 15.8

Aalberts Industries has a stock option scheme for the directors within the Aalberts Industries group, tested by the Securities Board (STE) of the Netherlands. At year-end 1999, 82,300 options had been granted in connection with this scheme.

The Aalberts Industries share

Listing

Share issues

The 18.9 million ordinary shares AalbertsIndustries N.V. of NLG 0.10 par value are listed onthe AEX-Stock Exchange. As from 2 February 2000,the Aalberts Industries shares are also traded on the regulated unofficial exchange and Xetra, theelectronic trading system, both of the Deutsche Börse AG in Frankfurt.

The 1.8 million cumulative preference sharesAalberts Industries N.V. are held by the ‘StichtingAdministratiekantoor FinancieringspreferenteAandelen Aalberts Industries’, which has certifiedthe shares. The certificates are held by a limitednumber of institutional parties.

In May 1999, 2.5 million ordinary shares wereissued for the acquisition of the heat treatment activities of the TTI group (formerly Senior HeatTreatment).

In addition, a total of 199,522 new ordinaryshares were issued as a result of shareholders optingfor stock dividend and the exercising of personneloptions.

Spread Aalberts Industries shares Spread according to shareholder groups

Stock market information

Options

L 70% BeneluxL 15% United

KingdomL 7% United

States ofAmerica

L 8% Rest of theworld

L 25% Private investors

L 48% Institutionalinvestors

L 27% Other

Report of the supervisory board to the shareholders

We hereby present you with the annual accountsfor 1999 of Aalberts Industries N.V. as drawn up bythe executive board. These, subsequent to audit byPricewaterhouseCoopers N.V., have been adopted by our Board in accordance with the executiveboard’s proposal. We propose the approval of theannual accounts for 1999 in accordance with thepapers here submitted, which approval will result in the discharge of the executive board and thesupervisory board, as laid down in article 29, sub 6 of the Articles of Association.

On approval of the annual accounts and theappropriation of profits included therein, a dividendof NLG 0.84 per ordinary share of NLG 0.10 par valuewill be paid for the year 1999. The dividend can bepaid out in cash, or, at the choice of the shareholder,in shares to be charged to the share premiumaccount or to the unappropriated profit.

After the General Meeting of Shareholders, held on 15 April 1999, Mr A.B. van Luyk was re-appointed as member of the supervisory board ofthe company. In addition, Mr C.J. Brakel wasappointed as member of the supervisory board, whoreplaces Mr P.J. Vinken, who retired due to hisreaching the statutory age limit. The supervisoryboard would hereby like to thank Mr P.J. Vinken forhis constructive contributions and pleasant co-operation.

After the General Meeting of Shareholders, tobe held on 20 April 2000, Mr P.W.A. Niessen willretire according to the rotation schedule; he is available for re-election, and the supervisory boardintends to re-appoint Mr Niessen. At his ownrequest also Mr. F.X. Noz will retire; the intention isto appoint Mr. A.H. Land.

The supervisory board met six times in 1999.Company visits were made to the group companiesBGT in Eindhoven and Mifa in Venlo. The supervisory board will, as usual, also visit a numberof companies in 2000.

In addition to the continued attention for thestate of affairs within the various group activities,the board discussed in particular the updated strategic plan. In doing so, much attention was givento the organisation and decentralised structure, the speed of the growth and the financing of thegrowth. The continuity and consistency of the policies followed, now and in the future, areconsidered to be of major importance by the supervisory board.

The supervisory board would like to express itsappreciation for the efforts made by the executiveboard and the employees during the year underreview.

Langbroek, 23 February 2000

P.W.A. Niessen, Chairman

C.J. BrakelA.B. van LuykF.X. Noz



Report of the executive board

With a 17% sales growth, a 29% net profitincrease and an increase of the operating profit of27%, the results of Aalberts Industries in 1999 againwere in line with the trend of the past years. The net return on the realised sales amounted to7.2%. The fact that, in spite of this, the growthdevelopment does not completely meet expectations,is caused by earnings per share increase (after incorporation of the dividend on cumulative preference shares), remaining limited to 16%.Although this was within the set goal, it was lowerthan the growth of the past years.

Especially in the first six months of 1999,Aalberts Industries was confronted with difficultmarket conditions in a number of markets. As aresult of this, the budgeted growth targets, both concerning sales and returns, came under pressure ata number of activities. Contrary to the general trend,the industrial markets in Europe underperformed inthe first six months of 1999. From September, theAalberts Industries companies were able to report animprovement which became more clear towards theend of the year, and which continued in the firstmonths of the year 2000.

Investments in tangible fixed assets in 1999amounted to NLG 60.3 million. Investments in newtechnologies form one of the important success factors of the company. Major investments realisedin the past year are the capacity expansions and newtechnologies in various metal processing facilities inEurope and the building of a new facility for theproduction of laboratory accessories. In addition, anumber of investments were made as a result of themerging of various production facilities in Germany,France and the United States of America.

Investments

Operating profit(x NLG million)Net profit(x NLG million)

100

90

80

70

60

50

40

30

20

10

1994 1995 1996 1997 1998 1999

1000

900

800

700

600

500

400

300

200

100

1994 1995 1996 1997 1998 1999

Net sales (x NLG million)

Cash flow (x NLG million)Investments(x NLG million)

100

90

80

70

60

50

40

30

20

10

1994 1995 1996 1997 1998 1999

Technology and market

development


In 1999, an amount equal to approximately2.5% of sales was invested in R&D activities. Thesecosts were, as ever, charged directly to the profit andloss account. The R&D activities comprise bothproduct development and new and improved production technologies and methods. The in-houseR&D efforts are complemented by the acquisition ortake-over of patents and/or exclusive licences. As inprevious years, 1999 produced a number of disputeswith competitors regarding a number of technicalinventions and patents. In order to strengthen theprotection of our own technical know-how, thepatents policy of the company will be further developed in the coming period.

Opening up markets in many cases runs parallelwith the development of new products. Using existing technologies for new applications mostlyresults in an alternative product. Entering a newgeographical market can be done in conjunctionwith adaptation of the pr oduct to local conditionsand demands.

Market development, both in the field ofIndustrial Services and Flow Control Systems,comprises long-term projects, the costs of which are charged directly to the profit and loss account of the current year.

In 1999, this also concerned start of the development of the telecommunications market within the Industrial Services activities, the development of the US market for gas valves, thesetting up of an own sales organisation in Australia,study of own production of industrial ball valves inthe Russian Federation, the world’s largest marketfor district heating.

Two internet projects were started up in 1999.The first project concerns the realisation of websitesfor all activities. This project was completed at year-end 1999. In addition, a project was started tostudy the possibilities of online sales via the internet;the first results are expected in the first half of 2000.In 1999, online sales worth approximately NLG 30million were realised through so-called intranet/EDI systems.

Acquisitions

Events after the balancesheet date


In 1999, acquisitions were realised with totalsales of approximately NLG 100 million, of whichapproximately NLG 75 million was included in theconsolidation. The largest acquisition in 1999 was the take-over of the TTI group, the surface treatment activities of the UK-based SeniorEngineering Group. This concerns a network of service centres in the United Kingdom and Spainwhich will form part of the European network whichAalberts Industries has been building for some years.

Broen, the Danish group company, at the startof the year acquired two producers of laboratoryaccessories, one in the United Kingdom and one inGermany. This strengthened Broen’s position asworld market leader in the field of laboratoryaccessories.

In the course of the second half of the year, twosmaller metal processing activities were acquired,one in Spain and one in the United kingdom. These activities were integrated in the existing production facilities of the TTI group in Madrid andBirmingham, respectively.

The acquisition of US-based company Taprite-Fassco meant an expansion of the dispense activitiesin the United States and the obtaining of an important market position in the soft drink market.

In connection with the intensified co-operationwith Dutch-based ASM Lithography, maker of production equipment for the chip industry,Van Knegsel was acquired. A substantial expansion programme is now in full progress at this company.

In 1999, the company SDB Industries in ‘s-Hertogenbosch was disposed by way of a management buy-out. SDB, producer of displaycases, no longer formed part of Aalberts Industries’strategic activities.

In France, at year-end 1999, the activities of J.C. Nicolas (fittings for the DIY market) weretransferred to a new company, in which a minorityinterest was acquired.

The acquisition efforts will be continued unabated in the coming years. On the basis of thisstrategy, the increasing acquisition opportunities will be selectively taken in the coming years.

At the start of 2000, Aalberts Industriesannounced the acquisition of the UK-based company Nitriding Services, which will be part ofthe TTI group.

Aalberts Industries’ strong dynamics demandcontinuous adaptation of its organisation and a highdegree of flexibility of its employees in order to keepfunctioning optimally within this perpetuallymoving organisation. At the same time, these dynamics offer the employees opportunities to further develop themselves within the organisationand take on new tasks and challenges.

In the second half of 1999, a first start was madewith the development of an internal managementdevelopment programme. The aim is to fill the largest possible part of the key positions within theAalberts Industries group from internal sources.Recruitment and training must initially take place atthe basis, in the group companies. In the first half of2000, we shall be taking stock of the managementpotential present in the group.

Much attention was again given to the integration of the newly acquired companies. Thepolicy with regard to personnel and organisation isthereby aimed at maintaining, as much as possible,the own identity within the framework of thegrowth targets set by the Aalberts Industries group.

In the second half of 1999, it was decided toplace all activities in the field of Dispense Systemsunder one managing director. The new director,from one of the German group companies, wasappointed as at 1 October 1999, and will take onthe management of all Dispense Systems activitiesduring the course of the first half of 2000.

A new managing director was recruited for theVSH group, while the current managing directorwill concentrate on technology and production.

In 1999 the number of employees on balanceincreased by 361 to 3,762 (1998: 3,401) - mainly asa result of acquisitions - 1,106 of which in theNetherlands.

Geographic spread of personnel

The continuing success of Aalberts Industries isand will remain the result of the considerable effortsof the employees. Quality, creativity and loyalty ofthe employees are the indispensable ingredients forthe future of Aalberts Industries. The executiveboard would once more like to thank all employeesfor making it possible to achieve these results.

Organisation and employees


L The NetherlandsL GermanyL United

KingdomL United States of

AmericaL SpainL FranceL DenmarkL Rest of the world


Profit appropriation

Prospects

As a result of a share issue in the first half of1999, stock dividend and the exercise of stockoptions, the number of outstanding ordinary sharesat year-end 1999 increased to 18.9 million. On thebasis of the average number of outstanding shares,earnings per ordinary share of EUR 1.53 (NLG 3,37)were realised.

To finance the acquisition of the TTI group, 2.5 million shares were placed, which are entitled todividend as from 1999.

At the Annual General Meeting of Shareholders,it will be proposed that the dividend for 1999 is setat EUR 0.38 (NLG 0.84) per ordinary share of NLG 0.10 par value in cash, or, at the choice of theshareholders, in ordinary shares either charged tothe tax-exempt share premium or to the unappropriated profit. This increases the dividend by 17%. The percentage of the stock dividend shall be announced mid-March 2000.

Aalberts Industries in 1999 again proved to beable to continue the growth trend, under difficultcircumstances, within the determined range.

For the executive board of Aalberts Industries,this again proved the value of the strategy, withoutlosing sight of the fact that continuous alertness andadaptation to the quickly changing circumstancesremains important. With growing opportunities inthe field of Industrial Services, also in the supply ofcomplex components for the telecommunication andsemiconductor industries, and a strong Europeanmarket position in the field of Flow ControlSystems, we are looking to the future with confidence.

The start in 2000 and the signals from the majority of the markets in which Aalberts Industriesis active, support the expectation that AalbertsIndustries, barring unforeseen circumstances, will beable to realise growth of earnings per share in 2000at the same level as that of the past years.


J. Aalberts, President & CEO

B.P. Bolkenstein, Managing Director

5.00

4.50

4.00

3.50

3.00

2.50

2.00

1.50

1.00

0.50

1994 1995 1996 1997 1998 1999

Earnings perordinary share(in NLG)

1.00

0.90

0.80

0.70

0.60

0.50

0.40

0.30

0.20

0.10

1994 1995 1996 1997 1998 1999

Dividend(in NLG)

Information on group activities

The Industrial Services activities realised sales of NLG 282 million in 1999;this meant sales growth of 18% (1998: NLG 238 million). This includes the negative effect of the disposal of SDB Industries (1998: sales of NLG 15 million). The group activities’ share of total Aalberts Industries sales remainedalmost unchanged: approximately 35%. The operating profit amounted toapproximately 15%.

The number of employees on balance increased, as a result of acquisitionsand increasing production in the second half of 1999, to 1,555 (average of1,406). In 1999, investments were made for a total of approximately NLG 33million.

To make matters more clear, the names of various activities which form partof Industrial Services were adapted, without prejudice to their actual activities.

During a large part of the year, existing marketslevelled off, especially the car industry showed avolatile picture. The acquisition of the TTI groupmeant a substantial expansion of the Europeannetwork of service centres. Unfortunately, the industries in which the TTI group is active were alsoconfronted with less favourable market develop-ments in 1999.

Exchange of information and merging of activities led to strengthening of the European market position. Aalberts Industries, despite itsmodest size, is one of the leading European players.The efforts in the field of new technologies, including plasma coatings, are continued unabated,and a steady market penetration will in the comingyears contribute to the building of a leading positionin this niche market.

This concerns the production of complex customer specific components, tools and/or advanced assemblies. Most of the activities in thiscluster could only realise limited sales growth. In spite of this, return on sales increased slightly.Two niche markets were also developed in 1999,which produce important growth potential for thecoming years: the supply of components to the telecommunications industry, especially the mobile

telecommunication and data communication (including filter systems for data separation andwave guides) and the supply of complex frame systems for the production equipment for the semiconductor(chip)industry.

In both niche markets, further investments willbe made in the year 2000, in the market as well as inthe production facilities.

Special Components

Material Technology


Industrial Services

Flow Control Systems Sales growth of the group activity Flow Control Systems in 1999 amountedto approximately 17%. Roughly half of this increase was accounted for by thecompanies acquired in 1999. With approximately NLG 567 million (1998: NLG 485 million), sales of Flow Control Systems account for more than 65% oftotal sales of Aalberts Industries.

The operating profit of Flow Control Systems amounted to more than 9%.

The total number of employees remained stable at approximately 2,200. We should note that, in the Netherlands and Germany in particular, the numberof employees was substantially reduced. On the other hand, the number ofemployees in the United States of America increased by more than 100 as aresult of the take-over of Taprite-Fassco.

Investments doubled in 1999, compared to 1998, to approximately NLG 27million.


The developments of the second half of 1998continued during 1999. With the exception of theUS market, all markets were confronted with declining demand. The price decline, started by thecompetition, could only be partly compensated byfurther cost cuttings, as a result of which profitabilitycame under pressure for some of the activities.

The acquisition of Taprite-Fassco early in 1999meant a substantial strengthening of the position inthe soft drink market, mainly as a result of the closeco-operation between Taprite-Fassco and Coca-Cola.The acquisition means that Aalberts Industries isnow world market leader in the field of pressurevalves for both the beer and the soft drink market.

In 1999, despite the weak market in Europe, anumber of smaller but important breakthroughs wererealised in the soft drink market. Many efforts wereaimed at acquiring one of the largest projects of thecoming years in the beer market. With the actualobtaining of this long-term project at the start ofthis year, these efforts were crowned with success.

As from October 1999, the integration of allDispense Systems activities was started with theappointment of a new Managing Director. The aimis to make the whole organisation more efficient, so as to be better prepared for the growth and challenges of the coming years.

The market developments within the Valves & Fittings activities illustrate a weaker first sixmonths, and a clear increase of demand fromSeptember 1999. This improvement continued inearly 2000. Much attention was given in 1999 to the integration of the companies acquired in 1998and early 1999. In Germany, all facilities for the production of laboratory accessories were combinedin one location, while the product programmes ofthe various companies were integrated. The Germangroup companies Seppelfricke and RossweinerArmaturen integrated parts of their production,including the hot pressing of brass press parts whichwas concentrated in Gelsenkirchen.

Rossweiner introduced a new model thermostically controlled tap at year-end 1999. Also owing to the export activities through theFrench, Danish and Dutch sister companies, theintroduction may already be called a success. As aresult of the acquisition in 1998 of the Simplex/Rossweiner group, Aalberts Industries has proved tobe able to substantially strengthen its position in themarket for heating products for the coming years.

In the field of production innovation, a largenumber of new and/or improved products was again introduced. VSH successfully marketed theimproved Multicon system. Simplex Wilfer was ableto complete the technical development of a newplastic fittings programme in 1999. These productswill be introduced in the market in the first half of2000. The laboratory market continued its positivedevelopment in 1999. The new sales organisation inthe USA was able to further build on its marketposition. In Asia, the own sales organisations inSingapore and Malaysia successfully benefited fromthe recovery of most of the Asian markets. ForAustralia, an own sales organisation started, whichin addition to laboratory accessories will also sellother products from the Aalberts Industries range.

The intercompany activities in the field of purchasing produced substantial cost savings, andwill continue unabated in the coming years.Standardisation and co-ordination of purchasing,development and production activities and furtherefficiency will enable the company to realise furthercost savings.

Dispense Systems

Valves & Fittings


Annual Accounts 1999


Consolidated balance sheet as at 31 December 1999before profit appropriation (x 1,000)

1999 1998 1999 1998NLG NLG EUR EUR

Tangible fixed assets:Land and buildings 114,159 102,495 51,803 46,510

Machinery and equipment 176,120 112,217 79,920 50,922

Other tangible fixed assets 17,188 16,686 7,800 7,572

Tangible fixed assets under construction 6,495 930 2,947 422

313,962 232,328 142,470 105,426

Financial fixed assets 6,010 4,301 2,727 1,952

319,972 236,629 145,197 107,378StocksRaw materials 65,096 55,320 29,539 25,103

Work in progress 61,956 75,763 28,114 34,380

Finished goods 89,158 70,416 40,458 31,953

Other stocks 13,196 10,388 5,989 4,714

229,406 211,887 104,100 96,150

DebtorsTrade debtors 113,214 90,377 51,374 41,011

Other debtors, prepayments and accrued income 21,775 22,404 9,882 10,166

134,989 112,781 61,256 51,177

Cash at bank and in hand 133 103 60 47

364,528 324,771 165,416 147,374

Total assets 684,500 561,400 310,613 254,752

Group equityShareholders’ equity 188,929 148,425 85,732 67,352

Minority interest 3,702 3,642 1,680 1,653

192,631 152,067 87,412 69,005ProvisionsPensions 9,214 7,596 4,181 3,447

Deferred taxes 13,710 12,395 6,222 5,625

Other provisions 7,767 6,130 3,524 2,781

30,691 26,121 13,927 11,853

Long-term liabilities 211,978 188,609 96,191 85,587

Current liabilitiesCredit institutions 75,278 49,820 34,159 22,607

Repayment commitment on long-term liabilities 46,770 33,346 21,223 15,132

Trade creditors 64,542 50,490 29,288 22,911

Taxes and social security charges 11,897 16,739 5,399 7,596

Other liabilities, accruals and deferred income 50,713 44,208 23,014 20,061

249,200 194,603 113,083 88,307

Total liabilities 684,500 561,400 310,613 254,752

Assets

Fixed assets:

Current assets:

Liabilities


1999 1998 1999 1998NLG NLG EUR EUR

Net sales 848,915 722,955 385,221 328,063Movement in stocks of finished goods

and work in progress -6,728 8,370 -3,053 3,798

Own production capitalised 805 770 365 349

Other operating income 4,692 3,828 2,129 1,737

-1,231 12,968 -559 5,884

Total operating income 847,684 735,923 384,662 333,947

Raw materials 245,474 225,126 111,391 102,158

Work subcontracted 15,887 16,084 7,209 7,299

Personnel expenses 291,446 251,822 132,252 114,272

Depreciation of tangible fixed assets 47,795 39,284 21,688 17,826

Other operating expenses 148,216 125,624 67,258 57,005

Total operating expenses 748,818 657,940 339,798 298,560

Operating profit 98,866 77,983 44,864 35,387Interest payable 15,402 11,902 6,990 5,401

Group profit on ordinary activities before taxation 83,464 66,081 37,874 29,986

Taxes on profit on ordinary activities 19,704 17,608 8,941 7,990

Share in result of subsidiaries 2,548 419 1,156 190

Group profit on ordinary activities after taxation 66,308 48,892 30,089 22,186

Minority interest 1,286 1,612 583 731

Net profit 65,022 47,280 29,506 21,455

Dividend on cumulative preference shares 4,362 250 1,980 114

Net profit for ordinary shareholders 60,660 47,030 27,526 21,341


Consolidated profit and loss account for 1999(x 1.000)

1999 1998 1999 1998NLG NLG EUR EUR

Operating profit 98,866 77,983 44,864 35,387Depreciation of tangible fixed assets 47,795 39,284 21,688 17,826

Changes in provisions 1,964 -240 891 -109

Changes in working capital:Change in debtors -4,802 4,214 -2,179 1,912

Change in stocks -6,782 -9,269 -3,078 -4,206

Change in current liabilities -20,971 -26,347 -9,516 -11,956

Changes in working capital -32,555 -31,402 -14,773 -14,250

Cash flow from operations 116,070 85,625 52,670 38,854

Interest payable -15,402 -11,902 -6,990 -5,401

Taxation -26,203 -18,561 -11,889 -8,423

Cash flow from operating activities 74,465 55,162 33,791 25,030

Acquisitions/disposals of group companies -186,299 -188,281 -84,539 -85,438

Investments in tangible fixed assets -57,297 -37,484 -26,000 -17,009

Disposals of tangible fixed assets 5,083 5,429 2,307 2,464

Investments in financial fixed assets -1,709 -2,431 -776 -1,103

Cash flow from investing activities -240,222 -222,767 -109,008 -101,086

Receipt from long-term liabilities 65,562 111,250 29,751 50,483

Issue of shares 116,010 92,680 52,643 42,056

Repayments on long-term liabilities -33,769 -26,450 -15,324 -12,002

Distribution of dividends -6,062 -3,141 -2,751 -1,425

Change in minority interest -1,412 -1,466 -641 -665

Cash flow from financing activities 140,329 172,873 63,678 78,447

Net cash flow -25,428 5,268 -11,539 2,391

Consolidated cash flow statement for 1999(x 1.000)

Cash flow from operatingactivities

Cash flowfrom investingactivities

Cash flowfrom financingactivities



Notes to the consolidated annual accounts

The consolidated annual accounts include the financial data of Aalberts Industries N.V. and its group companies in accordance with the uniform valuation principles and using the integral consolidation method.Intercompany balances and intercompany transactions have been eliminated.

Newly acquired group companies are included at their net asset value upon consolidation. Where theacquisition price differs from the net asset value, the difference is debited or credited directly to shareholders’equity.

Minority interests in the group result and in the group equity are accounted for separately.

The annual accounts of group companies established outside the Netherlands are translated at rates rulingat the end of the financial year. Exchange rate differences are credited or debited to shareholders’ equity.Accounts receivable and liabilities stated in foreign currencies are translated into guilders at the exchangerates ruling at the end of the financial year. These exchange rate differences are credited or debited to the profit and loss account.

General - Assets and liabilities are carried at par value, as far as not indicated otherwise.Tangible fixed assets - Tangible fixed assets are carried at cost value less investment premiums and lessaccumulated depreciation based on the estimated economic life of the assets concerned. Depreciation is determined according to the straight-line method.Financial fixed assets - Investments in companies whose annual accounts are not included in the consolidation are carried at net asset value.Stocks - Stocks of raw materials are valued at the lower of purchase price and market value. Work in progress and finished products manufactured to order are carried at market value less future costs. If produced on stock, work in progress and finished products are valued at full manufacturing cost. A provision for obsolescence has been deducted where necessary.Debtors - Receivables are carried at par value less a provision for bad and doubtful debts.Provisions - The provision for pensions relates to pension commitments determined on an actuarial basis.The provision for deferred tax liabilities relates to corporation tax payable in the future as a result of differences between the valuation of assets and liabilities in the annual accounts and for tax purposes. This provision is calculated at the nominal rate, except for land and buildings for which provision has beenaccounted using the market value (20%). The other provisions have been made in connection with liabilitiesand risks related to normal business operations. The provisions are mainly long-term.

Net sales - Net sales include the proceeds of the sale of goods and services to third parties excluding turnovertaxes, discounts and bonuses.Other operating income - This item includes the proceeds of the sale of tangible fixed assets, as well as development grants.Depreciation of tangible fixed assets - Depreciation of tangible fixed assets, determined according to the straight-line method, is based on the expected economic life of the asset concerned. Other operating expenses - The R & D expenses are charged directly to the profit and loss account.Taxation - Taxes on profits are stated as the tax charge calculated on the pre-tax result at the applicable rate.The calculation takes into account tax-exempt profit constituents, utilisable loss-carry forwards and fully orpartly deductible costs.Share in result of subsidiaries - The result of subsidiaries is accounted as the share in the net profit of subsidiaries not included in the consolidation, and the profit realised on the disposal of subsidiaries.

The cash flow statement is drawn up using the indirect method. The cost of the acquired group companies, less the available cash, is recorded under cash flow from investing activities. The changes in assetsand liabilities following from acquisitions have been eliminated from the cash flows in consideration of theseassets and liabilities. These changes have been incorporated in the cash flow from investing activities under’Acquisitions/disposals of group companies’.

The net cash flow consists of the net change of cash and credit institutions balances in comparison withthe previous year under review.

Consolidation principles

Principles for thetranslation of

foreign currencies

Principles for thevaluation of assets

and liabilities

Principlesfor the

determination ofthe result

Notes to the consolidated cash

flow statement

Notes to the consolidated balance sheet and profit and loss account(x NLG 1,000)

Land Machinery Other Tangible Total

and and tangible fixed assetsbuildings equipment fixed assets under con-

structionNet book value as at the

beginning of the financial yearCost 165,006 417,321 55,836 930 639,093Accumulated depreciation -62,511 -305,104 -39,150 – -406,765

102,495 112,217 16,686 930 232,328Changes in net book valueAcquisitions 7,242 66,478 474 – 74,194Investments 10,790 35,346 8,617 5,565 60,318Disposals -569 -3,295 -1,219 – -5,083Depreciation -5,799 -34,626 -7,370 – -47,795

11,664 63,903 502 5,565 81,634Net book value as at the end

of the financial yearCost 181,109 543,294 57,386 6,495 788,284Accumulated depreciation -66,950 -367,174 -40,198 – -474,322

114,159 176,120 17,188 6,495 313,962Buildings are depreciated over a maximum period of 33 years. Machinery and equipment are depreciated overperiods ranging from 5 to 15 years. Other tangible fixed assets are depreciated over a period from 3 to 5 years. At year-end, group companies had investment commitments outstanding in respect of tangible fixed assets to an amount of NLG 10,959. NLG 6,495 has been capitalised in the balance sheet as advance payment.

Participations Amounts receivable Total

from participants

Balance as at the beginning of the financial year 1,978 2,323 4,301

Acquisitions 717 1,115 1,832Disposals and other changes -269 146 -123

Balance as at the end of the financial year 2,426 3,584 6,010

This includes the non-consolidated group companies:- Pick & Pack, Auterive, France (10%)- Seppelfricke Austria Ges. m.b.H., Vienna, Austria- Simplex Rossweiner Polska Sp.z.o.o., Wroclaw, PolandIn 1999 DSI S.A.R.L., Strasbourg (France) was disposed.

Tangible fixedassets

Financial fixedassets


Shareholders’ equityFor notes on shareholders’ equity please refer to the notes to the company balance sheet.Minority interest 1999 1998

Balance as at the beginning of the financial year 3,642 3,496Acquisitions 186 -31

Distribution of dividend -1,412 -1,435

Profit for the year 1,286 1,612

Balance as at the end of the financial year 3,702 3,642

Group equity


31 December 1999 31 December 1998

Term ranging from one to five years 186,880 156,955

Term longer than five years 25,098 31,654

Balance as at the end of the financial year 211,978 188,609

The long-term liabilities consist of loans from credit institutions with interest rates ranging from 3.38% to 7.70%.The repayment commitment within one year is NLG 46,770 (at year-end 1998: NLG 33,346) and is included inthe current liabilities.

Credit institutionsA sum of NLG 47,813 in respect of cash loans is included.

Off-balance sheet commitmentsIt has been agreed with the Dutch bank relations that no securities will be provided to third parties withoutthe banks’ permission. The real property of the German group company in Prenzlau as well as the real propertyin Denmark are secured through a mortgage. Furthermore some financial covenants have been agreed uponwith financial institutions.

At the end of the year under review, the group has provided guarantees to a total amount of NLG 121.

In connection with a recent acquisition, a repayment obligation exists which depends on the future financialdevelopments of the company concerned.

At year-end 1999 the annual commitments under lease and rent commitments are as follows:

31 December 1999 31 December 1998

Expiring within one year 9,553 262Expiring between one and five years 4,451 4,550

Expiring after five years 1,688 201

Annual commitment 15,692 5,013

Long-termliabilities

Current liabilities

Net sales Geographical breakdown: 1999 % 1998 %

Germany 355,443 42 301,545 42

The Netherlands 157,364 19 161,264 22

France 66,306 8 68,375 10

United Kingdom 62,688 7 26,486 4

United States of America 42,512 5 10,220 1

Eastern Europe 26,334 3 25,442 4

Denmark 23,685 3 28,020 4

Sweden 18,155 2 16,766 2

Belgium 17,183 2 19,344 3

Spain 13,804 2 1,413 0

Austria 12,801 1 10,471 1

Switzerland 7,387 1 11,534 1

Italy 6,968 1 8,715 1

Other European countries 13,405 1 14,293 2

Other countries outside Europe 24,880 3 19,067 3

Total 848,915 100 722,955 100

1999 1998

Wages and salaries 235,549 202,456

Social security charges 38,028 28,952

Pension charges 9,089 7,871

Other personnel expenses 8,780 12,543

Totaal 291,446 251,822

In the year under review, the average number of full-time employees amounted to 3,613 (1998: 3,190).

In 1999, remuneration of the executive boardamounted to NLG 1,162 (1998: NLG 1,065).

In 1999, remuneration of the supervisory board members amounted to NLG 171 (1998: NLG 161).

The effective tax rate in the year under review amounted to 23.6% (1998: 26.6%) as a result of the use of fiscalfacilities and loss-carry forwards.

The average dividend on the cumulative preference shares in the year under review amounted to 4.9%.

Personnel expenses

Number of employees

Remuneration of theexecutive board

Remuneration of thesupervisory board

Taxation

Dividend on cumulative

preference shares

Financial instruments andrisk management

Currency riskmanagement

Interest rate riskmanagement


In order to cover the risk from certain purchasing and sales transactions, the Aalberts Industries group usescurrency forward transactions. This prevents future net cash flows being negatively influenced by changingexchange rates in which the transactions were closed. These contracts mainly concern the US dollar.At year-end 1999, this involved an approximate amount of NLG 3.5 million.

Financing with long-term debt is mostly based on fixed interest rate percentages; short-term financing takesplace at variable interest rates. Interest rate instruments are only applied on the basis of underlying positions.Future Rate Agreements are used for the management of interest rate risks.

1999 1998 1999 1998NLG NLG EUR EUR

Net profit of subsidiaries 64,759 46,770 29,387 21,223

Net company profit 263 510 119 232

Net profit 65,022 47,280 29,506 21,455


Company balance sheet as at 31 December 1999before profit appropriation (x 1,000)

1999 1998 1999 1998NLG NLG EUR EUR

Tangible fixed assetsOther tangible fixed assets 757 1,003 344 455

Financial fixed assetsParticipating interests in group companies 217,887 140,392 98,872 63,707

218,644 141,395 99,216 64,162

DebtorsOther debtors, prepayments and accrued income 6,728 4,060 3,053 1,842

Cash at bank and in hand 297 5,780 135 2,623

7,025 9,840 3,188 4,465

Total assets 225,669 151,235 102,404 68,627

Shareholders’ equityIssued capital 2,433 2,163 1,104 982

Share premium account 245,600 130,980 111,448 59,436

Cumulative preference shares 89,460 89,460 40,595 40,595

Other reserves -209,224 -121,208 -94,941 -55,002

Unappropriated profit 60,660 47,030 27,526 21,341

188,929 148,425 85,732 67,352ProvisionsDeferred taxes 1,580 1,580 717 717

Current liabilitiesTrade creditors 280 123 127 56

Liabilities to group companies 31,624 – 14,350 –

Taxes and social security charges 20 197 9 89

Other liabilities, accruals and deferred income 3,236 910 1,469 413

35,160 1,230 15,955 558

Total liabilities 225,669 151,235 102,404 68,627

Assets

Fixed assets:

Current assets:

Liabilities

Company profit and loss account for 1999(x 1,000)

The principles of valuation of the assets and liabilities shown on the company balance sheet are similar to those used for the consolidated balance sheet. Likewise, the method of profit determination is based on the same valuation principles as used for the consolidated profit and loss account. For further details, please refer to the notes accompanying these statements.

Other tangible fixed assets

Net book value as at the beginning of the financial year

Cost 1,544

Accumulated depreciation -541

1,003Changes in net book valueInvestments 79

Depreciation -325

-246Net book value as at the end of the financial yearCost 1,347

Accumulated depreciation -590

757

Participatinginterests in group

companies

Balance as at the beginning of the financial year 140,392Share in the 1999 profit 64,759

Increase in capital 109,534

Acquisition new participations 23,440

Dividends paid -26,125

Goodwill paid -93,629

Other changes -484

Balance as at the end of the financial year 217,887

The interests in group companies are valued at net asset value in accordance with the principles of valuation applicable for the consolidated annual accounts.

Notes to the company balance sheet and profit and loss account

Principles ofvaluation

Tangible fixedassets (x NLG 1,000)

Financial fixedassets (x NLG 1,000)


AALBERTSINDUSTRIES N.V. ANNUAL REPORT 1999 35

Shareholders’ equity Issued Share Cumulative Other Unappro- Total

(x NLG 1,000) capital premium preference reserves priatedaccount shares profit

Balance as at the beginning of the financial year 2,163 130,980 89,460 -121,208 47,030 148,425

Profit appropiation and stock dividend over 1998 18 -18 – 43,093 -47,030 -3,937

Unappropriated profit 1999 – – – – 60,660 60,660Goodwill – – – -127,012 – -127,012Issue of ordinary shares 250 115,445 – – – 115,695Exercise of stock option rights 2 313 – – – 315Exchange rate differences – – – -1,640 – -1,640Other changes – -1,120 – -2,457 – -3,577

Balance as at the end of the financial year 2,433 245,600 89,460 -209,224 60,660 188,929

Out of the share premium account, NLG 245,050 can be distributed free of tax.

Shareholders’ equity In 1999 two Extraordinary General Shareholders’ Meetings were held. During the last meeting the amendmentof the articles of association with regard to the increase of the nominal capital and the possibility to issuecumulative preference shares have been approved by a majority of votes.

The authorised share capital amounts to NLG 7,360,000, divided into:O 36,000,000 ordinary shares of NLG 0.10 par value eachO 24,999,900 preference shares of NLG 0.10 par value eachO 100 priority shares of NLG 0.10 par value eachO 4,200,000 financing preference shares of NLG 0.30 par value each.

The issued share capital increased in the course of the year under review by 2,699,522 ordinary shares as aresult of:O the declaration of stock dividend over the year 1998 (180,522 shares)O the exercise of stock option rights (19,000 shares)O share issue (2,500,000 ordinary shares)

On 31 December 1999, 18,928,509 ordinary shares, 1,800,000 financing preference shares and 100 priority shares were placed. Of the ordinary shares, 15,425,919 were bearer shares and 3,502,590 were registered shares. The stock option rights granted to the management amounted to NLG 8,230 par value (1998: NLG 10,430). The validity of these option rights is five years.

The Certificates of Preference Shares issued against financing preference shares are held by the ‘StichtingAdministratiekantoor Financieringspreferente Aandelen Aalberts Industries’. The aim of the foundation is the acquisition by title of trust and administration of registered cumulative financing preference shares in thecapital of the company. The foundation was incorporated on 12 March 1999 under Dutch law, and has itsregistered office in Utrecht. On 31 December 2000, the company has the option to repay 25% of the issuedcumulative preference shares.

The company’s financial data of Aalberts Industries N.V. have been incorporated into the consolidated annual accounts. To avoid overlap, the profit and loss account of Aalberts Industries N.V. is shown in a summarised format.

The company has guaranteed the liabilities of its Dutch group companies in accordance with the provisionsof article 403, paragraph 1, Title 9, Book 2 of the Dutch Civil Code. As a consequence these companies willbe exempt from filing requirements.


The executive board The supervisory boardJ. Aalberts, President & CEO P.W.A. Niessen, Chairman

B.P. Bolkenstein, Managing Director C.J. BrakelA.B. van LuykF.X. Noz

Profit and lossaccount

Liability


Supplementary information

Appropriation of profit 1998In accordance with the resolution of the AnnualGeneral Meeting of Shareholders held on 15 April1999, the appropriation of profit 1998 has takenplace in conformity with the proposed appropriationof profit stated in the 1998 Annual Accounts.

Proposal for distribution of profitsThe net profit shall be available to the shareholdersafter deduction of dividend on cumulative preferenceshares in accordance with Article 30, paragraph 3 ofthe articles of association, as follows:

Net profit 65,022

Dividend on cumulative preference shares -4,362

Unappropriated profit 60,660

The executive board proposes to declare a dividendof NLG 0.84 in cash per ordinary share of NLG 0.10par value, or, at the choice of the shareholders, inordinary shares. At the shareholder ’s option, paymentin shares will be charged to the unappropriated profitor to the tax-exempt share premium account. Anyresidual profit shall be added to shareholders’ equity.

Special statutory rights in respect of votingpowerA total of 100 issued and paid-up priority shares areheld by the Stichting Prioriteit Aalberts IndustriesN.V., whose Management Board consists of the company’s executive and supervisory board.Priority shareholders have the following powers:- authorisation of every decision to issue shares,- authorisation of every decision to limit or

exclude the preferential rights of shareholders in the event of an issue of ordinary shares,

- authorisation of every decision to buy paid-up shares in shareholders’ equity or certification thereof without payment or subject to conditions,

- authorisation of every decision to dispose of companyheld shares,

- authorisation of every decision to reduce the issued capital through the cancellation of shares or through a decrease in the par value of shares by amending the articles of association,

- authorisation of the transfer of preference shares,- determination of the number of members of the

executive board.

With reference to the cumulative preference shares, the board of the foundation ‘StichtingAdministratiekantoor Financieringspreferente aandelen Aalberts Industries’ exercises limitedvoting right.

Additional functions of the members of thesupervisory boardThe members of the supervisory board also have thefollowing relevant positions:

P.W.A. Niessen, Chairman of the supervisory board

Supervisory board, Machinefabriek Meyn B.V.,chairman

Supervisory board, Pannevis B.V., chairmanSupervisory board, Vege-Motoren B.V., chairmanSupervisory board, Wegener-Arcade N.V., member

C.J. Brakel, Member of the supervisory board

Supervisory board, Bols Royal Distilleries, chairmanSupervisory board, Kappa Holding B.V., memberSupervisory board, Kempen & Co. N.V., memberSupervisory board, Maxeres N.V., memberSupervisory board, Royal Numico N.V., memberSupervisory board, Unique International N.V.,

chairman

A.B. van Luyk, Member of the supervisory board

Supervisory board, Braathens, Norway, member Supervisory board, Kenya Airways, Kenya, member Supervisory board, KLM-UK Holdings Ltd.,

United Kingdom, member

F.X. Noz, Member of the supervisory board

President Noz Holding Co., Inc., United States of America

Chairman California Superior Inc.,United States of America

Events after the balance sheet dateAt the start of 2000, Aalberts Industries announcedthe acquisition of the UK-based company NitridingServices, which will be part of the TTI Group.


IntroductionWe have audited the accompanying annual

accounts of Aalberts Industries N.V., Langbroek forthe year 1999 as included in this report. These annual accounts are the responsibility of the company’s management. Our responsibility is toexpress an opinion on these annual accounts basedon our audit.

ScopeWe conducted our audit in accordance with

auditing standards generally accepted in theNetherlands. Those standards require that we planand perform the audit to obtain reasonable assuranceabout whether the annual accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures inthe annual accounts. An audit also includes assessingthe accounting principles used and significant estimates made by management, as well as evaluatingthe overall annual accounts presentation. We believe that our audit provides a reasonable basisfor our opinion.

OpinionIn our opinion, the annual accounts give a

true and fair view of the financial position of thecompany as of 31 December 1999 and of the resultfor the year then ended in accordance with accoun-ting principles generally accepted in the Netherlandsand comply with the financial reporting require-ments included in Part 9, Book 2 of the Dutch CivilCode.

Utrecht, 23 February 2000

PricewaterhouseCoopers N.V.

Auditor’s report



Addresses

Adex B.V.Tjalkkade 2, 5928 PZ Venlo (NL)Tel. ++31 773898900, Fax ++31 773898930E-mail: [email protected]: www.adex-dies.com

BGT B.V.Hurksestraat 32, 5652 AL Eindhoven (NL)Tel. ++31 402507607, Fax ++31 402512287E-mail: [email protected]: www.bgt.nl

Härterei Bott GmbHWilhelm-Bott-Straße 24, D-74405 Gaildorf-Großaltdorf (D)Tel. ++49 797196980, Fax ++49 7971969829

Härtereibetrieb Dornstadt GmbHLindenmaierstraße 19, D-88471 Laupheim-Untersulmetingen (D)Tel. ++49 739270960, Fax ++49 7392709640

Eurocast B.V.Kayersdijk 31, 7332 AH Apeldoorn (NL)Tel. ++31 773898800, Fax ++31 555425849E-mail: [email protected]: www.eurocast.nl

Härterei Hauck GmbH (90%)Walter-Freitag-Straße 25, D-42899 Remscheid-Lüttringhausen (D)Tel. ++49 219156200, Fax ++49 2191562089E-mail: [email protected]: www.haerterei-hauck.de

Ionic Technologies, Inc. (94%)207 Fairforest Way, Greenville, SC 29607 (USA)Tel. ++1 8642889111, Fax ++1 8642889169E-mail: [email protected]: www.ionic-tech.com

Kluin Wijhe B.V.Industrieweg 1, 8131 VZ Wijhe (NL)Tel. ++31 570521413, Fax ++31 570523270E-mail: [email protected]: www.kluinwijhe.com

Machinefabriek Van Knegsel B.V.De Hoefse Weg 2, 5512 CH Vessem (NL)Tel. ++31 497592200, Fax ++31 497592245

Leco Products B.V.De Smalle Zijde 20, 3903 LP Veenendaal (NL)Tel. ++31 318528288, Fax ++31 318518620

Mamesta B.V.Spikweien 27, 5943 AC Lomm (NL)Tel. ++31 774731551, Fax ++31 774732409E-mail: [email protected]: www.mamesta.nl

Mifa Aluminium B.V.Deltakade 4-6, 5928 PX Venlo (NL)Tel. ++31 773898888, Fax ++31 773898742E-mail: [email protected]: www.mifa.nl

Nowak S.A.Zone Artisanale de Pancé, F-35320 Pancé (F)Tel. ++33 299430197, Fax ++33 299430460E-mail: [email protected]: www.nowak-sa.com

Overeem B.V.Oosteinde 86, 3925 LG Scherpenzeel (NL)Tel. ++31 332773214, Fax ++31 332774458E-mail: [email protected]

Trateriber, S.A.Alcotanes 32 (Nave), E-28320 Madrid (E)Tel. ++34 916920810, Fax ++34 916920880E-mail: [email protected] Internet: www.trateriber.es

TTI Group Limited39-43 Bilton Way, Luton Beds. LU1 1UU (UK)Tel. ++44 1582488344, Fax ++44 1582488394E-mail: [email protected] Internet: www.ttigroup.co.uk

Härterei Weßling GmbHEngerstraße 39, D-33824 Werther (D)Tel. ++49 520397405, Fax ++49 5203974078

Aalberts Industries N.V.Sandenburgerlaan 4, 3947 CS LANGBROEKP.O. Box 11, 3940 AA DOORNThe NetherlandsTel. ++31 343565080, Fax ++31 343565081E-mail: [email protected]: www.aalberts.nl

The following significant group companies are included in the consolidated annualaccounts of Aalberts Industries N.V. It concerns 100% participations, unless indicatedotherwise.

IndustrialServices

Broen A/SSkovvej 30, DK-5610 Assens (DK)Tel. ++45 64712095, Fax ++45 64712495E-mail: [email protected]: www.broen.com

Broen Armaturen GmbHHaldenstraße 27, D-45881 Gelsenkirchen (D)Tel. ++49 209404380, Fax ++49 209404388

Broen Valves Ltd.Unit 7 Cleton Str. Business Park, Cleton StreetTipton, West Midlands DY4 7TR (GB)Tel. ++44 1215224505, Fax ++44 1215224535E-mail: [email protected]

Broen (M) Sdn Bhd11-1 & 11-2 Jalan USJ 9/5P, UEP Subang Jaya, 47620 Subang Jaya, Selangor (MY)Tel. ++60 37242508, Fax ++60 37241904E-mail: [email protected]

Broen-DZT S.A. (60%)ul. Nowowiejska 50A, 58/200 Dzierzoniow (PL)Tel. ++48 748318455, Fax ++48 748321920E-mail: [email protected]

Broen Singapore Pte Ltd48A Kandahar Street, Singapore 198899 (SGP)Tel. ++65 2980662, Fax ++65 2980468E-mail: [email protected]: www.broen.com.sg

Broen, Inc. (50%)3018 Commerce Square SouthBirmingham, AL 35210 (USA)Tel. ++1 2059569444, Fax ++1 2059562537E-mail: [email protected]: www.broeninc.com

Conti-Efka Armaturen GmbH & Co. KGHauptstraße 98, D-35435 Wettenberg (D)Tel. ++49 641982210, Fax ++49 6419822150E-mail: [email protected]: www.conti-efka.de

Dispense Systems International B.V.Vreelandseweg 42D, 1216 CH Hilversum (NL)Tel. ++31 356245777, Fax ++31 356245948E-mail: [email protected]: www.dsi-bv.nl

DSI Getränkearmaturen GmbH & Co. KGWankelstraße 14, D-50996 Köln (D)Tel. ++49 223639140, Fax ++49 2236391439E-mail: [email protected]

efka-GAM Armaturen GmbHIndustriestraße 8, D-64579 Gernsheim (D)Tel. ++49 625893190, Fax ++49 625851812

H.L. Fuge Kohlensäure-Automaten-Fabrik GmbHBreslauer Straße 37, D-31157 Sarstedt (D)Tel. ++49 50669860, Fax ++49 506698630E-mail: [email protected]: www.fuge-sarstedt.de

Germefa B.V.Oosterzijweg 23, 1851 PB Heiloo (NL)Tel. ++31 725350000, Fax ++31 725350011E-mail: [email protected]: www.germefa.nl

Haas-Morel E.U.R.L.144, rue Josué Hofer, F-68060 Mulhouse Cedex (F)Tel. ++33 389334368, Fax ++33 389439243

Morel S.A.17, rue Machet Chollet, F-80820 Arrest (F)Tel. ++33 322608486, Fax ++33 322603215E-mail: [email protected]: www.morel-groupe.com

North American Dispense Systems, Inc. (80%)592 New Britain Ave., Farmington CT 06032 (USA)Tel. ++1 8606776566, Fax ++1 8606776088E-mail: [email protected]

Odin Control Systems ApSBrydehusvej 13, DK-2750 Ballerup (DK)Tel. ++45 77323130, Fax ++45 77323131E-mail: [email protected]: www.o-din.dk

Prestorac S.A.S.L’Ouche St. Pierre, F-72610 Fyé (F)Tel. ++33 233823333, Fax ++33 233823334E-mail: [email protected]: www.prestorac.fr

Rossweiner Armaturen und Meßgeräte GmbH & Co.OHGWehrstraße 8, D-04741 Rosswein (D)Tel. ++49 34322480, Fax ++49 3432248213E-mail: [email protected]: www.rossweiner.de

Seppelfricke Armaturen GmbH & Co. OHGHaldenstraße 27, D-45881 Gelsenkirchen (D)Tel. ++49 2094040, Fax ++49 209404194E-mail: [email protected]: www.seppelfricke-armaturen.de

Seppelfricke Austria Ges.m.b.H.Straße 2 E, Obj. M 28, A-2355 Wr. Neudorf (A)Tel. ++43 223664260, Fax ++43 223663584

Simplex Wilfer GmbH & Co.Isnyer Straße 28, D-88260 Argenbühl/Allgäu (D)Tel. ++49 756694080, Fax ++49 7566940843E-mail: [email protected]: www.simplex-rossweiner.de

Taprite-Fassco Mfg., Inc.3250 Northwestern Dr., San Antonio TX 78238 (USA)Tel. ++1 2105230800, Fax ++1 2106466009E-mail: [email protected]: www.taprite.com

VSH fabrieken B.V.Oude Amersfoortseweg 99, 1212 AA Hilversum (NL)Tel. ++31 356884211, Fax ++31 356884379E-mail: [email protected]: www.vsh.nl

VSH Specials B.V.Ampèrestraat 17, 5928 PE Venlo (NL)Tel. ++31 773242424, Fax ++31 773242420

VTI Ventil Technik GmbHIserlohner Landstraße 119, D-58706 Menden (D)Tel. ++49 23739353, Fax ++49 2373935444E-mail: [email protected]: www.vti.de


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