rood-2021-12-31-en

ROODMICROTEC OVERVIEW

MESSAGE FROM THE CEO

I am very pleased with the performance of RoodMicrotec during 2021 and

how we have managed to operate during the last two years with the

COVID-19 pandemic around us. The year started with an uncertainty about

if or how long the pandemic would impact the business. However, the

further the year progressed, the more obvious it became that it had only

very limited impact. The first five months we continued to run short-time

work on a limited level to build up a buffer if things would change

dramatically, but the revenue development was very good during the first

half year and thus, we decided to stop the short-time work by the end of

May and go back to normal operations. This was also necessary to be able to

handle the increasing number of projects and work-load within the

Company. I’m very grateful for the support of all our employees, both long

term as well as newcomers, during these months, which helped us to

emerge from this pandemic much stronger than we were at the beginning.

With great pleasure, we could also secure the new financing with our long

term investors by the end of the first quarter. This enables us to focus on

growing the business for the future.

We have been running our test operations unit 24/7 during the year and the demand from our customers has

continued to be high the whole year. Thus, the revenue increase for this unit increased from EUR 5.4 million in

2020 to EUR 7.9 million in 2021, which means an increase of 46 %. As this is the core business of the Company it

is even better to see this increase. The outlook for 2022 is also very promising and especially this operational unit

is continuously growing. In 2021, we managed to run the unit with the same number of employees and machines

as the year before but in 2022, we will add both manpower as well as machinery to handle the increased demand.

We have already added a prober that can test parts under environmental conditions (for example pressure) and

we plan to add one additional Tester and a Tape & Reel machine throughout 2022.

The supply chain management unit is also growing thanks to the long term projects now starting to run in volume

production. The revenue increased from EUR 2.7 million in 2020 to EUR 3.4 million in 2021, which is an increase

of 27% year on year. And this is of course also driving the revenue in the other units, especially in the test

operations unit. We have seen a tendency from our customers to delay the start of new projects, but not to cancel

them, due to the pandemic but also due to the shortage of semiconductor components in the world. We have a

good inflow of requests for new projects, so we are in a good position to grow this business once the customers

can start to focus on new projects instead of the delivery of present components.

In the qualification and failure analysis unit, we unfortunately saw a decrease in revenue in 2021. This can be

explained by the decrease in new project starts due to the above mentioned reasons as well as the cyclical nature

of this business. Since a qualification of a new product takes about 6 months from start to finish, the revenue is

depending on the actual start of these parts of the projects. In the failure analysis part of this unit, we see a good

demand for our services, which is most notably based on the excellent know-how of our employees.

The Company is now optimally equipped for future growth - both in terms of the services offered and the financial

situation. The outlook for 2022 is good and I’m really looking forward to bringing the Company to the next level.

Once again, I would again like to express my thanks to the three main stakeholders in the Company, the

Customers, the Employees and the Owners, for their support in making this Company what it is and what it will

be.

Deventer, April 20, 2022

Martin Sallenhag, CEO

RoodMicrotec N.V.

ANNUAL REPORT 2021

PROFILE ROODMICROTEC

RoodMicrotec is the leading independent company for semiconductor supply and quality services. With more than

50 years’ experience in the semiconductor and electronics industry, RoodMicrotec is well-established as a highly

valued partner to many companies worldwide. We provide full-turnkey ASIC services for complex microchips that

are fully customized to handle specific applications for individual customers. In co-operation with selected

partners, we manage the complete development and production flow of the ASICs in the target volume, ranging

from low quantities up to multiple millions per year. Our turnkey solution includes design, project management,

wafer fab, wafer test, assembly, final test, qualification, logistics and failure analysis. Our flexible business model

allows customers, based on their special needs, to choose each service individually. All our services comply with

the industrial and quality requirements of the high reliability, aerospace, automotive, medical and industrial

sectors.

Services provided by RoodMicrotec

RoodMicrotec offers supply chain services, wafer & component testing, qualification & reliability investigations and

failure analysis for companies that need application-specific integrated circuits (ASICs). All services are offered in

a one-stop-shop package, whereby RoodMicrotec organizes and orchestrates all steps covering the full value chain

of these chips or components; from the design of a semiconductor all the way to the delivery of the end-product

(serial parts).

An ASIC is an integrated circuit that is built for a specific application or purpose that can be found in almost any

electronic device. Compared to an off-the-shelf standard chip, an ASIC can improve speed because it is specifically

designed to do one thing only and to do this well. It can also be made smaller with the benefit of using less

electrical power. The disadvantage of this circuit is that it can be more expensive to design and manufacture,

particularly if only a few units are needed. Business intellectual property (IP) is an important asset and this is why

a number of clients prefer to deal with partners that are based in Europe where IP is better protected, even

though most of the semiconductor business is concentrated in Asia.

ASICs are mostly designed based on an idea of a customer; mostly an OEM or a Fabless Company. Once the

design has been finalized, the product leaves the drawing board and can be turned into a physical product. The

steps required, can best be illustrated by means of the following picture, which also provides a better insight into

RoodMicrotec’s activities.

ANNUAL REPORT 2021

RoodMicrotec N.V.

The first step in turning the idea into a physical product is the production of wafers, which is normally done by

specialized companies based in the Far East. The wafers are then sent back to Europe and will be submitted to a

series of tests. The development of the test program, which is product specific as well, is done by RoodMicrotec

using in-house engineers. The test is performed in Nördlingen, where RoodMicrotec has the capability to test wafer

sizes from 6 to 12 inches.

Once the wafer tests have shown satisfactory results, the next step consists of the chip assembly. This is also

mostly outsourced to manufacturers in Asia. When a batch is ready, it is submitted to additional tests. In the case

of RoodMicrotec this also happens in Nördlingen.

Once all these tests have been completed and produce the required outcome, the next step is qualification. This is

the measurement of the performance of components under extreme conditions, like e.g. temperature tests, from

cold to heat testing, in dry and damp atmospheres and adjustable temperature change rates. As part of this

program, the ASIC is among others exposed to rapidly changing temperatures, varying from minus 40°C to plus

125°C for a time frame that can last 1,000 hours or even longer. Within RoodMicrotec, this happens both in

Nördlingen and in Stuttgart.

The tests performed on ASICs in a production environment separate the good from the bad components. After

that, the well-functioning ASICs are packed, stored and sent to the clients at the right time (logistics and just-in-

time-delivery). RoodMicrotec also keeps track of the failure rates and for which tests the ASICs failed.

Even when the ASIC passed the final tests, the chip or the finished product in which the ASIC is built into can fail.

In some cases (e.g. a high fail rate or products in the HiRel segment (e.g. safety-related)) this can trigger the

manufacturer of the product to investigate its cause and how it can be solved. This calls for failure analysis, which

within RoodMicrotec is operated at its Stuttgart unit.

An SCM contract is concluded for a specific period and for a certain estimated volume. During the life of the

contract RoodMicrotec manages all the steps in the value chain from the development phase (design and

prototyping) to the industrialization phase (prototype testing and qualification), all the way to production and

logistics. In the first two phases, the amounts RoodMicrotec can invoice are relatively modest. Once the volume

production starts, the sales are expected to rise over time and generate significant recurring sales after reaching

the volume production phase. The main advantage of this approach is that the clients have one single company

they are dealing with instead of a wide range of specialized companies. Apart from that, it helps to unburden the

client.

In addition to these SCM contracts, the Company will continue to secure contracts for all individual services it

offers, because this can open the doors to new clients and/or to SCM contracts as well. Experience shows that

client wins often happen through failure analyses as a first entry point. Besides, the industry as a whole needs a

flexible layer to absorb shocks in the demand for testing and qualification. This can also help to bring new clients

and/or partnerships.

The quality of services and handling speed have always been very important within this sector. For that reason,

RoodMicrotec will continue to strengthen its internal quality system through maintaining the certification according

ISO 9001, VDA 6.2 and ISO/IEC 17025, in addition with focus on risk assessment, which is especially important

for automotive customers. Part of this, also consists of further investments in new hi-tech equipment.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Markets served by RoodMicrotec

RoodMicrotec is focusing on the market segments automotive, industrial and medical which are still the key

drivers for the global semiconductor market and therefore they have the highest growth rates. Working in the

HiRel / aerospace segment is challenging, we still consider this area of importance to our business and foresee a

future increase. The components with most high quality and reliability demands are being deployed.

Automotive

Electronic components for vehicle applications are still one of the drivers for

the global semiconductor industry. Devices in the automotive industry are a

combination of high complexity, high quality demands and high volumes.

Applications range from car infotainment and communication with the outside

world up to autonomous vehicles.

New opportunities are seen by a specific trend that the industrial sector and

the HiRel industry will upgrade / adapt their requirements to automotive

standards.

Industrial

(Industry 4.0, IoT)

In the industry sector the main focus is on Industry 4.0 / Internet of Things.

The rapid change and complete novel production possibilities make projects

highly sophisticated.

Industry 4.0 / Internet of Things means extensive networking, using

innovative IT systems which enable entirely new production methods, smart

grids and smart metering. For example, starting an oven remotely, opening

and shutting down windows when the temperature changes, etc.

Medical (IoMT)

In the fields of medical electronic / biological chips the devices are subjected

to special requirements and complexity. No matter if they are used afterwards

within or outside the body, or whether they have physical connections

between internal and external devices – they have to be reliable and long-

lasting.

Medical projects are defined by long lead times due to complex test

environments, which contain a number of biological elements such as

temperature, humidity, acidity and heart rate.

HiRel / Aerospace

For the HiRel / aerospace sector we serve space exploration, solar sensors for

satellites, radio applications in (military) aviation, etc. The most possible

quality and reliable components are needed – quite similar to the automotive

sector. Also, more and more so-called components-off-the-shelf (COTS) are

used. These are commercial and therefore less expensive products.

Long lead times and low volumes, but very high commercial value

characterize these projects.

ANNUAL REPORT 2021

RoodMicrotec N.V.

ROODMICROTEC PERFORMANCE INDICATORS

RoodMicrotec N.V.

ANNUAL REPORT 2021

RoodMicrotec N.V.

KEY FIGURES + FIVE-YEAR SUMMARY

(x EUR 1,000 unless stated otherwise)

Results & Cash

Total income

14,532

11,874

13,217

13,425

12,127

EBITDA

2,786

1,345

1,539

1,383

949

EBITDA as % of total income

19.2%

11.3%

11.6%

10.3%

7.8%

EBIT (operating result)

1,227

-199

123

365

-69

EBIT as % of total income

8.4%

-1.7%

0.9%

2.7%

-0.6%

Profit (loss) before tax

1,038

-369

-87

124

-327

PBT as % of total income

7.1%

-3.1%

-0.7%

0.9%

-2.7%

Net result

1,435

-265

-73

125

-44

Net cash position (year end)

2,558

1,351

1,002

1,738

617

Net cash flow from operating activities

2,049

1,517

1,156

563

628

Capital, Debt & Liquidity Ratios

Total assets

14,995

14,337

14,294

13,606

13,051

Equity

5,583

3,844

3,945

5,209

4,767

Net debt2

374

1,870

2,431

915

2,451

Invested capital (net debt + equity)

5,957

5,714

6,376

6,124

7,218

Gearing ratio (net debt / invested capital)

33%

38%

15%

34%

Solvency (equity / total assets)

37%

27%

28%

38%

37%

Debt ratio (net debt / EBITDA)

0.1

1.4

1.6

0.7

2,6

Working capital

2,875

1,296

1,505

2,160

640

Working capital ratio (working capital / total income)

19.8%

10.9%

11.4%

16.1%

5.3%

ROCE (EBIT / average invested capital)

21.0%

-3.3%

2.0%

5.5%

-1.0%

Assets

Tangible and intangible fixed assets

8,295

9,177

9,404

7,682

8,451

Investments in (in)tangible fixed assets

681

866

1,895

576

1,199

Depreciation of (in)tangible fixed assets

1,559

1,544

1,416

1,018

Data per share (x EUR 1)

Equity

0.074

0.051

0.053

0.072

0.071

Operating result

0.016

-0.003

0.002

0.005

-0.001

Net cash flow from operating activities

0.027

0.020

0.015

0.008

0.009

Net result

0.019

-0.004

-0.001

0.002

-0.001

Share price: year end

0.201

0.183

0.247

0.250

0.310

Share price: highest

0.267

0.284

0.390

0.380

Share price: lowest

0.176

0.107

0.202

0.234

0.190

Other information

Number of issued shares at year end (in millions)

75.1

74.9

72.8

66.7

Average number of employees (FTE)

Total income / average FTE

163

138

143

133

Market capitalization

15.1

13.7

18.5

18.2

20.7

2021

2020

20191

2018

2017

RoodMicrotec N.V.

ANNUAL REPORT 2021

1 adoption of IFRS 16 Leases from 2019.

2 net debt previously reported is adjusted and includes lease liabilities, see page 73 capital risk management detailed calculation.

The years 2019 and 2020 are revised for comparability reasons.

SHARES / SHAREHOLDER INFORMATION

Listing

RoodMicrotec N.V. is a public limited liability company with its registered office in Deventer, the Netherlands and

has a listing on the Euronext Amsterdam Stock Exchange since 1986 for shares, registered under ISIN code:

NL0000440477 (ticker symbol: ROOD.AS).

Major Holdings in Listed Companies Disclosure Act

As at December 31, 2021 RoodMicrotec has received the following reports, with positions equal to or greater than

3%, in the context of the disclosure requirements of the Major Holding and Capital Interests in Securities-Issuing

Institutions pursuant to the Dutch Financial Supervision Act (Wft):

Percentage

Date reported

Blikkenburg B.V.

12.35%

February 1, 2018

P.C. van Leeuwen

5.53%

April 12, 2018

J.H. Langendoen

5.34%

March 18, 2021

Sitimo Ltd.

5.26%

August 2, 2018

Changes in the number of shares

As at December 31, 2021, 75,076,267 ordinary shares are issued (2020: 74,896,267). The Company holds 4,100

ordinary shares (2020: 4,100) as treasury shares.

Regulation to prevent insider trading

We comply with the disclosure and notification requirements in the rules on preventing market abuse and on

operating in markets in financial instruments in accordance with article 5.4 of the Dutch Financial Supervision Act

(Wft) and the Decree on Market Abuse (‘Besluit marktmisbruik Wft’). A broad circle of employees and consultants

have signed a declaration binding them to abide by these insider rules. The members of the Board of Management

and the Supervisory Board also comply with the disclosure requirements of Major Holdings and Capital Interests in

Securities-Issuing Institutions pursuant to the Wft. The Netherlands Authority for the Financial Markets (AFM)

monitors compliance with these statutory provisions.

Dividend

The management prefers to use the Company’s own resources to grow, to further improve its financial health and

strives to raise the market value of the share through such growth. In the next few years, we will seek a balance

between the intended debt reduction, essential investment and a fair return for shareholders. The Board of

Management proposes not to distribute any dividend for the 2021 financial year.

Anti-takeover measures

The Supervisory Board will be involved closely and in a timely fashion in the process concerning any offer for

shares in the Company, and the Board of Management and the Supervisory Board will immediately discuss any

request from a competing third-party bidder to examine Company information.

The Company does not have protective or control arrangements in place.

Investor relations

We are well aware of the importance of active, transparent and open communication with our stakeholders. For

this reason, since 2006 we have pursued an active investor relations policy through meetings and conference calls

with the financial press, analysts and investors.

For the coming years, we focus on intensifying the communication with our shareholders. In this context, we are

organizing meetings for our shareholders when expedient. Hopefully, the COVID-19 pandemic will come to an end

in the near future and we will be able to resume communication as part of our investor relations strategy not only

in a virtual way but also by way of meeting people and communicating with them face-to-face.

ANNUAL REPORT 2021

RoodMicrotec N.V.

As in the past years, if circumstances allow, we will again raise our industry-expert profile in 2022 by organizing

seminars highlighting our core activities and the corresponding services to Fabless Companies and OEMs. The

objective is to communicate our specific knowledge and share it with our customers and partners. We will further

intensify our focus on publicity for all areas.

Communication with the various target groups is also done through the Company’s corporate website,

www.roodmicrotec.com, and our newsletter.

General meeting of shareholders 2021

The minutes of the Annual General Meeting of Shareholders, held virtually by webcast on June 10, 2021, may be

inspected on the Company’s corporate website.

Financial calendar 2022

April 21, 2022

Conference call for financial press and analysts

April 28, 2022

Publication of agenda and invitation for the Annual General Meeting of Shareholders

June 9, 2022

Annual General Meeting of Shareholders

July 21, 2022

Publication interim report 2022

July 21, 2022

Conference call for financial press and analysts

October 13, 2022

Trading update quarter 3-2022

RoodMicrotec N.V.

ANNUAL REPORT 2021

REPORT OF THE BOARD OF MANAGEMENT

MEMBERS OF THE BOARD OF MANAGEMENT

Martin Sallenhag (m) & Arvid Ladega (m)

Martin Sallenhag, CEO & Director

•Joined RoodMicrotec in March 2015 as CTO

•CEO and Managing Director from 2016 to 2020

•Re-appointment to CEO and Managing Director in July 2020 for a four-year term

•Responsible for the overall management of the Company

•Experience in the semiconductor business in various management positions within Samsung Electronics, Dialog

Semiconductor and Ericsson for more than 25 years

•Holding a Master of Science degree in Electrical Engineering from Lund University with focus on Mixed Signal

ASIC design

Arvid Ladega, CFO & Director

•Joined RoodMicrotec in November 2016 as CFO

•Appointment to CFO and Managing Director in May 2019 for a four-year term

•Responsible for the finance department with special focus on investor relationships with the main investors

•Extensive experience as CFO in the industrial sector, having served in that capacity for almost 12 years at

Turn Key Pipeline Services B.V. and at Bartels Engineering, both in the Netherlands

•Holding a senior financial position at Wasco Coatings Europe, subsidiary to its Malaysian listed holder

•Holding a bachelor’s degree in economics

ANNUAL REPORT 2021

RoodMicrotec N.V.

MARKET & TRENDS

The market information RoodMicrotec uses is based on public sources like WSTS (World Semiconductor Trade

Statistics), IC Insights, SIA (Semiconductor Industry Association), McKinsey, Mordor, Semiconductor Intelligence,

published studies as well as from conferences and printed or online articles.

For 2021 RoodMicrotec expected a significant growth of the total income based on the Company’s forecast as well

as on the worldwide semiconductor market forecasts showing healthy growth rates and on the global economy

forecast published by the International Monetary Fund (IMF) with a growth of 5.5% – see IMF publication

January 20213.

Despite the COVID-19 pandemic, the global shortage of materials and further increases in delivery times, the

worldwide semiconductor market grew by 26,2% in 2021, showing double-digit growth in all geographical regions

(Europe 27,3%), see SIA-press release February 14, 20224. RoodMicrotec total income was EUR 14.5 million, 22%

higher than in 2020 which fits well with the worldwide and the European development; 94% of the total income is

made in European countries.

For 2022, the semiconductor market forecasts given by various analyst firms show a further but more moderate

growth in a range between 4% and 15.8% - depending on the institute, published by Semiconductor Intelligence5,

Semiconductor Digest6 and others. This is supported by the International Monetary Fund (IMF) projecting a global

economic growth of 4.4% - see IMF publication January 20227.

Despite this bright outlook for 2022, the next semiconductor market slowdown is coming, predicted during the

IFS2022, Future Horizons’ Annual Semiconductor Forecast conference8. One of the leading industry analysts,

Malcolm Penn said “All the signs of a recession are there. The market is overheating, and the road ahead is stony.”

Economic headwinds are e.g. rising inflation, shortage of materials, long delivery times, uncertainty on duration

and unknown disruptions on the pandemic.

In general technical and technological innovations will drive solid growth for the global semiconductor industry

over the coming years. As more and more cutting-edge devices emerge, such as electric cars and hybrids,

autonomous vehicles (nearly similar to “servers on wheels”), medical applications, 5G and already 6G, smart

cities, smart homes, smart phones and wearable devices, the number of semiconductor components is ever

expanding in the most applications and will further increase the demand for semiconductor products.

RoodMicrotec N.V.

ANNUAL REPORT 2021

3 https://www.imf.org/en/Publications/WEO/Issues/2021/01/26/2021-world-economic-outlook-update

4 https://www.semiconductors.org/global-semiconductor-sales-units-shipped-reach-all-time-highs-in-2021-as-industry-ramps-up-

production-amid-shortage/

5 http://www.semiconductorintelligence.com/2021-finishing-strong-2022-moderating/

6 https://www.semiconductor-digest.com/semi-market-forecast-remarkable-growth/

7 https://www.imf.org/en/Publications/WEO/Issues/2022/01/25/world-economic-outlook-update-january-2022

8 Various publications after the IFS2022 conference, e.g. https://www.electronicspecifier.com/news/penn-predicts-semiconductor-

market-slowdown-is-coming; https://www.eetimes.eu/chip-market-heading-toward-recession-analyst-warns/; https://

www.eenewseurope.com/news/prepare-chip-recession-says-analyst; https://pradeepstechpoints.wordpress.com/2022/01/18/

global-semiconductor-industry-grows-26-percent-in-2021-likely-to-grow-10-percent-in-2022-future-horizons/

Our strategic choice for our focused markets and technologies is supported by the following key findings in publicly

available information:

1.The automotive and industrial markets will both drive growth in demand for semiconductors.

2.The Internet of Things / Internet of Medical Things / Artificial Intelligence (AI) / 5G & 6G are the next growth

engines for the semiconductor industry, particularly for the sensor, communications and industrial segments.

3.High power electronics (e.g. battery management, energy efficiency, safety solutions), high frequency (e.g.

radar, Lidar solutions), photonics (e.g. image sensors, optical transceivers, optical chips) and GaN-technology

are indispensable for energy management systems, such as in electronic vehicles, solar energy networks, etc.

RoodMicrotec’s management team is positive about the future development of the Company. RoodMicrotec is

focusing on and serving the emerging technology sectors as described. For all these sectors the demand of

electronic devices will definitely continue to grow.

Automotive

RoodMicrotec is a recognized player in the automotive sector, which is a growing market also in the future and it

offers us many exciting opportunities. The healthy growth of this market will lead to additional demands for

electronic equipment and create a positive impact on the semiconductor industry.

The vehicle market in general is undergoing a complete structural change. Electric cars and hybrids are gaining

more and more ground. Statista/International Energy Agency (IEA) published that global electric car sales

(passenger cars and light trucks) doubled in 2021 reaching 6.6 million, compared to just 3 million in 20209. Car

manufacturers are publishing dates for stopping the manufacture of cars with combustion engines or dates when

they want to reach CO2-emission free production. Nevertheless the semiconductor content of cars is growing, as

they rely on greater intelligence, connectivity and sophisticated electronics (autonomous drive, vehicle-to-vehicle

(V2V) and vehicle-to-infrastructure (V2I) communications). In addition, growing interest in electric vehicles

focuses on on-board safety, convenience and environmental features. Advanced automotive electronics become

more widely available on all cars. However, the nature of the automotive industry model is also shifting in new

directions. Concepts of product ownership will give way to service propositions to deliver mobility to consumers

who will pay only for what they use e.g. ride sharing or car sharing. Creating and managing the systems to deliver

that mobility will depend heavily on complex electronics.

ANNUAL REPORT 2021

RoodMicrotec N.V.

9 https://www.statista.com/chart/26845/global-electric-car-sales/?utm_source=Statista+Newsletters&utm_campaign=f7e1f24338-

All_InfographTicker_daily_COM_AM_KW03_2022_Tu_COPY&utm_medium=email&utm_term=0_662f7ed75e-

f7e1f24338-314862429

The Statista Research Department10 published that the demand for automotive semiconductors is expected to

grow at a compound annual growth rate of between six and eight percent between 2020 and 2040. By 2040, the

automotive semiconductor market could reach between 150 and 200 billion US-Dollars.

In 2021 the sales of automotive ICs increased by 34,3% year-over-year to a high of $26.4 billion. The average

value of semiconductors in cars was about 650 Euro in 2021 but will grow in the years following with the

advancement of navigation, infotainment, and connectivity systems. It is expected that the value will grow

further, to about 1,500 Euro, if level 4/5 automation, electrification, and 5G networking are further developed for

autonomous driving cars.

Industrial (Industry 4.0, IoT)

Artificial Intelligence (AI), virtual reality (VR), smart cameras, 5G & 6G wireless technologies, 3D imaging, smarter

homes and IoT, among others, hold tremendous promises for further growth. The basic principle of Industry 4.0 /

IoT is that by connecting machines, equipment and systems, businesses are creating intelligent networks along

the entire value chain that can control each other autonomously.

Characteristic for industrial production in an Industry 4.0 environment is strong customization of products under

the conditions of high flexible (mass) production. The required automation technology is improved by the

introduction of methods of self-optimization, self-configuration, self-diagnosis, cognition and intelligent support of

workers in their increasingly complex work. Some examples for Industry 4.0 are machines that can predict failures

and trigger maintenance processes autonomously or self-organizing logistics that react to unexpected changes in

production.

Industry 4.0 is migrating into most of the industrial applications. It is mainly based on different sensors detecting

all kind of information as current, voltage, magnetic field, light, temperature, shock, humidity, etc. combined with

an intelligent integrated circuit and a transmission function RFID, etc. There is an increasing demand on such

Mixed Signal integrated circuits to reduce space, save energy or create faster performing systems.

IoT is a growth engine for the semiconductor industry. IoT Analytics published in September 2021 a market

update11: Despite the chip shortage and COVID-19’s extended impact on the supply chain, the market for the

Internet of Things continues to grow. In 2021, IoT Analytics expects the global number of connected IoT devices

to grow 9%, to 12.3 billion active endpoints. By 2025, there will likely be more than 27 billion IoT connections.

In addition to Industry 4.0, IoT describes the complete world of different sensors within the electronics and is

connected to detect and control temperature, humidity, light, electricity, etc. in all kind of different applications in

RoodMicrotec N.V.

ANNUAL REPORT 2021

10 https://www.statista.com/statistics/277926/projected-global-automotive-semiconductor-sales/ and https://www.statista.com/

statistics/498265/cagr-main-semiconductor-target-markets/

11 https://iot-analytics.com/number-connected-iot-devices/

the home (electricity, refrigerator, light, body, etc.), in cars (V2V-, V2I-, internal vehicle communication), in

agriculture, in medical fields and elsewhere.

In all cases, the connected devices that transmit information across the relevant networks rely on innovations

from semiconductor players - highly integrated microchip designs, for instance, and very low-power functions in

certain applications. The semiconductor companies that can test, qualify and deliver these and other innovations

to OEMs and others that are building IoT-products and applications will play an important role in the development

of the market.

Medical (IoMT)

Within the industrial applications, the medical segment including the IoMT sector (Internet of Medical Things), with

ongoing innovations, is growing at a tremendous pace. Main drivers beside COVID-19 are the growing medical IoT

device adoption, the explosion of health data, technological innovations like edge computing, AI and VR as well as

underlying social megatrends (Source: Objectbox case study, June 2021, “IoT, Edge Computing, and Digitalization

in Healthcare”12). With the development of connected medical devices, health services are gradually shifting from

a clinical setting to the home environment. From fitness trackers that monitor activity to flexible patches that can

detect heart rate, body temperature and more, up to remote patient monitoring, these applications will fuel capital

investment in healthcare and contribute to the growth in medical applications of semiconductors. The IoMT sector

has been broadly segmented into the categories like telemedicine and video/remote consultation, connected

imaging, consumer medical including above named wearables, in-patient monitoring as well as hospital operations

and workflow management.

ANNUAL REPORT 2021

RoodMicrotec N.V.

12 https://objectbox.io/iot-edge-computing-and-digitalization-in-healthcare/

VISION AND MISSION

Vision

In today’s technology driven world, semiconductor content is strongly increasing with an urgent focus on the

electrification of carbon fuel powered devices. This includes ‘quality conscious’ market sectors like the automotive,

aerospace and medical equipment industry, as well as markets for industrial equipment and data communication.

Successful companies in these markets can be recognized by their innovative technologies, their focus on core

competencies, and an intimate cooperation with selected supply chain partners. Electronics manufacturers and

Fabless IC suppliers are creating a significantly growing market for outsourced services, including manufacturing

and supply of qualified products.

RoodMicrotec is a specialized service provider focusing on the support of customers in the automotive, medical

and industrial market sectors. We have the expertise to offer a complete range of high-quality services that enable

the manufacturing and supply of reliable semiconductor devices.

Mission

To be the innovative, independent and reliable partner of choice for semiconductor component supply, test and

reliability services.

STRATEGY

•We focus on automotive, industrial and medical markets and plan to grow further in these sectors.

•We invest in new high-technological equipment to strengthen our technical position to be able to service these

markets.

•We work with Fabless Companies to show that RoodMicrotec is a competitive SCM partner and encourage them

to strengthen the partnership with our company.

•We take full responsibility as a supply chain specialist for every step in the supply chain. This means that we

will be involved on a long-term basis in the whole project, from the very beginning up to mass production.

•We continue to look for smaller, faster turnaround opportunities in Qualification & Failure Analysis and Test

Operations.

•We aim to be an important player in the automotive market, Industry 4.0 and IoT/IoMT by becoming one of

the preferred partners in various consortiums that are developing new technologies and applications and by

increasing our scale through partnerships.

•We develop our industry partnerships, since it is essential to be part of networks and being active in them. For

that reason, we have strong partnerships or work very closely with institutes, wafer fabs, assembly houses,

design houses and universities as well as industry groups and clusters.

•We further strengthen our internal quality system through maintaining the certification according ISO 9001,

VDA 6.2 and ISO/IEC 17025, with focus on risk assessment.

The above items will result in a good combination of long-term contracts with long lead times and short-term

orders with shorter lead times. In future we certainly need short-term orders to generate cash flow while

continuing to focus on long-term contracts, which will bring much more stable and predictable recurring sales and

underpin our role as the supply chain specialist.

Furthermore, we are:

•Establishing direct contact with Tier 1 customers as an ASIC provider. This enables us to take on more of the

tasks in the complete flow, generating higher sales volumes.

•Strengthening relationships with customers, suppliers and appropriate partners (foundries, assemblers, design

houses, OEMs and system houses). This makes us stronger as well as a better known and important player.

•Continuing to focus on development of new technologies and special requirements from the market, such as

optical sensors, high power and RF solutions for the automotive and industrial requirements.

•Strengthening our brand awareness in the market by organizing seminars on e.g. qualification, failure analysis

and supply chain activities.

RoodMicrotec N.V.

ANNUAL REPORT 2021

SWOT ANALYSIS

ANNUAL REPORT 2021

RoodMicrotec N.V.

OPERATIONAL UNITS

RoodMicrotec offers turnkey services to its customers through its three main units: Supply Chain Management,

Test Operations and Qualification & Failure Analysis. These three units offer a complete set of services to meet the

requirements for turnkey projects.

Supply Chain Management (SCM)

In this operational unit, RoodMicrotec supports customers who wish to launch high-quality semiconductor devices,

in particular ASICs, on the worldwide market. RoodMicrotec provides comprehensive services, from the beginning

of the development process (with design and assembly partners) all the way to production and delivery to the

customers. The services provided to bring a product successfully to the market include specification and

engineering support during all phases of the project, test engineering, wafer test, assembly (through partners),

final test, back-end, qualification and reliability support, failure analysis, field return management, storage and

logistics.

RoodMicrotec achieves this by qualifying and testing the ASIC products and, on request, executing the entire

project management specific for processes on the automotive and industrial markets.

RoodMicrotec also handles the complete (turnkey) industrialization of ASICs from the customer’s idea up to the

final product including all market specific (automotive and industrial) quality assurance activities. RoodMicrotec

manages the process ‘end-to-end’ but also provides each individual step separately.

The year 2021 was again characterized by the global shortage of materials and further increases in delivery times,

especially for lead frames availability and the very high capacity utilization of the factories. This was coupled with

the negative impact of the Coronavirus pandemic on the personnel situation in the global supply chain.

By taking appropriate measures, RoodMicrotec succeeded in servicing most customer orders on schedule.

Test Operations

This operational unit consists of two functional areas, test engineering and wafer & component testing. The test

engineering area is a support function that provides the wafer & component testing area with solutions for high

volume production.

Test Engineering provides complete test solutions for a wide range of devices like mixed-signal, digital, analog

and RF ICs. The team of highly skilled engineers develops test programs, probe cards and load boards for

characterization, production and qualification to the highest standards as required by the automotive and high-

reliability sectors (AEC-Q, ESCC, MIL-STD, JEDEC, TELCORDIA, IEC, and DIN). Services include design for test,

test time reduction, yield improvement and data analysis. Our experts are experienced in migrating complete test

cells, production ramp-up and product validation. With massive parallel testing at high-test coverages the test

times are reduced. All these services are also available as on-site engineering support for customers.

RoodMicrotec N.V.

ANNUAL REPORT 2021

We offer extensive knowledge concerning several test platforms, e.g. Teradyne Flex, Cohu D10, Advantest/SZ,

Verigy 93k as well as LabView based solutions. Developed and enhanced over decades, the Company has a wide

expertise in mixed-signal, digital, analog, memory, RF, image sensors, MEMS and PC applications.

In 2021, we enlarged the wafer test capabilities for optical transceivers for the 5G sector. We also invested in

testing of high power devices, which we will expand in 2022 to be able to handle all the requirements of the

standard AQG 324 for automotive power modules.

Wafer & component testing is the heart of the production function within RoodMicrotec, which means running

an automated test floor 24 hour per day, 7 days per week. In this area, we perform the services of wafer testing,

component testing, component programming, straightening & scanning and end of line of the semiconductor

devices.

The test cells utilize state-of-the-art Automated Test Equipment (ATE) as well as specialized PC-based solutions.

We compensate limitations of the test system by integrating high performance external equipment such as

network analyzers or RF signal sources into the test cell. This approach increases flexibility while limiting test

costs.

Our cooperation with the wafer prober manufacturer AEM enabled us to install the Afore wafer level test system in

our operations throughout 2021. With this system, we are able to test complete or sawn wafers also for special

applications and under pressure or with different gases.

To meet the increasing demands and to guarantee production capacity, we invested in new handling systems.

For more flexibility and also to be able to better serve device in tubes, we plan to invest in a new EOL-system,

which should be installed by the middle of 2022.

With the growing number of test systems and the need to guarantee the stability of the climatic requirements in

our Test Operations we installed a new chiller as redundant system.

Due to the ongoing Corona pandemic, we implemented operational activities according to customer requirements

and special setups without personal contact throughout the year 2021. We mastered the realization of very specific

high-tech solutions just through remote instructions from the customer specialists - without the need for on-site

presence.

The main goal is to provide service and support to our customers through the whole project by continuous

improvement of the processes and systems related to it, offering excellent customer care and in-time delivery of

the highest quality. To ensure this, a tight communication structure between the parties involved is essential, so

that everything fits the customers’ needs. Close relationships are the key to support our customers at the best

possible rate so that they in return can meet their obligations.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Qualification & Failure Analysis

The focus of the operational unit Qualification & Failure Analysis is on one hand the verification of the reliability of

electrical and electronic systems and single devices and on the other hand the failure and technology analysis. For

these purposes, methods like thermal shock (air-to-air and liquid-to-liquid), mechanical shock and vibration,

humidity chambers and others are available. For failure and material analysis equipment (scanning electron

microscope with energy dispersive X-ray detection, X-ray microscopy with computer tomography, scanning

acoustic microscopy) combined with large experience in cross-sectioning, electrical failure analysis and knowledge

in anamnesis is present. This broad spectrum of features allows the investigation from single passive and active

components up to complete printed circuit board assemblies. The Qualification & Failure Analysis unit is accredited

according ISO 17025.

One of our key competences is the ability to perform various types of robustness validation tests acc. to

standards or adapted to the specific requirements of the customer. Due to the in-house capability of qualification

and analysis methods, both quality checks and examination of failures can be done by handshake from one desk to

the other. Within one work flow all investigations from burn-in to hermeticity test, from temperature cycles to

solderability are possible.

Our portfolio incorporates identification of fake devices, long-term-storage with quality check in parallel, moisture

sensitivity classification and much more, whether this is manual single test or automatic rapid test with high

throughput as well for electrical or optical characterization. Inspection by means of digital microscope and

automatic-optical inspection system, X-ray of a single component or of thousands high-reliability devices with

tracking of serial numbers and each single picture are also offered.

Failure analysis of defective devices is carried out using physical, chemical and metallurgical analysis methods.

These methods are used to confirm errors reported by the customer, to identify the error area and error

mechanisms, and to initiate corrective actions for quality improvement. Due to ever-increasing integration

densities, the mutual influence of the individual components is also increasing. As a result, the situation is

increasingly common, in which a failed component is only the victim, but not the cause of the failure. Therefore,

the trend is clearly moving away from pure component analysis towards an overall view of the system and its

environment, comparable to an anamnesis, a medical term.

Counterfeit checks are increasingly becoming part of our analyses. The critical component availability on the

world market is forcing more and more companies to procure components from brokers or other dubious sources.

It is therefore often necessary to check the originality of such components. Our practice also shows that this is

urgently needed. Statistically, 50% of the suspicious components we examined in 2021 were counterfeits.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Research and development

To remain a strategic supplier to our customers as well as being on the leading edge of technology it is necessary

to invest in new technologies. This is done through internal research and development projects as well as through

external publicly funded projects. In order to remain a well-recognized player it is necessary to increase the brand

awareness, which is done by publishing technical articles, brief comprehensive videos and by giving presentations

around Europe during exhibitions and conferences and by organizing seminars.

The internal research and development projects are mainly focused on new areas of capability. The decision has

been taken to focus on three main areas; high power electronics, high frequency solutions and photonics. In

addition, the Company invested in innovations by means of partnerships in publicly funded projects.

Publicly funded projects

EuroPAT-MASIP, GaNScan and APreMedI have successfully been finalized and the results from these projects

will be implemented and used for future customer projects.

APPLAUSE (Advanced packaging for photonics, optics and electronics for low cost manufacturing in Europe) is the

active running funding project at present. This project fosters the European semiconductor value chain by building

new tools, methods and processes for high volume manufacturing and is funded national and international. A

consortium of 31 key players for packaging of electronics, optics and photonics, leading equipment suppliers and

testing experts from 11 countries are working on this project. RoodMicrotec has taken over the leadership of the

work package 6 “testing, reliability, failure analysis and metrology”. Several subtasks have been finished in 2021,

the remaining subtasks will be finished during 2022. The project is running until end of October 2022.

For new publicly funded projects the European Union has set aside a high budget for the next 3 years. In its portal

also the VDE/VDI tenders new projects. Especially in the field of innovation and digital technology RoodMicrotec

will monitor the possibilities and will be be engaged in getting high technological projects.

Quality Management

RoodMicrotec takes care of the provision of products at the "right" time in agreed quality according to defined

safety and reliability requirements. The basis for this is our quality management, which includes forward-looking

quality planning and its implementation in all relevant businesses, services and production processes.

‘Quality First’ is our guiding principle

flawless service

The Company is certified under ISO9001 and VDA6.2 which both include risk management as part of the systems.

The Company has an implementation where this is discussed in the management meetings as well as in the

Supervisory Board meetings on a regular basis. The management team is also conducting management reviews on

a yearly basis where this is one of the points of review. Except for COVID-19 pandemic risks, such as absence of

key people or delivery delays, no major risks have been identified during 2021. Both the management as well as

the Supervisory Board are aware of the volatility of the semiconductor industry and the need to be able to offer

the right solutions to the customers. To be able to do this it is necessary to make certain invests which can be

large for this company size but necessary to stay competitive. All major investments are decided in the

Supervisory Board meetings based on business model calculations.

RoodMicrotec’s laboratories for Qualification & Failure Analysis in Nördlingen and Stuttgart are accredited by the

DAkkS, the German accreditation body, as being compliant with ISO/IEC 17025, ‘General requirements for the

competence of testing and calibration laboratories’. This accreditation is valid only for the scope of accreditation

which is listed in the appendix of the certificates (PL-12120-01-01 and PL-12120-01-02).

ANNUAL REPORT 2021

RoodMicrotec N.V.

Human Resources

COVID-19 still was a burden on our private and working life but since mid of 2021 the order situation improved

after another 5 months short time work and we were able to work almost normally again with support of digital

systems. Some of our employees continued voluntarily working from home so we had reduced number of

colleagues present in the Company and therefore less risk of infections.

The measures taken with masks, distance between the working places, home offices and general care, have

enabled us to offer a safe environment for our employees.

The average number of full-time employees (FTE) in 2021 was 89, including a reduction of 4 FTEs due to short

time work in the German entity. At end of 2021 we employed 92 full time equivalent employees. All in all, we got

through the year 2021 very well, we were always able to motivate our employees to always do their best to carry

out the current tasks with the usual high quality.

Candidate members of the Supervisory Board and the Board of Management become primary nominated on the

basis of experience, expertise and personality. When selecting candidate members for the Supervisory Board and

the Board of Management, the Company strives for diversity in composition in terms of nationality and ethnicity,

gender, age and background in education and work experience, technical expertise and competencies. On the

Board of Management and the Supervisory Board in 2021 there was no diversity in terms of gender.

RoodMicrotec N.V.

ANNUAL REPORT 2021

FINANCIAL RESULTS

Total income and result

In 2021, RoodMicrotec’s total income came in 22% higher than in 2020 at EUR 14.5 million

(2020: EUR 11.9 million), with 94% of its total sales in the European countries.

In the first half of 2021, wafers were ordered and received for one of our SCM customers to manage the supply

chain during a planned change of an assembly house. About EUR 0.5 million has been realized for these wafers as

total income and approximately the same amount has been accounted for in the cost for raw materials and

consumables. The parts will be delivered during 2022, where only part of the selling price will be recognized in the

total income but with a positive impact on the net result.

Total income from the automotive sector increased in 2021 by 37% to EUR 6.9 million (2020: EUR 5.0 million) and

represents 48% of the total income.Total income in the industrial / medical sector increased in 2021 by 15% to

EUR 6.3 million (2020: EUR 5.5 million) and represents 43% of the total income. The HiRel / aerospace segment

increased by 2% to EUR 0.9 million (2020: EUR 0.9 million). The total income in this sector mainly consists of

failure analysis and qualification work and this is very much depending on the design cycles at our customers.

Total income in other sectors declined by 8% to EUR 0.5 million (2020: EUR 0.5 million).

Total income by market sector:

(x EUR 1,000)

2021

2020

change

Automotive

6,886

5,021

37.1%

Industrial / Medical

6,270

5,454

15.0%

HiRel / Aerospace

926

908

2.0%

Others

450

491

-8.4%

Total

14,532

11,874

22.4%

Throughout 2021, the Test Operations unit showed a sharp increase, which was related to the general up-swing in

the market and the excellent position RoodMicrotec has with its customers. The Supply Chain Management unit

also showed a strong increase compared to last year. Some of the new projects have not yet been moved into

volume production due to the COVID-19 pandemic. In the second half of 2021, we also saw a decrease in total

income compared to the first half of 2021 due to the world-wide shortage of components and raw materials in the

semiconductor industry. RoodMicrotec has put actions in place to mitigate the impacts as far as possible. In 2021,

the Qualification & Failure Analysis unit saw a decrease compared to 2020 due to the delayed start of new

projects. Some of these delayed projects started in the second half of 2021, so the total income in this unit

increased compared to the first half of 2021.

Total income results per operational unit:

(x EUR 1,000)

2021

2020

change

Supply Chain Management

3,364

2,659

26.5%

Test Operations

7,938

5,429

46.2%

Qualification & Failure Analysis

3,230

3,786

-14.7%

Total

14,532

11,874

22.4%

ANNUAL REPORT 2021

RoodMicrotec N.V.

In 2021, EBITDA was EUR 2.8 million and the EBITDA margin came in at 19% (2020: 11%). Personnel expenses

increased by 9%, mainly due to less short time work in the German locations compared to 2020 and personnel

expenses included an expense of approximately EUR 0.4 million (2020: nil) for the employees bonus scheme. The

average number of employees in 2021 on a full-time basis was 89 (2020: 86). A reduction of 4 FTE was due to

short-time work during the first five months of 2021.

(x EUR 1,000)

2021

2020

change

EBITDA

2,786

1,345

107.1%

% of total income

19%

11%

The net result in 2021 was EUR 1.4 million positive, an increase of EUR 1.7 million versus 2020. The increase in

net result was mainly attributable to the increase in total income.

Financial position

The balance sheet total increased to EUR 15.0 million in 2021 (2020: EUR 14.3 million). Equity increased by

EUR 1.8 million, from EUR 3.8 million to EUR 5.6 million. Net income generated in 2021 amounting EUR 1.4 million

positive increased equity. Solvency was 37% at year-end 2021, compared to 27% at year-end 2020.

(x EUR 1,000)

2021

2020

change

Net cash from operating activities

2,049

1,517

35.1%

Capital expenditure

557

745

-25.2%

At year-end 2021, RoodMicrotec had a net cash position of EUR 2.6 million (year-end 2020: EUR 1.4 million). The

increase in the cash position was largely caused by an improvement of cash generated from operating activities.

The operating activities contributed positively to the cash position with EUR 2.0 million.

Capital expenditure amounted to EUR 0.6 million (2020: EUR 0.7 million). In 2021 RoodMicrotec invested in a new

pick-and-place handler as well as an upgrade of the climatic system in the Nördlingen facility. Other investments

mainly comprised replacement and expansion investments in materials and resources to facilitate growth.

Financing expenditures was also reduced to EUR 0.2 million in 2021 due to the new financing of the old bond loan.

Financial objectives

•Our primary long-term objective is a substantial growth in sales.

•EBITDA is targeted at 12-17% of total income and EBIT at 6-12% of total income by continuously optimizing

our operations through cost awareness and efficiency improvements.

•Profit before taxes should be in range between 4% and 10% of total income, which we only can achieve if we

raise production volumes, sales and efficiency.

•A strong solvency ratio of between 38-50% helps us to strengthen confidence among customers, to guarantee

continuity, to obtain loans and secure growth.

•We strive for a working capital ratio between 1.0 and 1.5. As a service provider and project organization this is

a key element of our balance sheet. We must be able to secure sufficient funding to invest promptly in

projects. Working capital is therefore vital to our future growth.

•For the debt ratio (net interest-bearing debt divided by EBITDA) our target is between 1.0 and 4.0, which is

important for growth financing and for obtaining long-term projects. This ratio gives us a solid position that

can be defended vis-à-vis the bank syndicates.

RoodMicrotec N.V.

ANNUAL REPORT 2021

MAIN DEVELOPMENTS DURING 2021

COVID-19 pandemic

COVID-19 continued to change the way we work through more mobile office, more distance keeping between

individuals and additional safety measures in the office to reduce risks. We also experienced fewer direct meetings

with customers and suppliers. The virtual meeting strategy has shown to work but we are looking forward to more

face-to-face meetings with our main customers in the near future.

The business started to pick up speed already in the second half of 2020 and this trend has continued during

2021. To be well prepared for a potential down-turn during 2021 (which did not happen) we started the year with

a minimal short-term work implementation during the first 5 months. As of beginning June we have returned to

normal operations since the work load in our different departments was back on a high level. The support from our

employees during the months in 2020 and 2021 when we did short-time work was excellent.

Total income

Our realized total income of EUR 14.5 million showed an overall increase of 22% compared to 2020. The second

half of 2021 the total income was EUR 7.2 million, an increase of 11% compared to the second half of 2020

(EUR 6.5 million). The total income in the second half year stayed stable and at same level as the first half of

2021. The Test Operations unit showed a sharp increase over 2020 of 46% which was related to the general up-

swing in the market and the excellent position RoodMicrotec has with its customers. The Supply Chain

Management unit also showed a strong increase of 27% compared to last year but some of the new projects have

not yet been moved into volume production due to the delay caused by the pandemic in 2020. The Qualification &

Failure Analysis unit saw a decrease compared to 2020 due to delayed start of new projects.

PIC wafer level testing using Jenoptik’s UFO-Probe® card technology

RoodMicrotec now offers a test service for this new type of PIC testing at wafer level to customers from the

semiconductor industry. Jenoptik provides the necessary technology platform with the UFO Probe® Card and thus

supports RoodMicrotec in setting up the respective test structure.

The UFO Probe® Card from Jenoptik enables the testing of electrical and optical components with only one probe

card - in parallel, not sequentially as with previous solutions. Thus, wafer level tests can be performed in a more

time saving manner and the throughput is significantly increased. As a Plug & Play solution, the hybrid probe card

can be integrated directly and without much of an adaption effort into RoodMicrotec’s existing standard IC wafer

probers. The existing infrastructure can be used immediately, thus simplifying the conversion of test procedures

from the classic probe card for electrical components to the hybrid UFO Probe® Card within the manufacturing

process.

Strategic cooperation with AEM

AEM’s Afore Wafer Level Test Solutions engineering team installed the AIOLOS Wafer Level Test Handlers at the

RoodMicrotec facility in Nördlingen. With this handler, RoodMicrotec is now able to offer its customers additional

capabilities in the fast-growing markets of sensor and wafer-frame testing. This system is also set up for 200 mm

wafer frame probing of a wide range of semiconductor devices. RoodMicrotec will not only extend its business

areas, but also its testing capabilities.

Through this partnership, AEM will have a broader opportunity to showcase its system demonstrations to

customers in Central Europe.

Book-to-bill

The order book is higher level than in the beginning of the year, even though the total income was higher than

budgeted. This means that the book-to-bill ratio was above 1 for the year.

SCM projects

During 2021 we have continued to progress the booked SCM projects towards production through test program

development as well as qualification work. Some of the projects are now close to ramp-up and we start to see the

first volumes for these customers. The SCM team is continuing to prepare for future projects with pre-

development of certain functions. The COVID-19 situation together with the shortage of semiconductor

components have unfortunately put the focus from our customers on present project, thereby delaying new

projects (but not cancelling them).

ANNUAL REPORT 2021

RoodMicrotec N.V.

Collaboration/partnerships

We continue to add additional collaboration agreements with several European leading and successful Fabless

Companies (design houses) to strengthen our position in supply chain management. The design houses also felt a

need to select a specialist supplier who could support them in manufacturing high-grade microchips (high-

reliability chips) when they move these products to the market. Our experience, knowledge and infrastructure,

including our equipment, proved to be a perfect match to the design house's needs.

APPLAUSE publicly funded project

A consortium of 31 key players for packaging of electronics, optics and photonics, leading equipment suppliers and

testing experts from 11 countries are involved in APPLAUSE, “Advanced packaging for photonics, optics and

electronics for low cost manufacturing in Europe,”. The project fosters the European semiconductor value chain by

building new tools, methods and processes for high volume manufacturing. As a part of the Electronics

Components and Systems for European Leadership Joint Undertaking (ECSEL JU), the 34M€ total budget for the

three-year project is co-funded by Horizon 2020 and national funding agencies and industries.

Being the leader of work package 6 (Testing, Reliability, Failure Analysis & Metrology) for all six industrial use

cases, RoodMicrotec contributes with its core competence in quality and reliability. As national coordinator for the

nine German partners, RoodMicrotec also is the main contact for the German funding agency.

Certification and accreditation

Since April 2019, RoodMicrotec is VDA6.2 certified. This extension to the ISO9001:2015 is focused on automotive

requirements. In the first half of 2021, we passed the monitoring audit.

In September the DAkkS accreditation of the Company’s Qualification & Failure Analysis laboratories in Nördlingen

and Stuttgart according ISO/IEC 17025 has been successfully renewed for another five years.

Communication and seminars

Due to the corona pandemic, we could not offer seminars or face-to-face events in 2021, the second year in a

row, as we have done in the past. At several online events /conferences we gave lectures on various subjects to

interested parties through webcasts and digital platforms. In addition we published several newsletters and forced

our activities in LinkedIn with a number of interesting posts at our RoodMicrotec-account.

Completion of secured bond loan refinancing

The refinancing of the bond loan issued in 2014 has been completed by the end of the first quarter 2021. A group

of long-time investors provides the refinancing in the amount of EUR 2.6 million. Also the management

participates so show their confidence in the Company’s business plans and future projects.

Verdict ratified by the Court of Appeal

The Court of Appeal has given a verdict in the legal proceedings concerning the dispute about (non) fulfillment of

contractual obligations of a debtor. The Court of Appeal ratified the verdicts of the Subdistrict Court of Zwolle and

sentenced the debtor to bear the costs of appeal.

Legal proceeding regarding perpetual bond

Prime Capital Debt SCS, SICAV-FIS – Robus Recovery Sub-Fund ("Robus") initiated legal proceedings before the

Regional Court of Hamburg (Landgericht Hamburg) against the wholly owned subsidiary RoodMicrotec GmbH.

Robus is the holder of the perpetual bond (Genussscheine) of EUR 1,994k that RoodMicrotec GmbH issued in 2010

and of the perpetual bond of EUR 500k that RoodMicrotec GmbH issued in 2012. The case that Robus had brought

before the Regional Court of Hamburg regards the 2012 perpetual bond only and RoodMicrotec GmbH had been

informed by Robus that the total amount claimed in the proceedings amounts to EUR 644k to be increased with

interest (statutory interest (Basiszinssatz) plus 5%). Robus had informed RoodMicrotec GmbH that it had reserved

its rights to also initiate litigation regarding the 2010 perpetual bond.

RoodMicrotec GmbH contested all allegations and claims, and denied that any compensation payments were due

on the perpetual bonds or that any grounds for extraordinary termination of the perpetual bonds existed.

Accordingly, RoodMicrotec GmbH asked the court to reject Robus' claim.

In February 2022 both parties agreed on a settlement, see events after balance sheet date on page 96.

RoodMicrotec N.V.

ANNUAL REPORT 2021

FOCUS AND ACTIONS 2022

Focus

The automotive and industrial markets will remain the main focus for RoodMicrotec since they are expected to

grow significantly over the next years. We also see a great need for new and innovative solutions in the medical

market to help the ever-aging population of the world. ASIC turnkey services in conjunction with several Fabless

design houses and OEM customers are essential to win new projects for industrialization and recurring business.

Delivery of high quality services and solutions is important in the markets where we operate. We will therefore

continue to improve our internal processes to excel the already very high-quality standard that RoodMicrotec is

operating under. This will increase our competitiveness and also give our customers an advantage in the market.

We have a very good base of machinery and personnel to be able to meet the demands from our customers and

the markets. It is however important to follow the trends in the market as well as the demands from the

customers to define new services and solutions.

With the publicly funded projects that we engage in, we are improving our technical position for the future and

they also bring new opportunities to engage with potential future customers.

Actions 2022

•Continue to invest in knowledge and know-how in three future technology areas:

–high power electronics (for example battery management and safety solutions)

–high frequency (for example radar and LIDAR solutions for autonomous driving)

–photonics wafer testing (for example image sensors, optical transceivers, photonic chips)

•Analyze and invest in new machinery where necessary. This can be for capacity, capability or technological

reasons and will apply in all areas such as tester, prober, handler, stress chambers or failure analysis

equipment.

•Add one additional V93k and a new tape & reel system to increase capacity.

•Widen focus on modern packages such as Wafer Level Chip Scale Packages (WLCSP) and chip-on-board

requirements.

•Improve brand awareness of RoodMicrotec through professional articles and seminars for customers and other

stakeholders.

•Strengthen the customer base in our key market segments.

•Further cooperation with partners in national / international publicly funded projects to be part in the

development process of modern technologies and to enlarge our business potential.

•The number of employees in 2022 will increase slightly to support the higher expected total income and higher

volumes from our customers.

•During 2022 we will review and define the future Environmental, Social and Governance (ESG) targets for the

Company.

OUTLOOK

RoodMicrotec expects the total income in 2022 to be in the range of EUR 15.0 million to EUR 15.6 million with a

positive result before tax. The current situation in the world regarding lead-times for wafers and packaging as well

as shipment delays may impact the ability to achieve the expected total income. The war in Ukraine could also

have an impact on the business but in the short term we don’t see any significant impacts. RoodMicrotec is

keeping a close eye on the situation and is doing everything possible to mitigate any impact.

Deventer, April 20, 2022

Board of Management

O.M. Sallenhag, CEO

A. Ladega, CFO

ANNUAL REPORT 2021

RoodMicrotec N.V.

SUPERVISION AND GOVERNANCE

MEMBERS OF THE SUPERVISORY BOARD

Chairman

(1943) (British)

•Mr. Victor Tee joined the Supervisory Board in 2009.

•He became Chairman in 2013; re-elected in 2021 for a final term of

one year.

•More than 40 years of experience in the Electronics and Semiconductor

industries.

•He started his career as an electronic systems design engineer and has held

senior management positions at Philips, Siliconix and most recently as CEO

at Millennium Microtech.

•Vic lived and worked in Asia for 20 years and operated internationally.

•His wide network is based on both operational and board levels globally.

Victor George Tee (m)

(1966) (Dutch)

•Mr. Marc Verstraeten joined the Supervisory Board in 2019 for four years.

•He studied Business Economics at Tilburg University (Netherlands), as well

as Postdoctoral Accountancy (Registeraccountant).

•After university, he started working at KPMG and worked there for 10 years

as an external auditor in the international audit practice of KPMG in the

Netherlands, including due diligence specialty.

•Beginning of 2001, Marc left KPMG and joined DOCDATA N.V. where he

worked for almost 17 years in Finance functions (i.e. Corporate Controller,

Finance Director, CFO).

•He has extensive experience with public listing at Euronext Amsterdam,

corporate governance, compliance, internal audit, legal (Company

Secretary), M&A, investor relations, stakeholder management and

Boardroom dynamics (Secretary of Supervisory Board).

•Currently, Marc is working independent on a flexible basis and available for

assignments as advisor in the broad Finance domain, interim CFO and

Supervisory Board member.

Marc Verstraeten (m)

(1954) (Dutch)

•Mr. Ruud van der Linden joined the Supervisory Board in 2021 for four

years.

•He holds a Master degree in Physics, Mathematics and Educational

Technology from the University of Twente.

•In a career spanning more than 35 years in the Electronics and

Semiconductor industries he has held senior management positions at

Philips, NXP, Hitachi, Freecom, Redmere and is currently a Venture Partner

at Capital-E and CEO of Silicon Line GmbH.

•He has significant global experience from serving in Europe, the USA and

Asia.

•As an experienced board member he is well connected with a broad personal

network in the industries the Company serves.

Ruud van der Linden

(m)

RoodMicrotec N.V.

ANNUAL REPORT 2021

REPORT OF THE SUPERVISORY BOARD

We hereby present the 2021 Annual Report of RoodMicrotec N.V. as prepared by the Board of Management in

accordance with article 26 of the Articles of Association of the Company.

The 2021 Annual Report, prepared by the Board of Management and including the 2021 financial statements, has

been audited by KPMG Accountants N.V. The independent auditor’s report relating to the financial statements is

included on pages 107 to 117 of this report. We discussed the Annual Report with the Board of Management in

the auditor’s presence. Based on this meeting, we are convinced that the Annual Report forms a solid basis for

the Supervisory Board’s accountability for its supervisory duties. During the process of preparation and audit of

the 2021 financial statements of the Company, the Supervisory Board has closely supervised the Board of

Management during their management of key topics, such as potential implications of the COVID-19 pandemic on

valuation and reporting assessments in general, the going concern assessment, the goodwill impairment test and

the valuation of the pension plan assets and the perpetual loan bonds.

We propose to the Annual General Meeting of Shareholders to be held on June 9, 2022 to:

•adopt the financial statements for the financial year 2021;

•discharge the Board of Management from liability for its conduct of business in 2021;

•discharge the Supervisory Board from liability for its supervision of the management in 2021;

•add the net profit for the financial year 2021 to the retained earnings reserve within equity.

RoodMicrotec in 2021

The Company continued with the turnaround seen over the past few years building a healthy enterprise with a

more certain future. The robustness of the Company in weathering the COVID-19 pandemic in 2020 ensured an

excellent start to 2021 with a healthy order book that remained strong throughout the year. The prudent

operational disciplines to protect the Company from further SARS-CoV-2 variants proved effective; hence there

was no negative impact on the business throughout the year.

The uncertainties of market trends particularly in the automotive sector, where issues regarding the long-term

move to electrification are still developing have become somewhat clearer given the measures various

Governments are putting in place for firm dates to regulate the changeover. This and other industrial and

technology changes provide a clear indication of an assured growth of the semiconductor industry which is

further supported by the latest industry forecasts that have a direct impact on the future prospects of the

Company. The leading indicators for production levels and for manufacturing equipment development are in line

with this view. The only major point of concern throughout the year was caused by supply chain shortages in the

semiconductor industry as a whole which were closely monitored by management and contingency plans acted on

when necessary to ensure uninterrupted supplies to customers. This particular issue was well managed by the

team and had little impact on the results.

The morale of the workforce remains high, largely due to the excellent openness and internal communication

provided by the management. Although it was again necessary to cancel the annual Works Council meetings for a

second year due to the continuing pandemic we are not aware of any outstanding issues to be addressed.

The business development strategy remains as previously reported by the Board of Management, hence the key

elements of the strategy are embedded into the personal objectives of the CEO and waterfalled throughout the

Company as usual. Overall, we are satisfied the Company remains on the correct strategy for its current size and

position in the industry with projects that match well with the underlying technological changes. The historical

trends of the semiconductor industry regarding periodical volatility within a strong long-term growth have not

changed and can be reasonably expected to continue for the foreseeable future.

The regular combined meetings of the Board of Management and Supervisory Board progress well with excellent

teamwork. The addition of Mr. Ruud van der Linden to the Supervisory Board last year will ensure a continued

balance and effective coverage of supervision for the Company after Mr. Tee steps down at the Annual General

Meeting of Shareholders to be held on June 9, 2022.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Supervisory Board meeting schedule

The Supervisory Board gives the highest priority to good governance practice. The Supervisory Board met with

the Board of Management on a scheduled monthly basis during 2021. The regular joint Boards meetings in 2021

were held virtually. In addition, the Boards met virtually during the general meeting of shareholders held on

June 10, 2021. In total, the Supervisory Board met for 11 scheduled meetings and 7 ad hoc meetings for various

reasons.

A number of other additional meetings were held between individual members of the Board of Management and

the Supervisory Board. These other meetings included frequent regular contacts between the CEO and the

Chairman of the Supervisory Board, as well as various contacts between the CFO and Mr. Verstraeten. In the

past, these meetings were held in various locations of mutual convenience, including corporate head office in

Deventer, at the production sites in Stuttgart and Nördlingen and at convenient locations close to other coinciding

meetings such as visits to customers and meetings with the Works Council. Typically, these meetings were held

either face to face or by using teleconferencing. However in 2021, unfortunately all meetings had to be held

virtually again, using the various digital platforms (e.g. Microsoft Teams, Skype, Zoom), due to the COVID-19

pandemic and the continuing travel bans or limitations within Europe.

In the Supervisory Board meetings in 2021, the following topics were reviewed and discussed extensively:

•the impact of the COVID-19 pandemic on our employees’ health and the Company’s operational

performance;

•the business update, operational and financial targets;

•development and changes in the management team and appointments;

•the financial position, liquidity & banking relations;

•relevant capital expenditures;

•business development strategy (including strategic M&A options and opportunities);

•the scope and strategy of the Company and the related risk profile;

•corporate governance issues;

•evaluation of KPMG Accountants N.V., following the 2020 audit as the second year of their engagement

granted for the audit of the financial statements for the financial years 2019, 2020, 2021 and 2022;

•communication with investors & analysts;

•succession planning and recruitment;

•risk management;

•legal disputes and court case;

•remuneration;

•financial audit;

•publishing of press releases;

•ESG implementation plan:

•actions to improve cyber security.

RoodMicrotec N.V. does not have a separate Audit Committee due to the size of the Company and thus the

functions of the Audit Committee are handled by the Supervisory Board.

The Supervisory Board was able to provide personal support on several occasions throughout the year for

strategic business discussions, business development strategy including strategic M&A options and opportunities,

both internally and externally with potential alliance partners.

An occasional amount of illness or call to other duties meant some of the combined Board meetings had an

absence of members though all meetings had a majority attendance for adequate decision making.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Outlook 2022

Prior to 2021 we had concluded the limited size of the Company operating in a public environment as a share-

issuing listed entity was hampered by relatively extensive costs and other non-business related requirements. So

the Supervisory Board in concert with the Management Board started an active examination of the options to

reposition the Company strategically in order to a.) remove or mitigate these burdens or b.) move the Company

to a new position in the industry. This was monitored on a monthly basis throughout the year based on the

following four scenarios, identified in the 2020 annual report.

•continue “as-is”, focusing on autonomous growth;

•grow through a buy-and-build strategy;

•strategic M&A, including joining a larger ecosystem;

•delisting the Company and continue as a private company in a standalone scenario, potentially including

an MBO and search for a financial sponsor.

Metrics for valuation of the enterprise were derived with independent third party support in order to gauge the

scope for engaging with a trade sale opportunity and what shareholder support would be required.

Following various discussions with potential trade partners and considering ‘as-is’ options we unanimously favor a

strategic M&A (joining a larger ecosystem) as first choice followed by a reduced cost ‘as-is’ if suitable economies

can be established. The latter option has the intention to continue building value until such time a suitable first

option appears. This conclusion has been reinforced by very positive trade discussions so far. The continuation of

the public health pandemic throughout 2021 caused opportunities to be put on hold but we remain hopeful that

market forces in 2022 will be more positive and that the excellent results of the Company in 2021 make the

possibilities greater.

So for 2022 the Supervisory Board and the Management Board will focus on these two scenarios. Other options

will be considered should they emerge.

Supervisory Board composition and evaluation

The Supervisory Board comprises of three independent members who meet the requirements of the Corporate

Governance Code. Following the prescribed 8 (4+4) year term of Mr. Tee, he was reappointed with shareholder

approval for further 2-year terms in 2017 and 2019 and an exceptional one year term in 2021 due to the need

for oversight continuity given the significant changes of the Board of Management and the Supervisory Boards

over that period and the severe restrictions imposed during the COVID-19 pandemic. Mr. Tee will finally step

down at the 2022 Annual General Meeting of Shareholders leaving two independent members which given their

high levels of complementary expertise are considered to be fully adequate for a Company of this size. The

choice of Mr. Ruud van der Linden to join the Supervisory Board was partly based on his additional experience

and connections in the investment sector of the industry which may bring opportunities as the Company develops

further.

The Company is extremely grateful for the tremendous contribution that Mr. Tee has given the Company during a

period of more than thirteen years. The combined Board of Management and Supervisory Board intend to

demonstrate their great appreciation to Mr. Tee at the upcoming Annual General Meeting of Shareholders, when

we will say a formal goodbye to him.

There were no separate committee meetings held in 2021 as all topics were discussed in the joint meetings with

the Board of Management following an independent review by the Supervisory Board, with the exception of one

remuneration committee meeting in which the remuneration of the Board of Management was discussed and

evaluated against a set of companies that can be viewed as representative to its business. Based on this the

updated remuneration was implemented. The composition of the Board of Management was also discussed during

this meeting and the conclusion was that the Board of Management is adequately composed for running the

Company in the present stage and during the coming years. This remuneration committee meeting also prepared

the Remuneration Policy 2020-2023, which was approved by the Annual General Meeting of Shareholders held on

July 23, 2020.

The regular monthly meetings of the combined Boards that operated through 2021 provided an open dialog

platform for sound governance of the Company. In addition, each of the Boards separately and independently

evaluated their performance and where necessary the ISO control documents were updated accordingly. An

additional benefit of the combined Boards approach is the provision of 360-degree feedback regarding

performance.

ANNUAL REPORT 2021

RoodMicrotec N.V.

With the regular interaction between the Board of Management and the Supervisory Board where all items are

discussed and the insight the Supervisory Board has in the daily work of the Company, it is not deemed

necessary to install a separate internal audit function.

The knowledge of the Board of Management and Supervisory Board was reviewed in the board meetings and is

considered to be well established for the Company.

Member of the Supervisory Board

Start Current Term

End Current Term

Mr. Victor George Tee (Chairman)

2021

2022

Mr. Marc Verstraeten

2019

2023

Mr. Ruud van der Linden

2021

2025

Deventer, April 20, 2022

Supervisory Board

V.G. Tee, Chairman

M.E.T. Verstraeten

R.J.W.M. van der Linden

RoodMicrotec N.V.

ANNUAL REPORT 2021

RISK AND RISK MANAGEMENT

General

Our policy is aimed at growth in conjunction with a relative reduction of market risks. Operational, market-related

and financial aspects play an ever-increasing role in achieving this.

Operational

Total income in Test Operations inclusive Test Engineering make up approximately 55% (2020: 46%) of total

income. In this sector, we have a strong reputation and we have built up a relationship of trust with our major

customers. In response to this trend – moving semiconductor manufacturing to Asia - we have strongly increased

the spread within our total customer base over the past few years, which has reduced risk. While we have long-

term contracts with many of our major customers, these contracts do not include purchase guarantees. Risks are

mitigated by intensive communication with customers on anticipated volumes. Other total income is made in the

sectors Supply Chain Management and in Qualification & Failure Analysis. We focus on high-end work and long-

term projects specifically in Supply Chain Management, which further reduces operating risks. During 2021, the

sales from one of our long-term customers again increased and it is now exceeding 18% of our total income. This

is mitigated by a very close cooperation with this customer on all levels, from technical meetings through

production planning to sales and management discussions. In the situation, that our customer base will decrease

and will not be compensated by new customers this will impact our growth ambitions or even could result in

decreasing financial results.

Costs - Globalization is putting increasing pressure on prices in all areas, but particularly in our Test Operations.

This requires constant focus on improving cost management, reducing costs, optimizing the test equipment load

and intelligent solutions. Salaries and associated pension commitments are also monitored closely, as they make

up more than half of our total costs. In other market sectors in which high-quality staff is being used, there is a

limited staff surplus cost risk. There is a shortage of highly trained technical staff in Europe. In case there is a

significant drop in business, we are not able to significantly decrease our cost level on a short notice, which could

impact the financial results.

Qualified staff - In view of the advanced technological level of our operations, the Company is highly dependent

on qualified staff. As it is not always easy to find such staff in the employment market, we have opted to set up

our own training program in order to reduce the risk of not being able to attract qualified staff. We also collaborate

with engineering firms and are in close contact with universities in order to attract bachelor and master students.

The fact that RoodMicrotec has a branch in the University City Stuttgart puts it in a better position to recruit high-

quality staff. In the situation that we experience significant difficulties in hiring qualified staff, this may impact our

financial results from both a total income and cost perspective.

Market risks

We operate in a highly cyclical market but in general, the semiconductor market will continue to grow in the

future. The demand of semiconductors in Europe continues to rise, as manufacturers in Europe desire

semiconductors to be produced closer to or within the continent. We have opted for this growth segment – the

supply chain from Europe to Asia and back to Europe and the rest of the world – from the point of view of risk

management as it better safeguards continuity.

In the past, various customers (IDMs) used RoodMicrotec as a way to generate additional sales in a short-time

span, which increased the Company’s exposure to market fluctuations. In view of this, we reduced our risk and

are increasingly focusing on customers who wish to outsource their test activities on a long-term basis, such as

Fabless Companies and OEMs. This exposes the Company to the upswings and downturns of the market, but also

allows it to generate sales during downturns to customers who opt for outsourcing.

RoodMicrotec’s ideal and preferred form of outsourcing is for customers to contract out the entire supply chain,

including all their test activities, qualification & failure analysis and logistics. The Company offers a turnkey

solution to the automotive, industrial, medical and HiRel / aerospace markets.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Competition

In Europe we face competition from a number of countries. We aim to minimize our risk as an independent

European semiconductor company by basing our sales and operations in the Netherlands, Germany and Britain

and having agents in Denmark, Finland, France, Poland, Sweden, Switzerland, United Kingdom, Israel and India as

our main partners.

Finance

The Company’s activities are exposed to a variety of financial risks: market risks (including currency risks), credit

risks and liquidity risks. The Company’s overall risk management program - with respect to the use of the main

financial instruments - is described below.

Financial markets and liquidity risks - We operate in a capital-intensive market, where significant fluctuations

are a normal phenomenon. Dealing with such fluctuations requires having enough available cash. The financial

market circumstances may influence and/or damage the financing of our activities. Considering fluctuations in the

financial markets, we prepare sensitivity analysis in our 5-years-rolling forecasts, cash flow prognosis, and

investment budgets. Based on these analyses, we conclude in early stage equity line arrangements with our large

investors and / or loan contracts.

Currency risks - So far, we have made most of our sales in Europe. Since most of our work is invoiced in Euros

we have only limited exposure to currency fluctuations. We try to limit our currency risks as much as possible, and

when transactions in other currencies increase will hedge our currency risks. We will continue to actively monitor

this aspect, certainly in view of the international operations that are under development.

Product liability risks - We have taken out adequate liability insurance for production faults, which is particularly

important for the automotive industry.

Risks related to the share listing and audit - The Company has a limited market capitalization and is a small

public limited liability company listed at the Euronext stock exchange in Amsterdam. For such a small listed

Company, the expenses related to listing requirements, such as audit fees, investor relations expenses, fees from

regulatory bodies (e.g. Euronext, AFM), tend to have a relatively big impact on the Company’s operating result.

Furthermore, quite some small listed companies in the Netherlands appear to have profound difficulty to engage

an auditing firm to audit their financial statements. Should the Company’s current auditing firm, KPMG

Accountants N.V., decide to terminate their audit engagement with the Company, this could result in the Company

not being able to engage another auditor. And thus, this might result in the Company not being able to meet the

listing requirements from Euronext and the Company’s statutory obligations in this respect.

COVID-19

The disruption of the global economy by the coronavirus at the beginning of 2020 reduced growth worldwide but

the downswing in the semiconductor industry was limited in time. During the second half of 2020 and whole year

2021 the semiconductor industry has been growing again. In addition, the worldwide semiconductor market is

cyclical and volatile. Predictions are cautious and just for one or two years; no real long-term outlook is available.

In this respect, RoodMicrotec has identified the following as the major risks for the Company:

•Supply chain: Since RoodMicrotec is dependent on the delivery of parts and services from partners this can

have an impact of the ability of the Company to deliver its services to the customers. Communication with our

suppliers has been intensified to get early warning if the situation changes and to be able to find solutions. At

this stage, no interruptions have been identified.

•Sales and profitability: If the demand of services from our customers is reducing it will have direct impact on

the total income and profitability. We are keeping in close contact with our customers to get their continuous

view on the situation so we can act accordingly. Internal control over purchases, as well as load of our different

departments, are monitored regularly.

•Government assistance: If there is a reduced demand from our customer resulting in reduced work for

RoodMicrotec we are in the position to run “short-time work”. This is a system in Germany where the

government is paying the salaries for these hours that people are not working. This helps in situations like

COVID-19.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Internal risk management and control system

For our IT–systems, we have opted for an integral tandem solution in one location. To control risks, the

mainframes that are part of the tandem are physically separated and situated in special fireproof environments.

All sites are connected to the integral tandem system, so as to reduce risks. The various companies, including the

holding company in the Netherlands, the branch offices and the operational units, all work with the same IT-

system, which allows for better monitoring of financial results.

Based on what is summarized above, RoodMicrotec feels that its internal risk management and control systems

provide a reasonable degree of assurance that the financial reporting does not contain any material inaccuracies

and that this system has worked adequately in the year under review. There are no reasons to believe that the

system should not work adequately in the current financial year.

Climate related risks

Based on an initial assessment of climate related risks and our regular risk assessments we have concluded that

currently no material climate risks at the short term have been identified. As action for 2022 we will review and

define the future Environmental, Social and Governance (ESG) targets for the Company and provide sufficient

insight into the sustainability risks.

Strategic plans

Strategic plans are discussed annually, adjusted where necessary, and then translated into budgets that are

regularly compared to the actual state of affairs. Monthly reports are prepared that may give rise to corrective

actions. The internal quoting process is subjected to a monthly (quality) audit, which investigates whether internal

guidelines have been adhered to.

Internal evaluations and external audits

A schedule is drawn up every year for internal evaluations and external audits. Our employees and external

auditors then act upon this schedule. Both the internal evaluations and the external audits may result in corrective

measures; the feedback on internal control observations from the external audits are discussed by the Supervisory

Board (audit committee).

Audit committee

The audit committee comprises all members of the Supervisory Board.

Letter of representation

Every year, the RoodMicrotec Board of Management signs a detailed statement concerning financial reports and

external audits.

Actions taken in 2021

During 2021, RoodMicrotec has tracked the potential risks in different ways. The sales team prepares new

forecasts on a monthly basis, which are then presented to the Board of Management. The follow up on this is done

with respect to investments, personnel and other operating expenses. The financial results are also reviewed on a

monthly basis; the results are prepared by the finance department and then approved by the Board of

Management and discussed with the Supervisory Board during the monthly Board Calls.

Market risks and Competition are mainly reviewed in the monthly sales and strategy meetings. In these meetings

the sales team as well as the department leaders present their view on these topics and the Board of Management

then reports these findings to the Supervisory Board. If there are material changes in any of these areas during

the year, it is reported separately.

The Board of Management had regular meetings with the IT team to review security risks when it comes to the

infrastructure. Based on this various investments have been done to improve the security of the systems. The

quality department has the responsibility to control the internal processes and these are reviewed once a year

with the Board of Management in a management review. If urgent actions are needed additional meetings are

held.

ANNUAL REPORT 2021

RoodMicrotec N.V.

CORPORATE SOCIAL RESPONSIBILITY

1.Introduction

Underpinning RoodMicrotec’s commitment to responsible corporate citizenship and the pursuit of a sustainable

future - economic, social and environmental - the Code of Conduct sets out guiding principles on integrity and

ethics in business conduct. They govern RoodMicrotec’s business decisions and actions throughout the world and

apply equally to corporate actions and to the behavior of individual employees in conducting RoodMicrotec’s

business. They are subject to applicable laws.

The Code of Conduct is not all-encompassing but formulate minimum requirements of behavior. There is room to

specify further local rules of business conduct. The Code of Conduct, which has been adopted by the Board of

Management and approved by the Supervisory Board, is reviewed on a regular basis and revised if necessary.

2.General commitment

RoodMicrotec’s mission is to be a knowledge and technology driven service provider in the field of modern devices

that is able to handle the whole chain for complex requirements as well as individual services. In a world where

technology increasingly touches every aspect of our daily lives, RoodMicrotec aspires to be a leading solutions

provider in the semiconductor industry in the areas of automotive, industrial, medical and HiRel / aerospace.

RoodMicrotec wishes to be a responsible partner in society, acting with integrity towards its shareholders,

customers, employees, suppliers and business partners, competitors, governments and their agencies and others

who can be affected by its activities. RoodMicrotec duly observes the applicable rules of the law of the countries in

which it operates and regularly reviews its interests and those of affected persons or entities in order to ensure a

healthy, long-term relationship with them. RoodMicrotec endeavors to adapt to local situations in order to take the

most appropriate approach to possible problems within the bounds of applicable law and responsible conduct. In

this respect RoodMicrotec supports the principle of dialogue and cooperation with all parties involved.

2.1.Human rights

With due regard to the Universal Declaration of Human Rights, which states that all parties in society, including

corporate persons, have a duty to respect and safeguard human rights, and within the framework of the legitimate

role of businesses, RoodMicrotec supports and respects human rights and strives to ensure that its activities do

not make it an accessory to infringements of human rights.

2.2.Free market competition

RoodMicrotec supports the principle of free market competition as a basis for conducting its business and observes

applicable competition laws and regulations.

2.3.Product safety

RoodMicrotec aims, at all times, to supply safe products and services.

2.4.Privacy

The privacy of personally identifiable information about customers, employees, business partners and other

individuals will be protected.

2.5.Environmental protection

Consistent with RoodMicrotec’s commitment to sustainable development, it will do all that is reasonable and

practicable to minimize any adverse effects of its activities on the environment.

3.Commitment towards customers

RoodMicrotec’s goal is to constantly delight each customer with breakthroughs both large and small. To this end,

the Company seeks to maintain an ongoing dialogue with its customers. RoodMicrotec is committed to listen to

and learn from them, so that it is able to design and deliver the solutions they really want and need. RoodMicrotec

will always deal with its customers in a fair and forthright manner, maintaining the highest levels of integrity.

RoodMicrotec N.V.

ANNUAL REPORT 2021

4.Commitment towards shareholders

It is of central importance to RoodMicrotec to conduct its operations in accordance with the highest standards of

internationally accepted principles of good corporate governance. RoodMicrotec aims to achieve long-term value

creation and a satisfactory return on equity, with the intention if possible, of providing a sustainable dividend

payment to the shareholders, while at the same time retaining sufficient funds in the Company to generate

profitable growth. RoodMicrotec attaches great value to its relations with its shareholders and the financial

markets and provides timely, regular and reliable information on its activities, structure, financial position and

performance.

5.Commitment towards employees

RoodMicrotec values its employees as a key resource. An atmosphere of good employee communication,

involvement and responsibility is of central importance, and an employee’s personal development and optimum

use of talents is encouraged.

5.1.Employee relations

RoodMicrotec shall – within the framework of (local) law and common local practice – inform its employees at

least once a year about the general course of the business.

5.2.General statement about Conventions of the ILO

The Conventions of the International Labor Organization are addressed to member states of the International

Labor Organization, not to individuals or companies. RoodMicrotec supports the aim of the International Labor

Organization to arrive at universally accepted labor standards. RoodMicrotec has adopted internal procedures and

guidelines with respect to topics covered by the seven Fundamental Conventions of the International Labor

Organization, such as forced labor, the right to organize, collective bargaining, discrimination and child labor.

5.3.Right to organize

RoodMicrotec recognizes and respects the freedom of employees to choose whether or not to establish or to

associate with any organization of their own choosing (including labor unions) without RoodMicrotec’s prior

authorization. RoodMicrotec will not make the employment of a worker subject to the condition that he/she shall

not join a union or shall relinquish trade union membership. Furthermore, RoodMicrotec will not cause the

dismissal of – or otherwise prejudice – a worker by reason of union membership. RoodMicrotec will not interfere

with or finance labor organizations or take other actions with the object of placing such organization under the

control of RoodMicrotec.

5.4.Collective bargaining

RoodMicrotec respects – within the framework of law, regulations and prevailing labor relations and employment

practices – the right of its employees to be represented by labor unions and other employee organizations.

RoodMicrotec will engage in negotiations, either on its own behalf or through employers’ associations, with a view

to reaching agreement on employment conditions.

5.5.Employment conditions

Employees will be informed about the outcome of the negotiations on employment conditions with employee

representatives, if applicable, and RoodMicrotec shall ensure that employment policies regarding pay and/or job

grading, working hours, health and safety, are clear and transparent and fully compliant with all applicable

national laws.

5.6.Discrimination

Every employee has equal opportunities and will be treated equally in employment and occupation. RoodMicrotec

offers equal pay for equal work performed at equal levels at similar locations. No form of harassment or

discrimination in respect of employment and occupation will be tolerated, such as discrimination based on race,

color, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.

5.7.Health and safety

RoodMicrotec will do all that is reasonable and practicable to protect the health and safety of its employees. The

measures taken with masks, distance between the working places, home offices and general care, have enabled

us to offer a safe environment for our employees during the COVID-19 pandemic.

5.8.Equal and fair treatment

Every employee has equal opportunities and will be treated equally in employment and occupation regardless of

personal background, race, gender, nationality, age, sexual preference or religious belief. The same applies to the

recruitment of employees. RoodMicrotec strives to offer equal pay for equal work performed at equal levels at

similar locations. No form of harassment or discrimination will be tolerated.

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5.9.Wages and payment

Remuneration must be consistent with the provisions of all applicable wage laws, including those relating to

minimum wages, overtime hours and legally mandated benefits. Any disciplinary wage deductions must be in

conformity with local law. Wages will be paid regularly in check form, via bank account, or in exceptional cases, in

cash. Employees will be informed about the composition of their pay and benefits in a detailed and clear manner.

5.10.Working hours

Working weeks are not to exceed the maximum set by local law and should not be more than 60 hours, including

overtime, except in emergency or exceptional circumstances to meet short-term business demand. Employees will

be allowed at least one day off per seven-day period. Overtime work shall be voluntary, unless agreed in a

collective labor agreement or union contact, or, in emergency or exceptional circumstances, to meet short-term

business demand.

5.11.Employee development

Both RoodMicrotec and its employees have a commitment to each other to make every effort to ensure high levels

of performance and employability. To this end, RoodMicrotec will provide relevant training opportunities to its

employees.

5.12.Harassment

RoodMicrotec will not tolerate harsh and inhumane treatment, including sexual harassment, sexual abuse, corporal

punishment, bullying, mental or physical coercion or verbal abuse of RoodMicrotec employees, or the threat of any

such treatment.

6.Commitment towards suppliers and business partners

RoodMicrotec pursues mutually beneficial relationships with its suppliers and business partners. It seeks to awards

business to suppliers and business partners who are committed to act fairly and with integrity towards their

stakeholders and who observe the applicable laws of the countries in which they operate.

7.Assets and information

7.1.Use and protection of assets

Each employee is responsible for the proper use, protection and conservation of RoodMicrotec’s assets and

resources as well as confidential information disclosed to RoodMicrotec by its business partners. RoodMicrotec’s

assets and resources as well as any opportunities arising by virtue of one’s position, are to be used solely to

pursue and achieve RoodMicrotec’s goals and not for personal benefit.

7.2.Improper disclosure

RoodMicrotec regards information for the purpose of its business as a corporate asset that must be protected

against loss, infringement and improper use and disclosure.

RoodMicrotec is committed not to make use of information disclosed to it by a third party if it is suspected that the

discloser thereby violates an obligation of confidentiality, unless the information:

•is generally available to the public, other than as a result of disclosure by RoodMicrotec;

•has been independently developed by RoodMicrotec;

•or becomes available to RoodMicrotec either on a non-confidential basis from a third party who is not bound by

any confidentiality obligations or by operation of law.

7.3.Insider trading

All employees shall comply with RoodMicrotec’s insider trading rules. This means that non-public information

which might influence the market price of RoodMicrotec shares shall be kept in strict confidence until publicly

released by authorized management. Furthermore, employees who have sensitive information, which could

influence the price of RoodMicrotec shares and related rights, must refrain from directly or indirectly executing

transactions in RoodMicrotec shares and related rights. Additionally, employees have to comply with statutory

rules and regulations concerning insider trading with respect to securities of other listed companies.

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8.Engagement outside RoodMicrotec

RoodMicrotec expects its employees to be fully dedicated to the proper fulfillment of their jobs and to avoid any

(potential) conflict of their personal or business activities and financial interests with such commitment. Any

engagement outside RoodMicrotec and any financial interest (direct or indirect such as via a family member or

acquaintance) which could give rise to a conflict of interest should always be promptly disclosed to the next level

of management.

Financial reward received for services rendered to third parties should be made over to the Company. However, if

the service in question is rendered largely in the employee’s own private time, management may grant the

employee permission to retain all or part of the compensation. Compensation received in respect of part-time

posts held, professional not direct related to RoodMicrotec, with permission, may be retained. This provision does

not apply to compensation for services rendered by a person in his private time, which are not related in any

manner to his professional activities for RoodMicrotec.

9.Business integrity

9.1.Bribery; records of transactions

RoodMicrotec insists on honesty, integrity and fairness in all aspects of its business. Bribes in any form are

unacceptable; commission payments and personal gifts or favors may only be made or accepted in strict

accordance with these directives. RoodMicrotec strives to comply with the highest levels of transparency and

accountability throughout the Company. Records of transactions should be maintained in an accurate, complete

and timely manner in accordance with RoodMicrotec accounting principles. No unrecorded funds or assets should

be established or maintained.

9.2.Gifts

The acceptance of gifts or personal favors of commercial value are not acceptable. It is to be made clear to third

parties that personal favors can only influence the business relationship negatively and that business decisions are

based solely on benefits to the Company and not on considerations of past or future personal gain. In general, a

gift (the value of which does not exceed EUR 50) may be accepted if given voluntarily and if there is no reasonable

likelihood that it will influence your judgment or actions in performing duties for RoodMicrotec.

When refusing a gift would be discourteous, the gift must be promptly turned over to the Compliance Officer.

RoodMicrotec will, in case that it happens, consider donating such gifts to charitable institutions. If you have any

doubts in a given situation, please discuss with your management or the Compliance Officer.

Some other guidelines with regard to gifts:

•Personal financial assistance of any kind provided by a supplier or another business contact, other than a

financial institution acting in the ordinary course of business, is prohibited.

•Attendance at sport events, restaurants, bars, shows, etc. as the guest of a business contact is permissible

only up to two times a year per business contact and only if the hosting company representative is present.

•Travel and overnight accommodation paid for by a (potential) supplier is not allowed.

9.3.Third-party interests

Employees are not allowed to have any direct or indirect financial interest in a supplier or competing company with

the exception of a financial interest in a publicly traded company.

9.4.Payments to third parties

Any payment for a company's products or services must be made to the Company, not to an individual. All

payments must be properly and fairly recorded in appropriate books of account available for inspection. There

must be no ‘off the books’ or secret accounts. No payments will be channeled through an Agent. All payments

made to an Agent should be intended for the Agent itself. Cash payments are not permitted; all payments should

be made to a bank account designated in writing. Payments to a so-called numbered account with a bank are not

permitted. RoodMicrotec only makes payment to the provider of goods or services received. A request to divert a

payment to an entity or person offshore shall always be rejected

9.5.Commission payments

Commission payments to third parties is too difficult and complex a topic to be addressed exhaustively in specific

guidelines. The objective is to make sure that the hard rule laid down in the Code of Conduct on the prohibition of

bribes in any form is not circumvented by commission payments. Against this background, the acceptability of a

commission payment has to be determined on the basis of a thorough evaluation and assessment, by responsible

management, of all relevant information in respect of the proposed commission as well as the third party to whom

it is to be paid. In this respect, it is recommended that the Board of Management consult the Supervisory Board.

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In the event of reasonable doubt as to compliance to local and international laws and regulations and/ or the Code

of Conduct, and if this doubt cannot be eliminated in consultation with a legal advisor, the payment should not be

made, and the contract should not be concluded. Any commission payment to a third party should be justified by

clear and demonstrable services rendered by that party to RoodMicrotec. In the event of the commission payment

also covering a substantial part of the activities that are generally included in cost of sales, the level of the

commission may vary from country to country. In this respect, it is recommended that management compare the

selling price of the order with quotations offered by competitors. If the RoodMicrotec price differs substantially

from that of the competitors, management has to make sure that the difference is not due to a difference in the

amount of commission to be paid. A commission payment equaling a double-digit percentage is not acceptable,

except in the event of extreme circumstances and without prejudice to the above.

9.6.Agents, distributors, commissioners

The remuneration of an agent, distributor, commissioner and the like (hereinafter: Agent) may not exceed the

normal and reasonable commercial rates for the legitimate service rendered by the Agent. An Agent shall be

appointed by virtue of a service contract in writing, which shall always incorporate a reference to the Code of

Conduct. All such contracts shall be registered in the country. The background of the Agent must be reviewed

thoroughly by the person proposing the Agent in close cooperation with the country management; evidence of

such review must be available in the file. An Agent may not be a Government official. A record will be maintained

of the names and terms of engagement of all Agents.

9.7.Facilitating payments

Facilitating payments are small payments made in money or in kind, which have to be made, in accordance with

publicly known and widely followed local custom and practice, in connection with the performance, by officials in

documentation, customs clearance and other matters, of their normal duties. A characteristic of facilitating

payments is that the service obtained as the result of such payment represents the legitimate function of the

official concerned and does not render undue advantage to the payer in comparison with other companies.

Facilitating payments do not fall within the scope of the OECD Convent ion on Combating Bribery of Foreign Public

Officials in International Business Transactions. In some countries, however, the legislation to implement the

Convention also covers facilitating payments, as a consequence whereof an officer (or, under certain

circumstances, the Company) who has made such payments abroad, could be prosecuted in his home country. In

general, RoodMicrotec is opposed to the making of facilitating payments. The Company will promote measures to

eliminate such practices; at all events applicable laws and regulations should be complied with.

9.8.Political payments

RoodMicrotec shall not pay advisory fees, make payments or donations, in money or in kind, to political parties,

political organizations or individual politicians. Subject to applicable laws and regulations, exceptions to this

prohibition may be made – where legally permissible – only if explicitly approved by the Board of Management. In

those exceptional cases where payments or donations are made, all requirements regarding public disclosure of

such payments or donations shall be complied with in full.

9.9.Money laundering

RoodMicrotec will not participate in "money laundering" by entering any arrangement which is known or there is

reason to suspect that it will be used to facilitate any acquisition, retention, use or control of any property or

money intended to disguise the proceeds of crime. An employee who suspects a situation of money laundering

shall inform the Compliance Officer.

10.Internet, Intranet and e-mail use

No RoodMicrotec employee may use RoodMicrotec’s internal e-mail system, Intranet or Internet in any way that is

illegal or might otherwise damage RoodMicrotec’s reputation, such as by:

•deliberately accessing, creating, displaying, transmitting, soliciting, printing, downloading or otherwise

disseminating messages, information or material that is or could be construed as threatening, fraudulent,

pornographic, discriminatory, sexually oriented, abusive, libelous, derogatory, defamatory, obscene, harassing,

disparaging or otherwise unlawful or inappropriate;

•deliberately copying, reproducing, transmitting, distributing, posting or otherwise disseminating or using

materials in violation of intellectual property laws or any other applicable law or regulations;

•knowingly "spamming" (the practice of sending e-mail in bulk to (random) e-mail accounts), or using

information captured via the Intranet or the Internet for "spamming";

•knowingly sending unsolicited e-mails, such as product promotions etc., to individual consumers unless they

opted-in to such communications;

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•using it for personal gain (e.g. through online gambling or non-RoodMicrotec business activities). No

RoodMicrotec employee may use RoodMicrotec’s internal e-mail system, Internet (mail) or Intranet in any way

that may interrupt its efficient and effective operation or compromise the security of RoodMicrotec’s or third

parties' systems, such as:

•purposely circumventing security measures to gain unauthorized access to systems or data, whether belonging

to RoodMicrotec or a third party;

•purposely compromising any computer system, whether belonging to RoodMicrotec or a third party (e.g.

through deliberate introduction of a virus or hacking);

•intentionally creating an excess volume of non-business communication that may impair operation of the

messaging environment.

RoodMicrotec may take measures to monitor compliance with this Directive and with local laws.

11.Observance of the Code of Conduct

11.1.Sanctions

All RoodMicrotec employees must comply with the Code of Conduct. Violation may lead to disciplinary action,

including dismissal, notwithstanding any further civil or criminal action that may be taken.

11.2.Whistle-blower policy

In order to promote the reporting of violations of the Code of Conduct, a whistle-blower policy is in place, enabling

employees to submit complaints on an anonymous basis without fear of the complaints leading to disciplinary

action.

11.3.Compliance

Compliance with the Code of Conduct is monitored via the Compliance Officer, who regularly reports to the Board

of Management and Supervisory Board on the deployment of the Code of Conduct and on ethical issues in general.

Reporting on compliance with the Code of Conduct is also an integral part of the Corporate Governance statement

issued annually by the Board of Management, Supervisory Board and Corporate Management Team as part of a

cascade process leading to certification of the RoodMicrotec’s annual accounts. Compliance processes and

procedures are reviewed by RoodMicrotec’s Supervisory Board.

11.4.Compliance Officer

It is recommended that the chief financial officer (CFO) should be appointed as Compliance Officer. In this

capacity he/she reports to the Board of Management and Supervisory Board respectively

Further information and a downloadable version: www.roodmicrotec.com

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RoodMicrotec N.V.

CORPORATE GOVERNANCE

RoodMicrotec N.V. respects the Dutch corporate governance code (hereinafter referred to as the Code; officially

referred to as ‘The Revised Dutch Corporate Governance Code 2016’) and considers its application in the light of

the Company’s scale. In this context, RoodMicrotec has decided on a trend-follower position. The system of the

Code will be leading in this chapter. The chapter numbers correspond to the chapters of the Code.

RoodMicrotec is very aware of the role it plays in society. Consequently, we judge ourselves by society’s

standards, thereby indirectly rendering account for our activities to all our stakeholders:

•customers;

•investors;

•employees;

•our immediate social environment.

We also engage with these groups, for example through seminars with customers, investors and the press,

regional business relations, and through open and transparent discussions with our employees. RoodMicrotec’s

General Business Principles and whistle blower policy may be inspected on the Company’s corporate website.

Shareholders are free to pursue their own interests within the boundaries of reasonableness and fairness, yet

mindful of corporate social responsibility. They are in principle not bound by the interests of the Company and the

business it runs. We are happy to enter into discussions with shareholders if they do not accept the Company’s

explanation of why it has resolved to deviate from any best-practice provision.

Chapter 1. Long-term value creation

1.1.1 – 1.1.4 Long-term value creation

The Board of Management is responsible for the continuity of the Company and its affiliated enterprise. The Board

of Management focuses on long-term value creation for the Company and its affiliated enterprise and considers

the stakeholder interests that are relevant in this context. The Supervisory Board monitors the Board of

Management in this.

The Board of Management develops a view on long-term value creation by the Company and its affiliated

enterprise and formulates a strategy in line with this. Depending on market dynamics, it may be necessary to

make short-term adjustments to the strategy.

The Board of Management engages with the Supervisory Board early on in formulating the strategy for realizing

long-term value creation. The Supervisory Board supervises the manner in which the Board of Management

implements the long-term value creation strategy.

In the management report, the Board of Management gives a more detailed explanation of its view on long-term

value creation and the strategy for its realization, as well as a description of which contributions were made to

long-term value creation in the past financial year.

1.2.1 – 1.2.3 Risk management

RoodMicrotec has adequate internal risk management and control systems in place. The Board of Management is

responsible for identifying and managing the risks associated with the Company’s strategy and activities. The

majority of the risk management systems within the Company is based on the structure from the ISO9001-2015

standard.

The Board of Management will identify and analyze the risks associated with the strategy and activities of the

Company and its affiliated enterprise. Based on the risk assessment, the Board of Management will design,

implement and maintain adequate internal risk management and control systems.

The Board of Management monitors the operation of the internal risk management and control systems and will

carry out a systematic assessment of their design and effectiveness at least once a year. This monitoring covers

all material control measures relating to strategic, operational, compliance and reporting risks.

1.3.1 – 1.3.6 Internal audit function

Since RoodMicrotec does not have an internal audit function, the Supervisory Board will assess annually whether

adequate alternative measures have been taken and will consider whether it is necessary to establish an internal

audit department.

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1.4.1 – 1.4.3 Risk management accountability

The Board of Management will render account of the effectiveness of the design and the operation of the internal

risk management and control systems. The Board of Management discusses the effectiveness of the design and

operation of the internal risk management and control systems with the Supervisory Board. The management

report will render account of the accountability as well as the insight made into the risk management.

1.5.1 – 1.5.4 Role of the Supervisory Board

The Supervisory Board supervises the policies carried out by the Board of Management and the general affairs of

the Company and its affiliated enterprise. In so doing, the Supervisory Board also focuses on the effectiveness of

the Company’s internal risk management and control systems and the integrity and quality of the financial

reporting.

RoodMicrotec does not have a separate audit committee due to the size of the Company. The Supervisory Board

handles the functions of the audit committee.

The Supervisory Board will focus on monitoring the Board of Management with regard to:

•relations with, and compliance with recommendations and following up of comments by, the external auditors;

•the funding of the Company;

•the application of information and communication technology by the Company, including risks relating to cyber

security; and

•the Company’s tax policy.

1.6.1 – 1.6.5 Appointment and assessment of the functioning of the external auditor

The Supervisory Board will submit the nomination for the appointment of the external auditor to the general

meeting and supervises the external auditor’s functioning.

The Supervisory Board gives the external auditor a general idea of the content of the reports relating to their

functioning. The Supervisory Board will formulate the engagement for the external auditors to audit the financial

statements. The Board of Management plays a facilitating role in this process. In formulating the terms of

engagement, attention must be paid to the scope of the audit, the materiality to be used and remuneration for the

audit.

The main conclusions of the Supervisory Board regarding the external auditor’s nomination and the outcomes of

the external auditor selection process will be communicated to the general meeting. The Company should publish

a press release in the event of the early termination of the relationship with the external audit firm. The press

release should explain the reasons for this early termination.

1.7.1 – 1.7.6 Performance of the external auditor´s work

The Supervisory Board and the external auditor will discuss the audit plan and the findings of the external auditor

based on the work the external auditor has undertaken. The Board of Management and the Supervisory Board

should maintain regular contact with the external auditor.

The Board of Management will ensure that the external auditor receives all information that is necessary for the

performance of his work in a timely fashion. The external auditor will discuss the draft audit plan with the Board of

Management before presenting it to the Supervisory Board.

The Supervisory Board will determine whether and, if so, how the external auditor should be involved in the

content and publication of financial reports other than the financial statements. The Supervisory Board should

meet with the external auditor as often as it considers necessary, but at least once per year, outside the presence

of the Board of Management.

The Supervisory Board should be permitted to examine the most important points of discussion arising between

the external auditor and the Board of Management based on the draft audit report. The external auditor should in

any event attend the meeting of the Supervisory Board at which the report of the external auditor on the audit of

the financial statements is discussed.

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Chapter 2. Effective management and supervision

2.1.1 – 2.1.10 Composition and size

The Board of Management and the Supervisory Board are composed such that the requisite expertise,

background, competencies and – as regards the Supervisory Board – independence are present for them to carry

out their duties properly. The size of these two bodies reflects these requirements.

The Supervisory Board should prepare a profile, taking account of the nature and the activities of the enterprise

affiliated with the Company. Information about each Supervisory Board member will be included in the report of

the Supervisory Board.

RoodMicrotec does not have an executive committee due to the size of the Company.

The Supervisory Board should draw up a diversity policy for the composition of the Board of Management and the

Supervisory Board.

The composition of the Supervisory Board is such that the members are able to operate independently and

critically vis-à-vis one another, the Board of Management, and any particular interests involved. RoodMicrotec is

following the definition in chapter 2.1.8 when defining independence of the Supervisory Board members. The

Chairman of the Supervisory Board should not be a former member of the Board of Management of the Company

and should be independent.

The report of the Supervisory Board states that, in the opinion of the Supervisory Board, the independence

requirements referred to in best practice provisions have been fulfilled.

2.2.1 – 2.2.8 Appointment, succession and evaluation

The Supervisory Board ensures that a formal and transparent procedure is in place for the appointment and

reappointment of Board of Management and Supervisory Board members, as well as a sound plan for the

succession of Board of Management and Supervisory Board members, with due regard to the diversity policy. The

functioning of the Board of Management and the Supervisory Board as a collective and the functioning of

individual members should be evaluated on a regular basis.

A Board of Management 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. A Supervisory Board member is appointed for a period of four

years and may then be reappointed once for another four-year period. The Supervisory Board member may then

subsequently be reappointed again for a period of two years, which appointment may be extended by at most two

years.

A member of the Supervisory Board or the Board of Management should retire early in the event of inadequate

functioning, structural incompatibility of interests, and in other instances in which this is deemed necessary by the

Supervisory Board.

RoodMicrotec does not have a separate selection and appointment committee due to the size of the Company. The

Supervisory Board handles the functions of the selection and appointment committee.

At least once per year, outside the presence of the Board of Management, the Supervisory Board should evaluate

its own functioning and that of the individual Supervisory Board members and should discuss the conclusions that

are attached to the evaluation.

At least once per year, outside the presence of the Board of Management, the Supervisory Board should evaluate

both the functioning of the Board of Management as a whole and that of the individual Board of Management

members and should discuss the conclusions that must be attached to the evaluation, such also in light of the

succession of Board of Management members.

2.3.1 – 2.3.11 Organization of the Supervisory Board and reports

The Supervisory Board ensures that it functions effectively. It is the responsibility of the Supervisory Board as an

organ and of the individual members of the Supervisory Board to obtain information and forming an independent

opinion.

The Supervisory Board does not have any committees, all items are handled by the Supervisory Board. The

Company has appointed a Company Secretary, who ensures the usage of certain procedures and ensures that the

Company operates in accordance with legal obligations and the articles of association. The Vice-Chairman of the

Supervisory Board, or, if no such person has been designated, one of the other Supervisory Directors, will replace

the Chairman as required. The Vice-Chairman will also serve as contact for individual Supervisory Directors and

managing directors in matters regarding the functioning of the Chairman.

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A delegated Supervisory Board member is a Supervisory Board member who has a special task. The delegation

may not extend beyond the responsibilities of the Supervisory Board itself and may not include a member of the

Board of Management of the Company. A Supervisory Board member who temporarily takes on the management

of the Company, where the Board of Management members are absent or unable to fulfil their duties, should

resign from the Supervisory Board.

The Annual Report of the Company, including the financial statements, includes a report by the Supervisory Board.

In this report, the Supervisory Board renders account of the supervision conducted in the past financial year.

2.4.1 – 2.4.9 Decision-making and functioning

The Board of Management and the Supervisory Board ensure that decisions are made in a balanced and effective

manner whilst taking account of the interests of stakeholders. The Board of Management ensures that information

is provided in a timely and sound manner. The Board of Management and the Supervisory Board keep their

knowledge and skills up to date and spend sufficient time on their duties and responsibilities. They should ensure

that, in performing their duties, they have the information that is required for effective decision-making.

The Chairman of the Supervisory Board should act on behalf of the Supervisory Board as the main contact for the

Board of Management.

The Board of Management and the Supervisory Board should each conduct an annual review for their own organ

to identify any aspects with regard to which the Supervisory Board members and Board of Management members

require training or education.

2.5.1 – 2.5.5 Culture

The Board of Management is responsible for creating a culture aimed at long-term value creation for the Company

and its affiliated enterprise. The Supervisory Board should supervise the activities of the Board of Management in

this regard. The Board of Management has generated a code of conduct and monitor its effectiveness and

compliance with this code, both on the part of itself and of the employees of the Company.

2.6.1 – 2.6.4 Misconduct and irregularities

The Board of Management and the Supervisory Board should be alert to indications of actual or suspected

misconduct or irregularities. The Board of Management should establish a procedure for reporting actual or

suspicion of misconduct or irregularities and take appropriate follow-up action on the basis of these reports.

The Supervisory Board monitors the Board of Management in this.

The external auditor should inform the Chairman of the Supervisory Board without delay if, during the

performance of his duties, he discovers or suspect an instance of misconduct or irregularity.

2.7.1 – 2.7.6 Preventing conflicts of interest

Any form of conflict of interest between the Company and the members of its Board of Management or

Supervisory Board should be prevented. To avoid conflicts of interest, adequate measures should be taken. The

Supervisory Board is responsible for the decision-making on dealing with conflicts of interest regarding Board of

Management members, Supervisory Board members and majority shareholders in relation to the Company.

All transactions in which there are conflicts of interest with Board of Management members or Supervisory Board

members should be agreed on terms that are customary in the market. Decisions to enter into transactions in

which there are conflicts of interest with Board of Management members or Supervisory Board members that are

of material significance to the Company and/or to the relevant Board of Management members or Supervisory

Board members should require the approval of the Supervisory Board. All transactions between the Company and

legal or natural persons who hold at least ten percent of the shares in capital of the Company should be agreed on

terms that are customary in the market.

The Company should not grant its Board of Management members and Supervisory Board members any personal

loans, guarantees or the like.

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2.8.1 – 2.8.3 Takeover situations

In the event of a takeover bid for the Company’s shares or for the depository receipts for the Company’s shares,

in the event of a private bid for a business unit or a participating interest, where the value of the bid exceeds the

threshold referred to in Section 2:107a(1)(c) of the Dutch Civil Code, and/or in the event of other substantial

changes in the structure of the organization, both the Board of Management and the Supervisory Board should

ensure that the stakeholder interests concerned are carefully weighed and any conflict of interest for Supervisory

Board members or Board of Management members is avoided. The Board of Management and the Supervisory

Board should be guided in their actions by the interests of the Company and its affiliated enterprise.

Chapter 3. Remuneration

3.1.1 – 3.1.3 Remuneration policy – Board of Management

The remuneration policy applicable to Board of Management members should be clear and understandable, should

focus on long-term value creation for the Company and its affiliated enterprise, and consider the internal pay

ratios within the enterprise. The remuneration policy should not encourage Board of Management members to act

in their own interest, nor to take risks that are not in keeping with the strategy formulated and the risk appetite

that has been established. The Supervisory Board is responsible for formulating the remuneration policy and its

implementation.

RoodMicrotec does not have a separate remuneration committee due to the size of the Company. The Supervisory

Board handles the functions of the remuneration committee.

The remuneration of the Board of Management consists of a fixed salary plus a variable part. There is a balance

between a fixed and variable part of the compensation. The calculation is transparent. The granting of options is

subject to the achievement of targets set by the Supervisory Board in the context of the Company’s strategic plan.

The achievement of the targets by the Board of Management will be evaluated every twelve months and new

targets will be set. The targets for the Board of Management are not described in the annual accounts due to

competitive reasons. Company objectives are described in this report.

Regarding ownership and transactions of shares by board members, other than those issued by the Company

itself, the Supervisory Board has resolved to deviate from the Code. Board of Management members are not

permitted to hold direct or indirect interests amounting to more than 5% in other listed companies or companies

in the semiconductor industry, unless the Supervisory Board has granted specific permission. Furthermore, Board

of Management members must report changes in shareholdings in other listed or semiconductor companies to the

Chairman of the Supervisory Board.

3.2.1 – 3.2.3 Determination of Board of Management remuneration

The Supervisory Board should determine the remuneration of the individual members of the Board of

Management, within the limits of the remuneration policy adopted by the general meeting.

The employment of the Board of Management members may be terminated by giving six months’ notice in writing

before the end of each calendar month. In case of termination from RoodMicrotec the Board of Management

member is entitled to a severance pay equal to 100% of total annual gross salary.

3.3.1 – 3.3.3 Remuneration – Supervisory Board

The Supervisory Board should submit a clear and understandable proposal for its own appropriate remuneration to

the general meeting. The remuneration of Supervisory Board members should promote an adequate performance

of their role and should not be dependent on the results of the Company.

The remuneration of the Supervisory Board members should reflect the time spent and the responsibilities of their

role. Supervisory Board members may not be awarded remuneration in the form of shares and/or rights to shares.

Shares held by a Supervisory Board member in the Company on whose Supervisory Board they serve should be

long-term investments.

In deviation from the Code, it has been determined that no member of the Supervisory Board will be permitted to

hold direct or indirect interests of more than 5% in the share capital of other listed companies or companies in the

semiconductor industry. Furthermore, Supervisory Directors must report changes in shareholdings in other listed

or semiconductor companies to the Chairman of the Supervisory Board.

RoodMicrotec has not provided any personal loans or guarantees to members of the Supervisory Board.

RoodMicrotec N.V.

ANNUAL REPORT 2021

3.4.1 – 3.4.2 Remuneration accountability

In the remuneration report, the Supervisory Board should render account of the implementation of the

remuneration policy in a transparent manner. The main elements of the agreement of a Board of Management

member with the Company should be published on the Company’s corporate website in a transparent overview

after the agreement has been concluded, and in any event no later than the date of the notice calling the general

meeting where the appointment of the Board of Management member will be proposed.

Chapter 4. The general meeting

4.1.1 – 4.1.10 The general meeting

The general meeting should be able to exert such influence on the policies of the Board of Management and the

Supervisory Board of the Company that it plays a fully-fledged role in the system of checks and balances in the

Company. Good corporate governance requires the fully-fledged participation of shareholders in the decision-

making in the general meeting.

The Chairman of the general meeting is responsible for ensuring the proper conduct of business at meetings in

order to promote a meaningful discussion at the meeting. The agenda of the general meeting should list which

items are up for discussion and which items are to be voted on. The following items should be dealt with as

separate agenda items:

•material changes to the articles of association;

•proposals relating to the appointment of Board of Management and Supervisory Board members;

•the policy of the Company on additions to reserves and on dividends;

•any proposal to pay out dividend;

•resolutions to approve the management conducted by the Board of Management (discharge of Board of

Management members from liability);

•resolutions to approve the supervision exercised by the Supervisory Board (discharge of Supervisory Board

members from liability);

•each substantial change in the corporate governance structure of the Company; and

•the appointment of the external auditor.

If a shareholder has arranged for an item to be put on the agenda, he should explain this at the meeting and, if

necessary, answer questions about it. A shareholder should only exercise the right to put items on the agenda

after they have consulted with the Board of Management on this. If one or more shareholders intend to request

that an item be put on the agenda that may result in a change in the Company’s strategy, for example as a result

of the dismissal of one or several Board of Management or Supervisory Board members, the Board of Management

should be given the opportunity to stipulate a reasonable period in which to respond.

Board of Management and Supervisory Board members nominated for appointment should attend the general

meeting at which votes will be cast on their nomination.

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 should for this purpose attend and be entitled to address this meeting.

Within three months after the general meeting the minutes of the meeting are published in concept on the

corporate website of the Company. The shareholders can react and after three months the minutes will be

determined and finalized. The minutes are signed by the Chairman and the Secretary of the shareholders meeting.

The final and signed version will be published on the Company’s corporate website and replace the concept.

4.2.1 – 4.2.6 Provision of information

The Board of Management and the Supervisory Board should ensure that the general meeting is adequately

provided with information.

The Company has formulated an outline policy on bilateral contacts with the shareholders and has posted this

policy on its website. Analyst meetings, analyst presentations, presentations to institutional or other investors and

press conferences are announced in advance on the Company’s corporate website and by means of press releases.

The contacts between the Board of Management on the one hand and the press and financial analysts on the other

are handled and structured carefully and with due observance of the applicable laws and regulations.

ANNUAL REPORT 2021

RoodMicrotec N.V.

4.3.1 – 4.3.6 Casting votes

Participation of as many shareholders as possible in the general meeting’s decision-making is in the interest of the

Company’s checks and balances. The Company should, in so far as possible, give shareholders the opportunity to

vote by proxy and to communicate with all other shareholders.

RoodMicrotec does not have any financing preference shares.

4.4.1 – 4.4.8 Issuing depository receipts for shares

Since no depository receipts for shares have been issued, this part of the Code is not applicable to RoodMicrotec.

Chapter 5. One-tier governance structure

5.1.1 – 5.1.5 One-tier governance structure

Since RoodMicrotec is operating a two-tier structure, this part of the Code is not applicable.

Further information and a downloadable version: www.roodmicrotec.com

RoodMicrotec N.V.

ANNUAL REPORT 2021

REMUNERATION REPORT

Introduction

This Remuneration Report provides an overview of the application of the Remuneration Policy for and the

components of the remuneration of the Board of Management and the Supervisory Board of RoodMicrotec N.V.

(‘the Company’) during the financial year 2021. This Remuneration Report is drafted in accordance with article

2:135b of the Dutch Civil Code and the Dutch Corporate Governance Code.

The Company has successfully attracted and retained executives who are capable of leading and overseeing the

Company at all levels and the Remuneration Policy is designed to facilitate this process. The Supervisory Board

oversees all remuneration decisions and determines the criteria to measure the performance of the Board of

Management whereby considering the roles and responsibilities. For determining the remuneration of the Board of

Management, the Supervisory Board is informed about the remuneration of the direct reports to the Board of

Management including the Short-Term and Long-Term Incentive Plans applicable which are fully aligned with the

performance conditions as operated under the Remuneration Policy.

As we believe that all employees are integral to our success, we are committed to fair and responsible

remuneration. We therefore consider remuneration of the members of the Board of Management and the

Supervisory Board in the light of the remuneration of all employees, including associated pay ratios. Our

Remuneration Policy is designed to reflect our commitment to paying fairly, responsibly and transparently. The

Supervisory Board undertakes to engage actively with shareholders in order to address all legitimate and

reasonable objections and concerns. We invite our shareholders to engage with us regarding our policy and

reporting. In implementing the Remuneration Policy, the Supervisory Board analyses the possible outcomes of its

variable remuneration elements and how they may affect the total remuneration of the Board of Management. In

this respect, regular scenario analyses are undertaken whereby the development of the underlying share price of

the Company’s shares is considered. This with due regard for the risks to which variable remuneration may expose

the Company. Variable remuneration shall be linked to predetermined, assessable and influenceable targets which

are predominantly of a long-term and sustainable nature and linked to the strategy, values, purpose and vision of

the Company.

For 2021, the Short-Term Incentive targets comprised of:

Target

Description

% of total

Total income

Total income for the RoodMicrotec Group according to the

consolidated financial statements

30%

Net profit (*)

Net profit after taxes for the RoodMicrotec Group according to the

consolidated financial statements

40%

Corporate long-term

strategy

Development and maintenance of a corporate long-term strategy,

in cooperation with the Supervisory Board

20%

Personnel plan

Contingency and development plan - key people, retirements, new

functions, succession

10%

(*) If net profit for the year is negative, no Short-Term Incentive will be paid out.

The Company aspires to ensure that the Remuneration Policy aligns with all policies and procedures and complies

with relevant laws and the Dutch Corporate Governance Code by applying high standards of corporate

governance, environmental and ethical practices. Sound corporate governance is a key element of the culture,

behavior and management of the Company and is consistent with the core values and purpose. For this purpose,

we have defined our Code of Conduct to ensure these high standards in both the workplace and in all of our

business dealings. These policies as contained in our Code of Conduct encompass human rights, health and safety,

conflict minerals, anti-corruption and anti-bribery, conflict of interest, financial reporting environmental

responsibility, insider trading, community initiatives, and includes a whistle-blower procedure. The underlying

documentation of our full Code of Conduct is available on our corporate website. In determining the actual

remuneration of the Board of Management, the Supervisory Board assesses the actual performance delivered

based on its strategy in line with the Code of Conduct and considers the impact of the overall remuneration of the

Board of Management on the pay differentials within the Company. When determining remuneration, the

Supervisory Board also obtains the views of the members of the Board of Management relating to the level and

structure of remuneration.

ANNUAL REPORT 2021

RoodMicrotec N.V.

The Remuneration Policy for the Board of Management and the Supervisory Board has been effective as from

July 23, 2020 after the approval by the Annual General Meeting of Shareholders held on that date. The

Remuneration Policy will be applicable for a four-year period starting as from January 1, 2020, except in the event

of material changes which will be brought to the Annual General Meeting of Shareholders for approval.

Remuneration for Board of Management members

The total remuneration package of the members of the Board of Management is established on an annual basis by

the Supervisory Board. The remuneration structure for the Board of Management consists of the following

elements:

•Fixed compensation - Annual base salary;

•Short-Term Incentive - Annual cash bonus plan;

•Long-Term Incentive - Performance cash bonus plan;

•Other benefits.

The above components are regularly compared with a balanced remuneration reference group of companies

selected based on industry, labor market, size and geographical spread to determine the total remuneration

package for the Board of Management. When selecting reference companies the size and complexity of the

Company is taken into account, including market capitalization, net revenues and total assets.

As there are insufficient comparable listed companies to benchmark with, the above components are regularly

compared with a balanced remuneration reference group of comparable roles in the European Semiconductor

industry. As per common practice in these companies the weight of the role (job size) is evaluated from direct

responsibility factors such as annual revenue, total assets under management, the size of the organization

(number of employees), the required skills to manage the complexity of the business and the risk factors.

Comparable roles in companies such as Infineon, STM and NXP form the basis of this judgement. For the incentive

elements of the package the factors considered are drawn from the required short-term goals to ensure the

achievement of budgets and to keep the Company in good health. For the long term, to ensure the agreed

strategic vision will be achieved and the shareholder interests will be met.

The composition of this remuneration reference group will be reviewed by the Supervisory Board on a regular

basis and updated if necessary to ensure an appropriate composition. Any major changes to the composition of

the remuneration reference group will be subject to the approval of the AGM.

In establishing the remuneration for members of the Board of Management, the Supervisory Board may consult a

professional external remuneration consultant in carrying out its duties. The Supervisory Board will verify that the

consultant concerned does not similarly provide advice to the Board of Management so that no conflicts of interest

exist.

Application of the Remuneration Policy in 2021

The Remuneration Policy was successfully applied by the Supervisory Board in 2021 as set forth below. The

remuneration of the Board of Management consists of a basic salary and an annual bonus. The Supervisory Board

determines the remuneration annually, within the framework permitted by the Remuneration Policy.

The ratio of the remuneration of the members of the Board of Management compared with the average

remuneration of the other employees during 2021 is 3.4:1 (2020: 2.2:1). This ratio consists of the average

remuneration of members of the Board of Management recognized by the Company in 2021 of EUR 213,000

(2020: EUR 132,000) as stated in the summary of the remuneration of the members of the Board of Management

in relation to the average remuneration of all employees. The annual change in remuneration of the employees is

EUR 3,000 based on a different composition of employees and regular salary reviews. This average remuneration

of EUR 62,000 (2020: EUR 59,000) is comprised of wages and salaries plus bonuses, options and performance

shares of the employees divided by the average number of employees on a full-time basis. To calculate the

average remuneration of all employees the effect of short-time work in the remuneration is corrected in the

average number of persons employed accordingly and reduced by 4 (2020: 10).

RoodMicrotec N.V.

ANNUAL REPORT 2021

(x EUR 1,000 per FTE, except

Net Profit/(Loss))

2021

2020

2019

2018

2017

Average remuneration -

Board of Management

213

132

138

140

120

Average remuneration -

Employees

Net Profit/(Loss)

1,435

-265

-73

125

-44

(change in % compared to

previous year)

2021

2020

2019

2018

2017

Board of Management

61%

-4%

-1%

16%

-22%

Employees

10%

Fixed compensation – Annual base salary

The annual base salaries for the members of the Board of Management are not subject to any automatic pay rises

under a collective labor agreement. The Supervisory Board regularly reviews base salary levels of the members of

the Board of Management.

Short-Term Incentive – Annual cash bonus plan

Every year, the Supervisory Board determines a bonus arrangement for the reporting year. The bonus

arrangement is contingent upon the realization of a series of predetermined quantitative performance targets (net

profit must be positive for variable remuneration), total income (in the range communicated to the market),

corporate long-term strategy and personnel goals), which are set by the Supervisory Board after approval of the

budget for the next financial year. The bonuses awarded are recognized during the reporting year, based on the

realization of the performance targets during the financial year, and are paid in cash after the financial statements

have been adopted by the Annual Meeting of Shareholders.

The maximum Short-Term Incentive opportunity for the Board of Management is set at 30% of annual base

salary. The targets are linked to financial objectives and personal goals. The Short-Term Incentive scheme is only

effective if the net profit for the year is positive.

Evaluation of the Short-Term Incentive for 2021:

Target

Description

% of total

2021

evaluation

Total income

Total income for the RoodMicrotec Group according to

the consolidated financial statements

30%

100%

Net profit (*)

Net profit after taxes for the RoodMicrotec Group

according to the consolidated financial statements

40%

100%

Corporate long-term

strategy

Development and maintenance of a corporate long-term

strategy, in cooperation with the Supervisory Board

20%

100%

Personnel plan

Contingency and development plan - key people,

retirements, new functions, succession

10%

100%

(*) If net profit for the year is negative, no Short-Term Incentive or Long-Term Incentive will be paid out.

Long-Term Incentive – Performance cash bonus plan

The Board of Management is entitled to receive a long-term bonus payable in cash. The objective is to incentivize

shareholder value creation. Normally, share options, performance shares or other share-based payment

instruments would be more customary for this objective. However, given the small size of the Company and the

low price of its shares, the Supervisory Board has decided to avoid the complexity of these type of instruments

ANNUAL REPORT 2021

RoodMicrotec N.V.

(only to be used for a limited number of officers at the Company), which also bring additional expenses (e.g. for

fair value reports) to the Company, and simplify the long-term incentive compared to the remuneration policy in

previous years by applying a performance cash bonus plan. In line with Dutch law, the Long-Term Incentive

components for the members of the Board of Management are subject to claw back provisions and ultimate

remedy clauses. During 2021 no circumstances have been identified by the Supervisory Board that result in any

adjustments or claw back relating to option rights granted in previous years.

At the end of the four-year service agreement term, 7% of the accumulated net profit (after current tax) for the

last four years will be paid out to the Board of Management (5% for the CEO and 2% for the CFO).

In 2020, no Long-Term Incentive has been rewarded to the Board of Management since the evaluation period for

Mr. O.M. Sallenhag is 2020 to 2023 and for Mr. A. Ladega 2019 to 2022. An amount of EUR 23,000 for

Mr. O.M. Sallenhag for the years 2020 and 2021 has been accrued and an amount of EUR 8,000 for Mr. A. Ladega

for the years 2019, 2020 and 2021 has been accrued.

Other benefits

Other benefits include monthly expense compensation such as lease car, costs allowance and social security

contributions.

Total remuneration for Board of Management

Remuneration of the Board of Management recognized by the Company for the financial years ended

December 31, 2021 and 2020 was as follows:

(x EUR 1,000)

Fixed

compensation

Short-Term

Incentive

Long-Term

Incentive

(accrual)

Other benefits

Total

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Mr. O.M. Sallenhag

150

123

—

224

127

Mr. A. Ladega

132

116

—

202

137

Total

282

239

—

426

264

The Fixed compensation for Mr. O.M. Sallenhag was 67% of the total remuneration (2020: 97%). The Fixed

compensation for Mr. A. Ladega was 65% of the total remuneration (2020: 85%).

Short-Term Incentive has been paid out according the evaluation of the targets and an accrual for Long-Term

Incentive has been done for the Board of Management for the financial year 2021.

At the end of 2021, Mr. O.M. Sallenhag holds 485,000 shares in the capital of the Company, see note 25 to the

Consolidated Financial Statements on page 95.

At the end of 2021, Mr. A. Ladega holds 226,000 shares the capital of the Company, see note 25 to the

Consolidated Financial Statements on page 95.

During 2021 the Board of Management decided to participate in the refinancing of the bond loan to show its

confidence in the Company’s business plans and future projects. Mr. O.M. Sallenhag participates with EUR 60,000

and Mr. A. Ladega participates with EUR 15,000, both are entitled to 6.75% interest p.a.

At the end of 2021, no other loans, advances or guarantees were outstanding for each of the members of the

Board of Management.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Remuneration for Supervisory Board members

The Remuneration Policy for the Supervisory Board has been effective as from July 23, 2020, after the approval by

the Annual General Meeting of Shareholders held on that date. The Supervisory Board members are entitled to a

fixed based fee for membership of the Supervisory Board. The compensation is regularly assessed against Dutch

market levels. The benchmark is based on AScX companies listed on Euronext Amsterdam by comparing fixed

compensation levels at median level. Supervisory Board members are not entitled to any performance or equity

related compensation and are not entitled to any pension allowance or contribution. This compensation structure is

designed to ensure the independence of the Supervisory Board members and the effectiveness from a corporate

governance perspective. The Supervisory Board will present any proposed changes to the fees or the

compensation elements to the Annual General Meeting of Shareholders for approval.

Remuneration of the Supervisory Board recognized by the Company for the years ended December 31, 2021 and

2020 was as follows:

(x EUR 1,000)

2021

2020

Mr. V.G. Tee

Mr. M.E.T. Verstraeten

171

Mr. R.J.W.M van der Linden

—2

N/A

Total

At the end of 2021 and 2020, no loans, advances or guarantees were outstanding for each of the members of the

Supervisory Board.

At the end of 2021 and 2020, the members of the Supervisory Board did hold neither any shares in the Company,

nor any options, warrants or any other rights on shares in the capital of Company.

All cash remuneration is fixed and the members of the Supervisory Board are not entitled to any performance or

equity related compensation and are not entitled to any pension allowance or contribution.

Deventer, April 20, 2022

Supervisory Board

V.G. Tee, Chairman

M.E.T. Verstraeten

R.J.W.M. van der Linden

ANNUAL REPORT 2021

RoodMicrotec N.V.

1 including EUR 5,000 for additional support during the second half of 2020.

2 Mr. van der Linden decided to waive his entitlement to 2021 remuneration in the amount of EUR 6,700 since the COVID-19

pandemic and other restrictions prevented him to actively take on his duties as a member of the Supervisory Board in the year

2021 after his appointment by the Annual General Meeting of Shareholders held on June 10, 2021.

MANAGEMENT STATEMENT

This is a statement concerning corporate governance as referred to in article 2a of the Decree on additional

requirements for annual reports. This statement forms part of RoodMicrotec’s Annual Report 2021 (included in the

chapter on corporate governance), which is available on RoodMicrotec’s website: www.roodmicrotec.com.

The information required to be included in this corporate governance statement as described in Articles 3, 3a and

3b of the Decree can be found in the chapters, sections and pages of RoodMicrotec’s Annual Report 2021 and are

deemed to be included and repeated in this statement:

•the information concerning compliance with the Dutch Corporate Governance Code, as required by article 3 of

the Decree, can be found in the chapter on ‘Corporate Governance’;

•the information concerning RoodMicrotec’s main features of the internal risk management and control systems

relating to the financial reporting process, as required by article 3a sub a of the Decree, can be found in the

chapter on ‘Risk and Risk Management’;

•the information regarding the functioning of RoodMicrotec’s general meeting, and the authority and rights of

RoodMicrotec’s shareholders and holders of certificates of shares, as required by article 3a sub b of the Decree,

can be found in the chapter on ‘Corporate Governance’;

•the information regarding the composition and functioning of RoodMicrotec’s Board of Management, the

Supervisory Board and its committees, as required by article 3a sub c of the Decree, can be found in the

relevant sections of the chapter on ‘Corporate Governance’, the ‘Report of the Board of Management’ and the

‘Report of the Supervisory Board’;

•the information concerning the inclusion of the information required by the decree article 10 EU Takeover

Directive, as required by article 3b of the Decree, can be found in the chapter on ‘Corporate Governance’.

True and fair view statement

This statement is an integral part of the Annual Report dated April 20, 2022.

This statement is based on article 5:25(c), paragraph 2 sub c of the Financial Supervision Act. Our opinion of

financial statement in the 2021 Annual Report is that these give a true and fair view of the assets, liabilities,

financial position, cash flows and the result of RoodMicrotec N.V. and the companies included in the consolidation.

The 2021 Annual Report gives a true and fair view of the situation on balance sheet date and the developments

during the financial year of RoodMicrotec N.V. and the group companies for which the financial information is

recognized in its financial statements. The most important risks confronting RoodMicrotec N.V. are described in the

Annual Report. The members of the Board of Management have signed the Annual Report and financial statements

in fulfillment of their legal obligations arising from article 5:25(c), paragraph 2 sub c of the Financial Supervision

Act.

Deventer, April 20, 2022

Board of ManagementSupervisory Board

O.M. Sallenhag, CEOV.G. Tee, Chairman

A. Ladega, CFOM.E.T. Verstraeten

R.J.W.M. van der Linden

RoodMicrotec N.V.

ANNUAL REPORT 2021

FINANCIAL STATEMENTS

A.CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Profit or Loss

(x EUR 1,000)

Notes

2021

2020

Net sales

14,274

11,455

Other income

258

419

Total income

14,532

11,874

Raw materials and consumables

-2,634

-2,287

Personnel expenses

-6,782

-6,192

Other expenses, other than depreciation and amortization

-2,330

-2,050

EBITDA1

2,786

1,345

Depreciation and amortization

-1,559

-1,544

Result from operating activities (EBIT)2

1,227

-199

Financial expenses

-189

-170

Profit (loss) before taxes

1,038

-369

Taxes

397

104

Net profit (loss)

1,435

-265

Net profit (loss) attributable to:

Equity holders of the parent

1,435

-265

Non-controlling interests

—

Net profit (loss)

1,435

-265

Earnings per share

Basic

0.02

-0.00

Diluted

0.02

-0.00

The numbers following the various items refer to the notes on pages 61 to 96.

ANNUAL REPORT 2021

RoodMicrotec N.V.

1 EBITDA is a non-gaap measure and defined as Earnings Before Interest, Taxes, Depreciation and Amortization. Interest includes

other finance costs.

2 EBIT is a non-gaap measure and defined as Earnings Before Interest and Taxes. Interest includes other finance costs.

Consolidated Statement of Comprehensive Income

(x EUR 1,000)

Notes

2021

2020

Net profit (loss)

1,435

-265

Items that will not be reclassified to profit or loss

Remeasurement of defined benefit obligations

209

-154

Revaluation of land and buildings

—

380

Tax implication1

8, 12

-61

-62

Total other comprehensive income

148

164

Total comprehensive income

1,583

-101

Total comprehensive income attributable to:

Equity holders of the parent

1,583

-101

Non-controlling interests

—

Total comprehensive income

1,583

-101

The numbers following the various items refer to the notes on pages 61 to 96.

RoodMicrotec N.V.

ANNUAL REPORT 2021

1 The Group has elected to present individual components of OCI before related tax with an aggregate amount presented for tax in

the consolidated statement of profit or loss and the consolidated statement of comprehensive income, and has provided disclosures

related to tax on each component of OCI in note 12 ‘Deferred tax balances’.

Consolidated Statement of Financial Position

(x EUR 1,000)

Notes

31-12-2021

31-12-2020

Assets

Property, plant and equipment

5,688

6,202

Right-of-use assets

458

728

Intangible assets

2,149

2,247

Deferred tax balances

1,976

1,636

Non-current assets

10,271

10,813

Inventories

Contract assets

341

563

Trade and other receivables

1,727

1,541

Cash and cash equivalents

2,558

1,351

Current assets

4,724

3,524

Total assets

14,995

14,337

Equity and liabilities

Issued share capital

8,259

8,239

Share premium

20,725

20,709

Revaluation reserve

1,853

1,985

Other reserve

120

—

Retained earnings

-27,868

-29,583

Equity, attributable to equity holders of the parent

3,089

1,350

Non-controlling interests

2,494

Total equity

5,583

3,844

Loans and borrowings

2,470

—

Lease liabilities

220

460

Defined benefit obligation

4,553

4,984

Provisions

Non-current liabilities

7,321

5,504

Loans and borrowings

—

2,488

Lease liabilities

242

273

Trade and other payables

1,824

2,228

Income tax payable

—

Current liabilities

2,091

4,989

Total equity and liabilities

14,995

14,337

The numbers following the various items refer to the notes on pages 61 to 96.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Consolidated Statement of Changes in Equity

(x EUR 1,000)

Number

x1,000

Issued

capital

premium

Revaluation

reserve

Other

reserve

Retained

earnings

Equity

attributable

to parent

Non-

controlling

interests

Total

Equity

Balance at 1 January

2020

74,896

8,239

20,709

1,789

—

-29,286

1,451

2,494

3,945

Issuance of shares

—

Transactions with

equity holders of the

Company

74,896

8,239

20,709

1,789

—

-29,286

1,451

2,494

3,945

Net profit (loss)

—

-265

—

-265

Other comprehensive

income:

Remeasurement of

defined benefit

obligation

—

-112

—

-112

Revaluation of land and

buildings

—

196

—

276

—

276

Total comprehensive

income for the year

—

196

—

-297

-101

—

-101

Balance at 31

December 2020

74,896

8,239

20,709

1,985

—

-29,583

1,350

2,494

3,844

Balance at 1 January

2021

74,896

8,239

20,709

1,985

—

-29,583

1,350

2,494

3,844

Issuance of shares

—

Issuance of stock

warrants

120

—

120

Share options exercised

180

—

Transactions with

equity holders of the

Company

75,076

8,259

20,725

1,985

120

-29,583

1,506

2,494

4,000

Net profit (loss)

—

1,435

—

1,435

Other comprehensive

income:

Remeasurement of

defined benefit

obligation

—

148

—

148

Revaluation of land and

buildings

—

-132

—

132

—

Total comprehensive

income for the year

—

-132

—

1,715

1,583

—

1,583

Balance at 31

December 2021

75,076

8,259

20,725

1,853

120

-27,868

3,089

2,494

5,583

RoodMicrotec N.V.

ANNUAL REPORT 2021

Consolidated Cash Flow Statement

(x EUR 1,000)

Notes

2021

2020

Net profit (loss) for the year

1,435

-265

Adjustments for:

–Depreciation

1,345

1,353

–Amortization

214

191

–Financial expenses

189

170

–Tax expenses

-397

-104

–Movements in net defined benefit obligations

-223

-190

–Movements in provisions

-45

2,581

1,110

Changes in working capital:

–Inventories

-29

–Contract assets

222

-200

–Trade and other receivables

-186

289

–Trade and other payables

-403

438

Cash generated from operating activities

2,185

1,669

Interest paid

-136

-152

Net cash from operating activities

2,049

1,517

Cash flows from investing activities

Acquisition of property, plant and equipment

-557

-745

Investments in intangible assets

-124

-120

Disinvestment of intangible assets

—

Net cash from investing activities

-673

-865

Cash flows from financing activities

Proceeds from exercize of options

—

Proceeds from borrowings

892

—

Cash outflow loan issuance costs

-27

—

Payment of lease liabilities

-278

-303

Repayment of borrowings

-792

—

Net cash flow from financing activities

-169

-303

Net cash flow

1,207

349

Cash and cash equivalents less bank overdrafts:

–at January 1

1,351

1,002

–at December 31

2,558

1,351

Net cash flow

1,207

349

The numbers following the various items refer to the notes on pages 61 to 96.

ANNUAL REPORT 2021

RoodMicrotec N.V.

B.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

General information

RoodMicrotec N.V. (‘the Company’) is a public limited liability company with its registered office in Deventer, the

Netherlands and publicly listed on the Euronext Amsterdam Stock Exchange since 1986. The consolidated financial

statements of the Company for the year ended December 31, 2021 comprises the Company and its subsidiaries

(jointly referred to as ‘the Group’). The Group is active in the semiconductor and electronics industry. The Group

provides supply chain services, wafer & component testing, qualification & reliability investigations and failure

analysis for companies that need application-specific integrated circuits (ASICs).

Since September 6, 2012, the Group includes the following wholly owned subsidiaries:

–RoodMicrotec GmbH (Nördlingen, Germany);

–RoodMicrotec International B.V. (Zwolle, the Netherlands).

The German subsidiary included in the Group’s consolidated financial statements made use of the exemption

provisions of section 264 (3) HGB in the 2020 financial year.

Summary of significant accounting policies

The principal accounting policies used in the preparation of these consolidated financial statements are set out

below. These policies have been consistently applied to all the years presented, unless stated otherwise.

Basis of preparation

Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting

Standards as adopted by the European Union (EU-IFRSs) and with Section 2:362(9) of the Dutch Civil Code.

The consolidated financial statements were authorized for issue by the Board of Management on April 20, 2022.

Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis, unless otherwise indicated.

The consolidated financial statements are presented in euros and all values are rounded to the nearest thousand

(EUR ‘000), except when otherwise indicated.

Use of judgements and estimates

The preparation of the consolidated financial statements in accordance with EU-IFRSs requires management to

make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets

and liabilities, income and expenses. The estimates and assumptions are based on historical experience and

various factors that are believed to be reasonable under the circumstances, the result of which form the basis for

making judgments about the carrying values of the assets and liabilities that are not readily apparent from other

sources. Actual results may differ from these estimates.

The estimates and assumptions are reviewed on an on-going basis. Revisions of accounting estimates are

recognized prospectively. Information about assumptions and estimation uncertainties at December 31, 2021 that

have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the

next financial year is included in the following notes:

•the valuation of land and building: the valuation is based on a market valuation of land and rental value in

combination with the technical life of the building (see note 9 ‘Property, plant and equipment’);

•the recognition of deferred tax assets: deferred tax assets relating to tax losses carried forward are recognized

to the extent that taxable profits will be available against which the losses can be offset. Determination of the

amount of deferred tax assets that can be recognized requires significant management judgement based on

the probable timing and level of future taxable profits. (see note 12 ‘Deferred tax balances’);

•the impairment test of goodwill: the impairment test of goodwill includes relevant key assumptions such as the

WACC (Weighted Average Cost of Capital) and the sales growth rate (see note 11 ‘Intangible assets’);

•the determination of lease term for some lease contracts in which the Group is a lessee, including whether the

Company is reasonably certain to exercise lessee options (see note 10 ‘Right-of-use assets’);

•the determination of the incremental borrowing rate used to measure lease liabilities (see note 10 ‘Right-of-

use assets’).

RoodMicrotec N.V.

ANNUAL REPORT 2021

Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both

financial and non-financial assets and liabilities. When measuring the fair value of an asset or a liability, the Group

uses market observable data as far as possible. Fair values are categorized into different levels in a fair value

hierarchy based on the inputs used in the valuation techniques as follows:

•Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

•Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices);

•Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Further information about the assumptions made in measuring fair values is disclosed in the applicable notes.

Going concern basis of accounting

RoodMicrotec’s revenue and result developed positively in 2021 and also its liquidity position. For the year ended

31 December 2021, the Group recognized a net profit of EUR 1,435 thousand. The company’s working capital as

at 31 December 2021 was EUR 2,875 thousand positive.

We were also able to secure a new loan with a fixed interest rate which matures in 2024. RoodMicrotec will

continue to monitor the latest developments in COVID-19 virus, the worldwide supply situation and the Ukraine

war closely and take measures when we deem this necessary. Based on the developments in 2021 and the current

outlook for 2022, we expect the above mentioned factors to have a limited impact on business. Based on the

current developments, we have a reasonable expectation that the Group has adequate resources to continue in

operation for at least the next 12 months and that the going concern basis of accounting is appropriate.

Changes in accounting policies

In the year under review, where applicable, the Group applied new and amended IFRS standards and IFRIC

interpretations relevant to the Company. The interest rate benchmark reform -phase 2 (amendments to IFRS 9,

IAS 39, IFRS 7, IFRS 4 and IFRS 16) and the amendments to IFRS 16 COVID-19 Related Rent Concessions had no

impact on the consolidated financial statements.

The following new or amended Standards have been issued by the IASB. The new or amended Standards are

applicable for fiscal years beginning on or after their respective effective date. As a general rule, they are not

applied before their effective date, even if this is permitted for certain Standards. The Group does not currently

expect the following other upcoming standards and interpretations to have a material impact on its financial

statements:

•Effective for annual reporting periods beginning on or after January 1, 2022: Amendments to IAS 37: Onerous

contracts – costs of fulfilling a contract, Annual improvements 2018-2020, Amendment to IAS 16: Property,

plant and equipment, proceeds before intended use, and Amendment to IFRS 3: Reference to the conceptual

framework.

•Effective for annual reporting periods beginning on or after January 1, 2023 Amendment to IAS 1:

Classification of liabilities as current or non-current.

Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and all subsidiaries that the

Company controls, i.e. when it is exposed, or has rights, to variable returns from its involvement with the

subsidiary and has the ability to affect those returns through its power over the subsidiary. The existence and

effect of potential voting rights are considered when assessing whether the Company controls another entity.

Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. All

intercompany balances and transactions have been eliminated in the consolidated financial statements. Unrealized

losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of

impairment.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Foreign currency translation

Functional and presentation currency

Items included in the consolidated financial statements of each of the Group’s entities are measured using the

currency of the primary economic environment in which the entity operates (‘the functional currency’). The

consolidated financial statements are presented in euros, which is the Group’s functional and presentation

currency.

Transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at

the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such

transactions and from the translations at year-end exchange rates of monetary assets and liabilities denominated

in foreign currencies are recognized in the consolidated statement of profit or loss.

Property, plant and equipment

Assets in ownership

Property, plant and equipment are stated at cost, except for land and buildings, which are carried at fair value,

based on periodic valuations by an external independent valuator, less subsequent depreciation. The cost of self-

constructed assets includes the cost of materials, direct labor and an appropriate proportion of directly allocated

overheads. Property that is under construction or being developed for future use is classified as property, plant

and equipment and stated at cost until construction or development are complete.

Where an item of property, plant and equipment comprises major components having different useful lives, these

components are accounted for as separate items of property, plant and equipment.

Increases in the carrying amount arising from revaluation of land and buildings are credited to the revaluation

reserve. Decreases that offset previous increases of the same asset are charged against the revaluation reserve;

all other decreases are charged to the consolidated statement of profit or loss. Each year the difference between

depreciation based on the revaluated carrying amount of the asset charged to the consolidated statement of profit

or loss and depreciation based on the asset’s original cost is transferred from revaluation reserve to retained

earnings. When revalued assets are sold, the amounts included in revaluation reserves are transferred to retained

earnings.

Subsequent cost

The Group recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing

part of such an item when that cost is incurred if it is probable that the future economic benefits embodied in the

item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognized in the

consolidated statement of profit or loss as an expense as incurred.

Depreciation

Depreciation on property, plant and equipment is calculated using the straight-line method to allocate the cost of

each asset to its residual value over its estimated useful life. Land is not depreciated. The useful economical life of

the different categories is set out below:

Category

Years

Buildings

Machinery and equipment

2-10

Other fixed assets

3-10

The asset’s residual value, depreciation method and useful life are reviewed, and adjusted if appropriate, at each

balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the

asset’s carrying amount is greater than its estimated recoverable amount.

Leases

The Group accounts for a contract, or a portion of a contract, as a lease when it conveys the right to use an asset

for a period of time in exchange for consideration. Leases are those contracts that satisfy the following criteria:

(a) There is an identified asset;

(b) The Group obtains substantially all the economic benefits from use of the asset; and

RoodMicrotec N.V.

ANNUAL REPORT 2021

The Group considers whether the supplier has substantive substitution rights. If the supplier does have those

rights, the contract is not identified as giving rise to a lease.

In determining whether the Group obtains substantially all the economic benefits from use of the asset, the Group

considers only the economic benefits that arise use of the asset, not those incidental to legal ownership or other

potential benefits.

In determining whether the Group has the right to direct use of the asset, the Group considers whether it directs

how and for what purpose the asset is used throughout the period of use. If there are no significant decisions to

be made because they are predetermined due to the nature of the asset, the Group considers whether it was

involved in the design of the asset in a way that predetermines how and for what purpose the asset will be used

throughout the period of use. If the contract or portion of a contract does not satisfy these criteria, the Group

applies other applicable IFRS’s rather than IFRS 16.

The majority of the Group’s accounting policies for leases are set out in note 10.

The lease portfolio of the Group contains rental offices and other leases. The ‘other leases’ category covers

company-leased vehicles, IT equipment and office equipment. When entering into a new contract, the Group

assesses whether or not it can be considered to be a lease based on the economic benefits ensuing from the use

of the assets and the control over the use of the asset. The Group recognizes a right-of-use asset and a lease

liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the

initial amount of the lease liability adjusted for any lease payments made at or before the commencement date,

plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to

restore the underlying asset or the site on which it is located, less any lease incentives received. Except for leases

with a lease term of up to 12 months and low-value leases, for which practical exceptions have been applied.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date

to the end of the lease term unless the projected service life of the asset is shorter. In addition, the right-of-use

asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease

liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the

commencement date, discounted using the Group’s incremental borrowing rate. Non-lease components are

included in the calculation of the lease liability. Lease liabilities are presented separately in the consolidated

statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to

reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to

reflect the lease payments made.

The lease liability is revalued upon indexation or modification of the lease contract, upon termination of the lease

or upon renewal of the lease. When the lease liability is remeasured in this way, a corresponding adjustment is

made to the carrying amount of the right-of-use asset.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing

sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Cash flows from lease installment payments for right-of-use assets are part of cash flows from financing activities,

while cash flows relating to leases with a term of up to 12 months, low-value leases and non-lease components

are recognized under cash flows from operating activities.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Intangible assets

Goodwill

Acquisition of businesses is accounted for using the acquisition method. The consideration transferred in a

business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values

of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquire and

the equity interests issued by the Group in exchange for control of the acquire. Acquisition related costs are

recognized in the consolidated statement of profit or loss as incurred. Goodwill is carried at cost less accumulated

impairment losses.

Goodwill on acquisitions is tested annually for impairment. Goodwill is allocated to the cash-generating units for

the purpose of impairment testing. The allocation is made to those cash-generating units that are expected to

benefit from the business combination in which the goodwill arose. An impairment is determined by assessing the

recoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount is the

higher of the fair value less costs of disposal and value in use. If the carrying amount of the cash-generating unit

exceeds the recoverable amount of this CGU, the goodwill is impaired accordingly. Impairment of goodwill is not

reversed if the recoverable amount increases at a later date.

Development expenditure

Expenditure on activities undertaken with the prospect of gaining new scientific or technical knowledge and

understanding (research activities) is recognized as an expense in the period in which it is incurred. An intangible

asset arising from the Group’s development is recognized if, and only if, all of the following conditions are met:

•the asset is uniquely identified, and the costs can be determined separately; and

•the technical feasibility of the asset has been sufficiently demonstrated; and

•it is probable that the asset will generate future economic benefits; and

•the development cost can be measured reliably.

Other intangibles

Other intangible assets are measured at cost less accumulated amortization and impairment losses.

Amortization

Amortization is charged to the consolidated statement of profit or loss on a straight-line basis over the estimated

useful lives of intangible assets, unless such lives are indefinite. Development expenditure and other intangibles

are amortized from the date when used over the estimated economic useful life, which is expected to be three to

five years.

Goodwill is not amortized, and instead tested annually for impairment.

Financial instruments

Financial assets

Financial instruments include the following financial assets: trade and other receivables and cash and cash

equivalents. The Group classifies financial assets into those measured at amortized cost and those measured at

fair value.

Financial assets – recognition and derecognition

The Group initially recognizes financial assets at amortized cost issued on the date when they are originated. All

other financial assets are initially recognized on the trade date when the Group becomes a party to the contractual

provisions of the instrument.

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it

transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and

rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of

the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such

derecognized financial assets that is created or retained by the Group is recognized as a separate asset or liability.

Financial assets at amortized cost

These assets are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to

initial recognition, they are measured at amortized cost using the effective interest method, less loss allowances.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Financial assets at fair value through profit or loss

A financial asset is classified as at ‘fair value through profit or loss’ if it is classified as held for trading or is

designated as such on initial recognition. Directly attributable transaction costs are recognized in the consolidated

statement of profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair

value and changes therein taking into account any loss allowances, interest or dividend income, are recognized in

the consolidated statement of profit or loss.

Impairment of financial assets

Loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The

Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based

on the Group’s past history, existing market conditions as well as forward looking estimates at the end of each

reporting period. Financial assets are measured through a loss allowance at an amount equal to:

•the 12-month expected credit losses (expected credit losses that result from those default events on the

financial instrument that are possible within 12 months after the reporting date); or

•full lifetime expected credit losses (expected credit losses that result from all possible default events over the

life of the financial instrument).

A loss allowance for full lifetime expected credit losses is used for a financial instrument if the credit risk of that

financial instrument has increased significantly since initial recognition.

For all other financial instruments, expected credit losses are measured at an amount equal to the 12-month

expected credit losses.

The loss allowance for financial instruments is measured at an amount equal to lifetime expected losses if the

credit risk of a financial instrument has increased significantly since initial recognition, unless the credit risk of the

financial instrument is low at the reporting date in which case it can be assumed that credit risk on the financial

instrument has not increased significantly since initial recognition. The credit risk is considered low if there is a low

risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations in the near term

and adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce

the ability of the borrower to fulfil its contractual cash flow obligations. It is rebuttable presumed the credit risk

has increased significantly when contractual payments are more than 30 days past due. If a significant increase in

credit risk that had taken place since initial recognition and has reversed by a subsequent reporting period

(cumulatively credit risk is not significantly higher than at initial recognition) then the expected credit losses on

the financial instrument revert to being measured based on an amount equal to the 12-month expected credit

losses.

The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss

allowance for all trade receivables and contract assets. The loss allowance is determined based on historical data

of credit losses and updated periodically to incorporate forward looking information.

At each reporting date, the Group assesses whether financial assets carried at amortized cost are credit impaired.

A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated

future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

•significant financial difficulty of the debtor;

•a breach of contract, such as a default or being more than 90 days past due;

•it is probable that the debtor will enter bankruptcy or other financial reorganization.

Financial liabilities

Financial instruments include the following financial liabilities: loans and borrowings and trade and other payables.

The Group classifies financial liabilities into those measured at amortized cost and those measured at fair value

through profit or loss.

Financial liabilities – recognition and derecognition

Financial liabilities are initially recognized on the trade date when the Group becomes a party to the contractual

provisions of the instrument.

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Financial liabilities – measurement

Financial liabilities are initially recognized at fair value less any directly attributable transaction costs. Subsequent

to initial recognition, these liabilities are measured at amortized cost using the effective interest method.

Netting of financial instruments

Financial assets and financial liabilities are offset, and the net amount presented in the consolidated statement of

financial position if, and only if, the Group has a legal right to offset the amounts and intends either to settle them

on a net basis or to realize the asset and settle the liability simultaneously.

Inventories

Inventories are stated at either cost or net realizable value, whichever is lower. Costs comprise direct materials

and, where applicable, direct labor costs and those overheads that have been incurred in bringing the inventories

to their present location and condition. Cost is calculated using the weighted average method. Net realizable value

represents the estimated selling price less all estimated costs for in marketing, sale and distribution.

Contract assets

Contract assets relate to the Group’s right to reimbursement for work completed for products made to order,

which has not been invoiced on the reporting date. The contract assets are reclassified as trade receivables when

the right becomes unconditional. In general this occurs when the Group sends an invoice to the customer.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid

investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown

separately in the consolidated statement of financial position.

Impairment of non-financial assets

The carrying amounts of non-financial assets are reviewed at each balance sheet date to determine whether there

is any indication of impairment. If any such indication exists, the asset’s recoverable amount is calculated.

Goodwill is tested annually for impairment. For impairment testing, assets are grouped together into the smallest

group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of

other assets or CGUs. Goodwill arising from a business combination is allocated to CGU or groups of CGUs that are

expected to benefit from the synergies of the combination.

The recoverable amount is the higher of an asset’s fair value less cost to sell and its value in use. Value in use is

based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that

reflects current market assessments of the time value of money and the risks specific to the asset or CGU

An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its

recoverable amount. Impairment losses are recognized in the consolidated statement of profit or loss.

Share capital

Shares are classified as equity. The Company’s Articles of Association do not distinguish ordinary and preference

shares. The Company has no preference shares authorized or issued. All shares authorized and issued should

therefore be considered ‘ordinary’ shares.

Share premium

The share premium is the consideration paid for shares in excess of the nominal value.

Dividends

Dividends are recognized as a liability in the period in which they are declared by the shareholders.

Non-controlling interests

Non-controlling interests consist of perpetual bonds and is classified as equity at its nominal value.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Employee benefits

Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating

the amount of future benefits that employees have earned in current and prior periods; discounting that amount

and deducting the fair value of any plan assets. The discount rate is the yield at balance sheet date on high-quality

corporate or government bonds that have maturity dates approximating the terms of the Group’s obligations. The

calculation is performed by qualified actuaries using the projected unit credit method.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan

assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized

immediately in other comprehensive income. The Group determines the net interest expense (income) on the net

defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit

obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account

any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit

payments. Net interest expense and other expenses related to defined benefit plans are recognized in the

consolidated statement of profit or loss.

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid

contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is

available.

Share-based payment transactions

The share option program allows employees of the Group to acquire shares in the capital of the Company. The fair

value of options is recognized as an employee expense with a corresponding increase in equity. The fair value is

measured at grant date and spread over the period during which the employees become unconditionally entitled to

the options. At each balance sheet date, the Group revises its estimates of the number of options that are

expected to vest. It recognizes the impact of the revision to original estimates, if any, in the consolidated

statement of profit or loss, with corresponding adjustments to equity.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal

value) and share premium when the options are exercised. The share options are valued using the Black & Scholes

Model.

Profit-sharing and bonus plans

The Group recognizes a liability and an expense for bonuses and profit-sharing based on a formula that takes into

consideration the profit attributable to the Company’s equity holders after certain adjustments. The Group

recognizes a provision where contractually obliged or where there is a past practice that has created a constructive

obligation.

Provisions

A provision is recognized in the consolidated statement of financial position when the Group has a legal or

constructive obligation arising from a past event, and it is probable that an outflow of economic benefits will be

required to settle the obligation. If the effect is material and a reliable estimate can be made of the amount of the

obligation, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects

current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Trade and other payables

Trade and other payables are recognized initially at fair value and subsequently measured at amortized cost using

the effective interest method.

Revenue from contracts with customers

The Group’s revenue from contracts with customers is measured at the fair value of the consideration received or

receivable and represents the amounts for services provided and serviced products delivered in the course of

business during the current year, net of all related discounts and sales taxes. The Group provides quality services

and delivers serviced products (chips and packaged devices) in the semiconductor industry through their

operational units Test Operations, Supply Chain Management and Qualification & Failure Analysis. The Group’s

customers consist of Fabless Companies, OEMs and other companies in the automotive, telecommunications,

medical, industrial and electronic sectors. In addition, the Group is participating in publicly funded projects.

ANNUAL REPORT 2021

RoodMicrotec N.V.

The characteristics of revenue recognition in Test Operations is generally based on the services performed to the

customers for the actual number of pieces tested and based on fixed prices per tested piece.

The characteristics of the projects in Supply Chain Management include a life cycle of 1-3 months to several years,

whereby the development phase, if applicable, takes between 1 to 2 years, followed by the series delivery. Prices

in the development phase are generally based on services performed based on actual hours spent. Prices for the

series delivery are generally based on fixed prices per piece.

The characteristics of revenue recognition in Qualification & Failure Analysis is generally based on the services

performed to the customers based on the actual hours spent of the personnel and machines involved.

Revenue is recognized when a performance obligation is satisfied, in accordance with the terms of the contractual

agreement. Typically, performance obligations are satisfied over time as services are rendered. Revenue

recognized over time is based on the proportion of level of service performed.

The payment terms are based on general terms and conditions. The Group has neither specific obligations for

returns or refunds, nor specific warranties nor other related obligations.

Performance obligations and timing of revenue recognition

The Group determines at contract inception whether each performance obligation will be satisfied (that is, control

will be transferred) over time or at a point in time. The Group satisfies a performance obligation and recognizes

revenue over time, when the asset has no alternative use to the Group and the Group is entitled to an enforceable

right to payment for performance-to-date. The asset for each project is produced to a customer’s specification and

the asset can only be used by the specific customer.

If this condition is not satisfied, the Group recognizes revenue at a point in time. For each performance obligation

that is satisfied at a point in time, the revenue is recognized when the performance obligation is met, and control

is transferred to the customer. For each performance obligation that is satisfied over time, revenue is recognized

by measuring progress towards completion of that performance obligation. The project revenue and costs are

recognized as net revenue and costs in the consolidated statement of profit or loss in proportion to the services

provided as at the balance sheet date, based on the percentage stage of completion of the contracts, calculated on

the basis of costs incurred. Fulfillment of the performance obligations related to goods sold is measured using the

commercial shipment terms as an indicator for the transfer of control.

If profit on the project can be determined reliably, revenue is recognized in proportion to the services at reporting

date. Otherwise, revenue is recognized based on the cost incurred.

Where the total project costs exceed the project revenue, the loss is recognized in the consolidated statement of

profit or loss. The provision for this loss is included in the contract assets.

The Group applies the following practical exemptions in IFRS 15 ‘Revenue from contracts with customers’:

•not to account for significant financing components where the time difference between receiving consideration

and transferring control of products or services to its customer is one year or less; and

•expense the incremental costs of obtaining a contract when the amortization period of the asset otherwise

recognized is one year or less.

Revenue is recognized when the performance obligation has been met.

Government grants

Grants from the government are recognized at their fair value where there is a reasonable assurance that the

grant will be received and the Group will comply with all attached conditions. Grants are presented as other

income in the Consolidated Statement of Profit and Loss.

Raw materials and consumables

Raw materials and consumables represent the cost of raw materials and consumables that are attributable to the

services provided or products delivered.

Expenses

Operating lease payments

Lease payments are primarily recognized in line with note 10 ‘Right-of-use assets’. Lease payments that do not

qualify as leases under the application of IFRS 16 ‘Leases’ are charged to the consolidated statement of profit or

loss on a straight-line basis over the period of the lease.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Net financing costs

Net financing costs comprise interest payable on loans and borrowings calculated using the effective interest rate

method. The interest expenses component of finance lease payments is recognized in the consolidated statement

of profit or loss using the effective interest rate method. In so far as applicable, the interest component of lease

liabilities is also recognized under financing costs.

Income taxes

Income taxes on the profit or loss for the year comprises current and deferred taxes and are valued at the amount

that is expected to be recovered from or paid to the tax authorities. The amount of taxation is calculated based on

the tax rates and applicable tax legislation, as determined by law on the reporting date, in the countries in which

the Group generates taxable income. Income tax is recognized in the consolidated statement of profit or loss

except to the extent that it relates to items recognized directly in equity, in which case it is accounted for as

equity.

Deferred taxes are stated in full, using the liability method, on temporary differences arising between the fiscal

book value of the assets and liabilities and their carrying amounts in the consolidated financial statements.

However, the deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a

transaction other than a business combination that at the time of the transaction affects either accounting or

taxable profit or loss. Deferred taxes are determined using tax rates (and laws) that have been enacted or

substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is

realized or the deferred tax liability is settled and reflects uncertainty related to income taxes, if any.

Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences

to the extent that it is probable that future taxable profits will be available against which they can be used. Future

taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of

taxable temporary differences is insufficient to recognize a deferred tax asset in full, then future taxable profits,

adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual

subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent

that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the

probability of future taxable profits improves.

Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it is

probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred taxes are calculated on temporary differences arising from investments in subsidiaries, except where the

timing of the reversal of temporary differences is controlled by the Group and it is probable that temporary

differences will not be reversed in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets

against current tax liabilities and when the deferred taxes relate to the same tax authority.

Cash flow statement

The cash flow statement is prepared using the indirect method. It distinguishes between operating, investing and

financing activities. Payments and receipts of corporate taxes and interest are included as cash flow from

operating activities. Cash flow arising from disinvestment of financial interests in group companies and

subsidiaries is included as cash flow from investing activities, taking into account the available cash in these

interests. If applicable dividends paid are part of the cash flow from financing activities.

Cash flows relating to lease payments for right-of-use assets are part of cash flows from financing activities, while

cash flows relating to leases with a term of up to 12 months, low-value leases and non-lease components are

recognized under cash flows from operating activities.

Financial risk management and sensitivity analysis

The Group’s activities are exposed to a variety of financial risks: market risks (including currency risk and interest

rate risk), credit risks and liquidity risks. The Group’s overall risk management program focuses on the

unpredictability of markets (debtor management) and tries to minimize potential adverse effects on the Group’s

financial performance. The Group makes limited use of derivative financial instruments to hedge certain risk

exposures.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Credit risk

The activities of Group entail various credit risks. The maximum credit risk is equal to the carrying amount of the

trade receivables and other receivables. Trade receivables are generally on terms of 30 days. With some debtors

other payment terms are agreed upon varying from 14 to 60 days. The payment terms are based on general

terms and conditions. The Group has neither specific obligations for returns or refunds, nor specific warranties nor

other related obligations. Management has set up credit control policies to reduce the credit risk. The average

credit rating of the Group’s customers is comparable to the industry. There is no significant concentration of credit

risks within the Group, as the Group has a large number of customers. One customer comprises 10% or more of

net sales.

Allowances for impairment of trade and other receivables

The Group establishes allowances for impairment of trade and other receivables using an expected credit losses

model. The loss allowance is determined based on historical data of credit losses and updated periodically to

incorporate forward looking information. The Group has contact with clients on a regular basis and monitors

financial performance when needed. Due to the low levels of write-offs of trade and other receivables in the past,

the Group decided to apply a single loss-rate. The trade and other receivables are written off when there is no

reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include,

amongst others, the failure of a debtor to engage in a repayment plan with the Group. The amount of the

allowance is equal to the difference between the carrying amount of the receivable and the present value of

estimated future cash flows.

Foreign currency risks and sensitivity analysis

Within the Group’s customer portfolio, the Group is exposed to currency risk. The foreign exchange risk is

mitigated by exchange rate clauses in most of the Group’s contracts and sales. The Group has sales in US-Dollar

currency however this has minimal effect. The table below summarizes the sales in different currencies:

(x EUR 1,000)

2021

2020

Euro denominated net sales

13,563

10,882

US-Dollar denominated net sales

711

573

Total net sales

14,274

11,455

No detailed sensitivity analysis has been included, as the exposure is immaterial.

Borrowing risks and sensitivity analysis

The Group is exposed to interest rate risk, which is limited to the Eurozone. The Group’s interest rate risk policy

seeks to limit the entity’s exposure to interest rate risk on borrowings. Interest rate risk may arise on both non-

current and current borrowings. RoodMicrotec continually analyses developments in cash flow in relation to

available financing facilities and interest rate fluctuations. In 2021, the Group issued a loan of EUR 2.6 million and

maturity date is March 31, 2024. The annual average fixed interest rate is 4.83% and the effective return rate is

7.2%.

The Group does not have any variable interest rate borrowings outstanding as at December 31, 2021 and

therefore is not subjected to risks arising from market interest rate fluctuations.

Therefore, borrowing risks for this instrument are low.

Liquidity risk

Liquidity risk is the risk that RoodMicrotec cannot meet its financial obligations. The premise of liquidity risk is that

insofar as possible there should be sufficient liquidity for the Company to meet its current and future financial

obligations in both normal and difficult circumstances, without entailing unacceptable losses or threat of damage

RoodMicrotec’s reputation.

RoodMicrotec has centralized its cash management. Management monitors rolling forecasts of the Group’s liquidity

reserve and cash and cash equivalents. Furthermore, liquidity planning is one of the major elements in the

Group’s budget cycle. Due to the Group’s working capital ratio and market conditions, management has tight

monitoring procedures in place regarding direct cash flows. Both the cash position and sales forecasts are

frequently reviewed. Managing the working capital position is important in managing the Group’s liquidity risk.

RoodMicrotec N.V.

ANNUAL REPORT 2021

As per December 31, 2021 the working capital position is as follows:

(x EUR 1,000)

31-12-2021

Inventories

Contract assets

341

Trade receivables

1,480

Other receivables

247

Trade payables

-453

Other payables

-1,371

Income tax payable

-25

Cash and cash equivalents

2,558

Working capital

2,875

Except for inventory, all items in the table above are also relevant for the liquidity risk analysis.

Current liabilities with regard to payments of financing and interest costs are relatively small. The risk of strong

fluctuating interest rates is limited and the Group has no interest swaps outstanding. The main part of the interest

is related to the loan granted in 2021. This interest rate is fixed until March 31, 2023.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are

gross and undiscounted and include contractual interest payments and exclude the impact of netting agreements.

Contractual cash flows

(x EUR 1,000)

Carrying

amount

Total

1 year

1 to 2

years

2 to 5

years

More than

5 years

Loan

2,470

-2,883

-126

-2,631

—

Lease liabilities

462

-462

-242

-216

-4

—

Trade payables

453

-453

—

Liquidity position

3,385

-3,798

-821

-342

-2,635

—

Market interest rates and pensions

Changes in discount rates used in pension calculations are related to the changes in capital market interests.

Changes in discount rates will result in actuarial gains or losses. According to IAS 19R ‘Employee benefits’, these

actuarial gains and losses are immediately recognized in other comprehensive income. Disregarding this

mitigation, a 0.5% decrease in the market interest rate at year-end would increase the pension obligation by

approximately EUR 319,000. A 0.5% increase of the market interest rate at year-end would lead to a decrease of

the pension obligation by approximately EUR 293,000.

ANNUAL REPORT 2021

RoodMicrotec N.V.

Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern

in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimum

capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may,

if and when applicable, adjust the amount of dividends paid to shareholders, return capital to shareholders, issue

new shares or sell assets to reduce debt. Consistent with other parties in the industry, the Group monitors capital

based on the gearing ratio. This ratio is calculated as net debt divided by invested capital. Net debt is calculated as

total borrowings (including ‘current and non-current borrowings and lease liabilities’ as shown in the consolidated

statement of financial position) less cash and cash equivalents. Invested capital is calculated as ‘equity’ as shown

in the consolidated statement of financial position plus net debt. Below the gearing ratio of 2021 is stated

compared to 2020.

(x EUR 1,000)

31-12-2021

31-12-2020

Long term interest-bearing debt

2,690

460

Short term interest-bearing debt

242

2,761

Less cash and cash equivalents

-2,558

-1,351

Net debt

374

1,870

Total equity

5,583

3,844

Invested capital

5,957

5,714

Gearing ratio (net debt/capital x 100%)

33%

Legal risk

In September 2021, Prime Capital Debt SCS, SICAV-FIS – Robus Recovery Sub-Fund (Robus) has initiated legal

proceedings before the Regional Court of Hamburg against RoodMicrotec GmbH. Robus is the holder of the

perpetual bond (Genussscheine) of EUR 1,994k that RoodMicrotec GmbH issued in 2010 and of the perpetual bond

of EUR 500k that RoodMicrotec GmbH issued in 2012. Robus claims that it is entitled to an 11.7% compensation

payment in relation to 2017, 2018 and H1-2021. In addition, alleging non-compliance by RoodMicrotec GmbH of

the terms and conditions of the perpetual bonds, Robus claims the repayment of the nominal amount of the

perpetual bonds asserting the extraordinary termination of the perpetual bonds. The case that Robus brought

before the Regional Court of Hamburg regards the 2012 perpetual bond only and RoodMicrotec GmbH was

informed by Robus that the total amount claimed in the proceedings amounts to EUR 644k to be increased with

interest (statutory interest (Basiszinssatz) plus 5%). Robus informed RoodMicrotec GmbH that it reserved its

rights to also initiate litigation regarding the 2010 perpetual bond.

RoodMicrotec GmbH contested all allegations and claims, and denied that any compensation payments were due

on the perpetual bonds or that any grounds for extraordinary termination of the perpetual bonds exist.

In February 2022 both parties agreed on a settlement, see events after balance sheet on page 96.

In February 2022 Robus started a new legal case against the Company regarding the perpetual bond

(Genussscheine) of EUR 1,994k that RoodMicrotec GmbH issued in 2010, see events after balance sheet on

page 96. RoodMicrotec does not believe that the ultimate resolution of this pending legal proceedings will have a

material adverse effect on RoodMicrotec’s financial condition, liquidity position and results of operations. However,

future revisions to this assessment cannot be ruled out, and any reassessment of the legal proceedings could have

a material adverse effect on the financial condition, liquidity position and results of operations, particularly in the

period in which reassessment is made.

Fair values

For cash and cash equivalents, trade and other receivables, trade and other payables and current borrowings, the

fair value of the financial instruments approximates the carrying value. Therefore, the fair value disclosure in

tabular format for these items has not been presented.

RoodMicrotec N.V.

ANNUAL REPORT 2021

1.Net sales

The Group does not have separate segments as referred to in IFRS 8 ‘Operating segments’. IFRS 8 requires the

consolidated financial statements to present segment information that is in accordance with the internal

information used by management of the Group (chief operating decision maker) to assess performance and

allocate resources.

The Group focuses on a single operating segment considering the nature of its services and the type of class of

customer for these services. This operating segment consist of three units, namely: Test Operations, Supply Chain

Management and Qualification & Failure Analysis; to help the development of business level

strategies. Management uses the consolidated results of operations to come up with informed business decisions.

Consequently, the disclosures for segment information are limited to net sales and non-current assets per country.

In accordance to management reporting, net sales for the operational units Test Operations, Supply Chain

Management and Qualification & Failure Analysis are also disclosed.

Non-current assets amounting to EUR 2,000 (2020: EUR 3,000) are located in the Netherlands and the majority of

the non-current assets is located in Germany.

Net sales by operational unit

(x EUR 1,000)

2021

2020

Test Operations

7,938

5,429

Supply Chain Management (SCM)

3,364

2,659

Qualification & Failure & Analysis

2,972

3,367

Total

14,274

11,455

Net sales by geographic region

(x EUR 1,000)

2021

2020

Germany

7,776

6,328

Rest of Europe

5,326

4,271

Asia

1,154

734

Rest of the world

122

Total

14,274

11,455

The net sales in the Netherlands amounts to nil in both 2021 and 2020.

The basis for attributing net sales from external customers to individual geographical regions, is the country where

the customer is based. In 2021, one individual customer meets the 10% criterion with a total reported revenue of

EUR 2,680,000 (2020: EUR 1,840,000).

2.Other income

(x EUR 1,000)

2021

2020

Other income

258

419

Total

258

419

The Group is making use of government grants due to its participation in publicly funded projects. In 2021,

EUR 258,000 (2020: EUR 419,000) has been granted for this participation. The two projects are funded by the

German Federal Ministry of Education and Research (BMBF) and also received funding from the ECSEL Joint

Undertaking, which is supported by the European Union's Horizon 2020 research and innovation program.

The projects are well aligned with the Group’s strategy and focus on:

•packaging and testing of high power GaN transistors;

•test strategies for photonic devices.

ANNUAL REPORT 2021

RoodMicrotec N.V.

3.Raw materials and consumables

(x EUR 1,000)

2021

2020

Cost of raw materials and consumables

2,634

2,287

Total

2,634

2,287

4.Personnel expenses

(x EUR 1,000)

2021

2020

Salaries

5,669

5,178

Social securities

1,186

1,220

‘Kurzarbeit' and other credits

-115

-267

Share options

—

Pension charges

Total

6,782

6,192

In 2021, capitalized internal hours are deducted from salaries amounting to EUR 93,000 (2020: EUR 111,000).

Personnel expenses included an expense of approximately EUR 381,000 (2020: nil) for the employees bonus

scheme, around EUR 117,000 (2020: nil) of these expenses pertain to the Board of Management’s bonus scheme.

‘Kurzarbeit’, Germany's short-time work scheme, is an instrument for keeping employment stable during a

financial crisis. ‘Kurzarbeit’ is a social insurance program whereby employers reduce their employees’ working

hours instead of laying them off. Under ‘Kurzarbeit’, the government normally provides an income ‘replacement

rate’ of 60% or more. Since end of May 2021 RoodMicrotec GmbH made no longer use of the ‘Kurzarbeit’

program.

The professional categories of the employees are as follows:

Category (in FTE)

2021

2020

Operational unit

Management and administrative

Sales and support

Short-time work

-4

-10

Total average number of employees

The average number of persons employed by the Group in 2021 on a full-time basis was 89 (2020: 86). Reduction

of -4 FTE (2020: -10 FTE) was due to short-time work. In 2021 an average of 2 persons were employed in the

Netherlands on a full-time basis (2020: 3).

At year-end 2021, the Group employed 92 persons (2020: 95) on a full-time basis.

5.Other expenses, other than depreciation and amortization

(x EUR 1,000)

2021

2020

Housing and equipment costs

1,372

1,314

Selling and administrative expenses

958

736

Total

2,330

2,050

RoodMicrotec N.V.

ANNUAL REPORT 2021

Auditor fees

The total costs for the services rendered by KPMG charged to the statement of profit or loss amount to:

2021

2020

(x EUR 1,000)

KPMG

Accountants

N.V.

Other KPMG

network

Total

KPMG

Accountants

N.V.

Other KPMG

network

Total

Audit of the financial

statements

123

127

250

142

228

Other assurance services

—

Tax-related advisory services

—

Other non-audit services

—

Total

123

127

250

142

228

KPMG Accountants N.V. provided in 2021 no other services in addition to the statutory audit of the 2021

consolidated and Company financial statements.

6.Depreciation and amortization

(x EUR 1,000)

2021

2020

Intangible assets

214

191

Land and buildings

149

130

Machinery and equipment

783

772

Depreciation of right-of-use assets

274

300

Other property, plant and equipment

139

151

Total

1,559

1,544

7.Financial expenses

(x EUR 1,000)

2021

2020

Interest

189

170

Total

189

170

Interest expenses:

Loan

135

—

Bond loan

164

On leases

Other financial expenses

Total

189

170

Interest paid:

Loan

—

Bond loan

150

Other financial expenses

Total

136

152

The interest expenses include amortization costs amounting to EUR 53,000 (2020: EUR 18,000), which relate to

discount and issuance cost of loans provided.

ANNUAL REPORT 2021

RoodMicrotec N.V.

8.Income taxes

Amounts recognized in profit or loss

(x EUR 1,000)

2021

20201

Current tax expense (income):

Current year

358

-66

Deferred tax expense (income):

Recognition of previously unrecognized tax losses

-727

—

Origination and reversal of temporary differences

-28

-38

Tax expense (income) in Consolidated Statement of Profit or Loss

-397

-104

No income taxes were paid in 2021 (2020: nil).

Reconciliation of the effective tax rate

(x EUR 1,000)

2021

20202

Profit (loss) before taxes

1,038

-369

Tax using the Company's domestic tax rate

303

29.2%

-102

27.6%

Effect of tax rates in foreign jurisdictions

-2

-0.2%

-0.8%

Tax effect of:

Non-deductible expenses

5.5%

-8.9%

Recognition of previously unrecognized tax losses

-727

-70.0%

—

—%

Origination and reversals of temporary differences

-28

-2.7%

-38

10.3%

Total

-397

-38.2%

-104

28.2%

The effective tax rate, i.e. the ratio between total tax and the profit before corporate income tax, amounts to

-38.2% (2020: 28.2%). The regions where the Group operates are the Netherlands and Germany, where the

following tax rates applied in 2021: The Netherlands 15.0% and Germany 29%. As the major part of the activities

is in Germany, the Group uses the German domestic tax rates of 29% (2020: 27.5%).

Amounts recognized in OCI

(x EUR 1,000)

2021

2020

Deferred taxes on positions recognized as comprehensive income:

Tax income (expense) remeasurement of defined benefit obligation

-61

Tax income (expense) revaluation of land and buildings

—

-104

Tax income (expense) in Consolidated Statement of Comprehensive

income

-61

-62

RoodMicrotec N.V.

ANNUAL REPORT 2021

1 Adjusted for comparison purposes

2 Adjusted for comparison purposes

9.Property, plant and equipment

(x EUR 1,000)

Land and

buildings at

fair value

Machinery

and

equipment

Others

Total

1 January 2020

Cost or fair value

3,024

21,323

2,726

27,073

Accumulated depreciation

-260

-18,467

-2,216

-20,943

Carrying amount 1 January 2020

2,764

2,856

510

6,130

Additions

—

712

745

Revaluation

380

—

380

Revaluation / Disposals – Cost

-389

-293

-40

-722

Revaluation / Disposals – Accumulated

Depreciation

390

292

722

Depreciation charge

-130

-772

-151

-1,053

Carrying amount 31 December 2020

3,015

2,795

392

6,202

31 December 2020

Cost or fair value

3,015

21,742

2,719

27,476

Accumulated depreciation

—

-18,947

-2,327

-21,274

Carrying amount 31 December 2020

3,015

2,795

392

6,202

Useful economic life in years

2-10

3-10

(x EUR 1,000)

Land and

buildings at

fair value

Machinery

and

equipment

Others

Total

1 January 2021

Cost or fair value

3,015

21,742

2,719

27,476

Accumulated depreciation

—

-18,947

-2,327

-21,274

Carrying amount 1 January 2021

3,015

2,795

392

6,202

Additions

483

557

Disposals – Cost

-10

-140

-142

-292

Disposals – Accumulated Depreciation

140

142

292

Depreciation charge

-149

-783

-139

-1,071

Carrying amount 31 December 2021

2,890

2,495

303

5,688

31 December 2021

Cost or fair value

3,029

22,085

2,627

27,741

Accumulated depreciation

-139

-19,590

-2,324

-22,053

Carrying amount 31 December 2021

2,890

2,495

303

5,688

Useful economic life in years

2-10

3-10

ANNUAL REPORT 2021

RoodMicrotec N.V.

Land and buildings at historical cost

(x EUR 1,000)

2021

2020

Initial costs land and buildings

4,145

Additions (disposals)

—

Accumulated depreciation

-3,879

-3,868

Net book amount at depreciated historical cost

280

277

The valuation report dated December 3, 2020, prepared by Diplom-Betriebswirt Friedrich Kiefer, state the fair

value of the land and buildings is EUR 3,015,000 (previous valuation report in 2017: EUR 3,345,000).

The valuation of land and buildings is based on a market valuation of land and rental value in combination with the

technical life of the building. The land has been valued against EUR 55 per square meter.

According to IFRS 13 ‘Fair value measurement’ hierarchy, the revalued land and buildings belongs to Level 3 –

Significant Unobservable Inputs. The most significant input, all of which are unobservable is the estimated rental

value and the value of land, which has been valued at EUR 55 per square meter.

Valuation of land

Total square meters

EUR/square meter

Total value in EUR

Built land

14,780

812,900

Valuation of building

Valuation of the building is based on rental-market prices for office and production space per square meter. The

range of market prices per square meter is between 2.00 and 6.00 EUR/square meter.

The total square meters of the building, which has been used to determine the rental value is 5,714 square

meters. The total annual rental value amounts to EUR 292,872 (this includes the value of the built land).

A multiplier is used (according to valuation techniques in the real estate market) to calculate the value which

amounts to 10.390977. The multiplier times the annual rental value of EUR 292,872 results in the value of

building, including built land, amounting to EUR 3,043,226. Deducting for deviations from normal structural

condition EUR 30,000 from the value, the valuator has rounded the appraisal value to EUR 3,015,000.

A quantitative sensitivity analysis for the valuation is shown below:

Sensitivity level M2 built land

EUR 50/M2

EUR 60/M2

Impact in EUR (basis: 14,780 M2)

-73,900

73,900

Sensitivity level rental building

-5%

Rental value in EUR (basis: EUR 292,872)

-152,200

152,200

Impairment loss and subsequent reversal

The Group neither incurred nor reversed any impairment losses in 2021 (2020: zero).

Assets under construction

Assets under construction are included in the property, plant and equipment category ‘Machinery and equipment’.

As at December 31, 2021, assets under construction amounted to EUR 150,000 (2020: zero).

Security

Security on land and buildings amounting to EUR 2.5 million was provided as a mortgage right for the holders of

the secured bond loan issued in June 2014. On March 31, 2021 the bond loan was fully repaid and during 2021

the securities were released. For further information on security, reference is made to note 20 ‘Loans and

borrowings’.

RoodMicrotec N.V.

ANNUAL REPORT 2021

10.Right-of-use assets

The Group leases various offices, warehouses, equipment and vehicles. Rental contracts are typically made for

fixed periods but may have extension options as described in below.

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the

contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of

offices and warehouses for which the Group is a lessee, it has elected not to separate lease and non-lease

components and instead accounts for these as a single lease component. Lease terms are negotiated on an

individual basis and contain different terms and conditions. The lease agreements do not impose any covenants

other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used

as security for borrowing purposes.

Right-of-use assets are measured at cost comprising the following:

•the amount of the initial measurement of lease liability;

•any lease payments made at or before the commencement date less any lease incentives received;

•any initial direct costs; and

•restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a

straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is

depreciated over the underlying asset’s useful life.

Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are

recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term

of 12 months or less without a purchase option. Low-value assets comprise IT equipment and small items of office

furniture.

Extension and termination options are included in a number of office and warehouse leases. These are used to

maximize operational flexibility in terms of managing the assets used in the Group’s operations. The majority of

extension and termination options held are exercisable only by the Group and not by the respective lessor.

In determining the lease term, management considers all facts and circumstances that create an economic

incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after

termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not

terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs

which affects this assessment and that is within the control of the Group.

For leases of offices and warehouses, the following factors are normally the most relevant:

•If there are significant penalty payments to terminate (or not extend), the Group is typically reasonably

certain to extend (or not terminate);

•If any leasehold improvements are expected to have a significant remaining value, the Group is typically

reasonably certain to extend (or not terminate);

•the importance of the underlying asset to Groups strategy and operations; or

•Otherwise, the Group considers other factors including historical lease durations and the costs and business

disruption required to replace the leased asset.

Most extension options in offices leases have not been included in the lease liability due to the length of the

remaining lease term.

The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to

exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a

significant change in circumstances occurs, which affects this assessment, and that is within the control of the

lessee. During the financial year 2021, the financial effect of revising lease terms to reflect the effect of exercising

extension was an increase in recognized lease liabilities and right-of-use assets of EUR 4,000 (2020: EUR 49,000).

ANNUAL REPORT 2021

RoodMicrotec N.V.

Movements in right-of-use assets can be shown as follows:

(x EUR 1,000)

Company

offices

Other

operating

assets

Total assets

1 January, 2020

Cost

981

265

1,246

Accumulated depreciation

-223

-67

-290

Carrying amount 1 January 2020

758

198

956

Additions

—

Renewal option

Terminations *

—

-20

Depreciation charge

-210

-90

-300

Carrying amount 31 December 2020

592

136

728

Cost

1,025

293

1,318

Accumulated depreciation

-433

-157

-590

Carrying amount 31 December 2020

592

136

728

*Termination of right-of-use assets in 2020 relates to early termination and return of cars.

1 January, 2021

Cost

1,025

293

1,318

Accumulated depreciation

-433

-157

-590

Carrying amount 1 January 2021

592

136

728

Additions

—

Renewal option

—

Terminations - Cost

-40

-72

-112

Terminations - Accumulated depreciation

112

Depreciation charge

-197

-77

-274

Carrying amount 31 December 2021

395

458

Cost

985

225

1,210

Accumulated depreciation

-590

-162

-752

Carrying amount 31 December 2021

395

458

The other operating assets consist mainly of leased company vehicles.

RoodMicrotec N.V.

ANNUAL REPORT 2021

The lease liabilities can be specified as follows:

(x EUR 1,000)

Balance at 1 January 2020

959

Additions

Renewal option

Terminations *

-20

Interest costs

Lease payments

-303

Balance at 31 December 2020

733

Lease liability – non-current

460

Lease liability – current

273

Total

733

*Terminations in 2020 relates to early termination and return of cars.

(x EUR 1,000)

Balance at 1 January 2021

733

Additions

—

Renewal option

Terminations

—

Interest costs

Lease payments

-278

Balance at 31 December 2021

462

Lease liability – non-current

220

Lease liability – current

242

Total

462

The Group did not receive any COVID-19 related rent concessions and therefore has not applied the practical

expedient of the COVID-19-Related Rent Concessions - Amendment to IFRS 16 Leases extended in April 2021.

The contractual maturity of the future lease liabilities is as follows:

(x EUR 1,000)

31-12-2021

31-12-2020

Under one year

242

273

One to five years

220

460

Over five years

—

Contractual future lease liabilities

462

733

The total cash outflow for leases in 2021 was EUR 278,000 (2020: EUR 303,000).

ANNUAL REPORT 2021

RoodMicrotec N.V.

The consolidated statement of profit or loss contains the following lease items:

(x EUR 1,000)

2021

2020

Costs of short-term leases

Costs of low-value leases

Total

11.Intangible assets

(x EUR 1,000)

Goodwill

Development

expenditure

Other

intangible

assets

Total

Cost

Balance at 1 January 2020

1,741

886

526

3,153

Investments

—

111

120

Disinvestment

—

-5

Balance at 31 December 2020

1,741

997

530

3,268

Accumulated amortization

Balance at 1 January 2020

—

397

438

835

Amortization

—

149

191

Disinvestment

—

-5

Balance at 31 December 2020

—

546

475

1,021

Carrying amount

Balance at 1 January 2020

1,741

489

2,318

Balance at 31 December 2020

1,741

451

2,247

(x EUR 1,000)

Goodwill

Development

expenditure

Other

intangible

assets

Total

Cost

Balance at 1 January 2021

1,741

997

530

3,268

Investments

—

124

Disinvestment

—

-15

-55

-70

Balance at 31 December 2021

1,741

1,075

506

3,322

Accumulated amortization

Balance at 1 January 2021

—

546

475

1,021

Amortization

—

175

214

Disinvestment

—

-15

-47

-62

Balance at 31 December 2021

—

706

467

1,173

Carrying amount

Balance at 1 January 2021

1,741

451

2,247

Balance at 31 December 2021

1,741

369

2,149

RoodMicrotec N.V.

ANNUAL REPORT 2021

Goodwill

Goodwill is tested annually for impairment. The goodwill is allocated to the German subsidiary RoodMicrotec GmbH

as the cash-generating unit. The recoverable amount of this cash-generating unit is determined using value-in-use

calculations.

These calculations use cash flow projections based on the Group’s budget for 2022 and forecasts for 2023-2026,

based on an annual organic growth rate of 7.0%. Residual value is based on a 1.0% perpetual growth rate. Given

the high degree of uncertainty caused by COVID-19 and supply chain disruptions, the Group chose to use the

expected cash flow approach as opposed to the traditional approach. Under the expected cash flow approach,

uncertainty about future cash flows is reflected in different probability-weighted cash flow projections, rather than

in the discount rate.

The discount rate used is post-tax and reflects specific (market) risks and represents the current WACC. The

proportion of the equity and debt used in the WACC calculation is based on the optimum capital structure. The

WACC post-tax used is 13.6% (2020: 13.6%).

The discount rate applied in accordance with article 55 of IAS 36 ‘Impairment of assets’ corresponds to a WACC

pre-tax of 19.1% (2020: 18.8%).

The recoverable amount for 2021 amounts to EUR 12.1 million. The headroom in the impairment test scenario

amounts to EUR 3.6 million. There are no indications for a reasonably possible change in the key assumptions

mentioned above.

Sensitivity analyses were prepared to determine the point where an impairment loss would be necessary. The

headroom would be zero in case a WACC post-tax is used of 18.1%.

Development expenditure

In 2021, the Group invested in internally generated intangible assets amounting to EUR 93,000 (2020:

EUR 111,000). These investments relate to packaging and testing of high power GaN transistors. The project is

well aligned with the Group’s strategy. Development expenditure will be amortized during the expected economic

lifetime of 4 years starting when the project is finished. Mid 2021 the project is finished. The amortization of

development expenditure amounts to EUR 176,000 (2020: EUR 149,000). In 2021, EUR 15,000 was disinvested

place (2020: nil) with no losses.

Amortization is accounted for in the consolidated statement of profit or loss within depreciation. Loss on

disinvestment is accounted for in the consolidated statement of profit or loss within other operating expenses.

Other intangible assets

The other intangible assets consist of capitalized expenses related to website and capitalized software and

licenses.

ANNUAL REPORT 2021

RoodMicrotec N.V.

12.Deferred tax balances

Deferred tax assets and liabilities are offset, when there is a legally enforceable right to offset current tax assets

against current tax liabilities and the deferred taxes relate to the same tax authority.

Deferred taxes comprise the following:

(x EUR 1,000)

1 January,

2020

Recognized

directly in

equity’

Recognized

in profit or

loss

Recognized

in OCI

31 December,

2020

Deferred tax assets

Tax losses carried forward

1,802

—

1,868

Right-of-use assets

—

Employee benefits

644

—

-22

664

Provisions

—

Total deferred tax assets

2,449

—

2,536

Deferred tax liabilities

Property, plant and equipment

-721

—

-104

-776

Intangible assets

-134

—

-124

Total deferred tax liabilities

-855

—

-104

-900

Deferred tax balances

1,594

—

104

-62

1,636

(x EUR 1,000)

1 January,

2021

Recognized

directly in

equity’

Recognized

in profit or

loss

Recognized

in OCI

31 December,

2021

Deferred tax assets

Tax losses carried forward

1,868

—

394

—

2,262

Right-of-use assets

—

Employee benefits

664

—

-61

604

Provisions

—

-1

—

Total deferred tax assets

2,536

—

394

-61

2,869

Deferred tax liabilities

Property, plant and equipment

-776

—

-767

Intangible assets

-124

—

-107

Loan

—

-21

—

-19

Total deferred tax liabilities

-900

-21

—

-893

Deferred tax balances

1,636

-21

422

-61

1,976

Deferred tax assets: tax losses carried forward

The Group has recognized deferred tax assets at a total of EUR 2.3 million (December 31, 2020: EUR 1.9 million),

which relate entirely to tax loss carried forward in Germany, representing a total amount of unused losses of

EUR 20.2 million (December 31, 2020: EUR 21.9 million). The relevant unused losses in Germany, generated by

RoodMicrotec GmbH, can be carried forward in time indefinitely. Losses may be carried back one year and carried

forward indefinitely. Losses may be offset against profits up to EUR 1 million without restriction, but only 60% of

income exceeding EUR 1 million may be offset against loss carry forwards.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Consistent with past practice, the deferred tax asset for the unused German tax losses is measured based on the

taxable profits in the business plan forecast of five years. The Group considers a taxable profit forecast for a

longer horizon as unreliable. As a result some prudence has been applied in the measurement of the deferred tax

assets. An amount of EUR 7.8 million of unused tax losses in Germany are recognized on the balance sheet as per

December 31, 2021. Consequently an amount of EUR 12.4 million of unused losses are not recognized as per

December 31, 2021.

The Group’s taxable results in Germany improved strongly in recent years, in 2021 the Group realized a tax profit

in Germany. The increase of German tax losses in recent prior years was caused by unexpected events outside the

normal scope of business (one-time events), being remeasurement tax losses on plan assets for the years

2017-2019 and the impact of COVID-19 for the year 2020. Excluding these one-time events, the Group has

realized operational German fiscal profits as from 2017 onwards.

The German combined statutory tax rate for RoodMicrotec GmbH was 29% for the 2021 fiscal year (2020:

27.5%). This is based on a corporate income tax rate of 15%, plus a solidarity surcharge of 5.5% and a trade tax

of 13%.

With effect from 2022, losses in the Netherlands can be offset for an unlimited period. At the same time as this

change, tax loss carry-forwards are maximized at EUR 1.0 million plus 50% of the taxable amount over and above

this EUR 1.0 million. At year-end 2021 and 2020, the available tax losses were not recognized. These

unrecognized tax losses are in total approximately EUR 1.0 million as per December 31, 2021 (2020: EUR 1.0

million). No deferred tax assets have been recognized for tax losses in the Netherlands.

Unused tax losses for which no deferred tax asset is recognized

(x EUR 1,000)

2021

Expiry date

2020

Expiry date

Netherlands

1,003

none

1,029

2021-2026

Germany

12,359

none

13,010

none

Total unrecognized tax losses

13,362

14,039

The amount of unused tax losses carried forward as per December 31, 2021 for which no deferred tax assets are

recognized are best possible estimates. The fiscal year of the Group equals the financial year.

Deferred tax liabilities

As a result of the revaluation of land and buildings, the capitalization of development expenditure, a provision for

deferred tax liabilities has been recognized amounting to 29% (2020: 27.5%) of the difference between the fiscal

book value and carrying amount. All deferred tax liabilities, except for the deferred tax liability related to the loan

(December 31, 2021: EUR 19k), are within the same jurisdiction.

ANNUAL REPORT 2021

RoodMicrotec N.V.

13.Inventories

(x EUR 1,000)

31-12-2021

31-12-2020

Raw materials and consumables

Total

No expenses are included in the consolidated statement of profit or loss in 2021 (2020: zero) with respect to

write-downs of inventory to lower net realizable value.

14.Contract assets

(x EUR 1,000)

31-12-2021

31-12-2020

Contract assets

341

563

Total

341

563

15.Trade and other receivables

Trade and other receivables are specified as follows:

(x EUR 1,000)

31-12-2021

31-12-2020

Not overdue

1,234

1,145

< 30 days overdue

229

159

> 30 days and < 60 days overdue

> 60 days overdue

Allowance for credit losses

-22

-25

Trade receivables

1,480

1,353

Other receivables

247

188

Total

1,727

1,541

The carrying amount of the trade and other receivables approximates the fair value, due to their short-term

nature.

Information regarding the Group’s exposure to credit risk, foreign currency risk and interest rate risk can be found

in the section ‘Financial risk management and sensitivity analysis’.

Allowance for credit losses

The Group applies the IFRS 9 ‘Financial instruments’ simplified approach to measuring expected credit losses

which uses a lifetime expected loss allowance for all trade receivables and contract assets. The loss allowance is

determined based on historical data of credit losses and updated periodically to incorporate forward looking

information. As per the end of the year 2021, the Group applies a single-loss rate of 1.2% (2020: 1.3%) of trade

receivables and contract assets.

The movement in the allowance for credit losses during the year is as follows:

(x EUR 1,000)

2021

2020

Balance at 1 January

-25

-97

Release/addition to the allowance for credit losses

-5

Utilized during the year

—

Balance at 31 December

-22

-25

As at December 31, 2021, trade receivables of around EUR 0.3 million (2020: EUR 0.2 million) were past due.

There were no indications on the balance sheet date that a provision was necessary in addition to the provision

already taken for expected credit losses on trade receivables.

RoodMicrotec N.V.

ANNUAL REPORT 2021

16.Cash and cash equivalents

(x EUR 1,000)

31-12-2021

31-12-2020

Cash at bank and on hand

2,558

1,351

Total

2,558

1,351

17.Share capital

Authorized share capital

At December 31, 2021 the authorized share capital comprised 100,000,000 shares (2020: 100,000,000). The

shares have a nominal value of EUR 0.11 each.

In 2021, the movement of the issued shares is as follows:

(x EUR 1,000)

Number

of Shares

Capital

(EUR)

Premium

(EUR)

Balance at 1 January

74,896

8,239

20,709

Issue of shares through the exercise of option rights

180

Balance at December 31

75,076

8,259

20,725

As at December 31, 2021, a total number of 75,076,267 shares are issued (2020: 74,896,267). Of these, the

Company holds 4,100 shares (2020: 4,100) as treasury shares. The number of shares held by the Company at the

end of the year under review was less than 0.01% of the total number of issued shares (2020: < 0.01%).

During 2021 shares are issued which relates to exercised options by management. More details to exercised

options are provided in note 19 ‘Options’.

As at December 31, 2021, the Company has 1,530,785 warrants outstanding, which are all held by

Blikkenburg B.V. (2020: 1,530,785). The exercise price of each warrant is EUR 0.42. These warrants are

exercisable as of the date of issuance. The expiration date of these warrants is January 31, 2023.

As at March 31, 2021 the Group granted a total number of 7,485,000 non-listed 5-year warrants to the Lenders of

loan issued (see note 20 ‘Loans and borrowings’). Each Warrant shall entitle the relevant Lender or subsequent

holder of the Warrants to subscribe for one ordinary share in the capital of the Company at a subscription price of

EUR 0.15, to be paid in cash upon exercise. Of the Warrants issued, 1/3 shall be issued on a non-conditional basis

with a vesting period of 1 year, 1/3 shall be issued conditional upon the amount of the secured loan that shall be

outstanding on the first anniversary of completion and 1/3 shall be issued conditional upon the amount of the

secured loan that shall be outstanding on the second anniversary of completion. The expiration date of these

warrants is March 31, 2026.

In the past the Company has issued warrants to shareholders and investors as an incentive to attract new

investors or to reward long-term shareholders. In the future, the Company may consider issuing warrants again,

but will decide on this on a case by case basis.

Share premium

The share premium reserve relates to the issuance of shares above par (nominal value) and granting of options to

employees and management. The share premium is the consideration paid for shares in excess of the nominal

value.

Revaluation reserve

As a result of the revaluation of land and buildings a revaluation reserve has been recognized. The revaluation

reserve cannot be used for dividend distributions.

Other reserve

The other reserve comprises stock warrants issued in combination with the loan on March 31, 2021. The warrants

are considered equity instruments and therefore included in equity for the consideration received at the issuance

date of the warrants (see Note 20).

ANNUAL REPORT 2021

RoodMicrotec N.V.

Non-controlling interests

In November 2010, the German subsidiary RoodMicrotec GmbH issued a perpetual bond of EUR 1,994,096. On

December 27, 2012 RoodMicrotec GmbH issued additionally a perpetual bond of EUR 500,000.

The compensation to be paid results from the multiplication of 11.70% annually with the par value per security

and the actual number of calendar days in the month for which the compensation is implemented divided by the

actual number of days (365 or 366) in the respective calendar year.

RoodMicrotec GmbH is not obligated to pay under one of the following conditions (in this case a claim does not

arise):

•if, and insofar as, such a claim would lead to or increase an annual net loss of RoodMicrotec GmbH in the

business year to which the determining profit period refers, and

•insofar as the profit distributions from free equity capital cannot be paid simultaneously.

The term “free equity” is the amount that can be normally distributed to the shareholders after dissolution of all

“free” reserves.

Compensation becomes only due if, and insofar as, RoodMicrotec GmbH decides on such a payment. If

RoodMicrotec GmbH decides against a payment, it is not obliged to pay compensation (so unpaid compensation

does not accumulate). If RoodMicrotec GmbH decides on a payment and there are unpaid compensations

(“compensation arrears”), then payment of these compensations must occur before any dividends or capital can

be paid or distributed to the normal shareholders.

A claim for a compensation payment for year 2021 did not arise. The annual net profit for 2021 of RoodMicrotec

GmbH amounted to EUR 1,420,000 (2020: EUR -238,000), but profit distribution cannot be paid from the free

capital in the 2021 financial year. Therefore, the compensation payment for perpetual bonds in 2021 is EUR 0

(2020: EUR 0).

As of December 31, 2021, the total unpaid compensation amounts to zero.

There is no contractual obligation for redemption, as the securities are without due date (no redemption period or

maturity agreed upon). Furthermore, it is at the discretion of the issuing party when a termination is made.

The securities conditions do not have any redemption triggers that are out of the control of RoodMicrotec GmbH.

Only RoodMicrotec GmbH can unilaterally call-in this bond. The bond does not entitle the owner to any

RoodMicrotec N.V. shareholder rights. If an annual compensation payment leads to an annual net loss for

RoodMicrotec GmbH in the business year to which the determining profit period refers, or increases a net loss, the

claim to this compensation does not arise for the accounting period.

Proposal for result appropriation

In accordance with article 27 of the Company’s Articles of Association, the Board of Management proposes that the

net profit be added to the retained earnings.

Appropriation of result of 2020

The financial statements for the reporting year 2020 have been adopted by the General Meeting on June 10, 2021.

The General Meeting has adopted the appropriation of net loss as proposed by the Board of Management and

approved by the Supervisory Board.

18.Earnings per share

Earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company

by the weighted average number of shares outstanding during the year.

2021

2020

Net profit (loss) attributable to equity holders of the Company

(x EUR 1,000)

1,435

-265

Weighted average number of shares outstanding (in thousands)

75,016

74,896

Basic earnings per share (x EUR 1)

0.02

0.00

RoodMicrotec N.V.

ANNUAL REPORT 2021

Earnings per share - diluted

Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding, to take

into account conversion of all potentially dilutive shares, consisting of warrants and share options which are in the

money.

2021

2020

Net profit (loss) attributable to equity holders of the Company

(x EUR 1,000)

1,435

-265

Weighted average number of shares outstanding (in thousands)

75,016

74,896

Adjustments for:

- Warrants (in the money) (in thousands)

2,495

—

- Share options (in the money) (in thousands)

—

Weighted average number of shares for diluted earnings per share (in

thousands)

77,511

74,896

Diluted earnings per share (x EUR 1)

0.02

0.00

19.Options

Share options

Share options were part of the remuneration till 2019 and were granted to the members of the Board of

Management. The remuneration report is stated on page 50.

The share options granted to Mr. O.M. Sallenhag and Mr. A. Ladega have no vesting period. The outstanding

options at December 31, 2020 will expire March 5, 2022 or on the date of retirement whichever is earlier. Option

rights that have not been exercised as of the day the employee agreement has been terminated, will be cancelled

on the day of termination.

The Group has no legal or constructive obligation to repurchase or settle the options in cash. The share options

are valued using the Black and Scholes valuation model. Mr. O.M. Sallenhag and Mr. Ladega exercised their

options in 2021 against an exercise price of EUR 0.20. No option rights are outstanding as per December 31, 2021

(December 31, 2020: 180,000 options).

ANNUAL REPORT 2021

RoodMicrotec N.V.

Outstanding option rights

Option holder

Balances as

31-12-2020

Exercised in

2021

Expired/

Cancelled

Balances as

31-12-2021

Exercise

price in EUR

Mr. O.M. Sallenhag

2018

120,000

—

0.20

Mr. A. Ladega

2018

60,000

—

0.20

Total

180,000

—

20.Loans and borrowings

This note provides information on the contractual terms of the Group’s interest-bearing loans and borrowings.

(x EUR 1,000)

31-12-2021

31-12-2020

Loan

2,470

—

Secured bond loan

—

2,488

Total loans and borrowings

2,470

2,488

Less: current portion of long-term loans

—

-2,488

Total non-current loans and borrowings

2,470

—

Debt repayment schedule as per December 31, 2021

(x EUR 1,000)

Total

Current

liabilities

Non-

current

liabilities

1 to 2

years

2 to 5

years

than 5

years

Loan

2,600

—

2,600

—

2,600

—

Total interest-bearing loans and

borrowings

2,600

—

2,600

—

2,600

—

Interest expenses repayment schedule as per December 31, 2021

(x EUR 1,000)

Total

Current

liabilities

Non-

current

liabilities

1 to 2

years

2 to 5

years

than 5

years

Loan

283

126

157

126

—

Total

283

126

157

126

—

Secured bond loan

On June 30, 2014, the Group issued a EUR 2,500,000 bond loan with mortgage cover. The bond loan composed of

2,500 bonds with EUR 1,000 nominal value at an issue price EUR 2,350,000. Maturity date was June 30, 2020 and

on May 6, 2020 during a virtual extraordinary bondholders meeting the maturity date of the bond is extended with

one year. Upon issuance, the bond was discounted at 94% (EUR 150,000). The fixed annual coupon rate is 6%

and the effective annual interest rate is 7.92%. Upon issuance, the Group capitalized bond issuance cost

amounting to EUR 100,000 which will be amortized over the lifetime. The amortization in 2021 related to the

discount and bond issuance cost amounted to EUR 14,000 (2020: EUR 14,000). As at December 31, 2021, the

secured bond loan amounted to EUR nil (2020: EUR 2,488,000). The bond loan was repaid on March 31, 2021.

EUR 792,000 was repaid in cash and EUR 1,708,000 was set-off against the new loan. The mortgage cover for the

bond loan has been released in 2021.

Loan

On March 31, 2021, the Group issued a EUR 2,600,000 loan. A group of long-time investors provided a loan in the

amount of EUR 2.6 million with a duration of 36 months. Maturity date is March 31, 2024. RoodMicrotec’s

RoodMicrotec N.V.

ANNUAL REPORT 2021

management participated in the refinancing with EUR 105,000; Mr. O.M. Sallenhag with EUR 60,000, Mr. A.

Ladega with EUR 15,000 and other management team members with EUR 30,000. EUR 892,000 was received in

cash and EUR 1,708,000 was set-off and rolled forward into the new loan. The loan has a 4.75% annual interest,

quarterly payable and the effective interest rate is 7.2%. The loan is unsecured, provided that in the event of a

default the Lenders (other than Management) may require a first ranking right of mortgage on property of

RoodMicrotec GmbH in Nördlingen; and a first ranking right of pledge on other fixed assets. In combination with

the loan, warrants were issued. The Group granted a total number of 7,485,000 non-listed 5-year warrants to the

Lenders (except the Management). Each Warrant shall entitle the relevant Lender or subsequent holder of the

Warrants to subscribe for one ordinary share in the capital of the Company at a subscription price of EUR 0.15, to

be paid in cash upon exercise. Of the Warrants issued, 1/3 shall be issued on a non-conditional basis with a

vesting period of 1 year, 1/3 shall be issued conditional upon the amount of the secured loan that shall be

outstanding on the first anniversary of completion and 1/3 shall be issued conditional upon the amount of the

secured loan that shall be outstanding on the second anniversary of completion. The warrants are considered

equity instruments and therefore included in equity for the consideration received at the issuance date of the

warrants. As no warrants have been granted to Management, they are entitled to 6.75% p/a interest on the loan.

Interest rates

The average interest rates were as follows:

2021

2020

Loan

4.83%

—

Secured bond loan

6.00%

21.Defined benefit obligations

Defined benefit plans

The Group funds defined benefit plans for qualifying employees at RoodMicrotec GmbH. These plans are subject to

German laws and are administered by a separate fund that is legally separated from the Group. The trustees of

these funds are appointed by the Group. The pension benefits are based on the pensionable salary (or in some

cases on the ratio of salary and a social security contribution ceiling) and the worked service years. Since the

1990’s, the pension schemes are closed for new members. At the moment the pension schemes have 52

participants of which 2 are active participants who are still employed by and working in the Group.

The plans expose the Group to actuarial risks such as interest rate risk. The schemes do not expose the Group to

any unusual scheme-specific risk. The defined benefit pension plan comprising defined benefit arrangements and

arrangements congruently matched by insurance policies are partly reinsured. The reserves required for these

obligations are recognized, net of plan assets, in the consolidated statement of financial position.

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were

carried out on December 31, 2021 by Mercer Deutschland GmbH, Frankfurt am Main. The present value of the

defined benefit obligation and the related current service costs and past service costs have been measured using

the projected unit credit method. The charge for the year is included in the employee benefits expense in the

consolidated statement of profit or loss.

ANNUAL REPORT 2021

RoodMicrotec N.V.

The principal assumptions used for the purpose of the actuarial valuations at December 31 are as follows:

2021

2020

Discount rate at December 31

1.06%

0.78%

Salary increase rate

2.00%

2.20%

Pension increase rate

—%

Expected duration in years, active employees

20 years

Expected duration in years, pensioners

10 years

Expected duration in years, mixed

15 years

Mortality

RT Heubeck 2018 G

Disability

RT Heubeck 2018 G

Marriage

RT Heubeck 2018 G

Withdrawal

Mercer specific tables

The movement in the present value of the defined benefit obligations and in the fair value of the plan assets is as

follows:

(x EUR 1,000)

2021

2020

Defined benefit obligations and plan assets

Defined benefit obligations at 1 January

6,547

6,634

Current service costs

Interest costs

Actuarial gains (-) or losses

-136

218

Pension payments

-381

-382

Defined benefit obligations at 31 December

6,083

6,547

Fair value of plan assets at 1 January

1,563

1,614

Interest income on plan assets

Return on plan assets

Pension payments from plan assets

-117

-131

Fair value of plan assets at 31 December

1,530

1,563

Net defined benefit obligations at 31 December

4,553

4,984

Plan assets

Plan assets as per year-end are composed of life insurance policies amounting to EUR 1.5 million (2020:

EUR 1.6 million), which are held at insurance companies.

The fair values of these life insurance policies are determined based on quoted market prices in active markets.

The actual return on plan assets was EUR 73,000 (2020: EUR 64,000). The plan assets do not include any of the

Group’s own financial instruments, nor any property occupied by or other assets used by the Group.

Amounts recognized in the profit or loss related to the Group’s defined benefit plans are as follows:

(x EUR 1,000)

2021

2020

Current service costs

Net interest expenses

Expenses recognized in profit or loss

RoodMicrotec N.V.

ANNUAL REPORT 2021

Amounts recognized in other comprehensive income (OCI) related to the Group’s defined benefit plans are as

follows:

(x EUR 1,000)

2021

2020

Effect of changes in financial assumptions

-172

229

Effect of experience adjustments

-11

Return on plan assets or reimbursement rights excl. interest income

-73

-64

Expenses (income) recognized in OCI

-209

154

A quantitative sensitivity analysis for the discount rate as at December 31, 2021 is as shown below:

Assumption

Discount rate

Sensitivity level

0.5% increase

0.5% decrease

Impact on defined benefit obligation in EUR

-293,000

319,000

The sensitivity analysis is prepared at the end of the reporting period using the same methods as applied in the

defined benefit obligation in the consolidated statement of financial position. The sensitivity analysis may not be

representative of the actual change in the defined benefit obligation.

The Group’s expected pension payments for 2022 are EUR 0.4 million (2021: EUR 0.4 million).

22.Provisions

(x EUR 1,000)

31-12-2021

31-12-2020

Warranty provisions

Other provisions

Total

Provisions for warranties mainly represent the estimated future costs of fulfilling contractual requirements

associated with service or products provided.

The other provisions relate to employee liabilities such as long term incentive plan and defined jubilees and are in

general long-term. Remeasurements are recognized in profit or loss in the period in which they arose.

23.Trade and other payables

(x EUR 1,000)

31-12-2021

31-12-2020

Suppliers and trade creditors

453

936

Other payables

1,371

1,292

Total

1,824

2,228

The carrying amount of the trade and other payables approximates the fair value, due to their short-term nature.

Other payables consist of non-trade payables and accrued expenses.

24.Off-balance sheet commitments

In addition to provisions and liabilities, there were other financial obligations that were not recognized in the

Consolidated Statement of Financial Position which are explained below.

ANNUAL REPORT 2021

RoodMicrotec N.V.

(x EUR 1,000)

2021

< 1 year

1 - 5 year

> 5 year

2020

Property, plant and equipment ordered

578

—

Maintenance

247

215

—

423

Other off-balance sheet commitments

163

159

—

696

Total

988

952

—

1,119

The other commitments pertain contract agreements between RoodMicrotec and suppliers and mainly relates to

customer contracts.

Security

The "Stichting Obligatiehoudersbelangen" in Amsterdam in the Netherlands, representing all holders of the bonds

for the secured bond loan issued in June 2014, received a German mortgage right that is called “Buchgrundschuld”

amounting to EUR 2,500,000. The “Buchgrundschuld” was registered in Augsburg with the land registry number

10988. In 2021 the mortgage right was withdrawn and cancelled.

The Company and the Dutch subsidiary company form a fiscal unity for corporate tax. Each of these companies is

severally liable for corporate tax to be paid by all companies that belong to the fiscal unity.

25.Related parties

The Group has related party relationships with its key management personnel, being represented by the

Company’s Board of Management and Supervisory Board (for more information see the Remuneration Report on

pages 50 - 54).

Remuneration of Board of Management

Fixed

compensation

Short-term

incentive

Long-term

incentive

Other benefits

Total

(x EUR 1,000)

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Mr. O.M. Sallenhag

150

123

—

224

127

Mr. A. Ladega

132

116

—

202

137

Total

282

239

—

426

264

The remuneration of the Board of Management is determined by the Supervisory Board.

At the end of 2021, Mr. O.M. Sallenhag holds 485,000 shares and Mr. A. Ladega holds 226,000 shares in the

capital of the Company.

Remuneration of the Supervisory Board

(x EUR 1,000)

2021

2020

Mr. V.G. Tee

Mr. M.E.T. Verstraeten

171

Mr. R.J.W.M. van der Linden

—2

N/A

Total

The members of the Supervisory board received a fixed compensation during 2021.

There are no loans outstanding to the members of the Supervisory Board, nor have any guarantees been given on

behalf of members of the Supervisory Board.

RoodMicrotec N.V.

ANNUAL REPORT 2021

1 including EUR 5,000 for additional support during the second half of 2020.

2 Mr. van der Linden decided to waive his entitlement to 2021 remuneration in the amount of EUR 6,700 since the COVID-19

pandemic and other restrictions prevented him to actively take on his duties as a member of the Supervisory Board in the year

2021 after his appointment by the Annual General Meeting of Shareholders held on June 10, 2021.

At the end of 2021, the members of the Supervisory Board did not hold any shares or any options on shares in the

capital of the Company.

Other related party transactions

In 2021, the Group has not entered into any other related party transactions except for intercompany charges

between the Company and RoodMicrotec GmbH.

Mr. O.M Sallenhag participates in the loan to the Company for an amount of EUR 60,000 and Mr. Ladega for an

amount of EUR 15,000.

26.Events after balance sheet date

Subsequent to December 31, 2021, the following events occurred:

Final settlement agreement with Robus regarding legal proceedings on perpetual bond issued in 2012.

As announced on September 9, 2021, Robus had initiated legal proceedings against RoodMicrotec GmbH before

the Regional Court of Hamburg, in which it demanded immediate termination and claimed full repayment of the

2012 perpetual bond at its nominal amount of EUR 500k, to be increased with interest payments that Robus

claimed to be entitled to for the years 2017, 2018 and 2021 (total claim EUR 644k). As a full and final settlement

of the 2012 perpetual bond, RoodMicrotec GmbH shall pay Robus a total settlement amount of EUR 400k nominal,

without any interest, in two equal nominal installments of EUR 200k each by February 28, 2022 and June 30, 2022

of which the first EUR 200k has been paid in accordance with the settlement. This final settlement has been

reached before and confirmed by the Regional Court of Hamburg in February 2022.

Legal proceedings initiated by Robus regarding the perpetual bond issued in 2010.

In February 2022 Prime Capital Debt SCS, SICAV-FIS – Robus Recovery Sub-Fund ("Robus") has initiated legal

proceedings before the Regional Court of Frankfurt am Main (Landgericht Frankfurt am Main) against

RoodMicrotec GmbH.

Robus is the holder of the perpetual bond (Genussscheine) of EUR 1,994k that RoodMicrotec GmbH issued in

2010. Robus has initiated legal proceedings against RoodMicrotec GmbH before the Regional Court of Frankfurt, in

which it demands immediate termination and claims full repayment of the 2010 perpetual bond at its nominal

amount of EUR 1,994k, to be increased with interest payments that Robus claims to be entitled to for the years

2017, 2018 and 2021. Total amount claimed in the proceedings amounts to EUR 2,568k to be increased with

11.7% interest for the applicable period.

RoodMicrotec GmbH contests all allegations and claims, and denies that any compensation payments are due on

the perpetual bond or that any grounds for extraordinary termination of the perpetual bond exist. Accordingly,

RoodMicrotec GmbH will ask the court to reject Robus' claim.

ANNUAL REPORT 2021

RoodMicrotec N.V.

C.COMPANY FINANCIAL STATEMENTS

Company Statement of Financial Position

(Before appropriation of result)

(x EUR 1,000)

Notes

31-12-2021

31-12-2020

ASSETS

Property, plant and equipment

Right-of-use assets

Investments in group companies

—

Loans to group companies

2,404

2,123

Non-current assets

2,454

2,198

Loans to group companies

1,461

1,200

Trade and other receivables

Cash and cash equivalents

1,918

636

Current assets

3,421

1,907

Total assets

5,875

4,105

EQUITY AND LIABILITIES

Issued share capital

8,259

8,239

Share premium

20,725

20,709

Revaluation reserve

1,853

1,985

Other reserves

-29,183

-29,318

Unappropriated result

1,435

-265

Shareholders’ equity

3,089

1,350

Loans and borrowings

2,470

—

Lease liabilities

Deferred tax liabilities

Provisions

—

Non-current liabilities

2,545

Loans and borrowings

—

2,489

Current lease liabilities

Trade and other payables

217

194

Current liabilities

241

2,707

Total equity and liabilities

5,875

4,105

The numbers following the various items refer to the notes on pages 99 to 105.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Company Statement of Profit and Loss

(x EUR 1,000)

Notes

2021

2020

Net sales

524

364

Total income

524

364

Other external expenses

-536

-447

Personnel expenses

-286

-190

Depreciation and amortization

-25

-37

Total expenses

-847

-674

Operating profit (loss)

-323

-310

Interest income and similar income

522

446

Interest expenses and similar charges

-186

-163

336

283

Profit (loss) before taxes

-27

Taxes

—

Share in results from participating interests, after taxes

1,420

-238

Net profit (loss)

1,435

-265

The numbers following the various items refer to the notes on pages 99 to 105.

ANNUAL REPORT 2021

RoodMicrotec N.V.

D.NOTES TO THE COMPANY FINANCIAL STATEMENTS

General

These company financial statements and the consolidated financial statements together constitute the statutory

financial statements of RoodMicrotec N.V. (hereafter: ‘the Company’). The financial information of the Company is

included in the consolidated financial statements, as presented on pages 56 to 60.

The Company has its registered address at Zutphenseweg 29 D1, Deventer, the Netherlands, and is registered

with the trade register of the Dutch Chamber of Commerce under number 33251008.

Basis of preparation

These company financial statements have been prepared in accordance with Title 9, Book 2 of the Dutch Civil

Code. For setting the principles for the recognition and measurement of assets and liabilities and determination of

results for its separate financial statements, the Company makes use of the option provided in section 2:362(8) of

the Dutch Civil Code. This means that the principles for the recognition and measurement of assets and liabilities

and determination of the result (hereinafter referred to as principles for recognition and measurement) of the

separate financial statements of the Company are the same as those applied for the consolidated EU-IFRS

financial statements. These principles also include the classification and presentation of financial instruments,

being equity instruments or financial liabilities. In case no other principles are mentioned, refer to the accounting

principles as described in the consolidated financial statements. For an appropriate interpretation of these

statutory financial statements, the separate financial statements should be read in conjunction with the

consolidated financial statements.

The Company financial statements are presented in euros and all values are rounded to the nearest thousand

(EUR ‘000), except when otherwise indicated.

Financial instruments

The Group has exposure to the following risks from its use of financial instruments:

•Credit risk;

•Liquidity risk;

•Market risk.

In the notes to the consolidated financial statements information is included about the Group’s exposure to each of

the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s

management of capital.

These risks, objectives, policies and processes for measuring and managing risk, and the management of capital

apply also to the Company financial statements.

The fair values of most of the financial instruments recognized in the Company statement of financial position,

including accounts receivable, approximately equal their carrying amounts. The fair value of the accounts

receivable from participating interests cannot be determined with sufficient certainty. For further information,

please refer to note 3 ‘Cash and cash equivalents’ and note 6 ‘Trade and other payables’.

Investments in group companies

Group companies are all entities in which the Company has directly or indirectly control. The Company controls an

entity when it is exposed, or has rights, to variable returns from its involvement with the group company and has

the ability to affect those returns through its power over the group company. Group companies are recognized

from the date on which control is obtained by the Company and derecognized from the date that control by the

Company over the group company ceases. Investments in group companies are accounted for in the Company

financial statements according to the equity method, with the principles for the recognition and measurement of

assets and liabilities and determination of results as set out in the notes to the consolidated financial statements.

Investments in subsidiaries with a negative net asset value are valued at nil. This measurement also covers any

receivables provided to the investments in subsidiaries that are, in substance, an extension of the net investment.

In particular, this relates to loans for which settlement is neither planned nor likely to occur in the foreseeable

future. A share in the profits of the investments in subsidiaries in subsequent years will only be recognized if and

to the extent that the cumulative unrecognized share of loss has been absorbed. If the Company fully or partially

guarantees the debts of the relevant investment in subsidiary, or if has the constructive obligation to enable the

investments in subsidiary to pay its debts (for its share therein), then a provision is recognized accordingly to the

amount of the estimated payments by the Company on behalf of the investments in subsidiary.

RoodMicrotec N.V.

ANNUAL REPORT 2021

Share of result of participating interests after taxes

The share in the result of participating interests consists of the share of the Company in the net result after taxes

of these participating interests. Results on transactions involving the transfer of assets and liabilities between the

Company and its participating interests and mutually between participating interests themselves, are eliminated to

the extent that they can be considered as not realized.

The Company makes use of the option to eliminate intra group expected credit losses against the book value of

loans and receivables from the Company to participating interests, instead of elimination against the equity value /

net asset value of the participating interests.

ANNUAL REPORT 2021

RoodMicrotec N.V.

100

1.Investments in group companies

This item relates to the Company’s wholly owned subsidiaries, which are the only two group companies.

Movements in this item were as follows:

(x EUR 1,000)

2021

2020

Balance at 1 January

-6,414

-6,340

Result of group companies

1,420

-238

Remeasurement of defined benefit obligations

209

-154

Remeasurement return on plan assets

—

Revaluation of land and buildings

—

380

Tax implication remeasurement of defined benefit

obligations

-61

Tax implication revaluation of land and buildings

—

-104

-4,846

-6,414

Provision group companies

Provision at 1 January

6,414

6,340

Changes

-1,568

Provision at 31 December

4,846

6,414

Balance at 31 December

—

2.Loans to group companies

This item relates to subordinated loans issued to the subsidiaries. The subordinated loans amounted to

EUR 1,580,000 with an interest rate of 8%, a EUR 2,700,000 loan with an interest rate of 7%, a EUR 5,250,000

loan with an interest rate of 5%, a EUR 725,000 loan with an interest rate of 6.5%, a EUR 475,000 loan with an

interest rate of 6.0%. In 2021 a new loan is provided of EUR 4,188,000 with an interest rate of 5.1%. In addition,

receivables from group companies have been settled for the amount of EUR 4,188,000.

Movements in this item were as follows:

(x EUR 1,000)

2021

2020

Balance at 1 January

9,737

9,779

Loans provided

4,188

475

Redeemed loans

-1,924

-1,315

Other additions

898

798

Settlements

-4,188

—

Balance at 31 December

8,711

9,737

Provision group companies

Provision at 1 January

-6,414

-6,340

Changes

1,568

-74

Provision at 31 December

-4,846

-6,414

Transfer of current portion to current assets

-1,461

-1,200

Total non-current loans to group companies at

31 December

2,404

2,123

RoodMicrotec N.V.

ANNUAL REPORT 2021

101

For the negative equity of the German subsidiary, a provision on the non-current loans to group companies is

recognized. This provision amounts to EUR -4,846,000 as per December 31, 2021 (December 31, 2020:

EUR -6,414,000). The Company is joint and severally liable for debts arising from legal acts of this subsidiary.

3.Cash and cash equivalents

(x EUR 1,000)

31-12-2021

31-12-2020

Cash at bank and on hand

1,918

636

Total

1,918

636

4.Shareholders’ equity

(x EUR 1,000)

Issued

capital

premium

Revaluation

reserve

Other

reserves

Unappro-

priated

result

Total

Balance at 1 January 2020

8,239

20,709

1,789

-29,213

-73

1,451

Issuance of shares

—

Valuation options granted

—

Transactions with equity holders

8,239

20,709

1,789

-29,213

-73

1,451

Appropriation of result

—

-73

—

Net profit (loss)

—

-265

Other comprehensive income:

Remeasurement of defined benefit

obligation

—

-112

—

-112

Revaluation of land and buildings

—

196

—

276

Total comprehensive income for the

year

—

196

-105

-192

-101

Balance at 31 December 2020

8,239

20,709

1,985

-29,318

-265

1,350

Balance at 1 January 2021

8,239

20,709

1,985

-29,318

-265

1,350

Issuance of shares

—

Issuance of stock warrants

—

120

—

120

Share options exercised

—

Transactions with equity holders

8,259

20,725

1,985

-29,198

-265

1,506

Appropriation of result

—

-265

265

—

Net profit (loss)

—

1,435

Other comprehensive income:

Remeasurement of defined benefit

obligation

—

148

—

148

Revaluation of land and buildings

—

-132

132

—

Total comprehensive income for the

year

—

-132

1,700

1,583

Balance at 31 December 2021

8,259

20,725

1,853

-29,183

1,435

3,089

Revaluation reserve

A revaluation reserve has been formed for the revaluation of land and buildings of the German subsidiary

RoodMicrotec GmbH. This reserve is regarded a legal reserve pursuant to article 2:373 of the Dutch Civil Code

and, consequently, is not available for dividend distribution to equity holders.

For a description of the rules of result appropriation, reference is made to note 17 ‘Share capital’ of the

consolidated financial statements.

ANNUAL REPORT 2021

RoodMicrotec N.V.

102

5.Loans and borrowings

This note provides information on the contractual terms of the Company’s interest-bearing loans and borrowings.

(x EUR 1,000)

31-12-2021

31-12-2020

Loan

2,470

—

Secured bond loan

—

2,489

Total loans and borrowings

2,470

2,489

Transfer of current portion to current liabilities

—

-2,489

Total non-current loans and borrowings

2,470

—

Debt repayment schedule as per December 31, 2021

(x EUR 1,000)

Total

Current

liabilities

Non-

current

liabilities

1 to 2

years

2 to 5

years

than

5 years

Loan

2,600

—

2,600

—

2,600

—

Total interest-bearing loans and

borrowings

2,600

—

2,600

—

2,600

—

Interest expenses repayment schedule as per December 31, 2021

(x EUR 1,000)

Total

Current

liabilities

Non-

current

liabilities

1 to 2

years

2 to 5

years

than

5 years

Loan

283

126

157

126

—

Total

283

126

157

126

—

For further details, reference is made to note 20 ‘Loans and borrowings’ of the consolidated financial statements.

6.Trade and other payables

(x EUR 1,000)

31-12-2021

31-12-2020

Suppliers and trade creditors

Other payables

144

110

Total

217

194

The carrying amount of the trade and other payables approximates the fair value, due to their short-term nature.

Other payables consist of non-trade payables and accrued expenses.

7.Net sales

Net sales comprises charges to group companies with regard to management fees and corporate overhead.

8.Other external expenses

(x EUR 1,000)

2021

2020

Housing and equipment costs

Selling and administrative expenses

519

423

Total

536

447

RoodMicrotec N.V.

ANNUAL REPORT 2021

103

9.Personnel expenses

(x EUR 1,000)

2021

2020

Salaries

265

169

Social securities

Total

286

190

Remuneration of and share ownership by the Board of Management and Supervisory Board

Personnel expenses included an expense of approximately EUR 74,000 (2020: nil) for the Board of Management’s

bonus scheme.

The information as referred to in section 383, subsection 1, of Book 2 of the Dutch Civil Code is disclosed in note

25 ‘Related parties’ of the consolidated financial statements.

10.Depreciation and amortization

(x EUR 1,000)

2021

2020

Right-of-use assets

Other fixed assets

Total

11.Financial income and expenses

(x EUR 1,000)

2021

2020

Interest income:

–intercompany loan

522

446

Interest expenses:

–loan

-135

—

–bond loan

-49

-163

–other financial expenses

-2

—

Total

336

283

The interest expenses include amortization costs amounting to EUR 50,000 (2020: EUR 13,000), which relate to

discount and issuance cost of loans provided.

12.Income taxes

(x EUR 1,000)

2021

2020

Current tax expense (income):

Current year

-4

Deferred tax expense (income):

Recognition of previously unrecognized tax losses

-4

Origination and reversal of temporary differences

-2

—

Tax expense (income) recognized in the company statement of

Profit and Loss

-2

—

ANNUAL REPORT 2021

RoodMicrotec N.V.

104

With effect from 2022, losses in the Netherlands can be offset for an unlimited period. At the same time as this

change, tax loss carry-forwards are maximized at EUR 1.0 million plus 50% of the taxable amount over and above

this EUR 1.0 million. At year-end 2021 and 2020, the available tax losses were not recognized. These

unrecognized tax losses are in total approximately EUR 1.0 million as per December 31, 2021 (2020: EUR 1.0

million). No deferred tax assets have been recognized for tax losses in the Netherlands.

For further details regarding the deferred tax liabilities, reference is made to note 12 ‘Deferred tax balances’ of the

consolidated financial statements.

13.Share of result of participating interests after taxes

(x EUR 1,000)

2021

2020

Share of result of participating interests after taxes:

–RoodMicrotec GmbH

1,420

-238

–RoodMicrotec International B.V. (dormant subsidiary)

—

Total

1,420

-238

14.Employees

The Company has an average of 2 employees in 2021 (2020: 3), all of whom are based in the Netherlands.

15.Off-balance sheet assets and liabilities

Joint and several liability and guarantees

Pursuant to article 264 (3) of the German Commercial Code, the Company has issued declarations of joint and

several liability for debts arising from legal acts of RoodMicrotec GmbH amounting to EUR 6.3 million

(2020: EUR 8.2 million).

Fiscal unity

The Company and the Dutch subsidiary company form a fiscal unity for corporate tax. Each of these companies is

severally liable for corporate tax to be paid by all companies that belong to the fiscal unity.

16.Events after balance sheet date

For information on the events after balance sheet date, reference is made to note 26 ‘Events after balance sheet

date’ of the consolidated financial statements.

Deventer, April 20, 2022

Board of ManagementSupervisory Board

O.M. Sallenhag, CEOV.G. Tee, Chairman

A. Ladega, CFOM.E.T. Verstraeten

R.J.W.M. van der Linden

RoodMicrotec N.V.

ANNUAL REPORT 2021

105

OTHER INFORMATION

PROFIT APPROPRIATION

Article 27 of the Company’s Articles of Association includes the following provisions for profit appropriation:

1.the Company may pay dividends and make other distributions only to the extent that its equity exceeds the

amount of the paid-up and called-up portion of the share capital plus the reserves which must be maintained

by law and under these articles;

2.subject to the prior approval of the Supervisory Board, the Board of Management is authorized to add any

profit in whole or in part to the reserves;

3.any profit remaining after reservation referred to in the preceding paragraph will be at the disposal of the

annual general meeting of shareholders;

4.to the extent that the general meeting of shareholders does not resolve to distribute the profit for any financial

year, such profit will be added to the reserves.

ANNUAL REPORT 2021

RoodMicrotec N.V.

106

To: the General Meeting of Shareholders and the Supervisory Board of RoodMicrotec N.V.

Report on the audit of the financial statements 2021 included in the annual report

Our opinion

In our opinion:

–the accompanying consolidated financial statements give a true and fair view of the

financial position of RoodMicrotec N.V. as at 31 December 2021 and of its result and its

cash flows for the year then ended, in accordance with International Financial Reporting

Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the

Dutch Civil Code.

–the accompanying company financial statements give a true and fair view of the financial

position of RoodMicrotec N.V. as at 31 December 2021 and of its result for the year then

ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

What we have audited

We have audited the financial statements 2021 of RoodMicrotec N.V. (the Company) based in

Deventer. The financial statements include the consolidated financial statements and the

company financial statements.

The consolidated financial statements comprise:

1.the consolidated statement of financial position as at 31 December 2021;

2.the following consolidated statements for 2021: the statement of profit or loss,

comprehensive income and changes in equity and the cash flow statement; and

3.the notes comprising a summary of the significant accounting policies and other

explanatory information.

The company financial statements comprise:

1.the company statement of financial position as 31 December 2021;

2.the company statement of profit and loss for 2021; and

3.the notes comprising a summary of the accounting policies and other explanatory

information.

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Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on

Auditing. Our responsibilities under those standards are further described in the ‘Our

responsibilities for the audit of the financial statements’ section of our report.

We are independent of RoodMicrotec N.V. in accordance with the ‘Verordening inzake de

onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, ‘Code of Ethics for

Professional Accountants, a regulation with respect to independence’) and other relevant

independence regulations in the Netherlands. Furthermore, we have complied with the

‘Verordening gedrags- en beroepsregels accountants’ (VGBA, ‘Dutch Code of Ethics’).

Our audit procedures were determined in the context of our audit of the financial statements as

a whole. Our observations in respect of going concern, fraud and non-compliance with laws

and regulations, climate and the key audit matters should be viewed in that context and not as

separate opinions or conclusions.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Audit approach

Summary

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Materiality

Based on our professional judgement we determined the materiality for the financial statements

as a whole at EUR 120,000 (2020: EUR 100,000). The materiality is determined with reference

to net sales resulting in a percentage of 0.84% (2020: 0.87%). We consider net sales as the

most appropriate benchmark because key stakeholders are primarily focused on net sales and

less on the result before tax. Materiality increased compared to last year reflecting the higher

net sales in 2021. We have also taken into account misstatements and/or possible

misstatements that in our opinion are material for the users of the financial statements for

qualitative reasons.

We agreed with the Supervisory Board that misstatements identified during our audit in excess

of EUR 6,000 would be reported to them, as well as smaller misstatements that in our view

must be reported on qualitative grounds.

Scope of the group audit

RoodMicrotec N.V. is at the head of a group of components. The financial information of this

group is included in the financial statements of RoodMicrotec N.V.

Our group audit mainly focused on RoodMicrotec GmbH (Germany), as this is the most

significant component within the group. Substantially all of the company business activities take

place in this German component. We have made use of the work of KPMG Germany to

perform the audit of the complete reporting package of RoodMicrotec GmbH. Additionally, we

performed audit procedures ourselves for the significant balances recorded in RoodMicrotec

N.V., the parent company.

We provided detailed instructions to KPMG Germany, covering the significant audit areas,

including the relevant risks of material misstatement, and the information required to be

reported back to the group audit team.

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We scheduled (virtual) site visit meetings with the local component auditor and local component

management in Germany to review the component auditor documentation and meet with local

management. In view of restrictions due to the COVID-19 pandemic, travelling was not

practicable in the current environment. As a result, we have requested our component auditor

to provide us with remote access to audit workpapers to perform these evaluations. In addition,

due to the inability to arrange in-person meetings with our component auditor and local

management, we have increased the use of alternative methods of communication with them,

including through written instructions, exchange of emails and virtual meetings.

Virtual meetings were held with KPMG Germany in which we discussed matters such as audit

approach, audit findings and observations reported to the group audit team. We have taken

notice of their findings with respect to RoodMicrotec GmbH and we have discussed these

together with KPMG Germany with local management.

As the remaining component is a dormant entity our procedures on this component were very

limited.

By performing the procedures mentioned above at group components, together with additional

procedures at group level, we have been able to obtain sufficient and appropriate audit

evidence about the group’s financial information to provide an opinion about the financial

statements.

The audit coverage as stated in the section summary can be further specified as follows:

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Audit response to going concern – no significant going concern risks identified

The Board of Management has performed its going concern assessment and has not identified

any significant going concern risks. To assess management’s assessment, we have performed,

among other things, the following procedures:

–we considered whether the Board of Management’s assessment of the going concern

risks includes all relevant information of which we are aware as a result of our audit;

–we inspected the financing agreement for terms or conditions that could lead to significant

going concern risks;

–we analyzed the operating results forecast and the related cash flows compared to the

previous financial year, developments in the business sector and any information of which

we are aware as a result of our audit;

–we analyzed the company’s financial position as at year-end and compared it to the

previous financial year in terms of indicators that could identify significant going concern

risks.

The outcome of our risk assessment procedures did not give reason to perform additional audit

procedures on management’s going concern assessment.

Audit response to the risk of fraud and non-compliance with laws and regulations

In chapter ‘Corporate social responsibility’ of the report of the Board of Management, the Board

of Management describes its procedures in respect of the risk of fraud and non-compliance

with laws and regulations.

As part of our audit, we have gained insights into RoodMicrotec N.V. and its business

environment, and evaluated the design and implementation of the Company’s risk assessment

in relation to fraud and non-compliance. Our procedures included, among other things,

assessing the Company’s code of conduct, whistle-blower policy and other compliance policies.

Furthermore, we performed relevant inquiries with the Board of Management and the

Supervisory Board. As part of our audit procedures, we:

–assessed other positions held by Board of Management members and Supervisory Board

members and paid special attention to procedures and governance in view of possible

conflicts of interest;

–evaluated correspondence with supervisory authorities and regulators as well as legal

confirmation letters.

In addition, we performed procedures to obtain an understanding of the legal and regulatory

frameworks that are applicable to the Company and we have not identified areas which most

likely could have a material effect on the financial statements.

We, together with our forensics specialists, evaluated the fraud and non-compliance risk factors

to consider whether those factors indicate a risk of material misstatement in the financial

statements.

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Based on the above and on the auditing standards, we identified the following fraud risks that

are relevant to our audit, including the relevant presumed risks laid down in the auditing

standards, and responded as follows:

–Management override of controls (a presumed risk)

Risk:

–Management is in a unique position to manipulate accounting records and prepare

fraudulent financial statements by overriding controls that otherwise appear to be

operating effectively.

Responses:

–We evaluated the design and the implementation of internal controls that mitigate fraud

risks with respect to journal entries.

–We performed data analyses on high-risk journal entries and evaluated key estimates

and judgements for bias by the Company’s management, such as estimates relating to

impairment testing of goodwill, the valuation of deferred tax assets and valuation of the

defined benefit obligation, including retrospective reviews of prior year's estimates.

Where we identified instances of unexpected journal entries or other risks through our

data analytics, we performed additional audit procedures to address each identified risk.

These procedures also included testing of transactions back to source information.

–We incorporated elements of unpredictability in our audit, including revising our

selection criteria in our data analyses of high-risk journal entries, and performed

additional test of detail audit procedures on sales transactions as elaborated below.

–Revenue recognition (a presumed risk)

Risk:

–Overstating of revenue by fraudulent recognition of sales before the end of the reporting

period is an inherent risk of RoodMicrotec N.V.

Response:

–In addition to the procedures already mentioned above, we evaluated the design and

the implementation of internal controls that mitigate fraud risks with respect to revenue

recognition.

–To assess whether revenue was recognized in the appropriate period, for selected sales

transactions recognized before year-end we inspected agreements with the customers

and shipping documents.

–Further, we inspected credit notes subsequent year-end to assess whether revenue was

recognized in the correct reporting period.

–We also incorporated an element of unpredictability by requesting external

confirmations from customer for selected transactions in the period before year-end.

Our procedures to address the identified risks of fraud did not result in a key audit matter.

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We communicated our risk assessment, audit responses and results to the Board of

Management and the Supervisory Board.

Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-

compliance that are considered material for our audit.

Audit response to climate-related risks

The Board of Management is responsible for preparing the financial statements in accordance

with the applicable financial reporting framework, including considering whether the implications

from climate-related risks and commitments have been appropriately accounted for and

disclosed. The Board of Management has performed its initial analysis of the impact of climate-

related risks on RoodMicrotec N.V.’s business and operations going forward. In the ‘Climate-

related risks’ paragraph, included in the ‘Risk and risk management’ section, the Board of

Management concluded that currently no material climate risks at the short term have been

identified through its initial climate risk assessment or regular risk assessments.

The evaluation of the effectiveness of RoodMicrotec N.V.’s strategy against internal or external

goals set is not in scope of our audit of the financial statements. As part of our audit we

consider potential effects of climate-related risks on the accounts and disclosures, including

estimates and judgements in the current year’s financial statements to determine whether the

financial statements are free from material misstatements. This includes discussion with the

Board of Management and the Supervisory Board of RoodMicrotec N.V.’s initial analysis.

Our key audit matters

Key audit matters are those matters that, in our professional judgement, were of most

significance in our audit of the financial statements. We have communicated the key audit

matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of

all matters discussed.

Compared to last year the key audit matter with respect to the liquidity risk related to COVID-19

is not included, as this specifically relates to the uncertainties at the time of preparing the 2020

financial statements.

Description

RoodMicrotec N.V. carries a significant amount of goodwill in the balance sheet of EUR 1.7

million (2020: EUR 1.7 million). In accordance with EU-IFRS, RoodMicrotec N.V. is required to

test the amount of goodwill for impairment at least annually. The impairment test was significant

to our audit due to the complexity of the assessment process and judgments and assumptions

involved which are affected by expected future market and economic developments as well as

the significant effect it can have on the financial statements.

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Our response

We evaluated the design and implementation of controls with respect to RoodMicrotec N.V.'s

impairment testing process and noted that we need to apply a substantive audit approach on

this item.

We challenged the cash flow projection included in the annual goodwill impairment test. Our

audit procedures included, among others, the involvement of a valuation specialist to assist us

in evaluating the assumptions, in particular the pre-tax discount rate, and the valuation model

(including probability weighted cash flow scenario’s) used by RoodMicrotec N.V. We

furthermore assessed the appropriateness of other data used, by comparing them to external

and historical data, such as external market growth expectations and by analysing sensitivities

in RoodMicrotec N.V.'s valuation model. In addition, we inspected and challenged the

assumptions (e.g. growth rates, future costs and discount and terminal growth rates) used. We

specifically focused on the sensitivity in the available headroom. By doing so, we assessed

management's assessment whether a reasonably possible change in key assumptions could

cause the carrying amount to exceed its recoverable amount. Furthermore, we assessed the

historical accuracy of management's estimates. Finally, we assessed the adequacy of the

disclosure (Note 11) to the consolidated financial statements.

Our observation

We consider management's key assumptions and estimates to be reasonable and the

disclosures (Note 11) to the consolidated financial statements are in compliance with the

requirements of EU-IFRS.

Description

At 31 December 2021, an amount of EUR 2.3 million deferred tax assets is recognized (2020:

EUR 1.9 million). These deferred tax assets relate to the cumulative net operating losses of

RoodMicrotec GmbH of EUR 20.2 million. The availability of future taxable income in the

foreseeable future is relevant for the recognition and measurement of deferred tax assets from

net operating losses. The Company uses a valuation model to determine the amount of

deferred tax assets to be recognized. The assessment of future taxable income and the

recognition of deferred tax assets is significant to our audit as it requires significant judgement

and can have a significant effect on the financial statements.

Our response

We evaluated the internal controls that ensures an appropriate valuation of deferred tax assets

and noted that we need to apply a substantive audit approach on this item.

In relation to the deferred tax assets our audit procedures included evaluating the Company’s

assumptions and estimates in relation to the likelihood of generating sufficient future taxable

profits.

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We tested the consistency of the assumptions of the applied model with the valuation model

the Company used for the annual goodwill impairment test where we involved a KPMG

valuation specialist. We reconciled the input used in the valuation model with the budget which

has been approved by the Supervisory Board and we assessed the assumptions such as sales

growth and profit margins included in the budget and evaluated historical accuracy of

management’s estimates.

When auditing the deferred tax assets we used amongst others the knowledge and experience

of by involving a tax specialist of KPMG Germany to assess the amount of available net

operating losses to be carried forward and whether tax calculations are made in accordance

with the most recent guidance issued by local tax authorities.

Finally, we assessed the adequacy of the disclosure (Note 12) to the consolidated financial

statements.

Our observation

Overall we assess that the assumptions applied as balanced. The group’s disclosures related

to the deferred tax assets as set forth in Note 12 to the 2021 consolidated financial statements

are in compliance with the requirements of EU-IFRS.

Report on the other information included in the annual report

In addition to the financial statements and our auditor’s report thereon, the annual report

contains other information.

Based on the following procedures performed, we conclude that the other information:

–is consistent with the financial statements and does not contain material misstatements;

and

–contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the

management report and other information.

We have read the other information. Based on our knowledge and understanding obtained

through our audit of the financial statements or otherwise, we have considered whether the

other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the

Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less

than the scope of those performed in our audit of the financial statements.

The Board of Management is responsible for the preparation of the other information, including

the information as required by Part 9 of Book 2 of the Dutch Civil Code.

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Report on other legal and regulatory requirements and ESEF

Engagement

We were engaged by the General Meeting of Shareholders as auditor of RoodMicrotec N.V. on

25 November 2019, as of the audit for the year 2019 and have operated as statutory auditor

ever since that financial year.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU

Regulation on specific requirements regarding statutory audits of public-interest entities.

European Single Electronic Format (ESEF)

RoodMicrotec N.V. has prepared its annual report in ESEF. The requirements for this format are

set out in the Commission Delegated Regulation (EU) 2019/815 with regard to regulatory

technical standards on the specification of a single electronic reporting format (these

requirements are hereinafter referred to as: the RTS on ESEF).

In our opinion, the annual report prepared in the XHTML format, including the partially tagged

consolidated financial statements as included in the reporting package by RoodMicrotec N.V.,

has been prepared in all material respects in accordance with the RTS on ESEF.

Management is responsible for preparing the annual report including the financial statements in

accordance with the RTS on ESEF, whereby management combines the various components

into a single reporting package. Our responsibility is to obtain reasonable assurance for our

opinion whether the annual report in this reporting package, is in accordance with the RTS on

ESEF.

Our procedures taking into consideration Alert 43 of NBA (the Netherlands Institute of

Chartered Accountants), included amongst others:

–obtaining an understanding of the entity's financial reporting process, including the

preparation of the reporting package;

–obtaining the reporting package and performing validations to determine whether the

reporting package containing the Inline XBRL instance document and the XBRL

extension taxonomy files have been prepared in accordance with the technical

specifications as included in the RTS on ESEF;

–examining the information related to the consolidated financial statements in the

reporting package to determine whether all required taggings have been applied and

whether these are in accordance with the RTS on ESEF.

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Description of responsibilities regarding the financial statements

Responsibilities of the Board of Management and the Supervisory Board for the financial

statements

The Board of Management is responsible for the preparation and fair presentation of the

financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.

Furthermore, the Board of Management is responsible for such internal control as management

determines is necessary to enable the preparation of the financial statements that are free from

material misstatement, whether due to fraud or error. In that respect the Board of Management,

under supervision of the Supervisory Board, is responsible for the prevention and detection of

fraud and non-compliance with laws and regulations, including determining measures to

resolve the consequences of it and to prevent recurrence.

As part of the preparation of the financial statements, the Board of Management is responsible

for assessing the Company’s ability to continue as a going concern. Based on the financial

reporting frameworks mentioned, the Board of Management should prepare the financial

statements using the going concern basis of accounting unless the Board of Management

either intends to liquidate the Company or to cease operations, or has no realistic alternative

but to do so. The Board of Management should disclose events and circumstances that may

cast significant doubt on the company’s ability to continue as a going concern in the financial

statements.

The Supervisory Board is responsible for overseeing the company’s financial reporting process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain

sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means

we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users

taken on the basis of these financial statements. The materiality affects the nature, timing and

extent of our audit procedures and the evaluation of the effect of identified misstatements on

our opinion.

A further description of our responsibilities for the audit of the financial statements is located at

the website of de ‘Koninklijke Nederlandse Beroepsorganisatie van Accountants’ (NBA, Royal

Netherlands Institute of Chartered Accountants) at http://www.nba.nl/ENG_OOB_01. This

description forms part of our auditor’s report.

Eindhoven, 20 April 2022

KPMG Accountants N.V.

M.J.A Verhoeven RA

RoodMicrotec N.V.

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GROUP STRUCTURE

ADDRESSES AND PERSONAL DETAILS

RoodMicrotec N.V.

Board of Management

Zutphenseweg 29 D1

Martin Sallenhag, CEO

7418 AH Deventer, The Netherlands

Arvid Ladega, CFO

Telephone: +31 (0) 570 745623

Email: investor-relations@roodmicrotec.com

Website: www.roodmicrotec.com

RoodMicrotec GmbH

Oettinger Strasse 6

Motorstrasse 49

86720 Nördlingen, Germany

70499 Stuttgart, Germany

Telephone: +49 (0) 9081 804-0

Telephone: +49 (0) 711 86709-0

RoodMicrotec International B.V

‘Rembrandt’, Dokter van Deenweg 58

8025 BC Zwolle, The Netherlands

Telephone: +31 (0) 570 745623

RoodMicrotec N.V.

Zutphenseweg 29 D1

7418 AH Deventer, The Netherlands

Telephone: +31 570 745623

Email: investor-relations@roodmicrotec.com

Website: www.roodmicrotec.com

Chamber of Commerce number 33251008103

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ABBREVIATIONS USED

AFM

Netherlands Authority for the Financial Markets

AGM

Annual General Meeting of Shareholders

Artificial Intelligence

ASIC

Application Specific Integrated Circuit

AQG

Automotive Power Module Qualification Guideline

ATE

Automatic Test Equipment

BEV

Battery Electric Vehicles (pure electric, no hybrid)

CAGR

Compound Annual Growth Rate

COTS

Components Of The Shelf

COVID-19

Corona Virus Disease 2019

DPA

Destructive Physical Analysis

EBIT

Earnings Before Interest and Taxes

EBITDA

Earnings Before Interests, Taxes, Depreciation and Amortization

EBT

Earnings Before Taxes

ECSEL

Electronic Components and Systems for European Leadership

EML

Emitting Layer

ESG

Environmental Social and Governance

FTE

Full Time Employee

GaN

Gallium Nitride

HEMT

High Electron Mobility Transistor

HiRel

High Reliability

Integrated Circuit

IDM

Integrated Device Manufacturer

IFRS

International Financial Reporting Standards as adopted by the European Union

IoT

Internet of Things

IoMT

Internet of Medical Things

IEA

International Energy Agency

IMF

International Monetary Fund

Intellectual Property

LED

Light Emitting Diode

MEMS

Micro-Electro-Mechanical System

OCI

Other Comprehensive Income

OECD

Organization for Economic Co-operation and Development

OEM

Original Equipment Manufacturer

PCB

Printed circuit board

PHEV

Plug-In Hybrid Electric Vehicle

PIC

Photonic Integrated Circuit

Radio frequency

RFID

Radio Frequency IDentification

SCM

Supply Chain Management

Silicon

SIA

Semiconductor Industry Association

V2I

Vehicle-to-Infrastructure

V2V

Vehicle-to-Vehicle

VCSEL

Vertical-Cavity Surface-Emitting Laser diodes

Virtual Reality

WACC

Weighted Average Cost of Capital

Wft

Financial Supervision Act

WLCSP

Wafer Level Chip Scale Package

WSTS

World Semiconductor Trade Statistics

Abbreviation

Description

RoodMicrotec N.V.

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