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JVS2008VdV_EN_LR

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  • pg 1
									Annual report 2008
             our mission



To shape the body and mind of women
Our gratitude goes out to all of our employees.
Their involvement in the realisation of the company objectives
and their dynamism enable us to achieve the reported results
and to have confidence in the future.




Deze jaarbrochure is eveneens beschikbaar in het Nederlands, bij de
hoofdzetel van de onderneming.



Contact
For clarification of the information in this yearly report please contact:
  Luc Markey
  Administrative director
  Tel.: (09) 365 21 00
  Fax: (09) 365 21 70


Editor
  Van de Velde SA
  Lageweg 4
  9260 Wichelen
  Tel.: (09) 365 21 00
  Fax: (09) 365 21 70
  VAT 448 746 744
  Company number RPR 0448 746 744
  Dendermonde
  website: www.vandevelde.eu
C onte nt s




         1. The Year 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          7

              Message from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  7

              Activity report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8

              Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

              Consolidated key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            14

              Van de Velde at the stock exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  17




         2. Description of the company and its activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             24

              Mission and activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        24

              Current structure of the group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              25

              Corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            27

              Information to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             35

              Financial calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      37




         3. subsequent events after year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        40




         4. Consolidated financial statements with notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              46




         5. management report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103




         6. Auditor’s report on the consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . 106




         7. Concise version of the statutory financial statements of Van De Velde nV . . . . . . . . . . . . 112




         8. social and environmental report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
1. The Year 2008

Mess age f rom t he C hair man




The world economy has entered recession due to the financial              Ultimately, the social role of every business is creating prosper-
crisis in 2008. So much has already been written and said about           ity and well-being for all its stakeholders: shareholders, consum-
what caused it and who is responsible that I will not dwell upon          ers, employees, customers, suppliers and society in general. In
it here. What is important is that it had a negative impact on Van        times of recession, too, businesses must continue to fulfil this
de Velde as early as last year and, as a result of lower sales in         role and the Board of Directors and the Management Committee
November and December, we have not achieved the growth we                 are responsible for ensuring this. They must invest wisely and
had hoped for. That being said, our results in absolute figures           have the courage to take advantage of the opportunities that will
remain outstanding. They have been achieved because manage-               undoubtedly come.
ment and all employees work hard to grow the business each
and every day, while constantly safeguarding customer inter-              Until recently, the assumption was that economic cycles could
ests, quality and margins and keep costs under control. That is           be controlled and that we had entered an age in which, world-
precisely why the necessity of writing off 2.25 million euros on          wide, the only way was up for the economy. The market not only
an investment product is very hard to swallow. It is money we             expected businesses to grow, it also expected this growth to
have worked hard for, money management was banking on and                 accelerate. No one dreamt even of a slow down. Many share-
that our banker told us was securely invested.                            holders have learned a hard lesson that things can also go
                                                                          profoundly wrong and that too many businesses – especially
The International Monetary Fund warns that recessions caused              financial institutions – are driven by excessive overconfidence,
by a financial crisis are two to three times deeper and two to four       arrogance and the quest for quick profits.
times longer than regular economic recessions. Van de Velde will
not sit back and wait to find out if this is true. We assume that         More than ever, directors, managers and employees of well run
it is. But that does not mean we will change our mission and              businesses deserve to be supported, respected and rewarded
strategy. Apathy and defeatism will not solve the problems and            by loyal shareholders. Businesses need unwavering sharehold-
at Van de Velde we will not retreat into our shell or throw the           ers that understand and accept that the future is unpredictable,
towel in. On the contrary, we are convinced that recessions offer         that hard work and great skill is demanded, that setbacks are
unique growth opportunities to healthy, dynamic businesses and            unavoidable and that the road is long. Without the constant alert-
Van de Velde will take full advantage of them. At the same time,          ness, exceptional drive and excellence of the people in the busi-
we will make sure that we are always strong enough to with-               ness, sustainable value creation for shareholders is simply not
stand potential serious setbacks. Van de Velde has always been            possible. No state intervention, no legislation or regulation, how-
a business that wishes to create added value and the Board                ever useful and necessary it may sometimes be, can replace
of Directors and the Management Committee will continue to                individual vitality, will power and competence.
closely monitor its financial health. We are absolutely convinced
that, regardless of the economic context, the key to successful                                                               Lucas Laureys
business is always a combination of assertive action based on                                                          Chairman of the Board
a clearly defined strategy and monitoring of both gross margin
and costs. The flow of available cash must never be substan-
tially affected, because it is the source of the business’s growth
potential and financial health.




                                                                      7
Ac t iv it y re p or t




‘When the going gets tough, the tough go to the                              A strategic vision must not have a paralysing effect of course.
gym’                                                                         Focus is not about wearing blinkers. Bearing in mind the fast-
2008 provided yet more proof that the five-year plan is an anach-            changing circumstances, flexibility and manoeuvrability are key.
ronism from an age when communism was still a major eco-                     Every business has to work constantly to remain fit and healthy;
nomic system. Happily, Van de Velde does not waste any time on               to develop the right muscles and burn off the fat, so that it is
five-year cash flow projections, which demand a huge amount of               able to act dynamically without overstretching itself. Acquisition
management time and become obsolete as soon as economy                       opportunities come and go. Programmes have to be lean, but
starts to wobble.                                                            efficiencies must never jeopardize their core existencies to the
                                                                             detriment of the core business. People must stay alert to all pos-
Five-year plans do not sharpen the mind, strategic thinking does.            sible outside signals, without losing their focus.
These past few years we have consistently exceeded our pro-
jected 5% turnover growth. This year it was significantly lower.             Informal indicators almost consistently showed Van de Velde
And yet the commitment was just as great, the people the same,               outperforming the rest of the industry segment, but we must
the route no less intact. It is easy to blame external factors and           not be self-satisfied. We do not view the world in relative terms
exceptional economic conditions. They play a role, but we must               (better or worse than competitors), but in absolute terms (real
also look internally. We have to work on our own programmes by               value growth). This drives us to be even sharper.
improving their focus and manoeuvrability.
                                                                             Economically speaking, 2009 will be tougher than 2008. That’s
Strategy is something very different and has little to do with               not something the observer didn’t know before reading this. Our
planning. Strategy is about building a strong future, based on a             business must retain its strategic focus and make more clear-
clear vision. To do so, you must bring together the appropriate              cut choices. Profitable growth has nothing to do with sympathy.
means to enable you to develop a competitive advantage that                  Growth is a consequence of the right focus, founded on a sense
offers more opportunities to win the race. As a consequence,                 of good implementation. The expected economic headwind will
you will – and must – generate value for your shareholders.                  without doubt impact our consumers, our customers and our-
That is the essence of the sustainability of your business and all           selves. Just how hard an impact is unknown. We must stick to
stakeholders. ‘Stakeholders for shareholders and shareholders                our fitness programme: strong brands, good quality, generous
for stakeholders.’                                                           attention for customers that want to partner with us, focus on fit-
                                                                             ting room service, committed people, strong programmes, low
Van de Velde has a clear strategy: ‘to shape the body and mind               costs, innovation where appropriate. We will not spurn acquisi-
of women.’ It is our belief that many women are prepared to                  tion opportunities that will make us stronger in the long run.
pay more for a high-quality lingerie brand, provided they enjoy
the commensurate service in the specialty lingerie store. That               We will pursue the above by remaining free of debt and without
is the basic concept on which our long-term growth is founded.               reducing the standard dividend pay-out. The long-term strength
The ‘Lingerie Styling’ programme is explained in detail in last              of the business is inextricably bound up with the long-term trust
year’s activity report. Clearly, we are not blind to the fact that too       of shareholders.
few specialty stores market themselves properly to consumers,
which is why the segment is losing market share. We have taken
responsibility for breaking new ground in partnership with good,
motivated specialty stores to gradually reclaim market share.




                                                                         8
Ac t iv it y re p or t




Lingerie styling, in western Europe and the united                        are being geared to Van de Velde’s, quality assurance refined,
states until further notice                                               sales organisations need more focus and ambition, unprofitable
Our competitors are reading this too, so we do not want to give           customers will be dropped. A major period of transition will most
too many details about our Lingerie Styling programme. It has             likely extend into the summer of 2009. In the meantime, we will
been rolled out in various European countries and remains an              absorb the costs and invest the efforts the transition requires,
important driving force. In 2009 we will launch Lingerie Styling in       but come the first half of 2010 Andrés Sardá should contribute
at least one new country; we will also improve the efficiency of          positively to group EBITDA.
a number of programme components. The focus in 2009 will be
on implementation at all levels, especially among consumers.              Developing brands
                                                                          One of our major challenges continues to be developing our
Intimacy has held up well in very difficult economic conditions           brands for consumers. Van de Velde traditionally performs well
in the US. The credit crisis originated there, so the US felt the         in the Benelux, but there is a lot of work to be done outside this
impact of concerned consumers a few months earlier than                   region. Patience is required. The ‘mindset restyling’ of Prima-
Europe did. In spite of that, Intimacy fared well. The three exist-                           ’
                                                                          Donna and Marie Jo LAventure has gone very well. Both collec-
ing stores experienced growth of around 3% year on year, while            tions have been clearly improved, as have brand perceptions.
three new outlets in Boston, Houston and Miami opened in the
course of 2008. Taking this growth into account, Intimacy’s turn-         Around 25% of our customers sell Marie Jo Intense. The initial
over increased by almost 38%. In 2009 another two, possibly               response was good. We realise that this is a relatively small seg-
three openings are scheduled.                                             ment and that a large proportion of our customers still need to
                                                                          learn how to handle it. Major sponsorship contracts have been
For the first time, there was a significant growth in turnover            signed in Germany and Belgium.
at our own stores too. Year on year growth in existing outlets
was around 17%. This is undoubtedly driven by Lingerie Styling,           Brand identity was strengthened in the design department
together with improved management. Towards the end of the                 too. At Van de Velde it used to be set up functionally: everyone
year the team worked hard on developing store employee com-               could work for every brand. At the start of 2008 we switched to
mitment, something we have not done well in previous years.               a brand management system. Now, focused teams work on a
We are not there yet by a long chalk, but 2008 generated suf-             specific brand under a brand design manager. This improves the
ficient self-confidence to develop new dimensions in 2009.                identity of the brand in all its forms. A baby’s personality starts to
                                                                          be formed at the moment of fertilisation. The brand has to have
A nice piece of land, but the house requires                              clear characteristics from the outset – in terms of vision, mood,
rebuilding                                                                style, materials, fit, cup size and styles.
The acquisition of Andrés Sardá in June 2008 was important for
various reasons. This brand gives our brand portfolio a creative          Working harder on new markets
impulse and a very credible Mediterranean profile. Van de Velde           We indicated at an earlier date that we lost some time in 2007
will give Andrés Sardá a central place in the future brand portfo-        exploring new markets. New people have been hired to survey
lio. That will take time.                                                 Turkey, India, the Gulf States and a number of central European
                                                                          countries. Those efforts continue unabated and a brand like
Creativity and brand perception are very strong (‘a nice piece            Andrés Sardá certainly opens up new opportunities in the inter-
of land’). Most other aspects of the business will be adapted             national arena.
to suit the new realities (‘the house will be rebuilt’). Processes




                                                                      9
Ac t iv it y re p or t




social labels must never obstruct critical decisions
At the beginning of 2009 we announced our intention to close
our facility in Hungary. It has been operating for around 15 years
and has been very successful. Outstanding local management
has steered it in the right direction since day one. It also had a
social label, demonstrating that people were treated appropri-
ately at all levels.


Unfortunately, the facility’s future was made unsustainable by
some decisive factors. Costs had become very high compared
with the alternatives and the plant’s closure ultimately became
a matter of time. A number of jobs will be relocated to Belgium,
many others to Tunisia and China. Van de Velde intends to handle
all affected employees correctly.


Topform
Van de Velde has increased its stake in Topform to 23.3%. This is
a long-term decision that is not connected to the current credit
crunch. Like all clothing manufacturers, Topform is experiencing
difficult times. However, we remain convinced that Topform has
the quality, flexibility, resilience and management expertise to
remain a strong player in the long term.




                                                                     10
Prosp e c t s 2 0 0 9




It is impossible to look ahead to the end of 2009. Too many                   c. Most of the domestic and international sales department
external and internal factors are involved and they all impact                   was restructured within Van de Velde. The impact will start
each other:                                                                      to be felt in the autumn, but again this will be a gradual
                                                                                 process.
1. Pre-orders for the first two quarters of 2009 are slightly
   lower as they were in 2008. The spring has not ended yet,                  d. Ties were cut with a large loss-making customer of Euro-
   of course. Subsequent orders and stayers generate a great                     corset (with which Van de Velde did not do any business).
   deal of turnover, which will be perceptible until March 2009.
   In the current economic circumstances they are difficult to                e. Cost reductions were introduced (especially in fixed
   forecast.                                                                     costs).


2. As with every year, we will only gain insight into the last two         From that perspective, 2009 will be an important year of transi-
   quarters in spring 2009 and beyond. While Van de Velde is a             tion characterised by a number of vital steps to enable the busi-
   beacon of stability that many lingerie stores can rely on even          ness to enter 2010 stronger than ever. Turnover and EBITDA pro-
   in difficult times, it is tough to say how sell out in autumn           jections for 2009 are virtually impossible in the current climate.
   2008 will impact the cash position and confidence of retailers
   in the course of 2009.


3. We intend to introduce sweeping changes to our cost struc-
   ture. The decision to close our production facility in Hungary
   will have a two-fold financial impact on Van de Velde. There
   will be costs connected with the closure, on the one hand,
   and lower variable stitching costs on part of our collection, on
   the other. Neither the timetable nor the impacts in 2009 of
   either are easy to predict.


4. In 2008 major changes were implemented at Eurocorset
   (Andrés Sardá) in a number of areas.


   a. Eurocorset proved to be less robust than hoped for in the
      face of the credit crunch (which had a considerable impact
      in the home market Spain) and will generate a substan-
      tially lower turnover in the first half of 2009.


   b. The brand portfolio was rationalised. The brands Risk and
      University will be discontinued and replaced by Sardá by
      Andrés Sardá. This will not have any impact on turnover
      until autumn 2009. The brand restructuring will be rolled
      out gradually and will become clear as of 2010.




                                                                      11
C ons oli d ate d ke y f ig u re s 2 0 08




                                                                                                                                   (in millions of euros)

                                                                                        IFRS          IFRS          IFRS          IFRS            IFRS
 Profit and loss account                                                                2004          2005         2006          2007             2008
 Operating income                                                                      102.1         112.8         124.2         132.2           135.3
 Net turnover                                                                           101.7         111.9        123.0         130.3           133.0
 Operational cash flow (EBITDA)                                                          33.5         38.1           41.1         44.6             43.4
 Operating profit (EBIT)                                                                 31.1         35.7          38.8          41.6             40.2
 Current profit                                                                          32.2         36.7          43.7          43.8             40.3
 Cash flow after tax (*)                                                                 23.3         28.8          33.4          33.9             31.7
 Net profit                                                                              22.1         26.2           31.1         30.7             28.6
 Income (equity method)                                                                   3.4                                      0.3              0.1
 Guliano/Top Form reorganisation                                                                      16.2
 Result of the Group                                                                     25.5         42.4           31.1         31.0             28.7
 Free cash flow (*)                                                                      22.4         15.2          30.6          32.2             27.3




                                                                                        IFRS          IFRS          IFRS          IFRS            IFRS
 Balance sheet                                                                          2004          2005          2006         2007             2008
 Balance sheet total                                                                    116.2         141.9        141.0         131.0            137.3
 Shareholders’ equity                                                                   102.8        128.4         126.8          117.4          120.9
 Provisions and taxes                                                                     4.0           4.1           3.9           3.9              3.0
 Financial obligations longer than one year                                                                                                          0.2
 Net debt position (*)                                                                 (53.2)        (38.9)        (49.2)        (44.5)          (22.5)
 Capital employed (CE)                                                                   53.6          93.6          81.5         76.8            101.6


 Fixed assets                                                                            29.8          58.3         48.2          44.6             66.1
 Amounts receivable after one year                                                                                                                   2.7
 Working capital (*)                                                                     24.0          35.3         32.8          32.1             35.5
 Invested capital                                                                        53.8          93.6         80.1          76.7            101.6
 Investments                                                                              1.8           1.8           3.6           2.6              2.4
 Depreciations                                                                            2.4           2.5           2.7           3.0              3.2


(*) Cash flow after tax: net profit of financial year                           (*) net debt position: cash deposits cash at bank and in hand
    plus writing off and depreciations of intangible and tangible assets            minus Financial debts of a maximum of 1 year
    plus provisions for risks and costs                                             minus debts longer than 1 year which expire within a year
    plus depreciations of stocks and trade debtors
                                                                                (*) Working capital: stocks and orders being processed
(*) Free cash flow= net cash from operating activities                              plus claims up to 1 year
    (see consolidated statement of cash flows)                                      minus wages, social security and taxes
                                                                                    minus Trade creditors
                                                                                    minus Remaining debts




                                                                           14
C ons oli d ate d ke y f ig u re s 2 0 08




                                                                IFRS          IFRS          IFRS          IFRS    IFRS
 Financial ratios (in%)                                        2004          2005          2006          2007     2008
 Return on equity (ROE) (*)                                     24.6          22.7          24.4          24.9    24.0
 Return on capital employed (ROCE) (*)                          47.4          35.4          35.6          38.7    32.0
 Solvency (*)                                                   89.3          90.5          89.9          89.6    88.1
 Working capital/turnover                                       23.5          32.5          26.4          24.3    26.2


                                                                IFRS          IFRS          IFRS          IFRS    IFRS
 margin analysis and tax rate (*)                              2004          2005          2006          2007     2008
 EBITDA                                                         32.8          33.8          33.1          33.7    32.1
 EBIT                                                           30.5          31.6          31.2          31.5    29.7
 Net profit                                                     21.7          23.2          25.0          23.2    21.2
 Cash flow                                                      22.8          25.4          26.9          25.6    23.4
 Tax rate                                                       31.3          28.9          29.0          29.9    28.9




(*) return on equity:                                  (*) solvency: Shareholders’ equity / Balance sheet total
    Net profit / shareholders’ equity 2008+2007
                                          2            (*) margin analysis: margin/operation income
(*) return on capital employed:                            Tax rata: taxes/taxable income
    Net profit / capital employed 2008+2007
                                       2




                                                  15
C ons oli d ate d ke y f ig u re s 2 0 08




Evolution of operating income                           (in millions of euros)        Evolution of operating profit                            (in millions of euros)

150                                                                                    50



120                                                                                    40



 90                                                                                    30



 60                                                                                    20



 30                                                                                     10



  0                                                                                      0
       2003
       '2003'   2004
                 '2004' IFRS      IFRS      IFRS      IFRS      IFRS
                          'ifrs2004' 'ifrs2005' 'ifrs2006' 'ifrs2007'                        '2003'
                                                                                             2003       '2004' IFRS
                                                                                                       2004      'ifrs2004' 'ifrs2005' 'ifrs2006' 'ifrs2007'
                                                                                                                         IFRS      IFRS      IFRS      IFRS
                        2004      2005      2006      2007      2008                                           2004      2005      2006      2007     2008




Evolution of operational cashflow                       (in millions of euros)        Evolution of result of the Group                         (in millions of euros)

 50
 50                                                                                    80
                                                                                       50

                                                                                       70
150
 40
 40                                                                                    40
                                                                                       60

120                                                                                    50
 30
 30                                                                                    30
                                                                                       40
 90
 20
 20                                                                                    20
                                                                                       30

                                                                                       20
 60
 10
 10                                                                                    10
                                                                                       10

 30
  0
  0                                                                                      0
                                                                                         0
       2003
       '2003'   2004
                 '2004' IFRS      IFRS      IFRS      IFRS      IFRS
                          'ifrs2004' 'ifrs2005' 'ifrs2006' 'ifrs2007'                         2003
                                                                                              '2003'
                                                                                             '2003'     2004       'ifrs2004' 'ifrs2005' 'ifrs2006' 'ifrs2007'
                                                                                                         '2004' IFRS         IFRS       IFRS       IFRS       IFRS
                                                                                                       '2004' 'ifrs2004' 'ifrs2005' 'ifrs2006' 'ifrs2007' 'ifrs2008'
                        2004      2005      2006      2007     2008                                               2004      2005        2006       2007       2008
  0
       '2003'   '2004' 'ifrs2004' 'ifrs2005' 'ifrs2006' 'ifrs2007' 'ifrs2008'



                                                                                        80
 50
                                                                                        70


 40                                                                                     60

                                                                                        50

 30
                                                                                        40

                                                                                        30
 20
                                                                                        20

  10                                                                                    10
                                                                                 16
                                                                                         0
                                                                                             '2003'    '2004' 'ifrs2004' 'ifrs2005' 'ifrs2006' 'ifrs2007' 'ifrs2008'
  0
       '2003'   '2004' 'ifrs2004' 'ifrs2005' 'ifrs2006' 'ifrs2007' 'ifrs2008'
Van d e Vel d e at t he sto ck e xchange




identification                                                              Both indexes are revised every quarter, at the end of February,
Euronext code ISIN BE 0003839561                                            May, August and November, and the revised indexes applied at
Mep               BRU                                                       the start of April, July, October and January.
Mnemo             VAN
Bloomberg         VAN BB                                                    In 2008 the Van de Velde share was listed in the BEL Mid index.
Reuters           VELD.BR
Datastream        B:VAN                                                     The following data were noted for Van de Velde on 31 December
Sedol             5331114                                                   2008:


ICB Sector classification:                                                  – Market capitalisation                   325,361,040 euros
Manufacturing     3000, consumer goods                                      – Circulation speed                       11.2%
Super-sector      3700, personal and household goods                        – Weight in BEL Mid index                 1.54%
Sector            3760, personal goods                                      – Weight in BAS index                     0.18%
Sub-sector        3763, clothing and clothing accessory
                                                                            Price development
Listing and classification                                                  There was a great deal of turbulence on the stock market in
The shares of Van de Velde have been quoted on the Brussels                 2008. Euronext/NYSE Brussels did not escape that.
                                   .
stock exchange since 1 October 1997 Since the merger of the
Amsterdam, Brussels and Paris exchanges in September 2000,                  In 2008 the various domestic indexes and the Van de Velde share
Van de Velde has been quoted on Euronext Brussels, under the                developed as follows:
abbreviation ‘VAN’. Van de Velde’s shares can be traded using               – BEL 20                   -53.8%
the ISIN code BE 0003839561.                                                – BEL Mid                  -50.4%
                                                                            – Belgian All Shares       -49.2%
Euronext lists Van de Velde in the continuous Eurolist by Euron-            – Van de Velde             -36.4%
ext market, via the Brussels access point, in compartment B
(market capitalisation between 150 million and 1 billion euros).            shareholder structure
                                                                            The following stakes were announced under the Transparency
In line with its series of local indexes, in Brussels Euronext main-        Act of 2 May 2007:
tains a BEL 20, BEL Mid and BEL Small index, the components                 –   Van de Velde Holding                 7,496,250 shares 55.3%
of which are selected on the basis of liquidity and free float mar-         – Van de Velde NV                         331,730 shares 2.45%
ket capitalisation.                                                         –   Delta Lloyd Asset Management          545,978 shares 4.03%
                                                                            – KBC Asset Management NV                 422,325 shares 3.11%
The BEL Mid index is made up of 33 companies that do not
belong to the BEL 20 index, with free float market capitalisation           Private individuals hold 4,757,082 shares (35.1%).
in excess of the BEL 20 index (1908.64) multiplied by 50,000
euros (= 95,432,000) and circulation speed of at least 10%. The             According to the information collated from annual reports by
average market capitalisation of this index is 1.1 billion euros            Euronext/NYSE Brussels, 1,563,350 shares (11.5%) are held
(minimum of around 200 million euros).                                      by thirty or so institutional investors and the remaining shares
                                                                            (23.6%) are held by private investors.




                                                                       17
Van d e Vel d e at t he sto ck e xchange




The articles of association set the following thresholds for the            monitoring
announcement of major stakes:                                               The share was monitored by four Belgian and two foreign ana-
– 3%                                                                        lysts.
– 5%
– Multiples of 5%


Euroclear Belgium announced the following positions at
31 December 2008:
– Nominative shares                                        7,497,061
– Dematerialised position registered in the name of Euroclear
   Belgium in the share register                           5,881,854


Accordingly, 177,795 material bearer shares remain in circula-
tion.


monitoring liquidity
Van de Velde concluded a liquidity agreement with bank Degroof
in July 2002.
Liquidity providers assume the following obligations vis-à-vis
Euronext:
– Permanent two-sided market with bids and offer prices (per-
   manent presence + 15 minutes before opening);
– Guaranteed minimum turnover of 5,000 euros;
– Permanent maximum spread between purchase and selling
   price of 5%.


This enables Van de Velde to benefit from the following advan-
tages:
– Increased share circulation due to the permanent presence
   of bids and offer prices that investors can trade at;
– Reduction of the spreads between bids and offer prices;
– Prevention of large price fluctuations on small traded vol-
   umes;
– Guaranteed listing on the continuous segment of Euronext/
   NYSE Brussels.


The circulation speed was increased by the liquidity provider by
a virtually permanent market presence.




                                                                       18
Van d e Vel d e at t he sto ck e xchange




 stock market data


                                         2002        2003         2004        2005        2006        2007        2008


 Average daily volume in pieces         1,185       1,304        2,027       2,455        5706        8781        5905
 Number of shares                    2,697,664   2,704,410    2,711,342   2,711,342 13,556,710 13,556,710 13,556,710
 Number of traded shares              302,059     332,625      525,040     630,828    1,455,157   2,239,046   1,511,681
 Circulation speed                     10.8%        12.3%       19.4%       23.3%        10.7%       16.5%       11.2%
 Turnover (in thousands of euros)      22,618       27,651      53,750       87,810    100,480      81,420      42,230


 (in euros per share)

 Highest price                           84.7        98.8         119.0      156.0         40.0        40.1       37.75
 Lowest price                            66.1        65.4         89.1       114.4         30.6       31.96       20.3
 Closing price                            77.0       94.0         117.0      153.8         39.3       37.75       24.0
 Average price                            74.0        81.4       100.9       139.4         35.1       37.15      28.59




 Core figures per share after tax
 (in euros)



 Book value                              25.8        28.1          37.9        9.5          9.4         8.7         8.9
 Operational cash flow (EBITDA)           10.9        12.0         12.4        2.8          3.0         3.3         3.2
 Operating profit                          9.2         9.7         11.6        2.6          2.9         3.1         3.0
 Current cash flow                         7.2         7.8          8.4        2.1          2.5         2.5         2.4
 Net profit                                5.8         6.5          8.0         1.9         2.3         2.2         2.1
 Group profit                              6.8         7.4          9.1        3.1          2.3         2.3         2.1
 Gross dividend                            2.0         2.3         13.0        6.7          0.9         0.9         0.9
 Net dividend                              1.5         1.7        9.75         5.0          0.7         0.7         0.7
 Dividend yield (*)                     2.0%         1.8%         8.3%       3.3%         1.7%        1.9%        2.9%




(*) Dividend return: net dividend
                     Closing price




                                                         19
Van d e Vel d e at t he sto ck e xchange




 Value determination


                                                         2002       2003         2004    2005    2006    2007    2008


 (in millions of euros)

 Book value (*)                                           69.6       75.9        102.8   128.4   126.8   118.3   120.9
 Market capitalisation (*)                               209.1      253.5        317.2   417.0   542.3   511.8   325.4
 Enterprise value (EV) (*)                               181.1      216.9        267.7   381.9   496.7   470.9   305.6


 multiples


 EV/EBITDA                                                 6.3         7.3         8.2    10.0    12.0    10.5     7.0
 Price/profit (*)                                         13.3       14.5         14.6    15.9    17.1    16.7    11.4
 Price/group profitt                                      11.3       12.7         12.9     9.8    17.1    16.5    11.4
 Price/cash flow                                          10.7       12.1         13.9    14.5    15.7    15.0    10.0
 Price/book value                                          3.0        3.3          3.5     3.2     4.2     4.3     2.7
 EV/CE                                                     4.0        5.5          6.5     4.1     6.1     6.1     3.0
 EV/Operating profit                                       1.9        2.2          2.6     3.4     4.0     3.6     2.3




(*) Book value: shareholders’ equity

(*) market capitalisation: number of shares * closing price

(*) Price/earnings: closing price/net profit per share

(*) Enterprise value: market capitilisation + net debt + provisions-guarantees




                                                                         20
   Van d e Vel d e at t he sto ck e xchange




                                                                                                                    02-01-2006



                                                                                       Evolution of stock market price Van de Velde and BEL20

  400

  350

  300

  250

  200

  150

  100

   50

      0
          1/10/1997                            BEL20                       Van de Velde                                                  31/12/2008




                                                                                                        Evolution of stock market price in 2008 (1)

  120




  100




   80




   60




   40
   january            february    march      april     mai          june           july        august      september    oktober    november   december

                  evolution of stock price                   evolution of the Bel-20




140

120
   (1) Stockprice at the end of the day

100

 80                                                                        21
2. Description of the company and its activities

Missi on, core a c t iv it ie s and histor y




mission                                                                    History
Our mission is ‘to shape the body and mind of women’.                      1919: Founding by Achiel and Margaretha Van de Velde
                                                                           1981: Launch of Marie Jo
The company’s attention is exclusively focused on offering                 1990: Acquisition of German firm PrimaDonna
women the most fashionable, best fitting products as part of a                                       ’
                                                                           1997: Launch of Marie Jo LAventure
high-quality, exceptionally wide collection of luxury lingerie.            1997: IPO on the Brussels Stock Exchange
                                                                           2001: Stake in Top Form International
This is only possible through stores that invest in themselves             2002: Opening of first O&O store
and their consumer service with an attractive interior design,             2007: Strategic alliance with US retail chain Intimacy
a friendly welcome and optimal assistance demanded of good                 2008: Launch of sports lingerie line Marie Jo Intense
fitting, fashionable lingerie.                                             2008: Acquisition of Spanish lingerie firm Eurocorset and
                                                                                 Spanish lingerie brand Andrés Sardá
We have to be a sufficiently important partner for the specialist
retailer on every market we trade on.                                      The company’s efforts have been rewarded many times down
                                                                           the years:
In geographical terms we are mainly focused on Europe and                  – 1991: Oscar for Export
North America.                                                             – 1995: Fashion Award (Netherlands)
                                                                           – 1997: The Best of Marketing
Activities                                                                 – 1998: The Belgian Clothing Federation Trophy
Originally a Belgian company, Van de Velde continues to conduct            – 2003: Inclusion in the Ethibel sustainable investment
all its core activities in Belgium, including design and product              register
development, prototypes and fitting models, close contacts                 – 2003: SA8000 label for the plant in Belgium and the head
with suppliers, purchasing policy, fabric checks and cutting, final           office
check, administration and distribution.                                    – 2006: SA 8000 label for the plant in Hungary


230 new styles are created every year, produced in more than               Website
50 different sizes and 60 different colours. In other words, 9,000         The corporate website www.vandevelde.eu publishes all current
new stock references.                                                      general information on Van de Velde as well as targeted informa-
                                                                           tion for investors and prospective employees. Interim informa-
Sales and marketing are centralised in Belgium. The central                tion is published in the news and press releases section. Inter-
customer service fields more than 200,000 calls in seven                   ested parties can register in the email alert service to receive
different languages every year.                                            new press releases immediately.


Van de Velde’s raw materials are almost exclusively sourced
from Europe. Only assembly is entrusted to foreign production
centres in Tunisia, Hungary, Romania and China. All other
production activities, as well as quality assurance, take place in
Belgium.




                                                                      24
       Cu r rent St r u c tu re of t he Group




                                                                                                       Van de Velde NV
                                                                                                           Belgium



       100%               100%              100%           100%             100%               100%                 100%               23.3%             100%            100%           99.99%              100%

       Van de Velde        Van de Velde     Van de Velde   Van de Velde      Van de Velde       Van de Velde           Guliano            Top Form        Van de Velde   Van de Velde     Van de Velde      Van de Velde
        Mode BV             Italia SRL         UK Ltd       Termelo es        Finland Oy        Verwaltungs          (HK) Limited       International        North       Denmark APS      France SARL       GmbH & C° Kg
                                                           Kereskedelmi                            GmbH                                    Limited        America Inc.
                                                               KFT
            The
        Netherlands            Italy             UK          Hungary             Finland         Germany             Hongkong            Hongkong              USA         Denmark           France            Germany




       99.5%                              99%                  100%                         49.9%                          100%                         100%
                                        Van de Velde              Van de Velde                 Retail BV                   Marie Jo SARL                Marie Jo Gmbh
       Van de Velde
                                       Confection SARL             Retail Inc.
        Iberica SL
                                           Tunisia                    USA                   The Netherlands                   France                      Germany
                                                                                                                                                                                        1%
0.5%                                                           49.9%                                                                                                                  Van de Velde
                                                            Intimacy Management                                                                                                      Confection SARL
          Spain
                                                                 Company LLC                                                                                                             Tunisia
                                                                     USA
               100%                                                                                                                                                                                    0.01%

               Eurocorset SA                                                                                                                                                                             Van de Velde
                                                                                                                                                                                                         France SARL
                  Spain                                                                                                                                                                                     France


               100%
           Sul Tuo Corpo SL

                  Spain




       The Hungarian and Tunisian subsidiaries are assembly plants.                                                  the Spanish subsidiary Van de Velde Iberica and the Tunisian
                                                                                                                     subsidiary Van de Velde Confection.
       The subsidiaries in France, the Netherlands, Germany, the United
       Kingdom, the United States, Finland, Denmark, Italy and Spain                                                 Van de Velde Iberica holds the stake in Eurocorset of Spain.
       are agencies that are responsible for the local sellers. Parent                                               Eurocorset has its own Spanish retail subsidiary Sul tuo Corpo.
       company Van de Velde NV continues to be responsible for billing                                               Van de Velde Iberica acquired Eurocorset’s shares on 20 June
       customers in those countries.                                                                                 2008. Since the acquisition, Eurocorset and Sul tuo Corpo have
                                                                                                                     generated 3.7 million euros in turnover. The large share of bathing
       The Dutch subsidiary holds the stakes in two retail subsidiaries                                              wear in turnover in the first two quarters means the impact on
       Marie Jo Sarl and Marie Jo Gmbh as well as the US retail holding                                              Van de Velde’s consolidated annual turnover is relatively limited.
       company Van de Velde Retail, the Dutch company Retail BV,                                                     The costs are spread equally over the year, so operational cash




                                                                                                               25
Cu r rent St r u c tu re of t he Group




flow (EBITDA) is also weaker in the last two quarters. Operational        The stake in Top Form International was raised from 16.37% to
cash flow (EBITDA) was 1 million euros negative in the last               23.31% in August.
two quarters. This figure was influenced among other things               The shares were purchased on the Hong Kong stock exchange
by a number of changes with respect to brand, turnover and                at an average unit price of 0.5661 HK dollars per share. After
overheads, which means that Eurocorset will only start picking            conversion, this represents an investment of 3.6 million euros.
up speed in the second half of 2009. Eurocorset’s first reference         Van de Velde now directly holds 250,599,544 shares of Top Form
year will be 2010.                                                        International.


Van de Velde Retail holds a 49.9% stake in US multi-brand chain           Top Form International is one of the world’s biggest bra producers
Intimacy Management, which generated turnover of 24.7 million             (see www.topformbras.com for more information). The annual
US dollars and operational cash flow (EBITDA) of 0.8 million US           figures released on 30 June 2008 showed a group profit of
dollars.                                                                  53.3 million HK dollars or 5.4 cents (HKD) per share.




                                                                     26
C or p orate G ove r nanc e




Van de Velde is a family company and as such it gives special             – Management en Adviesbureau Marc Hofman v.o.f., always
attention to gearing its operations and organisation to the provi-           represented by Marc Hofman, director (tenure expires at the
sions of the Corporate Governance Code, which was introduced                 ordinary general meeting of 2010).
for listed companies on 9 December 2004.                                  – Marc Hofman is the managing director of fresh food group
                                                                             Ter Beke, a company director and guest lecturer at various
On 6 December 2005 the Board of Directors of Van de Velde                    colleges.
NV approved the Corporate Governance Charter, which is avail-             – EBVBA Benoit Graulich, always represented by Benoit Grau-
able on the company’s website. In this Corporate Governance                  lich, director (tenure expires at the ordinary general meeting
Charter Van de Velde NV summarises the deviations from the                   of 2010).
Corporate Governance Code, which are mainly dictated by the               – BVBA Dirk Goeminne, always represented by Dirk Goeminne,
company’s family nature.                                                     director (tenure expires at the ordinary general meeting of
                                                                             2011).
The company’s family nature is also an important ingredient in
corporate governance. That is because the family has an interest          – Honorary director: Henri-William Van de Velde, son of the
in the company being managed in a professional and transparent               founder, Doctor of Laws.
way. That is expressed among other things by the presence of
experienced family members on the Board of Directors.                     BVBA Dirk Goeminne, always represented by Dirk Goeminne
                                                                          (born in 1955) was appointed as a new independent director at
Corporate governance and transparency are also discussed in               the annual general meeting of 2008. Dirk Goeminne is a director
other chapters of this annual report.                                     of various companies.


Board of Directors                                                        Management- en Adviesbureau Marc Hofman v.o.f., EBVBA
– Composition of the Board of Directors                                   Benoit Graulich and BVBA Dirk Goeminne are deemed to be
The Board of Directors of Van de Velde NV is composed as fol-             independent directors.
lows:
– Lucas Laureys NV, always represented by Lucas Laureys,                  Lucas Laureys, Bénédicte Laureys NV, Herman Van de Velde and
   director (tenure expires at the ordinary general meeting of            Herman Van de Velde NV represent Van de Velde Holding NV, the
   2009).                                                                 majority shareholder of Van de Velde. The first two named above
– Herman Van de Velde NV, always represented by Herman Van                are non-executive directors. Herman Van de Velde NV is together
   de Velde, managing director (tenure expires at the ordinary            with EBVBA 4F a managing director and also a member of the
   general meeting of 2009).                                              Management Committee.
– Herman Van de Velde, director (tenure expires at the ordinary
   general meeting of 2009).                                              The General Meeting appoints the directors for a term of three
– Bénédicte Laureys, director (tenure expires at the ordinary             years.
   general meeting of 2009).
– EBVBA 4 F always represented by Ignace Van Doorselaere,
           ,                                                              Lucas Laureys NV chairs the Board of Directors.
   managing director (tenure expires at the ordinary general
   meeting of 2010).




                                                                     27
C or p orate G ove r nanc e




– Operation and activity report of the Board of                               The Audit Committee advises the Board of Directors on the
   Directors                                                                     following:
                                                                              – The appointment (and dismissal) and remuneration of the
Van de Velde’s Board of Directors directs the company in accord-                 statutory auditor.
ance with the principles laid down in the Companies Act and                   – The preparation of the quarterly, biannual and annual
makes decisions on the general policy. These comprise the                        results.
assessment and approval of strategic plans and budgets, super-                – Internal monitoring and risk management.
vision of reports and internal audits and other tasks assigned by             – The internal and external audit.
law to the Board of Directors.
                                                                              The Audit Committee is composed as follows:
Pursuant to Article 524bis of the Companies Code, the Board of                – NV Lucas Laureys, always represented by Lucas Laureys.
Directors has established a Management Committee to which                     – Management en Adviesbureau Marc Hofman v.o.f., always
it has delegated its managerial powers, with the exception of                    represented by Marc Hofman (independent director).
general policy and all actions that are reserved to the Board of              – EBVBA Benoit Graulich, always represented by Benoit
Directors by statutory provisions.                                               Graulich, director (independent director).


The Board of Directors has also established the following advi-               The chairman of the Audit Committee is Management en
sory committees: an Audit Committee, an Appointments and                      Adviesbureau Marc Hofman v.o.f., always represented by
Remunerations Committee and a Strategic Committee.                            Marc Hofman.


For a detailed description of the operation and responsibilities of           The Audit Committee meets no fewer than three times a year
the Board of Directors we refer to the company’s Corporate Gov-               and as often as considered necessary for its proper opera-
ernance Charter, which is published on the company’s website.                 tion. In 2008 the Audit Committee met three times. All mem-
                                                                              bers attended these meetings.
In 2008 the Board of Directors met seven times. There was an
additional Board of Directors attended only by the non-executive           (b) Strategic Committee
directors for the purpose of evaluating the interaction between               The role of the Strategic Committee is to assist the Board of
the Board of Directors and the Management Committee.                          Directors in establishing the company’s strategic direction.


Committees within the Board of Directors                                      Other important strategic themes can be discussed ad hoc,
(a) Audit Committee                                                           including:
   The object of the Audit Committee is to assist the Board of                – Mergers and acquisitions.
   Directors in carrying out its control tasks with respect to Van            – Developments at competitors, customers or suppliers
   de Velde’s financial reporting process, including supervision                 that may/will impact the company.
   of the integrity of the financial statements, the qualifications           – Important regional developments for the company.
   of the statutory auditor and the independence and perform-                 – Technological opportunities and/or threats for the com-
   ance of both the internal audit department and the statutory                  pany.
   auditor.                                                                   – Estimating the budgets.




                                                                      28
C or p orate G ove r nanc e




  The Strategic Committee is composed as follows:                   The Appointments and Remunerations Committee is com-
  – NV Lucas Laureys, always represented by Lucas Laureys.          posed as follows:
  – EBVBA 4F always represented by Ignace Van Doorse-
            ,                                                       – NV Lucas Laureys, always represented by Lucas Laureys.
     laere.                                                         – EBVBA Benoit Graulich, always represented by Benoit
  – NV Herman Van de Velde, always represented by Herman               Graulich.
     Van de Velde.                                                  – BVBA Dirk Goeminne, always represented by Dirk
                                                                       Goeminne.
  The chairman of the Strategic Committee is NV Lucas Lau-
  reys, always represented by Lucas Laureys.                        The chair of the Appointments and Remunerations Commit-
                                                                    tee is BVBA Dirk Goeminne, represented by Dirk Goeminne.
  The Strategic Committee meets no fewer than two times
  a year and as often as considered necessary for its proper        The Appointments and Remunerations Committee meets as
  operation. The Strategic Committee met twice in 2008. All         often as is needed for its proper operation, but never less
  members attended these meetings.                                  than two times every year.


(c) Appointments and Remunerations Committee                        No director attends the meetings of the Appointments and
  The Appointments and Remunerations Committee formu-               Remunerations Committee in which his or her own remuner-
  lates recommendations to the Board of Directors concerning        ation is discussed and must not be involved in any decision
  the company’s remuneration policy and the remuneration of         concerning his or her remuneration.
  the directors and members of the Management Committee,
  the appointment of the directors and members of the Man-          The Appointments and Remunerations Committee met three
  agement Committee and is responsible for the selection of         times in 2008. All members attended these meetings.
  suitable candidate directors.
                                                                    For a detailed summary of the responsibilities and the opera-
                                                                    tion of the various committees established by the Board of
                                                                    Directors see the company’s Corporate Governance Charter,
                                                                    which is published on the company’s website.




                                                               29
C or p orate G ove r nanc e




((d)Management Committee                                             The Management Committee is composed as follows:
  In accordance with Article 23.4 of the Articles of Associa-
  tion and Article 524bis of the Companies Code, the Board of        – N.V. Herman Van de Velde, always represented by Herman
  Directors established a Management Committee on 2 March               Van de Velde.
  2004.                                                                        ,
                                                                     – EBVBA 4F always represented by Ignace Van Doorse-
                                                                        laere.
  The Management Committee meets at least once every                 – Luc Markey, CFO.
  three weeks and is responsible for managing the company. It        – Dirk De Vos, international sales director.
  exercises the managerial powers that the Board of Directors        – Karlien Vanommeslaeghe, human resources director.
  has delegated to the Management Committee.                         – Hedwig Schockaert, ICT & supply chain manager.
                                                                     – Philippe Vertriest, brand design director.




                                                                30
C or p orate G ove r nanc e




  The chairman of the Management Committee is EBVBA 4F,                remuneration of directors and members of the
  always represented by Ignace Van Doorselaere.                        management Committee

  On 1 January 2009 Stefaan Vandamme replaces Luc Markey               For information on the remuneration of directors and members
  as CFO in the Management Committee.                                  of the Management Committee, see note 19 b of the consoli-
                                                                       dated annual statements.
  The members of the Management Committee are appointed
  and dismissed by the Board of Directors on the basis of the          miscellany
  recommendations of the Appointments and Remunerations                – Insider Trading
  Committee. The members of the Management Committee                   The members of the Board of Directors and some employees
  are appointed for an indefinite period, unless the Board of          that may possess important information (‘insiders’) have signed
  Directors decides otherwise. In that case the Board of Direc-        the protocol preventing abuse of privileged information. This
  tors shall establish the duration of the term of office and          means that anyone wishing to trade in Van de Velde shares must
  the conditions governing its ending. The Board of Directors          first request the permission of the Compliance Officer.
  and the member of the Management Committee shall be at
  liberty to end the tenure with immediate effect at any time,         Insiders are not permitted to trade in securities in the following
  unless the Board of Directors decides otherwise. The end-            periods:
  ing of the tenure of a member of the Management Commit-              (i) The period of two months immediately prior to the announce-
  tee has no impact on the agreements between the company                 ment of the company’s annual results or the period commenc-
  and the person involved as regards additional duties over and           ing at the time of closure of the financial year in question and
  above this tenure.                                                      ending at the time of publication of the annual results, which-
                                                                          ever is shorter.
  The members of the Management Committee are remuner-                 (ii) The period of two months immediately prior to the announce-
  ated or unremunerated for their duties as a member of the               ment of the company’s half-year results or the period com-
  Management Committee. The Board of Directors decides                    mencing at the time of closure of the half-year in question
  whether the members of the Management Committee are                     and ending at the time of publication of the biannual results,
  remunerated, based on the recommendations of the Appoint-               whichever is shorter.
  ments and Remunerations Committee. The remuneration is
  established by a decision of the Board of Directors.                 The Board of Directors also regularly imposes a general transac-
                                                                       tion ban on all insiders in other periods that may be considered
(e) Daily management                                                   to be sensitive.
  In addition to the Management Committee, Van de Velde’s
  daily management team is composed of two managing                    All other staff at Van de Velde have been notified in writing of the
  directors (Herman Van de Velde NV, always represented by             statutory stipulations concerning abuse of insider knowledge.
                                  ,
  Herman Van de Velde and EBVBA 4F always represented by
  Ignace Van Doorselaere). The managing directors are mem-             – Transactions between the company and its directors
  bers of the Management Committee.




                                                                  31
C or p orate G ove r nanc e




The company’s Corporate Governance Charter, which is                     – Belgian Code on Corporate Governance
published on the company’s website, explains the rules                   Van de Velde NV complied with the majority of the principles laid
applicable to transactions and other contractual links between           down in the Belgian Code on Corporate Governance. The Code
the company, including its affiliated companies and its directors        was not complied with in some cases however due to the char-
and members of the Management Committee that do not fall                 acter of the company and the importance of the proper function-
under the conflict of interests scheme.                                  ing of its bodies and employees.


– Statutory auditor                                                      The following provisions were not complied with:
The General Meeting of 25 April 2007 of Van de Velde NV
appointed Ernst & Young Reviseurs d’Entreprises SCCRL Mout-              (i)    Principle 2.3/1, Annexe A independence criteria
straat 54, 9000 Ghent, represented by Jan De Luyck, as the                      ‘The assessment of the independence takes place on the
Statutory auditor. This appointment runs until the annual meet-                 basis of the following criteria: [...] – not to have served on
ing of 2010.                                                                    the board as a non-executive director for more than three
                                                                                terms’;
The annual remuneration given to the statutory auditor in 2008                  The company deviates from this principle, bearing in mind
for the auditing tasks of the simple and consolidated annual                    that, notwithstanding the most recent appointments of 26
accounts of Van de Velde NV was 44,625 euros (excl. VAT). The                   May 2004 and 25 April 2007 when they were appointed
total costs for 2008 of auditing of the financial statements of                 for a period of three years, the independent directors were
all companies of the Van de Velde NV group was 107,625 euros                    always appointed for a term of one year.
(excl. VAT), including the 44,625 euros mentioned above.
                                                                         (ii)   Principle 7.13 Granting of rights to acquire shares to
In accordance with Article 134 of the Companies Code, Van de                    members of the management Committee
Velde announces that the remuneration given to the statutory                    ‘Schemes under which executive managers are remuner-
auditor for exceptional and special tasks and to the persons with               ated in shares, share options or any other right to acquire
whom the statutory auditor has a professional relationship was                  shares should be subject to prior shareholder approval by
41,764 euros (excl. VAT), of which:                                             way of a resolution at the annual general meeting.’
– 27,920 euros for non-auditing tasks,                                          Bearing in mind (i) the minor impact of the company’s
– 9,844 euros to Ernst&Young Germany for tax advice tasks,                      option plan for members of the Management Committee
– 4,000 euros to Ernst&Young Luxembourg for tax advice                          and (ii) the fact that the granting of these options does not
   tasks.                                                                       have a deflationary effect, the company has decided to
                                                                                deviate from this principle.




                                                                    32
C or p orate G ove r nanc e




(iii) Principle 7.15 Disclosure on an individual basis of the             (v)   Principle 8.9 submission of proposals to the General
     remuneration granted to the CEo                                            meeting
     ‘In the Corporate Governance Chapter of the annual report,                 ‘The level of shareholding for the submission of propos-
     the company should disclose, on an individual basis, the                   als by a shareholder to the general shareholders’ meeting
     amount of the remuneration and other benefits granted                      should not exceed 5% of the share capital.’
     directly or indirectly to the CEO, by the company or any                   As a small listed company, Van de Velde NV has raised this
     other undertaking belonging to the same group.’                            threshold to 10%.
     Given that the CEO is remunerated at market rates and
     has not been granted an exceptional exit remuneration                – Conflict of Interests Scheme
     (notice period = 6 months) or exceptional benefits through           In 2007 the procedure laid down in Article 523 of the Companies
     options and/or shares, the Corporate Governance Chapter              Code was not applied.
     of the annual report will disclose only on a collective basis
     the remuneration granted to the CEO (together with the
     remuneration granted to the other members of the Man-
     agement Committee).


(iv) Principle 7.17 remuneration of members of the
     management Committee
     ‘For the CEO and the other executive managers, the Cor-
     porate Governance Chapter of the annual report should
     disclose, on an individual basis, the number and key fea-
     tures of shares, share options or any other right to acquire
     shares, granted during the year.’
     Contrary to this principle, the Corporate Governance Chap-
     ter of the annual report will disclose the shares and share
     options for the members of the Management Committee
     only on a collective basis, given that the company is of the
     opinion that these rights should not be dealt with in a dif-
     ferent way from the other parts of the remuneration pack-
     age of the persons involved.




                                                                     33
34
In for mat ion to Sharehol d e rs




subscribed Capital                                                         Acquisition of own shares
The subscribed capital is 1,936,173.73 euros. It is represented            On 30 April 2008 the Extraordinary General Meeting of Share-
by 13,556,710 equal shares.                                                holders authorised the Board of Directors to buy or sell own
                                                                           shares. This authorisation is valid for a period of three years as
relationships with Dominant shareholders                                   from 22 May 2008, if it is necessary to prevent a serious threat-
Van de Velde Holding holds 7,496,250 (55.3%) shares. It does               ened disadvantage.
so through the Achillea and Vesta foundations as well as Hestia
Holding NV and Ambo Holding NV. Vesta and Hestia Holding NV                As a consequence of the extension of this mandate at the Ordi-
represent the interest of the Van de Velde family. Achillea and            nary General Meeting of 30 April 2008, it is valid for a period of
Ambo Holding NV represent the interest of the Laureys family.              eighteen months commencing on 22 May 2008, if the Board of
                                                                           Directors acquires the legally permissible number of own shares
A majority of Van de Velde’s directors are appointed from the              at a price equal to the price at which they are quoted on Euron-
candidates nominated by Van de Velde Holding NV, as long as it             ext, in accordance with article 620 of the Companies Code.
directly or indirectly holds no less than 35% of the company’s
shares.                                                                    In 2008, the Board of Directors acquired 2,484 shares at an aver-
                                                                           age price of 33.33 euros and 32,500 shares at an average price
General meeting                                                            of 28.15 euros by means of a discretionary assignment.
The General Meeting is held at the seat of the company on the
last Wednesday of April at 5 pm. If this day is an official holiday        These shares are to be offered to the members of the Manage-
the meeting is held on the next working day.                               ment Committee and selected employees as part of an option
                                                                           programme.
An Extraordinary General Meeting can be convened whenever
the interests of the company demand it and must be convened                The Board of Directors has given two additional discretionary
whenever the shareholders representing one fifth of the capital            assignments for the purchase of own shares within its term. The
demand it.                                                                 first expired on 15 November within the term of eighteen months
                                                                           after the publication in the annexes to the Belgisch Staatsblad/
Permitted Capital                                                          Moniteur belge (16 May 2007). The second was granted until
The Board of Directors is authorised for a period of five years,           15 December 2008 within eighteen months of publication in the
from the announcement in the annexes to the Belgisch Staats-               annexes to the Belgisch Staatsblad/Moniteur belge of 22 May
blad/Moniteur belge (22 May 2008), to raise the subscribed capi-           2008. A total of 269,230 shares were purchased at an average
tal by one or more times 1,926,406.25 euros, under the condi-              price of 25.20 euros per share under these two discretionary
tions in the articles of association.                                      assignments.


Publication of major stakes                                                See note 11 to the consolidated financial statements for more
All shareholders holding at least 3% of the voting rights must             information.
identify themselves.




                                                                      35
In for mat ion to Sharehol d e rs




Dividend Policy                                                            Investor information is published at www.vandevelde.eu in three
Van de Velde’s objective is to pay out a stable and gradually              languages: Dutch, French and English. Some information is also
increasing annual dividend. In doing so, it takes the following            published in German. An updated section is reserved for finan-
factors into consideration:                                                cial and mandatory information that is freely accessible to every-
– Appropriate payment to shareholders in comparison to other               one at no cost. That section of the website contains a calendar
   companies listed on Euronext Brussels among other things,               of the periodical publications and shall change as the financial
– Keeping a sufficient self-financing capacity to be prepared for          year advances.
   interesting investment opportunities,
– Payment in proportion to the cash flow expectations.                     The annual information includes a summary or a reference to all
                                                                           information published in the previous 12 months. It is possible to
At the General Meeting of 31 May 2006 the customary percent-               subscribe to all financial information for publication.
age paid out was set at 40% of the consolidated profit.
                                                                           The following information is available from the past five years:
Financial services                                                         – All periodical information;
The financial services are provided by KBC Bank NV, ING Bank               – Special press releases
and Bank Degroof. One of these banks will be appointed as main             – The annual financial report;
payment agent. This relates to the payment of the coupons for              – The financial statements and annual report in accordance
Van de Velde NV shares with ISIN code BE0003839561 that                       with the articles of association.
have matured.
                                                                           The financial calendar also includes the date on which the annual
The main payment agent and the payment agents will retain the              financial report will become available on the website.
settled coupons for a period of five years. After this period the
coupons will be destroyed.                                                 The notifications of the General Meeting, the most recent coor-
                                                                           dinated articles of association, the financial services information,
The processing of the electronic and physical coupons takes                the most recent dividend payment and the prospectus are also
place in accordance with the procedures of Euroclear Belgium               available on the website.
and using the systems of Euroclear Belgium.
                                                                           A summary is also published on the website no later than 20
Financial Communication                                                    business days after publication of the annual financial report,
Van de Velde’s communication with investors and the financial              referring to all information published in the preceding twelve
markets is characterised by transparency, completeness and                 months.
consistency.
                                                                           Van de Velde also organises regular personal meetings with the
The company publishes a detailed annual report every year,                 press, analysts and institutional investors and participates in
describing the company’s activities. This report is published in           various events to realise direct contacts with individual private
English and Dutch. A six-monthly report is also published and an           investors and to monitor sentiments in the financial community.
interim declaration is drawn up in the first and second half of the
financial year. Press releases are published in the event of infor-
mation liable to have an impact on the share price.




                                                                      36
In for mat ion to Sharehol d e rs




Proposed profit distribution                                             Proposed profit distribution:                              euros
Bearing in mind the result of the financial year and the improved        Results for the financial year                         28,767,935
cash flow, the Board of Directors proposes to the General Meet-
ing of Shareholders payment of a dividend over 2008 that is 40%          Minority interests                                        70,419
of the consolidated profit.                                              Profit available for distribution                      28.697.516
                                                                         Pay out percentage 40%                                 11.479.006
The dividend on distributable profit will be allocated to the            Gross dividend of 0.9 euros per share                 11,902,482
shares with rights that are not suspended. So, taking account of         on 13,224,980 shares
the number of own shares held for which no share in the profit is
retained, distributable profit will not be reduced.                      Retained profits                                      16,895,453


It concerns 331,730 purchased own shares, 62,500 of which
were purchased in 2007 and 2008 as part of an option pro-                 Financial Calendar
gramme and 269,230 of which were purchased on the basis of                Closing of financial year                   31 December 2008
two separate discretionary assignments (see above). See Article           Announcement of the annual results            17 February 2009
622 of the Companies Code. The number of shares with dividend
                                                                          General Meeting of Shareholders                 31 March 2009
rights was accordingly reduced from 13,556,710 to 13,224,980.
                                                                          Algemene Vergadering der Aandeelhouders           29 April 2009
The application of the dividend payment percentage produces
a dividend per share of 0.87 euros. It is nevertheless proposed           Publication of first interim statement            29 April 2009

that the dividend of 0.9 euro per share be retained. After pay-           Ex-coupon date                                     4 May 2009

ment of 25% tax, this represents a net dividend of 0.675 euros            Dividend payment date                              7 May 2009

per share. After approval by the General Meeting the dividend             Publication of half-yearly results              28 August 2009

will be paid out from 7 May 2009 at branches of the KBC, ING              Publication of second interim statement 20 November 2009
and Bank Degroof upon presentation of coupon 3.                           Turnover data                        July 2009 and January 2010




                                                                    37
3. Subsequent events after year’s end




On 13 February 2009 the decision was taken to close down the
Hungarian production facility, following the declaration of intent
of early January 2009. Given that the social negotiations are still
ongoing, the restructuring expense cannot yet be estimated and
is therefore not included in the balance sheet.




                                                                      40
C ons ol id ate d annu a l account s at 31 - 1 2 - 2 008
                   Van de Vel de
4. Consolidated annual accounts at 31-12-2008

C ons oli d ate d b a l anc e she e t




           € 000                                           2008         2007    (Note)


           Total non-current assets                   66,094.00     44,619.00


           Goodwill                                     6,357.00                 7a.
           Tangible fixed assets                         ,317
                                                       17 .00       17,288.00     6
           Intangible assets                          12,640.00      1,630.00    8a.
           Participations (equity method)             26,061.00     10,980.00    8b.
           Available-for-sale financial assets                0     13,659.00    7b.
           Other non-current assets                    3,719.00      1,062.00     9


           Current assets                             71,173.00     86,407.00


           Inventories                                28,919.00     24,463.00     4
           Trade and other receivables                15,374.00     14,962.00     3
           Other current assets                         4,397.00     2,474.00     5
           Cash and cash equivalents                  22,483.00     44,508.00     2


           Total assets                               137,267.00   131,026.00




                                                 46
C ons oli d ate d b a l anc e she e t




           € 000                                     2008         2007    (Note)


           shareholders’ equity                 120,884.00   117,386.00


           Share capital                          1,936.00     1,936.00    11
           Own shares                            -8,718.00      -936.00    11
           Share premium                            743.00       743.00    11
           Foreign currency differences          -9,113.00    -8,830.00    11
           Retained earnings                    136,036.00   124,473.00    11


           Total non-current liabilities          3,219.00     3,877.00


           Provisions                               874.00     1,379.00    12
           Pensions                                 35.00        36.00      17
           Deferred tax liabilities               2,151.00     2462.00     13
           Other borrowings                        159.00


           Total current liability               13,164.00     9,763.00


           Trade and other payables              11,636.00     8,954.00    14a
           Other current liabilities                867.00      718.00     14b
           Income taxes payable                     661.00        91.00    14b


           Total equity and liabilities         137,267.00   131,026.00




                                           47
C ons oli d ate d inc ome st ate me nt




         € 000                                                   2008         2007     (Note)


         Turnover                                           133,030.00   130,336.00     22
         Other operating income                               2,296.00     1,853.00     22
         Cost of materials                                  -31,735.00    -32,617.00    22
         Other expenses                                     -32,867.00   -30,962.00     22
         Personnel expenses                                 -27,344.00   -24,035.00      17
         Depreciation and amortisation                       -3,186.00    -2,921.00     6, 8


         operating profit before non-recurrent items         40,194.00   41,654.00


         Finance income                                       6,139.00     4,279.00     16
         Finance costs                                       -6,085.00    -2,139.00     16


         Profit (equity method)                                  71.00       255.00     8b


         Profit before taxes                                 40,319.00   44,049.00


         Income taxes                                       -11,692.00   -13,066.00     18


         Profit for the period                               28,627.00   30,983.00




         Basic earnings per share                                 2.13         2.29     20
         Diluted earnings per share                               2.13         2.29     20
         Weighted average number of shares                  13,456,124   13,556,710     20
         Weighted average number of shares for
         diluted profit per share                           13,456,999                  20
         Proposed dividend per share                               0.9          0.9     20
         Total dividend                                     11,902,482   12,201,039     20




                                                       48
St atement of change s in e qu it y




                                                              Acquisition                   stock    Currency
€ 000                                      share     share            own    retained    compen-    conversion
Change in Equity                           capital premiums       shares     earnings     sations     reserves         Total


Equity at 01/01/2007                   1,936,00     743,00                  129,396.00      0.00     -5,256.00    126,819.00


Profit for the period                                                        30,983.00                             30,983.00
Revaluation reserves Top Form shares                                        -11,623.00                            -11,623.00
Foreign currency conversion                                                                           -3,574.00    -3,574.00
Acquisition of own shares                                         -936.00                                            -936.00
Equity dividends                                                            -24,283.00                            -24,283.00


Equity at 31/12/2007                   1,936.00     743.00       -936.00    124,473.00      0.00     -8,830.00    117,386.00


Equity at 01/01/2008                   1,936.00     743.00       -936.00    124,473.00      0.00     -8,830.00    117,386.00


Profit for the period                                                        28,627.00                             28,627.00
Revaluation reserves Top Form shares                                         -4,885.00                             -4,885.00
Foreign currency conversion                                                                            -283.00       -283.00
Acquisition of own shares                                       -7.782,00                                           -7.782,00
Amortization deferred stock compensation                                                   141.00                     141.00
Stock options granted and accepted                                                         774.00                     774.00
Deferred stock compensation                                                               -774.00                   -774.000
Equity dividends                                                            -12,320.00                            -12,320.00


Equity at 31/12/2008                   1,936.00     743.00      -8,718.00   135,895.00     141.00     -9,113.00   120,884.00




                                                                 49
C ons oli d ate d St ate me nt of c ash f l ow s




          € 000                                                         2008           2007


          Cash flows from operating activities
          Cash receipts from customers                             170,550.00    163,939.00
          Cash paid to suppliers and employees                     -117,469.00   -107,588.00
          Cash generated from operations                            53,081.00     56,350.00
          Income taxes paid                                        -12,385.00    -14,346.00
          Other taxes paid                                         -10,793.00     -9,934.00
          Interest and bank costs paid                                -343.00        102.00
          Gains (+) / losses (-) on disposal of assets                                22.00
          =net cash from operating activities                      29,560.00      32,195.00


          Cash flows from investing activities
          Interests received                                         1,337.00      1,760.00
          Dividends received (note 16)                                 215.00        885.00
          Proceeds from sale of equipment                              174.00         23.00
          Purchase of tangible fixed assets (notes 6 and 8)         -2,580.00      -2,791.00
          Investments in associated companies                       -6,483.00     -11691.00
          Purchase of own shares (note 11)                           -7,782.00
          Investments in subsidiary, net of cash acquired          -15,380.00
          Sale of consolidated companies, net of cash
          disposed of (note 7c)                                       -590.00
          = net cash used in investing activities                  -31,089.00    -11,814.00


          Cash flows from financing activities
          Financial lease costs                                        -22.00
          Dividends paid                                           -11,039.00    -24,529.00
          Repayment of long-term borrowings                         -4,231.00       -140.00
          Financing of customer growth fund                         -1,280.00
          Reclassification of CDOs to other non-current assets      -3,450.00
          = net cash used in financing activities                  -20,022.00    -24,669.00
          net increase in cash and cash equivalents                -21,551.00     -4,288.00


          Cash and cash equivalents at beginning of period
          (note 2)                                                 44,508.00      49,223.00
          Exchange rate differences                                   -474.00        -427.00


          Cash and cash equivalents at end of period               22,483.00      44,508.00




                                                              50
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         The Van de Velde group, listed on the Brussels Stock Exchange, designs, develops, manufactures and
         markets fashionable luxury lingerie together with its subsidiaries.


         The company’s main office is located in Wichelen, Belgium.


         General
         The accompanying consolidated financial statements have been prepared in compliance with Interna-
         tional Financial Reporting Standards (IFRS), as adopted for use in the EU on the balance sheet date.
         The accounting policies differ in some areas from those previously used under Belgian accounting
         law.


         The financial statements were authorised for publication by the Board of Directors on 12 February
         2009.


         The financial statements are presented in thousands of euros and are prepared under the historical
         cost convention, except for the measurement at fair value of available-for-sale financial instruments
         and derivative financial instruments.


         The preparation of financial statements in conformity with IFRS requires that management makes
         certain estimates and assumptions that affect the amounts reported in the financial statements and
         accompanying notes.


         Estimates made on each reporting date reflect the conditions that existed on those dates (e.g. market
         prices, interest rates and foreign exchange rates). Although these estimates are based on manage-
         ment’s best knowledge of current events and actions that the group may undertake, actual results
         may differ from those estimates.


         Change in accounting policies
         The accounting policies are in accordance with those applied in previous fiscal years.
         The group has made a few additions to the accounting policies. See ‘acquired brands’, ‘CDOs’ and
         ‘share-based payments’.


         Principles of consolidation
         Subsidiaries
         A subsidiary is an entity that Van de Velde NV directly or indirectly controls and whose financial and
         operating policies it has the power to decide so as to obtain benefits from its activities.
         The financial statements of subsidiaries are included in the consolidated financial statements of the
         group from the date that control commences until the date that control ceases. They are prepared as
         of the same reporting date and by using the group accounting policies. Intragroup balances, transac-
         tions, income and expenses are eliminated in full.




                                                            52
1.   Su m mar y of t he mo st imp or t ant account ing p ol icie s




        Associated companies
        Associated companies are companies in which Van de Velde NV directly or indirectly holds a signifi-
        cant influence and that are not subsidiaries or joint ventures. This is assumed to be the case when the
        group holds at least 20% of the voting rights attached to the shares. The financial statements of these
        companies are drawn up in accordance with the same accounting policies as used for the group.


        The consolidated financial statements contain the share of the group in the result of associated com-
        panies in accordance with the equity method from the day that the joint control or the significant
        influence is acquired until the day it ends. If the share of the group in the losses of the associated
        companies is greater than the carrying amount of the participation, the carrying amount is set at zero
        and additional losses are recognised only insofar as the group has assumed additional obligations.
        Unrealised profits from transactions with associated companies are eliminated in the amount of the
        stake of the group against the participation in the joint venture or associated company. Participations
        in associated companies are revalued if there are indications of a possible exceptional impairment, or
        of the disappearance of the reasons for earlier exceptional impairments.


        The participations valued in accordance with the equity method in the balance sheet also include the
        carrying amount of related goodwill.


        The acquisition method is used to process the business combination. The cost of a business combi-
        nation is valued as the total of the fair value on the date of exchange of relinquished assets, issued
        equity instruments, obligations entered into or acquired plus any costs directly attributable to the busi-
        ness combination. Identifiable acquired assets, acquired obligations and contingent obligations that
        are part of a business combination are initially valued at fair value at acquisition date, regardless of the
        existence of any minority shareholding.


        Foreign currencies
        (1) Foreign currency transactions
        Foreign currency transactions are accounted for at exchange rates prevailing on the date of the
        transactions. Monetary assets and liabilities denominated in foreign currencies are converted at the
        exchange rate on the balance sheet date. Gains and losses resulting from the settlement of foreign
        currency transactions and from the conversion of monetary assets and liabilities denominated in for-
        eign currencies are recognised in the income statement. Non-monetary assets and liabilities denomi-
        nated in foreign currencies are converted at the foreign exchange rate prevailing on the date of the
        transaction.




                                                            53
1.   Su m mar y of t he mo st imp or t ant account ing p ol icie s




        (2) Financial statements of foreign activities
        Van de Velde’s foreign operations outside the eurozone are considered as foreign entities. Accordingly,
        assets and liabilities are converted to euros at foreign exchange rates prevailing on the balance sheet
        date. Income statements of foreign entities are converted to euros at exchange rates approximating
        the foreign exchange rates prevailing on the dates of the transactions. The components of share-
        holders’ equity are converted at historical rates. Exchange differences arising from the conversion of
        shareholders’ equity to euros at year-end exchange rates are recognised under the Foreign Currency
        Translation Reserve. On disposal of a foreign operation the deferred cumulative amount recognised in
        equity relating to that particular foreign operation shall be recognised in the income statement.


        intangible assets
        (1) Research and development
        The nature of the development costs within Van de Velde group is such that they do not meet the
        criteria of IAS 38 for recognition as intangible assets. They are therefore expensed as incurred.


        (2) Acquired brands
        Brands that are acquired as part of a business combination are deemed to be intangible assets with
        an indefinite useful life. These are measured at the value established as part of the attribution of fair
        value of the identifiable assets, obligations and contingent obligations at acquisition date. Following
        initial recognition, these are valued at cost less any accumulated impairment losses. These brands
        are not amortized but are subject to an annual impairment test. The assessment of indefinit life is
        reviewed to determine whether the indefinite live continues to be supportable.


        (3) Key money
        Key money refers to the ‘droit au bail’ or right to rent the shops in France and is recorded at cost. The
        value of this right does not decrease in the course of the lease period but changes with the market
        for this type of commercial right. Therefore the useful life of key money is considered to be indefinite.
        Key money will be subject to a yearly exceptional impairment test.


        (4) Other intangible assets
        Other intangible assets acquired by Van de Velde are recognised at cost (purchase price plus all directly
        attributable costs) less accumulated amortisation and accumulated impairment losses. Expenditure
        on internally generated goodwill and brands is recognised in the income statement when incurred.
        The useful life of intangible assets other than key money is considered to be finite. Amortisation
        begins when the intangible asset is available using the straight-line method. The useful life of intangi-
        ble assets with a finite life is generally estimated at 5 years.




                                                            54
1.   Su m mar y of t he mo st imp or t ant account ing p ol icie s




        Available-for-sale financial assets
        Van de Velde holds shares in a non-consolidated company (Top Form International). Although Van de
        Velde has no intention of selling these shares, they must be recognised as ‘available-for-sale financial
        assets’, in accordance with IAS 39 Financial instruments: Recognition and Measurement. They are
        measured at fair value. Changes in the fair value of these assets are recognised directly in a separate
        component of equity. Fair value is determined on the basis of the stock-market price on the reporting
        date.


        If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net
        of any principal payment and amortisation) and its current fair value, less any impairment loss previ-
        ously recognised in profit or loss, is transferred from equity to the income statement. Reversals of
        impairment losses in respect of equity instruments classified as available-for-sale are not recognised
        through profit or loss.


        Goodwill
        (1) Goodwill
        Goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of
        the net identifiable assets of the acquired subsidiary/associate at the date of acquisition.


        Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances
        indicate that the asset might be impaired. Goodwill is expressed in the currency of the subsidiary to
        which it relates and is translated to euros using the year-end exchange rate.


        Goodwill is stated at cost less accumulated amortisation and impairment losses.


        (2) Negative goodwill
        If Van de Velde’s interest in the net fair value of the identifiable assets, liabilities and contingent liabili-
        ties exceeds the cost of the business combination, Van de Velde will immediately recognise any nega-
        tive difference through profit or loss.


        Tangible fixed assets
        (1) Owned assets
        Items of property, plant and equipment are recorded at cost less accumulated depreciation and accu-
        mulated impairment losses. Cost is determined as being the purchase price plus other directly attrib-
        utable acquisition costs, such as non-refundable tax and transport.


        (2) Subsequent expenditure
        Subsequent expenditure is capitalised only when it increases the future economic benefits embod-
        ied in the item of property, plant and equipment. Otherwise it is recognised in profit or loss when
        incurred.




                                                              55
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         (3) Depreciation
         The depreciable amount equals the cost of the asset less its residual value. Depreciation starts from
         the date the asset is ready for use, using the straight-line method over the estimated useful life of the
         asset. Residual value and useful life are reviewed at least at each financial year-end.


         The depreciation rates used are as follows:
         Buildings                                15-50 years
         Production machinery and equipment       2-10 years
         Electronic office equipment              3-5 years
         Furniture                                5-10 years
         Vehicles                                 3-5 years


         Land is not depreciated as it is deemed to have an indefinite life.


         impairment of assets
         The carrying amount of Van de Velde’s non-current assets, other than deferred tax assets, financial
         assets and assets arising from employee benefits are reviewed on each balance sheet date to deter-
         mine whether there is any indication of impairment. If any such indication exists, the asset’s recover-
         able amount is estimated. An impairment test is conducted annually on intangible assets that are
         not yet available for use, intangible assets with an indefinite useful life and goodwill, regardless of
         whether there is any indication of impairment. An impairment loss is recognised in profit or loss
         whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are
         recognised in the income statement.


         (1) Calculation of recoverable amount
         The realisable value of an asset is the greater of its fair value less costs of sale and value in use. In
         assessing value in use, the estimated future cash flows are discounted to their present value using
         a pre-tax discount rate that reflects current market assessments of the time value of money and the
         risks specific to the asset. For an asset that does not generate largely independent cash inflows, the
         recoverable amount is determined for the cash-generating unit to which the asset belongs.


         (2) Reversal of impairment
         An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impair-
         ment loss is reversed if there has been a change in the estimates used to determine the recoverable
         amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not
         exceed the carrying amount that would have been determined, net of depreciation or amortisation, if
         no impairment loss had been recognised.




                                                              56
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         inventories
         Merchandise and finished goods are valued at the lower of cost or net realisable value. Cost of inven-
         tories comprises all costs of purchase, cost of conversion and other costs incurred in bringing the
         inventories to their present location and condition using the weighted average method.


         Costs of purchase include:      – purchase price plus
                                         – import duties and other taxes (if not recoverable); plus
                                         – transport, handling and other costs directly attributable to the
                                            acquisition of the goods; less
                                         – trade discounts, rebates and other similar items.


         Costs of conversion include:    – costs directly related to the units of production; plus
                                         – a systematic allocation of fixed and variable production
                                            overheads incurred in converting materials into finished goods.


         The lower of cost or net realisable value allowances are calculated consistently throughout the group
         based on the age and expected future sales of the items on hand.


         Trade and other receivables
         trade receivables are carried at cost less impairment losses. If there is objective evidence that an
         impairment loss on accounts receivable has been incurred, the impairment loss recognised is the
         difference between the carrying amount and the present value of estimated future cash flows. An
         assessment of impairment is made for all accounts receivable individually. If no objective evidence
         of impairment for individual accounts receivable exists, a collective assessment for impairment is
         performed.


         Derivative financial instruments
         Hedges
         Van de Velde uses derivative financial instruments only in order to reduce the exposure in foreign cur-
         rency risk. These financial instruments are concluded in accordance with the aims and principles laid
         down by general management, which prohibits the use of such financial instruments for speculation
         purposes.




                                                           57
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         Derivative financial instruments are initially measured at fair value. Although they provide effective
         economic hedges, they do not qualify for hedge accounting under the specific requirements in IAS 39
         (Financial investments: Recognition and Measurement). As a result, at reporting date, all derivatives
         are measured at fair value with changes in fair value recognised immediately in the income state-
         ment. The fair value of derivatives is calculated by discounting the expected future cash flows at the
         prevailing interest rates.


         All regular purchases and sales of financial assets are recognised on the settlement date.


         Collateralised debt obligations (CDOs)
         Investments in derivative collateralised debt obligations (CDOs) are measured at fair value with rec-
         ognition of changes in fair value through profit and loss. Fair value is based on market value at the
         balance sheet date. The value is based on a valuation technique that is consistent with generally
         accepted methodologies for pricing these financial instruments. CDOs are recognised in the balance
         sheet as other non-current assets.


         Cash and cash equivalents
         Cash and cash equivalents represent cash at bank, cash in hand, and short-term deposits, highly
         liquid investments with maturities of three months and less. Those cash and cash equivalents are
         financial assets held to maturity. Interest income is recognised based on the effective interest rate of
         the asset.


         share capital
         (1) Change in capital
         When there is an increase or decrease in Van de Velde’s authorised capital, all directly attributable costs
         relating to that event are deducted from equity and not recognised in profit or loss when incurred.


         (2) Dividends
         Dividends are recognised as a liability in the period in which they are declared.


         Provisions
         Provisions are recognised when Van de Velde has a present legal or constructive obligation as a result
         of past events and it is probable that an outflow of resources embodying economic benefits will be
         required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
         If the effect is material, provisions are determined by discounting the expected future cash flows at a
         pre-tax rate that reflects current market assessments of the time value of money and, where appro-
         priate, the risks specific to the liability.




                                                             58
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         Employee benefits
         (1) Pension plan
         The company’s obligations to contribute to pension plans are charged to the income statement as
         incurred.


         (2) Share-based payment
         The fair value of the stock options issued under the group stock option plan is determined at grant
         date, taking into account the terms and conditions upon which the options are granted, and by using
         a valuation technique that is consistent with generally accepted valuation methodologies for pricing
         financial instruments and that incorporates all factors and assumptions that knowledgeable, willing
         market participants would consider in setting the price. The fair value of the stock options are rec-
         ognised as personnel expenses over their resting period, until the beneficiary acquires the option
         unconditionally.


         income taxes
         income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recog-
         nised in the income statement except insofar as it relates to items included directly in the sharehold-
         ers’ equity. In that case income tax is included in the shareholders’ equity.


         Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted on
         the balance sheet date, and any adjustments to tax payables in respect of previous years.


         Deferred income tax is calculated using the liability method based on temporary differences at the
         balance sheet date between the tax bases of assets and liabilities and their carrying amounts for
         financial reporting purposes.


         Deferred income tax assets are recognised only insofar as it is probable that taxable profit will be
         available against which the deductible temporary differences, the carry-forward of unused tax credits
         and unused tax losses can be utilised.


         In the following cases no deferred taxes are recorded on temporary differences: where the temporary
         difference arises from recognition of goodwill or of an asset or liability in a transaction that is not a
         business combination and, at the time of the transaction, affects neither accounting profit nor taxable
         profit or loss; and in respect of taxable temporary differences connected to investments in subsidiar-
         ies, where the time of the settlement of the temporary differences can be established and it is prob-
         able that the temporary differences will not be settled in the near future.




                                                            59
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in
         the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have
         been enacted or substantively enacted at the balance sheet date.


         Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set
         off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable
         entity and the same taxation authority.


         Trade and other payables
         Trade and other payables are stated at cost. Trade payables are non-interest bearing and are normally
         settled on 30-day terms. Other payables are non-interest bearing and have an average term of six
         months.


         revenue
         (1) Goods sold
         In relation to the sale of goods, revenue is recognised when goods have been invoiced and shipped to
         the buyer. The possible return of goods or non-settlement of invoices is not taken into account.


         (2) Financial income
         Financial income comprises dividend income and interest income. Royalties and dividends arising
         from the use by others of the company’s resources are recognised when it is probable that the
         economic benefits associated with the transaction will flow to the company and the revenue can
         be measured reliably. Dividend income is recognised in the income statement on the date that the
         dividend is declared.
         Interest income is recognised based on the effective interest rate of the asset.


         (3) Government grants
         A government grant is recognised when there is reasonable assurance that it will be received and
         that the company will comply with the conditions attached to it. Grants that compensate the company
         for expenses incurred are recognised as revenue in the income statement on a systematic basis in
         the same periods in which the expenses are incurred. Grants that compensate the company for the
         cost of an asset are recognised as income over the life of a depreciable asset by way of a reduced
         depreciation charge.




                                                             60
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         Expenses
         (1) Interest expenses
         All interest and other costs incurred in connection with borrowings and finance lease liabilities are
         recognised in the income statement using the effective interest rate method.


         (2) Research and development, advertising and promotional costs and systems
            development costs
         Research, advertising and promotional costs are expensed in the year in which these costs are
         incurred. Development costs and systems development costs are expensed in the year in which
         these costs are incurred if they do not meet the criteria for capitalisation. If the development expendi-
         ture meets the criteria, it will be capitalised.


         recent ifrs pronouncements
         The group has not early adopted any standards or interpretations that have been adopted for use in
         the European Union but that are not yet effective as at 31 December 2008. The group assesses that
         the impact of adoption of these new or revised standards and interpretations will not have a signifi-
         cant impact on the financial statements.


         These new and amended standards and interpretations applicable as of the end of 2008 may be
         described as follows:


         IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and
         Separate Financial Statements – Costs of an investment in subsidiaries, jointly controlled entities and
         associates (Amendments).
         These amendments become effective for periods beginning on or after 1 January 2009.


         IFRS 2 Share-based Payment – Vesting Conditions and Cancellations (Amendments)
         In January 2008 IASB published an amendment to IFRS 2 that clarifies the definition of a vesting
         condition and prescribes the method for recognising the cancellation of an award. This amendment
         becomes effective for fiscal years beginning on or after 1 January 2009.


         IFRS 8 Operational segments
         In November 2006 IASB published IFRS 8, which becomes effective for fiscal years beginning on or
         after 1 January 2009. IFRS 8 replaces IAS 14 Segment Reporting.




                                                            61
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         IAS 1 Presentation of Financial Statements (Revised)
         The IASB published the revised version of IAS 1 Presentation of Financial Statements in September
             ,
         2007 which becomes effective for fiscal years beginning on or after 1 January 2009. The standard
         distinguishes between changes to equity for owners and non-owners. Therefore, the consolidated
         statement of changes in equity will contain only details of transactions with owners, with all changes
         in equity with respect to non-owners being recognised on one line. In addition, the standard intro-
         duces an overview of generated and non-generated profits, which includes all profits and losses in
         the income statement, together with all other items relating to recognised profit and loss, either in a
         single overview or in two linked overviews.


         IAS 23 Borrowing Costs (Revised)
                                                                  .
         The IASB published the amendments to IAS 23 in April 2007 The amended IAS 23 requires activa-
         tion of borrowing costs that are directly attributable to the acquisition, construction or production
         of a qualifying asset. The amended IAS 23 becomes effective for fiscal years beginning on or after
         1 January 2009.


         IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements – Puttable
         Financial Instruments and obligations in the event of liquidation (Amendments)
         These amendments become effective for fiscal years beginning on or after 1 January 2009 and have
         limited application, by which puttable financial instruments may only be classified as equity provided
         they fulfil a number of specific criteria.


         Improvements to IFRS
         In May 2008 the IASB published its first omnibus of changes to standards, primarily to eliminate
         inconsistencies and clarify formulations. There are separate transitional conditions for each standard.


         IFRS 3 Business Combinations (Revised) and IAS 27 Consolidated and Separate Financial Statements
         (Revised)
         The IASB published the revised standard for business combinations in January 2008. It becomes
         effective for fiscal years beginning on or after 1 July 2009. The standard introduces changes to how
         business combinations are recognised. These amendments will have an impact on recognised good-
         will, reported results during an acquisition period and results to be reported in the future.


         IAS 39 Financial instruments: Recognition and Measurement – Qualifying hedges (Amendment)
         These amendments become effective for periods beginning on or after 1 July 2009.




                                                            62
1. Su m mar y of t he mo st imp or t ant account ing p ol icie s




         IFRIC 13 Customer Loyalty Programmes
                                                  .
         The IFRIC published IFRIC 13 in June 2007 This interpretation requires loyalty award credits to be
         recognised as a separate part of the transaction in which they are granted. This amendment becomes
         effective for fiscal years beginning on or after 1 July 2008.


         IFRIC 15 Agreement for the Construction of Real Estate
         The IFRIC published IFRIC 15 in July 2008. This amendment becomes effective for fiscal years begin-
         ning on or after 1 January 2009. They clarify when and how revenues and related costs of the sale of
         a real estate property must be recognised if the developer has reached agreement before completion
         of the property.


         IFRIC 16 Hedges of a Net Investment in a Foreign Operation
         The IFRIC published IFRIC 16 in July 2008. This interpretation provides guidelines for recognising the
         hedge of a net investment. This amendment becomes prospectively effective for fiscal years begin-
         ning on or after 1 October 2008.




                                                             63
2 . C ash and c ash e qu iv a l e nts




          Cash and cash equivalents consist of the following


          € 000                                                                       2008               2007


          Cash at banks and in hand                                                   9,702             15,438
          Marketable securities                                                     12,781              29,070
          Cash and cash equivalents                                                 22,483              44,508


          Cash at banks earns interests at floating rates based on daily bank deposit rates. Marketable securi-
          ties have varying terms of between one and three months depending on the immediate cash require-
          ments of the group. Interest is paid on these at the relevant short-term deposit rate.


          Cash and cash equivalents recognised in the cash flow statement comprise the same elements as
          presented above.




                                                            65
3 . Tra d e and ot he r re c e iv abl es




           Accounts receivable are as follows:


           € 000                                                                        2008              2007


           Trade receivables, gross                                                 16,564               15,398
           Less: allowance for doubtful accounts                                       -1,190              -436
           Accounts receivable, net                                                 15,374               14,962


           Trade and other receivables are non-interest bearing. Standard payment terms are country-defined.
           Next to payment terms, Van de Velde also applies customer-defined credit limits, in order to assure a
           proper follow-up. In case of overdue invoices a reminder procedure is started.


           In 2008 there was a loss of 457 thousand euros in trade receivables (64 thousand euros in 2007).


           The analysis on trade receivables that were past due but not impaired is as follows:


                                                      neither past due
           net carrying amount                            nor impaired           60-90 days          > 90 days


           2007                                                  13,298                   586             1,515
           2008                                                  12,954                   796             2,814


                                       ,
           On 31 December 2008 and 2007 respectively 78.21% and 86.4% of the total trade receivables were
           neither past due nor impaired.
           No trade receivables were provided as security in the years under review.




                                                            66
4. Inventor ie s




         Inventories by major classification are as follows:


         € 000                                                                      2008                2007


         Finished goods                                                           16,981               11,281
         Work in progress                                                           7,740               6,466
         Raw materials                                                            13,788               11,603
         inventories gross                                                        38,509               29,350
         Less: Allowance for obsolescence                                         -9,590               -4,887
         inventories net realisable value                                         28,919               24,463


         The provision in 2008 for obsolescence relates to finished goods (4,614), work in progress (20) and
         raw materials (4,956). The provision in 2007 for obsolescence relates to finished goods (1,799), work
         in progress (20) and raw materials (3,068).


         The additional write-down on inventories recognized as an expense amounted 3,152 thousand euros
         in 2008, compared with 3,025 thousand euros in 2007 on the inventory of Van de Velde NV.




                                                               67
5 . O t her c u r re nt ass e ts




           Other current assets consist of the following:


           € 000                                                 2008    2007


           Prepaid expenses                                      1,526   1,121
           Taxes receivable (VAT)                                 634     405
           Accrued income                                         446     749
           Sundry                                                 269     199
           Exchange rate result on forward contracts             1,522
           other current assets, net                             4,397   2,474




                                                            68
6. Tang ibl e f ixe d ass e ts




                                                                        Production
                                                           Land &    machinery and
          Tangible fixed assets                   PPE    Buildings      equipment


          Gross assets (€000)


          At 01/01/2007                   37,376.00      16,734.00       20,642.00
          Investments                         2,035.00     228.00          1,807.00
          Exchange adjustments
          Disposals                            -280.00       -5.00         -275.00
          Transfers
          At 31/12/2007                   39,131.00      16,957.00       22,174.00


          Depreciation and impairment


          At 01/01/2007                   19,036.00       5,895.00       13,141.00
          Recognised depreciation             2,607.00     675.00         1,932.00
          Exchange adjustments                 198.00      149.00            49.00
          Disposals                            -202.00                     -202.00
          At 31/12/2007                   21,639.00       6,719.00       14,920.00
          Total PPE (exclusive Grants)    17,492.00      10,238.00         7,254.00
          Grants at 31/12/2007                 -259.00     -231.00           -28.00
          Grants utilised in 2007               55.00       40.00            15.00
          Total PPE, net                  17,288.00      10,047.00         7,241.00


          Gross assets (€ 000)


          At 01/01/2008                   39,131.00      16,957.00       22,174.00
          Investments                         1,940.00      307.00        1,633.00
          Acquisition of subsidiary            823.00      784.00            39.00
          Disposals                            -644.00      -14.00         -630.00
          At 31/12/2008                   41,250.00      18,034.00       23,216.00




                                         69
6. Tang ibl e f ixe d ass e ts




                                                                                                 Production
                                                                                 Land &      machinery and
          Tangible fixed assets                                     PPE        Buildings         equipment


          Depreciation and impairment


          At 01/01/2008                                     21,639.00           6,719.00           14,920.00
          Recognised depreciation                               2,714.00          766.00            1,948.00
          Exchange adjustments                                     66.00           46.00               20.00
          Disposals                                              -639.00           -14.00            -625.00
          At 31/12/2008                                     23,780.00            7,517.00          16,263.00
          Total PPE (exclusive Grants)                      17,470.00          10,517.00            6,953.00
          Grants at 31/12/2008                                    -207.00          -85.00            -122.00
          Grants utilised in 2008                                  54.00           22.00               32.00
          Total PPE, net                                        17,317.00      10,454.00            6,863.00


          Tangible fixed assets on 31 December 2008 does not include any expenditure for assets in the course
          of construction (in 2007: 287 thousand euros).




                                                           70
7. Busi ness c ombinat ions




        On 20 June 2008 the Van de Velde group acquired all the activities of Andrés Sardá. The transac-
        tion comprises the acquisition of the Andrés Sardá brand and all the shares of Eurocorset S.A., the
        umbrella company that markets the activities of the Andrés Sardá brand.


        The total acquisition costs were 15,692 thousand euros. No equity instruments were or could be
        issued as part of the costs. The cash amount paid was 15,380 thousand euros (net of acquired cash).


        The fair value of the identifiable assets and liabilities of Eurocorset S.A. at acquisition date and the
        corresponding carrying value immediately prior to the acquisition were as follows·


                                                  Fair value recognised on acquisition          carrying value


        Intangible fixed assets                                                     11,110                  110
        Tangible fixed assets                                                         824                   824
        Other financial fixed assets                                                   59                    59


        Inventories                                                                 1,994                 4,964
        Trade and other receivables                                                 2,527                 2,727
        Cash and cash equivalents                                                     312                   312
        Other current assets                                                          265                   684


                                                                                    17,092                9,680


        Non-current borrowings                                                        708                   708


        Trade payables                                                              1,891                 1,559
        Other current liabilities                                                     534                   534
        Current borrowings                                                          3,146                 3,146
        Other current liabilities                                                   1,477                     5


                                                                                     7,757                5,954


        Net assets acquired                                                         9,335                 3,727


        Goodwill arising on acquisition                                             6,357
        Purchase price                                                             15,692




                                                          71
7. Busi ness c ombinat ions




        The purchase price breaks down as follows: (in thousands of euros)
        Cash paid to the shareholders                      14,600
        Costs associated with the acquisition               1,092
        Purchase price                                     15,692




        The cash outflow on acquisition is as follows: (in thousands of euros)
        Purchase price                                     15,692
        Net cash acquired of the subsidiary                     -312
        net cash outflow                                   15,380


        The goodwill mainly represents future synergies with the Van de Velde group, the strengthening of
        the Van de Velde group by the expansion of its brand portfolio and the know-how of employees. Euro-
        corset’s accounting policies were adapted to ensure that the consolidated financial data is prepared in
        accordance with uniform accounting policies.


        The acquisition took place at the end of June 2008. As a result, the revenues and expenses of the
        Eurocorset group have been incorporated in financial statements of the Van de Velde group as of
        1 July 2008.


        Eurocorset markets three brands: Andrés Sardá, Risk and University. The group has taken the decision
        to rationalise the brand strategy, leaving two brands: Andres Sarda remains, while Sarda (by Andres
        Sarda) replaces Risk and University. The assets connected to the other brands were measured at
        their probable realisable value at the time of acquisition. The brand with indefinite useful life was not
        checked for impairment, because it was acquired in 2008 and there were no indications that an impair-
        ment had to be recognised.


        The acquisition of Eurocorset negatively impacted the group’s result with 1,145 thousand of euros. For
        reasons of confidentiality, the group is not able to show how group profit would have been impacted
        if the acquisition had been formalised on 1 January 2008.




                                                           72
7.a . G o o dw i l l




            At 01/01/08                                                           0
            investments                                                      6,357
            At 31/12/08                                                      6,357
            impairments
            At 01/01/08                                                           0
            investments                                                           0
            At 31/12/08                                                           0
            Goodwill, net 31/12/08                                           6,357


            At 31/12/08
            Accumulated costs                                                6,357
            Accumulated impairments                                               0
            Goodwill, net 31/12/08                                           6,357


            Goodwill recognised in 2008 is completely related to the acquisition of the shares of Eurcorset S.A.
            (see point 7 Business combinations). Goodwill was not tested for impairment, as it was acquired in
            the course of 2008.




                                                            73
7.b. Av ai l abl e -for-s a l e f inanci a l ass e t s




           As part of the restructuring in 2005 the group’s stake in Top Form International decreased to about
           16%. Consequently the investment is no longer accounted for using the equity method. The shares
           have been designated as ‘available-for-sale financial assets’, which, in accordance with IAS 39, Finan-
           cial Instruments: Recognition and Measurement, are measured at fair value. Changes in the fair value
           of these assets are recognised directly in a separate component of equity until disposal of the instru-
           ment. Fair value is determined on the basis of the stock-market price.


           In the second half of 2008 the group’s share position in Top Form International was increased from
           16.37% to 23.3%. This increase was made at the market price. The shares were purchased at an
           average unit price of 0.5661 HK dollars per share. Consequently, the stake is no longer recognised as
           ‘available-for-sale financial assets’; the equity method was adopted instead.
           The accumulated changes to fair value in the amount of -18,306 thousands of euros recognised in
           equity continue to be recognised in equity until the stake is sold or until the stake included in accord-
           ance with the equity method is impaired.


           number of listed shares (31/12/2007-): 176,181,544 shares in Top Form International
           share price on the closing date:           0.89 HKD (0.077526132 euros)
           Fair value on the closing date:                       13,658,673.71 euros


           number of listed shares (30/06/2008-): 176,181,544 shares in Top Form International
           share price on the closing date:               0.55 HKD (0.044736 euros)
           Fair value at end of 30/06/2008:                           7.881.689 euros
           Purchase 74,418,000 pieces at 26/08/2008                  3,458,441 euros


           Total value transferred to financial fixed assets:        11,340,130 euros


           The share price on 31 December 2008 was 0.26 HK dollars.




                                                                74
7.c . S a le of sub s id i ar ie s




            In December 2008 the group sold all the shares of Van de Velde Marie Jo SA, resulting in the record-
            ing of a profit of 278 thousand euros, recognised as other operating income.
            The disposal of net assets in respect of this transaction amounted to 4,576 thousand of euros. They
            break down as follows:


                                              sales in 2008 (in thousands of euros)


            Net assets of Marie Jo S.A.                                      -3,827
            Impact on deferred tax                                             -749
            Sold net assets                                                  -4,576


            Sale price                                                        4,854
            Gain on sale                                                       278


            The net cash outflow on disposal is as follows:
            Cash received                                                     4,854
            Cash and cash equivalents                                        -5,444
            Net cash outflow                                                   -590




                                                              75
8 .a . Int ang ibl e ass e ts




                                                      Capitalised
                                                      charges for
                                                       internally
                                                      developed         Acquired    Computer-       Key
           intangible assets                 Total   brandnames       brandnames     software    money


           Gross assets (€000)


           At 01/01/2007                  3,085.00           381.00                  2,162.00    542.00
           investments                      567.00            42.00                    525.00
           Exchange adjustments              -5.00                                       -5.00
           Disposals                       -142.00                                               -142.00
           At 31/12/07                    3,505.00           423.00                   2.,82.00   400.00


           Depreciation and impairment


           At 01/01/2007                  1,515.00           381.00                  1,134.00      0.00
           Recognised depreciation         366.00              6.00                    360.00
           Exchange adjustments              -6.00                                       -6.00
           Disposals
           At 31/12/07                    1,875.00           387.00                  1,488.00      0.00


           Intangible assets,
           net 31/12/07                   1,630.00            36.00                  1,194.00    400.00


           Gross assets


           At 01/01/2008                  3,505.00           423.00         0.00     2,682.00    400.00
           Investments                   11,448.00            83.00     11,000.00      365.00
           Acquisition of subsidiary       109.00              2.00                       7.00   100.00
           Disposals                        -75.00                                                -75.00
           At 31/12/08                   14,987.00           508.00     11,000.00    3,054.00    425.00


           Depreciation and impairment


           At 01/01/2008                  1,875.00           387.00         0.00     1,488.00      0.00
           Recognised depreciation         472.00             20.00          0.00      447.00      5.00
           At 31/12/08                    2,347.00           407.00         0.00     1,935.00      5.00


           intangible assets,
           net 31/12/08                  12,640.00           101.00     11,000.00     1,119.00   420.00



                                                        76
8 .a . Int ang ibl e ass e ts




           Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
           knowledge and understanding, is recognised in the income statement as an expense as incurred.


           Acquired brands are connected with the Andrés Sardá brand acquired in 2008 (see point 7 Busi-
           ness combinations). The Andrés Sardá brand was deemed to be a brand with an indefinite useful life
           because the group considers this brand to be a full-fledged addition to its existing brand portfolio.


           In 2006 key moneys were tested for impairment as mentioned in our accounting policies and no
           impairment was recognised. The recoverable amount was confirmed by our notary public. There was
           no indication of impairment in 2008.


           The brand with indefinite useful life was not tested for impairment, because it was acquired in 2008
           and there were no indications that an impairment had to be recognised.




                                                              77
8 .b. Par t i c ip at ions me asu re d us ing t he e quit y me t ho d




          During 2007 Van de Velde acquired 49.90% of the shares of Intimacy at a cost of 10,742 thousand
          euros.


          In November 2008 the group took a 49.90% stake in Retail BV at a cost of 3,050 thousand euros.


          net carrying amount (€ 000)                               intimacy     retail BV       Top Form       Total


          At 01/01/2008                                        10,980                0                0       10,980
          Acquisition of participation                                0          3,050                0        3,050
          Participation through available-for-sale financial
          fixed assets (30/06/08)                                     0              0            11,339       11,004
          Results for the financial year                             -67             8              130           71
          Dividends                                                   0              0                0            0
          Conversion profit and losses                              621              0                0          621
          Excluded from consolidation                                 0              0                0            0
          At 31/12/2008                                               11,534        3,058          11,469     26,061


          The Top Form International figures in the table are from 30 June 2008. This is due to potential privi-
          leged information through the announcement of our figures and the unavailability of the figures on
          31 December.


          Core figures of participation


                                             usD (31/12/2008)              Eur (31/12/2008) HKD ‘000 (30/06/2008)
          Tangible fixed assets                       3,641,123                              0               171,627
          Other fixed assets                            309,653                              0                 12,108
          Financial fixed assets                               0                   103,823                        00
          Liquid assets                               2,613,725                   1,801,850                   647,617
          Obligations longer than one year
          and minority interests                      2,221,565                    178,571                    12,980
          Obligations due within one year             2,112,056                      12,558                  241,519
          Total net assets                            2,230,880                   1,697,793                  576,853


          Turnover                                   24,698,651                   5,987,321                 1,368,682
          Net profit                                    (75,381)                     16,749                    53,33




                                                               78
9. O t her non -c u r re nt ass e ts




          Other non-current assets consist of the following:


          € 000                                                                         2008                  2007


          Security deposits for VAT                                                       383                   211
          Other security deposits                                                         129                    62
          Borrowings                                                                    2,007                   789
          Financial instruments at fair value with value changes
          recognised through profit and loss                                            1,200
          other non-current assets, net                                                 3,719                 1,062


          The other non-current assets also relate to a security deposit paid for VAT purposes. This security is
          revised on an annual basis in relation to our imports for the year and is not interest-bearing.


          At the end of 2007 investments in collateralised debt obligations (CDOs) were recognised as cash and
          cash equivalents at the purchase price of 3,450 thousands of euros. As the collateralised debt obliga-
          tions (CDOs) do not fulfill these classification criteria anymore, they will be reclassified as other non-
          current assets. The fair value adjustment up to 1,200 (thousand) euro has been recognised through
          profit and loss.




                                                             79
10. Grant s




         Grants that compensate the company for the cost of an asset are recognised in the income state-
         ment as revenue on a systematic basis over the useful life of the asset.


         € 000                                                                      2008           2007


         At 1 January                                                                259             78
         Received during the year                                                      0            241
         Released to the income statement                                             54             56
         Exchange rate adjustments                                                    (2)             4
         At 31 December                                                              207            259
         Current                                                                     207            259




                                                          80
11. Share c apit a l




          Authorised and fully paid                                                       2008                  2007


          Nominative shares                                                          7,996,310             7,996,310
          Bearer shares                                                             5,560,400              5,560,400
          Total number of shares                                                   13,556,710             13,556,710


          At 31 December 2008 Van de Velde NV’s share capital was 1,936 thousand euros (fully paid up), rep-
          resented by 13,556,710 shares with no nominal value and all with the same rights insofar as they are
          not own shares whose rights have been suspended or destroyed. The Board of Directors of Van de
          Velde NV is authorised to increase the subscribed capital by one or more times 1,926,406.25 euros
          under the conditions stated in the articles of association. This authorisation is valid for five years after
          the announcement in the annexes to the Belgisch Staatsblad/Moniteur belge (22 May 2008).


          Distribution of retained earnings of Van de Velde NV, the parent company, is limited to a legal reserve,
          which was built up in previous years in accordance with Belgium’s Companies Code, up to 10% of the
          subscribed capital.


          own shares
          In accordance with Article 620 of the Companies Code, the General Meetings of 25 May 2005 and 25
          April 2007 gave the Board of Directors the power to acquire own shares of the company.


          In light of this, the Board of Directors took the decision in 2007 to acquire own shares of the company
          by means of a discretionary assignment. These shares are to be offered to the members of the Man-
          agement Committee and selected employees as part of an option plan.


          In 2008, the Board of Directors acquired 2,484 shares at an average price of 33.33 euros and 32,500
          shares at an average price of 28.15 euros and 269,230 shares at an average price of 25.20 euros.


                 ,
          In 2007 the Board of Directors acquired 17,516 shares at an average price of 33.79 euros and 10,000
          shares at an average price of 34.93 euros. In 2006 Van de Velde did not hold any own shares.


          Van de Velde accordingly held 331,730 own shares at 31 December 2008 (2.45% of the total number
          of shares). This represents a value of 8,718,000 euros.


          € 000                                                                           2008                  2007


          Share capital                                                                  1,936                 1,936
          Own shares of the company                                                      -8,718                  -936
          Share premium                                                                     743                   743




                                                              81
12 . Prov is ions




                                                  Distributors         Provision
          Provisions € 000                               claim         for agents       sundry            Total


          At 01/01/2007                                      14             1,315             29          1,358
          Arising during the year                                           +440                            440
          Utilised                                                           -390            -29           -419
          Provisions 31/12/2007                             14              1,365              0          1,379


          At 01/01/2008                                      14             1,365              0          1,379
          Arising during the year                           -14               141              0            127
          Utilised                                                           -632                          -632
          Provisions 31/12/2008                                 0             874              0            874


          Non-current 2008                                      0             874              0            874


          Non-current 2007                                  14              1,365              0          1,379


          In accordance with IFRS, in 2007 a provision of 1,365,000 euros was recognised in relation to the ter-
          mination fee for our sales agents. 632,000 euros of this was used during 2008. An additional termina-
          tion fee of 141,000 euros was recognised during 2008. The expected timetable of the corresponding
          cash outflow depends on the progress and duration of the negotiations with the sales agents.




                                                           82
13 . D efer re d t a x l i abi l it ie s /ass e t s




            Deferred tax liability (€ 000)                                                                  2.151


            The deferred tax liability consists of the following:


                                                                         revaluations
                                                                                ppe +
                                                         financial      capitalisation
                                        captive      instruments        of ict projects       sundry         total


            € 000
            At 01/01/2007                1,322                 -12               1,219                      2,529
            Investments                       17                24                -108                        -67
            At 31/12/07                  1,339                  12               1,111                      2,462


            Total at 31/12/07                                                                               2,462
            At 01/01/2008                1,339                  12               1,111              0       2,462


            Investments                      -749              439                 -30             29        -311
            At 31/12/2008                    590               451               1,081             29       2,151


            Total at 31/12/08                                                                               2,151


            Captive: at sale the buyer agreed to deposit security of 590 thousand euros on an escrow account. A
            parallel provision of 590 thousand euros was recognised in this amount.


            Financial instruments: future contracts are recognised at market value on the closing date every year.
            Deferred tax is recognised on profit.


            PPE revaluations: the depreciable amount of an item of property, plant and equipment should be
            allocated on a systematic basis over its useful life. In the statutory financial statements we use the
            double declining depreciation method, which is restated. The deferred taxes were valued at the effec-
            tive tax rate of 33.99%.


            The group has not recognised deferred taxes with regard to undistributed profits of its subsidiaries
            because it is not considered probable that the temporary differences will be settled in the foresee-
            able future. The tax impact of dividends received from subsidiaries is limited because of the special
            Belgian tax regime (DBI).




                                                                83
1 4.a . Tra de and ot he r p ay abl e s




            The accounts payable consist of the following:


            € 000                                                                   2008                2007


            Trade payables                                                      6,047.00            3,667.00
            Payroll, social charges                                             4,719.00            3,225.00
            Accrued charges                                                       391.00             1.241.00
            Sundry                                                                355.00              821.00
            Short-term borrowings                                                 124.00
            Trade and other payables                                           11,636.00            8,954.00




1 4.b. O t he r c u r re nt l i abi l it ie s




            € 000                                                                   2008                2007


            Taxes (VAT payable, local taxes, withholding taxes)                      867                 718
            other current liabilities, net                                           867                 718


            Other tax obligations are corporate income tax in the amount of 611 thousand euros on 31 December
            2008 (91 thousand euros for 2007).




                                                              84
15 . Fi nanci a l inst r u me nts




          The company uses derivative financial instruments to reduce exposure to market risks ensuing from
          currency exchange fluctuations.


          management of foreign exchange risk
          The company uses forward contracts to manage the currency risk. These have a maturity date
          between 15/01/2009 and 15/12/2009 (maturities on 31 December 2007: between 15/01/2008 and
          15/12/2008). As these contracts do not meet the hedging criteria of IAS 39, they are treated as trading
          contracts and are valued at fair value through profit or loss.


          The carrying amount of these forward currency contracts at 31 December was:


          € 000                                                                       2008                 2007


          Positive values                                                           1,508.4                    0
          Negative values                                                            -214.9                  -7.4




                                                              85
16. Fi nanci a l re su lt




          The financial result breaks down as follows:


          € 000                                                                   2008                  2007


          Interest income                                                     1,201.00            1,426.00
          Interest costs                                                       -108.00             -213.00
          interest expenses, net                                              1,093.00            1,213.00


          Exchange gains                                                      4,722.00            1,975.00
          Exchange losses                                                     -3,507.00          -1,780.00
          Exchange, net                                                       1,215.00              195.00


          Impairment of CDOs                                                 -2,250.00
          Income from investments                                               215.00              878.00
          Other financial costs                                                -219.00              -147.00
          Financial result                                                       54.00            2,139.00


          The drop in the financial result is a consequence of an impairment of CDOs recognised in 2008. An
          impairment of 2,250 (thousand) euros was recognised on an amount of 3,450 (thousand) euros.




                                                         86
1 7. Pers on nel e x p e ns e s




           Personnel expenses are as follows:


           € 000                                                                       2008              2007


           Wages                                                                   10,383.00          9,192.00
           Salaries                                                                10,490.00          9,275.00
           Social security contributions                                            5,190.00          4,631.00
           Other personnel expenses                                                 1,281.00            937.00
           Personnel expenses                                                      27,344.00         24,035.00


           Average workforce                                                           2008              2007
                                                                                        FTE                FTE


           Office workers                                                               294                254
           Manual workers                                                             1,355              1,276
           Total                                                                      1,649              1,530


           At the moment the group only has pension plans of the defined contribution type. The cost of this in
           2008 was 342 thousand euros. (289 thousand euros in 2007). There remains a provision of 35 thou-
           sand euros (36 thousand euros in 2007) of the ‘defined-benefit’ type.


           option plan
           The group will apply IFRS 2 Share-based Payment as from 2008. The fair value of the share part of
           the options on the award date was included for the period until the beneficiary acquires the option
           unconditionally in accordance with the gradual acquisition method. This is the first time IFRS 2 has
           been applied. 212 thousand euros were included under retained earnings in the reserves.


           The following assumptions were applied to establish the weighted average fair value of the stock
           options at grant date:




                                                            87
1 7. Pers on nel e x p e ns e s




                                                      PLAn          PLAn          PLAn            PLAn
                                                       2005          2006          2007            2008


           Price-setting model for option      Black Scholes Black Scholes Black Scholes   Black Scholes
           Grant date                              1/11/2005     1/11/2006   21/10/2007      13/10/2008
           Dividend right as of grant date                  no         no            no              no
           Contractual life of the options                  5            5            5            5-10
           Exercise price                            28.338            34         35.93           23.89
           Expected volatility                      38.60%         38.60%       38.60%          38.60%
           Risk-free interest rate             OLO 10 years OLO 10 years OLO 10 years      OLO 10 years
           Fair value of the options                    6.66          5.46          5.43           11.26


           The share option plan has developed as follows        option plan 2005 - 2009


           outstanding at 01/01/2007                                             52,500
           Exercisable at 01/01/2007                                                  0
           movements during the year
           Granted                                                               10,000
           outstanding at 31/12/2007                                             62,500
           Exercisable at 31/12/2007                                                  0
           movements during the year
           Granted                                                               35,000
           outstanding at 31/12/2008                                              97,500
           Exercisable at 31/12/2008                                                  0




                                                       88
18 . Inc ome t a xe s




          € 000                                                                2008        2007


          Profit from operating activities before income tax               40,460.00   43,794.00


          At headquarters, statutory tax rate of 33.99%                    13,752.00   14,886.00
          Higher income tax rates in other countries                           21.00       14.00
          Lower income tax rates in other countries                        -1,269.00   -1,721.00
          Expenditure not allowable for income tax purposes                  162.00      165.00
          Notional deduction of interest                                     -749.00     -294.00
          Other                                                              -153.00     -151.00
          Tax effect on dividend and interim liquidation of Guliano           -72.00      167.00
          Total income taxes                                               11,692.00   13,066.00


          € 000                                                                2008        2007


          Current income tax:                                              12,004.00   13,133.00
          Current income tax charge                                        12,035.00   13,118.00
          Adjustments in respect of current income tax of previous years      -31.00       15.00
          Deferred income tax:                                               -312.00      -67.00
          Relating to origination and reversal of temporary differences      -312.00      -67.00
          income tax expense reported in the consolidated
          income statement                                                 11,692.00   13,066.00




                                                               89
19. a . R el ate d p ar t y d is cl o su re s




      The consolidated financial statements include the financial statements of Van de Velde and the subsidiaries listed in
      the following table.


      name                                                                    (%) equity interest           Change since
      Full consolidation                    Address                                          2008           previous year


      VAN DE VELDE N.V.                     Lageweg 4                            Parent company
                                            9260 SCHELLEBELLE
                                            BTW 448.746.744


      VAN DE VELDE FRANCE S.A.R.L.          16, Place du General De Gaulle                    100                        0
                                            59800 LILLE, France


      VAN DE VELDE GMBH & Co. KG            Anton-Kux-Str. 2                                  100                        0
                                            41460 NEUSS, Germany


      VAN DE VELDE GEBROEDERS               Anton-Kux-Str. 2                                  100                        0
      VERWALTUNGS Gmbh                      41460 NEUSS, Germany


      VAN DE VELDE TERMELO                  Selyem U.4                                        100                        0
      ES KERESKEDELMI Kft                   7100 SZEKSZARD, Hungary


      VAN DE VELDE UK LTD                   Mitre House Aldersgate Street 160                 100                        0
                                            EC1A4DD LONDEN
                                            United Kingdom


      VAN DE VELDE MODE BV                  Dr. Hub Van Doorneweg 153                         100                        0
                                            5026 RC TILBURG, Netherlands


      MARIE JO SARL                         16, Place du General De Gaulle                    100                        0
                                            59800 LILLE, France


      MARIE JO GMBH                         Anton-Kux-Str. 2                                  100                        0
                                            41460 NEUSS, Germany


      GULIANO HK LIMITED                    193, Prince Edward Road West                      100                        0
                                            KOWLOON, Hongkong




                                                               90
19. a . R el ate d p ar t y d is cl o su re s




      VAN DE VELDE ITALY SRL           Via San Vito 7                100     0
                                       20123 MILANO, Italy


      VAN DE VELDE IBERICA SL          Rd. General Mitre 28          100     0
                                       08017 BARCELONA, Spain


      VAN DE VELDE CONFECTION          Route De Sousse BP 25         100     0
                          SARL         4020 KONDAR, Tunisia


      VAN DE VELDE FINLAND OY          Töölönkatu 30A
                                       00260 HELSINKI, Finland       100     0


      VAN DE VELDE NORTH AMERICA       180 Madison Avenue            100     0
                                 INC   NEW YORK, NY 10016
                                       USA


      VAN DE VELDE DENMARK APS         Lejrvejen 8                   100     0
                                       6330 PADBORG, Denmark


      VAN DE VELDE RETAIL INC          180 Madison Avenue            100     0
                                       NEW YORK, NY 10016
                                       USA


      EUROCORSET, S.A.                 Santa Eulalia, 5-7-9          100   100
                                       08012 BARCELONA, Spain


      VAN DE VELDE TUNESIE SARL        Route de Sousse BP 25          0    -100
                                       4020 KONDAR, Tunisia


      VAN DE VELDE MARIE JO SA         19 rue de Bitbourg, BP 593     0    -100
                                       2015 LUxEMBOURG, Luxembourg


      GULIANO PTE LTD                  Robinson Road 1                0    -100
                                       048642 SINGAPORE, Singapore


      SU DISTRIBUIDORA SUL TU          Santa Eulalia, 5-7-9          100   100
      CORPO, S.L.                      08012 BARCELONA, Spain




                                                              91
19. a . R el ate d p ar t y d is cl o su re s




            Services are provided between group companies at commercial conditions and market rates.


            Companies to which the equity method is applied
            The equity method is applied to the following companies:


            Equity method


            INTIMACY MANAGEMENT                      3980 Dekalb Technology Parkway 760         49.9%           0
            COMPANY LLC                              GA 30340 ATLANTA, USA


            TOP FORM INTERNATIONAL                   Room 1813, 18 th floor, Tower 1            23.3%      6.93%
            Limited                                  Grand Century Place
                                                     193 Prince Edward Road West
                                                     HONG KONG


            RETAIL BV                                Netherlands                                49.9%      49.9%


            Retail BV
            The group acquired a 49.9% stake in Retail BV in November 2008. This takes effect on 1 January
            2008. The group has had no notable transactions with Retail BV since then.


            Top Form International
            The group upped its stake in Top Form international in August 2008 (note 7b). This stake is recognised
            in accordance with the equity method.


            In 2008 transactions between the group and TFI totalled 5,690,000 US dollars. On 31 December 2008
            the group had trade debts payable to TFI in the amount of 229,000 US dollars.


            Intimacy
            The group has a 49.9% stake in Intimacy.


            In 2008 transactions between the group and Intimacy totalled 3,180,000 US dollars. At 31 December
            2008 the group had trade receivables payable by Intimacy in the amount of 73,000 US dollars and
            non-current loans of 2,196,000 US dollars.


            Relationships with shareholders
            44.70% of the shares of Van de Velde NV is held by the general public. These shares are traded on
            Euronext Brussels. The remainder of the shares is held by Van de Velde Holding NV, which groups the
            interests of the Laureys and Van de Velde families.




                                                              92
19. b. R emu ne r at ion of ke y manage me nt and Dire c tors




         1. Management committee (including CEO)
         The total gross remuneration (including remunerations received from other companies that form part
         of the group and remunerations received for other tasks and/or tenures) awarded to the members of
         the Management Committee (including the CEO and Herman Van de Velde NV, who work on a self-
         employed basis) in 2008 is:


         – Fixed part: 1,442,022.91 euros
         – Variable part: 315,129 euros
         – Share options: 30,000 pieces


         The members of the Management Committee who are also employees also have use of a company
         car, the total value of which for 2008 is estimated at 10,184.56 euros. Furthermore, they are the ben-
         eficiaries of a collective insurance policy, the total value of which for 2008 is estimated at 17,205.87
         euros.


         2. Non-executive directors (not including the Independent Directors)
         For her duties as a director Bénédicte Laureys received a fixed gross annual remuneration of 12,000
         euros.
         For his chairmanship of the Board of Directors, his membership of the Appointments and Remunera-
         tions Committee, the Strategic Committee and the Audit Committee Lucas Laureys NV received a
         fixed gross annual remuneration of 101,000 euros. For his duties as a director of foreign subsidiaries,
         Mr Laureys received a total gross annual remuneration of 61,200 euros.


         3. Independent Directors
         All independent directors receive a fixed annual payment of 12,000 euros for their duties as a director
         and 3,000 euros for their duties as a member of the Audit Committee.


         4. Members of the Management Committee that are members of the Board of Directors
         Besides the CEO, Herman Van de Velde NV, always represented by Herman Van de Velde, is a member
         of the Board of Directors. They do not receive any remuneration for their membership of the Board
         of Directors.




                                                           93
2 0. E ar n i ng s p e r share




           Basic earnings per share are calculated by dividing the net profit for the year attributable to ordinary
           shareholders by the weighted average number of ordinary shares outstanding during the year.
           Diluted earnings per share are calculated by dividing the net profit attributable to ordinary sharehold-
           ers by the weighted average number of ordinary shares outstanding during the year adjusted by the
           effects of dilutive options.


                                                                                                             2007


           Weighted average number of ordinary shareholders for basic earnings per share:              13,556,710
           Adjusted weighted average number of ordinary shares                                         13,556,710


           Net income:                                                                                     30,983


           Earnings per share:                                                                                2.29


           Diluted earnings per share:                                                                        2.29


                                                                                                             2008


           Weighted average number of ordinary shareholders for basic earnings per share:              13,456,124
           Adjusted weighted average number of ordinary shares                                         13,456,999


           Net income:                                                                                     28,627


           Earnings per share:                                                                                2.13


           Diluted earnings per share:                                                                        2.13




                                                             94
2 1. D iv i d e nds p aid and prop o s e d




          € 000                                                                        2008     2007


          Dividend paid                                                               12,207   24,381


          Final dividend (0.9 euros per share in 2008, 1.8 euros per share in 2007)


          Dividend proposed                                                           11,902   12,201


          Final dividend (0.9 euros per share in 2008, 0.9 euros per share in 2007)




                                                            95
2 2 . S eg me nt in for mat ion




          A segment is a clearly distinguishable component of the company that is engaged in providing prod-
          ucts or services within a particular economic environment (geographical segment), which is subject
          to risks and rewards that are different from those of other segments. The company is a single product
          business, which is why its chosen segment reporting format is geographical. Segmenting the differ-
          ent brands is not part of the internal reported financial information and is not feasible, especially while
          the same installations are used to produce the different brands. The company has concluded that it
          operates in a single reporting business segment, i.e. the production and sale of luxury lingerie. The
          distribution activity is of minor importance today and not to be considered as a separate business seg-
          ment in coming years (revenues of external customers less than 10%). The company will report based
          on the geographical location of customers divided into eurozone and elsewhere. As it has decided to
          work with a geographical segment as primary format, the company shows the external revenues by
          geographical customers taking into account the 10% limit.


          Segmentation format
          Primary segmentation basis: geographical segment by customer
          Additional provision of information: external revenue by country (10% limit)
          Business segment: one business segment
          segment information


          The following tables present revenue and profit information and certain assets and liability information
          regarding geographical segments for the years ended 31/12/2007 and 31/12/2008.




                                                              96
2 2 . S eg me nt in for mat ion




GEOGRAPHICAL SEGMENT
((by customer location)
€ 000                                  2008             2008         2008         2007         2007        2007
                                  Eurozone      Elsewhere            Total    Eurozone    Elsewhere        Total


segment income statement
Segment revenues                  101,819.00        31,210.00   133,029.00    98,675.00    31,661.00 130,336.00
Sales between segments
Total revenue                     101,819.00        31,210.00 133,029.00      98,675.00   31,661.00 130,336.00
Results by segment                46,966.00         11,012.00    57,978.00    39,946.00   13,222.00    53,168.00
Unallocated results                                              -17,784.00                           -11,514.00
Non-recurrent items                                                   0.00                                  0.00


Net finance profit                                                   54.00                              2,140.00
Income from associates                                               71.00                               255.00
Income taxes                                                    -11,692.00                            -13,066.00
net income                                                       28,627.00                            30,983.00


segment balance sheet
Segment assets                     56,178.39        18,071.61    74,250.00    43,849,42   14,493.58    58,343.00
Unallocated assets                                               63,017.00                             72,683.00
Consolidated total assets         56,178.39         18,071.61   137,267.00    43,849.42   14,493.58    131,026.0


Segment liabilities                 8,415.71         2,790.29    11,206.00     6,778.18    2,175.82     8,954.00
Unallocated liabilities                                         126,061.00                            122,072.00
Consolidated total liabilities      8,415.71         2,790.29   137,267.00     6,778.18    2,175.82 131,026.00


other segment information
Capital expenditure:
  Tangible fixed assets             1,456.94          483.06      1,940.00     1,540.50      494.51     2,035.00
  Intangible fixed assets           8,597.45         2,850.30    11,447.75       397.43      127.58      525.00
Depreciations                       2,392.69          793.31      3,186.00     2,211.20      709.80     2,921.00
Impairment losses




                                               97
2 2 . S eg me nt in for mat ion




          sales to external customers € 000          2008      2007


          BE                                        31,973    31,940
          DE                                        23,876    24,447
          FR                                        13,981    14,607
          NL                                        17,169    16,978
          Other                                     46,030    42,364
          Total                                    133,029   130,336




                                              98
2 3 . Event s af te r t he b a l anc e she e t d ate




           restructuring in Hungary
           As part of the restructuring of its production facilities, on 13 February 2009 Van de Velde took the deci-
           sion to close its Hungarian facility in Szekszard, Van de Velde Termelo Es Kereskedelmi Kft. 345 people
           are employed at the site. Naturally, Van de Velde will strictly follow all legal procedures. In the event of
           closure Van de Velde will negotiate a fair redundancy package with the workforce. A small number of
           employees may be transferred to other group production facilities in Belgium, Spain or Tunisia.


           The restructuring was announced in January 2009, so the decision has no impact on either balance
           sheet or the income statement for the year ending 31 December 2008. The group is unable to reliably
           estimate the expected restructuring costs, because several options are being examined. The book
           value of the property, plant and equipment corresponds to at least the estimated realisable value.
           Consequently, no losses were included on the balance sheet date.


           Destruction of shares
           On 12 February 2009 the Board of Directors took the decision to propose the cancellation of 234,230
           own shares to the General Meeting of 29 April 2009.




                                                               99
2 4. Busi ne ss r isk s w it h re sp e c t to IFRS 7




          Besides the general strategic risks that are described in detail in the activity report, Van de Velde has
          identified the following risks with respect to IFRS 7:


          sensitivity to fluctuations in exchange rates
          Costs in US dollars are covered in full by revenues in US dollars. Costs in Swiss francs are covered in
          full by long-term exchange rate contracts concluded when the cost price of products is calculated. Van
          de Velde-owned production plants in Tunisia and Hungary make payments in the local currency. The
          euros we receive are covered in part by long-term exchange rate contracts. Other costs are in euros.


          20% of turnover is generated in foreign currency. In addition to US dollars and Danish kroner, which
          does not entail an exchange rate risk, 12% of turnover is invoiced in UK sterling, Swedish kronor, Nor-
          wegian kroner and Canadian dollars. These currencies are covered in part by long-term exchange rate
          contracts when the selling price of products for the following season is calculated.


          Converted to the price on the closing date the contract prices produced an exchange rate profit of
          1.3 million euros. The conversion of accounts receivables, debts and liquidities in foreign currency
          produced an exchange rate loss of 0.8 million euros.


          sensitivity to fluctuations in prices
          New products account for 70% of turnover. Material costs are taken into account when setting the
          selling price. Fluctuations in raw materials prices are also limited for stayer products, as there is also
          great added value for the material supplier. As a result, any fluctuations in the prices of synthetic fab-
          rics as a whole have a rather limited impact.


          Price sensitivity in the premium segment is lower than in the volume market.


          Independent retailers, which are Van de Velde’s core customers, are experiencing difficulties due to
          the integrated formula stores, which overwhelm consumers with cheap products of mediocre qual-
          ity.


          sensitivity to credit risks
          There are almost no long-term debts.


          In addition to 23.7 million euros in liquidities, 30 million euros are also available in the form of lines of
          credit.


          The liquidities are invested risk-free.




                                                              100
2 4. Busi ne ss r isk s w it h re sp e c t to IFRS 7




          sensitivities to write-downs on investments
          3.45 million euros are invested in CDOs (collateralised debt obligations). They were valued at the
          market value stated by the bank at 31 December and are now recognised in the balance sheet under
          other fixed assets rather than liquidities. Based on this market value, the CDOs are recognised at a
          value of 1.2 million euros.


          The bank has conducted two risk estimates for these CDOs. In the worst scenario there is a prob-
          ability that one of the CDOs cannot be repaid on the maturity date. This could result in a loss of 1.45
          million euros on the scheduled maturity date of July 2015. In the most probable scenario it will be
          possible to repay the two CDOs on the maturity date and pay out all interest coupons.


          The maturity date of the CDO in the amount of 2 million euros is July 2013.


          sensitivities to interruptions in the supply chain
          Business risk as a consequence of an interruption is covered by insurance. At the same time, ade-
          quate preventive measures have been taken in consultation with insurers to minimise this risk.


          A disaster recovery plan has been drawn up to limit the risk of damage pursuant to the loss of the
          computer infrastructure. The risks of an interruption to deliveries by a supplier and the possible alter-
          natives are identified and regularly monitored.


          The creditworthiness of suppliers is also monitored. The ten leading material suppliers account for
          more than 60% of purchase costs. The number one supplier accounts for a quarter of purchase costs.
          All other suppliers account for less than 10%.


          Assembly capacity is spread over different sites in Tunisia, Hungary, Romania and China.


          The warehouse for finished products and the distribution centre are located away from the raw mate-
          rials stores and the main office. Both sites are regularly inspected by the fire insurer.


          sensitivities to overvalued stocks
          End articles whose sales are falling are partly written down at the end of the season or during the fol-
          lowing season. These end articles are written off completely one year later. If there is no longer a need
          for additional production the relevant raw materials are written off completely.




                                                             101
2 4. Busi ne ss r isk s w it h re sp e c t to IFRS 7




          sensitivities to loss and insolvency of customers
          Turnover is generated through around 5,500 independent retailers and a small number of luxury
          department stores. No one customer accounts for more than 2.5% of turnover. The insolvency risk
          is also covered by the credit insurance. Trade receivables are written down as soon as the part not
          covered by the credit insurer is passed on to a collection agency.


          Product risk
          Turnover is spread over 20,000 stock references, 9,000 of which are changed every year. Turnover
          does not depend on the success of any one model.




                                                           102
5. Management report




      The undersigned declare that, to the best of their knowledge:
      – The financial statements in this report, which have been prepared in compliance with the applica-
         ble standards, faithfully reflect the equity, the financial situation and the results of Van de Velde and
         the companies included in the consolidation.
      – The annual report gives a faithful picture of the major events and the important transactions with
         associated parties, that occurred in the year under review and the impact on the development,
         the results and the position of Van de Velde and the companies included in the consolidation, and
         contains a description of the main risks and uncertainties faced by Van de Velde.


               ,
      EBVBA 4 F always represented by                            Luc Markey
      Ignace Van Doorselaere                                     CFO
      Chairman of the Board




                                                          103
6. Statutory auditor’s report to the general meeting of
   shareholders of VAN DE VELDE nv on the consolidated
   financial statements for the year ended DECEMBER 31,
   2008




      In accordance with the legal requirements, we report to you on the performance of our mandate of
      statutory auditor. This report contains our opinion on the consolidated financial statements as well as
      the required additional comments.


      unqualified opinion on the consolidated financial statements
      We have audited the consolidated financial statements of Van de Velde NV and its subsidiaries (col-
      lectively referred to as ‘the Group’) for the year ended December 31, 2008, prepared in accordance
      with International Financial Reporting Standards (IFRS) as adopted by the European Union, and with
      the legal and regulatory requirements applicable in Belgium. These consolidated financial statements
      comprise the consolidated balance sheet as at December 31, 2008, and the consolidated statements
      of income, changes in equity and cash flows for the year then ended, as well as the summary of sig-
      nificant accounting policies and other explanatory notes. The consolidated balance sheet shows total
      assets of € 137.267 thousands and the consolidated statement of income shows a profit for the year,
      share of the Group, of € 28.627 thousands.


      Responsibility of the board of directors for the preparation and fair presentation of the
      consolidated financial statements
      The board of directors is responsible for the preparation and fair presentation of the consolidated
      financial statements. This responsibility includes: designing, implementing and maintaining internal
      control relevant to the preparation and fair presentation of consolidated financial statements that are
      free from material misstatement, whether due to fraud or error; selecting and applying appropriate
      accounting policies; and making accounting estimates that are reasonable in the circumstances.


      Responsibility of the statutory auditor
      Our responsibility is to express an opinion on these consolidated financial statements based on our
      audit. We conducted our audit in accordance with the legal requirements and the auditing stand-
      ards applicable in Belgium, as issued by the Institute of Registered Auditors (Institut des Réviseurs
      d’Entreprises/Instituut van de Bedrijfsrevisoren). Those standards require that we plan and perform
      the audit to obtain reasonable assurance whether the financial statements are free from material
      misstatement.


      In accordance with these standards, we have performed procedures to obtain audit evidence about
      the amounts and disclosures in the consolidated financial statements. The procedures selected
      depend on our judgment, including the assessment of the risks of material misstatement of the
      consolidated financial statements, whether due to fraud or error. In making those risk assessments,
      we have considered internal control relevant to the Group’s preparation and fair presentation of the
      consolidated financial statements in order to design audit procedures that are appropriate in the cir-
      cumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s
      internal control. We have evaluated the appropriateness of accounting policies used, the reasonable-




                                                       106
ness of significant accounting estimates made by the Group and the presentation of the consolidated
financial statements, taken as a whole. Finally, we have obtained from the board of directors and the
Group’s officials the explanations and information necessary for executing our audit procedures. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.


Opinion
In our opinion, the consolidated financial statements for the year ended December 31, 2008 give a
true and fair view of the Group’s financial position as at December 31, 2008 and of the results of its
operations and its cash flows in accordance with IFRS as adopted by the European Union, and with
the legal and regulatory requirements applicable in Belgium.


Additional comments
The preparation and the assessment of the information that should be included in the directors’ report
on the consolidated financial statements are the responsibility of the board of directors.


Our responsibility is to include in our report the following additional comments, which do not modify
the scope of our opinion on the consolidated financial statements:


– The directors’ report on the consolidated financial statements deals with the information required
   by law and is consistent with the consolidated financial statements. We are, however, unable to
   comment on the description of the principal risks and uncertainties which the entities included in
   the consolidation are facing, and on their financial situation, their foreseeable evolution or the sig-
   nificant influence of certain facts on their future development. We can nevertheless confirm that
   the matters disclosed do not present any obvious inconsistencies with the information that we
   became aware of during the performance of our mandate.


                                                                                 Gent, 16 February 2009


                                                         Ernst & Young Reviseurs d’Entreprises SCCRL
                                                                                        Statutory auditor
                                                                                         Represented by
                                                                                           Jan De Luyck
                                                                                                  Partner




                                                   107
Concise version of the statutory financial statements of
                   Van de Velde nV
7. Concise version of the statutory financial statements
   Van de Velde NV

C onc is e b a l anc e she e t of Van de Vel de n V
The statutory financial statements of the parent company Van de Velde NV are provided in concise form in accordance with article 105
of the Companies Code.
The annual report and the financial statements of Van de Velde NV and the report of the statutory auditor have been deposited at the
National Bank of Belgium. A free copy of the full text is available from the registered office.
The statutory auditor has given a declaration of approval without reserve with regard to the statutory financial statements of Van de
Velde NV.



                  (€ 000)                                                                          31-12-08               31-12-07


                  Fixed assets                                                                       59,499                  69,813
                  Intangible fixed assets                                                            12,534                     991
                  Tangible fixed assets                                                               8,377                   8,833
                  Financial fixed assets                                                             38,588                  59,989


                  Liquid assets                                                                      69,967                  74,328
                  Amounts receivable after one year                                                   2,349                   2,579
                  Stocks and orders in production                                                    25,445                  23,691
                  Amounts receivable within one year                                                 13,427                  14,860
                  Financial investments                                                              20,283                  23,303
                  Cash at banks and in hand                                                           6,948                   8,493
                  Accrued income and deferred charges                                                 1,515                   1,402


                  Total assets                                                                      129,466                144,141


                  shareholders’ equity                                                              102,038                  95,622
                  Capital                                                                             1,936                   1,936
                  Share premium                                                                          743                     743
                  Reserves                                                                           99,359                  92,943
                  Capital subsidies                                                                        0                       0


                  Provisions, deferred taxes and Tax liabilities                                         874                  1,379
                  Provisions for risks and costs                                                         874                  1,379
                  Deferred taxes and tax liabilities                                                       0                       0


                  Debts                                                                              26,554                  47,140
                  Amounts payable after one year                                                           0                 22,905
                  Amounts payable within one year                                                    25,642                  23,498
                  Accrued income and deferred charges                                                    912                    737


                  Total liabilities                                                                 129,466                144,141




                                                                         112
C onc is e b a l anc e she e t of Van de Vel de n V




         (€ 000)                                                 31-12-08   31-12-07


         operating income                                        133,915    133,352
         Turnover                                                130,407    131,608
         Changes in stocks unfinished goods and finished goods     1,595          -6
         Other operating income                                     1,913     1,750


         operating costs                                          98,316     94,935
         Goods for resale, raw materials and consumables          32,831     32,939
         Services and other goods                                 46,793     43,789
         Salaries, social charges and pensions                    16,648      15,376
         Depreciations                                             2,242      1,966
         Write-downs and provisions                                 - 361       719
         Other operating costs                                       163        146


         operating profit                                         35,599     38,418
         Financial result                                          2,421      2,783
         Financial income                                         10,296       7,021
         Financial costs                                           -7,875     -4,238


         Profits on ordinary activities before tax                38,020     41,200
         Exceptional result                                       - 9,050     5,605
         Exceptional income                                        3,840      5,918
         Exceptional costs                                        -12,890       -313


         Pre-tax profit for the financial year                    28,970     46,805
         Tax                                                     - 10,652    -12,613
         Withdrawal from deferred taxes                                0          1
         Tax on the profit                                       - 10,652    -12,612


         Profit for the financial year                            18,318     34,193




                                                       113
C a lc u l at i on of Prof it of Van de Vel de n V




          (€ 000)                                             31-12-08   31-12-07


          Distributable profit                                 18,318     34,193
          Distributable profit for the financial year          18,318     34,193


          Profit or loss to be allocated                        6,415     21,992
          To the legal reserve                                      0          0
          To the other reserves                                  6,415    21,992


          Profit to be distributed                              11,903    12,201




                                                        114
Va lu at i on r u l e s for t he st atutor y f inanci a l st atements
as of 3 1 D e c e mb e r 2 0 0 8




          1.1 Formation expenses
          Formation expenses are immediately charged to the result.


          2.2 Intangible fixed assets
          The intangible fixed assets are recognised at actual cost and depreciated on a straight-line basis at
          20%.


          2.3 Tangible fixed assets
          All tangible fixed assets are valued at actual cost, incl. additional costs, minus depreciations.
          All depreciations except for vehicles are calculated using the double declining method. The first year
          investments are immediately depreciated for a full year.


          Industrial buildings                                            5%
          Commercial buildings                                        3.03 %
          Insulation of buildings                                        10%
          Sewing machines                                              12.5%
          Electronic installations, machines & equipment                 20%
          Other installations/plants, machines & equipment               10%
          Electronic office equipment                                    20%
          Other office equipment                                         10%
          Vehicles                                                       20%


          2.4 Financial fixed assets
          The participating interest is valued at actual cost or investment value in accordance with the historic
          exchange rate.
          An impairment is recognised if a sustained loss of value is established, justified by circumstances,
          profitability or prospects (Art. 66 § 2 Royal Decree of 30 January 2001). Impairments must not be
          employed if they are higher at the end of the financial year than stipulated in accordance with the cur-
          rent assessment (Art. 49 Royal Decree of 30 January 2001).
          Increases or reductions in value of subsidiaries are recognised in accordance with the equity method,
          if the activity is not closely integrated with the activity of the company that holds joint control.
          Amounts receivable and guaranties are recognised at nominal value.




                                                              115
Va lu at i on r u l e s for t he st atutor y f inanci a l st atements
as of 3 1 D e c e mb e r 2 0 0 8




          2.5 Inventories
          Raw materials and other materials are valued at actual cost, calculated according to the standard price
          method.
          Manufactured products (unfinished and finished products) are valued at production price, which also
          includes indirect production costs.
          Additional depreciations are applied to take the development in the market value of the stock into
          account.


          2.6 Amounts payable after one year and within one year, financial investments and liquid
              assets
          Amounts payable after one year and within one year, and financial investments and liquid assets are
          valued at nominal value. Amounts payable, financial investments and liquid assets in foreign curren-
          cies are valued at the closing exchange rate on the last working day of the financial year, as published
          by the European Central Bank. Negative conversion differences are included in the financial costs.
          Positive conversion differences are recognised under accrued income and deferred charges in liabili-
          ties.
          Depreciations are applied to amounts payable if their payment on the due date is uncertain.


          2.7 Capital subsidies and deferred taxes
          Capital subsidies are valued at nominal value after deducting deferred taxes.
          They are gradually recognised in other financial income via transfers. As depreciation is recognised
          more quickly than in the financial statement of the subsidiaries, a tax asset arises, which is not
          expressed.


          2.8 Provisions for risks and costs
          All provisions for risks and costs are valued at nominal value. They are only employed if they are
          required according to a current estimate of the risks and costs for which they were provided.


          2.9 Debts
          Debts are valued at nominal value on the balance date.




                                                            116
St atutor y f inanc i a l st ate me nt s of Van de Vel de n V
Fi nanc i a l ye ar 1 / 1 /2 0 0 8 – 3 1 /1 2 /2 008




         1. Comments on the financial statements:
         The financial statements show a balance sheet total of 129,466 thousand euros and a profit after tax
         for the financial year of 18,318 thousand euros.


         2. important events after year’s end
         There were no important events after year’s end


         3. Expected developments
         The turnover indicators for 2009 currently tend towards slightly negative to stable, but Van de Velde
         strives to maintain stable turnover for 2009 (excluding Sardá) versus 2008.


         4. research and development
         The very active strategy for launching the new styles was continued,
         which led to the strengthening of the design team.


         5. Additional tasks of the statutory auditor
         The General Meeting of 25 April 2007 of Van de Velde NV appointed Ernst & Young Reviseurs
         d’Entreprises SCCRL, Moutstraat 54, 9000 Ghent, represented by Jan De Luyck, as the statutory
         auditor. This appointment runs until the annual meeting of 2010.


         The annual remuneration given to the statutory auditor in 2008 for the auditing tasks of the simple
         and consolidated annual accounts of Van de Velde NV was 44,625 euros (excl. VAT). The total costs for
         2008 for the auditing of the financial statements of all companies of the Van de Velde NV group was
         107,625 euros (excl. VAT), including the 44,625 euros mentioned above.


         In accordance with Article 134 of the Companies Code, Van de Velde announces that the remunera-
         tion given to the statutory auditor for exceptional and special tasks and to the persons with whom the
         statutory auditor has a professional relationship was 41,764 euros (excl. VAT), of which:
         – 27,920 euros for non-auditing tasks;
         – 9,844 euros to Ernst&Young Germany for tax advice tasks.
         – 4,000 euros to Ernst&Young Luxembourg for tax advice tasks.




                                                            117
St atutor y f inanc i a l st ate me nt s of Van de Vel de n V
Fi nanc i a l ye ar 1 / 1 /2 0 0 8 – 3 1 /1 2 /2 008




         6. Description of risks and uncertainties
         The following risks at group-level were examined and where necessary coverage was provided or
         preventive measures taken.


         – Sensitivity to fluctuations in exchange rates
         – Sensitivity to fluctuations in raw materials prices
         – Sensitivity to credit risks
         – Sensitivities to interruptions in the supply chain
         – Sensitivities to loss of customers
         – Turnover risk
         – Environmental risk
         – Quality risk
         – Risk of poor working conditions


         7. Acquisition of own shares
         In accordance with Article 620 of the Companies Code, the General Meetings of 25 May 2005 and 25
         April 2007 gave the Board of Directors the power to acquire own shares of the company.


         In light of this, the Board of Directors took the decision in 2007 to acquire own shares of the company
         by means of a discretionary assignment. These shares are to be offered to the members of the Man-
         agement Committee and selected employees as part of an option plan.


         In 2008, the Board of Directors acquired 2,484 shares at an average price of 33.33 euros, 32,500
         shares at an average price of 28.15 euros and 269,230 shares at an average price of 25.20 euros.


                ,
         In 2007 the Board of Directors acquired 17,516 shares at an average price of 33.79 euros and 10,000
         shares at an average price of 34.93 euros. In 2006 Van de Velde did not hold any own shares.


         Van de Velde held 331,730 own shares at 31 December 2008 (2.45% of the total number of shares).
         This represents a total value of 8,718.000 euros.


         (€ 000)                                                                     2008                 2007


         Share capital                                                              1,936                 1,936
         Own shares in the entity                                                   -8,718                 -936
         Share premium                                                                 743                  743




                                                             118
St atutor y f inanc i a l st ate me nt s of Van de Vel de n V
Fi nanc i a l ye ar 1 / 1 /2 0 0 8 – 3 1 /1 2 /2 008




         8. Conflict of interests
         In 2008 the procedure laid down in Article 523 of the Companies Code was not applied.


         9. Enumeration, within the framework of Article 34 of the royal Decree
         of 14 november 2007 concerning the obligations of issuers of financial
         instruments that may be traded on a regulated market.
         – 44.7% of the shares of Van de Velde NV is held by the general public. The remainder of the shares
            is held by Van de Velde Holding NV, which groups the interests of the Laureys and Van de Velde
            families. Different types of shares do not exist.
         – There are no restrictions on the transfer of securities laid down by law or the articles of associa-
            tion.
         – Holders of securities linked to special control: A majority of Van de Velde’s directors are appointed
            from the candidates nominated by Van de Velde Holding NV, as long as it directly or indirectly holds
            no less than 35% of the company’s shares.
         – There are no employee share plans in which the controlling rights are not directly exercised by the
            employees.
         – There are no restrictions on the exercise of voting rights laid down by law or the articles of associa-
            tion.
         – Van de Velde NV is not aware of any shareholders’ agreements.
         – Notwithstanding the abovementioned fact that a majority of Van de Velde’s directors are appointed
            from the candidates nominated by Van de Velde Holding NV, as long as it directly or indirectly holds
            no less than 35% of the company’s shares, there are no rules for the appointment or replacement
            of the members of the administrative bodies or restrictions on the exercise of voting rights laid
            down by the articles of association.
         – The power of the administrative body with respect to the possibility of issuing shares: The Board
            of Directors is authorised for a period of five years, from the announcement in the annexes to the
            Belgisch Staatsblad/Moniteur belge (2 July 2003), to raise the subscribed capital by one or more
            times 1,926,406.25 euros, under the conditions laid down in the articles of association.
         – The power of the administrative body with respect to the possibility of purchasing shares: see
            point 7 above.
         – There are no major agreements to which Van de Velde NV is party and that come into effect, are
            amended or expire in the event of a change in control over the issuer after a public offer.
         – No agreements have been concluded between the issuer and its directors and/or employees that
            provide for a payment if the relationship is ended as a consequence of a public offer.




                                                           119
St atutor y f inanc i a l st ate me nt s of Van de Vel de n V
Fi nanc i a l ye ar 1 / 1 /2 0 0 8 – 3 1 /1 2 /2 008




         10. Proposed profit distribution
         The Board of Directors proposes to the General Meeting of Shareholders payment of a dividend of
         0.9 euros. After payment of 25% tax, this represents a net dividend of 0.675 euros per share.


         After approval by the General Meeting the dividend will be paid out from 7 May 2009 at branches of
         the KBC, ING and Bank Degroof upon presentation of coupon 3.


         Proposed profit distribution in thousands of euros


         Results for the financial year
         Distributable profit                       18,318 euros
         Gross dividend of 0.9 euros per share      11,903 euros
         on 13,224,980 shares
         Addition to the other reserves              6,415 euros


                                                                                    NV Herman Van de Velde
                                                                       Represented by Herman Van de Velde
                                                                                                         CEO




                                                                                                   EBVBA 4F
                                                                     Represented by Ignace Van Doorselaere
                                                                                                         CEO




                                                          120
8. Social and environmental report

S o c i a l rep or t




            The supportive role of the central HR department in Belgium in the field of human relations, legisla-
            tion, training and remuneration among other things was globalised to an even greater degree in 2008,
            particularly due to the acquisition of Andrés Sardá (Eurocorset and Sul Tuo) in Spain. Special efforts
            were made in (international) recruitment and the continued expansion of a competency management
            system that can also be applied globally.


            Workforce in figures
            Growth in the total number of employees
            The number of employees of Van de Velde group increased 8% in 2008. This growth is mainly due to
            the acquisition of Eurocorset and Sul Tuo (Andres Sarda) in Spain and the expansion of an international
            sales team for this new brand.


                                              1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008


            Tunisia                             125       146   165     183        259   318       359     380    420     553     631      658
            Belgium                             414       420   407     417        411   421       416     414    416     443     458      448
            Hungary                             259       301   300     322        376   385       420     417    422     415     368      347
            Spain (excl. retail)                                                                                     1       1      3      108
            Other (abroad)                          27     26    29         29      28      30      28      30     35        38     43      51
            Retail (total MJ+Sul Tuo)                                                        7      14      25     34        32     27      37
                                                825       893   901     951 1074 1161 1237 1266 1328 1482 1530 1649


                                                                       Total number of employees in the Van de Velde group

            1800

            1600

            1400

            1200

            1000

             800

             600

             400

             200
                0
                      1997       1998        1999        2000   2001        2002     2003        2004      2005    2006      2007        2008

                      Tunisia                              Belgium                               Hungary
                      Spain (excl. retail)                 Other (abroad)                        Retail (total MJ+Sul Tuo)




             1600

             1400

             1200
                                                                             121
             1000

              800
S o c i a l rep or t




            Training
            Training on the job
            For new employees the watchword is training-on-the-job. The employee can rely on the guidance and
            permanent availability of their line manager, a mentor (colleague) and the human resources depart-
            ment in the initial phase. Bearing in mind the outstanding quality of the products, it is important that
            new employees acquire a high level of technical competence.


            Knowledge and skills
            All managers participated in communication, meeting and managing training. The new customer serv-
            ice employees were trained in helping customers in a friendly way, in cooperation with an external
            partner.The continued international expansion produced a need for language training (Spanish, Eng-
            lish, German, French) and training in job-specific know-how.


            Annual performance interviews with office-based staff
            The performance interview method for office staff was completely revised and updated in 2008.
            All office workers have an interview with their line manager at the end of the year. The interview is
            used to discuss and evaluate the values, competencies and performance of the employee over the
            year. A personal development plan (POP) is also drawn up, comprising the employee’s personal goals
            for the year to come. These personal goals are related to the corporate goals and the growth plan.


            All line managers again received training in conducting annual performance interviews.


            Communication and team spirit
            Family Day
            Every year, Van de Velde organises a special activity for its employees and their families. One year
            there is a party for employees and their partners, the next an event that the whole family can take part
            in. It is an ideal opportunity for colleagues to meet each other and each other’s families outside the
            work environment. In September 2008 we took around 600 employees and their families to Ostend.
            Bright sunshine and a diverse programme (including sports, museums and a boat trip on the sea), a
            very enthusiastic group and a barbecue to end ensured the day was a great success.




                                                              122
S o c i a l rep or t




            Team-building event
            Every department has the opportunity to organise an annual team-building event, which is funded by
            the company.


            Inside-out
            Our in-house magazine Inside-out keeps employees informed about new developments with respect
            to the collections, the company and people. It is published three times a year.


            Social elections
            2008 was the year of the social elections. They occurred without problems or complaints. There was a
            shift in seat allocation by employee category versus 2004. The increase in the number of office work-
            ers in proportion to the number of manual workers led to the rise in the number of seats for office
            workers (from 1 to 2) at the expense of manual workers (from 5 to 4). After the social elections all
            seats are filled in the works council and the Committee for Prevention and Protection at Work.


            Health and safety
            Good relations between the internal prevention department, the external prevention department and
            the members of the Prevention and Protection at Work Committee is the foundation of a healthy, safe
            company.


            Occupational accidents
            In 2008 there were 18 occupational accidents, four of which occurred to or from the workplace.
            All accidents and near-accidents were thoroughly investigated by the prevention advisor. Where nec-
            essary, the prevention policy was adapted and personal protective equipment (such as safety boots
            and auditory protection) was introduced.


            Flu vaccination
            In 2008, 18% of the workforce made use of our free annual flu vaccination.


            Healthy body, healthy mind
            In 2007 and 2008 we offered our employees the opportunity to improve their physical condition
            together with their colleagues in a new ‘start-to-run’ programme. The more experienced runners have
            the option of training in a group under professional supervision every week. The initiative was a suc-
            cess and will be continued in 2009.




                                                             123
S o c i a l rep or t




            Fire safety
            The annual fire practice showed that the evacuation procedures at the Schellebelle offices were no
            longer optimised for the number of people involved. The procedures have been updated and the new
            supervisors have received training.


            social commitment
            Regional women’s project
            Van de Velde’s commitment to supporting a regional women’s project was put into practice in 2006
            with the opening of a child-raising centre in Wetteren, in partnership with the regional CAW. It wel-
            comes parents with questions about raising a child. Parents are very positive about the service.


            Close cooperation with Trianval (sheltered workshop)
            The partnership with Trianval, a sheltered workshop in Wetteren, was expanded in 2008. At peak
            times a permanent Trianval team works on our premises under supervision. The team is mainly used
            to help pack lingerie.


            Ethical and social enterprise
            The ethical and social commitments of Van de Velde group are published in the Ethical and Social
            Charter. These commitments have earned the SA8000 label in Belgium (Wichelen and Schellebelle).
            Our certified sites are audited twice a year by independent auditors SGS (www.sgs.be).


            Among other things, the SA8000 label (www.sa-intl.org) draws on the basic conventions of the Inter-
            national Labour Organization, the Universal Declaration of Human Rights and the UN Convention on
            the Rights of the Child. The standard was drawn up in consultation between NGOs, collective indus-
            trial organisations, industry and labelling bodies.


            The SA8000 label is not without obligation for the company. The whole company and all employees
            are closely involved in the audits and must observe the principles. On the other hand, the award is a
            commitment to the future. All business aspects covered by the SA8000 label are subject to discus-
            sions in the Management Committee. The label obliges the company to regularly look at itself, and
            evaluate and fine-tune its human resources operations. Label holders are subject to two social audits
            per year.


            The full version of the Ethical and Social Charter is available at www.vandevelde.eu.




                                                                  124
E nv i ronme nt a l re p or t




           The production process does not cause any water or air contamination. The sole activity is the cutting
           of textile, during which around 20% of the textile is lost. The environmental policy is focused on mini-
           mising waste and sorting waste selectively. Textile waste is collected for incineration in heat recovery
           incinerators. Packaging waste is collected separately for recycling.


           Twenty-year environmental permits were awarded for the Schellebelle and Wichelen sites on 25 Janu-
           ary 1996 and 1 July 1997 respectively. Both sites are classified as class 2 sites.




                                                             125
             Photography
      Mirjam Devriendt (Lannoo)
       Lalo Gonzalez (Marie Jo)
                         ’
    Yves Smal (Marie Jo LAventure)
    Frank Uyttenhove (PrimaDonna)
Wim Van de Genachte (Marie Jo Intense)


Layout, prepress, printed and bound by
           Lannoo Drukkerij
         www.lannooprint.be

								
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