Ballast Nedam Administration Office

Report on 2006

In compliance with the provisions of Article 15 of the Terms of Administration of the Ballast Nedam Administration Office (Stichting Administratiekantoor van aandelen Ballast Nedam, hereafter: the Administration Office) dated 7 June 2005 and best practice provision IV.2.6 of the Dutch Corporate Governance Code (‘the Code’), we report as follows to the holders of depositary receipts.

During 2006, the Administration Office performed the customary activities for the administration of the shares referred to above.

The nominal value of registered shares held in administration amounted to € 54,716,310 as at 31 December 2006. In return for these shares, 9,119,385 bearer depositary receipts have been issued with the same nominal value.

The members of the Board of the Administration Office during the year were:
M. Ververs (Chairman) (up to 8 April 2006)
W.P.M. van der Schoot (Chairman) (as from 8 April 2006)
S.B. Braaksma
W. van Voorden (as from 10 May 2006)

Other functions of the current members of the Board are reported in a separate annex.

Each member of the Board is paid a fee of € 7,000 per year (excluding VAT). All members received this fee, in proportion to the length of their service on the Board.

The total costs of the activities of the Administration Office were € 50,733 (including the fees paid to the members of the Board). In accordance with the Terms of Administration of the Administration Office, these costs were borne by Ballast Nedam N.V.

The activities associated with the administration of the shares are performed by the administrator of the Administration Office, which is N.V. Algemeen Nederlands Trustkantoor ANT (P.O. Box 11063, 1001 GB Amsterdam).

In addition to administering the shares, the Board met the Board of Management to be briefed on the company’s performance and general progress. Three Board meetings were held in 2006; at the invitation of the Board of the Administration Office, the Board of Management of the company attended two of these meetings. In addition, a Meeting of Holders of Depositary Receipts was held prior to the General Meeting of Shareholders on 10 May 2006.

The first Board meeting took place on 14 March 2006. During this meeting the general business developments at Ballast Nedam N.V. were discussed, as well as the company’s financial statements for 2005, following their publication on 10 March 2006. The balance sheet and statement of income and expenditure for the financial year 2005 of the Administration Office were adopted and the composition of the Board of the Administration Office was discussed.

Mr Ververs resigned from the Board on 8 April 2006. Mr van der Schoot was appointed as the new chairman of the Administration Office from that date.

The second Board meeting took place on 10 May 2006, in preparation for the General Meeting of Shareholders and the Meeting of Holders of Depositary Receipts for Shares on the same date.

As indicated above, a Meeting of Holders of Depositary Receipts was held, for the second time, on 10 May 2006, prior to the General Meeting of Shareholders. The substantive agenda items were as follows:
I.  Announcement of a vacancy arising in 2006 on the Board of the Administration Office.
II. Announcement of the proposed votes of the Board of the Administration Office at the Annual General Meeting of Shareholders of Ballast Nedam N.V.

In connection with a vacancy on the Board of the Administration Office, the Board had allowed holders of depositary receipts ample opportunity to recommend persons for appointment to the Board in the period prior to the Meeting of Holders of Depositary Receipts. The holders of depositary receipts did not avail themselves of that opportunity. The Board therefore decided to appoint Mr Van Voorden to the Board of the Administration Office for a four-year period commencing on 10 May 2006.

A representative of the Dutch Investors’ Association (Vereniging van Effectenbezitters) asked a number of questions concerning the appointment of Mr Van Voorden to the Board of the Administration Office. There were no further comments with regard to this agenda item. The Meeting of Holders of Depositary Receipts was also informed that Mr Braaksma, following his resignation by rotation, had been reappointed to the Board for a four-year term as from 8 April 2006. It was also announced that Mr van der Schoot will resign from the Board by rotation on 2 April 2007 and is available for reappointment. The Board intends to reappoint Mr van der Schoot.

After the Board had explained its proposed voting behaviour at the Annual General Meeting of Shareholders of Ballast Nedam N.V., the Meeting of Holders of Depositary Receipts had no further questions on this agenda item.

The Board of the Administration Office took part in the discussion of matters raised at the General Meeting of Shareholders on 10 May 2006 and the Extraordinary Meeting of Shareholders on 26 October 2006. During these Meetings the Board posed a number of critical questions. On behalf of the Administration Office, the Board cast its vote on the relevant agenda items and, in accordance with its statutory objectives, based its voting behaviour primarily on the interests of holders of depositary receipts for shares, bearing in mind the interests of the company and its affiliated entities. After careful consideration, the Board decided to support all proposals at both Meetings.

At the General Meeting of Shareholders on 10 May 2006, the Board of the Administration Office granted proxies for 2,371,559 depositary receipts for shares (24.01% of the issued share capital). The Board represented 67.35% of the issued share capital at this meeting.

At the Extraordinary General Meeting of Shareholders on 26 October 2006, the Board of the Administration Office granted proxies for 2,253,669 depositary receipts for shares (22.71% of the issued share capital). The Board represented 68.80% of the issued share capital at this meeting.

The third Board meeting was held on 7 September 2006. During this meeting the half-year results for 2006 of the company were discussed.

The number of registered shares in the capital of Ballast Nedam N.V. held by the Administration Office increased in 2006 from 8,995,056 to 9,119,385, partly because holders of depositary receipts issued by the Ballast Nedam Employee Participation Foundation (Stichting Werknemersparticipatie Ballast Nedam) exchanged their depositary receipts for depositary receipts that can be traded on the stock exchange. The increase was also due to the fact that Ballast Nedam N.V. exchanged a package of depositary receipts issued by the Ballast Nedam Employee Participation Foundation for listed depositary receipts, in connection with the expiry of the 2001 option scheme for staff and management.

Although the depositary receipts issued by the Administration Office may be exchanged without restriction and the provisions in Annex X of the Listing and Issuing Rules of Euronext Amsterdam with respect to the conversion of shares into depositary receipts and the independence of management are, therefore, not applicable to the Administration Office, the Board is composed in such a way that it meets the requirements for independence as contained in Annex X of the Listing and Issuing Rules of Euronext Amsterdam.

The offices of the Administration Office are at the address of the company.

As noted above, Mr Ververs stepped down from the Board in 2006, after chairing the Administration Office for 12 years, since the flotation of Ballast Nedam N.V. in 1994. The Board would like to express its gratitude for his contribution to the Administration Office and, consequently, to the company. Mr Ververs has seen Ballast Nedam pass through a complete cycle in the past 12 years, from prosperous years in the mid-1990s to a number of very difficult years between 2001 and 2005. Mr Ververs led the Administration Office and responded to the management of the company with great wisdom.

Nieuwegein, 20 March 2007
The Board

Annex to the report