3

Strategy

Governance

Governance strategy

The cornerstones of the governance policy are:

  • Sufficient dualism and diversity in the company’s management, covering all aspects of the business and all stakeholder interests.

  • Zero tolerance of child labor, corruption, bribery & fraud.

  • A safe work environment for all employees.

  • “Tax follows the business.”( Optimal business structure outweighs optimal tax structure)

Our governance policy takes the following legislation and guidelines into account:

  • Applicable Dutch legislation

  • Applicable local legislation of our foreign subsidiaries

  • Applicable GRI disclosures

  • Ownership structure of the group and the articles of association

The BoD is responsible for the governance structure.

Corporate governance

board of directors structure

Within our company structure, the Ultimate Beneficial Owners are part of the management structure. This poses an inherent risk of management override and conflicts of interest. We have the following safeguards in place to mitigate these risks:

  • We differentiate between statutory directors and board members. The statutory directors are part of the BoD but report to the CEO.

  • The BoD is multidisciplinary and representative of the organization.

  • Below the BoD, there is a management team in charge of operational matters.

  • A structured decision-making process, including BoD meetings, monthly management team meetings, quarterly business reviews, and daily commercial meetings.

The CEO is appointed by the Ultimate Beneficial Owners. Other board members are elected and appointed by the BoD itself. The performance of individual board members is evaluated on a yearly basis.

gender diversity of management

Taken together, the BoD and management team are 60% male and 40% female. All three statutory directors are male. The Dutch Management and Supervision Regulations Act ("Wet bestuur en toezicht") recommends that at least 30% of seats are to be held by women and 30% by men. We meet and exceed these gender diversity targets on a company and managerial level (BoD and management team).

The management team is 57% female and 43% male. The Dutch Management and Supervision Regulations Act recommendation is therefore met at this level.

All five seats in the BoD are held by men, including the statutory directors. The Dutch Management and Supervision Regulations Act recommendation is therefore not met. As Numidia meets the recommended target on a company and management team level and invests highly in training and education, we foresee the gender ratio to change in the years to come. However, due to the ownership structure, we do not expect to achieve 30% in the short term.

Supply chain transparency

Numidia recognizes the importance of ethical business practices and the creation of a sustainable supply chain.

Numidia is certified IFS Broker and BRC Agent and Broker, both of which require full traceability of the products from manufacturer to customer. Numidia’s ERP system is fully equipped for this. All products are registered and processed on manufacturer batch level. Thereby, we can track exactly which batch was shipped to which customer, with all related documents and product details.

sedex

We are a member of Sedex (Supplier Ethical Data Exchange), a global non-profit organization promoting transparency in supply chains. Sedex enables us to share and receive information related to labor conditions, the environment, ethics, and business practices.

In line with our commitment to ethical business, Numidia passed a SMETA audit in 2021. This audit, based on the Sedex Members Ethical Trade Audit methodology, evaluates critical aspects of our business operations, including labor conditions, health and safety, environment, and business integrity. The successful completion of this audit attests to our efforts to meet the highest standards of corporate social responsibility.

Numidia is dedicated to continuous improvement and transparency in business practices. In 2024, we are scheduled for another SMETA audit, reaffirming our commitment to upholding and enhancing our social and ethical responsibilities.

Business ethics and conduct

corruption, bribery & fraud

Numidia does not tolerate any kind of corruption, bribery or fraud. This applies to all our employees, but also to our business relations. We make sure that all employees are fully aware of these topics by various means of communication and mandatory training programs.

Numidia is certified IFS Broker and BRC Agent and Broker, both of which require risk assessments related to food fraud and food defense.

All of Numidia’s suppliers, including warehouses, transporters or product suppliers, are required to formally agree to our Code of Conduct before the onboarding process can begin. This means they are to conduct their businesses in compliance with the applicable anti-corruption laws and anti-bribery laws in each relevant jurisdiction, but also in accordance with the rules for anti-bribery. During the onboarding process of a supplier, we perform a risk assessment which focuses on any fraud risks specific to their type of business. This risk assessment is also subject to a yearly review.

Every new customer is screened by an independent third party. This third party traces the Ultimate Beneficial Owner (UBO) and scans for Politically Exposed Persons (PEP) and Special Interest Persons (SIP). People holding or connected to important political positions will be reviewed by Numidia for possible risks and to see whether our involvement with them is appropriate. In the case of a person being on a sanctions list (e.g. international sanction lists), we will not engage with this party in any way.

child labor & forced labor

We guarantee that our processes and suppliers are entirely free of any involvement with child labor or any kind of forced labor. The requirements underlying this guarantee are described in Numidia’s Code of Conduct. We have a zero-tolerance policy towards any business relations that do not respect this Code of Conduct. As part of the supplier and customer onboarding process, we perform various checks to ensure that they comply with this Code of Conduct.

whistleblower procedure

An employee (or anyone else connected to the company) who suspects illegal activity or misconduct can follow the whistleblower procedure, which is available online h24/7. Reference is made to chapter "Social" for further details.

animal health & welfare

The welfare of all animals should be ensured by following “The Five Freedoms”. This applies to indoor keeping, outdoor keeping and during transportation. These Five Freedoms are as follows:

  • Freedom from Hunger and Thirst: By providing ready access to fresh water and diet to maintain health and vigor.

  • Freedom from Discomfort: By providing an appropriate environment, including shelter and a comfortable resting area. This also includes proper ventilation, temperature conditioning where necessary, and protection from direct sunlight and/or wind.

  • Freedom from Pain, Injury or Disease: By prevention or rapid diagnosis and treatment. Also by ensuring that the environment is kept hygienic. Any form of physical abuse is prohibited.

  • Freedom to Express Normal Behavior: By providing sufficient space, proper facilities, and the company of the animal’s own kind.

  • Freedom from Fear and Distress: By ensuring conditions and treatment that prevent mental suffering.

This topic is classified as non-material due to the limited impact Numidia has on this part of the value chain and the limited financial impact on Numidia. However, we expect this to change in the long-term as the requirements and potential impact will increase.

Numidia will strive to increase its impact, as we recognize the importance of these topics on an industry level. Therefore, these freedoms are embedded in Numidia's Sustainable procurement policy and code of conduct. All suppliers accept and sign-off Numidia's code of conduct.

Tax transparency

approach to tax

Tax transparency is not a material topic, but still scores high amongst the stakeholders and is of financial importance. Numidia believes that it's important to be transparent on taxes. Therefore, this topic is covered in detail.

Numidia’s strategy for the group taxation structure is "tax follows the business," meaning that the optimal business structure takes priority over the optimal tax structure. The BoD will evaluate the tax strategy on an annual basis.

The goals of this strategy are as follows:

  • To facilitate the optimal business structure.

  • To comply with all applicable legislation.

  • To ensure we pay our fair share of taxes in the applicable regions.

  • To avoid the risk of tax evasion.

corporate income tax and transfer pricing

The Numidia group operates in four jurisdictions with respect to corporate income tax:

  • The Netherlands (all Dutch entities form a fiscal unity for corporate income tax purposes)

  • Singapore

  • United States

  • Uruguay

Because we operate on a global scale, we follow the OECD guidelines for transfer pricing. We have taken the following steps to determine our transfer pricing strategy:

  • An independent tax advisory firm has been engaged to support in the set-up the right structure and ensure compliance with all OECD and local tax requirements.

  • We have evaluated the OECD arm’s length standard and methods for testing the arm’s length nature of intercompany transactions. The OECD guidelines do not prescribe a strict hierarchy of applicable methods. They do, however, require that the selected method provide the best estimation of an "arm's length" price.

  • A benchmark study has been conducted to determine the estimation applied.

  • Master files, local files and country-by-country reporting have been set up for all applicable countries in line with the requirements. These files are available at Numida’s headquarters upon request by tax authorities and taxation stakeholders.

As a result, we are confident that we meet all applicable tax legislation:

  • OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, published in July 1995 and subsequently updated in 1996, 1997, 2010, 2017 and 2022.

  • Dutch legislation: Article 29G of the Dutch Corporate Income Tax Act and the Dutch transfer pricing decrees of 4 June 2022, no. IFZ 2022/16685 and 30 December 2015, no. DB/2015/462M.

Corporate income tax charges are calculated and accounted for on a monthly basis on both the local and consolidated levels through the use of accruals.

During 2023, we submitted CIT filings in all four jurisdictions within the required deadlines and within local standards and requirements. We engaged local tax advisory companies in all jurisdictions to support and prepare the filings.

pillar two

In October 2021, the OECD published the Global Anti-Base Erosion Model Rules (Pillar Two) as part of the OECD/G20 BEPS Project.

Pillar 2 establishes a minimum tax system with a minimum effective tax rate (ETR) of 15% at jurisdictional level. Companies with a global turnover above EUR 750m will be within the scope of Pillar 2. Where the effective tax rate (ETR) is below the agreed minimum, the new system will top up the tax liability so that the overall rate will reach the established minimum in each jurisdiction where the taxpayer is resident. Pillar 2 is effective within the EU (among others) for financial years starting on or after 31 December 2023.

Numidia has performed an assessment of the impact for all applicable jurisdictions. The assessment indicates that:

  • Numidia is in scope of Pillar Two, based on the revenue threshold of EUR 750 million and the jurisdiction where the head office is located, namely the Netherlands.

  • For 2024 – 2026, Numidia expects to qualify for the safe harbor transitional ruling, based on the Simplified ETR test. This test is met when the total Income Tax Expense, according to the consolidated financial statements, divided by the total Profit Before Income Tax gives a ETR higher than the Transition Rate (15% in 2024, 16% in 2025, and 17% in 2026). This assessment is based on:

    • Effective tax rates from the previous years

    • 204 budget and 2025-2026 Long-Term Planning

    • Tax structure being in place

  • From 2027 onwards, Numidia could be impacted in Uruguay. At present, Numida operates from a free-trade zone which exempts foreign companies from corporate income tax. From 2027 onwards, this income could be taxed in the Netherlands at a 15% tax rate, or Uruguay might adjust the free-trade zone regulations. Based on the scope of the current operations in Uruguay, the financial impact on the tax expense is expected to be limited.