In cases where the effect of the time value of money is material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The discount rate used is based on swap rates for various terms, increased by 75 to 100 basis points depending on those terms. The balance of provisions measured at present value increased by €4 million in 2008 in view of the passage of time and changes in the discount rate.

The provisions for restructuring costs and termination benefits mainly relate to the costs of redundancy schemes connected to the dismissal and transfer of employees and costs of termination of contracts. These provisions have an average life of 1 to 3 years.

The provisions for environmental costs relate to soil clean-up obligations, among other things. These provisions have an average life of more than 10 years.

Several items have been combined under Other provisions, for example obligations ensuing from future drilling-platform decommissioning and site restoration and expenses relating to claims. These provisions have an average life of 5 to 10 years.

The total of non-current and current provisions increased by €11 million. This is the balance of the following changes:

The other changes included in Other provisions relate to revision of the costs for future drilling-platform decommissioning and site restoration.

The additions to the Provisions for restructuring costs and termination benefits mainly relate to expenditures for restructuring the Citric Acid activities, expenditures for the closure of the DSM Agro production site in IJmuiden (Netherlands) and to the structural cost-saving actions to strengthen profitability and future competiveness at DSM Pharmaceutical Products, DSM Anti Infectives, DSM Engineering Plastics, DSM Resins and DSM Industrial Services. The withdrawal from this provision concerns expenditure related to restructuring activitities at DSM Nutritional Products, DSM Food Specialties, DSM Pharmaceutical Products, DSM Resins and DSM Industrial Services (Copernicus project).

The addition to the environmental provision mainly relates to expenditures for soil cleaning at DSM Pharmaceutical Products.

The additions to the Other provisions mainly relate to a provision for future drilling-platform decommissioning and site restoration. The withdrawal from this provision relates to expenditures regarding claims at DSM Nutritional Products and DSM Elastomers.