rood-2022-12-31-en

ROODMICROTEC OVERVIEW

MESSAGE FROM THE CEO


Once again, we managed to exceed the outlook and deliver both a higher total income as well as a higher profit. In the first and second quarter of 2022, we generated a total income that was similar to the fourth quarter of 2021, which was a very good start of a year as due to the cyclic nature of business in general and especially for our semiconductor business, the first quarter usually has a lower outcome than the fourth. In the third and fourth quarter of 2022, we saw a steady increase in total income making the full year the best in over 20 years. The profit before tax for the year as well as the overall liquidity put us in a good position for future investments. This will enable us to focus on growing the business with new customer engagements.

Throughout the year, the Test Operations department continued to deliver outstanding results. The revenue

increased from EUR 7.9 million in 2021 to EUR 10.0 million in 2022, which is a growth of 26%. Our long term

customers are increasing their demand and we are able to support them with additional capacity. New customer

projects, such as EnSilica with a mixed signal automotive ASIC that provides key differentiating features in the

chassis control of the vehicle, have been ramped to production. In 2022, we have added both manpower as well

as new machines to support the growing business. We have increased both capacity as well as capability with a

new test system (Advantest V93k), a new pick-and-place handler (Multitest MT9510) and a Tape & Reel machine.

The Supply Chain Management unit is growing thanks to long-term projects. The revenue increased from EUR 3.4

million in 2021 to EUR 3.5 million in 2022, a growth of 5% year-over-year. This is also driving revenue in the

other units, especially in the test operations unit. Because of the geopolitical situation, we still see a tendency that

customers delay the start of new projects. However, this has improved as components are now available again

more quickly.

The long-term relationship with Rhode & Schwarz has been extended with new projects under development. This

is driving the technology roadmap of the Company and will enable us to offer more advanced solutions to the

market. A very interesting new project has been started with Novelda on the qualification, test and supply of a

new generation of UWB devices.

In the Qualification & Failure Analysis department we have seen a big increase in request for counterfeit analysis.

Due to the shortage of components it is becoming more important to analyze the used components before going

into mass production. RoodMicrotec is the first and only company in Germany to offer the counterfeit electronic

parts standard SAE AS6081 as an accredited method according to DIN EN ISO/IEC 17025:2018. This standard

establishes requirements and practices to mitigate the risk of buying, receiving and selling fraudulent/counterfeit

parts therefore giving the customers confidence in their own supply chain.

During 2022, we reached an agreement with Robus regarding the perpetual bonds issued in 2012 and early 2023

we reached an agreement regarding the perpetual bond issued in 2010. Both of these settlements are confirmed

by the respective courts and we are pleased to have solved this so we can move forward with our core businesses.

After 13 years of service to the Company, our chairman Vic Tee retired. It has been a great pleasure for all of us

and especially for me to get the opportunity to work with him in both hard and good times. With his vast

experience in the business he has been a great support to the whole Company and I wish him all the best for his

retirement.

As a final remark, I would again like to express my thanks to the three main stakeholders in RoodMicrotec; the

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

We are well positioned for the future and are looking forward to the coming years with pride in what we achieved

during the last couple of years.

Deventer, April 19, 2023

Martin Sallenhag, CEO


RoodMicrotec N.V.	ANNUAL REPORT 2022

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 2022	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.

A Supply Chain Management (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 2022

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.

$Industrial_iStock.jpg$


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 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 2022	RoodMicrotec N.V.

ROODMICROTEC PERFORMANCE INDICATORS

* including application of IFRS 16 as of 2019


RoodMicrotec N.V.	ANNUAL REPORT 2022

KEY FIGURES + FIVE-YEAR SUMMARY

(x EUR 1,000 unless stated otherwise)


	2022	2021	2020	20191	2018

Results & Cash
Total income	16,548	14,532	11,874	13,217	13,425
EBITDA	3,898	2,786	1,345	1,539	1,383
EBITDA as % of total income	23.6%	19.2%	11.3%	11.6%	10.3%
EBIT (operating result)	2,451	1,227	-199	123	365
EBIT as % of total income	14.8%	8.4%	-1.7%	0.9%	2.7%
Profit (loss) before tax	2,271	1,038	-369	-87	124
PBT as % of total income	13.7%	7.1%	-3.1%	-0.7%	0.9%
Net result	2,380	1,435	-265	-73	125
Net cash position (at year-end)	3,682	2,558	1,351	1,002	1,738
Net cash flow from operating activities	3,553	2,049	1,517	1,156	563

Capital, Debt & Liquidity Ratios (at year-end)
Total assets	17,197	15,014	14,337	14,294	13,606
Equity	7,850	5,583	3,844	3,945	5,209
Net debt2	-805	374	1,870	2,431	915
Invested capital (net debt + equity)	7,045	5,957	5,714	6,376	6,124
Gearing ratio (net debt / invested capital)	-11%	6%	33%	38%	15%
Solvency (equity / total assets)	46%	37%	27%	28%	38%
Debt ratio (net debt / EBITDA)	-0.2	0.1	1.4	1.6	0.7
Net working capital (working capital - net cash position)	211	317	-55	503	422
Net working capital ratio (net working capital / total income)	1.3%	2.2%	-0.5%	3.8%	3.1%
ROCE (EBIT / average invested capital)	37.7%	21.0%	-3.3%	2.0%	5.5%

Assets (at year-end)
Tangible and intangible fixed assets	8,765	8,295	9,177	9,404	7,682
Investments in (in)tangible fixed assets	1,743	681	866	1,895	576
Depreciation of (in)tangible fixed assets	1,447	1,559	1,544	1,416	1,018

Data per share (x EUR 1)
Equity	0.105	0.074	0.051	0.053	0.072
Operating result	0.033	0.016	-0.003	0.002	0.005
Net cash flow from operating activities	0.047	0.027	0.020	0.015	0.008
Net result	0.032	0.019	-0.004	-0.001	0.002
Share price: year-end	0.205	0.201	0.183	0.247	0.250
Share price: highest in the year	0.215	0.267	0.267	0.284	0.390
Share price: lowest in the year	0.171	0.176	0.107	0.202	0.234

Other information
Number of issued shares at year-end (in millions)	75.1	75.1	74.9	74.9	72.8
Average number of employees (FTE)	94	89	86	96	94
Total income / average FTE	176	163	138	138	143
Market capitalization (in EUR millions)	15.4	15.1	13.7	18.5	18.2


ANNUAL REPORT 2022	RoodMicrotec N.V.

1 adoption of IFRS 16 Leases from 2019.

2 net debt includes lease liabilities, see page 76 ‘capital risk management’ for detailed calculation.

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, 2022 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):


Name	% of shares	Capital interest	Notified on
Blikkenburg B.V.	12.35%	Actual / potential3	February 1, 2018
J.H. Langendoen	10.12%	Actual	April 28, 2022
P.C. van Leeuwen	5.53%	Actual	April 12, 2018
Sitimo Ltd.	5.26%	Actual	August 2, 2018
M.H.B. Kok	3.87%	Potential4	March 31, 2022

Changes in the number of shares

As at December 31, 2022, 75,076,267 ordinary shares are issued (2021: 75,076,267). The Company holds 4,100

ordinary shares (2021: 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 2022 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 we pursue 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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

3 Notified interest consists of shares regards 10.13% and warrants regards 2.22%

4 Notified interest consists of warrants

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

The minutes of the Annual General Meeting of Shareholders, held virtually by webcast on June 9, 2022, may be

inspected on the Company’s corporate website.

Financial calendar 2023


April 20, 2023	Conference call for media, analysts and shareholders
April 25, 2023	Publication of agenda and invitation for the Annual General Meeting of Shareholders
June 6, 2023	Annual General Meeting of Shareholders
July 20, 2023	Publication interim report 2023
July 20, 2023	Conference call for media, analysts and shareholders
October 19, 2023	Trading update quarter 3-2023


ANNUAL REPORT 2022	RoodMicrotec N.V.

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 and held a senior financial

position at Wasco Coatings Europe, subsidiary to its Malaysian listed holder

•Holding a bachelor’s degree in economics


RoodMicrotec N.V.	ANNUAL REPORT 2022

MARKET & TRENDS

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

Statistics), Future Horizons, SIA (Semiconductor Industry Association), TechInsighs (former IC Insights),

Semiconductor Intelligence and similar institutes, on conference presentations as well as printed articles or online

articles.

For 2022 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 4.4% – see IMF publication

January 20225.

Despite the geopolitical uncertainties, the shortage of semiconductor components, long delivery times, the energy

crisis, the inflation and the slow-down of the worldwide semiconductor sales in the 2nd half of 2022, the total

growth of the semiconductor market 2022 was 3.3%, see SIA-press release February 3, 20236. RoodMicrotec total

income was EUR 16.5 million, 14% higher than in 2021 fitting well with the European sales increase of 12.8%;

92% of the Company’s total income is made in European countries.

For 2023, the semiconductor market forecasts given by various analyst firms show negative growth in a range

between -3% and -22%, published by Semiconductor Intelligence7 and other public available articles. This is

supported by the International Monetary Fund (IMF) projecting a global economic growth of 2.9% (3.4% in 2022)

and the global inflation is expected to fall from 8.8% in 2022 to 6.6% in 2023 - see IMF publication

January 20238.

According the SIA9, Semiconductor Intelligence (see footnote 7) it is expected that the semiconductor market will

start recovering during the year 2023 and positive growth is expected back in 2024. The global semiconductor

market’s long term outlook is strong. The automotive industry is estimated to be responsible for 20% and the

wireless communication industry for 25% of the chip demand by 2030.

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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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

6 https://www.semiconductors.org/global-semiconductor-sales-increase-3-2-in-2022-despite-second-half-slowdown/

7 https://www.semiconductorintelligence.com/bleak-year-for-semiconductors/

8 https://www.imf.org/en/Publications/WEO/Issues/2023/01/31/world-economic-outlook-update-january-2023

9 https://www.semiconductors.org/despite-short-term-cyclical-downturn-global-semiconductor-markets-long-term-outlook-is-

strong/

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 in the future.

Automotive

RoodMicrotec is a recognized player in the automotive sector (49% of its total income), which is a growing market

also in the future and it offers us many exciting opportunities. According SIA sales of automotive ICs grew by

29.2% year-over-year in 2022 (see footnote 4). 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. Autonomous vehicles, seen by many as the future of personal and public means of

transport, are slowly gaining market share. In 2019, there were some 31 million cars with at least some level of

automation in operation worldwide. It is expected that this number will surpass 54 million in 2024.

Correspondingly, the global autonomous car market is projected to grow as well. While in 2021, the market was

valued at over 24 billion U.S. dollars, it is projected to reach the size of nearly 62 billion U.S. dollars in 202610. 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), vehicle-to-everything (V2X) 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. In addition

there is a growing trend that automotive suppliers with their experience in mobility are investing in the e-cargo-

bike division.


RoodMicrotec N.V.	ANNUAL REPORT 2022

10https://www.statista.com/topics/3573/autonomous-vehicle-technology/

SC Market 2020-2025-2030 + Automotive.jpg

The Statista Research Department11 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.

While electronics made up only about 10% of a total car cost in 1980, this share reached some 35% in 2010. In

2030, electronics are projected to make up around 50% of a cost of a new car. The main drivers of this rise in

electronics usage in cars are the broader trends of connectivity and automation (according Statista12).

Industrial / Medical (Industry 4.0, IoT, IoMT)

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.

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

the home (electricity, refrigerator, light, body, etc.), in cars (V2V-, V2I-,V2X-, internal vehicle communication), in

agriculture, in medical fields and elsewhere.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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

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

12 https://www.statista.com/topics/7983/automotive-electronics-worldwide/#dossierKeyfigures

IoT is a growth engine for the semiconductor industry. In May 202213, IoT Analytics published a market update,

for 2023 they expect the global number of connected IoT devices to grow 22%, to 17.2 billion active endpoints. By

2025, there will likely be more than 27 billion IoT connected devices.

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

ongoing innovations, is growing at a tremendous pace. 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.

In January 2023, Beyond Markets Insight14 published that the global digital health market size was worth US-

Dollars 210 billion in 2022 and is estimated to grow to US-Dollars 800 billion by 2030, with a CAGR of

approximately 18.2% over the forecast period.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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

14 https://beyondmarketinsights.com/report/digital-health-market/

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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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 2022

SWOT ANALYSIS


ANNUAL REPORT 2022	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 2022 was again characterized by the global shortage of materials and long delivery times. This was

particularly true for lead frame availability and the very high capacity utilization of factories in the global supply

chain. Through the close cooperation with customers and suppliers, however, delivery failures could be minimized

as far as possible.

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


RoodMicrotec N.V.	ANNUAL REPORT 2022

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

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

We offer extensive knowledge concerning several test platforms, e.g. Teradyne Flex, Cohu D10, SZ3650,

Advantest 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 2022, we enlarged the wafer test capabilities for optical transceivers for the 5G sector. We also installed a

mixed signal test system with integrated RF-Test instruments.

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 tape & reel of the semiconductor

devices.

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

board solutions. We compensate limitations of the test systems 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.

To meet the increasing demands and to guarantee production capacity, we installed a new test system and a new

pick & place handling system. To be able to handle devices in tubes better, we invested in a new tape & reel

system, which was installed in the second half of 2022. In 2023 we plan to increase capacity even further with an

additional test system and an additional handling system.

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.

Qualification & Failure Analysis

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

of electrical and electronic systems and single devices based on AEC-Q, JEDEC and other standards. For these

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

chambers and others are available. Since 2022 we also offer power module qualification according the AQG 324

standard with a newly installed Power-Cycling-Test system. On the other hand, the focus is on failure and

technology analysis. 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


ANNUAL REPORT 2022	RoodMicrotec N.V.

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/IEC 17025.

One of our key competences is the ability to perform various types of robustness validation tests according 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, 30% of the suspicious components we examined in 2022 were counterfeits.

Demand has increased significantly over the past year. We have taken this as an opportunity to be accredited for

the SAE Standard AS 6081. This makes us currently the first and only company in Germany that can offer this

examination as an accredited procedure.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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

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

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”. All defined tasks during the whole project period 1-3 were successfully executed. The

project has delivered exceptional results with significant immediate or potential impact. The progress over the last

period (P3/2022) was convincing!

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 engaged in getting high technological projects. The next

suitable project for RoodMicrotec could start in September 2023.

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 ISO 9001 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. No major risks have been identified during 2022. 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 certificate (PL-12120-01-00).


ANNUAL REPORT 2022	RoodMicrotec N.V.

Human Resources

Looking back, we got through the COVID-19 period very well and without any impact on staffing levels. The

measures taken with facial 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 2022 increased to 94. At end of 2022 we employed 98 full

time equivalent employees. All in all, due to the excellent order situation, we were able to hire 14 new employees

in 2022, spread across all areas.

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 2022 there was no diversity in terms of gender.


RoodMicrotec N.V.	ANNUAL REPORT 2022

FINANCIAL RESULTS

Total income and result

In 2022, RoodMicrotec’s total income came in 14% higher than in 2021 at EUR 16.5 million

(2021: EUR 14.5 million), with 92% of its total sales in the European countries.

Total income from the automotive sector increased in 2022 by 18% to EUR 8.1 million (2021: EUR 6.9 million) and

represents 49% of the total income. Total income in the industrial / medical sector increased in 2022 by 7% to

EUR 6.7 million (2021: EUR 6.3 million) and represents 40% of the total income. The HiRel / aerospace segment

declined by 8% to EUR 0.8 million (2021: EUR 0.9 million) and represents with 5% only a small percentage of the

total income. The 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 increased by 105% to

EUR 0.9 million (2021: EUR 0.5 million).

Total income by market sector:


(x EUR 1,000)	2022	2021	change

Automotive	8,094	6,886	17.5%
Industrial / Medical	6,683	6,270	6.6%
HiRel / Aerospace	849	926	-8.3%
Others	922	450	104.9%

Total	16,548	14,532	13.9%

Throughout 2022, the Test Operations unit showed a strong increase, which was related to the superior services

and the excellent position RoodMicrotec has with its existing and new customers. The Supply Chain Management

unit showed a limited increase compared to last year. The sharp increase in the second half of 2022 compared to

the first half of 2022 was due to a higher demand for existing products as well as the production ramp-up in the

context of new long-term contracts. In 2022, the Qualification & Failure Analysis unit saw a decrease compared to

2021. However, the total income for the second half of 2022 was 9% higher than for the first half of 2022, which

shows that new customer projects are now starting.


ANNUAL REPORT 2022	RoodMicrotec N.V.

Total income results per operational unit:


(x EUR 1,000)	2022	2021	change

Supply Chain Management	3,533	3,364	5.0%
Test Operations	10,035	7,938	26.4%
Qualification & Failure Analysis	2,980	3,230	-7.7%

Total	16,548	14,532	13.9%

Operating result

The company recorded an operating result for 2022 of EUR 2.5 million compared to EUR 1.2 million in 2021, an

increase of 99.8%. The increase in total income led only to a modest increase of raw materials and consumables

(in 2021, raw materials and consumables were exceptionally high due to a high level of wafer deliveries) and

combined with a smaller increase in operating expenses than in total income, led to an increase in operating

margin from 8.4% in 2021 to 14.8% in 2022.


(x EUR 1,000)	2022	2021	change

EBIT	2,451	1,227	99.8%
% of total income	14.8%	8.4%

Net result

The company recorded a net result for 2022 of EUR 2.4 million profit, an increase of 65.9% compared to 2021.


RoodMicrotec N.V.	ANNUAL REPORT 2022

Financial position

The balance sheet total increased to EUR 17.2 million in 2022 (2021: EUR 15.0 million). Equity increased by

EUR 2.3 million, from EUR 5.6 million to EUR 7.9 million mainly resulting from net income generated in 2022

amounting to EUR 2.4 million. Solvency was 46% at year-end 2022, compared to 37% at year-end 2021.

At year-end 2022, RoodMicrotec had a net cash position of EUR 3.7 million (year-end 2021: EUR 2.6 million). The

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

In 2022, operating cash flow before working capital changes amounted to EUR 3.7 million compared to

EUR 2.6 million in 2021. Net operating cash flow including working capital changes amounted to EUR 3.6 million.

This amount was limited impacted by changes in working capital and interest paid.

The cash flow from investing activities was negative by an amount of EUR 1.7 million, as a result of investments in

fixed assets. The cash flow from financing activities was negative by EUR 0.7 million. This was mainly the net

result of the redemption of EUR 0.4 million from non-controlling interests. The repayment of leasing liabilities

amounted to EUR 0.3 million.

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.

•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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

MAIN DEVELOPMENTS DURING 2022

Total income

The total income for 2022 amounted to EUR 16.5 million, which is 14% higher than in 2021 (EUR 14.5 million)

resulting in a second consecutive year with double-digit growth. Notably, this is the highest total income since

2000, and it shows that RoodMicrotec is focusing on the right fast-growing future-oriented markets. In the second

half of 2022, the total income was EUR 9.2 million - an increase of 28% compared to the second half of 2021

(EUR 7.2 million). In 2022, the order book increased by 19% compared to the orders booked at the end of 2021,

which is a good predictor for a steady quality of the services provided and a high satisfaction level of our

customers.

Throughout 2022, the Test Operations unit showed a strong increase, which was related to the excellent services

provided by RoodMicrotec to its new and existing customers. The Supply Chain Management unit showed a limited

increase in 2022 compared to last year. The sharp increase in the second half of 2022 compared to the first half of

2022 was due to a higher demand for existing products as well as the production ramp-up in the context of new

long-term contracts. In 2022, the Qualification & Failure Analysis unit saw a decrease compared to 2021.

However, the total income for the second half of 2022 was 9% higher than for the first half of 2022, which shows

that new customer projects are now starting.

High frequency test solutions

RoodMicrotec has continued to expand its services in the areas defined in the Company’s technology roadmap.

High frequency test solutions are being developed for our demanding customers based on this technology and

their demand for production test.

High power qualifications

The first projects to qualify high power electronics according AQG 324 have been started in the Qualification &

Failure Analysis department. These new services have been added to handle high power devices aimed for battery

management and control.

Longstanding partnership with Rohde & Schwarz

RoodMicrotec and Rohde & Schwarz have been working together for over 10 years and in this period RoodMicrotec

has carried out the test development for various high frequency ASICs used by Rohde & Schwarz in their products.

RoodMicrotec performs wafer and component level tests as well as qualifications prior to product launch.

For the coming years, further projects of this kind are already scheduled.

Strategic cooperation with Novelda serving the UWB market

The world leader in UWB (Ultra-Wideband) sensing solutions, Novelda, and RoodMicrotec have reached an

agreement on qualification, test and supply of a new generation of UWB devices. The Ultra-Wideband Sensor can

detect the tiniest movements, even breathing and heartbeat. It will automatically activate a device like a laptop,

an LCD screen or a ceiling lamp, when you need it, and turn the device off when you leave. This is useful in a

variety of indoor applications in consumer electronics, building automation and in smart building systems.

The cooperation with RoodMicrotec as European partner enables Novelda to manage faster qualification and

industrialization of new products. Effective collaboration, both on engineering and management level, and

combining each partner’s expertise is allowing ‘first time right’ development of test solutions, qualification

processes and rapid launch of production testing and supply.

The global UWB market is forecasted by TSR (Techno System Research) to reach from 300 million units shipped in

2022 towards more than 1.8 billion units shipped by 2030.

Book-to-bill

The order book is at a 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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

SCM projects

During 2022 we have continued to progress the booked SCM projects towards production through test program

development as well as qualification work. Some projects have been released for production and we start to see

the first volumes for these customers. The geopolitical uncertainties and the shortage of semiconductor

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

projects (but not cancelling them).

The turn-key project for a Swiss customer, which includes design of an ASIC through a design house partner,

packaging of the device in Asia, qualification and test development in-house, is progressing well. The volume

production for this device will start early 2023 in the RoodMicrotec facility in Nördlingen.

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

The APPLAUSE project “Advanced packaging for photonics, optics and electronics for low cost manufacturing in

Europe,” fosters the European semiconductor value chain by building new tools, methods and processes for high

volume manufacturing and was funded national and international. RoodMicrotec has taken over the leadership of

the work package 6 “testing, reliability, failure analysis and metrology”.

The project has delivered exceptional results with significant immediate or potential impact. The progress over the

last period was convincing.

COVID-19 pandemic

During the first half of 2022, the COVID-19 pandemic situation was still influencing the way business was done

around the globe. Many face-to-face meetings were changed to virtual meetings. After the summer, the situation

improved so that we could reduce the limitations and have meetings with our valued customers face-to-face again

to further build the relationships. Looking back, we got through the COVID-19 period very well and without any

impact on staffing levels and operations of the two locations.

Certification and accreditation

Since April 2019, RoodMicrotec is VDA6.2 certified. This extension to the ISO 9001:2015 is focused on automotive

requirements. In the first half of 2022, 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 confirmed by a yearly monitoring accreditation.

Communication and seminars

RoodMicrotec gave lectures on various subjects during several online events /conferences to interested parties,

and on-site lectures for interested customers. By increasing our social media and print media presence, we

published several technical LinkedIn posts at our RoodMicrotec-account and articles in magazines.

Final settlement agreement 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 has paid Robus a total settlement amount of EUR 400k nominal,

without any interest, in two equal nominal installments of EUR 200k each on February 28, 2022 and

June 30, 2022. This final settlement has been reached before and confirmed by the Regional Court of Hamburg in

February 2022.


ANNUAL REPORT 2022	RoodMicrotec N.V.

Legal proceeding regarding perpetual bond issued in 2010

In February 2022 Prime Capital Debt SCS, SICAV-FIS – Robus Recovery Sub-Fund ("Robus") 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 initiated legal proceedings against RoodMicrotec GmbH before the Regional Court of Frankfurt, in

which it demanded immediate termination and claimed full repayment of the 2010 perpetual bond at its nominal

amount of EUR 1,994k, to be increased with interest payments that Robus claimed to be entitled to for the years

2017, 2018 and 2021. Total amount claimed in the proceedings amounted to EUR 2,568k to be increased with

11.7% interest for the applicable period.

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

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

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

Following an oral hearing held on March 7, 2023, the parties have reached agreement on a full and final

settlement that was reached before and confirmed by the Regional Court of Frankfurt am Main. Pursuant to the

settlement, RoodMicrotec GmbH shall pay a total amount of EUR 2,194k, in four equal installments of EUR 548k

each, by March 31, June 30, September 30 and December 31, 2023. This equals 110% of the nominal value of the

perpetual bond. Additional information is available in the section Events after Balance Sheet.


RoodMicrotec N.V.	ANNUAL REPORT 2022

FOCUS AND ACTIONS 2023

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, equipment 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 2023

•Further strengthen the knowledge and know-how in identified 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).

•Add another V93k, a pick-and-place handler and high power tester to the Test Operation to increase capability

and capacity. Analyze the needs in the other departments to be able to continue to serve the increasing

complexity of the devices.

•Implement solutions to handle modern packages such as Wafer Level Chip Scale Packages (WLCSP) and chip-

on-board in our process flows.

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

stakeholders.

•Strengthen and enlarge the customer base in our key market segments.

•The employee base will continue to change due to the new requirements in the market. The number of

employees in 2023 will increase slightly to support the higher expected increase in business.

•Evaluate the need and possible solutions for re-financing the 2021 loan with the due date of March 2024.

•Continue to define the future Environmental, Social and Governance (ESG) targets for the Company.

OUTLOOK

RoodMicrotec expects the total income for 2023 to be in the range of EUR 17.0 million to EUR 17.5 million, with a

profit before tax of 5-10%, and thus in line with the financial targets. The geopolitical situation in the world and

the current energy crisis throughout Europe could have an impact on the Company’s business. RoodMicrotec is

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

Deventer, April 19, 2023

Board of Management

O.M. Sallenhag, CEO

A. Ladega, CFO


ANNUAL REPORT 2022	RoodMicrotec N.V.

SUPERVISION AND GOVERNANCE

MEMBERS OF THE SUPERVISORY BOARD


		Chairman (1954) (Dutch) •Mr. Ruud van der Linden joined the Supervisory Board in 2021 after being appointed for a first term of four years. •He became Chairman in 2022. •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)


		(1966) (Dutch) •Mr. Marc Verstraeten joined the Supervisory Board in 2019 after being appointed for a first term of 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)


RoodMicrotec N.V.	ANNUAL REPORT 2022

REPORT OF THE SUPERVISORY BOARD

We hereby present the 2022 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 2022 Annual Report, prepared by the Board of Management and including the 2022 financial statements, has

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

included in this report, see page 111. 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

2022 financial statements of the Company, the Supervisory Board has closely supervised the Board of

Management during their management of key topics, such as the implications of worldwide supply-chain

disruptions (e.g. availability and transport timeliness of goods and raw materials), the energy crisis and

geopolitical economic uncertainty resulting from the war in Ukraine, the aftermath of the COVID-19 pandemic

with its impact on valuation and reporting assessments in general, the going concern assessment, the goodwill

impairment test, the valuation of the pension plan assets and the perpetual loan bonds, including the legal

procedures in front of the Courts in Hamburg and Frankfurt, related to these bonds.

We propose to the Annual General Meeting of Shareholders to be held on June 6, 2023 to:

•adopt the financial statements for the financial year 2022;

•discharge the Board of Management from liability for its conduct of business in 2022;

•discharge the Supervisory Board from liability for its supervision of the Board of Management in 2022;

•add the net profit for the financial year 2022 to the retained earnings reserve within equity.

RoodMicrotec in 2022

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 and 2021

ensured an excellent start to 2022 with a healthy order book that remained strong throughout the year. Also in

2022 the prudent operational disciplines to protect the Company from further SARS-CoV-2 variants were

continued and still 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 clearer in 2021 and 2022 as well, given the measures

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

technology changes, such as political initiatives to start reshoring production capacity in the semiconductor

industry from Asia to Europe, 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. In 2022, the key point of concern caused by supply chain shortages in the semiconductor industry

as a whole were, same as in 2021, continuously monitored by management and contingency plans were 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 physical annual Works Council

meetings for a third year in a row due to the continuing COVID-19 protective measures in the Company, our

contacts with the Works Council did not identify 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 in 2021 ensure a continued balance

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

of Shareholders on June 9, 2022. The Supervisory Board since then may consult Mr. Tee from time to time as an

advisor with independent expertise on the global semiconductor industry.


ANNUAL REPORT 2022	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 2022. The regular joint Boards meetings in 2022

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

June 9, 2022. In total, the Supervisory Board met for 11 scheduled meetings, for one face-to-face strategy

review meeting 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. Most meetings in 2022 were held virtually, same as in the

previous years, using the various digital platforms (e.g. Microsoft Teams, Skype), due to the continued COVID-19

protective measures in the Company.

In the Supervisory Board meetings in 2022, the following topics were reviewed and discussed extensively:

•the impact of the COVID-19 pandemic aftermath, in terms of 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;

•evaluation of the Company’s listing as a public company at Euronext Amsterdam;

•corporate governance issues;

•evaluation of KPMG Accountants N.V., following the 2021 audit as the third year of their engagement

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

•communication with key shareholders, investors & analysts;

•succession planning and recruitment;

•risk management;

•fraud risks and non-compliance with laws and regulations;

•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 2022

Strategic focus 2020-2022 and outlook 2023

Prior to 2021 we had concluded that 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 semiconductor industry. This was monitored on a monthly basis

throughout 2021 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 Company at that time 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.

During 2021, following various discussions in that year with potential trade partners and considering “as-is”

options, we unanimously favoured as Supervisory Board and Board of Management a strategic M&A (joining a

larger ecosystem) as first choice followed by a reduced cost “as-is” if suitable economies could be established.

The latter option had the intention to continue building value until such time a suitable first option would appear.

As stated in the 2021 annual report, our conclusion was reinforced by very positive trade discussions at that

time. However, the continuation of the public health pandemic throughout 2021 caused opportunities to be put

on hold.

Based on the excellent results of the Company in recent years, we have been in contact in the course of 2022

with multiple international parties to discuss the possibilities to join forces and together build a larger ecosystem

as a business combination. Till date, this has not resulted in a decision to enter into an agreement that would be

beneficial to all our stakeholders. Therefore, we continued to focus in 2022 on autonomous growth in the

strategic “as-is” scenario and worked on further improvement of the Company’s business and financial

performance, which would give the Company an even better position in any potential future M&A discussions with

potential partners.

For 2023, the Supervisory Board and the Board of Management will continue to focus on these two scenarios.

Other options will be considered should they emerge. Based on the outcome of our strategic review meeting held

in the summer of 2022 by the two Boards for which we also engaged an independent corporate finance advisor,

the Boards have decided that we will increase our efforts in 2023 to build a larger ecosystem as a business

combination and take a more initiative-taking role as a Company to realize such an outcome.

Supervisory Board composition and evaluation

The Supervisory Board comprises of two independent members who both meet the requirements of the

Corporate Governance Code. Given their high levels of complementary expertise this is considered to be fully

adequate for a Company of this size. The previous Chairman of the Supervisory Board, Mr. Tee, stepped down at

the 2022 Annual General Meeting of Shareholders. The choice of Mr. Ruud van der Linden to join the Supervisory

Board in 2021 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. Therefore Mr. Van der Linden was

appointed Chairman by the Supervisory Board after Mr. Tee having stepped down.

There were no separate committee meetings held in 2022 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 still adequately composed for running the

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

evaluated the Remuneration Policy 2020-2023, which was approved by the Annual General Meeting of

Shareholders held on July 23, 2020.


ANNUAL REPORT 2022	RoodMicrotec N.V.

The regular monthly meetings of the combined Boards that operated through 2022 provided an open dialog

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

evaluated their own 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.

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. Ruud van der Linden (Chairman)	2021	2025
Mr. Marc Verstraeten	2019	2023

Deventer, April 19, 2023

Supervisory Board

R.J.W.M. van der Linden, Chairman

M.E.T. Verstraeten


RoodMicrotec N.V.	ANNUAL REPORT 2022

RISK AND RISK MANAGEMENT

General

Our policy is aimed at growth in conjunction with a relative reduction of market risks. Potential risks including

fraud risks and non-compliance with laws and regulations are discussed within the Board of Management (and

subsequently with the Supervisory Board). The objective of this self-assessment is to gain a deeper understanding

into the (fraud) risks and the effectiveness of mitigating controls. Furthermore, the assessment increases the

awareness of possible (fraud) risks. Finally, if needed, updates are for example made to the code of conduct and

the whistle blowers policy. The risks outlined on the next pages reflects the risks we believe to be most relevant to

the successful execution of our strategy, with a time horizon of at least 12 months. The sequence of risks does not

reflect their relative importance, vulnerability or materiality. This overview is not exhaustive as there may be risks

as yet unknown to us or that are currently not deemed to be material. The overview should be considered

together with the forward-looking statements.

Operational

Total income in Test Operations inclusive Test Engineering make up approximately 60% (2021: 55%) 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 the trend of 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 2022, the

sales from one of our long-term customers again increased and it is now exceeding 19,8% 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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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.

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.

Fraud

Fraud Risk description: Fraudulent activities by employees and the bypassing of internal control procedures or

non-compliance with laws and regulations could result in an adverse impact on commercial operations,

reputational damage, and customer satisfaction. Opportunity/response: We have further improved our internal

control frame work, which includes a strict Code of Conduct. In addition, we maintain a zero-tolerance policy with

regard to fraudulent behavior. With the further automation of administrative processes, we continue to mitigate

risks in manual processes. Furthermore, a whistle blower policy is in place for which any incidents are closely

monitored and independently followed up. Fraud cases, if any, are reported to the Supervisory Board.


RoodMicrotec N.V.	ANNUAL REPORT 2022

Geopolitical uncertainties

The possible disruption of the global economy by geopolitical uncertainties might reduce growth worldwide. 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.

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. A minor risk is the increased

temperature due to global warming which might impact on the energy consumption since the production facility in

Nördlingen needs to run at a controlled temperature. To improve the situation we have invested in a new chiller in

both facilities to reduce dependence on external temperature and improve efficiency of the units.

Environmental, Social and Governance

In the coming years we will review and define the future Environmental, Social and Governance (ESG) targets for

the Company and provide sufficient insight into the sustainability risks. We are improving the carbon footprint

where possible and have started by changing the company cars to either full electric or plug-in hybrid versions.

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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

Letter of representation

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

external audits.

Actions taken in 2022

During 2022, 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 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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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, 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 labour 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.

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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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 via bank account. 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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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;


ANNUAL REPORT 2022	RoodMicrotec N.V.

•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


RoodMicrotec N.V.	ANNUAL REPORT 2022

DIVERSITY & INCLUSION POLICY

RoodMicrotec N.V. is committed to fostering, cultivating and preserving a culture of diversity, equity and inclusion.

Our human capital is the most valuable asset we have. The collective sum of the individual differences, life

experiences, knowledge, inventiveness, innovation, self-expression, unique capabilities and talent that our

employees invest in their work represents a significant part of not only our culture, but our reputation and

company’s achievement as well.

We embrace and encourage our employees’ differences in age, color, disability, ethnicity, family or marital status,

gender identity or expression, language, national origin, physical and mental ability, political affiliation, race,

religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our

employees unique.

RoodMicrotec diversity initiatives are applicable - but not limited - to our practices and policies on recruitment and

selection; compensation and benefits; professional development and training; promotions; transfers; social and

recreational programs; layoffs; terminations; and the ongoing development of a work environment built on the

premise of gender and diversity equity that encourages and enforces:

•Respectful communication and cooperation between all employees.

•Teamwork and employee participation, permitting the representation of all groups and employee

perspectives.

•Work/life balance through flexible work schedules to accommodate employees’ varying needs.

•Employer and employee contributions to the communities we serve to promote a greater understanding

and respect for the diversity.

All employees of RoodMicrotec have a responsibility to treat others with dignity and respect at all times. All

employees are expected to exhibit conduct that reflects inclusion during work, at work functions on or off the work

site, and at all other company-sponsored and participative events. All employees are also required to attend and

complete annual diversity awareness training to enhance their knowledge to fulfill this responsibility.

Any employee found to have exhibited any inappropriate conduct or behavior against others may be subject to

disciplinary action.

Employees who believe they have been subjected to any kind of discrimination that conflicts with the company’s

diversity policy and initiatives should seek assistance from a supervisor or an HR representative, according the

whistle blower policy.

Further information and a downloadable version: www.roodmicrotec.com


ANNUAL REPORT 2022	RoodMicrotec N.V.

CORPORATE GOVERNANCE

RoodMicrotec N.V. respects the 2022 Dutch corporate governance code (hereinafter referred to as the Code) 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 whistleblower policy may be inspected on our 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 – 1.1.5 Long-term value creation strategy

The Board of Management is responsible for the continuity of the Company and its affiliated enterprise and for

sustainable long-term value creation by the Company and its affiliated enterprise. The Board of Management takes

into account the impact the actions of the Company and its affiliated enterprise have on people and the

environment and to that end weighs the stakeholder interests that are relevant in this context. The Supervisory

Board monitors the Board of Management in this regard.

The Board of Management develops a view on sustainable long-term value creation by the Company and its

affiliated enterprise and formulates a strategy in line with this. The Board of Management formulates specific

objectives in this regard. Depending on market dynamics, it may be necessary to make short-term adjustments to

the strategy.

The Board of Management engages the Supervisory Board early on in formulating the strategy for realizing

sustainable long-term value creation. The Board of Management accounts to the Supervisory Board for the

strategy and the explanatory notes to that strategy.

The Supervisory Board supervises the manner in which the Board of Management implements the strategy for

sustainable long-term value creation. The Supervisory Board regularly discuss the strategy, the implementation of

the strategy and the principal risks associated with it. In the report drawn up by the Supervisory Board, an

account is given of its involvement in the establishment of the strategy, and the way in which it monitors its

implementation.

In the management report, the Board of Management provides a more detailed explanation of its view on

sustainable long-term value creation and the strategy to realize this and describes the contributions made to

sustainable long-term value creation in the past financial year. In addition, it describes the formulated objectives,

what effects the Company’s products, services and activities have had on people and the environment, how the

interests of stakeholders have been considered, what action has been taken in that context and the extent to

which the set objectives have been attained. The Board of Management reports on both short and the long-term

developments.

To ensure that the interests of the relevant stakeholders of the Company are considered when the sustainability

aspects of the strategy are determined, the Company draws up an outline policy for effective dialogue with those

stakeholders.

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


RoodMicrotec N.V.	ANNUAL REPORT 2022

majority of the risk management systems within the Company is based on the structure from the ISO 9001:2015

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.

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 functions of the

audit committee is handled by the Supervisory Board.

The Supervisory Board will focus on monitoring the Board of Management with regard to:

•relations with, and compliance with, recommendations and follow-up of comments by the internal and external

auditors and any other external party involved in auditing the sustainability reporting;

•the funding of the Company;

•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 its

functioning. The Supervisory Board will formulate the engagement for the external auditor’s 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 Supervisory Board resolves on the engagement.

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

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 Board of Management will give the external auditor the

opportunity to respond to the information that has been provided. The external auditor will discuss the draft audit

plan with the Board of Management before presenting it to the Supervisory Board.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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 management letter or 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.

Chapter 2. Effective management and supervision

2.1.1 – 2.1.10 Composition and size

The Board of Management and the Supervisory Board should be composed in such a way as to ensure a degree of

diversity appropriate to the Company with regard to expertise, experience, competencies, other personal qualities,

sex or gender identity, age, nationality and cultural or other background.

The Supervisory Board shall 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. Each Supervisory Board member and each Board of Management member should have the

specific expertise required for the fulfillment of his duties. Each Supervisory Board member should be capable of

assessing the broad outline of the overall management.

RoodMicrotec does not have an executive committee due to the size of the Company.

The Company should have a Diversion & Inclusion Policy (D&I policy) for the enterprise. The D&I policy should in

any case set specific, appropriate and ambitious targets in order to achieve a good balance in gender diversity and

the other D&I aspects of relevance to the Company with regard to the composition of the Board of Management

and the Supervisory Board. The Supervisory Board adopts the D&I policy for the composition of the Board of

Management and the Supervisory Board.

The corporate governance statement should explain the D&I policy and the way in which it is implemented in

practice. If one or more goals for the composition of the Board of Management and the Supervisory Board are not

achieved, an explanation of the reasons should be included in the corporate governance statement, along with an

explanation as to which measures are being taken to attain the goals, and by when this is likely to be achieved.

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

functions of the selection and appointment committee are handled by the Supervisory Board.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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. The evaluation should take place periodically under the supervision of an external

expert.

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.

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 the 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 statements of the Company include 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 Board of Management should establish a procedure for reporting actual or suspected misconduct or

irregularities within the Company and its affiliated enterprise. The Board of Management should ensure that

employees have the opportunity to file such a report without jeopardizing their legal position.


ANNUAL REPORT 2022	RoodMicrotec N.V.

The Board of Management should inform the chairman of the Supervisory Board without delay of any signs of

actual or suspected material misconduct or irregularities within the Company and its affiliated enterprise.

The external auditor should inform the Board of Management and the chairman of the Supervisory Board without

delay if, during the performance of his duties, he discovers or suspects an instance of misconduct or irregularity. If

the actual or suspected misconduct or irregularity pertains to the functioning of one or more Board of Management

members, the external auditor should report this directly to the chairman of the Supervisory Board.

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 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.

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 take into account 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 functions of

the remuneration committee is handled by the Supervisory Board.

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 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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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.

3.4.1 – 3.4.2 Accountability for implementation of remuneration policy

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 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


ANNUAL REPORT 2022	RoodMicrotec N.V.

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 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 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. Shareholders and the Company should be prepared to enter into a dialogue, where

appropriate and at their own discretion. The Company is expected to facilitate the dialogue unless, in the opinion

of the Board of Management, this is not in the interests of the Company and its affiliated enterprise. Shareholders

are expected to be prepared to enter into a constructive dialogue with the Company.

Analyst meetings, analyst presentations, presentations to institutional or other investors and press conferences

are announced in advance on the Company’s 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.

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.

Shareholders, including institutional investors (pension funds, insurance companies, investment institutions and

asset managers), should exercise their voting rights on an informed basis and as they deem fit. Institutional

investors that use the services of proxy advisors (i) should encourage those proxy advisors to be prepared to

enter into a dialogue with the Company regarding their voting policy, voting guidelines and voting

recommendations, and (ii) ensure that their votes are cast in line with their own voting policy.

RoodMicrotec does not have any financing preference shares.

4.4 Recognizing the importance of Company strategy

Shareholders, including institutional investors, recognize the importance of a strategy focused on sustainable long-

term value creation for the Company and its affiliated enterprise.

4.5.1 – 4.5.8 Issuing depository receipts for shares Casting votes

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 2022

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 2022. 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 2022, 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 2022	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 2022

The Remuneration Policy was successfully applied by the Supervisory Board in 2022 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 2022 is 3.8:1 (2021: 3.4:1). This ratio consists of the average

remuneration of members of the Board of Management recognized by the Company in 2022 of EUR 247,000

(2021: EUR 213,000) 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 65,000 (2021: EUR 62,000) is comprised of wages and salaries plus bonuses of the employees divided by

the average number of employees on a full-time basis. During 2022 no short-time work was performed so no

correction in the average number of persons employed was done (2021: -4).


RoodMicrotec N.V.	ANNUAL REPORT 2022


(x EUR 1,000 per FTE, except Net Profit/(Loss))	2022	2021	2020	2019	2018
Average remuneration - Board of Management	247	213	132	138	140
Average remuneration - Employees	65	62	59	57	56
Net Profit/(Loss)	2,380	1,435	-265	-73	125


(change in % compared to previous year)	2022	2021	2020	2019	2018
Board of Management	16%	61%	-4%	-1%	16%
Employees	5%	5%	4%	2%	2%

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 2022:


Target	Description	% of total	2022 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 2022	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 (for Mr. O.M. Sallenhag 2020 to 2023 and for Mr. A. Ladega

2019 to 2022), 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).

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, 2022 and 2021 was as follows:


(x EUR 1,000)	Fixed compensation		Short-Term Incentive		Long-Term Incentive (accrual)		Other benefits		Total
(x EUR 1,000)	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Mr. O.M. Sallenhag	150	150	45	45	81	23	6	6	282	224
Mr. A. Ladega	132	132	40	40	32	8	7	22	211	202
Total	282	282	85	85	113	31	13	28	493	426

The Fixed compensation for Mr. O.M. Sallenhag was 53% of the total remuneration (2021: 67%). The Fixed

compensation for Mr. A. Ladega was 63% of the total remuneration (2021: 65%).

Short-Term Incentive has been rewarded 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 2022.

At the end of 2022, Mr. O.M. Sallenhag holds 485,000 shares in the capital of the Company, see note 22 to the

Consolidated Financial Statements on page 98.

At the end of 2022, Mr. A. Ladega holds 226,000 shares the capital of the Company, see note 22 to the

Consolidated Financial Statements on page 98.

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 2022, no other loans, advances or guarantees were outstanding for each of the members of the

Board of Management.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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, 2022 and

2021 was as follows:


(x EUR 1,000)	2022	2021
Mr. R.J.W.M van der Linden	91	—2
Mr. M.E.T. Verstraeten	12	12
Mr. V.G. Tee	63	15
Total	27	27

At the end of 2022, no loans, advances or guarantees were outstanding for each of the members of the

Supervisory Board.

At the end of 2022, 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 19, 2023

Supervisory Board

R.J.W.M. van der Linden, Chairman

M.E.T. Verstraeten


ANNUAL REPORT 2022	RoodMicrotec N.V.

1 From June till December

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.

3 From January till May

MANAGEMENT STATEMENT

Corporate governance 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 2022.

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 2022 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 chapter ‘Diversity and inclusion’, 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’.

Declaration by the Board of Management

In line with best practice 1.4.3 of the Dutch Corporate Governance Code, the Board of Management hereby makes

the following declaration:

The Board of Management is responsible for establishing adequate internal risk management and control systems

and the Board of Management is of the opinion that the systems functioned properly in the reporting year, and

that they provide a reasonable level of assurance that the financial reporting is free from material misstatements.

This report includes those material risks and uncertainties that are relevant to the expectation of the Company’s

continuity for the period of 12 months after preparation of the report. In the light of the current state of affairs, it

is justified that the financial reporting is prepared on a going concern basis.

For more information, reference is made to the ‘Risk and Risk Management’ chapter. In addition to this the

members of the Board of Management, as required by section 5:25c, paragraph 2, under c of the Dutch act on

Financial Supervision, confirm that to the best of their knowledge:

•The 2022 financial statements included in this Annual Report give a true and fair view of the assets, liabilities,

financial position, cash flows and profit or loss of RoodMicrotec N.V. and the companies included in the

consolidation.

•The Report of the Board of Management included in this Annual Report gives a true and fair view on the

situation on the balance sheet date and of developments during the financial year of RoodMicrotec N.V. and

the group companies included in the consolidation.

•The Report of the Board of Management includes a description of the principal risks and uncertainties that

RoodMicrotec N.V. faces.

The members of the Supervisory Board and the Board of Management have signed the financial statements within

the meaning of section 2:361 of the Dutch Civil Code.

Deventer, April 19, 2023

Board of ManagementSupervisory Board

O.M. Sallenhag, CEOR.J.W.M. van der Linden, Chairman

A. Ladega, CFOM.E.T. Verstraeten


RoodMicrotec N.V.	ANNUAL REPORT 2022

FINANCIAL STATEMENTS

A.CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Profit or Loss


(x EUR 1,000)	Notes	2022	2021

Net sales	1	16,470	14,274
Other income	2	78	258
Total income		16,548	14,532

Raw materials and consumables		-2,717	-2,634
Personnel expenses	3	-7,534	-6,782
Other expenses, other than depreciation and amortization	4	-2,399	-2,330

EBITDA1		3,898	2,786

Depreciation and amortization	5	-1,447	-1,559
Result from operating activities (EBIT)2		2,451	1,227

Financial income	6	8	—
Financial expenses	6	-188	-189
Profit (loss) before taxes		2,271	1,038

Taxes	7	109	397
Net profit (loss)		2,380	1,435

Net profit (loss) attributable to:

Equity holders of the parent		2,380	1,435
Non-controlling interests		—	—
Net profit (loss)		2,380	1,435

Earnings per share

Basic	16	0.03	0.02
Diluted	16	0.03	0.02

The numbers following the various items refer to the notes on pages 65 to 99.


ANNUAL REPORT 2022	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	2022	2021

Net profit (loss)		2,380	1,435

Items that will not be reclassified to profit or loss
Remeasurement of defined benefit obligations	18	445	209
Tax implication1	7, 11	-129	-61
Total other comprehensive income		316	148

Total comprehensive income		2,696	1,583


Total comprehensive income attributable to:
Equity holders of the parent		2,696	1,583
Non-controlling interests		—	—
Total comprehensive income		2,696	1,583

The numbers following the various items refer to the notes on pages 65 to 99.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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 11 ‘Deferred tax assets and liabilities’.

Consolidated Statement of Financial Position

As of December 31


(x EUR 1,000)	Notes	2022	20211

Assets

Property, plant and equipment	8	6,385	5,688
Right-of-use assets	9	350	458
Intangible assets	10	2,030	2,149
Deferred tax assets 1	11	2,092	1,995
Non-current assets		10,857	10,290

Inventories	12	86	98
Contract assets	13	464	341
Trade and other receivables	14	2,108	1,727
Cash and cash equivalents		3,682	2,558
Current assets		6,340	4,724

Total assets		17,197	15,014

Equity and liabilities

Issued share capital		8,259	8,259
Share premium		20,725	20,725
Revaluation reserve		1,759	1,853
Other reserve		120	120
Retained earnings		-25,007	-27,868
Equity, attributable to equity holders of the parent	15	5,856	3,089
Non-controlling interests		1,994	2,494
Total equity	15	7,850	5,583

Loans and borrowings	17	2,525	2,470
Lease liabilities	9	80	220
Defined benefit obligation	18	3,854	4,553
Provisions	19	155	78
Deferred tax liabilities 1	11	14	19
Non-current liabilities		6,628	7,340

Lease liabilities	9	272	242
Trade and other payables	20	2,250	1,824
Income tax payable	7	197	25
Current liabilities		2,719	2,091

Total equity and liabilities		17,197	15,014

The numbers following the various items refer to the notes on pages 54 to 99.


ANNUAL REPORT 2022	RoodMicrotec N.V.

1 Deferred tax liabilities amounting to EUR 19 thousand were reclassified from deferred tax assets to deferred tax liabilities at

December 31, 2021

Consolidated Statement of Changes in Equity


(x EUR 1,000)	Number of shares x1,000	Issued share capital	Share premium	Revaluation reserve	Other reserve	Retained earnings	Equity attributable to parent	Non- controlling interests	Total Equity
Balance at January 1, 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		120
Share options exercised	180	20	16	—	—	—	36	—	36
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	—	1,435
Other comprehensive income:
Remeasurement of defined benefit obligation	—	—	—	—	—	148	148	—	148
Revaluation of land and buildings	—	—	—	-132	—	132	—	—	—
Total comprehensive income for the year	—	—	—	-132	—	1,715	1,583	—	1,583
Balance at December 31, 2021	75,076	8,259	20,725	1,853	120	-27,868	3,089	2,494	5,583

Balance at January 1, 2022	75,076	8,259	20,725	1,853	120	-27,868	3,089	2,494	5,583
Issuance of shares	—	—	—	—	—	—	—	—	—
Transactions with equity holders of the Company	75,076	8,259	20,725	1,853	120	-27,868	3,089	2,494	5,583
Redemption perpetual bond1	—	—	—	—	—	—	—	-500	-500
Gain on redemption perpetual bond net of tax effect1	—	—	—	—	—	71	71	—	71
Changes in ownership interests	—	—	—	—	—	71	71	-500	-429
Net profit (loss)	—	—	—	—	—	2,380	2,380	—	2,380
Other comprehensive income:
Remeasurement of defined benefit obligation	—	—	—	—	—	316	316	—	316
Revaluation of land and buildings	—	—	—	-94	—	94	—	—	—
Total comprehensive income for the year	—	—	—	-94	—	2,790	2,696	—	2,696
Balance at December 31, 2022	75,076	8,259	20,725	1,759	120	-25,007	5,856	1,994	7,850


RoodMicrotec N.V.	ANNUAL REPORT 2022

1 For further information, reference is made to note 15 ‘Share Capital’, non-controlling interests

Consolidated Cash Flow Statement


(x EUR 1,000)	Notes	2022	2021

Net profit (loss) for the year		2,380	1,435
Adjustments for:
–Depreciation and amortization	5	1,447	1,559
–Net financial (income) expenses	6	180	189
–Tax expenses	7	-109	-397
–Movements in net defined benefit obligations	18	-254	-223
–Movements in provisions	19	77	18
		3,721	2,581
Changes in working capital:
–Inventories	12	12	-29
–Contract assets	13	-123	222
–Trade and other receivables	14	-381	-186
–Trade and other payables	20	425	-403
Cash generated from operating activities		3,654	2,185
Interest paid	6	-123	-136
Income tax refund (paid)	7	22	—
Net cash from operating activities		3,553	2,049

Cash flows from investing activities
Acquisition of property, plant and equipment	8	-1,741	-557
Investments in intangible assets	10	-2	-124
Divestment of intangible assets	10	—	8
Net cash from investing activities		-1,743	-673

Cash flows from financing activities
Redemption of perpetual bond	15	-400	—
Proceeds from exercise of options		—	36
Proceeds from borrowings	17	—	892
Cash outflow loan issuance costs	17	—	-27
Payment of lease liabilities	9	-286	-278
Repayment of borrowings	17	—	-792
Net cash flow from financing activities		-686	-169

Net cash flow		1,124	1,207

Cash and cash equivalents less bank overdrafts:
–at January 1		2,558	1,351
–at December 31		3,682	2,558
Net cash flow		1,124	1,207

The numbers following the various items refer to the notes on pages 65 to 99.


ANNUAL REPORT 2022	RoodMicrotec N.V.

B.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

General information

RoodMicrotec N.V. (‘the Company’) is a public limited liability company, was incorporated in 1986 in the

Netherlands and has its registered office at Zutphenseweg 29 D1, in Deventer, the Netherlands, under Trade

December 31, 2022 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).

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 2022 financial year.

RoodMicrotec N.V. shares have been listed on the Euronext Amsterdam stock exchange since 1986.

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 the provisions of Article 362 sub 8, Part 9, Book 2,

of the Dutch Civil Code.

The consolidated financial statements were authorized for issue by the Board of Management on April 19, 2023.

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 (‘EUR’) and all values are rounded to the nearest

thousand, except when otherwise indicated.

Use of judgements and estimates

The preparation of the consolidated financial statements in accordance with EU-IFRS 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, 2022 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 8 ‘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 11 ‘Deferred tax assets and liabilities’);

•the impairment test of goodwill: the impairment test of goodwill includes relevant key assumptions such as the

WACC and the sales growth rate (see note 10 ‘Intangible assets’);


RoodMicrotec N.V.	ANNUAL REPORT 2022

•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 9 ‘Right-of-use assets’);

•the measurement of defined benefit obligations: key actuarial assumptions; (see note 18 ‘Defined benefit

obligations’).

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 2022 and also its liquidity position. For the year ended

December 31, 2022, the Group recognized a net profit of EUR 2,380 thousand and a cash position at

December 31, 2022 was EUR 3,682 thousand.

RoodMicrotec will continue to monitor the latest developments in the worldwide supply situation and the Ukraine

war closely and take measures when we deem this necessary. Based on the developments in 2022 and the current

outlook for 2023, we expect the aforementioned 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

During the current financial year, the Group applied new and amended IFRS standards and IFRIC interpretations

that are relevant to its operations and effective for the accounting year starting on the January 1, 2022.

The following amendments to standards are mandatory for the first time for the financial year beginning

January 1, 2022 and have been endorsed by the European Union:

•Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions,

Contingent Liabilities and Contingent Assets as well as Annual Improvements (effective January 1, 2022). The

package of amendments includes narrow-scope amendments to three Standards as well as the Board’s Annual

Improvements, which are changes that clarify the wording or correct minor consequences, oversights or

conflicts between requirements in the Standards.

◦Amendments to IFRS 3 Business Combinations update a reference in IFRS 3 to the Conceptual

Framework for Financial Reporting without changing the accounting requirements for business

combinations.

◦Amendments to IAS 16 Property, Plant and Equipment prohibit a company from deducting from the cost

of property, plant and equipment amounts received from selling items produced while the company is

preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and

related cost in profit or loss.

◦Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets specify which costs a

company includes when assessing whether a contract will be loss-making.

◦Annual Improvements 2018—2020 make minor amendments to IFRS 1 First-time Adoption of

International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the

Illustrative Examples accompanying IFRS 16 Leases.

These new and amended standards did not have a material impact on the Group’s financial statements.


ANNUAL REPORT 2022	RoodMicrotec N.V.

The following new standards and amendments have been issued, are not mandatory for the first time for the

financial year beginning January 1, 2022 but have been endorsed by the European Union:

•Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of

Accounting policies (effective January 1, 2023). The amendments aim to improve accounting policy

disclosures and to help users of the financial statements to distinguish between changes in accounting

estimates and changes in accounting policies.

•The IAS 1 amendment requires companies to disclose their material accounting policy information rather than

their significant accounting policies. Further, the amendment to IAS 1 clarifies that immaterial accounting

policy information need not be disclosed. To support this amendment, the Board also amended IFRS Practice

Statement 2, ‘Making Materiality Judgements’, to provide guidance on how to apply the concept of materiality

to accounting policy disclosures. The amendments are effective for annual reporting periods beginning on or

after January 1, 2023. Earlier application is permitted (subject to any local endorsement process).

•Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of

Accounting Estimates (effective January 1, 2023). The amendment to IAS 8, ‘Accounting Policies, Changes in

Accounting Estimates and Errors’, clarifies how companies should distinguish changes in accounting policies

from changes in accounting estimates. The amendments are effective for annual reporting periods beginning

on or after January 1, 2023. Earlier application is permitted (subject to any local endorsement process).

•Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single

Transaction (effective January 1, 2023). The amendments clarify how companies account for deferred tax on

transactions such as leases and decommissioning obligations. The main change in the amendments is an

exemption from the initial recognition exemption of IAS 12.15(b) and IAS 12.24. Accordingly, the initial

recognition exemption does not apply to transactions in which equal amounts of deductible and taxable

temporary differences arise on initial recognition. The amendments are effective for annual reporting periods

beginning on or after January 1, 2023. Early adoption is permitted.

•Amendments to IFRS 17 Insurance contracts: initial Application of IFRS 17 and IFRS 9 — Comparative

information (issued on December 9, 2021, effective January 1, 2023). The amendment is a transition option

relating to comparative information about financial assets presented on initial application of IFRS 17. The

amendment is aimed at helping entities to avoid temporary accounting mismatches between financial assets

and insurance contract liabilities, and therefore improve the usefulness of comparative information for users

of financial statements.

The Group elected not to adopt early these new and amended standards, which have been issued but are not yet

effective as per December 31, 2022. The Group does not currently expect that these new and amended standards

have a material impact on its financial statements.

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.

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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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	17
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:

•There is an identified asset;

•The Group obtains substantially all the economic benefits from use of the asset; and

•The Group has the right to direct use of the asset.

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 9.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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.

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 cash-generating unit, 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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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.

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


ANNUAL REPORT 2022	RoodMicrotec N.V.

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.

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 consists of raw materials and consumables and are measured at the lower of costs and net realizable

value. The cost of inventories comprise all costs of purchase on a first-in/first-out basis. Net realizable value

represents the estimated selling price in the ordinary course of business less all estimated costs necessary to

make the sale.

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 in the consolidated statement of financial position consists of bank balances and cash.

Cash and cash equivalents that are not readily available to the Group within 12 months are presented under

financial assets.

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


RoodMicrotec N.V.	ANNUAL REPORT 2022

other assets or cash-generating units (CGU). 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 a perpetual bond and is classified as equity at its nominal value. A perpetual

bond is measured and recognized in equity when certain conditions are jointly met. These include, but are not

limited to, the fact that the perpetual bond has no final maturity date, that investors have no rights of termination,

and that distributions are made at RoodMicrotec’s discretion. In this case, gains, discounts, transaction costs, tax

effects and the compensation are deducted directly from non-controlling interest.

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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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.

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 using the input method. 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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

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 governments are recognized when there is a reasonable assurance that the grant will be received and

the Group will comply with all conditions attached to the grant. Grants are presented as other income in the

consolidated statement of profit or 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 9 ‘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.

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, with

the exception of income taxes relating to items recognized directly in equity or in other comprehensive income.

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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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 divestment 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.

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)	2022	2021

Euro denominated net sales	15,555	13,563
US-Dollar denominated net sales	915	711

Total net sales	16,470	14,274


RoodMicrotec N.V.	ANNUAL REPORT 2022

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, 2022 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.

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, 2024.

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 years

Loan	2,525	-2,757	-126	-2,631	—
Lease liabilities	352	-352	-272	-47	-33
Trade payables	603	-603	-603	—	—

Liquidity position	3,480	-3,712	-1,001	-2,678	-33

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 1.0% decrease in the market interest rate at year-end would increase the pension obligation by

approximately EUR 521,000. A 1.0% increase of the market interest rate at year-end would lead to a decrease of

the pension obligation by approximately EUR 444,000.

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


ANNUAL REPORT 2022	RoodMicrotec N.V.

in the consolidated statement of financial position plus net debt. Below the gearing ratio of 2022 is stated

compared to 2021.


As of December 31
(x EUR 1,000)	2022	2021

Long term interest-bearing debt	2,605	2,690
Short term interest-bearing debt	272	242
Less cash and cash equivalents	-3,682	-2,558

Net debt	-805	374
Total equity	7,850	5,583

Invested capital	7,045	5,957

Gearing ratio (net debt/capital x 100%)	-11%	6%

Legal risk

In February 2022 Prime Capital Debt SCS, SICAV-FIS – Robus Recovery Sub-Fund (Robus) 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 (Genussschein) of EUR 1,994,000 that RoodMicrotec GmbH issued in

2010. Robus has initiated legal proceedings against RoodMicrotec GmbH before the Regional Court of Frankfurt, in

which it demanded immediate termination and claimed full repayment of the 2010 perpetual bond at its nominal

amount of EUR 1,994,000, to be increased with interest payments that Robus claimed to be entitled to for the

years 2017, 2018 and 2021. Total amount claimed in the proceedings amounted to EUR 2,568,000 to be increased

with 11.7% interest for the applicable period.

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

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

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

In March 2023 both parties agreed on a settlement, see note 23 ‘Events after balance sheet date’.

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 2022

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 (2021: EUR 2,000) 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)	2022	2021

Test Operations	10,035	7,938
Supply Chain Management (SCM)	3,533	3,364
Qualification & Failure & Analysis	2,902	2,972

Total	16,470	14,274

Net sales by geographic region


(x EUR 1,000)	2022	2021

Germany	9,284	7,776
Rest of Europe	5,838	5,326
Asia	839	1,154
Rest of the world	509	18

Total	16,470	14,274

The net sales in the Netherlands amounts to nil in both 2022 and 2021.

The basis for attributing net sales from external customers to individual geographical regions, is the country where

the customer is based. In 2022, one individual customer meets the 10% criterion with a total reported revenue of

EUR 3,2750,000 (2021: EUR 2,680,000).


ANNUAL REPORT 2022	RoodMicrotec N.V.

2.Other income


(x EUR 1,000)	2022	2021

Other income	78	258

Total	78	258

The Group is making use of government grants due to its participation in publicly funded projects. In 2022,

EUR 78,000 (2021: EUR 258,000) has been granted for this participation. The project “Advanced packaging for

photonics, optics and electronics for low cost manufacturing in Europe,” simply called APPLAUSE was successfully

finished in 2022 and was funded by the ECSEL Joint Undertaking, which is supported by the European Union's

Horizon 2020 research and innovation program.

The project is well aligned with the Group’s strategy and focussed on the European semiconductor value chain by

building new tools, methods and processes for high volume manufacturing.

3.Personnel expenses


(x EUR 1,000)	2022	2021

Salaries	6,243	5,669
Social securities	1,241	1,186
‘Kurzarbeit’ and other credits	—	-115
Pension charges	50	42

Total	7,534	6,782

In 2022, no internal hours are capitalized (2021: EUR 93,000).

Personnel expenses in 2022 included an expense of approximately EUR 522,000 (2021: EUR 381,000) for the

employees bonus scheme, around EUR 198,000 (2021: EUR 117,000) of these expenses relate to the Board of

Management’s bonus scheme.

During 2022 no short-time work was performed, RoodMicrotec GmbH made no longer use the German program

‘Kurzarbeit’ since end of May 2021.

The professional categories of the employees are as follows:


Category (in FTE)	2022	2021

Operational unit	67	67
Management and administrative	15	13
Sales and support	12	13
Short-time work	—	-4

Total average number of employees	94	89

The average number of persons employed by the Group in 2022 on a full-time basis was 94 (2021: 89). No

reduction for short-time work in 2022 (2021: -4 FTE). In 2022 an average of 2 persons were employed in the

Netherlands on a full-time basis (2021: 2).

At year-end 2022, the Group employed 98 persons (2021: 92) on a full-time basis.

4.Other expenses, other than depreciation and amortization


(x EUR 1,000)	2022	2021

Housing and equipment costs	1,441	1,372
Selling and administrative expenses	958	958

Total	2,399	2,330


RoodMicrotec N.V.	ANNUAL REPORT 2022

Auditor fees

The total costs for the services rendered by KPMG charged to the statement of profit or loss amount to:


	2022			2021
(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	128	91	219	123	127	250
Other assurance services	—	—	—	—	—	—
Tax-related advisory services	—	—	—	—	—	—
Other non-audit services	—	—	—	—	—	—

Total	128	91	219	123	127	250

KPMG Accountants N.V. provided in 2022 no other services in addition to the statutory audit of the 2022

consolidated and Company financial statements.

The fees mentioned in the table for the audit of the financial statements are related to the work performed during

the reporting period by the external auditor.

5.Depreciation and amortization


(x EUR 1,000)	2022	2021

Intangible assets	121	214
Land and buildings	149	149
Machinery and equipment	766	783
Depreciation of right-of-use assets	282	274
Other property, plant and equipment	129	139

Total	1,447	1,559

6.Financial income and expenses

Financial income and expenses can be specified as follows:


(x EUR 1,000)	2022	2021

Financial income:	-8	—
Interest income	-8	0

Financial expenses:	188	189
Interest charges - Loan	180	135
Interest charges - Bond loan	—	49
Interest charges - On leases	2	3
Other financial expenses	6	2

Total	180	189

The interest charges in 2022 include amortization costs amounting to EUR 57,000 (2021: EUR 53,000), which

relate to discount and issuance cost of loans provided.


ANNUAL REPORT 2022	RoodMicrotec N.V.

7.Income taxes

Amounts recognized in profit or loss


(x EUR 1,000)	2022	20211

Current tax expense (income):
Current year	706	358
Changes in estimates related to prior years	-22	—

Deferred tax expense (income):
Change in tax rate	3	—
Recognition of previously unrecognized tax losses	-763	-727
Origination and reversal of temporary differences	-33	-28

Tax expense (income) in Consolidated Statement of Profit or Loss	-109	-397

No income taxes were paid in 2022 (2021: nil). The previously unrecognized tax losses includes recognition of

EUR - 201,000 of deferred tax asset for the unused German tax losses measured based on the taxable profits in

the business plan forecast of five years (2021: EUR -394,000), the remaining amount concerns utilization of tax

losses for the year. Reference is made to note 11 ’Deferred tax assets and liabilities’.

Reconciliation of the effective tax rate


(x EUR 1,000)	2022		20212

Profit (loss) before taxes	2,271		1,038
Tax using the Company's domestic tax rate	661	29.1%	303	29.2%
Effect of tax rates in foreign jurisdictions	-4	-0.2%	-2	-0.2%
Tax effect of:
Non-deductible expenses	17	0.7%	31	3.0%
Tax incentives	-1	—%	-2	-0.2%
Recognition of previously unrecognized tax losses	-763	-33.6%	-727	-70.0%
Effect changes in tax rate on deferred taxes	3	0.1%	—	—%
Changes in estimates related to prior years	-22	-1.0%	—	—%

Total	-109	-4.8%	-397	-38.2%

The effective tax rate , i.e. the ratio between total tax and the profit before corporate income tax, amounts to

-4.8% (2021: -38.2%). The regions where the Group operates are the Netherlands and Germany, where the

following tax rates applied in 2022: The Netherlands 15% and Germany 29%. As the major part of the activities is

in Germany, the Group uses the German domestic tax rates of 29% (2021: 29%).


RoodMicrotec N.V.	ANNUAL REPORT 2022

1 Adjusted for comparison purposes

2 Adjusted for comparison purposes

Amounts recognized in OCI


(x EUR 1,000)	2022	2021

Deferred taxes on positions recognized as comprehensive income:
Tax income (expense) remeasurement of defined benefit obligation	-129	-61

Tax income (expense) in Consolidated Statement of Comprehensive income	-129	-61

Amounts recognized directly in equity in 2022 (2021: nil)


(x EUR 1,000)	before tax	tax	net of tax
Gain on redemption perpetual bond net of tax effect	100	29	71

Income taxes recognized directly in equity were the result of tax effects in connection with a settlement payment

of a perpetual bond in the first half-year 2022.

8.Property, plant and equipment


(x EUR 1,000)	Land and buildings at fair value	Machinery and equipment	Others	Total

January 1, 2021
Cost or fair value	3,015	21,742	2,719	27,476
Accumulated depreciation	—	-18,947	-2,327	-21,274
Carrying amount January 1, 2021	3,015	2,795	392	6,202
Additions	24	483	50	557
Disposals – Cost	-10	-140	-142	-292
Disposals – Accumulated Depreciation	10	140	142	292
Depreciation charge	-149	-783	-139	-1,071
Carrying amount December 31, 2021	2,890	2,495	303	5,688

December 31, 2021
Cost or fair value	3,029	22,085	2,627	27,741
Accumulated depreciation	-139	-19,590	-2,324	-22,053
Carrying amount December 31, 2021	2,890	2,495	303	5,688

Useful economic life in years	17	2-10	3-10


ANNUAL REPORT 2022	RoodMicrotec N.V.


(x EUR 1,000)	Land and buildings at fair value	Machinery and equipment	Others	Total

January 1, 2022
Cost or fair value	3,029	22,085	2,627	27,741
Accumulated depreciation	-139	-19,590	-2,324	-22,053
Carrying amount January 1, 2022	2,890	2,495	303	5,688
Additions	13	1,601	127	1,741
Disposals – Cost	-4	-56	-4	-64
Disposals – Accumulated Depreciation	4	56	4	64
Depreciation charge	-149	-766	-129	-1,044
Carrying amount December 31, 2022	2,754	3,330	301	6,385

December 31, 2022
Cost or fair value	3,038	23,630	2,750	29,418
Accumulated depreciation	-284	-20,300	-2,449	-23,033
Carrying amount December 31, 2022	2,754	3,330	301	6,385

Useful economic life in years	17	2-10	3-10

Land and buildings at historical cost


(x EUR 1,000)	2022	2021

Initial costs land and buildings	4,159	4,145
Additions (disposals)	9	14
Accumulated depreciation	-3,891	-3,879

Net book amount at depreciated historical cost	277	280

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). Every three

years, a revaluation takes place.

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	55	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


RoodMicrotec N.V.	ANNUAL REPORT 2022

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%	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 2022 (2021: zero).

Assets under construction

Assets under construction are included in the property, plant and equipment category ‘Machinery and equipment’.

As at December 31, 2022, assets under construction amounted to EUR 275,000 (2021: EUR 150,000).

Security

The loan provided in 2021 is unsecured, provided that in the event of a default the Lenders 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

For further information on security, reference is made to note 17 ‘Loans and borrowings’.

9.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


ANNUAL REPORT 2022	RoodMicrotec N.V.

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 2022, 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 29,000 (2021: EUR 4,000).


RoodMicrotec N.V.	ANNUAL REPORT 2022

Movements in right-of-use assets can be shown as follows:


(x EUR 1,000)	Company offices	Other operating assets	Total assets

January 1, 2021
Cost	1,025	293	1,318
Accumulated depreciation	-433	-157	-590
Carrying amount January 1, 2021	592	136	728
Additions	—	—	—
Renewal option	—	4	4
Terminations - Cost	-40	-72	-112
Terminations - Accumulated depreciation	40	72	112
Depreciation charge	-197	-77	-274
Carrying amount December 31, 2021	395	63	458

Cost	985	225	1,210
Accumulated depreciation	-590	-162	-752
Carrying amount December 31, 2021	395	63	458

January 1, 2022
Cost	985	225	1,210
Accumulated depreciation	-590	-162	-752
Carrying amount January 1, 2022	395	63	458
Additions	—	145	145
Renewal option	18	11	29
Terminations - Cost	—	-130	-130
Terminations - Accumulated depreciation	—	130	130
Depreciation charge	-199	-83	-282
Carrying amount December 31, 2022	214	136	350

Cost	1,003	251	1,254
Accumulated depreciation	-789	-115	-904
Carrying amount December 31, 2022	214	136	350

The other operating assets consist mainly of leased company vehicles.


ANNUAL REPORT 2022	RoodMicrotec N.V.

The lease liabilities can be specified as follows:


(x EUR 1,000)

Balance at January 1, 2021	733
Additions	—
Renewal option	4
Terminations	—
Interest costs	3
Lease payments	-278
Balance at December 31, 2021	462

Lease liability – non-current	220
Lease liability – current	242
Total	462


(x EUR 1,000)

Balance at January 1, 2022	462
Additions	145
Renewal option	29
Terminations	—
Interest costs	2
Lease payments	-286
Balance at December 31, 2022	352

Lease liability – non-current	80
Lease liability – current	272
Total	352

The contractual maturity of the future lease liabilities is as follows:

As of December 31


(x EUR 1,000)	2022	2021

Under one year	272	242
One to five years	80	220
Over five years	—	—

Contractual future lease liabilities	352	462

The total cash outflow for leases in 2022 was EUR 286,000 (2021: EUR 278,000).


RoodMicrotec N.V.	ANNUAL REPORT 2022

The consolidated statement of profit or loss contains the following lease items:


(x EUR 1,000)	2022	2021

Costs of short-term leases	5	6
Costs of low-value leases	—	1

Total	5	7

10.Intangible assets


(x EUR 1,000)	Goodwill	Development expenditure	Other intangible assets	Total

Cost
Balance at January 1, 2021	1,741	997	530	3,268
Investments	—	93	31	124
Divestment	—	-15	-55	-70
Balance at December 31, 2021	1,741	1,075	506	3,322

Accumulated amortization
Balance at January 1, 2021	—	546	475	1,021
Amortization	—	175	39	214
Divestment	—	-15	-47	-62
Balance at December 31, 2021	—	706	467	1,173

Carrying amount
Balance at January 1, 2021	1,741	451	55	2,247
Balance at December 31, 2021	1,741	369	39	2,149


ANNUAL REPORT 2022	RoodMicrotec N.V.


(x EUR 1,000)	Goodwill	Development expenditure	Other intangible assets	Total

Cost
Balance at January 1, 2022	1,741	1,075	506	3,322
Investments	—	—	2	2
Divestment	—	-56	-38	-94
Balance at December 31, 2022	1,741	1,019	470	3,230

Accumulated amortization
Balance at January 1, 2022	—	706	467	1,173
Amortization	—	105	16	121
Divestment	—	-56	-38	-94
Balance at December 31, 2022	—	755	445	1,200

Carrying amount
Balance at January 1, 2022	1,741	369	39	2,149
Balance at December 31, 2022	1,741	264	25	2,030

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 2023 and forecasts for

2024-2027, based on an annual organic growth rate of 7%. Residual value is based on a 1% perpetual growth

rate. Given the high degree of uncertainty caused by geopolitical uncertainties and the uncertain macroeconomic

outlook, 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 optimal capital structure, the best

mix of debt and equity financing that maximizes the company's market value while minimizing its cost of capital.

The WACC post-tax used is 13.2% (2021: 13.6%).

The discount rate applied in accordance with article 55 of IAS 36 ‘Impairment of assets’ corresponds to a WACC

pre-tax of 18.6% (2021: 19.1%).

The recoverable amount for 2022 amounts to EUR 16.3 million. The headroom in the impairment test scenario

amounts to EUR 7.5 million.

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 22.0%.

Development expenditure

In 2022 no investments in internally generated intangible assets were made (2021: EUR 93,000). Development

expenditures are amortized during the expected economic lifetime of 4 years starting when the project is finished.

The amortization of development expenditure amounts to EUR 105,000 (2021: EUR 176,000). In 2022, EUR

56,000 was divested (2021: EUR 15,000) with no losses.

Amortization is accounted for in the consolidated statement of profit or loss within depreciation. Loss on

divestment is accounted for in the consolidated statement of profit or loss within other operating expenses.

Other intangible assets

The other intangible assets consist of software and licenses and capitalized expenses related to the website.

Other intangible assets are being amortized over a period between 3 and 5 years. Amortization is accounted for in

the consolidated statement of profit or loss within depreciation.


RoodMicrotec N.V.	ANNUAL REPORT 2022

11.Deferred tax assets and liabilities

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. The deferred tax asset of

EUR 2,092,000 (December 31, 2021: EUR 1,995,000) is related to Germany and includes assets as well as

liabilities which can be offset. The deferred tax liability of EUR -14,000 (December 31,2021 EUR -19,000) is

related to the Netherlands.

Movement in deferred taxes assets and liabilities comprise the following:


(x EUR 1,000)	Net balance at January 1, 2021	Recognized directly in equity	Recognized in profit or loss	Recognized in OCI	Net balance at December 31, 2021	Deferred tax assets at December 31, 2021	Deferred tax liabilities at December 31, 2021

Property, plant and equipment	-776	—	9	—	-767	-767	—
Right-of-use assets	1	—	—	—	1	1	—
Intangible assets	-124	—	17	—	-107	-107	—
Employee benefits	664	—	1	-61	604	604	—
Provisions	3	—	-1	—	2	2	—
Loan	—	-21	2	—	-19	—	-19
Tax losses carried forward	1,868	—	394	—	2,262	2,262	—
Total deferred tax	1,636	-21	422	-61	1,976	1,995	-19


(x EUR 1,000)	Net balance at January 1, 2022	Recognized directly in equity	Recognized in profit or loss	Recognized in OCI	Net balance at December 31, 2022	Deferred tax assets at December 31, 2022	Deferred tax liabilities at December 31, 2022

Property, plant and equipment	-767	—	45	—	-722	-722	—
Right-of-use assets	1	—	—	—	1	1	—
Intangible assets	-107	—	31	—	-76	-76	—
Employee benefits	604	—	-53	-129	422	422	—
Provisions	2	—	2	—	4	4	—
Loan	-19	—	5	—	-14	—	-14
Tax losses carried forward	2,262	—	201	—	2,463	2,463	—
Total deferred tax	1,976	—	231	-129	2,078	2,092	-14

Deferred tax assets: tax losses carried forward

At December 31, 2022 the Group has recognized tax losses carried forward at a total of EUR 2.5 million

(December 31, 2021: EUR 2.3 million), which relate entirely to the Germany subsidiary, representing a total

amount of unused losses of EUR 18.2 million (December 31, 2021: EUR 20.2 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.

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. An amount of EUR 8.5 million of unused tax losses in Germany are recognized on the

balance sheet as per December 31, 2022. Consequently an amount of EUR 9.8 million of unused losses are not

recognized as per December 31, 2022.

A quantitative sensitivity analysis for the deferred tax asset for unused German tax losses, measured based on the

taxable profits in the business plan forecast of five years, as at December 31, 2022 is as shown below:


Assumption	change growth rate
Sensitivity level	0.5% increase	0.5% decrease
Impact on deferred tax asset in EUR	362,000	-358,000


ANNUAL REPORT 2022	RoodMicrotec N.V.

The sensitivity analysis is prepared at the end of the reporting period using the same methods as applied in the

measurement of deferred tax assets for unused German tax losses in the consolidated statement of financial

position. The sensitivity analysis may not be representative of the actual change in the deferred tax assets.

The German combined statutory tax rate for RoodMicrotec GmbH was 29% for the 2022 fiscal year (2021: 29%).

This is based on a corporate income tax rate of 16% (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 2022 and 2021, the available tax losses were not recognized. These

unrecognized tax losses are in total approximately EUR 0.9 million as per December 31, 2022 (2021: EUR 1.0

million).

Unused tax losses for which no deferred tax asset is recognized


(x EUR 1,000)	2022	tax rate	Expiry date	2021	tax rate	Expiry date

Corporate income tax	10,534	16%		13,176	16%
Trade tax	8,902	13%		11,349	13%
Germany1	9,789	29%	none	12,359	29%	none
Netherlands	923	19%	none	1,003	19%	none
Total unrecognized tax losses	10,712			13,362

The amount of unused tax losses carried forward as per December 31, 2022 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% (2021: 29%) 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

of EUR 14,000 (December 31, 2021: EUR 19,000), are within the same jurisdiction.

12.Inventories


As of December 31
(x EUR 1,000)	2022	2021

Raw materials and consumables	86	98

Total	86	98

In 2022 no write-downs of inventory to lower net realizable value took place (2021: zero).

13.Contract assets


As of December 31
(x EUR 1,000)	2022	2021

Contract Assets	464	341

Total	464	341

During 2022, contract assets increased by EUR 123,000 to EUR 464,000. The value varies depending on type and

phase of a project. In general the increase resulted from a higher levels of activities.


RoodMicrotec N.V.	ANNUAL REPORT 2022

1 calculated as weighted average

14.Trade and other receivables

Trade and other receivables are specified as follows:


As of December 31
(x EUR 1,000)	2022	2021

Not overdue	1,620	1,234
< 30 days overdue	256	229
> 30 days and < 60 days overdue	26	36
> 60 days overdue	16	3
Allowance for credit losses	-26	-22
Trade receivables	1,892	1,480
Other receivables	216	247

Total	2,108	1,727

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 2022, the Group applies a single-loss rate of 1.1% (2021: 1.2%) of trade

receivables and contract assets.

The movement in the allowance for credit losses during the year is as follows:


(x EUR 1,000)	2022	2021

Balance at January 1	-22	-25
Release/addition to the allowance for credit losses	-4	3
Utilized during the year	—	—

Balance at December 31	-26	-22

As at December 31, 2022, trade receivables of around EUR 298,000 (2021: EUR 268,000) 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.

15.Share capital

Authorized share capital

At December 31, 2022 the authorized share capital comprised 100,000,000 shares (2021: 100,000,000). The

shares have a nominal value of EUR 0.11 each.

In 2022 there were no shares issued.


(x EUR 1,000)	Number of Shares	Share Capital (EUR)	Share Premium (EUR)

Balance at January 1	75,076	8,259	20,725

Balance at December 31	75,076	8,259	20,725


ANNUAL REPORT 2022	RoodMicrotec N.V.

As at December 31, 2022, a total number of 75,076,267 shares are issued (2021: 75,076,267). Of these, the

Company holds 4,100 shares (2021: 4,100) as treasury shares. The number of shares held by the Company at the

end of 2022 was less than 0.01% of the total number of issued shares (2021: < 0.01%).

As at December 31, 2022, the Company has 1,530,785 warrants outstanding, which are all held by

Blikkenburg B.V. (2021: 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 December 31, 2022, the Company has 7,485,000 non-listed 5-year warrants outstanding, (2021:

7,485,000). The exercise price of each warrant is EUR 0.15. The expiration date of these warrants is

March 31, 2026. As at March 31, 2022 the Group granted the non-listed 5-year warrants to the Lenders of loan

issued (see note 17 ‘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.

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). 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 17).

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 2022 did not arise. The annual net profit for 2022 of RoodMicrotec

GmbH amounted to EUR 2,349,000 (2021: EUR 1,420,000), but profit distribution cannot be paid from the free

capital in the 2022 financial year. Therefore, the compensation payment in 2022 is EUR 0 (2021: EUR 0).


RoodMicrotec N.V.	ANNUAL REPORT 2022

As of December 31, 2022, 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.

In the first half-year 2022, the 2012 perpetual bond of EUR 500,000 has been redeemed from non-controlling

interests, as a result of a settlement payment for an amount of EUR 400,000. The gain of EUR 100,000 is subject

to German corporate taxes at the German combined statutory tax rate of 29%. The gain on redemption of the

perpetual bond net of tax effect amounts to EUR 71,000 and has been directly recognized in equity.

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 2021

The financial statements for the reporting year 2021 have been adopted by the General Meeting on June 9, 2022.

The General Meeting has adopted the appropriation of the net profit as proposed by the Board of Management and

approved by the Supervisory Board.

16.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.


	2022	2021

Net profit (loss) attributable to equity holders of the Company (x EUR 1,000)	2,380	1,435
Weighted average number of shares outstanding (in thousands)	75,076	75,016

Basic earnings per share (x EUR 1)	0.03	0.02

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 which are in the money.


	2022	2021

Net profit (loss) attributable to equity holders of the Company (x EUR 1,000)	2,380	1,435

Weighted average number of shares outstanding (in thousands)	75,076	75,016
Adjustments for:
- Warrants (in the money) (in thousands)	4,990	2,495

Weighted average number of shares for diluted earnings per share (in thousands)	80,066	77,511

Diluted earnings per share (x EUR 1)	0.03	0.02


ANNUAL REPORT 2022	RoodMicrotec N.V.

17.Loans and borrowings

This note provides information on the contractual terms of the Group’s interest-bearing loans and borrowings.


As of December 31
(x EUR 1,000)	2022	2021

Loan	2,525	2,470
Less: current portion of long-term loans	—	—

Total non-current loans and borrowings	2,525	2,470

Debt repayment schedule as per December 31, 2022


(x EUR 1,000)	Total	Current liabilities	Non- current liabilities	1 to 2 years	2 to 5 years	More 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, 2022


(x EUR 1,000)	Total	Current liabilities	Non- current liabilities	1 to 2 years	2 to 5 years	More than 5 years

Loan	157	126	31	31	—	—

Total	157	126	31	31	—	—

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

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:


	2022	2021

Loan	4.83%	4.83%
Secured bond loan	N/A	6.00%


RoodMicrotec N.V.	ANNUAL REPORT 2022

18.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 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 1 is active participants and 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, 2022 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.

The principal assumptions used for the purpose of the actuarial valuations at December 31 are as follows:


	2022	2021

Discount rate at December 31	4.14%	1.06%
Salary increase rate	2.25%	2.00%
Pension increase rate	2.25%	—%
Expected duration in years, active employees	20 years	20 years
Expected duration in years, pensioners	10 years	10 years
Expected duration in years, mixed	15 years	15 years
Mortality	RT Heubeck 2018 G	RT Heubeck 2018 G
Disability	RT Heubeck 2018 G	RT Heubeck 2018 G
Marriage	RT Heubeck 2018 G	RT Heubeck 2018 G
Withdrawal	Mercer specific tables	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)	2022	2021

Defined benefit obligations and plan assets
Defined benefit obligations at January 1	6,083	6,547
Current service costs	3	4
Interest costs	62	49
Actuarial gains (-) or losses	-400	-136
Pension payments	-421	-381
Defined benefit obligations at December 31	5,327	6,083

January 1	1,530	1,563
Interest income on plan assets	15	11
Return on plan assets	45	73
Pension payments from plan assets	-117	-117
Fair value of plan assets at December 31	1,473	1,530

Net defined benefit obligations at December 31	3,854	4,553


ANNUAL REPORT 2022	RoodMicrotec N.V.

Plan assets

Plan assets as per year-end are composed of life insurance policies amounting to EUR 1,473,000 (2021:

EUR 1,530,000), 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 45,000 (2021: EUR 73,000). 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)	2022	2021

Current service costs	3	4
Net interest expenses	47	38

Expenses recognized in profit or loss	50	42

Amounts recognized in other comprehensive income (OCI) related to the Group’s defined benefit plans are as

follows:


(x EUR 1,000)	2022	2021

Effect of changes in financial assumptions	-502	-172
Effect of experience adjustments	102	36
Return on plan assets or reimbursement rights excl. interest income	-45	-73

Expenses (income) recognized in OCI	-445	-209

A quantitative sensitivity analysis for the discount rate as at December 31, 2022 is as shown below:


Assumption	Discount rate
Sensitivity level	1.0% increase	1.0% decrease
Impact on defined benefit obligation in EUR	-444,000	521,000

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 2023 are EUR 0.4 million (2022: EUR 0.4 million).

19.Provisions


As of December 31
(x EUR 1,000)	2022	2021

Warranty provisions	17	14
Other provisions	138	64

Total	155	78

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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

20.Trade and other payables


As of December 31
(x EUR 1,000)	2022	2021

Suppliers and trade creditors	603	453
Other payables	1,647	1,371

Total	2,250	1,824

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.

21.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.


(x EUR 1,000)	2022	< 1 year	1 - 5 year	> 5 year	2021

Property, plant and equipment ordered	459	459	—	—	578
Maintenance	533	349	184	—	247
Other off-balance sheet commitments	966	839	127	—	163

Total	1,958	1,647	311	—	988

The other off-balance sheet commitments pertain to contract agreements between RoodMicrotec and suppliers for

fulfilling specific customer contracts.

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.

22.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 54 - 58).

Remuneration of Board of Management


	Fixed compensation		Short-term incentive		Long-term incentive		Other benefits		Total
(x EUR 1,000)	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021

Mr. O.M. Sallenhag	150	150	45	45	81	23	6	6	282	224
Mr. A. Ladega	132	132	40	40	32	8	7	22	211	202

Total	282	282	85	85	113	31	13	28	493	426

The remuneration of the Board of Management is determined by the Supervisory Board.

At the end of 2022, Mr. O.M. Sallenhag holds 485,000 shares and Mr. A. Ladega holds 226,000 shares in the

capital of the Company.


ANNUAL REPORT 2022	RoodMicrotec N.V.

Remuneration of the Supervisory Board


(x EUR 1,000)	2022	2021

Mr. R.J.W.M. van der Linden	91	—
Mr. M.E.T. Verstraeten	12	12
Mr. V.G. Tee	62	15

Total	27	27

The members of the Supervisory board received a fixed compensation during 2022.

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.

At the end of 2022, 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 2022, 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. (see note 17 ‘Loan and borrowings’).

23.Events after balance sheet date

Subsequent to December 31, 2022, the following events occurred:

Final settlement agreement with Robus regarding legal proceedings on perpetual bond issued in 2010.

RoodMicrotec GmbH has entered into an agreement for a full and final settlement with Prime Capital Debt SCS,

SICAV-FIS – Robus Recovery Sub-Fund ("Robus") regarding the perpetual bond that RoodMicrotec GmbH issued in

2010 and which is held by Robus.

As announced on February 21, 2022, Robus had initiated legal proceedings against RoodMicrotec GmbH before the

Regional Court of Frankfurt am Main. Robus claimed being 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 2010 perpetual bond, Robus claimed the immediate and full repayment of the nominal amount of

the perpetual bond asserting grounds for the extraordinary termination of the perpetual bond. The total amount

claimed by Robus in the proceedings amounted to EUR 2,568k to be increased with 11.7% interest for the

applicable period.

Following an oral hearing held on March 7, 2023, the parties have reached agreement on a full and final

settlement that was reached before and confirmed by the Regional Court of Frankfurt am Main. Pursuant to the

settlement, RoodMicrotec GmbH shall pay a total amount of EUR 2,194k, in four equal installments of EUR 548k

each, by March 31, June 30, September 30 and December 31, 2023. This equals 110% of the nominal value of the

perpetual bond. RoodMicrotec will be able to pay the installments from free available cash.


RoodMicrotec N.V.	ANNUAL REPORT 2022

1 June - December

2 January - May

C.COMPANY FINANCIAL STATEMENTS

Company Statement of Financial Position

(Before appropriation of result)

As of December 31


(x EUR 1,000)	Notes	2022	2021

ASSETS
Property, plant and equipment		2	2
Right-of-use assets		26	48
Investments in group companies	1	—	—
Loans to group companies	2	4,792	2,404
Non-current assets		4,820	2,454

Loans to group companies	2	981	1,461
Trade and other receivables		45	42
Cash and cash equivalents		2,912	1,918
Current assets		3,938	3,421

Total assets		8,758	5,875

EQUITY AND LIABILITIES
Issued share capital		8,259	8,259
Share premium		20,725	20,725
Revaluation reserve		1,759	1,853
Other reserves		-27,267	-29,183
Unappropriated result		2,380	1,435
Shareholders’ equity	3	5,856	3,089

Loans and borrowings	4	2,525	2,470
Lease liabilities		4	24
Deferred tax liabilities	5	14	19
Provisions		104	32
Non-current liabilities		2,647	2,545

Current lease liabilities		22	24
Trade and other payables	6	233	217
Current liabilities		255	241

Total equity and liabilities		8,758	5,875

The numbers following the various items refer to the notes on pages 102 to 109.


ANNUAL REPORT 2022	RoodMicrotec N.V.

100

Company Statement of Profit and Loss


(x EUR 1,000)	Notes	2022	2021

Net sales	7	563	524
Total income		563	524

Other external expenses	8	-468	-536
Personnel expenses	9	-373	-286
Depreciation and amortization	10	-25	-25
Total expenses		-866	-847

Operating profit (loss)		-303	-323

Interest income and similar income	11	516	522
Interest expenses and similar charges	11	-187	-186
	11	329	336

Profit (loss) before taxes		26	13

Taxes	12	5	2
Share in results from participating interests, after taxes	13	2,349	1,420

Net profit (loss)		2,380	1,435

The numbers following the various items refer to the notes on pages 102 to 109.


RoodMicrotec N.V.	ANNUAL REPORT 2022

101

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 60 to 64.

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 (‘EUR’) and all values are rounded to the nearest

thousand, 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.


ANNUAL REPORT 2022	RoodMicrotec N.V.

102

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.

Cash and cash equivalents

Cash and cash equivalents in the Company’s financial position consists of bank balances and cash and are free at

the company’s disposal. Cash and cash equivalents that are not readily available to the Company within 12

months are presented under financial assets.

Corporate income tax

The Company is the head of the fiscal unity. The Company recognizes the portion of corporate income tax that it

would owe as an independent tax payer, taking into account the allocation of the advantages of the fiscal unity.

Settlement within the fiscal unity between the Company and its subsidiaries takes place through current account

positions.


RoodMicrotec N.V.	ANNUAL REPORT 2022

103

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)	2022		2021

Balance at January 1		-4,846		-6,414
Result of group companies		2,349		1,420
Gain on redemption perpetual bond		71		—
Remeasurement of defined benefit obligations		445		209
Tax implication remeasurement of defined benefit obligations		-129		-61
		-2,110		-4,846

Provision group companies
Provision at January 1	4,846		6,414
Changes	-2,736		-1,568
Provision at December 31		2,110		4,846

Balance at December 31		—		—

The Company is the holding company and has the following financial interests:


Consolidated participating interests	Legal address	Share in issued capital %

RoodMicrotec GmbH	Oettinger Strasse 6, 86720 Nördlingen, Germany	100%
RoodMicrotec International B.V. (dormant subsidiary)	Dokter van Deenweg 58, 8025 BC Zwolle, The Netherlands	100%

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%, a EUR 4,188,000 loan with an interest rate of 5.1%. In addition, in 2021 receivables from

group companies have been settled for the amount of EUR 4,188,000. In 2022 a new loan is provided of

EUR 705,000 with an interest rate of 5.85%.


ANNUAL REPORT 2022	RoodMicrotec N.V.

104

Movements in this item were as follows:


(x EUR 1,000)		2022		2021

Balance at January 1		8,711		9,737
Loans provided		705		4,188
Redeemed loans		-1,521		-1,924
Other additions (repayments)		-12		898
Settlements		—		-4,188
Balance at December 31		7,883		8,711

Provision group companies
Provision at January 1	-4,846		-6,414
Changes	2,736		1,568
Provision at December 31		-2,110		-4,846

Transfer of current portion to current assets		-981		-1,461

Total non-current loans to group companies at December 31		4,792		2,404

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 -2,110,000 as per December 31, 2022 (December 31, 2021:

EUR -4,846,000). The Company is joint and severally liable for debts arising from legal acts of this subsidiary.


RoodMicrotec N.V.	ANNUAL REPORT 2022

105

3.Shareholders’ equity


(x EUR 1,000)	Issued share capital	Share premium	Revaluation reserve	Other reserves	Unappro- priated result	Total

Balance at January 1, 2021	8,239	20,709	1,985	-29,318	-265	1,350
Issuance of shares	—	—	—	—	—	—
Issuance of stock warrants	—	—	—	120	—	120
Share options exercised	20	16	—	—	—	36
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	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	15	1,700	1,583
Balance at December 31, 2021	8,259	20,725	1,853	-29,183	1,435	3,089

Balance at January 1, 2022	8,259	20,725	1,853	-29,183	1,435	3,089
Issuance of shares	—	—	—	—	—	—
Transactions with equity holders	8,259	20,725	1,853	-29,183	1,435	3,089
Appropriation of result	—	—	—	1,435	-1,435	—
Net profit (loss)	—	—	—	—	2,380	2,380
Gain on redemption perpetual bond	—	—	—	71	—	71
Other comprehensive income:
Remeasurement of defined benefit obligation	—	—	—	316	—	316
Revaluation of land and buildings	—	—	-94	94	—	—
Total comprehensive income for the year	—	—	-94	1,916	945	2,767
Balance at December 31, 2022	8,259	20,725	1,759	-27,267	2,380	5,856

Authorized share capital

At December 31, 2022 the authorized share capital comprised 100,000,000 shares (2021: 100,000,000). The

shares have a nominal value of EUR 0.11 each.

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.

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 2021

The financial statements for the reporting year 2021 have been adopted by the General Meeting on June 9, 2022.

The General Meeting has adopted the appropriation of the net profit as proposed by the Board of Management and

approved by the Supervisory Board.


ANNUAL REPORT 2022	RoodMicrotec N.V.

106

4.Loans and borrowings

This note provides information on the contractual terms of the Company’s interest-bearing loans and borrowings.


As of December 31
(x EUR 1,000)	2022	2021

Loan	2,525	2,470
Total loans and borrowings	2,525	2,470
Transfer of current portion to current liabilities	—	—

Total non-current loans and borrowings	2,525	2,470

Debt repayment schedule as per December 31, 2022


(x EUR 1,000)	Total	Current liabilities	Non- current liabilities	1 to 2 years	2 to 5 years	More 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, 2022


(x EUR 1,000)	Total	Current liabilities	Non- current liabilities	1 to 2 years	2 to 5 years	More than 5 years

Loan	157	126	31	31	—	—
Total	157	126	31	31	—	—

For further details, reference is made to note 17 ‘Loans and borrowings’ of the consolidated financial statements.

5.Deferred tax liabilities

As a result of the valuation of the loan a provision for deferred tax liabilities has been recognized amounting to

19% (2021: 15%) of the difference between the fiscal book value and carrying amount.

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 2022 the available tax losses were not recognized (2021: EUR nil). These

unrecognized tax losses are in total approximately EUR 0.9 million as per December 31, 2022 (2021: 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 11 ‘Deferred tax assets and

liabilities’ of the consolidated financial statements.

6.Trade and other payables


As of December 31
(x EUR 1,000)	2022	2021

Suppliers and trade creditors	44	73
Other payables	189	144

Total	233	217

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.


RoodMicrotec N.V.	ANNUAL REPORT 2022

107

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)	2022	2021

Housing and equipment costs	13	17
Selling and administrative expenses	455	519

Total	468	536

9.Personnel expenses


(x EUR 1,000)	2022	2021

Salaries	351	265
Social securities	22	21

Total	373	286

Remuneration of and share ownership by the Board of Management and Supervisory Board

Personnel expenses in 2022 included an expense of approximately EUR 154,000 (2021: EUR 74,000) for the

Board of Management’s bonus scheme.

The Company has an average of 2 employees in 2022 (2021: 2), all of whom are based in the Netherlands.

The information as referred to in section 383, subsection 1, of Book 2 of the Dutch Civil Code is disclosed in note

22 ‘Related parties’ of the consolidated financial statements.

10.Depreciation and amortization


(x EUR 1,000)	2022	2021

Right-of-use assets	25	24
Other fixed assets	—	1

Total	25	25

11.Financial income and expenses


(x EUR 1,000)	2022	2021

Interest income:
–intercompany loan	516	522
Interest expenses:
–loan	-181	-135
–bond loan	—	-49
–other financial expenses	-6	-2

Total	329	336

The interest expenses in 2022 include amortization costs amounting to EUR 55,000 (2021: EUR 50,000), which

relate to discount and issuance cost of loans provided.


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12.Income taxes


(x EUR 1,000)	2022	20211

Current tax expense (income):
Current year	12	2

Deferred tax expense (income):
Change in tax rate	3	—
Recognition of previously unrecognized tax losses	-12	-2
Origination and reversal of temporary differences	-8	-2

Tax expense (income) recognized in the company statement of Profit and Loss	-5	-2

13.Share of result of participating interests after taxes


(x EUR 1,000)	2022	2021

Share of result of participating interests after taxes:
–RoodMicrotec GmbH	2,349	1,420
–RoodMicrotec International B.V. (dormant subsidiary)	—	—

Total	2,349	1,420

14.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 8.4 million

(2021: EUR 6.3 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.

15.Events after balance sheet date

For information on the events after balance sheet date, reference is made to note 23 ‘Events after balance sheet

date’ of the consolidated financial statements.

Deventer, April 19, 2023

Board of ManagementSupervisory Board

O.M. Sallenhag, CEOR.J.W.M. van der Linden, Chairman

A. Ladega, CFOM.E.T. Verstraeten


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1 Adjusted for comparison purposes

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.


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To: the General Meeting of Shareholders and the Supervisory Board of RoodMicrotec N.V.

Report on the audit of the financial statements 2022 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 2022 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 2022 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 2022 of RoodMicrotec N.V. (‘the Company’) based in

Deventer, the Netherlands. 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 2022;

2.the following consolidated statements for 2022: the statement of profit or loss, the

statement of comprehensive income, the statement of 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 at 31 December 2022;

2.the company statement of profit and loss for 2022; 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’).

We designed our audit procedures in the context of our audit of the financial statements as a

whole and in forming our opinion thereon. The information in respect of going concern, fraud

and non-compliance with laws and regulations, climate and the key audit matters was

addressed in this context, and we do not provide a separate opinion or conclusion on these

matters.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Information in support of our opinion

Summary


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Materiality

Based on our professional judgement we determined the materiality for the financial statements

as a whole at EUR 135,000 (2021: EUR 120,000) The materiality is determined with reference

to net sales (0.82%). 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 as a result of the higher net sales in 2022. 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 6,750 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. Furthermore, substantially all of the Company’s

business activities take place in this German component.

We have:

–performed audit procedures for significant balances recorded in RoodMicrotec N.V., the

parent company;

–made use of the work of KPMG Germany to perform the audit of the complete reporting

package of RoodMicrotec GmbH.

We have 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.

We scheduled (virtual) meetings with the local component auditor and local component

management in Germany to review the component auditor’s documentation and meet with local

management. We performed a file-review via remote access and (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

and with local management.

As the remaining component (RoodMicrotec International B.V.) is a dormant entity our

procedures on this component were 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.


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113

The audit coverage as stated in the section summary can be further specified as follows:

Audit response to the risk of fraud and non-compliance with laws and regulations

In chapter ‘Risk and Risk Management’ 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 and the Supervisory Board reflects on this.

As part of our audit, we have gained insights into RoodMicrotec N.V. and its business

environment, and assessed the design and implementation of RoodMicrotec N.V.’s risk

management in relation to fraud and non-compliance. Our procedures included, among other

things, assessing the Company’s code of conduct, whistle-blowing 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 RoodMicrotec N.V., 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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114

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, such as processes related to journal entries.

–We performed a data analysis of high-risk journal entries related and evaluated key

estimates and judgment for bias by the Company’s management, such as estimates

relating to impairment testing of goodwill and the valuation of deferred tax assets, 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, including testing of transactions

back to source information.

–We incorporated elements of unpredictability in our audit by reviewing the expense reports

of the Board of Management in the Netherlands. Furthermore, we revised our selection

methodology with regard to the audit procedures performed on the sales transactions at

year-end.

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.

Responses:

–In addition to the procedures already mentioned above with respect to management

override of controls, we evaluated the design and implementation of internal controls that

mitigate fraud risks with respect to revenue.

–To assess whether revenue was recognized in the appropriate period, for selected sales

transactions recognized before year-end we inspected agreements with customers and

shipping documents.

–Further, we inspected credit notes subsequent to year-end to assess whether revenue was

recognized in the correct reporting period.

–We also incorporated an element of unpredictability as we revised our selection

methodology with regard to the audit procedures performed on the sales transactions at

year-end.


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115

Our evaluation of procedures performed related to fraud did not result in a key audit matter.

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 going concern

The Board of Management has performed its going concern assessment and has not identified

any going concern risks. To assess the Board of Management’s assessment, we have

performed, inter alia, 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 became aware as a result in our audit; and

–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 going concern risks.

The outcome of our risk assessment procedures did not give reason to perform additional audit

procedures on the Board of Management’s going concern assessment.

Audit response to climate-related risks

The Company has set out its analysis relating to climate change in the chapter ‘risk and risk

management’ of the annual report.

The Board of Management has analyzed, against the background of the Company’s business

and operations, at a high level how climate-related risks and opportunities could have a

significant impact on the Company’s business or could impose the need to adapt its strategy

and operations. The Board of Management has concluded that currently no material climate

risks at the short term have been identified.

As part of our audit, we performed a risk assessment of the impact of climate-related risk on the

2022 financial statements. In doing this, we made enquiries with the Board of Management and

the Supervisory Board and inspected Board-minutes to understand the Board of Management's

assessment against the background of the Company’s business and operations of the potential

impact of climate-related risk and opportunities and the Company's preparedness for this. We

have not identified climate related fraud risk factors that had to be assessed as an event or

condition that would indicate a risk of material misstatement in the financial statements.

Based on our risk assessment procedures performed, we found that climate related risks have

no material impact on the current financial statements under the requirements of IFRS-EU and

have no material impact on our key audit matters.


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Furthermore, we have read the ‘Other information’ with respect to climate-related risks as

included in the annual report and considered the material consistency with the financial

statements, our knowledge obtained through the audit, in particular as described above and our

knowledge obtained otherwise.

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 ‘Valuation of goodwill’ is not

included, as the financial performance has further improved in 2022 and the headroom in prior

year was already sufficient, resulting in a decreased risk profile with regard to the valuation of

goodwill.

Description

At 31 December 2022, an amount of EUR 2.5 million (2021: EUR 2.3 million) was recognized

as tax losses carried forward. These tax losses carried forward are related to the cumulative

net operating losses of RoodMicrotec GmbH of EUR 18.2 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 in 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 should ensure an appropriate valuation of deferred tax

assets and noted that we needed 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.

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 the Board

of Management’s estimates.

When auditing the deferred tax assets we used among others the knowledge and experience of

a tax specialist of KPMG Germany to assess the amount of available net operating losses to be

carried forward and whether the 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 11) to the consolidated financial statements.


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Our observation

Overall we assess the assumptions applied as balanced. The group’s disclosures related to the

deferred tax assets as set forth in Note 11 to the 2022 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.

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

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 are set

out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on

the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).

In our opinion the annual report prepared in XHTML format, including the (partly) marked-up

consolidated financial statements as included in the reporting package by RoodMicrotec N.V.,

complies in all material respects with the RTS on ESEF.

The Board of Management is responsible for preparing the annual report including the financial

statements in accordance with the RTS on ESEF, whereby the Board of Management

combines the various components into one single reporting package.


ANNUAL REPORT 2022	RoodMicrotec N.V.

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Our responsibility is to obtain reasonable assurance for our opinion whether the annual report

in this reporting package complies with the RTS on ESEF. We performed our examination in

accordance with Dutch law, including Dutch Standard 3950N ‘Assurance-opdrachten inzake het

voldoen aan de criteria voor het opstellen van een digitaal

verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for

digital reporting).

Our examination included among others:

–obtaining an understanding of the entity's financial reporting process, including the

preparation of the reporting package;

–identifying and assessing the risks that the annual report does not comply in all material

respects with the RTS on ESEF and designing and performing further assurance

procedures responsive to those risks to provide a basis for our opinion, including:

–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 mark-ups have been applied and whether these

are in accordance with the RTS on ESEF.

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.


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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 the ‘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, 19 April 2023

KPMG Accountants N.V.

M.J.A Verhoeven RA


ANNUAL REPORT 2022	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

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


RoodMicrotec N.V.	ANNUAL REPORT 2022

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ABBREVIATIONS USED


Abbreviation	Description
AFM	Netherlands Authority for the Financial Markets
AGM	Annual General Meeting of Shareholders
AI	Artificial Intelligence
ASIC	Application Specific Integrated Circuit
AQG	Automotive Power Module Qualification Guideline
ATE	Automatic Test Equipment
CAGR	Compound Annual Growth Rate
CGU	Cash-generating Unit
COTS	Components Of The Shelf
COVID-19	Corona Virus Disease 2019
D&I	Diversity & Inclusion
EBIT	Earnings Before Interest and Taxes
EBITDA	Earnings Before Interests, Taxes, Depreciation and Amortization
ECSEL	Electronic Components and Systems for European Leadership
ESEF	European Single Electronic Format
ESG	Environmental, Social and Governance
FTE	Full Time Employee
GaN	Gallium Nitride
HiRel	High Reliability
IC	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
IMF	International Monetary Fund
IP	Intellectual Property
MEMS	Micro-Electro-Mechanical System
OCI	Other Comprehensive Income
OECD	Organization for Economic Co-operation and Development
OEM	Original Equipment Manufacturer
PC	Personal Computer
RF	Radio frequency
RFID	Radio Frequency IDentification
RTS	Regulatory Technical Standards
SCM	Supply Chain Management
SIA	Semiconductor Industry Association
UWB	Ultra-Wideband
V2I	Vehicle-to-Infrastructure
V2V	Vehicle-to-Vehicle
V2X	Vehicle-to-Everything
VR	Virtual Reality
WACC	Weighted Average Cost of Capital
Wft	Financial Supervision Act
WLCSP	Wafer Level Chip Scale Package
WSTS	World Semiconductor Trade Statistics
XBRL	eXtensible Business Reporting Language


ANNUAL REPORT 2022	RoodMicrotec N.V.

122


RoodMicrotec Overview			3

Message from the CEO	Page	3
Profile RoodMicrotec	Page	4
RoodMicrotec performance indicators	Page	7
RoodMicrotec key figures + five-year summary	Page	8
Shares / shareholder information	Page	9

Report of the Board of Management			11

Members of the Board of Management	Page	11
Market & Trends	Page	12
Vision and mission	Page	17
Strategy	Page	17
SWOT analysis	Page	18
Operational units	Page	19
Financial results	Page	24
Main developments 2022	Page	27
Focus and actions 2023	Page	30
Outlook	Page	30

Supervision and Governance			31

Members of the Supervisory Board	Page	31
Report of the Supervisory Board	Page	32
Risk and risk management	Page	36
Corporate social responsibility	Page	40
Diversity & Inclusion Policy	Page	46
Corporate governance	Page	47
Remuneration report	Page	54
Management statement	Page	59

Financial Statements			60

A.Consolidated financial statements	Page	60
B.Notes to the consolidated financial statements	Page	65
Events after balance sheet date	Page	99
C.Company financial statements	Page	100
D.Notes to the Company financial statements	Page	102

Other Information			110

Profit appropriation	Page	110
Independent auditor’s report	Page	111
Group structure	Page	121
Addresses and personal details	Page	121
Abbreviations used	Page	122