Today, Wavin - Jaarverslag.com

Annual Report 2010Solutions for Essentials

AB➔Surface heating and cooling➔Ceiling systems➔Underfl oor systemsWavin’s surface heating and coolingsystems increase the energyefficiency of buildings. They providecomfort without compromising onaesthetics and freedom of design.Ceiling heating and cooling systemsare particularly suitable for largesurfaces, are silent and enable preciseindoor climate control. We offerintegrated systems and project design,supported with practical softwaremodelling tools.Underfl oor heating and coolingsystems deliver consistent andcontrolled ambient temperatures,using less energy than conventionalsystems. Wavin’s easy to installsystems are widely used in domestic,commercial and industrial buildingsacross Europe.HGSolutions inpracticeWavin provides integrated aboveand below ground pipe systemsas well as consultancy anddesign services, implementationsupport and after-sales service.Innovation is one of our strengths:we work continuously to improveour systems and solutions.CJK➔WatermanagementWavin’s water management solutionsare designed to handle rainwaterrun-off from hard surfaces togroundwater.ICDE➔Siphonic roof drainage➔Infi ltration/attenuation units➔FilteringSiphonic systems drain large quantitiesof water quickly from any fl at roof astypically found on industrial andcommercial properties. Wavin’smodelling software ensures the mosteffi cient confi guration for each specifi cproject.Temporary storage units for excessrainwater, enabling controlleddischarge. This approach isenvironmentally friendly and reducesinundation risk.Filter systems remove pollutantssuch as vegetation, sand and othersediments from the water before itis discharged, infi ltrated or reused.

G H IC➔➔➔Clean & waste waterHot and cold tap water Plastic andmetal-plastic pipe and fi tting systemsthat make plumbing in bathrooms andkitchens fl exible and fast, whileproviding secure connections.Low-noise soil and waste Multi-layersoil and waste piping systems designedfor near-silent waste discharge inapartment buildings, hotels and offi ces.Foul water systems Underground pipesystems, including manholes, gulliesand inspection chambers, fortransportation of foul water to waterpurifi cation plants. Trouble-freeaccessibility makes inspection andcleaning simple.AJB➔Water distributionEDWavin’s roots are in the development ofreliable pipe systems for drinking waterdistribution. Innovative three layer pipesoffer strong inner and outer protectionpermitting potable water distribution ineven the most demanding environment.FK➔Channel drain➔Cable ductingFChannel drain systems facilitate fastdisposal of large quantities of surfacewater with a minimum of visual impact.They are tailored for every possibleapplication, from domestic drivewayto airport runway.Ducts guide and protect fi bre-opticcables and power lines. Wavin’s latestgeneration of cable ducts is futureproof: they allow additional, upgrade orreplacement cables to be effi ciently fedinto the duct as required.

Wavin Annual Report 2010 | page 1Tableof contentsCompany Profi le 2Key fi nancial data 2Key fi gures 3History at a glance 4Wavin today 5Focus on Europe 7Company strategy 8Shareholder information 10Report from the CEO 14Management Board Report 16Business and market summary 16Financial performance 18Business units 22Regions 26Corporate governance 32Risk management 42Corporate social responsibility 50Human resources 58Remuneration Report regarding the Management Board 64Supervisory Board Report 67Financial Statements 73Group Financial Statements 74Notes to the Group Financial Statements 79Company Financial Statements 129Notes to the Company Financial Statements 130Other Information 141Appropriation of result 141Auditors’ report 142Wavin management 144Principal direct and indirect participations 145Additional Information 146Summary of last fi ve years 146Glossary of terms 148

Wavin Annual Report 2010 | page 2Key fi nancialdataRevenue (€ x million)Revenue per region2Overseas and Other4.8%1,51,5021,6181,580South East Europe16.1%North West Europe*32.9%1,1601,2311,00,5020062007200820092010Central & Eastern*Europe16.2%South West Europe*30.0%Ebitda (€ x million)Ebitda per region240180120197212161110104Overseas and Other9.5%Central & Eastern*Europe27.7%North West Europe*29.5%60020062007200820092010South East Europe8.6%South West Europe*24.7%Net profit (€ x million)Revenue per business sector10093Other2.1%Above Ground39.1%7573503225020062007220 2008 0972010Below Ground58.8%* Compared to 2009, the composition of this region has changed. For more information please refer to page 9.

Wavin Annual Report 2010 | page 3Keyfi gures(€ × 1 million unless otherwise stated) 2010 2009Income statementTotal revenue 1,231.3 1,159.6Ebitda (1) 104.1 110.4Non-recurring operational result (6.4) (14.6)Result from operating activities (2) 37.9 32.9Net profi t before non-recurring items 8.9 11.7Net profi t 7.1 1.8Other key financialsDepreciation 47.1 50.1Amortisation 12.9 12.8Net investments 37.6 37.7Dividend (declared) – 2.7Net cash from operating activities 26.4 55.1Balance sheetTotal equity 578.9 558.6Net debt 256.1 236.8Total assets 1,360.9 1,314.9Net capital employed 851.4 820.2Leverage ratio x 1 2.3 2.0Interest coverage ratio x 1 3.7 4.0Ratios continuing operationsEbitda (1) as % of revenue % 8.5 9.5Return on average net capital employed % 5.3 5.8Debt to equity ratio ratio 0.4 0.4Total equity as % of total assets % 42.5 42.5Key data per share (3)Number of shares issued (year end) x 1 50,782,132 50,782,132Net profi t attributable to equity holdersof the Company 5.8 0.2Dividend per share € x 1 – –Share price at year end € x 1 11.40 14.00Earnings per share (year end) € x 1 0.11 0.00Other key ratiosInnovation rate % 14.6 16.0Service level % 90.3 89.4Greenhouse gas emissions (4) kg CO 2/ton 422 435EmployeesWorkforce x 1 6,448 6,238Lost time incident frequency x 1 2.2 2.9(1)(2)(3)(4)All references to Ebitda reflect operating result before depreciation, amortisation and non-recurring items.All references to operating result include non-recurring items.The comparative figures have been adjusted to reflect the effect of the reverse stock split.Figures have been adjusted following a more detailed calculation.

History ata glance➔1955Wavin (a contractionof water and vinylchloride) founded bylocal Dutch waterauthority WMO.➔Late1950sGreenfi eld start upsin The Netherlands,Germany, Denmarkand Ireland.➔1960sGeographicexpansion intoWestern Europe (UK,France and beyond).Start of a period ofdiversifi cation(packaging, fi lms,bags, crates andprofi les.19621970s➔ ➔ ➔Royal Dutch Shelltakes 50%participation inWavin.Start of WavinTechnology andInnovation as Groupdevelopmentorganisation.Wavin Overseasestablished as thecentral exportorganisation.1990s1999➔ ➔ ➔Re-alignment ofactivities, focus oncore competence:plastic pipe systems.Establish operationsin Eastern Europe.Royal Dutch Shellsells its stake inWavin to CVC CapitalPartners.1980sMore emphasis onsystems and aboveground applications.25% of companysales outside pipesystems.2000 – nowNumber ofsuccessful bolt-onacquisitions inNorthern andEastern Europe.Two largeacquisitions in theUK and Turkey.Expansion in WaterManagement andSurface Heating &Cooling segments.20052006➔ ➔ ➔ 2010WMO sells stake inWavin.Stocklisting on NYSEEuronextAmsterdam.Strategyupdate‘Wavin2015’Acquisition of PEwater business inSweden.Joint-venture inCzech Republic.

Wavintoday➔Today, Wavin:Is the leadingsupplier of plasticpipe systems andsolutions, presentin 26 countries inEurope.➔Today,Wavin:has revenue of€ 1.23 billion.➔Today,Wavin:employs approx.6,400 people.➔Today,Wavin:is focused oninnovation.➔Today,Wavin:is committedto deliveringsustainablesolutions.➔Today,Wavin:provides acomplete range forabove and belowgroundapplications.➔Today,Wavin:has strongrelationships withlocal and pan-European clients.➔Today,Wavin:focuses onexpanding inEurope’s emergingmarkets.➔Today,Wavin:has a globalnetwork of agentsand licensees.➔Today, Wavin:is listed on theAmsterdam stockexchange.

Wavin Annual Report 2010 | page 7Focus onEurope➔NorthWestEurope➔SouthWestEuropeNetherlands(incl. Head Offi ce)GermanyBelgiumDenmarkNorwaySwedenFinland➔Central& EasternEuropePolandCzechiaRussiaUkraineSlovakiaLithuaniaEstoniaLatviaBelarusUnited KingdomIrelandFrance➔SouthEastEuropeItalyTurkeyHungaryRomaniaCroatiaBulgariaSerbia

Wavin Annual Report 2010 | page 8Companystrategy‘Wavin 2015’Following a phase in which we successfully managed our company through the financial crisis, welaunched the ‘Wavin 2015’ strategy update in October 2010. This strategy brings our company backon the path to sustainable and profitable growth and will enable us to reap the full benefits once themarkets return to more normal levels.Priorities and targets for the period 2011-2015Our priorities are:• Market Leadership – We will continuously build on our existing leading market positions in keyEuropean countries and invest (both organically and through acquisitions) in other Europeancountries where leadership can be achieved. The ultimate goal is to achieve number one or twomarket positions in all markets in which we operate.• Portfolio and Segmentation – We intend to offer a complete product portfolio to our customers andincrease our presence in non-residential building markets, with a strong focus on sustainable systemsand solutions. We also aim to increase revenue in key target segments. By 2015, 40% of Wavin’stotal revenue should originate from the Water Management and Hot & Cold (including SurfaceHeating & Cooling) segments.• Operational Excellence – We aim to drive service and cost leadership through complexity reductionand a lean and sustainable manufacturing and supply chain footprint. Our benchmark is to have 95%of orders realised in time and in full. Between 2008 and 2015 the company’s carbon footprint shouldbe reduced by 20%.• Innovation – We will focus on and accelerate the implementation of European innovation projects.The innovation rate target – the percentage of revenue from products that have been on the marketfor less than fi ve years – has been raised, it should be 20% in 2015.• People – We want to stimulate continuous improvement and drive individual and team development.Through this strategy we want to achieve the following targets:Achieve leadershipin every market inwhich we operate• Revenue – We aim to grow organically at least 2% ahead of the European construction industry.Revenue development will be driven our presence in emerging markets, ongoing substitution oftraditional materials by plastics, and the increasing need for energy effi ciency of buildings and watermanagement solutions.• Margin – We aim to return to pre-crisis margins despite lower revenue levels, refl ecting the benefi tsof strong local market positions, innovation and structural cost savings.• Financial leverage – We will reduce the leverage ratio to an average ratio of 2.0 over the year.Steps taken in 2010:Market Leadership• We took encouraging steps to further enhance our market presence. In Sweden we acquired thedrinking water business of KWH, putting us into the local number two position in the below groundmarket and strengthening Wavin’s product offering in Sweden and Norway. In Czechia we concludeda sales joint venture that compliments our existing product offering and enables us to supply the localmarket with a full product offering. At the same time, we downsized our activities in Portugal andSwitzerland.

Wavin Annual Report 2010 | page 92010 2010Overall Market Position 2010* POSITION POSITIONUK # 1 Baltics # 2Poland # 1 Norway # 2Denmark # 1 Sweden # 2Ireland # 1 Belgium Top 3Netherlands # 1 France Top 3Czechia # 1 Turkey Top 3Hungary # 1 Romania Top 3Italy # 1** Germany Top 5* Based on company estimates of the local markets** Above Ground onlyUse of recycledmaterialsincreased by 17%Operations• Portfolio and Segmentation – We continued to roll out Intesio, our solution for Water Management,and added more products to the portfolio. In Surface Heating & Cooling, the Tempower range wasexpanded with, amongst others, new controls and an improved composite manifold.• Operational Excellence – We further optimised our manufacturing and supply chain footprint.ConnectIT, the project to gradually implement a single company wide IT platform, is well underway.France went live in early 2011, approximately 35% of Wavin’s operations are now working on thisuniform ERP system. Good progress was again made in achieving the 2015 sustainability targets.Between 2009 and 2010 our Greenhouse gas emissions were reduced by 3.3% whilst the usage ofrecycled materials increased by 17%. Additional implementations of pipe systems with an inner layerfrom recycled content helped support this development. Approximately 90% of orders were realisedon time and in full.• Innovation – We launched a number of major new products and systems. In the UK we introducedthe fourth generation of Hep 2O, a push-fi t plumbing system for hot and cold water supply. Otherintroductions in the company include the new 400 – 425 mm Tegra manhole and low friction pipesfor electric wiring. Our innovation rate for 2010 was approximately 15%.Organisation• We chose to limit the Management Board to three members from four and the Executive Committeeto nine positions from twelve.• We reorganised both our regional structure and our business unit structure. Our regional structure isnow composed of four regions instead of the previous six, with the mature West European marketsintegrated into two regions to benefi t from scale and to realise synergies.• We established dedicated Marketing & Technology department, bringing together the strengthsof the business units and the Research & Development centre. This combination was made toaccelerate product innovation and increase the speed of introducing new products to the market.By combining our marketing and innovation efforts, we will be able to offer customers a morecomprehensive and integrated product portfolio.

Wavin Annual Report 2010 | page 10ShareholderinformationWavin sharesWavin shares are listed on the Dutch Stock Exchange (NYSE Euronext Amsterdam) under ISINcode NL00009412683. Wavin is included in the Dutch Mid Cap index (AMX). Ordinary share optionshave been traded by Euronext.liffe, the Euronext Amsterdam derivatives division, since March 2010.The market capitalisation of the Group stood at approximately € 579 million at year-end 2010,a decrease of 18.6% on the position at year-end 2009 (approximately € 711 million).Reverse stocksplit 8:1Share capitalIn April 2010, the General Meeting of Shareholders approved a ‘reverse stock split’ of 8 ordinary shareswith a nominal value of € 0.05 each time into 1 ordinary share with a nominal value of € 0.40. Trading ofordinary shares in the new nominal value started on Monday 3 May 2010. Due to the reverse stock splitthe total number of issued ordinary shares decreased from 406,257,050 on 31 December 2009 to50,782,132 at 31 December 2010.Besides the reverse stock split there were no other movements in the number of outstanding sharesduring 2010.Key data per share(€ x 1 unless otherwise stated) 2010 2009*Closing price year end 11.40 14.00Highest price 14.40 14.38Lowest price 8.63 5.90Average daily volume (x1) 199,784 292,473Shareholders’ equity 11.26 10.88Operating result 0.75 0.65Net profi t 0.11 0.00Cash generated from operations 1.16 1.71Dividend paid (cash) – 0.08* 2009 figures have been adjusted to reflect the effects of the reverse stock split.Share price development and trading volumesThe Wavin share price decreased by 18.6% from € 14.00 (adjusted for the reverse stock split) on31 December 2009 to € 11.40 on 31 December 2010. In 2010 the total volume of Wavin N.V. sharestraded on NYSE Euronext Amsterdam (Euronext) was 51.5 million, equalling an average daily tradingvolume of 199,784 shares. Trading volumes on Euronext and share price development of the Wavinshare in 2010 are shown in the following graph.(Euros)20(Volume, x 1,000)2,000161,600121,20088004400WavinAMX index0JanuaryFebruariMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember0* Figures have been adjusted to reflect the effect of the reverse stock split.

Wavin Annual Report 2010 | page 11The price development of the Wavin share in 2010 compared to the AMX index is shown below.(index 31-12-2009 = 100)1501251007550WavinAMX index25JanuaryFebruariMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberDisclosures of substantial shareholdingsPursuant to the Dutch Financial Markets Supervision Act (Wet Financieel Toezicht), the Financial MarketsAuthority (Autoriteit Financiële Markten, AFM) publishes the notifi cation of substantial shareholdings inWavin N.V. The situation per 31 December 2010 can be found below:Substantial shareholdings (in %) per 31 December 2010:Julius Baer Multipartner SICAV 5.83%ASR Nederland N.V. 5.43%Navitas B.V. 5.18%Harris Associates L.P. 5.03%Kempen Oranje Participaties 5.01%Beheersmaatschappij Breesaap B.V. 5.00%Aviva plc 5.00%An updated overview can be found on our website www.wavin.com.Most recent IRinformation onwww.wavin.comIn the course of the year, Harris Associates L.P. notifi ed the AFM of its new 5.03% shareholding in Wavin.On 16 July, Fidelity F.I.L. Limited made a notifi cation that its shareholding in Wavin was reduced to4.98%, which is below the notifi cation threshold of 5%.Issue and acquisition of sharesThe company may issue or acquire ordinary shares subject to certain provisions of Dutch law and theArticles of Association and pursuant to approval by the General Meeting of Shareholders. Please seepage 38 of this report for further details.Protective MeasuresThe Stichting Preferente Aandelen Wavin has a call option on preference shares equal to 100% of theamount of outstanding ordinary shares at the moment the option is exercised. Please see page 39 ofthis report for more information.Dividend policyWavin is subject to restrictions on the distribution of cash dividends under its syndicated credit facilities.According to the terms of these facilities we may not pay any cash dividend in excess of € 0.01 on anyshare in our capital until 31 December 2011. Cash dividend declarations are again allowed in 2012 overthe 2011 results. According to the terms of our Forward Start Facility we will be required to prepay to thesyndicate of lending banks an amount equal to any cash dividend to be paid after 31 December 2011.This prepayment obligation will not apply if our leverage ratio under the Forward Start Facility is below2.5 at the time any such cash dividend is declared.

Wavin Annual Report 2010 | page 12Dividend 2010Given the limitations to pay dividend (as set out above), the Boards of Wavin have resolved to add the2010 profi t attributable to shareholders to the reserves.Investor relationsIn 2010, Wavin had a large number of contacts with the investment community through road shows,participation in investor conferences and presentations to (retail) investor events. In 2010 there wereapproximately 25 such events resulting in approximately 250 individual investor meetings (excluding theretail contacts). Furthermore a Capital Markets Day was organised in October 2010 where Wavin’s newCEO Henk ten Hove presented the ‘Wavin 2015’ strategy to the investment community.‘Wavin 2015’presented atCapital MarketDayWavin highly values a constructive dialogue with investors, analysts and investment advisors as itenables them to obtain a balanced and complete view of the company’s performance and the issuesfaced by the business. Regular meetings with current and potential shareholders as well as with analystsproviding research on the Wavin share are an important component of the communication with thecapital markets.An important component of transparent communication with the investor community is a fair andsimultaneous disclosure to all stakeholders. All important business information will be published via apress release which will be made available to the whole investment community. Should importantinformation, which would lead to a privileged position, be received accidentally by an individualshareholder, Wavin will immediately publish a press release and inform the Financial Markets Authority(AFM).Wavin will not assess, comment upon, or correct analysts’ reports and valuations in advance other thanfactually. The company does not pay any fee(s) to parties for carrying out research for analysts’ reportsor for the production or publication thereof.Wavin applies the principle of a silent period in its investor relations communications. During a silentperiod, Wavin does not comment on market prospects or factors affecting business and performance,nor does the company engage in discussion on events or trends related to the reporting period. Wavinwill not visit, or receive visitors from, investors or representatives of media in which these matters arediscussed. A silent period starts at the end of each reporting period, and not later than six weeks priorto the disclosure of annual accounts or interim reports, and lasts until the release of the annual accountsor an interim report.In accordance with the Dutch Corporate Governance Code Wavin has established a Disclosure Policy,a copy of which can be found on www.wavin.com.Contacts with capital markets are the responsibility of the CEO and CFO supported by the company’sInvestor Relations departmentInvestor information and contactPart of Wavin’s corporate website (www.wavin.com) is dedicated to providing information about thecompany to the fi nancial community. The Investor Relations section covers a broad range of information,such as fi nancial reports, press releases, analyst/investor presentations, fi nancial calendar, listing details,corporate governance structure, share and other fi nancial information.For further information please contact Wavin Investor Relations:Email: InvestorRelations@wavin.comTel: +31 (0)38 – 429 43 57Fax: +31 (0)38 – 429 42 38Financial calendar 201120 April – Trading Update Q1 (before start of trading)27 April – Annual General Meeting of Shareholders24 August – Publication of H1 fi gures 2011 (before start of trading)20 October – Trading Update Q3 (before start of trading)

Wavin Annual Report 2010 | page 14Reportfrom the CEOFor Wavin, 2010 can be seen as a transition year. After two years of managing through the credit crisis,we saw an encouraging increase in revenue. Double digit growth was reported in the UK, Poland,Norway, Sweden and Turkey, more than compensating for the decline in the Netherlands and Italy.We faced strong winter conditions at both the beginning and at the end of the year, heavy pricecompetition as well as substantial raw material price increases. Despite tight cost control, our marginscame under pressure, leading to an operating result below the company’s potential.2010 can be seenas transition yearIn 2010, Philip Houben retired after successfully leading the company as CEO for a decade. Under hisleadership the company doubled in size, created leading positions in emerging markets and built astrong position in the Hot & Cold market. Philip brought the company to the stock exchange andmanoeuvred Wavin through the recent downturn. We are very grateful to him for his contribution and hisvisible leadership.Management Board member Andy Taylor left Wavin to pursue other opportunities. We thank him for thepivotal role he played in the integration of Hepworth Building Products following the acquisition in 2005,as well as his contribution to the growth in South East Europe. We are very pleased to propose MaartenRoef, who joined Wavin in 1999 and has a strong track record in managing different businesses, as anew Management Board member.Henk ten HovePresident & CEO

Wavin Annual Report 2010 | page 15Wavin 2015Parallel to my introduction as the new CEO in October, we presented the ‘Wavin 2015’ strategy, theroadmap to sustainable growth and profi tability with local market leadership as the key driver. Wecurrently have leading market positions in almost half of the countries in which we operate and we haveprioritised further growth in attractive European geographies where leadership is achievable. Theacquisition of the KWH drinking water business in Sweden and a new sales joint venture in Czechia areclear examples of this approach.We view a complete product portfolio, an effi cient manufacturing footprint and supply chain and anacceleration of solution-selling concepts in renovation and non-residential segments as vital to realiseour ambitions. Continuous improvements will be facilitated by a streamlined organisation with fewerregions and stronger ties between the sales, business development and innovation functions.InnovationWavin is a strong innovator. One of the priorities under ‘Wavin 2015’ will be to accelerate the roll outof our innovative ‘Solutions for Essentials’ in Water Management and Surface Heating & Cooling ona European scale.In 2010 we successfully introduced the fourth generation Hep 2O plumbing system for hot and coldwater applications in the UK, aiming for further penetration in the renovation market. Because we wereable to keep the innovation pipeline fi lled during the recession, the innovation rate was close to ourtarget of 15%. By 2015 we aim to raise the share of products that have been on the market for lessthan fi ve years to 20% of total revenue.‘Wavin 2015’road map tosustainable growthSustainabilitySustainability has always been an important business driver. Through the years, we have invested notonly in our offering to the market but also in reducing the environmental impact of our processes. In2009 we began publishing ambitious environmental targets and the good news is that our efforts areshowing results. In 2010 we further improved energy effi ciency across the company and substantiallyincreased the usage of recycled materials, leading to a reduction of greenhouse gas emissions. Theseefforts and our transparency in reporting on sustainability have been recognised. Benchmark surveysand certifi cations show that we are a frontrunner in our industry in this area.OutlookWe remain cautious about the outlook for 2011. The European construction market shows signs ofstabilisation, but recovery will differ per country. We anticipate raw material costs to increase and we arefully focussed on passing these on. Revenue in 2011 is expected to develop ahead of the Europeanconstruction market, supported by our growth in innovative solutions and our presence in Europe’semerging markets.I would like to thank our customers for their loyalty and support, our shareholders for their confi dence,and our employees for their dedication and commitment.Henk ten HovePresident & CEO

Wavin Annual Report 2010 | page 16Business andMarket SummaryMarketsIn Europe construction output declined for the third consecutive year, but the speed of the declinelevelled off and the fi rst signs of stabilisation were seen. Residential construction activity in the Euro-zonedeclined further, with new residential construction accounting fully for this drop, whilst residential Repair,Maintenance and Improvement (RMI) was stable. The drop in residential markets was seen in bothWestern and Eastern Europe. The non-residential markets remained weak throughout the year. The civilengineering market was positive, supported by infrastructure investments in some Eastern Europeancountries. However, they were infl uenced by the announcements of cutbacks in governmental spendingthroughout Europe in the second half of the year.Key figures(€ × 1 million) 2010 2009 CHANGERevenue 1,231.3 1,159.6 6.2%Like-for-like growth 3.1% (22.9%)Ebitda 104.1 110.4 (5.7%)Ebitda margin % 8.5% 9.5%Operating result 37.9 32.9 15.2%Net profit 7.1 1.8 –Earnings per share € × 1 0.11 0.00 –Dividend € × 1 0.00 0.00 –First signs ofmarketstabilisation; solidrevenue recoveryWavin in 2010In these market conditions Wavin showed solid revenue recovery. Double-digit growth was recordedin Scandinavia and the UK, as well as in some larger emerging markets, like Poland and Turkey.Developments in the Netherlands, Italy and some smaller Eastern European countries weredisappointing.Below ground activities picked up well following a slow start due to heavy winter conditions. Aboveground building performance was less affected by these climate conditions, showing recovery from2009.Following a period of managing the business through the credit crisis in which we reduced headcount byover 1,600 FTEs and realised cost savings ahead of € 40 million, we could again give full attention tosustainable growth and profi tability. We launched ‘Wavin 2015’, the company’s strategy for the period2011-2015 which has as its core elements local market leadership, a complete product portfolio,European market coverage, Group-wide innovation and an effi cient manufacturing footprint and supplychain. We implemented several organisational changes in the second half of the year. The ManagementBoard is limited to three members from four and we reorganised both our regional structure and ourbusiness unit structure.To accelerate product innovation and increase the speed to market, the Marketing & Technologydepartment was established. The benefi t to our customers will be a more comprehensive productportfolio, offering integrated systems and solutions providing answers to today’s advanced buildingrequirements.In 2010 we continued to focus on a number of key growth areas. Additional investments were madein our Water Management and Surface Heating & Cooling solutions that address to current sustainabilityissues. We also put more emphasis on sustainability in operations, increasing the usage of recycled PVCin non-pressure applications, and installing energy-effi cient manufacturing systems across the Group.Further progress was made in complexity reduction. Product portfolio rationalisation resulted inproduction reallocations which helped us to further optimise our manufacturing footprint.

Wavin Annual Report 2010 | page 17The WavinManagement Board(left to right) MaartenRoef, Henk ten Hove,Pim OomensWavin’s performanceOur overall volume growth was satisfactory given the diffi cult markets and the very challenging weatherconditions in large parts of Europe both at the beginning and the end of the year. Volume growth wassupported by market share gains in emerging markets. Revenue increased 6.2% to € 1.231 billion.Like-for-like, the increase was 3.1% year-on-year.Margins were under pressure throughout Europe. Passing on the rises in raw material costs took longerthan expected because of the adverse economic environment and overcapacity in the industry.The full cost benefi ts of the restructuring programme we initiated in response to the crisis were realisedfaster than anticipated, and we took further cost reduction measures in those countries where marketcircumstances were more challenging. This has partially compensated for the margin pressure resultingfrom high resin prices and overcapacity in the industry. The operating result before depreciation andamortisation, Ebitda, came in at € 104.1 million, 5.7% lower than 2009. The Ebitda margin was 8.5%,a drop of 100 basis points compared to last year.Market sharegains in emergingmarketsNon-recurring costs of € 7.3 million were signifi cantly lower than last year. Most restructuring chargeswere taken in 2009, though additional measures were implemented in, amongst others, the Netherlandsand France.Net fi nance costs were marginally below those in 2009, as a lower debt level throughout the yearcompensated for the higher cost of fi nancing. In November, we successfully amended the interestmargin of our syndicated loan facility. The reduced interest margin refl ects the improved business andcredit market conditions and will result in annual savings of € 3.5 million on fi nancing costs under theexisting facilities. The size of the facility and the fi nancial covenants create suffi cient fl exibility for thecoming years.Net debt at year-end increased by € 19 million to € 256 million. Cash fl ow from operations was € 59million while net investments were € 37.6 million. We closely monitored our working capital, that wasimpacted by strong growth in some emerging markets operating with longer payment terms.In a year of challenging market circumstances, net profi t came in at € 7.1 million, ahead of last year’s€ 1.8 million.

Wavin Annual Report 2010 | page 18FinancialPerformanceResults(€ × 1 million) 2010 2009 CHANGERevenue 1,231.3 1,159.6 6.2%Gross profit 292.3 296.8 (1.5%)Ebitda 104.1 110.4 (5.7%)Depreciation (47.0) (50.1) 6.2%Amortisation (12.8) (12.8) 0.0%Non-recurring items (6.4) (14.6) 56.2%Operating result 37.9 32.9 15.2%Revenue up 6.2%to € 1.23 billionRevenueRevenue grew 6.2% to € 1.231 billion despite serious winter conditions affecting our business in thefi rst quarter and last month of the year. As Wavin recorded 59% of revenue outside the Euro-zone,the appreciation of non-Euro currencies had a positive effect of 2.8% on reported revenue.The consolidation of a sales joint venture in Czechia contributed 0.3% to the revenue growth.On a like-for-like basis, revenue growth was 3.1%. In a number of countries, such as the UK, Sweden,Norway, Poland and Turkey, we registered double-digit growth. Elsewhere, like in the Netherlands, Italyand some smaller emerging markets, further decline was experienced, in line with market developments.Gross profitGross profi t came in at € 292.3 million, 1.5% below 2009. Growth in lower margin countries had anegative impact on the gross profi t margin, which dropped 190 bps to 23.7%. The general economicclimate and overcapacity in the industry caused delays in passing on raw material price increases to themarket. Price competition was clearly fi ercer in the more generic product ranges and in markets lackingclear market leadership. Production costs were contained by complexity reduction and manufacturingfootprint optimisation, partly compensating for the margin pressure in the year.EbitdaThe operating result before depreciation and amortisation and non-recurring items (Ebitda) decreased by5.7% to € 104.1 million, from € 110.4 million in 2009. Rationalising back offi ce functions translated intolower selling and distribution costs as well as general and administrative costs. Despite effective costcontrol, the steady increase of raw material prices caused a drop in our Ebitda margin, which fell to8.5%, from 9.5% in 2009.Depreciation and amortisationDepreciation decreased to € 47.0 million (2009: € 50.1 million) because of lower investment levels inthe past two years. Amortisation costs were € 12.8 million, equal to 2009.Non-recurring itemsNon-recurring items in the operating result amounted to € 6.4 million (2009: € 14.6 million). Nonrecurringcosts of € 7.3 million, largely related to restructuring measures in the Netherlands and France,resulting in structural cost reductions. Non-recurring income of € 0.9 million was recorded ondivestments of assets.Operating resultWe realised an operating result of € 37.9 million in 2010, an increase of € 5.0 million or 15.2% comparedto 2009. The positive development was a result of lower non-recurring costs and lower depreciationcharges.

Wavin Annual Report 2010 | page 19Operating result(€ × 1 million) 2010 2009 CHANGEOperating result 37.9 32.9 15.2%Net fi nance costs (34.1) (35.4) (3.7%)Result of associates 2.2 3.1 (29.0%)Profit before tax 6.0 0.6 –Income tax expense 1.1 1.2 (8.3%)Net profi t 7.1 1.8 –Profit attributable to:Shareholders of Wavin N.V. 5.8 0.2 –Minority interest 1.3 1.6 (18.8%)Interest costsreduced fromfourth quarteronwardsNet finance costsNet fi nance costs decreased to € 34.1 million in 2010, from € 35.4 million in 2009.Interest costs were € 34.8 million compared to € 34.4 million in 2009. Lower debt throughout the year,following the 2009 refi nancing, largely compensated for the higher cost of fi nancing. In 2010 the averageinterest rate paid was 7.4% compared to 6.3% the previous year. In the fourth quarter the interest markup of the syndicated loan facility was lowered, reducing interest costs with € 3.5 million annually.Exchange rate losses incurred were € 1.0 million (2009: € 0.0 million), caused by the weakening ofthe Euro against most other currencies.Finance income of € 1.7 million resulted from revaluation gains on interest rate swaps.AssociatesOur 40% stake in the Georg Fisher Wavin joint venture that specialises in pressure fi ttings for gas andwater applications contributed € 2.2 million to the results, € 0.9 million below last year. The joint venturemanufactures in Switzerland, and sells its products globally. The market for these products wasimpacted by a slowdown of infrastructure markets globally. Additionally, results were negatively impactedby the strong appreciation of the Swiss Franc against the Euro.Income tax expenseIn the year we booked an income tax benefi t of € 1.1 million slightly lower than the tax benefi t of€ 1.2 million in 2009. The income tax recognised was positively affected by one-off benefi ts includingliquidation losses related to the closure of foreign operations. In addition, the retroactive application of afi scal facility in the Netherlands for tax reduction to stimulate R&D activities for the years 2007 - 2009had a positive effect on the income tax recognised.Net profitWavin reported a rise in net profi t from € 1.8 million in 2009 to € 7.1 million. Adjusted for one-off chargesand benefi ts, recurring net profi t amounted to € 8.9 million (2009: € 11.7 million). Profi ts attributableto shareholders increased from € 0.2 million in 2009 to € 5.8 million in 2010. Earnings per share were€ 0.11, compared to break-even in 2009.Cash flowWorking capital increased by € 29.1 million to € 119.9 million. Inventories were negatively affectedby the higher input costs, while account receivables were higher because of revenue growth inemerging markets, where payment terms are substantially longer than in mature markets. Largely dueto the working capital outfl ow, cash fl ow from operating activities was limited to € 59.3 million(2009: € 86.8 million). Depreciation and amortisation decreased slightly to € 60.0 million, well ahead ofthe net investment level. Capital expenditure was limited to € 37.6 million, at a similar level as 2009.

Wavin Annual Report 2010 | page 20Cash Flow(€ × 1 million) 2010 2009Profit for the period 7.1 1.8Depreciation and amortisation 60.0 62.9Other non-cash items 30.4 29.1Working capital movement (38.2) (7.0)Cash from operating activities 59.3 86.8Interest paid (29.8) (24.5)Tax paid (3.1) (7.2)Net cash from operating activities 26.4 55.1Net investments paid (37.6) (37.7)Acquisitions 0.1 (0.2)Other investing activities 3.1 5.0Dividend payment – (2.1)Net proceeds shares issued – 212.3Other fi nancing (0.9) 0.1Net cash flow (8.9) 232.5Non-cash movements (10.4) (8.2)Decrease/(increase) in net debt (19.3) 224.3Net debt this period 256.1 236.8Net debt previous period 236.8 461.1Key ratios2010 2009Key ratiosLeverage ratio × 1 2.3 2.0Interest coverage ratio × 1 3.7 4.0Debt to equity × 1 0.4 0.4Wavin operatedwell within thecovenantsNet debtNet debt increased by € 19.3 million, to € 256.1 million at year-end 2010 compared to € 236.8 millionat year-end 2009. The increase was largely related to the working capital cash outfl ow. Wavin’s mainsource of funding is a syndicated loan facility of € 500 million, which will expire in October 2011 and willbe replaced with a € 475 million syndicated loan facility expiring in April 2013. The interest margins onboth facilities were amended in the last quarter of 2010, resulting in an interest margin reduction of75 bps to 125 bps, depending on the leverage ratio.The company operated well within the agreed set of bank covenants. At year-end the leverage ratio(net debt/last twelve months Ebitda) was 2.3, well below the threshold of 3.7. The interest coverage ratio(Ebitda/net interest expense) was 3.7 against a minimum of 2.3. With current facilities in place, Wavin isadequately funded even if trading conditions remain challenging, and will have suffi cient liquidity whenmarkets recover further.

Wavin Annual Report 2010 | page 22BusinessUnitsIn 2010 the Marketing & Technology department was formed by combining the strategic businessunits Building & Installation and Civils & Infrastructure with Wavin Technology & Innovation, the centralresearch & development centre. This combination was made to create a more market drivenorganisation and accelerate the time to market of new systems and solutions.Revenue(€ × 1 million) 2010 2009 CHANGE % OF TOTALAbove Ground 481.3 452.7 6.3% 39.1%Below Ground 724.4 684.1 5.9% 58.8%Other 25.6 22.8 12.3% 2.1%Total revenue 1,231.3 1,159.6 6.2% 100.0%Above Ground activities regained some lost ground from last year, although residential markets remaineduninspiring. The Below Ground business was impacted by the winter conditions in the fi rst and lastquarters, but did well during the rest of the year.Our drive into solutions for sustainability issues, such as energy conservation and managing rainwaterrun-off, has developed well. Water management solutions were in demand while complete surfaceheating and cooling solutions were further introduced across Europe.Revenue Above Ground(€ × 1 million) 2010 2009 CHANGE % OF TOTALHot & Cold 272.1 248.9 9.3% 22.1%Soil & Waste 159.8 149.7 6.7% 13.0%Other Building Systems 49.4 54.1 (8.7%) 4.0%Total Above Ground 481.3 452.7 6.3% 39.1%Next generationHep 2O fittingslaunchedHot & ColdIn the Hot & Cold segment revenue grew by 9.3% to € 272.1 million, a recovery from the drop of 2009but still signifi cantly under the pre-recession levels. The segment displayed a strong rebound in the UKand solid growth in Turkey. Wavin will continue to further develop the Hot & Cold business throughinnovations across all major Hot & Cold product groups. One of the highlights in the fourth quarter wasthe launch in the UK of a new generation of our successful Hep 2O fi tting range. This will help us growour position in that large Repair, Maintenance and Improvement (RMI) market and strengthen our marketleadership in the UK. Hep 2O will be introduced in several other European countries in 2011.Sales in the Surface Heating & Cooling segment developed favourably. The market for energy effi cientheating and cooling solutions grew in 2010, stimulated by subsidies and tax benefi ts from localauthorities. We are also a supplier to Lend Lease in the Stratford City regeneration project.Wavin successfully expanded the sales activities of Tempower, our energy effi cient heating and coolingsolution, to fi ve new countries in Europe. A key product introduction was Flexius, a fl exible pipe installedin under fl oor heating systems that reduces total installation costs.Soil & WasteThe Soil & Waste segment saw revenue increase 6.7% to € 159.8 million, benefi ting from marketrecovery in several key countries. Our low-noise soil & waste systems are marketed across Europe andcustomers increasingly value the comfort of these systems. In Norway and the Benelux we enhancedthe Wafi x offering into a complete range of in-house discharge systems.Given the total portfolio of products and services, Wavin is well positioned within this segment.

Wavin Annual Report 2010 | page 23Other Building systemsProducts in this segment complete our above ground offering in a limited number of our Europeanmarkets. These mainly consist of products for niche segments, such as roof gutters and electricalconduits. Revenue in this segment shrank 8.7% to € 49.4 million.Revenue Below Ground(€ × 1 million) 2010 2009 CHANGE % OF TOTALFoul Water Systems 372.8 349.0 6.8% 30.3%Water Management 142.1 133.0 6.8% 11.5%Cable Ducting 53.3 54.7 (2.6%) 4.3%Water & Gas 156.2 147.4 6.0% 12.7%Total Below Ground 724.4 684.1 5.9% 58.8%Roll-out of WaterManagementsolution continuedFoul Water SystemsFoul Water Systems’ revenue increased 6.8% to € 372.8 million, with growth realised in key emergingmarkets. We extended our Tegra range of manholes and inspection chambers, offering enhancedfunctionality and ease of installation in diameters from 425mm to 1000mm. We made progress withsustainable manufacturing, nearly doubling our production of PVC multi-layer pipes, with recycledmaterial in the core, reducing material use. Greater fl exibility, lower installation costs and durabilitysupport the long-term trend of substituting traditional materials with plastics in Foul Water Systems.Water ManagementWater Management offers intelligent solutions for managing rainwater run-off from hard surfaces likeroofs and roads to groundwater. Revenue in the segment grew by 6.8% to € 142.1 million, from€ 133.0 million in 2009. Recent examples of fl ooding following intensive rainfall in various countries haveunfortunately again proven the need to have solutions in place in both the residential and non-residentialsectors to manage the increasingly severe rainfall. During the year we continued to roll out Intesio, nowavailable in seven countries. Intesio is a comprehensive water management solution consisting of a fullrange of products, as well as project design and calculation tools for civil engineers and investors.Recent introductions to complete the Intesio offering included fl ow controls and hydrodynamicseparators to remove impurities from rain water before infi ltration or discharge.Cable DuctingCable Ducting, including fi bre to the home systems, was impacted by a weak new residential marketand postponement of large projects. The second half of the year showed some recovery with the launchof various large projects that will accelerate in 2011. Revenue was € 53.3 million, down 2.6% on 2009.Water & GasWater & Gas reported turnover of € 156.2 million, 6.0% up compared to 2009. Growth stemmedprimarily from emerging markets.Wavin Technology & InnovationIn 2010, 14.6% of Wavin’s revenue came from products that have been on a specifi c market for less than fi veyears. Our research and development organisation, Wavin Technology & Innovation (T&I), forms an integral part ofthe newly established Marketing & Technology department and plays an essential role in the Group’s innovationefforts. With 55 employees, Wavin T&I engages in the full cycle of product and process development, in closecooperation with our business units and operating companies. A similar effort is made for local innovations atregional level. Several products were launched during the year and Wavin T&I was instrumental in thedevelopment of these. They include the next generation Hep 2O push-fi t fi ttings for hot and cold water supply, anextended range of fi lters for our Intesio Water Management solution, and Flexius pipes for surface heating andcooling systems. Testing facilities for water management and hot and cold water applications were expanded.

Wavin Annual Report 2010 | page 25CityLife,Milan, ItalyThe straight Isozaki tower, the crooked Hadid tower and the curved Libeskind tower. You only have tolook at the picture of the three skyscrapers towering over Milan’s skyline to know which is which.The three offi ce towers are the iconic elements of CityLife, the largest environmental and urbanredevelopment project in the recent history of Milan. The innovative complex, which includes offi ces,public facilities, luxury apartments and a Museum of Contemporary Art all set in a landscaped park,is being built by CityLife.Improving the quality of life of the people living in the area and working on the site throughout the buildis viewed as an important aspect of the project. In the building process CityLife is committed tomaintaining the best possible environmental conditions and level of security for both the workers andlocal residents.Wavin was selected for the sanitary water distribution system in the fi rst phase of the project using theTigris K1 press-fi t plumbing system which is especially suitable for applications in multiple-occupancybuildings and complex environments.Installation of Wavin’s Tigris K1 press-fi t plumbing system is fast, straightforward and safe: the heat-freejointing process means no soldering, welding or thread-cutting. And, once it is in use the combinationof metal and plastic layers in the piping and its fl exibility makes it resistant to oxygen diffusion, corrosion,scale build-up and stress-cracking.Tigris K1Tigris K1 improveson traditional,established plumbingsystems. It offersfast, heat-free securejointing and fewerfi ttings are required.Metal-Plastic pipesThe combination ofmetal and plasticlayers in the pipingand its fl exibilitymakes it resistant tooxygen diffusion,corrosion, scalebuild-up andstress-cracking.

Wavin Annual Report 2010 | page 26RegionsWavin’s regional structure now consists of four regions rather than six, with the mature WesternEuropean markets integrated into two to benefi t from scale and to realise synergies. The Nordic(excluding the Baltic states) and the North West Europe region (the Netherlands, Germany and Belgium)merged to form the new North West Europe region. Our UK/Ireland and South West Europe (France)regions have been combined into the new South West Europe region. In the emerging markets, theBaltic countries (Lithuania, Estonia and Latvia) were transferred from the Nordic to the Central & EasternEurope region. The South East Europe region remained unchanged.Integration ofWestern EuropeanregionsThis regional alignment will help us to both strengthen cross border activities and ensure cost effectiveoperations by harmonising and integrating processes and reducing complexity in the organisation.It will encourage faster roll-out of innovative products and concepts across our European markets andfacilitate ongoing optimisation of our manufacturing footprint.Results per regionRevenue (€ × 1 million) 2010 2009* CHANGENorth West Europe 405.8 410.1 (1.0%)South West Europe 370.1 342.2 8.2%Central & Eastern Europe 199.0 179.3 11.0%South East Europe 197.8 184.4 7.3%Overseas and Other 58.6 43.6 34.4%Total revenue 1,231.3 1,159.6 6.2%Ebitda (€ × 1 million)North West Europe 30.7 33.3 (7.8%)South West Europe 25.7 22.1 16.3%Central & Eastern Europe 28.8 28.5 1.1%South East Europe 9.0 12.5 (28.0%)Overseas and Other 9.9 14.0 (29.3%)Total Ebitda 104.1 110.4 (5.7%)Ebitda marginNorth West Europe 7.6% 8.1%South West Europe 6.9% 6.5%Central & Eastern Europe 14.5% 15.9%South East Europe 4.6% 6.8%Overseas and Other 16.9% 32.1%Total Ebitda margin 8.5% 9.5%* Comparative figures have been adjusted to reflect the changes in regional structure.North West Europe(the Netherlands, Germany, Belgium, Denmark, Norway, Sweden, Finland)(€ × 1 million) 2010 2009* CHANGERevenue 405.8 410.1 (1.0%)Like-for-like growth % (2.7%) (18.3%)Ebitda 30.7 33.3 (7.8%)Ebitda margin % 7.6 8.1* Comparative figures have been adjusted to reflect the changed regional structure.Revenue in the North West region fell by 1.0% to € 405.8 million. The market recovery in theScandinavian countries partly compensated for the sharp decline in the Netherlands. Ebitda came inat € 30.7 million, from € 33.3 million in 2009. The Ebitda margin dropped to 7.6%, from 8.1% in 2009.

Wavin Annual Report 2010 | page 27Difficult market inthe Netherlands;recovery inDenmarkWith the exception of the Netherlands, new build activities remained at low but stable levels, while theRepair, Maintenance and Improvement (RMI) market showed moderate growth. In the Benelux regionand Germany market positions were maintained. In Scandinavia many wholesalers have consolidatedtheir purchasing since the onset of the fi nancial crisis, and Wavin benefi ted from this trend due to itsstrong market position, broad portfolio and effective supply chain.In the Netherlands, the construction market faced a considerable downturn. Although all segmentsweakened, the residential market suffered particularly badly. Dutch consumer and producer confi denceremained low.With Tempower we launched a comprehensive solution for surface heating and cooling applications innew buildings. Intesio, our water management solution, was expanded further.The German building sector picked up. High stock levels held by competitors early in the year pushedprices down. In the infrastructure sector, local government austerity programmes had a negative impacton revenue development. In this environment Wavin Germany maintained market positions.In Belgium, the residential sector was stimulated by the government through tax advantages, both fornew build and renovation projects. Demand in the non-residential segment was still relatively low, ascompanies postponed investments. The infrastructure sector benefi ted from government investmentsin separated sewers and the extension of networks. Wavin took advantage of further substitution oftraditional materials with plastics through the introduction of the extended Tegra range of manholes andinspection chambers and further rollout of X-Stream, the drainage system for foul water and rainwater.Denmark recuperated after several years of decline. Wavin Denmark has a leading market position inbelow ground activities, for instance in the growing water management segment. With a strong productrange, intensive customer support and fl exible supply chain services progress is made in underfl oorheating. Wavin offers education and training in water management solutions in its Wavin SolutionsCentre, which was opened by the Danish Minister of Environment.In Sweden Wavin improved its position and has become a full range local supplier through theacquisition of the drinking water business of KWH, whose products will also be available in Norway.In Norway, we delivered a strong performance and increased our market share supported by favourablemarket conditions. The Wafi x soil and waste system was enhanced and we achieved a strong positionin cable ducting with a high quality programme.In Finland, Wavin further developed its niche position in tanks and separators.South West Europe(United Kingdom, Ireland and France)(€ × 1 million) 2010 2009* CHANGERevenue 370.1 342.2 8.2%Like-for-like growth % 6.1% (25.8%)Ebitda 25.7 22.1 16.3%Ebitda margin % 6.9% 6.5%* Comparative figures have been adjusted to reflect the changed regional structure.In the South West region, revenue increased by 8.2% to € 370.1 million. Revenue growth was driven bythe UK, where market conditions turned positive compared to the sharp decline witnessed in 2009.Ebitda was € 3.6 million ahead of last year at € 25.7 million. The margin was 6.9%, up from 6.5% in2009, driven mainly by volume increase in the UK, which more than compensated for the marginpressure in France.The UK construction market showed some signs of improvement, with total output rising by 3%compared to 2009, although recovery was mixed across sectors. Spending on new housing increasedby double digit, while spending on Repair, Maintenance and Improvement (RMI) rose marginally.The signifi cant market exposure of Wavin to the new housing market in the UK led to some gains in

Wavin Annual Report 2010 | page 28market share in above and below ground activities. Manufacturers’ overcapacity resulted in aggressivecompetition for more commoditised product areas. We retained a leading position in the above groundsegment and secured our number one position in the below ground business.We launched a number of key products in the UK, including the next generation Hep2O fi ttings forfl exible plumbing. Important project wins included the installation of an Intesio solution to manage stormwater runoff at Royal Mail’s new sorting offi ce. Wavin UK is also a supplier to Lend Lease in theStratford City regeneration project.Wavin UK retainedleading positionIn Ireland the economy continued to suffer. Construction output fell, almost 30% compared to thealready low level of 2009. Because of overcapacity, there was ongoing pressure on pricing. We launcheda range of new products in Ireland in 2010, including the Electro Fusion Fittings for Utility applications,and within the Hot & Cold segment the Tigris K1 press-fi t system, which were both very well received byour customers.France saw stabilisation of the residential construction market, but there was a severe drop in thenon-residential market. In the below ground market, contraction in public infrastructure spendingresulted in an overall market decline. Sales prices came under pressure, particularly at the low end of thebusiness.In the Water Management segment we won a substantial number of new projects related to our Intesiosolution for Water Management. Additionally, we launched the new Tegra 1000 NG inspection chamber,completing our offering of these fl exible and easy-to-install manholes that replace traditional concreteapplications.Central & Eastern Europe(Poland, Czechia, Russia, Slovakia, Ukraine, Lithuania, Estonia, Latvia and Belarus)(€ × 1 million) 2010 2009* CHANGERevenue 199.0 179.3 11.0%Like-for-like growth % 3.0% (17.4%)Ebitda 28.8 28.5 1.1%Ebitda margin % 14.5% 15.9%* Comparative figures have been adjusted to reflect the changed regional structure.Despite adverse weather conditions in the fi rst months and the last month of the year right across theregion, revenue grew by 11% from € 179.3 million to € 199.0 million in 2010, with strong growth realisedin Poland and the Baltic states. Ebitda for the year ended at € 28.8 million, slightly ahead of last year’s€ 28.5 million. The Ebitda margin dropped to 14.5%.Although the market in Poland was fi ercely competitive, Wavin managed to grow its volume share andenhanced its leadership position. Wavin Poland further increased sales of its Surface Heating & Coolingsolutions. Road projects in the country supported the infrastructure business, and we are involved instadium projects for the EURO 2012 football tournament.Strong growth inPoland and theBalticsCzechia was still in a recession. However, after a weak start of the year, both the domestic market aswell as the Russian export market showed some improvement. We launched a glass fi bre reinforced PPrHot & Cold water system, which was well received in the market, increasing our market competitivenessand improving margins. In the fourth quarter we merged the commercial activities of Wavin Czechia withthose of OSMA zpracování plastu in a sales joint venture, in which Wavin has a 65% controlling stake.The sales joint venture offers customers a full product range and holds a leading position in the Czechmarket.In Russia it proved to be a diffi cult year, with numerous residential and non-residential projects cancelledor postponed. Wavin maintained a strong position in Russia in PPr Hot & Cold water systems, mainlyexported from Wavin Czechia and Wavin Turkey, complemented with locally produced PPr pipes.

Wavin Annual Report 2010 | page 29South East Europe(Italy, Hungary, Romania, Turkey, Croatia, Bulgaria, Serbia)(€ × 1 million) 2010 2009 CHANGERevenue 197.8 184.4 7.3%Like-for-like growth % 3.9% (21.7%)Ebitda 9.0 12.5 (28.0%)Ebitda margin % 4.6% 6.8%Investments togain market sharein TurkeyEconomic conditions in the South East Europe region were challenging in 2010, with construction outputshrinking in many markets. Turkey was the only market in the region that saw growth. Revenue for theregion increased by 7.3% to € 197.8 million. Ebitda was seriously affected by the weak marketcircumstances in Italy, and margin pressure across the board. In Turkey we invested to gain marketshare resulting in strong revenue growth albeit at a lower margin level. Ebitda in the region dropped€ 3.5 million to € 9.0 million. The margin was down 220 bps to 4.6%.Italy witnessed ongoing decline in the construction sector. Given the overcapacity in the very fragmentedItalian market and the lack of a clear overall market leader, it was diffi cult to pass on the increases inresin prices. The specifi cation of the multi-layer Tigris K1 press-fi t plumbing system for the fi rst phase ofthe prestigious CityLife development in Milan was one of the highlights. We also put a great deal of effortinto improving supply performance and customer service levels.The diffi cult economic climate in Hungary caused the construction sector to slow down for the fi fth yearin a row. Wavin Hungary maintained its market leadership in both the above and below ground sectors.A major project was the Mercedes Benz factory in Hungary, for which Wavin designed and supplied a fullrange of water management and foul water systems. Local production in Romania started in January2010 and we saw double-digit revenue growth there, despite a declining market.The construction market in Turkey grew another 10% in 2010. Wavin recorded strong revenue growthand gained market share in both above and below ground activities. In this very competitive marketmargins were weak. The export business of Hot & Cold products to markets in Eastern Europe recordedmodest growth. Turkey expanded its local product range and is now cross selling other Wavin products.In total 140 new or improved articles were launched in 2010, including glass-reinforced multilayer PPrpipes, as well as fi ttings to enhance the Hot & Cold range, and soil and waste fi ttings.Overseas and OtherThe Wavin Group also comprises entities not part of the regional structure, such as Wavin Overseas,Wavin China and Group holding companies.(€ × 1 million) 2010 2009 CHANGERevenue 58.6 43.6 34.4%Like-for-like growth % 35.4% (37.1%)Ebitda 9.9 14.0 (29.3%)Ebitda margin % 16.9% 32.1%Increase oflicensee incomeWavin OverseasWavin Overseas is responsible for all commercial activities of Wavin outside Europe, and sells Wavinproducts and technologies worldwide through a network of 120 agents and licensees. Wavin Chinaactivities include production, sales and sourcing in Foshan.Wavin Overseas benefi ted from the recovery of overseas markets, revenue and licensee incomeincreased. One of the highlights for the year was a major order and delivery of PE pipes for a waterdistribution project in Ghana.

Wavin Annual Report 2010 | page 31Plan de Cuques,FranceBus lane keeps the town dry… and greenIt sounds contradictory – a bus lane keeping a town both dry and green. But in Plan de Cuques, a smalltown near the French city of Marseille that is exactly what is happening.Plan de Cuques wanted to fi nd a way to stop its streets being fl ooded when it rained – a fairly commonproblem in urban areas with mainly hard surfaces that do not allow excess water to soak into the groundnaturally. At the same time, Plan de Cuques aimed to keep the green areas it does have green in aneconomical and sustainable way – a problem when the average total rainfall in three months in thesummer adds up to less than two centimetres. This problem was solved with Intesio, Wavin’s watermanagement solution.The obvious answer is to store the rainwater and use it for irrigation. As rainwater needs no purifi cationbefore being used for irrigation it is an energy-saving, and therefore cost-saving option. But the onlyplace to put a large enough storage tank was under the bus lane, which made the project morecomplex. After conducting all the necessary surveys and drawing up the entire plan using its ‘Calculus’programme, Wavin created a buffer system comprising of a large number of Q-Bic infi ltration units andTegra inspection chambers.The system was easy to install, and to maintain thanks to its easy accessibility for regular (video)inspection and cleaning. It has a long life-cycle and all the plastic materials used in the system arerecyclable. And, of course, throughout the entire project from planning to installation Wavin’s expertswere on hand to provide the support to ensure the technically complex project ran smoothly.Wavin Tegra 1000The Wavin Tegra1000 is large enoughfor entry toinspection, cleaningand maintenance.Wavin Q-BicThe Wavin Q-Bicinfi ltration unit is fullymodular andinspectable.

Wavin Annual Report 2010 | page 32CorporateGovernanceThis chapter addresses the corporate governance structure of Wavin. The Wavin Corporate Governancestructure is based on the best practices as set out in the Dutch Corporate Governance Code(the ‘Code’). The Code can be downloaded from www.monitoringcommissie.nl.Compliance with the CodeWe intend to discuss every substantial change in the corporate governance structure as well ascompliance with the Code with the General Meeting of Shareholders. Changes, if any, will bediscussed as a separate agenda item at that meeting. All Corporate Governance documents canbe viewed and downloaded from the corporate website at www.wavin.com.Main deviationsWavin endorses the importance of good corporate governance and follows the vast majority of the rulesset by the Code. It has, however, been considered in the interest of the company and its stakeholdersnot to comply with the following best practice provisions:• The Company deviates with regard to existing members of the Management Board from bestpractice provision II.2.8, which provides that the maximum remuneration in the event of a dismissalof a Management Board member is one year’s base salary. The Company is bound by the terms ofthe employment contracts of these existing members of the Management Board, which wereconcluded prior to the IPO in 2006 and which provide severance payment conditions that mayexceed the above maximum. Upon unfair dismissal, Mr. Oomens will be entitled to 2 months’ totalsalary per year of service with a maximum of 12 months and Mr. Ten Hove will be entitled to aseverance payment, to be calculated in accordance with common practice in Dutch labour law(included but not limited to the so-called ‘kantonrechtersformule’), except in the situation where theaforementioned individuals have reached the age of 62. With regard to new appointments, thecompany will comply with best practice provision II.2.8. We hereby confi rm that the maximumremuneration in the event of a dismissal of Mr. Roef, whose appointment will be proposed to theAGM in April 2011, is limited to one year’s base salary.• The Chairman of the Supervisory Board also chairs the Remuneration, Appointment & CorporateGovernance Committee (RACG Committee). The Company therefore deviates from best practiceprovision III.5.11, which states that the chairman of the Supervisory Board shall not be chairmanof the remuneration committee. The Company considers the involvement of the Chairman of theSupervisory Board in matters concerning its nomination policy, the appointment of seniormanagement members and in corporate governance issues of such importance that his chairingof this committee with various tasks, justifi es a deviation from the Code.• Wavin deviates partially from best practice provision IV.1.1. This provision stipulates (among otherthings) that the general meeting of shareholders of a company not having a statutory two tier statusmay pass a resolution to dismiss a member of the management board or of the supervisory board byan absolute majority of the votes cast. It may be provided that this majority should represent a givenproportion of the issued capital, which proportion may not exceed one third. According to the Articlesof Association of the Company a resolution to dismiss or suspend a member of the ManagementBoard or Supervisory Board, other than on the proposal of the Supervisory Board, requires anabsolute majority of the votes cast representing more than 50% of the issued capital. The Companyis of the opinion that resolutions to dismiss Management Board and Supervisory Board membersshould be supported by the majority of shareholders as these decisions may change the continuityof the governance of the Company.Management BoardComposition and division of responsibilitiesUntil 17 August 2010, the Management Board consisted of four members. As per aforementioned dateMr. Taylor resigned as Management Board member. As per 1 October 2010 Mr. Ten Hove took over theposition as CEO and President from Mr. Houben who remained a member of the Management Boarduntil 31 December 2010 at which date he retired from the company.At the Annual General Meeting of shareholders of 2010, Mr. Houben was re-appointed for a periodending 31 December 2010 in order to facilitate a smooth transition of leadership. The other membersof the Management Board were re-appointed for another period of four years pursuant to best practiceprovision II.1.1.The internal division of responsibilities of the individual Management Board members can be found in theoverview which is attached as annex A to the Rules of the Management Board (see www.wavin.com).

Wavin Annual Report 2010 | page 33Management Board membersMr. H. (Henk) ten Hove – President of the Management Board & ChiefExecutive Officer (as per 1 October 2010) (Dutch, 1952)Previous position: Executive Vice President of the Management Board (until 31 September 2010)Appointed in 1999*, reappointed in 2006, reappointed in 2010 for a period of 4 yearsMr. W.H.J.C.M (Pim) Oomens – Executive Vice President of the Management Board & Chief FinancialOfficer (Dutch, 1956)Previous position: Chief Financial Offi cer and member of the Management Board of Royal Numico N.V.Appointed in 2004*, reappointed in 2006, reappointed in 2010 for a period of 4 yearsMr. Ph.P.F.C. (Philip) Houben – President of the Management Board & Chief Executive Officer(until 1 October 2010) (Dutch, 1950)Previous position: President of Tenneco Packaging EuropeAppointed in 2000*, reappointed in 2006, reappointed in 2010 for a period ending 31 December 2010Supervisory Board memberships: Supervisory Board member of TKH Group N.V.Mr. A.R. (Andy) Taylor – Executive Vice President of the Management Board(resigned on 17 August 2010) (British, 1955)Previous position: Managing Director Hepworth Ltd.Appointed in 2005*, reappointed in 2006, reappointed in 2010 for a period of 4 years* First appointment as member of the Management Board of the Wavin Group.On 27 April 2011 a proposal will be submitted to the AGM to appoint Mr. M.P.M. (Maarten) Roefas a new member of the Management Board for a period of 4 years. Mr. Roef’s previous position wasManaging Director North West Europe at Wavin.Appointment and dismissalOur Articles of Association provide that the General Meeting of Shareholders appoints members of theManagement Board, subject to the right of the Supervisory Board to make a non-binding nomination toappoint a Management Board member. In such an event, the General Meeting of Shareholders mayresolve, by a resolution passed with an absolute majority of the votes cast, to appoint the candidatenominated by the Supervisory Board. A resolution of the General Meeting of Shareholders to appointmembers of the Management Board, other than pursuant to the nonbinding nomination of theSupervisory Board, requires an absolute majority of the votes cast, representing more than 50% of theissued share capital. The Articles of Association further provide that the number of members of theManagement Board is determined by the Supervisory Board, and consists of a minimum of onemember.In view of the Corporate Governance Code, our Articles of Association provide that members of theManagement Board are appointed for a maximum term of four years, provided, however, that unlesssuch member of the Management Board has resigned at an earlier date, his term of offi ce shall lapse onthe day of the annual General Meeting of Shareholders to be held in the fourth year after the year of hisappointment. An appointment can be renewed for a term of no more than four years at a time.According to our Articles of Association, the General Meeting of Shareholders and the SupervisoryBoard may suspend Management Board members at any time. The General Meeting of Shareholdersmay dismiss Management Board members at any time. A resolution of the General Meeting ofShareholders to suspend or dismiss members of the Management Board pursuant to a proposal by theSupervisory Board requires an absolute majority of the votes cast. A resolution of the General Meetingof Shareholders to suspend or dismiss a member of the Management Board, other than pursuant to aproposal of the Supervisory Board, requires an absolute majority of the votes cast representing morethan 50% of the issued share capital.Approval of Objectives and StrategyAs is standard practice within Wavin, the Management Board has submitted to the Supervisory Boardfor review and approval (a) the operational and fi nancial objectives of the company, (b) the strategydesigned to achieve the objectives, (c) the parameters to be applied for measuring performance and (d)corporate social responsibility issues that are relevant to the enterprise. In 2010 a strategic review hastaken place (‘Strategy 2015’) in which the Supervisory Board was substantially involved.

Wavin Annual Report 2010 | page 34The operational and fi nancial objectives of the company are laid down in the budget. The 2010 budgetwas presented to and approved by the Supervisory Board during its December 2009 meeting.The 2011 budget was approved at the December 2010 meeting of the Supervisory Board. The Articlesof Association and the Rules for the Management Board contain clear overviews of all issues for whichthe Management Board is required to seek the prior approval of the Supervisory Board.Internal risk management and control systemWavin maintains an adequate administrative organisation that contains internal risk management andcontrol systems as well as a system of monitoring and reporting, and guidelines on internal fi nancialreporting. More information on risk management and Wavin’s internal control framework can be foundon page 43 of this report. The company has an accounting manual in place as well as an internalauthorisation system. A Code of Conduct has been available since 2002 and is published on thecompany website. Wavin employees have the opportunity to report alleged irregularities without havingto fear for their position. A Whistleblowers’ procedure is in place and can be viewed on the corporatewebsite.Statement of controlThe Statement of Control by the Management Board, including additional information, can be foundin the Risk Management paragraph starting on page 42 of this report.Membership of external Supervisory BoardsMr. Houben has been a member of the Supervisory Board of TKH Group N.V. since May 2009. TheManagement Board members hold no other Supervisory Board memberships of listed companies.Conflicts of interestAll employment contracts of the Management Board members contain non competition clauses,prohibiting them from performing activities that, directly or indirectly, confl ict with the company’sactivities. The Wavin Code of Conduct explicitly forbids accepting payments or gifts which may beinterpreted as a bribe. The Rules for the Management Board, the Wavin Rules on Insider Trading aswell as the Wavin Code of Conduct contain clear regulations on how to deal with possible confl ictsof interest.Loans and guaranteesAs a matter of policy, Wavin does not grant loans or guarantees to members of the Management Boardunless in the normal course of business, on terms applicable to the employees as a whole and only afterapproval of the full Supervisory Board. In 2010 no loans or guarantees were granted or outstanding tomembers of the Management Board.Employment contracts of the Management BoardThe Management Board members have employment contracts with Wavin B.V., a direct subsidiary ofWavin N.V. The employment contracts and the main conditions of employment for members of theManagement Board are reviewed periodically. All Management Board members have employmentcontracts for an indefi nite period of time, provided however that their contract will be terminated whenthe respective member reaches the age of 62.It should be noted that the indefi nite appointment as a statutory director of the company has beenchanged to an appointment for a period of 4 years as per October 2006, the listing date of Wavin N.V.Notice periods for the company have been agreed with each Management Board member, being3 months for Mr. Oomens and 6 months for Mr. ten Hove and Mr. Roef. The employment contracts ofMr. Ten Hove, Mr. Oomens and Mr. Roef determine that in case one resigns as a result of acquisition ofthe company or when the actual control of the company passes into other hands or in the event of othercomparable circumstances (‘change of control’) a fi xed severance payment will be payable. The fi xedseverance payment for Mr. Ten Hove and Mr. Oomens will be 12 months total salary whereas Mr. Roefwill recieve 12 months base salary. More information regarding severance payment arrangements for theindividual Management Board members can be found on page 32.

Wavin Annual Report 2010 | page 35Supervisory BoardThe duties of the Supervisory Board are to supervise the policies of the Management Board and theaffairs of the company and its affi liated enterprises. The Supervisory Board also assists the ManagementBoard by providing advice either at the request of the Management Board or on its own initiative.In performing its duties the Supervisory Board will be guided by the interests of the company and itsaffi liated enterprises, will take into account the relevant interests of the company’s stakeholders andwill use the fundamental principles of good entrepreneurship as a standard. The Supervisory Boardis responsible for the quality of its own performance. In addition, certain material decisions of theManagement Board, as specifi ed in the Articles of Association and the Rules for the ManagementBoard, are subject to prior approval by the Supervisory Board. Since 2004, the Supervisory Board hasoperated under its own regulations: the rules for the Supervisory Board. These regulations are availableon the corporate website.The Supervisory Board of Wavin N.V. consists of fi ve members (minimum: three) who are appointed bythe General Meeting of Shareholders for four years, after which he/she may be reappointed for twofurther periods of four years. The composition of the Supervisory Board did not change during the yearunder review.The table below shows the rotation schedule of the Supervisory Board members.NAME DATE OF FIRST APPOINTMENT CURRENT TERM ENDSMr. P.C. van den Hoek 11 May 1999 2011Mr. R.A. Ruijter 11 December 2007 2012Mr. B.G. Hill 13 September 2005 2013Mr. R.H.P.W. Kottman 12 October 2006 2014Mrs. B. Stymne Göransson 11 December 2007 2012Mr. P.C. van den Hoek has been the Chairman of the Supervisory Board since 1999. As his third term of4 years will end in 2011, he will no longer be available for reappointment. At the Annual General Meetingof Shareholders on 27 April 2011 the Supervisory Board will propose to appoint a new member of theSupervisory Board of Wavin for a period of 4 years.The Supervisory Board of Wavin, in accordance with clause 19.1 of the Articles of Association, hasresolved to appoint Mr. Kottman as the new chairman of the Supervisory Board as per 27 April 2011.Information regarding the Supervisory Board membersMr. P.C. (Paul) van den Hoek – Chairman (Dutch, 1939)Remuneration, Appointment & Corporate Governance Committee (Chairman)Previous position: senior partner at international law fi rm StibbeAppointed in 1999, current term ends in 2011Other Supervisory Board memberships: Chairman of the Supervisory Board of AON GroepNederland B.V.Mr. B.G. (Brian) Hill – Vice-Chairman (Irish, 1944)Audit & Investment Committee (Chairman)Previous Position: Group Managing Director, Products & Distribution CRH Plc.Appointed in 2005, re-appointed in 2009, current term ends in 2013Other Supervisory Board memberships: non-executive Director at Kingspan Plc.Mr. R.H.P.W. (René) Kottman (Dutch, 1945)Remuneration, Appointment & Corporate Governance CommitteePrevious position: Chief Executive Offi cer, Ballast Nedam N.V.Appointed in 2006, re-appointed in 2010, current term ends in 2014Other Supervisory Board memberships: Delta Lloyd N.V. (Chairman), Keyrail B.V. (Chairman),Warmtebedrijf Rotterdam N.V. (Chairman) and Altera Vastgoed B.V. (Chairman).Other Board memberships: MCA-Gemini Group Hospital (Chairman) (until 1 April 2011), De BaakManagement Centrum (until 1 April 2011), Advisory Board Noord/Zuidlijn Amsterdam (Chairman)

Wavin Annual Report 2010 | page 36Mr. R.A. (Rob) Ruijter (Dutch, 1951)Audit & Investment CommitteePrevious position: Interim CFO at ASM International N.V. (until 31 August 2010)Appointed in 2007, current term ends in 2012Other Supervisory Board memberships: Unit 4 N.V.Other Board memberships: Advisory Board Verdonck, Klooster & Associates,Stichting Continuïteit Delta LloydMrs. B. (Birgitta) Stymne Göransson (Swedish, 1957)Audit & Investment CommitteeCurrent position: CEO of Memira GroupAppointed in 2007, current term ends in 2012Other Board memberships: Arcus ASA, and Elekta ABAppointment and dismissalSupervisory Board members are appointed by the General Meeting of Shareholders. The Articles ofAssociation provide that the General Meeting of shareholders may suspend or dismiss SupervisoryBoard members at any time. A resolution of the General Meeting of shareholders to suspend or dismissmembers of the Supervisory Board pursuant to a proposal by the Supervisory Board requires anabsolute majority of the votes cast. A resolution of the General Meeting of shareholders to suspend ordismiss a member of the Supervisory Board other than pursuant to a proposal of the Supervisory Boardrequires an absolute majority of the votes cast representing more than 50 percent of the issued sharecapital.Independence and conflict of interestWavin complies with best practice III.2.1 of the Dutch Corporate Governance Code, which states thatall but one Supervisory Board members should be independent from the company. All SupervisoryBoard members are considered to be independent from the company. There are no interlockingdirectorships, nor are or were any Supervisory Board members employed by the company. The rulesfor the Supervisory Board contain provisions regarding potential confl icts of interest. In the year underreview there were no occurrences with a potential confl ict of interest.Loans and guaranteesAs a matter of policy Wavin does not grant loans or guarantees to members of the Supervisory Boardunless in the normal course of business and after the approval of the full Supervisory Board.Loans may not be remitted. In 2010 no loans or guarantees were granted or outstanding to membersof the Supervisory Board.Fixed remunerationAs provided in the Rules for the Supervisory Board, none of its members receives remuneration that isdependent on the fi nancial performance of Wavin. The Wavin Rules on Insider Trading require thatindividual shareholdings in the company shall only be held for long term investment purposes. None ofthe Supervisory Board members holds any option rights to acquire shares in Wavin.ProfileA profi le setting out the required experience, expertise and background of individual Supervisory Boardmembers is in place. More information on the Profi le can be found on page 69. The full Profi le can befound on the corporate website.Company SecretaryThe Supervisory Board is assisted by Mr. S.H.A.J. Beckers, Company Secretary. The position and role ofthe Company Secretary has been laid down in the Supervisory Board rules, which can be found on thecorporate website.

Wavin Annual Report 2010 | page 37Supervisory Board committeesGiven the requirements of the Wavin organisation and the size of the Supervisory Board, the committeesof the Supervisory Board have been arranged in a different way than recommended by the DutchCorporate Governance Code. Instead of three separate committees, an Audit & Investment Committeeand a Remuneration, Appointment & Corporate Governance Committee have been established.Audit & Investment CommitteeIn 2010 the Audit & Investment Committee consisted of Mr. B. Hill (chairman), Mrs. B. StymneGöransson and Mr. R.A. Ruijter (who qualifi es as the fi nancial expert as stipulated by the DutchCorporate Governance Code). The Audit & Investment Committee assists the Supervisory Board withmonitoring the systems of internal control, the integrity of the fi nancial reporting process and the contentof the fi nancial statements and reports and in assessing and mitigating the business and fi nancial risks.Furthermore, it also advises the Supervisory Board regarding large capital projects with a value of morethan € 2.5 million and acquisitions with a value of more than € 5 million. The Audit & InvestmentCommittee also approves all medium sized investments with a value of between € 1 million and€ 2.5 million. The Audit & Investment Committee focuses on the activities of the Management Boardwith respect to (i) the operation of the internal risk management and control system, includingsupervision of the enforcement of the relevant legislation and regulations, and supervision of theoperation of codes of conduct; (ii) the provision of fi nancial information by the company (choice ofaccounting policies, application and assessment of the effects of new rules, information about thehandling of estimated items in the annual accounts, forecasts, work of external auditors, etc.), (iii)compliance with the recommendations and observations of external auditors, (iv) the policy of thecompany on tax planning, (v) relations with the external auditor, including, in particular, his independence,remuneration and any non-audit services for the company, (vi) the fi nancing of the company, (vii) theapplications of information and communication technology (ICT) and (viii) material investmentsconsidered by the company.The rules for the Audit & Investment Committee were adopted on 26 September 2006 and amendedon 17 December 2009.Remuneration, Appointment & Corporate Governance CommitteeIn 2010 the Remuneration, Appointment & Corporate Governance Committee (RA&CG Committee)consisted of Mr. P.C. van den Hoek (Chairman) and Mr. R. Kottman. The RA&CG Committee advisesthe Supervisory Board on the remuneration of the members of the Management Board and monitors theremuneration policy. In particular the RA&CG Committee advises the Supervisory Board on the selectioncriteria and appointment procedures for members of the Management Board and members of theSupervisory Board. Proposals for appointments and reappointments, the policy of the ManagementBoard on selection criteria and appointment procedures for senior management and the assessmentof the functioning of individual members of the Supervisory Board and the Management Board are alsothe responsibility of the RA&CG Committee. It also advises the Supervisory Board on Wavin’s corporategovernance structure. The duties of the RA&CG Committee include (i) drafting a proposal to theSupervisory Board for the remuneration policy to be pursued, (ii) analyzing the possible outcomes ofthe variable remuneration components and how they may affect the remuneration of the membersof the Management Board before preparing a proposal, (iii) drafting a proposal for the remuneration ofthe individual members of the Management Board, for adoption by the Supervisory Board, (iv) preparingthe remuneration report as referred to in best practice provision II.2.12. of the Code, (v) drawing upselection criteria and appointment procedures for Supervisory Board members and Management Boardmembers, (vi) periodically assessing the size and composition of the Supervisory Board and theManagement Board, and proposing a composition profi le of the Supervisory Board, (vii) periodicallyassessing the functioning of individual Supervisory Board members and Management Board members,and reporting on this to the Supervisory Board; (viii) making proposals for appointments andreappointments; (ix) supervising the policy of the Management Board on the selection criteria andappointment procedures for senior management; and (x) monitoring corporate governancedevelopments.The rules for the RA&CG Committee were adopted on 26 September 2006 and amended on17 December 2009.

Wavin Annual Report 2010 | page 38Remuneration of the Supervisory BoardIn 2010, the remuneration of the Supervisory Board amounted to € 50,000 annually for the Chairmanplus a € 2,500 fi xed expense allowance and € 35,000 annually for the other members plus a € 2,000fi xed expense allowance.ShareholdingsShares owned by Supervisory Board and Management BoardCertain members of the Supervisory Board and all members of the Management Board have invested inthe company. As per 31 December 2010 their combined holding was 635,110 shares (approximately1.25% of the outstanding share capital) divided as follows:Mr. Van den Hoek 33,839 sharesMr. Hill 16,922 sharesMr. Ten Hove 119,562 sharesMr. Oomens 188,729 sharesMr. Houben 244,231 sharesMr. Roef 31,827 sharesMeetings of ShareholdersGeneral Meetings of Shareholders shall be convened by the Supervisory Board or the ManagementBoard in accordance with the applicable legislation and regulations and with due consideration of theapplicable terms. The Articles of Association contain provisions concerning registration as a recognisedparty entitled to attend and to vote at a General Meeting of Shareholders.Annual General Meeting of ShareholdersOn 21 April 2010 an Annual General Meeting of Shareholders was held at the Rosarium in Amsterdam.The agenda, the minutes and the voting results can be found on www.wavin.com.Takeover DirectiveThe information required by Article 2:391, paragraph 5 of the Dutch Civil Code, as further elaborated inArticle 1 of the Decree Implementing Article 10 of the Takeover Directive can be found in the CorporateGovernance statement on our corporate website.Issue and acquisition of sharesIssue of ordinary sharesUnder the Articles of Association, shares, or granted rights to subscribe for shares, may only be issuedpursuant to a resolution of the General Meeting of Shareholders on a proposal of the ManagementBoard, subject to the prior approval of the Supervisory Board. The General Meeting of Shareholders maydelegate the authority to issue shares, or grant rights to subscribe for shares, to the Management Board,subject to the approval of the Supervisory Board. Pursuant to the Dutch Civil Code, the period ofdelegation may not exceed fi ve years. Such authority may be renewed by a resolution of the GeneralMeeting of Shareholders for a subsequent period of up to fi ve years each time. Unless specifi edotherwise in the resolution, this authority is irrevocable. The resolution authorising the ManagementBoard must specify the amount and the class of shares which may be issued must be determined.On 21 April 2010 the General Meeting of Shareholders resolved to designate the Management Board asthe corporate body which, subject to the prior approval of the Supervisory Board, is authorized to issueordinary shares, including the granting of any share subscription rights and to restrict or exclude thepre-emptive rights of shareholders in the case of an issue of ordinary shares. The designation applied toten percent (10%) of the aggregate nominal value of the outstanding ordinary shares at the time of issue,to be increased with an additional ten percent (10%) if the issue occurs on the occasion of a merger oran acquisition, in the meaning as described above. The authorisation was provided for a period of18 months, starting 21 April 2010 and ending 21 October 2011. No resolution of the General Meetingof Shareholders or the Management Board is required for an issue of shares pursuant to the exerciseof a previously granted right to subscribe for shares.Acquisition of sharesThe company may acquire its own fully paid shares at any time for no consideration (‘om niet’), or,subject to certain provisions of Dutch law and the Articles of Association, if (i) the shareholders’ equityless the payment required to make the acquisition, does not fall below the sum of called-up and paid-inshare capital and any statutory reserves, (ii) the company and its subsidiaries would thereafter not hold

Wavin Annual Report 2010 | page 39shares or hold a pledge over its shares with an aggregate nominal value exceeding 50% of the issuedshare capital, and (iii) the Management Board has been authorised thereto by the General Meeting ofShareholders. Authorisation from the General Meeting of Shareholders to acquire shares must specifythe number and class of shares that may be acquired, the manner in which shares may be acquired andthe price range within which shares may be acquired. Such authorisation will be valid for no more than18 months.On 26 September 2006, the General Meeting of Shareholders authorised the Management Board toacquire Wavin shares up to the maximum permitted by the Dutch Civil Code and the Articles ofAssociation for a consideration of at least € 0.01 per share and which may not exceed the averageclosing price of Shares on Eurolist by Euronext during fi ve consecutive days preceding the day ofrepurchase increased by 10%. Any shares the company holds in its own capital may not be voted orcounted for voting quorum purposes. Without prejudice to the boundaries stipulated by law and theArticles of Association, after a repurchase Wavin will not hold more than 10% of the outstanding capitalat the time of the repurchase. Most recently the authority was extended at the Annual General Meetingof Shareholders on 21 April 2010, subject to the prior approval of the Supervisory Board, until 21October 2011.Special rights provided for by the Articles of AssociationProtective measuresWavin’s principle defence against (any action which might lead to) a threat to its continuity is thecompany’s ability to issue preference shares to the Stichting Preferente Aandelen Wavin (the‘Foundation’). Such preference shares will be issued, should the Foundation exercise its call option right.On 11 October 2006, the General Meeting of Shareholders of Wavin resolved to grant this option right tothe Foundation. The Call Option Agreement does not contain any conditions that must be met beforeexercising the option right. According to aforementioned agreement, the number of preference shares tobe issued may amount to 100% of the total number of ordinary shares outstanding at the time ofplacing. If preference shares are issued, a General Meeting of Shareholders will be convened no laterthan twelve months thereafter. At that meeting, purchase and withdrawal of the preference shares will beconsidered. The Foundation was formed under the laws of the Netherlands and its statutory purpose isto enhance the continuity and identity of the company. In short, the Foundation looks after the interestsof the company, its associated enterprises and all other stakeholders, such as shareholders andemployees. The Foundation is independent in the sense of the Dutch Financial Markets Supervision Act(Wet Financieel Toezicht) and is neither owned nor controlled by another legal entity. The Foundation hasthe right to fi le an application for an inquiry into the policy and conduct of business of the company withthe Enterprise Chamber of the Amsterdam Court of Appeal (Ondernemingskamer). The Board ofthe Stichting Preferente Aandelen Wavin consists of Mr. W. Stevens (chairman), Mr. D. Kalff andMr. A. Westerlaken.The Management Board intends to comply with best practices II.1.9. and II.1.10 of the CorporateGovernance Code, meaning that it will reply to a request from a shareholder to place an item on theagenda of the shareholders meeting within a maximum period of 180 days. In case of a public offerthe Management Board will include the Supervisory Board timely and closely in the process.Appointment of the external auditorAt the Annual General Meeting of Shareholders held on 21 April 2010, PricewaterhouseCoopersAccountants N.V. (PwC) was appointed as the company’s external auditor for a period of one year,expiring at the next Annual General Meeting of Shareholders.Corporate Governance StatementAccording to the Governmental Decree of 20 March 2009 (‘Besluit van 20 maart 2009 tot wijziging vanhet Besluit van 23 december 2004 tot vaststelling van nadere voorschriften omtrent de inhoud van hetjaarverslag, ter uitvoering van Richtlijn 2006/46/EG van het Europees Parlement en de Raad van14 juni 2006, tot wijziging van de Richtlijnen 78/660/EEG, 83/349/EEG, 86/635/EEG en 91/674/EEGbetreffende de jaarrekening en de geconsolideerde jaarrekening (PbEU L 224’) (‘the Decree’), Wavinhas published a statement on corporate governance (the ‘Corporate Governance Statement’) on thecorporate website.

Wavin Annual Report 2010 | page 41Mercedes Benzfactory, HungaryIn 2012, the fi rst cars will roll off the assembly line of a new Mercedes Benz factory inKecskemét, Hungary. This factory will produce the successor models of today’s A and B class.The Kecskemét plant consists of eight buildings including a press shop, a welding shop, a paintshop and an assembly hall as well as logistics halls.In addition to all the infrastructural systems needed for a development of this size, there is a total roofarea of 250,000 square metres from which rainwater must be dispersed. Quickly. And cost-effi ciently,because the largest foreign investment in Hungary’s history was committed to just before the fi nancialcrisis really started taking a hold.With its pan-European reach and a proven track record in projects of this scale, Wavin provedthe right partner for both the German architect and the Hungarian contractors.Wavin QuickStream, the siphonic roof drainage system for the fast dispersal of largequantities of rainwater, was chosen as the ideal solution to protect the large fl at roofs of thebuildings from bearing too much water. One of the main advantages of the siphonic is thatsmaller pipes are suffi cient, which saves material and space and offers more freedom forthe designer.For sewer and infrastructure applications in the development, Wavin also provided the KG-PVCpipes to discharge the collected water from the roof into open-air infi ltration ponds.The reason why Wavin KG-PVC pipes were chosen is the high fl exibility and durability ofthe system built from solid wall components.QuickStreamQuickStream roofoutlets prevent airfrom entering thepipe system whichmakes it possibleto use smallerdimensions andreduces the totalpipe lengthneeded.Sewer SystemsWavin sewersystems withpush-fi ttechnology enablestraightforwardinstallation whileensuring tight andsecureconnections.

Wavin Annual Report 2010 | page 42RiskManagementWe are a performance driven company that continuously explores growth opportunities. Wavinacknowledges that managing risks is an essential element of doing business. Accepting certain riskis a prerequisite for achieving operational and fi nancial objectives. The objective of the Wavin riskmanagement and internal control framework is to identify, with a reasonable level of assurance, andmanage effectively risks to which the business is exposed. The risk management and internal controlframework is considered to be in balance with our risk profi le, although such systems can never provideabsolute assurance. They do contribute towards a more effective and transparent organisation and theadequacy and effectiveness of our framework is reviewed regularly.Risk responsibilitiesThe Management Board, under the supervision of the Supervisory Board, has overall responsibility forthe risk management and control framework within the company. The Management Board regularlyassesses Wavin’s risk profi le and risk control framework including system improvements and theirimplementations. Regional and operating company management teams are responsible for managingperformance as well as underlying risks and mitigating controls, within the guidelines set by theManagement Board. The Group Finance department verifi es this. It assesses the developments andtests the effi ciency of the implemented processes. Material inadequacies are recorded, followed upand corrected. Furthermore, the external auditor assesses the internal controls of fi nancial reportingas far as such an assessment is effi cient for their fi nancial statement audit approach.The Supervisory Board’s Audit & Investment Committee evaluates the adequacy of Wavin’s risk andcontrol framework. There were no signifi cant changes in the company’s risk management and internalcontrol framework during 2010 and no major failures were reported. In the December meeting, the Audit& Investment Committee approved a project to further enhance Wavin’s risk management and internalcontrol framework.Risk management and internal control frameworkAn internal risk management and control framework is in place to ensure risks are identifi ed andmanaged and that objectives are met in compliance with applicable law and regulations. This controlframework is based on policy documents, manuals and procedures. The main elements of the controlframework are:Company objectivesCompany objectives form the basis for the risk management and control framework. These areformulated and communicated to the organisation by the Management Board. All Wavin operatingcompanies must operate in accordance with these objectives and report deviations. The companyobjectives are reviewed at regular intervals and amended where necessary.Corporate governanceWavin’s corporate governance policy is based on the best practices as set out in the Dutch CorporateGovernance Code (page 32 of this annual report). Wavin endorses the importance of good corporategovernance and complies to the vast majority of the rules set by the code. It has however, beenconsidered in the interest of the company and the stakeholders to deviate from a limited number of bestpractice provisions. In addition to general Corporate Governance requirements, Wavin’s RiskManagement and Control framework also contains the following specifi c components:Wavin Code of ConductThe Wavin Code of Conduct sets out a number of ethical values to which Wavin subscribes. It is notall-encompassing but rather formulates minimum ethical standards which are to be interpreted within theframework of local laws and customs. The text of the Code of Conduct is available on the company’swebsite.

Wavin Annual Report 2010 | page 43Whistle-blower’s procedureThe whistle-blower’s procedure ensures that any alleged infringement of the existing policy andprocedures may be reported without the person making the report suffering any negative consequencesof his or her action. The text of the whistle-blower’s procedure is available on the company’s website.Disclosure of price-sensitive information policyAll public fi nancial disclosures made by Wavin should be accurate, complete and timely. They shouldpresent, in a fair manner and in all material aspects the company’s fi nancial condition, results and cashfl ows, and meet any other legal, regulatory or stock exchange requirements. The Chief Executive Offi cerand the Chief Financial Offi cer are supported by the Company Secretary, the Director CorporateCommunication and the Corporate Director Investor Relations and Treasury in fulfi lling Wavin’sresponsibilities regarding the identifi cation and disclosure of material information and the accuracy,completeness and timeliness of the fi nancial statements.Rules on insider tradingAs a listed company, Wavin N.V. has drawn up rules governing the possession of and transactions inshares of Wavin N.V. by any person who works for or on behalf of Wavin as such persons might becomeprivy to confi dential information, which may qualify as Inside Information or Price Sensitive Information.To prevent Inside Information from being used in personal investments employees have been instructedhow to avoid any kind of entanglement of business and personal interests. Any violations of theseregulations may lead to employment sanctions or criminal sanctions.Organisation structureWithin the Wavin Group all internal tasks, responsibilities and authorisations are defi ned in theorganisational structure. A uniform internal authorisation system is in place and consists of individualauthorisation schedules which provide a clear insight into the limits of spending allowed per authorisedindividual employee. Compliance with this system is checked by regular reviews.Planning and control cycleStrategic plans, budgets and forecasts are prepared at fi xed times during the year for all entities ofthe Wavin organisation. Financial results and other key performance indicators are reviewed monthly.The performance is compared with the previous year and tested against the budgeted targets. Regularforecasts are submitted and their impact assessed. This planning and control cycle, which is based onfi nancial and non-fi nancial reporting, enables local management teams and the Management Board todirect and control the operational activities in an effi cient manner.Accounting and Reporting manualThe Accounting and Reporting manual contains a detailed description of the guidelines for managementreporting and external fi nancial reporting. This manual also includes a standard format for accounts toensure consistent and uniform reporting. In addition to the Accounting and Reporting manual there areseveral other manuals, relating to aspects such as treasury, insurance and capital expenditure.Quality assurance proceduresWavin applies quality assurance standards like ISO 9000 and 9001. In accordance with these standards,regular reviews and assessments are undertaken by external certifi cation companies.Wavin also operates a Total Productive Management (TPM) programme with the objective of structurallyminimising production losses, including quality defects. This is monitored continuously via internalreviews.Health, Safety and EnvironmentWavin has a clearly defi ned HSE policy, which is applicable to all Wavin companies. The company has anHSE Working Group with regional representatives. This Group is responsible for deploying the policy tothe regions and monitoring progress. The standards implemented by Wavin are often more stringentthan national and international standards and are well in excess of the statutory minimum requirements.In accordance with the HSE policy, all Wavin companies have HSE management structures that complywith ISO 14001 or similar. These structures are monitored by way of frequent internal audits. For furtherinformation regarding the HSE policy, please see the Corporate Social Responsibility chapter on page 50of this report.

Wavin Annual Report 2010 | page 44Information management and security measuresWavin’s ability to provide customers with products and services and manage operations continuouslydepends on the uninterrupted operation of IT systems. The Wavin activities increasingly operate acrossborders and across business functions. This requires a uniform and consistent exchange of information.To enable this, Wavin developed a common information system (SAP) that is gradually implementedthroughout the company.Governance structure for monitoring the functioning of the IT systems and to respond to developmentrequirements and extensions to the systems are in place. Technical and infrastructural IT standards toenable information systems to communicate internally and with our trading partners are mandatory.Systems, standards and IT performance are monitored and reviewed quarterly by the IT SteeringCommittee under the supervision of the Chief Financial Offi cer. The results are shared with theAudit & Investment Committee of the Supervisory Board annually.TaxWavin has an enforcement covenant with the Dutch tax authorities as part of the ‘horizontal supervision’project initiated by the Dutch Ministry of Finance on the basis of which existing cooperation is furtherenhanced. This results in an intensive exchange of information and preliminary consultations on matterswith potentially material tax consequences. This form of cooperation fi ts within Wavin’s policy on riskmanagement in respect of taxation. In the other jurisdictions in which Wavin operates the companypursues, where possible, a proactive policy in order to minimise any uncertainties regarding the taxpositions.InsuranceWavin has underwritten a general insurance programme to cover risks that may occur despite adequaterisk control measures, Wavin has an in-house insurance company for this purpose, Wavin AssurantieB.V., which insures major operating risks with independent insurance companies. Wavin Assurantieworks together with independent insurance brokers and providers of insurance-related services.The policies cover risks resulting from property damage, business interruption, or third-party liabilityincluding product liability and a number of other specifi c risks.Audit & Investment CommitteeThe Audit & Investment Committee, which consists of three members of the Supervisory Board,independently monitors the process of risk management on the basis of the supervisory role of theSupervisory Board. The aspects on which the Audit & Investment Committee focuses include the qualityof internal and external reporting, the effectiveness of internal controls and the functioning of the externalauditor. The Audit & Investment Committee meets three times a year. The CFO, relevant fi nancial offi cersand the external auditor are invited to attend those meetings. Please see page 69 for more informationabout the Audit & Investment Committee.Role of the external auditorThe external auditor carries out the requisite activities for the issue of an auditor’s report accompanyingthe fi nancial statements. The external auditor focuses on the fi nancial reporting, but also assesses theaccounting principles that have been applied and the adequacy of the internal controls to ensure thatthe fi nancial statements are free of material misstatements. The audit report and management letterhave been discussed with the Audit & Investment Committee and have been presented to theSupervisory Board.Letter of RepresentationEach year all operating company managing directors and fi nancial directors sign a detailed statementwith regard to fi nancial reporting, internal controls and ethical principles. Any observations made inthis statement are reported to and discussed with the Management Board and the Audit Committee.

Wavin Annual Report 2010 | page 45Principal risksWavin sells and manufactures a wide range of plastic pipe systems and solutions with a high level ofcommon materials and uniform processes in operations that are located in mature and emergingEuropean markets. These markets are exposed to varying degrees of risk and uncertainty some ofwhich, if not identifi ed and managed, could have a material impact on an individual operating company,but may not materially affect the Group as a whole.Under the explicit understanding that this is not an exhaustive summary, major risk factors such asstrategic, operational and fi nancial risks are described below.Strategic risksGeographic exposureWavin is dependent on the development of the construction sector in the countries in which we operate.All countries have their own economic cycle infl uenced by, amongst other factors, mortgage rates,house prices, consumer confi dence, urbanisation, the number of housing transactions and changinglegislation. Our business is concentrated in Europe where exposure to political, economic and legal risksis relatively low. The emerging economies in Europe, where we realise approximately 27% of revenue,are subject to greater risks and volatility than more mature markets. Our presence in 26 countriesmitigates our exposure to the construction cycle in any single country.Construction market exposureActivity levels in construction markets are a major driver for Wavin. The level of activity varies by marketdepending on many factors including general economic conditions, the availability of credit to fi nancebuilding activities, development of housing prices, mortgage and other interest rates, unemployment,demographic trends, weather and consumer confi dence. Wavin is active in the new-build market and inthe repair, maintenance and improvement (RMI) market for residential and non-residential developments.We are also a major player in the infrastructural construction segment. The RMI segment andinfrastructure activities tend to be less sensitive to economic cycles than new-build activities.Approximately 60% of revenue is derived from residential construction (new-build and RMI) and 40%from non-residential and infrastructural construction.Customer concentrationAmidst the consolidation in the distribution business, Wavin’s ten largest customers represented28% of revenue in 2010 (2009: 32%). The other 72% of revenue was divided over a wide customerbase.Wavin operates closely together with its distributors to service them optimally through ourEuropean presence, comprehensive product range and effective supply chain management. It iscompany policy to limit inordinate dependency on individual clients. Relationships with key customersare regularly monitored at local and group levels.Operational risksRaw material price volatilityIn the manufacturing of its products, Wavin uses large quantities of polymers such as polyvinyl chloride,polyethylene, polypropylene and polybutylene. Polymers are subject to price fl uctuations not only due tothe oil price developments but especially due to the supply and demand situation.In 2010 Wavin spent € 621 million on raw materials, components and trading articles, which representsaround 50.6% (2009: 47.9%) of revenue. The price of raw materials typically changes on a monthlybasis. Contracts do not protect Wavin from price fl uctuations.As one of the largest purchasers of polymers, Wavin follows developments closely. We use our Europeanmarket leadership to pass on structural raw material price fl uctuations. Historically the company haspassed on a signifi cant portion of the fl uctuations in polymer prices to its customers, albeit with a certaindelay, which has led to short-term impacts on the fi nancial performance. In current markets intensifi edcompetition at the low end of the business, has stretched the time lag in passing on raw material prices.Product defect and warrantyWavin develops complex piping, gas and water control systems which could be affected by design ormanufacturing defects or other errors or failures. This is particularly a risk with new or upgradedproducts or services as Wavin’s strict quality control procedures, or those of a component supplier,could fail to test for all possible conditions of use, or to identify all defects in the design, engineering orspecifi cations of these products. (As an innovative company, some 15% of our revenue is realised fromproducts no older than fi ve years.) Wavin has stringent development and testing criteria and procedures

Wavin Annual Report 2010 | page 46for both manufactured and bought-in materials and products. In 2010, our warranty costs were€ 1.4 million, (2009: € 1.6 million).Extensive insurance coverage mitigates the fi nancial risks of product defects and warranty.Manufacturing and operationsWavin has production plants in 18 countries and sales offi ces in 8 additional countries throughoutEurope and one in China. As a result, the company needs to manage a number of risks, such asdiffering labour regulations, environmental and other regulatory requirements and intellectual propertyprotection. The success of Wavin’s business depends, in part, upon our ability to succeed in thesediffering and sometimes fast-changing economic, regulatory, social and political environments.The company has well established local organisations and consistent internal policies to managethese operational risks in the various constituencies.Wavin is implementing optimisation and plant rationalisation projects and pursuing various initiativesaimed at improving its operating and fi nancial performance. Throughout the Group the company hasundertaken a number of optimisation and rationalisation projects, which are focused on integratingcomplementary sites and facilities, streamlining operations and reducing working capital needs.Careful planning and control and past experience limit the inherent risk of these transition processes.A major part of revenue is generated through products manufactured in our plants. To minimise therisks of property damage and business interruption, high prevention levels are maintained. Extensiveinsurance coverage mitigates the fi nancial risks of property damage and business interruption.Financial risksIn this paragraph the main fi nancial risks are described. Detailed descriptions and sensitivity analysesof these identifi ed risks are disclosed in note 4 of the Group Financial Statements.Financing and liquidityFinancing strategies are continuously assessed to ensure suffi cient capital for fi nancing long term growthas well as seasonal working capital requirements. Wavin’s main source of fi nancing is a syndicated loanfacility of € 500 million that expires in October 2011 and a Forward Start Facility of € 475 million startingin October 2011 and expiring in April 2013. The facilities consist of a term loan and revolving facilities.Compliance with the fi nancial covenants of the facility is critical as non-compliance would result in apossible cancellation of the facility and drawn amounts might become due and payable immediately.Tight controls regarding costs, cash, working capital and capital investments are in place. At the end ofthe year the company was well within the fi nancial ratios agreed with its lenders, with a net debt level of€ 256 million and a leverage ratio of 2.27.Foreign currenciesWavin operates internationally and uses the Euro as its reporting currency. In 2010, approximately 59%of revenue was denominated in currencies other than the Euro. Consequently the translation risk ofnon-Euro results to the Euro is the most signifi cant currency risk. In particular, currency fl uctuations ofthe Pound Sterling, the Polish Zloty, the Hungarian Forint, the Turkish Lira, the Czech Koruna and theDanish, Norwegian and Swedish Kroner as well as the US Dollar could materially affect the companyresults.Wavin has defi ned clear policies regarding foreign exchange exposure. To limit the short term impact ofcurrency fl uctuations on our operations our transactional exchange risks are, to a large extent, hedgedon a rolling annual basis. For the fi rst three months of the forecasting period we hedge from 60% to 80%of our exposure. For the remaining nine months of the forecasting period, lower hedged exposure isapplicable. In 2010 we hedged foreign currency exposure with a total value of close to € 100 million.Translation risks are not hedged but are minimised to the extent possible by using natural hedges.Interest ratesInterest exposure is mainly related to the multi currency € 500 million committed fi nance facility. Wavinhas to pay variable interest rates for this facility based on interbank offered rates increased with amargin. Wavin is only to a limited extent exposed to interest rate fl uctuations as a minimum of fi ftypercent of the exposure to changes in interest rates on borrowings is hedged on a fi xed rate basis. Thisis realised by multi-currency interest rate swaps. Currently the variable interest exposure on € 260 millionof outstanding debt is hedged at an average interest rate of 3.9% and with a duration of close to one

Wavin Annual Report 2010 | page 47year. For the period October 2011 to April 2013 the variable interest exposure on € 208 million ofoutstanding debt is hedged at an average interest rate of 3.7% These interest rates exclude the marginpayable under the facility agreement, which are restated quarterly based on the leverage ratio. Thequarterly measured leverage ratio is reported to the Lending banks. The covenant calculations peryear-end and per half year are assessed by our external auditor. Per year-end the external auditor usedthe audited fi gures as basis for their assessment.Credit risksWavin operating companies have strict procedures regarding credit and payment terms. These areclosely monitored at the local and corporate level. The company realises over 27% of its sales inemerging economies where payment terms are generally longer than in Western Europe and where theavailability of information concerning the fi nancial history of customers is often limited. In 2010impairment charges for doubtful debts of € 3.3 (2009: € 3.4 million last year) were at a similar level as2009, compared to substantially lower impairment charges in the years before the credit crisis. On thebalance sheet date 24% of trade receivables were overdue compared with 28% in 2009.Management of credit risks arising from deliveries to customers is the primary responsibility of theoperating companies. Management operates within the bounds of local policies and must act inconformance with the internal control measures. Material credit risks are a specifi c area of attention oflocal and Group senior management. In the Netherlands, Belgium, Ireland, Poland and France the creditrisk of customers is partly transferred to credit insurance companies. In France Wavin is factoring a largepart of the trade receivables under a non-recourse factoring facility of € 25 million.PensionsWavin operates (limited) defi ned benefi t schemes in four countries and defi ned contribution plans inseveral other jurisdictions. In the Netherlands Wavin has a limited defi ned benefi t plan consisting of amulti employer scheme that has an agreed maximum contribution. The wholly owned subsidiaries inNorway, the UK and Ireland operate defi ned benefi t plans and retain a responsibility for payments to themembers of the pension fund including the indexation of the pension rights of pensioners afterretirement. The wholly owned subsidiary in Germany has a lump sum arrangement which will be paid tothe member upon retirement. In the event of the insolvency of the insurance or reinsurance companyconnected to the pension arrangement in Germany, Wavin would be liable for the payment of anyoutstanding lump-sum amount to qualifi ed employees.In the Netherlands (EuroCeramic) and the UK, the unrecognised actuarial losses per 31 December 2010exceeded the corridor. This will result in an increase of the expense for employee benefi ts recognised inthe 2011 income statement.For more information on the current fi nancial position of Wavin’s pension funds, please see note 27 ofthe Group Financial Statements.

Wavin Annual Report 2010 | page 48Statement of controlWavin’s risk management and control system is designed to safeguard effective and controlledrealisation of the company’s objectives.In accordance with best practice provision II.1.4 of the Dutch Corporate Governance Code, theSupervisory Board’s Audit & Investment Committee has assessed the adequacy of the internal riskmanagement and control system. Based on the activities performed during 2010 and with observanceof the restrictions below, in accordance with best practice provision II.1.5, the Management Boardbelieves that the risk management and control systems regarding the fi nancial reporting risks haveworked properly during the year, and provide reasonable assurance that the 2010 fi nancial statementsdo not contain any errors of material importance.The Management Board intends to give as true and fair a picture of Wavin’s risk profi le as possible.There may, however, be circumstances in which risks occur that have not been identifi ed yet or ofwhich the impact is greater than expected. The Management Board emphasises that the nature of thecompany’s activities explicitly involves exposure to risks that may be beyond its control. Where areduction of risk exposure, intentional or unintentional, is not possible, the systems aim to limit theimpact such risks can potentially have on the company and its stakeholders. Risk management andcontrol systems, however, can never provide an absolute guarantee that all risks are adequatelymanaged or that a company’s objectives will be realised.Wavin aims to comply with corporate governance requirements in respect of these responsibilities.As noted above, the presence and effectiveness of the implemented systems can, however, never bea guarantee that the company’s objectives will be achieved, nor can these systems ensure that humanerror, unforeseen circumstances, materially incorrect statements, loss, fraud and violation of acts andregulations are wholly prevented.Statement pursuant to the Financial Markets Supervision ActThe members of the Management Board confi rm that, to the best of their knowledge, (i) the fi nancialstatements provide a true and fair view (getrouw beeld) of the assets, liabilities, fi nancial position andprofi t or loss of the company and its consolidated participations, and (ii) the management report provides(a) a true and fair view (getrouw beeld) of the company and its related participations on the balancesheet date and the state of affairs during the fi nancial year to which the report relates and (b) describesthe material risks the company is facing.Zwolle, 1 March 2011The Management BoardH. ten Hove, President & CEOW.H.J.C.M. Oomens, Executive Vice President & CFOM.P.M. Roef, Executive Vice President

Wavin Annual Report 2010 | page 50Corporate SocialResponsibilityAt Wavin we fi rmly believe that the manner in which we manage our economic, social and environmentalrelationships forms the basis of our company’s long-term success and it is an integral part of the way wework. Our business principles are laid down in the Wavin Code of Conduct. This code describes thestandards of (business) behaviour we expect from our employees and supports the increased focus onCorporate Social Responsibility (CSR) issues within the organisation.Sustainability highon the agendaThe company’s roots lie in the search for a safe and environmentally friendly distribution of drinkingwater. Over the years we included sustainability-related improvements in our offerings to the market,but also in our operating procedures and processes. The current business environment, in whichsustainability related issues are high on our customers’ agenda, offers us many opportunities. We offer‘Solutions for Essentials’ that provide answers to tomorrow’s environmental challenges in theconstruction industry. New standards for the energy-effi ciency of buildings are important drivers for ourgrowth in surface heating and cooling. The climate change leads to a need for our solutions that canhandle the rain water cycle from hard surfaces to reservoirs or ground water.Our CSR goalsWe aim to:• Be at the forefront of the development of sustainable products and solutions within our market, whichhelp our customers achieve their sustainability targets;• Bring products and systems that have a minimal negative impact on the environment at each stage:from material selection and sourcing, to manufacturing processes, transportation from warehouses tothe fi nal destination, throughout the life-cycle and thereafter;• Remain mindful at all times of the wellbeing of our employees, and of the people who install and useour products and solutions. We will do our utmost to ensure that products are manufactured,distributed, installed and used as safely as possible.We have set ourselves environmental performance targets for the period 2008 – 2015 and aligned ourreporting with Global Reporting Initiative (GRI) G3 standards.2010 – Recognition• In its ‘Transparency Benchmark 2010’ the Dutch Ministry of Economic Affairs, ranked Wavin 33 outof 500 companies overall and number 3 in the Construction & Maritime sector;• Wavin’s GRI Report 2009 received application level B, GRI checked;• Wavin was ranked 14 out of 40 companies on the VBDO (a Dutch Association for investors insustainable developments) Supply Chain Responsibility and Transparency benchmark;• Wavin’s North West region:• Achieved, as the fi rst Dutch company, the ‘CSR Performance Ladder certifi cation level 4’,a certifi cation standard for Corporate Responsibility based on the ISO 26000 and G3 GRIguidelines;• Obtained a ‘Lean & Green Award’ for its Carbon reduction programme in transport.

Wavin Annual Report 2010 | page 512010 – What we did*SUSTAINABILITY AREAPROJECTGeneralIn 2010, Wavin made substantial investments in sustainability. We invested around 20% of our totalcapital expenditure on programmes aimed at reducing the use of virgin raw materials, energy andwater.We appointed a Group Sustainability Manager overseeing all major sustainability projects within Wavinand developing new initiatives.We continued to roll out the Supplier Code of Conduct and questionnaire; at the end of 2010 65% ofour key suppliers had completed the questionnaire and complied.Energy reductionWe earmarked a special budget for energy reduction projects across the Group, which led to thefollowing initiatives:• The installation of new more energy effi cient machinery with better processing capabilities and thereplacement of energy consuming inverters on injection moulding machines• The upgrading of air compressor systems to increase energy effi ciency• The installation of soft starters on motors and pumps reducing peak consumption• The improvement of process effi ciencies, reduction in equipment set up times, the installation of lowenergy light systems, and the upgrading of heating, ventilation and air-conditioning systems.The launch of a best practices database for energy reduction projects enables information to beshared on projects running within the organisation and from external sources.Water consumption We initiated several water reduction projects including a major one at our Wavin Norway facility inHøland, which will cut local water usage by 95%.Recycling & wastedisposalWe signed partnership agreements with leading plastic recycling companies to increase the use ofrecycled material in our products and to reduce waste disposal.In association with other members of The European Plastic Pipe and Fittings Association (TEPPFA)and external institutions, Lifecycle Analysis reports were completed for four main plastic pipe systemsin the application areas Water Distribution, Hot & Cold, Soil & Waste and Sewer.* For more information about sustainability projects, turn to page 56.Partnerships withleading plasticrecyclers2011 – FocusOur primary sustainability focus areas for 2011 are:• To continue investing in more energy effi cient production facilities;• To further reduce the quantity of raw materials in our products;• To roll out of supplier risk assessments, reviews and audits, as defi ned in the Supplier Code ofConduct, part of our Supply Chain Transparency Program;• To standardise the Waste Management program and reporting throughout the Group;• To continue developing partnership agreements with leading plastic recycling companies;• To remain actively involved in industry wide Life Cycle Assessment (LCA) projects;• To further investigate opportunities for the use of renewable energy.

Wavin Annual Report 2010 | page 52Environmental PerformanceENVIRONMENTAL TARGETSTARGET2008-2015TARGET**2015ACTUAL2010IMPROVEMENT2009-2010Reduce GHG emissions* –20% 347 kg/ton 422 kg/ton –3.0%Reduce Energy use* –10% 3.3 GJ/ton 3.7 GJ/ton –1.9%Reduce waste to landfi ll –10% 6.4 kg/ton 4.9 kg/ton –26.1%Increase use of recycled materials +20% 86 kg/ton 94 kg/ton +17.4%Reduce consumption water –15% 1.3 m 3 /ton 1.4 m 3 /ton –9.5%* 2009 figures have been restated following a more detailed calculation.** Targets are set in relative figures to eliminate production volume fluctuations.On track reachingenvironmentaltargetsWavin has established environmental reduction targets for 2015 and has measured progress since 2008.The targets have been set in relative fi gures to eliminate the impact of production volume changes.Our 2010 environmental performance indicators show that we are on track reaching the 2015 targets.Our programme to increase the use of recycled material has proven to be very successful.As a result, we have already achieved our long term target in this respect. Projects to reduce waterconsumption will lead to a substantial decrease in 2011.Energy consumption and Greenhouse Gas emissionsEnergy consumption*(GJ/tons)(Production in tons)5.00 500,0004.00400,0000.070.050.043.00300,0002.572.632.55Production volume2.00200,000Gas (fossil fuel)Renewable Energy1.000.010.020.02100,000Electric power1.161.111.12Oil (fossil fuel)02008200920100* Figures have been restated following a more detailed calculation for all reported years.Our primary production processes (extrusion and injection-moulding) use electricity. Gas-fi red kilns areused in the production of clay products, predominantly at sites in the UK. Overall usage of oil is limitedmainly to heating at some facilities.In 2010 we saw an increase of production volumes leading to a raise of total energy consumption.As a result of active energy management programmes however, we improved energy effi ciency,measured as energy consumption per ton production.In Wavin’s product mix there is a clear trend towards lightweight multilayer products with a recycled innerlayer. These require more complex production processes that in itself have a negative effect on energyeffi ciency. Seen from a cradle to cradle perspective, the benefi ts of these multilayer products are adecreased usage of virgin material and an increase of the use of recycled materials.

Wavin Annual Report 2010 | page 53Greenhouse Gas Emissions*(Kg CO 2/tons)(Production in tons)5.00 500,0004.00525957400,0003.00300,0002.00282283275200,000Production volumeDirect CO 2(scope 1)1.00100,000Indirect CO 2(scope 2)1039390Other indirect (scope 3)02008200920100* Figures have been restated following a more detailed calculation for all reported years.Wavin’s total greenhouse gas emissions include direct CO 2emissions (emissions from our ownprocesses), indirect CO 2emissions (emissions from the generation of purchased electricity) as well asother greenhouse gases (CH 4and N 2O). Emissions of greenhouse gas decreased in line with Wavin’simproved energy effi ciency which reduced Scope 1 and Scope 2 related emissions. Both scopes reportemissions caused by each of electricity use and fuel (oil & gas) consumption for heating and companyowned transport. As for Scope 3, we include emissions related to external logistics (Distributionnetwork), business travel, water consumption and waste disposal.Recycled input materials and waste disposalsRecycled input materials(Kg /tons)200(Production tons)500,000150400,000738094300,000100200,000Production volume50978382100,000Recycled bought-inPost-producer recycled own02008200920100Emissionsgreenhouse gasdecreasedIn two years time we managed to outperform one of our main environmental performance targets.Our goal was to improve usage of recycled materials with 20% per ton in the period 2008-2015.Per 2010 we have reached a 28% improvement, compared to 2008.This success is a result of focused programmes to increase usage of recycled material which drovethe change in our product mix towards lightweight multilayer pipes with a recycled inner core. Usingrecycled plastics helps to reduce the need for virgin material and limits waste disposal. The volume ofplastic pipes and fi ttings available for recycling is, however, limited by its long durability: plastic pipesystems have projected life times of well over 100 years and only very few are available for replacement.In 2010 we signed partnership agreements with leading plastic recycling companies to manage supply.

Wavin Annual Report 2010 | page 54Waste disposal(Kg /tons)(Production tons)25.0 500,00020.0400,0000,40,215.00,46,54,9300,0007,210.0200,000Production volumeRecyclable waste5.010,012,615,1100,000Non-hazardous wasteHazardous waste02008200920100Furtherimplementation ofwastemanagementOverall, Wavin achieves waste percentages of less than 1% of total production. In 2010 wastemanagement programmes, aimed at separating recyclable waste and non-hazardous waste (land fi lling)at the source, were further implemented throughout the Wavin Group. This led to a further decrease ofthe land fi lling of non-hazardous waste and an increase in recycling. By taking environmental aspectsinto consideration in the product development phase, we limit the share of environmentally harmfulmaterials. Comprehensive management of hazardous substances also ensures that employees are notexposed to any unnecessary risks.Water consumption and water dischargeWater consumption(m 3 /tons) (Production tons)7.00 500,0006.005.005,525,835,62400,0004.00300,0003.00200,0002.00Production volumeGround & Surface water1.001,331,541,41100,000Water utilities0.002008200920100

Wavin Annual Report 2010 | page 55Water discharge(m 3 /tons) (Production tons)6.00500,0005.00400,0004.00300,0003.002.003,393,583,14200,000Production volume1.00100,000Water to sewer1,281,551,40Water to nature0.002008200920100Closed loop watersystems at manysitesWavin’s water use stems mainly from production and cooling applications. We aim to reduce ourdependency on energy intensive sources of water such as those provided by municipalities andpromote the use of water supplied by natural sources such as groundwater. Many of our sitesincorporate closed loop water systems where water is brought in from natural sources, used forpurposes and recycled by passing the water through fi lters and cooling it. Compared to 2009 waterconsumption declined.

2010 –SustainabilityProjects➔Water reduction in Høland, NorwayIn 2010 we initiated a water reduction project at our Wavin site in Høland, Norway. The aim was simple:to substantially reduce the water consumption of the site. The solution involves the installation of aclosed water loop and cooling systems which will continuously recycle water used at the site, and assuch drastically reduce the amount of waste water. The system will be fully operational by the end ofFebruary 2011.The positive effects are many, both for Wavin as well as for the community in which we operate. It isestimated that the site’s annual water consumption will be reduced by approximately 95%. Secondly,the fact that Wavin will be recycling the water on its site and reusing it will effectively reduce the strainon the municipal sewer and recycling system thus drastically lessening the wear and tear on its watercleaning and pumping facilities.➔➔➔Energy reduction in TurkeyAt Wavin Turkey we reduced energy consumption substantially by replacing machinery. Replacingmoulding machines with state-of-the-art equipment has reduced the machines’ energy consumptionby a third.Energy efficiency & reduction in the UK and PolandOur manufacturing processes consume a fair amount of compressed air. At sites in the UK and Polandwe embarked on a project to increase effi ciency and reduce energy consumption. The compressed airsystems were refurbished, excess capacity was decommissioned and a variable speed compressorwas installed to allow adjustment by varying air requirements and prevent unnecessary idle runningor over-supply. The project reduced the air systems’ energy consumption by approx. 20%.Heat efficiency & insulation in Poland and the NetherlandsImproving insulation and reducing hot/cool air loss at our warehouses and manufacturing sites is anongoing challenge, especially in areas where logistical operations require vehicles to continuously enterand exit a building. We addressed this issue effectively at both our Hardenberg site in the Netherlandsand our Buk facility in Poland. The solution was to install sensor controlled, fast opening/closing doors.The new doors open and close in mere seconds, which prevents loss of heated or cooled air frominside the building. And because the doors are controlled by sensors and open automatically, theyimprove operational safety too.

Wavin Annual Report 2010 | page 57Social PerformanceOur PeopleThe expertise, commitment, well being and involvement of our employees are critical to our success.In order to provide a working environment that fosters a strong team spirit and contributes towardsthe company’s long-term goals, we are committed to the following principles:• We will foster positive employee and labour relations, and help our staff realise their full potentialthrough training and development opportunities;• We will promote a safe, healthy and productive work environment;• We will ensure a fair and diverse company culture, with no social, gender, racial or religious bias;• We will encourage our staff to maintain excellent contact with the communities in which the companyoperates and to play an active part in community life;• We will attract and retain motivated, well-qualifi ed staff who are given the opportunity to developwithin the company.New benchmarkfor Lost TimeIncidentsHealth and SafetyAt Wavin we integrate health and safety into our business and we have set down guidelines that addresswork related health issues. The progress in implementing these guidelines is benchmarked internally, andit is our policy to ensure that all business operations are carried out in a manner that ensures the health,safety and welfare of all our employees.We believe prevention is the preferred line of action. At most of our operating sites we offer employeesthe possibility of precautionary health care through various programmes and measures. This includessports activities, stop smoking programmes, medical check ups, fl u vaccination programmes, dietaryand health tips, and presentations on health related subjects such as diabetes.The safety of our workforce is of vital importance, and we are fully committed to minimising risk andmaximising safety education in the workplace. Our principal target in the area of safety is to furtherreduce the number of lost time incidents per million hours worked (LTIs). In recent years we havemanaged to stay below the previously existing benchmark of 3.0 LTIs by consistently promoting ourinternal Health & Safety focus points and continuously monitoring implementation. In 2010 we have setourselves a new and ambitious industry target to structurally bring the number of Lost Time Incidentsbelow 2.5.Lost time incident frequency10.08.07.66.04.06.35.65.44.35.44.33.74.14.75.32.02.93.13.32.73.22.92.2TargetWavin Group0199319941995199619971998199920002001200220032004200520062007200820092010In 2010 the number of lost time incidents per million hours in 2010 ended at 2.2 (2009: 2.9). Thisexceptional result however, was overshadowed by the fi rst fatal accident in sixteen years. Thisunfortunate event has been thoroughly investigated and the lessons learned have been implementedthroughout the Group.

Wavin Annual Report 2010 | page 58HumanResourcesWith the demanding restructuring programmes of the previous years up and running in 2010, Wavinemployees professionally and loyally dealt with the day to day challenges of a highly competitive market.At the same time, the focus turned to our strategy going forward. Following an intense review process,including the implementation of several work streams with teams of executives and functional specialistsworking together, ‘Wavin 2015’ was launched as the roadmap to sustainable growth and profi tability.Achieving our strategic objectives requires a focussed and alert organisation, with a strong local marketorientation, supported by operations that are optimised both across borders and across functions. Torealise this, a number of organisational and operational changes were implemented at the end of 2010.These included an adjustment to the regional structure by merging regions in the more mature marketsand the implementation of a single Marketing & Technology organisation, focussed on Group widecommercial and innovation efforts.Immediately following the introduction of ‘Wavin 2015’ at a meeting of the company’s Top 100management in October 2010, CEO Henk ten Hove held local strategy sessions to involve and engagemore levels of employees throughout the Group. These efforts will continue in 2011 through countryvisits and online dialogue sessions in which specifi c topics relating to the Wavin strategy can beaddressed.Organisational andoperationalchangesimplementedWorkforce per regionPer 31 December 2010, the Wavin Group employed 6,448 people, compared with 6,238 in 2009.Unlike previous years, there were relatively few restructuring programmes, mainly in France and theNetherlands. The table below shows the workforce of the new regions at the end of 2010.REGION 2010 2009North West Europe 1,649 1,692South West Europe 1,971 1,879South East Europe 1,204 1,092Central & Eastern Europe 1,356 1,317Overseas and Other 268 258Total 6,448 6,238Leadership developmentWavin has an in house Management Development programme to secure availability of qualifi ed Wavinmanagers that can fulfi l senior management positions and realise business goals.Performance measurementA leadership framework was designed in cooperation with regional HR, corporate HR and the ExecutiveCommittee. This framework describes effective management behaviour at fi ve different managementlevels and enables our managers to discuss and measure performance effectively. Managers can usethe tool for recruitment, appraisal, selection and development purposes. The leadership framework willfurther strengthen our performance-management culture.Career appraisalWe improved the quality of the execution of annual appraisals. To realise this, HR managers weretrained to deliver a one day Career Appraisal workshop to our managers. Other topics that were coveredduring the training were objective and target setting, learning to observe behaviour and giving feedback.

Wavin Annual Report 2010 | page 592015 Goal: 15%women in seniormanagementInternal succession and international assignmentsWe continued our efforts to achieve an effective balance between internal appointments and externalrecruitment when fi lling vacancies. The company realised an average internal succession rate of 63%over the three year period 2008-2010, compared to the 68% over the previous three-year period(2007-2009). Target for 2015 is to achieve an internal succession rate of 70%.In 2010 outfl ow at senior management level was 6%, signifi cantly lower than in 2009 (12%). This wasmainly due to a lower number of voluntary leavers and retirements. During the year, 7% of our managerswas based outside their home country to work on international and cross-border assignments. Webelieve this is an excellent way to realise synergies within the Group and nurture individual development,leading to knowledge sharing and the exchange of best practices.Management potentialsIn 2010 we continued to identify and develop young management potentials and charted individualcapabilities and ambitions. Assigning the right job opportunities to these talents is an ongoing priority.The total number of identifi ed young management potentials is now 71, compared to 60 in 2009.As in previous years, regional management and corporate HR held staff-planning meetings during whichorganisational, succession and individual development issues were discussed. A shared understandingwas generated about development areas, strengths and weakness, and required actions.Leadership programmeWe have an in-house leadership programme called ’Unrivalled Through Others’, which was developed tocreate a pool of young, skilled, motivated potentials for future management positions within Wavin. InFebruary 2010 a group of young potentials was selected for an intense six day course. The programmecombines classroom training with a practical case study, this year on Water Management, to gain moreawareness, skills and knowledge with regard to Wavin’s business and the Wavin managementcompetence areas. The participants were challenged to refl ect on their personal leadership style andmake a personal development plan, while lectures and business cases covered all functional areas.Senior managers were actively involved.Training and educationStimulating employees in their development and learning remained important. We aim to know theambitions and capabilities of our employees and to support their development.We continued our efforts on individual development planning and provided training programmes.During the year, employees attended internal and external education programmes for an average of2 days per employee.Workforce diversityWomen in senior management positionsWavin consciously embraces diversity in the workforce. We believe that employees with differentpersonal and professional backgrounds bring new perspectives and ideas to the business. As thecompany develops new business areas, diversity will bring additional value. Our goal for 2015 is to have15% women in our senior management; as you can see in the table below, this fi gure was 6.8% in 2010,almost equal to 2009.YEAR HEADCOUNT WOMEN %2006 158 6 3.8%2007 157 8 5.1%2008 159 10 6.3%2009 158 11 7.0%2010 148 10 6.8%

Wavin Annual Report 2010 | page 60Wavin Code ofConduct in placeWavin strongly believes that all discrimination on the grounds of gender, religion, ethnicity, sexualorientation, handicaps and age should be banned and has incorporated this in its Wavin Code ofConduct. Wavin companies comply with all relevant local legislation regarding employment anddiscrimination.Workforce by genderFemale19%Male81%Workforce by age< 255%> 5612%26-3524%36-4531%46-5528%Representative consultationWavin companies have formal processes to inform, consult and involve employees and theirrepresentatives on relevant issues. A European Consultative Council has been in existence for severalyears and provides a forum for discussing issues that extend across national borders with theManagement Board. In 2010, there was close cooperation between Wavin consultative bodies andexecutives regarding the strategy update.

Wavin Annual Report 2010 | page 61Wavin-Unicef partnership: Providing Essentials for ChildrenEvery 20 seconds a child dies because of contaminated drinking water. Via the ‘Providing Essentialsfor Children’ partnership Wavin, UNICEF and the Aqua for All foundation fund water and sanitationprojects in developing countries to help address this problem. Wavin donates products, expertise andmoney to give children in Africa and Asia safe drinking water, hygiene education and better sanitation.After a successful project in Mali in the period 2005-2009, with 32,000 schoolchildren at 75 schoolsbenefi ting, we are currently making good progress towards our target of bringing relief to 23,000people in three remote provinces of Papua New Guinea in the coming years.In 2010 we became co-sponsor of a large project in Nepal. In the period 2010-2011, approximately30 new water systems will be installed and existing facilities will be repaired. Local people will betrained to maintain the facilities and establish so called ‘Water and Sanitation Committees’. All in allmore than 80,000 people will gain access to sanitation.The Providing Essentials for Children project is supported by a growing number of Wavin operatingcompanies and business partners.More information can be found on www.providingessentialsforchildren.com.

Wavin Annual Report 2010 | page 63Marktbreit,GermanyA school with indoor climate controlWhen plans to renovate a forty-year old primary school in Markbreit, Germany were drawn-up, thesearch was on to fi nd a way to ensure a comfortable inside climate whatever the weather outside and toreduce the energy usage, and therefore the energy bill. The search succeeded, but it was not all ‘goodnews’ for the pupils as Klaus Kram, the Principal of the School explained: ‘During the very hot summerof 2010 the new system worked so well we didn’t have to close the school even for one schoolday’.The architect’s technical designer had to fi nd a solution that would not only deliver the desired energysavingsbut that could also cope with two ‘problems’ – a school must be fl exible when it comes to usingits rooms and space, and breaking open fl oors was not an option either fi nancially or technically. Wavinwas able to offer a suitable solution - the Wavin Tempower CD-4 climate ceiling.The next step was for Wavin to draw up a design for the system that included all the relevantcalculations and took all the technical details, such as light fi ttings, ventilation and fi re protection, intoaccount. Wavin then trained the installers and during the installation made regular site visits to checkprogress and offer the necessary support.One of the advantages of Wavin Tempower is that it works using radiated heat rather than air circulation/fl ow. The result is , a comfortable temperature throughout the space far more energy-effi cient thantraditional heating or cooling systems, such as radiators or air-conditioning. An extra advantage is that,because there are no dust particles circulating in the air, the people using the space have less problemswith allergies. It can heat spaces to 20° Celsius using water at only 40° compared with the average of60° used by radiators. The savings for the school are substantial. By the end of the severe winter of2009 the energy usage had dropped by 60%.Tempower CD-4Using an energyeffi cient systemwhich is integrated inwalls, fl oors andceilings saves spaceand allows you to bemore creative in yourproject.TempowerWavin can calculatethe optimum solutionfor many surfaceheating and coolingprojects and canprovide the detailsneeded for workplanning.

Wavin Annual Report 2010 | page 64RemunerationReportRemuneration policyThis annual report covers exclusively the relevant information of the remuneration for the ManagementBoard. The remuneration policy applies to all senior managers, including Management Board, seniormanagers of all operating companies and corporate managers.The remuneration of the Management Board members is approved by the Supervisory Board followingthe recommendation of the RA&CG Committee. The remuneration policy of the Management Board wasformally adopted in the General Meeting of shareholders in 2007. Any material amendments to the policywill be submitted to the General Meeting of Shareholders. In the reporting year there were no materialchanges to the remuneration policy compared to the previous year.Determination of the remuneration for each individual Management Board member is a responsibility ofthe complete Supervisory Board. The Supervisory Board has delegated this authority to the RA&CGCommittee. Pursuant to this delegation of authority, and acting within the principles of the remunerationpolicy, the RA&CG Committee determines the remuneration packages for the members of theManagement Board, including base salary, pension rights, short-term annual incentive and long-termincentive awards. The Remuneration policy entitles the Supervisory Board to make variable remunerationadjustments and recoveries at any time. Adjustments may and/or recoveries will be applied amongstothers in the case of business related extraordinary circumstances and/or incorrect fi nancial or otherdata. The Management Board is entitled to do the same for the management of all operating companiesand corporate managers. In the reporting year there were no adjustments and/or recoveries.ObjectiveThe primary objective of the remuneration policy is to motivate, attract and retain qualifi ed ManagementBoard members. Pay for performance is the driving force of this policy. It encourages commitment toachieving previously defi ned business objectives and challenging performance goals and balancesshort-term operational performance with the longer-term objectives of Wavin. The levels of remunerationfor the Management are set in line with external comparable benchmark data and are aligned with theremuneration of other senior managers at Wavin. The remuneration policy conforms to relevantcorporate governance guidelines and statutory requirements. Levels of remuneration are reviewed atleast once per year. The RA&CG Committee periodically seeks external remuneration expert advice.This performance related pay system, of which variable pay is a signifi cant part, is supported by aperformance appraisal system that enables an effective review of the performance of the ManagementBoard. The policy should ensure that competitiveness with the external market is maintained.The remuneration package of the Management Board members presently consists of:• A fi xed base salary, which is reviewed annually;• A short-term annual incentive expressed as a percentage of the annual base salary;• A long term incentive plan;• Pension contributions;• Other secondary benefi ts: a company car, health and travel insurance, telephone and arepresentation allowance.To ensure external comparability and internal alignment, Wavin follows the Hay methodology for jobgrading. Instead of using a self-defi ned peer group the remuneration position is compared with surveyedboard compensation levels in the Netherlands, called ‘The Hay Boardroom Total Remuneration Guide’.The 2011 edition of this Top Executive database holds information on 382 senior executives and 110companies. Where a Management Board member is not a Dutch resident, remuneration is benchmarkedagainst the relevant home market Top Executive database of Hay.The 2011 boardroom guide reports that the modest compensation increase in recent years has resultedin a below market compensation package for Management Board members. This situation will beanalised and we intend to submit a proposal to the Annual General Meeting of Shareholders in 2012 tobring the compensation package of the Management Board members in line with board compensationlevels in the Netherlands.Base salaryThe fi xed base salaries of the Management Board members are determined on the basis of performanceand experience and are benchmarked against the surveyed trendline market median level for fi xed basecompensation.

Wavin Annual Report 2010 | page 65When approving individual salary increases, consideration is given to the actual and expectedperformance of the Management Board member and the relative position of his fi xed base salarycompared to the relevant external market. Remuneration is paid in Euro with the exception ofMr. Taylor whose remuneration was paid in Pound Sterling (GBP).In 2009 the Management Board members’ fi xed base salaries were kept at the 2008 levels. In 2010 thefi xed base salary of all Dutch Management Board members was increased with 2% per 1July followingthe same delayed review date as for most of our senior managers throughout the company. Mr. Taylor’ssalary was increased with 2.5% per 1 July.Variable remunerationMembers of the Management Board are entitled to a short-term annual incentive (STI) and a sharebased annual long-term incentive plan (LTIP). The Supervisory Board determines these incentives afterthorough scenario-analyses and with due regard for the pay differentials within the company. In respectof LTIP share price projections, four levels of company performance and three levels of marketperformance are modelled.Short term annual incentive (STI)The STI is dependent on the achievement of fi nancial performance targets and individual fi nancial and/ornon-fi nancial objectives determined at the beginning of each calendar year. During its meeting ofDecember 2009 the Supervisory Board approved the 2010 fi nancial performance targets for the totalGroup as follows: profi t (50% weight), cash fl ow (20% weight) and revenue growth (30% weight).The fi nancial performance targets were based on the 2010 operational plan objectives, which are notdisclosed for reasons of commercial confi dentiality. These account for 80% of the incentive. A further20% depends on the achievement of certain individual objectives.The fi nancial targets and individual objectives are determined by the RA&CG Committee based on pastperformance and the mid- and long-term strategic objectives of the company. The targets support therealisation of long term value creation.After the closing of each fi nancial year the RA&CG Committee approves the audited outcome of actualachievements versus the preset fi nancial and individual targets. The RA&CG Committee has the right tochange targets as a result of unforeseen circumstances. This was not the case in 2010.In 2010, the annual incentive opportunity for the Dutch Management Board members ranged from 0%to 75% of their annual fi xed base salary, with a target of 50%. The UK-based Board member Mr. Taylorhad a range of 0% to 81%, with a target of 54%. Target incentives are reached when the fi nancial andindividual goals are fully met. Based on the fi nancial performance and the individual objectives, theRA&CG Committee determined a 2010 individual short-term incentive for the Management Boardmembers of 14% to 15% of their fi xed base salary.Long term incentive plan (LTIP)Management Board members as well as other senior managers may, on a voluntary basis, elect to investannually up to 50% of their individual annual bonus in Wavin shares. This LTIP focuses participants oncreating long term shareholder value by encouraging share ownership and aligning their interests withthose of shareholders.A participant will receive (a) the right to one conditional matching share for each two purchased shares;and (b) a maximum of three conditional performance options for each share purchased. The purchasedshares and the matching shares are subject to a mandatory lock-up period of fi ve years. The matchingshares will be transferred to the participant after three years provided that the participant is still employedby Wavin. These matching shares must, however, still be retained for the full fi ve-year lock-up period asreferred to above.The participants will be granted a maximum of three conditional performance options for eachpurchased share. The performance options have a total term of seven years: a vesting period of fouryears and a subsequent exercise period of three years. The total number of performance options to begranted is dependent on the average annual normalised Ebitda growth realised during the four-yearoption-vesting period and can only be exercised if the participant is still employed by Wavin at the timeof vesting. More information on the LTIP can be found on the corporate website.

Wavin Annual Report 2010 | page 66The LTIP was introduced in 2008 and currently exists three years. We will perform an evaluation of theeffectiveness of the plan and are examining broader trends and developments in long term executiveremuneration. If we consider a revisit of the current program it will be the presented to the AnnualGeneral Meeting of Shareholders in 2012.PensionThe retirement benefi ts are designed in line with relevant market practice in the relevant country ofresidence.As is applicable to all Dutch Wavin employees, the pension arrangements for the three DutchManagement Board members are based on defi ned benefi ts and indexed average salary with a pensionat age 65. The annual build-up of old age retirement benefi ts amounts to 2.15% of the annualpensionable salary.Both Mr. Houben and Mr. Oomens have an additional pension arrangement as of the date they joinedWavin to partly compensate for missed back service in previous careers. Since 2000 Mr. Houben hashad an indexed arrangement amounting to a 2010 payment of € 33,585 into his pension arrangementwith the company. Because of his retirement from the company and in accordance with his employmentcontract, the payments for the remaining two years were paid to Mr Houben as a lump sum inDecember 2010 amounting to € 69.186.Mr. Oomens received an amount of € 10,000 paid to an insurance company.As is applicable to all former UK Hepworth employees, the pension arrangement for UK residentMr. Taylor was based on defi ned benefi t. The executive pension arrangement for Mr. Taylor was basedon an accrual rate of 1/45th with a retirement possibility at the age of 63. The maximum pension hecould have accrued would be two thirds of his fi nal earnings capped pensionable salary less anyretained benefi ts. Mr. Taylor had an additional pension arrangement since 1999 leading to a 2010payment of € 44,004.More information on the 2010 remuneration of the individual Management Board members can be foundon page 136 and 137 of this report.

Wavin Annual Report 2010 | page 67SupervisoryBoard ReportIntroductionFrom the perspective of the Supervisory Board the year 2010 was characterized by the change ofleadership as a result of Philip Houben’s decision to step down as CEO & President of Wavin in October2010.Following Philip’s announcement the Supervisory Board has extensively discussed the matter of hissuccession starting with the various requirements that his successor should preferably meet. As statedin previous reports it is our policy to generally favour internal succession, of course subject to theavailability of qualifi ed candidates. We are therefore satisfi ed that we were able to nominate Henk tenHove as the preferred candidate.We thank Philip for his major contributions during his ten years of tenure. Years that showed impressivegrowth, both autonomous and by acquisitions, but also shrinkage caused by a unprecedentedeconomic crisis that affected the construction markets in Europe exceptionally hard. Philip showed solidleadership against the background of these varying conditions.We also thank Andy Taylor who stepped down from the Management Board in the course of the year.Andy has been instrumental in the successful integration of Hepworth, the largest acquisition ourcompany made in its history. He played a major role in various projects aimed at strengthening thecommercial acumen of our businesses.We subsequently decided to reduce the Management Board from four to three members. At the AnnualGeneral Meeting of shareholders in 2011 we will nominate Maarten Roef for appointment as member ofthe Management Board. We communicated this intention already in August 2010 and Maarten acceptedthe responsibilities of his new function per 1 October 2010.Parallel to the succession of the CEO a thorough review of the strategy took place which ultimatelyresulted in the ‘Wavin 2015’ strategy. This updated strategy will help the company to reach its goals andobjectives once the markets have recovered. The Management Board has submitted a series ofproposals to implement the chosen strategic course. After thorough discussions we approved thereduction of the number of regions from six to four and to combine the two strategic business units intoone which also includes our research and development activities. These changes have various personnelconsequences and we approved the nominations proposed.We reviewed the competitive position of our company in each relevant product category per country.Our strategic goal to reach a number one or two position in each geographical market will beemphasized. In markets where this goal cannot be achieved within a reasonable timeframe we willreconsider our options.The year under reviewIn 2010 seven Supervisory Board meetings were held. Six of these meetings were held in accordancewith a preset schedule. An additional meeting was fully dedicated to the strategy of the company. Duringthe regular meetings both Boards reviewed the ordinary course of business and discussed a number ofimportant projects. The Management Board and the Company Secretary attended all meetings with theexception of two meetings in executive session.Attendance of the individual Supervisory Board members is shown in the following overview:24/2 25/2 21/4 18/6 16/8* 26/8 27/10 15/12Van den Hoek V V V V V V V VHill V V V V V V V VKottman V V V V V V V VRuijter V V V V V V V VStymne V V V V V V V V* Meeting by conference call.

Wavin Annual Report 2010 | page 68General itemsIn 2010 focus and attention were given to the ongoing adverse consequences to our company of thefi nancial crisis and the actions taken by the company in response thereto. Substantial and repeatedattention was also paid to the succession of Mr. Houben as CEO & President of Wavin N.V. and otherorganisational changes. The full Supervisory Board meetings included a review of the fi nancial andoperational performance of the company and the outlook. Other regular subjects on the agenda weretopics such as acquisition prospects, divestment opportunities, Wavin’s IT programme, the auditor’smanagement letter, major capital investment proposals, investor relations and innovation in products,systems and services. The Supervisory Board also discussed the corporate strategy, the risk exposureof the business and the internal risk management and control systems. Finally press releases on (semi-)annual fi nancial results were discussed, amended and approved.Specific items in 2010In February 2010 an extraordinary meeting of the Supervisory Board was held in which the strategy ofthe company was evaluated. As a consequence of this meeting it was decided to initiate a broadstrategic review.The regular February 2010 meeting was largely devoted to the 2009 results, the annual accounts,critical accounting policies and highlights of the auditor’s report. Also the sustainability performance ofthe company was discussed. This meeting took place in the presence of the company’s external auditorwith whom the comments and assessment, as formulated in KPMG’s audit report of 2009, of Wavin’sinternal control framework and the reliability and continuity of the IT systems have been discussed. Onthe basis of an evaluation by the Audit & Investment Committee, the Supervisory Board has concludedthat the external auditor is independent of Wavin.The April 2010 meeting, which precedes the Annual General Meeting of shareholders, was dedicated tothe provisional Q1 results and an update on the restructuring measures the company has taken. Asrequired under best practice clause V.2.3. of the Dutch Corporate Governance Code, the company hadperformed an evaluation of the functioning of the external auditor. After a thorough review and selectionprocess and in consultation with the Audit & Investment Committee, the Supervisory Board proposed tothe Annual General Meeting of Shareholders in April 2010 to appoint PricewaterhouseCoopers (PwC) asthe new external auditor of the company. The A&I Committee supervised the transition and was satisfi edwith the process.It is the policy of the Supervisory Board to have at least one meeting per year in one of Wavin’s regions.In 2010 the June meeting took place in Doncaster (UK) and included a visit to the offi ces and plantwhere the Supervisory Board was updated on the local business activities and production. During thismeeting the Managing Director of the UK & Ireland region and his team were invited to presentdevelopments in their region. Other items that were discussed included strategy, strategic projects andan update of the progress of the ConnectIT program. In a meeting in executive session the SupervisoryBoard also discussed succession planning and reviewed the profi le and desired size of the SupervisoryBoard.In the August 2010 meeting, the Supervisory Board discussed the Half Year results, the competitivelandscape in which the company operates, the outcome of the strategic review (‘Wavin 2015’),subsequent organisational changes and a number of strategic projects.The October 2010 meeting was mostly dedicated to the Q3 results, a refi nancing project andrestructuring plans for small Wavin entities.In December 2010 the Supervisory Board discussed the company budget for 2011 as well as a numberof strategic and fi nancial projects. Also the Stoplist and the outside positions of the members of theManagement Board were reviewed. At the subsequent meeting in executive session, the SupervisoryBoard evaluated the functioning of the Management Board and also the performance of the individualmembers. On the basis of the reporting of the Remuneration, Appointment & Corporate Governance(‘RA&CG’) Committee, the Board discussed the succession planning of each of the members of theManagement Board and other senior management positions. We favour internal appointments if asuitable candidate is available. We concluded that this is the case for most functions. We also evaluatedthe functioning of our own Board, its committees and its individual members as well as the possibleneed for further training and/or education. The evaluation was conducted based on assessment

Wavin Annual Report 2010 | page 69questionnaires completed by all individual Supervisory Board members. The results of the questionnaireswere discussed during the above meeting.The Chairman of the Supervisory Board and the CEO each year meet with the Dutch Central WorksCouncil. During this meeting important developments, if any, on the strategy, the organisation and/or therelevant industry and other topics brought forward by the members of the Works Council, are discussed.In the meeting, which took place on 15 December 2010 the topics that were discussed included thereorganisation plans in the Netherlands, succession of the CEO, integration of the Nordic and NWEregions and the outlook for the coming years.Profile of the Supervisory BoardIn the June 2010 meeting the Supervisory Board discussed the profi le for the Supervisory Board.The profi le was updated in 2009 in order to comply with corporate governance developments and canbe found on the corporate website. It contains specifi c requirements on expertise and competences ofthe Supervisory Board as a whole and of its individual members. The Supervisory Board is of the opinionthat diversity in the composition of the Supervisory Board is an important precondition for a wellfunctioningand independent Board, including items like age, nationality and gender. With regard togender the Supervisory Board has set an initial target of at least 20% female members. The SupervisoryBoard feels that its current composition meets the criteria as specifi ed in the Profi le.Independence and conflicts of interestWith regard to the independence of the members of the Supervisory Board, as required under bestpractice III.2.1 of the Dutch Corporate Governance Code, the Supervisory Board states that allSupervisory Board members are considered to be independent from the company. There are nointerlocking directorships, nor are or were any Supervisory Board members employed by the company.The rules for the Supervisory Board contain provisions regarding potential confl icts of interest. In the yearunder review there were no occurrences with a potential confl ict of interest.Supervisory Board committeesIn accordance with the Corporate Governance code Wavin has an Audit, a Remuneration and aSelection & Appointment Committee. Given the size and organisation of the Supervisory Board it hasbeen decided to combine the last two committees, resulting in the existence of an Audit & InvestmentCommittee and a Remuneration, Appointment & Corporate Governance Committee. The main role ofthe committees is to provide a focused analysis and preparation of subjects within their respective areasof expertise and to report and make recommendations to the full Supervisory Board. A summary of theduties of the two committees is set out on page 37.Report of the Audit & Investment CommitteeDuring the year under review the Audit & Investment Committee consisted of Mr. B. Hill (chairman),Mr. R.A. Ruijter as fi nancial specialist and Mrs. B. Stymne Göransson. There were no changes in thecomposition of the Audit & Investment Committee.The Audit & Investment Committee approves all medium-sized investments with a value of between€ 1 million and € 2.5 million. Investment proposals with a value of over € 2.5 million and acquisitions witha value of over € 5 million are reviewed and approved by the full Supervisory Board, taking into accountthe advice of the Audit & Investment Committee.In 2010 the Audit & Investment Committee met three times. At these meetings the CFO and/orother members of the Management Board as well as the Corporate Director Finance were present.The individual committee members attended all meetings.During the February 2010 meeting the annual accounts and fi nancial statements of 2009, as well asKPMG’s audit report 2009, were reviewed and discussed with the external auditor. In addition the netdebt, fi nancing structure and tax and pension positions were addressed. The Committee evaluated theperformance of the external auditor and asked three of the four big audit fi rms to prepare a proposal forthe audit of Wavin and its subsidiaries for 2011 and further. As a consequence the Supervisory Boardsubsequently decided to propose PwC as the new external auditor to the AGM.

Wavin Annual Report 2010 | page 70In August 2010 the investment application procedure was reviewed, capital investments spent andcommitted up to and including June 2010 were highlighted and the results of two post-investmentreviews were presented to the Audit & Investment Committee. The fi rst half year results were assessedby PwC and the report of factual fi ndings was discussed. The follow up on the management letter 2009issues was addressed and PwC presented its audit strategy and audit scope which was approved bythe Committee. Wavin’s funding and the fi nancing costs were assessed and the Management Boardinformed the A&I Committee of its intention to request an amendment of the conditions of the fi nancingfacilities from the banking syndicate.In the December 2010 meeting the results of the interim audit performed by the external auditor werereported to the Audit & Investment Committee. The management letter issued by PwC included anumber of potential risks and the necessary steps to mitigate these risks were agreed. A project toenhance Wavin’s business control framework was presented and approved. Other items of discussionwere the tax position of the company, the roll out of the uniform IT platform and the IT plan 2011.A regular item of the December meeting is the investments 2010 review and the capital investmentbudget for 2011, which were discussed and subsequently approved in the full Supervisory Boardmeeting. Finally a number of IFRS related issues was discussed.Internal audit functionIn the December meeting the Audit & Investment Committee also performed its annual evaluation of theneed for an internal audit department with the Management Board and the external auditor. It wasconcluded that, considering the nature of Wavin’s operations and the involvement of internal andexternal experts in addition to the use of tools like SAP GRC, an internal audit function is not necessaryat this time. Improvements of Wavin’s control environment can be achieved by better documentation ofthe control activities in combination with strong administration and management information systems,regular visits from regional and central management and intensive external audits using native speakingaudit personnel at the operations.After a thorough evaluation, the Audit & Investment Committee concluded that the company appliedaudit, internal control and risk management systems that enable the company to deliver a statement of‘being in control’ in accordance with the best practices of the new Dutch Corporate Governance Code,providing reasonable assurance that the fi nancial reporting does not contain any material inaccuracies.Risk management and control systems cannot, however, ever absolutely guarantee that all risks aremanaged adequately and that the company’s objectives will be realised under all circumstances. In thatcontext the Audit & Investment Committee refers to the Risk Management paragraph on page 42 of thisannual report. The Audit & Investment Committee was satisfi ed with the quantity and quality ofinformation provided by the Management Board and the manner in which recommendations made havebeen followed up.Report of the Remuneration, Appointment & Corporate Governance CommitteeDuring the year under review the Remuneration, Appointment & Corporate Governance Committee(‘RA&CG Committee’) met four times in the presence of the CEO and the Corporate HR Directorof the company on the invitation of the Committee. The members of the RA&CG Committee areMr. P.C. van den Hoek (chairman) and Mr. R. Kottman. There were no changes in the composition ofthe committee. The individual committee members attended all meetings.In February 2010 the main topics were the variable pay proposals for the 2009 incentive and theindividual targets for the 2010 incentive of the Management Board members, the consequences ofMr. Houben’s decision to step down as CEO and subsequently leave the company and the upcomingvacancy in the Supervisory Board.In the June 2010 meeting the RA&CG Committee discussed amongst others the fi nancial consequencesof the departure of Mr. Taylor and the subsequent proposal to appoint Mr. Roef as as a member of theManagement Board, subject to shareholder approval. Mr. Roef has a proven track record as managingdirector of Wavin Overseas and later as director of the region North West Europe. The RA&CGCommittee also discussed the organisational consequences of the ‘Wavin 2015’ strategy review andthe proposal to nominate Mr. Kottman as the new chairman of the Supervisory Board. Mr. Kottmanhas extensive experience in both managing and supervising Dutch listed companies. The RA&CGCommittee fi nally discussed the salary adjustments for Messrs. Ten Hove and Roef as a consequence

Wavin Annual Report 2010 | page 71of their respective new roles and responsibilities. The RA&CG Committee specifi cally stated that themaximum remuneration for Mr. Roef in case of dismissal should be in line with the Dutch CorporateGovernance Code.In August 2010 the RA&CG Committee evaluated the Hay grading of the individual Management Boardmembers, the outcome of the 2009 / 2010 succession planning exercise for all senior managementpositions, the appointment of Mr. Ten Hove as a member of the Advisory Council of NYSE Euronext,the upcoming vacancy in the Supervisory Board and the profi le of the Supervisory Board.In the December 2010 meeting the Committee discussed the current remuneration policy for theManagement Board and senior management, concluded that a refi nement should be considered andagreed to perform a detailed study. Other items that were discussed included the determination of the2011 base salary of the Management Board members which will be implemented in July 2011 and thegroup incentive targets for 2011.Remuneration Report regarding the Management BoardThe remuneration report regarding the Management Board can be found on pages 64 – 66 of thisannual report.Financial statementsThe Financial Statements for the year 2010 have been audited by PwC, which issued an unqualifi edopinion which is printed on page 142 and 143 of this annual report. The Management Board has drawnup and the Audit & Investment Committee has reviewed the Financial Statements. Based on itsrecommendations and after a further review and discussions the Supervisory Board recommends thatthe Financial Statements for the year 2010 be adopted by the General Meeting of Shareholders inaccordance with Article 21 sub 5 of the company’s Articles of Association. The Supervisory Board alsoproposes that the General Meeting of Shareholders discharges the Management Board and theSupervisory Board for their respective management and supervision during the year under review.The members of the Supervisory Board have signed the Financial Statements pursuant to their statutoryobligations under clause 2:101 sub 2 Dutch Civil Code.Changes in the composition of the Management BoardMr. Ten Hove was appointed CEO of the company per 1 October 2010 replacing Mr. Houben whoretired per 31 December 2010. Mr Ten Hove’s base salary and other benefi ts were set at the same2010 level of his predecessor.Mr. Taylor left the company per 30 September 2010. He was paid his contractual entitlement of12 months salary and benefi ts including incentive pay, in lieu of notice.Mr. Roef will be appointed as his successor subject to shareholder’s approval on 27 April 2011.Mr. Roef’s previous position was Managing Director North West Europe and he will be appointed fora period of 4 years. In accordance with the Dutch Corporate Governance Code and upon unfairdismissal he is entitled to compensation equal to 12 months base salary except in the situation thathis employment agreement terminates because of him reaching the age of 62.A full fi nancial report, containing detailed information on the remuneration packages of the individualManagement Board members, can be found on page 136 and 137.ConclusionAs set out above, 2010 has been a year of transition. The appointment of a new CEO, other personnelchanges in the top management of our company, the review of our strategy and the reshaping of theway in which the company is organised have marked the year. And this against an economicbackground that although in most of our markets gradually improving, remained diffi cult because offi erce competition, under-occupancy of our plants and increasing raw materials prices. The introductionand roll-out of the Wavin 2015 strategy was received with a great deal of enthusiasm and support bymanagement and staff, which gives us confi dence that execution will be expeditious and professional.We highly appreciate the dedication of all our employees in this demanding period of transition.Zwolle, 1 March 2011The Supervisory BoardP.C. van den Hoek, ChairmanB.G. Hill, Vice-ChairmanR.H.P.W. KottmanR.A. RuijterB. Stymne Göransson

Wavin Annual Report 2010 | page 73FinancialstatementsConsolidated balance sheet 74Consolidated income statement 75Consolidated statement of comprehensive income 76Consolidated statement of changes in equity 77Consolidated statement of cash flows 78Notes to the Group Financial Statements 791. General information 792. Basis of preparation 793. Signifi cant accounting policies 804. Financial risk management 925. Segment reporting 986. Assets held-for-sale 1027. Acquisitions of subsidiaries 1028. Revenue 1039. Other operating income 10310. Other operating expenses 10311. Personnel expenses 10412. Personnel employed 10413. Finance income and expense 10414. Non-recurring income and expense 10515. Income tax expense 10616. Earnings per share 10717. Property, plant & equipment 10918. Intangible assets 11119. Investments in associates 11420. Other fi nancial (non-current and current) assets 11421. Deferred tax assets and liabilities 11522. Inventories 11623. Trade and other receivables 11724. Cash and cash equivalents 11725. Equity 11726. Interest-bearing loans and borrowings 11827. Employee benefi ts 12028. Share-based payments 12329. Provisions 12530. Other non-current liabilities 12631. Trade and other payables 12632. Operating leases 12733. Capital commitments 12734. Contingent liabilities 12735. Related parties 12736. Transactions with key management and remuneration 12837. Group companies 12838. Subsequent events 128Company balance sheet 129Company income statement 129Notes to the Company Financial StatementsA. General 130B. Intangible assets 130C. Investments in subsidiaries 131D. Deferred tax assets and liabilities 131E. Cash and cash equivalents 131F. Shareholders’ equity 132G. Interest-bearing loans and borrowings 136H. Other non-current liabilities 136I. Net income from subsidiaries and associates 136J. Contingent liabilities 136K. Remuneration of the Management Boardand Supervisory Board 136L. Shares held by the Management Boardand Supervisory Board 138M. Auditors remuneration 139

Wavin Annual Report 2010 | page 74Consolidatedbalance sheetAS AT 31 DECEMBER(€ X 1,000)NOTE 2010 2009AssetsProperty, plant & equipment 17 344,267 349,783Intangible assets 18 488,129 485,161Investments in associates 19 21,072 19,061Other fi nancial non-current assets 20 884 786Deferred tax assets 21 9,586 10,405Total non-current assets 863,938 865,196Inventories 22 171,938 145,999Trade and other receivables 23 266,494 237,626Income tax receivable 2,462 3,591Cash and cash equivalents 24 55,748 58,626Assets classifi ed as held-for-sale 6 314 3,827Total current assets 496,956 449,669Total assets 1,360,894 1,314,865EquityIssued capital 20,313 20,313Share premium 422,847 422,847Reserves (13,786) (25,971)Retained earnings 141,384 134,464Total equity attributable to equity holders of the Company 25 570,758 551,653Non-controlling interest 8,188 6,964Total equity 578,946 558,617LiabilitiesInterest-bearing loans and borrowings 26 295,357 285,917Employee benefi ts 27 13,647 12,048Provisions 29 17,470 14,739Deferred tax liabilities 21 101,161 104,196Other non-current liabilities 30 7,161 17,899Total non-current liabilities 434,796 434,799Bank overdrafts 26 16,498 9,469Employee benefi ts 27 519 2,614Provisions 29 8,832 9,102Income tax payable 4,721 5,919Trade and other payables 31 316,582 294,286Liabilities classifi ed as held-for-sale 6 – 59Total current liabilities 347,152 321,449Total liabilities 781,948 756,248Total equity and liabilities 1,360,894 1,314,865The notes on page 79 to 128 are an integral part of these consolidated fi nancial statements.

Wavin Annual Report 2010 | page 75ConsolidatedincomestatementFOR THE YEAR ENDED 31 DECEMBER(€ X 1,000)NOTE 2010 2009RECURRINGNON-RECURRING*TOTAL RECURRING NON-RECURRING*TOTALTotal revenue 8 1,231,252 – 1,231,252 1,159,626 – 1,159,626Cost of sales (938,959) (1,117) (940,076) (862,829) (7,252) (870,081)Gross profit (loss) 292,293 (1,117) 291,176 296,797 (7,252) 289,545Other operating income 9 3,296 1,261 4,557 3,924 2,022 5,946Selling and distribution expenses (142,050) (3,016) (145,066) (142,450) (6,406) (148,856)Administrative expenses (90,075) (2,457) (92,532) (92,585) (3,028) (95,613)Research and development expenses (7,961) (28) (7,989) (6,204) 48 (6,156)Other operating expenses 10 (11,180) (1,023) (12,203) (11,946) (25) (11,971)Result from operating activities 44,323 (6,380) 37,943 47,536 (14,641) 32,895Finance income 1,725 – 1,725 2,325 – 2,325Finance expense (35,864) – (35,864) (37,692) – (37,692)Net finance costs 13 (34,139) – (34,139) (35,367) – (35,367)Share in profi t of associates 19 2,196 – 2,196 3,073 – 3,073Profit (loss) before income tax 12,380 (6,380) 6,000 15,242 (14,641) 601Income tax benefi t (expense) 15 (3,516) 4,616 1,100 (3,498) 4,716 1,218Profit (loss) for the period 8,864 (1,764) 7,100 11,744 (9,925) 1,819Attributable to:Equity holders of the Company 7,564 (1,739) 5,825 10,109 (9,922) 187Non-controlling interest 1,300 (25) 1,275 1,635 (3) 1,632Profit (loss) for the period 8,864 (1,764) 7,100 11,744 (9,925) 1,819* For the definition of non-recurring items reference is made to paragraph (aa) of the Significant accounting policies. For details on the non-recurring items reference is made to note14 of the Group Financial Statements.Basic earnings per share(€ x 1) NOTE 2010 2009Basic earnings per share (weighted average) 16 0.11 0.00Diluted earnings per share (weighted average) 16 0.11 0.00The notes on page 79 to 128 are an integral part of these consolidated fi nancial statements.

Wavin Annual Report 2010 | page 76Consolidatedstatement ofcomprehensiveincomeFOR THE YEAR ENDED 31 DECEMBER(€ X 1,000)NOTE 2010 2009*Profit for the period 7,100 1,819Other comprehensive incomeExchange rate differences on translating foreign operations 12,231 9,532Fair value changes cash fl ow hedges 13 2,014 (5,224)Transfer hedge reserve to profi t or loss – 3,272Income tax relating to components of other comprehensiveincome 15 (485) 495Other comprehensive income (expense) for the period,net of income tax 13,760 8,075Total comprehensive income (expense) for the period 20,860 9,894Attributable to:Equity holders of the Company 19,349 8,109Non-controlling interest 1,511 1,785Total comprehensive income (expense) for the period 20,860 9,894The notes on page 79 to 128 are an integral part of these consolidated fi nancial statements.* Presentation adjusted for comparison reasons.

Wavin Annual Report 2010 | page 77Consolidatedstatementof changesin equityAS AT 31 DECEMBER(€ X 1,000)NOTEISSUEDCAPITALSHAREPREMIUMLEGAL ANDSTATUTORYRESERVETRANSLATIONRESERVEBalance at 1 January 2009 100,961 126,029 12,332 (34,111) (9,236) 133,040 329,015 5,151 334,166HEDGINGRESERVERETAINEDPROFITTOTALNON-CON-TROLLINGINTERESTTOTALEQUITYProfi t (loss) for the period – – 3,073 – – (2,886) 187 1,632 1,819Other comprehensive income*Exchange rate differences on translating foreignoperations – – – 9,391 (12) – 9,379 153 9,532Fair value changes cash fl ow hedges, net of tax – – – – (3,895) – (3,895) – (3,895)Realised fair value changes fi nancial instruments,net of tax – – – – 2,438 – 2,438 – 2,438Reclassifi cation – – (969) – – 969 – – –Total comprehensive income (expense)for the period* – – 2,104 9,391 (1,469) (1,917) 8,109 1,785 9,894Contributions by and distributions to owners*Shares issued 25 16,250 211,254 – – – – 227,504 – 227,504Cost of shares issued, net of tax – (11,334) – – – – (11,334) – (11,334)Stock dividend 25 603 (603) – – – – – – –Treasury shares issued – – – – – 206 206 – 206Share based payment plans, net of tax 28 – – – – – 51 51 – 51Long term incentive plan – – – – – 222 222 – 222Dividends declared to shareholders 25 – – – – – (2,120) (2,120) – (2,120)Dividends declared to non-controlling interest – – – – – – – (57) (57)Dividends received from associates – – (4,982) – – 4,982 – – –Reduction of nominal share value 25 (97,501) 97,501 – – – – – – –Non-controlling interest on acquisitions 7 – – – – – – – 85 85Transactions with owners, recorded directly in equity* (80,648) 296,818 (4,982) – – 3,341 214,529 28 214,557Balance at 31 December 2009 20,313 422,847 9,454 (24,720) (10,705) 134,464 551,653 6,964 558,617Balance at 1 January 2010 20,313 422,847 9,454 (24,720) (10,705) 134,464 551,653 6,964 558,617Profi t (loss) for the period – – 2,196 – – 3,629 5,825 1,275 7,100Other comprehensive incomeExchange rate differences on translating foreignoperations – – – 12,041 (46) – 11,995 236 12,231Fair value changes cash fl ow hedges, net of tax 30,31 – – – – 1,529 – 1,529 – 1,529Reclassifi cation – – (460) – – 460 – – –Total comprehensive income (expense) for theperiod – – 1,736 12,041 1,483 4,089 19,349 1,511 20,860Contributions by and distributions to ownersTreasury shares purchased – – – – – (777) (777) – (777)Treasury shares issued – – – – – 351 351 – 351Long term incentive plan 28 – – – – – 182 182 – 182Dividends declared to non-controlling interest – – – – – – – (489) (489)Dividends received from associates – – (3,075) – – 3,075 – – –Non-controlling interest on acquisitions 7 – – – – – – – 202 202Transactions with owners, recorded directly in equity – – (3,075) – – 2,831 (244) (287) (531)Balance at 31 December 2010 20,313 422,847 8,115 (12,679) (9,222) 141,384 570,758 8,188 578,946The notes on page 79 to 128 are an integral part of these consolidated financial statements.* Presentation adjusted for comparison reasons.

Wavin Annual Report 2010 | page 78Consolidatedstatement ofcash fl owsFOR THE YEAR ENDED 31 DECEMBER(€ X 1,000)NOTE 2010 2009Profit for the period 7,100 1,819Adjustments to reconcile to cash fl ow from operatingactivitiesDepreciation and amortisation 17,18 60,026 62,949Share-based payment and Long Term Incentive Plan 28 182 174Net fi nance costs 13 34,139 35,367Profi t on sale of property, plant & equipment and intangiblefi xed assets (655) (2,218)Share in profi t of associates 19 (2,196) (3,073)Income tax expense (benefi t) 15 (1,100) (1,218)Operating profit before changes in working capitaland provisions 97,496 93,800Changes in other receivables and other payables (6,191) (9,643)Changes in working capital (33,962) 4,863Changes in provisions and employee benefi ts 1,934 (2,184)Cash generated from operations 59,277 86,836Interest paid (29,802) (24,454)Income taxes paid (3,057) (7,242)Net cash from operating activities 26,418 55,140Investments in property, plant & equipment paid (36,022) (35,296)Investments in intangible assets paid (7,168) (5,340)Proceeds from sold property, plant & equipmentand intangible assets 5,622 2,965Dividends received from associates 3,075 4,982Acquisitions of consolidated companies,net of cash acquired 142 (233)Net cash used in investing activities (34,351) (32,922)Treasury shares purchased (777) –Treasury shares issued 351 206New/(repayment of) interest-bearing loans and borrowings 4,094 (219,499)Repayment of credit facility – (4,499)Shares issued – 227,504Costs of shares issued – (15,213)Dividends paid to shareholders 25 – (2,120)Dividends paid to non-controlling interest (489) (57)Net cash used in financing activities 3,179 (13,678)Net increase of cash and cash equivalents (4,754) 8,540Cash and cash equivalents at 1 January 24 58,626 48,847Effect of exchange rate fl uctuations on cash held 1,876 1,239Cash and cash equivalents at 31 December 24 55,748 58,626The notes on page 79 to 128 are an integral part of these consolidated fi nancial statements.

Wavin Annual Report 2010 | page 79Notes to theGroup FinancialStatements1. General informationWavin N.V. (the Company) is domiciled in Zwolle, the Netherlands. The consolidated fi nancial statements of the Company forthe year ended 31 December 2010 comprise the Company and its subsidiaries (together referred to as the Group) and theGroup’s interest in associates covering the period 1 January 2010 up to and including 31 December 2010. There have notbeen any signifi cant changes in the Group. For details of the Group we refer to the list of participations on page 145 of theannual report. The Group is primarily involved in the production and sales of plastic pipe systems and solutions.2. Basis of preparation(a) Statement of complianceThese consolidated fi nancial statements have been prepared in accordance with International Financial Reporting Standards(IFRSs) as adopted by the European Union, and also comply with the fi nancial reporting requirements included in section 9 ofBook 2 of the Dutch Civil Code, as far as applicable.The Company presents a condensed income statement in the Company Financial Statements, using the facility of Article 402,Book 2 of the Dutch Civil Code.The fi nancial statements were authorised by the Management Board on 1 March 2011 and are subject to approval by theGeneral Meeting of Shareholders on 27 April 2011.(b) Basis of measurementThe consolidated fi nancial statements are prepared on the basis of historical cost except for the following assets and liabilitiesthat are stated at their fair value:• Derivative fi nancial instruments;• Investments held for trading;The methods used to measure fair values are discussed in note 3.(c) Functional and presentation currencyThe consolidated and company fi nancial statements are presented in Euro, which is the Company’s functional currency.The amounts are rounded to the nearest thousand, unless otherwise stated.(d) Use of estimates and judgementsThe preparation of fi nancial statements in conformity with IFRS requires management to make judgements, estimates andassumptions that affect amounts reported in the fi nancial statements.The estimates and associated assumptions are based on experience and various other factors that are believed to bereasonable under the circumstances and are used to judge the carrying values of assets and liabilities that are not readilyapparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions arereviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periodsaffected.In particular, information about signifi cant areas of estimation, uncertainty and critical judgements in applying accountingpolicies that have the most signifi cant effects on the amounts recognised in the fi nancial statements are described in thefollowing notes and applicable accounting policies:Note 7Note 15Note 17 and 18Note 27Note 29 and 34Business combinations / acquisition of subsidiariesUtilisation of tax lossesMeasurement of the recoverable amounts of cash generating units containing intangible assetsand property, plant & equipmentMeasurement of defi ned benefi t obligationsProvisions and contingencies

Wavin Annual Report 2010 | page 803. Significant accounting policies(a) Basis of consolidation(i) SubsidiariesSubsidiaries are those enterprises controlled by the Company. Control exists when the Company has the power, directly orindirectly, to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessingcontrol, potential voting rights that are presently exercisable are taken into account. The fi nancial statements of subsidiariesare included in the consolidated fi nancial statements from the date that control commences until the date that control ceases.The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted bythe Group. The share of third parties in the result and equity of the consolidated subsidiaries are reported separately.See page 145 for the outline of the company’s principal direct and indirect participations.(ii) AssociatesAssociates are those enterprises in which the Group has signifi cant infl uence, but not control, over the fi nancial and operatingpolicies. The consolidated fi nancial statements include the Group’s share of the total recognised gains and losses ofassociates on an equity accounted basis, from the date that signifi cant infl uence commences until the date that signifi cantinfl uence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount isreduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal orconstructive obligations or made payments on behalf of an associate.(iii) Transactions eliminated on consolidationIntragroup balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated inpreparing the consolidated fi nancial statements. Unrealised net gains after tax arising from transactions with jointly controlledentities are eliminated to the extent of the Group’s interest in the associate. Unrealised gains arising from transactions withassociates are eliminated against the investment in the associate.(b) Changes in accounting policies, presentation and estimation(i) Changes in accounting policiesThe accounting policies applied by the Group in these consolidated fi nancial statements are the same as those applied bythe Group in its consolidated fi nancial statements as at and for the year ending 31 December 2009 except for the accountingpolicies related to accounting for Business Combinations (IFRS 3) and the accounting for acquisitions of non-controllinginterests (IAS 27).The other new standards, amendments to standards and interpretations which are effective for the year 2010, including theamendment to IFRS 2, have no impact on the fi nancial statements for Wavin.(ii) Accounting for business combinationsACCOUNTING FOR BUSINESS COMBINATIONSAs of 1 January 2010 the Group has applied IFRS 3 Business Combinations (2008). All business combinations occurring onor after 1 January 2010 are accounted for by applying the acquisition method. The change in accounting policy is appliedprospectively and had no material impact on the earnings per share.Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on whichcontrol is transferred to the Group. Control is the power to govern the fi nancial and operating policies of an entity so as toobtain benefi ts from its activities. In assessing control, the Group takes into consideration a de facto control model in whichthe ability in practice to control another entity exists and no other party has the power to govern.The Group measures goodwill as the fair value of the consideration transferred including the recognised amount of anynon-controlling interest in the acquiree, less the net recognised amount of the identifi able assets acquired and liabilitiesassumed, all measured as of the acquisition date. The identifi able assets, liabilities and contingent liabilities of the acquiredcompany that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date,except for non-current assets that are classifi ed as held-for-sale. The previously unrecognised assets in the acquiredcompany such as order portfolios are valued at the fair value on acquisition date. The fair values of assets and (contingent)liabilities are provisional estimates based on best information available at the time of determining those values. Intangibleassets acquired through business combinations are amortised over their individual useful life.When the excess is negative, a bargain purchase gain is recognized immediately in profi t or loss.The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amountsare generally recognised in profi t or loss. Any contingent consideration payable is recognised at fair value at the acquisitiondate. If the contingent consideration is classifi ed as equity, it is not remeasured and settlement is accounted for within equity.Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profi t or loss.The Group measures any non-controlling interest at its proportionate interest in the identifi able net assets of the acquiree.

Wavin Annual Report 2010 | page 81Transaction costs that the Group incurs in connection with a business combination, such as fi nder’s fees, legal fees,due diligence fees and other professional and consulting fees are expensed as incurred.ACQUISITIONS BETWEEN 1 JANUARY 2004 AND 1 JANUARY 2010For acquisitions between 1 January 2004 and 1 January 2010, goodwill represents the excess of cost of the acquisition overthe Group’s interest in the recognized amount (generally at fair value) of the identifi able assets, liabilities and contingentliabilities of the acquiree. When excess fair value was negative, a bargain purchase gain was recognised immediately in profi tor loss. Transaction costs that the Group incurred in connection with the business combinations were capitalised as part ofthe cost of acquisition.ACQUISITIONS PRIOR TO 1 JANUARY 2004As part of its transition to IFRSs, the Group elected to restate only those business combinations that occurred on or after1 January 2003. In respect of acquisitions prior to 1 January 2003, goodwill represents the amount recognized under theGroup’s previous accounting framework.ACCOUNTING FOR ACQUISITIONS OF NON-CONTROLLING INTERESTSFrom 1 January 2010 the Group has applied IAS 27 Consolidated and Separated Financial Statements (2008) in accountingfor acquisitions of non-controlling interests.Under the new accounting policy, acquisitions of non-controlling interests are accounted for as transactions with equityholders in their capacity as equity holders and therefore no goodwill is recognised as a result of such transactions.The adjustments to non-controlling interests are based on proportionate amounts of the net assets of the subsidiary.Previously, goodwill was recognized arising on the acquisition of a non-controlling interest in a subsidiary which representedthe excess of the cost of the additional investment over the carrying amount of the interest in the net assets acquired at thedate of transaction.ADJUSTMENT OF PRESENTATIONWavin has adjusted the presentation of costs related to share based payment plans including LTIP and the costs of sharesissued in the statement of changes in equity to meet with broader industry practice. As of 2010 these costs will be reportedas ‘transactions with owners recorded directly in equity’ instead of as ‘other comprehensive income’. The comparative fi guresin the consolidated statement of changes in equity and in the consolidated statement of comprehensive income have beenaligned with the revised presentation. This resulted in reclassifi cations between the sub totals total comprehensive income forthe period and total transactions with owners but did not impact the total balance of the different equity categories. This alsoresulted in an adjustment of the consolidated statement of comprehensive income. The comparative fi gures in theconsolidated statement of comprehensive income have been aligned with the revised presentation. The impact of theadjustment can be specifi ed as follows:(€ x 1,000) 2009ADJUSTEDREPORTEDTotal comprehensive income for the period 9,894 (1,167)Transactions with owners, recorded directly in equity 214,557 225,618(c) Foreign currency(i) Foreign currency transactionsTransactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.The functional currency of foreign entities is the currency of the primary economic environment in which the entity operates,which is generally the local currency. Monetary assets and liabilities denominated in foreign currencies at the balance sheetdate are translated at the foreign exchange rate prevailing at that date. Foreign exchange differences arising on translation arerecognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in aforeign currency are translated using the exchange rate at the date of the transaction.(ii) Foreign operationsThe assets and liabilities of foreign operations are translated to Euro at foreign exchange rates prevailing at the balance sheetdate. The differences due to the conversion at beginning and fi nal rates as related to the equity of the foreign participationsare processed directly in the reserves as a separate component of equity. The revenues and expenses of foreign operationsare translated to Euro at established average exchange rates which approximate the rates at the date of the transactions.The difference between the conversion of proceeds and costs at the established average exchange rates and the exchange

Wavin Annual Report 2010 | page 82rates prevailing at the end of the year is also processed directly in the reserves as a separate component of equity.Upon disposal of foreign operations these cumulative translation adjustments are recognised in the income statement.Foreign currency translation differences are recognised in other comprehensive income and presented in the foreign currencytranslation reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate shareof the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such thatcontrol, signifi cant infl uence or joint control is lost, the cumulative amount in the translation reserve related to that foreignoperation is reclassifi ed to profi t or loss as part of the gain or loss on disposal. When the Group disposes of only part of itsinterest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulativeamount is reattributed to non-controlling interest. When the Group disposes only part of its investment in an associate thatincludes a foreign operation while retaining signifi cant infl uence or joint control, the relevant proportion of the cumulativeamount is reclassifi ed to profi t or loss.The following exchange rates, for the signifi cant countries in which the Group operates, were used in preparing these fi nancialstatements:2010 2009 2010 200931 DECEMBER 31 DECEMBER AVERAGE AVERAGEPound Sterling 0.8608 0.8881 0.8577 0.8900Polish Zloty 3.9750 4.1045 3.9921 4.3293Danish Krone 7.4535 7.4418 7.4463 7.4461Norwegian Krone 7.8000 8.3000 7.9997 8.7279Czech Koruna 25.0610 26.4730 25.2133 26.4286Turkish Lira 2.0694 2.1547 1.9949 2.1599Hungarian Forint 277.9500 270.4200 274.9866 280.0983US Dollar 1.3362 1.4406 1.3262 1.3925(iii) Net investment in foreign operationsExchange differences arising from the translation of the net investment in foreign operations, and of related hedges, arerecognised in the translation reserve to the extent that net investment hedge accounting is being applied and the hedge iseffective. Upon disposal, the exchange differences in the translation reserve are released in the income statement.In respect of all foreign operations, translation differences that arose before 1 January 2004, the date of the transition to IFRS,are presented as a separate component of equity.(d) Financial instruments(i) Non-derivative financial instrumentsNon-derivative fi nancial instruments comprise investments in equity and debt securities, trade and other receivables,cash and cash equivalents, loans and borrowings as well as trade and other liabilities.Non-derivative fi nancial instruments are recognised initially at fair value. Attributable transaction costs are recognised in theincome statement when incurred. Subsequent to initial recognition non-derivative fi nancial instruments are measured asdescribed below.Cash and cash equivalents comprise cash balances and call deposits. Wavin is operating a notional cash pool system forcash management of group companies. The positive and negative positions under the cash pool system are netted. As aconsequence the fi nance income and fi nance expense related to this system are also presented on a net basis.Accounting for fi nancial income and expense is disclosed in accounting policy (ab).HELD-TO-MATURITY INVESTMENTSIf the Group has the positive ability and intent to hold debt securities to maturity, then they are classifi ed as held-to-maturity.Held-to-maturity investments are measured at amortised cost using the effective interest method, less any impairment loss.FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSSFinancial assets and liabilities are classifi ed at fair value through profi t or loss if they are held for trading or are designated assuch upon initial recognition. Financial instruments are designated at fair value through profi t or loss if the Group managessuch investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s

Wavin Annual Report 2010 | page 83documented risk management or investment strategy. Upon initial recognition attributable transaction costs are recognisedin the income statement when incurred.LOANS AND RECEIVABLESLoans and receivables are fi nancial assets with fi xed or determinable payments that are not quoted in an active market.Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initialrecognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairmentlosses. Loans and receivables comprise cash and cash equivalents and trade and other receivables.AVAILABLE-FOR-SALE FINANCIAL ASSETSAvailable-for-sale fi nancial assets are non-derivative fi nancial assets that are designated as available for sale or are notclassifi ed in any of the above categories of fi nancial assets. Subsequent to initial recognition, they are measured at fair valueand changes therein, other than impairment losses (see note 3 (l)) and foreign exchange gains and losses on available-for-salemonetary items are recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity istransferred to the income statement.OTHEROther non-derivative fi nancial instruments are measured at amortised cost using the effective interest method, lessimpairment losses.(ii) Derivative financial instrumentsThe Group uses derivative fi nancial instruments to hedge its exposure to foreign exchange and interest rate risks arising fromoperational, fi nancing and investment activities. Generally the Group enters into hedge contracts in order to minimise theeffects of foreign currency and interest rate fl uctuations in the income statement (for further details we refer to note 4).Derivatives that can be used are interest rate swaps, fx-forward contracts, fx-swaps and fx-options. Transactions are enteredinto with a limited number of counterparties with sound credit ratings. Foreign currency and interest rate hedging operationsare governed according to the treasury policy which is approved and monitored by the Management Board. In accordancewith its treasury policy, the Group does not hold or issue derivative fi nancial instruments for trading purposes.Derivative fi nancial instruments are recognised initially at fair value. Attributable transaction costs are recognised in the incomestatement when incurred. Subsequent to initial recognition, derivative fi nancial instruments are measured at fair value andchanges therein are accounted as described below. The fair value of forward exchange contracts are, if available, their quotedmarket price at the balance sheet date. For the fair value calculation of interest rate swaps we refer to note 3 (ah)(ii).CASH FLOW HEDGESChanges in the fair value of the derivative hedging instrument designated as a cash fl ow hedge are recognised directly inequity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognisedin the income statement.When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, anycumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction isultimately recognized in the income statement. When a forecast transaction is no longer expected to occur, the cumulativegain or loss that was reported in equity is immediately transferred to the income statement.HEDGE OF NET INVESTMENT IN FOREIGN OPERATIONWhere a foreign currency liability hedges a net investment in a foreign operation, foreign exchange differences arising ontranslation of the liability are recognised net of tax directly in equity when net investment hedge accounting is applied.The ineffective portion is recognised immediately in the income statement.(iii) Share capitalORDINARY SHARESOrdinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of ordinary shares and shareoptions are recognised as a deduction of equity, net of tax.REPURCHASE OF SHARE CAPITALWhen share capital recognised is repurchased the amount of the consideration paid, which includes directly attributablecosts, is recognised as a deduction of equity, net of tax. Repurchased shares are classifi ed as treasury shares unless decidedotherwise. When treasury shares are sold or re-issued, the amount received is recognised as an increase in equity.Transactions related to treasury shares are included in retained earnings.

Wavin Annual Report 2010 | page 84(e) Property, plant & equipment(i) Owned assetsAll items of property, plant & equipment are stated at cost less cost reducing subsidies received from the government (seenote 3 (s)), accumulated depreciation (see section (iv) Depreciation) and impairment losses (see note 3 (l)). Costs includeexpenditures that are directly attributable to the acquisition of the asset, including capitalised borrowing costs for qualifyingassets.Property that is being constructed or developed for future use as investment property is classifi ed under property, plant &equipment in progress and stated at cost until construction or development is completed, at which time it is reclassifi ed asinvestment property. Assets which have been ordered but for which no invoices have been received yet, are disclosed undercapital commitments.Where an item of property, plant & equipment comprises major components that have different useful lives, they areaccounted for as separate items of property, plant & equipment. The cost of replacing a component of an item of property,plant & equipment is recognised in the carrying amount of the item if it is probable that the future economic benefi tsembodied within the component will fl ow to the Group, and its cost can be measured reliably. Where possible the carryingamount of the replaced component is derecognised. Day to day maintenance costs of property, plant & equipment areexpensed in the period in which they occur.Gains and losses on the sale of property, plant & equipment are included in the income statement as other income. If there isan indication that an asset may be impaired, the recoverable amount of the asset is estimated. If the carrying value exceedsthe recoverable amount, an impairment charge is recognised in the income statement.(ii) Leased assetsLeases in terms of which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nanceleases. Plant and equipment acquired by way of fi nance lease is stated at an amount equal to the lower of its fair value andthe present value of the minimum lease payments at inception of the lease, less accumulated depreciation (see section (iv)Depreciation) and impairment losses. Other leases are operating leases which are not recognised in the balance sheet andare recognised in the income statement as an expense as incurred.(iii) Subsequent expenditureThe cost of replacing part of an item of property, plant & equipment is capitalised as a separate asset when it is probable thatthe future economic benefi ts embodied within the part will fl ow to the Group and its costs can be measured reliably. Thecarrying amount of the replaced part is derecognised. Other subsequent expenditure is capitalised only when it increases thefuture economic benefi ts embodied in the item of property, plant & equipment. All other expenditure is recognised in theincome statement as an expense as incurred.(iv) DepreciationDepreciation is charged to the income statement on a straight-line basis over the estimated useful lives of items of property,plant & equipment, and major components that are accounted for separately. Land is not depreciated as it is deemed to havean indefi nite life. Assets under construction are not depreciated. The rates for depreciation are:Surfaces 10%Buildings 2.5%Installations and production machinery 5 to 15%Heads, cones, moulds 10 to 12.5%Transport equipment 20%Computer hardware 20 to 33.33%Offi ce equipment/furniture 10%The residual value, useful lives and depreciation methods are reassessed annually.(f) Intangible assets(i) GoodwillGoodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For the measurement of goodwill atinitial recognition we refer to note 2b.Goodwill is stated at cost less accumulated impairment charges (see note 3 (l)). Goodwill is not amortised but tested annuallyfor impairment. In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investmentin the associate.

Wavin Annual Report 2010 | page 85(ii) Brand namesThe Group carries assets in the balance sheet for the major brands such as ‘Wavin’, ’Hep 2O’, ’Chemidro’ and ‘Pilsa’.Internally generated brands are not capitalised. The fair value of an acquired brand name is estimated using generallyaccepted valuation methods such as the relief from royalty method. Brand names have an indefi nite live as there are nomaterial legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of these intangibles.Furthermore:• the Group has the ability to transfer the brand name to new product groups;• the Group supports the main brands through spending on marketing across the business and through investments inpromotional support. The brands are expected to be in longstanding and profi table market sectors;• the likelihood that market-based factors could reduce a brand’s life is relatively remote because of the size, diversifi cationand market share of the brands in question;• the Group owns the trademark for all brands valued on the balance sheet and renews these for nominal cost at regularintervals. The Group has never experienced problems with such renewals.(iii) Customer relationsAcquired customer relations and distribution networks are calculated based on the Group’s valuation methodology, which isbased on cash fl ow projections of value-added products taking into account an attrition rate for the acquired customers. Wehave excluded the revenue generated by the sale of commoditised products, since for these products the competition isbased on price and having excellent customer relationships hardly has any impact. Acquired customer relations anddistribution networks are stated at fair value at acquisition date less accumulated amortisation (see below) and impairmentlosses (see note 3 (I)).(iv) Other assets from business combinationsThe previously unrecognised assets in an acquired company such as order portfolios are recognised at the fair value onacquisition date. These other intangible assets acquired through business combinations are amortised over their individualuseful life of which the range is one to fi ve years.(v) Research and developmentExpenditure on research activities, undertaken with the prospect of gaining new scientifi c or technical knowledge andunderstanding, is recognised in the income statement as an expense when incurred. Development activities involve a plan ordesign for the production of new or substantially improved products and processes. These are capitalised only if developmentcosts can be measured reliably and the product or process is technically and commercially feasible and the Group hassuffi cient resources to complete development. The expenditure capitalised includes the cost of materials, direct labour,an appropriate part of overhead costs and capitalised borrowing costs for qualifying projects. Other development expenditureis recognised in the income statement when incurred. Capitalised development expenditure is stated at cost lessaccumulated amortisation (see below) and impairment losses (see note 3 (l)).(vi) Other intangible assetsOther intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see below) andimpairment losses (see note 3 (l)). Expenditure on internally generated goodwill, patents, brands, etc. is recognised in theincome statement as an expense when incurred.(vii) Subsequent expenditureSubsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefi tsembodied in the specifi c asset to which it relates. All other expenditure is expensed when incurred.(vii) AmortisationAmortisation is charged to the income statement on a straight-line basis over the estimated useful life of intangible assets.Intangible assets other than goodwill and brand names are amortised from the date they are available for use. The annualamortisation rates are:Customer relations and distribution networks 4 to 10%Other assets from business combinations 20 to 50%Licenses 20%Capitalised development costs 20%Software 20 to 33.33%Brand names are an indissoluble part of the Company on a going concern principle. The Company is continuously investingin its brand names to maintain its competitive position and therefore the value of the brand names. Due to this infi nitecharacter the brand names are not amortised but tested for impairment annually.

Wavin Annual Report 2010 | page 86(g) Other non-current investmentsThe other non-current investments mainly comprise long term credit facilities extended to customers and associates,other investments and guarantees deposited, after providing for doubtful debts.(h) Deferred tax assetsLong term tax assets resulting from temporary differences between fi nancial statements and fi scal valuations are capitalisedas deferred tax assets as long as it is probable they will result in a future cash infl ow. If a Group company is not expecting topay profi t taxes for the coming years due to negative results, the deferred tax asset is not recognised. Tax losses carriedforward for compensation with future profi ts that will probably materialise in the foreseeable future are also included underdeferred tax assets.(i)Other current investmentsInvestments in debt and equity securities held by the Group are classifi ed as being held for trading and are stated at fairvalue, with any resultant gain or loss being recognised in the income statement.(j)InventoriesInventories are stated at the lower of cost (see note 3 (x)) and net realisable value. Net realisable value is the estimated sellingprice in the ordinary course of the business, less the estimated selling costs. The cost of inventories is based on the fi rst-infi rst-out principle and includes expenditures incurred in acquiring the inventories, production or conversion costs and othercosts incurred in bringing it to their existing location. Costs for self-manufactured inventories and work in progress include anappropriate share of overhead costs based on normal operating capacity.(k) Trade and other receivablesTrade receivables, receivables from associates, prepaid expenses and accrued income are recognised initially at fair value.Subsequent to initial recognition, receivables are measured at amortised cost using the effective interest method lessimpairment losses (see note 3 (l)). Discounted drafts with recourse are accounted for as debtors with the correspondingliability in interest-bearing loans and borrowings.(l)(i)ImpairmentFinancial assets (including receivables)A fi nancial asset not carried at fair value through profi t or loss is assessed at each balance sheet date to determine whetherthere is objective evidence that it should be impaired. A fi nancial asset is impaired if objective evidence indicates that a lossevent has occurred after the initial recognition of the asset. All individual signifi cant receivables are assessed for specifi cimpairment. Receivables that are not individually signifi cant are collectively assessed for impairment. If any such indicationexists, the asset’s recoverable amount is estimated. Losses are recognised in the income statement and refl ected in anallowance account against receivables. When a subsequent event causes the amount of impairment to decrease, thedecrease in impairment loss is reversed through the income statement.(ii) Non-financial assetsThe carrying amounts of the Group’s non-fi nancial assets other than other current investments (see note 3 (i)), inventories (seenote 3 (j)) and deferred tax assets (see note 3 (h)) are reviewed at each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill, andintangible assets that have indefi nite useful lives or that are not yet available for use, the recoverable amount is estimatedeach year at the same time.An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds itsrecoverable amount. A CGU is the smallest identifi able asset group that generates cash fl ows that largely are independentfrom other assets and groups. Impairment losses are recognised in the income statement.Impairment losses recognised in respect of CGUs are allocated fi rst to reduce the carrying amount of any goodwill allocatedto the units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.(iii) Calculation of recoverable amountThe recoverable amount of other non-current investments is calculated as the net present value of expected future cashfl ows, discounted at the original effective interest rate inherent in the asset. Assets with a short duration are not discounted.The recoverable amount of other assets is the greater of the fair value less cost to sell and value in use. In assessing the valuein use, the estimated cash fl ows are discounted to their net present value using an average pre-tax discount rate that refl ectscurrent market assessments of the time value of money and the risks specifi c to the asset. For an asset that does notgenerate largely independent cash infl ows, the recoverable amount is determined for the CGU to which the asset belongs.

Wavin Annual Report 2010 | page 87For the purpose of impairment testing, goodwill is allocated to the CGU or group of CGUs which represent the lowest levelwithin the Group at which the goodwill is monitored for internal management purposes.The Group’s corporate assets are allocated to the CGUs. If there is an indication that a corporate asset may be impaired,then the recoverable amount is determined for the CGU to which the corporate asset belongs.Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately and therefore isnot tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment asa single asset when there is objective evidence that the investment in an associate may be impaired.(iv) Reversals of impairmentAn impairment loss of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periodsare assessed at each reporting date for any indications that the impairment loss has decreased or no longer exists.An impairment loss in respect of a non-current asset is reversed if the subsequent increase in recoverable amount can berelated to an event occurring after the impairment loss was recognised. In respect of other assets, an impairment loss isreversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss isreversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have beendetermined, net of depreciation or amortisation, if no impairment loss had been recognised.(m) Assets classified as held-for-saleNon-current assets, or disposal groups comprising assets and/or liabilities, that are expected to be recovered primarilythrough sale rather than through continuing use are classifi ed as held-for-sale. Immediately before classifi cation as held-forsalethe assets are remeasured in accordance with the Group’s accounting policies. Thereafter the assets are measured atthe lower of their carrying amount or fair value less cost to sell and are no longer depreciated. Any impairment loss on adisposal group fi rst is allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no lossis allocated to fi nancial assets, deferred tax assets and employee benefi t assets, which continue to be measured inaccordance with the Group’s accounting policies. Impairment losses on initial classifi cation as held-for-sale and subsequentgains or losses on remeasurement are recognised in the income statement. Gains are not recognised in excess of anycumulative impairment loss.Intangible assets and property, plant & equipment once classifi ed as held-for-sale are not amortised or depreciated.In addition, equity accounting of equity-accounted investees ceases once classifi ed as held-for-sale.(n) Cash and cash equivalentsCash and cash equivalents comprise cash in hand, cash in bank accounts and call deposits with original maturities of threemonths or less. All amounts are readily available.(o) EquityRetained earnings / appropriation of profitThe net profi t for the year under review is added to the retained earnings taking into account the required movements in legalreserves. Dividends are discretionary at the option of the shareholders. Dividends are recognised as a liability in the period inwhich they are declared.The Group can only declare dividends in so far as the equity exceeds the amount of the paid-up capital increased by thereserves that must be legally maintained and taking into account the restrictions agreed under our Syndicated Loan Facility todistribute cash dividends.(p) Interest-bearing loans and borrowingsInterest-bearing loans and borrowings are recognised initially at fair value net of transaction costs incurred, with any differencebetween initial carrying amount and redemption value being recognised in the income statement over the period of theborrowings on an effective interest basis. Subsequent to initial recognition the interest-bearing loans and borrowings aremeasured at amortised cost using the effective interest method.Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan and are amortised using theeffective interest method during the period of the borrowings.

Wavin Annual Report 2010 | page 88(q) Employee benefits(i) Defined contribution plansA defi ned contribution plan is a post-employment benefi t plan under which an entity pays fi xed contributions into a separateentity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defi nedcontribution plans are recognised as an expense in the income statement when they are due. Prepaid contributions arerecognised as an asset to the extent that a cash refund or a reduction in future payments is available to the Group.(ii) Defined benefit plansThe Group’s net obligation in respect of defi ned benefi t plans is calculated separately for each plan by estimating the amountof future benefi ts that employees have earned in return for their service in the current and prior periods. The benefi ts arediscounted to determine the present value after which the fair value of the plan assets is deducted. The discount rate is theyield at balance sheet date on high quality corporate bonds that have maturity dates approximating the terms of theobligations. The calculations are made by qualifi ed actuaries using the projected unit credit method.Actuarial gains and losses that arise in calculating our obligation in respect of a plan, are recognised to the extent that anycumulative unrecognised actuarial gain or loss exceeds 10 percent of the greater of the present value of the defi ned benefi tobligations or the fair value of plan assets. That portion is recognised in the income statement over the expected averageremaining working lives of the employees participating in the plan. We have adopted IFRIC 14 ’IAS 19 – The Limit on aDefi ned Benefi t Asset, Minimum Funding Requirements and their Interaction’, which provides guidance on the amount of thesurplus that can be recognised as an asset. This interpretation is applied.When the benefi ts of a plan are improved the portion of the increased benefi t relating to the past service by employees isrecognised as an expense in the income statement on a straight line basis over the average period until the benefi ts becomevested. To the extent that the benefi ts vest immediately, the expense is recognised immediately in the income statement.When the calculation results in a benefi t to the Group, the recognised asset is limited to the total of any unrecognisedactuarial losses and past service costs and the present value of the economic benefi ts available in the form of any futurerefunds from the plan or reductions in future contributions to the plan.(iii) Other non-current employee benefitsThis relates to non-current legal or constructive obligations as incorporated in (collective) labour agreements, companyregulations, etc. (such as jubilee allowances, long term incentives, allowances for non-current service, medical, sickness anddisability, etc.). These obligations are provided for on an actuarial basis. The method is equal to the actuarial calculation fordefi ned benefi t plans with the exception that actuarial results are charged as costs without using a corridor and all pastservice costs are recognised immediately in the income statement without any transitional option.(iv) Current employee benefitsCurrent employee benefi t obligations are measured on an undiscounted basis and are expensed as the related service isprovided.A provision is recognised for the amount expected to be paid under short term cash bonus or profi t sharing plans if the Grouphas a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and theobligation can be estimated reliably.(r) Share-based payment transactionsTo senior management (including the Management Board) a share-based payment award is granted. This share plan is basedon certain performance conditions.The grant date fair value of share-based payment awards is recognised as a personnel expense with a correspondingincrease in equity over the period that the employees become unconditionally entitled to the awards. The costs of the shareplan for senior management are recognised evenly over the vesting period.At each balance sheet date the Group assesses its estimates of the number of share and option rights that are expected tovest. The amount recognised as an expense is adjusted, when necessary, to refl ect the number of awards for which thenon-market performance and service conditions are expected to be met, such that the amount ultimately recognised as anexpense is based on the number of awards that meet the related service and performance conditions at the vesting date.(s) Government grantsAn unconditional government grant is recognised in the income statement when receipt of the grant is virtually certain. Othergovernment grants are recognised initially as deferred income when there is reasonable assurance that they will be received

Wavin Annual Report 2010 | page 89and that the Group will comply with conditions associated with the grant. Grants that compensate the Group for expensesincurred are recognised in the income statement on a systematic basis in the same periods in which the expenses arerecognised. For grants that compensate the Group for the costs of an asset we refer to note 3(e).(t) ProvisionsA provision is recognised in the balance sheet when the Group has a legal or constructive obligation as a result of a pastevent, and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation. If the effect is material,provisions are determined by discounting the expected future cash fl ows at a pre-tax rate that refl ects current marketassessments of the time value of money and, where appropriate, the risks specifi c to the liability.(i)WarrantiesFor products or services sold, a provision is recognised based on actual claims received and on historical data regardingwarranty costs, which were not provided for on an individual claims basis. The product liability insurance cover is taken intoaccount when determining the provision. Claims honoured are charged against the provision.(ii) RestructuringA provision for restructuring is recognised when a formal restructuring plan is approved and the restructuring has eithercommenced or has been announced publicly.(iii) TaxThe tax provision is recognised for identifi ed tax exposures in the Group.(iv) OthersThe other provisions mainly consist of provisions for the obligation to take back returnable packaging, quarry restorations andfor environmental commitments. A provision for site restoration is recognised when there is a legal or constructive obligationto reduce or solve pollution of land, air, water etc. All environmental provisions are based on expert reports.(u) Deferred tax liabilitiesLong term tax liabilities resulting from temporary differences between fi nancial statements and fi scal valuations per fi scal entityare recognised as deferred tax liability as long as they are expected to result in a cash outfl ow. No deferred tax liabilities aretaken into account when it is probable that no profi t taxes will be paid due to available losses carried forward.(v) Trade and other payablesTrade and other payables are recognised initially at fair value. Subsequent to initial recognition, trade and other payables aremeasured at amortised cost using the effective interest method.(w) RevenueRevenue is derived from the goods and services sold and delivered during the year net of rebates and discounts and net ofsales tax. Revenue from the sales of goods is recognised in the income statement when the signifi cant risks and rewards ofownership have been transferred to a third party, recovery of the consideration is probable, the associated costs and possiblereturn of goods can be estimated reliably and there is no continuing management involvement with the goods. The timing ofthe transfers of risks and rewards depends on the individual delivery conditions. For the revenue of sales of goods theseconditions are generally met at the time the product is delivered to the customer. Revenue from services rendered isrecognised in the income statement in proportion to the stage of completion. If it is probable that discounts will be grantedand the amount can be measured reliably, then the discount is recognised as a reduction of revenue at the same time thesales are recognised.(x) Cost of salesCost of sales comprises the manufacturing costs of the goods sold and delivered, and any inventory write downs to lower netrealisable value. Manufacturing costs include items as:• the costs of raw materials and supplies, energy, packaging and other materials;• depreciation and the costs of maintenance of the assets used in production;• salaries, wages and social charges for the personnel involved in manufacturing.(y) Research and development expensesResearch and other not capitalised development expenses are charged to income as incurred. Amortisation of capitaliseddevelopment costs is charged on a straight-line basis over the estimated useful life.

Wavin Annual Report 2010 | page 90(z) ExpensesOperating expenses (sales, distribution and administrative) are charged to income as incurred. Payments made underoperational lease contracts are recognised in the income statement on a straight-line basis over the term of the lease.(aa) Non-recurring income and expenseNon-recurring income and non-recurring expenses are signifi cant one-off income and expenses out of the ordinary course ofbusiness which result from e.g. restructuring of activities, sale of assets, sale of associates, impairment charges, costs relatedto acquisitions which cannot be capitalised, liquidation losses and the effects of the adjustment of income tax rates.Non-recurring income and non-recurring expenses are reported separately to give a better refl ection of the operatingperformance of the Group for the periods concerned.(ab) Finance income and expenseFinance income comprises interest income on funds invested, gains on the disposal of available-for-sale fi nancial assets,changes in the fair value of fi nancial assets at fair value through profi t or loss, foreign currency gains as well as gains onhedging instruments that are recognised in the income statement. Interest income is recognised as it accrues, using theeffective interest method.Finance expense comprises interest expense on borrowings, amortisation of fees relating to the arrangement of borrowings,foreign currency losses, changes in the fair value of fi nancial assets at fair value through profi t or loss, impairment lossesrecognised on fi nancial assets and losses on hedging instruments that are recognised in the income statement. Borrowingcosts are recognised in the income statement using the effective interest method. As the actual positive and negativepositions under the notional cash pool system are netted, the related fi nance income and expense are netted as well.Foreign currency gains and losses arising from a group of similar transactions are reported on a net basis. Such gains andlosses are, however, reported separately if they are material.(ac) Income tax expenseIncome tax is accounted for in accordance with the tax regulations of the country of domicile concerned.Income tax on the result for the year comprises current and deferred tax. Income tax is recognised in the income statementunless it relates to items recognised directly in equity, in which case the income tax is recognised directly in equity or othercomprehensive income.Current tax is the expected tax payable on the taxable income for the year, using tax rates valid at the balance sheet date andany adjustment to tax payable in respect of previous years.Deferred tax is recognised using the balance sheet liability method, providing for temporary differences between the carryingamounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. The followingtemporary differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of assets orliabilities that affect neither accounting nor taxable profi t nor differences relating to investments in subsidiaries to the extentthat they will probably not reverse in the foreseeable future.The amount of deferred tax recognised is based on the expected realisation or settlement of the carrying amount of assetsand liabilities using tax rates that are expected to apply to the period when the asset is realised or the liability is settled basedon the tax rates that have been enacted on the balance sheet date. The tax rates are based on the laws that have beenenacted or substantially enacted at the reporting date. No provision for deferred tax liabilities is made when it is not probablethat profi t taxes will be paid due to available losses carried forward.A deferred tax asset is recognised only to the extent that it is probable that future taxable profi ts will be available againstwhich the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it isno longer probable that the related tax benefi t will be realised.(ad) Discontinued operationsA discontinued operation is a clearly distinguishable component of the Group’s business that is abandoned or terminatedpursuant to a single plan, and which represents a separate major line of business or geographic area of operations.(ae) Earnings per shareThe Group presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profi tor loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstandingduring the period.

Wavin Annual Report 2010 | page 91Diluted EPS is determined by adjusting the profi t or loss attributable to ordinary shareholders and the weighted averagenumber of ordinary shares outstanding for the effects of all potential dilutive ordinary shares, which comprise matching sharesand performance options granted to eligible employees.(af) Cash flow statementThe cash fl ow statement is prepared using the indirect method. Changes in the balance sheet items that have not resulted incash fl ows such as translation differences, fair value changes, equity-settled share-based payments and other non-cashitems, have been eliminated for the purpose of preparing this statement. Assets and liabilities acquired as part of a businesscombination are included in investing activities (net of cash acquired). Dividends paid to ordinary shareholders are included infi nancing activities. Dividends received are classifi ed as investing activities. Interest paid is included in operating activities.(ag) Segment reportingA segment is a distinguishable component of the Group that is engaged either in providing products within a particulareconomic environment (geographic segment), or providing related products (business segment), which is subject to risksand rewards that are different from those of other segments. The operating segment’s performance is assessed andoperating and fi nancial results are reviewed regularly by the Management Board to take decisions about resources to beallocated to the segment. For each operating segment reliable fi nancial information is available.The Group’s format for segment reporting is based on geographic segments. In addition the company assesses the revenueof business segments.(ah) Determination of fair valuesA number of the Group’s accounting policies and disclosures require the determination of fair value, for both fi nancial andnon-fi nancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based onthe methods described below. Where applicable, further information about the assumptions made in determining fair values isdisclosed in the notes specifi c to that asset or liability.(i)Business combinationsIn business combinations identifi able assets and liabilities, and contingent liabilities are recognised at their fair values atacquisition date. The acquisition date is the date on which control is transferred to the acquirer. Control is the power togovern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, theGroup takes into consideration potential voting rights that currently are exercisable.Determining the fair values requires signifi cant judgements on future cash fl ows to be generated.The fair value of brand names, distribution networks and customer relations, patents and trademarks acquired in a businesscombination is estimated using generally accepted valuation methods. The fair value of property, plant & equipmentrecognised as a result of a business combination is based on estimated market values.The fair value of inventories acquired in a business combination is determined based on its estimated selling price in theordinary course of the business less the estimated costs of completion and cost to sell as well as a reasonable profi t marginbased on the effort required to complete and sell the inventories.The fair values of these assets are provisional estimates based on the best information available at the time of determiningthose values. If within a timeframe of 12 months after acquisition it can be demonstrated that new information provides betterevidence about the fair value of any asset or (contingent) liability at acquisition date, the estimates are adjusted.(ii) Financial instrumentsThe fair value of forward exchange contracts is based on their quoted market price, if available.The fair value of interest rate swaps is estimated by discounting the difference between cash fl ows resulting from thecontractual interest rates of both legs of the transaction, taking into account current interest rates and the currentcreditworthiness of the swap counterparties.The fair value of non-derivative fi nancial instruments, which is determined for disclosure purposes, is calculated based on thepresent value of future cash fl ows, discounted at the market rate of interest at the reporting date.(iii) Share-based payment transactionsThe fair value of employee stock options is measured using a binominal tree valuation methodology. The fair value of grantedmatching shares is measured using a Black-Scholes option pricing model. Measurement inputs include share price on

Wavin Annual Report 2010 | page 92measurement date, exercise price of the instrument, expected volatility, weighted average expected life of the instruments,expected dividends and the risk-free interest rate. Service and non-market performance conditions related to the grant arenot taken into account determining the fair value.(iv) Pensions and other post-retirement benefitsRetirement benefi ts represent obligations that will be settled in the future and require assumptions to project benefi tobligations and fair values of plan assets. Retirement benefi t accounting is intended to refl ect the recognition of future benefi tcosts over the employee’s approximate service period, based on terms of the plans and the investment and funding decisionsmade by the Company. The accounting requires management to make assumptions regarding variables such as discountrate, rate of compensation increase, return on assets, mortality rates and future healthcare costs. Periodically, managementconsults with external actuaries regarding these assumptions. Changes in these key assumptions can have a signifi cantimpact on the projected benefi t obligations, funding requirements and periodic costs incurred. For details on key assumptionsand policies we refer to note 27.(ai) New standards and interpretations not yet implementedA number of new standards, amendments to standards and interpretations are not yet effective for the year ended31 December 2010, and have not been applied in preparing these consolidated fi nancial statements. None of these isexpected to have a signifi cant effect on the consolidated fi nancial statements of the Group, except for IFRS 9 FinancialInstruments, which is expected to become mandatory for the Group’s 2013 consolidated fi nancial statements and couldchange the classifi cation and measurement of fi nancial assets. The Group does not plan to adopt this standard early andthe extent of the impact has not been determined yet.4. Financial risk managementOverviewWavin is exposed to internal and external risks and uncertainties that may affect its business, fi nancial results or operationalperformance. To mitigate these risks, the Company has defi ned policies and guidelines that are followed throughout theorganisation. These policies and guidelines are translated into internal risk management and control systems aimed at theadequate and effective control of these identifi ed exposures. The Company regularly reviews the control systems to assesstheir adequacy. We feel that these policies and systems contribute to a more effective and transparent organisation.The Management Board has the overall responsibility for the Group’s risk management framework. The Audit Committeeoversees and reviews the adequacy of the risk management framework in relation to the risks faced by the Group and itsprocedures to control and to monitor compliance with the Group’s risk management policies. We refer to page 42 of theannual report for a description of major risk factors such as strategic, operational and fi nancial risks.This note covers the Group’s policies and procedures for controlling credit risk, liquidity risk and currency risk.First the impact of the credit crisis on fi nancial risks is highlighted followed by a description of our general fi nancial risks andinterest rate risks.The credit crisis and its impact on WavinAfter two years of contraction the Group realised an encouraging increase in revenue in 2010. Signifi cant growth in someregions compensated the sharp decline in construction markets in other regions. However, heavy price competition andsignifi cant price increases of our raw materials resulted in margin pressure which had a negative impact on our results in2010. Benefi ts from implemented cost reduction programmes partly offset the negative effect of margin pressure. Throughoutthe year we took additional steps to further optimise the cost structure of the Group.Capital StructureThe policy of Wavin is to deploy an effi cient capital structure that maintains investor, creditor and market confi dence andsupports future development of the business. The Management Board monitors the debt to equity ratio and return on capitalemployed closely.Periodically the Management Board evaluates the need to purchase own shares on the market. Primarily the shares areintended to be used for issuing shares for the Group’s Long Term Incentive Plan (see note 28). The Group does not have adefi ned share buy-back plan. Buy and sell decisions are made on a specifi c transaction basis by the Management Board afterapproval by the Supervisory Board.Wavin has set clear targets for its level of borrowings in relation to results (leverage) and interest cost (interest coverage).Despite the continued tight control of working capital management, working capital increased as a result of higher sales andhigher raw material prices. Also the change in geographical mix of our sales resulted in a further increase of the outstandingdebtor positions. Spending on investments increased slightly by € 2.6 million to € 43.2 million in 2010. Mainly as a result of

Wavin Annual Report 2010 | page 93increasing working capital needs net debt increased by € 19.3 million compared to last year, ending on € 256.1 million(31 December 2009 € 236.8 million).The Company is largely fi nanced through a € 500 million Syndicated Loan Facility that expires in October 2011 and a ForwardStart Facility of € 475 million starting in October 2011 with a maturity date of April 2013. The facilities consist of a term loanand revolving facilities. In the course of 2010 the margins of both facilities were renegotiated resulting in an annual saving of€ 3.5 million starting on 24 November 2010. With the current facilities in place, Wavin is adequatly funded, even if tradingconditions remain challenging, and will have suffi cient liquidity when markets recover further.The Company operated well within the bank covenants. Per 31 December 2010 our leverage ratio (for a defi nition see note26) was 2.27, well below the allowed ratio of 3.7. Over the year our interest coverage ratio (for a defi nition see note 26) was3.68 compared to a minimum agreed ratio of 2.3. Both ratios were measured on a quarterly basis in 2010. For quantitativedetails regarding debt covenants we refer to note 26. Wavin expects even in continuing challenging trading conditions to becompliant with the covenants.Financial risksCredit risksCredit risk is the risk of fi nancial loss to the Group if a customer or counterparty to a fi nancial instrument fails to meet itscontractual obligations and arises principally from the Group’s trade receivables.TRADE AND OTHER RECEIVABLESThe Group’s exposure to credit risk is infl uenced by the individual characteristics of each customer. The demographics of theGroup’s customer base, including the default risk of the industry and the country in which customers operate, has aninfl uence on credit risk. Approximately 28% (2009: 32%) of the Group’s revenue is attributable to sales transactions with theten largest customers. At balance sheet date there were no signifi cant concentrations of credit risk on customer level norgeographically.The Company realises approximately 27% (2009: 25%) of its sales in emerging economies where payment terms aregenerally longer than in Western Europe and availability of information on the fi nancial history of customers is often limited,which makes it more diffi cult for us to accurately assess the associated credit risk.Any credit losses we may suffer as a result of these risks or as a result of credit losses from any signifi cant customer couldadversely affect our business, results of operations and fi nancial conditions. Sales might be affected by fast changingeconomic, regulatory, social and political environments. The maximum exposure to credit risk is represented by the carryingamount of each fi nancial asset, including derivative fi nancial instruments, in the balance sheet. At year end, the maximumcredit risk exposure amounted to € 322.4 million (2009: € 296.3 million).The Group has strict policies regarding credit and payment terms which are closely monitored at local and corporate level.Credit limits are established for most of the customers. These limits are periodically reviewed. Transactions with customersthat fail to meet the Group’s credit policy are intensively monitored. This risk assessment could result in a (temporary) situationthat these customers may only transact with the Group on a prepayment basis. In the Netherlands, Belgium, Ireland, Polandand France our credit risks are partly insured. In France we have a non-recourse factoring facility of € 25.0 million of which€ 12.3 million was used.The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade andother receivables and investments. The main component of this allowance is a specifi c loss component that relates toindividually signifi cant exposures. In specifi c cases a collective loss component is established for groups of similar assets inrespect of losses that have been incurred but not yet identifi ed. The collective loss allowance is determined based on thehistorical data of payment statistics for similar fi nancial assets. Trade receivables increased from € 228.1 million in 2009 to€ 252.3 million in 2010 due to increased revenues and the change in geographical mix which includes a higher share of salesto emerging markets where payment terms are longer than in mature markets.

Wavin Annual Report 2010 | page 94ALLOWANCE FOR IMPAIRMENTThe credit risk from trade receivables is measured and analysed on a local level, mainly by aging analyses. Credit insurancecovers are taken into account when establishing the allowance for impairment. The aging of the trade receivables and (theallocation of the) allowance for impairment at the reporting date were as follows:(€ x 1,000) 2010 2009GROSS IMPAIRMENT GROSS IMPAIRMENTNot past due 190,524 833 163,473 444Past due 0-30 days 27,572 831 29,685 195Past due 31-90 days 12,249 987 14,553 746Past due 91-180 days 6,471 641 7,327 1,171Past due 180-360 days 5,537 1,774 4,361 1,329More than 1 year 9,959 7,562 8,682 7,349Total trade receivables 252,312 12,628 228,081 11,234The share of overdue trade receivables decreased compared to last year. At balance sheet date 24% of trade receivableswas overdue against 28% last year. Impairment charges for doubtful debts amounted to € 3.3 million which is comparable tolast year.The movement in the allowance for impairment in respect of trade receivables during the year was as follows:(€ x 1,000) 2010 2009Balance at 1 January 11,234 9,604Acquisitions/divestments – 14Charged to income statement 4,333 4,228Released to income statement (1,020) (797)Utilisation (2,095) (1,715)Effect of movements in exchange rates 176 (100)Book value at 31 December 12,628 11,234INVESTMENTSThe Group limits its exposure to credit risk by only investing in liquid securities. Transactions involving derivative fi nancialinstruments are with counterparties that have high credit ratings (minimum at investment grade) and with whom we have asigned netting agreement. Given their high credit ratings, management does not expect any counterparty to fail to meet itsobligations.Liquidity risksLiquidity risk is the risk that the Group will not be able to meet its fi nancial obligations as they fall due.Cash fl ow generation and suffi cient access to capital markets is secured to fi nance long term growth, capital expenditures,seasonal working capital requirements, expected operational expenses and to service fi nancial obligations. Wavin’s mainsource of fi nancing is a € 500 million Syndicated Loan Facility that expires in October 2011 and a Forward Start Facility of€ 475 million starting in October 2011 and expiring in April 2013. The facilities consist of a term loan and revolving facilities.In November 2010 the interest margin of the Syndicated Loan Facility and Forward Start Facility was amended. Theamendment was realised with full consent of the syndicate of lending banks. The margins of both facilities were renegotiatedresulting in an annual saving of € 3.5 million starting on 24 November 2010. The € 500 million Syndicated Loan Facility andthe € 475 million Forward Start Facility remain in place. With the current fi nancing facilities in place, Wavin is adequatlyfunded, even if trading conditions remain challenging, and will have suffi cient liquidity when markets recover further. Wavinexpects even in continuing challenging trading conditions to be compliant with the covenants. In case Wavin cannot meet thetarget ratios defi ned for the leverage ratio and interest coverage ratio the facility might, if so requested by the majority of thelenders, be cancelled at once and borrowings under the facility may become due and payable immediately. The covenantcalculations per year end and per half year are assessed by our external auditor. Per year end the external auditor used theaudited fi gures as basis for their assessment.

Wavin Annual Report 2010 | page 95In addition to the Syndicated Loan Facility and Forward Start Facility, Wavin has several committed and uncommitted facilitiesavailable.Financing strategies are regularly reviewed to secure suffi cient access to capital markets and optimise costs of borrowings.The Group uses a system of cash fl ow forecasting per operating company in assessing cash fl ow requirements. A notionalcash pool system for fi nancing and netting daily operational activities of local companies is in place to secure effective andeffi cient allocation of fi nancial resources.The exposure of the fi nancial liabilities is limited by the availability of the fi nancial assets of the Group for an amount of€ 55.7 million (2009: € 58.6 million) in cash and cash equivalents.Currency risksWavin operates in different countries and uses the Euro as its reporting currency. Revenue and expenses are translated toEuro at the average exchange rate for the applicable period for inclusion in the consolidated fi nancial statements.The business generates substantial revenues, expenses and liabilities in jurisdictions outside the Euro zone. In 2010,approximately 59% (2009: 52%) of revenue was denominated in currencies other than the Euro. Consequently the translationrisk of non-Euro results to the Euro is the most signifi cant currency risk. Currency fl uctuations of especially the PoundSterling, the Polish Zloty, the Hungarian Forint, the Turkish Lira, the Norwegian and Swedish Krone, the Czech Koruna andthe US Dollar could materially affect the consolidated Group results. Translation risks of non-Euro equity positions in theGroup are not hedged but the translation risk is minimised to the extent possible by using natural hedges. The translation riskof strategically held minority participations is not hedged. In respect of other minority participations and other monetaryassets and liabilities held in currencies other than the Euro, the Group ensures that the net exposure is kept to an acceptablelevel, by buying or selling foreign currencies at forward or spot rates where necessary to address short term imbalances.Wavin companies are exposed to foreign currency transactional risks on revenues, expenses and borrowings that aredenominated in a currency other than the respective functional currencies of Wavin entities. The purpose of Wavin’s foreigncurrency hedging activities is to protect the Company from the short term risk that net cash fl ows resulting from tradingtransactions are adversely affected by changes in exchange rates. Wavin has defi ned clear treasury policies regarding foreignexchange exposures. It is policy that material imbalances are identifi ed and may be hedged in order to minimise potentialvolatility in results which could arise as a result of currency fl uctuations.The Group uses forward exchange contracts and currency swaps to hedge forecasted cash fl ow transactions. In 2010forward exchange contracts and currency swaps were used to hedge a.o. cash fl ows in Pound Sterling, Polish Zloty, DanishKrone, Norwegian Krone, Swedish Krone, Czech Koruna, Turkish Lira and US Dollars. Over the longer term permanentchanges in foreign exchange rates might have an impact on profi t. The appreciation of most currencies against the Euroresulted in a transactional foreign exchange loss of € 1.8 million (2009: € 0.6 million profi t).

Wavin Annual Report 2010 | page 96Exposure to currency riskThe Group’s exposure to foreign currency transaction risk per 31 December based on the notional amounts was:(€ x 1,000) 2010EUR GBP PLN DKK NOK CZK TRY USDOther non-current investments 432 – – – – – – –Trade and other receivables 23,377 1,414 123 (133) 25 (278) 2,034 8,643Cash and cash equivalents 9,156 376 (4) 482 275 117 – 2,898Bank loans (2,800) – – – – – – –Trade and other payables (53,705) 915 37 808 (38) (32) – (9,196)Bank overdrafts 5,863 (577) – – – – – (3,742)Total (17,677) 2,128 156 1,157 262 (193) 2,034 (1,397)(€ x 1,000) 2009EUR GBP PLN DKK NOK CZK TRY USDOther non-current investments 227 – – – – – – –Trade and other receivables 27,767 6,548 2,028 1,475 420 2,125 173 5,290Cash and cash equivalents 4,027 457 – – 4 – – 2,953Bank loans (7,447) – – – – – – –Trade and other payables (48,179) (1,978) (309) 457 12 103 – (9,673)Bank overdrafts (669) (5,005) (1,665) (1,057) – (1,727) – –Total (24,274) 22 54 875 436 501 173 (1,430)The principal exchange rates against the Euro used in preparing the balance sheet and the income statement are set out innote 3(c).The Company, amongst others, partly hedges the Euro exposure of non-Euro countries. Ultimo 2010 the Euro exposurehedged amounted to € 37.5 million (2009: € 21.0 million). This hedge is not included in the schedule above.Sensitivity analysisA strengthening or weakening of the Euro against the principal currencies at 31 December 2010 would have had an impacton equity and profi t or loss. Based on the foreign currency exposure ultimo year the impact of 5% strengthening of the localfunctional currencies against Euro and the other principle currencies would result in the amounts shown below, independentlydefi ned for each currency. This analysis assumes that all other variables, in particular interest rates, remain unchanged. Theanalysis is performed on the same basis for 2009.(€ x 1,000) 2010 2009PROFIT OR LOSS/EQUITYPROFIT OR LOSS/EQUITYEuro 884 1,214Pound Sterling (106) (1)Polish Zloty (8) (3)Danish Krone (58) (44)Norwegian Krone (13) (22)Czech Koruna 10 (25)Turkish Lira (102) (9)US Dollar 70 72A 5% weakening of the local functional currencies against Euro against the above currencies at 31 December would havehad the equal but opposite effect on the amounts shown above, on the basis that all other variables remain unchanged.The sensitivity analysis excludes loans in foreign currencies which are transferred in full to group companies for which therelated foreign currency of the loan is the functional currency of the group company concerned. The effect of the Euroexposure hedges in non-Euro countries is not included in the analyses above.

Wavin Annual Report 2010 | page 97Interest rate riskIt is Wavin’s policy to limit exposure to interest rate risks, to ensure fi nancing costs are limited and to maintain interestcoverage ratios in line with covenants. The Group’s Treasury Committee is responsible for managing interest rate risks withinthe framework specifi ed by the corporate fi nancing policy.The Group’s credit facility has an interest rate based on variable inter-bank offered rates. To limit the exposure to a risein interest rates, the Group has entered into interest rate swaps, which convert the variable rates into fi xed rates.At 31 December 2010, the Group had effective interest rate swaps outstanding with a total notional amount of € 259.8 million(2009: € 272.0 million) with remaining duration of 0.8 years and an average interest rate of 3.9% (2009: 1.8 years and 3.9%respectively). In addition, the Group has entered into forward starting interest rate swaps for the period October 2011 –October 2015 with a total notional amount of € 208.2 million and an average interest rate of 3.7%. In addition to theaforementioned interest rate swaps, the Group also had interest rate swaps outstanding per 31 December 2010 for which nohedge relation exists anymore. The fair value of these interest rate swaps per 31 December 2010 amounts to € 1.4 million(31 December 2009: € 2.7 million). As a result of the above mentioned, the Group’s sensitivity to interest rate movementsis limited. The fair value of the fi nancial instruments per 31 December 2010 amounts to a € 13.9 million liability (2009:€ 17.2 million liability), of which € 12.4 million relates to effective hedges.The average payable fi xed interest rate under the interest rate swaps of 3.9% excludes the margin payable under the facilityagreement. The applicable margin is based on the leverage ratio. The margin is restated on a quarterly basis, following thecovenant reporting to the banking syndicate. The average margin for 2010 was 3.3% (2009: 2.2%). As of November 24 2010the margin was reduced resulting in a maximum margin of 400 basis points and a minimum of 175 basis points (2009:maximum of 505 basis points and a minimum of 217 basis points).Debt profileAt the reporting date the interest rate profi le of the Group’s interest-bearing fi nancial instruments was:(€ x 1,000) FACE VALUE2010 2009Fixed rate instrumentsFinancial liabilities (259,780) (272,031)Total (259,780) (272,031)Variable rate instrumentsFinancial assets 55,748 58,626Financial liabilities (63,836) (37,456)Total (8,088) 21,170Fair value sensitivity analysis for fixed rate instrumentsThe Group does not account for any fi xed rate fi nancial assets and liabilities at fair value through profi t or loss, and the Groupdoes not designate derivates (interest rate swaps) as hedging instruments under a fair value hedge accounting model.Therefore a change in interest rates at the reporting date would in principle not affect profi t or loss. The instruments that havebecome ineffective due to the refi nancing in 2009 are revaluated through the income statement instead of equity, resulting ina gain per 31 December 2010 of € 1.3 million (2009: € 0.6 million gain).It is estimated that a change of 100 basis points in interest rates would have increased or decreased equity by € 7.2 million(2009: € 9.9 million) and net profi t by € 0.5 million (2009: € 3.8 million), due to changes in the fair value of interest rate swaps.Sensitivity analysis for variable rate instrumentsAs 85.4% of the Group’s debt has been hedged (2009: 87.9%) it is estimated that a general increase in interest rates of 1.0%would have only a limited effect on the Group’s profi t before tax.This analysis assumes that all other variables, in particular foreign currency rates, remain unchanged. The analysis for 2010 isperformed on the same basis as for 2009.

Wavin Annual Report 2010 | page 98Fair valuesThe fair value of assets and liabilities has been determined either by reference to the market value at the balance sheet dateor by discounting the relevant cash fl ows using current interest rates for similar instruments. For interest rate swaps themarket to market value is based on the last applicable fl oating rate of 2010. Receivables and payables with a remaining life ofless than one year are valued at the notional amount, which is deemed to refl ect the fair value. All non-current interest-bearingloans have variable interest rates. All non-current interest-bearing loans are valued at amortised cost.The fair value of fi nancial assets and liabilities per 31 December 2010 are equal to the carrying amounts shown in the balancesheet except for the Syndicated Loan Facility of which the fair value is € 11.8 million above the carrying amount, representingthe capitalised fee costs.5. Segment reportingIn October 2010 Wavin announced several organisational changes within the Wavin Group which will become fully effective asof 1 January 2011. One of these changes relates to the integration of four regions in the mature Western European marketsinto two regions to benefi t from scale and to realise synergies. The UK/Ireland and South West Europe (France) regions will becombined, as well as the Nordic and the North West Europe regions. In the emerging markets the Baltic countries (Lithuania,Estonia and Latvia) and Belarus will become part of the Central & Eastern Europe region instead of the Nordic region.The South East Europe region remains unchanged. The geographic segments are based on the location of the customers.For each of these segments the Group’s Management Board reviews internal management reports on a monthly basis.The adjusted geographic segmentation can be specifi ed as follows:• North West Europe (The Netherlands, Germany, Belgium, Denmark, Norway, Sweden, Finland);• South West Europe (UK (including clay activities of EuroCeramic), Ireland, France);• Central & Eastern Europe (Poland, Czechia, Russia, Slovakia, Ukraine, Lithuania, Estonia, Latvia, Belarus);• South East Europe (Italy, Turkey, Hungary, Romania, Serbia, Croatia, Bulgaria);• Overseas and Other (Wavin Overseas, Wavin T&I, Wavin Head Offi ce and several small companies).Performance is measured mainly on segment Ebitda (operating profi t before depreciation, amortisation and non-recurringitems), as included in the internal management reports. Ebitda is used to measure performance as management believes thatsuch information is the most relevant in evaluating the performance of certain segments relative to other entities that operatewithin the industry.Inter-segment pricing is determined at an arm’s length basis. Segment results, assets and liabilities include items directlyattributable to the region as well as those that can be allocated on a reasonable basis. Segment capital expenditure is thetotal cost incurred during the period to acquire property, plant & equipment, and intangible assets other than goodwill.

Wavin Annual Report 2010 | page 99The income statement and balance sheet segmentation of the revised regional segmentation is as follows:Income statement based on revised geographic segmentation(€ x 1,000) NOTE NORTH WESTEUROPESOUTH WESTEUROPECENTRAL &EASTERNEUROPESOUTH EASTEUROPEOVERSEASAND OTHERCONSOLIDATED2010Total external revenue 8 405,820 370,130 198,985 197,806 58,511 1,231,252Result from operating activities 11,654 5,471 17,217 2,464 1,137 37,943Non-recurring operational results 14 (1,468) (2,411) (213) (708) (1,580) (6,380)Recurring result from operating activities 13,122 7,882 17,430 3,172 2,717 44,323Depreciation and amortisation (recurring) 17, 18 17,563 17,847 11,339 5,807 7,209 59,765Ebitda 30,685 25,729 28,769 8,979 9,926 104,0882009Total external revenue 8 410,114 342,165 179,334 184,397 43,616 1,159,626Result from operating activities 10,748 (6,196) 15,737 5,652 6,954 32,895Non-recurring operational results 14 (3,665) (8,282) (1,058) (1,455) (181) (14,641)Recurring result from operating activities 14,413 2,086 16,795 7,107 7,135 47,536Depreciation and amortisation (recurring) 17, 18 18,883 20,028 11,623 5,417 6,894 62,845Ebitda 33,296 22,114 28,418 12,524 14,029 110,381Geographic segmentation balance sheet and other key figures(€ x 1,000) NOTE NORTH WESTEUROPESOUTH WESTEUROPECENTRAL &EASTERNEUROPESOUTH EASTEUROPEOVERSEAS ANDOTHER*ELIMINATION**CONSOLIDATED2010Segment assets 292,352 408,981 193,498 166,773 765,118 (486,900) 1,339,822Investment in associates 19 56 – – – 21,016 – 21,072Total assets 292,408 408,981 193,498 166,773 786,134 (486,900) 1,360,894Total liabilities 210,644 301,172 153,120 83,534 207,056 (173,578) 781,948Acquired through business combinations 7 – – 60 – – – 60Capital expenditure 17, 18 13,868 15,975 5,663 3,498 4,676 – 43,680Number of employees per year end (x 1) 12 1,772 1,941 1,328 768 280 – 6,0892009Segment assets 289,879 411,465 247,743 161,183 725,893 (540,359) 1,295,804Investment in associates 19 92 1 – 15 18,953 – 19,061Total assets 289,971 411,466 247,743 161,198 744,846 (540,359) 1,314,865Total liabilities 211,181 303,236 166,087 85,977 186,446 (196,679) 756,248Acquired through business combinations 7 – – – – 308 – 308Capital expenditure 17, 18 9,497 8,087 5,895 4,884 7,196 – 35,559Number of employees per year end (x 1) 12 1,830 1,994 1,362 806 274 – 6,266* The goodwill related to the acquisition of the shares Beheermaatschappij Wavin B.V. in 2005 is included in this segment. For the allocation of this goodwill to each region we refer to note 18.** Intercompany positions within the region have been eliminated. Amounts for elimination decreased due to the higher level of eliminations of intercompany positions within the regions, as aresult of the integration of four regions into two regions.

Wavin Annual Report 2010 | page 100For comparison reason we have included the segmentation based on the seven geographic segments which were applicableup to and including 2010:• North West Europe (The Netherlands, Germany, Belgium);• UK/Ireland (UK (including clay activities of EuroCeramic), Ireland);• South East Europe (Italy, Turkey, Hungary, Romania, Serbia, Croatia, Bulgaria);• Central and Eastern Europe (Poland, Czechia, Russia, Slovakia, Ukraine);• Nordic Europe (Denmark, Norway, Sweden, Finland, Lithuania, Estonia, Latvia, Belarus);• South West Europe (France, Portugal);• Overseas and Other (Wavin Overseas, Wavin T&I, Wavin Head Offi ce and several small companies).Performance is measured mainly on segment’s Ebitda (operating profi t before depreciation, amortisation and non-recurringitems), as included in the internal management reports.Geographic segmentation income statement(€ x 1,000) NOTE NORTH WESTEUROPEUK / IRELANDSOUTH EASTEUROPECENTRAL &EASTERNEUROPENORDICEUROPESOUTH WESTEUROPEOVERSEAS ANDOTHERCONSOLIDATED2010Total external revenue 8 255,220 239,835 197,806 181,984 167,601 130,295 58,511 1,231,252Result from operating activities 1,878 6,530 2,464 17,325 9,668 (1,059) 1,137 37,943Non-recurring operational results 14 (1,349) (1,206) (708) (231) (102) (1,204) (1,580) (6,380)Recurring result from operatingactivities 3,227 7,736 3,172 17,556 9,770 145 2,717 44,323Depreciation and amortisation(recurring) 17,18 11,575 12,739 5,807 10,641 6,686 5,108 7,209 59,765Ebitda 14,802 20,475 8,979 28,197 16,456 5,253 9,926 104,0882009Total external revenue 8 276,433 215,751 184,397 164,943 148,072 126,414 43,616 1,159,626Result from operating activities 7,262 (6,731) 5,652 16,751 2,472 535 6,954 32,895Non-recurring operational results 14 (3,034) (6,167) (1,455) (818) (871) (2,115) (181) (14,641)Recurring result from operatingactivities 10,296 (564) 7,107 17,569 3,343 2,650 7,135 47,536Depreciation and amortisation(recurring) 17,18 12,643 14,367 5,417 10,874 6,989 5,661 6,894 62,845Ebitda 22,939 13,803 12,524 28,443 10,332 8,311 14,029 110,381

Wavin Annual Report 2010 | page 101Geographic segmentation balance sheet and other key figures(€ x 1,000) NOTE NORTH WESTEUROPEUK/ IRELANDSOUTH EASTEUROPECENTRAL &EASTERNEUROPENORDICEUROPESOUTH WESTEUROPEOVERSEASAND OTHER*ELIMI-NATION**CONSOLI-DATED2010Segment assets 163,213 334,185 166,773 179,339 162,081 75,175 765,120 (506,064) 1,339,822Investment in associates 19 25 – – – 31 – 21,014 2 21,072Total assets 163,238 334,185 166,773 179,339 162,112 75,175 786,134 (506,062) 1,360,894Total liabilities 111,485 242,500 83,534 144,662 108,016 58,958 207,056 (174,263) 781,948Acquired through businesscombinations 7 – – – 60 – – – – 60Capital expenditure 17,18 9,764 12,059 3,498 5,113 4,654 3,916 4,676 – 43,680Number of employees per year end(x 1) 12 1,188 1,392 768 1,216 696 549 280 – 6,0892009Segment assets 171,835 319,624 161,183 169,547 151,085 92,298 725,893 (495,661) 1,295,804Investment in associates 19 60 1 15 – 32 – 18,953 – 19,061Total assets 171,895 319,625 161,198 169,547 151,117 92,298 744,846 (495,661) 1,314,865Total liabilities 115,262 229,049 85,977 142,503 104,070 74,557 186,446 (181,616) 756,248Acquired through businesscombinations 7 – – – – – – 308 – 308Capital expenditure 17,18 5,388 5,113 4,884 5,568 4,436 2,974 7,196 – 35,559Number of employees per year end(x 1) 12 1,228 1,404 806 1,244 720 590 274 – 6,266* The goodwill related to the acquisition of the shares of Beheermaatschappij Wavin B.V. in 2005 is included in this segment. For the allocation of this goodwill to each region we refer to note 18.** Intercompany positions within the region have been eliminated.Business segmentationThe Management Board also monitors the sales performance of the identifi ed business segments. The Group comprisesseven segments, which are divided in two specifi c sectors.Above Ground; This sector includes above ground plastic pipe and fi tting systems for surface heating and cooling, hot andcold tap water, soil and waste discharge and electrical conduit applications.Below Ground; This sector includes below ground pipe systems for rain and storm water management and foul waterdischarge as well as systems for cable ducting and water and gas distribution.

Wavin Annual Report 2010 | page 102(€ x 1,000) REVENUE2010 2009Hot & Cold 272,049 248,904Soil & Waste 159,820 149,752Other Building Systems 49,380 54,053Above Ground 481,249 452,709Foul Water Systems 372,804 348,971Water Management 142,115 132,988Cable Ducting 53,263 54,656Water & Gas 156,223 147,433Below Ground 724,405 684,048Unallocated 25,598 22,869Total revenue 1,231,252 1,159,626The unallocated revenue includes amongst others, the sale of raw materials and services rendered.6. Assets held-for-saleThe assets and liabilities per 31 December classifi ed as held-for-sale can be specifi ed as follows:(€ x 1,000) 2010 2009Property, plant & equipment 314 3,477Inventories – 350Total assets 314 3,827Employee benefi ts – 48Trade and other payables – 11Total liabilities – 59All assets classifi ed as held-for-sale per 31 December 2009 were sold in 2010 at a price above the total book value.The reported assets classifi ed as held-for-sale relate to production equipment which has been dismantled in 2010. It isexpected that this equipment will be sold in 2011 at a sales price above the current book value.7. Acquisitions of subsidiariesAcquisitionsIn October 2010 Wavin and Gebr. Ostendorf – OSMA zpracování plastu combined their sales activities for the Czech marketin a new established company. Wavin has a controlling 65% stake in this subsidiary; OSMA holds 35% of the shares.The contribution in cash by Wavin amounted to € 0.3 million. The acquired intangible assets with value of € 0.1 million wereaccounted for using the purchase method. With this subsidiary we realised additional sales of € 2.3 million and a loss of€ 0.1 million to the consolidated net result.In October 2010 the Group announced that it had entered into an agreement to acquire the PE Water business for belowground applications from KWH Sweden. In January 2011 the assets were actually transferred. As a consequence the resultsand balance sheet of the PE Water business for below ground applications from KWH Sweden were not included in thefi gures per 31 December 2010. As from January 2011 these fi gures will be consolidated (see also note 38).Fair value adjustments according to IFRS 3In 2010 no adjustments to the provisional accounting in 2009 were made.

Wavin Annual Report 2010 | page 1038. Revenue(€ x 1,000) 2010 2009Sales of goods 1,219,987 1,148,137Other revenues 11,265 11,489Total revenue 1,231,252 1,159,626Other revenues are mainly related to services rendered, the rental of properties and royalties for our products andtechnologies.Of the total revenue € 116.1 million was realised in the Netherlands and € 1.1 billion was realised outside the Netherlands(2009: € 132.4 million respectively € 1.0 billion).9. Other operating income(€ x 1,000) 2010 2009Gain on sale of land and buildings 1,194 1,968Gain on disposal of other tangible fi xed assets 276 447Other rental and service income 492 296Other income 2,595 3,235Total 4,557 5,946Gain on sale of land and buildings of € 1.2 million relates to the profi t realised with the sale of redundant buildings andinstallations in Belgium, France and the Netherlands which mainly were classifi ed as held-for-sale per 31 December 2009.10. Other operating expenses(€ x 1,000) 2010 2009Loss on disposal of other tangible fi xed assets (815) (197)Amortisation of assets acquired through business combinations (6,250) (6,762)Taxes, other than income tax (2,702) (3,309)Impairment goodwill (46) –Other expenses (2,390) (1,703)Total (12,203) (11,971)The loss on disposed property, plant and equipment is related to the closure of a production facility in the UK as part of therestructuring measures. Expenses related to the amortisation of assets acquired through business combinations representthe amortisation of acquired intangible assets such as order portfolios, customer contracts, customer relations anddistribution networks. For further details see note 18 of the Group Financial Statements. Taxes, other than income tax,amongst others relate to real estate tax.

Wavin Annual Report 2010 | page 10411. Personnel expenses(€ x 1,000) NOTE 2010 2009Salaries and wages (210,128) (204,853)Social security contributions (34,478) (33,697)Contributions to defi ned contribution plans (2,992) (4,351)Expenses related to defi ned benefi t plans 27 (12,631) (9,225)Other personnel expenses (9,861) (10,136)Total recurring personnel expenses (270,090) (262,262)Expenses share appreciation rights / LTIP 28 (182) (174)Total (270,272) (262,436)Following restructuring measures taken in recent years further restructuring measures were implemented in some countrieswhere market conditions deteriorated further in 2010. The increase of personnel expenses mainly relates to wage increasesespecially in emerging countries.Total average full time equivalents decreased in 2010 by 107 to 6,602 (see note 12).12. Personnel employedThe total average full time equivalent (FTE) of employees and the number of employees are as follows:2010 2009Average full time equivalents 6,602 6,709Number of employees at 31 December 6,089 6,266Of the average number of FTEs, 816 are based in the Netherlands and 5,786 FTEs are based outside the Netherlands(2009: 865 FTEs and 5,844 FTEs respectively).Due to deteriorating market circumstances in some Western European countries additional restructuring programs resulted instaff reductions. This decrease is partly offset by the increase of temporary staff due to increasing activities in other countries.13. Finance income and expenseRecognised in profit or loss(€ x 1,000) 2010 2009Interest income on bank deposits 395 1,647Fair value revaluation gains 1,330 678Total finance income 1,725 2,325Transfer hedge reserve to profi t or loss – (3,272)Interest expense (34,843) (34,387)Exchange rate differences (1,021) (33)Total finance expense (35,864) (37,692)Total net finance costs recognised in profit or loss (34,139) (35,367)Total fi nance costs were slightly below last year. Interest expenses were in line with last year as the effect of a lower averagedebt was partly offset by increased interest margin under our Syndicated Loan Facility. In addition the 2009 interest expenseswere negatively affected by one-off impairment charges of the capitalized fees for an amount of € 0.4 million due to thereduction of the credit facility and the transfer of a part of the interest rate hedge reserve as it has became ineffective.

Wavin Annual Report 2010 | page 105In November 2010 the interest margin on the syndicated loan facilities were reduced. The amendment was realised with fullconsent of the syndicate of lending banks. The € 500 million Syndicated Loan Facility (maturing October 2011) and the€ 475 million Forward Start Facility (starting October 2011, maturing April 2013) remained in place. The benefi ts of the revisedmargin have become effective as of 24 November 2010.As a result of the recapitalisation in 2009 the level of outstanding interest instruments exceeded the drawings under theAmended Credit Facility and have become ineffective. Per 31 December 2010 the fair value of the outstanding ineffectivehedge instruments was € 1.4 million (31 December 2009: € 2.7 million). The change in fair value of these instruments isrecorded through the income statement instead of equity, resulting in a profi t of € 1.3 million (2009: € 0.6 million).Recognised in other comprehensive income(€ x 1,000) 2010 2009Fair value changes fi nancial instruments 2,014 (5,224)Transfer hedge reserve to profi t or loss – 3,272Income tax on fi nance income (expense) recognised in othercomprehensive income (485) 495Total net finance costs recognised in comprehensive income 1,529 1,45714. Non-recurring income and expense(€ x 1,000) NOTE 2010 2009Restructuring costs 29 (6,814) (18,078)Profi t on sale of property, plant & equipment 9 860 2,020Curtailment gain 27 – 1,378Acquisition costs (221) –Share-based payments 28 – (51)Other (205) 90Total non-recurring results from operating activities (6,380) (14,641)Tax rate adjustments 15 1,244 16Non-recurring tax benefi ts 3,372 4,700Total non-recurring income tax 4,616 4,716Total (1,764) (9,925)Restructuring costs in 2010 relate to announced restructurings in 2010 in the Netherlands, Germany, Belgium and Francenext to some smaller programmes throughout the Group.The profi t on sale of property, plant & equipment includes the profi t on the sale of redundant buildings and installations inBelgium, France and the Netherlands which were classifi ed as held-for-sale per 31 December 2009 (see note 9) and the losson disposed property, plant and equipment due to the closure of a production facility in the UK following the restructuringmeasures.The acquisition costs represent expenses made for the acquisition of KWH in Sweden (see note 38) and the establishment ofthe sales organisation with Gebr. Ostendorf – OSMA zpracováni plastu (see note 7).Non-recurring tax benefi ts include the tax effect on non-recurring income and expense, liquidation losses related to theclosure of foreign operations and the effect on the deferred tax position of the reduction of the corporate income tax rate inthe Netherlands from 25.5% to 25.0% as per January 2011 (see note 15).

Wavin Annual Report 2010 | page 10615. Income tax expenseRecognised in the income statement(€ x 1,000) 2010 2009Current year (5,451) (5,191)Utilisation of / (addition to) not capitalised compensable losses (794) 522Adjustments for prior years 1,756 322Current tax income (expense) (4,489) (4,347)Origination and reversal of temporary differences 853 2,004Changes in tax rate 1,244 16Benefi t from tax losses recognised 3,492 3,545Deferred tax income (expense) 5,589 5,565Total income tax recognised in the income statement 1,100 1,218Total income tax recognised in the income statement was positively affected by signifi cant one-off tax benefi ts for a totalamount of € 2.9 million, including liquidation losses related to the closure of foreign operations. In addition the retroactiveapplication of a fi scal facility in the Netherlands for tax reduction to stimulate R&D activities for the years 2007-2009 had apositive effect on the income tax recognised. Further an addition to the tax provision for identifi ed tax exposures in the Groupwas included. Finally the reduction of the corporate income tax rate in the Netherlands from 25.5% to 25% as per January2011 resulted in a release of the deferred tax liabilities of € 1.1 million.In addition losses incurred in some emerging markets for which no tax recovery was taken into account were partlycompensated by the utilisation of some non-capitalised tax losses carried forward.Recognised in other comprehensive income(€ x 1,000) 2010 2009*BEFORE TAXTAX (EXPENSE)BENEFITNET OF TAX BEFORE TAX TAX (EXPENSE)BENEFITNET OF TAXExchange differences on translating foreign operations 12,231 – 12,231 9,532 – 9,532Fair value changes fi nancial instruments 2,014 (485) 1,529 (5,224) 1,329 (3,895)Transfer hedge reserve to profi t or loss – – – 3,272 (834) 2,438Total 14,245 (485) 13,760 7,580 495 8,075* Presentation adjusted for comparison reasons.

Wavin Annual Report 2010 | page 107Reconciliation of effective tax rate2010 2009% € × 1,000 % € × 1,000Profi t before tax 6,000 601Share of profi t of associates (2,196) (3,073)Adjusted profit before tax 3,804 (2,472)Income tax using the Dutch tax rate 25.5% (970) 25.5% 630Effect of taxes in foreign jurisdictions (8.6%) 326 14.6% 362Non-taxable income / (non-deductibleexpenses) (16.2%) 617 (56.4%) (1,393)Tax rate adjustments (32.7%) 1,244 0.6% 16Utilisation of / (addition to) not capitalisedcompensable losses 20.9% (794) 21.1% 522Recognition of previously not recognised taxlosses (2.9%) 112 (0.8%) (20)Other effects (14.9%) 565 44.5% 1,101Total (28.9%) 1,100 49.3% 1,218Other effects in 2010 comprise amongst others the retroactive application of a fi scal facility in the Netherlands for taxreduction to stimulate R&D activities for the years 2007-2009 and liquidation losses related to the closure of foreignoperations. Further an addition to the tax provision for identifi ed tax exposures in the Group is included in the other effectsas well as other income related taxes in France, Italy and Hungary.16. Earnings per shareBasic earnings per shareDue to a reverse stock split of 8 ordinary shares with a nominal value of € 0.05 each into 1 ordinary share with a nominalvalue of € 0.40 the number of shares decreased from 406,257,050 to 50,782,132.The basic earnings per share and diluted earnings per share are based on the profi t attributable to ordinary shareholdersof € 5.8 million (2009: € 0.2 million) and the average number of outstanding shares in 2010 of 50,690,035 (2009 on acomparable basis: 36,299,484) respectively the diluted average number of outstanding shares in 2010 of 50,815,227(2009 on a comparable basis: 36,324,005). The number of ordinary shares outstanding per 31 December 2010 is50,668,360 (2009 on a comparable basis: 50,711,388).The earnings per share are as follows:(€ x 1, unless stated otherwise) 2010 2009Net profi t attributable to ordinary shareholders (€ x 1,000) 5,825 187Recurring net profi t attributable to ordinary shareholders (€ x 1,000) 7,564 10,109Basic earnings per share (weighted average) 0.11 0.00Diluted earnings per share (weighted average) 0.11 0.00Basic recurring earnings per share (weighted average) 0.15 0.02Diluted recurring earnings per share (weighted average) 0.15 0.02Basic earnings per share (year end) 0.11 0.00Diluted earnings per share (year end) 0.11 0.00Basic recurring earnings per share (year end) 0.15 0.02Diluted recurring earnings per share (year end) 0.15 0.02

Wavin Annual Report 2010 | page 108Outstanding number of sharesThe change in outstanding number of shares can be specifi ed as follows:(shares × 1) 2010 2009Issued ordinary shares at 1 January 406,257,050 80,769,090Treasury shares at 1 January (565,950) (375,140)Outstanding ordinary shares at 1 January 405,691,100 80,393,950Effect of paid stock dividend — 482,320Effect of shares issued 250,815 375,140Effect of shares purchased — (565,950)Effect of rights issue — 325,005,640Shares issued to facilitate reverse stock split 6 —Outstanding ordinary shares before reverse stock split 405,941,921Treasury shares before reverse stock split 315,135Issued ordinary shares before reverse stock split 406,257,056Effect of reverse stock split (355,474,924)Issued ordinary shares after reverse stock split 50,782,132Treasury shares after stock split (39,392)Outstanding ordinary shares after reverse stock split 50,742,740Effect of shares issued as part of LTIP, reverse stock split 620Effect of shares purchased (75,000)Outstanding ordinary shares at period end 50,668,360 405,691,100Treasury shares at 31 December 113,772 565,950Issued shares at 31 December 50,782,132 406,257,050The effect of the reverse stock split on the comparative fi gures is as follows:(shares × 1) 2010 2009Reported outstanding ordinary shares at reporting date 50,668,360 405,691,100Effect of reverse stock split on comparative fi gures - (354,979,712)Outstanding ordinary shares at reporting date 50,668,360 50,711,388Reported treasury shares at reporting date 113,772 565,950Effect of reverse stock split on comparative fi gures - (495,206)Treasury shares at reporting date 113,772 70,744Reported issued ordinary shares at reporting date 50,782,132 406,257,050Effect of reverse stock split on comparative fi gures - (355,474,918)Issued ordinary shares at period end 50,782,132 50,782,132Outstanding ordinary shares at reporting date (diluted) 50,813,405 50,746,624Issued ordinary shares at reporting date (diluted) 50,927,177 50,817,368

Wavin Annual Report 2010 | page 109Weighted average number of shares(shares × 1) 2010 2009*Weighted average number of outstanding ordinary sharesat period end 50,690,035 36,299,484Weighted average number of outstanding ordinary sharesat period end (diluted) 50,815,227 36,324,005* The 2009 weighted average number of outstanding shares was effected by the issuance of shares in July 2009.The dilution of ordinary shares of 125,192 shares (2009: 24,521 shares) relates to the granted matchingshares and performance options as part of the Long Term Incentive Plan (see note 28). As the granted optionsfor 2008 and 2009 are not expected to meet the vesting conditions no dilution is taken into account withrespect to these options.17. Property, plant & equipment(€ x 1,000) NOTE LAND ANDBUILDINGSMACHINERYANDEQUIPMENTOTHERASSETSUNDERCONSTRUCTIONTOTALCostBalance at 1 January 2009 275,628 681,575 75,421 23,251 1,055,875Acquisitions through business combinations 7 47 – 26 – 73Investments 5,292 33,017 2,807 (12,185) 28,931Transfer to assets classifi ed as held-for-sale 6 (3,480) (5,198) (1,004) – (9,682)Disposals and divestments (2,175) (6,738) (3,604) – (12,517)Effect of movements in exchange rates 4,586 15,339 552 (227) 20,250Balance at 31 December 2009 279,898 717,995 74,198 10,839 1,082,930Balance at 1 January 2010 279,898 717,995 74,198 10,839 1,082,930Investments 3,714 22,021 1,870 8,964 36,569Transfer to assets classifi ed as held-for-sale 6 509 18 205 – 732Disposals and divestments (1,785) (11,185) (2,545) – (15,515)Effect of movements in exchange rates 4,136 11,812 752 210 16,910Balance at 31 December 2010 286,472 740,661 74,480 20,013 1,121,626DepreciationBalance at 1 January 2009 (118,954) (506,176) (63,757) – (688,887)Depreciation charge for the year (8,804) (36,643) (4,651) – (50,098)Transfer to assets classifi ed as held-for-sale 6 2,734 4,326 977 – 8,037Disposals and divestments 1,721 6,446 3,603 – 11,770Effect of movements in exchange rates (1,861) (11,541) (567) – (13,969)Balance at 31 December 2009 (125,164) (543,588) (64,395) – (733,147)Balance at 1 January 2010 (125,164) (543,588) (64,395) – (733,147)Depreciation charge for the year (8,868) (34,447) (3,825) – (47,140)Transfer to assets classifi ed as held-for-sale 6 (458) (48) (196) – (702)Disposals and divestments 1,145 10,326 2,511 – 13,982Effect of movements in exchange rates (1,340) (8,369) (643) – (10,352)Balance at 31 December 2010 (134,685) (576,126) (66,548) – (777,359)Carrying amountsAt 1 January 2009 156,674 175,399 11,664 23,251 366,988At 31 December 2009 154,734 174,407 9,803 10,839 349,783At 1 January 2010 154,734 174,407 9,803 10,839 349,783At 31 December 2010 151,787 164,535 7,932 20,013 344,267

Wavin Annual Report 2010 | page 110Depreciation chargeThe depreciation charge is recognised in the following line items in the income statement:(€ x 1,000) 2010 2009Cost of sales (37,476) (39,350)Research & development expenses (211) (249)Administrative expenses (9,379) (10,425)Other operating expenses (74) (74)Total depreciation (47,140) (50,098)Recurring (47,034) (49,994)Non-recurring (106) (104)Leased plant and machineryThe Group has no material fi nancial lease agreements.SecurityAt 31 December 2010 properties with a carrying amount of € 30.9 million (2009: € 33.5 million) were subject to a registereddebenture to secure bank loans (see note 26).Assets under constructionAssets under construction of € 20.0 million (2009: € 10.8 million) are mainly related to investments in production equipmentand installations. Increase of the level of assets in progress is due to the start up of some large investment projects in thesecond half of the year.Capitalised borrowing costsLike in 2009 no borrowing costs were capitalised as the assets under construction per 31 December 2010 and investmentsin 2010 did not classify as qualifying assets.

Wavin Annual Report 2010 | page 11118. Intangible assets(€ x 1,000) NOTE GOODWILL BRAND NAMES CUSTOMERRELATIONSAND OTHERIFRS 3 ASSETSOTHERINTANGIBLEASSETSTOTALCostBalance at 1 January 2009 154,024 215,076 118,134 67,056 554,290Acquisitions through business combinations 7 46 – 181 8 235Additions – – – 2,639 2,639Internally developed assets – – – 3,989 3,989Disposals and divestments – – – (1,546) (1,546)Adjustment goodwill (1,406) – – – (1,406)Effect of movements in exchange rates 3,453 5,560 2,978 324 12,315Balance at 31 December 2009 156,117 220,636 121,293 72,470 570,516Balance at 1 January 2010 156,117 220,636 121,293 72,470 570,516Acquisitions through business combinations 7 – – 60 – 60Additions – – – 3,173 3,173Internally developed assets – – – 3,938 3,938Disposals and divestments – – (696) (323) (1,019)Effect of movements in exchange rates 3,677 3,446 1,718 399 9,240Balance at 31 December 2010 159,794 224,082 122,375 79,657 585,908AmortisationBalance at 1 January 2009 (4,298) – (28,939) (40,313) (73,550)Amortisation charge for the year – – (6,758) (6,093) (12,851)Disposals and divestments – – – 1,546 1,546Effect of movements in exchange rates (116) – (239) (145) (500)Balance at 31 December 2009 (4,414) – (35,936) (45,005) (85,355)Balance at 1 January 2010 (4,414) – (35,936) (45,005) (85,355)Amortisation charge for the year – – (6,298) (6,542) (12,840)Impairment goodwill (46) – – – (46)Disposals and divestments – – 696 323 1,019Effect of movements in exchange rates (76) – (196) (285) (557)Balance at 31 December 2010 (4,536) – (41,734) (51,509) (97,779)Carrying amountsAt 1 January 2009 149,726 215,076 89,195 26,743 480,740At 31 December 2009 151,703 220,636 85,357 27,465 485,161At 1 January 2010 151,703 220,636 85,357 27,465 485,161At 31 December 2010 155,258 224,082 80,641 28,148 488,129Acquisitions through business combinationsAcquisitions through business combinations in 2010 refl ect the established sales organisation in the Czech Republic withGebr. Ostendorf – OSMA zpracování plastu (see note 7). The 2009 fi gure refl ects the acquisition of Aquatecnic Sistemas S.A.in Spain.Impairment testingIn assessing whether non-current assets including goodwill and brand names have to be impaired, the carrying amount ofeach cash generating unit is compared to the recoverable amount of its cash generating unit. The recoverable amount is thehigher of value in use and fair value less costs to sell. The Group estimates value in use using a discounted cash fl ow model.The operating plan for the coming year is the main source of information for the determination of the value in use. In ourprojections, including forecasts of sales volumes and revenues and assumptions regarding developments in raw materialprices, costs and capital expenditure, we assume that the decrease of sales and results that we have seen in 2008 and 2009are not structural and that the recovery realised in 2010 will continue in 2011 and further. In our forecasts, we assume that inthe years following the recession sales and results will increase to the pre-recession level in a period of seven years.

Wavin Annual Report 2010 | page 112The increase is supported by expected market recovery and the impact of certain cost reduction programmes that have beenimplemented in recent years.We have extended our projections beyond fi ve years as we expect further (modest) growth in the years just after the recovery.Beyond the projected period, results are extrapolated using an assumed growth rate that does not exceed 1% in maturemarkets and 2% in the emerging markets. Projected cash fl ows are discounted using a specifi c discount rate per cashgenerating unit (CGU), taking country risk premiums into account. The pre-tax discount rates used ranged from 8.8% to11.9%. The average pre-tax discount rate for the Group was 9.5% (2009: 10.1%). The discount rate decreased compared tolast year as a result of a reduced rate for risk-free debt.We have performed a sensitivity analysis on the base case assumptions. We have concluded that the outcome of thesensitivity analysis of an adverse change in key assumptions (50% lower growth rate or 200 basis points lower cost coveringor a 200 basis points higher discount rate) will not lead to a materially different outcome of the impairment test. Because therecoverable amount of non-current assets including goodwill and brand names was determined to be higher than the carryingamount, no impairment loss was recognised.Amortisation chargeIntangible assets not being goodwill and brand names are amortised over the estimated economic lifetime. If an impairmentindicator exists, an impairment test is performed. In cases where the book value of an asset exceeds the recoverable amountan impairment charge is recognised in the income statement. The amortisation charge is recognised in the following line itemsin the income statement:(€ x 1,000) 2010 2009Cost of sales (175) (216)Research & development expenses (1,524) (1,148)Administrative expenses (4,937) (4,725)Other operating expenses (6,250) (6,762)Total (12,886) (12,851)Recurring (12,731) (12,851)Non-recurring (155) –

Wavin Annual Report 2010 | page 113GoodwillThe carrying amount of goodwill allocated to each CGU is as follows:(€ x 1,000) 2010 2009North West Europe 20,433 20,433UK/Ireland 37,261 36,448South East Europe 12,668 12,729Central & Eastern Europe 52,776 50,310Nordic Europe 24,315 23,987South West Europe 4,861 4,861Overseas and Other 2,944 2,935Total 155,258 151,703As a result of exchange rate differences especially of the Pound Sterling and Polish Zloty the carrying amount of goodwillincreased by € 3.5 million.Brand namesThe carrying amount of brand names can be specifi ed as follows:(€ x 1,000) BRAND NAME 2010 2009UK/Ireland Hep 2O 60,146 58,293UK/Ireland Warmafl oor 598 580South East Europe Chemidro 3,000 3,000South East Europe Pilsa 2,658 2,553Wavin Group Wavin 157,680 156,210Total 224,082 220,636As a result of exchange rate differences especially of the Pound Sterling the carrying amount of brand names increased by€ 3.4 million.The carrying amount of brand names can be allocated as follows to each CGU:(€ x 1,000) 2010 2009North West Europe 36,350 36,350UK/Ireland 90,064 87,975South East Europe 21,528 21,515Central & Eastern Europe 24,161 23,158Nordic Europe 26,760 26,418South West Europe 21,510 21,510Overseas and Other 3,709 3,710Total 224,082 220,636Customer relations and other assets from business combinationsThe carrying amount of other assets from business combinations represents the recognised assets consisting mainly of orderportfolio and customer contracts which meet the conditions for recognition under IFRS 3. In case of a triggering event animpairment test is performed by estimating the recoverable amount based on its value in use.Other intangible assetsDevelopment costsThe carrying amount of development costs represents the capitalised expenses related to new internally developed productsand production processes. In case of a triggering event an impairment test is performed by estimating the recoverableamount based on its value in use.

Wavin Annual Report 2010 | page 114The additions in development costs amount to € 2.9 million including an amount of € 0.7 million (2009: € 0.3 million) ofcapitalised borrowing costs during the period ended 31 December 2010 using an average interest rate of 7.1% (2009: 6.2%).SoftwareThe carrying amount of software represents the capitalised expenses related to new (internally developed) software solutionsand related implementation expenses. The additions in software for an amount of € 4.2 million (2009: € 3.3 million) are mainlyrelated to the further roll-out of the Group-wide IT platform. At 31 December 2010 no borrowing costs were capitalised asthe additions did not classify as a qualifying asset.OtherIn addition to development costs and software the carrying amount of other intangible assets includes capitalised expensesrelated to licenses, trademarks, patents etc.19. Investments in associatesThe investment in associates mainly relates to our 40% (2009: 40%) shareholding in GF Wavin AG (Switzerland). The (100%)key fi gures of GF Wavin AG are:(€ x 1,000) ASSETS LIABILITIES EQUITY REVENUE PROFIT/LOSS2010GF Wavin AG 84,836 35,612 49,224 74,730 5,5232009GF Wavin AG 70,671 26,914 43,757 69,886 8,264The increase in assets, equity and liabilities is for a signifi cant part the result of changes in exchange rates between the SwissFranc and the Euro.20. Other financial (non-current and current) assets(€ x 1,000) 2010 2009Non-current investmentsGuaranteed deposit 262 414Financial instruments 177 17Other non-current investments 445 355Total non-current investments 884 786Total current investments – –The Group’s exposure to credit, currency and interest rate risks related to other investments is disclosed in note 4.

Wavin Annual Report 2010 | page 11521. Deferred tax assets and liabilitiesDeferred tax assets and deferred tax liabilities are attributable to:(€ x 1,000) 2010 2009ASSETS LIABILITIES ASSETS LIABILITIESIntangible assets 86 81,232 121 82,078Property, plant & equipment 523 31,392 563 30,333Financial assets 1 1,240 2 1,450Inventories 1,032 1,079 969 1,283Other current assets 1,610 351 1,047 104Tax losses carried forward 11,873 – 9,688 –Provision for employee benefi ts 2,131 16 2,224 57Other provisions 1,269 – 1,181 –Interest-bearing loans and borrowings 209 202 156 289Other liabilities 5,884 681 6,340 488Tax assets / liabilities 24,618 116,193 22,291 116,082Set off tax assets and liabilities (15,032) (15,032) (11,886) (11,886)Net tax assets / liabilities 9,586 101,161 10,405 104,196Unrecognised deferred tax assetsDeferred tax assets have not been recognised in respect of the following items:(€ x 1,000) 2010 2009Deductible temporary differences not capitalised 119 198Tax losses carried forward not capitalised 9,361 8,190Withholding taxes not capitalised 4,052 3,739Total unrecognised deferred tax assets 13,532 12,127The tax assets are not recognised because it is not probable that taxable profi t will be available against which the Group canutilise the benefi ts in the near future. The increase of tax losses not capitalised mainly relates to not capitalised losses carriedforward in some Eastern European Countries.There are no time restrictions on the utilisation of not capitalised taxes for an amount of € 9.2 million. Unrecognised taxes foran amount of € 0.2 million have a limited usage. Withholding taxes not capitalised relate to positions in the Netherlands whichwill not expire, but can only be compensated when all tax losses have been utilised besides meeting other specifi crequirements.

Wavin Annual Report 2010 | page 116Movement in temporary differences during the year(€ x 1,000) BALANCE AT1 JANUARY2010ACQUIREDTHROUGHBUSINESSCOMBINATIONSRECOGNISEDIN PROFITOR LOSSRECOGNISEDDIRECTLYIN EQUITYUSED FORPURPOSEEFFECT OFMOVEMENTSIN FOREIGNEXCHANGEBALANCE AT31 DECEMBERIntangible assets 81,957 – (2,150) 498 – 841 81,146Property, plant & equipment 29,770 – 683 106 – 310 30,869Financial assets 1,448 – (267) 36 – 22 1,239Inventories 314 – (240) – – (27) 47Other current assets (943) – (321) – – 5 (1,259)Tax losses carried forward (9,688) – (3,403) – 1,456 (238) (11,873)Provision for employee benefi ts (2,167) – 100 – – (48) (2,115)Other provisions (1,181) – (62) – – (26) (1,269)Interest-bearing loans and borrowings 133 – (136) – – (4) (7)Other liabilities (5,852) – 207 492 – (50) (5,203)Tax (assets) liabilities 93,791 – (5,589) 1,132 1,456 785 91,5752009Intangible assets 81,798 46 (1,032) – – 1,145 81,957Property, plant & equipment 32,575 15 (3,300) – – 480 29,770Financial assets (69) – 1,501 – – 16 1,448Inventories 366 – (40) – – (12) 314Other current assets (58) – (853) – – (32) (943)Tax losses carried forward (6,111) – (3,379) – 110 (308) (9,688)Provision for employee benefi ts (3,146) – 1,118 – – (139) (2,167)Other provisions (1,306) – 179 – – (54) (1,181)Interest-bearing loans and borrowings (143) – 277 – – (1) 133Other liabilities (5,363) – (36) (495) – 42 (5,852)Tax (assets) liabilities 98,543 61 (5,565) (495) 110 1,137 93,79122. Inventories(€ x 1,000) 2010 2009Raw materials and consumables 31,803 23,565Finished products and merchandise 130,625 113,551Other inventories 9,510 8,883Total 171,938 145,999Inventories stated at net realisable value 4,271 673At 31 December 2010 the provision for obsolete stocks amounts to € 16.0 million (2009: € 18.0 million). The addition to theprovision for obsolete stock amounted to € 0.3 million (2009: € 3.7 million), which was included in cost of sales. The provisionfor obsolete stock was used for purpose in the current year for the amount of € 2.7 million (2009: € 3.7 million). Higher rawmaterial prices compared to last year is the main reason for the increase of stock value. In addition stock levels were alignedto the increasing revenue level in some regions.The charge to the income statement is included in cost of sales. In 2010 raw materials, consumables and changes in fi nishedgoods recognised as cost of sales amounted to € 622.8 million (2009: € 555.6 million).

Wavin Annual Report 2010 | page 11723. Trade and other receivables(€ x 1,000) NOTE 2010 2009Trade receivables 4 239,684 216,847Amounts receivable from associates 51 128Other receivables and prepayments 26,759 20,651Total 266,494 237,626The increase of trade receivables is the result of higher revenue levels and an increased revenue share of emerging marketswhere in general longer payment terms are applicable. Trade receivables are shown net of an allowance for doubtful debts of€ 12.6 million (2009: € 11.2 million) arising from the possible non-payment by customers. The impairment loss recognised inthe current year was € 3.3 million (2009: € 3.4 million). For a specifi cation of the aging of the trade receivables and theallocation of the allowance for doubtful debts at the reporting date we refer to note 4.Other receivables increased mainly as a result of a higher outstanding VAT claim.24. Cash and cash equivalents(€ x 1,000) 2010 2009Bank balances 55,638 58,520Cash 110 106Total 55,748 58,626Due to the seasonality of the business most cash is generated towards the end of the year. This cash fl ow cannot completelybe used for the repayment of debt given the maturity of the drawings under the Syndicated Loan Facility and the fundingrequirements for the building up of working capital at the beginning of the following year. At 31 December the bank balanceswere freely available.25. EquityIn April 2010, the General Meeting of Shareholders approved an amendment of the Articles of Association, enabling a‘reverse stock split’ of 8 ordinary shares with a nominal value of € 0.05 each time into 1 ordinary share with a nominal value of€ 0.40. As a result of the reverse stock split the number of shares decreased from 406,257,050 to 50,782,132. For a detailedspecifi cation of the movement of the number of shares we refer to note 16.In the year under review 250,815 shares (adjusted for the reverse stock split 31,352 shares) were sold to the ManagementBoard and senior management as part of the Long Term Incentive Plan (see note 28).Per 31 December 2010 the Company holds 113,772 shares as treasury shares to cover current and future obligations underthe Long Term Incentive Plan of the Company.Changes in equity classifi ed as other comprehensive income include the changes in the hedging reserve which consist of theeffective portion of the cumulative net change in the fair value of cash fl ow hedging instruments related to hedgedtransactions that have not yet occurred.Cumulative translation reserves comprise all foreign exchange differences arising from the translation of the fi nancialstatements of foreign operations.Of the shareholders’ equity of € 570.8 million, an amount of € 8.1 million (2009: € 9.5 million) is not available for distributionsubject to relevant provisions of the Company’s Articles of Association, local accounting principles and legal requirements.For further details on Wavin N.V.’s shareholders’ equity we refer to note F of the Company Financial Statements and thestatement of changes in equity.

Wavin Annual Report 2010 | page 11826. Interest-bearing loans and borrowings(€ x 1,000) 2010 2009Non-current liabilitiesInterest-bearing loans and borrowings 295,357 285,917Total non-current liabilities 295,357 285,917Current liabilitiesDiscounted drafts 945 2,081Secured bank overdrafts – 243Unsecured bank overdrafts 15,553 7,145Total current liabilities 16,498 9,469The company is mainly fi nanced through a € 500 million Syndicated Loan Facility which will mature in October 2011.For the period October 2011 towards April 2013 a syndicated Forward Start Facility of € 475 million is in place.Non-current bank loans relate mainly to the Syndicated Loan Facility. The € 500 million Syndicated Loan Facility exists of aterm loan and a revolving part. The total facility is a bullet facility repayable in full in October 2011. Under the revolving facilityfunds are drawn and repaid in line with the short term fi nancing needs. Per 31 December 2010 the drawings under theSyndicated Loan Facility amount to € 304.0 million (31 December 2009: € 292.1 million) and are secured. The remaining partof the interest-bearing loans and borrowings per 31 December 2010 of € 3.1 million (per 31 December 2009: € 7.9 million)are unsecured.Drawings under the Syndicated Loan Facility are categorised as a non-current liability despite the duration of less than oneyear, since the Group intends and is able to roll over this facility at maturity date towards the Forward Start Facility of whichthe contractual expiration date is April 2013.The current portion of interest-bearing loans and borrowings consists of money market loans that the Group holds per31 December 2010.Terms and debt repayment schedule*NOTE 2010 2009EFFECTIVEINTEREST RATEYEAR OFMATURITYFACE VALUE(€ X 1,000)CARRYINGAMOUNT(€ X 1,000)EFFECTIVEINTEREST RATEYEAR OFMATURITYFACE VALUE(€ X 1,000)CARRYINGAMOUNT(€ X 1,000)Secured bank loansSyndicated Loan Facility** 5.91% 2013 304,041 292,280 7.54% 2013 292,121 278,020Unsecured bank loansOther unsecured loans 2.56% 2012 3,077 3,077 4.26% 2010 – 2012 7,897 7,897Unsecured bank overdrafts 5.43% 2011 15,553 15,553 5.12% 2010 7,145 7,145Discounted drafts 1.33% 2011 945 945 0.98% 2010 2,081 2,081Secured bank overdrafts – – 4.45% 2010 243 243Cash and cash equivalents 24 misc. 2011 (55,748) (55,748) misc. 2010 (58,626) (58,626)Total 267,868 256,107 250,861 236,760* For details on financial instruments we refer to note 4.** The effective interest rate of the Syndicated Loan Facility is excluding the effect of the ineffective interest rate swaps and commitment fee.In November 2010 the interest margin of the Syndicated Loan Facility and Forward Start Facility was amended.The amendment was reached with full consent of the syndicate of lending banks. The € 500 million Syndicated Loan Facility(maturing October 2011) and the € 475 million Forward Start Facility (starting October 2011, maturing April 2013) remain inplace. The effect of the existing interest rate swaps per 31 December 2010 is included in the calculation of the effectiveinterest rates.

Wavin Annual Report 2010 | page 119The key terms of the € 500 million Syndicated Loan Facility are:• Facility consisting of a € 250 million committed term loan facility and a € 250 million committed revolving credit facility;• For the term loan and revolving facility: repayment in one amount at fi nal maturity date of 16 October 2011 (remainingduration of 0.8 years);• Up to 24 November 2010 the interest rate was based on interbank offered rates like Euribor/Libor/Wibor/Pribor increasedwith a margin. This margin is based on a margin grid depending on the leverage ratio in which the maximum margin is505 basis points and the minimum is 217 basis points;• As of 24 November the margin was reduced resulting in a maximum margin of 400 basis points and a minimum of 175 basispoints. The margin is recalculated on a quarterly basis;• The commitment fee amounts to 40% of the applicable margin;• Comprehensive security package in place (see note 34);• Until 31 December 2011 cash dividend distribution is capped at € 0.01 per share;• The fi nancial covenants are tested on a quarterly basis.The key terms of the € 475 million Forward Start Facility are:• Facility start date is 16 October 2011;• Facility consisting of a € 237.5 million committed term loan facility and a € 237.5 million committed multi-currency revolvingcredit facility;• For the term loan and revolving facility: repayment in one amount at maturity date of 16 April 2013 (remaining duration of2.3 years);• The interest rate is based on interbank offered rates like Euribor/Libor/Wibor/Pribor increased with a margin. This margin isbased on a margin grid depending on the leverage ratio;• As of 24 November 2010 the margin was reduced resulting in a maximum margin of 400 basis points and a minimum of175 basis points. The margin is recalculated on a quarterly basis;• The commitment fee amounts to 35% of the applicable margin;• Comprehensive security package in place (see note 34);• The fi nancial covenants are tested on a quarterly basis.The aggregate tangible assets and the aggregate Ebitda of the identifi ed guarantors of the facility should represent at least70% of the consolidated tangible assets and consolidated Ebitda. The leverage ratio as defi ned in the Syndicated LoanFacility is defi ned as: Total net debt adjusted for the 10 quarters rolling cash out with respect to restructuring expensesdivided by result from operating activities before depreciation, amortisation, non-recurring restructuring expenses andnon-recurring gains or losses on the sale of fi xed assets, including income of associates and excluding profi t attributable tonon-controlling interest. The interest coverage ratio is defi ned as: result from operating activities before depreciation,amortisation, non-recurring restructuring expenses and non-recurring gains or losses on the sale of fi xed assets, includingincome of associates and excluding profi t attributable to non-controlling interest, divided by the net interest expenses,including all interest and other fi nancing charges in the nature of interest.The maximum leverage ratio and minimum interest coverage ratio under both facilities vary in line with the seasonality ofthe business for the different time periods and can be specifi ed as follows:TESTING DATE AMENDED CREDIT FACILITYLEVERAGERATIOINTERESTCOVERAGERATIOTESTING DATE FORWARD START FACILITYLEVERAGERATIOINTERESTCOVERAGERATIO2011 Q1 < 3.80 > 2.40 2011 Q4 < 3.20 > 2.802011 Q2 < 4.30 > 2.50 2012 Q1 < 3.30 > 3.002011 Q3 < 4.00 > 2.60 2012 Q2 < 3.70 > 3.202012 Q3 < 3.50 > 3.402012 Q4 < 2.75 > 3.702013 Q1 < 3.00 > 3.90

Wavin Annual Report 2010 | page 120Covenant ratios per 31 December can be specifi ed as follows:2010 2009ACTUAL REQUIRED ACTUAL REQUIREDLeverage ratio 2.27 < 3.70 1.96 < 3.80Interest coverage ratio 3.68 > 2.30 3.98 > 2.40Wavin is in compliance with the agreed ratios as defi ned in the Syndicated Loan Facility and expects to be compliant forthe upcoming year.The term loans are fully drawn and from the revolving facility € 53.0 million (2009: € 44.6 million) is drawn.Lenders have approved in addition to some specifi c indebtedness a threshold of € 130.0 million for permitted guarantees orindebtedness.In addition to the group facility, the Group has mostly uncommitted bilateral credit facilities with several banks for an amountof € 123.7 million (2009: € 68.1 million) of which € 19.2 million was drawn per 31 December 2010 (2009: € 17.4 million).In addition to the credit facilities Wavin has a € 25.0 million committed non-recourse factoring agreement in place of which€ 12.3 million was used as per 31 December 2010.The transaction costs related to the Syndicated Loan Facility of € 500 million and the Forward Start Facility of € 475 millionincluding the fee paid for the margin reduction as set out above are amortised using the effective interest method during theperiod of the borrowings. The transaction costs are mainly related to arrangement and underwriting fees, legal fees andconsultancy fees (due diligence, non-audit services, etc.).27. Employee benefits(€ x 1,000) 2010 2009Present value of unfunded obligations 12,602 12,033Present value of funded obligations 399,392 381,427Total present value of obligations 411,994 393,460Fair value of plan assets (417,803) (360,554)Unrecognised actuarial gains and (losses) 15,833 (19,409)Effect of asset ceiling 4,142 1,165Total employee benefits 14,166 14,662Non-current 13,647 12,048Current 519 2,614Unfunded obligationsUnfunded obligations consist of service awards and jubilee commitments qualifying as other long term benefi t plans,which are recognised in the Dutch, German, French, Irish, Polish, Italian and Turkish operating companies.Liability for defined benefit obligationsWavin has defi ned benefi t pension plans in Norway, Ireland, the UK, Germany, France, Italy and The Netherlands. All otherpension arrangements are defi ned contribution plans.In the UK and Ireland the pension liabilities are covered by company pension funds. The company is liable for the defi cits ofthese funds. Plan assets of these funds do not include investments in the Company. In 2010 the fi nal instalment was paid tosolve the defi cit in the pension fund of Wavin Ltd. which occurred as per September 2005. The related bank guarantee wascancelled.With the exception of EuroCeramic B.V. the pension liabilities of the Dutch Wavin entities are covered by a multi employerpension fund (Pensioenfonds OWASE). Although the Company is not liable for any defi cits in this fund the plan qualifi es as adefi ned benefi t plan as the Company might be entitled to a possible reward if the board of the pension fund would decide on

Wavin Annual Report 2010 | page 121a premium reduction or premium refund. However the participating companies of the pension fund are still in a process ofchanging the current defi ned benefi t plan into a collective defi ned contribution plan. The negotiations with the differentstakeholders are ongoing.The defi ned benefi t schemes of EuroCeramic B.V., Wavin Germany and Wavin Norway are outsourced to insurancecompanies. The exposures related to the pension liabilities in France and Italy are fully accrued for.Movements in the liability for defi ned benefi t obligations for the Group were:(€ x 1,000) 2010 2009Liability for defi ned benefi t obligations at 1 January 393,460 337,250Effect of movements in foreign exchange 4,884 7,746Contributions received 3,427 3,459Movements to defi ned benefi t plans – 71Benefi ts paid by the plan (15,994) (15,901)Actuarial gains (losses) not recognised (4,155) 36,009Curtailment gains (losses) – (1,477)Actuarial gains (losses) recognised through profi t or loss – 25Movement to liabilities held-for-sale – (48)Service costs and interest 30,372 26,326Liability for defined benefit obligations at 31 December 411,994 393,460Plan assetsMovements in the plan assets were:(€ x 1,000) 2010 2009Fair value of plan assets at 1 January 360,554 299,342Effect of movements in foreign exchange 3,678 6,745Contributions paid into the plan by participants 3,427 3,459Contributions paid into the plan by the Group 12,312 12,615Benefi ts paid by the plan (14,933) (14,700)Expected return on plan assets 21,019 17,392Actuarial gains (losses) not recognised 31,746 35,701Fair value of plan assets at 31 December 417,803 360,554Plan assets consist of the following:2010 2009Equity securities 38% 45%Government bonds 59% 49%Property 0% 0%Other 3% 6%Total fair value of plan assets 100% 100%

Wavin Annual Report 2010 | page 122Expense recognised in the income statement(€ x 1,000) 2010 2009Current service costs 8,921 6,463Interest on obligation 21,451 19,863Expected return on plan assets (21,019) (17,392)Actuarial (gains) losses to the extent recognised 302 504Curtailment (gains) losses – (1,378)Effect of asset ceiling 2,977 1,165Expense recognised in the income statement 12,632 9,225In the Netherlands (EuroCeramic) and the UK the unrecognised actuarial losses per 31 December 2010 have exceeded thecorridor. This will result in an increase of the expense for employee benefi ts recognised in the 2011 income statement.The expense is recognised in the following line items in the income statement:(€ x 1,000) 2010 2009Cost of sales 5,211 4,062Selling and distribution expenses 5,272 3,840Administrative expenses 2,149 1,323Total 12,632 9,225Actual return on plan assets 18,720 20,228Actuarial gains and losses not recognised(€ x 1,000) 2010 2009Actuarial gains and (losses) not recognised at 1 January (19,409) (19,204)Effect of movements in foreign exchange (961) (475)Curtailment gains (losses) – 99Recognised during the period 302 479Not recognised during the period on the liabilities 4,155 (36,009)Not recognised during the period on the assets 31,746 35,701Actuarial gains and (losses) not recognised at 31 December 15,833 (19,409)Principal actuarial assumptions at the balance sheet date(% – expressed as weighted average) 2010 2009Discount rate at 31 December 5.3 5.6Expected return on plan assets at 31 December 5.5 5.9Future salary increases 2.9 3.4Future pension increases 1.9 2.2The overall expected long term rate of return on assets is 5.5%. The expected long term rate of return is based onthe target portfolio as a whole and based on the sum of the returns on individual asset categories.The Group expects to contribute € 10.0 million to its defi ned benefi t pension plans in 2011. For other benefi t plansthe contribution for 2011 by the Group is expected to be € 0.1 million.

Wavin Annual Report 2010 | page 123Assumptions regarding future mortality are based on published statistics and mortality tables. In the Netherlands PensionfundOwase applied as per 31 December 2010 the most recent mortality table ‘AG Prognosetafel 2010-2060’, adjusted fordifferences between the total population and the working population (experience factor 2010). The current longevitiesunderlying the values of the liabilities in the defi ned benefi t plans are as follows:2010 2009NETHERLANDS UK NETHERLANDS UKLongevity at age 65 for current pensionersMales 21.4 20.7 18.7 20.6Females 23.9 23.6 21.6 23.5Longevity at age 65 for current membersaged 45Males 23.0 21.8 20.2 21.8Females 24.8 24.6 22.3 24.6Historical informationThe difference between the actual and expected return on plan assets was a loss of € 2.3 million, a gain of € 2.8 million in2009, a loss of € 62.4 million in 2008, a loss of € 14.4 million in 2007 and a gain of € 6.1 million in 2006.The historical data breakdown of the defi cit in the plan and experience adjustments is as follows:(€ x 1,000) 2010 2009 2008 2007 2006Present value of the defi ned benefi t obligation 411,994 393,460 337,250 372,282 174,723Fair value of plan assets (417,803) (360,554) (299,342) (368,783) (163,877)Deficit in the plan (5,809) 32,906 37,908 3,499 10,846Adjustments due to experience 15,969 35,588 (68,763) (5,656) 5,732Adjustments due to change in assumptions 11,108 (36,890) 28,826 (1,427) 12,053Total adjustments 27,077 (1,302) (39,937) (7,083) 17,78528. Share-based paymentsAccording to the Long Term Incentive Plan (LTIP) eligible employees can, on a voluntary basis, elect to invest part of theirindividual annual incentive in Wavin shares. The investment is limited to 50% of the individual’s gross annual incentive.The minimum investment, if an employee elects to invest, is set at 10% of the gross annual incentive payment. The employeereceives the right to one conditional matching share for each two purchased shares and a maximum of three conditionalperformance options for each share purchased. Only employees who participated and remain in service after the vestingperiod of 3 years will become entitled to receive the matching shares.The total number of performance options to be granted is dependent on the realisation of an Ebitda growth realised duringthe four years vesting period and the number of employees that is still employed at the time of vesting. Only employees whoparticipated and remain in service after the vesting period of 4 years will become entitled to receive the performance options.The purchased shares and the matching shares are subject to a mandatory lock-up period of fi ve years following the date ofgrant. In 2010 eligible employees purchased 250,815 shares (2009: 104,772 shares) resulting in a future grant of 125,429matching shares and a maximum of 752,445 performance options.Enabling the ‘reverse stock split’ of 8 ordinary shares with a nominal value of € 0.05 each into 1 ordinary share with a nominalvalue of € 0.40 effectuated in line with the adjustment to the other outstanding Wavin shares, the purchased shares toparticipate in the LTIP and which are subject to a lock-up, the granted matching shares and the granted performance optionshad to be recalculated.

Wavin Annual Report 2010 | page 124The terms and conditions relating to the grants of the Long Term Incentive Plan are as follows:NUMBER OFINSTRUMENTSGRANTEDNUMBER OFINSTRUMENTSAFTERREVERSESTOCK SPLIT*VESTING CONDITIONSYEAR OFVESTINGYEAR OF EXPIRY(OPTIONS) /HOLDINGPERIOD(SHARES)Conditional performance options granted in 2008 919,440 104,897 4 years’ service and Ebitda growth target 2012 2015Conditional performance options granted in 2009 771,517 96,456 4 years’ service and Ebitda growth target 2013 2016Conditional performance options granted in 2010 752,445 94,104 4 years’ service and Ebitda growth target 2014 2017Total performance options 2,443,402 295,457Conditional matching shares granted in 2008 153,301 17,511 3 years’ service 2011 2013Conditional matching shares granted in 2009 128,586 16,095 3 years’ service 2012 2014Conditional matching shares granted in 2010 125,429 15,705 3 years’ service 2013 2015Total conditional shares 407,316 49,311* Number of instruments after reverse stock split includes the effect of actual forfeitures at the time of the reverse stock split.The number of the granted shares and options are as follows:2010 2009WEIGHTEDAVERAGEEXERCISEPRICE**NUMBER OFPERFORMANCEOPTIONSNUMBER OFMATCHINGSHARESWEIGHTEDAVERAGEEXERCISEPRICE*NUMBER OFPERFORMANCEOPTIONSNUMBER OFMATCHINGSHARESOutstanding at 1 January 1.93 1,529,880 254,980 7.29 374,580 62,455Granted during the period 752,445 125,429 314,316 52,386Forfeited during the period (9,175) (4,559) (161,077) (26,907)Effect rights issue – – 1,002,061 167,046Effect of reverse stock split (1,998,359) (333,081) – –Outstanding at 31 December 14.09 274,791 42,769 1.93 1,529,880 254,980Exercisable at 31 December – – – – – –* The weighted average exercise price per 31 December 2009 is affected by the rights issue and granted options in 2009.** Weighted average exercise price per 31 December 2010 is affected by the reverse stock split and granted options in 2010.The fair value of the matching shares is determined using the Black-Scholes model. Given that the Wavin shares are listed asfrom 11 October 2006, insuffi cient historical share price data is available for determining the historical volatility of the Wavinshares for a period equal to the life of the options granted. Therefore we have analysed the historical share price developmentof comparable companies in order to determine the expected volatility to be applied. The fair value of the performanceoptions at grant date is determined using a binominal tree valuation methodology.

Wavin Annual Report 2010 | page 125The input used in the measurement of the fair values at grant date of the Long Term Incentive Plan is as follows:(€ × 1 – unless other wise stated) 2010 2009 2008Fair value of matching shares at grant date 1.38 1.48 6.16Adjusted fair value matching shares due to rights issue – 0.60 2.51Adjusted fair value matching shares due to reverse stock split 11.04 4.80 20.08Fair value performance option at grant date 0.45 0.36 1.57Adjusted fair value performance option at grant date due to rights issue – 0.15 0.64Adjusted fair value performance option at grant date due to reversestock split 3.60 1.20 5.12Share price at grant date 1.40 1.89 7.38Exercise price at grant date 1.40 1.96 7.29Adjusted exercise price due to rights issue – 0.80 2.97Adjusted exercise price due to reverse stock split 11.20 6.40 23.76Expected volatility (weighted average) (%) 40% 40% 35%Option life (expected weighted average in years) 5.76 6.17 5.83Expected dividends 0.03 0.14 0.46Risk-free interest rate (based on government bonds) (%) 2.93% 3.28% 3.70%The effect of forfeitures is remeasured at each reporting date and at settlement date.The expenses related to the share-based payment plans and Long Term Incentive Plan can be summarised as follows:(€ x 1,000) 2010 2009Expense arising from shares granted in 2008 75 103Expense arising from shares granted in 2009 22 20Expense arising from shares granted in 2010 41 –Expense arising from options granted in 2010 44 –Effect of share appreciation rights granted in 2006 – 51Total expense recognised as personnel costs 182 174Total unrecognised value of liability for vested benefits – –As options granted in 2008 and 2009 are not expected to meet the vesting conditions no expenses are taken into account.29. Provisions(€ x 1,000) WARRANTY RESTRUC-TURINGTAXPROVISIONSOTHERPROVISIONSTOTALBalance at 1 January 2010 3,832 3,904 6,611 9,494 23,841Provisions made during the year 1,877 6,078 800 1,001 9,756Provisions used during the year (1,443) (5,696) – (1,006) (8,145)Provisions reversed during the year (757) (46) – (533) (1,336)Effect of movements in foreign exchange 35 2 1,259 123 1,419Other movements – – – 767 767Balance at 31 December 2010 3,544 4,242 8,670 9,846 26,302Non-current 1,113 878 8,670 6,809 17,470Current 2,431 3,364 – 3,037 8,832

Wavin Annual Report 2010 | page 126WarrantyFor products sold, a provision is recognised based on actual claims received and on historical data regarding warranty costs,which were not provided for on an individual claims basis. The product liability insurance cover is taken into account whendetermining the provision. Claims honoured are charged against the provision. The Group expects to incur the liabilities overthe next two years.RestructuringIn 2010 restructuring provisions were made for the announced restructurings in the Netherlands, Germany, Belgium andFrance and some smaller programmes throughout the Group. It is expected that these restructurings will largely becompleted within one year from the balance sheet date.TaxThe tax provisions relate to identifi ed tax exposures in the Group. The majority of the cash outfl ows related to the taxprovisions are expected to be within one to four years.Other provisionsThe other provisions per 31 December 2010 mainly consist of provisions for the obligation to take back returnable packagingin Germany (€ 2.9 million), quarry restoration obligations related to the clay activities in the UK (€ 2.1 million) andenvironmental commitments at the Dutch production site (€ 1.1 million). The majority of the cash outfl ows related to otherprovisions are expected to be within one to fi ve years.30. Other non-current liabilitiesThe other non-current liabilities can be specifi ed as follows:(€ x 1,000) 2010 2009Interest instruments 6,746 17,179Deferred government grants 38 50Other non-current liabilities 377 670Total other non-current liabilities 7,161 17,899Decrease of the carrying value for fi nancial instruments is due to increasing interest rates on the capital market and thereduced duration resulting in a reclassifi cation to other payables (see note 31).31. Trade and other payables(€ x 1,000) 2010 2009Trade payables 249,919 232,652Non-trade payables and accrued expenses 58,410 60,227Interest instruments 7,208 –Amounts payable to associates 1,045 1,407Total trade and other payables 316,582 294,286Trade payables increased due to increasing activity levels and higher raw material prices. Inclusion of interest instruments isdue to the reduced duration resulting in a reclassifi cation from other non-current liabilities.The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 4.

Wavin Annual Report 2010 | page 12732. Operating leasesNon-cancellable operating leases are payable as follows:(€ x 1,000) 2010 2009Less than one year 16,072 10,912Between one and fi ve years 30,720 31,555More than fi ve years 13,591 17,125Total 60,383 59,592The Group leases a number of warehouse and factory facilities and internal transport equipment under operating leases.The leases typically run for an initial period of between fi ve and ten years, with an option to renew the lease after that date.None of the leases includes purchase liabilities or contingent rentals. Some leases provide for additional rent payments thatare based on changes in a local price index.During the year ended 31 December 2010 € 19.1 million was recognised as an expense in the income statement in respectof operating leases and rental costs (2009: € 17.6 million).33. Capital commitmentsWith respect to the purchase of investment goods, per 31 December 2010 obligations have been entered into and ordershave been placed to a value of € 8.5 million (2009: € 8.7 million).34. Contingent liabilitiesAt 31 December 2010 bank guarantees issued mainly for bid bonds and performance bonds amount to approximately€ 4.9 million (2009: € 7.8 million). Per 31 December 2010 letters of credit were issued for an amount of € 8.9 million (2009:€ 9.8 million).The Group is defending its position in different procedures brought up by employees, suppliers and/or customers in differentcountries in Europe. While liability is not admitted, the estimated fi nes and legal costs are provided for when it is anticipated totake defensive actions. Based on legal advice, the Group does not expect the outcome of the actions to have a materialeffect on the Group’s fi nancial position.For drawings under the Syndicated Loan Facility of € 500 million the Group has provided lenders securities consisting ofmortgages on real estate, pledges on receivables, inventories and bank accounts for a total amount of € 440.1 million. For anamount of € 278.9 million shares in subsidiaries have been pledged. The leverage ratio should not be below a certain levelwhereas the interest coverage should at least meet a certain level (for details we refer to note 26). The Group must assurethat the aggregate tangible assets and the aggregate Ebitda of the identifi ed guarantors represent at least 70% of theconsolidated tangible assets and the consolidated Ebitda of the Wavin Group.Wavin N.V. and the subsidiaries have issued cross guarantees for drawings under the notional cash pool system.Almost all the subsidiaries in The Netherlands form a fi scal unity with Wavin N.V. for the income tax, VAT and tax on wages.Wavin N.V. is severally liable for the tax debts of the fi scal unity.35. Related partiesIdentity of related partiesThe Group has a related party relationship with its subsidiaries and associates (see overview principal direct and indirectparticipations). During 2010 there was a related party relationships with Stichting Preferente Aandelen Wavin which has a calloption for preference shares of Wavin N.V. (for details we refer to note F of the Company Financial Statements).The Group also has a related party relationship with Wavin Plastics Pension Scheme, Hepworth Building Products PensionScheme, Wavin Ireland Pension Scheme and Stichting Pensioenfonds Owase (for details we refer to note 27). Finally,a related party relationship exists with the Supervisory Board members and Management Board members (for details we referto note K of the Company Financial Statements).

Wavin Annual Report 2010 | page 128Other related party transactionsDuring the year ended 31 December 2010, we did not sell any goods to associates (2009: € 0.2 million). Sales of associatesto the Group amounted to € 12.4 million (2009: € 12.2 million). At 31 December 2010 the Group owed associates € 1.0million (2009: € 1.3 million). For details regarding outstanding receivables and liabilities we refer to notes 23 and 31.Wavin purchases and sells goods and services to various related parties in which Wavin holds a 50% or less equity interest(non-consolidated companies). Such transactions were not signifi cant on an individual or aggregate basis. The transactionswere conducted at arm’s length with terms comparable to transactions with third parties. During the year ended31 December 2010 the Group received € 3.1 million dividend from associates (2009: € 5.0 million).36. Transactions with key management and remunerationThere have been no transactions with members of the Supervisory Board or Management Board or any family member ofsuch persons except for some members of the Supervisory Board and Management Board in their capacity as shareholders.All transactions were conducted at arm’s length principle.No loans or guarantees have been provided to members of the Supervisory Board or Management Board or any familymember of such persons. Members of the Management Board are entitled to equity compensation benefi ts (for detailsreference is made to note 28). Members of the Supervisory Board are not entitled to equity compensation benefi ts.For details about the remuneration of the members of the Supervisory Board and Management Board we refer to note Kof the Company Financial Statements.37. Group companiesThe Group’s ultimate parent company is Wavin N.V. Please refer to the list of principal direct and indirect participations.38. Subsequent eventsIn October 2010 the Group announced that it had entered into an agreement to acquire the PE Water business for belowground applications from KWH Sweden. In January 2011 the assets were actually transferred. As a consequence the resultsand balance sheet of the PE Water business for below ground applications from KWH Sweden were not included in thefi gures per 31 December 2010. As from January 2011 these fi gures will be consolidated. The annual revenue of KWHSweden amounts to approximately € 10 million. Wavin also took over staff (total approximately 30 FTEs) and assets.

Wavin Annual Report 2010 | page 129CompanybalancesheetAS AT 31 DECEMBER(€ X 1,000)NOTE 2010 2009*AssetsIntangible assets B 94,865 93,325Investments in subsidiaries C 297,768 275,035Deferred tax assets D 3,021 3,500Total non-current assets 395,654 371,860Trade and other receivables 243 552Income tax receivable 2,038 6,117Cash and cash equivalents E 203,956 210,794Total current assets 206,237 217,463Total assets 601,891 589,323EquityIssued capital F 20,313 20,313Share premium F 422,847 422,847Reserves F (13,786) (25,971)Retained earnings F 141,384 134,464Total equity 570,758 551,653LiabilitiesInterest-bearing loans and borrowings G 15,000 15,000Other non-current liabilities H 6,747 16,171Total non-current liabilities 21,747 31,171Bank overdrafts 265 315Trade and other payables 9,121 6,184Total current liabilities 9,386 6,499Total liabilities 31,133 37,670Total equity and liabilities 601,891 589,323* Figures adjusted for comparison reasons.The notes on page 130 to 140 are an integral part of the Company Financial Statements.CompanyincomestatementFOR THE YEAR ENDED 31 DECEMBER(€ X 1,000)NOTE 2010 2009Net income from subsidiaries and associates I 11,860 6,899Other net income (6,035) (6,712)Profit for the period 5,825 187The notes on page 130 to 140 are an integral part of the Company Financial Statements.

Wavin Annual Report 2010 | page 130Notes to theCompanyFinancialStatementsA. GeneralThe Company Financial Statements are presented in Euro, which is the Company’s functional currency. The amounts arerounded to the nearest thousand, unless otherwise stated.The Company Financial Statements of Wavin N.V. have been prepared in using the option of section 362 of Book 2 of theDutch Civil Code, meaning that the accounting principles used are the same as for the consolidated fi nancial statements.Foreign currency has been translated, assets and liabilities have been valued, and net income has been determined, inaccordance with the valuation principles and determination of income as prescribed in the signifi cant accounting policies.Subsidiaries of Wavin N.V. are accounted for at net equity value.As the fi nancial data of Wavin N.V. are included in the consolidated fi nancial statements, the income statement of Wavin N.V.is condensed in conformity with section 402 of Book 2 of the Dutch Civil Code.B. Intangible assets(€ x 1,000) GOODWILLCostBalance at 1 January 2009 94,584Effect of movements in exchange rates 1,421Balance at 31 December 2009 96,005Balance at 1 January 2010 96,005Effect of movements in exchange rates 1,540Balance at 31 December 2010 97,545ImpairmentBalance at 1 January 2009 (2,680)Balance at 31 December 2009 (2,680)Balance at 1 January 2010 (2,680)Balance at 31 December 2010 (2,680)Carrying amountsAt 1 January 2009 91,904At 31 December 2009 93,325At 1 January 2010 93,325At 31 December 2010 94,865The goodwill fully relates to the acquisition of the shares of Beheermaatschappij Wavin B.V. by Wavin Holdings B.V. in 2005.For details we refer to note 18 of the Group Financial Statements.

Wavin Annual Report 2010 | page 131C. Investments in subsidiaries(€ x 1,000) 2010 2009*Balance at 1 January 275,035 260,284Profi t for the period 11,860 6,899Currency differences 10,458 7,766Other movements 415 86Balance at 31 December 297,768 275,035* Figures adjusted for comparison reasons.The other movements relate to fair value adjustments of interest rate swaps included directly in equity of operatingcompanies.D. Deferred tax assetsThe deferred tax asset fully relates to the fair value of fi nancial instruments.E. Cash and cash equivalentsThe cash and cash equivalents are included in the notional cash pool system. These assets were on demand available per 31December.

Wavin Annual Report 2010 | page 132F. Shareholders’ equity(€ x 1,000) ISSUEDCAPITALSHAREPREMIUMLEGAL ANDSTATUTORYRESERVETRANSLATIONRESERVEHEDGINGRESERVERETAINEDPROFITTOTALBalance at 1 January 2009 100,961 126,029 12,332 (34,111) (9,236) 133,040 329,015Profi t (loss) for the period – – 3,073 – – (2,886) 187Other comprehensive income*Exchange rate differences on translatingforeign operations – – – 9,391 (12) – 9,379Fair value changes cash fl ow hedges,net of tax – – – – (3,895) – (3,895)Realised fair value changes fi nancialinstruments, net of tax – – – – 2,438 – 2,438Reclassifi cation – – (969) – – 969 –Total comprehensive incomefor the period* – – 2,104 9,391 (1,469) (1,917) 8,109Contributions by and distributionsto owners*Shares issued 16,250 211,254 – – – – 227,504Cost of shares issued – (11,334) – – – – (11,334)Stock dividend 603 (603) – – – – –Treasury shares issued – – – – – 206 206Long Term Incentive Plan – – – – – 222 222Share-based payment plans – – – – – 51 51Dividends declared to shareholders – – – – – (2,120) (2,120)Dividends received from associates – – (4,982) – – 4,982 –Reclassifi cation (97,501) 97,501 – – – – –Transactions with owners, recordeddirectly in equity* (80,648) 296,818 (4,982) – – 3,341 214,529Balance at 31 December 2009 20,313 422,847 9,454 (24,720) (10,705) 134,464 551,653Balance at 1 January 2010 20,313 422,847 9,454 (24,720) (10,705) 134,464 551,653Profit (loss) for the period – – 2,196 – – 3,629 5,825Other comprehensive incomeExchange rate differences on translatingforeign operations – – – 12,041 (46) – 11,995Fair value changes cash fl ow hedges,net of tax – – – – 1,529 – 1,529Reclassifi cation – – (460) – – 460 –Total comprehensive income for theperiod – – 1,736 12,041 1,483 4,089 19,349Contributions by and distributionsto ownersTreasury shares purchased – – – – – (777) (777)Treasury shares issued – – – – – 351 351Long Term Incentive Plan – – – – – 182 182Dividends received from associates – – (3,075) – – 3,075 –Transactions with owners, recordeddirectly in equity – – (3,075) – – 2,831 (244)Balance at 31 December 2010 20,313 422,847 8,115 (12,679) (9,222) 141,384 570,758* Presentation adjusted for comparison reasons.

Wavin Annual Report 2010 | page 133Share capital and share premium(€ x 1,000) 2010 2009On issue at 1 January 443,160 226,990Shares issued – 227,504Costs of shares issued, net of tax – (11,334)Total share capital and share premium 443,160 443,160Authorised sharesIn April 2010, the General Meeting of Shareholders approved an amendment of the Articles of Association, enabling a‘reverse stock split’ of 8 ordinary shares with a nominal value of € 0.05 each time into 1 ordinary share with a nominal valueof € 0.40. As a result of the reverse stock split the number of shares decreased from 406,257,050 to 50,782,132. For adetailed specifi cation of the movement of the number of shares we refer to note 16.The Company holds 113,772 shares as treasury shares to cover current and future obligations under the Long Term IncentivePlan of the Company. In the year under review 250,815 shares (adjusted for the reverse stock split 31,352 shares) wereissued to the Management Board and senior management as part of the Long Term Incentive Plan. The shares were listed onEuronext Amsterdam by NYSE Euronext at the lower nominal value until 30 April 2010.At 31 December 2010, the total authorised ordinary share capital exists of 88,750,000 ordinary shares with a par value of€ 35.5 million. In addition to the ordinary shares the Company authorised 88,750,000 preference shares with a par value of€ 0.40 per share for future issuance.Issued sharesThe total issued ordinary share capital per 31 December 2010 exists of 50,782,132 shares with a par value of € 20.3 million(2009: € 20.3 million) and a share premium of € 422.8 million (2009: € 422.8 million). Under the Long Term Incentive Plansenior and middle management acquired 250,815 shares (adjusted for the reverse stock split 31,352 shares) which werededucted from the treasury shares.The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote pershare at the General Meeting of Shareholders. All shares rank equally with regard to the Company’s residual assets. Inrespect of the Company’s shares that are held by the Group (see below), all rights are suspended until those shares arereissued.

Wavin Annual Report 2010 | page 134The number of issued and outstanding shares can be specifi ed as follows:(shares × 1) 2010 2009Issued ordinary shares at 1 January 406,257,050 80,769,090Treasury shares at 1 January (565,950) (375,140)Outstanding ordinary shares at 1 January 405,691,100 80,393,950Effect of paid stock dividend – 482,320Effect of shares issued 250,815 375,140Effect of shares purchased – (565,950)Effect of rights issue – 325,005,640Shares issued to facilitate reverse stock split 6 –Outstanding ordinary shares before reverse stock split 405,941,921Treasury shares before reverse stock split 315,135Issued ordinary shares before reverse stock split 406,257,056Effect of reverse stock split (355,474,924)Issued ordinary shares after reverse stock split 50,782,132Treasury shares after stock split (39,392)Outstanding ordinary shares after reverse stock split 50,742,740Effect of shares issued as part of LTIP, reverse stock split 620Effect of shares purchased (75,000)Outstanding ordinary shares at period end 50,668,360 405,691,100Treasury shares at 31 December 113,772 565,950Issued shares at 31 December 50,782,132 406,257,050The Company holds 113,772 shares as treasury shares to cover current and future obligations under the Long Term IncentivePlan of the Company (see note 28).DividendsIn 2010 no dividends were declared. In 2009 € 2.7 million dividend was declared of which € 2.1 million was satisfi ed in cash.For an amount of € 0.6 million, 482,320 shares were issued as stock dividend.Wavin is subject to restrictions on the distribution of cash dividends under its Syndicated Loan Facility. According to the termsof these facilities Wavin may not pay any cash dividend in excess of € 0.01 on any share in our capital until 31 December2011. Cash dividend declarations are again allowed in 2012 over the 2011 results.Given the above restrictions, the Boards of Wavin have resolved to add the profi t attributable to shareholders to the reserves.

Wavin Annual Report 2010 | page 135Share-based compensationFor details regarding the applicable Long Term Incentive Plans we refer to note 28. The expenses as included in the incomestatement in 2010 for the Long Term Incentive Plan amounted to € 0.2 million (2009: € 0.1 million). The granted shares andoptions can be summarised as follows:SerieOUTSTANDINGAT 1 JANUARY2010*GRANTEDMARKET VALUEAT GRANT DATEOUTSTANDINGAT31 DECEMBER2010MARKETVALUE AT31 DECEMBER2010VESTING DATEHOLDING PERIOD UP TO ANDINCLUDINGConditional shares SHARES SHARES (€) SHARES (€)LTIP 2010 – 15,705 173,222 15,705 179,037 March 8, 2013 March 7, 2015LTIP 2009 15,562 – 77,151 15,445 176,073 March 5, 2012 March 4, 2014LTIP 2008 17,187 – 455,297 16,096 183,494 March 10, 2011 March 9, 2013Total 32,749 15,705 705,670 47,246 538,604SerieEXERCISEPRICE*OUTSTANDINGAT 1 JANUARY2010*GRANTED*MAXIMUM**OUTSTANDINGAT31 DECEMBER2010MAXIMUM**MARKET VALUEAT31 DECEMBER2010MAXIMUM**VESTING DATEEXPIRY DATEConditional options (€) OPTIONS OPTIONS OPTIONS (€)LTIP 2010 11.20 – 94,104 94,104 18,821 March 8, 2014 March 8, 2017LTIP 2009 6.40 93,372 – 92,670 463,350 March 5, 2013 March 5, 2016LTIP 2008 23.76 103,074 – 96,527 – March 10, 2012 March 10, 2015Total 196,446 94,104 283,301 482,171* Outstanding shares and options at 1 January, the number of granted shares and granted maximum number of options have been adjusted for comparison reason to reflect the effect of thereverse stock split.** At 15% or more average annual Ebitda growth over the years 2008 up to and including 2011, over the years 2009 up to and including 2012 resp. over the years 2010 up to and including 2013the maximum number of performance options will be granted.Option rights grantedThe Company has issued call option rights for preference shares to a maximum of the outstanding issued ordinary sharecapital to the foundation Stichting Preferente Aandelen Wavin (the Foundation). The board of the Foundation independentlydecides to exercise its call option. The Foundation has the possibility to subscribe for the preference shares at nominal value.The Foundation will pay one/fourth of the nominal amount of the preference shares subscribed for. Three/fourths of thenominal amount only need to be paid after the Company has called for it. If the call option is exercised the shareholder is notentitled to dividend but receives an interest based on 12 months Euribor plus 2% on the actual deposits. For further detailswe refer to the paragraph Special rights provided for by the Articles of Association (page 39) and to the chapter CorporateGovernance of the annual report (page 32 – 39).Legal and statutory reservesLegal and statutory reserves include non-distributable profi ts which are not available for dividend payment due to legalrestrictions in the countries of domicile of the participations as long as there is a repayment obligation. The legal reserves alsoinclude a reserve for capitalised development costs representing the capitalised development costs within the Group sincethe Company has been established. This amount is not available for dividend distribution due to legal restrictions in theNetherlands.Translation reserveTranslation reserve represents the translation differences of participations. These amounts are not available for dividenddistribution. A negative reserve for translation differences has to be regarded as a reduction of the retained earnings.Hedging reserveThe hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash fl ow hedginginstruments where the hedged transaction has not yet occurred.

Wavin Annual Report 2010 | page 136G. Interest-bearing loans and borrowings receivedAll reported interest-bearing loans and borrowings per 31 December 2010 of € 15.0 million (2009: € 15.0 million) are secured(2009: secured).H. Other non-current liabilitiesThe other non-current liabilities fully relate to the fair value of fi nancial instruments.I. Net income from subsidiaries and associatesNet income from subsidiaries and associated companies relates to Wavin N.V.’s share in earnings of its subsidiaries andassociates. For further details see note C.J. Contingent liabilitiesIn accordance with Dutch legislation on the exemption concerning the preparation and fi ling of annual accounts, Wavin N.V.has assumed individual liability for debts originating from legal acts by Wavin B.V. (sect. 403, title 9 Book 2 of the Dutch CivilCode). This regards all Dutch group companies with the exception of Rezo.Almost all the subsidiaries in The Netherlands form a fi scal unity with Wavin N.V. for income tax, VAT and tax on wages.Wavin N.V. is severally liable for the tax debts of the fi scal unity.Wavin N.V. and the subsidiaries have issued cross guarantees for drawings under the notional cash pool system.K. Remuneration of the Management Board and Supervisory BoardRemuneration of the Management BoardThe individual service contracts of the members of the Management Board are determined by the Supervisory Board.For more details regarding decisions of the Remuneration, Appointment & Corporate Governance Committee with respect toservice contracts of the Management Board we refer to page 37 of this annual report.The remuneration of the Management Board includes salaries, performance related bonuses, emoluments and othercompensations.Remuneration of the Management BoardAs at 31 December(€) FIXED BASESALARYANNUALBONUSOTHERBENEFITSTOTALSHORT TERMEMPLOYEEBENEFITSPOSTEMPLOYMENTBENEFITS*LONG TERMINCENTIVEPLANTOTALREMUNERATION2010Henk ten Hove 359,333 50,163 36,489 445,985 78,168 11,989 536,142Pim Oomens 321,561 44,890 41,350 407,801 79,184 13,917 500,902Maarten Roef** 69,444 7,611 10,722 87,777 16,069 2,295 106,141Philip Houben 466,615 65,139 51,133 582,887 200,202 13,010 796,099Andy Taylor*** 497,775 80,777 110,875 689,427 162,827 - 852,254Total 1,714,728 248,580 250,569 2,213,877 536,450 41,211 2,791,5382009Henk ten Hove 329,437 59,299 35,738 424,474 70,931 9,902 505,307Pim Oomens 318,610 57,350 43,363 419,323 78,495 9,995 507,813Philip Houben 442,989 49,836 50,222 543,047 128,773 10,279 682,099Andy Taylor 256,521 51,702 71,981 380,204 73,823 - 454,027Total 1,347,557 218,187 201,304 1,767,048 352,022 30,176 2,149,246* These benefits relate to pension contributions by the employer.** The appointment of Maarten Roef as member of the Management Board is subject to approval of shareholders at the AGM planned for 27 April 2011. Remuneration is for the period October upto and including December 2010.*** Remuneration up to and including September 2010 including the contractual entitlement of 12 months salary and benefits including incentive pay, in lieu of notice.In 2010 there were several changes in the Management Board. Philip Houben stepped down as President & CEO of theWavin Group as per 1 October 2010 and left the company per 31 December 2010. Henk ten Hove was appointed asPresident & CEO of the Wavin Group as of October 1 2010. Andy Taylor left the company per 30 September 2010.The Supervisory Board decided to nominate Maarten Roef as new board member, subject to the approval of shareholders atthe AGM planned for April 27 2011.

Wavin Annual Report 2010 | page 137Number of conditional shares of the Management BoardSERIESOUTSTAND-ING AT1 JANUARY2010GRANTIN 2010ADJUSTMENTGRANTSDUE TOREVERSESTOCK SPLITVALUEAT GRANTDATEOUTSTAND-ING AT 31DECEMBER2010MARKETVALUE AT 31DECEMBER2010VESTING DATEUP TOHOLDING PERIOD UPTO AND INCLUDINGSHARES SHARES SHARES (€) SHARES (€)Henk ten Hove LTIP 2010 – 5,295 (4,633) 7,413 662 7,547 March 8, 2013 March 7, 2015Henk ten Hove LTIP 2009 9,799 – (8,574) 7,824 1,225 13,965 March 5, 2012 March 4, 2014Henk ten Hove LTIP 2008 9,559 – (8,364) 28,395 1,195 13,623 March 10, 2011 March 9, 2013Pim Oomens LTIP 2010 – 10,241 (8,960) 14,337 1,281 14,603 March 8, 2013 March 7, 2015Pim Oomens LTIP 2009 9,476 – (8,291) 7,568 1,185 13,509 March 5, 2012 March 4, 2014Pim Oomens LTIP 2008 9,670 – (8,461) 28,723 1,209 13,783 March 10, 2011 March 9, 2013Maarten Roef* LTIP 2010 – 12,066 (10,557) 16,892 1,509 17,203 March 8, 2013 March 7, 2015Maarten Roef* LTIP 2009 8,858 – (7,750) 7,073 1,108 12,631 March 5, 2012 March 4, 2014Maarten Roef* LTIP 2008 3,319 – (2,904) 9,857 415 4,731 March 10, 2011 March 9, 2013Philip Houben LTIP 2010 – 7,119 (6,229) 9,967 890 10,146 March 8, 2013 March 7, 2015Philip Houben LTIP 2009 – – – – – –Philip Houben LTIP 2008 12,287 – (10,751) 36,494 1,536 17,510 March 10, 2011 March 9, 2013Andy Taylor LTIP 2010 – – – – – –Andy Taylor LTIP 2009 – – – – – –Andy Taylor LTIP 2008 – – – – – –Total 62,968 34,721 (85,474) 174,544 12,215 139,251* The appointment of Maarten Roef as member of the Management Board is subject to approval of shareholders at the AGM planned for 27 April 2011.Number of conditional options of the Management BoardSERIESEXERCISEPRICEADJUSTEDEXERCISEPRICEOUTSTAND-ING AT1 JANUARY2010GRANTED2010(MAXIMUM)*ADJUSTMENTGRANT DUETO REVERSESTOCK SPLITOUTSTAND-ING AT 31DECEMBER2010(MAXIMUM)*MARKETVALUE AT 31DECEMBER2010(MAXIMUM)VESTING DATEEXPIRY DATE(€) (€) OPTIONS OPTIONS OPTIONS OPTIONS (€)Henk ten Hove LTIP 2010 1.40 11.20 – 31,767 (27,796) 3,971 794 March 8, 2014 March 8, 2017Henk ten Hove LTIP 2009 1.96 6.40 58,791 – (51,442) 7,349 36,745 March 5, 2013 March 5, 2016Henk ten Hove LTIP 2008 7.29 23.76 57,355 – (50,185) 7,170 – March 10, 2012 March 10, 2015Pim Oomens LTIP 2010 1.40 11.20 – 61,446 (53,765) 7,681 1,536 March 8, 2014 March 8, 2017Pim Oomens LTIP 2009 1.96 6.40 56,855 – (49,748) 7,107 35,535 March 5, 2013 March 5, 2016Pim Oomens LTIP 2008 7.29 23.76 58,018 – (50,765) 7,253 – March 10, 2012 March 10, 2015Maarten Roef** LTIP 2010 1.40 11.20 – 72,393 (63,343) 9,050 1,810 March 8, 2014 March 8, 2017Maarten Roef** LTIP 2009 1.96 6.40 53,151 – (46,507) 6,644 33,220 March 5, 2013 March 5, 2016Maarten Roef** LTIP 2008 7.29 23.76 19,911 – (17,422) 2,489 – March 10, 2012 March 10, 2015Philip Houben LTIP 2010 1.40 11.20 – 42,717 (37,377) 5,340 1,068 March 8, 2014 March 8, 2017Philip Houben LTIP 2009 1.96 6.40 – – – – –Philip Houben LTIP 2008 7.29 23.76 73,725 – (64,509) 9,216 – March 10, 2012 March 10, 2015Andy Taylor LTIP 2010 1.40 11.20 – – – – –Andy Taylor LTIP 2009 1.96 6.40 – – – – – March 5, 2013 March 5, 2016Andy Taylor LTIP 2008 7.29 23.76 – – – – – March 10, 2012 March 10, 2015Total 377,806 208,323 (512,859) 73,270 110,708* The maximum number of options will be granted at 15% or more average annual Ebitda growth over the vesting period.** The appointment of Maarten Roef as member of the Management Board is subject to approval of shareholders at the AGM planned for 27 April 2011.

Wavin Annual Report 2010 | page 138Remuneration of the Supervisory BoardThe income statement includes the following remuneration for the Supervisory Board:(€ x 1,000) 2010 2009Paul van den Hoek 52 52Brian Hill 37 37René Kottman 37 37Rob Ruijter 37 37Birgitta Stymne Göransson 37 37Total 200 200L. Shares held by the Management Board and Supervisory BoardShares held by the Management BoardWavin shares held by members of the Management Board as per 31 December 2010 were as follows:OUTSTANDING2009*TRANSACTIONS2010*CHANGES INMANAGEMENTBOARDOUTSTANDING2010MARKET VALUE31 DECEMBER2010SHARES SHARES SHARES SHARES (€)Henk ten Hove 118,238 1,324 — 119,562 1,363,007Pim Oomens 186,168 2,561 — 188,729 2,151,511Maarten Roef** — — 31,382 31,382 357,755Philip Houben 247,451 (3,220) — 244,231 2,784,233Andy Taylor 67,750 — (67,750) — —Total 619,607 665 (36,368) 583,904 6,656,506* Outstanding shares 2009 and transactions have been adjusted for comparison reason to reflect the effect of the reverse stock split.** The appointment of Maarten Roef as member of the Management Board is subject to approval of shareholders at the AGM planned for 27 April 2011.The transactions of the members of the Management Board can include the purchase of shares in relation to the Long TermIncentive Plan, as well as individual transactions.The number of shares with unrestricted control held by the Management Board and the related market value can be specifi edas follows:2010 2009SHARES (€) SHARES SHARESADJUSTED*(€)Henk ten Hove 114,101 1,300,751 912,779 114,101 1,597,363Pim Oomens 182,077 2,075,678 1,456,620 182,077 2,549,085Maarten Roef** 25,763 293,698 — — —Philip Houben 239,825 2,734,005 1,958,607 239,825 3,427,562Andy Taylor — — 542,000 67,750 948,500Total 561,766 6,404,132 4,870,006 603,753 8,522,510* Shares 2009 have been adjusted for comparison reason to reflect the effect of the reverse stock split.** The appointment of Maarten Roef as member of the Management Board is subject to approval of shareholders at the AGM planned for 27 April 2011.

Wavin Annual Report 2010 | page 139Shares held by the Supervisory BoardWavin shares held by the members of the Supervisory Board as per 31 December 2010 were as follows:OUTSTANDING2009*TRANSACTIONS2010OUTSTANDING2010MARKET VALUE31 DECEMBER 2010SHARES SHARES SHARES (€)Paul van den Hoek 33,839 – 33,839 385,765Brian Hill 16,922 – 16,922 192,911Total 50,761 – 50,761 578,676* Outstanding shares 2009 and transactions have been adjusted for comparison reason to reflect the effect of the reverse stock split.The number of shares with unrestricted control held by members of the Supervisory Board and the related market value per31 December can be specifi ed as follows:2010 2009*SHARES (€) SHARES (€)Paul van den Hoek 33,839 385,765 33,839 473,716Brian Hill 16,922 192,911 16,922 236,871Total 50,761 578,676 50,761 710,587* Shares 2009 have been adjusted for comparison reason to reflect the effect of the reverse stock split.M. Auditor remunerationThe fees for the audit of the annual report due to the Company’s external auditor, PricewaterhouseCoopers Accountants N.V.in The Netherlands, and other PricewaterhouseCoopers member fi rms amounted to € 0.4 million for 2010.Up to and including 2009 KPMG Accountants N.V. in the Netherlands was the Company’s external auditor. The fee for theaudit of the annual report and other member fi rms amounted to € 0.8 million in 2009. The fees as included underadministration and general expenses in the income statement can be specifi ed as follows:(€ x 1,000) 2010 2009IN THENETHERLANDSNETWORKOUTSIDE THENETHERLANDSTOTALIN THENETHERLANDSNETWORKOUTSIDE THENETHERLANDSTOTALAudit of the annual report 148 255 403 347 470 817Other audit assignments – 221 221 24 339 363Tax services – 111 111 – 430 430Other non-audit activities 72 61 133 393 759 1.152Total 220 648 868 764 1.998 2.762The expenses for other non-audit activities in 2009 include services related to the refi nancing of the Company.

Wavin Annual Report 2010 | page 140The members of the Management Board have signed the Financial Statements pursuant to their statutory obligations underclause 2:101 sub 2 Dutch Civil Code and clause 5:25c sub 2 Financial Markets Supervision Act.Zwolle, 1 March 2010MANAGEMENT BOARDSUPERVISORY BOARDH. ten Hove P.C. van den Hoek (Chairman)W.H.J.C.M. OomensB.G. Hill (Vice-Chairman)R.H.P.W. KottmanR.A. RuijterB. Stymne Göransson

Wavin Annual Report 2010 | page 141OtherinformationAppropriation of result as provided for by the Articles of AssociationAllocations of profitArticle 22.1. The company may make distributions to the shareholders and other persons entitled to the distributable profi ts only to theextent that the company’s shareholders’ equity exceeds the sum of the paid-in capital and the reserves which it is required bylaw to maintain.2. If the adopted profi t and loss account shows a profi t the Management Board shall determine, subject to prior approval ofthe Supervisory Board, which part of the profi ts shall be reserved.3. To the charge of the profi t, as this appears from the adopted profi t and loss account, to the extent not reserved inaccordance with paragraph 2 of this article:• fi rst of all, on the preferred shares a dividend will be distributed to the amount of a percentage on the amount paid on thoseshares, which equals twelve months ‘EURIBOR’, as published by De Nederlandsche Bank N.V. – calculated according to thenumber of days the rate applied – during the fi nancial year to which the distribution relates, increased by two percentagepoints. If and to the extent that the profi t is not suffi cient to fully make a distribution meant afore in this paragraph, the defi citshall be paid from the reserves. In case of cancellation with repayment of preferred shares, on the day of repayment adistribution shall be made on the cancelled preference shares, which distribution shall be calculated to the extent possible inaccordance with the provision referred to above and with regard to the current fi nancial year to be calculated time wise overthe period from the fi rst day of the current fi nancial year, or if the preferred shares have been issued after such day, as fromthe day of issue, until the day of repayment without prejudice to the provisions of article 2:105 paragraph 4 Dutch Civil Code.In the event that in an fi nancial year the profi t or the distributable reserves (as the case may be) are not suffi cient to make thedistributions meant above in this article, the provisions above shall apply over the following fi nancial years until the defi cit hasbeen cleared;• secondly, the part of the profi t remaining after application of the fi rst bullet shall be at the disposaI of the general meeting.4. After the approval of the Supervisory Board, the Management Board may make interim distributions only to the extent thatthe requirements set forth in paragraph 1 above are satisfi ed as apparent from an (interim) fi nancial statement drawn up inaccordance with the law.5. After the approval of the Supervisory Board, the Management Board may decide that a distribution on shares is not madeentirely or partly in cash, but rather in shares in the company.6. On the recommendation of the Management Board, subject to the approval of the Supervisory Board, the general meetingmay decide to make payments to holders of shares from the distributable part of the shareholders’ equity.7. Any claim a shareholder may have to a distribution shall lapse after fi ve years, to be computed from the day on which sucha distribution becomes payable.Proposal for profit allocationWith observance of article 22, of the Articles of Association, it is proposed that for 2010 no dividend on ordinary shares willbe distributed.

Wavin Annual Report 2010 | page 142Independent auditors’ reportTo the General Meeting of Shareholders of Wavin N.V.Report on the financial statementsWe have audited the accompanying fi nancial statements 2010 of Wavin N.V., Zwolle as set out on pages 73 to 140 of theAnnual Report. The fi nancial statements include the consolidated fi nancial statements and the company fi nancial statements.The consolidated fi nancial statements comprise the consolidated balance sheet as at 31 December 2010, the consolidatedincome statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equityand the consolidated statement of cash fl ows for the year then ended and the notes, comprising a summary of signifi cantaccounting policies and other explanatory information. The company fi nancial statements comprise the company balancesheet as at 31 December 2010, the company income statement for the year then ended and the notes, comprising asummary of accounting policies and other explanatory information.Management Board’s responsibilityThe Management Board is responsible for the preparation and fair presentation of these fi nancial statements in accordancewith International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the DutchCivil Code, and for the preparation of the Management Board Report as set out on pages 16 to 48 in accordance with Part 9of Book 2 of the Dutch Civil Code. Furthermore, the Management Board is responsible for such internal control as itdetermines is necessary to enable the preparation of the fi nancial statements that are free from material misstatement,whether due to fraud or error.Auditor’s responsibilityOur responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit inaccordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are freefrom material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancialstatements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of materialmisstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the company’s preparation and fair presentation of the fi nancial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by the Management Board, as well as evaluating the overallpresentation of the fi nancial statements.We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.Opinion with respect to the consolidated financial statementsIn our opinion, the consolidated fi nancial statements as set out on pages 73 to 128 give a true and fair view of the fi nancialposition of Wavin N.V. as at 31 December 2010, and of its result and its cash fl ows for the year then ended in accordancewith International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the DutchCivil Code.Opinion with respect to the company financial statementsIn our opinion, the company fi nancial statements as set out on pages 129 to 140 give a true and fair view of the fi nancialposition of Wavin N.V. as at 31 December 2010, and of its result for the year then ended in accordance with Part 9 of Book 2of the Dutch Civil Code.

Wavin Annual Report 2010 | page 143Report on other legal and regulatory requirementsPursuant to the legal requirement under Section 2: 393 sub 5 at e and f of the Dutch Civil Code, we have no defi ciencies toreport as a result of our examination whether the Management Board Report as set out on pages 16 to 48, to the extent wecan assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as requiredunder Section 2: 392 sub 1 at b-h has been annexed. Further we report that the Management Board Report, to the extentwe can assess, is consistent with the fi nancial statements as required by Section 2: 391 sub 4 of the Dutch Civil Code.Amsterdam, 1 March 2011PricewaterhouseCoopers Accountants N.V.Original has been signed by drs. P.C. Dams RA

Wavin Annual Report 2010 | page 144Wavin Management per 31 December 2010SUPERVISORY BOARDPaul van den Hoek (Chairman) – Dutch (1939)Appointed 1999, current term ends 2011Brian Hill (Vice-Chairman) – Irish (1944)Appointed 2005, current term ends 2013René Kottman – Dutch (1945)Appointed 2006, current term ends 2014Rob Ruijter – Dutch (1951)Appointed 2007, current term ends 2012Birgitta Stymne Göransson – Swedish (1957)Appointed 2007, current term ends 2012MANAGEMENT BOARDHenk ten Hove, President & CEO – Dutch (1952)Appointed 2010, current term ends 2015 (Member of the Management Board of Wavin B.V. since 1999)Pim Oomens, Executive Vice President & CFO – Dutch (1956)Appointed 2005, current term ends 2010 (Member of the Management Board of Wavin B.V. since 2004)Maarten Roef*, Executive Vice President – Dutch (1964)* Appointment is subject to approval of shareholders at the AGM planned for 27 April 2011.For more information, please see chapter Corporate Governance on page 32 – 39.

Wavin Annual Report 2010 | page 145Principal direct and indirect participationsHead OfficeWavin GroupStationsplein 3, 8011 CWPostbus 173, 8000 AD ZwolleThe Netherlandswww.wavin.comThe NetherlandsWavin N.V., ZwolleWavin B.V., ZwolleWavin Nederland B.V., Hardenbergwww.wavin.nlWavin Diensten B.V., HardenbergDe Hoeve Kunststofrecycling B.V.,Hardenberg (50%)Wavin Overseas B.V., Dedemsvaartwww.wavinoverseas.comWavin Technology & Innovation B.V.,DedemsvaartWavin Finance B.V., ZwolleWavin Staf B.V., ZwolleWavin Assurantie B.V., ZwolleEuroCeramic B.V., Belfeldwww.euroceramic.nlBelgiumWavin Belgium N.V., Aalterwww.wavin.beBulgariaWavin Bulgaria EOOD, Sofi awww.wavin.bgChinaFoshan Hepworth Pipe Company Ltd.,Foshanwww.wavin.cnCroatiaWavin d o.o., Sesvete (Zagreb)www.wavin.hrCzech RepublicWavin Ekoplastik s.r.o., Kostelec nadLabemwww.wavin.czWavin Osma s.r.o., Kostelec nad Labemwww.wavin-osma.czDenmarkNordisk Wavin A/S, Hammelwww.wavin.dkEstoniaWavin Estonia OU, Sauewww.wavin.eeFinlandWavin-Labko Oy, Kangasalawww.wavin.fiFranceWavin France S.A.S., Varennes-sur-Allier,Sorgues, Sully-sur-Loire, Haute Goulainewww.wavin.frKulker S.A.S., Sully-sur-Loirewww.europe-geothermie.comGermanyWavin GmbH, Twist, Westeregelnwww.wavin.deHungaryWavin Hungary Kft., Zsámbékwww.wavin.huIrelandWavin Ireland Ltd., Balbriggan (Dublin)www.wavin.ieItalyWavin Italia SpA, S. Maria Maddalenawww.wavin.itChemidro SpA, Udinewww.chemidro.comLatviaWavin Latvia SIA, Rigawww.wavin.lvLithuaniaUAB Wavin Baltic, Vilniuswww.wavin.ltNorwayNorsk Wavin A/S, Fjellhamarwww.wavin.noWavin Polyfemos AS, AltaPolandWavin Metalplast-BUK Sp.z.o.o., Buk(99%)www.wavin.plArot Polska Sp.z.o.o., Lesznowww.arot.plMPC Sp.z.o.o., Strzelin (51%)www.mpc.plRomaniaWavin Romania s.r.l., Bucharestwww.wavin.roRussiaOOO Wavin Rus, Moscowcowwww.wavin.ruSerbiaWavin Balkan d o.o., BelgradeSlovak RepublicWavin Slovakia spol s.r.o., Bànovce nadBebravouSpainAquatecnic Sistemas S.A., Madrid (65%)www.aquatecnic.esSwedenAB Svenska Wavin, Eskilstunawww.wavin.seSwitzerlandGeorg Fischer Wavin AG,Schaffhausen (40%)TurkeyPilsa Plastik Sanayi A.S., Adanawww.wavinturkey.comwww.pilsa.com.trUnited KingdomWavin Ltd., Sheffi eldwww.wavin.co.ukWarmafloor (GB) Ltd., Sheffi eldwww.warmafl oor.co.ukUkraineWavin Ukrain O.O.O.T.O.V., Kievwww.wavin.ua100% unless stated otherwise.The locations mentioned are the main places of business of the companies concerned.Based on art. 363 sub 3, Book 2 of the Dutch Civil Code, some participations of negligible importance have been omitted. Addresses of these offi ces can be foundon www.wavin.com.

Wavin Annual Report 2010 | page 146AdditionalinformationSummary of last five years (€ x million unless otherwise stated)2010 2009 2008 2007 2006Consolidated balance sheetProperty, plant & equipment 344.3 349.8 367.0 378.5 375.1Intangible assets 488.1 485.1 480.7 505.1 510.9Financial non-current assets 31.5 30.3 32.0 34.7 28.6Total non-current assets 863.9 865.2 879.7 918.3 914.6Inventories 171.9 146.0 172.1 214.1 200.6Trade and other receivables 269.3 245.1 275.0 339.6 332.0Cash and cash equivalents 55.8 58.6 49.0 19.5 17.0Total current assets 497.0 449.7 496.1 573.2 549.6Total assets 1,360.9 1,314.9 1,375.8 1,491.5 1,464.2Total equity attributable to equity holders of the Company 570.7 551.7 329.0 363.2 295.4Non-controlling interest 8.2 6.9 5.2 6.6 4.5Total equity 578.9 558.6 334.2 369.8 299.9LiabilitiesInterest-bearing loans and borrowings 295.4 285.9 501.2 515.8 596.9Employee benefi ts 13.6 12.1 15.6 21.9 29.5Provisions 17.5 14.7 13.2 16.2 18.4Other non-current liabilities 108.3 122.1 121.6 124.0 127.6Total non-current liabilities 434.8 434.8 651.6 677.9 772.4Bank overdrafts 16.5 9.5 8.7 46.1 17.9Employee benefi ts 0.5 2.6 3.2 2.4 0.5Provisions 8.8 9.1 7.6 5.7 7.4Other current liabilities 321.4 300.3 370.5 389.6 366.1Total current liabilities 347.2 321.5 390.0 443.8 391.9Total equity and liabilities 1,360.9 1,314.9 1,375.8 1,491.5 1,464.2Balance sheet ratiosNet capital employed 851.4 820.2 815.0 926.3 901.3Debt to equity ratio 0.4 0.4 1.4 1.5 2.0Key data per shareReported number of shares outstanding (× 1,000) 50,782 406,257 80,769 78,766 77,651Adjusted number of shares outstanding due to the rights issue (× 1,000) — — 197,884 192,977 190,245Adj. number of shares outstanding due to the reverse stock split (× 1,000) — 50,782 24,736 24,122 23,781Result attributable to equity holders of the Company 5.8 0.2 32.1 91.2 71.7Dividend (2010 proposal) (€) — — 0.16 0.46 0.35Share price at year end (€) 11.40 1.75 2.33 9.12 14.80Adjusted share price at year end due to the rights issue (€) — — 0.95 3.71 6.03Adjusted share price at year end due to the reverse stock split (€) — 14.00 7.59 29.72 48.23

Wavin Annual Report 2010 | page 1472010 2009 2008 2007 2006Consolidated income statementContinuing operationsRevenue including discontinued operations 1,231.3 1,159.6 1,581.2 1,618.5 1,501.5Revenue discontinued operations – – – (3.8) (6.1)Revenue contuinuing operations 1,231.3 1,159.6 1,581.2 1,614.7 1,495.4Cost of sales (939.0) (862.8) (1,192.7) (1,171.0) (1,086.2)Gross profit 292.3 296.8 388.5 443.7 409.2Other operating expenses (248.0) (249.3) (294.9) (291.2) (272.4)Result from operating activities before non-recurring operational result 44.3 47.5 93.6 152.5 136.8Non-recurring operational result (6.4) (14.6) (10.3) (2.7) (16.6)Result from operating activities 37.9 32.9 83.3 149.8 120.2Net fi nance costs (34.1) (35.4) (45.8) (35.0) (84.1)Share of profi t of associates 2.2 3.1 5.2 4.7 3.3Profi t on sale of associates – – – – 39.0Profit before income tax 6.0 0.6 42.7 119.5 78.4Income tax income (expenses) 1.1 1.2 (10.6) (28.0) (6.0)Profit from continuing operations 7.1 1.8 32.1 91.5 72.4Discontinued operationsProfi t (loss) from discontinued operations (net of income tax) – – – 1.5 1.0Profit for the period 7.1 1.8 32.1 93.0 73.4Other key financialsEbitda 104.1 110.4 161.0 212.1 196.3Ebit 37.9 32.9 83.3 149.8 120.2Depreciation 47.1 50.1 54.2 51.6 50.8Ratios continuing operationsCash generated from operating activities 59.3 86.5 261.9 192.7 181.4Ebitda as percentage of revenue (%) 8.5% 9.5% 10.2% 13.1% 13.1%OtherAverage full time equivalents (×1) 6,602 6,709 7,867 7,308 7,069Number of employees at 31 December (×1) 6,089 6,266 6,963 6,794 6,704

Wavin Annual Report 2010 | page 148Glossary of termsIn this annual report defi nitions are as follows:Operating profitTotal result from operating activities before interest and tax.Like-for-likeChange in total revenue at constant currency less revenues acquired and/or divested companies in the year.EbitdaOperating result before depreciation, amortisation and non-recurring items.Net investmentsInvestments paid less proceeds from sold property, plant & equipment andintangible assets.Net DebtCurrent and non-current interest-bearing loans and borrowings includingbank overdrafts less cash and cash equivalents.Net Capital EmployedTotal assets less cash and cash equivalents less investments in associatesless other investments less deferred tax liabilities less current liabilities(trade and other liabilities, income tax payable and liabilities classifi ed asheld-for-sale) less current provisions and current employee benefi ts.Return on average Net Capital EmployedRecurring result from operating activities divided by average Net CapitalEmployed.Debt / Equity ratioNet Debt divided by Total Equity.Interest coverage ratioResult from operating activities before depreciation, amortisation,non-recurring restructuring expenses and non-recurring gains or losses onthe sale of fi xed assets, including income of associates and excludingprofi t attributable to non-controlling interest, divided by the net interestexpenses, including all interest and other fi nancing charges in the nature ofinterest.Leverage ratioTotal net debt adjusted for the 10 quarters rolling cash out with respect torestructuring expenses divided by result from operating activities beforedepreciation, amortisation, non-recurring restructuring expenses andnon-recurring gains or losses on the sale of fi xed assets, including incomeof associates and excluding profi t attributable to non-controlling interest.Innovation rateAnnual revenue generated for fi ve years after the related productintroduction by an operating company divided by the total revenue realizedwith sales of goods.Service levelNumber of complete sales orders delivered on time in full to externalcustomers, at the agreed date with the external customer, divided by thetotal number of sales orders to external customers.Greenhouse Gas EmissionsKilogram of gasses as defi ned by the Kyoto Protocol that are emitted tothe atmosphere and contribute to the greenhouse effect per ton of fi nishedproducts produced.WorkforceTotal Full Time Equivalents (FTE) including own personnel and temporarypersonnel per year-end.HeadcountNumber of employees on the payroll.Lost time incident frequencyNumber of lost time incidents per million hours worked.

ColophonPublished byWavin N.V.Concept and realisationC&F Report Amsterdam B.V.PhotographyWavinImage on page 24 courtesy of CityLifeWavin has endeavoured to fulfi l all legalrequirements related to copyright.Anyone who, despite this, is of theopinion that other copyright regulationscould be applicable should contactWavin.ContactPostbus 1738000 AD Zwolle+31 (0)38 – 429 49 11info@wavin.comwww.wavin.comCautionary note regarding forward-looking statementsThis announcement contains forward-looking statements. Forward-looking statements are statementsthat are not based on historical fact, including statements about our beliefs and expectations. Anystatement in this announcement that expresses or implies our intentions, beliefs, expectations orpredictions (and the assumptions underlying them) is a forward-looking statement. Such statementsare based on plans, estimates and projections as currently available to the management of Wavin.Forward-looking statements therefore speak only as of the date they are made and we assume noobligation to publicly update any of them in the light of new information or future events.

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