Dutch Civil Code

Book 2 Legal Persons

Title 2.9 Annual accounts and annual report*)

*) The accounting standards of the Netherlands are based on the Fourth Council Directive of 25 July 1978 on the annual accounts of certain types of companies (78/660/EEC) (OJ L 222, 14.8.1978, p.11) The question which accounting standards have to be applied in the Netherlands depends on the size of the legal person. Three categories are distinguished in this respect: small sized legal persons (Article 2:396), medium sized legal persons (Article 2:397) and large legal persons.
Small entities have to choose between Title 9, Book 2 of the Dutch Civil Code combined with fiscal valuations, Dutch Accounting Standards for small legal entities, Dutch Accounting Standards for medium sized and large legal entities, and EU-IFRS combined with a part of the Dutch Accounting Standards for medium sized and large legal entities.
Medium sized and large entities have to choose between Dutch Accounting Standards for medium sized and large legal entities, and EU-IFRS combined with a part of the Dutch Accounting Standards for medium sized and large legal entities.
Listed entities (independent of size) have to use EU-IFRS combined with a part of the Dutch Accounting Standards for medium sized and large legal entities.

Section 2.9.1 General provision

Article 2:360 Application of Title 2.9
- 1. The present Title (Title 2.9) applies to Cooperatives ('coöperaties'), Mutual Insurance Societies ('onderlinge waarborgmaatschappijen'), Open Corporations ('naamloze vennootschappen') and Closed Corporations ('besloten vennootschappen'). The present Title (Title 2.9) applies as well to banks as referred to in Article 2:415 and to electronic money institutions (payment institutions) as meant in Article 1:1 of the Financial Supervision Act.
- 2. The present Title (Title 2.9) applies also to limited partnerships ('commanditaire vennootschappen') and general partnerships ('vennootschappen onder firma') of which all partners are a company with shares formed under foreign law and fully liable for the debts of that partnership.
- 3. The present Title (Title 2.9) applies furthermore to Foundations ('stichtingen') and Associations ('verenigingen') that maintain one or more enterprises which, pursuant to law, must be registered in the commercial register, if the net turnover of these enterprises over two consecutive financial years, and thereafter without any interruption, over two subsequent financial years, amounts to one half or more of the amount referred to in Article 2:396, paragraph 1, under (b), as amended under Article 2:398, paragraph 4. The first sentence remains inapplicable if the Foundations ('stichtingen') or Associations ('verenigingen') are obliged, by or pursuant to law, to prepare financial statements which are equivalent to annual accounts as referred to in the present Title (Title 2.9) and which have been made public.

Section 2.9.2 General provisions regarding the annual accounts

Article 2:361 Financial statements falling within the scope of Title 2.9
- 1. ‘Annual accounts’ mean the singular annual accounts consisting of the balance sheet and profit and loss account with explanatory notes thereto, and the consolidated annual accounts if the legal person prepares consolidated annual accounts.
- 2. Cooperatives ('coöperaties'), and Foundations ('stichtingen') and Associations ('verenigingen') as meant in Article 2:360, paragraph 3, shall replace the profit and loss account by an operating account, if this is helpful to provide the insight meant in Article 2:362 paragraph 1; the statutory provisions regarding the profit and loss account shall apply to that operating account as much as possible. Statutory provisions regarding profit and loss shall apply accordingly to the operating account as much as possible.
- 3. The provisions of the present Title (Title 2.9) shall apply to annual accounts and their components, both in the form in which they are prepared by the Board of Directors and in the form in which they are adopted by the competent body of the legal person.
- 4. In the application of Articles 2:367, 2:370, paragraph 1, 2:375, 2:376, 2:377, paragraph 5, and 2:381, disclosures to be made with regard to group companies shall be made accordingly with regard to other companies:
a. which on the basis of paragraph 1, 3 and 4 of Article 2:24a may exercise rights in the legal person, regardless whether they have legal personality, or;
b. which are a subsidiary of the legal person, of a group company or of a company meant under (a).

Article 2:362 Insight in financial position; used accounting standards
- 1. The annual accounts shall provide, on the basis of generally accepted accounting principles, such an insight that an informed assessment can be made about the legal person’s property (assets and liabilities) and result and, insofar as the nature of annual accounts permits so, about its solvency and liquidity. If this is justified by the international branching pattern of its group, the legal person may prepare the annual accounts on the basis of generally accepted accounting principles applicable in one of the other Member States of the European Communities that provide the insight meant in the first sentence.
- 2. The balance sheet and explanatory notes thereto shall fairly, clearly and consistently show the size and composition of the property at the end of the financial year, expressed in assets and liabilities. The balance sheet may show the property (assets and liabilities) as it is composed with due observance of the appropriation of profit or treatment of loss or, as long as this is uncertain, with due observance of the proposal therefore. At the top of the balance sheet shall be stated whether an appropriation of profit has been processed in the balance sheet.
- 3. The profit and loss account and explanatory notes shall fairly, clearly and consistently show the profit amount for the financial year and how it is deduced from the income and expenditure items.
- 4. If necessary in order to provide the insight as meant in paragraph 1, the legal person shall disclose in the annual accounts data in supplementation of what is required under the specific statutory provisions of and pursuant to the present Title (Title 2.9). If necessary in order to provide such insight, the legal person shall depart from these statutory provisions; the reason for such depart is explained in the notes, where necessary with mention of the impact thereof on the property (assets and liabilities) and result.
- 5. The income and expenses over a financial year shall be included in the annual accounts, regardless whether they actually have lead to receipts (revenues) or expenditures in that year.
- 6. The annual accounts are adopted with due observance of what has appeared at the balance sheet date with regard to financial matters which have occurred between the preparation of the annual accounts and the General Meeting at which these accounts are discussed, as far as this is essential to provide the insight meant in paragraph 1. If it becomes clear afterwards that the annual accounts seriously fail to provide that insight, then the Board of Directors shall report this immediately to the members or shareholders and shall deposit a statement in respect thereof at the office of the commercial register; when the annual accounts have been audited in accordance with Article 2:393, an auditor’s opinion is added to that statement. A legal person of which negotiable securities are admitted for trade on a regulated market as referred to in the Financial Supervision Act, is deemed to have met the requirement of depositing a statement as meant in the second sentence at the office of the commercial register, if it has sent the statement on the basis of Article 5:25m, paragraph 6, of that Act to the Netherlands Authority for Financial Markets (AFM)
- 7. If this is justified in view of the operations of the legal person or of the branch pattern of its group, the annual accounts or just the consolidated annual accounts may be prepared in a foreign currency. The items will be described in the Dutch language, unless the General Meeting has decided to use another language for this purpose.
- 8. A legal person may prepare its annual accounts in accordance with the standards adopted by the International Accounting Standards Board and approved by the European Commission, provided that the legal person, when making use of this possibility, applies all standards adopted and approved for it. Where a legal person prepares consolidated annual accounts in accordance with the present Title (Title 2.9), it cannot prepare its singular annual accounts in accordance with the adopted and approved standards. Where a legal person prepares consolidated annual accounts in accordance with the standards referred to in the first sentence, it may in its singular annual accounts use the same valuation methods as it had used in its consolidated annual accounts.
- 9. A legal person that prepares its annual accounts in accordance with the standards referred to in paragraph 8, shall apply of the present Title (Title 2.9) only Sections 2.9.7 up to and including 2.9.10 and Articles 2:362, paragraph 6, second last sentence, paragraph 7, last sentence, and paragraph 10, 2:365, paragraph 2 , 2:373, 2:382, 2:382a, 2:383, 2:383b up to and including 2:383e, 2:389 paragraph 8 and 10, and 2:390. Banks shall also apply Article 2:421, paragraph 5.
- 10. The legal person shall disclose in the explanatory notes the standards in accordance with which the annual accounts are prepared.

Article 2:363 Arrangement of data in the annual accounts and notes
- 1. Concentrations, subdivisions and systems of ordering of data in the annual accounts and in the explanatory notes to such data must be arranged so as to obtain the insight which the annual accounts intend to provide pursuant to Article 2:362, paragraph 1. For this purpose the statutory provisions applicable by or pursuant to paragraph 6 or other Sections of the present Title (Title 2.9) have to be observed.
- 2. Where, pursuant to the present Title (Title 2.9), assets and liabilities or income and expenditures have to be included as separate items, it is not allowed to cancel them against each other in the annual accounts.
- 3. It is not necessary to disclose an item separately if that item, within the annual accounts as a whole, is of negligible importance for obtaining the legally required insight. Disclosures to be made pursuant to the present Title (Title 2.9) may be omitted if these, as well on their own as together with similar disclosures, would be of negligible importance for obtaining that insight. Disclosures to de made pursuant to Articles 2:378, 2:382 and 2:383 may not be omitted.
- 4. The layout of the balance sheet and profit and loss account may only for well-founded reasons differ from that of the previous year; the explanatory notes shall mention the differences as well as the reasons which have lead to making them.
- 5. The amount of the previous financial year shall be disclosed as much as possible with regard to each item of the annual accounts; where this is necessary for the sake of comparability, this amount shall be transformed, and the difference resulting from it shall be explained in the notes.
- 6. By Order in Council the Minister of Justice may issue standard forms and further rules for the layout of annual accounts of the legal persons pointed out in that Order in Council. In the application thereof the layout, names and description of the items therein shall be adapted to the nature of the legal person’s enterprise, to the extent permitted under the Order in Council.

Section 2.9.3 Requirements for the balance sheet and the explanatory notes thereto

Subsection 2.9.3.1 Main layout of the balance sheets

Article 2:364 Fixed and current assets; liabilities
- 1. The assets on the balance sheet are shown separately as fixed and current assets, depending on whether they are intended to be used sustainably in the performance of the operations of the legal person.
- 2. The fixed assets are identified separately as intangible, tangible and financial assets.
- 3. The current assets are identified separately as inventories (goods in stock), accounts receivables (debt-claims), marketable securities, cash, and, if they are not listed among the accounts receivables (debt-claims), accrued assets.
- 4. The liabilities are identified separately as equity capital, provisions, accounts payable (debts) and, if they are not listed among the accounts payable (debts), deferred liabilities.

Subsection 2.9.3.2 Assets

Article 2:365 Intangible fixed assets
- 1. The intangible fixed assets are identified separately as:
a. costs connected with the incorporation (formation of the legal person) and the issuance of shares;
b. costs of research and development;
c. costs of acquisition in respect of concessions, governmental permits (licenses) and intellectual property rights;
d. costs of goodwill acquired from a third party;
e. advanced payments on intangible fixed assets.
- 2. As far as the legal person has capitalized the costs (charges) mentioned under paragraph 1, point (a) and (b), it must explain these items and it must keep a reserve to the amount thereof.

Article 2:366 Tangible fixed assets
- 1. The tangible fixed assets are identified separately as:
a. land and buildings;
b. machinery and equipment;
c. other fixtures and fittings, tools and administrative equipment;
d. tangible fixed business assets in progress and advance payments on tangible fixed assets;
e. tangible fixed assets not to be used in the production process.
- 2. If the legal person only has a limited property right or a long-lasting personal right of use in or with respect to intangible fixed assets, this will be disclosed.

Article 2:367 Financial fixed assets
The financial fixed assets are identified separately as:
a. shares, depository receipts of shares and other forms of participating interests in group companies;
b. other participating interests;
c. accounts receivable from (debt-claims against) group companies;
d. accounts receivable from (debt-claims against) other legal persons and partnerships which have a participating interest in the legal person or in which the legal person holds a participating interest;
e. other marketable securities;
f. other receivables (debt-claims), with separate mention of debt-claims arising from loans and advance payments to members or holders of registered shares.

Article 2:368 Overview of value movements; conversion actual to historical value
- 1. Changes in value which have occurred over the year regarding each of the items which form a part of the fixed assets are shown in a balanced overview. It reveals for each item:
a. the carrying amount (book value) at the beginning of the year;
b. the total of accumulated values at which assets acquired during the financial year are booked, and the total of the carrying amounts (book values) of assets which are no longer at the disposal of the legal person at the end of the year;
c. revaluations over the financial year in conformity with Article 2:390, paragraph 1;
d. depreciations, decreases in value and the amounts thereof over the financial year;
e. the carrying amount (book value) at the end of the year.
- 2. Furthermore, for each of the items forming a part of the fixed assets, shall be mentioned:
a. the total of accumulated revaluations relating to the assets present at the balance sheet date;
b. the total of accumulated depreciations and decreases in value at the balance sheet date.

Article 2:369 Inventories (goods in stock)
Inventories (goods in stock) forming a part of the current assets are identified separately as:
a. raw materials and consumables;
b. work in progress for production of goods or services;
c. finished goods and commodities (goods purchased for resale);
d. advanced payments on inventories (on goods in stock).

Article 2:370 short-term receivables (debt-claims)
- 1. Receivables (debt-claims) forming a part of the current assets are identified separately as:
a. accounts receivable from (debt-claims against) trade debtors;
b. accounts receivable from (debt-claim against) group companies;
c. accounts receivable from (debt-claims against) other legal persons and partnerships with a participating interest in the legal person or in which the legal person holds a participating interest;
d. called-up contributions for issued (share) capital;
e. other receivables (debt-claims), except those to which Articles 2:371 and 2:372 are applicable, and with separate disclosure of debt-claims arising from loans and advanced payments to members or holders of registered shares.
- 2. For each of the groups of receivables (debt-claims) listed in paragraph 1 shall be indicated with regard to which amount the residual maturity is longer than one year.

Article 2:371 Marketable securities
- 1. Where shares and other forms of (equity) interests in companies as meant in Article 2:361, paragraph 4, which are not included in the consolidation, form a part of the current assets, these will be identified separately as marketable securities. Disclosed will be the total value of other marketable securities which form a part of the current assets that are admitted to be traded on a regulated market or multilateral trading facility as referred to in Article 1:1 of the Financial Supervision Act or to be traded through a system comparable with a regulated market or multilateral trading facility in a State which is not a Member State of the European Communities.
- 2. With regard to marketable securities will be disclosed to what extent these are not at the free disposal of the legal person.

Article 2:372 Liquid assets
- 1. Liquid assets (available funds) are identified as cash in hand and cash at a bank or giro-institution and as bills of exchange and cheques held in portfolio.
- 2. With regard to liquid assets will be disclosed to what extent these are not at the free disposal of the legal person.

Subsection 2.9.3.3 Equity capital and liabilities

Article 2:373 Equity capital and reserves
- 1. Equity capital is identified separately as:
a. issued (share) capital;
b. share premiums;
c. revaluation reserves;
d. other legal (statutory) reserves, distinguished by type;
e. reserves required by the articles of incorporation;
f. other reserves;
g. not distributed profits, with separate mention of the results after tax for the financial year, as far as the intended use thereof is not processed in the balance sheet.
- 2. When the issued (share) capital is not fully paid up, then, instead thereof, the paid up capital will be disclosed or, where contributions have been called up, the paid up and called up capital. In that case the issued capital shall be disclosed.
- 3. The capital will not be reduced by the amount of shares in the capital of the legal person or by the amount of depositary receipts of such shares that are held by the legal person itself or by its subsidiary.
- 4. Legal (statutory) reserves are those reserves which must be maintained under Articles 2:67a paragraph 2, 2:67a paragraph 3, 2:94a paragraph 3 under (f), 2:178a paragraph 2, 2:178a paragraph 3, 2:365 paragraph 2, 389 paragraph 6, and 2:390.
- 5. In annual accounts prepared in foreign currency, the item referred to in paragraph 1, under (a), will be included in that currency at the currency rate on the balance sheet date. Where the articles of incorporation define the issued share capital in another currency than the currency in which the annual accounts are adopted, the item meant in paragraph 1, under (a), shall be mentioned as well this currency rate and the amount of that other currancy.

Article 2:374 Provisions for liabilities and charges
- 1. The balance sheet shall include provisions for liabilities, identified to their nature and clearly described, which, from a prospective on the balance sheet date, may be seen as likely or certain, but with regard to which it is still unknown to what extent or when they will arise. Provisions may be included also for expenditures which are to be paid in the next financial year, as far as the payment of these expenditures originates from an event before the ending of the financial year and the provision seeks to ensure even distribution of costs and charges over a number of years.
- 2. A decrease in value of an asset shall not be expressed by creating a provision.
- 3. The provisions shall be subdivided according to the nature of liabilities, losses and expenses for which they are made; they are defined accurately according to that nature. The explanatory notes shall indicate as much as possible to which extent the provisions are to be seen as long-term provisions.
- 4. The following provisions will in any event be identified separately:
a. the provision for tax liabilities that may arise after the financial year, but that are to be allocated to the financial year or a prior financial year, including the provision for taxes that may result from a valuation above the acquisition or production price;
b. the provision for pension liabilities.

Article 2:375 Liabilities (debts)
- 1. Liabilities are identified separately as:
a. debenture loans, mortgage bonds (pledge bonds)) and other loans, with separate mention of convertible loans;
b. amounts owed to banks;
c. advanced payments received on contract orders as far as these are not already deducted from asset items;
d. debts to suppliers and trade credits and advances;
e. money orders, bills of exchange and checks to be paid;
f. amounts owed to group companies ;
g. debts to legal persons and partnerships that have a participating interest in the legal person or in which the legal person holds a participating interest, to the extent not already disclosed under (f);
h. amounts owed in respect of taxes, and contributions owed pursuant to social insurances;
i. amounts owed in respect of pensions;
j. other liabilities.
- 2. For each of the categories of liabilities (debts) listed in paragraph 1 shall be disclosed with regard to which amount the residual maturity is longer than one year, with mention of the interest rate applicable, and with separate mention of the amount for which the residual maturity is more than five years.
- 3. For each of the categories of liabilities (debts) listed in paragraph 1 shall be disclosed for which liabilities (debts) real security (collateral) has been provided and which type of real security (pledge, mortgage) it concerns. Disclosed shall be also with respect to which liabilities (debts) the legal person has committed itself, whether or not conditionally, to encumber or not to encumber assets, insofar as this is necessary to provide the insight meant in Article 2:362, paragraph 1.
- 4. Indicated shall be to which amount liabilities (debts) are ranked as subordinated (junior) debts in comparison to other debts; the nature of this subordination shall be explained in the notes.
- 5. Where the amount which must be repaid on a debt is more than the amount received from the creditor, the difference [which is seen as interest paid in advance] may be booked on the balance sheet as an asset item until, at the latest, the date of redemption, provided it is included separately.
- 6. Where the legal person has to repay loans which are included as liabilities (debts) with a residual maturity of more than one year, but which have to be repaid during the financial year following the one to which the annual accounts relate, the involved amount shall be disclosed.
- 7. With regard to convertible loans the conditions for conversion shall be disclosed.

Article 2:376 Conditional debts
When the legal person has made itself liable for debts of others or when it still runs the risk for discounted bills of exchange or checks, then the liabilities resulting therefrom, to the extent that no provision therefore has been included in the balance sheet, shall be disclosed and classified according to the type of security (collateral) provided. Liabilities entered into on behalf of group companies shall be disclosed separately.

Section 2.9.4 Requirements regarding the profit and loss account and the explanatory notes thereto

Article 2:377 Profit and loss account
- 1. The profit and loss account shall identify separately:
a. the income and expenses from normal business operations, taxation thereon, and the result from normal business operations after tax;
b. extraordinary income and expenses, taxation thereon and the extraordinary result after tax;
c. other taxes;
d. the result after tax.
- 2. The income and expenses from normal business operations are subdivided either in accordance with paragraph 3 or in accordance with paragraph 4.
- 3. Identified separately are:
a. the net turnover;
b. the increase or decrease in finished goods in stock and in work in progress compared to the previous balance sheet date;
c. the production for the enterprise of the legal person itself that has been booked as an asset item;
d. other operating income;
e. wages;
f. social security contributions, with separate mention of pension contributions;
g. the costs of raw materials and of consumables, and other external costs;
h. depreciations and decreases in value charged to the intangible and tangible fixed assets, subdivided into those categories of assets ;
i. decreases in value of current assets, to the extent that these surpass the decreases in value common for the legal person;
j. other operating expenses;
k. results from participating interests;
l. income from other marketable securities and claims forming a part of the fixed assets;
m. other interest receivable and similar income;
n. changes in value of financial fixed assets and of marketable securities forming a part of the current assets;
o. interest payable and similar costs.
- 4. Identified separately are:
a. the net turnover;
b. the cost price (production cost) of turnover, excluding interest costs integrated in the cost price, but including depreciations and decreases in value;
c. The gross turnover, being the balance of items (a) and (b);
d. selling expenses (distribution costs), including depreciations and extraordinary decreases in value;
e. general administrative costs, including depreciations and decreases in value;
f. other operating income;
g. results from participating interests;
h. income from other marketable securities and claims forming a part of the fixed assets;
i. other interest receivable and similar income;
j. changes in value of financial fixed assets and of marketable securities forming a part of the current assets;
k. interest payable and similar costs.
- 5. In respect of the items under (k) – (o) of paragraph 3 and of the items (g) - (k) of paragraph 4 shall be disclosed separately the income and expenses arising from a relationship with group companies.
- 6. ‘Net turnover’ is understood as the result from the supply of goods and services from the business of the legal person, with deduction of discounts and similar reductions and of taxes levied on turnover (turnover net of tax).
- 7. Income and expenses not resulting from the normal course of business of the legal person are regarded as extraordinary income and expenses. Unless such income and expenses are of minor significance for the assessment of the result, they shall be explained in the notes according to their nature and extent; the same applies to income and expenses that have to be allocated to another financial year, as far as these are not included as extraordinary income and expenses.

Section 2.9.5 Special rules regarding the explanatory notes

Article 2:378 Statement of movements of equity capital
- 1. Movements in equity capital during the financial year are displayed in a statement. It reveals :
a. the amount of each item at the beginning of the financial year;
b. additions to and reductions in each item over the financial year, distinguished by nature;
c. the amount of each item at the end of the financial year.
- 2. The list distinguishes the items for paid up and called up (share) capital by type (class) of shares. Separately identified are the final level and data with regard to movements of shares in the capital of the legal person and of depository receipts of such shares, which are held by the legal person itself or which are held or caused to be held by its subsidiary for its own account . Disclosed shall be which of the items for equity capital have been decreased with the acquisition price or book value.
- 3. Specified will be in which form payments (contributions) on shares have been made that became due and demandable during the financial year or that have been made voluntarily, with mention of the businesslike content of the juridical acts to which Article 2:94, 2:94c, 2:204 or 2:204c applies, that are performed in the financial year. An Open Corporation ('naamloze vennootschap') shall disclose every acquisition and disposal (alienation) of its own shares and depository receipts thereof that has been performed for its own account, with mention of the reasons for acquisition, the number, the nominal amount and the agreed price of the shares and depository receipts involved in each transaction and the part of the capital they represent.
- 4. An Open Corporation ('naamloze vennootschap') shall disclose data regarding the number, type (class) and nominal amount of its own shares or depositary receipts thereof:
a. which the Open Corporation itself or others for its account have pledged at the balance sheet date;
b. which the Open Corporation itself or a subsidiary holds at the balance sheet date pursuant to an acquisition under application of Article 2:98 paragraph 5.

Article 2:379 Information on participating interests and group relations
- 1. The legal person shall disclose the name, domicile and the provided part in the issued (share) capital of each company:
a. of which it provides or causes to provide, solely or jointly with one or more subsidiaries, for its own account at least one fifth of the issued (share) capital, or;
b. in which it is a partner who, towards the creditors, is fully liable for the debts of the company.
- 2. For each company meant in paragraph 1, under (a), the legal person shall disclose as well the amount of equity capital and the result according to the last adopted annual accounts, unless:
a. the legal person consolidates the financial data of the company;
b. the legal person accounts for the company in its balance sheet or consolidated balance sheet in conformity with Article 2:389 paragraph 1 up to and including 7;
c. the legal person does not consolidate the financial data of the company because of the insignificant importance thereof or on the basis of Article 2:408, or;
d. less than one half of the (share) capital of the company is provided by the legal person for its own account, and the company lawfully makes use of the possibility not to publish its balance sheet.
- 3. Unless such company in general lawfully makes use of the possibility not to disclose its interest in the legal person, the legal person shall disclose:
a. the name and address of the company at the head of its group, and;
b. the name and address of each company which consolidates its financial data in its published consolidated annual accounts, and the place where copies of those consolidated annual accounts are available against payment of no more than cost price.
- 4. The Minister of Economic Affairs may, upon request, grant relief from the obligations referred to in paragraphs 1, 2 and 3, when there is a well-founded fear that disclosure of these financial data may cause serious damage. This relief may be granted each time for at the most five years. The explanatory notes shall disclose when such a relief is granted or requested for. Pending such a request a disclosure of the financial data is not required.
- 5. Disclosures to be made pursuant to the present Article and Article 2:414 may be disclosed jointly. The legal person may deposit the part of the explanation that contains these disclosures separately at the commercial register for inspection by everyone, on the condition that both parts of the explanation refer to each other.

Article 2:380 Turnover by economic sector and by country
- 1. If the organisation of the enterprise of the legal person is arranged as to perform activities in various sectors of industry, insight is provided, by means of figures (numeric characters), into the extent to which each of the types of these activities contribute to the net turnover.
- 2. The net turnover is split accordingly into various territorial areas (countries) where the legal person supplies goods and services.
- 3. Article 2:379, paragraph 4, applies accordingly.

Article 2:381 Important financial obligations in future
- 1. Disclosed shall be to which important financial obligations, not disclosed in the balance sheet, the legal person has committed itself for a number of future years, such as those arising from long-term contracts. Such obligations towards group companies shall be shown separately. Article 2:375, paragraph 3, applies accordingly.
- 2. The nature, business purpose and the financial consequences of non-balance sheet arrangements of the legal person will be disclosed as well, if the risks or advantages resulting from these arrangements are of importance and as far as publication of these risks or advantages is necessary for an assessment of the financial position of the legal person.
- 3. Disclosed shall be which transactions of importance have not been entered into by the legal person under normal market conditions with affiliated parties, the volume (extent) of such transactions, the nature of the relationship with the affiliated party and other information about those transactions necessary for providing insight into the financial position of the legal person. Information about individual transactions may, in accordance with its nature, be combined, unless separate information is necessary to provide insight into the effects of transactions with affiliated parties on the financial position of the legal person. Disclosure of transactions between two or more members of a group may be omitted, provided that subsidiaries which are party to the transaction are fully owned by one or more members of the group.

Article 2:381a Financial instruments
Where financial instruments are valued at current value, the legal person shall disclose:
a. if the current value has been determined by using valuation models and valuation techniques: the assumptions underlying them;
b. for each class of financial instruments: the current value, the changes in value included in the profit and loss account, the changes in value included in the revaluation reserve on the basis of Article 2:390, paragraph 1 , and the changes in value which have been deducted from the free reserves, and;
c. for each class of derivative financial instruments: information about the volume (extent) and nature of the instruments and the conditions which may affect the amount, date and certainty of future cash flows.

Article 2:381b Information on financial instruments
Where financial instruments are not valued at current value, the legal person shall disclose:
a. for each class of derivative financial instruments:
1°. the current value of the instruments, if that value can be determined by means of one of the methods prescribed under Article 2:384, paragraph 4;
2°. information about the volume (extent) and nature of the instruments, and;
b. for financial fixed assets valued at an amount higher than their current value and without implementation of the second sentence of Article 2:387, paragraph 4:
1°. the carrying amount (book value) and the current value of the individual assets or of appropriate groupings of individual assets;
2°. the reasons why the carrying amount (book value) has not decreased and the nature of the evidence underlying the conviction that the carrying amount (book value) will be realized.

Article 2:382 Manning level
Disclosed shall be the average number of employees employed by the legal person during the financial year, divided in a manner appropriated to the organization of the enterprise. The Corporation shall thereby state the number of employees employed outside the Netherlands. Where Article 2:377, paragraph 3, has not been applied to the profit and loss account, the data required pursuant to point (e) and (f) of that Article shall be disclosed.

Article 2:382a Remuneration of the external auditor
- 1. Disclosed shall be the total amount of remuneration (fees) charged to the legal person for auditing the annual accounts, for other audit engagements, for advisory services in the tax area and for other non-audit services performed by the external auditor and the accounting organisation mentioned in Article 1, first paragraph, under (a) and (e), of the Supervision Audit Organisations Act ('Wet toezicht accountantsorganisaties').
- 2. If the legal person has subsidiaries or if it consolidates the financial data of other companies, the remuneration (fees) charged to them will be included in the disclosure meant in paragraph 1.
- 3. Remuneration (fees) do not have to be disclosed by a legal person of which the financial data are consolidated in consolidated annual accounts to which, under the applicable law, the Regulation of the European Parliament and the Council on the application of international accounting standards or the Seventh Council Directive of the European Communities on company applies.

Article 2:383 Payments, loans and guarantees to (former) Directors and Supervisory Directors
- 1. Disclosed shall be the total amount of remuneration, including pension contributions and other benefits, on behalf of the Directors and former Directors jointly and, separately, on behalf of the Supervisory Directors and former Supervisory Directors jointly. The last sentence refers to the amounts which are charged to the legal person in the financial year. If the legal person has subsidiaries or if it consolidates the financial data of other companies, then the amounts which are charged to them in the financial year are to be included in the before meant disclosure. A disclosure that may be traced back to one single natural person may be omitted.
- 2. With the exception of the last sentence, paragraph 1 also applies to the total amount of loans, advanced payments and guarantees granted to or on behalf of Directors and Supervisory Directors of the legal person by the legal person, its subsidiaries or companies of which it consolidates data. Disclosed shall be the still outstanding amount, the interest rate, the most important other conditions and the repayments made during the financial year.

Article 2:383a Allocation of profit of Associations and Foundations conducting an enterprise
Associations ('verenigingen') and Foundations ('stichtingen') meant in Article 2:360, paragraph 3, shall disclose the allocation of profit according to their articles of incorporation as well as the way in which the profit after tax is allocated.

Article 2:383b Field of application of Articles 2:283c - 2:383e
Articles 2:283c up to and including 2:283e apply, in derogation from Article 2:383, to Open Corporations ('naamloze vennootschappen'), with the exception of Open Corporations ('naamloze vennootschappen') whose articles of incorporation provide for registered shares only, contain a restriction on transfer of shares, and do not allow that depository receipts to bearer of their shares are issued in collaboration with the Open Corporation ('naamloze vennootschap').

Article 2:383c Remuneration of (former) Directors and Supervisory Directors
- 1. The Corporation ('naamloze vennootschap' or 'besloten vennootschap') shall, for each Director, specify the amount of remuneration, divided into:
a. periodically paid remuneration;
b. remuneration that has to be paid in future;
c. payments upon termination of employment;
d. profit-sharing and bonus payments,
to the extent that these amounts are charged to the legal person in the accounting year.
If the Corporation has paid a remuneration in the form of a salary bonus which is based, either in full or in part, on the realization of targets (goals) set by or on account of the Corporation, it will mention this too. In doing so, it will mention whether these targets have been achieved in the involved year.
- 2. The Corporation shall specify, for each former Director, the amount of remuneration, divided into remunerations which have to be paid in future and payments upon termination of employment, all to the extent that these amounts are charged to the legal person in the financial year.
- 3. The Corporation shall specify, for each Supervisory Director, the amount of remuneration, to the extent that this amount has been charged to the legal person in the financial year. If the Corporation has granted a remuneration in the form of profit-sharing or bonus payments, it shall disclose these separately, with mention of the reasons underlying the decision to grant this form of remuneration to a Supervisory Director. The last two sentences of paragraph 1 shall apply accordingly.
- 4. The Corporation shall, for each former Supervisory Director, indicate the amount of remuneration to the extent that this amount has been charged to the legal person in the financial year.
- 5. If the Corporation has subsidiaries or if it consolidates financial data of other companies, the amounts charged to them will be included in the before meant disclosures, allocated to the category of remuneration referred to in paragraph 1 up to and including 4.
- 6. The Corporation shall specify the amount of the remuneration that has been adjusted or claimed back as referred to in Article 2:135, paragraph 6 up to and including 8.

Article 2:383d Option rights granted to Directors, Supervisory Directors and employees
- 1. A Corporation ('naamloze vennootschap' or 'besloten vennootschap') that has granted rights (option rights) to Directors or employees to subscribe for or acquire shares in the (share) capital of the Corporation or a subsidiary, shall disclose, for each Director separately and for all employees jointly:
a. the exercise price of the rights and the price of the underlying shares in the (share) capital of the Corporation if that exercise price is lower than the price of those shares at the time on which the rights (option rights) were granted;
b. the number of the still remaining unexercised rights (option rights) at the beginning of the financial year;
c. the number of rights (option rights) granted by the Corporation in the financial year, with mention of the related conditions; if such conditions change during the financial year, these changes shall be disclosed separately;
d. the number of rights (option rights) exercised in the financial year, in any event with mention of the number of shares for which these rights (option rights) were exercised and at which exercise prices they were exercised;
e. the number of rights (option rights) not yet exercised at the end of the financial year, with mention of:
– the exercise price of the rights (option rights) granted;
– the remaining maturity period of the unexercised rights (option rights);
– the most important conditions for the exercise of rights (option rights);
– any financing arrangement which in connection with the granting of rights (option rights) has been made, and;
- other data of importance for assessing the value of the rights (option rights) concerned;
f. where relevant: the criteria used by the Corporation for granting or exercising rights (option rights).
- 2. A Corporation that has granted rights (option rights) to Supervisory Directors to subscribe for or acquire shares in the (share) capital of the Corporation or a subsidiary, shall furthermore disclose, for each Supervisory Director separately, these rights and the reasons underlying the decision to grant such rights to the Supervisory Director. Paragraph 1 shall apply accordingly.
- 3. The Corporation shall disclose how many shares in the (share) capital of the Corporation have been bought back at the balance sheet date or will be bought back after the balance sheet date and how many new shares are issued (subscribed) at the balance sheet date or will be issued (subscribed) after the balance sheet date for the purpose of exercising the rights (option rights) referred to in paragraph 1 and paragraph 2.
- 4. For the purposes of the present Article, shares also means depository receipts of shares issued in collaboration with the Corporation.

Article 2:383e Loans, advanced payments and guarantees to Directors and Supervisory Directors of Open Corporations
The Corporation ('naamloze vennootschap' or besloten venootschap) shall specify the amount of loans, advanced payments and guarantees granted to or on behalf of each Director and each Supervisory Director of the Corporation by the Corporation, its subsidiaries or companies of which it consolidates data. Disclosed shall be the still outstanding amount, the interest rate, the most important other conditions and the repayments made during the financial year.

Section 2.9.6 Provisions regarding the principles for valuation and for the assessment of results

Article 2:384 Valuation principles
- 1. When the legal person chooses a principle for the valuation of an asset or liability and for the assessment of results, it shall be guided by the requirements of Article 2:362, paragraph 1 up to and including 4. The acquisition price and the production price qualify as such principle.
- 2. In applying such principles, prudence is observed. Profits are only included when they are realised on the balance sheet date. Liabilities that originate from an event prior to the end of the financial year, shall be taken into account if they became known prior to the preparation of the annual accounts. Foreseeable liabilities and potential losses that originate from an event prior to the end of the financial year may be taken into account if they became known prior to the preparation of the annual accounts.
- 3. The valuation of assets and liabilities shall be based on the assumption that all the activities of the legal person to which those assets and liabilities are helpful, are to be continued, unless that assumption is incorrect or its accuracy is subject to reasonable doubt; then this will be clarified, with mention of the impact thereof on capital and result.
- 4. Rules may be set by Order in Council concerning the content, limits and procedures for the application of a valuation at current value.
- 5. The principles for valuing assets and liabilities and for the assessment of the result will be clarified in respect of each of the items. The principles for the conversion of amounts denominated in foreign currency are clarified, with mention of how exchange differences in the rate of exchange are processed.
- 6. A valuation of assets and liabilities and an assessment of the result may only for well-founded reasons take place on the basis of other principles than those applied in the preceding financial year. The reasons for this change shall be clarified in the explanatory notes. Insight is provided as well into its significance for capital and result, according to restated figures for the financial year or the preceding financial year .
- 7. A change in value in:
a. financial instruments;
b. other investments, and;
c. agricultural stocks for which frequent market quotations are available and that may be valued at current value pursuant to paragraph 1,
may, in derogation from the second sentence of paragraph 2, be included immediately in the result, unless the present Section (Section 2.9.6) provides otherwise. Changes in value in derivative financial instruments, other than those referred to in paragraph 8, may, if necessary in derogation from paragraph 2, be credited or debited immediately to the result.
- 8. Changes in value in financial instruments that serve and are effective to cover risks relating to assets, assets on order and other obligations not processed in the balance sheet, or relating to intended transactions, will be immediately credited or charged to the revaluation reserve, as far as this is necessary to ensure that these changes in value are processed in the result in the same period as the change in value which they seek to cover .

Article 2:385 Different valuation; valuation of interests in subsidiaries
- 1. Assets and liabilities shall be valued separately as far as their significance is different where it concerns the provision of insight as meant in Article 2:362, paragraph 1.
- 2. The valuation of similar components of inventories (goods in stock) and marketable securities may be made by applying weighted average prices according to the rules ‘first in, first out’ ( FIFO ), ‘last in, first out’ ( LIFO), or similar rules.
- 3. Tangible fixed assets and inventories (goods in stock) consisting of raw materials and consumables that are being replaced regularly and of which the total value is of minor significance, may be included at a fixed quantity and fixed value, if their quantity, composition and value are subject only to minor changes.
- 4. The assets meant in Article 2:365, paragraph 1, under (d) and (e), are included to at the most the relevant expenditures made thereon, reduced with depreciation.
- 5. Shares in the (share) capital of the legal person or depositary receipts of such shares, held by the legal person itself or by others on instigation of the legal person, may not be capitalized. The value allocated to an interest in a subsidiary shall be reduced, whether or not proportionate to that interest, with the acquisition price of shares in the legal person and of depository receipts of such shares, that are held by this subsidiary for its own account or that are held by others on instigation of that subsidiary for account of that subsidiary; if that subsidiary has acquired those shares or depository receipts prior to the moment on which it became a subsidiary of the legal person, then their carrying value (book value) at that moment or a proportional part thereof shall be deducted.

Article 2:386 Depreciations
- 1. Depreciations (amortizations) are made regardless of the result over the financial year .
- 2. The methods according to which depreciations are calculated shall be clarified in the explanatory notes.
- 3. Costs made in relation to the formation (incorporation) of the legal person or the issuance of shares, that are capitalized, may be depreciated over a maximum period of five years. The costs of research and development, to the extent that they are capitalized, and the capitalized costs of goodwill are depreciated according to the expected useful economic life. The depreciation period may only exceed five years if the goodwill may be allocated to a considerably longer period of time; then this depreciation period must be mentioned and reasoned.
- 4. Fixed assets with a limited useful economic life are depreciated annually according to a system based on the expected future useful economic life.
- 5. The part of a debt (liability) that, in agreement with Article 2:375, paragraph 5, is capitalized, shall be depreciated annually for a reasonable part up until redemption.

Article 2:387 Other decreases in value of assets
- 1. Decreases in value (impairments) of assets are taken into account regardless of the result over the financial year.
- 2. Current assets are valued at current value if that value is lower on the balance sheet date than the acquisition or production price. The valuation is made at another lower value if this serves the insight to be provided under Article 2:362, paragraph 1.
- 3. If an extraordinary decrease in value of current assets reasonably may be expected in the short term, this must be taken into account in the valuation thereof.
- 4. In valuing fixed assets, a decrease of their value will be taken into account if it is to be expected that this decrease is sustainable. In valuing financial assets, decreases in value which have occurred at the balance sheet date may in any event be taken into account.
- 5. Any write-off made pursuant to the preceding paragraphs shall be charged to the profit and loss account, insofar as it has not been extracted from the revaluation reserve pursuant to Article 2:390, paragraph 3. Such a write-off shall be reversed (re-adjusted) as soon as the decrease in value has ceased to exist. Any write-off made pursuant to paragraph 3 or 4 as well as a reversal (re-adjustment) thereof shall be indicated separately in the profit and loss account or in the explanatory notes .

Article 2:388 Acquisition price and production price
- 1. The acquisition price at which an asset is valued, encloses the purchase price and the ancillary costs.
- 2. The production price at which an asset is valued, encloses the cost of acquiring the used raw materials and consumables and other costs that are attributable directly to manufacturing. The production price may also include a reasonable part of the indirect costs (overheads) and the interest on debts over the period that can be attributed to the production of the asset; in that event the explanatory notes shall mention that this interest has been capitalized.

Article 2:389 Valuation of participating interests
- 1. Participating interests in companies in which the legal person significantly uses its influence on business and financial policies, are accounted for in accordance with paragraph 2 and 3. If the legal person or one or more of its subsidiaries, solely or jointly, may to its own discretion exercise or cause the exercise of one fifth or more of the voting rights of the members, partners or shareholders, it shall be presumed that it significantly uses its influence.
- 2. The legal person assesses the net asset value of the participating interest by valuing the assets, provisions and liabilities of the company in which it participates and by calculating that company’s result on the basis of the same valuation principles as applied for the valuation and calculation of its own assets, provisions and result. This valuation method must be mentioned.
- 3. When there are insufficient data available for the legal person to assess the net asset value in accordance with the previous paragraph, it may base that valuation on another value assessed in conformity with the present Title (Title 2.9) and it will adjust that value with the amount of its share in the result of the company in which it participates and with the amount of its share in the distributions made by that company. This valuation method must be mentioned.
- 4. The annual accounts of a legal person, not being a bank as defined in Article 2:415, may account for a participating interest in a bank in accordance with Section 2.9.14. The annual accounts of a bank meant in Article 2:415, accounts for a participating interest in a legal person, not being a bank, in accordance with the requirements for banks, with the exception of Article 2:424 and without prejudice to the first sentence of paragraph 5. It is not required to apply this exception with regard to participating interests in which activities are performed that connect directly to that of a banking business.
- 5. The annual accounts of a legal person, not being an insurance company as defined in Article 2:427, may account for a participating interest in an insurance company in accordance with Section 2.9.15. The annual accounts of an insurance company meant in Article 2:427, accounts for a participating interest in a legal person, not being an insurance company, in accordance with the requirements for insurance companies, without prejudice to the first sentence of paragraph 4 of the present Article.
- 6. The legal person maintains a reserve to the amount of its share in the positive result from participating interests and of its share in direct increases in value since the first valuation was made in agreement with paragraph 2 or 3. Participating interests of which the cumulative result since that first valuation is not positive, are not taken into account in this respect. The reserve is reduced with distributions to which the legal person, since then until the moment of adoption of the annual accounts, has acquired an entitlement, and it is reduced with direct decreases in value of the participating interest; distributions which the legal person may effectuate without restrictions are deducted as well. This reserve may be converted into (share) capital. The distributions meant in this paragraph do not include distributions made in the form of shares.
- 7. If the value, made at the first valuation in agreement with paragraph 2 or 3, is less than the acquisition price or the previous carrying amount (book value) of the participating interest, then the difference will be charged visibly to the profit and loss account or to equity capital, or it will be capitalized as goodwill. In making this calculation, the acquisition price will be reduced in conformity with Article 2:385, paragraph 5.
- 8. Increases in value and decreases in value of participating interests, resulting from a conversion of the capital invested therein and of the result, which conversion is made from the currency of the participating interest into the currency in which the legal person prepares its annual accounts, are credited or debited, respectively, to a currency translation reserve. Exchange rate differences on loans entered into to cover exchange rate risks on foreign participating interests, are credited and debited as well to this reserve. The reserve can have a negative balance. When the relevant participating interest is disposed of (alienated), in full or in part, the part of the reserve that relates to the disposed (alienated) part of the participating interest shall be extracted from that reserve. If the currency translation reserve has a negative balance, no distributions can be made from the (other) reserves equivalent to the amount of that negative balance.
- 9. It is allowed to derogate from paragraph 1 for well-founded reasons to be mentioned in the explanatory notes.
- 10. Differences in equity capital and in the result according to the singular annual accounts and according to the consolidated annual accounts of the legal person are disclosed in the explanatory notes on the singular annual accounts.

Article 2:390 Revaluation reserve
- 1. Increases in value of tangible fixed assets, intangible fixed assets and goods in stock (inventories) which are not agricultural goods in stock (inventories), are added to the revaluation reserve. Increases in value of other assets which are valued at current value, are added to the revaluation reserve, unless they are added to the result pursuant to Article 2: 384. Moreover, the legal person shall create a revaluation reserve that is to be extracted from the free reserves or from the profit over the financial year, insofar as increases in value of assets that occurred during the financial year and that are still present on the balance sheet date, have been added to the result over that financial year. No revaluation reserve shall be created for assets meant in the previous sentence for which frequent market quotations are available. No distributions can be made from the (other) reserves for an amount equivalent to the amount of deferred losses on financial instruments as meant in Article 2:384, paragraph 4, that have been charged to the revaluation reserve. The revaluation reserve may be reduced by deferred tax liabilities related to assets that are revaluated at a higher value.
- 2. The revaluation reserve may be converted into (share) capital.
- 3. The revaluation reserve shall not exceed the difference between the carrying amount (book value) based on the acquisition price or production price and the carrying amount (book value) based on the current value of the assets to which the revaluation reserve relates, as applied during the valuation. This reserve is reduced with the amount, which is included in the reserves for a particular asset, when that asset is disposed of (alienated). A decrease in value of an asset, which is valued at current value, is charged to the revaluation reserve as far as that asset previously had been upgraded in favour of the revaluation reserve.
- 4. The reductions of the revaluation reserve which are added in favour of the profit and loss account are shown in a separate item.
- 5. The explanatory notes shall clarify whether and in which way, in relation to the revaluation, account is taken of the impact of taxes on capital and profit .

Section 2.9.7 Annual Report

Article 2:391 Minimum requirements annual report
- 1. The annual report shall provide a true and fair view of the situation on the balance sheet date, of the development during the financial year and of the results of the legal person and of group companies of which the financial data are included in its annual accounts. The annual report shall contain, in accordance with the size and complexity of the legal person and group companies, a balanced and complete analysis of the situation on the balance sheet date, the development during the financial year and the results. If necessary for a good understanding of such development, of the results or of the situation of the legal person and group companies, the analysis comprises both, financial and non-financial performance indicators, including environmental and employee matters. The annual report shall provide also a description of the main risks and uncertainties with which the legal person is faced. The annual report shall be made in the Dutch language, unless the General Meeting has decided to use another language for this purpose.
- 2. The annual report shall make mention of the course of events to be expected; in doing is, attention shall be paid especially, insofar as important interests do not oppose to this, to investment, financing and staffing and to circumstances of which the development of turnover and profitability depends. Mention shall be made of the activities on research and development. Indicated shall be how special events, which do not have to be taken into account in the annual accounts, have affected the expectations. Open Corporations ('naamloze vennootschappen') to which Article 2:383b applies, shall moreover make mention of the policy of the Corporation with regard to the remuneration of its Directors and Supervisory Directors and how this policy has been brought to practice in the involved year.
- 3. Where it concerns the use of financial instruments by the legal person and to the extent that this is of significance for the assessment of its assets, liabilities, financial condition and results, the annual report shall mention the objectives of the legal person and its policy regarding risk control. In doing so, attention shall be paid to the policy of hedging risks related to each major type of transaction. Furthermore , attention shall be paid to the Corporation 's exposure to risks on price, credit, liquidity and cash flow.
- 4. The annual report may not be in conflict with the annual accounts. If this is required in order to provide a true and fair view as meant in paragraph 1, the annual report shall contain references to and additional explanations of items in the annual accounts.
- 5. Additional requirements may be set by Order in Council regarding the content of the annual report. These additional requirements may relate particularly to the compliance with a code of conduct which is pointed out for this purpose in that Order in Council and to the content, disclosure and audit of an opinion (certificate) on corporate governance.
- 6. The proposal of a bill regarding an Order in Council to be enacted pursuant paragraph 5, will not be made earlier than four weeks after the draft thereof has been submitted to both houses of parliament.

Section 2.9.8 Other data

Article 2:392 Additional data
- 1. The Board of Directors shall add the following information to the annual accounts and annual report:
a. the auditor’s opinion referred to in Article 2:393, paragraph 5, or a statement why it is missing;
b. a survey of the provisions in the article of incorporation regarding the appropriation of profits;
c. a statement regarding the appropriation of profit or treatment of loss or, as long as these have not been assessed, regarding the proposal with regard to such appropriation or treatment;
d. a survey of the provisions in the articles of incorporation regarding the contribution to a deficit of a Cooperative ('coöperatie') or Mutual Insurance Society ('onderlinge waarborgmaatschappij'), insofar as these provisions differ from the statutory provisions;
e. a list with the names of those to whom the articles of incorporation have granted a special right of control over the legal person, with a description of the nature of that right, unless the annual report already contains information with regard to these data on the basis of Article 2:391, paragraph 5;
f. a statement regarding the number of profit-sharing certificates and similar rights, with mention of the powers and entitlements they provide;
g. a statement regarding events that have occurred after the balance sheet date and that have significant financial consequences for the legal person and the companies included in its consolidated annual accounts, with mention of the extent of these consequences;
h. a list of existing branch establishments and of the countries where branches establishments are existing, as well as their trade name if that is different from that of the legal person.
- 2. The data may not be in conflict with the annual accounts and annual report.
- 3. Where a right as referred to in paragraph 1, under (e), is embodied in a share, mention shall be made of the number of such shares held by each of the persons entitled to such shares. Where such a right belongs to a Corporation ('naamloze vennootschap' or 'besloten vennootschap'), Association ('' vereniging'), Cooperative ('coöperatie'), Mutual Insurance Society ('onderlinge waarborgmaatschappij') or a Foundation ('stichting'), the names of the Directors thereof shall be mentioned as well.
- 4. The provisions of paragraph 1, under (e), and paragraph 3, do not apply as far as the Minister of Economic Affairs has granted, upon request, a relief in this respect to the legal person for important reasons; such relief may be granted each time for at the most five years. No relief may be granted from the provisions of paragraph 1, under (e), when mention of these data must be made in the annual report by virtue of Article 2:391, paragraph 5.
- 5. The Board of Directors of a Foundation ('stichting') or an Association ('vereniging') as referred to in Article 2:360, paragraph 3, is not required to add the information meant in paragraph 1, under (b) and (c), to the annual accounts and annual report.

Section 2.9.9 Audit


Article 2:393 Auditor’s opinion
- 1. The legal person shall give an instruction for auditing the annual accounts to a chartered auditor or to an accounting consultant with regard to whose registration in the register meant in Article 36, paragraph 1, of the Accounting Consultants Act ('Wet op de Accountants-Administratieconsulenten'), a mark is made as referred to in Article 36, paragraph 3, of that Act. Such instruction may be given to an organisation (firm) in which auditors (chartered auditors or accounting consultants), who may be assigned for this purpose, work in cooperation.
- 2. The General Meeting of members or shareholders has the power to give an instruction as meant in the previous paragraph. When it does not give such an instruction, the Supervisory Board or, where a Supervisory Board is absent or fails to comply with this duty, the Board of Directors, is empowered to do so. The assignment of an auditor cannot be restricted by any nomination. The instruction (assignment) may be withdrawn at all times by the General Meeting and by those who have given it; an instruction (assignment) given by the Board of Directors may in addition be withdrawn by the Supervisory Board. The instruction (assignment) may be withdrawn only for well-founded reasons. A disagreement regarding the method of auditing (accounting) or regarding audit procedures is not such a reason. The General Meeting shall hear the auditor, upon his request, on a withdrawal of an instruction (assignment) given to him, or on a declared intention to proceed to such withdrawal. The Board of Directors and the auditor shall, without delay, inform the Netherlands Authority for Financial Markets (‘AFM’) of a withdrawal of an instruction (assignment) by the legal person or of a premature ending thereof by the auditor, and shall provide an adequate statement of reasons in this respect.
- 3. The auditor examines whether the annual accounts provide the insight required by Article 2:362, paragraph 1. He will also verify whether the annual accounts meet the requirements set by or pursuant to law, whether the annual report, to the extent that he is able to assess so, is made in accordance with the present Title (Title 2.9), whether it is in line (compatible) with the annual accounts, and whether the data referred to in Article 2:392, paragraph 1, under (b) up to and including (g), have been added.
- 4. The auditor will inform the Supervisory Board and the Board of Directors of his audit. At least he shall make mention of his findings about the reliability and continuity of computerized data processing.
- 5. The auditor reports the outcome of his audit by means of an opinion whether the annual accounts present a true and fair view. The auditor may issue separate opinions for the singular annual accounts and for the consolidated annual accounts. The auditor’s opinion shall include in any event:
a. a statement to which annual accounts the audit relates and which legal (statutory) requirements apply to these annual accounts;
b. a description of the extent of the audit, in which at least is mentioned which accounting standards are observed when performing the audit;
c. a statement whether the annual accounts provide the required insight and comply with the requirements set by or pursuant to law;
d. a reference to certain matters to which the auditor calls attention, without issuing an opinion as referred to in paragraph 6, under (b);
e. a statement about deficiencies found in connection with the audit referred to in paragraph 3, whether the annual report has been made in accordance with the present Title (Title 2.9), and whether the data required pursuant to Article 2:392, paragraph 1, under (b) up to and including (g), have been added;
f. a statement about the compatibility of the annual report with the annual accounts.
- 6. The auditor’s opinion referred to in paragraph 5, shall be in the form of:
a. an unqualified opinion;
b. a qualified opinion;
c. an adverse opinion, or;
d. a disclaimer of opinion.
The auditor signs and dates the auditor’s opinion.
- 7. The annual accounts may not be adopted if the competent body did not have the possibility to take knowledge of the auditor’s opinion, which opinion must be added to the annual accounts unless a legally valid reason is mentioned among the other data why the auditor’s opinion is missing.
- 8. Any interested party may demand from the legal person compliance with the obligation mentioned in paragraph 1.

Section 2.9.10 Publication

Article 2:394 Publication of financial statements in the commercial register
- 1. The legal person is obliged to publish the annual accounts within eight days after adoption. Publication is made by depositing a full copy of the annual accounts, drawn up in the Dutch language or, if such accounts have not been drawn up, in French, German or English, at the office of the commercial register kept by the Chamber of Commerce. The date of adoption and approval are noted on the copy.
- 2. When the annual accounts have not been adopted in agreement with the legal requirements within two months after the required period for their preparation has ended, then the Board of Directors shall, without delay, publish the prepared annual accounts in the way as prescribed in paragraph 1; the annual accounts shall mention then that they have not yet been adopted. Within two months after a court annulment of the annual accounts, the legal person must deposit a copy of the instructions regarding the annual accounts, as ordered in the judicial decision, at the office of the commercial register, with mention of that judicial decision.
- 3. No later than thirteen months after the end of the financial year, the legal person must have published the annual accounts in the legally required way.
- 4. A copy of the annual report, drawn up in de same language as the annual accounts or in Dutch, and a copy of the other data meant in Article 2:392, shall be published simultaneously with and in the same manner as the annual accounts. The foregoing does not apply, except for the data mentioned in Article 2:392, paragraph 1, under (a), (c), (f) and (g), if the documents are held at the office of the legal person and may be inspected there by everyone, and a complete or partial copy thereof will be provided, upon request, against payment of at the most cost price; the legal person shall ensure that this possibility is registered in the commercial register.
- 5. The preceding paragraphs shall not apply if the Minister of Economic Affairs has granted a relief as mentioned in Article 2:58, 2:101 or 2:210; then a copy of this relief shall be deposited at the commercial register.
- 6. The documents meant in the preceding paragraphs are kept for seven years. The Chamber of Commerce and Industry is allowed to transcribe the data on these documents to other data carriers, which it shall keep in the commercial register instead, provided that such transcription takes place with accurate and complete representation of the data and that these data, during the entire storage period, are available and can be made readable within reasonable time.
- 7. Any interested party may demand from the legal person compliance with the obligations set out in paragraph 1 up to and including 5.
- 8. A Corporation ('naamloze vennootschap' or 'besloten vennootschap') whose own marketable securities are admitted to be traded on a regulated market as referred to in the Financial Supervision Act, is deemed to have met the requirements set out in:
a. paragraph 1, if it has sent its adopted annual accounts to the Netherlands Authority for Financial Markets (‘AFM’) pursuant to Article 5:25o, first paragraph, of the Financial Supervision Act;
b. paragraph 2, first sentence, if it has given notice under Article 5:25a, second paragraph, of the Financial Supervision Act to the Netherlands Authority for Financial Markets (‘AFM’);
c. paragraph 4, first sentence, if it has sent the annual report and the other data meant in Article 2:392, to the Netherlands Authority for Financial Markets (‘AFM’) pursuant to Article 5:25o, fourth paragraph, of the Financial Supervision Act.

Article 2:395 Other forms of publication of financial statements
- 1. When the annual accounts are published in another way than pursuant to the previous Article, then at least the auditor’s opinion meant in Article 2:393, paragraph 5, shall be added. For the purpose of the preceding sentence, the annual accounts of a legal person to which Article 2:297 applies, shall include also the annual accounts in the form in which these are published pursuant to that Article. Where the auditor’s opinion is not issued, the reason therefore shall be mentioned.
- 2. If only the balance sheet or the profit and loss account, with or without explanatory notes, are published, or when the annual accounts are only published in condensed form in another way than pursuant to the previous Article, then this will be mentioned clearly with reference to the publication made pursuant to statutory provisions or, where such publication has not been made, with mention of that fact. In that event it is not allowed to add the auditor’s opinion meant in Article 2:393, paragraph 5. When making the publication, mentioned will be whether the auditor has issued an auditor’s opinion. When an auditor’s opinion has been issued, mentioned will be which form that opinion has as defined in Article 2:393, paragraph 6, and also whether the auditor has particularly drawn attention in the auditor’s opinion to certain matters, without issuing an opinion as defined in Article 2:393, paragraph 6, under (b). When an auditor’s opinion has not been issued, the reasons therefore will be mentioned.
- 3. Where the annual accounts have not yet been adopted, this will be mentioned in the documents referred to in paragraph 1 and 2. If a statement as referred to in Article 2:362, paragraph 6, last sentence, has been made, this will be mentioned as well.

Section 2.9.11 Exemptions based on the size of the legal person’s business

Article 2:396 Small sized legal persons
- 1. Paragraph 3 up to and including 9 of the present Article shall apply to a legal person which, at two consecutive balance sheet dates, and without any interruption thereafter, at two successive balance sheet dates, has met two or three of the following requirements:
a. the value of the assets according to the balance sheet with explanatory notes amounts, based on the acquisition price and production price, not more than € 4,400,000;
b. the net turnover for the financial year does not exceed € 8,800,000;
c. the average number of employees for the financial year is less than 50.
- 2. Counted in for the purpose of paragraph 1 are the value of assets, the net turnover and the number of employees of group companies that should be involved in the consolidation if the legal person would have been required to draw up consolidated annual accounts. This does not apply where the legal person applies Article 2:408.
- 3. With regard to disclosures which have to be made pursuant to Section 2.9.3, no other disclosures have to be made than those required pursuant to Articles 2:364, 2:373, 2:375, paragraph 3, and 2:376, and, without a breakdown by type of debt or debt-claim, pursuant to Articles 2:370, paragraph 2, and 2:375, paragraph 2, and the disclosure of the retained portion of the result.
- 4. The profit and loss account shall mention the items listed in Article 2:377, paragraph 3, under (a) up to and including (d) and (g), respectively, paragraph 4, under (a) up to and including (c) and (f), pinched into an item ‘gross operating profit’; the legal person shall mention in a leverage ratio to what extent the net turnover has been increased or decreased compared to the previous year.
- 5. The statement mentioned in Article 2:378, paragraph 1, shall only relate to the revaluation reserve, except for the second sentence of Article 2:378, paragraph 3; disclosed shall be the number of issued shares and the nominal amount per type (class) of shares, the number and the nominal amount of shares issued in the financial year and the number and nominal amount of shares and depository receipts thereof that the legal person or its subsidiary holds for it own account. Articles 2:380, 2:381, paragraph 2 and 3, 2:381b, under (a), and 2:383, paragraph 1, do not apply.
- 6. For a valuation of assets and liabilities and for the assessment of the result shall qualify as well, in derogation from Section 2.9.6, the principles for the assessment of taxable profits under Chapter II of the Corporate Tax Act 1969, provided that the legal person, in doing so, applies all tax principles applicable to him. If the legal person applies these principles, it shall mention this in the explanatory notes. Further rules may be set by Order in Council regarding the use of these principles and the explanatory notes that have to made thereto.
- 7. Articles 2:383b up to and including 2:383e, 2:391 and 2:393, paragraph 1, do not apply.
- 8. Article 2:394 merely applies with regard to a balance sheet and to explanatory notes that have been restricted in accordance with paragraph 3. The further data regarding the profit and loss account and the data referred to in Article 2:378, paragraph 3, second sentence, remain omitted in the published explanatory notes.
- 9. If the legal person has not the objective to make profits, then it is not required to apply Article 2:394, provided that:
a. it shall sent the documents referred to in paragraph 8, upon request and free of charge, immediately to creditors, holders of shares in its capital or holders of depositary receipts of such shares, or it shall make these documents, upon request and free of charge, immediately available for the before mentioned persons at its office for inspection, and;
b. it has deposited at the office of the commercial register the auditor’s opinion of a public auditor, indicating that the legal person has not performed any operations during the financial year outside the objective as defined in its articles of incorporation, and that the present Article applies to it.

Article 2:397 Medium sized legal persons
- 1. Paragraph 3 up to and including 7 of the present Article shall apply, next and in addition to Article 2:396, to a legal person which, at two consecutive balance sheet dates, and without any interruption thereafter, at two successive balance sheet dates, has met two or three of the following requirements
a. the value of the assets according to the balance sheet with explanatory notes amounts, based on the acquisition price and production price, not more than € 17,500,000;
b. the net turnover for the financial year does not exceed € 35,000,000;
c. the average number of employees for the financial year is less than 250.
- 2. Counted in for the purpose of paragraph 1 are the value of assets, the net turnover and the number of employees of group companies that should be involved in the consolidation if the legal person would have been required to draw up consolidated annual accounts. This does not apply where the legal person applies Article 2:408.
- 3. The profit and loss account shall mention the items listed in Article 2:377, paragraph 3, under (a) up to and including (d) and (g), respectively, paragraph 4, under (a) up to and including (c) and (f), pinched into an item ‘gross operating profit’; the legal person shall mention in a leverage ratio to what extent the net turnover has been increased or decreased compared to the previous year.
- 4. Article 2:380 does not apply. Article 2:382a does not apply, provided that the data referred to in that Article have been sent to the Netherlands Authority for Financial Markets (‘AMF’) upon its request.
- 5. With regard to disclosures which have to be made pursuant to Section 2.9.3, no other disclosures have to be made than those required pursuant to Articles 2:364, 2:365, paragraph 1, under (d), 2:366, under (a), 2:367, under (a) up to and including (d), 2:370, paragraph 1, under (b) and (c), 2:373, 2:374, paragraph 3 and 4, 2:375, paragraph 1, under (a), (b), (f) and (g), and paragraph 3, and 2:376, and transit items. Articles 2:370, paragraph 2, and 2:375, paragraph 2, are applied to both, the total of the debt-claims and debts (liabilities) as well as the items meant in paragraph 1 of these Articles that need to be mentioned separately. The to be published profit and loss account and the explanatory notes thereto may be restricted in agreement with paragraph 3 and 4.
- 6. The information to be disclosed pursuant to Article 2:381, paragraph 2, is restricted to information about the nature and business purpose of the arrangements mentioned there. Article 2:381, paragraph 3, does not apply, unless the legal person is an Open Corporation ('naamloze vennootschap'), in which case the disclosure meant in Article 2:381, paragraph 3, is restricted to transactions which, directly or indirectly, are entered into between the Corporation and its major shareholders or between the Corporation and its members of the Board of Directors or of the Supervisory Board.
- 7. The data referred to in Article 2:392 paragraph 1, under (e) and (f), and paragraph 3, are not made public.
- 8. The annual report does not need to pay attention to non-financial performance indicators as referred to in Article 2:391, paragraph 1.

Article 2:398 Details about the application of Articles 2:396 and 2:397
- 1. Article 2:396 or 2:397 shall apply, where it concerns the first and second financial year, also to a legal person which at the balance sheet date of the first financial year has met the relevant requirements.
- 2. Article 2:396, paragraph 3 up to and including 8, and Article 2:397, paragraph 3 up to and including 7, shall apply insofar as the General Meeting, at the latest six months after the beginning of the financial year, has not decided otherwise.
- 3. Articles 2:396 and 2:397 shall not apply to:
a. a legal person which has outstanding marketable securities of it own admitted to be traded on a regulated market or multilateral trading facility as specified in Article 1:1 of the Financial Supervision Act or to be traded through a system comparable with such a regulated market or multilateral trading facility in any State not a Member State of the European Communities, or;
b. an Investment Company or a company for collective investments in transferable securities to which Article 2:401, paragraph 1, applies.
- 4. The amounts referred to in Article 2:396, paragraph 1, and Article 2:397, paragraph 1, shall be decreased by Order in Council if the law of the European Communities obliges to do so, and they may be increased by Order in Council to the extent permitted.
- 5. In the application of Article 2:396, paragraph 1, and 2:397, paragraph 1, with regard to a Foundation ('stichting') or an Association ('vereniging') as meant in Article 2:360, paragraph 3, the basis shall be the total of the assets of the Foundation ('stichting') or Association ('vereniging') and, with due observance of Article 2:396, paragraph 2, of the net return and the average number of employees of the enterprise or enterprises maintained by that Foundation ('stichting') or Association ('vereniging').

Section 2.9.12 Provisions regarding legal persons of distinguished types

Article 2:399 [repealed on 10-15-1993]

Article 2:400 Financial institutions other than banks
Financial institutions, not being banks within the meaning of Article 2:415, may, upon their request, be allowed by the Minister of Finance, to apply Section 2.9.14, whether or not under conditions, all with the exception of Article 2:424.

Article 2:401 Investment Companies
- 1. The manager of an investment institution, the manager of an icbe, an investment company and a company for collective investments in transferable securities, to which Part 4 of the Financial Supervision Act (‘Conduct of business supervision of financial undertakings’) applies, also have to meet, in addition to the provisions of the present Title (Title 2.9), the requirements set with regard to that company’s annual accounts by or pursuant to the Financial Supervision Act. With regard to such manager of an investment institution, the manager of an icbe, an investment company and a company for collective investments in transferable securities it is possible to derogate by or pursuant to the Financial Supervision Act from Articles 2:394, paragraph 2, 3 or 4, and 2:403.
- 2. The investments of an investment company or a company for collective investments in transferable securitiesl, as referred to in Article 1:1 of the Financial Supervision Act may be valued at market value. Exchange rate fluctuations which are unfavourable compared to the previous balance sheet date do not have to be charged to the profit and loss account, on the condition that they are counted (set off) against the reserves; favourable exchange rate fluctuations may be added (written up) to the reserves. The amounts are mentioned in the balance sheet or in the explanatory notes.
- 3. Article 2:378, paragraph 3, second sentence, is not applicable to an Investment Company with variable capital.

Article 2:402 Consolidating head company
If the financial data of a legal person have been processed in its consolidated annual accounts, then only the results of participating interests after tax thereon have to be disclosed as a separate item in that legal person’s own profit and loss account. The application of the previous sentence is mentioned in the explanatory notes on the consolidated annual accounts.

Article 2:403 Group exemption (after liability has been accepted for group subsidiaries)
- 1. A legal person forming a part of a group is not required to arrange its annual accounts in agreement with the requirements of the present Title (Title 2.9), provided that:
a. its balance sheet in any event mentions the total amount of the current assets and the amount of equity capital, of provisions and of liabilities (debts), and that the profit and loss account in any event mentions the result from normal business operations and the balance of the other income and expenses, all after taxation;
b. the members or shareholders have stated in writing, after the start of the financial year and prior to the adoption of the annual accounts, to agree with a derogation from these requirements;
c. the financial data of the legal person are consolidated by another legal person or partnership into its consolidated annual accounts to which, pursuant to the applicable law, the Regulation of the European Parliament and the Council on the application of international accounting standards, the Seventh Council Directive of the European Communities on company law or one of the two Directives of the Council of the European Communities on annual and consolidated accounts of banks and other financial institutions or of insurance companies applies;
d. the consolidated annual accounts, as far as these are not drawn up or translated into Dutch, are drawn up or translated into French, German or English;
e. the auditor’s opinion and annual report are drawn up or translated into the same language as the consolidated annual accounts;
f. the legal person or partnership referred to under (c) has stated in writing that it makes itself jointly and severally liable for debts arising from juridical acts of the legal person, and;
g. the statements referred to under (b) and (f) have been deposited at the office of the commercial register and, each time within six months after the balance sheet date or within one month after a lawfully made later publication, the documents or translations listed under (d) and (e).
- 2. Where, in the group or the part of the group of which the data are included in the consolidated annual accounts, the legal person or partnership referred to in paragraph 1, under (f), and another legal person or partnership are co-ordinate [two group companies equally ranked], then paragraph 1 only applies if this other legal person or partnership also has made itself in writing jointly and severally liable for debts arising from juridical acts of the legal person; in that case paragraph 1, under (g), and Article 2:404 shall apply accordingly.
- 3. Articles 2:391 up to and including 2:394 do not apply to a legal person to which paragraph 1 is applicable.
- 4. If the legal person that forms a part of the group is a bank within the meaning of Article 2:415, then its balance sheet shall in any event mention, in derogation from paragraph 1, under (a), the total amount of assets and liabilities, and the amount of its equity capital, and its profit and loss account shall mention in any event the results from normal business operations, the amount of taxes and the balance of other income and expenses.
- 5. If the legal person that forms a part of the group is an insurance company within the meaning of Article 2:427, then its balance sheet shall in any event mention, in derogation from paragraph 1, under (a), the total amount of investments and of debt-claims, and the amount of its own equity capital, of the technical provisions and of the liabilities (debts), and its profit and loss account shall in any event consist of the non-technical account, mentioning at least the results before taxes from normal business operations regarding liability insurance and life insurance, the balance of other income and expenses, and the results from normal business operations after tax.

Article 2:404 Termination of liability
- 1. In addition to what is provided in Articles 2:204a, paragraph 4, and 2:204c, paragraph 7, the liability referred to in Article 2:403 may be withdrawn by depositing a declaration for this purpose at the office of the commercial register.
- 2. Nevertheless, liability remains existent for debts resulting from juridical acts which are performed prior to the moment as of which an appeal to the withdrawal can be made towards the creditor.
- 3. The remaining liability shall end with regard to the creditor if the following conditions are met:
a. the legal person no longer forms a part of the group;
b. a notice of the intention to terminate liability has been available for inspection for at least two months at the office of the commercial register;
c. at least two months have passed since an announcement in a nationally distributed daily newspaper was made, indicating that a notice as meant under (b) is available for inspection, with mention of the place where it is available for inspection;
d. the creditor has not made an objection against this intention in time or his objection has been revoked or it has been dismissed by a final and binding judicial decision.
- 4. If the creditor so requests, security (collateral) or another guarantee must be provided on his behalf in order to assure that his debt-claims, with regard to which liability exists, will be satisfied, on the penalty that the objections of the creditor meant in paragraph 5 shall be acknowledged as valid. This, however, does not apply if the creditor, even after termination of liability, shall have sufficient assurance that the involved debt-claims will be satisfied, for instance in view of the financial situation of the legal person or on account of other reasons.
- 5. Up until two months after the announcement referred to in paragraph 3, under (c), the creditor, with regard to whose claims liability exists, may object against the intention to terminate liability by lodging a petition with the District Court of the domicile of the legal person that is his principal debtor.
- 6. The District Court shall only declare the creditor’s objections valid after it has set a period in which a guarantee, specified by the court, may be provided still, and such guarantee has not been provided within that period.

Article 2:404a [repealed on 25-11-1988]