1 annual report 2009 - ku leuven · vpk packaging group | annual report 2009 dear shareholders, the...

1

Annual report 2009

2

Financial calendar

201016 March 2010 Press release and publication of provisional results for the 2009 financial year

17 March 2010 Analysts’ meeting on press release and publication

of the provisional results for the 2009 financial year

30 April 2009 Ordinary general meeting of the shareholders (2009 financial year)

at the offices of VPK PACKAGING GROUP NV

at Villalaan 16 (2nd floor), 9320 Erembodegem (Aalst), Belgium

14 May 2010 First interim report

20 May 2010 Dividend made available for payment

31 August 2010 Press release and publication of the results for the first half-year of 2010

16 November 2010 Second interim report

201115 March 2011 Press release and publication of the provisional results for the 2010 financial year

16 March 2011 Analysts’ meeting on press release and publication of the provisional results

for the 2010 financial year


at the offices of VPK PACKAGING GROUP NV

at Villalaan 16 (2nd floor), 9320 Erembodegem (Aalst), Belgium

13 May 2011 First interim report

18 May 2011 Dividend made payable (under reservation)



®®

3

VPK PACKAGING GROUP | ANNUAL REPORT 2009

ContentsConsolidated key figures 4 - 5

Strategy & Profile 6 - 7

Letter to shareholders 8 - 11

Annual Report of the Board of Directors 12 - 21

VPK Packaging Solutions 22 - 23

Overview of activities 24 - 31

Highlights of 2009 – outlook for 2010 32 - 33

VPK PACKAGING GROUP shares 34 - 37

Key figures per share 34 - 35

Corporate Governance Statement 36 - 43

Employment report 44 - 45

Environmental policy 46 - 47

Logistics Business Process Reengineering 48 - 49

Consolidated annual financial statements

as at 31 December 2009 52 - 115

1.1 Consolidated balance sheet 52 - 53

1.2 Consolidated statement

of comprehensive income 54 - 55

1.3 Consolidated statement

of changes in equity 56 - 57

1.4 Consolidated cash flow statement 58 - 60

1.5 Notes to the consolidated

annual financial statements 61 - 115

Auditor’s report 116 - 117

Abridged statutory financial statements

VPK PACKAGING GROUP NV 118 - 121

Proposals to the ordinary general meeting 124 - 125

Financial calendar 126 - 127

Financial addresses 128 - 130

1

2

3

4

5

6

7

8

9

10

11

12

13

1

2

3

4

5

6

Part I

Part 2FINaNCIaL rEVIEW

4

Geconsolideerde bedrijfsopbrengsten

EBITDA

EBIT

1 Consolidated key figures

700

600

500

400

300

200

100

0

2005

200

6

200

7

2008

2009

Consolidated operating inCome

eBit

VolUmes


EBITDA

EBIT

mio EUReBitda

mio EUR8070605040302010

0

2005

200

6

200

7

2008

2009


EBITDA

EBIT

mio EUR4540353025201510

50

2005

200

6

200

7

2008

2009

resUlt after taxesmio EUR Resultaat na belastingen

Netto cash flow

353025201510

50

2005

200

6

200

7

2008

2009

Resultaat na belastingen

Netto cash flow

net Cash flow

mio EUR70

60

50

40

30

20

10

0

2005

200

6

200

7

2008

2009

500450400350300250200150100

500

VolUme paper‘000 TON

Paper 36 %

Corrugated board 48 %

Specialties 16 %

653

1.1

374368383

427425

2005

200

6

200

7

2008

2009

600

500

400

300

200

100

0

VolUme CorrUgated Board‘000 TON

486412

390345313

2005

200

6

200

7

2008

2009

5


2009 2008 Evolution in %in EUR

Results

Operating income 522,183,833 571,135,266 -8.57

Sales 520,458,790 569,564,756 -8.62

Operating cash flow (EBITDA) (1) 50,631,705 50,787,539 -0.31

Operating cash flow (in % of operating income) 9.70 8.89

Operating result (EBIT) (2) 14,308,724 11,488,955 24.54

Operating result (in % of operating income) 2.74 2.01

Gain (loss) on disposal of fixed assets 0 19,359,578

Financial Result 11,256,017 -16,927,467 -166.50

Result before tax 25,564,741 13,921,066 83.64

Income taxes -1,143,964 6,347,986

Result after taxes from continuing operations 24,420,777 20,269,052 20.48

Result for the period, attributable to 24,420,777 20,269,052 20.48

- owners of the parent 24,443,211 19,691,965

- non-controlling interests -22,434 577,087

Self-financing and investments

Net cash flow (3) 60,743,758 59,567,636 1.97

Investments 26,061,029 66,325,077 -51.86

Balance sheet

Balance sheet total 500,363,964 500,660,657 -0.06

Equity 286,640,907 267,282,248 7.24

Solvency ratio (in %) 57.29 53.39

Net financial debts(4) 67,746,662 105,289,655 -35.66 (1) EBItDa = operating result + depreciation & amortisation + write-offs + provisions (2) EBIt = operating result Compared to last year, the result on disposal of assets (€ -1.4 m in 2008) was reclassed as part of the operating result (3) Net cash flow = result of the period + depreciation & amortisation + write-offs + provisions (4) Net financial debt = interest bearing debts - cash and cash equivalents

6

2 Strategy

VPK PACKAGING GROUP NV is a leading Western

European packaging group that develops and produces innova-

tive, protective and logistics packaging while making maximum

use of recycled fibres.

Recycling and protecting

VPK PACKAGING GROUP NV has set out a noble mission for

itself: to recycle and to protect.

We continuously recycle the paper and cardboard mountain

that piles up every day as a result of our consumer society

into high-value packaging. This packaging in turn protects the

valuable goods of our customers.

This results in a sustainable business model in which econo-

mics and ecology go harmoniously hand-in-hand.

Customer focus

Besides sustainability, the VPK PACKAGING GROUP NV

business model is also based on a highly motivated customer

focus.

The combination of our high technology production equipment

on the one hand and our enthusiastic and skilled local manage-

ment teams on the other, ensures that we are able to satisfy

the most exacting needs of professional packaging buyers.

We always work closely with our customers to find the best

possible solution for their packaging requirements. The success

of VPK PACKAGING GROUP NV is mainly due to the fact that

the packaging requirements of every customer can be satisfied

at the lowest possible cost and with high quality added value in

terms of logistics services.

Thanks to our facilities in the main Western and Eastern Euro-

pean markets, VPK PACKAGING GROUP NV is also able to meet

the international packaging requirements of its customers.

In short, VPK PACKAGING GROUP NV guarantees a local, com-

mercial approach combined with an international reach.

Human capital

VPK PACKAGING GROUP NV constantly strives to create and

maintain a stimulating working environment for all its staff. To

achieve this, it offers career opportunities to enable its employ-

ees to fully develop their entrepreneurship and creativity.

VPK IN

PAPER CYCLE dIssOLUTION Of fIbREs

fREsH fIbRE PROCEss

RECYCLEd fIbRE PROCEss

PAPER mAChINEs PAPER/APPLICATION

OUdEGEM PAPIER

1.2

7


ProfileVPK PACKAGING GROUP NV is from origin a Belgian

packaging group that has been listed since March 1999 on

Euronext Brussels.

In 2009 with 3,124 staff, we delivered € 522.2 m in opera-

ting income. This represents a slight fall of 8.6% compared

to 2008, which is primarily the consequence of the global

economic and financial crisis, which impacted just about

every segment in which VPK PACKAGING GROUP NV

operates.

Nevertheless, we are convinced that our strong financial

structure, our well thought-out investment strategy and the

defensive character of our activity, coupled with our deter-

mination to continue to grow, are key factors that enable us

to look to the future with confidence.

Recycled paper is processed at our own paper facility in

Dendermonde into new paper, which in turn becomes a

valuable raw material for corrugated board, solid board,

cores and edge protectors.

During the manufacturing process, it is essential to take

account of the strictest specifications of our customers so

that we can talk unconditionally about high-value, service-

oriented products.

In short, waste (recycled paper) becomes a raw material

(paper) and this raw material becomes valuable packaging

with a strong service function.

Our Paper division, OUDEGEM PAPIER NV, is a European

leader, specialising in the production of paper for packaging

based on recycled paper. In 2009, our three specialised

paper machines produced 374,000 tons of corrugated paper,

liner paper and board for cores.

Our Corrugated Board division produces high-value service-

oriented packaging and is continuously designing, creating

and producing new packaging in order to provide the best

possible solutions to the logistics needs of our customers.

We currently produce and process corrugated board and

boxes in Belgium, the Netherlands, France, the United King-

dom, Poland and Romania.

The total volume of corrugated board and boxes produced

in 2009 amounted to 486,000 tons.

Our Specialties division produces solid board packaging

that is marketed under the brand of “Smart Packaging

Solutions®”.

Solid board, a typically Western European product, is pro-

duced by gluing various layers of cardboard and paper with

a waterproof glue (PVA). This makes solid board ideal for

packaging fresh and frozen foodstuffs as well as flowers

and certain industrial applications.

The globalisation of trade in foodstuffs ensures that solid

board is becoming increasingly better known outside Wes-

tern Europe. These new markets in the Far East, and also

in North and South America, are increasingly realising that

solid board, because of its high efficiency and eco-friend-

liness, can meet their specific packaging requirements.

With 11 customer-focused production plants in 10 European

countries, COREX® on the other hand, has grown as a pro-

ducer of cardboard cores, tubes and edge protectors into a

European market leader. COREX® specialises in both spiral

and parallel wound tubes, for winding flexible products.

8

3 Letter to shareholders “ Despite the crisis

VPK PACKAGING GROUP NV

has succeeded in recording

solid results.”

1.3

9


Dear shareholders,

The crisis that took hold from the second half of 2008, deepe-

ned further in 2009. While the low point of the financial crisis

was probably reached towards the end of 2008, the impact on

the real economy only made itself fully felt at the start of the

new year. A bigger decline in consumer demand, failures and

business closures followed. Consumer confidence only started

to improve during the second half of the year and the stability

in the financial markets has led to a recovery in business confi-

dence. Businesses continue to be prudent and are maintaining

their focus on cost savings and debt reduction.

The paper and packaging sector, like other sectors of the

economy, was affected by this general economic crisis.

Furthermore, market conditions were made even more difficult

by growing overcapacity. Many paper producers, emboldened

by the success of the preceding years, decided to build new

capacity just before the outbreak of the crisis, especially in

Central Europe. These facilities were started up during 2009

or are now coming on stream in the first half of 2010. This

additional capacity was partly offset by temporary production

restrictions and permanent closures but combined with the fall

in demand has resulted in steadily falling prices. As a result,

the price of paper reached its lowest level in more than 10

years (below € 200/ton). This was despite the fact that the cost

of old paper remained at an average level of +/- € 70/ton. The

trend only began to be reversed from September when paper

prices increased out of necessity. Following a loss-making year

in 2008, most paper producers once again lost money in 2009.

Corrugated board producers are benefiting temporarily from

falling paper prices, but margins are being squeezed by a com-

bination of the reduction in demand and pressure on packaging

prices. Certainly in the last quarter, producers were confronted

with the shift to an upward trend of paper prices combined

with continuing falls in packaging prices.

In this context, there was a continued strong focus within the

VPK PACKAGING GROUP NV in the year under review on cost

savings and further debt reduction. In terms of cost structure,

the focus was on neutralising the inflationary effects resulting

from 2008, when there were increases in personnel costs and

all major raw materials and consumables.

Following the start-up in 2008 of the reconditioned paper

machine 7 (PM 7) at Oudegem (Belgium), a lot of consideration

was also given in 2009 to bringing production of this machine

to capacity. It is only in the final quarter of 2009 that pre-

defined production levels were achieved. As announced at the

end of 2008, the RIGID PAPER factory at Selby (UK) was finally

closed early in 2009. This reduced capacity by 70,000 tons,

which was largely transferred to Oudegem (Belgium).

The VPK PACKAGING GROUP NV also expanded further in 2009.

The acquisition of ONDULYS SAINT QUENTIN SAS was fina-

lised at the start of February 2009. With the acquisition of this

corrugated board factory (45,000 tons) we significantly streng-

thened our presence in North-West France. The integration of

this unit went smoothly and was completed successfully.

The expansion of the new corrugated board factory at Salonta

(Romania), which started in December 2008, is progressing and

is continuing in very difficult circumstances. The strong fall-off

in demand and overcapacity in the local market ensure that the

expansion of this unit will take place slowly.

On the other hand, the expansion of the second corrugated

factory at Radomsko (Poland), which began in April 2009, is

continuing successfully. It had already reached its break-even

volume only a few months after operations started.

Our business has remained faithful to its policy of sustainable

business practice, and respect and care for the environment.

Moreover, we are conscious that, as a major industrial

establishment, we also have a social responsibility to the com-

munities in which we are based.

Our core activities also remain unchanged: the packaging

that we produce every day protects the valuable goods of our

customers. We continually recycle the paper and cardboard

waste mountain that is generated every day into high-value

10

“We look forward to 2010

with confidence and ambition.”

11


packaging. This sustainable business model will also remain

the basis for our continued growth in the future. In view of the

limited growth potential within the mature West European mar-

kets and the current overcapacity in Central Europe, the areas

where we as a group currently operate, the question needs to

be asked whether further expansion of the group should focus

on possible opportunities in the fast-growing BRIC countries.

The current year, 2010, is also looking difficult. Although there

has been a slight recovery in demand, the sharp increase in the

price of old paper and uncertainty in respect of overcapacity

ensure that we will continue to experience reduced margins

for some time, until these price increases can be passed on to

packaging customers.

2010 will therefore be very challenging but we face it with the

fullest confidence and enthusiasm.

Pierre Macharis Jean-Paul Macharis

CEO, chairman of the chairman of the

executive committee board of directors

12

4 Annual Report of the board of directors

1.4

13


ANNUAL REPORT OF THE BOARD OF DIRECTORS

ON THE CONSOLIDATED FINANCIAL STATEMENTS

OF VPK PACKAGING GROUP NV

FOR THE 2009 FINANCIAL YEAR.

Dear shareholders,

We hereby present our report on the financial statements

of the VPK PACKAGING GROUP NV for the 2009 financial

year.

General market situation

The paper and packaging market in 2009 was characterised

by further price reductions and a general decline in demand.

The downward trend of both price and demand, which

took hold from the second half of 2008, deepened further

in 2009. Driven by the financial and economic crisis, the

general uncertainty and the resulting collapse in consumer

confidence, combined with a threat of overcapacity within

the sector, there was a steady fall in both price levels and

demand until the start of September 2009.

The turning point within the sector came on the one hand

from the contraction of the supply-side, and on the other

hand as a result of the significant accumulated losses

within paper production businesses because of unprofitable

price levels. During 2009, despite the fall in demand, and

the new capacity that came on-stream, primarily in Central

Europe, European producers succeeded in reducing stocks,

which reached their lowest level for two years at the end

of August. This was partly due to a number of produc-

tion units being put out of use but also as a result of the

temporary production suspensions or capacity restrictions.

The reduced stock levels, combined with the accumulated

losses within the paper-producing units and prices for raw

materials starting to rise again resulted in a turnaround in

the price trend for recycled paper from September. There

were price increases within the sector of € 90/ton in the

fourth quarter.

For the packaging segments, which have been faced with

continued price pressure throughout 2009, this resulted in

stronger margin pressure in this final quarter. Furthermore,

most of the players are forecasting an additional cost incre-

ase of € 60/ton for the first half of 2010.

Consolidation perimeter

The following changes to the perimeter of consolidation

took place in 2009. In February, following the successful

completion of its acquisition, ONDULYS SAINT QUENTIN

SAS was included as a 100% subsidiary within VPK PACKA-

GING GROUP NV. COREX Denmark A/S was taken over at

the end of April and the remaining 15% of AQUILA Sp.z o.o.

was purchased in July 2009.

Income statement

The consolidated operating income fell from € 571.1 m in

2008 to € 522.2 m at the end of 2009. This represents a

fall of 8.6%. The acquisition of ONDULYS SAINT QUENTIN

contributed an additional € 34.5 m or 6.6% to operating

income. Without this external growth, the fall in operating

income would have been 14.6%.

In the paper segment, total operating income, including

internal sales, fell from € 137.2 m to € 90.8 m, a fall of

33.8%. Sales to external customers amounted to € 26.9 m,

or 29.6% of the total. The rate of integration consequently

increased from 62.9% to 70.4%. The fall in sales for paper

is entirely attributable to the reduction in the average sel-

ling price (29.6%). The sales volume remained fairly stable

(374,000 tons in 2009 compared to 367,595 tons in 2008).

The paper production unit in the UK (RIGID PAPER Ltd) was

closed early 2009. Paper prices underwent a steady fall

until the start of September. Permanent and temporary

capacity reductions, the resulting lower inventory levels

and the major accumulated losses at most paper producers,

combined with increases in raw material prices and the

cautious recovery of demand, led to a reversal of the price

trend. During the final quarter a price increase of € 90/ton

was carried through. The sector predicted a further incre-

ase in paper prices of € 60/ton during the first half of 2010.

The consolidated operating income of the corrugated board

segment fell by 4.2% from € 394.4 m in 2008 to € 378.0

m in 2009. Without the acquisition of ONDULYS SAINT

QUENTIN SAS (€ +34.5 m), the fall within the corrugated

14

board segment would have amounted to 12.9%. Selling

prices followed the steady reduction in paper prices during

the first 9 months of the year. The reversal of the trend in

paper prices from the start of September also put a halt

to price reductions within the corrugated board segment.

In terms of volumes, there was growth of 16.7%, partly

due to the external growth as a result of the acquisition of

ONDULYS SAINT QUENTIN SAS (+9.8%) and partly through

further internal growth with the start-up of operations in

Romania and a second sheet feeder coming on-stream in

Poland (+7.5%).

The consolidated operating income of the specialties seg-

ment (solid board, cores and edge protectors) fell by 7.0%

from € 125.8 m in 2008 to € 117.0 m in 2009. Sales volumes

increased by 2.1% in total.

The gross margin increased in 2009 from 55.3% to

58.6%. This margin increase was primarily achieved within

segments corrugated board and specialties. Gross margins

have also been under pressure within these segments since

the start of September as a result of the paper price increa-

ses that took effect from that time.

Total personnel costs increased by 4.9% in comparison

with last year from € 123.6 m to € 129.8 m. This increase

is partly the result of the acquisition of ONDULYS SAINT

QUENTIN SAS as well as further expansion in Poland and

Romania. Additional personnel provisions of € 2.6 m were

also made, primarily in relation to the existing pension

plans. Personnel costs excluding provisions for pensions

and redundancies represented 25% of total operating costs

in 2009 against 22.1% in 2008.

Depreciation amounted to € 28.7 m in 2009 compared

to € 32.4 m in 2008. This amount includes the reversal of

depreciation on fixed assets in the amount of € 2 m. This

depreciation was charged in 2008 in respect of advance

payments for the new paper factory in Central Europe. It

will be possible for these advance payments to be used for

the investment in the rebuilding of a paper machine 6 (PM6)

at Oudegem planned in 2010.

As a result of the closure of the paper factory at Selby (UK),

additional impairment losses were taken on the remai-

ning facilities and machinery in the amount of € 2.3 m. The

book value of the facilities and machinery in respect of this

production unit was consequently reduced to zero.

Furthermore, an impairment loss in the amount of € 1.1 m

was reversed in respect of the corrugated board activi-

ties in France. More specifically the remaining balance of

impairment losses in respect of the buildings, facilities

and machinery of the production site at Lomme (Lille) was

completely written back as a result of the acquisition of

ONDULYS SAINT QUENTIN SAS, as this site no longer

needs to be relocated.

An impairment loss in the amount of € 3 m in respect

of goodwill was recognised in the cores division. This divisi-

on’s activity is to a large extent linked to industrial demand

and it is located primarily in mature markets. The increasing

delocalisation of industrial customers in these mature mar-

kets, which has been reinforced by the recent financial and

economic crisis, requires a revision of the future expectati-

ons of this division, resulting in this impairment loss.

The operational cash flow (EBITDA) amounted to € 50.6 m

compared to € 50.8 m in 2008. This represents a profitability

of 9.7% against 8.9% in 2008. The operating result (EBIT)

amounted to € 14.3 m compared to € 11.5 m in 2008, an incre-

ase of 24.5%.

The gain on disposals of investments was € 19.4 m in

2008. These gains were realised on the sale of the invest-

ments in Twinpack BV and Doopa NV.

In 2009, there was a positive financial result in the

amount of € 11.2 m, which compares with a financial loss of

€ 16.9 m the previous year. The most important elements of

the financial result in 2009 are a one-time profit of € 8.3 m

in negative goodwill, exchange gains in the amount of

€ 6.4 m, and net interest charges of € 2.4 m.

The negative goodwill was recognised as a result of the ac-

quisition of ONDULYS SAINT QUENTIN SAS, the corrugated

board factory in France that was taken over at the start of

February 2009.

15


With the majority of interest-bearing long-term liabilities

having a variable interest rate (84.2% at the end of 2009),

the net interest charge benefited fully from the sharp

reduction in interest rates in 2009. Management likewise

anticipates future interest rate rises. Interest rate options

contracts for a total amount of € 30 m in variable inte-

rest were swapped for a fixed rate over the period from

31/12/2010 to 31/12/2013.

The exchange loss in 2008 amounted to € 10.6 m. This sig-

nificant exchange rate result was primarily generated from

VPK Services GCV, which functions within VPK PACKAGING

GROUP NV as a coordination centre and in-house bank. The

losses related primarily to exchange losses on the British

Pound (GBP) and to a lesser extent the Polish Zloty (PLN).

As regards the GBP, VPK SERVICES GCV had a number of

receivables in GBP due from subsidiaries of RIGID (+/- £

10m at the end of 2008) and there was also a significant

cash position in GBP (+/- £ 11m at the end of 2008). The

GBP fell from EUR/GBP 0.733 at the end of December 2007

to EUR/GBP 0.953 at the end of 2008 (-30%). The various

GBP positions therefore resulted in significant exchange

losses of € 8.3 m.

The exchange loss on the PLN is due to VPK SERVICES GCV

making EUR financing available to the Polish subsidiaries.

Financing in place at the end of 2008 amounted to

€ 8 m. The PLN fell from EUR/PLN 3.59 at the end of

December 2007 to EUR/PLN 4.15 at the end of 2008. This

resulted in an exchange loss in respect of the Polish subsi-

diaries in the amount of € 1.7 m.

Various initiatives were taken during 2009 to limit the

exposure to exchange rates movements. One action was

that the cash position in GBP was gradually reduced, taking

advantage of favourable exchange movements. The cash

position held in GBP at the end of December 2009 was

£ 1.3m. Furthermore, the current account positions between

VPK SERVICES GCV and the RIGID subsidiaries was fully

eliminated by a reallocation of investments and financing,

so that there is no more exposure to exchange rate fluctu-

ations.

The further expansion of the Polish activities (the second

sheet feeder) was to a large extent financed in PLN. At the

end of 2009, financing in euro from VPK SERVICES GCV to

the Polish subsidiaries amounted to € 9.2 m. In anticipation

of a further strengthening of the PLN, this loan will also be

converted into a PLN loan in order to reduce the exposure

to the exchange rate risk.

For the whole of 2009, as a result of the above initiatives,

a positive exchange result was achieved in the amount of

€ 6.4 m.

The amount of income taxes was also limited in 2009. The

taxable profits of the various packaging entities were to a

large extent offset by the significant loss at the Belgian pa-

per entity. An additional deferred tax asset was created in

2009 in the amount of € 7.3 m, as a consequence of the tax

loss suffered by this entity. The net result came to € 24.4 m

compared to € 20.3 m in 2008. An increase of 20.5%.

Balance Sheet

Equity grew further to € 286.6 m at the end of 2009

compared to € 267.3 m at the end of 2008. Apart from the

increase of the net result in the amount of € 24.4 m, there

was a further € 1.3 m in unrealised exchange rate gains.

Shareholders’ equity fell further because of the additional

purchase of own shares in the amount of € 1.4 m and € 3.1

m attributable to differences on conversion. Finally, the

acquisition of the remaining 15% of Aquila Sp.z o.o. had a

negative impact on shareholders’ equity in the amount of

€ 1.9 m.

During 2009, VPK PACKAGING GROUP NV, through its

100% subsidiary OUDEGEM PAPIER NV, in conformity with

the provisions of the articles of association and company

law, purchased 66,212 of the company’s own shares. At 31

December 2009 VPK PACKAGING GROUP NV held a total

of 606,209 of its own shares (compared to 539,997 at 31

December 2008). The total amount spent by the company on

purchasing its own shares is € 16.2m.

In 2008, an exchange rate was charged against sharehol-

ders’ equity in the amount of € 12.2 m. This related partly to

16

the exchange loss on the GBP interest-bearing receivables

at VPK SERVICES GCV due from Rigid subsidiaries

(+/- £ 24 m) and partly to the exchange loss on the debt po-

sition in EUR of VPK SERVICES GCV to PAPIRO AG (€ 36.1 m

at the end of 2008). Both items were considered permanent

investments and the exchange rate result was therefore

included in the unrealised result. In view of the fact that

PAPIRO AG uses the CHF (Swiss Franc) as its reporting

currency, the significant EUR deposits that it holds in VPK

SERVICES GCV results in exchange rate exposure that

depend on the EUR/CHF exchange rate.

In 2009, as a result of the evolution of both items, as well

as the evolution of the respective exchange rates, an

exchange profit was taken to shareholders’ equity in the

amount of

€ 1.3 m. At the end of 2009, the interest-bearing receiva-

bles in GBP of VPK SERVICES GCV owed by RIGID subsidia-

ries was £ 16.7m and the deposit position of PAPIRO AG in

VPK SERVICES GCV was € 39.5 m.

From 1 January, 2010 PAPIRO AG’s accounts have been de-

nominated in euro (in contrast to CHF previously) as a result

of which the above item will no longer give rise to exchange

rate gains or losses.

Total assets remained more or less unchanged and amoun-

ted to € 500.4 m at the end of 2009. The liquidity ratio

consequently increased from 53.4% to 57.3%.

Net financial debt fell from € 105.3 m at the end of 2008

to € 67.7 m at 31 December 2009. The gearing ratio fell

from 39.5% to 23.6%. Of the total interest-bearing liabili-

ties in the amount of € 92.5 m, € 62.4 m is repayable after

more than 1 year. In 2010 only € 9.4 m needs to be repaid.

Cash and cash equivalents amounted to € 24.8 m at the end

of 2009. The fall in the net financial debt is primarily the

result of a robust operational cash flow, a significant posi-

tive contribution through the improvement of the working

capital position and restrictions on capital expenditure.

The positive contribution to the operational cash flow of

the movement in working capital is primarily attributable

to the significant reduction in trade receivables, partly

through the recurring sale of part of the portfolio of trade

receivables (see below).

Long-term obligations in respect of pensions and

similar commitments increased by € 3.9 m in 2009 to €

14.5 m. This relates primarily to additional pension com-

mitments that were provided for in relation to the existing

pension plans.

Current income tax liabilities increased by € 3.6 m

compared to the previous year.

Other current liabilities amounted to € 16.4 m compared

to € 11.4 m at the end of 2008. This increase of € 5.0 m is

mainly attributable to the increase in VAT payable (€ +1.6

m), continuing involvement liability relating to the recurring

sales programme of trade receivables (€ +2.4 m), and an

increase of other provisions (€ +1.1 m).

The amount of consolidation goodwill fell by € 3 m to

€ 7.9 m. This reduction is attributable to the impairment

loss on goodwill in the cores division as a result of the

impairment test carried out on it (see above).

In 2009 a total of € 25.0 m was invested in property,

plant and equipment. The largest items were further

investments as a result of the renovation of the PM-7 paper

machine at Oudegem (Belgium), the expansion of the new

corrugated board factory in Salonta (Romania), and the

expansion of a second Polish sheet feeder at Radomsko.

Furthermore, there was an increase of € 17.5 m as a conse-

quence of the acquisition of ONDULYS ST QUENTIN SAS.

The total depreciation charge amounted to € 27.4 m.

The inventory level increased from € 56.2 m to € 59.1 m at

the end of 2009. This stock increase of € 2.9 m is primarily

attributable to an increase in the inventory of finished

products in the paper segment.

Trade receivables fell by € 23.2 m to € 71.3 m. This

movement is the result of the focus on outstanding

customer credit as well as the recurring sale of part of the

portfolio of trade receivables to a financial institution,

17


which began in mid-June 2009. At the end of December

2009 the amount of receivables sold within this programme

amounted to € 18.4 m. The opportunity exists to expand this

programme up to € 35 m.

Principal risks and uncertainties

Here we report on the principal risks and uncertainties that

could have a significant impact on the development, finan-

cial results or the market situation of the company.

In the first instance we note that the operating income of

our business is mainly influenced by consumer behaviour

relating to the use of primary goods. The majority of the

customer portfolio of VPK PACKAGING GROUP NV is in the

food and Fast Moving Consumer Goods (FMCG) sectors,

where demand, while negatively influenced, remains more

robust than for industrial products, where activity fell more

sharply as a consequence of the economic crisis. Further-

more, VPK PACKAGING GROUP NV has a good geographic

spread in terms of both production and sales, so that

country-specific variations are offset against each other.

In addition, the group is faced with a number of market-

based risks and uncertainties. A first element here is the

fluctuation in sales prices. While demand is key, the issue

of supply and, more specifically, capacity and capacity

utilisation is highly important. Although demand and supply

are more or less in balance in Western Europe, substantial

overcapacity is in danger of being established in Central

and Eastern Europe. Until recently, the growth in these

regions was capable of absorbing this capacity but the cur-

rent economic stalemate threatens to bring overcapacity.

As previously indicated, the supply-side reacted by shutting

down facilities and imposing temporary capacity restricti-

ons. The current economic crisis is also creating opportu-

nities for further consolidation. At the start of 2009 VPK

PACKAGING GROUP NV itself closed its 70,000 ton paper

production unit in the UK (RIGID PAPER Ltd).

Profitability is strongly dependent on the trend of the main

raw material prices, more specifically prices for old paper,

starch and energy. As regards energy policy, the evolution

of the CO2 issue is being monitored and anticipated where

possible, for example by investing in energy facilities with

reduced CO2 emissions.

Another risk to be reported on relates to the creditworthi-

ness of our customers. The credit crunch and the poor eco-

nomic situation have resulted in a higher risk of default and

a sharp increase in bankruptcies. Risk management in this

field is therefore high on the agenda. Credit insurance taken

out by VPK PACKAGING GROUP NV in 2009 covered 74%

of turnover. There are strict internal procedures and rules

for monitoring customers and for identifying and managing

any potential risks. In addition, the spread of the customer

portfolio (the largest customer represents less than 1% of

total sales) leads to a natural reduction of these risks.

Provisions for non-recoverable receivables are made in

good time. The credit insurance policy is continued further

in 2010.

Exchange rates are also a significant risk for VPK PACKA-

GING GROUP NV. In 2009 23.6% of sales were made in non-

euro countries (27.5% in 2008). Of these non-euro countries

the activities in the UK (12.7%) and Poland (8.1%) are the

most significant. Purchases and sales in these countries are

largely made in local currency.

In addition, VPK SERVICES GCV functions as an in-house

bank for all Belgian and foreign subsidiaries of VPK PAC-

KAGING GROUP NV, as a result of which financial balances

exist between them.

An effort is made to hedge naturally both within the

subsidiaries and at VPK SERVICES GCV itself, by balancing

receivables and payables (creating comparable exchange

exposure in terms of receivables and payables) so that the

exchange risk is neutralised. Currency swaps are contrac-

ted from time to time.

At 31/12/2009 € 60.4 m or 84.2% of long-term financial

liabilities have a variable interest rate based on Euribor at

1 or 3 months. An existing interest option contract in which

the variable interest rate is exchanged for a fixed interest

rate in the amount of € 10 m expires on 30/09/2010. Ad-

ditional interest option contracts with staggered starting

dates were entered into for an amount of € 30 m in long-

term liabilities in which the variable interest rate can be

18

exchanged for a fixed interest rate from 31/12/2010 up to

the end of 2013.

Finally, the ongoing credit shortage creates a liquidity risk.

VPK PACKGING GROUP NV has built up sufficient reserves

thanks to its strong balance sheet and liquidity position, as

well as ample access to confirmed credit lines.

Events after 31 December 2009

Twenty years after production of solid board packaging

started at Oudegem, the Solid Board division of VPK PAC-

KAGING NV at Oudegem decided on 1 January 2010 that it

would henceforth market its products under the European

registered brand name Smart Packaging Solutions®.

With the acquisition of the business activities of R&F

Folding Boxes based in Meer (Belgium) in January 2008

and the further growth in market share, Smart Packaging

Solutions® has grown to the number 2 in the solid board

packaging sector in Benelux.

Smart Packaging Solutions® has a production capacity of

80,000 tons per year.

At the end of January 2010 the activity of the “Charta”

division of RIGID CONTAINERS Ltd. was transferred to a

new English company, named RIGID ASTON Ltd, in which an

English industrial partner holds a minority stake (35%).

RIGID ASTON Ltd., whose registered office is in Aston

(close to Birmingham), produces “single face” corrugated

board that is used as a packaging material for items such as

window frames and radiators.

The objective of RIGID ASTON Ltd. for 2010 is to achieve

sales of € 5,000,000.

Outlook for 2010

2010 will be characterised by significant margin pressure

within the corrugated board segment as a result of the pa-

per price increases that came into effect in the final quarter

of 2009 and the further price increases expected in the first

half of 2010. Within the paper segment, despite the return

to a higher price level, margins will come under pressure

because of the increased old paper prices as a consequence

of market shortages. Furthermore there remains a lot of

uncertainty about the cautious recovery in demand that

was evidenced in the final quarter of 2009. VPK PACKA-

GING GROUP NV therefore remains prudent in carrying out

its day-to-day and strategic policy, with a continued focus

on cost reduction, and the further strengthening of the

balance sheet.

Proposed profit distribution

The consolidated net profit for the 2009 financial year

amounted to € 24,420,777 compared to € 20,269,052 in

2008.

The board of directors proposes to fix the gross dividend at

€ 0.75 per share, being € 0.56 net for ordinary shares, and

€ 0.64 net for VVPR shares. This dividend will be payable

as from 20 May 2010. With this the company returns to its

dividend policy of achieving annual dividend growth in the

absence of exceptional circumstances.

Other company information

- Capital and shareholdings

In the 2009 financial year the issued capital was increased

one time by € 35,349.50 with the issuing of 2,026 new sha-

res in the framework of the Warrant plan (see below). After

this, no more changes were made to the company’s capital.

VPK PACKAGING GROUP NV’s issued capital at 31 Decem-

ber 2009 amounted to € 21,145,603.71 and was represented

by 8,772,742 shares, with no par value, each of which re-

presents one/eight million seven hundred and seventy-two

thousand, seven hundred and forty-second of the capital

and of which 672,742 are VVPR shares. All shares are fully

paid-up.

The company has received a transparency notice in which

Stichting Administratiekantoor Packaging Investments

indicated that it owns 7,199,999 shares with voting rights in

the company, as a result of which it controls the company.

19


At 31 December 2009, the shareholding was divided

as follows:

Date of notification Number of

shares

Stichting 26/11/2008 7,199,999

Administratiekantoor

Packaging

Investments

Own shares 31/12/2009 606,209

•Purchase of own sharesOn 24 April 2009 the general meeting of shareholders

authorised the board of directors to purchase or transfer

the company’s own shares in order to avoid a serious threat

to the company for a period of three years to run from 24

April 2009.

Moreover, in accordance with article 620 of the Companies’

Code, the authorisation was renewed for the company, acting

directly or through a person operating in his/her own name but

on account of the company, taking account of the shares already

owned by the company or its directly controlled subsidiaries, to

acquire up to a maximum of 20% of the shares of the company by

purchase or exchange at a price equal to the price at which the

shares are listed on the Euronext Brussels exchange at the time

of the purchase or exchange. This latest authorisation is valid for

a period of five years to be counted from its publication in the

Appendices of the Official Belgian Gazette (09 November 2009).

During the financial year, VPK PACKAGING GROUP NV

purchased 66,212 of its own shares, which represented

0.75% of the issued capital. These shares were purchased

with a view to being used to finance any acquisition of new

shares in companies outside the consolidation perimeter.

At 31 December 2009 VPK PACKAGING GROUP NV had a

total of 606,209 of its own shares in its portfolio (compa-

red to 539,997 at 31 December 2008). These own shares

purchased represent 6.91% of the issued capital.

∙ Own shares

purchased in 2009 66,212 0.75%

∙ Total of own shares

held at Dec 2009 606,209 6.91%

•WarrantsThe extraordinary general meeting held on 17 February

1999 authorised the board of directors to issue 100,000

warrants in accordance with the conditions and modali-

ties as described in a warrant plan that was approved by

the board of directors on 12 February 1999. The principal

conditions and exercising are included in part II under note

II.1.5.27.5. in the consolidated financial statements. The

final exercise period provided for in the plan was Janu-

ary 2009. During this latest exercise period, 16 warrant

holders exercised a total of 2,026 warrants. As a result, the

capital of VPK PACKAGING GROUP NV was increased by

€ 35,349.50 and 2,026 new shares were issued. The total

number of warrants not exercised consequently amounted

to 16,346 and in accordance with the warrant plan they

have now lapsed irrevocably.

•Law on takeover bids In the framework of the law of 1 April 2007 on takeover

bids, Stichting Administratiekantoor Packaging Invest-

ments, as the owner of more than 30% of the securities

with voting rights of VPK PACKAGING GROUP NV at 20

February 2008 made a notification to both the company and

the Belgian Banking, Finance and Insurance Commission

(Commissie voor het Bank-, Financie- en Assurantiewe-

zen – CBFA) in accordance with article 74 § 6 of the law in

question. In this case, Stichting Administratiekantoor STAK

Packaging Investments indicated that it owned 7,199,999

shares (82.07%) in VPK PACKAGING GROUP NV and that

the four certificate holders together held more than 50% of

the share certificates and that they were acting by mutual

agreement.

The certificate holders are:

- Uni-Par NV, represented by Mr Pierre Macharis

- Perkament NV, represented by Mr Jean-Paul Macharis

- Unifin NV, represented by Mrs Anne Macharis

- Auriga Finance SA, represented by

Mr Christophe Blondeau

20

In the notification, it claimed legal exemption from making

a full takeover bid in the event where, as a consequence

of purchasing securities, an obligation to bid would have

existed on the basis of the implementation provisions of the

law of 1 April 2007.

•Corporate GovernanceThe information about corporate governance practices in

relation to the 2009 financial year was included in a Decla-

ration in respect of sound management and is included as a

separate chapter in the brochure. The Corporate Gover-

nance Charter of VPK Packaging Group NV to which the

Declaration refers is available on the company’s website.

• Other informationArticle 14 of the articles of association states that a

majority of the directors shall be appointed from among the

candidates put forward by the Dutch-registered Stichting

Administratiekantoor Packaging Investments, with its regis-

tered office at Raamsdonksveer, Netherlands, as long as it

directly or indirectly controls at least 35% of the shares of

the company.

Article 33 of the articles of association states that no

single participant at a general meeting may exercise more

than 35% of the number of votes attached to the whole

of the shares issued by the company. This restriction also

applies in the event that the shares of several shareholders

are combined in accordance with the criteria contained in

the transparency legislation.

These restrictions under article 33 are not applicable where

the voting relates to a change in the articles of association

or for decisions required to be passed by a special majority

under company law.

No securities have been issued to which special control

rights are attached.

There is no employee share plan either within VPK PAC-

KAGING GROUP NV or within any of its Belgian or foreign

subsidiaries.

Nor have any agreements been entered into between the

company and its managers and employees that provide for

payments to be made where as a result of a takeover bid,

the directors have to resign or are dismissed without valid

justification or the employment of any staff is terminated.

The board of directors has no knowledge of any sharehol-

ders’ agreements that could result in any restriction on the

transfer of securities and/or the exercising of voting rights,

nor of significant agreements that would change or expire

as a result of a takeover bid.

As a consequence of a change in the ar ticles of associa-

tion on 28 February 2008 the shares of the company can

be either nominal or dematerialised.

All members of the audit committee (see Corporate

Governance Statement) are non-executive directors, 2

of whom are independent. They all have the necessary

skills in the field of accountancy and audit.

BVBA Dimacor with its permanent representative

Mr Carl Verstraelen, as an independent non-executive

director, is chairman of the audit committee. Mr Carl

Verstraelen has an education as a handelsingenieur

(Master in Economics) and has extensive and exper t

experience as CFO including with the Lhoist group, the

Amylum group, Agfa Healthcare and currently with the

Balta group, Europe’s largest carpet group.

Conclusion

In conclusion we can state that 2009 was strongly im-

pacted by the economic crisis that star ted in the second

half of 2008. Despite this, VPK PACKAGING GROUP

NV achieved a robust result. This was due on the one

hand to its ver tical integration, its customer por t folio

especially within the food and Fast Moving Consumer

Goods sector, and a good geographical spread; and on

the other hand by the group’s focus on cost savings and

its prudent approach during this period. In addition, the

focused capital expenditure restrictions and additional

working capital improvements helped to fur ther streng-

then the already healthy balance sheet. 2010 will be

comparable to 2009, bringing additional challenges and

uncer tainties. Yet emboldened by the achievements of

21


2009, we face 2010 full of confidence and with enthusi-

asm and ambition.

Finally we would like to thank all our employees for their

ef for ts and contribution to the result.

Declaration by the responsible persons

In accordance with ar t 12§2, 3° of the Royal Decree of

14 November 2007, all members of the board of direc-

tors declare that, to the best of their knowledge, the

financial statements have been drawn up in accordance

with the applicable standards for financial statements,

and give a true and fair view of the capital, financial po-

sition and results of the company and of the companies

included in the consolidation, and that the annual repor t

gives a true and fair view of the company’s develop-

ment, the results of the business and the circumstances

of the company and the consolidated entities, as well

as containing a description of the principal risks and

uncer tainties with which it is confronted.

Aalst, 11 March 2010

Jean-Paul Macharis Pierre Macharis

chairman and CEO

managing director and chairman

of the executive committee

Denis Zenner Dirk Meeus

director independent director

BVBA Dimacor BVBA Jozef Schoonjans

independent director director

represented by its represented by its

permanent representative permanent representative

Mr Carl Verstraelen Mr Jozef Schoonjans

NV De Potterie BVBA ACPY

independent director independent director

represented by its represented by its

permanent representative permanent representative

Mr Michel Delbaere Mr Bruno Accou

22

5 VPK Packaging Solutions®

1.5

23


The packaging sector is an industrial service industry. We

aim for optimal collaboration with the customer, in terms

of both product development and service and quality.

Paper and board packaging occupy a prominent place

within the highly diversified packaging market. Their low

weight, versatility, durability, hygiene and cost-efficiency

make them ideal for a wide range of applications. Further-

more they have a favourable impact on the environment.

Paper and board packaging materials are effectively

renewable raw materials for new packaging.

Due to the fact that they are suitable for high-quality prin-

ting, packing goods in paper or board offers clear promo-

tional value for the customer. Packaging often determines

whether or not the consumer buys the product. It also

offers protection during transport and the logistics chain.

Thanks to our packaging the quality of the goods remains

intact. It is in the context of this two-fold creation of value

that we continuously innovate and develop new products

for new applications, especially in the sector of board

packaging for transport.

But that is by no means all. Next to that, we are a service

organisation, with special consideration for the specific

needs of the customer in terms of supply chain optimisa-

tion, just-in-time deliveries, Vendor Managed Inventories

(VMI) and Collaborative Planning, Forecasting and

Replenishment (CPFR). This total service to the custo-

mer is bundled together in the VPK Packaging Solutions®

concept.

As regards supply chain optimisation, we keep on investing

in Forward Logistic Integration (FLI). By exchanging infor-

mation on planning and inventories, we can optimise both

the customer’s inventory management and our production

costs. The enables us to better match orders, production

and inventories. The result is a win-win situation for both

parties: the need for working capital and storage space is

reduced, stock rotation and on-time deliveries are incre-

ased and there is less administrative overhead. Everything

is also constantly measured and evaluated, so that we can

make adjustments in good time, where necessary.

We are therefore also convinced that thanks to our wide

experience and successful implementation we can make

the difference for our current and future customers.

5 VPK Packaging Solutions®

24

6 Overview of activities1.6

25


6 Overview of activitiesPAPER SEGMENT

OUDEGEM PAPIER NV produces paper for packaging purpo-

ses from recycled paper and board. The paper produced is

partly used for the in-house production of board packaging

and partly sold to other paper processors.

VPK PACKAGING GROUP NV produced 374,000 tons of

paper in 2009.

COMPETITIVE POSITION

Through its Belgian subsidiary, OUDEGEM PAPIER NV, VPK

PACKAGING GROUP NV operates 3 highly specialised paper

machines in Dendermonde, Belgium: board for cores, Wel-

lenstof and Testliner.

OUDEGEM PAPIER NV has a production capacity of 450,000

tons.

We constantly strive for the production and delivery of

lighter paper products to make our net impact on the envi-

ronment becomes ever smaller.

In its production process OUDEGEM PAPIER NV uses energy

from sources such as combined heat and power units, as

well as biogas. The use of these energy sources as well as

other renewable sources will be extended in the future in

order to further reduce CO2 emissions.

Our paper mill in Selby (UK) operated until the end of 2008

and ensured the supply of raw materials to British cor-

rugated board plants. This facility was closed in January

2009 because it had become loss-making. The production

capacity of 70,000 tons on an annual basis was taken over

by the Dendermonde site.

SITES

OUDEGEM Papier NV Dendermonde (BE)

500

450

400

350

300

250

200

150

100

50

0

2005

2006

2007

2008

2009

Netto cash flow

425 427383 374

368

‘000 TONS VOLUME

27


CORRUGATED BOARD SEGMENT

486,000 tons of corrugated board were produced in 2009.

Corrugated board plays an important role in the logistics chain

as an efficient means of providing the best possible distribution

solution. Corrugated board meets the most varied demands of

the market, including stackability, shock resistance, resistance

to changes in climate and printability. It remains in many cases

the perfect choice, also because of its low cost and the mode-

rate production cost. Corrugated board is moreover the ideal

medium for printing promotional communication.

Corrugated board is our most important end product and key

growth driver thanks to our strong presence in the European

market and our high level of service.

COMPETITIVE POSITION

We are enhancing the service we offer to our customers through

total logistics packaging concepts, high quality printing and new

product developments. This total customer service is bundled

together as the VPK Packaging Solutions concept, which further

strengthens the market position of VPK PACKAGING GROUP NV.

For strategic reasons, in order to be able to continue to play its role

in a fast-changing European packaging market, VPK PACKAGING

GROUP NV together with Klingele Papierwerke GmbH & Co KG

(Germany), Rafael Hinojosa SA (Spain) and Mauro Benedetti SpA

(Italy) established in 2006 a European Economic Interest Grouping

called Blue Box Partners.

From a commercial perspective Blue Box Partners represents a

combined production capacity of 2.2 million m². This enables Blue

Box Partners to position itself on the European market as one of the

most important partners for the production and delivery of packa-

ging for manufacturers of “fast moving consumer goods”.

SITES

We have 13 integrated corrugated board factories in Benelux,

France, Great Britain, Poland and Romania.

In Belgium, SAUCAS Europe POS NV is a producer of sales pro-

motion displays and packaging, mainly using corrugated board,

providing synergies with the existing corrugated board factories.

SAUCAS Europe POS NV has been based in Aalst since 2009.

In France, ONDULYS RÉFÉRENCE SAS is the ideal logistics part-

ner as a ‘one-stop’ shop for specialised packaging.

The activity of the “Charta” division of RIGID CONTAINERS Ltd.

was transferred to a new English company, named RIGID ASTON

Ltd, at the end of January 2010, in which an English industrial

partner holds a minority stake.

RIGID ASTON Ltd., whose registered office is in Aston (close to

Birmingham), produces “single face” corrugated board that is

used as a packaging material for items such as window frames

and radiators.

We also have 3 corrugated board processing factories (“sheet-

plants”) in France where bought-in corrugated board sheets are

processed into specialised packaging.

VPK PACKAGING NV Dendermonde (BE) Aalst (BE)VPK Packaging BV Raamsdonksveer (NL)SAUCAS Europe POS NV Aalst (BE)ONDULYS LILLE SAS Lille (FR)ONDULYS TAILLEUR SAS Parijs (FR)ONDULYS ANDELLE SAS Fleury-sur-Andelle (FR)ONDULYS INDUSTRIE S.A.S. Lisieux (FR)ONDULYS SAINT QUENTIN SAS Saint-Quentin (FR)ONDULYS REFERENCE SAS Parijs (FR)ONDULYS ROYE SAS Roye (FR)ONDULYS LIANE SAS Boulogne (FR)ONDULYS GHEYSENS SAS Tourcoing (FR RIGID CONTAINERS Ltd. Selby (York) (GB) Desborough (Northampton) (GB)RIGID ASTON Ltd. Aston (GB)AQUILA Sp.z o.o. Wrzesnia (PL)AQUILA RADOMSKO Sp.z o.o. Radomsko (PL) (as from April 2009)SC VPK PACKAGING srl. Salonta (RO)

‘000 TONS

600

500

400

300

200

100

0

2005

2006

2007

2008

2009

313345

390

486

412

® ®

VOLUME

29


SPECIALTIES SEGMENT

Within the segment specialties, two sub-segments have been

defined: solid board on the one hand, and cores and edge protec-

tors on the other hand.

SOLID BOARD

Twenty years after starting operations in Oudegem (Belgium),

from 1 January 2010 the Solid Board division of VPK PACKAGING

NV has been marketing its products under the European registe-

red brand name of Smart Packaging Solutions®, SPS abbreviated.

Smart Packaging Solutions® has an important place within the

Specialties segment as it complements the rest of the product

range of VPK PACKAGING GROUP NV. In cooperation with our

customers, we use solid board to produce the packaging that

best meets their specific needs.

Solid board is ideal for use in moist conditions, such as packaging

for meat, poultry, vegetables, foodstuffs in general and flowers.

It owes its resistance to damp to the production process in

which three or four layers of paper are glued together to make

them waterproof. Where desired the moisture resistance can

be increased further by additionally treating one or more layers.

The high print quality, with up to 6 colours, greatly enhances the

communicative properties of the packaging.

Because we have our own design office, Smart Packaging Solu-

tions® can respond quickly and efficiently to the ever-changing

needs of a fast-moving market. Moreover, our vertical integration

guarantees a large degree of independence from the raw materi-

als market, which translates into highly dependable delivery.

The business activities of R&F Folding Boxes, based in Meer (on

the Belgian-Dutch border) were acquired at the start of 2008. The

facility at Hoogstraten is capable of producing packaging with a

higher quality of printing (specifically offset) than the machines

at Dendermonde. This makes the Hoogstraten facility highly

complementary to the Dendermonde site.

Thanks to these advantages, sales volume grew in 2009 to

75,000 tons, making Smart Packaging Solutions® the number 2 in

its sector in Western Europe.

SITES

Smart Packaging Solutions, division of VPK PACKAGING NV Dendermonde (BE)

SMART PACKAGING SOLUTIONS NV Hoogstraten (BE)

‘000 TONS

90

80

70

60

50

40

30

20

10

0

46 4857

7566

2005

2006

2007

2008

2009

www.smart-packaging-solutions.com

VOLUME

31


‘000 TONS

120

100

80

60

40

20

0

54

9399

9297

CORES AND EDGE PROTECTORS

Parallel wound cores are used for rolling up textiles and floor

coverings. Spiral wound cores are more technically complex

and have applications in the paper, film, textile and aluminium

industries and in highly diversified industrial applications.

Edge protectors are used in agriculture and industry, to improve

the protection of products stacked on pallets.

COREX® is successful in production and marketing at the top

segment of the cores market: smooth cores for the foil industry,

cores with a barrier material for the food industry and cores with

a soft recyclable felt layer for the steel industry.

Our eleven production sites, with a total capacity of 100,000

tons, supply the key markets in Europe, namely Great Britain,

Scandinavia, Germany, France, Benelux, Poland, the Czech Repu-

blic, Hungary and Romania.

Furthermore, the cores division in Belgium has its own research

and development team, for new applications and products.

COREX® also continued to grow within the European market for

cores in 2009.

2005

2006

2007

2008

2009

www.corexgroup.com

SITES

COREX Belgium NV Deerlijk (BE)COREX Depauw NV Harelbeke (BE)COREX Nederland BV Almelo (NL)COREX France SA Lille (FR)COREX UK Huyton (GB)COREX Luxembourg SA Differdange (LU)COREX Czech sro. Vyskov (CZ)COREX Polska Sp.z o.o. Swiecie (PL)COREX Nordic AS Hommelvyk (NO)COREX Deutschland GmbH Bocholt (DE)SC COREX Romania srl. Salonta (RO)

VOLUME

32

7 Highlights of 2009 Outlook for 2010

1.7

January 2009

Closure of RIGID PAPER Ltd. (UK)

On 9 January 2009 the paper machines of RIGID PAPER

Ltd. were shut down. The paper mill at Selby had to close

because it was no longer profitable.

The production capacity of RIGID PAPER Ltd., which

amounted to 70,000 tons per year, was replaced by the

rebuilt paper machine at Dendermonde (Belgium) which now

has a production capacity of 450,000 tons per year.

February 2009

Takeover of Mondi Packaging Saint-Quentin SAS

(France)

At the end of February 2009, ONDULYS EMBALLAGES

SAS, a French subsidiary of VPK PACKAGING GROUP NV,

acquired the shares of Mondi Packaging France SAS,

a corrugated board factory based at Saint-Quentin (France).

The factory at Saint-Quentin produces 100 million m²/year

of customised corrugated board packaging, mainly for the

food industry and FMCG sector, and achieved sales of

€ 34 m in 2009. As a result, the combined French ONDULYS

companies realised € 186 m of sales in 2009.

April 2009

Start-up of a new corrugated board line at Radomsko

(Poland)

Our Polish operation based at Wrzesnia (close to Poznan)

has succeeded in building up significant market share since

2006 as a “sheet feeder”, under the AQUILA brand. As a

result, the establishment of a second factory was needed.

A modern new factory building was constructed on an

industrial estate at Radomsko, located 250 km southwest

of Warsaw.

The investment in the expansion of our Polish activities

amounted to € 18.3 m.

December 2009

Installation of solar panels on the factory roof at

Aalst and Deerlijk (Belgium)

In December, solar panels installed last summer on the

factory roofs at Aalst and Deerlijk, were put into service.

These solar panels are capable of producing 1.8 mega-

watts of “green” electricity, primarily to be used locally for

in-house requirements. This “green” investment, which is

made together with an external partner, amounted to

€ 7.5 m and will deliver savings in electricity costs over

the next 20 years. This investment can be linked with other

“green” investments such as the biogas generators and

combined heat and power facility in our factory at

Dendermonde.

EVENTS AFTER 31 DECEMBER 2009

Smart Packaging Solutions® brand to be used by the

Solid Board division of VPK PACKAGING NV (Belgium)

Twenty years after the start of production of solid board

packaging at Oudegem, the Solid Board division of VPK

PACKAGING NV at Oudegem decided from 1 January 2010

to henceforth market its products under the European regis-

tered brand of Smart Packaging Solutions®.

With the acquisition of the business activities of R&F

Folding Boxes based at Meer (Belgium) in January 2008

and a further increase in market share, Smart Packaging

Solutions® has grown to the number 2 in the solid board

packaging sector in Benelux.

Smart Packaging Solutions® has a production capacity of

80,000 tons per year.

Autonomy given to the “single face” division of RIGID

CONTAINERS Ltd. (GB)

The activity of the “Charta” division of RIGID CONTAINERS

Ltd. was transferred to a new English company, named

RIGID ASTON Ltd, at the end of January 2010, in which an

33


7 Highlights of 2009 Outlook for 2010

English industrial partner holds a minority stake (35%).

RIGID ASTON Ltd., whose registered office is in Aston

(close to Birmingham), produces “single face” corrugated

board that is used as a packaging material for items such

as window frames and radiators.

The objective of RIGID ASTON Ltd. for 2010 is to achieve

sales of € 5 m.

OUTLOOK FOR 2010

The crisis, that started in the second half of 2008 as a

result of the global financial crisis, continued and deepened

in 2009. While the low point of the financial crisis occurred

at the end of 2008, the impact on the real economy was not

really felt until the start of 2009.

Consumer confidence did not begin to recover until the

second half of 2009 and the stability within the financial

markets gave rise to a modest recovery in business confi-

dence. Nevertheless many businesses remain prudent and

are focusing on cost savings and debt reduction.

2010 is undoubtedly going to be a difficult year.

There has been a slight recovery in demand for paper but

a sharp increase in recycled paper prices will force us to

operate with reduced margins for some time until cost

increases can be passed on to the final customer.

Certainly the first half of 2010 will therefore be charac-

terised by strong margin pressure within the packaging

segment.

For the future, we remain confident both of our strategy as

a service-oriented group that creates packaging solutions

for its customers with increasingly higher added value and

of our core activities. The packaging that we produce every

day protects the valuable goods of our customers.

We recycle the paper and cardboard mountain that is gene-

rated daily into high-value packaging.

This sustainable business model will also remain the basis

for our further growth in the future.

Our strong financial structure and profitability are major

advantages in facing an environment where there is tough

competitive consolidation of the market.

2010 once again offers challenges but we face them with

great confidence and enthusiasm.

34

LISTING

On 9 April 1999 the shares of VPK PACKAGING GROUP

NV (VPG) were listed on the Cash Market, double fixing

of the Brussels stock exchange, at a rate of € 29. Since 24

March 2000 the shares have been traded on the Continuous

Market.

BRUSSELS STOCK EXCHANGE AND THE VPG SHARE

PRICE IN 2009

The VPG share price increased by 11.0% during the year of

2009. The closing price at the end of December 2009 was

€ 23.85, while it stood at € 21.49 at the end of December

2008. The recovery of the VPG share price did not keep

pace with the general improvement in share prices wit-

nessed in 2009. For comparison, the Bel-20 grew by more

than 30% over the same period.

The VPG share price reached its lowest point during 2009

on 30 January. It then fluctuated between € 18 and € 20.

From the second half of August, the share price averaged a

higher level, between € 23 and € 27. The maximum price in

2009 was achieved on 9 September (€ 27.01). The closing

price at the end of December was € 23.85.

At the end of 2009 the stock market capitalisation of the

company was € 209.2 m compared to € 188.5 m at the end

of 2008

DIVIDEND

Since its stock market launch, VPK PACKAGING GROUP NV

has adopted a consistent dividend policy that aims to foster

both a sound financial policy and appropriate reward for

shareholders. This is dependent on circumstances and the

company’s results, all in comparison with other companies

listed on Euronext Brussels.

In line with the above policy, and in view of the exceptional

circumstances affecting the results for 2008, no dividend

was paid in respect of the 2008 financial year. Considering

the robust results and the strong balance sheet, the board

of directors proposes, in respect of the 2009 financial year,

to fix the gross dividend at € 0.75 per share, representing

€ 0.56 net for ordinary shares (after deduction of the 25%

withholding tax), and € 0.64 net for VVPR shares (after

deduction of the 15% withholding tax). This is an increase

of 15.4% compared to the previous dividend paid over 2007

(€ 0.65) and results in a payout ratio of 25.1% compared to

19.2% over 2007.

The dividend will be payable as from 20 May 2010. This

enables the company to resume its dividend policy of incre-

asing the dividend each year, in the absence of exceptional

circumstances.

PURCHASE OF OwN SHARES

In 2009, in accordance with the articles of association and

company law rules, a subsidiary of VPK PACKAGING GROUP

NV purchased 66,212 of the company’s own shares. At 31

December 2009 we held a total of 606,209 of the com-

pany’s own shares in our portfolio (compared to 539,997 at

31 December 2008).

8 VPK Packaging Group NVshares

1.8

LISTED NYSE

EURONEXT SM

VPKB

35


8 VPK Packaging Group NVshares

9 Key figures per share1.9

Key figures per share

In EUR / share(1) 2009 2008 Change in %

EBITDA (2) 6.18 6.13 0.9%

EBIT (3) 1.75 1.39 26.0%

Equity 34.99 32.24 8.5%

Profit before tax 3.12 1.68 85.8%

Profit attributable to the owners of the parent company 2.98 2.38 25.6%

Net cash flow (4) 7.41 7.19 3.2%

Gross dividend(5) 0.75 0

Net dividend per ordinary share 0.56 0

Net dividend per VVPR share 0.64 0

Pay-out ratio 25.1% 0.0%

Maximum price 27.01 39.20 -31.1%

Minimum price 16.14 18.01 -10.4%

Price 31/12 23.85 21.49 11.0%

Price (31/12) / net profit 7.99 9.05

Price (31/12) / net cash flow 3.22 2.99

Average number of shares traded per month 12,722 21,202

Number of shares traded in each year 152,657 254,423

Number of shares per 31/12 8,772,742 8,770,716

Treasury shares per 31/12 606,209 539,997

Weighted average of shares outstanding 8,192,397 8,289,860

Market capitalisation at 31/12 in € m 209.2 188.5

(1) Compared to the weighted average of shares outstanding (after deduction of treasury shares)

(2) EBITDA = EBIT + depreciation + amortisation + write-downs + provisions

(3) EBIT = operating result

(4) Defined as net result + depreciation + amortisation + write-downs + provisions

(5) For 2009, dividend proposed to the ordinary general meeting of 30 April 2010

36

10 Corporate Governance Statement

1.10

From left to right

standing: Jozef Schoonjans, Guy Hanssens

sitting: Erik Peeters, Jean-Paul Macharis, Pierre Macharis

37


1 General

VPK PACKAGING GROUP NV has adopted a Corporate

Governance Charter and published it on its website

(www.vpkgroup.com).

This charter will be updated, in line with changes in the ap-

plicable legislation and the development of policy relating

to corporate governance.

In implementation of the Belgian Corporate Governance

Code, VPK PACKAGING GROUP NV approved the original

version of the Corporate Governance Charter on 15 Decem-

ber 2005.

The most recent modifications were approved by the board

of directors on 15 March 2010 and result from the revision

of the Belgian Corporate Governance Code in 2009 that is

applicable to financial years that start on or after 1 January

2009.

The charter underlines VPK PACKAGING GROUP NV’s

commitment to applying the principles of the Corporate

Governance Code and describes and explains the most

important aspects of VPK PACKAGING GROUP’s Corporate

Governance including the board of directors, the advisory

committees and the executive committee.

This report, which is part of the annual report, provides

factual information about the application of

VPK PACKAGING GROUP’s Corporate Governance. It also

contains detailed explanations of deviations from the provi-

sions of the Belgian Corporate Governance Code.

2 Management

2.1 Composition of the board of directors

Executive directors

(representatives of the reference shareholders)

Jean-Paul Macharis (°1955)

chairman of the board of directors

and managing director

Pierre Macharis (°1962)

CEO, chairman of the executive committee

BVBA Jozef Schoonjans

with permanent representative Jozef Schoonjans, (°1951)

director

Non-executive directors

NV De Potterie

with permanent representative Michel Delbaere (°1953)

managing director of Crops’s NV

independent director

BVBA DIMACOR

with permanent representative Carl Verstraelen (°1952)

CFO Balta Group


BVBA ACPY

with permanent representative Bruno Accou (°1961)

CEO London branches Dexia


Dirk Meeus (°1966)

managing partner Allen & Overy Belgium


Denis Zenner (°1976)

CFO UCB France

director

38

2.2 Composition of the executive committee (situation at 1 February 2010)

Pierre Macharis

chairman of executive committee, CEO

coordination and strategy group

coordination of Corrugated Board France, Great Britain

and COREX business units

Jean-Paul Macharis

group coordinator sales and investments

for corrugated cardboard

coordination of Corrugated Board Belgium and

Netherlands business units

coordination of Solid Board business unit

Erik Peeters, as permanent representative

of BVBA FinCoPro, CFO

Jozef Schoonjans, as permanent representative of

BVBA Jozef Schoonjans

audit, legal, M&A projects and risk management

Guy Hanssens, as permanent representative of BVBA 2B

investment projects, energy, environment, safety, IT,

logistics & supply chain management

coordination of Paper and Corrugated Board Central and

Eastern Europe business units

3 Compliance with the Belgian Corporate

Governance Code - Exceptions:

In 2009 the board of directors of VPK PACKAGING GROUP

NV complied with the principles enshrined in the Belgian

Corporate Governance Code with the exception of two

deviations that are explained hereafter.

• Exercisingoftheroleofchairmanoftheboardof

directors and that of managing director:

The Code prescribes that a clear distinction should be

maintained between responsibilities of the members of the

board of directors on the one hand and executive respon-

sibility, on the other. Therefore, in principle, one and the

same person cannot occupy the posts of chairman of the

board of directors and of managing director.

On the board of directors of VPK PACKAGING GROUP NV,

Mr Jean-Paul Macharis occupies both the post of managing

director and that of chairman of the board of directors.

This combination of posts results from the conviction of the

reference shareholder in VPK PACKAGING GROUP NV that

its interests in the group are best safeguarded when the

day-to-day management in the broadest sense of the word

is attended to, in both fact and law, by people with whom

direct or indirect family connections exist.

• Remunerationofmembersoftheboardofdirectors

and the executive committee:

One of the provisions of the Code is that, in its annual

report, the company should publish the individual amounts

of salary and any other benefits granted to the managing

director and, on an overall basis, the amounts of the remu-

neration and any other benefits granted to the members of

the executive committee.

The company considers that, by publishing the total of the

gross remuneration to the executive members of the board

of directors and the members of the executive committee, it

complies as closely as possible with the spirit of the Code’s

guideline without infringing upon the legally protected per-

sonal privacy of each director and member of the executive

committee.

4 BOARD OF DIRECTORS

The board of directors meets regularly, more specifically

it met on 13 March, 27 May, 27 August and 16 December

2009. The rate of attendance of the directors at these

meetings was 92%.

The directors received the agenda of each meeting be-

forehand, together with the requisite information on the

subjects to be discussed.

In accordance with article 18 of the coordinated articles

39


of association, resolutions of the board of directors are

passed by a simple majority. In 2009, all resolutions were

passed unanimously.


of association, the deliberations of the board of directors

were recorded in the minutes, which were signed by the

members in attendance.

The role of secretary of the board of directors was taken by

Mr Luc Ledegen, Sr Legal Manager VPK PACKAGING GROUP

NV. He performed this role at all meetings of the advisory

committees, except for the remuneration committee where

the role was fulfilled by BVBA Jozef Schoonjans, represen-

ted by its permanent representative, Mr Jozef Schoonjans.

No situations arose during the 2009 financial year in which

the board of directors had to apply the procedure of article

523 of the Companies Code in respect of conflicts of

interest.

Similarly, no conflicts of interest arose during the course of

2009 between VPK PACKAGING GROUP NV (including its

associated companies) and its directors, members of the

executive committee, that fall under the conflict of interest

rules of articles 523 and 524ter of the Companies Code.

5 ADVISORY COMMITTEES

Within the structure of the board of directors, the members

of the audit committee, the special committee for monito-

ring the Warrant Plan and the remuneration committee met

regularly.

These committees were established from the desire to

maintain the efficiency of decision-making, taking account

of the size of business and the relatively limited size of the

board of directors of VPK PACKAGING GROUP NV. It is for

this reason that the board of directors as a whole plays the

role of appointment committee.

The board of directors did not function as an appointment

committee in 2009.

The members of the various committees are listed below,

together with a summary of their composition, operation

and authority. For more details of these committees we re-

fer you to the charter that can be consulted on the website.

5.1 Special committee for monitoring the Warrant Plan

In February 1999, the annual general meeting resolved

to create a warrant plan for the benefit of executives,

members of management, and the board of directors of VPK

PACKAGING GROUP NV.

As a result, warrants can be allocated that provide

entitlement to subscribe to a maximum of 100,000 shares,

representing a maximum of 1.13% of the subscribed capital.

The object of this was to promote the long-term commit-

ment and motivation of management and to increase and

sustain the profitability of the group.

The final committee meeting was held on 16 February 2009.

During the final exercise period in January 2009, 16 warrant

holders exercised a total of 2,026 warrants.

This also brings the Warrant plan approved in February

1999 to a definite end. Consequently, the special committee

for monitoring the Warrant Plan no longer had any reason to

exist with effect from February 2009.

Composition and operation

The special committee for monitoring the warrant plan

consisted of two members

- Jean-Paul Macharis (chairman)

- Pierre Macharis

5.2 Remuneration committee

Composition and operation

The remuneration committee is made up of three members,

who are all independent non-executive directors.

The remuneration committee met once in 2009.

40

Members

- Dirk Meeus

- BVBA ACPY,

whose permanent representative is Bruno Accou

- BVBA DIMACOR,

whose permanent representative is Carl Verstraelen

(chairman)

Authority

The committee has an advisory role to the board of

directors. Hence, it makes general recommendations

concerning pay policy and, in particular, the remuneration

of the directors and auditors, as well as the members of the

executive committee.

The chairman of the executive committee has the right to

attend meetings of the remuneration committee except

when it is discussing his own evaluation.

5.3 Audit committee

The members of the audit committee of VPK PACKA-

GING GROUP NV are all non-executive directors, two of

whom are independent directors. Most importantly, they

all have the necessary skills in the field of accounting

and audit given their professional activities (outside the

board of directors).

The audit committee met three times during 2009 at the

invitation of the committee’s chairman.

The findings and recommendations of the auditor and of

the internal auditor were discussed on two occasions,

one of which was af ter the board of directors had drawn

up the financial statements, the consolidated financial

statements and abridged financial statements for the

2009 financial year for publication.

In the judgement of the board of directors, a discussion

of the findings twice per year is suf ficient.

Members

- BVBA DIMACOR,

with permanent representative Carl Verstraelen

(chairman)

- Denis Zenner

- Dirk Meeus

The audit committee has an advisory role to the board of

directors. The audit committee’s role is to assist the board

of directors in its supervisory duties in respect of the

internal control systems at VPK PACKAGING GROUP NV and

its domestic and foreign subsidiaries in the broadest sense,

including internal controls of financial reporting.

The role of the audit committee is determined by the

relevant legal provisions, supplemented by the instructions

of the board of directors, and is described in the corporate

governance charter.

6 EXECUTIVE COMMITTEE

The transfer of authority from the board of directors to the

executive committee, as resolved upon on 24 March 2003,

was approved by the extraordinary general meeting of 30

May 2003.

In practice, the following areas fall under the authority of

the executive committee:

- development of strategy and long-term objectives,

which are submitted to the board of directors for

approval;

- execution of strategy (translation into plans,

firming up objectives);

- monitoring budgets and directing investment plans;

- control and coordination of the various activities

and subsidiaries within the group;

- managing internal control;

- coordination of the Business Unit Managers;

- identifying and realising group synergies;

- developing new activities within the core activities;

- proposing potential acquisitions to the board of

directors.

The executive committee met on average twice per month

during 2009. All members were present at all meetings.

41


There were no transactions between VPK PACKAGING

GROUP NV and the members of the executive commit-

tee that conflicted with the interests of VPK PACKAGING

GROUP NV.

The board of directors’ meeting of 11 March 2010, in

accordance with the general provisions concerning the

executive committee, and based on the supervision of the

executive committee’s main activities until 31/12/2009,

granted a discharge to the members of the executive

committee.

Day-to-day management


of association, the board of directors charged Jean-Paul

Macharis and Pierre Macharis, who both hold the title of

managing director, with the day-to-day management of

the company.

In accordance with the provisions of article 23 of the

coordinated articles of association, Business Unit Managers

have been appointed who are responsible for their Business

Units as profit centres. Within specified budgets, they have

full responsibility, together with their staff, for their income

statements.

Budgets for ROI targets, investments and intra-group sup-

plies are set annually at group level.

7 REMUNERATION REPORT

This report gives practical information about the remu-

neration policy carried out in the 2009 financial year and

refers for the procedures relating to the development of a

remuneration policy and the setting of the remuneration

level to appendix 1 of VPK PACKAGING GROUP’s corporate

governance charter.

7.1 Remuneration for directors

For the 2009 financial year, each director received a fixed

salary, which was not performance-related, of € 2,500

(not including VAT) per meeting of the board of directors at

which he was effectively present.

Where in addition, he is a member of the audit committee,

the director received a fixed remuneration of € 5,000 (not

including VAT) regardless of the number of meetings of the

audit committee that take place in a financial year.

A member of the remuneration committee is entitled to

an additional remuneration of € 1,000 (not including VAT)

per meeting of the committee at which he is effectively

present.

The board of directors will propose to the general meeting

to keep the remuneration unchanged for the 2010 financial

year.

7.2 Remuneration of the members of the executive committee

The executive directors and the most important members of

management are rewarded for their management activi-

ties by means of a fixed salary and a variable bonus, with

ceiling, which is based on their individual performance and

the financial results of VPK PACKAGING GROUP NV and its

subsidiaries.

Where a member of the executive committee is also an

executive director, account is taken of the remuneration he

receives in that capacity

In 2009, the total gross remuneration of the six members

of the executive committee working in VPK PACKAGING

GROUP NV on 31/12/2009, including the fixed and variable

remuneration for their management activities in

VPK PACKAGING GROUP NV and its subsidiaries, was

€ 1,519,000. The fixed portion of this amounted to

€ 1,374,000, and the variable portion was € 145,000.

Total remuneration paid to non-executive directors was

€ 71,000.

42

7.3 Additional information

VPK PACKAGING GROUP NV has not given any advances,

loans or guarantees to directors, managers or supervisory

bodies.

The composition of the executive committee remained

unchanged in 2009. At the start of 2010 Mr Piet Van Acker

resigned his mandate in the framework of an early retire-

ment scheme. The settlement was drawn up in accordance

with legal and customary norms, and took account of his

role and responsibilities within VPK PACKAGING GROUP

NV. Mr Piet Van Acker was business unit manager Paper

and was also responsible within the executive committee

for the Corrugated Board GB business unit.

No contractual arrangement was agreed on or after 1 July

2009 with the chairman of the executive committee or any

other member of the executive committee that provides

for compensation for loss of office that is higher than an

amount equal to the basic and variable remuneration over

12 months.

No shares, share options or other rights to acquire shares

were granted to the managing directors or members of the

executive committee in 2009.

8 Protocol for preventing abuse

of insider knowledge

On 1 March 1999 the board of directors approved a

‘Protocol for preventing abuse of insider knowledge’

relating to transactions in company securities on their own

account by directors, members of management, executives

and other designated persons, called “insiders”.

This protocol was amended and modified in accordance

with the law of 2 August 2002, as amended by the Pro-

gramme Act of 22 December 2003, which applies to all acts

that may be perpetrated after 31 December 2003.

The protocol imposes restrictions on carrying out dealings

in the company’s securities during specific periods before

publication of the financial results, ‘closed periods’, and

during all other periods deemed to be sensitive, ‘frozen

periods’.

Every ‘insider’ who qualified in this context has (again)

signed the amended protocol. A blank copy of this protocol

can be viewed on the website.

Supervision of compliance with the rules contained in the

Protocol is entrusted to Messrs Pierre Macharis (managing

director), Jozef Schoonjans and Luc Ledegen (company legal

adviser), who have been appointed as “compliance officers”

by the board of directors.

In 2009, the compliance officers were not informed by

any “insider” of transactions that were performed in the

company’s securities.

9 Statutory auditor

Grant Thornton, Lippens & Rabaey BVCV, the Belgian Mem-

ber Firm of Grant Thornton International, represented by

Mr Stefaan Rabaey, whose registered office is at Lievekaai

21, 9000 Ghent, was reappointed as auditor for a period

of three years at the ordinary general meeting of 25 April

2008. The mandate ends at the 2011 annual general mee-

ting.

During the 2009 financial year, remuneration paid to the

statutory auditor and associated parties amounted to

€ 119.900 (not including VAT), exclusively for the statutory

audit. Moreover, the auditor and associated parties charged

fees amounting to € 3.250 (not including VAT) for other

audit assignments and € 24,095 (not including VAT) for non-

audit services.

43


44

HUMAN RESOURCES

At the start of 2009, the consequences of the internati-

onal economic and financial crisis affected the employ-

ment of staff within some divisions van VPK PACKAGING

GROUP NV.

Measures were urgently required to bring labour costs,

which along with energy costs account for a significant

share of production costs, under control in line with the fall

in volumes:

• productionactivitiesinanumberofBelgianand

foreign production sites was organised in a changed

team system;

• anumberofsmallreorganisationswerecarriedoutat

OUDEGEM PAPIER NV (Belgium);

• newagreementsweremadeinrespectofleave

planning and overtime;

• theprocedureinrespectofcompanycarsinBelgium

was reviewed;

• trainingrelatingtopersonaldevelopmentwas

restricted. Any required job-related training obviously

continued unchanged.

These measures have also ensured that more far-reaching

restructuring was not necessary. Arrangements in respect

of temporary lay-offs could also be used in Belgium.

For Belgium, a 2-year collective labour agreement was

concluded that falls within the terms of the Interprofes-

sional Agreement in terms of content, for both direct and

indirect staff.

The job classification for direct workers was completed in

2009. All weightings were approved and discussions were

started about a modification of the salary system. We

hope to be able to complete phase 1 of these discussions

in 2010 in a positive manner. A second phase, in which the

possibility of introducing competencies into the system, will

be started in 2010 with the aim of reaching a final position

in 2011.

As regards job classification for indirect staff, there was

little activity in 2009 but the preparation of organisation

charts and job descriptions is at the top of the agenda for

2010.

The acquisition of the corrugated board factory at Saint-

Quentin (FR) brought with it the integration of 150 new

colleagues within the ONDULYS group.

The closure of the paper factory at Selby (GB) resulted in

the compulsory departure of 87 staff, four of whom found

work at the neighbouring corrugated board factory of RIGID

CONTAINERS Ltd.

The “single face” activities of RIGID CONTAINERS Ltd. that

were transferred to a joint venture company, RIGID ASTON

Ltd., resulted in the transfer of activities from Selby to

Birmingham as a result of which 23 employees at Selby lost

their jobs. On the other hand, ten new jobs were created at

Birmingham and the aim is to double the number of employ-

ees, on condition that the joint venture is a success.

In March 2009 the second Polish sheet plant at Radomsko

(Poland) started operations with a team of 20 employees.

At the end of 2009 a three-team system was introduced

and resulted in 60 new jobs being created. Partly as a result

of thorough and intensive staff training, this second Polish

production site was capable in less than a year of producing

8m m² sheets per month.

All Belgian and foreign companies within the VPK PACKA-

GING GROUP NV continued to organise training for their

employees in 2009, although it was conscientiously ensured

that any training related to the role of the employees

concerned.

VPK PACKAGING GROUP NV had 3,121 members of staff at

the end of 2009, which is 5.8% higher than last year. This

increase is primarily attributable to the acquisition of a

corrugated board factory in Saint-Quentin (FR) at the start

of 2009.

11 Employment report 1.11

45


11 Employment report

SAFETY

VPK PACKAGING GROUP NV makes huge efforts to create

and maintain a safe working environment for its employees.

Measuring is knowing. In order to compare the different

departments and/or production sites within VPK PACKA-

GING GROUP NV with each other, the number of accidents

was divided by the number of hours worked, to give what is

known as the frequency figure.

Falling frequency figures were recorded during the period

2002 - 2007. From 2007 the frequency figure started to rise

again. This increase is in sharp contrast with the effort

made and the resources invested. But a causal analysis of

the accidents made clear that numbers do not tell the whole

story and that it is extremely difficult to keep recording low

figures year after year.

Nevertheless the management of VPK PACKAGING GROUP

NV remains convinced that the existing safety policy should

be pursued and that the increase in the frequency figure is

only of a temporary nature.

In order to ensure that all Belgian and foreign sites of

VPK PACKAGING GROUP NV operate a safety policy that

is both consistent and of a high standard, someone with

wide experience in the paper and cardboard industry was

appointed in 2008 to the role of “Group Safety Manager”.

This will ensure the effective dissemination of expertise

and learning points throughout the various production sites

within VPK PACKAGING GROUP NV.

Specifically in respect of Belgium, changes were imple-

mented in the final quarter of 2009 to the structure of the

internal prevention service. The internal prevention adviser

(appointed for the production sites at Dendermonde,

Erembodegem and Meer) determines the safety policy to

be followed, together with the Safety Steering Group, and

ensures the execution of group-level tasks. Furthermore,

local prevention staff are appointed as a point of contact

within each department and who are responsible for the

translation of the clearly defined safety policy into concrete

actions.

The Belgian corrugated board division implemented OEE

(Overall Equipment Effectiveness) in 2009. Tidiness and

cleanliness, food safety, quality and productivity were

significantly improved while safety at work undoubtedly

also benefited. In 2010 the principles of BBS (Behaviour

Based Safety) will be linked to the already existing OEE

programme.

OUDEGEM PAPIER NV is placing its emphasis in respect

of safety in 2010 on analysing tasks and installations and

taking initiatives in respect of safety training and communi-

cation. Apart from these themes, the safe conversion of the

press section of paper machine 6 (PM6) at Dendermonde in

the second half of 2010 will pose a significant challenge.

46

12 Environmental policy12.1

As a paper producing business, OUDEGEM PAPIER NV has

a significant potential impact on its direct environment,

partly due to the presence of a neighbouring residential

area within a very short distance.

Paper production requires large volumes of process water

that is heavily burdened organically. This can lead to odour

pollution.

The extension of the water purification facility with the

installation of a second anaerobic reactor was further

optimised during 2009. In this way, OUDEGEM PAPIER

NV succeeded in reducing the concentrations of organic

compounds in the process water recycling system. The pos-

sible odour pollution from internal water circuits is thereby

largely remedied.

The biogas produced in these reactors is additionally used

as fuel for the combined production of heat and electricity.

In 2009, OUDEGEM PAPIER NV, in consultation and agree-

ment with local residents and the supervising authorities,

took new actions to further reduce possible odour and noise

pollution.

By locating 2 new muffled steam outlets centrally on

the site, it also reduced the noise pollution of the energy

department for local residents. The removal of the cyclone

and the installation of a system of conveyor belts for remo-

ving paper snippings in the corrugated board department

at Dendermonde, has resulted in a further reduction of

possible noise pollution and a significant saving of primary

energy.

OUDEGEM PAPIER NV likewise undertook in 2009 to cover

up other potential major sources of noise, and to clean and

wash the air from these buildings.

Energy-efficiency measures included in the approved

energy plan were developed further in 2009. Following their

implementation, OUDEGEM PAPIER NV will be one of the

most efficient facilities in the world for the production of

packaging paper.

Through the further optimisation of the incineration facility

for recycling residues (wood, textiles, plastic), OUDEGEM

PAPIER NV succeeded in producing 5,000 tons less waste.

The residues come from the old paper and cardboard that

47


12 Environmental policyare used as raw materials for paper production.

The flue gas cleaning system, which has been brought into

use together with the incinerator facility, has ensured a

continuing reduction in the emission of pollutants into the

air. Emissions of SO2 have been reduced by 80%, NOx by

65% and there is 95% less dust. Using the recycling resi-

dues as a fuel in our energy generator furthermore results

in a significant reduction in greenhouse gas emissions.

OUDEGEM PAPIER NV has set itself the target of valorising

all remaining residues and eliminating deposits completely.

All energy would then be used in the production process

under the form of steam and electricity.

In 2008 the environmental care system of the energy

department was certified by a body accredited under the

ISO 14001 standard. During 2009 the system was further

optimised and improvements were implemented.

At the end of 2009 an alliance was set up with the aim of

locating a solar energy facility on the sites at Aalst and

Deerlijk with a combined annual capacity of 1800 MWh.

The solar panels will be installed on the factory roofs and

the green energy will be used locally in the production

process.

VPK PACKAGING GROUP NV aims to continue to set the

standard for sustainable enterprise. It intends, in operating

and developing all its activities, to minimise its impact on

the environment at all times, in compliance with applicable

environmental legislation, continuing respect for quality of

life, the safety of the environment and the economic goals

it has set itself.

48

Logistics

For a service-oriented organisation such as VPK PACKA-

GING GROUP NV, Logistics and Supply Chain Management

are important links in the business-to-business (B2B)

relationship with the market for Fast Moving Consumer

Goods, among others. In this typically customer-specific

Make-To-Order market, we distinguish ourselves from our

competitors by being suppliers of high-quality packaging in

Corrugated and Solid Board.

Both internal and integrated logistics projects have been

implemented or are ongoing, and are helping us to streng-

then our strategic partnerships with our customers.

As part of this, we are actively optimising the business-

to business (B2B) supply chain with our customers. This

optimisation process is known to our customers as the FLI®

model (Forward Logistic Integration), and aims to create

added value in the supply chain between us, as supplier,

and our customers, in the form of cost savings in inventory

value and inventory cover, calculating the best possible pro-

duction and order quantities and avoiding specific service

costs (cost-to-serve). With these types of logistics integra-

tion projects, VPK PACKAGING GROUP NV is demonstrating

that, in a constructive partnership with its customers, in

addition to producing the packaging product itself, the

initial goals of added value can also be achieved. This is the

guiding principle for VPK Packaging Solutions®.

VPK PACKAGING GROUP NV recognises the strategic

importance of this market-based approach, and is fully

occupied with implementing an extensive Business Process

Reengineering project in all its departments.

One example is centralising logistics control of transport in

Belgium with the aim of limiting the number of empty kilo-

metres driven. In this manner, VPK PACKAGING GROUP NV

is continuing to work on reducing its ecological footprint.

business Process Reengineering

VPK PACKAGING GROUP NV constantly strives to optimise

and adjust its processes to an ever-changing market. The

assessment and adjustment of these processes is called

‘Business Process Reengineering’ (BPR). One of the first

steps in this process was the implementation of SAP in

several of our Business Units.

This project focuses on six priorities:

1 standardising, rationalising, streamlining and

simplifying data, procedures, business processes,

administration and reporting, with a view to further

professionalisation of our staff

2 compliance with external requirements: as a listed

company, we recognise our external obligations to our

shareholders including reporting under IFRS

(International Financial Reporting Standards)

3 our customers and customer service: besides the

added value of the packaging product itself, as a

service organisation we recognise the added value

of an excellent service level for our customers.

With a stable backbone for FLI®, we create not

only a competitive advantage for our business units,

but also, most importantly, deliver the intended

added value for our customers

4 “new economy” is also a major challenge and an

opportunity for the future in its market segment

5 as a lean and mean organisation, further cost

efficiency and cost control measures are of vital

importance. The BPR project will mainly involve

further streamlining and optimising the group’s

financial processes

13 Logistics - Business Process Reengineering

1.13

49


6 all business units go through the same process,

so that we are able to exploit group synergies to

the full, in terms not only of content but also

of project cost

The result of this relentless approach is that all the group’s

business units are now connected to the SAP system for

financial reporting.

All operational units within the Specialties segment are

currently running on SAP. The Corrugated Board segment

currently runs SAP in Poland, Romania and Belgium.

The BPR project is not limited to just the implementation of

SAP. VPK PACKAGING GROUP NV is constantly optimising

working procedures in other areas too. Independently

from the ERP system, budgets are always available for

the streamlining and improvement of the production and

logistics processes. This translates into projects with

names such as OEE (Overall Equipment Effectiveness), Lean

Manufacturing, MPS (Master Production Schedule), S&OP

(Sales and Operations Planning), Transport Optimisation,

Self Billing, etc.

In 2010, the aim is the optimisation of the existing SAP im-

plementation and the further roll-out of on-going projects.

13 Logistics - Business Process Reengineering

50

II

II Financial overviewII

II.1. Consolidated financial statements closed per 31 December 2009

II.1.1. Consolidated statement of financial position 52

II.1.2. Consolidated income statement and statement of comprehensive income 54

II.1.3. Consolidated statement of changes in equity 56

II.1.4. Consolidated statement of cash flows 58

II.1.5. Notes to the consolidated financial statements 61

II.1.5.1. Information on the company 61

II.1.5.2. Declaration of conformity 62

II.1.5.3. Changes in accounting principles and application of recent IFRS changes 62

II.1.5.4. Summary of the main accounting principles 64

II.1.5.5. Consolidation scope 72

II.1.5.6. Segment reporting 76

II.1.5.7. Goods and services 80

II.1.5.8. Employee expenses 80

II.1.5.9. Impairment losses on goodwill and/or fixed assets 81

II.1.5.10. Other operating expenses 82

II.1.5.11. Result on disposal of subsidiaries/activities 82

II.1.5.12. Financial result 83

II.1.5.13. Income taxes 83

II.1.5.14. Result per share 85

II.1.5.15. Acquisition and disposal of subsidiaries 85

II.1.5.16. Intangible assets 88

II.1.5.17. Goodwill 90

II.1.5.18. Property, plant and equipment 91

II.1.5.19. Other financial assets available for sale 93

II.1.5.20. Interest bearing loans and receivables 94

II.1.5.21. Inventories 94

II.1.5.22. Trade receivables 95

II.1.5.23. Other current assets 96

II.1.5.24. Cash and cash equivalents 96

II.1.5.25. Financial instruments 97

II.1.5.26. Financial risk management 98

II.1.5.27. Share capital 101

II.1.5.28. Provisions 106

II.1.5.29. Employee benefit obligations 107

II.1.5.30. Deferred tax assets and liabilities 111

II.1.5.31. Interest-bearing liabilities long and short term 112

II.1.5.32. Other current liabilities 113

II.1.5.33. Events after balance sheet date 113


51

II.1.5.34. Contingent assets and liabilities 114

II.1.5.35. Related party transactions 114

II.1.5.36. Remuneration of the members of the board of directors and the executive committee 114

II.1.5.37. Information on the auditor 115

II.1.5.38. Statement of responsible persons 115

II.2. Auditor’s report 116

II.3. Abridged statutory financial statements VPK PACKAGING GROUP NV 118

II.3.1. Income statement 118

II.3.2. Balance sheet after result appropriation 119

II.3.3. Accounting principles 122

II.3.3.1. Basic principle

II.3.3.2. Special rules

II.4. Proposals to the ordinary general meeting 124

II.5. Financial calendar 126

II.6. Financial addresses 128

52

II

II.1 CONSOlIDATED FINANCIAl STATEmENTS ClOSED PER 31 DECEmBER 2009 1.1 I.1.1. CONsOlIDAteD stAtemeNt OF FINANCIAl POsItION

in EUR Notes 31/12/09 31/12/08

NON-CURReNt Assets Intangible assets 16 3,262,450 3,438,839 Goodwill 17 7,889,578 10,889,578 Property, plant and equipment 18 315,156,379 300,133,535 Financial assets available for sale 19 330,533 302,563 Interest bearing loans and receivables 20 777,459 37,499 Deferred tax assets 30 4,219,442 1,638,279tOtAl NON-CURReNt Assets 331,635,841 316,440,293

CURReNt Assets Inventories 21 59,111,433 56,197,878 Trade 22 71,341,327 94,585,237 Income Taxes receivable 13 1,398,387 231,249 Other current assets 23 12,098,389 10,244,054 Cash and cash equivalents 24 24,778,587 22,961,946 tOtAl CURReNt Assets 168,728,123 184,220,364 tOtAl Assets 500,363,964 500,660,657


53

in EUR Notes 31/12/09 31/12/08

eQUItY Share Capital 27 21,145,604 21,110,254 Share Premium 37,560 37,560 Translation reserves -6,439,505 -3,344,557 Redeemed own shares 27 -16,164,762 -14,809,432 Reserves 287,934,877 263,573,321 equity attributable to equity Holders of the Parent 286,513,774 266,567,146 Non Controlling interests 127,133 715,102 tOtAl eQUItY 286,640,907 267,282,248 NON-CURReNt lIABIlItIes Provisions 28 2,737,612 2,574,703 Employee benefit obligations 29 14,512,787 10,591,171 Deferred tax liabilities 30 20,652,359 21,007,379 long term debt net of current portion 31 62,436,790 63,398,038 Other non current liabilities 19,572 104,570 tOtAl NON-CURReNt lIABIlItIes 100,359,120 97,675,861 CURReNt lIABIlItIes Short term loans and borrowings 31 30,088,459 64,672,729 Provisions 28 104,000 206,929 Trade and other payables 47,972,537 46,010,126 Renumeration and social security costs 8 15,143,543 13,321,016 Income Taxes liabilities 13 3,693,481 101,614 Other current liabilities 32 16,361,917 11,390,134 tOtAl CURReNt lIABIlItIes 113,363,937 135,702,548

tOtAl eQUItY AND lIABIlItIes 500,363,964 500,660,657

54

II

II. 1.2 CONSOlIDATED INCOmE STATEmENT AND STATEmENT OF COmPREhENSIvE INCOmE

INCOme stAtemeNt

in EUR Notes 31/12/09 31/12/08

Operating income 522,183,833 571,135,266 - Sales 520,458,790 569,564,756 - Other operating income 1,725,043 1,570,510Operating expenses -507,939,211 -558,262,387 - Raw materials and consumables -216,280,243 -255,228,178 - Goods and services 7 -121,176,522 -132,753,807 - Employee expenses 8 -129,759,389 -123,642,612 - Salaries and wages -127,193,607 -123,126,062 - Provisions Benefit plans 29 -2,565,782 -516,550 - Depreciation and amortisation 16/18 -28,711,252 -32,432,552 - Impairment losses on goodwill and/or fixed assets 9 -4,156,381 -3,590,294 - Impairment losses on inventories and trade receivables 21/22 -949,790 -959,683 - Provisions 28 60,224 -1,799,505 - Other operating expenses 10 -6,965,858 -7,855,756Result on disposal of fixed assets (1) 64,102 -1,383,924 Operating result (eBIt) 14,308,724 11,488,955 Result on disposalof subsidiaries/activities 0 19,359,578 Financial result 12 11,256,017 -16,927,467 - Interest income 509,989 1,739,212 - Interest expense -2,892,033 -6,542,680 - Other financial income and expense 13,638,061 -12,123,999 - Negative Goodwill 8,305,347 140,348 - Foreign currency result 6,390,909 -10,565,872 - Other -1,058,195 -1,698,475

Result before tax 25,564,741 13,921,066 - Income taxes 13 -1,143,964 6,347,986 - Deferred taxes 30 3,967,677 11,149,776 - Income taxes -5,111,641 -4,801,790

Result after taxes from continuing operations 24,420,777 20,269,052 Result for the period 24,420,777 20,269,052attributable to - owners of the parent 24,443,211 19,691,965 - non controlling interests -22,434 577,087

(1) Compared to prior year this was now classified as part of the operating result


55

Result of the peRIod attRIbutable to the owneRs of the paRent peR shaRe

in EUR Notes 31/12/09 31/12/08

1. Profit of the period per share 14 1.1. Excluding discontinued operating activities 2.98 2.38 1.2. Including discontinued operating activities 2.98 2.382. Diluted profit of the period per share 14 2.1. Excluding discontinued operating activities 2.98 2.37 2.2. Including discontinued operating activities 2.98 2.37

stateMent of CoMpRehensIVe InCoMe in EUR Notes 31/12/09 31/12/08

Result for the period 24,420,777 20,269,052 Other comprehensive income of the period 1,270,811 -11,830,319 - Exchange differences on translation of foreign operations 1,270,811 -12,232,661 - Available-for-sale financial assets 0 0 - Cash flow hedges 0 0 - Revaluation of material fixed assets 0 0 - Share of other comprehensive income of equity accounted investments 0 0 - Income tax relating to other comprehensive income 0 402,342 total comprehensive income of the period, net of tax 25,691,588 8,438,733attributable to: - owners of the parent 25,714,022 7,861,646 - non controlling interests -22,434 577,087

56

II

II. 1.3 CONSOlIDATED STATEmENT OF ChANGES IN EquITy

stateMent of ChanGes In eQuItY

in EUR

Balance as at 1 January 2009 21,110,254 -14,809,432 37,560 -3,344,557 263,559,731 13,590 266,567,146 715,102 267,282,248 Result of the year 24,443,211 24,443,211 -22,434 24,420,777movement during the year 35,350 -1,355,330 -13,590 -1,333,570 -1,333,570Net gains (losses) not recognized in P/l 1,270,811 1,270,811 1,270,811movement in the translation differences -3,094,948 91,794 -3,003,154 -3,003,154Change consolidation scope -1,325,670 -1,325,670 -565,535 -1,891,205Tantièmes -105,000 -105,000 -105,000 Balance as at 31 December 2009 21,145,604 -16,164,762 37,560 -6,439,505 287,934,877 0 286,513,774 127,133 286,640,907

Balance as at 1 January 2008 21,083,467 -11,991,655 37,560 -1,399,090 262,430,966 13,590 270,174,838 0 270,174,838 Result of the year 19,691,957 19,691,957 577,093 20,269,050movement during the year 26,787 -2,817,777 -2,790,990 -2,790,990Net gains (losses) not recognized in P/l -12,220,026 -12,220,026 -12,220,026movement in the translation differences -1,945,467 -1,945,467 -91,794 -2,037,261Change consolidation scope -80,236 -80,236 229,803 149,567Dividends to the shareholders -5,939,893 -5,939,893 -5,939,893Other adjustments to prior periods -323,037 -323,037 -323,037 Balance as at 31 December 2008 21,110,254 -14,809,432 37,560 -3,344,557 263,559,731 13,590 266,567,146 715,102 267,282,248

Share Capital Redeemed own Shares

Share Premium

Share Capital Redeemed own Shares

Share Premium


57

in EUR

Balance as at 1 January 2009 21,110,254 -14,809,432 37,560 -3,344,557 263,559,731 13,590 266,567,146 715,102 267,282,248 Result of the year 24,443,211 24,443,211 -22,434 24,420,777movement during the year 35,350 -1,355,330 -13,590 -1,333,570 -1,333,570Net gains (losses) not recognized in P/l 1,270,811 1,270,811 1,270,811movement in the translation differences -3,094,948 91,794 -3,003,154 -3,003,154Change consolidation scope -1,325,670 -1,325,670 -565,535 -1,891,205Tantièmes -105,000 -105,000 -105,000 Balance as at 31 December 2009 21,145,604 -16,164,762 37,560 -6,439,505 287,934,877 0 286,513,774 127,133 286,640,907

Balance as at 1 January 2008 21,083,467 -11,991,655 37,560 -1,399,090 262,430,966 13,590 270,174,838 0 270,174,838 Result of the year 19,691,957 19,691,957 577,093 20,269,050movement during the year 26,787 -2,817,777 -2,790,990 -2,790,990Net gains (losses) not recognized in P/l -12,220,026 -12,220,026 -12,220,026movement in the translation differences -1,945,467 -1,945,467 -91,794 -2,037,261Change consolidation scope -80,236 -80,236 229,803 149,567Dividends to the shareholders -5,939,893 -5,939,893 -5,939,893Other adjustments to prior periods -323,037 -323,037 -323,037 Balance as at 31 December 2008 21,110,254 -14,809,432 37,560 -3,344,557 263,559,731 13,590 266,567,146 715,102 267,282,248

TOTAL

EQUITY

Translation Reserves

Reserves Negative goodwill

Equity attributable to Equity Holders

of the Parent

Non controlling interests

TOTAL

EQUITY

Translation Reserves

Reserves Negative goodwill

Equity attributable to Equity Holders

of the Parent

Non controlling interests

58

II

With regard to the cash flow statement over the financial year 2008 a number of adjustments were made in order to present the different cash flows more clearly and adapt certain inaccuracies in the presentation. The main adjustments can be summarized as follows:

- movements in cash used by operations related to the acquisition or disposal of subsidiaries are no longer recorded in the net cash provided by operating activities but are now recorded in the net cash (used in) provided by investing activities - the results from disposal of assets/companies are eliminated from the net cash provided by operating activities and are recorded in the net cash (used in) provided by investing activities - unrealized exchange differences are eliminated from the respective related cash flows and are recorded as a non cash adjustment - it has been opted for to start with the “Result before tax” to define the net cash provided by operating activities - it has been opted for to no longer record the interest paid and received in the net cash provided by operating activities, but in the net cash (used in) provided by financing activities

The comparable figures for the financial year 2008 have been reviewed according to these principles.

in EUR 31/12/09 31/12/08Result before tax 25,564,741 13,921,066 Depreciation 28,711,252 30,292,596 Impairment losses on intangible assets and property, plant and equipment 1,156,381 5,590,810 Impairment losses on Goodwill 3,000,000 139,440 Impairment losses on inventories and trade receivables 949,790 959,683 Provisions - Employee benefit obligations 2,565,782 516,550 Provisions -60,224 1,799,505 Net (losses)/gains arising on derivates 461,103 1,120,477 unrealized foreign exchange losses/(gains) -2,671,535 6,956,011 Result on sale of property, plant and equipment -64,102 1,383,924 Net (losses)/gains on disposal of financial assets 0 -19,359,578 Negative goodwill on acquisation of subsidiary -8,305,347 0 Interest paid 2,892,033 6,542,680 Interest received -509,989 -1,739,219 Other adjustments 53,179 -244,797Operating result before changes in working capital 53,743,064 47,879,148 (Increase)/Decrease in inventories -635,635 492,692 (Increase)/Decrease in trade receivables 34,942,797 18,940,475 (Increase)/Decrease in other current receivables -2,391,987 -3,422,566 Increase/ (Decrease) in trade payables -5,338,285 -21,130,165 Increase/ (Decrease) in current employee benefit obligations 419,689 1,016,419 Increase/ (Decrease) in other current liabilities 3,269,406 -2,151,379

Cash (Used) provided by operations 30,265,985 -6,254,525

Income taxes paid -2,686,912 -3,723,508

Net cash provided by operating activities 81,322,137 37,901,115

II. 1.4 CONSOlIDATED STATEmENT OF CASh FlOWS


59

in EUR 31/12/09 31/12/08 Acquisition of subsidiary, net of cash -14,805,781 -1,009,305 Contribution by minority shareholders 0 127,859 Disposal of subsidiary, net of cash 108,617 33,431,146 Proceeds from sale of property, plant and equipment 1,534,189 6,990,733 (Increase)/decrease intangibles assets -1,049,006 -1,038,103 (Increase)/decrease of property, plant and equipment -25,012,022 -65,286,974 (Increase)/decrease of other Investments -24,472 571,458 Net cash (Used in) provided by investing activity -39,248,474 -26,213,186 Increase/(decrease) of share capital 35,350 26,787 Purchase of (own) treasury shares -1,355,330 -2,817,777 Increase/(decrease) from long-term debt -1,046,246 16,873,445 Increase/(decrease) from short-term debt -34,584,270 -4,053,438 (Increase)/decrease in long term receivables -739,960 -11,054 Interest paid -2,892,033 -6,542,680 Interest received 509,989 1,739,212 Dividends & tantièmes paid -105,000 -5,939,893 Net cash (Used in) provided by financing activitie -40,177,500 -725,398 Net incr,/(decr,) in cash and cash equivalents 1,896,162 10,962,531 Cash and cash equivalents at beginning of year 22,961,946 13,954,446Effect of exchange rate fluctuations -79,521 -1,955,032 Cash and cash equivalents at end of year 24,778,587 22,961,946

COmmeNts ON tHe stAtemeNt OF CAsH FlOws OF tHe FINANCIAl YeAR 2008:

Gross cash flow provided by operating activitiesTo obtain the gross cash flow provided by operating activities starting from the result before tax, next to the adjustment for non-cash costs, the main adjustment is the realized capital gain on the sale of the respective subsidiaries Twinpack Bv and Doopa Nv.As stated previously, the profit before taxation has here been corrected for the non-realized exchange differences as a non-cash cost, while these were recorded in different cash flow components before.In this revised presentation of the cash flow statement, the proceeds (net from the cash and cash equivalents disposed of) of the subsidiaries disposed of, have been recorded in one single item in the net cash (used in) provided by investing activities. Previ-ously, the other cash flow components were not adjusted for this.Also, it has been opted for to transfer the financial costs to the net cash (used in) provided by financing activities.

60

II

Changes in working capitalThe negative cash flow from the changes in working capital can mainly be reduced to, on the one hand, the significant decrease of the trade and other receivables, but on the other hand, and in an even more important way, to the decrease of the trade and other debtors. Both have been strongly influenced by the significant decrease of sales prices as well as of the prices of the main raw materials at the end of 2008 compared to the end of 2007. Next to this, the level of trade debtors at the end of 2007 stood at a higher level due to the transformation investments for Pm7, finalized in the course of 2008.As mentioned before, in the revised presentation, the changes in working capital following the acquisition or disposal of subsidia-ries are eliminated, and recorded in the net cash (used in) provided by investing activities.

Net cash (used in) provided by investing activitiesDuring 2008 an investment programme for a total amount of € 65.3 m was completed. On the other hand, there were the proceeds from the disposal of subsidiaries for a total amount of € 33.4 m (net from the transferred cash equivalents).

Net cash (Used in) provided by financing activitiesIn order to finance the investments expenditure additional long term debts were concluded.

total net change in cash flowThis all resulted in a total net change in cash flow of € 11.0 m, resulting in the total cash and cash equivalents amounting to € 23.0 m at the end of December 2008. .

COmmeNts ON tHe CAsH FlOw stAtemeNt OF tHe FINANCIAl YeAR 2009:

Gross cash provided by operating activitiesThe gross cash provided by operating activities amounted to € 53.7 m. This consists of the profit before taxation, corrected for the non-cash costs, as well as for the net interest paid and the negative goodwill on the acquisition of subsidiaries.

Changes in working capitalThe changes in working capital resulted in a positive cash flow of € 30.3 m. The latter is mainly due to the decrease of the trade receivables. This at its turn being the consequence of the focus on client’s credit due and the recurrent sale of a part of the trade receivables portfolio. The income taxes paid amounted to € 2.7 m. This all resulted in a net cash provided by operating activities of € 81.3 m.

Net cash (Used in) provided by investing activitiesThe total cash flow from investment activities amounted to € 39.2 m. Investments of € 26.1 m were made in intangible assets and property, plant and equipment. The amount paid for the acquisition of ONDulyS SAINT quENTIN SAS and the remaining 15% of Aquila Sp.z o.o. was € 14.8 m.

Net cash (Used in) provided by financing activitiesTreasury shares for an amount of € 1.4 m were bought, the net interest paid amounted to € 2.4 m, and liabilities carrying interest for an amount of € 36.4 m were reimbursed. In total, the net cash (used in) provided by financing activities amounted to - € 40.2 m.

total change in cash flowThis all resulted in a net change in cash flow of € 1.9 mio; consequently, the total cash and cash equivalents amounted to € 24.8 mio at the end of December 2009.


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II.1.5. NOTES TO ThE CONSOlIDATED ANNuAl ACCOuNTSII.1.5.1. INFORmAtION ON tHe COmPANY

Name, legal form and registered officevPK Packaging Group Nv is a ‘naamloze vennootschap’ (limited liability company) under Belgian law, which has the status of a company that has made a public offering of securities. The company’s registered office is located at Oude baan 120, 9200 Oude-gem (Dendermonde), Belgium. The postal address is villalaan 16, 9320 Erembodegem (Aalst), Belgium.

Company registration number - RPRThe company is recorded in the Register of legal Persons (RPR) in Dendermonde (Belgium) under the company registration number BE 0400.313.852.

Formation, amendments to articles of association, durationThe company was formed by a deed executed before Abel verstraeten, civil law notary, in Gavere on 6 December 1935, published in the Appendices to the Belgian Bulletin of Acts, Orders and Decrees of 25 December 1935 under number 16.518.

The articles of association have been amended several times, most recently by the board of directors meeting of 27 march 2009, published in the Appendices to the Belgian Bulletin of Acts, Orders and Decrees of 17 April 2009 under number 09056325, with the articles of association being coordinated at the same time as this.The company was formed for an indefinite duration.

Financial yearThe financial year begins on 1 January and ends on 31 December of every year. The financial statements over 2009 were approved for publication by the board of directors on 11 march 2010.

Object of the companyThe object of the company is to engage in the following, in Belgium and abroad, on its own account and on behalf of third parties:

1 manufacturing and trading in packaging, paper and board, and producing and exploiting all derivatives of the paper and board industry

2 Providing technical, commercial, financial and other services to affiliated enterprises, including supporting commercial and industrial activities

3 On its own account or on behalf of affiliated enterprises, taking up interests, in any manner whatsoever, in any enterprise having an identical, similar or related objective, or that can further its business or facilitate the sales of its products or services, together with collaborations and mergers with such enterprises; generally investing in, subscribing to, buying, selling and dealing in financial instruments issued by Belgian or foreign enterprises

4 On its own account or on behalf of affiliated enterprises, managing investments and holdings in Belgian and foreign enterprises, including providing guarantees, guarantees on bills, advances, credits or personal or real security in favour of such enterprises and acting as their agent or representative

5 Acting in managerial posts, providing advice, management and other services to other Belgian or foreign enterprises by

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virtue of a contractual relationship or appointment by the articles of association and in the capacity of an external advisor to or officer of these enterprises

The company may, in Belgium or abroad, carry out any such industrial, trading, financial, chattel and real property transactions as are liable to expand or promote its business, either directly or indirectly, or are connected therewith. It may acquire any chattels and real property even if such are not connected directly or indirectly with the object of the company. It may, in any manner what-soever, take up interests in any association, business, enterprise or company whose object is identical, similar or related or that can further its business, or facilitate the sales of its products or services, and may collaborate or merge with same.

the company activities are described in Part I.6.

II.1.5.2. DeClARAtION OF CONFORmItY

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), as accepted by the International Accounting Standards Board (IASB) and approved by the European Community on 31 December 2009.

vPK PACKAGING GROuP Nv has not applied any European exceptions to IFRS, which means that the financial statements cor-respond entirely to IFRS standards. Certain 2008 figures have been re-classified in order to guarantee conformity with the 2009 presentation. In these cases details are presented in the related notes.

II.1.5.3. CHANGes IN ACCOUNtING PRINCIPles AND APPlICAtION OF ReCeNt IFRs CHANGes

The accounting principles applied are in accordance with the accounting principles of the previous financial year.

II.1.5.3.1. ImPLEmENTATION Of NEw ANd mOdIfIEd IfRS ANd INTERPRETATIONS,

ENTEREd INTO fORCE fOR THE fINANCIAL YEAR CLOSEd AT 31 dECEmbER 2009

1° IAs 1 Presentation of the financial statements (revised version 2007)This standard is applied for the first time and has no impact on the balance sheet, nor on the results of the company, but entails modifications as to the presentation of components of the financial statements and notes to the financial statements. Regarding the overview of comprehensive income, it has been chosen to present all income and expenses of the period under the form of two overviews.

2° IFRs 8 Operational segmentsThis standard is applied for the first time. IFRS 8 requires that operational segments are defined based on the internal reporting of the company components within the group, which are regularly evaluated by the high-placed officer of the entity, taking important operational decisions, in view of granting means to the segment and evaluating the financial performance of the segment. Fol-lowing the application of IFRS 8 the segment information has been amended and commented in Note II.1.5.6.

3° IFRs 7 (revised version)The revised version of IFRS7 requires additional information regarding the fair value and the liquidity risks. The required comments are comprised in Note II.1.5.26.6.


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4° the following new or modified mandatory standards and interpretations have no impact on the consolidated finan-cial statements, are they are not applicable:

- IAS 23 (revised version) Financing costs - IAS 32 Financial instruments: presentation and IAS 1 Puttable Financial Instruments and obligations arising on liquidation - IFRS 2 Share based payment – conditions for qualification and annulment - IFRIC 9 Remeasurement of embedded derivatives and IAS 39 Financial instruments: recognition and meausurement - Remeasurement of embedded derivatives - IFRIC 13 loyalty programmes - IFRIC 14 IAS 19 – limitations of assets from defined benefit pension plans, minimal financing obligations and their interaction - Improvements of IFRS standards (may 2008)

I.1.5.3.2. NEw ANd mOdIfIEd IfRS ANd INTERPRETATIONS, NOT YET ENTEREd INTO fORCE fOR

THE fINANCIAL YEAR CLOSEd AT 31 dECEmbER 2009, ANd NOT ImPLEmENTEd IN AdvANCE

- Annual improvements 2009 - IFRS 2 Share based payments – group cash settled share based payment transaction - IFRS 3R Business combinations and IAS 27 (modified version 2008): Consolidated and statutory financial statements - IAS 24 (revised version): Notes related parties - IAS 32 Financial instruments: Presentation – classification of issuing of rights - IAS 39 Financial instruments: recording and valuation – qualified hedged items - IFRIC 12 Concession contracts - IFRIC 14 (Adjustment) Advance payments within the framework of a minimum required covering rate - IFRIC 16 hedging of a net investment in a foreign operation - IFRIC 17 Payments from non liquid assets to their owners - IFRIC 18 Transfer of assets from customers - IFRIC 19 Debt restructuring by issuing treasury shares

It is expected that the application of these standards, modification of standards and interpretations, will have no significant impact on the results of the group, except for: - IFRS 3R Business combinations and IAS 27 (modified version 2008) Consolidated and statutory financial statements: The group will apply IFRS 3R as from 1 January 2010. IFRS 3R comprises a number of significant changes regarding the cost of business combinations, initial recording and consequent valuation of conditional payment, business combinations in different phases. These modifications will have an impact on the calculation of goodwill and the group results. - IAS 27 (modified version 2008) requires that transactions of minority interests without a loss of control, are recorded as transactions of owners in their capacity of owner. These kinds of transactions will not entail the recording of profit or loss.

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II.1.5.4. sUmmARY OF tHe mAIN ACCOUNtING PRINCIPles

II.1.5.4.1. bASIS fOR PRESENTATION

The annual accounts are drawn up in euro, rounded off to the nearest unit. The consolidated annual accounts are established ac-cording to the ”historical cost”-principle with exception of the financial instruments and derivative financial instruments valued at fair value or amortized cost according to IFRS. unless specifically mentioned otherwise, the basis for financial reporting has been applied in a consistent way with the previous financial year.

To draw up the annual accounts according to IFRS the management has to develop a number of estimates and hypothesis having an impact on the amounts mentioned in the financial statements and notes. The management bases its estimates on historical experience, current conditions and circumstances and other reasonable evaluation criteria. These are periodically under review and the effects of such reviews will be reflected in the annual accounts of the period concerned. Future events with a possible financial impact on the group are herein included.The consequent estimated results can differ from the current results. Assessments and estimates were drawn up for: - the evaluation of the necessity for extraordinary impairments on the fixed assets, including the goodwill; - the constitution of provisions for restructuring and conditional liabilities; - the definition of provisions for un-collectable receivables - the definition of losses on stocks - the evaluation of provisions for employee benefits - the possibility to recover deferred tax assets

II.1.5.4.2. CONSOLIdATION PRINCIPLES

The consolidated annual accounts comprise the subsidiaries, the interests in entities controlled jointly and consolidated proportionally, and the associated participations according to the equity method.

All balances and transactions, income and charges within the group are eliminated.

subsidiaries Subsidiaries are companies in which the group holds, directly or indirectly, more than half of the shares entitled to voting or in which the group exercizes control, directly or indirectly over the activities in order to benefit from the operational activities. The financial statements of the subsidiaries are recorded in the consolidated annual accounts as from the date on which the control starts till the date on which the control ends.

entities with joint control (joint ventures)The entities for which vPK PACKAGING GROuP Nv has agreed to share the control with one or more parties, are entities with joint control. Proportional consolidation of jointly controlled entities starts on the date as from which the joint control starts and ends when this control is no longer shared.

Associated enterprisesAssociated enterprises are those in which vPK PACKAGING GROuP Nv, directly or indirectly, has a significant influence, but no control. It is generally assumed that this relates to enterprises in which the group holds between 20% and 50% of the voting rights. Investments in associated enterprises are recorded in the consolidation according to the equity method as from the date on which the significant influence starts till the date on which the significant influence stops.


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Business combinationsWhen vPK PACKAGING GROuP Nv takes over an entity or a company activity, the identifiable assets, liabilities and conditional li-abilities of the party taken over, are recorded at their fair value. The difference between the cost and the interest of the acquiring party in the net fair value of the identifiable assets, liabilities and conditional liabilities, is recorded as goodwill. If this difference is negative, the surplus, after revaluation of the fair values, is immediately recorded in the results.The minority interests are valued at their share in the fair value of the recorded assets, liabilities and conditional liabilities.If vPK PACKAGING GROuP Nv increases its stake in a participation in which it did not yet have the control, (in principle increase of the beneficial interest smaller or equal to 50% to 51% and more), then, the supplement or discount paid compared to the ad-ditional share in the net asset value acquired is recorded as if it concerns a new acquisition according to the method described in the previous paragraph.If vPK PACKAGING GROuP Nv increases its interest in a participation over which it does yet have the control, the supplement or discount paid compared to the additional share in the net asset value, is directly recorded in the shareholders’ equity.

II.1.5.4.3. vALUATION PRINCIPLES

Intangible assetsIntangible assets consist mainly of software applications or licences purchased from third parties. These intangible assets with a limited use are valued at their acquisition cost and depreciated on a linear basis over a period of five years.

Goodwill / Positive consolidation differencesGoodwill is recorded as an asset and at least yearly subject to a test for impairments. This test is also executed when there is an indication of a possible impairment of an entity generating cash flow to which the goodwill is attributed. Each impairment loss is immediately recorded in the results and is not written-back afterwards.In the case of disposal of a subsidiary, associated participation or a jointly controlled entity, the realized goodwill is recorded in the definition of the results of the disposal.

Investment grants / Capital subsidiesInvestment grants received for investments in tangible fixed assets are offset against the amount invested.This results in the depreciation rate being applied to lower amounts.

Property, plant and equipmentProperty, plant and equipment are valued at their historical cost minus the accumulated depreciations and impairments, and initi-ally recorded at cost or manufacturing price. The cost comprises the acquisition price increased by other direct acquisition costs. Expenses for the reparation of property, plant and equipment are immediately recorded in the results. however, they are activated if they result from a future economic use of the respective property, plant and equipment. Property, plant and equipment are depreciated as from the date of first use according to the linear method, over the economic life cycle of the asset. For buildings, machines and equipment the value at the start of the depreciation is reduced by the residual value, equal to ten percent of the acquisition price or cost. The validation of the ten percent residual value is annually evaluated. land is not depreciated.

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the following depreciation percentages are applied: linear BasisBuildings 3% 90%Important maintenance of the buildings 10% 90%Establishment of buildings and surroundings 10% 100%Installations other than for paper machines. energy supply and water purification 8.33% 100%machines and equipment other than for paper machines. energy supply and water purification 8.33% 90%Installations regarding paper machines. energy supply and water purification 6.67% 100%machines and equipment regarding paper machines. energy supply and water purification 6.67% 90%material miscellaneous 20% 100%Second hand material 20% 100%IT supplies 33.33% 100%Furniture 10% 100%Rolling material 20% 100%leasing

Assets under construction 0% 100% Spare parts with a life cycle of > 3 years 33.33% of 10% 100%

Non-current financial assets available for saleParticipations recorded in the non-current financial assets available for sale comprise the participations in companies in which the group has no control, nor a significant influence. These participations have not been acquired with the intention to sell them within the short term.These participations are valued, in principle, at their fair value and changes of this value are directly recorded in the sharehol-ders’ equity. In case of realization or impairment, the changes are recorded in the results. In case the cost is nearly equal to the fair value or if no price can be defined and the fair value can not be defined in a reliable way, the asset concerned is valued at its cost.

Impairments on goodwill, intangible and tangible assetsFor the consolidation goodwill at least an annual test is organized to define impairment losses. For intangible and tangible as-sets an evaluation is made at each balance sheet date to define if there are indications of a possible impairment of the asset.An impairment loss is recorded when the book value of the asset, or of the cash generating unit to which the asset belongs, is higher than the realizable value. If an asset does not generate any incoming cash flow independent of other assets, the management evaluates the realizable value of the cash generating unit to which the assets belongs. The realizable value of an asset or a cash generating unit is equal to the highest fair value minus the sales costs and the company value of the asset or cash generating unit, for which the fair value is equal to the amount that can be obtained from the sale in a transaction between well-informed, willing parties who are independent and for whom the company value corresponds to the value in cash of the es-timated future cash flow which can be expected to be generated by the asset or cash generating unit. For the calculation of the company value, the estimated future cash flow is discounted to its cash value based on a discount rate before taxation taking into account the current market evaluation of the time value of money and the specific risks of the asset for which the estimated future cash flow has not been applied.Impairment losses are recorded in the results. An earlier recorded impairment is written back, if there is a change in the estimates used for the definition of the realizable value, but not for a higher amount than the net book value which would have

The same % as for material

owned

The same % as for material

owned


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been defined, if no impairment would have been recorded the previous years. An impairment loss on goodwill however is never written back.

InventoriesRaw materials, consumables and trade goods are valued at acquisition price. Work in progress and finished products are valued at production price. The production price includes, in addition to the direct production and material costs, a proportional part of the indirect costs of production and of the materials and a proportional part of the depreciation and write-downs of the assets that have been used in the production process. Administration costs are included to the extent that they relate to production. Inventories are valued using the FIFO method.If the acquisition price or production price is higher than the net selling price, the valuation at the lower market price is used. The net selling value is equal to the estimated normal selling price, less the estimated cost of completion and the cost for sale and delivery.

Spare parts with a useful life of less than 1 year are valued at their acquisition price.

Cash and cash equivalentsCash assets consist of cash, money in current accounts, short-term deposits with banks and investments with a fixed term, and liquid investments that are immediately convertible into a known amount, with negligible risk of value fluctuation. These elements are valued at nominal value or amortized cost. Profit and loss is recorded in the results when the investment is realized or devaluated.For the cash flow statement the ‘cash and cash equivalents’ comprise the elements mentioned above. Possible negative cash is recorded in the short-term debt with credit institutions.

trade and other receivablesTrade and other receivables are valued at amortized cost, using the amortized interest method and if necessary, with deduction of impairment losses. When the impact of the realization is negligible, valuation is at nominal value, taking into account possible impairment losses. The management evaluates the creditworthiness of its clients on a permanent basis and draws up estimates of uncollectible trade receivables. At balance sheet date an estimate is made of the uncollectible receivables based on an evaluation of the recovery risk. Indications of a recovery risk are, a.o., bankruptcy of the client, liquidation, or in a procedure for companies in difficulty; payment date overdue by more than 60 days; no reaction to reminders; exceeding the allowed credit/insurance limit; other negative information; issued claims; …An impairment loss is recorded in the results in correspondence with the difference between the book value of the receivables and the cash value of the estimated future cash flow. The level of the decrease in value also depends on whether the receivable concerned is covered or not by the credit insurance. Trade receivables for which the risks and ownership benefits have been transferred to a large extent, are no longer recorded in the balance sheet. If almost all risks and ownership benefits of the re-ceivable are nor transferred, nor kept, and the power of decision is not kept, the receivable is no longer recorded in the balance sheet and possible rights and liabilities following the transfer are recorded separately.

shareholders’ equityPurchase of treasury sharesIf shares representing equity are redeemed, the amount paid, including related costs, is regarded as a change in equity. Redeemed treasury shares are recognised as a reduction of equity. No profit nor loss is directly recognised in the result of the period following the purchase, sale or withdrawal of treasury shares.

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DividendsDividends are recorded in the results at the time they become payable.

Provisions Provisions are recorded in the balance sheet if the group has a current legally binding or factual liability following past events and if it is likely that the settlement of the liability will coincide with expenses that can be estimated in a reliable way at balance sheet date.

Provisions in connection with restructuring plansA provision for restructuring costs is recognised if vPK Packaging Group N.v. has formally approved a detailed restructuring plan and if the planned restructuring has either already started or been announced to the parties concerned.No provisions are formed for future operating costs.

Provisions for environmental risksIf land is contaminated, a provision is formed for soil remediation in line with vPK Packaging Group Nv’s environmental policy and the applicable statutory requirements.

Pensions and similar liabilities

A PensionsIn accordance with the laws and the customs of each country, some group entities dispose of a defined contribution plan or a defined benefit plan.

Defined contribution planThe paid contribution is immediately recorded in the results as from its occurence. The fixed contribution plans do not entail future commitments for the company and do not lead to the creation of provisions.In Belgium defined contribution plans are legally imposed in order to guarantee a minimum return. Within this framework, it is checked on a regular basis if this legally imposed return guarantee is sufficiently hedged by the insurance company, in which case the settlement can further be classified as a defined contribution plan. In the case of insufficient coverage the settlement will be considered as a defined benefit plan.

Defined benefit plansFor defined benefit plans the amount recorded in the balance sheet (the net liability) corresponds to the cash value of the gross liability minus the fair value of the investment fund and adjusted for non-recorded pension expenses relating to the length of service. The cash value of the gross liability of a defined benefit plan is the cash value, before deduction of the investment funds, of the expected future payments required to complete the obligation resulting from the employment of the employee in the current pe-riod and in previous periods. The cash value of the gross liability and the pension expenses attributed to the year of service and possible pension expenses of expired years of service is calculated according to the projected unit credit-method. The discount rate corresponds to the return at balance sheet date on corporate bonds with a high creditworthiness, with a remaining duration comparable to the one of the liabilities of the plan. Actuarial profit and loss comprise adjustments based on experience (the consequences of differences between the previous actuarial assumptions and what really took place) and the consequences in actuarial assumptions. The group has decided to ap-ply the principle of deferred recording of actuarial profit and loss, in line with the ‘spread’ approach: the actuarial profit and loss


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exceeding 10% of the highest value of, on the one hand, the fair value of the investment funds, and on the other hand, the cash value of the gross liability arising from the defined benefit plan, are recorded in profit and loss over the average remaining period of service of the employees participating in the plan.A recognised actuary performs the calculation annually.When the conditions of the plan need to be adjusted, the portion relating to the increase of the benefits with regard to the ser-vices rendered by the employees is considered as a cost and accounted for in a linear way in function of the average remaining duration till the moment as from which the corresponding rights are acquired. To the extent that these rights are immediately acquired, the cost is immediately accounted for in the results. If the calculation of the actuarial differences results in a decrease of the actualised value of the liabilities for the defined be-nefit, the corresponding assets are only accounted for the total net amount of the actualised value of the expenses for services rendered and possible diminutions of future contributions.

Early retirement is considered as a severance pay.

B Other long-term employee benefitsApart from the employee benefits mentioned above, the group also has other long-term obligations towards its employees. These consist of the future remuneration to which employers are entitled on the basis of their performance during the current or previous periods, such as jubilee, leaving and seniority premiums. These obligations are accounted for using the projected unit credit-method.

Interest-carrying liabilitiesAll interest-carrying liabilities are accounted for at the fair value of the received compensation minus the directly attributable transaction costs, at their first recording. After this first recording, the interest-carrying liabilities are valued at amortized cost based on the effective interest rate method.

trade debtsTrade debts are valued at amortized cost, using the amortized interest rate method. When the impact of the actualisation is negligible, they are valued at par value.

taxesIncome taxes include income tax and deferred taxes. Both forms of tax are recognised in the income statement, except in cases where the items concerned are part of equity. In the latter case, the tax is recognised via equity. Income tax means those taxes that are charged on the taxable income for the financial year, calculated at the tax rates applica-ble on the closing date.Deferred taxes are recognised on the basis of the liability method and mainly arise from the differences between the carrying amount of assets or liabilities in the accounting and tax balance sheets (temporary differences).A deferred tax asset is only recognised if there is sufficient certainty that it will be possible to set off the tax credit and the unused tax losses against taxable profits in the future. latent tax assets are reduced as the probability declines that it will be possible to realise the tax saving. Additional income tax arising from the allocation of dividends is recognised at the same time as the obligation to pay the dividend concerned.Concerning temporary differences regarding to participations in subsidiaries, associated enterprises and joint ventures, deferred taxes are recognised unless the group can define the time at which the temporary difference is settled and it is probable that this settlement will not occur in the near future.

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IncomeIncome is recognised when it is probable that the economic benefits of a transaction are due to the group and when the amount of the income can be valued in a reliable way.The income relating to the sale of goods is recognised when the delivery, as well as the full transfer of the risks and benefits related to the property took place. Net income is recognised, which means after deduction of trade discounts and taxes.

Financial income/expensesFinancial income comprises the interests received or to be received on investments, dividends, exchange rate profits, profits from derivative financial instruments and profits from financial assets held for trading.

Interest income is recorded in the results pro rata temporis taking into account the actual interest rate of the asset. The financial costs comprises interests on credits, calculated according to the effective interest rate method, exchange rate losses, results from interest rate hedges, losses on derivative financial instruments and losses on financial assets held for trading.

All interests and other expenses related to credits or financial transactions are accounted for as financial expenses when they occur.

Negative consolidation differences and exchange rate results are accounted for in the other financial income and expenses.

Derivative financial instrumentsDerivative financial instruments can be used to limit risks related to unfavourable fluctuations in interest percentages and exchange rates as a consequence of the operating, financing and investment activities.

Within the framework of the treasury policy of the group, no speculative transactions are concluded. Derivative financial products which do not meet the requirements of hedge accounting, are accounted for as “held for trading” and valued at fair value (as well initially as later on) with recording of value changes in the result of the period. At present no hedge accounting is applied.

segment reportingOperational segments are reported according to internal management reporting, made available by the body that functions as the Chief Operating Decision-maker i.c. the executive committee. The Chief Operating Decision-maker carries the responsibility for allocation of the resources and evaluation of the results of these segments. Within the group there are three operational segments – Paper, Corrugated board and Specialties.

Besides this, there is a geographic segmentation. The geographic segments of the group are based on the location of the assets.The segment information comprises all results, assets and liabilities that can, or directly, or on a reasonable basis, be allocated to a segment.

The prices applied between the segments are defined according to the “at arm’s length” principle.

Foreign currency

Transactions in foreign currencyTransactions in foreign currency are accounted for at the exchange rate of the transaction date. monetary assets and liabilities


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in foreign currency are converted at the exchange rate applicable at balance sheet date. Profit and loss resulting from trans-actions in foreign currency and from the conversion of monetary assets and liabilities in foreign currency, are accounted for in the results. Non-monetary assets and liabilities in foreign currency are converted at the exchange rate of the transaction date. Non-monetary assets and liabilities in foreign currency accounted for at fair value, are converted at the exchange rate applicable at the moment of the definition of the fair value.

Conversion of the results and financial position of foreign activitiesAssets and liabilities of foreign activities are converted into euro at the exchange rates applicable at balance sheet date. The in-come statements of the foreign activities are converted into euro at average annual rates. The components of the shareholders’ equity are converted at historic rate. The exchange rate differences arising from the conversion into euro of the shareholders’ equity at the rate on the reporting date, are accounted for in the item of the shareholders’ equity ‘movement in translation diffe-rences’. Exchange rate differences resulting from monetary assets or liabilities which are essentially part of the net investment in a foreign entity are recorded as shareholders’ equity, till the net investment is disposed of, as from which moment they are accounted for as income or expenses.

exchange ratesThe following exchange rates were used in the preparation of the financial statements: Closing rate Average rateEuR / Curr 2009 2008 2009 2008British Pound 0.8881 0.9525 0.9016 0.7878Danish Krone 7.4418 7.4506 7.4466 7.4561Norwegian Krone 8.3000 9.7500 8.8412 8.1453Polish Zloty 4.1045 4.1535 4.3464 3.4766Romanian New lei 4.2296 3.9852 4.2353 3.6688Czech Koruna 26.4650 26.8750 26.5092 24.8995Swiss Franc 1.4836 1.4850 1.5120 1.5915

share-based paymentsSince 1999, vPK Packaging Group Nv has had a warrant-based compensation plan. Warrants are allocated to directors and employees in accordance with the Warrant Plan approved by the Extraordinary general meeting of 17 February 1999. The main conditions and the exercising hereof are mentioned in part II under note II.1.5.27.5 of the consolidated financial statements. The last exercise period foreseen by the plan was January 2009. When the warrants are exercised, the receipts, less the transaction costs, are credited against the issued capital and the issue premiums.

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II.1.5.5. CONSOlIDATION SCOPE

II. 1.5.5.1. CHANGes IN CONsOlIDAtION sCOPe

During 2009 the following changes in consolidation scope occurred. In February, after the successful conclusion of the acquisi-tion, ONDulyS SAINT quENTIN SAS was recorded as a 100% subsidiary of vPK PACKAGING GROuP Nv. Per end of April COREX Denmark AS was transferred and in July 2009 the remaining 15% of AquIlA Sp.z o.o. was acquired.

II.1.5.5.2. LIST Of CONSOLIdATEd ENTERPRISES

1 Fully consolidated enterprises and enterprises for which the equity method is used Share of the capitalVPK PACKAGING NV 0454.520.026 100%Oude Baan 120, 9200 Dendermonde

OUDeGem PAPIeR NV 0454.519.927 100%Oude Baan 120, 9200 Dendermonde

VPK seRVICes GCV 0464.538.245 100 %Oude Baan 120, 9200 Dendermonde

ImmOwell NV 0431.101.850 100 %Oude Baan 120, 9200 Dendermonde

eCOFORmeR NV 0440.269.637 100 %Oude Baan 120, 9200 Dendermonde

COReX Belgium NV 0423.092.917 100%F. liederikstraat 23, 8530 harelbeke

COReX Group NV 0405.395.662 100% F. liederikstraat 23, 8530 harelbeke

COReX DePAUw NV 0405.406.154 100%F. liederikstraat 23, 8530 harelbeke with sub-consolidation of ejendomsselskabet lodskovvej A/s Faelledjev 1, 5100 Odense D Reg. No. (CvR) 27196209 100%

smARt PACKAGING sOlUtIONs NV 0449.398.129 100%Europastraat 28, 2321 meer

sAUCAs eUROPe P.O.s. NV 0894.554.388 75% Wijngaardveld 34, 9300 Aalst


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s.C. VPK PACKAGING srl. RO 20571656 100% Str. Iosif vulcan 35, 415500 Salonta (RO)

s.C. COReX ROmANIA srl. RO 24652923 100% Str. Iosif vulcan 35, 415500 Salonta (RO)

ImmOwell BV Nl 820.202.253 100% Snoekweg 1, 4941 SC Raamsdonksveer (Nl)

VPK NeDeRlAND BV Nl 805.665.821 100%Snoekweg 1, 4941 SC Raamsdonksveer (Nl) VPK PACKAGING BV Nl 007.127.169 100%Snoekweg 1, 4941 SC Raamsdonksveer, (Nl)

COReX Nederland BV Nl 001 584 893 100%handelsweg 5, 7641 AC Wierden (Nl)

COReX Deutschland GmbH DE 258.522.259 100% Werkstraße 32, 46395 Bocholt (DE)

VPK Papier GmbH DE 260.184.805 100%hauptstrasse 30, 06729 Elsteraue OT Tröglitz (DE)

PAPIRO AG Ch 399.306 98%Genferstrasse 23, 8027 Zürich (Ch)

RIGID GROUP ltd. GB 119.107.100 100% Stoke Albany Road, Desborough Kettering NN 14 2SR Northamptonshire, (GB) with sub-consolidation of the following companies: RIGID CONtAINeRs ltd. uK 00290.827 100% Stoke Albany Road, Desborough Kettering NN 14 2SR Northamptonshire

RIGID PAPeR ltd. Stoke Albany Road, Desborough Kettering uK 00516.721 100% NN 14 2SR Northamptonshire

COReX France sAs FR 88.475.681.979 100% rue de la Papinerie, 59115 leers, Z.I. Roubaix Est (FR)

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COReX luxembourg sA lu 1988.2203.622 100% Z.I. haneboesch, 4562 Differdange (lu) COReX Nordic As NO 971.649.542 100%Stavsjøvegen 67550 hommelvik (NO)

COReX Polska sp.z o.o. Pl 5591716269 100%ul. Bydgoska 1, 86-100 Swiecie (Pl)

COReX Czech sro. CZ 63.908.824 100%Prumyslova 7, 682 23 vyskov (CZ)

VPK PACKAGING sp.z o.o. Pl 5213048909 100%ul. Objazdowa 6a, 62-300 Wrzesnia (Pl)

AQUIlA Radomsko sp.z o.o. Pl 7891699369 100% Przedsibiorcw 1, 97-500 Radomsko (Pl)

AQUIlA sp.z o.o. Pl 7891638178 100% ul. Objazdowa 6a, 62-300 Wrzesnia (Pl)

ONDUlYs emBAllAGes sAs FR 59.450.502.418 100%37, rue Fremaux, 59160 lomme, (FR) with sub-consolidation of the following companies:

sICl sAs FR 87.783.718.315 100% 1, rue Charles Saint venant 59160 lomme (FR)

ONDUlYs lIlle sAs FR 46.483.698.627 100% 1, rue Charles Saint venant 59160 lomme (FR)

ONDUlYs tAIlleUR sAs FR 22.320.153.612 80% 1, rue du Chemin Blanc 91165 longjumeau (FR)

ONDUlYs ANDelle sAs FR 15.775.574.171 99% usine Saint-victor 27380 Fleury sur Andelle (FR) ONDUlYs ROYe sAs FR 65.572.041.739 99% Route de villers 80700 Roye (FR)


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ONDUlYs ReFeReNCe sAs FR 72.304.097.348 33% 1, rue du Chemin Blanc 91165 longjumeau (FR)

ONDUlYs GHeYseNs sAs FR 42.886.480.391 78% 2, rue henri Carette 59200 Tourcoing (FR)

ONDUlYs INDUstRIe sAs FR 09.440.849.867 100% Rue Paul Cornu 14100 lisieux (FR)

Ondulys liane sAs FR 04.304.556.491 100% rue Eugène huret 62360 Saint Etienne au mont (FR)

In the course of the financial year vPK PACKAGING GROuP Nv acquired the minority interest of 15% in AquIlA Sp.z o.o. for an amount of € 1,891,205. This transaction was accounted for as a shareholders’ equity transaction and consequently without recog-nition of goodwill. The additional cost for an amount of €1,325,670 was accounted for in shareholders’ equity, such as the transfer of the minority interest.

2 Proportionally consolidated company

O.K. Oudegem-Kühl Recycling GmbH DE 812.837.177 50%Keimstrasse 5, 86420 Diedorf, (DE)

II.1.5.6. seGmeNt RePORtING

In 2009 the group has applied IFRS 8 for the first time. Following IFRS 8 the presentation of the operational segments was modified in 2009 in the sense that the packaging segment has been split up in “corrugated board” and the segment “spe-cialties”. The segment “trade”, strongly reduced per end of 2008 following the sale of Twinpack Bv at the beginning of 2008 is not reported separately anymore and is recorded in the segment “corrugated board” because of non important. This pre-sentation has also been applied on the figures of the financial year 2008. The group is thus organised into three operational segments – paper, corrugated board, specialties – and the unallocated activities. Segmenting is based on distinguishing factors such as production process, different management structure, different dynamics within the raw materials markets resulting in a different risk profile, and finally a very different client portfolio. more details on these segments, forming the primary segmentation of vPK PACKAGING GROuP Nv, can be found in the first part of this annual report. The unallocated income and expenses, assets and liabilities mainly result from head office, the reinsurance activity and the activities of the coordination centre.

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II.1.5.6.1. OPERATIONAL SEgmENTS

Corrugated Paper specialties Unallocated eliminations tOtAl

IN EuR 2009 2009 2009 2009 2009 2009

Operating income 407,774,070 90,789,489 131,191,004 21,784,468 -129,355,198 522,183,833

Sales to external customers 377,963,817 26,902,102 116,981,292 336,622 522,183,833

Sales from transactions with

other segments 29,810,253 63,887,387 14,209,712 21,447,846 -129,355,198 0

Operating expenses -357,176,664 -41,042,010 -117,573,975 7,853,438 -507,939,211

- Impairment losses 1,135,000 -2,291,381 -3,000,000 -4,156,381

Result on disposal of fixed assets -245,785 357,254 -47,367 64,102

Operating Cash Flow (eBItDA) 39,090,172 -4,032,888 6,659,280 8,915,141 50,631,705

Operating result (eBIt) 20,541,368 -13,782,654 -640,050 8,190,060 14,308,724

Gain (loss) on disposal

of subsidiaries/activities

Financial result 6,095,326 -9,320,154 494,700 13,986,145 11,256,017

Result before tax 26,636,694 -23,102,808 -145,350 22,176,205 25,564,741

- Income taxes 6,977,082 -6,902,450 553,302 516,030 1,143,964

Result after taxes from

continuing operations 19,659,612 -16,200,358 -698,652 21,660,175 24,420,777

Result of the period 19,659,612 -16,200,358 -698,652 21,660,175 24,420,777

tOtAl seGmeNt - Assets 244,707,965 117,498,138 61,675,872 76,481,989 500,363,964

tOtAl seGmeNt - lIABIlItIes 81,585,746 49,238,483 16,906,733 65,992,095 213,723,057

INVestmeNts INtANGIBle

Assets 785,545 9,316 254,146 1,049,007

INVestmeNts PROPeRtY,

PlANt AND eQUIPmeNt 17,473,960 3,926,895 2,680,748 930,419 25,012,022


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Corrugated Paper specialties Unallocated eliminations tOtAl

IN EuR 2008 2008 2008 2008 2008 2008

Operating income 421,803,193 137,187,820 139,950,615 20,992,250 -148,798,612 571,135,266

Sales to external customers 394,432,513 50,889,146 125,815,704 -2,097 571,135,266

Sales from transactions with

other segments 27,370,680 86,298,674 14,134,911 20,994,347 -148,798,612 0

Operating expenses -369,327,756 -71,396,251 -125,457,142 7,918,762 -558,262,387

- Impairment losses 1,000,000 -4,590,294 -3,590,294

Result on disposal of fixed assets -907,027 -133,233 -276,474 -67,190 -1,383,924

Operating Cash Flow (eBItDA) 38,815,800 -1,053,272 4,729,013 8,295,998 50,787,539

Operating result (eBIt) 24,197,730 -20,640,338 257,753 7,673,810 11,488,955

Gain (loss) on disposal

of subsidiaries/activities 8,898,439 -4,312,786 0 14,773,925 19,359,578

Financial result -7,333,793 -12,606,174 10,521 3,001,979 -16,927,467

Result before tax 25,762,376 -37,559,298 268,274 25,449,714 13,921,066

- Income taxes 3,875,009 -10,992,320 427,166 342,159 -6,347,986

Result after taxes from

continuing operations 21,887,367 -26,566,978 -158,892 25,107,555 20,269,052

Result of the period 21,887,367 -26,566,978 -158,892 25,107,555 20,269,052

tOtAl seGmeNt - Assets 202,706,131 123,455,801 73,406,823 101,091,902 500,660,657

tOtAl seGmeNt - lIABIlItIes 60,612,580 65,864,565 18,504,965 88,396,299 233,378,409

INVestmeNts INtANGIBle

Assets 550,307 181,664 181,554 0 913,525

INVestmeNts PROPeRtY,

PlANt AND eQUIPmeNt 36,861,500 18,754,139 9,377,946 293,389 65,286,974

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II.1.5.6.2. gEOgRAPHICAL SEgmENTATION

Belgium France UK the Netherlands Poland Others eliminations tOtAlin EUR 2009 2009 2009 2009 2009 2009 2009 2009Operating income 271,503,296 186,243,112 69,506,678 50,278,695 44,280,653 29,726,597 -129,355,198 522,183,833Sales to external customers 175,934,790 164,006,783 65,945,935 49,515,684 42,465,262 24,315,379 522,183,833Sales from transactions with other segments 95,568,506 22,236,329 3,560,743 763,011 1,815,391 5,411,218 -129,355,198 0Operating expenses -179,764,212 -151,751,365 -68,532,495 -44,239,831 -41,255,200 -22,396,108 -507,939,211 Impairment losses -3,000,000 1,135,000 -2,291,381 -4,156,381Result on disposal of fixed assets -33,642 -6,883 241,047 -102,923 -976 -32,521 64,102 Operating Cash Flow 16,091,937 17,905,379 4,286,097 7,706,367 2,974,233 1,667,692 50,631,705(eBItDA) Operating result -3,863,064 12,248,535 -2,345,513 5,172,930 1,209,086 1,886,750 14,308,724(eBIt) Gain (loss) on disposal of subsidiaries/activities Financial result 4,105,435 7,501,303 -737,150 -420,664 -284,607 1,091,700 11,256,017 Result before tax 242,371 19,749,838 -3,082,663 4,752,266 924,479 2,978,450 25,564,741 - Income taxes -5,438,104 3,542,262 1,129,184 1,139,284 -224,339 995,677 1,143,964Result after taxes from continuing operations 5,680,475 16,207,576 -4,211,847 3,612,982 1,148,818 1,982,773 24,420,777

Result of theperiod 5,680,475 16,207,576 -4,211,847 3,612,982 1,148,818 1,982,773 24,420,777

tOtAl seGmeNt Assets 251,549,287 95,194,478 39,797,352 34,022,936 46,007,255 33,792,656 500,363,964tOtAl seGmeNt lIABIlItIes 133,087,342 35,966,005 18,080,041 10,360,808 8,689,329 7,539,532 213,723,057 INVestmeNtsINtANGIBle Assets 317,847 290,013 160,662 6,084 15,974 258,427 1,049,007INVestmeNts PROPeRtY, PlANt AND eQUIPmeNt 13,089,000 6,103,544 637,346 1,104,305 5,905,216 -1,827,389 25,012,022


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Belgium France UK the Netherlands Poland Others eliminations tOtAlin EUR 2008 2008 2008 2008 2008 2008 2008 2008Operating income 305,629,613 171,480,382 100,778,100 54,783,266 54,104,591 33,157,926 -148,798,612 571,135,266Sales to external customers 199,105,214 152,701,886 90,127,777 51,960,641 52,268,224 24,971,524 571,135,266Sales from transactions with other segments 106,524,399 18,778,496 10,650,323 2,822,625 1,836,367 8,186,402 -148,798,612 0Operating expenses -201,966,263 -146,217,548 -91,578,707 -49,199,537 -46,085,865 -23,214,467 -558,262,387 Impairment losses 1,000,000 -4,590,294 -3,590,294Result on disposal of fixed assets -682,235 -40,582 -282,277 1,709 -384,147 3,608 -1,383,924 Operating Cash Flow (eBItDA) 14,931,914 10,997,489 7,934,301 5,192,290 7,197,470 4,534,075 50,787,539 Operating result -3,543,284 6,443,756 -1,733,207 2,762,813 5,798,212 1,760,665 11,488,95 (eBIt) Gain (loss) on disposal of subsidiaries/activities 10,461,139 0 0 8,898,439 0 0 19,359,578 Financial result -9,816,327 -1,713,005 -2,908,766 -946,601 -2,252,628 709,860 -16,927,467 Result before tax -2,898,472 4,730,751 -4,641,973 10,714,651 3,545,584 2,470,525 13,921,066 - Income taxes -7,059,633 -43,418 -1,407,138 458,893 1,052,413 650,897 -6,347,986Result after taxes from continuing operations 4,161,161 4,774,169 -3,234,835 10,255,758 2,493,171 1,819,628 20,269,052

Result of theperiod 4,161,161 4,774,169 -3,234,835 10,255,758 2,493,171 1,819,628 20,269,052

tOtAl seGmeNt Assets 282,211,245 69,052,901 39,606,238 35,693,197 38,085,015 36,012,061 500,660,657tOtAl seGmeNt lIABIlItIes 169,836,014 25,156,765 13,975,880 7,998,256 8,656,363 7,755,131 233,378,409 INVestmeNtsINtANGIBle Assets 283,154 158,811 86,752 15,980 16,142 352,686 913,525INVestmeNts PROPeRtY, PlANt AND eQUIPmeNt 21,013,892 3,359,176 4,782,331 3,537,859 12,086,352 20,507,364 65,286,974

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II.1.5.7. GOODs AND seRVICes 2009 2008Transport -38,730,896 -39,710,374Energy supplies -23,583,193 -30,051,235maintenance Plant , Property & Equipment -26,916,387 -30,805,330marketing, sales and representation costs -4,761,881 -4,643,382Rent Buildings -4,103,518 -4,284,705Consulting -3,366,737 -3,911,894ICT services and supplies -3,441,414 -3,336,543Outsourcing -2,916,816 -3,003,313Waste removal -2,085,818 -2,253,098Rent machines and moter vehicles -2,631,979 -2,077,630Insurances -2,982,436 -1,826,757Other -5,655,447 -6,849,546total goods and services -121,176,522 -132,753,807

The other operating result decreased by 8,7% from € 132,8 m in 2008 to € 121,2 m in 2009, This decrease is mainly due to the decrease of energy supplies and the result of a general focus on cost reduction,

II.1.5.8. emPlOYee eXPeNses

In EuR 2009 2008Gross salaries and wages 91,729,545 88,666,839Social security charges 19,801,175 18,360,946Temporary Personnel 7,176,174 7,639,540legal insurance 4,294,944 4,458,182Other personnel expenses 3,436,035 3,086,538managers insurance 380,374 528,191Charges for Defined Benefit Plans 2,737,040 637,802 Provision Defined Benefit Plans 2,361,679 251,976 Contributions by the employer 375,361 385,826Provision other pensions and similar obligations 204,102 264,574total personnel expenses 129,759,389 123,642,612 Number of staff (*) Average number 3,123 2,950Total full-time equivalents 3,124 2,917(*) including temporary personnel

The total personnel expenses increased from € 123.6 m to € 129.8 m, or an increase by 4,9%. This increase is due, on the one hand, to the acquisition of ONDulyS SAINT quENTIN, and to the further development in Poland and Romania. On the other hand, € 2.6 m of additional provisions for personnel were created, mainly regarding the current pension plans. The personnel expenses excluding personnel provisions for pensions and termination of employment represent 25.0% in 2009 of the total operating expenses, compared to 22.1% in 2008.


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II.1.5.9. ImPAIRmeNt lOsses ON GOODwIll AND/OR FIXeD Assets

Impairments on non-current tangible assetsFollowing the closing of the paper factory in Selby (GB), the machines and installations of this unit, recorded in the sales contract, were accounted for at realisation price per 31 December 2008. In 2009 this sales contract was undone and there was proceeded to the recognition of an additional impairment of € 2.3 m. The book value of the installations and machines related to this paper-producing unit were thereby reduced to zero. Next to that an impairment of € 1.1 m was reversed, regarding the corrugated board activities in France. more specifically, the remaining impairment on the buildings, installations and machines of the production site in lomme (lille) were fully written-back, as re-localisation of the site is no longer necessary, due to the acquisition of ONDulyS SAINT quENTIN SAS.

GoodwillThe overview below shows the evolution of the goodwill attributed to the respective cash generating units:

In EuR 2009 2008Cores 5,577,225 8,577,225Corrugated board France 1,236,196 1,236,196Solid board 536,338 536,338Corrugated board GB 241,995 241,995Other 148,051 148,051total 7,739,805 10,739,805

Within the framework of the impairment test the realisable value of the respective cash generating units was calculated. The realisable value was based on the expected cash flows.

Following the impairment test on goodwill an impairment loss of € 3.0 m was recorded with regard to the goodwill recognised on the cores cash generating unit. This cash generating unit, to a large extent, is related to the industrial demand and is mainly situated in mature markets. The increasing industrial delocalisation of industrial clients in these mature markets, reinforced by the recent financial and economic crisis, required a revision of the future expectations of this division and resulted in this extraordi-nary impairment. For this impairment test, important assumptions were made. The most important management assessments relate more specifically to:

- cash flows:The future expected cash flows are based on approved budgets and financial plans over a period of 3 years, taking into account a limited growth of 2%. After this 3-year period a perpetuity was adopted, taking into account a 0% growth rate.Important parameters for the definition of expected cash flow are: market evolution, market share of the group in the related markets, raw materials prices and the evolution of sales. The assumptions are based on historic market evolutions, the current situation and the budgets. The estimates are carefully defined.

- the discount rate: This rate is based on a long-term average capital cost before taxes, in which the risks related to the expected cash flow are integra-ted. This discount rate has been defined at the level of the cash generating unit. The pre-tax discount rate applied to future cash flow amounts to 9.64% (8.82% in 2008).

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Cash generating unit cores - in K eUR Intangible assets 263Goodwill 8,577Tangible assets 28,984 37,824Present value net equity 34,600 Impairment -3,000

Sensitivity analysis indicated that an increase of the discount rate by 1% could entail an additional impairment of € 4 m, a sales decrease of 1% could lead to an additional impairment of € 1,2 m.

The calculations of the company values for the other cash generating units indicate that reasonable changes in the assumptions would not entail significant changes in the company values, which could lead to impairments, Also in this case, future cash flow is based on approved budgets and financial plans over a 3-year period, after which a perpetuity and a discount rate at the level of the cash generating unit are taken into account.

II.1.5.10. OtHeR OPeRAtING eXPeNses

In EuR 2009 2008Tax expenditure -6,923,086 -7,677,177Other -42,772 -172,553Other operating expenses -6,965,858 -7,849,730

The other operating expenses mainly comprise other corporate taxes, such as environmental taxes, property taxes, …

II,1,5,11, ResUlt ON DIsPOsAl OF sUBsIDIARIes/ACtIVItIes

2009 2008Gain (loss) on disposal of subsidiaries 0 19,359,578

This concerns the result from disposal of subsidiaries. The realised result in 2008 related to the capital gains on the sale of participations in Twinpack Bv and Doopa Nv.


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II.1.5.12. FINANCIAl ResUlt 2009 2008Interest income 509,989 1,739,212Interest costs -2,892,033 -6,542,680 Interest expenses on borrowing -2,831,544 -6,489,749 Interest expenses on financial lease -60,489 -52,931Other financial results and costs 13,638,061 -12,123,999 Negative Goodwill 8,305,347 140,348 Foreign currency differences 6,390,908 -10,565,872 Non realised foreign currency (losses)/gains 2,671,535 -6,956,011 Realised foreign currency (losses)/gains 3,719,373 -3,609,861 Others -1,058,194 -1,698,475 Bank charges -492,209 -433,064 Net (losses)/gains arising on derivatives -461,103 -1,120,477 Net (losses)/gains on disposal of financial assets -11,136 -138,890 Other financial (expenses)/income -93,746 -6,044Net financial result 11,256,017 -16,927,467

II.1.5.13. INCOme tAXes

tAX eXPeNses ReCOGNIseD IN INCOme stAtemeNt 2009 2008 Current income tax -5,111,641 -4,801,790Deferred tax 3,967,677 11,149,776total tax -1,143,964 6,347,986 Current year -5,390,621 -4,828,524under/(over) provided in prior years 278,980 26,734 total Current tax expense -5,111,641 -4,801,790 Origination and reversal of temporary differences 3,967,677 11,149,776Changes in tax rates, imposition new tax rates total deferred tax expense 3,967,677 11,149,776

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ReCONCIlIAtION BetweeN tHeORetICAl AND eFFeCtIVe tAX RAte 2009 taxable basis taxes %1. taxation on basis of applicable tax rate 8,689,455 1.1. Profit (loss) before tax 25,564,741 1.2. Applicable tax rate 33.99% 2. theoretical tax rate (*) 22.20% 3. effect of rates in other jurisdictions or special regimes -6,115,696 4. effect of non-taxable income -2,297,223 5. effect of non-deductible expenses 369,601 6. effect of recovered (applied) tax losses 1,307,156 7. effect of special tax status (Notional interest deduction) -791,484 9. Other increase (decrease) -17,845 10. taxation on basis of effective tax rate 1,143,964 10.1. Profit (loss) before tax 25,564,741 10.2. Effective tax rate 4.47%

(*) The theoretical tax rate is the weighted average tax rate of the company and all its consolidated subsidiaries.

2008 taxable basis taxes %1. taxation on basis of applicable tax rate 4,731,770 1.1. Profit (loss) before tax 13,921,066 1.2. Applicable tax rate 33.99% 2. theoretical tax rate (*) 29.10% 3. effect of rates in other jurisdictions or special regimes -4,424,068 4. effect of non-taxable income -6,580,321 5. effect of non-deductible expenses 209,074 6. effect of recovered (applied) tax losses 594,942 7. effect of special tax status (Notional interest deduction) -770,458 9. Other increase (decrease) -108,924 10. taxation on basis of effective tax rate -6,347,986 10.1. Profit (loss) before tax 13,921,066 10.2. Effective tax rate -45.60%

(*) The theoretical tax rate is the weighted average tax rate of the company and all its consolidated subsidiaries.


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The impact of ‘effect of rates in other jurisdictions or special regimes’ relates to the impact of the coordination centre (vPK SERvICES GvC) of vPK PACKAGING GROuP Nv. The recognition of the status of the coordination centre ends on 31 Decem-ber 2009. vPK SERvICES GCv will continue its current activities. The loss of the special tax regime as coordination centre will, to a large extent, be compensated by the application of the notional interest deduction by this subsidiary. The impact of tax-exempt income is mainly related to the incorporated negative goodwill and impairments on goodwill. In 2008 there was also the impact of tax-exempt capital gains on disposal of subsidiaries.

II.1.5.14. ResUlt PeR sHARe

The result per share has been calculated by dividing the result attributable to the owners of the parent by the weighted average of shares outstanding during the year (or the total number of shares minus the treasury shares).

The diluted profit per share has been calculated by dividing the profit attributable to the owners of the parent by the weighted average of shares outstanding during the year, taking into account the effect of a potential dilution of the ordinary shares due to the issued warrants within the framework of the warrant plan (see further Note II.1.5.27.5).

As January 2009 was the last execution period, as foreseen in the plan, and consequently all non-executed warrants expired after this period, there is no potential dilution anymore per end of 2009.

In EuR 2009 2008 1. Weighted average of shares outstanding 8,192,397 8,289,8602. Diluted weighted average of shares outstanding 8,192,397 8,308,232 1. Result of the period per share 1.1. Excluding discontinued operating activities 2.98 2.38 1.2. Including discontinued operating activities 2.98 2.382. Diluted result of the period per share 2.1. Excluding discontinued operating activities 2.98 2.37 2.2. Including discontinued operating activities 2.98 2.37

II.1.5.15. ACQUIsItION AND DIsPOsAl OF sUBsIDIARIes

II.1.5.15.1. ACQUISITION Of SUbSIdIARIES

Within the framework of the further development in France, the group acquired on 2 February 2009 100% of the shares of the mondi corrugated board plant in Saint-quentin (France). This corrugated board plant, situated in the North of France (Picardie) realised a turnover of € 48 mio in 2008 and produced 100 million m2/year of tailor-made packaging, mainly for the food industry and FmCG producers. This modern branch was built “Greenfield” in 1992. vPK PACKAGING GROuP Nv has the intention to extend the machinery within two years. The acquisition of ONDulyS SAINT quENTIN SAS has replaced vPK PACKAGING GROuP Nv’s project for the construction of a greenfield plant in the North of France. The current corrugated board plant of ONDulyS in lille remains complementary and will specialise in packaging solutions with high added value and a high service level. Oudegem Papier (BE) will be the main paper supplier of the Saint-quentin plant.

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The acquisition price amounts to € 13,192,000 and has been split up as follows:

The acquired assets and liabilities Pre- acquisition Adjustment Recognisedin K EuR carrying amount to fair value at acquisition dateIntangible Assets 58 58Property, plant and equipment 17,579 -89 17,490Financial fixed assets 49 -46 3total non-current assets 17,686 -135 17,551Inventories 2,084 549 2,633Trade and other receivables 13,436 13,436Cash and cash equivalents 277 277total current assets 15,797 549 16,346Pension obligations -758 -60 -818Provisions -143 -143Deferred Tax -959 -87 -1,046leasing debt 0 0total non-current liabilities -1,860 -147 -2,007Current Account mondi Services -8,192 -8,192Current maturuties debts -459 -459Trade liabilities -7,300 -7,300Social liabilities -1,403 -1,403Other liabilities -1,244 -1,244total current liabilities -18,598 -18,598NET IDENTIFIABlE ASSETS AND lIABIlITIES 13,025 267 13,292 Negative Goodwill on acquistion -8,292> Cost of acquisition satisfied in cash 5,000> Acquisation current account mondi Services 8,192> less - Paid by the non controlling interest 0total acquisation price in K euro 13,192

The negative goodwill (badwill) for an amount of € 8,291,000 was recorded under the financial results. This profit was realised as the acquisition price stood below the net asset value of the acquired activities. The latter was the consequence of a.o. the general economic crisis context, the exit strategy of the selling party to fully withdraw from the corrugated board activity in Western Europe, the recent history of the results of the production plant concerned, and the necessity for important investments in order to realise substantial performance improvements. The purchase price allocation was concluded in the course of 2009. ONDulyS SAINT quENTIN SAS has not realised any profit nor loss over the period 1 January 2009 till 2 February 2009.


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II.1.5.15.2. dISPOSAL Of SUbSIdIARIES

On 30 April 2009 the 100% stake of the group in COREX Denmark A/S was transferred. The sales price amounted to € 108,617 and was received in 2009. The net asset value at disposal is presented below:

Assets and liabilities transferred Book value atin K EuR transferIntangible Assets 0Property, plant and equipment 0Financial fixed assets 0Deferred Tax assets 272total non-current assets 272Inventories 0Trade and other receivables 0Cash and cash equivalents 0total current assets 0Pension obligations 0Provisions 0Deferred Tax 0total non-current liabilities 0Short-term loans and borrowings 0Trade liabilities 0Social liabilities 0Other liabilities -151total current liabilities -151Net IDeNtIFIABle Assets AND lIABIlItIes 121

Transfer price received in cash 109loss on transfer -12

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II.1.5.16. INTANgIbLE ASSETS

Development Concessions, total costs patents, licences,2009 etc.COst OR VAlUAtION Opening Balance 40,022 11,686,985 11,727,007Entry in the consolidation scope 0 244,247 244,247Acquisitions 0 1,049,006 1,049,006Transfers 0 1,657 1,657Disposals -422 -19,084 -19,506Exchange Difference 0 49,582 49,582ending Balance 39,600 13,012,393 13,051,993 AmORtIZAtION Opening Balance -21,570 -8,266,598 -8,288,168Entry in the consolidation scope 0 -186,047 -186,047Amortization -7,920 -1,258,399 -1,266,319Impairment losses 0 -12,814 -12,814Disposals 262 19,084 19,346Exchange difference 0 -55,541 -55,541ending Balance -29,228 -9,760,315 -9,789,543 CARRYING AmOUNt At eND OF 31/12/2009 10,372 3,252,066 3,262,450

CARRYING AmOUNt At eND OF 31/12/2008 18,452 3,420,387 3,438,839


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Development Concessions, total costs patents, licences,2008 etc.COst OR VAlUAtION Opening Balance 39,600 11,061,045 11,100,645Entry in the consolidation scope 422 913,103 913,525Acquisitions 0 39,321 39,321Transferts 0 -3,955 -3,955Disposals 0 -25,726 -25,726Exchange Difference 0 -296,803 -296,803ending Balance 40,022 11,686,985 11,727,007 AmORtIZAtON Opening Balance -13,389 -6,855,597 -6,868,986Entry in the consolidation scope 0 0 0Amortization -8,181 -1,634,230 -1,642,411Impairment losses 0 3,955 3,955Disposals 0 6,223 6,223Exchange difference 0 213,051 213,051ending Balance -21,570 -8,266,598 -8,288,168 CARRYING AmOUNt At eND OF 31/12/2008 18,452 3,420,387 3,438,839

CARRYING AmOUNt At eND OF 31/12/2007 26,211 4,205,448 4,231,659

The additional investments in non-current intangible assets mainly concern further investments related to implementing the ERP-information system SAP used by the group. The increase as a consequence of business combinations concerns the non-current intangible assets taken over as a consequence of the acquisition of ONDulyS SAINT quENTIN SAS (with a net carrying amount of € 58,200). At balance sheet date there are no non-current intangible assets with an indefinite use. The amortizations are recorded in the consolidated results under the item operating expenses – depreciations. All non-current intangible assets are free and tax-exempt. At balance sheet date the group has no contractual obligations for the acquisition of non-current intangible assets.

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II.1.5.17. gOOdwILL

2009 local goodwill Consolidation Goodwill totalCOst OR VAlUAtION Opening Balance 1,618,650 13,856,061 15,474,711Disposals -1,548,173 0 -1,548,173Exchange Difference 79,296 0 79,296ending Balance 149,773 13,856,061 14,005,834 AmORtIZAtION Opening Balance -1,468,877 -3,116,256 -4,585,133Impairment losses 0 -3,000,000 -3,000,000Disposals 1,548,173 0 1,548,173Exchange difference -79,296 0 -79,296ending Balance 0 -6,116,256 -6,116,256 CARRYING AmOUNt At eND OF 31/12/2009 149,773 7,739,805 7,889,578CARRYING AmOUNt At eND OF 31/12/2008 149,773 10,739,805 10,889,578 2008 local goodwill Consolidation Goodwill totalCOst OR VAlUAtION Opening Balance 1,913,389 15,057,906 16,971,295Entry in the consolidation scope 0 75,051 75,051variation of the scope 0 -402,266 -402,266Acquisitions 125,000 0 125,000Fair value adjustments 0 0 0Annulation 0 -874,630 -874,630Exchange Difference -419,739 0 -419,739ending Balance 1,618,650 13,856,061 15,474,711 AmORtIZAtION Opening Balance -1,888,616 -3,332,627 -5,221,243Impairment losses 0 -139,440 -139,440Disposals 0 355,811 355,811Exchange difference 419,739 0 419,739ending Balance -1,468,877 -3,116,256 -4,585,133 CARRYING AmOUNt At eND OF 31/12/2008 149,773 10,739,805 10,889,578CARRYING AmOUNt At eND OF31/12/2007 24,773 11,725,279 11,750,052

For the composition of and impairments on Consolidation goodwill – see Note II.1.5.9 Impairment losses on goodwill and/or fixed assets.The local goodwill relates to the customer base taken over by subsidiaries. The fully amortised amounts were dispoded of over the past year.


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II.1.5.18. PROPERTY, PLANT ANd EQUIPmENT

2009

COst Opening Balance 144,631,924 481,180,803 2,723,867 24,326,602 2,794,548 31,483,287 687,141,031Entry in the consolidation scope 10,320,349 33,676,775 0 793,737 0 244,680 45,035,541Acquisitions 7,101,546 15,193,220 21,761 2,550,266 0 145,229 25,012,022Transfers 11,795,856 10,685,954 0 109,667 0 -22,593,134 -1,657Disposals -741,340 -8,912,026 0 -1,511,387 -1,299,632 -167,891 -12,632,276Exchange difference 1,932,677 4,673,146 17,494 272,561 110,453 -808,619 6,197,712ending Balance 175,041,012 536,497,872 2,763,122 26,541,446 1,605,369 8,303,552 750,752,373DePReCIAtION AND ImPAIRmeNtOpening Balance -48,301,260 -313,279,339 -1,102,350 -19,449,915 -2,874,632 -2,000,000 -387,007,496Entry in the consolidation scope -3,397,643 -23,463,926 0 -683,940 0 0 -27,545,509Depreciations -4,616,661 -21,888,313 -759,456 -2,270,375 -21,527 0 -29,556,332Charge for the year on capital grants 57,841 53,558 0 0 0 0 111,399Reversals 0 0 0 0 0 2,000,000 2,000,000Impairment losses 0 -1,143,567 0 0 0 0 -1,143,567Transfers -153,699 -4,079 2,390 -49,233 204,622 0 1Disposals 735,236 7,681,164 0 1,462,495 1,283,294 0 11,162,189Exchange difference -293,003 -2,948,920 -9,371 -258,526 -106,859 0 -3,616,679ending Balance -55,969,189 -354,993,422 -1,868,787 -21,249,494 -1,515,102 0 -435,595,994

CARRYING AmOUNt At eND OF 31/12/2009 119,071,823 181,504,450 894,335 5,291,952 90,267 8,303,552 315,156,379CARRYING AmOUNt At eND OF31/12/2008 96,330,664 167,901,464 1,621,517 4,876,687 -80,084 29,483,287 300,133,535 CARRYING AmOUNt OF PP&e UNDeR FINANCe leAse 2,807,535 965,028 0 160,678 0 0 3,933,241

CARRYING AmOUNt (-) OFPP&e CAPItAl sUBsIDIes -377,075 -77,421 0 0 0 0 -454,496

land & buiding

machinery and Equipment

Spare Parts Furnitures & vehicles

Other tangible F.A.

Assets under constr. & down-

payments

Total

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2008

COst Opening Balance 149,671,656 480,373,489 2,086,970 26,580,300 3,331,738 7,715,245 669,759,398Entry in the consolidation scope 0 0 0 0 0 0 0variation of the scope 0 985,416 0 340,992 918 0 1,327,326Acquisitions 4,975,621 24,185,843 683,143 2,764,793 32,725 32,644,849 65,286,974Transfers 1,481,066 3,268,714 32,400 77,103 0 -4,898,604 -39,321Disposals -2,849,331 -7,697,028 -24,658 -880,370 -990 -786,656 -12,239,033Disposals of group companies -2,096,436 -2,525,884 0 -3,392,193 -35,580 0 -8,050,093Exchange difference -6,550,652 -17,409,747 -53,988 -1,164,023 -534,263 -3,191,547 -28,904,220ending Balance 144,631,924 481,180,803 2,723,867 24,326,602 2,794,548 31,483,287 687,141,031DePReCIAtION ANDImPAIRmeNtOpening Balance -46,956,453 -304,127,456 -372,025 -21,829,829 -1,640,238 0 -374,926,001Entry in the consolidation scope 0 0 0 0 0 0 0variation of thescope 0 -64,724 0 -116,512 -768 0 -182,004Depreciation -3,848,491 -21,860,994 -759,416 -2,237,935 -230,721 -2,000,000 -30,937,557Charge for the year on capital grants 42,502 86,557 0 93 18,177 0 147,329Impairment losses -61,931 -1,997,622 0 -2,830 -1,527,910 0 -3,590,293Transfers 0 -27,017 0 3,663 23,354 0 0Disposals 601,389 2,628,469 0 756,192 12,256 0 3,998,306Disposals of group companies 1,038,885 1,243,413 0 2,993,188 34,476 0 5,309,962Exchange difference 882,839 10,840,035 29,091 984,055 436,742 0 13,407,155ending Balance -48,301,260 -313,279,339 -1,102,350 -19,449,915 -2,874,632 -2,000,000 -386,773,103CARRYING AmOUNt At eND OF 31/12/2008 96,330,664 167,901,464 1,621,517 4,876,687 -80,084 29,483,287 300,133,535CARRYING AmOUNt At eND 31/12/2007 102,715,203 176,246,033 1,714,945 4,750,471 1,691,500 7,715,245 294,833,397CARRYING AmOUNt OF PP&e UNDeR FINANCe leAse 2,966,290 1,069,163 204,030 4,239,483CARRYING AmOUNt (-) OFPP&e CAPItAl sUBsIDIes -478,945 -130,979 -609,924

land & buiding

machinery and Equipment

Spare Parts Furnitures & vehicles

Other tangible F.A.

Assets under constr. & down-

payments

Total


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In 2009 a total of € 25.0 m was invested in property, plant and equipment. The main investments were the further investments follo-wing the conversion of paper machine 7 (Pm7) in Oudegem (BE), the development of the new corrugated board plant in Salonta (RO) and the development of a second Polish sheet feeder in Radomsko. Next to that, there was een increase of € 17,5 m (net carrying amount) following the acquisition of ONDulyS SAINT quENTIN SAS.

The depreciations on fixed tangible assets amounted to € 27.4 m for 2009 compared to € 30.8 m in 2008. The decrease of the de-preciations is, a.o. the consequence of a write-back of € 2 m of depreciations on the advance payments in 2008 for the investments regarding the project in Central Europe (new paper machine), transferred in 2009 as advance payments on the investments in 2010 in the de paper plant in Oudegem.

The tangible fixed assets are subject to an impairment test when there are indications that these items should be impaired. Con-cerning the net amount of impairments for the financial year 2009 for an amount of € 1.1 m – see Note II.1.5.9 Impairment losses on goodwill and/or fixed assets.

€ 22.6 m was transferred from the item tangible fixed assets under construction to the respective items “land and buildings” € 11.8 m and € 10.7 m mainly related to the extension of the warehouse of the corrugated board plant in Selby (GB), the start-up of the corrugated board plant in Salonta (RO) and the sheet feeder in Radomsko (Pl).

In total a net amount of € 1.5 m was written-down following the disposals of machinery and installations, mainly related to the closed paper plant in Selby (GB).

The fixed tangible assets are acquired and are the full property of vPK PACKAGING GROuP Nv and are free and tax-exempt.

At balance sheet date there are contractual obligations to acquire tangible fixed assets for an amount of € 8.9 m.

II.1.5.19. OTHER fINANCIAL ASSETS AvAILAbLE fOR SALE

Other shares Guarantees and others tOtAlCOst Opening Balance 205,914 96,648 302,562Acquisitions 43,624 10,454 54,078Disposals -26,875 0 -26,875Increase (decrease) due to exchange rate differences 767 0 767ending Balance 223,430 107,102 330,532 CARRYING AmOUNt At eND OF 31/12/2009 223,430 107,102 330,532

CARRYING AmOUNt At eND OF 31/12/2008 205,914 96,648 302,562

Below is an overview of the main items and the main changes herein. The other financial assets represent different non-consoli-dated stakes between 0% and 20%.

Other shares and guarantees 31-12-08 + - 31-12-09Biocogen 2 120,000 120,000Torr Coal 55,000 43,500 26,875 71,625Other shares 30,914 891 31,805Guarantees 96,648 10,454 107,102 302,562 54,845 26,875 330,532

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II.1.5.20. INTEREST bEARINg LOANS ANd RECEIvAbLES 2009 2008Trade receivables 1,709 0Interest bearing loans and receivables 775,750 37,499tOtAl 777,459 37,499

Due within one year 0 0Due in the second to fifth year inclusive 121,709 0Due after five years 655,750 37,499tOtAl 777,459 37,499

The increase is mainly related to the granting of new borrowings.

II.1.5.21. INvENTORIES

Gross value 2009 2008Raw materials and consumables 28,274,661 25,795,642Work-in-progress 1,958,196 1,708,796Finished products 23,198,664 22,851,805Trade goods 2,439,034 2,594,667Spare parts 4,360,530 3,842,024Advances paid 46,077 46,359Contracts in progress 0 62,976total inventory 60,277,162 56,902,269 2009 2008 Detail of impairment losses on inventory is as follows Raw materials and consumables -565,658 1,195,476 -170,744 317,937Goods under construction -20,630 41,260 0 0Finished products -514,128 856,860 -476,963 794,938Consumables -65,313 115,876 -56,684 101,221total allowance -1,165,729 2,209,472 -704,391 1,214,096

Net book values 2009 2008Raw materials and consumables 27,709,003 25,624,898Goods under construction 1,937,566 1,708,796Finished products 22,684,536 22,374,842Consumables 2,373,721 2,537,983Spare parts 4,360,530 3,842,024Advances paid 46,077 46,359Contracts in progress 0 62,976total 59,111,433 56,197,878

Gross value of inventory carried at net realisable value

Impairment losses

Gross value of inventory carried at net realisable value

Impairment losses


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Variation of write-downs on inventory Balance at end of previous year -704,391 Entry in the consolidation scope -106,073 variation balance of write-downs (write ups) on inventory -355,265 Balance at end of year -1,165,729

The inventories increased from € 56.2 m per end of 2008 to € 59.1 m per end of 2009. In 2009 a total amount of write-downs of € 355,265 was accounted for. The remaining increase of the total amount of write-downs can be related to the amount recorded following the acquisition of ONDulyS SAINT quENTIN SAS. Per end of 2009, the total amount of write-downs amounts to € 1.2 m. These write-donws relate to inventories with a gross value of 2.2 m, for which the realisation value has been defined at € 1.0 m. The inventories are free and tax-exempt.

II.1.5.22. TRAdE RECEIvAbLES 2009 2008Trade receivables gross 70,375,691 94,138,272Doubtful debtors 4,416,010 2,476,186Trade receivables (write-off) -3,450,374 -2,029,222tOtAl 71,341,327 94,585,236 Allowance for doubtful account Balance at end of previous year -2,029,222 -1.963.658 Entry in the consolidation scope -1,342,359 0variation balance of write-downs (write ups) on inventory -594,525 -808.183 Others 515,732 742.619Balance at end of year -3,450,374 -2.029.222 Overview aging trade Receivables Not overdue 61,118,558 85,410,439 Overdue < 30 days 6,828,036 5,842,477 Overdue > 30 days 1,457,075 2,057,387 Overdue > 60 days 267,758 342,056 Overdue > 90 days 312,293 188,452 Overdue > 120 days 391,971 297,461total aging balance 70,375,691 94,138,272

The trade receivables have decreased by € 23.2 m to a level of € 71.3 m. This change is the consequence of a focus on the outstanding client credit and of the recurrent sale of part of the portfolio of trade receivables to a financial institution, started-up mid-June 2009. Per end of December 2009 the amount of receivables sold within this program amounted to € 18.4 m. There is a possibility to expand this program to € 35 m.

The increase of impairments on trade receivables can mainly be related to the acquisition of ONDulyS SAINT quENTIN SAS.

Over 2009 vPK PACKAGING GROuP Nv has a credit insurance for 74% of sales. Strict internal procedures and rules exist to follow up clients and to effectively identify and control potential risks. Next to this, the spread of the client portfolio (main client repre-

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sents less than 1% of sales) ensures a natural decrease of these risks. Provisions for un-collectable receivables are created in due time. The credit insurance policy will be continued in 2010.

II.1.5.23. OTHER CURRENT ASSETS 2009 2008vAT and taxes receivable 4,429,960 5,976,126Other receivables 3,658,011 435,652 including - continuing involment sold invoices TRPP (*) 2,256,451 0 - deposits sold invoices TRPP (*) 1,300,471 0Deferred charges and accrued income 4,010,418 3,832,276 including - prepaid insurance costs 0 675,498 - provisions for volume discounts suppliers 1,619,936 1,348,145 - provisions for environmental certificates 2,096,098 1,335,896Other current assets 12,098,389 10,244,054 (*) TRPP = Trade Receivables Purchase Program

Within the framework of the recurrent sale of a part of the portfolio of trade receivables within the Trade Receivables Purchase Program (see also trade receivables), on the one hand, a receivable was created and at the same time a liability towards a finan-cial institution with regard to the continued involvement and, on the other hand, for a part of the amount of the sold receivables, a receivable as a guarantee towards this financial institution (see also Note II.1.5.32). The receivable and the liability following the continued involvement concern 10% of the amount of trade receivables sold, or the part for which the risk is not covered by the credit insurance (own risk of 10%).

II.1.5.24. CASH ANd CASH EQUIvALENTS 2009 2008Short-term deposits 14,468,130 16,743,734Cash and current accounts 10,310,457 6,218,212Cash and cash equivalents in the balance sheet 24,778,587 22,961,946

Short-term deposits are concluded over different periods between one day and three months, depending on the immediate cash need of the group and receive interests on short-term deposits.


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II.1.5.25. fINANCIAL INSTRUmENTS

Except if mentioned differently in the table below, it is the management’s opinion that the financial assets and liabilities valued at amortized cost, approach the fair value.

The carrying amounts included in the balance, refer to the following categories within the financial assets and liabilities:

2009 2008 Carrying value Fair value Carrying value Fair valueFINANCIAl Assets Financial assets available for sale 223,430 223,430 205,914 205,914 loans and receivables - Trade and other receivables 84,217,175 84,217,175 104,866,790 104,866,790 - Cash and cash equivalents 24,778,587 24,778,587 22,961,946 22,961,946 FINANCIAl lIABIlItIesFinancial and other loans - Trade and other payables 83,191,050 83,191,050 70,927,460 70,927,460 - loans and borrowings 90,871,877 90,871,877 126,502,547 126,502,547 - leasing and simular obligations 1,135,784 1,135,784 1,511,735 1,511,735 Financial liability at fair value - Interest rate swaps 517,588 517,588 56,485 56,485

The fair value of the financial assets and liabilities are defined as follows:

The fair value of the financial assets and liabilities is recorded at the amount for which the instrument can be swapped in a current transaction between interested parties, different than in the case of a forced sale or liquidation. The following methods and as-sumptions are used to estimate the fair value:

- Cash and short-term deposits, trade receivables, trade debts and other short-term debts approach their carrying amount to a large extent, due to the short term expiry of these instruments; - long-term fixed interest and variable interest rate receivables / debt are valued by the group based on parameters such as interest rate, country-specific risks, individual creditworthiness of the client and risk factors of the financed project. Based on this evaluation the impairments are recorded, taking into account the expected loss on these receivables. On 31 December 2009 the carrying amount of these receivables, after deduction of impairments, does not differ substantially from their calculated fair value; - loans of banks and financial liabilities, liabilities from financial leasing and other non-current liabilities are calculated based on the discounted value of future cash flow for the main sum and interests against a discount rate in accordance with the market rate with prices currently available on debt at comparable conditions, credit risks and remaining durations; - Fair value of financial assets available for sale of non-listed financial assets available for sale is calculated based on generally approved valuation techniques;

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- vPK PACKAGING GROuP Nv has derivative financial instruments with counterparty financial institutions. The technique applied uses cash value calculations using interest rate curves.

The group hedges certain transactions risks by using Interest Rate Swaps (IRS). These IRS are not appointed as fair value hedge, cash flow hedge or hedge of a net investment and are concluded for a period almost corresponding to the interest rate risk related to the transaction. The fair value of the interest rate swap at balance sheet date is defined by the actualisation of the expected cash flow from the contract, and this by using the current market interest rate and the interest rate curve for the remaining dura-tion of the instrument and taking into account the inherent credit risk for this type of contracts. The decrease of the fair value of the current and newly concluded IRS contracts in 2009 amounted to € - 461,103 and is recognised in the financial charges (2008: € -1,120,477).

The following table provides an analysis of the financial assets and liabilities which are measured at fair value under a fair value hierarchy, where

• Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices); • Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs)

No transfers between the levels took place during the fiancial year.

31/12/09 level 1 level 2 level 3 total- Intrest rate swaps 517,588 517,588

II.1.5.26. fINANCIAL RISk mANAgEmENT

II.1.5.26.1. fInanCIal RIsk ManaGeMent

The group is subject to risks related to fluctuations of exchange rates, interest rates and market prices of the raw materials used by the group, i.e. old paper, starch and energy. These factors have an impact on the assets and liabilities and on the results of the group. The financial risk management aims at reducing the effects of the factors mentioned above on the performance and the financial position of the group.

The group manages a portfolio of financial instruments to hedge risks related to interest rate and exchange rate positions as a result of the company and financial activities. It is group policy not to participate in speculative or leverage transactions, nor to hold or issue financial instruments for trading.

II.1.5.26.2. InteRest Rate RIsk ManaGeMent

In an interest rate swap agreement (IRS) the group commits itself to pay or receive the difference between the interest amount calculated at a fixed and variable interest rate calculated based on a nominal amount. These type of contracts allow the group to compensate changes that are the consequence of interest rate changes. These agreements are concluded for a period which almost corresponds to the risk inherent to the transaction. An overview of the current IRS contracts is presented on the next page.


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Currency eUR Financial year 2009 Financial year 2008 start date end date 2010 2011 2012 2013 2009 2010 2011 201229/09/2006 30/09/2010 10,000,000 0 0 0 20,000,000 10,000,000 0 031/12/2010 31/12/2013 0 30,000,000 20,000,000 10,000,000 31/12/2011 31/12/2013 0 0 10,000,000 20,000,000

A current interest rate option contract for which the variable interest rate has been swapped against a fixed interest rate of € 10 m expires on 30/09/2010. Additional interest rate option contracts with a deferred start date were concluded due to which, as from 31/12/2010, for an amount of € 30 m of non-current liabilities, the variable interest rate will be swapped against a fixed interest rate till the end of 2013.

II.1.5.26.3. sensItIVItY analYsIs foR InteRest Rate RIsks

The sensitivity analysis takes into consideration on the one hand, the direct effect of an interest rate change on the interest expenses, and on the other hand, the effect on the value of the derivative financial instruments i.e. the interest rate swaps.

If the interest rates would increase by 100 base points, the interest expenses increase by € 936,000, but the fair value of the interest rate swaps increases by € 994,000. The net effect on the result is an increase of the costs by € 58,000.

If the interest rates would decrease by 100 base points, the interest expenses decrease by € 468,000, but the fair value of the interest rate swaps decreases by € 498,000. The net effect on the result is an increase of the costs by € 30,000.

II.1.5.26.4. ManaGeMent of exChanGe Rate RIsks

It is company policy to hedge exchange rate risks from financial and company activities, on the one hand, by aiming at a natural hedge, and on the other hand, by the conclusion of forward and swap-currency contracts.

In 2009 23.6% of sales was realised in non-euro countries (27.5% in 2008). Of these non-euro countries, the activities in the uK (12.7%) and Poland (8.1%) are the most important. Purchases and sales in these countries mostly occur in local currency. Next to that, vPK SERvICES GCv has the function of an in-house bank for all local and foreign subsidiaries of vPK PACKAGING GROuP Nv, resulting in financing positions between them.

As well within the subsidiaries as within vPK SERvICES GCv there is aimed at a natural hedge of the receivables and liabili-ties (i.e. equal exchange rate risks at the level of receivables and liabilities), and at balancing the respective cash in-flow and out-flow in order to neutralise the exchange rate risk. vPK PACKAGING GROuP Nv also concludes swap-currency contracts and forward contracts in order to hedge exchange rate risks related to foreseen sales and purchases, i.e. purchase of coal in uSD.

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in EuR Nominal market to market amount value per 31/12 Overview of forward contracts uSD Selling forward contracts < 6 months 201,194 5,809GBP Selling forward contracts < 6 months 1,663,770 -25,169Overview of swap-currency contracts uSD/EuR Selling / purchase contracts 248,303 8,502

II.1.5.26.5. sensItIVItY analYsIs of exChanGe Rate RIsks

The group is mainly exposed to the British Pound (GBP) and the Polish Zloty (PlN). The sensitivity analysis comprises as well the deposits, the debts, as well as the internal financing within the group, where the currency of the transactions differ from the local currency of the borrower and lender. The table below presents the profit (loss) in case of a strenghtening of the EuR by 10% compared to the closing price at the end of 2009.

Nominal amount Closing rate Gain(+) in currency 2009 +10% / loss(-)EuR/GBP 10,000,000 0.8881 0.9769 -1,023,636EuR/PlN 37,720,000 4,1045 4,5150 -835,447

II.1.5.26.6. lIQuIdItY RIsk

The current credit crunch leads to liquidity problems in some areas. vPK PACKAGING GROuP Nv has built up a satisfactory resistance against this risk from its strong balance sheet and liquidity position. The financing sources are well diversified and the main part of its debt is concluded irrevocably and for the long term (see Note – II.1.5.31) moreover, the group disposes of sufficient space on increased credit lines to guarantee the necessary liquidity to ensure future activities and comply with financial liabilities in the short and long term.

A number of interest carrying loans are subject to covenants based on the EBITDA (leverage) and the solvency ratio. Per end 2009 vPK PACKAGING GROuP Nv met all its bank covenants. Based on the 2010 budget, the management expects to meet its bank covenants in the coming year.

II.1.5.26.7. CapItal RIsk ManaGeMent

The objectives of the group as to capital risk management relate to ensuring the continuity of the activities, the return for the sharehol-ders, the interests of other stakeholders and an optimal balance with regard to the financing structure.

The group bases its evaluation with regard to this matter on the relation of the net financial debt compared to its shareholders’ equity for which the net financial debt comprises the long and short term financial debts, minus the cash and cash equivalents.


101

Evolution of the leverage ratio as defined above: 2009 2008Net financial debt (in € mio) 67.8 105.3Shareholders’ equity (in € mio) 286.6 267.3leverage ratio (in %) 23.6% 39.4%

The capital structure of the group can also be controlled by the dividend policy, capital distribution, acquisition of treasury shares, issuing of shares or debt decrease.

II.1.5.26.8. CRedIt RIsk

Over 2009 vPK PACKAGING GROuP Nv has insured 74% of sales. There are strict internal procedures and rules to follow up clients and promptly and effectively identify and control potential risks. Next to that, the spread of the client portfolio (largest client represents less than 1% of sales) leads to a natural decrease of these risks. Provisions for un-collectable receivables are created in a timely manner. The credit insurance policy will be continued in 2010.

II.1.5.26.9. MaRket RIsk: Raw MateRIals and sales pRICes

The risk of adverse consequences of fluctuations in raw materials prices is limited by the conclusion of forward contracts at a fixed price. This mainly concerns raw materials, such as old paper, energy, and starch.On the selling side the objective is to reach a solid number of annual contracts with fixed price indexing.

II.1.5.27. SHARE CAPITAL

II.1.5.27.1. shaRe CapItal

share capital in EuR 2009 2008On 1 January 21,110,254 21,083,467On 31 December 21,145,604 21,110,254 Number of shares 2009 2008On 1 January 8,770,716 8,769,275On 31 December 8,772,742 8,770,716minus own shares on 31 December -606,209 -539,997Total authorised number of ordinary shares on 31 December 8,166,533 8,230,719weighted average of shares outstanding on 31 December 8,192,397 8,289,860

sHARe CAPItAlIn the financial year 2009 the registered capital was increased by one instalment of € 35,349.50 through the issuing of 2,026 new shares within the framework of the Warrant plan (see further). Afterwards there were no changes anymore in the registered capital. Per 31 December 2009 the share capital of the company amounts to € 21,145,603.71 and is represented by 8,772,742 shares, with no face value, each representing one/eight million seven hundred seventy-two thousand seven hundred forty two of the capital and of which 672,742 shares are vvPR-shares (reduced withholding tax). All shares are fully paid.

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AUtHORIseD CAPItAlFor a period of five years taken from the publication of the deed containing the amendments to the articles of association of 25 April 2008 in the appendices to the Belgian Bulletin of Acts and Decrees, the board of directors is authorised to increase the issued capital on one or more occasions by the sum of twenty million nine hundred and seventy- four thousand five hundred and ninety-six euros (€ 20,974,596).This authority applies to capital increases that must be subscribed to in ready money and to increases subscribed to in kind. This authority of the board of directors also applies to capital increases by conversion of reserves of any nature, including issue premi-ums, revaluation gains and retained earnings.

This authority of the board of directors may be renewed.

The decision of the general meeting of 25 April 2008, to renew the authorisation to increase the issued capital on one or more occasions within the framework of the authorised capital, was published in the appendices to the Belgian Bulletin of Acts and Decrees of 19 may 2008.

When issuing securities within the authorised capital, the board of directors is hereby also empowered by the general meeting of shareholders, on the basis of a resolution passed in accordance with the provisions of section 560 of the Belgian Companies Code, to change the respective rights of such existing classes of share or security as represent some or all of the capital.

Besides issuing shares, convertible bonds and warrants, the capital increase resolved upon by the board of directors may also take place by the issue of shares without voting rights, shares with a preferential right to a dividend and preferential rights on liquidation, and of convertible shares that, under specified conditions, convert into a greater or lesser number of shares.

Within the limits of the authorised capital, the board of directors is authorised, if it is in the interests of the company, to suspend or restrict the right of first refusal accorded to the shareholders by statute, subject to observance of Sections 592 and following the Belgian Companies Code.

The board of directors is empowered to suspend or restrict the right of first refusal in favour of one or more specified persons, even if they are not employees of the company or its subsidiaries.

On the occasion of an increase in the issued capital made within the limits of the authorised capital, the board of directors is authorised to demand an issue premium. If the Board of Directors so resolves, such issue premium must be posted to a non-distri-butable account that can only be reduced or derecognised by resolution of the general meeting passed in the manner required for an amendment to the articles of association.

In the absence of any express authority granted by the general meeting to the board of directors, the authority of the board of directors to increase the issued capital by contribution in ready money with suspension or restriction of the right of first refu-sal of existing shareholders or by contributions in kind shall be suspended from the date of notification to the company by the Belgian Banking, Finance and Insurance Commission (Commissie voor het Bank-, Financie- en Assurantiewezen – CBFA) of a public takeover bid for the shares in the company. Such authority shall come back into effect immediately such a takeover bid has been completed.

The general meeting of 25 April 2008 renewed the authority of the board of directors, with effect from the date of notification to the company by the CBFA of a public purchase offer for the shares in the company by contribution in ready money with suspension


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or restriction of the right of first refusal of existing shareholders or by contributions in kind, to increase the issued capital on one or more occasions in accordance with Section 607 of the Belgian Companies Code. This authority is granted for a period of three years from the date of publication of this resolution in the Appendices to the Belgian Bulletin of Acts and Decrees on 19 may 2008, and may be renewed.

The board of directors has the authority to amend the articles of association of the company in accordance with a capital increase resolved upon within the limits of its authority.

BeAReR sHARes, ReGIsteReD OR DemAteRIAlIseD sHAResAs a consequence of the amendments to the articles of association of 28 February 2008 the shares of the company are registe-red or dematerialised. The bearer shares not transferred to a securities account on 1 January 2008, are dematerialised as from that date. The other bearer shares, as they are transferred to a securities account as from 1 January 2008 are also automatically dematerialised.

II.1.5.27.2. shaReholdeR stRuCtuRe

On 31 December 2009 the breakdown of the shareholder structure is as follows:

Notification date Number of sharesStichting Administratiekantoor 26/11/08 7,199,999Packaging Investments Treasury shares 31/12/09 606,209

■ Stichting Administratiekantoor Packaging Investments 82.07%■ Individual and institutional investors 11.02%■ Treasury shares 6.91%

II.1.5.27.3. tReasuRY shaRes

Redeemed own shares in EuR 2009 2008On 1 January 14,809,432 11,991,655Purchases during the year 1,355,330 2,817,777Numbers used in the period On 31 December 16,164,762 14,809,432

Redeemed own shares 2009 2008On 1 January 539,997 420,755Purchases during the year 66,212 119,242Numbers used in the period On 31 December 606,209 539,997

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ACQUIsItION AND DIsPOsAl OF tReAsURY sHARes

The general meeting of 24 April 2009 has again authorised the board of directors to acquire or dispose of treasury shares or profit-sharing certificates in accordance with the provisions of the Companies Act, without a prior resolution of the general meeting being required, if such acquisition or disposal is necessary to avoid impending serious harm to the company.This authorisation is valid for a period of three years as from 24 April 2009.

The general meeting of 25 march 1999 has renewed the authorisation of the board of directors, to directly, or through a person acting on his behalf but for the account of the company, taking into account the shares that the company or its directly controlled subsidiaries already own, acquire a maximum of 20% of the shares of the company by purchase or exchange at a price equal to the price at which such shares were quoted on Euronext Brussels at the time of the purchase or exchange.This authority is also valid for the boards of directors of the company’s directly controlled subsidiaries in the sense of article 627 of the Company law.This authorisation is valid for a period of five years as from the publication of the authorisation decision in the appendices to the Belgian Bulletin of Acts and Decrees and can be renewed.

This authorisation decision as well as the authorisation decision regarding the purchase or disposal to avoid impending serious harm to the company have both been published in the appendices to the Belgian Bulletin of Acts and Decrees of 9 November 2009 under the number 09157274.

During the financial year vPK PACKAGING GROuP Nv has redeemed 66,212 treasury shares, which represent 0.75% of the share capital. These shares were acquired in order to finance a possible acquisition of new participations outside the consolidation scope. On 31 December 2009 vPK PACKAGING Nv held a total of 606,209 treasury shares in portfolio (compared to 539,997 on 31 December 2008). These redeemed treasury shares represent 6.91% of the share capital.

- Redeemed treasury shares 2009 66,212 0.75% - Total redeemed treasury shares Dec. 2009 606,209 6.91%

II.1.5.27.4. dIVIdends

The consolidated net profit of the financial year 2009 amounts to € 24,420,777 compared to € 20,269,052 in 2008. The board of directors proposed to fix the gross dividend at € 0.75 per share, or € 0.56 net for ordinary shares, and € 0.64 net for vvPR-shares. This dividend will be payable as from 20 may 2010. That way, the company continues its dividend policy of realising an annual dividend growth, except for extraordinary circumstances.

This amount is not recognised as a debt on 31 December 2009.


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II.1.5.27.5. waRRant plan

On 17 February 1999, the extraordinary general meeting resolved to issue 100,000 warrants according to the conditions and arran-gements described in a warrant plan, which was approved by the board of directors on 12 February 1999 (hereinafter ‘the Warrant Plan’), the objectives of which may be summarised as follows:

• To create a long-term incentive for employees and directors of the company, or its subsidiaries, who can make a significant contribution to the success and growth of the company; • To enable the company to attract qualified, experienced employees and directors; • To create a common interest between the beneficiaries of the warrants and the shareholders of the company, aimed at increasing the value of shares in the company

The company itself may not exercise warrants under any circumstances.

Following the resolution of the extraordinary general meeting of 17 February 1999, of the 100,000 warrants to which the company had subscribed, 29,970 warrants were effectively assigned to 52 employees and directors.

At the proposal of the board of directors, the Warrant Plan was slightly altered as a result of the resolution of the extraordinary general meeting of 9 march 1999.

The warrants are registered, and are entered in the register of warrant holders that is kept at the company’s registered office.

The Warrant Plan stipulates that the warrants that are assigned in the year of issue, i.e. 17 February 1999, will be 4/10 exercisa-ble during march of the fourth year following their assignation. An additional 1/10 is exercisable during march of each subsequent year. The final exercise period is provided in January 2009, after which the warrants expire.

The Warrant Plan committee, which has been delegated tasks by the board of directors, including overseeing the administration and execution of the warrant plan, may lengthen or shorten the exercise periods, or arrange for any additional exercise periods.

In 2000, 3,759 new warrants were issued, but 4,600 had meanwhile expired, including results of the termination of employment contracts between the company or its subsidiary and beneficiary employees, There were 29,129 effective outstanding but still unexercised warrants as at 31 December 2000, after which no new warrants were assigned.In march 2003, under the terms of the warrant plan it became possible for the first time to exercise up to 40% of the assigned warrants. A total of 208 warrants were exercised.

In march 2004, 232 warrants were exercised, bringing the total number of outstanding but not yet exercised warrants to 27,609 on 31 December 2004. This number takes account of the warrants that expired in 2003, as a result of the termination of employ-ment contracts.

In may 2005, 8 warrant holders had made use of the opportunity to convert warrants into shares within the set deadline and in accordance with the set conditions.A total of 1,165 warrants were converted into shares. The total number of outstanding but still unexercised warrants was 26,444 on 31 December 2005.

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In march 2006, 13 warrant holders exercised a total of 4,724 warrants within the set conditions. As a result, and because a warrant holder left the company’s employment, the total number of unexercised warrants at 31 December 2006 was 21,390.

In April 2007, 17 warrant holders exercised a total of 1,551 warrants. As a result, and because a warrant holder left the company’s employment, the total number of unexercised warrants at 31 December 2007 was 19,813.

In April 2008, 15 warrant holders exercised a total of 1,441 warrants in accordance with the Warrant plan conditions. As a result, the total number of unexercised warrants at 31 December 2008 was 18,372.

The last exercise period foreseen by the plan was January 2009. During this final exercise period, 16 warrant holders exercised a total of 2,026 warrants. To that end, the capital of vPK PACKAGING GROuP Nv was increased by € 35,349.50 and 2,026 new shares were issued. As a result, a total of 16,346 unexercised warrants have irrevocably expired.

II.1.5.28. PROvISIONS Provisions Provisions Provisions Provisions total For taxation Restructuring Claims Other Risks long term provisions Opening Balance 135,055 1,637,686 801,962 0 2,574,703Additional provisions made in the period 0 246,972 187,574 1,062,888 1,497,434Amounts used in the period -128,259 -1,277,043 -49,426 0 -1,454,728Transfers from long term to short term 0 -324,695 0 324,695 0Exchange differences 0 73,220 25,163 21,820 120,203ending Balance 6,796 356,140 965,273 1,409,403 2,737,612 short term provisions Opening Balance 0 0 0 206,929 206,929Amounts used in the period 0 0 0 -102,929 -102,929ending Balance 0 0 0 104,000 104,000tOtAl PROVIsIONs At eND OF tHe PeRIOD 6,796 356,140 965,273 1,513,403 2,841,612

tOtAl PROVIsIONs At stARt OF tHe PeRIOD 135,055 1,637,686 801,962 206,929 2,781,632


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The provisions are expected to be disposed of as follows Provisions Provisions Provisions Provisions total For taxation Restructuring Claims Other Risksless than 1 year 6,796 356,140 0 1,117,399 1,480,3351 to 2 year 0 0 965,273 0 965,2732 to 5 year 0 0 0 0 0longer than 5 years 0 0 0 396,004 396,004

The provision for restructuring mainly relates to the closing of the paper factory in the uK (Rigid Paper ltd). This paper production unit was closed at the beginning of 2009. The provision formed at the end of 2008 was mainly used in the course of the year.

The provisions for disputes have been formed for the compensation claim submitted to the labour court by a number of employees dismissed from ONDulyS sites. On average these provisions will be settled within a period of 2 years.

The provisions for other risks are reserves formed by the group’s reinsurance company (PAPIRO AG) to cover uninsured risks and a provision for the soil remediation of the closed paper factory in the uK (Rigid Paper ltd in Selby), which should end in 2010.

II.1.5.29. EmPLOYEE bENEfIT ObLIgATIONS

Provision Defined Provision other total Benifit Plans pensions and simular obligations long term portion of provisions Opening Balance 9,182,905 1,408,266 10,591,171Entry in the consolidation scope 0 912,057 912,057Additional provisions made in the period 2,379,620 278,430 2,658,050Amounts used in the period -17,941 -74,328 -92,269Amounts reversed during the period 0 0 0Transfers from long term to short term -1,157,171 1,157,171 0Other movements 0 0 0Exchange differences 441,452 2,326 443,778ending Balance 10,828,865 3,683,922 14,512,787

The Group provides defined benefit pension schemes in England, the Netherlands and France. Such plans are based on remune-rations and years of service. The schemes are active in the Netherlands and France, while the scheme for the uK subsidiaries is in liquidation. At the acquisition of the uK subsidiaries (in 2000) this plan has been stopped immediately and the procedure for liquidation has started. There are no investments held within the Group. The Group pays fixed contributions into a separate entity. The schemes in the Netherlands also includes the ‘temporary surviving dependent pensions’, the orphans’ pension and temporary and permanent occupational disability benefits. The defined benefit obligations are calculated annually by independent actuaries using the projected unit credit method.

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Except for the aforementioned pension schemes, the group has other similar long-term obligations towards its employees. These consist of future allowances based on service during the current or previous periods, such as jubilee, departure or seniority premiums.

Plan assets do not comprise any of the group’s own financial instruments or any assets used by group companies.

Defined benefit plan - summary: 31/12/2009 31/12/20081. Components of defined benefit plan assets and liabilities 1.1. Net defined benefit plan obligation (asset) 12,311,106 6,426,327 1.1.1. Present value of wholly or partially funded obligation 29,861,973 22,581,051 1.1.2. Fair value of plan assets ( - ) -17,550,867 -16,154,723 1.3. unrecognised actuarial gains (losses) -1,482,241 1,599,407 1.4. unrecognised past service cost ( - ) 0 0 1.5. Amounts unrecognised due to limit in IAS 1.6. Fair value of any right to reimbursement recognised as an asset ( - ) 1.7. Other amounts of defined benefit plan obligation (asset) recognised

Defined benefit plan obligation (asset), total 10,828,865 8,025,734

2. expense recognised in income statement for defined benefit plan (*) 2,737,040 637,802 2.1. Current service cost 2,164,655 356,048 2.2. Interest cost 1,308,419 1,334,870 2.3. Expected return on plan assets ( - ) -713,301 -1,150,011 2,4. Expected return on reimbursement rights recognised as an asset ( - ) 0 0 2.5. Net actuarial (gain) loss 7,613 31,034 2.6. Past service cost 0 0 2.7. loss (gain) on curtailments and settlements 0 0 2.8. Effect of the limit in IAS 19.58.b 0 0 2.9. Amounts recognised due to average and closing rate -30,347 65,861

Actual return on plan assets 939,588 -491,024 3. movements in the present value of the defined benefit plan obligation 7,280,922 -21,290,112 3.1. Present value of the defined benefit plan obligation, beginning balance 22,581,051 43,871,163 3.2. Current service cost 2,164,655 356,048 3.3. Interest cost 1,308,419 1,334,870 3.4. Contributions by plan participants ( - ) 138,300 8,553 3.5. Actuarial (gains) losses 3,449,754 -3,212,618 3.6. Foreign currency exchange rate changes 1,126,732 -8,283,383 3.7. Benefits paid ( - ) -906,938 -11,493,583 3.8. Past service cost 0 0 3.9. Business combinations 0 0 3.10. Curtailments and settlements 0 0


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3.11. Present value of the defined benefit plan obligation, ending balance 29,861,973 22,581,051 Whereof unfunded 127,351 105,418Partly or wholly funded 29,734,622 22,475,633 4. movements in the fair value of the defined benefit plan assets 1,396,143 -18,493,047 4.1. Fair value of defined benefit plan assets, beginning balance 16,154,723 34,647,770 4.2. Expected return on plan assets 713,301 1,150,011 4.3. Actuarial gains and (losses) 226,287 -1,641,035 4.4. Foreign currency exchange rate changes 845,049 -6,902,819 4.5. Contributions by the employer / Income statement (*) 375,361 385,826 4.6. Contributions by plan participants 143,084 8,553 4.7. Benefits paid ( - ) -906,938 -11,493,583 4.8. Business combinations 0 0 4.9. Settlements 0 0 4.10. Fair value of defined benefit plan assets, ending balance 17,550,867 16,154,723 5. Principal actuarial assumptions 5.1. Discount rate used Netherlands 5.39% 6.15% England 5.70% 6.40% France 3.58% 4.36% 5.2. Expected return on plan assets Netherlands 5.39% 6.15% England 5.60% 4.70% France 3.58% 4.36% 5.3. Expected rate of salary increase Netherlands 4.00% 4.00% England n/a n/a France 1.50% 1.50% 5.4. Future defined benefit increase Netherlands 2.50% 2.50% England 3.70% 2.75% France 1.50% 1.50%

Actuarial assumptions on mortality rate Netherlands GBm/v 2005-2050 (m:-1,F:-1) England PXA92 projected till 2040 France Tv88/90(*) Included in ‘Salaries and wages’

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expense recognised in profit or loss

31/12/2009 31/12/2008Defined benefit plan obligation (asset), total 10,828,865 8,025,734Total Expense recognised in income statement for defined benefit plans 2,737,040 637,802Contributions by the employer (*) -375,361 -385,826expense recognised in income statement for defined benefit plan 2,361,679 251,976 variation DBO (asset) year - year-1 2,803,131 -1,414,084Exchange differences Balance -441,452 1,666,060 2,361,679 251,976(*) Included in ‘Salaries and wages’

The actuarial assumptions have been accepted by the management after the expert advice of independent actuaries. These hypothesis have led to the amounts defined as defined benefit plans and must be considered as the best estimate of the management.

The total expected return on investment funds is defined based on the long-term asset-mix and by reference to the return that is expected to be realised on these assets. These returns are chosen in accordance with the terms and currencies of the related obligations.

The plan assets are composed as follows:

2009 2008Corporate bonds 2.60% 2.75% Shares 7.00% 7.30% Real Estate 0.50% 0.50% Cash / Insurer 89.90% 89.45% total % 100.00% 100.00% Historical information 2009 2008 2007 2006 2005Present value Defined Benefit Obligations -29,861,973 -22,581,051 -43,061,881 -56,531,968 -56,525,127Fair value of Plan Assets 17,550,867 16,154,723 33,604,564 42,511,041 42,502,077Plan surplus / (deficit) -12,311,106 -6,426,327 -9,457,317 -14,020,927 -14,023,050

Expected contributions to the defined benefit plans during in 2010 amount to € 585,274.


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II.1.5.30. dEfERREd TAx ASSETS ANd LIAbILITIES

Deferred taxes are the consequence of a tax effect of temporary differences between the statutory reporting and the consolida-ted reporting according to IFRS. Deferred tax receivables are exclusively related to tax losses to be carried forward. The assessment of the actualisation of a tax receivable is based on the best estimate of the probability that future profits will be realised, to be neutralised by the losses car-ried forward. This occurs based on budgets taking into account a time frame of 5 to 7 years.

The sources of deferred tax assets and liabilities and their consequences are presented below:

DeFeRReD tAX Assets AND lIABIlItIes ReCOGNIseD IN BAlANCe sHeet 2009 2009 Asset liability Net Income statement 4,219,442 20,652,359 16,432,917 -3,967,6771. Depreciation(*) 33,649,153 33,649,153 1,423,3812. Allocated amounts spare parts 1,000,173 1,000,173 -15,6593. Provisions 3,220,392 3,220,392 307,5774. Forward foreign exchange contracts 05. Post-employment benefit obligations -1,734,474 -1,734,474 -67,3586. Revaluations of non-current assets other than financial 07. Revaluations of financial instruments -175,928 -175,928 -145,3128. Tax losses 4,219,442 -15,078,314 -19,297,756 -5,440,9399. unused tax credits 010. Internal margin inventories 011. Others -228,643 -228,643 -37,52612. Increase (decrease) due to exchange rate differences 8,159 (*) including in liability by entry of the scope € 1,031,494. DeFeRReD tAX Assets AND lIABIlItIes ReCOGNIseD IN BAlANCe sHeet 2008 2008 Asset liability Net Income statement 1,638,279 21,007,379 19,369,100 -11,149,7761. Depreciation 31,194,278 31,194,278 -3,742,3292. Allocated amounts spare parts 1,015,832 1,015,832 -374,8143. Provisions 2,912,815 2,912,815 2,919,6494. Forward foreign exchange contracts 05. Post-employment benefit obligations -1,667,116 -1,667,116 -628,3956. Revaluations of non-current assets other than financial 7. Revaluations of financial instruments -30,616 -30,616 -361,6518. Tax losses 1,638,279 -12,218,538 -13,856,817 -8,735,8549. unused tax credits 10. Internal margin inventories 11. Others -191,117 -191,117 -260,57912. Increase (decrease) due to exchange rate differences -8,159 -8,159 34,197

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Deferred taxes for an amount of € 2.9 related to subsidiaries were not recognised as the parent can define the time at which the temporary difference is settled and it is probable dat the temporary difference will not be settled in the near future.

II.1.5.31. INTEREST-bEARINg LIAbILITIES LONg ANd SHORT TERm

2009 2008Subordinated loans 0 0 Non-subordinated bonds 0 0 leasing and similar obligations 793,801 1,039,539 Bank loans 61,642,989 62,358,499 Other loans 0 0 tOtAl lONG teRm DeBts 62,436,790 63,398,038 leasing and similar obligations 341,983 459,375 Debts for more than one year expiring within one year 8,754,994 29,065,980 Bank loans 20,551,998 34,839,069 Other loans 439,484 308,305 tOtAl sHORt teRm DeBts 30,088,459 64,672,729

teRm 2009 2008 < 1 year 1 to 5 years > 5 years tOtAl tOtAlSubordinated loans 0 0 0 0 0Non-subordinated bonds 0 0 0 0 0leasing and similar obligations 341,983 682,282 111,519 1,135,784 1,498,914Bank loans 29,306,992 61,352,508 290,481 90,949,981 126,263,548Other loans 439,484 0 0 439,484 308,305tOtAl 30,088,459 62,034,790 402,000 92,525,249 128,070,767

Outstanding credits mainly relate to credits in euro with variable interest rates. The weighted average interest rate per end of December 2009 for these interest-carrying debts amounts to 1.74% compared to 3.62% per end of December 2008. The portion of interest-carrying liabilities with a variable interest rate amounts to 87.8% compared to 71.1% at the end of 2008.


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II.1.5.32. OTHER CURRENT LIAbILITIES

2009 2008Other liabilities 16,361,917 11,390,134Other liabilities 2,435,730 292,277 including - Continuing involvement liability TRPP(*) 2,256,451 0Advances received on orders 9,711 244,212Taxes, vAT and other costs 6,145,059 4,166,048Accrued charges and deferred income 7,771,417 6,687,597 including granted volume discounts 2,467,806 2,281,368 - taxes receivable 1,073,564 803,813 - to be received for operating costs 3,052,140 2,038,101 - financial charges 50,963 238,008 - valuation IRS 517,588 56,485 - accrued employee expenses 358,664 1,113,517 (*) TRPP = Trade Receivables Purchase Program

Within the framework of the recurrent sale of a part of the portfolio of trade receivables under the Trade Receivables Purchase Program (see trade receivables), on the one hand, a receivable was created as well as a liability towards the financial institution with regard to the permanent involvement and, on the other hand, a receivable as a guarantee towards this financial institution, for a part of the receivables sold (see also Note II.1.5.23.). The receivables and liability following the permanent involvement relate to 10% of the amount of the trade receivables sold, being the portion not covered by the credit insurance (own risk of 10%).

II.1.5.33. EvENTS AfTER bALANCE SHEET dATE

Twenty years after the start-up of the production of solid board packaging in Oudegem the Solid board unit of vPK PACKAGING Nv in Oudegem decided to commercialise its products as from 1 January 2010 under the European registered brand name Smart Packaging Solutions®. By the take over of the goodwill of R&F Foldings Boxes situated in meer (B) in January 2008 and further growth of market share, Smart Packaging Solutions® has become number 2 in the Benelux in the solid board packaging sector. Smart Packaging Solutions® has a production capacity of 80,000 tons a year.

Together with its English industrial partner, holding a minority interest of (35%), the “Charta” division of RIGID CONTAINERS ltd. was, at the end of January 2010, incorporated in a new English company, named RIGID ASTON ltd.. RIGID ASTON ltd. with offices in Aston (near Birmingham) producing “single face” corrugated board, used for a.o. window frames and radiators. The objective of RIGID ASTON ltd. for 2010 is to realise a turnover of € 5 m.

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II.1.5.34. CONTINgENT ASSETS ANd LIAbILITIES

II.1.5.34.1. opeRatInG leases

The current operating leases relate to cars, trucks, equipment for warehouses and office supplies.

Operating lease liabilities <1 year 1 to 5 years >5 yearsleasings and similar obligations 2,195,843 7,905,035 0 Total liability 2,195,843 7,905,035 0 2009 2008

minimum lease payments recognised in the income statement 2,042,645 1,607,540

II.1.5.34.2. otheR ContInGent assets and lIabIlItIes

At balance sheet date there are no issued bank guarantees, nor other guarantees granted by vPK Packaging Group Nv, or irrevoca-bly affirmed as a guarantee for debts and liabilities.

At balance sheet date, there is a contractual obligation for the acquisition of tangible fixed assets for an amount of € 8.9 m.

II.1.5.35. RELATEd PARTY TRANSACTIONS

A list of all companies of vPK PACKAGING GROuP Nv is recorded in Note II.1.5.5.2. Transactions between vPK PACKAGING GROuP Nv, its subsidiaries and the jointly controlled entitity (O.K. Oudegem-Kûhl Recycling Gmbh), which are related parties, are eliminated in the consolidation. These transactions take place at normal market conditions.

There are no advance payments, loans or guarantees from vPK PACKAGING GROuP Nv granted to directors, managers or supervi-sing bodies.

II.1.5.36. REmUNERATION Of THE mEmbERS Of THE bOARd Of dIRECTORS ANd THE ExECUTIvE COmmITTEE

In 2009 the global gross remuneration of the executive members of the board of directors and the executive committee active in the group on 31/12/2009, including the fixed and variable remuneration for their management functions at vPK PACKAGING GROuP Nv and its subsidiaries, amounted to € 1,519,000, of which the fixed part was € 1,374,000 and the variable part € 145,000. The remuneration paid to the non-executive directors amounted to € 71,000 in total.

II.1.5.37. INfORmATION ON THE AUdITOR


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During the financial year 2009 the remuneration of the auditor and related parties amounted to € 119,900 (excl. vAT), exclusively related to his statutory mandate. Next to this, remunerations of € 3,250 (excl. vAT) for other audit missions and € 24,095 (excl. vAT) for non-audit assignments were charged by the auditor or related parties.

II.1.5.38. STATEmENT Of RESPONSIbLE PERSONS

The board of directors declares, that to his knowledge, the annual accounts, established according to the applicable standards for annual accounts, present a faithful image of the assets, the financial situation and the results of the company and the companies in the consolidation scope, and that the annual report presents a faithful overview of the development and of the results of the company and the position of the company and the companies in the consolidation scope, as well as a description of the main risks and uncertainties with which the company is confronted.

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II.3.I.3. ABRIDGED STATuTORy FINANCIAl STATEmENTS vPK PACKAGING GROuP Nv

II.3.1. INCOme stAtemeNt Financial year Previous Financial yearOperating income 13,568,98 10,669,849 Produced fixed assets 43,262 Other operating income 13,525,723 10,669,849Operating costs 9,997,795 9,873,529 Services and other goods 6,837,014 7,329,545 Remuneration, social security charges and pensions 2,811,581 2,282,977 Depreciation, amortisation and write-downs on formation expenses, intangible assets and property, plant and equipment 303,322 227,374 Provisions for liabilities and charges: additions (used and written-back) (+/-) 19,059 22,812 Other operating expenses 26,819 10,821 Operating profit (Operating loss) 3,571,190 796,320Financial income 10,185,456 20,119,222 Income from non-current financial assets 10,000,000 18,000,006 Income from current assets 156,897 2,114,755 Other financial income 28,559 4,461Financial expenses 2,231,349 4,460,864 Interest and other debt charges 2,193,697 4,383,272 Other financial expenses 37,652 77,592Pre-tax profit (loss) from ordinary operations 11,525,297 16,454,678extraordinary income 56,155,175 14,829,204 Gain on disposal of fixed assets 56,102,376 14,782,603 Other extraordinary expenses 52,799 46,601


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Operating costs activated as restructuring costs 17,613 73,800 loss on disposal of fixed assets 73,800 Other extraordinary charges 17,613 Profit (loss) for the financial year (+/-) 67,662,859 31,210,082transfer from untaxed reserves 395 ResUlt APPROPRIAtION of the financial year (+/-) 9,600 7,089 Taxes 9,600 7,089 Profit (loss) of the financial year (+/-) 67,653,259 31,203,388withdrawal from the tax-exempt reserves 42,354 42,943 Profit (loss) for appropriation of the financial year (+/-) 67,695,613 31,246,331

II,3,2. BAlANCe sHeet AFteR ResUlt APPROPRIAtION Financial year Previous Financial yearAssets NON-CURReNt Assets 242,968,269 179,209,860 Intangible assets 95,466 160,980Property, plant and equipment 1,030,205 428,677 land and buildings 64,427 84,903 Plant, machinery and equipment 6,648 9,956 Furniture and vehicles 959,130 333,818 Non-current financial assets 241,842,598 178,620,203 Related companies 241,822,263 178,599,869 Participating interests 241,822,263 178,599,869 Other non-current financial assets 20,335 20,334 Shares 20,335 20,334

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CURReNt Assets 14,609,657 7,242,374Receivables due after more than one year 3,255,000 2,275,000 Other receivables 3,255,000 2,275,000 Amounts receivable within one year 10,921,219 4,553,267 Trade receivables 5,869,879 4,480,075 Other receivables 5,051,340 73,192Cash Investments 8,217 8,217 Treasury shares 8,217 8,217 Cash and cash equivalents 60,204 49,682Deferred charges and accrued income 365,017 356,208tOtAl Assets 257,577,926 186,452,234

lIABIlItIes sHAReHOlDeRs’ eQUItY 159,800,953 98,711,901Capital 21,145,604 21,110,254 Issued capital 21,145,604 21,110,254 Share premiums 37,559 37,559 Reserves 19,319,828 19,362,183 legal reserves 2,200,000 2,200,000 Non-distributable reserves 8,217 8,217 For treasury shares 8,217 8,217 untaxed reserves 2,316,807 2,359,162 Distributable reserves 14,794,804 14,794,804Profit (loss) carried forward (+/-) 119,297,962 58,201,905


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PROVIsIONs AND DeFeRReD tAXes 41,871 22,813Provisions for liabilities and charges 41,871 22,813 Pensions and similar obligations 41,871 22,813 PAYABles 97,735,102 87,717,520Payables due after one year 21,000,000 40,000,000 Financial liabilities 21,000,000 40,000,000 Credit institutions 21,000,000 40,000,000 Amounts payable within one year 76,646,329 47,346,844 Current portion of payables due after one year 5,000,000 10,000,000 Financial liabilities 3,406 2,309 Credit institutions 3,406 2,309 Trade payables 1,211,898 1,785,584 Suppliers 1,211,898 1,785,584 Payable taxes, remuneration and social security charges 841,235 624,337 Taxes 418,850 324,310 Remuneration and social security charges 422,385 300,027 Other liabilities 69,589,790 34,934,614Accrued charges and deferred income 88,773 370,676

tOtAl lIABIlItIes AND eQUItY 257,577,926 186,452,234

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II.3.3. ACCOUNtING PRINCIPles

II.3.3.1. bASIC PRINCIPLE The accounting principles are determined in accordance with the Belgian Companies Code and the implementing decree of 30 Ja-nuary 2001. No departures from the accounting rules identified above are necessary for presentation of an accurate picture. The accounting rules have not been changed since last year. Income or expenses that should be assigned to any other financial year do not significantly affect the income statement. The figures for successive financial years are also comparable.

II.3.4.2. SPECIAL RULES

1. AssetsIntangible assetsIntangible assets mainly consist of software licences purchased from third parties.These intangible assets are valued at their purchase value and depreciated on a linear basis over a period of five years (20%).The total for intangible assets does not include any research and development costs.All research and development costs are immediately recognised as expenses.

Property, plant and equipment Fixed tangible assets are measured at their acquisition costs, i.e. the acquisition price (including additional costs), cost price or contribution value.Intercalary interest is not capitalised. The following percentages are used to calculate depreciation:

ItemBuildings 5%major maintenance of buildings 20%Plant, machinery and equipment 10-15%Second-hand equipment 20%IT equipment 33.33%Furniture 10%vehicles 20%leasing the same % as used for owned equipmentAssets under construction % according to nature of investment

Depreciation takes place using the linear and/or reducing balance method.

Non-current financial assets Shares are recognised at their purchase price, excluding additional costs that are taken to the income statement.They are individually valued every year.The valuation is based on the accounting net asset value of the shares or the presumed contractual value on sale, or in accordance with the criteria applied during the purchase of the shares if the holding has been acquired at a price which differs from their carrying amount.Write-downs are applied if the estimated value, calculated as explained above, is lower than the carrying amount and if, in the view of the board of directors, the decrease in value is of a permanent nature, which is based on the position, profitability, proba-


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ble recoverable value and prospects of the holding. Write-downs are reversed if the estimated value is higher than the carrying amount including the write-downs, and provided the board believes the difference will be permanent.

Amounts receivable within one yearThese receivables are measured at nominal value. The Board of Directors will take a decision on any necessary write-downs. The related vAT will be retained on the assets and will only be recognised in the income statement if the recoverability seems to be impossible. A write down will always be recognised individually for each receivable, which also applies for a possible reversal of the write-down.

Cash and cash equivalents/cash investmentsIn general, these follow the same rules as those described under the heading ‘Financial assets’. however, the Board of Directors will recognise a write-down for any decrease in value, whether it is permanent or not.

Deferred charges and accrued incomeDeferred charges include pro rata portions of expenses that have been incurred during the financial year, but which are charged to the following financial year. Accrued income, which is the pro-rata portion of income that will only be collected during the course of the following financial year, but which relates to the financial year that has ended.

2. lIABIlItIesCapital The balance represents the actually contributed capital, and is measured at nominal value.

Debts All amounts payable are entered at nominal value.Amounts payable in foreign currency are converted at the official rate on the balance sheet date.

Provisions for risks and expensesEach year, the board of directors undertakes a full examination of previously established provisions to hedge risks and expenses to which the company is exposed.The Board considers whether any provisions need to be formed or reversed, by analysing the accounts on an item-by-item basis and investigating all data that might reveal unhedged risks, such as disputes, etc. It determines the appropriate valuation methods for the main risks.Provisions for risks and expenses are systematically formed or reversed, and such actions may not be made dependent on the result for the financial year.

Accrued charges and deferred incomeThese consist of the pro rata portion of expenses that will only be paid in a subsequent financial year, but which relate to the year that has ended. These expenses are stated at their nominal value. They also relate to deferred income, i.e. the pro rata portion of income collected during the financial year or the previous financial year, but which relates to a subsequent financial year.

Foreign currencyCurrent assets and liabilities expressed in foreign currency are converted at the closing rate at the end of the financial year.Translation differences are summarised for each currency. If a negative translation difference is obtained, this is charged to the income statement. If a positive translation difference is obtained, it is recognised via accruals and deferrals.

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II.4. PROPOSAlS TO ThE ORDINARy GENERAl mEETING INvITATION TO ThE ORDINARy GENERAl mEETING

The board of directors of vPK PACKAGING GROuP Nv has the pleasure of inviting its shareholders to attend its ordinary annual general meeting, which will be held in accordance with article 27 of the articles of association on Friday 30 April 2009 at 10.00 a.m. at the company’s offices, villalaan 16 (second floor), 9320 Erembodegem-Aalst, Belgium.

The agenda is as follows:

1. Discussion of the board of directors’ annual report and the auditor’s report for the financial year closed on 31/12/2009

2. Discussion of and approval of the financial statements closed on 31/12/2009 and of the appropriation of the result.Proposed motion:The annual general meeting hereby approves the financial statements together with the remuneration for the directors and auditor for the 2009 financial year and the appropriation of the result.The annual general meeting resolves to distribute the profit after taxation of € 125,897,518.02 as follows:

* € 6,579,556.50 to be distributed as dividends to the 8,772,742 outstanding shares; * € 20,000 to distribute as tantième to the directors.The earnings to carry forward amount to € 119,297,961.52 after this appropriation of profit.The gross dividend per share is defined at € 0.75, or € 0.56 net for the ordinary shares and € 0.64 net for vvPR-shares. This divi-dend will be payable as from 20 may 2010.

3. Presentation of information from the consolidated financial statements closed on 31/12/2009 and the related reports from the board of directors and the auditor

4. Discharge of the members of the board of directors and of the auditorProposed motion:By separate votes, the annual general meeting grants discharge to the directors and to the auditor for their stewardship and office during the 2009 financial year.

5. Establishment of remuneration of the board of directors, the audit committee and the remuneration committeeProposed motion:The annual general meeting approves the remuneration for the board of directors for the 2010 financial year, set at € 70.000,00, which includes the remuneration for the members of the audit committee and the remuneration committee for the 2010 financial year.

6. Corporate Governance: report on the corporate governance policy pursued in the 2009 financial year.

7. miscellaenous


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The draft of the financial statements, the annual report and the auditor’s report will be available for inspection at the company’s registered office from 6 April 2010.

To attend the meeting, owners of registered shares must inform the board of directors in writing of their intention to attend the meeting at least three working days before the date of the meeting, i.e. no later than Tuesday 27 April 2009.

The owners of dematerialised securities must present the certificate, prepared by either the recognised accountholder or by the settlement institution, which records the unavailability of these equities for the annual general meeting, at the offices indicated by the board of directors no later than 27 April 2009.

Shareholders who are unable to take part in the meeting in person may have themselves represented. Proxy forms for this purpose are available at the company’s registered office or at the offices in Belgium of BNP Paribas-Fortis Bank, KBC Bank or Petercam.

These proxies must also be deposited no later than Tuesday 27 april 2010

1) at the company’s registered office Oude Baan 120, 9200 Dendermonde 2) or at the head office or offices in Belgium of van BNP Paribas-Fortis Bank, KBC Bank or Petercam.

Furthermore, shareholders must take into account the provisions of the articles of association on the matter and the rules under the Belgian Companies Code.

In order that the meeting may start promptly, shareholders are kindly requested to arrive a quarter of an hour before the scheduled starting time, for which we thank them in advance.

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II.5. FINANCIAl CAlENDAR

2010

16 march 2010 Press release and publication of provisional results for the 2009 financial year

17 march 2010 Analysts’ meeting on press release and publication

of the provisional results for the 2009 financial year


at the offices of vPK PACKAGING GROuP Nv

at villalaan 16 (2nd floor), 9320 Erembodegem (Aalst), Belgium

14 may 2010 First interim report

20 may 2010 Dividend made available for payment



2011

15 march 2011 Press release and publication of the provisional results for the 2010 financial year

16 march 2011 Analysts’ meeting on press release and publication of the provisional results

for the 2010 financial year


at the offices of vPK PACKAGING GROuP Nv

at villalaan 16 (2nd floor), 9320 Erembodegem (Aalst), Belgium

13 may 2011 First interim report

18 may 2011 Dividend made payable (under reservation)




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DIVIDeNDIf the ordinary general meeting approves the appropriation of the result as proposed for the financial year 2009, the gross dividend of € 0.75 per share will be distributed.This means: - A net dividend of € 0.56 per ordinary share after deduction of 25% withholding tax - A net dividend of € 0.64 per share with vvPR character after deduction of 15% withholding tax

The dividend payment is foreseen as from 20 may 2010.

For more informationluc ledegenInvestor Relations t +32 52 261 216 F + 32 53 628 058 e [email protected] w www.vpkgroup.com

Verantwoordelijke uitgeverVPK PACKAGING GROUP NV • Oude Baan 120 - B-9200 Dendermonde • c/a Villallaan 16 • B-9320 Erembodegem (Aalst)

Dit jaarverslag is ook beschikbaar in het Nederlands.

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II.6. FINANCIAl ADDRESSES

RECYCLED PAPER

O.K. OUDeGem KüHl ReCYClING GmBHKeimstrasse 5DE-86420 Diedorf T +49 8 21 480 750 F +49 8 21 486 1504 E [email protected] W www.kuehl-gruppe.de

PAPER

OUDeGem PAPIeR NVOude Baan 120BE-9200 Dendermonde T +32 52 26 19 11 F +32 52 22 54 39 E [email protected] W www.vpkgroup.com

CORRUGATED BOARD

BE VPK PACKAGING NV Oude Baan 120 BE-9200 Dendermonde T +32 52 26 19 11 F +32 52 21 85 05 E [email protected] W www.vpkgroup.com

sAUCAs eUROPe P.O.s. NV Wijngaardveld 34C BE-9300 Aalst T +32 53 760 860 F +32 53 760 869 E [email protected] W www.saucas.be

NL VPK PACKAGING BV Snoekweg 1 Nl-4941 SC Raamsdonksveer Postbus 375 Nl-4940 AJ Raamsdonksveer T +31 (0)162 581 500 F +31 (0)162 523 700 E [email protected] W www.vpk.nl

FR ONDUlYs lIlle sAs 1, rue Charles Saint-venant FR-59160 lomme B.P. 109 FR-59461 lomme cedex T +33 3 20 22 76 76 F +33 3 20 22 76 77 E [email protected] W www.ondulys.com

ONDUlYs tAIlleUR sAs 1, rue du Chemin Blanc FR-91160 longjumeau T +33 1 64 54 71 00 F +33 1 64 54 71 44 E [email protected]

ONDUlYs INDUstRIe sAs Rue Paul Cornu B.P. 72078 FR-14102 lisieux (Calvados) T +33 2 31 31 28 38 F +33 2 31 31 08 80 E [email protected]

ONDUlYs ANDelle sAs usine Saint-victor B.P. 27 FR-27380 Fleury sur Andelle T +33 2 32 48 73 48 F +33 2 32 48 73 49 E [email protected] W www.cart-andelle.com


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ONDUlYs ROYe sAs Route de villers B.P. 44 FR-80700 Roye T +33 3 22 87 72 00 F +33 3 22 87 22 22 E [email protected]

ONDUlYs GHeYseNs sAs 2, rue henri Carette B.P. 182 FR-59333 Tourcoing cedex T +33 3 20 68 97 70 F +33 3 20 68 97 89 E [email protected]

ONDUlYs lIANe sAs rue Eugène huret B.P. 45 FR-62360 Saint Etienne au mont T +33 3 21 87 40 25 F +33 3 21 87 21 90 E [email protected] ONDUlYs sAINt QUeNtIN sAs Z.I. de Rouvroy-morcourt FR-02100 Saint-quentin T +33 3 23 06 15 15 F +33 3 23 06 15 42 E [email protected]

ONDUlYs ReFeReNCe sAs 1, rue du Chemin Blanc FR-91160 longjumeau T +33 1 64 54 71 45 F +33 1 64 54 71 49 E [email protected]

GB RIGID CONtAINeRs ltd. Stoke Albany Road Desborough Kettering uK- NN14 2SR Northamptonshire T +44 1536 760266 F +44 1536 762714 E [email protected] W www.rigid.co.uk

PL VPK PACKAGING sp.z o.o. ul. Objazdowa 6a Pl-62-300 Wrzesnia T +48 61 650 19 00 F +48 61 650 19 01 E [email protected] W www.aquila.vpk.pl

AQUIlA sp.z o.o. ul. Objazdowa 6a Pl – 62-300 Wrzesnia T +48 61 650 19 00 F +48 61 650 19 01 E [email protected]

AQUIlA RADOmsKO sp.z o.o. ul. Objazdowa 6a Pl – 26-300 Wrzesnia T +48 44 731 57 60 F +48 44 731 57 61 E [email protected]

RO sC VPK PACKAGING srl. Str. Iosif vulcan 35 RO-415500 Salonta T +40 359 730 160 F +40 359 730 161 E [email protected]

CORES COReX BelGIUm NV F. liederikstraat 23 BE-8530 harelbeke T +32 56 70 21 21 F +32 56 71 45 92 E [email protected] W www.corexgroup.com

COReX DePAUw NV F. liederikstraat 23 BE-8530 harelbeke T +32 56 71 19 74 F +32 56 71 45 92 E [email protected]

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COReX NeDeRlAND BV Postbus 218 Nl-7640 AE Wierden handelsweg 5 Nl-7641 AC Wierden T +31 546 575 075 F +31 546 575 035 E [email protected]

COReX FRANCe sAs 32 Rue de la Papinerie Z.I. Roubaix Est FR-59115 leers T +33 3 28 33 92 92 F +33 3 20 45 14 56 E [email protected]

COReX UK (division of RIGID Containers ltd.) units 7 & 8 link South Ellis Ashton Street huyton Business Park uK-l36 6BP Knowsley - liverpool T +44 151 489 4513 F +44 151 489 4510 E [email protected]

COReX Czech sro. Prumyslova 7 CZ-682 23 vyskov T +420 517 342 010 F 420 517 345 946 E [email protected]

COReX luxembourg sA Z.I. haneboesch lu-4562 Differdange / Niedercorn T +352 58 44 831 F +352 58 72 55 E [email protected]

COReX POlsKA sp.z o.o. ul. Bydgoska 1 Pl-86100 Swiecie T +48 52 33 10 961 F +48 52 33 10 963 E [email protected]

COReX Nordic As Stavsjøvegen 6 NO-7550 hommelvik T +47 73 97 9400 F +47 73 97 9410 E [email protected]

COReX Deutschland GmbH Werkstrasse 32 DE-46399 Bocholt T +31 546 575 075 F + 31 546 575 035 E [email protected]

sC COReX Romania srl. Str. Iosif vulcan 35 RO-415500 Salonta T +40 359 730 158 F +40 359 730 159 E [email protected]

SOLID BOARD

smARt PACKAGING sOlUtIONs NV Europastraat 28 BE-2321 meer T +32 33 15 04 24 F +32 33 15 04 29 E [email protected] W www.smart-packaging-solutions.com

Division smARt PACKAGING sOlUtIONs in VPK PACKAGING NV Oude Baan 120 BE-9200 Dendermonde T +32 52 26 19 11 F +32 52 22 55 13 E [email protected] W www.vpkgroup.com

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Vpk paCkaGInG GRoup nV

Oude Baan 120

B-9200 Oudegem - Dendermonde

c/a Villalaan 16

B-9320 Erembodegem - Aalst

T +32 (0)52 26 19 11

F +32 (0)53 62 80 58

[email protected]

www.vpkgroup.com

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