11425 zetes annual report 2013 en complet

ZETES ANNUAL REPORT 2013

CREATING TOMORROW BY INVESTING TODAY

All the same and yet all very unique: getting the best out of people and goods into an outstanding ID

CONTENTS

03

HIGHLIGHTS

04

WHO IS ZETES?

06

MESSAGE FROM THE EXECUTIVE MANAGEMENT

08

REPORT FROM THE BOARD OF DIRECTORS

16

STRATEGY

20

ACTIVITIES

40

INNOVATION

44

SOCIAL RESPONSIBILITY

48

SHAREHOLDERS INFORMATION

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51

FINANCIAL INFORMATION AND CORPORATE GOVERNANCE

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Zetes is an international Group highly specialised in identification & mobility solutions. Connecting what matters is at the heart of our business: physical movements and digital flows, our customers and their critical data, but also consumers and corporations, citizens and governments. By using the most innovative technologies, we help our customers to improve speed, quality and accuracy in order to be on the leading edge of their industry. This has made us a pioneering leader on our market.

READ BETWEEN THE LINES OF OUR ANNUAL REPORT. Discover an extra layer of detail with Layar.

At Zetes, we like to embrace technological innovations – on condition that they offer real added value. And we consider adding an extra digital layer to enrich the information in our Annual Report to be a real added value. Why? Because a video or interactive experience often says more than a thousand words. Thanks to your smartphone and the Layar technology, you can choose the digital content you want to add to this report.

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ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

ZETES GROUP - KEY FIGURES In € '000 OPERATING SITUATION Sales Gross Margin % Sales Operating Expenses Current Ebitda (1) % Sales Amortizations, depreciations and impairment losses Current Ebit (2) EBIT Net Result

2008 177 636 77 415 43.6% (62 204) 15 211 8.6% (6 055) 9 156 8 563 6 004

2009 167 471 76 457 45.7% (62 851) 13 606 8.1% (5 479) 8 127 7 425 5 135

2010 216 738 88 711 40.9% (69 614) 19 096 8.8% (7 272) 11 824 11 416 8 210

2011 220 562 95 477 43.3% (76 837) 18 640 8.5% (7 599) 11 041 10 055 6 244

2012 214 126 93 699 43.8% (79 583) 14 117 6.6% (7 472) 6 645 5 438 3 526

2013 211 472 91 446 43.2% (77 911) 13 535 6.4% (7 604) 5 931 5 111 3 397

CASH FLOW STATEMENT (KEY FIGURES) CASH AND CASH EQUIVALENTS, BEGINNING BALANCE

2008 14 722

2009 12 710

2010 18 140

2011 14 599

2012 14 306

2013 12 797

CASH FLOWS FROM OPERATIONS of which: Cash flows from the P&L Working capital

7 030 12 867 (5 837)

14 684 10 850 3 834

11 117 14 681 (3 564)

18 174 14 499 3 675

12 381 10 541 1 840

4 026 10 337 (6 311)

CASH FLOWS RELATING TO INVESTING ACTIVITIES of which: Fixed Assets Subsidiaries, net of cash acquired Developments

(4 481) (3 776) 65 (1 138)

(7 241) (4 323) (2 098) (1 176)

(10 010) (6 715) (1 278) (2 147)

(13 424) (4 701) (6 550) (2 473)

(7 662) (5 361) (740) (1 834)

(10 696) (7 986) (343) (2 756)

CASH FLOWS RELATING TO FINANCING ACTIVITIES of which: Proceeds from cash flows from financing Repayments relating to cash flows from financing Bank overdrafts increase (decrease) Dividends paid Own shares

(4 308) 571 (2 260) 204 (1 940) (300)

(2 088) 2 558 (1 388) (403) (1 940) (467)

(4 870) 113 (2 837) (49) (1 911) 466

(5 065) 4 614 (2 018) (966) (5 336) (1 267)

(6 199) 0 (2 080) 588 (2 895) (1 685)

4 672 3 947 (2 108) 6 185 (2 875) (250)

CASH AND CASH EQUIVALENTS, CLOSING BALANCE

12 710

18 140

14 599

14 306

12 797

10 585

FINANCIAL POSITION (KEY FIGURES) ASSETS of which: Tangible assets Intangible assets Goodwill Deferred tax assets Inventories Current trade and other receivables Current prepayments Cash and cash equivalents TOTAL ASSETS

2008

2009

2010

2011

2012

2013

7 574 3 788 32 464 1 930 12 097 52 089 4 325 12 710 127 464

8 893 3 874 33 108 1 867 11 102 46 370 6 017 18 140 130 376

12 548 4 690 34 970 2 749 15 155 65 593 7 161 14 599 158 346

13 020 5 636 40 125 3 028 15 351 62 345 8 696 14 306 163 523

13 625 5 433 39 878 3 204 15 631 57 724 9 900 12 797 158 964

15 873 6 659 39 924 4 385 14 302 57 986 10 588 10 585 163 187

EQUITY AND LIABILITIES of which: Total equity Non current interests bearing borrowings Deferred tax liabilities Current interests bearing borrowings Current trade and other payables TOTAL EQUITY AND LIABILITIES

67 376 2 854 1 014 2 805 51 880 127 464

70 341 3 049 1 435 2 408 51 097 130 376

77 930 963 1 686 4 021 70 328 158 346

78 385 2 548 1 994 4 345 71 316 163 523

77 501 798 1 854 4 921 68 168 158 964

77 072 2 921 2 550 10 983 65 858 163 187

2008 769

2009 803

2010 902

2011 1 097

2012 1 070

2013 1 118

TOTAL HEADCOUNT Headcount on December 31st

(1) Current EBITDA = current EBIT before amortizations, depreciations and impairment losses (2) Current EBIT = EBIT excluding restructuration costs and other non current elements (badwill/SOP/Other)

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

SALES : € 211.5 MILLION in € million 200

80 170.7

150

145.5

171.5

155.3

148.3

250

171.2

61.4

60

131.6

200 49.9 42.6

100

40

50

0

31.6

29.3

2008

2009

2010

2011

2012

2013

0

2007

2008

214.1

211.5

2010

2011

2012

2013

14.1

13.5

2012

2013

167.5

100

20

2007

177.6

220.6

150

40.3

35.8

177.1

216.7

50

2007

2008

2009

Goods ID

2010

2011

2012

0

2013

2009

People ID

Group

CURRENT EBITDA : € 13.5 MILLION in € million 20 16

13.6

14.3 11.4

12

9.9

20

16

16

12

9.9

10.8

8 4

4

2007

2008

2009

2010

2011

2012

2013

0

2007

7.7

2009

2010

2011

2012

2013

Operating expenses Current EBITDA

2008

2009

2010

2011

148 315

131 646

155 290

170 703

63 269

57 885

63 047

68 518

2012

0

2007

2008

2009

2010

2011

Group Including corporate costs

EVOLUTION IN PEOPLE ID

2013

%

2008

2009

2010

2011

2012

2013

%

171 518 171 187

-0.2%

29 321

35 808

61 448

49 859

42 608

40 285

-5.5%

68 334

-1.4%

14 147

18 556

25 663

26 959

24 377

23 112

-5.2%

(48 922) (48 019) (51 652) (58 636) (61 884) (59 226)

-4.3%

(10 368) (12 120) (14 885) (14 904) (14 490) (15 433)

6.5%

69 323

14 346

9 866

11 395

9 882

7 439

9 108

% Sales

9.7%

7.5%

7.3%

5.8%

4.3%

5.3%

EBITDA

13 819

9 325

11 002

9 258

6 285

8 415

Current EBIT

10 028

6 170

7 054

5 225

2 296

597

622

697

889

Headcount

13.6

People ID

EVOLUTION IN GOODS ID

Gross Margin

15.2

4

Goods ID

Turnover

15.4

18.6

8

3.8

2008

19.1

12

9.9

6.4 4.9

0

12.1

9.1 7.4

8

20

22.4%

3 778

6 436

10 779

12 055

9 887

7 679

12.9%

18.0%

17.5%

24.2%

23.2%

19.1%

-22.3%

33.9%

3 778

6 365

10 764

11 693

9 879

7 552

-23.6%

3 201

39.4%

2 095

4 688

7 865

9 131

7 641

6 159

-19.4%

862

874

1.4%

159

169

194

196

196

233

18.9%

292.2%

ANNUAL INVESTMENTS : Fixed assets

1 776

1 062

4 642

3 147

4 095

3 243

-20.8%

1 902

3 250

2 073

1 299

1 185

4 649

Subsidiaries

0

2 098

1 278

6 550

740

343

-53.6%

(65)

0

0

0

0

0

1 138

1 176

2 147

2 107

1 834

2 584

40.9%

0

0

0

366

0

172

Developments

HIGHLIGHTS

Belgium

Gambia

Production of driving licences, which started at the beginning of 2013, is in full swing. Belgian passport issuance is now another Zetes project, with personalization beginning in spring 2014.

Zetes has also been mandated to personalize the Gambian biometric passport. Our integration of iris data directly into the passport is a world first.

Goods ID

Senegal

2013 was a pivotal year for the Goods ID division.

The solutions portfolio was redefined to obtain a standardized offering, with market-specific solutions proposed to all Group customers. These solutions, directed at a collaborative supply chain, enable Zetes to differentiate itself from the competition and ensure growth for years to come.

66 enrolment stations developed and produced

by Zetes were delivered to Senegal as part of the biometric passport project, and went into production during the summer months.

Investments 2013 was a year of investment, with substantial human and financial resources allocated to development in support of the company's future vision.

3

Connecting the physical and digital worlds to increase supply chain and identity document security

FOUNDED IN 1984 30 YEARS' EXPERIENCE CONDENSED INTO OUR SOLUTIONS N°1 EMEA PROVIDER OF SUPPLY CHAIN SOLUTIONS € 3 MILLION OF INVESTMENT IN INNOVATION 16,000,000 IDENTITY DOCUMENTS PRODUCED DIRECT PRESENCE IN 16 COUNTRIES 40% RECURRING REVENUE 100,000 WAREHOUSE OPERATORS WORKING WITH ZETES VOICE SOLUTION € 3.2 MILLION DISTRIBUTED TO SHAREHOLDERS 1,118 EMPLOYEES IN EMEA BIOMETRIC ENROLMENT OF 70,000,000 PEOPLE

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

"OF COURSE WE BELIEVE IN THE FUTURE, WE’RE BUSY BUILDING IT"

Customers, employees and shareholders all play their part in Zetes' innovation process. Our investments reflect a vision of the future. To remain among the best, we don’t improvise our future, we build it.

What’s more important to any State than its citizens? And more precious for a company than its products or production equipment?

They cannot risk losing sight of what is most dear to them.

For the past 30 years, Zetes has placed its entire expertise at the disposal of customers, enabling them to trace goods and identify people, by linking the physical and virtual worlds.

Innovation is born of the exchange of knowledge Customers have a multitude of different needs: data integrity and protection, increased quality and productivity, improved flow management. On top of this, they need systems that are easy to use, requiring a high level of complexity and sophistication from the outset. Over the years, our teams have developed unrivalled reserves of experience. They know our customers' processes. They understand the challenges they face. They have also mastered proven technologies and are keen to investigate emerging ones.

It is through this mixture of expertise that Zetes’ solutions are constantly born.

They respond to evolving needs and ever increasing demands, whether regulatory or otherwise.

During the past year, Zetes has increased its development efforts in both Goods and People ID in order to provide increasingly specific responses to the needs of the markets it serves.

Developing solutions today that our customers will need tomorrow In Goods ID, the requirement for by-unit identification is spreading. For the past few years, an increasing number of economic sectors like the pharmaceuticals industry and the luxury sector, and more recently agro-food, have had recourse to introduce

6

Ladies and Gentlemen, dear Shareholders,

"It is its customers who are carrying Zetes forward by pushing our teams to excel and find an outstanding response to their challenges."

serialization, which exponentially increases the quantity of data to be recorded in the databases of supply chain stakeholders.

Zetes provides a targeted response for each stakeholder. Recently it has developed the concept of a collaborative supply chain and provided tools for sustaining it. The resulting data repository enables data on goods produced, stored or transported to be gathered and for access to supply chain stakeholders concerned to be provided in a totally secure setting. This is not simply a case of replicating existing systems, but developing an integrated solution that the sector can use to solve tomorrow’s challenges and which will create even greater value for the financial stakeholders concerned. The enthusiasm shown by those customers who have already opted to work with Zetes on this initiative clearly demonstrates that this innovation is both necessary and promising for the future of our company. Leadership in one's sector is achieved only at the price of targeted innovation and permanent investment, which Zetes works on continuously.

Biometrics and mobile data serving citizen identification In People ID, migratory flows are a driver of prosperity in the world by intensifying exchanges of skills and levelling out age pyramids. But these are possible only under the sovereign control of States, who need to be able to identify their own citizens and control visitors. The rapid increase in

MESSAGE FROM THE EXECUTIVE MANAGEMENT

computer processing power has made it possible to harness biometrics and mobile informatics, which are unbeatable means of precisely controlling individuals. At the request of several states, Zetes has recently developed and implemented biometric and biographical data recording systems, which permit integrated population databases to be constituted. From these systems, issuing of travel documents like passports and visas, enabling citizens to travel worry-free and for States to identify them with 100% certainty, can follow. Such innovative solutions are not the fruit of chance and Zetes has been able to capitalize, when investing in people identification, on its expertise in mobile informatics and ID processes. In so doing Zetes has accumulated references and solidified its reputation, making it a credible candidate supplier for any new identity document market.

Our customers are the drivers of progress Clearly, it is our customers that carry Zetes forward and push our teams to excel in finding adequate answers to their challenges. They are the drivers of our progress, as are all our employees, with their desire to provide impeccable service and ambition to create ever-greater value.

We wish to express our gratitude to all our customers for the trust they have placed in us, either as the managers of large companies or the leaders of the many states that constitute our references. We also wish to honour the efforts of all our teams, which collaborate beyond job and country boundaries to share their knowledge and enable Zetes Group to develop the most advanced solutions.

attributed to shareholders, to whom Zetes returned an amount of â‚Ź 3.2 million in the course of the past year. This serves as proof of our gratitude and also our confidence in the company's continued ability to generate strong profits and significant cash flow in the future, which are supported by today's investment.

Finally, these combined development and innovation efforts would not be impossible without large-scale investment, which at this level, is only possible for the strongest Jean-François Jacques and financially well resourced companies.

The strength of our balance sheet can be Chairman of the Board

Alain Wirtz Chief Executive Officer

Pierre Lambert Chief Financial Officer

7

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

"INNOVATION IS OUR PASSPORT TO THE FUTURE."

Ladies and Gentlemen, dear Shareholders, The Board of Directors is please to present you with its report for the 2013 financial year. The present report covers both the unconsolidated (parent company) and consolidated financial statements. The Board attests that, to its knowledge, the unconsolidated and consolidated annual financial statements give a true and fair view of the net assets, financial situation and results of Zetes Industries SA and, in the case of the consolidated accounts, of the companies included in the consolidation. It also attests that the management report on the consolidated financial statements includes a true and fair description of the development, operational performance and position of the company, including the companies included in consolidation, and a description of the principal risks and uncertainties with which they are confronted.

The consolidated financial statements are drawn up in euros (EUR), in accordance with the IFRS standards adopted by the European Union Commentary on the development of the company's business and its current situation Given the limited operational activity of the parent company Zetes Industries SA, it is the consolidated financial statements, discussed below, that give an accurate situational view of the Zetes Group (Zetes Industries SA and its subsidiaries). The consolidated financial statements are presented before dividend payment, which will be agreed at the Ordinary General Meeting of 28th May 2014.

After the volatile order-taking and lower profitability of 2012, the Goods ID division significantly improved its performance in 2013, particularly in the second half. This improvement is largely due to good cost control. At the same time, the division

8

continued work on implementing its strategy based on developing its six key solutions.

Sales revenue in the People ID division declined slightly compared with 2012, owing to lower activity in short-term projects, which affected second half performance.

The conclusion and preparation in 2013 of several long-term contracts reinforces the company's confidence in the positive development of People ID for years to come.

Balance sheet and cash flow The significant investments in Goods ID (development of solutions, equipment leased to customers) and in People ID (eVisa infrastructure in Senegal and Cote d'Ivoire, production site and backup for the Belgian driving licence, production infrastructure for the Belgian passport and other projects) have significantly impacted the Group's balance sheet.

Besides the increase in fixed assets (up by a net € 7 million compared with December 2012), the company has also devoted a significant portion of its resources to preparing to undertake People ID contracts.

This preparation work also explains the evolution of the deferred charges account (relating to signed contracts) and of the account relating to construction contracts, together up more than € 1.9 million on 2012. By spreading the cost of a project over its lifespan, these two accounts ensure consistent profitability over time.

These efforts have obviously impacted the Group's indebtedness, moving from a positive cash position of € 7.5 million at the end of 2012, to a net debt position of € 3.0 million at the end of 2013. This increase is structural in nature, insofar as the increase in funding is tied to specific investments. At the same time, available cash has decreased slightly to € 10.6 million (against € 12.8 million in 2012).

Total assets increased by € 4.2 million from € 159.0 million to € 163.2 million.

The net working capital requirement has also increased to € 15.9 million against € 12.7 million at the end of 2012, mainly due to the impact of construction contracts.

Inventory is slightly lower at € 14.3 million, which is a good performance given the stability of the Group's sales.

"The solvency ratio remains very high at 47.23%."

With equity of € 77.1 million on total assets of € 163.2 million, the solvency ratio remains very high at 47.23% (48.8% in 2012 and 47.9% in 2011), despite the Company's decision, given management's confidence in the prospects of the Group, to distribute a dividend of € 2.9 million in 2013. Zetes attaches great importance to having a strong balance sheet structure as this allows it to bid for and, where appropriate, absorb very large deals.

The cash flow from operations is € 4.0 million, consisting of € 10.3 million generated in the income statement offset by the € -6.3 million used to increase working capital (a 'cash' variation). This significant increase is linked in particular to: • The increase in construction contracts and prepaid charges for People ID projects (€ 1.9 million) • Equipment leased out (€ 2.1 million of LT receivables, included in working capital) • A non-structural reduction in supplier payables (€ 2.3 million).

REPORT FROM THE BOARD OF DIRECTORS

Investments by Goods ID reached € 5.8 million, again up from previous years (€ 4.1 million in 2012). These investments break down into equipment for internal use (€ 2.4 million), assets related to operating leases (€ 0.6 million) and financial acquisitions (€ 0.3 million), plus capitalized development costs of € 2.6 million (against 1.8 million in 2012), linked to the Group's 6 flagship solutions. The investments in People ID are of course related to preparation work on the various longterm contracts. They are up significantly at € 4.8 million, against € 1.2 million in 2012.

In total, investments total a historical high of € 10.7 million. They have been partfunded by bank borrowing, with the balance coming from internally generated funds.

In 2013, the Group acquired € 0.2 million of its own shares. At 31st December 2013 it held 234,322 treasury shares (4.35%).

Income statement Group sales revenue amounted to more than € 211 million, virtually unchanged compared with 2012 (-1.2%). The share of recurring revenues remains very high at over 40% of consolidated revenue.

Recurring revenues consist of income from long-term contracts ("Build and Operate") in People ID and from maintenance and consumables in Goods ID. The contribution made by the two divisions to the 2013 results differs considerably.

Goods ID significantly improved its performance. Although sales and gross margin were very similar to 2012, current EBITDA increased by 22.4% thanks to

"Group sales revenue amounted to more than € 211 million, virtually unchanged compared with 2012."

Board of Directors From top to bottom and from left to right: Floris Vansina, Jean-François Jacques, Paul Jacques, Jean-Marie Laurent Josi, Hiram Claus, Pierre Lambert, José-Charles Zurstrassen, Michel Allé, Alain Wirtz, Olivier Gernay

good cost control (-4.3%). In People ID, the second half of the year was marked by lower "Build and Transfer" income, resulting in a 5.5% contraction in sales and a 22.3% reduction in EBITDA. This was, however, a temporary phenomenon and in 2013, the division also signed major long-term contracts. These are at the development stage and will support good income growth in 2014.

Recurring EBITDA amounted to € 13.5 million in 2013, down slightly by 1.5% from 2012.

Non-recurring charges amounted to a net € 0.8 million. These relate mainly to the restructuring programme in Goods ID, to align the division with its more softwareoriented strategy.

Depreciation on non-current assets of € 5.0 million is very similar to that of 2011 and 2012. Write-downs on inventory (€ 0.6 million) and receivables (€ 0.2 million) are in line with last year's figures. Amortization of R&D amounts to € 1.7 million.

EBIT reached € 5.9 million in 2013, 71% of which was generated in the second half.

The net financial result is composed of bank charges (€ 274,000), cross-border payments and various guarantees such as bid or performance bonds, along with bank charges linked to investment finance, the foreign exchange result (€ - 273,000) and lastly, interest expenses (€ 229,000).

The total tax charge of € 0.94 million represents an effective tax rate of 21.6%.

Group net profit is € 3.4 million, down 3.6% on 2012.

Segment reporting Goods ID division 2013 ended much better than it started.

Order-taking began slowly, but the situation improved from summer time onwards, with contracts awarded for a number of large projects. The increased turnover is clearly reflected in current EBITDA, which nearly doubled between the first and second halves (from € 3.1 million to € 6.0 million).

A major source of orders continues to be the retail sector, because it is constantly

9

MCL Mobility Platform receives a warm welcome

First references: Non-food Retail and Transport

looking to increase productivity levels through better supply chain traceability.

Zetes' solutions (ZetesMedea and ZetesChronos) provide an answer to the problem and deliver a rapid return on investment.

Competition between manufacturers is maintaining the strong pressure felt on margins from mobile terminals and other equipment. The sale of services (life cycle management) and software (in the form of services and increasingly, licences) allows Zetes to offset this pressure and maintain its margins. Good cost control linked to productivity gains enabled Zetes to improve its performance, even in the absence of income growth.

In this way the EBITDA/sales ratio increased by 1% from 4.3% in 2012, to 5.3% in 2013.

At the same time, the Division continued to invest in its six key solutions, which capitalize on its core fields of expertise. The first commercial successes validate Zetes’ choice of strategy. The MCL Mobility Platform is proving popular with customers, to whom it offers much more effective management of mobile devices. The first references are now installed in the non-food retail and transport sectors. The six key marketing solutions have already served to offset the constant pressure on hardware prices and margins in the 2013 financial results and Zetes expects to demonstrate this to full effect in the 2014

10

"Order-taking began slowly, but the situation improved from summer time onwards, with contracts awarded for a number of large projects."

results. Indeed, advance indicators, such as sales cycle tracking, show a clear increase in customer enquiry levels for these solutions.

Besides their impact on business in the countries concerned, changes in exchange rates, particularly between the South African rand and the euro, were unfavorable to the Goods ID division. At constant exchange rates, revenue would have increased by 1.9% and gross margin by 0.6%.

People ID division Sales revenues amounted to € 40.3 million, down 5.5% on 2012.

2013 was marked by impressive order taking for long-term contracts (i.e. Belgian passport, biometric visa in Senegal, Gambian passport). But with the exception of Senegal, where the system is in place and has been generating revenue since July 2013, other contracts have tied up large amounts of resources for development and

preparation and will only begin generating revenue during the course of 2014.

Similarly, the 2013 sales figure lacks a major "Build and Transfer" project with a high hardware component. These are generally contracts linked to the preparation of election cycles, for which electoral lists are prepared based on a biometric enrolment of the population. Both the conclusion and execution phases of the contract take place rapidly. Only two "Build and Transfer" projects were completed in 2013, one for Togo and the other for Guinea-Conakry.

Both consisted primarily of services, with limited income but high margins.

Overall in 2013, 80% of revenue came from "Build and Operate" contracts, giving a gross margin of 57.4%, reflecting the division's value-added strategy.

These long-term contracts are often concluded between governments that entrust Zetes with creating a population database and issuing the related identity documents or travel documents. Zetes looks after electronic ID card systems in Belgium, Israel and Portugal, as well as driving licences in Belgium. For a number of years now, Zetes has also managed the comprehensive biographical and biometric registration of Côte d’Ivoire citizens and the issuance (personalization) of their electronic passports.

REPORT FROM THE BOARD OF DIRECTORS

In 2013, the Gambian government awarded Zetes the concession for a similar passport system in Gambia ("Build and Operate" model). Then in August 2013, the Belgian Government tasked Zetes with issuing passports for Belgian citizens. The past months have been spent preparing for these contracts. Document issuance under both contracts will begin in the second quarter of 2014.

"2013 was marked by impressive order taking for long-term contracts."

The breakdown of sales by half year clearly reflects the lack of "Build and Transfer" income in the second half. In addition, from July 2013, the division has internalized the secure distribution of identity documents to the Belgian municipalities. Until then, distribution was undertaken by an independent transportation company, the costs of which were reflected in purchases. This has had the effect of increasing gross margin in the second half, with a corresponding increase in operating expenses.

With current EBITDA down 22.3% compared with 2012 at € 7.7 million, the current EBITDA to sales ratio remained at a high at 19.1% (23.2% in 2012). This sales

400,000

ratio is explained by the very high services component in the "Build and Transfer" contract sales and the capital-intensive nature of the "Build and Operate" contracts. The difference between EBITDA and EBIT (amounting € 6.0 million) is primarily due to the depreciation on these investments.

Goodwill In the first half, Zetes completed a new asset deal, acquiring a team of 10 specialists in e-commerce logistics processes, along with the intellectual property and customer base of the company L4 Epsilon in France (€ 0.2 million).

This acquisition generated a small additional goodwill of € 45,725. In this way goodwill is virtually unchanged from 2012, at € 39.9 million.

The goodwill validation test (review of the recoverable amount) did not reveal a need to record impairment losses.

Belgian passports a year

"The organizational structure introduced in 2012 makes it possible to better utilize the highly professional knowledge and skills available across the Group."

Zetes also purchased 15% of the shares of Zetes Industries Israel for € 0.2 million.

This did not generate additional goodwill.

Human resource management and environmental actions

Border control

In 2013, the Group's workforce grew by 4.5%. In addition to the French acquisition within Goods ID (see above), the People ID Division has handled the distribution

11

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

of identity documents to the Belgian municipalities using internal resources.

With Zetes also increasing its presence in West Africa, the People ID division has grown by 37 employees. In total, the Group's workforce expanded from 1,070 employees at the end of 2012, to 1,118 at the end of 2013.

As with intellectual property, human resources constitute a key asset of the Group.

The organizational structure introduced in 2012 makes it possible to better utilize the highly professional knowledge and skills available across the Group, particularly in the field areas of the six key solutions.

The company and its employees are aware of their civic responsibility in environmental matters and strive daily to

implement responsible practices in this area, including limiting travel, energy saving, waste management and the like.

Principal risks and uncertainties The Board of Directors presents its assessment of the risks facing the Company in the 'Financial information and corporate governance' section of the annual report.

These risks relate to pending litigation, human resources, the environment, exceptional events, acquisitions, new products, technologies and fraud. The same notes also describe the Group’s exposure to prices, credit, liquidity and cash availability, foreign exchange and interest rate risks. To cover these risks, the Company has recourse to traditional financial instruments. It avoids overly complex instruments, which could have questionable transparency.

The instruments currently used are also described in the 'Financial information and corporate governance' part of the annual report.

Events after the closing date To date, there has been no specific postclosing event that influences the annual accounts submitted to the General Assembly.

Prospects for 2014 and description of events that could significantly influence the company's developments.

ZetesAtlas - BMS - France

12

Goods ID Division has started 2014 with a stronger first quarter than in the previous two years. Macroeconomic indicators are improving and customers seem more willing to invest. All sectors are involved, even though the retail sector continues to drive investment. The Group's strategy is in place across all countries and Zetes is looking to harvest the first fruits, as planned, this year. Market interest in the various solutions remains substantial and Zetes will continue to invest in new features and functionality, to ensure its solutions remain as attractive as possible.

Zetes can also rely on its recurring business (25 to 30% of income depending on the subsidiaries’ degree of maturity). Until now, this has been based on maintenance and repair, as well as the sale of consumables (labels, ribbons, etc) and in some countries, it has also been reinforced by the rental income from solutions (managed services).

In People ID, visibility remains very good on all long-term contracts ("Build and Operate"). The Gambian and Belgian passports are scheduled to go into production in the second quarter of 2014.

All the other contracts are expected to contribute positively to the division’s performance.

Zetes started 2014 with a contract to deliver biometric kits ("Build and Transfer") for the Republic of Uganda. Other smaller projects are also running. Together, they will contribute to the achievement of budget targets for 2014.

In summary, the good performance of Goods ID, combined with short and longterm contracts in People ID, should produce significantly better results in 2014 than in 2013.

Research and development Development expenses in 2013 were € 2.8 million compared with € 1.8 million in 2012. These relate mainly to software development. The effort of converting the six key products into standardized products - and improving their functionality - will continue in 2013. This should lead to development costs of the same order as in 2013.

Branches The group’s activity is organized via local companies which are direct or indirect subsidiaries of Zetes Industries SA. Zetes Industries SA does, however, have a dormant branch in Ireland.

REPORT FROM THE BOARD OF DIRECTORS

€ 2.8 million

Corporate Governance Statement

of development costs

The Corporate Governance Statement is included in the 'Corporate Governance' section of the 2013 Annual Report. This Declaration includes, among other things, a description of the composition and modus operandi of the Board of Directors, the main features of the internal control and risk management systems, the composition and modus operandi of the Executive Committee, the composition and modus operandi of the Committees within the Board of Directors, the remuneration policy and most recent remuneration report of Zetes Industries SA with its social capital policy, the measures taken by Zetes Industries SA to comply with Belgian rules on market abuse, the Group Code of Conduct and dividend policy.

Conflicts of interest between directors and the company

ZetesMedea - CERP Rouen - France

No decision has come to the knowledge of the Board of Directors which has given rise to the application of articles 523 or 524 of the Companies Code.

the 'Financial information and corporate governance' section of the annual report.

Related party transactions

Article 74 of the law of 1 April 2007

Related party transactions during the period under review consist essentially of the remuneration of the Executive Committee (3 persons) in an amount of € 966,900 (compared with € 875,981 in 2012).

Transactions with companies linked to directors have been undertaken according to arm’s length principles. Details of related party transactions are included in

The information relating to article 74 of the law of 1 April 2007 on public takeover bids is given in the Corporate Governance Declaration section (Shareholding Structure sub-section) of the annual report.

"Goods ID Division has started 2014 with a stronger first quarter than in the previous two years."

Issue of subscription rights In 2013, the Company did not issue any subscription rights. The powers of the Board of Directors to issue or repurchase shares are set out in Articles 6 and 7 of the company by-laws.

Purchase of own shares In 2013, Zetes Industries SA acquired 18,553 of its own shares at an average price of € 15.61. At 31st December 2013 it held 234,322 own shares, representing 4.35% of the capital for a par value of €

2.2 million. These shares are retained for employee incentive schemes or business transactions involving exchanges of shares.

Audit Committee At 31st December 2013, the Audit Committee consisted of four non-executive directors, two of whom have independent status: • Gema SPRL, represented by Mr Michel Allé (Chairman of the Audit Committee, independent, non-executive director) • Mr Paul Jacques (independent, nonexecutive director) • Mr Hiram Claus (non-independent, non-executive director) • Floris Vansina BVBA, represented by Mr Floris Vansina (non-independent, non-executive Director).

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ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

The independence of Mr. Paul Jacques (who is unrelated to Jean-François Jacques) and Mr Michel Allé is guaranteed by the fact that none of them (or anyone with whom they are related) holds more than 10% of the voting rights of Zetes Industries SA. Their competence derives from their education and professional experience in the financial sector.

Statutory auditor’s report The consolidated financial statements of the company have been audited

by RSM Réviseurs d’Entreprises Bedrijfsrevisoren, represented by Mr. Laurent Van der Linden and Mr. Thierry Dupont. The statutory auditor has informed us that he will express an unqualified opinion.

Proposed appropriation of the results of the Group parent company, Zetes Industries SA The statutory (unconsolidated) income statement of Zetes Industries SA shows sales of € 5.7 million (€ 5.7 million in 2012) and a net profit of € 1.5 million (€ 1.1 million in 2012). With equity of € 60.9 million (before allocation of dividends), the company presents a very high solvency ratio of 92.8%. An abbreviated version of Zetes Industries SA’s statutory accounts is provided in the Annual Report (Financial

1,118

employees

ZetesChronos - An Post - Ireland

14

ZetesChronos - Jerónimo Martins - Portugal

REPORT FROM THE BOARD OF DIRECTORS

Information section). The Board of Directors will be proposing that the company pays an ordinary dividend of € 0.55 gross per share (giving a payout ratio of 83.8% of the consolidated net profit), payable after the Annual General Meeting. Given the 234,322 treasury shares held on 31/12/2013, for which an unavailable reserve of € 3.6 million has been established, the Board proposes to allocate the results of Zetes Industries SA, as detailed in the statutory annual accounts of the Company, as follows:

Discharge of directors and auditors It is proposed to grant discharge to the directors and the statutory auditor.

Brussels, 31 March 2014 For the Board of Directors.

Alain Wirtz SA Represented by Mr Alain Wirtz Chief Executive Officer

Pierre Lambert Chief Financial Officer

In € Profit for appropriation

1 534 994

Profit for the year available for appropriation

1 465 753

Profit brought forward Withdrawal from equity

69 241 1 400 000

From capital and share premium account From reserves

1 400 000

Appropriation Transfer to legal reserve Gross dividend Profit to be carried forward

73 288 2 835 466 26 240

15

All the colours of the world unite in the eye in a unique way. _ INTRODUCING BIOMETRICS TO SOCIETY

12

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING IN TODAY ZETES ANNUAL REPORT CONNECTING WHAT MATTERS

STRATEGY Creating value for our customers is what drives Zetes' strategy. We achieve this by answering complex problems to provide our customers with enhanced productivity, quality and data integrity.

A detailed understanding of the business process challenges facing our customers, combined with correct use of technology, lie at the heart of Zetes' value proposition.

Standing out from one’s competitors and maintaining a market leading position require major investments, which must be identified with a clear-sighted approach and implemented in accordance with our long-term vision.

Goods ID: a coherent approach In Goods ID, optimizing the supply chain is a central customer concern. At every level, companies face the challenge of maintaining the fluidity of transactions and optimizing their use of resources.

In response to these requirements, Zetes has segmented its business offering into six solutions that resolve the need for goods traceability. To achieve this, Zetes combines software and hardware to create solutions that facilitate the collection and transmission of information from ‘shop floor’ areas to company data processing systems. Given the frequent similarity of problems that occur from one company to the next, Zetes is concentrating its development efforts on solutions that address the fundamental needs that exist at every step in the supply chain, from production, warehousing, transportation and logistics, to direct sales in retail outlets.

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

Zetes is also investing in developing integration tools, which enable clients to simplify the project management of solutions implementation, in particular by removing difficulties linked to system incompatability.

The company believes this new approach will enable it to achieve two key business goals. Firstly, by strengthening relationships with existing customers and secondly, by convincing new companies, in particular multinationals looking for standardization, consistency and cost rationalization, of its strong capabilities.

The division's focus responds to a changing market and enables Zetes to maintain its lead role as ‘the supply chain traceability experts’.

People ID: a good mix of two contract models In People ID, Zetes sees a particularly profitable future in "Build and Operate' contracts, which it will secure to balance the flow of income into the Group.

Traditionally, Zetes has brought together key devices and processes, on a turnkey

basis, to enable governments to capture and safeguard its citizens’ biographic and biometric data and produce the required identity and travel documents.

Here, remuneration is generally a function of the number of documents issued and although these contracts rarely generate substantial income in the first year, they provide a regular flow of income to the division in the medium and long term."Build and Transfer" projects, on the other hand, are implemented over shorter periods and respond to an urgent customer request. In this case, Zetes again supplies a complete infrastructure, but transfers

Enterprise applications ERP/WMS/TMS

Goods

Wired & wireless networks

Front end communication Complementary application logic

National register AFIS system

People

Physical Identification & data capture Linking the physical and digital worlds

18

Digital (Secure) data communication

Host system integration

STRATEGY

it onto the customer and assists with implementation. The level of contribution made for this type of contract is higher, but less regular than a "Build and Operate" contract. Our Group objective therefore is to have a good mix of the two contract types in order to generate a sustainable flow of revenues from People ID. Compared with larger competitors in the authentication sector, Zetes relies on its excellent reputation, built as a result of a growing number of successfully executed projects, to increase market share.

A backbone for the two divisions At the Group level, Zetes' strategy is based on three strategic pillars, each of which are reinforced with five levers that give extra traction to the Group's positioning.

Strategic pillars Strong specialization Zetes remains focused on traceability within the supply chain. To this issue, Zetes brings extensive knowledge of computer systems and builds bridges between the physical and digital worlds. Its command of this area makes the company a partner of choice for customers seeking the best solution to a specific need.

Zetes also specializes in systems for issuing and managing identity and travel documents that are subject to national and international legislation (states, European Union, etc.) and private regulations (ICAO standards in the air travel sector).

Complementary activities Although they address different markets, goods identification and people ID are highly complementary activities. This

complementarity expresses itself as shared identification and data security technologies and in the mobility of solutions. It enables Zetes to utilise existing knowledge held in different divisions to create synergies that enable it to propose innovative solutions to both commercial and governmental organisations.

"Attentive to the needs of business and working closely with customers, Zetes is well placed to become a preferred technology partner."

Europe and Africa Zetes still sees many opportunities in Europe related to regulatory constraints, a growing need for traceability and the constant search for productivity gains.

Rich in raw materials and with fast growing and migratory populations, Africa is also a market with a high demand for auto-ID solutions in the future. The two continents therefore remain priority areas for Zetes and will allow it to sustain its growth levels.

Strategy levers Group solutions Solutions developed by the company itself are an essential component of Zetes’ strategy. These allow a targeted approach by market and provide greater flexibility during implementation.

Innovation and synergies The synergy between Zetes’ various divisions and teams within the group allow the company to remain at the forefront of developments in the sector. Exchanges can take place both across market sectors, between technologies and internationally.

departments or with different solution types.

Maximizing competences Customer contact and service quality are essential elements of the Group's success. In this way our employees can accumulate valuable experience, which is then transfered into the solution sets and becomes a catalyst for further team innovation.

Stability Diversification into different markets reduces dependence on any one sector.

Government contracts are for example less sensitive to economic cycles than business investment. Similarly, certain sectors in the supply chain may slow down while others experience growth or are subject to strict traceability regulations.

The same applies to geographic diversification. Recurring revenues also contribute to the stability of the Group: Zetes enjoys a guaranteed revenue base through its long-term contracts and extensive range of services.

Relationships of trust Attentive to the needs of business and working closely with customers, Zetes is well placed to become a preferred technology partner. This confidence can multiply the number projects available from a single organization, within different

19

Being fast is great.

But it’s nothing without being clever. _ZETESCHRONOS : FULL VISIBILITY ON DELIVERY PROCESSES

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ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING IN TODAY ZETES ANNUAL REPORT CONNECTING WHAT MATTERS

VIDEO 'Zetes' activities. Goods ID and People ID '

ACTIVITIES From bar codes to today's supply chain and government solutions, Zetes' success has always lain in its ability to innovate and evolve.

Via its public and private customers, ordinary citizens and consumers are the ultimate beneficiaries of our progress.

Zetes' activities began in 1984 with the introduction of barcodes, a technology that has enabled many companies to increase their productivity and efficiency.

Since then, the company has maintained a constant lookout for the most effective technological solutions to the challenges facing its customers. It has frequently pioneered the implementation of these technologies, investing heavily in research and development over the years. In parallel with this, Zetes has made major efforts to understand its customers' needs and processes, so as to be able to advise on the most appropriate optimization technologies.

Zetes' many investments over the decades have given it a unique positioning in both the supply chain and people authentication markets. Not only has it developed unique knowledge and know-how in each individual sector, it has also created convergences by constantly building bridges between the different aspects of its activities.

Our customers' investment decisions generally originate from a concern to provide a better service to consumers and citizens. They are the ultimate beneficiaries of Zetes’ solutions.

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

GOODS ID

In 2013, Zetes adapted its Goods ID offering to accelerate growth and meet the expectations of customers facing a fastchanging environment dominated by the need for traceability and visibility.

3 decades of investment in supply chain automation Based on its long experience of supply chains and to meet current business needs, Zetes introduced a suite of solutions in 2013 that target the problems specific to each stakeholder in the chain. These improve performance, make them more competitive in terms of productivity and also help them comply with recent legislation on traceability and counterfeiting. This suite of solutions for a collaborative supply chain has its roots in the history of the company and the technological investments made during 30 years in business.

• 1984: Formation of Zetes Belgium, pioneering the use of barcodes in retail.

• 1991: Introduction of Europe's first proof of delivery solution in Spain.

• 2000: First investment in print & apply for identifying goods in production.

• 2000: Investment in voice, to improve warehouse picking performance.

• 2009: Investments in vision technology (or ImageID), to improve and speed up shipping processes.

22

"Zetes' collaborative supply chain has its roots in the history of the company and the technology investments it has made during its 30 years of existence."

Symbiosis between the collaborative supply chain and advancements in traceability, improving services to consumers.

In a symbiotic way, each technology has spawned new applications. This accumulation of expert knowledge of customers' operating sectors, a thorough understanding of their processes and of automatic data capture technology, has enabled Zetes to develop the current offering of its Goods ID division. Today the division approaches its markets with standard software solutions based on the above technologies. In this way, each link in the supply chain finds an answer to its particular needs. The creation of a centralized database also makes it possible to interconnect all players in the chain. A need to exchange data on the movement of goods is particularly acute in sectors such as pharmaceuticals, luxury goods and food, which are confronted with counterfeiting, consumer health concerns and other issues.

100,000 warehouse operators

INNOVATION

work with Zetes, voice recognition solutions

ZetesMedea – Morrisons – UK

A suite of standardized solutions In addition to its own technology R&D, Zetes has made numerous acquisitions to expand its geographical coverage, generally targeting companies whose employees possess detailed market knowledge. These new subsidiaries have adopted the Group's technology solutions, while usually retaining their own solutions in order to capitalize on the expertise of employees and their investments in research and development.

In this way the Zetes collaborative supply chain encapsulates the experience of different experts in different territories.

The current standardization meets a need for simplification, cost rationalization and globalization. Companies with subsidiaries in several countries are increasingly looking for a pragmatic and rational approach to supply chain management.

Standardized solutions enable a consistent approach, implemented by local expert teams.

Management of applications in the cloud In recent years, the concept of the cloud has appeared on the corporate scene and is becoming increasingly popular, given the ease of management applications that the system offers and reduced investment outlays required. This model is, however, difficult to replicate in a

supply chain environment. Unlike an office environment, there is no guarantee that all operators are working with mobile devices and have internet connectivity.

A tool adapted to the needs of these players but offering the same benefits was required and this is exactly what the MCL Mobility Platform does. This is marketed with several Zetes' solutions, enabling customers to reduce their IT infrastructures and simplify applications management. The main benefits the MCL Mobility Platform offers are: • The ability to manage applications in several locations without local IT departments.

• Readiness for future technological developments (both in terminals and operating systems) as the platform allows customers to adapt to new situations without a need for major investment in software development.

"The MCL Mobility Platform enables customers to reduce their IT infrastructures and simplify mobile applications management."

• Downloading of new applications from a centralized location.

• Automatic updating of terminals and applications.

• Scalability, with easy deployment in new locations and easy addition of new users during peak periods.

Computing capacity responds elastically to customer needs, without the need to invest in additional infrastructure to handle production peaks.

• No additional costs for IT infrastructure and administration.

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ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

ZETESATLAS - PRODUCT IDENTIFICATION AND TRACEABILITY ON PACKAGING LINES

ZetesAtlas is a packaging execution system (PES), which manages, secures and enhances the product identification process at the packaging stage.

24

VIDEO ‘Datamatrix identification at Bristol-Myers Squibb’

Counterfeiting and Consumer Safety

Total control of the packaging line

Traceability is definitely the key concern for many production companies. It is necessary in order to combat counterfeiting and to ensure that a quality product is delivered to the end consumer. Recent scandals, mainly in the food sector, as well as consumers' increasing concerns about the environmental impact of the products they buy, have bred a growing number of regulations and companies need to find a way to comply. Where problems persist, it is imperative to organize the quick and efficient return of goods in question. The opportunities for ZetesAtlas are many, since a significant number of companies are still looking for a solution to comply with this reality, which is barely a decade old.

The ZetesAtlas solution interfaces with a company's ERP system to manage the tools that mark the products leaving production lines. This approach, which greatly reduces manual intervention, can considerably reduce the number of errors. With a single operator, ZetesAtlas can configure all the printers, labelling robots and control cameras which permit the identification of individual products and their aggregation: which products are in which box, which boxes are on which palette, etc. Aggregation of data from one level of packaging to another is critical for efficient traceability. ZetesAtlas is also able to support serialization, i.e. the identification of products by unit rather than by batch.

Moreover, 90% of companies in the production sector are not yet aware of the benefits of an integrated packaging line identification solution.

Combined with ZetesOlympus, which links the company's partners (customers and suppliers), ZetesAtlas provides optimum visibility of product movements.

Potentially interested in this type of solution are the pharmaceutical, luxury goods and food sectors. Other sectors have also expressed interest.

ACTIVITIES

ZETESMEDEA - PROCESS OPTIMIZATION IN THE WAREHOUSE

A highly competitive industry Subject to strong economic pressures, a company’s main objective is to secure high levels of productivity while minimizing costs. Achieving this requires high levels of automation to speed up processes and minimize the number of errors. Accurate, rapid deliveries are a decisive factor in the choice of supplier.

The spread of e-commerce also presents growth opportunities for ZetesMedea. The organization of a dedicated e-commerce warehouse is very different from that of a traditional goods distribution warehouse.

Serving a larger number of customers with smaller quantities of products, it has its own specific needs. In July 2013, Zetes acquired the French company L4 Epsilon, specializing in the e-commerce sector.

Currently, the L4 Epsilon proposition is being integrated into ZetesMedea.

ZetesMedea is a logistics execution system that improves the efficiency of warehouse processes. It helps reduce costs, permits error-free execution of operations and provides real-time visibility of warehouse events by integrating advanced technologies like voice and ImageID.

This solution is of primary interest to the retail and food sectors, both in traditional business and e-commerce.

VIDEO ‘Voice picking at Système U’

Visibility from reception through to shipping Zetes pioneered the introduction of voice recognition in warehouse processing.

Since then it has successfully advanced the technology and extended it to other areas such as order picking. Within ZetesMedea, voice is the solution that still presents the greatest level of opportunity.

Based on the MCL Voice system, the ZetesMedea Voice solution is a powerful system with operators no longer requiring training, or having to record their voice profiles, but able to start working immediately. Moreover, unlike other voice technologies, MCL Voice offers a choice of different hardware suppliers and allows voice to be combined with other data capture technologies.

Zetes has also developed a dock door control module, based on ImageID technology, which enables trucks to be loaded faster, while reducing errors.

The ability to manage all warehouse processes is an important competitive advantage for Zetes, allowing the user to track a product from the point at which it enters the warehouse to when it leaves.

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ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

ZETESCHRONOS - OVERALL VISIBILITY OF THE DELIVERY PROCESS

ZetesChronos is an advanced mobile Proof of Delivery (POD) solution.

Designed to control the full range of collection and delivery processes, it offers real-time visibility of the movement of goods and related employee activities, from loading of goods to delivery, ensuring traceability at every stage of the delivery process.

26

VIDEO ‘Innovative POD solution at Rangel’

Increasingly demanding customers

Next generation ePOD

Like the warehousing sector, the transportation sector is having to adapt to a changing marketplace and especially to e-commerce, which is resulting in larger numbers of smaller deliveries. This calls for an adaptation to working methods and, by extension, to the solutions that automate these processes. An increasing number of customers are also demanding same-day delivery. This requires a very high degree of flexibility which, together with rising fuel prices and fierce competition, makes process optimization a central concern for transportation and logistics companies.

The majority of parcel and courier delivery companies have already made the transition from paper processes to automatic data capture solutions, but the ePOD solutions they use tend to focus on digitizing collection and delivery processes and therefore on improving the performance of individual drivers. Zetes proposes a next-generation solution that improves both the performance of company employees as well as the image of the business itself. This is made possible by integrating tools that link the back office and business intelligence.

Proof of delivery solutions are of particular interest to postal services, parcel and courier delivery services, the retail sector and logistics service providers.

Many opportunities also remain in the retail sector, where the use of paper remains widespread for proof of delivery.

The real differentiator for Zetes is, however, the MCL Mobility Platform, which can manage all the terminals and applications in the cloud.

ACTIVITIES

ZETESARES - DIRECT STORE DELIVERY FOR IMPROVING SALES

ZetesAres is a complete Direct Store Delivery solution designed to increase sales through better customer management. Embracing orders, sales, delivery, asset management and maintenance, it transforms salespersons into highly efficient and reliable advisers, selling the right product at the right place and at the right time.

Selling more and better

Ergonomics and ease of use

Marketing is one of the main factors that leads companies to opt for direct instore sales solutions, with a professional presentation of products to enhance their brand image. In addition, they are keen to provide a better service to customers in order to be more competitive and increase sales.

ZetesAres operates on tablets, allowing easy access to information about products and a pleasant and ergonomic design.

With all applications combined on a single device, a salesperson can close a sale faster and quickly calculate the amount of stock still available in the van.

In the cosmetics sector, a direct in-store sales solution helps combat grey markets by gaining better control of distribution channels. It is also of interest to niche food businesses, which face strong competition and a need to differentiate themselves.

Like ZetesChronos, ZetesAres uses the MCL Mobility Platform, but its appeal lies in its comprehensive functionality. In addition, being part of the "collaborative supply chain" portfolio means it can be connected to other links in the supply chain including ZetesAtlas, for effectively combating counterfeiting.

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ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

ZETESATHENA - SMART IN-STORE MANAGEMENT

Shop

ZetesAthena is a complete solution for the creation, storage and deployment of in-store management applications in the cloud. From reception to stock-taking, from repricing to replenishment, from access to product information to click & collect, data management is centralized and simple, with no requirement for heavy investment.

28

Difficulties faced by multinationals in managing applications

Reduced investment and ease of management

Here too, new buying habits are strongly influencing companies' technology decisions.

Increasingly, well-informed customers are using a growing number of channels to check the price and availability of products and then make purchases.

This implies first, that store chains need to offer multiple distribution channels and, secondly, that they require full inventory visibility, both at the branch consulted and others (to redirect the customer if necessary), product information, etc.

Addressing the loss of potential sales due to ‘out of stocks’ is a primary challenge.

Solutions to improve store processes are widespread and generally offer very similar functionality. Zetes has an important differentiator with the MCL Mobility Platform. This is advantageous for retailers with a large number of stores to manage, particularly in the clothing and luxury goods sectors, as well as airport shops and concessions. Using the platform minimizes their IT investments at each point of sale.

The multiplication of distribution channels calls for very accurate inventory management as well as shipping and returns. Many stores go out of business daily because they lack processes adapted to this new reality. Here too, fierce competition and the economic environment are pushing companies to find ways to reduce their investment.

ZetesAthena customers have an advantage in terms of time spent by their employees dealing directly with customers rather than on administrative and technical tasks. The solution also allows a more fluid exchange of information between different branches of the same chain, including stock availability data.

In combination with ZetesMedea and ZetesChronos, ZetesAthena offers a perfect solution to manage processes affected by the multiplication of distribution channels.

ACTIVITIES

ZETESOLYMPUS - END TO END TRACEABILITY FROM PRODUCTION TO CONSUMER

Shop

ZetesOlympus is the central component of the Zetes Collaborative Supply Chain. It acts as a unified database and can interface with information sources, both internal and external to the company, to know at any time, what has taken place, when, where, and involving whom.

Protecting brand image

Total visibility

Opportunities for ZetesOlympus are strongly linked to those of ZetesAtlas, insofar as the main purpose of ZetesOlympus is to ensure better product traceability by sharing data between the various links of the supply chain. All partners have access to information, with the production company acting as the initiator and biggest beneficiary. Whether the issue is one of product quality or counterfeiting, it is the brand’s image that is in danger. Branded goods manufacturers are keen for this type of database, to be able to track goods from the time of manufacture until sale to the consumer.

In the supply chain field, Zetes is the only company to offer a range of solutions that simultaneously improve the processes of each individual link and pass up product information instantly to a central database.

The visibility obtained on the movement of products throughout the supply chain is particularly useful for the pharmaceutical, luxury goods and food sectors, which face more pressing issues of counterfeiting or traceability regulations.

ZetesOlympus can also be used to track containers. Each year, companies lose large sums of money due to the loss of pallets, carts, plastic containers, etc.

ZetesOlympus can locate these assets within the company itself, or with a customer or supplier, saving the customer money and also reducing its environmental impact.

29

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

Zetes’ Collaborative

N° 20202020 Lot 202 2020/20/02

Product Identification Serialisation

N° 20202020 Lot 202 2020/20/02

N° 20202020 Lot 202 2020/20/02

N° 20202020 Lot 202 2020/20/02

N° 20202020 Lot 202 2020/20/02

N° 20202020 Lot 202 2020/20/02

N° 20202020 Lot 202 2020/20/02

Data Aggregation

Box Labelling

Pallet Control

Pallet Labelling

N°217 Mr Johan Schmitz

1 N°217 Mr Johan Schmitz

Proof of Delivery

Store

Proof of Delivery

30

Put Away

VIDEO ‘The collaborative supply chain’

e Supply Chain Solutions Product X Quantity Y

Go to location XY, pick 1

Put Away Replenishment

Inventory

XY, 1 OK

Order Picking

Kitting

Dock Door Control

Shop express

12x

Shop �pres�

Direct Store Delivery

Location X Quantity Y

€

Location X Quantity Y

€

N°217 Mr John Smith

€

€

€

€

€

€

€

€

€

€

€

€

€

€

€

go to AB, put 6

COLLECT

AB, 6 OK

N°217 Mr John Smith

Replenishment

Price & Promotion Management

Inventory

Sales Escorting

Click & Collect

31

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

A solid partner

Geographical proximity

Companies are looking for partners with the technical and human resources to support them in projects that are of crucial importance for their organizations. In a market that remains highly fragmented, Zetes has:

Zetes' Goods ID activity requires geographic proximity to customers: knowledge of local cultures and the ability to respond quickly. The Group is therefore seeking to expand its presence, through acquisitions or by organic growth and be present where companies are developing their activities.

As the European leader in automatic identification, it intends to further strengthen its position in the coming years.

The unique network developed in this way also enables it to respond to the needs of multinationals seeking solutions and equipment uniformity.

• The critical size required for deploying large-scale projects; • A solid financial base, enabling it to make significant investments, particularly in infrastructure; • A network of offices across 15 EMEA countries, for supporting our customers' international projects.

Direct Presence

32

Countries Served

"Zetes' geographical coverage enables the Group to be close to customers, to correctly define their needs and intervene rapidly on the ground."

ACTIVITIES

Growth opportunities

Safety legislation and brand protection are leading companies to

invest in traceability

Europe Europe is Zetes' historical continent, on which the company has developed a large network of subsidiaries. This geographical coverage enables the Group to be close to customers, correctly define their needs and intervene rapidly on the ground.

Despite the uncertain macroeconomic situation in Europe, there are still growth opportunities for Zetes as follows: • Geographically: There are still many opportunities for Zetes to be present and strengthen its leadership position.

• In terms of business needs: Identification and traceability needs are changing, particularly in terms of security, legislation, brand protection and multiplication of sales channels. These changes reflect a growing desire to protect and satisfy consumers, who are increasingly discerning about the origin and quality of the products they buy.

• Technologically: with its size and financial solidity, Zetes can dedicate international teams to develop solutions in line with market needs and thus stay a step ahead of the competition.

Africa In South Africa, Zetes has five sites in four cities: two in Johannesburg, and one each in Cape Town, Durban and Port Elizabeth.

The African continent offers great development potential with an acute need for traceability and supply chain solutions.

The most promising sectors there involve capitalising on the continent's many

ZetesAtlas – Brystol-Myers Squibb – France

natural resources, and manufacturing, which is booming. In addition, South Africa is an ideal access point to the entire subSaharan region.

Two continents, one supplier Zetes' presence in both Europe and Africa offers a big advantage to companies that operate on both continents. The Group is able to offer the same level of service everywhere. As supply chains go global, multinational companies are starting to look for so-called "glocal" solutions: a global approach but with local services and support.

"As supply chains go global, multinational companies are starting to look for so-called 'glocal' solutions."

In the highly fragmented automatic identification market, Zetes is the only company able to provide this level of service. Our approach has won Zetes several major contracts and this trend is expected to continue in the years to come.

33

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY VIDEO ‘E-voting solution’

PEOPLE ID

In 2013 Zetes signed several long-term contracts (Belgian passport, biometric visa in Senegal, Gambian passport, and others).

These will begin to generate revenue during the course of 2014.

10 years at the top of the security market For the past decade, Zetes has been one of the most influential players in the identity and travel documents sector. With its contracts for social identity cards, biometric passports and visas, driving licences and electronic identity cards, Zetes' portfolio of customer references has expanded on both European and African continents.

New initiatives such as the "Your eID, making life simpler" campaign by the Belgian authorities, serve to highlight the many applications of electronic identity.

Zetes is very much at the forefront here, with, in particular, the launch of the Zetes eaZySign platform. This enables the legally binding electronic signature of documents and their subsequent storage in a secure environment.

The potential market for applications such as these is huge, with many countries still having to move into the electronic age or adopt high-accuracy biometric authentication.

"Many countries still have to move into the electronic age or adopt high-accuracy biometric authentication."

Zetes has developed a full product range spanning live citizen enrolment to the issuance of identity documents. In recent years it has also added a fixed biometric enrolment station and an e-gate for automated border control. It has also updated its mobile enrolment kit, as used in electoral census operations. The main advantages of its new model are ergonomics (or ease of use) and a high degree of autonomy.

Innovation and references as growth factors Zetes has chalked up a number of innovative achievements, including: • First large-scale deployment of the electronic ID card in Belgium in 2005; • World première with the biometric enrolment of over 25 million Congolese voters in 2006; • Ivorian biometric passport, a ‘nec plus ultra’ document incorporating live biographical and biometric recording, in 2008; • Gambian passport with simultaneous integration of biometric information (iris) and fingerprints in 2013.

Secur-eVote

34

States need visibility of populations residing in or passing through their territories

Enrolment site - Banjul - Gambia

The electronic voting solution is also being improved constantly. Faster, more efficient and more reliable than paper voting processes, electronic voting helps ensure voting confidentiality, offers immediate and reliable counting with guaranteed integrity and control tools, and reduces paper-related errors by eliminating manual reading and counting.

All solutions offered to customers, whether software, hardware or a combination of the two, require great robustness and guarantees of security.

Zetes has therefore sought certification of the highest standards, such as ISO27001, for IT security.

The successful project completions in Belgium have allowed Zetes to expand elsewhere in EMEA. The reasons for focusing on this region are many.

Investment in business development is sizable, plus sales cycles are long and require sustained effort. The choice of Africa as a target market is easily justified: many states there want to strengthen their national registries. The identification and localization of populations are critical tools for policy development. African leaders have clearly understood the value of biometrics to ensure accurate citizen authentication.

"Most calls for tenders for identity and travel documents require certifications and extensive references."

Apart from the countries already mentioned, Zetes has also deployed its solutions in Togo, Burundi, Gabon, Cape Verde, Benin,

Chad, Israel, Sierra Leone and Portugal.

The company's good reputation is closely tied to the success of these projects. This accumulation of customer references is essential and guarantees the growth of Zetes’ People ID business.

Most invitations to tenders (RFT) for identity and travel documents require certifications and extensive references.

Zetes is therefore well positioned to continue its growth.

Personalizing the Belgian passport From 2014, the Zetes Group will be responsible for the personalization and distribution of electronic passports for Belgian citizens. The Group will rely on processes that have already been widely tested in similar projects and on a secure computing infrastructure.

Nearly 400,000 passports will be personalized each year. Zetes will also take in hand the distribution of passports to authorities. By integrating this last link, Zetes reinforces the watertight nature of the entire process and further reduces the risk of theft or fraud.

Particular emphasis is also placed on the quality of the photo in the new passport.

In 80% of cases, this is the parameter on which counterfeiters operate. This photo is therefore reproduced in multiple places in the document.

35

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY VIDEO ‘Election preparations in the DRC’

"The comprehensiveness of Zetes' offering enables a country's authorities to entrust a single supplier with the implementation of what for it are highly complex projects"

Control of the entire production chain Over the years and using the most innovative technologies, Zetes has developed a portfolio of solutions covering the entire value chain leading to the production and control of secure identity and travel documents. These include: • Concurrent biometric and biographic enrolment • Secure data transfer • Centralization and creation of population databases or registers

• Data reading and identity control (administration, border control, elections, etc.).

The reason for the Group's success lies partly in the comprehensiveness of its offer, enabling a country's authorities to entrust a single supplier with the implementation of what it regards to be highly complex projects.

Citizen identification: a challenge for each state

• Document production

People identification solutions are intended for states and governments, for whom a good view of the populations residing on or passing through their territories is essential, including and in particular for:

• Document personalization

• organizing democratic elections

• Information control and elimination of duplicates

• Secure transportation of documents

• controlling migration flows

Personalization of the Gambian passport and delivery of e-gate station In October 2013, Zetes won the contract for the personalization of Gambian passports.

This 15-year contract is an excellent showcase of Zetes’ full range of skills, which include responsibility for: • Establishing a secure site, benefiting from the expertise of its Belgian site, achieving ISO 27001 certification • The enrolment of passport applicants, using fixed stations, developed and produced by Zetes • Creation of a centralized database combining two types of biographic and biometric data (iris and fingerprint) • Secure data management • AFIS deduplication • Personalization of the passport • Secure delivery of the document • Automated border control through an e-gate developed and produced by Zetes.

36

ACTIVITIES VIDEO ‘Using the eID on smartphone and tablet’

4,250 mobile kits

• administrative management • human resource management (e.g. civil servants, police, military personnel).

delivered in Uganda in 2014

The main challenge facing states in this area is to combat identity theft and counterfeiting.

Where authentication projects emanate from governments, citizens also benefit from a secure identity, enabling them to prove that they are who they say they are and thus to exercise their rights, to access government services and to cross borders.

Priority to data security of citizens People identification touches on the concepts of privacy and confidentiality. It is therefore imperative to provide maximum assurances of security both in the management of data and in the documents themselves.

This translates into several measures:

Mobile enrolment kit

• "Live enrolment": based on fixed and/ or mobile kits, Zetes' solutions ensure unity of time and place when collecting biographic and biometric information.

• Holding ISO 27001 certification for the secure management of sensitive information.

• Data encryption for both transferring information and restricting access to certain data contained in a document to its owner only.

Zetes continues to invest constantly in this area, to assure authorities and citizens of the highest levels of data protection.

Very good visibility for long-term People ID contracts

• The use of advanced materials and techniques in document production to ensure their non-counterfeitability.

"The Senegalese, Gambian and Belgian contracts won in 2013 will contribute to the division's results from 2014 onwards."

The business model within People ID is based on "Build & Operate" (BO) and "Build & Transfer" (BT) contracts.

BO contracts involve projects for producing secure documents (e.g. Belgian and Israeli identity cards, Ivorian biometric passports).

These are concessions granted by states for periods extending over several years.

Such contracts require significant frontend investment, but the recurring revenue they generate over time offers considerable

visibility and predictability to the Division.

The Senegalese, Gambian and Belgian contracts won in 2013 will therefore contribute to the division's results in 2014.

BT type projects, most of them currently in Africa, are more limited in time frame.

These are biometric enrolment projects used for elections, censuses of officials, etc. In this case, Zetes takes responsibility for developing an infrastructure that is transmitted on a turnkey basis to the client.

Thereafter, Zetes offers additional support services relating to project management, technical assistance or training. In March 2014, Zetes signed a contract to deliver 4250 mobile registration kits to Uganda.

37

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

Enrolment

AFIS

At this initial stage, the biographical and/or biometrical data of each person to be identified are recorded with the aid of fixed or mobile identification stations.

Thanks to a high-performance information checking system (AFIS or Automated Fingerprint Identification System), Zetes searches for duplicate entries. If the system finds that identical biographical and/ or biometrical details exist more than once, an alarm is raised and the identities of the people involved are verified.

Centralisation

Database / national register

Once personal data has been recorded, it is centralised in a single, structured database. The data is transferred in an encrypted manner via satellite communication, the Internet, or digital media.

38

VIDEO ‘Overview of People ID activities’

Once all the data has been verified, a reliable database is available that, if necessary, can be used to prepare a population register. A register of this sort is still currently lacking in many countries.

PASSEPORT

ACTIVITIES

Document delivery

Control

When handing over the document, a civil servant re-checks the citizen's biometric data. If the document contains encrypted data, the citizen will have previously received a PIN code which, for increased security, may be changed at the time of delivery.

The information gathered is verified against the existing database. The implementation of biometry and AFIS allow the detection of fraudulent individuals attempting to present themselves under a false identity.

B

Production / personalisation The verified data can also be used to produce and/or personalise secured documents. These documents include electronic ID cards, biometric electronic passports, visas, driving licences, voter cards and social security cards.

Online applications The electronic identity card allows remote identification on the Internet, giving access to a number of applications and secure portals.

These can be private or public, such as electronic signing of documents or tax returns in Belgium.

39

It's good to know someone's keeping watch.

Wherever you go. _ZETESOLYMPUS : REDEFINING TRACKING & TRACING

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING IN TODAY

INNOVATION In Goods ID, re-modelling our product offering around the "collaborative supply chain" has unleashed a new innovation thrust, with enhanced cooperation between subsidiaries and greater integration of their expertise.

Safety and ergonomics remain priorities in the development of People ID solutions.

Innovation is the very essence of a company like Zetes and essential for survival. But a new idea does not remain new for long.

Zetes therefore needs to invest continually in order to maintain its competitive advantage and innovation positions us as a leader. The Group has been a pioneer in many ways: introducing barcodes in supermarkets, bringing voice recognition technology to warehouses and electronic identity cards to national States. In line with the ever changing needs of businesses and governments, Zetes focuses on driving innovation and implementing the best possible mobility and identification technologies for its customers.

• To encourage innovation, Zetes actively promotes exchange and collaboration at multiple levels: • Between experts from the same division • Between the Group's international subsidiaries • Between Goods ID and People ID • Between a company and its customers.

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

This approach has led to the "productization" of solutions in Goods ID, the development of specific tools, such as the MCL Mobility Platform and new products and solutions in People ID.

• data needs to be made secure

The collaborative supply chain

• within a single installed base, they use rugged mobile computers, specially designed for a supply chain environment and mobile devices such as smartphones in parallel.

In 2013, Zetes introduced its collaborative supply chain solutions. Adapted to the specific processes of each market, they call on the diverse technologies in which Zetes has developed extensive expertise over the years.

Using its knowledge, Zetes creates synergies, both in terms of technologies and the level of expertise in different countries. This pooling enables Zetes to market solutions that are consistent at a Group level, flexible, and full of essential functionality.

The collaborative supply chain responds to customer concerns about sharing data between different players in the supply chain while delegating to a trusted third party. As a trusted partner, Zetes holds the responsibility for providing secure and segmented access to this data.

The MCL Mobility Platform.

Platform by the Zetes Group brings a number of advantages for both customers and Zetes’ own subsidiaries. The latter can increase its focus on the functional aspects of solutions while at the same time being able to guarantee their compatibility with different operating systems. For customers, access to the MCL Mobility Platform allows them to centrally manage their installed bases and to obtain practical information on terminal usage.

• they face difficulties in managing fleets of terminals and mobile applications • they want to be able to produce reports and analyses

This approach has already met with great success, especially in the case of ZetesChronos and ZetesAthena solutions.

It was a decisive factor behind Zetes successfully winning several contracts in 2013.

Managing a mobile infrastructure becomes a truly complex issue for these companies.

To address this problem, the MCL Technologies division has designed and developed an integrated mobility platform.

Unlike other mobility software, the MCL Mobility Platform goes well beyond the parameterization and management of mobile terminals. It focuses on mobile applications and all operational aspects of mobility. Messy and time-consuming tasks like deploying a project on multiple sites, adding new users and updating applications, are all greatly simplified.

Standardizing

on

the

MCL

Moving towards a "Software as a Service" (SaaS) model With the MCL Mobility Platform architected as a cloud application, Zetes is able to market its solutions using a subscription model (Software as a Service or SaaS).

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INNOVATION

By limiting customers' investment in their IT infrastructure, the Cloud approach offers a significant cost advantage. In addition, centralizing management also provides major time savings in the implementation of solutions.

and maintenance, which is operated for a monthly fee covering hardware and software. This is an attractive model for many companies.

The Zetes Academy and knowledge sharing

Moreover, the usual financial benefits of SaaS are also present in solutions based on the MCL Mobility Platform. These include a reduction in capex and total cost of ownership (TCO), scalability, ease of use, including maintenance, automatic updates, centralized and protected data and greater resilience.

"Zetes has introduced, in parallel with its SaaS offering, a Hardware as a Service (HaaS) offering, which is an attractive model for companies."

The MCL Mobility Platform also allows Zetes to innovate by offering “Back-End as a Service” (BaaS) services. Managing the flow of data between mobile terminals and a company's management systems involves combining many resources.

BaaS greatly simplifies this aspect since the mobile terminals/central systems interface is standardized via the platform.

Finally, the versatility of the MCL Mobility Platform makes it possible to offer hybrid solutions for customers as required. This means they can benefit from Cloud and MCL Mobility Platform services, while continuing to manage the data flow on their own site.

In terms of hardware, Zetes has introduced in parallel with SaaS, a Hardware as a Service (HaaS) offering. In this way it is the entire solution, including mobile terminals

Each solution is supported by a BSG or Business Solution Group, consisting of ten or so Zetes experts from different countries. This strategy makes it possible to combine expertise distributed across different territories and ensure a coordinated approach to each vertical market.

To ensure consistency and optimal communication between teams, Zetes has established an Academy, resulting in common solutions and shared within the Group.

When developing hardware for its solutions, the People ID division calls on the design and production capabilities of Goods ID. This collaboration has resulted in solutions including SecureVote, the fixed biometric enrolment station and now e-gate. An identical collaboration also operates at the software level. In order to track the issuanc of the Belgian driving licences and Belgian passports, People ID is using the ZetesChronos proof of delivery solution developed by Goods ID.

Passports and automated border control.

Towards a strengthening of security The People ID division continues to work on improving both hardware and software solutions. For the Gambian passport project, Zetes achieved a world first by incorporating biometric iris information directly into the passport. As part of this same project, Zetes will be installing its first automatic border identity control e-gate station, which operates by comparing a traveller’s biometric information with that contained in his passport. The e-gate strengthens Zetes’ People ID division's offering. Automated border control solutions are expanding worldwide. The potential market is huge and Zetes has a high-end solution, which is able to meet a States’ most stringent requirements.

43

Everyone protects what is most precious to them. _OPTIMISING ID SECURITY

12

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING IN TODAY ZETES ANNUAL REPORT CONNECTING WHAT MATTERS

SOCIAL RESPONSIBILITY The Group continues to invest in staff training and improving the security of its solutions to guarantee customers the best possible quality. Special attention is also given to the environment and Zetes has recently been awarded a number of ISO certifications, including ISO 14001.

For Zetes, maximising our employees' well-being and personal development is an essential motivating force. Our priorities mirror the major concerns of civil society to protect consumers and citizens, which by extension, includes Zetes' corporate and governmental customers. The Group also places great importance on its environmental responsibilities.

Employment Zetes' main driving force, its employees Zetes owes its success primarily to its employees. Being largely a services company, its main assets are the strong relationships that it fosters with customers and the creative solutions it develops to solve their problems. To achieve this, an in-depth understanding of the markets in which these customers operate is essential, together with mastery of the various automatic identification technologies and an excellent understanding of local cultures.

Advanced protection of citizens' data

Gambian biometric passport

Capitalizing on know-how

Respect for the individual

These factors make the knowledge and know-how of the company’s personnel a crucial asset, which Zetes makes every effort to retain and strengthen.

Consequently, when integrating new employees and their know-how following an acquisition, Zetes takes care to avoid losing the skills brought on board.

Zetes is vigilant to ensure that its personnel are not subjected to discrimination of any kind, whether racial, physical, political, religious, or sexual. The company respects all employment legislation within the European Union and in the countries outside the EU where it operates. Zetes offers its personnel a genberous level of social benefits, which often exceeds statutory requirements. It also seeks to contribute to the development of less fortunate regions, such as Africa, by recruiting and training local workers and entrusting them with technical and managerial responsibilities.

Currently, Zetes has a direct presence in CĂ´te d'Ivoire, Senegal, Gambia and South Africa.

Sharing knowledge between colleagues, both old and new, can enhance individual skills and strengthens the Group as a whole.

Evolution through exchange Faced with a fast-changing world and, in particular, continual technological advancement and customers seeking productivity gains against a backdrop of an increasingly complex regulatory environment, it is imperative for our employees to be constantly updating their skills. In response to this, Zetes has introduced an organisational structure to facilitate sharing knowledge and capitalizing on existing experience.

For several years, internal training and the recruitment of highly qualified personnel have enabled Zetes to significantly strengthen skill levels and customer service effectiveness.

46

in a sporting event as part of a team of 250 runners, in support of a voluntary association.

Committing to the "Nos Enfants Cardiques" voluntary association In 2013, for the seventh consecutive year, Zetes joined forces with "Nos Enfants Cardiaques" for the annual Brussels 20km road race. This voluntary association, composed of parents of children with heart defects and members of the healthcare team at Cliniques Universitaires Saint-Luc in Brussels, seeks to improve the wellbeing of children with heart defects and their families.

This collaboration is an opportunity for the Group's employees to participate

Better identification + traceability = Better protection Protection of citizens People identification is vital to the exercise of democratic rights, such as electoral participation and the protection of personal data. More specifically, Zetes’ solutions provide an answer to the following needs:

SOCIAL RESPONSIBILITY

• Preparing a democratic electoral process

Producing reliable voter lists is a real challenge for countries without a national population register. With its biometric enrolment solution, Zetes offers an answer to the requirement of one citizen = one vote.

• Combating identity theft Incorporating biometric data into identity documents guarantees that the document holder is indeed the person he or she claims to be. Comparing a citizen's fingerprints with an existing database can prevent a person from assuming two different identities or from trying to steal someone else's identity.

• Combating fraud As well as personal data, it is also necessary to protect the document itself. The identity documents Zetes produces incorporate proven security features that are impossible to counterfeit. Zetes is currently involved in eiD projects in Belgium (national identity cards, foreign resident’ s cards, kids-ID), Portugal and Israel. It also personalizes passports for Belgium, Côte d'Ivoire and the Gambia.

Sensitive data protection The processing of citizen-related data calls for a very advanced level of protection and hence for secure data management systems. In this way, Zetes became one of the first businesses in its sector to be awarded the ISO 27001 certification for the production of eID and eTravel documents (passports, visas, etc). This is the only internationally recognised standard that defines security prerequisites for the implementation of an Information Security Management System (ISMS).

This competence was initially developed for sensitive projects such as those in the People ID arena, which involve ensuring the security of citizen data for national governments. It is, however, also an increasingly valuable asset in Goods ID, where companies believe that a data breach can seriously compromise their activities.

Consumer protection In recent years, consumers and, more specifically, consumer health, have become primary supply chain concerns. Sectors such as the food and pharmaceutical industries need to comply with increasingly strict national and supranational regulations. The portfolio of solutions developed by Zetes meets these societal issues by introducing new elements such as use of the cloud. ZetesOlympus, for example, makes it possible to collect all data related to a product and offer secure access to this database to various supply chain stakeholders. This greatly facilitates the traceability of defective products or the identification of counterfeit goods.

Environmental protection The streamlining of processes inevitably involves the dematerialization of information and automation of information flows. Zetes makes heavy use of mobile communications. Whether by optimizing supply chains or using electronic signatures, this remote exchange of information contributes to reducing physical movement. At a company level, process automation reduces errors, with a knock-on reduction to losses during production and the logistical headache of processing returned goods. All companies are looking for ways to efficiently manage their mobile assets (vehicles, pallets, tools, etc.) Identifying and locating these assets in real-time can optimize their use and thus reduce the overall numbers required.

"Zetes has obtained ISO 14001 certification for its identity cards and travel documents production site. This allows it to control the impact of industrial activity on the environment."

Despite its relatively small ecological footprint, Zetes has begun introducing an environmental management system to respect the environment. It has obtained ISO 14001 certification for its identity cards and travel documents production site. This allows it to control the impact of industrial activities on the environment.

As part of this initiative, a volunteer GreenTeam has been put together to develop environmental initiatives and strive to achieve the following objectives:

• Raising awareness and continuous improvement of environmental performance;

• Sustainable management of raw materials;

• Responsible use of energy;

• Ecological management of the building and surrounding areas.

All processes have been reassessed for their environmental impact and improvements have already been implemented.

47

Nothing is more ‘all right’ than picking the right one on the right moment. _ZETESMEDEA : GIVING CONTROL OVER WAREHOUSE OPERATIONS

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING IN TODAY

SHAREHOLDERS INFORMATION Clear communication on the Group's achievements and goals ought to enable investors to gain an accurate picture of its financial health and its prospects. Therefore, Zetes works continuously to improve its communication tools.

The company pays particular care to the preparation of its annual and interim results. Management takes care to remain accessible, especially to answer questions that might arise in investors' minds. The website is updated at regular intervals, with emphasis on ease of navigation to enable investors to locate as quickly and easily as possible the information they need.

The Group also seeks to reward investors for the confidence they place in it, and distributes them a significant part of the earnings achieved, in the form of dividends or of treasury share purchases.

ZETES ANNUAL REPORT 2013 | CREATING TOMORROW BY INVESTING TODAY

"THE BEST WAY TO PREDICT THE FUTURE IS TO CREATE IT. THAT IS WHAT WE DO"

Benoît Heins - Investor Relations

Contacts

Financial information

Calendar

ZETES INDUSTRIES SA

The company’s annual report will be sent to registered shareholders, and to others upon request. This report, as well as any other public information, can be obtained from the Company’s headquarters and via the website www.zetes.com.

Annual General Meeting : last Wednesday of May - May 28 at 10:00 am

Individuals who would like to be on our distribution list for press releases may inform us of their interest by sending an email to investor@zetes.com or by registering on our website.

Publication of full year results: third week of March 2015

Da Vinci Science Park Rue de Strasbourg 3 B-1130 Bruxelles RPM : 0425.609.373.

Tel. +32 (0)2 728 37 11 Fax +32 (0)2 728 37 51

Investor relations and communications Investor Relations : Benoît Heins Media Relations : Sandra Franchitti Tel. +32 (0)2 728 37 11 Fax +32 (0)2 728 37 51 E-mail : investor@zetes.com Euronext Brussels : ZTS

50

Financial services are provided in Belgium by KBC Bank.

KBC Bank : Avenue du Port 2 – 1080 Brussels

Publication of half year results: last week of August – August 29, 2014 Dividend payment: June 5 2014

Dividend A dividend of € 0.55 per share (coupon n°10) will be proposed at the AGM of May 28 2014.

The "ex-date" (on which a shareholder is no longer entitled to coupon, which is retained by the vendor) is 2 June 2014. The payment date is 5 June 2014. The dividend is payable at KBC Bank, the company's principal paying agent.

CONSOLIDATED DATA PER SHARE (IN €)

2008

2009

2010

2011

2012

2013

Capital and reserves

12.51

13.17

14.64

14.70

14.77

14.95

Cash flow

2.39

2.03

2.76

2.72

2.01

2.00

Current EBITDA

2.82

2.55

3.59

3.50

2.69

2.62

Current net profit (Group share)

1.20

1.06

1.63

1.31

0.86

0.78

Net profit (Group share)

1.11

0.96

1.57

1.18

0.70

0.66

Net profit (excluding discontinued operations)

1.11

0.96

1.57

1.18

0.70

0.66

Number of shares at December 31

5 389 714

5 389 714

5 389 714

5 389 714

5 389 714

5 389 714

Average number of shares

5 386 299

5 342 394

5 324 566

5 331 111

5 247 116

5 156 750

Average number of shares for calculating diluted earnings

5 386 299

5 342 394

5 324 566

5 331 111

5 247 116

5 156 750

Diluted current net profit (Group share)

1.20

1.06

1.63

1.31

0.86

0.78

Diluted net profit (Group share)

1.11

0.96

1.57

1.18

0.70

0.66

Diluted net profit (excluding discontinued operations)

1.11

0.96

1.57

1.18

0.70

0.66

Gross dividend / Capital repayment

0.36

0.36

1.00

0.55

0.55

0.55

Net dividend / Capital repayment

0.27

0.27

0.75

0.41

0.46

0.41

Highest price

21.6

17.7

17.7

18.8

16.4

18.0

Lowest price

10.9

12.0

14.5

15.3

12.6

14.3

Price at December 31

12.8

16.4

17.4

15.9

15.0

17.5

Price / earnings at December 31

11.5

17.0

11.1

13.4

21.4

26.6

Gross dividend yield

2.8%

2.2%

5.7%

3.5%

3.7%

3.2%

Net dividend yield

2.1%

1.7%

4.3%

2.6%

3.0%

2.4%

954

471

626

1 100

772

736

Annual volume ('000 of EURO)

15 685

7 280

10 292

18 935

11 613

12 014

Market capitalization at December 31 ('000 EUR)

68 988

88 122

93 781

85 481

80 954

94 051

Annual volume ('000 of shares)

ISIN Codes Zetes Industries shares : BE0003827442

Publication Zetes Corporate Marketing & Communication Executive Editor Pierre Lambert, CFO Da Vinci Science Park Rue de Strasbourg 3 B-1130 Brussels Design www.chocoweb.be Layout and production www.visible.be This report was written in French. The Dutch and English versions are provided for the convenience of the reader. Only the French version is legally binding.

www.zetes.com/AR2013