Annual report 2004 part 2

SIOEN INDUSTRIES I ANNUAL REPORT 2004

01

3 Sioen Industries, always and everywhere4/5 Key fi gures6 Profi le of Sioen Industries7 Key fi gures by division8/9 Mission and strategy 10/11 Important events & Prospects12/13 Letter to the shareholders14/15 Report of the Board of Directors16 Vertical integration17 Sioen worldwide 18 Group structure19/26 Coating Division27/32 Apparel Division33/38 Processing Division39/55 Corporate Governance57 Staff58 Environmental policy59 Quality60/61 R&D62/63 Share information

64/65 Financial review 97 Financial calendar98/99 Addresses

On, May 10, 2005, the Banking, Finance, and Insurance Commission authorized Sioen NV to use the present Annual Report as a reference document each time it publicly offers securities pursuant to the law of April 22, 2003 relating to public offerings of securities, by means of the procedure of dissociated information, and this until publication of its next Annual Report. In the context of this procedure, a transaction note needs to be attached to the Annual Report. The Annual Report, together with the transaction note, constitute the issue prospectus in the senseof Chapter IV of the law of April 22, 2003. In accordance with Article 14 of the law of April 22, 2003, this prospectus must be submitted to the Banking, Finance, and Insurance Commission.

Only the Dutch version of the annual report has evidential value. This version can be obtained on simple request from Sioen Industries’ head offi ce.

03

Navigation, fi shing industry and water sports Flotation suits, life jackets, protective aquatic clothing, infl atable boats, boat tarpaulins, yacht canvas, ship tarpaulins

Air and water treatment Filters, air conditioning and mine shaft air ducts

Public institutions Clothing, fi remen’s clothing, clothing for police and army,railways, airlines and post offi ces, tents and truck tarpaulins

Publicity and promotion Indoor and outdoor publicity banners, promotional clothing

Construction and road works Reinforcement for gyproc plates, insulation, road fortifi cation, rubble nets for scaffoldings, high visibility protective clothing,silos, storage tents, sun screens, sewage, fi lters

Interior decoration Yarns and pigments for carpets, wall coverings, insulation,ceilings, etc.

Corporate identity wear Clothing for courier services, electricity companies, petrol stations,breweries, telecom companies, airlines, etc.

TransportTruck tarpaulins and curtains, mud fl aps, infl atable containers, railway wagon tarpaulins, protective and industrial clothing for railway, bus, transport and airline companies

Tents Camping tents, party tents, awnings, canopies, halls, semi-perma-nent buildings, kadors

Sports Gym mats, buffers, partition walls in sports centres, children’s playing mats, clothing for hunters, golfers and fi shermen, motor-cyclist’s clothing, safety nets, refl ective clothing for joggers,cyclists and other outdoor sportsmen, pool covers and pool rein-forcement nets, camoufl age clothing for hunters, surfer’s, ski and skater’s clothing

Automobile Airbags, dashboards, sun shades, door panels, gearlever covers, fl oor mats, seats, fi lters, trunk curtains

Agriculture, horticulture, forestry and food industry Windbreak nets, drainage, protective clothing, damming fi lm,fi lters, pond foil, ultra-low temperature clothing, hygienic protec-tive clothing

Chemistry and petrochemistry Specifi c protective clothing, oil dams, fi lters

Medicalprotective clothing, air fi lters, mattress covers, pillow-cases

Sioen industries always and everywhere

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04

40

35

30

25

20

15

10

5

35

30

25

20

15

10

5

20%

16%

12%

8%

4%

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04

100%

80%

60%

40%

20%

31-12

-’96

31-12

-’97

31-12

-’98

31-12

-’99

31-12

-’00

31-12

-’01

31-12

-’02

31-12

-’03

31-12

-’04

50

40

30

20

10

0

1.000

2.000

3.000

4.000

5.000

'94'93 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04

4.500

3.638

862

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04

100

5050%

45%

200

150 55%

60%

65%250

300

Key fi gures 1993/2004 (in millions of EUR)

Group profi t Consolidated cash fl ow EBIT EBIT/Turnover Cash fl ow/Turnover

Investments in 1993/2004 (in millions of EUR)

Added value Gross margin Turnover Gross margin %

Financing of assets 1993/2004 (in %)

Development of employment 1993/2004

Stock price (to 31 December 2004) (in EUR)

Total Workers Salaried employee& Management

ST liabilities Provisions

LT liabilities Capital & reserves/minority interests

Sioen Euro stoxx 50

05

CONSOLIDATED KEY FIGURES (in millions) 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EURTurnover 311,6 272,8 237,7 226,0 192,4 161,1 141,2 107,9 85,1 66,8 48,4Operating profi t 29,8 27,2 24,6 33,8 32,6 28,4 19,6 15,0 9,7 7,7 4,8Financial result (10,8) (11,0) (8,7) (6,7) (3,0) (1,3) (1,7) (1,2) (1,1) (1,9) (2,0)Profi t on ordinary activities before taxation 19,0 16,2 15,9 27,1 29,6 27,1 17,9 13,8 8,6 5,8 2,7Profi t on ordinary activities after taxation 13,8 8,9 11,0 17,3 19,0 17,6 12,3 9,1 6,8 4,5 2,2EBIT (9) 26,7 24,4 23,1 32,4 31,5 27,3 19,0 14,5 9,2 7,2 EBITDA (10) 49,8 52,8 42,8 50,9 45,0 37,8 27,1 19,6 13,2 10,3 Net profi t (group’s share) 11,6 8,6 10,0 16,9 18,8 18,6 12,2 9,0 6,5 4,3 2,0 Capital and reserves 129,2 123,5 125,3 123,9 112,0 97,5 79,8 33,6 25,1 18,6 14,7Minority interests 0,0 2,3 2,0 1,5 1,3 1,1 0,8 0,6 0,4 0,4 0,3Permanent capital (2) 205,4 224,4 231,5 220,4 191,2 166,7 132,7 75,1 59,3 35,8 26,2Long-term fi nancial debt 68,6 89,0 95,1 83,4 66,2 57,3 42,5 35,8 30,3 14,0 8,7Net fi nancial debt (3) 117,6 148,1 134,6 118,4 91,6 71,1 56,7 44,7 40,6 31,1 22,2Balance sheet total 331,8 346,9 331,8 310,3 262,9 227,6 185,3 112,6 89,5 70,1 51,9 Working capital (4) 88,3 108,9 118,5 117,3 101,4 81,4 73,6 43,6 40,7 31,7 20,9 Cash fl ow (5) 36,0 37,3 30,2 35,8 32,5 29,5 20,7 14,2 10,8 7,6 4,9Net investment in tangible fi xed assets (11) 7,1 11,9 30,6 27,1 27,4 28,3 22,4 15,6 10,9 4,5 0,7Fixed assets 167,1 175,8 153,1 138,9 115,7 99,5 73,6 40,7 29,1 21,9 19,0Depreciation & amortization 23,2 22,1 19,8 18,6 14,1 11,6 7,1 4,7 3,2 2,8 2,5Personnel costs 59,0 54,5 47,0 42,8 34,5 30,9 24,1 17,3 13,0 10,3 7,5Number of employees 4.500 4.689 4.271 3.924 3.420 2.857 2.555 1.552 1.231 930 725(in units) Ratios Liquidity (current assets/short-term debt) 1,30 1,40 1,78 1,91 2,05 2,11 2,12 1,92 2,00 1,40 1,28Solvency (capital and reserves/balance sheet total) 38,9% 35,6% 37,7% 39,9% 42,6% 42,8% 43,1% 29,8% 28,1% 26,5% 28,4%Net fi nancial debt/capital and reserves 0,91 1,20 1,07 0,96 0,82 0,73 0,71 1,33 1,62 1,68 1,51Return on equity (6) 9,4% 6,9% 8,1% 15,1% 19,3% 23,4% 36,3% 35,7% 34,8% 29,1% 15,7%ROCE (7) 10,5% 10,0% 9,6% 15,6% 18,1% 19,3% 23,3% 21,5% 18,3% 19,4% 13,5%Net profi t margin (8) 4,0% 3,3% 4,4% 7,6% 9,9% 11,8% 8,9% 8,5% 7,9% 6,8% 4,4%Cash fl ow/turnover 11,6% 13,7% 12,7% 15,8% 16,9% 18,3% 14,6% 13,2% 12,7% 11,4% 10,1%

(2) Capital and reserves + minority interests + provisions for liabilities and charges + amounts payable after one year.(3) Financial debt – cash deposits and cash at bank and in hand (4) Financial fi xed assets + current assets (minus cash deposits and cash at bank and in hand) – non fi nancial debt up one year – accrued charges and deferred income.(5) Consolidated net profi t + depreciation & amortization + provisions for liabilities and charges + write-downs (6) Profi t for the year (group’s share) /capital and reserves at end of previous fi nancial year. (7) Operating profi t/ ((capital and reserves + minority interests + provisions for liabilities and charges + net fi nancial debt) at the start of the period).(8) Net profi t /turnover for the fi nancial year.(9) Earnings Before Interest and Taxes = Operating profi t – Amortization of consolidation differences (goodwill)(10) Earnings Before Interest, Taxes, Depreciation and Amortisation = Operating profi t + depreciation & amortization + provisions for liabilities and provisions + write-downs .(11) Purchases of tangible fi xed assets - transfers and decommissionings and booking out of related depreciation

Consolidated key fi gures per share (2) 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUROperating profi t 1,39 1,27 1,15 1,58 1,52 1,33 0,92 0,75 0,48 0,38 0,24Profi t on ordinary activities after taxation 0,65 0,42 0,52 1,27 0,89 0,82 0,58 0,43 0,32 0,21 0,10Net profi t (group’s share) 0,54 0,40 0,47 0,79 0,88 0,87 0,57 0,45 0,32 0,21 0,10Cash fl ow 1,68 1,74 1,41 1,67 1,52 1,38 0,97 0,71 0,54 0,38 0,24Consolidated capital and reserves 6,04 5,77 5,86 5,79 5,24 4,56 3,73 1,68 1,26 0,93 0,74Gross dividend 0,22 0,20 0,17 0,16 0,14 0,12 0,09 0,07 0,05 - -Net dividend 0,16 0,15 0,13 0,12 0,11 0,09 0,07 0,05 0,04 - -Pay-out (%) 40,7% 49,8% 35,9% 20,2% 15,8% 14,2% 15,7% 15,5% 14,5% - -Maximum share price 10,70 9,16 14,95 23,51 33,65 47,5 43,13 10,68 4,02 - -Minimum share price 8,24 4,70 6,00 10,1 18,4 28,5 9,92 3,92 3,84 Price at Dec. 31. (3) 10,29 8,24 7,65 11,50 20,90 33,00 38,18 9,97 3,92 - -Change in share price (5) 35% 8% -33% (45%) (36,7%) (14%) 283% 154% 13% - -Price/Earnings ratio (6) 19,1 20,5 16,4 14,5 23,8 37,9 67,0 22,1 12,1 - -Price/Cash fl ow ratio (7) 6,1 4,7 5,4 6,9 13,8 23,9 39,4 14,0 7,3 - -Average daily trading volume (no. of shares) (4) 6.550 4.406 5.310 5.104 9.548 13.216 26.671 20.950 43.410 - -Average monthly trading volume (no. of shares) (4) 137.559 92.895 112.837 107.194 199.710 277.530 557.863 434.762 855.860 - -Annual trading volume (in EUR millions ) 16,2 8,3 10,4 20,7 63,7 122,5 162,6 33,9 8,2 - -Number of Sioen Industries shares outstanding (in thousands) (2) 21.391 21.391 21.391 21.391 21.391 21.391 21.391 19.965 19.965 19.965 19.965Stock market capitalisation (in EUR millions) (5) 220,1 176,3 163,6 246,0 447,1 705,9 816,6 199,0 78,2 - -

(2) Recalculated after the 1 to 55 share split by 55 on 13/09/96 and the 1 to 10 split on 05/11/98.(3) On March 31, 2005 the price of the Sioen Industries share was EUR 9.65 per share.(4) 1996 data are strongly infl uenced by the high volumes just after the stock market fl otation of 18 October 1996.(5) Price at end-December.(6) Share price/net profi t (group share) per share(7) Share price/cash fl ow per share

Spreading risk through diversifi cationThe products that Sioen Industries brings onto the market are varied but have technical complexity as their common denomi-nator. Our company slogan is: ‘Protection through innovation’. We protect people and property with high-tech protective clothing for all industrial sectors and with technical textiles for truck tarpaulins and curtains, airbags, swimming pool covers, tents and structu-res, windbreak nets, water tanks, oil dams, road reinforcements, etc.

Permanent research and developmentSioen Industries is an innovative company in terms both of pro-duction techniques and of applications and markets. With input from a high-performing sales and marketing team and develop-ment work by a quality R&D team, we are constantly identifying new applications. A good R&D policy is essential for a knowledge-intensive company such as Sioen Industries. We are acutely aware that innovation is possible only with new know-how ac-quired through a systematic search for solutions to practical pro-blems. This combination of business ideas and research leads to completely new or improved products and production proces-ses.This work is carried out by Sioen Industries’ own research and development staff, either alone or in cooperation with other com-panies, research institutions and universities.

Financial strength Sioen Industries has an excellent fi nancial base. Turnover has ri-sen by 93% in the past 5 years to EUR 311.60 million in 2004. In the same period capital and reserves have increased from EUR 97.5 million to EUR 129.2 million and operating cash fl ow (EBIT-DA) from EUR 37.8 to EUR 49.8 million (+ 32%).

Expertise and experience: 45 years of SioenIn 1960, now 45 years ago, Mr Jean-Jacques Sioen started the fi rst coating line in Beveren (Belgium). It was a line with two workers, but it marked the beginning of Sioen Industries as we know it today - a solid listed company with some 35 sales and production sites, 4,500 employees and turnover of EUR 311.6 million. Since then, Sioen Industries has become the global mar-ket leader in coated technical textiles, European market leader in industrial protective clothing, a niche specialist in fi ne chemicals, and processes technical textiles into semi-fi nished products and technical fi nal products.

Three divisions under one roofThe Coating division is the global market leader in the integra-ted coating of technical textiles and controls the entire production process from the extrusion of yarn (spinning), through the weaving of technical cloth and production of pigment pastes and granules to coating with various materials. This vertical integration is an undeniable competitive advantage.

The Apparel division is the market leader in the design and production of high-value protective clothing for both industrial and recreational applications. Quality and fl exibility characterize Sioen’s reputation in this fi eld.

The Processing division is responsible for processing coated fa-brics and PVC fi lms. The division includes all of the group’s heavy confection activities: pond foil, kadors, airbags, side curtains and tarpaulins, fi lters, sliding gates, etc. Sioen is also one of the largest global players in these activities.

Activities were partially reorganized in 2004 with the integration of the production of pigment pastes and granules into the coating division. Vertical integration in this division is now complete.

A global player operating worldwideSioen Industries has facilities in 15 different countries, sells in 68 countries and has 19 nationalities among its staff.

Profi le of Sioen Industries

Key fi gures per division

07

Turnover by geographical markets.

Coating division Apparel division Processing division 01 Benelux 18,4% 23,3% 20,2% 02 France 20,4% 31,6% 12,1% 03 Germany 12,3% 7,8% 47,3% 04 UK 6,1% 16,2% 8,7% 05 Spain 4,9% 0,7% 0,4% 06 Scandinavia 4,1% 1,7% 0,9% 07 Switzerland 1,7% 2,8% 0,1% 08 Eastern bloc countries 12,0% 0,5% 2,6% 09 Austria 1,5% 2,1% 0,4% 10 Ireland 0,5% 4,0% 0,1% 11 USA 0,6% 4,6% 3,7% 12 Italy 7,7% 0,7% 1,3% 13 Other 9,9% 4,0% 2,3%

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04

1630,1

43,754,9

70,486,9

100,4

119,1134 139,7

151,6

172

Key fi gures 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

Coating division *Third party turnover (in millions) 172,0 151,6 139,7 134,0 119,1 100,4 86,9 70,4 54,9 43,7 30,1Investments 5,5 10,0 25,3 21,8 21,2 20,2 17,6 12,4 10,2Employees on 31/12 764 749 637 621 625 461 387 226 172 121 98

Apparel divisionThird party turnover (in millions) 68,2 71,5 71,9 75,8 62,0 48,6 44,8 31,4 24,6 21,1 17,0Investments 0,9 1,2 3,5 5,3 3,8 4,8 2,3 1,5 0,7 Employees on 31/12 2.921 3.186 3.207 3.151 2.659 2.271 2.062 1.234 992 777 598

Processing divisionThird party turnover (in millions) 71,4 49,6 26,0 16,2 11,3 12,0 9,4 6,1 5,7 2,0 1,3 Investments 0,2 0,3 1,7 0,0 1,8 3,1 1,7 1,4 0,1 Employees on 31/12 766 717 143 120 104 93 84 72 51 17 17

* Coating division including EMB & Inducolor for all years.

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04

1317

21,124,6

31,4

44,848,6

62

75,8 71,9 71,568,2

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04

1,1 1,3 25,7 6,1

9,4 12 11,316,2

26

49,6

71,4

Turnover 1993-2004 (in millions of euros)After eliminating intra-divisional sales

Coating division Apparel division Processing division

1

2

345

67

8

91011

12

131

23

4

56789

1011

12 131

2

3

45689111213

Mission and Strategy

Diversifi cation and market penetrationMarket sectors:Sioen Industries is loyal to its policy of vertical and horizontal integration through the development of new products and the acquisition of complementary companies. Geographical spread:Sioen Industries explores new markets and develops existing ones.

Innovation: development and investmentSioen Industries wishes to maintain and develop its technical lead in all the sectors in which it operates.The development and research team is continuously reinforced and supported with people, materials, buildings and test lines. Processes at existing plants are constantly evaluated and adapted to the latest technological developments.Sioen Industries invests in new sites and in modernising existing ones.

People and the environmentSioen Industries creates a stimulating working environment with career opportunities and space for entrepreneurship andcreativity.Sioen Industries has an active environmental policy and invests in recycling and energy recovery technology.

MissionSioen Industries: protection through innovation.

We have a strong profi le in the production, development and sales of coated technical textiles, protective clothing and fi nechemicals. Quality and fl exibility go hand in hand with cost-effectiveness and added value.

StrategySioen Industries’ long-term strategy is one of vertical integrati-on with a focus on sustainable growth, quality, innovation and profi tability. In our case, vertical integration means having the complete production process from raw material to the fi nished product in our own hands: we spin, weave, coat, make pigments and cut and process technical textiles.

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09

Important events & prospects

Important events in 2004At the end of 2004 Sioen acquired the 25% minority interests in Coatex, Saint Frères Confection and Bacam. The acquisition price was EUR 5.8 million, of which EUR 2.9 million has been recognized under consolidation differences. The minority interest in the 2004 net profi t is EUR 0.8 million.

Signifi cant events after the balance sheet dateFollowing a strategy change at the Mercator Verzekeringeninsurance group, it was agreed by mutual consultation on February21, 2005 to terminate the shareholders agreement between Mercator Verzekeringen and Sihold n.v.. At that date, Mercator Verzekeringen held 2.8% of Sioen Industries n.v..

MJS Consulting bvba, whose permanent representative is MicheleSioen, was appointed as Managing Director of Sioen Industries n.v. on March 22, 2005.

ProspectsIn a more general context we can state that the focus for 2005 lies on further improving the group’s profi tability. Each company that has diffi culties in achieving the internally defi ned profi tability criteria will be examined in detail, and appropriate action will be taken.

At the same time we can assume that the revival in the truck sec-tor will be refl ected in direct coating (Coating division) and the associated production of truck and train tarpaulins (Processingdivision). R&D is of central importance in both divisions: Sioen has developed a zip system for advertising on truck side curtains (Publicity banners are zipped onto truck side curtains. In this way the advertising message can be changed quickly without having to replace the entire curtain), improved the siosteel concept (anti-vandalism cloth for trucks) and patented a high-tech anti-radar net. These and many other developments will reinforce Sioen’s market leadership even further.

In the Apparel division, the group intends to continue to focus on high-quality technical products. ‘Protection through innova-tion’ in the Apparel division means further development of niche markets with high added value where technical complexity isimportant, i.e. intelligent clothing, bullet and knife-proof vests, etc. It has also been decided to exploit this know-how in non-industrial markets. Sioen recently competed successfully for an order for the French army on this basis.

11

Letter to the shareholders

FocusDuring the past 2 years Sioen Industries has focused on im-proving the company’s creditworthiness. Balance sheet control has been an absolute priority and in 2004 the results of theseefforts can be described as more than satisfactory. Over two years, working capital has fallen from around 50% of turnover to under 30%. The net fi nancial debt position has been pushed down from EUR 148 million to EUR 118 million and ‘capitalemployed’(1) has reduced to 83 eurocent per euro of turnover. The goals of two years ago have thus been convincingly reached.

Entrepreneurship means constantly setting goals and realisingthese. In the coming years we wish to put the focus on‘profi tability’. This is fully in line with the group’s strategy (see page 8), where the challenge is again to continue achievinghigher turnover with an improved ROCE.(1) working capital + fi xed assets

Customer relations and marketsSioen Industries was very successful in developing customer relations and growing turnover in 2004. The internal growth in turnover in 2004 is the result of partnerships with existing cus-tomers (that is, close cooperation between Sioen and the cus-tomer-partner in planning, logistics, sales efforts, IT, promotion and communication), active prospecting and acquisition of new customers. The group will certainly continue to pursue the same course in coming years. A more intensive effort will also be made to win tenders. In 2004 the Apparel division gained an important contract to supply protective clothing for the French army (total revenues over 5 years: EUR 42 million).

Sioen has a strong presence in the traditional West European markets where market penetration is high. It nonetheless plans further growth in these markets through product developments. Turnover in Eastern Europe has risen spectacularly in recent years due to intensive sales and marketing efforts. We will continue to grow here in the coming years with our existing and new pro-ducts. The US will also gain in importance in the next few years with the establishment of an additional sales offi ce there (begin-ning of 2005). Sioen also continues to profi le itself as a quality supplier of technical textiles in Asia.

Dear Shareholder,

We are pleased to present the 2004 annual report for yourattention.

Turnover rose by 14.23% to EUR 311.6 million. This strong and largely internally generated (8.65%) growth is the result of the investments made by the group in recent years. EBITDA and cash fl ow were EUR 49.8 million (16% of turnover) and EUR 36.0 million (11.6% of turnover) respectively. Net profi t after taxation was EUR 12.4 million, up no less than 38% compared with last year.

13

New Managing DirectorThe new corporate governance charter which comes into force after the May 2005 general shareholders’ general meeting, pro-vides among other things for a separation of the functions of chairman and CEO. As a result, I and my wife Jacqueline Sioen-Zoete have resigned as Managing Director of Sioen Industries and MJS-Consulting bvba, whose permanent representative is Michèle Sioen, has been appointed as Managing Director.

The 2004 results and the long-term strategy that we are imple-menting undoubtedly herald an attractive future. Sioen Industries will continue to respect the fundamental values that we have already promoted for 45 years.

It is clear that we are unable to achieve our goals, the pursuit of long-term profi tability and the creation of value for our sharehol-ders without the contribution of over 4,500 employees world-wide.

J.J. Sioen ChairmanManaging Director

J.N. Sioen-Zoete

Managing Director

PortfolioProduct diversifi cation has always been on the agenda at Sioen. You can read the sectors in which Sioen operates on page 3 of this annual report. The new products the group has developed are the result of intensive R&D. The research and development team works in close consultation with customers, sales staff, marketing specialists, production managers, buyers, universities and external research centres to achieve new ‘ready for market’ products.

Sioen’s success stories in 2004 included the development of a new type of trunk curtain for cars, an updated version of Siosteel (an anti-vandalism side curtain for trucks), bullet and knife-proof vests, a unique breathing fl otation suit, coated airbags and apatented anti-radar net.

Product development is a permanent process, where the group’s vertical integration is an important advantage.

Production processThe group’s production system plays an important role in the operating result. Optimisation, speed, planning and effi ciency are the keys to success in a production-driven company such as Sioen. The course has been set to achieve an even better perfor-mance in existing production plants than in 2004. A well-thought out investment policy will lead to even greater cost analysis and control.

Redefi nition of the divisionsSioen Industries comprises 3 divisions (coating, apparel and pro-cessing) and an umbrella group structure (IT, fi nance, HR, legal department and marketing). IFRS has provided the impetus for a logical restructuring of activities within the Sioen group.Apart from a few shifts, the three divisions remain unchanged, each with its own core activities. The Coating division encompas-ses all activities leading to the production of coated technical textile (see pages 19-25): spinning, weaving, dyeing (pigment pastes, granules and varnishes) and coating. The Apparel division includes the production and sale of protective clothing. Finally, the Processing division includes all heavy confection activities. This latter division becomes the ‘Industrial applications’ division as from 2005.

Report of the Board of Directors

- To complete the product range and to secure our commercial position, “low end” products were imported from the Far East and placed on the market here at a competitive price.- Prices of the main raw materials spiralled to their highest levels for fi ve years.- A fairly signifi cant change in sales mix. Pennel and Roltrans, two companies operating in markets with traditionally lower gross margins, were included in the consolidation scope this year for 12 months. Also affecting gross margin was theevolution of Coatex from a services supplier to subcontractor status, where both base material and services are invoiced.

The increase in costs of “services and other goods“ (+EUR 6m) and “personnel costs” (+EUR 4m) can be attributed to the variablecharacter of these costs in relation to the turnover, and to the companies taken over in 2003 and which are now consolidated for a full year.

Depreciation also rose slightly (+EUR 0.7m) in comparison with 2003 as a result of the above-mentioned enlargement of the consolidation scope.

Write-downs on inventory and customer receivables amounted to EUR 0.98m as against EUR 3.4m in 2003(1). Last year a new and quite strict rating system was established. After some neces-sary catching up in 2003, the system is now running at cruising speed.

Provisions for liabilities and charges included three provisionsfor pending disputes amounting to EUR 0.56m. Also under thisheading, a provision(2) built up in previous years to cover a taxdispute was reversed following an out-of-court settlement (EUR 1.7m), with a positive impact of EUR 1m on operating profi t. The cost of the settlement (EUR 1m) is recorded under the taxes heading.

Other operating charges are mainly local taxes, which are not profi t-related, such as the “taxe professionnelle” in France and property tax in Belgium.

Operating profi t, at EUR 29.8m, is up 9.44% on 2003.

Operating cash fl ow (EBITDA) comes to EUR 49.8m or approxi-mately 16% of turnover. This slight dip of 5,7% in comparison with 2003 can be fully ascribed to a changed competitive envi-ronment and the associated fall in gross margin % on turnover.

Dear Shareholder,

The Board of Directors is pleased to report to you on the activities of the Sioen Industries group and to submit the annual accounts for the year ended on December 31, 2004 to the general mee-ting of shareholders for approval.

In 2004 the Sioen Industries group achieved a turnover of 311.6m compared with EUR 272.8m in 2003. Of this 14.23% growth, 8.65% or EUR 23.6m was internally generated, the re-maining 5.58% or EUR 15.2m is external growth.

The coating division increased turnover to 172m, up 13% on last year’s (restated) fi gures. This fi gure includes the turnovergenerated by EMB, which is included this year in the coatingdivision as part of the integrated chain, whereas last year it was still part of the processing division. (EMB or European Master Batch is a Sioen Industries subsidiary specialised in the produc-tion of pigment pastes and granulates.) With one exception, the coating division posted good growth in all product lines, especi-ally “truck” and “textile architecture”, which grew 22% and 34% respectively. The coating division features a high level of vertical integration, enabling it to achieve greater added value on its pro-ducts. Activities are not limited to coating but also include the spinning and weaving of fabric. The coating division now has fi ve coating techniques, each for specifi c technical applications.

Turnover in the apparel division was 68.2m as against 71.5m in 2003. This downward movement can be explained by the continuing commercial pressure on high-volume, low-technicitymarkets. Sioen is focusing on high-technicity products andapplications such as bullet- and knifeproof vests, fl otation suits, fi refi ghting suits, protective clothing for the petrochemical sector, clothing for forest workers, ...

The processing division maintained its strong momentum with turnover of EUR 71.4m in 2004 as against EUR 49.6m in 2003 (after EMB reclassifi cation). This substantial growth of 44% was mainly achieved by Coatex, which specialises in cutting and proces-sing technical textiles, by Nordifa, which produces fi lters and fi ltercloths, and by the Roltrans group where the recent restructuring is producing tangible results.

Group resultsGross margin of 51.7% as against 55% in 2003 was substanti-ally infl uenced by the following parameters:

15

“Next prime” and “Next Economy” segments to publish their con-solidated results from 01/01/2005 onwards in accordance with International Financial Reporting Standards (IFRS).

The interim report for the fi rst quarter of 2005 will be the fi rst fi nancial report presented under the new IFRS rules. For this pur-pose the opening balance drawn up under Belgian accounting principles at 1 January 2004 has been restated to produce the IFRS opening balance at 1 January 2004. The effects of this res-tatement have already been audited and are explained in detail in the 2004 annual report. A reconciliation of the 2004 income statement drawn up according to Belgian accounting principles and the income statement for the same period drawn up ac-cording to IFRS will be given in the interim report for the fi rst quarter of 2005.

DividendThe Board of Directors will be proposing to the general sharehol-ders’ meeting that the company distribute a gross dividend for 2004 of EUR 4.7m or EUR 0.22 per share, an increase of 10% on the previous year.

Minority interestsThe 25% minority interest in the companies Coatex, Saint Frères Confection and Bacam were acquired by the group at the end of the fi nancial year. The minority interest in the profi t for the present fi nancial year amounts to EUR 0.8m.

Mercator bank en verzekeringen As a result of a strategy revision within the Mercator Bank en Verzekeringen insurance group it was mutually agreed on 21 Fe-bruary 2005 to end the shareholder agreement. The shareholder percentage on that date amounted to 2.8%.

Future prospects In a more general context we can state that the focus for 2005 lies in further improving the profi tability of the group. This means that any company which has diffi culties in reaching the internally established profi tability criteria will be subject to a thorough exa-mination, after which appropriate measures will be taken.

At the same time we can assume that the revival in the truck sector will be refl ected in direct coating (coating division) and in related heavy-duty confection, namely the production of tar-paulins for trains and trucks (processing division). R&D is central to both divisions: Sioen patented a zip system for advertising on retractable truck curtains, improved the siosteel concept (a vandalproof cloth for trucks) and developed a hi-tech anti-radar net. These are but a few of the developments which will further reinforce Sioen’s market lead.

In the apparel division, the group intends to concentrate further on high-value, technical products. ‘Protection through innovation’ means for the apparel division a further extension of the niche value-added markets - intelligent clothing, bullet- and knifeproof vests, etc. - in which technicity is important. It has also been de-cided to take advantage of this know-how in other than industrial markets. An example of this is the recently successful bid for an order for the French army.

(1) Last year this item also included the reclassifi cation of EUR 2.2 million from the gross margin to amounts written off inventory(2) 2003: kEUR 213; 2002: kEUR 180(3) working capital + fi xed assets

Net fi nancial charges (excluding amortisation of consolidation goodwill) run to EUR 7.7m as against EUR 8.2m in 2003. This decrease is the logical consequence of a reduction of the group’s net debt position.

Adequate provisions are set aside for all known risks. Under the group’s internal guidelines, foreign exchange risks are covered by forward contracts for the account of Sioen Industries n.v. The total nominal value of these contracts, which run for under one year, is EUR 6.89 million. The market value of forward contracts amounted as of December 31, 2004 to EUR -0.1 million and is fully recognized in the income statement. All forward contracts cover underlying transactions. In no event are derivatives used for speculative purposes.

Under extraordinary charges are grouped a number of one-off provisions and costs totalling EUR 2.2m relating to the reorgani-sation programmes at the Roltrans group, which are now coming to an end. These include the payment of EUR 1.5m of redun-dancy compensation and a further provision of EUR 0.7m.

Profi t before tax for the past year amounts to EUR 16.8m as against EUR 16.3m in 2003, or a rise of approximately 3%.

Income taxes in 2004 amount to approximately EUR 4.4m as against EUR 7.4m in 2003. This decrease is due principally to the offsetting of deferred tax claims on the transferred tax los-ses of the Roltrans group (EUR 3.2m). This deferred tax claim implies that, with the offsetting of fi scally transferable losses from the past, no tax will be payable on future taxable profi ts of the Roltrans group. The Roltrans group’s present and future opera-ting profi ts justify the recognition of this tax asset. For 2004 the Roltrans group can already present a positive operating result, and is expected to make a substantial contribution to group profi t in 2005.

The net profi t after tax amounts to EUR 12.4m as against EUR 8.9m in 2003, or a rise of 38%.

Balance sheetAll the internal objectives set by the Board of Directors in terms of balance sheet structure were achieved. Working capital was pared back to 30.1% of turnover from 40% in 2003, and approxima-tely 50% two years ago. Coupled with this, “capital employed”(3) was brought down to EUR 260m (2003: EUR 283.6m), or 0.83 eurocent per euro of turnover. The net fi nancial debt position was also signifi cantly improved, and now stands at EUR 118m as against EUR 148m in 2003.

After implementing and validating the necessary assumptions, future prospects and analyses, the Board of Directors is of the opinion that no permanent reductions in value need to be ap-plied to the consolidated annual accounts.

All new investment opportunities are systematically evaluated and their impact on the balance sheet structure simulated in or-der to maintain a healthy balance sheet structure; and with an eye to future growth.

IFRSIn accordance with the European regulation adopted on 19 July 2002 (1606/2002), Euronext requires listed enterprises in the

Vertical integration

EXTRUSION YARN

WEAVING

COATING

DISTRIBUTION

CUSTOMER

DESIGN

MANUFACTURE/PRODUCTION

DISTRIBUTION

CUSTOMER

DISTRIBUTION

CUSTOMER

PASTES AND GRANULES

PROCESSING

17

Sioen worldwide

Coating Division

Apparel Divis

ion

Processing Divis

ion

1 Sioen Coating Division - Sioen Apparel Division Siotec - Veranneman TT Sioen Coating Distribution - ARDOOIE 2 Coatex - POPERINGE 3 Sioen Fibres - distribution/spinning - Sioen Fabrics - weaving and coating - MOUSCRON 4 TIS - KERKSKEN 5 European Masterbatch/EMB - BORNEM 6 Sioen - Baleno® - ANTWERP 7 Sioen Nordifa - LIÈGE 8 Inducolor - MESLIN-L’EVÊQUE

19 Sioen Tunisie - CTS - Sioen Zaghouan - TUNIS 20 Siofab - PORTUGAL 21 P.T.Sungintex - BEKASI BARAT 22 P.T.Sioen Indonesia - JAKARTA 23 Sioen Shanghai - SHANGHAI 24 Sioen - UK 25 Pennel - ROUBAIX 26 Roltrans Group America - TEXAS 27 Roland Ukraine - RIVNE

924

10

17

16 15

19

21

22

23

20

2511

13 1218

27

25

7

8

43

1

6

26

9 Donegal Protective Clothing - DONEGAL 10 Mullion Manufacturing Ltd. - SCUNTHORPE 11 Saint Frères - Saint Frères Confection Bacam - FLIXECOURT 12 Roland International - TEGELEN 13 Roland Tilts UK - BRADFORD 14 Giesemann - Sioen GmbH - WERLTE 15 Sioen France - NARBONNE 16 SIP® protection - FOIX 17 Vidal protection - GRAULHET 18 Roltrans Group Polska - KONIN

14

Group structure(1)

Coating Division

Apparel Divis

ion

Processing Divis

ion

Coating Division

Sioen Coating n.v.(2)

Direct Coating Belgium

Saint Frères s.a.s.Direct Coating France

Sioen GmbHSales Offi ce Germany

Sioen Coating Distribution n.v.Sales Offi ce Belgium

Sioen Fabrics s.a.(2)

Weaving/Transfer Coating Belgium

Sioen Fibres s.a.Spinning Belgium

Sioen Shanghai(3) Sales Offi ce China

Siofab s.a. Transfer Coating Portugal

TIS n.v.Weaving/Direct Coating Belgium

Veranneman TT n.v.Weaving/Direct Coating Belgium Pennel Automotive s.a.s.Calendering France

European Masterbatch n.v.(2)

Production of Masterbatches Belgium

Inducolor s.a. Production pigments pastes Belgium

Processing Division

Coatex n.v.Processing of coated fabrics andfoils Belgium

Saint Frères Confection s.a.s.Heavy Manufacture France

Sioen Nordifa s.a.Production of industrial fi lters Belgium

Bacam s.a.s.Heavy manufacturing France

Roland International(7) b.v.

Roltrans Group America Inc

Giesemann LKWPlanen GmbH

Roltrans Group Polska sp.z.o.o.

JV Roland Ukraine llc

Roland Tilts UK ltd

1) The stated percentages have been rounded, situation on March 22, 2004. 2) Sioen Industries also has a 99.1% stake in Sirec SA, the group’s reinsurance company. Sioen Coating nv, Sioen Fabrics sa and EMB nv each hold 0.3%. 3) The offi cial name is: Sioen Coated Fabrics Shanghai Trading Ltd. 4) The offi cial name is: Gairmeidi Caomhnaithe Dhun na nGall Teoranta. 5) Via Sioen Coating nv. 6) 5% via P.T. Sungintex 7) Via Monal s.a. and Roltrans Group b.v. respectively. Activities taken over in March 2003 8) Merged with Vidal Protection s.a.s. and Sip Protection s.a.s. in December 2004 and January 2005 respectively.

Apparel Division

Sioen n.v.Apparel Belgium

Confection Tunisiennede Sécurité s.a. Apparel Tunisia

Donegal ProtectiveClothing Ltd. (4) Apparel Ireland

Mullion Manufacturing Ltd.Apparel UK

P.T. Sioen IndonesiaApparel Indonesia

P.T. SungintexApparel Indonesia

Sioen Fibres s.a. Central distribution and dispatching centre - B

Sioen France s.a.s.(8)

Sales Offi ce France

Sioen Tunisie s.a.Sales Offi ce Tunisia

Sioen UK Ltd.Sales Offi ce UK

Sioen Zaghouan s.a.Apparel Tunisia

Siotec b.v.b.a.CAD/CAM-services Belgium

Sioen USA Inc.(6)

Sales Offi ce USA

99%

100%

96%

100%

100%

100%

100%

100%

100%

99%

100%

90%10% (5)

100%

99%

100%

95%

95%

100%

100%

100%

99%

95%

100%

100%

100%

100%

99%

100%

5%

5%

100%

99%

100%

100%

100%

100%

60%

100%

19

COAT

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World market leader through vertical integration

The Coating Division is the world leader in the integrated coating of synthetic fabrics and forms the fi rst pillar of the Sioen Industries group.

Coating, a defi nitionSioen has specialized in coating (literally covering) textiles for 45 years. Described simply, coating is covering a carrier with a protective layer. Carriers treated with PVC, PU, silicon or another plastic acquire specifi c technical qualities, becoming waterproof, microporous, fi reproof, anti-static, breathing, printable, etc. and offering protection against water, wind, cold and chemical pro-ducts.There are 4 key terms in this description:• the coating layer or protective layer, consisting of polymers in

liquid or solid form• the carrier or substrate, in the form of a woven or knitted fabric

or non-woven item (such as needle felt)• the coating technology: this includes the entire process of

applying the coating layer to the substrate• the technical textile or end result.

Vertical integrationSioen takes responsibility for the entire production process, from the raw fabric and pigment pastes to coating and processing the technical textile. This provides the group with an undoubted competitive advantage. Capacity and fl exibility, a highly automa-ted production system, a permanent concern for quality, a strong spirit of innovation and a targeted research and development policy together characterize the Coating division.

Vertical integration: the coating layerThe coating layer can consist of PVC, polyurethane, silicon or other polymers. Sioen produces the pigment pastes and granules used to dye the coating layer itself in its EMB and Inducolor faci-lities, which were part of the Processing division up to 2004 but now belong fully to the Coating division. The pastes are mixed in fully automated paste preparation units and then brought to the coating line by robots.

EMB and Inducolor produce masterbatches. These are pigment pastes and granules that are used as a raw material for dyeing all types of materials. EMB also produces special varnishes, com-pounds and all types of lacquers. In addition to a robust standard range both companies have a strong position in the production of tailored products. An individual approach at the level of deve-lopment, sales and production is central to both companies. CO

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Pigment pastesThe pastes are used to dye various kinds of plastics (polyuretha-ne, silicone, water and PVC coatings, paints, epoxies, etc.).Applications include technical and industrial textiles, PU foams, cars, fl oors, etc.

GranulesThe EMB granules are used in injection moulding, sheet extru-sion, fi lm and fi bres, and blow moulding. All kinds of technical polymers (PP, PE, PS, PET,ABS, etc.) are coloured with these granules. Finished products can be found in textiles (e.g. carpet fi bres), packaging, plastics and many other sectors of industry.

Both EMB and Inducolor are part of the Coating division. In ad-dition to outside sales, pigment pastes and granules are used intensively in the Coating division: pigment pastes for dyeing the pastes used in direct, transfer and online coating, granules for extrusion coating and calendering.

In a market with many chemicals giants, EMB and Inducolor are genuine niche specialists. They have distinguished themselves for over 20 years as rapid, fl exible and service-oriented suppliers of tailor-made products. This customer focus, combined with ex-pertise and know-how and the ability to deliver small, medium-sized and large volumes and products tailored to the customer’s needs, give EMB and Inducolor a strong reputation as a niche specialist.

Vertical integration: the carrier

Yarn (spinning/extruding)Sioen has the world’s most modern spinning mill for the produc-tion of polyester high tenacity yarns and polyamide yarns. Part of the fi bres are then twisted in the twisting mill. The spinning mill has an output of ±15,000 tonnes of polyester and/or polyamide high tenacity yarns. Woven fabricsThe yarns are supplied as a raw material to the group’s three weaving mills which all have their own specialisation: sailcloth, open structure textiles, polyester high tenacity textiles, airbag tex-tiles, etc. The fabrics all meet high technical requirements for tensile strength, tear resistance, etc. Sioen has also acquired the necessary certifi cation for automotive applications.

21

Non-wovenSioen produces needle felt in its plant in Liège. This needle felt is then used among other things as a carrier for extrusion coating in the coating division.

Vertical integration: technology and technical textileSioen focuses on various coating processes, each serving a dif-ferent market. Sioen Industries has a total of seven coating plants (4 in Belgium, 2 in France and 1 in Portugal), with the most advanced production lines in the world. Extreme fl exibility and short lead times enable Sioen to produce both large and small runs in all colours and widths that the customer selects. All plants are equipped with the most modern machinery and are highly automated. Direct coatingDirect coating means that the PVC coating paste is directly ap-plied to the cloth. The coated fabric is used for tarpaulins and side curtains for trucks and railway wagons, publicity banners, textile architecture (buildings made with cloth), camping tents, gym mats, pool covers, covers, infl atable silos, fl exible containers, container tops, etc.

Transfer coatingIn two Sioen production units the coating paste (polyurethane, silicone, etc.) is applied to a fabric via a paper support. This coa-ted fabric is used for protective clothing, outdoor sports wear, shoe protectors, mattress covers, airbags, handbags, body bags and self-adhesive fi lm. Online coatingIn on-line coating the fabric is immersed directly from the loom into a coating bath.Veranneman Technical Textiles uses this technique to manufac-ture open structure textiles. There are many applications for this process: geogrids, pool covers, reinforcement nets, wind-breaking nets, fi lters, publicity banners, grinding mills, etc. Extrusion coatingThis multifunctional coating technique allows us to use other base materials (textiles, non woven, knitted fabrics, etc.) and to coat them with various polymers. The granules are melted in extruders and pressed into a film that is then laid on a car-rier. Applications: ventilation ducts, pond foils, window foils, drainage renovation, etc. CO

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Rolling/CalenderingPennel Automotive, part of the group since March 2003, producesTPO (Thermoplastic Polyolefi n) and PVC fi lms. These fi lms are then passed through a press to obtain the desired motif/texture. The fi lms are used in the vehicle industry for dashboards, door panels, backs of car seats, sun shades, etc.

Turnover The Coating division’s turnover rose again by 13% in 2004 to EUR 172 million of which 4% external growth through 4months Pennel Automotive and 9 months Plastylon. The Coatingdivision grew in almost every segment and all its geographical markets.

SalesThe Coating Division’s products are sold worldwide under the reputed brand name Sio-Line®. In addition to the permanent sales staff operating out of the Ardooie headquarters and the Mouscron facility and a number of local agents, the Coating di-vision has its own sales offi ce in Germany (Sioen GmbH) and separate sales units in France, China (Sioen Shanghai) and from 2005 also in the USA (Sioen Coating USA). A keen and dynamic internal/external sales team with many years’ knowledge and ex-perience provides a permanent line of communication between the market and the company.

Applications and sectorsSioen technical textiles can be found in nearly every sector:agriculture, horticulture, transport, publicity, recreation, food and clothing, cars, medicine, sports, petrochemicals, construction,etc.

Sioen’s technical textiles are used, among other purposes, for tar-paulins and side curtains for trucks and railway wagons, publicity banners, textile architecture (buildings made with cloth), camping tents, gym mats, pool covers, covers, infl atable silos, fl exible con-tainers, container tops, protective clothing, outdoor sports wear, shoe protectors, mattress covers, handbags, body-bags and self-adhesive fi lm, geo-grids, pool covers, reinforcement nets, wind-break nets, fi lters, advertising banners, grinding mills, ventilation pipes, pond foil, window foil, sewer renovation, dashboards, door panels, the rear of car seats and sun shades, etc.

With approximately 36% of the external turnover of the Coating division, the market for PVC coated tarpaulins and side curtains for trucks and railway wagons is the most important segment.

23

Sioen is the undisputed market leader here with an estimated 50% market share. This market, of both new and replacement tarpaulins and side curtains, is mainly located in Western Europe, where the large trailer builders are situated. Sioen maintains good customer contacts with both trailer manu-facturers and side curtains manufacturers. The use of PVC coated textiles has not yet become customary in the American market, where trailers are usually hard-bodied. A strong reputation for quality, fl exibility, large standard range and market knowledge are Sioen’s most important trump cards.

Each year Sioen succeeds in increasing turnover in this segment, expanding its market share and reinforcing its competitive posi-tion through product innovation. This includes Siosteel, a com-bination of PVC coated technical textile with a coated steel net, which Sioen has introduced onto this market. Side curtains in this material offer better protection against vandalism. Sales of this product increased rapidly in 2004 with certain insurance compa-nies offering cheaper insurance premiums to hauliers that equip their trucks with Siosteel.

11% of the Coating division’s production is for the automotive sector: TPO and PVC fi lms for car interiors, trunk canvas and air-bags. The technical textile for car interiors is produced and sold by Pennel Automotive, a long-established French company with a strong presence in its home market. Pennel Automotive has an estimated market share of 20%. In 2004, a restructuring program was started in order to reach the internally imposed profi tability criteria in the future. The future growth of this segment lies both in geographical expansion to other markets such as Germany and in product innovation.

Sioen profi les itself as a full service supplier in the airbags market. Here again, vertical integration is an unmistakeable plus. Sioen extrudes the polyamide yarn in its own spinning mill, weaves it into a carrier and coats it in one of its plants. As an extra service Sioen cuts the fabric with high tech laser cutters in its Coatex plant (a part of the Processing division). This production process was optimised completely in 2004, opening up attractive pros-pects for the coming years.

Another 6% of turnover is in geo-textiles and roofi ngs. The tech-nical textile is used as reinforcement netting for roads, roofs and all types of plates. With approximately 50% of the market Sioen is also the European market leader in this segment. Geographical expansion to the US and elsewhere is one of the goals for the CO

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coming years. The Coating division will be opening a sales offi ce in the US in 2005, which will promote open structure fabrics along with closed technical textiles.

Two growth markets for Sioen, Sign and textile architecture, accounting for 7% and 5% of the Coating division’s turnover respectively, will be able to reap the benefi ts of R&D efforts in coming years. Sign is the collective name for all types of publicity banners: technically coated textile that can be both silkscreen and digitally printed. In this price-sensitive market Sioen profi les itself as a service-oriented quality supplier. Textile architecture is understood as technical textiles for tents and structures.Sioen has developed here a range which can compete with niche specialists.

10% of the coating division’s turnover is in fl exible, breathing technical textile used for clothing and mattress covers. Thanks to its modern production system, large volumes, R&D and know-how and the advantages of vertical integration, Sioen can be suc-cesful in this nonetheless competition-sensitive market (Asia).

Sioen is the global market leader in technical textiles for swim-ming pool covers and aboveground pools. This segment repre-sents 7% of turnover and a market share of 71%.The greater proportion of the turnover comes from France, where the major producers of swimming pool covers and overground pools are located. Once again the focus is on technical know-ledge, market knowledge, service and quality as the basis for success.

In the past 10 years Sioen has succeeded in limiting its depen-dence on its largest segment through product diversifi cation. Even so, this segment continues to grow. Its product diversifi cation and success in the ‘new’ niche markets is the result of intensiveefforts at the level of R&D, sales, marketing and production.

25

Competitive positionSioen accounts for 41% of all large width coating capacity in Europe, with the remaining 59% distributed between a German competitor and many small local competitors in Spain, Italy, Au-stria, Germany, France, Scandinavia, etc. Whereas all of these smaller coaters operated in the same segments up to a few years ago, we now observe a trend towards specialisation. One com-pany focuses on textile architecture, another on publicity banners (Sign) and another again on geo-textiles.You can read more about the situation in different countries and segments in the ‘applications and sectors’ and ‘geographical dis-tribution’ sections.

New products and developmentsThe coating division can pride itself on a well performing R&D centre. Here professionals focus on product development and innovation, but also on process enhancement. Product optimi-sation is a constant factor in this. Research and development (R&D) are important for a company like Sioen. Staying ahead in the market means investing permanently in research and de-velopment. An example of this is the central R&D unit at our Ardooie headquarters. This research operation not only has the most modern facilities; it can also pride itself on its employees’ expertise and experience.Apart from this central R&D unit Sioen has a further ten research centres worldwide. The main production sites each have their own laboratory where specifi c research and product tests are car-ried out. The work of the various research centres is coordinated and steered from the R&D centre in Ardooie.

Gathering knowledge and putting it into practice is a permanent process of sowing and reaping. The past year can be characteri-sed as a period of sowing, in which a great deal of time and ener-gy was dedicated to developing and professionalising the R&D team, deepening knowledge of markets and products, expanding our product portfolio and perfecting a number of developments made in the past years. Sioen perfected its technical textiles for car boots and successfully launched the fi rst bulk production. We developed a high-quality technical textile with fl ame retardant characteristics. The complete airbag production process was fi ne-tuned and production is now operating at full speed. Sioen also developed and perfected technical textiles for ventilation pipes and launched large production runs, etc.

Geographical markets The key fi gures given on page 7 of this annual report show that 75% of the Coating division’s turnover is located in the traditio-nal Western European countries. France, Sioen’s most important sales territory, is the front runner with 20% of turnover. Germany and Benelux are traditionally strong counties, followed closely by the UK.

The geographical distribution refl ects the location of the fi nal producers. A number of large trailer manufacturers are based in Germany and the UK and Germany has a rich tradition of using geo-textiles, France has a large number of swimming pool cover and mattress cover makers, the largest digital printers are based in Western Europe and Pennel Automotive has a long history of contacts with French car producers.

Although the traditional Western European countries comprise the largest proportion of turnover, the Eastern European market has again become important in 2004. Technical textiles for digital printing and truck tarpaulins and side curtains in particular are fi nding their way to Eastern European customers.

Despite competition from cheaper local laminate producers (a weaker alternative to coated textiles), Sioen is continuing to grow in Asian markets. Sioen is primarily focusing on the Sign (pu-blicity banners) and Textile architecture (tents and structures) segments. Sio-line has now become a quality brand that digital printers and manufacturers can no longer ignore. In addition to this quality reputation, our knowledge of the local distribution market is playing a major role in this growth.

Our in-house experience and knowledge at all levels give us a head start over our competitors in prospecting and selling in po-tentially large sales markets. Our sales structure enables us to maintain a constant feel for the market and to respond optimally to customer needs.

27

APPA

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Market leadership through know-how and quality

Sioen is the market leader in protective clothing for industrial and leisure applications.

Protective clothing: safety and comfortA few years after the establishment of the coating line in 1960, Sioen expanded its activities with protective clothing apparel. Trousers and jackets with in-house coated technical textile were produced for industrial use. Now, many years later, Sioen is the market leader in technical protective clothing.

‘Protection through innovation’ is not outmoded here either. At Sioen we know that working in safe and comfortable circum-stances is a prerequisite, the best price/quality ratio a must and that speed, reliability and fl exibility are a self-evident requirement. Sioen’s protective clothing meets all of these demands.

Protection through innovation: R&DThe R&D team develops new materials, techniques and applica-tions. Researchers, textile engineers and designers always work closely together. Development and tests of new materials, the best specialists, perfecting the production processes, thorough market knowledge and know-how, the best performing test equipment,excellent experience and knowledge of standards and rules, etc. make Sioen a strong player in the protective clothing sector. With 45 years of experience we have in-house expertise in both de-sign and production. Our technical services carry out risk analy-ses and studies that guarantee perfectly personalised protective clothing to the highest specifi cations. Moreover, vertical integra-tion enables Sioen to respond faster and more adequately to its markets.

Protection through innovation: designA team of creative designers and textile engineers designs tech-nical protective clothing that meets the customer’s needs. The result is a comfortable and elegant garment which meets all legal regulations and technical requirements. With an eye for detail, creativity, and expert knowledge of production techniques and raw materials, fi tting, sitting comfort, etc., our designers develop functional and comfortable protective clothing to ensure a greateryield from labour.

Protection through innovation: productionEach design is produced carefully to the strictest quality standards in one of our modern production centres. Sioen Indonesia, for example, is one of the most effi cient production centres in the world. AP

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The apparel workshops in Tunisia and Indonesia and elsewhere have high-tech machines: heat presses, computer technologies, stitching and seaming machines, plotter systems, test equip-ment, etc. We are continually investing in the latest technologies to enable us to meet the highest quality standards. Sioen has the most recent ISO 9002/ EN 29001 certifi cation as well as the AQAP Certifi cate.

Quality is a constant factor at Sioen. The Apparel division makes maximum use of coated technical textiles produced by the Coa-ting division and of fabrics and liners produced in-house. Brand names such as Flexothane and Siopor are recognised worldwide and the world of industrial protective clothing and outdoor sports clothing can no longer be imagined without them.

In addition to production of its own brands, Sioen is also a valued partner for reputed ski and sportswear brands.

Sales and distributionThe sale of protective clothing is centralised at the headquarters in Ardooie, from where a team of specialist sales staff guide the sales effort. Sioen apparel also has a number of local sales offi -ces in France, Scandinavia, Indonesia, Germany and the UK from where local staff and agents serve the market.

88% of products are sold under the group’s own brand names. The fi nished products are shipped from the various production centres to a fully automated dispatch and distribution centre in Mouscron. Customers are supplied with models, colours and sizes according to their wishes. This dispatch and distribution centreguarantees rapid effi cient delivery in each case.

TurnoverThe Apparel division realised a turnover of EUR 68.2 million this year compared with EUR 71.5 million last year, refl ecting sustained commercial pressure on large-volume, low technicity markets. Sioen is focusing on products and applications with a high degree of technical complexity such as bullet and knife proof vests, fl otation suits, fi re fi ghting suits, protective clothing for the petrochemicals sector, forestry clothing, etc.

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The range: applications and sectorsSioen develops and produces a complete range of personal pro-tective clothing in which functionality, comfort, look and security are of central importance. In addition to a wide standard range Sioen also produces completely customised protective clothing in accordance with the customer’s wishes. The application areas for the standard range are as divergent as they are extensive: Sioen protective clothing is used in the petrochemicals industry, the food sector, road construction and public works, agriculture, gardening and the fi sheries sector. Sioen serves public authorities(municipal services, police, army, postal services, etc.) andprivate companies and even private individuals via specialistdistributors.

In 2004 Sioen completed development of its ILS (Interchange-able Lining System), a multi-lining concept designed to allow wearers to work comfortably in all weather conditions. The custo-mer himself selects the removable lining, jacket and bodywarmer that suits him. The lining, fl eece and bodywarmer fi t perfectly into the jacket and the sleeves are attached with push fasteners. This means the jacket can be worn for the entire year.

The Industry range: description and market situationThe Industry range accounts for 75% of the Apparel Division’s turnover. It includes protective clothing ranging from simple rain-wear to extremely technical protective clothing. The competition, which primarily comes from Asia, and the associated price pres-sure, are felt most keenly in the technically least complex pro-ducts, and with clothing that is replaced relatively quickly. In this segment Sioen is now sourcing cheaper products from outside suppliers (1.5% of turnover) and focusing its own production increasingly on products and applications with high technical complexity. A strategy was developed and a structure set up for this purpose in 2004. High tech This clothing line offers protection against rain, wind and low tem-peratures. It includes trousers, coats, anoraks and overalls that protect those working in bad weather. This range also includes S.E.P.P., the abbreviation for Sioen Extreme Product Program.This is a total package comprising a basic layer (absorbent, warm and dry), an insulating layer (comfortable, keeps the wearer warm) and a top layer (protects against all weather conditions). Although each layer can be worn separately, together they make an elegant and comfortable unit.

High visibilitySeeing and being seen is a matter of life and death in many working situations.Sioen has therefore developed a full range of high visibility clothing.It is comfortable, easy to maintain and, like all other protective clothing, complies with the legal regulations. Chemicals and electricityAnyone working with or near chemicals or electricity should have extra protection. Sioen’s high tech clothing is not only wind and waterproof, it is also fi re and chemical resistant. AgricultureFarmers and market gardeners are always at work, even in rain, storm, snow, wind, frost and hail. Sioen has designed clothing which protects them even in these extreme weather conditions. FoodHygiene is extremely important in the food industry. The Sioen ‘kleen line’ has been developed to be wind and waterproof, yet comfortable, even after being washed at a high temperature. Wor-king conditions in the fi shing industry are often more extreme. Sioen makes aprons, sleeves, coats, trousers, overalls and fl eeces specifi cally for this industry. Sioen has created a special range of high tech protective clothing under the brand name Nicewear that offers protection in extremely low temperatures, such as in deepfreeze units in the food industry or on cold continents. Sio-fi tUnderwear and T-shirts complete the Sioen range. Whether ther-mal, highly visible or fl ame-retardant, they are part of a standardpersonal protective outfi t.

Niche products range: description and market situationSioen focuses on very specifi c and extremely technical protective clothing for shipping, fi re fi ghting, the police, the army, forestry, etc. Vertical integration, an effi cient production system, a high performance R&D department and specialist product manage-ment have reinforced Sioen’s market position in these technical niches. This range now accounts for 20% of the Apparel divisi-on’s turnover (17% en 2003). The technical complexity of these products means that competition is more limited, and with in-ternational and European standards and regulations becoming increasingly stringent, demand for these products is continuing to rise.

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Mullion: protection on and near waterThe Mullion range protects everyone participating in sports or working on or around water. Its fl otation jackets, coats, trousers, suits, life jackets, etc. are technically perfect articles made bySioen. Sip Protection: forestryIn forestry some parts of the body must have extra protection. Sioen has developed a clothing line that protects against rain and low temperatures, as well as against the impact of a chainsaw.Sioen also offers special eye, head, foot and hand protection gear. Vidal Protection / Sio-fi re: fi re fi ghtingFire-fi ghters deserve the best available protection. This is the starting point adopted by Sioen, which has developed a special range of specifi c fi re fi ghting clothing for them under the brand name Vidal Protection/Sio-fi re. SAT: bullet and knife proof vestsSAT, Sioen Armour Technology, offers high-technology, quality bullet and knife-proof vests. We produce customised protective vests in accordance with the users’ exact requirements. The dis-creet, tactical and semi-tactical vest models meet the strictest protection standards. SAT also goes a step further in complete protection and has developed a multi-layer system with under-wear, rainwear and bullet proof vests.

Active outerwear: description and market situationBaleno is the brand name for fashionable, comfortable and func-tional outdoor sports and recreational wear, including specifi c protective clothing for hunters, anglers, horse riders, motorcy-clists, cyclists, hikers and golfers. Baleno is also functional and elegant everyday wear. Baleno has as well a collection of pro-motional clothing, suitable for hostesses, employees, stewards, or as business gifts.

Geographical markets The geographical distribution of sales remained unchanged, with the majority of sales to traditional Western European markets where strict standards for professional protective clothing apply. The Apparel division’s largest sales market is France, which ac-counts for 31.6% of turnover. In Benelux, Sioen’s home mar-ket, turnover is continuing to rise. Benelux contributes 23.3% to turnover. The UK and Germany account for 16.2% and 7.8% of turnover respectively. You can fi nd the complete country distribu-tion on page 7 of this annual report.

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Customer loyalty through specialisation, service and fl exibility

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The Processing Division specialises in processing coatedfabrics and PVC foil and in the production of fi lters forindustrial applications.

The Processing division becomesIndustrial ApplicationsActivities have been reorganised to a certain extent in the context of the new IFRS standards: production of pigment pastes and granules will form an integral part of the Coating division, which means that vertical integration in this division will be complete.As of 2005, the Processing division becomes the ‘Industrial Ap-plications’ division where heavy manufacturing holds a central position.The processing division continues to surge ahead, with turnover of EUR 71.4 million in 2004 compared with EUR 49.6 million in 2003 (after reclassifi cation of EMB). The main contributors to this strong 44% growth (of which 18% external growth of 3 months Roltrans Group) are Coatex, which specializes in cutting and processing technical textiles, Sioen-Nordifa, a producer offi lters and fi lter cloths, and the Roltrans group where the resultsof the recent restructuring are clearly visible. In addition tomarkets in Western Europe and Australia, Eastern Europeancountries are signifi cant growth areas for the Processing Division.

Processing: an example of vertical integration anddiversifi cationThe processing companies in the Processing division each have their speciality and form the fi nal link in Sioen Industries’ vertical integration. These companies process technical textiles produced in-house and other materials into fi nished products. The markets in which they operate are as extensive as they are divergent: the automotive industry, the leisure sector, the food industry, heavy industry and chemicals, transport, construction, etc.

KadorsCoatex in Poperinge processes the coated technical textileproduced in Coating division companies. The company hasdeveloped a global reputation in kadors and offers both a standard range and customised solutions. A kador is the tent canvas component that slips into a metal profi le.In 2004 Coatex supplied the kadors for the prestigious ‘The Gates’ project in New York’s Central Park created by the artists Christo and Jeanne-Claude (see photo).Worldwide there are only a few producers of such kadors, made of a fl exible PVC tube with a technically coated textile around it. Coatex is one of the biggest producers in the world and has extremely modern machinery.

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Sio-steelSio-steel is a patented composite made of a PVC coated steel net and a double-sided PVC coated polyester fabric. The steel, strengthened with carbon, offers very good protection without affecting the fl exibility of the cloth. Sio-steel is therefore perfect for curtains and tarpaulins for trucks and open containers. The steel net is welded onto the cloth and makes sure that possible damage is restricted to max. 10 x 10 cm. Besides offering protec-tion against theft and vandalism, Sio-steel has another important advantage: trucks are not immobilized and therefore achieve hi-gher effi ciency. Printing (digital, painting, screen print, adhesive letters, etc.) is still possible.

Sio-steel is unique and is being exploited more and more fre-quently. In France and elsewhere, insurers are already offering discounts on trucks fi tted with Sio-steel.

Cutting and punchingWith its expertise in cutting and punching all types of materials,the Coatex plant at Poperinge supplies tailored cutting fortechnical textiles coated by the Coating division. Coatex also cuts car interior and other materials.

Laser cuttingAirbags are one of the items cut on the 4 high tech laser cutters. This array of machinery is unique and offers one of the best per-formances anywhere in the world. Several layers are cut at once, enabling large quantities to be handled very quickly.

In 2004 Coatex became a ‘system supplier’ in airbag cutting for a major producer in the automotive sector. This means that Coatex looks after purchasing the raw material (airbag cloth), managing the inventory and cutting the material.

Pond and dam foilsCoatex cuts, welds and packs pond and water tank foils forcustomers worldwide. Coatex PVC foils are exploited in theindustrial and recreation sectors to produce, among other things, recreational ponds and industrial basins, agricultural fl oors and dam foils.

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Filters and fi lter cloths Nordifa specialises in the total production of fi lters and fi lter cloths. Its Lainyl®, Clartex® and Nordifa® brands enjoy an excellentinternational reputation. Applications exist in the foodindustry (water and air treatment in sugar refi neries, breweries, etc.), heavy industry (metallurgy, coke industry, mining, power stations, paper processing, cement, etc.), chemicals (dye produc-tion), urban water purifi cation and post-combustion installations.

Tents, covering systems, sliding gates, wagon covers and silosAt Saint Frères Confection the in-house coated textile is proces-sed into fi nished products for high technological niches such as the armed forces, the railways, the aeronautics industry and con-struction.

Camoufl age clothBacam specialises in the design, production and marketing of camoufl age cloth and multi-spectral camoufl age nets.

This high-tech market demands signifi cant technical expertise plus research and development. Only a few companies operate in this segment worldwide.

Side curtains and tarpaulinsRoland International (This is the main and holding company of the Roltrans Group. Both Roland International and Roltrans are brandnames) has been a member of the group since March 2003 and is the market leader for the production of curtains and tarpaulins for trucks and containers. Roland International uses the technical textiles from the Coating Division for this purpose.

Roland International is the European market leader with some 45% of the market for tarpaulins and side curtains for newtrailers. The company focuses on large volume series production.

Corporate governance

39

The Sioen family has surrounded itself with external, independent directors since 1986. Their expertise and experience contribute to the proper and effective management of thecompany.

On March 22, 2005 the Board of Directors adopted a Corporate Governance Charter incompliance with the Belgian Corporate Governance Code. This charter, which comes into effect as from the 2005 General Meeting of Shareholders, can be consulted on the Sioen Industries website (www.sioen.com).

The present chapter on Corporate Governance relates to the 2004 fi nancial year, when the Corporate Governance Charter was not yet in effect. Where possible, however, the information is communicated in the manner prescribed by the Belgian Corporate Governance Code.

Composition of the Board of Directors (situation on May 1, 2005)*The directors’ terms of offi ce expire at the 2008 general shareholders’ meeting.

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

MJS Consulting b.v.b.a.,represented by its business manager, Ms M. Sioen(1)

a director of various other companies

Ms J.N. Sioen-Zoete(1), a director of various other companies

D-Lance b.v.b.a.,represented by its manager, Ms D. Parein-Sioen(1)

a director of various other companiesP. Company b.v.b.a.,represented by its manager, Ms P. Sioen(1)

a director of various other companiesP. Bamelis n.v.,represented by its managing director, Mr P. Bamelis(2) (3)

Chairman of the Board of Directors of Agfa-Gevaert n.v.; director ofvarious other companiesRevam b.v.b.a.,represented by its manager, Mr W. Vandepoel(2)

Managing Director of Lessius Corporate Finance n.v.; director of various other companiesSheng n.v.,represented by its managing director, Mr L.H. Verbeke(2)

Lawyer-partner in Allen & Overy; chairman/director of various other companiesK.E.M.P. n.v.represented by its Chairman, Mr Luc Sterckx(2) (3)

director of various other companiesVean n.v.,represented by its Managing Director, Mr L. Vansteenkiste(2) (3)

Managing Director of Recticel n.v.; director of various other companies

Mr G. AsselmanCFO Sioen Industries group

Deloitte & Partners Auditors c.v.b.a.represented by Mr G. Verstraeten and Mr G. Wygaerts

(1) Executive director and representative of the main shareholder, Sihold n.v.(2) Non-executive.(3) Independent director in the meaning 2of Article 524 of the Companies Code.(4) The Statutory auditor’s term of offi ce expires at the general shareholders’ meeting in 2005.

CHAIRMAN

MANAGING DIRECTOR

DIRECTORS

SECRETARY

(4)STATUTORY AUDITOR

* On March 22, 2005 Mr J.J. Sioen and Ms J.N. Sioen-Zoete resigned from their position as Managing Director of Sioen Industries nv. Revam bvba and Sheng nv, represented by Mr W. Vandepoel and Mr L.H. Verbeke respectively, informed the company that they no longer wished to sit as independent directors, even through, strictly speaking, they fulfi lled theindependence criteria of Art. 524 of the Companies Code.

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Operation of the board of directorsIn accordance with the articles of association, the Board of Direc-tors meets regularly as and when the needs and interests of the company require. The board met fi ve times in 2004.

The agenda of each board meeting includes deliberation and decisions relating to individual company, division and consolida-ted results, ongoing capital expenditure and projects, new pro-jects and a presentation of investment opportunities. The board also deals with specifi c agenda items concerning concrete issues and current events. Preparatory to this, the Board of Directors receives extensive reports to a set pattern. The fi nancial reporting, for example, consists traditionally of 4 chapters. The fi rst chapter contains the consolidated group results, written explanations of variations, a turnover consolidation matrix, identifi cation of the variations in major items with the key group enterprises and the use of capital within the group. The second chapter contains si-milar reports, but based on comparative consolidation scopes. Chapter three also contains similar reports, but at the level of the lowest logical business unit. The fi nal chapter contains the balan-ce sheet, a cashfl ow statement and creditworthiness ratios. Apart from the statutory rule that, in the event of a tie, the chairman has a casting vote, there are no other special or statutory rules rela-ting to decision-making within the Board of Directors. The Board of Directors has decided that no special organization need to be set up given the uniting of the Chairman and Managing Director functions in a single person. With respect to way transactions come about between the company and the dominant sharehol-der, provision was made in 2004 that, following notifi cation by the reference shareholder to the Board of Directors, each director is free to exercise an individual control, or commission someone to do this on his behalf. The company auditor can also be asked to audit said transactions.

Operational committees The Sioen Industries group has three working committees: Audit Committee:In 2004 the Audit Committee comprised three non-executive, independent directors (Messrs Verbeke, Vandepoel and Bame-lis) and one executive director (Mr Sioen). Mr Vandepoel was appointed as chairman. To fulfi l the new composition criteria stipulated by the Corporate Governance Charter, Mr Sioen was succeeded by Mr Sterckx on March 22, 2005. The audit commit-tee met four times in 2004. In addition to ordinary work, special attention was paid to the transition to IFRS standards. The Audit Committee met twice with the statutory auditors in 2004 in the absence of senior management.

Remuneration Committee: In 2004 the Remuneration Committee comprised two non-exe-cutive, independent directors (Messrs Verbeke and Vansteenkiste)and one executive director (Ms JN Sioen-Zoete). To fulfi l the new composition criteria set out in the Corporate Governance Charter Messrs Bamelis, Sterckx and Vansteenkiste were appointed as members of the Remuneration Committee on March 22, 2005.The Remuneration Committee advises the Board of Directors on remuneration policy in general and in particular on compensation for members of the Board of Directors and Management Com-mittee. The share option plans also come under its competence. The Remuneration Committee did not meet in 2004

Appointments CommitteeAn Appointments Committee was set up on March 22, 2005 in compliance with the Sioen Industries Corporate Governance Charter. The Appointments Committee is made up of two inde-pendent directors (Messrs Bamelis and Vansteenkiste) and an executive director (Mr Jean-Jacques Sioen). Management CommitteeOn March 22, 2005 it was decided to set up a Management Committee within the meaning of the law of August 2, 2002. Ms Michèle Sioen was requested to set up this Management Com-mittee and to lead it in accordance with the company’s evolving needs and structure.

Remuneration of directorsThe total payments made to all members of the Board ofDirectors amount to EUR 1,972,195.19, including a global remu-neration of EUR 102,500 to the non-executive directors. In each case this was fi xed remuneration.No shares, share options or other rights to obtain shares were allotted in 2004. There are no specifi c recruitment or golden handshake agreements with board members. Directors together own a total of 189.212 shares (The shares held by Sihold ex-cluded).

External auditExternal audits of Sioen Industries group companies are carried out mainly by Deloitte & Partners Auditors.These include the audit of the statutory balance sheets and of the consolidated balance sheet of Sioen Industries n.v. and its subsidiaries.A certain number of subsidiaries are audited by other company auditors. Deloitte & Partners Auditors accepts their work as men-tioned in the statutory auditor’s report. In the past fi nancial year

the cost of services rendered on group basis by the statutory auditor amounted to EUR 290,990. In addition, the statutory au-ditor has invoiced 131.710 EUR and 110.170 EUR for rendered services related to his auditing function (preparatory work for the transition to IFRS). Services (fi scal advice) rendered by persons with whom the statutory auditor has a professional cooperation relationship were invoced for an amount of 6.618 EUR.

Deloitte & Partners Auditors’ mandate as Sioen Industries n.v.’s statutory auditor expires at the 2005 annual shareholders’ mee-ting. Deloitte & Partners Auditors is represented by Messrs G. Verstraeten and G. Wygaerts. Share option plansOn the occasion of the company’s stock market fl otation in Oc-tober 1996, Sioen Industries’ Board of Directors created a 1996 share option plan for the benefi t of its senior executives, directors and consultants with a long-term partnership agreement. The aim was to promote dedication and motivation in the long term and enhance and strengthen the group’s profi tability. However,

no options were allocated to directors at that time under the various option plans (see table).Under this share option plan, the Board made a total of 200,000 options available. Each option entitles its holder to acquire one Sioen Industries n.v. share at an exercise price equal to the share price on the stock exchange at the time of granting of the op-tion. On June 30, 1999 and October 10, 2000, the Board of Sioen Industries decided in accordance with the new legislative provisi-ons in this regard to establish new share option plans using the options remaining under the 1996 plan.The price for an option under the 1999 and 2000 share option plans was fi xed at 7.5% of the average market price of the Sioen Industries n.v. share for the 30 days prior to the date of the offer. The option is deemed to have been allocated on the 60th day following the date of the offer, unless the benefi ciary has before this date given written notice of refusal of the offer. On May 26, 2003, the Board of Directors of Sioen Industries deci-ded to propose an extension of the exercise period for the 1999 and 2000 share option plans to all benefi ciaries in accordance

OVERVIEW OF THE SHARE OPTION PLANSBasic information 1999 Plan 2000 Plan TotalDate of Board decision 30/06/1999 10/10/2000Option price as % of the option price 7,5% 7,5%Option price 2,5000 1,5375Option exercise price 33,3200 20,3550Available at the time of the 1996 fl otation 200.000Allocation 6.050 6.500 12.550Unused (3.200) (3.200)Total used under option plans 2.850 6.500 9.350Balance available 158.000Exercise of optionsBalance available 2.850 6.500 9.350Balance to be exercised 2.850 6.500 9.350Options exercised in 1999 – average buy-in price Options exercised in 2000 - average buy-in price Future exercise Balance available 2.850 6.500 9.350Exercise January 2004-2007 (2.850) (3.250) (6.100)Exercise January 2005-2008 0 (3.250) (3.250)(1) After the 1 to 10 share split on 05/11/98

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with Article 407 of the law of 24 December 2002. The majority of benefi ciaries accepted this offer. The initial exercise periods of all options were consequently extended by three years.

Protocol to prevent insider tradingIn order to prevent privileged information from being used un-lawfully by directors, shareholders and members of the manage-ment and staff (insiders), or even to avoid such an impression being created, the board of directors of Sioen Industries has pro-duced a protocol to prevent insider trading (“1997 Protocol”).A new Protocol was approved by the Board of Directors on March 22, 2005 in accordance with Directive 2003/6/EU. The Protocol is primarily designed to protect the market, to ensure compli-ance with the law and to uphold the group’s reputation. Besides a number of prohibitions concerning trading in Sioen Industries fi nancial instruments when insiders have privileged information which is not (yet) available to the public, the Protocol also con-tains a set of preventive measures and guidelines to safeguard the confi dentiality of privileged information. Every insider who qualifi es has signed this Protocol or will soon be requested to do so. A Compliance Offi cer has been appointed to ensure compli-ance with the Protocol.

Confl ict of interests in the board of directorsOn May 28, 2004 the Board of Directors applied Articles 523 and 524 of the Companies Code. Although the relevant minutes plus a clarifi cation were published immediately on the Sioen In-dustries website, the legal provisions state that they must also be included in the next annual report.

Minutes of the meeting of independent directors Meeting and compositionThe present committee met at Ardooie on 28 May 2004 at 8.15 a.m. It was composed as follows, pursuant to the Board of Directors’ decision of 28 May 2004:- Vean N.V., represented by its permanent representative Luc

Vansteenkiste,- K.E.M.P. N.V., represented by its permanent representative Luc

Sterckx, and- Revam B.V.B.A., represented by its permanent representative

Wilfried Vandepoel,each appointed as an independent director of the Company within the meaning of article 524 of the Companies Act.

Task of the committee Pursuant to article 524, §2 of the Companies Act decisions or transactions referred to in article 524, § 1 of the Companies Act are required be subjected to the assessment of a committee of independent directors, assisted by an independent expert. The committee should describe the nature of the decision or trans-action, and assess the business benefi ts or disadvantages of the same for its shareholders. It should estimate the consequences for the company’s equity position and establish whether or not the decision is such as to cause prejudice to the company in a manner which is evidently unlawful in the light of the policy pursued by the company.

Independent expertThe committee decided to appoint Professor Erik De Lembre as an independent expert (the “Expert”) to assist them in carrying out their task in accordance with article 524 of the Companies Act.

The committee was of the opinion that the Expert possesses the necessary independence vis-à-vis both the Company and the transactions to be examined.

The Expert’s remuneration was established in mutual consulta-tion with him. This remuneration will be paid by the company.

Transactions to be assessed The following decisions needed to be assessed by the commit-tee:- ratifi cation by the Board of Directors of the loans, guarantees

and, in general, all commercial relationships between the Company and its subsidiaries on the one hand and Roltrans Group BV and its subsidiaries (the “Roltrans Group”) on the other, between December 1999 and 5 March 2003 (the “Agreements”).

- ratifi cation of the Company’s take-over of the shares of Monal SA on 5 March 2003 (the Take-over”).

The committee obtained the following information on these transactions from Mr J.J. Sioen:

Introduction – General overview of the factsRoltrans Groupe Europe BV (together with its subsidiaries “Rol-trans” or the “Roltrans group”) had been a client of the Sioen group’s coating division since the early 1990s.In mid-1999 Sioen Industries NV examined taking over theRoltrans group. Finally Sioen Industries NV decided against

the take-over for commercial reasons: integrating the Roltrans group at that point in time would have inevitably led to the Sioen group losing other major clients/competitors of Roltrans, in a volume market which was (and remains) essential for the developing of the Sioen group’s coating division.Because Roltrans was facing short-term liquidity problems and because it would have been to the Sioen group’s disadvantage for one of its clients to lose its market position, Mr Sioen himself acquired Roltrans at the end of 1999, and provided fi nancial sup-port (via the company Monal SA). Sioen Industries NV’s board of directors and those of its subsidiaries were not informed that Monal SA had become the owner of the Roltrans group.

Between 1999 and 2003 Roltrans remained a major client of the Sioen group. This took place at market conditions. Roltrans did enjoy certain credit facilities from the Sioen group (see 1.2 - chronology and documents - below for a full overview).

By the end of 2002 the Sioen group had built up a strong mar-ket position on the market for industrially manufactured tilts and side curtains. By the end of the 2002 the commercial reasons blocking the take-over of Roltrans in 1999 had disappeared. Also major opportunities remained at the Roltrans group for im-proving management and increasing profi tability, and the Sioen group had the resources and manpower to take advantage of the opportunity (unlike Mr Sioen who, for the above-mentioned commercial reasons, had never been able to occupy himself with the management of the Roltrans group).

As you are aware, Sioen Industries NV issued a guarantee at the end of 2002 in favour of the Roltrans group and acquired the Roltrans group in early 2003 for EUR 1. At the same time debt receivables of the shareholders against Roltrans’ holding com-pany Monal SA, in an amount of EUR 3,311,418 were forgiven. Since the acquisition by Sioen Industries NV, Roltrans has been totally restructured.

Chronology and documents

Until 1999 inclusive:- coming into being of a receivable (in the form a supplier credit)

to Sioen Industries NV and certain of its subsidiaries (“Sioen”) from Roltrans in an amount of EUR 3.6 million.

1999:- consideration is given to Sioen Industries NV’s taking over Rol-

trans (vertical integration): signing in September 1999 of a Memorandum of Understanding (MOU) between Sioen Indu-stries NV and Mr Paul Peeters;

- for commercial reasons (loss of clients / competitors of Rol-trans) the MOU is not executed;

- on 3 November 1999 Monal SA (a Luxembourg holding com-pany indirectly controlled by Mr Sioen) signs an agreement with Mr Paul Peeters to acquire 75% of the shares of Paul Peeters Holding (Europe) BV (“PPH”, the holder of all Roltrans shares) for NLG 1. Monal makes a loan of NLG 10 million to Roltrans);

- the boards of directors of Sioen Industries NV and its subsidia-ries are not informed of Monal SA’s take-over of Roltrans;

- on 20 December 1999 ABN Amro Bank (Brussels) makes a EUR 22,008,340 million (NLG 48,500,000) facility available to Sioen Industries NV and Sioen NV for use as a so-called

Ausfallbürgschaft (defi ciency guarantee) in favour of ABN Amro Bank (Maastricht) to secure the credit granted by the latter to the Roltrans group;

- the boards of directors of neither Sioen Industries NV or Sioen NV are informed of this guarantee;

- 24 December 1999: transfer to Monal SA of Paul Peeters’ 75% of the Roltrans shares. The remaining 25% are acquired by private agreement in 2001;

- Loans from Sioen Industries NV to the Roltrans group.

2000 – 2002:- Roltrans continues to be a major client of the coating division;

the supplier credit (partly converted into loan agreements) in-creases to EUR 16 million;

- the boards of directors of Sioen Industries NV and of the sub-sidiaries who are Roltrans’ direct contract parties are not infor-med of the shareholding in Roltrans;

- 23 December 2002: ABN Amro grants a new EUR 20,873,889 credit facility to Sioen Industries NV and Sioen NV in the form of a guarantee to secure credits to Roltrans.

2003- 15 January 2003: Sioen Industries NV lends Roltrans EUR

3,800,000.- January – March 2003: various short-term loans between

Sioen Industries NV and Roltrans for approx. EUR 5,500,000.- 5 March 2003: Sioen Industries NV takes over 100% of Monal

SA;

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- the acquisition of Monal SA (and hence of the Roltrans group) by Sioen Industries NV is unanimously ratifi ed by SioenIndustries NV’s board of directors on 24 March 2003, without

however applying article 523 and/or 524 of the Companies Act (the board of directors was not informed of the sharehol-ding in Roltrans).

The Sioen Industries NV and Sioen NV boards of directors were not advised in a timely fashion of the possible confl icts of in-terest arising from (i) the granting of credit facilities by Sioen Industries NV and its subsidiaries to Monal SA/Roltrans between 1999 and 2003 and (ii) the take-over of Monal SA by Sioen Industries NV.

Opinion The committee studied the transactions to be assessed in con-sultation with the Expert, and issued an opinion to the board of directors in accordance with article 524, §2 of the Companies Act. A copy of this opinion is attached to the present minutes.

Ardooie, 28 May 2004.

Opinion of the committee of independent directors inaccordance with article 524 of the Companies’ Act.Pursuant to article 524, §2 of the Companies Act the committee of independent directors, assisted by an independent expert, is required to publish an opinion to the Board of Directors setting out, inter alia, the nature of the transactions to be assessed, as-sessing the business benefi t or disadvantage of the same for the Company and its shareholders and estimating its consequences for the company’s equity position. The committee must also es-tablish whether or not the transactions are such as to cause prejudice to the Company in a manner that is evidently unlawful in the light of the policy pursued by the Company.

Nature of the transactions The following transactions were presented to the committee for assessment:- the ratifi cation by the Board of Directors of the loans, gua-

rantees and, in general, all commercial relationships between the Company and its subsidiaries on the one hand and Rol-trans Group BV and its subsidiaries (the “Roltrans Group”) on the other, between December 1999 and 5 March 2003 (the “Agreements”).

- the ratifi cation of the Company’s take-over of the shares of Monal SA on 5 March 2003 (the “Take-over”).

Both transactions fall within the application of article 524 of the Companies Act, as Roltrans Group and Sioen Industries NV had, during the above-mentioned period, a common reference shareholder and were therefore affi liated within the meaning of Article 524, §1.1. of the Companies Act. Consequences on the equity position

AgreementsThe consequences of the Agreements on equity can be descri-bed as follows:

- Between 1999 and 2003 supplier credit and loans were gran-ted by the Company and its subsidiaries to Roltrans in amounts of:Year Average supplier credit and loans (in EUR)1999 5,453,022.002000 3,489,325.172001 5,475,581.932002 11,632,251.99Q1 2003 25,708,386.97

Total interest income on the loans between 1999 and 2003 amounted to around EUR 580,000.As customary, no interest was applied to the supplier credit.- No costs were imputed to the Company and its subsidiaries

for the guarantees amounting to EUR 22 million issued by the Company and its subsidiaries in favour of the Roltrans group.

- Commercial relationships: between 1999 and 2003 turnover with Roltrans was:

Year Turnover (in EUR)1999 9,241,7132000 9,483,3642001 10,144,9052002 10,967,349Q1 2003 2,784,319

This turnover was effected at comparable margins to those ap-plicable to the Sioen group’s other clients in the market segment in which the Roltrans group operates.

AcquisitionThe take-over price for (a) all shares of Monal SA and (b) the shareholders’ receivables on Monal SA amounting to EUR 3,406,894 amounted to EUR 1.

At the time of the takeover, goodwill of EUR 20 million was re-cognised at the consolidated level, EUR 5.6 million of it via the land and buildings accounts. This is supported by the business plan drawn up by management in the context of the take-over and ratifi ed by the Company’s Board of Directors.

Business benefi t or disadvantage to the company and the shareholders

AgreementsBenefi t for the Company and the shareholders: The benefi t of the Agreements lies in their enabling the Company to speed up its growth and professionalization, via the Roltrans custo-mer relationship, in a market segment of strategic importance to the Company. This has also enabled the Company to develop its product into the undisputed market standard for truck tilts and side curtains. The above factors have together enabled the Company to further develop a substantial market for one of its key products.Disadvantage for the Company and its shareholders: The disad-vantage of the Agreements (and more specifi cally the loans and guarantees in favour of the Roltrans group) lay in their tempora-rily raising the Company’s risk profi le.

Take-overBenefi t for the Company and the shareholders: The benefi t of the Take-over lay in the unique opportunity to achieve one of the Company’s key strategic objectives of vertical integration in thegroup’s key markets without signifi cant additional investments (the take-over price was EUR 1). The Take-over also enabled the Company to acquire control of and vertically integrate the Roltrans group, permitting it to further improve the positioning of its products. Signifi cant synergies could also be achieved at various levels. Company management had already in the past demonstrated its ability to achieve successful turnaroundsthrough in-depth restructuring.Disadvantage for the Company and the shareholders: The dis-advantage of the Take-over can be sought in the taking over of a company having a negative equity (as expressed in the consolidation goodwill of around EUR 15 million).

Conclusion Taking into account the analysis of the benefi ts and disadvanta-ges and the consequences on its equity position for the Com-pany of:- the loans, guarantees and in general all commercial relation-

ships between the company and its subsidiaries on the one hand and the Roltrans group and its subsidiaries on the other

between December 1999 and 5 March 2003 (the “Agree-ments”);

- the Company’s take-over of the shares of Monal SA on 5 March 2003 (the “Take-over”),

the committee of independent directors and the independent expert are of the opinion that the ratifi cation by the Company’s Board of Directors of the Agreements and the Take-over does not represent any evident unlawful prejudice for the company, nor does it disadvantage the Company, and recommend ratifi cation of the Agreements and the Take-over. Ardooie, 28 May 2004.

Minutes of the 28 May 2004 meeting of the Board of Directors The Board of Directors met on 28 May 2004 at the Company’s registered offi ce.The meeting opened at 13.00 with Mr J.J. Sioen in the chair.Given the participation of all Board Members in the meeting, there was no need to justify the convening of the meeting, and the Board of Directors was able to deliberate legally.

Mr G. ASSELMAN was appointed as secretary to the Board of Directors.The meeting had a single agenda item:Ratifi cation of the loans, guarantees and, in general, all com-mercial relationships between the Company and its subsidiaries on the one hand and Roltrans Group BV and its subsidiaries on the other, between December 1999 and 5 March 2003, and of the Company’s take-over of the shares of Monal SA on 5 March 2003.

Notifi cation of confl ict of interests in the meaning ofarticle 523 of the Companies Act.Before discussion of this agenda item, the following directors announced that they had a potential confl ict of interests of a proprietary nature within the meaning of article 523 of theBelgian Companies’ Act:- Mr J.J. SIOEN;- Mrs J.N. Sioen-Zoete;- M.J.S. CONSULTING b.v.b.a., represented by

Mrs M. SIOEN;- D-LANCE b.v.b.a., represented by Mrs D. PAREIN-SIOEN; and- P.COMPANY b.v.b.a., represented by Mrs P. SIOEN.

The above directors explained that their confl ict of interest resul-ted from the fact that, directly or indirectly, (i) they have rights to certifi cates of Midapa, a “Stichting Administratiekantoor” (admi-nistration offi ce foundation) under Dutch-law or (ii) they control Midapa. Midapa controls both the Company and the limited liability company Monal NV, which in turn controlled Roltrans Group BV until March 2003.The directors in question informed the Board of Directors that in their opinion the transactions to be ratifi ed are in the Company’s interest, as they contribute to the development of an activity that is of strategic importance for the company.The Board of Directors noted the above directors’ statement and established that they left the meeting for the discussion of this single agenda item.

Application of Article 524 of the Companies ActGiven that the ratifi cation of the Agreements and the Acquisi-tion relate to the Company’s relations with an affi liated com-pany within the meaning of article 524, §1.1 of the Companies Act, this matter was presented to a committee of independentauditors, consisting of Vean N.V., represented by its permanent representative Luc Vansteenkiste, Revam B.V.B.A., represented by its permanent representative Wilfried Vandepoel, and K.E.M.P. N.V., represented by its permanent representative Luc Sterckx, assisted by an independent expert in the person of Professor Erik De Lembre.

The Board of Directors noted the opinion of the committee of independent auditors.

The Board of Directors established that the procedure prescri-bed in article 524, §2 of the Companies’ Act has been complied with.

Application of Article 523 of the Companies Act.In accordance with article 523 of the Companies Act, the Board of Directors described the nature of the transactions in question as follows:- ratifi cation of loans, guarantees and, in general, all commercial

relationships between the Company and its subsidiaries on the one hand and Roltrans Group BV and its subsidiaries (the

“Roltrans Group”) on the other, between December 1999 and 5 March 2003 (the “Agreements”), and

- ratifi cation of the Company’s take-over of Monal SA’s shares in Roltrans Group BV on 5 March 2003 (the Take-over”).

The Board of Directors established that the Take-over had al-ready been approved by the Board of Directors on 24 March 2003, however without application of the formalities prescribed in articles 523 and 524 of the Companies Act.In accordance with article 523 of the Companies Act, the Board of Directors described theproprietary consequences of the transactions as follows:- Between 1999 and 2003 supplier credit and loans were gran-

ted in amounts of:

Year Average supplier credit and loans (in EUR)

1999 5,453,0222000 3,489,325.172001 5,475,581.932002 11,632,251.99Q1 2003 25,708,386.97Total interest income on the loans between 1999 and 2003 amounted to around EUR 580,000.

- In 1999 the Company issued a guarantee in favour of Roltrans Group in an amount of EUR 22,608,340. The guarantee was never called and has since expired. At the end of 2002 a new

guarantee for EUR 20,873,889 was issued to Roltrans Group. This guarantee has remained uncalled until today and has since been reduced to EUR 16,500,000. No costs have been imputed to the Company and its subsidiaries for the guaran-tees issued by the Company and its subsidiaries in favour of the Roltrans group.

- Commercial relationships: between 1999 and 2003 turnover with Roltrans was:

Year Turnover (in EUR)

1999 9,241,7132000 9,483,3642001 10,144,9052002 10,967,349Q1 2003 2,784,319

47

- This turnover was effected at comparable margins to that ap-plicable to the Sioen group’s other clients in the market seg-ment in which the Roltrans group operates.

- The take-over price for (a) in shares of Monal SA and (b) the shareholders’ receivables totalling EUR 3,406,894 against Monal SA , amounted to EUR 1.

- Goodwill of EUR 15,524,595 was recorded on the take-over. This is supported by the business plan drawn up by manage-ment in the context of the take-over and ratifi ed by the Com-pany’s Board of Directors. In accordance with article 523 of the Companies Act, the Board of Directors justifi es the ratifi cation of the Agreement and the Take-over as follows:

- The Board of Directors believes that the Agreements have con-tributed, via the Roltrans customer relationship, to enabling the Company to speed up its growth and professionalization in a market segment of strategic importance to the Company. This has enabled the Company to develop its product into the undisputed market standard for truck tilts and side curtains. The above factors have together resulted for the Company in the creation of an extensive sales market for one of its core products.

- The Board of Directors further believes that the Take-over re-presented an opportunity to fulfi l one of the Company’s stra-tegic objectives, i.e. vertical integration in one of the group’s key markets, without additional direct investments. The Take-over allowed the Company to acquire control of and vertically integrate the Roltrans group, enabling it to further improve the positioning of its products. Synergies could be achieved at various levels.

ConclusionThe conclusion of the opinion of the committee of independent directors reads as follows:

“Taking into account the analysis of the benefi ts and disadvanta-ges and the consequences on itsequity position for the Company of:

- the loans, guarantees and in general all commercial relation-ships between the company and its subsidiaries on the one hand and the Roltrans group and its subsidiaries on the other

between December 1999 and 5 March 2003 (the “Agree-ments”);

- the Company’s take-over of the shares of Monal SA on 5 March 2003 (the “Take-over”),

the committee of independent directors and the independent expert are of the opinion that the ratifi cation by the Company’sBoard of Directors of the Agreements and the Take-over does notrepresent any evident unlawful prejudice for the company,nor does it disadvantage the Company, and recommendratifi cation of the Agreement and the Take-over.”After deliberation the Board of Directors decided to accept the opinion of the board of independent auditors. The Board ofDirectors unanimously ratifi ed the Agreements and theTakeover.

PublicationThe Board of Directors tasked the statutory auditor, in accor-dance with Article 524, § 3 of the Companies Act to issue an opinion as to the faithfulness of the data given in the opinion of the committee of independent auditors and in the presentminutes of the Board of Directors. The statutory auditor’sopinion shall remain attached to these minutes.

The Company will also inform the statutory auditor of the con-fl ict of interests in accordance with Article 523 of the Compa-nies’ Act.The content of these minutes shall be included in their entirety in the annual report, in accordance with articles 95 and 523 of the Companies Act. The committee’s conclusion, an extract of the present minutes and the statutory auditors’ opinion shall be included in the Company’s annual report in accordance with article 524, § 3 of the Companies Act.

All items on the agenda having been dealt with, the chairman closed the meeting at 13.30.

Statutory auditor’s reportIn compliance with the provisions of Article 524§3 of the Com-panies Code we examined the following documents dated 28 May 2004:

- the minutes of the committee of independent directors mee-ting of 28 May 2004,

- the advice from the committee of independent directors to the Board of Directors in compliance with Article 524§2 of the Companies Code,

- the minutes of the Board of Directors meeting on 28 May 2004 in compliance with Article 523§3 of the Companies Code.

The following decisions were presented for assessment and ra-tifi ed in the above minutes and advice:

- ratifi cation by the Board of Directors of the loans, guarantees and in general all commercial relations between Sioen In-dustries NV and its subsidiaries (the ‘Company’) on the one hand and Roltrans Group BV and its subsidiaries (the ‘Roltrans Group’) on the other between December 1999 and 5 March 2003 (the ‘Agreements’),

- ratifi cation of the takeover by the Company of the Monal SA shares on 5 March 2003 (the ‘Takeover’).

In the context of Article 524§3 the statutory auditor must issue an evaluation of the faithfulness of the data stated in the com-mittee’s advice and in the minutes of the Board of Directors meeting. This evaluation must then be appended to the minutes of the Board of Directors meeting.

We have examined the faithfulness of the information provided in the abovementioned documents as follows:

- We were able to match the amounts stated by the company (average supplier credit, turnover, consolidation goodwill and outstanding balances relative to the Roltrans Group) with the company’s accounts.

- We have read the data stated in the advice and examined whether they reveal any inconsistencies with the data we iden-tifi ed during our audit of the past fi nancial year ending on 31 December 2003.

On the basis of the above-mentioned work we did not learn of any items that would lead us to decide that the data included in the Board of Directors advice is not faithful.We also wish to refer shareholders to our complementary report dated 28 May 2004 on the Sioen Industries NV unconsolida-ted and consolidated annual accounts for the year ending 31 December 2003 as well as the background information on the transactions between Sioen Industries and the Roltrans Group as listed on the company website under the heading ‘fi nancial info downloads’.The present report was compiled for use by the Company’s Shareholders and the Board of Directors in the context of apply-ing Article 524 of the Companies Code. It therefore cannot be used for any other purpose.

28 September 2004The Statutory Auditor

49

BACKGROUND INFORMATION TO THE TRANSACTIONS BETWEEN SIOEN INDUSTRIES AND THE ROLTRANS GROUP

On 28 May 2004, pursuant to articles 523 and 524 of the Com-panies’ Act, the Board of Directors ratifi ed a number of legal transactions that had taken place between Sioen Industries and Roltrans Group Europe BV and its subsidiaries (together the “Rol-trans Group”) between December 1999 to March 2003.

Out of a concern for transparent provision of information to shareholders, we have opted not to wait for the 2004 annual re-port, but to publish the minutes of the Board of Directors on the company website, along with additional information on the Rol-trans Group, the market on which it was active and the Board’s decision.

The Board of Directors wishes to make clear that, following tho-rough investigation, no additional facts falling under the applicati-on of articles 523 and/or 524 of the Companies’ Act have come to light since 28 May 2004. The information below is intended solely to give investors a better insight into the circumstances and facts that the Board of Directors took into consideration in the above-mentioned ratifi cation of the transactions between Sioen Industries and the Roltrans Group.

1. Explanation of Roltrans Group’s economic context in 1999 The European market for tarpaulins was estimated in 1999 at sales of EUR 295.0 million.

50% of this was for assembly on new trailers and 50% for the replacement market.

The twelve largest players on the European tarpaulin market had a joint turnover of EUR 113.4 million. Of this EUR 26.3 million was produced by the Roltrans Group. The fact that the top twelve suppliers had together 38% of the total estimated market shows that the market was served largely by a very large numbers of small tarpaulin producers. These lacked both the potential for further product development and the production capacity for lar-ger series (i.e. more than 50 units).Roltrans Group sold mainly to larger customers such as bodywork and trailer builders, trailer rental companies and fl eet owners. EUR 23.6 million (90%) of Roltrans Group’s turnover came from newly built trailers and EUR 2.7 million from the replacement

market, gaving the Roltrans Group an estimated approx. 16% of the total new trailer market.

In the late 1990s Germany’s three largest trailer builders, follo-wing the example of the automotive industry, decided to stream-line their respective organizations. Cost-saving measures, short development leadtimes and product standardisation were the order to the day. This marked the start of a hard competitive battle which led to a consolidation of the sector. These major trailer builders went looking for professionally organised suppliers which could meet their demands. Supplies had to be able offer large production capacity, reliable delivery, quality (both of the tarpaulins themselves and the printing) and low price.

The Roltrans Group was a very dynamic player on this market, having recognized these challenges at an early stage. After exami-ning the company and market situation with the help of outside consultants, the Roltrans Group developed the following three-phase strategic plan:

- PHASE 1 (July 99 – September 99): short-term interventions. Relocation of large parts of production to Poland, personnel reductions at Tegelen (Netherlands), short-term purchasing savings, savings on transport, strict receivables management and the attracting of outside capital.

- PHASE 2 (September 99 – December 99) Process standar-disation, introduction of a central management function, inte-gration of operating functions, improvement of administrative processes and optimizing of the overhead situation.

- PHASE 3 The professionalisation phase. The inbedding of processes and procedures in the new organisation at interna-tional level, preparing good system choices that can support the organisation in the future, preparing strategic plans to ena-ble the organisation to grow and a far-reaching orientation to-wards the possibilities of production process automatisation.

As early as phase 1 it became visible that outside capital (or a partner) would have to be brought in if the strategic plan was to be successfully implemented. Sioen Industries contemplated a takeover, but this was commercially not feasible: integrating Roltrans Group at that point in time would have led to the loss of other large clients (competitors of Roltrans Group). In Decem-ber 1999, 75% of the Roltrans Group was fi nally taken over by Monal SA, a company controlled at the time by the Sioen family

via Stichting Administratiekantoor Midapa (Midapa is controlled by Mr Jean-Jacques Sioen and Mrs Jacqueline Sioen, with the other Sioen family directors as certifi cate holders), for NLG 1. At the same time Monal SA granted the Roltrans Group a credit of approximately EUR 5 million.

2. Ratifi cation of transactions It is in the above context that a number of transactions took pla-ce between Sioen Industries on the one hand and the Roltrans Group and the Sioen family on the other. On 28 May 2004 these transactions were ratifi ed by Sioen Industries’ Board of Directors pursuant to article 524 of the Companies’ Act.

- On 20 December 1999 ABN Amro Bank (Brussels) made a EUR 22.0 million facility available to Sioen Industries for use solely as a so-called Ausfallbürgschaft (defi ciency guarantee) in favour of ABN Amro Bank (Maastricht) to secure the credit granted by the latter to the Roltrans Group. This security was also effectively granted by Sioen Industries. This facility and the guarantee were renewed on 23 December 2002.

- Between December 1999 and March 2003 Sioen Industries and its subsidiaries granted supplier credits and loans to the Roltrans Group.

- Sioen Industries took over Monal SA (75% owner of the Roltrans Group) in March 2003.

These transactions are set out in greater detail below, and the risk assessment made by the Board of Directors on 28 May 2004 in respect of these transactions is further elucidated.

2.1. The guarantee

2.1.1. Financial situation of the Roltrans Groep at the time of the guarantee in 1999

Key fi gures for Roltrans Group’s fi nancial situation are found in the 1999 half-year fi gures:

EQUITY: EUR 4.4 million plus a EUR 1.1 million subordinated loan

INDEBTEDNESS: Total short-term and long-term borrowings of EUR 20.3 million. Supplier and other debts amounting to EUR 11.6 million. Against

these debts stand EUR 19.5 million of fi xed assets, EUR 4.1 mil-lion of stocks and EUR 3.9 of customer receivables. Other short term assets amount to EUR 8.2 million.

ANNUAL TURNOVER: EUR 31.0 million (NLG 68.4 million), of which EUR 9.2 million with Sioen Industries.The liquidity ratio was 175.1%.The solvency ratio was 15.8%.

Towards the end of 1999 the Roltrans Group was facing serious liquidity problems and was virtually in suspension of payments.

2.1.2. Impact of the guarantee on the Sioen group’s fi nancial position

(a) Risk assessment

On 20 December 1999 Sioen Industries granted a guarantee in a total amount of EUR 22.0 million. This was an Ausfallbürgschaft, i.e. a guarantee that can be invoked only after the exhaustion of established local securities.

According to Roltrans Group’s 1999 annual report, the Roltrans Group had the following loans outstanding with the bank to whom the Ausfallbürgschaft had been granted:

- EUR 11.8 million long-term loan, and- a EUR 11.8 million credit facility, of which EUR 8.6 million was drawn down at 31 December 1999, i.e. together EUR 23.6 million.

The collateral that Roltrans had granted to the same bank was:

- A mortgage on the fi xed assets in Tegelen (Netherlands) and Konin (Poland). At 31 December 1999 these fi xed assets had a book value of EUR 13.1 million, and - A pledge on the operating equipment, stocks and trade recei-vables. At 31 December 1999 the book value of the operating equipment amounted to EUR 5.4 million, the stocks to EUR 5.2 million and the trade receivables to EUR 9.3 million.

In this way, Roltrans had given a total of EUR 33 million of assets as security. Between 1999 and 2003 the value of these assets never fell below the amount of the outstanding borrowings.

51

In the context of a takeover by Sioen Industries in March 2003 the guarantee was renewed on 23 December 2002, even thou-gh the previous guarantee had not yet expired. The total value of assets given by Roltrans as security at that time therefore amoun-ted to EUR 27.2 million, adequately covering the loans received.

(b) Impact of the guarantee on the way in which Roltrans Group was acquired in 2003.

The acquisition price was EUR 1. With regard to relations with Roltrans Group’s creditors before the acquisition, it can be noted that the Roltrans Group’s outstanding loans were fully covered at all times by collateral from Roltrans itself. Given the banks’ secu-rity situation, there was no reason for any change in the relations with the banks. The existence of the guarantee had no infl uence on the banks’ position. With regard to the other creditors, it can be pointed out that, at the time of the sale, Mr Jean-Jacques Sioen renounced a receivable of over EUR 5 million against the Roltrans Group.

2.2. The supplier credits and the loans

2.2.1. Consequences on equity

Loans and supplier credits were granted to the Roltrans Group between December 1999 and March 2003. The Roltrans Group’s fi nancial situation can be summarised in the following key fi gu-res, taken from the annual accounts as fi led:

• End of 1999 fi nancial year

EQUITY: EUR - 4.2 million negative plus a EUR 4.5 million subordinated loan

INDEBTEDNESS: Total short and long-term loans of EUR 20.9 million. Supplier and other debts of EUR 6.8 million. Against these debts stand EUR 18.7 million of fi xed assets, EUR 5.1 million of stocks and EUR 9.0 million of customer receivables. Other short term assets amount to EUR 0.3 million.

BALANCE SHEET TOTAL: EUR 33.3 million

TURNOVER: EUR 34.7 million, of which EUR 9.2 million with Sioen Industries

NET PROFIT: EUR 6 million

CASH FLOW:(Net profi t + depreciation of fi xed assets): EUR - 4.4 million

• 2000 fi nancial year

EQUITY: EUR - 2.2 million negative plus a EUR 4.5 million sub-ordinated loan

INDEBTEDNESS: Total short and long-term loans of EUR 22.1 million. Supplier and other debts of EUR 10.1 million. Against these debts stand EUR 18.7 million of fi xed assets, EUR 6 million of stocks and EUR 9.2 million of customer receivables. Other short term assets amount to EUR 2.4 million.

BALANCE SHEET TOTAL: EUR 36.2 million

TURNOVER: EUR 38.7 million, of which EUR 9.5 million with Sioen Industries

NET PROFIT: EUR 1.9 million

CASH FLOW: EUR 3.4 million

• 2001 fi nancial year

EQUITY: EUR - 4.4 million negative plus a EUR 4.5 million sub-ordinated loan

INDEBTEDNESS: Total short-term and long-term borrowings of EUR 23.2 million. Supplier and other debts amounting to EUR 12.2 million. Against these debts stand EUR 18.9 million of fi xed assets, EUR 5.6 mil-lion of stocks and EUR 7.7 of customer receivables. Other short term assets amount to EUR 4.1 million.

BALANCE SHEET TOTAL: EUR 36.4 million

TURNOVER: EUR 37.9 million, of which EUR 10.1 million with Sioen Industries

NET LOSS: EUR -2.2 million

CASH FLOW: EUR -0.5 million

• 2002 fi nancial year

EQUITY: EUR - 22.6 million negative plus a EUR 4.5 million sub-ordinated loan

INDEBTEDNESS: Total short-term and long-term borrowings of EUR 25.1 million. Supplier and other debts amounting to EUR 23.9 million. Against these debts stand EUR 15.3 million of fi xed assets, EUR 5.2 mil-lion of stocks and EUR 6.7 of customer receivables. Other short term assets amount to EUR 3.8 million.

BALANCE SHEET TOTAL: EUR 31 million

TURNOVER: EUR 32.6 million, of which EUR 11 million with Sioen Industries

NET LOSS: EUR -16 million

CASH FLOW: EUR -13.9 million

• Financial year 2003 (9 months)

TURNOVER: EUR 24.6 million

NET LOSS: EUR - 6.2 million

CASH FLOW: EUR – 3.3 million

• Financial year 2004

TURNOVER: EUR 38.3 million

NET LOSS: EUR – 3.2 million

CASH FLOW: EUR 1.9 million

53

The loans were granted at market interest rates, viz. average Belgian prime rate + 1%, or Euribor + 1.5%

Period Loans Loans YTD Customer credit Monthly Sioen sales YTD Sales to Roltrans

Jan-99 0,00 0,00 3.233.421,91 966.247,09 966.247,09 Feb-99 0,00 0,00 2.643.979,63 841.968,67 1.808.215,76 Mar-99 0,00 0,00 3.347.030,12 1.017.660,03 2.825.875,80 Apr-99 0,00 0,00 2.704.263,84 766.144,14 3.592.019,94 May-99 2.268.901,08 2.268.901,08 3.366.242,50 765.560,95 4.357.580,88 Jun-99 0,00 2.268.901,08 3.385.845,02 865.471,31 5.223.052,19 Jul-99 2.268.901,08 4.537.802,16 2.590.643,98 375.464,59 5.598.516,78 Aug-99 0,00 4.537.802,16 2.454.071,00 414.623,12 6.013.139,89 Sep-99 1.361.340,65 5.899.142,81 2.280.610,22 822.033,50 6.835.173,39 Oct-99 0,00 5.899.142,81 1.549.591,95 16.907,83 6.852.081,21 Nov-99 907.560,43 6.806.703,24 2.034.317,21 782.258,83 7.634.340,05 Dec-99 -6.806.703,24 0,00 3.627.855,65 1.607.372,58 9.241.712,62 End/99 0,00 0,00 3.627.855,65 0,00 9.241.712,62 Jan-00 0,00 0,00 3.372.985,49 997.273,15 997.273,15 Feb-00 0,00 0,00 4.188.116,27 818.908,71 1.816.181,85 Mar-00 0,00 0,00 4.473.103,52 822.536,27 2.638.718,12 Apr-00 0,00 0,00 3.054.576,77 437.129,44 3.075.847,57 May-00 0,00 0,00 2.977.505,42 1.207.604,73 4.283.452,30 Jun-00 0,00 0,00 3.312.281,90 603.888,78 4.887.341,08 Jul-00 0,00 0,00 3.793.633,41 503.883,95 5.391.225,02 Aug-00 0,00 0,00 2.621.077,18 706.340,03 6.097.565,05 Sep-00 0,00 0,00 2.867.770,63 898.014,92 6.995.579,97 Oct-00 0,00 0,00 3.184.838,72 929.469,95 7.925.049,92 Nov-00 0,00 0,00 3.849.788,12 1.019.102,63 8.944.152,55 Dec-00 0,00 0,00 4.176.224,61 539.211,72 9.483.364,27 End/00 0,00 0,00 4.430.532,36 0,00 9.483.364,27 Jan-01 0,00 0,00 3.818.468,12 880.353,60 880.353,60 Feb-01 0,00 0,00 4.570.188,05 751.719,93 1.632.073,53 Mar-01 0,00 0,00 5.431.784,60 861.596,55 2.493.670,08 Apr-01 0,00 0,00 6.140.174,12 710.418,40 3.204.088,48 May-01 0,00 0,00 3.596.074,37 946.993,81 4.151.082,29 Jun-01 0,00 0,00 4.442.398,50 896.030,41 5.047.112,70 Jul-01 0,00 0,00 4.653.561,20 709.252,81 5.756.365,51 Aug-01 0,00 0,00 5.431.329,50 875.124,21 6.631.489,72 Sep-01 0,00 0,00 5.652.847,57 892.691,07 7.524.180,79 Oct-01 0,00 0,00 6.599.212,53 1.085.560,92 8.609.741,71 Nov-01 0,00 0,00 7.351.141,78 830.950,88 9.440.692,59 Dec-01 0,00 0,00 8.019.802,79 704.212,90 10.144.905,49 End/01 0,00 0,00 8.019.802,79 0,00 10.144.905,49 Jan-02 0,00 0,00 8.724.107,77 704.304,98 704.304,98 Feb-02 5.800.000,00 5.800.000,00 3.589.272,77 665.221,68 1.369.526,66 Mar-02 0,00 5.800.000,00 3.803.003,20 567.200,14 1.936.726,80 Apr-02 0,00 5.800.000,00 4.046.718,70 821.946,18 2.758.672,98 May-02 0,00 5.800.000,00 4.390.148,65 723.137,58 3.481.810,56 Jun-02 0,00 5.800.000,00 5.226.488,01 1.086.882,22 4.568.692,78 Jul-02 0,00 5.800.000,00 5.749.686,69 773.181,82 5.341.874,60 Aug-02 0,00 5.800.000,00 4.773.904,43 909.384,67 6.251.259,27 Sep-02 0,00 5.800.000,00 7.424.416,13 1.217.504,43 7.468.763,70 Oct-02 0,00 5.800.000,00 8.510.669,95 1.386.253,82 8.855.017,52 Nov-02 0,00 5.800.000,00 9.250.605,75 1.064.935,80 9.919.953,32 Dec-02 0,00 5.800.000,00 10.298.001,92 1.047.396,17 10.967.349,49 End/02 0,00 5.800.000,00 10.298.001,92 0,00 10.967.349,49 Jan-03 9.400.000,00 15.200.000,00 11.191.994,43 893.992,51 893.992,51 Feb-03 -50.000,00 15.150.000,00 12.190.845,38 998.850,95 1.892.843,46 Mar-03 -4.840.000,00 10.310.000,00 13.082.321,09 891.475,71 2.784.319,17

The outstanding loans and supplier credits can be detailed as follows:

55

2.2.2. Corporate advantages and disadvantages of the sup-plier credit and the loans

As stated in the above-mentioned minutes, the supplier credit and loans had the effect of temporarily raising Sioen Industries’ risk profi le. Sioen Industries received no remuneration from the Roltrans Group for the guarantee. It should be pointed out here that the Roltrans Group was one of Sioen Industries’ most impor-tant clients. It is not uncommon for key customers to be given customer credit.

Staff

57

In 2004 the Sioen Industries Group has 4,500 employees, 3,638 of them with “worker” status and 862 with “salaried employee” status, or a ratio of 81% workers to 19% salaried employees.

The Coating Division remained stable in 2004 with 764 em-ployees. EMB and Inducolor are already included in the Coating Division fi gures in both years. There was no signifi cant change in staff in these companies either. The Coating Division is capital intensive and production is located in various plants in Belgium, France and Portugal.

On December 31, 2004 the Apparel Division had 2,921 em-ployees, a fall of 8%. The decrease refl ects rationalization and automation in production workshops in Indonesia and Tunisia. Indonesia employs the majority of staff in the Apparel division with 1,921 employees, followed by Tunisia, which accounts for 725 jobs. The Apparel division continues to invest in high-tech production and design resources and highly qualifi ed staff.

The growth in the Processing Division also led to a rise in the number of staff there to 766 employees (+8%). This rise can primarily be felt in Belgium, with growing employee comple-ments at Nordifa, which specializes in fi lters and fi lter cloths (+17 employees), and Coatex (+8 employees).

The group’s various divisions and plants receive group services support in personnel management, fi nancial and treasury ma-nagement, budgeting, ICT and legal affairs from the group hol-ding company Sioen Industries n.v. in Ardooie (B). This service structure is reinforced each year. On December 31, 2004 there were 49 employees working at group level (+ 11%).

Sioen Industries has employees in 15 different countries: Bel-gium, China, Germany, France, Ireland, Indonesia, Portugal, Tu-nisia, UK, the Netherlands, Poland, USA, Austria, Denmark and Finland.

Sioen Industries Group staffThe growth in the Sioen Industries group in 2004 (turnover +14.23 %) has not led to an increase in employment (-4%). On December 31, 2004 Sioen Industries employed4,500 persons worldwide, compared with 4,689 at the end of December 2003.A rise of EUR 4 million in personnel costs can be observed over the entire year. This increase can be ascribed fully to the compa-nies taken over in 2003 which have now been included in the consolidation for 12 months. Personnel costs as a percentage of turnover fell from 19.98% to 18.93%.

17% 65% 17% 1%

Personnel per division:

Coating Division

Apparel Divis

ion

Processing Divis

ion

Group Services

Personnel per country:

Belgium 19,38%

China 0,31%

Germany 0,69%

France 6,44%

Ireland 0,82%

Indonesia 42,69%

The Netherlands 0,31%

Poland 11,80%

Portugal 0,51%

Tunisia 16,11%

UK 0,73%

USA 0,20%

The group’s pro-active environmental policy meets all legal standards and is based on two pillars: emissions and recy-cling & energy recovery techniques.

The group invests every year in minimizing the emission of harm-ful substances. In so doing it applies stricter standards than those required by law.Sioen Industries invests in post-combustion installations in both existing and new plants, which enable it to reach near-zero emis-sion levels and make maximum use of thermal recovery for hea-ting the ovens for the coating lines.

The group is making increasing use of recycling and energy re-covery techniques:

For example, the distillation column at the Sioen Fabrics plant in Mouscron reduces emissions to a minimum and pro-duces substantial savings through the maximum recovery of raw materials. The site in Ardooie is also equipped with a distillation co-lumn for the maximum recovery of cleaning solvents.

Environmental policy

59

Quality

However, Sioen Industries pays attention not just to the quality of its products. The necessary care is also given to achieving a qua-lity working environment. The creation of a stimulating working climate in which everyone has the opportunity to develop their capacities to the full is one of the cornerstones of the Sioen In-dustries group. A fl at corporate structure ensures that information fl ows smoothly from the executive directors to the shop fl oor, enabling decisions to be taken quickly and accurately.

Quality is a guiding principle for all Sioen Industries group em-ployees in the performance of their work. The quality policy in-cludes a permanent process of improvement where everything is done for the customer’s benefi t.

At Sioen Industries, everybody is aware that the company goals can only be achieved in a company culture where the customer takes central stage. Our success largely depends on the qua-lity of our products and services and on the competence andmotivation of our staff.

Quality monitoring requires an approach in which the quality of the product supplied must fulfi l the customer’s most exacting criteria. Sioen Industries not only checks the end product but as a matter of quality policy ensures effective monitoring throughout the production process.

This monitoring starts with the screening of suppliers from whom a constant level of quality is demanded. Sioen Industries also employs the necessary specialists to carry out permanent moni-toring on the shop fl oor and random sample checks. The group uses the most modern communication techniques and software in this process. Fulfi lling strict quality criteria is not just a challenge on the work fl oor. Permanent support by our own research laboratories is part of the active quality policy.

In the central Research & Development Centre at the Ardooie site all of the group’s research activities are be concentrated. In addition to supporting production this centre is also responsiblefor developing and marketing new products and productiontechniques.

The Apparel Division has met ISO 9001 standards since 1996. It has also won AQAP-120 certifi cation, the quality label for military tenders. Thanks to a constant concern for quality the Coating Division was one of the fi rst coaters to acquire the ISO 9001 certifi cate.

R&D

Research and Development (R&D) is vital for a company like Sioen. Staying ahead in the market means investing permanently in research and development. This is why the group built a cen-tral R&D unit at the group’s Ardooie headquarters. Here, profes-sionals focus on product development and innovation and on process enhancement. Product optimisation is a constant fac-tor. As well as boasting the most modern facilities, this research operation can also pride itself on its employees’ expertise and experience.

The Sioen Industries group R&D team cooperates closely with various national and international universities, European research institutes and scientifi c funds.

Apart from this central R&D unit Sioen has a further ten research centres worldwide. The main production sites each have their own laboratory where specifi c research and product tests arecarried out. The work done by the various research centres is coordinated and steered from the R&D centre in Ardooie. Here Sioen employs 34 persons and the total operation cost amounts to 1,7 million EUR (excluding production time and costs).

61

Share information

ListingTo enable Sioen Industries to maintain its rapid growth and in the conviction that a transparent policy would further strengthen the group’s potential for growth, its shares were introduced to the Brussels Stock Exchange Spot Market (double fi xing) on October 18, 1996. A year later the shares were listed on the semi-conti-nuous segment of the Futures Market before being quoted, since March 11, 1998, on the continuous segment of the Brussels futures market, which has in the meantime become Euronext Brussels.

At present 8,026,060 shares or 37.5% of the total number of shares are distributed among the public. 62.5% are controlled by the Sioen family through the Sihold n.v. holding company.

Evolution of the shareThe share reached its highest price for the year on October 8, 2004 at EUR 10.70. The year-end share price of EUR 10.29 was 35% above the lowest price for the year of EUR 8.24 on Ja-nuary 2, 2004. The waning interest in Belgian small caps is refl ected both in Sioen Industries’ price trend and in traded vo-lumes. Through a combination of steady turnover, cash fl ow and profi t growth, entry into the Next Prime segment and an active communication policy, we are seeking to pro-actively stimulate investor interest. Market capitalization was EUR 220.1 million on December 31, 2004.

IndicesIn mid June 2000 the Sioen Industries share was included in IN.fl anders®, a new share index composed of the 100 principal employers in Flanders quoted on the Stock Exchange. The selec-tion and weighting of the companies in the index are determined on the basis of employment using the following criteria:

• the number of staff in Flanders (for subsidiaries of foreign companies) • the number of staff worldwide (for Flemish companies)• the evolution of employment in Flanders for subsidiaries or worldwide for Flemish companies. The Sioen Industries share of this index is 1.26% (01/02/05).

Since March 1998 the share has also been included in the invest-ment register compiled by Ethibel, an independent consultancy and audit agency for socio-ethical and ecological investments.

SHARE PRICE

ISIN BE0003743573 MEP BRU Euronext code BE0003743573 Mnemo SIOE Type Stock - Ordinary stock - Continuous Market Euronext Brussels - Eurolist - Local Securities Compartment B (Mid-Caps)Segment Euronext PrimeEconomische groep Cyclical consumer goodsSector Household goods & textileSubsector Other textiles & leathergoodsReuters SIOE.BRBloomberg SIO.BBDatastream B:SIO

31-12

-’96

31-12

-’98

31-12

-’99

31-12

-’01

31-12

-’02

31-12

-’04

250.000

200.000

150.000

100.000

50.000

50

40

30

20

10

Price Volume

63

2004: fi nancial communication policyThe Sioen Industries share was included in Euronext Brussels in Compartment B (Mid-Caps).

Dividend policyThe Board of Directors endeavours to maintain a payout ratio of over 15% and to increase the dividend after year, keeping the dividend close to cash fl ow expectations and at the same time rewarding shareholders for their trust in the company.

The payout ratio for 2004 is 40.7% compared with 49.8% last year and 35.9% in 2002.At EUR 0.22 gross (0.1650 net) the dividend is 10% higher than last year.The dividend is payable at Dexia Bank, ING-Bank, Fortis Bank and KBC Bank branches from June 10, 2005.

Consolidated key fi gures per share (2) 2004 2003 2002 2001 2000 1999 1998 1997 1996 EUR EUR EUR EUR EUR EUR EUR EUR EUROperating profi t 1,39 1,27 1,15 1,58 1,52 1,33 0,92 0,75 0,48Profi t on ordinary activities after taxation 0,65 0,42 0,52 1,27 0,89 0,82 0,58 0,43 0,32Net profi t (group’s share) 0,54 0,40 0,47 0,79 0,88 0,87 0,57 0,45 0,32Cash fl ow 1,68 1,74 1,41 1,67 1,52 1,38 0,97 0,71 0,54Consolidated capital and reserves 6,04 5,77 5,86 5,79 5,24 4,56 3,73 1,68 1,26Gross dividend 0,2200 0,20 0,17 0,16 0,14 0,12 0,09 0,07 0,05Net dividend 0,1650 0,15 0,13 0,12 0,11 0,09 0,07 0,05 0,04Pay-out (%) 40,7% 49,8% 35,9% 20,2% 15,8% 14,2% 15,7% 15,5% 14,5%

Maximum share price 10,70 9,16 14,95 23,51 33,65 47,5 43,13 10,68 4,02Minimum share price 8,24 4,70 6,00 10,1 18,4 28,5 9,92 3,92 3,84Price at Dec. 31. (3) 10,29 8,24 7,65 11,50 20,90 33,00 38,18 9,97 3,92Change in share price (5) 35% 8% -33% (45%) (36,7%) (14%) 283% 154% 13%Price/Earnings ratio (5) 19,1 20,5 16,4 14,5 23,8 37,9 67,0 22,1 12,1Price/Cash fl ow ratio (5) 6,1 4,7 5,4 6,9 13,8 23,9 39,4 14,0 7,3Average daily trading volume (no. of shares) (4) 6.550 4.406 5.310 5.104 9.548 13.216 26.671 20.950 43.410Average monthly trading volume (no. of shares) (4) 137.559 92.895 112.837 107.194 199.710 277.530 557.863 434.762 855.860Annual trading volume (in EUR millions) 16,2 8,3 10,4 20,7 63,7 122,5 162,6 33,9 8,2 Number of Sioen Industries shares outstanding (in thousands)(2) 21.391 21.391 21.391 21.391 21.391 21.391 21.391 19.965 19.965Stock market capitalisation (in EUR millions)(5) 220,1 176,3 163,6 246,0 447,1 705,9 816,6 199,0 78,2

Gross dividend 0,22 0,20 0,1680 0,16 0,14 0,12 0,09 0,07 0,05Net dividend 0,1650 0,15 0,1260 0,12 0,11 0,09 0,07 0,05 0,04Pay-out (%) 40,7% 49,8% 35,9% 20,2% 15,8% 14,2% 15,7% 15,6% 15,6%

(2) Recalculated after the 1 to 55 share split on 13/09/96 and the 1 to 10 split on 05/11/98.(3) On March 31, 2005 the price of the Sioen Industries share was EUR 9.65 per share.(4) 1996 data are strongly infl uenced by the high volumes just after the stock market fl otation of 18 October 1996.(5) Price at end-December.

37,5%

62,5%

Public Sihold

SHAREHOLDER STRUCTURE

Financial review

INDEX

60/67 General information68/69 Consolidated balance sheet70/71 Consolidated Income statement72 Funds fl ow statement73 Consolidated companies as of December 31, 200474/75 Consolidation criteria and accounting principles76/81 Comments on the consolidated annual accounts82/87 Notes to the consolidated accounts89/91 IFRS92/93 Statutory annual accounts94 Notes95 Statutory auditor’s report96 Proposals to the annual meeting97 Financial calendar98/99 Adresses

Commissioner’s reports

The statutory auditor Deloitte & Partners Auditors c.v.b.a., repre-sented by G. Verstraete and G. Wygaerts, was appanted on the general shareholders meeting of 2002 for a duration of 3 years.The past years, the have expressed an opinion on theconsolidated annual accounts:

2002: Opinion without reservation and with explanatoryparagraphThe explanotary paragraph is the following:

Without undermining our opinion, we draw your attention to the Important Events after December 2002 on page 5 of the annual report and to the notes XV and XVII of the consolidated fi nancial statements. On December 31, 2002, the Sioen group had E 16 Mio of receivables outstanding towards the Roltrans group and had given personal guarantees for bank debt for E 20,8 Mio. The Roltrans group has fi nancial diffi culties. Subsequent to yearend, the Roltrans group was acquired. The realization of these amounts depends on the success of the restructuring measures proposed by Sioen. No value reductions or pro-visions have been recorded in the attached consolidated fi nancial statements for this purpose.

2003: Opinion with reservationThe reservation is the following:

COMPLEMENTARY AUDITOR’S REPORT TO THE STATUTORY AUDI-TOR’S REPORT DATED MARCH 25, 2004 ON THE CONSOLIDATED AN-NUAL ACCOUNTS FOR THE YEAR ENDING DECEMBER 31, 2003 TO THEGENERAL MEETING OF SHAREHOLDERS

QUALIFIED AUDIT OPINION

To the Shareholders,

On May 24, 2004, new information was brought to our attention from which we can conclude that since September 1999 the Roltans Group was in the sphere of infl uence of the Sioen family and that Sioen Industries granted on December 20, 1999 a guarantee to the Roltrans Group for an amount of 22 million EUR. These elements were previously not communicated to us by the responsibles of the Company and have consequences on the level of Com-pany Code and on the accounting treatment of the Roltrans Group and the transactions with the Roltrans Group in the consolidated annual accounts for the years 1999 untill 2003.

During 2003 the Roltrans Group was acquired by Sioen Industries NV and a goodwill of 20 million EUR was recognised of which 5,6 million EUR was allocated to land and buildings. Despite the fact that the Board of Directors has determined that the developments relating to the Roltrans Group are in line with the planned results, we are of the opinion that, considering the new elements, the goodwill for an amount of 20 million EUR should be written off.

In the consolidated annual report over accounting year 2003, these new ele-ments were not adressed neither from an accounting perspective nor from a Company Code perspective.

Considering that we could only start our audit procedures relative to the above mentionned items as from May 24, 2004 we can not certify that there are no other material consequences to the consolidated annual accounts for the year ending December 31, 2003.

Based on our examination and the reports of other accountants, with excep-tion for the impacts of what is mentioned above, we are of the opinion that the consolidated fi nancial statements give a fair and true view of the group’s consolidated equity and consolidated fi nancial position as of December 31, 2003, and the consolidated results of its operations for the year then ended, and the information given in the notes to the consolidated fi nancial statements is adequate.

May 28, 2004The Statutory Auditor

The past years, the have expressed an opinion on the statutory annual accounts of Sioen industries n.v.:

2002: Opinion without reservation and with explanatoryparagraphThe explanotary paragraph is the following:

Without undermining our opinion, we draw your attention to the Important Events after December 2002 in the annual report and to the notes XVII and XX (volume 17 and 28) of the fi nancial statements. On December 31, 2002, the Sioen group had E 16 Mio of receivables outstanding towards the Roltrans group and had given personal guarantees for bank debt for E 20,8 Mio. The Roltrans group has fi nancial diffi culties. Subsequent to yearend, the Roltrans group was acquired. The realization of these amounts depends on the success of the restructuring measures proposed by Sioen. No value reductions or pro-visions have been recorded in the attached consolidated fi nancial statements for this purpose.

2003: Opinion with reservationThe reservation is the following:

COMPLEMENTARY AUDITOR’S REPORT TO THE STATUTORY AUDITOR’S RE-PORT DATED MARCH 25, 2004 ON THE ANNUAL ACCOUNTS FOR THE YEAR ENDING DECEMBER 31, 2003 TO THE GENERAL MEETING OF SHAREHOL-DERS

QUALIFIED AUDIT OPINION WITH EXPLANATORY PARAGRAPH

To the Shareholders,

On May 24, 2004, new information was brought to our attention from which we can conclude that since September 1999 the Roltans Group was in the sphere of infl uence of the Sioen family and that Sioen Industries granted on December 20, 1999 a guarantee to the Roltrans Group for an amount of 22 million EUR. These elements were previously not communicated to us by the responsibles of the Company and have consequences on the level of Com-pany Code and on the accounting treatment of the Roltrans Group and the transactions with the Roltrans Group in the consolidated annual accounts for the years 1999 untill 2003.

Based upon the above, we add a qualifi cation to our auditor’s report with explanatory paragraph dated March 25, 2004. The qualifi cation is as follows: considering that we could only start our audit procedures relative to the above mentioned items as from May 24, 2004 we can not certify that there are no other material consequences to the annual accounts for the year ending December 31, 2003.

We wish to complete the additional certifi cations and information as included in our report dated March 25, 2004 with following statements:

• The annual report over accounting year 2003 does not include or adress these new elements neither from an accounting perspective nor from a Company Code perspective.

• The regulations of articles 523 and 524 of the Company Code were not repected for transactions with the Roltrans Group since 1999.

May 28, 2004The Statutory Auditor

65

Registered offi ce and company name (art. 1 and art. 2)The registered offi ce of Sioen Industries, a public limited liabi-lity company incorporated under Belgian law, is established at 23 Fabriekstraat, B-8850 Ardooie. The company number is 441.642.780.

Incorporation and publicationSioen Industries was incorporated under the name “Sihold” by a deed executed before the notary public Ludovic du Faux in Mouscron on September 3, 1990, published in the annexes to the Belgian Offi cial Journal of September 28, 1990 under num-ber 900928-197.

Financial year (art. 36)The fi nancial year starts each year on January 1 and ends on December 31.

Duration (art. 4)The company has been incorporated for an indefi nite period.

Objects of the company (art. 3)The company has for its objects, in Belgium and abroad, in its own name or in the name of third parties, for its own account or for account of third parties:

• The weaving of all kinds of fabrics, the coating of fabrics and all other materials, the printing thereof, the manufacture of plastic and plastisized material, the manufacture, purchase and sale, in Belgium and abroad, of material useful for or con-nected with the said products and raw materials, as well as the manufacture of chemical products and pigments;• The manufacture of ready-to-wear outerwear in woven fa-bric, the manufacture of all sorts of tailor-made clothing and embroidery; the manufacture of ready-to-wear outerwear in knitted fabrics, as well as of household linen and interior de-coration items; the manufacture of wall cladding, the printing and fi nishing of all fabrics; the manufacture of ready-to-wear items and outfi ts for men and women; knitwear, embroidery, household and table linen, children’s clothing.The manufacture of safety and high visibility items. The who-lesale and retail trade in all the above-mentioned items;• The investment in, subscription for, fi rm take-over, place-ment, purchase, sale and trading of shares, bonds, certifi cates, claims, currencies and other securities, issued by Belgian or foreign companies, which may or may not be trading compa-nies, administrative offi ces, institutions and associations, with or without (semi-)public law status;

• The management of investments and holdings in subsidi-aries, the holding of directorship posts, the giving of advice, management and other services to or in accordance with the activities carried on by the company itself. These services may be provided by contractual or statutory appointment and in the capacity of external consultant or agency of the customer.

All of this subject to the company complying with the legal requirements. The company may, in Belgium and abroad, perform all transactions of movable and immovable property that may serve directly or indirectly to expand or promote its undertaking. It may acquire all movable and immovable pro-perty, even if this is not directly or indirectly connected with the objects of the company.It may, by any means, take an interest in all associations, af-fairs, undertakings or companies that have the same, similar or related objects or that are likely to promote its undertaking or facilitate the sale of its products or services, and it may col-laborate or merge therewith.

Consultation of documentsThe statutory and consolidated annual accounts of the company and the accompanying reports are fi led with the Belgian National Bank.

The articles of association and the special reports required by the Companies Act are available from the Clerk’s Offi ce of the Commercial Court of Bruges. Shareholders may request these documents, as well as the annual and half-yearly reports and all information published for the benefi t of the shareholders, at the registered offi ce of the company. The half-yearly and annual reports can be downloaded from the website www.sioen.com.

History of the capital The history of the capital is included under the heading“Comments on the consolidated annual accounts” on page 78.

General information

67

Authorized capitalThe board of directors is authorized, during a period of fi ve years from the publication in the Annexes to the Belgian Offi cial Journal of the deed of amendment of the articles of association of May 30, 2003 (B.O.J. June 17, 2003), to increase the issued capital in one or in several stages by a maximum amount of forty-six mil-lion EUR. This authorisation is renewable and is valid for capital increases in cash, in kind and through incorporation of reserves. Today the amount is still fully available.

Within the context of the authorized capital, the board of directors is authorized, in the interest of the company and in accordance with the conditions stipulated in Articles 535 and 592-599 of the Companies Act, to cancel or restrict the pre-emptive right that is granted to the shareholders by law. The board of directors is aut-horized to restrict or cancel the pre-emptive right in favour of one or several persons, even if these persons are not staff members of the company or its subsidiaries.

On the occasion of the increase of the issued capital, carried out within the limits of the authorized capital, the board of directors is authorized to demand a share premium. If the board of directors decides to do so, this share premium must be recorded in an undistributable reserve account which can only be reduced or written off by a resolution of the general meeting, passed in the manner required for amendments to the articles of association.

Failing an express authorization from the general meeting to the board of directors, the authority of the board of directors to increase the issued capital through contributions in cash, with cancellation or restriction of the pre-emptive right of the current shareholders, or through contributions in kind, shall be suspen-ded from the date of notifi cation of the company by the Banking, Finance and Insurance Commission of a take-over bid for the shares of the company. This authority shall be reinstated imme-diately after the closing of such a take-over bid. The general meeting of May 31, 2002 has expressly authorized the board of directors to increase the issued capital in one or in several stages, from the date of notifi cation of the company by the Banking, Finance and Insurance Commission of a take-over bid for the shares of the company, through contributions in cash, with cancellation or restriction of the pre-emptive right of the cur-rent shareholders, or through contributions in kind, in accordance with Articles 557 and 607 of the Companies Act. This authoriza-tion has been granted for a period of three years from the date of publication of this resolution in the Annexes to the Belgian Offi cial Journal (B.O.J. June 28, 2002), and is renewable.

Acquisition of own sharesThe general meeting of May 28, 2004 has expressly authorized the board of directors, in accordance with the provisions of the Companies Act, to acquire or have the disposal of its own shares or participating certifi cates, if the acquisition thereof is necessary to avoid an impending serious detriment to the company. This authorization shall be valid for a period of three years from the publication of the above-mentioned resolution in the Annexes to the Belgian Offi cial Journal (B.O.J. June 23, 2004).The general meeting of May 28, 2004 has authorized the board of directors, in accordance with Articles 620- 623 and 625 of the Companies Act, to acquire its own shares through purchase or exchange, up to the maximum number permitted by law and at a price equal to the market value of the shares. This authorization is valid for a period of eighteen months from the publication of this resolution in the Annexes to the Belgian Offi cial Journal (B.O.J. June 23, 2004), and is renewable.

ASSETS DECEMBER 31 Notes 2004 2003 2002 (000) EUR (000) EUR (000) EUR Fixed assets 167.054 175.785 153.100 II. Intangible assets VIII. 3.108 1.137 1.059III. Consolidation differences XII. 32.061 31.263 18.186IV. Tangible assets IX. 131.176 142.256 133.278 A. Land and buildings 44.216 43.397 37.858 B. Plant, machinery and equipment 59.695 70.107 70.805 C. Furniture and vehicles 2.376 2.610 2.680 D. Leasing and other similar rights 15.388 16.556 14.004 E. Other fi xed assets 9.350 9.580 0 F. Assets under construction and advance payments 151 6 7.931V. Financial assets X. 709 1.129 577 B. Other investments 709 1.129 577 2. Amounts receivable 709 1.129 577 Current assets 164.731 170.984 178.698

VI. Amounts receivable after one year 0 1.814 34VII. Inventories and contracts in progress 72.277 80.375 68.893 A. Inventories 72.277 80.375 68.893 1. Raw materials and consumables 27.814 26.076 22.945 2. Work in progress 9.672 14.772 11.161 3. Finished goods 34.791 39.527 34.787VIII. Amounts receivable within one year 75.363 75.299 93.346 A. Trade debtors 67.220 63.194 73.476 B. Other amounts receivable 8.143 12.105 19.870IX. Cash deposits 1.963 1.233 1.229 B. Other investments and deposits 1.963 1.233 1.229X. Cash at hand and in bank 12.823 10.210 12.940XI. Deferred charges and accrued income 2.305 2.053 2.256

Total assets 331.785 346.769 331.798

Consolidated balance sheet

(IN THOUSANDS EURO)

69

LIABILITIES DECEMBER 31 Notes 2004 2003 2002 (000) EUR (000) EUR (000) EUR Capital and reserves 129.180 123.511 125.251 I. Capital 46.000 46.000 46.000IV. Consolidated reserves XI. 84.395 79.773 76.722VI. Translation differences (6.482) (7.315) (2.807)VII. Investment grants 5.267 5.053 5.336VIII. Minority interests 0 2.298 2.025 Provisions, deferred taxes 7.656 9.662 9.097and contingent tax liabilities IX. A. Provisions for liabilities and charges 2.386 3.113 2.335 1. Pensions and similar obligations 79 390 0 2. Taxation 0 1.344 1.483 4. Other liabilities and charges 2.307 1.379 852 B. Deferred taxes and contingent tax liabilities VI.B. 5.270 6.549 6.762 Creditors 194.949 211.298 195.425 X. Amounts payable after one year XIII. 68.571 88.967 95.035 A. Financial debts 68.379 88.967 95.035 3. Leasing and other similar obligations 14.067 15.309 16.488 4. Credit institutions 54.312 73.658 78.547 C. Advance payments received on orders 192 0 0XI. Amounts payable within one year 125.495 120.489 99.270 A. Current portion of amounts payable after XIII. 24.293 22.085 21.706 one year B. Financial debts 39.751 48.507 32.057 1. Credit institutions 39.751 48.507 32.057 C. Trade debts 34.190 27.471 26.937 1. Suppliers 34.190 27.471 26.937 E. Taxes, remuneration and 15.154 16.317 12.323 social security 1. Taxes 6.549 9.823 6.125 2. Remuneration and social security 8.605 6.494 6.198 F. Other amounts payable 12.107 6.109 6.247XII. Accrued charges and deferred income 883 1.842 1.120 Total liabilities 331.785 346.769 331.798

YEARS ENDED DECEMBER 31 Notes 2004 2003 2002 (000) EUR (000) EUR (000) EUR I. Operating income 303.403 287.942 231.636 A. Turnover XIV.A. 311.611 272.787 237.731 B. Variations in stocks of fi nished goods, work and (10.443) 10.096 (7.965) contracts in progress (increase +, decrease -) D. Other operating income 2.235 5.059 1.870II. Operating charges (273.606) (260.712) (207.037) A. Raw materials, consumables and goods for resale 140.095 132.867 104.988 1. Purchases 141.747 135.895 105.739 2. Variations in stocks (increase -, decrease +) (1.652) (3.028) (751) B. Services and other goods 50.020 43.666 34.157 C. Remuneration, social security costs and pensions XIV.B. 58.990 54.474 47.048 D. Depreciation of formation expenses, intangible and tangible fi xed assets and other amounts written off XIV.C. 20.114 19.322 18.302 E. Written off stocks, contracts in progress and trade 981 5.626 1.208 debtors (increase +, decrease -) F. Provisions for liabilities and charges (1.081) 613 (1.305) (increase +, decrease -) G. Other operating charges 4.487 4.144 2.639III. Operating profi t 29.797 27.230 24.599IV. Financial income 5.578 6.757 5.667 A. Income from fi nancial fi xed assets 0 0 1 B. Income from current assets 253 1.512 516 C. Other fi nancial income 5.325 5.245 5.150V. Financial charges (16.379) (17.767) (14.377) A. Interests and other debt charges 7.012 9.031 7.188 B. Amortisation of consolidation differences XIV.C. 3.085 2.783 1.482 D. Other fi nancial charges 6.282 5.953 5.707 Financial result (10.801) (11.010) (8.710)VI. Profi t on ordinary activities before taxation 18.996 16.220 15.889

Consolidated income state

(IN THOUSANDS EUR)

71

SIOEN INDUSTRIES CONSOLIDATION Notes 2004 2003 20002 (000) EUR (000) EUR (000) EUR VI. Profi t on ordinary activities before taxation 18.996 16.220 15.889VII. Extraordinary income 271 131 61 F. Other extraordinary income 271 131 61VIII. Extraordinary charges (2.464) (1) (894) D. Provisions for extraordinary liabilities and charges 545 0 0 F. Other extraordinary charges 1.919 1 894 Extraordinary result (2.193) 130 (833)

IX. Profi t before taxation 16.803 16.350 15.056X A. Transfer from deferred taxes and contingent tax liabilities 626 518 1.717 B. Transfer to deferred taxes and contingent 1.302 (2.057) (2.414) tax liabilities XI. Income taxes (6.351) (5.843) (3.891) A. Current income taxes for the year (7.650) (6.002) (3.984) B. Adjustment of income taxes and write-back of 1.299 159 93 tax provisions Total taxes (4.423) (7.382) (4.588) XIV. Consolidated profi t for the year 12.380 8.968 10.468 A. Minority interest 827 384 462 B. Profi t for the group 11.553 8.584 10.006

FUNDS FLOW STATEMENT (in thousands EUR) 2004 2003 2002 EUR EUR EUROPERATING ACTIVITIES Part of the group in the consolidated profi t for the year 11.553 8.584 10.006 Minority interest in the consolidated profi t for the year 827 383 463 Depreciation 23.200 22.105 19.784 Written off other current assets 981 5.626 1.208 Depreciations other intangeable assets (536) 0 0 Increase (decrease) of provisions (192) 778 (1.320) Increase (decrease) of deferred taxes and contingent tax liabilities (1.844) (213) (1.108) Net decrease of investment grants (882) (283) (680) Change in working capital 15.771 3.647 (2.662)CASHFLOW FROM OPERATING ACTIVITIES 48.879 40.627 25.691

INVESTING ACTIVITIES Investment in tangible and intangible assets (9.093) (12.011) (34.400) Investment in fi nancial fi xed assets 419 (551) 190 Changes in consolidation scope (1.912) (16.369) Increase of consolidation differences (3.884) (15.859) 213CASHFLOW FROM INVESTING ACTIVITIES (14.470) (44.790) (33.996)

CASHFLOW BEFORE FINANCING ACTIVITIES 34.410 (4.163) (8.305)

FINANCING ACTIVITIES Net increase of investment grants 1.660 0 0 Increase long term debt 15.000 16.566 33.384 Repayments on long term debt (33.189) (22.254) (17.975) Changes in short term fi nancial debt (8.756) 16.451 6.322 Gross dividends and emoluments paid (5.643) (4.818) (4.732)CASHFLOW FROM FINANCING ACTIVITIES (30.929) 5.945 16.999 Translation difference (137) (4.507) (3.146)NET CASH FLOW 3.344 (2.725) 5.547 Cash at beginning of the period 11.443 14.168 8.621 Cash at end of period 14.787 11.443 14.168

Funds fl ow statement

Consolidated companies as of December 31, 2004

73

FULLY CONSOLIDATED SUBSIDIARIES Chair VAT-number Percentage BELGIUMCoatex n.v. Poperinge BE 434.140.425 100,00%European Masterbatch n.v. Bornem BE 421.485.289 100,00%Sioen Coating n.v. Ardooie BE 402.753.106 99,47%Sioen n.v. Ardooie BE 478.652.141 99,47%Sioen Coating Distribution n.v. (1) Ardooie BE 436.241.167 100,00%Sioen Fabrics s.a. Moeskroen BE 458.801.684 100,00%Sioen Fibres s.a. Moeskroen BE 463.789.464 100,00%Siotec b.v.b.a. Ardooie BE 424.304.823 99,47%Tis n.v. Kerksken (Haaltert) BE 405.085.064 100,00%Ver anneman Technical Textiles n.v. Ardooie BE 429.387.623 100,00%Sioen Nordifa s.a. (8) Luik BE 474.276.154 100,00%Inducolor s.a. (9) Meslin-L’Evêque BE 400.685.125 100,00%CHINASioen Shanghai (2) (3) Shanghai - 100,00%GERMANYSioen GmbH Werthe DE 811299457 96,00%Giesemann LKW Planen GmbH (13) Werthe DE 812873033 100,00%FRANCESioen France s.a.s. Narbonne FR 49300774767 99,47%Saint Frères s.a.s. Flixecourt FR 76408448850 99,97%Saint Frères Confection s.a.s. Flixecourt FR 44408449098 100,00%SIP Protection s.a.s. (10) Foix FR 41394215511 100,00%Bacam s.a.s. (12) Flixecourt FR 39443613310 100,00%Pennel Automotive s.a.s. (14) Roubaix FR 53448273615 100,00%IRELANDDonegal Protective Clothing Ltd. (4) Derrybeg IE 4621355M 99,47%INDONESIAP. T. Sioen Indonesia Jakarta - 100,00%P. T. Sungintex Jakarta - 100,00%LUXEMBURGSirec s.a. Luxemburg - 100,00%Monal s.a. (13) Luxemburg - 100,00%PAYS-BASRoland International B.V. (13) Tegelen NL 003812522B01 100,00%POLOGNERoltrans Group Polska SP. Z.O.O. (13) Konin - 100,00%PORTUGALSiofab s.a. (5) Santo Torso NIF 505046644 100,00%TUNESIASioen Tunisie s.a. Tunis - 99,83 %Confection Tunisienne de Sécurité s.a. Tunis - 99,47%Sioen Zaghouan s.a. (6) Zaghouan - 99,50%UNITED KINGDOMSioen UK Ltd. Chorley GB 732.4071.62 100,00 %Mullion Manufacturing Ltd. (7) Scunthorpe GB 365.1873.34 100,00 %Roland Tilts UK Ltd. (13) Bradford GB 311.746.186 100,00 %UNITED-STATESRoltrans Group America Inc. (13) Arlington - 100,00 %

Not consolidated subsidiaries because of minor importance:

JV Roland-Ukraine Ukraine, Rivne - 60,00%Roltrans Group B.V. Nederland,Tegelen - 100,00%Sioen USA Inc. USA, Aberdeen - 100,00%

(1) On December 6, 2000 Sioen Fabrics n.v. was renamed Sioen Coating Distribution n.v. (2) Consolidated from January 10, 2000 onwards. (3) The offi cal name is: Sioen Coated Fabrics Shanghai Trading Ltd. (4) The offi cial name is: Gairmeidi Caomhnaithe Dhun na nGall Teoranta. (5) Consolidated from Juin 6, 2000 onwards. (6) Consolidated from October 17, 2000 onwards. (7) Consolidated from May 15, 2000 onwards. (8) Consolidated from February 28, 20001 onwards. (9) Consolidated from June 27, 2001 onwards. (10) Consolidated from January 31, 2001 onwards. (12) Consolidated from October 3, 2002 onwards. (13) New in the consolidation since March 24, 2003. (14) New in the consolidation since May 1, 2003.

Accounting principles

GeneralThe accounting principles comply with Belgian accounting law, which has been adapted to the provisions of the Seventh EC-Directive.

Consolidation criteriaIn the consolidated annual accounts, the assets and liabilities, rights and commitments, as well as the income and charges of Sioen Industries and its subsidiaries are entirely incorporated in the consolidation.Subsidiaries are companies over which Sioen Industries directly or indirectly has a decisive infl uence.All signifi cant amounts payable to and receivable from those companies, and the transactions between those companies are eliminated in the consolidated annual accounts.

Specifi cThe annual accounts of the consolidated companies have been drawn up in accordance with the following accounting principles and translation rules.

INTANGIBLE ASSETSIntangible assets comprise chiefl y the historical cost of trademarks and software licences. Trademarks are written off over their con-tractual term, if applicable, or over their estimated life cycle, with a maximum of ten years. Software licences are written off over three years from the moment they come into operation.Research and development costs are charged immediately to the results.

CONSOLIDATION DIFFERENCESThe Group acknowledges a consolidation difference on its hol-dings for the positive difference between the historical cost and the value of the net assets acquired, calculated on the basis of the uniform accounting principles of the Group. Insofar as possible, consolidation differences are applied to the relevant assets and/or liabilities.For each participation, the board of directors decides the amorti-sation period of the consolidation differences, according to theestimated period of realisation.In accordance with Article 139 of the Royal Decree of January 30, 2001 this consolidation difference was determined for the

fi rst consolidation at June 30, 1992 on the basis of the value of the net assets as at January 1, 1991, which is the starting date of the fi nancial year concerned by these fi rst consolidated annual accounts. In order to take account of the realisation period of the goodwill paid, this consolidation difference is written off over 20 years according to the straight-line method.

The positive consolidation differences at the acquisition of P.T. Sungintex and TIS n.v. in 1998, of Veranneman Technical Textiles n.v. 1999 and of Inducolor s.a. in 2001, are written off according to the straight-line method over 20 years, because of the size and strategic interest of these acquisitions. The consolidationdifferences of the Roltrans Group, Coatex and Saint-frères Con-fection are written off over 10 years. This because of the strategie importance of these companies.

The consolidation differences of the less strategic acquisitions of Mullion Manufacturing Ltd. in 2000 and of Sip protection and Vidal protection in 2001 are written off over 5 years.

TANGIBLE ASSETSThe land is valued at historical cost, including the additional costs, and is not written off. The other tangible assets are valued at historical cost, including the additional costs. They are written off according to the straight-line method by the percentages shown below.

Assets PercentageBuildings 5% - 10%Plant, machinery and equipment 10% - 20%Vehicles 20%Offi ce equipment and furniture 20% - 33%Assets under construction are not written off

Leasing and other similar obligations are written off by de percen-tages of the linked asset, shown above.

FINANCIAL ASSETSThe fi nancial assets are valued at historical cost. Deprecations are recorded if they are permanent.

Consolidation criteria and accounting principles

75

STOCKSRaw materials and consumables are valued at historical cost or at market price, whichever is lower. The historical cost is deter-mined according to the FIFO method.Work in progress and fi nished goods are valued at prime cost. The prime cost comprises the direct and indirect production costs. Old stocks and stocks with a slow turnover are written down.

RECEIVABLES AND PAYABLESReceivables and payables are valued at nominal value. Receiva-bles are written down if there is uncertainty about their payment on the due date.

PROVISIONSProvisions are being constituted for obligations and all other clearly defi ned risks, of which the existence at closing date is probable or sure and of which the amounts can be accurately estimated. The values are in-cluded if the amounts are due in the long term.The provision for stock option plans is constituted for all granted options for the amount of the value on balance sheet date of the shares included in the option, less the striking price per option.

DEFERRED TAXES AND CONTINGENT TAX LIABILITIESDeferred taxes are recorded on the untaxed reserves and the investment grants, included in the consolidated equity.Contingent tax liabilities are recorded for the future fi scal effect of all temporary differences between the book results and the fi scal results of the consolidated companies.The current tax rates are applied in the calculation of the defer-red taxes and contingent tax liabilities. Deferred tax demands are recognised for the future tax effect of transferable liquid fi scal losses and tax credits, except when the realisation of delayed tax demands is uncertain.

Translation of foreign exchangeThe annual accounts of the foreign companies are translated into EUR as follows:

• the assets and liabilities, except for the capital and reserves, are translated at the exchange rate of the European Central Bank on balance sheet date; • the elements of the capital and reserves are translated at the transaction exchange rate.• the income statement is translated at the average exchange rate of the year.

The difference between the transaction exchange rate and the exchange rate on balance sheet date results in translation diffe-rences, which are directly incorporated in the capital and reserves under the heading “translation differences”.

All receivables and payables in foreign exchange existing at the end of the fi nancial year are valued in the annual accounts of the consolidated companies at the exchange rate on balance sheet date, except for specifi cally hedged sums, which are translated at the contractual exchange rate.

All positive and negative translation differences are incorporated in the income statement.

Appropriation of profi tThe consolidated annual accounts are drawn up after appropria-tion of the profi t of Sioen Industries and before appropriation of the profi t of the subsidiaries.

AS OF DECEMBER 31, 2004

BALANCE SHEETConsolidation DifferencesOn December 31 2004 the consolidation differences amounted to EUR 32,1 million and break down as follows(after depreciation):

(in millions) EUR

First consolidation difference 1,9Consolidation difference acquisition P.T. Sungintex (1998) 1,1Consolidation difference acquisition TIS n.v. (1998) 7,1Consolidation difference acquisition Veranneman TT n.v. (01/10/99) 1,8Consolidation difference acquisition Mullion Manufacturing Ltd. (17/10/00) 0,1Consolidation difference acquisition Vidal s.a.s. (01/02/01) 0,1Consolidation difference acquisition Sip Protection s.a.s. (27/03/01) 0,1Consolidation difference acquisition Inducolor s.a. (29/06/01) 3Consolidation difference acquisition Roltrans Group (24/03/03) 13,8Consolidation difference acquisition Siofab (01/02/03) 0,1Consolidation difference acquisition Coatex (23/12/04) 2,9Consolidation difference acquisition Plastylon (01/04/04) 0,1

Intangible AssetsIntangible assets increased by EUR 1.97 million to EUR 3.1 million.Investment in intangible assets amounted to EUR 1.9 million; primarily the goodwill on the acquisition of Plastylon by Pennel Automative and EUR 0.8 million of software licences. Plastylon specializes in producing vinyl and PVC coverings for sliding and fi xed walls and ceilings. In both 2002 and 2003 it invested EUR 0.7 million in software licences.

Sioen Industries is not signifi cantly bound by any patent or licence.None of the commercial or fi nancial agreements entered into or any of the production processes used could potentially placeSioen Industries in a position of dependency or (negatively)affect its activities or profi tability.

Tangible AssetsIn 2004, tangible assets reduced by a net EUR 11.1 million, com-pared with increases of EUR 8,9 million in 2003 and 16 million in 2002. This reduction breaks down as follows:

(in millions) EURNet investments (1) 7,1Depreciation in 2004 (19,0)Other 0,8

(1) net investments = acquisitions – sales and disposals and the related booking out of depreciation

All land of the important subsidiaries is fully owned andunencumbered

Comments on the consolidated annual accounts

The investments can be allocated to the divisions as follows: (in millions)

2004 2003 2002 2001 2000 1999 1998 1997 1996 EUR EUR EUR EUR EUR EUR EUR EUR EUR

Coating Division 5,5 10,0 25,3 21,8 21,2 20,2 17,6 12,4 10,2Apparel Division 0,9 1,2 3,5 5,3 3,8 4,8 2,3 1,5 0,7Processing Division 0,2 0,3 1,7 0 1,8 3,1 1,7 1,4 0,1Group services 0,5 0,3 0,1 0 0,6 0,2 0,8 0,3 0Total 7,1 11,8 30,6 27,1 27,4 28,3 22,4 15,6 11,0

Overview of the acquisition of participations:(in EUR millions) 2004 2003 2002 EUR EUR EURRoltrans Group 0,0Siofab 0,2Coatex 5,8Plastylon 1,9

77

Chronological overview of major investments

1996 Investment in new transfer coating line at Sioen Fabrics, Mouscron

1997 Completion of the transfer coating line in Mouscron Initial investment in a new weaving mill in Mouscron Investment in the transfer coating line in Mouscron 1998 Investment in Coatex operating building in Poperinge New direct coating line at Saint Frères, France Completion of the weaving mill at Mouscron Initial investment in a new spinning mill at Mouscron (fi xed

assets under construction); Acquisition of TIS n.v., Belgium and PT Sungintex, Indonesia

1999 Investment in the spinning mill Apparel division central dispatching unit in Mouscron. Extension of the EMB operating building in Bornem Replacement investments following fi re damage at the

Coating division at Ardooie in January ’99. Acquisition of Veranneman Technical Textiles n.v. Start up of Sioen UK sales offi ce (Apparel division)2000 Completion of investment in the spinning mill Operational investments in new manufacturing shops in

Tunisia and Indonesia Initial investments to extend the Ardooie site (Building of Veranneman Technical Textiles production shop and Research & Development Centre)

Acquisition of Mullion Manufacturing Ltd., UK Acquisition of Siofab, Portugal; Setting up of Sioen Shang-

hai sales offi ce (Coating division)

2001 Acqusition of Sioen Nordifa S.A., Sip Protection S.A.S.,Vidal S.A.S., Inducolor N.V.

Investment to double capacity at the Sioen Fibres spinning mill at Mouscron

the new transfer coating line at Sioen Fabrics, Mouscron R&D-centre at Sioen N.V. in Ardooie New looms at Veranneman Technical Textiles, Ardooie 2002 Completion of capacity doubling at the Sioen Fibres spin-

ning mill, Mouscron Completion of new transfer coating line at Sioen Fabrics, Mouscron

New extrusion line, Ardooie Acquisition of Bacam (EUR 0.3 million), France 2003 Additional looms Sioen Fabrics, Mouscron Extrusion line, Ardooie Acquisition of Pennel Automotive and Roltrans Groep 2004 Additional looms Tis Machinery and infrastructure Pennel Automotive Modernization of coating line at Saint Frères, France

Net investments 1994 – 2004(in millions) 2004 2003 2002 2001 2000 1999 1998 1997 1996 EUR EUR EUR EUR EUR EUR EUR EUR EURLand and buildings 1,0 2,4 1,9 3,5 5,1 4,4 4,4 6,2 2,1Equipment / machinery 4,8 8,5 8,7 10,0 19,8 10,0 8,4 8,4 8,3Furniture / rolling stock 1,1 0,9 0,6 0,8 1,5 0,6 1,0 1,0 0,6Leasing 0,1 0,0 3,8 0 0,2 9,2 0,4 - -Immovable assets under construction 0,1 0,0 15,6 12,8 0,8 4,1 8,2 - -Total investments equipment immovable assets 7,1 11,8 30,6 27,1 27,4 28,3 22,4 15,6 11,0 Acquisitions / participations 0 16,4 0 7,1 0,7 4,5 14,1 - 0,1

Working capital(1)

(1) Working capital = fi nancial fi xed assets + current assets (excl. cash deposits and cash at bank and in hand) - non-fi nancial amounts payable within one year – accrued changes and deferred income.

By careful management of this area, Sioen has succeeded in reducing its working capital to 28.3% of turnover in 2004 from 39.9% in 2003 and 49.9% in 2002. Working capital fell by a spectacular 18.9% in 2004 to EUR 88.3 million, after reducing by 8.1% to EUR 108.9 million in 2003 and by 1.2% to EUR 118.5 million in 2002.

Trade debtors rose by 6.4% in 2004, compared with a fall of 13.99% in 2003 and a rise of 5.5% in 2002. This item now represents 20.3% of the balance sheet total (18.2% in 2003 and 22.1% in 2002).

With an active policy of maintaining control of working capital, inventories on the other hand fell by 10.1%, compared with a16.6% rise in 2003 following the major acquisitions of that year.They now represent 21.8% of total assets they fell to 21.8% compared with 23.2% in 2003 and 20.8% in 2002. ), this due

to an active working capital policy. ‘Trade debts payable within one year’ rose by 24.5% (2003: + 2%; 2002: - 3.7%). This too refl ects the move to control working capital, the intention being to achieve a relative balance between trade receivables and trade debts. The other debts increased with 6 million EUR compared to 2003, mainly due to the acquisition of Coatex. Short-termfi nancial debts fell to EUR 39.8 million (2003: 48.8 million; 2002: 32.1 million).

Capital and reservesAt December 31, 2004, the capital of Sioen Industries n.v. consi-sted of 21,391,070 ordinary shares without nominal value. Both the capital and the number of shares remained unchanged in 2004. After payment of the proposed dividend by the parent company, capital and reserves at December 31, 2004 amount to EUR 129.2 million (2003: EUR 123.5 million; 2002: EUR 125.3 million).The investment grants consist mainly of subsidies from the Wal-loon Region for the investments in the weaving mill (38% of the total investment amount) and the spinning mill (17% of the total investment) in Mouscron. An additional investment grant of EUR 1.6 million from the Walloon Region was recorded for a coating

History of the capital(1)

Date Type of transaction Amount of Number of shares the nominal capital

03/09/1990 Establishment 230.000.000 BEF 23.00014/11/1991 Capital rise 363.000.000 BEF 36.30013/09/1996 Share division per 55 363.000.000 BEF 1.996.50009/10/1998 Capital rise in cash 1.853.243.150 BEF 2.139.10705/11/1998 Share division per 10 1.853.243.150 BEF 21.391.07004/02/1999 Capital rise through incorporation of the reserve 1.855.635.400 BEF 21.391.07004/02/1999 Conversion in EUR 46.000.000 EUR 21.391.070(1) Information based on the coordinated bye-laws updated up to 30 April 2003.

Risk spread of customers (000 EUR) Outstanding Turnover 2004 2003 2004 2003Customer A 4.593 7% 5.583 9% 12.513 4% 11.705 4%Customer B 1.634 2% 1.655 3% 4.258 1% 1.996 1%Customer C 1.346 2% 1.351 2% 2.815 1% 4.064 1%Customer D 1.233 2% 1.120 2% 4.610 1% 2.777 1%Customer E 1.016 2% 805 1% 3.464 1% 2.828 1%Other 57.400 85% 52.679 83% 283.951 86% 249.416 92%Total 67.220 100% 63.194 100% 311.611 100% 272.787 100%

Due to the relative concentration of creditrisks as shown above, the company has decided to cover the risks as from 1/4/2005 with a stop loss credit insurance.

line in Mouscron. The investment grants item rose by a net EUR 0.2 million.EUR 2.6 million of deferred taxation in respect of the investment grants is recorded under liabilities heading IX.B.

Interests of third partiesAt the end of fi nancial year the company bought out the 25% minority shareholders in Coatex, Saint Frères Confection andBacam. Minority interests at December 31, 2005 were still EUR 2.3 million. The minority interest in the net profi t for 2004 is EUR 0.8 million.

ProvisionsThe 2.3 million of provisions for other liabilities and charges consistmainly (EUR 0.9 million) of provisions in TIS n.v. relating to legacyenvironmental risks from before the takeover.Other environmental risk provisions have been set up at Sioen Coating n.v. (EUR 0.2 million) and at SIP Protection (France) (EUR 0.2 million). A EUR 0.54 million provision has been set up at Giesemann (Roltrans Group) for redundancy payments.No provisions needed to be set up in respect of allocations under the 1999 and 2000 share option plans.The provision for taxes (EUR 1.7 million) consisted of expected assessments following a dispute with the tax authorities over the deductibility of insurance premiums paid to cover certain risks. Following a settlement with the tax authorities, this provision has been reversed via the operating charges account and the EUR 1.0 million actual cost of the settlement recorded under ‘taxes’.

PROFIT-AND-LOSS ACCOUNTTurnover and other returnsIn 2004 the Sioen Industries group achieved a turnover of EUR 311.6 million compared with EUR 272.8 million in 2003(+14.23%) and EUR 237.7 million in 2002 (+ 14.75%). The growth consists of 8.65% of internal growth (2003: 2.5%) and 5.58% of external growth (2003: 12.25% with the acquisition of the Dutch-Polish Roltrans Group and the Northern French com-pany Pennel Automotive, included in the consolidation from 1 April and 1 May 2003 respectively).France remains the largest sales market (20.9% in 2004, 21.4% in 2003 and 21.9% in 2002), followed closely by Benelux (19.9% in 2004, 21.0% in 2003 and 23.5% in 2002).Germany’s share has risen by 3.1% to 19.3% (2003: 16.2%; 2002: 12.2%), whilst those of the United Kingdom (8.9%), Italy (4.7%) and Scandinavia (2.8%) have remained pretty much stable. At 7.3%, the share of the Eastern bloc countries (2003:

8.2%) is back to the level of 2002 (7.2%).Other operating income fell to EUR 2.2 million, compared with EUR 5.0 million in 2003, due to compensation paymentsfollowing the fi re at EMB in Bornem in June 2003, as well as subsidies and lease payments, and EUR 1.8 million in 2002.

Operating profi tThe gross margin in 2004 was 51.69% of turnover, compared with 54.99% in 2003 and 52.49% in 2002. Whereas the rise in 2003 was due mainly to a changing sales mixed in the Apparel division and cheaper USD purchases at our Indonesian facility, the following parameters played a major role in 2004:

- To complete the product range and to secure our commercial position, “low end” products were imported from the Far East and marketed here at competitive prices.- The prices of the group’s main raw materials spiralled in 2004 to their highest level for 5 years.- The sales mix has also shifted signifi cantly. In 2004 Pennel and Roltans, both companies with traditionally lower gross margins, were consolidated for the full 12 months. The shift in Coatex’s status from service provider to subcontractor, where both raw materials and services being invoiced, has also had an effect.

At EUR 29.8 million operating profi t is up 9.44% compared with 2003 (2003: +10.7% to EUR 27.2 million).Operating cash fl ow or EBITDA is EUR 49.8 million or 16% of turnover, compared with EUR 52.8 million or 19% of turnover in 2003 and EUR 42.8 million in 2002.The slight fall of 5.7% in 2004 is due entirely to the changing competitive environment and the resulting fall in the gross mar-gin as a percentage of turnover.Services and other goods rose from EUR 34.2 million in 2002 to EUR 43.6 million in 2003 to EUR 50.0 million in 2004.The EUR 6.3 million rise in 2004 is due to the variable nature of these costs in line with turnover and the fact that Pennel and Roltrans are consolidated for the fi rst time for a full 12 months.

In 2003 the Pennel and Roltrans acquisitions occasioned ad-ditional charges, both fi xed and variable, of EUR 1.6 million and 3.9 million respectively. In 2003 the fi re at EMB generated ad-ditional costs of EUR 1.1 million (fully covered by insurance). The EUR 1 million rise in energy costs refl ects the doubling of production capacity at the yarn extrusion plant. Rising turnover is obviously refl ected also in rising transport costs and higher agent commissions.

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Stocks and trade debtors were written down by EUR 0.98 million in 2004 compared with EUR 3.4 million in 2003.Last year a new and stringent assessment system was introdu-ced. In 2003 this produced a catch-up effect (EUR 3.4 million) before reaching cruising speed in 2004. The total reduction in value in the balance sheet is now EUR 10.3 million compared with EUR 9.3 million in 2003.

As mentioned above, the infl uence on the operating profi t amounts to 1,7 million EUR.

It should be noted that in recent years all start-up costs ofongoing investment programmes, including intercalary interest, have been charged to income in the year incurred. All research and development costs of new products are charged immedia-tely in the year incurred.

Financial resultThe fi nancial result (excluding consolidation goodwill amortiza-tion) amounts to EUR – 7.7 million compared with EUR – 8.2 million in 2003 and EUR – 7.2 million in 2002). This change refl ects the group’s changing net debt position, with average net fi nancial debt down 20% to EUR 117.6 million compared with EUR 148.1 million in 2003 (2002: EUR 134.6 million). Consolidation goodwill amortization rose to EUR 3.1 million (2003: 2.8 million; 2002: EUR 1.3 million), owing to the in-clusion of Roltrans Group and Pennel Automotive for a full 12 months The increase in 2003 relates to the goodwill on the ac-quisition of the Roltrans Group, the remaining 20% in Siofab and Pennel Automotive.The net carrying value of the goodwill associated with the Roltrans Group amounted at December 31, 2004 to EUR 13.8 million.

Income taxesThis year taxes amount to around EUR 4.4 million compared with EUR 7.4 million in 2003 and 4.6 million in 2002.The fall in 2004 is due mainly to the recognition of carryforwar-dable tax losses (carried as deferred tax assets) of the Roltrans group in an amount of EUR 3.2 million. The existence of these carryforwards means that no tax will be payable on future taxable profi ts of the Roltrans group.The present and future operating profi ts of the Roltrans group justify the recognition of this tax assets.In 2004 the Roltrans group already produced a positive operating result and is expected in 2005 to make a signifi cant contribu-tion to group profi t. This had the effect of reducing the effective

consolidated rate to 26.3% in 2004 compared with 45% in 2003 (owing to the 2003 losses of the Roltrans Group) and 30% in 2002.

Net resultThe net profi t for 2004 amounts to EUR 12.4 million compared with EUR 8.9 million in 2003 and 10.4 million in 2002.The restructuring of the Roltrans Group depressed profi ts by EUR 6.2 million in 2003 and, to a lesser extent, by EUR 2.2 million in 2004.Cash fl ow, calculated on the basis of net profi t, fell slightly in 2004 to EUR 36.0 million, compared with EUR 37.3 million in 2003 and 30.2 million in 2002.

Funds fl ow statementOperating capital needs fell substantially in 2004 to EUR 88.3 million compared with EUR 108.9 million in 2003 and 118.5 million in 2002.As a percentage of turnover, working capital was down to 28.3% compared with 40% in 2003 and 50% still in 2002.Inventories, trade debtors and trade debts changed by -10%, +6.4% and +24.5% respectively (2003: +16.6%, -13.99% and +2.0%).Cash needs for investments in fi xed assets reduced by a further 25% to EUR 9.1 million (2003: reduction of 65.8% to EUR 12.0 million from EUR 34.4 million in 2002).The change in consolidation scope result brought with it an addi-tional EUR 1.9 million (2003: EUR 16.4 million) of tangible and intangible fi xed assets and EUR 3.9 million of goodwill (2003: EUR 15.9 million). The free cash fl ow of EUR 34.4 milliongenerated in 2004 served primarily to reduce the group’s debtposition.In so doing, increasing the solvency ratio (capital and services/total assets) to 38.9% (35.6% in 2003 and 37.7% in 2002). The net cash position rose by EUR 3.3 million to EUR 14.7 million.

81

VI. VALUATION RULES AND METHODS FOR CALCULATING CONTINGENT TAX LIABILITIESb) Deferred taxation and contingent tax liabilities 2004 2003 2002 Breakdown of liabilities item 168 5.270 6.549 6.762 Deferred taxation 1.841 2.034 3.223 Contingent tax assets (5.398) (2.979) (2.831) Contingent tax liabilities 8.827 7.494 6.370

The consolidated reserves contain as of 31/12/2004 an amount of EUR 13.5 million of tax-exempt reserves, which are held in Sirec s.a. These reserves are intended to be invested and held long-term in Luxembourg. For these reason no deferred taxes are calculated on this sum. Contingent tax assets of EUR 4.6 million are recognized on tax carryforwardable losses.

VIII. STATEMENT OF INTANGIBLE FIXED ASSETS (in thousands) Concessions, patents, licenses, etc. Goodwill EUR EURa) At cost At December 31, 2003 5.524 693 Changes for the year Expenditure 810 1.875 Sales and disposals (52) 0 Tranfers from one heading to another 1.808 75 Translation differences (8) 0 At December 31, 2004 8.082 2.643b) Amortisation and depreciation At December 31, 2003 4.990 90 Changes for the year Charge for the year 553 406 Booked out after sales and disposals (3) 0 Tranfers from one heading to another 1.570 15 Translation differences (4) 0 At December 31, 2004 7.106 511d) Net book value at December 31, 2004 976 2.132

Notes to the consolidated accounts

AS OF DECEMBER 31, 2004

83

IX. Statement of tangible fi xed asset(in thousands) Land and Plant, Furniture buildings machinery and and vehicles equipment EUR EUR EURa) At cost At December 31, 2003 60.650 151.069 12.329 Changes for the year Capital expenditure 1.316 5.051 1.337 Sales and disposals (470) (453) (533) Transfers 4.714 (5.697) (900) Translation differences 249 0 (90) Other changes(1) 791 (40) 0 At December 31, 2004 67.250 149.930 12.143

b) Revaluation surpluses At December 31, 2003 951 Changes for the year 0 At December 31, 2004 951

c) Depreciation and amortisation At December 31, 2003 18.204 80.962 9.719 Changes for the year Changes for the year 5.679 10.631 1.259 Depreciation for the year (155) (206) (379) Transferred to other headings 215 (879) (848) Translation differences 42 (273) 16 At December 31, 2004 23.985 90.235 9.767

d) Net book value at December 31, 2004 44.216 59.695 2.376

(1) Changes resulting from changes to the consolidation scope.

IX. STATEMENT OF TANGIBLE FIXED ASSET Leasing and other tangible Assets under(in thousands) other similar assets construction and rights advance payments EUR EUR EUR a) At cost At December 31, 2003 21.357 7.675 6 Changes for the year Capital expenditure 171 145 Sales and disposals (768) Translation differences 22 At December 31, 2004 20.782 7.675 151b) Revaluation surpluses At December 31, 2003 4.617 Changes for the year At December 31, 2004 4.617c) Depreciation and amortisation At December 31, 2003 4.801 2.712 Changes for the year Changes for the year 1.356 230 Depreciation for the year (695) Transferred to other headings (73) Translation differences 5 At December 31, 2004 5.394 2.942 d) Net book value at December 31, 2004 15.388 9.350 151 Of which buildings 15.388 9.350X. STATEMENT OF FINANCIAL FIXED ASSETS (in thousands) Other investments EUR 2. Amounts receivable Net book value at December 31, 2003 1.129 Changes for the year Additions 80 Repayments (500) Net book value at December 31, 2004 709

XIII. STATEMENT OF AMOUNTS PAYABLE A. Analysis of the amounts originally payable after one year according to their residual term (in thousands) EUR % Financial debts Debts falling due in 2005 24.293 26% 2006 21.917 24% 2007 17.821 19% 2008 11.177 12% 2009 5.991 6% 2010 2.534 3% 2011 and later 8.938 10% Total amount at December 31, 2004 92.672 100%

Analysis of amounts payable by currency The majority of debts are in EUR. As a result, the fi nancial debts are not infl uenced by exchange rates. Average interest rate The average interest rate of all outstanding fi nancial debts amounts to 4,90%. B. Amounts payable guaranteed by real guarantees given or irrevocably promised on the assets of the enterprises included in the consolidation.

Financial debts 3. Leasing debts 15.291

85

XI. CONSOLIDATED STATEMENT OF CHANGES IN RESERVES AND RETAINED EARNINGS (in thousands) EUR At December 31, 2003 79.774 Changes for the year Profi t for the year 11.553 - Dividends declared 2004 (4.706) - Director’s fees Sioen Industries n.v. 2004 (175) - Director’s fees Confection Tunisienne de Sécurité s.a. 2004 (1.080) - Translation differences of CTS and Sioen Zaghouan, taken into reserves (971) At December 31, 2004 84.395(1) due to the switch in functional currency from TND to EUR

XII. STATEMENT OF CONSOLIDATION DIFFERENCES (in thousands) EUR Net book value at December 31, 2003 31.263 Changes for the year Increase in participation percentage 2.883 Amortisation (3.085) Other 1.000 Net book value at December 31, 2004 32.061 (2) Reclassifi cation due to the acquisition of the Roltrans Group

XIV. RESULTS OF OPERATIONS A. Consolidated sales 2004 2003 2002 Per division (in millions) EUR EUR EUR Coating Division 172,0 151,6 139,7 Apparel Division 68,2 71,5 71,9 Processing Division 71,4 49,6 26,0

Geographically (in millions) EUR EUR EUR Benelux 62,1 57,4 55,8 France 65,3 58,4 52,1 Germany 60,2 44,1 28,9 United Kingdom 27,8 24,3 20,2 Italy 14,6 13,4 12,3 Eastern Europe 22,9 22,3 0,0 Other 58,7 52,8 68,4 B. Personnel 2004 2003 2002 EUR EUR EUR Personnel charges (in thousands) 58.990 54.474 47.048

Average number of employees (in units) 2004 2003 2002 Average number of employees 4.553 4.214 4.271 Blue collars 3.711 3.611 3.686 White collars 812 573 551 Management 30 30 34 Average number of persons employed in Belgium by companies of the group 872 811 758 Personnel, active in Research and Development 17 17 17 Personnel per division and per country as of December 31, 2004 (in units) Group Coating Confectie Processing Total Division Division Division Belgium 49 543 156 124 872 China 14 14 Germany 1 30 31 France 183 59 48 290 Ireland 37 37 Indonesia 1.921 1.921 The Netherlands 14 14 Poland 531 531 Portugal 23 23 Tunesia 725 725 United Kingdom 23 10 33 United States 9 9 Total 49 764 2.921 766 4.500

87

C. Depreciation 2004 2003 2002 (in thousands) (EUR) (EUR) (EUR) Positive consolidation differences 3.085 2.783 1.482 Other fi xed assets 20.114 19.322 18.302 Total 23.199 22.105 19.784 D. Extraordinary results Other extraordinary charges: reorganisation costs Roltrans Group. 1.919 XV. RIGHTS AND COMMITMENTS NOT REFLECTED IN THE BALANCE SHEET 2004 2003 2002 (in thousands) (EUR) (EUR) (EUR) A. 2. Amount of real guarantees, given or irrevocably promised by the enterprise included in the consolidation on their own assets, as securety for debts and commitments: - of enterprises included in the consolidation 0 15.555 0

- of third parties 0 0 20.874(1) A. 5. a) Rights from transactions to exchange rates 2.176 10.142 0

A. 5. b) Commitments from transactions to exchange rates 4.714 14.199 0 D. Commitments with respect to retirement and survivors’ pensions in favour of their personnel or executives, at the expense of the enterprises included in the consolidation

In the belgian companies, a group insurance was taken, completely charged to consolidated companies. Due to french legislation, there is a pension obligation in the french subsidiaries.

(1) Credit facility in favor of the Roltrans Group. The group does not use fi nancial derivatives.

XVI. FINANCIAL RELATIONSHIPS WITH DIRECTORS OR MANAGERS OF THE CONSOLIDATING COMPANY The 2003 remuneration granted to the directors of Sioen Industries (director’s fees included) for their responsibilities in the consolidating company and its subsidiaries amounted to 1,9 million EUR, the remuneration of fi ve directors assuming management responsibilities in the group included.

Impact of the transition from Belgian fi nancial reportingprinciples to IFRSEuropean Regulation 1606/2002 adopted on July 19, 2002, requires all listed European enterprises to draw up their consoli-dated fi nancial statements in accordance with IFRS (International Financial Reporting Standards), as approved by the European Commission. Sioen Industries has opted to show one year’s comparative information in the fi rst consolidated fi nancial state-ments drawn up under IFRS.For this reason the transition date to IRFS has been set at January 1,2004. In order to be able to show this comparative information, the opening balance sheet as of January 1, 2004 according to Belgian accounting principles (“BGAAP”) needs to be restated to produce an IFRS opening balance sheet as of the same date. The effects of this restatement are recorded in equity in the IFRS opening balance sheet.The IFRS balance sheet is based on all standards and interpre-tations approved by the European Commission as of December 31, 2004.

Basic for preparing the IFRS opening balance sheetFor the transition to IFRS, Sioen Industries has opted to apply IAS 32 – Financial Instruments: Disclosure and Presentation and IAS 39 – Financial Instruments: Recognition and Measurement to the opening balance as of 01/01/2004, although these standards were not yet formally approved at that date.

Exemption from other IFRSIn accordance with IFRS 1- First-time Adoption of IFRS, the ope-ning balance is drawn up by applying retroactively the IFRSs in force at the reporting date. IFRS 1, however, allows companies to avail of certain exceptions. Sioen Industries is availing of the following exceptions:

- Business combinations which predate the transition date do not need to be retroactively restated.

- Certain tangible fi xed assets have been valued at market. This market value is used as the supposed cost price.

- Cumulative actuarial profi ts and losses are recognized in equity at the transition date. After the transition date, Sioen Industries will continue to apply the present “corridor approach”.

- Previously recognized translation differences arising from the translation into euros of the foreign currency-denominated fi -nancial statements of foreign entities are reversed to zero.

- Payments based on shares. Sioen Industries has opted not to apply IFRS 2 for instruments allotted prior to November 7,

2002. As at December 31, 2004, no equity instruments had been allotted after November 7, 2002.

Impact of the transition on the consolidated balance sheet as of January 1, 2004.Equity (“capital and reserves”), including minority interests ac-cording to BGAAP amounted to EUR 125.8 million. In the IFRS opening balance sheet, equity is restated at EUR 116.4 million.The reduction of EUR 9.4 million is explained in the reconciliation table and explanations below.

Reconciliation of BGAAP and IFRS equity fi gures as of the transition date

Consolidated equity including minority interests (BGAAP) as on 01/01/2004 125,809Intangible assets - 278 (1) Goodwill - 452 (2) Goodwill Roltrans Group - 19.945 (3) Tangible fi xed assets (KEUR 69,250)Investment grants - 5.824 (5) Long-term amounts receivable - 1,011 (6)Inventories - 1.914 (7) Provisions - 732 (8) Deferred tax assets 7,395 (9)Deferred tax liabilities - 14,472 (10)Dividends and directors’ entitlements 4,278 (11) Other adaptations - 8 (12)

Consolidated equity including minority interests (IFRS) as of 01/04/2004 116,359

(1) Intangible fi xed assetsPatents and licences recognized under BGAAP are, according to IAS - 38 - Intangible assets - no longer recognized where these are internally generated. (2) GoodwillGoodwill All goodwill (consolidation differences) is allocated to “cash generating units” in a reasonable and consistent fashion. In accordance with IFRS 3 –Business combinations, goodwill will not longer be amortized. Goodwill will, however, be tested annu-ally for “impairment” in accordance with IAS 36 – Impairment of assets. Prior to the transition to IFRS all goodwill as recorded and recognized according to BGAAP was subjected, as required by IFRS 1, to an impairment test. This resulted in a negative equity impact of EUR 0.5 million (before tax impact).

IFRS

89

(3) Goodwill on Roltrans Group According to BGAAP and the board decision of May 28, 2004, Sioen Industries had no control over Roltrans Group during the period prior to 24/02/2003. For this reason goodwill continued to be recorded and amortized in the 2003 BGAAP annual ac-counts.IFRS applies stricter standards than BGAAP to the consolidation scope. According to SIC 12 – Consolidation - Special Purpose Entities Roltrans Group met the defi nition of a special purpose entity. For this reason the Roltrans Group must, according to IAS 27 - Consolidated Statements and Accounting for Investments in Subsidiaries, be included retroactively in the Sioen Industries consolidation scope, from 1999 onwards. Given that the Roltrans Group had zero equity at that time, the goodwill recorded under BGAAP is not longer recognized in the IFRS opening balance sheet. (4) Tangible fi xed assetsIn accordance with IFRS 1 – First-time Adoption of IFRS, the com-pany has opted to value certain tangible fi xed assets at market at the transition date and to take this value as the assumed cost price. Land in Belgium, France and Poland has been valued based on valuations by qualifi ed real estate experts. The use of this option, in conformity with IFRS, has an equity impact of EUR 8 million (before tax impact).IAS 16 – Tangible Fixed Assets states that when a signifi cant fi xed asset consists of several parts having differing useful lives, these parts are to be depreciated separately (“component approach”). Based on a detailed screening of the group’s tangible fi xed as-sets, the signifi cant parts have been identifi ed and depreciated over their estimated useful life. Application of this principle has a EUR 15.5 million positive equity impact (before tax impact).(5) Investment grantsInvestment grants of EUR 5 million, which are included in the Belgian fi nancial statements under equity, are, in accordance with IAS 20 – Accounting for Government Grants and Disclosure of Government Assistance, reclassifi ed by deducting them from the tangible fi xed assets in respect of which they were obtained. The “components approach” also applies to tangible fi xed assets for which government grants have been obtained. This adjust-ment has a EUR 0.8 million negative impact on equity (before tax effect).(6) Long-term amounts receivableA long-term receivable of EUR 1.8 million was, on transition to IFRS, viewed as fi nancial leasing. Given the estimated residual value of the underlying fi xed asset, EUR 1 million needs to be booked out (before tax impact).

(7) InventoriesUnder IAS 2 – Inventories, the book value of inventories under BGAAP needs to be reduced by EUR 1.9 million (before tax im-pact). (8) ProvisionsThe group has certain pension obligations, in particular in France where these are required by law. These obligations qualify as defi ned benefi t plans under IAS 19, leading to the recognition of EUR 0.7 million (before tax impact) in the opening balance.(9) Deferred tax assetsUnder IAS 12 – Income taxes, deferred taxes are calculated on temporary differences between the fi nancial book value for tax purposes and the book value in the fi nancial statements. Apply-ing this standard results in the recognition of an additional EUR 7.4 million of deferred tax assets.Latent tax assets are to be recognized in so far as it is probable that taxable profi ts will be available to offset against the offset-table temporary difference.(10) Deferred tax liabilities Deferred tax liabilities are recorded in an amount of EUR 14.5 million, primarily on impacts identifi ed in the context of the tran-sition from BGAAP to IFRS.(11) DividendsContrary to Belgian principles, IAS 10 - Events after the Balance Sheet Date requires dividends to be recognized as short-term liabilities only when approved by the General Meeting of Share-holders. Short-term liabilities have therefore been reduced by EUR 4.3 million.(12) Other adaptationsFor reasons of immateriality Roland Ukraine and Sioen USA are not consolidated under BGAAP. It has been decided to include these entities in the consolidation group in the IFRS opening ba-lance sheet, with a negative impact of EUR 8,000 on equity.

91

statutory annual accounts

OF SIOEN INDUSTRIES N.V.

condensed balance sheet of Sioen Industries n.v. after appropriation of profi t

(in thousands) 2004 2003 2002December 31 (000) EUR (000) EUR (000) EUR

Fixed assets 81.976 81.990 56.531II. Intangible fi xed assets 3.477 3.472 3.989III. Tangible fi xed assets 681 555 504IV. Financial fi xed assets 77.818 77.963 52.038 Current assets 139.630 136.381 132.578

VII. Amounts receivable within 1 year 139.207 136.205 125.800IX. Cash at bank and in hand 286 46 6.544X. Deferred charges and accrued income 137 130 234

Total assets 221.606 218.371 189.109

Capital and reserves 80.052 79.660 69.265

I. Capital 46.000 46.000 46.000IV. Legal reserves 3.174 2.910 2.167V. Profi t brought forward 30.878 30.750 21.098 Creditors 141.554 138.711 119.844

VIII. Amounts payable after 1 year 60.284 61.828 68.831IX. Amounts payable within 1 year 81.107 76.784 50.787X. Accrued charges and deferred income 163 99 226

Total liabilities 221.606 218.371 189.109

The statutory annual accounts of the parent company Sioen Industries n.v. are shown below in condensed form. In June 2005, the annual report and annual accounts of Sioen Industries n.v. and the auditor’s report have been fi led with the National Bank of Belgium in accordance with Articles 98-102 of the Companies Act.These reports are available on requestat the following address:Sioen Industries n.v. - Fabriekstraat 23 - 8850 Ardooie.

The statutory auditor has issued an unqualifi ed opinion with explanatory paragraph on the statutory fi nancial statements of Sioen Industries NV. The explanatory paragraph is as fol-lows:

Without qualifying the unqualifi ed opinion expressed above, we draw the attention to the annual report. Sioen Industries NV has per Decem-ber 31, 2004, a total outstanding receivable of 18,4 mio EUR on the Roltrans group, a 100% subsidiary of Sioen Industries NV. In addition, Si-oen Coating Distribution NV, a 100% subsidiary of Sioen Industries NV, has outstanding receivables on the Rol-trans group for an amount of 16,9 mio EUR. The realisation of these amounts is dependent of the further successful development of the reali-sed recovery plan. The accompanying fi nancial statements do not included any less values or provisions relating to the above.

93

condensed income statement of Sioen Industries n.v. (in thousands EUR) 2004 2003 2002 Years ended December 31 (000) EUR (000) EUR (000) EUR

I. Operating income 5.599 5.229 5.528 A. Turnover 5.317 5.010 5.383 D. Other operating income 282 219 145

II. Operating charges (5.886) (5.075) (4.934) B. Services and other goods 2.325 1.762 1.545 C. Remuneration 2.579 2.256 1.986 D. Depreciation and amounts written off 901 1.023 1.392 G. Other operating charges 81 34 11

III. Operating profi t / loss (287) 154 594 IV. Financial income 15.758 21.201 19.433 V. Financial charges (6.531) (6.012) (5.058)

Financial result 9.227 15.189 14.375 Profi t on ordinary activities 8.940 15.343 14.969 Extraordinary result (3.596) - - Profi t before tax 5.344 15.343 14.969 Income taxes (71) (495) (766) Profi t for the fi nancial year 5.273 14.848 14.203

Activity of Sioen IndustriesThe function of Sioen Industries is essentially to outline the stra-tegy of the three divisions. It also appoints the management of the Group companies and supports the Group companies in the areas of personnel management, fi nancial and treasury manage-ment, budgeting and controlling, MIS and IT, and legal affairs.

CommentsThe turnover of the holding company increased by 6.1% to EUR 5.3 million. The other operating income rose to EUR 0.28 million (2003: EUR 0.22 million; 2002: 0.145 million). In 2004 the company posted an operating loss of EUR 0.287 million compa-red with operating profi ts of EUR 0.154 million in 2003 and EUR 0.594 million in 2002. The fi nancial result fell to EUR 9.2 million compared with EUR 15.2 million in 2003, due to lower dividendpayments from various subsidiaries. Interest charges decreaseddue to the reduction in short-term loans that are onlent tovarious subsidiaries and on which Sioen Industries receivesinterests. The extraordinary result includes a EUR 3.2 millionpermanent write-off on participations of TIS.

Accounting principlesThe accounting principles and translation rules applied to the sta-tutory annual accounts of Sioen Industries are the same as those used for the consolidated annual accounts.

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

Notes

Situation as of Mai 1, 2005

Notifi er Date of Number of Percentage of total Notifi cation Shares(1) Number of shares(4)

Sihold n.v.,(2) Fabriekstraat 23, 8850 Ardooie October 18, 1996 13.365.010 62,5 % Mercator Verzekeringen n.v.,(3)

Kortrijksesteenweg 302, 9000 Gent Notice of change of quota February 21, 2005 599.990 2,8 % Sihold n.v. en Mercator Verzekeringen n.v.Total number of shares in notifi cation 13.365.010 62,5 %Total number of shares 21.391.070 100,0 %

(1) Number of shares recalculated after the split in 10 on November 5, 1998.(2) Sihold n.v. is controlled by Sicorp n.v., which is controlled by Stichting Administratiekantoor Midapa, a foundation according to Dutch law, which in turn is controlled by the Sioen family.(3) Mercator Bank en Verzekeringen n.v is controlled by Bâloise (Luxembourg) Holding s.a.,1, rue Emile Bian, 1235 Luxembourg.(4) The percentage was recalculated after the capital increase and the split of the shares. The shareholders concerned confi rmed to us that this notifi cation still corresponds to the percentages mentioned.

Commissioner’s report

95

To the Shareholders,

In accordance with the legal and statutory requirements, we are pleased to report to you on our audit assignment which you have entrusted to us.

We have audited the consolidated fi nancial statements as of and for the period ended 31 December 2004 which have been prepared under the responsibility of the Board of Directors and which show a balance sheet total of 331.785 (000) EUR and an income statement resulting in a profi t (group share) for the year of 11.553 (000) EUR. We have also examined the consolidated directors’ report.

These consolidated fi nancial statements include several signifi -cant subsidiaries whose accounts have been examined by other auditors. The assets of these companies represent 15% of total consolidated assets as at 31 December 2004. These subsidia-ries’ contribution to the consolidated result (Group’s share) re-presents 20% in 2004. Our opinion on the consolidated fi nancial statements, to the extent they relate to the fi gures of these subsi-diaries, is exclusively based on the reports of other auditors.

Qualifi ed opinion on the consolidated fi nancialstatementsWe conducted our audit in accordance with the standards of the “Institut des Reviseurs d’Entreprises/Instituut der Bedrijfsreviso-ren”. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements are free of material misstatement taking into account the legal and statutory requirements applicable to con-solidated fi nancial statements in Belgium. As far as the additional note covering the transistion from Belgian accounting principles to International Fiancial reporting Standards (IFRS) is concerned, we performed a limited review based on the subsidiaries‘ records made available at Sioen Industries NV’s head offi ce .

In accordance with these standards, we considered the group’s administrative and accounting organization as well as its internal control procedures. We have obtained explanation and informa-tion required for our audit. An audit includes examining, on a test basis, evidence supporting the amounts in the consolidated fi nancial statements. An audit also includes assessing accoun-

ting policies used, the basis for consolidation and signifi cant es-timates made by management as well as evaluating the overall consolidated fi nancial statements presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.

In our opinion, based upon the reports of other auditors, and except for the effect the recognition of goodwill for an amount of 19,4 Mio EUR (before allocation to land and buildings) resul-ting from the formal acquistion in 2003 of the Roltrans group as described in our report dated 28 May 2004 on the consolidated fi nancial statements as of and for the period ended 31 Decem-ber 2003, the consolidated fi nancial statements give a true and fair view of the group’s assets, liabilities, consolidated fi nancial position as of 31 December 2004, and the consolidated results of its operations for the year then ended, and the information given in the notes to the fi nancial statements is adequate.

The consolidated directors’ report contains the information re-quired by the Company Law and is consistent with the consoli-dated fi nancial statements.

23 March 2005

The Statutory Auditor

DELOITTE & PARTNERS Reviseurs d’EntreprisesSC s.f.d. SCRLRepresented by Guy Wygaerts and Geert Verstraeten

proposals to the Annual Meeting of Sioen Industries n.v. of May 27, 2005

The board of directors of Sioen Industries proposes to the annual meeting to approve the annual accounts at December 31, 2004 and to consent to the appropriation of profi t.

The profi t for the fi nancial year ended is 5.273.005,05 EUR, compared to a profi t of 14.847.649,47 EUR for the fi nancial year 2003. The profi t brought forward from the previous fi nancial year is 30.750.468,34 EUR. The profi t available for appropriation is consequently 36.023.473,39 EUR.

The board of directors proposes to appropriate the profi t available for appropriation of 36.023.473,39 EUR as follows:

(in EUR) Gross dividends for the 21.391.070 shares 4.706.035,40Directors’ fees 175.000,00Transfer to the legal reserves 263.650,25Profi t to be carried forward 30.878.787,74

The proposed net dividend per share is calculated as follows:

(in EUR) Net dividend per share 0.1650Withholding tax 25/75 0,0550Gross dividend per share 0,2200 Pay-out ratio (1) 40,7%

The proposed dividend is 10% higher than that of 2003. The pay-out ratio amounts to 40,7%.

If this proposal is accepted, the net dividend of 0,1650 EUR per share will be made payable as from June 10, 2005 onwards at het counters of Dexia Bank, ING/Bank, Fortis Bank and KBC bank on presentation of coupon n°7.

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

Proposals to the Annual Meeting

OF SIOEN INDUSTRIES N.V. OF MAY 27, 2005

Financial calendar

97

Annual Meeting of Shareholders Friday May 27, 2005

Announcement of 2005 fi rst quarter results Friday May 27, 2005

Announcement of 2005 fi rst semester results Wednesday September 14, 2005

Announcement of 2005 third quarter results Wednesday November 16, 2005

Financial information and investor relations

For all further information, institutional investors and fi nancial analysts are advised to contact:Geert Asselman Chief Financial Offi cer

Fabriekstraat 23 • B-8850 ArdooieT +32(0)51 74 09 80F +32(0)51 74 09 79e-mail [email protected] http://www.sioen.com

JAARVERSLAG/RAPPORT ANNUEL/ANNUAL REPORT

Dit jaarverslag is beschikbaar in het Nederlands, het Frans en het Engels.

Ce rapport annuel est disponible en français, en néerlandais et en anglais.

This annual report is available in English, Dutch and French.

Realisatie: Kliek Creatie 04 0478 - T 051 40 43 12 - ‘05/05

SIOEN COATING NVFabriekstraat 23B-8850 ArdooieBelgiëBTW BE 402.753.106RPR 0402.753.106 BruggeT +32 51 74 09 00F +32 51 74 09 [email protected]

SAINT FRERES SAS4 route de VilleBP 1F-80420 FlixecourtFranceTVA FR 76408448850RCS AMIENS B 408 448 850T +33 322 51 51 45F +33 322 51 51 [email protected]

SIOEN GMBHAm Zirkel 849757 WerlteDeutschlandMwSt DE 811299457HRB 53295T +49 59 51 99 47 0F +49 59 51 99 47 [email protected]

SIOEN COATING DISTRIBUTION NVFabriekstraat 23B-8850 ArdooieBelgiëBTW BE 436.241.167RPR 0436.241.167 BruggeT +32 51 74 09 00F +32 51 74 09 [email protected]

SIOEN FABRICS SAZoning Industriel du Blanc BallotAvenue Urbino 6B-7700 MouscronBelgiqueTVA BE 458.801.684RPM 0458.801.684 TournaiCoating : T +32 56 85 68 80F +32 56 34 61 [email protected] : T +32 56 85 01 40F +32 56 85 01 [email protected]

EUROPEAN MASTER BATCH NV –E.M.B. NVRijksweg 15B-2880 BornemBelgiëBTW BE 421.485.289RPR 0421.485.289 MechelenT +32 3 890 64 00F +32 3 899 26 [email protected] SAChemin Preuscamps 12B-7822 Ath (Meslin-L’Evêque)BelgiqueTVA BE 400.685.125RPM 0400.685.125 TournaiT +32 68 25 02 30F +32 68 55 26 [email protected]

SIOEN FIBRES SA - extrusionZoning Industriel du Blanc BallotBoulevard Métropole 9B-7700 MouscronBelgiqueTVA BE 463.789.464RPM 0463.789.464 TournaiT +32 56 48 12 70F +32 56 48 12 85fi [email protected]

SIOEN COATED FABRICS(SHANGHAI) TRADING CO. LTDRoom O, Floor 15, Hengji BuildingNo 99, Huaihai Road (East)200021 ShanghaiP.R. of ChinaT +86 21 63 84 25 21F +86 21 63 84 27 [email protected]

SIOFAB SAIndústria de Revestimentos TêxteisRua da IndústriaPT-4795-074 Vila das AvesSanto TirsoPortugalSanto Tirso SOB O N° 4641NIF 505.046.644T +351 252 87 47 14F +351 252 94 29 [email protected]

TIS NVDriehoekstraat 2AB-9451 Haaltert (Kerksken)BelgiëBTW BE 405.085.064RPR 0405.085.064 AalstT +32 53 85 92 20F +32 53 85 92 [email protected]

VERANNEMANTECHNICAL TEXTILES NVFabriekstraat 31B-8850 ArdooieBelgiëBTW BE 429.387.623RPR 0429.387.623 BruggeT +32 51 24 81 70F +32 51 22 61 [email protected]

PENNEL AUTOMOTIVE SAS310 Rue d’AlgerF-59100 RoubaixFranceTVA FR 53448273615RCS Roubaix-Tourcoing B 448 273 615T +33 320 76 21 10F +33 320 76 21 [email protected]

SIOEN NVFabriekstraat 23B-8850 Ardooie - BelgiëBTW BE 478.652.141RPR 0478.652.141 BruggeT +32 51 74 08 00F +32 51 74 09 [email protected]

CONFECTION TUNISIENNEDE SECURITE SA – C.T.S. SA5 Impasse n° 2Rue 8612 – (Z.I.) La CharguiaTN-2035 TunisTunisieCode TVA 03030 V / A / M / 000RC B 133171996T +216 71 77 34 77F +216 71 78 40 [email protected]

GAIRMEIDI CAOMHNAITHE DHUNNA NGALL TEORANTA LTD(Donegal Protective Clothing Ltd –Sioen Ireland) - Industrial EstateBunbegCo. DonegalIrelandVAT IE 4621355MCompany Nr. 78212T +353 74 953 11 69F +353 74 953 15 [email protected]

MULLION MANUFACTURING LTD44 North Farm RoadSouth Park Industrial EstateScunthorpeNorth Lincolnshire DN17 2AY - UKVAT GB 365.1873.34Company Nr. 1871440T +44 1724 28 00 77F +44 1724 28 01 [email protected]

SIP PROTECTIONZ.U.P. De LabarreF-09000 FoixFranceT +33 5 61 65 44 44F +33 5 61 02 80 [email protected]

P.T. SIOEN INDONESIAJl. Irian RayaBlok E-26Nusantara Bonded Zone(Kawasat Berikat Nusantara)Cakung CilincingJakarta 14140IndonesiaNPWP 1.068.001.5-052T +62 21 440 33 88F +62 21 440 14 [email protected]

Coating Division

Apparel Divis

ion

Processing Divis

ion

99

PT SUNGINTEXJalan Raya Narogong Km 12,5Pangkalan IVDesa CikiwulKec. Bantar GebangBekasi Barat 17310IndonesiaNPWP 1.068.012.2-407T +62 21 825 22 22F +62 21 825 44 [email protected]

SIOEN FIBRES SA – distribution Zoning Industriel du Blanc BallotBoulevard Métropole 9B-7700 MouscronBelgiqueTVA BE 463.789.464RPM 0463.789.464 TournaiT +32 56 85 54 30T +32 56 34 66 [email protected]

SIOEN FRANCE SASPavillon Hermès110 avenue Gustave EiffelZI La CoupeF-11100 NarbonneFranceTVA FR 49300774767RCS Narbonne B 300 774 767T +33 4 68 42 35 15F +33 4 68 42 27 [email protected]

SIOEN TUNISIE SA7 Impasse N° 2Rue 8612 – (Z.I.) La CharguiaTN-2035 TunisTunisieCode TVA 614715 S / A / M / 000RC B 19711998T +216 71 80 75 47F +216 71 80 92 [email protected]

SIOEN UK LtdUnit 2 Windsor HouseAckhurst Business ParkFoxhole RoadChorleyLancashire PR7 1NYUKVAT GB 732.4071.62Company Nr 3761142T +44 1257 27 72 44F +44 1257 27 72 [email protected]

SIOEN ZAGHOUAN SAZone Industrielle de ZaghouanTN-1100 ZaghouanTunisieCode TVA 747023 F / A / M / 000RC B 177132000T +216 72 68 06 60F +216 72 68 26 [email protected]

SIOTEC BVBAFabriekstraat 23B-8850 ArdooieBelgiëBTW BE 424.304.823RPR 0424.304.823 BruggeT +32 51 74 08 00F +32 51 74 08 [email protected]

VIDAL PROTECTION20 et 22 rue de l’ArtisanatF-81300 GraulhetFranceT +33 5 63 34 52 46F +33 5 63 34 69 [email protected]

SIOEN USA Inc.c/o Flom, French & Goodwin, L.L.C.675 Line RoadBuilding 4, Suite BAberdeen, NJ 07747USAT +1 732 441 12 50F +1 732 441 12 [email protected]

SIOEN NV – BALENO Korte Leemstraat 3B-2018 AntwerpenBelgiëT +32 3 213 99 80F +32 3 227 17 [email protected]

SIOEN DEUTSCHLANDAm Zirkel 849757 WerlteDeutschland (Allemagne)T +49 59 51 99 47 0F +49 59 51 99 47 [email protected]

SIOEN SCANDINAVIAPilestraede 50,2DK-1112 Copenhagen KDenmarkT +45 70 26 70 36F +45 46 15 25 [email protected]

COATEX NVIndustriezone SappenleenSappenleenstraat 3-4B-8970 PoperingeBelgiëBTW BE 434.140.425RPR 0434.140.425 IeperT +32 57 34 61 60F +32 57 33 35 [email protected]

SAINT FRERES CONFECTION SAS2 route de VilleBP 37F-80420 FlixecourtFranceTVA FR 44408449098RCS Amiens 408 449 098T +33 322 51 51 70F +33 322 51 51 [email protected]

SIOEN NORDIFA SARue Ernest Solvay 181B-4000 LiègeBelgiqueTVA BE 474.276.154RPM 0474.276.154 LiègeT +32 4 252 21 50F +32 4 253 04 [email protected]

BACAM SASParc d’Activités des Hautsdu Val de NièvreAllée de la Haute BorneF-80420 Flixecourt (Somme)FranceTVA FR 39443613310RCS Amiens B 443.613.310T +33 322 39 98 15F +33 322 39 93 [email protected]

ROLAND INTERNATIONAL B.V.Kasteellaan 33NL-5932AE TegelenNederlandBTW NL003812522B01HR Venlo 12011983T +31 77 376 92 92F +31 77 373 69 [email protected]

ROLTRANS GROUPAMERICA INC.3212 Pinewood DriveArlington, Texas 76010USA75-1994308Delaware Corporation #2044811T +1 817 607 00 80F +1 817 607 00 [email protected]

GIESEMANN LKW PLANENGMBHAm Zirkel 849757 WerlteDeutschlandUst-id.Nr.: DE 812873033Westerstede HRB 7492T +49 59 51 99 47 0F +49 59 51 99 47 [email protected]

ROLTRANS GROUP POLSKASP.Z.O.O.Ul. Nadbrzezna 1PL-62500 KoninPolskaNIP 665-100-18-19RHB 1210T + 48 632 44 39 25F +48 632 44 39 [email protected]

ROLAND UKRAINE LLCKievskaya 64-ARivneUkraineT +38 362 28 65 39F +38 362 28 65 [email protected]

ROLAND TILTS UK LtdUnit 1Usher StreetOff Wakefi eld RoadBradford BD4 7DSUKVAT GB 311746186Company Nr 1380441T +44 1274 39 16 45F +44 1274 30 51 [email protected]

Sioen Industries nv • Fabriekstraat 23 • B-8850 Ardooie - BelgiëTel: +32 51 74 09 00 • Fax: +32 51 74 09 64 • [email protected] BE 441.642.780 • RPR 0441.642.780 Brugge