Report of the Supervisory Board

Supervision of the Company

The Supervisory Board is pleased to report on its activities in 2005 including its supervision of the policies pursued by the Board of Management and the general state of affairs within Vedior.

In the year under review the Supervisory Board performed its duties in close cooperation with the Board of Management, with which it meets frequently both formally and informally. In 2005, the Supervisory Board held nine formal meetings, eight of which were held with the Board of Management. The full Supervisory Board participated in all meetings held in 2005. By way of frequent informal consultation in between the regular meetings with the Board of Management, the Supervisory Board, and particularly its Chairman, endeavours to remain well informed about the general state of affairs within the Company in order to offer the Board of Management prompt and constructive advice. The Chairman of the Supervisory Board and the Chief Executive meet on a monthly basis.

The main topics discussed at the meetings in 2005, were:

	Financial results and performance: the 2004 annual results, the financial statements as at 31 December 2004, the 2004 annual report and the quarterly 2005 results. The discussion of the annual and quarterly results is based on a financial report presented by the Chief Financial Officer and the operational reports given by the Chief Executive and other members of the Board of Management. This gives the Supervisory Board an overview of the general state of affairs and the financial position of the Company as well as insight into the development of results and markets within specific geographic areas. It also allows the Supervisory Board to concentrate in greater detail on the Company’s development and measures taken in specific countries in response to changing economic or market conditions.
	Strategy: the progress on strategic objectives and business development, including organic initiatives, acquisitions and disposals.
	The allocation of restricted shares to the Board of Management under the Group share plans and the Company’s policy regarding transactions in Vedior shares and options.
	The Company’s capital structure, including the proposal to redeem the preference shares A (effective July 2005) and B (effective July 2007).
	The preparation and evaluation of the Annual General Meeting of shareholders, held on 29 April 2005.
	Corporate governance, including the assessment of compliance with the Dutch corporate governance code.
	Risk management, following the broad risk assessment exercise conducted within the Group (further information can be found on this page).
	The results and follow-up of the Group Employee Satisfaction Survey.
	Financial trends in the staffing industry.
	The budget for 2006.
	The issues reported by the Chairman of the Audit Committee following each regular Audit Committee meeting, such as internal risk management and control systems, the provision of financial information by the Company, compliance with any recommendations and observations from the external auditor, the policy on tax planning, the relations with the external auditor, the financing of the Company and the application of information and communication technology.

The Supervisory Board discussed the composition, performance and remuneration of the Board of Management and its individual members in their absence, as well as its own composition and performance.

Composition of the Supervisory Board

The composition of the Supervisory Board remained unaltered in 2005. The Annual General Meeting, held on 29 April 2005, approved the proposal of the Supervisory Board to reappoint Mr Sinninghe Damsté, who retired in accordance with the schedule drawn up by the Supervisory Board. Important considerations in this proposal were his valuable contribution to the Supervisory Board, particularly its Audit Committee, and his financial knowledge and experience, especially at an international level.

In order to ensure that no more than one Supervisory Director should be (re)appointed at the same time, the following retirement schedule has been agreed:

Ms Kaminsky will retire at the next Annual General Meeting to be held on 28 April 2006 and is not seeking reappointment. The Supervisory Board would like to express its gratitude to Ms Kaminsky for her contribution to the Supervisory Board and Vedior during the past four years.

The Supervisory Board intends to nominate Mr Henri Giscard d’Estaing for appointment at this meeting. Mr Giscard d’Estaing will replace Ms Kaminsky as a member of the Supervisory Board and its Remuneration and Appointment Committee. Mr Giscard d’Estaing (age 49, French citizen) is Chairman of the Board and Chief Executive Officer of Club Méditerranée, positions he has held since December 2002. Before joining Club Méditerranée in 1997, he held various management positions at Danone Group and Cofrema. He is a graduate of the Paris Institute of Political Studies and holds a degree in economics. He is also a member of the Board of Directors of Groupe Casino, Guichard-Perrachon. This proposal for appointment to the Supervisory Board is considered on the basis of its profile as referred to on this page.

Independence of members of the Supervisory Board

The Supervisory Board attaches great importance to the independence of its members. As a rule, all members of the Supervisory Board, with the exception of not more than one, should be independent within the meaning of article 3, paragraph 7 of the regulations of the Supervisory Board, which article is in line with the relevant provision in the Dutch corporate governance code. Pursuant to the same regulations, a Supervisory Director must also promptly report any conflict of interest to the Chairman of the Supervisory Board. Any conflict of interest between Vedior and any member of the Supervisory Board must be avoided, if at all possible. Every professional relationship between a Supervisory Director and the Company must be disclosed in the notes to the financial statements. In 2005, the Supervisory Board complied with these provisions. As stated in the notes to the 2005 financial statements on this page, Ms Kaminsky receives additional remuneration for services provided to Vedior subsidiaries in the United States.

The Chairman and members of the Supervisory Board were not granted any options or shares. Mr Angenent and Ms Kaminsky personally hold depositary receipts of ordinary shares in the Company (as stated on this page).

Report from the Audit Committee

The Supervisory Board has established an Audit Committee, which operates by virtue of a mandate from the full Supervisory Board, and reports its conclusions and recommendations to the Supervisory Board immediately following its Committee meetings.

The Audit Committee currently consists of Mr Sinninghe Damsté as Chairman and Mr Angenent as a member. A third member shall be appointed should the size and composition of the Supervisory Board so allow.

In 2005, the Audit Committee held four meetings, one of which was held partly without any members of the Board of Management being present. To be fully informed about and prepared for all relevant issues, the Chairman of the Audit Committee always meets with the Chief Financial Officer as well as with the external auditor prior to the quarterly meetings of the Audit Committee.

The main topics discussed at the meetings that were held in 2005, were:

	Financial results and performance: the 2004 annual results, the financial statements as at 31 December 2004, the 2004 annual report and the quarterly 2005 results.
	The external auditor’s report for 2004. The follow up of the recom­-men­dations of the external auditor, included in the memoran­dum on accounting procedures and internal controls issued in October 2004, was discussed later in the year.
	The external auditor’s client service plan relating to the audit approach and audit planning for the 2005 financial year. In this respect, the Audit Committee already discussed in October 2005 the auditor’s first observations leading to the 2005 memorandum on accounting procedures and internal controls, which was submitted to the Audit Committee for discussion on 1 February 2006.
	The external auditor’s performance, fees, independence and client satisfaction.
	Risk management: preliminary and final key-findings of the Group wide risk management review, including follow-up actions, compliance with corporate policies and implementation of risk management processes.
	Group tax management, as presented by the Group’s tax director.
	Group information technology management, as presented by the Group’s e-business & corporate affairs director.
	Any material litigation.

At a meeting held in the absence of members of the Board of Management, the Committee met with the external auditor to discuss the quality of financial reporting and cooperation with Vedior’s financial departments.