>36. Values. Automobile distribution. Short-term car rental. Vehicle glass. Entrepreneurship and long-term vision. Adaptability and anticipation

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2 >36 Automobile distribution >24 Short-term car rental > Values Entrepreneurship and long-term vision Adaptability and anticipation Family culture yet global in reach Respect for customers, partners and staff Accountability and experimentation Vehicle glass >42 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

3 years Contents Message from the Chairman 200 years of D Ieteren entrepreneurship Key figures Structure of the Group Key events Activities overview Corporate Governance Corporate citizenship Share information Financial risks management Automobile distribution - D Ieteren Auto Short-term car rental - Avis Europe plc Vehicle glass repair and replacement - Belron s.a. Annual accounts C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 1

4 Message from the Chairman In 2005, we celebrate our bicentenary years of history related to individual mobility. Its evolution has inspired our own. From craftsmen, we have become industrialists and later importers. We have diversified, first at a national level and then internationally but always in the realm of services to the motorist. In the meantime, the world has undergone significant changes. Our Group was able to maintain its course, at the same time ensuring exceptional expansion. This was not without experimentation and challenges but the company remained focused, healthy and lucid. Its profile as a family business, whose history extends over six generations is no stranger to that. The values which have shaped our Company have not changed: long-term vision, entrepreneurship, adaptability, anticipation, global reach, respect and accountability. Our activities of automobile distribution and vehicle glass registered significant progress in 2004, while short-term car rental has undergone the anticipated difficulties. Our current result after taxes, before amortisation of consolidation differences, group s share, increased by 14.9% to EUR 96.4 million. The net consolidated result, group s share, amounted to EUR 45.6 million including an extraordinary charge after taxes, group s share, of EUR 18.3 million, primarily related to Avis Europe and Belron. In automobile distribution, D Ieteren Auto achieved significant revenue growth, as a result of strong market conditions and product line renewal. Sales targets were achieved, with 99,600 new vehicles invoiced during the year. Operating result grew, reflecting revenue growth and cost control. D Ieteren Auto expects continued progress in 2005, with demand expected to remain at the high level of 2004 and with the introduction of new models. In vehicle glass, Belron has continued to make progress despite unfavourable weather conditions. New market share gains were realised and recent expansion, notably in Italy and Brazil, exceeded expectations. 2 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

5 Furthermore, the results reflect gains in margins and productivity. Belron, which was acquired in 1999, has made an important contribution to the growth of our Group. Confident in the strategy and the high-performing management team of the company, we significantly increased our interest in Belron over the last twelve months and decided not to list the company. In car rental, Avis Europe again operated in a tough trading environment. Despite limited overall revenue growth, the company met expectations, thanks to good fleet cost performance and tight capital management. The significantly renewed management team made decisions for the long-term benefit of the group and started implementing a major recovery strategy programme. For 2005, Avis Europe expects the current difficult trading conditions to carry on with continued pressure on margins. Nevertheless, we continue to support the management team of Avis Europe in its efforts to put Avis Europe back on a profitable growth track will also be the opportunity for D Ieteren to pursue the natural evolution of its organisation and governance. After 30 years as Chairman and CEO, I believe the moment has come to pass the baton of executive management. I have therefore asked Jean-Pierre Bizet, who joined the company in 2002, to assume responsibility as CEO as from the next Annual General Meeting scheduled to take place on 26 May, at which time the Board of Directors will propose his appointment as director. I will continue to chair the Board of Directors as nonexecutive Chairman. This decision does not alter the strategy or the shareholding of the Group, the D Ieteren family having confirmed its willingness to remain the majority shareholder of the Company and to ensure its stability. I am delighted to take part with confidence in this new phase of the long life of our Group and I thank all those who have shown great loyalty and commitment to D Ieteren over recent years: our staff, customers, partners and shareholders to whom I reiterate the unfailing commitment of all our teams. Roland D Ieteren - Chairman C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 3

6 200 years of D Ieteren entrepreneurship Jean Joseph D Ieteren (1785- > ) starts the work of >1857 >1878 wheelwright in Brussels. Alexandre D Ieteren ( ) opens a complete body shop with a new paintwork and accessories section. >1897 While continuing with the production of horse-drawn carriages, Alfred and Emile set up the automobile coachwork and supply a first electric car. seizing opportunites Alfred ( ) and Emile ( ) set up the company D Ieteren Frères. Ten years later they become suppliers to the Court of Belgium. Pierre D Ieteren ( ), son of >1935 >1948 >1950 Lucien, signs an import agreement with The company devotes itself to the assembly of Studebaker vehicles. For the next 35 years, this will be one of the company s main activities. Volkswagen. A few months later, the famous Beetle is launched in Belgium. Pierre D Ieteren starts the building work in Forest of an assembly factory for Studebaker vehicles and later for Volkswagen vehicles. In 1970, this factory will be sold to the Volkswagen group. keeping ahead D Ieteren becomes Porsche s exclusive importer. >1976 >1989 D Ieteren Lease is etablished and starts operating in the long-term car rental market with the makes distributed by D Ieteren Auto. expanding abroad D Ieteren becomes Avis Europe s majority shareholder, following a very successful 30 years partnership. With this acquisition D Ieteren gets a foothold in the international market. In 1997 Avis Europe is floated on the London stock exchange for the second time and extends its activities to Asia. By the end of 2004, D Ieteren owns 59.6% of Avis Europe s issued share capital. >1999 D Ieteren acquires Belron, a company which specialises in the repair and replacement of vehicle glass in Europe, Canada, Brazil, Australia and New Zealand. 4 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

7 Lucien D Ieteren ( ), son of Alfred, becomes managing director of the newly set up company Anciens Etablissements D Ieteren Frères. Carrosserie de Grand Luxe s.a.. >1919 taking risks Import and distribution in Belgium of Studebaker, Pierce-Arrow and Auburn vehicles. >1931 D Ieteren enters the short-term car rental market. An agreement is signed with the Belgian railway company: Beetles are made available for rent at the main railway stations in Belgium. In 1958, during the Brussels World Fair, Dit Renta-Car, D Ieteren rental division, becomes an adapting D Ieteren begins importing the Audi make. Other makes follow after they are acquired by the Volkswagen group: Seat in 1984, Škoda in 1992, Bentley in 2000 and finally, Lamborghini in Roland D Ieteren (6 th bearer of the name) succeeds his father, on his sudden death. The company focuses on a new niche market, the import of Yamaha motorbikes and scooters, under the name D Ieteren Sport. >1956 Avis licensee. >1974 >1975 confidence in the future Avis Europe begins operations in China. That same year, the company acquires the rights to the Budget brand in Europe, Africa and the Middle East. D Ieteren increases its interest in Belron, to 73.7%, confident in the company s future developing potential. Five years after its acquisition by D Ieteren, Belron is present in 15 new markets. D Ieteren Auto invoiced almost 100,000 new vehicles on the Belgian market. Close to one million vehicles from the makes D Ieteren Auto distributes circulate in Belgium. >2003 > D Ieteren s.a. made every effort to settle the rights of the holders of the publishing rights of illustrations or photographers in accordance with the legal requirements. Would the holders of the rights who could not be traced, please make themselves known. C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 5

8 Key figures CONSOLIDATED RESULTS (in EUR million) Revenue 3, , , , ,285.7 Operating result Current result after taxes 1, group s share Extraordinary result after taxes, group s share Net result, group s share FINANCIAL STRUCTURE (in EUR million) Capital and reserves 1, , , , of which Group s share Minority interests Net financial debt 1, , , , ,806.2 Automobile distribution activities (D Ieteren Auto) and short-term car rental activities (Avis Europe) are fully consolidated in the D Ieteren accounts. Vehicle glass activities (Dicobel / Belron) are accounted for using the equity method. DATA PER SHARE (in EUR) Current result after taxes 1,2, group s share Net result 2, group s share Gross dividend per ordinary share Net dividend per ordinary share Net dividend per ordinary share + strip VVPR Capital and reserves 2, group s share Highest share price Lowest share price Share price as at 31/ Average share price Price/earnings ratio as at 31/12 (PER) Average daily volume (in number of shares) 4,723 10,459 4,370 3,322 3,704 Market capitalisation as at 31/12 (in EUR million) , ,296.3 Total number of shares issued 5,530,260 5,530,260 5,530,241 5,530,241 5,530,241 AVERAGE WORKFORCE (FTE without Belron) 7,659 7,602 7,371 7,485 7, Before amortisation of consolidation differences. 2. Calculated on the basis of the number of shares in circulation at the end of the period (adjusted to take into account the 500,000 participating shares each granting a right to 1/8 of the ordinary dividend), i.e. 5,592,760. CURRENT RESULT AFTER TAXES 1, GROUP S SHARE (in EUR million) NET RESULT, GROUP S SHARE (in EUR million) CURRENT RESULT AFTER TAXES 1, GROUP S SHARE, BY ACTIVITY (in EUR million) 1. Before amortisation of consolidation differences % change Automobile distribution % Car rental % Vehicle glass 1, % Total % 1. Before amortisation of consolidation differences. 2. After allocation to the vehicle glass segment of a net financial charge after taxes of EUR 9.8 million (EUR 8.3 million in 2003) associated with the investment of D Ieteren in this segment. 6 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

9 Structure of the Group s.a. D Ieteren n.v. Divisions of s.a. D Ieteren n.v. AUTOMOBILE DISTRIBUTION Distribution & Retail Volkswagen Import Volkswagen Utilitaires Import Audi Import Seat Import Škoda Import Porsche Import D Ieteren Car Centers Parts & Service My Way FINANCIAL AND SERVICE ACTIVITIES D Ieteren Services s.a. 100% coordination centre D Ieteren Trading b.v. 100% finance company CAR RENTAL D Ieteren Invest s.a. 100% investment company Avis Europe plc % 48.74% VEHICLE GLASS Dicobel s.a % 81.73% Belron s.a. 2 12% Long-term car rental D Ieteren Lease s.a. 100% DVT s.a. 49% Two-wheeled activities D Ieteren Sport s.a. 75% 1. Total interest of s.a. D Ieteren n.v. in Avis Europe plc is 59.59%. 2. On 8 July 2004 s.a. D Ieteren n.v. purchased 12% of the capital of Belron s.a. In January 2005, D Ieteren purchased from Cobepa 5.53% of the capital of their subsidiary Dicobel, shareholder at 81.73% of Belron. As a result of those two transactions, s.a. D Ieteren n.v. owns, directly and indirectly (via Dicobel), 73.73% of Belron s.a. C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 7

10 Key events >January 2004 > Exhibits at the Brussels Motor Show; its enormous success - 730,000 visitors - helps D Ieteren Auto achieve significant new vehicles sales growth during the first half of >March 2004 > Belron acquires the second largest specialist in the vehicle glass sector in Italy, the second largest car park in Europe. Belron is now present in this country with 80 service centres which operate under the CARGLASS brand. This acquisition had a 1% positive impact on Belron s revenue growth in >June 2004 > D Ieteren issues a EUR 100 million eight-year bond at a 5.25% nominal rate. This bond, which is listed on Euronext Brussels, together with new credit facilities, contributes to the refinancing of the EUR 250 million bond loan issued in 1999 which expired in October > The new Škoda Octavia saloon is launched and named «Car of the Year» in several European countries. > Seat launches its first small sports people carrier, the Seat Altea. Its innovative design reflects the new generation of the make. >July 2004 > D Ieteren s.a. purchases 12% of Belron s.a. from various minority shareholders. Subsequently, D Ieteren owns, directly and indirectly, 69.21% of Belron. As a result, Belron is no longer to be floated in the medium term. >November 2004 > D Ieteren Auto signs an import agreement in Belgium with Brenderup, European leader of tourist trailers in the private market. These products are available in the VW, Škoda, Audi, Seat and Yamaha networks. > The new Seat Toledo is launched. > Porsche introduces the new generation of its Boxster model on the Belgian market. Together with the new 911, it will allow the make to register record sales in > January M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

11 > The new VW Caddy, which is aimed at both business and private customers, is launched. Its success is immediate and contributes to the strong performance of Volkswagen in the light commercial vehicle segment in >April 2004 > Alun Cathcart, previously Deputy Chairman, is appointed non-executive Chairman of Avis Europe plc in succession to Sir Bob Reid. Jean-Pierre Bizet, Group Executive Vice President of D Ieteren, is appointed Executive Deputy Chairman of Avis Europe. Murray Hennessy, who joined the company in March 2004, is appointed Chief Executive Officer. > The new Audi A6 saloon fitted with the distinctive Singleframe radiator grille is launched heralding a new Audi generation. >May 2004 The new Porsche 911, the brand s flagship model, is launched. >November 2004 > The Audi A3 Sportback is launched. This 5-door version completes the A3 series which accounts for almost 20% of Audi new car registrations in Belgium. >September 2004 > Audi launches the latest version of its best-sellers, the A4 saloon and the A4 Avant which carry the new design of the make. Both of which meet with immediate success. For the second time in a row Audi ends the year as leader in its segment. > Exhibits at the Motor show for light commercial and leisure vehicles where D Ieteren Auto notably presents the new VW Golf Plus and the Audi A6 Avant. > D Ieteren purchases from Cobepa 5.53% of the capital of their subsidiary Dicobel, a 81.73% shareholder of Belron. Subsequently, D Ieteren owns, directly and indirectly (via Dicobel) 73.73% of Belron. >February 2005 > Belron signs a franchise agreement with the Hungarian specialist in the tyre replacement market and other automotive services. The first CARGLASS Belron service centre will open in Budapest in April > Roland D Ieteren, Chairman and CEO of the company since 1975, announces his decision to step down as CEO, after the upcoming Statutory General Meeting of Shareholders in May 2005, and remain non executive Chairman of the Board of Directors. Jean-Pierre Bizet will succeed him as CEO and, subject to approval by the AGM, will be member of the Board of Directors. >March 2005 > D Ieteren officially celebrates its bicentenary this year. Celebrations will run over a 3 month period and include the publication of a book which narrates the history of the Group, a seminar on family-controlled businesses in the presence of His Majesty King Albert II and many more key economical figures in Belgium. A number of visits to the new D Ieteren Gallery, which houses a collection of various means of transport that reflect the company s two hundred year history, are also being planned. C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 9

12 Activities overview D Ieteren comprises three evenly balanced activities, all relating to services to the motorist. They are - or are capable of becoming - leaders in the markets they serve. With very different geographic footprints, they offer together an attractive potential for growth and profitability. The Group s strategy is to be the best «parent» for each activity and to act as an active majority shareholder. Although the Group s mode of interaction is specific to each activity (see «Corporate Governance» chapter), the Group always attempts to contribute its extensive knowledge of the automobile sector, its ability for anticipation and adaptability, its long-term vision, its entrepreneurship spirit and its will to invest wisely. The strength of the Group rests on a decentralised organisation that is flexible and close to the customer, combined with a capacity for dialogue and sharing of best practices in terms of, for example, logistics, brand management, distribution networks or performance management. Historically, the Group has used cash flows generated by automobile distribution, the flotation of Avis Europe and partnerships to structure its portfolio of activities. Today, D Ieteren and its activities are present in 115 countries spread across 5 continents serving more than 13 million customers. In 2004, D Ieteren Auto contributed 46% of the Group s current result after taxes. Given the sluggish short-term car rental market, Avis Europe s contribution was only 25%. Since its acquisition, Belron s contribution has increased and amounted to 29% in >Automobile distribution D Ieteren Auto distributes all of the makes from the Volkswagen group as well as Porsche and Yamaha in Belgium. This distribution activity is the historic pillar of the Group and is based on sales concession agreements signed for an indefinite period. These agreements have governed D Ieteren Auto s business relationships with the manufacturers, for 56 years in the case of the Volkswagen contract. This activity is carried out via 5 networks of approximately 300 independent dealers located throughout Belgium. D Ieteren Auto has furthermore 15 corporate-owned agencies mainly located in the Brussels region. D Ieteren Auto also manages all its dealers logistics and distribution of spare parts and accessories. Its subsidiary D Ieteren Lease specialises in long-term car rental and represents an important sales tool. D Ieteren Lease s fleet is sold on the used car market notably through the two >Short-term car rental Following a long period of partnership, which goes back to 1958 in Belgium and to 1987 in Europe, D Ieteren became in 1989 Avis Europe s majority shareholder. Avis Europe has been listed on the London stock exchange since D Ieteren owns 59.59% of Avis Europe s capital. With around 8 million customers per year, Avis Europe is one of the leading players on the European car rental market with the Avis and Budget brands. The company is present in 110 countries and operates via a network of over 4,000 locations through wholly owned subsidiaries and licensee partners in Europe, Africa, the Middle East and Asia. This region represents a longterm growth potential for the company. Avis is present in 18 countries in Asia and has been operating in India and China since >Vehicle glass This third business activity was added to D Ieteren s portfolio in December 1999 with the acquisition of Belron, the world-wide leader in the vehicle glass repair and replacement sector. Today D Ieteren owns, directly and indirectly (via Dicobel), 73.73% of Belron s.a. Belron operates via an extensive network of corporately owned and franchised operations in 27 countries across Europe, Canada, Brazil, Australia and New Zealand. The group has more than 1,000 service centres and around 3,500 mobile repair vehicles, operating mainly under the CARGLASS and AUTOGLASS brands. The high quality of service offered by each of its operational entities is based on a proven business model, supported by integrated supply and logistics processes and customer driven support systems both for the replacement and for the repair 10 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

13 My Way centres. D Ieteren Sport is responsible for the distribution of Yamaha products in Belgium and Luxembourg. As at 31 December 2004, D Ieteren Auto s market share for new car registrations was around 18%, the Belgian car park consisting of around 950,000 vehicles of D Ieteren Auto s makes. D Ieteren Auto s strength lies in its flexible and close-to-thecustomer organisation as well as in its logistics, marketing and network management know-how. Growth opportunities for developing the business lie in its ability to exploit the individual potential of each make, by offering local and targeted services and strengthening its customers loyalty, ensuring future sales of new vehicles, spare parts and accessories as well as activities relating to mechanical and bodywork services offered by its networks. KEY FIGURES (in EUR million) New vehicles sold (in units) 99,587 89,968 95, , ,784 Revenue 2, , , , ,063.3 Operating result Current result after taxes 1, Average workforce (FTE) 1,493 1,498 1,531 1,490 1, Group s share. 2. After allocation to the vehicle glass segment of a net financial charge after taxes associated with D Ieteren s investment in this segment. Avis Europe s activities cover all market segments - corporate, leisure and replacement. The company s development is based on a dynamic and extensive policy of commercial partnerships, considered to be an important strategic element for the strengthening of its leadership on a long-term basis. Its partners are airline and railway companies, tour operators, hotel chains, travel agencies, credit card companies, etc. Its customers benefit from a high quality and personalised service. The company is also looking to diversify its distribution channels. Internet sales continue to grow and in 2004 almost 20% of the group s reservations were made online. KEY FIGURES (in EUR million) Billed days (in thousands) 30,004 29,673 28,654 30,364 29,684 Revenue 1, , , , ,222.4 Operating result Current result after taxes 1, Average workforce (FTE) 6,166 6,104 5,840 5,995 5, Group s share. 2. Before amortisation of consolidation differences. for which Belron has a patented method. The mobile repair service is more convenient for motorists who can choose where to have their work carried out. Belron manages a significant part of the claim administration for major insurance and fleet companies and actively promotes the repair concept in order to reduce glass claims costs. Belron achieved strong organic and external growth. The group has gained a foothold in 15 new markets since its acquisition by D Ieteren, with the opening of new subsidiaries and the enhancement of its franchise network. In order to gain market share on existing markets, Belron is planning continuous investments in marketing programmes, in its call centres and IT tools as well as in its supply chain. KEY FIGURES (in EUR million) Total jobs (in millions) Revenue 1, , Operating result Current result after taxes 2, Average workforce (FTE) 9,794 9,582 8,424 8,195 7, Excluding Brazil. 2. Contribution of the Dicobel group (excluding PG Holding that was sold in 2001) to D Ieteren s current result after taxes, before amortisation of consolidation differences and after allocation to the vehicle glass segment of a net financial charge after taxes associated with D Ieteren s investment in this segment. 3. Group s share. C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 11

14 Corporate Governance The application of Corporate Governance principles by s.a. D Ieteren takes into consideration the specific shareholder structure of the Company, with family shareholders having owned the majority and ensured the continuity of the company for 200 years. Certain changes will be implemented in 2005 in order to comply with the new Belgian Corporate Governance principles. The Company communicates hereunder, as an integral part of its 2004 annual report, published in 2005, how it will apply these principles, subject to approval by the Annual General Meeting of 26 May BOARD OF DIRECTORS: COMPOSITION After the Annual General Meeting of May 2005, the Board of Directors of s.a. D Ieteren should comprise twelve members, as listed below: six non-executive directors, appointed on proposal of the family shareholders; one non-executive independent director, appointed on proposal of Cobepa; four non-executive independent directors, selected on the basis of their relevant experience (one of whom, a former executive, will become independent within the terms of the Code as of 1 January 2006); one executive director charged with executive management (CEO). The roles of Chairman of the Board and Chief Executive Officer (CEO) will be separate, as at the end of May The Chairman is responsible for the balanced composition and the leadership of the Board. The Chairman, in coordination with the CEO, represents the company and maintains relations with significant external partners. The 12 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

15 Chairman remains, directly and through the Consultation Committee, in close relation with the CEO. At present, the term of office for directors is three years. The appointment of new directors is on the basis of objective criteria. The age limit is 70. In the best interests of the Company, the Board of Directors may however take exceptions from these terms. The Chairman and the Deputy Chairman of the Board are selected among the directors appointed on proposal of the family shareholders. BOARD OF DIRECTORS: ROLES Without prejudice to its legal and statutory attributions and those of the General Meeting, the roles of the Board are to: determine the strategy and values of the company and approve its plans and budgets decide on major financial operations, acquisitions and divestments ensure that appropriate organisation structures, processes and controls are in place in order to achieve the Company s objectives and properly manage its risks monitor and review performance of executive management maintain effective communication with the Company s shareholders and other stakeholders. The Board of Directors meets at least five times a year. Additional meetings are held when business needs require. In 2004, the Board met eight times, of which once in the presence of the Statutory Auditor, who reported on the external audit activities. The articles of Association provide that decisions of the Board of Directors are taken by a majority of votes, the Chairman having a casting vote in case of a tie. CONSULTATION COMMITTEE The Chairman and the Deputy Chairman meet monthly with the CEO, as the Consultation Committee, to keep in close relation with each other, monitor the company s performance, review progress on major projects and prepare the Board of Directors meetings. BOARD OF DIRECTORS: COMMITTEES On 17 February 2005, the Board set up two Board Committees: the Audit Committee comprises four non-executive independent directors (of which one will become independent on 1 January 2006). The Audit Committee s terms of reference include mainly: monitoring the company s financial statements, reviewing the risk management function and ensuring the effectiveness of external and internal audit. The Committee will review auditors reports on halfyear and year-end financial statements of the subsidiaries which are consolidated into the Company s accounts. The Audit Committee meets at least three times a year, of which twice in the presence of the Statutory Auditor, and reports on its activities to the Board of Directors. the Nominations and Remuneration Committee will comprise three members: the Chairman of the Board, who chairs it, and two independent directors. The Committee will make proposals to the Board regarding appointments and remuneration of directors and senior management of the Company, and ensure the Company has formal, rigorous and C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 13

16 BOARD OF DIRECTORS AS AT 31 DECEMBER 2004 AGE END OF TERM OF OFFICE Roland D Ieteren 1,2 Chairman of the Board; Director, Avis Europe plc 63 May 2007 Maurice Périer 1,2 Deputy Chairman of the Board; Director of companies 66 May 2005 Yves Brasseur 3 Director of companies (Chairman of the Board and member of the audit 62 May 2006 committee, Exmar; Director and Chairman of the audit committee, Zenitel; Director, Sunparks) Gilbert van Marcke de Lummen 4 Director of companies (AVIS Europe plc, Cofinimmo s.a.) 67 May 2005 Pascal Minne 3 Managing Director, Petercam 54 May 2007 Alain Philippson 3 Chairman of the Board, Banque Degroof, Director C.F.E. 65 May 2006 Christian Varin 3 Managing Director, Cobepa; Director Sapec, KeyTrade Bank 57 May 2007 s.a. de Participations et de Gestion 1 Permanent representative: Patrick Peltzer, J.D. 65 May 2007 Nayarit Participations s.c.a. 1 Permanent representative: Etienne Heilporn, J.D. 65 May Director appointed on proposal of the family shareholders. 2. Director descending from, or related to, the founding family. 3. Independent director. 4. Independent director as of transparent procedures to support these decisions. The Committee will meet at least twice a year. Starting in 2006, the company will disclose the collective remuneration of the non-executive directors as well as of the CEO and the senior management of the company. EXECUTIVE MANAGEMENT OF THE GROUP Executive Management of the Group is the responsibility of the managing director / CEO. The former Group Executive Committee is discontinued. The CEO is assisted by Corporate management, which comprises group finance, financial communication / investor relations, consolidation, legal and tax matters and group management control. The CEO is, ex officio, member of the Board of Directors of the Company s main subsidiaries and of some of these Board s subcommittees. The activities of the D Ieteren Group are organised in three sectors, organised as follows: The Automobile Distribution sector is managed by the CEO, D Ieteren Auto, who chairs the Management Committee of D Ieteren Auto. The CEO, D Ieteren Auto, reports to the Group CEO. The Car Rental sector comprises Avis Europe plc and its subsidiaries. At 1 January 2005, Avis Europe plc is governed by a Board of Directors of 13 members, including three independent directors, and three directors appointed by s.a. D Ieteren. The Chairman of the Board is a former Avis CEO. One of the D Ieteren appointed directors is executive Deputy Chairman of the Board of Directors of Avis Europe. 14 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

17 PROPOSAL OF NOMINATION OF DIRECTORS FOR THE AGM OF MAY 2005 AGE Jean-Pierre Bizet 1 Group Executive Vice President, D Ieteren, since October Director of Avis Europe plc; Belron s.a. 57 Previously: Managing Director GIB GROUP; Director, McKinsey & Co, Inc., France. Nicolas D Ieteren 2,3 Bachelor of Science (Management), London University. Managing Partner, Nayarit s.p.r.l.; 30 European Manager for Network Development, Bentley Motor Cars ( ) Olivier Périer 2,3 Architect. Founding Partner, Urban Platform, s.c.r.l., Brussels 34 Director, s.a. de Participations & de Gestion; Reptid Comm. Corp (USA); LHP Trade s.p.r.l. AUDITOR END OF TERM OF OFFICE Gérard Delvaux Company Auditor May Executive director. 2. Director appointed on proposal of the family shareholders. 3. Director descending from, or related to, the founding family. The Board of Directors of Avis Europe plc has three committees: the Audit Committee, comprising three independent directors, the Nominations Committee and the Remuneration Committee, each comprising one of the D Ieteren-appointed directors. Listed on the London Stock Exchange, Avis Europe plc is in compliance with the provisions of the Combined Code, with a few exceptions fully disclosed in its annual report. The rights and obligations of the Directors appointed by s.a. D Ieteren, and of s.a. D Ieteren as a shareholder, are set out in a Relationship Agreement entered into at flotation in AUDITOR S FEES The fees charged in 2004 by the statutory auditor for the work carried out on behalf of Group companies in connection with the compulsory control of the statutory and consolidated financial statements amounted to EUR 152,288 excl. VAT. Further fees of EUR 115,231 excl. VAT were charged for other specific or exceptional assignments. The Vehicle Glass sector comprises Belron s.a. and its subsidiaries. At 1 January 2005, Belron s.a. is managed by a Board of Directors of 13 members, of which six are appointed by Dicobel. The Board of Directors of Belron s.a. has two committees: the Audit Committee and the Remuneration Committee, each comprising two directors appointed by Dicobel. Dicobel s.a. owns a 81.73% interest in the capital of Belron. D Ieteren and Cobepa own respectively 75.5% and 24.5% of Dicobel, which has a Board of Directors of seven members, four appointed by D Ieteren and three by Cobepa. DIVIDEND POLICY The Board of Directors intends to maintain its ongoing policy of providing the largest possible self-financing for the development of the Group, while ensuring regular dividend growth, results permitting. C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 15

18 Accountability Business is linked to society: it is reasonable and responsible that a company shares the fruits of its success.

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20 Corporate Citizenship Field Band Foundation As a company that takes its environmental and social responsibilities seriously, D Ieteren is eager to play its part in improving the quality of life of the communities that play host to its operational entities. In some cases, the Group puts its activities at the service of these communities, while in other cases, it becomes involved with social issues that arise or pursues more cultural or humanitarian goals. VEHICLE GLASS Environmental concern: Belron offers a solution to the glass waste problem by promoting actively the repair of windscreens. Furthermore, it has signed contracts with specialised partners for the collection and processing of glass waste. Corporate Social Responsibility: in South Africa, where Belron originates, the company has launched a number of initiatives to help local communities. Belron supports MaAfrika Tikkun, a charitable organisation based in Johannesburg. Founded in 1994, its mission is to strive for the upliftment of all disadvantaged people in South Africa through meaningful and sustainable contributions to society. It provides pre-school education, day care to the elderly, primary health care and support with the emphasis on assistance to HIV/AIDS affected patients and their families, home economic skills training including computer literacy and instructor training, community development for children and adults, reaction to emergency situations, etc. The Orange Farm Project run by MaAfrika Tikkun is involved in building a fully equipped kitchen to provide HIV/AIDS patients with one balanced and nutritious meal per day. 230 staff took part in the London Triathlon in 2004 to raise funds for this initiative. Belron also supports the Field Band Foundation, which promotes the teaching of a musical instrument to young people from disadvantaged townships. Eighteen orchestras have been created in five out of the nine South African provinces, with the participation of more than 2,400 young people in 236 schools. CAR RENTAL Environmental concern: Avis Europe has implemented a set of measures aimed at reducing CO 2 emission levels from its corporate operations in Europe, where possible, and to offset the remainder through a reforestation project with the help of Future Forests, the international climate change business. Over 200,000 trees have already been planted in the course of their 5 year partnership. Avis Europe has also launched training programmes on the responsible use of vehicles and energy and has drawn up codes of conduct for its customers and employees. The Avis car rental fleet adheres to the strictest environmental standards and the group works hand in hand with car manufacturers to further reduce the impact of its fleets. Avis Europe also takes part in a number of car-sharing programmes whereby members use a pool of Avis cars for an annual fee. Corporate Social Responsibility: Avis Europe supports a large number of charitable and cultural initiatives launched both by its head office and by many of the countries where it has a presence. In Europe it works with UNICEF, with community projects focussed on children and housing and readily offers its support to hospitals and to other initiatives such as France s Restaurants du Coeur or to cancer research, to name but a few. AUTOMOBILE DISTRIBUTION Environmental concern: D Ieteren Auto ensures that the vehicles it sells adhere to the increasingly stringent efficiency criteria in terms of passenger safety, fuel consumption, lightness and resistance of the materials used and their suitability for optimal recycling at the end of their life cycle. D Ieteren Auto actively works with Febiac (the Belgian Federation of the Car and Two-wheeler Industries) within the framework of Febelauto, a body that controls and manages the environmentally responsible disposal of around 175,000 vehicles that are scrapped every 18 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

21 year. D Ieteren Auto encourages its car dealers to collect waste and protect the environment, in particular via the safe storage of hazardous substances, the use of water-based paints and the selective treatment of waste water, including the water used for dewaxing new vehicles. Corporate Social Responsibility: D Ieteren is involved in the debate on mobility with the public authorities, including the mobility cell of the ``Union des Entreprises de Bruxelles and the ``Commission Permanente de la Mobilité de la Région Bruxelloise. A part of this analysis is put into practice by employees from the company s headquarters in Ixelles with the promotion of alternative means of transportation, the reduction in the number of cars on the road, etc. Another measure is the targeting of young drivers with specific training courses aimed at responsible driving sponsored by the Royal Automobile Club de Belgique. D Ieteren further supports a large number of social and cultural initiatives. One project that deserves special mention is the Group s contribution to the restoration of the ``Maison de la Radio (Flagey) and its support to cultural programmes organised in this cultural hotspot. The Audi Jazz Festival and the VW Spring Sessions, organised by the company for many years now, attract artists from all backgrounds, household names as well as up-and coming artists, and have drawn huge crowds to the numerous concerts organised annually in Belgium. Via its Volkswagen division, D Ieteren is committed to fund raising campaigns organised by the RTBF on behalf of disabled associations. This media event, known as CAP 48, counts on VW s logistical assistance through price reductions offered on vehicles that are especially equipped for people with reduced mobility. Through its Audi division, D Ieteren also supports the PROCOEUR programme, whose aim is to provide recreational activities for children who need to spend long periods of time in hospital and to raise funds to support those institutions which care for them. Another good cause which has D Ieteren s backing is the ``Œuvre Nationale des Aveugles, a non profit organisation that promotes the publication of books and reading programmes for the partially sighted and the development of material that helps them to live as autonomously as possible. Furthermore, D Ieteren gave a financial contribution for the tsunami victims in Asia as a result of non paid overtime hours of its staff. At the occasion of its bicentenary, D Ieteren carried out renovation work on the D Ieteren Gallery, which houses a collection of vehicles that reflect the company s two hundred year history. The gallery is also home to exceptional archives that are accessible to those interested in the history of transport and to researchers. Moreover, D Ieteren decided to support considerably the Belgian Red Cross programme conducted in order to train people in the so called saving gestures notably by organising school activities and distributing CD-ROMs. Furthermore, D Ieteren shall allocate to the Belgian Red Cross all the entrance fees and all other proceeds resulting from the bicentenary exhibition. C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 19

22 Share information D IETEREN SHARE FINANCIAL YEAR FROM 1 JANUARY TO 31 DECEMBER Minimum lot 1 share ISIN code BE Sicovam code or security code Reuters code IETB.BR Bloomberg code DIE.BB FTSE classification Business Support Services EVOLUTION OF THE SHARE OVER 5 YEARS (in EUR) EVOLUTION OF THE SHARE AND TRADED VOLUMES IN 2004 Detailed and historic information on the share price and the traded volumes are available on the Internet sites of D Ieteren ( and Euronext ( Avis Europe, a 59.59% subsidiary of D Ieteren, is listed on the London stock exchange in the Transport sector (code AVE.L). INDICES D Ieteren share forms part of the Next 150 and BEL 20 indices with a weighting of 0.70% and 0.48% respectively as at 1 March D Ieteren also forms part of the Next Prime indice and the sector indices published by MSCI, Dow Jones, Eurostoxx and Bloomberg. As at 1 March 2005, the share also forms part of the new BEL MID indice including about thirty Belgian midcap companies with a weighting of 3.01%. DENOMINATOR NUMBER RELATED VOTING RIGHTS Existing shares 1 5,530,260 5,530,260 Participating shares 1 500, ,000 Total 6,030, Each of the shares and participating shares grants a voting right. Information about the statement of capital can be found on page 78 of this report. DIVIDEND If the allocation of results proposed on page 51 of this report is approved by the Ordinary General Meeting of 26 May 2005, a gross dividend for the 2004 year of EUR 2.31 per share will be distributed, i.e.: a net dividend of EUR in return for coupon n 14, after deduction of the occupancy tax of 25%; a net dividend of EUR in return for the coupon and VVPR strip n 14, after deduction of the occupancy tax of 15%. Payment of the dividend will take place as from 2 June 2005 at the head offices and branches of the following establishments: GROSS DIVIDEND PER SHARE (in EUR) Bank Degroof Fortis Bank ING Bank Petercam 20 M E S SAG E F RO M T H E C H A I R M A N B I C E N T E N A RY K E Y F I G U R E S ST RU C T U R E K E Y E V E N T S AC T I V IT I E S OV E RV I E W C O R P O R AT E G OV E R N A N C E

23 SHAREHOLDING STRUCTURE (in voting rights) 31 DECEMBER 2004 Family shareholding 50.38% Cobepa s.a. 7.05% Own shares 1.24% Public 41.33% The detailed shareholding structure can be found on page 78 of this report. SHARE OPTION PLAN AND PROFIT-SHARING SCHEME 86,580 options on existing shares have been allocated under D Ieteren s share option plans launched since 1999 for officers and managers. In 2004, 8,990 options were subscribed of a total of 19,670. For other staff members, D Ieteren has set up a profit-sharing scheme, which allocated an amount of EUR 514,020 in FINANCIAL CALENDAR Last day for the deposit of shares for the Ordinary General Meeting 20 May 2005 Ordinary General Meeting 26 May 2005 Payment of the dividend for the year June 2005 Publication of results for first half of September 2005 Publication of annual results of 2005 February 2006 PRESS AND INVESTOR RELATIONS Catherine Vandepopeliere Financial Communication s.a. D Ieteren n.v. rue du Mail, 50 B-1050 Brussels Belgium Tel.: Fax: financial.communication@dieteren.be Information about the Group (press releases, annual reports, financial calendar, share price, statistical information, ) is available in three languages (French, Dutch, English) on the Internet site: Financial Risks Management Treasury policies aim to ensure permanent access to sufficient liquidity, and to monitor and limit interest and currency exchange risks. To minimise liquidity risk, each of the Group s three businesses ensures, on the basis of long term financial projections, that it has a core level of committed long term funding in place, with maturities spread over a wide range of dates, supplemented by various shorter-term, usually uncommitted, facilities. To mitigate interest and currency risks, tradable derivatives may be used, such as interest rate and foreign exchange swaps, forward rate agreements, foreign exchange forward contracts or options. Transactions are only undertaken with counterparties of strong credit quality and must be related to existing or highly probable exposures. Credit risk on trade and other receivables is mitigated both by the selection of counterparties based on credit quality, and their diversity. Certain receivables are also credit insured. There is no meaningful price risk other than those mentioned above. Within this framework, considerable autonomy is granted to each of the three businesses. C O R P O R AT E C I T I Z E N S H I P S H A R E I N F O R M AT I O N A U T O M O B I L E D I S T R I B U T I O N C A R R E N TA L V E H I C L E G L A S S A N N U A L A C C O U N T S 21