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Annual report of theN.V. Nederlandsche
Apparatenfabriek“Nedap”on its
financial year 2013
Verslag van deN.V. Nederlandsche
Apparatenfabriek“Nedap”over het
boekjaar 2013
3 eightyfourth
Contents
06 Report of the Supervisory Board 10 ProfileoftheSupervisoryBoard
10 DetailsoftheSupervisoryBoard
12 Report of the Board of Management
30 Financial statements
68 Statement pursuant to Section 5:25c(2c) of the Financial Supervision Act
70 Other information 70 Independentauditor’sreport
72 ProvisionsoftheArticlesofAssociationconcerningtheappropriationofprofit
73 Appropriationofprofit
73 Branches
74 Miscellaneous 74 Five-yearsummary
76 Companiesandmanagement
78 Corporate Governance 95 Informationonthecompanystructureandcontrolpursuantto
theDecreeonsection10oftheTakeoverDirective
99 ProvisionsoftheArticlesofAssociationconcerningSpecialRights
100 ProvisionsoftheArticlesofAssociationconcerningApprovalofResolutions
bytheBoardofManagementinaccordancewithArticle20
4
Report of the Supervisory
Board
To the shareholders
WehavepleasureinpresentingyouwiththeReport
oftheSupervisoryBoardfortheyear2013-ayear
whentherewasapauseinthegrowthinrevenue
seeninrecentyears.Althoughsomemarketgroups
enjoyedgoodgrowthin2013,revenuefellmore
thanexpectedatothers.Despitefiercecompetition,
mostmarketgroupshavesubstantialopportunities
forgrowthandsoitisessentialthatweinvestin
strongpropositionsandthefurtherprofessionalism
oftheorganisationinordertobenefitfromthem.
Thisvitalinvestmentdid,however,depressprofits
in2013.
Financial statements
Thefinancialstatementshavebeenaudited
byKPMGAccountantsN.V.,whoseunqualified
IndependentAuditor’sReportisincludedinthe
Otherinformation.Atourrequest,theauditorhas
issuedamoreextensivereportthisyear,tailored
specificallytoNedap.
Asinpreviousyears,thefinalauditmeeting
betweenKPMGAccountantsN.V.andtheBoardof
Managementwasalsoattendedbyadelegationof
theSupervisoryBoard.TheIndependentAuditor’s
Reportandthe2013AnnualReportasdrawnup
bytheBoardofManagement,consistingofthe
ReportoftheBoardofManagement,theFinancial
Statements,theOtherinformation,Miscellaneous
andCorporateGovernance,werediscussedby
thefullSupervisoryBoardwiththeBoardof
Managementandtheauditor.Asshownbyits
comprehensivereport,theauditordidnothaveany
materialcomments.
Wereceivedtenregularfinancialreportsfrom
theBoardofManagementduringtheyear,which
wediscussedatlengthduringourmeetings.
Wealsoreceivedalotofinformationabout
thestateofthemarketgroups’businessfrom
presentationsgivenbymarketgroupleadersand
sitevisits.Onthisbasis,weareconfidentthat
thereportfor2013providesasoundbasisfor
meetingouraccountabilityobligationsinrespect
ofoursupervisionoftheactionsoftheBoardof
Management.Wethereforerecommendthatyou
adoptthe2013FinancialStatementsaspresented.
Dividend
In2013,Nedap’srevenueincreasedfrom€171.9
millionto€173.7millionandtheprofitaftertaxes
cameto€9.8million(2012:€13.5million).This
resultedinearningspershareof€1.46compared
to€2.01for2012.
Nedap’sdividendpolicyisguidedbystrategyand
long-termpolicyandistopayouttheentireprofit
toshareholderslessanyadditionstoreserves
thataredeemednecessaryforthecontinuityof
Nedap’sorganicgrowthandtomaintainsolvency
of45%inthemediumterm.Theaimistomaintain
asconsistentalineindividendsaspossible
and,inthecircumstances,afairdividendforthe
shareholders.
Expressedasapercentageoftotalassets,with
equitydeterminedexcludingthedividendpayable,
thesolvencyratiofellfrom38.9%to36.6%
in2013.IgnoringtheeffectsofInternational
AccountingStandard19,thesolvencyratiowould
haverisenfrom39.2%to41.0%.Byprohibiting
thecorridormethodforpensions,IAS19willlead
togreatervolatilityinequityfrom2013.Asthe
applicationofIAS19doesnotaffectcashflows,
thisIFRSobligationisignoredwhencalculating
solvency.TheBoardofManagementexpectsto
achievethedesiredlevelofasolvencyratioof
45%inthemediumterm.
Withthisinmind,inaccordancewithArticle45
(1)ofthearticlesofassociation,theBoardof
ManagementandtheSupervisoryBoardhave
decidedthat€2.4millionshouldbeaddedto
thereserves,leaving€7.4millionavailableasa
dividend.Thedividendpershareistherefore
5
€1.10(2012:€1.51).Althoughsolvencyhasnot
yetreachedthedesiredlevel,inouropinionan
unchangedpayoutratioof75%oftheprofittothe
shareholdersisappropriate.
Meetings and activities
Duringtheyear,theSupervisoryBoardmetsix
times.Allofthemeetingswereattendedbythe
entireSupervisoryBoard.
Onemeetingwasdevotedalmostentirelyto
progressonthecompany’sstrategyingeneraland
thatofcertainmarketgroupsinparticular.Nedap’s
operationalandfinancialtargetswerediscussedin
thiscontext.Themarketgroupleadersexplained
theirstrategiesatlength.Thishelpedtoprovide
uswithgoodinsightintothedifferentmarkets,
thecompetitivepositionofthevariousmarket
groups,thedevelopmentoftheorganisation,the
strategicobjectivesandtherelatedconditions
andopportunitiesandthreatsofindividualmarket
groupsandofNedapasawhole.
Riskmanagementisanimportantpartofgood
managementandessentialtosecuringNedap’s
continuityandsothevariousriskswerediscussed
indetailbytheSupervisoryBoardandwiththe
BoardofManagement.Therearesomesignificant
areasforattentionrelatingspecificallytoNedap:
- OneofthebiggestriskfactorsforNedap
istheabilitytoattractandretaintheright
staff.Nedap’scompetitivestrengthislargely
determinedbythetalent,commitmentand
personalentrepreneurshipofitsemployees.
Accordingly,alotofattentionisdevotedto
therecruitmentofnewtalent,thefurther
developmentoftheexistingtalentwithinthe
organisationandthebetterutilisationoftalent
withinNedap.PeopleExcellence,partofthe
long-termRoadtoExcellenceprogramme,
deliveredclearresultsduringthepastyear.
PeopleExcellencewillcontinuetorequirethe
organisation’sattentionin2014.
- Technicalriskshavealsoincreased.New
productsarebeinglaunchedfasterandona
larger,sometimesglobal,scale.Ifthereisa
problemwithaproduct,theconsequencesare
greaterthaninthepast.
- Internationalcustomersareincreasinglyasking
Nedaptotakefinalresponsibilityforrolling
outoverallprojects.Asaresult,legaland
operationalrisksarealsoincreasing.
- Itisdifficulttomakeaccuratesalesforecasts
forlarge-scaleprojectsandwhennewproducts
arelaunchedonthemarketandso,onoccasion,
thestockofcomponentsissometimestoo
largeandsometimestoosmall.Theapproach
tothisisbeingtightenedfurtheraspartof
DevelopmentExcellence,SupportExcellence
andOperationalExcellence,sothattheserisks
arebeingincreasinglywellmanaged.
TheBoardofManagementmadechangesinvarious
managerialpositions,whicharenowheldbypeople
whoareabletobringaboutmajordevelopmentof
themarketgroups.Furthermore,greaterattention
willbegivenduringthecurrentfinancialyearto
fillingexistingandfuturevacanciesinkeypositions
atNedapthroughbothinternaltrainingand
externalrecruitment.
Duringtheyear,theSupervisoryBoardaddressed
recurringsubjectssuchasthebudgetandperiodic
financialreportsinwhichactualperformance
iscomparedwiththebudget.Thedesignand
effectivenessoftheinternalriskmanagement
systemwerediscussedwiththeBoardof
Managementandtheauditor.Nomajorchanges
areanticipatedinthisrespect.Partlyinviewofthe
company’slimitedsize,wehavedecidedtogether
withtheBoardofManagementthatNedapdoesnot
needaninternalauditor.
Nedapisinclosecontactwithitsgroupcompanies
intheNetherlandsandabroad.Almostallofthem
aremanagedfromthemarketgroupsinGroenlo
6
Report of the Supervisory Board
andtheyareoftenledbycurrentorformer
employeesofNedapN.V.
GroupControllinginGroenlomonitorstheirrisks.
AlmostallgroupcompaniesusethesameICT
infrastructureasNedapN.V.
Onceagainin2013,wecloselymonitored
economicdevelopmentsandtheirpossible
consequencesforNedapinordertotakeprompt
action.
Asinpreviousyears,theSupervisoryBoard,
togetherwiththeBoardofManagement,evaluated
theauditfirmandtheauditoraswellasthe
co-operationwiththem.TheSupervisoryBoard
believesthattheauditorprovideditwithall
relevantinformationtocarryoutitssupervisory
duties.Theauditorfoundnoirregularitiesin
thereporting.TheSupervisoryBoardissatisfied
thattheauditorisindependentandthatthis
independenceisnotatrisk.Theauditorperforms
noworkforthecompanyotherthantheannual
audit.
On1July2013,MrE.J.L.vanLeeuwentookoverthe
NedapauditfromMrG.J.MvanHengstum.Aspart
ofthemandatoryauditorrotation,theSupervisory
BoardandtheBoardofManagementwillexplore
theoptionsforengaginganotherauditfirm.KPMG
AccountantscaninprincipleremainasNedap’s
auditoruntilthefinancialyear2016.
OneoftheSupervisoryBoard’smeetingswasheld
attheparticipatinginterestNedapFranceS.A.S.
inParis.Thedirectorofthissalesofficeprovided
insightintorelevantdevelopmentsinthemarket
segmentsthatareimportanttoNedapFrance.
WediscussedandapprovedNedap’scorporate
socialresponsibilitypolicy,forwhichtheBoardof
Managementhasfinalresponsibility.Sustainable
businesspracticesareamajorpriorityforNedap
andareembeddedinourwayofworkingasa
matterofcourse.AlmostallofNedap’sproducts
andservicesofferasolutiontoasociallyrelevant
problem.ItwouldbeinappropriateforNedapto
linkspecificquantitativeobjectivestothisasit
wouldleadmainlytoclericalwork.
Weheldmeetings,someofwhichwerenot
attendedbytheBoardofManagement,todiscuss
ourownperformanceandthatoftheBoardof
Management,bothcollectivelyandindividually,
andthevariableremunerationtobeawardedto
theBoardofManagement.Thesediscussionswere
conductedinanopenandcriticalmanner.The
workingrelationshipbetweentheSupervisory
BoardandtheBoardofManagementisagoodone.
OurconclusionisthattheSupervisoryBoardand
theBoardofManagementhaveperformedwell
individuallyandcollectively.
Inadditiontothescheduledmeetings,weheldtwo
conferencecallsonfillingthevacancythataroseon
MsBahlmann’sresignationasasupervisorydirector
andontheNedapAdditionalParticipationPlan
(NAPP).
Outsideofthemeetings,individualmembersof
theSupervisoryBoardallmadevariousvisitsto
Nedap,partlyinconnectionwiththeirspecificareas
ofresponsibility.Thisfitsinwiththeproactive
approachfavouredbytheSupervisoryBoardandits
individualmembers.
Thefindingsarereportedbacktothefull
SupervisoryBoard.Discussionswithemployeesof
Nedapanditssubsidiaries,includingmarketgroup
leaders,directorsofsubsidiariesandtheWorks
Councilareimportantforusasawaytodeepenour
connectionwithandinsightintodevelopmentsat
Nedap.Nonethelessthegoodinsightswegained
inthatwaywehavedecidedtofurtherintensify
informalcontactsbetweentheSupervisoryBoard
andthemarketgroupleadersandcontrollersto
discussnotjustfinancialperformancebutalso
7
markettrendsandopportunities,thecompetitive
position,staffingissues,themedium-termvision,
risksandactionpoints.
Inthepastyear,itbecameclearfromthemannerin
whichtheSupervisoryBoardperformeditsduties
thattheSupervisoryBoardasawholeandits
individualmemberswereabletodevotesufficient
timeandattentiontothecompany’saffairs.There
isagooddistributionofareasofresponsibilityand
wecomplementeachothersufficientlyinourrole
ofadvisingthecompany.
PartlygivenNedap’slimitedsize,theSupervisory
Boardcontinuestotaketheviewthatthecreation
offormalcommitteeswithintheBoardisneither
necessarynordesirable,particularlynowthat
theSupervisoryBoardhasadoptedaproactive
approachbasedonspecialkeyareas.Thefull
SupervisoryBoardisthereforedesignatedto
performthedutiesoftheAudit,Remuneration,
andSelectionandAppointmentCommittees.Any
decisionsaremadejointlybythefullSupervisory
Board.
ThechairmanoftheSupervisoryBoardandthe
managingdirectorareinregularcontacttodiscuss
thecompany’sperformanceandanyissuesthat
requirespecialattention.Thebilateralcontacts
oftheSupervisoryBoardwithshareholderswere
alsodiscussed.TheBoardofManagementandthe
SupervisoryBoardarecommittedtomaintaining
goodrelationswiththecompany’sshareholders.
Boththecompanyandshareholderscantakethe
initiativetogetintocontactwiththeother.Theaim
ofthesediscussionsistoprovideamorecomplete
pictureofdevelopmentswithinNedap.Thesetalks
arealwaysbasedoninformationthathasalready
beenpublished.Duringthetalkswithshareholders,
thecompanyisrepresentedbyamemberofthe
ManagementBoard.
Membership of the Supervisory Board
AttheGeneralMeetingofShareholderson16
April2013,wewerecompelledtobidfarewell
toourvice-chairman,DrJ.P.Bahlmann.Much
hashappenedinthesixteenyearssinceher
appointmenton29May1997andMsBahlmann
hasbeenanextremelycommittedsupervisory
director.Duringhertermofoffice,therelationship
betweenthesupervisorydirectors,theBoard
ofManagementandthebusinesshasmoved
significantlytowardsmoreopennessand
transparency.Managementchangesdemanded
greateffortbytheSupervisoryBoardand,in
particular,itschairmanandvice-chairman.Ms
Bahlmannkeptcloselyintouchinaconstructive
waywiththecompany’scultureandstrategyand
this,alongwithherinvolvement,wideknowledge
andexperience,meantalottotheSupervisory
Board.Shewasanexcellentsupervisorydirector
anditwasagreatpleasureworkingwithher.We
wishtothankherforherworkandeverythingshe
hasdonefortheSupervisoryBoardandNedap.
TheSupervisoryBoardandtheBoardof
Managementmetseveraltimes,bothforscheduled
andunscheduledmeetings,todiscussthe
successionofMsBahlmann.TheSupervisoryBoard
alsodiscusseditscompositionwhentheBoardof
Managementwasnotpresent.
OnthenominationoftheSupervisoryBoard,the
GeneralMeetingofShareholdersappointed
DrJ.M.L.vanEngelenasamemberofthe
SupervisoryBoardonaccountofhisbroad
managementexperience,wide-rangingexpertise
inindustrialproductdevelopment,marketing
andproductstrategy,financialexpertiseandhis
extendednetworkatinstitutesofknowledge.We
areverypleasedtowelcomehimasamemberof
theSupervisoryBoard.
8
Report of the Supervisory Board
Atthesameshareholders’meeting,MrM.C.
Westermannwasreappointedonournomination
asamemberoftheSupervisoryBoard.Mr
Westermannhaswidemanagementexperience,
anenterprisingspirit,commercialfocus,broad
expertiseinICTandafeelingforinnovation.
TheSupervisoryBoardbelievesithasagood
balanceofskills,relevantknowledgeand
experienceandcanfulfilitsstatutorydutyto
superviseandadvisetheBoardofManagement
inaneffectivemanner.Allmembersofthe
SupervisoryBoardmeettherequirementsofthe
CorporateGovernanceCodewithrespecttotheir
independence(bestpracticeprovisionIII.2.1)and
expertise.
Remuneration
BoardofManagement
Thedetailsoftheremunerationpolicyforthe
BoardofManagementaredescribedinthe
CorporateGovernancesectionofthisreport.The
compositionoftheremunerationisstatedinthe
financialstatementsunder‘BoardofManagement’s
remuneration’.
Atthebeginningofthereportingperiod,the
SupervisoryBoardheldameetingwithonly
theremunerationpolicyandremunerationof
themembersoftheBoardofManagementand
SupervisoryBoardontheagenda.Itwasalso
attendedbyanindependentadvisorengagedby
theSupervisoryBoardwhowasfirstinvolvedwith
theremunerationoftheBoardofManagement
andsupervisorydirectorsin2009.Atthat
time,theremunerationlevelwassetbelowthe
medianofajointlydefinedbenchmark.Itwas
agreedthatthepolicywouldbeevaluatedafter
afewyearsandsoweengagedtheadvisorto
againpresentabenchmarkfortheBoardof
Management’sremuneration.Thebenchmark
involvedacomparisonwithapeergroupofsimilar
companies,anumberofcompaniesofsimilar
sizeintheAEXsmall-capindexandtheadvisor’s
owndata.Theadvisor’sreportconfirmedthatthe
BoardofManagement’sremuneration,especially
thelong-termvariableremuneration,wasstillwell
belowthemedian.Afterseriousdebateandusing
theresultsofthesurvey,theSupervisoryBoard
drewuptheproposalsubmittedtotheGeneral
MeetingofShareholderson16April2013.The
proposalwastochangethevariableincomeofthe
BoardofManagementbyincreasingthepayoutfor
performanceattargetfrom30%to60%andthe
relatedmaximumof50%offixedannualincome
to90%andtoendtheexisting20%structural
differencebetweentheincomeoftheCFOandthat
oftheCEO.
ThesechangesareconsistentwithNedap’s
uniquecharacterandreflectdevelopmentsat
othercompaniesandinsocietymorebroadly.
TheGeneralMeetingofShareholderson16April
2013agreedtotheproposedchangesinthe
remunerationpolicy,bringingtheremunerationof
theBoardofManagementintolinewiththemarket
Thetargetsforthevariablepartofthe
remunerationofthemembersoftheBoardof
Managementweredeterminedinthereporting
period.Atleast50%ofthevariableremuneration
oftheBoardofManagementhasalong-termnature
asitsmembershavetoinvest50%oftheirvariable
remunerationintheNedapemployeeparticipation
plan,i.e.indepositaryreceiptswhichhavea
lock-upperiodoffouryears.Sincetheemployee
participationplanwassetup,bothmembersofthe
BoardofManagementhaveinvestedalloftheir
variableremunerationintheplan.
Aspartofthecurrentremunerationpolicy,the
SupervisoryBoardsetthefixedannualincome
oftheCEOat€355,600andthatoftheCFOat
€271,500from1January2013.Whensetting
theoverallremuneration,theSupervisoryBoard
analysedvariousscenariosandtookintoaccount
9
suchfactorsasthedevelopmentofrevenueand
profits,theadvancementofNedap’sinterestsinthe
mediumandlongtermandtheneedtoensurea
balancedremunerationstructurewithinNedap.
Supervisory directors
TheremunerationoftheSupervisoryDirectors
issetoutinthefinancialstatementsunder
‘SupervisoryBoard’sremuneration’.Inview
ofdevelopmentsinthemarketandsociety,
includingtheheavierresponsibilitiesandduties
ofsupervisorydirectors,aproposalwasputtothe
GeneralMeetingofShareholderson16April2013
tosettheannualremunerationofthesupervisory
directorsasfollows:
Chairman:€40,000;
Othersupervisorydirectors:€30,000.
Thisproposalwasdrawnupwiththeassistanceof
anexternaladvisor.Theremunerationwasadopted
bytheshareholdersasproposed.
Finally,wewouldliketoexpressourappreciation
totheBoardofManagementandemployeesfor
theirinvolvementandeffortsinthepastyear.
Thankstotheirhardworkandloyalty,Nedaphas
createdasoundbasisforbenefittingfromfuture.
Wewouldalsoliketothanktheshareholders
fortheirinterestinNedapandtheirtrustinthe
company.
Groenlo,11February2014
TheSupervisoryBoard:
G.F. Kolff, chairman
M.C. Westermann, vice-chairman
J.M.L. van Engelen
D.W.J. Theyse
10
Report of the Supervisory Board
Profile of the Supervisory Board
Nedapisamedium-sizedcompanywhoselong-
termpolicyaimstocreatesustainableaddedvalue
forcustomers,employeesandshareholdersthrough
organicgrowthinrevenueandprofits,withacentral
rolefordiversificationandinnovationbasedonthe
company’sexpertise.
TheSupervisoryBoardhastotakeaccountofthese
basicprincipleswhensupervisingtheBoardof
Management;itmustalsosupporttheBoardof
Managementwithadvice.
Tothisend,theSupervisoryBoardmusthavea
balancedmembershipcombiningmanagement
experienceandwide-rangingknowledgein
thefieldsoffinance,technologyandindustrial
marketingwithanaffinityandfeelingfor:
– entrepreneurship;
– hands-onmanagementinaflatorganisation
whichisbasedondistinctiveness;
– anorganisationinwhichsales,development
andproductionoperateasoneunit;
– workingmethodsthatfocusonresponsibility;
– acreativeprocessofinnovation;
– developmentsinsociety.
Ingeneral,theSupervisoryBoardshouldadopta
criticalattitudetowardstheBoardofManagement.
Itsmembersmustbeindependentofthecompany
andofeachotheranddisplaycomplementary
qualities.TheSupervisoryBoardaimsforamixed
membershipthatreflectsthesocietyinwhich
Nedapoperates.
TheBoardwillnotstructurallyhavemorethanfive
members.
Details of the Supervisory Board
At11February2013
G.F. Kolff (65), chairman, male
Widemanagementexperience,in-depthknowledge
oftechnology,financialexpertise,abilityto
translatetechnologyintosolutionsandmarket
opportunities,experiencewithandunderstanding
ofNedap’s‘addedvaluemodel’andsolid
communicationskills.
Nationality : Dutch
Profession/most
recentposition : CEO of Shtandart TT B.V.
Otherrelevantpositions : none
Initialappointment : 17 April 2012
Currenttermofoffice : 2012-2016
SupervisoryBoardmemberships: Paques Holding B.V. (chairman)
Smits Bouwgroep B.V. (SBB)
D.W.J. Theyse (45), female
Thoroughfinancialknowledge,management
experienceandup-to-dateandpracticalknowledge
andexperiencewithlistedcompaniesandthe
relatedregulatoryenvironment.
Nationality : Dutch
Profession/principalposition : F. van Lanschot Bankiers N.V.
Head of Corporate Banking
Property
Otherrelevantpositions : none
Initialappointment : 29 April 2010
Currenttermofoffice : 2010-2014
SupervisoryBoardmemberships: none
11
M.C. Westermann MBA (61), vice-chairman, male
Widemanagementexperience,enterprisingspirit,
commercialfocus,broadexpertiseinICT,feelingfor
innovation.
Nationality : Dutch
Profession/principalposition : Director of Motek B.V.
Otherrelevantpositions : none
Initialappointment : 12 May 2009
Currenttermofoffice : 2013-2017
SupervisoryBoardmemberships: Berenschot
Dr J.M.L. van Engelen (54), male
Widemanagementexperience,wide-ranging
expertiseinindustrialproductdevelopment,
marketingandproductstrategy,financialexpertise
andaboardnetworkatinstitutesofknowledge.
Nationality : Dutch
Profession/principalposition : Professor of Business &
Economics at the University of
Groningen
Otherrelevantpositions : Professor of Design Engineering
at the Faculty of Industrial
Design Engineering of the Delft
University of Technology
Member of the Advisory Board
of the Research School ICS
(Interuniversity Center for
Social Science Theory and
Methodology)
Initialappointment : 16 april 2013
Currenttermofoffice : 2013-2017
SupervisoryBoardmemberships: Unigarant N.V./UVM
Verzekeringsmaatschappij N.V.
Reis- en Rechtshulp N.V.
Drents Museum Assen
Member of the Board of
Supervisions of the Open
Universiteit in the Netherlands
Pensioenfonds Horeca en
Catering
12
Report of the Board of
Management
2013 in brief
Afterundergoingstronggrowthinthepreceding
years,revenuepausedforbreathin2013.In
viewoftheopportunitiesandchallengesthat
fundamentalshiftsinvariousmarketspresentto
us,wecontinuedtomakesubstantialinvestments
inpropositionsandtheorganisationalstructurein
theyearunderreview.Thisonceagainsignificantly
improvedourgrowthopportunitiesinthelonger
term,butunfortunatelyalsodampenedourprofits
fortheyear2013.
Nedap’srevenuefor2013workedoutat
€173.7million,1%higherthanin2012(€171.9
million).TheAVI,EnergySystems,Healthcareand
Retailmarketgroupsshowedmarkedgrowth.
IncomefromtheLightControlsandSecurity
Managementmarketgroupsremainedatvirtually
thesamelevelasin2012.TheLibrarySolutions
andLivestockManagementmarketgroupslost
groundcomparedtothepreviousyear.Thequality
ofincomeimprovedfurtherin2013.Theadded
value,expressedasapercentageofrevenue,rose
inthereportingperiodto68.4%(2012:67.8%).
Asaresultofthepolicytocontinueinvestingin
propositionsandtheorganisationalstructure,costs
rosefasterthantheaddedvalue,pushingprofits
downfrom€13.5million(2012)to€9.8million.
Earningspersharestoodat€1.46relativeto
€2.01for2012.TheapplicationofthenewIAS
19standard(EmployeeBenefits)causedyear-
endsolvencytodeclineto36.6%(2012:38.9%).
Withouttheapplicationofthisnewstandard,
however,year-endsolvencywas40.7%.Asthe
applicationofIAS19hasnoeffectoncashflows
andbecauseweexpectthatoursolvencytarget
of45%(withouttakingaccountofIAS19)canbe
achievedinthemediumterm,wearemaintaining
apay-outpercentageof75%.Thisleadstoa
dividendpershareof€1.10.Thedividendfor2012
amountedto€1.51.
Supervisory Board and Board of Management
AttheGeneralMeetingofShareholderson16April
2013,DrJ.P.Bahlmannretiredasamember(and
vice-Chairman)oftheSupervisoryBoard.After
servingonthecompany’sSupervisoryBoardfor
16years,MsBahlmannwasnolongeravailablefor
reappointment.InthisperiodMsBahlmannfocused
inparticularonthedevelopmentofNedap’s
corporateculture,whichisanessentialmainstay
underpinningourcompetitiveness.Withgreat
understandingandfeelingfortheorganisation,
sheinvariablymanagedtostriketherightbalance
betweenpreservingcorecomponentsofthis
cultureandcreatingroomfortheassimilationof
newinsightsonpersonaldevelopment,leadership
andgovernance.Wethereforeextendourheartfelt
thankstoMsBahlmannforherunstintingeffortsas
amemberandvice-ChairmanoftheSupervisory
Boardandforhervaluableinputduringthe
fundamentaltransitionthatNedapunderwentin
thepastyears.
UponthenominationoftheSupervisoryBoard,
theGeneralMeetingofShareholdersappointedDr
J.M.L.vanEngelenasamemberoftheSupervisory
Boardonaccountofhisbroadexecutiveexperience
indiverseorganisations,hiswide-rangingexpertise
inindustrialproductdevelopment,marketing
andproductstrategy,hisfinancialsavvyandhis
extensivenetworkatinstitutesofknowledge.
Inaccordancewiththeretirementschedule,MrM.C.
WestermannretiredfromtheSupervisoryBoard
attheGeneralMeetingofShareholdersandwas
reappointedatthesamemeetingforaperiodof
fouryears.
Market and strategy
Thefundamentalshiftsinthemarketsinwhich
Nedapoperatescontinuedunabatedin2013.
Growingtransparency,forinstance,ismaking
itincreasinglyeasyforcustomerstocompare
products.Theconvergenceoflocalmarketsintoa
13
singleglobalmarketmeansthatregionalleaders
canbesuddenlyreducedtoirrelevance.Andthe
rapidriseofnewtechnologiescanrenderentire
productlinesobsoleteovernight.
Marketsarebecomingmoreturbulentandmore
unforgiving.Missingoutonasingletechnological
opportunityorofferingapropositionthatfails
tocatchonwithcustomerscancauseadrastic
deteriorationinmarketposition.Whatismore,the
commercialandfinancialconsequencesoffailingto
retainastrongmarketpositionarebecomingmore
andmoresevere.Duetohyper-informedcustomers
andongoingmarketconvergence,anever-larger
sliceofthemarketisbeingdominatedbyasteadily
decliningnumberofleadingplayers.Thesearethe
partieswhogeneratesufficientprofittoaffordvital
investmentsinnewgenerationsofpropositionsand
thusextendtheirleadoverthecompetition.
Theleadingpositionsinthemarketsoftomorrow
arebeingdividedtoday.Agoodmarketpositionin
thepastisnoguaranteewhatsoeverforadominant
roleinthefledglingmarketsthatarecurrently
springingup.Theupshotforusisthatwemust
constantlyanddrasticallyraisethedemandswe
makeofourpropositions,whilealsopressingahead
withtheglobalisationandprofessionalisationof
ourorganisation.Thishaspromptedourdecision
tocontinueinvestinginourpropositionsaswell
asinourorganisationalstructurein2013,witha
deliberatefocusonlong-termgrowth,evenatthe
expenseofshort-termresults.
Withmarketsbecomingmorefickleand
unpredictable,weconsideritmorevitalthanever
toremainactiveinourbroadlydiversifiedand
robustportfolioofmarkets.Anexclusivefocuson
asinglelucrativemarketmayofferadvantagesin
theshortterm,butalsoposesathreatinthelonger
termasanunforeseendeteriorationinthismarket
couldlandthecompanyindeeptrouble.Only
sufficientdiversificationofouractivitieswillenable
ustoabsorbsetbacksinspecificmarketsandthus
preventthecompany’scontinuitybeingputin
jeopardy.
Intheyearunderreviewthemarketgroupstook
majorstepstowardsthefurtherdevelopmentof
existingandnewpropositions.Aproduct’stechnical
specifications,thoughobviouslyveryimportant,
areonlyoneaspectofthetotalproposition.Other
keyaspectsaredesign,easeofuseandmarketing.
Butelementssuchasavailability,speedofdelivery,
warrantiesandeaseofinstallationarealsokey
considerationsinthecustomer’spurchasing
decision.
Morethanbefore,weseektobuildourpropositions
inclosecooperationwithkeycustomers.This
enablesustoidentifyessentialcomponents
ofapropositionatanearlystage.Tomakethe
discussionwiththemarketasusefulaspossible,
ourexistingideasandviewsmustconsistently
bechallenged,andwemustbecomeincreasingly
sensitivetothefirstsignalsofchangesinmarkets.
Onegoodexampleofthisshiftfromproduct-based
thinkingtoproposition-basedthinkingoccurred
inthepastyearswithintheLightControlsmarket
group.Untilrecently,wedevelopedandproduced
lampdriverequipmentforHigh-IntensityDischarge
(HID)lightingunderthenameLuxon.Thistypeof
lightingisprincipallyappliedinlargebuildingswith
highceilings,suchasconferencecentres,logistics
centresandBigBoxretailers.Theadvantageofour
electronicLuxonlampdriversisthattheyaremore
energy-efficientandremotelydimmable.
Afterourinitiallimitedsuccesswiththesaleof
Luxonlampdriverstolampmanufacturers,we
decidedtolaunchabrand-newpropositioninthe
lightingmarket:LuxonLive®.Thisproposition
providesacomprehensivesolutionthatenables
playerssuchasretailchainsandconference
buildingmanagerstocontrolandreducetheir
lightingcosts.Thecoreofthispropositionstill
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Report of the Board of Management
consistsoftheLuxonlampdriverequipment,but
ithasnowbeenexpandedwithourownrange
oflightfittingsaswellasasoftwareservicethat
givesourcustomersconstantinsightintothe
qualityandcostsoftheirlighting.Whenfaults
occur,techniciansareimmediatelycalledoutto
remedytheproblem.Thespeedwithwhichfaults
areresolvedisrecorded,sothatourcustomerscan
checkwhethertheagreedservicelevelsarebeing
met.Inthereportingperiodweimplementedthe
firstsuccessfulLuxonLiveinstallationsinvarious
countriesincludingCanada,theUS,theUKand
Germany.
ThankstotheLuxonLiveproposition,theLight
Controlsmarketgrouphassecuredanentirely
differentpositioninthevaluechain.Itnowdeals
directlywithlargeendcustomersandistherefore
betterabletocommunicatetheuniquefeatures
ofitsproposition.Asecondmajoradvantageis
thatcustomerexperiencesarefedbackmuch
moredirectly,whichhelpstoacceleratefurther
improvementstotheproposition.
Thedevelopmentofasuccessfulproposition
ishighlytime-andenergy-consumingfor
individualmarketgroups.Inordertospeedup
thisdevelopmentprocess,ourmarketgroupsare
makingincreasinglyintensiveuseofeachother’s
knowledgeandexperience,notonlyintechnology,
butalsoinmarketing,projectmanagement,
distribution,supportandtraining.Inthisway,
investmentsmadebyindividualmarketgroups
produceNedap-widebenefits.Onekeycompetitive
strengthofNedapisbasedonthecombination
ofabroadcompany-wideportfolioofmarket
opportunitiesandtheintensivemarketfocusin
eachmarketgroup.Bymakingsmartuseofthe
potentialofeachmarketgroup,weareregularly
abletolaunchnewpropositionsbothfasterand
cheaperthanourcompetitors.
Thequickerpaceatwhichchangesinpropositions
andmarketsaretakingplacehasanimpacton
ourriskprofile.Riskisthechanceofunwelcome
eventsoccurring,withexponentiallysevere
consequences.Thefurtherprofessionalisationof
ourorganisationhasmitigatedtheriskoferrors,but
thepotentialcostoferrorsthatdooccurisrising.
Newdevelopmentscanbeadoptedindouble-
quicktimebymarkets.Asaresult,productsare
soldandusedaroundtheworldatayoungerstage
ofdevelopment.Designflawsorproductionerrors
thereforehavemuchgreaterconsequencesthan
before.Onetellingexampleisthemodificationwe
neededtomakelastyeartoourPowerRouterat
customersallovertheworld.
Butitisnotonlytechnicalrisksthataregrowing.
Withcontractsbecomingeverlargerandmore
globalinscale,theproject,certificationandlegal
risksarealsoamountingconcern.Managing
theseriskswillbeacrucialissueinthefutureand
mustbetakenonboardasanintegralpartofthe
developmentofnewpropositions.
Employees and organisation
Totakeupleadingpositionsinmarkets,thetell-
talesignsofchangingmarketconditionsmustbe
pickedupsoonerandsooner,andtheflexibility
ofourorganisationmustbeconstantlyincreased.
Classicorganisationalmodels,basedoncommand
andcontrol,failtoprovideanswerstothisnew
realityandarebeingsupersededbynewmodels.
Foryearsnow,Nedaphasbeenmovingtowardsa
muchmore‘distributedgovernancemodel’,where
responsibilityisbornebymanymorepeople.
Inordertorespondadequatelytofundamental
marketchanges,wemustcontinuouslyremainin
theforefrontwiththefurtherdevelopmentofour
governancemodel.
Ourcorporatecultureisaimedatenabling
everyonewithinourcompanytomakeresponsible
decisionsindependently.Toachievethis,three
basicconditionsmustbemet.Inthefirstplace,
itisessentialforeveryonetounderstandwhat
15
Nedap’sbasicprinciplesare.Theseinclude
pursuingsustainablegrowthofouraddedvalueper
employee,maintainingastrongandbroadportfolio
ofmarketopportunities,andcontinuouslyworking
onpersonalrelevancefortheorganisation.Over
thepastyearswehaveworkedhardtomakemany
ofthesebasicprinciplesmoreexplicit,toarticulate
theminclearertermsandtosharethemwiththe
entireorganisation.Secondly,internaltransparency
isvital.Wherepossiblewithintheparametersof
regulatorycompliance,wewanttogiveeveryone
aclearpictureofouractivitiesandperformance.
Thankstoinvestmentsinmodernmedia,thespeed
anddegreeofdetailwithwhichinformationis
madeinternallyavailablehasmuchimproved.Our
experienceisthatbetterinformationleadstobetter
decisions.Finally,peoplemustbegivenliberty
tomakerealdecisionsand,ofcourse,trulytake
responsibility.Wehaveseenthatwhenpeopleare
askedtotrulytakeresponsibilityfortheirdecisions
andfortheconsequencesoftheirchoices,they
learnmuchfasterandthequalityoftheirdecisions
improvesrapidly.
Toworksuccessfullywithinthisgovernancemodel,
ouremployeesmustmeetever-higherdemands.
Alongsidespecialistknowledge,everyoneis
expectedtohaveabroaderperspective.Everyone
mustunderstandtheimpactoftheirpersonal
actionsongroupobjectives.Theroleofmanagers
withinNedapisalsoundergoingafundamental
shiftawayfromsupervisinganddecision-making
towardsselecting,developingandinspiringnew
andestablishedtalent.Leadersareexpectedto
provideacoherentfuturevisionfortheirgroup,
sothattheemployeesintheirgroupcanbetter
determinehowthey,asindividuals,cancontribute
tothecollectivesuccessoftheorganisation.
Toreadyourselvesfortheshiftsweforeseeinour
markets,weembarkedontheRoadtoExcellence
programmein2012.Thecentralobjectiveofthis
programmeisthefurtherprofessionalisationof
thevariousprocesseswithinourcompanyinorder
toincreasethescalabilityoftheorganisation.The
scalabilityofanorganisationdeterminestheextent
towhichitisabletogrowrevenuewithoutrequiring
asimultaneousincreaseinheadcount.In2013we
continuedworkinghardonthepreviouslyinitiated
OperationalExcellenceandPeopleExcellence
components.Majorprogresshasbeenmade
throughoutNedaptowardsthesimplificationand
streamliningoftheoperationalorder-to-delivery
processes.Afteraninitialpeakinthemiddleofthe
reportingperiod,stocklevelswerebroughtunder
controlandreduced,leadtimeswereconsiderably
shortened,andconstanteffortsweremadeto
improveprocurementconditions.
ThefirstphaseofPeopleExcellencewasaimed
attherecruitmentoftoptalent.Thankstosuch
activitiesasourpartnershipwithLowlands,the
EntrepreneurshipMasterclassandnumerous
otheractivitiesatuniversitiesandcolleges,we
managedtoenhanceourappealtorealtoptalents.
Attheendof2013westartedthenextphaseof
PeopleExcellence,whichaimstofurtherraisethe
performanceoftalentedpeoplealreadywithin
ourranks.Inadditiontoorganisinginduction
andtrainingprogrammes,feedbackonpersonal
performancewillbeintensified.Moreattention
willalsobedevotedtoachievingbetteralignment
betweenpersonalgrowthobjectivesandthe
objectivesofthemarketgroupandNedap.
Inthereportingperiodwealsolaunchedthe
DevelopmentExcellenceprogramme.Byinvolving
moredisciplinesinproductdevelopmentat
anearlierstageandmakingmoreuseofpeer
review,wecangreatlyimprovethequalityofour
designsandtailornewpropositionsmoreclosely
tothedemandsofthemarket.Duringthedesign
process,alotofattentionisdevotedtothecritical
assessmentofappliedcomponents.Thishasa
positiveeffectonthecostprice,deliverytimeand
engineerabilityofnewproducts.Inviewofthelead
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Report of the Board of Management
timeofdevelopmentprocesses,itwillbesome
timebeforetheeffectsofthispartoftheRoadto
Excellenceprogrammebecomeclearlyvisible.
AspartoftheSupportExcellenceprogramme,
goodprogresswasmadein2013withthefurther
professionalisationofourprojectmanagement
withinNedap.Projectresponsibilityincreasingly
formsanessentialpartofpropositions.Lastyear,
therefore,weinvestedinthedevelopmentofour
ownprojectmanagementmethodologiesthatsuit
thespecificcharacteroftheprojectsinthevarious
markets.Wealsopressedaheadwiththefurther
developmentandformalisationofourBusiness
Partnerprogrammesandmadegoodprogress
withnewtechnologiesfortrainingcustomersand
businesspartnersintheuseandinstallationofour
products.
Implementingorganisationalimprovementsinthe
frameworkoftheRoadtoExcellenceprogramme,
whilstalsocontinuingtocarryoutournormal
day-to-dayactivities,requiresgreateffortand
perseverancefromallemployeesinvolved.
Fortunately,theimprovementsachievedsofar
provideallthemotivationweneedtocontinue
workinghardonthisprogrammeintheyearsahead.
In2014theRoadtoExcellenceprogrammewill
beexpandedwithMarketingExcellenceandSales
Excellence.
Nedap’scompetitivestrengthstems,firstand
foremost,fromthetalentanddedicationofour
employeesandthewayweworktogether.To
remainsuccessfulintheongoingbattleforleading
positionsinnewmarkets,werealisethatitis
necessarytoconstantlysethigherstandardsfor
ourselvesandourworkingmethods.Thecontinuous
drivetokeepimprovingyourselfandtoremain
personallyrelevantfortheorganisationdemands
agreatdealfromouremployees.Wearetherefore
extremelygratefultotheemployeesfortheir
contributionstothefurtherdevelopmentofthe
business.Althoughtheresultslaggedsomewhat
behindin2013,wehaveeveryconfidenceinour
jointcapabilitytotransposethetalentwithinour
companyintoconcretecommercialandfinancial
successesinthecomingyears.
Attheendof2013thecompany’spermanent
workforceconsistedof744employees,35more
thanthe709employeesattheendof2012.During
2013theaveragenumberofemployeeswas742
comparedto702inthepreviousyear.At41,the
averageagewasstable.Theabsenteeismrate,
excludingmaternityleave,roseintheyearunder
reviewto2.6%(2011:2.2%).
Asnotedearlier,Nedapmakeshighdemandsof
employeesintermsoftraining,experienceand
personality.Wehavefoundthatinrecenttimes
therequirementsforleadershipappointments
inparticularhavebecomealotmoreexacting.
Peoplewhomeetthesedemandsareextremely
hardtofind.Ifweweretoperformanadditional
selectionongenderorbackgroundinorderto
meetastatutoryratio,wewouldnothaveenough
candidates.Thisisessentiallywhywedonotmeet
thetargetratioofatleast30%womeninexecutive
positionsasrequiredbythelawonabalanced
participationofmenandwomeninexecutive
andnon-executivepositionsthattookeffecton
1January2013.Itisnotrealisticeithertoexpect
changesinthisrespectatNedapinthenearfuture.
In2013theaddedvalueperemployeefellfrom
€166,000(2012)to€160,000.Althoughtotal
addedvalueroseslightlyduring2013,thiswas
insufficienttokeeppacewiththegrowthin
headcount.Astheinvestmentsintheorganisation
arepartlyaimedatimprovingourscalability,we
foreseethattheexpectedrevenuegrowthwill
leadtohigheraddedvalueperemployeeoverthe
comingyears.
17
Witheffectfrom1April2013NedapN.V.has
signedanewone-yearcollectivelabouragreement
withthetradeunions,includingasalaryincrease
of1.5%effectivefromthatdate.Inaddition,all
employeesreceivedsevenNedapdepositary
receipts.Thesearesubjecttotheconditionslaid
downintheNedapemployeeparticipationplan.
TheNedapAdditionalParticipationPlan(NAPP)was
launchedon1January2013.TheNAPPoperates
alongsidetheexistingemployeeparticipation
planthatenablesemployeestousetheirannual
shareinprofitstopurchaseNedapdepositary
receipts.Undertheexistingparticipationplan,these
depositaryreceiptsarelockedupforaperiodof
fouryears.Inadditiontoa10%discountonthe
purchasepriceofthedepositaryreceipt,onebonus
depositaryreceiptisawarded,subjecttoconditions,
afterfouryearsforeveryfourdepositaryreceipts.
Theholderofthedepositaryreceiptisdirectly
entitledtothefulldividendpershare.
TheNAPPoffersemployeestheopportunityto
shareinprofitsiftheprofitbeforetaxesrisesmore
than5%peryear.Profitbeforetaxesin2012
(€16.313million)istheinitialreferencepoint.
Aftereachfinancialyear,itwillbeestablished
whethertheprofitbeforetaxeshasexceededthe
aforementionedthresholdvalueforthatyear.Ifthis
isthecase,aprofitpoolwillbecreatedbysharing
theprofitabovethethresholdvaluebetween
employeesandshareholders.Oftheprofitbefore
taxesabovethethresholdvalue,40%ispaidinto
theprofitpoolfortheemployees.Ifanyexceptional
circumstancesoccurinagivenyear,duetoe.g.
extraordinaryincomeorexpenses,acquisitions
orachangeinthedividendpolicy,theBoardof
Managementcanalwaysuseadifferentcalculation
methodtodeterminetheprofitpool.
Thedistributionoftheprofitpooltoemployees
takesplaceonthebasisofprofit-sharingrights
accruedbyemployeesonanindividualbasis.In
viewofprofitdevelopmentatNedap,noprofitwill
bedistributedundertheNAPPinthefinancialyear
2013.
ExpectationsarethatStichting
MedewerkerparticipatieNedapwilleventuallybuild
upashareofseveralpercentagesinthecompany’s
totalsharecapital.Attheendof2013,theStichting
held69,328Nedapshares,forwhichithadissued
depositaryreceipts.Thatisabout1.0%ofthe
issuedsharecapital.
Everyyear,theroleoftheWorksCouncilasthe
directrepresentativeoftheNedapemployees
gainsinsignificance.Thankstotheuniquenature
oftheNedapculture,theWorksCouncilmembers
areable–moresothantheircounterpartsinlarger
nationalrepresentativebodies–toraiseissueswith
theBoardofManagement,takingaccountofall
specificaspectsthatareatworkwithinNedap.Time
andagain,wefindthattheopenandconstructive
dialoguebetweenmanagementandemployees
enablesustomakedecisionsthatstrikeagood
balancebetweentheinterestsoftheemployees
andthebusiness.Wethereforethankthemembers
oftheWorksCouncilfortheirhardworkand
inputinthepastyear,andaredelightedwiththe
relationshipofmutualtrustthatwehavemanaged
tobuildtogether.
Market groups
AVI
2013wasasuccessfulyearfortheAVImarket
group(AutomaticVehicleIdentification,products
forvehicleanddriveridentificationaswellas
wirelessparkingsystems).Robustrevenuegrowth
wasachievedinvirtuallyallinternationalmarkets.
Overthepastyearsthemarketgrouphasmanaged
tobuildapowerfulproductlineforlong-distance
recognition,withaclearanddistinctivepositioning
foreachoftheconstituentproducts.Partlythanks
tothecomprehensivenessofthisproposition,
therobustTRANSITmicro-wavereader,thecost-
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Report of the Board of Management
effectiveuPASSreaderandthecompactANPR
Accesslicencenumberrecognitioncameraall
generatedhighersalesthanever.
ThemarketfortheSENSITsystemforwireless
parkingdetectionappearstobereachingmaturity.
Manycitieshavestartedupmobilityinitiatives
aspartoftheir‘SmartCity’concepts.Sensor
technologyforparkingdetectionisaneffective
wayofimprovingtrafficflowsinthisconnection.
Nedapsensorshavenowbeeninstalledinvarious
citiesondifferentcontinents.Theinformationfrom
thesesensorsisusedtoguidevehicleoperators
moreeasilyandquicklytovacantparkingspaces.
Asaresult,scarceparkingspaceisusedmore
efficientlyandthenumberoftrafficmovementsto
findaparkingspaceisreduced.Thisdevelopment
isexpectedtocontinue,withtheSENSITsystem
makingastructuralcontributiontowardsthemarket
group’srevenuegrowthinthecomingyears.
In2013wecontinuedtointroduceouruPASS
Accessreadertothesecuritysystemsmarket.With
itscompactformat,appealingdesignandreading
distanceoftwometresbasedonbattery-freecards,
thisUHFreaderisanidealcardreaderforsettings
wherepeopleneedcomfortable,rapidandhands-
freeaccess,suchashospitals,cleanroomsand
logisticscentres.Theproductwaswell-receivedin
themarketandthefirstprojectswerecarriedout
in2013.Thisproductisexpectedtogiverevenuea
furtherimpulsein2014.
ThenumberofprojectsintheNetherlandsfor
urbanvehicleaccesscontrolsystemswasrelatively
limitedintheausterityyearof2013.Income
fromthisactivitywasthereforelowerthaninthe
previousyear.However,internationaldemandfor
suchsolutionsisexpectedtogrowfurtherinthe
comingyears.
Owingtothebroaderportfolioofproductsand
markets,thenameAutomaticVehicleIdentification
(AVI)nolongercoversthemarketgroup’srangeof
activities.Themarketgrouphasthereforebeen
renamedNedapIdentificationSystemswitheffect
fromthenewfinancialyear.Inspecificmarkets
forparkingdetectionandurbanaccesscontrol
systems,themarketgroupwilloperateunderthe
NedapMobilitySolutionslabel.
Althoughproject-basedrevenuecanshow
fluctuationsintheshortterm,themarketgroupis
confidentthatongoingpropositiondevelopment
andintensivemarketingaimedatpromising
marketswillleadtosolidrevenuegrowthinthe
comingyears.
Energy Systems
Despitedifficultmarketconditionsintheyear
underreview,theEnergySystemsmarketgroup
(systemsfortheindependentandeffective
generation,storageandconsumptionofelectricity)
managedtopostrevenuegrowthwiththe
PowerRouter.Newlawsandregulationsimposed
restrictionsonsalesinBelgiumandtheUK.
Moreover,allinstalledPowerRoutersaroundthe
worldneededtobemodifiedinthefirsthalfof
2013,ahugeoperationthatputastrongdamper
onrevenuegrowth.Despitethesesetbacks,we
managedtoachieverobustrevenuegrowthin
Germany,themostimportantmarketforsolar
energy.
Thesteadydeclineinsolarpanelpricesaswell
asgeneroussubsidyschemeshaveprompteda
growingnumberofbusinessesandhouseholdsto
investinsolarinstallationsinthepastfewyears.
Thestrongadvanceofsolarpowerisbeginning
tohaveadisruptiveeffectinmoreandmore
countries.Thesharplyincreasedsubsidiesfor
solarinstallationsareincreasinglythesubjectof
criticaldebate,particularlynowthatthephysical
processingoftheabundantsupplyofpoweron
sunnydaysisalsoamountingproblem.Asaresult,
thesubsidyschemesforsolarpanelsareexpected
19
tobesharplyreinedinoverthecomingyears.In
addition,networkoperatorswillsetincreasingly
stringentdemandsinordertocurbtheunlimited
feed-inofelectricityintothenetwork.
Nedapisrespondingtothesedevelopments
withthePowerRouterSolarBattery,aSelf-Use
propositionenablingthestorageofsurplusself-
generatedenergyforlateruse.Besidesreducing
theloadontheelectricitynetwork,thisalso
preventsself-generatorsfromhavingtofeedtheir
surplusenergyintothenetworkatsteadilyfalling
subsidisedratesandthenrepurchasetheenergyat
ahigherrate.
WiththispropositionNedaphasnowachieved
adefinitebreakthroughinGermany.Despitethe
drasticdecreaseinnewsolarpowerinstallations,
thesegmentforSelf-Useinstallationshasactually
growninGermany.TheNedapPowerRouterisseen
asthetechnologicallymostcomprehensivesolution
withanattractiveprice,andhasthusmanagedto
becomethemarketleaderinthissegment.This
leadingpositionisconfirmedbythefactthatthe
majorbatterysuppliershaveregisteredforour
BatteryAcceptanceProgramme,wherewetesttheir
batteriesandcertifytheconnectorwiththePower
Router.ApartfrominGermany,wealsoseepositive
marketdevelopmentsinItalyandAustralia.
NedapinitiallyoptedtoservetheGermanmarket
throughdistributors.However,manyofthese
companieshaverunintodifficultiesduetothe
slumpinthesolarenergymarket.Anotherproblem
wasthatalotofthesecompaniesprovedtobe
unabletosuccessfullymarketanewconceptsuch
asthePowerRoutertocustomers.Toovercome
theseobstacles,theCertifiedInstallerProgramme
waslaunchedlastyearintheGermanmarket.The
aimistoforgedirectrelationswiththeinstallers,
astheseareoftenthepeoplewhodetermine
whattypeofinstallationisactuallyplaced.Nedap
nowtrainsandcertifieslargegroupsofinstallers
everymonth.TheseCertifiedInstallersforman
expertnetworkthatisabletosellandsupportthe
PowerRouteronthebasisofastrongknowledge
position.Byoperatingclosertothemarket,we
havealsoobtainedamuchbetterpictureofhow
wecancreateauniquesellingpropositionwiththe
PowerRouter.
WiththeNedapPowerRouterwearewell-
positionedtobenefitfromtheexpectedgrowth
indistributedpowerstoragesystems.However,
regulatorychangesandadjustmentstosubsidy
programmescanhaveashort-termdisruptiveeffect
onthedevelopmentofthismarket.Nevertheless,
wearecountingonfurthergrowthin2014.
Healthcare
During2013revenueoftheHealthcaremarket
group(automationofadministrativedutiesof
healthcareprofessionalstocreatemoretime
forcare)showedanotherincrease.Facedwith
uncertaintiesaboutregulationsandfinance,a
growingnumberofhealthcareinstitutionsare
seekingtoruleoutallriskswhenselectingtheir
administrativesystems.Thisexplainstheirgrowing
preferenceforthetried-and-testedsolutionsof
marketleaderNedap.
Oneparticularlygratifyingdevelopmentisthat
customerswhoalreadyusepartsoftheNedap
solutionareincreasinglypartingwayswiththeir
oldthird-partysoftwareandswitchingoverentirely
toNedap.TheElectronicClientFilethatNedap
developedinthepastyears,forinstance,isbeing
adoptedbyagrowingnumberofinstitutions.In
addition,agrowingnumberoforganisationsin
relatedmarkets,suchashealthcareformentally
handicappedpeople,areoptingforNedap’s
services.
Healthcareinstitutionsneedtoadapttheir
organisationtocopewiththechangingconditions
inthehealthcaremarket.Thisalsohasimplications
20
Report of the Board of Management
forthesupportthatNedapcanprovide.Employees
ofhealthcareinstitutionsincreasinglyworkin
smallindependentteams,whichcallsforother
formsofcommunicationandsupportthanthe
oldset-up.WithsolutionssuchasONSmessages,
Nedapfacilitatestherequiredcommunication,
knowledgesharingandinformationprovision
betweenemployeeswithinorganisations,viaa
mobiletelephoneortablet,onaclosedsocial
platform.Theself-rosteringsolutiondevelopedby
Healthcarerespondstothegrowingdemandfor
aninnovativesolutionformakingrosterswithin
changinghealthcareorganisations.Inthecoming
years,Nedapwillcontinuetoinvestinnewand
innovativesolutionsforhealthcareorganisationsin
arapidlychangingmarketinordertokeepadding
thevalueofitsservices.
OwingtotheirgrowingdependenceonNedap,
customersarealsosettinghighstandardsfor
therobustnessandreliabilityofthesoftware.To
continuemeetingthesedemands,substantial
investmentsweremadein2013intheinnovation
ofthebasicsoftwarearchitecture.Theseefforts
donotleaddirectlytonewfunctionalities,butare
essentialtoliveuptothehighexpectationsour
customershaveofNedap.Withtheseinvestments,
themarketgroupisconfidentthatitisreadyto
fulfilNedap’sgrowingroleforitscustomers.
Despitethedeclineinthenumberofagencystaff
intheNetherlandsduringtheyear,Pep®(digital
timesheetsforownemployeesandagencystaff)
wasabletoachievefurthergrowth.Overthepast
years,theagencymarkethasdevelopedintoa
commoditymarket,wheretemporaryemployment
agenciesareinterchangeableincertainrespects
andmarginsareundergreatpressure.Agencies
mustbeasleanandmeanaspossibletoremain
profitablewithfallingmargins.Someagencieswill
inevitablyopttocreatemorevaluebymovingup
thechainandofferingHRservicesalongsidetheir
existingstaffmatchingandpayrollingservices.With
itssimpletimesheetsolution,Pepisrespondingto
currentdevelopmentsinthemarketandforesees
furthergrowthfromtheseactivitiesinthecoming
year.
Library Solutions
In2013theLibrarySolutionsmarketgroup(RFID
systemsforlibraries)successfullyrepositioned
itselffromaprojectorganisationtoatechnology
provider.WiththeLibrixproductline,themarket
groupoffersapowerfulproductportfoliofor
libraries.Projectpartiesacrosstheworldcanfitthe
Librixproductsintolocalprojectsaccordingtotheir
ownwishes.
Lastyearwedevotedalotofattentiontothe
possibilityofintegratingourproductsintoexisting
settings.Thismakesitincreasinglyeasyfor
partnerstouseNedapproductsintheirprojects.
Inthepastyears,forinstance,librarieswereset
upwithourtechnologicalcorecomponentsin
Scandinavia,Asia,LatinAmericaandNorthAmerica.
InCanada,thefirstlibrarygroupswereequipped
withintelligentbookshelvesforreturningbooks.
Inaddition,webolsteredourexistingmarket
leadershippositioninFrancebytheroll-outofRFID
systemsinthelibrariesofMarseille.Unfortunately,
thesenewinitiativeswereinsufficienttoentirely
offsetthelossofproject-basedturnover.
Thankstothewindingdownofproject-based
activitiesandthemarketgroup’sclearnew
positioning,theteamcannowfullyfocusonthe
furtherdevelopmentandworldwidemarketing
ofanindustry-leadingportfoliooftechnological
corecomponents.Asaconsequence,theproduct
portfoliowillbeexpandedin2014withflexible
sortingsolutions,smartreadersandcore
componentsforintelligentbookshelvesthatcanbe
usedflexiblybylocalprojectparties.
Nedapdistinguishesitselfinthismarketwitha
fulllineofpurpose-designedRFIDproductsfor
21
libraries.Basedonthestrongexpansionofthe
numberofinternationalpartners,themarket
groupseesgoodopportunitiesforstrengthening
itscurrentmarketpositionandachievingrenewed
growth.
Light Controls
AfteryearsofgrowththeLightControlsmarket
group(powerelectronicsandcontrolsystemsfor
thelightingindustry)managedtoachievevirtually
thesamerevenuein2013asin2012.
TheUVdisinfectionsegmentsawafallinthe
numberofwatertreatmentprojects,whichhad
anegativeeffectontherevenuefromourlamp
drivers.Wehadalsoanticipatedfurthergrowth
inoursolutionsforballastwatertreatment
onseagoingvessels.Owingtothepersistent
uncertaintiesabouttheinternationaltreatyforthe
controlandmanagementofships’ballastwaterand
sediments(legislationofInternationalMaritime
Organisation),itremainsextremelydifficultto
securereasonablyreliableprojecttimelinesfrom
ourcustomerswhoareactiveinthismarket.
However,weremainpositiveaboutourlonger-term
growthopportunitiesinthissegment.
IntheUVcuringsegment,weseeagrowing
interestinourelectroniclampdriverequipment.
ThisisusedforthegenerationofUVlightforthe
acceleratedcuringofindustrialinks,coatingsand
glues.Alongsideanextremelystringentcheck
onthequantityandqualityoftheUVlight,our
productsalsoenablesubstantialenergysavings.
Duringtheyearunderreview,alotofworkwent
intothedevelopmentofanewtypeoflampdriver
forthegenerationofmicrowavesforUVlight.This,
inturn,pavesthewayfornewUVlightapplications.
Withthisfurtherreinforcementofourproduct
portfolio,wearelookingforwardtohealthygrowth
inthissegmentinthecomingyears.
Afterthesurgeinrevenuein2012thankstoalarge
projectinSanDiego,revenuefromourQLinduction
lightingdeclinedin2013asexpected.Duetothe
enormousmarketingoffensiveforLEDlightingand
theadventofLED-basedstreetlighting,moreand
morecustomersareoptingforLEDtechnology.
Forthisreason,despitetheactualadvantagesof
QLtechnology,wedonotanticipategrowthinthis
productlineinthecomingyears.
Theupwardtrendinourincomefromour
explosion-prooflightingsystemsforindustrial
andoffshoreapplicationswasfurthersustainedin
2013.Theexpectationsforthecomingyearsalso
remainpositive.
In2013themarketgrouptookmajorsteps
towardsthefurtherreinforcementoftheLuxon®
proposition.Wenowofferaready-madesolution
enablingcustomerswithdistributioncentres,
hangars,large-scaleproductionareas,largestores
orconferencecentrestoachieveimmediateand
significantsavingsontheirenergycosts.Agrowing
numberofcustomersarealsobecomingawareof
thevalueofimprovedlightqualityandthemore
flexibleuseoftheirlightingsystems.
Wenowalsofrequentlyhavedirectcontact
withtheendcustomers.Besidesgivingusa
betteropportunitytoexplainthedemonstrable
advantagesofoursystems,thesecontactsalso
providedvaluableinputregardingthewishes
andrequirementsoftheusersofoursystems
inthereportingperiod,thushelpingustomake
substantialimprovementstoourpropositionin
theyearunderreview.Customersareincreasingly
entrustingNedapwiththefullrevampingof
lightingsystemsattheirsites.Inthepastyearwe
thereforealsoputalotofeffortintodevelopingour
ownprojectapproachandfindingsuitableproject
partners.Theaimistoguaranteethequalityofour
projectimplementation,withouthavingtobuilda
full-scopeprojectorganisation.
22
Report of the Board of Management
InviewofthegrowthofthesalesactivitiesinNorth
America,wedecidedtosetupourownsubsidiary
thereunderthenameNedapInc.in2013.For
manycustomersintheUS,thepresenceofourown
branchintheUnitedStatesisapreconditionfor
doingbusinesswithus.
In2013theLightControlsmarketgroup
strengtheneditspositioninthevariouslighting
segments.Nowthatwehaveconvincingly
demonstratedtheadvantagesofoursystemswith
pilotprojectsinagrowingnumberofcountries,the
marketgroupisalsocountingonhandsomegrowth
inthecomingyears.
Livestock Management (formerly Agri)
Afterthejumpinrevenueintheprevious
year,theLivestockManagementmarketgroup
(automationoflivestockmanagementprocesses
basedonindividualanimalidentification,which
helplivestockfarmerstooptimisetheirbusiness
processesandimprovethewell-beingofhumans
andanimals)tookastepbackin2013.Highfeed
costsin2012andQ12013aswellasalongwinter
inthenorthernhemisphereresultedinalower
levelofinvestmentindairyfarming.Afterthe
investmentwaveinsow-friendlyhousingtocomply
withtheEU’smandatorywelfareregulationsin
2012,revenueinthepigfarmingsectorreturned
tonormallevels.SinceQ22013,feedcosts
havedecreasedsignificantlyandbothmilkand
meatpriceshaverisen.Asaresult,theincomeof
livestockfarmershasincreasedsignificantlyand
investmentplansarebackontheagenda.
Economiesofscalearetheorderofthedayin
thedairyfarmingsector.Globaldemandfordairy
produceisrisingsteadilyyearonyear,while
thenumberofproductionfarmsisconstantly
decreasing.Thedisappearanceofthemilkquota
inEuropein2015willgiveanextraimpulseto
theincreasesinthescaleofdairyfarms.This
trendtowardslargerfarmswithlowerproduction
costswillspurasteadilygrowingdemandfor
automationinthecomingyears.Withitsbroad
rangeofproducts,NedapLivestockManagement
iswell-placedtocapitaliseonthistrend.Ourdairy
farmingsolutionsmakeitpossibletoachievecost
savings,whilesafeguardingtheindividualanimal’s
well-being.
Thenewgenerationofheatdetectionsystems,
the“SmarttagNeck”,isequippedwithadvanced
accelerationsensorsthatgiveadetailedpictureof
themovementsofeachindividualanimal.Besides
enablingreliableheatdetection–andtherefore
optimalinseminationtiming–thisalsoprovides
agoodunderstandingofcows’eatinghabitsand
hencethehealthoftheanimals.Thisinformation
allowsthedairyfarmertoidentifyandremedy
healthproblemsatanearlystage,whichrepresents
animportantsteptowardssustainabledairy
farming.
Thankstotheapplicationofadvancedtechnologies,
oursystemsareincreasinglyeasytoinstall
anduse.Asaresult,ourproductsarenolonger
broughttomarketviamanufacturersofmilking
parloursystems.Agrowingnumberoflivestock
improvementcorporationsaroundtheworldhave
nowembracedtheNedapproductandmadeit
anessentialpartoftheirownproposition.Asall
systemsarelinkedtotheInternet,supportcostsare
significantlyreducedandawealthofinformation
isunlocked.Inviewofthedemonstrablyattractive
paybacktimeofoursolutions,wearecountingon
furthergrowthinthissegment.Totakeadvantage
ofthisgrowthpotential,wearenowalsoactivein
thedairyfarmingsectorfromourbranchinChina.
OurpresenceinShanghaimakesusbetterableto
providecommercialandtechnicalsupporttoour
existingandnewcustomersinthisregion.During
theyearunderreview,wealsobecameactivein
Pakistan,thefourth-largestmilkproducerinthe
world.
23
Thetrendtowardsanimal-friendlierproduction
inthepigfarmingsectorisgainingmomentum
aroundtheworld.Thisispartlybecauselarge
foodprocessorsandfastfoodchainsareplacing
highdemandsonpigfarmers.Butitisalsodue
tothegoodproductionresultsoftheseanimal-
friendlysystems.TheEuropeanpigfarmingsector
hasalreadymademajorstridesforwardsinthis
respectinthepastyears.NowNedapisalsoseeing
anincreaseinrevenuefromitsgrouphousing
systemsforsowsinAsiaaswellasSouthandNorth
America.Bybroadeningitsproductrange,Nedap
hasbecomeamoreattractivepartnerforthesector.
Inadditiontothesowfarmingsegment,wehave
alsoenteredthepigbreedingandfinishingpig
segments.Lastyear,installationsincorporating
newproductsforthesepigfarmingsegments
weredeliveredinEuropeandAsia.Thenew“Pig
PerformanceTestingSystem”waswell-received
inChinaandalargenumberofnewprojectswere
successfullycompletedin2013.
Themarketgroupisinvestingheavilyinthe
developmentofnewproductsfortheautomation
ofprimarylivestockfarmingprocesses.Withthese
labour-savingproducts,individualanimalscan
becloselytrackedintermsoffeeding,milking,
reproductionandhealth.Thenewgeneration
ofSmarttagsgivesaccesstolargequantitiesof
detailedinformationaboutanimalbehaviour.Based
onthisinformation,weexpecttobeabletooffer
livestockfarmersvaluablenewfunctionalitiesin
thenearfuture.In2014,forinstance,powerful
marketinginstrumentswillbeusedtomarketthe
“CowPositioningSystem”and“FarrowingPen
Feeding”systemsasstrongpropositions.
Amajorfocusofoureffortsduringtheyearunder
reviewwasthetechnologicalrevampingofour
productsandthefurtherprofessionalisationofour
technicalandcommercialsupport.Thisprompted
alargenumberofnewpartnerstooptforNedap,
resultinginafurtherreinforcementofthemarket
group’smarketposition.Weexpectthemarketsin
whichweoperatetobecomeincreasinglyvolatile.
Smallimbalancesinthesupplyanddemandfor
milkandmeatproductsaswellasrapidlychanging
feedcostscanhaveamajorimpactonalivestock
farmer’sincome.Althoughinvestmentsinstall
automationwillonlyincreaseinthelongterm,
thesevariablefactorscan,intheshortterm,cause
strongfluctuationsinthesector’swillingnessto
investand,accordingly,alsointhemarketgroup’s
revenuegrowth.Giventhecurrentmarketsituation,
however,themarketgrouplooksforwardtothe
year2014withconfidenceandexpectsanincrease
inrevenue.
Retail
Despitecontinuingpressureonrevenuesinthe
retailmarket,theRetailmarketgroup(security,
managementandinformationsystemsforretail)
onceagainmanagedtoachievesplendidrevenue
growthin2013.BylaunchingnewRFIDproducts
andunlockingnewmarkets,themarketgroup
furtherreinforceditsmarketposition.
Themarginbetweensuccessandbankruptcyinthe
retailmarketisrazorthin.Thedecisionwhether
ornottowritedownordiscountretailstockscan
bethedifferencebetweenprofitorloss.Stocking
thewrongsizesorcoloursinevitablyleadstoloss
ofrevenue.Alwayshavingthecorrectquantity
ofthecorrectarticlesinstockismorecrucial
thanever.MoreandmoreretailersseethatRFID
(RadioFrequencyIdentification)canbecrucial
inprovidingaccurateandtimelyinsightinto
availablestocks.WithStore!D®,Nedapoffersan
appealingpropositionthatiscarefullytailoredto
thedemandsoftheretailmarket.Alotofattention
wasdevotedtotranslatingtherathercomplex
identificationtechnologyintoproducts,sothat
storeclerksreceivesimpleandintuitivesupportin
theperformanceoftheirday-to-dayactivitiesas
wellasacompletereal-timepictureofthestock
flowsinthestores.
24
Report of the Board of Management
WithStore!D,Nedaphasmanagedtowinthetwo
largestRFIDprojectsinEurope.AFrenchsports
retailerwithoutletsallovertheworldawarded
NedapthecontractforupgradingitstraditionalRF
anti-theftsystemstocombinedsystemswithRFID.
Adler,aGermanfashionchain,optedforNedap
Store!Dreadersfortrackingitsgoodsflowsfrom
thestorewarehousetotheshopfloor,check-out
andexit.Thankstothepracticalsuccessatthese
tworetailers,moreandmorestorechainsarenow
invitingNedaptohelpthemaddressandresolve
theirlogisticalchallenges.Thedevelopmentof
ourRFIDpropositioncostalotofeffort,butithas
openedupexcellentgrowthprospects.
Attheendof2013Nedapmanagedtorenewthe
existingcontractwithH&Mforseveralyears.Inthe
pastyearsNedaphasproventoH&Mthatitisable
todeliverworldwideprojectswithsmartanti-theft
systems,remotelymanagedaccesscontrolsystems
andburglaryalarms(Cube®)withoutanyproblems.
CubeisaStoreOperationsPlatformforretailers
withmultiplestores.Cubeenablesretailerstokeep
trackoftheentireoperationalperformanceofeach
individualstoreanywhereintheworld.Information
onthenumberofvisitors,deploymentofstaff,and
useofdoorsandstoragecabinetsisautomatically
collectedandclearlypresented.Bygainingabetter
understandingoftheirdailyperformance,retailers
cantakeappropriateactiontoreducecostsand
raiserevenues.Retailersparticularlyappreciatethe
feedbacktheyreceivefromCubeonwhetherstores
areactuallymeetingtheirtargets.
Withthe!Sense-productlinetheRetailmarket
groupnowoffersanexcellentsolutionfor
supermarketsandhypermarkets.Theavailability
ofreal-timeinformationisvitalinthissegment.
Incidentsmustbeinstantlyreportedsothat
securityguards,aidedbycameraimagessentto
theirmobiletelephone,canimmediatelytake
appropriateaction.Similarly,fluctuationsinthe
numberofvisitorsmustalsobeimmediately
reportedtoensurethatthecorrectnumberof
check-outpointsareopenatalltimes.Another
importantadvantageof!Senseisthatithas
beenspecificallydesignedtoallowtheproblem-
freeimplementationoflargeinstallationsina
shortspaceoftime.Thefirstlargeandcomplex
installationswerecompletedin2013.
In2013alotofenergywasputintotheexpansion
ofoursalesandinstallationnetwork.New
partnershipswereformedinUkraine,Chile,
Colombia,Argentina,Vietnam,Indonesiaand
Australia.Afterthesuccessfulimplementation
ofthefirstinstallationsforinternational,non-US
customersintheUnitedStates,wewerealsoable
tointerestthefirstUSretailersinourproductsand
thefirstpilotprojectsarenowoperational.
Thankstotheinvestmentsinpropositionsand
theorganisationalstructureoverthepastyears,
Nedaphasbecomeanincreasinglyimportant
partyinstoretechnologyforrapidlyexpanding
internationalretailers.Moreandmoreretailers
believethatNedapsolutionscanmaketheirstores
demonstrablysaferandmoreprofitable.Themarket
groupthereforeexpectstocontinuetogrowits
revenueoverthecomingyears.
Security Management
TheSecurityManagementmarketgroup,which
deliverssystemsforaccesscontrol,registration,
payments,fireandintrusionalarms,surveillance,
lockermanagementandbiometrics,postedmodest
revenuegrowthin2013.IntheNetherlands,the
difficultmarketconditionsintheconstruction
sectorareputtingabrakeongrowthinearnings.
Inaddition,theplannedfurtherwindingdownof
activitiesintheschoolmarketdampenedrevenue.
Bycontrast,revenuesshowedamuchmorepositive
developmentinGermany,Switzerland,Austria,
BelgiumandFrance.
25
Duringtheyearunderreviewattentionwas
devotedtotheGlobalClientProgramme,ourown
projectmethodologyforthesuccessfulworldwide
implementationoflarge-scaleinternationalsecurity
projects.Thisprogrammehascaughtonwithlarge
internationalenterprisesseekingasinglestandard
securitysolutionthatcanbeusedalloverthe
world.Accordingly,thenumberofcountrieswhere
wecarriedoutprojectsforourcustomersincreased
veryrapidlylastyear.Thailand,Pakistan,Colombia,
Peru,BrazilandthePhilippinesareonlyafew
examplesofcountrieswhereprojectshavebeenor
arebeingimplemented.Thisprogrammecombines
theadvantagesofacentralstandardapproach
withthecostbenefitsofimplementationbylocal
partners.Inaddition,thestructuredapproachwith
accompanyingagreementsgivesbettercontrolof
projectrisks.Wethereforeexpectsteadyrevenue
growthinthissegment.
Allovertheworldweseeagrowinginterestingood
lockermanagementsolutions.Thetrendtowards
moreflexibleuseofofficespacehasmadethe
safestorageofpersonalbelongingsanimportant
issue.Withtheseamlessintegrationofourlocker
managementsystemwiththeAEOSplatform,we
offeranappealingsolutionforthesebusinesses
andinstitutions.
Thefurtherexpansionofthefunctionalityof
theAEOSsecurityplatformishelpingustowin
moreandmorenewcustomers.Thefirstprojects
basedentirelyonthenewintrusiondetection
functionalityhavenowbeencarriedout.Moreover,
agrowingnumberofcustomersareorderingthe
newvideofunctionalityontheAEOSplatform.With
thecontinuingdevelopmentofnewfunctionalities,
AEOSoffersagrowingnumberofcustomersa
uniquefullysoftware-baseddistributedsolutionfor
complexsecurityintegrationissues.Moreandmore
ofourbusinesspartnersarethereforeswitching
overentirelytoAEOSwhenplanninganddesigning
customerprojects.
Inthereportingperiodthemarketgroupmadean
importantfurtherimprovementtothesecuritylevel
oftheAEOSplatform.Withitsnew“end-to-end”
securitysystem,Nedaphassucceededinmeeting
theextremelystringentsecuritystandardsthat
militaryandgovernmentinstitutessetwithrespect
tocriticalITsystems.Nowthatwehavesucceeded
intranslatingtheseexactingdemandsintoan
out-of-the-boxsolution,weexpectthatthesenew
requirementswillincreasinglyformanessential
partoftenderprocedures.
OursubsidiaryNsecureB.V.isbecomingsteadily
moresuccessfulwithitsinnovativeSafetyand
Securityservices.Besidestheremotemonitoring
oftheeffectivenessofsecuritysystems,thereis
alotofinterestinitsautomatedsafetyservices.
Thesehelpbusinessestocheckwhetherall
personsonsitemeetallrelevanttrainingand
certificationrequirements,andalsoprovide
digitalsafetytrainingfornewpeople.Checksto
ensurecompliancewithallsafetyregulationsare
becomingincreasinglystringent,particularlyin
thepetrochemicalindustry,duringindustrialplant
shutdownsandlargeconstructionprojects.Onthe
strengthofitsservices,Nsecurehasmanagedto
securealeadingpositioninthismarket.
Thankstoitsongoinginvestmentsinproduct
innovation,marketingandthecommercial
organisation,themarketgroupisalsoconstantly
strengtheningitscompetitiveness.Themarket
groupisthereforecountingonfurthergrowthin
revenuefor2014.
CIMPL
CIMPL(ConstructioninMetalandPlastic)
manufacturescomponentsforNedapproducts.
Theinvestmentsininnovationandautomationof
thepastyearshaveledtoafurtherimprovement
oftheplasticsproductionprocess.Duringthepast
year,theactivitiesofthemetaldepartmentcame
undercriticalreview.Insteadofusingagencystaff
26
Report of the Board of Management
toabsorbpeaksinworkload,workisincreasingly
beingoutsourced.Thebigchallengefacingthis
groupinthecomingyearsistofindasustainable
balancebetweenin-houseproductioninorderto
preservevaluableknowledgeandtheoutsourcing
ofworktoanetworkofreliablepartners.
Inventi
In2013InventiB.V.inNeedesawafurtherincrease
initslevelofactivities.InventiB.V.isawholly
ownedNedapsubsidiarythatisentirelydedicated
tothescalableproductionoffullydeveloped
Nedapproductsatacompetitivecostprice.With
InventiB.V.Nedapisassuredoftheservicesofa
reliableproductioncompany,sothatimportant
knowledgeaboutproductionprocessesand
componentpricesremainsavailablewithinthe
organisation.
WithintheframeworkoftheDevelopment
Excellenceprogramme,Inventihasthecrucialrole
oflookingcriticallyatthefirstprototypesofnew
productsinordertoassesstheengineerability
ofthedesignaswellasthepurchasepriceand
availabilityofcomponents.Byfarthelargestpartof
theultimatecostpriceofaproductisdetermined
inthisfirstdesignphase.Theimprovementsthatwe
havebroughtaboutinthisareawillinduecourse
haveapositiveeffectonthecompetitivenessofthe
differentNedapproducts.
Intheyearunderreviewwecontinuedtowork
steadilyonprocessimprovements.Inanumber
ofproductionlineswemanagedtoachievea
drasticincreaseinthemachineryutilisationrate
aswellasreducetheproductmanufacturing
timesbyhalf.Bybringingaboutsuchfar-reaching
improvementswhilesimultaneouslyprovidinga
fastandhigh-qualityresponsetotheproduction
requirementsofthemarketgroups,weinevitably
placedgreatdemandsontheemployeesofthe
Inventiorganisationin2013.AtInventi,too,the
mainchallengeforthecomingyearswillbetofind
asustainablebalancebetweenin-houseproduction
andtheuseofexternalproductionfacilities.
Financial performance
Totalrevenuein2013cameto€173.7million,1%
higherthanin2012(€171.9million).Therevenue
fromservices(subscriptionsandmaintenance
contracts)increasedfurtherintheyearunder
reviewto€21.0million(2012:€18.0million),
whichis12.1%ofthetotalrevenue(2012:10.5%).
Addedvalue(incomelesscostofmaterials,plus
orlessmovementsininventories),expressedasa
percentageofrevenue,rosefrom67.8%(2012)to
68.4%.
‘Subcontractingandotherexternalcosts’roseby
€1.2millioncomparedto2012.Greater
expenditureonproductdevelopmentaswellason
increasingthescalabilityoftheorganisationwas
responsibleforthisrise.Intheyearunderreview,
thenumberofemployeesroseby35to744at
yearend.Onaverage,therewere40employees
morethanin2012.Thisincreaseinheadcountas
wellastheadjustmentstothecollectivelabour
agreement,higherseverancepaymentsandhigher
pensioncostscausedthesalariesandsocial
securitychargestoincreaseby€4.0million.
Normalamortisationanddepreciationcharges
wereup€0.8millioncomparedto2012.Noassets
wereimpaired.Capitalisationofassetsdeveloped
in-housewasdownby€0.9millionintotalon
2012.Thisitemmainlyconcernsnewdevelopment
projects.
Operatingprofitfor2013cameto€11.8million
(2012:€16.4million),whichis6.8%ofrevenue
(2012:9.5%).Netfinancingexpenseswere€0.6
million,almostthesamelevelasthepreviousyear
duetoavirtuallyunchangedcreditrequirement
andaverageinterestrate.Theshareofprofitof
associatesrosebyover€0.1millionon2012.
TheeffectivetaxrateoftheNedapGroup
(excludingtheassociate)was18.6%in2013
(2012:17.9%),thanksinparttotheapplicationof
thespecialtaxcreditforinnovations(knownasthe
27
‘InnovationBox’).Thenominalcorporateincome
taxrateintheNetherlandsis25%.Bymaking
useoftheInnovationBox,businessescanreduce
theirbasictaxableincomesothatincomefrom
innovationistaxedatalowerrate.Theagreement
withtheTaxandCustomsAdministrationisvalid
until31December2015.
Thesedevelopmentsresultedinaprofitaftertaxes
for2013of€9.8million(2012:€13.5million),
whichis5.6%ofrevenue(2012:7.9%).
In2013additionstoproperty,plantandequipment
stoodat€10.1million,nearly€2.2millionhigher
thanthedepreciationcharges.Thisexcessis
mainlyduetothepurchaseofanadjacentplot
oflandplusbuildingsinGroenlo.Thepurchase
willallowtheshort-termrealisationofplanned
expansionstoaccommodatethelargernumber
ofstaff.Investmentsinintangibleassets,mainly
developmentprojects,amountedto€1.7million,
whileamortisationchargescameto€2.1million.
Inventoriesdecreasedby€1.0millionand
amountedto14.9%ofrevenueattheendofthe
yearunderreview(year-end2012:15.6%).Trade
andotherreceivableswere€1.7millionlowerat
theendoftheyear.Theaveragecredittermoftrade
receivables,measuredinweeks,increasedhowever
from7.4in2012to7.9in2013.
Owingtominormovementsinnon-currentassets
(increase)andcurrentassets(decrease),totalassets
remainedvirtuallyunchanged.However,solvency
(equityexcludingdistributabledividendandnon-
controllinginterests,expressedasapercentage
oftotalassets)declinedfrom38.9%to36.6%.
Thisdecreasewasattributabletotheadjustment
ofthefinancialstatementstothenewIAS19R
(IFRS)standardforemployeebenefits.Duetothis
mandatoryadjustment,equityfellby€5.5million
atyear-end2013andby€4.6millionatyear-
end2012.DisregardingthisIFRSobligation,the
solvencyratioattheendoftheyearamountedto
41.0%(year-end2012:39.2%).
Thecashflowfromoperatingactivitieswas
sufficientin2013tofinancetheinvestmentsin
property,plantandequipmentandintangible
assets,aswellastopayalmost75%ofthe
dividendfor2012.Onbalance,thebankdebt
increasedby€2.6million.Thecreditfacilitiesat
theendof2013were€45.9million,ofwhich
€37.1millionwasused.Cashandcashequivalents
stoodat€3.5million.
Nedap’spolicyistoadequatelycontrolany
possiblerisksarisingfromfinancialinstruments.
Nedapmakeslimiteduseoffinancialderivatives.
Thefinancialriskmanagementpolicyandthe
risksareexplainedinthenotestothefinancial
statements.
Outlook
OurfocusatNedapisonmovingmarketswith
technologythatmatters.Achievingthismeans
motivatingouremployeestoremainloyaltoour
companybygivingthemtheguidance,scopeand
opportunitiestheyneedtotranslateknowledge
ofmarketsandtechnologyintoappealingand
sustainablepropositions.Thesepropositions
areouranswertorelevantissuessuchas:how
canweprovidetheworld’sgrowingpopulation
withsufficientfood,howcanwemakemoretime
availableforhands-oncare,andhowcanweapply
moresolarenergyinarobustmanner.
Developingandmarketinginnovativepropositions
isnotwithoutrisk.Technologicalobstacles,
marketsthatdevelopinunforeseendirections
orstronger-than-expectedpriceerosionareonly
afewexamplesoftheproblemsweencounter.
Thecontinuingdiversificationofourportfolioof
technologiesisoftheutmostimportanceinorder
topreventtheserisksfromjeopardisingNedap’s
continuity.
28
Report of the Board of Management
ThisNedap-wideportfolioofknowledgeand
experienceoffersmarketgroupsasolidfoundation
forbuildingtheirmarket-specificpropositions.
Thecross-fertilisationbetweenthemarketgroups
leadstoastrongaccelerationinthetranslation
oftechnologicalandmarketopportunitiesinto
concretecommercialresults,anessentialpartof
ourcompetitivestrength.
Thankstoourinvestmentsininnovationand
commerce,thedistinctivenessofourpropositions
hasincreasedfurtherinthepastyearsandwehave
reinforcedourpositionsinourdiversemarkets.
Onthestrengthofalltheseefforts,wecanlook
tothefuturewithconfidenceandforeseehealthy
growthinthelongerterm.Ourexpectationfor2014
isthat–barringunforeseencircumstances–Nedap
willachievefurtherrevenuegrowth.
Groenlo,11February2014
TheBoardofManagement:
R.M.Wegman
G.J.M.Ezendam
30
Financial statements
2013 2012Assets noteNon-current assetsProperty,plantandequipment 1 48,001 45,836Intangibleassets 1 10,530 10,884Investmentinassociate 2 2,961 2,425Loans 3 251 341Deferredtaxassets 4 871 481Employeebenefitspensions – 227*
62,614 60,194Current assetsInventories 5 25,811 26,810Incometaxreceivable 4 28Tradeandotherreceivables 6 34,267 36,013Cashandcashequivalents 7 3,486 2,933
63,568 65,784
126,182 125,978
Equity and liabilitiesEquitySharecapital 8 669 669Statutoryreserves 10,701 11,057Reserves 32,407 33,923*
43,777 45,649
Undistributedprofitattributabletoshareholders 9,792 13,480
53,569 59,129
Non-controllinginterests 130 129Undistributedprofitattributabletonon-controllinginterests 15 25
145 154
53,714 59,283Non-current liabilitiesBorrowings 9 16,391 16,609Derivativefinancialinstruments 10 246 335Employeebenefitspensions 11 6,805 –Employeebenefitsother 12 – 264Deferredtaxliabilities 13 2,212 4,198*
25,654 21,406Current liabilitiesBorrowings 9 217 268Bankoverdrafts 14 20,531 17,366Employeebenefitsother 12 285 540Provisions 15 738 3,456Incometaxpayable 1,552 444Taxesandsocialsecuritycharges 2,757 2,984Tradeandotherpayables 16 20,734 20,231
46,814 45,289
Total liabilities 72,468 66,695
126,182 125,978
* Restated in connection with change in accounting policy on pensions (IAS 19R)
Consolidated balance sheet at 31 December (€ x 1,000)
31
2013 2012*
note
Revenue 17 173,696 171,874
Costofmaterials 54,518 55,539Movementininventoriesoffinishedgoodsandworkinprogress 320 –/– 208Subcontractingandotherexternalcosts 47,704 46,490Salaries 42,626 39,639Socialsecuritycharges 18 8,612 7,584Depreciation,amortisationandimpairment 19 10,016 9,204Non-currentassetsmanufacturedin-house –/– 1,851 –/– 2,756
Total operating expenses 161,945 155,492
Operating profit 11,751 16,382
Financingincome 70 112Financingexpenses –/– 749 –/– 715Valuemovementsinderivativefinancialinstruments 90 –/–50
Net financing expenses –/– 589 –/– 653
Shareofprofitofassociate 20 723 584(aftertaxes)
Profit before taxes 11,885 16,313Taxes 21 2,078 2,808
Profit after taxes 9,807 13,505
ProfitattributabletoshareholdersofNedapN.V. 9,792 13,480Profitattributabletonon-controllinginterests 22 15 25
Profit after taxes 9,807 13,505
Averagenumberofsharesinissue 8 6,692,920 6,692,920
Earningsperordinaryshare(in€) 1.46 2.01Dilutedearningsperordinaryshare(in€) 1.46 2.01
* Effect of change in accounting policy on pensions (IAS 19R) is not material.
Consolidated income statement (€ x 1,000)
32
Financial statements Consolidated statement of comprehensive income (€ x 1,000)
2013 2012
Profit after taxes 9,807 13,505
Other comprehensive income
ItemsthatmaynotbereclassifiedtoprofitorlossRevaluationofdefined-benefitpensionobligation –/– 5,487 –/– 4,569
ItemsthatmaybereclassifiedtoprofitorlossonsubsequentrecognitionExchangegainsandlosses –/– 2 9
Other comprehensive income for the period after tax –/– 5,489 –/– 4,560
Total comprehensive income for the period 4,318 8,945
AttributabletoshareholdersofNedapN.V. 4,303 8,920Attributabletonon-controllinginterests 15 25
Total comprehensive income 4,318 8,945
33
Consolidated cash flow statement (€ x 1,000)
2013 2012
Cash flow from operating activitiesProfitaftertaxes 9,807 13,505
Adjustmentsfor:Depreciation,amortisationandimpairment 10,016 9,204Bookprofitonsaleofproperty,plantandequipment –/– 37 –/– 69Shareofprofitofassociate –/– 723 –/– 584Exchangegainsandlossesonparticipatinginterests 20 14Netfinancingexpenses 589 653Incometaxes 2,078 2,808Non-cashitems – 1,300
11,943 13,326
Movementsintradeandotherreceivables 1,729 –/– 3,177Movementsininventories 999 1,332Movementsintaxesandsocialsecuritycharges –/– 227 –/– 56Movementsintradeandotherpayables 579 2,127Movementsinemployeebenefits –/– 803 –/– 1,946Movementsinprovisions –/– 2,718 –/– 141
–/– 441 –/– 1,861
Interestpaid –/– 741 –/– 867Interestreceived 87 118Incometaxpaid –/– 1,493 –/– 889
–/– 2,147 –/– 1,638
19,162 23,332Cash flow from investing activitiesAcquisitionsofproperty,plantandequipment –/– 10,393 –/– 8,251Acquisitionsofintangibleassets –/– 1,971 –/– 2,757Proceedsfromsaleofproperty,plantandequipment 491 271Dividendreceivedfromassociate 187 1,030
–/– 11,686 –/– 9,707Cash flow from financing activitiesLong-termborrowingsdrawn – 51Long-termborrowingsrepaid –/– 269 –/– 341Loansgranted 90 –/– 341Dividendpaidtonon-controllinginterests –/– 24 –/– 1DividendpaidtoshareholdersofNedapN.V. –/– 10,106 –/– 8,232Netissueandrepurchaseofshares 243 –/– 345
–/– 10,066 –/– 9,209
Movements in cash and cash equivalents and banks –/– 2,590 4,416
Cashandcashequivalentsandbanksat1January –/– 14,433 –/– 18,844Exchangegainsandlossesoncashandcashequivalentsandbanks –/– 22 –/– 5
Cashandcashequivalentsandbanksat31December –/– 17,045 –/– 14,433
34
Financial statements
profit equity attributable attributable share statutory toshare- toshare- non-controlling total capital reserves reserves holders holders interests equity
Balanceat1Jan.2012 669 10,029 36,359 10,979 58,036 130 58,166Changeinaccountingpolicy 750 750 750
Balanceat1Jan.2012* 669 10,029 37,109 10,979 58,786 130 58,916
Dividend –/– 8,232 –/– 8,232 –/– 1 –/– 8,233Appropriationofprofit 1,019 1,728 –/– 2,747 – –Movementinshares –/– 345 –/– 345 –/– 345Movementinpensionobligation –/– 4,569 –/– 4,569 –/– 4,569Profitfortheyear 13,480 13,480 25 13,505Exchangegainsandlosses 9 9 9
Balanceat31Dec.2012* 669 11,057 33,923 13,480 59,129 154 59,283
Dividend –/–10,106 –/–10,106 –/– 24 –/–10,130Appropriationofprofit –/– 354 3,728 –/– 3,374 – –Movementinshares 243 243 243Movementinpensionobligation –/– 5,487 –/– 5,487 –/– 5,487Profitfortheyear 9,792 9,792 15 9,807Exchangegainsandlosses –/– 2 –/– 2 –/– 2
Balanceat31Dec.2013 669 10,701 32,407 9,792 53,569 145 53,714
Atyearend,thecompanyrepurchased24,527(2012:33,420)treasurysharesthathaveyettobetransferredtoemployeesundertheemployeeparticipationplan.
Thestatutoryreserveswereasfollows:
2013 2012
Capitaliseddevelopmentcosts 10,211 10,714Profitofsubsidiariesnotfreelydistributable 597 448Exchangegainsandlosses –/– 107 –/– 105
Total 10,701 11,057
* Restated in connection with change in accounting policy on pensions (IAS 19R).
Consolidated statement of changes in equity (€ x 1,000)
36
Financial statements
Accounting Policies
General
N.V.NederlandscheApparatenfabriek“Nedap”is
registeredinGroenlo,theNetherlands.The2013
consolidatedfinancialstatementscomprisethe
companyanditssubsidiaries,whotogetherform
theGroup,referredtobelowasNedap.
Nedapisamanufacturerofintelligenttechnological
solutionsrelatingtosocially-relevantthemes,
includingsufficientfood,cleandrinkingwater,
renewableenergy,securityandhealthcare.
TheSupervisoryBoardandtheBoardof
Managementapprovedthefinancialstatements
forpublicationon11February2014.Thefinancial
statementswillbesubmittedtothegeneral
meetingofshareholderson3April2014for
adoption.
Theconsolidatedfinancialstatementshavebeen
preparedinaccordancewithInternationalFinancial
ReportingStandards(IFRS)asadoptedbythe
EuropeanUnionandwithPart9ofBook2ofthe
NetherlandsCivilCode.
Thefinancialstatementsarebasedonhistorical
costunlessstatedotherwisebelow.IFRS-
compliantreportingrequiresmanagementto
makejudgements,estimatesandassumptionsthat
affecttheapplicationofaccountingpoliciesand
thereportedvalueofassets,liabilities,income
andexpenses.Theestimatesandunderlying
assumptionsarebasedonpastexperienceand
variousotherfactorswhichinthecircumstancesare
consideredfair.Theresultingoutcomesconstitute
thebasisforjudgementsonthecarryingamounts
ofassetsandliabilitiesthatcannotbesimply
derivedfromothersources.Theactualoutcomes
maydifferfromtheseestimates.Theestimatesand
underlyingassumptionsareunderconstantreview.
Revisionstoestimatesarerecognisedintheperiod
inwhichtheestimateisrevisediftherevision
onlyhasconsequencesforthatperiodorinthe
revisionperiodandfutureperiodsiftherevision
hasconsequencesforboththereportingperiod
andfutureperiods.Estimatesrelateprimarilyto
tangibleandintangibleassets,employeebenefits
andprovisions.
Change in accounting policy
FollowingtheintroductionofIAS19R,ithasnot
beenpossiblesince1January2013toapplythe
corridormethodwhendeterminingthenetpension
obligation.Thecorridormeantthatnotallgains
andlossesonthenetpensionobligationhadtobe
recognisedimmediatelywithinprofitorloss.Under
thenewstandard,allthesegainsandlosseshaveto
berecognisedimmediatelyinothercomprehensive
incomeandthroughequity.Thismandatorychange
decreasedequityby€5.5millionat31December
2013andby€4.6millionat31December
2012.Theeffectonearningsisnotmaterial.The
comparativefiguressince1January2012have
beenrestated.
Basis for consolidation
ThefinancialdataofN.V.Nederlandsche
Apparatenfabriek“Nedap”andofthesubsidiaries
listedbelow(jointlyreferredtoasNedap),
overwhichithasacontrollinginfluence,are
consolidatedinfull.Non-controllinginterestsin
equityandtheresultaredisclosedseparately.
TheconsolidationalsoincludestheStichting
MedewerkerparticipatieNedap.
The49.7%associateNedapFranceS.A.S.,
Eragny-sur-Oise,Franceisnotincludedinthe
consolidatedfinancialstatements.Therearenormal
commercialtransactionswiththisassociatewhich
areconductedonarm’slengthtermsthatare
comparabletothosegoverningtransactionswith
thirdparties.
Notes to the consolidated financial statements (€ x 1,000, unless stated otherwise)
37
Intra-groupbalances,transactionsbetween
thesecompaniesandunrealisedprofitsonsuch
transactionsareeliminatedwhenpreparingthe
consolidatedfinancialstatements.Unrealised
profitsonNedap’stransactionswiththeassociate
areeliminatedinproportiontoNedap’sinterestin
thatassociate.
Foreign currency
Thefinancialstatementsarepresentedineuros,
whichisNedap’sfunctionalandpresentational
currency.Resultsandfinancialpositionsof
consolidatedenterprisesdenominatedafunctional
currencyotherthantheeuroaretranslatedinto
euros:assetsandliabilitiesaretranslatedat
theexchangeraterulingatthereportingdate,
incomeandexpensesaretranslatedattheaverage
exchangerate.Translationgainsandlosseson
participatinginterestsaretakentothestatutory
reserves.
Transactionsdenominatedinforeigncurrencies
aretranslatedintothefunctionalcurrencyat
theexchangeraterulingonthetransactiondate.
Gainsandlossesarisingonthesettlementof
suchtransactionsarerecognisedintheincome
statement.
Financial instruments
Non-derivative financial instruments
Non-derivativefinancialinstrumentsaretrade
andotherreceivables,cashandcashequivalents,
borrowings,tradeandotherpayables,excluding
projectsinprogress.Non-derivativefinancial
instrumentsareinitiallyrecognisedatfairvalue
includingdirectlyattributabletransactioncostsand
subsequentlymeasuredatamortisedcostlessany
impairmentlosses.
Derivative financial instruments
Nedapusesinterestrateswapstohedgeinterest
raterisks.Interestrateswapsarerecognisedatfair
value.Valuationgainsandlossesarerecognised
intheincomestatementasaseparateiteminnet
financingexpenses.Nedapdoesnotusehedge
accounting.
Property, plant and equipment
Property,plantandequipmentiscarriedat
historicalcostlessaccumulateddepreciation
andimpairment.Therecognisedvalueofassets
manufacturedin-houseconsistsofexternaland
directlyattributableinternalcostsandoverheads.
Depreciation of property, plant and equipment
Depreciationisappliedonastraight-linebasis
overtheestimatedeconomiclife.Landisnot
depreciated.
NedapBeveiligingstechniekB.V.,Groenekan,theNetherlands 90% holding
NsecureB.V.,Barendrecht,theNetherlands 100% holding
InventiB.V.,Neede,theNetherlands 100% holding
NedapDeutschlandGmbH,Meerbusch,Germany 100% holding
NedapGreatBritainLtd.,Theale,Reading,UK 100% holding
NedapIberiaS.A.,Alpedrete(Madrid),Spain 90% holding
SappersIberiaS.L.,Alpedrete(Madrid),Spain 100% holdingofNedapIberiaS.A.
NedapAsiaLtd.,HongKong 100% holding
NedapChinaLtd.,Shanghai,China 100% holdingofNedapAsiaLtd.
NedapFZE,Dubai,UnitedArabEmirates 100% holding
NedapInc.,Atkinson,NewHampshire,USA 100% holding
38
Financial statements
Theannualdepreciationratesare:
Buildings 3%to10%
Machinery 13%or18%
Plant 7%or10%
Otherproperty 20%
Depreciationratesareevaluatedannuallyand
adjustedifnecessary.
Intangible assets
Research
Expenditureonresearchactivitiesisrecognisedin
theincomestatementwhenincurred.
Development
Developmentexpenditureforwhichfuture
economicbenefitscanbeestimated,thatcanbe
reliablymeasuredandthatwasnotincurredforthe
maintenanceofanexistingproductoradaptation
tonewmarketcircumstancesiscapitalised.
Developmentexpenditurebackedbycustomer
ordersisalsocapitalised.
Allotherdevelopmentexpenditureisrecognised
intheincomestatement.Capitaliseddevelopment
expenditureconsistsofexternalanddirectly
attributableinternalcostsandoverheads.
Thecapitalisedprojectsaretechnicallyfeasibleand
Nedapintendstoimplementthem.Thecompany
hasaccessto(orisabletoobtain)sufficient
technical,financialandotherresourcestofinalise
andmarkettheproductsithasdeveloped.Toa
largeextent,thecapitalisedprojectsareforlighting
andenergysystems.Otherprojectsforapplications
incattlefarmingandsecuritysystemshavealso
beencapitalised.
Capitaliseddevelopmentexpenditureischiefly
amortisedonthebasisofunitssold.
Other
Otherintangibleassetsarecarriedathistorical
costlessaccumulatedamortisation.Amortisationis
appliedonastraight-linebasisovertheestimated
economiclife.
Associate
ParticipatinginterestsoverwhichNedapexercises
significantinfluencebutnotcontroloverfinancial
andoperationalpoliciesarerecognisedusingthe
equitymethodestablishedusingtheaccounting
policiesintheconsolidatedfinancialstatements.
Deferred tax assets
Deferredtaxassetsrelatetolossesbroughtforward
andtemporarydifferencesbetweenthecarrying
amountsofassetsandliabilitiesandthetaxbases
oftheseitems.Deferredtaxassetsaremeasured,
foreachfiscalentity,atthetaxratesthatare
expectedtoapplywhentheyarerealised.
Impairment
Carryingamountsarereviewedforanyindicationof
impairmentinmid-yearandatthereportingdate.
Ifthisisthecase,theassetisrevaluedtorealisable
value,whichisthehigherofthedirectandindirect
recoverableamount.Impairmentisrecognisedin
theincomestatement.If,inasubsequentperiod,an
excessiveimpairmentprovestohavebeenapplied,
theasset’scarryingamountisincreasedtothe
reassessedrealisablevalue,butnohigherthanthe
carryingamountthatwouldhavebeenrecognised
hadtheimpairmentnotbeenrecognised.The
increaseistakendirecttotheincomestatement.
Assetsinuseandthosenotinusearereviewedfor
impairment.
Inventories
Inventoriesarerecognisedatthelowerofcost
andnetrealisablevalue.Costisestablishedusing
thefirst-in-first-outmethod(FIFO).Netrealisable
valueistheestimatedsellingpricelessestimated
coststobeincurred.Thecostofworkinprogress
39
andfinishedgoodsincludesdirectmanufacturing
costsplusamark-upforindirectmanufacturingand
purchasingcosts.Thevaluationofinventoriestakes
theriskofobsolescenceintoaccount.
Statutory reserves
Thesenon-distributablereservesareformedforthe
amountofdevelopmentcostscapitalisedonthe
balancesheet,forexchangegainsandlosseson
subsidiariesandfortheshareinsubsidiarieswhich
cannotbefreelyobtained.Statutoryreserveshave
alsobeenincludedintheconsolidatedstatement
ofchangesinequitytoensurereconciliationwith
theequityasrecognisedinthecompanyfinancial
statements.
Non-controlling interests
Thenon-controllinginterestsarerecognisedatthe
sharethattheminorityshareholdersholdinthe
equityoftheconsolidatedcompanyconcerned.
Provision for employee benefits (pension and early
retirement scheme)
Defined-contribution pension scheme
Nedaphasadefined-contributionschemefora
smallnumberofemployees.Obligationsaretaken
asanexpenseintheincomestatementinthe
periodtowhichtheyrelate.
Defined-benefit pension scheme
Nedaphasadefined-benefitschemeforthe
majorityofitsemployeesintheNetherlands.
Thisschemeprovidesfortheaccrualofapension
onthebasisofindexedaveragepayandaterm
lifeinsuranceforthesurvivingdependant’s
pension.Theimplementationoftheschemehas
beenentrustedtoaninsuranceproviderwhohas
guaranteedthedefinedbenefits.Amaximumof
25%oftheassetsareinvestedinequityfunds,the
remainderisinvestedinfixed-incomesecurities.
Thenetobligationisdeterminedbycalculating
thepresentvalueofthedefinedbenefitsand
deductingthefairvalueoftheassetsfromit.The
discountrateisthereturnatthereportingdateon
goodqualitybondswhosetermapproximatesthe
termofNedap’sobligations.Thecalculationsare
performedbyauthorisedactuariesaccordingtothe
‘projectedunitcredit’method.
Pensioncostrecognisedthroughprofitorlosseach
yearcomprisestheannualaccrualofentitlements
(servicecosts),interestexpenseontheobligations,
expectedreturnonplanassetsandotherexpenses.
Thediscountrate,setatthestartoftheyear,for
determiningthereturnonplanassets,isequalto
therateusedtocalculateinterestonthedefined
benefitliability.
Differencesbetweentheestimatedandactual
movementsandchangesinassumptionsare
recognisedimmediatelyinothercomprehensive
incomeandthroughequity.
Early retirement scheme
Thisprovisionwasformedonthegroundsofthe
earlyretirementschemeincludedinthecollective
labouragreement.Thisschemeisonlyopento
employeeswhowerebornbefore1January1950
andwhohaveindicatedthattheywishtocontinue
makinguseofit.Fromtheageof62untiltheageof
65,employeesreceive80%oftheirfinalincome,
takingaccountoftheincreaseinthecostofliving.
Theprovisioniscalculatedactuarially.
Deferred tax liabilities
Deferredtaxliabilitiesarisefromtemporary
differencesbetweenthecarryingamountsofassets
andliabilitiesandthetaxbasesoftheseitems.
Deferredtaxliabilitiesaremeasured,foreachfiscal
entity,atthetaxratesthatareexpectedtoapply
whentheyaresettled.
40
Financial statements
Provisions
Thewarrantyprovisionisforclaimsmadeby
customersunderagreedguarantees.Theterm
duringwhichacustomercanexercisethis
rightvariesbetweenproducts.Theprovisionis
recognisedonthebasisofexpenditureduringthe
yearunderreviewandtheprevioustwoyears.The
provisionsareofashort-termnature.
Revenue
Revenueisthefairvalueoftheconsideration
receivedorreceivablefromthesaleofgoodsorthe
provisionofservicestothirdpartiesarisingfrom
Nedap’snormaloperations.Revenueexcludestaxes
leviedonsalesanddiscountsgranted.
Revenuefromthesaleofgoodsisrecognisedin
theresultwhenthesignificantrisksandrewardsof
ownershipofthegoodshavebeentransferredto
thebuyer.RevenuefromgoodsinstalledbyNedap
itselfisrecognisedintheresultinproportion
tothestageofcompletionoftheinstallationon
thereportingdate.Thestageofcompletionis
determinedfromtheproportionofcostsincurred
tothetotalexpectedcosts.
Revenuefromservicesisrecognisedforeach
serviceoronastraight-linebasisovertheterm
ofthecontract.Ifservicecontractsarebilledin
advance,theseamountsarerecognisedinthe
balancesheetasamountsreceivedinadvancein
‘tradeandotherpayables’.
Subsidiesaredeductedfromotherexternalcosts
duringtheperiodtowhichtheyrelate.
Financing income and expenses
Financingincomeandexpensesareinterestand
similaritemsreceivedfromandpaidtothird
partiesandgainsandlossesoninterestrateswaps.
Financingincomeandexpensesarerecognisedin
theincomestatementusingtheeffectiveinterest
method.
Taxes
Taxesonprofitforthefinancialyearcomprise
taxespayableandreceivableforthereporting
periodandthemovementindeferredtaxes.Taxes
onprofitarerecognisedintheincomestatement
unlesstheyrelatetoitemstakendirectlytoequity,
inwhichcasetherelatedtaxisalsorecognised
inequity.Taxespayableandreceivableinthe
reportingperiodconsistofincometaxesonthe
taxableresult,whicharecalculatedonthebasisof
statutorytaxratesandtaxadjustmentsrelatingto
earlierfinancialyears.
Cash flow statement
Thecashflowstatementispreparedusingthe
indirectmethod.Cashflowsdenominatedinforeign
currenciesaretranslatedattheexchangerates
rulingonthedateofthecashfloworataverage
rates.Interestpaidandreceivedisincludedinthe
cashflowfromoperatingactivitiesanddividends
paidtoshareholdersareincludedinthecashflow
fromfinancingactivities.
Financial risk management
Nedaphasaproper,effectivecontrolsystemwhose
aimsincludeidentifyingandlimitingrisks.The
CorporateGovernancesectionsetsouttherisks
andtheriskcontrols.
Theuseoffinancialinstrumentsinvolvesthe
followingrisks:
Credit risk
CreditriskistheriskofafinanciallossbyNedapif
acustomerorcounterpartyinafinancialinstrument
failstocomplywithitsobligations.Creditrisksarise
inparticularonreceivablesfromcustomers.Nedap
reducesthisriskbyinsuringtradereceivables
wherepossible.Theriskofnon-paymentthen
lieslargelywiththecreditinsurancecompany.If
possible,securityisrequestedfromtradedebtors
whichcannotbeinsured.Ifnecessary,aprovision
fordoubtfuldebtsisformed.
41
Liquidity risk
LiquidityriskistheriskthatNedapcannotmeet
itsfinancialobligationswhentheyfalldue.Nedap
reducesthisriskbyaimingforasolvencyratio
ofabout45%,whichgivesittheabilitytodraw
temporaryadditionalcapitalifnecessary.The
maximumoverdraftis€29.3million,ofwhich
€20.5millionhadbeendrawnat31December
2013.Cashandcashequivalentsstoodat€3.5
million.
Market risk
MarketriskistheriskthatNedap’sincomeis
adverselyaffectedbychangesinmarketprices,
suchasexchangerates,andinterestrates.
Exchange rate risk
Nedapreducestheexchangerateriskbyrestricting
thesizeoftransactionsinforeigncurrenciesand,
ifnecessary,hedgingtheserisks.Theprincipal
foreigncurrencyistheUSdollar.Nettransactions
inUSdollars(onbalance,expense)werenomore
than3%ofrevenue(2012:2%).Nettransactionsin
othercurrencieswerenomorethan1%each.
Interest rate risk
Achangeof100basispointsininterestrateswould
affecttheprofitforthefinancialyearby€0.3
million(2012:€0.3million).
Capital management
Toremaindoingbusinessinawaythatstrengthens
it,Nedapusesanoperatingprofitofatleast10%
ofrevenueandareturnonequityof15%-20%
asfinancialstandards.Theinnovativenatureof
thegroupandoftenproject-orientednatureofits
orders,meansasolvencyratioofabout45%,based
onorganicgrowth,andnotcountingdividends
payableandnon-controllinginterestsinequity,is
desirable.
Since2010,NedapN.V.’semployeeshavebeen
abletoparticipateinthecompanythrough
StichtingMedewerkerparticipatieNedap.
Employeesmayusetheirprofitsharetoacquire
depositaryreceiptsforNedapshares.TheBoardof
Managementmustcontributeatleast50%oftheir
variableannualincomeaftertaxtothisStichting
inexchangefordepositaryreceipts.Nedaphasnot
grantedtheSupervisoryBoardanyrightstoacquire
Nedapshares.
AlimitedamountofthereservesofNedapIberia
S.A.arenotfreelydistributable.UnderPart9of
Book2oftheNetherlandsCivilCode,Nedapisalso
requiredtomaintainastatutoryreserveforcertain
componentsoftheDutchcompanies.
TherewerenootherchangesinNedap’scapital
managementstrategyduringtheyear.Thecompany
anditssubsidiariesarenotsubjecttoexternal
capitalrequirementsexceptasdisclosedinthese
financialstatements.
Segmentation
Nedap’slong-termpolicyfocusesoncreating
solutionswithsustainablemeaningforcustomers,
employeesandshareholders.Itwishestoachieve
thisthroughorganicgrowthinrevenueandprofit
basedonacultureorientedontheexpertise,
creativityandentrepreneurialismthatthecompany
hasbuiltupinthepastdecades.
Achievingthisobjectivenotonlyrequiresknow-
howoftechnologyandmarketconditionsbutan
increasingdegreeofknowledgeofthecustomer’s
businessprocessesandapplicationsthatour
solutionfinallygoesinto.Thefocusofactivitieson
acustomerorgroupofcustomers(marketgroup)
isasignificantconditionforcreatingagenuinely
distinctivepositioninthemarketandsustainable
solutionsforourcustomersandtheirusers,and
thusalsohavingsustainablemeaningforour
employeesandshareholders.
42
Financial statements
Thetechnologiesusedforsolutionsareclosely
relatedandthemarketgroupsmakealotofuse
ofeachother’stechnologicalknow-how,products,
systems,productionresourcesandmarketanduser
experience.ThisappliesforallofNedap’sactivities
andmarketgroups.Thisexchangeofknow-how
andresources,withoutfinancialsettlement,isan
ongoingandinformalprocessand,therefore,avital
partoftheentrepreneurialculture.
IFRS8requiresthefinancialstatementstopresent
segmentinformationthatisinaccordancewith
theinternalinformationusedbythedirectorsto
assessperformanceandallocateresources.Nedap’s
BoardofManagementassessesthecompany’s
overallresultandtheperformanceofthemarket
groupsmainlyonthebasisofitsownobservations,
day-to-daycommunicationswiththemarketgroups
anddevelopmentandmarketprospects.Decisions
aretaken,staffaredeployedandresourcesare
allocatedonthisbasis.Thisisnon-financial
information.Nedapdoesnothaveseparate
segmentsasmeantbyIFRS8.Thegeographical
distributionofproperty,plantandequipment,
intangibleassetsandrevenuesandthebreakdown
ofrevenuesintocategoriesaredisclosedinthe
financialstatementsasrequiredbyIFRS8.
New standards and interpretations not yet adopted
Anumberofnewstandardsandamendmentsto
standardsandinterpretationsonlycameintoforce
after1January2013.Theyhavenotbeenapplied
intheseconsolidatedfinancialstatements.The
standardsrelevanttoNedapareexplainedbelow.
Asinprioryears,Nedaphasnotadoptedthese
standardsearly.
IFRS10introducesanewapproachtodetermining
whetherassociates(forNedap,theFrench
participatinginterestNedapFranceS.A.S.)have
tobeconsolidated,byreferencetoauniform
modelforascertainingifcontrolisexercised
overanassociate.Nedaphasperformedaninitial
assessmentanddoesnotbelievethatthenew
standardaffectsthetreatmentofNedapFrance
S.A.S.,whereitdoesnothavecontrol.Afurther
assessmentwillbeperformedin2014.
IFRS11addressesthetreatmentof‘joint
arrangements’relatingtoparticipatinginterests.
Nedapdoesnotbelievethatthisamendedstandard
willaffectitsfinancialstatements.
Thepossibleeffectofotherstandardsand
interpretationsonNedap’sfinancialstatementsis
regardedaslimited.Thechangestodisclosuresin
thefinancialstatementsarisingfromamendments
tootherstandards,whichareexpectedtobeminor,
willbeassessedin2014.
44
Financial statements
year-end 2011:cost 39,381 29,598 53,768 1,039 123,786 15,873
amortisation,depreciationandimpairment 16,017 22,737 40,009 78,763 6,007
carryingamount 23,364 6,861 13,759 1,039 45,023 9,866
movements in 2012:additions 1,112 2,067 4,198 1,103 8,480 2,757completedassetsunderconstruction 1,039 –/– 1,039 –netdisposals –/–202 –/– 202amortisationanddepreciation –/– 1,391 –/– 1,750 –/– 4,324 –/– 7,465 –/– 1,739impairment
netmovements –/– 279 317 711 64 813 1,018
year-end 2012:cost 40,492 31,239 57,711 1,103 130,545 18,266
amortisation,depreciationandimpairment 17,407 24,061 43,241 84,709 7,382
carryingamount 23,085 7,178 14,470 1,103 45,836 10,884
movements in 2013:additions 2,436 1,222 5,117 1,536 10,311 1,971completedassetsunderconstruction 1,342 –/– 1,103 239 –/– 239netdisposals –/– 455 –/– 455amortisationanddepreciation –/– 1,471 –/– 1,821 –/– 4,638 –/– 7,930 –/– 2,086impairment
netmovements 965 –/– 599 1,366 433 2,165 –/– 354
year-end 2013::cost 42,928 31,283 58,389 1,536 134,136 16,354
amortisation,depreciationandimpairment 18,878 24,704 42,553 86,135 5,824
carryingamount 24,050 6,579 15,836 1,536 48,001 10,530
*moulds,dies,measuringandtestingequipment,furnitureandfittings,computersystemsandvehicles.
Foreigncurrencytranslationgainsandlossesareignored,giventheirsmallamount.
Property,plantandequipmentareinsuredatnew-for-oldvalue.
Amortgageof€20.0million(2012:€20.2million)hasbeengrantedonimmovablepropertyassecurityforallamountsowedtothebank.
Thelandcoversatotalareaof68,000m2,ofwhichabout5,000m2isstillavailableforbuilding.
Obligationsenteredintoattheendofthefinancialyearwere€0.2million(2012:€0.8million).
1. Property, plant and equipment and intangible assets
landandbuildings
plantandmachinery
otherequipment*
underconstruction
andprepayments
totalproperty,plantandequipment
intangibleassets
45
Geographicalinformationonthecarryingamountofproperty,plantandequipmentandintangibleassets:
2013 2012
Netherlands 54,337 52,451Germany 1,507 1,511Spain 1,677 1,741restofEurope 629 758othercountries 381 259
total 58,531 56,720
2. Investment in associate
ThisisNedapFranceS.A.S.,Eragny-sur-Oise,France.
2013 2012
netassetvalueat1January 2,425 2,871profitaftertaxes 723 584dividendreceived –/– 249 –/– 1,143othermovements 62 113
netassetvalueat31December 2,961 2,425
Keyfiguresoftheassociate,on100%basis
revenue 23,687 22,846expenses 22,233 21,668profitaftertaxes 1,454 1,178totalassetsat31December 14,325 14,837totalliabilitiesat31December 8,367 9,957
Transactionswithassociate:salesofgoodsandservicestoassociate 8,379 8,448
3. Loans 2013 2012
balanceat1January 341 –movements –/– 90 341
balanceat31December 251 341
Theloanshavebeengrantedtobusinesspartners.
46
Financial statements
4. Deferred tax assets 2013 2012
balanceat1January 481 489movements 390 –/– 8
balanceat31December 871 481
Theseareassetsofanumberofsubsidiariesandrelatetolossreliefandtemporarydifferencesbetweenthecarryingamountsandtaxbasesofassetsandliabilities.Certainlossescanbecarriedforwardindefinitelyandothersfor15years.At31December2013,therewerenotemporarydifferences,unrelievedtaxlossesorunusedtaxcreditsavailableforwhichnodeferredtaxassetshadbeenrecognised.
5 Inventories 2013 2012
rawmaterialsandcomponents 9,483 10,266workinprogress 1,236 1,274finishedgoods 15,092 15,270
total 25,811 26,810
6. Trade and other receivables 2013 2012
tradereceivables 27,573 28,669amountsowedbyassociate 1,760 2,546otherreceivables,prepaymentsandaccruedincome 4,934 4,798
total 34,267 36,013
€0.3millionofthetradeandotherreceivableshadatermofmorethanoneyear(2012:€0.3million).
Movementsinprovisionfortradereceivablesthataredeemeduncollectible:
2013 2012
balanceat1January 174 118withdrawals –/– 5 –/– 41additions – 97
balanceat31December 169 174
47
Theaveragecredittermfortradereceivableswas8weeksin2013(2012:7weeks).
Wherepossible,Nedapinsuresthecreditriskinitsreceivables,withapayoutof90%(2012:90%).PleaseseetheFinancialRiskManagementsectionforariskassessment.
7. Cash and cash equivalents 2013 2012
cash 21 12banks 3,465 2,921
total 3,486 2,933
Cashandcashequivalentsareavailableondemand.
8. Share capitalThecompany’sauthorisedsharecapitalconsistsof15,600,000ordinarysharesof€0.10nominalvalueeachand15,600,000preferencesharesof€0.10nominalvalueeach.6,692,920ordinaryshareshavebeenissued.
9. Borrowings 2013 2012
Typeofborrowing Nominalinterestrate Maturitydate
Standbyroll-over Euribor+2.6% 2015 14,000 14,000Bankloan Euribor+0.5% 2021 1,875 1,975Annuityloan Euribor+0.8% 2021 696 814Bankloan 8.3% 2014 37 88
Balanceat31December 16,608 16,877
Repaymentsduewithin1year 217 268
Repaymentsduebetween1and5years 14,732 14,757Repaymentsdueafter5years 1,659 1,852
Thefairvalueoftheborrowingsisnotmateriallydifferentfromtheiramortisedcost.
ThefinancingagreementwiththebankfortheStandbyroll-overloanexpireson1November2015anddoesnotcontainanycovenants.Securityisintheformofamortgageandapledgeoftradereceivables.
48
Financial statements
10. Derivative financial instrumentsTheriskofinterestratefluctuationsonpartoftheborrowings(€1.9million)hasbeenhedgedusinginterestrateswaps,whicharerecognisedatfairvalue.Valuationgainsandlossesarerecognisedintheincomestatementinnetfinancingexpenses.At31December2013theweightedaveragematurityofthederivativefinancialinstrumentswas5years.Theweightedaverageeffectiveinterestratewas4.2%.
2013 2012
balanceat1January 335 285valuationmovements –/– 89 50
balanceat31December 246 335
11. Employee benefits, pensions 2013 2012
fairvalueofplanassets 79,659 79,793presentvalueofobligations 86,464 79,566
surplusordeficit(-/-)infund –/– 6,805 227
Movementsinplanassets:
balanceat1January 79,793 69,837contributionspaid 3,991 3,736benefitspaid –/– 1,300 –/– 1,125expectedreturnonplanassets 2,626 2,983actuarialgainsandlosses –/– 5,451 4,362
balanceat31December 79,659 79,793
Theplanassetsconsistof:
equities 18,467 14,860fixed-incomesecurities 61,912 64,652currentaccount –/– 720 281
79,659 79,793
Movementsinobligations:
balanceat1January 79,566 64,680servicecosts 2,750 2,049interest 3,042 3,000benefitspaid –/– 1,300 –/– 1,125contributionspaidbymembers 540 508actuarialgainsandlosses 1,866 10,454
balanceat31December 86,464 79,566
49
Costsrecognisedassocialsecuritychargesintheincomestatement:
servicecosts 2,750 2,049interestcostsonobligations 3,042 3,000expectedreturnonplanassets –/– 2,626 –/– 2,983
total 3,166 2,066
Differencesbetweentheestimatedandactualmovementsandchangesinassumptionsarerecogniseddirectlyinothercomprehensiveincome.
lower/(–/–)higherreturnonplanassets 5,451 –/– 4,362actuariallossarisingfromfinancialassumptions 1,683 10,545experienceadjustment 182 –/– 1,091
7,316 5,092deferredtaxes –/– 1,829 –/– 1,273
total 5,487 3,819
Historicalinformation:
2013 2012 2011 2010
fairvalueofplanassets 79,659 79,793 69,837 56,879presentvalueofobligations 86,464 79,566 64,680 53,080
surplusordeficit(–/–)infund –/– 6,805 227 5,157 3,799
Principalactuarialassumptionsformeasuringthepensionplanatthereportingdate:
2013 2012
discountrateforpensionentitlementsat31December 3.60% 3.70%expectedreturnonplanassets 3.60% 3.70%annualsalaryincreaseforindexationofentitlements 2.00% 2.00%annualincreaseforbuilt-inoffset 2.00% 2.00%payrisesforpromotionontopoftheindexation 1.50% 1.50%
Certainotheractuarialassumptionsareused,includingtheGeneratietafel2014(-1/-1)(2012:Generatietafel2013(-1/-1)).
Achangeof0.5%inthediscountrateisexpectedtoaffectthepresentvalueoftheobligationsbyabout10%.Achangeof0.5%insalaryincreasesisexpectedtoaffectthepresentvalueoftheobligationsbyabout4%.
50
Financial statements
Nomorethan25%oftheassetsareinvestedinequities;theremainderisinfixed-incomesecurities.Inconsultationwiththepensionadministrator,whichguaranteesthepensionobligations,thefixed-incomeportfolioismadeupofunitsinfixed-incomeinvestmentfundsofacompanyassociatedwiththepensionadministrator.Thechoiceoffundsdependsonthedurationoftheobligations.Investmentinequitiesisthroughunitsinfundsofthesamecompanyassociatedwiththepensionadministrator.Thesefundsarenon-listed.
Theactualreturnontheplanassetswas-2.6%(2012:11.5%).
Theagreementwiththepensionadministratorexpiresattheendof2014andincorporatessurplusinterestsharingandafulldistributionoftheactuarialgainsandlosses.Thepensionadministratorcontinuestobeaguarantorforthepensionbenefits.
Nedapexpectstopaycontributionsof€4.2millionin2014.
12. Employee benefits, otherThisisaprovisionforearlyretiremententitlements.
2013 2012
totalpresentvalueofobligations 285 804ofwhich,ofacurrentnature 285 540
Movementsinobligations:
balanceat1January 804 1,588servicecostsandinterest 54 83benefitspaid –/– 573 –/– 867
balanceat31December 285 804
Servicecostsandinterestareincludedintheincomestatement
Historicalinformation: 2013 2012 2011 2010
presentvalueoftheobligations 285 804 1,588 2,320
Principalactuarialassumptionsatthereportingdate:
2013 2012
discountrateforearlyretiremententitlementsat31December – 2.20%annualsalaryincreaseforindexationofentitlements 2.25% 2.00%
Nedapexpectstopay€0.3millioninbenefitsin2014.
51
13. Deferred tax liabilities 2013 2012
property,plantandequipment 1,581 2,007intangibleassets 2,553 2,678inventories 138 153receivables –/– 295 –/– 155provisions –/– 1,765 –/– 485
balanceat31December 2,212 4,198
Movementsindeferredtaxliabilities:
balanceat1January 4,198 4,799takentotheresult(net) –/– 157 672takentoothercomprehensiveincome –/– 1,829 –/– 1,273
balanceat31December 2,212 4,198
Thedeferredtaxliabilitieshaveapredominantlylong-termnature.
14. Bank overdraftsThemaximumcurrentaccountoverdraftunderthefacilityis€29.3million(2012:€29.3million).
52
Financial statements
15. Provisions 2013 2012
Warrantyprovision
balanceat1January 3,456 797withdrawals –/– 4,359 –/– 1,444additions 1,641 1,303
738 656
replacementprovision – 2,800
balanceat31December 738 3,456
Theprovisionshaveapredominantlyshort-termnature.
16. Trade and other payables 2013 2012
tradepayables 7,150 7,513liabilitiesonaccountofinvestments 268 352prepayments 2,903 2,332payabletoassociate – 8otherpayables,accrualsanddeferredincome 10,413 10,026
total 20,734 20,231
Oftradeandotherpayables,€0.6millionhadatermofmorethanoneyear(2012:€0.7million).
Off-balance sheet obligationsLong-termfinancialobligationsofgroupcompanies:(in€xmillion) > 1 year and > 5 years and < 1 year < 5 years < 10 years
2013:buildingrental 0.9 1.7 0.1operatingleasesforvehicles 0.7 1.0 –operatingleasesforICT 0.2 0.8 –
2012:buildingrental 0.9 1.8 0.4operatingleasesforvehicles 0.6 0.9 –operatingleasesforICT 0.2 – –
Guaranteesissuedbygroupcompaniesinrelationtobuildingrentalwere€0.1million(2012:€0.1million)andotherguaranteeswere€0.2million(2012:€0.3million).
53
Nedapleasesvariousbusinesspremises.Theleasesusuallyhaveatermof5yearswitharenewaloption.Rentsarerevisedannually.Thereisalsoaleasing,maintenanceandmanagementcontractforhardwareandsoftware,whichexpiresattheendof2017.Thecostsarefixedperuserforthefullperiodofthecontract.Threegroupcompaniesleasetheirvehicles.
Duringtheyear,€2.1million(2012€2.3million)wasrecognisedforoperatingleasesintheincomestatement.
SomecustomershavesubmittedclaimsinrespectofwhattheyargueisNedap’snon-compliancewithcontractualobligations.Nedapbelievesthatithasmettherequirementsandwillrespondappropriately.Nedapdoesnotexpecttheclaimstohavefinancialconsequences.
Related partiesNedap’srelatedpartiesaretheassociate,NedapFranceS.A.S.,StichtingPreferenteAandelenNedapandthemembersoftheSupervisoryBoardandtheBoardofManagement.Therewerenotransactionswithrelatedpartiesduringtheyearunderreviewexceptaspresentedinthefinancialstatements.Transactionsareonarm’slengthterms.
17. Revenue 2013 2012
products,systemsandinstallations 152,743 153,839services 20,953 18,035
total 173,696 171,874
ServicescomprisemainlysubscriptionsandmaintenancecontractsforHealthcare,RetailandSecurityManagement.
Geographicalsalesareas:
Netherlands 50,028 52,738Germany 32,482 29,400restofEurope 59,304 57,132NorthAmerica 18,041 18,991othercountries 13,841 13,613
total 173,696 171,874
Largecustomers:
Nocustomerrepresentssalesinexcessof10%oftotalrevenue.
54
Financial statements
Cost of research and development 2013 2012
totalcosts 19,464 16,352depreciation/amortisationandimpairment 2,086 1,739capitalisedcosts –/– 1,971 –/– 2,757subsidies –/– 886 –/– 948
total 18,693 14,386
Average number of employees 2013 2012
Netherlands 640 607otherEU 67 67Asia 31 28USA 4 –
total 742 702
18. Social security charges 2013 2012
earlyretirement/retirementcharges,definedbenefitschemes 3,220 2,149pensioncharges,definedcontributionschemes 59 73othersocialsecuritycharges 5,333 5,362
total 8,612 7,584
Board of Management’s remuneration basic variable pension
income remuneration costs total
2013R.M.Wegman 375 133 45 553G.J.M.Ezendam 283 102 29 414
2012R.M.Wegman 337 166 36 539G.J.M.Ezendam 267 133 24 424
TheBoardofManagement’sremunerationexcludesthenon-recurring16%crisislevyforwhichanadditional€54isduetobepaidtothetaxauthoritiesforMrWegmanand€40forMrEzendam.
DetailsoftheremunerationpolicyaresetoutintheCorporateGovernancesection.On31December2013,MrWegmanheld10,853depositaryreceiptsforsharesinthecompany(2012:8,114)andMrEzendamheld8,669(2012:6,478).
55
Supervisory Board’s remunerationTotalfixedremunerationwas€130(2012:€103).
2013 2012
G.F.Kolff(from17April2012) 40 27J.M.L.vanEngelen(from16April2013) 21 –D.W.J.Theyse 30 22M.C.Westermann 30 22J.P.Bahlmann(to16April2013) 9 22A.vanderVelden(to17April2013) – 10
19. Amortisation and depreciation 2013 2012
developmentcosts 2,086 1,739buildings 1,471 1,391plantandmachinery 1,821 1,750otherequipment 4,638 4,324
total 10,016 9,204
20. Share of profit of associateThisistheshareofprofitofNedapFranceS.A.S.,Eragny-sur-Oise,France.
56
Financial statements
21. Taxes 2013 2012
profitbeforetaxes,excludingassociate 11,162 15,729
incometax 2,619 2,128deferredtax –/– 541 680
totalincometax 2,078 2,808
Reconciliationofeffectivetaxrate:
2013 2012
IncometaxbasedontheDutchtaxrate 2,791 25.0% 3,932 25.0%changeindomestictaxrate –/– 23 –/– 0.2% –/– 30 –/– 0.2%effectoftaxrateonnon-residentsubsidiaries –/– 28 –/– 0.3% –/– 89 –/– 0.6%non-deductibleexpenses 71 0.6% 75 0.5%fiscalincentiveschemes –/– 753 –/– 6.7% –/– 1,070 –/– 6.8%prior-yearadjustment 20 0.2% –/– 10 0.0%
total 2,078 18.6% 2,808 17.9%
22. Profit attributable to non-controlling interestsTheportionofthenetresultofsubsidiariesattributabletominorityshareholders.
58
Financial statements
2013 2012
Assets noteNon-current assetsProperty,plantandequipment 1 33,726 33,222Intangibleassets 1 10,211 10,714Financialassets 2 13,494 13,374*Loans 3 251 341Employeebenefits – 1,062*
57,682 58,713Current assetsInventories 4 10,657 15,709Tradeandotherreceivables 5 38,831 34,004Cashandcashequivalents 6 533 405
50,021 50,118
107,703 108,831
Equity and liabilities
Equity 7Sharecapital 669 669Statutoryreserves 10,701 11,057Reserves 32,407 33,923*
43,777 45,649
Resultfortheyear 9,792 13,480
53,569 59,129
Provisions 8 8,534 8,617*
Non-current liabilities 9 14,000 14,000
Current liabilities 10 31,600 27,085
Total liabilities 54,134 49,702
107,703 108,831
Income statement of Nedap N.V.(€x1,000) 2013 2012
Netprofitofassociates 2,987 2,286Othernetresults 6,805 11,194
Profitattributabletoshareholders 9,792 13,480
* Restated in connection with change in accounting policy on pensions (IAS 19R).
Balance sheet of Nedap N.V. at 31 December (€ x 1,000)
59
Accounting policies
PursuanttoSection362(8)ofBook2oftheNetherlandsCivil
Code,Nedapmakesuseoftheoptiontopreparecompany
financialstatementsinaccordancewiththeaccounting
policiesusedfortheconsolidatedfinancialstatementsand
inaccordancewithPart9ofBook2oftheNetherlandsCivil
Code.Byusingthisoption,thereconciliationbetweenthe
consolidatedequityandtheequityinthecompanyfinancial
statementsismaintained.
UseismadeoftheoptionpursuanttoSection402ofBook2
oftheNetherlandsCivilCodetopublishanabridgedseparate
companyincomestatement.
Theconsolidatedfinancialstatementshavebeenpreparedin
accordancewithInternationalFinancialReportingStandards
(IFRS)asadoptedbytheEuropeanUnion.Pleaseseethe
notesontheaccountingpoliciesfortheconsolidated
financialstatementsforadescriptionoftheaccounting
policiesrelatingtothesestandards.
FinancialassetsincludetheNedapgroup’ssubsidiariesand
associateswheresignificantinfluencecanbeexercised
overthecommercialandfinancialpolicy.Thesubsidiaries
andassociatesarerecognisedusingtheequitymethod
establishedusingtheaccountingpoliciesintheconsolidated
financialstatements.Associateswithanequitydeficitare
carriedatnil.Theequitydeficitisdeductedfromamounts
receivablefromtheseassociates.Theequityofsubsidiariesis
increasedbythevalueofloansgrantedtothemmeasuredat
amortisedcost.
Notes to the financial statements of Nedap N.V.(€ x 1,000, unless stated otherwise)
60
Financial statements
year-end 2011:cost 31,911 26,499 47,578 1,039 107,027 14,841
amortisation,depreciationandimpairment 14,943 20,968 36,988 72,899 5,191
carryingamount 16,968 5,531 10,590 1,039 34,128 9,650
movements in 2012:additions 127 1,021 2,876 1,103 5,127 2,650completedassetsunderconstruction 1,039 –/–1,039 –netdisposals –/–183 –/–183amortisationanddepreciation –/– 1,079 –/– 1,463 –/– 3,307 –/– 5,849 –/–1,586impairment netmovements –/–952 –/–442 425 64 –/–905 1,064
year-end 2012:cost 32,038 27,094 50,368 1,103 110,603 17,127
amortisation,depreciationandimpairment 16,022 22,005 39,354 77,381 6,413
carryingamount 16,016 5,089 11,014 1,103 33,222 10,714
movements in 2013:additions 2,263 698 3,105 1,536 7,602 1,734completedassetsunderconstruction 1,342 –/– 1,103 239 –/–239netdisposals –/– 1,072 –/–702 –/– 1,774amortisationanddepreciation –/– 1,127 –/– 1,020 –/– 3,416 –/– 5,563 –/– 1,998impairment
netmovements 1,136 –/– 1,394 329 433 504 –/–503
year-end 2013:cost 34,301 23,163 48,632 1,536 107,632 14,978amortisation,depreciationandimpairment 17,149 19,468 37,289 73,906 4,767
carryingamount 17,152 3,695 11,343 1,536 33,726 10,211
*moulds,dies,measuringandtestingequipment,furnitureandfittings,computersystemsandvehicles.
1. Property, plant and equipment and intangible assets
landandbuildings
plantandmachinery
otherequipment*
underconstruction
andprepayments
totalproperty,plantandequipment
intangibleassets
61
Property,plantandequipmentareinsuredatnew-for-oldvalue.
Amortgageof€16.4million(2012:€16.4million)hasbeengrantedonimmovablepropertyassecurityforallamountsowedtothebank.
Thelandcoversatotalareaof61,000m2,ofwhichabout5,000m2isstillavailableforbuilding.
Obligationsenteredintoattheendofthefinancialyearwere€0.2million(2012:€0.6million).
2. Financial assets 2013 2012
Subsidiaries:
valueat1January 10,949 9,780profit 2,243 1,662profitdistribution –/– 1,709 –/–922movementinamountsowedbysubsidiaries 419 1,234foreignexchangegainsandlosses –/– 2 9othermovements –/– 358 –/–20
valueat31December 11,542 11,743
newloansgrantedtosubsidiaries – 350loanrepaymentsbysubsidiaries –/– 1,009 –/–1,144
totalvalueat31December 10,533 10,949
Totalloansgrantedtosubsidiariesat31December2013:€4.5million(2012:€5.5million).Suretyof€1.7millionhasbeenprovidedonimmovablepropertyinrelationtotheaboveloans.
Associate:
valueat1January 2,425 2,871profit 723 584profitdistribution –/– 249 –/–1,143othermovements 62 113
valueat31December 2,961 2,425
totalfinancialassetsat31December 13,494 13,374
62
Financial statements
3. Loans 2013 2012
balanceat1January 341 –movements –/– 90 341
balanceat31December 251 341
Theloanshavebeengrantedtobusinesspartners.
4. Inventories 2013 2012
rawmaterialsandcomponents 2,321 6,596workinprogress 417 553finishedgoods 7,919 8,560
total 10,657 15,709
5. Trade and other receivables 2013 2012
tradereceivables 14,425 16,697amountsowedbysubsidiariesandassociate 21,321 14,232otherreceivables,prepaymentsandaccruedincome 3,085 3,075
total 38,831 34,004
Oftradeandotherreceivables,€0.2millionhadatermoflongerthanoneyear(2012:€0.1million).
6.Cash and cash equivalents 2013 2012
cash 15 7banks 518 398
total 533 405
Cashandcashequivalentsareavailableondemand.
7. EquityPleaseseetheconsolidatedstatementofchangesinequity.
63
8. Provisions 2013 2012
employeebenefits,pensions 5,413 –employeebenefits,other 285 804deferredtaxliabilities 2,212 4,456warranty 624 557replacement – 2,800
total 8,534 8,617
Employee benefits, pensions 2013 2012
fairvalueofplanassets 74,550 75,016presentvalueofobligations 79,963 73,954
surplusordeficit(–/–)inthefund –/– 5,413 1,062
Movementsinplanassets:
balanceat1January 75,016 66,945contributionspaid 3,613 3,341benefitspaid –/– 1,300 –/–1,125expectedreturnonplanassets 2,454 2,860actuarialgainsandlosses –/– 5,233 2,995
balanceat31December 74,550 75,016
Theplanassetsconsistof:
equities 17,283 13,970fixed-incomesecurities 57,941 60,781currentaccount –/– 674 265
74,550 75,016
Movementsinobligations:
balanceat1January 73,954 61,060servicecosts 2,377 1,811interest 2,818 2,823benefitspaid –/– 1,300 –/–1,125contributionspaidbymembers 471 443actuarialgainsandlosses 1,643 8,942
balanceat31December 79,963 73,954
64
Financial statements
Historicalinformation: 2013 2012 2011 2010
fairvalueofplanassets 74,550 75,016 66,945 54,223presentvalueofobligations 79,963 73,954 61,060 50,007
surplusordeficit(–/–)inthefund –/– 5,413 1,062 5,885 4,216
Pleaseseethenotestotheconsolidatedfinancialstatementsfortheprincipalactuarialassumptionsformeasuringthepensionplan.
Employee benefits, otherPleaseseethenotestotheconsolidatedfinancialstatements.
65
Deferred tax liabilities 2013 2012
property,plantandequipment 1,581 2,007intangibleassets 2,553 2,678inventories 138 153receivables –/– 295 –/–232provisions –/– 1,765 –/–150
total 2,212 4,456
Movementsindeferredtaxliabilities:
balanceat1January 4,456 4,728takentotheprofit(net) –/– 525 666takentoothercomprehensiveincome –/– 1,719 –/– 938
balanceat31December 2,212 4,456
Thedeferredtaxliabilitieshaveapredominantlylong-termnature.
Warranty provision 2013 2012
balanceat1January 557 688withdrawals –/– 1,445 –/–1,366additions 1,512 1,235
balanceat31December 624 557
Thewarrantyprovisionhasapredominantlyshort-termnature.
9. Non-current liabilities 2013 2012
borrowings 14,000 14,000
66
Financial statements
BorrowingsThisisacreditfacilitywithaceilingof€14.0millionendingon1November2015,underwhichamountsofatleast€0.5millioncanbewithdrawnforatermofnolessthan1monthandnomorethan12months.TheinterestrateisEuriborplus2.6%.
10. Current liabilities 2013 2012
bankoverdrafts 18,457 13,649taxesandsocialsecuritycharges 2,552 1,725tradeandotherpayables,accrualsanddeferredincome 10,591 11,711
total 31,600 27,085
€0.5millionofthetradeandotherpayableshadatermlongerthanoneyear(2012:€0.5million).
Bank overdraftsThemaximumcurrentaccountoverdraftunderthefacilityis€25million(2012:€25million).
Trade and other payables 2013 2012
tradepayables 2,668 3,641liabilitiesonaccountofinvestments 236 316prepayments 849 894otherpayables,accrualsanddeferredincome 6,838 6,860
total 10,591 11,711
67
Off-balance sheet obligationsBankguaranteesof€1.7millionhavebeenissuedforgroupcompanies.
NedapN.V.andInventiB.V.formafiscalunityforcorporateincometaxpurposesandsoeachcompanyisjointlyandseverallyliableforthepaymentofthecorporateincometaxdue.
NedapN.V.hasassumedjointandseveralliabilityforthedebtsarisingfromthejuristicactsofInventiB.V.pursuanttoSection403ofBook2oftheNetherlandsCivilCode.
Audit feesThisitemrelatestothetotalfeeforservicesprovidedbyKPMGAccountantsN.V.
2013 2012
auditofthefinancialstatements 137 136otherservices 3 4
total 140 140
Groenlo,11February2014
TheBoardofManagement TheSupervisoryBoard
R.M.Wegman G.F.Kolff,chairmanG.J.M.Ezendam M.C.Westermann,vice-chairman J.M.L.vanEngelen D.W.J.Theyse
68
Financial statements
Tothebestofourknowledge,
1 thefinancialstatements(includingtheOther
informationpursuanttoSection392ofBook2ofthe
NetherlandsCivilCode)giveatrueandfairviewof
theassets,liabilities,financialpositionandprofitor
lossofNedapN.V.andtheundertakingsincludedin
theconsolidationtakenasawhole;and
2 thereportoftheBoardofManagementincludesa
fairreviewofthepositionat31December2013and
thedevelopmentandperformanceofthebusiness
duringthefinancialyear2013ofNedapN.V.andthe
undertakingsincludedintheconsolidationtakenasa
wholeandthe2013reportdescribestherisksfacing
NedapN.V.
Groenlo,11February2014
TheBoardofManagement:
R.M.Wegman
G.J.M.Ezendam
Statement pursuant to Section 5:25c(2c) of the Financial Supervision Act
70
Other Information
Report on the audit of the financial statements
Opinion with respect to the consolidated financial
statements
Inouropinion,theconsolidatedfinancial
statementsgiveatrueandfairviewofthefinancial
positionofN.V.NederlandscheApparatenfabriek
“Nedap”asat31December2013andofitsresult
anditscashflowsfortheyearthenendedin
accordancewithInternationalFinancialReporting
StandardsasadoptedbytheEuropeanUnion(EU-
IFRS)andwithPart9ofBook2oftheNetherlands
CivilCode.
Opinion with respect to the company financial
statements
Inouropinion,thecompanyfinancialstatements
giveatrueandfairviewofthefinancialpositionof
N.V.NederlandscheApparatenfabriek“Nedap”as
at31December2013andofitsresultfortheyear
thenendedinaccordancewithPart9ofBook2of
theNetherlandsCivilCode.
Our engagement
Wehaveauditedthe2013financialstatements
ofN.V.NederlandscheApparatenfabriek“Nedap”,
Groenlo(“theCompany”).Thefinancialstatements
includetheconsolidatedfinancialstatementsand
thecompanyfinancialstatements.Theconsolidated
financialstatementscomprisetheconsolidated
balancesheetasat31December2013,the
consolidatedincomestatement,theconsolidated
statementofcomprehensiveincome,the
consolidatedstatementofchangesinequity,the
consolidatedcashflowstatementandthenotes,
comprisingasummaryofsignificantaccounting
policiesandotherexplanatoryinformation.The
companyfinancialstatementscomprisethe
companybalancesheetasat31December2013,
thecompanyincomestatementandthenotes,
comprisingasummaryoftheaccountingpolicies
andotherexplanatoryinformation.
Basis for our opinion
WeconductedourauditinaccordancewithDutch
law,includingDutchStandardsonAuditing.Our
responsibilitiesunderthosestandardsarefurther
describedinthesectionOurresponsibilityforthe
auditofthefinancialstatementsofourreport.
WeareindependentoftheCompanywithinthe
meaningoftherelevantDutchethicalrequirements
asincludedinthe“Verordeningopdegedrags-
enberoepsregelsaccountants”(VGBA)andthe
“Verordeninginzakedeonafhankelijkheidvan
accountants”(ViO)andhavefulfilledourother
responsibilitiesunderthoseethicalrequirements.
Webelievethattheauditevidencewehave
obtainedissufficientandappropriatetoprovidea
basisforouropinion.
Key audit matters
Keyauditmattersarethosemattersthat,inour
professionaljudgment,wereofmostsignificance
inourauditofthefinancialstatements.Key
auditmattersareselectedfromthematters
communicatedwiththeBoardofManagement
andtheSupervisoryBoardbutarenotintended
torepresentallmattersthatwerediscussedwith
them.
Ourauditproceduresrelatingtothesematterswere
designedinthecontextofourauditofthefinancial
statementsasawhole.Ouropiniononthefinancial
statementsisnotmodifiedwithrespecttoanyof
thekeyauditmattersdescribedbelowandwedo
notexpressanopinionontheseindividualmatters.
Sensitivities with respect to the valuation of
intangible assets
Thevaluationofintangibleassetswassignificant
toourauditasitrequiresestimatesthatareto
someextentcomplexandsubjectiveandbasedon
assumptions.Assessingthevaluationofintangible
assetsatthereportingdaterequiressomeextentof
professionaljudgement,inparticularontheissue
ofwhetherthecriteriaforcapitalisationhavebeen
Independent auditor’s report
71
met(seetheaccountingpoliciesforintangible
assetsinthefinancialstatementsfordetailsof
thesecriteria)andtoestimatetherecoveryperiod
andrelatedamortisationmethod.Some40%of
thecarryingamountofcapitaliseddevelopment
projectsrelatestoEnergySystems.
WeassessedtheprocessthattheCompanyusesto
determinewhichdevelopmentprojectsqualifyfor
capitalisation.Weassessedtheinternalcontrolsfor
capitaliseddevelopmentprojectswithasignificant
carryingamount,discussedwithstaffinthemarket
groupsandperformedauditproceduresoncapital
expenditureandamortisation.Wealsoevaluated
management’sassessmentofthecapitalisation
criteriaandestimatesofrecoverability,amongst
othersbasedinpartonbudgets,businesscases,
historicaldataandinformationandinterviews
withthestaffreferredtoaboveandtheBoardof
Management.
Scope of our group audit
Weplannedourauditusingarisk-basedapproach.
Weconsideredbothqualitativeandquantitative
factorswhenselectingtheindividualgroupentities
andassociateswherewerequestlocalauditors
toperformauditproceduresforus.Thegroup
auditteamevaluatesthelocalauditors’planning,
findingsandconclusionstoestablishwhether
wecanrelyontheirwork.Inaddition,wehave
arotatingprogrammeofsitevisitstoassessthe
qualityofthelocalauditsassupportforourability
torelyontheworkofthelocalauditors.
Going concern
TheCompany’sfinancialstatementshavebeen
preparedonthegoingconcernbasisofaccounting.
Theuseofthisbasisofaccountingisappropriate
unlesstheBoardofManagementeitherintends
toliquidatetheCompanyorceaseoperationsor
hasnorealisticalternativebuttodoso.Aspartof
ourauditofthefinancialstatements,weconcur
withtheBoardofManagement’suseofthegoing
concernbasisofaccountingwhenpreparingthe
financialstatements.
TheBoardofManagementhasnotidentifieda
materialuncertaintythatmaycastsignificantdoubt
ontheCompany’sabilitytocontinueasagoing
concernandaccordinglynoneisdisclosedinthe
financialstatements.Basedonourauditofthe
financialstatements,wealsohavenotidentified
suchamaterialuncertainty.However,neither
theBoardofManagementnortheauditorcan
guaranteetheCompany’sabilitytocontinueasa
goingconcern.
Responsibilities of the Board of Management and
the Supervisory Board for the financial statements
TheBoardofManagementisresponsiblefor
thepreparationandfairpresentationofthese
financialstatementsinaccordancewithEU-IFRS
andwithPart9ofBook2oftheNetherlands
CivilCodeandforthepreparationoftheannual
reportinaccordancewithPart9ofBook2ofthe
NetherlandsCivilCode.TheBoardofManagement
isalsoresponsibleforsuchinternalcontrolasit
determinesisnecessarytoenablethepreparation
offinancialstatementsthatarefreefrommaterial
misstatement,whetherduetofraudorerror.The
SupervisoryBoardisresponsibleforoverseeingthe
Company’sfinancialreportingprocess.
Our responsibility for the audit of the financial
statements
Theobjectivesofourauditaretoobtainreasonable
assuranceaboutwhetherthefinancialstatements
asawholearefreefrommaterialmisstatement,
whetherduetofraudorerror,andtoissue
anauditor’sreportthatincludesouropinion.
Reasonableassuranceisahighlevelofassurance,
butisnotaguarantee,thatanauditconductedin
accordancewithDutchStandardsonAuditingwill
alwaysdetectamaterialmisstatementwhenit
exists.Misstatementscanarisefromfraudorerror
andareconsideredmaterialif,individuallyorin
72
Other InformationProvisions of the Articles of Association concerning the appropriation of profit in accordance with Article 45
aggregate,theycouldreasonablybeexpectedto
influencetheeconomicdecisionsofuserstakenon
thebasisofthesefinancialstatements.
AspartofanauditinaccordancewithDutch
StandardsonAuditing,weexerciseprofessional
judgementandmaintainprofessionalscepticism
throughouttheplanningandperformanceofthe
audit.Wealso:
• identifyandassesstherisksofmaterial
misstatementofthefinancialstatements,whether
duetofraudorerror,designandperformaudit
proceduresresponsivetothoserisksandobtain
auditevidencethatissufficientandappropriate
toprovideabasisforouropinion.Theriskofnot
detectingamaterialmisstatementresultingfrom
fraudishigherthanforoneresultingfromerror,
asfraudmayinvolvecollusion,forgery,intentional
omissions,misrepresentationsortheoverrideof
internalcontrol.
• obtainanunderstandingofinternalcontrol
relevanttotheauditinordertodesign
auditproceduresthatareappropriateinthe
circumstancesbutnotforthepurposeofexpressing
anopinionontheeffectivenessoftheCompany’s
internalcontrol.
• evaluatetheappropriatenessofaccounting
policiesusedandthereasonablenessofaccounting
estimatesandrelateddisclosuresmadebythe
BoardofManagement.
• evaluatetheoverallpresentation,structureand
contentofthefinancialstatements,includingthe
disclosures,andwhetherthefinancialstatements
representtheunderlyingtransactionsandeventsin
amannerthatachievesatrueandfairview.
• obtainsufficientappropriateauditevidence
regardingthefinancialinformationofthecompany
andbusinessactivitieswithinthecompanyto
expressanopiniononthefinancialstatements.
Weareresponsibleforthedirection,supervision
andperformanceoftheaudit.Weremainsolely
responsibleforourauditopinion.
Wearerequiredtocommunicatewiththe
SupervisoryBoardregarding,amongothermatters,
theplannedscopeandtimingoftheauditand
significantauditfindings,includinganysignificant
deficienciesininternalcontrol,thatweidentify
duringouraudit.
WearealsorequiredtoprovidetheSupervisory
Boardwithastatementthatwehavecomplied
withrelevantethicalrequirementsregarding
independenceandtocommunicatetoit
allrelationshipsandothermattersthat
mayreasonablybethoughttobearonour
independenceand,whereapplicable,related
safeguards.
Report on the annual report and other information
PursuanttothelegalrequirementsinPart9of
Book2oftheNetherlandsCivilCoderegardingour
responsibilitytoreportontheannualreportand
theotherinformation:
• wehavenodeficienciestoreportasaresult
ofourexaminationofwhethertheannualreport,
totheextentwecanassess,hasbeenpreparedin
accordancewithPart9ofBook2ofthisCodeand
whethertheotherinformationasrequiredbyPart9
ofBook2hasbeenannexed.
• wereportthattheannualreport,totheextent
wecanassess,isconsistentwiththefinancial
statements.
11February2014
KPMGAccountantsN.V.
E.J.L.vanLeeuwen
73
Paragraph1:
Theportionofprofit-thepositivebalanceinthe
incomestatement-tobeallocatedtothereserves
shallbedeterminedeachyearbytheBoardof
ManagementandtheSupervisoryBoard.
Paragraph2:
Adividendshallbepaidonthepreferenceshares
fromtheprofitremainingaftertheallocationtothe
reservesasreferredtointhepreviousparagraph,
equivalenttoapercentageequaltothesumof
theweightedaveragesofthedepositinterest
rateoftheEuropeanCentralBank-weighted
bythenumberofdaysforwhichthedividendis
paid-plusthreepercent(3%).Thedividendon
preferencesharesshallbecalculatedonthe
paid-upportionofthenominalamount.If,inany
year,theprofitisinsufficienttopaythedividendon
thepreferencesharespursuanttothefirstsentence
ofthisclause,theshortfallshallasfaraspossible
bepaidoutofthefreelydistributableportionof
equity.
Paragraph3:
Anyremainingprofitshallbedistributedasa
dividendonordinaryshares.
Paragraph5:
Ifalossisincurredinanyyear,nodividendshall
bedistributedforthatyear.Dividendsmaynotbe
distributedinsubsequentyearsuntilthelosshas
beenextinguishedbyprofits.TheGeneralMeeting
mayhoweverresolve,uponajointproposalofthe
SupervisoryBoardandtheBoardofManagement,
toextinguishsuchalossbychargingittothe
distributablepartofequity.
Appropriation of profit
€x1,000
Profitattributabletoshareholders 9,792
Otherreserves 2,430
Dividendpayable
ontheordinaryshares 7,362
Branches
Naamlozevennootschap'Nederlandsche
ApparatenfabriekNedap',Vilvoorde,Belgium
(tradingname:NedapBelgië).
74
Miscellaneous
2013 2012 2011 2010 2009
Operations€x1,000
Revenue 173,696 171,874 152,345 133,558 115,191
Salariesandsocialsecuritycharges 51,238 47,223 43,729 40,186 38,443
Operatingprofit 11,751 16,382 13,885 10,621 1,981-as%ofrevenue 6.8 9.5 9.1 8.0 1.7
Netfinancingexpenses 589 653 934 800 1,084
Profitaftertaxes 9,807 13,505 10,989 8,765 1,114-as%ofequity1) 21.2 27.5 21.7 18.5 2.4-as%ofrevenue 5.6 7.9 7.2 6.6 1.0
Depreciation/amortisation 10,016 9,204 8,063 7,857 7,563
Cashflow2) 19,823 22,709 19,052 16,622 8,677
Addedvalueperemployee3) 160 166 152 143 121
Profit appropriation€x1,000
Profitdistributabletoshareholders 7,362 10,106 8,232 6,559 937Retainedprofit 2,430 3,374 2,747 2,159 120Profitattributabletonon-controllinginterests 15 25 10 47 57
Per share van € 0.10 4)
in€
Cashflow 2.96 3.39 2.85 2.48 1.30Earningsattributabletoshareholders 1.46 2.01 1.64 1.30 0.16Dividend 1.10 1.51 1.23 0.98 0.14
Highestprice 33.66 29.64 25.70 24.59 19.24Lowestprice 27.65 19.77 18.17 16.69 14.50Priceatyear-end 30.00 29.30 20.01 24.00 17.30Price/earningsratioyear-end 21 15 12 18 –
Number of employees
Atyear-end 744 709 684 652 601Averageduringtheyear 742 702 673 632 652
Five-year summary
75
2013 2012 2011 2010 2009
Financing€x1,000
Sharecapital 669 669 669 669 669Reserves 43,108 44,980* 47,138* 44,450* 45,429
Equityexcludingundistributedprofit 43,777 45,649 47,807 45,119 46,098
Undistributedprofitattributabletoshareholders 9,792 13,480 10,979 8,718 1,057Non-controllinginterests 130 129 120 129 149Undistributedprofitattributabletonon-controllinginterests 15 25 10 47 57
Equity 53,714 59,283 58,916 54,013 47,361
Non-currentliabilities 25,654 21,406* 22,986* 22,694* 22,437
Currentliabilities 46,814 45,289 45,340 36,964 33,677
Total 126,182 125,978 127,242 113,671 103,475
Equity1)as%oftotalassets 36.6 38.9 39.7 41.6 44.7
Utilisation of capital€x1,000
Non-currentassets 62,614 60,194* 63,406* 57,647* 57,725*
Inventories 25,811 26,810 28,142 21,635 18,718Tradeandotherreceivables 34,271 36,041 32,360 30,022 23,671Cashandcashequivalents 3,486 2,933 3,334 4,367 3,361
Currentassets 63,568 65,784 63,836 56,024 45,750
Total 126,182 125,978 127,242 113,671 103,475
Additionstonon-currentassets 12,282 11,237 12,434 9,038 8,087
Inventoriesas%ofrevenue 14.9 15.6 18.5 16.2 16.2
Averagecredittermsfortradereceivablesinweeks 8 7 8 7 8
1) equity is exclusive of dividend payable and non-controlling interests
2) cash flow represents profit after taxes plus depreciation and amortisation
3) added value per employee is total revenue and movements in inventories less the cost of
materials divided by the average number of employees
4) 6,692,920 shares are in issue.
* Restated in connection with a change in the pension accounting principles (IAS 19R)
76
Miscellaneous
(At11February2014)
N.V. Nederlandsche R.M.Wegman(47)
Apparatenfabriek “Nedap’’ G.J.M.Ezendam(61)
Parallelweg2
7141DCGroenlo
TheNetherlands
Market groups
EnergySystems W.D.Klunder(35)
Healthcare G.J.W.Droppers(44)
IdentificationSystems M.C.Mijwaart(40)
LibrarySolutions W.D.Klunder(35)
LightControls J.Somsen(49)
LivestockManagement A.B.M.Verstege(51)
Retail R.Schuurman(44)
SecurityManagement R.M.Wegman(47),interim
CIMPL P.G.M.Oostendorp(50)
Inventi A.G.M.Scharenborg(58)
M.G.M.Hoitink-teWoerd(42)
Nedap Belgium T.Elferink(30)
Maria-Theresialaan2.0.1
1800Vilvoorde
Belgium
Nedap Beveiligingstechniek B.V. E.Groeskamp(52)
Groenekanseweg24A
3737AGGroenekan
TheNetherlands
Inventi B.V. R.M.Wegman(47)
Industrieweg20
7161BXNeede
TheNetherlands
Nsecure B.V. J.vanDriel(53)
Lübeck1
2993LKBarendrecht
TheNetherlands
Nedap France S.A.S. C.Paijens(54)
8-10Chemind’Andrésy A.Sot(58)
95610EragnysurOise
France
Companies and management
77
Nedap Deutschland GmbH I.A.C.vanBalveren(47)
Otto-Hahn-Strasse3
40670Meerbusch
Germany
Nedap Great Britain Ltd. E.Groeskamp(52)
1310WatersideArlington
BusinessPark
RG74SAThealeReading
Berkshire
GreatBritain
Nedap Iberia S.A. A.CarmonaBadillo(54)
AvenidadelosLlanos18
28430AlpedreteMadrid
Spain
Nedap China Ltd. H.D.Kranenberg(54)
Room2507,LongemontYesTower
No.369KaixuanRoad
200051Shanghai
China
Nedap Asia Ltd. H.D.Kranenberg(54)
AustinPlaza
15F,Units3&4No83,AustinRoad
Kowloon
HongKong
Nedap FZE J.B.F.vanderWillik(30)
DSOHeadQuarters,D-205
DubaiSiliconOasis
Dubai
UnitedArabEmirates
Nedap Inc. G.J.M.Ezendam(61)
14AIndustrialWay
NH03811Atkinson
USA
78
Corporate Governance
Nedap
Nedaphasanopen,innovativeandcreative
cultureorientedtowardsdevelopmentand
entrepreneurship.
Nedapisamanufacturerofintelligenttechnological
solutionsrelatingtosociallyrelevantthemes,
includingsufficientfood,cleandrinkingwater,
sustainableenergy,securityandhealthcare.
Itconcentratesonmarketsegmentswhereits
technologicalknow-how,marketknowledgeand
knowledgeofthecustomer’sbusinessprocesscan
createaddedvalueforthecustomer.Thesemarket
segmentsareapproachedthroughthecompany’s
ownsaleschannelsaswellasthroughthirdparties.
Thecompanyisorganisedintomarketgroups.
Eachgroupdevelopsanddeliverssolutionsand
possessesknowledgeinthefieldsoftechnology,
marketsandcustomerbusinessprocesses.Staff
arechallengedtodisplayentrepreneurship,take
responsibilityanddeveloptheirtalents.
Thetechnologiesusedforthevarioussolutions
arecloselyrelatedsothatthemarketgroupsuse
andshareeachother’stechnologicalknow-how,
products,systemsandmarketexperience.
Particularattentionisdevotedtocreatingdistinctive
valueintheproductsandsystemstobesold,aswell
astheassociatedservices.Theprofessionalisation
andinternationalisationofsalesarealsohigh
priorities.
ThemainsalesmarketisstillEurope,butsales
outsideEurope,includingtheUnitedStatesand
Asia,aredeveloping.
Tocontinueoperatinginamannerthatmakes
Nedapstrong,itpursuesanoperatingprofitofat
least10%ofrevenueandareturnonequityof
15%-20%asfinancialnorms.Thedividendpolicy,
whichresultsfromthefinancialpolicy,istopayout
theentireprofittoshareholderslessanyadditions
toreservesthatarenecessarytomaintainsolvency
attherequiredlevel.Theinnovativenatureof
Nedapandoftenproject-orientednatureofits
orders,meansasolvencyratioofabout45%,based
onorganicgrowth,notincludingundistributed
profitsinequity,isdesirable.
Long-term policy
Nedap’slong-termpolicyisaimedatcreating
sustainableaddedvalueforcustomers,staff
andshareholders.Itwantstoachievethis
throughorganicgrowthinrevenueandprofit
withdiversificationandinnovation,basedon
thecompany’sexpertise,playingacentralrole.
Diversificationintodifferentmarketsegmentsnot
onlyopensupnewgrowthopportunities,butalso
makesthecompanylessdependentoneconomic
trendswithinasinglemarket.Innovationisthebasis
fordeliveringaddedvaluetothecustomer:the
customer’sperceptionofwhatthesolutionisworth
incomparisonwithwhatcompetitorsoffer.Nedap
consequentlypresentsitselfinadistinctmanner
withinthevariousmarkets.
Thedistinctivestrengthofthesolutionsoffered
byNedapenablesthecompanytooccupyitsown
placeinagivenmarketandensuresthatitneed
notcompeteexclusivelyonthebasisofprice.
Theaddedvalueperemployeeindicatesthe
extenttowhichcustomersacceptthedistinctive
strengthofNedap’ssolutionsandthusreflectsthe
inventivenessandeffectivenessoftheorganisation.
Growthinaddedvalue(revenueminusmaterials)
andaddedvalueperemployeearethereforekey
priorities.
Responsibilities
Aspecialattitudemustbeembeddedthroughout
theentireorganisationinordertosustain
thecompany’suniquecharacterandpolicy.
Diversificationandinnovationaredelicateprocesses
whereprematureactioncanbejustasharmfulas
79
lateintervention.Forthe staffthismeansbeing
receptivetonewresponsibilitiesandworking
methodsandfeelingcomfortableinaconstant
processofchange.FortheBoard of Management
thismeanspursuingentrepreneurship,seeingnew
developmentsinthemarketandtechnologyand
makingsurethatinnovationisrealised.
FortheSupervisory Boardthismeansstimulating
theBoardofManagementinthisinnovationprocess
andcarryingoutadequatesupervisionwhilegiving
theBoardofManagementsufficientscopefor
responsibleentrepreneurship.Thechosenpolicy
requiresexcellentrelationsamongtheSupervisory
Board,theBoardofManagementandstaffinorder
toensurethatnewproductideasandmarketing
strategiescanbediscussedatanearlystageand
thatsuccessesandsetbacksarepromptlyand
franklyevaluated,withoutleadingtoablurringof
responsibilities.Inthisrespect,Nedaphasputin
placeaworkingenvironmentinwhichthevarious
elementsof‘governance’aremutuallyreinforcing.
Risk and Risk Management
Risksareanintegralpartofentrepreneurship.The
trickistolimittheserisksasfaraspossiblewithout
impedingthecompany’sentrepreneurialdrive.
The‘ManagementSystem’atNedap,asdescribed
elsewhereinthisreport,formstheproceduralbasis
foridentifyingrisksasearlyaspossibleandtaking
measureswherenecessary.TheControllingGroenlo
Departmentplaysaleadingroleinthisrespect.The
risksatNedapcanbebroadlydividedintorisksthat
areinherentinentrepreneurshipandrisksthatarise
frombreachesofcompanyorsocialstandardsand
regulations,suchasfraud.
Entrepreneurial risks
Revenue and expenses
Nedap’sentrepreneurialandproject-basednature
meansthatitsrevenuevariesannually.Dueto
thehighaddedvalue(inpercentageterms)ofthe
company’srevenue(revenueminusmaterials),
fluctuationsinrevenuewillgeneratemorethan
proportionatepercentagevariancesintheresult.
Newproductsandsystemsandtheproject-based
natureoftherevenue,combinedwithrelatively
shortprojectleadanddeliverytimes,makeit
difficulttoestimatefuturerevenue.
Variousinternalandexternalfactorscanalsohave
bothanegativeandpositiveimpactonrevenue.
Importantfactorsinthisrespectaredelaysduring
technicaland/ormarketdevelopment,start-up
problemswithnewproducts,intensifiedprice
competition,exchangerates(mainlytheUS
dollar),governmentdecisionsandmacroeconomic
developments.However,Nedaphasabroad
productportfolio.Ithasdevelopedproductsfor
highlydiversemarkets,includingretail,healthcare,
energy,livestockfarming,libraries,accesscontrol,
watertreatmentandlighting.Thediversification
policymakesNedaplesssensitivetoeconomic
developmentsinonemarket.
ThemarketsinwhichNedapisactiveareset
toundergoradicalchangeinthecomingyears
undertheimpactofincreasingtransparencyand
convergence.Themarketswillbelargerinscale,
moreinternationalincharacterandmorefiercely
competitive.Newonlineapplicationsinparticular
areleadingtoimprovedtransparency,whichmakes
iteasierforcustomerstocomparecompeting
propositionsaroundtheworld.Atthesametime,
theintroductionofnewtechnologiesmeansthat
existingproductscanabruptlybecomelessrelevant.
Newproductdevelopmentscanalsobeadopted
atlightningspeedbymarketsallovertheworld.
Initialimperfectionsinproductscanthereforelead
tolargerlossesfor,andcorrespondingclaimsfrom,
endusers.Nedaptakesgreatcaretoguaranteethe
qualityandsafetyofitsproducts,usingstandards
thatarepartlybasedonlawsandregulationsaswell
astestandcontrolsystems.
80
Corporate Governance
Butitisnotonlytechnicalrisksthatareincreasing.
Themuchlargerscaleofprojects,manyofwhich
areimplementedatlocationsaroundtheworld,is
alsogivingrisetomuchgreaterproject,certification
andlegalrisks.Managingtheseriskswillbecome
increasinglyimportantinthefutureandwill
consistentlybetakenonboardasanintegralpartof
thedevelopmentofnewpropositions.
Delaysduringthetechnicaland/ormarket
developmentofnewproductscanalsoleadto
substantiallyhighercosts.Asexternalincreasesin
rawmaterialandcommoditycostscannotalways
berechargedtocustomers,marginscancome
underpressure.Rapideconomicobsolescenceof
components,theabortionofproductlaunchesand
thesooner-than-expectedendingofproductlife
cyclescannecessitatesubstantialwrite-downson
inventories.Nedap’sRoadtoExcellenceprogramme
waspartlysetuptomitigatetheserisks.
Risksarisingfromcustomerinsolvencyarereduced
whereverpossiblewithcreditinsurance.Controlling
inGroenlocontinuouslymonitorsthecurrency
marketsandassessestowhatextentcurrencyrisks
canandmustbehedgedinspecificsituations.
Besidesmakingmanymarketsmorefiercely
competitive,theaforementionedchangesarealso
spurringaradicalrealignmentofmarketpositions.
Thegapbetweenwinnersandloserswillalso
wideninthisuncompromisingstrugglefornew
marketpositions.Theloserswhofailtokeepup
withdevelopmentscanseetheirmarketsvanish
overnight,whilethewinnerswillbeconfrontedwith
surgingdemandthatwillneedtobeeffectively
managed.
Inthecomingyears,therefore,Nedapmustcontinue
investinginthequalityofitspropositionsandinthe
scalabilityofitsorganisationinordertorespond
adequatelytothegrowingdemandforitsproducts
andservices.Nedap’ssolidfinancialpolicyalso
offersthecompanyscopeformakingthemost
sensiblestrategicdecisionsforitslong-termfuture.
Staff
Nedap’scompetitivestrengthderiveslargelyfrom
thetalent,dedicatedeffortsandenterprisingspirit
ofourstaff.OneofthelargestriskfactorsforNedap
thereforeremainstheabilitytoattractandretain
therightpeople.Accordingly,alotofattentionis
devotedtotherecruitmentofnewtalent,thefurther
developmentofthetalentthatisalreadyavailable
withintheorganisationandthebetterutilisationof
talent.
Thevalueofdefinedbenefitpensionentitlements
iscalculatedaccordingtoIFRSreportingrules.The
calculationsarebasedoncapitalmarketinterest
ratesandcanthereforeshowstrongannual
fluctuations.Theresultinggainsorlossesmustbe
takendirectlytoequity.Thisincreasesthevolatility
ofsolvency.Nedap’sactualpensionobligation,
however,remainslimitedtothepaymentofthe
annualcontributionsandsinglepremiums.
Financial performance
Tomaintaintheentrepreneurialdrivethatmakes
Nedapstrong,thecompany’sfinancialobjectives
areanoperatingprofitofatleast10%ofrevenue
andareturnonequityof15%to20%.Inview
ofNedap’sinnovativecharacterandthelargely
project-basednatureofitswork,asolvencyratioof
about45%(disregardingIAS19),basedonorganic
growth,isconsidereddesirable.Dividendpayableis
notincludedinequity.Theoperatingprofitfor2013
amountedto6.8%,thereturnonequitywas21.2%
andthesolvencyratiostoodat41.0%.Nedap
expectstoachievethesetobjectivesinthemedium
term.
81
Therisksattachingtotheuseoffinancial
instrumentsaredescribedinthesectiononfinancial
riskmanagementinthefinancialstatements.The
financingagreementwiththebankcontainsno
covenants.Nospecificreportsaresubmittedtothe
bank.
Theaddedvalueofrevenueislargelycreatedin
theNetherlands.Theincometaxexpensetherefore
largelyconsistsofDutchcorporateincometax.
Corporate culture
Nedap’spolicyistargetedatorganicgrowth,which
issubjecttofewerrisksthanacquisition-driven
growth.
Theinformal,enterprisingcorporatecultureisone
ofthekeymainstaysofthesuccessoftheNedap
organisation,butitalsoheightenstherisksinherent
indoingbusiness.Thedailydirectcontactsofthe
BoardofManagementandtheControllingwith
managersandemployeesinGroenlolimitthese
risks.Itisimperativethatemployeesareawareof
therisksandalsoarticulateanddiscusstheserisks
amongstoneanother.Afterall,awarenessofrisks
isthefirststeptowardsmanagingthem.Acareful
considerationofallrisksmustautomaticallyform
partofinformationflowsanddecision-making.
MembersoftheBoardofManagementand
SupervisoryBoardaswellasothermanagers
shouldsetanexample,asthiswillencourage
otherstofollowthesamehighstandards.They
mustcreateaculturewherefulljusticeisdoneto
riskmanagement.Theactionsandbehaviourof
Nedapanditsemployeesmustbecharacterisedby
integrityatalltimes.Thisintegrityisnotbasedon
allmannerofformalrules,butonwhateverynormal
personknowstoberightorwrong.
Closecontactisalsomaintainedwiththegroup
companiesathomeandabroad.Nearlyallgroup
companiesarecontrolledfromthemarketgroups
inGroenlo.Themanagementconsistsof(former)
employeesofNedapN.V.ControllinginGroenloalso
monitorstherisksrelatingtothegroupcompanies.
ThesegroupcompaniesmakeuseofthecentralICT
infrastructure.
TheDutchgroupcompanyNsecureB.V.in
Barendrechtandthe49.7%equityinterestinNedap
FranceS.A.Soperatevirtuallyindependently.Nedap
IberiaS.A.,whichundertakesactivitiesinSpainand
Portugal,operatesunderSpanishmanagementbut
workscloselytogetherwiththemarketgroupsin
Groenlo.
Risks arising from breaches of company or social
standards and regulations, such as fraud
Apartfromsocialcontrol,managersplayan
importantroleinpreventingfraudandotherforms
ofinappropriatebehaviouratNedap.Theymust
settherightexampleand,through‘handson’
management,promoteawarenessofwhatisand
whatisnottolerated.Inaddition,theControlling
GroenloDepartmentcontinuouslyassessesand
monitorstheadministrativeorganisationsand
internalmeasuresofcontrol,devotingextensive
attentiontothepreventionoffraud.Duringthe
annualaudit,theexternalauditorsdiscussthe
internalcontrolmeasuresaimedatpreventing
anddetectingfraudwithvariousofficersinthe
organisationandwiththeSupervisoryBoard.
Nedapensuresthatitsintellectualpropertyis
protectedwhereverpossible,suchaswithpatents.
Thisprovidesnoguarantee,however,thatthird
parties(areableto)infringeitsrights.Anysuch
infringementscanleadtosubstantiallosses.In
addition,Nedaptakesmeasurestoensurethatit
doesnotinfringetherightsofthirdpartiesitself.
82
Corporate Governance
Social aspects of doing business
Nedap’s culture
Corporatesocialresponsibility,orsustainable
business,isanaturalpartofNedapandrootedin
itscorporateculture.Itisalsopartofourcorporate
objective:todevelopandsupplyinnovativeand
sustainablesecurityandelectroniccontrolsolutions
aswellasautomation,managementandinformation
systemsfororganisations.Sustainablebusinessis
thereforeanchoredinallourbusinessprocesses.
Everybusinessdecisioninvolvesweighingupthe
interestsofthevariousstakeholders.Formany
years,thesearchforabalancebetweenfinancial
results,socialinterestsandtheenvironmenthas
beenembeddedinourwayofworkingasamatter
ofcourse.Sustainablebusinessisanongoing
process,notanendinitself.
Ourlong-termpolicyfocusesoncreating
sustainableaddedvalueforcustomers,employees,
shareholdersandsociety.Weareconvincedthat
sustainablebusinessleadstosustainablegrowth
andcreatesvalue.
Developing and supplying sustainable products,
systems and services
AtNedap,quality,safetyandsustainabilityare
notjustemptywords.EveryNedapemployee
isawarethatNedapproductsmustmeetthese
characteristics.Wethereforedevelophigh-quality
products,systemsandservicesforourcustomers
thatimprovetheirfutures(andthoseoftheir
customers),anddeliverthematafairprice.
Productionisconcentratedasfaraspossibleat
oursubsidiary,InventiB.V.,inNeede,wherethe
continualaimistoachievethemostefficient
possibleproductionprocessforhigh-quality
sustainableproducts.Whilemanyothercompanies
haveoutsourcedmanufacturingtolow-wage
countries,wekeepasmuchofthisworkaspossible
intheNetherlands,partlywithaviewtoretaining
employment.
Weworkcloselywithashelteredemployment
servicesowecanofferpeoplewithworklimitations
ameaningfulworkingenvironment.
Sustainabilityisnotjustaboutmanufacturing
sustainableproducts,butinvolvesthesearchfor
new,inventiveproductionmethodsandthedesign
oftherelatedprocesses.Socialresponsibilityin
purchasingisalsoimportant.Wethereforealso
considertheenvironmentalandsocialaspects
ofproductsandcomponentswepurchase.
Environmentalaspectshavetodowiththeimpact
oftheitemortheproductionprocessonthe
environment;socialaspectsincluderespectfor
humanrightsandemploymentrights.
Weobeythelawinthecountrieswhereweoperate,
supportuniversalhumanrightsandapplyhigh
health,safetyandenvironmentalstandards.
Asaninternationalindustrialbusiness,weare
responsibleforprotectingandmonitoringthe
surroundingswhereweoperate.Weaimtominimise
anyadverseenvironmentaleffectsofouractivities
and,ofcourse,‘preventionisbetterthancure’.This
aimappliestothewholeproductionprocessand
theentirelifecycleofaproduct-fromextractionof
rawmaterials,throughmanufacturinganduseofthe
producttofinaldisposal/reuse.
Wefocusonminimisingtheuseofpotentially
dangerouschemicalsinourproducts.Thismeans
that,whereappropriate,wewanttofindwaysto
reduceconsumptionorswitchtomaterialswitha
morefavourableeffectontheenvironment.
Asrawmaterialsaregrowingscarcer,weconsider
itimportanttotryandmakeefficientuseofthose
materialsaswellasintermediategoods.Asaresult,
ourmanufacturingprocessesresultinaslittlewaste
aspossible.Thisnotonlyreducestheadverseeffect
ontheenvironmentbutalsosavescosts.
83
Wearefocusingonfurtherreducingtheamountof
packagingmaterials,reusingpackaging,recycling
materialsandusingenvironmentally-friendly,
sustainablepackagingmaterialsandlightweight
packaging.Thenegativeenvironmentalimpactof
electricitygenerationpromptsustogivepriorityto
reducingconsumption,includingongoingeffortsto
makesubstantialreductionsintheenergyusedby
ourproducts.
BothNedapGroenloandInventiB.V.exclusively
usesustainableelectricity,whichisgenerated
withouttheuseofenvironmentallydamaging
fossilfuelswhileemittingalmostnopollutants.We
continuetosearchfornewtechniquestoreduce
energyconsumption,includinglow-energylighting,
presencesensorsandultrasonichumidification.
Healthy commercial results
Ahealthyfinancialsituationisapreconditionfor
thecompany’scontinuity.ToensurethatNedapcan
continuedoingbusinessinawaythatfostersour
strength,weuseanoperatingprofitofatleast10%
ofrevenueandareturnonequityof15%-20%as
financialstandards.Giventheinnovativenatureof
Nedapasawholeandtheoftenproject-oriented
natureofitsorders,weconsideritdesirableto
maintainasolvencyratioofabout45%,based
onorganicgrowth.Inprinciple,theremainderis
distributedtotheshareholders.
Decision-makingtakesintoaccounttheinterestsof
allstakeholdersandaresponsiblebalanceissought,
andusuallyfound,betweenthecommercialresults,
socialinterestsandtheenvironment.
Employees and social responsibility
Employeesandtheirexpertisearecriticalsuccess
factorsforNedap.Ourbusinessgrowsasour
peoplegrow,soweattachgreatimportancetotheir
professionalandpersonaldevelopment.AtNedap,
wedoallwecantodevelopexistingtalentandto
encouragenewskillsandprofessionalprogress.
Partlyasaresultofthis,weareabletoattractand
keeppeopleofthehighestqualitytohelpfurther
developouractivities.
Ouremployeesareentitledtoworkinsafeand
healthyconditionsinattractivesurroundings.
Giventhatnewideasandnewwaysofthinking
areessentialtoremainingcompetitive,wemust
fosteranenvironmentandmodeofthoughtthat
encouragethespiritofenterpriseandnewideas
inpeopleandteams.Thismeansstimulating‘Yes’
insteadof‘Yesbut...’,‘Whynot’insteadof‘Why’.It
isamentalitythatgetsgoodideastomarketfaster.
Moreover,wekeeppeoplewithbrightideaswithin
ourcompany.
Nedapdoesnothaveahierarchicalstructureand
helpsitspeopledevelopabroad,interestedviewof
theworld.
Weencouragethemtoaskquestions.Wecanoften
findadifferent,betterwayifwechallengeourselves
andourcustomerstolookatthingsfrommorethan
oneperspective.
Nedapandsocietyareinextricablylinked;one
influencestheother.Anumberofimportantaspects
ofthisarementionedbelow.
Human rights
NedaprespectstherightssetoutintheUniversal
DeclarationofHumanRights,whichstatesthat
everypartyinsociety,includingbusinesses,must
observeandsecurehumanrights.
PursuanttotheOECDguideline,Nedapwill
investigatecompanieswithwhichitmaintainsdirect
businessrelationstoestablishhowtheydealwith
humanrights.Avisittothesecompaniesispartof
Nedap’snormalbusinessprocedure.
Thehumanrightsinvestigationwillbecarried
outinamannerthatisappropriateinthelightof
Nedap’ssize,thenatureandcontextofitsactivities
andtheseriousnessoftherisksofunfavourable
84
Corporate Governance
humanrightseffects.Wheneveritbecomesclear
thatabusesoccurinthefieldofhumanrightsor
anyotheraspectmentionedbelow,Nedapwilltake
appropriatemeasuresand,ifnecessary,switchover
toanothersupplier.
Free enterprise
Wesupportfreeenterpriseandfaircompetition.
Weaimtomeettheneedsofourcustomersfaster,
betterandmoreclearlythanourcompetitors.We
competefiercelybutfairly.
Privacy
Weprotecttheconfidentialityofidentifiable
personalinformationregardingcustomers,
employees,businesscontactsandotherindividuals.
Communication
Unlessabsoluteconfidentialityisrequired,weaim
foropen,accurateandtimelycommunication.
Integrity and responsibility
Ethicalandresponsibleconductisimportanttoour
business.Ifwedotherightthing,peopleknowwe
areacompanytheycantrust.Trustisthebasisof
goodinteraction.Integrityandhonestyareessential
inbusinesstransactions:thereisnoroomforbribery
orunethicalpractices,norforconflictsofinterest.
Andyet,integrityandresponsibilitygofurtherthan
that.Theyareaboutdoingthingsintherightway,as
acompanyandasindividuals.
Treating everyone fairly
Wewillneverdiscriminateonthebasisofrace,
ethnicbackground,age,religion,gender,sexual
orientationordisability.Wewantourworkforceto
beareflectionofthesocietyinwhichweoperate.
Allouremployeescanexpectfairandequal
treatmentfromthecompany,irrespectiveoftheir
joborwheretheyarelocated.
Child labour, forced labour and slavery
Childlabourisdefinedasanytypeofworkthat
preventschildrenfromgettinganeducation,
damagestheirphysicaland/orpsychologicalhealth,
restrictstheirdevelopmentorrobsthemoftheir
childhoodorself-respect.Ataminimum,Nedap
complieswiththeregulationsofthecountriesin
whichitoperates.Undernocircumstanceswill
Nedapuseforcedlabour,employchildreninbreach
ofConventions138and182oftheInternational
LabourOrganizationoractinbreachoftheUN
ConventionontheRightsoftheChild.
Exploitation
Exploitationofvulnerableindividualsorgroupswill
notbetoleratedinanycircumstances.
Working conditions
Wagesandbenefitsmustfullymeetlocalstandards,
complywithlocallegislationandbeinlinewith
generalprinciplesofjusticeandfairtreatment.
Relationships
Wewanttodobusinesswithcompaniesthat
subscribetoourethicalvaluesandmeetoursocial
andenvironmentalstandards.
ThebrandingprojectswhatNedapstandsfor:
85
Nedaprealisesintelligent,technologicalsolutions
forsociallyrelevantthemes.Sufficientfoodfora
growingpopulation,cleandrinkingwateracrossthe
worldandsmartsustainableenergynetworksare
justafewexamplesoftheareasinwhichNedapis
active.Nedap’sproductsandservicesallhaveone
thingincommon:theyalwaysofferasolutiontoa
sociallyrelevantproblem.
Sustainableentrepreneurship-oneofthedriversof
innovation-isintegraltoNedap’sstrategywhichis
determinedby,andtheresponsibilityof,theBoard
ofManagement.Specificperformanceobjectiveslet
alonequantitativetargets-formpartofthis.After
all,sustainableentrepreneurshipisacontinuous
processandnotanendinitself.
86
Corporate Governance
Governance
TheSupervisoryBoardandBoardofManagement
ofNedapbelievetheycomplywiththe‘principles
ofgoodcorporategovernance’setoutinthe
DutchCorporateGovernanceCode.The‘best
practice’provisionsarelargelycompliedwith.The
informationrequiredbytheCodeisprovidedin
variousplacesintheAnnualReport.
Readingthe‘bestpractice’provisionsitsoon
becomesapparentthattheseareaimedatlarge
listedcompanies.ThisfocusoftheCodeis
understandablegiventhosecompanies’individual
socialrelevance.Smallercompanies,suchasNedap,
are,however,organisedcompletelydifferentlyfrom
largelistedcompanies.Themanagementismore
intouchwithdailypractice,andsolinesofcontrol
arelessformalandmoredirect.Thenatureand
smallersizeofsuchcompaniesalsomeansthat
thecontrolstructureisusuallylesscomplexand
thedivisionoftaskslessstringent.Moreover,the
supervisoryboardsofsmallercompaniestendto
bemoreinvolvedinthecompanyandconsequently
haveabetterunderstandingofwhatishappening
withinthecompany.This,too,obviouslyimproves
thequalityofsupervisioningeneral.Incaseswhere
thedetailednatureofthe‘bestpractice’provisions
isdesignedtoaddresstypicalgovernanceissues
atlargelistedcompanies,the‘applyorexplain’
ruledoesnotprovideenhancedinsightintothe
applicationofthedesiredprinciplesofsound
corporategovernanceandsupervisionatsmaller
companies.Nevertheless,departuresfromthe
provisionswillbedisclosedandexplainedas
required.
Management and supervision
Nedapfallswithinthe‘statutorytwo-tierboard
system’andsosupervisorydirectorsareappointed
bythegeneralmeetingofshareholdersona
nominationoftheSupervisoryBoard.Inthis
connection,theshareholdersandtheWorksCouncil
arealsogivenanopportunitytorecommend
personsforappointment.
Theprofileforthesizeandcompositionofthe
SupervisoryBoardisdescribedinthe‘Profileofthe
SupervisoryBoard’sectionintheannualreportand
alsoonthecompany’swebsite.Themembershipof
theSupervisoryBoardconformswiththeprofile.
Theprofessionalbackgroundofthemembershas
alsobeenpublished.Themembersareindependent
ofthecompanyandofeachother.Noneofthe
membersholdsmoresupervisorydirectorships
atDutchlistedcompaniesthanspecifiedinthe
Code.TheSupervisoryBoardcurrentlyhasfour
members.InviewofNedap’stransparencyandthe
limitedsizeoftheSupervisoryBoard,thereareno
audit,remunerationorselectionandappointment
committees.Consequently,thefullSupervisory
Boardisdesignatedtoperformthedutiesofthe
auditandothercommittees.Thechairmanof
theSupervisoryBoardoverseesthequalityand
frequencyoftheinformationflowonthecompany’s
financialperformance,marketposition,product
developmentandorganisationalprogress.The
SupervisoryBoardasawholeassessesthefinancial
andotherinformation.
Theremunerationarrangementsmadewiththe
BoardofManagementaresetoutbelow.The
chairmanandamemberoftheSupervisoryBoard
holdannualappraisalinterviewswiththemembers
oftheBoardofManagementonthebasisof
predefinedtargets.ThevariableincomeoftheBoard
ofManagementisdeterminedbytheperformance
ofitsmemberswithrespecttothosetargets.The
maximumvariableremunerationis90%ofthefixed
annualincome.
GiventhesmallsizeoftheSupervisoryBoard,the
experienceofitsmembersandtheneedforflexible
workingprocedures,theBoardhasnotdrawnupany
formalregulations.
87
TheBoardofManagementhastwomembers.The
SupervisoryBoardmembersbelievethatappointing
directorsforfour-yeartermswouldimpede
theproperperformanceoftheirrolewithinthe
company.Thedirectorsareentrustedwiththetask
ofmappingoutthecompany’slong-termstrategy
andtranslatingthatstrategyintoeffectivepolicy.
Four-yearmandatesarenotsufficienttoadequately
fulfilthisroleatacompanylikeNedap.Theannual
appraisalinterviewsalsoenabletheSupervisory
Boardmemberstomonitortheperformanceof
thedirectorsmoreeffectivelythaniftheywere
reappointedonceeveryfouryears.
ThemembersoftheBoardofManagementdonot
holdsupervisoryboardmembershipswithanyother
companies,nordotheyholdanyinterestsinother
companiesthatconflictwiththoseofNedap.Given
Nedap’ssizeandmarketposition,theSupervisory
BoardandtheBoardofManagementseenoneedto
drawup‘regulationsconcerningownershipofand
transactionsinsecuritiesbyboardmembers,other
thansecuritiesissuedbytheirowncompany’.It
hasbeenagreedthattheacquisitionofinterestsin
anothercompanythatmightgiverisetoapotential
conflictofinterestsshallbeavoidedand,incaseof
doubt,shallbediscussedinadvance.Thisapplies
tomembersofboththeSupervisoryBoardandthe
BoardofManagement.
Remuneration policy for the Board of Management
Theaimoftheremunerationpolicyistohavea
compensationpackagefortheBoardofManagement
thatcontributestoattractingandretainingqualified
andexpertdirectors,ensuringandadvancingthe
mediumandlong-terminterestsofthecompany.
ThecompensationpackagefortheBoardof
Managementcomprises:
I Fixed annual income
Fixedannualincomethatisrevisedeachyearat
leastbyapercentageequaltothatofthesalary
increaseprovidedforintheNedap’sCollective
LabourAgreement.
II Variable annual income
Thevariableannualincomedependsonthe
membersoftheBoardofManagementmeeting
targetssetinadvancebytheSupervisoryBoard.
Onethirdofthevariableincomeisdetermined
byfinancialtargets,onethirdbytargetsrelating
tothedevelopmentoftheinternalorganisation
andonethirdbytargetsfocusingontheway
inwhichtheorganisationoperatesinits
environment.60%ofthefixedannualincome
ispaidforperformanceattargetlevel,witha
maximumof90%ofthefixedannualincome.
Eachdirectormustcontributeatleast50%of
hisvariableannualincomeaftertaxtoStichting
MedewerkerparticipatieNedapinexchangefor
depositaryreceipts.Thismeansthatasignificant
partofthevariableincomeisdependentonthe
company’slong-termperformance.
TheSupervisoryBoardmayincreaseordecrease
thevariableincomeifinitsopinionthecalculations
leadtoanunreasonableoutcome.
88
Corporate Governance
Ifvariableremunerationisgrantedonthebasis
ofincorrectinformation,theSupervisoryBoardis
entitledtorecoveritfromthedirectorconcerned.
TheremunerationpackagefortheBoardof
Managementhasbeensettakingintoaccount
internalpayrelationshipsandmarketinformation.
Theremunerationpackageisreviewedregularlyto
ensurethatitisstillcompetitiveandinlinewiththe
weightandcomplexityoftheduties.
ThepensionschemefortheBoardofManagementis
basedonaveragepay,withgeneralsalaryincreases
alsobeingincludedoverpastyearsofservice.
Pensionrightsareaccruedatarateof2%peryear.
Thepensionablesalaryisbasedonthefixedannual
income.
Noarrangementshavebeenmadewiththe
membersoftheBoardofManagementregardinga
periodofnoticeorredundancyscheme.
Noloans,advancesorguaranteeshavebeen
grantedtothedirectors.
Management System
NedaphasanadequateandeffectiveManagement
Systemwhichisdesignedto:
– testactualprogressandperformanceagainstthe
objectives,
– enablemanagementtoretaincontrolover
responsibilitiesdelegatedtoothers,
– managecashandotherflowsrepresentinga
monetaryvaluewithintheorganisation,
– identifyandrestrictrisks,
– preventfraud.
Theinternalinformationandreportingflowsareas
follows:
I Article20oftheArticlesofAssociationofNedap
N.V.specifieswhichBoardofManagement
resolutionsaresubjecttotheapprovalofthe
SupervisoryBoard.
EachyeartheBoardofManagementprovides
theSupervisoryBoardwithanoutlookforthe
comingyearswhich,onthebasisofthethen
availableknowledge,setsoutthecompany
strategyandprovidesabreakdownoffiguresfor
thecomingyear,aswellasforecastingexpected
developmentsfortheforeseeablefuture.
TheBoardofManagementalsoreportsregularly
(tentimesperyear)totheSupervisoryBoard
ontheactualperformanceversusbudget.The
SupervisoryBoardmeetsatleastfivetimesper
year,andmoreoftenasnecessary,todiscuss
thesereports
II Themarketgroupmanagerssetouttheirviews
eachyearinthebudget.Thisincludes,onthe
basisoftheobjective,theplansrelatingto
themarket,R&Defforts,staffingandcapital
investments.
Themarketgroupmanagersalsoreportregularly
(tentimesperyear)totheBoardofManagement
ontheactualperformanceversusthebudget.
Inadditiontothisreportingsystem,aregular
exchangeofinformationtakesplacebetween
theBoardofManagementandmarketgroup.
ThisismadeeasierbythefactthattheBoardof
Managementandthemarketgroupmanagement
arebothbasedinGroenlo.
Inaddition,theBoardofManagementandthe
marketgroupmanagersalsoconsultpriortoany
definitedecision-makingon:
– significantmarket-relateddecisions,
– R&Dprojects,
– staffappointments,
– capitalinvestments.
89
Certainactionsbythemanagementof
subsidiariesarealsosubjecttotheapprovalof
theBoardofManagementofNedap.Inaddition,
abudget(includingincomestatement,balance
sheet,capitalexpenditure,staffing)mustbe
submittedforthecomingyear.Heretooregular
reportsaresubmitted(tentimesayear)tothe
BoardofManagementandthemarketgroup
managementontheactualperformanceversus
budget.
III Internally,ControllinginGroenloplaysaleading
roleintheanalysisthestrategyandthevarious
plansandmonitorstheimplementationversus
settargets.
Thisdepartmentensuresthattheadministrative
organisationanddataprocessingaresufficient
toensuretheuniformandcorrecthandlingof
allfinancialandbusinessmatters.Ithassetup
auniformreportingsystembasedonstandards
(includingexplanatorynotes)thatisdesignedto
supplytheinformationrequiredbytheBoardof
Management.
Thedepartmentalsoensuresthecorrect,
completeandtimelydeliveryofthesereports
(tentimesayear).
TheControllingdepartmentmonitorstherisks,
managesvalueflowswithintheorganisationand
ensuresthatcontractsandstatutoryregulations
arecompliedwith,reportingwherenecessary
totheBoardofManagement.Itassessesthe
variousadministrativeorganisations,also
devotingattentiontothepreventionofpossible
fraud.
Inaddition,theControllingdepartmentassesses
inwhatsituationsandtowhatextentcurrency
riskscanandmustbehedged.
Thepotentialriskarisingfrominsolvent
customersisreducedbymeansofcredit
insurance.
Externalreportingisonthebasisofthe
standardslaiddownbytheInternational
AccountingStandardsBoardandacceptedbythe
EuropeanUnion.
IV Theexternalauditorthenactsasobjective
assessorofthisprocessforthepartsrelevantto
theannualaudit.
TheBoardofManagementstatesthattheinternal
controlsystemasdescribedprovidesareasonable
degreeofassurancethatthefinancialreportingis
freeofmaterialerrorsoranincorrectpresentation
offacts.Thefinancialreportsgiveatrueandfair
viewofthecompany’sfinancialsituationandresults
ofitsactivitiesandtherequirednotes.Theinternal
controlsystemhasoperatedsatisfactorilyduringthe
yearunderreview.
Therewasintensivecontactduringtheyearwith
themanagementofsubsidiariesandmarketgroups
andControllingontransactionsundertakenbythe
companyandondetailedoralandwrittenreports
onrevenue,expensesandprogress.TheBoardof
Managementandmarketgroupsarebasedatthe
sameaddress;informationisexchangeddaily.
Therewerenosignificantchangestothe
ManagementSystemduringtheyearunderreview
andnosignificantchangesareplanned.Nearlythe
entireorganisationusesthesameERPsystem.This
wasdiscussedwiththeSupervisoryBoard.
Despitetheexistenceofriskmanagementsystems,
materialerrors,fraudorunlawfulactionscanstill
takeplace.Thesystemthereforedoesnotprovide
absoluteassurancethattargetswillbeachieved,but
hasbeendevelopedtoobtainreasonableassurance
astotheeffectivenessofcontrolsimplementedto
mitigatefinancialandoperationalrisksinrelationto
organisationalobjectives.
90
Corporate Governance
External communications
Nedappublishesanoverviewofthecompany’s
performanceandprogressatleastfivetimesayear.
InadditiontotheAnnualReport,thereare
first-halfandfull-yearfinancialreports,
supplementedwithtwointerimreportsinthespring
andautumnonrelevantmarketdevelopments,key
eventsandtransactionsandtheireffectsonNedap’s
financialposition,alongwithageneraldescription
ofthefinancialposition.Thesereportsandmuch
moreinformationcanbefoundonthewebsitewww.
nedap.com.
Best practice provisions
Giventhecompany’sinnovative,project-driven
andflexiblestyleofentrepreneurship,Nedaphas
optedtoapplycertainprovisionsoftheCorporate
GovernanceCodeinadifferentway.Allsuch
instancesofnon-standardapplicationareexplained
belowinthesameorderastheCode:
II.1.1 A management board member is appointed
for a maximum period of four years. A
member may be reappointed for a term of
not more than four years at a time.
Giventhelong-termnatureofNedap’s
policy,membersofthecompany’sBoardof
Managementareappointedforanindefinite
periodoftime.Adirector’slengthoftenure
dependsonhisperformancewhichis
reviewedannuallybytheSupervisoryBoard.
II.1.3 The Company shall, in any event, employ as
instruments of the internal risk management
and control system:
b) code of conduct should be published on
the company’s website;
Nedapanditsstaffactinanhonestand
honourablemanner.Thisintegrityisnot
basedonawholerangeofformalrules,but
onwhatanynormalpersonknowstobe
rightorwrong.Honestyandthecourageand
freedomtoadmitone’smistakesarecrucial
inthisconnection.Staffshouldalwaysput
theinterestsofthecustomerandNedap
firstintheiractions.Againstthisbackground
Nedap’smanagementplaysavitalrolein
keepingeveryoneawareoftheseprinciples.
Ultimately,agoodexamplewillbefollowed.
Awrittencodeofconductwouldnotbe
appropriateforthetypeoforganisationthat
Nedapisandwouldbecontrarytothewayin
whichwedealwithoneanother.
II.1.7 The management board shall ensure
that employees have the possibility
of reporting alleged irregularities of a
general, operational and financial nature
within the company to the chairman of
the management board or to an official
designated by him, without jeopardising
their legal position. Alleged irregularities
concerning the functioning of management
board members shall be reported to the
chairman of the supervisory board.
The arrangements for whistleblowers shall
be posted on the company’s website.
Therelationshipsandopenstructurewithin
theNedaporganisationaresuchthatalleged
irregularitiescanbeexposedwithoutfear
ofrepercussions,regardlessoftherank
orstatusoftheallegedperpetrator.No
separaterulesarenecessaryforthispurpose.
II.2.8 The remuneration in the event of dismissal
may not exceed one year’s salary (the ‘fixed’
remuneration component). If the maximum
of one year’s salary would be manifestly
unreasonable for a management board
member who is dismissed during his first
term of office, such board member shall be
eligible for severance pay not exceeding
twice the annual salary.
AswaspointedoutwithrespecttoII.1.1,
membersofNedap’sBoardofManagement
areappointedforanindefiniteperiod
91
andthereisthereforenosuchthingas
a‘firsttermofoffice’.Intheunfortunate
eventthatadirector’sperformanceproves
unsatisfactory,thentheseverancepaywill
bepartlydeterminedbythenumberofyears
ofserviceatNedap.
II.2.13 The overview referred to in best practice
provision 2.12 shall in any event contain the
following information:
f) a description of the performance
criteria on which the performance-related
component of the variable remuneration
is dependent in so far as disclosure would
not be undesirable because the information
is competition sensitive, and of the
discretionary component of the variable
remuneration that can be fixed by the
supervisory board as it sees fit;
TheremunerationpackagefortheBoardof
Managementcomprisesfixedandvariable
annualincome.Thevariableannualincome
dependsonthemembersoftheBoardof
Managementmeetingtargetssetinadvance
bytheSupervisoryBoard.
Onethirdofthevariableincomeis
determinedbyfinancialtargets,onethird
bytargetsrelatingtothedevelopmentof
theinternalorganisationandonethirdby
targetsfocusingonthewayinwhichthe
organisationoperatesinitsenvironment.As
faraspossible,theSupervisoryBoardwillset
quantifiableobjectivesforthesetargets.No
furtherdetailsofthetargetscanbegivenfor
competitivereasons.
g) a summary and account of the methods
that will be applied in order to determine
whether the performance criteria have been
fulfilled;
Asnofurtherdetailsofthetargetsarebeing
given,itisalsodifficulttogiveasummary
andaccountofthemethodsthatwillbe
appliedinordertodeterminewhetherthe
performancecriteriahavebeenfulfilled.
h) an ex-ante and ex-post account of
the relationship between the chosen
performance criteria and the strategic
objectives applied, and of the relationship
between remuneration and performance.
Astheselectedtargetscannotbesetoutin
greaterdetailthaninf),anaccountofthe
relationshipbetweenthesetargetsandthe
strategicobjectivescannotbegiventothe
extentthatthetargetswouldhavetobe
disclosedforthis.Asignificantproportionof
thevariableincomeisdependantonNedap’s
long-termstrategyandperformancesince
eachdirectormustcontributeatleast50%
oftheirvariableannualincomeaftertaxto
StichtingMedewerkerparticipatieNedap
inexchangefordepositaryreceipts.These
depositaryreceiptsarelockedupforaperiod
offouryears.Withrespecttotherelationship
betweenrewardandperformanceexante
andexpostitisonlypossibletosaythat
60%ofthefixedannualincomeispaidfor
performanceattargetlevel,withamaximum
of90%ofthefixedannualincome.
II.2.14 The main elements of the contract of a
management board member with the
company shall be made public after it has
been concluded, and in any event no later
than the date of the notice calling the
general meeting where the appointment
of the management board member will
be proposed. These elements shall in any
event include [...] performance criteria to be
applied.
AtNedap,membersoftheBoardof
Managementareappointedbythe
SupervisoryBoardafterannouncingthe
proposeddecisiontothegeneralmeeting.
Theperformancecriteriaarenotsetoutin
greaterdetailasexplainedinRemuneration
oftheBoardofManagement.
92
Corporate Governance
III.1.1 The division of duties within the supervisory
board and the procedure of the supervisory
board shall be laid down in terms of
reference. The supervisory board’s terms of
reference shall include a paragraph dealing
with its relations with the management
board, the general meeting and the central
works council or works council. The terms of
reference shall be posted on the company’s
website.
InviewofthenatureoftheCompanyandthe
company-specificworkingproceduresofthe
SupervisoryBoardassetoutintheReportof
theSupervisoryBoardtotheShareholders,
andgivenalsothesizeoftheBoardandthe
desiredflexibility,theSupervisoryBoard
considersitundesirabletolaydownformal
proceduresforitsdealingswiththeBoard
ofManagement,theGeneralMeetingof
ShareholdersandtheWorksCouncil.
III.3.3 After their appointment, all supervisory
board members shall follow an induction
programme, which, in any event, covers
general financial and legal affairs, financial
reporting by the company, any specific
aspects that are unique to the company
and its business activities, and the
responsibilities of a supervisory board
member.
The supervisory board shall conduct an
annual review to identify any aspects
with regard to which the supervisory
board members require further training
or education during their period of
appointment. The company shall play a
facilitating role in this respect.
ThesizeofNedapaswellasits
organisationalsetuparesuchthatnoformal
inductionprogrammeisnecessary.Newly
appointedmembersnaturallyreceivean
appropriateintroduction,includingavisitto
theheadofficeinGroenlo.
III.3.5 A person may be appointed to the
supervisory board for a maximum of three
four-year terms.
TheSupervisoryBoardconsidersthatthe
lengthoftenureofitsmembersshouldbe
determinedbytheirqualityandcontribution
incombinationwiththespecificknowledge
theybringtoNedap.
TheperformanceoftheSupervisoryBoard
anditsmembersareevaluatedannually.
TheArticlesofAssociationstipulatethata
member’stenureshallenduponreaching
theageof72.
III.4.1 The chairman of the supervisory board shall
see to it that:
a) the supervisory board members follow
their induction and education or training
programme;
AspointedoutwithrespecttoIII.3.3,
Nedaphasnoformalinductionprogramme.
Itgoeswithoutsayingthatthechairman
oftheSupervisoryBoardensuresthat
thecompetenciesofthemembersofthe
SupervisoryBoardmatchtheprofileofthe
Boardandthattheyareeffectivelyinducted
intotheCompany.
III.6.5 … The company shall draw up regulations
governing ownership of and transactions in
securities by management or supervisory
board members, other than securities issued
by their ‘own’ company.
Anagreementisinplacewherebyinterests
inothercompaniesinvolvingapotential
conflictofinterestsareavoidedand,in
caseofdoubt,discussedinadvancewith
theSupervisoryBoard.GivenNedap’ssize
andmarketposition,theSupervisoryBoard
seesnoneedtodrawupwrittenregulations
regardingmembersoftheBoardof
Managementholdinganddealinginshares
incompaniesotherthanNedap.
93
IV.1 Principle
............. The Company shall, in so far as
possible, give shareholders the opportunity
to vote by proxy and to communicate with
all other shareholders.
Nedapdoesnothaveaninternational
shareholderbase.Nedapconsidersthat
theinterestitsshareholdershaveinthe
Companyanditscultureisdemonstrated
bytheirpersonalattendanceattheGeneral
MeetingofShareholdersand,ifnecessary,
theirparticipationinthediscussion.Personal
attendanceisparticularlyimportantwhen
mattersofsubstancearebeingdiscussed.
Shareholdersmayvotebyproxy,where
necessary.
IV.1.4 The policy of the Company on additions to
reserves and on dividends (the level and
purpose of the addition to reserves, the
amount of the dividend and the type of
dividend) shall be dealt with and explained
as a separate agenda item at the general
meeting of shareholders.
Nedap’spolicyonadditionstoreserves
anddividendsisdirectlydeterminedbyits
strategyandlong-termpolicyandwillbe
discussedinthatcontext.Thelong-term
policyisaimedatcreatingsustainableadded
valueforcustomers,staffandshareholders.
Thepolicyofadditionstoreservesand
dividendswillbeadiscussionitemonthe
agenda.
IV.1.5 A resolution to pay a dividend shall be
dealt with as a separate agenda item at the
general meeting of shareholders.
AspointedoutwithrespecttoIV.1.4,the
dividendpaymentisdirectlydeterminedby
thestrategyandthelong-termpolicy.The
dividendpaymentwillbeexplicitlyincluded
ontheagendaasaseparateitem.
IV.3.9 …………. and resolutions for the appointment
of management board members [...] shall
be submitted separately to the general
meeting.
AsexplainedinII.2.14directorsare
appointedbytheSupervisoryBoardafter
announcingtheproposeddecisiontothe
generalmeeting.Consequently,formallyno
proposaltoappointdirectorsissubmittedto
thegeneralmeeting.
V.2.1 The external auditor may be questioned by
the general meeting in relation to his report
on the fairness of the financial statements.
The external auditor shall for this purpose
attend and be entitled to address this
meeting.
PursuanttoArticle42(3)oftheArticlesof
Association,Nedap’sauditorreportsonhis
audittotheSupervisoryBoardandtheBoard
ofManagement.Theresultofhisauditis
setoutinastatementcertifyingthatthe
financialstatementsgiveatrueandfairview
ofthefinancialpositionoftheCompanyin
conformitywiththeInternationalAccounting
StandardsBoardandacceptedbythe
EuropeanUnionandPart9,Book2ofthe
NetherlandsCivilCodeandthattheycomply
withthestatutoryprovisionsforfinancial
statementsstipulatedinPart9,Book2
oftheNetherlandsCivilCodeand,tothe
extentofhiscompetence,thattheBoardof
Managementreportisconsistentwiththe
financialstatementsasrequiredby2:391
sub4oftheNetherlandsCivilCode.This
independentauditor’sreportisincludedin
theOtherinformationsection.Theactivities
oftheauditoraredescribedinthe‘Auditor’s
responsibility’sectionoftheIndependent
Auditor’sReport.Thisisself-explanatory.
Independentauditor’sreportsatNedap
areunqualified,andsonoadditional
94
Corporate Governance
clarificationisnecessary.Shouldany
provisosbeincluded,thesewillbedisclosed
andexplainedintheAnnualReportin
conformitywiththeaccountabilityof
theSupervisoryBoardandtheBoardof
Managementvis-à-vistheshareholders.In
theviewoftheSupervisoryBoardandthe
BoardofManagement,thepresenceofthe
externalauditorattheGeneralMeetingof
Shareholdersisthereforeunnecessary.
V.3.1 The external auditor and the audit
committee shall be involved in drawing up
the work schedule of the internal auditor.
They shall also take cognizance of the
findings of the internal auditor.
Inviewofitssize,Nedapdoesnothavean
internalauditor(oranauditcommittee).It
goeswithoutsayingthattheexternalauditor
performstheannualauditwithdueattention
totheexistenceandimplementationof
theinternalauditandcontrolsystem.The
externalauditorattendsthemeetingofthe
SupervisoryBoardatwhichthefinancial
statementsarediscussed.
Chairmanof Boardof
theSupervisoryBoard: Management:
G.F.Kolff R.M.Wegman
G.J.M.Ezendam
95
Information on the company structure and control
pursuant to the Decree on section 10 of the
Takeover Directive
Capital structure
Nedap’sauthorisedsharecapitalconsistsof
15,600,000ordinarysharesof€0.10nominalvalue
eachandpreferencesharesof€0.10nominalvalue
each.Thepreferencesharesareregistered.The
ordinarysharesarebearershares.
Theissuedsharecapitalis€669,292consistingof
6,692,920ordinaryshares.
TheordinarysharesarelistedonNYSEEuronext
Amsterdamandarefreelytradable.Theyare
embodiedina‘globalnote’thatisheldincustody
byNecigefonbehalfoftheshareholders.
Stichting Medewerkerparticipatie Nedap
FollowingthefoundationofStichting
MedewerkerparticipatieNedap(Stichting)in2009,
employeeshavebeenabletoacquiredepositary
receiptsforsharesinNedapsince1January2010.
Thisabilitytobecomeadepositaryreceiptholder
inthecompanyisinlinewiththeenterprisethat
isdemandedoftheemployees.Italsooffers
employeesthepossibilitytobeheardthroughthe
Stichtingatthegeneralmeetingofshareholders
whenfundamentaldecisionsarebeingtakenon
Nedap’sdirectionandfuture.Eachyear,employees
maydecidetouseallorpartoftheirprofitshare
forthis.Thedepositaryreceiptsarelockedupfor
aperiodoffouryears.Inadditiontoapurchase
discountof10%onthedepositaryreceiptprice,
subjecttocertainconditions,onebonusdepositary
receiptisdistributedforeachfourdepositary
receiptsafterfouryears.Thefulldividendoneach
depositaryreceiptisattributedtothedepositary
receiptholder.At31December2013,theStichting
held69,328sharesinNedapforwhichithadissued
depositaryreceiptstoemployees.
Since1973,Nedaphasbeenabletoissue
preferencesharesasananti-takeovermeasure.This
protectioncanbedeployedifathirdpartyintends
togaincontrolofthecompanybyacquiringa
decisiveinterestorotherwiseattemptstoadversely
affectNedap,withoutensuringtheinterestsof
Nedap,itsbusinessandallstakeholdersina
satisfactoryway.
Stichting Preferente Aandelen Nedap
Tothisend,theStichtingPreferenteAandelen
Nedap(‘Stichting’)wassetupin1973.TheStichting
looksaftertheinterestsofNedap,itsbusiness
andallstakeholders,defendingasfaraspossible
againstinfluenceswhichcouldthreatencontinuity,
independenceandidentityinconflictwiththose
interests.
NedaphasgrantedtheStichtingtherighttoacquire
preferenceshares(calloption)underwhich,on
request,itcanacquirepreferencesharesuptoa
maximumequaltothenumberofordinarysharesin
issuelessoneatthetimetheoptionisexercised.
ThecalloptionobligesNedaptoissuethenumber
ofpreferencesharesrequestedbytheStichting
wheneveritmakesthatrequest.Consequently,no
furtherdecisionbyanycorporatebodyofNedapis
required;thedecisionwastakenwhentheoption
wasgrantedtotheStichting.
Ifpreferencesharesareissued,theStichtinghasto
payatleast25%oftheirnominalvalueincash.
ThemembersoftheExecutiveBoardoftheStichting
are:
J.C.M.Hovers,chairman
J.Lock,secretary
A.P.M.vanderVeer-Vergeer
R.P.Voogd
J.P.Bahlmann
96
Corporate Governance
The membership of the Executive Board of the
Stichting is intended to ensure the interests of all
stakeholders in Nedap in decision-making.
The officers of the Stichting and Nedap share the
opinion that Stichting Preferente Aandelen Nedap
and Nedap itself are independent of one another
within the meaning of section 5.71(1c) of the
Financial Supervision Act.
Preference shares take precedence over ordinary
shares for dividend distributions and distributions
of capital paid in on the shares in the event of
Nedap’s liquidation.
Voting rights
Everyshareisentitledtoonevote.Thereareno
restrictionsonvotingrights.Shareholderswho
wishtoattendthegeneralmeetingofshareholders
canannouncethisbythedatesetbytheBoardof
ManagementofNedap,whichcannotbeearlier
thantheseventhdaybeforethegeneralmeeting,
throughtheirbankorbrokerwherethesharesare
administered,byrequestingareceiptwhichactsas
atickettothemeeting.
Disclosure pursuant to Act on the Disclosure of
Major Holdings in Listed Companies
TheNetherlandsAuthorityfortheFinancial
Markets(AFM)publishedtheinformationon
holdingsreportedinconnectionwithcontroland
shareholdingsgivenbelow.
Therearenomaterialtransactionsbetweenlegalor
naturalpersonswhoholdatleast10%oftheshares
February2014 February2013
in% in%
ASRNederlandN.V. 8.20 8.20
CrossOptionsBeheerB.V. 15.11 15.11
DarlinN.V. 5.19 5.19
DecicoB.V. 5.01 5.01
DeltaLloydDeelnemingenFondsN.V. 13.45 13.45
DeltaLloydN.V. 12.60 12.60
KempenOranjeParticipatiesN.V. 7.11 7.11
TKHGroupNV 5.06 5.06
(StichtingPreferente
AandelenNedap(potential)) (100.00) (100.00)
Total 71.73 71.73
inNedapasmeantbyprovisionIII.6.4oftheDutch
CorporateGovernanceCode.
Appointment and dismissal of directors
Nedapisatwo-tiercompanyandsomembersof
theBoardofManagementareappointedbythe
SupervisoryBoard.
TheSupervisoryBoardnotifiesthegeneralmeeting
ofshareholdersoftheproposedappointment.The
SupervisoryBoardwillnotdismissadirectoruntil
thegeneralmeetingofshareholdershasbeenable
todecideontheproposeddismissal.
97
Appointment and dismissal of supervisory directors
Supervisorydirectorsareappointedbythegeneral
meetingofshareholdersonaproposalofthe
SupervisoryBoard,generallyforaperiodoffour
years.Thisproposalismadeonthebasisofaprofile
drawnupbytheSupervisoryBoard.Thegeneral
meetingofshareholdersandtheworkscouncilmay
recommendpeopleassupervisorydirectors.The
workscouncilhasanenhancedrightofnomination
foronememberoftheSupervisoryBoard.
Thegeneralmeetingofshareholdersmayrejecta
nominationbyanabsolutemajorityofthevotescast
representingatleastonethirdoftheissuedcapital.
TheEnterpriseSectionoftheAmsterdamCourtof
Appealmayonapplicationdismissasupervisory
directorforneglectofduty,otherweightyreasons
orsignificantchangesincircumstancessuch
thatcontinuingassupervisorydirectorcannot
reasonablybedemandedofthecompany.The
applicationmaybesubmittedbythecompany,
representedbytheSupervisoryBoard,ora
representativedesignatedbythegeneralmeetingof
shareholdersortheworkscouncil.
Thegeneralmeetingofshareholdersmaypass
aresolutionofnoconfidenceintheentire
SupervisoryBoardbyanabsolutemajorityofthe
votescastrepresentingatleastonethirdofthe
issuedcapital.Sucharesolutionbringsabout
theimmediatedismissalofthemembersofthe
SupervisoryBoard.
Authority of the Board of Management to issue
shares and acquire treasury shares
TheBoardofManagementisonlyauthorisedto
issuesharesifthegeneralmeetingofshareholders
appointsitasthebodyauthorisedtoissueshares.
Thisappointmenthasnotbeenmade.Aresolution
bythegeneralmeetingofshareholdersissue
shares,toappointanotherbodyasthebody
authorisedtoissuesharesorthewithdrawalofa
resolutiontoappointcanonlybepassedonajoint
proposaloftheSupervisoryBoardandtheBoard
ofManagement.Aresolutiontoissuepreference
sharesbyabodyotherthanthegeneralmeeting
ofshareholdersisalwayssubjecttoco-operation
oftheSupervisoryBoardineachspecificcase.
Preferentialrightscanbelimitedorexcludedbythe
bodyappointedtodecideonshareissues.
Nedapmayonlyacquireitsownfullypaidshares
fornoconsideration.Acquisitionotherthanforno
considerationisonlypossibleif:
– theequitylesstheacquisitionpriceisnosmaller
thanthepaidupandcalledupportionofthe
capitalplusthereservesrequiredtobekeptby
lawandthearticlesofassociation;
– thenominalamountofthetreasurysharesisno
morethan50%oftheissuedsharecapital;and
– theGeneralMeetingofShareholdershas
soauthorisedtheBoardofManagement.
Thisauthorityisnotrequiredtoacquirethe
company’sownsharesordepositaryreceiptsfor
themfortransferthemtoemployeesunderan
applicableplan.
Amendment of the articles of association
Nedap’sarticlesofassociationmaybeamendedby
aresolutionofthegeneralmeetingofshareholders
afterpriorapprovalofsuchresolutionbythe
SupervisoryBoardandBoardofManagement.
Restrictive agreements with shareholders
TothebestofNedap’sknowledge,itsshareholders
arenotapartytoanagreementthatcouldleadto
restrictionsontradinginNedapsharesoronvoting
rights.
Significant matters on a take-over bid
Thestandbyroll-overcreditagreement(€14
million)thatNedaphasenteredintowiththebank
includesaprovisionunderwhichthebankcan
demandearlyrepaymentoftheloanifthereisa
significantchangeincontroloverNedap’sactivities.
98
Corporate Governance
Itisnotunusualforotherlong-termalliancesto
whichNedapisapartyalsotoincludethepossibility
ofterminatingtheagreementwithimmediateeffect
intheeventofa‘changeofcontrol’.Theoverall
scopeoftheseclausesisnotregardedassignificant
asmeantbytheDecreeonSection10ofthe
TakeoverDirective.
Nedaphasnotenteredintoagreementswith
directorsorotheremployeesunderwhich
personalrightstocompensationcanbederived
onterminationoftheiremploymentafterthe
settlementofatake-overbidforNedapshares.
99
Provisions of the Articles of Association
concerning Special Rights
TheSupervisoryBoardandtheBoardof
Managementhavebeengrantedcertainspecial
rights,including:
Art.10:
Proposaltoissuenewshares.
Art.11:
Proposaltorestrictorexcludepreferentialrights.
Art.18:
Determinationofthenumberofmembersofthe
BoardofManagement.
TheSupervisoryBoardhasbeengrantedcertain
specialrights,including:
Art.23:
Proposalforthesettingtheremunerationpolicyfor
theBoardofManagement.
Settingtheremunerationandothertermsof
employmentofeachmemberoftheBoardof
Management.
ProposaltoremuneratetheBoardofManagement
intheformofsharesorrightstoacquireshares
Art.24:
SettingthenumberofmembersoftheSupervisory
Board.
TheBoardmustcompriseatleastthreemembers.
Art.25:
NominationforappointmenttotheSupervisory
Board.
100
Corporate Governance
Provisions of the Articles of Association
concerning Approval of Resolutions by the Board
of Management in accordance with Article 20
Paragraph1:
Withoutprejudicetoprovisionselsewhereinthese
ArticlesofAssociation,thefollowingresolutionsby
theBoardofManagementshallbesubjecttothe
approvaloftheSupervisoryBoard:
a. resolutiontoissueoracquiresharesinordebt
instrumentspayablebytheCompanyordebt
instrumentspayablebyalimitedpartnershipor
generalpartnershipinwhichtheCompanyisa
fullyliablepartner;
b. co-operatingwiththeissueofregistered
depositaryreceiptsforshares;
c. applyingforthelistingofthedebtinstruments
ordepositaryreceiptsreferredtoinaandb
onaregulatedmarketormultilateraltrading
facility,asreferredtoinSection1:1oftheAct
onFinancialSupervisionorsystemcomparable
witharegulatedmarketormultilateraltrading
facilityinastatenotbeingaMemberStateor
anapplicationforthewithdrawalofsuchlisting;
d. aresolutiontoenterintoorcancelany
long-termco-operativerelationshipbetween
theCompany,oranydependentCompany,
andanotherlegalentityorCompany,orinits
capacityasafullyliablepartnerinalimited
partnershiporgeneralpartnership,ifsuch
co-operationorcancellationhasasubstantial
impactontheCompany;
e. aresolutiontohavetheCompanyorany
dependentCompanytakeanyinterestinthe
sharecapitalofanotherCompanyworthnoless
thanonefourthoftheCompany’sissuedcapital
plusreservesasreportedintheCompany’s
balancesheetandnotes,oraresolutionto
radicallyincreaseorreduceanysuchinterest;
f. aresolutiontomakeinvestmentsinvolving
anamountofnolessthanonefourthofthe
Company’sissuedcapitalplusreservesas
reportedintheCompany’sbalancesheetand
notes;
g. aproposaltoamendtheArticlesofAssociation;
h. aproposaltodissolvetheCompany;
i. aresolutiontofileapetitioninbankruptcyorto
applyforasuspensionofpayments;
j. aresolutiontoterminatetheemployment
contractsofasubstantialnumberofemployees
oftheCompanyoradependentCompany
simultaneouslyorwithinashortperiodoftime;
k. aresolutiontoimplementradicalchangesin
theworkingconditionsofasubstantialnumber
ofemployeesoftheCompanyoradependent
Company;
l. aproposaltoeffectuateareductioninthe
issuedcapital;
m. aproposaltolegallymergetheCompany
withinthemeaningofPart7ofBook2ofthe
NetherlandsCivilCode.
Paragraph2:
ThefollowingresolutionsbytheBoardof
Managementshallalsobesubjecttotheapproval
oftheSupervisoryBoard:
a. thedeterminationoftheoperationaland
financialobjectivesoftheCompany,the
strategypursuedtoachievetheseobjectives
andtheapplicablestrategicparameters;
b. aresolutiontoappointofficialsasreferredtoin
Article19,paragraph2,and/ortoconfirmation
oftheiradhocstatus;
c. aresolutiontoengageinlegalproceedings,
withtheexceptionoftakingprotective
measuresormeasureswhichbrooknodelay;
d. aresolutiontoacquire,disposeof,orencumber
registeredproperty;
e. aresolutiontoenterintoacontractof
suretyship;
f. aresolutiontoconcludealoanorcredit
agreement;shouldacreditagreementalready
havebeenconcluded,theconsentofthe
SupervisoryBoardshallnotbenecessaryforit
tobeutilised;
101
g. aresolutiontoenterintoamerger,ortoacquire,
windup,ordisposeofaparticipation;
h. aresolutiontofoundorclosedownabranch.
Paragraph3:
TheSupervisoryBoardmaydeterminethata
resolutionasreferredtoinparagraph2abovewill
notrequireitsapprovaliftheinterestinvolved
doesnotexceedavaluetobedeterminedbythe
SupervisoryBoard.
Paragraph4:
TheBoardofManagementrequirestheapproval
oftheGeneralMeetingfordecisionsinvolvinga
significantchangeintheidentityornatureofthe
Companyoritsbusinessundertakings,including:
a. transferofthebusinessundertakingsor
virtuallytheentirebusinessundertakingstoa
thirdparty;
b. thecreationordiscontinuationofa
long-standingco-operativerelationship
betweentheCompanyorasubsidiarywith
anotherlegalentityorCompanyorasafully
liablepartnerinagenerallimitedpartnership
ifsaidco-operationordiscontinuationthereof
hasfar-reachingimplicationsfortheCompany;
c. theacquisitionordisposalbytheCompany
orasubsidiaryofanassociateinthecapital
ofaCompanytothevalueofatleastone
thirdoftheassetsaccordingtothebalance
sheetwithnotesor,iftheCompanyprepares
aconsolidatedbalancesheet,accordingto
theconsolidatedbalancesheetwithnotes,as
statedinthemostrecentlyadoptedfinancial
statementsoftheCompany.
Paragraph5:
TheabsenceoftheapprovaloftheSupervisory
BoardortheGeneralMeetingforadecision
asintendedinthisarticledoesnotimpairthe
representativeauthorityoftheBoardofManagement
oritsmembers,exceptinrelationtoadecisionas
referredtoinparagraph1(l)andparagraph2(a).
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Translation
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T +31(0)544471111
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www.nedap.com
Nedap N.V.
P.O.Box6
NL-7140AAGroenlo
Credits
This is a translation of the original Dutch report.
In the event of any conflict of interpretation,
the Dutch will prevail.
104
Corporate Governance
105
financial year 2014See you in theeighty
fifth
Annual report of theN.V. NederlandscheApparatenfabriek‘Nedap’on it’s
financial year 2012
Annual report of theN.V. NederlandscheApparatenfabriek‘Nedap’on it’s
financial year 2012