1.6.4.1

As indicated in the regulations of the Supervisory Board, the Supervisory Board has the following three key committees: an audit committee, a remuneration committee and a selection and appointment committee. These committees were appointed by the Supervisory Board from among its members. The Supervisory Board remains responsible for resolutions, even if they were prepared by one of its committees. The Supervisory Board has prepared regulations for each committee, containing the principles and best practices of those committees. The regulations and the composition of the key committees are posted on the company’s website. During the year under review the Supervisory Board received reports from each of the committees on their deliberations and findings. The composition of the committees, the number of committee meetings, the most important meeting items and the performance of duties by the committees are outlined below.

Audit committee

In 2016 the Audit committee consisted of Sandra Addink-Berendsen (Chair) and Cees van Rijn (member). As established in the regulations, the Audit committee supports the Supervisory Board in its supervisory duties and responsibilities in the area of (i) external financial reporting, audit and compliance with legislation and regulations for financial reporting, (ii) appointment and performance of the external auditor, (iii) quality and effectiveness of internal, financial and management reports as well as systems for internal control/risk management, and (iv) compliance with internal procedures, legislation and regulations and codes of conduct.

In 2016 the Audit committee met four times. The external auditor was present during all these meetings. In addition, the CEO, the CFO, the director of Reporting, Tax & Risk Management, and the Corporate Secretary were present during all these meetings. The committee discussed with (representatives of) the Executive Board and with the external auditor, the 2015 annual accounts (financial statements), the 2015 Report of the Executive Board, the 2016 half-year results, the trading update and the press releases pertaining thereto, the Management Letter, and the external audit plan for 2016. In addition, the follow-up of the recommendations of the external auditor, the risks and risk control and management systems, the staffing of the finance department and the tax planning at group level were discussed. With the agenda the members of the Audit committee also always received an overview of (pending and/or potential) legal claims, as well as an overview of incident notifications. After each meeting, the Audit committee always spoke, without the presence of (representatives of) the Executive Board, with the external auditor and shared its findings with the Supervisory Board on relations with the external auditor. The committee considers that relations with the external auditor are satisfactory and supports the proposal to appoint KPMG Accountants N.V. as auditor for the 2017 financial year. The Audit committee has ascertained that the risks relating to the Company strategy have been illustrated and that the system for controlling risks during the financial year have been implemented. The Audit committee has also been actively involved in the recruitment process for the internal auditor employed by ForFarmers from 1 January 2017.

Selection and appointment committee

During the year under review the Selection and appointment committee was formed by Messrs. Jan Eggink (Chairman) and Henk Mulder (member). As established in the regulations, the Selection and appointment committee submits proposals to the Supervisory Board regarding the selection criteria and appointment procedures, and regarding the scope, composition, appointments, reappointments, and assessment of the performance of the Executive Board.

In 2016 the Selection and appointment committee met twice. The committee has set up an individual profile for the vacancy that opens in 2017 as a result of Henk Mulder leaving. This profile has been approved by the Supervisory Board and established in its informal meeting on 7 July 2016. At the proposal of the Supervisory Board, the General Meeting of Shareholders of 15 April 2016 changed the term of office of Arnout Traas and Jan Potijk as members of the Executive Board. As a result thereof, a term of office of four years was attached to Arnout Traas’ appointment and a term of office of three years was attached to Jan Potijk’s appointment from the date of the meeting. Upon nomination by the Supervisory Board, Cees van Rijn was reappointed by the aforementioned General Meeting as a member of the Supervisory Board for a term of four years. In connection with the succession of Henk Mulder, the Selection and appointment committee performed the necessary preparations and held interviews with candidates in 2016. Mr Cees de Jong, currently President and CEO of the Danish stock listed bioscience company Chr. Hansen, was put forward to the Supervisory Board because of his broad international experience in large branch related organisations. The Board has nominated Mr de Jong to be appointed a member of the Supervisory Board by the General Meeting of Shareholders to be held on 26 April 2017.

Remuneration committee

Cees van Rijn (Chairman) and Erwin Wunnekink formed part of the Remuneration committee for the entire 2016 financial year. As established in the regulations, the Remuneration committee submits proposals to the Supervisory Board for the remuneration policy to be pursued and the remuneration of individual members of the Executive Board. The remuneration policy was adopted by the General Meeting of 15 April 2016 and approval was granted to the regulations as regard rights for acquiring depositary receipts of ordinary shares for members of the Executive Board.

The Remuneration committee met four times in 2016. The CEO was always present during these meetings. The committee performed preparatory activities during the drawing up of the remuneration policy for the Executive Board, the remuneration report and the conversion of the employment contracts of Arnout Traas and Jan Potijk to contracts in accordance with their respective terms of office. In addition, the Remuneration committee held discussions with the CEO and made a proposal to the Supervisory Board regarding the short term variable bonus targets (STI) for the Executive Committee for 2016. This also applies to the long-term variable bonus targets (LTI – 2016-2018) for the Executive Committee (a period of three years). The plans were discussed and approved by the plenary Supervisory Board. The Remuneration committee discussed the realisation of the objectives stipulated in 2015 with the Executive Committee on the basis of which the variable remuneration (STI and LTI 2013-2015) was calculated. In this respect the Remuneration committee relied on the report of the auditor in which the correctness was determined of the calculation of the variable remuneration related to the financial targets. The Supervisory Board then approved the proposed bonus amounts. The progress of the realisation of the short- and long-term targets were also discussed. The Remuneration committee discussed the employee participation plan for 2016. These plans were approved by the Supervisory Board. The Remuneration committee has made proposals to the Supervisory Board regarding changes to the remuneration policy for the coming years. The proposals will be submitted to the general shareholders meeting on 26 April 2017. The main aspects of the contracts with members of the Executive Board were published on the Company’s website. During the General Meeting of Shareholders of 15 April 2014, the remuneration of the Supervisory Board was established for a period of three years. In the period under review, the Remuneration committee put forward the remuneration of the Supervisory Board to an external organisation consultancy agency for assessment. For this assessment, a comparison was made with a peer group. The peer group consists of the ten largest small cap companies and the ten smallest mid cap companies listed on Euronext and are equal to the peer groups as 

1.6.4.2

1.6.4.3

used for determining the new remuneration policy of the Executive Committee. In determining the peer-group, comparability in terms of scale, complexity, significance and results were taken into account. During the General Meeting of Shareholders of 26 April 2017, adjustments to the remuneration of the Supervisory Board will be proposed for a new period of three years, i.e. 2017-2020.

Activities of the Supervisory Board outside the meetings

Outside the meetings there has been regular contact between the Chairman, the other members of the Supervisory Board and the Executive Committee about various subject matters. In addition, members of the Board visited East-Germany (Beelitz), and the United Kingdom, along with members of the Executive Committee.

Management conferences

In June and December ForFarmers held conferences for the senior management. During these meetings, in the presence of some members of the Supervisory Board, attention was paid to the progress and implementation of the Horizon 2020 strategy.

Works Council

In 2014 the large companies regime (in Dutch: ‘structuurregime’) was set up at the level of ForFarmers Corporate Services B.V. (holding of the Dutch ForFarmers-companies). Mr. Hajé Nordbeck is a member of the supervisory board thereof on the nomination of the (joint) works council. ForFarmers N.V. has a European works council that met twice in the period under review. These meetings were not attended by members of the Supervisory Board. As stated in the Supervisory Board Regulations, the initiative for a meeting convocation can come from the European Works Council or the Supervisory Board.

Education

As part of the continuous professional education of the plenary Supervisory Board, the Supervisory Board members followed workshops in market abuse and the developments in the field of corporate governance. In addition, several members of the Board follow courses with different institutions.

Final comments

ForFarmers has, under the management of the Executive Committee and other managers and with the commitment, knowledge, and dedication of all employees in 2016, achieved further progress as a result of strategic initiatives that form part of Horizon 2020. We would like to thank the Executive Committee, the employees and the works councils for their dedication and commitment. We are confident that the results of this work will also be visible in 2017.

Lochem, 13 March 2017

The Supervisory Board