docdata n.v. 2007 annual report - jaarverslag.com · the netherlands telephone +31 416 63 11 00 fax...

docdata annual report 2007 73

2007 Financial StatementsDOCDATA N.V. financial

statements


enabling successdocdata e•success


Industrial Automation Integratorsbusiness solutions through laser technology

IAI


enabling success

2007 Annual Report

docdata annual report 20072

DocData N.V.

Energieweg 25145 NW WaalwijkThe Netherlands

Telephone +31 416 63 11 00Fax +31 416 63 11 11

Website: www.docdata.comCorporate website: www.docdatanv.comE-mail: [email protected]

Trade register number 16081306 at the Dutch Chamber of Commerce in Tilburg.DOCDATA N.V. is listed at the stock market of NYSE Euronext Amsterdam under ticker symbol DOCD.

Only the Dutch text is legally binding, as it represents the authentic text. The English Annual Report is a translation for convenience purposes.


Contents

Preface CEO 4 Mission 6Vision 7Legal Structure as at March 27, 2008 9The Share 11The Supervisory Board 22Report of the Supervisory Board 23The Management 28Report of the Management Board 29Report of technology company Industrial Automation Integrators (IAI) 51Profile of Internet service company docdata 59

2007 Financial Statements 73

consolidated Financial Statement Docdata Consolidated Income Statement 74Consolidated Statement of recognised Income and Expense 75Consolidated Balance Sheet 77Consolidated Statement of Cash Flows 78Notes to the Consolidated Financial Statements 79Index of Notes 87

company Financial Statements Docdata N.V. Company Balance Sheet DOCdata N.V. 113Company Income Statement DOCdata N.V. 114Notes to the Company Financial Statement 115

Other Information

Auditors’ Report 117Statutory Regulations concerning Profit Appropriation 118Appropriation of Result 118Holdings in DOCdata N.V. 119Important dates 119Summary Financial Information 121Key Figures and Ratios 122Publications in 2007 and 2008 123


Preface CEO

Waalwijk, March 27, 2008

Dear shareholders, customers, colleagues and other readers,

2007 was a dynamic and challenging year in which we have made good progress with the implementation of our ‘Internet service strategy’ as well as on the development of our technology road map. After the development in 2005 of the strategy ‘Vision 2010: Gear to Growth’, in 2006 and 2007 we transformed our production company into the progressive Internet service company docdata. We added new services and invested in the quality of our services and staff. The country organisation was replaced by a divisional structure. In order to drive this metamorphosis home, we have launched a new corporate identity in early 2008, marking the successful conclusion of the overhaul of the Media Group and the e-Solutions Group. Our four specialised service concepts: commerce, payments, fulfilment and media, offer state-of-the-art solutions. We also aim to be market leader in certain sectors across the various services, and roll out our services geographically over the next few years. Technology company Industrial Automation Integrators (IAI) pursued new challenges in 2007 in fast-growing markets that match our knowledge and expertise. We have decided to pursue the attractive and promising solar energy market. This means that this year we will invest in R&D and possibly in companies in the solar energy sector that possess complementary knowledge and expertise.


Revenue increased by 18% to € 70.2 million in the past year, while net profit rose to € 3.4 million (2006: € 0.1 million). The e-Solutions Group, the driving force behind our Internet service strategy, more than doubled its revenue to € 29 million, which amply offsets the (planned) decline in offline replication in the Media Group. This trend is set to continue in the next few years. I am proud of what we have achieved in the past few years, and I am convinced that we have created a good basis for further growth of revenue and results. Therefore I have great confidence in our future.

Michiel Alting von Geusau, ChiefExecutiveOfficerDOCDATAN.V.

Our core values are:

•Customerandserviceorientation•Flexibility•Entrepreneurship•Innovation


Enabling success !

customers Shareholders Employees Suppliers

Our Internet service company docdata offers unique and reliable solutions,enabling customers to be successful in Internet business. It derives its strength from its four specialities that jointly provide a unique total concept, while supplying their services separately.

Our technology company Industrial Automation Integrators (IAI) offers customers uniquely distinctive top-quality (manufacturing) technologies.

‘Enabling success’ will also benefit our shareholders and employees. For our shareholders, this resulted in dividend distributions of over € 1.4 million and a € 2 million share buyback. We aim to continue this trend in 2008. We provide our employees with a positive and challenging work environment with ample opportunities for personal development and initiative.

DOCDATA N.V. has been listed on NYSE Euronext Amsterdam since 1997 and consists of two organisations, Internet service company docdata and technology company Industrial automation Integrators (IaI).

In 2007, DOCDATA N.V. realised a revenue of € 70.2 million and a net profit of € 3.4 million with an average workforce of 522.

Mission


Vision 2010: Gear to Growth

Internet service company docdata

Internet has brought about major changes in many industries, including media, social networks, travel, publishing and retail. Internet is no longer a niche technology, and the usage of the Internet continues to expand. Internet service company docdata intends to play a leading role as a European supplier of transaction-related Internet services, providing customers with:

• traceability: contacted easily anywhere in the world;• availability: offering 24/7 online access;• reliability: safe and accurate processing of every payment;• speed: next-day home delivery if ordered before 9 p.m.;• a range of services: multiple payment methods and communication options.

Technology company Industrial Automation Integrators (IAI)

In the market of lasers and optics-based automated production systems, specific and innovative solutions add special value. We exploit this by building high-tech production systems that use laser technology, inkjet printing and chip programming to add specific features to documents such as passports and banknotes, increasing efficiency and reducing costs. We offer our customers:

• high-grade production systems and a reliable organisation;• flexible, fast and accurate technological solutions.

Vision

docdata annual report 20078 docdata annual report 2007 9

Legal Structure as at March 27, 2008


2007 2006 2005 2004 2003

Number of ordinary shares outstanding on December 31 7,308,850 7,308,850 7,308,850 7,308,850 7,308,850Number of ordinary shares held by the Company on December 31 439,689 169,743 316,837 429,842 467,392Number of ordinary shares outstanding on December 31 6,869,161 7,139,107 6,992,013 6,879,008 6,841,458

Total number of share transactions 2,506 3,868 2,119 1,534 986Average price per share € 6.61 € 7.44 € 5.68 € 4.41 € 3.43Annual share turnover / average number of ordinary shares outstanding 20.2% 32.0% 39.4% 20.1% 17.0%

Highest share price € 7.42 € 9.00 € 6.65 € 5.50 € 4.40Lowest share price € 5.99 € 5.88 € 4.75 € 3.00 € 2.06Closing price on December 31 € 6.60 € 6.90 € 5.98 € 5.00 € 3.18

Basic earnings per share € 0.48 € 0.02 € 0.41 € 0.31 € 0.26Dividend per share for the year € 0.25 € 0.20 € 0.40 € 0.35 € 0.25


The DOCDATA N.V. share has been listed on NYSE Euronext Amsterdam since 1997.

Following the effective date December 31, 2006 of the Decision of April 5, 2006 on Article 10 of the European Directive with respect to Public Offerings (‘Besluit van 5 april 2006 tot uitvoering van Artikel 10 van Richtlijn 2004/25/EG van het Europees Parlement en de Raad van de Europese Unie van 21 april 2004 betreffende het openbaar overnamebod’), we disclose the following information on the capital structure of DOCDATA.

The DOCDATA N.V. share

The share has a nominal value of € 0.10 per share.

Liquidity provider

In order to support the trade in the share and to optimise relations with our shareholders, we have appointed SNS Securities N.V. in Amsterdam as liquidity provider.

Investor relations policy

We are committed to open communication with our stakeholders, and conduct an active investor relations policy by means of meetings with the press, analysts and investors. Press releases and presentations can be found under ‘Investors’ on the corporate website www.docdatanv.com.

The Share

2007 2006 2005 2004 2003

Number of ordinary shares outstanding on December 31 7,308,850 7,308,850 7,308,850 7,308,850 7,308,850Number of ordinary shares held by the Company on December 31 439,689 169,743 316,837 429,842 467,392Number of ordinary shares outstanding on December 31 6,869,161 7,139,107 6,992,013 6,879,008 6,841,458

Total number of share transactions 2,506 3,868 2,119 1,534 986Average price per share € 6.61 € 7.44 € 5.68 € 4.41 € 3.43Annual share turnover / average number of ordinary shares outstanding 20.2% 32.0% 39.4% 20.1% 17.0%

Highest share price € 7.42 € 9.00 € 6.65 € 5.50 € 4.40Lowest share price € 5.99 € 5.88 € 4.75 € 3.00 € 2.06Closing price on December 31 € 6.60 € 6.90 € 5.98 € 5.00 € 3.18

Basic earnings per share € 0.48 € 0.02 € 0.41 € 0.31 € 0.26Dividend per share for the year € 0.25 € 0.20 € 0.40 € 0.35 € 0.25


jan

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar


May 20, 2002 EUR 0.13 per share distributed from share premium reserveMay 20, 2003 EUR 0.13 per share distributied from share premium reserveNovember 20, 2003 EUR 0.50 per share repaid share capitalMay 18, 2004 EUR 0.25 per share dividend distribution September 13, 2004 EUR 0.40 per share repaid share capitalMay 17, 2005 EUR 0.35 per share dividend distributionMay 15, 2006 EUR 0.40 per share dividend distributionMay 14, 2007 EUR 0.20 per share dividend distribution

jan

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Date


Disclosure of major holdings

In the context of disclosure of major holdings, the following holdings exceeding 5% of the share capital of the Company have been reported:

Shares Percentage

Kempen Capital Management N.V. 1,825,087 24.97% D. Lindenbergh 741,301 10.14% R.J.H. Kruisinga 694,147 9.50% Decico B.V. 430,990 5.90%DOCDATA N.V. 398,072 5.45%Todlin B.V. 372,672 5.10%Navitas B.V. 370,000 5.06%J. Kluft 367,000 5.02%


Financial agenda

* Publication before trading, followed by comments to press and analysts** Provisional dates

Regulations to prevent insider trading

We have implemented the Rules for reporting and regulation of transactions of the ‘Wet toezicht effectenverkeer (Wte 1995)’. A wide circle of employees and advisers have signed a statement that binds them to comply with the rules as meant in Article 46d of the Wte 1995. The Management Board and the Supervisory Board also comply with the ‘Wet melding zeggenschap en kapitaalbelang in effectenuitgevende instellingen (Wmz 2006)’. The Authority for the Financial Markets (AFM) monitors compliance with this law.

May 8, 2008 Registration date voting right May 15, 2008 Annual General Meeting of Shareholders 2008 May 16, 2008 Cum-date for dividend entitlement of shares May 19, 2008 Ex dividend listing May 21, 2008 Registration date dividend entitlement May 26, 2008 Dividend payment date July 17, 2008 Publication half-year results 2008* February 19, 2009** Publication annual results 2008* May 14, 2009** Annual General Meeting of Shareholders 2009


Dividend policy

We aim for an attractive return for shareholders by pursuing a dividend policy based on a payout ratio of at least 50%. The liquidity and solvency required for the execution of this policy will also be taken into consideration.

The proposal for the appropriation of the result and the 2007 dividend is presented on page 118 of this annual report. At the Annual General Meeting of Shareholders on May 15, 2008 in Waalwijk, we will propose to the shareholders to distribute a dividend of € 0.25 per ordinary share from the net profit for the 2007 financial year. The distribution will be subject to dividend withholding taxes, unless the shareholder can prove he is eligible for the participation exemption. If the Annual General Meeting of Shareholders approves the proposal, in May 2008 a total dividend distribution of € 1.7 million will be made from the 2007 net profit on the ordinary shares held by others than the Company. The dividend distribution will cause a limited decrease of the solvency ratio of the Company.

Authorised share capital

The authorised share capital at December 31, 2007 amounted to € 2,500,000 and consists of 12,500,000 ordinary shares and 12,500,000 preference shares, each with a nominal value of € 0.10. During the Annual General Meeting of Shareholders on May 15, 2008, we will propose to the shareholders to decide to amend the Articles of Association of the Company to cancel preference shares due to the termination of the option agreement with the Stichting Preferente Aandelen DOCdata on March 29, 2007, and the subsequent dissolution of this foundation.


Paid-up and called-up share capital

At December 31, 2007, 7,308,850 ordinary shares were issued. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s assets. In respect of the Company’s own shares that are held by the Group, all rights are suspended until those shares are sold.

Share issue

The General Meeting of Shareholders on May 10, 2007, complying with Article 4 Section 1 of the Articles of Association of the Company, and subject to the approval of the Supervisory Board, resolved to designate the Management Board as the corporate body authorised to resolve to issue shares, including the granting of rights to subscribe for shares, to a total of 730,885 ordinary shares (10% of the total number of ordinary shares were issued on May 10, 2007) for a period of 18 months, i.e. until November 10, 2008. Additionally, the General Meeting of Shareholders on May 10, 2007 resolved to designated the Management Board, in accordance with Article 5 Section 3 of the articles of Association of the Company as the competent body, subject to the approval of the Supervisory Board, to limit or exclude the pre-emptive rights at the issue of ordinary shares for a period of 18 months, i.e. until November 10, 2008.


Share buyback

The General Meeting of Shareholders on May 10, 2007 resolved to grant to the Management Board for a period of 18 months, up to November 10, 2008, the authority to acquire the Company’s own shares, subject to the boundaries stipulated by the law and the Articles of Association, whereby the nominal value of the shares in the share capital held by the Company is limited to 10% of the issued share capital, at a price which is at least the nominal value of the shares and no more than 110% of the opening price quoted for the shares on NYSE Euronext Amsterdam on the date of purchase or, if this price is not available, the last closing quotation of the shares on Euronext Amsterdam prior to the date of purchase.

The Company currently holds 726,173 (9.94% of 7,308,850) ordinary shares issued to hedge the personnel options scheme as well as to fund future acquisitions. Treasury shares are not included in the calculation of basic earnings per share, nor are they entitled to dividend distributions.

Cancellation of shares

We will propose to the Annual General Meeting of Shareholders on May 15, 2008 in Waalwijk to resolve to cancel 308,850 ordinary shares currently held by the Company. As a result, the issued share capital will be reduced from 7,308,850 to 7,000,000 ordinary shares. Provided the shareholders approve the proposal to cancel shares, the number of treasury shares held by the Company will decrease by 308,850 to 417,323 ordinary shares (5.96% of 7,000,000).


The Company will not purchase any more of its own shares until the cancellation of 308,850 ordinary shares proposed to the General Meeting of Shareholders has been effected.

Appointment and dismissal of Managing Directors and Supervisory Directors

The General Meeting of Shareholders is the corporate body authorised to resolve to appoint, suspend and dismiss each member of the Management Board (Article 13 Section 3 of the Articles of Association of the Company) and the Supervisory Board (Article 16 Section 4 of the Articles of Association of the Company).

Amendment of the Articles of Association

In compliance with Article 24 Section 1 of the Articles of Association of the Company, resolutions to amend the Articles of Association and to dissolve the Company can only be adopted by the General Meeting of Shareholders based on a proposal to that effect from the Management Board, subject to prior approval of the Supervisory Board.


Subjects not applicable

The following disclosures required by Article 10 of the European Directive with respect to Public Offerings are not applicable:• limitations by the Company on the transfer of shares;• extraordinary controlling rights of shares and the name of the owner of

these rights;• the control mechanism of an arrangement granting rights to employees to subscribe to or acquire shares in the capital of the Company or a subsidiary, when control cannot be directly exercised by the employees;• limitation of voting rights and of terms for exercising voting rights;• agreements with shareholders, insofar as known to the Company, which

might result in limitations on the transfer of shares or in limitation of voting rights;• major agreements to which the Company is a party, which originate, be changed or dissolved on condition of a change of control over the

Company after a public offer is made, as well as the consequences of such agreements;

• agreements of the Company with a board member or employee which provide for a payment upon termination of the employment in the

context of a public offer.


Jacobus (Koos) A. de Vreeze, Chairman since May 11, 2007 (Dutch national, 1945)- Member of the Supervisory Board since 2002, current term ends in 2009.- Shareholder and Director of Pro-Vision B.V. - Former Chief Executive Officer of Hermans Holding B.V.- Chairman of the Supervisory Board of De Zeilvaart B.V. and of Naupar B.V.

Emiel F. van Veen, Chairman until May 10, 2007 (Dutch national, 1939) - Member of the Supervisory Board since 1998, current term ends in 2009.- Former Vice President of Koninklijke Numico N.V.- Member of the Supervisory Board of Beter Bed Holding N.V. (Vice Chairman),

of Blokker Holding B.V. and of Nabuurs Groep Haps B.V.- Member of the Supervisory Board of the Leiden University Medical Center.

Dirk Lindenbergh (Dutch national, 1949)- Member of the Supervisory Board since 2006, current term ends in 2010.- Shareholder and Director of Blikkenburg B.V.- Member of the Supervisory Board of Midlin N.V. (part of Teslin Capital Management B.V.), of WJM Holding B.V. and of Astor Participaties II B.V.- Supervisor of and member of the investment committee of Schild Holland Fonds N.V.- Secretary of Stichting het Steunfonds, allied to Stichting de Ombudsman.

Johannes V. (Victor) Elsendoorn (Dutch national, 1954)- Member of the Supervisory Board since 2006, current term ends in 2010.- Director Operations TNO Industrie en Techniek.

Koos de Vreeze

Emiel van Veen

Dirk Lindenbergh

Victor Elsendoorn

The Supervisory Board


The Supervisory Board is pleased to note that the transitional years 2006 and 2007 have been completed successfully. In these years, docdata has laid the basis to be an innovative Internet service company. Technology company IAI in 2007 searched for new growth markets to exploit its knowledge and expertise profitably. A choice was made for the solar energy market that is expected to show considerable growth in the coming years.

We believe that the Company is now ready for the future. The Supervisory Board would like to thank the Management Board and all employees for their efforts and dedication.

Annual financial statements, dividend and discharge

The financial statements for 2007 as prepared by the Management Board have been audited by KPMG Accountants N.V. The financial statements were discussed by the Audit Committee and the Supervisory Board during the annual meeting with the external auditor and the Management Board. We have approved the 2007 financial statements, and we propose to the General Meeting of Shareholders:• to adopt the 2007 financial statements;• to adopt the dividend proposal of € 0.25 per share;• to discharge the Management Board in respect of its management of the

Company; • to discharge the Supervisory Board for its supervision.

Meetings of the Supervisory Board

The Supervisory Board held eight meetings during 2007 (seven regular meetings and one telephone meeting), of which one meeting was held in the absence of the Management Board.

Report of the Supervisory Board


Only once was the Supervisory Board not complete, when Mr. Van Veen could not attend as the date of the meeting had been moved forward. However, Mr. Van Veen was consulted by telephone during that meeting. Additionally, there were various contacts throughout the year between the individual members of the Board and/or the Management Board.

Topics discussed during the meetings included the operational and financial objectives put to the Supervisory Board for approval, as well as reports, budgets and the development of the results from the Company’s various activities. Special attention was devoted to:• progress of the strategy ‘Vision 2010: Gear to Growth’;• the investigation of attractive growth markets for IAI;• analysis and approval of the various acquisitions.

During a meeting in the absence of the Management Board, we deliberated on the composition and performance of our Board and of the individual Supervisory Directors, as well as on the Board’s profile. We also discussed the performance of the Management Board and of the individual Directors and the remuneration policy. The Board once again notes that there is a good working relationship between the Supervisory Board and the Management Board.

Meetings of the Audit Committee

The Audit Committee met twice in 2007 chaired by Mr. Elsendoorn in the presence of the Chief Financial Officer, the Group Controller and the external auditor of the Company. Besides the Chairman, Mr. Van Veen and Mr. Lindenbergh attended as members of the Audit Committee.


In 2007, the Audit Committee discussed the following key subjects and reported on them to the Supervisory Board:• the method of preparation and the composition of the 2006 financial statements and the 2007 half-year-results;• the findings of the external auditor with respect to the audit, the auditor’s

report and the follow-up of its recommendations;• the implementation status and functioning of the internal risk management

and control system, including the measures implemented internally to identify, prevent and report on possible fraud;

• the internal rules and administrative guidelines (Company Manual);• audit and consultancy costs, including the assignment of the external

auditor to audit the financial statements, and the independence of the external auditor.

Meetings of the Remuneration Committee

The Remuneration Committee met twice in 2007, chaired by Mr. Lindenbergh. The Management Board did not attend these meetings. In addition, the Chairman consulted the two other members, Mr. De Vreeze and Mr. Van Veen, on several occasions to prepare for the formal meetings.

Information on the Management Board’s remuneration is included in the 2007 Remuneration Report, prepared by the Remuneration Committee, which can be inspected on the website of the Company under the heading Corporate Governance. Furthermore, the notes to the 2007 consolidated financial statements contain extensive information on the remuneration of the Management Board and the Supervisory Board.


Composition and remuneration of the Supervisory Board

The General Meeting of Shareholders appoints the members of the Supervisory Board, striving for an appropriate combination of knowledge and experience amongst its members in relation to the activities of the Company. Consequently, the Board aims for an appropriate level of market knowledge and experience in manufacturing, financial, fiscal, economical, technical, social and legal aspects. The Supervisory Board has created two committees, the Audit Committee and the Remuneration Committee.

The General Meeting of Shareholders determines the remuneration of the Chairman and the members of the Supervisory Board. On May 16, 2002 the General Meeting of Shareholders determined the annual remuneration for a period of six years, starting with the 2002 financial year up till and including 2007, at € 14,000 for the members of the Supervisory Board and € 16,500 for the Chairman. The Chairmen of the Audit Committee and the Remuneration Committee are not entitled to additional remuneration.

During the Annual General Meeting of Shareholders on May 15, 2008, we will put a new proposal to the shareholders for a subsequent six-year period, starting with the 2008 financial year.


Corporate Governance

On page 44, the views of the management with respect to the Dutch Corporate Governance Code (‘Tabaksblat Code’) are set out. This topic is placed on the agenda of the General Meeting of Shareholders every year. The Supervisory Board and the Management Board have not changed their views with respect to the Code in the past year, except for the Supervisory Board’s intention to adjust the existing employment contracts of the Management Board in 2008 to the relevant best-practice provisions of the Code, of which the 2007 Remuneration Report provides further details.

In compliance with best-practice provision III.2.2 of the Dutch Corporate Governance Code, all Supervisory Directors, except Mr. Lindenbergh, are independent. Mr. Lindenbergh has a 10.14% interest in DOCDATA N.V. No share options have been granted to the members of the Supervisory Board.


The Supervisory Board,

J.A. de VreezeE.F. van VeenJ.V. ElsendoornD. Lindenbergh


The Management Board

Michiel F.P.M. Alting von Geusau (Dutch national, 1964)- Chief Executive Officer (CEO)- Joined DOCDATA N.V. on October 19, 1998- Appointed as CEO for an indefinite period on March 1, 2002; prior to that, he held the position of Finance Director up to May 18, 1999, and subsequently the position of CFO

Marc E.T. Verstraeten (Dutch national, 1966)- Chief Financial Officer (CFO)- Joined DOCDATA N.V. on February 1, 2001- Appointed as CFO for a four-year term on May 11, 2006; previously, he held the position of Corporate Controller up to March 1, 2002, and subsequently the position of Finance Director

Michiel Alting von Geusau

Marc Verstraeten


General

In 2007, our second transitional year, we realised a 25% higher gross profit of € 17.7 million, compared to € 14.1 million in 2006. The development of the gross profit margin over the past few years confirms that the new strategy is bearing fruit.

In 2007, an operating income before financing income (EBIT) from continued operations of € 3.7 million was realised. The decrease compared to 2006 (€ 4.6 million) was largely due to additional costs in 2007 incurred for the successful implementation of the new strategy. Furthermore, some orders for IAI could not yet be delivered in 2007. Profit in 2007 increased to € 3.4 million, mainly due to the fact that in 2006 (€ 0.1 million profit) a loss after taxes for discontinued operations was incurred as a result of the decision made in 2006 to terminate the Media Group’s activities in France.

We achieved a cash flow from operating activities of € 8.3 million in 2007. The cash surplus position decreased with € 0.6 million to € 3.5 million at December 31, 2007 (December 31, 2006: cash surplus of € 4.1 million). Of these resources, € 8.8 million was used in 2007 to fund:• the acquisition of (additional) shareholdings: 40% in Triple Deal B.V., 9.6% in Braywood Holdings Limited and 100% in Contributie Services

B.V. (€ 2.2 million in total);• investments in tangible and intangible fixed assets (€ 3.2 million);• dividend distribution for the 2006 financial year (€ 1.4 million);• share buyback (€ 2.0 million).

With a solvency ratio of 52.3% at year-end 2007 (year-end 2006: 48.8%), we have maintained the Company’s strong financial position.

Report of the Management Board


Overview by division

Internet service company docdata

e-SolutionsGroupThe e-Solutions Group realised strong growth, both autonomously and through acquisitions. In the past few years, a total Internet service concept has been rolled out in the Benelux countries, the United Kingdom and Germany, providing a solid basis for further growth. The 2007 results were impacted by investments in people, IT systems and other resources to enable future growth.

MediaGroupThe year 2007 was marked by ongoing highly competitive market conditions with the CD and DVD markets continuing their downward trend. As a result, both revenue and results of the Media Group decreased compared to 2006, in particular driven by disappointing results in Germany. Due to ongoing focus on cost reductions and efficiency improvement, the Media Group has succeeded in improving its gross profit to 15.9% of revenue. Both in the United Kingdom and in the Benelux countries the year ended with improved results.

As per January 1, 2008, we merged the Media Group with the e-Solutions Group into the Internet service company docdata, which is comprised of four divisions: docdata commerce, docdata payments, docdata fulfilment and docdata media.


technology company Industrial automation Integrators (IaI)

In 2007, revenue of IAI was virtually unchanged from 2006; the operating income decreased due to a different order mix. In 2007, by far the largest share of revenue and operating income was generated by delivery of systems for the security market, in particular the passports and bank notes segment, as well as from royalties from security features patented by IAI. In partnership with KBA-GIORI and Orell Füssli, a system for applying MicroPerf® to bank notes was supplied to the Russian government printing office. A passport project in Ukraine, which had been suspended for a long time due to political developments, could be continued in 2007. This project comprises the delivery of BookMaster One systems that personalise a passport booklet in one single passage through the system.


Financial development

Revenue

• Revenue of the Media Group decreased by € 4.8 million in 2007 (13%) due to a decrease in revenue in Germany (€ 2.8 million), in the United Kingdom (€ 1.2 million including exchange rate effects) and in the

Netherlands (€ 0.8 million).• The e-Solutions Group’s revenue more than doubled in 2007, rising € 15.5 million (113%). This was due to higher revenue in the Netherlands

(€ 6.9 million due to strong autonomous growth of the Waalwijk activities, the effect of the consolidation of Triple Deal as from May 25, 2007 and contributions to revenue by DOCdata e-Commerce Solutions for a full year in 2007), in the United Kingdom (€ 5.4 million due to a full year’s

contributions to revenue in 2007 by Braywood) and in Germany (€ 3.2 million, predominantly from content projects).• Industrial Automation Integrators’ revenue of € 8.6 million in 2007 was

comparable to 2006.

(x € 1,000 – except for percentage figures) 2007 2006 € % € % Media Group 32,315 46.0 37,096 62.2e-Solutions Group 29,275 41.7 13,749 23.1Industrial Automation Integrators 8,630 12.3 8,738 14.7

Total 70,220 100.0 59,583 100.0


Gross profit

• The increase of the Media Group’s gross profit margin to 15.9% shows that the lower average sales price of CDs and DVDs in 2007 was once again offset by realised production cost savings.

• The gross profit margin of the e-Solutions Group in 2007 decreased to 30.4% due to a changed mix of e-Solutions activities, predominantly as a result of the takeover of Braywood in November 2006 and the consolida-tion of Triple Deal as from May 25, 2007.

• The Industrial Automation Integrators’ gross profit margin decreased, mainly as a result of the changed sales mix of the security systems

delivered in 2007 and 2006, and by a changed mix of other income categories in the prior year.


Total 17,699 100.0 14,124 100.0

(Gross profit in percentage of revenue) % % Media Group 15.9 15.5e-Solutions Group 30.4 32.6Industrial Automation Integrators 42.5 44.7

Total 25.2 23.7


Total 70,220 100.0 59,583 100.0


Operating profit before financing income and expenses (EBIT)

• The decrease of the operating income of the Media Group was the com-bined result of a decrease of gross profit of € 0.6 million, a decrease of selling and administrative expenses of € 0.5 million (predominantly as

a result of lower depreciation and lower personnel expenses) and a € 0.2 million decrease of other operating income.• The decrease of the operating income of the e-Solutions Group was

the combined result of a higher gross profit (€ 4.4 million), higher other operating expenses (€ 0.2 million) and higher selling and administrative expenses (€ 4.3 million), mainly due to the e-Solutions Group’s newly consolidated subsidiaries (Braywood, Triple Deal, DOCdata E-commerce Fulfillment Germany and DOCdata e-Commerce Solutions), which were

(x € 1,000 – except for percentage figures) 2007 2006 € €

Media Group 526 826e-Solutions Group 907 980Industrial Automation Integrators 2,306 2,842

Total 3,739 4,648

(Operating profit margin in percentage of revenue) % % Media Group 1.6 2.2e-Solutions Group 3.1 7.1Industrial Automation Integrators 26.7 32.5

Total 5.3 7.8


(x € 1,000 – except for percentage figures) 2007 2006 € €

Media Group 526 826e-Solutions Group 907 980Industrial Automation Integrators 2,306 2,842

Total 3,739 4,648

(Operating profit margin in percentage of revenue) % % Media Group 1.6 2.2e-Solutions Group 3.1 7.1Industrial Automation Integrators 26.7 32.5

Total 5.3 7.8

included in the 2006 consolidated figures only for a part of the second half of 2006.

• For these subsidiaries, the implementation of the new strategy ‘Vision 2010: Gear to Growth’ resulted in additional costs in 2007 predominantly

related to investments in personnel, organisational improvements, deve-lopment of IT solutions and the costs of design and implementation of e-Solutions for new customers. The lower profit margin of the operating income was mainly due to higher selling and administrative expenses incurred in raising the activity level, which required higher personnel and organisational costs in all countries where the e-Solutions Group currently operates (the Netherlands, Germany and the United Kingdom).

• The lower operating income of Industrial Automation Integrators was the combined effect of a € 0.2 million decrease of gross profit and a

€ 0.3 million increase of administrative expenses. The lower profit margin on the operating income was caused by a changed sales mix, with a

lower gross profit margin on revenue in 2007 in conjunction with higher administrative expenses in 2007, which were mainly due to higher personnel costs and higher consultancy costs incurred in the context of the strategic search for new growth markets.

Financing income and expenses

Net financing expenses in 2007 amounted to € 0.3 million (2006: € 0.1 million net financing income). The almost € 0.5 million decrease was mainly due to higher interest expenses on the financing of the Braywood takeover throughout 2007. Furthermore, both financing income and expenses rose in 2007 in relation to the new consolidated subsidiaries of the e-Solutions Group (Braywood, Triple Deal, DOCdata E-commerce Fulfillment Germany and DOCdata e-Commerce Solutions). A € 0.1 million exchange rate loss was recognised in 2007 as the euro gained on the pound sterling.


Income tax expense

The effective tax rate in 2007 amounted to 19.4%, with a tax charge of € 0.7 million a profit from continued operations before taxes of € 3.7 million. In 2006, profit from continued operations before taxes amounted to € 4.7 million, with a tax charge of € 1.7 million (effective tax rate: 36.3%). Investments and liquidity

In 2007, investments were made totalling € 5.4 million, of which: • € 2.4 million in tangible fixed assets, predominantly in information technology and warehouse equipment;• € 1.8 million for the acquisition of a 40% additional shareholding in Triple Deal B.V., taking the total interest to 70%;• € 0.8 million in intangible assets, mainly IT development costs;• € 0.3 million for the acquisition of a 9.6% additional shareholding in Braywood Holdings Limited, taking the total interest to 85.6%;• € 0.1 million for the total acquisition of Contributie Services B.V. by Triple Deal B.V.

These investments were financed from the net cash flow from operating activities of € 8.3 million in 2007 (2006: € 3.0 million), including total depreciation expenses of € 3.6 million (2006: € 5.1 million, including depreciation expenses of DOCdata France). The cash surplus in 2007 decreased by € 0.6 million from € 4.1 million at December 31, 2006 to € 3.5 million at December 31, 2007. Furthermore, in 2007 an amount of € 0.4 million was withdrawn from the Group’s credit facilities, and repayments totalling € 0.3 million were made on other loans.


Sustainability and responsibility

Good corporate citizenship

Corporate citizenship draws attention to social, ethical and environmental aspects. We believe that cooperating and entering into a dialogue with all stakeholders - customers, shareholders, employees and business partners - can contribute to lasting change. In this context, one of the challenges is to combine the necessary financial health of the Company with our responsibility to society in general and to the economic interests of our stakeholders. This means that we aim to:• be transparent in our activities and solutions;• be a socially responsible supplier;• be an attractive employer;• make positive contributions to the community.

We offer our employees the opportunity to financially support clubs and associations in which they are active by means of sponsorship, provided it benefits local social aspects.

Environment

We closely follow new insights, changing social norms and environmental legislation. In our own offices, we comply at least with local regulations in the areas of safety, environmental impact and hygiene. Where possible, we implement energy savings and reduce use of materials, for example through more economical production processes. We also constantly work on collecting and adequately disposing of the various waste flows, such as paper and waste materials. IAI is certified to the ISO-14001 environmental management standard.


Code of conduct and compliance

Our code of conduct sets out basic principles of norms and values, which apply to all our employees, both in the Netherlands and abroad. Clear breaches of the code will result in measures being taken vis-à-vis the offending employee. In the year under review, the Management Board, the Supervisory Board nor local management have received reports of any breaches.

Personnel and organisation

Motivated and well-trained employees are crucial to the success of the Company. We aim to provide a professional and challenging work environment in which employees can feel inspired and valued. Tailored training programmes, opportunities for entrepreneurship at a basic level, and open company culture and adequate primary and secondary employment terms are appropriate in this context.

On December 31, 2007, the Company had 515 employees on permanent staff, a decrease compared to 529 at year-end 2006 .

The Company has opted for a small holding company with a limited number of employees that supports the organisations in specific areas. We have put in place central guidelines and procedures in areas including financial reporting, investments, organisations and appointments, and norms and values. We encourage the various operating companies to actively join forces and exchange knowledge, so that the existing knowledge and experi-ence is exploited to the maximum.


Information technology

Information technology is Internet service company docdata’s core activity. We constantly work towards improving and optimising our IT services and business processes. The basis for our success is a strong focus on best-in-class applications, availability, scale adjustment and security. Our highly trained and dedicated IT professionals can quickly provide creative and innovative solutions for complex projects. Jointly with our partners, we are constantly exploring new technologies and opportunities to ensure that docdata can supply top-range IT services and processes.

Our skill in applying new technologies is due to a strong focus on customer-oriented and innovative solutions, in order always to stay one step ahead of the competition. Implementation of best practices in change and life cycle management ensures the highest quality of our services. As we adhere to the highest security standards, we are a reliable and trusted IT partner. Critical evaluation and expansion of our infrastructure guarantee a highly flexible and scaleable platform. Consolidating and expanding our best-in-class applications and our leading position in information technology will be our priority for the next few years.


technology

Laser technology and product handling are currently the core activities of technology company IAI. We constantly work towards optimising existing solutions and developing new solutions, focusing on flexibility, speed and accuracy. We are also searching for innovative developments in which laser technology may provide a unique solution. This might result in investments in companies with complementary knowledge and expertise. We will further invest in (ink)jetting know-how, as it has multiple possible applications that match with current technology within technology company IAI. One of those is printing colour pictures to passports.


Risk management

General

Our business policy is aimed at growth; operational, market-related and financial aspects play an ever greater part in this.

The Management Board is responsible for adequate functioning of the management control system. This system comprises inter alia strategy determination and budget planning. Realised results and liquidity positions are discussed and compared with last year’s results and the budget on a monthly basis. There are procedures in place for making investments and divestments, as well as for evaluation and approval of acquisitions. The Management Board and the operating companies discuss the results and other business developments on a monthly basis. The budgets for the subsidiaries are discussed and set annually by the Management Board and the management of the individual operating companies.

In the past year, we have systematically focused on improving and extending our risk management and internal control systems. We are aware that such systems, however professional, do not provide absolute certainty that business objectives will be realised, nor that they can fully prevent material misstatements, loss, fraud or breaches of laws and regulations. While our risk management and internal control systems require further optimisation, we believe that the current systems provide a reasonable degree of certainty that the financial reporting does not contain material misstatements.


operational

RevenueFor some years now, we have been faced with decreasing revenue from offline replication. Last year the e-Solutions Group, the driving force behind our Internet service strategy, more than offsets this decline. After a successful transition from production company to the Internet service company docdata, we expect this trend to continue.

QualifiedpersonnelThe high technical level of our markets makes us highly dependent on qualified personnel. In view of ongoing scarcity in the employment market, we do not rule out that in the (medium to) long term this might negatively impact our results. For now, we see no cause for worry, particularly since we can make far more attractive propositions than before due to our current positioning and ambitions.

Market

Our Internet service company docdata operates in a market that is not only growing fast, but also undergoing rapid technological progress. Due to our strong customer orientation and consistent application of new technologies and innovative solutions, we will maintain and solidify our leading position and reduce risk.

In the market in which our technology company IAI operates, we are constantly working towards optimising existing technologies and developing new solutions. This, in conjunction with our flexibility, reliability, speed and accuracy, should mitigate or reduce risk.


Financial

The Group has identified the risks related to the use of financial instruments and at the same time has outlined the controls in place. For a description of these risks and controls, reference is made to note 25 ‘Financial instruments’ of the notes to the consolidated financial statements.


Corporate Governance

General

The Management Board is responsible for developing objectives and strategy, and for executing the Company’s strategy and operational policy. The Supervisory Board supervises and advises the Management Board. The Management Board fulfils its duties by promoting the interests of the Company. These interests include the interests of all stakeholders, including customers, shareholders, employees, suppliers and credit institutions. Furthermore, the Company is committed to the interests of the community.

The Company starts from the principle that the Management should determine and implement corporate policy based on a long-term vision of continuity. The Company endorses the importance of clear accountability and transparency of the policy and its results.

To manage the Company, we use a management control system that comprises inter alia strategy determination and budget planning. The realised results and liquidity positions are discussed and compared with last year’s results and the budget on a monthly basis. Clear procedures are in place for the evaluation and authorisation of investments and acquisitions between the operating companies and the Management Board. The results and other business developments are discussed monthly by the Management Board and the operating companies. The budgets for the subsidiaries are discussed and set annually by the Management Board and the management of the individual operating companies.


Tabaksblat Code

We place great importance on proper corporate governance and optimum transparency. The Management Board and the Supervisory Board accept and follow the Dutch Corporate Governance Code (the Tabaksblat Code) as a basis for the further development of the present Corporate Governance structure of the Company. The following documents are available on the Company’s website:• the Articles of Association;• the regulations for the Management Board;• the regulation for the Supervisory Board, including the profile of size and

composition of the Supervisory Board.• the code of conduct, including the whistleblower’s code;• the insider trading regulations;• the minutes of the shareholder meetings.

Neither the Management Board nor the Supervisory Board has any conflict of interests with the Company, taking note of the following:• Mr. Lindenbergh, member of the Supervisory Board of the Company, has a 10.14% interest in DOCDATA N.V., which qualifies him as ‘not independent’ in terms of the Dutch Corporate Governance Code (Tabaksblat Code);• the Management Board holds shares and options on shares in the Company, as set out in section 21 ‘Employee benefits’ and section 30

‘Related parties’ of the notes to the consolidated financial statements.


The Company deviates from the Code on a limited number of items. The main deviations are:• In the course of 2007, the internal risk management and control system,

including a system to monitor and report on the effectiveness of this system, has been improved, but at this time the Company does not fully comply with best-practice provision II.1.3 regarding the risk management and control system and the reporting thereon (best-practice

provision II.1.4). • In new appointments, the Company will comply with the best-practice

provisions relating to the term of appointment (II.1.1) and the severance pay for the Management Board (II.2.7), but the existing terms of

employment for the Management Board have not yet been fully brought in line with those provisions. More details of the remuneration of the

Management Board are included in the 2007 Remuneration Report available on the website that provides further details of the adjustment of

the existing employment contracts of the Management Board;• In consideration of privacy arguments, the Company does not comply

with best-practice provision III.7.3 that calls for rules to be drawn up applying to members of the Supervisory Board and the Management

Board for holdings of and transactions in securities other than those issued by the Company. The Supervisory Board and the Management Board accept as self-evident the basic principle that they will avoid any kind of conflict of interest, but on the other hand they wish to limit unnecessary and time-consuming reporting procedures (best-practice provision II.2.6);

• The option plan approved by the General Meeting of Shareholders on May 11, 2006 stipulates that the exercise price of the annually granted

share options is based on the average closing price of the share on Euronext Amsterdam during a period of ten trading days prior to the date of granting. Best-practice provision II.2.4 stipulates that the exercise price


of the share options must not be set lower than a verifiable (average) price in the context of the official listing on one or more days determined in advance during a period of no more than five trading days prior to

(and including) the date of granting. This deviation is deliberate as on some trading days liquidity and trade in

the share may be limited, modest transaction volumes having a material impact on the share price.

Outlook

After two transitional years, Internet service company docdata will shift up a gear in 2008. In the first six months of 2008, the Company will focus on anchoring the various acquired companies in the docdata organisation and on optimising synergy between the various operating companies, thus laying the basis for further autonomous growth in the second half of 2008.

IAI will focus in 2008 on further detailing its new direction while giving due attention to existing markets. We have dedicated a number of employees to prepare our entry into the solar cell production market and to further develop this in 2008. A budgeted investment for R&D costs of approximately € 1 million, predominantly for the solar cell production market, will be fully charged to operating income in 2008. We anticipate that this investment will not generate revenue and results before 2009. Due to a strong order portfolio, profitability will not be influenced negatively in 2008 from the additional costs required for the realisation of the new direction. This is conditional, however, on timely purchase and supply of ordered systems to our customers.


Financing of acquisitions, R&D costs for IAI and the further development of autonomous growth, IT systems and hardware for the Internet service company docdata will largely be funded from available resources. If necessary, additional external funding may be attracted.


The Management Board,

M.F.P.M. Alting von Geusau

M.E.T. Verstraeten


Industrial Automation Integrators business solutions through laser technology

IAI


Report of technology company Industrial Automation Integrators (IAI)

General

Technology company IAI specialises in developing and building machines for highly accurate and fast processing of various kinds of products and materials using laser technology, (ink)jet printing and chip programming. Its key competencies are in the area of technology (design and production), the process (laser and optics) and automating and integrating production systems.

Global customers fall into the following sectors:• securing and personalising security documents;• processing packaging materials;• processing solar cells;• processing other materials.

In 2007, IAI realised revenue of € 8.6 million with an average of 25 employees.


Our systems are used to produce security documents such as bank notes, passports, ID cards, driving licences, vehicle registration certificates and banker’s cheques.

Passports of many countries, including the Netherlands, Switzerland, Britain, Belgium, Estonia, Ireland and Sweden, are equipped with high-quality security features by our systems.The Dutch ID card, the EU temporary residence permit and the Swedish ID card are personalised with our systems.

We have a proven track record in the security documents market as a supplier of high-quality and reliable equipment.


Market position IAIWe are currently operating in profitable niche markets, which are however marked by low and unpredictable growth, while we observe high growth in adjoining markets such as smart cards (ID/GSM/EMV), RFID labels (smart labels), (ink)jet and photovoltaic solar applications. Among market parties, we have areputation as a high-quality technology company.

Objectives and strategy

We wish to improve our position in specific niche markets through:• market development: realising more sales of comparable products in present and adjoining markets, such as security and packaging;• product development: developing new products for our current markets (security, packaging);• market development: entering new markets (solar cells).

We aim for controlled growth, investing in various specialised markets. Acquisitions are part of our growth strategy. Possible acquisition candidates should operate in growth markets, and contribute technological know-how. We aim to realise synergy, making us more than the sum of our parts.

Sectors

Securing and personalising security documentsWe supply high-grade production machines for complete processing and personalisation of security documents, focusing on applying security features to passports, ID cards and banknotes. We wish to expand this product line to other documents that require

security, such as driving licences, diplomas and duty certificates. In many countries, such documents have little or no security features, so that we see ample opportunities for market expansion.

Processing of packaging materialsThe packaging industry demands high production rates and an ability to reset the machines so that smaller batches can be produced. Resetting machines is time-consuming. Laser technology offers a solution, as resetting can be done simply by switching to another software application. Application of laser technology offers speed, precision, reliability and great flexibility. We are up to this technological challenge.

Processing of other materialsThis activity concerns inter alia subtitling feature films. This market will dry up, as increasing use is being made of digitally recorded images. However, we are constantly exploring new markets to adapt our technology to.

Product development In the context of product expansion, we have decided to develop (ink)jetting technology. Ink/material jetting has a broad range of applications, such as text and pictures, printable electronics (for example RFID labels, displays and solar cells) and biomedical. The first applications will be in machines for passport production, specifically for printing the colour pictures and personal data on the passport holder’s ID page.


Laser technology is used to apply security features, such as ImagePerf®, to documents; these features are revealed when the document is held up to the light. They are hard to imitate, and they personalise the relevant document irreversibly. Since they can be checked without special equipment, the authenticity of documents is easy to verify, providing a solid barrier against fraud.Such laser technology applied features are successfully used in various documents such as passports and identity cards.

IAI supplies industrial production systems that accurately process the customers’ products. In addition to laser technology, other technologies such as inkjet and vision are also used to provide a total solution. This has resulted in systems for total personalisation of passports and identity cards, from affixing the picture and personal data to loading biometric data into the integrated electronic chip and applying security features using laser technology. At the end of the process, the machine verifies that all steps have been executed correctly. The document is then transported to output, after which it can be shipped.


Market development

A key issue in our market exploration is that new markets should allow us to exploit our core competencies, which are project-based design, construction, installation and maintenance of automated production machines that are based on optics, laser processing, product handling and (ink)jet printing. We are looking at technologically attractive growth markets in which we can make a profit within a reasonable timeframe, a few years at most. If necessary, we will enter into partnerships with other parties in order to have the required (market) knowledge at our disposal.

At the end of December 2007 we set our first steps in the market for solar cell production systems. This market meets our selection criteria in the following ways: • market surveys forecast double-digit growth figures

for many years;• currently, many different types of solar cells are being

produced and many other types are under development;

• all types require specific automated production systems in order to allow for production at some

scale at a reasonable price;• the ongoing quest to reduce production costs and

enhance efficiency results in improvements of existing types and emergence of new types;• laser processing and product handling are key

aspects in solar cell production.

Key issues for 2008

• We will invest in both people and technological development.• We aim to enter into partnerships in order to further

shape our entry into the solar cell production system market. To achieve this, we have created a special team within IAI and made financial resources

available.• We will develop a new corporate identity for IAI.


enabling successdocdata e•success


commerce

growingyour business

withe-commerce

solutions

paymentswithout

boundaries

fulfilling tensof thousands

of wishesevery day

digital solutionsfor the

world of media

payments fulfilment media


Profile of Internet service company docdata

Solution for charity organisations

We provide a total solution for charities, based on an

attractive Internet presentation focusing on clear information

and on transforming visitors into donors. We discuss how to

thank donors, for example by email, by letter or with a small

token of appreciation. We can also stock your products and

sell them on your website, possibly in conjunction with a

(media) campaign. Currently, we annually process millions

of forms and reply slips sent in by donors. We also ship

hundreds of products to donors on a daily basis.

We are the secret behind the success of your campaign!

General

Internet service company docdata is a leading European supplier of transaction-based Internet services with a strong base in the Netherlands, Germany and the United Kingdom. Docdata comprises four specialist divisions:

• docdata commerce• docdata payments• docdata fulfilment• docdata media

The company derives its strength from its four specialities that jointly provide a unique total concept, while supplying their services separately.

We target medium-sized to large customers in specific sectors with a strong focus on online business. Due to the many thousands of successful transactions we process every day, our customers can successfully do business on the Internet. Transactions refers to realised orders, processed payments, timely dispatches and processed return shipments.

In 2007, Internet service company docdata realised revenue of € 61.6 million with an average work force of 497.


Market developments

The number of consumers and companies that globally purchase products and services on the Internet has risen by 40% in the past two years. Almost one billion consumers bought something on the Internet at some point. The most popular Internet purchases include books (41%), clothes, accessories and shoes (36%), DVDs and videogames (24%), plane tickets (24%) and electronic equipment (23%). Among Internet shoppers, the highest rate of online sales is in South Korea (99%), followed closely by the United Kingdom, Germany and Japan (all 97%). In the Netherlands, Internet spending grew in 2007 by 38% to € 3.9 billion, caused by a major increase of the number of online buyers (7.3 million in 2007) and a rise of online spending per buyer (average of € 531 per online buyer). The Internet’s share of total retail sales in the Netherlands remains limited to 4.4%. In Western Europe, some 10,000 new online shopping websites were added, and in Germany now one in five shops also sells through the Internet. Three years ago the figure stood at one in ten, and the end of growth is not in sight.

Many new online entrepreneurs have joined the fray in 2007. While initially a simple website was sufficient, we expect that a large number of online retailers will have to replace their current platform in order to realise growth and to successfully implement new developments in e-commerce. Additionally, Internet shoppers, both business-to-business and business-to-consumer are becoming increasingly demanding. They expect more online services, 24/7 availability, greater ease of use and international payment options. They want to know exactly when and where the ordered goods will be delivered and due to the high level of transparency on the Internet they will be more critical of differences in pricing and services. Retailers who fail to respond to consumers’ rising demands will not survive the harsh competition.

Market position

We are in an excellent position to respond to the developments set out above. During the transitional years 2006 and 2007, we have built up an organisation that successfully handles Internet transactions. We already have a broad customer base in several major European markets, and the financial position of the organisation is solid. These ingredients provide a good starting point for expanding our range of e-commerce products and services, for developing new business models, optimising integration of services across the divisions and strengthening the bonds with international customers. The resulting growth will also be determined by our success in recruiting and retaining enough quality employees.


• We strive to be market leader in specific sectors, with an increasing number of Internet transactions in conjunction with profitable growth.

• We offer a total solution to customers who use the Internet as a sales channel.

• We offer one or more specialities (commerce, payments, fulfilment and/or media) to customers for whom Internet is the channel of choice.

Being successful in e-commerce requires staying one step ahead. This is why we continue to invest in developing Internet services, technology and people.

Our focus is on autonomous growth complemented by specific acquisitions aimed at offering our customers an even better and broader range. We will focus on geographical expansion or acquisition of a sector specialist with a particular sector focus.


We are the secret behind your e-commerce success

Docdata supplies international e-commerce solutions to market leading companies.

We work with four specialised but extremely closely collaborating divisions:commerce, payments, fulfilment and media.

Our collective motivation is in everything that we do: passion, inspiration, entrepreneurship and ingenuity. That is our formula for e-success.

Visit www.docdata.com for further information and our e-successful client list.


Solution Fashion

In der Deutschen Modehauptstadt Berlin hat docdata fulfilment gmbh seinen Standort.

Berlin ist bekannt für innovative Mode und aufstrebende Modelabel und hat in den letzten Jahren einen immer größeren Stellenwert erlangt.

In diesem Aufschwung hat sich docdata fulfilment als einer der führender Dienstleister für den Endkundenversand von Fashionartikeln etabliert.

Egal ob Shirts, Schuhe, Jacken, Lifestyleartikeln oder Accessoires - unsere Kunden sind von unserer extremen Flexibilität, uns auf die

unterschiedlichen Produkte und Auftragsmengen täglich neu einzustellen, begeistert.

Unsere Mitarbeiter kommen teilweise selbst aus der Modebranche und bringen somit die notwendige Professionalität und Affinität mit.

Erst wenn der letzte Auftrag unser Haus verlassen hat und auf dem Weg zum Endkunden ist, dann war der Tag ein erfolgreicher Tag!

We are the secret behind the success of your internet shop!

Key issues for 2008

• Attracting new customers.• Realising strong growth in the number of transactions, consisting of

realised orders, successful payments and prompt deliveries.• We will invest in further development of our Internet services to strengthen our e-commerce expertise in the fast-growing European market. • We will invest in recruiting and retaining employees.

Events after balance sheet date

January 21, 2008Internet service company docdata expands its share interest in the German fulfilment company Pegasus e-Business GmbH from 30% to a majority stake of 70%.

February 1, 2008Docdata acquires 61.2% of the issued share capital of the British e-commerce company Hitura Limited in London.


We can supply the services below separately or as a total package

e-Concept & ConsultancyIn order to develop, maintain and market a successful Internet shop, we draw up an Internet plan in close consultation with our customers. This is usually preceded by a thorough analysis of the current situation and the competition.

e-Shop Design & DevelopmentWith our customers, we devote detailed attention to website design, since it significantly defines the customer’s identity. We then add knowledge and technology to allow the customer to process a large number of transactions.

Managed Hosting & ASPWe supply complete Internet outlets, including technical maintenance and hosting. An expert technical team with all the necessary hardware, database and application know-how is available for this 24/7 all year round.

e-MarketingThe main marketing priorities of Internet outlets are generating traffic to the site, achieving a high conversion rate of visitors to buyers, retention management (ensuring buyers return) and outlet branding. Key marketing tools to achieve these aims are search engine optimation, pay-per-click, e-mailings, display adverts, loyalty programmes and all offline channels, such as flyers and brochures. By outsourcing e-marketing to us, customers get direct access to the results of any action, so that adjustments can be made quickly and continuously.

e-Shop ManagementThis is the backbone of our services. It includes the order process, logistics management, payments, stocks, transport, product range, reporting and analysis, and helpdesk support. In some cases, we are open to risk-bearing participation.


Solution for A-brands

We offer market leading companies, for which Internet is just one of several sales

channels, a total webshop solution, from ordering to shipping of (valuable) products.

If the customer wishes, we are prepared to be risk-bearing partners, or even bear the

entire risk. We focus on making your Internet transactions grow.

We are the secret behind your webshop’s success!

Building transaction-based web shops is the basis of our operation. With the services package described above we support our customers in realising and expanding the number of Internet transactions.

Market developments

For many institutions and enterprises, online presence is now inescapable. In 2007, various initiatives were taken once again, and willingness to invest is growing. In the past year, cross-media communication, in particular in advertising, has strongly gained in importance. After a number of years of mainly online communication, there is now a preference for a combination of online and offline (flyers, brochures, dailies).

Cross-selling (selling additional products or services) is another phenomenon that is increasingly being exploited on the Internet. After all, an advanced platform gives Internet entrepreneurs insight into the wishes of the online shopper and how to respond to them. The concept ‘long-tail’ is yet another addition to the Internet. This refers to products that have few buyers or for which there is little demand. Jointly, they can comprise a considerable market, provided the retail outlet or distribution channel is big enough. As the Internet is not limited by shelf space, it is the ideal channel for long-tail.

Market position docdata commerce

Within a few years, we have developed into a division with a strong IT development department, specialised online marketeers, designers and an operational department that enable us to link our services to the abovementioned developments. By outsourcing for instance e-marketing to us, we can advise customers on their cross-media communication.

We expect to strengthen our European market position considerably in the next few years.


In the area of Internet technology, constantly thinking one step ahead is crucial. Adding new specialised services is therefore of major importance. This is what our development team is constantly working on. Furthermore, databases are essential. We have the expertise to link different systems in such a way that during a customer contact the online entrepreneur can act and anticipate; cross-selling is an example of this.

In the next few years, we aim to increase the number of successful transactions of our customers significantly, focusing on customers making high numbers of Internet transactions, regardless of whether these concern clothing, books, electronics or other products. Next to the Benelux countries, our focus is on Germany, the United Kingdom, Scandinavia, Spain, France and Italy. Local presence of IT specialists, marketeers and process managers is not always required.


Payment ProcessingWe process all incoming payments, regardless of the country or distribution channel where they originate, and irrespective of the payment method and currency. We link these payments immediately to the outstanding orders. Our fraud management service automatically checks all transactions for several risk factors to minimize the chances of fraud.

Credit ManagementIn addition to a range of online payment methods, such as credit cards and iDeal, we offer the option of deferred paying.We handle online debtor management, from sending payment reminders to possible legal action, both nationally and internationally.

Membership and Recurring PaymentsWe provide problem-free collection and processing of membership payments and periodic invoicing to companies with a business model based on membership and on periodically recurring payments, such as clubs, associations and charities.

Response & Donation HandlingWe handle response and donation processing for charities and commercial businesses. Annually, we process millions of return cards for charity organisations. Our tailored and total solutions include: campaign & response management, receipt, sorting and processing, fulfilment and development and management of customer-specific automated solutions.

Cash DisbursementWe use this innovative and reliable solution for outgoing payments to third parties, such as for our customers’ suppliers. This allows sharp reductions of management costs of outgoing national and international payments.

The following turnkey solutions are leading:


Solution for publishers

We offer publishers who are looking for additional sales channels a

range of options to successfully expand their online business model,

from advice and development of a webshop enabled for down-

loading, printing on demand and safe and secure payment

processing down to the entire shipping operation.

We also develop unique concepts for creating and replicating

products on sale in your webshop, such as audio books for MP3

players or download functionalities.

We are the secret behind your web publishing success!

We supply a wide range of payment solutions to e-commerce enterprises. Our services focus on companies, organisations and institutions who do business internationally on the Internet:• web retailers and companies that sell through the Internet in both

business-to-consumer and business-to-business environments; • call centres/telesales organisations;• charities;• sports clubs, associations, sector organisations etcetera that are faced with processing and collection of recurring membership payments.

Market developments

Companies selling on the Internet are faced with the complexity of processing a multitude of payment methods. Aspects like Internet’s sensitivity to fraud, debtors who do not pay on time and collection of recurring payments play a major role.

Market position docdata payments

With a simple connection to our payment service, an Internet retailer gets access to over 40 different payment methods, 140 different currencies, fraud risk management modules and payment pages in different languages. This simplifies setting up a secure, reliable and flexible Internet checkout. In addition, we offer special services for recurring payments, debtor management for timely and efficient collection of outstanding invoices and a special payout service to facilitate (international) payments to suppliers, partners and third parties


We aim to be the best payment service provider in Europe in a large number of sectors. We will achieve this leading position by offering a full payment service. Key factors in this respect are: • having a high-quality platform with guaranteed availability;• high-quality sales and support.


e-Commerce FulfilmentWe offer a wide range of logistics services to companies selling on the Internet or wishing to do so, with the option of outsourcing the entire e-commerce logistics process. Tightly managed procedures and use of advanced scanners during the pick & pack process guarantee a high degree of reliability, speed and flexibility. Depending on the nature of the goods and the composition of the order, our automatic sorting system is capable of sorting 20,000 items per hour into individual orders.

Inventory ManagementInventory management can be fully outsourced to us. Our advanced IT system provides tailor-made solutions, such as automated purchase orders. The inventory management system makes checking and minimising stock a simple matter. It is even possible to operate without a fixed inventory by using cross-docking: delivered items are processed immediately and dispatched ‘just in time’.

Return ManagementReturn shipments are visually checked and processed in our system in accordance with mutually agreed guidelines. Approved products are returned to stock and reshipped. Defective products are collected and, depending on mutual agreements, returned to the supplier or destroyed, either with an auditor’s report or otherwise.

Carrier ManagementWe have competitive pricing agreements with virtually all national and international carriers, and we can offer a broad choice. Different shipment methods are used for a range of product/delivery address combinations.

Data & Call Centre Services Order intake and helpdesk services can also be outsourced to us. Data & call centre services are implemented and carried out based on specifications in partnership with specialised partners. Extensive online reports keep our customer and the end-customer informed of the status of every order.

We offer the following turnkey solutions:


Retail solution

By supplying a combination of webshop, online payment methods

and fulfilment, we provide a fully integrated total solution in which

the elements described above are in harmony. This enables us to

support retailers entering the world of e-tail. We offer our custo-

mers one point of contact that takes full responsibility 24/7 for

developing a successful webshop in terms of traffic, order proces-

sing, payment, shipping and returned goods processing.

We are the secret behind the success of your webshop!

We specialise in finely tuned logistics and personalised distribution. Our services include inventory management, order picking, sorting, personalising, packing and shipping.

Market developments

After the e-tail start-ups, other companies are now entering the Internet market in droves. We distinguish two types of online customers: companies for which the Internet is the main sales channel and companies who see Internet as one of several channels. Examples would be manufacturers who skip the entire retail channel and only sell online, and companies who pair offline and online sales. The latter believe that the ‘brand experience’ takes place in the shop, but that items may be ordered on the Internet later. The opposite movement is also taking place, although still tentatively: Internet retailers opening a real-world shop to be closer to the customer.

Market position docdata fulfilment

We have experienced sharp growth in the past few years. This allows us to invest in mechanisation, automation and people, and makes docdata fulfilment the largest organisation in its sector. Next to the Netherlands, there are fulfilment centres in Germany and the United Kingdom.


We pursue the following strategic objectives in order to operate even more successfully in the e-fulfilment market:• By raising efficiency and improving the operation further by means of

investments in mechanisation, automation and people, we aim to keep moving forward in order to handle volume increases efficiently and as reliably as possible.

• Specialisation in fulfilment of new markets, including fashion. With our expertise we can provide existing players and new adopters

a great deal of added value to be successful in e-commerce.• Offering call centre services in partnership to provide personal

handling of questions and problems in orders, shipments and return shipments.

We highly value the relationship we have with our customers. Customer relations managers are always on call to answer questions from customers and to implement improvements.


Creative ServicesWe are partners in the entire process from the creative concept to the design of special CD or DVD packaging. We can also handle the organisation and execution of marketing projects.

Content ProjectsOnce the creative concept is ready, we provide content for it ranging from selecting music, films, games and software to acquiring the associated copyrights.

Recordable MediaWe offer replication of corporate presentations, promos, software updates, etcetera on recordable media carriers such as CD-R, DVD-R, USB sticks, MP3 players and memory cards. This is ideal for promotional and marketing purposes, and can be ordered even at small volumes.

CD ReplicationOur highly efficient production facilities jointly produce dozens of millions of CDs every year for customers ranging from record companies, publishers, software companies and financial institutions throughout Europe.

DVD ReplicationWe produce millions of DVDs in all available formats for film companies, record companies and other publishers. The production process is closely monitored around the clock to guarantee flexibility, speed and reliability.

We are leading in the following areas:


Entertainment solution

We supply tailored service packages to internationally focused entertainment

companies, ranging from recurring payments of registered download platform

customers, subscribers to digital services like gaming and dating, to ticket sales for

events, concerts and exhibitions. Our extensive portfolio of national and international

payment methods, payment web pages in multiple languages and support of a range

of currencies allow you to set up your international online business with minimal

investment and a very short time-to-market.

We are the secret behind your entertainment website’s success!

We are a full-service provider of production and distribution of media (carriers) for the music, entertainment and information technology industry. A unique ‘one stop shop’ concept enables our customers to respond quickly to market opportunities.

Market developments

Due to the strong increase of downloading and declining growth of CDs and DVDs as distribution media, CD and DVD sales are slowing down markedly. Strong competition is expected to continue in the next few years, partly because the anticipated shake-out (in terms of capacity) has failed to occur. New players are not expected to enter the market.

Market position docdata media

We have a strong basis in the audio industry, in particular through independent record labels. We have a strong reputation for flexibility and reliability in this market, which continues to prove its value every day. We have production facilities in major European countries such as the Netherlands, the United Kingdom and Germany.


We aim to generate profitable sales with new activities such as creative services, content projects and recordable media. In the next few years, our focus will shift from offline replication to online media services with a creative slant in the area of content (media). With this approach we can both serve our current and new customers, and maintain our strong market position.

In the market situation as described, it should be expected that revenue and result of the current offline replication activities will further decrease.In order to stabilise or improve the result in a contracting market on which we continue to rely strongly, we must:• expand the range of services and products;• reduce costs, inter alia by improving yields and a zero-error policy; • stabilise sales in units in conjunction with countering price erosion.


2007 Financial StatementsDocData N.V. financial

statements


Consolidated Income Statement

(EUR x 1,000) Note 2007 2006

Revenue 1 70,220 59,583 Cost of sales (52,521 (45,459

Gross profit 17,699 14,124

Other operating income 4 308 465 Selling expenses (4,230 (3,146 Administrative expenses (9,847 (6,795Other operating expenses 5 (191 - Operating profit before financing income and expenses 1 3,739 4,648

Financial income 438 314 Financial expenses (774 (188

Net financing income / (expenses) 7 (336 126

Share of profits / (losses) of associates 11 270 (43

Profit before tax 3,673 4,731

Income tax expense 8 (714 (1,718

Profit for the period from continuing operations 2,959 3,013

Discontinued operation Profit / (loss) from discontinued operation (net of income tax) 2 429 (2,877

Profit for the period 3,388 136

Attributable to: Equity holders of the parent 3,389 154 Minority interest (1 (18


Earnings per share Basic earnings per share 19 EUR 0.48 EUR 0.02 Diluted earnings per share 19 EUR 0.47 EUR 0.02

Continuing operations Basic earnings per share 19 EUR 0.42 EUR 0.43 Diluted earnings per share 19 EUR 0.41 EUR 0.42

For the year ended December 31

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(EUR x 1,000) Note 2007 2006

Revenue 1 70,220 59,583 Cost of sales (52,521 (45,459

Gross profit 17,699 14,124

Other operating income 4 308 465 Selling expenses (4,230 (3,146 Administrative expenses (9,847 (6,795Other operating expenses 5 (191 - Operating profit before financing income and expenses 1 3,739 4,648

Financial income 438 314 Financial expenses (774 (188

Net financing income / (expenses) 7 (336 126

Share of profits / (losses) of associates 11 270 (43


Income tax expense 8 (714 (1,718

Profit for the period from continuing operations 2,959 3,013

Discontinued operation Profit / (loss) from discontinued operation (net of income tax) 2 429 (2,877


Attributable to: Equity holders of the parent 3,389 154 Minority interest (1 (18


Earnings per share Basic earnings per share 19 EUR 0.48 EUR 0.02 Diluted earnings per share 19 EUR 0.47 EUR 0.02

Continuing operations Basic earnings per share 19 EUR 0.42 EUR 0.43 Diluted earnings per share 19 EUR 0.41 EUR 0.42

Consolidated Statement of recognised Income and Expense


(EUR x 1,000) Note 2007 2006 Foreign exchange translation differences 18 (613 99

(Expense) / income recognised directly in equity (613 99

Profit for the period from continuing operations 2,959 3,013 Profit / (loss) from discontinued operation 2 429 (2,877 Total recognised income and expense for the period 2,775 235

Attributable to: Equity holders of the parent 2,776 253Minority interest (1 (18 Total recognised income and expense for the period 2,775 235

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As at December 31

(EUR x 1,000) Note 2007 2006 Assets

Non-current assets Property, plant and equipment 9 7,508 8,121Intangible assets 10 9,856 7,320Investment in associates 11 459 1,247Other investments 12 100 100Trade and other receivables 13 230 1,068Deferred tax assets 14 1,046 470

Total non-current assets 19,199 18,326

Current assets

Inventories 15 3,884 3,765Income tax receivables 407 154Trade and other receivables 16 13,379 16,995 Cash and cash equivalents 17 5,586 5,831 Assets classified as held for sale 2 - 831 Total current assets 23,256 27,576

Total assets 42,455 45,902


Consolidated Balance Sheet

(EUR x 1,000) Note 2007 2006 Assets

Non-current assets Property, plant and equipment 9 7,508 8,121Intangible assets 10 9,856 7,320Investment in associates 11 459 1,247Other investments 12 100 100Trade and other receivables 13 230 1,068Deferred tax assets 14 1,046 470

Total non-current assets 19,199 18,326

Current assets

Inventories 15 3,884 3,765Income tax receivables 407 154Trade and other receivables 16 13,379 16,995 Cash and cash equivalents 17 5,586 5,831 Assets classified as held for sale 2 - 831 Total current assets 23,256 27,576

Total assets 42,455 45,902

As at December 31

(EUR x 1,000) Note 2007 2006 Equity and liabilities

Equity 18 Share capital 731 731 Share premium 16,854 16,854 Translation reserve (49 564 Reserve for own shares (1,625 61 Retained earnings 2,543 3,824 Unappropiated profits 3,389 154 Total equity attributable to equity holders of the parent 21,843 22,188 Minority interest 344 226 Total equity 22,187 22,414

Liabilities

Non-current liabilities Interest-bearing loans and borrowings 20 1,057 1,862Employee benefits 21 343 292 Deferred tax liabilities 14 653 764

Total non-current liabilities 2,053 2,918 Current liabilities Bank overdrafts 23 2,110 1,698 Interest-bearing loans and borrowings 20 76 - Income tax payable 54 2,411 Trade and other payables 24 15,853 15,111 Provisions 22 122 52 Liabilities classified as held for sale 2 - 1,298 Total current liabilities 18,215 20,570 Total liabilities 20,268 23,488

Total equity and liabilities 42,455 45,902

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Consolidated Statement of Cash Flows


(EUR x 1,000) 2007 2006

Cash flows from operating activities Profit for the year 3,388 136 Adjustments for: Depreciation and amortisation 3,625 5,056 Costs share options and delivered shares 179 79 Gain on sale of property, plant and equipment - (7 Financial expenses 774 188 Financial income (438 (314 Share of (profits) / losses of associates (270 43 Income tax expense 714 1,718 Other (1 (14

Cash flows from operating activities before changes in working capital and provisions 7,971 6,885

Decrease/increase in trade and other receivables 5,499 (1,942 Increase/decrease in inventories (119 669Decrease in trade and other payables (1,345 (381Increase/decrease in provisions and employee benefits 121 (204

Cash generated from the operations 12,127 5,027

Interest paid (598 (153 Interest received 435 314 Income taxes paid (3,649 (2,218

Net cash from operating activities 8,315 2,970

Cash flows from investing activities Acquisition of property, plant and equipment (2,426 (1,358 Acquisition of subsidiaries (2,234 (4,046 Acquisition of intangible assets (781 - Proceeds from sale of property, plant and equipment 32 164 Acquisition of associates - (1,224

Net cash from investing activities (5,409 (6,464

(EUR x 1,000) 2007 2006

Cash flows from financing activities Own shares bought (1,994 - Dividends paid (1,444 (2,841Proceeds from bank overdrafts 412 1,698 Repayment of borrowings (337 (31 Proceeds from exercise of share options 129 199Loans provided to associates - (257

Net cash from financing activities (3,234 (1,232

Net decrease in cash and cash equivalents (328 (4,726Cash and cash equivalents at January 1 5,831 10,516 Effect of exchange rate fluctuations on cash held 83 41

Cash and cash equivalents at December 31 5,586 5,831

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Notes to the Consolidated Financial Statements

Significant accounting policies

The consolidated financial statements comprise DOCdata N.V., ’s-Hertogenbosch, the Netherlands (referred to as “the Company”) and its subsidiaries (together referred to as “the Group”) and the Group’s interest in associates and jointly controlled entities.

Effective January 1, 2008, the Company is referred to as DOCDATA N.V. In the consolidated and Company financial statements for the year 2007, DOCdata N.V. is still being used.

The financial statements were prepared by the Management Board per March 27, 2008 and have been approved by the Supervisory Board per that same day. The financial statements will be presented to the Annual Meeting of Shareholders to be held on May 15, 2008 for adoption.

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (hereafter IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB).

Basis of preparation

The financial statements have been prepared on the historical cost basis except for the following assets and liabilities that are stated at their fair value when they exist: financial instruments held for trading and financial instruments classified as available-for-sale. Unless mentioned otherwise all amounts are stated in thousands of euro.

The Consolidated Statement of Cash Flows has been prepared in accordance with the indirect method.

Non-current assets and disposal groups of assets held for sale are stated at the lower of carrying amount and fair value less costs to sell.

The preparation of the financial statements requires management to make judgements, estimates and assumptions that may affect the application of policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the

judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is described in note 32 ‘Accounting estimates and judgements’.

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. The accounting policies have been applied consistently throughout the Group.

Consolidation policies

SubsidiariesSubsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. Subsidiaries are consolidated from the date that control commences until the date that control ceases.

AssociatesAssociates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the Group’s share of the result of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds the carrying amount of its interest in an associate, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an associate.


Joint venturesJoint ventures are those entities over whose activities the Group has joint control, established by contractual agreement. The Group reports its interest in joint ventures using the equity method.

Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised gains and losses or income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Reporting dateThe financial year of the Company, and of all subsidiaries and associates within the Group, is equal to the calendar year.

Foreign currency

Foreign currency transactionsTransactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated in euro at the foreign exchange rate ruling at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign exchange differences arising on translation are recognised in the income statement. The foreign currency gain or loss on monetary items is the difference between amortised costs in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised costs in foreign currency translated at the exchange rate at the end of the period.

Financial statements of foreign operationsThe assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, generally are translated to euro at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations generally are translated to euro at average rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly in the translation reserve, a separate component of equity.

Net investment in foreign operationsExchange differences arsing from the translation of the net investment in foreign operations are taken directly into the translation reserve, as a separate component of equity. They are recycled and recognised in the income statement upon disposal of the operation.

Exchange rates usedThe principle exchange rates against the euro used in the balance sheet and the income statement (average for the year) are:

Balance Sheet Income Statement December 31, December 31, (in EUR) 2007 2006 2007 2006

U.S. dollar 0.6793 0.7593 0.7193 0.8035Great Britain pound 1.3636 1.4892 1.4264 1.4742

Property, plant and equipment

Owned assetsProperty, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items.

Leased assetsLeases in terms of which the Group assumes substantially all the risks and rewards of the ownership are classified as finance leases. Property acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.

Subsequent costsThe Group recognises 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 within the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred.


Balance Sheet Income Statement December 31, December 31, (in EUR) 2007 2006 2007 2006

U.S. dollar 0.6793 0.7593 0.7193 0.8035Great Britain pound 1.3636 1.4892 1.4264 1.4742

DepreciationDepreciation is charged to the income statement on a straight-line basis over the estimated useful lives of the assets. Land is not depreciated.

The estimated useful lives are as follows:• Buildings 30-40 years• Leasehold improvement 10 years• Machinery and equipment 5-7 years• Office equipment and other 3-5 years

The depreciation method, useful lives and residual value are reassessed annually.

Intangible assets

GoodwillAll business combinations are accounted for by applying the purchase method. Goodwill represents amounts arising on an acquisition of subsidiaries, associates or joint ventures. Goodwill represents the difference between the cost of the acquisition over the fair value of the net identifiable assets acquired.

In respect of acquisitions prior to January 1, 2004, the date of transition to IFRS, goodwill is included on the basis of its deemed cost, which represents the amount recorded under previous GAAP (Dutch GAAP). For these acquisitions, goodwill has been fully amortised prior to the date of transition to IFRS under Dutch GAAP.

Goodwill is stated at cost less any accumulated impairment losses. In respect of associates, goodwill is included in the carrying amount of the investment in the associate.

Negative goodwill arising on acquisitions is recognised directly in the income statement.

Other intangible assetsOther intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred.

Subsequent expenditureSubsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

AmortisationAmortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Goodwill and intangible assets with an indefinite useful life are systematically tested for impairment at each annual balance sheet date. Other intangible assets are amortised from the date that they are available for use.

The estimated useful lives are as follows:• Motion picture 1-2 year• Customer contracts 2, 7-10 years• Software 5-7 years

The depreciation method, useful lives and residual value are reassessed annually.

Investments

Investments in debt and equity securitiesAvailable-for-sale investments are stated at fair value, with all resulting gains and losses recognised directly into equity except for impairment losses. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the income statement. When these investments are interest bearing, interest calculated using the effective interest method is recognised in the income statement.

Subsequent to initial recognition at fair value, other investments are stated at amortised cost using the effective interest method, less impairment losses. All gains and losses are recognised in the income statement.

Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost of inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing them to


their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Trade and other receivables

Trade and other receivables are stated at amortised cost, using the effective interest method, less impairment losses.

Cash and cash equivalents

Cash and cash equivalents comprises cash balances and call deposits with an original maturity of three months or less.

Assets and liabilities classified as held for sale

Assets and liabilities of a disposal groups that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale.

Upon initial classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets and employee benefit assets, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Impairment

The carrying amounts of the Group’s assets, other than inventories and deferred tax assets, are reviewed at each annual balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill and intangible assets that are not yet available to use the recoverable amount

is estimated at each annual balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement.

The recoverable amount of the Group’s other investments is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Receivables with a short duration are not discounted.

The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash flows are 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. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit and then, to reduce the carrying amount of the other assets in the unit on a pro rata basis.

Reversals of impairmentsImpairment losses in respect of other investments carried at amortised cost are reversed if the subsequent increases in recoverable amounts can be related objectively to the events occurring after the impairment losses were recognised.

An impairment loss in respect of an investment in an equity instrument classified as available-for-sale is not reversed through the income statement. If the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the income statement, then the impairment loss is reversed with the amount of the reversal recognised in the income statement.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.


Share capital

The equity attributable to equity holders of the parent is considered to be the managed capital in accordance with IFRS.

Preference share capitalPreference share capital is classified as equity if it is non-redeemable and any dividends are discretionary.

Repurchase of share capitalWhen share capital recognised as equity is repurchased, the amount of the consideration paid is recognised as a change in equity. Repurchased shares that are not subsequently cancelled are classified as treasury shares and presented as a deduction from total equity.

DividendsDividends are recognised as a liability in the period in which they are declared.

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.

Employee benefits

Share-based payment transactionsThe share option programme allows Group employees to acquire shares of the Company. The fair value of the options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using a binomial lattice model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to share prices not achieving the threshold for vesting.

Defined contribution pension plansObligations arising from defined contribution pension plans are recognised as an expense in the income statement as incurred.

Defined benefit pension plansObligations arising from defined benefit pension plans are calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods. To determine the present value the benefit is discounted and the fair value of the plan assets is deducted. The discount rates are based on high quality corporate bonds that have maturity dates approximately to the terms of the obligations. The calculation is performed by a qualified actuary using the projected unit credit method.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in the income statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in the income statement.

All actuarial gains and losses as at January 1, 2004, the date of transition to IFRS, were recognised. In respect of actuarial gains and losses that arise subsequent to January 1, 2004 in calculating the Group’s obligation in respect of a plan, to the extent that any cumulative unrecognised actuarial gain or loss exceeds 10% of the greater of the present value of the defined benefit obligation and the fair value of the plan assets, that portion is recognised in the income statement over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised.

Where the calculation results in a benefit to the Group, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

Long-term service benefitsThe Group’s net obligation in respect of long-term service benefits, other than post-employment plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value and the fair value of any plan assets is deducted. The discount rates are based on high quality corporate bonds.


Provisions

GeneralA provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of 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, 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, when appropriate, the risks specific to the liability.

RestructuringA provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Future operating costs are not provided for.

WarrantiesA provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

Onerous contractsA provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract.

Trade and other payables

Trade and other payables are stated at amortised cost using the effective interest method.

Revenue

Goods sold and services renderedRevenue from the sale of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. Revenue from services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at balance sheet date. The stage of completion is assessed by reference to surveys of work performed. No revenue is recognised if there are significant uncertainties regarding the recovery of the consideration due, associated costs or the possible return of goods. No revenue is recognised if there is significant continuing management involvement with the goods.

Expenses

Operating lease paymentsPayments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease.

Finance lease paymentsMinimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Net financing costsNet financing costs comprise interest payable on borrowings calculated using the effective interest rate method, interest receivable on funds invested, dividend income and foreign exchange gains and losses.

Interest income is recognised in the income statement as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date the entity’s right to receive payments is established which in the case of quoted securities is usually the ex-dividend date. The interest expense component of finance lease payments is recognised in the income statement using the effective interest rate method.


Income taxes

Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly into equity, in which case it is recognised into equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustments to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

Deferred tax assets, including those resulting from the carry-forward of losses, are valued to the extent that it is probable that future taxable profits will be available against which the assets can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.

Discontinued operation

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative income statement is restated as if the operation had been discontinued from the start of the comparative period. In that case, the comparative period is indicated with ‘(restated)’.

Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

New IFRS Standards as adopted by the EU not effective

In 2007 the following adjusted standards and interpretations appeared which are applicable for financial years that start at or after January 1, 2008. This concerns predominately:• IFRS 8 ‘Operating Segments’;• IFRS 3 / IAS 27 ‘Business Combinations’;• IFRIC 11 ‘IFRS 2 Group and Treasury Share Transactions’;• IFRIC 14 ‘IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements

and Their Interaction’;• IFRIC 12 ‘Service Concession Arrangements’;• IFRIC 13 ‘Customer Loyalty Programmes’.

The expected impact of these new IFRS standards, amendments and interpretations, which the Group will apply as of the effective date, on equity and result will be limited.


Index of Notes

Page

1 Segment reporting 88

2 Discontinued operations 90

3 Acquisition of subsidiaries and associates 92

4 Other operating income 93

5 Other operating expenses 93

6 Personnel expenses 93

7 Financing income and expenses 93

8 Income tax expense 94

9 Property, plant and equipment 95

10 Intangible assets 95

11 Investments in associates 96

12 Other investments 97

13 Non-current trade and other receivables 97

14 Deferred tax assets and liabilities 98

15 Inventories 99

16 Current trade and other receivables 99

17 Cash and cash equivalents 100

18 Capital and reserves 101

19 Earnings per share 102

20 Interest-bearing loans and borrowings 103

21 Employee benefits 103

22 Provisions 106

23 Bank overdrafts 107

24 Trade and other payables 107

25 Financial instruments 107

26 Operating lease and rent obligations 108

27 Capital commitments 108

28 Bank guarantees 108

29 Other commitments and contingent liabilities 108

30 Related parties 108

31 Group entities 110

32 Subsequent events 110

33 Accounting estimates and judgements 111


1 Segment reporting

Segment information is presented in respect of the Group’s business and geographical segments. The primary format, business segments, is based on the Group’s management and internal reporting structure. Associates are not included in the segment information as they are not included in the consolidation of the Group.

Inter-segment pricing is determined on an arm’s length basis.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets and liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected tot be used for more than one period.

Business segmentsThe Group indentifies till December 31, 2007 the following main business segments:• Media Group: production of CDs, DVDs and related services to content owners in Europe.• e-Solutions Group: providing e-Fulfilment, e-Financial, e-Commerce and e-Media solutions to clients. Offering complete Internet-solutions, both Business-to-Business as well

as Business-to-Consumer.• Industrial Automation Integrators: designing and building production systems utilising

optical and laser technology for application in amongst others document security systems for high security printers and equipment for processing of packaging materials and also providing security features for authentication.

Geographical segmentsThe segment Media Group operates in the Netherlands, Germany and the United Kingdom. The segment e-Solutions Group operates mainly in Europe. The segment Industrial Automation Integrators operates worldwide.

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets.

New Organisation StructureEffective January 1, 2008, the organisation structure of the Group has been changed from a country organisation to a divisional structure, with the following main business segments:• The Internet service company docdata, existing of the following four divisions: - docdata commerce; - docdata payments; - docdata fulfilment; - docdata media;• The technology company Industrial Automation Integrators (IAI).

The business segments Media Group and e-Solutions Group have been integrated to the Internet Service Company docdata, effective January 1, 2008. The Media Group and e-Media will together form docdata media.

Revenue from external customers

(EUR x 1,000) Industrial Media e-Solutions Automation Unallocated Consoli- Country Group Group Integrators activities dated

2007Netherlands 10,310 14,329 1,698 - 26,337 Germany 10,003 3,740 - - 13,743 France 6 460 118 - 584 United Kingdom 10,185 5,345 37 - 15,567 US 2 156 - - 158 Rest of the world 1,809 5,245 6,777 - 13,831 Total 32,315 29,275 8,630 - 70,220

2006Netherlands 11,171 8,733 4,675 - 24,579 Germany 12,322 74 - - 12,396 France 35 47 175 - 257 United Kingdom 11,476 1,075 - - 12,551 US 18 287 - - 305 Rest of the world 2,074 3,533 3,888 - 9,495 Total 37,096 13,749 8,738 - 59,583


(EUR x 1,000) Industrial Media e-Solutions Automation Unallocated Consoli- Country Group Group Integrators activities dated

2007Netherlands 10,310 14,329 1,698 - 26,337 Germany 10,003 3,740 - - 13,743 France 6 460 118 - 584 United Kingdom 10,185 5,345 37 - 15,567 US 2 156 - - 158 Rest of the world 1,809 5,245 6,777 - 13,831 Total 32,315 29,275 8,630 - 70,220

2006Netherlands 11,171 8,733 4,675 - 24,579 Germany 12,322 74 - - 12,396 France 35 47 175 - 257 United Kingdom 11,476 1,075 - - 12,551 US 18 287 - - 305 Rest of the world 2,074 3,533 3,888 - 9,495 Total 37,096 13,749 8,738 - 59,583

Segment result (EUR x 1,000) 2007 2006

Media Group 526 826 e-Solutions Group 907 980 Industrial Automation Integrators 2,306 2,842

Operating profit 3,739 4,648

Net financing income / (expenses) (336 126 Share of losses of associates (e-Solutions Group) 270 (43 Income tax expense (714 (1,718 Profit / (loss) from discontinued operation (net of income tax) 429 (2,877 Profit for the period 3,388 136

(EUR x 1,000) Industrial Media e-Solutions Automation Unallocated Consoli- Country Group Group Integrators assets dated

2007Netherlands 5,032 11,923 5,018 695 22,668 Germany 4,897 1,881 - - 6,778 United Kingdom 4,184 8,366 - - 12,550 Total 14,113 22,170 5,018 695 41,996

Investmentsin associates - 459 - - 459 Total assets 14,113 22,629 5,018 695 42,455

2006Netherlands 6,389 6,728 7,137 450 20,704 Germany 5,910 388 - - 6,298 France 831 - - - 831 United Kingdom 5,999 10,823 - - 16,822 Total 19,129 17,939 7,137 450 44,655

Investmentsin associates 12 1,235 - - 1,247 Total assets 19,141 19,174 7,137 450 45,902

Total assets

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2 Discontinued operation

In the consolidated financial statements for the years ended December 31, 2007 and December 31, 2006, the assets, liabilities and activities of Optical Disc de France S.A.S. (DOCdata France), formerly a subsidiary that was part of the Media Group, have been accounted for as discontinued operation.

In October 2006 the Group announced that the DOCdata Media Group (replication) did withdraw from the French market since the desired turnaround had not been realised in 2006. Due to this decision, all assets and liabilities of DOCdata France have been accounted for at net realisable value in the consolidated balance sheet of the Group at December 31, 2006. Since there was contact with one interested party regarding a possible sale of assets, liabilities and activities of DOCdata France, these assets and liabilities have been reported in the consolidated balance sheet of the Group at December 31, 2006 under assets classified as held for sale and liabilities classified as held for sale.

On April 2, 2007, the Trade Court in Chaumont (France) has officially pronounced the liquidation of Optical Disc de France S.A.S. Following this verdict, the trustee has finally terminated the activities beginning of July 2007, and a public auction of the company’s

(EUR x 1,000) Industrial Media e-Solutions Automation Unallocated Consoli- Country Group Group Integrators liabilities dated

2007Netherlands 1,978 4,402 3,378 920 10,678 Germany 2,511 1,284 - - 3,795 United Kingdom 1,465 4,330 - - 5,795

Total 5,954 10,016 3,378 920 20,268

2006Netherlands 2,083 2,896 3,803 2,999 11,781 Germany 1,903 55 - - 1,958 France 1,298 - - - 1,298 United Kingdom 1,993 6,458 - - 8,451

Total 7,277 9,409 3,803 2,999 23,488

(EUR x 1,000) Industrial Unallocated Media e-Solutions Automation capital Consoli- Country Group Group Integrators expenditure dated

2007Netherlands 193 1,460 181 36 1,870 Germany 66 265 - - 331 United Kingdom 96 129 - - 225

Total 355 1,854 181 36 2,426

2006Netherlands 312 811 28 9 1,160 Germany 13 103 - - 116 France 8 - - - 8 United Kingdom 23 51 - - 74

Total 356 965 28 9 1,358

Total liabilities

Capital expenditure

(EUR x 1,000) Unallocated Industrial depreciation Media e-Solutions Automation and Consoli- Country Group Group Integrators amortisation dated

2007Netherlands 972 698 55 15 1,740 Germany 661 33 - - 694 United Kingdom 649 542 - - 1,191

Total 2,282 1,273 55 15 3,625

2006Netherlands 910 527 43 18 1,498 Germany 899 11 - - 910 France 1,853 - - - 1,853 United Kingdom 726 69 - - 795

Total 4,388 607 43 18 5,056

Depreciation and amortisation


(EUR x 1,000) Unallocated Industrial depreciation Media e-Solutions Automation and Consoli- Country Group Group Integrators amortisation dated

2007Netherlands 972 698 55 15 1,740 Germany 661 33 - - 694 United Kingdom 649 542 - - 1,191

Total 2,282 1,273 55 15 3,625

2006Netherlands 910 527 43 18 1,498 Germany 899 11 - - 910 France 1,853 - - - 1,853 United Kingdom 726 69 - - 795

Total 4,388 607 43 18 5,056

Results from discontinued operation

Cash flows from discontinued operation

Assets classified as held for sale

(EUR x 1,000) 2007 2006

Revenue - 4,928 Expenses (including release of provisions) 429 (7,926

Results from operating activities 429 (2,998 Income tax expense - 121

Profit / (loss) for the period 429 (2,877

Basic earnings per share (loss) EUR 0.06 (EUR 0.41 Diluted earnings per share (loss) EUR 0.06 (EUR 0.40

(EUR x 1,000) 2007 2006

Net cash from operating activities (60 (173 Net cash from investing activities 67 (8 Net cash from financing activities - (8

Net cash from discontinued operation 7 (189

(EUR x 1,000) 2007 2006

Trade and other receivables - 744 Cash and cash equivalents - 87 - 831

furniture and fixtures has taken place on September 2, 2007 under responsibility of the receiver. In the consolidated balance sheet of the Group at December 31, 2007, a provision for remaining risks of the Group related to this liquidation has been accounted for under current liabilities for a total amount of EUR 87 thousand.

In the consolidated income statements of the Group for the years ended December 31, 2007 and December 31, 2006, the results after income tax of DOCdata France for those periods have been reported under profit or loss from discontinued operation. The Group’s profit from discontinued operation (net of income tax) in 2007 of EUR 0.4 million fully consists of the release of remaining balances for provisions carried at December 31, 2006 for the termination of the former French activities of the Media Group. In 2006, the loss from discontinued operation (net of income tax) of EUR 2.9 million fully consisted of a loss after tax of DOCdata France, including the operational net loss of EUR 0.8 million for the French activities and a total of EUR 2.1 million covering all expenses in relation to writing off the assets and liabilities of DOCdata France to net realisable value and providing for all costs for the sale or closure of this subsidiary.

Liabilities classified as held for sale

(EUR x 1,000) 2007 2006

Trade and other payables - 1,298

- 1,298

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3 Acquisition of subsidiaries and associates

SubsidiariesThe Group has increased per May 25, 2007 its share interest of 30% in the issued share capital of payment-service-provider Triple Deal B.V. to 70% for a purchase price of EUR 1.8 million plus an earn-out on a share interest of 16%, acquired from Conclusion Consultants B.V., related to the weighted average profit before income tax for the years 2009 and 2010, which earn-out will materialise in the first half of 2011. The shareholders’ agreement which the Group has signed on May 25, 2007 with both minority shareholders of Triple Deal B.V., Conclusion Consultants B.V. (20%) and Syllion B.V. (10%), includes a put and call option agreement on the 10% minority interest of Syllion B.V., which can lead to an additional share interest for the Group of 7,78% in Triple Deal B.V. on a pro rata basis between the Group and Conclusion Consultants B.V. The put option right can be exercised by Syllion B.V. during the period from December 31, 2009 till December 31, 2011. The call option right can be exercised by the Group during the period from January 1, 2012 till June 30, 2012. The exercise price is the same for both the put and the call option right and is related to the weighted average profit before income tax for the years 2009, 2010 and 2011.

In addition, the Group has increased its 76% interest in the shares of Braywood Holdings Limited with 9.6% to 85.6% through the acquisition of the entire remaining minority interest of one of the other shareholders for a purchase price of EUR 0.3 million.

Furthermore, the Group has acquired per December 28, 2007 through the subsidiary Triple Deal B.V. the entire issued share capital of Contibutie Services B.V. for a purchase price of EUR 0.1 million.

The acquisitions had the following effect on the Group’s assets and liabilities on the acquisition date:

Recognised Pre-acquisition Fair value values on(EUR x 1,000) carrying amounts adjustments acquisition Property, plant and equipment 22 - 22Intangible assets 824 287 1,111IInvestment in associates 20 - 20Deferred tax assets 365 - 365Trade and other receivables 233 - 233Cash and cash equivalents 760 - 760Deferred tax liabilities - (73 (73Interest-bearing loans and borrowings (1,767 - (1,767Trade and other payables (597 - (597 Net identifiable assets and liabilities (140 214 74Goodwill paid on acquisition 2,920 Consideration paid in cash 2,994Cash acquired (760 Net cash outflow 2,234

Pre-acquisition carrying amounts were determined based on applicable IFRSs immediately before the acquisition. The values of assets and liabilities recognised on acquisition are their estimated fair values. The fair value adjustments recorded relate to the fair value of the customer contracts of Triple Deal B.V. and recording a deferred tax liability thereon.

The goodwill recognised on acquisition is attributable mainly to the skills and know-how of the acquired businesses and the synergies expected to be achieved from integrating the acquired companies into the Group’s existing e-Solutions business.

In 2007, the acquisitions had an effect of EUR 2.0 million on revenue and a negative effect of EUR 0.2 million on the profit for the period from continuing operations. If the acquisitions would have been part of the Group the whole financial period, the effect on revenue would have been EUR 0.6 million higher and the effect on the profit for the period from continuing operations would have been the same.

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Recognised Pre-acquisition Fair value values on(EUR x 1,000) carrying amounts adjustments acquisition Property, plant and equipment 22 - 22Intangible assets 824 287 1,111IInvestment in associates 20 - 20Deferred tax assets 365 - 365Trade and other receivables 233 - 233Cash and cash equivalents 760 - 760Deferred tax liabilities - (73 (73Interest-bearing loans and borrowings (1,767 - (1,767Trade and other payables (597 - (597 Net identifiable assets and liabilities (140 214 74Goodwill paid on acquisition 2,920 Consideration paid in cash 2,994Cash acquired (760 Net cash outflow 2,234

AssociatesThe Group has had no acquisitions in associates in 2007. The figures for the comparable period ended December 31, 2006 contain the acquisition Mid March 2006 by the Group of 30% of the shares in the payment-service-provider company Triple Deal B.V. in the Netherlands for EUR 0.9 million in cash. Furthermore, the Group acquired per the end of September 2006 30% of the shares in the e-commerce fulfilment company Pegasus Dienstleistungen GmbH in Germany for EUR 0.3 million in cash.

4 Other operating income

5 Other operating expenses

In 2007, the Group incurred expenses for a total of EUR 0.2 million for the development of a new Corporate Identity for docdata, and for research into a new strategy for IAI. These expenses are reported in 2007 under Administrative expenses.

The Group did not incur expenses for research and development in 2006.

(EUR x 1,000) 2007 2006

Release of accruals / provisions 308 458 Net gain on disposal of property, plant and equipment - 7 308 465

(EUR x 1,000) 2007 2006

Provisions and expenses for restructuring 131 - Expenses from prior years 60 - 191 -

(EUR x 1,000) 2007 2006

Wages and salaries 14,849 11,753Compulsory social security contributions 1,973 1,564 Increase in liability for defined benefit plan 54 72 Premiums for defined contribution pension plans 416 330 Delivered shares for remuneration 92 -Costs share options 87 79 Other personnel expenses 1,568 1,031 19,039 14,829

Average number of staffemployed per geographical area(FTE number, full time equivalents) 2007 2006 Netherlands 206 164 Other EC countries 260 202 Total 466 366

(EUR x 1,000) 2007 2006

Interest income 438 314 Financial income 438 314

Interest expenses (655 (164Net foreign exchange loss (119 (24 Financial expenses (774 (188 Net financing income / (expenses) (336 126

6 Personnel expenses

7 Financing income and expenses

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8 Income tax expense

The income tax expense in the Income Statement consists of the following:

The principal deviations between the Netherlands’ statutory tax rate and the effective tax rate are as follows:

The tax loss carry forwards utilised in 2007 amounts to EUR 0.2 million (2006: nil).

At December 31, 2007, tax loss carry forwards amount to approximately EUR 5.7 million for continued operations (2006: EUR 5.5 million). The deferred tax assets of this that have been recorded at December 31, 2007 amount to EUR 0.5 million (2006: 0.2 million). All tax losses can be carried forward indefinitely except for a tax loss carry forward of EUR 1.6 million in the Netherlands of which EUR 1.2 million needs to be used at the latest in 2011.

(EUR x 1,000) 2007 2006

Netherlands 4,436 4,795Foreign (763 (64

Profit before tax from continuing operations 3,673 4,731Profit / (loss) before tax from discontinued operation (Foreign) 429 (2,998


(EUR x 1,000) 2007 2006

Current taxes Current year 1,345 1,497 Finalisation tax declarations prior years (309 118

1,036 1,615 Deferred taxes Origination and reversal of temporary differences (318 255Expense / (income) due to tax loss carry forwards recognised (4 (152

(322 103 Total income tax expense 714 1,718

2007 2006 Netherlands’ statutory tax rate (25% (30%

Deviations from the Netherlands’ statutory tax rate:

Effect of finalisation tax declarations prior years 10% (2% Effect of tax exempt revenues 6% - Effect of tax losses utilised 2% - Effect of not recognised tax assets (10% (4% Effect of tax rate in foreign jurisdictions (2% - Effective tax rate (19% (36%

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9 Property, plant and equipment

Property, plant and Machinery equipment Land and and Office under con- (EUR x 1,000) buildings equipment equipment struction Total Cost Balance at January 1, 2006 3,173 40,688 5,873 34 49,768Consolidations 332 104 856 - 1,292Acquisitions 207 691 484 (24 1,358Disposals 633 (1,682 (483 - (1,532Transfer to assets held for sale (1,086 (8,329 (317 (5 (9,737Effect of movements in foreign exchange - 218 21 - 239 Balance at December 31, 2006 3,259 31,690 6,434 5 41,388

Balance at January 1, 2007 3,259 31,690 6,434 5 41,388Consolidations - - 122 - 122Acquisitions 184 702 1,210 330 2,426Disposals (10 (1,523 (133 - (1,666Effect of movements in foreign exchange (29 (935 (168 - (1,132 Balance at December 31, 2007 3,404 29,934 7,465 335 41,138

Depreciation and impairment losses Balance at January 1, 2006 1,473 32,400 4,946 - 38,819Consolidations 44 29 440 - 513 Depreciation charge for the year 172 3,231 407 - 3,810 Disposals 633 (1,510 (483 - (1,360 Transfer to assets held for sale (692 (7,729 (292 - (8,713 Effect of movements in foreign exchange - 184 14 - 198 Balance at December 31, 2006 1,630 26,605 5,032 - 33,267

Balance at January 1, 2007 1,630 26,605 5,032 - 33,267 Consolidations - - 100 - 100 Depreciation charge for the year 234 1,972 665 - 2,871Disposals (5 (1,515 (115 - (1,635 Effect of movements in foreign exchange (7 (853 (113 - (973 Balance at December 31, 2007 1,852 26,209 5,569 - 33,630

Carrying amounts At January 1, 2006 1,700 8,288 927 34 10,949 At December 31, 2006 1,629 5,085 1,402 5 8,121

At January 1, 2007 1,629 5,085 1,402 5 8,121 At December 31, 2007 1,552 3,725 1,896 335 7,508

Acquisitions are reported net of investment grants received for an amount of EUR 73,000 in 2007 (2006: EUR 42,000). These investment grants do not bear any repayment obligation if the underlying assets are not divested within 5 years after acquisition.

10 Intangible assets

Motion Customer (EUR x 1,000) Goodwill picture contracts Software Total Cost Balance at January 1, 2006 - 250 - - 250 Acquisitions 4,623 - 549 1,729 6,901 Consolidations - - - 250 250 Effect of movements in foreign exchange 16 - 2 6 24 Balance at December 31, 2006 4,639 250 551 1,985 7,425

Balance at January 1, 2007 4,639 250 551 1,985 7,425 Acquisitions 2,920 - 512 631 4,063 Consolidations - - - 1,480 1,480 Ended - (250 - - (250 Adjustment fair value (987 - - - (987 Effect of movements in foreign exchange (360 - (46 (146 (552 Balance at December 31, 2007 6,212 - 1,017 3,950 11,179

Amortisation and impairment losses Balance at January 1, 2006 - - - - - Consolidations - - - 50 50 Amortisation charge for the year - - 7 47 54 Effect of movements in foreign exchange - - - 1 1 Balance at December 31, 2006 - - 7 98 105

Balance at January 1, 2007 - - 7 98 105 Consolidations - - - 731 731 Amortisation charge for the year - 250 114 390 754 Ended - (250 - - (250 Effect of movements in foreign exchange - - (3 (14 (17 Balance at December 31, 2007 - - 118 1,205 1,323

Carrying amounts At January 1, 2006 - 250 - - 250 At December 31, 2006 4,639 250 544 1,887 7,320

At January 1, 2007 4,639 250 544 1,887 7,320 At December 31, 2007 6,212 - 899 2,745 9,856

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GoodwillThe intangible assets accounted for under goodwill fully represent the goodwill paid upon acquisition of Braywood Holdings Limited per November 15, 2006, the goodwill paid upon acquisition of Triple Deal B.V. per May 25, 2007 and the goodwill paid upon acquisition of Contributie Services B.V. per December 28, 2007.

In the goodwill paid upon acquisition of Braywood Holdings Limited is included EUR 0.8 million (2006: EUR 1.9 million) for the value of the put option on the third party share in Braywood Holdings Limited, which is accounted for under non-current interest-bearing loans and borrowings.

Goodwill is not amortised.

Motion PictureThe intangible assets accounted for under motion picture represent the investment in 2005 in the production budget of the motion picture “Crusade in Jeans” for EUR 250,000. The investment in the motion picture has been fully depreciated in 2007, the year in which the Group collected revenues from the investment in this motion picture.

Customer contractsThe intangible assets accounted for under customer contracts represent:• customer contracts valued upon acquisition of Braywood Holdings Limited per November 15, 2006. The value of these contracts is amortised on a straight-line basis over the estimated useful life of 10 years;• customer contracts valued upon acquisition of Triple Deal B.V. per May 25, 2007. The value of these contracts is amortised on a straight-line basis over the estimated useful life of 7 years;• a specific customer contract of DOCdata e-Commerce Solutions B.V. that is amortised on a straight-line basis over the useful life of this customer contract of 2 years.

The amortisation of customer contracts is charged to selling expenses.

SoftwareThe intangible assets accounted for under software represent acquired and own-developed software owned by DOCdata e-Commerce Solutions B.V. and Triple Deal B.V. (partly accounted for under consolidations) and acquired software valued upon acquisition of Braywood Holdings Limited per November 15, 2006. The value of software is amortised on a straight-line basis over the estimated useful lives of 5 to 7 years.

The amortisation of software is charged to administrative expenses and cost of sales.

Associates Equity participation Equity participation at December 31, 2007 at December 31, 2006 NetherlandsDMailStore B.V., Waalwijk 40.0% 40.0%Triple Deal B.V., Utrecht - 30.0%

GermanyPegasus Dienstleistungen GmbH, Münster 30.0% 30.0%CUE Sound Service GmbH, Berlin 24.0% 24.0%4D upgrade GmbH, Berlin - 24.8%Triple Deal GmbH, Berlin - 20.0%

SpainE-Commerce Fulfillment Services, S.L., Barcelona 35.0% 35.0%

11 Investments in associates

The Group has the following investments in associates:

(*) at December 31, 2007 included in the Group’s consolidation(**) in liquidation

For an overview of the subsidiaries, reference is made to note 31 ‘Group entities’.

The Group’s share of post-acquisition total recognised profits of the above associates for the year ended December 31, 2007 was EUR 142,000 (2006: EUR 43,000 loss). The difference in 2007 with the share of profits of associates consists of the non-consolidated profit in 2007 of associates that are included in the Group’s consolidation at December 31, 2007.

(*)

(*)(*)

(**)


Summary financial information of associates on a 100%-basis:

Profit / (EUR x 1,000) Assets Liabilities Equity Revenue (Loss)

2007NetherlandsDMailStore B.V. 2,765 2,613 152 3,354 36

GermanyPegasus Dienstleistungen GmbH (*) 678 372 307 3,030 281 CUE Sound Service GmbH (**) 303 300 3 961 (15

2006NetherlandsDMailStore B.V. 1,240 1,124 116 1,144 38 Triple Deal B.V. 1,380 1,329 51 1,465 (56

Germany Pegasus Dienstleistungen GmbH 777 637 140 2,595 111 4D upgrade GmbH 22 45 (23 - -CUE Sound Service GmbH 318 300 18 765 (56Triple Deal GmbH 24 1 23 - (2

SpainE-commerce Fulfillment Services, S.L. 346 283 63 325 (167

(*) including revenue and profit of the postal activities, which have been sold prior to the acquisition of the majority by the Group

(**) preliminary figures

12 Other investments

Other investments consist of an investment in equity securities available for sale in Main Capital B.V., seated in the Hague (the Netherlands). Our interest is 9.5% and is valuated at cost price. The Company does not have sufficient information available at December 31, 2007 to valuate the interest at fair value basis.

13 Non-current trade and other receivables

Trade and other receivablesCertain trade receivables have been converted into non-current trade receivables or loans. Terms of payment are agreed upon with the respected customer. The amount of these receivables is recorded at the amortised cost value of EUR 230,000 (2006: EUR 811,000).

Loan to associateThe Group has provided a loan of EUR 257,000 in 2005 to the associate Triple Deal B.V. to support the international expansion of the activities of Triple Deal B.V. As from June 1, 2007 Triple Deal B.V. is part of the Group’s consolidation.

(EUR x 1,000) 2007 2006

Equity securities available for sale 100 100

100 100

(EUR x 1,000) 2007 2006

Trade and other receivables 230 811 Loan to associate - 257 230 1,068

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14 Deferred tax assets and liabilities

Recognised deferred tax assets and liabilitiesDeferred tax assets and liabilities are attributable to the following:

Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items:

Movement of temporary differences during the year Deferred tax assets and liabilities in 2007 and 2006 are attributable to the following:

(EUR x 1,000) Assets Liabilities Net

2007Tax value of loss carry forwards 521 - 521 Property, plant and equipment 228 (45 183 Intangible assets - (608 (608Inventories 217 - 217 Pension obligations 80 - 80 Net deferred tax assets / (liabilities) 1,046 (653 393

2006Tax value of loss carry forwards 152 - 152 Property, plant and equipment 83 (79 4Intangible assets - (685 (685 Accrued expenses 165 - 165 Pension obligations 70 - 70 Net deferred tax assets / (liabilities) 470 (764 (294

(EUR x 1,000) 2007 2006

Tax value of loss carry forwards 1,098 1,595 Property, plant and equipment 983 1,261 Tax related - 139

Total 2,081 2,995

For discontinued operation - 1,042 For continuing operations 2,081 1,953

Balance Recog- Acquired Recog- Balance at 1 januari nomen in at January 1, nised in subsi- nised in December (EUR x 1,000) 2007 income diaries equity 31, 2007

2007Tax value of loss carry forwards 152 4 365 - 521

Property, plant and equipment 4 179 - - 183 Intangible assets (685 77 - - (608 Inventories - 217 - - 217 Accrued expenses 165 (165 - - - Pension obligations 70 10 - - 80 (294 322 365 - 393

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Balance Recog- Acquired Recog- Balance at 1 januari nomen in at January 1, nised in subsi- nised in December (EUR x 1,000) 2007 income diaries equity 31, 2007

2007Tax value of loss carry forwards 152 4 365 - 521

Property, plant and equipment 4 179 - - 183 Intangible assets (685 77 - - (608 Inventories - 217 - - 217 Accrued expenses 165 (165 - - - Pension obligations 70 10 - - 80 (294 322 365 - 393

Balance at Recognised Recognised Balance at January 1, in in December(EUR x 1,000) 2006 income equity 31, 2006 2006Tax value of loss carry forwards - 152 - 152 Property, plant and equipment 32 (28 - 4 Intangible assets - (685 - (685 Accrued expenses 444 (279 - 165Tax related 29 (29 - - Pension obligations 56 14 - 70 Investments in participations and associates (616 616 - - Capital lease obligation (136 136 - - (191 (103 - (294

15 Inventories

(EUR x 1,000) 2007 2006

Raw and auxiliary materials 1,356 1,605 Work in progress 2,290 2,036Finished goods 238 124 3,884 3,765

16 Current trade and other receivables

Trade receivables at December 31, 2007 and 2006 have the following ageing:

(EUR x 1,000) 2007 2006

Trade receivables 11,667 16,165 Other receivables andprepayments 1,712 830 13,379 16,995

(EUR x 1,000) 2007 2006

1 to 3 months 11,066 15,823 3 to 6 months 467 311 Older than 6 months 134 31 11,667 16,165

Trade receivables are presented net of impairments. Impairment charges recorded in 2007 amount to EUR 0.2 million (2006: EUR 0.1 million).

The movement of the bad debt provision is as follows:

(EUR x 1,000) 2007 2006 Balance at January 1 492 660 Consolidations 15 - Created 218 136 Used (206 (307 Foreign currency differences (5 3 Balance at December 31 514 492

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(EUR x 1,000) 2007 2006 Bank balances 5,565 5,818 Other cash and cash equivalents 21 13 5,586 5,831

17 Cash and cash equivalents

Bank balances and cash and cash equivalents were fully non-restricted cash at December 31, 2007 and at December 31, 2006 for the Group, with the exception of a treasury deposit of EUR 0.7 million at December 31, 2006 which was released at January 2, 2007. Of the total bank balances, an amount of EUR 2.9 million was put in a savings account at December 31, 2007. The interest is attached to the 1-month Euriborrate, less 0.1%.

Bank balances at December 31, 2007 are held at the following banks: ABN AMRO Bank N.V. (EUR 3.9 million), Dresdner Bank AG (EUR 1.0 million), National Westminster Bank Plc. (EUR 0.5 million), Postbank N.V. (EUR 146,000) and Rabobank (EUR 43,000).


18 Capital and reserves

Reserve Un- Share Share Translation for own Retained appropriated Minority Total(EUR x 1,000) capital premium reserve shares earnings profits Total interest equity

As at January 1, 2006 731 16,854 465 (748 3,764 2,882 23,948 23 23,971

Appropriation of result - - - - 2,882 (2,882 - - - Dividend distribution - - - - (2,822 - (2,822 (19 (2,841 Delivered shares - - - 531 - - 531 - 531 Exercised share options - - - 199 - - 199 - 199 Costs share options - - - 79 - - 79 - 79 Consolidation of former associate - - - - - - - 240 240

Total recognised income and expense - - 99 - - 154 253 (18 235 As at December 31, 2006 731 16,854 564 61 3,824 154 22,188 226 22,414

As at January 1, 2007 731 16,854 564 61 3,824 154 22,188 226 22,414

Appropriation of result - - - - 154 (154 - - - Dividend distribution - - - - (1,435 - (1,435 (9 (1,444 Shares bought - - - (1,994 - - (1,994 - (1,994 Exercised share options - - - 129 - - 129 - 129 Delivered shares for remuneration - - - 92 - - 92 - 92 Costs share options - - - 87 - - 87 - 87 Consolidation of former associate - - - - - - - 128 128 Total recognised income and expense - - (613 - - 3,389 2,776 (1 2,775 As at December 31, 2007 731 16,854 (49 (1,625 2,543 3,389 21,843 344 22,187

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Attributable to the equity holders of the parent


19 Earnings per share

Basic earnings per shareThe calculation of basic earnings per share at December 31, 2007 was based on the profit attributable to ordinary shareholders of EUR 3,389,000 (2006: EUR 154,000) and a weighted average number of ordinary shares outstanding during the year ended December 31, 2007 of 7,050,000 (2006: 7,050,000), calculated as follows:

Weighted average number of ordinary shares

Diluted earnings per shareThe calculation of diluted earnings per share at December 31, 2007 was based on the profit attributable to ordinary shareholders of EUR 3,389,000 (2006: EUR 154,000) and a weighted average number of ordinary shares outstanding (diluted) during the year ended December 31, 2007 of 7,223,000 (2006: 7,166,000), calculated as follows:

Weighted average number of ordinary shares (diluted)

Authorised share capitalAuthorised share capital at December 31, 2007 and 2006 is EUR 2,500,000 and consists of 12,500,000 ordinary shares and 12,500,000 preference shares, each with a nominal value of EUR 0.10. At December 31, 2007 and 2006 no preference shares are issued.

Paid up and called up share capitalAt December 31, 2007 and at December 31, 2006 7,308,850 ordinary shares were issued. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s assets. In respect of the Company’s own shares that are held by the Group, all rights are suspended until those shares are sold.

Translation reserveThe translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations that are not integral to the operations of the Company, as well as from the translation of liabilities that hedge the Company’s investment in foreign subsidiary.

Reserve for own sharesEquity includes a reserve for the Company’s own shares which comprises the cost of the Company’s shares held by the Group. When own shares are sold, which is done on fifo (‘first-in, first-out’) basis, the difference between revenue and cost of the own shares sold is added tot the reserve. At December 31, 2007, the Group held 439,689 (2006: 169,743) of the Company’s shares, which results in a participating interest of 6.0% (2006: 2.3%). These shares are used to fund the share option plan or (partly) finance the acquisition of a subsidiary.

In 2007, the Group acquired 314,305 shares, sold 30,100 shares due to options exercised and delivered 14,259 shares for the remuneration of the CEO. In total the number of own shares held by the Company has increased in 2007 with 269,946 shares. In 2006, the Group delivered 147,094 shares, of which 69,700 shares due to options exercised and 77,394 shares as part of the financing of the acquisition of Braywood Holdings Limited.

(in thousands of shares) 2007 2006 Issued ordinary shares at January 1 7,309 7,309 Effect of own shares held (170 (316 Effect of own shares bought and sold in the year (89 57 Weighted average number of ordinary shares at December 31 7,050 7,050

(in thousands of shares) 2007 2006 Weighted average number of ordinary shares at December 31 7,050 7,050 Effect of share options on issue of shares 173 116 Weighted average number of ordinary shares (diluted) at December 31 7,223 7,166

)

)

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Basic earnings per share from continuing operationsThe calculation of basic earnings per share from continuing operations at December 31, 2006 was based on the profit from continuing operations attributable to ordinary shareholders of EUR 2,960,000 (2006: EUR 3,031,000) and a weighted average number of ordinary shares outstanding during the year ended December 31, 2007 of 7,050,000 (2006: 7,050,000).

Diluted earnings per share from continuing operationsThe calculation of diluted earnings per share from continuing operations at December 31, 2007 was based on the profit from continuing operations attributable to ordinary shareholders of EUR 2,960,000 (2006: EUR 3,031,000) and a weighted average number of ordinary shares outstanding (diluted) during the year ended December 31, 2007 of 7,223,000 (2006: 7,166,000).

20 Interest-bearing loans and borrowings

Interest-bearing loansThe interest-bearing loan, which is provided by a minority shareholder of a consolidated subsidiary, has a maturity date of December 31, 2009. On the borrowed amount, an interest is due equal to 1-year Euribor plus an uplift of 1.5%.

Other borrowingsThe agreement for the 2006 acquisition of the 76% share interest in Braywood Holdings Limited (United Kingdom) contained a put and call option on the remaining 24% interest in the issued share capital of Braywood Holdings Limited owned by the other shareholders. In December 2007, the Group acquired an additional 9.6% share interest in Braywood Holdings Limited from one of the other shareholders, who has sold his entire remaining interest. The put and call option on the remaining 14.4% minority interest in Braywood Holdings Limited can be exercised in four equal tranches in the years 2009, 2010, 2011 and 2012. Based on the estimated exercise prices for each of these tranches, the put option is valued at EUR 0.8 million as at December 31, 2007. The put option is recorded for this value under non-current liabilities, as DOCdata has the obligation to buy additional shares in Braywood Holdings Limited when the put option is exercised. The Braywood Holdings Limited consolidated balance sheets at December 31, 2007 and at December 31, 2006 have therefore for 100% been included in the consolidation.

The finance lease liabilities recorded at December 31, 2007 under non-current and current liabilities both relate to several hire purchase agreements for property, plant and equipment, which have been signed by the Group in 2007 in the United Kingdom. The final payments are due in 2011.

21 Employee benefits

Liability for defined benefit obligations

(EUR x 1,000) 2007 2006

Non-current liabilities Interest-bearing loan provided by minority shareholder 263 - Put option on third party share in Braywood Holdings Limited 750 1,862 Finance lease liabilities 44 - 1,057 1,862

Current liabilities Finance lease liabilities 76 - 76 -

(EUR x 1,000) 2007 2006 Funded obligations Present value of funded obligations 418 482 Fair value of plan assets (181 (235 Present value of net obligations 237 247 Unrecognised actuarial gains and losses 44 (5 Total funded obligations 281 242

Long-term service benefits 62 50 Total employee benefits 343 292

) )

)


Expense recognised in the income statement

Principal actuarial assumptions at the balance sheet date

Long-term service benefitsThe long-term service benefits amounting to EUR 62,000 (2006: EUR 50,000) concern the obligations resulting from certain commitments to the present employees in Germany. Share-based payments Under the 1997 Personnel Option Plan, the Group could grant share options to its employees for up to 500,000 ordinary shares. The maximum term of the share options is five years and the vesting period is three years. In 2004, options were granted for the last time under this option plan. No share options have been granted in 2005. The General Meeting of Shareholders on May 11, 2006 has approved the termination of this option plan. The outstanding share options granted under this option plan remain valid till their expiration date, in accordance with the stipulations of the option plan.

The General Meeting of Shareholders on May 11, 2006 has granted to the Management Board the authority to offer, subject to the approval by the Supervisory Board, a number of conditional share options with a maximum of 1.5% per year of the total number of outstanding ordinary shares of DOCdata N.V. These share options are issued for the long term and are offered to the Management Board and other members of the management, who have an important influence on the strategy of the Group and the execution thereof.

The liability for defined benefit obligations is insured by an insurance company. The contributions by the employer and the employee to the plan assets are paid to the insurance company. For 2007, the experience adjustments were not material.

Movements in the liability for defined benefit obligations

Movements in the fair value of the plan assets

(EUR x 1,000) 2007 2006 Present value of funded defined benefit obligations at January 1 482 505 Current service cost and interest 83 93 Actuarial gains and losses (147 (116 Present value of funded defined benefit obligations at December 31 418 482

(EUR x 1,000) 2007 2006 Current service costs 41 53 Interest on obligation 13 14 Actuarial losses - 5 Expense recognised under administrative expenses in the income statement 54 72

2007 2006 Discount rate at December 31 5.6% 4.7% Future salary increases 2% 2% Inflation 2% 2%

(EUR x 1,000) 2007 2006 Fair value of the plan assets at January 1 235 190 Company contributions 17 17 Contributions paid by employee 15 17 Return on plan assets 12 9 Actuarial gains and losses (98 2 Fair value of the plan assets at December 31 181 235

) )

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At May 29, 2006, 103,500 share options were conditionally granted with an exercise price of EUR 8.10 that was set at the average market price during the acceptance period from May 15, 2006 till May 28, 2006. Of these options 45,000 share options have been granted to the Management Board. The conditions for granting share options to the Management Board are consistent with the conditions for employees. These share options will be finally granted on May 29, 2009, provided that the share price of the DOCdata N.V. share will at least be EUR 10.10. If the share price will at least be EUR 9.60, but be lower than EUR 10.10, a total of 69,000 share options will be granted. If the share price will at least be EUR 9.10, but be lower than EUR 9.60, a total of 34,500 share options will be granted. If the share price will not exceed EUR 9.10 on May 29, 2009, no share options will be finally granted.

At May 28, 2007, 106,500 share options were conditionally granted with an exercise price of EUR 6.48 that was set at the average market price during the acceptance period from May 14, 2007 till May 27, 2007. Of these options 48,000 share options have been granted to the Management Board. The conditions for granting share options to the Management Board are consistent with the conditions for employees. These share options will be finally granted on May 28, 2010, provided that the share price of the DOCdata N.V. share will at least be EUR 10.10. If the share price will at least be EUR 9.60, but be lower than EUR 10.10, a total of 71,000 share options will be granted. If the share price will at least be EUR 9.10, but be lower than EUR 9.60, a total of 35,500 share options will be granted. If the share price will not exceed EUR 9.10 on May 28, 2010, no share options will be finally granted.

The following table summarises information about the share options outstanding at December 31, 2007: The fair value of the share options granted is recognised as an employee expense with a

corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the share options. The fair value of the share options granted is measured using a binomial lattice model, taking into account the terms and conditions upon which the share options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to share prices not achieving the threshold for vesting.

Number share Exercise price Remaining life Grant year options outstanding in EUR in years

2003 14,250 2.68 0.332004 44,050 4.48 1.252006 103,500 8.10 3.422007 106,500 6.48 4.42

268,300

A summary of the status of the Group’s share option plan as at December 31, 2007 and 2006 and changes during the years then ended is presented below:

Number of share options 2007 2006 Outstanding at January 1 194,930 174,605 Granted 106,500 103,500 Exercised (30,100 (69,700 Forfeited (3,030 (13,475

Outstanding at December 31 268,300 194,930

Average weighted exercise price in EUR 2007 2006 Outstanding at January 1 6.21 3.57 Granted 6.48 8.10 Exercised 4.27 2.86 Forfeited 2.94 3.75 Outstanding at December 31 6.57 6.21

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The following table provides a summary of the assumptions applied in the calculation of the fair value for the share options.

(*) with additional condition that a minimum share price of EUR 7.50 at the exercise is required to exercise these share options

An overview of the share options owned by those who were member of the Company’s Management Board in 2007 and/or 2006 is as follows:

(*) the 10,000 outstanding share options have the additional condition that a minimum share price of EUR 7.50 at the exercise is required to exercise these share options(**) maximum number to be granted on May 29, 2009(***) maximum number to be granted on May 28, 2010

2003 2004 2004(*) 2006 2007Fair value and parameters options options options options options Risk-free return (per annum) 3.4% 3.2% 3.3% 3.4% 4.4% 5-year volatility (per annum) 70% 70% 70% 62% 59% Dividend yield (per annum) 10% 10% 10% 10% 10%

Fair value EUR 1.06 EUR 1.57 EUR 1.60 EUR 3.14 EUR 2.22

Number share options outstanding

As at Granted / As at Exercise January 1, Expired Exercised December 31, price 2007 in 2007 in 2007 2007 (in EUR) Expiration date

M.F.P.M. Alting von Geusau2004 20,000 - 10,000 10,000 (*) 4.48 March 29, 20092006 30,000 - - 30,000 (**) 8.10 May 29, 20112007 - 30,000 - 30,000 (***) 6.48 May 28, 2012

Total 50,000 30,000 10,000 70,000

M.E.T. Verstraeten2004 4,000 - 4,000 - 4.48 March 29, 20092006 15,000 - - 15,000 (**) 8.10 May 29, 20112007 - 18,000 - 18,000 (***) 6.48 May 28, 2012

Total 19,000 18,000 4,000 33,000

22 Provisions

(EUR x 1,000) Restructuring Warranty Total Balance at January 1, 2007 - 52 52 Provisions made during the year 147 - 147 Provisions used during the year (60 (17 (77 Balance at December 31, 2007 87 35 122

) ) )


(EUR x 1,000) Restructuring Warranty Total Balance at January 1, 2007 - 52 52 Provisions made during the year 147 - 147 Provisions used during the year (60 (17 (77 Balance at December 31, 2007 87 35 122

RestructuringThe provision for restructuring relates to the estimated costs of announced reorganisations that have been approved by the Management Board. In the balance sheet at December 31, 2007 a provision of EUR 87,000 was recorded for finalising the liabilities of the Group related to the liquidation of DOCdata France.

WarrantyThe warranty provision relates to expected warranty costs concerning machines and deliveries by Industrial Automation Integrators. The provision is based on estimates made from historical warranty data associated with similar products and services. The Group expects to incur the expenses over the next year taken in consideration that warranties are limited per contract.

23 Bank overdrafts

At December 31, 2007 the Group has the following borrowing facilities:

A euro denominated facility provided by ABN AMRO Bank N.V., mainly to be used for working capital needs, with a maximum borrowing capacity of EUR 3.0 million (2006: EUR 3.0 million), which is fully unused. The interest rate is the euro base rate determined by the European Central Bank plus 1.25% and amounted to 6.55% at December 31, 2007 (2006: 5.50%). Starting January 1, 2007, the facility has a commitment fee of 0.25% per year on the total facility provided.

A euro denominated facility provided by Dresdner Bank AG, mainly to be used for working capital needs, with a maximum borrowing capacity of EUR 5.0 million (2006: EUR 5.0 million), of which EUR 0.3 million is used at December 31, 2007 (2006: nil). The interest rate, which is related to Euribor rates, amounted to 8.53% at December 31, 2007 (2006: 8.53%). Starting January 1, 2007, the facility has a commitment fee of 0.25% per year on the total facility provided.

A British pound sterling denominated facility provided per November 13, 2006 by ABN AMRO Bank N.V., mainly used for financing the acquisition of Braywood Holdings Limited, with a maximum borrowing capacity of GBP 1.5 million of which GBP 1.3 million is used at December 31, 2007 (2006: GBP.1.1 million) The interest rate is Libor plus 1.25% and amounted to 7.2% at December 31, 2007 (2006: 6.5%). The facility does not have a commitment fee.

24 Trade and other payables

25 Financial instruments

Fair value financial instrumentsFinancial instruments consist of cash and cash equivalents, trade receivables and payables, long-term debt and short-term bank facilities. The carrying amount of all financial instruments for both years approximates fair value due to the short-term nature of these instruments and because the interest rates on these instruments change with market interest rates.

Credit riskCredit risk represents the accounting loss that would be recognised at the reporting date if counter parties failed completely to perform as contracted. The Group does not have insurance for credit risk. To reduce exposure to credit risk, the Group performs on a regular basis credit evaluations of the financial condition of its customers but generally does not require collateral. At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of eachfinancial asset in the balance sheet.

Interest rate riskAt December 31, 2007, the Group is exposed to interest rate risk for the used part of the credit facilities in Germany (EUR 0.3 million) and in the United Kingdom (GBP 1.3 million) as disclosed in note 23 ‘Bank overdrafts’.

Foreign currency riskThe Group is exposed to foreign currency risk on sales, purchases, bank balances and borrowings and also participations that are denominated in a currency other than the euro. The currency giving rise to this risk is primarily British pounds. The Group had no foreign currency contracts in 2007 and in 2006.

Other financial instrumentsThe Company does not make any use of other financial instruments.

(EUR x 1,000) 2007 2006 Trade payables 7,422 6,050 Other tax payable 1,488 1,529 Other payables and accrued expenses 6,943 7,532 15,853 15,111


27 Capital commitments

At December 31, 2007 the Group has capital commitments to purchase property, plant and equipment for EUR 11,000 (2006: EUR 48,000). The commitments are settled in the next financial year.

28 Bank guarantees

At December 31, 2007 bank guarantees amounting to EUR 1.1 million were outstanding in favour of customers and suppliers in the normal course of business (2006: EUR 1.2 million).

29 Other commitments and contingent liabilities

ClaimsOne of the former directors and shareholders of Braywood Holdings Limited has served a claim to his former employer, the subsidiary Braywood Marketing Services Limited, after his resignation on May 24, 2007. This claim is subject to an Employment Tribunal procedure in the United Kingdom, but may be transferred to the High Court. In management’s opinion, there are no reasonable grounds for this claim, and therefore the Group has not recorded a liability for

26 Operating leases and rent obligations

Leases as lesseeAn expense of EUR 2.1 million is recognised as an expense concerning manufacturing facilities, equipment, office space and other properties (2006: EUR 1.5 million).

Non-cancellable operating lease rentals and rent obligations are payable as follows:

(EUR x 1,000) 2007 2006 Less than one year 2,328 1,985 Between one and five years 5,773 6,882 More than five years 1,051 410 9,152 9,277

this claim in the balance sheet as at December 31, 2007. The maximum financial exposure for the Group due to this claim can be estimated at approximately EUR 0.6 million.

In addition, a small number of claims in general is pending against the Group. While the outcome of these disputes cannot be predicted with certainty, management believes that, based upon legal advice and information received, the final decision will not materially affect the consolidated financial position of the Group. To the extent management has been able to estimate the expected outcome of these claims, a liability has been recorded in the balance sheet as at December 31, 2007.

30 Related parties

Identity of related partiesThe Group has a related party relationship with its subsidiaries, associates and with its Management Board and Supervisory Board.

Transactions with key management personnelAt this moment, the Management Board of the Company controls 59,759 (0.91%) of the voting shares of the Company (6,582,677 ordinary shares).

In addition to salary, the Group also provides the Management Board a bonus and other items and contributes to a post-employment defined benefit plan for the Chief Executive Officer (CEO) and to a post-employment defined contribution plan for the Chief Financial Officer (CFO). The Management Board can also participate in the Group’s share option program. The Group only provides the Supervisory Board a fixed annual compensation and a monthly expense allowance.

The bonus that is granted by the Supervisory Board to the Management Board is based on the bonus agreement for the year 2007. This agreement states that the bonus for the CEO will not exceed 50% and for the CFO 40% of the gross annual basis salary. The Supervisory Board has decided to grant both members of the Management Board for the year 2007 a bonus of 25% of the gross annual basis salary. This bonus is based for:• 5% of the gross annual basis salary on realisation of the first bonus step, related to the

2007 (consolidated) EBIT-budget from continuing operations for the Group, as approved by the Supervisory Board,• 15% of the gross annual basis salary on realisation of personal targets, and• 5% of the gross annual basis salary at discretion of the Supervisory Board.


(EUR x 1,000) 2007 2006 Management Board 624 525 Supervisory Board 63 63 Total 687 588

(EUR x 1,000) 2007 2006 J.A. de Vreeze (*) 18 15 E.F. van Veen (**) 15 18 J.V. Elsendoorn 15 15 D. Lindenbergh 15 15 Total 63 63

Number of ordinary shares 2007 2006 J.A. de Vreeze - - E.F. van Veen - - J.V. Elsendoorn - - D. Lindenbergh 741,301 741,301 M.F.P.M. Alting von Geusau 49,259 25,000 M.E.T. Verstraeten 10,500 6,500

Pension Additional Costs premiums pension shares Other(EUR x 1,000) Salary Bonus paid charges (and options) items Total 2007M.F.P.M. Alting von Geusau 210 53 16 26 116 12 433 M.E.T. Verstraeten 125 31 15 - 12 8 191 335 84 31 26 128 20 624

2006M.F.P.M. Alting von Geusau 185 92 16 36 16 12 357 M.E.T. Verstraeten (*) 101 43 9 - 8 7 168 286 135 25 36 24 19 525

Remuneration of Management Board and Supervisory Board is as follows:

A breakdown of remuneration in 2007 and 2006 for the Group’s Management Board is as follows:

(*) appointed per May 11, 2006. The remuneration for the whole year 2006 is presented.

A breakdown of the remuneration of the Group’s Supervisory Board in 2007 and 2006 is as follows:

(*) appointed as Chairman per May 10, 2007(**) Chairman until May 10, 2007

An overview of the ownership at December 31, 2007 and 2006 of the Company’s ordinary shares by all members at December 31, 2007 or 2006 of the Supervisory Board or the Management Board of the Group is as follows:

Note 21 ‘Employee benefits’ gives an overview of share options granted to the members of the Management Board. No share options have been granted to members of the Supervisory Board of the Group.

Other related parties transactions

AssociatesTransactions with associates are priced on an arm’s length basis. These transactions hadin 2007 and 2006 only a limited influence on the consolidated balance sheet and the consolidated income statement of the Group.


32 Subsequent events

January 21, 2008The Group has increased its interest of 30% in the issued share capital of Pegasus e-Business GmbH (formerly named ‘Pegasus Dienstleistungen GmbH’) in Münster (Germany) with an additional 40% to a majority share interest of 70%. The balance sheet and the income statement of Pegasus e-Business GmbH will be included for 100% in the consolidation of the Group starting January 1, 2008.

This share transaction results from the complete exercise of the call option agreement between the Group and the other shareholder of the company, which was part of the original sale and purchase agreement for the 30% minority interest acquired by the Group in September 2006. The valuation of the additional 40% share interest was also agreed in the original sale and purchase agreement, and is based on the same relative valuation as that for the 30% minority interest.

The Group has reported the 30% share interest in Pegasus Dienstleistungen GmbH in the consolidated balance sheet at December 31, 2007 under investments in associates. The Group’s share in the result of this company is reported in the 2007 consolidated income statement under share of profits of associates.

February 1, 2008The Group has acquired a share interest of 61.2% in the issued share capital of Hitura Limited in London (United Kingdom) for a consideration of GBP 245 thousand. The remaining shares will be bought between 2008 and 2013. The balance sheet and the income statement of Hitura Limited will be included for 100% in the consolidation of the Group starting February 1, 2008.

31 Group entities

Control of the GroupThe Group’s ultimate patent company is DOCdata N.V. (“the Company”).

Subsidiaries

Equity participation Equity participation Subsidiaries at December 31, 2007 at December 31, 2006 Netherlands Industrial Automation Integrators (IAI) B.V., Veldhoven 100% 100%DOCdata International B.V., ’s-Hertogenbosch 100% 100%DOCdata Nederland B.V., ’s-Hertogenbosch 100% 100%DOCdata Benelux B.V., Tilburg 100% 100%DOCdata Distributie Benelux B.V., Vught 100% 100%DOCdata Distribution Services B.V., Waalwijk 100% 100%Triple Deal B.V., Utrecht 70% 30%Contributie Services B.V., Utrecht 70% -DOCdata e-Commerce Solutions B.V., Waalwijk 60% 60% GermanyDOCdata Germany GmbH, Berlin 100% 100%DOCdata Germany BOD Berlin Optical Disc GmbH, Berlin 100% 100%DOCdata e-Commerce Fulfilment GmbH, Berlin 100% 100%4D upgrade GmbH, Berlin 100% -emedia spot exchange (EMX) GmbH, Berlin 85% 85%Triple Deal GmbH, Berlin 70% 44%

FranceOptical Disc de France S.A.S., Langres (*) 100% 100%

United Kingdom DOCdata (UK) Limited, London 100% 100%Ablex Limited, Telford 100% 100%DOCdata (UK) e-Holding Limited, Telford 100% 100%Braywood Holdings Limited, Telford 85.6% 76%Braywood Marketing Services Limited, Telford 85.6% 76%

(*) in liquidation, see note 2 ‘Discontinued operation’ For an overview of the associates, reference is made to note 11 ‘Investments in associates’.


33 Accounting estimates and judgements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ form those estimates.

The most important accounting estimates and judgements in the annual report are the estimations by the management concerning:• the recognition of available net operating loss carry forwards and deferred taxes;• the fair value of identified assets and liabilities of acquired activities;• the determination of necessary provisions and accruals.


December 31, December 31,(EUR x 1,000) Note 2007 2006 Assets

Fixed assets

Tangible fixed assets 2 29 8

Financial fixed assets 3 Investments in participations (185 (1,688 Loans to participations 5,046 6,831

4,861 5,143

Deferred tax assets 4 297 70 Total fixed assets 5,187 5,221

Current assets

Inventories - 122 Receivables from group companies 18,748 19,155 Taxes and social security charges 346 - Other receivables and prepayments 68 106 Cash and cash equivalents - - Total current assets 19,162 19,383

Total 24,349 24,604

Company Balance Sheet of DOCdata N.V.

) )


Company Financial Statements

December 31, December 31,(EUR x 1,000) Note 2007 2006 Assets

Fixed assets

Tangible fixed assets 2 29 8

Financial fixed assets 3 Investments in participations (185 (1,688 Loans to participations 5,046 6,831

4,861 5,143

Deferred tax assets 4 297 70 Total fixed assets 5,187 5,221

Current assets

Inventories - 122 Receivables from group companies 18,748 19,155 Taxes and social security charges 346 - Other receivables and prepayments 68 106 Cash and cash equivalents - - Total current assets 19,162 19,383

Total 24,349 24,604

December 31, December 31,(EUR x 1,000) Note 2007 2006 Liabilities and shareholders’ equity

Equity

Shareholders’ equity 5 Share capital 731 731 Share premium 16,854 16,854 Cumulative translation adjustment (49 564 Other reserves 918 3,885 Net income for the year 3,389 154 Total shareholders’ equity 21,843 22,188

Provisions 6 281 242

Current liabilities

Interest-bearing loan from Group company 1,000 - Short-term bank facilities 612 195 Liabilities to group companies 14 - Trade payables 104 39 Taxes and social security charges 45 1,608 Other liabilities and accrued expenses 450 332 Total current liabilities 2,225 2,174

Total 24,349 24,604

) )


Company Income Statement of DOCdata N.V.

(EUR x 1,000) 2007 2006 Result after taxes from participations 3,248 (505 Other income and expenses after taxes 141 659

Net income 3,389 154

)


Notes to the Company Financial Statements

1 Principles

GeneralThe Company financial statements are part of the 2007 financial statements of DOCdata N.V. With reference to the Company income statement of DOCdata N.V., use has been made of the exemption pursuant to Section 402 of Book 2 of the Netherlands Civil Code.

Principles for the measurement of assets and liabilities and the determination of the resultFor setting the principles for the recognition and measurement of assets and liabilities and determination of the result for its Company financial statements, DOCdata N.V. makes use of the option provided in Section 2:362 (8) of the Netherlands 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 Company financial statements of DOCdata N.V. are the same as those applied for the consolidated IFRS financial statements. Participating interests, over which significant influence is exercised, are stated on the basis of the equity method. These consolidated IFRS financial statements are prepared according to the standards laid down by the International Accounting Standards Board and adopted by the European Union (hereinafter referred to as IFRS). Reference is made to pages 79 to 86 for a description of these principles. By making use of this option reconciliation is maintained between the consolidated and the Company share-holders’ equity.

The share in the result of participating interests consists of the share of DOCdata N.V. in the result of these participating interests. Results on transactions, where the transfer of assets and liabilities between DOCdata N.V. and its participating interests and mutually between participating interests themselves, are not incorporated insofar as they can be deemed to be unrealised.

2 Tangible fixed assets

3 Financial fixed assets

(EUR x 1,000) Office equipment As at January 1, 2007: Cost 181 Accumulated depreciation (173 Book value 8

Changes in book value: Additions 36Depreciation (15

Book value at December 31, 2007 29

As at December 31, 2007: Cost 217Accumulated depreciation (188 Book value 29

Investments in Loans to (EUR x 1,000) participations participations Total

As at January 1, 2007 (1,688 6,831 5,143

Changes: Result after taxes from participations 3,248 - 3,248 Dividend received (1,500 - (1,500Redemptions - (1,416 (1,416Translation differences (245 (369 (614

As at December 31, 2007 (185 5,046 4,861

)

)

)

)

)

)

)

)

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)))


4 Deferred tax assets

Deferred tax assets are attributable to the following:

5 Shareholders’ equity

Reference is made to the Consolidated Financial Statements and the related notes.

The reserves for ‘Cumulative translation adjustment’ and ‘Reserve for own shares’ within shareholders’ equity represents legal reserves. Furthermore, legal reserves for in total EUR 3.1 million of the ‘Other reserves’ are considered at December 31, 2007 for:• a legal reserve of EUR 2.7 million for the book value at December 31, 2007 of acquired and own-developed software, capitalised under intangible assets;• a legal reserve of EUR 0.4 million due to a restriction at December 31, 2007 to the distributability of the retained earnings in Germany from received investment grants for the acquisition of property, plant and equipment.

6 Provisions

At December 31, 2007 provisions only consist of a pension provision of EUR 281,000 (2006: EUR 242,000).

(EUR x 1,000) 2007 2006 Inventories group company 217 - Pension obligations 80 70 Net deferred tax assets 297 70

7 Commitments and contingent liabilities

The Company forms a fiscal unity for the income taxes with Industrial Automation Integrators (IAI) B.V., DOCdata Benelux B.V., DOCdata Distribution Services B.V., DOCdata Distributie Benelux B.V., DOCdata Nederland B.V. and DOCdata International B.V. On these grounds, the Company is liable for the income tax debts of the entire group as a whole.

The liabilities at December 31, 2007 regarding rental and operational lease agreements amount to EUR 55,000 (2006: EUR 47,000). The remaining duration is for 1 to 4 years.


The Management Board,

M.F.P.M. Alting von Geusau

M.E.T. Verstraeten

The Supervisory Board,

J.A. de Vreeze

E.F. van Veen

J.V. Elsendoorn

D. Lindenbergh


To the General Meeting of Shareholders of DOCdata N.V.

AUDITOR’S REPORT

Report on the financial statementsWe have audited the financial statements of DOCdata N.V., Waalwijk, for the year 2007 as set out on pages 73 to 116. The financial statements consist of the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at December 31, 2007, the profit and loss account, statement of recognized income and expenses and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. The company financial statements comprise the company balance sheet as at December 31, 2007, the company profit and loss account for the year then ended and the notes.

Management’s responsibility Management of the company is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the management board report in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting

Other information

policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Company as at December 31, 2007, and of its result and its cash flow for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Netherlands Civil Code.

Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of the Company as at December 31, 2007, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

Report on other legal and regulatory requirementsPursuant to the legal requirement under 2:393 sub 5 part e of the Netherlands Civil Code, we report, to the extent of our competence, that the management board report is consistent with the financial statements as required by 2:391 sub 4 of the Netherlands Civil Code.

Eindhoven, March 27, 2008

KPMG ACCOUNTANTS N.V.

P. Silvis RA


Statutory Regulations concerning Profit Appropriation

Article 34 of the Articles of Association concerning dividend and reservation:

1 Profits may only be distributed after adoption of the annual accounts from which it appears that the shareholders’ equity of the Company is greater than the amount of the paid and called up part of the capital increased by the reserves that must be maintained by law.

2 Out of the profits - the credit balance of the profit and loss account - which have been made in the previous book year and with due observance of the provision in paragraph 1

of this article insofar as possible an annual dividend shall be paid to the holders of preference shares equal to a percentage of the amount which has been paid up on these

shares pursuant to a legal obligation, such percentage to be equal to the average of the European Central Bank rate of interest, adjusted according to the number of days on which this dividend payment applied, during the financial year or part of the financial year for which the dividend is paid, increased by two; on the understanding that if the preference shares were not outstanding for the whole year for which the dividend is paid the dividend shall be calculated for the period of the relevant year during which the preference shares were outstanding. Should the profit for any year be insufficient to pay dividends to the

holders of preference shares in that year, such dividends shall be paid to them out of the profit for any succeeding year, before any further profit distribution is made.

3 Further the Management Board, subject to the approval of the Supervisory Board, shall decide which part of the profit remaining after application of paragraph 2 of this article shall be reserved.

4 The remaining part of the profits after reserves have been made shall be at the disposal of the General Meeting of Shareholders for distribution to the holders of ordinary shares in proportion to their shareholdings.

5 Subject to the prior approval of the Supervisory Board, the Management Board may, prior to the adoption of the annual accounts in any financial year, resolve to distribute one or more interim dividends which shall be charged against the final dividend of the book year concerned, provided that it appears from an interim statement of assets and liabilities

signed by the Management Board as referred to in Section 2:105(4) of the Civil Code that the requirement referred to in paragraph 1 of this article concerning the Company’s assets and liabilities has been met.

6 No profit shall be distributed on shares that the Company holds in its own capital, unless a usufruct has been established on these shares or depositary receipts have been issued

for them with the Company’s cooperation. Shares that the Company holds in its own capital and on which no profit may be distributed shall be disregarded for the purpose of calculating the allocation of profits.

Article 35 of the Articles of Association concerning distributions in shares and against reserves:

1 At proposal of the Management Board, approved by the Supervisory Board, the General Meeting of Shareholders can decide that a dividend on ordinary shares will be distributed, wholly or partly, in shares of the Company instead of cash.

2 At proposal of the Management Board, approved by the Supervisory Board, the General Meeting of Shareholders can decide to grant a distribution to the holders of ordinary shares against the share premium and the free attributable reserves. Also these

types of distributions can be, wholly or partly, in shares of the Company instead of cash.

Appropriation of Result

Pursuant to Article 34 of the Articles of Association, the Management Board proposes to the General Meeting of Shareholders to distribute an amount of EUR 1.7 million (EUR 0.25 per ordinary share) out of the 2007 net income amounting to EUR 3.4 million as dividend on the outstanding ordinary shares and to add the remaining amount of EUR 1.7 million to the Other reserves. The Supervisory Board has approved this proposal. The 2007 net income has been accounted for in the Company financial statements as unappropriated profit within Sharehol-ders’ equity under Net income for the year.


Holdings in DOCdata N.V.

The following table sets forth the required disclosures of holdings in listed companies (‘Wet melding zeggenschap en kapitaalbelang in effectenuitgevende instellingen’ Wmz 2006) as at December 31, 2007 and at March 27, 2008 for DOCdata N.V.:

The disclosed participating interest percentage has been calculated by dividing the disclosed number of ordinary shares by 7,308,850 issued ordinary shares DOCdata N.V. at December 31, 2007.

(*) The number of ordinary shares owned by DOCdata N.V. relates to the situation at November 16, 2007, the date that the 5%-level was passed and thus a ‘Wmz-notification’ was sent. At December 31, 2007, DOCdata N.V. held 439,689 own ordinary shares and at this moment the Company holds 726,173 own ordinary shares (9.94%). The Company will not acquire more own shares until the withdrawal of 308,850 own shares, which will be proposed to the General Meeting of Shareholders on May 15, 2008, has been realised.

Name Number of ordinary shares In % of total

Kempen Capital Management N.V. 1,825,087 24.97%D. Lindenbergh (Blikkenburg B.V.) 741,301 10.14%R.J.H. Kruisinga 694,147 9.50%Decico B.V. 430,990 5.90%DOCdata N.V. (*) 398,072 5.45%Todlin N.V. 372,762 5.10%Navitas B.V. 370,000 5.06%J. Kluft (Delta Finance Amsterdam B.V.) 367,000 5.02%

Important dates

Record date voting right May 8, 2008

Annual General Meeting of Shareholders 2008 May 15, 2008

Cum date for dividend right May 16, 2008

Ex date May 19, 2008

Record date dividend right May 21, 2008

Payment date dividend May 26, 2008

Publication of half-year results 2008 July 17, 2008

Publication of 2008 results February 19, 2009 (*)

Annual General Meeting of Shareholders 2009 May 14, 2009 (*)

(*) dates under review

At the occasion of the publication of the half-year results and the full-year results of DOCdata N.V., the Company organises a press conference and an analyst meeting, in which the Management Board gives a verbal explanation of the published results.


30.0%

40.0%

19.0%

21.5% 21.6%22.8%

23.7%25.2%

0.0%

10.0%

20.0%

2002(Dutch GAAP)

2004 2005(restated)

2006 2007

73,381 72,93371,280

60,598 59,583

70,220

13,91015,697 15,383

13,803 14,124

17,699

2,530 3,1224,634

5,7424,702 4,493

2003(Dutch GAAP)

Revenue(EUR x 1,000)

Gross profit(EUR x 1,000)

EBITAOperating profitbefore interest, taxesand amortisation(EUR x 1,000)

Gross profit margin %


Summary Financial Information

Definitions:

Working capital: total current assets excluding cash and cash equivalents, less non-interest bearing loans and borrowingsNet operating assets: total non-current assets and total current assets excluding cash and cash equivalents, less provisions (except employee benefits) and other non-interest bearing loans and borrowingsNet debt: interest bearing loans and borrowings less cash and cash equivalentsSolvency: equity as a percentage of total assets

Consolidated figures for the years ended December 31

(*) Restated concerns consolidated Income Statement due to accounting and reporting the former French activities in the 2006 financial statements as discontinued operation(**) Figures based on Dutch GAAP

2005 (*) (EUR x 1,000) 2007 2006 (restated) 2004 2003 (**)

Consolidated Income Statement:

Revenue 70,220 59,583 60,598 71,280 72,933 Cost of sales (52,521 (45,459 (46,795 (55,897 (57,236

Gross profit 17,699 14,124 13,803 15,383 15,697

Selling and administrative expenses and other operating income and expenses (13,960 (9,476 (8,061 (10,749 (14,148

Operating profit 3,739 4,648 5,742 4,634 1,549

Net financing income/(expenses) (336 126 77 116 (254 Share of losses of associates 270 (43 (125 - -

Profit before tax 3,673 4,731 5,694 4,750 1,295 Income tax (expense) / income (714 (1,718 (2,245 (2,562 445 Minority interest - - - - 38

Profit for the period fromcontinuing operations 2,959 3,013 3,449 2,188 1,778 Profit/(loss) from discontinued operation (net of income tax) 429 (2,877 (548 - -

Profit for the period 3,388 136 2,901 2,188 1,778 Minority interest 1 18 (19 (59 - 2005 (*)

(EUR x 1,000) 2007 2006 (restated) 2004 2003 (**)

Continuing operations:

Operating profit before amortisation (EBITA) 4,493 4,702 5,742 4,634 3,122 Operating profit before depreciation and amortisation (EBITDA) 7,364 7,851 9,121 9,446 8,689

Consolidated Balance Sheet: Working capital 1,565 2,873 2,076 244 7,097 Net operating assets 19,054 18,573 13,806 15,220 19,097

Net debt (3,476 (4,133 (10,485 (8,080 (6,077 Total debt 3,243 3,560 31 209 527 Total assets 42,455 45,902 42,184 43,956 44,308 Total equity 22,187 22,414 23,971 22,953 24,983 Solvency 52.3% 48.8% 56.8% 52.2% 56.4%

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2005 (*)


Key Figures and Ratios

Definitions:

RONA: operating profit before financing result from continuing operations in % of the average net operating assetsROE: profit for the period in % of the average shareholders’ equityCurrent ratio: total current assets divided by total current liabilitiesQuick ratio: total current assets less inventory divided by total current liabilities

(EUR x 1,000 unless 2005 (*) stated otherwise) 2007 2006 (restated) 2004 2003 (**)

General information: Average number of employees 522 389 402 455 496Turnover rate of net operating assets 3.73 3.68 4.18 4.15 3.50Return on net operating assets (RONA) 19.9% 28.7% 39.6% 27.0% 7.4% Return on equity (ROE) 15.2% 0.7% 12.3% 8.9% 6.7%

Result from continuing operations: Year-on-year revenue development 17.9% (1.7% (15.0% (2.3% (0.6% Gross profit in % of revenue 25.2% 23.7% 22.8% 21.6% 21.5% Operating profit before amortisation in % of revenue 6.4% 7.9% 9.5% 6.5% 4.3% Profit for the period in % of revenue 4.8% 0.2% 4.8% 3.0% 2.4%

Property, plant and equipment / Capital usage: Capital expenditure 2,426 1,358 1,022 4,433 3,987Depreciation 2,871 3,810 4,258 4,812 5,567 Capital expenditure / Depreciation 0.85 0.36 0.24 0.92 0.72

Liquidity: Current ratio 1.28 1.34 1.73 1.45 1.85Quick ratio 1.07 1.16 1.47 1.23 1.64

Per share information (in EUR): Basic earnings per share (EPS) 0.48 0.02 0.41 0.31 0.26 Profit from normal operations 0.42 0.43 0.49 0.31 0.26 Total equity 3.10 3.15 3.43 3.34 3.65

Share price (in EUR): Highest 7.42 9.00 6.65 5.50 4.40Lowest 5.99 5.88 4.75 3.00 2.06At year-end 6.60 6.90 5.98 5.00 3.18

Consolidated figures for the years ended December 31

(*) Restated concerns Consolidated Income Statement(**) Figures based on Dutch GAAP

) ) ) )


(*) Restated concerns Consolidated Income Statement(**) Figures based on Dutch GAAP

Publications in 2007 and 2008

Press release February 9, 2007DOCdata N.V. announces the 2006 year-end results on Thursday, February 15, 2007. Press release February 15, 2007DOCdata N.V. announces results first transitional year 2006. Implementation of strategy ‘Vision 2010: “Gear to Growth”’ in full swing. Proposal to distribute a dividend of EUR 0.20 per Ordinary Share.

Press release March 30, 2007DOCdata N.V. announces that DOCdata and the Foundation ‘Stichting Preferente Aandelen DOCdata’ have terminated the option agreement. The Management of the Foundation ‘Stichting Preferente Aandelen DOCdata’ has decided to dissolve the Foundation.

Press release April 25, 2007DOCdata N.V. today publishes the 2006 annual report and the agenda for the Annual General Meeting of Shareholders to be held on May 10, 2007.

Press release May 11, 2007DOCdata N.V. announces the decisions taken by the General Meeting of Shareholders regarding the composition of the Supervisory Board.

Press release May 25, 2007DOCdata N.V. increases her share interest in payment-service-provider Triple Deal B.V.

Press release June 27, 2007DOCdata N.V. announces that the delivery of the order for passport systems to Ukraine has started.

Press release July 19, 2007DOCdata N.V. announces the 2007 half-year results. Transition to innovative e-Solutions Company is on track.

Press release August 21, 2007DOCdata reports the sale of a MicroPerf® system.

Press release December 7, 2007DOCdata increases their share interest in the e-Solutions provider Braywood Holdings Limited in the United Kingdom.

Press release December 17, 2007DOCdata/IAI enters the market for solar cell production systems.

Press release December 28, 2007DOCdata acquires Contributie Services B.V.

Press release January 16, 2008docdata presents a new corporate identity to further enhance the strategy ‘Vision 2010: Gear to Growth’.

Press release January 21, 2008docdata increases its share interest in German fulfilment company Pegasus e-Business GmbH.

Press release January 28, 2008IAI supplies passport personalisation systems to Algeria.

Press release February 1, 2008docdata acquires a majority share in UK e-commerce company.

Press release February 14, 2008DOCDATA N.V. announces its 2007 year-end results. Strategy ‘Vision 2010: Gear to Growth’ already yields rewards. Revenue increases with 18% to EUR 70.2 million. Net result realised of EUR 3.4 million with EUR 0.48 basic earnings per share. Proposal to distribute a dividend of EUR 0.25 per Ordinary Share.

Press release March 27, 2008DOCDATA N.V. will propose shareholders to withdraw shares on top of the announced dividend of EUR 0.25 per share.

All publications can be found under “Investors” on our corporate website, which can be reached through the internet address www.docdatanv.com. Here you will also find several press and analyst presentations held in 2007 and 2008.


Design by: Hein Holt - docdata commerceMartin de Louw - De Louw Grafische Vormgeving

docdata n.v. 2007 annual report - jaarverslag.com · the netherlands telephone +31 416 63 11 00 fax...

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