Robeco Institutional Asset Management B.V. 13 Interim financial statements for the six-month period ended 30 june 2014
Contents General information... 2 Report of the Board of Directors... 3 General... 3 Corporate information... 3 Financial situation and results for the six-month period ended 30 June 2014... 3 Significant events and transactions... 4 Interim Financial Statements... 5 Interim Income Statement... 5 Interim Balance Sheet... 6 Accounting principles for valuation and determination of the result... 7 Notes to the Interim Income Statement... 11 Notes to the Balance Sheet... 13 Responsibility statement... 17 1
General information Supervisory Board The Company has no Supervisory Board. Board of Directors L.M.T. Boeren H.W.D.G. Borrie R.M.S.M. Munsters H.A.A. Rademaker J.B.J. Stegmann Address Robeco Institutional Asset Management B.V. Coolsingel 120 The Netherlands P.O. Box 973 NL-3000 AZ Rotterdam Tel +31-10 - 224 12 24 Web www.robeco.nl/riam Email fundinfo@robeco.nl 2
Report of the Board of Directors General We herewith present Robeco Institutional Asset Management B.V. s (also referred to as the Company ) interim financial statements for the six-month period ended 30 June 2014 together with the report of the Board of Directors. Corporate information Robeco Institutional Asset Management B.V. is established in the Netherlands. The main activities are regular investment management activities for which management fees and other fees are received. Besides regular investment management (including securities lending) also alternative investments, including private equity and structured investment products can be considered as main activities for the Company. All shares of Robeco Institutional Asset Management B.V. are owned by Robeco Groep N.V. Financial situation and results for the six-month period ended 30 June 2014 The operating result for the first half year increased from EUR 19.7 million to EUR 21.9 million. The Company s net income from fees over the reporting period was EUR 93.7 million, slightly higher than over the first half of 2013. In view of the ban on distribution fees regarding investment services for retail investors as of 1 January 2014, most Dutch distributors switched their clients fund investments to share classes with a reduced management fee (without the distribution fee). This impacted both the Company s management fees as well as the distribution costs. Operating expenses were slightly higher for the reporting period at EUR 72.3 million compared to the EUR 72.2 million over the same period in 2013. The income from investments in group and associated companies after tax has increased to EUR 8.6 million, compared to EUR 3.3 million over the first half of 2013. The Company does not employ staff in the Netherlands directly. The domestic staff that is involved in activities of the Company is formally employed by Robeco Nederland B.V., another subsidiary of Robeco Groep N.V. The average number of employees that is formally directly employed at the six international offices for the reporting period was 40 (first half of 2013: 38). The tax expense in the first half of 2014 was EUR 6.2 million, EUR 5.3 million lower than the same period in 2013, mainly due to a one-off tax burden in the first half of 2013. The net result after tax over the first half of 2014 was EUR 24.4 million, a increase of EUR 12.9 million compared to the same period in the previous year. Management considers the financial position of the Company sound. During the financial period, shareholders equity decreased by EUR 25.4 million to EUR 133.1 million, due to a dividend distribution of EUR 50.0 million in June 2014, which was mitigated by the positive result of the period of EUR 24.4 million. The Company s cash position at balance date was EUR 7.7 million (EUR 6.0 million as per 31 December 2013). 3
Significant events and transactions During the first half of 2014 no events or transactions have occurred that are significant to an understanding of the changes in financial position and performance of the entity since the end of the last annual reporting period. As of 2 July 2014, Robeco Securities Lending B.V. and Robeco Direct N.V. have been merged with Robeco Institutional Asset Management B.V. (the acquirer). With the realization of the mergers Robeco Groep N.V. has updated the required regulatory licenses more in line with the international determined requirements for an asset manager. As per 22 July 2014, the Authority for the Financial Markets (Autoriteit Financiële Markten) has withdrawn the license as an investment firm ( beleggingsonderneming ). The remaining AFM license has been transformed into an AIFM license. Rotterdam, 27 August 2014 The Board of Directors L.M.T. Boeren H.W.D.G. Borrie R.M.S.M. Munsters H.A.A. Rademaker J.B.J. Stegmann 4
Interim Financial Statements Interim Income Statement for the six-month period ended 30 June EUR x million Notes 2014 2013 unaudited unaudited Income from fees Management and other fees 1 174.2 189.9 Distribution and subadvisory costs 2-80.5-98.3 Net income from fees 93.7 91.6 Other income 0.5 0.3 Operating income 94.2 91.9 Administrative expenses 3 59.2 60.6 Employee benefits expense 4 5.5 6.8 Depreciation and amortization 8 + 9 - - Other expenses 5 7.6 4.8 Operating expenses 72.3 72.2 Operating result 21.9 19.7 Finance income 0.2 0.1 Finance costs -0.1-0.1 Result before tax 22.0 19.7 Income tax expense 6 6.2 11.5 Result from investments in group and associated companies after tax 7 8.6 3.3 Result for the period 24.4 11.5 5
Interim Balance Sheet As at EUR x million Notes 30 June 2014 31 December 2013 unaudited unaudited Assets Non-current assets Intangible assets 8 0.1 - Tangible fixed asset 9 0.3 0.1 Investment in group and associated companies 7 63.7 68.7 Deferred tax assets 10 7.8 7.9 71.9 76.7 Current assets Debtors 11 3.9 2.7 Group companies 12 143.7 199.6 Other receivables 13 39.7 44.5 Cash and cash equivalents 14 7.7 6.0 195.0 252.8 Total assets 266.9 329.5 Equity and liabilities Equity 15 Issued capital 0.1 0.1 Share premium 0.4 0.4 Foreign currency translation reserve 11.2 11.0 Legal reserve 0.5 0.5 Other reserves 96.5 111.8 Result financial period* 24.4 34.7 133.1 158.5 Non-current liabilities Deferred tax liabilities 10 6.0 6.2 Total non-current liabilities 6.0 6.2 Current liabilities Group companies 16 90.2 122.3 Other liabilities 17 37.6 42.5 Total current liabilities 127.8 164.8 Total equity and liabilities 266.9 329.5 * The result financial period for 2014 is related to the six-month period ending 30 June 2014. The result financial period for 2013 relates to the full year. 6
Accounting principles for valuation and determination of the result General information Robeco Institutional Asset Management B.V. (also referred to as the Company ) is established in the Netherlands. The main activities are regular investment management activities for which management fees and other fees are received. Besides regular investment management (including securities lending) also alternative investments, including private equity and structured investment products can be considered as main activities of the Company. All shares of Robeco Institutional Asset Management B.V. are owned by Robeco Groep N.V. During the first half of 2014, the Company had two licenses as required by section 2:65 sub 1 and 2 of The Financial Supervision Act (Wet op het financieel toezicht) and was under supervision of the Authority for the Financial Markets (Autoriteit Financiële Markten). The interim financial statements of the Company are prepared in accordance with Dutch law (section 2:9 of the Dutch Civil Code) and the Financial Supervision Act (Wet op het financieel toezicht), but apply, for the valuation of assets and liabilities, as much as possible the accounting principles of Robeco Groep N.V. These accounting principles are compliant with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU), which comprise standards and interpretations approved by the International Accounting Standards Board (IASB). Accounting policies Consolidation For the interim financial statements of Robeco Institutional Asset Management B.V. a statutory balance sheet and income statement will suffice. In accordance with the provisions in article 2:408 of the Dutch Civil Code no consolidation takes place. Basis of preparation These accounting policies describe the valuation methods used. If no explicit accounting policy is given for an individual item on the balance sheet, the item is accounted for at nominal value. The interim financial statements are presented in euros since this is the functional currency of Robeco Institutional Asset Management B.V. Numbers are rounded to the nearest tenth of a million and all amounts disclosed in the notes to the interim income statement and the balance sheet are in tenth of a million, except when explicitly stated otherwise. The interim financial statements have been prepared on basis of historical cost less accumulated depreciation and amortization and any accumulated impairment losses. Significant accounting judgments, estimates and assumptions The preparation of interim financial statements requires the use of judgment and estimates. This affects the recognition and valuation of assets and liabilities, the disclosure of contingent liabilities as of the date of the interim financial statements and the reported amounts of income and expenses during the reporting period. Although these estimates are based on management s best knowledge of current events and actions, the actual results may differ ultimately from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised. Provisions A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of a past event, for which it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. The maturity and amounts of the provisions are based on management s best estimate. Intangible assets Intangible assets are stated at cost less any accumulated amortization and any accumulated impairment losses determined individually for each asset. The assets are reviewed for impairment annually. Tangible fixed assets Tangible fixed assets are valued at the acquisition price less accumulated depreciation. Tangible assets are depreciated over their estimated useful lives, on a straight-line basis. 7
Investment in group and associated companies Investment in group and associated companies are valued at the Company s share in the net asset value determined in accordance with the accounting policies applied in these interim financial statements. Deferred tax Deferred tax is provided using the liability method on temporary differences at the reporting date between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, at the tax rates that are expected to apply in the year when the asset is realized and the liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date. A deferred tax asset is recognized for tax benefits relating to the carry forward of unused tax losses when it is probable that estimated future taxable profits will be available for which these losses can be utilized. The carrying amount of deferred income tax assets is reviewed annually and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. A deferred tax liability is provided for the recognized taxable temporary differences between the tax base and the carrying amount for financial reporting purposes at the reporting date. Deferred tax liability is also provided in respect of the recognition of fair value identification on other intangible assets and in respect of loss recapture due to double tax relief regulations. Current assets Current assets are stated at face value, less any allowances for uncollectible accounts. Unless stated otherwise, receivables have a remaining term of less than one year. Debtors relate to outstanding invoices. Derivative financial instruments and hedge accounting The Company enters into transactions in derivative financial instruments (foreign currency forwards) which, in combination with a foreign currency loan, are designated and qualified as net investment hedges of foreign operations. Such derivative financial instruments are initially recognized at fair value on the date on which the derivative financial instruments were entered into and subsequently remeasured. Derivative financial instruments are carried as assets if the fair value is positive and as liabilities if the fair value is negative. The Company has designated the derivative financial instruments as net investment hedges of foreign operations. The effective portion of changes in the fair value of hedges of net investments in foreign operations is recognized in the foreign currency translation reserve. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. When a financial instrument is designated as a hedge, the Company documents the relationship between the hedging instrument and the hedged item. Accordingly, the Company documents its assessment, both at hedge inception and on an ongoing basis, of how effective the derivative financial instruments used in hedging transactions are in offsetting changes in the fair values of hedged items. This assessment includes a way of assessing the hedging instrument s effectiveness in offsetting the exposure to changes in the hedged item s fair value attributable to the hedged risk. Cash and cash equivalents Cash and cash equivalents consist of immediately available credit balances. Current liabilities Current liabilities are valued at nominal value. Foreign currencies Monetary assets and liabilities denominated in other currencies are translated into euros at the spot rates prevailing at the balance sheet date. Non-monetary items measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value are 8
converted using the exchange rates at the date when the fair value was determined. The assets and liabilities of foreign operations, including goodwill, are translated into euros at exchange rates prevailing at the balance sheet date. Income and expenses are converted at the exchange rates prevailing at the relevant transaction date. The exchange rate differences are taken to the income statement and are recorded in the other expenses. Changes in the valuation of investments in foreign entities are taken to equity. Changes in the valuation of derivative financial instruments, which are designated as a hedge against the foreign operations currency risk, are also recorded taken to equity. Management and other fees Management and other fees include management fees, subadvisory fees, service fees, distribution fees, performance fees and other fees. Fees are recognized when the services have been performed. Management and service fees are primarily based on predetermined percentages of the market values of the assets under management and are affected by changes in assets under management, including investment performance and net subscriptions or redemptions. Performance fees are calculated as a percentage of the performance of the relevant assets under management and recorded when earned. Distribution fees received from third parties are received in relation to the distribution of funds managed by other Robeco entities. Distribution and subadvisory costs Distribution and subadvisory costs include trailer fees, one-off distribution expenses and subadvisory costs payable to third and related parties. Trailer fees, one-off distribution expenses and subadvisory costs are recognized when the services have been performed and can be reliably measured. Trailer fees are primarily based on predetermined percentages of the market values of the average assets under management of the investments, including investment performance and net subscriptions or redemptions. One-off distribution expenses are upfront fees to distributors related to structured products. Subadvisory costs are paid to related asset managers. These costs are based on predetermined percentages of the market values of the average assets under management of the investments. Other income Other income consists of all income except for the management and other fees. It includes fees for administrative services for clients and charges to other Robeco Group companies. The revenues are recognized when earned. Other expenses Other expenses consist of expenses charged by third parties for services to the Company. The expenses are recognized in the period in which the services are rendered to the Company. Other expenses also include fund related costs concerning services provided by third or related parties (such as transfer agency and fund administration). In addition, the Company bears part of the costs of annual meetings, listings and annual reports. Interest income and expenses Interest income and expenses are recognized as earned or incurred. Interest income comprises of income related to cash and short-term loans. Interest expenses comprises of interest payable on interest-bearing loans. Tax Robeco Institutional Asset Management B.V. is part of a fiscal unity within the meaning of the Dutch Corporate Income Tax Act 1969. Some foreign offices of the Company are considered to be permanent establishments. These offices are therefore subject to corporate income tax in the country they operate and file their own corporate income tax returns. The profits made by these foreign offices will not be taxable in the Netherlands due to the existing double income tax treaties. Tax losses incurred by foreign permanent establishments are since 2012 no longer deductible for the Dutch corporate income tax. To prevent double taxation, Robeco Institutional Asset Management B.V. receives a deduction of tax to the extent that the aforementioned profits are part of its Dutch corporate income tax base and to the extent that the accumulated profits exceed accumulated losses deducted before 2012. The calculation of corporate income tax is made as if the Company is an independent taxpayer. Payable corporate income taxes have been settled with Robeco Groep N.V. via the current account under the heading Group companies. The taxes are calculated on the basis of the applicable rate for tax, taking into account tax-exempt profit constituents and deductible items. 9
Robeco Institutional Asset Management B.V. is part of a fiscal unity for Dutch corporate income tax purposes headed by Robeco Groep N.V. and is jointly and severally responsible for the resulting tax liability, as are the other companies that are part of the tax group. Income tax Income tax on the profit or loss for the year comprises current and deferred tax. Income from investments in group and associated companies after tax Income from investments in group and associated companies after tax is the Company s share in the net result of the investments in associated companies determined in accordance with the accounting policies applied in these financial statements. Carried interest The Company, acting, directly or through subsidiaries, as the General Partner of some Private Equity vehicles, is entitled to receive a share (Carried Interest) of the realized profits of the Investee Funds. Carried interest is calculated based on a share of profits taking into account the cash already distributed by the Investee Funds and the amount of divestment proceeds receivable or to be received upon disposal as estimated by the General Partner. Proceeds are distributed by the Investee Funds in such a manner that the General Partner will not receive a distribution of Carried Interest before the Partners have received their Contributed Capital and an agreed upon return on their investments. Since only the Carried Interest amounts received in cash are to be regarded as reasonably assured, Carried Interest is recognized as revenue in the Income Statement as from the actual distribution by the Investee Funds. The paid out Carried Interest amounts are to be regarded as advances on the final amount calculated upon liquidation of the Investee Funds, since they are subject to claw back until a point in time toward the end of life of the Investee Funds. 10
Notes to the Interim Income Statement 1 Management and other fees Management and other fees can be specified as follows: For the six-month period ended 30 June EUR x million 2014 2013 Management fees 53.2 70.7 Distribution fees received from other Robeco Group companies 67.4 71.9 Subadvisory fees received from other Robeco Group companies 46.1 39.1 Service fees 3.0 4.6 Distribution fees received from third parties 1.7 2.2 Performance fees 2.5 0.1 Other fees 0.3 1.3 Total management and other fees 174.2 189.9 Subadvisory fees and distribution fees received from other group companies are mainly received from the subsidiary Robeco Luxembourg S.A. 2 Distribution and subadvisory costs The costs can be broken down as follows: For the six-month period ended 30 June EUR x million 2014 2013 Distribution costs 49.5 73.9 Subadvisory costs 31.0 24.4 Total distribution and subadvisory costs 80.5 98.3 3 Administrative expenses Robeco Nederland B.V. charges operating costs, relating to the management of investment funds and mandates and related financial services. The costs allocation includes indirect organizational costs and direct business related costs, which include costs for staff, information technology, marketing and housing, and are based on a consistently applied cost allocation model. Robeco Nederland B.V. is legally the employer of personnel and charges the related expenses to the Company. On average, the recharge over the first half of 2014 contained 535 FTE s (first half of 2013: 557 FTE s) direct and indirect personnel. These expenses also include recharges by other entities within Robeco Group. 4 Employee benefits expense Staff costs can be specified as follows: For the six-month period ended 30 June EUR x million 2014 2013 Wages and salaries 4.9 6.1 Social security and pension costs 0.3 0.3 Other staff costs 0.3 0.4 Total staff costs 5.5 6.8 The decrease in wages and salaries is related to additional expenses in the first half of 2103. In the first half of 2013 the wages and salaries expenses were relatively higher, due to higher commitments and granted payments as a result of the change of ownership of Robeco Groep N.V., and due to higher variable remuneration in foreign subsidiaries. 11
Robeco Institutional Asset Management B.V. employs staff in two ways. Domestic staff is located in the Netherlands and is formally employed by Robeco Nederland B.V., the group's domestic service company. Domestic staff is made available to the Company through an inter-company service agreement. The costs for such staff are included in the administrative expenses paid to Robeco Nederland B.V. by the Company. Robeco Nederland B.V. is a wholly-owned direct subsidiary of Robeco Groep N.V., the Company's parent company. International staff is formally employed by the Company and is located in the Company's international offices. During the first half of 2014, on average 40 FTE s (first half of 2013: 38 FTE s) international staff was executing operational activities on behalf of the Company. The pensions of formally employed staff are based on defined contribution plans. These plans are provided by external insurance companies. The pension costs concern the paid insurance premiums by the Company. The distribution of the average international staff by country is as follows: For the six-month period ended 30 June FTE s 2014 2013 Germany 11 11 Japan 10 8 Spain 7 7 Middle East 7 7 Shanghai 3 3 Korea 2 2 Total average number of employees 40 38 5 Other expenses Other expenses can be specified as follows: For the six-month period ended 30 June EUR x million 2014 2013 Fund and client related costs 2.9 3.2 Housing and furniture 0.5 0.4 Marketing 0.4 0.5 Travel and accommodation 0.3 0.3 Operational claims 0.8 0.8 Information technology 0.1 0.1 Other 2.6-0.5 Total other expenses 7.6 4.8 Fund- and client-related costs include fund administration costs of Private Equity funds. Other mainly relates to consultancy costs, accountancy costs and exchange rate differences. 6 Tax The corporate income tax rate in the Netherlands in the first half of 2014 was 25.0% (2013: 25.0%). The effective tax rate of the Company is higher as a result of profits by the foreign offices which are subject to higher tax rates. The tax liability is included in the current account with Robeco Groep N.V. and settled monthly. 12
Notes to the Balance Sheet 7 Investment in group and associated companies The following subsidiaries are currently included in the interim financial statements of Robeco Institutional Asset Management B.V.: 30 June 2014 31 December 2013 Robeco Bestuurder Bewaarder B.V Netherlands 100% 100% Robeco General Partner European II B.V. Netherlands 100% 100% Robeco General Partner Funds B.V.* Netherlands 100% 100% Robeco General Partner Global II B.V. Netherlands 100% 100% Robeco General Partner Sustainable B.V. Netherlands 100% 100% Robeco Luxembourg S.A. Luxembourg 99.9% 99.9% Robeco Manager BSR B.V Netherlands 100% 100% Robeco Manager Clean Tech II B.V. Netherlands 100% 100% Robeco Manager European III B.V. Netherlands 100% 100% Robeco Manager Global III B.V. Netherlands 100% 100% Robeco Manager Responsible II B.V. Netherlands 100% 100% Robeco Miami B.V.** Netherlands 100% 100% Robeco SAM Clean Growth IV General Partner BV Netherlands 100% 100% Robeco Securities Lending B.V. Netherlands 100% 100% RobecoSAM A.G. *** Switzerland 100% 100% * Robeco General Partner Funds B.V holds a 26.67% membership interest in RGS Capital LLC, and 100% of Robeco SAM Clean Tech III General Partner LLC. ** The activities of Robeco Miami B.V. are based in Miami (FL), United States of America *** RobecoSAM A.G. holds a 100% interest in RobecoSAM USA Inc., United States of America Investments in associated companies also includes a 27.5% interest in SET Venture Partners, powered by Chrysalix and Robeco B.V., the Netherlands. The value of the investments in group and associated companies developed as follows: EUR x million 30 June 2014 31 December 2013 Value of investments in group and associated companies at 1 January 68.7 91.8 Dividend distribution -13.9-36.1 Result current period 8.6 13.0 Result previous years - -0.1 Pension remeasurements at RobecoSAM A.G. - 0.8 Currency result on participating interest 0.3-0.7 Value of investments in group and associated companies at end of period 63.7 68.7 All stated group and associated companies are considered to be related parties. The Company has filed a Section 403 declaration for Robeco Miami B.V. 8 Intangible assets The recorded intangible assets consist of purchased software that is amortized on a straight-line basis in a five years period. 13
9 Tangible fixed assets The recorded tangible fixed assets are amortized on a straight-line basis in a five years period. 10 Deferred tax asset and liability The deferred tax asset relates to the offset of future taxable profits with cumulative tax losses brought forward in Germany. The capitalization is made possible by the rapidly improving profits due to a strong increase of assets under management by German clients over the recent years. The deferred tax liability relates to the future profits in Germany which will be taxable in the Netherlands at a different tax rate than the deferred tax asset. 11 Debtors Debtors relate to outstanding invoices. Since all amounts are expected to be received, no provision is deemed necessary. 12 Group companies This item relates to current accounts and current account loans with Robeco Group entities. The current accounts are settled periodically. The Company has granted current account loans on a monthly basis to Robeco Groep N.V. The balance was EUR 100.0 million at 30 June 2014 (31 December 2013: EUR 168 million). The current account loan is granted for cash management purposes and the interest rate is based on Euribor. The effective interest rate in the first half of 2014 was 0.2% (2013: 0.1%). 13 Other receivables Other receivables mainly consist of accruals for management fees, performance fees and other fees. The other receivables also include the fair value of a foreign currency forward of EUR 0.4 million (31 December 2013: EUR 0.1 million in other liabilities). 14 Cash and cash equivalents Cash and cash equivalents consist of immediately available credit balances. 15 Equity At 30 June 2014, the Company s authorized share capital amounted to EUR 91 thousand (200 shares), of which EUR 41 thousand is placed and paid in full. Foreign currency translation reserves Result financial period EUR x million Issued capital Share premium Legal reserves Other reserves Total At 31 December 2013 0.1 0.4 11.0 0.5 111.8 34.7 158.5 Results 2013 - - - - 34.7-34.7 - Dividend distribution - - - - -50.0 - -50.0 Add: results for the six-month - - - - - 24.4 24.4 period ending 30 June 2014 Other - - 0.2 - - - 0.2 At 30 June 2014 0.1 0.4 11.2 0.5 96.5 24.4 133.1 The foreign currency translation reserve includes the exchange rate differences arising from the translation of the financial statements of foreign subsidiaries. It also includes the foreign currency gains or losses on the hedging instrument of the net investment hedge in the foreign subsidiaries. 14
16 Group companies This item relates to current accounts and current account loans with Robeco Group entities. The increase in current account with group companies is mainly caused by additional expenses due to higher commitments and granted payments as a result of the change of ownership. The current accounts are settled periodically. As per balance date, the Company is granted current account loans on a monthly basis by the following subsidiaries: EUR x million Currency 30 June 2014 31 December 2013 Effective interest rate Robeco Securities Lending B.V. EUR 30.4 33.0 0.2 % RobecoSAM A.G. CHF 8.0 8.0 1.5 % 17 Other liabilities Other liabilities can be specified as follows: EUR x million 30 June 2014 2013 Distribution costs, subadvisory costs, and other accrued liabilities 33.2 34.4 Other liabilities 4.3 8.0 Social security cost, wage tax and VAT payable 0.1 0.1 Total other liabilities 37.6 42.5 The Company hedges the foreign currency-conversion risk of net investments in foreign entities using foreign currency forwards. At 30 June 2014, a forward contract with a notional amount of EUR 106.9 million (31 December 2013: EUR 103.4 million) exists. 18 Contingent assets and liabilities The Company acts as guarantor for fulfilling the obligations of Stichting Effectengiro RAM relating to the obligations to account holders. At 30 June 2014, Stichting Effectengiro RAM has an obligation to clients of EUR 1.4 billion (31 December 2013: EUR 1.4 billion). In the same amount Stichting Effectengiro RAM has receivables on the funds composed of deposited securities. The Company has issued a guarantee in which the Company commits itself to fulfill the obligations of Stichting Robeco Funds towards their clients. As per 30 June 2014, Stichting Robeco Funds has cash in the amount of EUR 1.7 million (31 December 2013: EUR 0.9 million) that relate to items to be settled in the short term. The Company has entered into commercial leases of EUR 0.2 million (31 December 2013: 0.3 million) regarding the car fleet. The term of these leases is between 1 and 4 years. The Company has rental commitments regarding buildings of EUR 3.7 million (31 December 2013: EUR 2.4 million). These rental commitments have remaining terms of between 1 and 4 years. The Company has irrevocable credit facilities related to guarantees of EUR 0.2 million (31 December 2013: EUR 0.1 million). The Company is part of a tax group headed by Robeco Groep N.V. and is jointly and severally responsible for the resulting tax liability, as are the other companies that are part of the tax group. The paid out Carried Interest amounts are to be regarded as advances on the final amount calculated upon liquidation of the Investee Funds, since they are subject to claw back until a point in time toward the end of life of the Investee Funds. The amount of Carried Interest, which is accrued but not yet distributed by the Investee Funds, is to be marked as a contingent asset (EUR 8.8 million as per 30 June 2014. 31 December 2013: EUR 5.6 Million). The final amount of the Carried Interest to be distributed by the Investee Funds may be significantly different from the amount earlier marked as contingent assets. 15
19 Related parties Until June 30th 2013, Rabobank Group, consisting of the former parent entity of Robeco Groep N.V., Rabobank Nederland, and entities under the common control of Robeco Groep N.V. formed a related party. Orix Corporation and entities under the common control of Robeco Groep N.V. formed a related party, effective from July 1st 2013. During the first half of 2014 there were no operational transactions with Orix or entities belonging to ORIX. The Company s core business is managing funds and mandates on behalf of investors in these funds and mandates. As a result of the core investment activities, for which management and other fees are received, the Company is also related to the managed funds. The transactions for these related parties regarding management fees received from funds and distribution and subadvisory costs paid are included in the operating income of the Company. In some cases related parties act as a distributor on behalf of Robeco Institutional Asset Management B.V. and the funds. Non-Dutch distributors receive fees at market rates based on the average assets under management. Some related parties are also clients. These client relationships may consist of mandate investments and/or direct investments in retail and institutional funds. The fees for these activities are also in line with market rates. Besides the services of other market parties, Robeco Institutional Asset Management B.V. also uses the services of several related parties to treasury, custody and securities lending. Transactions are executed at market rates. The Company has been granted current account loans by some of its subsidiaries. The Company has granted current account loans to its owner, Robeco Groep N.V. The Company has not created a provision for doubtful debts relating to amounts owed by related parties (31 December 2013: EUR nil), because the risks involved are not considered to be material. 20 Remuneration of key management personnel The Board of Directors is acknowledged as key management personnel having authority and responsibility for planning, directing and controlling activities of the Company. The Board of Directors is not entitled to salaries and benefits from the Company, as the Board of Directors is employed by Robeco Nederland B.V., which is part of Robeco Group. 21 Events after the reporting date The first quarter of 2014, Robeco Groep N.V., the shareholder of the Company, started to execute mergers of Robeco Securities Lending B.V. and Robeco Direct N.V. with Robeco Institutional Asset Management B.V. (the acquirer). This merger has been effectuated on 2 July 2014. With the realization of the mergers Robeco Groep N.V. has updated the required regulatory licenses more in line with the international determined requirements for an asset manager. 16
Responsibility statement The Board of Directors of Robeco Institutional Asset Management N.V. confirms to the best of its knowledge that: The interim financial statements, prepared in accordance with art 9 of Book 2 of the Dutch Civil Code and the Financial Supervision Act (Wet op het financieel toezicht), give a true and fair view of the Company s assets, liabilities, financial position and result. The Report of the Board of Directors includes a fair review of the developments and performance of the Company s business and the position in the financial six-month period together with a description of the principal risks and uncertainties that it faces for the remaining six-months. The Report of Board of Directors and the interim financial statements are neither audited nor reviewed by an external auditor, except for the comparative figures in the interim balance sheet. Rotterdam, 27 August 2014 The Board of Directors L.M.T. Boeren H.W.D.G. Borrie R.M.S.M. Munsters H.A.A. Rademaker J.B.J. Stegmann 17