Report of the Supervisory Board The Supervisory Board performs supervision on the execution of Cosun’s policy. As an independent body, it advises the Board and the Members’ Council on request and otherwise.

The Supervisory Board met on seven occasions during the year, four in the presence of the Board, in accordance with a set schedule. It discussed many matters. An important subject in 2016 was governance of the cooperative. The Supervisory Board consulted external advisers on this subject and discussed it with both the Board and the Members’ Council. The Supervisory Board also devoted a great deal of time and attention to the development of the non-sugar activities. It followed and discussed the entire financial cycle, from the operating plans via the quarterly reports to the December forecasts, the annual accounts and the annual report.

An important theme in the cooperative was the replacement of the beet delivery/business termination regulations with new future-proof agreements and the associated amendment of the Articles of Association and regulations. The operating plans for 2017-2019 were submitted to the Supervisory Board for assessment. The Supervisory Board agrees with the strategy of profitable organic growth. Suiker Unie is in the final phase of a substantial investment programme. Aviko is completing its restructuring and has started to expand and make better use of its production capacity. The goal of the other non-sugar activities is to become and remain leaders on cost control, with a focus on the added value of their product portfolios to ensure they achieve the required financial results. The Supervisory Board carefully studied and weighed the plans before granting its approval.

An advisory board was set up in 2016. It is made up of external professionals who will assess innovation within Cosun. The Supervisory Board thinks this is a very good initiative to manage our nursery for new ideas efficiently. Major investments and acquisitions will also be assessed after a certain period of time as to their results in comparison with the expectations. Such evaluations are valuable for all concerned in order to learn from past experiences and to perform at least as well in the future if not better.

Another important issue is reporting suspected cases of inappropriate conduct. The Supervisory Board is aware that Cosun takes such reports seriously and facilitates them at all business groups and locations. By doing so, it ensures the reporting threshold is low and anonymous if required.

FINANCIAL PERFORMANCE
Cosun showed the value of diversification in 2016. The expected dip in sugar results was offset to some extent at the end of the year by rising world market prices. The other business groups, especially Aviko, made a demonstrable contribution to the cooperative’s objective during the year: a stable beet price.

The Supervisory Board discussed and approved the introduction of a new style of audit report during the year, with the auditor providing more background information on the main audit findings and the way in which the auditor carries out its work. This is in keeping with the trend in society towards greater transparency and the provision of more relevant information to stakeholders.

The auditor has examined the annual accounts for 2016. The audit opinion and the auditor’s statement were explained by the auditor and discussed. The audit was completed smoothly thanks to the high quality of internal reporting. Analyses of the digital data produced valuable information for both financial and management purposes. Questions were answered satisfactorily and the findings gave the Supervisory Board a keen understanding of Cosun’s financial condition. The follow-up to the management letter was also discussed, and explanations were provided if the recommendations had not yet been acted upon. The Supervisory Board submits the annual report for 2016 and recommends that the Members’ Council approves it.

COMPOSITION AND PERFORMANCE
Wim Blijdorp and Johan van Driel were re-elected to the Supervisory Board during the Annual General Meeting. The vacancy created by Biense Visser’s retirement in 2016 was filled by Hans Huistra on 8 February 2017. The Supervisory Board reviewed its own performance by means of individual appraisal interviews with all its members. A constructive critical attitude helps safeguard the quality of decision-making and working relationships on the Supervisory Board. To retain a feeling for the activities carried on by Cosun, several working visits are made to the businesses every year. In 2016 we visited the Aviko facility in Amberger (Germany) together with the Board. These site visits are particularly valuable for the Supervisory Board to gain a proper understanding of the business, the management and what is happening. The annual excursion last year was to the growing region of the southwest Netherlands. The Supervisory Board also visited Nedato, another cooperative in the arable farming sector.

A WORD OF THANKS
The Supervisory Board would like to compliment the Board, the Executive Board and all members of staff for the financial results for the year and thank everyone who contributed to them. The past year was a taster of the fluctuations that may occur after the end of the common sugar market. 2016 also showed what the Cosun business groups can mean for Dutch beet growers. The Supervisory Board is looking to the future with confidence.

On behalf of the Supervisory Board,

J. Bartelds     
Chairman
W.A. Blijdorp
Secretary

Breda, 16 March 2017