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Registration Document 2009

President's message

Ladies and Gentlemen, Dear Shareholder, 2009 will go down in the history of Naturex group as a year of success:

• commercial success first of all since, despite the economic decline, our group has achieved organic growth of over 5.5% in constant currencies by developing each of our different business lines;

• financial success next, with the group's operating margin improving once again (12.8% of revenue), a record net profit of € 5.2 million and even stronger financials thanks notably to the € 17.3 million capital increase we carried out in February 2009 despite the financial crisis. On that note, my thanks obviously go out to all of our shareholders that took part in the operation for the confidence and trust that they have placed in the future of our group;

• strategic success finally and above all as, with the acquisition of the Ingredients Division of Spanish group, Natraceutical, we have established ourselves as the global leader in specialty plant-based natural ingredients. Today, Naturex ranks as a key player on the fast-growing market of natural products with:

• 3 product ranges that span the food, health and cosmetics sectors; • € 186 million in pro-forma revenues in 2009; • a 900-strong workforce around the world; • 11 production facilities; • 15 sales offices on all 5 continents.

Backed by this new dimension, Naturex has entered another extremely promising phase in its development. Our priority for 2010 will be the successful integration of the Ingredients Division of Natraceutical group purchased at the end of 2009 - something we are very confident about given Naturex's proven ability to integrate its acquisitions. 2010 will be a year of major growth for our new structure during which we will work to improve its operating margin. I look forward to seeing you at our Annual General Meeting on June 30, when your Board of Directors will propose an increase of 10% in dividends per share to € 0.11. As an expression of our gratitude, our loyal shareholders will also be given the option to receive their dividend in the form of shares at a discount price on their reference market value. Jacques Dikansky President and Chief Executive Officer

General Contents

Chapter 1 Information concerning the issuer 6 Presentation of Naturex 8

Naturex business lines: a high value-added 11

Chapter 2 Management Report 20 Group activity and results 22

Risks and commitments 41

Capital and Executive Officers 47

Notes to the Management Report 66

President’s Report on Internal Control procedures 71

Statutory Auditors’ Report on the report prepared by the President on internal control 79

Chapter 3 Consolidated financial statements and notes 82 Consolidated financial statements 83

Notes to the consolidated financial statements 90

Statutory Auditors’ Report on the consolidated financial statements 143

Chapter 4 Parent financial statements and notes 146 Parent financial statements 147

Notes to the parent financial statements 149

Statutory Auditors’ Report on the financial statements 169

Special report of the Statutory Auditors on regulated agreements 171

Chapter 5 Other general information 174 Information concerning the issuer 176

Global Pact and Quality Approach 180

Legal structure 182

Related party transactions 183

Stock market performance 186

Liquidity contract 187

Allocation of stock options 188

Annual registration document 189

Person responsible for the registration document 192

Person responsible for the information provided in the registration document 194

Chapter 6 Cross-reference table 195

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Chapter 1

Information concerning the issuer

Chapter 1 – Information concerning the issuer

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Contents

1 Presentation of Naturex ....................................................................................... 8

1.1 History ................................................................................................................................................. 8

1.2 Group companies ................................................................................................................................ 8

1.3 Recent developments .......................................................................................................................... 9

1.4 Outlook .............................................................................................................................................. 10

2 Naturex business lines: a high value-added ..........................................................11

2.1 Activities ............................................................................................................................................ 11

2.2 Product offering and target markets ................................................................................................. 12

2.3 High-performance industrial facilities ............................................................................................... 16

2.4 Human Resources .............................................................................................................................. 18


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1 Presentation of Naturex

1.1 History

1992: Jacques Dikansky creates Naturex. The company's corporate purpose is the production of plant extracts with flavoring, coloring and preserving properties for the food and flavoring industries. Factories in operation: Avignon in France and Kenitra in Morocco. 1996: Naturex is listed on the stock market (Paris - NRX). 1997: Naturex expands to the nutraceutical market. Opening of a US subsidiary in Mamaroneck, New York. Extension and relocation of the factory in Morocco to Casablanca. 2002: Acquisition of US company, Brucia Plant Extracts Inc. The acquisition enables Naturex to enhance its offer on the nutraceutical market and strengthen its position on the US market. 2004: Acquisition of a major rosemary plant extracts business which is held jointly by US companies RFI Ingredients and Hauser. With two major brands and three patents for its rosemary extracts activities, Naturex becomes a leading player in natural antioxidants. 2005: Acquisition of Pure World Inc. The US company produces plant extracts for the food, nutraceutical, pharmaceutical and cosmetics industries. Naturex now ranks alongside the leaders on the nutraceutical market thanks to its plant extract capacities which are amongst the largest in the world, and its state-of-the-art industrial facilities. 2007: Acquisition of Hammer Pharma and HP Botanicals, two Italian companies based in Milan. Hammer Pharma brings with it its invaluable expertise in pharmaceuticals. Acquisition of the US company, Chart Corporation, thereby enriching Naturex's offering for the flavoring and beverage industries. 2008: Acquisition of the “Actifs innovants” Division of French company, Berkem. Naturex acquires a line of ingredients with clinically-proven ingredients. Opening of a Chinese subsidiary in Shanghai. This new entity has a high-performance Quality Control laboratory devoted to the sourcing of raw materials. Opening of the Naturex foundation. 2009: Integration of the Ingredients Division of Spanish group, Natraceutical.

1.2 Group companies

At December 31, 2009, Naturex employed some 900 employees across 20 sites. Production sites:

- Avignon, France.


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- Birmingham, United Kingdom. - Bischofszell, Switzerland. - Bergdorf, Switzerland. - Casablanca, Morocco. - Milan, Italy. - Manaus, Brazil. - Shingle Springs, California, USA. - South Hackensack, New Jersey, USA. - Sydney, Australia. - Valencia, Spain.

Sales offices: Naturex has a global sales presence, employing over sixty salespeople across 15 offices. It sales teams are also relayed by local distributors in certain parts of the world. Its network enables the group to provide fast, flexible and effective solutions to match the needs of its clients.

- Birmingham, United Kingdom. - Avignon, France. - Bangkok, Thailand. - Bonn, Germany. - Bischofszell, Switzerland. - Brussels, Belgium. - Dubai, United Arab Emirates. - Milan, Italy. - Moscow, Russia. - Shanghai, China. - Singapore. - South Hackensack, New Jersey, USA. - Sydney, Australia. - Tokyo, Japan. - Valencia, Spain.

1.3 Recent developments

Naturex's most important development in 2009 was its integration of the Ingredients Division of Natraceutical group - an operation that has elevated the group to the position of world leader in specialty plant-based ingredients. Not only are there substantial synergies between the two entities, but the operation means that Naturex is also able to capitalize on increased industrial resources and a broader portfolio of products and target clients. Today, the group combines the expertise of Naturex – flavoring, coloring, antioxidant, nutraceutical, pharmaceutical and cosmetic ingredients – with the specialist activities of the Ingredients Division of Natraceutical - natural coloring agents, fruit and vegetable powders, pectins, functional ingredients, yeast and caffeine. Thanks to the operation, Naturex's production capacities are extremely high. Eleven industrial units around the world allow the group to optimize its procurement and production flows, giving it a major advantage over its competitors.


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From a commercial point of view, the group combines the strong geographical presence of Naturex in the US, with Natraceutical's extensive sales coverage across Europe, thereby balancing out the geographic breakdown in revenue: Europe has increased from 30% to 50%, the US has gone from 60% to 35% and, because it represents 20% of Natraceutical's revenue, the breakdown now includes Asia.

1.4 Outlook

1.4.1 Results

Naturex posted revenues of € 101.9 million in 2009, an increase of 9.4% on the previous year, and has set itself a growth target of between 5 and 10% for 2010 (like-for-like and in constant dollars). Operating income for 2009 amounted to € 13.1 million, accounting for 12.8% of revenues compared to 12.1% on December 31, 2008. The group's second target for the coming year is to improve its operating margin at comparable scope (pro-forma figures are given in Note 25 of the Notes to the consolidated financial statements) in order to achieve a 9.0% increase in pro-forma EBIT.

1.4.2 Development

Over the course of 2010, the group intends to pursue its dynamic growth in constant dollars by drawing on the synergies between the group's previous activities and the companies acquired at the end of the year, and through its strong expansion overseas as its new commercial entities take off.

1.4.3 Investments

Naturex's principal investments in 2009 focused on the optimization of its production resources in order to improve its productivity and profitability; the concrete application of the group's environmental policy via the construction of a wastewater treatment plant in Morocco; and the expansion of its offices and production sites, primarily in the United States and Italy. The group obviously also invested in its external growth with the acquisition of the Ingredients Division of Natraceutical described in the management report.


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2 Naturex business lines: a high value-added

2.1 Activities

Naturex provides natural ingredients for the food, flavoring, nutraceutical, pharmaceutical and cosmetics markets. The group handles each stage in their production, from the selection of raw materials to the processing of final ingredients.

2.1.1 Innovation

Research and Development is a strategic activity for Naturex. Its state-of-the-art laboratories enable it to develop new products and give it a capacity for innovation that affords it an important competitive edge. The mandate of its R&D teams is to devise innovative and high-performance natural ingredients. Working in close collaboration with the R&D departments of its clients and with university research centers around the world, Naturex creates new products to meet market needs. Thanks to its strong commitment to the field, the group's major technological innovations have resulted in several patents and are widely published in various scientific journals. Mastering the art of extraction means mastering the science of natural chemistry. It means being able to identify and extract the main agents contained in plants. Naturex tirelessly works to define new methods of analysis, set new standards, uncover previously unidentified agents and develop new production processes. It is one of the rare companies of its sector to own a nuclear magnetic resonance spectrometer which enables it to study product molecules, discover new molecules and in doing so offer its clients a unique range of extracts.

2.1.2 Sourcing

Naturex's major procurement capacities are what place it in a different league. A leading player in natural ingredients, it is constantly able to introduce new extracts to its markets thanks to its global sourcing program which gives it access to a broad spectrum of plants. Naturex's rigorous purchasing policy also sets it in a class of its own. Stringent control procedures for raw materials are vital in meeting its high quality standards, which is why its principal suppliers are audited on a regular basis. Naturex buys its raw materials directly from the best local producers. Working directly with owners and managers is important to ensure that the group gets the best selection of plants and the most for its money.


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For Naturex, its procurement process is a key factor in its business. Each delivery of raw materials is sampled and carefully analyzed. Exhaustive controls are carried out before materials enter the production cycle, and each batch of plants undergoes a battery of tests to ensure their purity.

2.1.3 Production

Naturex has eleven production sites strategically located on different continents. Its industrial facilities are constantly upgraded and developed to offer the best technical performance. The group has the largest extraction and drying machinery in the world which process thousands of tons of plant extracts each year. Its purification equipment allows for the production of fractioned and purified plant-derived compounds. Each year, automated roller compactors produce thousands of metric tons of dry granulated extracts with enhanced physical properties, such as density and particle size. Backed by its flexible resources and experienced staff, Naturex is able to provide custom formulations, and to adapt the physical and chemical properties of extracts (dispersibility and solubility) to suit the specific needs of industrial users.

2.1.4 Quality Control

Naturex has a rigorous quality policy at each of its production sites where strict controls are carried out to ensure the quality and perfect traceability of its products. The eleven production sites each have their own quality control laboratory, where tests are carried out at each stage of the manufacturing process. Plant extracts are standardized using strict quality controls to ensure their consistent composition, safety and potency. All extracts produced by Naturex undergo a comprehensive series of tests for identity and purity. The group's extremely sophisticated instruments guarantee very high-quality ingredients and include HPLC-MS, HPLC, PPSL, NMR, GC-MS, GC, ICP, ICP-MS, HPTLC, TLC, etc. Extracts are also tested to ensure compliance with the toughest hygiene and safety standards: microbiology, pesticides, heavy metals, GMOs.

2.2 Product offering and target markets

Naturex specializes in a large number of natural ingredients. Its offering is split according to three business lines which represent the group's three main sectors of activity. Their purpose is to develop custom product ranges for each of the group's target markets.

2.2.1 Food & Beverage

Naturex's Food & Beverage division specializes in the development of natural ingredients tailored to food and beverage applications. Its offer consists of four ranges of plant extracts to meet today's demand for natural flavoring, coloring, preservative and healthy ingredients.


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NNAATT ssttaabbiill®®

Today's consumers want innovative, convenient products that meet the very highest standards. While chemical additives are renowned to be cost-effective, terms such as "synthetic" or "chemical" have unquestionably negative connotations for consumers. Growing consumer interest for natural foods has made innovation a major priority in the food industry. NAT stabil® is made from natural ingredients which extend the shelf life of food and beverages with no adverse effects on their taste and appearance.

NNAATT aarroomm®®

Naturex's extensive experience in plant extraction allows it to faithfully preserve the flavors in each of the extracts in its NAT arom® range. Its in-depth expertise in natural ingredients means it is able to offer a rich palette of plant extracts, oleoresins and essential oils for flavor, food and beverage producers. Oleoresins, essential oils and hydroalcoholic extracts have a number of technical advantages over herbs, spices and plants. With flavor and aromas that remain constant over time, products can be stored for longer periods of time with minimal risk of microbial contamination. Naturex's expertise, from sourcing to extraction, enables users to reproduce original tastes and flavors in a wide variety of products. Naturex has structured its NAT arom® range into two separate categories:

o Hydroalcoholic extracts: a full "aromatic toolbox" to create natural aromas. o Essential oils and oleoresins: a line that faithfully invokes the personality and timeless scent

of Mediterranean herbs. Naturex develops flavoring extracts that are tailored to meet individual formulation needs. Products are available in powder or liquid form, both for essential oils and for oleoresins, which significantly extends their scope for use.

NNAATT ccoolloorr®®

Using the very best raw materials, Naturex has developed a range of custom formulations and improved the stability of natural pigments. The group's different test laboratories are able to adapt its coloring extracts for use in foods to suit process and product alike. Shade, solubility and stability are all adjusted to ensure extracts can compliment the final product and reproduce the exact color required. This range is constantly adapted to obtain all of nature's colors. In fact, the association of several coloring extracts is sometimes necessary in order to reproduce an exact shade. Combining its proven expertise and know-how in natural coloring agents, Naturex offers superior products with guaranteed stability, quality and performance.

NNAATT hheeaalltthhyy™™

NAT healthy™ is a line of plant extracts known for their beneficial health effects, with natural ingredients for functional foods.


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2.2.2 Nutrition & Health

This division specializes in the development of scientifically-proven plant extracts and ingredient concepts for nutraceutical applications and plants extracts for the pharmaceutical industry.

NNAATT lliiffee™™

NAT life™ is a range of patented, branded and scientifically-proven ingredients for dietary supplements and functional foods. The division's scientific approach is one of the keys to the success of NAT life™ ingredients. Each product in the range undergoes:

- in-depth documented research; - the development and precise technical characterization of extracts; - one or several clinical trials to prove their activity; - complementary in vitro, in vivo or clinical trials to assess their bioavailability, mechanism of

action and their safety. This major scientific research aside, NAT life™ products are genuine concepts with their own:

- project development; - legal procedures which include the compilation of European regulatory files; - patent processes and applications; - marketing as turnkey "concept ingredients" (registered brand, clear positioning,

information website for consumers, etc.).

PPoowweerrggrraappee®® is a natural ingredient devised to enhance performance and energy that is a unique concept backed by clinical trials.

SSvveettooll®® is a slimming ingredient with a fat burning action demonstrated in two clinical trials on humans. Derived from decaffeinated green coffee beans (Coffea canephora robusta P.), Svetol® has eight published works on its efficacy, mechanisms, bioavailability and special composition in active compounds.

CCyyrraaccooss®® is a traditional ingredient used in anti-stress formulas. Clinical tests have shown that 600mg per day for a period of only 2 weeks significantly reduces stress-related symptoms with no side-effects.

LLiiffeennooll®® is a patented female hop cone extract recognized for its action on menopause-related discomfort, especially hot flushes.

CCeerreebboooosstt™™ is a natural ingredient for cognitive performance and the first product to undergo a clinical study confirming the traditional use of American Ginseng for brain health.

NNAATT aaccttiivv®®

NAT activ® is a broad line of plant extracts known for their beneficial health effects. They are formulated for the nutraceutical market. The group uses sophisticated technologies to fully exploit their beneficial effects and in designing a wide selection of unparalleled ingredients.


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NNAATT pphhaarrmmaa™™

NAT pharma™ is a line of plant extracts with Active Substance Master Files (ASMFs) designed for pharmaceutical laboratories. Naturex is a major supplier of pharmaceutical ingredients across Europe and North America. Its factories are audited on a regular basis by international pharmaceutical laboratories. All European manufacturers of pharmaceutical products are required to comply with the Traditional Medicinal Products Directive (2004/24, EC). Naturex has compiled ASMFs for numerous plant extracts which allows for their use in pharmaceutical products such as traditional herbal remedies. Naturex's team of scientists (including pharmacists) is highly experienced in the identification of raw materials and lends their expertise in all registration procedures. The group is also qualified to draw up complete Electronic Common Technical Documents (eCTDs).

2.2.3 Personal Care

Naturex's Personal Care business line specializes in the development of scientifically-tested agents, traditional extracts and a range of additives for use in cosmetics.

NNAATT bbeeaauuttyy™™

NAT beauty™ is a line of innovative agents focused around three unique extracts with mechanisms of action and activity that have been proven by in vitro research: Macaderm™ is an anti-aging agent derived from Peruvian Maca. Hydravance™ is a moisturizing extract derived from the flower of orange trees. Effineo™ is a slimming active ingredient derived from decaffeinated green coffee. An innovative anti-aging active ingredient derived from Peruvian Maca, Macaderm™ is a skin-firming agent that enhances the cohesion and structure of the epidermis, making it ideal for use in cosmetics designed to prevent the formation of fine lines or wrinkles. Hydravance™ is a moisturizing extract derived from the flower of orange trees which improves absorption by balancing out the diffusion and evaporation of water. It is suitable for use in anti-aging cosmetics. Effineo™ is a slimming active ingredient derived from decaffeinated green coffee. Proven to have a significant effect on the reduction of the size of adipocytes, it is suitable for use in slimming products.

NNAATT sseelleecctt™™

NAT select™ is a range of extracts that have been specially formulated for use in cosmetics. Market leader in plant extraction and formulation, Naturex offers a full range of extracts for use in cosmetics developed by its team of scientists that are vastly experienced in the identification of raw materials. The Personal Care division has also developed a broad range of ingredients in different forms.


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NNAATT pprrootteecctt™™

NAT protect™ is a range of extracts with preservative properties that are classed in two categories: antioxidants under the Natrox™ brand, and extracts that prevent microbial contamination under the Efficlear™ brand. Naturex has developed a full range of natural ingredients to improve the quality of the formulation of cosmetic products. The group has built up a portfolio of niche products that each has their specific characteristics and dedicated teams.

2.2.4 Competition

NNaattuurreexx hhaass vvaarriioouuss ttyyppeess ooff ccoommppeettiittoorr::

- single product producers (SMEs or cooperatives) that focus on a given raw material to which they have privileged access (producers of marigold oleoresin in Ecuador for example);

- producers with a different core activity but that operate or maintain a secondary activity as a producer of raw materials (e.g. a flavorings specialist that produces natural molecules for its own consumption and that sells any excess production);

- companies (SMEs) which, like Naturex, position themselves on ranges that target specific product/customer combinations.

Naturex competitor names include: Kalsec, Chris Hansen, Frutarom, Sensient, Diana Naturals, Phytone, Indena and Martin Bauer.

2.3 High-performance industrial facilities

2.3.1 Facilities

The techniques used by Naturex require substantial investment to develop the necessary technological resources. The equipment is relatively "technical". Bio extraction requires large-scale equipment (given the fact that large quantities of raw materials are handled, with the actual proportion extracted varying from less than one in a thousand to a minor percentage), while the Ingredients Department requires smaller-scale resources. In both instances, equipment must meet the highest standards of quality. Naturex’s production facilities are spread over the group’s four production sites, namely: - the Avignon unit which comprises 3,772 m2 of buildings built on a 1.7 hectare site; - the units in the US which comprise 8,985 m2 of buildings built on a 2.2 hectare site; - the Casablanca unit in Morocco which comprises a building of 3,100 m2 built on a 1.2 hectare site; - the Italian unit which comprises 7,318 m2 of buildings built on a 2.3 hectare site. These modern, high-performance production facilities process 20,000 tons of plants each year.


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Thanks to the investments made, these facilities have enabled Naturex to multiply its revenues by 10 in just 10 years. Properly maintained, the equipment has an extremely long life and requires very few stoppages. Today, Naturex's production facilities also include the sophisticated manufacturing resources of Natraceutical's Ingredients Division. Together, they will enable the group to up its production, giving it a head start on its competitors, as much in terms of products as in terms of its innovation potential.

2.3.2 Overview of the processes

Naturex uses the 4 industrial extraction processes outlined below. Distillation of essential oils An average 100kg of plants is required to obtain 1kg of essential oils. The distillation of essential oils includes the following processes: (1) crushing; (2) enzymic reaction; (3) steam scavenging; (4) essential oils. Bio-enzymatic production An average of 6 tons of plants is required to obtain 1kg of natural molecules. Bio-enzymatic production includes the following processes: (1) plants; (2) crushing; (3) enzymic reaction; (4) distillation; (5) purification; (6) aromatic molecules. Extraction by solvent An average of 20kg of plants is required to obtain 1kg of extract: Extraction by solvent includes the following processes: (1) plants; (2) crushing; (3) washing with solvent (absorption of active ingredients); (4) vacuum evaporation (elimination of the solvent); (5) oleoresin (foods) or extracts (nutraceuticals). The need to validate the industrial processes and the manufacturing batches using sophisticated analytical resources (CGP, HPLC, etc.) adds to the complexities of this sector of activity from an industrial point of view. Formulation:


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Formulation includes the following processes: (1) homogenization; (2) drying; (3) atomization; (4) mixing; (5) granulation, etc.

2.4 Human Resources

On December 31, 2009, the group's headcount amounted to 851 employees. 186 in France, 173 in the United States, 137 in Switzerland, 96 in Morocco, 70 in Italy, 89 in England, 37 in Spain, 27 in Australia, 26 in Brazil, 6 in China and 5 in Russia. In 2009, Naturex's payroll increased 7%, with its proportion to revenue standing at 23.3% versus 23.9% in 2008.


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Chapter 2

Management Report

Chapter 2 – Management report

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Contents 1 Group activity and results ....................................................................................22

1.1 Highlights .......................................................................................................................................... 22

1.2 Analysis of the consolidated financial statements ............................................................................ 29

1.3 Other information on group activity ................................................................................................. 36

1.4 Events after closing ........................................................................................................................... 41

2 Risks and commitments .......................................................................................42

2.1 Legal risks .......................................................................................................................................... 42

2.2 Risk of price volatility......................................................................................................................... 42

2.3 Competitive risk ................................................................................................................................. 43

2.4 Risk of dependence on executives ..................................................................................................... 43

2.5 Political risk ....................................................................................................................................... 43

2.6 Client risk ........................................................................................................................................... 44

2.7 Manufacturing risk ............................................................................................................................ 44

2.8 Quality and brand image risk ............................................................................................................ 44

2.9 Regulatory risk ................................................................................................................................... 45

2.10 Risk of dependence on suppliers ........................................................................................................ 45

2.11 Industrial and environmental risks .................................................................................................... 46

2.12 Other risks ......................................................................................................................................... 46

2.13 Insurance and risk cover .................................................................................................................... 46

3 Capital and Executive Officers ..............................................................................48

3.1 Shareholder structure ........................................................................................................................ 48

3.2 Powers governing capital transactions ........................................................................................ 51

3.3 Executive Officers .............................................................................................................................. 59

4 Notes to the Management Report .......................................................................67

4.1 Social considerations ......................................................................................................................... 67

4.2 Delegated powers in the event of a capital increase ......................................................................... 70

4.3 Five-year financial summary for Naturex SA ..................................................................................... 71

5 President’s Report on Internal Control procedures ...............................................72

6 Statutory Auditors’ Report on the report prepared by the President on internal control 80


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1 Group activity and results

1.1 Highlights

1.1.1 Acquisition of the Ingredients Division of Spanish group, Natraceutical.

2009 marked a new turning point in the history of Naturex. For the third time since it was founded in 1992, the group doubled in size following a new acquisition and became the global independent leader in specialty plant-based natural ingredients. On December 30, 2009, following the approval of its Annual General Meeting, Naturex acquired the Ingredients Division of Spanish group, Natraceutical. Spanish multinational Natraceutical group is listed on the Spanish stock market and is a leading player in the research and development of naturally-sourced functional, active ingredients and nutritional supplements. Combining the expertise of Naturex (nutraceuticals, flavorings, coloring agents, anti-oxidants and cosmetics) and the Ingredients Division of Natraceutical group (natural coloring agents, fruit and vegetable powders, pectins, functional ingredients, yeast and caffeine), the new entity benefits from a balanced presence between Europe (50% of pro-forma revenue) and the United States (39%). The Ingredients Division of Natraceutical group includes the following companies and/or assets:

OObbiippeekkttiinn AAGG

Swiss company Obipektin AG is a recognized European leader in fruit and vegetable powders and specialty pectins with two major, fully-equipped production sites in Bischofszell and Burgdorf (German-speaking Switzerland). Like Naturex, the company markets its natural ingredients to industrial groups, primarily within the food sector, particularly baby foods.

OOvveerrsseeaall NNaattuurraall IInnggrreeddiieennttss LLttdd

English company Overseal Natural Ingredients Ltd is a leading European manufacturer and supplier of naturally-derived coloring agents, and also specializes in yeast and Talin – a naturally-strong sweetener which is principally used to mask bitterness.

NNaattrraacceeuuttiiccaall RRuussssiiaa


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Based in Moscow, this Overseal Natural Ingredients subsidiary is a distribution platform for Overseal Natural Ingredients and Obipektin products.

KKiinnggffoooodd AAuussttrraalliiaa PPttyy LLttdd

Based in Sydney, Kingfood is a bridgehead company for the development of group sales in the Asia/Pacific region. A distribution platform that covers the whole of the region, it also has its own industrial formulation facilities.

EExxttrraaccttooss NNaattuurraaiiss ddaa AAmmaazzôônniiaa LLttddaa

Exnama is a company based in Manaus in Brazil which produces purified caffeine for the food industry as well as caffeine-enriched beverages.

PPrroodduuccttiioonn ffaaccttoorryy iinn VVaalleenncciiaa,, SSppaaiinn

Naturex group has purchased an industrial production plant in Valencia (land and buildings are leased) with a major extraction capacity (solvent and water extraction, production of polyphenols).

AAsssseettss ooff NNaattrraacceeuuttiiccaall CCaannaaddaa

The group has acquired registered brand, Viscofiber, along with a patent license for the production of beta glucans (dietary fibers).

SSttaakkee iinn BBiiooppoolliiss

Naturex has purchased a 24.9% stake in this R&D company which specializes in ingredients and is based in Valencia, Spain. The company's research focuses primarily on the production, design and purification of microorganisms (bacteria, yeasts and filamentous fungi) and microbial metabolites (by-products with a high value-added such as enzymes, proteins and nucleic acids). The locations of the group's entities following the operation are given below:


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The group's industrial facilities as of December 30, 2009 are as follows:


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The group's sales offices as of December 30, 2009 are as follows:

1.1.2 Strengthening of the group's financial position

In March 2009, Naturex group carried out a capital increase in cash of € 17.3 million. Initially set at € 15 million, the capital increase was extended to € 17.3 million as a result of strong market demand. Detailed information on the operation is given in Note 1.1 of the Notes to the consolidated financial statements. In financing the acquisition of the Ingredients Division of Natraceutical, partially in cash and partially through the recovery of debt, Naturex chose to restructure its debt by repaying virtually all of its loans which it refinanced via a structured loan of € 140 million set in place on December 30, 2009. On December 31, 2009, the group had drawn down € 100 million. Detailed information on the financing is set out in Notes 1.1 and 15 of the Notes to the consolidated financial statements.

1.1.3 Sustained organic growth

RReevveennuuee


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Driven by persistent demand for natural products and ingredients, and despite a difficult economic backdrop, Naturex once again proved its ability to generate rapid organic growth in 2009 and meet its growth target of between 5% and 10% in constant currencies. Consolidated revenues for the year amounted to € 101.9 million, up 9.4% on 2008. At constant scope and in constant currencies, yearly sales for the group increased 5.5% in line with the ambitious growth target set at the start of the financial year. North America accounted for 59.8% of sales, the European Union for 30.4% and Asia/Pacific for 3.2%. Naturex’s growth prospects have been further enhanced by the integration of the Ingredients Division of Natraceutical group. The consolidation of the revenues of the group’s new subsidiaries from January 1, 2010, will allow for a better balance in sales, with North America and Europe accounting for 39% and 50% respectively, and Asia for the remaining 11%.

NNeeww ssttaarrtt iinn CChhiinnaa

Naturex's new subsidiary in China has two objectives: to up the reliability of sourcing from that part of the world by implementing local quality control procedures and by forging stronger relations with producers; and to develop group sales on the Chinese market. Naturex's Chinese subsidiary was launched in the second half of 2009 and accounted for € 0.5 million of the group's procurement over the year. In 2010, it is expected to account for several million euros of procurement for the group.

NNeeww bbrraanncchheess

Naturex group opened a branch in Belgium in June, Naturex Benelux, and another in Tokyo Japan in October. Like the group's other branches, their remit is to develop and reinforce Naturex's local commercial presence and sales. At the end of 2009, Naturex had new branches in Germany, Singapore, Belgium, Japan and Thailand, and was in the process of opening a new branch in Dubai (scheduled for January 6, 2010).

1.1.4 New structure, new executive management and new visual identity

Having cemented its leading position on the extracts market, Naturex group now intends to focus on using its expertise to offer high-performance technological solutions with a strong value-added to its various markets. Its offering is now broken down between three Business Units devoted to the group’s primary sectors of activity:

- Nutrition & Health, which targets the nutraceutical and pharmaceutical industries; - Food & Beverage, which targets the food-processing industry; - Personal Care, which targets the cosmetics industry.


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The core objective of each of these Business Units is to develop a range of extracts that are tailored to each market segment. Furthermore, a market manager is assigned to each range whose role is to coordinate its research and development, marketing and sales. To reflect its expansion and specialization within these markets, Naturex has changed its graphic charter and sales documentation and has a new logo:

The aim of this new logo is to give customers a clearer understanding of its product offering and to better reflect its expertise across its different businesses. In fact, each sector of activity now has its own individual visual identity:

1.1.5 Outlook and market trends

Naturex intends to pursue its targets of growth and operational excellence through the development of new product ranges and its sales network. The group has confirmed its targets of between 5% and 10% in revenue growth (in constant currencies and scope) and a new increase in its operating margin in 2010.

1.1.6 Financial crisis

Given Naturex's excellent results over the past two years despite a persistently morose economic climate, the group's management remains confident of its economic prospects given its clear positioning on the defensive sectors of food and health in which all business segments point to a strong growth potential. Public demand for natural extracts continues to increase year after year, even during periods of recession.


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1.1.7 Naturex Foundation activities

The mission of the Naturex Foundation is to improve the living conditions of communities where Naturex sources its raw materials. It currently supports projects in Morocco, Peru and India: - In Morocco, the project launched in 2008 continued to be a success. The goal is to promote the social integration of a group of young disabled people in Ouarzazate and in Zagora. Excluded from the formal education system, these young people have no appropriate academic structure. Ten young Moroccans sponsored by the Foundation have successfully completed their training and now have their own farms. The next challenge is to ensure that they are able to continue to successfully manage these farms by themselves. The Board of the Foundation is also currently looking into the next projects to run in Morocco. - In Peru, the project launched in cooperation with "Kalisayas Out Reach" focuses on improving the living conditions of the inhabitants of Ninacaca, a village located in the Peruvian highlands. In this remote area, local communities are often deprived of healthcare services and education. One example of the aid provided by the Naturex Foundation is the supply of medical devices for a dental clinic. The Foundation also helps maintain a local internet center which provides computer courses for children. The aim of these initiatives is to improve the lives of people in Ninacaca over the long term. - In India, the Foundation supports the "Poverty alleviation through the promotion of agricultural micro-enterprises" project. Located in the north of India (Sahaspur Block), the project is managed by Agrisud, a non-profit organization. Its aim is to help fight poverty through the creation of small farms specialized in the production of aromatic plants. The beneficiaries are locals who live below the poverty line. This project has just started and is expected to lead to the setting up of 20 new farms in 2010. Day after day, the Naturex Foundation works to meet the basic needs of vulnerable communities, to help those marginalized from mainstream society find lasting employment, and to protect the earth and its resources. Moreover, these programs will also pave the way for many other projects all over the world, since the scope of activity of our Foundation is not limited to Morocco, Peru and India. The Naturex Foundation is an independent, non-profit making entity with its own resources, which supports education, medicine, and the basic necessities of local communities in those countries from which Naturex obtains its plant materials.


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1.2 Analysis of the consolidated financial statements

1.2.1 Revenue

TTrreenndd iinn rreevveennuueess The trend in Naturex's revenues in current dollars is presented below (in € million):

2004 2005 2006 2007 2008 2009

34,8

50,1

66,2

79,4

93,1101,9

Group revenue for 2009 as a whole came in at € 101.9 million, up 5.5% in constant currencies and 9.4% in current currencies.


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RReevveennuuee bbyy ggeeooggrraapphhiiccaall rreeggiioonn11

in thousands of euros 31-Dec-09 31-Dec-08

Revenue as a %

Europe/Africa 35,722 35.1% 33,390 35.8% 2,332 26.7%

America 62,387 61.2% 56,147 60.3% 6,240 71.4%

Asia/Pacific 3,808 3.7% 3,641 3.9% 167 1.9%

Total 101,917 100% 93,178 100% 8,739 9.4%

Change

Realized: For 2009, the breakdown in revenues clearly demonstrates the dominant position of the North American market in group sales. It also highlights the globalization of group sales, with over 90% of revenues generated outside France. Pro-forma: The breakdown will be substantially changed and re-balanced thanks to the acquisition of Natraceutical after which Europe will account for approximately 49% of revenues, North America for approximately 39% and Asia for 12%.

1 Breakdown based on geographic location of clients


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RReevveennuuee bbyy sseeccttoorr ooff aaccttiivviittyy in thousands of euros

Sector as a %

Food & Beverage 29,633 29.1% 30,570 32.8% -936 -3.1%

Nutrition & Health 65,940 64.7% 51,734 55.5% 14,206 27.5%

Personal Care 1,544 1.5% 7,256 7.8% -5,712 -78.7%

Miscellaneous (toll extraction) 4,800 4.7% 3,619 3.9% 1,181 32.6%

Total 101,917 100.0% 93,178 100.0% 8,740 9.4%

Change31-Dec-09 31-Dec-08

Realized: For 2009, the breakdown in Naturex's revenues clearly demonstrates the dominant position of its Nutrition & Health and Food & Beverage business lines - two sectors which form the core of the group's activities. Pro-forma: The acquisition of Natraceutical will re-balance the breakdown by sector of activity. Pro-forma, revenues by sector break down as follows:


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1.2.2 Consolidated yearly results

Naturex’s consolidated income statement for 2009 breaks down as follows:

in thousands of euros31/12/09 31/12/08

Change

as a %

Revenue 101,917 93,178 9.4%

Gross margin 68,527 63,335 8.2%

67.2% 68.0%

Operating income 13,062 11,254 16.1%

EBIT / revenue 12.8% 12.1%

EBITDA 18,016 15,763 14.3%

EBITDA / revenue 17.7% 16.9%

Cost of net financial debt (4,145) (4,900)

Other financial income and expenses (526) (784)

(1,206) 420

Tax expense (1,938) (1,700)

Net income 5,247 4,291 22.3%

Net income as a % of revenue 5.1% 4.6%

Net income of companies accounted for using

the equity method

RReevveennuuee As indicated above, Naturex's revenues continued to grow in 2009, increasing 9.4% in current currencies and 5.5% in constant currencies. Despite a persistently difficult economic climate, the group once again demonstrated its ability to reach the target it set itself in 2008 of revenue growth of between 5% and 10% in constant currencies.

OOppeerraattiinngg iinnccoommee Changes in Naturex’s operating income over the past 6 years are as follows (in € million):


33

2004 2005 2006 2007 2008 2009

4,7

6,5 6,8 6,7

11,313

On December 31, 2009, operating income stood at € 13.1 million, a year-on-year increase of close to 16% (€ 11.3 million on December 31, 2008). EBIT2 increased from 12.1% in 2008 to 12.8% in 2009, in line with the target set by the group at the beginning of the year to improve its operating margin. At the same time, EBITDA3 increased € 1.3 million from € 15.8 million in 2008 to € 18.0 million in 2009. The marked improvement in these ratios is due to several factors:

o As most of Naturex's businesses have fixed overheads, the strong increase in revenues has enabled the group to streamline its expenses. In proportional terms, none of its main cost items increased more than revenues. Those expenses that underwent the biggest changes include:

. payroll costs (as the group pursued its restructuring and reinforced its teams, particularly within the corporate functions), . external expenses: this increase is primarily due to an increase in fees and expenses (development of partnerships for clinical trials, overhaul of the group's entire graphic charter, increase in recruitment) and maintenance costs (mostly linked to investments and renovation work to improve group productivity).

o Improving its operating income was a key priority for the group in 2009. Its aim was to

exceed the 12.1% posted for 2008, which was already up 68% on 2007 when operating income stood at € 6.7 million. The investments made since 2008 to optimize both productivity and profitability continued to have a positive impact on operating income in 2009.

2 EBIT: Earnings Before Interest and Tax: operating income/revenues

3 EBITDA: Earnings before Interest, Taxes, Depreciation and Amortization: operating income restated for

depreciation and amortization/revenues


34

FFiinnaanncciiaall iinnccoommee aanndd ttaaxx Naturex was able to reduce its financial expenses for 2009 by 15% despite the major impact of the € 0.6 million in fees linked to its previous loan (remaining amount to be spread over the rest of the term of the loan). Over the year, the group benefited from both a drop in its debt expense (following the repayment of the loan and the capital increase in cash carried out in March 2009 which raised a total € 17.3 million) and the general drop in tax rates. The group's tax expense was low in 2009 (tax rate of 23%), primarily thanks to the fiscal advantages linked to the group's activities in Italy.

NNeett iinnccoommee Excluding companies accounted for using the equity method, Naturex's net income increased € 2.6 million to stand at € 6.5 million (€ 3.9 million in 2008) and 6.3% of revenues in 2009. Net income including companies accounted for using the equity method increased € 0.9 million from € 4.3 million in 2008 to € 5.2 million in 2009, despite the € 1.2 million in expenses linked to the depreciation in the fair value of Sanavie. Income accounted for 5.1% of revenues in 2009 compared to a figure of 4.6% in 2008. These strong results are essentially due to the group's excellent operating performance (increase of € 1.8 million in operating income).

1.2.3 Consolidated balance sheet at December 31, 2009

Naturex's consolidated balance sheet for 2009 breaks down as follows:


35

31-Dec 31-Dec 31-Dec

2009 2008 2009

Non-current assets 164,009 91,419 Shareholders' equity 144,767

Goodwill 74,091 53,591 Group share 144,414

Other intangible fixed assets 3,003 2,184 Minority interests 353

Tangible fixed assets 83,694 33,617

Financial assets 1,372 226 Non-current liabilities 91,953

Shares accounted for using the

equity method- 984 Long-term financial debt 82,880

Deferred tax assets 1,849 818 Non-current provisions 1,511

Deferred taxes 7,562

Current assets 133,294 71,488 Current liabilities 61,378

Inventories 76,819 47,190 Current provisions 2,772

Tax receivables 1,504 2,896 Tax payables 397

Trade and other receivables 39,359 17,901 Trade and other payables 36,663

Cash and cash equivalents 15,612 3,501 Other financial liabilities 16,306

Bank overdrafts and loans 5,238

Non-current assets held for sale 795 819

Total Assets 298,097 163,725 Total Liabilities 298,097

in thousands of euros

Naturex’s balance sheet total increased € 134 million over the period, going from € 164 million on December 31, 2008 to € 298 million on December 31, 2009. This increase is primarily linked to the capital increases carried out during the year:

o in March 2009, Naturex group carried out a capital increase in cash of € 17.3 million, o in December 2009, the group carried out a capital increase by contribution in kind of € 65.4 million in order to finance part of the acquisition of the Ingredients Division of Natraceutical.

The key changes in the group's balance sheet are linked to the operation carried out on December 30, 2009 and the subsequent consolidation of the balance sheets of the companies acquired within the group's balance sheet. Non-current assets increased € 73 million, including € 21 million in goodwill linked to the operation and € 50 million in tangible fixed assets, € 47 million of which pertain to the acquisition at the end of the year. Current assets increased € 62 million and break down as follows:

o increase of € 30 million in inventories (additional € 32 million following the consolidation of the new companies and reduction of € 2 million in inventories within the group's former consolidation scope); o increase of € 21 million in trade and other receivables, including € 17 million linked to the integration of the new companies;


36

o increase of € 12 million in the group's cash position, € 4 million of which is due to the integration of the new companies and an increase in cash within the former consolidation scope.

Non-current liabilities increased € 33 million, including € 26 million in financial debt (€ 23 million of which corresponds to the debt of the companies acquired), € 2 million in non-current provisions and an increase of € 5 million in deferred tax liabilities tied to the integration of the new companies. Current liabilities increased € 16 million which includes:

o € 3 million in provisions tied to the integration of the new companies; o € 18 million in trade and other payables, including € 13 million linked to the group's former consolidation scope; o a reduction of € 6 million in bank loans, € 8 million of which is linked to the group's former consolidation scope.

1.3 Other information on group activity

RReesseeaarrcchh aanndd ddeevveellooppmmeenntt Naturex’s R&D Department is at the heart of its economic model. Working in close collaboration with the R&D departments of the group’s clients and with university research centers around the world, Naturex's R&D unit designs and creates new products to meet market needs. The group's laboratories play a decisive role in the production of extracts that are subject to increasingly complex technical and regulatory specifications. The R&D department develops specialty, high value-added products whose initial production stages require specific expertise and whose composition is customized to suit individual requirements. Naturex's strong interest and investment in R&D have resulted in a number of major technological innovations that afford the group an important competitive advantage. The R&D Department currently employs a team of 49 engineers and technicians across France, the United States, Italy and Morocco. In accordance with the provisions of Article 233-26 of the French Commercial Code, Naturex group has declared an investment of approximately € 2.7 million in R&D in 2009. The projects concerned are set out in Note 19 of the Notes to the consolidated financial statements. Moreover, the group intends to step up its investment in R&D in the coming years. In particular, through its new Spanish subsidiary, Naturex is taking part as lead arranger in a major research program over several years devoted to foods and ingredients for the elderly.

EEnnvviirroonnmmeennttaall iimmppaacctt


37

Among Naturex’s 5 production sites (Avignon in France; South Hackensack in NJ, USA; Shingle Springs in California, USA; Milan in Italy; Nouasser in Morocco), four are home to plant extraction activities with evaporation processes that consume a great deal of energy and generate pollutant emissions. The operation of these different sites is subject to authorization. They are also regularly subject to emissions tests and are equipped with emissions reduction systems. The environmental management system of Naturex's site in Avignon has been ISO 14001 certified since 2007. The new sites that are part of the Ingredients Division of Natraceutical group (Bischofzell in Switzerland and Valencia in Spain), use inflammable solvents which, like the sites in the group's former scope, results in substantial energy consumption and discharges into the atmosphere. Retrieval systems have been put in place in order to reduce these emissions. The management of wastewater is a priority at each of the new sites, which are all equipped with facilities for the pretreatment (and in some cases treatment like the site in Valencia, Spain) of water that are adapted to the needs and types of effluents in compliance with applicable standards. Furthermore, the Overseal plant in the United Kingdom is ISO 14001 certified since 2008 (certification is audited every six months by an external firm). Energy consumption for plant extraction activities is outlined in the table below.

SiteAvignon

France

Nouasser

Morocco

South

Hackensack, NJ

USA

Milan

Italy

Main source of energy Gas Fuel Electricity Gas

Gas consumption in 2009 (KW) 3,727,843 0 10,704,131 12,538,422

Fuel consumption in 2009 Fuel (Kg) 0 1,552,150 0 0

Electricity consumption in 2009(KW) 5,311,013 4,079,967 6,475,440 3,296,297

NB: The regular declarations made by the Nouasser and Avignon entities to the relevant national authorities provide detailed data on emissions.

OOffff--bbaallaannccee sshheeeett ccoommmmiittmmeennttss aassssoocciiaatteedd wwiitthh oorrddiinnaarryy ooppeerraattiioonnss Off-balance sheet commitments linked to ordinary operations are set out in Note 24 of the Notes to the consolidated financial statements. The figures above include all major off-balance sheet commitments in accordance with applicable accounting standards.

LLeeggaall aanndd aarrbbiittrraattiioonn pprroocceeeeddiinnggss Naturex has not been party to any governmental, legal or arbitrage proceedings over the past twelve months.

NNaattuurreexx SSAA,, AAvviiggnnoonn Naturex SA realized revenues of € 52.5 million in 2009, up € 1.6 million (3.1%) on the € 50.9 million posted for 2008. Net income came in at € 0.2 million in 2009, compared with a profit of € 1.3 million in 2008.


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The company’s balance sheet total increased € 117 million from € 138 million in 2008 to € 254 million one year later. This growth is primarily explained by (i) the acquisitions made in 2009 and described below, and (ii) the € 17.3 million capital increase carried out in March 2009. The company’s five-year financial summary is presented in the notes to this report.

Highlights Naturex's revenues increased 3.1% (€ 1.6 million) in 2009. The group pursued its expansion with the acquisition on December 30 of the Ingredients Division of Spanish group, Natraceutical, which it financed through the issue of 2,481,960 new shares and a € 5 million payment. On December 30, 2009, Naturex restructured its financial debt which it repaid in full via a structured loan of € 140 million. At the end of the year, the group had drawn down a total € 100 million. On March 3, 2009, Naturex's successful capital increase via the issue of 866,863 shares with a par value of € 20 raised € 17.3 million. Two new branches were set up in Brussels, Belgium and Tokyo, Japan, as part of the group's policy to work more closely with its client base by expanding its sales offices overseas. These operations are detailed in Note 1.1 of the management report.

Outlook and development prospects Naturex intends to pursue its dynamic expansion (in constant currencies) in 2010, drawing on both its organic growth and its recent acquisitions. Virtually up and running at the end of 2009, the group's new branch in Dubai was awarded its commercial license on January 6, 2010.

Major events since the close of the year

All major events occurring after year-end are set out in Note 1 of the management report.

Results for the company and its subsidiaries The results of the company and its subsidiaries are given in the Notes to the financial statements of Naturex SA. It will be proposed to the General Meeting that the earnings of € 206,903 be carried over to legal reserves. The appropriation of earnings is compliant with French law and with the company’s articles of association.

Supplier payments


39

In accordance with Article D441.4 of the French Commercial Code, supplier payments are generally made at 60 days. On December 31, 2009, the repayment schedule for supplier invoices was as follows:

in thousands of euros 31/12/2009

Outstanding 5,824,339 74%

1 to 30 days 846,807 11%

31 to 60 days 757,515 10%

61 to 90 days 117,037 1%

More than 90 days 325,430 4%

Total 7,871,128 Payments for 26% of Naturex's supplier debt exceed this generally-accepted deadline, essentially as a result of the scheduling of major invoices due to late deliveries.


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Payment of dividends Dividends per share for 2009 have been set at € 0.11, with shareholders having the option of receiving all or part of their dividend in cash or in the form of shares with a discount of 10% on their reference market price. In accordance with the provisions of Article 243 bis of the French General Tax Code, dividend payments of € 0.10 per share and per year for the past three financial years were as follows:

Financial year Dividends paid Tax credit Actual income

2006 € 265,862

2007 € 298,750

2008 € 387,826

Were all shareholders to decide to receive their dividends in the form of cash, payment would break down as follows:

Financial yearIncome not eligible for tax

allowance

Dividends Other paid income

2009 € 0

Income eligible for tax allowance

Research and development activities The corresponding information is given in Note 19 of the Notes to the consolidated financial statements. Investment by Naturex SA amounted to € 1.7 million in 2009.

Progress made and difficulties encountered In 2009, Naturex S.A., like all other group companies, switched its entire payment process to electronic format (from the issue of purchase orders right through to the validation of invoice payments). The new system has not only enabled the group to enhance its internal control, but also to significantly reduce the time it needs to devote to its administrative procedures.

Acquisition of controlling stakes As part of the acquisition of the Ingredients Division of Natraceutical group, Naturex has purchased a 24.9% stake in the Spanish company, Biopolis, a R&D company based in Valencia that specializes in different ingredients. The company's research focuses primarily on the production, design and purification of microorganisms (bacteria, yeasts and filamentous fungi), microbial metabolites (by-products with a high value-added such as enzymes, proteins and nucleic acids).

Social considerations – Naturex SA, Avignon All relevant information is set out in the notes to the management report.


41

RReellaatteedd ppaarrttyy ttrraannssaaccttiioonnss Over the course of 2009, Naturex SA was involved in a number of transactions with SGD which holds 16.29% of its share capital and in which the President and CEO of Naturex is a shareholder. As part of the capital increase described in Note 1.1 to the consolidated financial statements, the directors of Naturex SA transferred their shares to SGD which contributed a total € 9.2 million to the operation. All of the legal information relating to the capital increase is given in the prospectus approved by the French Securities Regulator, the AMF (authorization No. 09-027) on February 4, 2009, and can be consulted on the group’s website: www.naturex.com. Naturex SA also contributed € 7,000 to the company's current assets which amounted to a total € 379,000 at the close of the financial year.

1.4 Events after closing

None.


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2 Risks and commitments

The non-financial risks to which Naturex is exposed are set out below. Its financial risks described in Note 16 to the consolidated financial statements are as follows:

o Credit risk o Liquidity risk o Exchange rate risk o Interest-rate risk

2.1 Legal risks

The legal risks tied to Naturex’s activities are essentially linked to the use of patents and trademarks. The purpose of the research carried out by Naturex is to add to the group’s manufacturing expertise. In line with market practices, Naturex does not systematically file patents or trademarks but prefers to safeguard the confidentiality of formulations and designs. While the group monitors the filing of new patents and trademarks, it is possible that a competitor that has filed or is in the process of filing a patent may bring legal proceedings before the group. Legal risk can be substantial, particularly in the US where the costs involved in the defense or challenge of patents can be high and result in substantial legal fees. Otherwise, there is no risk of dependency on a particular patent.

2.2 Risk of price volatility

Naturex is exposed to volatility in the prices of raw materials, but only to a very limited degree. Of all the plants processed by the group, for example, only a low proportion are exposed to speculation (pepper, paprika, saffron or chili peppers). While the fact that Naturex markets various niche products does leave it exposed to a potentially sharp volatility in prices, the probability of a substantial increase across a large range of niche raw materials is extremely low. In fact, the vast majority of raw materials purchased by the group have not seen an increase in price other than in line with currency market trends. Furthermore, experience has shown that, when the markets rally, the group is able to adjust its sales prices accordingly and, in doing so, neutralize any impact on its margins.


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2.3 Competitive risk

Naturex considers that it is the only group of its size to operate on its various market segments. Within its primary business lines (food and flavor, nutraceutical and pharmaceutical sectors), the group is faced with less than half a dozen competitors. Moreover, the risk of seeing new competitors emerge on the market is extremely slim for several reasons:

o the industry’s technological constraints and the fact that the sector is a capital-rich one are major obstacles for newcomers,

o the lasting growth trends of the various niches, o the compartmentalization of the various product niches which cannot substitute each other

in companies with diversified portfolios. The highest risk is linked to products in the flavorings industry which is highly concentrated. It is quite low for the most innovative food ingredients and can be qualified as average for other food ingredients and raw materials for the nutraceutical industry.

2.4 Risk of dependence on executives

Naturex’s executive management team is made up of seven individuals who complement each other perfectly but are not interchangeable. The group’s development to date comes essentially on the back of a combination of the talents of this team. Were a member of the team, particularly one of the directors, to be absent for a long period of time, the company’s operations and development would most likely suffer. This risk has nonetheless been substantially reduced over the last two years as the teams have been reinforced. As a result, the long-term absence of a member of the team would not go so far as to compromise the long-term future of the group.

2.5 Political risk

Naturex carries out a large proportion of its production in Morocco. This geographic location combines several advantages:

o sound compromise between low labor costs and good quality work; o existence of plants that are extremely well suited to Naturex’s requirements. For example,

Moroccan rosemary has high anti-oxidant properties enabling quality rosemary extracts at very competitive prices.

A deterioration in Morocco’s political situation, leading to a substantial slowdown or even the stoppage of the Moroccan factory, could have a serious impact on Naturex’s industrial competitiveness. However, the Avignon factory is capable of producing the majority of the ingredients manufactured in Morocco in the event of a crisis situation. Bolstered by the group's acquisition at the end of the year, this risk is limited insofar as the group's new production plants will enable it to offset any production downtimes at its other sites.

JD TL SD FS dir industriel MR dir service comptable JG dir comm SS Dir achat et supply chain


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2.6 Client risk

At December 31, 2009, the group’s top 10 clients accounted for 22.9% of revenue, the top 20 for 32.50% and the top 30 for 39.4%, compared with 23.1%, 34.2% and 41.3% respectively on December 31, 2008. Past financial years show that the proportion of revenue attributable to each client varies enormously, with a decrease in some compensated by an increase in others. Finally and above all, the financial quality of Naturex’s major clients is first class.

2.7 Manufacturing risk

A decline in technical expertise in production seems improbable, given: o the "traditional" equipment used to manufacture products of this type, o that basic manufacturing know-how resides in the composition of recipes whose

implementation does not pose any major problems. With regard to the risk of operating incidents given the installations used and the use of more or less inflammable or explosive solvents, Naturex’s exposure is similar to that of any company working with materials of this type. In 1995, it suffered an explosion causing little damage and with no impact on its profitability. Existing safety measures are extensive and include: explosion-proof workshops, safety clothing, recourse to specialist consultants, etc. The production installation consists of a number of specialized lines per product that are independent of each other. Moreover, the group has a Head of Hygiene, Safety and the Environment in charge of coordinating the Heads of Hygiene, Safety and the Environment at each of the group production sites. Lastly, Naturex is insured against operating losses.

2.8 Quality and brand image risk

Naturex products are essentially intended for food or para-pharmaceutical consumption. There is therefore a risk that these products may be toxic, notably as a result of a defect during development. However, this risk is mitigated in the case of food since, in the final product, the proportion of the ingredients developed by Naturex is extremely low. Given the strong degree of trust that exists amongst partners in this sector, any serious problem concerning the quality of a delivery would necessarily impact on the company’s brand image. As such, to avoid this risk, each manufacturing batch undergoes a test analysis at Naturex and then at the client’s site before being used. Furthermore, as this profession is highly compartmentalized, an incident is unlikely to spread elsewhere.


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2.9 Regulatory risk

Regulations are very slow to adapt to developments in industry. In certain cases, inclusion on a positive list, which is a long and costly process, is necessary. Nevertheless, regulations are not particularly restrictive when it comes to extracts or traditional plants, even if these extracts are used more for their secondary properties (coloring, anti-oxidant or other) than for their flavoring qualities. When an ingredient used for its secondary properties takes on major proportions, the necessary toxicological studies should be carried out in conjunction with the supervisory authorities, and an application for inclusion on the positive list filed. This is notably the case for rosemary. While its application is still being processed, the Autorité Européenne de Sécurité des Aliments (EFSA) already ruled to allow the use of rosemary extracts in food additives in 2008. This ruling obviously features in the key events of the group’s management report. The company feels that, today, these practices, which have been deep-rooted for decades now, are unlikely to be called into question. Changes in regulations will tend more towards tighter restrictions governing the introduction of new synthetic products and labeling, all of which are favorable to the growth of the natural ingredients sector. With regard to the nutraceutical sector, regulations are not particularly restrictive in either Europe or the USA, providing companies comply with the relevant obligations and restrictions regarding claims and intended to avoid any risk of products being confused with pharmaceutical products. Here again, the company feels that these practices are unlikely to be called into question. On the other hand, tighter controls on labeling and the listed content of active ingredients are probable. These should mostly prove favorable for companies like Naturex which have the required technical and scientific potential. The group has completed various certification processes and obtained a number of different certifications listed in its management report. Today, certification remains a priority for the group in its constant quest for operational excellence.

2.10 Risk of dependence on suppliers

Naturex’s procurement requirements are low in relation to the size of the raw materials markets. The company is therefore not dependent on its suppliers. Nevertheless, to ensure the optimal management of its procurements, Naturex’s relations with its suppliers are structured and are sometimes governed by contract (e.g. mustard grains).


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2.11 Industrial and environmental risks

The main risk linked to Naturex's industrial sites is the handling of inflammable liquids (solvents used in plant extractions), even if the quantities used remain well below the thresholds stipulated in the SEVESO directive. Naturex has implemented the necessary technical, human and organizational resources to control these risks and ensure the proper steps are taken in the event of an incident. Moreover, its Health and Safety Department carries out a permanent technical and regulatory watch to ensure the constant improvement of safety and environmental procedures. Below are examples of just some of the projects carried out in recent years:

o construction a 600 m3 retention basin at the Avignon site; o start-up in 2008 of a physical/chemical treatment station at the Avignon plant; o launch of a state-of-the-art unit for the retrieval of Volatile Organic Compounds (VOCs) at

the plant in Avignon; o start-up in 2010 of a biological wastewater treatment station at the plant in Morocco; o construction in 2010 of a foam fire protection system at the plant in Morocco; o installation of a permanent water mist fire protection system at the Avignon site; o extension and ongoing upgrading of current fire sprinkler systems at the plants in America; o publication of an Internal Operations Plan listing all emergency scenarios and the

procedures to follow in order to limit their impact, along with regular staff training on these procedures, notably during drills;

o implementation of the requirements stipulated in the ATEX directives governing potentially explosive atmospheres.

2.12 Other risks

To the best of the company's knowledge, there are no existing or potential state, legal or arbitrage proceedings, or any other form of proceedings, that have or are likely to compromise the company's and/or group's financial position or earnings for the last 12 months.

2.13 Insurance and risk cover

The table below is a guide (based on indexation, excess clauses and policies) to the maximum cover in euros by type of risk of the various insurance policies subscribed to by the group:


47

Type of risk Total

in € million

Operating loss and damages (limited to € 36.6 million per claim) 136.1

Environmental damage 4.6

Transported goods (per claim) 0.3

Third-party liability for operations 8.5

Third-party liability after delivery 12.3

Work-related accidents 0.6

The total cost of the group’s insurance cover amounted to € 1.1 million for 2009. On January 1, 2010, the group's insurance policies were renewed to include the new companies acquired and increase their cover.


48

3 Capital and Executive Officers

3.1 Shareholder structure

BBrreeaakkddoowwnn ooff ccaappiittaall aanndd vvoottiinngg rriigghhttss At December 31, 2009, Naturex’s capital and voting rights break down as follows:

Shareholders

Number of

shares

%

capital

%

voting rights

Number of

shares

%

capital

%

voting rights

Number of

shares

%

capital

%

voting

rights

Executive shareholders

Jacques Dikansky 28,335 0.45% 1.13% 228,335 7,57 % 12.94% 212,395 7.11% 12.90%

Thierry Lambert 989 0.02% 0.02% 10,989 0,36 % 0.62% 10,541 0.35% 0.63%

Stéphane Ducroux 2,511 0.04% 0.10% 6,511 0.22% 0,29%

Total Executives 31,835 0.51% 1.25% 245,835 7.93% 13.56% 222,936 7.46% 13.53%

Shares held jointly with executives

SGD 1,036,886 16.29% 20.65% 285,250 9.46% 10.88% 285,250 9.55% 11.25%

NATRA Group 2,406,631 37.82% 19.15%

Total joint shares 3,475,352 54.62% 41.05% 531,085 17.39% 24.44% 508,186 17.01% 24.78%

Partner shareholder groups

Odyssée Venture 206,301 3.24% 4.11% 420,796 13.96% 12.35% 421,204 14.10% 12.79%

Banque de Vizille 205,042 3.22% 5.66% 182,260 6.05% 7.67% 182,260 6.10% 5.53%

Treasury 7,000 0.11% 2,000 0.07% 3,779 0.13%

Float

Bearer shares 2,462,100 38.69% 49.04% 1,871,151 62.06% 54.93% 1,721,064 57.61% 52.25%

Registered shares 8,205 0.12% 0.23% 7,687 0.25% 0.32% 7,627 0.26% 0.30%

TOTAL 6,364,000 100% 100% 3,014,979 100% 100% 2,987,509 100.00% 100.00%

Situation at 31/12/2007Situation at 31/12/2008Situation at 31/12/2009

SShhaarreehhoollddeerr ssttrruuccttuurree VVoottiinngg rriigghhttss ssttrruuccttuurree


49

TThe following individuals held, directly or indirectly, more than 5%, 10%, 15%, 20%, 25%, 33.33%, 50%, 66.66% or 95% of Naturex’s share capital or AGM voting rights at December 31, 2009::

Shareholders Capital Voting rights

Holding more than 10%

- Jacques Dikansky 16.74% 21.78%

- NATRACEUTICAL

GROUP37.82% 19.15%

This list changed as follows during the past financial year:

Shareholders

2009 2008 2009 2008

Holding more than 10%

- Jacques Dikansky 16.74% 17.03% 21.78% 24.13%

- Odyssée Venture 3.24% 13.96% 4.11% 12.35%

- NATRACEUTICAL

GROUP

37.82% - 19.15% -

Capital Voting rights

EEmmppllooyyeeee sshhaarree oowwnneerrsshhiipp At the close of 2009, no employee incentive or profit-sharing programs such as they are defined under Article 225-102 of the French Commercial Code were in place within Naturex group. Since employee shareholding within the group, such as it is defined in Article 225-102 of the French Commercial Code, represents less than 3% of the company’s share capital, the AGM is not required to appoint one or more directors nominated by employee shareholders (Article 225-23). As a result, no directors were appointed by the group’s employees (Article L. 225-27). At December 31, 2009, 2,436 shares were held by company employees by virtue of the different stock option plans.

AAllllooccaattiioonn ooff dduuaall vvoottiinngg rriigghhttss

The Extraordinary General Meeting of March 19, 2001, decided to allocate dual voting rights to all fully paid-up shares registered in the name of a single shareholder for at least two years. It also decided that, in the event of a capital increase via the incorporation of reserves, earnings or issue premiums, dual voting rights will be attached, as of their issue, to registered shares allocated free of charge to shareholders in exchange for old shares with dual voting rights. There are no restrictions regarding dual voting rights.

SShhaarreess wwiitthh nnoo vvoottiinngg rriigghhttss As part of the acquisition of the Ingredients Division of Natraceutical out on December 30, 2009, Naturex group issued 1,520,403 shares with no voting rights. These shares will be assigned voting rights once they are sold to third party, Natra group, and, for any sale exceeding 5% of the capital, once the transaction has been approved by the Board of Directors of Naturex SA.

TTrreeaassuurryy sshhaarreess None of the companies controlled by the group has shares in the capital of Naturex SA.


50

At December 31, 2009, Naturex SA held 12,588 of its capital shares (0.11%) including:

- 7,000 held for the allocation of stock options for employees, - 5,588 as part of the liquidity contract.

Over the course of the year, the company repurchased 5,000 shares held as part of its stock options plans, taking the number of treasury shares to 7,000. The average share purchase price is € 25.80. At December 31, 2009, Naturex’s average share price stood at € 27.10. As part of its liquidity contract, the terms of which are set out in Chapter III of the registration document, the company purchased 42,214 shares and sold 36,304 shares over the financial year. At December 31, 2009, the number of shares held by virtue of this contact amounted to 5,588. The grounds for the different operations on the group’s shares are as follows:

Grounds for operations % capital

Boosting the share price 95 % Employee shareholdings 5 % Securities affording access to shares n/a Acquisitions n/a Cancellation n/a

NNoottiiccee ooff hhoollddiinngg oorr iissoollaattiioonn ooff ccrroossss--sshhaarreehhoollddiinnggss There were no cross-shareholdings to report at December 31, 2009.

FFaaccttoorrss lliikkeellyy ttoo hhaavvee aann eeffffeecctt iinn tthhee eevveenntt ooff aa ppuubblliicc sshhaarree ooffffeerr Note 4.2 of the present report outlines those powers granted to the Board of Directors which are still valid: table of powers in the event of a capital increase.

AAddjjuussttmmeenntt ooff tthhee ccoonnvveerrssiioonn bbaasseess ffoorr sseeccuurriittiieess aaffffoorrddiinngg aacccceessss ttoo tthhee

ccoommppaannyy’’ss ccaappiittaall,, ppuurrcchhaassee aanndd ssuubbssccrriippttiioonn ooppttiioonnss aanndd ffrreeee sshhaarreess None.


51

3.2 Powers governing capital transactions

The following powers were approved by the Annual General Meeting of June 30, 2009. Eighth resolution (EGM) – Powers to reduce the capital as part of a share buyback program The General Meeting, having heard the Board of Directors’ report and the Statutory Auditors’ report: 1) - authorizes the Board of Directors to cancel, at its sole discretion, and on one or more occasions, up to a maximum of one-tenth of the capital calculated on the date of the decision to cancel and excluding any shares cancelled over the past 24 months, those shares that the company holds or may hold following buybacks carried out in accordance with Article L. 225-209 of the French Commercial Code and to reduce the share capital accordingly in line with existing legal and regulatory requirements; 2) - decides that said powers shall be valid for a period of twenty-four months as of the date of this meeting, namely until June 30, 2011;

3) - confers full powers on the Board of Directors to carry out any such cancellations and subsequent reductions in the company's share capital, to modify the company's articles of association accordingly and to complete all necessary formalities therein. Ninth resolution (EGM) - Powers to carry out a capital increase through the incorporation of reserves, profits or premiums

Ruling under the conditions of quorum and majority required for Ordinary Shareholder Meetings, in accordance with Articles 225-129-2 and L.225-130 of the French Commercial Code, and having heard the report of the Board of Directors, the General Meeting:

1) authorizes the Board of Directors to carry out a capital increase, on one or more occasions

and according to the dates and terms it sets, through the incorporation of reserves, earnings, premiums or any other authorized sums, either via the issue or free allocation of shares or by raising the par value of existing ordinary shares, or by combining the two methods;

2) decides that, in accordance with Article L. 225-130 of the French Commercial Code, should

the Board of Directors choose to use these powers and carry out a capital increase through the free allocation of shares, fractional voting rights may not be traded and the corresponding shares will be sold, with the proceeds therein allocated to the holders of the rights within the time limits set down by law;

3) decides that said powers shall be valid for a period of twenty-six months as of the date of

this meeting;


52

4) decides that the amount of a capital increase carried out according to the terms of this

resolution may not exceed a nominal value of € 40,000,000. This is to exclude all sums needed to preserve the rights of holders of securities providing access to the capital in accordance with the law;

This ceiling is independent of all of the ceilings stipulated in the other resolutions of the present General Meeting.

5) confers full powers on the Board of Directors to exercise the present resolution, take all

necessary measures and complete all necessary formalities to ensure the success of each capital increase, as well as to modify the company's articles of association accordingly;

6) decides that these powers shall, as of this day, supersede any other powers with the same

purpose, including any unused fractions. Tenth resolution (EGM) - Powers to carry out a capital increase reserved for shareholders through the issue of ordinary shares or securities providing access to the capital The Extraordinary General Meeting, having heard the Board of Directors’ report and the Statutory Auditors’ special report and pursuant to Article L.225-129-2 of the French Commercial Code:

1) grants the Board of Directors the powers to carry out a capital increase, on one or more occasions and on the dates that it decides, via the issue, in euros or in a foreign currency or in any monetary unit calculated with reference to a basket of currencies, of ordinary shares and/or securities affording immediate or future access, at any time or upon a fixed date, to ordinary shares in the company or, in accordance with Article L 228-93 of the French Commercial Code, any other company that owns, whether directly or indirectly, more than half of the capital, and this whether by subscription, conversion, exchange, redemption or presentation of a warrant or by any other means;

2) decides that said powers shall be valid for a period of twenty-six months as of the date of this meeting;

3) decides to apply the following limits to the present powers granted to the Board of Directors: The total nominal value of the ordinary shares liable to be issued by virtue of these powers may not exceed € 4,000,000. This amount is to exclude the total nominal value of the additional ordinary shares to be issued to preserve, as required by law, the rights of holders of securities providing access to the capital. Furthermore, this amount shall also exclude the total nominal amount of the shares issued, whether directly or indirectly, by virtue of resolution eleven (capital increase with no pre-emptive subscription rights) and resolution twelve (capital increase by contribution in kind) below.

4) Where the Board of Directors uses the powers granted herein within the framework of the issues governed by paragraph one above:


53

a) decides that said issues will be primarily reserved for shareholders who may exercise their preemptive subscription rights; b) decides that, where preemptive and non-preemptive subscriptions do not match the full issue, the Board of Directors shall have recourse to the options available under the law and, notably, may offer all or part of the non-subscribed shares to the public; c/ decides that the number of shares to be issued may be increased in accordance with the provisions of Article L 225-135-1 of the French Commercial Code and within the limits set by the General Meeting;

5) decides that the Board of Directors shall, within the limits set out above, have the powers to set the terms of the issue(s), validate the necessary implementation of the resulting capital increases, proceed with the corresponding amendment of the articles of association, deduct, at its discretion, the cost of any capital increases from the related premiums as well as all sums needed to increase the legal reserves to one-tenth of the new capital after each increase, and, more generally, complete all of the necessary formalities therein;

6) rules that the present powers supersede any previous powers bearing the same purpose.

Eleventh resolution (EGM) - Powers to increase the capital through the issue of ordinary shares or securities providing access to the capital, with no preemptive rights The General Meeting, having heard the Board of Directors’ report and the Statutory Auditors’ special report, and pursuant to Article L.225-129-2 of the French Commercial Code: 1. grants the Board of Directors the powers to carry out a capital increase, on one or more

occasions and on the dates that it decides, on the French and/or international markets, by carrying out a public share offer or other offer as stipulated in paragraph II of Article L.411-2 of the French Monetary and Financial Code. This via the issue, in euros or in a foreign currency or in any monetary unit calculated with reference to a basket of currencies, of ordinary shares and/or securities affording immediate or future access, at any time or upon a fixed date, to ordinary shares in the company whether by subscription, conversion, exchange, redemption or presentation of a warrant or by any other means; it being specified that said shares may be used to remunerate shares contributed to a public exchange offer that complies with the terms laid down in Article L 225-148 of the French Commercial Code;

In accordance with Article L 228-93 of the French Commercial Code, the securities to be issued may enable access to the ordinary shares of any company that owns, whether directly or indirectly, more than half of its capital or of any company in which it owns, whether directly or indirectly, more than half of the capital.

2. decides that said powers shall be valid for a period of twenty-six months as of the date of this

meeting; 3. decides to apply the following limits to the present powers granted to the Board of Directors:


54

The nominal value of the ordinary shares liable to be issued by virtue of these powers may not exceed € 4,000,000. Moreover, in the event of the issue of an offer as defined by paragraph II of Article L.411-2 of the French Monetary and Financial Code, this amount shall be limited to 20% of the capital per year.

This ceiling shall also include the total nominal amount of the shares issued, whether directly or indirectly, by virtue of the previous (10th) and subsequent (12th) resolutions.

4. decides to revoke the preferential subscription rights of the holders of those shares covered by

the present resolution, whilst nonetheless leaving the Board of Directors the option of granting preemptive rights to shareholders in accordance with the law;

5. decides that the amount accruing to or expected to accrue to the company for each of the

ordinary shares issued, after taking into account the subscription price of warrants in the event of a share with warrants issue, will be at least equal to the minimum required by the legal and regulatory provisions in force at the time the Board of Directors exercises its powers;

6. decides, in the event of a share issue to remunerate shares tendered under a share exchange

offer, that the Board of Directors shall, within the limits set out above, have the necessary powers to establish the list of shares tendered in the exchange offer, the terms of the issue, parity and, where applicable, the amount of the cash adjustment payable and issue procedures;

7. decides that the number of shares to be issued may be increased in accordance with the

provisions of Article L 225-135-1 of the French Commercial Code and within the limits set by the General Meeting;

8. decides that the Board of Directors shall, within the limits set out above, have the powers to set

the terms of the issue(s), validate the necessary implementation of the resulting capital increases, proceed with the corresponding amendment of the articles of association, deduct, at its discretion, the cost of any capital increases from the related premiums as well as all sums needed to increase the legal reserves to one-tenth of the new capital after each increase, and, more generally, complete all of the necessary formalities therein;

9. rules that the present powers supersede any previous powers bearing the same purpose. Twelfth resolution (EGM) - Powers to increase the company's capital up to a maximum of 10% in order to remunerate contributions in kind or securities The General Meeting, having read the report of the Board of Directors and in accordance with Article L 225-147 of the French Commercial Code: 1. authorizes the Board of Directors, subject to the report of the auditor assigned by the French

courts, to issue ordinary shares or securities providing access to ordinary shares in order to remunerate the contributions in kind made to the company and consisting of capital shares or securities providing access to the capital where the provisions of Article L 225-148 of the French Commercial Code do not apply;

2. decides that said powers shall be valid for a period of twenty-six months as of the date of this

meeting;


55

3. decides that the total nominal value of the ordinary shares liable to be issued by virtue of

these powers may not exceed 10% of the share capital on the date of the present meeting; 4. delegates all necessary powers to the Board of Directors to: approve the valuation of the

contributions; approve the subsequent capital increases; validate their completion; deduct, as applicable, all expenses and rights incurred by said increases from the share premium; deduct from said premium all sums necessary to ensure that the legal reserves equate to one-tenth of the new capital after each increase; modify the company's articles of association accordingly and complete all of the necessary formalities therein.

Thirteenth resolution (EGM) - Powers to carry out a capital increase reserved for the members of the company savings plan (PEE) The General Meeting, having heard the report of the Board of Directors and the Statutory Auditors’ special report on the application of Articles L.225-129-6 and L.225-138-1 of the French Commercial Code and Article L.3332-18 et seq. of the French Labor Code:

1. authorizes the Board of Directors, where it deems it appropriate and at its sole discretion, to carry out, on one or more occasions and via the issue of ordinary cash shares or, where applicable, the free allocation of ordinary shares or shares providing access to the capital, capital increases reserved for those employees and/or directors of the company that are members of a company savings plan in accordance with Article L. 225-180 of the French Commercial Code;

2. cancels in favor of said persons any preemptive subscription rights that may be issued by

virtue of the present authorization;

3. decides that said powers shall be valid for a period of twenty-six months as of the date of this meeting;

4. limits the maximum nominal value of the increase(s) that may be carried out using the delegated powers to 3% of the amount of the share capital at the time of the Board of Directors’ decision to carry out the increase, this amount being independent of any other ceiling governing capital increases;

5. decides that, in accordance with the provisions of paragraph one of the present powers,

the price of the shares to be issued may not be more than 20% lower (or 30% where the period of unavailability under the plan pursuant to Articles L. 3332-25 and L.3332-26 of the French Labor Code is equal to or exceeds ten years) than the average of the share’s first listed price during the 20 trading sessions preceding the Board of Directors’ decision to proceed with the capital increase and corresponding share issue, nor may it be higher than this average;

The Board of Directors may decide whether or not to implement the present authorization, take all necessary measures and to complete all necessary formalities therein.


56

Fourteenth resolution (EGM) - Powers for the allocation of stock subscription and/or purchase options to paid members of staff and/or certain company directors The General Meeting, having heard the Board of Directors’ report and the Statutory Auditors’ special report: - authorizes the Board of Directors, within the framework of Articles L.225-177 to L. 225-185 of

the French Commercial Code, to grant, on one or more occasions and to the beneficiaries cited above, options to subscribe to new company shares or purchase existing company shares following stock repurchases made in accordance with current regulatory provisions;

- decides that said powers shall be valid for a period of thirty-eight months starting as of the date

of this meeting; - decides that the beneficiaries of these options may only be:

*on the one hand, employees, certain individual employees, or certain categories of employee,

*on the other hand, company directors as laid down by law. This shall apply as much to Naturex as to the different companies or economic interest groupings linked to it under the terms of Article L. 225-180 of the French Commercial Code. - decides that the total number of options that may be granted by the Board of Directors by

virtue of these powers may not confer the right to subscribe to or purchase a number of shares representing more than 3% of the existing share capital on the day of the first allocation, it being specified that this ceiling shall include the total number of shares that may be freely allocated by the Board of Directors by virtue of the present powers;

- decides that the share subscription and/or purchase price for beneficiaries will be set on the

day the options are granted by the Board of Directors and may not be less than the minimum price established by the applicable existing regulations;

- decides that no option can be offered:

- either during a period of ten trading days preceding and following the date on which the annual consolidated financial statements are made public,

- or during the period between the date on which the company becomes aware of

information which, if made public, could have a significant impact on the company’s share price, and the ten trading days after this information is made public,

- less than twenty trading days after detaching a coupon giving the right to dividends or to an

increase in capital. - acknowledges that this authorization entails the shareholders’ explicit waiver, in favor of the

option beneficiaries, of their preemptive subscription rights for the shares to be issued as and when the options are exercised;

- confers full powers on the Board of Directors to set the terms and conditions for the allocation

and exercise of said options and, notably, to:


57

set the conditions under which the options will be granted and establish the list or

categories of beneficiaries as provided for above. Set, as applicable, any conditions in terms of number of years' service and decide on the conditions under which the price and the number of shares are to be adjusted, notably in respect of the scenarios laid down in Articles R.225-137 to R.225-142 of the French Commercial Code;

set the period(s) during which the options may be exercised, it being specified that options shall expire six (6) years as from their allocation date;

temporarily suspend the exercise of options for a maximum period of three months in the event of financial transactions implying the exercise of rights attached to company shares;

perform or have performed all acts and formalities needed to make the potential capital increase(s) definitive; modify the articles of association accordingly and, generally, complete all necessary formalities therein;

as it deems appropriate and at its sole discretion, charge all costs, expenses and fees incurred in increases in share capital to the premiums relating to these increases and to deduct therein the sums required to bring the legal reserve up to one-tenth of the share capital, after each increase.

Fifteenth resolution (EGM) - Powers for the free allocation of shares to paid members of staff and/or certain company directors The General Meeting, having heard the report of the Board of Directors and the Statutory Auditors’ special report, authorizes the Board of Directors to proceed, on one or more occasions and in accordance Articles L 225-197-1 and L 225-197-2 of the French Commercial Code, with the free allocation of ordinary shares, both existing and to be issued, to: salaried employees of both the company and any companies linked directly or indirectly to it

under the terms of Article L 225-197-2 of the French Commercial Code, and/or directors who satisfy the conditions of Article L 225-197-1 of the French Commercial

Code.

The number of shares that may be allocated by the Board of Directors by virtue of these powers may not exceed 3% of the existing share capital on the date of their allocation by the Board of Directors, it being specified that this ceiling shall include the total number of shares arising out of the options allocated by the Board of Directors by virtue of the present powers;

The allocation of shares to beneficiaries will only be definitive at the end of an “acquisition” period of:

- at least two years. Moreover, beneficiaries must keep the shares for a minimum period of two years as from their definitive allocation. The Board of Directors may decide to extend the terms of these two periods;


58

- by at least four years for beneficiaries who are not tax residents in France on the day of allocation and whose eligibility coincides with the end of the acquisition period since it has the necessary powers to extend the term of this period. However, failing any tax regulations to the contrary, the minimum holding period shall not apply to these beneficiaries.

By exception, the final allocation may be made before the end of the holding period in the event of the ill-health of the beneficiary as provided for under categories two and three of Article L. 341-4 of the French Social Security Code. The Board of Directors is granted full powers to: set the conditions and, where applicable, the share allocation criteria; determine the beneficiaries of free allocations as well as the number of shares each of them

will receive; assess the impact on the beneficiaries’ rights of any operations that modify the capital or are

likely to impact on the value of the shares allocated and carried out during the acquisition and holding periods, and to subsequently modify or adjust as applicable the number of shares allocated in order to protect the rights of said beneficiaries;

and, failing this, to:

- ensure, where applicable, the existence of sufficient reserves and proceed for each allocation with the transfer to a reserve account of the sums required for the release of the new shares to be allocated;

- decide on the capital increase(s) through the incorporation of reserves, premiums or

earnings corresponding to the issue of free new shares;

- proceed with the acquisition of the shares needed under the share buyback program and assign them to the allocation plan;

- take all necessary measures to ensure beneficiaries comply with the applicable holding

periods;

- and, generally, to complete all of the necessary formalities that the implementation of this authorization implies.

This authorization entails the shareholders’ explicit waiver of their preemptive subscription rights to new shares issued through the incorporation of reserves, premiums and earnings. It is granted for a period of thirty-eight months as of the date of the present General Meeting.


59

3.3 Executive Officers

3.3.1 General Management

We also remind you that during the meeting of June 27, 2002, the Board decided to entrust the general management to the President of the Board of Directors. In view of its size, Naturex does not comply with the Bouton report. The Board of Directors includes the company’s main operational executives and shareholders.

3.3.2 Mandates and functions exercised by company officers during the year

Jacques DikanskyPresident and Chief

Executive Officer14/06/2006 2012

Thierry LambertVice-President and

CFO14/06/2006 2012

Stéphane Ducroux Director 30/06/2008 2014

Edmond de Rothschild Investment

Partners SASDirector 31/12/2009 2014

Natraceutical SA Director 31/12/2009 2014

Francisco Javier Adsera Director 31/12/2009 2014

First name and surname or company

name of executive officers

Mandate within

the company

Date of

appointment

Mandate expiry

date


60

Jacques

Dikansky

Thierry

Lambert

Stéphane

Ducroux

Francisco, Javier

AdseraNatraceutical SA

S.C.I. Les Broquetons Managing Director Managing Director None None None

Naturex Inc. President and CEOVice-President and

CFOVice-President None None

Naturex S.p.A. Chairman of the Board Director None None None

Naturex Morocco S.A President and CEO Deputy CEO None None None

Naturex UK Ltd Director Director None None None

Naturex Trading Shanghai Co. Ltd Director Director None None None

Naturex A.G Director Director None None None

Naturex Spain S.L Director Director None None None

Overseal Natural Ingredients Ltd Director Director None None None

Kingfood Australia Pty Ltd Director Director None None None

Naturex Coöperatief U.A Director Director None None None

Naturex Cooperative LLC President and CEOVice-President and

CFONone None None

The Talin Company Ltd Director Director None None None

Naturex Holdings Inc President and CEOVice-President and

CFONone None None

Britannia Natural Ingredients Ltd Director Director None None None

Overseal Color Inc Director Director None None None

Sanavie S.A Director None None None None

NTC None None None Director None

Ficosa None None None Director None

Tamaxage XXI S,L None None None Director None

Natraceutical Industrial S.L None None None None Director

Forté Pharma S.A.M None None None None Director

Forté Services S.A.M None None None None Director

Mandates and/or positions in

another company (group and non-

group)(1)(2)

First name and surname or company name of executive officers (3)

(1) Including all legal forms and both French and foreign. (2) Appendix 1 of the European regulations governing the registration document. For non-subsidiary mandates, the information must cover the last five years. (3) In light of the corporate purpose of financial investment fund, Edmond de Rothschild Investment Partners SAS, the information pertaining to its mandates is not given in the table above.


61

The executive officers have not been convicted of fraud nor have they received any public sanctions. They have not been the subject of any bankruptcy proceedings or conflicts of interests during the last five years.


62

3.3.3 Compensation of directors and corporate officers

Naturex’s Board of Directors has applied all of the recommendations of the Council of Ministers’ Meeting of October 7, 2008, following the publication of the AFEP/MEDEF guidelines on October 6, 2008, in the minutes of its meeting on December 20, 2008. The terms and conditions of the compensation of the group’s executive officers in 2009 were set by the Board of Directors on March 13, 2009. In accordance with the principle of “comply or explain”, the group hereby confirms that all of the recommendations have been applied. Naturex’s executive officers include:

o Mr Jacques Dikansky, director, President and CEO of Naturex SA o Mr Thierry Lambert, director, Vice-President and CFO of Naturex SA o Mr Stéphane Ducroux, director, Vice-President of Naturex Inc. o Mr Francisco Javier Adsera, director with no other function within Naturex group o Natraceutical SA, represented by Mr François Gaydier, director with no other function

within Naturex group o Edmond de Rothschild Investment Partners SAS, represented by Mr Pierre-Michel Passy

The breakdown of the compensation awarded to each director is outlined below.

11 SSuummmmaarryy ttaabbllee ooff tthhee ccoommppeennssaattiioonn,, ssttoocckk ooppttiioonnss aanndd sshhaarreess ggrraanntteedd ttoo eeaacchh ddiirreeccttoorr


Name: Jacques Dikansky

Position: President and CEO

Remuneration for the f inancial year

(presented in detail in table 2)

Value of options allocated during the year


Value of performance-related shares allocated

during the year (presented in detail in table 6)

TOTAL 820 853

Summary table of the compensation, stock options and shares granted to each

director

FY N-1

681

FY N

775

79

-

139

-


63


Name: Thierry Lambert

Position: Vice-President and CFO

Remuneration for the financial year






TOTAL 371 451

Summary table of the compensation, stock options and shares granted to each director

14

-

346

25

-

FY N-1 FY N

437


Name: Stéphane Ducroux

Position: Director of Naturex Inc

Remuneration for the financial year






TOTAL 200 171

FY N

Summary table of the compensation, stock options and shares granted to each director

FY N-1

- -

160

11

180

19


64

22 CCoommppeennssaattiioonn ooff eeaacchh iinnddiivviidduuaall ddiirreeccttoorr


Name: Jacques Dikansky

Position: President and CEO due paid due paid

- fixed remuneration 326 326 558 553

- variable remuneration - - - -

- bonuses 354 354 216 180

- attendance fees - - - -

- benefits (company car) 1 1 1 1

TOTAL 681 681 775 734

Description of benefits:

Expenses 180 140

Sums in lieu of financial year N

Compensation of each individual director

Sums in lieu of financial year N-

1


Name Thierry Lambert

Position: Vice-President and CFO due paid due paid

- fixed remuneration 210 210 327 215


- bonuses 135 135 108 -


- benefits (company car) 2 2 2 2

TOTAL 346 346 437 217


Expenses 104 99


Sums in lieu of financial year N-

1Sums in lieu of financial year N


65


Name: Stéphane Ducroux

Position: Director of Naturex Inc due paid due paid

- f ixed remuneration 149 149 159 159


- bonuses 31 31 - -


- benefits (company car) - 1 1 1

TOTAL 180 181 160 160


Expenses 108 64

Sums in l ieu of financia l

year N

Sums in l ieu of financia l

year N-1


33 AAtttteennddaannccee ffeeeess

Board members Attendance fees paid in N-1 Attendance fees paid in N

Jacques Dikansky - -

Jacqueline Dikansky - -

Thierry Lambert - -

Stéphane Ducroux - -

TOTAL - -

44 SSuubbssccrriippttiioonn oorr ppuurrcchhaassee ooppttiioonnss aallllooccaatteedd ttoo eeaacchh ddiirreeccttoorr dduurriinngg tthhee ffiinnaanncciiaall yyeeaarr

Options allocated to each director by Naturex

SA (no options on other group companies)No. and date of plan

Type of options

(purchase/subscri

ption)

Value of options

according to the method

used in the consolidated

accounts

Number of options

allocated during

the year

Strike price Exercise period

Jacques DIKANSKY Plan of 13.03.2009 subscription 3.14 25,000 € 24.00 from 13.03.2012 to 13.03.2015

Thierry LAMBERT Plan of 13.03.2009 subscription 3.14 4,500 € 24.00 from 13.03.2012 to 13.03.2015

Stéphane DUCROUX Plan of 13.03.2009 subscription 3.14 3,500 € 24.00 from 13.03.2012 to 13.03.2015

*no options have been allocated on the other group companies


66

55 SSuubbssccrriippttiioonn oorr ppuurrcchhaassee ooppttiioonnss eexxeerrcciisseedd bbyy eeaacchh ddiirreeccttoorr dduurriinngg tthhee ffiinnaanncciiaall

yyeeaarr

None of the directors exercised any subscription or purchase options during the financial year.

66 PPeerrffoorrmmaannccee--rreellaatteedd sshhaarreess aallllooccaatteedd ttoo eeaacchh ddiirreeccttoorr

Performance-related shares allocated to each

director by the issuer and by any group company

No. and date of

plan

Number of shares

allocated during the

year

Value of shares

according to the

method used in the

consolidated accounts

Date of acquisitionDate shares

become available

Jacques Dikansky None None None None None

Thierry Lambert None None None None None

Stéphane Ducroux None None None None None

77 PPeerrffoorrmmaannccee--rreellaatteedd sshhaarreess ooff eeaacchh iinnddiivviidduuaall ddiirreeccttoorr tthhaatt bbeeccaammee aavvaaiillaabbllee

dduurriinngg tthhee yyeeaarr

Performance-related shares of each director

that became available during the yearNo. and date of plan

Number of shares that

became available during the

year

Terms of

allocationYear allocated

Jacques Dikansky None None None None

Thierry Lambert None None None None

Stéphane Ducroux None None None None

3.3.4 Statutory Auditors’ mandate

The mandates of the statutory auditor KPMG SA and its substitute will expire on December 31, 2009. The mandates of the co-statutory auditor Mr Laurent Peyre who represents AREs X.PERT AUDIT and his substitute, Mr Olivier Rousset, will expire on December 31, 2013.


67

4 Notes to the Management Report

4.1 Social considerations

PPaayyrroollll At December 31, 2009, Naturex’s payroll consisted of 194 employees, including: 1 fixed-term contract; 192 open-ended contracts; 1 vocational training contract. During 2009, Naturex recruited 48 new staff, including: 3 fixed-term contracts; 44 open-ended contracts; 1 vocational training contract. 3 employees were made redundant in 2009. Naturex had recourse to 165 part-time staff, 24 of which were still employed by the company on December 31, 2009.

OOrrggaanniizzaattiioonn ooff wwoorrkkiinngg hhoouurrss The working week is set at 35 hours for those employees on a full-time contract. 1 employee works part-time. 1 employee works a 20-hour week. The following table lists the group’s absenteeism rates and motives therein:

Approximate

number of days

Sick leave 1,230

Work-related accidents 478

Parental, maternity and paternity leave 428

Total 2,136


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Changes in social charges compared with the previous year are presented in the following table:

in thousands of euros 2008 2009 Change

URSSAF 2,062 2,227 165,339

ASSEDIC 313 347 34,334

Pensions

IREC 405 425 20,297

CAPIMMEC 255 261 5,399

Retirement

URRPIMMEC 75 42 - 32,921 The following table shows the breakdown by gender of the company’s workforce:

Men Women Total %men % women

Blue collar* 64 0 64 100% 0%

Vocational trainees 0 1 1 0% 100%

Employees & Technicians 10 30 40 25% 75%

Supervisors 18 8 26 69% 31%

Executives 49 15 64 77% 23%

Total 141 54 195 72% 28% * Blue collar workers handle loads that are considered to be too heavy for women - hence the absence of women blue collar workers in line with current legislation.

RReemmuunneerraattiioonn,, ffrriinnggee bbeenneeffiittss aanndd cchhaannggeess

Changes in remuneration over the last 4 years are as follows (in €): 2006 DAS data 3,602,548 2007 DAS data 4,219,011 2008 DAS data 5,325,174 2009 DAS data 5,851,276 Change over 2007/2006 + 616,463 Change over 2008/2007 + 1,106,163 Change over 2009/2008 + 526,102

PPrrooffeessssiioonnaall rreellaattiioonnss aanndd ccoolllleeccttiivvee aaggrreeeemmeennttss

There were 5 meetings with employee representatives and 5 meetings with the Works Council in 2009.

HHeeaalltthh aanndd SSaaffeettyy ccoonnddiittiioonnss

The Health and Safety Committee (CHSCT) met 5 times in 2009.


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TTrraaiinniinngg

12 external training programs were held in 2009:

Payroll software and time management: 3 people

Management of expatriate personnel: 1 person

First-aid: 7 people

Languages (English, Chinese, German): 4 people

Electrical certifications: 6 people

Training in the transport of hazardous goods: 1 person

ATEX area permit: 3 people

Fork-lift truck operation and safe driving: 11 people

Editing safety data factsheets: 3 people

REACH (Registration, Evaluation and Authorization of Chemicals): 1 person

Dried plants and vegetable powders: 1 person

IT (new SQL server): 2 people

Factory manager: 1 person

Accounting (consolidation): 3 people

Communications and marketing: 1 person

EEmmppllooyymmeenntt aanndd iinntteeggrraattiioonn ooff ddiissaabblleedd wwoorrkkeerrss

The company currently employs one disabled worker.

CChhaarriittyy wwoorrkk

None.

OOuuttssoouurrcciinngg Outsourcing linked to the normal operation of the company, such as the upkeep of green spaces, office maintenance and financial communications, etc. amounted to € 3.3 million for 2009 including € 1.0 million in production outsourcing.


70

4.2 Delegated powers in the event of a capital increase

Date of EGM

Expiry date of

delegated

power

Authorized amount

Increase(s) carried

out in previous

years

Increase(s) carried

out in financial

year 2009

Amount outstanding

on the date this table

was created

29/06/2007 30/06/2009 4,000,000 € 1,300,295 € 2,699,706 €

30/06/2009 30/08/2011 4,000,000 € 4,000,000 €

Authorization to increase the number of issues in the

event of excess demand30/06/2008 30/08/2010 600,000 € 600,000 €

30/06/2008 30/06/2009 4,000,000 € 4,000,000 €

30/06/2009 30/08/2011 4,000,000 € 4,000,000 €

Authorization to increase the capital with no pre-

emptive subscription rights as part of an offer governed

by Article L.411-2 II of the French Monetary and

Financial Code

30/06/2009 30/08/2011 20% of capital 20% of capital

Authorization to increase the number of issues in the

event of excess demand30/06/2008 30/08/2010 600,000 € 600,000 €

29/06/2007 14/06/2009 10 % of capital 10 % of capital




29/06/2007 29/08/2009 3% of capital 3 % of capital



29/06/2007 29/08/2009 10 % of capital

30/06/2009 30/08/2011 10 % of capital




30/06/2009 30/08/2012 3 % of capital 3% of capital

30/06/2008 30/06/2009 4,000,000 € 4,000,000 €

30/06/2009 29/08/2011 40,000,000 € 40,000,000 €


29/06/2007 29/08/2010 3% of capital 3% of capital

Authorization to allocate free shares to be issued with

no pre-emptive subscription rights 30/06/2009 30/08/2012 3 % of capital 3 % of capital

10 % of capital

Authorization to issue stock options with no pre-

emptive subscription rights

Authorization to increase the capital through the

incorporation of reserves, premiums or earnings

Authorization to allocate free shares to be issued

Authorization to increase the capital through the issue

of ordinary shares or securities with pre-emptive

subscription rights maintained

Authorization to increase the capital in order to

remunerate contributions in kind

Authorization to increase the capital through the issue

of ordinary shares or securities with no pre-emptive

subscription rights maintained

Authorization to increase the capital with no pre-

emptive subscription rights for the benefit of members

of a company savings plan

Authorization to increase the capital in remuneration of

the contribution of shares


71

4.3 Five-year financial summary for Naturex SA

in euros 31/12/2009 31/12/2008 31/12/2007 31/12/2006

Capital at year end

Share capital 9,546,000 4,522,469 4,481,264 4,450,908

Existing number of ordinary shares 6,364,000 3,014,979 2,987,509 2,967,272

Maximum number of future shares to be created 177,306 128,964 107,985 84,716

Operations and results for the financial year

Revenues before tax 52,493,871 50,932,798 39,144,116 32,514,961

Current income -417,269 482,420 -1,000,068 1,138,784

Income tax -772,817 -1,060,802 0 235,684

Employee profit-sharing in respect of financial year 0 0 0 0

Net income 206,903 1,328,217 -1,108,309 903,055

Earnings distributed 0 387,826 0 296,727

Earnings per share

Net earnings per share 0.03 0.44 0 0.30

Dividend attached to each share 0.11 0.10 0.10 0.10

Payroll

Average headcount 186 176 151 131

Total payroll expenses 6,269,357 5,798,724 4,667,688 3,814,727

Total social charges 2,700,295 2,429,328 1,816,144 1,580,658


72

5 President’s Report on Internal Control procedures

PPrreessiiddeenntt’’ss rreeppoorrtt oonn tthhee iinntteerrnnaall ccoonnttrrooll pprroocceedduurreess iimmpplleemmeenntteedd bbyy tthhee

ccoommppaannyy ((AArrttiicclleess LL..222255--3377 ooff tthhee FFrreenncchh CCoommmmeerrcciiaall CCooddee))

Under the supervision of the Board of Directors, the management is responsible for defining and implementing appropriate and effective internal control procedures. In accordance with Article L.225-37 of the French Commercial Code, the President of the Board of Directors is required to report on:

the manner in which the Board of Directors prepares and organizes the tasks it is required to perform;

internal control procedures;

where applicable, the restrictions that the Board of Directors imposes on the powers of the Chief Executive Officer. I would remind you on this point that the Board of Directors has imposed no restrictions either on my own powers as President and Chief Executive Officer or on those of Thierry Lambert as Vice-President and Chief Financial Officer.

As regards the other two points, note that this report covers all of the controlled companies that fall within the group’s consolidation scope. At its meeting on April 15, 2009, Naturex’s Board of Directors voted to apply all of the guidelines published by the AFEP/MEDEF on October 6, 2008, regarding the compensation of the directors of listed companies. Additional information on the compensation of Naturex’s executive officers is given in Chapter 3.3 of the Management Report.

55..11 CCoonnddiittiioonnss ffoorr pprreeppaarriinngg aanndd oorrggaanniizziinngg tthhee ttaasskkss ccaarrrriieedd oouutt bbyy tthhee BBooaarrdd

ooff ddiirreeccttoorrss

LLeeggaall ssttrruuccttuurree Naturex is a French Société Anonyme (public limited company) with a Board of Directors. The Board appointed Thierry Lambert as Vice-President and myself as President and Chief Executive Officer on June 14, 2006 for a 6-year term of office. At the end of 2009, the Board of Directors consisted of 6 members. Other group companies in 2009:

NNaattuurreexx MMoorrooccccoo:: is a Moroccan Société Anonyme (public limited company) with a Board of Directors. I hold the position of President and Chief Executive Officer and Thierry Lambert that of Chief Executive Officer. Naturex SA also holds a directorship in the company.


73

NNaattuurreexx IInncc..:: Naturex Inc. is an incorporated company, registered in the state of Delaware. It has 2 offices in the states of New Jersey and California. The Board of Directors is made up of myself (President) and Thierry Lambert (Vice-President). Burton K. Haimes, a lawyer with Thelen Reid Priest, is secretary of the Board of Directors.

SSCCII LLeess BBrrooqquueettoonnss:: SCI les Broquetons is a French Société Civile Immobilière (real estate company) of which I am the General Manager and Thierry Lambert the Managing Director.

NNaattuurreexx SS..pp..AA..:: Naturex S.p.A is a Société Anonyme (public limited company) with a Board of Directors that is governed by Italian law. The Board of Directors is made up of myself (President), Thierry Lambert and Benoît Doithier.

NNaattuurreexx UUKK LLttdd:: Naturex UK Ltd is a Limited Company governed by British law. The Board of Directors is made up of myself and Thierry Lambert.

NNaattuurreexx TTrraaddiinngg SShhaanngghhaaii CCoo.. LLttdd..:: Naturex Trading Shanghai Co. is a Limited Company governed by Chinese law. The Board of Directors is made up of myself and Thierry Lambert.

NNaattuurreexx AA..GG:: Naturex A.G is a Société Anonyme (public limited company) governed by Swiss law. The Board of Directors is made up of myself, Simon Cuthbert, Andreas Moll and Thierry Lambert.

NNaattuurreexx SSppaaiinn SS..LL:: Naturex Spain S.L is a Société à Responsabilité Limitée (limited liability company) governed by Spanish law. The Board of Directors is made up of myself and Thierry Lambert.

OOvveerrsseeaall NNaattuurraall IInnggrreeddiieennttss LLttdd Overseal Natural Ingredients Ltd is a Limited Company governed by British law. The Board of Directors is made up of myself, Thierry Lambert and Sarah Pope.

KKiinnggffoooodd AAuussttrraalliiaa PPttyy LLttdd Kingfood Australia Pty Ltd is a Limited Company governed by Australian law. The Board of Directors is made up of myself, Thierry Lambert and Christine Giuliano. Christine Giuliano is also the secretary of the Board of Directors.

NNaattrraacceeuuttiiccaall RRuussssiiaa LLttdd:: Natraceutical Russia Ltd is a Limited Company governed by Russian law. Anna Shelepova is its General Manager.

NNaattuurreexx CCooööppeerraattiieeff UU..AA:: Naturex Coöperatief U.A is a cooperative that accepts no liability governed by Dutch law. The Board of Directors is made up of myself, Thierry Lambert, Cathelijn Kok and Tako Van Ginkel.


74

NNaattuurreexx CCooooppeerraattiivvee LLLLCC:: Naturex Cooperative LLC is a Limited Liability Company governed by US law, registered in the state of Delaware. The Board of Directors is made up of myself (President) and Thierry Lambert (Vice-President). Burton K. Haimes, a lawyer with Thelen Reid Priest, is secretary of the Board of Directors.

TThhee TTaalliinn CCoommppaannyy LLttdd:: The Talin Company Ltd is a Limited Company governed by British law. The Board of Directors is made up of myself and Thierry Lambert.

NNaattuurreexx HHoollddiinnggss IInncc..:: Naturex Holdings Inc. is an Incorporated Company governed by US law, registered in the state of Delaware. The Board of Directors is made up of myself (President) and Thierry Lambert (Vice-President). Burton K. Haimes, a lawyer with Thelen Reid Priest, is secretary of the Board of Directors.

BBrriittaannnniiaa NNaattuurraall IInnggrreeddiieennttss LLttdd:: Britannia Natural Ingredients Ltd is a Limited Company governed by British law. The Board of Directors is made up of myself and Thierry Lambert.

OOvveerrsseeaall CCoolloorr IInncc..:: Overseal Color Inc. is an Incorporated Company governed by US law, registered in the state of Delaware. The Board of Directors is made up of myself and Thierry Lambert.

EExxttrraaccttooss NNaattuurraaiiss ddaa AAmmaazzôônniiaa LLttddaa:: Extractos Naturais da Amazônia Ltda is a Limited Company governed by Brazilian law. Cleonice Da Rochas Santos is its Managing Director.

GGoovveerrnniinngg pprriinncciipplleess ffoorr BBooaarrdd mmeeeettiinnggss

The Board of Directors met 14 times in 2009. The attendance rate amongst directors was 70%. Meetings are not subject to a pre-defined, detailed schedule. Board meetings are held either between individuals physically present or by videoconference in accordance with the articles of association. Although this list is by no means exhaustive, the subjects discussed generally concern:

- the approval of the accounts; - the preparation of AGMs; - the implementation of share buyback programs authorized by the AGM; - the allocation of stock options; - the remuneration of salaried directors; - the approval of any loans to be taken out as applicable; - the presentation and approval of the transfer by Natraceutical of its Ingredients

Division to Naturex; - the validation of internal control procedures. - The executive bodies of the other companies within the consolidation scope

(Committees, AGMs, Board of Directors’ meetings) meet according to local legal requirements as well as on a needs basis.


75

CCoommmmiitttteeeess

Naturex does not have an audit committee. In accordance with Article L.823-20 of the French Commercial Code, this function is performed by the Board of Directors. The Collegio Sindacale (Board of Auditors) of the Italian company Naturex S.p.A. meets every three months to draft a report on the sound management of the company. The Collegio Sindacale is made up of independent accountant auditors.

IInntteerrnnaall rreegguullaattiioonnss

The internal regulations were approved by the Works Council at the meeting on March 19, 2004.

55..22 IInntteerrnnaall ccoonnttrrooll pprroocceedduurreess

55..22..11 PPoolliiccyy aanndd gguuiiddeelliinneess

Naturex group’s existing policy in this respect states that internal control is one of the fundamental responsibilities of the group’s General Management and the management of each operating entity. In line with the definition given in the COSO Report4, the reference guidelines adhered to by the group, this process consists in implementing and constantly adapting appropriate management systems, in order to provide the directors and senior management with reasonable assurance that financial information is reliable, that legal or internal regulations are complied with and that the company’s main processes operate effectively and efficiently. One of the aims of internal control is to prevent and minimize the risk of error and to prevent fraud. Like any control system, however, it cannot provide any absolute guarantees that the risk of error or fraud is entirely eliminated or under control.

55..22..22 KKeeyy pprroocceesssseess hhaavviinngg aann iimmppaacctt oonn tthhee rreelliiaabbiilliittyy ooff tthhee ggrroouupp’’ss ffiinnaanncciiaall

iinnffoorrmmaattiioonn

The processes that have an impact on the reliability of financial information concern the following departments:

Finance (drawing up of financial statements, consolidation, preparation of financial communications, legal and tax management, etc.).

Purchasing and procurement (contracts, procurement, booking of invoices, payment of invoices).

Sales (from the time an order is placed to the point at which its invoice is booked, payment of invoices and collection).

IT (security management in particular).

Payroll and management of company commitments.

Management of fixed assets (tangible and intangible).

Inventory management (physical inventory, valuation, etc.).

Financing and cash management.

4 COSO: Committee of Sponsoring Organization of the Treadway Commission.


76

55..22..22..11 FFiinnaanncciiaall iinnffoorrmmaattiioonn -- RReelliiaabbiilliittyy aanndd pprroocceedduurree

Accounting information is recorded for each site on an approved software. All accounting documents are sent as a priority to the accounts department for recording. Their consistency is checked on a monthly basis using internal procedures that reconcile management data with the information recorded in the different accounting systems. At each closing of the accounts, a statement is issued per accounting accounts stipulating the account balance and nature of the transactions made. The Chief Accountant approves all statements for each of the sites. Consolidated information is produced using data checked internally on a monthly basis by the different companies and audited by outside firms. There is no legal connection between the various outside firms used by the different subsidiaries. Each subsidiary produces a report on its monthly accounts which enables the general management to form an overall view of the group’s activities. The report is structured to highlight any significant discrepancies with budgets and to provide a systematic comparison of a certain number of management indicators so as to establish the need for any corrective measures. Inter-company reconciliations are carried out monthly and validated by the Chief Accountant. The consolidated financial statements are centralized at head office once the consistency of the financial information collected has been checked by each subsidiary. The group will alter its accounting system in 2010 so that all companies have the same programs and are connected to Naturex's ERP software.

55..22..22..22 PPuurrcchhaassiinngg aanndd pprrooccuurreemmeenntt pprroocceedduurree

Each invoice is subject to an electronic approval process and each head of department is responsible for their own purchasing in line with their respective budgets. Each subsidiary has its own purchasing department which is responsible for procuring raw materials based on production schedules, for the management of logistics in line with client order schedules, and for ensuring compliance with the legal requirements governing imports. The purchasing departments issue order forms that state all of the information to be specified on an invoice. The forms are then sent to the person responsible for the order for their approval and then to their line manager if they are not authorized to approve the amounts in question. Those persons responsible for validating an order forms must have signed a delegation of power. Amounts are limited and different according to the respective rights of each individual. Invoices received are sent in electronic format to the person in charge of the supplier account who then checks that it is consistent with the order before validating its payment. Invoices can only be reconciled once the order has been approved and carried out or received.

55..22..22..33 SSaalleess mmaannaaggeemmeenntt aanndd aaddmmiinniissttrraattiioonn pprroocceedduurree

For each order placed, an acknowledgement of receipt upon delivery is entered into an order book, which in turn serves to establish a production schedule.


77

Once the invoice has been issued, the acknowledgement is deleted from the order book and the production schedule and recorded as an inventory outflow. At each month-end, the revenues recorded in the sales management and accounting applications are reconciled. Customer accounts in the UK, Italy, Russia, Germany, Switzerland, the Benelux countries, Northern and Eastern Europe and, where applicable, Morocco are managed by the European Sales Directors. Customer accounts in the US are managed by the US head of Naturex Inc. and the Sales Director for Northern Asia handles the accounts in China, Japan, Korea and Taiwan. The Director for the Middle East, Southern Asia and the Pacific handles the customer accounts within his remit, and the Managing Director of Kingfood Australia is in charge of the customers of the group's food businesses in the Pacific region. Customer accounts are also controlled by the accounts department which informs the general management of any overdue payments.

55..22..22..44 IITT pprroocceedduurree

IT security consists of different levels of protection that are independent of each other. Naturex has an anti-virus system that scans the workstations as they start up. The anti-virus system is automatically updated every hour via the supplier’s website so that the latest registered viruses are detected and eradicated. The anti-virus system is installed on each workstation and server and is coordinated via the main production server. It is designed to counteract any virus resulting from the use of external media such as diskettes, CD-ROM, but also internal media such as e-mail or Internet. Naturex is equipped with IT firewalls to avoid basic intrusions by hackers. Firewalls are configured so as to provide network access to only a certain number of IP addresses that correspond either to users or to the addresses of listed Internet access providers. Each site is equipped with a firewall as they all use a software application that allows them to access the Avignon network. Moreover, all suppliers are party to an IT security charter that lists any Internet addresses likely to infect our network and that they are required to block. These addresses are no longer accessible to users. Finally, a number of prohibited key words have been defined, which prevent persons from viewing sites that contain these words. Data is backed up once a month. For the rest of the time, Naturex uses a snapshot system which records data at a given point in time. Snapshots are taken around 10 times a day. Daily snapshots are kept for the past 5 working days and weekly snapshots for the past 3 weeks. Data is backed up onto separate disks at the start of each month which are then kept for up to 3 years. These back-ups are carried out by the Head of Group networks and under the responsibility of the Head of Group Information Systems. When it comes to software programs, Naturex’s operating servers are virtual which allows for a rapid recovery in the event of damage and safeguards the operational continuity of the networks. All hardware required for the operation of the network is located in an air-conditioned, fireproof server room with a separate, secure access. The room is equipped with fire detectors and, should a fire break out, the systems release an oxygen-absorbing gas (FM200).


78

Only the personnel who work in the IT department and who have the access code (under the responsibility of the Head of Group networks and/or the Head of Group Information Systems) are permitted to enter the room. Management of the network is carried out on a daily basis by the company’s IT staff.

55..22..22..55 SSoocciiaall mmaannaaggeemmeenntt pprroocceessss

For the Naturex and Naturex Morocco sites, an annual schedule for social security declarations is drawn up each year to ensure compliance with the legal timeframes and payment conditions. Each site has one person who is specifically responsible for the social management of employees and therefore for preparing monthly salaries. Every month, a report is submitted to the Head of Human Resources for France and the Head of Accounting for Morocco in order to ensure compliance with the company’s commitments. Both sites subscribe to several specialist reviews in employment law and the company also calls upon the services of specialist law firms where necessary. Naturex Inc., Naturex S.p.A., Naturex UK and Naturex Trading Shanghai outsource their payroll and social security declarations to an external service provider.

55..22..22..66 FFiixxeedd aasssseettss pprroocceedduurree

All fixed assets are listed using the software provided for this purpose. Each department head must ensure that any purchases made are included in the company's fixed assets. They each keep a duplicate of the fixed asset invoices for their department and are required to return this duplicate to the accounts department if any of the assets to which it relates are sold on or disposed of. A physical inventory is drawn up on a regular basis in order to reconcile accounting assets with physical assets.

55..22..22..77 IInnvveennttoorryy mmaannaaggeemmeenntt pprroocceedduurree

The inventories of all sites are managed by IT application. Inventory outflows as a result of sales are automatically eliminated from the IT inventory. Other operations, such as the receipt of goods and production operations are entered in the system by barcode by the warehouse personnel and inventory managers. Inventory managers are responsible for ensuring that the permanent inventory is consistent with all inventory movements entered. A number of indicators have been introduced in order to detect potential anomalies. A physical spot-check is carried out several times a year on a certain number of products and once a year for all products by a specialist outside company. The inventory manager does a third count in the event of any discrepancies.


79

55..22..22..88 FFiinnaanncciinngg aanndd ccaasshh mmaannaaggeemmeenntt Financing and cash management is the responsibility of the Head of Finance and Administration. He receives a daily report on the banking balance of each account. Each site has a designated person in charge of drawing up these daily positions and notifying the Head of Finance and Administration of any anomalies. Each site can consult its account statements on the Internet or via a banking teletransmission software. Only the President and Chief Executive Officer, the Vice-President and CFO and the Directors of the group's industrial plants have the necessary bank authorizations to incur expenses that must also comply with purchasing and procurement procedures.

55..22..33 PPeerrssoonnss iinnvvoollvveedd iinn iinntteerrnnaall ccoonnttrrooll

According to the group’s internal control policy, internal control is the responsibility of: o the managers of the operating units for subsidiaries and the department heads (purchasing,

sales, R&D, production, accounting, IT) for Naturex SA; o the general management, which validates orders (suppliers and clients) and monitors all

regulations; o the internal control of factors that may compromise the reliability of the group’s financial

information (e.g. consolidation, accounting) is the specific responsibility of Vice-President and CFO. The group’s Chief Accountant supervises the financial statements of all of the group's different entities and, via the accounts managers of the various subsidiaries, ensures all procedures and statutory deadlines are complied with. He also monitors the quality of the group's financial and accounting information.

55..22..44 IInntteerrnnaall ccoonnttrrooll ddooccuummeennttaattiioonn

Most of the key aspects of internal control are included in the documentation produced by the group’s quality assurance units.

55..22..55 AAsssseessssmmeenntt ooff iinntteerrnnaall ccoonnttrrooll This is carried out by the group’s general management.


80

6 Statutory Auditors’ Report on the report prepared by the President on internal control

Statutory Auditors' Report on the report by the President of the Board of Directors of Naturex in accordance with Article L.225-235 of the French Commercial Code Year ended December 31, 2009 To the shareholders, In our capacity as Statutory Auditors of Naturex S.A., and pursuant to the provisions of Article L. 225-235 of the French Commercial Code, we report to you on the report prepared by the President of your company in accordance with the provisions of Article L. 225-37 of the French Commercial Code for the year ended December 31, 2009. It is the responsibility of the President to draw up and submit to the Board of Directors a report on the internal control and risk management procedures in place within the group. The report must also contain all of the other information required under Article L.225-37 of the French Commercial Code, notably that relating to corporate governance. Our role is to:

• report to you our observations on the information set out in the President's report concerning the internal control and risk management procedures governing the preparation and processing of financial and accounting information and, • certify that the report contains all of the information required under Article L.225-37 of the French Commercial Code. It is not, however, our task to verify the sincerity of said other information. We conducted our audit in accordance with those professional standards generally accepted in France.

Information on the internal control and risk management procedures governing the preparation and processing of financial and accounting information Current professional standards require that we perform due diligence in order to verify the accuracy of the information given in the President's report regarding the internal controls and the management of risks linked to the way in which accounting and financial information is drawn up and processed. Said due diligence requires that we:

• review the internal control and risk management procedures governing the way in which the supporting accounting and financial information for the President's report is drawn up and processed as well as reviewing all other existing documentation, • review the work carried out in order to obtain this information and draw up existing documentation, • establish whether the major failings we noted with respect to the internal control of the manner in which accounting and financial information is drawn up and treated are sufficiently compensated by the information given in the President's report.


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On the basis of this audit, we have no matters to report in connection with the information and the assertions given on the internal control and risk management procedures relating to the preparation and processing of financial and accounting information, contained in the report of the President of the Board of Directors, prepared in accordance with the provisions of Article L. 225-37 of the French Commercial Code. Other information We hereby certify that the report of the President of the Board of Directors contains the other information required under Article L.225-37 of the French Commercial code. Paris La Défense - April 26, 2010 Avignon – April 26, 2010 Erreur ! Condition du test manquante. KPMG S.A. AREs X.PERT Audit Michel Piette Laurent Peyre


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83

84

Chapter 3

Consolidated financial statements and notes

Chapter 3 – Consolidated financial statements and notes

85

Consolidated balance sheet

in thousands of eurosNotes 31/12/2009 31/12/2008

NON-CURRENT ASSETS 164,009 91,419

Goodwill 6, 7, 8 74,091 53,591

Other intangible fixed assets 8 3,003 2,184

Tangible fixed assets 8 83,694 33,617

Financial assets 8 1,372 226

Shares accounted for using the equity method 8 - 984

Deferred tax assets 11 1,849 818

CURRENT ASSETS 133,294 71,488

Inventories 9 76,819 47,190

Tax receivables 1,504 2,896

Trade and other receivables 10 39,359 17,901

Cash and cash equivalents 12 15,612 3,501

NON-CURRENT ASSETS HELD FOR SALE 8.4 795 819

TOTAL ASSETS 298,097 163,725


Capital 9,546 4,522

Issue premium 117,265 39,902

Reserves 29,551 24,663

Translation differences -11,595 -9,856

SHAREHOLDERS' EQUITY 144,767 59,231

Group share 144,767 59,231

Minority interests 353 349

NON-CURRENT LIABILITIES 91,953 58,649

Long-term financial debt 15 82,880 56,553

Non-current provisions 14 1,511 -

Deferred taxes 13 7,562 2,096

CURRENT LIABILITIES 61,378 45,845

Short-term provisions 14 2,772 28

Tax payables 397 134

Trade and other payables 36,663 19,147

Other financial liabilities 15 16,306 15,564

Bank overdrafts and loans 15 5,238 10,972

TOTAL EQUITY & LIABILITIES 298,097 163,725


86

Consolidated income statement

in thousands of eurosNotes 31/12/2009 31/12/2008

Revenue 17 101,917 93,178

Immobilized production 296 485

Inventories -207 3,179

Operating subsidies 1,467 980

Other operating revenues 2,209 1,059

Purchases -33,184 -33,022

Payroll expenses 18 -23,770 -22,225

External expenses 19 -27,958 -25,907

Taxes -1,018 -950

Depreciation and amortization expense 8.2 -5,278 -4,486

Other operating expenses 20 -1,413 -1,036

OPERATING INCOME 17 13,062 11,254

Cash and cash equivalents 43 268

Cost of gross financial debt -4,188 -5,168

COST OF NET FINANCIAL DEBT 21 -4,145 -4,900

OTHER FINANCIAL INCOME AND EXPENSES 21 -526 -784

INCOME BEFORE TAX 8,391 3,871

NET INCOME OF COMPANIES ACCOUNTED FOR USING THE

EQUITY METHOD -1,206 420

TAX EXPENSE 22 -1,938 -1,700

NET INCOME FOR THE PERIOD 5,247 4,291

Group share 5,247 4,250

Minority interests 0.3 40


87

Summary of global results

in thousands of euros 31/12/200931/12/2008

restated

NET INCOME FOR THE PERIOD 5,247 4,291

Profit/loss arising out of the translation of the financial statements of foreign entities -1,745 3,417

TOTAL GLOBAL INCOME 3,501 7,708

Group share 3,504 7,667

Minority interests -3 41


88

Cash flow statement


89


Income 5,247 4,291

Net depreciation and allow ances 6,464 4,509

Income and expenses linked to stock options 159 253

Change in deferred taxes 767 117

Capital gains/(losses) on disposals (14) 132

Cost of net f inancial debt 4,145 4,900

Net tax expense 1,938 1,700

18,706 15,901

Taxes paid (1,436) (1,543)

Change in w orking capital requirement linked to operations (1) 802 (4,411)

18,072 9,947

Business combinations (5,561) -

Acquisitions - (12,902)

Goodw ill - (465)

Intangible investments (951) (743)

Tangible investments (8,265) (8,223)

Financial investments (58) (46)

Investments in companies - (420)

Disposal of f ixed assets 33 35

Repayment of long-term investments 83 1,035

(14,718) (21,729)

Capital increase - shareholders of the parent (w arrants and stock options) 16,771 505

Acquisition of ow n shares - 31

Dividends paid to shareholders of the parent (388) (299)

New loans 70,335 15,905

Loan repayments (69,626) (6,856)

Increase in other f inancial liabilities 313 (234)

Financial interest paid (4,145) (4,900)

13,261 4,152

Effect of foreign exchange rate changes (2) (478) 1,882

16,136 (5,749)

Opening cash position (7,471) (1,722)

Closing cash position 8,665 (7,471)

Cash flow before cost of net financial debt and taxes

Net cash flow from operating activities

Net cash flow from investing activities

Net cash flow from financing activities

Change in cash flow (3)


90

Cash flow statement (cont'd)

(1)

in thousands of euros 31/12/2009 31/12/2008

Change in tax receivables (1,417) 1,113

Change in inventories (2,333) 4,831

Change in trade and other receivables 4,733 2,194

Change in tax liabilities 126 171

Change in net tax expense 1,938 1,700

Taxes paid (1,436) (1,543)

Change in trade and other payables (2,413) (4,054)

Change in working capital requirement (802) 4,411

(2)


Shareholders' equity (1,727) 3,418

Fixed assets 1,529 (3,062)

Amortization (283) 597

Borrowings 3 929

Effect of foreign exchange rate changes (478) 1,882

(3) in thousands of euros

Cash Opening Change

Cash 3,501 8,476

Bank loans (10,972) 7,660

Cash and cash equivalents (7,471) 16,136

Cash position at 31/12/2008 Opening Change

Cash 9,112 (5,611)

Bank loans (10,833) (138)

Cash and cash equivalents (1,722) (5,749)

Flows linked to the acquisition of the Ingredients Division of Natraceutical group have no impact on the group's cash position, with the exception of the cash payment of € 5 million booked to investments.


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Changes in consolidated shareholders’ equity

Group share

Capital Premiums Own Group Translation Income Shareholders'

Group share shares reserves differences (Group) equity

(Group) (Group)

Shareholders' equity at 01/01/2008 4,481 39,438 -103 15,781 -13,215 4,341 50,724

Income for the year - - - - - 4,250 4,250

Change in translation differences - - - - 3,417 - 3,417

Other components of overall income - - - - 3,417 - 3,417

Total income and expenses booked over the period - - - - 3,417 4,250 7,667

Appropriation of income - - - 4,341 - -4,341 -

Dividends paid - - - -299 - - -299

Capital increase - - - - - - -

Exercise of stock warrants 11 237 - - - - 248

Exercise of stock options 30 227 - - - - 257

Allocation of stock options - - - 253 - - 253

Change in own shares - - 31 - - - 31

Minority shares acquired - - - - - - -

Total transactions with owners 41 464 31 4,295 - -4,341 490


Capital Premiums Own Group Translation Income Shareholders'

Group share shares reserves differences (Group) equity

(Group) (Group)


Income for the year 5,247 5,247

Change in translation differences -1,742 -1,742

Other components of overall income - - - - -1,742 - -1,742

Total income and expenses booked over the period - - - - -1,742 5,247 3,504

Appropriation of income - - - 4,250 - -4,250 -

Dividends paid - - - -388 - - -388

Capital increase 5,023 77,361 - - - - 82,384

Exercise of stock warrants - - - - - - -

Exercise of stock options 2 - - - - 3

Allocation of stock options - - - 159 - - 159

Change in own shares - - -129 - - - -129

Minority shares acquired - - - - - - -

Total transactions with owners 5,024 77,363 -129 4,021 - -4,250 82,028



92

Minority interests

Shareholders' Total

Consolidated equity Minority Translation Income Shareholders' shareholders'

(Group) reserves differences equity equity

Shareholders' equity at 01/01/2008 50,724 343 -59 24 309 51,341

Income for the year 4,250 40 40 4,291

Change in translation differences 3,417 1 1 3,418

Other components of overall income 3,417 - 1 - 1 3,418

Total income and expenses booked over the period 7,667 - 1 40 41 7,708

Appropriation of income - - -

Dividends paid -299 - -299

Capital increase - - -

Exercise of stock warrants 248 - 248

Exercise of stock options 257 24 -24 - 257

Allocation of stock options 253 - 253

Change in own shares 31 - 31

Minority shares acquired - - -

Total transactions with owners 490 24 - -24 - 490


Shareholders' Total

Consolidated equity Minority Translation Income Shareholders' shareholders'

(Group) reserves differences equity equity


Income for the year 5,247 5,247

Change in translation differences -1,742 3 3 -1,739

Other components of overall income -1,742 - 3 - 3 -1,739

Total income and expenses booked over the period 3,504 - 3 3 3,508

Appropriation of income - 40 -40 - -

Dividends paid -388 - -388

Capital increase 82,384 - 82,384

Exercise of stock warrants - - -

Exercise of stock options 3 - 3

Allocation of stock options 159 - 159

Change in own shares -129 - -129

Minority shares acquired - - -

Total transactions with owners 82,028 40 - -40 - 82,028

Shareholders' equity at 31/12/2009 144,414 408 -55 353 144,767

Minorities

Minorities


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Contents

Note 1 General information .........................................................................................96

1.1 Highlights .......................................................................................................................................... 96

1.2 Events occurring after closure ......................................................................................................... 101

Note 2 Consolidation scope ....................................................................................... 101

2.1 Consolidated companies and methods ............................................................................................ 101

2.2 Changes in consolidation scope over the period ............................................................................. 103

2.3 Organizational Structure ................................................................................................................. 104

2.4 Affiliates .......................................................................................................................................... 104

Note 3 Compliance statement .................................................................................... 105

Note 4 Accounting principles and methods ................................................................ 107

4.1 Changes in method or presentation following the obligatory application of new accounting standards as of January 1, 2009 ...................................................................................................... 107

4.2 New standards and interpretations yet to be applied ..................................................................... 108

4.3 Estimations and opinions ................................................................................................................ 108

4.4 Seasonal effects ............................................................................................................................... 109

4.4 Entry value of assets and liabilities.................................................................................................. 110

Note 5 Valuation rules and methods .......................................................................... 112

5.1 Goodwill .......................................................................................................................................... 112

5.2 Intangible assets (excluding goodwill) ............................................................................................ 112

5.3 Tangible fixed assets ....................................................................................................................... 113

5.4 Financial assets................................................................................................................................ 113

5.5 Inventories ....................................................................................................................................... 114

5.6 Accounts receivable ......................................................................................................................... 114

5.7 Activities, assets and liabilities held for sale.................................................................................... 114

5.8 Staff benefits ................................................................................................................................... 114

5.9 Sale of assets ................................................................................................................................... 115

5.10 Operating segments ........................................................................................................................ 116

Note 6 Business combinations ................................................................................... 117

Note 7 Goodwill ........................................................................................................ 119

Note 8 Non-current assets ......................................................................................... 120


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8.1 Acquisitions and disposals ............................................................................................................... 120

8.2 Amortization and depreciation ........................................................................................................ 121

8.3 Lease finance assets ........................................................................................................................ 122

8.4 Assets held for sale .......................................................................................................................... 122

Note 9 Inventories and work in progress .................................................................... 123

Note 10 Trade and other receivables ........................................................................... 123

Note 11 Deferred tax assets ......................................................................................... 124

Note 12 Cash ............................................................................................................... 125

Note 13 Deferred tax liabilities .................................................................................... 125

Note 14 Provisions....................................................................................................... 126

Note 15 Financial debt ................................................................................................. 126

15.1 Non-current financial debt .............................................................................................................. 128

15.2 Other current financial liabilities ..................................................................................................... 129

15.3 Bank loans ....................................................................................................................................... 130

15.5 Breakdown of financial debt by currency expressed in euro ........................................................... 130

15.6 Breakdown of financial debt at fixed and variable rates ................................................................. 131

15.7 Fair value of financial assets and liabilities ..................................................................................... 131

Note 16 Financial risk management ............................................................................. 132

16.1 Credit risk......................................................................................................................................... 132

16.2 Liquidity risk..................................................................................................................................... 132

16.3 Exchange rate risk ........................................................................................................................... 133

16.4 Interest-rate risk .............................................................................................................................. 134

Note 17 Operating segments ....................................................................................... 135

Note 18 Personnel expenses ........................................................................................ 137

18.1 Workforce ........................................................................................................................................ 137

18.2 Stock options ................................................................................................................................... 137

18.3 Staff benefits ................................................................................................................................... 138

Note 19 External expenses and development costs ...................................................... 139

Note 20 Other operating expenses............................................................................... 140

Note 21 Financial income and expenses ....................................................................... 140

21.1 Net financial debt expense .............................................................................................................. 140


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21.2 Other financial income and expenses .............................................................................................. 140

Note 22 Income tax ..................................................................................................... 141

Note 23 Capital management ...................................................................................... 142

23.1 Capital management ....................................................................................................................... 142

23.2 Diluted earnings per share .............................................................................................................. 143

Note 24 Related parties and off-balance sheet commitments ...................................... 144

24.1 Related parties ................................................................................................................................ 144

24.2 Off-balance sheet commitments ..................................................................................................... 144

Note 25 Pro-forma information ................................................................................... 145

Statutory Auditors’ Report on the consolidated financial statements ........................... 148


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Note 1 General information

1.1 Highlights

1.1.1 Acquisition of the Ingredients Division of Spanish group, Natraceutical.

On August 6, 2009, Naturex announced the signing of a Memorandum of Understanding for the integration of the Ingredients Division of Natraceutical group in Spain. On September 30, 2009, it announced the signing of a Master agreement, then a contribution agreement governing the merger of the two groups. Spanish multinational Natraceutical group is listed on the Spanish stock market and is a leading player in the research and development of naturally-sourced functional, active ingredients and nutritional supplements. Following the approval of its Joint Shareholders' Meeting on December 30, 2009, Naturex completed the acquisition which it financed in cash and through the issue of new shares. Given the date of integration, the companies acquired had no impact on Naturex's consolidated income statement on December 31, 2009. The pro-forma figures which reflect the impact that the acquisition would have had had it been effective as of January 1, 2009, are given in Note 25. Following the acquisition, Naturex now ranks as the global independent leader in specialty plant-based natural ingredients. Combining the expertise of Naturex (nutraceuticals, flavorings, coloring agents, anti-oxidants and cosmetics) and the Ingredients Division of Natraceutical group (natural coloring agents, fruit and vegetable powders, pectins, functional ingredients, yeast and caffeine), the new entity benefits from a balanced presence between Europe (50 % of pro-forma revenue) and the United States (34%). The assets contributed were primarily held by Natraceutical which, at the close of the operation, held 33.93% of Naturex's capital and 14.23% of its voting rights. Certain assets were also contributed by the parent company of Natraceutical, Spanish group Natra, which, at the close of the operation, directly held 3.89% of Naturex's capital and 4.93% of its voting rights. All told, Natra held 37.82% of Naturex's capital and 19.15% of its voting rights at the close of the operation and is now a member of the group's Board of Directors alongside SGD, the family-owned holding company of President and CEO Jacques Dikansky which remains the majority shareholder in terms of voting rights. The transaction also provides for a balance cash payment of € 10 million maximum, which is partially indexed on the 2009 results of the companies acquired. At the time this report was drawn up, the calculations made by the company indicate that this balance payment will not be made but


97

deducted from the acquisition price reported in the financial statements for 2009. The formal approval of Natra and Natraceutical has not yet been obtained. The Ingredients Division of Natraceutical group includes the following companies and/or assets:


Swiss company Obipektin AG is a recognized European leader in fruit and vegetable powders and specialty pectins with two major, fully-equipped production sites in Bischofszell and Bergdorf (German-speaking Switzerland). Like Naturex, the company markets its natural ingredients to industrial groups, primarily within the food sector, particularly baby foods. Obipektin reported yearly revenues of € 41 million and employed 137 people on December 31, 2009. The company has a sales office in Bangkok, Thailand.


English company Overseal Natural Ingredients Ltd is a leading European manufacturer and supplier of naturally-derived coloring agents, and also specializes in yeast and Talin – a naturally-strong sweetener which is principally used to mask bitterness. Based in Birmingham, the company has its own manufacturing plant and reported yearly revenues of € 26 million and a payroll of 85 people on December 31, 2009. Overseal Natural Ingredients Ltd also has 4 subsidiaries, including three which do not manufacture any products themselves (Overseal Colour Inc., Britannia Natural Product Limited, The Tallin Co Ltd) and Natraceutical Russia presented below.


Based in Moscow, this Overseal Natural Ingredients subsidiary is a distribution platform for Overseal Natural Ingredients and Obipektin products. The entity reported yearly revenues of € 2.3 million and employs 5 people.


Based closed to Sydney, Kingfood is a bridgehead company for the development of group sales in the Asia/Pacific region. A distribution platform that covers the whole of the region, it also has its own industrial formulation facilities. Kingfood reported yearly revenues of € 10 million and employs 27 people.


Exnama is a company based in Manaus in Brazil which produces purified caffeine for the food industry as well as caffeine-enriched beverages. The company reported yearly revenues of € 5 million and employs 26 people.


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Naturex has purchased a 24.9% stake in this R&D company which specializes in ingredients and is also based in Valencia, Spain. The company's research focuses primarily on the production, design and purification of microorganisms (bacteria, yeasts and filamentous fungi) and microbial metabolites (by-products with a high value-added such as enzymes, proteins and nucleic acids).

Naturex share issue

Following the approval by the Joint Shareholders Meeting on December 30, 2009, Naturex issued 2,481,960 new shares in compensation for the shares contributed. The shares issued are listed on two separate lines since only 961,557 have voting rights attached, and 1,520,403 are preferential shares that have no voting rights attached for as long as they are held by Natra group (see management report on preferential shares). In accordance with the agreements signed with Natraceutical group (Master Agreement signed on September 30, 2009), these shares were valued at € 32 in exchange for the contributions defined in the Contribution Agreement. The statutory equity of issuing company, Naturex SA, was subsequently increased by € 79,423,000, including € 3,723,000 million in new share capital and € 75,700,000 in issue premiums (before acquisition fees: see details in the Notes to the Financial Statements of Naturex SA). In compliance with IFRS 3 (paragraphs 24 and 27), the fair value of equity instruments issued equates to the market price applying on the date of the exchange, namely € 26.38, resulting in a total fair value of € 65,474,000.

Cash financing

In accordance with the terms of the agreements between the parties, only part of the cash payment due was made. Out of the € 15 million, only € 5 million was effectively paid to Natraceutical group, with the remaining € 10 million only falling due once the parties have reached


99

a final agreement. Out of this € 10 million, € 8 million has been placed in escrow until the parties have signed an agreement. At the time this report was drawn up, the calculations made by the companies indicate that this balance payment will not be made. In line with the agreements signed with the banking pool, the € 10 million will be directly repaid to the bank and therefore deducted from the financial debt and acquisition price reported in the consolidated financial statements. The repayment will be made as soon as a formal agreement is reached between Natra and Natraceutical regarding the price adjustment. At the time this report was drawn up, no final agreement had been signed.

Restructuring of the group's financial debt

In order to finance the acquisition of the Ingredients Division of Natraceutical in cash, Naturex group has chosen to restructure its debt by repaying virtually all of its loans which it refinanced via a structured loan of € 140 million set in place on December 30, 2009, and on which it had drawn down € 100 million on December 31, 2009. This loan has been restated in the amount of € 90 million in the consolidated financial statements given the imminent early repayment of the € 10 million initially provided for as part of the price adjustment (see cash financing above). The loan was taken out in USD, EUR and CHF, which are the group's main transaction currencies, in order to hedge part of its currency risk exposure. Details of this transaction are given in Notes 15 and 16.2 (Liquidity risk and Financial debt), and the corresponding commitment outlined in Note 24.

1.1.2 Capital increase in cash

On March 3, 2009, Naturex confirmed the success of its capital increase launched on February 5, 2009. The prospectus for the operation was approved by AMF authorization No. 09-027 of February 4, 2009, and issued in accordance with Articles L.412-1 and L.621-8 of the French Monetary and Financial Code and the AMF's General Regulation, notably Articles 211-1 to 216-1. Initially set at € 15 million, the capital increase was extended to € 17.3 million following the exercise of its extension clause. SGD, of which the President and CEO of Naturex is a shareholder, invested € 9.2 million in the operation. The Board of Directors meeting of March 6, 2009, approved the issue of the corresponding 866,863 new shares at a par value of € 20. As a result, the number of shares making up the capital increased from 3,014,979 on December 31, 2008 to 3,882,040 on March 6, 2009.


100

The funds raised reinforced the group’s financial position, enabling Naturex to pursue its organic growth and finance the acquisition of the Ingredients Division of Natraceutical group.

1.1.3 Ongoing organic development

GGrroowwtthh iinn ssaalleess

Driven by sustained demand for natural products and ingredients, and despite a difficult economic backdrop, Naturex once again proved its ability to generate rapid organic growth in 2009. Consolidated revenues for the year amounted to € 101.9 million, up 9.4% on 2008. At constant scope and in constant currencies, yearly sales for the group increased 5.5% in line with the ambitious growth target set at the start of the financial year. North America accounted for 59.8% of revenues, the European Union for 30.4% and Asia/Pacific for 3.2%. Naturex’s growth prospects have been further enhanced by the integration of the Ingredients Division of Natraceutical group. The consolidation of the revenues of the group’s new subsidiaries from January 1, 2010, will allow for a better balance in sales, both by geographic region and by sector of activity. As a result of the operation, Naturex now ranks as the global leader in specialty plant-based natural ingredients for the food, nutraceutical, pharmaceutical and cosmetic industries.

NNeeww ssttaarrtt iinn CChhiinnaa

Naturex’s Chinese subsidiary, Naturex Trading Shanghai Co., Ltd., was officially inaugurated on October 14, 2008. The capital was fully paid up in 2009 and the subsidiary began operating in the second half of the year. In 2009, Naturex Trading Shanghai Co. accounted for € 0.5 million of the group's total procurement and is expected to handle several million euros more in 2010.

CCrreeaattiioonn ooff aa bbrraanncchh iinn BBeellggiiuumm

Belgian branch, Naturex Benelux, was founded on June 24, 2009, to enable the group to better serve its different clients within the region. As a branch, it is legally dependent on Naturex SA, which means that its creation does not constitute a change in the group’s consolidation scope.

CCrreeaattiioonn ooff aa bbrraanncchh iinn TTookkyyoo,, JJaappaann

Naturex officially opened its Tokyo branch on October 9, 2009. Like the group's other branches, its aim is to reinforce Naturex's commercial presence and sales development in Japan which is one of the world's largest markets for natural ingredients.


101

1.1.4 Other major events

SSaannaavviiee

Naturex SA acquired a 34.79% stake in Sanavie on January 1, 2007 for which it paid € 420,000 and whose goodwill amounted to € 226,000 at the time of purchase. The Swiss company sells Naturex products on the Russian and Ukrainian markets. Based on the audited accounts submitted by Sanavie, the fair value of Naturex's equity stake increased by € 291,000 in 2007 and by € 420,000 in 2008 (see figure for "Income from companies accounted for by the equity method"). The company is currently in severe financial difficulty and, at the close of the group accounts for 2009, was unable to produce any audited accounts for the year. As a result, the fair value of Naturex's equity stake has been reduced to zero and represents an expense of € 1,206,000.

1.2 Events occurring after closure

CCrreeaattiioonn ooff aa bbrraanncchh iinn DDuubbaaii iinn tthhee UUnniitteedd AArraabb EEmmiirraatteess

Naturex Middle East – RAKFTZ Branch was awarded its commercial license on January 6, 2010.

TTrraannssffoorrmmaattiioonn ooff BBeellggiiaann aanndd GGeerrmmaannyy bbrraanncchheess iinnttoo ccoommppaanniieess iinn tthheeiirr oowwnn rriigghhtt

In order to meet the demand of its local clients, Naturex has changed the legal status of its German and Belgian branches which have been renamed as Naturex GMBH and Naturex SPRL respectively.

Note 2 Consolidation scope

2.1 Consolidated companies and methods

At December 31, 2009, Naturex's consolidation scope breaks down as follows:


102

Company name Legal form Address % control % stake Consolidation method

Naturex SA Parent

Site D'Agroparc - BP 1218

84911 AVIGNON Cedex 9

N° SIRET 384 093 563 000 29

Code APE : 2053Z

N/A N/A Full consolidation

Naturex Inc Subsidiary

375 Huyler Street

South Hackensack, NJ 07606

U.S.A

100% 100% Full consolidation

Naturex Spa Subsidiary

Via Galileo Ferraris, 44,

21042 Caronno Pertusella (VA)

ITALY


Naturex UK Ltd Subsidiary

Cranbrook House

287/291 Banbury Road

OXFORD, OX2 7JA

United Kingdom


Naturex Trading Shanghai Co, Ltd Subsidiary

Room 318, Unit B,

Lane 1305, Huajing Road

Shanghai, 200231

China


Naturex Morocco Subsidiary

Technopole Nouasser

BP 42 - 20240 Nouasser

Morocco

96.35% 96.35% Full consolidation

SCI Les Broquetons Subsidiary

Site D'Agroparc - BP 1218

84911 AVIGNON Cedex 9

France


Naturex Holdings Inc Subsidiary

2711 Centerville Road,

Suite 400, Wilmington,

DE 19808, USA


Naturex Cooperative LLC Subsidiary

2711 Centerville Road,

Suite 400, Wilmington,

DE 19808, USA


Naturex Coöperatief U.A Subsidiary

Lairessestraat 154, 1075 HL

Amsterdam,

Netherlands


Extractos Naturais da Amazônia Ltda

( Exnama)

Subsidiary acquired in

2009

Av. Buriti 5391 distrito Industrial

69075-000 Manaus

Brazil


Obipektin AGSubsidiary acquired in

2009

Industriestrasse, 8,

9220 Bischofszell

Switzerland


Overseal Natural Ingredients LtdSubsidiary acquired in

2009

Swadlincote, Derbyshire,

DE12 6JX,

United Kingdom


Natraceuticals Russia OOOSubsidiary acquired in

2009

15 Krijanovskogo Str. Block 5, Office

308 11728 Moscow,

Russia

99.99% 99.99% Full consolidation

The Tallin Co LtdInactive subsidiary,

acquired in 2009

107 Hammersmith Road

London, W140QH,

United Kingdom


Overseal Colour IncInactive subsidiary,

acquired in 2009

Corporation Trust Center,

1209 Orange Street,

New Castle country,

Wilmington, Delaware


Britannia Natural Product LimitedInactive subsidiary,

acquired in 2009

107 Hammersmith Road,

London, W140QH,

United Kingdom


Kingfood Australia Pty LtdSubsidiary acquired in

2009

9 Garling Road, Kings Park,

NSW 2148,

Australia


Xerutan SL

(Naturex Spain)

Subsidiary acquired in

2009

Carretera Nacional III Km. 331, Camino

de torrent s/n,

Quart de Poblet,

46000 Valencia

Spain


Sanavie Holding

3 place du marché

1860 Aigle

Switzerland

34.79% 34.79% Equity method

Biopolis SL HoldingCarretera de Llíria, S/N

46100 Burjassot, Spain24.90% 24.90% Not consolidated


103

2.2 Changes in consolidation scope over the period

On December 30, 2009, Naturex acquired the following companies that are part of the Ingredients Division of Natraceutical group:

Extractos Naturais da Amazônia Ltda

Obipektin AG

Overseal Natural Ingredients Ltd

Natraceutical Russia OOO

The Tallin Co Ltd

Overseal Colour Inc.

Britannia Natural Product Limited

Kingfood Australia Pty Ltd

Xerutan SL, which has been renamed Naturex Spain SL

Biopolis SL (stake) It also created the following holding companies:

Naturex Holdings Inc.

Naturex Cooperative LLC

Naturex Coöperatief U.A


104

2.3 Organizational Structure

The organizational structure for Naturex group on December 31, 2009, breaks down as follows:

38.9% 37.8%

100%

100%

>99% <1%

100%

100% 100% 100% 1 action sur 7M 100% 100% 100% 96.3% 100% 100% 34.8% 24.9%

100% 100% 100% 100%

BdV Float SGD DirectorsOdyssée

Venture

Natra

Group

Netherlands

3.2% 16.3% 0.5% 3.2%

Naturex SA

Naturex Holding

Inc

USA

Na Cooperative LLC

USA

Naturex Cooperatief

UA

100%

Naturex IncKingfood

Australia Overseal Exnama Obipektin Naturex SL Biopolis

USA Australia UK Brazil Switzerland Spain China Italy Morocco

Naturex

Shanghai

Trading Co

Naturex

Spa

Naturex

MoroccoNaturex Ltd

SCI Les

BroquetonsSanavie

France Switzerland Spain

The Talin

Co Ltd

Overseal

Colour Inc

Britannia

Natural

products

Ltd

Natraceu-

tical Russia

UK USA UK Russia

UK

2.4 Affiliates

No company in the consolidation scope is a shareholder or affiliate of an ad hoc entity.

2.3.1 Sanavie

The revenue generated by the affiliate represented a loss of € 1.2 million in the group's consolidated net income. As the company was unable to produce any audited accounts for 2009, all of the assets linked to it have been depreciated for a total € 1.2 million (see Note 8.2 – Non-current assets).


105

As Naturex group has not undertaken any commitments beyond its initial investment, there is no need to calculate any additional risk.

2.3.1 Biopolis

Naturex SA acquired a 24.9% share in the R&D company on December 30, 2009, but does not exercise any significant influence over Biopolis as defined in IAS 28. On December 31, 2009, the fair value of the holding was the same as the acquisition cost.

Securities gross value 969

Securities net value 969

Related receivables -

Equity stake held 24.9%

Net assets 3,131

Revenue 1,047

Dividends received -

Non-reimbursed loans and advances -

Guarantees given -

in thousands of euros31/12/2009

Note 3 Compliance statement

In compliance with EC regulation No. 1606/2002 of July 19, 2002, governing the consolidated financial statements of European companies listed on regulated markets, and given its listing in a country of the European Union, the consolidated financial statements of Naturex SA and its subsidiaries (hereinafter referred to as the group) have been drawn up in accordance with the IFRS (International Financial Reporting Standards) accounting standards adopted within the European Union. The impact of the revisions to accounting standards IAS 1 and IFRS 8 are set out in Note 4.1. No other mandatory standards and obligations had an impact on Naturex's yearly consolidated financial statements in 2009. The options applied by the group are indicated in the following chapters. Naturex’s consolidated financial statements as at December 31, 2009, have been drawn up in accordance with the principles governing the accounting and valuation of transactions such as they are stipulated in the IFRS standards applying within the European Union. They have also been drawn up in accordance with the regulations governing the presentation and content of financial statements as defined by the General Regulation of the AMF.


106

The group’s consolidated financial statements as at December 31, 2009, were approved by the Board of Directors’ meeting of April 26, 2010 and will be submitted to the next Annual General Meeting which may in theory modify them.


107

Note 4 Accounting principles and methods

4.1 Changes in method or presentation following the obligatory application of new accounting standards as of January 1, 2009

In accordance with the revised accounting standard IAS 1 (2007) “Presentation of financial statements” which entered into effect on January 1, 2009, Naturex group has only reported any owner changes in equity under changes in consolidated shareholders’ equity. Non-owner changes in equity are included in the group’s summary comprehensive income. It has chosen to present its comprehensive income in two statements which include a separate income statement which lists the income and other components of the overall result. Comparative data has been restated in accordance with the revised standard. This change in accounting method has no impact on the group’s earnings per share, merely upon the manner in which the accounts are presented. In application of IFRS 8 “Operating segments”, which entered into effect on January 1, 2009, the group’s disclosures linked to its operations are based on the information transmitted internally to the President and CEO and Vice-President and CFO who are the primary decision-makers regarding the group’s operating activities. Prior to the application of IFRS 8, operating segments were identified and presented in accordance with IAS 14, and included a geographical segment (primary segment) and a business segment (secondary segment). This secondary segment is no longer disclosed. At December 31, 2009, the group revised its former operating segments since, following its end-of-year acquisition, the number of segments was too high. These changes are presented in Note 17. Comparative segment information has been restated in accordance with the provisional requirements under IFRS 8. An operating segment is a component of a group whose activities are expected to generate revenues or cover expenses, including revenue and expenses linked to transactions with other group components. The operating income for each segment is regularly examined by the President and CEO and the Vice-President and CFO when deciding on the resources to be allocated and assessing its performance. Separate financial data is disclosed for each component. The results for a given segment submitted to the President and CEO and Vice-President and CFO include those components that are directly linked to the sector or that can be reasonably assigned to it. Items that are not assigned essentially include the company’s central assets (primarily its head offices), head office expenses and income tax assets and liabilities. Segment investments correspond to the costs incurred over the period in the acquisition of tangible and intangible fixed assets other than goodwill.


108

IAS 23 (revised) imposes the capitalization of borrowing costs directly linked to the acquisition, construction or manufacture of qualified assets and eliminates the need to book borrowing costs under expenses. The application of this standard had no impact on the financial year.

4.2 New standards and interpretations yet to be applied

There are various new standards, amendments and interpretations that do not as yet apply and that were therefore not taken into consideration in preparing the consolidated financial statements for the year ended December 31, 2009. IFRS 3 revised (2008) “Business combinations” is subject to the following amendments which will probably have an impact on the group’s operations: o The definition of a company has been broadened which will probably increase the number of

acquisitions that are treated as business combinations. o Counterparties will be booked at their fair value, with any subsequent changes booked to

income. o Acquisition costs, other than the costs linked to the issue of debt or equity instruments, are to

be expensed when they are incurred. o Any prior investment in an acquired entity is booked at fair value, with any gains or losses

booked to income. o Any non-controlling minority interest is booked either at fair value or on the basis of its prorata

share of the fair value of the assets and liabilities of the entity acquired. The “full goodwill” option may be elected on a transaction-by-transaction basis.

o IFRS 3 (revised), whose application will be compulsory for the group’s consolidated financial statements in 2010, will be applied going forward and will therefore have no impact on any group consolidated financial statements released prior to that date.

IAS 27 revised “Consolidated and separate financial statements” (2008) provides that any changes in the group’s stake in a subsidiary be accounted for as an equity transaction where the group retains its control over the entity in question. When the group loses control over a subsidiary, any residual holding is re-measured at fair value and any gain or loss is booked in the income statement. The amendments to IAS 27 which will be compulsory as of 2010 will not have a material impact on the group’s consolidated financial statements.

4.3 Estimations and opinions

When drawing up consolidated financial statements, hypotheses, estimations or assessments are sometimes needed to establish certain data, particularly when it comes to calculating provisions and carrying out fair value tests. These hypotheses, estimations or valuations are established on the basis of the information available or actual scenarios when the accounts are closed. They are also based upon past experience and various other factors. As the sharp downturn in today’s economic environment makes it difficult to forecast future activity, it is possible that the actual figures subsequently differ from estimations and hypotheses made. Indeed, various events may actually occur after the close of the accounts and, as a result, affect the hypotheses, estimations and valuations made.


109

Underlying estimations and hypotheses are based upon past experience and other factors that are deemed to be plausible in light of the circumstances. They in turn serve as a basis in establishing the accounting values of assets and liabilities which cannot be directly ascertained from any other sources. Real values can obviously differ from estimated values. Underlying estimations and hypotheses are constantly reexamined. The impact of changes in accounting estimations is booked over the period in question where only that period is affected, or over the period and any subsequent periods where the latter are also affected by the change. All information on the main areas of uncertainty linked to the estimations and assessments made in applying the accounting methods that are liable to have a substantial impact on the amounts disclosed in the financial statements is reported in the following notes:

Note 5 Valuation rules and methods - Goodwill Note 5 Valuation rules and methods - Inventories

4.4 Seasonal effects

Naturex’s activities are rarely exposed to seasonal effects. While the supply of certain raw materials is dependent on harvesting times, it is essentially spread over the full year with a slight peak in spring and at the start of summer. The supply of extracts is not at all affected by any seasonal effects. Group sales are also globally unaffected by any seasonal effects. Certain specific product ranges are subject to seasonal effects, such as coloring agents and flavorings for drinks in the Food & Beverage Division in spring and summer, and a few of the Nutrition & Health product ranges which record higher growth in autumn and winter. Globally-speaking, these products offset each other and the group’s product mix is such that it is not exposed to any marked seasonal impact.


110

In order to illustrate the seasonal trends that affect Naturex’s activities, the graph opposite shows the breakdown by quarter in revenue over the past 3 years.

4.4 Entry value of assets and liabilities

The dates for closing the accounts are all set at December 31. The consolidated financial statements include the financial statements of the parent company as well as those companies controlled by the parent on December 31 of each year. Here the notion of control is taken to mean the power to define and manage the financial and operational strategies of a company in order to benefit from its activities. The subsidiaries over which the group exercises control, whether directly or indirectly, are fully consolidated. The group presents its financial statements in accordance with IAS 1 “Presentation of financial statements”.

Foreign currency transactions

Transactions are booked at the historic rate at the time they are carried out. Receivables and debts that have not been settled at year-end are valued at the closing rate resulting in any translation differences on foreign currency transactions being booked to the income statement.

Translation of accounts expressed in foreign currencies

The accounts of the group's foreign subsidiaries are held in their working currencies. The balance sheets of those companies whose working currency is not the euro are translated at the closing rate, except for shareholders' equity which is converted at its historical rate.

15%

20%

25%

30%

First quarter Second quarter Third quarter Fourth quarter

2007

2008

2009


111

Income statements are converted according to the average rate for the period which, major fluctuations aside, is generally close to the rate applying on the date of the transaction. Translation differences are booked separately to "Translation differences" under shareholders' equity and factor in: the impact of changes in exchange rates on assets and liabilities and the difference between income calculated according to the average rate and income calculated according to the closing rate. Goodwill and fair value adjustments arising out of the acquisition of those subsidiaries whose working currency is not the euro are not booked under the assets and liabilities of the subsidiary. They are therefore expressed in the subsidiary's working currency and converted at the closing rate. The closing dates used are as follows: Closing date

Country /

Currency

USA UK Switzerland Morocco China Australia Brazil Russia

Euro US Dollar Sterling Swiss Franc Dirham Renmimbi Yuan Australian dollar Real Ruble

December 31,

2008 0.7075 1.0000

1.0000 1.4134

1.1736 1.0000

1.0000 0.8521

0.6551 1.0000

1.0000 1.5265

0.0882 1.0000

1.0000 11.3351

0.1036 1.0000

1.0000 9.6545

December 31,

2009 0.6975 1.0000

1.0000 1.4338

1.1062 1.0000

1.0000 0.9040

0.6721 1.0000

1.0000 1.4878

0.0891 1.0000

1.0000 11.2230

0.1022 1.0000

1.0000 9.7861

0.6247 1.0000

1.0000 1.6008

0.3982 1.0000

1.0000 2.5113

0.0232 1.0000

1.0000 43.1540

The average rates used are as follows:

o for Naturex Inc., the rate is € 0.72049 (€1 = USD 1.38794), o for Naturex Morocco, the rate is € 0.08818 (€1 = MAD 11.34044), o for Naturex UK, the rate is € 1.11255 (€1 = GBP 0.89884), o for Naturex China, the rate is € 0.09973 (€1 = RMB 10.02707).

All companies acquired in 2009 were acquired on December 30. As a result, only their balance sheets have been consolidated within the group's figures.


112

Note 5 Valuation rules and methods

5.1 Goodwill

In accordance with IFRS 3, where subsidiaries are part of a business combination, any assets and liabilities and potential liabilities are estimated at their fair value on the date of their acquisition. Minority interests, for their part, are estimated as part of the fair value of any assets, liabilities and potential liabilities booked. The difference between the cost of the acquisition of the subsidiary and the group’s share in its net assets estimated at their fair value is booked as goodwill. Goodwill is allocated to the group’s cash generating units (CGUs). Naturex group's CGUs are detailed in Note 17 – Operating Segments. In line with IFRS 3 governing “Business combinations”, goodwill is not amortized. It is subject to depreciation tests as soon as there is any sign of a depreciation in value and at least once a year. In line with IAS 36, the method used by the group to test for a loss in the value of assets consists in:

establishing cash flow after tax based on the strategy of the CGU in question;

determining the useful value of the asset using a method which is similar to that used to assess the value of a business by discounting cash flow according to the Weighted Averaged Cost of Capital (WACC) for the sector;

comparing this useful value to the book value of the asset in question in order to establish whether or not there is a loss in value.

The useful value is based on discounted forecasts for future operating cash flow over a period of 5 years and on a terminal value. The discounted rate used in these calculations is the WACC after tax . The hypotheses used and results of the sensitivity tests are given in Note 7 - Goodwill.

5.2 Intangible assets (excluding goodwill)

Development expenses, namely those resulting from the application of research to a project aimed at producing new or substantially improved products and processes, must be booked as fixed assets where the group can demonstrate the technical and commercial feasibility of the product or process and the availability of sufficient funds to complete the development process. At December 31, 2009, the majority of development costs were booked under expenses. These costs do not satisfy the criteria for assets stipulated in IAS 38, particularly as regards potential commercial openings. The costs booked as expenses are described in full in Note 19 - External Expenses.


113

The other intangible fixed assets acquired are booked at cost, minus any cumulative amortization and cumulative depreciation. Estimated useful lives are as follows:

Category of fixed asset Useful life

Software Straight-line: 3 to 5 years

brands Straight-line: 4 to 5 years

Development expenses Straight-line: 5 years

5.3 Tangible fixed assets

Tangible fixed assets are valued at cost, minus any cumulative amortization and depreciation. Depreciation is booked under expenses according to the straight-line method over the estimated useful life of each tangible fixed asset. Estimated useful lives are as follows:

Category of fixed asset Useful life

Building on own land Straight-line: 15 to 20 years

Building on leasehold land Straight-line: 10 to 20 years

Plant and equipment Straight-line: 5 to 10 years

Other tangible fixed assets Straight-line: 2 to 10 years

Leasing contracts that result in the transfer to the group of nearly all the risks and benefits inherent in the ownership of an asset are classified as lease finance contracts. These lease contracts are treated as credit acquisitions. Equipment is depreciated using the straight-line method over a period of 3 to 5 years, with the surplus portion of the rent constituting the financial expenses associated with the credit.

5.4 Financial assets

Financial assets consist of deposits and guarantees and unlisted securities whose fair value cannot be accurately determined. They are therefore valued at their historical cost (IAS 39.46c). There is no objective indicator for the depreciation of financial assets.


114

5.5 Inventories

Inventories of materials and other supplies are valued by batch at purchase cost using the FIFO (first-in, first-out) method. Finished or semi-finished goods are valued by batch using the FIFO method at the cost price which deducts all production costs from:

- the purchase price of raw materials;

- import expenses;

- outsourcing;

- water, gas, electricity;

- adjuvants;

- packaging;

- waste removal costs;

- payroll expenses;

- depreciation.

A provision for depreciation is booked when the purchase cost or cost price exceeds the net realizable value.

5.6 Accounts receivable

Accounts receivable are valued at their fair value when they are first booked and then at their amortized cost, minus any depreciation in value. A provision for depreciation is booked when there is a collection risk (even partial) on receivables.

5.7 Activities, assets and liabilities held for sale

In application of IFRS 5, those assets and liabilities that are held for immediate sale in their present state and are very likely to be sold are booked to the balance sheet under assets and liabilities held for sale. When a group of assets is held for sale in a single transaction, the group is booked as a single unit as are all related liabilities. The sale must take place within one year of the asset or group of assets being booked. The assets or group of assets held for sale are valued at the lowest price between their net accounting value and the net fair value of the cost of the sale. Non-current assets booked as held for sale are no longer amortized once they are booked to the balance sheet. Income from activities that have been discontinued is booked separately from income generated by activities that are ongoing and their cash flow is booked to a separate line on the cash flow statement.

5.8 Staff benefits

When it comes to defined benefit schemes, the group is only obliged to pay the corresponding contributions. The expense linked to the contributions paid is booked to income for the year.


115

In accordance with IAS 19, defined benefit schemes must undergo an actuarial assessment using the projected unit credit method. This method calculates the benefits linked to each unit of employee service up to the reporting date, with each unit being valued separately. The accrued benefit is then updated. The calculations factor in various hypotheses:

o mortality tables; o date of retirement; o changes in wage scales and staff turnover; o yield on hedging instruments; o discount and inflation rates defined for each entity and according to their local

macroeconomic context. Actuarial gains or losses factor in the combined impact of:

o adjustments linked to experience (differences between former assumptions and actual figures);

o changes in actuarial hypotheses. The disclosure required under IAS 19 only affects Naturex SA whose commitments (as valued in Note 18.3) is not significant. Companies acquired in the form of business combinations have defined benefit schemes. A temporary evaluation of the corresponding commitments will be adjusted over the next 12 months in line with the value of the commitments calculated according to IAS 19.

5.9 Sale of assets

The proceeds from asset sales are entered in the income statement when the material risks and benefits inherent in the ownership of the assets have been transferred to the purchaser. Consolidated revenue consists of the total sales (excluding tax) resulting from the ordinary activities of consolidated group companies, after elimination of internal operations.


116

5.10 Operating segments

IFRS 8 on operating segments defines an operating segment as a component of an entity: o that engages in business activities from which it may earn revenues and incur expenses, o whose operating results are reviewed regularly by the entity's chief operating decision-maker

to make decisions about resources to be allocated to the segment and assess its performance and,

o for which discrete financial information is available.

The internal reporting provided to Naturex's President and CEO and Vice-President is structured in the same way as the group's management, i.e. according to the following three geographic regions:

o Americas: all Naturex Inc. group companies and Exnama; o Europe, Africa, Russia: all Naturex SA group companies, including Naturex Spa, Naturex UK

Ltd, SCI Les Broquetons, Naturex Morocco, Overseal Natural Ingredients, Obipektin AG and Natraceutical Russia;

o Asia: all Naturex Trading Shanghai Group companies and Kingfood.

In application of IFRS 8, the group distinguishes and presents its operating segments based on the information reported to the group's management. Up until now, group sector information was broken down according to the following 5 geographical sectors:

o France o USA o Italy o UK o Morocco

The regrouping of the group's activities in Europe, Morocco and Russia within a single segment (Europe, Africa, Russia) upon the first application of IFRS 8 is justified by the following change: following the acquisition made by the group at the end of the year, a breakdown by country is no longer tenable given the number of companies, and is also less relevant given the volume of trade between the companies within this region. This new breakdown into 3 sectors has resulted in the reallocation of the 5 CGUs previously defined by the group (based on the previous 5 geographic sectors) into 3 new CGUs in line with Naturex's three new geographic sectors:

o America o Europe/Africa o Asia

This reallocation has no impact on the group's goodwill or the results of its depreciation tests.


117

Note 6 Business combinations

On December 30, 2009, Naturex group acquired the Ingredients Division of the Spanish group, Natraceutical (the Division's companies and activities are detailed in Note 1.1 – Highlights), for a total € 71,035,000. The operation was initially financed via the issue of 2,481,960 shares on December 30 (fair value of € 26.38, i.e. the stock price for Naturex SA on the date of the exchange) and a cash payment of € 5 million. The acquisition price was reduced by € 1,852,000 following the free transfer by Natraceutical to Naturex SA of a debt of € 1,852,000 owed to Natraceutical SA by Obipektin AG. It was also revised downwards by € 10 million corresponding to the price adjustment which will not be paid (see Note 1.1 – Cash financing) and increased by € 2,412,000 in expenses linked to the acquisition. Spanish multinational Natraceutical group is a leading player in the research and development of functional, active ingredients and nutritional supplements. Its Ingredients Division includes several companies specializing in natural coloring agents, fruit and vegetable powders, pectins, functional ingredients, yeast and caffeine. Integrated on December 30, 2009, the acquisition had no impact on Naturex's consolidated income statement for financial year 2009. The pro-forma figures presented in Note 25 indicate that, had the companies been acquired on January 1, 2009, revenues for Naturex group would have amounted to € 186.1 million for a net income of € 6.8 million. Pre-acquisition accounting figures were calculated according to the IFRS applying on the date of the acquisition. The amounts booked to assets, liabilities and potential liabilities on the date of the acquisition are based on fair value calculations (see Note 5 – Valuation rules and methods). The temporary allocation of the price and related assets and liabilities of the acquisition breaks down as follows:


118


Pre-acquisition

accounting

values

Fair value

adjustmentsDetailed note

Values booked

on

date of

acquisition

Tangible fixed assets 38,077 8,612 (a) 46,689

Intangible fixed assets 617 200 817

Financial fixed assets 2,298 - 2,298

Inventories 31,962 - 31,962

Trade receivables 28,827 - 28,827

Current tax receivables 25 - 25

Cash and cash equivalents 3,635 - 3,635

Borrowings (22,763) - (22,763)

Deferred tax liabilities (3,668) (991) (b) (4,659)

Employee benefits (420) (1,091) (c) (1,511)

Provisions - (2,764) (d) (2,764)

Supplier debt and other payables (31,774) - (31,774)

Tax due (390) - (390)

Net identifiable assets and liabilities 46,426 3,966 50,392

Goodwill on acquisitions 20,643

Counterparty payments in equity instruments 65,474

Counterparty payments in cash 5,561

Cash paid in 3,635

Net cash outflow 1,926

Fair value adjustments are as follows:

(a) increase of € 8,612,000 in the amount booked to land and buildings following an expert appraisal of the market value of the three main sites acquired (2 in Switzerland and 1 in England);

(b) € 911,000 in deferred taxes booked as a result of the value adjustments (calculated according to the rates applying in each country);

(c) adjustment of € 1,091,000 in the book value of employee benefits for the part linked to the

changes in the actuarial hypotheses not reflected in the financial statements;

(d) € 2,164,000 to cover the future impact of the two loss-making contracts committing the

companies to purchases or sales at a fixed price over a set period of time, and € 600,000 to cover the risk linked to two legal disputes where the liabilities cannot be guaranteed.


119

The goodwill booked on the date of the acquisition is essentially linked to the synergies expected from the integration of the companies within the group's activities in the production and distribution of plant-based specialty natural extracts. In accordance with IFRS 3, goodwill may be revised during the 12 months following the date of the acquisition. Insofar as the group does not apply the revised version of IFRS 3, the acquisition expenses are booked to business combinations. As the revised version of IFRS 3 will be applied going forward, the group will continue to book the additional expenses linked to the business combination under the acquisition cost.

Note 7 Goodwill

in thousands of euros31/12/2008 Acquisitions Restatements

Translation

differences31/12/2009

America 37,158 -950 36,208

Europe / Africa / Russia 16,433 19,650 -226 35,857

Asia - 2,026 2,026

Total 53,591 21,676 -226 -950 74,091

The € 20,643,000 increase in goodwill corresponds to the acquisition of the Ingredients Division of Natraceutical as set out in Notes 1.1 and 6. In accordance with IFRS 8 (see Note 5), goodwill has been reallocated to reflect the group's new operating segments. This new allocation had no impact on the value of goodwill. The goodwill booked for financial year 2009 is presented in Note 1.1 – Highlights. Goodwill is subject to annual impairment tests. Given their recent acquisition and related approval (see Document E filed with the AMF on December 10, 2009 under number E.09-093), goodwill on the companies acquired on December 30, 2009, has not undergone any impairment tests. The main hypotheses applied on December 31, 2009 were as follows:

cash flow at 5 years based on realized cash flow in 2009 and the forecasts for the next 4 financial years based on the projections given in the group's business plan and its former consolidation. These projections are primarily indexed on past experience and adjusted for future medium- and long-term market forecasts;

pre-tax discount rate of 7.38%, calculated each year according to the WACC method (Weighted Average Cost of Capital);

a terminal value with no indefinite growth rate.

The discount rate used is an after-tax rate. The application of a rate before tax has no impact when calculating the useful value of CGUs.


120

Sensitivity to the discount rate is calculated in order to ensure that the recoverable value is equal to the book value. The discount rates obtained for the Europe, Africa and Russia CGU and the America CGU amounted to 18% and 43% respectively.

Note 8 Non-current assets

8.1 Acquisitions and disposals

On December 31, 2009, gross values on fixed assets break down as follows: Transfers Disposals or Translation

in thousands of euros scrapping differences

Goodwill: 53,591 -226 20,643 1,033 - -950 74,091

Intangible: 3,007 - 555 951 40 -5 4,468

Software - brands 2,211 - 392 573 40 -5 3,130

Development expenses 797 - 163 304 - - 1,264

Fixed assets in progress - - - 74 - - 74

Tangible: 65,381 - 46,689 8,265 560 -544 119,231

Land 2,091 507 2,629 - - -4 5,223

Buildings 24,235 498 35,288 2,852 - -247 62,626

Plant and equipment 34,140 292 8,280 2,746 314 -237 44,907

Leased plant and equipment 204 - - - - -19 185

Other tangible fixed assets 2,981 63 492 766 247 -11 4,044

Leased Transp. Equip. 36 - - -22 13

Fixed assets in progress 1,695 -1,359 1,901 - -4 2,232

Financial assets: 1,209 226 1,174 58 83 -6 2,579

Advances/LT financial investments - - - - - - -

Securities - - 969 - - - 969

Investments in companies 984 226 - - - -3 1,206

Loans 51 - - - 13 -1 37

Deposits and guarantees 174 - 206 58 70 -1 366

Non-current assets held for sale 826 - - - -24 802

Total 124,015 - 69,061 10,307 684 -1,529 201,170

01/01/2009First consolidation

Net valueAcquisitions 31/12/2009

Restatements are triggered by the activation of fixed assets in progress on January 1, 2009. The group's main investments in intangible assets are set out in Note 1.1 - Highlights. The group's tangible investments are essentially linked to the extension and refurbishment of its sites in France, the United States, Morocco and Italy. On December 31, 2009, gross values on fixed assets break down as follows:


121

Transfers Increases Disposals or Translation

in thousands of euros Acquisitions scrapping differences

Goodwill: 40,086 94 11,636 - 1,775 53,591

Intangible: 1,309 - 1,693 8 13 3,007

Softw are - brands 894 - 1,312 8 13 2,211

Development expenses 415 - 382 - - 797

Fixed assets in progress - - - - - -

Tangible: 58,254 -1,333 8,473 1,198 1,186 65,381

Land 2,487 -421 4 - 21 2,091

Buildings 11,519 10,618 1,697 12 412 24,235

Plant and equipment 22,658 7,574 4,136 871 643 34,140

Leased plant and equipment 325 - - 121 - 204

Other tangible f ixed assets 18,967 -16,325 399 117 58 2,981

Leased Transp. Equip. 97 - 13 75 36

Fixed assets in progress 2,201 -2,780 2,223 - 51 1,695

Financial assets: 1,689 - 466 1,035 88 1,209

Advances/LT financial investments - - - - - -

Securities 1,026 - - 1,023 -3 -

Investments in companies 480 - 420 - 83 984

Loans 44 - 4 - 3 51

Deposits and guarantees 139 - 42 11 5 174

Non-current assets held for sale - 826 - - - 826

Total 101,338 -413 22,269 2,240 3,062 124,015

01/01/2008 31/12/2008

8.2 Amortization and depreciation

On December 31, 2009, amortization and depreciation on fixed assets break down as follows: Transfers Disposals or Translation

in thousands of euros scrapping differences

Intangible: 824 - 685 40 - -3 1,465

Softw are - brands 613 - - 464 40 - -3 1,034

Development expenses 211 - - 220 - - - 431

Tangible: 31,764 - - 4,593 541 - -280 35,537

Buildings7,562 - - 1,503 - - -55 9,011

Plant and equipment22,120 -19 - 2,493 304 - -184 24,107

Leased plant and equipment116 - - 42 - - -19 139

Other tangible f ixed assets1,943 19 - 549 237 - - 2,274

Leased Transp. Equip.23 - - 6 - - -22 7

Financial assets: - - - - - 1,206 - 1,206

Other holdings - - - - - 1,206 - 1,206

Non-current assets held for sale 7 - - - - - - 7

Total 32,595 - - 5,278 581 1,206 -283 38,216

01/01/2009First

consolidationContributions Provisions 31/12/2009

As set out in Note 1.1.4 – Other major events, the economic situation of Sanavie prompted the group to depreciate all related assets in full. On December 31, 2008, amortization and depreciation on fixed assets break down as follows:


122

Transfers Disposals or Translation

scrapping differences

Intangible: 357 - 469 8 6 824

Softw are - brands 277 - 338 8 6 613

Development expenses 80 - 131 - - 211

Tangible: 28,591 -404 4,017 1,031 591 31,764

Buildings 2,945 3,153 1,362 1 104 7,562

Plant and equipment 14,938 5,337 2,135 739 450 22,120

Leased plant and equipment 170 17 50 121 - 116

Other tangible f ixed assets 10,472 -8,911 460 116 37 1,943

Leased Transp. Equip. 66 - 10 53 23

Financial assets: - - - - - -

Other holdings - - - - - -

Non-current assets held for sale - 7 - - - 7

Total 28,947 -396 4,486 1,039 597 32,595

in thousands of euros01/01/2008 31/12/2008Contributions

8.3 Lease finance assets


Gross value

31/12/2008

Gross value

31/12/2009

Net value

31/12/2008

Net value

31/12/2009

Value of fixed assets 240 198 101 53

8.4 Assets held for sale

in thousands of eurosGross value Amortization Net value

Chart building (net value) 568 7 561

Chart land 234 234

Total 802 7 795

Assets held for sale include the land and premises of the former US subsidiary, Chart Corporation (Paterson, NJ), which was absorbed by Naturex Inc. in 2008. The amortization booked dates back prior to the sale. The land and premises have been available for sale since June 30, 2008, when they stopped being used. Given the current property crisis, the premises were not sold within a 12-month period. The group has not, however, booked a depreciation in value since the probable sales price will exceed the book value.


123

Note 9 Inventories and work in progress

The breakdown of inventories by type is as follows:

in thousands of euros31/12/2008 Change

First

consolidation31/12/2009

Raw materials 14,631 -1,802 15,304 28,133

Consumables 374 122 2,093 2,589

Finished and semi-finished goods 32,184 -327 16,754 48,612

Total inventories (gross) 47,190 -2,007 34,151 79,334

Provisions - - -2,515 -2,515

Total inventories (net) 47,190 -2,007 31,636 76,819

Note 10 Trade and other receivables

Trade and other client receivables break down as follows:

in thousands of euros31/12/2008 Change First consolidation 31/12/2009

Trade receivables (clients) 15,701 3,238 14,992 33,931

Trade receivables (suppliers) 219 391 213 823

Advances and pre-payments - - 4 4

Advances to employees 228 -209 - 19

Tax and social security receivables 1,637 817 2,704 5,158

Various receivables 31 -31 - -

Accrued receivables - - - -

Pre-paid expenses (1) 966 338 79 1,384

Total (gross) 18,783 4,542 17,993 41,318

Depreciation -882 190 -1,267 -1,959

Total (net) 17,901 4,733 16,726 39,359


124

Prepaid expenses break down as follows:


Prepaid insurance policies 235 196

Pre-paid trade fair/exhibition costs 451 224

Fees - 130

Outsourcing and leasing 175 155

Taxes 25 9

Payroll expenses - 1

Raw material purchases 167 161

Miscellaneous 330 91

Total 1,384 966

The seniority of trade receivables at the closing date is as follows:

31/12/2009 31/12/2008 31/12/2009 31/12/2008

Outstanding 24,372 7,768 - -

1 to 30 days 5,637 4,642 - -

31 to 60 days 1,520 1,593 - -

61 to 90 days 385 621 - -

More than 90 days 2,018 1,078 -1,959 -882

Total 33,931 15,701 -1,959 -882


Gross Depreciation

Depreciation in trade receivables evolved as follows:

Client provisions 882 1,267 478 -658 -11 1,959

Change 31/12/2009in thousands of euros

31/12/2008 First consolidation Allocations Reversals

Note 11 Deferred tax assets


Naturex S.A 932 814

Naturex S.p.A 694 4

Total 1626 818


125

Note 12 Cash

in thousands of euros31/12/2008 Change

First

consolidation31/12/2009

Cash 3,501 8,067 3,635 15,203

Marketable securities - 408 408

Total3,501 8,476 3,635 15,612

The increase in Naturex's cash position is mainly due to (i) the € 17.3 million capital increase in cash carried out at the beginning of the year, and (ii) the improvement in its WCR.

Note 13 Deferred tax liabilities


S.C.I Les Broquetons 32 -

Naturex INC 2,860 1,812

Naturex S.p.A. - 276

Naturex UK 1

Naturex Morocco 9 7

Obipektin 4,082 -

Overseal 557 -

Kingfood 9 -

Russia 12 -

Total 7,562 2,096


126

Note 14 Provisions

Provisions on futures 20 - - -20 -

Other provisions 8 2,764 - - 2,772

Employee benefits - 1,511 - - 1,511

Total provisions 28 4,275 - -20 4,283

Reversals Reversals 30/06/200901/01/2009 Allocations

The provisions booked are exclusively linked to the integration of the companies acquired on December 30, 2009 and are presented in Note 6 – Business combinations. No major liabilities were booked on December 31, 2009.

Note 15 Financial debt

in thousands of euros31/12/2008 New

First

consolidationRepaid Change 31/12/2009

Borrowings 71,793 95,321 739 -69,434 3 98,421

Leasing & lease financing 101 - 93 -48 - 146

Partner accounts 79 313 227 -1 - 620

Debt linked to holdings 144 - - -144 -

Sub-total 72,117 95,635 1,059 -69,626 3 99,187

Bank loans 10,972 - - -5,734 - 5,238

Total financial debt 83,089 95,635 1,059 -75,360 3 104,425

Cash and cash equivalents 3,501 8,442 3,635 33 15,611

Total net financial debt 79,588 87,193 -2,576 -75,360 -30 88,814

*The Financial debt linked to the first consolidation of the companies on December 30, 2009 amounts to € 23 million. On the same date, all financial debt owed to credit establishments and banks were repaid in full and a new loan taken out by the parent company. Naturex group's net financial debt stood at € 89 million on December 31, 2009 compared to € 80 million on December 31, 2008. Gross financial debt amounted to € 104 million on December 31, 2009, and consisted primarily of the structured loan set in place on December 30, 2008 (for a total € 90 million).

*


127

In order to finance the acquisition made at the end of the year and avoid any new currency risk, Naturex group elected to restructure its debt by repaying virtually all of its loans (€ 70 million in total) which it refinanced via a new structured loan. As part of this refinancing:

the group took out a new structured loan for a total € 140 million, including € 20 million to finance its investments and € 20 million to finance its WCR,

the costs incurred when setting up the previous structured loan in 2006 were removed from the balance sheet and booked as an expense of € 0.6 million.

On December 31, 2009, Naturex had only drawn down € 100 million in order to repay its pre-existing loan and to finance the acquisition of the Ingredients Division of Natraceutical, part of which was paid for in cash (see Note 1.1 – Highlights). This € 100 million was drawn in the group's three main transaction currencies: Euro, US Dollar and Swiss Franc (see Note 15.5 – Breakdown of financial debt by currency expressed in euro). As indicated in Note 15.6 (Breakdown of financial debt at fixed and variable rates), the loan was fully subscribed at a variable rate and hedges put in place as of March 31, 2010. The loan agreement which links the group to its lenders contains a clause regarding compliance with the bank covenants on a half-yearly basis (as set out in Note 15.2). On December 31, 2009, the loan agreement did not specify any ratios to be complied with. The breakdown of financial debt according to due dates is as follows:


128

Current

at 1 year 2 to 5 years + 5 years

Naturex borrowings 90,242 12,920 51,548 25,774

SCI Les Broquetons borrowings - - - -

Naturex Inc borrowings 7,307 1,915 4,053 1,338

Naturex S.p.A. borrowings - - - -

Naturex Morocco borrowings 119 21 98 -

Obipektin borrowings 345 345 - -

Kingfood borrowings 393 393 - -

Outstanding accrued interest 15 15 - -

Sub-total borrowings 98,421 15,610 55,699 27,112

Sub-total borrowings as a % 15.9% 56.6% 27.5%

Debt linked to holdings - - - -

Lease finance debts 146 76 69 -

Bank loans 5,238 5,238 - -

Partner accounts 620 620 - -

Total financial debt at 31/12/2009 104,425 21,545 55,768 27,112

Total financial debt as a % at 31/12/2009 20.6% 53.4% 26.0%


Total financial debt as a % at 31/12/2008 31.9% 64.3% 3.7%


Total

Non-current

15.1 Non-current financial debt

The due dates for non-current financial debt are as follows:

in thousands of eurosTotal 2 to 5 years + 5 years

Naturex borrow ings 77,322 51,548 25,774

Naturex Inc borrow ings 5,391 4,053 1,338

Naturex Morocco borrow ings 98 98 -

Lease finance debts69 69 -

Total long-term financial debt at 31/12/2009 82,880 55,768 27,112

Total long-term financial debt at 31/12/2008 56,553 53,437 3,116


129

Changes in non-current financial debt are as follows:


First

consolidationRepaid

Transfer at less

than 1 yearChange 31/12/2009

Borrowings 56,500 80,483 - -54,141 -31 - 82,811

Leasing & lease finance 53 - 62 - -45 69

Total non-current financial debt 56,553 80,483 62 -54,141 -76 - 82,880

15.2 Other current financial liabilities

The due dates for other current financial debt are as follows:


Naturex borrowings 12,920 13,897

SCI Les Broquetons borrowings - 154

Naturex Inc borrowings 1,915 414

Naturex S.p.A. borrowings - 404

Naturex Morocco borrowings 21 -

Obipektin borrowings 345 -

Kingfood borrowings 393 -

Lease finance debts 76 48

Debt linked to holdings - 144

Outstanding accrued interest 15 424

Partner accounts 620 79

Total financial debt at less than 1 year 16,306 15,564

Changes in other current financial liabilities are as follows:


First

consolidationRepaid

Transfer at

more than 1 yrChange 31/12/2009

Borrow ings 15,293 14,838 739 -15,293 31 3 15,610

Leasing & lease finance 48 - 31 -48 45 - 76

Partner accounts 79 313 227 -1 - - 620

Debt linked to holdings 144 - -144 - - -

Total current financial debt 15,564 15,152 997 -15,485 76 3 16,306

Bank loans 10,972 - - -5,734 - - 5,238


130

15.3 Bank loans


Current bank loans 5,238 8,172

Commercial paper - 2,800

Total 5,238 10,972

As indicated in Note 16.2, at the date on which the accounts were closed, Naturex had two short-term facilities of € 20 million and € 6 million respectively. At December 31 2009, the group had only drawn down US$ 1.5 million.

15.5 Breakdown of financial debt by currency expressed in euro

in thousands of eurosTotal Euro US Dollar

Swiss

Franc

Australian

DollarDirham Sterling

Naturex borrowings 90,242 20,312 53,925 16,005 - - -

Naturex Inc borrowings 7,307 - 7,307 - - - -

Naturex Morocco borrowings 119 - - - - 119 -

Obipektin borrowings 345 - - 345 - - -

Kingfood borrowings 393 - - - 393 - -

Lease finance debts 146 53 - - 93 - -

Outstanding accrued interest 15 15 - - -

Sub-total borrowings 98,567 20,365 61,246 16,351 486 119 -

Sub-total borrowings as a % 20.7% 62.1% 16.6% 0.5% 0.1% 0.0%

Debt linked to holdings - - -

Bank loans 5,238 3,312 - 401 - - 1,526

Partner accounts 620 392 227 - - -

Total financial debt at 31/12/2009 104,425 24,069 61,247 16,979 486 119 1,526

Total financial debt as a % at 31/12/2009 23.0% 58.7% 16.3% 0.5% 0.1% 1.5%

Total financial debt at 31/12/2008 83,089 65,972 17,117 - - - -

Total financial debt as a % at 31/12/2008 79.4% 20.6% 0.0% 0.0% 0.0% 0.0%

An analysis of sensitivity to currency variations is given in Note 16.3 - Exchange rate risk. As outlined below, the group opted to naturally hedge its exchange rate risk by taking out a new loan structured according to its currency flows.


131

15.6 Breakdown of financial debt at fixed and variable rates

in thousands of eurosTotal Fixed rate Variable rate

Naturex borrowings 90,242 33 90,209

Naturex Inc borrowings 7,321 3,834 3,487

Naturex Morocco borrowings 119 119 -

Obipektin borrowings 345 345 -

Kingfood borrowings 393 - 393

Sub-total borrowings 98,421 4,332 94,089

Sub-total borrowings as a % 4.4% 95.6%

Lease finance debts 146 146 -

Bank loans 5,238 - 5,238

Partner accounts 620 620 -

Total financial debt at 31/12/2009 104,425 5,098 99,327

Total financial debt as a % at 31/12/2009 4.9% 95.1%

Total financial debt at 31/12/2008 83,089 36,763 46,326

Total financial debt as a % at 31/12/2008 44.2% 55.8%

An analysis of sensitivity to interest-rate variations is given in Note 16.4 – Interest-rate risk. The group took out a variable-rate loan and has opted to apply a fixed rate to part of the transaction as of March 31, 2010.

15.7 Fair value of financial assets and liabilities

in thousands of eurosAccounting

value

Fair value Accounting

value

Fair value

Loans and receivables 403 403 226 226

Equity investments 969 969 984 984

Cash and cash equivalents 15,612 15,612 3,501 3,501

Sub-total financial assets 16,984 16,984 4,710 4,710

Guaranteed bank loans -98,421 -106,264 -71,793 -77,446

Liabilities linked to lease finance contracts -146 -158 -101 -109

Partner accounts -620 620 -79 -86

Debt linked to holdings - - -144 -155

Bank overdrafts -5,238 -5,238 -10,972 -10,972

Sub-total financial liabilities -104,425 -111,040 -83,089 -88,768

Total -87,441 -94,056 -78,378 -84,058

31/12/2009 31/12/2008

Future cash flow is discounted at a rate of 7.38%. Investment securities are the only financial instruments that are booked at their fair value (level 1).


132

Note 16 Financial risk management

The main risks that are likely to have a direct impact on the group’s consolidated statements are set out and assessed below.

• Credit risk • Liquidity risk • Exchange rate risk • Interest-rate risk

The group’s exposure to non-financial risks is reviewed in the management report of the registration document.

16.1 Credit risk

Credit risk is the risk of financial loss for the group should a client fail to meet its contractual obligations. Naturex's credit risk is limited for several reasons, notably its extensive client base (the proportion of revenues generated by its 10, 20 and 30 best clients is set out in detail in Note 2.6 of the management report). It is also limited thanks to the financial quality of the group's clients and, lastly, by the creation in 2010 of the post of Credit manager, whose role is to manage client risk.

16.2 Liquidity risk

Liquidity risk is the risk that the group may fail to honor its debts when they reach their term. Naturex's policy regarding the management of its liquidity risk is to ensure, through a group wide daily cash management system, that it always has sufficient funds to honor its liabilities when they reach their term, both under normal and "difficult" conditions and without incurring unacceptable losses that may prove harmful to the group's reputation. The group no longer has any bilateral credit facilities to finance its WCR, with the exception of one line in the United States. However, the structured loan set in place on December 30, 2009, has a short-term tranche of € 20 million which had not been used on December 31, 2009. The group's overdraft facilities and outstandings at the close of the year are presented in Note 15.3. As set out in Notes 1.1 and 15, the group set up a new structured loan on December 30, 2009. The loan agreement which links the group to its lenders contains a clause regarding compliance with two bank ratios which will be assessed every six months as of June 30, 2010. These two ratios are (i) gearing which is defined by the ratio of net financial debt to total equity and (ii) financial leverage which is defined by the ratio of net financial debt to EBITDA.


133

In the event that (i) the group was unable to uphold these contractual ratios and (ii) the majority of lenders were in agreement, the lenders may request the repayment of the corresponding loan. There were no covenants to the loan agreement on December 31, 2009. Contractual maturities on financial liabilities break down as follows: in thousands of euros Accounting value Forecast cash flow Less than 1 year 2 to 5 years More than 5 years

Borrowings 98,421 -106,264 -16,854 -60,137 -29,272

Liabilities linked to lease finance contracts 146 -158 -83 -75 -

Partner accounts 620 620 620 - -

Bank overdrafts 5,238 -5,238 -5,238 - -

Total at 31/12/2009 104,425 -111,040 -21,556 -60,212 -29,272

in thousands of euros Accounting value Forecast cash flow Less than 1 year 2 to 5 years More than 5 years

Guaranteed bank loans 71,793 -77,446 -16,497 -57,588 -3,361

Liabilities linked to lease finance contracts 101 -109 -52 -57 -

Debt linked to holdings 144 -155 -155 - -

Partner accounts 79 -86 -86 - -

Bank overdrafts 10,972 -10,972 -10,972 - -

Total at 31/12/2008 83,089 -88,768 -27,761 -57,645 -3,361

16.3 Exchange rate risk

Naturex group carries out most of its transactions in foreign currencies and therefore incurs an exchange rate risk, nearly all on the dollar (approximately 65% of revenue) but also on the dirham (costs linked to the Moroccan subsidiary) and sterling (less than 1% of group revenues), due to variations in the rates of these currencies. Where group transactions involve several currencies, only exposure to the dollar is deemed to be significant in 2009. Naturex's currency exposure is much higher following the integration of the new companies acquired in 2009. As of 2010, the group expects to realize 90 % of its revenues in 4 currencies - US Dollar, Euro, Swiss France and Sterling – and hopes to achieve a better balance between them. Its financial debt has been restructured in line with this change (see Note 15 – Financial Debt). The group’s dollar risk is partly offset since the company pays for a large part of its raw material supplies in US dollars and since a large part of its costs are also in US dollars (Naturex Inc. employs 32% of the group's headcount within its former consolidation scope). The group therefore limits its exposure to the risk of a change in the rate of the dollar by offsetting revenues with purchases: the US subsidiary makes its purchases in dollars and the majority of the group's other purchases are also made in dollars. However, the structure of Naturex’s revenue is such that a strong dollar is preferable for the group. Moreover, whilst the group's economic risk remains limited, USD/EUR conversion has a major impact, as much on revenue as on expenses, given the scale of the contribution made by Naturex's US subsidiary to the sales and income of the group.


134

Sensitivity tests indicate that, a 1% drop in the dollar at the close of the financial year would have generated a € 547,000 increase in financial income and a € 42,000 drop in equity. A 1% drop in sterling at the close of the year would not have had a material impact (expense of € 4,000 and no impact on equity). A 1% drop in the Swiss franc at the close of the year would have generated a € 198,000 increase in financial income and no impact on equity.

in thousands of eurosEUR USD CHF AUD MAD GBP OTHER Total

Financial liabilities 24,069 61,247 16,979 486 119 1,526 - 104,425

Bonds -

Other borrowings 20,312 61,246 16,351 393 119 - - 98,421

Lease borrowings 53 - - 93 - - - 146

Bank overdrafts 3,312 - 401 - - 1,526 - 5,238

Partner current accounts 392 227 - - - - 620

Debt linked to holdings - - - - - - -

Deposits - - - - - - - -

Money market securities - - - - - - - -

Financial assets 10,469 1,436 567 291 428 246 803 14,240

Loans - -37 - - - - - -37

Deposits and guarantees -71 -54 -106 -99 -34 -2 - -366

Holdings -969 -969

Investments in companies - - - - - - - -

Cash 11,508 1,527 673 391 462 247 803 15,612

Bonds - - - - - - - -

Treasury bonds - - - - - - - -

Net position before management 34,537 62,682 17,546 778 548 1,771 118,665

Pledging of securities as part of a

structured loan -92,230 - - - - - -92,230

Off-balance sheet -92,230 - - - - - -92,230

Net position after management 126,767 62,682 17,546 778 548 1,771 210,895

16.4 Interest-rate risk

At December 31, 2009, the group's interest-rate risk was essentially linked to its variable-rate and bank loans. The group is not exposed to any other interest-rate risk. A 100 basis point drop in interest rates would in turn have resulted in € 1 million drop in financial income. Given the very low interest rates prompted by the economic climate at the end of the year, the group has chosen to hedge its exposure as of March 31, 2010.


135

in thousands of eurosLess than 1 year 2 to 5 years More than 5

years

Total

Financial liabilities 19,768 52,943 26,617 99,327

Bonds - - - -

Other borrowings 14,530 52,943 26,617 94,089

Lease borrowings - - - -

Bank overdrafts 5,238 - - 5,238

Partner current accounts - - - -

Debt linked to holdings - - - -

Deposits - - - -

Money market securities - - - -

Financial assets - - - -

Loans - - - -

Deposits and guarantees - - - -

Investments in companies - - - -

Cash - - - -

Bonds - - - -

Treasury bonds - - - -

Net position before management 19,768 52,943 26,617 99,327

Note 17 Operating segments

In light of the major changes in its consolidation scope and in compliance with IFRS 8.19, Naturex has redefined its operating segments which continue to be broken down by geographic region. Up until now, the group's operating segments were defined according to its subsidiaries. However, given that, since December 30, 2009, Naturex now has twice the number of subsidiaries, the management has redefined these segments as follows:

o Europe, Africa, Russia: this segment regroups all of the companies within the region, namely Naturex SA, SCI Les Broquetons, Naturex Morocco, Naturex S.p.A, Naturex UK Ltd, Obipektin AG, Overseal Natural Ingredients, Naturex Spain and Natraceutical Russia.

o Americas: this segment regroups all of the companies within the region, namely Naturex Inc. and Exnama.

o Asia/Pacific: this segment regroups all of the companies within the region, namely Naturex Trading Shanghai and Kingfood.

The segments defined each correspond to a given economic environment whose indicators are analyzed on a regular basis by the group's management. The figures for each operating segment are set out below: At December 31, 2009:


136


America

Europe

Africa

Russia

Asia Pacific All sectors RestatementsInter-sector

eliminationsConsolidated

External sales 62,890 39,007 20 101,917 - - 101,917

Inter-sector sales 5,140 43,446 460 49,046 - -49,046 -

Tangible and intangible amortization -1,328 -3,947 -3 -5,278 - - -5,278

Operating income (sectors) 6,069 7,366 -108 13,327 5 -269 13,062

Interest income 635 - -593 43

Interest expense -4,779 - 591 -4,188

Share in companies accounted for

using the equity method -1,206 - - -1,206

Tax -1,938 - - -1,938

Net income 5,247 - - 5,247


America

Europe

Africa

Russia

Asia Pacific All sectors

Total assets 85,595 205,369 7,133 298,097

Total acquisitions of intangible investments - 1,722 - 1,722

Total acquisitions of tangible investments 2,734 5,484 46 8,265

Total liabilities 17,428 132,784 3,118 153,330 At December 31, 2008:


America

Europe

Africa

Russia

Asia Pacific All sectors RestatementsInter-sector

eliminationsConsolidated

External sales 55,597 37,580 - 93,178 - - 93,178

Inter-sector sales 3,553 42,649 - 46,202 - -46,202 -

Tangible and intangible amortization -1,079 -3,407 - -4,486 - - -4,486

Operating income (sectors) 4,287 8,705 - 12,991 -1,200 -537 11,254

Interest income 1,406 - -1,138 268

Interest expense -6,304 - 1,136 -5,168

Share in companies accounted for

using the equity method420 - - 420

Tax -1,700 - - -1,700

Net income 4,291 - - 4,291


America

Europe

Africa

Russia

Asia Pacific All sectors

Total assets 75,358 88,368 - 163,725

Total acquisitions of intangible investments 379 12,951 - 13,330

Total acquisitions of tangible investments 3,054 5,418 - 8,473

Total liabilities 11,472 93,023 - - There are no single clients that represent over 10% of group revenues.


137

Revenue by business breaks down as follows:


Food & Beverage 29,633 30,570

Nutrition & Health 65,940 57,080

Personal Care 1,544 1,909

Miscellaneous (toll extraction) 4,800 3,619

Total 101,917 93,178

Note 18 Payroll expenses

18.1 Workforce

Average headcount31/12/2009 31/12/2008

Naturex 186 176

Naturex Inc 173 176

Naturex Morocco 96 100

Naturex S.p.A 70 65

Naturex China 6 3

Naturex UK Ltd 4 3

Under former consolidation scope 534 523

Obipektin AG 137 -

Overseal Natural Ingredient 85 -

Naturex Spain 37 -

King Food 27 -

Exnama 26 -

Natraceutical Russia 5 -

851 523

Following their integration on December 30, the payroll figures for the Ingredients Division of Natraceutical are those applying at year-end. At constant scope, the group employed an additional 11 members of staff in 2009 to strengthen its management and cross-function teams.

18.2 Stock options

At € 159,000, the value of options has been calculated using the Black and Scholes valuation model and booked in accordance with IFRS 2 under payroll expenses.


138

Employee benefits in the form of stock options are calculated according to the Libor rate applying on the date the plan was implemented. Volatility reflects the yearly average of the 20 trading sessions preceding the date of allocation. The term of maturity corresponds to the average time between the date the options are allocated and the date on which they may exercised, i.e. 4 years. Options may not be exercised during the three years following the date they are allocated. As the dividend paid by Naturex is very low, no hypotheses are put forward. The fair value of the benefits granted in respect of the plan approved by the Board of Directors on March 13, 2009 amounts to € 168,000. The different stock option plans are summarized in the following table:

Plan Nos. 6&7 Plan No. 8 Plan No. 9 Plan No. 10 Plan No. 11 Plan No. 12

Date of Meeting 30/06/2003 28/06/2004 28/06/2004 14/06/2006 30/06/2007 30/06/2008

Date of Board Meeting 06/01/2004 06/05/2005 23/03/2006 27/03/2007 25/03/2008 13/03/2009

Type of optionSubscription

& PurchaseSubscription Subscription Subscription Subscription Subscription

Start date for exercise of options 06/01/2007 06/05/2008 23/03/2009 27/03/2010 25/03/2011 13/03/2012

Expiry date 06/01/2009 06/05/2010 23/03/2011 27/03/2012 25/03/2013 13/03/2014

Purchase or subscription price 12.72 27.54 45.15 49.65 27.54 24.00

Number of options allocated to: 19,316 24,350 39,196 23,929 47,362 53,650

Executive officers 17,500 20,000 30,500 13,000 33,000 33,000

Employees 1,816 4,350 8,696 10,929 14,362 20,650

(including 10 employees having received the largest allocations) 1,816 3,690 4,495 4,560 5,600 10,500

Number of shares subscribed or cancelled at 31/12/2009 19,118 828 2,126 2,095 1,322 -

Number of shares exercised over the period 198 - - - - -

Number of shares cancelled over the period - - 730 1,362 1,724 994

Purchase or subscription options outstanding 0 23,522 36,340 20,472 44,316 52,656

18.3 Staff benefits

Severance pay in respect of Naturex SA is insured with the company Predica. The treatment of this severance pay satisfies the criteria of IAS 19. It is a defined contribution scheme, with no residual commitment for the group. Naturex’s severance pay commitment amounted to € 45,000 on December 31, 2009 and is fully covered by the funds paid to its insurance carrier. Debt pertaining to the payment of its “TFR” retirement commitment is booked in the accounts of Naturex’s Italian subsidiary. This indemnity is not paid solely when an employee takes their retirement, but also when they leave a company. The TFR is a legal requirement that must be paid. The employee benefits for staff in the companies acquired have been estimated on a temporary basis in order to set the acquisition price and will be adjusted in accordance with IAS 19 over the course of the next financial year.


139

Note 19 External expenses and development costs


Non-immobilized purchases 7,813 7,450

Outsourcing 2,324 2,353

Leasing 2,001 1,805

Maintenance 1,995 1,421

Insurance 1,143 1,152

Fees 3,805 3,060

Advertising, trade fairs, exhibitions 1,017 746

Transport costs 4,590 4,721

Travel 2,301 2,311

Telecommunications 651 558

Banking services 135 190

Miscellaneous 183 141

Total 27,958 25,907

The majority of Naturex's development costs do not satisfy the criteria for fixed assets stipulated in IAS 38, notably as regards their future economic benefit. They are booked as an expense in the amount of € 2.7 million for financial year 2009. However, over the course of the year, the expenses linked to a project were booked given its significant potential in terms of technical success and profitability. The project involves the Italian subsidiary, Naturex S.p.A., and its compliance in terms of EDMFs (European Drug Master File) enabling it to conform to European regulations governing plant-based medication and allowing it to continue to market certain products on this market as well as adding to its pharmacy-approved range of extracts. The project expenses committed and booked under fixed assets for the year amount to € 276,000.


140

Note 20 Other operating expenses


Other expenses 916 220

Provisions for current assets 478 641

Provisions for risks and charges - 8

NAV on disposal of fixed assets 19 167

Total 1,413 1,036

Note 21 Financial income and expenses

21.1 Cost of net financial debt


Interest and related expenses -4,188 -5,168

Financial income 43 268

Cost of net financial debt -4,145 -4,900

21.2 Other financial income and expenses


Exchange rate losses -2,195 -9,571

Exchange rate gains 1,648 8,815

Capital gains/losses on the disposal

of securities - -7

Financial write-backs 20 -

Financial provisions - -20

Other financial income and expenses -526 -784


141

Note 22 Income tax

Breakdown of deferred taxes/taxes payable in the income statement

Tax payable 1,915

Deferred tax 23

Total tax 1,938

Reconciliation between the theoretical and actual tax expense

Consolidated income 5,246,944

Tax booked 1,937,947

Consolidated income before tax 7,184,891

Theoretical tax: 33.33% 2,394,964

Impact of local tax rate 399,819

Impact of restatements -985,544

Impact of permanent differences 128708

Tax booked 1,937,947

Breakdown of booked deferred tax assets and liabilities

in thousands of euros Assets Liabilities Net liabilities

Temporary differences 1,625 7,562 5,936

Criteria for booking deferred taxes and the impact of changes in the income statement

Temporary differences are booked to expenses or to deferred tax income. The changes booked on December 31, 2009 were as follows: Moreover, as of financial year 2010, current and deferred taxes linked to the C.V.A.E. (business tax computed on the basis of the added value generated by a company) will be booked under income tax.


142

in thousands of euros Expenses Income

Naturex SA - 341

Naturex Inc 1,127 -

Naturex SpA - 802

Naturex Morocco 2 -

Naturex UK - -

S.C.I. Les Broquetons 36 -

Total 1,165 1,143

Total net -23

Under the Finance Act for 2010, French tax entities are no longer required to pay business tax which has been replaced by two new taxes:

o the Cotisation Foncière des Entreprises (C.F.E.) based the rateable value of the property occupied by the business as currently set under the existing Taxe Professionnelle;

o the Cotisation sur la Valeur Ajoutée des Entreprises (C.V.A.E.) based on the valued added generated each year by the company (in the parent company financial statements).

As, in accordance with the provisions of IAS 12, the group qualifies the C.V.A.E. as a form of income tax, any time differences existing on December 31, 2009 are booked as deferred tax expenses under "Income tax".

Note 23 Capital management

23.1 Capital management

Ordinary and preferential shares

At December 31, 2009, the parent company capital consisted of 6,364,000 shares compared to 3,015,000 on December 31, 2008. All shares have a par value of € 1.50. As part of the acquisition of the Ingredients Division of Natraceutical on December 30, 2009, Naturex group issued 1,520,000 shares with no voting rights. These shares will be assigned voting rights once they are sold to third party, Natra group, and, for any sale exceeding 5% of the capital, once the transaction has been approved by the Board of Directors of Naturex SA. At December 31, 2008, none of the shares making up the capital had any voting rights. All of the shares issued were fully paid up.

Holders of ordinary shares have the right to any dividends decided upon and benefit from a voting right at the annual general meetings.


143

Holders of preferential shares also have the right to any dividends decided upon, but do not benefit from a voting right at the annual general meetings.

Translation differences

Translation reserves include all exchange rate differences following the translation of the financial statements of foreign entities, as well as the translation of liabilities booked under investments in the financial statements of a foreign entity.

Shares held by the company

Equity reserves include the cost of the shares in the company held by the group. At December 31, 2009, Naturex group held 12,588 shares in the company.

23.2 Diluted earnings per share

31/12/2009 31/12/2008

Group net income (in thousands of euros) 5,247 4,250

Number of shares making up the capital 6,364,000 3,014,979

Earnings per share 0.8244 €/share 1.4097 €/share

Options outstanding 177,306 128,964

Diluted earnings per share 0.8021 €/share 1.3519 €/share

Total net income 3,501 7,708

Number of shares making up the capital 6,364,000 3,014,979

Total net income per share 0.5501€/share 2.5566€/share

The drop in earnings per share is primarily due to the dilution of shares on December 30 which was not offset by any income over the period. In 2009, a dividend par share of € 0.10 was paid in respect of financial year 2008. Dividends per share for 2009 have been set at € 0.11, with shareholders having the option of receiving all or part of their dividend in cash or in the form of shares with a discount of 10% on their reference market price.


144

Note 24 Related parties and off-balance sheet commitments

24.1 Related parties

The total gross compensation of Naturex’s management bodies amounted to € 1,476,000 for 2009 after € 1,391,000 for 2008. Compensation includes all remuneration, benefits in kind and stock options allocated over the year. It is paid by Naturex Inc. (€ 1,077,000) and Naturex S.A. (€ 389,000). Members of Naturex's management bodies do not benefit from any long-term benefits. Two transactions linked to SGD, which holds 16.29% of Naturex's capital and 19.45% of its voting rights, were carried out in 2009:

o contribution by Naturex SA of € 7,000 to the company's current assets which amounted to a total € 379,000 at the close of the financial year;

o as part of the capital increase described in Note 1.1 – Highlights , the directors of Naturex

SA transferred their shares to SGD which contributed a total € 9.2 million to the operation. All of the legal information relating to the capital increase is given in the prospectus approved by the French Securities Regulator, the AMF (authorization No. 09-027), on February 4, 2009, and can be consulted on the group’s website: www.naturex.com.

24.2 Off-balance sheet commitments

Commitments received


Life insurance covering Naturex's President and CEO 3,417 417

Guarantee governing the transport of alcohol Unlimited Unlimited

Commitments given


Group companies' guarantees for customs offices 1,402 801

Pledging of securities and/or business assets as part of the

structured loan agreement92,230 59,825

Guarantees for suppliers 101 -

31/12/2009 31/12/2008

31/12/2009 31/12/2008


145

Note 25 Pro-forma information

The pro-forma financial information set out below reflects the merger of the activities of Naturex group with those of the Ingredients Division of Natra group. It includes the consolidated income statement as at December 31, 2009. Insofar as the companies were acquired on December 30, 2009, the group's consolidated balance sheet includes the balance sheets of the companies acquired, thereby eliminating the need to draw up a pro-forma balance sheet. Naturex's pro-forma income statement as at December 31, 2009, was drawn up as if the acquisition had occurred on January 1, 2009, and based on the following elements:

- the consolidated financial statements of Naturex group as at December 31, 2009, drawn up in accordance with all governing IFRS standards and audited by the appropriate statutory auditors,

- the income statements of the companies within the Ingredients Division of Natraceutical group as at December 31, 2009 drawn up in accordance with all governing IFRS standards.

The functional currencies of the companies within the Ingredients Division of Natraceutical are the Sterling, US Dollar, Swiss Franc, Australian Dollar, Brazilian Real and Russian Ruble. The income statements of these companies as at December 31, 2009, were converted according to the following method: The income statements were converted at the following average rates:

€ 1 = GBP 0.8988 € 1 = CHF 1.4895 € 1 = AUD 1.6242 € 1 = BRL 2.5018 € 1 = RUB 44.7350 € 1 = USD 0.72049

Principles and methods used to draw up pro-forma information

The pro-forma financial information set out below is given in thousands of euros and reflects the impact on Naturex's income statement of the integration of the companies within the Ingredients Division of Natra group had it been carried out on January 1, 2009.


146


(a) (b) (c)

Revenue 101,917 88,758 (4,607) - - 186,068

Immobilized production 296 59 - - - 355

Inventories (207) (121) - - - (327)

Operating subsidies 1,467 248 - - - 1,715

Other operating revenues 2,209 2,844 (17) (391) - 4,645

Purchases (33,184) (54,018) 4,654 - - (82,548)

Payroll expenses (23,770) (14,166) - 18 - (37,917)

External expenses (27,958) (17,278) - 1,988 - (43,248)

Taxes (1,018) (123) - - - (1,141)

Depreciation and amortization expense (5,278) (3,275) - - - (8,553)

Other operating expenses (1,413) (849) - - - (2,262)

OPERATING INCOME 13,062 2,078 30 1,615 - 16,786

Cash and cash equivalents 43 88 - - - 130

Cost of gross financial debt (4,188) (1,633) - - 383 (5,438)

COST OF NET FINANCIAL DEBT (4,145) (1,545) - - 383 (5,307)

Other financial income and expenses (526) 389 (30) - - (168)

TAX EXPENSE (1,938) (688) - (533) (126) (3,285)

NET INCOME BEFORE COMPANIES ACCOUNTED FOR BY

THE EQUITY METHOD6,453 234 - 1,082 256 8,026

Net income of companies accounted for by the equity method (1,206) - - - - (1,206)

NET INCOME FOR THE PERIOD 5,247 234 - 1,082 256 6,820

Total

Proforma

Naturex Group

historical

scope

Companies

acquired

Inter-company

eliminations

Adjustment of

financial

expenses

Elimination of

Group fees

Comments pertaining to restatements

(a) Inter-company eliminations

Two types of flows and balances are eliminated: - flows between the former companies of the Ingredients Division of Natra group, - flows between the former companies of the Ingredients Division of Natra group and the consolidation scope of Naturex group as published in the half-yearly financial report on June 30, 2009.

(b) Elimination of group fees

The companies within the Ingredients Division were invoiced fees by other companies within Natra group and vice-versa.


147

Given that these companies operate on a completely independent basis, and that their holding companies do not provide any central services or transverse expertise, all corresponding income and expenses were written off in the financial statements of the companies within the Ingredients Division of Natra group. The fees invoiced to the companies acquired amounted to € 2.0 million, whilst the fees invoiced by the companies acquired totaled € 0.4 million. The tax impact of the pro-forma adjustments was calculated at a theoretical tax rate of 33.33%.

(c) Adjustment of financial debt

The debt expense of the companies acquired was much higher than it will be once they have been integrated within Naturex group, and is primarily linked to the purchase of securities outside of the scope acquired. The debt expense booked in the financial statements hereafter corresponds to an average debt of € 25 million, i.e. the average debt of the companies on the date they were acquired.

The tax impact of the pro-forma adjustments was calculated at a theoretical tax rate of 33.33%.


148

Statutory Auditors’ Report on the consolidated financial statements

Year ended December 31, 2009 To the shareholders, In compliance with the assignment entrusted to us by your shareholders’ Annual General Meeting, we hereby report to you for the year ended December 31, 2009, on:

• the audit of the accompanying consolidated financial statements of Naturex SA; • the justification of our assessments; • the specific controls prescribed by law.

The consolidated financial statements were drawn up by the Board of Directors. Our responsibility is to express an opinion on the statements based on our audit.

1 Opinion on the consolidated financial statements

We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the consolidated financial statements are free from material misstatement. An audit consists in examining, on a test basis or by means of another method, the evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall presentation of the financial statements. It is our belief that the information we have collected is sufficient and relevant as a basis for our opinion. In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and the financial position of the group as well as of the results of its operations for the year in accordance with the IFRS adopted by the European Union. Without qualifying our opinion, we draw your attention to Note 4.1 of the statements which describes the changes in their presentation in accordance with revised standards IAS 1 "Presentation of Financial Statements" and IFRS 8 "Operating Segments" adopted by the European Union and mandatory as of January 1, 2009.

2 Justification of our assessments

In accordance with the provisions of Article L. 823-9 of the French Commercial Code relating to the justification of our assessments, we bring your attention to the following matters: At each year-end, the company systematically carries out a goodwill impairment test and also assesses whether there is any evidence of a loss in the value of non-current assets, using the methods described in Note 5 to the financial statements. We have examined the methods for implementing the impairment test as well as the cash flow forecasts and assumptions used, and we have verified that Note 5 provides the appropriate information.


149

These assessments were made in the context of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report.

3 Specific procedures prescribed by law

In accordance with professional standards applicable in France, we have also verified the information given in the group’s management report. We have no matters to report as to its fair presentation and consistency with the consolidated financial statements. Statutory Auditors Paris La Défense - April 26, 2010 Avignon – April 26, 2010 Erreur ! Condition du test manquante. KPMG S.A. AREs X.PERT Audit Michel Piette Laurent Peyre

150

Chapter 4

Parent financial statements and notes

Chapter 4 – Parent financial statements and notes

151

Balance Sheet Assets

31/12/2009 31/12/2008

in thousands of euros Notes Gross Amort./ prov. Net

FIXED ASSETS 207,371 8,786 198,585 93,059

Intangible fixed assets 2 15,441 1,143 14,299 13,211

Tangible fixed assets 2 13,219 7,223 5,996 5,801

Financial fixed assets 3 178,711 420 178,291 74,047

CURRENT ASSETS 51,294 196 51,097 41,941

Inventories and work in progress 4 17,394 17,394 18,360

Accounts receivable 5 7,666 185 7,481 7,883

Various receivables 6 15,719 15,719 14,747

Cash 7 10,515 11 10,504 952

Accruals and equivalent 8 2,589 2,589 832

Translation differences (assets) 19 1,817 1,817 1,716

TOTAL ASSETS 263,070 8,982 254,088 137,549

Liabilities

in thousands of euros Notes 31/12/2009 31/12/2008

Capital 9,546 4,522

Contribution, merger, issue premiums 131,039 39,727

Legal reserves 582 445

Statutory reserves 2,031 1,228

Regulatory reserves 28 28

Retained earnings 1 1

Income for the financial year 207 1,328

Regulatory provisions 378 245

TOTAL SHAREHOLDERS' EQUITY 9 143,812 47,525

PROVISIONS FOR RISKS AND CHARGES 10 1,644 1,745

Financial loans and borrowings 11 92,264 63,921

Current bank loans 3,311 10,731

Partner current accounts 392 78

Accounts payable 12 8,471 10,907

Other debt 13 3,988 2,584

Translation differences (liabilities) 19 208 57

TOTAL DEBT 108,632 88,279

TOTAL LIABILITIES 254,088 137,549


152

Income statement

in thousands of eurosNote 31/12/2009 31/12/2008

Revenue 14 52,278 50,693

Carriage invoiced 215 240

Inventories -322 1,501

Immobilized production 280 246

Other operating income 6,981 6,143

TOTAL OPERATING INCOME 59,434 58,823

Purchases 29,499 31,152

Other external expenses 13,718 12,712

Taxes 828 715

Payroll expenses 6,269 5,799

Social charges 2,700 2,429

Amortization/depreciation allowances and provisions 2,304 1,844

Other expenses 590 20

TOTAL OPERATING EXPENSES 55,909 54,672

OPERATING ITEMS 3,524 4,152

Financial income 3,474 10,473

Financial expenses 7,415 14,142

FINANCIAL ITEMS -3,941 -3,669

Non-current income 80,416 9

Non-current expenses 80,564 224

NON-CURRENT ITEMS 15 -149 -215

INCOME BEFORE TAX -565 267

Income tax -773 -1,061

NET INCOME 207 1,328


153

Contents

Contents ...................................................................................................................... 153

Note 1 General information ....................................................................................... 155

1.1 Highlights ........................................................................................................................................ 155

1.2 Events occurring after closure ......................................................................................................... 158

1.3 Accounting principles and methods ................................................................................................ 159

Note 2 Tangible and intangible fixed assets ................................................................ 159

2.1 Acquisitions and disposals ............................................................................................................... 159

2.2 Amortization of fixed assets ............................................................................................................ 160

2.3 Amortization and depreciation ........................................................................................................ 160

2.4 Leased assets ................................................................................................................................... 161

Note 3 Financial fixed assets ...................................................................................... 162

3.1 Acquisitions, provisions and disposals ............................................................................................. 162

3.2 Valuation of equity securities – Depreciation .................................................................................. 163

3.3 Table of subsidiaries and holdings................................................................................................... 163

Note 4 Inventories and work in progress .................................................................... 165

4.1 Inventories ....................................................................................................................................... 165

4.2 Breakdown by type of inventories ................................................................................................... 165

Note 5 Accounts receivable ........................................................................................ 165

Note 6 Other receivables ........................................................................................... 166

Note 7 Investment securities ..................................................................................... 166

7.1 Shares held by the company ............................................................................................................ 166

7.2 Marketable securities ...................................................................................................................... 167

Note 8 Prepayments .................................................................................................. 167

Note 9 Shareholders' equity....................................................................................... 167

Note 10 Provisions for risks and expenses .................................................................... 168


154

Note 11 Financial debt ................................................................................................. 169

Note 12 Trade and other accounts payable .................................................................. 169

Note 13 Other debt ..................................................................................................... 169

Note 14 Revenue ......................................................................................................... 170

Note 15 Exceptional income ........................................................................................ 170

Note 16 Average headcount ........................................................................................ 170

Note 17 Commitments ................................................................................................ 171

17.1 Commitments given......................................................................................................................... 171

17.2 Commitments received .................................................................................................................... 171

Note 18 Breakdown of capital ...................................................................................... 172

Note 19 Translation differences ................................................................................... 172

Note 20 Financial income and expenses of related parties ........................................... 173

Note 21 Compensation of senior management ............................................................ 173

Note 22 Deferred tax ................................................................................................... 173

Note 23 R&D expenses ................................................................................................ 174

Statutory Auditors’ Report on the financial statements ................................................ 175

Special report of the Statutory Auditors on regulated agreements ............................... 177


155

Note 1 General information

1.1 Highlights

Acquisition of the Ingredients Division of Spanish group, Natraceutical.

On August 6, 2009, Naturex announced the signing of a Memorandum of Understanding for the integration of the Ingredients Division of Natraceutical group in Spain. On September 30, 2009, it announced the signing of a Master agreement, then a contribution agreement governing the merger of the two groups. Spanish multinational Natraceutical group is listed on the Spanish stock market and is a leading player in the research and development of naturally-sourced functional, active ingredients and nutritional supplements. Following the approval of its Joint Shareholders' Meeting on December 30, 2009, Naturex completed the acquisition which it financed in cash and through the issue of new shares. The Ingredients Division of Natraceutical group includes the following companies and/or assets:


Swiss company Obipektin AG is a recognized European leader in fruit and vegetable powders and specialty pectins with two major, fully-equipped production sites in Bischofszell and Bergdorf (German-speaking Switzerland). Like Naturex, the company markets its natural ingredients to industrial groups, primarily within the food sector, particularly baby foods. Obipektin reported yearly revenues of € 41 million and employed 137 people on December 31, 2009. The company has a sales office in Bangkok, Thailand.


English company Overseal Natural Ingredients Ltd is a leading European manufacturer and supplier of naturally-derived coloring agents, and also specializes in yeast and Talin – a naturally-strong sweetener which is principally used to mask bitterness. Based in Birmingham, the company has its own manufacturing plant and reported yearly revenues of € 26 million and a payroll of 85 people on December 31, 2009. Overseal Natural Ingredients Ltd also has 4 subsidiaries, including three which do not manufacture any products themselves (Overseal Colour Inc., Britannia Natural Product Limited, The Tallin Co Ltd) and Natraceutical Russia presented below.


156


Based in Moscow, this Overseal Natural Ingredients subsidiary is a distribution platform for Overseal Natural Ingredients and Obipektin products. The entity reported yearly revenues of € 2.3 million and employs 5 people.


Based closed to Sydney, Kingfood is a bridgehead company for the development of group sales in the Asia/Pacific region. A distribution platform that covers the whole of the region, it also has its own industrial formulation facilities. Kingfood reported yearly revenues of € 10 million and employs 27 people.


Exnama is a company based in Manaus in Brazil which produces purified caffeine for the food industry as well as caffeine-enriched beverages. The company reported yearly revenues of € 5 million and employs 26 people.






Naturex has purchased a 24.9% stake in this R&D company which specializes in ingredients and is also based in Valencia, Spain. The company's research focuses primarily on the production, design and purification of microorganisms (bacteria, yeasts and filamentous fungi) and microbial metabolites (by-products with a high value-added such as enzymes, proteins and nucleic acids).

Creation and contribution of Naturex shares

Following the approval by the Joint Shareholders' Meeting on December 30, 2009, Naturex issued 2,481,960 new shares in compensation for the shares contributed. The shares issued are listed on two separate lines since only 961,557 have voting rights attached, and 1,520,403 are preferential shares that have no voting rights attached for as long as they are held by Natra group.


157

In accordance with the agreements signed with Natraceutical group (Master Agreement signed on September 30, 2009), these shares were valued at € 32 in exchange for the contributions defined in the Contribution Agreement. Naturex SA's shareholders' equity increased € 79.2 million, including a € 3.7 million increase in share capital and an issue premium of € 75.7 million. € 170,000 in expenses linked to the capital increase (net of tax) was deducted from the issue premium.

Cash financing

In accordance with the terms of the agreements between the parties, only part of the cash payment due was made. Out of the € 15 million, only € 5 million was effectively paid to Natraceutical group, with the remaining € 10 million only falling due once the parties have reached a final agreement. Out of this € 10 million, € 8 million has been placed in escrow until the parties have signed an agreement. At the time the accounts were closed, the calculations made by the companies indicate that this balance payment will not be made. In line with the agreements signed with the banking pool, the € 10 million will be directly repaid to the bank and therefore deducted from the financial debt and acquisition price reported in Naturex's financial statements. The repayment will be made as soon as a formal agreement is reached between Natra and Natraceutical regarding the price adjustment. At the time this report was drawn up, no final agreement had been signed.

Restructuring of the group's financial debt

In order to finance the acquisition of the Ingredients Division of Natraceutical in cash, Naturex group has chosen to restructure its debt by repaying virtually all of its loans which it refinanced via a structured loan on Naturex SA of € 140 million set in place on December 30, 2009, and on which it had drawn down € 102 million on December 31, 2009. This loan has been restated in the amount of € 92 million in the financial statements given the imminent early repayment of the € 10 million initially provided for as part of the price adjustment. On December 30, 2009, three loans denominated in USD and CHF were signed with subsidiaries Naturex Inc. (€ 7.2 million), Naturex Holdings Inc. (€ 34.9 million) and Obipektin (€ 20 million). All three have the same repayment schedules and interest as the structured loan set in place on December 30, 2009. Under the terms of the agreement, the loan covenants shall apply on a six-monthly basis as of June 30, 2010. As a result, at the close of financial year 2009, the company had no related commitments to report.


158

Capital increase in cash

On March 3, 2009, Naturex confirmed the success of its capital increase launched on February 5, 2009. The prospectus for the operation was approved by AMF authorization No. 09-027 of February 4, 2009, and issued in accordance with Articles L.412-1 and L.621-8 of the French Monetary and Financial Code and the AMF's General Regulation, notably Articles 211-1 to 216-1. Initially set at € 15 million, the capital increase was extended to € 17.1 million following the exercise of its extension clause and breaks down as follows: capital contribution of € 1.3 million and an issue premium of € 16 million, from which € 258,000 in related expenses (net of tax) were deducted.

Ongoing organic development

GGrroowwtthh iinn ssaalleess

Naturex's revenues increased 3.1% (€ 1.6 million) in 2009. Net income after tax amounted to € 207,000. Naturex’s growth prospects have been further enhanced by the integration of the Ingredients Division of Natraceutical group.

NNeeww bbrraanncchheess iinn BBeellggiiuumm aanndd JJaappaann..

Naturex group opened a branch in Belgium on June 24, Naturex Benelux, and another in Tokyo Japan on October 9. Their remit is to develop and reinforce Naturex's local commercial presence and sales.

Other major events

SSaannaavviiee

Naturex SA acquired a 34.79% stake in Sanavie on January 1, 2007 for which it paid € 420,000. The Swiss company sells Naturex products on the Russian and Ukrainian markets. The company is currently in severe financial difficulty and, at the close of the group accounts for 2009, was unable to produce any audited accounts for the year. As a result, the fair value of Naturex's equity stake has been reduced to zero and represents an expense of € 420,000.

1.2 Events occurring after closure

Naturex Middle East – RAKFTZ Branch was awarded its commercial license on January 6, 2010.


159

1.3 Accounting principles and methods

The annual financial statements are drawn up and presented in accordance with existing French regulations, resulting from the decrees of the French Accounting Regulations Committee (CRC).

Naturex SA made no changes to its accounting methods during financial year 2009.

Note 2 Tangible and intangible fixed assets

2.1 Acquisitions and disposals

in thousands of euros01/01/2009 Transfers Acquisitions

Disposals or

scrapping31/12/2009

Start-up and R&D costs 189 189

Brands, patents and similar rights 874 1,124 1,998

Business assets 12,483 771 13,254

Total intangible fixed assets 13,546 - 1,895 - 15,441

General installations and fixtures and fittings of buildings 71 - 71

Plant, equipment and industrial tooling 5,101 21 555 5,678

General installations and miscellaneous fixtures and fittings 5,302 6 349 5,657

Transport equipment 395 105 22 478

Office and IT equipment 702 204 9 896

Furniture 105 11 3 119

Property under development 79 -38 279 320

Total tangible fixed assets 11,754 1,495 31 13,219

Overall total 25,300 3,390 31 28,660


160

2.2 Amortization of fixed assets

Type Method Term

Software Straight-line 4 years

Patents Straight-line 20 years

R&D expenses Straight-line 5 years

Building on leasehold land Straight-line 10 years

Equipment and tooling Straight-line 7 years

Laboratory equipment Straight-line 5 years

General installations Straight-line 10 years

Transport equipment Straight-line 4 years

IT & office equipment Straight-line 4 and 5 years

Furniture Straight-line 7 years

2.3 Amortization and depreciation

On December 31, 2009, amortization and depreciation on fixed assets break down as follows:

in thousands of euros 01/01/2009Allowances for the

year

Provisions for the

year

Disposals or

scrapping31/12/2009

Start-up, R&D costs 20 46 66

Concessions, patents and licenses 315 14 490 819

Business assets - 258 258

Other intangible fixed assets - - -

Total intangible fixed assets 335 318 490 - 1,143

General installations, fixtures and fittings 71 1 71

Plant, equipment and industrial tooling 2,934 591 3,525

General installations, miscellaneous fixtures and fittings 2,193 486 2,679

Transport equipment 216 85 20 282

Office and IT equipment 476 126 9 594

Furniture 63 9 72

Total tangible fixed assets 5,953 1,298 - 29 7,223

Overall total 6,288 1,617 490 29 8,365


161

2.4 Leased assets

There were no lease finance contracts at December 31, 2009.


162

Note 3 Financial fixed assets

3.1 Acquisitions, provisions and disposals


TransfersAcquisitions

Disposals or

scrappingProvisions 31/12/2009

Holdings 61,461 129,063 80,410 420 109,694

Other f inancial f ixed assets - 1,175 1,175

Prepayments on financial f ixed assets -

Related receivables 12,538 62,238 7,422 67,354

Deposits and guarantees 48 23 4 67

Total financial fixed assets 74,047 - 192,500 87,836 420 178,291

As indicated in Note 1.1, Naturex SA acquired the Ingredients Division of Natraceutical group on December 30, 2009. The acquisition cost includes the shares in the following companies for a total € 83.3 million:

- Obipektin - Overseal - Naturex Spain - Exnama - Kingfood

On the same date, Naturex SA transferred its shares in Naturex Inc. to Naturex Holdings Inc. for a total € 45.6 million, resulting in both a disposal and an acquisition since the € 45.6 million was added to the share capital of Naturex Holdings Inc. US subsidiary, Naturex Holdings Inc., was set up for this very purpose and with a view to transferring to it part of the shares acquired on December 30, 2009. The shares in Overseal, Kingfood and Exnama were transferred to Naturex Holdings Inc. for a total € 34.8 million on the same date, with Naturex SA also making over the full capital of its newly-created subsidiary, Naturex Trading Shanghai, for € 100,000 over the course of the financial year. As reported in Note 1.1, the acquisition of the shares in the companies making up the Ingredients Division of Natraceutical group is subject to a price adjustment: the calculations made by the companies indicate that the balance of the cash payment due (€ 10 million) will not be made, but deducted from the value of the shares and debt acquired as provided for in the structured loan agreement. Finally, a provision of € 420,000 has been booked to cover the assets of Sanavie (see Note 1.1).


163

3.2 Valuation of equity securities – Depreciation

Equity securities are recorded at their acquisition cost. A depreciation expense is booked where the accounting value of a security is higher than its useful economic value. A security’s useful economic value is determined according to the company’s equity share ratio, its development prospects and revenues. A company’s development prospects are based upon past experience and various other factors. As the sharp downturn in today’s economic environment makes it difficult to forecast future activity, these criteria are taken into account in Naturex’s prudent management strategy, even if the group expects the current financial crisis to have a very minor impact on its performance. It is therefore possible that future results differ somewhat from the forecast appreciation in the value of the company’s securities portfolio.

3.3 Table of subsidiaries and holdings

Naturex Naturex S.C.I. Naturex SpA Naturex Obipektin AG Naturex UK Naturex Trading

Subsidiaries Holdings Inc Morocco Les Broquetons Spain S.L. Shanghai Total

in thousands of euros USA Morocco France Italy Spain S.L. Switzerland United Kingdom China

Securities: gross value 45,645 6,245 580 8,422 11,414 37,290 148 100 109,845

Securities: net value 45,645 6,245 580 8,422 11,414 37,290 148 100 109,845

Related receivables 46,873 434 - 20,005 42 67,354

Equity stake held 100% 96.34% 100% 100% 100% 100% 100% 100%

Capital 2,196 495 1,200 11,414 10,276 111 96

Reserves, issue premium

and retained earnings45,836 8,394 56 4,568 - 16,529 163 -

Net income - -48 41 1,319 - -306 24 -107

Revenues - 8,255 444 17,041 - 44,178 4,446 480

Dividends received - - - - - - - -

Non-reimbursed loans and

advances- - - - - - - -

Guarantees given - 1,403 - - - - - -


164

Sanavie BiopolisHoldings Total

in thousands of euros Switzerland Spain

Securities: gross value 420 1,175 1,595

Securities: net value - 1,175 1,175

Related receivables -

Equity stake held 34.79% 24.90%

Capital NC 2,037

Reserves, issue premium

and retained earningsNC 874

Net income NC 199

Revenues NC 1,047

Dividends received NC

Non-reimbursed loans and

advancesNC

Guarantees given NC


165

Note 4 Inventories and work in progress

4.1 Inventories

Inventories of raw materials and other supplies are valued by batch at their purchase cost using the FIFO (first-in first-out) method. Finished or semi-finished goods are valued by batch and using the FIFO method at the cost price which deducts all production costs from the purchase price: raw materials; import expenses; outsourcing; water, gas, electricity; adjuvants; packaging; waste removal costs; payroll expenses; depreciation. A provision for depreciation is booked when the purchase cost or cost price falls below the market price.

4.2 Breakdown by type of inventories


Raw materials 4,160 4,804

Finished and semi-finished goods 13,234 13,556

Total 17,394 18,360

Note 5 Accounts receivable

Receivables are valued at their nominal value. A provision for depreciation is made when there is a collection risk (even partial) on receivables.


166

All receivables relating to current assets are payable within a maximum of one year.


Gross receivables 7,666 8,306

Provisions -185 -423

Net receivables 7,481 7,883

Foreign currency receivables amount to € 499,000.

Note 6 Other receivables


Advances to employees 150 104

State, income tax 1,019 1,913

VAT deductibles 187 195

VAT receivables 469 249

Subsidiary current accounts 13,892 12,253

Accrued income - 31

Sundry debtors 1

Total15,719 14,747

Note 7 Investment securities

7.1 Shares held by the company

The company owns 7,000 of its own shares which it acquired at an average price of € 28.72 and which now represent a total gross value of € 201,000, i.e. 0.11 % of its share capital. Given the performance of the share price in the months following the end of the financial year, Naturex has booked a provision of € 11,000, i.e. a net value of € 190,000.

Used Not used

Shares 30 19 11

31/12/2009in thousands of

euros

01/01/2009 Allowances

Reversals Change in

methodOther


167

7.2 Marketable securities

At December 31, 2009, mutual fund investments amounted to € 408,000.

Note 8 Prepayments


Maintenance contracts 83 59

Rentals 53 17

Prepaid expenses for trade fairs, exhibitions 403 184

Loan commissions(1) 2,022 565

Prepaid insurance policies 7 4

Social security expenses for expatriate employees - 1

Miscellaneous 22 2

Total 2,589 832

(1) As part of the refinancing set in place on December 30, 2009, € 565,000 in costs linked to the setting up of the previous structured loan were removed from the balance sheet and booked to financial expenses. The costs linked to the setting up of the new structured loan will be spread over its full term, i.e. over seven years.

Note 9 Shareholders' equity

The capital is divided into 6,364,000 fully paid-up shares with a par value of € 1.50.


168


Allocation of

earnings

2008

Capital

transaction

Capital cost

allowanceDividends

Earnings

200931/12/2009

Capital 4,522 - 5,024 - - 9,546

Issue premum 39,376 - 91,312 - - 130,688

Merger premium 351 - - - - 351

Legal reserves 445 137 - - - 582

Unavailable reserves 28 - - - - 28

Optional reserves 1,228 1,191 - - -388 2,031

Retained earnings 1 - - - 1

Capital cost allowance 245 - - 133 - 378

Earnings (loss) 1,328 -1,328 - - - 207 207

47,525 - 96,335 133 -388 207 143,812

Changes in capital are set out in Note 1.1 – Creation and contribution of Naturex shares and capital increase in cash.

Note 10 Provisions for risks and expenses

Used Not used

Exchange rate losses(1) 1,716 1,636 1,716 - - 1,636

Financial instruments 20 20 -

Provision for legal

disputes/litigation8 8

1,745 1,636 20 1,716 - - 1,644

31/12/2009in thousands of euros

01/01/2009 AllowancesReversals Change in

methodOther

(1) Unrealized losses following the revaluation of foreign currency debt and receivables.


169

Note 11 Financial debt

in thousands of eurosTotal 1 year 2 to 5 years

More than 5

years

Borrowings 92,263 13,209 52,703 26,351

Outstanding accrued interest

Partner accounts 392 392

Bank loans 3,311 3,311



Variable rates apply to all financial debt, with the exception of € 33,000 to which a fixed rate applies.

Note 12 Trade and other accounts payable

Trade payables amounted to € 8,471,000 (including € 1,098,000 in foreign currency trade payables) at December 31, 2009, compared to € 10,907,000 at December 31, 2008.

Note 13 Other debt

Other debt has a maturity of less than one year and breaks down as follows:


Payroll expenses 666 614

Social charges 912 780

French state 136 198

Sundry expenses(1) 2,274 992

3,988 2,584

(1) including € 1.2 million in the current accounts of Naturex Inc. in 2009.

Expenses booked on December 31, 2009 are as follows:


170


Payroll expenses 666 614

Social charges 912 780

French State 136 198

Sundry expenses (fees, insurance, energy, telephone) 2,274 992

3,988 2,584

Note 14 Revenue

Revenue by geographic area breaks down as follows:

in thousands of eurosExport France Total

United States 20,844 20,844

Other countries 24,269 13 24,282

France 7,152 7,152

Revenue 45,114 7,165 52,278

Note 15 Exceptional income

As indicated in Note 3.1, Naturex SA transferred the shares of Naturex Inc. to Naturex Holdings Inc. for a total € 45.6 million, as well as the shares of Overseal, Kingfood and Exnama for a total € 34.8 million. Their net accounting value amounts to € 80.4 million.

Note 16 Average headcount

Naturex’s average headcount for 2009 was 186 employees. At December 31, 2009, the company’s headcount stood at 195 employees broken down as follows:


171

Category Headcount

Executives 64

Supervisors 26

Employees 40

Blue collar 64

Vocational training contracts 1

Total 195

Note 17 Commitments

17.1 Commitments given

Commitments given 31/12/2009 31/12/2008

Naturex guarantee to Moroccan banks who, in exchange, provide their

guarantee to the Moroccan customs office1,402 801

Pledging of securities and/or business assets as part of the structured loan

agreement92,230 59,825

Provisions do not include an amount for retirement commitments or restructuring operations. Severance pay in respect of Naturex SA is insured with the company Predica. It is a defined benefit scheme, with no residual commitment for the group. At December 31, 2009, the company's total commitment was valued at € 45,000, with no sums paid to Predica over the period. There are no specific schemes for company directors.

17.2 Commitments received

Commitments received 31/12/2009 31/12/2008

Life insurance covering Naturex's President and CEO 3,417 417

Guarantee governing the transport of alcohol Unlimited Unlimited


172

Note 18 Breakdown of capital

ShareholdersNumber of shares held on

31/12/2009

Voting rights on

31/12/2009

Jacques Dikansky 0.45% 1.13%

SGD 16.29% 20.65%

Natra Group 37.82% 19.15%

Odyssée Venture 3.24% 4.11%

Banque de Vizille 3.22% 5.66%

Thierry Lambert 0.02% 0.02%

Stéphane Ducroux 0.04% 0.10%

Naturex 0.11% 0.00%

Float 38.81% 49.18%

Note 19 Translation differences


Translation differences

(assets)

Translation

differences

(liabilities)

Customers 2 25

Suppliers 34 1

Supplier notes payable -

Borrowings 230

Subsidiary loans - 181

Subsidiary current accounts 1,551

Total 1,817 208


173

Note 20 Financial income and expenses of related parties


Interest

owed

Interest

owing

SCI les Broquetons 72

Naturex Inc 268

Naturex Morocco 15

Naturex SpA 224

Naturex UK 14

SGD - 7

Total 592 7

Note 21 Compensation of senior management

Gross compensation for the company's directors and officers amounted to € 294,000 in 2009, € 286,000 of which was paid over the course of the financial year.

Note 22 Deferred tax


Contribution to RSI 106

Unrealized exchange gains 27

Unrealized exchange losses 1,636

Net position 1,768

Related tax receivables: € 589,000.


174

Note 23 R&D expenses

Research and development expenses booked over 2009 amount to € 1.7 million.


175

Statutory Auditors’ Report on the financial statements

Year ended December 31, 2009 To the shareholders, In compliance with the assignment entrusted to us by your shareholders’ annual general meeting, we hereby report to you for the year ended December 31, 2009, on: • the audit of the accompanying financial statements of Naturex SA; • the justification of our assessments; • the specific procedures and disclosures required by law. The financial statements have been approved by the Board of Directors. Our responsibility is to express an opinion on the statements based on our audit. 1 Opinion on the financial statements We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan and perform the audit to obtain reasonable assurance that the yearly financial statements are free from material misstatement. An audit consists in examining, on a test basis or by means of another method, the evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall presentation of the financial statements. It is our belief that the information we have collected is sufficient and relevant as a basis for our opinion. In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the company at December 31, 2009 and of the results of its operations for the year then ended in accordance with the accounting rules and principles applicable in France. 2 Justification of our assessments In accordance with the provisions of Article L. 823-9 of the French Commercial Code relating to the justification of our assessments, we bring your attention to the following matters: Note 3.2 sets out the accounting rules and principles relating to the valuation of equity securities. As part of our assessment of the accounting principles used by your company, we have verified the appropriate nature of these methods and the information provided in the notes to the financial statements and their correct application. These assessments were made in the context of our audit of the financial statements taken as a whole, and therefore contributed to the opinion expressed in the first part of this report. 3 Specific verifications and information We have also performed the specific verifications required by law, in accordance with the professional standards applied in France.


176

We have no matters to report regarding the fair presentation and the conformity with the financial statements of the information given in the Board of Directors’ management report and in the documents sent to shareholders with respect to the financial position and the financial statements. Regarding the information provided in accordance with Article L.225-102-1 of the French Commercial Code pertaining to the compensation and benefits paid to company directors as well as to the commitments made in their favor, we have verified its consistency with the accounts or the data on which the accounts are based and, where applicable, with the figures collected by your company from the companies that control it or that it controls. On the basis of this audit, we hereby certify that the information provided is both accurate and sincere. In accordance with the law, we have verified that the various information relating to shareholdings and controlling stakes and the identity of shareholders has been communicated to you in the management report. Paris La Défense - April 26, 2010 Avignon, April 26, 2010 KPMG S.A. AREs X.PERT Audit Michel Piette Laurent Peyre


177

Special report of the Statutory Auditors on regulated agreements

Year ended December 31, 2009 To the shareholders, In our capacity as statutory auditors of your company, we hereby report to you on the regulated agreements of which we have been advised. Agreements concluded during the financial year Pursuant to Article L.225-40 of the French Commercial Code, we have been notified of the agreements which have been previously authorized by your Board of Directors. It is not our task to seek out the existence of other possible agreements or commitments, but to report to you, based on the information provided to us, on the characteristics and main terms and conditions of those we have been advised of without providing an opinion on their benefit or merits. It is your duty, under the terms of Article R.225-31 of the French Commercial Code, to assess the interest of concluding these agreements as part of the approval process. We have performed the necessary due diligence to comply with the ethical and professional standards of the French Institute of Statutory Auditors (Compagnie nationale des commissaires aux comptes). These standards require that we verify that the information provided to us is consistent with the documentation from which it has been extracted. Loan agreements granted by Naturex SA to Naturex AG (formerly known as Obipektin AG), Naturex Holding Inc., and Naturex Inc.

• Persons involved: Jacques Dikansky, Stéphane Ducroux and Thierry Lambert. • Nature and purpose: Following the approval of the Board of Directors on December 7, 2009, on December 30, 2009, Naturex SA signed loan agreements with its subsidiaries (direct or indirect) below: - Naturex A.G. (formerly Obipektin AG), - Naturex Holding Inc., - Naturex Inc.


178

The loans granted to Naturex A.G. (formerly Obipektin AG) and Naturex Inc. are to be repaid in full by December 31, 2016, while the loan granted to Naturex Holding Inc. falls due on November 30, 2010. The loans are pegged to the Libor and have an interest rate margin that is set each year. • Terms and conditions: On December 31, 2009, the loans granted by Naturex SA to its subsidiaries are as follows: - loan granted to Naturex A.G. (formerly Obipektin AG): CHF 29,764,000 - loan granted to Naturex Holding Inc.: € 34,765,152 - loan granted to Naturex Inc.: USD 10,416,714

Agreements and commitments approved during previous years which remained valid during the financial year In accordance with the French Commercial Code, we were informed that the following agreements, approved during previous years, remained in effect during 2009. Leasing of offices from SCI Les Broquetons

• Nature and purpose: Naturex SA leases the premises in which it carries out its business activities from real-estate company SCI Les Broquetons whose head offices are located at the same address. Your company owns 99.99% of the capital of this company. • Terms and conditions: Your company paid a rent of € 444,240 for financial year 2009.

Services contract in favor of the Naturex Morocco subsidiary

• Nature and purpose: Your company has undertaken to provide Naturex Morocco, a subsidiary in which Naturex SA holds 96.35% of its capital, with the following services: 1. IT: production and installation of financial and management software, staff training in Morocco, remote maintenance of the company’s software and IT developments according to requests from Naturex Morocco. 2. Finance and administration: general management, administrative and financial management, execution and follow-up, accounting control, management organization and control and legal assistance (insurance policies, litigation and legal proceedings). 3. Procurement: development of new products, search for new suppliers and product purchases, etc. 4. R&D: research and development of new products, with the company providing its skills and expertise, manufacturing processes and technical assistance to Naturex Morocco, and implementing, monitoring and performing quality controls of the new manufacturing systems. • Terms and conditions: The amount net of tax owed by Naturex Morocco to Naturex SA is set at 3% of its revenues before tax.


179

Income booked in respect of 2009 totaled € 214,451. Paris La Défense - April 26, 2010 Avignon, April 26, 2010 KPMG S.A. AREs X.PERT Audit Michel Piette Laurent Peyre

180

Chapter 5

Other general information

Chapter 5 – Other general information

181

Contents

1 Information concerning the issuer ..................................................................... 182

2 Global Pact and Quality Approach ..................................................................... 186

3 Legal structure .................................................................................................. 188

4 Related party transactions ................................................................................. 189

4.1 Relations between different group companies ................................................................................ 189

4.2 Main flows ....................................................................................................................................... 191

5 Stock market performance ................................................................................ 192

6 Liquidity contract .............................................................................................. 193

7 Allocation of stock options ................................................................................ 194

8 Annual registration document ........................................................................... 195

8.1 Publications in 2009 ........................................................................................................................ 195

8.2 2010 Publications calendar ............................................................................................................. 197

9 Person responsible for the registration document ............................................. 198

9.1 Certification of the person responsible for the registration document ........................................... 198

9.2 Management reports, consolidated financial statements of Naturex and Statutory Auditors’ reports for financial years 2008 and 2009 ................................................................................................... 199

9.3 Names of the persons responsible for the audit of the financial statements .................................. 199

10 Person responsible for the information provided in the registration document .. 200


182

1 Information concerning the issuer

Company name

Naturex Head offices

ZAC Pôle technologique AGROPARC BP 1218 84911 AVIGNON CEDEX 09

Date the company was constituted

January 16, 1992 for a period of 99 years unless extended or terminated in advance.

Legal form

Naturex is a French Société Anonyme (public limited company) with a Board of Directors (Law of July 24, 1966 and Decree of March 23, 1967) and registered with the Avignon Trade and Companies Register.

Trade and Companies Register

The company is registered with the Avignon Trade and Companies Register under No. B 384 093 563. The company’s APE code is 2053 Z. This corresponds to the Chemical Industry sector. The company’s articles of association, financial statements and reports, as well as the minutes of its Shareholders' Meetings can be consulted at its head office.

Corporate purpose

The company’s purpose, in France and in all countries, is: o the manufacture, marketing and wholesale/semi-wholesale and retail distribution of all edible products for the human and animal food sectors and the provision of services therein; o the investment in and management of securities in all companies in France and abroad with related and/or complementary activities; o the manufacture and marketing of all extracts intended for the cosmetic, dietary and pharmaceutical industries and all related activities.

To carry out any transactions which may pertain directly or indirectly to the corporate purpose as well as any similar or related purposes.


183

Business year

Each business year lasts 12 months, starting on January 1 of each year and ending on December 31.

Allocation and distribution of profits

The profit or loss for the year is calculated according to the difference between the year's income and expenses after amortization and provisions. From this profit, minus any previous year’s losses, at least 5% is withheld to make up the legal reserves prescribed by law. This ceases to be mandatory when the reserve fund reaches one tenth of the capital and resumes if the reserve happens to fall below this level. The profit remaining for distribution is made up of the year's net income minus any previous year losses and any amounts allocated to reserves but including any retained earnings. Furthermore, the Shareholders’ Meeting may decide to distribute sums deducted from the reserves at its disposal. Where it does, its decision must expressly indicate on which reserves the deductions are made. However, any dividends shall be primarily deducted from the distributable profit for the year.

Payment of dividends in shares

The Shareholders' Meeting called to approve the accounts for the financial year has the right to grant each shareholder the option between payment in cash, in dividend shares, or in advances on dividends for all or part of the dividend or advances on dividends to be distributed.

Shareholders’ Meetings

Shareholders’ Meetings are called and held under the conditions stipulated by French law. Every shareholder has the right, upon proof of identity, to take part in the Shareholders' Meetings by attending them in person, returning the voting slip by post or by appointing a proxy, subject to:

for holders of registered shares: registration in the company’s register;

for holders of bearer shares: their depositing at the premises mentioned in the notice of convocation, a certificate delivered by an authorized intermediary confirming the unavailability of their shares entered in an account up to the date of the Shareholders' Meeting.

These formalities must be accomplished at least five days before the Shareholders' Meeting. The Board of Directors can reduce the above time limit by means of a general measure from which all shareholders benefit. All shareholders of a particular category may participate in the special shareholders’ meetings for this category under the above-mentioned conditions.


184

Identifiable bearer shares

In accordance with Article 263-1 of the Law of July 24, 1966, the company can, at any time, request bearer securities identification from Euroclear.

Share capital

The company’s share capital stands at € 9,546,000, divided into 6,364,000 fully paid-up shares with a par value of € 1.50. The total number of voting rights stands at 4,944,919.


185

Change in Naturex’s capital over 5 years

Financial

yearType of transaction

Number of

shares issued Capital increase

Issue premium (Total/per

share)

Nominal

value

Number of

shares

Amount

authorized

Increase in capital(1) 10,662,030.50 €

(Board meeting of 06/01/05) 25.70 € /share

93,262 €

34 € /share

784,470 €

9.93 € /share

12,308 €

34 € /share

1,045,398 €

34 € /share

13,227,556 €

49.70 € /share

8,670 €

34 € /share

4,317 €

11.86 € /share

7,786 €

34 € /share

95,366 €

11.86 € /share

49,402 €

34 € /share

2007Capital increase through share with warrants issue

(Board meeting of 31/12/07) 18,124 27,186.00 €

616,216 €

34 € /share1.50 € 2,986 849 4,480,273.50 €

4,233.90 €

12.83 € /330 shares

(Board meeting of 31/12/07) 4,197.60 €

12.72 € /330 shares

236,925.00 €

34 € /share

238,983.36 €

12.72 € /share

20,399.70 €

12,83€ /share

17,337,260.00 €

20 € /share

30,769,824 €

32 € /share

48,652,896 €

32 € /share

(1) Operation note No. 09-027 relating to a capital increase of 866,794 shares with warrants, with no preemptive rights and with a priority period

(2) Document E No. E.09-093 governing a capital increase of 2,481,960 sjhares

9,546,000.00 € 2009Capital increase through the issue of preferential shares

(OGM and EGM meeting of 30/12/2009) (2) 1,520,403 2,280,604.50 € 1.50 € 6,364,000

5,823,060.00 €

2009Capital increase through the issue of ordinary shares

(OGM and EGM meeting of 30/12/2009) (2) 961,557 1,442,335.50 € 1.50 € 4,843,597 7,265,395.50 €

2009Capital increase via stock warrants (Board meeting of

06/03/2009) (1) 866,863 1,300,294.50 € 1.50 € 3,882,040

4,520,380.50 €

2008Capital increase following the taking up of subscription

options 1,590 2,385.00 € 1.50 € 3,015,177 4,522,475.50 €


options 18,788 28,182.00 € 1.50 € 3,013,389

4,481,263.50 €

2008 Capital increase via stock warrants 7,290 10,935.00 € 1.50 € 2,994,799 4,492,198.50 €

2007

Capital increase following the taking up of subscription

options 660 990.00 € 1.50 € 2,987,509

4,450,908.00 €


(Board meeting of 02/07/07) 1,453 2,179.50 € 1.50 € 2,968,725 4,453,087.50 €


options 8,041 12,061.50 € 1.50 € 2,967,272

4,438,503.00 €


(Board meeting of 26/12/06) 229 343.50 € 1.50 € 2,959,231 4,438,846.50 €


options 364 546.00 € 1.50 € 2,959,002

4,437,574,50 €


(Board meeting of 30/11/06) 255 382.50 € 1.50 € 2,958,638 4,437,957.00 €

2006 Increase in capital(2) 266,148 399,222.00 € 1.50 € 2,958,383

3,992,232.00 €


(Board meeting of 12/09/06) 30,747 46,120.50 € 1.50 € 2,692,235 4,038,352.50 €


(Board meeting of 13/03/06) 362 543.00 € 1.50 € 2,661,488

2005 414,865 622,297.50 € 1.50 € 2,579,383 € 3,869,074.50

3,873,189.00 €

2005Registered capital increase through share with warrants

issue 79,000 118,500.00 € 1.50 € 2,661,126 3,991,689.00 €


(Board meeting of 06/01/05) 2,743 4,114.50 € 1.50 € 2,582,126

Subscription options

At December 31, 2009, 177,306 subscription options had been granted at various Board meetings, entitling holders to subscribe to new company shares to be issued in respect of a capital increase in a nominal amount of € 265,959.


186

Other securities providing access to the capital

None.

Pledge of pure registered shares

None.

2 Global Pact and Quality Approach

Global Pact

Naturex joined the Global Pact in May 2003. Upon signing this pact (a United Nations’ initiative), signatory companies adhere to, amongst other things, a set of 9 principles on human rights, labor and the environment that state that companies must:

Support and respect the protection of internationally proclaimed human rights.

Ensure that they are not party to any human rights’ violations.

Ensure respect for the freedom of association and the effective recognition of the right to collective bargaining.

Ensure the elimination of all forms of forced or mandatory labor.

Ensure the effective abolition of child labor.

Ensure the elimination of discrimination in all areas of labor and employment.

Support a preventive approach regarding ecological challenges.

Take initiatives to promote greater environmental responsibility.

Encourage the growth and spread of environment-friendly technologies. Naturex fully subscribes to these principles. The group is careful to ensure respect for human rights and the right to work. The company has employee representatives at its manufacturing sites and ensures compliance with legislation, which also includes work safety. Naturex undertakes to employ adult staff (see note to the management report), both female and male, in accordance with applicable legislation, particularly as regards shift work. Naturex’s workforce is made up of several nationalities and employees of different origins even at a single site. By the very nature of its activities, Naturex takes the necessary measures to promote respect for the environment.

Sustainable development, quality and the environment

As reported by the group, Naturex is now listed amongst the World’s Top 20 Sustainable Stocks* also referred to as the SB20.


187

This list is published by Progressive Investor, a newsletter for investors, and edited by SustainableBusiness.com, a benchmark website in sustainable business. Published for the 8th year in a row, the SB20 lists those companies which are considered to be pioneers in sustainable business. The top 20 companies are selected by a panel of financial analysts that specialize in sustainable development. To be included on the list, companies must be a world-class example of sustainable business, with exacting environmental practices at every level of their organization. They must have a history of healthy profitability and be judged to be a sound long-term investment opportunity. "Naturex was selected for this year's SB20 List in the 'sustainable food' category because it produces products from plant extracts, replacing chemical ingredients" said Rona Fried, CEO of SustainableBusiness.com. "Besides being plant-based, its flavorings, colorings, antioxidants and preservatives are GMO-free and not tested on animals, providing a healthier and environmentally responsible alternative for the food industry. Such ingredients are found throughout the food industry; therefore Naturex has the potential to make an important contribution on a large scale". Following in the footsteps of the group's Avignon site, Naturex Morocco obtained the organic certification of France's independent standards body, Qualité France, which allows it to use the European label "organic farming", and was certified as compliant with the US National Organic Program (N.O.P.) by the Institute for MarketEcology (IMO). In 2008, the group was warded the following certifications: Organic Certification of its manufacturing plant in Avignon, authorizing it to market its products under the European label “organic farming”. Certification of compliance with the National Organic Program (N.O.P.) of the Institute for MarketEcology (IMO), required by the US Department of Agriculture (USDA) for the labeling of all organic products. These certifications confirm that quality of service at Naturex is in line with international standards, as is the company’s commitment to environmentally-friendly manufacturing processes. The group is committed to progressively extending these certifications to its other plants.


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3 Legal structure

38.9% 37.8%

100%

100%

>99% <1%

100%

100% 100% 100% 1 share in 7m 100% 100% 100% 96.3% 100% 100% 34.8% 24.9%

C

100% 100% 100% 100%

UK USA UK Russia

UK France switzerland Spain

The Talin

Co Ltd

Overseal

Colour Inc

Britannia

Natural

products

Ltd

Natraceu-

tical Russia

Biopolis

USA Australia UK Brazil Switzerland Spain China Italy Morocco

Naturex

Shanghai

Trading Co

Naturex

Spa

Naturex

MoroccoNaturex Ltd

SCI Les

BroquetonsSanavie

100%

Naturex IncKingfood

Australia Overseal Exnama Obipektin Naturex SL

Netherlands

3.2% 16.3% 0.5% 3.2%

Naturex SA

Naturex Holding

Inc

USA

Na Cooperative LLC

USA

Naturex Cooperatief

UA

BdV Float SGD DirectorsOdyssée

Venture

Natra

Group


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4 Related party transactions

4.1 Relations between different group companies

How the group operates

Naturex group is made up of Naturex SA, 18 subsidiaries and 2 holdings. Naturex Morocco: this site is one of the main production units which also contributes to the group’s research and development activities. The subsidiary’s activity includes plant extraction and almost exclusive marketing to the group of finished and semi-finished products. Its geographic location means Naturex benefits from privileged access to many agricultural raw materials and is able to considerably reduce logistics costs. Naturex Inc.: this subsidiary, which has its head office in the Pure World offices, markets all products in the range on the East Coast of the United States and in Canada. On January 3, 2002, the subsidiary acquired the assets of the Californian company, Brucia Plant Extracts. This acquisition means that the subsidiary is now present on both US coasts. Brucia Plant Extracts (a division of Naturex Inc.) exclusively produces and sells nutraceutical products. Naturex S.p.A.: this Italian company based in Milan employs a payroll of 48, with a production unit that already has the necessary pharmaceutical accreditations. Naturex Ltd: this company is a group sales subsidiary. S.C.I Les Broquetons: this company owns the land and buildings in which Naturex SA’s head office is located. Its only activity is the property management of the land and buildings needed for Naturex SA’s activity. There were no inflows or outflows of income with the new companies acquired in 2009.


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Production flows are as follows:

Services flows are as follows:


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4.2 Main flows

The table below summarizes the main flows seen in 2009 (in thousands of euros):

Flow of raw materials and finished products:

From Naturex SA 20,844 1,328 2,636 19 2,931

From Naturex Inc. 1,899 21 14 628

From Naturex Morocco 7,825 153 25

From Naturex SpA 6,339 592 19 302

From Naturex Shanghai 38 422

Flow of services:

From Naturex SA 3,482 214 294 292

From Naturex Inc. 6

From Naturex Morocco

From Naturex SpA

From Naturex UK

Flow of Naturex insurance 230 93 19

Flow of premises leasing from SCI 444

Flow of equipment

From Naturex SA 25 1,101 94 115

From Naturex Inc. 116 8 27

From Naturex Morocco

From Naturex SpA

To Naturex UKTo Naturex SA To Naturex Inc.To Naturex

Morocco

To Naturex

S.p.A.

To Naturex

Shanghai


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5 Stock market performance

Period

Total over

the period

Average

over the

period

Average

rateHigh Low

FY 2006 83,291 3,934 4,168 50.24 61.60 42.50

FY 2007 100,805 4,791 4,842 47.64 57.20 32.05

FY 2008 87,728 2,384 4,087 27.08 37.49 20.15

Jan-09 58,331 2,778 1,466 25.12 26.79 23.20

Feb-09 150,023 7,501 3,231 21.54 24.90 20.20

Mar-09 34,621 1,574 706 20.40 21.99 18.60

Apr-09 73,707 3,685 1,739 23.59 24.84 21.50

May-09 58,634 2,932 1,448 24.69 26.00 22.03

Jun-09 28,085 1,277 668 23.78 24.45 23.01

Jul-09 23,238 1,010 566 24.37 25.27 23.75

Aug-09 131,439 6,259 3,639 27.69 31.26 25.03

Sep-09 116,458 5,294 3,500 30.05 32.10 29.40

Oct-09 157,386 7,154 4,700 29.86 31.50 27.01

Nov-09 130,693 6,223 3,711 28.39 28.80 27.30

Dec-09 92,126 4,188 2,436 26.44 27.85 24.51

Source: Euronext Paris

Volume

(in number of shares)

Capital traded

(in thousands of euros)

Price

(in euros)

Total over the period


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6 Liquidity contract

A liquidity and liquidity generating contract that complies with the AEFI charter was signed on November 8, 2001 between Naturex, Société Générale and the stock market company SG Securities. Concluded for a period of one year and renewable by tacit agreement, the contract included various provisions with regard to market making and liquidity. Terminated on June 30, 2009, it is now entrusted to Natixis Securities under the same terms approved by the Joint Shareholders’ Meeting of June 30, 2009. As part of its mandate, Natixis undertakes to ensure a frequency of securities quotation and market liquidity in accordance with the commitments set out in the updated rules governing the organization and functioning of the Nouveau Marché. The contract was drawn up in accordance with current legal provisions, notably the provisions of (i) EC regulation No. 2273/2003 of December 22, 2003 governing the implementation of EC directive 2003/6/EC drawn up by the European Parliament and Council relating to exemptions applying to share repurchase programs and the stabilization of financial instruments; (ii) Articles L. 225-209 et seq. of the French Commercial Code; (iii) the General Regulation of the AMF and (iv) the AMF ruling of October 1, 2008. The contract was outlined in the press release published by the company on June 30, 2009. Within the framework of its liquidity contract, SG Securities purchased 11,948 shares and sold 10,703 over the six-month period. At June 30, 2009, the number of shares held by virtue of the contract amounted to 5,288. Bearing in mind that the group purchased 5,000 of its shares over the course of the year (see details in the management report), the grounds for the transactions carried out are as follows:

Grounds for operations % capital

Boosting the share price 95%

Employee shareholdings 5%

Securities affording access to shares n/a

Acquisitions n/a

Cancellation n/a


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7 Allocation of stock options

The stock options allocated in 2009 are described below:

Information on purchase or subscription options:

Date of M eeting 19/03/2001 30/06/2003 30/06/2003 28/06/2004 28/06/2004 14/06/2006 29/06/2007 30/06/2008

Date of Board M eeting 30/01/2003 06/01/2004 06/01/2004 06/05/2005 23/03/2006 27/03/2007 25/03/2008 13/03/2009

Type of option Subscription Purchase Subscription Subscription Subscription Subscription Subscription Subscription

Number of options allocated to: (outstanding at December 31, 2007)

Executive officers 500 1,779 17,500 20,000 30,500 13,000 33,000 33,000

Employees 1,420 0 1,816 4,350 8,696 10,929 14,362 20,650

(including 10 employees having received the largest allocations) 1,420 0 1,816 3,690 4,375 3,750 5,600 10,500

Start date for exercise of options 30/01/2006 06/01/2007 06/01/2007 06/05/2008 23/03/2009 27/03/2010 25/03/2011 13/03/2012

Expiry date 30/01/2008 06/01/2009 06/01/2009 06/05/2010 23/03/2011 27/03/2012 25/03/2013 13/03/2014

Purchase or subscription price (in euros) 12.83 12.72 12.72 27.54 45.15 49.65 27.54 24

Number of subscribed shares at December 31, 2009 1,920 1,779 19,118 0.00 0.00 0.00 0.00 0

Subscription or purchase options cancelled 0 0 198 828 2,856 3,457 2,914 994

Subscription or purchase options outstanding 0 0 0 23,522 36,340 20,472 44,448 52,656

Options granted over 2009 to the ten employees awarded the highest number of options:

Type of option Number Price Issuing company

Dikansky Jacques Subscription 25,000 24 NATUREX SA

Lambert Thierry Subscription 4,500 24 NATUREX SA

Ducroux Stéphane Subscription 3,500 24 NATUREX SA

Roller Marc Subscription 3,000 24 NATUREX SA

Sabrier Serge Subscription 2,000 24 NATUREX SA

Seguin Frédéric Subscription 2,000 24 NATUREX SA

Angelucci Maxime Subscription 500 24 NATUREX SA

Brochet Benoît Subscription 500 24 NATUREX SA

Cedat Sébastien Subscription 500 24 NATUREX SA

Doithier benoît Subscription 500 24 NATUREX SA

Company employees

Options granted by the company or by its affiliates or subsidiaries


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8 Annual registration document

8.1 Publications in 2009

Naturex’s financial communications department is committed to publishing the most transparent information possible. Institutional or individual shareholders, clients and suppliers should all be able to find an answer to any questions and form their own opinion on the quality of the Naturex share. All documents required by law are available to the public in both French and English. They can be obtained on request or downloaded from the group’s website and include: - the registration document filed with the AMF; - the shareholders’ letter issued two to three times a year; - the financial notices published in the press; - the prospectuses for the financial operations recorded by the French Securities Regulator (AMF). The following information has been published or made public over the last 12 months (30/03/2009 to 30/03/2010). Publications in the BALO official bulletin: May 27, 2009 Shareholders' Meeting notices Notice of convocation for the Joint Shareholders' Meeting August 28, 2009 Periodic publications Approval of the 2008 financial statements and allocation of earnings November 23, 2009 Shareholders' Meeting notices Notice of convocation for the Ordinary and Extraordinary Shareholders' Meetings November 25, 2009 Shareholders' Meeting notices Notice of convocation for the Ordinary and Extraordinary Shareholders' Meetings Cancels and replaces the notice published on November 23, 2009 Press releases: April 21, 2009 Naturex introduces its new product categories and corporate identity April 28, 2009 Q1 2009 revenues: + 14.8%. Yearly targets confirmed


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May 4, 2009 Press release announcing that the registration document for 2009 is available for consultation June 3, 2009 Monthly disclosure on share capital and voting rights June 23, 2009 Press release announcing the release of the preparatory documents for the Joint Shareholders' Meeting of June 30, 2009 June 30, 2009 Termination and signing of a liquidity contract July 1, 2009 Share repurchase program July 1, 2009 Naturex in World's Top 20 Sustainable Stocks July 8, 2009 Half-yearly report on the liquidity contract held with Société Générale July 21, 2009 H1 2009 revenue: +13%. Yearly targets confirmed August 6, 2009 Naturex and Natraceutical Group reach an agreement to create a world leading company of natural ingredients August 6, 2009 Additional information relating to the Naturex and Natraceutical Group agreement August 31, 2009 H1 2009 results: strong improvement in operating margin September 25, 2009 Integration of the Ingredients Division of Natraceutical Group September 30, 2009

New clinical study shows the benefits of Powergrape® supplementation in elite sports nutrition

October 1, 2009 Naturex and Natraceutical sign their merge October 20, 2009 +10.2% in revenue growth at end-September 2009 November 12, 2009 Naturex introduces Cereboost ™ for brain health November 12, 2009


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Disclosure on share capital and voting rights December 11, 2009 Press release announcing that Document E filed with the AMF is available for consultation December 23, 2009 Joint Shareholders’ Meeting: release of the preparatory documents December 30, 2009 Minutes of the Joint Shareholders' Meeting December 30, 2009 Minutes of the Joint Shareholders' Meeting January 5, 2010 Monthly disclosure on share capital and voting rights as at December 31, 2009 January 28, 2010 2009 revenues: +9.4% March 9, 2010 Disclosure on share capital and voting rights April 9, 2010 Disclosure on share capital and voting rights Website: www.naturex.com Naturex’s website is kept up to date with all useful information for shareholders. Shareholders can download all official documents and press releases in both French and English.

8.2 2010 Publications calendar

Scheduled publication dates: May 3, 2010 QI 2010 revenues June 30, 2010 Shareholders’ Meeting July 27, 2010 H1 2010 revenues October 19, 2010 Q3 2010 revenues

http://www.naturex.com/


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9 Person responsible for the registration document

Jacques Dikansky, President of the Board of Directors of Naturex SA.

9.1 Certification of the person responsible for the registration document

I hereby certify that, to the best of my knowledge and having taken all reasonable measures to this effect, the information set out in this reference document is true and that there are no omissions that could impair its meaning. I certify that, to the best of my knowledge, the financial statements were drawn up in accordance with generally accepted accounting principles and that they are a true and fair reflection of the financial situation and results of the parent and all of the companies within the consolidation scope. I also certify that the management report featured on pages 20 to 81 is a fair reflection of the activities, results and financial positions of the parent and all of the companies within the consolidation scope, as well as of the main risks and uncertainties with which they are confronted. I have obtained from the auditors of the present financial statements a letter certifying that they have verified all of the financial information and accounts presented in this registration document which they have read in its entirety. The report of the statutory auditors on the consolidated financial statements for the year ended December 31, 2009 presented on pages 143 and 144 of the present document contains an observation regarding the changes in presentation in accordance with revised standards IAS 1 "Presentation of Financial Statements" and IFRS 8 "Operating Segments" adopted by the European Union and mandatory as of January 1, 2009. Jacques Dikansky April 30, 2010


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9.2 Management reports, consolidated financial statements of Naturex and Statutory Auditors’ reports for financial years 2008 and 2009

The following information is included by reference in this registration document: Naturex’s management report, consolidated financial statements and statutory auditors’ report on the consolidated financial statements, as well as its parent financial statements and statutory auditors’ report on the financial statements of its parent for financial year 2008 are presented in the registration document filed with the French Securities Regulator (AMF) on April 30, 2009. Naturex’s management report, consolidated financial statements and statutory auditors’ report on the consolidated financial statements, as well as its parent financial statements and statutory auditors’ report on the financial statements of its parent for financial year 2007 are presented in the registration document filed with the French Securities Regulator (AMF) on April 30, 2008. The information included in these two registration documents, other than the information mentioned above, has, where applicable, been replaced and/or updated by the information included in the present registration document. The two registration documents cited above are available on the websites of Naturex and the AMF, http://www.amf-france.org.

9.3 Names of the persons responsible for the audit of the financial statements

SSttaattuuttoorryy AAuuddiittoorrss

KPMG S.A. Immeuble le Palatin 3 cours du triangle 92 939 Paris La Défense Cedex Represented by Michel Piette and whose mandate was renewed on April 5, 2004 for a period of 6 years.

CCoo--SSttaattuuttoorryy AAuuddiittoorr

ARES X PERT AUDIT 26 boulevard Saint Roch BP 278 84011 AVIGNON Represented by Laurent Peyre. Appointed until the close of the Ordinary Shareholders' Meeting in 2014 called to approve the financial statements for the financial year ended December 31, 2013.

http://www.amf-france.org/


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SSuubbssttiittuuttee SSttaattuuttoorryy AAuuddiittoorr

Raymond Crosnier 1 rue de la Préfecture 35 300 FOUGERES Appointed on June 29, 1998 for a period of 6 years. Renewed on April 5, 2004 for a period of 6 years.

CCoo--SSuubbssttiittuuttee SSttaattuuttoorryy AAuuddiittoorr

Mr. Olivier Rousset 26 boulevard Saint Roch 84,000 AVIGNON CEDEX 09 Appointed until the close of the Ordinary Shareholders' Meeting in 2014 called to approve the financial statements for the financial year ended December 31, 2013.

Statutory Auditors’ fees

in thousands of euros Amount %

Certification of financial statements 290.00 87%

Additional assignments 45.00 13%

Audit sub-total 335.00 100%

Corporate, tax and legal services

IT and technological services

Internal audit

Other (details to be provided)

Other sub-total

TOTAL 335.00 100%

Naturex S.A

10 Person responsible for the information provided in the registration document

Thierry Lambert, Naturex SA Pôle technologique Agroparc BP 1218 84911 Avignon Cedex 09

Tel.: +33 (0)4 90 23 96 89


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The present document was submitted to the AMF on April 30, 2010 in accordance with Article 212-13 of the latter’s General Regulation. It may be used to back a financial transaction if it is accompanied by a prospectus signed by the AMF. This document was drawn up by the issuer and incurs the liability of its signatories.

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Chapter 6

Cross-reference table

Chapter 6 – Cross-reference table

203

To make it easier to read the registration document, the following table of contents can be used to identify the main headings required by Appendix I of European Commission’s regulation No. 809/2004 dated April 29, 2004.

Cross-reference with the information given in the financial report:

Consolidated financial statements 82-145 Management report 20-81 Certification of the person responsible for the document 192 Statutory Auditors' report . on the report prepared by the President on internal control 79 . on the consolidated financial statements 144 . on the parent financial statements 169 . on the regulated agreements 171

1 Persons responsible Certification of the person responsible for the registration document 192 2 Statutory Auditors Statutory Auditors’ contact details and certifications 193, 194 Statutory Auditors' fees 194 3 Selected financial information Key financial data 82-145, 146-173 4 Risk factors Risk factors 41-46 Insurance and risk cover 46 5 Information concerning the issuer History 8 Investments 10, 116 Other 175-194 6 Business overview Principal activities 11-19 Principal markets 11-19 7 Organizational structure Organization chart, information on subsidiaries 182-185 8 Properties, plants and equipment 116-119 9 Operating and financial review 29-35 10 Capital resources Sources and amounts of the issuer's cash flow 86-87, 121 Information on the issuer's capital resources 88-89

Chapter 6 – Cross-reference table

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11 Research and development, patents and licenses 35, 135 12 Trend information 10 13 Profit forecasts or estimates 10 14 Administrative, management and supervisory bodies and general management

47-65 15 Remuneration and benefits 61-65 16 Board practices 59-60, 71-78 17 Employees Number of employees 66-68, 133 Shareholdings and stock options awarded to directors 133 Arrangements for involving employees in the capital of the issuer 48 18 Major shareholders 47-48 19 Related party transactions 40, 140 20 Financial information concerning the assets and liabilities, financial position and profits and losses of the issuer Historical financial information 176-178 Auditing of historical annual financial information 82-145, 146-173 Pro-forma information 141-143 Dividend policy 39, 70, 177 Legal and arbitration proceedings 37 21 Additional information Share capital 138-139, 162 Memorandum and articles of association 176-178 22 Material contracts n/a 23 Third-party information and statements by experts and declarations of any interest n/a 24 Documents on display 189-191 25 Information on holdings 47-48

Registration Document 2009 - Accueil - Actusnews Wire ingredients, yeast and caffeine. Thanks to the...

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