Boskalis Annual Report 2018

ANNUAL REPORT 2018 – BOSKALIS 25

In addition to the Chairman of the Board of Management and the Chief Financial Officer, the Group Controller and the external auditor were also present at the meetings of the Audit Committee. The internal auditor and other offcers joined the meetings of the Audit Committee for the topics relevant to their function. The Audit Committee discussed with the external auditor the audit plan as well as the audit fees. The scope and materiality of the audit plan and the principal risks of the annual reporting, as well as the findings and outcome of control process of the financial statements and management letter, was given consideration by the Audit Committee, whereby the Audit Committee received information on the most important topics of discussion with the external auditor related to the drafts of the Management Letter and the audit report. The workings of the external and internal audit functions were assessed by means of discussions with the Board of Management, the internal and external auditor as well as senior management. The Audit Committee informed the external auditor of the main elements regarding its performance. The Audit Committee also established the independence of the external auditor. The Audit Committee reported its findings on the performance of and the relationship with the external auditor to the Supervisory Board. During the year under review meetings were also held with the external auditor without the company’s Board of Management being present. At the beginning of 2018 the Remuneration Committee consisted of two members, with Mr. Van Woudenberg as Chairman and Mr. Van der Veer as member. After the meeting of the Remuneration Committee on 15 August 2018, Ms. Haaijer joined the Remuneration Committee as third member. Duties and responsibilities of the Remuneration Committee It is the role of the Remuneration Committee to advise the Supervisory Board on: ‚ ‚ The submission of a clear and understandable proposal concerning the remuneration policy to be pursued for members of the Board of Management with focus on long-term value creation for the company and the business connected with it and shall take into account the internal pay ratios within the business. The Remuneration Committee shall consider and include all matters required by law and the Corporate Governance Code 2016 (the “Code”). The Supervisory Board shall present the policy to the General Meeting of Shareholders for adoption. ‚ ‚ The submission of a proposal concerning the remuneration of individual members of the Board of Management. The proposal shall be drawn up in accordance with the remuneration policy that has been established and will, in any event, cover the remuneration structure, the amount of the fixed and variable remuneration components, the performance criteria used, the scenario analyses that are carried out and the pay ratios with Reports and findings of the meetings of the Audit Committee were presented to and discussed with the entire Supervisory Board. REMUNERATION COMMITTEE Members of the Remuneration Committee

Activities during 2018 The Audit Committee met on three occasions during 2018. The attendance rate for the meetings of the Audit Committee was 100%. Regular topics discussed during these meetings included: the financial statements, the (interim) financial reporting for the financial year, the results relating to large projects and operating activities, developments in IFRS regulations, developments in the order book, cost control, share price developments, and the financing and liquidity of the company. The Audit Committee discussed with the Board of Management the internal risk management and control systems and assessed the effectiveness of the design and the operation thereof by evaluating the systems with the Board of Management, the internal and external auditor and senior management. The Audit Committee reported hereon to the Supervisory Board. Other topics of discussion included the impact of the situation on the financial markets, insurance matters, the company’s tax policies, tax position and relevant tax developments, the administrative organization, the provision of adequate information within the company, the relevant legislation and legal proceedings. In addition, the Audit Committee focused more specifically on the framework of the financial reporting on the recognition in the accounts of the impairments regarding goodwill and assets as related to the 2017 and 2018 financial statements with regard to the harbor towage activities and the termination of the low-end transport activities, the development of the working capital, cybersecurity, the anti-corruption policies and the purchase price allocation of Gardline. contracted projects were discussed. During the year under review subjects addressed included among others the impact of the low oil price and the continuing uncertain market conditions on the company, which affected especially the Offshore Energy division with a sharp drop in the results relating to the transport activities at the low end of the market. The Supervisory Board considered in this context the proposal of the Board of Management to terminate these activities, which no longer formed a ft with the strategy for Offshore Energy as set out in the Corporate Business Plan 2017-2019. Furthermore the proposed divestment of the equity stakes in Saam Smit Towage and Kotug Smit Towage were discussed. The Audit Committee assessed the total extraordinary charge of EUR 519.5 million which was mainly due to the termination of the transport activities, the impairment on Boskalis’ interests in the Harbour Towage joint ventures, as well as the effects for the organization. In the Audit Committee the activities performed by the internal auditor during 2018 as well as the internal Audit Plan for 2019 have been discussed with the internal auditor. Other topics of discussion included a review of the scope of the internal audit function. Within the context of the market developments the order book and potential large projects as well as the status of important