Annual Report 2007solutions.vwdservices.com/documents/Corporate...window covering business outside...

Annual Report 2007

• Rotterdam, The Netherlands

World Headquarters and

European Operations

• Lucerne, Switzerland

Management Office

• Upper Saddle River, NJ, USA

North American Operations

• São Paulo, Brazil

Latin American Operations

• Kuala Lumpur, Malaysia

Asian Operations

Operational Headquarters:

1

Contents

Financial highlights

Two-year summary........................................2

Chairman’s letter .............................................3

Innovations .........................................................4

Window Coverings .....................................10

Architectural Products..............................13

Research and Development .................15

Manufacturing................................................15

Worldwide distribution system............16

Marketing..........................................................16

Education and

Corporate Citizenship...............................19

Financial Risk Management

Objectives and Policies ...........................20

Worldwide sales ...........................................21

Segment information.................................21

• Europe............................................................22

• North America ...........................................24

• Latin America.............................................26

• Asia...................................................................27

Financial statements..................................32

Additional information

(Auditors’ report, Appropriation of

profits, Shareholders’ meetings,

Dividends, Audit and Compensation

Committees)....................................................66

Corporate Governance ............................67

Five-year summary .....................................68

Operating Companies ..............................70

Directors and Officers...............................72

Hunter Douglas is the world market leader in window coverings anda major manufacturer of architectural products.

Hunter Douglas has its Head Office in Rotterdam, The Netherlands, anda Management Office in Lucerne, Switzerland.

The Group is comprised of 169 companies with 67 manufacturing and102 assembly operations and marketing organizations in more than100 countries.

Hunter Douglas employs about 21,000 people and hadsales in 2007 of USD 3.028 billion.

Sales: 15.1% higher to USD 3.028 billioncompared with USD 2.630 billion in 2006.

Income from Operations: 4.6% lower to USD 325 millioncompared with USD 341 million in 2006.

Net Profit from Operations (before extraordinary loss): 4% higher toUSD 271 million compared with USD 261 million in 2006.

Extraordinary loss on sale of Vlissingen smelter participation:USD 24 million.

Net Profit from Operations including extraordinary loss:was USD 247 mln compared with USD 261 mln in 2006.

Net Result Investment Portfolio: USD 62 million (after deductionimputed interest and expenses) compared with USD 66 million in 2006.

Total Net Profit: 5.4% lower to USD 309 millioncompared with USD 327 million in 2006.

• Window Coverings and Architectural Products

• Manufactured and marketed in 5 geographic markets:

Europe, North America, Latin America, Asia and Australia

• Entrepreneurial management: dynamic and performance oriented

• Decentralized organization structure

- Global federation of small and medium-sized companies

- Guiding principle: ‘Maximum accountability with minimum interference’

• Strong brands:

HunterDouglas® in North America and Asia, and for Architectural

Products worldwide

Luxaflex® for residential window coverings in the rest of the world

• Unique and innovative proprietary products

• Creative marketing programs

• Wide geographic spread of business

• Integrated manufacturing

Hunter Douglas Annual Report 2007 � Contents

2 Hunter Douglas Annual Report 2007 � Financial highlights

Net sales Total net profit Shareholders’ equity

2003 2004 2005 2006 2007 2003 2004 2005 2006 2007

174

230 223

327309

2003 2004 2005 2006 2007

1,0971,267

1,403

1,680

1,964

1,870

2,1502,397

2,630

3,028

USD x million

Financial highlights

Two-year summary

Net Sales 3,028 2,630

Income from Operations (EBIT) 325 341

Net Profit from Operations (before extraordinary loss) 271 261

Extraordinary loss on sale Vlissingen smelter participation -24

Net Profit from Operations including extraordinary loss 247 261

Net Result Investment Portfolio 62 66

Total Net Profit 1 309 327

Operating Cash flow 187 279

Investments in tangible fixed assets 140 107

Net Assets Employed 2 1,849 1,522

Shareholders’ equity 1,964 1,680

Per common share

- Total Net Profit 3 7.35 7.82

- Operating Cash flow 3 4.44 6.67

- Shareholders’ equity 4 46.54 40.09

- Dividend in EUR (proposed for 2007) 2.00 2.00

Ratios

Total Net Profit as % of equity 17.0% 21.2%

RONAE % Operations:

(Return before interest/net assets employed) 20.2% 25.1%

1 Total Net Profit is Net Profit attributable to equity shareholders.2 Total assets (excl. Investment Portfolio) minus non-interest-bearing current liabilities.3 Based on the average number of shares outstanding during affected year, adjusted for stock dividends.4 Based on the number of shares outstanding at year-end, adjusted for stock dividends and treasury shares.

USD

Millions, except per share data Notes | 2007 | | 2006 |

3

Chairman!s letterTo our shareholders

2007 was a good year for Hunter Douglas with record sales andprofits from Operations before the extraordinary loss.

Income from Operations was USD 325 mln compared withUSD 341 mln in 2006.

Net Profit from Operations excluding extraordinary loss: wasUSD 271 mln compared with USD 261 mln in 2006.

Extraordinary loss on sale of Vlissingen smelterparticipation: USD 24 mln.

Net Profit from Operations including extraordinary loss: wasUSD 247 mln compared with USD 261 mln in 2006.

Net Result Investment Portfolio: USD 62 mln compared withUSD 66 mln in 2006.

Total Net Profit: USD 309 mln compared with USD 327 mln in2006.

Sales were USD 3.028 bln; 15.1% higher than in 2006 with recordlevels in all regions.

• European sales were 27.9% higher reflecting organic growth aswell as acquisitions.

• North American sales were 3.5% higher.• Latin American sales were 14% higher with continued strong

organic growth.• Asian Operations had 31.3% higher sales.• Australian sales were 10.9% higher.

Our Strategy remains unchanged: To grow the market and ourmarket share by continuing to introduce innovative, proprietary,new products and by expanding our presence in key geographicmarkets. We also continue to supplement our internal growth withopportune acquisitions that add new products or distribution.

Notable Acquisitions (others are mentioned in the RegionalReports) were:• In January, Vista Products, a Sarasota, Florida based fabricator

and marketer of window coverings.• In March, 3form, a fast growing pioneer of decorative resin

panels for architectural applications, based in Salt Lake City,USA.

• In March, ESI, a Broomfield, Colorado based developer ofwindow covering motor controls.

• In May, Hexcelscreen, a Lyon, France based manufacturer ofglass fiber sun screen fabric.

• In October, NBK, an innovative Emmerich, Germany basedmanufacturer of terracotta façade panels.

Our Capital Expenditures in 2007 were USD 140 mln, whilstdepreciation was USD 85 mln. Our investments were dedicated togrowing our existing businesses, efficiency improvements and newproducts. In 2008, we expect our capital expenditures to bearound USD 120 mln.

Our Investment Portfolio, the management of which is delegatedto a widely diversified range of independent Managers, had a year-end fair value of USD 849 mln and an average return in USD onfunds invested of 14.4% (before imputed interest and expenses).

OrganizationI am very pleased that my sons, David andMarko, have been appointed Co-Presidentsand Chief Operating Officers. I will continueas Chairman and CEO.

The current reporting structure for the AreaPresidents remains unchanged as will myinvolvement with the Company.

David and Marko have been active in theCompany for more than 15 years inincreasingly senior management positionsand, for the past several years, have workedalongside me in senior leadership roles.

This appointment expresses and formalizesthe long term succession plan for theCompany’s management.

Buy Back of Common Shares: TheCompany will announce a Tender Offer to buyback any and all of its Common shares heldby minority shareholders at a price ofEUR 43.00 per share.

Outlook: We are cautious about the outlookfor 2008, considering the deteriorating marketconditions in the US and slowing growth inmany of our other markets.

The people of Hunter Douglas are ourmost important and valuable asset. Theycreate, make and market our products andare responsible for our continuing success.The Board and I express our sincere thanksand appreciation for their contributions,dedication and support.

Ralph SonnenbergChairman & Chief Executive Officer

Hunter Douglas Annual Report 2007 � Chairman’s letter

History

Hunter Douglas Annual Report 2007 � History & Innovations

1919-1946

In 1919 Henry Sonnenberg founded

a machine tool distribution and

subsequently manufacturing

company in Düsseldorf, Germany. In

1933 he moved to The Netherlands

and established a machine tool

operation.

In 1940, he moved to the

United States where he founded the

Douglas Machinery Company.

In 1946 Henry Sonnenberg

established a joint venture with

Joe Hunter which developed new

technology and equipment for the

continuous casting and fabrication

of aluminium. This led to the

production of lightweight aluminium

slats for Venetian Blinds.

Hunter Douglas, as we know it

today, was born.

1946-1960

Hunter Douglas aluminium blinds

quickly gained leadership in the

American market. As innovative as

the product was the business model

for its distribution. Hunter Douglas

developed a vast network of more

than 1,000 independent fabricators

in the United States and Canada.

InnovationsInnovation is about envisioning what comes

next. Ever since we created the aluminium

blind in 1946, we have defined our industry

with products that deliver revolutionary style

and functionality. What’s more, our expertise

in customization helps keep our customers

around the world at the forefront of design.

They sold blinds during the day and

custom assembled them in their

workrooms at night.

In 1956, policy differences led to

the sale of the U.S. business.

Henry Sonnenberg moved

Hunter Douglas’ headquarters to

Montreal, Canada and, using the

European machinery business as a

base, concentrated on building the

window covering business outside

the United States.

4

Pirouette® Window Shadings

A completely new and award-winning concept in

light control, Pirouette® Window Shadings feature

soft adjustable fabric vanes attached to a single

sheer backing. The patented Invisi-Lift™ system

transforms the vanes from flat or contoured to

fully open for a softened outside view while still

providing outstanding UV protection.

Flattened Contoured Opened

1960-1980

Hunter Douglas expanded its

operations in Europe and into

Australia and Latin America.

In 1969 the Hunter Douglas Group

went public, and its shares were

listed on the Montreal and

Amsterdam Stock Exchanges.

In 1971, Hunter Douglas’ Group

headquarters were moved to

Rotterdam, The Netherlands, and

Hunter Douglas N.V., became the

worldwide Group Holding Company.

In 1976, Hunter Douglas reacquired

its former U.S. business.

1980-2000

Hunter Douglas continued its global

growth and expanded into Asia. The

innovative spirit of the company led

to the development of revolutionary

new products to meet the increasing

demand for fashion and functionality.

1985 - Duette® Honeycomb Shades

1991 - Silhouette® Window Shadings

1994 - Vignette® Modern Roman

Shades

1996 - Luminette® Privacy Sheers

and PowerRise® battery-powered

remote control system

1999 - UltraGlide® retractable cord

system

2000-2007

2000 - LiteRise® cordless system

was launched in the U.S. and

EOS® hardware operating system for

blinds and shades was introduced in

Europe.

2003 - Alouette® LightLouvers and

Techstyle® Acoustical Ceilings

2004 - Facette® Shades, XL Panel

and the Alustra® Collection

2005 - Duette® TruRise® lifting

system

2006 - Duette® Architella™ Shades,

Skyline™ Window Panels and

Reveal™ with MagnaView™ Blinds

2007 - Pirouette® Window

Shadings and Platinum™

Technology Motorization

Platinum™ Technology Motorization

By merging advanced

technology and simplicity,

Hunter Douglas Platinum™

Technology delivers

the ultimate in window

covering control, combining

the best features of infrared

(IF) and radio frequency (RF)

control for both battery

powered and hard wired

window fashions.

Vignette® Top-Down/Bottom-Up Shades

A distinctive feature not commonly seen on Roman Shades,

Vignette® Modern Roman Shades with the Top-Down/Bottom-

Up design option offers more variable light control together

with secure privacy.

GreenScreen® and GlacierScreen®

Sunscreen Fabrics

The sustainable, PVC-free construction of

GreenScreen® shading fabrics delivers

superior solar control including durability,

dimensional stability, and metalized backings

for improved view-through. GlacierScreen®

fabrics promote interior air quality by avoiding

the use of VOC-emitting substances.

Hunter Douglas Annual Report 2007 � History & Innovations 5

6 Hunter Douglas Annual Report 2007 � Pirouette® Window Shadings

7

Pirouette®

WindowShadings

Hunter Douglas Annual Report 2007 � Silhouette® Window Shadings8

9

Silhouette®

WindowShadings

10 Hunter Douglas Annual Report 2007 � Window Coverings

Window CoveringsHunter Douglas is the world market leader in window coverings.

• Our strength is our ability to develop and market innovative, high

quality, proprietary products, targeted primarily at upscale

consumers.

• Our success is based upon trusted brand names recognized

around the world: HunterDouglas®, Luxaflex®, Duette®, Silhouette®

and Vignette®.

• Our proprietary fabric shades are consistently recognized for

excellence in design, styling, features, quality and breadth of

selection: Duette® Honeycomb Shades, Silhouette® and Pirouette®

Window Shadings, Luminette® Privacy Sheers, Vignette® Modern

Roman Shades, Alouette® LightLouvers and Facette® Shades.

• In addition to our fabric shades, we offer a fully integrated line of

fashion and colour coordinated window coverings at all price

points. These include Venetian and Vertical Blinds, Roman, Roller

and Woven Wood Shades, Pleated Shades, Wood, alternative

Wood Blinds and Custom Shutters. And Exterior Venetian Blinds,

Screen Products, Shutters and Awnings.

• We customize each window covering to the individual consumer’s

specific needs, and deliver that unique product typically within a

week of ordering.

• Our proprietary operating systems are equally innovative and

unique. They offer ease of use, reliable performance, convenience

� Heritance Hardwood Shutters

and improved safety features, identified by

our ‘Designed with Safety in Mind’ logo. They

also include the EOS® modular hardware

system.

Pirouette® Window Shadings

The newest innovation in window fashion

design, Pirouette® Window Shadings combine

the look and feel of a classic Roman Shade

with the ability to control light in an entirely

new way. Its revolutionary Invisi-Lift™ system

transforms the soft fabric vanes from what

appears to be cascading fabric to contoured

folds, allowing an enhanced outside view

through the sheer backing.

Platinum™ Technology Motorization

This advanced, yet simple to install home

automation system offers the ultimate in

operating convenience. It allows precise

control of every Hunter Douglas window

covering, either individually or grouped

together, at distances of up to 30’ away with

the infrared control, and up to 100’ away in

the radio frequency mode.

11Hunter Douglas Annual Report 2007 � Duette® Shades

12 Hunter Douglas Annual Report 2007 � Acoustical XL aluminium honeycomb ceiling

Hunter Douglas is a world-leading manufacturer of sun-control

solutions, suspended ceilings, ventilated façade systems, and

translucent materials.

• We focus on high-performance architectural materials with

proprietary characteristics in design, comfort, and sustainability.

• Our strength is our ability to develop customizable product

systems, which assure reliable installation and enable design

flexibility with minimal custom engineering.

• Our success is based on giving architects a high degree of

technical and design assistance in applying our products. We

collaborate with architects and owners to realize their design

objectives while also meeting functional needs such as light

control, energy efficiency, and acoustics.

• Our global network of specialized manufacturing facilities lets us

deliver a broad, consistent range of solutions that can be adapted

to local design requirements.

Sun-Control Solutions

Hunter Douglas offers an unparalleled breadth of solutions and

expertise to manage heat and light inside and outside windowed

walls. We are at the forefront of the emerging field of architectural

solar-control products.

Ventilated Façade Systems

Our QuadroClad ventilated façade system

features a versatile substructure and attractive

metal, glass, and resin panels in a wide range

of sizes and shapes.

In 2007 the Group acquired NBK, a pioneering

manufacturer of terracotta façades. NBK is

today the market and quality leader in size,

flatness, and design options for large

terracotta panels.

Suspended Ceilings

Our Luxalon® metal ceiling systems enable a

wide variety of designs and applications,

including curved and specialty shapes.

Our revolutionary Techstyle® acoustical panels

deliver superior noise reduction; a clean,

monolithic look; and easy access to the

plenum.

3form® Translucent Materials

In 2007, Hunter Douglas acquired 3form®, the

leading manufacturer of translucent panels.

3form® Resin Panels encapsulate a wide

variety of materials, giving architects and

interior designers the flexibility to create a wide

range of designs and applications, including

back-lit feature walls, translucent surfaces and

space dividers, as well as sliding doors.

Architectural Products

Hunter Douglas Annual Report 2007 � Architectural Products 13

� NBK ceramic Terrart®-mid

Hunter Douglas Annual Report 2007 � Research & Development14

15

Research & Development

Hunter Douglas was founded on a tradition of bringing

breakthrough products to market. At the beginning of the 21st

century, our new product development has accelerated with the

introduction of a number of innovative products, including

Alouette® LightLouvers, Facette® Shades, EOS® Hardware

systems, UltraGlide® and LiteRise® operating systems, Techstyle®

Acoustical Ceilings and Duette® Architella™ Shades.

• We have specialized R & D Centres in the United States,

The Netherlands and Germany where products are currently

under development for introduction in 2008, 2009 and beyond.

• Around the world, our subsidiaries adapt products to respond to

local market needs.

• We are continually seeking, testing and developing new ideas

and concepts that will enable Hunter Douglas to serve and grow

our markets in future years.

• Top priorities are the comfort and safety of the end users, the

functionality and durability of our products and the evolving

fashion and style of the marketplace.

2007• We strive to simplify assembly, improve

production processes, eliminate waste and

reduce maintenance.

• In 2008 we expect our R & D activities to

remain at similar levels as in 2007.

Manufacturing

More than 60 years ago, Hunter Douglas

pioneered a unique, continuous casting and

integrated manufacturing process for

aluminium, to produce painted aluminium

strip, and from that the basic materials for

many of our products. That innovative

thinking has been applied to all aspects of

our operation.

• We have applied the lessons learned in

manufacturing metal products to our fabric

shades and have set the industry standard

for fabric: trapping air in cellular pockets to

provide insulation, light diffusion, privacy,

light control and sun protection.

� Duette® Architella™ Shades

Hunter Douglas Annual Report 2007 � Research & Development

16

• Our proprietary innovations include the energy-efficient

honeycomb cell used in Duette® Shades; translucent sheer

fabrics used in shades and shading systems; and the process for

bonding diverse fabrics to yield products like Silhouette® and

Pirouette® Window Shadings, Vignette® Modern Roman Shades

and Luminette® Privacy Sheers.

• We concentrate production of our principal products in a few

efficient manufacturing locations around the world.

• Process re-engineering and automation is a critical concept in a

custom business, allowing us to better manage inventory and our

other assets, lower costs, and serve our customers more quickly

and efficiently.

Worldwide distribution system

Our distribution system is key to our business and an essential

element in our marketing strategy. It is as distinctive as it is

efficient.

• We rely upon a worldwide network of several thousand

independent and 102 company-owned fabricators to sell,

assemble and distribute our products in local markets.

• We closely support fabricators to ensure they consistently offer

the best quality and service.

• We provide sophisticated sampling, merchandising and training

programs to enable our fabricators to establish strong dealer

networks.

• We provide support to over 100,000 retail dealers - the second

tier in our distribution network. They rely upon us for sales and

marketing programs; advertising and promotional campaigns;

sampling, displays and signage; product education and

business-building programs; technical service and assistance in

computer-supported administrative areas.

• Installing our products is key to lifetime performance and

customer satisfaction. We have expanded our training to assist

the thousands of professional Hunter Douglas installers around

the world.

• Strong and enduring relationships have been forged between

Hunter Douglas, our fabricators and our dealers. We consider

them to be our strategic partners and the principal sales and

marketing arms for our products.

Marketing

We want consumers who purchase

Hunter Douglas products to have a

thoroughly satisfying experience. We have

built an additive-process marketing program

that builds awareness of and desire for our

products and creates strong brand loyalty.

• Brand awareness is built through many

channels: print, broadcast and online

advertising campaigns; a comprehensive

consumer Web site; retail merchandising

and displays; relationship building with the

trade and consumer press, as well as

interior designers and architects;

newspaper and magazine articles and

editorials; sponsorship of special events

and worthy charitable causes at the local,

national and international levels.

• Our messages are based upon extensive

research into consumer needs, motivations

and regional differences, enabling us to

better understand what dealers need to

support and sell our products.

• Once in a retail store, the consumer will find

a wealth of materials that help simplify the

purchase decision: brochures, design

books, sampling of the full range of colours

and options, and displays that show how

actual products look and function.

• We actively support our commercial clients

with products that meet their needs and

specifications, and with technical

information concerning light control,

motorization and climate control.

Our internet sites enable us to:

• Give consumers the information they need

to make appropriate buying decisions and

to bring them to our dealers’ showroom.

• Educate and support our dealers and

installers; including interactive features to

select, measure, order and install products.

Hunter Douglas Annual Report 2007 � Worldwide distribution system

17Hunter Douglas Annual Report 2007 � Manufacturing

Hunter Douglas Annual Report 2007 � Luxaflex® Gallery18

19Hunter Douglas Annual Report 2007 � Education and Corporate Citizenship

Education and Corporate Citizenship

Education

We have developed multi-level training and education programs for

our fabricators, retail dealers, professional designers and installers.

• Hunter Douglas International Alliance Conference (IAC):

An industry and company first, the IAC brought together over

4,000 Hunter Douglas executives, retailers, fabricators and

marketing partners from around the globe. Hosted at the

Colorado Convention Center from July 25-27, 2007, this

important event featured 92,000 square feet of exhibition space

filled with a comprehensive presentation of Hunter Douglas

products, marketing and merchandising programs. The Mayor of

Denver welcomed guests at the opening ceremony, and the

distinguished General Colin L. Powell, USA (Ret.) gave the

keynote address.

• We hold consumer seminars to help prospective buyers

understand the importance of window coverings for home

fashions and for light control and energy efficiency.

• We provide training seminars and hands-on workshops for

retailers, designers and installers - including CD-Roms,

videotapes, and web-based instructions - throughout the world.

• We’ve created the industry’s first and only formal Retail Alliance

Program, offering our very best dealers a choice of tiered

partnership options that reward their brand loyalty with lucrative

business-building benefits, including financial incentives and

exclusive products and programs.

• Our ‘Windows of Opportunity’ seminar on

the use of window coverings in interior

design reaches more than 2,500 design

school students in major United States’

markets each year.

• At the Fashions Institute of Technology in

New York and other leading design schools,

we provide industry overviews and a

business perspective.

• At the renowned Pratt School of Architec-

ture, we sponsor design studio projects

that challenge students to envision new and

novel ways to integrate our products and

materials into architectural structures.

• In Europe in 2007, we had a record number

of attendees at specialized training sessions

for blindmakers to improve their service,

marketing and sales.

• We are the sole sponsor of Archiprix

International, the leading international

competition for graduating architecture

students.

� International Alliance Conference (IAC)

20

Corporate Citizenship

• We actively support the communities in which we live, work and

do business. Decisions about which causes to support and the

form that support takes are made locally by our management in

each country.

• We provide window coverings to hospitals, research centres and

healthcare facilities around the world.

• We support educational opportunities for the families of our staff

and less privileged members of our communities.

• In the United States and Canada, we sponsor Habitat for

Humanity, donating custom window coverings for the homes

they have built for low-income families since 1993.

• We stimulate students’ awareness of our products and

encourage their creativity through competitions in which they are

judged upon the innovative application of our products in their

design projects.

� Archiprix International 2007

Hunter Douglas Annual Report 2007 � Education and Corporate Citizenship

Financial Risk Management Objectives

and Policies

For risk management objectives and policies

in relation to the financial instruments

reference is made to note 25 of the financial

statements.

North Latin

USD x million Europe America America Asia Australia Total

| 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 |

Net sales

Window Coverings 1,078 818 1,216 1,229 128 114 69 53 107 94 2,598 2,308

Architectural Products 91 90 68 11 43 36 99 75 5 7 306 219

Other 124 103 124 103

Total 1,293 1,011 1,284 1,240 171 150 168 128 112 101 3,028 2,630

Net assets employed (**) 959 787 661 498 59 43 100 86 51 41 1,830 1,455

Additions to tangible

fixed assets 51 34 68 50 5 4 12 17 4 2 140 107

Depreciation tangible

fixed assets 44 31 31 31 3 3 5 3 2 2 85 70

Employees per year-end 8,319 8,069 9,126 8,914 1,417 1,225 1,630 1,415 410 405 20,902 20,028

(*) This table excludes the turnover of 568 (2006: 687) and net assets employed of 19 (2006: 67) of Metals Trading.(**)Total assets (excl. Investment Portfolio) minus non-interest-bearing current liabilities.

No material changes in the number of employees is expected in 2008, except for acquisitions/divestments.Relative profitability per area is in line with net sales per area.Relative distribution of employees per business segment per area is in line with net sales per area.

Segment information*

Worldwide sales

Hunter Douglas Annual Report 2007 � Worldwide sales 21

North America 42% (2006: 47%) Europe, Middle East and

Africa 42% (2006: 38%)

Asia 6% (2006: 5%)

Australia 4% (2006: 4%)

Latin America 6% (2006: 6%)

22

EuropeOur European Operations achievedhigher sales, and slightly higher profits.

� Aad Kuiper | Vice President & Managing Director,

Hunter Douglas Europe

Hunter Douglas Europe

Our main operation achieved record sales and level profits;

benefiting from solid growth of a number of successful new

product lines, strong response to our dealer marketing programs,

continued efficiency improvements and acquisitions. Part of this

growth was offset by lower profits in our UK operations.

Window Covering Products

• Increased sales of materials and components to independent

blindmakers; particularly in the Benelux, Scandinavia, Iberia and

Eastern Europe.

• Generated level sales and profits in our wholesaling operations in

the UK and Ireland.

• Achieved record sales and profits in our company owned

blindmakers; with strong performance particularly in the Benelux

and Iberia.

• Introduced 4 successful new Luxaflex® collections: a well

received, pioneering range of digitally printed rollerblind fabrics;

an innovative line of Japanese Design Panel Blinds; as well as

new Wood Blind and Vertical Blind collections.

• Further extended the launch and significant growth of our new

Luxaflex® Roman Shades and Luxaflex® Facette® Shades product

lines.

• Achieved double digit growth of Duette® Shades for the 5th

consecutive year.

• Expanded the number of Inspiration Dealers, and installed the

first high-end Gallery concept dealer in The Netherlands.

• Introduced Luxaflex® into the Danish market via our recently

acquired Scandinavian blindmaker, which is performing well.

• Acquired and merged L&C, a Dutch fabricator, into Multisol our

Nijmegen based fabricator.

• Introduced new collections in both Portugal and Spain under the

well-established, Hofesa brand name. The collections are being

produced at our recently acquired Portuguese blindmaker.

• A slowdown in the UK economy and the declining market for

conservatories resulted in significantly lower profits for Thomas

Sanderson Blinds.

Hunter Douglas Annual Report 2007 � Europe

• Gardinia, the leading distributor of

packaged window coverings in Central and

Eastern Europe, in which we have a 49%

interest, performed well. Lower sales and

profits in Germany were more than offset by

continued strong growth in Eastern Europe.

Architectural Products

• Acquired NBK, a leading German based

manufacturer of large terracotta façade

panels. Began building a second NBK plant

in Portugal to meet market demand. We

expect this popular product category to

complement our line of QuadroClad metal

façades.

� Facette® Shades

23Hunter Douglas Annual Report 2007 � Europe

• Grew sales of metal ceilings and introduced a number of new

products like QuadroClad Glass Façades, 300L metal ceilings

and Aeroscreen Sun Control Systems.

• Initiated a significant start-up effort to launch 3form® Resin Panels

into the European market, including gearing-up a new plant.

• Achieved rapid growth in our recently launched wooden ceiling

and sliding shutter product lines.

Project Market

• Continued to extend our Hunter Douglas project activities for

both Window Coverings and Architectural Products, resulting in

significantly increased sales and specifications. Strengthened our

solution based sales program, based on light regulation, climate

control and energy saving for buildings.

• Continued to expand Archiprix International, the leading bi-

annual competition for graduate students in Architecture around

the world, for which Hunter Douglas is the sole sponsor. The

Archiprix Exhibition and Award Ceremony in 2007 took place in

Beijing, China.

• Started a new assembly operation in Dubai, Middle East, to

strengthen our position in this fast growing market.

Operations/Manufacturing

• Commenced production in our new wide casting and rolling

facilities in Rotterdam, The Netherlands.

• Continued to expand our activities at Artex, our strong

performing textile manufacturer in Aarle Rixtel, The Netherlands.

Artex acquired Ploeg, a premier Dutch commercial fabric brand.

• Further expanded our rapidly growing low cost window covering

assembly plant in Kadan, Czechia.

Nedal

Our Dutch based aluminium extrusion

operation had higher sales and profits.

� Silhouette® Shades

Net salesWindow coverings 784 651Architectural products 66 71Other 90 82Total 940 804

Net assets employed 651 597

Employees 8,319 8,069

Europe

EUR x million | 2007 | | 2006 |

24

North AmericaOur North American business achieved slightly higher salesbut lower operating profits in 2007.

� Marv Hopkins | President & CEO,

North American Operations

• Sales were slightly higher due to the favorable impact of

acquisitions, the strong growth in our Canadian operations and

the expansion and growth of our Contract business.

• Profits were down primarily due to the decline in the housing

sector throughout most of the United States. Significant

restructuring charges were taken to consolidate fabrication

operations in California and eliminate redundant manufacturing

operations at Comfortex.

• For the 12th consecutive year, Hunter Douglas led all window

covering companies in the annual industry awards competition

sponsored by the Window Covering Manufacturing Association

(WCMA), capturing 70% of the awards given for the best new

products and programs.

• For the 11th time in the 12 years of the competition,

Hunter Douglas captured the Product of the Year award in the

Hunter Douglas Annual Report 2007 � North America

national WCMA competition, this time with

new Pirouette® Window Shadings.

Pirouette® also won awards for Best New

Style Concept, Best Technical Innovation

and Most Innovative Overall Design.

• Held our first ever International Alliance

Conference in July. This was a 3-day event

occupying most of the Denver, Colorado

Convention Center where we exhibited all

our products and programs in a 90,000

square foot exhibition hall and conducted

extensive training and education seminars.

Over 3,000 of our best retail dealers from

throughout the U.S. and Canada, and from

as far away as China, participated. Former

� Duette® Architella™ Shades

25Hunter Douglas Annual Report 2007 � North America

Secretary of State, General Colin Powell was the keynote

speaker.

• Acquired three more companies: 3form®, a rapidly growing

pioneer of decorative resin panels for architectural products;

Electronic Solutions Inc, the leading U.S. developer of motor

controls for window coverings; and, Vista, a fabricator of blinds,

shades and shutters in the southeastern U.S.

• Increased the sales dollars per employee to new record highs

and achieved record low receivables in relation to sales.

• Improved employee safety performance and reduced worker

compensation costs through ongoing safety audits and

aggressive safety programs throughout the Company.

• Began a significant upgrade of our enterprise computing system

in 2007, continuing our commitment of using state-of-the-art

technologies to support our dealers, provide outstanding

customer service to our consumers and increase the efficiency of

our supply chain and internal operations.

• Introduced a record number of new products including Pirouette®

Window Shadings and Platinum™ Technology, a sophisticated

home motorization system for window coverings.

• Continued to achieve rapid sales growth with our Hunter Douglas

Custom Shutter Collection, led by the NewStyle® product.

• Continued to achieve strong sales growth in Canada, led by our

proprietary Pirouette® and Silhouette® Window Shadings

products.

• Expanded our Centurion Club™ by over 60% to more than 500 of

our top retail dealers. Membership requires eligible

Hunter Douglas Gallery® and ShowcaseSM dealers to commit

100% of their window covering business to Hunter Douglas.

• Expanded our ShowcaseSM network of dealers by over 30% to

1,052 and increased our top level Hunter Douglas Gallery®

alliance dealers to 367.

• Conducted the industry’s largest incentive travel program,

Windows to the World, taking more than 4,000 dealer

participants to destinations such as the Greek Isles, Budapest

and St. John, Virgin Islands.

• Launched the new iMagine Design Center, an innovative online

image rendering tool developed for our consumer website,

www.hunterdouglas.com and received the MarCom Creative

Award in the web interactive category for 2007.

• Total visits to our www.hunterdouglas.com consumer website

increased by 21% in 2007, and total pages viewed grew by

35%. We began major expansion of and improvements to the

site, for completion in 2008.

• Our contract business continued to grow rapidly, winning a

‘Best Campaign’ award from Architectural Record, the most

prestigious architectural publication in the industry. We are

gaining share in the commercial sunscreen business, based on a

growing line of sustainable products. This year saw the launch of

GlacierScreen®, a new VOC-free commercial sunscreen fabric.

• 3form®, acquired in early 2007, launched a proprietary new

colour layering technique, a line of poured glass products, and

sliding doors.

• Our hospitality business benefited from our

leading position as a full service, turnkey

hard and soft window covering supplier,

particularly in the Las Vegas market, which

continues to perform strongly.

• Turnils North America, the largest

component supplier to private label

fabricators, maintained sales and increased

profit. Its Eclipse™ Shutters brand, one of

the leading shutter programs in North

America, introduced several new product

enhancements.

• Mermet, our fiberglass sunscreen

manufacturer, increased sales and

completed an 80,000 square foot

expansion to meet the growing demand for

its products.

• Established the Hunter Douglas

Endowment for Microfinance Sustainability

which will underpin an innovative new

funding concept for micro-loans to third

world entrepreneurs.

• Established the Hunter Douglas Program in

Advanced Robotics and Imaging Fund at

the Cleveland Clinic Foundation with a

commitment of $1 million.

• Donated Hunter Douglas custom window

coverings to more than 6,000 new Habitat

for Humanity homes during 2007.

Net salesWindow coverings 1,216 1,229Architectural products 68 11Other - -Total 1,284 1,240



North America

USD x million | 2007 | | 2006 |

26

Latin AmericaContinued strong growth in sales and profits.

� Renato Rocha | President, Latin American Operations

Hunter Douglas Annual Report 2007 � Latin America

Our Latin American operations achieved record sales and profits,

supported by the ongoing strength of most of the region’s

economies. Our Window Covering business continued to grow

strongly, driven by new collection introductions, intensified marketing

programs, and the continued growth of our Priority Dealers.

Our Stock Window Covering Products also performed well.

Our Architectural Products business declined slightly compared to

2006, a year in which we delivered several exceptionally large

orders.

Brazil

• Sales and profits - largely Window Coverings - grew sharply to

record levels supported by the strong local currency.

• We acquired a small independent Luxaflex® licensee in the state of

Minas Gerais, and merged its plant into our main Campinas facility.

Mexico

• Sales and profits rose strongly, again to record levels.

� Showroom Brazil

Net salesWindow coverings 128 114Architectural products 43 36Other - -Total 171 150



Latin America

USD x million | 2007 | | 2006 |

Chile

• Sales rose significantly, as our local

business continues to grow steadily in both

sales and profits. Overall profits fell slightly

as we delivered fewer large architectural

orders to export markets.

Colombia

• Sales and profits rose sharply to record

levels, particularly in our Architectural

Products division.

Argentina

• Sales rose sharply but profits dropped

significantly due to lower margins and

significant investments in market share

building initiatives.

• To support our continued growth, we

moved into a new, three times larger plant.

Venezuela

• Our business in Venezuela reported higher

sales and profits, but continues to suffer

from an increasingly inhospitable regulatory

environment.

Peru

• We established a fabrication plant to supply

the local market.

27

AsiaOur Asian Operations achieved much highersales and profits.

� G.C. Neoh | President, Asian Operations

Hunter Douglas Annual Report 2007 � Asia

Our Architectural business had strong sales growth with the

completion of several major projects. Our consumer Window

Covering business also continued to grow strongly, driven by the

rapid expansion of our Hunter Douglas Window Fashion Gallery

network.

China

• Sales and profits increased sharply.

• Completed several multi-million dollar ceilings and claddings

projects for Tianjin Olympic Stadium, China National Aquatic

Center for Olympic, Beijing MRT line No. 5 & 10, Shanghai MRT

Line No. 6 & 8, Tianjin International Airport, Tsingtao International

Airport, Pudong (Shanghai) International Airport T2, Wuxi Airport

and over 1000 Sinopac gas stations throughout China.

• Began building a new fabrication factory in Chengdu to service

the fast growing western China market.

• Began building a new 3form® manufacturing plant in Guangzhou.

Korea

• Strong growth in sales and profits of our consumer Window

Covering business driven by the success of our Hunter Douglas

Window Fashion Gallery program.

• We are developing a new, larger plant for Window Covering

fabrication and sunscreen production to serve this fast growing

market.

India

• Strong growth in sales and profits in both architectural products

and window coverings.

• Established a new fabrication plant in Chennai.

• Completed a multi-million dollar ceiling and cladding project for

Hyderabad International Airport.

Singapore

• Strong growth in sales and profits.

• Completed a multi-million dollar ceiling project for Changi

International Airport T3.

Taiwan


• Completed a multi-million dollar ceiling project for Kaohsiung

MRT Interchange.

Japan

• Lower sales and profits.

• Continued to develop and grow our

consumer Window Covering business.

Hong Kong, Vietnam, Indonesia,

Philippines


Malaysia, Thailand

• Lower sales and profits.

Net salesWindow coverings 69 53Architectural products 99 75Other - -Total 168 128



Asia

USD x million | 2007 | | 2006 |

� Hunter Douglas Manufacturing China, Guangzhou, China

Hunter Douglas Annual Report 2007 � 3form® Varia28

29

3form®

Varia

30 Hunter Douglas Annual Report 2007 � Vignette® Modern Roman Shades

31Hunter Douglas Annual Report 2007 � Facette® Shades

32

Consolidated statement of income for the year

Net sales 3 3,028 2,630

Cost of sales 4 -1,798 -1,519

Gross profit 1,230 1,111

Gross profit metals trading 3 20 24

Total gross profit 1,250 1,135

Selling and marketing expense 3 -539 -454

General and administrative expense 3 -386 -340

Income from operations (EBIT) 325 341

Finance costs 4 -40 -30

Finance income 4 108 108

Other expense 4 -24

Income before taxes 369 419

Taxes on income 19 -59 -91

Net profit for the year 310 328

Net profit attributable to minority interest 1 1

Net profit attributable to equity shareholders 309 327

Earnings per share attributable to

equity shareholders 20

- basic for profit for the year 7.35 7.82

- fully diluted for profit for the year 7.34 7.78

The accounting policies and explanatory notes on pages 37 through 62 form an integral part of thefinancial statements.

� Leen ReijtenbaghVice President &Chief Financial Officer

� Chris KingVice President General Counsel

Hunter Douglas Annual Report 2007 � Consolidated statement of income for the year

USD

Amounts in millions Notes | 2007 | | 2006 |

33

Consolidated cash flow statement for the year


Adjustment for:

Depreciation property, plant & equipment 85 70

Amortization patents & trademarks 6

Unrealized profit investment portfolio -117 -110

Operating cash flow before working capital changes 283 287

Changes in working capital:

- increase trade and other receivables and prepayments -113 -47

- increase inventories -4 -68

- increase trade and other payables 17 120

- increase (decrease) provisions 4 -13

Operating cash flow 187 279

Dividend paid -124 -102

Net cash from operations 63 177

Cash flow from investing activities

Investments subsidiaries, net of cash acquired 5 -116 -28

Divestments subsidiaries and participations 5 8

Investment intangible fixed assets -8

Investment property, plant and equipment -140 -107

Divestment property, plant and equipment 28 9

Decrease investment portfolio 40 7

Decrease other financial non current assets 6 3

Increase other financial non current assets -1

Net cash from investing activities -186 -108

Cash flow from financing activities

Re-issuance treasury shares 31 6

Increase (decrease) interest-bearing loans and borrowings 72 -53

Net cash from financing activities 103 -47

Total amount of cash before translation on flows -20 22

Translation differences on flows 16

Net (decrease) increase in cash and cash equivalents -20 38

Change in cash and cash equivalents

Balance at 1 January 87 47

Net decrease (increase) in cash and cash equivalents -20 38

Exchange difference cash and cash equivalents 5 2

Balance at 31 December 14 72 87

Income tax paid 52 (2006: 70), interest paid 39 (2006: 28) and interest received 41 (2006: 35) areincluded in net cash from operations.The accounting policies and explanatory notes on pages 37 through 62 form an integral part of thefinancial statements.

Hunter Douglas Annual Report 2007 � Consolidated cash flow statement for the year

USD


34

Consolidated balance sheet as per December 31

Assets

Non current assets

Intangible fixed assets 7 301 200

Property, plant and equipment 8 621 522

Other financial non current assets 9 30 58

Total non current assets 952 780

Current Assets

Inventories 10 708 646

Trade and other receivables 11 608 502

Prepaid income tax 74 63

Prepayments 12 170 109

Currency derivatives 11

Metal derivatives 6 14

Investment portfolio 13 849 771

Cash and short-term deposits 14 72 87

Total current assets 2,498 2,192

TOTAL ASSETS 3,450 2,972


Hunter Douglas Annual Report 2007 � Consolidated balance sheet as per December 31

USD


35

Shareholders’ equity and liabilities as per December 31

Equity attributable to equity shareholders

Issued capital 15 15 13

Share premium 103 79

Treasury shares 15 -16

Foreign currency translation 16 -41

Retained earnings 1,830 1,645

Total equity attributable to equity

shareholders of the parent 1,964 1,680

Minority interest 5 3

Total equity 1,969 1,683

Non current liabilities

Interest-bearing loans and borrowings 16 492 314

Preferred shares 16 14 91

Provisions 17 43 33

Deferred income tax liabilities 19 25 11

Total non current liabilities 574 449

Current liabilities

Trade and other payables 18 685 620

Income tax payable 64 46

Currency derivatives 2

Metal derivatives 3 11

Interest-bearing loans and borrowings 16 155 161

Total current liabilities 907 840

TOTAL LIABILITIES 1,481 1,289

TOTAL SHAREHOLDERS’ EQUITY

AND LIABILITIES 3,450 2,972


Hunter Douglas Annual Report 2007 � Consolidated balance sheet as per December 31

USD


36

Consolidated statement of changes in equity for the year

At 1 January 2006 12 71 -19 80 1,259 1,403 4 1,407

Net profit 327 327 1 328

Currency translation differences 1 8 -3 -121 161 46 -2 44

Total comprehensive income (expense) 1 8 -3 -121 488 373 -1 372

Exercise of options 6 6 6

Equity dividends -102 -102 -102

At 31 December 2006 13 79 -16 -41 1,645 1,680 3 1,683

Net profit 309 309 1 310

Currency translation differences 2 9 57 68 1 69

Total comprehensive income (expense) 2 9 0 57 309 377 2 379

Exercise of options 15 16 31 31

Equity dividends -124 -124 -124

At 31 December 2007 15 103 0 16 1,830 1,964 5 1,969

The accounting policies and explanatory notes on pages 37 through 62 form an integral part of the financial statements.

Amounts in USD x millions Attributable to equity shareholders of the parent

ForeignIssued Share Treasury currency Retained Minority Totalcapital premium shares translation earnings Total interest Equity

Hunter Douglas Annual Report 2007 � Consolidated statement of changes in equity for the year

37

Notes to consolidated financial statementsUSD (millions, unless indicated otherwise)

1. Corporate informationThe consolidated financial statements ofHunter Douglas N.V. for the year ended31 December 2007 were authorized forissue on 12 March 2008. These financialstatements will be adopted by the AnnualGeneral Meeting of Shareholders on11 June 2008.

Hunter Douglas N.V. is incorporated inThe Netherlands Antilles and has itsstatutory seat in Curaçao. Common sharesare publicly traded at Amsterdam (HDG)and Frankfurt (HUD) for the commonshares; the preferred shares are traded atAmsterdam (HUNDP).

The principal activities of the Group aredescribed in note 3.

2. Summary of significant accountingpolicies

Basis of presentationThe consolidated financial statements havebeen prepared on a historical cost basis,except for the investment portfolio andderivative financial instruments which havebeen measured at fair value.The consolidated financial statements arepresented in U.S. dollars and all values arerounded to the nearest million except whenotherwise indicated.

Statement of complianceThe consolidated financial statements ofHunter Douglas N.V. and all its subsidiarieshave been prepared in accordance withInternational Financial Reporting Standardsas adopted by the European Union andInternational Financial Reporting Standardsas issued by the IASB.

In accordance with Article 2:402 of the CivilCode, an abbreviated version of theincome statement is presented in thecompany financial statements.

Basis of consolidationThe consolidated financial statementscomprise the financial statements ofHunter Douglas N.V. and its subsidiaries asat 31 December each year. The financialstatements of subsidiaries are prepared forthe same reporting year as the parentcompany, using consistent accountingpolicies. All inter-company balances andtransactions, including unrealized profitsarising from intra-group transactions, havebeen eliminated upon consolidation.

Subsidiaries are consolidated from the dateon which control is transferred to theGroup and cease to be consolidated fromthe date on which control is transferred outof the Group, in which case theconsolidated financial statements includethe results for the part of the reporting yearduring which Hunter Douglas N.V. hadcontrol.Joint ventures have been included in theconsolidated financial statements using theproportionate consolidation method.

Acquisitions have been included in theconsolidated financial statements using thepurchase method of accounting. Thepurchase method of accounting involvesallocating the costs of the businesscombination to the fair value of the assetsacquired and liabilities assumed at the dateof acquisition.

Accordingly, the consolidated financialstatements include the results from thenew acquisitions from the date of theiracquisition. The new acquisitions aredisclosed in further detail in note 5.

Minority interest represents the portion ofprofit or loss and net assets in some LatinAmerican subsidiaries not held by HunterDouglas N.V. and are presented separatelyin the statement of income and withinequity in the consolidated balance sheet,separately from shareholders’ equity.

Foreign currency translationThe consolidated financial statements arepresented in U.S. dollars, which is theCompany’s presentation currency. TheEuro is the company’s functional currency.Each entity in the Group determines itsown functional currency and items includedin the financial statements of each entityare measured using that functionalcurrency. Transactions in foreign currenciesare initially recorded at the functionalcurrency rate on the date of thetransaction. Monetary assets and liabilitiesdenominated in foreign currencies areretranslated at the functional currency rateof exchange on the balance sheet dates.All differences are taken to the incomestatement with the exception of differenceson foreign currency borrowings thatprovide a hedge against a net investmentin a foreign entity. These are taken directlyto equity until the disposal of the netinvestment, at which time they arerecognized in the income statement.Tax charges and credits attributable toexchange differences on those borrowingsare also dealt with in equity. Non-monetaryitems that are measured in terms ofhistorical cost in a foreign currency aretranslated using the exchange rates as atthe dates of the initial transactions. Non-monetary items measured at fair value in aforeign currency are translated using theexchange rates at the date the fair valuewas determined.

As at the reporting date, the assets andliabilities of the subsidiaries are translatedinto the presentation currency of the Group(U.S. dollar) at the rate of exchange on thebalance sheet date and their incomestatements are translated at the weightedaverage exchange rates for the year.The exchange differences arising on thetranslation are taken directly to a separatecomponent of equity. On disposal of aforeign entity, the deferred cumulativeamount recognized in equity relating to thatparticular foreign operation is recognized inthe income statement.

Intangible fixed assetsIntangible assets with finite lives areamortized over the useful economic lifeand assessed for impairment wheneverthere is an indication that the intangibleasset may be impaired. The amortizationperiod and the amortization method for anintangible asset with a finite useful life isreviewed at least at each financial yearend. Changes in the expected useful life orthe expected pattern of consumption offuture economic benefits embodied in theasset is accounted for by changing theamortization period or method, asappropriate, and treated as changes inaccounting estimates. The amortizationexpense on intangible assets with finitelives is recognized in the income statementin the expense category consistent withthe function of the intangible asset.

Business Combinations and GoodwillBusiness Combinations are accounted forusing the acquisition accounting method.This involves recognizing identifiable assets(including previously unrecognizedintangible assets) and liabilities (includingcontingent liabilities and excluding futurerestructuring) of the acquired business atfair value. Goodwill on acquisition is initiallymeasured at cost being the excess of thecost of the business combination over theacquirer’s interest in the net fair value of theidentifiable assets, liabilities and contingentliabilities. Following initial recognition,goodwill is measured at cost less anyaccumulated impairment losses. Goodwillon acquisitions after 1 January 2004 is notamortized and goodwill already carried inthe balance sheet is not amortized after 1January 2004. Goodwill is reviewed forimpairment annually or more frequently ifevents or changes in circumstancesindicate that the carrying value may beimpaired.

As at the acquisition date, any goodwillacquired is allocated to each of the cash-generating units expected to benefit fromthe combination’s synergies. Impairment isdetermined by assessing the recoverableamount of the cash-generating unit, towhich the goodwill relates. Where therecoverable amount of the cash-generatingunit is less than the carrying amount, animpairment loss is recognized. Wheregoodwill forms part of a cash-generatingunit and part of the operation within thatunit is disposed of, the goodwill associatedwith the operation disposed of is includedin the carrying amount of the operationwhen determining the gain or loss ondisposal of the operation. Goodwilldisposed of in this circumstance ismeasured on the basis of the relativevalues of the operation disposed of andthe portion of the cash-generating unitretained.

Significant accounting judgment andestimatesThe preparation of financial statementsrequires management to make estimates

Hunter Douglas Annual Report 2007 � Notes to consolidated financial statements

38

and assumptions that affect amountsreported in the consolidated financialstatements in order to conform to IFRS.These estimates and assumptions affectthe reported amounts of assets andliabilities, the disclosure of contingentliabilities at the date of the consolidatedfinancial statements, and the reportedamounts of revenues and expenses duringthe reporting period. We evaluate theseestimates and judgements on an ongoingbasis and base our estimates onexperience, current and expected futureconditions, third-party evaluations andvarious other assumptions that we believeare reasonable under the circumstances.The results of these estimates form thebasis for making judgements about thecarrying values of assets and liabilities aswell as identifying and assessing theaccounting treatment with respect tocommitments and contingencies. Actualresults could differ from the estimates andassumptions.

Estimates significantly impact goodwill andother intangibles acquired, impairments,fair value of the investment portfolio,liabilities from employee benefit plans,other provisions and tax and othercontingencies. The fair values of acquiredidentifiable intangibles are based on anassessment of future cash flows.Impairment analyses of goodwill areperformed annually and whenever atriggering event has occurred to determinewhether the carrying value exceeds therecoverable amount. These analyses arebased on estimates of future cash flows.

Assumptions used to determine pensionliabilities include the interest rate anddiscount rate. Assumptions used todetermine the fair value of the investmentportfolio relate to credit risk and liquidityrisk of the fund.

Property, plant and equipmentProperty, plant and equipment are carriedat cost less accumulated depreciation andany accumulated impairment in value.Fixed assets are depreciated over theexpected useful lives, using the straight-line method. An indication of the expecteduseful life is as follows:

Buildings 20 - 40 yearsMachinery & equipment 5 - 10 yearsOther property, plant andequipment 3 - 10 yearsLand is not depreciated.

The carrying values of property, plant andequipment are reviewed for impairmentwhen events or changes in circumstancesindicate that the carrying value may not berecoverable. If any such indication existsand where the carrying values exceed theestimated recoverable amounts, the assetsof cash-generating units are written downto their recoverable amount.

Other financial non current assetsOther financial non current assets arerecorded at amortized costs. Theinvestment in Pechiney Nederland C.V. isvalued at historical cost as the fair valuecan not be estimated reliably.

InventoriesInventories are valued at the lower ofproduction cost and net realizable value.Costs incurred in bringing each product toits present location and conditions areaccounted for as follows:- Raw materials are stated principally at thelower of cost (first-in/first-out) or netrealizable value;

- Finished goods and work-in progress arestated at cost of direct materials andlabor and a proportion of manufacturingoverheads based on normal operatingcapacity but excluding borrowing costs.

Net realizable value is the estimated sellingprice in the ordinary course of business,less estimated costs of completion and theestimated costs necessary to make thesale.

Trade and other receivablesTrade receivables, which generally have30-60 day terms, are recognized andcarried at original invoice amount less anallowance for any uncollectible amounts.An estimate for doubtful debts is madewhen collection of the full amount is notlonger probable.

Cash and cash equivalentsCash and short-term deposits in thebalance sheet comprise cash at bank andin hand and short-term deposits with anoriginal maturity of less than one year. Forthe purpose of the consolidated cash flowstatement, cash and cash equivalentsconsist of cash and cash equivalents asdefined above.

Interest-bearing loans and borrowingsAll loans and borrowings are initiallyrecognized at cost, being the fair value ofthe consideration received net of issuecosts associated with the borrowing. Afterinitial recognition, interest-bearing loansand borrowings are subsequentlymeasured at amortized cost using theeffective interest method. Amortized cost iscalculated by taking into account any issuecosts, and any discount or premium onsettlement. Gains and losses arerecognized in net profit or loss when theliabilities are derecognized, as well asthrough the amortization process.Borrowing costs are recognized as anexpense when incurred.

ProvisionsProvisions are recognized when the Grouphas a present obligation (legal orconstructive) as a result of a past event, itis probable that an outflow of resourcesembodying economic benefits will berequired to settle the obligation and areliable estimate can be made of the

amount of the obligation. Where the Groupexpects some or all of a provision to bereimbursed, for example under aninsurance contract, the reimbursement isrecognized as a separate asset but onlywhen the reimbursement is virtually certain.The expense relating to any provision ispresented in the income statement net ofany reimbursement. If the effect of the timevalue of money is material, provisions aredetermined by discounting the expectedfuture cash flows at a pre-tax rate thatreflects current market assessments of thetime value of money and, whereappropriate, the risks specific to the liability.Where discounting is used, the increase inthe provision due to the passage of time isrecognized as a borrowing cost.

Pensions and other post-employmentbenefitsThe Group operates three defined benefitpension schemes, all of which requirecontributions to be made to separatelyadministered funds.

The cost of providing benefits under theplans is determined separately for eachplan using the projected unit creditactuarial valuation method. Actuarial gainsand losses are recognized as income orexpense when the net cumulativeunrecognized actuarial gains and losses foreach individual plan at the end of theprevious reporting year exceed 10% of thehigher of the defined benefit obligation andthe fair value of plan assets at that date.These gains or losses are recognized overthe expected average remaining workinglives of the employees participating in theplans.

The past service cost is recognized as anexpense on a straight-line basis over theaverage period until the benefits becomevested. If the benefits are already vestedimmediately following the introduction of,or changes to a pension plan, past servicecost is recognized immediately.The defined benefit liability is the aggregateof the present value of the defined benefitobligation and actuarial gains and lossesnot recognized and the fair value of planassets. If such aggregate is negative, theasset is measured at the lower of suchaggregate or the aggregate of cumulativeunrecognized net actuarial losses and pastservice cost and the present value of anyeconomic benefits available in the form ofrefunds from the plan or reductions in thefuture contributions to the plan.If the asset is measured at the aggregateof cumulative unrecognized net actuariallosses and past service cost and thepresent value of any economic benefitsavailable in the form of refunds from theplan or reduction in the future contributionsto the plan, net actuarial losses of thecurrent period and past service cost of thecurrent period are recognized immediatelyto the extent that they exceed anyreduction in the present value of thoseeconomic benefits. If there is no change or


Notes to consolidated financial statements

39

an increase in the present value of theeconomic benefits, the entire net actuariallosses of the current period and pastservice cost of the current period arerecognized immediately. Similarly, netactuarial gains of the current period afterthe deduction of past service cost of thecurrent period exceeding any increase inthe present value of the economic benefitsstated above are recognized immediately ifthe asset is measured at the aggregate ofcumulative unrecognized net actuariallosses and past service cost and thepresent value of any economic benefitsavailable in the form of refunds from theplan or reductions in the futurecontributions to the plan. If there is nochange or a decrease in the present valueof the economic benefits, the entire netactuarial gains of the current period afterthe deduction of past service cost of thecurrent period are recognized immediately.

The Group also operates a number ofdefined contribution pension plans. Thecost of providing contributions under theplans is charged to the income statementin the period to which the contributionsrelate.

Share-based payments/option plansShare-based payments are expensed onthe basis of their value determined byusing option pricing models. The share-based payments qualify as cash-settledtransactions and are measured initially atfair value at the grant date using the Black-Scholes formula, taking into account theterms and conditions upon which theinstruments were granted (see Note 22employee benefits). This fair value isexpensed over the period until vesting withrecognition of a corresponding liability.The liability is re-measured at each balancesheet date up to and including thesettlement date with changes in fair valuerecognized in the income statement.

Treasury sharesOwn equity instruments which arereacquired (treasury shares) are deductedfrom equity. No gain or loss is recognizedin the income statement on the purchase,sale, issue or cancellation of the Group’sown equity instruments.

LeasesLeases which do not transfer to the Groupsubstantially all the risks and benefits ofownership of the asset are classified asoperating leases. Operating leasepayments are recognized as an expense inthe income statement on a straight-linebasis over the lease term.

Net salesNet sales are recognized to the extent thatit is probable that the economic benefitswill flow to the Group and the net salescan be reliably measured.Net sales represent the invoiced value ofmanufactured products delivered tocustomers net of freight, returns,

allowances and sales tax. Net sales arerecognized when the significant risks andrewards of ownership of the goods havepassed to the buyer and can be reliablymeasured. Cost of sales are recorded inthe same period as sales are recognized.Other revenues and expenses are recordedin the period in which they originate.

Metals tradingMetals trading is presented on a net basisas these activities classify as broker/traderactivities. Metals trading sales are excludedfrom net sales. Gross profit on metalstrading represents the margin earned onbulk metals delivered to clients net of directacquisition and trading costs.

Research and developmentResearch costs are expensed as incurred.Development costs are capitalized if it isprobable that the expected futureeconomic benefits that are attributable tothe asset will flow to the entity; and thecost of the asset can be measured reliably.

Income taxCurrent tax assets and liabilities for thecurrent and prior years are measured atthe amount expected to be recovered fromor paid to the taxation authorities. The taxrates and tax laws used to compute theamount are those that are enacted orsubstantially enacted at the balance sheetdate.

Deferred income tax is provided, using theliability method, on all temporarydifferences at the balance sheet datebetween the tax basis of assets andliabilities and their carrying amounts forfinancial reporting purposes. Deferredincome tax liabilities are recognized for alltaxable temporary differences such as thevalue of inventories, fixed assets andprovisions for tax purposes which differfrom the value used for financial reportingpurposes, except where the deferredincome tax liability arises from the initialrecognition of goodwill or the initialrecognition of an asset or liability in atransaction that is not a businesscombination and, at the time of thetransaction, affects neither the accountingprofit nor taxable profit or loss; and inrespect of taxable temporary differencesassociated with investments insubsidiaries, associates and interests injoint ventures, except where the timing ofthe reversal of the temporary differencescan be controlled and it is probable thatthe temporary differences will not reverse inthe foreseeable future.

Deferred income tax assets are recognizedfor all deductible temporary differences,carry-forward of unused tax assets andunused tax losses, to the extent that it isprobable that taxable profit will be availableagainst which the deductible temporarydifferences, and the carry-forward ofunused tax assets and unused tax lossescan be utilized, except where the deferred

income tax asset relating to the deductibletemporary difference arises from the initialrecognition of an asset or liability in atransaction that is not a businesscombination and, at the time of thetransaction, affects neither the accountingprofit nor taxable profit or loss; and inrespect of deductible temporary differencesassociated with investments insubsidiaries, associates and interests injoint ventures, deferred tax assets are onlyrecognized to the extent that it is probablethat the temporary differences will reversein the foreseeable future and taxable profitwill be available against which thetemporary differences can be utilized.

The carrying amount of deferred incometax assets is reviewed at each balancesheet date and reduced to the extent thatit is no longer probable that sufficienttaxable profit will be available to allow all orpart of the deferred income tax asset to beutilized.

Deferred income tax assets and liabilitiesare measured at the tax rates that areexpected to apply to the year when theasset is realized or the liability is settled,based on tax rates (and tax laws) that havebeen enacted or substantially enacted atthe balance sheet date.

Income taxes relating to items recognizeddirectly in equity are recognized in equityand not in the income statement.

Revenues, expenses and assets arerecognized net of the amount of sales taxexcept:- where the sales tax incurred on apurchase of goods and services is notrecoverable from the taxation authority, inwhich case the sales tax is recognized aspart of the cost of acquisition of the assetor as part of the expense item asapplicable; and

- receivables and payables are stated withthe amount of sales tax included.

The net amount of sales tax recoverablefrom, or payable to, the taxation authorityis included as part of receivables orpayables in the balance sheet.

Derecognition of financial instrumentsThe derecognition of a financial instrumenttakes place when the Group no longercontrols the contractual rights thatcomprise the financial instrument, which isnormally the case when the instrument issold, or all the cash flows attributable tothe instrument are passed through to anindependent third party.

Derivative financial instrumentsThe Group uses derivative financialinstruments such as foreign currencycontracts, interest rate swaps and metalsfutures to hedge its risks associated withinterest rate, metal commodities andforeign currency fluctuations. Suchderivative financial instruments are stated


40

at fair value. Derivatives are carried asassets when the fair value is positive andas liabilities when the fair value is negative.Any gains or losses arising from changes infair value on derivatives are taken directlyto the income statement. No hedgeaccounting is applied.

The fair value of a financial instrument isthe amount for which an asset could beexchanged, or a liability settled, betweenknowledgeable, willing parties in an arm’slength transaction. Fair values aredetermined from listed market prices, pricequotations from banks or from pricingmodels.

Investment portfolioThe investment portfolio is reportedseparately on the balance sheet at fairvalue. Net results of the investmentportfolio are reported separately. Thirdparties participating in the investmentportfolio are presented separately undertrade and other payables. The individualinvestments held by the various investmentfunds are valued at fair value by the fund.The net asset values reported by the fundmanagers are adjusted (discounted) bymanagement as management expects thatit may not be able to fully realize theunderlying fair values of the investmentsheld by the investment funds. Thisassessment is made by individual fundsand the valuation is adjusted accordingly.

IFRS accounting standards effective asfrom 2007The Company has adopted the followingnew and amended IFRS Guidelines duringthe year. Adoption of these revisedstandards did not have any effect on thefinancial statements of the Company. Theydid however give rise to additionaldisclosures. The principal effects of thesechanges are as follows:

IFRS 7 Financial Instruments: DisclosuresThis standard requires disclosures thatenable users of the financial statements toevaluate the significance of the Company’sfinancial instruments and the nature andextent of risks arising from those financialinstruments. The new disclosures areincluded throughout the financialstatements.

IAS 1 Presentation of FinancialStatementsThis amendment requires the Group tomake new disclosures to enable users ofthe financial statements to evaluate theCompany’s objectives, policies andprocesses for managing capital. Thesenew disclosures are shown in note 25.

IFRIC 8 Scope of IFRS 2This interpretation requires IFRS 2 to beapplied to any arrangements in which theentity cannot identify specifically some orall of the goods received, in particularwhere equity instruments are issued forconsideration which appears to be less



than fair value. As equity instruments areonly issued to employees in accordancewith the employee share scheme, theinterpretation had no impact on thefinancial position or performance of theCompany.

IFRIC 9 Reassessment of EmbeddedDerivativesIFRIC 9 states that the date to assess theexistence of an embedded derivative is thedate that an entity first becomes a party tothe contract, with reassessment only ifthere is a change to the contract thatsignificantly modifies the cash flows. As theCompany has no embedded derivativerequiring separation from the host contract,the interpretation had no impact on thefinancial position or performance of theCompany.

IFRIC 10 Interim Financial Reporting andImpairmentThe Company adopted IFRIC Interpretation10 as of 1 January 2007, which requiresthat an entity must not reverse animpairment loss recognized in a previousinterim period in respect of goodwill or aninvestment in either an equity instrument ora financial asset carried at cost. As theCompany had no impairment lossespreviously reversed, the interpretation hadno impact on the financial position orperformance of the Company.

Future Changes in AccountingPrinciplesThe Company has not applied thefollowing IFRS Guidelines, which havebeen issued but have not yet entered intoforce:

IFRS 8 Operating SegmentsIFRS 8 was issued in November 2006 andis effective for annual periods beginning onor after 1 January 2009. IFRS 8 requiresentities to disclose segment informationreviewed by the entity’s chief operatingdecision maker. The impact of thisstandard on the other segment disclosuresis still to be determined. As this is adisclosure standard, it will have no impacton the financial position or financialperformance of the Company.

IFRIC 11 IFRS 2 Group and TreasuryShare TransactionsIFRIC 11 requires arrangements wherebyan employee is granted rights to an entity’sequity instruments to be accounted for asan equity-settled scheme, even if the entitybuys the instruments from another party, orthe shareholders provide the equityinstruments needed. This interpretation willhave no impact on the consolidatedfinancial position or financial performanceof the Company.

IAS 23 Borrowing CostsA revised IAS 23 Borrowing Costs wasissued in March 2007, and becomeseffective for financial years beginning on orafter 1 January 2009. The standard has

been revised to require capitalization ofborrowing costs when such costs relate toa qualifying asset. A qualifying asset is anasset that necessarily takes a substantialperiod of time to get ready for its intendeduse or sale. In accordance with thetransitional requirements in the Standard,the Company will adopt this as aprospective change. Accordingly borrowingcosts will be capitalized on qualifyingassets with a commencement date after1 January 2009. No changes will be madefor borrowing costs incurred to this datethat have been expensed.

IFRIC 12 Service ConcessionArrangementsIFRIC Interpretation 12 was issued inNovember 2006 and becomes effectivefor annual periods beginning on or after1 January 2008. This Interpretation appliesto service concession operators andexplains how to account for the obligationsundertaken and rights received in serviceconcession arrangements. Thisinterpretation will have no impact on theCompany.

IFRIC 13 Customer Loyalty ProgrammesIFRIC Interpretation 13 was issued in June2007 and becomes effective for annualperiods beginning on or after 1 July 2008.This Interpretation requires customer loyaltyaward credits to be accounted for as aseparate component of the salestransaction in which they are granted andtherefore part of the fair value of theconsideration received is allocated to theaward credits and deferred over the periodthat the award credits are fulfilled. TheCompany expects that this Interpretationwill have no impact on the Group’s financialstatements as no such schemes currentlyexist.

IFRIC 14 IAS 19 The Limit on a DefinedBenefit Asset, Minimum FundingRequirements and their InteractionIFRIC Interpretation 14 was issued in July2007 and becomes effective for annualperiods beginning on or after 1 January2008. This interpretation provides guidanceon how to assess the limit on the amountof surplus in a defined benefit scheme thatcan be recognized as an asset under IAS19 Employee Benefits. The impact of theInterpretation is still to be determined.

41

3. Segment information

The Group’s primary reporting format is business segments and its secondary format is geographical segments. The business segmentsare organized and managed separately according to the nature of the products and services provided, with each segment representing astrategic business unit that offers different products and serves different markets. The window coverings segment relates to sales andmanufacturing of window coverings and architectural products for commercial and residential use. The investment segment relates to theGroup’s investment portfolio which is invested in marketable securities in a variety of asset classes, including hedged equities, arbitrage,financial trading and fixed income. The metal trading segment represents trading in metals mainly in contracts on bulk metals. Transferprices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. The Group’sgeographical segments are determined by the location of the Group’s assets and operations.

Business segmentsThe following table presents revenue and income information and certain asset and liability information regarding the Group’s businesssegments for the years ended 31 December 2007 and 2006.

Window Investment Metals

Amounts in USD x millions Coverings Portfolio Trading Reclassification Total

| 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 |


Revenue

Sales to external customers 3,028 2,630 3,028 2,630

Segment revenue 3,028 2,630 0 0 3,028 2,630

Total gross profit 1,230 1,111 20 24 1,250 1,135

Selling and marketing expense -539 -454 -539 -454

General and administrative expense -381 -335 -6 -5 -5 -5 6 5 -386 -340

Income from operations 310 322 -6 -5 15 19 6 5 325 341

Finance costs -38 -27 -39 -32 -2 -3 39 32 -40 -30

Finance income 46 42 62 66 108 108

Other expense -24 -24

Gross result investment portfolio 117 110 -117 -110

Third party interest in investment portfolio -10 -7 10 7

Income before taxes 294 337 62 66 13 16 369 419

Taxes on income -54 -85 -5 -6 -59 -91

Net profit 240 252 62 66 8 10 310 328

Net profit attributable to minority interest 1 1 1 1

Net profit attributable to

equity shareholders 239 251 62 66 8 10 309 327

Assets and liabilities

Segment assets 2,491 2,025 849 771 109 162 3,449 2,958

Investment in an associate 1 14 1 14

Total assets 2,492 2,039 849 771 109 162 3,450 2,972

Segment liabilities 537 422 849 771 95 96 1,481 1,289

Total liabilities 537 422 849 771 95 96 1,481 1,289

Net assets employed 1,830 1,455 19 67 1,849 1,522

Other segment information

Capital expenditure:

Property, plant and equipment 140 107 140 107

Depreciation 85 70 85 70

The geographical segment information is reported separately on page 21.

42



4. Revenues and expenses

Finance costs

Bank loans and overdraft -17 -3

Other loans (including convertible non-cumulative

redeemable preference shares) -19 -27

Non-operational exchange result -4

Total finance costs -40 -30

Finance income

Bank interest receivable 4 3

Net Result Investment Portfolio 101 98

Non-operational exchange result 6

Other financial income 3 1

Total finance income 108 108

Other expense

Loss on sale Pechiney Nederland C.V.

minority participation -24 0

Depreciation, amortization and costs of inventories included in consolidated

income statement

Included in cost of sales:

Depreciation of property, plant and equipment 70 66

Costs of inventories recognized as an expense 1,728 1,453

1,798 1,519

Included in general and administrative expenses:

Minimum lease payments recognized as an operating

lease expense 9 9

Amortization other intangibles 6 4

Employee benefits expense

Wages and salaries 738 643

Social security costs 125 112

Pension costs 44 36

Expense of share-based payments 1 12

908 803

Research costs

Research costs consist of 33 (2006: 27) charged directly to general and administrative

expense in the income statement.

Amounts in millions | 2007 | | 2006 |

43

Recognized Carrying Recognized Carrying

on acquisitions value on acquisitions value

| 2007 | | 2007 | | 2006 | | 2006 |

Property, plant and equipment 35 35 39 39

Patents and trademarks 39

Intangibles 18

Inventories 23 23 34 34

Trade and other receivables 25 25 48 48

Cash and short-term deposits 10 10 11 11

Long-term interest-bearing loans and borrowings -7 -7 -28 -28

Provisions -9 -9 -4 -4

Deferred income tax liabilities -9

Trade and other payables -30 -30 -61 -61

Short-term interest-bearing loans and borrowings -6 -6 -11 -11

Fair value of net assets 71 59 28 28

Goodwill arising on acquisitions 55 11

Total consideration 126 39

Cash outflow on acquisitions:

Cash paid -126 -39

Net cash acquired with acquisitions 10 11

-116 -28

On a yearly basis net sales of the in 2007 acquired companies would have been 140 (included in actual 108).

Relative profitability of the acquisitions is in line with the business segments.

None of these acquisitions are individually significant.


5. Business combination

In 2007 Hunter Douglas acquired the following companies:- 100% of Vista Products, a Sarasota, Florida (USA) based fabricator of window coverings employing 300 people, since January.- 100% of 3form, a Salt Lake City (USA) based manufacturer of architectural products employing 310 people, since March.- 100% of ESI, a Broomfield, Colorado (USA) based developer of window covering motor controls employing 18 people, since March.- 100% of Hexcelscreen, a Lyon (France) based manufacturer of glass fiber sun screen fabric employing 137 people, since May.- 100% of NBK, an Emmerich (Germany) manufacturer of terracotta façades employing 85 people, since October.

In 2006 Hunter Douglas acquired the following companies:- 100% of Elmar Window Fashions, USA.- 100% of Newell Rubbermaid, Scandinavia.- 100% of Hofesa Home Fittings, Portugal.- 49% of Gardinia, Germany.

All 2007 and 2006 acquisitions relate to the window coverings business segment.

The fair value of the identifiable assets and liabilities of these companies provisionally determined as at the date of acquisition are:

44



7. Intangible fixed assets

At 1 January 176 154 24 24 200 178

Additions 8 8

Acquisitions 55 11 39 94 11

Amortizations -6 -4 -6 -4

Exchange 5 11 4 5 15

At 31 December 236 176 65 24 301 200

At 1 January

Cost 176 154 28 24 204 178

Accumulated amortization -4 -4

Net carrying amount 176 154 24 24 200 178

At 31 December

Cost 236 176 75 28 311 204

Accumulated amortization -10 -4 -10 -4

Net carrying amount 236 176 65 24 301 200

Goodwill is not amortized but is subject to annual impairment testing (see note 6). Patents and trademarks are amortized between 5 and10 years. For the 2007 acquisitions the fair value amounts are provisional. These will be finalized in 2008. For the 2006 acquisitions thevaluation of the patents and trademarks showed that the fair value at the date of acquisition was similar to the provisional value.

Goodwill Patents & Trademarks Total

Amounts in millions | 2007 | | 2006 | | 2007 | | 2006 | | 2007 | | 2006 |

6. Impairment testing of indefinitely lived goodwill, patents and licenses

The carrying amount of goodwill is allocated to the cash-generating units within the window coverings segment.The recoverable amount of the units is based on value-in-use calculations. Those calculations use cash flow projections based on thebudget for the coming year extrapolated with no growth to determine the termination value. A post-tax Weighted Average Cost of Capital(WACC) of 10.7% (2006: 10.6%) has been used as a basis to discount the projected cash flows. Per unit local market conditions areaccounted for in determining next year’s budget. The budgets are founded on achieved results in the preceding years and expectations onlocal industry developments going forward. With regard to the assessment of value in use, management believes that no reasonablypossible change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its recoverableamount.

45

9. Other financial non current assets

Investment in Pechiney Nederland C.V. 11

Receivables from key management employees 2 2

Other long-term receivables 21 22

Other long-term receivables Pechiney Nederland C.V. 17

Other 7 6

30 58



10. Inventories

Raw materials (at cost) 441 431

Work-in-progress (at cost) 57 49

Finished goods:

- At cost 313 261

- Provision -103 -95

708 646


Land & Machinery & Other fixed

Amounts in millions Buildings Equipment assets Total

| 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 |

At 1 January, net of accumulated depreciation 284 231 212 179 26 23 522 433

Additions 62 28 72 75 6 4 140 107

Disposals -22 -3 -5 -5 -1 -1 -28 -9

Acquisitions 17 30 18 9 35 39

Depreciation charge for the year -16 -12 -65 -54 -4 -4 -85 -70

Exchange 18 10 17 8 2 4 37 22

At 31 December, net of accumulated depreciation 343 284 249 212 29 26 621 522

At 1 January

Cost 451 364 902 788 75 66 1,428 1,218

Accumulated depreciation -167 -133 -690 -609 -49 -43 -906 -785

Net carrying amount 284 231 212 179 26 23 522 433

At 31 December

Cost 528 451 1,022 902 85 75 1,635 1,428

Accumulated depreciation -185 -167 -773 -690 -56 -49 -1,014 -906

Net carrying amount 343 284 249 212 29 26 621 522

Included in Property, plant and equipment at 31 December 2007 is an amount of 44 (2006: 73) relating to expenditure in construction.

8. Property, plant and equipment

46



12. Prepayments

Prepaid expenses 151 91

Prepaid taxes 15 14

Other 4 4

170 109


As at 31 December the ageing of trade receivables that were not impaired is as follows:

Not due Past due

Amounts in millions < 30 days 30-60 days 60-90 days 90-120 days > 120 days

2007 313 109 27 14 17

2006 289 102 28 16 15

11. Trade and other receivables (current)

Trade receivables 480 450

Financial institutions and brokers 113 39

Short-term loans and advances 15 13

608 502

Trade receivables are non-interest-bearing and are generally on 30-60 day terms. The netamount of sales tax receivable and sales tax payable is non-interest-bearing and is remittedto the appropriate taxation authorities on a quarterly basis.


As at 31 December 2007, trade receivables at nominal value of 38 (2006: 39) were impaired and fully provided for.Movements in the provision for impairment of trade receivables were as follows:

At 1 January 39 37

Additions 15 14

Deductions -18 -14

Exchange 2 2

At 31 December 38 39


47Hunter Douglas Annual Report 2007 � Notes to consolidated financial statements

13. Investment portfolio

Hunter Douglas has had an investment portfolio since mid-1991. Management of the investments is delegated after screening to a widelydiversified range of independent managers. Hunter Douglas does not control or influence the manager’s investments. The Net Asset Value(NAV) of the investments is determined and advised each month by the funds’ administrators. Hunter Douglas monitors each manager’sresults on a monthly basis. Hunter Douglas limits the portfolio’s risk by initially generally investing less than 0.5% of the total portfolio ineach fund. At year-end 2007, Hunter Douglas had investments in more than 200 funds in a wide range of asset classes, industries,geographies, currencies and with differing risk profiles. The broad diversification of the portfolio reduces the risk per manager and mitigatesthe risk of fluctuations in markets and interest and exchange rates. The fair value of the investment portfolio at year-end 2007 was 849million. The discount applied to the gross values is 72 million (2006: 66 million).

The investment portfolio has earned the gross percentage returns and had year-end book values as indicated in the table below:

The breakdown of the gross value of the Investment Portfolio per year-end 2007 by asset class and geography as well as its liquidity isshown below:

Investment portfolio at

year-end 305 353 564 590 680 771 849

Percent gross return (in USD) before

attributed interest and expenses 8.3% 4.3% 21.3% 16.1% 8.8% 16.9% 14.4%

Amounts in millions | 2001 | | 2002 | | 2003 | | 2004 | | 2005 | | 2006 | | 2007 |

Number of Funds 188 6 10 204

USD mln 877 15 29 921

In % 95.2% 1.6% 3.2% 100%

* Subject to Gates 15 - 25% per month/quarter

Liquidity Breakdown < 90 Days* > 90 Days* > 180 Days* Total

Equity L/S 61% (125)

Equity Long only 2% (5)

Commodities 6% (12)

Quants + CTA’s 7% (14)

Macro 5% (10)

Arbitrage 7% (14)

Fixed Income 12% (24)

Europe 15% (31)

North America 25% (52)

International 31% (61)

Asia 10% (21)

Emerging Markets 19% (39)

% Funds by Sector % Funds Geographic Allocation

(No. of Funds) (No. of Funds)

Ordinary shares

Numbers x 1,000 | 2007 | | 2006 |

| € 0.24 each | | € 0.24 each |Issued and fully paid-in

At 1 January 42,207 42,207

Stock dividend

At 31 December 42,207 42,207

Treasury shares

At 1 January 305 397

At 31 December 3 305

Mr. R. Sonnenberg, indirectly or through trusts, owned or controlled at year-end 200730,163,166 common shares of Hunter Douglas N.V. representing 71.47% of the commonshares of the company.

The company has two share option schemes under which options to subscribe for thecompany’s shares have been granted to certain executives and senior employees(note 22).

Share premium: under present Dutch practice, substantially all share premium may bedistributed as stock dividend free from Dutch dividend withholding tax.

Foreign currency translation reserve is a legal reserve and when negative the retainedearnings cannot be distributed for this amount.

Retained earnings: this reserve is freely distributable.

There are no external capital requirements.

15. Issued capital and reserves

14. Cash and short-term deposits

Cash at bank and in hand earns interest at floating rates based on market conditions. Short-term deposits are made for varying periods ofbetween one day and one year depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. The fair value of cash and cash equivalents is 72 (2006: 87).

At 31 December 2007, the Group had available 396 (2006: 226) of undrawn committed borrowing facilities in respect of which allconditions precedent had been met. For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise thefollowing at 31 December:

Cash at bank and in hand 32 31

Short-term deposits 40 56

72 87

Funds in certain countries in which the Group operates are subject to varying exchange regulations. No material restrictions exist fortransfers of a current nature, such as dividends from subsidiaries. A few countries have more severe restrictions on remittances of a capitalnature.


48 Hunter Douglas Annual Report 2007 � Notes to consolidated financial statements



Interest Maturity

Amounts in millions Currency rate date | 2007 | | 2006 |

Current

Bank Overdraft Various* N/A 15 19

Short-term Bankloans Various* N/A 100 34

Current Portion of LT Debt USD Various* N/A 40 108

155 161

Non current

US Notes USD 4.47 18-12-2008 37

US Notes USD 4.72 18-12-2009 55 55

US Notes USD 4.97 18-12-2010 52 52

US Notes USD 5.01 28-5-2013 100 100

IRB Suntrust USD Various* 2019 6 6

IRB Pinellas County USD Various* 2022 5 5

IRB Suntrust USD Various* 2020 7

IRB Washington USD Various* 2022 7 7

ABN AMRO Bank USD Various* 2012 134 19

ABN AMRO Bank JPY Various* 2012 6 6

ING Bank EUR Various* 2012 75

ING Bank USD Various* 2012 40

Long-term Loans (Fixed) EUR Various* Various 11 18

Long-term Loans (Variable) EUR Variable Various 1 2

492 314

Preferred Shares

Preferred Shares EUR Various* N/A 14 12

Cum. Preferred Shares EUR Various* N/A 79

14 91

* Mostly at Interbank rates plus a margin

Average life of long-term loans is 4.27 years (2006: 4.77 years); 44.25% are at fixed rates of interest. Total weighted average of theeffective interest of the fixed non current loans is 4.95% in the year. The balance consists mainly of multi-currency lines of credit atInterbank interest rates with varying spreads. Allmost all loans are unsecured.

For the conditions in respect of preferred shares: see page 66.

16. Interest-bearing loans and borrowings

50


18. Trade and other payables (current)

Trade payables 210 195

Accrued wages, social charges, pension expense and other compensation 225 211

Other payables and accrued expenses 103 97

Third parties participating in the investment portfolio (mainly related parties) 59 49

Commissions, discounts and allowances 37 35

Other 51 33

685 620

Terms and conditions of the above financial liabilities:Trade payables are non-interest-bearing and are normally settled on 45-day terms.Other payables are non-interest-bearing and have an average term of 6 months.


At 1 January 2007 17 16 33

Acquisition of a subsidiary 9 9

Additions from income statement 14 14

Releases from income statement -4 -4

Transfer to assets -9 -9

At 31 December 2007 8 35 43

Non current 2007 8 35 43

Non current 2006 17 16 33

Amounts in millions Pensions Other Total

see note 22

17. Provisions



19. Income tax

Major components of income tax expense for the years ended 31 December 2007 and 2006 are:

Consolidated income statement

Current income tax

Current income tax charge 65 90

Adjustments in respect of current income tax of previous years -4

Deferred income tax

Relating to origination and reversal of temporary differences -2 1

Income tax expense reported in consolidated income statement 59 91

A reconciliation of income tax expense applicable to accounting profit before income tax at the statutory income tax rate to income tax

expense at the Group’s effective income tax rate for the years ended 31 December 2007 and 2006 is as follows:

| 2007 | | 2006 |

Accounting profit before income tax 369 419

At Dutch statutory income tax rate of 25.5% (2006: 29.6%) 94 124

Adjustments in respect of current income tax of previous years -4

Dutch tax loss carry forward 23 15

Impact different tax rates per country -52 -49

Relating to origination and reversal of temporary differences -2 1

At effective income tax rate of 16.0% (2006: 21.7%) 59 91

Income tax expense reported in consolidated income statement 59 91


Deferred income tax at 31 December relates to the following:

Consolidated Consolidated

Balance sheet Income statement

Amounts in millions | 2007 | | 2006 | | 2007 | | 2006 |

Deferred income tax liabilities

Revaluations of inventories 8 4 -2 1

Other 17 7

Gross deferred income tax liabilities 25 11

Deferred income tax income (expense) -2 1

The Group has tax losses of 91 (2006: 247) that are available for offset against future taxable profits of the companies in which the lossesarose. Deferred tax assets have not been recognized in respect of these losses as they may not be used to offset taxable profits elsewherein the Group and they have arisen in subsidiaries that have been loss making for some time.


52


21. Dividends paid and proposed

Declared and paid during the year:

Equity dividends on ordinary shares:

Final dividend for 2006: EUR 2.00 (2005: EUR 1.85) 124 98

Proposed for approval at AGM (not recognized as a liability as at 31 December):

Equity dividends on ordinary shares:

Final dividend for 2007: EUR 2.00 (2006: EUR 2.00) 124 124

20. Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent bythe weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary shareholders by the weighted averagenumber of ordinary shares outstanding during the year (adjusted for the effects of dilutive options).

The income and share data used in the basic and diluted earnings per share computations is as follows:


Numbers x 1,000

Weighted average number of ordinary shares for basic earnings per share 42,072 41,849

Effect of dilution:

Share options 102 202

Adjusted weighted average number of ordinary shares for diluted earnings per share 42,174 42,051

There have been no other transactions involving ordinary shares or potential ordinary shares since the reporting date and before thecompletion of these financial statements.




22. Employee benefits

Employee share incentive plansAt year-end, directors and employees of the Hunter Douglas Group had the following options to buy common shares ofHunter Douglas N.V. The table below illustrates the number and prices of share options:

Issued Number of Price per Year of

in share options share (EUR)* expiration

| 2007 | | 2006 |

2001 10,000 22.00 2006

2002 42,038 25.50 2007

2003 11,334 213,001 25.00 2008

2003 69,669 104,337 37.00 2008

2004 1,667 5,000 38.00 2009

2004 5,000 5,000 36.10 2009

2004 1,000 2,000 35.71 2009

2004 1,000 3,000 36.10 2009

2006 280,000 290,000 50.50 2011

369,670 674,376

* These prices equal the trading price of the common shares of Hunter Douglas N.V. on the AmsterdamStock Exchange on the dates when these options were granted. One option represents the right to buyone common share.

Hunter Douglas has for many years operated a stock option plan. The purpose of the plan and of the stock options granted under it is tofoster long-term employment of valued executives and employees of the Hunter Douglas Group, to associate them with the financial resultsof the Group and to interest them in the development of the public market for the shares of the company. Under the plan, stock optionsare granted in each case for a period of five years. Options granted are exercisable as long as the beneficiary of the option remains in theemployment of the Hunter Douglas Group. In the event of death, the option remains exercisable by the executor of the decedent within aperiod of three months. The average share price for the exercised options was EUR 69.86 for which 301,373 treasury shares were used.Balance treasury shares at year-end 2007: 3,136 (2006: 304,509). The carrying amount of the liability relating to the cash-settled options at31 December 2007 is 6 (2006: 21).

54 Hunter Douglas Annual Report 2007 � Notes to consolidated financial statements

Year Year Option Option Shares (HDNV common shares)

Option Option Price Outstanding Balance Balance

Grant Expiry per share 1-1-2006 Granted Exercised Lapsed 31-12-2006 Exercised Lapsed 31-12-2007

22. Employee benefits (continued)

Directors

2003 2008 € 25.00 200,000 200,000 200,000 0

2006 2011 € 50.50 270,000 270,000 270,000

200,000 270,000 470,000 200,000 0 270,000

Officers

2001 2006 € 22.00 28,335 28,335 0 0

2002 2007 € 25.50 36,667 36,667 36,667 0

2003 2008 € 37.00 60,000 3,333 56,667 6,667 50,000

2006 2011 € 50.50 10,000 10,000 10,000

125,002 10,000 31,668 103,334 43,334 0 60,000

Other employees

2001 2006 € 22.00 28,334 18,334 10,000 10,000 0

2002 2007 € 25.50 23,069 17,698 5,371 5,371 0

2003 2008 € 25.00 16,334 3,333 13,001 1,667 11,334

2003 2008 € 37.00 80,000 20,664 11,666 46,670 24,668 3,333 19,669

2004 2009 € 38.00 5,000 5,000 3,333 1,667

2004 2009 € 36.10 5,000 5,000 5,000

2004 2009 € 35.71 3,000 1,000 2,000 1,000 1,000

2004 2009 € 36.10 3,000 3,000 2,000 1,000

2006 2011 € 50.50 10,000 10,000 10,000 0

163,737 10,000 61,029 11,666 101,042 58,039 3,333 39,670

488,739 290,000 92,697 11,666 674,376 301,373 3,333 369,670

The fair value of the cash-settled options is calculated by using the Black-Scholes formula based on the following value input parameters:

Share price (In EUR) 50.68 60.90

Dividend yield (%) 3.37 3.49

Volatility (%) 26.00 21.97

Interest rates (%):

1 month N/A 3.57

1 year 4.78 4.00

2 years 4.61 4.03

3 years 4.55 4.04

4 years 4.54 4.02

5 years 4.55 4.01

Expected life of option (years) 4.00 1.40





Pension plans

Defined benefit plansEmployee pension plans have been established in many countries in accordance with the legal requirements, customs and the localsituation in the countries involved. The majority of employees in The Netherlands, United Kingdom and North America are covered bydefined benefit plans. The defined benefit plans in The Netherlands and North America are based on average wage earned, in theUnited Kingdom is the defined benefit plan based on last wage earned. The benefits provided by these plans are based on employees’years of service and compensation levels. The measurement date for defined benefit plans is 31 December.

Contributions are made by the Company, as necessary, to provide assets sufficient to meet the benefits payable to defined benefit pensionplan participants. These contributions are determined based upon various factors, including funded status, legal and tax considerations aswell as local customs.The following tables summarize the components of the net benefit expense recognized in the consolidated income statement and thefunded status and amounts recognized in the consolidated balance sheet, as well as the principal assumptions applied.

The principal assumptions used for the purpose of the actuarial valuation are as follows:

Discount rate 5.00 4.25 6.50 6.00 5.80 5.30

Expected return on scheme assets 6.35 6.35 8.50 8.50 8.06 7.95

Future salary increase 2.00 2.00 4.50 4.50 3.30 3.40

Inflation assumption 2.00 2.00 3.00 3.00 3.20 3.30

Pension plans

Amounts in millions NL US UK

| 2007 | | 2006 | | 2007 | | 2006 | | 2007 | | 2006 |

Amounts in millions NL Pension plan

| 2007 | | 2006 | | 2005 | | 2004 |

Defined-benefit obligations -317 -309 -267 -287

Fair value of plan assets 358 324 281 298

Funded status 41 15 14 11

Unrecognized actuarial gains/(losses)

Unrecognized past service cost

Effect of asset cap -41 -15 -14 -11

Net liability in balance sheet 0 0 0 0

No economic benefits are available to the Company in the form of refunds from the NL pension plan or reduction in future contributions tothe NL Pension plan.

The overall expected rate of return is calculated by weighting the individual rates in accordance with the anticipated balance in the plan’sportfolios. In accordance with IAS 19, paragraph 92, actuarial gains and losses are recognized only to the extent that they exceed thegreater of 10% of the present value of the obligations or the fair value of plan assets. The excess amount is spread over the remainingworking lives of the active employees and recognized as income or expense.

The amount recognized in the balance sheet in respect of the Group’s defined benefit retirement plans is as follows:

56



Current service cost 7 8 10 9 1 1

Past service cost 29 1

Interest cost on benefit obligation 14 11 8 7 3 2

Expected return on plan assets -21 -19 -11 -9 -3 -3

Net actuarial losses/(gains) recognized in year -25 1

Net benefit expense 0 4 7 8 2 0

Actual return on plan assets 5 18 12 13 4 2

Amounts recognized in profit or loss in respect of the defined-benefit plans are as follows:


Pension plans


| 2007 | | 2006 | | 2007 | | 2006 | | 2007 | | 2006 |

Amounts in millions US Pension plan

| 2007 | | 2006 | | 2005 | | 2004 |



Funded status 23 -15 -28 -21

Unrecognized actuarial gains/(losses) 1 7 17 7


Effect of asset cap

Net liability in balance sheet 24 -8 -11 -14

This asset is recorded under prepayments.

Amounts in millions UK Pension plan

| 2007 | | 2006 | | 2005 | | 2004 |



Funded status -10 -14 -12 -9

Unrecognized actuarial gains/(losses) 2 5 5 1


Effect of asset cap

Net liability in balance sheet -8 -9 -7 -8



Changes in the fair value of the defined-benefit obligations are as follows:

Opening defined-benefit obligations 309 267 142 132 55 46

Current service cost 7 8 10 9 1 1

Past service cost 29 1

Interest cost on benefit obligation 14 11 8 7 3 2

Benefits paid -15 -12 -3 -2 -2 -1

Actuarial (gain)/loss -36 -28 -6 -4 -1

Exchange differences 38 34 1 8

Closing defined-benefit obligations 317 309 151 142 59 55

The liability in respect of the pension obligations of Hunter Douglas Europe (NL) is based on and calculated pursuant to IAS 19.Pursuant to the Dutch Pension and Savings Law (Pensioen- en spaarfondsenwet), Hunter Douglas Europe is required to provide all pensionbenefits through a regulated pension fund.Hunter Douglas Europe has contracted with a single-employer fund (Stichting Pensioenfonds Hunter Douglas) to provide these benefits.As of the date of the financial statements, Hunter Douglas Europe has satisfied all its liabilities to the fund and has no further financialobligations to the fund.The past service cost is caused by a change in the regulations of the Dutch pension fund.

Pension plans


| 2007 | | 2006 | | 2007 | | 2006 | | 2007 | | 2006 |

Opening fair value of plan assets 324 281 127 104 41 34

Expected return on plan assets 21 20 11 13 3 3

Contributions by employer 5 4 39 12 2 1

Benefits paid -15 -12 -3 -2 -2 -1

Actuarial gain (loss) -17 -2 3

Exchange differences 40 33 2 4

Closing fair value of plan assets 358 324 174 127 49 41

Of which:

Bonds 168 142 10 17

Equities 165 167 127 60 49 41

Other 25 15 37 50

The actual return on plan assets amounts 0.8% 5.3% 8.0% 12.3% 8.3% 6.8%

The plan assets do not include any of the Group’s own financial instruments, nor any property occupied or other assets used by theGroup. The Group expects to contribute approximately 13 to its defined benefit plan in 2008. Contribution by employer will not materiallydiffer from previous years.

Defined contribution plansThe expense of the defined contribution plans for 2007 amounts to 35 (2006: 22).

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

Pension plans


| 2007 | | 2006 | | 2007 | | 2006 | | 2007 | | 2006 |

58



Within one year 26 24

After one year but not more than five years 58 59

More than five years 7 5

23. Commitments and contingencies

Operating lease commitments - Group as lesseeThe Group has entered into commercial leases on certain premises, motor vehicles and items of small machinery. These leases have anaverage life of between 5 and 10 years with renewal terms included in the contracts. Renewals at market conditions are at the option ofthe specific entity that holds the lease. There are no restrictions placed upon the lessee by entering into these leases.

Future minimum rentals payable under non-cancelable operating leases at 31 December are as follows:

Capital commitmentsAt 31 December 2007, the Group has commitments for capital expenditures of 37 (2006: 29).

Legal claimLegal claims have been filed against the Company in the course of its normal business. Management together with their legal counsel haveassessed that the chances that any legal claim would have a material financial impact on the financial statements to be remote. As a result,no provision for any legal claim filed against the Company has been made in these financial statements.

GuaranteesHunter Douglas N.V. has the following contingent liabilities at 31 December 2007:

- The Company is contingently liable for guarantees given mainly for its subsidiaries, on which no material losses are expected.- The Company forms part of a fiscal unity for Dutch corporate income tax purposes, and as such is jointly and severally liable for theliabilities of the whole fiscal unity.


24. Related party disclosuresThe consolidated financial statements include the financial statements of Hunter Douglas N.V. and the subsidiaries as listed on page 70and 71.

Compensation of key management employees (directors and officers) of the Group

Short-term employee benefits 17 13

Post-employment pension benefits 1

Share-based payments 1 8

Total compensation paid to key management employees 18 22

The cost of post-employment pension benefits relates mainly to defined contributionschemes.As per year-end loans and advances to key management employees amounted to 2(2006: 2), bearing market interest.



25. Financial risk management objectives and policiesThe Group has procedures and policies in place to control risks related to financial instruments. These policies and procedures include aclear segregation of duties between operating, settlement, accounting and controlling of all financial instruments used. The Group’s seniormanagement takes an active role in the risk management process. In addition, the geographical spread of the Company’s activities limitsthe exposures to concentrations of credit or market risk.

The Company attempts to minimize the counterparty credit risk associated with the financial instruments used by selecting counterpartiesthat it assumes to be creditworthy, given their high credit ratings.

The Company does not have significant credit risk exposure to any individual customer or counterparty. A substantial part of tradereceivables is covered by securities obtained, credit insurance or letters of credit. The Company invests in an investment portfolio. Also,the Company has concluded netting arrangements with some counterparties to offset financial instruments. Given their credit ratings, theremaining credit exposure with these counterparties is not considered of significance.

The following instruments are used:

a. Interest derivativesInterest derivatives are used to manage exposure to movements in interest rates and to assume trading positions.

b. Foreign exchange derivativesForeign exchange derivatives are used to manage the exposure of currency exchange rate risks resulting from cash flows from(anticipated) business activities and financing arrangements denominated in foreign currencies and to assume trading positions.

c. Commodity derivativesCommodity derivatives all relate to aluminium and are used to manage the exposure of the price and timing risks on underlying(anticipated) business activities and to assume trading positions. The contract amounts of financial instruments are indicative of theCompany’s use of derivatives but are not necessarily a measure for the exposure to market or credit risk through its use of financialinstruments.

Interest, commodity and foreign exchange derivatives are carried at their fair value. The interest, commodity and foreign exchangederivatives generally mature within one year. All changes in the fair value of derivatives are taken directly to the income statement as nohedge accounting is applied.

The Company also enters into forward sales and purchase contracts for commodities that are settled by physical delivery or receipt of thecommodity. These sales and purchases contracts do not qualify as derivatives under IAS 39.

Interest rate risk tableThe following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variances held constant, ofthe Group’s profit before tax (through the impact on floating rate borrowings).

Amounts in millions Increase/decrease Effect on Effect

in basis points profit before tax on equity

2007

Euro 50 1

U.S. dollar 50 1

2006

Euro 50 1

U.S. dollar 50

60



26. Financial instruments

Amounts in millions Face amount Fair value

Currency forwards

Buy 79 1

Sell -91 1

-12 2

Currency options

Buy - call 986 10

Buy - put 898 8

Sell - call -1,262 -4

Sell - put -1,406 -5

-784 9

Currency forwards are valued at existing forward rates at the balance sheet date.Currency options are valued at their market value at the balance sheet date.

Amounts in millions Tonnage Face amount Fair value

Metal derivatives

Buy 24,484 Optional -3

Sell 24,416 Optional 6

3

The value of the metal derivatives is based on quoted metal market prices. Commodity contracts that are used for tradingby Hunter Douglas Metals Inc. are also considered as derivatives and also valued based on quoted metal market prices.

25. Financial risk management objectives and policies (continued)

Foreign currency riskAs a result of significant operations in Europe, the Group’s balance sheet can be affected significantly by movements in the U.S. dollar /Euro exchange rates. The Group seeks to mitigate the effect of its structural currency exposure by borrowing in Euros. Between 20% and50% of the Group’s investment in non-USD operations will be hedged in this manner.

The following table demonstrates the sensitivity to a reasonably possible change in the Euro exchange rate, with all other variances heldconstant, of the Group’s profit before tax (due to changes in the fair value of monetary assets and liabilities) and the Group’s equity (due tochanges in the fair value of forward contracts and net investment hedges).

Amounts in millions Increase/decrease in Effect on Effect

Euro exchange rate profit before tax on equity

2007 +5% -12 16

-5% 4 -16

2006 +5% -4 16

-5% -1 -16


26. Financial instruments (continued)

Fair valuesSet out below is a comparison by category of carrying amounts and fair values of all of the Group’s financial instruments.

The fair value of derivatives and borrowings has been calculated by discounting the expected future cash flows at prevailing interest rates.The fair value of other financial assets has been calculated using the market interest rates.

Amounts in millions Carrying amount Fair value

| 2007 | | 2006 | | 2007 | | 2006 |Financial assets

Non current

Other financial assets - loans and receivables 30 58 30 58

Current

Trade receivables - loans and receivables 480 450 480 450

Financial institutions and brokers - fair value through P&L 113 39 113 39

Currency derivatives - held for trading 11 11

Metal derivatives - held for trading 6 14 6 14

Investment portfolio - fair value through P&L 849 771 849 771

Cash and short-term deposits - loans and receivables 72 87 72 87

Short-term loans - loans and receivables 15 13 15 13

1,546 1,374 1,546 1,374

Financial liabilities

Non current - loans and receivables

US Notes - fixed rates 207 244 212 235

Cumulative Preference Shares - floating rate* 79 79

Preferred shares - floating rate* 14 12 14 12

Other borrowings - floating rate* 285 70 285 70

506 405 511 396

Current

Trade payables - loans and receivables 210 195 210 195

Currency derivatives - held for trading 2 2

Metal derivatives - held for trading 3 11 3 11

Bank overdraft - floating rate* - loans and receivables 15 19 15 19

Short-term bank loans - floating rate* - loans and receivables 100 34 100 34

Current portion of long-term debt - floating rate* - loans and receivables 2 2 2 2

Current portion of long-term debt - fixed rate - loans and receivables 38 106 38 104

368 369 368 367

* For all interest-bearing loans and borrowings with a floating rate it is assumed that their fair value approximates their carrying value.

62



26. Financial instruments (continued)

Liquidity riskThe following table sets out the carrying amount, by maturity, of the Group’s financial instruments that are exposed to interest rate risk asper year ended 31 December of:

Within 1-2 2-3 3-4 4-5 More than

Amounts in millions 1 year years years years years 5 years Total

| 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 |

Within 1-2 2-3 3-4 4-5 More than

Amounts in millions 1 year years years years years 5 years Total

| 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 | | 2007 | 2006 |

Fixed rate

Loan notes 37 106 55 37 52 55 52 100 100 244 350

Bank loans 1 2 7 1 11

Floating rate

Loan notes 18 25 18 25

Bank loans 117 55 1 27 1 6 256 11 374 100

155 161 56 64 54 56 7 58 256 11 119 125 647 475

Cumulative preferred shares 79 79

Preferred shares 14 12 14 12

133 216 661 566

Interest 7 7 3 3 3 2 3 11 1 6 11 30 27

Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on financial instrumentsclassified as fixed rate is fixed until the maturity of the instrument. The other financial instruments of the Group that are not included in theabove tables are non-interest-bearing and are therefore not subject to interest rate risk.

The Group in principle does not apply hedge accounting.

27. Events after balance sheet date

On March 12, 2008 the Board of Hunter Douglas decided to offer to purchase for cash up to 13.4 million common shares held by itsminority shareholders, through a public offer of EUR 43.00 per common share. The proposed offer will not be conditioned upon anyminimum number of common shares being tendered and is not extended to the 28.8 million common shares held by Bergson, a Dutchcorporation controlled by Mr. R. Sonnenberg. Hunter Douglas will finance the proposed offer through a reduction of its investment portfolioand bank facilities.

63

Balance sheet* & statement of income - Hunter Douglas N.V.

Hunter Douglas Annual Report 2007 � Balance sheet* & statement of income - Hunter Douglas N.V.

ASSETS

Non current assets

Financial fixed assets

- Investments in subsidiaries 2 3,144 2,427

- Advances to/from subsidiaries 5 283

- Other 4 3

Total non current assets 3,153 2,713

Current assets

Accounts receivable 12 16

Accounts receivable - affiliated companies 1,114 829

Cash 62

Total current assets 1,126 907

TOTAL ASSETS 4,279 3,620

SHAREHOLDERS’ EQUITY AND LIABILITIES

Shareholders’ equity

Issued capital 3 15 13

Share premium 103 79

Treasury shares -16

Foreign currency translation 16 -41

Retained earnings 1,521 1,318

Net profit for the year 309 327

Total shareholders’ equity 1,964 1,680

Provision for pension 2 2

Non current liabilities

Long-term loans - other 4 391 335

Long-term loans - affiliated companies 36 44

427 379

Current liabilities

Short-term borrowings 51 19

Short-term portion of long-term loans 4 37 106

Accounts payable - other 27 1,425

Accounts payable - affiliated companies 1,771 9

Total current liabilities 1,886 1,559

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 4,279 3,620

STATEMENT OF INCOME

Income from subsidiaries and affiliates after taxation 367 370

Other income (expense), net -58 -43

Net Profit 309 327

* before appropriation of net profit

USD


64

Notes to financial statements

Hunter Douglas Annual Report 2007 � Notes to financial statements

1. Accounting policies

GeneralThe Company’s financial statements have been prepared in accordance with Title 9 of Book 2 of the Netherlands Civil Code. As permittedby Article 2:362 paragraph 8 of this code, the Company’s financial statements have been prepared applying the same IFRS accountingpolicies as used in the consolidated financial statements in order to maintain consistency between the figures in the consolidated andCompany’s financial statements. In accordance with Article 2:402 of the Civil Code, an abbreviated version of the income statement ispresented. The principal accounting policies adopted are the same as those set out in note 2 to the consolidated financial statementsexcept that investments in subsidiaries are stated at net asset value as the Company effectively exercises influence of significance over theoperational and financial activities of these investments. The net asset value is determined on the basis of the accounting principles appliedby the company. Certain reclassifications have been made to the 2006 company financial statements to conform to the 2007 presentation.

2. Financial fixed assets

3. Shareholders’ equityDetails are given in note 15 to the consolidated financial statements.

4. Long-term loans

Beginning of the year 2,427 2,159

Change during the year

Share in results, net 367 370

Received dividends -25 -39

Increase (decrease), net 239 151

Exchange differences 136 -214

Net change 717 268

End of year 3,144 2,427

Affiliated companies acounts to 0.1 (2006: 0.1).

Investment in subsidiaries | 2007 | | 2006 |

Unsecured loans maturing in various

installments through 2013 377 244

Average life of long-term loans is 4.05 years (2006: 4.20 years); 54.86% are at fixed rates of interest (weighted average 4.92% per year).Maturities until 2013 are: 2008 - 37, 2009 - 55, 2010 - 52, 2012 - 170 and 2013 - 100.

Preferred shares 14 12

Cumulative preferred shares 79

For the conditions in respect of preferred shares: see page 66.



65

6. Employee benefits

2006

Directors

R. Sonnenberg 2003 2008 € 25.00 200,000 200,000

R. Sonnenberg 2006 2011 € 50.50 250,000 250,000

J.T. Sherwin 2006 2011 € 50.50 20,000 20,000

200,000 270,000 470,000

2007

Directors

R. Sonnenberg 2003 2008 € 25.00 200,000 200,000 0

R. Sonnenberg 2006 2011 € 50.50 250,000 250,000

J.T. Sherwin 2006 2011 € 50.50 20,000 20,000

470,000 200,000 270,000

Compensation* paid to directors was: R. Sonnenberg nil (2006: nil), J.T. Sherwin 4,100 (2006: 4,500) as compensation and all otherdirectors 41 (2006: 37) as directors fee. No pension contributions were paid. The share option expense for the directors was 1,059.

* Amounts in thousands

5. ContingenciesThe Company is contingently liable for guarantees given mainly for its subsidiaries, on which no material losses are expected.

The Company forms part of a fiscal unity for Dutch corporate income tax purposes, and as such is jointly and severally liable for theliabilities of the whole fiscal unity.

7. EmployeesThe number of employees at year-end amounts 26 (2006: 27).

Rotterdam, 12 March 2008

Board of Directors

Notes to financial statements

Hunter Douglas Annual Report 2007 � Notes to financial statements

Year Year Option Option Shares (HDNV common shares)

Option Option Price Outstanding Balance

Grant Expiry per share January 1 Granted Exercised Lapsed December 31

see notes 1; 2 see note 2

66

Additional information

Hunter Douglas Annual Report 2007 � Additional information

1. Auditors’ report

To the Board of Directors ofHunter Douglas N.V.

Report on the financial statementsWe have audited the financial statements2007 of Hunter Douglas N.V., Curaçao,as set out on pages 32 to 65).The financial statements consist of theconsolidated financial statements and theCompany’s financial statements. Theconsolidated financial statements comprisethe consolidated balance sheet as atDecember 31, 2007, the consolidatedstatement of income, the consolidatedcash flow statement and the consolidatedstatement of changes in equity, for the yearthen ended, and a summary of significantaccounting policies and other explanatorynotes. The Company’s financial statementscomprise the Company’s balance sheet asat December 31, 2007, the Company’sstatement of income for the year thenended and the notes.

Management’s responsibilityManagement is responsible for thepreparation and fair presentation of thefinancial statements in accordance withInternational Financial Reporting Standardsas adopted by the European Union andInternational Financial Reporting Standardsas issued by the IASB and with Part 9 ofBook 2 of the Netherlands Civil Code, andfor the preparation of the Annual Report inaccordance with Part 9 of Book 2 of theNetherlands Civil Code. This responsibilityincludes: designing, implementing andmaintaining internal control relevant to thepreparation and fair presentation of thefinancial statements that are free frommaterial misstatement, whether due tofraud or error; selecting and applyingappropriate accounting policies; andmaking accounting estimates that arereasonable in the circumstances.

Auditor’s responsibilityOur responsibility is to express an opinionon the financial statements based on ouraudit. We conducted our audit inaccordance with Dutch law. This lawrequires that we comply with ethicalrequirements and plan and perform theaudit to obtain reasonable assurancewhether the financial statements are freefrom material misstatement.

An audit involves performing procedures toobtain audit evidence about the amountsand disclosures in the financial statements.The procedures selected depend on theauditor’s judgment, including theassessment of the risks of materialmisstatement of the financial statements,whether due to fraud or error. In makingthose risk assessments, the auditorconsiders internal control relevant to theentity’s preparation and fair presentation of

the financial statements in order to designaudit procedures that are appropriate inthe circumstances, but not for the purposeof expressing an opinion on theeffectiveness of the entity’s internal control.An audit also includes evaluating theappropriateness of accounting policiesused and the reasonableness ofaccounting estimates made bymanagement, as well as evaluating theoverall presentation of the financialstatements.

We believe that the audit evidence we haveobtained is sufficient and appropriate toprovide a basis for our audit opinion.

Opinion with respect to the consolidatedfinancial statementsIn our opinion, the consolidated financialstatements give a true and fair view of thefinancial position of Hunter Douglas N.V.,as at December 31, 2007, and of its resultand its cash flows for the year then endedin accordance with International FinancialReporting Standards as adopted by theEuropean Union and International FinancialReporting Standards as issued by the IASBand with Part 9 of Book 2 of theNetherlands Civil Code.

Opinion with respect to the Company’sfinancial statementsIn our opinion, the Company’s financialstatements give a true and fair view of thefinancial position of Hunter Douglas N.V.,as at December 31, 2007, and of its resultfor the year then ended in accordance withPart 9 of Book 2 of the Netherlands CivilCode.

Report on other legal and regulatoryrequirementsPursuant to the legal requirement under2:393 sub 5 part e of the Netherlands CivilCode, we report, to the extent of ourcompetence, that the Annual Report isconsistent with the financial statements asrequired by 2:391 sub 4 of the NetherlandsCivil Code.

Rotterdam, the Netherlands,March 12, 2008

for Ernst & Young Accountants

/s/ C.Th. Reckers

2. Appropriation of profits

Common sharesHunter Douglas N.V.’s Articles ofAssociation require the general meeting ofcommon, cumulative preferred andpreferred shareholders to determine thevalue of the annual common sharedividend and the meeting of commonshareholders to decide that the dividendwill be distributed in cash or alternatively,

shares. The directors recommend a cashdividend of EUR 2.00 per common share.

Preferred sharesHunter Douglas N.V.’s Articles ofAssociation fix the annual dividend on eachpreferred share at a percentage of the parvalue. This percentage amounts to 2.25%per annum over the European CentralBank’s deposit rate on the last working dayof May of the affected year. The generalmeeting of preferred shareholders is todecide whether such dividend is distributedin cash or alternatively, shares.

3. Shareholders’ meetings

The shareholders’ meetings will be held on11 June 2008 at the Avila Beach Hotel,Penstraat 130, Curaçao, starting at9.00 a.m. for the common shareholders,9.30 a.m. for the preferred shareholdersand 10.00 a.m. for the common andpreferred shareholders.

4. Dividends

Cash dividends will be distributed on allshares. Dividends declared pursuant to thepreceding paragraphs will be distributed on25 June 2008.

5. Audit and CompensationCommittees

The members for both committees are:

J.E. AndriessenC. BoonstraH.F. van den HovenA. van Tooren

6. Events after balance sheet date

On March 12, 2008 the Board ofHunter Douglas decided to offer topurchase for cash up to 13.4 millioncommon shares held by its minorityshareholders, through a public offer ofEUR 43.00 per common share. Theproposed offer will not be conditionedupon any minimum number of commonshares being tendered and is not extendedto the 28.8 million common shares heldby Bergson, a Dutch corporation controlledby Mr. R. Sonnenberg. Hunter Douglas willfinance the proposed offer through areduction of its investment portfolio andbank facilities.

67

Hunter Douglas Corporate Governance

Objectives and Sensitivity to External Factors

Hunter Douglas Annual Report 2007 � Hunter Douglas Corporate Governance

Hunter Douglas N.V. is incorporated inThe Netherlands Antilles and has itsstatutory seat in Curaçao. Hunter Douglasis therefore not subject to The NetherlandsCorporate Governance Code. However,Hunter Douglas adheres to goodCorporate Governance and follows manyof these recommendations.

Corporate Structure

Board of Directors Hunter Douglas has aone-tier corporate structure. Under itsCharter the Board of Directors isresponsible for the overall managementand control of the Company. The Board isappointed by the shareholders at theannual General Meeting. The Board hasfour regular meetings per year andadditional meetings as required. Boardmembers may not be members of morethan five boards of public companies.

Independence The Board has sixMembers, of whom four are independent.It acts collectively by majority resolution.

Functions The Board reviews the overallstrategy, financial objectives, budgets,acquisitions, divestments, capitalexpenditures, currency and aluminiumhedging, portfolio composition and returns,results and risks in the Company’sbusiness.

Audit and Compensation CommitteesThe Board has an Audit and aCompensation Committee, whose

members are independent. The AuditCommittee reviews the Company’saccounts, internal controls and meets withthe Company’s external Auditors twice ayear. The Compensation Committeereviews the Directors’ and Officers’compensation and stock options.

Chairman & CEOMr. Ralph Sonnenberg is Chairman of theBoard of Directors and Chief ExecutiveOfficer.

Officers The Board annually appoints theOfficers of the Company - the CEO, theCo-Presidents, four regionally responsibleVice Presidents, two Staff Vice Presidentsand a Corporate Secretary. The VicePresidents and Corporate Secretary reportto the CEO.

Internal Controls

The Company has the following keyinternal controls.

Conflicts of Interest Policy TheCompany has a ‘Conflicts of InterestPolicy’ applicable to all key employeeswhich covers relations with customers,suppliers and other third parties.

Insider Trading Policy The Company hasan ‘Insider Trading Policy’, as prescribedby the Authority Financial Markets (‘AFM’),restricting trading in the Company’s sharesby Directors, Officers, key employees andrelated persons.

Internal Audit Function Hunter Douglas’principal Operating Companies have anInternal Audit Program.

Authority Limits Every Manager, includingthe Regional Vice Presidents, has clearlydefined Authority Limits.

Whistleblower Policy Hunter Douglashas a ‘Whistleblower’ Policy in eachCompany.

Compensation

Compensation is reviewed by theCompensation Committee of the Board.The Company also follows the ‘bestpractices’:

Stock Options Stock options are grantedfor five years with vesting starting after twoyears.

Stock It is not the Company’s Policy toprovide stock at no cost.

Loans to Directors, Officers or otheremployees bear market interest. There isno forgiveness of principal or interest.

Investor Relations

Hunter Douglas has an Investor RelationsWebsite, regularly issues press releasesand holds analysts’ and investor meetings.

Objectives

The Company’s objectives are to:

• Expand its Window Coverings andArchitectural Products businesses at agrowth rate exceeding that of the marketwhile continuing to be the best companyin the industry;

• Develop and introduce innovative newproducts;

• Seek acquisitions that add to theCompany’s organic growth by expandingproduct lines or distribution and thatmeet its return targets;

• Continue with an efficient decentralizedentrepreneurial organization, based onthe principle of ‘maximum accountabilitywith minimum interference’.

Sensitivity to External Factors

The Company’s results are sensitive toexternal factors of which the following aremost influential:

• Overall economic activity and particularlyconsumer confidence which affectsdemand for consumer durables;

• Prices for raw materials, in particular:aluminium, steel, fabric, synthetics andother oil based products;

• Exchange rates: The majority of theCompany’s sales and profits are realizedoutside the Euro zone. Euro rates againstthe dollar and other currencies cantherefore affect the Company’s results.Hunter Douglas’ policy is to generallyhedge transactional exposures, toselectively hedge translation of earnings,and generally not to hedge balance sheetexposures.

68

Five-year summary

Hunter Douglas Annual Report 2007 � Five-year summary

USD

Millions, except per share data Notes | 2007 | | 2006 | | 2005 | | 2004 | | 2003 |

Net sales 3,028 2,630 2,397 2,150 1,870

Income from Operations (EBIT) 325 341 299 241 182

Net Profit from Operations (before extraordinary loss) 271 261 199 169 141

Extraordinary loss on sale Vlissingen smelter participation -24

Net Profit from Operations including extraordinary loss 247 261 199 169 141

Net Result Investment Portfolio 62 66 24 61 33

Total Net Profit 309 327 223 230 174

Operating cash flow 187 279 247 284 284

Investments in tangible fixed assets 140 107 82 67 68

Depreciation of tangible fixed assets 85 70 67 70 68

Net Assets Employed 1,849 1,522 1,332 1,252 1,213

Shareholders’ equity 1,964 1,680 1,403 1,267 1,097

Per common share

- Total Net Profit 1 7.35 7.82 5.35 5.55 4.46

- Operating Cash flow 1 4.44 6.67 5.93 6.80 6.55

- Shareholders’ equity 2 46.54 40.09 33.56 30.47 25.66

- Dividend in EUR (proposed for 2007) 2.00 2.00 1.85 1.35 1.30

Average annual exchange rate EUR/USD 1.38 1.26 1.25 1.25 1.13

Year-end exchange rate EUR/USD 1.47 1.32 1.18 1.37 1.26

Average number of outstanding

common shares (thousands) 3 42,072 41,849 41,680 41,721 43,252

Year-end number of outstanding

common shares (thousands) 3 42,204 41,902 41,810 41,579 42,754

1 Based on average number of shares outstanding during affected year, adjusted for stock dividends and treasury shares, where applicable.2 Based on number of shares outstanding at year-end, adjusted for stock dividends and treasury shares, where applicable.3 Adjusted for stock dividends and treasury shares, where applicable.

69Hunter Douglas Annual Report 2007 � Duette® Vertiglide™ Honeycomb Shades

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Europe, Middle East and Africawww.hunterdouglas.nl

BelgiumHunter Douglas Belgium, LokerenLuxaflex Belgium, BrugesHelioscreen, Lokeren

BulgariaHunter Douglas Bulgaria, Sofia

CroatiaHunter Douglas Croatia, Zagreb

CzechiaHunter Douglas Czechia, PragueHunter Douglas Kadan, Kadan

DenmarkWindow Fashions Scandinavia, Risskov

FinlandWindow Fashions Scandinavia, Nurmijärdi

FranceHunter Douglas, ParisLuxalon Plafonds France, BonneuilFiltersun/Goeland, La Loupe, Tremblay leVillageHexcelscreen, LyonLuxaflex France, TourcoingTurnils, StrassbourgMermet Industries, Veyrins-Thuellin

GermanyBlöcker, BremenHunter Douglas, Düsseldorf, Bremerhaven,KasselHunter Douglas Produktions, GlauchauHunter Douglas Architektur-Systeme,Haan, HohenbrunnGardinia, Isny (49%)NBK, Emmerich

HungaryHunter Douglas Hungary, Budapest

IrelandT.M. Blinds, Newcastle

ItalyHunter Douglas Italia, MilanShade-O-Matic, Terracina

NetherlandsHunter Douglas, RotterdamHunter Douglas Europe, Rotterdam, Leek,OudenboschHunter Douglas Construction Elements,LeekIndustrie- en Handelsonderneming‘Buismetaal’, RotterdamArtex, Aarle-RixtelHCI Holland Coatings Industries,HoogeveenKendix, WaalreLuxaflex Nederland,Hardinxveld-Giessendam, Tolbert

Limelight, BredaMado, EindhovenMultisol Raambekleding, NijmegenNedal, UtrechtSchellekens en Schellekens, BeuningenSunway (Benelux), Nieuwegein

NorwayHunter Douglas Norge, Gjövik, OsloWindow Fashions Scandinavia, Oslo

PolandHunter Douglas Polska, WarsawTurnils, Zdunska WolaMagnum Metal, Zdunska Wola

PortugalHofesa, Fajozes

RumaniaHunter Douglas Rumania, Bucharest, Cluj

RussiaHunter Douglas, Moscow

South AfricaHunter Douglas South Africa,Johannesburg

SpainHunter Douglas España, Llagostera,MadridHunter Douglas Andalucia, SevillaHunter Douglas Cataluña, Barcelona

SwedenHunter Douglas Scandinavia, GothenburgHunter Douglas Assembly Automation,StenungsundHaglunds, FalköpingTurnils, Alingsås, Mullsjö, Hillerstorp, MalmöTurnils International, AlingsåsTurnils Scandinavia, AlingsåsAMA Produktions, GothenburgNibrol, AngeredSani, MalmöWindow Fashions Scandinavia,Landskrona

SwitzerlandHunter Douglas Management, LucerneHunter Douglas (Schweiz), Root, Wängi

TurkeyHunter Douglas, Istanbul

United Arab EmiratesHunter Douglas Middle East, Dubai

United KingdomAMO Blinds, Liversedge, HartlepoolApollo Blinds, LiversedgeHunter Douglas, Sunninghill, Cannock,Hartlepool, Larkhall, Stockport, BirminghamO’Hanlon, NewtownThomas Sanderson Blinds, WaterloovilleTurnils, BirminghamEclipse, Glasgow

North Americawww.hunterdouglas.comwww.windowconnection.com

CanadaHunter Douglas Canada, Brampton,EdmontonNysan Shading Systems, CalgaryShade-O-Matic, Toronto, VancouverTurnils, TorontoVinylbilt, Toronto

U.S.A.Hunter Douglas, Upper Saddle River (NJ)Hunter Douglas Window Coverings, UpperSaddle River (NJ)Hunter Douglas Window Fashions,Broomfield (CO)Hunter Douglas Window Decor,Ft. Lauderdale (FL)Hunter Douglas Designer Shades,Bessemer City (NC)Hunter Douglas R&D Centre,Whitesville (KY)Hunter Douglas Metals and DistributionCentre, Tupelo (MS)Hunter Douglas National Accounts,Los Angeles (CA)Hunter Douglas Plastics and CastingCentre, Owensboro (KY)Hunter Douglas Specialty Products,Thornton (CO)Hunter Douglas Shutters, Gilbert (AZ)Hunter Douglas Wood Products,Gilbert (AZ)Hunter Douglas Fabrication, Atlanta (GA),Beltsville (MD), Cumberland (MD), Dallas(TX), Denver (CO), Pinellas Park (FL),Poway (CA), Renton (WA), Salt Lake City(UT), San Jose (CA), Scottsdale (AZ),Stockton (CA)Hunter Douglas Architectural Products,Norcross (GA)Hunter Douglas Hospitality, Chicago (IL)Alta Window Fashions, Los Angeles (CA),Atlanta (GA), Salt Lake City (UT)Aveno Window Fashions, Atlanta (GA)Bytheways, Sacramento (CA)Carole Fabrics, Augusta (GA)Century Blinds, Corona (CA)Comfortex, Maplewood (NY), Phoenix (AZ),Melbourne (FL)Coast Drapery Services, Las Vegas (NV)Elmar Window Fashions, Willow Grove (PA)Empire, Chatsworth (CA)ESI, Broomfield (CO)Iso-Teck, Pompano Beach (FL)Mermet, Cowpens (SC)Nibrol, Lancaster (SC)Paris Texas Hardware, Dallas (TX)Timber Blinds, Dallas (TX)Turnils, Atlanta (GA)Vista Products, Sarasota (FL)3form, Salt Lake City (UT)

Hunter Douglas Metals, Chicago (IL)

Hunter Douglas Principal Operating Companies

Hunter Douglas Annual Report 2007 � Hunter Douglas Principal Operating Companies

71

Latin Americawww.hunterdouglas.cl

ArgentinaHunter Douglas Argentina, Buenos Aires

BrazilHunter Douglas do Brasil (95%),São Paulo, Campinas

ChileHunter Douglas Chile (95%), SantiagoHunter Douglas Comercial (95%), SantiagoPersianas Andina (95%), Santiago

ColombiaHunter Douglas de Colombia (95%),BogotáTurnils Latin America, Bogotá

MexicoHunter Douglas de Mexico, Mexico City

Netherlands AntillesHunter Douglas International, Curaçao

VenezuelaHunter Douglas Venezuela, Caracas

Asiawww.hunterdouglas.com.my

ChinaHunter Douglas Building Products, Beijing,Shanghai, ShenzhenHunter Douglas Construction Elements,XiamenHunter Douglas Industries China, ShanghaiTurnils, ShanghaiHunter Douglas Manufacturing China,Guangzhou

Hong KongHunter Douglas China/Hong Kong

IndiaHunter Douglas India, New Delhi, SilvassaHunter Douglas Window Fashions India,Chennai, New Delhi, Silvassa

IndonesiaHunter Douglas Indonesia, Jakarta

JapanHunter Douglas Japan, Tokyo, Ibaraki

KoreaHunter Douglas Korea, Seoul

MalaysiaHunter Douglas Malaysia, Kuala LumpurHunter Douglas Window FashionsMalaysia, Kuala Lumpur

PhilippinesHunter Douglas Philippines, Manila

SingaporeHunter Douglas Singapore, SingaporeTurnils Asia, Singapore

TaiwanHunter Douglas Taiwan, Taipei

ThailandHunter Douglas Thailand, Bangkok

VietnamHunter Douglas Vietnam,Ho Chi Minh City

Australiawww.hunterdouglas.com.au

Hunter Douglas, SydneyHunter Douglas Architectural Products,SydneyTurnils, MelbourneMermet, Melbourne

Hunter Douglas Annual Report 2007 � Hunter Douglas Principal Operating Companies

72

Hunter Douglas N.V.

Hunter Douglas Annual Report 2007 � Hunter Douglas N.V.

Directors

R. SonnenbergChairman & CEOHunter Douglas N.V.

J.E. AndriessenFormer Minister of Economic AffairsThe Netherlands

C. BoonstraPresident Philips Electronics N.V. (retired)

H.F. van den HovenChairman Unilever N.V. (retired)

J.T. SherwinExecutive Vice PresidentHunter Douglas N.V. (retired)

A. van ToorenFormer Senior Executive ING Group

Officers

R. SonnenbergChairman & CEO

D.H. SonnenbergCo-President & COO

M.H. SonnenbergCo-President & COO

M.B. HopkinsPresident & CEONorth American Operations

C. KingVice President General Counsel

A. KuiperVice President & Managing DirectorHunter Douglas Europe

G.C. NeohPresident Asian Operations

L. ReijtenbaghVice President & Chief Financial Officer

R. RochaPresident Latin American Operations

Registered officeHunter Douglas N.V.Orionweg 30, Indel BuildingCuraçaoThe Netherlands Antilles

Head officeHunter Douglas N.V.2, Piekstraat3071 EL RotterdamThe NetherlandsPhone: +31-10-486 99 11/484 44 44Fax: +31-10-485 03 55E-mail: [email protected]

Stock listingsCommon shares:• Amsterdam (HDG)• Frankfurt (HUD)

Preferred shares:• Amsterdam (HUNDP)

Hunter Douglas Management AGAdligenswilerstrasse 376006 LucerneSwitzerlandPhone: +41-41-419 27 27Fax: +41-41-419 27 28

R. SonnenbergPresident & CEO

C. KingVice President, General Counsel &Secretary

G. OrechkoffVice President

Investor relationswww.hunterdouglasgroup.com

L. ReijtenbaghVice President & Chief Financial OfficerPhone: +31-10-486 95 82

Depositaries and dividenddisbursement agents• ABN AMRO BANK N.V.: Amsterdam,

Rotterdam - The Netherlands• ING BANK: Amsterdam, Rotterdam -

The Netherlands• FORTIS BANK: Amsterdam, Rotterdam -

The Netherlands

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