Contents. Other information

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At the General Assembly of Shareholders held on 6 May 2004, the sharehol-ders of AOT N.V. (‘AOT’) voted to change the name of AOT N.V. to Binck N.V. (hereinafter, ‘Binck’). So whenever mention is made in this report of Binck N.V., it will be referring to the former AOT N.V.

In addition, the name ‘Effectenbank Binck N.V.’ has been changed to BinckBank N.V. (hereinafter, ‘BinckBank’). So whenever mention is made in this report of BinckBank, it will be referring to the former Effectenbank Binck N.V.

In this annual report the subject of corporate governance is frequently discus-sed. When mention is made of the ‘Code’, reference is being made to the Dutch Corporate Governance Code (hereinafter, the ‘Code’).

This annual report is a translation of the Dutch version of the annual report 2004 of Binck N.V. The Dutch version of the annual report 2004 of Binck N.V. is leading. Binck N.V. can not warrant that the translation of the Dutch version of the annual report 2004 of Binck N.V. into the English language is correct, complete and consistent. Binck N.V. does not accept any liability in this respect.

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1 annual r epor t 2004

Company profile Binck

Binck provides services in the field of securities

and derivatives to various types of investors. Its

activities are conducted within three business

units (‘BU’) ‘Retail’, ‘Wholesale’ and ‘Trading’.

In the Business unit Retail, BinckBank acts as an

Internet broker for private investors. In addition,

BinckBank works with external independent asset

managers and brokers providing

banking services and the execution of

securities orders.

The Business unit Wholesale

mediates in securities and derivatives

transactions of domestic and foreign

institutional investors and securities

houses.

The Business unit Trading consists of

a number of subsidiary companies at

home and abroad. These subsidiaries

trade for their own account in shares,

bonds and derivatives.

Retail BinckBank N.V. Bewaarbedrijf BinckBank B.V. Wholesale Trading - Binck Securities B.V. - AOT Derivatives B.V. - AOT Nederland B.V. Paris Branch - AOT België B.V.

- Hills Independent Traders Ltd. - HIT Securities Ltd.

- SevenStars Ltd. - Trader Team Ltd.

Mission

Binck’s mission is to offer - through its knowledge of securities brokerage and trading - fully automated, high quality, cost-effective online access to interna-tional stock exchanges.

We aim to maintain our position as an independent, specialist company and combine it with healthy growth, thereby serving the interests of our clients, shareholders and staff which is our guiding principle.

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Key figures 2004

Breakdown of results by business unit

Retail Wholesale Trading Total

2004 2003 2004 2003 2004 2003 2004 2003

Interest 2,844 1,558 59 (31 61 180 2,964 1,707

Revenue from securities and 2,754 (20 2,754 (20

participating interest

Commission 11,389 7,468 4,012 7,808 15,401 15,276

Result from financial transactions 19,091 7,593 19,091 7,593

Revenues 14,233 9,026 4,071 7,777 21,906 7,753 40,210 24,556

Wages and salaries (3,814 (2,958 (1,843 (3,223 (16,213 (14,432 (21,870 (20,613

Depreciation (623 (731 (202 (198 (1,370 (1,970 (2,195 (2,899

Exceptional value adjustments (282 (935 (282 (935

Other management expenses (3,916 (2,883 (1,322 (2,087 (5,368 (9,769 (10,606 (14,739

Operating expenses (8,353 (6,572 (3,367 (5,508 (23,233 (27,106 (34,953 (39,186

Operating result before tax 5,880 2,454 704 2,269 (1,327 (19,353 5,257 (14,630

Tax (2,036 (957 (131 (436 561 6,652 (1,606 5,259

Operating result after tax 3,844 1,497 573 1,833 (766 (12,701 3,651 (9,371

Minority interests (500 (906

Net profit 3,151 (10,277

Breakdown of financial data by region

Domestic Abroad Total

2004 2003 2004 2003 2004 2003

Total revenues 28,902 11,864 11,308 12,692 40,210 24,556

Investments in property and equipment 1,875 487 107 169 1,982 656

Depreciation 1,867 2,475 328 424 2,195 2,899 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

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to €39.2 million in 2003) and of a substantial impro-vement in total revenues (€40.2 million in 2004 compared to € 24.6 million in 2003).

Because of the new strategy adopted in 2004 and the subsequent reorganisation, Binck incurred cer-tain exceptional and/or non-recurring revenues and expenses in 2004. Net, this resulted in a loss for the year for its trading activities. The trading activities that were maintained contributed positively to the results in 2004.

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Results in brief

In 2004, the company earned a net profit of €3.2 million compared with a loss of €10.3 million in 2003. This result was achieved after deduction of an exceptional item of about€0.5 million, the result of the takeover of BinckBank’s minority interest in May 2004 and the purchase of the minority interest in AOT Floor Broker Specialist B.V. in December 2004 for the period that the minority interest was not in Binck’s possession. Adjusting for the exceptional item, profit after corporate tax came to €3.7 million. This result was mainly achieved through our retail activities whose profits after corporate taxes came to €3.8 million. The wholesale activities achieved a positive result after corporate tax of €0.6 million. The business unit Trading, during a period of transi-tion, made a loss after corporate tax of €0.8 million. The improved result is both the consequence of a reduction in costs (€34.9 million in 2004 compared

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annual r epor t 2004 5

Key data

Overview of the results 2004 2003 2002 2001 2000

(€ 1,000.-)

Revenues 40,210 24,556 27,412 65,585 103,728

Expenses (34,953 (39,186 (44,072 (45,345 (57,393

Result before tax 5,257 (14,630 ( 16,660 20,240 46,335

Tax (1,606 5,259 7,793 (6,815 (14,546

Result after tax 3,651 (9,371 (8,867 13,425 31,789

Third-party interest (500 (906 (566 46 (1,224

Net profit 3,151 (10,277 (9,433 13,471 30,565

Data per share 2004 2003 2002 2001 2000

Earnings per share in €1) _0,11 _(0,42 _(0,39 _0,55 _1,22

Dividend per share in € 0,05 - - 0,22 0,50

Net asset value per share in€2) 3)

1,50 1,89 2,22 2,88 2,88

Share-price at year end 3,20 1,37 1,70 3,87 5,90

Number of staff at year end 187 272 289 308 197

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

1) Based on the average number of shares outstanding during the year.

2) Based on the number of shares outstanding at the end of the year and before deduction of the proposed dividend.

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2004, a successful year

Dear Shareholders and Other Readers,

In many ways, 2004 has been a good year for Binck. Firstly, we have embarked on a new course and changed from being a securities trading firm to become a company whose stated core activity is securities brokerage. In addition, we have effected a turnaround, from being a loss-making company to a profitable one - mainly as the result of the positive contribution of BinckBank.

Before I go into the performance of the various busi-ness units, I would like to spend some time on the merger of the former AOT and BinckBank, and the strategic re-orientation and reorganisation that took place as a result. At the end of 2003, we made a start on the critical assessment of business units at home and abroad regarding risk and profitability. By choos-ing to make securities brokerage the company’s core activity, the business units have been judged on three criteria: strategic fit, profitability and synergy. If these criteria are not fulfilled, their activities are ter-minated or disposed of. This plan has been very suc-cessful and is now delivering results that are already clearly positive. We have been able to turn around the heavy loss of €10.3 million into a decidedly posi-tive result of €3.2 million this year. So I am delighted to announce that, on the basis of the good results for 2004 and the confidence we have in the future, we have decided to propose the payment of a divi-dend of €0.05 at the next General Assembly of Shareholders.

The merger of AOT and BinckBank has left its mark on the year and demanded a great deal of effort, especially internally. Where there are synergies departments have been combined, procedures have been brought into line with each other and a single integrated infrastructure has been made of two sep-arate ones. Every member of staff deserves much credit for the speed, effort, enthusiasm and success

A word from the CEO

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with which this project was completed. The technical integration was largely completed within three months after the amalgamation of the firms. Moreover, cultural differences were flexibly bridged. We now have a unity of purpose and a common goal. Thus, all the joint business units can present themselves as a single strong company with an extraordinary degree of potential.

During the year each business unit has undergone developments that have made a positive contribu-tion to the quality of our organisacontribu-tion. The Business unit Retail, which once more showed vigorous growth in 2004, has done an outstanding job, with a 58% growth in turnover, a 156% growth in profits and a doubling of the number of clients from about 10,000 to about 20,000.

This success is due to the combination of high-quality technology with the lowest possible prices and exceptional customer service. With this unique proposition we expect to be able to stimulate many more investors to change over to BinckBank in the coming years.

The business unit Wholesale is struggling with pressure on fees in a highly competitive derivatives transactions market which have had a negative influence on its results. This is a trend that is being felt throughout the entire sector. Nevertheless, Binck has remained a major player in transactions

between professionals on the derivatives market of Euronext Amsterdam. In order to maintain and expand a strong position in the wholesale market, we started offering services to institutional investors, including in the field of equities. With the combination of a strongly automated product, low rates and expert and dedicated staff, we offer investors easy and inexpensive access to all the stock exchanges that are important to them.

Finally, we come to our business unit Trading. The activities that remained after winding up unprof-itable activities or those that did not fit in with the company strategy - of which more in the

manage-ment report - have achieved a positive result. The equity trading desk has performed outstandingly and, in spite of the fact that the bond desk had to battle with lower turnover, the result was positive here too. However, due to the losses incurred by those businesses which have now been closed together with the one-off costs associated with their closure, the overall results from Trading were still negative. The Trading activities that we have retained and which were active at the end of 2004 made a very positive contribution to the 2004 results and with that provide a sound basis for a healthy future in 2005 and the following years.

In conclusion, I would like to express my thanks to all staff for their great efforts, loyalty and unconditional support. I would also like to thank the supervisory directors for the way in which they exercised their supervisory duties and the useful advice we were able to count on from them. Finally, I would like to thank the shareholders for their confidence and the inspiration they have given us to make the amalga-mation of both companies a success. In 2005 our attention will be focussed on the continuity and expansion of our successful activities, so that we can offer as much value as possible for your investment in our shares. We have also paid a great deal of attention to introducing the Code, which we will go into in more detail later in this report.

It only remains for me to say that Binck will continue to do everything it can in 2005 to be of service to its clients, shareholders and other interested parties.

Amsterdam, 5 April 2005

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Shareholders information

The Code, as Binck applies it, expressly stipulates that the company must provide for careful and struc-tured communication with shareholders and other interested parties. Events that affect the price of Binck shares are clearly communicated and explained in good time to the market. In 2004 an investor relations manager was engaged and a num-ber of procedures established that will lead to a structured investor relations policy in 2005.

In 2004, communications with shareholders and press led to regular attention being paid to Binck shares in the business pages of the national media. The merger of Binck and BinckBank, the improve-ment in results, and announceimprove-ments of new devel-opments and milestones such as, for example, the 20,000th customer, appear to have had a positive influence on the company’s share price.

This can be seen both from the considerably higher average daily turnover and from the rise in the share price (€3.30 on 21 December 2004). The combination of higher turnover and higher share price is proof of the public’s increased interest in Binck’s shares.

In 2004 an average of 61,368 Binck shares were trad-ed daily (2003: 30,000). Binck is continually tradtrad-ed on Euronext Amsterdam, and amply meets the crite-ria for this.

2004 2003

Highest share price € 3.30 € 1.74 Lowest share price € 1.34 € 0.94 Share price at year-end € 3.20 € 1.37 On 21 April 2004, Binck raised its minority interest in BinckBank to 100%. As a result of this transaction, 6,468,454 new shares were issued on the basis of

€2.00 per share - as a component of the purchase price - which meant that the paid-up capital was increased to 30,837,403 ordinary shares and 50 prior-ity shares each at a nominal price of €0.10.

In accordance with the Law on Announcing Control, three shareholders were announced on 31 December 2004 with an interest of between 5% and 10%. These are:

- Boron Investments N.V. - J.J. van Oosterom - J. Kluft

Authorised and paid-up capital

Ordinary shares

End of 2004 End of 2003 Authorised 100.000.000 100.000.000

Paid-up 30.837.403 24.368.949

Priority shares End of 2004 End of 2003

Authorised 50 50

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Binck

15 April AOT N.V. reaches agreement with BinckBank shareholders on the takeover of minority interest. AOT N.V. and BinckBank continue as a single entity:

• AOT N.V. extends its interest in BinckBank to 100%

• The activities of BinckBank become the core activities of the new combination • AOT pays €6.3 million in cash and 6.5 million AOT N.V. shares for a 48% stake • AOT N.V. continues under the name of Binck N.V.

6 May AOT shareholders vote for a takeover of the minority interest in BinckBank.

10 May The listing of AOT N.V. on Euronext Amsterdam continues under the name Binck N.V.

9 June Binck announces exploratory talks with the management of AOT Australia Pty Ltd. about a management buy-out.

1 July The activities of AOT Floor Broker Specialist B.V. (CMM and PMM) and the day-trading centres in Haarlem and Veenendaal are halted.

6 August Binck publishes first combined half-yearly figures. These are positive:

• Net result:€0.24 million (2003: €4.69 million negative)

• Big increase in profits from retail brokerage:€1.58 million (2003: €0.02 million).

Binck also announces in this statement that the heavily loss-making activities in Paris are to be closed.

19 August Binck reaches agreement with the management of AOT Australia Pty Ltd. on a management buy out. The transaction has no material effect on the 2004 results.

15 December Binck announce they are at an advanced stage of negotiations on the acquisition of the remaining minority interest in AOT Belgium.

BinckBank

30 July BinckBank is the first financial institution in the world to offer all its clients free streaming quotes.

23 August BinckBank launches BinckTrader: an advanced trading platform for very active private investors.

11 November BinckBank Panel Discussion attracts a record number of private investors with more than 600 participants. Technical analyst Royce Tostrams wins the Binck Bull & Bear Award.

10 December BinckBank announces it has doubled its clients from 10,000 to 20,000.

Important events

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with the aid of advanced trading systems and quantitative research. This approach is based on high quality service combined with low pices. The business unit concentrates on institutional investors and international securities brokers.

Trading

The business unit Trading trades exclusively on its own risk and account. By using the support of auto-mated systems and quantitative analysis software in trading, this unit aims to be a step ahead of the

average market participant. Trading concentrates on specific niches in the market where an attractive profit on invested capital can be made at an acceptable risk. The risk is monitored with the aid of a limit system set up internally. Binck’s principle is that the amount of capital taken up for trading activities must not exceed 33% of available funds. In addition, the aim is also to develop trading activi-ties in support of execution activities, apart from the existing advantages of synergy (costs) with the other activities.

Binck

Binck’s corporate strategy is geared to offering fast, low cost and effective access to the most important stock exchanges in the world, for private, professional and institutional investors. A high degree of automa-tion plays an important role in this. Binck has set itself the goal of distinguishing itself from the majority of financial service providers, particularly in The Netherlands. In particular, Binck is making strenuous efforts to optimise synergies between all the Business Units. For the time being, the advantage of synergy can particularly be seen in sharing of the infrastructure and the costs

thereof. In the future, the advan-tage of synergy will also become visible in the commercial field.

Retail

The business unit Retail provides services to private and profes-sional clients from BinckBank. BinckBank’s corporate strategy consists of a combination of far-reaching service, a high level of service provision and very low prices. The customer is of central importance at BinckBank; our

customers’ opinions are our guide when it comes to, for example, the introduction of new products or adapting our service.

Wholesale

The strategy of the business unit Wholesale is geared to offering a very extensive, integrated product in the field of equities and derivatives brokerage. Here, use is made of both ‘voice broking’ and fully-automated execution of securities orders

Strategy

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An energetic start to the new

combination

Binck can look back on a positive year. A loss of €10.3 million in 2003 has been turned around into a profit of €3.2 million. Both the change of strategy and the accompanying reorganisation are working out as expected.

The Business unit Retail - providing services to pri-vate investors and independent asset managers and the core activity of the organisation - has once more performed exceptionally strongly. Wholesale, where securities and derivatives orders are executed on behalf of institutional investors, was somewhat dis-appointing. Because of the pressure on prices in the professional derivatives segment, the income was lower than expected. Finally, within the Business unit Trading the trading departments that remained showed very satisfactory results. Winding up the sec-tions that were responsible over the last few years for the heavy losses produced the desired effect. Because of the reorganisation resulting from the strategic reorientation, the ultimate net result was strongly influenced this year by incidental revenues and expenses. However, by negotiating this obstacle, a healthy basis for the future has been created, and Binck can look forward to 2005 with confidence.

Retail: providing services to private and

professional investors

With the business unit Retail, BinckBank acts as an Internet broker for private investors. In addition, BinckBank works with external independent asset managers and brokers providing banking services and the execution of securities transactions. BinckBank stands out from its competitors through its low prices in combination with a very high level of quality of service. Retail performed exceptionally well again this year. The number of private clients doubled from about 10,500 at the end of 2003 to nearly 20,000 at the end of 2004. Turnover and prof-its respectively rose by 58% and 156%.

Internet brokerage for private investors

The basis of the service provision to private investors is constituted by the website Binck.nl, the customer services and order desk. The site offers everything to enable people to make good investment decisions and execute orders quickly thereafter, 24 hours a day. In addition to the transaction section, clients will find a great deal of investment information on the site, such as streaming prices, analyses and an exten-sive company information database. BinckBank makes a distinction in its service provision between the passive to active investor and the very active investor, who does several transactions per day. The website Binck.nl offers all the required functionali-ties for the passive and active investor. For the very active investor, BinckBank offers BinckTrader, a trad-ing application that is fully geared to the require-ments of this target group. BinckTrader users have a trading system comparable to the systems used by professional traders in dealing rooms. Both Binck.nl and BinckTrader are continually being adapted to the clients’ requirements.

In 2004 the media campaign concentrated mainly on the low prices of BinckBank, highlighting price com-parisons for securities transactions between BinckBank and its competitors. Low prices for securi-ties transactions are the most important motive for potential clients to change over to BinckBank. In the marketing campaign less emphasis was put on the quality of service. Nevertheless, this good quality was expressed in the high valuation given to BinckBank in various independent surveys into the services of online brokers. In addition, active recom-mendations by satisfied existing clients is one of the driving forces behind the growth of BinckBanks’s online brokerage activities; more than half of all new clients are brought in by existing clients. Most of the private clients come from the major Dutch banks. Competitors in the field of Internet brokerage include ABN Amro, Postbank, SNS Bank, ING Bank and Rabobank (including Alex).

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A.E. (André) Teeuw (CEO) (b. 1946 - Dutch)

Chairman of the Board of Binck since the Annual General Assembly of Shareholders on 6 May 2004.

From 1986 to 1993 André Teeuw was the General Manager of Barclays de Zoete Wedd Nederland N.V. (BZW) and was CEO of Barclays Bank and BZW Deutschland from 1993 to 1998. From 1998 to 2000 he was Managing Director and Head of Corporate Banking Europe at Barclays Bank plc in London. Between 2000 and 2003 André Teeuw was engaged in various advisory capacities in the financial sector until his appointment as statutory director of AOT in October 2003.

He currently holds the position of Chief Executive Officer (CEO) with special responsi-bilities for Wholesale, Trading and Investor Relations.

K.J. (Kalo) Bagijn (CCO) (b. 1971 - Dutch)

Commercial director of BinckBank since 2000 and appointed statutory director of Binck during the Annual General Assembly of Shareholders on 6 May 2004.

From 1996 to 2000 Kalo Bagijn worked at IMG Holland, his last posi-tion being Head of Private and Institutional Clients. In 2000 he was partly responsible for the foundation of Binck Brokers N.V. (later,

BinckBank). He currently holds the position of Chief Commercial Officer (COO) with special responsibilities for Retail, Communications and Public Relations.

T.C.V. (Thierry) Schaap (CFO) (b. 1971 - Dutch)

General Manager of BinckBank since 2000 and appointed statutory direc-tor of Binck during the Annual General Assembly of Shareholders on 6 May 2004.

From 1996 to 2000 Thierry Schaap worked at IMG Holland, where he was responsible for the Capital Management and Research depart-ments. In 2000 he was partly respon-sible for the foundation of Binck Brokers N.V. (later, BinckBank). He cur-rently holds the position of Chief Financial Officer (CFO) with special responsibilities for Finance, Operations and IT.

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Wholesale: brokerage for institutional

investors and investment houses

The business unit Wholesale offers securities and derivatives brokerage services to institutional investors and investment houses at home and abroad. Derivatives execution is faced with pressure on fees. Over the last year this has had a negative impact on the income of the department. BinckBank is a major player on Euronext.Liffe Amsterdam with a strong market share. In order to maintain and raise this market share, by combining derivatives with equity brokerage, a more complete product will be offered to our clients in 2005. As a result, equity bro-kerage is evolving from a support service into a fully-fledged product.

Partly because of scandals on Wall Street and action taken by the FSA (the British financial regulatory body), institutional investors are increasingly unbundling the purchase of independent research and order execution. Binck is responding to this by offering electronic brokerage together with voice broking; the electronic system that was originally developed for own-account trading has been made suitable and accessible for institutional investors through the addition of extra functionalities. This means they can trade on all major stock exchanges without being a member themselves.

The brokers and/or sales traders are, in servicing clients, supported by a quantitative research desk, so that active trading strategies and portfolio hedging techniques can be offered. By offering these integrat-ed services BinckBank expands its customer base with pension funds, hedge funds and other asset managers. This new proposition offers good oppor-tunities for the business unit Wholesale.

Results

In 2004, the business unit Wholesale made a profit of € 0.6 million compared with a profit of € 1.8 mil-lion in 2003. This result was largely achieved by the wholesale derivatives business of BinckBank - in addition to a modest contribution from equity bro-kerage and, for part of the year, from AOT Australia. Banking services and order execution

for professional investors

Retail also offers services to professionals, such as independent asset managers and brokers. In the role of what is traditionally called a custodian, BinckBank executes securities transactions for customers of asset managers or brokers. In addition, the asset manager outsources his back office partly or entirely to BinckBank, including the securities administration as well as reporting to the client. BinckBank offers professionals an online application (‘DBA’) with which the asset manager anywhere in the world, 24 hours a day, can put in orders and view all the data of his clients. This application can also take over (some of) the back office functions, which means that orders and other changes no longer have to be registered in a separate administrative system. DBA generates fully automated client reports. This enables the professional to concentrate on his core tasks: implementing investment policy and main-taining contact with his customer.

As a supplement to the DBA, asset managers and brokers are supported by a team of expert account managers. The team expanded considerably in 2004; 15 new professional clients joined BinckBank in 2004. There are about 100 independent asset managers and brokers in The Netherlands; 30 of these use BinckBank’s services. Next to BinckBank, Effectenbank Stroeve (part of Rabobank) and Theodoor Gilissen (part of the KBL Group) are active as specialist custodian banks.

Results

In 2004, Retail booked an after-tax profit of €3.8 mil-lion compared to a profit of €1.5 million in 2003. Total revenues rose to €14.2 million (€9.0 million in 2003), a rise of 58%. Thanks to increasing automa-tion, expenses rose less rapidly to €8.4 million in 2004, compared to €6.6 million in 2003, a rise of 27%. The interest margin in 2004 amounted to €2.8 million, compared with €1.6 million in 2003. Through a more sophisticated treasury approach we expect to be able to improve the interest margin, by which a growing stream of stable revenues will be created.

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sis in trading lies on the most liquid AEX, DAX, CAC40 and FTSE100 stocks, while there is less trading in midcap shares.

Both day-traders and those running overnight posi-tions are active on the equity desk. Traders work partly independently and partly in tandem. In order to have sufficient span over and impact on the market and in doing so maximise trading profits -tandems trade in two or three sectors. Moreover, a number of the overnight traders are active in the field of special products and apply specific trading strategies to these.

The equity desk operates automated systems and applies quantitative analysis software. In this way the desk aims to keep a step ahead of the average market participant.

Bond trading

The bond desk specialises in trading in so-called ‘odd lots’ in government bonds, credits (predominantly investment grade) and agencies. Binck acts as a liquidity provider on the Euronext exchanges. In 2004 the bond desk used relatively little capital. The results for the past year were positive, though were significantly down on the previous year.

Foreign trading subsidiaries

Binck is active through Hills Independent Traders Ltd. in London in trading for own account in derivatives and underlying securities. In 2004 Hills achieved, on the basis of operational activities, acceptable results. In addition, Binck operated a number day-trading centres at various locations in the UK through HIT Securities Ltd. Since the year end the activities of HIT Securities Ltd. have been wound up and running commitments are being settled.

The decline of the 2004 result is largely due to falling volumes, pressure on margins in the whole-sale derivatives brokerage activities and the whole-sale of the wholesale business in Australia.

Trading; trading for own account in

equities, derivatives and bonds

Trading results showed a very mixed picture last year. Major changes took place in this business unit. Tested against our criteria - strategic fit, profitability and synergy - it was concluded that a number of trading activities did not meet one or more of these criteria. As a result, it was decided to close the day-trading centres in Veenendaal and Haarlem and to terminate the activities of AOT Floor Broker Specialist and AOT Paris Branch. None of these loss-making activities fitted in with the newly developed strategy. Moreover, the derivatives market making of AOT Floor Broker Specialist and the branch in Paris was at odds with the derivatives brokerage activities of BinckBank. Closure costs and staff redundancy payments - and particularly the losses of AOT Paris Branch - had a very negative impact on the results of the Business unit Trading .

Trading results of AOT Australia Pty Ltd. were not dis-appointing and the online brokerage activities might have been adapted strategically. However, because the firm operated in a completely different time-zone - and for a company of our scale difficult to manage - it was decided to sell the firm to the man-agement by means of a Manman-agement Buy-Out.

Equity trading

Binck trades on the basis of its own memberships of Euronext, Xetra and the LSE. Trading on NYSE and NASDAQ is done via a local broker. The main

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empha-15 annual r epor t 2004

IFRS

Binck is a Dutch stock exchange listed company and must from 1 January 2005 therefore comply with the accounting rules as described in the International Financial Reporting Standards (IFRS). In general, the changes under the IFRS have limited impact on Binck’s annual accounts.

On the basis of an analysis carried out in 2004, applying current IFRS rules, the negative impact on the results would be € 0.2 million at the end of 2004. Half of this amount is due to the changed val-uation of the securities positions held for trading purposes and half to the change in valuation of stock options allocated to staff. On the other hand, the change in shareholders’ equity is more limited because an amount of € 0.1 million has to be added to the shareholders’ equity under the changed reporting method regarding stock options. In 2005, Binck will comply with then applicable rules. Given advancing developments concerning IFRS, it is possi-ble that information provided above will conse-quently be different.

In addition, the implementation of IFRS will result in a change to the valuation of the investment portfo-lio. Binck’s investment portfolio consists of a fixed-interest portfolio of government bonds and those issued by financial institutions. Part of this invest-ment portfolio will be valued in accordance with the principles of ‘Hold to Maturity’ investments and is subsequently quoted at amortisation value. The oth-er part is valued on the basis of the principles of ‘Available For Sale’ investments, for which changes in value will effect shareholders’ equity.

Binck holds a 58% stake in AOT België NV. This com-pany is active in the field of derivatives trading for own account on the Belgian market. Over the last few years this market has faced steeply declining volumes, which has put the income of AOT België NV under pressure. At the beginning of 2005, Binck reached an agreement with the minority sharehold-ers of AOT Belgie NV on the takeover of their inter-est. Derivatives trading will be wound up and AOT België N.V. will convert its activities to Binck’s core business.

Results

The result after corporate tax for Trading in 2004 came to a loss of €0.8 million, compared with a loss of €12.7 million in 2003. The pre-tax loss of €1.3 mil-lion is however considerably less than the loss of €19.3 m in 2003. Furthermore, in 2004 Binck liqui-dated the remaining positions of the derivatives arbitrage activities which were terminated in Autumn 2003 and incurred the necessary costs asso-ciated.

At the end of 2004 Binck still had three active trad-ing activities namely: a) equity tradtrad-ing from

Amsterdam; b) bond trading from Amsterdam and c) derivatives trading from London.

In addition, there is still a limited position from the derivatives trading activities in Belgium, which it is expected will be wound up at the beginning of 2005. All these activities made a positive contribution to the results for 2004.

Substantial cost reductions have been made through the reorganisation of trading activities and the inte-gration with BinckBank. It is expected that this process should result in further cost savings in 2005.

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Outlook

The positive developments deployed in 2004 are expected to continue in 2005. Of course, in this respect we are dependent on developments in finan-cial markets worldwide. Rapid growth of the busi-ness unit Retail and the expansion of services in the wholesale area on the one hand and the results of the reorganisation of the business unit Trading in 2004 on the other, strengthen our confidence progress can be maintained.

It is expected that the share of BinckBank’s execu-tion services (retail and wholesale) of total income (approximately 50%) will increase considerably through expected growth of execution services in general and retail activities in particular. It is expect-ed that a more stable income flow will result from these activities in 2005 and beyond. Thanks to far-reaching automation of our company, we expect that the aforementioned income growth will be accompanied by a limited rise in costs. To express our confidence in the future, we will be proposing to the next General Assembly of Shareholders to pay a divi-dend of ¤0.05 per share.

Amsterdam, 4 March 2005

The Management Board

A.E. Teeuw, CEO K.J. Bagijn, CCO T.C.V. Schaap, CFO

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Composition of the Supervisory Board

Supervisory directors are appointed by the General Assembly on the basis of a non-binding nomination by the ‘Stichting Prioriteit’. Messrs. A.H.J. Risseeuw and F.E. Delbaen stepped down as supervisory direc-tors at the AGM of 2004. The Supervisory Board are grateful to Messrs. Risseeuw and Delbaen for the valuable contribution they have made to the compa-ny and would like to thank them once more for their efforts in this regard.

At the AGM of 2004, Messrs. C.J.M. Scholtes, J.K. Brouwer and A.M. Van Westerloo were appointed as the company’s supervisory directors.

At present, Mr. Scholtes is Chairman and Mr. Langereis Vice-Chairman of the Supervisory Board. The Supervisory Board therefore currently comprises of Messrs. Scholtes, Langereis, Brouwer and Van Westerloo.

In our opinion the Supervisory Board is composed in such a way that members can operate independently within the framework of the profile of the

Supervisory Board, both with regard to each other as well as with regard to the management or any related interest. In our view, Art. III.2.1 of the Dutch Code of best practices is complied with. This article gives interpretation to the principles of the Code on inde-pendence and stipulates that all supervisory direc-tors - with the exception of one person - must comply with the criteria for independence described in detail in Art. III.2.2. Strictly speaking, Mr. Langereis does not qualify as being independent in the sense of Best Practice Art. III.2.2. Mr. Langereis - or, more precisely the firm he as a (tax) lawyer is a partner of - provided fiscal legal advice to the company, on an incidental basis, in the year prior to his re-appointment at the AGM of 2002. However, the Supervisory Board is of the opinion that, partly because of the incidental nature, the limited financial interest of the work undertaken by (the firm of) Mr. Langereis and the completely reasonable fee invoiced, there is no ques-tion of any degree of incompatibility of interests. From a substantive point of view, the Supervisory 2004 was a turbulent year for the company,

which was mainly marked by the (indirect)

acqui-sition of all BinckBank shares. Preparation and

execution of this transaction required a great

deal of effort from all those involved. Both

com-panies have largely been integrated in the

mean-time, whilst in addition a number of business

units have been closed down or disposed of. These

units did not meet the changed strategic

objec-tives presented at the Annual General Assembly

of Shareholders (AGM) in 2004. At the time of

acquiring BinckBank, changes were made to the

Management Board and the Supervisory Board.

Finally, last year necessary steps were taken with

regard to Corporate Governance.

The task of the Supervisory Board is to overview

the strategy being implemented by the

manage-ment and the business activities it conducts.

Moreover, the Supervisory Board has the task of

providing advice to the management

represent-ing the interests of the company and its

stake-holders. In this report we comment our activities

during the financial year 2004.

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Board therefore considers Mr. Langereis as effectively independent.

The company has set up ‘whistle-blowing’ regula-tions that enables staff to report irregularities with-out fear for their position within the company.

A reduction in the number of Supervisory Board members to three instead of four does not seem necessary given the circumstance in which the com-pany now finds itself. The current number of mem-bers ensures the desired diversity of expertise, expe-rience and interest. Members of the Supervisory Board have attended virtually all meetings. The Chairman of the Supervisory Board adheres to this good practice. Absence must be limited to cases of force majeure.

Supervisory Board Regulations

During our meeting held on 20 October 2004, we instituted a new regulation. This regulation is in accordance with the Code and will be posted on the company’s website in 2005. The regulation for the Supervisory Board mentioned in Best Practice Art. III.7.3 of the Code, in which rules are laid down with regard to the possession of and transactions in secu-rities by supervisory directors other than those issued by Binck is, for practical considerations, inte-grated in the regulations for the Supervisory Board. Supervisory directors are also bound by the regula-tions in force with the company, and agreed by them, concerning insider knowledge and the regula-tions on price-sensitive information and personal account transactions.

You can find details about the supervisory directors on page <x> of this annual report. A supervisory director’s tenure of office is four years. You will find details about the remuneration of the supervisory directors under Art. 2:383d of the Civil Code on page <x> of this annual report. The retirement schedule, together with the profile of the Supervisory Board will be made available on the company’s Web site in 2005.

Meetings of the Supervisory Board

Work in 2004

The Supervisory Board is deeply involved in the busi-ness of the company. This is illustrated by the fact that the Supervisory Board held six regular meetings in 2004, while the Chairman, together with one member of the Supervisory Board, also conducted many informal consultations with the CEO. Moreover, the Audit Committee held meetings four times as well. After the takeover of the BinckBank minority integration of both business demanded very regular communication.

In principle, for 2005 the Supervisory Board envis-ages a similar schedule of meetings. Supervisory directors attach great importance to being closely involved with the course of business within the com-pany. It is moreover desirable that the supervisory directors be involved in the planned legal merger of Binck and BinckBank. Frequent contact is required in order to obtain the requisite approval of De

Nederlandsche Bank (DNB).

The agenda for meetings of the Supervisory Board was covering a wide range of issues, with valuable contributions on all aspects of company’s business given by expert staff members. The quality of the documents provided in preparation of the meetings, largely fulfilled the requirements set for them. Members of the board were able to exchange mean-ingful arguments on the basis of the papers tabled, which is of course conducive to careful decision-making. The atmosphere during the combined meet-ings of the Supervisory Board and the Management Board over the last year was open, collegial, critical and constructive. Both the supervisory and the advi-sory roles of the Superviadvi-sory Board were done full justice. Participants at the meetings felt the manner consecutive chairmen presided the meetings, was adequate.

In the absence of the Management Board, the super-visory directors discussed the functioning both of

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that securities brokerage becomes a core activity and that trading activities, which by nature did not fit with the new strategy, providing insufficient synergy with the other business units or not achieving the profitability targets set, are wound up or disposed of. The divestment program largely completed to date, was last year to a large extent led by André Teeuw. It was inevitable that this rationalisation would be costly. Kalo Bagijn dedicated all his energies to driv-ing forward retail activities, while Thierry Schaap ful-ly concentrated on the successful integration of the financial administration, operations and IT with simultaneous improvement of management infor-mation systems.

The Supervisory Board discussed the strategy for 2005 and subsequent years with the Management Board. The strategy decided on in 2004 will in princi-ple be continued. Important preconditions for the success of this strategy are the maintenance of the company’s distinguishing capability in online broker-age and its strong competitive position in chosen market segments related thereto. Of course, the suc-cess of the strategy will to some extent be deter-mined by general market conditions. The Supervisory Board and the Management Board are confident that the chosen strategy will bear fruit.

In its absence the Supervisory Board evaluated the functioning of both the Management Board as a whole and its individual members. The assessment was made taking the foregoing into consideration. The Supervisory Board came to the unanimous con-clusion that the Management Board, both as a whole as well as individually, delivered a high level of performance in 2004.

During 2004 the Supervisory Board discussed the strategy and risks relating to the company several times, together with the outcome of the assessment by the Management Board of the implementation and functioning of the internal risk-control and mon-itoring systems, and possible changes of any signifi-cance therein.

the Supervisory Board as a whole and of its individ-ual members, together with the conclusions to be drawn. This assessment was made, taking all the foregoing into account and against the background of the profile, composition and competence of the Supervisory Board, and that of its individual mem-bers.

Functioning of the Management Board

When Binck took over the BinckBank shares, the members of the respective Management Boards involved adopted a professional attitude and fulfilled their responsibilities, each from their own perspec-tive. The expectation that from this starting position, with joint efforts and commitment from the mem-bers of the various managements, a close-knit team would be created, has proven to be fully justified.

With his extensive experience in the financial sector, André Teeuw as CEO, forms an outstanding combina-tion with Kalo Bagijn and Thierry Schaap, who have been working closely together for some time before. There were no noticeable tensions between the indi-vidual members of the Management Board that required intervention of the Supervisory Board. On the contrary, the split of responsibilities between the directors appeared to be balanced and effective.

The integration of Binck and BinckBank from techni-cal, organisational and cultural points of view was a major challenge for all those involved and was com-pleted successfully. The most important business objectives were achieved, in spite of relatively unfavourable market conditions, through the inspir-ing leadership of directors and other executives. Cost control was given the requisite degree of attention and is expected in future to make another contribu-tion to the improvement of the company’s perform-ance.

The company is on the right track to tidy up its busi-ness activities, taking into account the change of strategy presented to the shareholders at the 2004 AGM and approved thereby. This strategy implies

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Remuneration

General

Binck does not currently have a remuneration policy adopted by the General Assembly of Shareholders. The remuneration of the directors for 2004 is there-fore based on their respective employment con-tracts. André Teeuw’s salary amounts to €300,000 gross per annum, with that for Thierry Schaap and Kalo Bagijn amounting to €210,600. Based on the successful amalgamation of Binck and BinckBank, together with the positive results for 2004 - includ-ing realisation of the Management Base Plan 2004/2006 (business unit Retail) and the decidedly positive contribution directors made thereto, the Supervisory Board has decided to pay a bonus to the directors. For André Teeuw the bonus amounts to €100,000 and for Kalo Bagijn and Thierry Schaap, €50,000 each.

In this section of the report, principle II.2.8 of the Code will be implemented by giving an overview of the remuneration policy envisaged by the

Supervisory Board for 2005 and subsequent years. According to principle II.2.8 of the Code, the Report of the Supervisory Board should include the main features of the remuneration report on the compa-ny’s policy in this respect.

At the 2005 AGM the policy will be presented for adoption. Any substantial changes to the adopted remuneration policy will also be presented to the General Assembly, together with thorough justifica-tion. The Supervisory Board decides on the remuner-ation package of the individual directors, taking the policy adopted by the General Assembly into consid-eration.

Basic principles

In order to stimulate that the operational objectives of Binck for the short term and the strategic objec-tives for the medium/long term are achieved and that qualified and expert directors of a high calibre can be attracted and kept, who moreover have the

requisite orientation and background to lead and manage a successful, technology-driven securities firm, it is important to implement a pay system in conformation with market practice, rewarding direc-tors for achieving ambitious objectives that are set for the respective period of time.

Employment contracts

Tenure of office

Members of the Management Board are appointed for a maximum period of four years.

They may be re-appointed for further periods of no more than four years. As a basic principle, directors will be re-appointed if they perform well. Of course, it is possible that the appointment will be terminat-ed prematurely. In order to prevent too many direc-tors stepping down at the same time, a schedule of resignations will be applied.

According to established jurisprudence, the legal relationship between director and company is not only governed by corporate law but also by labour law. For this reason employment contracts are con-cluded with directors whose duration corresponds with the period of tenure under corporate law. According to Dutch labour law, employment con-tracts do not in all circumstances terminate when the agreed duration specified comes to an end. It is up to the legislature to remove this lacuna in the position of the director of a company with regard to labour law. In expectation thereof, legally permissi-ble measures will if possipermissi-ble be taken to ensure that the duration of the employment contracts for direc-tors corresponds with their period of tenure under corporate law or conversion provisos concluded.

Notice period

The employment contracts with the directors will include the option that either of the parties may cancel the contract prematurely at the end of a cal-endar month, giving the statutory period of notice. In principle, a period of notice will be agreed of six

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annual r epor t 2004 22 Hans Brouwer (1944)

Mr. Brouwer was appointed as a Member of Effectenbank Binck NV’s Supervisory Board in January 2001 and was appoint-ed as a Member of Binck NV’s Supervisory Board during the General Assembly of

Shareholders of 6 May 2004 for a three-year term. Nationality: Dutch. Mr. Brouwer is a Member of the Supervisory Board (NPM Capital participation) for: Keesing International Publishers, Royal JPC and Van Meijel Automation, Chairman of the Supervisory Board for Royal Hauseman & Hötte and a Member of Nobel van Dijk & Partners’ Supervisory Board. Mr. Brouwer is also a Board Member of the Stichting Administratiekantoor

(Administrative Foundation) Eriks Group, Stichting Leerstoel Effectenrecht Rijksuniversiteit Groningen (Foundation Chair Securities Law at Groningen National University) and Stichting Vereniging voor de Effectenhandel (Foundation Association for Securities Trade), as well as Chairman of the Amindho Foundation and Stichting Jazzorchestra of the Concertgebouw; and a member of the Advisory Council to Professional Vision. Mr. Brouwer is the former Managing Director of Amsterdam Exchanges (Euronext), Chairman of NLK Kas’ Supervisory Board and Member of Newconomy’s (Real Time Company) Supervisory Board.

Number of shares in Binck NV: 0

Fons van Westerloo (1946)

Mr. Van Westerloo was appointed as a Member of Effectenbank Binck NV’s Supervisory Board in January 2001 and was re-appointed for a three-year term during the General Assembly of

Shareholders of 6 May 2004 as the Chairman of Binck NV’s Supervisory Board. Nationality: Dutch.

Mr. Van Westerloo is the Managing Director of the Holland Media Group, CEO of HMG/RTL Nederland and a member of RTL Group’s Operational Management Committee. Additionally, Mr. Van Westerloo is Chairman of Radio Noordzee’s Supervisory Board, Chairman of Cameo Media Support’s Supervisory Board, Director of the Dutch Council for Journalism, Chairman of the Broadcast Business Club, member of the Management Board of the Dutch Institute for Classification of Audiovisual Media, Treasurer of World Press Photo, Director of the Media Academy, member of the Advisory Board to Entertainment Studies College in Holland, Director of the World Press Photo Gala and Director of IP Netherlands.

Mr. Van Westerloo is the former Managing Director of SBS Broadcasting BV, former Programme Director of RTL 5 and former Chief Editor of AT5.

Number of shares in Binck N.V.: 0

Kees Scholtes (1945), Chairman

Mr. Scholtes was appointed as a Member of Effectenbank Binck NV’s Supervisory Board and was re-appointed for a three-year term during the General Assembly of Shareholders of 6 May 2004 as the Chairman of Binck NV’s Supervisory Board. Nationality: Dutch.

Mr. Scholtes is currently the Project Director for the estab-lishment of Foundation Financial Services, a Member of IBUS Company NV’s Supervisory Board, Director of financ-ing company Colonade BV, Director of STAK Effectenbank Binck and Chairman of the investment commission of Kunst- and Cultuur Pensioen- en Levensverzekerings-maatschappij (the Art and Culture Pension and Life Insurance Company). Mr. Scholtes is a former Director of Postbank NV, NMB Postbank NV and ING Bank NV, Member of ING Asset Management’s Executive Committee and Member of the Supervisory Board of various investment funds of Postbank NV, NMB Postbank NV and ING Bank NV. Additionally, Mr. Scholtes is the former interim Director of Real Time Company NV, former Member of the Supervisory Boards of Parcom NV, Barings Private Equity Holding, Necigef and NIEC CDC Labouchere Securities Services (cur-rently Dexia Securities Services) and former Member of the Executive Board of the Amsterdam Stock Exchange and European Options Exchange (the predecessor of Euronext). Mr. Scholtes also held the position of Project Director for the establishment of the Dutch Securities Institute. Number of shares in Binck N.V.: 0

Charles Langereis (1948)

Prof. Langereis (Master of Law) was appointed as a Member of AOT NV’s Supervisory Board and was re-appointed for a three-year term in 2002.

Nationality: Dutch. Mr. Langereis is a Partner in Spigthoff Solicitors and Tax Consultants in Amsterdam, part time Tax Law professor at Leiden University, Chairman of the Dutch Association of Solicitors/Tax Experts and vice-coun-sellor of the Court of Law in The Hague. Additionally, Mr. Langereis is a Member of Koopman International BV’s Supervisory Board and a Member of the Advisory Council to Lombard Odier Darier Hentsch EMS Plus Interest Fund. Number of shares in Binck NV: 678,581

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months for Binck and three months for directors. The double period of notice for Binck derives from the labour legislation. A six-month period of notice is generally not regarded as excessive.

Redundancy arrangements

The maximum compensation due for the forced (pre-mature) resignation of a director, other than for urgent reasons as described in Article 7:677 of the Civil Code is equal to one year’s fixed salary. As a basic principle, no compensation is due in cases of improper administration or fraud. Any director who is dismissed ‘clearly unreasonably’ during his first tenure of office will in principle be considered for compensation amounting to no more than two years’ fixed salary. Here we might think, for example, of a director who was an ‘ordinary’ employee (for some considerable time) before his appointment to the board and who, because of his appointment, would forfeit his claims to compensation for dis-missal which he had accumulated under labour leg-islation. So this is in accordance with Best Practice Art. II.2.7 of the Code. A previously agreed resigna-tion arrangement under current legislaresigna-tion does not prevent court deviating therefrom. The court will in particular consider all the circumstances of the case when determining whether to award compensation for dismissal.

Elements of remuneration

General

The pay awarded to Binck’s directors consists of a fixed salary, i.e.: a competitive, fixed base salary (to be paid in arrears) and a flexible element that serves as an incentive for short and medium/long-term per-formance, consisting of a bonus and an equity award. The fixed salary is an adequate reward for the efforts and responsibilities of directors and the gravi-ty of the position. The variable element is designed to reward directors for exceptional performance and to strengthen the bonds between directors and Binck and the latter’s objectives. Other periodical pay

elements, such as a pension arrangement and health insurance, do in principle not constitute part of the pay package. The same goes for fringe benefits, such as the provision of a company car etc. Nor is there any provision for early retirement of directors.

When determining the composition of the remuner-ation package for the directors of Binck and the per-formance criteria to be set in that respect, account can be taken of the nature and duration of the work-ing relationship of the directors individually. With regard to current directors, this means that the emphasis with the CEO, André Teeuw, is on short-term pay elements, while for the other two Board members, Thierry Schaap (CFO) and Kalo Bagijn (CCO), the emphasis is on medium/long-term objec-tives and pay elements. With this a relationship of the directors is fostered, tailored to the specifically applicable situation, whereby a certain premium in store for those directors who have chosen to work for the company for a longer period of time.

Fixed pay

The fixed pay of directors is set at a level which is in line with the size of the company and the responsi-bilities that go with running a stock exchange listed company. The fixed pay is an adequate reward for the efforts and responsibilities of the directors and the gravity of the position. When determining the fixed pay, it was decided to set the level for the other members of the Board at about two-thirds of the base salary of the CEO.

It is perfectly reasonable to consider members of the Board for a pension provision on the basis of a scheme applicable to - the majority of - the other employees of the company. In accordance with this basic principle, Thierry Schaap and Kalo Bagijn will join this pension scheme with effect from 2005. Given the fact that the contract for the present CEO, André Teeuw, has been concluded for a limited peri-od of time, he will not join the pension scheme.

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Flexible pay

General

A flexible pay element constitutes an important incentive for both the creation and growth of share-holders’ value in the short and medium/long term. For this reason a considerable part of the total pay package consists of performance-related flexible pay.

As a basic principle for the flexible pay, the perform-ance of the members of the Board, achieving annual budgets approved by the Supervisory Board, results over a period of two years in an annual flexible pay equal to one year’s fixed salary. With regard to the remuneration package of the current CEO, it should be noted that this proportioning does not necessari-ly have to be applied. Reason for this is the duration and nature of his engagement with the company.

Given the specific nature of the company, perform-ance criteria are not based on external factors relat-ing to a so-called ‘peer group’, but which are instead based on profitability targets. This will be translated into growth of earnings per share, which should be in the range of 15 to 25% in the period 2005 up to and including 2007. 2004 will be taken as the base year, with an eps, adjusted for exceptional factors, of € 0.15.

Short-term objective and pay

The short-term objective for granting a bonus con-sists of achieving the set annual budget with regard to profit after tax, translated to earnings per share (eps). The Supervisory Board may, if the results give reason, on a discretionary basis decide in this respect to increase the bonus up to a maximum 25%. If the target is not entirely achieved - for example, as the result of external circumstances over which the directors have no control - the Supervisory Board may, at its discretion, grant a cash bonus to the directors up to a maximum of 25% of the gross annual salary.

Medium/long-term objective and pay

Members of the Board who are expected to be engaged with the company for a longer period of time may opt to be paid part of their cash bonus in shares (‘bonus shares’). These shares must be held for a period of three years. In addition, shares may be awarded to directors without financial quid pro quo (‘award shares’), depending on the achievement of longer term targets. For the period 2005 up to and including 2007 and each subsequent period of three years after 2005, one award share will be allocated for every two Binck shares held if there is a rise of at least 50% in earnings per share; if there is a rise of at least 100% in eps, one award share will be allocated for every Binck share held. Given the stage of devel-opment the company currently finds itself in, such objective could be seen as ambitious and challenging.

For Thierry Schaap and Kalo Bagijn, at least 25% and no more than 100% of their cash bonus can be paid in the form of bonus shares. The number of shares obtained in this way is based on the closing price on the day they are allocated. The company will pay the income tax due on that part of the bonus paid in shares. If some or all of these shares are meanwhile sold - i.e., within three years - the income tax paid by the company must be reimbursed by the director concerned. Award shares must be held for a period of five years or to the end of the director’s engage-ment with the company if earlier, which is in line with best practice rule II.2.3 of the Code.

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The Audit Committee

The Supervisory Board has appointed an Audit Committee from among its members. This commit-tee consists of Messrs. Brouwer (Chairman), Langereis and Scholtes.

The activities of the committee include supervision of the implementation and functioning of the set of internal auditing and risk-control measures, the fol-low up of recommendations made by the external auditors and the performance of the internal audit department.

Overseeing the provision of financial information by the company is performed by the Supervisory Board.

The committee met three times during 2004. All meetings are attended by the financial director of BinckBank, Mr. Schoofs. The committee instituted regulations that were approved by the Supervisory Board at the meeting held on 20 October 2004.

During the meetings the committee discussed the organisation of the newly to be installed internal audit department, together with the schedule of work to be undertaken by this department in 2004. For Binck this covers first and foremost the setting up of a risk analysis. BinckBank, based on already existing analyses, performed internal audit checks. Furthermore, follow up of the recommendations, mentioned in the management letter prepared by external auditors in relation to the audit for 2003, was discussed. Finally, during one of the meetings, acquaintance was made with our auditing firm’s new partner. 25 annual r epor t 2004

Loans

Binck does not provide loans, bank guarantees, etc. to members of the Management Board.

Corporate Governance

The Code was established on 9 December 2003. The possible acquisition of shares in the capital of BinckBank was important in 2004 for the future direction of the company and partly decisive for the method advocated for applying the Code. No judge-ment could be made in advance to whether the General Assembly would approve the transaction planned at the time. This meant that a proposal on the substantive method of implementing the Code at the time of the 2004 AGM might have had a somewhat speculative character. For this reason it was decided to bring up the method of applying the Code first time at the AGM of 2005.

Based on recommendations by the management, we decided to integrate the Code largely from 2005 onwards and to explain in the 2004 annual report whether and how we will apply the Code. In this annual report we have dedicated an entire chapter to Corporate Governance. Integration of the Code will partly be done through a number of changes to the Articles of Association, which will be presented for approval at an extraordinary meeting of the General Assembly of Shareholders, planned later in 2005.

Committees

We have instituted an Audit Committee, but no remuneration committee and/or selection/nomina-tions committee. The best practice rules of the Code relating to the remuneration committee and/or selection/nominations committee therefore apply to the entire Supervisory Board.

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In conclusion

In conclusion, the Supervisory Board looks back on a year in which the integration of Binck and BinckBank was in all respects a great challenge for all those involved. The most important business objectives were achieved in spite of relatively unfavourable market conditions. Not in the least through the out-standing leadership of the directors and other execu-tives, the project was thus completed very success-fully. The company is well on track to rationalising its business activities, with due attention to cost con-trol, so that the performance of the company can be further improved.

The Supervisory Board requests the General Assembly of Shareholders to approve the annual accounts for 2004 and - as separate point on the agenda - to discharge members of the Supervisory Board and the Management Board from exercising their duties during the year 2004.

Finally we express our thanks to directors and all members of staff for their efforts and contributions in general and the realisation of a successful integra-tion of both companies in particular.

Amsterdam, 4 March 2005

The Supervisory Board

C.J.M. Scholtes, Chairman J.K. Brouwer

Ch.J. Langereis A.M. van Westerloo

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Large banks versus BinckBank

Our media campaign is aimed at creating awareness with Dutch private investors. Many investors still have the impression that the high rates charged by large banks are justified by the quality of their services. Our campaign focuses on our low rates. This is the principal motive for clients to switch to BinckBank. As a secondary pro-position, we advertise the high quality of our services as well as the fact that large banks cannot offer our level of service.

Once investors have switched to BinckBank, they are normally highly impressed with our extraordinary service level. This clearly distinguishes us from large banks. This is obviously proved by the fact that more than 50% of all new clients join BinckBank at the recommendation of existing clients. Our marketing efforts do not end with the advertising campaign. The customer service and helpdesk depart-ments form vital parts of our marketing strategy.