KBC Ancora : Annual Report KBC Ancora 2020/2021

ANNUAL REPORT

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K B C A N CO R A B AC KG R O U N D

1998

KBC Ancora was incorporated on 18 December 1998 as Cera Ancora SA (Société anonyme). Cera Ancora's capital was formed by the contribution of 35,950,000 Almanij shares and approximately EUR 12.4 million in cash, subscribed virtually entirely by Cera (then'Cera Holding') Cera Ancora was thus an almost wholly owned subsidiary of Cera.

2001

The foundations were laid in 2000 for the fundamental restructuring of Cera Ancora and of Cera, with approval being granted on 12 and 13 January 2001, respectively. The restructuring was carried out in implementation of a settlement reached in conclusion of a legal dispute which went back to the merger in 1998 of CERA Bank, ABB and Kredietbank.

On the one hand, the restructuring of Cera Ancora led to the conversion of Cera Ancora NV to Almancora SCA, the splitting of the Almancora shares, so that the capital of the company was represented by 55,929,510 shares, and an increase (through contributions and purchase) of the participating interest in Almanij to 55,929,510 shares (28.56%). On the other hand, the restructuring of Cera gave Cera members the right to three Almancora shares for each cooperative D-share surrendered on withdrawal.

Almancora was listed on the stock exchange for the first time on 4 April 2001. From that date onwards it was possible to trade the shares on the 'double fixing' segment of the Brussels Stock Exchange.

2005

On 2 March 2005 the structure of the Almanij/KBC group was simplified by means of a merger in the form of the acquisition of Almanij by KBC Bank-insurance Holding.

The merger to form KBC Group had a number of important consequences for Almancora:

• As a result of the merger Almancora acquired KBC Group shares on 2 March 2005, based on an exchange ratio of 1.35 KBC Group shares for each Almanij share.
• Until the merger, the shareholder stability of the Almanij/KBC group was guaranteed by Cera, Almancora and the Other Permanent Shareholders via a shareholder agreement. Following the merger this was replaced by a new shareholder agreement, to which MRBB also became a party. The core shareholders of the KBC group were henceforth Cera, Almancora, MRBB and the Other Permanent Shareholders.
• The disappearance of Almanij also brought to an end the reserving of profit at Almanij level.

2007

On 15 June 2007 the company name Almancora was changed to KBC Ancora and the Almancora share was split by a factor of 1.4 (seven new KBC Ancora shares per five existing Almancora shares). The purpose of these two changes was to make the link between the KBC Ancora share and the KBC Group share even more explicit.

The split also means that since 15 June 2007, Cera members who withdraw with their D-shares have the right to receive 4.2 KBC Ancora shares in exchange for each D-share surrendered. This 'reimbursement on withdrawal' means that the proportion of Cera's participation in KBC Ancora to be distributed will decline steadily over time.

Since 15 June 2007, the KBC Ancora share has been listed on the continuous segment of the Euronext Brussels stock exchange.

On 8 August 2007, Cera and KBC Ancora reported that their joint participating interest in KBC Group had been increased to over 30%. Exceeding the 30% threshold was important in the context of the law on

public takeover bids which came into effect in Belgium on 1 September 2007. Under this law, participating interests of more than 30% which were in existence at the time the law came into force are exempt from any obligation to issue a bid, whereas after that date exceeding this threshold carried a mandatory requirement to issue a public bid.

2012

KBC Group increased its capital by EUR 1.25 billion in December 2012 through the issue of new shares. KBC Ancora supported this capital increase, but did not participate in it itself. Cera participated less than proportionately in

the capital increase. As a result of the increase, the joint participating interest of Cera and KBC Ancora fell below the 30% threshold. Cera and KBC Ancora did however contribute additional KBC Group shares which they already held to the shareholder agreement between Cera, KBC Ancora, MRBB and the Other Permanent Shareholders, so that this agreement continues to represent more than 30% of the total number of KBC Group shares.

2013

Since July 2013, KBC Ancora has a new lender for EUR 325 million of its debt, which had previously been provided by KBC Bank. KBC Ancora sold 4.7 million KBC Group shares in November 2013. The proceeds of this sale were used to repurchase a loan with a nominal amount of EUR 175 million, which had been provided to KBC Ancora by KBC Bank in 2007. Both transactions had a positive impact on the capital position of KBC Bank.

2014

On 1 December 2014 Cera and KBC Ancora, together with MRBB and the Other Permanent Shareholders, extended their collaboration as a syndicate in updated form with respect to KBC Group for a further term of ten years, thereby ensuring the continued shareholder stability and supporting the further development of the KBC group. Cera, KBC Ancora, MRBB and the Other Permanent Shareholders contributed all their shares to the shareholder agreement, together representing 40% of the total number of KBC Group shares in issue.

2019

End of August 2019, KBC Ancora, has decided to make a limited adjustment to the dividend policy. This adjustment means that, with effect from the current financial year, 90% of the distributable recurring result for the financial year will be paid out as dividend. Compared to the previous dividend policy, this means a reduction of 10%. As KBC Ancora is holding more cash within the business as a result, this will enable the outstanding financial liabilities to be reduced more quickly. That makes KBC Ancora's balance sheet more resilient against shocks.

On 25 October 2019, an Extraordinary General Meeting decided to transform KBC Ancora from a partnership limited by shares (SCA) into a public limited company (SA) with sole (statutory) manager with effect from 1 January 2020. In doing so, use was made of the possibilities offered by the'renewed'SA to grant the sole manager the same rights in the articles of association as in an SCA, so that the change of legal form has no impact on the anchoring structure.

2020

The Extraordinary General Shareholders Meeting of KBC Ancora of 30 October 2020 has decided to introduce loyalty voting rights. This means that double voting rights are granted to each KBC Ancora share that, in accordance with Article 27 of the Articles of Association, has been registered in the register of registered shares in the name of the same shareholder for a period of at least two years without interruption. The other shares are entitled to one vote. Dematerialised shares do not benefit from double voting rights.

Annual Report 2020/2021

KBC Ancora

Legal form: Public limited liability company

Registered office: Muntstraat 1, 3000 Leuven, Belgium LEI 549300I4XZ0RR3ZOSZ55

Company number: 0464.965.639 www.kbcancora.be

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TABLE OF CONTENTS
Letter from the Chairman of the Board of Directors and the Managing Directors	6
Declaration by the responsible individuals	9
Investor information	10
Share price, discount and traded volumes	10
Key figures as at balance sheet date	13
Balance sheet and result	13
Cash flow table	14
Dividend	15
Distribution of KBC Ancora shares	16
KBC Ancora shareholder structure	16
The road to the market	16
Group structure	17
Almancora ASBL	17
Almancora Société de gestion SA.	18
KBC Ancora SA	18
Statutory director's report	19
Declaration in connection with risks	19
Declaration concerning effective corporate governance	19
Management structure	20
Board of Directors of Almancora Société de gestion SA	20
Composition of the Board of Directors	21
Powers of the Board of Directors	22
Functioning of the Board of Directors	23
Committees appointed within the Board of Directors	24
Day-to-Day Management Committee	24
Audit Committee	24
Appointments Committee	26
Remuneration Committee	26
Auditor	27
Main features of the evaluation process for the Board of Directors, its committees and
its individual members	27
Remuneration report for the financial year	28
Miscellaneous information	33
Internal control and risk management	34
Code of conduct in respect of conflicts of interest	35
Code of conduct to prevent market abuse	35
Annual notification pursuant to Article 74, §8 of the law of 1 April 2007 on public
takeover bids	35
Guidelines for the exercise of directorships	36
Openness in investor communication	36
Declaration concerning results and other information	37

Annual Report KBC Ancora 2020/2021