6.1. General
NSI may only make distributions to Shareholders in so far as NSI's shareholder equity exceeds the sum of the paid up and called up part (gestorte en opgevraagde deel) of the issued share capital plus the reserves that must be maintained pursuant to Dutch law or the Articles of Association. NSI's current Articles of Association contain no statutory reserves. Profits are distributed after the adoption by the General Meeting of the annual accounts from which it appears that said distributions are permitted. The profit and the distributable reserves are at the disposal of the General Meeting. The Management Board may, with due observance of the Articles of Association, and with the approval of the Supervisory Board, resolve upon the distribution of interim dividend to the extent the profits so permit.
6.2. Dividend history
The following table sets forth NSI's distribution of dividends relating to the financial years indicated.
2013 2012 2011 2010 2009 Interim dividend Q1 ... 0.10 0.26* 0.30 0.38 0.35 Interim dividend Q2 ... 0.09 0.25* 0.30 0.28 0.33 Interim dividend Q3 ... 0.00 0.24* 0.30 0.30 0.34 Final dividend ... 0.11 0.29* 0.30 0.32 Total ... 0.86 1.19 1.26 1.34
* The final dividend of the financial year ending 2011 and the interim dividends for Q1, Q2 and Q3 2012 were distributed in cash, in stock or as a combination of both, at the discretion of each individual Shareholder. The other dividends listed in this table were distributed in cash only. As of the final dividend of 2012, a new dividend policy applied as set out in Section 6.3 (Dividend Policy), below.
6.3. Dividend policy
NSI is obliged to pay a dividend at least once a year to Shareholders in accordance with the provisions of Dutch law applying to FIIs. Under these provisions, NSI must at least distribute its profits determined in accordance with applicable tax accounting standards within eight months following the end of the relevant accounting period. For more details on the FII regime see also Section 15.2.1 (Regulatory matters and tax status of the Group – Tax Status – FII Regime).
In the annual General Meeting held on 26 April 2013, the General Meeting approved the new dividend policy of NSI. The new dividend policy is focused on the payment of a sustainable dividend with due consideration to the financing and investment requirements of NSI's existing Portfolio. According to the new dividend policy, 85%-100% of the direct result will be distributed as dividend on a quarterly basis. This allows the Group to fund the average capital expenditure requirements in properties, which generally amount to between 0-15% of the direct result per year. Furthermore, to safeguard the necessary funds to invest, the dividend policy has been linked to the LTV (as defined below) performance of the company. In the new dividend policy, the pay-out ratio of dividends will be adjusted based on the Group LTV ratio, until NSI has achieved its Group LTV target of below 55%. If the Group LTV ratio (post-dividend) is above 55% but below 60%, the pay-out ratio will be 50% of the direct investment result in cash. If the Group LTV ratio (post-dividend) is above 60%, the pay-out ratio will be 50% distributed as stock dividend until the Group LTV ratio has been reduced to a level below 60%. The dividend pay-out in relation to the Group LTV ratio will be determined on a quarterly basis. See also Section 9.5.1 (Business
– Recent developments – Financing developments). The Group LTV ratio as per 30 September 2013 was
59.6% before dividend distribution. After a (theoretical) dividend distribution, the LTV post-dividend would have exceeded the 60% treshold. According to the dividend policy, the Company was due to pay dividends in shares over the third quarter. However, in light of the Placement, the stock dividend over the third quarter has been foregone. The Placement is expected to bring the Group LTV ratio to below the 55% threshold.As the Company is, in principle, required to annually distribute its taxable profits to its shareholders, it must obtain a ruling for the Dutch Tax authorities if the dividend policy gives rise to a deviation from this principle. The Group obtained this ruling on 1 November 2012. The ruling allowes NSI to fiscally depreciate certain properties in order to lower the fiscal result and thus the obligation to distribute profits. See also Section 15.2.1 (Regulatory matters and tax status of the Group – Tax Status –
The General Meeting approved that the new dividend policy is effective as of the final dividend over the financial year ended 31 December 2012. Based on this new dividend policy, the final dividend for 2012
was determined at €0.11 per share in cash, which equals 50% of the direct result per share over Q4 2012
on the basis of a loan-to-value ratio (post-dividend) of 58.2% per 31 December 2012. The Management
Board declared an interim distribution for Q1 2013 of €0.10 per share in cash, which equals 50% of the
direct result per share over Q1 2013 on the basis of a LTV (post-dividend) of 58% per 31 March 2013. 6.4. Dividend ranking of the New Ordinary Shares
The New Ordinary Shares will, upon issue, rank equally in all respects with the currently outstanding Ordinary Shares. The New Ordinary Shares will be eligible for any dividend payment which NSI may declare on Ordinary Shares following the issuance of the New Ordinary Shares.
6.5. Manner and time of dividend payments
Payment of any dividend on Ordinary Shares in cash will be made in Euro. Any dividends will be paid to Shareholders through Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V. ("Euroclear Nederland"), the Dutch centralized securities custody and administration system, and credited automatically to the Shareholders' accounts. NSI may give Shareholders the choice to receive their dividend either in cash or in Ordinary Shares. Typically, Shareholders will then need to record their choice by the date announced in the dividend payment advertisement.
Dividends and other distributions (irrespective of their form) on Ordinary Shares will typically be paid to those in whose name the Ordinary Shares are registered on the day on which the decision to pay the dividend or other distribution is taken. Dividends and other payments are payable as from a day determined by the Management Board with the approval of the Supervisory Board.
There are no restrictions under Dutch law in respect of holders of Ordinary Shares who are non-residents of the Netherlands. See also Section 16 (Shareholder taxation).
6.6. Uncollected dividends
A claim for any declared dividend lapses five years after the date on which those dividends were released for payment. Any dividend that is not collected by Shareholders within this period reverts to NSI.
6.7. Taxation of dividends
Dividend payments on the Ordinary Shares are generally subject to withholding tax in the Netherlands, see Section 16 (Shareholder taxation).