- 1 -

CORPORATE INFORMATION FINANCIAL OVERVIEW

- 2 -

CONTENTCORPORATE INFORMATION

LETTER TO ThE shAREhOLdERs P. 3

REPORT OF ThE bOARd OF dIRECTORs P. 5

gROuP sTRuCTuRE P. 9

shARE INFORMATION P. 10

CORPORATE gOVERNANCE P. 12

gENERAL INFORMATION P. 16

FINANCIAL OVERVIEW

COMMENTs ON ThE CONsOLIdATEd FINANCIAL sTATEMENTs P. 20

FINANCIAL sTATEMENTs P. 22

1. CONsOLIdATEd bALANCE shEET P. 22

2. CONsOLIdATEd INCOME sTATEMENT P. 24

3. CAsh FLOW sTATEMENT P. 26

4. EquITy sTATEMENT P. 27

NOTEs TO ThE CONsOLIdATEd FINANCIAL sTATEMENTs P. 28

1. kEy ACCOuNTINg RuLEs P. 28

2. sEgMENT INFORMATION P. 38

3. ExChANgE RATE P. 41

4. dETAILEd INCOME sTATEMENT P. 42

5. dETAILEd bALANCE shEET P. 46

OThER P. 68

sTATuTORy AudITOR’s REPORT P. 72

sTATuTORy ANNuAL ACCOuNTs OF sIOEN INdusTRIEs NV P. 74

PROPOsALs TO ThE ANNuAL MEETINg P. 77

AddREssEs P. 78

dEFINITIONs P. 80

- 3 -

Dear Shareholder,

A yEAR OF ExTREMEs

2008 was a year of extremes, of high peaks and deep

troughs.

The year started with top months, in which we beat all

records. Our spinning mill was never as productive, the

weaving mills were running at full capacity, production

could not keep up with sales of coated technical

textiles, the chemicals department continued to grow,

technical protective clothing sales were climbing …

everything was indicating to another top year.

No one could have predicted that a year that had got

off to such a good start would end in a minor key. From

the second half onwards, sales slackened, margins fell.

stock markets tumbled right across the world. Compa-

nies were revising their growth forecasts daily. slow-

down turned into recession.

sioen Industries has swum through many troubled

waters in the past – the fire that decimated our

company in the early 1990s, the slowing of growth

in 2002, sharp Chinese competition in recent years.

All these situations have left us extra-well armed for

the future.

MEAsuREs

In this poor economic climate we continue to look for

alternatives - new applications, new products and new

LETTER TO THE SHAREHOLDERS

markets - to pump up sales and production. despite this,

from the middle of last year we had to begin restructu-

ring and introducing economic unemployment.

Total group sales in 2008 amounted to EuR 349.4

million, compared with EuR 380.3 million in 2007 (-8%).

EbITdA and cash flow amounted to EuR 37.7 million

(10.8% of sales) and EuR 24.2 million respectively.

After-tax profit was EuR 3.4 million, compared with EuR

19.2 million in 2007.

INNOVATINg ThE FuTuRE

The results and explanations by division can be found in

the Report from the board of directors on page 5 of the

financial part of this annual report.

We cannot emphasize enough the importance of

research and development. Today everybody uses the

word innovation. It has become a fashionable word, at

times a magic word. Not so at sioen. since founding the

company in 1960 we have lived by the motto ‘to stand

still is to go backwards’. This is innovation avant la lettre.

Introducing new ideas, products, services and proces-

ses- approaching things in new ways, thinking out of the

box. This is our daily bread at sioen, at every level of our

company.

In this annual report we give a number of concrete

examples of our recent research and development

results (see p. 16-22). These are always to a greater or

lesser extent the outcome of good teamwork between

sales, R&d, production, marketing, procurement and

senior management.

- 4 -

gREEN

In this annual report we would also like to introduce you

to our ‘green’ side. Ecological projects, products, plans

and developments form a red thread through the

present report.

Not because they are ‘in’, but because the environment

and safety are close to our hearts. Our company slogan

for many years now has been ‘Protection through

Innovation’. We produce products that protect human

beings, their environment and their possessions and do

so in an environmentally friendly way.

In our business statement (see p. 8) we say that “we wish

to develop environmentally friendly coating and

processing technologies and in so doing set the

standard for green safety and protective products, while

creating sustainable, profitable growth.” The green ‘red

thread’ in this annual report testifies that we are

working hard at this.

WITh CONFIdENCE

What will happen with the world economy in the

coming years is largely a matter of conjecture.

Economists are assuming that the slowdown will, in

the most favourable of circumstances, last for 4 to 6

quarters. sioen Industries is taking full account of these

predictions and has already taken the necessary

decisions and measures.

Today we need to have confidence in our own strengths:

We are a flexible company, with state-of-the-art

production equipment, unique cost-efficient vertically

integrated processes, enthusiastic employees and solid

customer relations.

Our business statement is clear, our strategy well

thought-through, our business slogan powerful.

Jean-Jacques Sioen Michele Sioen

Chairman of the Board CEO

of Directors

- 5 -

The past year splits into two distinct parts. during the

first three quarters we were well on the way to beat the

sales of our 2007 record year. Then, in the fourth quarter,

the industrial world was confronted with an economic

slowdown.

p sales: In 2008 the sioen Industries group realized

sales of EuR 349.4 million, compared with EuR 380.3

million in 2007 (-8%). This drop is due entirely to the

economic slowdown in the last quarter of the year.

p gross margin: the total gross margin fell slightly

compared with 2007, reflecting a shift in sales mix

and peak prices of basic raw materials and energy,

despite improved production efficiency and the use

of alternative materials.

p services and other goods: a rigorous effort to

reduce costs produced a decrease in general

expenses of approximately EuR 2.2 million.

p Other operating expenses: these consist

mainly of a number of non profit-related taxes

(property tax, taxe professionnelle, etc.), which

become more and more significant.

p Recurrent EBIT (REBIT): REbIT for 2008 amoun-

ted to EuR 21.4 million compared with EuR 40.3

million in 2007. This EuR 18.9 million drop is almost

entirely due to the reduced sales volume.

p Non-recurrent costs: non-recurrent costs

amounted to EuR 5.3 million in 2008. The majority of

these can be allocated to the start-up of a new foil

production plant (pond foils, industrial foils, etc.),

which was completed in the course of the fourth

quarter.

Added to this are the restructing costs introduced as

an immediate response to the drop in demand in the

fourth quarter.

p EBIT: the above-mentioned facts resulted in an EbIT

of EuR 16.1 million compared with EuR 38.8 million

in 2007.

p Financial result: financial result during 2008

amounted to EuR 9.5 million compared with EuR 8.4

million in 2007. In addition to interest charges of EuR

7.5 million, the group recorded EuR 1.0 million of

realised and EuR 1.0 million of unrealised exchange

rate losses. The sharp fall in the british Pound and

the drop of the Polish Zloty at year end are the main

factors here.

p Profit: group pre-tax profit for 2008 amounted to

EuR 6.5 million compared with EuR 30.4 million in

2007. Net profit for 2008 amounted to EuR 3.4

million compared with EuR 19.2 million in 2007. The

fact that the effective tax rate was higher than the

normal tax rate is due to the reversal of deferred tax

assets, as a result of the economic recession.

p Net cash flow: net cash flow for 2008 amounted

to EuR 24.2 million.

p dividend: the board of directors will be proposing

to the general Meeting that it declares a dividend

equal to 50% of the net profit for the financial year.

The proposed dividend for the 2008 financial year

amounts to EuR 0.08 per share.

REpORT Of THE bOARD Of DiRECTORS

- 6 -

COATINg dIVIsION

The coating division specialises in the integrated

coating of technical textile, of which it masters the

entire production process from the extrusion of the

technical yarns to the weaving of the technical fabric

and its coating with various polymers. The group is the

only player in the world with full proficiency in five

different coating technologies, each with its own

specific products and markets.

spinning and weaving

In the spinning mill we extrude polyester granules into

yarns. In 2008 we began developing and producing

tailor made yarns for external customers. The weaving

mills (producing largely for internal use) followed the

trend of the direct coating products. here too we’ve

developed alternatives ready to be marketed in 2009.

direct coating

From the second half onwards, and in particular in the

last quarter, the transportation market experienced a

sudden and general downturn. This immediately

affected sioen’s sales in this market. Our market share,

however, remained unchanged.

Online coating

Last year we doubled production capacity to meet the

strongly rising demand for open structure textiles

(reinforcement nets, windbreak nets, geotextiles).

We also grew strongly in reinforcement netting for

PVC roofing.

Transfer coating

With a number of new developments enabling us to win

several large contracts, we looked well on the way to

posting attractive growth figures. The slowing in the

automobile sector in the fourth quarter meant that we

recorded a slight decline on annual basis.

Extrusion coating

Oil booms, technical ventilation piping, soil remediation

fabric and swimming pool covers form a relatively stable

market.

Calandering

by the end of the year the start-up phase was behind us

and we are now deciding on the final product range.

The focus is primarily on industrial foils for various

markets (pool foils, dashboard films etc.).

We maintained our market shares in our existing

segments and are rapidly developing new products

with which we want to tap new markets (e.g. biogas

containers). On top of this, thanks to the efforts of our

commercial-technical people and the R&d team, we

were able to extrude new yarn types in our spinning

mills.

This and the knowledge that our production apparatus

is up-to-date and functioning perfectly make us

optimistic for the future. For the coming years we will be

focusing on R&d, continuous product and process

improvements, production efficiency and market

penetration.

- 7 -

APPAREL dIVIsION

This division stands for ‘technical protective clothing’.

Points of particular attention and certainly also the keys

to our success in 2008 included our focus on technical

design, attention to specific customer needs, rapid

development of new products and additional attention

to quality.

The Apparel division continued to concentrate on the

technical design and quality of all its products. These

efforts were rewarded with growth of more than 10%.

p We won tenders with recently developed product

lines (technical protective clothing for firefighters,

foresters, police forces, etc.).

ChEMICALs dIVIsION

sioen Chemicals processes basic raw materials (PVC

powders, pigments, etc.) into high quality technical

semi-finished products (pigment pastes, uV inks,

varnishes, dispersions, flame retardant products, etc.) for

a whole range of applications. An activity that was

formerly limited to the production of raw materials for

internal use evolved to a separate division within the

sioen Industries group with fast-growing external sales.

Through a number of targeted takeovers (in 2007), the

Chemicals division has succeeded in diversifying in

various geographical and technical product markets.

Our results were impacted in 2008 by shrinking demand

from the textiles sector, offset, only in part, by strong

performance in our other markets.

In addition, the margins of the Chemicals division came

under pressure during the first 9 months of the year

from high and constantly rising raw materials prices (oil

derivatives and energy).

In this division too, R&d is a decisive factor for future

growth. Rapid development of special to-measure

products and product optimization are among our

priorities.

In the past year we laid the foundations for the future.

We are convinced that we have the right long-term

strategy, which will result in added value for our

shareholders.

p All across Europe companies expressed their

appreciation of sioen’s innovative protective

clothing, resulting in a number of new contracts.

p Well-known sports clothing brands also recognized

sioen’s know-how with new contracts.

All this left its mark on the earnings figures, with a

divisional operational cash flow of EuR 8.6 million and

an EbIT of EuR 7.9 million.

- 8 -

The industrial applications division processes coated

fabrics and PVC film for heavy-duty applications. The

decline in the car and transportation industry had an

immediate and heavy impact on this division’s results.

The majority of the sales of the industrial applications

division consists of laser cutting of airbags and interior

trim for the car industry, and the production of trailer

tarpaulins, trailer rooftops and curtains.

Transportation

This sector produces trailer, container and railway

curtains and tarpaulins. under pressure from the

OuTLOOk

The current macro-economic situation makes it difficult

to look ahead. We are working hard to defend our

market positions and maintain rigorous cost control.

We are closely following all new developments in our

markets and are confident that, with our flexibility and

our financial and shareholder structure, we will emerge

stronger from this period.

IFRs

All figures and tables given in the annual report have

been prepared in accordance with the recognition and

valuation principles of the International Financial

Reporting standards as accepted by the European

union.

sudden, sharp downturn in the transportation sector,

the group decided to undertake a radical restructuring

in every subsidiary of the division in order to secure the

future.

Manufacturing

Attractive results were recorded in both the non-wovens

department and in the other industrial activities. We

invested in a new cutting machine and built a new hall

to permit the even more efficient cutting and welding

of pool foil.

INdusTRIAL APPLICATIONs dIVIsION

- 9 -

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- 10 -

02 03 04 05 06 07 08

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LIsTINg

In order to be able to continue following and ensuring

the company’s fast growth, and in the conviction that a

transparent policy would further strengthen the group’s

growth possibilities, the sioen Industries share was

introduced on the cash market, double fixing, of the

brussels stock Exchange, on 18 October 1996.

A year later the share was listed on the semi-continuous

segment of the forward market and then, as of 11 March

1998, has been quoted on the continuous segment of

the brussels forward market, which has since become

Euronext brussels.

The total number of shares amounts to 21 391 070. At

the moment 7 758 538 shares or 36.30% of the total

number of shares are spread among the public. 60.34%

are controlled via the holding company sihold n.v. or

controlled by the sioen family, and 3.40% are held by

shell Pension Fund.

EVOLuTION OF ThE shARE IN 2008

The share was quoted at its highest price on 6 May

2008, at EuR 9.97. since its lowest price on 29 december

2008 (namely EuR 3.22), the share was quoted at EuR

3.52 on 31 december 2008.

Market capitalization amounted to EuR 75.29 million on

31 december 2008.

shAREhOLdERs sTRuCTuRE

SHARE iNfORmATiON

Institutional Investor: 3.40%

Public: 36.30%

sihold: 60.34%

sioen

Volume

- 11 -

2008: FINANCIAL COMMuNICATION POLICy

The sioen Industries share was included on Euronext

brussels in Compartment C (small-Caps).

dIVIdENd POLICy

The board of directors wishes to continue striving for a

pay-out ratio of more than 15% and to have the

dividend increase year after year, in order thereby to

have the dividend closely linked to the cash flow

expectations on the one hand, and on the other hand to

reward the shareholders’ confidence in the company.

The pay out ratio for 2008 amounts to 50.3%, as

compared to 50.2% last year. The dividend amounts to

EuR 0.08 gross (EuR 0.06 net) and is made payable at

the counters of dexia bank, INg bank, Fortis bank, bank

degroof and kbC bank from 11 May 2009.

shARE COdEs ANd CLAssIFICATION

ISIN bE0003743573

Euronext code bE0003743573

Mnemo sIOE

Type Stock - Ordinary stock - Continuous

Market Euronext Brussels - Euronext - Local securities

Compartment C (small-Caps)

ICB Sector classification:

3000, Consumer goods

3700, Personal & household goods

3760, Personal goods

3763, Clothing & Accessories

Reuters: sIOE.bR

Bloomberg: sIO.bb

Datastream: b:sIO

OBLIgATIONs WITh REgARd TO PERIOdICAL INFORMATION FOLLOWINg ThE

TRANsPARENCy dIRECTIVE EFFECTIVE As OF 1 JANuARy 2008

Declaration regarding the information given in this annual report 2008

The undersigned declare that:

p The annual accounts, which are in line with the standards applicable for annual accounts, give a true

and fair view of the capital, the financial situation and the results of the issuer and the consolidated

companies;

p The annual report gives a true and fair view of the development and the results of the company and

of the position of the issuer and the consolidated companies, as well as a description of the main

risks and uncertainties they are faced with.

Michele sioen, CEO

geert Asselman, CFO

- 12 -

ThE BOARd OF dIRECTORs

Composition (situation as at 31 december 2008)

The directors’ mandates expire at the 2011 general meeting.

CHAIRMAN Mr J.J. Sioen (1), chairman/director in various other companies

MANAGING M.J.S. Consulting b.v.b.a., represented by Ms M. sioen (1) DIRECTOR director in various other companies

DIRECTORS Ms J.N. Sioen-Zoete (1), director in various other companies

D-Lance b.v.b.a., represented by Ms d. Parein-sioen (2) director in various other companies

P. Company b.v.b.a., represented by Ms P. sioen (1) director in various other companies

Pol Bamelis n.v., represented by Mr P. bamelis (3) director in various other companies

Revam b.v.b.a., represented by Mr W. Vandepoel (3) Managing director Lessius Corporate Finance n.v.; director in various other companies

Louis Verbeke e.b.v.b.a., represented by Mr L.-h. Verbeke (3) chairman of Mitiska n.v.; director in various other companies

Mr L. Vandewalle (3) (5), director in various other companies

Vean n.v., represented by Mr L. Vansteenkiste (3) managing director of Recticel n.v.; director in various other companies

SECRETARY Mr G. Asselman CFO sioen Industries group

STATUTORY Deloitte Bedrijfsrevisoren c.v.b.a. AUDITOR (4) Represented by Mr d. Van Vlaenderen and Mr k. dehoorne

CORpORATE gOvERNANCEThe sioen family has been supported by external,

independent directors since 1986. Their expertise and

experience contribute to the proper and effective

management of the company. On 22 March 2005 the

board of directors adopted a Corporate governance

Charter, in accordance with the belgian Corporate

governance Code. The Corporate governance Charter

has been in force since the 2005 general Meeting, and

can be consulted on the sioen Industries website

(www.sioen.com).

since the Corporate governance Charter came into

effect, a number of minor amendments have been made

to it, reflecting changes to the environment, such as the

dematerialization of shares, or a small change in the

shareholder structure.

(1) Executive director

(2) Non-executive director

(3) Independent director. In defining independent directors, the Board of Directors has opted for the transition criterion, foreseen by the law of

17 December 2008 that is applicable until Juli 1 2011. This in order to ensure the continuity of the Company and its management.

(4) The Statutory Auditor’s mandate expires at the general meeting of 2011.

(5) In replacement of Mr Sterckx.

- 13 -

ThE BOARd OF dIRECTORs ANd hOW IT WORks

In accordance with the Articles of Association, the board

of directors meets regularly as a function of the com-

pany’s needs and interests. The board of directors met

five times in 2008. The number of meetings attended by

the individual directors in 2008 was as follows:

Mr Jean-Jacques sioen 5

Ms Michèle sioen 4

Ms Jacqueline sioen-Zoete 5

Ms danielle sioen 5

Ms Pascale sioen 4

Mr Pol bamelis 5

Mr Wilfried Vandepoel 5

Mr Louis-henri Verbeke 5

Mr Luc sterckx 1

Mr Luc Vansteenkiste 5

Mr Luc Vandewalle 4

In conformity with article 526 bis of Companies Code,

the Company declares that at least one member of the

Audit Committee complies to the independent require-

ments and competence needs related to accounting and

audit.

The permanent agenda of every board of directors

meeting includes the discussion of and taking of

decisions with respect to the individual results of

companies in the group, division results, consolidated

results, current investments and projects, new projects

and proposals for investment opportunities. The board

also deals with specific points on the agenda as a

function of concrete matters in hand.

WORkINg COMMITTEEs

The sioen Industries group has three working committees:

a) Audit Committee:

In 2007 the Audit Committee consisted of three inde-

pendent directors, namely Messrs Vandepoel (Chairman),

Verbeke and Vandewalle (in replacement of Mr sterckx).

The board of directors chooses to make use of the

transition period as foreseen in the law of 17/12/2008

and valid until 1/07/2011, for the definition of indepen-

dence of the members of the Audit Committee.

The Audit Committee met four times in 2008. The

number of meetings individually attended by the

members of the Audit Committee in 2008 was as follows:

Mr Wilfried Vandepoel 4

Mr Louis-henri Verbeke 4

Mr Luc sterckx 1

Mr Luc Vandewalle 1

In conformity with article 526 bis of Companies Code, the

Company declares that at least one member of the Audit

Committee complies to the independent requirements

and competence needs related to accounting and audit.

b) Remuneration Committee

In 2008 the Remuneration Committee was made up of

two independent directors, namely Messrs bamelis

(chairman) and Vansteenkiste. The Remuneration

Committee advises the board of directors on pay policy

in general and on the compensation paid to the

members of the board of directors and the Management

Committee in particular. The share option plans also fall

under its remit. In 2008 the Remuneration Committee

met twice. All members of the committee were present

at each meeting.

c) Nomination Committee

The Nomination Committee did not meet in 2008.

MANAgEMENT COMMITTEE

The members of the Management Committee (as of 31

december 2008) are:

- MJs Consulting b.v.b.a., represented by Ms M. sioen

- P. Company b.v.b.a., represented by Ms P. sioen

- Mr geert Asselman

- Mr Erwin Van uytvanck

- Mr Michel devos

secretary: Mr Loebrecht Lievens

- 14 -

REMuNERATION OF dIRECTORs ANd ThE

ExECuTIVE MANAgEMENT

In 2008 the following fees were paid to the members of

the board of directors and the executive management:

Non-executive and independent directors, as well as the

members of the executive management in their capacity

as director:

Mr Jean-Jacques sioen EuR 20 000

M.J.s. Consulting b.v.b.a EuR 20 000

Ms. Jacqueline sioen-Zoete EuR 20 000

d-Lance b.v.b.a EuR 20 000

P. Company b.v.b.a EuR 20 000

Pol bamelis n.v EuR 22 250

Revam b.v.b.a. EuR 29 000

Louis Verbeke e.b.v.b.a. EuR 26 000

k.E.M.P. n.v. EuR 8 667

Vean n.v. EuR 21 500

dhr. L. Vandewalle EuR 26 000

Mrs. Michèle sioen received in 2008, as CEO, besides her

remuneration as a member of the board of directors, a

fixed remuneration of EuR 432 500. she received a

variable remuneration (base calculation 2007) for an

amount of EuR 124 260. For 2008, the CEO abandons the

variable part of her remuneration.

The fixed remunerations paid to the executive manage-

ment*, including directors in their capacity as members of

the executive management, amounted to EuR 2 188 775

(excluding CEO). Variable remuneration received (base

calculation 2007) amounted to EuR 186 357.

For 2008, the executive management abandons the

variable part of their remuneration.

In 2008 no shares in sioen Industries, share options

or other rights for the acquisition of shares in sioen

Industries were granted to the CEO and the other

members of the executive management. There are no

specific recruitment or golden handshake agreements

with the members of the executive management.

* The executive management consists of executive directors and

members of the management committee.

ExTRACT FROM ThE MINuTEs OF ThE BOARd

OF dIRECTORs’ MEETINg OF 17 MARCh 2009

Exposition

both the company and its subsidiaries have, during the

past year, as part of various building projects, awarded

various contracts to sVb PROJECT N.V. having its

registered office at 8850 Ardooie, Fabriekstraat 23

(hereafter “sVb”).

both the company and its subsidiaries may in the future

wish to award contracts to sVb in the context of building

contracts.

Mr Jean-Jacques sioen declared that he has an indirect

conflict of interests as regards the intended transactions,

seeing that he is a shareholder in sVb.

It is in the company’s interest to negotiate as low a price

as possible, while it is in sVb’s to arrive at as high a price

as possible.

deliberation and decision

In this context Mr Jean-Jacques sioen abstained from the

deliberation and decision-making with regard to the

above-mentioned agenda item.

After deliberation the board of directors decided

unanimously to confirm the transactions done with sVb

and to approve any future transactions with sVb.

Justification of asset-related consequences

The total price for the contacts in the framework of the

various building projects amounted to EuR 220 000 in

2008 and is estimated between EuR 45 and EuR 100 per

hour in 2009, depending on the nature of the contract.

This corresponds to the market price for comparable

assignments in the context of building projects.

- 15 -

ExTERNAL AudIT

Within the sioen Industries group, external audit is

chiefly carried out by deloitte bedrijfsrevisoren. This

involves the auditing of both the statutory financial

statements and the consolidated annual financial

statements of sioen Industries n.v. and its subsidiaries.

To the extent that the audits of a number of subsidiaries

are carried out by other auditing companies, deloitte

makes use of their work, as stated in the statutory

Auditor’s report. during the past financial year the

statutory Auditor received EuR 282 000 from sioen

Industries in respect of its statutory auditor mandate.

Additionally the statutory Auditor and its network

received EuR 59 065 for other auditing work, and EuR

10 000 for other assignments outside its audit mandate.

The mandate of deloitte bedrijfsrevisoren as statutory

Auditor of sioen Industries n.v. expires at the annual

meeting of 2011. deloitte bedrijfsrevisoren is represen-

ted by Mr d. Van Vlaenderen and Mr k. dehoorne.

PROTOCOL TO PREVENT ABusE OF INsIdER

INFORMATION

To prevent privileged information being used illegally by

directors, shareholders, and members of the manage-

ment and staff (i.e. “insiders”), or even to prevent such an

impression possibly being created, the board of direc-

tors of sioen Industries n.v. has produced a protocol for

the prevention of abuse of insider information (“1997

Protocol”).

Further to directive 2003/6/Eu a new protocol was

approved by the board of directors on 1 May 2005.

The protocol is initially aimed at protecting the market as

such, ensuring observance of the statutory provisions

and maintaining the group’s reputation. In addition to a

number of prohibitions concerning the trading of sioen

Industries n.v. financial instruments when insiders have

privileged information that is not (yet) available to the

public, it also contains a number of preventive measures

and directives designed to maintain the confidential

nature of privileged information. All insiders eligible for

this have signed this protocol. A Compliance Officer has

been appointed to monitor observance of the protocol.

- 16 -

REgIsTEREd OFFICE ANd NAME

The registered office of sioen Industries, a public limited

liability company under belgian law, is established at

Fabriekstraat 23, b-8850 Ardooie. The company is listed in

the bruges register of legal persons under enterprise

number 0441.642.780.

INCORPORATION ANd PuBLICATION

sioen Industries was incorporated under the name

“sihold” by deed executed before notary-public Ludovic

du Faux in Moeskroen on 3 september 1990, published in

the appendix to the belgian Official Journal of 28

september 1990, under no. 900928-197.

FINANCIAL yEAR

The financial year begins on 1 January and ends on 31

december of each year.

TERM

The company is established for an indefinite period.

OBJECT OF ThE COMPANy

The company’s object, in belgium and abroad, on its own

behalf and on behalf of third parties, is:

• The weaving of fibres of all kinds, the coating of fabrics

and all other material, the printing thereof, the manufac-

ture of plastic and plasticized material, the manufacture,

purchasing and sale, both in belgium and abroad, of

material useful for or relating to aforesaid products and

raw materials, as well as the manufacture of chemical

products and pigments,

• The manufacture of pre-finished outer clothing in

woven fabric, the manufacture of all kinds of tailormade

clothing and embroidery, the manufacture of outer

clothing in knitted fabrics, and of household linen and

interior decoration items, the manufacture of wall

gENERAL iNfORmATiON

cladding, the printing and finishing of all fabrics, the

manufacture of ready-to-wear items of clothing and

outfits for men and women, knitwear, embroidery,

household and table linen, children’s clothing. The

manufacture of safety and high visibility articles. Who-

lesale and retail trading in all the abovementioned items,

• The investment in, subscription to, permanent takeover,

placing, purchase, selling, and trading of shares, dividend

certificates, bonds, certificates, claims, currencies and

other transferable securities, issued by belgian or foreign

companies, whether or not in the form of trading

companies, administrative offices, institutions and

associations either with or without (semi-) public status,

• The management of investments and shareholdings in

subsidiaries, the holding of directorships, the giving of

advice, management and other services to or in accor-

dance with the activities carried out by the company

itself. These services may be provided by virtue of

contractual or statutory appointment and in the capacity

of external consultant or representative body of the

customer.

All this insofar as the company complies with the

statutory requirements. The company may, in belgium

and abroad, effect all industrial, trading, financial,

moveable property and real estate transactions that may

develop or promote its business either directly or

indirectly. It may, by any means, acquire all movable or

immovable goods even if these are not related directly or

indirectly to the company’s object.

It may, in any way, acquire participating interests in all

associations, businesses, enterprises or companies that

are striving for the same or a similar or related object or

that can promote its business or facilitate the sale of its

products or services, and it may collaborate or merge

therewith.

- 17 -

CONsuLTATION OF dOCuMENTs

The statutory and consolidated annual accounts of the

company and the accompanying reports are filed with

the National bank of belgium. The articles of association

and the special reports required by the Companies Code

can be obtained from the Clerk’s Office of the Commercial

Court of bruges.

These documents, as well as the annual and half-yearly

reports and all information published for the benefit of

the shareholders, can also be requested by shareholders

at the registered office of the company. The articles of

association, the annual and half-yearly reports can also be

downloaded from the website www.sioen.com.

AuThORIzEd CAPITAL

The board of directors is authorized, during a period of

five years counting from the date of publication in the

Annexes to the belgian Official Journal of the deed

concerning the amendment of the articles of association

of 25 April 2008 (bOJ of 28 May 2008), to increase the

subscribed capital on one or more occasions, by a

maximum amount of forty-six million euros. This renewa-

ble authority is valid for capital increases in cash, in kind

or by conversion of reserves. At the moment this amount

is still wholly available.

In the framework of the authorized capital, the board of

directors is authorized, in the interest of the company and

subject to observance of the conditions laid down in

Articles 535 and 592 to 599 of the Companies Code, to

cancel or restrict the preferential subscription right that is

granted to the shareholders by law. The board of directors

is authorized to restrict or cancel the preferential subscrip-

tion right in favour of one or more particular persons,

even if these are not members of staff of the company or

its subsidiaries.

In the event of an increase of the subscribed capital,

carried out within the limits of the authorized capital, the

board of directors is authorized to ask for an issue

premium. If the board of directors decides to do so, this

issue premium should be allocated to an unavailable

reserve account that can only be reduced or written off

by resolution of the general meeting passed in the

manner required for the amendment of the articles of

association.

In the absence of express authorization given by the

general meeting to the board of directors, the board of

directors’ authority to increase the subscribed capital

through a contribution in cash with cancellation or

restriction of the existing shareholders’ preferential

subscription rights, or through contribution in kind, is

suspended from the date of notification to the company

by the banking, Finance and Insurance Commission of a

public takeover bid for the company’s shares. This

authority will be reinstated immediately after the closing

of such a takeover bid. The general meeting of 25 May

2007 expressly authorized the board of directors to

increase the subscribed capital on one or more occasi-

ons, from the date of notification by the banking,

Finance and Insurance Commission to the company of a

public takeover bid for the company’s shares, through

contributions in cash with cancellation or restriction of

the existing shareholders’ preferential subscription right,

or by contributions in kind, in accordance with Articles

557 and 607 of the Companies Code. This authority is

granted for a period of three years from 25 May 2007 and

is renewable.

ACquIsITION By ThE COMPANy OF shAREs

IN ITs OWN CAPITAL

The general meeting of 25 May 2007 expressly authori-

zed the board of directors, in accordance with the

provisions of the Companies Code, to acquire or have

disposal of its own shares or profit-sharing certificates, if

the acquisition thereof is necessary to avoid the threat of

serious detriment to the company. This authorization is

- 18 -

valid for a period of three years from date of publication

of the above-mentioned resolution in the Annexes to the

belgian Official Journal (bOJ of 15 June 2007).

The general meeting of 25 April 2008 authorized the

board of directors, in accordance with Articles 620 to 623

and 625 of the Companies Code, to obtain its own shares

through purchase or exchange in the maximum number

permitted by law, and at a price equal to the market

value of the shares. This authorization also extends to

the acquisition of shares of the company by one or more

of its direct subsidiaries within the meaning of the law,

and is valid for a period of eighteen months counting

from 25 April 2008 and is renewable.

shARE BAsEd PAyMENT PLANs

stock option plan I

under a share option scheme originally introduced in

1996, a total of 6 500 options were issued in 2000 of

which 3 250 remain outstanding and exercisable at the

price of EuR 20.3355 per share until January 2008.

The board of directors remains authorized to grant up to

158 000 options. No options have been granted to

directors under this scheme.

Overview of the 2000 share option plan

stock option plan II

In order to make remuneration dependent on the

company’s performance, it was decided to introduce a

option plan. This new option plan meets all the require-

ments of the law of 26 March 1999. The company has

opted for an option plan based on a basket of shares of

European companies. The options granted by sioen

Industries have as their underlying asset the bEVEk INg

(L) Invest EMu Equity Fund (cap) with IsIN code

Lu0095527585 and are granted in the form of a call

option. These call options are offered free of charge to

those concerned. The exercise price will correspond, at

the offeror’s choice, to either the closing price of the

bEVEk’s shares on the day before the offering date, or the

average of the closing prices of the bEVEk’s shares for

the 30 calendar days preceding the offering date. This

amount will be mentioned in the offer letter which will

be sent to every beneficiary. The company covers itself

by buying, at the same time, an identical number of

options having the same features, of the same fund and

with the same exercise price. The option premium that

sioen Industries paid for this amounted to 52% of the

closing price of the bEVEk on the day before the offering.

Date of Board decision 10/10/2000 Option price as % of market price 7.5% Option price 1.5375 Option exercise price 20.3550 Allocation 6.500 Unused 3.250 Balance to be exercised January 2005-2008 (3.250)

- 19 -

The total number of outstanding options

is as follows

On January 14 2009, we engaged in a new stock option

plan, which was provided for in 2008 for the same

amount and under the same regime as last year. We refer

to section III.5.8 Investments. The options have a total

term of 10 years from the date of offering. After a

blocking period, beneficiaries have the possibility of

either selling or exercising the options granted to them

until the end of the exercise period.

2008 2007 Options outstanding at 1 January 3 957 0 Options granted during the reporting period 0 3 957 Options exercised during the reporting period -3 957 0 Options outstanding at 31 December 0 3 957 Options exercise price 0 140.11 EUR Option premium paid 0 72.86 EUR

- 20 -

I. Comments on the consolidated financial statements

sIOEN INdusTRIEs gROuPSioen Industries is the leading world producer of coated technical textiles, European market leader in industrial protective clothing, a niche specialist in fine chemicals and a major world player in processing technical textiles into semi-finished products and technical end products.

sales In 2008 Sioen achieved net group sales of EUR 349.4 million, which results in a decrease by 8.1% compared to EUR 380.3 million the year before. The decrease is fully related to the sales drop during the last quarter of 2008. In the apparel division external sales growth of EUR 7.1 million was achieved related to ‘new’ businesses and the direct customer business. On the other hand the downswing in the trailer building business in the last quarter of 2008 reduced sales in both the coating and industrial applications divisions by 11.3% and 16.7% respectively. Next to the regression in the truck market external sales in the chemicals division decre-ased by 13.6% due to the sale of the granules business activity in September 2007.

gross margin-EBITdA-EBIT p Historical high raw materials prices and a significant

drop in the trailer business in the last quarter of 2008 resulted in a decrease in gross margin and EBITDA at group consolidated level by 2.0% and 38.4% respectively. In the coating division, the strategy of price increases for finished products could no longer compensate the constantly rising raw material prices, resulting in a gross margin decrease of 2.9% compared to 2007. Additionally, the start up costs related to a new production line and restructuring costs resulted in a decrease of the operating cash flow by 41.6% in this division. In the apparel division the gross margin decreases by 1.3% explained by the pound sterling evolution. This had a negative impact on operating cash flow, which decreased from EUR 10.6 million in 2007 to EUR 8.8 million in 2008. In this division technical excellence is crucial, in particular with professional users that set very high standards. The chemicals division continued the integration process of companies

after implementation of a new ERP system. A significant increase of raw material prices, maintenance costs and user license fees related to the new ERP system, together with costs related to the closing of the Lyon production entity, negatively affected the gross margin and operating cash flow in 2008, which decreased from EUR 7.3 million in 2007 to EUR 1.9 million in 2008. Despite the major volume downswing, the gross margin remained at level within the industrial applications division. Next to the volume decrease, EBITDA decreased from EUR 4.6 million in 2007 to EUR 1.8 million in 2008 due to a drop of the Polish Zloty and British Pound against the euro.

p Services and other goods decreased by EUR 2.2 million, moving to 16.7% of net sales compared with 15.9% in 2007. The biggest decreases under this heading are transportation costs, interim costs and sales commissions. The decrease is partly offset by increased energy costs and IT-related fees (imple-mentation of new ERP software in the chemicals division and the heavy confection subdivision) compared to 2007.

p Personnel costs decreased with EUR 1.6 million compared to 2007, related to increased production efficiency in 2008.

p Other operating costs cover a number of generally non profit-related taxes as property tax, ‘taxe professionelle’ in France and the like, which become more and more significant.

p This gives the group an operating profit of EUR 16.1 million in 2008 compared to EUR 38.8 million in 2007.

p Operating cash flow (EBITDA) decreased by 38.4% to EUR 37.7 million.

p Financial result: at EUR - 9.5 million, net financial costs were EUR 1.2 million higher than in 2007. This is explained by the unfavorable realized and unrealized financial result resulting from the continuous weakening of the pound sterling and the drop of the Polish Zloty at year end. Net financial debt amounts to EUR 151.6 million compared to EUR 146 million at the end of 2007.

p The effective tax rate was 47.8%, compared with 36.9% in 2007, due entirely to the non-recognized/

- 21 -

de-recognized deferred tax assets on tax losses incurred in certain subsidiaries.

p The final net profit for 2008 amounts to EUR 3.4 million, compared with EUR 19.2 million in 2007.

p Net operating cash flow decreased by EUR 19.3 million from EUR 43.5 to 24.1 million.

Investments p Total investments in tangible and intangible fixed

assets amounted to EUR 25.8 million. Main investments of 2008 are:• EUR 6.8 million: investment in new buildings and

infrastructure at Veranneman and Sioen Coating NV • EUR 2.9 million: investment in infrastructure,

building and machinery at Fabrics Calandering• EUR 2.6 million: investment in a new ERP package

and hardware• EUR 2.2 million: machinery and infrastructure at

Veranneman• EUR 1.3 million: weaving looms at TIS• EUR 0.8 million: machinery at Saint Freres Enduction • EUR 0.4 million: machinery at Sioen Coating NV

Balance sheet In nominal net amounts working capital rose from EUR 126.2 million at 31/12/2007 to EUR 126.3 million at 31/12/2008. Taking into account that sales have decreased by EUR 30.9 million, working capital need as a percentage of sales increased from 33.2% to 36.1% at the end of 2008. Net financial debt increased from EUR 145.9 million at 31/12/2007 to EUR 151.6 million at 31/12/2008.

RisksSioen Industries NV is a company, listed on Euronext, that does not itself exercise any industrial activity. Sioen Industries holds participations in companies operating in the following sectors:

p production and application of coatings on technical textiles

p design, development and production of protective clothing

p processing heavy technical textiles into finished products

p producing pigment pastes, varnishes and inks for industrial applications.

Sioen Industries is influenced, in particular in terms of its income stream, by the economic performance of these divisions. These divisions are in turn dependent on general economic trends and more specifically:

p the volatility of crude oil prices and the more or less related volatility of prices of its principle raw materials (PVC, polyester, plasticizer, etc.);

p with regard to the processing of heavy technical textiles, the group’s evolution closely tracks the economic cycles of the truck sector;

p the protective clothing division follows the current trend in industrial activity in Western Europe. The emphasis is here less on volume and more on the technical specifications of the clothing.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

- 22 -

II.1. ConsolidatEd balanCE shEEt IN THOUSANDS OF EUROS

II. Consolidated financial statements

ASSETS Note 2008 2007

non-Current assets

Intangible assets III.5.1 17 908 18 834 Goodwill III.5.2 17 603 17 585 Property, plant and equipment III.5.4 151 160 151 404 Interests in associates 2 0 Long term trade receivables III.5.5 17 14 Other long term assets III.5.5 1 345 636 Deferred tax assets III.5.15 3 846 5 445 TOTAL NON-CURRENT ASSETS 191 881 193 918

Current assets

Inventories III.5.6 99 183 90 450 Trade receivables III.5.7 56 107 73 208 Other receivables III.5.8 8 445 11 515 Other investments and deposits III.5.8 288 288 Cash and cash equivalents III.5.8 14 545 7 479 Deferred charges and accrued income III.5.8 1 292 1 254 TOTAL CURRENT ASSETS 179 860 184 194

TOTAL ASSETS 371 741 378 112

The consolidated financial statements for 2008 were approved by the Board of Directors for publication on 17 March 2009.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

- 23 -

EQUITY & LIABILITIES Note 2008 2007

equIty

Share capital 46 000 46 000 Retained earnings 95 541 101 761 Hedging and translation reserves 820 824

TOTAL EQUITY 142 361 148 585

non-Current lIabIlItIes

Interest bearing loans III.5.11 102 140 107 074 Provisions III.5.10 1 493 2 602 Pension obligations III.5.9 1 103 1 366 Deferred tax liabilities III.5.15 16 410 18 863 Finance leasing III.5.11 18 645 10 039 Other amounts payable 3 3

TOTAL NON-CURRENT LIABILITIES 139 794 139 947

Current lIabIlItIes

Trade and other payables III.5.13 24 381 34 191 Interest bearing loans III.5.11 43 361 35 400 Provisions III.5.10 3 796 2 029 Pension obligations III.5.9 39 91 Current income tax liabilities III.5.13 954 440 Social debts III.5.13 9 573 10 523 Finance leasing III.5.11 2 250 1 199 Other amounts payable III.5.13 3 861 4 548 Accrued charges and deferred income III.5.13 1 371 1 159

TOTAL CURRENT LIABILITIES 89 586 89 580

TOTAL EQUITY AND LIABILITIES 371 741 378 112

- 24 -

II.2. ConsolidatEd inComE statEmEnt

2008 % of 2007 % of Sales Sales

Net sales 349 366 100.0% 380 350 100.0%

Cost of sales -280 120 -80.2% -289 191 -76.0%

Manufacturing contribution 69 246 19.8% 91 159 24.0% Sales and marketing expenses -19 023 -5.4% -20 460 -5.4% R&D expenses -6 101 -1.7% -7 352 -1.9% Administrative expenses -25 416 -7.3% -25 737 -6.8%

Other operating result 2 646 0.7% 2 682 0.7% Non recurring result (1) -5 292 -1.5% -1 500 -0.4%

Operating result 16 060 4.6% 38 792 10.2%

Financial result -9 541 -2.7% -8 373 -2.2% Financial income 8 514 2.4% 3 340 0.9% Financial charges -18 055 -5.2% -11 713 -3.1%

Profit or loss before Taxes 6 519 1.9% 30 419 8.0%

Taxes -3 114 -0.9% -11 233 -3.0%

Profit or loss after Taxes 3 406 1.0% 19 186 5.0% EBIT 16 060 4.6% 38 792 10.2% EBITDA 37 669 10.8% 61 171 16.1% Cash flow 24 163 6.9% 43 510 11.4%

(1) Non-recurring items relate to impairment losses, restructuring expenses and start-up costs of new, significant investment projects

until the product is ready to be sold at normal market conditions. We refer to III.4. ‘Detailed income statement’ for more detail.

II.2.1. by funCtIon IN THOUSANDS OF EUROS

- 25 -

II.2. ConsolidatEd inComE statEmEnt bY naturE IN THOUSANDS EURO

2008 % of 2007 % of Sales Sales Net sales 349 366 100.0% 380 350 100.0% Changes in stocks and wip 6 361 1.8% 5 345 1.4% Other operating income (2) 3 918 1.1% 5 599 1.5%

Raw materials and consumables used 182 016 52.1% 188 798 49.6%

Gross margin 49.72% 51.77% Services and other goods -58 188 -16.7% -60 355 -15.9% Remuneration, social security and pensions -71 005 -20.3% -72 586 -19.1% Depreciations -20 601 -5.9% -20 330 -5.3% Write off inventories and receivables -101 0.0% -2 265 -0.6% Other operating charges (3) -6 380 -1.8% -6 669 -1.8% Non recurring result (1) -5 292 -1.5% -1 500 -0.4%

Operating result 16 060 4.6% 38 792 10.2%

Financial result -9 541 -2.7% -8 373 -2.2% Financial income 8 514 2.4% 3 340 0.9% Financal charges -18 055 -5.2% -11 713 -3.1%

Profit or loss before taxes 6 519 1.9% 30 419 8.0%

Taxes -3 114 -0.9% -11 233 -3.0%

Profit or loss after taxes 3 406 1.0% 19 186 5.0%

EBIT 16 060 4.6% 38 792 10.2%

EBITDA 37 669 10.8% 61 171 16.1%

Cash flow 24 163 6.9% 43 510 11.4%

(1) Non-recurring items relate to impairment losses, restructuring expenses and start-up costs of new, significant investment projects

until the product is ready to be sold at normal market conditions. We refer to III.4. ‘Detailed income statement’ for more detail.

(2) Other operating income mainly consists of received rent for buildings, transport recharges and received indemnities. In 2007 the apparel

division received a significant indemnity related to flood damage in Indonesia.

(3) Other operating expenses mainly consist of taxes on tangible assets, local taxes and import duties.

II.2.2. by nature IN THOUSANDS OF EUROS

- 26 -

II.3. Cash flow statEmEnt

2008 2007 Operating result 16 060 38 792 Depreciations 20 601 20 330 Impairment 0 1 500 Write off inventories and receivables 101 2 265 Provision other risks and charges 343 -213

Details working capital: Inventories 99 183 90 450 Long term and short term trade receivables 56 124 73 221 Other receivables, non-current assets, investments & deferred charges 11 370 13 689 Trade and other payables -24 381 -34 191 Tax liabilities & other amounts payable -15 759 -16 670 Amounts written off inventories and receivables 12 655 13 087 Total working capital 139 192 139 586

Changes in working capital -393 -13 235

Cash flow from operating activities 36 713 49 438 Current taxes -3 965 -9 289

Net cash flow from operating activities 32 748 40 149 Received interests 328 162 Acquisitions of subsidiaries 0 -69 Investments in intangible and tangible fixed assets -16 087 -24 695 Disposal and sale of intangible and tangible fixed assets 5 682 607 Increase in capital grants 830 0 Translation adjustments on intangible and tangible assets 750 224

Net cash flow from investing activities -8 497 -23 771

Net cash flow before financing activities 24 251 16 378 Paid interests -7 364 -7 378 Disbursed dividend -9 354 -5 762 Increase long term interest bearing loans 0 0 Decrease long term interest bearing loans -4 936 -17 111 Increase/(decrease) short term intrest bearing loans 7 963 11 390 Increase/(decrease) finance lease obligations -1 215 -1 455 Other -195 -205 Currency result -2 081 -860

Cash flow from financing activities -17 182 -21 379 Impact of cumulative translation adjustments and hedging -3 -636

Change in cash and cash equivalents 7 066 -5 637 Net cash position at the end of previous period 7 479 13 116 Net cash position at the end of current period 14 545 7 479

- 27 -

II.4. EquitY statEmEnt

2008

Share capital Reserves Translation Hedging differences reserves

At the end of last financial year 46 000 101 761 66 758

Result 3 406 Dividends -9 626 Hedging -95 Deferred tax 32 Cumulative translation adjustments 59 Change in consolidation scope Transfer to profit on cash flow hedges

At the end of current financial year 46 000 95 541 125 695

2007

Share capital Reserves Translation Hedging differences reserves

At the end of last financial year 46 000 88 337 700 759

Result 19 186 Dividends -5 762 Hedging Deferred tax 111 Cumulative translation adjustments -634 Change in consolidation scope Transfer to profit on cash flow hedges -112

At the end of current financial year 46 000 101 761 66 758

The company paid in 2008 9.6 Mio Eur dividends over 2007.

Proposed dividend over 2008 under condition of approval by the general shareholders meeting amounts to 1.7 Mio EUR.

II.4. EquitY statEmEnt

III.1.1. segment InformatIon

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III. notes to the consolidated financial statements

The consolidated annual financial statements of Sioen Industries NV (the ‘Company’) include the annual financial statements of the Company, its subsidiaries and those entities which are consolidated by the proportional method (together referred to below as the ‘Group’). The consolidated financial statements are drawn up in conformity with the International Financial Reporting Standards (IFRS), as accepted within the European Union.In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee (the IFRIC) of the IASB that are relevant to its operations and effective for annual reporting periods beginning on 1 January 2008, all of which were endorsed by the European Union.

Became applicable for 2008p IFRIC 11 IFRS 2 Group and Treasury share Transactions

(applicable for accounting years beginning on or after 1 March 2007).

p IFRIC 12 Service Concession Arrangements (applicable for accounting years beginning on or after 1 January 2008).

p IFRIC 14 ‘IAS 19—The limit on a defined benefit asset, minimum funding requirements and their interaction’ (applicable for accounting years beginning on or after 1 January 2008).

p Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures (amendments to be applied as from 1 July 2008 onwards).

Issued but not yet effectivep IAS 1 Presentation of Financial Statements (annual

periods beginning on or after 1 January 2009). This Standard replaces IAS 1 Presentation of Financial Statements (revised in 2003) as amended in 2005.

p Amendment to IAS 27 Consolidated and Separate Financial Statements (applicable for annual periods beginning on or after 1 July 2009). This Standard amends IAS 27 Consolidated and Separate Financial Statements (revised 2003).

p Amendment to IFRS 2 – Vesting Conditions and Cancellations (applicable for annual periods beginning on or after 1 January 2009).

p Amendments to IAS 32 Financial Instruments: Presenta-tion and IAS 1 Presentation of Financial Statements – Puttable financial instruments an obligations arising on liquidation (annual periods beginning on or after 1 January 2009).

p Amendments to IAS 39 Financial Instruments: Recogni-tion and Measurement – Eligible Hedged Items (annual periods beginning on or after 1 July 2009).

p IFRS 3 Business Combinations (applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009). This Standard replaces IFRS Business Combinations as issued in 2004.

p IFRS 8 Operating Segments (applicable for accounting years beginning on or after 1 January 2009).

p Amendment to IAS 23 Borrowing Costs (applicable for accounting years beginning on or after 1 January 2009).

p Improvements to IFRS (2008) (normally applicable for accounting years beginning on or after 1 January 2009).

p Amendments to IFRS 1 First Time Adoption of Internatio-nal Financial Reporting Standards and IAS 27 Consolida-ted and Separate Financial Statements (normally prospective application for annual periods beginning on or after 1 January 2009).

p IFRS 1 First-time Adoption of International Financial Reporting Standards (applicable for accounting years beginning on or after 1 January 2009).

p IFRIC 13 Customer Loyalty Programmes (applicable for accounting years beginning on or after 1 July 2008).

p IFRIC 15 – Agreements for the construction of real estate (applicable for accounting years beginning on or after 1 January 2009).

p IFRIC 16 Hedges of a net investment in a foreign operation (applicable for accounting years beginning on or after 1 October 2008).

p IFRIC 17 Distributions of Non-cash Assets to Owners (applicable for accounting years beginning on or after 1 July 2009).

p IFRIC 18 Transfers of Assets from Customers (applicable for Transfers received on or after 1 July 2009).

III.1. KEY aCCounting rulEsIII.1.1. summary of sIgnIfICant aCCountIng polICIes

III.1.1. segment InformatIon

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III.1.1.1 general prInCIples

The consolidated annual financial statements give a general overview of the Group’s activities and the results obtained. They give an accurate picture of the entity’s financial position, financial performance and cash flow, and are drawn up on a going concern basis.The annual financial statements are stated in thousands of euros, as the euro is the currency of the primary economic environment in which the Group is active. The annual financial statements of foreign participations are converted in accordance with the principles described in the section ‘Foreign currencies’.The consolidated financial statements are presented on the basis of the historical cost method, unless otherwise stipulated in the accounting principles set out below.

Foreign currenciesOn the basis of the Group’s relevant economic environment and its transactions, the euro has been chosen as the reporting currency. Foreign subsidiaries’ financial statements are converted as follows:Transactions in foreign currencies are converted at the exchange rate which is applicable on the date of the transaction. On each balance sheet date, cash assets and liabilities expressed in foreign currency are converted at the closing rate. Non-cash assets and liabilities which are shown at their fair value in a foreign currency are converted at the exchange rate which is applicable when their fair value was determined.Gains and losses arising from such conversions are recorded in the income statement. However, if they are deferred, they are recorded as equity. Assets and liabilities from the Group’s foreign activities are converted at the closing rate.Income and expenses are converted at the average exchange rate over the period, unless exchange rates have fluctuated significantly. The resultant exchange rate differen-ces are recorded in equity, under the heading “Conversion differences”.If a foreign activity is disposed of, the cumulative amount of the exchange rate differences that was recognised in equity, is recorded in the income statement. Goodwill and adjust-ments to the fair value arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and converted at the closing rate.

III.1.1. general prInCIples

III.1.1. segment InformatIon

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Intangible assetsIntangible assets are valued at cost price. Intangible assets are recognised if it is likely that the Group will receive the associated future economic benefits and if the asset’s cost price can be reliably determined. After their initial recognition in the accounts, all intangible assets are valued at cost price, less any accumulated depreciation or impairments. Intangible assets are depreciated on a straight-line basis over the best estimate of their economic life.The remaining economic life and the depreciation method used are reassessed at the close of every financial year. Any change in the economic life of an intangible asset is treated as a revaluation. Internally generated intangible assets are only recognized if all the following conditions are satisfied:p an identifiable asset has been generated;p it is likely that the generated asset will yield future

economic benefits;p the asset’s cost price can be reliably determined.

Subsequent expenditure on capitalised intangible assets is only included in the balance sheet if it increases the likely future economic benefits associated with the asset concerned. All other expenditure is recorded in the income statement at the time it is incurred.

Licences, patents and similar rightsExpenditure on purchased licences, patents, trademarks and similar rights is capitalised and depreciated on a straight-line basis over the contractual term, where applicable, or over the estimate economic life, which is deemed to be no more than five years.

Computer softwareExpenditure relating to the development or maintenan-ce of computer software is normally offset against the result of the period in which it is incurred. Only external expenditure which is directly related to the purchase and implementation of purchased software is recorded as an intangible asset and depreciated on a straight-line basis over three years. Purchased ERP software and the associated implementation costs are depreciated on a straight-line basis over seven years.

subsidiariesSubsidiaries are companies over which the Company exercises a decisive influence (‘control’). Control is the power to steer an entity’s financial and operational policy in order to derive benefit from its activities. The consolidation of subsidiaries starts on the date on which the Group acquires control over them and stops when it loses that control. The companies in question are accounted for by the full consolidation method.Subsidiaries’ annual financial statements are drawn up for the same financial year as those of the parent company and on the basis of uniform financial reporting principles for comparable transactions and other events in similar circumstances.

Combinations of companiesIf the Group takes over an entity or business activity, the identifiable assets, liabilities and contingent liabilities of the party which has been taken over are adopted at their fair value. Subsidiaries’ financial statements are included in the scope of consolidation from the date of acquisition until control ceases.The difference between the cost price and the acqui-ring party’s stake in the net fair value of the identifiable assets, liabilities and contingent liabilities is recorded as goodwill. If this difference is negative, the surplus, after reassessment of the fair values, is accounted for directly in the income statement. If the group increases its interest in an investment in which it did not yet have control, the surplus or deficit compared with the net asset, after adjustment to the fair value that was acquired, is processed as if it were a new acquisition according to the methodology explained in the section above. If the group increases its interest in an invest-ment in which it already had control, the greater or lesser price that was paid vis-à-vis the share in the net assets that was acquired, is included directly in the company’s own equity.All intercompany transactions, intercompany balances and unrealised profits on intercompany transactions are eliminated unless they relate to a permanent write-down. Minority interests are valued on the basis of their share in the fair value of the recorded assets, liabilities and contingent liabilities.

III.1.1.2 ConsolIdatIon prInCIples III.1.1.3 balanCe

III.1.1. segment InformatIon

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III.1.3. balanCe sheet

Research and developmentResearch expenditure with a view to the acquisition of new scientific or technological insights or knowledge is included as a cost in the income statement as it arises. Development expenditure in which research results are used in a plan or design for the production of new or substantially improved products and processes prior to commercial production or implementation is only recognised in the balance sheet if all the following conditions are satisfied:p the product or process is precisely defined and the

expenditure is individually identifiable and reliably measurable;

p the product’s technical feasibility has been sufficien-tly demonstrated;

p the product or process will be commercialised or used within the company;

p the assets will generated future economic benefits (e.g. a potential market exists for the product or its internal usefulness has been sufficiently proven);

p the appropriate technical, financial and other resources are available to finalise the project.

If the above criteria are not satisfied, the development costs are taken to the income statement as they arise. Capitalised development costs are depreciated on a straight-line basis over the expected duration of the gene-rated benefits from the start of commercial production or the implementation of the product or process.

goodwillGoodwill represents the additional premium paid on the acquisition of an interest over the fair value of the Group’s interest in the acquired assets and liabilities at the time of acquisition. Goodwill is recorded as an asset and subjected to a impairment test at least once a year. Any impairment loss is immediately recorded in the profit and loss account and is not subsequently written back. Negative goodwill represents the amount by which the fair value of the Group’s interest in the acquired assets and liabilities at the time of acquisition exceeds the price paid. On the disposal of a subsidiary, associated undertaking or entity over which joint control is exercised, the related goodwill is included in the calculation of the gain or loss on disposal.

Tangible fixed assetsTangible fixed assets are valued at cost price less accumu-lated depreciation and impairments. A tangible fixed asset is recognised if it is likely that the Group will receive the associated future economic benefits and if the asset’s cost price can be reliably determined. The cost price includes all direct costs and all directly attributable costs incurred in order to bring the asset to the location and condition necessary for it to function in the intended way.

Subsequent expenditure associated with a tangible fixed asset is usually recorded in the income statement as it is incurred. Such expenditure is only capitalised if it can be clearly shown to result in an increase in the expected future economic benefits from the use of the tangible fixed asset compared with the original estimate. Repair and maintenance costs which do not increase the likely future economic benefits are recorded as costs as they are incurred.

The different categories of tangible fixed assets are depreciated by the straight-line method over their estimated economic life. Depreciation commences once the assets are ready for their intended use.

The estimated economic life of the main tangible fixed assets lies within the following ranges:Buildings: 20 yearsMachines: 5 to 15 yearsEquipment: 10 yearsFurniture: 5 yearsHardware: 5 yearsVehicles: 5 years

If an asset’s book value is lower than the estimated realisable value, it is immediately written down to the realisable value. The gain or loss on the sale or disposal of an asset is determined as the difference between the net income on disposal and the asset’s book value. This difference is recorded in the income statement.The borrowing costs that are directly attributable to the acquisition or construction of the capital assets arecapitalized. Other borrowing costs are recognized as an expense in the year in which they are incurred.No borrowing costs were capitalized during 2008.

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Financial investmentsInvestments are recorded in/ removed from the accounts on the transaction date, i.e. the date on which an entity undertakes to buy or sell the asset in question.Financial investments are valued at the fair value of the price paid, plus the transaction costs. Investments held for trading or available for sale are recorded at their fair value. If investments are maintained for trading purposes, the gains and losses arising from changes in the fair value are taken to the profit and loss account for the period in question. In the case of investments which are available for sale, gains and losses arising from changes in the fair value are immediately recogni-sed in equity until the financial asset is sold or subject to impairment. In this case, the cumulative gain or loss which had previously been recognised in equity is included in the income statement for the period. Participations which are classified as available for sale, which are not listed on an active market and whose fair value cannot reliably be determined using alternative valuation rules are valued at cost price. Financial investments which are held until they mature are valued at their amortised cost price, using the effective interest method. This does not apply to short-term deposits, as these are valued at their cost price.

Investment grantsInvestment grants relating to the purchase of tangible fixed assets are offset against the purchase price or manufacturing cost of the assets in question. The expected amount is recorded in the balance sheet at the time of initial approval, and, if necessary, corrected subsequently at the time of definitive allocation of the grant. The grant is recorded in the income statement in proportion with the depreciation of the tangible fixed assets for which it was obtained.

InventoriesInventories are valued at the lower of cost price or realizable value. The cost price includes all direct and indirect costs incurred to bring the goods to the stage of completion they have reached on the balance sheet date. The cost price is calculated using the weighted average cost price method. The realisable value is the

Lease agreementsFinancial leasingLease agreements which assign to the Group all the main risks and benefits associated with ownership are regarded as financial leasing. The assets acquired under financial leasing arrangements are stated in the balance sheet at their fair value at the start of the lease agree-ment, or, if this is lower, at the present value of the minimum lease payments, less accumulated deprecia-tion and impairments. The discount rate used in the calculation of the present value of the minimum lease payments is the interest rate implicit in the lease agreement, where this can be determined, or otherwise the company’s marginal borrowing rate. Initial direct costs are included in the capitalised amount. Lease payments are broken down into interest charges and repayments of the principal. The interest charges are spread over the duration of the lease agreement such that a constant periodic interest rate is obtained on the outstanding balance for each period. A financial lease agreement results in the recording of both a deprecia-tion amount and an interest charge in each period. The depreciation rules for assets acquired under financial leasing arrangements are consistent with those for assets over which full ownership is acquired.

Operational leasingLease agreements in which all the main risks and benefits associated with ownership reside with the lessor are regarded as operational leasing. In operatio-nal leasing, the lease payments are recorded as costs and spread on a straight-line basis over the lease period. The total value of discounts or benefits granted by the lessor is offset against the leasing costs and spread on a straight-line basis over the lease period.

Property investmentsA property investment, i.e. one which is maintained in order to generate rental income, an appreciation of value or both, is shown at fair value on the balance sheet date. Gains or losses arising from a change in the fair value of a property investment are recorded in the income statement for the period in which they arise.

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estimated sale price minus the estimated finishing costs and costs associated with marketing, sale and distribution.

ReceivablesShort-term receivables are stated at nominal value, less suitable provisions for any debts regarded as doubtful. Long-term receivables are valued at amortised cost price.

Cash and cash equivalentsCash and short-term investments which are maintained until the end of the period are stated at their cost price. Cash equivalents are short-term, extremely liquid investments which can be converted immediately into cash of a known amount, and which do not carry any material risk of change of value.

Financial liabilities and equity instrumentsFinancial liabilities and equity instruments are classified on the basis of the economic reality of the contractual agreement. An equity instrument is a contract which includes the residual right to a share in the Group’s assets, after the deduction of all liabilities. Equity instruments issued by the Company are recorded to the amount of the received consideration, less the direct costs of issue.

Income taxTax expenses consist of tax due for the reporting period and deferred taxes. The tax due for the reporting period is based on the taxable profit for the period. Taxable profit differs from the net profit in the income state-ment, because it excludes certain items of income or expenditure which are taxable or deductible in subsequent years, or which will never be taxable or deductible.The current tax liability is calculated on the basis of the tax rates for which the legislative process has been (substantially) completed by the balance sheet date. Deferred taxes are taxes which are expected to be paid or recovered on the basis of differences between the book value of assets or liabilities in the annual accounts and their taxable value used for the calculation of the taxable profit. They are accounted for using the balance

sheet liability method. Deferred tax liabilities are usually recognised for all taxable temporary differences and deferred tax receivables are recognised to the extent that it is likely that a taxable profit will be available against which the recoverable temporary difference can be offset. Such assets and liabilities are not recorded if the temporary differences arise from goodwill or from the initial recognition (other than in connection with a business combination) of other assets and liabilities in a transaction which has no effect on the taxable profit or the profit before tax.

Deferred tax liabilities are recognised for taxable temporary differences which relate to investments in subsidiaries, associated undertakings and enterprises accounted for by the equity method unless the Group can determine the time when the temporary difference will be resolved or if it is likely that the temporary difference will not be resolved in the near future.The book value of deferred tax receivable is assessed at every balance sheet date and reduced if it is no longer likely that sufficient taxable profit will be available to make it possible to use all or some of the benefit of the deferred tax receivable. Deferred taxes are valued on the basis of the tax rates which are expected to apply in the period in which the tax recovery is realised or the liability is settled. Deferred taxes are recorded as income or expenses in the income statement for the period, unless the taxation arises from a transaction or event that has been directly included in equity. In this case, the deferred tax is also accounted for in equity.

Pensions and related liabilitiesIn accordance with laws and practices of each country, associated entities have either defined benefit schemes or defined contribution schemes.

Defined contribution schemesContributions to defined contribution schemes are recorded as an expense as they fall due.

Defined benefit schemesIn defined benefit schemes, the amount on the balance sheet (the ‘net liability’) corresponds to the present value of the gross liability, adjusted for unrecorded

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nel remuneration. Past service costs are taken gradually to the income statement and spread on a straight-line basis over the average term until the benefit rights have been acquired. If benefit rights can be regarded as acquired as a result of a new scheme or changes to an existing scheme, prior service costs are immediately recorded in the income statement.

If the liability to be recorded on the balance sheet is negative, the asset entry that is included may not exceed the total unrecorded cumulative actuarial net losses and prior service costs and the present value of future repayments from the scheme or reductions in future contributions to the scheme (the ‘asset ceiling’ principle). In this case, however, the actuarial gains and losses are immediately taken to the income statement if deferring them would result in the recording of a gain purely as a consequence of an actuarial loss in the current financial year, or of a loss purely and simply as a consequence of an actuarial gain in the current financial year. Past service costs are in this case likewise immediately included if spreading them out on a straight-line basis would result in the recording of a gain purely as a consequence of an increase in past service costs during the current financial year.

Other long-term personnel remunerationOther long-term personnel remuneration such as longservice bonuses is accounted for using the ‘projected unit credit’ method. However, the accoun-ting treatment differs from that of defined benefit schemes, in that actuarial gains and losses and past service costs are recorded immediately.

ProvisionsProvisions are established in the balance sheet if the Group has a legally enforceable or de facto liability on the balance sheet date as a result of an event in the past, for which it is likely that an outlay will be required of resources which contain economic benefits, and if this outlay can be reliably estimated. The amount recorded as a provision is the best estimate on the balance sheet date of the outlay required to satisfy the existing liability, if necessary discounted if the time value of money is relevant.

actuarial gains and losses, after deduction of the fair value of the scheme investments and unrecorded past service costs. The ‘present value of the gross liability of a defined benefit scheme’ is the present value, before deduction of the scheme investments, of expected future payments required to settle the liability which results from the employee’s service record in the current and previous periods.

The discounted value of the liability arising from defined pension rights and the assigned pension costs associated with the year of service and prior service pension costs are calculated by accredited actuaries using the projected unit credit method.

The discount rate corresponds to the rate of return on the balance sheet date on corporate bonds with a high degree of creditworthiness and a remaining term comparable with the term of the Group’s liabilities. The discount rate is adjusted annually to reflect the market return from high-value corporate bonds whose term is consistent with the estimated term of the gross liabilities arising from payments after retirement.

‘Actuarial gains and losses’ include adjustments on the basis of experience (the consequences of differences between previous actuarial assumptions and what has actually happened) and the consequences of changes to actuarial assumptions. In principle, actuarial gains and losses are not recognised at the moment they arise, but, to the extent that the cumulative amount falls outside a certain ‘corridor’, they are spread on a straight-line basis over the expected average remaining working life of the employees who are members of the scheme. This corridor is determined individually for each defined benefit scheme and has lower and upper limits of 110% and 90% respectively of the higher of the present value of the gross liabilities and the fair value of the scheme investments.

‘Past service costs’ refer to the increase in the present value of the gross liability for services provided by employees in previous periods and which result in the current period from the introduction of or changes to payments after retirement or other long-term person-

III.1.1. segment InformatIon

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Provisions for reorganisation costs are recorded if the Group has a detailed formal plan for the reorganization that has already been communicated to the parties concerned before the balance sheet date.

Interest-bearing financingInterest-bearing financing is recorded at the value of the income received less transaction costs incurred. It is then valued at amortised cost price using the effective interest rate method. Any difference between the income (after deduction of transaction costs) and the redemption value (including premiums payable on redemption) is recorded in the income statement over the period of the financing.

Trading accounts payable and other payablesNon-interest-bearing trade liabilities are valued at their cost price, which represents the fair value of the amount payable.

derivative financial instrumentsThe Group uses various derivatives to hedge against currency risks arising from its operating activities, financing and investment activities. The net risk of all Group subsidiaries is managed centrally in line with the objectives and rules established by the Group manage-ment. It is the Group’s policy to avoid engaging in speculative transactions or transactions with a leverage effect and not to engage in trading in financial instruments under any circumstances.

derivative financial instruments are treated as follows:Cash flow hedgingChanges in the fair value of derivative financial instruments which are ascertained to provide effective hedging for future cash flows are recorded directly in equity, while the non-effective element of the gain or loss on the hedging instrument is recorded in the profit and loss account. If the cash flow hedging of a fixed commitment or a highly likely future transaction results in the recognition of an asset or liability, then the associated profits and losses on the derivative instru-

ment which were formerly recorded in equity are now included in the initial valuation of the asset or liability at the time of recognition. For hedges which do not result in the recognition of non financial asset or liability, amounts which were deferred in equity are recorded in the profit and loss account for the period during which the hedged item affects the gain or loss.

Fair value hedgingA derivative instrument is recorded as a fair value hedge if the instrument hedges against the risk that the fair value of the recorded assets and liabilities may change. Derivatives accounted for as fair value hedges and hedged assets and liabilities are recorded at their fair value. The corresponding changes in the fair value are recorded in the income statement. Changes in the fair value of derivative financial instruments which do not qualify as hedging transactions are recorded in the income statement when they arise. Hedge accounting is discontinued when the hedging instrument expires, is sold, terminated or exercised or when the hedging no longer satisfies the criteria for hedge accounting. In this case the cumulative gain or loss on the hedging instrument which is accounted for directly in equity continues to be recorded separately in equity until the expected future transaction takes place. If an expected future transaction is not expected to take place any more, the cumulative gain or loss shown in the equity is transferred to the income statement for the period.

RevenueRevenue is recorded if it is likely that the company will receive the economic benefits associated with the transac-tion and the amount of the revenue can be measured reliably. Turnover is recorded after the deduction of turnover tax and discounts.Revenue from the sale of goods is recorded when the delivery and the complete transfer of risks and benefits have taken place.Interest revenue is recorded on a time basis that reflects the actual return on the asset. Royalties are included on an accrual basis in accordance with the conditions of the agreement. Dividends are recorded when the shareholder’s right to receive them has arisen.

III.1.1. segment InformatIon

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III.1.1.4 other

Impairment of tangible and intangible assetsAs goodwill, which is subjected to an impairment test every year, intangible assets and tangible fixed assets also are subject to an evaluation when there is an indication that their book value may be lower than their recoverable amount. If an asset does not generate a cash inflow which is independent of other assets, the Group estimates the realisable value of the cash flow generating unit to which the asset belongs.

The recoverable amount is the highest value of the fair value minus sales costs and the value to the business.

The method of the going concern value uses cash flow forecasts based on the financial budget that is approved by the management. Cash flows after this period are extrapolated by making use of the most justified percen-tage growth over the long term for the sector in which the cash flow-generating unit is active. The management bases its assumptions (prices, volumes, return) on past performances and on its expectations with regard to the development of the market. The weighted average growth percentages are in conformity with the forecasts included in the sector reports. The post tax discount rate used is the estimated weighted average equity cost of the group before taxes, and takes account of the current market evaluations of the time value of money and the risks for which the future cash flows are adapted.

If the recoverable amount of an asset (or cash flow generating unit) is estimated to be lower than its book value, the asset’s (or cash flow generating unit’s) book value is reduced to its recoverable amount. An impairment loss is immediately recorded in the income statement.

If an impairment loss is subsequently written back, the asset’s (or cash flow generating unit’s) book value is increased to the revised estimate of its recoverable amount, but only to the extent that the increased book value is no higher than the book value that would have

been recorded if no impairment loss had been recorded for the asset (or cash flow generating unit) in previous years. However, impairment losses on goodwill are never written back.

Annual test for impairmentIn order to provide the stakeholders with in-depth knowledge as to the financial strength of the Group, we assessed the recoverable amount of assets. Actual cash flows may differ from the estimated cash flows in case key assumptions vary from the estimates.

The recoverable amount of our global business has been determined based upon a value-in-use calcula-tion. Calculations of the value in use cover a five-year period. Cash flow estimates are based on strategic plans in line with the current operational structure, which are approved by management, as well as on assumptions used in the strategic plans on the long-term develop-ment of the business environment. Estimates on future growth rates, market positions and profitability levels are the most important key assumptions. Price development of a single cost item has no material impact whereas the estimated development of total costs affects the profitability level, which is one of the key assumptions. Capital expenditure is estimated to be comprised of normal replacements.

The terminal growth rate used in the calculations is based on the management’s assessment on long term growth. The terminal growth rate used varies from 0% to 3%.

The discount rate applied to the cash flow is based on the Group’s weighted average cost of capital, in view of the business risks and varies between 9.1% and 9.5%.

Estimates on long-term growth, development of profitability level and discount rate were key assumptions used in impairment testing of cash generating units with significant carrying amounts of assets.

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III.1.4. mIsCellaneous

The amount by which the unit’s recoverable amount exceeds its carrying amount has been assessed as follows:p 0-20% exceeds moderatelyp 20-50% exceeds clearlyp Over 50% exceeds significantly

SensitivitiesThe Group’s impairment review is sensitive to a change in key assumptions used, most notably the discount rates and the perpetuity rates. Based on the Group’s sensitivity analysis, a reasonable possible change in a single factor will not cause impairment in any of the Group’s CGU’s.

However, a significant adverse change in our key assumptions could result in an impairment in our Roland subdivision as the discounted cash flow exceeds the carrying value only by between 10% and 20%.

Post-balance sheet eventsPost-balance sheet events which provide additional information about the company’s situation on the balance sheet date (‘adjusting events’) are included in the annual accounts. Other post-balance sheet events are only mentioned in the notes if they may have a significant impact.

The most important assessment criteria in the application of the Valuation rulesIn the application of the valuation rules, in certain cases an accounting assessment must be made. This assess-ment is done by making the most accurate assessment possible of uncertain future evolutions. The manage-ment determines its assessment on the basis of different realistically assessed parameters, such as future market expectations, sector growth rates, industry studies, economic realities, budgets and multi-year plans, expected profitability studies, etc. The most important elements within the group that are subject to this are: impairments, provisions and deferred tax items.

Carrying amount in relations to recoverable amount of cash generating units with significant carrying amounts of assets 2008 Coating division exceeds significantly Apparel division exceeds significantly Chemicals division exceeds clearly Roland subdivision exceeds moderately Calandering subdivision exceeds clearly

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III.2. sEgmEnt information

2008 Coating Apparel Industrial Chemicals Head Elimina- Conso- applications office tions lidated Net sales 178 580 77 019 74 672 55 174 13 -36 093 349 366 External sales 153 242 77 013 72 193 46 903 13 349 366 Intersegment sales 25 338 6 2 479 8 271 -36 093

Segment result from 11 055 7 922 -154 -2 231 16 593 operational activities Unallocated result from -532 operational activities Result from operational 16 060 activities Financial result -5 548 -1 346 -2 530 -1 974 1 686 171 -9 541 Profit or loss before taxes 6 519 Taxes -3 114 Profit or loss after taxes 3 406 Segment assets 214 985 65 779 43 638 50 542 -12 548 362 396 Unallocated assets 9 346 Total consolidated assets 371 742 Segment liabilities 214 985 65 779 43 638 50 542 -12 548 362 396 Unallocated liabilities 9 346 Total consolidated liabilities 371 742 Other information Coating Apparel Industrial Chemicals Head Elimina- Conso- applications office tions lidated Depreciations 11 411 1 164 2 253 4 421 1 351 20 601 Write off inventories 214 -321 -104 249 38 Write off receivables 18 22 -177 200 63 Additions to/(reversals) of -214 15 -20 -741 -960 provisions EBITDA 24 318 8 640 2 004 2 055 824 -171 37 669 Non recurring result -4 475 -39 -468 -311 -5 292 Impairment Investments in intangible 20 51 83 2 073 2 227 fixed assets Investments in tangible 20 677 783 556 525 1 013 23 555 fixed assets

PRIMARY SEGMENT INFORMATION

For management purposes, the Group is organised into four major operating divisions – Coating, Apparel, Chemi-cals and Industrial Applications. These divisions are the basis on which the Group reports its primary segment information. The principal products and services of each of these divisions are described earlier in this annual report.For more details on these divisions reference is made to the first part of this annual report. Inter-segment sales are undertaken at prevailing market conditions. The segment liabilities, including the centrally contracted financial debt, have been allocated according to the capital employed by the segment and allocated part of equity. The assets and liabilities of the head office (group) have been allocated to the segments as far as possible.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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2007 Coating Apparel Industrial Chemicals Head Elimina- Conso- applications office tions lidated Net sales 201 230 69 929 89 661 63 878 26 -44 373 380 350 External sales 170 241 69 924 85 995 54 165 26 380 350 Intersegment sales 30 989 5 3 666 9 713 -44 373 0

Segment result from 26 642 7 814 2 323 2 800 39 578 operational activities Unallocated result from 2 014 operational activities Result from operational 38 792 activities Financial result -5 463 -1 299 -1 090 -2 062 1 829 -287 -8 372 Profit or loss before taxes 30 419 Taxes -11 234 Profit or loss after taxes 19 186 Segment assets 217 456 57 965 54 547 59 847 -14 349 375 466 Unallocated assets 2 646 Total consolidated assets 378 112 Segment liabilities 217 456 57 965 54 547 59 847 -14 349 375 466 Unallocated liabilities 2 646 Total consolidated liabilities 378 112 Other information Coating Apparel Industrial Chemicals Head Elimina- Conso- applications office tions lidated Depreciations 11 521 1 211 2 105 4 556 936 20 330 Write off inventories 187 1 574 33 -190 1 604 Write off receivables 431 -7 157 80 661 Additions to/(reversals) of -259 -34 78 -215 provisions EBITDA 38 521 10 591 4 584 7 325 -138 287 61 171 Impairments -1 500 -1 500 Investments in intangible 31 140 38 1 992 1 324 3 525 fixed assets Investments in tangible 14 040 1 279 2 873 1 413 1 565 21 169 fixed assets

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2008 Gross sales Assets Capital Expenditure France 70 178 19.9% 46 659 12.6% 1 085 4.0% Germany 60 740 17.3% 121 0.0% 0 0.0% Eastern Europe 48 128 13.7% 9 925 2.7% 253 0.9% Belgium 40 726 11.6% 274 633 73.9% 23 735 92.5% Netherlands 29 901 8.5% 7 338 2.0% 95 0.3% Great Britain 22 070 6.3% 2.207 0.6% 53 0.2% Italy 12 448 3.5% 0 0.0% 0 0.0% Scandinavia 8 943 2.5% 0 0.0% 0 0.0% Switzerland 8 725 2.5% 0 0.0% 0 0.0% Spain 8 684 2.5% 0 0.0% 0 0.0% USA 6 180 1.8% 3 347 0.9% 7 0.0% Austria 5 122 1.5% 0 0.0% 0 0.0% Ireland 3 750 1.1% 2 357 0.6% 19 0.1% Other 26 404 7.5% 24 943 6.7% 533 2.0% Subtotal 352 000 100.0% 371 530 100.0% 25 782 100.0% Discounts 2 635 Net Sales 349 366

2007 Gross sales Assets Capital Expenditure Germany 74 672 19.5% 240 0.1% 0 0.0% France 71 304 18.6% 50 669 13.3% 1 830 7.4% Belgium 43 287 11.3% 270 294 71.0% 20 043 81.2% Eastern Europe 28 683 7.5% 14 352 3.8% 1 539 6.2% Netherlands 32 585 8.5% 11 569 3.0% 39 0.2% Great Britain 27 212 7.1% 5 615 1.5% 20 0.1% Italy 15 862 4.1% 0 0.0% 0 0.0% Scandinavia 9 798 2.6% 0 0.0% 0 0.0% Spain 11 652 3.0% 0 0.0% 0 0.0% USA 6 365 1.7% 3 212 0.8% 36 0.1% Ireland 4 147 1.1% 3 498 0.9% 30 0.1% Switzerland 7 239 1.9% 0 0.0% 0 0.0% Austria 4 158 1.1% 0 0.0% 0 0.0% Other 46 171 12.1% 21 221 5.6% 1 140 4.6% Subtotal 383 137 100.0% 380 669 100.0% 24 676 100.0% Discounts 2 786 Net Sales 380 350

SECONDARY SEGMENT INFORMATION

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Code RATE 2008 2007

EUR average 1.00000 1.0000 closing 1.00000 1.0000 USD average 1.47491 1.3794 closing 1.39170 1.4721 GBP average 0.80287 0.6873 closing 0.95250 0.7334 RMB average 10.21847 10.4536 closing 9.49559 10.7525 PLN average 3.52514 3.7749 closing 4.15350 3.5935 TDN average 1.80650 1.7557 closing 1.83512 1.7919 UAH average 7.90745 6.9457 closing 11.21604 7.4354

III.3. ExChangE ratEs

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.4.1. by funCtIon

III.4. dEtailEd inComE statEmEnt

2008 2007

NET SALES Sales of goods 354 972 384 507 Subcontracting 722 1 881 Commissions and discounts -6 329 -6 038 Net sales 349 366 380 350

COST OF SALES Purchases 182 088 187 965 Transport cost goods purchased 1 452 1 207 Stock variation -9 169 -7 905 Subcontracting 3 214 3 945 Personnel expenses 46 041 46 165 Depreciation 16 038 15 252 Services and other goods 40 385 40 957 Amounts written off inventory and receivables 71 1 604 Cost of goods sold 280 120 289 191

SALES AND MARKETING Personnel expenses 11 122 11 219 Depreciation 85 90 Other services and other goods 7 785 8 490 Amounts written off inventory and receivables 30 661 Sales and marketing 19 023 20 460

RESEARCH AND DEVELOPMENT Personnel expenses 4 107 3 909 Depreciation 547 544 Other services and goods 1 448 2 900 Research and development expenses 6 101 7 352

GENERAL AND ADMINISTRATIVE EXPENSES Personnel expenses 10 532 11 349 Depreciation 3 932 4 444 Other services and goods 10 953 9 945 General overhead expenses 25 416 25 738

OTHER OPERATING INCOME AND EXPENSES Gain/loss on realization fixed assets 322 129 Provision liabilities & charges 960 215 Exceptional loss 0 -234 Received indemnities 225 2 025 Local taxes -956 -1 485 Other 1 238 1 408 Received Rent 858 623 Other operating income and expenses 2 646 2 682

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.4.2. results

2008 2007

NON RECURRING RESULT Impairments 0 -1 500 Restructuring expenses -2 294 0 Start-up costs new production line -2 998 0 Non recurring result -5 292 -1 500 Operating result 16 060 38 792

FINANCIAL RESULT Interests received 104 162 Interests paid -7 593 -7 378

Currency expenses other -190 -35 Currency income Trade Receivables 1 427 499 Currency expenses Trade Receivables -1 752 -1 275 Currency income Trade Payables 741 366 Currency expenses Trade Payables -1 268 -340 Realized currency result -1 042 -785

Revaluation expenses Trade Receivables -149 -521 Revaluation income Trade Receivables 179 354 Revaluation expenses Trade Payables -371 -152 Revaluation income Trade Payables 335 130 Fair Value hedging instruments -15 -41 Revaluation other -1 215 -207 Unrealized currency result -1 237 -436

Other 227 65 Financial result -9 541 -8 372

TAXES Current tax 3 965 -9 319 Deferred tax -851 -1 915 Taxes 3 114 -11 234

PROFIT OR LOSS AFTER TAXES Profit or loss after taxes 3 406 19 186

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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2008 2007

Profit before taxes 6 519 30 419 Tax on profit of fiscal entities against theoretical local tax rate 2 582 39.63% 10 471 34.42% Theoretical tax rate (1) 39.63% 34.42% Tax impact of: Change in tax rate 0 0.00% 0 0.00% non-deductible expenses 318 4.87% 200 0.66% specific tax regimes -755 -11.59% -864 -2.84% deferred tax assets not recognised 722 11.08% 1 137 3.74% new valuation allowance on previously recognised deferred tax assets (2) 3 152 48.36% 1 819 5.98% Usage of non-recognised deferred tax assets -66 -1.01% -1 344 -4.42% Regularisation of current tax on previous years 480 7.37% 584 1.92% carry back (3) notional interest deduction -1 257 -19.29% -797 -2.62% Deferred taxes on undistributed reserves 0 0.00% -167 -0.55% Tax on undistributed profits (DBI) -2 094 -32.13% 199 0.65% Other (4) -500 -7.67% -3 -0.01%

Tax on profit as shown in the P&L 3 114 47.79% 11 233 36.93%

Reconciliation between taxes and result before taxes.

(1) is the weighted average tax rate

(2) valuation allowance on Roland Group. We refer to the deferred tax disclosure (III.5.15)

(3) reserves will not be distributed to the parent company unless this could be done at a zero tax rate (III.5.15)

(4) tax claim Indonesia won in 2008

III.4.2. taxes

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Earnings per shareThe calculation of the basic earnings and diluted earnings per share is based on the following data (amounts in EUR):

Diluted earnings per share

DividendsThe dividend for the period ending 31 December 2007 amounted to EUR 0.45 per share.The proposed dividend for the period ending 31 December 2008 is EUR 0.08 per share.The proposed dividend awaits shareholders’ approval at the annual general meeting and is not shown as a liability in these financial statements.

2008 2007

Net earnings for the period 3 405 529 19 185 716 Net earnings from continuing activities 3 405 529 19 185 716 Weighted average number of outstanding shares 21 391 070 21 391 070 Ordinary shares 21 391 070 21 391 070 Weighted average number of shares for ordinary profit per share 21 391 070 21 391 070 Basic earnings per share 0.16 0.90 Basic earnings per share from continuing activities 0.16 0.90

2008 2007

Diluted elements Net earnings from continuing activities 3 405 529 19 185 716 Earnings attributable to ordinary shareholders 3 405 529 19 185 716 Weighted average number of outstanding ordinary shares 21 391 070 21 391 070 Weighted average number of shares for diluted earnings per share 21 391 070 21 391 070 Diluted earnings per share 0.16 0.90 Diluted earnings per share from continuing activities 0.16 0.90

III.4.4. dIvIdendsIII.4.3. dIvIdends and earnIngs per share

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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2008 Exchange Acquired Opening rate via business Closing balance Purchases Disp. Transf. differences combination Depreciation Other balance Note Concessions, patents, 10 084 70 190 -45 10 299 licences etc.: acquisition Software: acquisition 14 026 2 157 -4 344 15 16 538 Customer portfolio: 10 139 10 139 acquisition TOTAL acquisition 34 249 2 227 -4 534 -30 36 976 Concessions patents 3 782 -46 1 018 4 753 licences etc.: depreciation Software: depreciation 8 380 -1 8 910 9 297 Customer portfolio: 3 253 1 835 -70 5 018 depreciation TOTAL depreciation 15 415 -1 -38 3 762 -70 19 068 TOTAL IFA 18 834 2 227 -3 534 8 -3 762 70 17 908 II.1.

2007 Exchange Acquired Opening rate via business Closing balance Purchases Disp. Transf. differences combination Depreciation Other balance Note Concessions, patents, 10 082 18 -15 10 084 licences etc.: acquisition Software: acquisition 11 345 1 519 -22 1 184 14 026 Customer portfolio: 8 150 1 989 10 139 acquisition TOTAL acquisition 29 576 1 537 -36 1 989 1 184 34 249 Concessions patents 1 758 -15 2 101 -62 3 782 licences etc.: depreciation Software: depreciation 7 859 -12 533 8 380 Customer portfolio: 2 243 1 217 -208 3 253 depreciation TOTAL depreciation 11 860 -27 3 851 -270 15 415 TOTAL IFA 17 716 1 537 -9 1 989 -3 851 1 453 18 834 II.1.

Total purchases of intangible fixed assets amount to EUR 2.2 million in 2008 compared with EUR 3.5 million in 2007. Purchases in 2008 mainly relate to the development and implementation of new ERP software in the Chemicals division and the subdivision Heavy Confection, part of the Industrial Applications division.

Purchases in 2007 mainly relate to the ERP software implementation project. As from 2007, the ERP software and associated implementation costs were partly implemented (Roland subdivion, part of the Industrial Applications division) and are being depreciated over seven years on a straight-line basis. On the other hand, two customer portfolios, related to Fillink Technologies NV (share deal) and

Clariant France (asset deal), were purchased by the division Chemicals in 2007.Customer portfolios of Fillink and Clariant, purchased in 2007, were valued at respectively EUR 1.5 million and EUR 0.5 million and are being depreciated over 5 years.

Depreciation of intangible fixed assets amounts to EUR 3.8 million. Depreciation of customer portfolios is shown in cost of sales in the income statement by function.

No development expenses have been capitalized. An impairment analysis has been done at the end of 2008.No impairments have been recorded. We refer to III.1.Key Accounting Rules, paragraph ‘annual test for impairment’.

III.5.1. IntangIble fIxed assets

III.5. dEtailEd balanCE shEEt

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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2008

Goodwill 17 585 17 17 603 II.1.

2007

Goodwill 17 935 -508 152 7 17 585 II.1.

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Coating 10 950 Apparel 2 385 Industrial application 15 Chemicals 4 253

In 2008 there were no significant goodwill movements.

In January 2007 Fillink Technologies SA was purchased by the chemicals division. The purchased assets were included in the consolidated annual accounts using the purchase accounting method. The goodwill of EUR 0.2 million is not depreciated, in line with IFRS 3.

In October 2006 Richard Colorants SA, Copidis SAS and Astra SA were purchased, resulting in a goodwill of EUR 1.4 million. In 2007 goodwill decreased by EUR 0.5 million, related to the Richard group. A deferred tax asset was recognised in 2007 (tax loss carryforward of Astra SA) from the merger with Richard SA in 2007. This has been subtracted from the initial goodwill.

The carrying amount of goodwill acquired in a business combination must be allocated on a reasonable and consistent basis to each cash flow-generating unit or the smallest group of cash flow-generating units, in confor-mity with IAS 36.

An impairment analysis has been done at the end of 2008. We refer to III.1. Key Accounting Rules, paragraph ‘annual test for impairment’.

III.5.2. goodwIllIII.5.2. goodwIll

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.3. subsIdIarIes

% holding 2008 2007Sioen n.v. Belgium Ardooie 99,00% 99,47% apparelVeranneman Technical Textiles n.v. Belgium Ardooie 98,72% 98,72% coatingEuropean Master Batch n.v. Belgium Bornem 100,00% 100,00% chemicalsCoatex n.v. Belgium Poperinge 100,00% 100,00% industrial applicationsSioen France s.a.s. France Narbonne 99,83% 99,83% apparelConfection Tunisienne de Sécurité s.a. Tunesia Tunis 89,25% 89,25% apparelDonegal Protective Clothing Ltd. Ireland Derrybeg 100,00% 100,00% apparelSioen Coating Distribution n.v. Belgium Ardooie 100,00% 100,00% coatingSiofab s.a. Portugal Santo Tirso 100,00% 100,00% coatingP.T. Sungintex Indonesia Jakarta 100,00% 100,00% apparelSaint Frères s.a.s. France Flixecourt 99,97% 99,97% coatingSioen Fabrics s.a. Belgium Moeskroen 100,00% 100,00% coatingSaint Frères Confection s.a.s. France Flixecourt 100,00% 100,00% industrial applicationsP.T. Sioen Indonesia Indonesia Jakarta 100,00% 100,00% apparelSioen Tunisie s.a. Tunesia Tunis 99,83% 99,83% apparelSioen Fibres s.a. Belgium Moeskroen 100,00% 100,00% coatingTIS n.v. Belgium Haaltert-Kerksken 100,00% 100,00% coatingMullion Manufacturing Ltd. United Kingdom Scunthorpe 100,00% 100,00% apparelSioen Shanghai China Shanghai 100,00% 100,00% coatingSioen Zaghouan s.a. Tunesia Zaghouan 99,50% 99,50% apparelSioen Nordifa s.a. Belgium Luik 100,00% 100,00% industrial applicationsInducolor s.a. Belgium Meslin-L’Evêque 100,00% 100,00% chemicalsSioen Coating n.v. Belgium Ardooie 99,47% 99,47% coatingPennel Automotive s.a.s. France Roubaix 100,00% 100,00% coatingRoland International b.v. The Netherlands Tegelen 100,00% 100,00% industrial applicationsRoland Planen GmbH Germany Werlte 100,00% 100,00% industrial applicationsRoltrans Group America Inc. USA Arlington 100,00% 100,00% industrial applicationsRoland International Polska Spzoo Poland Konin 100,00% 100,00% industrial applicationsRoland International Ltd. United Kingdom Shipley 100,00% 100,00% industrial applicationsMonal s.a. Luxemburg Luxemburg 100,00% 100,00% industrial applicationsRoltrans Group b.v. The Netherlands Tegelen 100,00% 100,00% industrial applicationsRoland-Ukraine Llc Ukraine Rivne 100,00% 100,00% industrial applicationsRichard s.a.s. France Lomme 100,00% 100,00% chemicalsFillink Technologies n.v. Belgium Brussel 100,00% 100,00% chemicalsSioen Industries n.v. Belgium Ardooie 100,00% 100,00% group

Changes with respect to 2007:

In the context of Sioen Fibres s.a.’s transfer of its “Distribution” business to Sioen n.v. at 1 July 2008, the company capital of Sioen n.v. was

increased by EUR 687,083, with the issue of 83,754 new shares.

USA Inc. was wound up in April 2008.

In 2008 Roltrans Group Polska Sp.z.o.o. changed its name to Roland International Polska Sp.z.o.o.

In 2008 Roland Tilts UK Ltd. changed its name to Roland International Ltd.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.4. tangIble fIxed assets

Tangible fixed assetsDuring 2008, the total acquisition of tangible fixed assets amounted to EUR 23.6 million (including investment grants). In 2008 capital grants received amount to EUR 0.8 million for the investments in the new production line in Moeskroen. In 2007 no capital grants were received.

The main investments in 2008 were:p EUR 6.8 million: investment in new buildings and

infrastructure at Veranneman and Sioen Coating NV p EUR 2.9 million: investment in infrastructure, building

and machinery at Fabrics Calanderingp EUR 2.6 million: investment in a new ERP package and

hardwarep EUR 2.2 million: machinery and infrastructure at

Verannemanp EUR 1.3 million: weaving machinery at TISp EUR 0.8 million: machinery at Saint Freres Enduction p EUR 0.4 million: machinery at Sioen Coating NV

During 2007, tangible fixed assets were acquired in a total amount of EUR 21.1 million.The main investments in 2007 were:p EUR 5.7 million in calandering machinery at Moeskroenp EUR 1.5 million in infrastructure and EUR 1.3 million

building at Moeskroen for calandering projectp EUR 1.5 million in looms and 0.8 million in IR ovens at

Verannemanp EUR 1.2 million in machinery at Saint Frères Enductionp EUR 1.1 million in machinery at Coatexp EUR 0.9 million in machinery at Roland Polandp EUR 0.7 million in machinery at TIS Weavingp EUR 0.7 million in machinery and infrastructure at EMBp EUR 0.6 million in building infrastructure at Sioen

Indonesia

In 2008, the fixed assets under construction relate to the finance lease (III.5.12) of buildings at Veranneman and Sioen Coating NV, that came into use in January 2009.In 2007, the fixed assets under construction mainly related to the calandering factory, that came into use in March 2008.

The buildings in Tegelen and Meyzieux are not used in production and therefore are not depreciated.

The different categories of tangible fixed assets are depreciated by the straight-line method over their estimated useful life. Depreciation commences once the assets are ready for their intended use.

The estimated useful life of the main tangible fixed assets lies within the following ranges:

Buildings: 20 yearsMachines: 5 to 15 yearsEquipment: 10 yearsFurniture: 5 yearsHardware: 5 yearsVehicles: 5 years

There are no mortgages secured on the tangible fixed assets. Tangible fixed assets are subject to the application of IAS 36, impairments, when there is an indication that their book value may be lower than their recoverable amount. If an asset does not generate a cash inflow which is independent of other assets, the Group estimates the recoverable amount of the cash flow generating unit to which the asset belongs.

An impairment analysis has been done at the end of 2008. No impairments have been recorded. We refer to III.1. Key Accounting Rules, paragraph ‘annual test for impairment’. In 2007 an impairment loss, amounting to EUR 1.5 million was recognized on assets of the ‘Non Wovens’ cash generating unit of the Industrial Applications division.

At 31 December 2008, the Group has entered into contrac-tual commitments for the acquisition of property, plant & equipment amounting to EUR 3.3 million for a new building for Sioen Fibres and Coatex which will be completed at the beginning of May 2009. (IV.3)

III.5.4. tangIble fIxed assets

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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2008 Land: acquisition 17 782 -300 188 -137 17 533 Buildings: acquisition 56 272 1 452 -503 -3 789 0 -562 56 198 Infrastructure buildings: 22 976 1 509 -7 -1 002 -1 063 -44 22 369 acquisition Plant, machinery and 171 838 7 808 -537 -1 700 7 482 -492 184 399 equipment: acquisition Furniture: acquisition 4 247 51 -33 -449 28 3 844 Vehicles: acquisition 3 668 570 -166 -228 28 -21 3 851 Hardware: acquisition 5 897 724 -6 -39 409 46 7 032 Leasing land and buildings: 19 482 4 628 -37 -532 -68 23 473 acquisition Leasing furniture and 43 43 equipment: acquisition Assets under construction: 10 015 6 814 -39 -7 155 6 306 acquisition TOTAL acquisition 312 219 23 555 -1 627 -6 758 -1 091 -1 251 325 047

Plant, machinery and 1 500 1 500 equipment: impairment TOTAL impairment 1 500 1 500

Buildings: depreciation 25 322 -2 -404 826 -237 2 304 27 809 Infrastructure buildings: 14 675 -79 -1 325 -36 1 486 14 721 depreciation Plant, machinery and 101 461 -520 -1 318 -88 -232 10 661 109 963 equipment: depreciation Furniture: depreciation 3 918 -17 -446 25 119 3 599 Vehicles: depreciation 2 669 -158 -165 -28 406 2 724 Hardware: depreciation 4 826 -2 -4 376 41 545 5 781 Leasing land and buildings: 6 430 -32 100 -33 1 302 7 766 depreciation Leasing furniture and 14 11 24 equipment: depreciation Assets under construction: depreciation TOTAL depreciation 159 314 -732 -1 971 -557 -500 16 834 172 387

Land 17 782 -300 188 -137 17 533 Buildings 39 250 2 961 -508 -4 308 -564 -333 -3 791 36 037 Plant, machinery 68 877 7 808 -17 -381 7 570 -260 -10 661 72 936 and equipment Furniture and Vehicules 2 399 1 344 -26 -98 58 15 -1 070 2 623 Fixed assets held under 13 081 4 628 -4 -632 -35 -1 313 15 725 leasing and other simil Assets under construction 10 015 6 814 -39 -7 155 6 306 and advance payments NET BOOK VALUE 151 404 23 555 -895 -4 787 -534 -750 -16 834 151 160 II.1.

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2007 Land: acquisition 17 633 267 -132 14 17 782 Buildings: acquisition 53 003 2 295 -20 1 306 -312 56 272 Infrastructure buildings: 21 940 1 039 -7 3 -17 18 22 976 acquisition Plant, machinery and 162 721 11 645 -229 -2 042 184 -442 171 838 equipment: acquisition Furniture: acquisition 4 222 134 -8 -102 4 247 Vehicles: acquisition 3 578 622 -217 -302 -14 3 668 Hardware: acquisition 5 612 403 -10 -109 5 897 Leasing land and buildings: 19 378 107 -33 30 19 482 acquisition Leasing furniture and 43 43 equipment: acquisition Assets under construction: 8 036 4 628 -1 472 7 -1 184 10 015 acquisition TOTAL acquisition 296 168 21 140 -523 -2 341 -132 -909 -1 184 312 219

Plant, machinery and 0 1 500 1 500 equipment: impairment TOTAL impairment 0 1 500 1 500

Buildings: depreciation 23 385 -132 -91 2 155 4 25 322 Infrastructure buildings: 13 160 -1 14 1 501 1 14 675 depreciation Plant, machinery and 92 955 -119 -1 775 -441 10 916 -76 101 461 equipment: depreciation Furniture: depreciation 3 865 -6 -92 151 3 918 Vehicles: depreciation 2 650 -132 -200 6 346 -1 2 669 Hardware: depreciation 4 400 -5 -91 521 4 826 Leasing land and buildings: 5 330 -21 9 1 110 1 6 430 depreciation Leasing furniture and 3 11 14 equipment: depreciation Assets under construction: depreciation TOTAL depreciation 145 748 -283 -1 974 -132 -685 16 711 -70 159 314

Land 17 633 267 -132 14 17 782 Buildings 38 399 3 334 -27 2 1 421 -217 -3 657 -5 39 250 Plant, machinery 69 765 11 645 -110 -267 185 -1 -10 916 76 -1 500 68 877 and equipment Furniture and Vehicules 2 498 1 159 -91 -102 -48 -1 018 1 2 399 Fixed assets held under 14 089 107 -13 21 -1 121 -1 13 081 leasing and other simil Assets under construction 8 036 4 628 -1 472 7 -1 184 10 015 and advance payments NET BOOK VALUE 150 420 21 140 -240 -367 0 -224 -16 711 -1 114 -1 500 151 404 II.1.

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III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.5. long term reCeIvables

Opening Fair Value Closing 2008 balance Increase Decrease adjustment balance Note Trade debtors LT 14 3 17 Trade debtors LT: revaluation Trade debtors LT: impairment Long term trade receivables 14 3 17 II.1. Opening Fair Value Closing 2007 balance Increase Decrease adjustment balance Trade debtors LT 22 -5 -3 14 Trade debtors LT: revaluation Trade debtors LT: impairment Long term trade receivables 22 -5 -3 14 II.1.

Exchange (Other) move- Opening rate ments or Closing 2008 balance Increase Decrease differences adjustments balance Note Affiliated enterprises: amounts receivable Other shares: acquisition Guarantees and deposits: 636 383 -405 -16 -65 533 acquisition Other amounts receivable LT: 812 812 acquisition Total long term assets 636 1 195 -405 -16 -65 1 345 II.1. Exchange (Other) move- Opening rate ments or Closing 2007 balance Increase Decrease differences adjustments balance Note Affiliated enterprises: amounts receivable Other shares: acquisition Guarantees and deposits: 504 151 -76 -10 67 636 acquisition Other amounts receivable LT: acquisition Total long term assets 504 151 -76 -10 67 636 II.1.

Long term trade receivables

The term of these trade receivables is between two and three years. These long-term receivables have been valued at their

net present value.

The above financial assets relate to a long term trade receivable. The carrying amount approaches the fair value as per 31 December 2008.

The agreed payments are discounted at a rate of 8%.

Other long term assets

As in previous years these other long term assets mainly consist of VAT deposits and long term receivables related to prepaid rent.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.6. InventorIes

Gross inventory 2008 2007 Note

Raw materials 34 937 32 351 Consumables 400 963 Work in progress 4 702 4 560 Finished goods 63 081 56 834 Goods in transit 4 398 4 512 Contracts in progress TOTAL 107 518 99 220

Amounts written off

Amounts written off raw materials -3 173 -3 374 Amounts written off consumables -7 Amounts written off work in progress Amounts written off finished goods -5 162 -5 389 Amounts written off goods in transit Amounts written off contracts in progress TOTAL -8 335 -8 770

Net inventory

Raw materials 31 764 28 977 Consumables 400 956 Work in progress 4 702 4 560 Finished goods 57 919 51 445 Goods in transit 4 398 4 512 TOTAL 99 183 90 450 II.1.

Gross inventories (excluding writeoffs) increased by EUR 8.3 million compared with 2007. Increased activity resulted in an inventory increase of EUR 6.4 million in the apparel division. Increased capacity combined with the start up of a new production line increased inventory with EUR 4.9 million within the coating division. In the chemicals divison, the inventory level remained at level (EUR -0.2 million) while inventory decreased with EUR 2.8 million in the divison industrial appllications as a result of decreased activity.

Obsolescence reserves on inventories amounted to EUR 8.3 million in 2008 compared with EUR 8.8 million in 2007. There was no significant write offs of obsolete inventory to net realisable value in 2008. These obsolescence reserves are recorded on the basis of a detailed aging and rotation analysis per unit.

III.5.6. InventorIes

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.7. trade reCeIvables

2008 Note Trade receivables 56 075 Trade receivables doubtful 4 352 Subtotal trade receivables 60 427 Impairment trade receivables doubtful -4 320 Total Financial instrument ‘trade receivables’ 56 107 II.1.

Outstanding Balance turnoverCustomer 1 4 195 6.9% 10 743 3.1%Customer 2 1 848 3.1% 3 173 0.9%Customer 3 1 763 2.9% 3 969 1.1%Customer 4 1 013 1.7% 3 378 1.0%Customer 5 996 1.6% 1 505 0.4%Other 50 611 83.8% 326 597 93.5%Total 60 427 100.0% 349.366 100.0%

Aging (past due but not impaired) Total Not due 30 days 60 days 90 days 120 days 150 days More than overdue overdue overdue overdue overdue 150 days overdue

Subtotal trade receivables 60 427 48 650 5 818 1 600 1 227 1 512 471 1 149

Impairment trade Opening Increase Decrease Write offs Exchange (Other) Closing receivables doubtful balance rate movements balance differences or adjustments

4 317 358 -270 -137 -7 59 4 320

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Trade receivables include EUR 60.4 million to be received from the sale of goods. Compared to last year, trade receivables decreased by EUR 17.1 million due to decreased business activity.

Less than 10% of the total outstanding is expressed in a foreign currency. The main foreign currencies are the USD and GBP.

An impairment is accounted for the estimated uncollecti-ble amounts of EUR 4.3 million. An impairment for trade receivables overdue between 30 days and 150 days and more is recorded based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience. This impairment is recorded in ‘sales & marketing expenses’ in the P&L by function.

As of 1/4/2005 the Group decided to cover itself for credit risk by concluding a stop loss credit insurance.

The average credit period on sales of goods is about 70 days. Generally no interest is charged on the overdue trade receivables except when legal procedures are started.

Before accepting any new customer, the Group uses an internal credit scoring system, based on internal and external information, to assess the potential customer’s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed continuously.

2007 Note Trade receivables 72 928 Trade receivables doubtful 4 597 Subtotal trade receivables 77 525 Amounts written off -4 317 Total Financial instrument ‘trade receivables’ 73 208 II.1.

Outstanding Balance turnoverCustomer 1 5 356 6.91% 12 590 3.31%Customer 2 2 396 3.09% 8 691 2.28%Customer 3 1 532 1.98% 2 534 0.67%Customer 4 1 288 1.66% 4 258 1.12%Customer 5 1 104 1.42% 5 796 1.52%Other 65 849 84.94% 346 482 91.10%Total 77 525 100.00% 380 350 100.00%

Aging (past due but not impaired) Total Not due 30 days 60 days 90 days 120 days 150 days More than overdue overdue overdue overdue overdue 150 days overdue

Subtotal trade receivables 77 525 62 719 6 179 1 370 1 159 404 78 5 617

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.8. other Current assets

2008 2007 Note Financial assets Advances 141 49 Insurance premiums receivable 110 94 Non-Financial assets VAT receivable 3 891 9 204 Income tax 3 476 1 893 Capital grants receivable 827 0 Other 0 275 Total other receivables 8 445 11 515 II.1. Other receivables consist primarily of VAT to be reclaimed amounting to EUR 3.9 million, pre-paid taxes amounting to EUR 3.5 million and

EUR 0.8 million capital grants receivable related to investments in Moeskroen.

Investments 2008 2007 Note

Other investments and deposits Options 288 288 Investments 288 288 II.1.

Cash and cash equivalents 2008 2007 Note

Cash at bank 11 468 5 970 Overnight deposits 2 962 1 468 At hand 115 41 Total cash and cash equivalents 14 545 7 479 II.1.

Deferred charges and accrued income 2008 2007 Note

Deferred charges 1 168 1 144 Other 124 110 Total deferred charges and accrued income 1 292 1 254 II.1.

The options are held to hedge (one-on-one basis) the obligations generated by the share option plan II as explained in ‘General Information on share based payment plans’. The options have an expiry date of 10 years starting from the date of issuing. The beneficiaries have the choice, after a freeze period, to sell their granted options, or to execute the options on expiry date. The book value of the options equals the fair value per 31.12.2008. The options were bought on january 14th, 2009, but a provision was set up at year-end.

Overnight deposits relate to deposits on at least 3 months, but shorter than 1 year. The book value of the investment reflects the estimated market value.

Deferred charges amounting to EUR 1.2 million consist primarily of pre-paid rent, insurance policies and IT maintenance contracts.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.9. pensIon lIabIlItIes DEFINED BENEFIT PLANS

2008 2007 Note Post-employment benefits (pension plans) 1 028 1 315 Other long term benefits (jubilee benefits) 114 142 Total 1 142 1 457 II.1.

The amounts recognised in the balance sheet are as follows: Present value of funded obligations 180 430 Fair value of plan assets -385 -394 Present value of unfunded obligations 1 256 1 598 (Surplus)/deficit 1 051 1 634 Unrecognised actuarial gains/(losses) -19 -313 Unrecognised past service cost -4 -6 Net liability recognized in balance sheet 1 028 1 315 of which liabilities 1 233 1 315 of which assets -205 0

The amounts recognised in profit or loss are as follows: Service cost 178 173 Interest cost 133 114 Expected return on plan assets -18 -17 Past service cost recognized 2 9 Actuarial losses (gains) recognized -145 -151 Effect of curtailment or settlement -272 -353 Benefit expense -122 -225 Changes in the present value of the defined benefit obligation are as follows: Opening defined benefit obligation 2 028 2 269 Service cost 178 173 Interest cost 133 114 Past service cost 0 9 Benefits paid -466 -49 Curtailment -272 -353 Settlement 0 0 Actuarial losses (gains) -145 -118 Liabilities assumed in a business combination 0 0 Currency translation changes -20 -17 Closing defined benefit obligation 1 436 2 028

Changes in the fair value of plan assets are as follows: Opening fair value of plan assets 394 381 Expected return 18 17 Actuarial gains and (losses) -27 -4 Contributions 466 0 Benefits paid -466 0 Assets acquired in a business combination 0 0 Settlement 0 0 Currency translation changes 0 0 Closing fair value of plan assets 385 394

DEFINED BENEFIT PLANS

The following net liabilities are recognized for post-employment and other long term benefits:

The plan assets represent investments in bonds. The expected 2009 contributions amount to 39 kEUR.

III.5.9. pensIon lIabIlItIes

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Changes in the fair value of plan assets are as follows:

2008 2007 Eurozone Indonesia Eurozone Indonesia discount rate 6.28% 12.00% 5.48% 10.00% expected rate of return 4.50% 4.50% future salary increase 2.50% 8.00% 2.50% 8.00% assumed retirement age 60 55 60 55 The funded status and experience adjustments are as follows:

2008 2007 Defined Benefit Obligation 1 436 2 028 Plan assets -385 -394 (Surplus)/deficit 1 051 1 634 Experience adjustments on plan assets -27 0 Experience adjustments on benefit obligation -40 18

Cost relative to IAS 19 provisions are booked under personnel expenses and allocated according the function of the personnel involved (cost of goods sold, sales and

PROVISIONS FOR PERSONNEL REMUNERATIONIn accordance with law and practice in each country, associated entities have either defined benefit schemes or defined contribution schemes.

defined contribution schemesContributions to defined contribution schemes are recorded as an expense when they are due.

defined benefit schemesIn defined benefit schemes, the amount on the balance sheet (the ‘net liability’) corresponds to the present value

marketing expenses, R&D expenses and administrative expenses). The interest component is recognised in the financial result.

of the gross liability, adjusted for unrecorded actuarial gains and losses, after deduction of the fair value of the scheme investments and unrecorded prior service costs.

The discounted value of the liability associated with defined pension rights and the assigned pension costs associated with the year of service and prior service pension costs are calculated by accredited actuaries using the projected unit credit method.

Defined benefit schemes mainly relate to pension liabilities in France, where such schemes are required by law.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.10. provIsIons

The carrying amount of the provisions reflects the net present value of future liabilities discounted at 8%.

The provisions for environmental issues consist mainly of a provision relating to the cleaning of polluted soils in Temse belonging to TIS NV and the land in Ardooie belonging to Sioen Coating NV. The risk in Temse originates in the period before the takeover. The risk in Ardooie was identified during the

periodical environmental check-up of the site. These provisions are mainly set up for more than one year and are discounted using the weighted average capital cost (8%) of the Group.

Provisions for other liabilities and charges mainly relate to social costs of ongoing restructuring processes by the coating division (EUR 1.5 million) and by the industrial applications division (EUR 0.5 million).

2008

Provisions for 2 214 686 -137 2 763 environmental issues Provisions for other 2 416 1 912 -1 730 -59 -12 2 526 liabilities and charges Total provisions 4 630 2 598 -1 867 -59 -12 0 0 5 289

More than 1 year Within 1 year Note Provisions for 1 034 1 728 environmental issues Provisions for other 459 2 068 liabilities and charges Total provisions 1 493 3 796 II.1.

More than 1 year Within 1 year Note Provisions for 1 764 450 environmental issues Provisions for other 837 1579 liabilities and charges Total provisions 2 601 2 029 II.1.

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2007

Provisions for taxation Provisions for 1 575 750 -111 2 214 environmental issues Provisions for other 2 227 914 -514 -203 -8 2 416 liabilities and charges Total provisions 3 802 1 664 -625 -203 -8 0 0 4 630

III.5.10. provIsIons

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.11. Interest bearIng loans

2008 Value at the end Within after Note of year one year 2 years 3 years 4 years 5 years 5 years

Bond 99 121 99 121 Bank loans 2 500 4 753 1 429 1 071 Finance leases II.1. 18 645 2 218 2 362 2 365 2 459 2 572 8 887 Other loans 519 260 134 125 Total interest bearing 120 786 7 232 3 925 3 561 2 459 2 572 108 008 loans long term

Current portion of amounts 4 753 payable after one year Credit institutions short term 38 607 Bank loans II.1. 43 361 Current portion of leasing 2 218 Leasing short term 32 Finance leases II.1. 2 250 Total interest bearing 45 611 loans short term 2007 Value at the end Within after Note of year one year 2 years 3 years 4 years 5 years 5 years

Bond 99 044 99 044 Bank loans 8 030 10 209 5 001 1 692 1 209 129 0 Finance leases II.1. 10 039 1 162 1 289 1 406 1 372 1 459 4 513 Other loans 3 3 Total interest bearing 117 117 11 371 6 290 3 098 2 581 1 588 103 671 loans long term

Current portion of amounts 10 209 payable after one year Credit institutions short term 25 190 Bank loans II.1. 35 400 Current portion of leasing 1 162 Leasing short term 37 Finance leases II.1. 1 199 Total interest bearing 36 599 loans short term

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Long-term interest bearing loans, including financial long-term leasing debts.

The weighted average interest rate of long-term debts in 2008 was 4.72%, compared to 4.76% in 2007. All long-term loans have a fixed interest rate.

On 14 March 2006, a EUR 100 million bond listed on Eurolist by Euronext Brussels was successfully issued, with a ten-year term and fixed coupon interest of 4.75%. To cover the interest rate on this bond issue, an IRS (Interest Rate Swap) was concluded on 20 December 2005. This IRS is described in the note on ‘financial instruments’, and designated as ‘cash flow hedging’. The effective combined interest rate on the EUR 100 million bond is 4.72%.

Sioen has no covenants on material loan agreements, except for general terms and conditions applicable to general finance agreements in Belgium.

Short-term interest bearing loans

As per 31/12/2008, short-term loans amounted to EUR 33.2 million. They consist of EUR 27.1 million of euro straight loans with a weighted average interest rate of 4.9% and a dollar loan of USD 8.5 million with a weighted average interest rate of 7.4%. There was also a tax prepayment loan of EUR 4.0 million which expires on 10 April 2009.

As per 31/12/2007, short-term loans amounted to EUR 21.3 million. They consisted of EUR 16.8 million of euro straight loans with a weighted average interest rate of 4.6% and a dollar loan of USD 5.0 million at 5.7%. There was also a tax prepayment loan of EUR 3.5 million which expires on 10 April 2008.

No securities have been issued for these financial debts. Most (approx. 90%) of the Group’s financial liabilities are centrally contracted and managed.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Leasing debts mainly relate to buildings (Ardooie and Moeskroen). New financial leases in 2008 relate to a sale and lease back operation for a new building in Moeskroen and buildings at Sioen Coating NV and Veranneman, which are referred to as new assets under construction (III.5.4). The interest inherent in the leases is fixed for the entire lease term. The average effective interest rate contracted is approximately 4.94% p.a. (2007 5.44% p.a.).

III.5.12. fInanCe leasIng debts

Obligations under finance leases Value at the end Within after 2008 of year one year 2 years 3 years 4 years 5 years 5 years

Leasing and other similar obligations LT 18 645 0 2 362 2 365 2 459 2 572 8 887 Current portion of leasing 2 218 2 218 Leasing short term 32 32 Obligations under finance leases 20 895 2 250 2 362 2 365 2 459 2 572 8 887 Minimum lease Present value of payments lease payments Lease payments due within one year 2 781 2 250 One - Two years 2 781 2 362 Two - Three years 2 781 2 365 Three - Five years 8 196 5 031 After 5 years 7 734 8 887 Total lease payments 24 273 20 895 Future financial charges 5 314 Present value of lease obligations 18 959 18 959 Less amount due for settlement within 12 months 2 301 Amount due for settlement after 12 months 18 594

Obligations under finance leases Value at the end Within after 2007 of year one year 2 years 3 years 4 years 5 years 5 years

Leasing and other similar obligations LT 10 039 61 1 228 1 406 1 372 1 459 4 513 Current portion of leasing 1 162 1 162 Leasing short term 37 37 Obligations under finance leases 11 238 1 260 1 228 1 406 1 372 1 459 4 513 Minimum lease Present value of payments lease payments Lease payments due within one year 2 143 1 260 One - Two years 1 735 1 228 Two - Three years 1 737 1 406 Three - Five years 3 064 2 831 After 5 years 4 954 4 513 Total lease payments 14 051 11 238 Future financial charges 2 611 Present value of lease obligations 10 767 10 767 Less amount due for settlement within 12 months 1 260 Amount due for settlement after 12 months 9 979

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.13. other aCCounts payable

Trade and other payables

2008 2007 Note

Trade payables 24 941 35 609 Credit notes to receive -1 160 -2 048 Advances 600 630 Total 24 381 34 191 II.1.

Other debts up to one year

2008 2007 Note

Current tax liabilities 954 440 II.1. Social debts 9 573 10 523 II.1. Other amounts payable 3 861 4 548 II.1. Accrued charges and deferred income 1 371 1 159 II.1. Total other debts up to one year 15 759 16 670 II.1.

Trade and other payables include outstanding amounts for trade purchases and current charges. Trade payables decreased compared with 2007, in line with the decreased activity during the last quarter of 2008 compared to the last quarter of 2007.

The trade payables are payable within a range of 30 to 60 days. The group has no major overdue positions. Foreign currencies in trade payables relate mainly to USD and represent less than 10% of the total trade payables.

The other amounts payable consist mainly of VAT payable and various other taxes.

III.5.13. other aCCounts payable

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.14. fInanCIal Instruments

Financial Derivatives 2008 2007 Notional Fair Value Notional Fair Value Value Value Forward sales contracts Forward sales contracts within 1 year Rights 0 0 0 0 Obligations 0 0 2 353 -41 IRS Forward 0 0 0 0

The Group manages a portfolio of derivatives to hedge against risks relating to exchange rate and interest rate positions arising as a result of operating and financial activities. It is the Group’s policy to avoid engaging in speculative transactions or transactions with a leverage effect and not to hold derivatives for trading purposes.

Interest riskThe Group’s interest risk is relatively limited, as the interest rate on all long-term loans is fixed. It is the group’s strategy to arrange a fixed interest rate for the long-term portion of debts, and to keep short-term debts floating. Thanks to an optimal portfolio of long-term and short-term debt financing, potential negative interest rate fluctuations are minimised.As per 31/12/2008, there was EUR 33.2 million of short-term financing at floating rates with a weighted average of 4.79%. A 5% increase in interest rates (24 basispoints), would impact the financial result with 91 kEUR more interest costs an annual basis.

In connection with the group’s refinancing, it was decided in December 2005 to enlist the support of the capital market via the issue of a EUR 100 million bond over ten years with fixed coupon interest. Because such an operation can easily take three months, and interest rates at the end of December 2005 were very attractive, Sioen concluded a ten-year IRS starting in April 2006, the presumed starting date of the bond. As this IRS can be regarded as effective cash flow hedging as per IAS39, the EUR 0.636 million negative market value fluctuation on 31/12/2005 of this IRS was deducted from equity.At 02/02/2006, the market value was up EUR 1.346 million, and it was realised following the hedge strategy at the moment of issuing of the bond. This received premium satisfies the conditions for cash flow hedging defined in

IAS39, and will be spread out over the term of the bond.The realized capital gain (EUR 1.346 million) was recogni-sed in equity and is being taken into income over the life of the bond (10 years).

Exchange rate riskIt is the Group’s policy to hedge against exchange risks arising from financial and operating activities centrally.The risks are limited by compensating for transactions in the same currency (‘natural hedging’), or by fixing exchange rates via forward contracts or options.

It is the Group’s policy to hedge against exchange risks arising from financial and operationg activities centrally. The risks are limited by compensating for transactions in the same currency (‘natural hedging’). Or by fixing exchange rates via forward contracts or options.The main currencies for the Group are GBP (inflow) and USD (outflow). In 2008, the GBP net inflow represents EUR 7.0 million (GBP 5.4 million) and the USD net outflow EUR 2.9 million (USD 4.4 million). As these volumes represent less than 10% of total net sales, the impact of changes in these exchange rates is limited.

Sensitivity analysisBased on the Group’s sensitivity analysis, an adverse change in the GBP/EUR and USD/EUR exchange rate by 1% would decrease the Group’s realized currency result by EUR 98 thousand.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Fixed Rate (EUR) Carrying Fair Amount value Bond 100 000 96 194 borrowing costs capitalised -879 0 Finance Leases 20 829 19 933 Bank loans 7 250 7 207 Total 127 201 123 334

Credit riskIn view of the relative concentration of credit risk (see note ‘trade receivables’). The company covers credit risk on trade receivables via a stop loss insurance with an own risk exposure of 500 kEUR. In addition, credit control strategies and procedures have been elaborated in order to monitor individual customers’ credit risk.

Liquidity riskIn order to guarantee liquidity and financial flexibility, the Sioen group has credit lines available to it to meet current and future financial needs. The Sioen group has total credit lines available to it of EUR 69.6 million. Of these EUR 33.2 million were used at 31/12/2008. Of this amount, EUR 27.1 million consisted of straight loans at a weighted average interest rate of 4.9%, and a USD 8.5 million straight loan with a weighted average interest rate of 7.4%. Regarding the maturity analysis of the interest bearing loans, we refer to note III.5.11.

Financial riskThe management determines its assessment on the basis of different realistically assessed parameters, such as future market expectations, sector growth rates, industry studies, economic realities, budgets and multi-year plans, expected profitability studies, etc. The most important elements within the group that are subject to this are: impairments, provisions and deferred tax items.

Fair valueFair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. In conformity with IAS 39 all derivatives are recognized at fair value in the balance sheet.

Non-derivative financial liabilitiesThe fair value of non-derivate financial liabilities is calcula-ted based on commonly-used valuation techniques (i.e. net present value of future principal and interest cash flows discounted at market rate). These are based on market inputs from reliable financial information providers. Fair values determined by reference to prices provided by reliable financial information providers are periodically checked for consistency against other pricing sources.

As shown in the fair value analysis, Sioen Industries is now in an overall favourable position concerning interest rate conditions compared to the actual fair values of the loans.

Capital managementThe equity structure of the Sioen Group is managed with the main objectives of:p protecting the equity structure so as to ensure continu-

ous business operations resulting in continuous sharehol-der value, and benefits for other stakeholders;

p the payment of an appropriate dividend to shareholders.

The Group’s capital is formed in accordance with the risk, which changes with economic developments and the risk profile of the underlying assets. The Sioen group can change the dividend to shareholders, issue new shares or sell assets in order to maintain or change the capital structure.

The Board of Directors of Sioen Industries views equity together with the 10-year bond loan (cf. interest bearing loans III.5.11) as permanent capital. At 31/12/2008 equity and the bond loans represented respectively 38.3% and 26.7% and together 65.0% of the balance sheet total.

Financial InstrumentsInterest bearing loans

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.15. deferred tax

2008 2007 2008 2007 Note deferred tax assets deferred tax liabilities

Intangible fixed assets 1 118 545 1 877 1 792 Tangible fixed assets 3 178 2 894 17 881 16 847 Inventories 1 563 1 688 Receivables 762 762 Other assets Pension liabilities 473 648 Other provisions 780 518 Other liabilities 204 102 Conversion differences 156 2 396 2 433 Hedging reserves 358 398 Undistributed reserves 1 2 095 Tax losses carried forward 12 578 9 662 Total 20 658 16 976 22 513 23 565

Non recognition of deferred tax receivable -10 709 -6 829 Netting -6 103 -4 702 -6 103 -4 702 Total 3 846 5 445 16 410 18 863 II.1.

The value of carried forward tax losses arranged by expiry date One year Two years Three years 8 260 Four years 7 806 8 260 Five years and later 2 019 7 806 No expiry date 25 160 16 590

Unrecognised carried forward tax losses 32 628 20 195 Unrecognised deferred tax on undistributed reserves 2 094 295

Reconciliation of movement of deferred tax Net tax liability as per 31 December 2007 13 418 Net tax liability as per 31 December 2008 12 564 Difference -854 Deferred tax as shown in the P&L -851 Deferred tax effect through equity -32 Deferred tax acquired via business 0 combinations Deferred tax currency translation effect 29

Deferred tax assets which do not appear to be collectable in the near future are not recognised. In this assessment manage-ment takes account of budgets and multi-year planning.

Major deferred tax assets on tax losses carryforward are relative to Roland International BV and Roland Poland. In 2007, a EUR 1.8 million valuation allowance on tax losses of Roland International BV was recognized. Based upon business plans an asset was recognized using estimated tax profits over 9 years. In 2008 the tax asset has been fully derecognized considering current business result and forecast. There is no taxable result over the foreseeable future (5 years). In Roland Poland there is only a partly recognition of tax losses, mainly originating from the 2008 result). The going forward transfer pricing (cost plus basis) should allow to recover tax losses recognized.

The company recognizes deferred tax liabilities on undistributed reserves in affiliates unless there is a firm commitment not to distribute reserves from that particular affiliate in the foreseeable future. Management consideres that reserves will not be distributed to the parent com-pany unless this could be done at a zero tax rate.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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III.5.16. aCquIsItIons and dIsposals of Interests

EFFECTS OF ACQUISITIONS AND SALES OF INVESTMENTS

2008 There were no acquisitions in 2008. 2007 Divestment Granulates EMB Sale price Granulate business 847 Sale fixed assets 49 Liability sales related provision -227 Stock write off -428

Receipt in Cash 896 Non Cash items -655 Gain realised on the transaction 241 Acquisition Fillink Business Book value Adjustments Fair value Non current assets 215 1 285 1 500 Intangible and tangible fixed assets 215 1 285 1 500

Current assets 1 872 -319 1 553 Inventories 319 -319 Debtors 1 440 1 440 Other debtors 113 113

Non current liabilities 355 355 Provision Pensions Deferred tax liabilities Long term financial debt 355 355

Current liabilities 2 598 184 2 781 Creditors 2 180 84 2 264 Other creditors 418 100 517 Total net assets -865 -718 -83 Goodwill on acquisition 152

Paid in cash 206 Cash and banks acquired 137 137

Net cash paid 69

EMB (division chemicals) realized an exchange deal on 1 October 2007, in which the chips (granules) department was sold and a pigment paste-customer portfolio was acquired (see intangible assets), in order to align the business with its core competence. EMB recorded the gain of EUR 0.2 million in ‘Other operating Income’ in 2007.The sales of this chips department represented in 2006 EUR 5.1 million and in 2007 EUR 4.7 million (January – October 2007).

On January 18 2007 Fillink Technologies SA was acquired by EMB. Fillink specializes in inks for wide and superwide format digital printers. Fillink distributes eco-solvent, solvent and UV inks through a selected network of distributors. These quality products are very well positioned in the market thanks to the know how and market intelligence of the company. Fillink’s experience with unique product formulations and wide market knowledge are real added value for the chemicals division. The sales of Fillink were EUR 2.2 million in 2006 and EUR 4.0 million in 2007.

III.5.16. aCquIsItIons and dIsposals of Interests

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Iv. other

IV.1. operatIng lease arrangements

2008 2007

Amounts recognised in income 1 218 1 150

Payments due within one year 1 197 1 179 Between one and five years 1 604 1 092 Over five years 62 10 Minimal future payments 2 863 2 282 These leases relate mainly to vehicles, small equipment and office equipment.

IV.2. events after balanCe sheet date

In the division Industrial Applications, an additional restructuring process, costs estimated at approximately EUR 0.6 million, has been initiated at the end of March. No other significant events have happened after balance sheet date.

IV.3. off balanCe sheet Items 2008 within 1 year Note

Commitments due to hedging of foreign currencies 0 0 III.5.4 Commitments for the acquisition of intangible and tangible assets 3 350 3 350 III.5.4

2007 within 1 year

Commitments due to hedging of foreign currencies (related to GBP) 2 353 2 353 Commitments for the acquisition of intangible and tangible assets 7 688 7 688

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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vI. statutory annual accounts

IV.4. transaCtIons wIth related partIes Nature of transaction 2008

Recticel Group Sale 1 444 Recticel Group Purchase 285 INCH Sale 1 388 SVB Purchase 220

Nature of transaction 2007

Recticel Group Sale 1 764 Recticel Group Purchase 222 INCH Sale 1 436 SVB Purchase 227 These transactions are done on an arm’s length basis.Other transactions with related parties other than directors are not included, given the negligible amount (under EUR 100 000). With regard to directors’ remuneration, we refer to section IV.8.

IV.5. staff Country 2008 2007 Belgium 899 988 China 15 16 Germany 6 11 France 291 361 Ireland 33 33 Indonesia 2 222 1 975 Netherlands 27 27 Poland 338 587 Portugal 25 25 Tunesia 757 752 UK 26 32 USA 16 22 Ukraine 21 40 Grand Total 4 676 4 869

Blue Collar 3 917 4 125 White Collar 759 744 Grand Total 4 676 4 869

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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IV.6. audIt and non audIt servICes provIded by the statutory audItor and hIs networK 2008 Deloitte Audit fees 282 000 Other assurance services 59 065 Tax services 10 000

IV.7. ContIngent assets and lIabIlItIes

A number of commercial disputes are pending, albeit with a limited value in dispute.

A contingent asset amounting to EUR 0.4 million is related to the apparel division.

The industrial applications division is currently facing a quality claim in France, which could reach EUR 3.0 million. However, the court verdict in first instance was in favour of Sioen Industries.

There is a possible exposure related to import duties in Tunesia with a theoretical maximum risk of EUR 1.7 million. Voluntary regularisation has been initiated by management.

The coating division is currently facing a contingent liability which could reach EUR 0.3 million. However, the court verdict in first instance was in favour of Sioen Industries.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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IV.8. remuneratIon of the dIreCtors and the exeCutIve management

In 2008 the following fees were paid to the members of the board of directors and the executive management:

p Non-executive and independent directors, as well as the members of the executive management in their capacity as director: Mr. Jean-Jacques Sioen EUR 20 000 M.J.S. Consulting b.v.b.a. EUR 20 000 Mrs. Jacqueline Sioen-Zoete EUR 20 000 D-Lance b.v.b.a. EUR 20 000 P. Company b.v.b.a. EUR 20 000 Pol Bamelis n.v. EUR 22 250 Revam b.v.b.a. EUR 29 000 Louis Verbeke e.b.v.b.a. EUR 26 000 K.E.M.P. n.v. EUR 8 667 Vean n.v. EUR 21 500 Mr. Luc Vandewalle EUR 26 000

p Mrs. Michèle Sioen received in 2008, as CEO, besides her remuneration as a member of the Board of Directos, a fixed remuneration of EUR 432 500. She received a variable remuneration (base calcula-tion 2007) for an amount of EUR 124 260. For 2008, the CEO abandons the variable part of her remuneration.

p The fixed remunerations paid to the executive management*, including directors in their capacity as members of the executive management, amoun-ted to EUR 2 188 775 (excluding CEO). Variable remuneration received (base calculation 2007) for an amount of EUR 186 357. For 2008, the executive management abandons the variable part of their remuneration.

p In 2008 no shares in Sioen Industries, share options or other rights for the acquisition of shares in Sioen Industries were granted to the CEO and the other members of the executive management. There are no specific recruitment or golden handshake agreements with the members of the executive management.

* The executive management consists of executive directors and members of the management committee.

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v. statutory auditor’s report

statutory auditor’s report to the shareholders’ meeting on the consolidated financial statements for the year ended 31 december 2008

Free translation – the original report is in Dutch

To the shareholders

As required by law and the company’s articles of associa-tion, we are pleased to report to you on the audit assign-ment which you have entrusted to us. This report includes our opinion on the consolidated financial statements together with the required additional comment.

unqualified audit opinion on the consolidated financial statementsWe have audited the accompanying consolidated financial statements of SIOEN INDUSTRIES NV (“the company”) and its subsidiaries (jointly “the group”), prepared in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Those consolidated financial statements comprise the consolidated balance sheet as at 31 December 2008, the consolidated income statement, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The consolidated balan-ce sheet shows total assets of 371 741 (000) EUR and the consolidated income statement shows a consolidated profit (group share) for the year then ended of 3 406 (000) EUR.

The financial statements of several significant entities included in the scope of consolidation which represent total assets of 46 679 (000) EUR and a turnover of 50 244 (000) EUR have been audited by other auditors. Our opinion on the accompanying consolidated financial statements, insofar as it relates to the amounts contributed by those entities, is based upon the reports of those other auditors.

The board of directors of the company is responsible for the preparation of the consolidated financial statements. This responsibility includes among other things: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstate-ment, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circum-stances.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with legal require-ments and auditing standards applicable in Belgium, as issued by the “Institut des Reviseurs d’Entreprises/Instituut der Bedrijfsrevisoren”. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. In accordance with these standards, we have performed procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstate-ment of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we have considered internal control relevant to the group’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of

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the group’s internal control. We have assessed the basis of the accounting policies used, the reasonableness of accounting estimates made by the company and the presentation of the consolidated financial statements, taken as a whole. Finally, the board of directors and responsible officers of the company have replied to all our requests for explanations and information. We believe that the audit evidence we have obtained, together with the reports of other auditors on which we have relied, provides a reasona-ble basis for our opinion.

In our opinion, and based upon the reports of other auditors, the consolidated financial statements give a true and fair view of the group’s financial position as of 31 December 2008, and of its results and its cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the EU and with the legal and regulatory requirements applicable in Belgium.

Additional commentThe preparation and the assessment of the information that should be included in the directors’ report on the consolida-ted financial statements are the responsibility of the board of directors.

Our responsibility is to include in our report the following additional comment which does not change the scope of our audit opinion on the consolidated financial statements:

p The directors’ report on the consolidated financial statements includes the information required by law and is in agreement with the consolidated financial state-ments. However, we are unable to express an opinion on

the description of the principal risks and uncertainties confronting the group, or on the status, future evolu-tion, or significant influence of certain factors on its future development. We can, nevertheless, confirm that the information given is not in obvious contradiction with any information obtained in the context of our appointment.

Kortrijk, 18 March 2009

The statutory auditor

DELOITTE Bedrijfsrevisoren

BV o.v.v.e. CVBA

Represented by

Dirk Van Vlaenderen Kurt Dehoorne

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Condensed balance sheet of Sioen Industries n.v. after appropriation of profit

December 31 (000) EUR 2008 2007

Fixed assets 53 292 61 584 Intangible fixed assets 8 863 7 505 Tangible fixed assets 1 159 1 004 Financial fixed assets 43 270 53 075 Currents assets 190 169 188 049 Amounts receivable within one year 184 749 187 023 Cash at hand and in bank 5 260 872 Deferred charges and accrued income 161 154

Total assets 243 461 249 633

Capital and reserves 80 893 82 705 Capital 46 000 46 000 Legal reserves 4 357 4 352 Profit carried forward 30 536 32 353

Creditors 162 568 166 929 Amounts payable after one year 101 657 106 312 Amounts payable within one year 59 256 54 983 Accrued charges and deferred income 1 656 5 634

Total liabilities 243 461 249 633

vI. statutory annual accounts of sioen industries nV

The statutory annual accounts of the parent company Sioen Industries n.v. are shown below in condensed form. In June 2009, the annual report and annual accounts of Sioen Industries n.v. and the auditor’s report will be filed with the National Bank of Belgium in accordance with Articles 98-102 of the Companies Act.These reports are available on request at the following address: Sioen Industries n.v. – Fabriekstraat 23 – 8850 Ardooie.

The statutory auditor has issued an unqualified opinion.

In accordance with article 523 of the Company Code, the Board of Directors has mentioned all transactions done with SVB Project NV in which Mr. Jean-Jacques Sioen, president of the Board of Directors, had a conflict of interest. We refer to the section Corporate Governance in the consolidated annual report for the related paragraphs from the minutes of the Board of Directors.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Condensed income statement of Sioen Industries n.v.

December 31 (000) EUR 2008 2007

Operating income 7 677 7 188 Sales 7 524 6 912 Other operating income 153 277

Operating charges -9 175 -8 363 Services and other goods 3 587 3 280 Renumeration 4 041 3 726 Depreciation and amounts written off 1 530 1344 Other operating charges 18 14

Operating result -1 498 -1 175 Financial income 26 363 21 736 Financial charges -14 218 -8 110

Financial result 12 145 13 626

Profit or loss on ordinary activities 10 647 12 452

Extraordinary result -10 498 -711

Profit or loss before tax 149 11 741

Income taxes -49 -25

Profit for the financial year 100 11 716

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Overview of the shareholders

Notifier Date of Number of Percentage with notification shares regard to total number of shares ‘BT Pension Scheme Trustees Limited’ 28 May 2008 726 320 3.395% Sihold NV(1) and companies/parties 30 January 2006 12 906 212 60.33% under the influence of the family Sioen ‘Stichting Shell Pensionfonds’ 12 October 2005 726 320 3.395% Total notifications 14 358 852 67.12%

(1) Sihold N.V. is controlled by Sicorp N.V., which is controlled in turn by the Dutch foundation Stichting Administratiekantoor Midapa.

Activity of Sioen IndustriesThe function of Sioen Industries is essentially to outline the strategy of the four divisions. It also appoints the management of the Group companies and supports the Group companies in the areas of personnel management, financial and treasury management, budgeting and controlling, MIS and IT, and legal affairs.

CommentsThe turnover of the holding company increased with 8.9% to EUR 7.5 million. In 2008 the operating loss amounted to EUR 1.5 million, compared with an operating loss in 2007 of EUR 1.1 million. Financial result decreased from EUR 13.6 million in 2007 to EUR 12.1 million in 2008 due to the less value of short term receivables related to Roland International BV, partly compensated by the higher dividend payments from the subsidiaries. All participating interests have been recorded at book value. Extraordinary result for the year 2008 decreased by EUR 9.8 million compared to 2007 due to the less value of financial assets related to Roland International BV.

Accounting principlesThe accounting principles and translation rules applied to the statutory annual accounts of Sioen Industries are in accordance with Belgian Generally Accepted Accounting Principles.

Statement of capitalIn accordance with Articles 1 to 4 of the Act of March 2, 1989 concerning the disclosure of important holdings in listed companies and regulating take-over bids, the applicable quotas were set at, one the one hand, 5 percent or a multiple thereof and on the other hand at 3 percent or a multiple thereof. (Article 8 of the Articles of Association). In accordance with Article 4 of the Act of March 2, 1989, the following notificati-ons of shareholdings in the company were received.

III.1.1. segment InformatIon

III.1. KEY aCCounting rulEsIII. notes to the consolidated financial

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Proposals to the Annual Meeting of Sioen Industries n.v. of April 24, 2009

The board of directors of Sioen Industries proposes to the annual meeting to approve the annual accounts at December 31, 2008 and to consent to the appropria-tion of profit.

The profit for the financial year ended is 99 882 EUR, compared to a profit of 11 716 461 EUR for the financial year 2007. The profit brought forward from the previous financial year is 32 352 833 EUR. The profit available for appropriation is consequently 32 452 715 EUR.

The board of directors proposes to appropriate the profit available for appropriation of 32.452.715 EUR as follows:

The proposed net dividend per share is calculated as follows:

(1) Gross dividend in relation to the share of the Group in the consolidated result

If this proposal is accepted, the net dividend of 0.0600 EUR per share will be made payable as from May 11, 2009 onwards at the counters of Dexia Bank, ING Bank, Fortis Bank, Bank Degroof and KBC Bank on presentation of coupon n°11.

(in EUR) Gross dividends for the 21 391 070 shares -1 711 285.77 Directors’ fees -200 000.00 Transfer to the legal reserves -4994.13 Profit to be carried forward 30 536 435.12

(in EUR) Net dividend per share 0.0600 Withholding tax 25/75 0.0200 Gross dividend per share 0.0800 Pay-out ratio (1) 50.25%

vII. Proposals to the annual meeting

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addresses

COATING

SIOEN COATING NV Fabriekstraat 23 B-8850 Ardooie België BTW BE 402.753.106 RPR 0402.753.106 Brugge T +32 51 74 09 00 F +32 51 74 09 64 sioline@sioen.be

SAINT FRERES SAS 4 route de Ville BP 1F-80420 Flixecourt France TVA FR 76408448850 RCS AMIEN S B 408 448 850 T +33 322 51 51 45 F +33 322 51 51 49 sfe@sioen.com

SIOEN COATING DISTRIBUTION NV Fabriekstraat 23 B-8850 Ardooie België BTW BE 436.241.167 RPR 0436.241.167 Brugge T +32 51 74 09 00 F +32 51 74 09 64 sioline@sioen.be

SIOEN FABRICS SA Zoning Industriel du Blanc Ballot Avenue Urbino 6B-7700 Mouscron Belgique TVA BE 458.801.684 RPM 0458.801.684 Tournai

(Coating/Weaving/Calendering) T +32 56 85 68 80 F +32 56 34 61 31 sioenfabrics@sioen.be

T +32 56 85 01 40 F +32 56 85 01 49 weaving@sioen.be

SIOEN FIBRES SA - extrusion Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique TVA BE 463.789.464 RPM 0463.789.464 Tournai T +32 56 48 12 70 F +32 56 48 12 85 fibres.extrusion@sioen.be

SIOEN COATED FABRICS (SHANGHAI) TRADING CO. LTD Room O, Floor 15, Hengji Building No 99, T +86 21 63 84 25 21 F +86 21 63 84 27 39 sioen@online.sh.cn

Huaihai Road (East) 200021 Shanghai P.R. of China

SIOFAB SA Indústria de Revestimentos Têxteis Rua da Indústria PT SOB O N° 4641 NIF 505.046.644 T +351 252 87 47 14 F +351 252 94 29 68 siofab@net.sapo.pt

-4795-074 Vila das Aves Santo Tirso Portugal Santo Tirso

TIS NV Driehoekstraat 2A B-9451 Haaltert (Kerksken) België BTW BE 405.085.064 RPR 0405.085.064 Aalst T +32 53 85 92 20 F +32 53 85 92 56 tis@sioen.be

VERANNEMAN TECHNICAL TEXTILES NV Fabriekstraat 31 B-8850 Ardooie België BTW BE 429.387.623 RPR 0429.387.623 Brugge T +32 51 24 81 70 F +32 51 22 61 68 info@veranneman.be

PENNEL AUTOMOTIVE SAS 310 Rue d’Alger F-59100 Roubaix France TVA FR 53448273615 RCS Roubaix-Tourcoing B 448 273 615 T +33 320 76 21 10 F +33 320 76 21 12 automotive@pennel.sioen.com

CHEMICALS

EUROPEAN MASTER BATCH NV - E.M.B. NV / Fillink Rijksweg 15 B-2880 Bornem België BTW BE 421.485.289 RPR 0421.485.289 Mechelen T +32 3 890 64 00 F +32 3 899 26 03 emb@sioen.be

INDUCOLOR SA Chemin Preuscamps 12 B-7822 Ath (Meslin-L’Evêque) Belgique TVA BE 400.685.125 RPM 0400.685.125 Tournai T +32 68 25 02 30 F +32 68 55 26 02 inducolor@sioen.be

RICHARD SAS Rue lavoisier - zac novo - 59160 lomme T +33 320 00 18 88 F +33 320 00 18 80 sa.richard@colorants-richard.com

ASTRA COLORANTS SA 20 Avenue maréchal de lattre de tassigny - 69330 meyzieu T + 33 478 31 58 02 F +33 478 04 02 57 contact@astra-colorants.com

APPAREL

SIOEN NV Fabriekstraat 23 B-8850 Ardooie - België BTW BE 478.652.141 RPR 0478.652.141 Brugge T +32 51 74 08 00 F +32 51 74 09 62 customer@sioen.be

CONFECTION TUNISIENNE DE SECURITE SA – C.T.S. SA 5 Impasse n° 2 Rue 8612 – (Z.I.) La Charguia TN -2035 Tunis Tunisie Code TVA 03030 V / A / M / 000 RC B 133171996 T +216 71 77 34 77 F +216 71 78 40 47 cts@sioen.com

GAIRMEIDI CAOMHNAITHE DHUN NA NGALL TEORANTA LTD (Donegal Protective Clothing Ltd –Sioen Ireland) - VAT IE 4621355M Company Nr. 78212 T +353 74 953 11 69 F +353 74 953 15 91 ireland@sioen.ie

Industrial Estate Bunbeg Co. Donegal Ireland

MULLION MANUFACTURING LTD 44 North Farm Road South Park Industrial Estate Scunthorpe North Lincolnshire VAT GB 365.1873.34 Company Nr. 1871440 T +44 1724 28 00 77 F +44 1724 28 01 46 mullion@sioen.com

DN17 2A Y - UK

SIOEN FRANCE-DIVISION SIP PROTECTION Pavillon Hermès 110 avenue Gustave Eiffel ZI La Coupe F-11100 Narbonne France TVA FR 49300774767 RCS Narbonne B 300 774 767 T +33 4 68 42 35 15 F +33 4 68 42 27 43 sip-protection@sip-protection.com

P.T. SIOEN INDONESIA NUSANTARA BONDED ZONE (KBN) MARUNDA - Jalan Pontianak Block C.2-03 NPWP 1.068.001.5-052 T +62 21 44853222 F +62 21 44853444 info.marunda@sioenasia.com

Jakarta 14120 - Indonesia

PT SUNGINTEX Jalan Raya Narogong Km 12,5 Pangkalan IV Desa Cikiwul Kec. Bantar Gebang Bekasi NP WP 1.068.012.2-407 T +62 21 825 22 22 F +62 21 825 44 44 indonesia@sioen.com

Barat 17310 Indonesia

SIOEN FIBRES SA – distribution Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique TVA BE 463.789.464 RPM 0463.789.464 Tournai T +32 56 85 54 30 T +32 56 34 66 10 distribution@sioen.be

SIOEN FRANCE SAS Pavillon Hermès 110 avenue Gustave Eiffel ZI La Coupe F-11100 Narbonne France TVA FR 49300774767 RCS Narbonne B 300 774 767 T +33 4 68 42 35 15 F +33 4 68 42 27 43 sioen.france@sioen.com

SIOEN TUNISIE SA 7 Impasse N° 2 Rue 8612 – (Z.I.) La Charguia TN -2035 Tunis Tunisie Code TVA 614715 S / A / M / 000 RC B 19711998 T +216 71 80 75 47 F +216 71 80 92 62 sioen.tunisie@sioen.com

SIOEN ZAGHOUAN SA Zone Industrielle de Zaghouan TN -1100 Zaghouan Tunisie Code TVA 747023 F / A / M / 000 RC B 177132000 T +216 72 68 06 60 F +216 72 68 26 60 sioen.zaghouan@sioen.com

SIOEN FRANCE DIVISION VIDAL PROTECTION Zone Industrielle Le Passage Jean-Rostand BP167 F 81300 Graulhet T +33 5 63 34 52 46 F +33 5 63 34 69 99 vidal@sioen.com

SIOEN USA Inc. c/o Flom, French & Goodwin, L.L.C. 675 Line Road Building 4, Suite B Aberdeen, T +1 732 441 12 50 F +1 732 441 12 53 cgoodwin@FFG-CPA.com

NJ 07747 USA

INDUSTRIAL APPLICATIONS

COATEX NV Industriezone Sappenleen Sappenleenstraat 3-4 B-8970 Poperinge België BTW BE 434.140.425 RPR 0434.140.425 Ieper T +32 57 34 61 60 F +32 57 33 35 23 coatex@sioen.be

SAINT FRERES CONFECTION SAS 2 route de Ville BP 37 F-80420 Flixecourt France TVA FR 44408449098 RCS Amiens 408 449 098 T +33 322 51 51 70 F +33 322 51 51 79 sfc@sioen.com

SIOEN NORDIFA SA Rue Ernest Solvay 181 B-4000 Liège Belgique TVA BE 474.276.154 RPM 0474.276.154 Liège T +32 4 252 21 50 F +32 4 253 04 25 nordifa@sioen.be

ROLAND INTERNATIONAL B.V. Kasteellaan 33 NL -5932AE Tegelen Nederland BTW NL 003812522 B01 HR Venlo 12011983 T +31 77 376 92 92 F +31 77 373 69 66 info@roland-int.org

ROLTRANS GROUP AMERICA INC. 3212 Pinewood Drive Arlington, Texas 76010 USA 75-1994308 Delaware T +1 817 607 00 80 F +1 817 607 00 88 info@roltrans.com

Corporation # 2044811

ROLAND PLANEN GMBH Am Zirkel 8 49757 Werlte Deutschland Ust-id.Nr.: DE 812873033 Osnabrück HR B 1222 96 T +49 59 51 99 55 70 F +49 59 51 99 55 71 info@roland-int.org

ROLTRANS GROUP POLSKA SP.Z.O.O. Ul. Nadbrzezna 1 PL -62500 Konin Polska NIP 665-100-18-19 RHB 1210 T + 48 632 44 39 25 F +48 632 44 39 21 info@roland-int.org

ROLAND UKRAINE LLC Kievskaya 64-A Rivne Ukraine T +38 362 28 65 39 F +38 362 28 65 39 roland@rivne.com

ROLAND TILTS UK Ltd Unit 1 Usher Street Off Wakefi eld Road Bradford BD4 7DS UK VAT GB 311746186 Company Nr 1380441 T +44 1274 39 16 45 F +44 1274 30 51 56 info@roland-int.org

Sioen Industries - Fabriekstraat 23 - B-8850 Ardooie - BelgiumT +32 51 74 09 00 - F +32 51 74 09 64 - corporate@sioen.be - BTW BE 441.642.780 - RPR 0441.642.780 Brugge

- 79 -

COATING

SIOEN COATING NV Fabriekstraat 23 B-8850 Ardooie België BTW BE 402.753.106 RPR 0402.753.106 Brugge T +32 51 74 09 00 F +32 51 74 09 64 sioline@sioen.be

SAINT FRERES SAS 4 route de Ville BP 1F-80420 Flixecourt France TVA FR 76408448850 RCS AMIEN S B 408 448 850 T +33 322 51 51 45 F +33 322 51 51 49 sfe@sioen.com

SIOEN COATING DISTRIBUTION NV Fabriekstraat 23 B-8850 Ardooie België BTW BE 436.241.167 RPR 0436.241.167 Brugge T +32 51 74 09 00 F +32 51 74 09 64 sioline@sioen.be

SIOEN FABRICS SA Zoning Industriel du Blanc Ballot Avenue Urbino 6B-7700 Mouscron Belgique TVA BE 458.801.684 RPM 0458.801.684 Tournai

(Coating/Weaving/Calendering) T +32 56 85 68 80 F +32 56 34 61 31 sioenfabrics@sioen.be

T +32 56 85 01 40 F +32 56 85 01 49 weaving@sioen.be

SIOEN FIBRES SA - extrusion Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique TVA BE 463.789.464 RPM 0463.789.464 Tournai T +32 56 48 12 70 F +32 56 48 12 85 fibres.extrusion@sioen.be

SIOEN COATED FABRICS (SHANGHAI) TRADING CO. LTD Room O, Floor 15, Hengji Building No 99, T +86 21 63 84 25 21 F +86 21 63 84 27 39 sioen@online.sh.cn

Huaihai Road (East) 200021 Shanghai P.R. of China

SIOFAB SA Indústria de Revestimentos Têxteis Rua da Indústria PT SOB O N° 4641 NIF 505.046.644 T +351 252 87 47 14 F +351 252 94 29 68 siofab@net.sapo.pt

-4795-074 Vila das Aves Santo Tirso Portugal Santo Tirso

TIS NV Driehoekstraat 2A B-9451 Haaltert (Kerksken) België BTW BE 405.085.064 RPR 0405.085.064 Aalst T +32 53 85 92 20 F +32 53 85 92 56 tis@sioen.be

VERANNEMAN TECHNICAL TEXTILES NV Fabriekstraat 31 B-8850 Ardooie België BTW BE 429.387.623 RPR 0429.387.623 Brugge T +32 51 24 81 70 F +32 51 22 61 68 info@veranneman.be

PENNEL AUTOMOTIVE SAS 310 Rue d’Alger F-59100 Roubaix France TVA FR 53448273615 RCS Roubaix-Tourcoing B 448 273 615 T +33 320 76 21 10 F +33 320 76 21 12 automotive@pennel.sioen.com

CHEMICALS

EUROPEAN MASTER BATCH NV - E.M.B. NV / Fillink Rijksweg 15 B-2880 Bornem België BTW BE 421.485.289 RPR 0421.485.289 Mechelen T +32 3 890 64 00 F +32 3 899 26 03 emb@sioen.be

INDUCOLOR SA Chemin Preuscamps 12 B-7822 Ath (Meslin-L’Evêque) Belgique TVA BE 400.685.125 RPM 0400.685.125 Tournai T +32 68 25 02 30 F +32 68 55 26 02 inducolor@sioen.be

RICHARD SAS Rue lavoisier - zac novo - 59160 lomme T +33 320 00 18 88 F +33 320 00 18 80 sa.richard@colorants-richard.com

ASTRA COLORANTS SA 20 Avenue maréchal de lattre de tassigny - 69330 meyzieu T + 33 478 31 58 02 F +33 478 04 02 57 contact@astra-colorants.com

APPAREL

SIOEN NV Fabriekstraat 23 B-8850 Ardooie - België BTW BE 478.652.141 RPR 0478.652.141 Brugge T +32 51 74 08 00 F +32 51 74 09 62 customer@sioen.be

CONFECTION TUNISIENNE DE SECURITE SA – C.T.S. SA 5 Impasse n° 2 Rue 8612 – (Z.I.) La Charguia TN -2035 Tunis Tunisie Code TVA 03030 V / A / M / 000 RC B 133171996 T +216 71 77 34 77 F +216 71 78 40 47 cts@sioen.com

GAIRMEIDI CAOMHNAITHE DHUN NA NGALL TEORANTA LTD (Donegal Protective Clothing Ltd –Sioen Ireland) - VAT IE 4621355M Company Nr. 78212 T +353 74 953 11 69 F +353 74 953 15 91 ireland@sioen.ie

Industrial Estate Bunbeg Co. Donegal Ireland

MULLION MANUFACTURING LTD 44 North Farm Road South Park Industrial Estate Scunthorpe North Lincolnshire VAT GB 365.1873.34 Company Nr. 1871440 T +44 1724 28 00 77 F +44 1724 28 01 46 mullion@sioen.com

DN17 2A Y - UK

SIOEN FRANCE-DIVISION SIP PROTECTION Pavillon Hermès 110 avenue Gustave Eiffel ZI La Coupe F-11100 Narbonne France TVA FR 49300774767 RCS Narbonne B 300 774 767 T +33 4 68 42 35 15 F +33 4 68 42 27 43 sip-protection@sip-protection.com

P.T. SIOEN INDONESIA NUSANTARA BONDED ZONE (KBN) MARUNDA - Jalan Pontianak Block C.2-03 NPWP 1.068.001.5-052 T +62 21 44853222 F +62 21 44853444 info.marunda@sioenasia.com

Jakarta 14120 - Indonesia

PT SUNGINTEX Jalan Raya Narogong Km 12,5 Pangkalan IV Desa Cikiwul Kec. Bantar Gebang Bekasi NP WP 1.068.012.2-407 T +62 21 825 22 22 F +62 21 825 44 44 indonesia@sioen.com

Barat 17310 Indonesia

SIOEN FIBRES SA – distribution Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique TVA BE 463.789.464 RPM 0463.789.464 Tournai T +32 56 85 54 30 T +32 56 34 66 10 distribution@sioen.be

SIOEN FRANCE SAS Pavillon Hermès 110 avenue Gustave Eiffel ZI La Coupe F-11100 Narbonne France TVA FR 49300774767 RCS Narbonne B 300 774 767 T +33 4 68 42 35 15 F +33 4 68 42 27 43 sioen.france@sioen.com

SIOEN TUNISIE SA 7 Impasse N° 2 Rue 8612 – (Z.I.) La Charguia TN -2035 Tunis Tunisie Code TVA 614715 S / A / M / 000 RC B 19711998 T +216 71 80 75 47 F +216 71 80 92 62 sioen.tunisie@sioen.com

SIOEN ZAGHOUAN SA Zone Industrielle de Zaghouan TN -1100 Zaghouan Tunisie Code TVA 747023 F / A / M / 000 RC B 177132000 T +216 72 68 06 60 F +216 72 68 26 60 sioen.zaghouan@sioen.com

SIOEN FRANCE DIVISION VIDAL PROTECTION Zone Industrielle Le Passage Jean-Rostand BP167 F 81300 Graulhet T +33 5 63 34 52 46 F +33 5 63 34 69 99 vidal@sioen.com

SIOEN USA Inc. c/o Flom, French & Goodwin, L.L.C. 675 Line Road Building 4, Suite B Aberdeen, T +1 732 441 12 50 F +1 732 441 12 53 cgoodwin@FFG-CPA.com

NJ 07747 USA

INDUSTRIAL APPLICATIONS

COATEX NV Industriezone Sappenleen Sappenleenstraat 3-4 B-8970 Poperinge België BTW BE 434.140.425 RPR 0434.140.425 Ieper T +32 57 34 61 60 F +32 57 33 35 23 coatex@sioen.be

SAINT FRERES CONFECTION SAS 2 route de Ville BP 37 F-80420 Flixecourt France TVA FR 44408449098 RCS Amiens 408 449 098 T +33 322 51 51 70 F +33 322 51 51 79 sfc@sioen.com

SIOEN NORDIFA SA Rue Ernest Solvay 181 B-4000 Liège Belgique TVA BE 474.276.154 RPM 0474.276.154 Liège T +32 4 252 21 50 F +32 4 253 04 25 nordifa@sioen.be

ROLAND INTERNATIONAL B.V. Kasteellaan 33 NL -5932AE Tegelen Nederland BTW NL 003812522 B01 HR Venlo 12011983 T +31 77 376 92 92 F +31 77 373 69 66 info@roland-int.org

ROLTRANS GROUP AMERICA INC. 3212 Pinewood Drive Arlington, Texas 76010 USA 75-1994308 Delaware T +1 817 607 00 80 F +1 817 607 00 88 info@roltrans.com

Corporation # 2044811

ROLAND PLANEN GMBH Am Zirkel 8 49757 Werlte Deutschland Ust-id.Nr.: DE 812873033 Osnabrück HR B 1222 96 T +49 59 51 99 55 70 F +49 59 51 99 55 71 info@roland-int.org

ROLTRANS GROUP POLSKA SP.Z.O.O. Ul. Nadbrzezna 1 PL -62500 Konin Polska NIP 665-100-18-19 RHB 1210 T + 48 632 44 39 25 F +48 632 44 39 21 info@roland-int.org

ROLAND UKRAINE LLC Kievskaya 64-A Rivne Ukraine T +38 362 28 65 39 F +38 362 28 65 39 roland@rivne.com

ROLAND TILTS UK Ltd Unit 1 Usher Street Off Wakefi eld Road Bradford BD4 7DS UK VAT GB 311746186 Company Nr 1380441 T +44 1274 39 16 45 F +44 1274 30 51 56 info@roland-int.org

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Gross margin % (Turnover +/- stock movements finished goods - purchases raw materials -/+ stock movements raw materials)/turnoverEBITDA Earnings Before Interest, Taxes, Depreciation and Amortization = Operating result + amortization + provisions for liabilities and other risks + depreciationEBIT Earnings Before Interest and Taxes = Operating resultREBIT EBIT + non recurring resultREBITDA EBITDA + non recurring resultEBT Earnings Before TaxesEAT Earnings After TaxesNOPAT EBIT - TaxesEVA NOPAT - cost of capital at start of the periodROE Net result part of the group / equity at end of previous financial yearROCE NOPAT / Capital employed of the periodNet cash flow Consolidated net result + depreciation + amortization + provisions for liabilities and charges + deferred taxesFFO Net result + depreciations + provisions for liabilities and taxes + amortization + deferred taxesFree operating CF Funds from operations - funds from investing activitiesWorking capital Financial fixed assets + current assets (minus cash deposits and cash equivalents) – non financial debt up to one year - accrued charges and deferred incomeCapital employed Working capital + tangible and intangible fixed assets + goodwill

defInItIons