"Vegetables for healthy living"

“Vegetables for healthy living”

Financial report 2005/2006

Rue Nicolas Appert - BP 3017359653 Villeneuve-d’Ascq Cedex France

Tel.: +33 (0)3 20 43 60 60Fax: +33 (0)3 20 43 60 00

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Contents

Review of operations and annual financial statements 2Management report 2

I. Results of operations 2II. Risk management 9III. Corporate social responsibility and sustainable development 12IV. Capital stock 14V. Shareholders’ agreements 18VI. Changes in shareholdings 19VII. Share capital and voting rights as at 30 June 2005 19VIII. Share capital and voting rights as at 30 June 2006 19IX. Dividends 19X. Appointments of corporate officers 20

Report on proposed shareholder resolutions 21Report of the Supervisory Board 23Supervisory Board Chairman’s report on Board activities and internal control 24Statutory Auditors’ report on the report of the Chairman of Bonduelle SCA’sSupervisory Board on internal controls for financial reporting 27

Consolidated financial statements 28Consolidated income statement 28Consolidated balance sheet 29Consolidated cash flow statement 30Difference in consolidated equity 31Notes to the consolidated financial statements 32Auditors’ report on the consolidated financial statements 71

Parent company financial statements 72Income statement 72Balance sheet 73Cash flow statement 74Notes to the parent company financial statements 75Subsidiaries and participating interest 82Five-year financial summary 83Combined Meeting of 7 December 2006 84General Report of Statutory Auditors 91Special Report of the Statutory Auditors on regulated agreements 92

Other statutory information 93General information on the company 93Change in share capital 98Statutory Auditors’ fees 99

BONDUELLE - 2005/2006 Financial report 1

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BONDUELLE - 2005/2006 Financial report2

Year in review

The consolidated financial statements of Bonduelle Groupfor the fiscal year ended 30 June 2006 are presented forthe first time in accordance with IFRS (International FinancialReporting Standards) as adopted by the European Union.For the purpose of comparison, they include informationfor the fiscal year ended 30 June 2005 restated accordingto the same standards, with the exception of IAS 32-39 applicable as of 1 July 2005.

In fiscal 2005/2006 stable consolidated revenue was accompanied by a marginal decline in the operating margin and an improvement in net income.

Underlying this stable performance for total revenue, trendsby region were contrasted in an environment marked bydeflationary pressure in the consumer segment in Eurolandand strong growth in other markets.

Operating profit declined marginally reflecting the net impact of one-off restructuring and reorganization expensesof €2.8 million in connection with ongoing efforts to opti-mize industrial operations of the last two years and reor-ganization measures announced last year by the groupunder the evocative name of “David and Goliath”.

To this purpose, the Wanzleben plant in East Germany wasclosed and its activity transferred to the Straelen andReutlingen sites.

In France, the production activity of the Flaucourt plant wastransferred in large part to Estrées and Gniewkowo (Poland).

In addition, ambitious reorganization measures decidedand announced in the previous period were launched. Asa result, since January 2006, the new subsidiary organiza-tion has been operational and the reorganization of admi-nistrative services by geographical sector began in Francewith the closing of the headquarters of the previous BPLLégumes subsidiary and transfer of several accounting andsales back office services to Villeneuve-d’Ascq.

I - Results of operations

1. Revenue

Group revenue declined marginally 0.2% at constant structure and exchange rates (0.4% at current structure andexchange rates).

The 2.2% decline in sales in Western Europe reflected significant pressure on prices to boost consumer spendingcombined with our voluntary withdrawal from certain sectors not sufficiently profitable (fresh raw vegetables inFoodservice) or not contributing to our strategy of beinga pure player in the vegetable market (sale of the process-ed meat activity to Rosporden).

Outside of Euroland, sales performances were marked bypositive growth of 13% despite an unfavourable EUR/USDcurrency effect.

Canned vegetables sales gained 1.2% and accounted for 48% of group revenue. Sales of this division were particularly strong outside of Euroland.

Frozen vegetables declined 3.4% (23% of group sales). The performance of this division was affected by sharp pricedeclines in Western Europe in the retail market whereasrobust growth of 3% was registered in France in the foodservice network.

Fresh ready prepared vegetables and Delicatessen sales advanced marginally 0.3% over fiscal 2004/2005(representing 29% of group sales). This sector was adverselyaffected by the discontinuation of the distribution of rawvegetables that had become insufficiently profitable in theout-of-home meal segment in Germany and France.Excluding this voluntary discontinuation, processed ChilledVegetables would have advanced 3.8%.

Review of operations and annualfinancial statements

Management report

2. Current operating income

In the year under review, current operating income increased2.3% over fiscal 2004/2005 to €70.5 million (representinga current operating margin of 5.9%).

This improvement was achieved despite challenging andcontrasted economic trends:

- deflationary pressure in the consumer food market in theeuro region;

- sustained growth in other European markets, particularlyin Central and Eastern Europe;

- adverse currency effects on sales caused by the weaknessof the US dollar vis-à-vis currencies of Central Europe(Hungarian forint and Polish zloty) where our productionsales are in large part denominated in US dollars.

The discontinuation of operations generating losses in theChilled segment and the very successful production seasonof the previous summer for Canned and Frozen vegetablespartially offset increases in packaging and energy costs.

3. Net income

Consolidated income before minority interests advanced8.9% to €40.4 million versus €37.1 million in fiscal2004/2005.

Net income increased increased by 3.1% to €39.2 millioncompared with €38.0 million in 2004/2005.

Net financial expense declined to €9.6 million versus €10.0 million in 2004/2005 representing an improvementof 4%.

Excluding the impact of IAS 32-39, net financial expensetotalled - €20.3 million for fiscal 2005/2006 compared with- €10.3 million in the previous year. This change reflectsnotably the impact of higher rates and average debt for2005/2006 and non-recurring income of €2.3 million thatreduced financial expense in fiscal 2004/2005 (capital gainsfrom the disposal of marketable securities and the reversalof provisions) versus non-recurring expenses in fiscal2005/2006 of €3.0 million.

The group tax charge declined significantly from €22.2 millionin fiscal 2004/2005 to €17.8 million in the year under review.

This decline reflects a change in the breakdown of subsi-diaries contributing to earnings and the one time “exit-tax”on long-term capital gains incurred in the prior year.

This performance was achieved without applying the taxlosses of the Chilled vegetable activity in Germany.

4. Continued growth in capital expenditures

Capital expenditures for both tangible and intangible assets excluding acquisitions totalled €66.5 million versus€56.5 million in fiscal 2004/2005.

This high level reflects Bonduelle’s strategic focus on quality,productivity, security and the environment, and internalgrowth in markets offering significant potential for expansion.

The major ERP redeployment program for €25 million laun-ched in 2000 and to be completed in 2007 also accountedfor a significant percentage of capital expenditures in2005/2006.

Research and development investments accounted for 1%of revenue and have contributed notably to such innovativeproducts as the 2005 launch of “Tetra RecartTM” shelf-stableretail vegetable products and flexible packaging for the food catering industry. These investments also contributedto the development of new products and processes such as the “Sélection et Saveurs” line of Frozen vegetables,“Pleine Saveur” and “Agita e Gusta” in the fresh-ready prepared range, in addition to fresh soups or vegetable cakesin the Delicatessen line.

This budget highlights Bonduelle’s commitment to thegroup’s commitment to remaining the leading innovator inthe field of vegetables and associated services and long-term objective of becoming a pure player in this sector.

In addition to investments to maintain and enhance currentoperating performances, Bonduelle resumed its expansionthrough acquisitions, acquiring a 13% share of AlimentsCarrière, the Canadian leader in canned and frozen vege-tables with forecasted sales of €230 million for fiscal2006/2007. This explains in large part long-term investmentsof €14 million for fiscal 2005/2006 as compared with fiscal2004/2005 in which no acquisitions were made.

5. Stable working capital requirements

The increase in working capital of €5 million reflected:

- Good management of inventories that declined 6% to€280 million or 23% of revenue versus €296 million (25%of revenue in 2004/2005). Bonduelle has continued tofocus on optimizing inventory management while remainingattentive to the seasonal nature of the production activity forcanned and frozen vegetables that requires certain levelin inventories of finished products to be maintained.

- The neutralization of the increase in trade receivables of €10 million, in large part reflecting high level of sales inthe last two months of fiscal 2005/2006 by the increasein trade payables of €15 million resulting from an improvedmanagement in the settlement terms granted to oursuppliers.

- A €13 million increase in the net balance of other receiv-ables and payables.


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6. A reduction in gearing

Financial debt totalled €336.1 million. Excluding cash and cash equivalents and short-term investments of €54.8 million,financial debt totalled €281.3 million corresponding to gearing of 84% versus 90% at 30 June 2005 restated according toIAS 32-39.

A. Net financial debt

As at 30/06 (in millions of euros) 2004* 2005* 2005 2006

Net financial debt 218.3 261.5 274.6 281.3Shareholders’ equity 285.4 310.4 303.5 333.1Gearing 0.76 0.84 0.90 0.84

* Excluding IFRS and IAS 32-39.

B. Breakdown of net financial debt (after interest-rate and currency swaps)

As at 30/06 2004 2005 2006

Fixed rate 0% 2.5% 5.7%Floating rate 100% 97.5% 94.3%Euro 90% 88% 93%US dollar 7% 10% (4%)Other currencies 3% 2% 11%

7. Adoption of IFRS

The impact of the restatement of financial statements at 30 June 2005 according to IFRS breaks down as follows:

(in thousands of euros) 30/06/05

Income before minority interests under French GAAP 32,360Net income 33,122Minority interests (762)Restatement of deferred charges 245Restatement of fixed assets (2,095)Restatement of employee benefits 99Changeover to full consolidation of Sud-Ouest Légumes and Bonmaïs (314)Restatement of treasury shares 23Restatement of translation adjustments (655)Elimination of amortisation of goodwill arising from business combinations 6,210Elimination of amortisation of other goodwill 425Expenses associated with stock purchase options (144)Other 100Impact of deferred taxes on IFRS restatements 812Income before minority interests under IFRS 37,066Net income 38,046Minority interests (980)

8. Business highlights

A. Hungary

Highlighting its commitment to the environment, Bonduelle’spolicy of sustainable development has introduced a focuson natural resources. To this purpose, group employees seekto reduce water and energy consumption used in the trans-formation process. This year significant reductions wereachieved notably in the Nagykörös plant where energyconsumption ratios were cut by 50%.

B. Spain

Last June, Bonduelle announced a purchase of the frozenvegetable operations of Unilever in Spain already subcon-tracted to Bonduelle since 2001. This acquisition will contri-bute an additional €10 million in revenue, strengthening itsleadership in Spain in process vegetables.

C. Canada

Supplementing the external growth in Spain, the group created a joint venture with Aliments Carrière, the Canadianleader in canned and frozen vegetables. Through thispartnership, the North American company that shares ourgroup’s corporate values seeks to benefit from Bonduelle’sknowledge in high value added products whose offering inEurope is much more developed and thus gain access tonew vectors of growth.

D. Poland

To boost sales of its new “Bonduelki” products, the groupdeveloped an Internet site in Poland specifically dedicatedto children. This initiative offers both a communications plat-form to both launch products and promote Bonduelle’simage in this strong growth market.

E. Group developments

Reorganization measures announced last year by the groupwere launched. Under the evocative name of “David andGoliath”, Bonduelle’s goal is to optimize operating perfor-mances to support its expansion in growth markets. Thegroup’s agri-food industrial operations closed two plants inGermany and France and a new Cassegrain production lineunit at the Estrées industrial site (France) was inauguratedby more than 800 employees and their families on 22 Julyof this year. In addition, after a strategic review on grouptrends, administrative centres were created by geographicalmarkets. The new organization of subsidiaries, effective starting January, has been progressively implemented. All these measures were made possible by the completerevamping of the IT system, henceforth fully integrated, launched in 2000 and to be finished in 2007.

In addition, the company has pursued capital expendituresin European countries outside of Euroland to support expan-sion with sales in this region up 13%.

Fiscal 2005/2006 was also marked by the successful development of the Tetra RecartTM line. Marketed in Belgium, the Netherlands, Luxembourg, Germany, Portugal, France and Italy, this technological innovation of Bonduellecontinues to be rolled out. The new production line of the Renescure industrial site (France) will contribute to this successful deployment. In Portugal, innovations resultingfrom this new technology were awarded by being selectedas the product of the year 2006.

F. Awards

Under the prestigious patronage of Christian Poncelet,Chairman of the French Senate, the Family Business ofthe Year Award (“Grand Prix de l’Entreprise Patrimoniale”) was awarded to Bonduelle. Remitted by Laurence Parisot,the President of the Medef, the French business trade association, this prize was conceived in 2001 by ASMEP(“Association des Moyennes Entreprises Patrimoniales françaises” - French Association of Medium-SizedEntrepreneurial Businesses). This award seeks to promoteand recognize the corporate image, value and importanceof French family businesses.

In the Boursoscan survey of 96 websites of publicly tradedcompanies, the Bonduelle corporate site (www.bon-duelle.com) was awarded third place in the small and mid-caps category. Qualities contributing to this recognitionincluded the site’s Web surfing ease and the quality andtimely nature of the information provided.

Following the Journées Pratiques de Nutrition, the Louis Bonduelle Foundation was awarded the Nutridor prize,for its excellent communications on nutrition. This prize recognizes the numerous successes of campaigns by theFoundation to promote better nutritional practices.

9. Subsequent events

In June 2006, the Bonduelle Group acquired a minority stakein Aliments Carrière Group, the Canadian leader in cannedand frozen vegetables with a market share of more than 70%.

The privately held company Aliments Carrière, with a hun-dred employees headquartered in Saint-Denis-sur-Richelieu,Québec, operates seven vegetable processing plants (fourin Québec and three in Ontario).

The major share of its sales (60%) is through retail outlets inthe mass market segment.


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In accordance with the terms of the agreement concludedin June, starting 1 July 2006 the group has since acquiredadditional shares, increasing its shareholding in October2006 to 25%.

Sales in 2006/07 (cut off at 30 April) are expected toapproach €230 million with canned vegetables accountingfor 40% (Canada) and frozen vegetables 60% (Canada andthe United States).

In July 2006, through its subsidiary Bonduelle SurgeléInternational the group acquired the frozen products activi-ties (excluding ice cream) of Unilever in Spain.

This transaction that took effect on 1 July 2006 concernedprimarily the Salto brand that will contribute additional salesto Bonduelle of €10 million.


10. Annual trading activity and closing price

Share price (in euros) 2002/2003 2003/2004 2004/2005 2005/2006

High 77.00 80.00 78.05 68.30Low 51.60 67.80 58.40 55.15Closing price 69.50 78.00 58.40 67.50Market capitalization at 30 June (in millions of euros) 556 624 467 540Average monthly trading volume 158,340 201,005 236,080 239,424

11. Outlook

In July 2006, the Bonduelle Group acquired the frozen foodoperations (excluding ice cream) of Unilever in Spain, and primarily the commercial goodwill of the Salto brandsubcontracted since 2001 to Bonduelle (Benimodo plant)representing a profitable source of additional annual revenue of €10 million. This operation concerns notablyrice and vegetable-based stir-fried dishes, a segment inwhich Salto is the leader with a market share of nearly 50%.

In addition, in June 2005, the group acquired a minority shareholding until 2007, in Aliments Carrière, the Canadianfrozen and canned vegetable leader, with revenue of

€230 million with US market accounting for 30%. AlimentsCarrière operates 7 plants (4 in Québec and 3 in Ontario).It represents an accretive acquisition for the group and anexcellent opportunity for expansion in a North Americanmarket where demand for prepared vegetable-based mealsis strong.

These acquisitions combined with improved economictrends in the euro zone in recent months, our continuedexpansion and our strong commercial positions in Centraland Eastern Europe led the groundwork for a positive outlook for 2006/2007 and the years ahead for revenueand earnings growth.

12. Remuneration of officers

For fiscal 2005/2006, compensation or attendance fees allocated to officers, by the company and controlled companieswere as follows:

(in euros) Bonduelle SCA Bonduelle SA Total

Bruno Bonduelle 4,166.66 4,166.66Damien Bonduelle 1,200 1,200Félix Bonduelle 4,166.66 4,166.66Jean-Marie Bonduelle 4,166.66 4,166.66Daniel Bracquart 5,350 5,350Olivier Cavrois 1,350 1,350André Crespel 5,350 5,350Stanislas Dalle 1,200 1,200Francis Danjou 1,350 1,350Thomas Derville 6,000 6,000Jean Guéguen 5,350 5,350Gilles Lessard 6,000 6,000Yves Tack 5,350 5,350Pierre et Benoît Bonduelle SAS 990,348 990,348

Attendance fees allocated to members of the SupervisoryBoard and the Accounts Committee are set by the GeneralMeeting.

The company controlling Bonduelle SCA and companies thelatter controls paid no compensation to officers and havemade no commitments involving the suspension or changesto these functions.


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13. Parent company financial statements of Bonduelle SCA

A. Income statement

The holding company Bonduelle SCA registered net income of €57.1 million.

This performance breaks down as follows:

1. Net financial income of €49.8 million from:

- Dividends from Bonduelle SA +49.4

- Interest income from the loan to Bonduelle SA +0.5

- Other interests and similar income +0.2

- Financial charges and allowances for amortisations and reserves -0.3

2. Operating expenses of €1.4 million.

B. Balance sheet

The main balance sheet items include:

1. Fixed assets consisting primarily of capital assets of €209.5 million.

2. Shareholders’ equity of €241.4 million.

(in euros) 2002/2003 2003/2004 2004/2005

Dividend payments 1.25 1.25 1.12Tax credits on dividends 0.62 - -Gross dividend 1.87 1.25 1.12Income qualifying for a tax allowance 1.25 1.12Total payout (in thousands of euros) 10,000 10,000 8,960

C. Share capital

As at 30 June 2006, the company share capital consistedof 8,000,000 shares with a par value of €7 per share andtotal voting rights of 12,209,864.

Concerning holders of at least 5% of the share capital, tothe best of the company’s knowledge, the French joint stockcompany (SA) Baie d’Audierne with 22.4% of the capitaland 29.3% of the voting rights.

Group employees own 2.5% of the share capital througha mutual fund.

Under the authorization granted by the ExtraordinaryGeneral Meeting of 9 June 2005, Management granted45,000 stock purchase options at €62.52 to 46 employeesin the period.


Marketable securities

As at 30/06/05 As at 30/06/06

Other treasury shares (1) 82Treasury shares held in connection with stock option plans 5,017 6,358Impairment of treasury shares held in connection with stock option plans (257)

4,842 6,358Valuation at closingTreasury shares held in connection with stock option plans 7,096 9,052

(number of shares) As at 30/06/05 Increase Decrease As at 30/06/06

Treasury shares held in the value of stock option plans 121,500 45,000 32,401 134,099Treasury shares held in connection with a liquidity agreement 17,669 261,022 252,799 25,892

(1) Treasury shares not held in connection with stock option plans recorded under marketable securities at 30 June 2005 were reclassified under financial assets at 30 June 2006.

Five-year financial summary

(in thousands of euros) 30/06/02 30/06/03 30/06/04 30/06/05 30/06/06

Financial position at year-endShare capital 56,000 56,000 56,000 56,000 56,000Number of shares issued 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000

Results of operations for the yearRevenue from subsidiaries 11,390 5,025 23,718 29,481 49,365Revenue ex-VATIncome pre-tax, employee profit-sharing,depreciation and provisions 11,805 5,186 25,726 30,826 48,252Income tax (307) (109) 452 (667) (8,605)Employee profit-sharingIncome after taxes, employee profit-sharing,depreciation and provisions 19,828 4,773 26,156 35,323 57,189Distributed profit 8,960 10,047 10,000 8,960Earnings per share (in euros)Earnings after taxes, employee profit-sharing,but before depreciation and provisions 1.51 0.66 3.16 3.94 7.11Earnings after taxes, employee profit-sharing,depreciation and provisions 2.48 0.60 3.27 4.42 7.15Dividend per share 1.12 1.25 1.25 1.12 1.25 (1)

(1) Proposed dividend submitted to the shareholders’ meeting.

II - Risk management

In line with the objectives defined by the group’s share-holders of long-term growth, independence and the personal development of employees, Bonduelle adopts aprudent and responsible approach in risk management.

1. Financial risk

The group has put into place an organization to manageall financial, cash flow, exchange rate and counterparty riskscentrally. The finance department has assigned this responsibility to the cash management department andprovided it with all tools and expertise to operate in diffe-rent financial markets with optimal efficiency and security.The organization and procedures applied are reviewed bythe internal audit department on a regular basis. Duringthe financial business reviews, the group managementapproves the orientations adopted within the frameworkof risk management it has previously authorized.

In a rapidly changing global environment, characterized by volatile markets and changing financial techniques, the group cash management department is responsiblefor:

- ensuring optimal and sufficient funding for the develop-ment of all the group’s operating activities and growth,

- identifying, evaluating and covering all financial risks inclose collaboration with line management.

The objective is to minimize the impact of fluctuations infinancial markets on the income statement at the lowestpossible cost in order to reduce capital resources allocatedto managing financial risks.

The group prohibits acquiring speculative positions.

A. Liquidity risk

The objective of the group’s finance department is to maintain sufficient liquidity at all times by the effectivemanagement of group cash resources to ensure securefinancing in respect to their duration and legal conditions.To guarantee optimal flexibility of group financing, it also implements confirmed credit lines (see note 22 to the consolidated financial statements of 30 June 2006).

B. Market risks

a. Exchange rate risks

• Analysis of exchange rate risk

The group publishes its consolidated financial statementsin euros. In fiscal 2005/2006, 87% of revenue and 58% ofoperating income was in euros.

While the proportion of assets, liabilities, sales, and earnings expressed in other currencies (primarily the Polishzloty, the Hungarian forint and the US dollar) has been regu-larly evolving, their weight in the consolidated balancesheet is not yet significant. The group is affected by thefluctuation of these currencies in relation to the euro ontranslation in the consolidated financial statements.However, this currency effect, for example when the rise ofthe euro reduces the contribution to earnings of consoli-dated subsidiaries that prepare their financial statementsin these currencies, remains limited.

Sales and expenses of subsidiaries are generally expressedin their local currency with the exception of imports, exportsand financial transactions benefiting from foreign-exchangehedging: as a result, Bonduelle considers that its local expo-sure to foreign currency fluctuations has been and willremain limited.

However, the group’s strategy of international growth maybe expected to increase the impact of international ope-rations on sales, operating profit and consolidated netincome.

• Foreign exchange risk management strategy

The objective is to cover on the basis of an annual budgetsales-related risks of subsidiaries in a currency other thantheir operating currency and risks affecting the net assetsof certain subsidiaries in countries whose operating currency is not the euro.

The group uses financial instruments available in over-the-counter markets solely for the purpose of hedging financialrisks associated with its industrial and commercial activi-ties. Hedging transactions are undertaken on the basis ofobjectives and procedures defined by Bonduelle GroupManagement and are centralized at the level of group cashmanagement.

The group’s policy with regard to exchange rate fluctua-tions consists in periodically calculating its net foreign-exchange exposure and using derivatives to reduce thisexposure.

The group uses primarily forward exchange contracts, forward exchange swaps and options concluded withreliable counterparties. The face values of financial instru-ments held as at 30 June 2006 are presented in note 20 tothe consolidated financial statements of 30 June 2006.

b. Interest-rate risks

The interest rate management policy is coordinated andmanaged centrally to protect future cash flows and reduceinterest expense volatility. The group uses various financialinstruments available on the market and notably interest


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rate options and swaps. Detailed information on the port-folio of financial instruments is presented in note 20 of theconsolidated financial statements of 30 June 2006.

2. Equity risks

Every year, the company buys and sells its own shares, in com-pliance with the provisions of the prospectus issued in connec-tion with the share buyback program as voted by shareholders.

The objectives of this program in ascending order of priority are to:

- ensure an orderly market in the company shares,

- grant stock purchase options to employees,

- acquire shares for subsequent use in exchange or paymentfor acquisitions,

- assure the availability of securities conferring rights to theallotment of company shares,

- proceed with the possible cancellation of shares acquired.

Within this framework, as at 30 June 2006, the companyheld 159,991 treasury shares of which 134,099 shares weredestined for stock options exercisable in part starting in2006. Voting rights attached to these shares are suspendedand they are recorded as marketable securities.

The company moreover does not carry equity risks in thatit does not carry out any cash transactions involving invest-ments in mutual funds invested in equities or other financialinstruments with an equity component.

3. Legal risks

A. Compliance

In the conduct of its business and relations with its partners,Bonduelle complies with all applicable laws and regulations.

As a food industry company, Bonduelle is subject to nationaland international regulations concerning hygiene, qualitycontrol, food products and packaging.

Legal risks exist in connection with the manufacture anddistribution of food products.

Bonduelle considers that the measures implemented tomeet regulatory requirements and prevent and managethese risks are sufficient.

B. Trademarks and intellectual property

Rigorous measures are deployed to protect Bonduelle trademarks. Internal legal teams assisted by industrial property consultants monitor group brands, and notably

those of Bonduelle, Cassegrain and Frudesa, register andrenew trademarks registrations and take action against thirdparties in the event of trademark infringements.

C. Other legal risks

Bonduelle’s sales and industrial activities are not subject tosignificant dependencies on customers or suppliers, and itpossesses assets necessary to assure its independence.

4. Industrial and environmental risks

Bonduelle’s activities are subject to numerous regulationsconcerning water, the air, soil and environmental waste.

The goal of the group’s risk management policy is to:

- guarantee the quality and safety of its food products byeffectively managing agricultural and industrial processes,

- reduce the adverse consequences of its activities on theenvironment and people as much as possible.

A. Agriculture

Agriculture provides the major share of raw materials requiredto produce the group’s products. To guarantee the qualityof its products and protect the environment, Bonduelle hasadopted a supply charter that establishes criteria for selec-ting agricultural land and crop management that farmersworking with the group must apply.

Based on the most demanding European standards andnotably on those originating from French integrated farming practices (“agriculture raisonnée”), 100% of thePolish, Portuguese, Italian, and French farmers accountingfor three quarters of our supplies have signed this charter.The remaining 25% supplies are subject to special contractspecifications.

B. Product quality and security

Food safety is a key priority of Bonduelle’s quality policy.To this purpose, it has deployed HACCP procedures(Hazard Analysis and Critical Control Point) to control iden-tified risks at various stages of preparation of its products.These procedures implemented throughout the groupassure the traceability of its products from the plantingphase to our customers’ initial points of delivery. Risk ana-lysis procedures and controls at critical points are carriedout in all production sites.

Out of the group’s 25 industrial sites, 16 have been ISO 9001 certified and 14 BRC and/or IFS certified.

In 2005/2006, many controls were carried out at the siteson the basis of different systems by both internal and external auditors.


C. Natural resources

Ongoing efforts are devoted to the optimisation of natural resources and environmental protection focusingon the following areas:

- effective water and energy consumption,

- improvement of water treatment equipment,

- the pursuit of the industrial waste and vegetable mattermanagement policy.

To guarantee perfect restitution of water to the natural environment, Bonduelle has 21 treatment plants:

- 7 biological waste treatment plants;

- 2 land application systems;

- 12 pre-treatment systems before discharge into externalsystems.

Actions conducted at the different industrial sites have reducedconsumption of energy generating pollution (low sulphur fuel)in favour of cleaner energies (electricity, natural gas).

5. Management of non-financial risks

Three strategic objectives have been set by the shareholderwhose stability contributes to a long-term approach: sustainability and continuity, independence and the personal development of employees.

The objective in managing non-financial risks is to protectthe group’s strategic assets. Capital spending in favour of industrial assets, the development of our processes,

recruiting and training our workforce take into account this objective of safeguarding our industrial, financial andhuman resources.

The aim of this approach is to limit industrial risks or otherrisks such as those mentioned above to which the group isnaturally exposed.

To this purpose, the group insurance strategy’s approachis twofold:

• Risk assessment

The insurance department, part of the group financedepartment, is responsible for identifying and assessing allrisks, working closely with operating entities.

The scope and amounts of insurance coverage are set atthe group level according to objectives defined byBonduelle Group Management.

The insurance programs are negotiated by the group insurance department and placed with major financiallysound insurance companies.

• Risk transfer

For major risks of potentially significant strategic and financialimpact, according to the possibilities of the insurance and reinsurance markets, global programs have been imple-mented. These concern primarily “property and businessinterruption”, “civil liability”, “contamination and brandprotection” coverage.

Other insurance programs covering less significant risksalso exist.


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III - Corporate social responsibility and sustainable development

Areas Indicators Scope

Agricultural production Group excludingRussia andWanzleben

Biodiversity Nearly 500 varieties of vegetables distributed through different product lines.99 collections of varieties made it possible to observe 555 varieties in 2005/2006

Agricultural services 76 field managersSupply charter 100% farmers have signed itSoil analysis 82% of nitrogen fertilization has been calculated on the basis of the residual methodAgricultural intensity 16.4 hectares of vegetables per producer

Natural resources Group excludingRussia and Wanzleben

Water consumption 12,973,486 m3 or 18.72 m3 per tonne of processed productsEnergy consumption Electricity: 283 GWh

Natural gas: 448 GWhFuel (low sulphur content) : 9 tonnesPropane : 660 tonnesFuel oil: 437 tonnes

Ordinary waste output 26,874 tonnes or 38.78 kg per tonne of processed productsRecovery:Landfill sites: 34.8%Energy recovery: 6.6%Recycling: 58.6%

Special waste output 151 tonnes or 0.22 kg per tonne of processed productsVegetable matter output 223,628 tonnes or 323 kg per tonne of processed products

Recovery:Land applications: 4%Animal feed: 52%Subcontracting: 38%Other: 6%

Biosolids 53,932 m3 or 4,693 tonnes of dry matterPackaging 96,982 tonnes

Breakdown by type of material:Glass jars: 9%Metal cans: 57%Plastic films: 7%Boxes: 24%Plastic trays: 2.5%Lids: 0.5%

Budgeted environmental Water: €2,407,557 impact expenditures Waste, vegetable compounds and biosolids: €343,189

Air/Energy: €2,769,442


Areas Indicators Scope

Quality/Nutrition Group excludingRussia andWanzleben

Workforce devoted to quality control 383 employees (full-time equivalent) of whom:7% in quality assurance departments of subsidiaries and in the group purchasing department31% in the quality assurance departments of production sites42% devoted to quality controls on production lines20% for acceptance verifications

Certified sites 16 ISO 9001 certified14 BRC and/or IFS certified6 produce certified “organic” products

Consumer services 1 customer service department set up in each country

People and safety GroupWorkforce 5,686 permanent employees

7,047 permanent, fixed-term and seasonal contracts as full-time equivalentsSeniority:0 to 3 years: 8153 to 9 years: 1,791+ 9 years: 3,080Turnover:Managers: 7.31%Clerical staff: 11.84%Workers: 10.03%Recruitment by contract category:Permanent: 269Fixed-term: 768Seasonal workers: 5,312

Formation 1.78% of total payrollSafety conditions Accident frequency rate: 30.39

Accident seriousness rate: 0.93Departures and transfers Departures: 667 persons

Resignations: 151 personsDismissals: 320 personsTransfers to other establishments: 97 persons

Industrial restructuring Workforce concerned by industrial restructuring measures who benefited from redeployment aid: 234

Organization of working time and overtime Hours worked: 12,217,989Absenteeism rate: 6%

Remuneration and advancement Total remuneration (permanent + fixed term + seasonal): €169,369,303 (excluding charges)


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IV – Capital stock

The procedures according to which the articles of associationprovide for modifications of the capital and voting rightscomply with applicable legal provisions.

The articles of association contain no override clauses thereto.

Subscribed capital

The capital stock is €56 million divided into 8 million fullypaid-up shares with a par value of €7 per share all of thesame class.

Authorized but non-issued share capital

The Combined General Meeting of 9 June 2005 grants theManagement Board the following authorizations:

• The General Meeting, after reviewing the ManagementBoard report and the special report of the StatutoryAuditors in accordance with the provisions of the FrenchCommercial Code and notably article L. 225-129-2:

1. Authorizes the Management Board to increase the capital,in one or more tranches, in amounts and at such timesit chooses:

a. through the issue, in euros, foreign currencies or unitscomposed of a basket of currencies, of ordinary sharesand/or securities conferring present or future rights,at any time or on a fixed date, to ordinary shares ofthe company or, in accordance with article L. 228-93of the French Commercial Code, any company inwhich it directly or indirectly owns more than half of thecapital, whether by subscription for shares, conversion,exchange, reimbursement, presentation of a warrant orany other means;

b. and/or by the capitalization of paid-in capital, reservesor profit or other means in the form of bonus issuesor increasing the nominal value of existing shares;

2. Grants this authorization for twenty-six months as fromthe date of this Meeting.

3. Decides to set, as follows, the total aggregate amountof shares that may be issued under this authorizationgranted to the general partners by Management Board:

The aggregate value of shares that may be issued underthis authorization may not exceed €17.5 million.

This limit includes the nominal value of additional shares that may be issued, in compliance with the law, to safeguard the interests of holders of securitiesconferring rights to the capital.

Furthermore, the aggregate nominal amount of sharesissued, directly or not by virtue of the following resolu-tion shall be subject to this limit.

4. If the Management Board decides to use this authorizationin connection with the issues described above in 1. a.:

a. decides that the issue or issues shall be reserved inpriority to shareholders who may subscribe for shareson the basis of exact rights (à titre irréductible),

b. decides that if subscription for new shares on the basisof exact rights, and as the case may be, for excessshares (à titre irréductible), should fail to account forthe entire issue, the Management Board may haverecourse to the options provided by law involvingnotably offering to the public all of part of the sharesissued but not subscribed,

c. concerning the capitalization of additional paid-in capital,reserves, profit or other items, resolves that whenapplicable, rights corresponding to fractional amountswill not be negotiable and the corresponding shareswill be sold with any amounts resulting from the saleallocated to holders of these rights within the periodprovided for by law.

5. Decides that the Management Board shall be vestedwith, within the limits fixed above, all powers necessaryto determine the conditions of the issue or issues, recordthe resulting increase in capital, amend the articles ofassociation in consequence, charge at its sole initiative,the expenses of capital increases to the correspondingpremiums and deduct from such premiums amountsnecessary to increase the legal reserve up to one tenththe new amount of authorized capital after each increase,and in general undertake everything that is required.

6. Duly notes that this authorization cancels and replacesthe previous authorization with the same purpose.

• The General Meeting, after reviewing the report of theManagement Board and the special report of theStatutory Auditors and in compliance with the provisionsof the French Commercial Code and notably article L. 225-129-2:

1. Authorizes the Management Board to increase the capital, in one or more tranches, in amounts and at such times it chooses, on the French market and/or oninternational financial markets through public offeringsby issuing in euros, foreign currencies or units composedof a basket of currencies, ordinary shares and/or securities conferring present or future rights, at any timeor on a fixed date, to ordinary shares of the companywhether by subscription for shares, conversion,exchange, reimbursement, presentation of a warrant orany other means; it being specified that the securitiesmay be issued in payment for shares contributed to the company in connection with public exchange offersfor shares in accordance with the provisions of article L. 225-148 of the French Commercial Code.


In compliance with article L. 228-93 of the French Commercial Code, the securities to be issued may conferrights to ordinary shares of any company in which it directly or indirectly owns more than half of the capital.


3. Decides to fix, as follows, the limits of issues authorizedby virtue of this authorization granted to theManagement Board:

The total aggregate amount of ordinary shares that maybe issued by virtue of this authorization may not exceed€17.5 million.

Furthermore, shares that may be issued by virtue of the preceding resolution shall also be subject to thismaximum amount.

4. Decides to cancel the pre-emptive subscription right of existing shareholders to the shares covered by thisresolution, while granting the Management Board theauthority to confer on shareholders, preferential rightsas provided by law.

5. Decides that the amount reverting or which shall revertto the company for each of the ordinary shares issuedby virtue of this authorization, after taking into account,in the case of the issue of straight stock warrants, of theprice of said warrants, will at least equal the minimumprice provided for by applicable laws and regulations atthe time the Management Board implemented thisauthorization.

6. Decides, if shares are issued in payment for shares contributed in connection with a public exchange offer,that the Management Board shall, within the limits fixedabove, be vested in all powers necessary to determinethe list of shares contributed within the framework of theexchange offer, set the conditions of the issue, as wellas, when necessary, the amount of cash to be paid forthe difference, and determine the terms and conditionsof the issue.

7. Decides that the Management Board shall be vestedwith, within the limits fixed above, all powers necessaryto determine the conditions of the issue or issues, recordthe resulting increases in capital, amend the articles ofassociation in consequence, charge when necessary, theexpenses of capital increases to the corresponding premium and deduct from such premium amountsnecessary to increase the legal reserve up to one tenththe new amount of authorized capital after each increase,and in general undertake everything that is required.

8. Duly notes that this authorization cancels and replacesthe previous authorization with the same purpose.

• For each of the issues decided under resolutions 7 and 8,the number of shares to be issued may be increased inaccordance with the conditions provided for by article L. 225-135-1 of the French Commercial Code and withinthe limits authorized by the General Meeting, when theManagement Board determines that there is excessdemand.

• The General Meeting, after reviewing the report of the Management Board and in compliance with article L. 225-147 of the French Commercial Code:

1. Authorizes the Management Board, pursuant to thereport of the expert appraiser (commissaire aux apports),to increase the capital in payment for the contributionin kind to the company consisting of equity shares or securities conferring rights in the share capital when theprovisions of article L. 225-148 of the French commercialcode are not applicable.


3. Decides that the total aggregate amount of ordinaryshares that may be issued under this authorization shallnot exceed 10% of the share capital.

This limit shall be independent of the limits imposed bythe other resolutions of the General Meeting.

4. Decides that the Management Board shall be vestedwith, within the limits fixed above, all powers neces-sary to determine the conditions of the issue or issues,record the resulting increase in capital, amend thearticles of association in consequence, charge at its sole initiative the expenses of capital increases to the corresponding premiums and deduct from suchpremiums amounts necessary to increase the legalreserve up to one tenth the new amount of authorizedcapital after each increase, and in general undertakeeverything that is required.

• The General Meeting, after reviewing the report of theManagement Board and the special report of the StatutoryAuditors, in accordance with the provisions of articlesL. 225-129-6 and L. 225-138-1 of the French CommercialCode and L. 443-5 of the French labour code:

1. Authorizes the Management Board, if it considersappropriate, at its sole initiative, to increase the sharecapital in one or more tranches by issuing ordinaryshares for cash and, when applicable, through bonusissues of ordinary shares or other securities conferringrights to the share capital reserved to employees (and managers) of the company (and affiliates compa-nies as defined by article L. 225-180 of the FrenchCommercial Code) participating in an employee stockownership plan.


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2. Cancels in favour of these persons the pre-emptive rightto subscribe for shares that may be issued by virtue ofthis authorization.


4. Limits the aggregate amount of capital increases under thisauthorization to 3% of the share capital on the date theManagement Board decide to proceed with this capitalincrease.

5. Decides that the price of shares to be issued, by virtueof 1. of this authorization, may not be less than 20% (or30% when the vesting period provided for by the planin accordance with article L. 443-6 is greater than or equalto ten years) of the average opening price of the shareof the 20 trading days preceding the decision of theManagement Board concerning the capital increase andthe corresponding issue nor greater than this average.

6. Grants all powers to the Management Board to implementthis authorization, to perform all measures and neces-sary formalities.

Stock options to subscribe for or purchase shares

The Combined General Meeting of 9 June 2005 grants theManagement Board the following authorization:

The General Meeting, after reviewing the report of theManagement Board and the special report of the StatutoryAuditors:

• Authorizes the Management Board within the frame-work of articles L. 225-177 to L. 225-185 of the FrenchCommercial Code, to grant in one or more tranches infavour of the beneficiaries indicated below, stock purchaseoptions to acquire shares of the company repurchasedthrough share buyback programs as provided by law.

• Grants this authorization for thirty-eight months as fromthe date of this General Meeting.

• Decides that the beneficiaries of these options mayinclude employees (or selected employees) or certaincategories of personnel, and corporate officers as defined by law, both of the company or joint ventures in which it has interests in accordance with article L. 225-180 of the French Commercial Code.

• Decides that the total number of options outstandinggranted by the Management Board under this authori-zation, and not yet exercised, may not confer rights to acquire shares corresponding to more than 3% of the share capital.

• Decides that the purchase price of the shares for bene-ficiaries shall be set on the date the options are granted

by the Management Board and may not be less than 95%the average opening price of the 20 trading sessions preceding the date the option is granted.

• Fixes an option period of five years from the date of theirallotment including a vesting period of forty-eight monthsfrom the same date during which the options may not beexercised,

• Grants all powers to the Management Board, within thelimits defined above, to fix the other conditions and proce-dures concerning the options and their exercise, notably to:

- determine the conditions according to which the optionsmay be granted, which may include resale restrictionsfor all or part of the shares that may not exceed threeyears from the option exercise date,

- determine the list or categories of beneficiaries ofoptions as provided for above and the quantity of sharesto which they will confer rights,

- determine the exercise period or periods for the optionsgranted,

- provide for the possibility of temporarily suspendingthe exercise period for a maximum of three months inthe event of financial transactions involving the exerciseof rights attached to the shares,

- determine the conditions according to which the priceand number of the shares may be adjusted in accor-dance with the different assumptions provided for under174-8 to 174-16 of decree 67-236 of 23 March 1967.

Bonus shares

The Combined General Meeting of 9 June 2005 grantedthe Management Board the following authorization:

The Extraordinary General Meeting, after reviewing thereport of the Management Board and the special report ofthe Statutory Auditors, authorizes the Management Board,to carry out, in one or more tranches, in accordance witharticles L. 225-197-1 and L. 225-197-2 of the FrenchCommercial Code, bonus issues of existing ordinary sharesof the company or shares to be issued in favour of:

• members of personnel of the company or companiesdirectly or indirectly affiliated as defined by article L. 225-197-2 of the French Commercial Code or certaincategories of this personnel,

• and/or corporate officers meeting the conditions definedby article L. 225-197-1 of the French Commercial Code.

The total number of bonus shares may not exceed 3% ofthe share capital existing on the day the first bonus issueis decided by the Management Board.


The allotment of shares to beneficiaries will be definitivelyacquired after a minimum period of two years. Further-more, the beneficiaries must hold said shares for at leasttwo years.

The Management Board has the option of increasing theduration of these two periods.

It is furthermore granted full authority to:

• determine conditions, and when applicable, the criteriafor allotting bonus shares,

• determine the identity of beneficiaries and the numberof shares granted to each,

• determine the impact on the rights of beneficiaries of tran-sactions affecting the share capital or that may affect thevalue of shares granted carried out during the acquisitionand holding periods and in consequence, modify oradjust, if necessary, the number of bonus shares issuedto safeguard the rights of beneficiaries,

• and when applicable:

- determine the existence of sufficient reserves and foreach bonus issue transfer from a special restrictedreserve amounts necessary for the payment of the newshares to be allotted,

- decide, in time, to increase the capital through the capi-talization of reserves, additional paid-in capital or pro-fit corresponding to the issue of bonus shares, with theamount of this increase or increases subject to the maxi-mum authorized amount under resolution eight,

- acquire shares within the framework of a share buybackprogram to be allocated to the bonus issue,

- undertake all measures to ensure that beneficiaries complywith the obligation to retain their shares,

- and, in general, perform everything that this authorizationrequires within the framework of existing laws and regulations.

This authorization constitutes the express waiver by existing shareholders to their rights to the percentage ofreserves, additional paid-in capital and profit to be capitalized for the payment of the bonus shares.

This authorization is granted for thirty-eight months as fromthe date of the General Meeting.

Cancellation of shares

The Combined General Meeting of 9 June 2005 grantedthe following authorization to the Management Board:

The General Meeting, after reviewing the reports of theManaging Partner and the Statutory Auditors:

1. authorizes the Management Board, at its sole choice,through one or more transactions within the limit

of 10% of the share capital or 800,000 shares, to cancel shares of the company that it holds or may hold pursuant to shares repurchased within the frame-work of article L. 225-209 of the French CommercialCode and reduce the share capital by the correspon-ding amount in accordance with applicable laws andregulations,

2. grants this authorization for twenty-four months as fromthe date of the General Meeting i.e. until 9 June 2007,

3. grants all powers to the Management Board to take theactions necessary to cancel the shares and reduce theshare capital and modify the articles of association andcarry out all necessary formalities.

Share repurchase program

The Combined General Meeting of 9 June 2005 grantedthe Management Board the following authorization:

The General Meeting, after reviewing the report of theManagement Board and the memorandum approved bythe French financial market authority (AMF), authorizes theManagement Board for eighteen months in compliancewith articles L. 225-209 et seq. of the French CommercialCode, to repurchase, through one or more transactions attimes of its choosing, shares of the company no to exceed10% of the current capital stock or 800,000 shares.

This authorization cancels the previous authorization granted to the Management Board by the Ordinary GeneralMeeting of 1 December 2004.

Shares may be repurchased to:

- ensure the orderly trading of the Bonduelle shares by an investment services provider within the framework of a liquidity agreement in compliance with the rules ofconduct of the French association of investment firms(AFEI) as recognized by the AMF,

- keep acquired shares for subsequent use in exchange orpayment for possible acquisitions,

- for the purpose of stock option plans and other measuresin favour of employees and/or officers of the group according to the conditions and procedures provided for by law, and notably in connection with employee profit-sharing schemes, stock ownership plans and bonus issues,

- for the purpose of securities conferring rights to shares of the company within the framework of existingregulations,

- cancel shares acquired, subject to the authorization to begranted by this Meeting in resolution fifteen falling ontothe scope of the Extraordinary General Meetings.


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Shares may be repurchased by all means including throughblock trades at time of the Management Board’s choosing,during public offerings in accordance with security marketregulations. However, the company does not intend to haverecourse to derivatives.

The maximum purchase price must not exceed €100 per share. In the event of capital transactions includingnotably stock splits, reverse splits or bonus issues, this amount will be adjusted in the same proportions (whereby the adjustment multiplier equals the ratio between the number of shares before and after the transaction).

This share buyback authorization is limited to €80 million.

The General Meeting grants all powers to the ManagementBoard to carry out the transactions, determine the termsand conditions, conclude all necessary agreements andperform all legal formalities.

V - Shareholders’ agreements

Escrow agreement

Bonduelle is a French limited partnership with shares(société en commandite par actions – SCA).

The general partner is a French simplified joint stock company “Pierre et Benoît Bonduelle SAS” whose shares are directly held by 15 members of the Bonduellefamily.

This latter company, represented by its ChairmanChristophe Bonduelle, is the managing partner ofBonduelle SCA.

In compliance with article 14.3 of the articles of asso-ciation of Bonduelle SCA, at least 1,520,000 strippedshare rights or 760,000 Bonduelle shares (usufruct, bareownership rights or both) were deposited on escrow onbehalf of “Pierre et Benoît Bonduelle SAS” untilDecember 2007. Shares held in escrow represent 9.5% of the share capital.

Lock-up agreements

In addition to escrow commitments, the first lock-up agree-ment was signed on 26 May 1998 by 101 family shareholders“with the purpose of creating a stable and long-lasting coreshareholding”. Under this agreement, the signatoriesundertook for ten years to hold a portion of their shares.As of 30 June 2006, shares concerned by this agreementrepresented 23.4% of the share capital.

This agreement was concluded for ten years and partiesundertook to jointly reassess the situation two years beforeits expiration.

The second agreement was concluded between 137 familyshareholders with the purpose of stabilizing the volume ofshares traded on the market, ensuring continuity in thecompany’s management and maintaining the undertakingto cooperate in a partnership and oversee its administration(affectio societatis) by the family shareholding group.

This agreement was signed on 27 March 1998 for five yearsand has been renewed annually, whereby each party to theagreement may withdraw from the agreement one yearbefore each renewal date.

In its meeting of 1 July 1998, the Conseil des MarchésFinanciers (CMF), considered that under the provisions of theagreement when considered together or separately, the signa-tories were acting in concert (action de concert) and subjectto specific disclosure obligations under French law. As of 30June 2006, these shareholders represented 47.33% of thecapital and 61.36% of the 12,209,256 existing voting rights.

Other shareholder agreements

Bonduelle informs its shareholders that, pursuant to theadoption of the economic initiative law (or “Dutreil law”)in 2003, Bonduelle SCA concluded a lock-up agreementfor the total amount of its shareholdings in Bonduelle SAfor six years. This agreement was renewed on December2004 and will be renewed again on December 2006. In compliance with the law, Bonduelle SCA shareholders mayadhere to this agreement and benefit from its provisions.



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VI - Changes in shareholdings

(in %) 30/06/04 30/06/05 30/06/06

General partner 24.0 24.0 24.3 Other Bonduelle family shareholders 28.1 28.9 27.5 Employees 3.3 3.0 2.5 Treasury shares 1.9 1.8 2.0Free float 42.7 42.3 43.7

TOTAL 100.0 100.0 100.0

VII - Share capital and voting rights as at 30 June 2005

Number of shares % Voting rights %

Baie d’Audierne SA(1) 1,788,976 22.3 3,577,952 29.3 Pierre et Benoît Bonduelle SAS 138,646 1.7 207,813 1.7 General partner 1,927,622 24.0 3,785,765 31.0 Other Bonduelle family shareholders 2,311,348 28.9 4,580,144 37.6 Employees 234,378 3.0 435,634 3.6 Treasury shares 139,169 1.8 - -Free float 3,387,483 42.3 3,387,483 27.8

TOTAL 8,000,000 100.0 12,189,026 100.0

VIII - Share capital and voting rights as at 30 June 2006

Number of shares % Voting rights %

Baie d’Audierne SA(1) 1,788,976 22.4 3,577,952 29.3 Pierre et Benoît Bonduelle SAS 155,493 1.9 273,660 2.2 General partner 1,944,469 24.3 3,851,612 31.5 Other Bonduelle family shareholders 2,199,983 27.5 4,153,685 34.0 Employees 202,693 2.5 398,551 3.3 Treasury shares 159,991 2.0 - -Free float 3,492,864 43.7 3,805,408 31.2

TOTAL 8,000,000 100.0 12,209,864 100.0

(1) SA Baie d’Audierne is 53.3% owned by the general partner, SAS Pierre et Benoît Bonduelle and its sole purpose is as a holding company for Bonduelle SCA shares.

IX – Dividends

Dividends per share paid for the last three fiscal years are presented below:

(in euros) 2002/2003 2003/2004 2004/2005

Dividend distributed 1.25 1.25 1.12Tax credit 0.62 - -Total income 1.87 1.25 1.12Income qualifying for a tax allowance 1.25 1.12Dividend payout (in thousands of euros) 10,000 10,000 8,960

X - Appointments of corporate officers

Christophe Bonduelle Chairman of the Management Board (Conseil de Gérance) of P & B Bonduelle SASDirector of Baie d’Audierne SAChairman of the Board of Directors of Bonduelle SAManaging Partner of BFP GmbHManaging Director of Bonduelle BelgiumChairman of Bonduelle EspañaManaging Director of Bonduelle Food Service ItaliaChairman of Bonduelle Fresco ItaliaDirector of Bonduelle Frais FranceManaging Partner of Bonduelle FrischeDirector of Bonduelle IbericaChairman of Bonduelle ItaliaManaging Director of Bonduelle LimitedManaging Director of Bonduelle Nederland BVChairman of Bonduelle NordicChairman of the Supervisory Board of Bonduelle Polska Director of Bonduelle PortugalDirector of FrudesaMember of the Board of Directors of Aliments Carrière Inc.Director and Chairman of SFB Inc.Director and Chairman of Québec Inc.Managing Partner of ChanvoleauManaging Partner of the Amirauté real estate partnership

Damien Bonduelle Managing Partner of Vendea SCEAManaging Partner of Vendea SARLChairman of Picardie RécoltesChairman of Les Rives de l’Omignon SAS

Daniel Bracquart Vice-Chairman of the Supervisory Board of Bonduelle SCADirector of Roquette FrèresDirector of Bongrain SAManaging Partner of SARL HabediaDirector of Bonduelle Iberica

Olivier Cavrois Managing Partner of La HoussaieAndré Crespel Chairman of the Supervisory Board of Bonduelle SCAStanislas Dalle Chairman of SAS Interpack

Managing Partner of AxèneChairman of SAS SoparManaging Partner of SCI Stadim

Francis Danjou Member of the Supervisory Board of Bonduelle SCAJean Guéguen Member of the Supervisory Board of Bonduelle SCAYves Tack Representative of Colam

Co-Manager of DumacoManaging Partner of SCI Le Moulin Le BlancDirector of Financière Devianne SASDirector of Devianne SADirector of Disport SADirector of Mag Vet SADirector of Interhabillement SADirector of Mod’Est SADirector of Epivosges SA

Information not provided herein is included in the full version of the original French financial report and annual report filedwith the court registrar.


The resolutions submitted to shareholders fall under theauthority of the combined shareholders’ meeting.

We request that you approve the annual financial statements of 30 June 2006 which show a profit of €57,188,705.64 and the following appropriation of income:

• Profit of the period €57,188,705.64• Retained earnings brought forward €48,789,884.78Distributable Profit €105,978,590.42Appropriation of earnings to the general partner €571,887Distribution to shareholders €10,000,000Retained Earnings €95,406,703.42

Distribution of a dividend is proposed for fiscal 2005/2006,of €1.25 for distribution in January 2007.

Treasury shares held by the company on the payment date willnot carry dividend rights and the amounts corresponding todividends for the shares will be allocated to retained earnings.

Dividends per share paid for the last three fiscal years, and the proposed dividend for 2005/2006 are presentedbelow:

2002/ 2003/ 2004/ 2005/2006(in euros) 2003 2004 2005 Proposal

Dividend distributed 1.25 1.25 1.12 1.25Tax credit 0.62 - - -Total income 1.87 1.25 1.12 1.25Income qualifyingfor a tax allowance 1.25 1.12 1.25Dividend payout(in thousands of euros) 10,000 10,000 8,960 10,000

The group consolidated financial statements showing a net income of €39,222,697 are also submitted to yourapproval.

In addition, we propose that €30,000 be allocated forattendance fees for Supervisory Board members.

As every year, we submit a proposal for your authorizationfor a share repurchase program concerning a maximum of10% of the share capital for 18 months. The maximum purchase price per share under this proposal is €110.

The appointments of Supervisory Board members, DanielBracquart, André Crespel, Stanislas Dalle and JeanGuéguen are reaching their term. In order to comply withthe rule providing for the renewal every three years of one third of the members, we consequently propose therenewal of:

• The appointments of Daniel Bracquart and André Crespelfor three years ending at the close of the General Meetingcalled to approve the financial statements for the fiscalyear ending 30 June 2009;

• The appointments of Stanislas Dalle and Jean Guéguenfor three years ending at the close of the General Meetingcalled to approve the financial statements for the fiscalyear ending 30 June 2008.

In addition, with the appointment of the Supervisory Boardmember, Francis Danjou reaching its term, we propose thatyou replace and appoint Isabelle Danjou as a memberof the Supervisory Board for three years ending at the closeof the General Meeting called to approve the financialstatements for the fiscal year ending 30 June 2009.

The appointments of the Statutory Auditors and theAlternate Auditors are also reaching their term. We conse-quently propose that you renew the appointments of the Statutory Auditors Mazars et Guérard, 39, rue deWattignies - 75012 Paris, and the Alternate Auditor Denis Grison, Immeuble Exaltis - 61, rue Henri Regnault -92075 La Défense, and appoint as Statutory Auditor Deloitte& Associés, 67, rue de Luxembourg – 59777 Euralille, and as Alternate Auditors BEAS – 7/9, Villa Houssay – 92200 Neuilly-sur-Seine.

We propose that you renew the authorizations granted to theManaging Partner by the General Meeting of 9 June 2005that will expire in fiscal 2006-2007 and to this purpose vest theManaging Partner with the authority to:

• increase in the share capital, in one or more tranches,through the issuance of ordinary shares for cash and,when applicable, bonus issues of ordinary shares or othersecurities conferring rights to the company’s share capital,reserved to employees and managers of the company(and affiliated companies as understood under article L. 225-180 of the French Commercial Code) participatingin an employee stock ownership plan. This authorizationwould be granted for 26 months from the date of theGeneral Meeting and limited to 3% of the share capital onthe date the Managing Partner decides to proceed withthis capital increase;


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Report on proposed shareholder resolutions

• cancel shares of the company on one or more occasions,subject to a limit of 10% of the share capital, that thecompany holds or may hold pursuant to shares repur-chased within the framework of article L. 225-209 of theFrench Commercial Code. This authorization shall begranted for 24 months from the date of the GeneralMeeting;

• to increase the capital, in one or more tranches, inamounts and at such times it chooses:

a. by issuing, in euros, foreign currencies or units com-posed of a basket of currencies, ordinary shares and/orsecurities conferring present or future rights, at anytime or on a fixed date, to ordinary shares of the company or, in accordance with article L. 228-93 of theFrench Commercial Code, any company in which itdirectly or indirectly owns more than half of the capital,whether by subscription for shares, conversion,exchange, reimbursement, presentation of a warrantor any other means;

b. and/or by the capitalization of paid-in capital, reservesor profit or other means in the form of bonus issues orincreasing the nominal value of existing shares.

This authorization shall be granted for 26 months fromthe date of the General Meeting;

• to increase the capital, in one or more tranches, in amountsand at such times it chooses, on the French market and/oron international financial markets through public offerings by issuing in euros, foreign currencies or units

composed of a basket of currencies, ordinary sharesand/or securities conferring present or future rights, atany time or on a fixed date, to ordinary shares of the company whether by subscription for shares, conversion,exchange, reimbursement, presentation of a warrant orany other means; it being specified that the securitiesmay be issued in payment for shares contributed to thecompany in connection with public exchange offers forshares in accordance with the provisions of article L. 225-148 of the French Commercial Code. This authorizationshall be granted for 26 months from the date of theGeneral Meeting;

• to increase the capital in payment for the contribution inkind to the company consisting of equity shares or securitiesconferring rights in the share capital when the provisionsof article L. 225-148 of the French Commercial Code arenot applicable. This authorization shall be granted for26 months from the date of the General Meeting;

Finally, we propose that the articles of association be amen-ded to comply with the new provisions and laws. Theseamendments concern notably:

- articles 6 and 7 concerning the share capital;

- article 9 concerning the form of the shares;

- article 11 concerning notifications of the breach of ownershipthresholds;

- article 14 on the liability and powers of the general partner;

- articles 19 and 20 on the possibility of recourse to video-conferencing.


We are pleased report on the performance of our missionconferred upon us by the shareholders.

We were regularly informed by the Management Board onthe activities of Bonduelle Group and Bonduelle SA throughour board meetings.

The Management Board provided us with all documentsnecessary to ensure compliance with its obligations andthe controls of the parent company and consolidated finan-cial statements. It provided us with all information on theaccounts, financial commitments and risks associated withthe group’s activities.

The Management Board report presents group revenueand earnings for fiscal 2005/2006. The consolidated finan-cial statements show an income of €40.4 million beforeminority interests and net income of €39.3 million com-pared respectively €37.1 million and €38.0 million in 2004/2005.

For this reason, the Supervisory Board is in favourManagement’s proposition to pay a dividend of €1.25 pershare.

Proposals have been submitted to you to renew theauthorizations granted to the Management Board by theExtraordinary Shareholders’ Meeting of June 2005 reachingtheir term of expiration.

We have no observations on a proposal by the ManagementBoard to renew the authorization to grant stock purchaseoptions to members of management and personnel.

Proposals have also been submitted to you to approve therenewal of the appointments of four members of theSupervisory Board: Daniel Bracquart, André Crespel,Stanislas Dalle and Jean Guéguen and appoint as a newmember of the Supervisory Board, Madame IsabelleDanjou, replacing Francis Danjou who, for personal reasons,has not requested the renewal of his appointment. We express our strong gratitude for his contribution to thework of the Board over the last nine years.

As last year, a report of the Chairman of the SupervisoryBoard accompanies the Management Board report to theshareholders on the preparation and organization of thework of the Supervisory Board and the specific committeesand on the internal control procedures implemented bythe company.

In conclusion, we recommend that you adopt the resolutionssubmitted to you and that have been approved by us.


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Report of the Supervisory Board

Dear shareholders,

In compliance with the provisions of article L. 621-18-3 ofthe Code Monétaire et Financier, in my capacity ofChairman of the Supervisory Board I hereby present thereport on the work of this board and the internal controlprocedures implemented by the company.

Bonduelle SCA is a French limited partnership with shares(société en commandite par actions – SCA) that has twocategories of shareholders or partners:

- limited partners (associés commanditaires) that contributecapital whose liability in respect to the company’s liabilitiesis limited to the extent of their contribution;

- general partners (associés commandités) that are indefi-nitely and jointly and severally liable for the company’sliabilities vis-à-vis third parties.

In accordance with articles 18, 19 and 20 of the articles ofassociation, members of the Supervisory Board, individualsor legal entities, are selected from the shareholders thatare not general partners.

1 - Work of the Supervisory Board

A. Organization and duties

The mission of the Supervisory Board is defined by legalprovisions and the articles of association as well as the company’s rules of procedure. This mission covers the following areas:

- examining annual and interim financial statements drawnup by Management Board,

- evaluating the management of the company’s businesses,

- ensuring that the rights of shareholders are respected.

To define the conditions for the performance of this mission, the Supervisory Board developed rules ofprocedure also specifying the rights and obligations of itsmembers.

The Board decided to create an Accounts Committeeincluding four members chosen from the Supervisory Board.

This Committee is responsible for preparing for theSupervisory Board meetings in the following areas:

- examination of the annual and interim financial state-ments,

- analysis and evaluation of internal controls and accountingmethods adopted to produce parent company and conso-lidated financial statements,

- analysis of financial and cash flow risks and commitmentsundertaken by group companies and an assessment ofhedging,

- examination of annual audit programs of the StatutoryAuditors and internal auditors.

A Remuneration Committee exists comprising primarily ofmembers from outside the company with one member fromthe Supervisory Board. This Committee determines thelevel of compensation for members of the ManagementBoard of Bonduelle SA as well as salaried members of theBonduelle family. It also issues recommendations on thecompensation policy for key managers.

According to the Board’s rules, it is comprised mainly ofindependent members without relations with the companyor its Management that could compromise their freedomof judgment. This means that the majority of its membersmust not be:

- either currently or within the last five years a salariedemployee of a company included in its consolidation scope,

- an officer of a company in which the company directly orindirectly exercises a corporate appointment or in whichan officer of the company exercises a corporate appoint-ment,

- a customer, supplier or significant banking service provi-der or for which the company accounts for a significantpart of its activity,

- currently or in the last five years served as an auditor ofthe company,

- a close family relation with members of the Management.

As of 30 June 2006 the Supervisory Board had eight members with five independent members fulfilling thesecriteria.


Supervisory Board Chairman’s report on Board activitiesand internal control

Under the articles of association, the Supervisory Boardshall meet as often as the interests of the company so require with the rules of procedure providing for a minimum of four meetings per year.

During these meetings, if it considers useful, the Board cancall upon the Managing Partner, Executive Officers of thegroup and its subsidiaries, the Statutory Auditors, thegroup’s Chief Financial Officer and the internal auditor toobtain additional information and ensure its mission.

It can also call upon outside experts or consultants of itschoice at the company’s expenses.

B. Work of the Supervisory Board in the period

Work of the Supervisory Board

The Supervisory Board held four meetings in fiscal 2005/2006 with an average duration of four hours each.The attendance rate at these meetings was 100%.

In addition to recurring issues such as monitoring businessperformances, approving the interim and annual financialstatements, on 16 June 2006 conducted a visit of the indus-trial production site for the preparation of packaged saladsof Genas (France) which offer an opportunity to exchangeviews with local teams.

The Accounts Committee

The Accounts Committee has four members: DanielBracquart, Jean Guéguen, Yves Tack and André Crespel asChairman.

Its activities cover:

- detailed examinations of interim and annual financial statements,

- analysis of risks and risk hedging,

- examination of the annual audit programs of the StatutoryAuditors.

In fiscal 2005/2006, it held five meetings with durations averaging four hours. The attendance rate was 100%.

In addition, the Committee in accordance with group management defines the work and assignments to be carried out by the internal audit department.

The group’s Chief Financial Officer, management of theaccounting department and internal audit and the StatutoryAuditors provided information at meetings of the AccountsCommittee.

The Committee Chairman provided the Supervisory Boardwith a report on its work.

2 - Internal control procedures

Internal control is a process implemented by a company’sGeneral Management, Supervisory staff and personnel destined to provide reasonable assurance of:

- the effectiveness and efficiency of operations,

- the reliability of financial information,

- compliance with current legislation and regulations.

Internal control procedures provide only reasonable assu-rance and not an absolute guarantee. The reliability of suchprocedures is subject to inherent limits of all processes performed by human beings and constraints concerningresources that all companies must take into account.

Context

Bonduelle SCA is a holding company. Operational businessis conducted through its subsidiary Bonduelle SA that hassix divisions or strategic business units.

Bonduelle SA specific responsibilities include:

- managing shareholdings, mergers, acquiring and disposalof assets,

- acquisitions,

- financial policies for the entire group including methods offinancing,

- tax policy and implementation,

- defining compensation policies, managing supervisory staffand the development of skills,

- approving new advertising campaigns before they arelaunched,

- corporate communications and relations with investors,financial analysts and shareholders,

- sharing corporate resources such as information techno-logy, purchasing, etc.

- research and development programs.

The divisions are divided by geographical market or busi-ness line. Each division has its own financial resources andis responsible for the major share of its production and allsales activities.

Organization of internal controls

The organization of internal controls is as follows:

At the group level

The Bonduelle SA Management has two members vestedwith the powers granted to them by law, the articles ofassociation and the Supervisory Board. It is collectivelyresponsible for the group’s operational management.


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Central corporate services are responsible for ensuring that the decisions of the Management are applied andinformation provided to it is accurate and relevant.

The Executive Committee consists of members of theManagement, division executive officers, the Chief FinancialOfficer and the Chief Human Resources Officer of BonduelleSA. It reviews the group commercial and financial perfor-mances and discusses all general issues concerning thegroup and its subsidiaries. During the period under reviewit met 18 times.

The group internal audit team is part of the financedepartment of Bonduelle SA and reports to the Managementand the Accounts Committee. The audit assignments andworking programs are approved by the Management andthe Accounts Committee. During fiscal 2005/2006, 13 auditassignments were conducted on the different groupmanagement entities and 3 audits were conducted focusingon sustainable development procedures. After every mission,an action plan is produced by the operating managementteams to correct the problems identified in the audit reporton which progress is monitored by the internal audit teamand line management.

The Supervisory Board is responsible for selecting inde-pendent auditors proposed by the Accounts Committee.The group has selected a team of joint auditors in order toprovide geographical and comprehensive coverage of grouprisks.

At the division level

The Management Committee includes the general managerand the main functions’ executive officers. The division’s ChiefFinancial Officer is responsible for implementing systemsof internal control destined to prevent and manage risksresulting from the activity of the company and risks of erroror fraud.

Once every quarter, the Management, the Chief FinancialOfficer and the Chief Human Resources Officer of BonduelleSA hold an internal board meeting with division managementcommittees to set objectives, review performances and definethe strategy to be followed by each division. Issues addressedat these meetings include notably:

- March: interim results

- June: N + 1 budget

- September: capital expenditures

- November: three-year plans

Basis of internal control procedures

A collection of operating guidelines defines the areas ofintervention and respective powers of corporate servicesand the divisions.

A formal procedure for the delegation of powers specifiesthe powers of the members of the Management, centralcorporate services officers and the divisions’ ManagementCommittees.

Budget control focuses on three areas:

• the budget prepared according to the orientations andguidelines established by the Management,

• performance monitoring within the framework of monthlyreporting or internal board meetings,

• the three-year strategic plan established on an annualbasis according to the same procedures used to preparethe budget.

The responsibilities of all parties, the operating proceduresand associated controls are specifically defined.

Budget control is assured by management control teamsof Bonduelle SA and the different divisions.

3 - Internal controls in preparing financialand accounting information

The group prepares the interim and annual consolidatedfinancial statements. This process is managed by the conso-lidation department attached to the group’s financialdepartment.

This information is prepared according to an annual schedule sent to the subsidiaries divided into the followingmain stages:

- monthly control of intra-group operations,

- monthly sales reporting,

- the quarterly reporting package,

- preparation of the interim and annual financial statements.

The consolidated financial statements are prepared on thebasis of a reporting package sent by each subsidiary andprocessed by the group consolidation application.

All documents exchanged within the consolidation processare harmonized and standardized formats have been established and circulated throughout the group.

The accounting teams audit the financial statements at theend of financial periods and work with management controlto analyze and explain performances from one period toanother and variances between actual and budget.

This process is supplemented by the audits and certifica-tion by the Statutory Auditors for the annual and interimparent company and consolidated financial statements.

In fiscal 2005/2006, the group continued to roll out the JD Edward ERP Word Software at its subsidiaries. By year-end, 90% of the subsidiaries had migrated to this system.



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Period ended 30 June 2006

To the Shareholders,

Under the terms of our engagement and as the StatutoryAuditors of Bonduelle SCA, we hereby present our reporton the report prepared by the Chairman of the SupervisoryBoard of your company on internal controls for the fiscalyear ending 30 June 2006.

In accordance with the provisions of French law (article L. 621-18-3 of the Code Monétaire et Financier) and securitiesregulations (article 221-6 of Book II of the RèglementGénéral of the Autorité des Marchés Financiers), it is theresponsibility of the Chairman of the Supervisory Board toreport in particular on the work of the Supervisory Board andon the internal control procedures used for the preparationand processing of accounting and financial information.

Our responsibility is to provide you with our comments on the information contained in the report of the Chairmanof the Supervisory Board concerning the internal controlprocedures relating to the preparation and processing of accounting and financial information.

We performed our procedures in accordance with profes-sional guidelines applicable in France. These guidelinesrequire us to assess the fairness of the information set outin the report of the Chairman of the Supervisory Board onthe internal control procedures relating to the preparationand processing of financial and accounting information.These procedures consisted notably of:

• obtaining an understanding of the objectives and gene-ral organization of internal control, as well as the internalcontrol procedures relating to the preparation and pro-cessing of accounting and financial information, as setout in the report of the Chairman of the SupervisoryBoard;

• obtaining an understanding of the work performed tosupport the information given in the report.

On the basis of these procedures, we have no matters toreport in connection with the information given on the com-pany’s internal control procedures relating to the preparationand processing of accounting and financial information,contained in the report of the Chairman of the SupervisoryBoard prepared in accordance with the above provisionsof the Code Monétaire et Financier and the RèglementGénéral of the Autorité des Marchés Financiers.

Marcq-en-Barœul and Paris-La Défense, 31 October 2006

The Statutory Auditors

KPMG Audit Mazars & GuérardDivision of KPMG S.A.

Christian de Brianson Philippe BouilletAssociate Associate

Statutory Auditors’ report on the report of the Chairmanof Bonduelle SCA’s Supervisory Board on internalcontrols for financial reporting


Consolidated financial statements

Consolidated income statements

As at 30/06/05* As at 30/06/06(in thousands of euros) Notes 12 months 12 months

Sales 29 1,200,880 1,196,046Purchases and external charges 4 (838,099) (835,550)Staff charges 5 (241,958) (241,391)Amortisations (53,023) (48,954)Other operating products 6 41,338 33,202Other operating charges 6 (40,185) (32,731)Income on transfer of consolidated shareholdings (73)Ordinary operating income 68,953 70,549Non-recurring items 7 370 (2,792)Operating income 69,323 67,757Financial products 11,469 46,813Financial expenses (21,513) (56,439)Financial income 8 (10,044) (9,626)Income of equity method companies 11Income before tax 59,290 58,131Tax on income 9 (22,224) (17,770)Net income 37,066 40,361Group share 38,046 39,228Minority share (980) 1,133

BASIC EARNINGS PER SHARE 10 4.84 4.99

FULLY DILUTED EARNINGS PER SHARE 10 4.84 4.99

* Excluding Regulation IAS 32-39.


Consolidated balance sheet

Assets(in thousands of euros) Notes As at 30/06/05* As at 30/06/06

Extraordinary assets 410,877 430,509Other intangible assets 11 30,799 34,243Goodwill 12 75,553 75,312Property, plant and equipment 13 278,765 291,551Equity method stock 73 73Other extraordinary investment 14 7,782 17,236Deferred tax 9 15,392 10,496Other extraordinary assets 15 2,513 1,598Ordinary assets 671,618 678,331Inventories and work in progress 16 296,322 279,526Customers and other receivables 17 307,327 330,491Tax receivables 658 10,091Other ordinary assets 18 4,752 4,561Other ordinary financial assets 19 4,140 9,290Cash and cash equivalents 21 58,419 44,372

TOTAL ASSETS 1,082,495 1,108,840

Liabilities(in thousands of euros) Notes As at 30/06/05* As at 30/06/06

Shareholders’ equity, group share 289,442 312,324Share capital 56,000 56,000Premiums linked to capital 22,545 22,545Consolidated reserves 210,897 233,779Minority interests 14,095 20,750Shareholders’ equity 303,537 333,074Extraordinary liabilities 309,614 293,572Financial payables 22 280,940 269,959Staff commitments 23 4,271 4,617Other extraordinary provision 25 7,031 7,632Deferred tax 9 4,655 1,931Other extraordinary liabilities 26 12,717 9,433Ordinary liabilities 469,344 482,194Ordinary financial payables 22 61,967 66,131Ordinary provision 25 6,282 3,921Suppliers and other creditors 27 397,821 408,265Tax payables 2,055 2,355Other ordinary liabilities 28 1,219 1,522

TOTAL LIABILITIES 1,082,495 1,108,840

* Following the impact of IAS 32-39 – Note 33-D.

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Consolidated cash flow statement

(in thousands of euros) Notes As at 30/06/05 As at 30/06/06

Net income 37,066 40,361Income, equity method companies (11) 0Amortisations and value losses 49,360 47,274Other resources (jobs) not affecting cash 846 (561)Tax paid (22,287) (14,214)Tax charges (products) 22,224 17,770Interest accrued 725 431Gross self-financing margin 87,923 91,062Need difference in working capital (53,540) (4,617)Cash flow relating to operating activities 34,383 86,445Purchase of consolidated companies, cash deducted (2,666) 0Transfer of consolidated companies, no deduction of cash transferred 0 0Industrial investment (57,322) (62,471)Financial investment (18) (15,567)Transfer of fixed assets and financial assets 6,856 113Net difference on borrowing and other capital assets 498 (1)Cash flow relating to investment activities (52,652) (77,926)Capital increases (2,776) 2Net transfer (purchase) of own shares (1,895) (1,664)Loan issues 101,742 40,398Borrowing repayments (11,480) (36,989)Net difference on bank accommodation and other financial assets (44,167) (13,121)Dividends paid to group shareholders and minorities (15,059) (9,387)Cash flow relating to finance 26,365 (20,760)Incidence of differences in exchange rates (482) (333)Cash difference 7,614 (12,574)Cash at beginning of year 21 49,268 56,882Cash at year-end 21 56,882 44,308

CASH DIFFERENCE 7,614 (12,574)


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Difference in consolidated equity

GroupIn numbers Actuarial Own Translated Accumulated share Minority Total

(in thousands of euros) of shares Capital Premiums variance shares reserves income equity interests equity

Equity as at 1 July 2004 8,000,000 56,000 22,545 189,983 268,528 21,659 290,187Share options (144) (144) (144)Variance in translation reserve 152 152 109 261Perimeter variance 0 1,511 1,511Others (194) (393) (588) 579 (9)Subtotal of elements directly bookedas equity 0 (42) (537) (579) 2,200 1,620Income 30/06/2005 38,046 38,046 (980) 37,066Total productsand charges booked for the period 0 (42) 37,509 37,467 1,220 38,687Dividends paid (10,030) (10,030) (8,784) (18,813)Equity as at 30/06/05 8,000,000 56,000 22,545 (42) 217,463 295,966 14,095 310,061Impact of IAS 32-39as at 1 July 2005net of taxes (6,525) (6,525) (6,525)Equity as at 1 July 2005 8,000,000 56,000 22,545 0 0 (42) 210,938 289,441 14,095 303,536Net variance of fairvalue of financial instruments (300) (300) (300)Share options 194 194 194Variance in translation reserve (5,088) (5,088) 60 (5,028)Perimeter variance 0 5,505 5,505Own shares (1,664) (1,664) (1,664)Actuarial differences (120) (120) (120)Others (203) (203) 177 (26)Subtotal of elements directly bookedas equity (120) (1,664) (5,088) (309) (7,181) 5,742 (1,439)Income 30/06/2006 39,228 39,228 1,133 40,361Total products and charges bookedfor the period (120) (1,664) (5,088) 38,919 32,047 6,875 38,922Dividends paid €1.12 (9,163) (9,163) (220) (9,383)

EQUITY AS AT30/06/2006 8,000,000 56,000 22,545 (120) (1,664) (5,131) 240,694 312,324 20,750 333,074

Note 1 – Accounting methods

The consolidated financial statements of the BonduelleGroup and its subsidiaries (“the group”) for fiscal2005/2006 were drawn up in accordance with the IFRS(International Financial Reporting Standards) adopted bythe European Union.

IFRS 1, the first application of IFRS, allows those using IFRSfor the first time in 2005 to choose the date of applicationof regulations IAS 32 and IAS 39 concerning financial ins-truments, i.e. 1 July 2004 or 1 July 2005.

The group decided to apply regulations IAS 32-39 to 1 July 2005, and has therefore not posted financial statements to 1 July 2004.

The impact of the IAS 32-39 regulations at 1 July 2005 is set out in part D of note 33 – Transfer to IFRS.

The amendment to regulation IAS 19 (Staff benefits –Actuarial gains and losses, group plans and information)was applied. The option to report actuarial differences asshareholders’ equity was chosen.

The group’s consolidated accounts for the years prior to 1 July 2005 had been drawn up in accordance with generally accepted French accounting principles and theregulations and methods applicable to consolidatedaccounts (CRC Regulation 99-02 governing consolidatedaccounts). In order to ensure comparability with theaccounts as presented for 2005/2006, the annual accountsas set out above were posted in adaptation to IFRS. The main differences between generally accepted French accounting principles and IFRS are set out belowin note 33 – Transfer to IFRS.

A. Information concerning the company

Bonduelle SCA is quoted on Euronext (Compartment B),and is a French limited partnership (société en comman-dite par actions - SCA). Bonduelle is a leading player onthe transformed vegetable market in the euro zone and inthe non-euro zone. It is involved in three sectors of activity– canned, frozen and chilled produce.

On 20 September 2006 the Management drew up theannual consolidated accounts to IFRS, and authorised publi-cation of financial statements at 30 June 2006, which willbe submitted for approval at the General Meeting ofShareholders on 7 December 2006.

B. Methods of consolidation

The consolidated financial statements bring together thefully consolidated accounts of all subsidiaries which thegroup controls directly or indirectly. The group considers ithas exclusive control of a company when it is in a positionto steer the operational and financial policies of the company, regardless of its shareholding percentage. Thusa number of companies are fully consolidated, althoughthe group holds a control percentage less than or equal to50%. Full consolidation allows consideration to be taken,following elimination of operations and internal results, ofall assets, liabilities and items on the income statement ofthe companies concerned, and the portion of income andequity reverting to group companies (“Group share”), isdistinguished from that concerning the interests of othershareholders (“Minority interests”). The equity method isused for companies where Bonduelle does not have exclusive or joint control and exerts considerable influence.

All companies in the group closed their accounts at 30 June2006, with the exception of Fresco Italia, Bonduelle Kubanand Bonduelle Do Brasil.

A company joins the consolidation perimeter on the dateof taking over control or considerable influence if the purchase was made on several occasions.

A company leaves the consolidation perimeter on the dateof loss of control or considerable influence.

Products and charges from subsidiaries bought or transferredduring the financial year are posted on the consolidated income sheet as of the date of purchase or up to the date of transfer.

All transactions between member companies and conso-lidated internal income (including dividends) have been removed.

C. Sectorial information

A sector of activity is a distinct component of an entity engaged in the supply of products or services subject torisks and levels of profitability which differ from those inother sectors.

A monetary sector is engaged in the supply of products or services within a specific economic and monetary environment,exposed to risks and levels of profitability which differ fromthose in other sectors of activity operating in other economic and monetary environments.


Notes to the consolidated financial statements

In due consideration of the structure of group profitabilityand risk, the first level of sectorial information covers mone-tary sectors, and the second level covers sectors of activity.

The primary sectors are:

- euro zone (companies which have adopted the singleEuropean currency),

- non-euro zone.

The secondary sectors are:

- canned vegetables (operations relating to appertised products),

- frozen vegetables (operations relating to frozen products),

- chilled vegetables (operations relating to 4th RangeProduce and Delicatessen),

- others (back-up and non-allocated operations).

Breakdown of primary revenue by sectors is determinedby localisation of assets identical to that arising from loca-lisation of markets.

Transfers between primary sectors are not significant and are performed under market conditions.

D. Translations into foreign currency and translation of financial statements of overseas companies

Translation of operations into foreign currency

Transactions recorded in foreign currency are assessed bythe rate of exchange in force on the date of the transaction.Receivables and payables in foreign currency on the balance sheet at closure of the period are assessed in accordance with the rate of exchange applicable at thatdate. Exchange profits and losses arising from translationof currency transactions are booked as financial productsand charges on the income statement, with the exceptionof those relating to foreign currency borrowings or otherinstruments concerning long-term hedging in the same currency, which are booked as “Translation differences” inthe consolidated equity.

Translation of the financial statements of overseascompanies

The balance sheets of companies whose operating currency is not the euro are translated into euros at officialrates of exchange at year-end, and their income statementsare translated into euros, using the average rate for theperiod, excluding hyperinflation, for each currency.Translation differences arising from application of the different rates of exchange are booked as “Translation differences” in consolidated equity, until the foreign investment they represent is sold or settled up.

E. Change in the consolidation perimeter

The consolidation perimeter is identical to that on theaccounts posted at 30 June 2005, with the exception of:

- Absorption, with effect as of 1 July 2005, of Bonmaïs SAand Le Valdour SA by Sud-Ouest Légumes SA, which willnow become Soléal.

These movements did not have any significant incidenceon accounts for 2004/2005 and 2005/2006.

Note 2 – Accounting principles

The consolidated financial statements at 30 June 2006 arepresented in thousands of euros, and reflect the net worthof the company and its subsidiaries (hereinafter “thegroup”).

They were drawn up on the basis of historic cost, with theexception of the assets and liabilities defined below at fairvalue.

A. Intangible assets

Goodwill

Following purchase of stock from fully consolidated orequity-method companies, the purchase cost relates toassets, liabilities purchases, assessed at a fair value. Thedifference between purchase cost and the group share inthe fair value of assets and liabilities purchased, and anyliabilities represent goodwill. This is listed on the consoli-dated balance sheet’s assets as “Goodwill” for fully conso-lidated companies and as “Equity method” for equity-method companies.

Differences in purchases relating to overseas companiesare booked in the operating currency of the company purchased.

Negative purchase differences are directly booked toincome.

Other intangible assets

Brand names purchased and individualisable, whose effective duration is considered as undefined, are listed onthe consolidated statement as “Other intangible assets”.

The main factors in assessment of the indeterminate nature of the effective term of the brands were their positioning on the market in terms of operations, publicknowledge of the brands, and their expected long-termcost effectiveness.

They are not amortised, but are subjected to an annual depreciation test as per IAS 36.


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Licences and patents and other intangible assets purchasedare recorded at cost price as “Other intangible assets” onthe consolidated balance sheet. They are amortised usingthe straight-line method in accordance with their estimatedeffective life.

Start-up costs

Start-up costs must be locked up as intangible assets whenthe company can show that they generate future economicadvantage, and that their costs are clearly identified.

The start-up costs of software for internal use are recordedas assets on the balance sheet when it is probable that thecosts will generate future economic advantage. The costsare amortised using the straight-line method over the estimated life of the software, between one and five years.Other purchase and development costs for software arebooked immediately.

Monitoring the value of intangible assets

The book value of intangible assets with an indefinite termand goodwill is subjected to review at least once a year,when events and circumstances indicate that a reductionin value could be taken up for other intangible assets. A loss in value is reported when the recoverable value ofthe intangible assets becomes less than their net book value. Value losses are recorded as a priority on goodwillrelating to cash generation units, and subsequently on reduction of the net book value of each asset in the unit.

The recoverable value of intangible assets corresponds tothe largest amount between the fair value diminished bycosts relating to the sale and their entity value. The entityvalue is determined by the updated envisaged cash flowsfrom the cash generation unit Unité Génératrice deTrésorerie (“UGT”) for the assets tested. UGTs correspondto aggregation of subsidiaries which belong to the same sector of activity and generate cash flows visibly independentof those generated by other UGTs. Cash flows used as abasis for calculation of entity values are the product of theUGT strategic plans over the next five years, and beyond thisthey are extrapolated by the application of a perpetual rateof growth specific to each UGT. Cash flows are updated before taxes on the basis of the weighted average capitalcost (WACC) determined in accordance with data on theBonduelle market and its sector of activity.

B. Property, plant and equipment

Property, plant and equipment are recorded on the balancesheet at their cost diminished by accumulated depreciationand losses in value. The gross value of property, plant andequipment corresponds to their purchase or production

costs. It is not subjected to reassessment. Purchase or production costs include, where applicable, dismantlingcosts and the costs of restoring operating sites. The costsof borrowing are excluding from the cost of the assets.

Property, plant and equipment held through financial leasings are recorded as assets on the balance sheet as theupdated value of future minimum payments, or the market value if this is lower when the contract transfers tothe group, in substance, the majority of the risks relatingto ownership of the assets. Assessment of the level of risktransferred is carried out via analysis of the terms of thecontract. Financial payables arising from purchase of theassets are booked as liabilities on the consolidated balancesheet.

Amortisation is calculated using the straight-line methodbased on purchase cost, with possible deduction of a residual value from the date on which the goods are readyfor operation. With the exception of certain special cases,residual values are zero. Effective life terms are reviewedperiodically, particularly in the case of decisions to changeproduction locations.

- Buildings: 10 - 40 years.

- Office and computer equipment, furniture: 5 - 15 years.

- Others: 3 - 10 years.

Where circumstances or events indicate that an asset couldhave lost some of its value, the group proceeds to examinethe recoverable value of the asset (or the group of assetsto which it belongs). Recoverable value is the highest value between the fair value as diminished by transfer costsand the entity value. Entity value is estimated by updatingthe expected future cash flows for the asset (or the groupof assets to which it belongs) within the conditions of useenvisaged by the group. A loss in value is booked whenthe recoverable value of an asset becomes durably lowerthan its net book value.

C. Financial assets

These include investments, and ordinary assets representoperating receivables, stock receivables, investment secu-rities, and cash assets.

Investment securities and cash assets

Investment securities and cash assets are treated as assetsgauged by fair value against income counterparty, and arebooked on the consolidated balance sheet at the fair value - variations in fair value are posted directly to financialincome.

They are posted at the settlement date.


Other financial assets

Other financial assets are booked at the amortised cost calculated, using the effective rate method (TIE). Their postedvalue includes the capital outstanding. They are subjectedto recoverable value tests, which are performed when thereare indications that recoverable value will be lower thanthe value posted on the balance sheet for the assets. Theloss in value is recorded on the income sheet.

In general, the amortised costs of these assets usually equaltheir historic values.

They are posted at the settlement date.

D. Financial liabilities

Financial payables include:

- obligation borrowing,

- non-overdue accrued interest,

- outstanding financial leases,

- bank accommodation and borrowing,

- passive derivatives.

Derivatives are assessed and booked at amortised costusing the effective interest rate method. They are postedat the settlement date.

In application of the IAS 39 regulation of accounting principles for fair value hedging, obligation payables swap-ped on issue were reassessed at market value. Differencesin the fair value of the payables and associated derivativesare booked on the income sheet for the period.

E. Financial derivatives

The group uses over-the-counter derivatives to manageexposure to exchange and interest rate risks. Group policyis not to operate speculatively on financial markets.

In application of the IAS 39 regulation, financial derivativesare booked on the consolidated balance sheet at the fairvalue.

- If the derivative is designated as a fair value hedge for assets or liabilities posted on the consolidated balancesheet, value differences in the derivative and the hedgeelement are posted on the income sheet for the sameperiod.

- If the derivative is designated as a cash flow hedge, thedifference in value of the derivative’s effective portion isbooked to equity. It is booked as income when the itemhedged is also booked as income. The difference in value of the derivative’s non-effective portion is, however,booked as income immediately.

- If the derivative is designated as a net investment hedgein overseas activities, the effective portion of the diffe-rence in the fair value for the derivative is booked directlyagainst equity. Sums booked in this way are only taken toincome when the investment is transferred. The non-effective portion is booked to income immediately.

- Differences in the fair value of derivatives which do notmeet the conditions for application of hedge accountingare booked directly as income for the period. They arelisted as “Hedging not eligible for IFRS accounting”.

Derivatives are booked at their date of transaction.

The market values of financial assets and liabilities are determined on the basis of assessment models generallyrecognised on the market or, in the case of more complexinstruments, on the basis of quotations drawn up directlyby the bank counterparties. The market data used in valuation tools are the Central Bank fixings, and data supplied by Reuters-Telerate.

F. Inventories

Inventories of materials are recognised on the basis of theweighted average unit cost method. Inventories of the finished products manufactured are assessed at productioncost (including indirect production costs). The costs of borrowing are not included in inventory costs. Depreciationis deemed necessary in the following cases:

- for raw materials when current market price is lower thanthe book value,

- for finished products and commodities sold as-is, eachtime the probable net realisable value is lower than production or purchase costs.

The sum of all stock depreciation to return this to its netrealisable value and all losses on stocks are booked ascharges for the period during which depreciation or lossesoccurred. The sum of any depreciation in stocks arisingfrom an increase in the net realisable value is posted as areduction in the sums of stocks booked as charges over theperiod during which depreciation occurred.

Margins produced between group companies are eliminated.

G. Own shares

Bonduelle shares held by the company are listed as diminishment of consolidated equity under “Own shares”,for a value matching their cost. The product of transfer ofshares is booked directly as increase in equity, in such away that any transfer value appreciations or depreciationsdo not affect net income for the year.


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H. Cash and cash equivalents

Cash and cash equivalents consist of investments whichmay be made available immediately and whose originalterm is equal to or less than three months. The investmentsare assessed by their market value.

The items making up cash flows are current account liquidities and parts of mutual funds mobilisable in the short term.

I. Investment subsidies

Investment subsidies are listed on the balance sheet as“Other extraordinary liabilities”. They are posted as “Otheroperational products” on the income sheet in line withamortisation of the assets they have been used to purchase.

J. Tax

The group determines deferred tax on all differences between the tax values and book values of assets and liabilities, and on tax deficits, with the exception of good-will. The differences are temporary when they must bereversed in the foreseeable future. In accordance with theliability method, deferred taxes are calculated by applyingthe last tax rate issued at the closing date, applicable to the period of reversal of differences.

Assets and liabilities in relation to deferred taxes are notdiscounted.

K. Commitments – retirement benefits, longservice benefits and staff provident schemes

In addition to retirement allocations as per legislation in force in the countries where companies employ their work forces, staff also receive retirement bonuses and long service benefits. The group offers these benefitsusing defined-contribution systems or defined-allowancesystems.

In defined-contribution systems, the group has no obligationsother than payment of the premiums, which are booked inthe yearly results.

As per IAS 19, “Staff benefits”, in defined-allowance systems commitments to retirees and similar are assessedusing the projected credit unit method.

The corresponding actuarial commitments are booked eitheras dues paid over to independent bodies or as provision.

The main actuarial hypotheses used to assess commitmentsare as follows:

- staff turnover and mortality rates,

- retirement age: 60 years, with the exception of managementstaff – 61 years.

Actuarial differences are booked to shareholders’ equity.

L. Other extraordinary provisions and ordinary provisions

Provisions are booked for risks and charges with theirconcept clearly indicated, where the due date or theamount is uncertain, when third-party obligations exist, andit is certain or probable that the obligation will cause anoutflow of resources with no counterparty which is at leastequivalent.

In the case of restructuring, an obligation is constitutedwhere restructuring has been carried out to a detailed plan.

M. Booking of sales

Sales are booked at the time of transfer of the essentialpart of risks and advantages inherent to ownership of thegoods transferred to the buyer.

Sales are booked net of discounts and dividends agreedwith customers, and of costs relating to advertising agree-ments, referencing or in relation to sporadic promotionsinvoiced by distributors.

N. Other products and ordinary operationalcharges

Other products and operational charges comprise the products and charges which do not contribute directly tooperations.

O. Non-recurring items

Non-recurring items comprise significant items which, due to their nature and non-habitual character, cannot be considered as inherent to the group’s operational activity. They include mainly appreciations or depreciationsin transfer of activities and consolidated shareholdings,badwill, value losses reported on intangible assets (including goodwill) relating to consolidated shareholdings,impacts relating to tax risks and restructuring and reorganisation costs.


P. Payments based on shares

Share subscription or purchase options agreed withemployees are assessed at fair value on the date of attribu-tion. The fair value of options is determined using the Black& Scholes assessment method on the basis of hypothesesdetermined by the Management. This is booked to income for the period of acquisition by staff - 4 years - with an equi-valent increase in shareholders’ equity as counterparty.Charges booked as options which have reached due datebefore they can be taken up are posted to income for theperiod during which the due date was observed. The grouprevalued and restated all options granted after 7 November2002 which could not be taken up at 1 July 2004.

Q. Earnings per share and fully diluted earnings per share

Earnings per share are obtained by dividing the group’snet earnings by the average number of shares in circulationover the year.

To determine fully diluted earnings per share, the weightedaverage number of shares is adjusted to the impact of translation of diluted instruments into ordinary shares.

R. Assets and liabilities held for sale and activities terminated, transferred or pending transfer

Assets and liabilities for transfer are posted separately onthe consolidated balance sheet for the period during whichthe transfer decision was taken, and the consolidatedbalance sheets for previous periods are not restated.

Assets to be sold off are assessed at the lowest value bet-ween their book value and the fair value as diminished bythe cost of their sale. Amortisation on these assets ceases.Moreover, earnings and cash flows for activities terminated,transferred or pending transfer are respectively booked ona separate line on the earnings statement and on the tablefor analysis of differences in cash flows, for all the periodspresented.

S. Use of estimates

Within the normal process of drawing up consolidatedaccounts, since the determination of certain data is notedon financial statements, this requires the use of hypotheses,estimates or appreciations, particularly valuation of

intangible assets, deferred tax on reportable deficits anddetermination of the sum of provisions for risks and chargesor provision for company and business commitments. Thesehypotheses, estimates and appreciations are drawn up on the basis of information or situations existing at the date on which the accounts were drawn up, which could aposteriori prove to differ from reality.

T. Reclassifications

The presentation of certain items on financial statementsfor previous periods was modified to make it homogenouswith the rules adopted for the last period presented.

This concerned variations in stocks originally classified asother products and operating charges, and reclassified hereas purchases and external charges.

Moreover, analysis of the financial instruments led to modification of the net opening situation as at 1 July 2005with respect to the closing figures of biannual accounts.

Note 3 – Management of financial risk

The group set up an organisation for central managementof all financial risks relating to liquidity, foreign exchange,interest rates and counterparties. Financial managementdelegated responsibility to the group’s cash department,and provided it with all the know-how and tools requiredto work on various finance markets in the best possibleconditions of effectiveness and security. The organisationand the procedures applied are regularly reviewed by internalauditing. At Financial Business Reviews, general groupmanagement approves the guidelines set out in managementstrategies it has authorised.

In a rapidly mutating international environment featuringvolatile markets and development of financial techniques,the mission of the group’s cash department is:

- to guarantee sufficient and optimum finance to developall operating activities and group expansion,

- to identify, assess and cover all financial risks in closecooperation with operating organisations.

The objective is to minimise, at the least possible cost, theimpact of fluctuations on finance markets on the incomebalance sheet, in order to reduce pressure on shareholders’equity allocated to management of the financial risks.

The group rules out taking up speculative positions.


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A. Liquidity risk

The mission of the group’s finance management is to maintain sufficient liquidity at all times, and to run thegroup’s cash and banks department efficiently using financewhich is preferable in both term and legal conditions. It hasalso set up confirmed credit lines to guarantee optimumflexibility for group financing (see note 22).

B. Market risks

1. Exchange risks

• Risk linked to variations in exchange rates

The group publishes its consolidated accounts in euros,and over 2005/2006 it realised 87% of sales and 58% ofthe operating income in euros.

Portions of assets, liabilities, sales and income expressedin other currencies, mainly Polish zlotys, Hungarian forintsand US dollars, are in constant evolution, but have not asyet become a significant factor in the consolidated figures.The group has undergone the effects of fluctuations inthese currencies with respect to the euro during translationto euros in its consolidated accounts, but is still largely unaffected by the effects of translation, which consist, forexample, when the euro appreciates with respect to thesecurrencies, of reducing the contribution to consolidatedearnings by subsidiaries which draw up their accounts inthese currencies.

Subsidiary sales and expenses are generally expressed inlocal currency, with the exception of imports, exports andforeign currency hedgings. Bonduelle thus feels that thegroup’s local vulnerability to currency fluctuations has beenlimited, and will remain so.

However, the international group strategy carried throughshould help increase international sales operations, operating income and consolidated net profits.

• Policy of covering risks of exchange differences

The objective is to cover, on the basis of an annual budget, risks in relation to commercial operations carriedout by group subsidiaries in a currency other than their operating currency, and the risks to net assets for certainsubsidiaries operating in countries where the currency isother than the euro.

The group uses financial instruments available on over-the-counter markets, with the exclusive aim of coveringfinancial risks arising from its industrial and commercial operations. Hedging operations are dealt with in accordance with the objectives and procedures determinedby Bonduelle’s General Management, and these are centralised as group cash.

Group policy in relation to currency fluctuations consists of periodic calculation of net exposure on the currencies,and use of financial derivatives to reduce the risk.

In particular, the group uses forward currency contracts,currency swaps and options drawn up with prestigious bankcounterparties. Details of the portfolio as at 30 June 2006are set out in note 20.

2. Interest rate risk

Interest rate management policy is coordinated, checkedand managed in centralised fashion to protect future cashflows and reduce the volatility of financial charges. The group uses the various instruments available on themarket, particularly options contracts and exchangecontracts. Details of portfolio as at 30 June 2006 are setout in note 20.



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Note 4 – Purchases and external charges

(in thousands of euros) As at 30/06/05 As at 30/06/06

Purchases of commodities and other supplies (564,714) (531,370)Production in stock 9,262 (25,785)Stock variations in commodities and other supplies 12,045 13,275Other external charges (294,691) (291,668)

TOTAL PURCHASES AND EXTERNAL CHARGES (838,099) (835,550)

Note 5 – Remuneration and staffing

(in thousands of euros and number of staff) As at 30/06/05 As at 30/06/06

Staff expenditure at integrated companies 241,958 241,391Annual average headcount 7,959 7,209Permanent headcount 5,851 5,632

Note 6 – Other products and operating charges


Operating allowances 13,775 16,624Drawdowns in provisions and value losses 13,057 3,409Other operating products 14,506 13,169

TOTAL OTHER OPERATING PRODUCTS 41,338 33,202


Taxes (21,700) (24,354)Allocations for provisions and value losses (10,664) (5,818)Other operating charges (7,821) (2,559)

TOTAL OTHER OPERATING CHARGES (40,185) (32,731)


Note 7 – Non-recurring items


Capital gains/losses on transfer of assets 549Tax risks and litigation 3,025 (1,021)Reorganisation costs (2,655) (2,320)

TOTAL NON-RECURRING ITEMS 370 (2,792)

Note 8 – Financial income

As at 30/06/05 As at 30/06/06(in thousands of euros) excluding IAS 32-39

Financial products 2,436 31,697Financial charges (13,194) (41,508)= Net financial costs (10,759) (9,811)Exchange results 116 286Other charges and products 599 (102)

TOTAL FINANCIAL INCOME (10,044) (9,627)

Of which, impact of fair value differences for derivatives not eligible for IFRS hedge accounting 10,204

Financial income for the year was -€9.6 million as against-€10 million at 30 June 2005. The earnings take into consi-deration a gain of €10.2 million, from differences in fairvalue of instruments negotiated to cover variable-rate debt.These derivatives which are not eligible for IAS 39 hedgingaccounting in accordance with IAS 39 (see note 20), havea long term (3 and a half years, on average), and thereforehave a significant impact on the result for the year.

Excluding the impact of IAS 39, the average cost of debtwas 4.88%, an increase of 163 bp with respect to 30 June2005 (3.25%). Corrected for non-recurrent events, theincrease is 61 bp:

- a rate decrease of 100 bp would entail a decrease of 76 bpin the average cost of debt, i.e. a decrease in financialcharges of €2.8 million.

- a rate increase of 100 bp would cause an increase in theaverage cost of debt of 34 bp, i.e., an increase in financialcharges of €1.3 million.

When the impact of the IAS 39 regulations is added, theaverage cost of debt at 30 June 2006 was 2.65%.

- a rate decrease of 100 bp over all curve maturities wouldcause an increase of 107 bp in the average cost of debt,i.e. an increase in financial charges of €4 million.

- a rate increase of 100 bp over all curve maturities wouldcause a decrease of 217 bp in the average cost of debt,i.e. a decrease in financial charges of €8 million.


Note 9 – Tax on income

1. Analysis of net tax charges

Total taxes on profit are analysed as follows:

As at 30/06/05 As at 30/06/06

Average tax rate 37.50% 30.57%

The tax integration group is as follows:

Bonduelle SCA, Bonduelle Conserve International, Bonduelle Surgelé International, Bonduelle Frais Investissements SA,Bonduelle Frais France, Bonduelle Development, Bonduelle SA and Duvet.

Group income tax benefit for tax integration was €11,045,000.

2) Match between tax charges and earnings before tax

(in thousands of euros) As at 30/06/05 % As at 30/06/06 %

Net income, group share 38,046 39,228Minority interests (980) 1,133Net income of equity method companies (11) 0Taxation charge 22,224 17,770

INCOME BEFORE TAX 59,279 58,131Theoretical taxation charge 20,706 34.9% 20,015 34.4%Matching:Permanent differences (72) -0.1% 712 1.2%Rate differential (overseas) (3,068) -5.2% (4,160) -7.2%Incidence of reportable deficits and others 4,658 7.9% 1,203 2.1%

ACTUAL TAXATION CHARGE 22,224 37.5% 17,770 30.6%

3) Deferred tax


Deferred tax – Assets 15,392 10,496Deferred tax – Liabilities 4,655 1,932

NET WORTH OF DEFERRED TAX 10,737 8,564Provisions and assets 8,252 12,826Margins on stock 1,781 1,939Reportable deficits* 11,738 11,375Derogatory amortisations (13,028) (15,441)Others 1,994 (2,135)

NET WORTH OF DEFERRED TAX 10,737 8,564

* Due to benefit prospects of the companies concerned.

As at 30 June 2006, deficits for which no active deferred taxes were booked were €29.1 million, as against €24.2 million as at 30 June 2005.

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Note 10 – Earnings per share


Net income, group share 38,046 39,228Number of shares for calculation:- of net income 7,853,090 7,860,831Income per share (in euros):- basic 4.84 4.99- diluted 4.84 4.99

Stock options have no effect on fully diluted earnings per share.

The dividend proposed at the General Meeting of Shareholders is €1.25 per share.

As at 30 June 2006, BSCA share capital consist of 8 million shares with par value of €7.

Note 11 – Other intangible assets

Movements of gross values and losses in value were as follows:

Purchase or Transfer, outgoing(in thousands of euros) As at 01/07/04 allocation or trade-in Others (1) As at 30/06/05

GROSS VALUESBrands, patents, licences 35,691 5,539 (3) 5 41,231Software 1,804 55 (47) 70 1,881Others 1,203 30 (4) 272 1,500Work in progress 0

38,697 5,623 (54) 347 44,612

AMORTISATIONS AND VALUE LOSSESBrands, patents, licences 9,281 2,509 (23) (14) 11,754Software 1,478 98 (20) 51 1,606Others 225 195 (4) 37 453

10,984 2,802 (47) 74 13,813

NET VALUESBrands, patents, licences 26,410 29,478Software 325 275Others 978 1,047Work in progress 0 0

27,713 30,799

(1) Unrealised exchange gains or losses and post-to-post transfers.


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GROSS VALUESBrands, patents, licences 41,231 3,957 (43) (5,401) 39,744Software 1,881 569 (176) 6,170 8,444Others 1,500 22 0 2 1,524Work in progress 0 1,226 0 (22) 1,204

44,612 5,774 (219) 749 50,916

AMORTISATIONS AND VALUE LOSSESBrands, patents, licences 11,754 2,599 (43) (5,782) 8,528Software 1,606 274 (174) 5,784 7,491Others 453 201 0 1 655

13,813 3,074 (217) 4 16,673

NET VALUESBrands, patents, licences 29,478 31,217Software 275 954Others 1,047 869Work in progress 0 1,204

30,799 34,243


Note 12 – Goodwill

Goodwill varied as follows:


GROSS VALUE 76,327 0 (773) 75,553Value loss 0 0 0 0 0

NET VALUE 76,327 0 0 (773) 75,553


GROSS VALUE 75,553 0 (421) 180 75,312Value loss 0 0 0 0 0

NET VALUE 75,553 0 (421) 180 75,312

(1) Perimeter variation.

Note 13 – Property, plant and equipmentMovements of gross values and losses in value were as follows:


GROSS VALUESLand 25,229 326 (796) 223 24,983Of which assets purchased and refinanced by leasing 2,407 2,407

Constructions 215,441 7,465 (1,711) 10,433 231,628Of which assets purchased and refinanced by leasing 20,525 20,525

Technical material,tools and industrial material 416,545 23,029 (7,588) 14,442 446,428Of which assets purchased and refinanced by leasing 23,552 5,323 28,875

Others 30,982 3,974 (1,506) (773) 32,676Of which assets purchased and refinanced by leasing 0

Construction work in progress 10,799 16,094 (98) (9,934) 16,860Assets pending transfer 0 0 0 0 0

698,996 50,888 (11,699) 14,390 752,575

AMORTISATIONS AND VALUE LOSSESLand 7,867 636 (4) (1,274) 7,225Of which assets purchased and refinanced by leasing 0

Constructions 121,091 16,968 (1,521) 545 137,083Of which assets purchased and refinanced by leasing 12,348 1,222 13,570

Technical material, tools and industrial material 278,440 31,119 (6,383) 3,907 307,082Of which assets purchased and refinanced by leasing 19,154 1,532 844 21,531

Others 19,673 3,427 (1,107) 273 22,266Of which assets purchased and refinanced by leasing 0

Construction work in progress 272 (118) 154Assets pending transfer 0

427,343 52,032 (9,015) 3,450 473,811

NET VALUESLand 17,362 17,758Of which assets purchased and refinanced by leasing 2,407 2,407

Constructions 94,349 94,544Of which assets purchased and refinanced by leasing 8,177 6,955

Technical material, tools and industrial material 138,105 139,346Of which assets purchased and refinanced by leasing 4,398 7,344

Others 11,310 10,411Of which assets purchased and refinanced by leasing 0 0

Construction work in progress 10,526 16,706Assets pending transfer 0 0

271,653 278,765




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GROSS VALUESLand 24,983 1,595 (52) 147 26,673Of which assets purchased and refinanced by leasing 2,407 0 0 0 2,407

Constructions 231,628 5,752 (1,289) 6,378 242,469Of which assets purchased and refinanced by leasing 20,525 0 0 0 20,525

Technical material,tools and industrial material 446,428 29,144 (20,760) 9,258 464,070Of which assets purchased and refinanced by leasing 28,875 1,600 0 1,910 32,385

Others 32,676 3,094 (5,139) 140 30,771Of which assets purchased and refinanced by leasing 0 0

Construction work in progress 16,860 21,221 (9) (18,175) 19,898Assets pending transfer 0 0 0 0 0

752,575 60,807 (27,250) (2,251) 783,881

AMORTISATIONS AND VALUE LOSSESLand 7,225 479 (11) (0) 7,692Of which assets purchased and refinanced by leasing 0

Constructions 137,083 13,006 (1,158) (669) 148,263Of which assets purchased and refinanced by leasing 13,570 954 114 14,638

Technical material,tools and industrial material 307,082 28,822 (19,418) (2,475) 314,011Of which assets purchased and refinanced by leasing 21,531 1,832 23,362

Others 22,266 3,405 (3,265) (306) 22,100Of which assets purchased and refinanced by leasing 0

Construction work in progress 154 110 0 0 265Assets pending transfer 0

473,811 45,823 (23,853) (3,451) 492,330

NET VALUESLand 17,758 18,980Of which assets purchased and refinanced by leasing 2,407 2,407

Constructions 94,544 94,207Of which assets purchased and refinanced by leasing 6,955 5,887

Technical material,tools and industrial material 139,346 150,059Of which assets purchased and refinanced by leasing 7,344 9,023

Others 10,411 8,671Of which assets purchased and refinanced by leasing 0 0

Construction work in progress 16,706 19,633Assets pending transfer 0 0

278,765 291,551



Note 14 – Other ordinary financial assets

Movements of gross values and losses in value were as follows:

Purchase Transfer, outgoing(in thousands of euros) As at 01/07/04 or allocation or trade-in Others (1) As at 30/06/05*

GROSS VALUESStock holdings (2) 43 18 61Active financial derivatives 0 0Other investment 6,714 3,020 (4,225) (2,764) 2,744

6,757 3,038 (4,225) (2,764) 2,805

VALUE LOSSESStock holdings (2) 5 5Other investment 1,502 (1,044) 458

1,507 0 (1,044) 0 463

NET VALUESStock holdings (2) 38 18 55Active financial derivatives 0 0Other investment 5,212 3,020 (3,181) (2,764) 2,286

5,249 3,038 (3,181) (2,764) 2,342

* Excluding Regulation IAS 32-39.

Purchase Transfer, outgoing(in thousands of euros) As at 30/06/05 or allocation or trade-in Others (1) As at 30/06/06

GROSS VALUESStock holdings (2) 61 14,128 (3) 48 14,236Active financial derivatives 5,730 (4,599) 1,131Other investment 2,203 37 (198) (10) 2,031

7,993 14,165 (4,797) 38 17,399

VALUE LOSSESStock holdings (2) 5 5Other investment 206 (49) 158

211 (49) 0 0 163

NET VALUES Stock holdings (2) 55 14,128 48 14,231Active financial derivatives 5,730 (4,599) 1,131Other investment 1,996 86 (198) (10) 1,874

7,782 14,214 (4,797) 38 17,236

(1) Unrealised exchange gains or losses and post-to-post transfers.(2) This entry represents the book value of the main stock of unconsolidated companies held by the group.(3) The stock increase of €14,128,000 corresponds to purchase of a shareholding in the Aliments Carrière Group.


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Note 15 – Other extraordinary assets


Other extraordinary receivables 2,513 1,391Charges booked in advance 207

TOTAL OTHER EXTRAORDINARY ASSETS 2,513 1,598

Note 16 – Inventories and work in progress

Net values Net values(in thousands of euros) as at 30/06/05 Gross values Provisions as at 30/06/06

Material and packaging 80,345 78,038 (1,027) 77,011Finished products 215,977 206,373 (3,858) 202,515

TOTAL INVENTORIES AND WORK IN PROGRESS 296,322 284,411 (4,885) 279,526

Note 17 – Customers and other receivables

Customers and other receivables are broken down as follows:

Net values Net values(in thousands of euros) as at 30/06/05 Gross values Provisions as at 30/06/06

Customers 224,285 239,846 (5,618) 234,228Tax and company receivables 32,223 39,667 0 39,667Other receivables 50,819 61,596 (4,999) 56,597

TOTAL CUSTOMERS AND OTHER RECEIVABLES 307,327 341,109 (10,618) 330,491

Note 18 – Other ordinary assets

Other ordinary assets are broken down as follows:


Loans and non-consolidated receivables 518 465Charges booked in advance 4,210 4,081Others 24 15

TOTAL OTHER ORDINARY ASSETS 4,752 4,561

Note 19 – Other ordinary financial assets


Active derivative assessed at current fair value 4,140 9,290

TOTAL ORDINARY FINANCIAL ASSETS 4,140 9,290

Note 20 – Financial derivatives

Derivatives as at 30 June 2006

(in thousands of euros) Notional Market value Book value

PASSIVE DERIVATIVESExchange rate derivativesCash flow hedging - - - Fair value hedging* 181,216 (1,569) (1,569)Hedging not eligible for IFRS accounting 625,000 1,791 1,791 Foreign exchange derivatives Cash flow hedging 178,317 5,787 5,787 Fair value hedging 110,936 35,246 35,246 Net investment hedging in currencies - Hedging not eligible for IFRS accounting 88,688 3,945 3,945

45,201 45,201 Of which Ordinary 7,725

Of which Extraordinary 37,476

ACTIVE DERIVATIVESExchange rate derivativesCash flow hedging Fair value hedging* 36,802 1,131 1,131 Hedging not eligible for IFRS accounting 300,000 7,704 7,704 Foreign exchange derivatives Cash flow hedging 11,802 295 295 Fair value hedgingNet investment hedging in currenciesHedging not eligible for IFRS accounting 131,633 1,291 1,291

10,421 10,421 Of which Ordinary 9,290

Of which Extraordinary 1,131

* For the purposes of presentation, cross currency swap fair value was classified as fair rate value for the rate component and fair exchange value for the exchange component.

The group uses over-the-counter derivatives to manage exposure to exchange and interest rate risks. Group policy is notto operate speculatively on financial markets.


Rate derivatives

Fair value hedges

The group issued three fixed-rate obligation loans, swappedat variable rate following issue. The swaps meet the fairvalue hedge accounting criteria in accordance with the IAS 39 regulation. Underlying debt and swaps are bookedat their market value.

Hedges not eligible for IFRS accounting

Group debt essentially consists of obligation loans swappedat variable rates, and so the group is vulnerable to increasesin interest rates in euros. In order to cover this risk, thegroup has used tunnel options, and can therefore guardagainst rate increases exceeding 3.60% over an averagematurity period of 3 and a half years. However, since thisis a debt hedge swapped at origin, none of these derivativesare eligible for future flow hedge accounting in accordancewith IAS 39. They have thus been classified as instrumentsheld for transaction purposes, and their fair value variationsare booked as income for the year.

Exchange derivatives

Fair value hedges

In the year 2000, the group issued an obligation loan at USD150 million nominal. This made the group vulnerableto the risk of a variation in the value of the debt, depending

on fluctuations in euro/USD parity. The group has availeditself of derivatives, forward exchange and cross-currencyswap to cover this risk at 94% of the par value in responseto hedge accounting criteria in accordance with IAS 39.

Cash flow hedges

Group sales are mostly drawn up in euros. In certain countries,however, the group may invoice in foreign currency - mainlyUS dollars, Hungarian forints, Russian roubles and Polishzlotys. The group publishes its accounts in euros, and valuefluctuations in these currencies with respect to the euro canaffect the consolidated results. In order to limit income sensitivity, the group has used cash flow hedging by trading in fixed and optional derivatives.

Moreover, the cross-currency swap used to cover the obligation loan of USD150 million was negotiated inadvance with respect to the debt’s issue date. The fair value atissue date was -€4.4 million. This amount was booked to shareholders’ equity as a future flow hedge, and will beposted as income on the date of repayment of the loan.

Hedges not eligible for IFRS hedge accounting

A number of the derivatives used by the group as futurecash flow hedges do not meet hedge accounting criteriain accordance with IAS 39. These are mainly optional out-of-the-money strategies or derivatives where the nominalis not certain on the day of trading.


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Financial instruments for cash flow hedging

Fair value (in thousands of euros) < 1 year 1-5 years > 5 years

LiabilitiesCash flow hedging - Rates - - - Cash flow hedging - Exchange 1,406 3,505 876 AssetsCash flow hedging - RatesCash flow hedging - Exchange 295

TOTAL 1,111 3,505 876 Sum booked to equity during the year (1,111)Sum taken from equity during the year 655


Net group foreign exchange situation (excluding statement of assets)

(in thousands of currencies) < 1 year 1-5 years > 5 years Total

US dollar (-) USD seller Net situation before hedging (137,700) 120,000 30,000 12,300

NET SITUATION AFTER HEDGING (41,300) 9,000 - (32,300) Hungarian forint(-) HUF sellerNet situation before hedging 22,308,000 - - 22,308,000

NET SITUATION AFTER HEDGING 11,408,000 - - 11,408,000

Note 21 – Cash and banks


Cash and cash equivalents 58,419 44,372Non-overdue accrued interest (1,537) (64)

CASH AT YEAR-END 56,882 44,308

Note 22 – Financial debt

1. Breakdown of types of net debt as at 30 June 2006

(in thousands of euros) < 1 year 1-5 years > 5 years Total

Obligation debt - 97,876 120,274 218,150 Financial leases 1,181 10,468 964 12,613 Other borrowing from banks 14,641 2,189 16,830 Miscellaneous borrowing and financial debt 982 - 982 Accrued interest 1,796 - - 1,796 Ordinary bank accommodations 40,517 - - 40,517 Total gross debt before derivatives 58,136 111,515 121,238 290,888 Derivatives – Passive 7,725 27,926 9,550 45,201 Total gross debt after fair value of derivatives 65,861 139,440 130,788 336,090 Derivatives – Active 9,290 525 606 10,421 Investment securities - - - - Cash assets 44,372 - - 44,372

TOTAL INVESTMENTS 53,662 525 606 54,793

TOTAL NET DEBT 12,200 138,916 130,182 281,297


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Gross debt* (in thousands of euros) 30/06/06

At the beginning of the year 342,907Increase 16,851Repayments, reductions (14,248)Fair value variation (10,418)Translation differences (89)Others 1,087

AT YEAR-END 336,090

* Including derivatives.

2. Breakdown by rates for net financial debt

As at 30/06/05 As at 30/06/06(in thousands of euros) published

Net financial debt 261,436 281,297Before rate hedgingFixed rate 264,947 268,977Variable rate (3,512) 12,320After rate hedgingFixed rate 6,833 16,047Variable rate 254,603 265,250Of which capped variable rate 325,000 300,000

3. Breakdown by currencies of net financial debt

(in thousands of euros after hedging) As at 30/06/05 As at 30/06/06

EUR 229,035 260,918USD 26,268 (10,761)CAD 208 13,055Others 5,926 18,085

TOTAL 261,436 281,297

(-): surpluses.

4. Breakdown of obligation borrowing

(foreign currencies in thousands) Expiry date Notional Currencies Amortisations

Public issue - - - - Private issue 2012 150,000 USD 30 M$/year as of 2008

2016 25,000 EUR 5 M€/year as of 20122017 75,000 EUR 15 M€/year as of 2013

Issues are subject to financial covenants, mainly an anticipatory enforceability clause in the event of default on the repaymentof financial debt (cross default) and in the event of a failure to observe a ratio of long-term debt on invested capital of 0.60maximum.

As at 30 June 2006, the group had observed these covenants.

5. Liquid assets

As at 30 June 2006, the Bonduelle Group held a number of confirmed bank credits with average redemption time over 5 years, totalling €155 million (€124 million at 30 June 2005), of which €92 million at more than five years. The unusedportion at 30 June 2006 was €141 million, as against €124 million at 30 June 2005.

6. Market value of financial assets and liabilities, excluding derivatives

(in thousands of euros) Par value Market value Book value

LIABILITIESDebtBonded debt 257,511 218,150 218,150 Borrowing from banks 16,830 16,830 16,830 Borrowing and miscellaneous financial debt 894 894 894 Accrued interest 1,884 1,884 1,884 Ordinary bank accommodation 40,517 40,517 40,517

TOTAL 317,637 278,275 278,275 Of which fair value hedges 213,769 213,769

Of which cash hedges 4,381 4,381

ASSETSInvestment securities - - - Cash assets 44,372 44,372 44,372

TOTAL 44,372 44,372 44,372

For all other financial assets and liabilities, market value and book value match the par value.



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Note 23 – Staff commitments

1. Defined-contribution system

The group manages staff retirement in accordance with the laws and customs of countries in which group companies carryout their operations.

2. Defined-allowance system

The group is also responsible for certain contracts, mainly for severance pay and long service.

The financial situation of defined-allowance systems is as follows:

(in thousands of euros)

Income statement: pension accruals 2004/2005 2005/2006

Cost of services over the year 1,128 1,046 Effects of discounting 454 235 Expected return on system assets (344) (373)Expected return on repayment rights 0 0 Amortisation of cost of services 0 0 (Gains)/Losses relating to system reduction 115 0 (Gains)/Losses relating to system wind-up 0 0

RETIREMENT CHARGE (PRODUCT) BOOKED 1,353 908

Variation in the discounted value of the obligation 2004/2005 2005/2006

Discounted value of the DBO obligation as at 1 July 10,563 13,313 Cost of services over the year 1,128 835 Effects of discounting 454 235 Contributions utilised 0 0 System modifications (275) 278 System reduction 0 0 System wind-up 0 0 Grouping of operations 0 0 Transfer of activities 0 0 Allowances paid out (608) (441)Actuarial (Gains)/Losses relating to differences in experience 516 275 Actuarial (Gains)/Losses relating to changes in hypotheses 1,535 (906)

DISCOUNTED VALUE OF THE DBO OBLIGATION AT 30 JUNE 13,313 13,589

Variation in fair value of system assets 2004/2005 2005/2006

Fair value of system assets as at 1 July 8,604 9,330 Expected return on system assets 344 373 Employer contributions 35 0 Employee contributions 0 0 System wind-up 0 0 Grouping of operations 0 0 Transfer of activities 0 0 Allowances paid out (587) (63)Actuarial (Gains)/Losses relating to differences in experience 934 (640)

FAIR VALUE OF SYSTEM ASSETS AS AT 30 JUNE 9,330 9,000


(in thousands of euros)

Reconciliation of the sum posted 2004/2005 2005/2006

Net financial position: surplus/(deficit) (3,983) (4,589)Cost of services not booked 0 0 Effect of surplus limitation (asset ceiling IAS 19 #58) (287) (28)(Provision) at 30 June (4,271) (4,617)

NET ASSETS AS AT 30 JUNE 0 0

Actuarial differences 2004/2005 2005/2006

Actuarial (Gains)/Losses generated as at 1 July 0 1,117 Actuarial (Gains)/Losses generated between 1 July and 30 June 1,117 9

Evolution of sums posted over the year 2004/2005 2005/2006

(Passive) Initial net assets (3,526) (4,271)(Charge) Retirement product (1,353) (908)Contributions paid by the employer 608 441 Allowances paid by the employer 0 0 Grouping/Transfer of activities 0 0 Recognition of actuarial differences by equity 0 120 (Passive) Closing net assets (4,271) (4,617)

Actuarial hypotheses at year-end 2004/2005 2005/2006

Discount rate 4.00% 4.75%Expected rate of return on system assets 4.00% 4.00%Rate of evolution of salaries 2.50% 2.50%

Composition of assets as at 30 June:

Hedging assets are handled by Predica for IDR commitments, attached to Predica’s general assets.

Note 24 – Share option plans

BSCA Management may grant certain group directors and managers Bonduelle share purchase options.

Characteristics of the plans

Plan no. 1 Plan no. 2 Plan no. 3 Plan no. 4

Date of Meeting 26/05/98 26/05/98 26/05/98 26/05/98Date of Management Committee Meeting 27/05/98 09/04/99 31/03/00 02/10/00Initial number of shares attributed 65,000 3,800 58,734 2,000Number of shares cancelled (1)

Total number of shares which may be subscribed or purchased 65,000 3,800 58,734 2,000Start of option exercise 27/05/03 09/04/04 31/05/05 02/10/05Expiry date 27/05/04 09/04/05 31/03/06 02/10/06Subscription price 15.25 15.48 15.16 18.30Number of shares subscribed as at 30 June 2006 65,000 3,800 58,734 0


Date of Meeting 26/05/98 12/12/01 12/12/01 12/12/01Date of Management Committee Meeting 01/03/01 24/04/02 28/03/03 05/05/04Initial number of shares attributed 14,150 17,415 29,445 30,850Number of shares cancelled (1) (300) (6,615) (8,730)Total number of shares which may be subscribed or purchased 13,850 17,415 22,830 22,120Start of option exercise 01/03/06 25/04/06 29/03/07 06/05/08Expiry date 01/03/07 25/04/07 29/03/08 06/05/09Subscription price 35.00 57.37 52.30 71.40Number of shares subscribed as at 30 June 2006 5,586 0 0 0

Plan no. 9 Plan no. 10

Date of Meeting 09/06/05 09/05/06Date of Management Committee Meeting 09/06/05 09/05/06Initial number of shares attributed 23,250 45,000Number of shares cancelled (1) (6,780)Total number of shares which may be subscribed or purchased 16,470 45,000Start of option exercise 09/06/05 09/05/06Expiry date 09/06/10 09/05/11Subscription price 61.50 62.52Number of shares subscribed as at 30 June 2006 0 0

(1) Cancellations correspond to shares attributed to those who have departed the group prior to the period of exercise.


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Valuation of option plans

As mentioned in section P of Note 2, employee share purchase options are valued at fair value on the date of attributionon the basis of hypotheses determined by Management. Options attributed for fiscal 2005/2006 were valued on the basisof the following hypotheses:

As at 30/06/05 As at 30/06/06

No-risk interest rate 2.40% 3.70%Estimated term 4 years 4 yearsEstimated volatility 29.23% 26.94%Expected dividend rates 1.74% 1.85%

Note 25 – Other provisions

Unused(in thousands of euros) As at 30/06/05 Provision Utilisation trade-ins Other (1) As at 30/06/06

Commercial risks 3,328 3,228 (1,945) (236) 94 4,468Tax risks (2) 3,831 464 (411) (1,867) 126 2,144Social risks 2,506 878 (1,006) (626) 444 2,195Restructuring 1,511 19 (536) 994Other risks 2,138 989 (597) (117) (661) 1,751

13,313 5,578 (4,495) (2,847) 3 11,552

Ordinary Extraordinary As at 30/06/06

Commercial risks 1,977 2,492 4,468Tax risks (2) 226 1,918 2,144Social risks 706 1,489 2,195Restructuring 994 0 994Other risks 18 1,733 1,751

3,921 7,632 11,552

(1) Translation differences and post-to-post-transfers.(2) Provisions for tax risks correspond to provisioning for ongoing tax controls, with due consideration of analysis of dossiers by the group.

Note 26 – Other extraordinary liabilities


Investment subsidies 9,229 8,459Miscellaneous debt 3,489 975

TOTAL OTHER EXTRAORDINARY LIABILITIES 12,717 9,433


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Note 27 – Suppliers and other creditors


Supplier debts 276,688 291,736Debts on purchases of assets 16,486 19,133Tax and social charges 70,309 70,580Other debt 34,338 26,816

TOTAL SUPPLIERS AND OTHER CREDITORS 397,821 408,265

Note 28 – Other ordinary liabilities


Pre-booked products and other accruals 1,219 1,522

TOTAL OTHER ORDINARY LIABILITIES 1,219 1,522

Note 29 – Sectorial information

Breakdown of sales per sector is determined in accordance with localisation of assets, identical to that arising from loca-lisation of markets.

Transfers between sectors were not significant, and were carried out in accordance with market conditions.

1. Information by monetary zones

Total(in thousands of euros) Euro zone Non-euro zone Eliminations as at 30/06/05

INCOME STATEMENTSales 1,083,851 148,818 (31,789) 1,200,880Inter-sector sales (24,566) (7,224) 31,789 0

TOTAL 1,059,286 141,594 (0) 1,200,880Amortisations and value losses on assets (47,688) (5,334) (53,023)Ordinary operating income 52,003 16,950 68,953Operating income 52,524 16,799 69,323BALANCEExtraordinary assets 367,350 43,527 410,877Of which plant, property and equipment 237,135 41,630 278,765

Ordinary assets 585,181 86,437 671,618

TOTAL CONSOLIDATED ASSETS 952,531 129,964 1,082,495Of which intangible assets and plant, property and equipment 49,202 8,120 57,322

TOTAL CONSOLIDATED LIABILITIES 952,531 129,964 1,082,495


Total as at(in thousands of euros) Euro zone Non-euro zone Eliminations 30/06/06

INCOME STATEMENTSales 1,058,728 165,978 (28,660) 1,196,046Inter-sector sales (23,001) (5,660) 28,660 0

TOTAL 1,035,727 160,319 (0) 1,196,046Amortisations and value losses on assets (43,792) (5,162) (48,954)Ordinary operating income 42,947 27,602 70,548Operating income 39,105 28,652 67,757BALANCEExtraordinary assets 368,334 62,175 430,509Of which plant, property and equipment 245,819 45,732 291,551

Ordinary assets 578,327 100,004 678,331

TOTAL CONSOLIDATED ASSETS 946,661 162,179 1,108,840Of which intangible assets and plant, property and equipment 48,924 12,738 61,662

TOTAL CONSOLIDATED LIABILITIES 946,661 162,179 1,108,840

2. Information by operations

Total as at(in thousands of euros) Canned Frozen Chilled Others 30/06/05

INCOME STATEMENTSales outside group 571,777 285,280 343,823 1,200,880

TOTAL 571,777 285,280 343,823 0 1,200,880BALANCEGoodwill 1,699 239 72,752 863 75,553Brands 20,215 1,000 21,215Investment intangible assets, plant,property and equipment 21,398 12,537 12,986 10,402 57,322

Total as at(in thousands of euros) Canned Frozen Chilled Others 30/06/06

INCOME STATEMENTSales outside group 574,442 276,817 344,786 1,196,046

TOTAL 574,442 276,817 344,786 0 1,196,046BALANCEGoodwill 1,699 239 72,511 863 75,312Brands 20,215 1,000 21,215Investment intangible assets,plant, property and equipment 22,858 19,159 13,120 6,524 61,662


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Note 30 – Conditional commitments and eventualities


Outgoing commitments Outgoing guarantees and endorsements (net of utilisation) 5,378 2,494

Incoming commitments Incoming guarantees and endorsements (net of utilisation) 3,729 1,989

EnvironmentGroup activities did not generate any significant environmental liabilities.The group regularly deals with charges caused by restoration of industrial sites which have been closed down.Greenhouse gases: in the absence of defined IFRS accounting, greenhouse gas quotas are not covered in the consolidated accounts.Bonduelle observes the emissions ceiling of 268,524 TeqCO2 attributed to the group as of 1 January 2005.For the period 2005/06, the volume of emission was 59,002 TeqCO2. 30,506 TeqCO2 were transferred on the market during May 2006.

Purchase and sale options on Aliments Carrière stock:A sales option was arranged in relation to Aliments Carrière stock by shareholders for all stock held between 01/07/2007 and 15/08/2007 - i.e. 75%of capital maximum.Bonduelle has a purchase option for 60% of share capital over the same option period.

Note 31 – Transactions with related parties

During fiscal 2005/2006, Pierre et Benoît Bonduelle SAS was paid the sum of €828,050 by way of remuneration asmanagers of Bonduelle SCA, and €12,800 in attendancefees were paid to the members of the SupervisoryCommittee.

The current account payable with Pierre et Benoît BonduelleSAS was €388,000.

There were no other commitments to the company.

Note 32 – Post-closure events

In June 2006, the Bonduelle Group purchased a minorityshareholding in the Aliments Carrière Group, a Canadianmarket leader in terms of canned and frozen vegetables,with over 70% of market share.

Sales over 2006/2007 (closed at the end of April) shouldbe almost €230 million, of which 40% was accounted forby canned produce (Canada) and 60% frozen produce(Canada and the United States).

As per the terms of the agreement signed in June, on 1 July 2006, the group purchased further stock, and thiswill raise its share to 25% by October 2006.

In July 2006, the Bonduelle Group purchased frozen ope-rations (excluding ice cream) from Unilever in Spain via itssubsidiary Bonduelle Surgelé International.

This transaction took effect on 1 July 2006, and mainlyconcerns the Salto brand, whose sales will bring Bonduellean additional annual turnover of €10 million.

Note 33 – Transfer to IFRS

A. Context of the publication

In application of EC regulation 1606/2002 adopted on 19 July 2002 in relation to international regulations, theBonduelle Group must publish, as of the year beginning 1 July 2005, its consolidated accounts as per the inter-national IAS/IFRS accounting standards as approved by theEuropean Union, with comparative figures for the year closed at 30 June 2005 drawn up to the same reference,with the exception of IAS 32/39 and IFRS 4 applied as of1 July 2005.

The principles to be used to draw up the IFRS openingbalance sheet at 1 July 2004, divergences with the mainFrench accounting principles applied previously and their

effects on figures on the opening sheet, closing sheet andincome for 2004/2005 are set out below.

Financial information 2004/2005 on the impact in figuresof transfer to IFRS regulations was drawn up by applyingto data the regulations and interpretations which the groupdeems must be applied to draw up its comparative conso-lidated accounts at 30 June 2005. The basis of preparationfor financial information in relation to 2004/2005 thereforearises:

- from IFRS regulations and interpretations which must beapplied at 30 June 2006, as known on that date,

- from options held and exemptions used by the group todraw up its first consolidated IFRS accounts at 30 June2006.


B. Comparisons of consolidated shareholders’ equity, excluding IAS 32-39

Comparisons of shareholders’ equity drawn up as per French regulations and shareholders’ equity drawn up as per IFRSregulations were as follows at 1 July 2004 and 30 June 2005:

(in thousands of euros) 01/07/04 30/06/05

Consolidated equity as per French regulations 285,403 310,409Restatement of charges to be distributed (525) (265)Restatement of plant, property and equipment 3,010 922Restatement of employee benefits (988) 215Reclassification of subsidies in extraordinary liabilities (6,798) (8,714)Transfer of Sud-Ouest Légumes and Bonmaïs to fully consolidated system 5,431 (3,668)Restatement of shareholders’ equity (4,080) (4,842)Restatement of translation differences 3,901 3,259Removal of amortisation of translation differences 6,210Removal of amortisation of goodwill 425Others (10) 48Impact of deferred tax on IFRS restatements 4,843 6,062Total consolidated equity as per IFRS regulations 290,187 310,061

C. Comparisons of consolidated net income

Comparisons of consolidated net income drawn up as per French regulations and consolidated net income drawn up asper IFRS regulations were as follows over the year 2005:


Consolidated net income as per French regulations 32,360Group income 33,122Income outside group (762)Restatement of charges to be distributed 245Restatement of plant, property and equipment (2,095)Restatement of employee benefits 99Transfer of Sud-Ouest Légumes and Bonmaïs to fully consolidated system (314)Restatement of shareholders’ equity 23Restatement of translation differences (655)Removal of amortisation of translation differences 6,210Removal of amortisation of goodwill 425Charges relating to share purchase options (144)Others 100Impact of deferred tax on IFRS restatements 812Consolidated net income as per IFRS regulations 37,066Group income 38,046Income outside group (980)


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D. Application of IAS 32-39 regulations as at 1 July 2005

Opening sheet Opening sheet Opening sheet 01/07/2005, 30/06/2006,

01/07/2005, Restatements including including(in thousands of euros) excluding IAS 32-39 IAS 32-39 Reclassifications IAS 32-39 IAS 32-39

ASSETSExtraordinary assets 405,723 2,036 3,119 410,877 430,509Of which:Other financial assets 2,053 5,729 7,782 17,236Of which hedging derivatives 5,730 5,730 1,131

Other long-term assets 3,168 (3,693) 3,038 2,513 1,598Of which pre-booked charges (bank fees) 3,693 (3,693) 0 207

Other extraordinary assets 400,502 81 400,582 411,675Ordinary assets 671,380 3,275 (3,038) 671,618 678,331Of which:Other ordinary assets 5,617 (865) 4,752 4,561Of which pre-booked charges (bank fees) 5,326 (1,116) 4,210 4,081

Other ordinary financial assets 0 4,140 4,140 9,290Of which interest rate and exchange derivatives 0 4,140 4,140 9,290

Other ordinary assets 665,763 0 (3,038) 662,726 664,480

TOTAL ASSETS 1,077,103 5,311 81 1,082,495 1,108,840

LIABILITIESTotal shareholders’ equity 310,061 (6,387) (138) 303,536 333,074Of which:Equity, group share 295,966 (6,387) (138) 289,441 312,324Of which net taxation impact, IAS 32-39 0 (6,387) (6,387) 0

Extraordinary liabilities 303,699 5,695 219 309,615 293,572Of which:Borrowing and financial debt 271,289 9,651 280,940 269,959Of which obligation debt at fair value 258,115 (16,708) 241,407 218,150

Of which fair value hedging derivatives 0 26,359 26,359 37,476

Other provisions 7,556 (525) 7,031 7,632Of which provision for exchange losses 525 (525) 0 0

Deferred tax – liabilities 8,086 (3,431) 4,655 1,931Other extraordinary liabilities 16,770 219 16,989 14,050Ordinary liabilities 463,341 6,003 469,344 482,194Of which:Borrowing and bank accommodation, less than 1 year 55,964 6,003 61,967 66,131Of which interest rate and exchange derivatives 0 6,003 6,003 7,725

Other ordinary liabilities 407,377 0 407,377 416,063

TOTAL LIABILITIES 1,077,103 5,311 81 1,082,495 1,108,840

E. Explanation of the main differences

The main differences between French regulations and IFRSregulations are as follows:

1. Differences in relation to IFRS 1 – Description of options relating to initialadoption of international regulations for financial information.

IFRS 1 deals with first-time applications of IFRS 1. This regu-lation offers “first-timers” a number of exceptions to theprinciples of total retroactivity in the application of IFRS.

These options are as follows:

a) Company groupings. IFRS 1 provides the option of notrestating company groupings prior to the date of tran-sition, 1 July 2004. The group chose this option, andpurchases of companies prior to 1 July 2004 were notrestated on the IFRS opening balance sheet.

b) Assets. IFRS 1 provides the option of assessing, at thedate of transition, property, plant and equipment, invest-ment real estate and certain intangible assets at fair value- fair value is taken as their presumed cost.

The group did not choose the option of reassessingassets at fair value at the date of transition.

c) Actuarial differences relating to retirement commitments.IFRS 1 provides the option of booking, at the date oftransition, all accumulated actuarial differences relatingto defined-allowance retirement systems. The groupchose this option, and this reduced provisions for reti-rement commitments by €0.2 million at 1 July 2004, withthe counterparty of an increase in shareholders’ equityof the same amount.

d) Accumulated translation differences. The group choseto zero accumulated translation differences in sharehol-ders’ equity. The differences, which are generated bythe consolidation process for entities using a currencyother than the euro, represented latent exchange products of €1.4 million at 1 July 2004.

Zeroing of translation differences had no impact on totalgroup equity at 1 July 2004. Moreover, only translationdifferences generated as of this date will be posted onthe income statement in the event of transfer of the shareholdings to which they relate.

e) Stock option plans. As per the provisions of first-time application of IFRS 2, the group chose the option of restating stock option plans issued after 7 November 2002, for which the rights were not purchased at 1 July 2004.

2. Main regulations applied

a) Sales and commercial cooperation expenditure.In consolidated accounts drawn up in accordance withFrench regulations, commercial cooperation expendi-ture paid out by the group to its distributing customersis generally posted as promotional costs as part ofconsummated purchases.

In application of IAS 18, Products of ordinary operations,the costs of commercial services reduce turnover. In theaccounts drawn up to IFRS, sales and commercial coope-ration expenditure were therefore both reduced byaround €225 million at 30 June 2005 with respect to theconsolidated accounts as published. This reclassificationhad no impact on operating income or on consolidatednet income.

b) Presentation of exceptional items. In consolidatedaccounts drawn up in accordance with French regula-tions, exceptional items are excluded from operatingincome, and presented on a separate line in the incomestatement.

In application of IAS 1, Presentation of financial state-ments, exceptional items cannot be presented on aseparate line in the income statement. Certain excep-tional items were included either in ordinary operatingincome under “Other operating charges and products”,or in operating income under “Non-recurring items”.

Ordinary operating income excludes major non-recurringitems which are likely to modify appreciation of performance. It comprises capital gains or losses ontransfer of operations and on significant consolidatedshareholdings and value losses reported on intangibleassets (including goodwill) relating to consolidated shareholdings.

Capital gains or losses on transfer and also value lossesrelating to equity-method shareholdings are presentedin “Group share in the income of equity-method companies”. Capital gains or losses on transfer and valuelosses relating to non-consolidated shareholdings areposted as financial income.

c) Presentation of the consolidated balance sheet. In theaccounts drawn up in accordance with French regula-tions, the consolidated balance sheet is presented in theorder of liquidity of assets and liabilities. For applicationof IAS 1, Presentation of financial statements, assets andliabilities must be submitted separately as ordinary andextraordinary items.

Application of IAS 1 had no significant impact on thepresentation of the group’s consolidated statement.


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d) Presentation of the cash flow table. Differences between the cash flow table for 2004/2005 drawn up asper IFRS and the cash flow table drawn up as per Frenchregulations were of little significance. The main restatementin relation to cash flow was in relation to reclassificationof shareholders’ equity to regularise the market, andstock held as purchase options classified as investmentsecurities as per French regulations, and reclassified tothe cost of shareholders’ equity in accordance with IFRS.Thus the opening cash flow as at 1 July 2004 decreasedfrom €54.0 million to €49.3 million, and year-end cashflow at 30 June 2005 decreased from €63.2 million to€56.9 million.

e) Property, plant and equipment. Determination of incoming cost, as defined in IFRS regulations, is as perthe general practices conducted by the group.

In accordance with French regulations, the group reportsprovisions for major repairs, and to cover expenditurefor renewing its assets. Since the latter is not compa-tible with IAS 37, it was restated in accounts at 1 July2004. The expenditure corresponding has been bookedas assets if it met the definition of asset components, asper IAS 16.

In due consideration of the new definition of the lifespan of an asset, and following analysis of utilisation periods specific to our assets, by technical teams, the group has reviewed the amortisation plan based on utilisation periods. This new period was applied inprospective fashion as of 1 July 2004.

f) Investment subsidies. The group receives mainly subsidies relating to assets, and books these entirely as shareholders’ equity when the subsidy is attributed.IAS 20 does not use this approach for booking subsidies relating to assets, and requires them to be booked as a loss to assets, or as other ordinary liabilities. The groupchose the latter method, and so it reclassified these itemson the balance sheet at 1 July 2004.

g) Intangible assets. In the accounts drawn up in accor-dance with French regulations, goodwill is identifiableassets, presented as “Other intangible assets” on theconsolidated balance sheet.

In application of IAS 38 as reviewed for intangible assets,goodwill does not meet the criteria for booking an identifiable asset, and must therefore be assimilated with goodwill. As at 1 July 2004, the group thereforereclassified its goodwill from “Intangible assets” to“Purchase differences” for a total of €2 million.

h) Deferred tax. In the accounts drawn up in accordance withFrench regulations, deferred tax is classified on incomestatements as ordinary or extraordinary, in accordance withthe item for which the deferred tax entry has been made.

In accordance with French regulations, the group set outassets and liabilities separately in the notes to the conso-lidated accounts and the net balance.

In application of IAS 12, Tax on income, all assets andliabilities in relation to deferred tax must be classifiedas extraordinary, and set out on a different line on theconsolidated balance sheet.

i) Payments based on shares. In the accounts drawn up inaccordance with French regulations, subscription optionsor share purchase options were not valued, and had noimpact on the consolidated income statement.

In application of IFRS 2, Payments based on shares, subscription options or share purchase options as agreedwith employees must be assessed at fair value, and the fairvalue must be booked on the income statement for theperiod during which employees purchased the share rights.Fair value of the options was determined using the Black& Scholes assessment method on the basis of hypothesesdetermined by Management. The group revalued andrestated all options granted after 7 November 2002 whichcould not be taken up at 1 July 2004.

Application of IFRS 2 had no impact on the consolidatedincome statement or on group equity. The total sum ofthe charge in 2004/2005 for share purchase options was€0.072 million. This charge has the counterparty of anincrease in shareholders’ equity of the same amount.

j) Amortisation and depreciation of assets. The IFRS prin-ciples require that long-term assets be subjected to amor-tisation in relation to their life term and a value-loss testcarried out, and non long-term assets are not amortised,and undergo the value test at least once a year. A loss invalue is booked when their recoverable value becomesless than their book value.

The depreciation test provided for in French regulationswas adapted for transfer to IFRS. Thus purchase diffe-rences were broken down into cash generation units(UGT). The notion of UGT is assimilated with a techno-logy which forms part of the main operations listed insectorial information.

Depreciation is reported if the current value of expectedcash flow after taxes is less than the value booked on theincome statement for the cash generation unit concerned.


Determination of the current value using the cash flowdiscount method is carried out on the basis of themedium and long-term plans used by group manage-ment. The discount rate corresponds to the weightedaverage cost of Bonduelle Group capital.

The test did not show any value losses on goodwill.Allowances for amortisations booked on the consolidatedincome statement drawn up in accordance with Frenchregulations were cancelled in the income statements drawnup in accordance with IFRS (€6.2 million as at 30 June2005).

k) Recognition and assessment of shareholdings withour partners at south-west. In the accounts drawn up in accordance with French regulations, the groupconsolidated Sud-Ouest Légumes SA and Bonmaïs SAusing the proportionate consolidation method.

In application of the conceptual stipulation of the IASBin relation to the principles for assessment of assets andthe IAS 27 regulation, Consolidated financial statementsand reporting of shareholdings in subsidiaries, and within

the perspective of reorganisation carried out at the Sud-Ouest companies at 1 July 2005, the group decidedto fully consolidate the two companies at 1 July 2004 to draw up the accounts restated at 30 June 2005, whichwere compared with the consolidated accounts at 30 June 2006.

100% full consolidation at 1 July 2004 in relation to transferto the full-consolidation method was +€20.6 million overthe total, of which €14.7 million over long-term assets.

l) Application of IAS 32-39 to financial instruments.IFRS 1, first application of IFRS, allows first-time users in2005 to choose the date of application of regulations IAS 32and IAS 39 in relation to financial instruments – 1 July 2004or 1 July 2005.

The group decided to apply IAS 32-39 regulations at 1 July 2005, and so it did not restate financial statementsat 1 July 2004.

As at 1 July 2005, first-time application of the IAS 39 regulation had a gross negative impact before tax of €9.8 million on the group’s consolidated equity.


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F. Income statement, balance and table showing variation in shareholders’ equity

The table below shows the 2005 figures for the income statement drawn up in accordance with French regulations andthe income statement drawn up in accordance with the IFRS:

30/06/05

(in thousands of euros) According to French regulations IFRS restatements According to IFRS

Sales 1,425,782 (224,903) 1,200,880Purchases and external charges (1,059,297) 221,198 (838,099)Staff charges (236,837) (5,121) (241,958)Amortisations (48,455) (4,567) (53,022)Other operating charges and products (10,864) 12,017 1,153Ordinary operating income 70,329 (1,376) 68,953Non-recurring items (6,210) 6,580 370Operating income 64,119 5,204 69,323Financial products and charges (8,674) (1,370) (10,044)Group share in income from equity-method companies 11 0 11Income before tax 54,456 3,834 59,290Profit tax (23,096) 872 (22,224)Net income for consolidated unit 32,360 4,706 37,066Group income 33,122 4,924 38,046Non-group income (762) (218) (980)

The table below shows a comparison of operating income drawn up in accordance with French regulations with operatingincome drawn up in accordance with IFRS for 2005:


Operating income as per French regulations 64,119Restatement of charges to be distributed 245Sud-Ouest Légumes and Bonmaïs transfer to full consolidation (32)Restatement of plant, property and equipment (1,948)Products from ordinary operations 261Restatement of staff benefits 99Removal of amortisation of translation differences 6,210Removal of amortisation of goodwill 525Charges relating to share purchase options (144)Others (12)Operating income as per IFRS 69,323


The table below shows a comparison of the consolidated statement drawn up in accordance with French regulations withthe consolidated statement drawn up in accordance with IFRS as at 30 June 2005:

30/06/05

(in thousands of euros) According to French regulations IFRS restatements According to IFRS*

ASSETSIntangible assets 32,273 (1,474) 30,799Goodwill 67,371 8,183 75,553Net property, plant and equipment 264,111 14,654 278,765Equity-method stock 73 73Other financial assets 2,180 (128) 2,052Deferred tax 19,599 (4,288) 15,311Other long-term assets (191) 3,359 3,168Extraordinary assets 385,416 20,305 405,721Inventories 300,290 (3,967) 296,322Clients and other receivables 321,249 (10,885) 310,364Tax receivables 658 0 658Other ordinary assets 11,111 (5,494) 5,616Other ordinary financial assets 4,842 (4,842) 0Cash and cash equivalents 58,418 2 58,419Ordinary assets 696,567 (25,187) 671,380

TOTAL ASSETS 1,081,983 (4,882) 1,077,101

LIABILITIESCapital 56,000 0 56,000Premiums linked to shares 22,545 0 22,545Other reserves 2,290 (1,385) 905Accumulated income 221,655 (5,139) 216,516Shareholders’ equity, group share 302,490 (6,524) 295,966Minority interests 7,920 6,175 14,095Consolidated equity 310,409 (349) 310,061Borrowing and financial debt 271,014 275 271,289Employee commitments 2,484 1,568 4,053Other provision 14,781 (7,225) 7,556Deferred tax 18,435 (10,351) 8,084Other extraordinary liabilities 3,542 9,176 12,717Extraordinary liabilities 310,256 (6,557) 303,699Ordinary financial debt 53,683 2,281 55,964Ordinary provision 6,282 6,282Suppliers and other payables 401,096 (3,275) 397,821Tax debt 2,055 0 2,055Other ordinary liabilities 4,483 (3,265) 1,219Ordinary liabilities 461,318 2,024 463,341

TOTAL LIABILITIES 1,081,983 (4,882) 1,077,101

(*) Excluding IAS 32-39 – Note 33D.


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The table below shows variation in shareholders’ equity between 1 July 2004 and 30 June 2005:

Shareholders’Translation Other Accumulated equity, group Minority Total

(in thousands of euros) Capital Premiums reserves reserves results share interests equity

Equity as at1 July 2004 56,000 22,545 947 189,036 268,528 21,659 290,187Income 30/06/2005 38,046 38,046 (980) 37,066Dividends paid (10,030) (10,030) (8,784) (18,813)Items booked directly to equity (144) (144) (144)Difference in translation reserve 152 152 109 261Perimeter variance 1,511 1,511Others (194) (393) (588) 579 (9)Equity as at 30 June 2005 56,000 22,545 (42) 947 216,516 295,966 14,095 310,061


Note 34 – List of group companies

Group companies were consolidated as follows:

1. Fully consolidated

% interest % control % interest30/06/05 30/06/06 30/06/06

FRANCEBonduelle SCA Bonduelle SA 100% 100% 100%Bonduelle Conserve International SAS (ex-Bonduelle Grand Public SAS) 100% 100% 100%Bonduelle Surgelé International SAS (ex-Bonduelle Food Service SAS) 100% 100% 100%Bonduelle Development SAS 100% 100% 100%Bonduelle Food Service 100% 100%BPL Légumes SAS (absorbed by Bonduelle Conserve International SAS) 100%Duvet SARL 100% 100% 100%Bonduelle Sud Europe SNC 100% 100% 100%Bonduelle Frais International SAS (ex-Bonduelle Frais Investissements SAS) 97.61% 98.50% 98.50%Bonduelle Frais France SAS (ex-Bonduelle Frais France SA) 97.61% 100% 98.50%Revoisson SCI 97.61% 100% 98.50%Bonduelle Traiteur International SAS (ex-Bonduelle Traiteur Appetifrais SAS) 97.61% 97.61% 97.61%Sud Ouest Alliance - Soleal (ex-Sud-Ouest Légumes SA) 50% 100% 36.95%Bonmaïs SA (absorbed by Soleal) 50%Fitrapal SA (absorbed by Bonduelle Traiteur International SAS) 97.61%Bonduelle Traiteur Caugant SA (absorbed by Bonduelle Traiteur International SAS) 97.61%

OVERSEASBonduelle GmbH, Germany 100% 100% 98.50%Bonduelle Österreich, Austria 100% 100% 98.50%Bonduelle Great-Britain, United Kingdom 100% 100% 99.98%Nieuwe Marie Thumas, Belgium (absorbed by Bonduelle Belgium) 100%Bonduelle Belgium, Belgium 99.98% 100% 99.98%Bonduelle Nordic, Denmark 100% 100% 100%Bonduelle España, Spain 100% 100% 100%Bonduelle Iberica, Spain 100% 100% 100%Bonduelle Italia, Italy 99.96% 100% 99.96%Bonduelle Nagykörös, Hungary 100% 100% 100%Bonduelle Nederland, Netherlands 100% 100% 100%Bonduelle Polska, Poland 99.75% 100% 100%Bonduelle Ceska Republika, Czech Republic 100% 100% 100%Bonduelle Portugal, Portugal 99.99% 100% 99.99%Bonduelle Slovensko, Slovakia (transfer Bonduelle Ceska) 100%Bonduelle Incorporated, USA 100% 100% 100%Bonduelle Fresco Italia (ex-Ortobell), Italy 97.61% 100% 98.50%Bonduelle Argentina, Argentina 100% 100% 100%Primeurop Argentina, Argentina 100% 100% 100%Bonduelle Do Brasil Produtos Alimenticios, Brazil 100% 100% 100%Bonduelle Kuban (ex-Bonagri), Russia 65% 65% 65%


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1. Fully consolidated (continued)

% interest % control % interest30/06/05 30/06/06 30/06/06

Frudesa, Spain 100% 100% 100%Bonduelle Frische GmbH, Germany 97.61% 100% 98.50%Bonduelle Central and Eastern Europe GmbH, Austria (wound up) 100%Bonduelle Food Service Italia, Italy 100% 100% 100%Bonduna, Hungary (absorbed by Bonduelle Nagykörös) 100%BDV Hungary Trading, Hungary 100% 100% 100%Bonduelle Russtrade, Russia (absorbed by Bonduelle Kuban) 65%Vita Holding, Germany (absorbed by Bonduelle Frische) 97.61%Vita GmbH, Germany (absorbed by Bonduelle Frische) 97.61%Vita Reutlingen, Germany (absorbed by Bonduelle Frische) 97.61%Vita Wanzleben, Germany (absorbed by Bonduelle Frische) 97.61%Fresco Italia (ex-Ortofrutta Salvi), Italy 29.28% 30% 29.99%Bonduelle Investment Company, Netherlands 100% 100% 100%S.F.B. Incorporated, Canada 100% 100%Quebec Incorporated, Canada 100% 100%OP OASI, Italy 100% 53.19%B.F.P. GmbH, Germany 100% 98.50%

2. Equity method

OVERSEASBonduelle Moscou, Russia (wound up) 100% - -Frikoni, Germany 48.81% 50% 49.25%


Auditors’ Report


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Dear Shareholders,

In performance of the task entrusted to us by your GeneralMeeting, we have audited the consolidated financial statements of Bonduelle SCA for the year ending 30 June2006, as presented in this report.

The annual financial statements have been approved bythe Management. It is our duty to express an opinion on these financial statements, on the basis of our audit.The accounts have been drawn up for the first time in accordance with IFRS as adopted in the European Union,and contain, by way of comparison, information relating to 2004/2005 to the same criteria, with the exception ofregulations IAS 32 and IAS 39 which, in accordance withthe option provided by regulation IFRS 1, have only beenapplied by the company as of 1 July 2005.

I. Opinion on the consolidated accounts

We have conducted our audit in accordance with Frenchprofessional auditing standards which require us to make every endeavour to secure reasonable assurance thatthe consolidated financial statements are free of materialmisstatements. An audit consists in examining on a sampling basis the evidence supporting the amounts anddisclosures in these financial statements. It also consists in assessing the accounting principles used as well as the significant estimates agreed upon for the financial statements and evaluating their overall presentation. We believe that our audit provides a reasonable basis forthe opinion expressed hereafter.

We certify that the consolidated financial statements are,with respect to the IFRS standards as adopted in theEuropean Union, a true and fair view of the assets and liabilities, financial position and incomes of the companiesincluded within the scope of consolidation.

II. Justification of our assessments

In accordance with article L. 823-9 of the FrenchCommercial Code (Code de commerce) relating to the justification of our assessments, we wish to draw your attention to the following items:• For first-time application of the IFRS in consolidated

financial statements for the year 2005/2006, comments

on the table showing variation in shareholders’ equity andnotes 1 and 33 attached provide all the required information in relation to the accounting changes enactedas of 1 July 2004 and the measures taken to ensure comparability of the IFRS accounts submitted for2004/2005 and 2005/2006.

• Notes 2.A, 2.J and 9.3 in annex present the group’smethod for recognising goodwill, other intangible assetswith an undefined service life and deferred taxes, andthis method involves estimates.

We have verified the suitability of this method, and evaluated the assumptions on which these estimates are based, reviewed calculations made by the group andexamined procedures by Management for approving theseestimates.

• Notes 2.L and 25 in annex present the method appliedby the group to measure ordinary and extraordinary provisions, and this also involves the use of estimates.

Our work has involved appraisal of the information andhypotheses on which these estimates were based, review-ing the calculations made by the company, comparing theestimates for the previous financial periods with the corresponding results and examining the procedures bywhich these estimates were approved by Management.

The appraisals thus conducted form part of our audit pro-cedure for the consolidated financial statements taken asa whole, and therefore contributed to the formulation ofour opinion expressed in the first part of this report.

III. Specific procedures

In addition, we have also verified the information providedin the group’s Executive Board report. We have no commentsregarding their fair presentation and consistency with theconsolidated financial statements.



KPMG Audit Mazars & GuérardDivision of KPMG S.A.Christian de Brianson Philippe Bouillet

Associate Associate


Income statement

As at 30/06/05 As at 30/06/06(in thousands of euros) Notes 12 months 12 months

Write-back of provisions and depreciation, transfers of expenses Other operating income 2Operating income 2Other purchases and external expenses 1,450 1,301Taxes and duties 5 22Provisions on current assets 22Other expenses 30 25Operating expenses 1,485 1,370Operating profit (1,485) (1,368)Transferred lossInvestment income 29,480 49,365Income from other marketable securities and fixed asset receivablesOther interest and similar income 1,302 533Write-back of provisions and transfers of expenses 685 347Gains from the sale of marketable investment securities 1,645Financial income 33,112 50,245Provisions on financial assets 239 80Interest and similar expenses 451 321Financial expenses 690 401Net financial income 9 32,422 49,844Pre-tax income before extraordinary items 30,937 48,476From management operationsFrom capital transactions 4,089 106Write-back of provisions and transfers of expenses 3,384 87Extraordinary income 10 7,473 193From management operations 41 30From capital transactions 3,713 55Extraordinary expenses 11 3,754 85Extraordinary profit or loss 3,719 108Income tax 13 (667) (8,605)

NET INCOME 35,323 57,189

Individual financial statements


Balance sheet

Assets30/06/05 30/06/06

Depreciation(in thousands of euros) Notes Net Gross and provisions Net

Plant, property and equipment 2 12 42 30 12Land 12 12 12Property, buildings 30 30Long-term investments 3 208,738 209,493 209,493Holdings 207,774 207,770 207,770Advances to subsidiaries 4 142 142Other long-term investment debt securities 5LoansOther long-term investments 959 1,581 1,581Fixed assets 208,750 209,535 30 209,505Receivables 2,439 37,197 22 37,175Trade notes and accounts receivable Other receivables 4 2,439 37,197 22 37,175Marketable securities 5 4,842 6,358 6,358Cash and cash equivalents 505 17 17Prepaid expenses 22 1 1Current assets 7,808 43,573 22 43,551

TOTAL ASSETS 216,558 253,108 52 253,056

Liabilities30/06/05 30/06/06

Before Before (in thousands of euros) Notes distribution distribution

Shareholders’ equity 6 193,393 241,423Share capital 56,000 56,000Share premiums 22,545 22,545ReservesRevaluation surplus 947 947Legal reserve 5,600 5,600Statutory reserves 46,702Other reserves 3,651 50,353Retained earnings 22,625 48,789Profit for the year 35,323 57,189Contingent liability 7 4,363 6,408Debts/payables 18,802 5,225Borrowings and debts with credit institutions 8 1,371 1,807Trade notes and accounts payable 8 197 145Tax and social security liabilities 8 206 2Other debts 8 17,028 3,271

TOTAL LIABILITIES 216,558 253,056

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Cash flow statement

As at 30/06/05 As at 30/06/06(in thousands of euros) 12 months 12 months

Operating activitiesNet profit for the period 35,323 57,189Allowances for depreciation and amortisationAmortisation of investments and other non-current assets (446) (267)Provisions for tax liabilities (385) 1,884Cash flow from operating activities 34,492 58,806Capital gains from the disposal of assets (592) (50)Free cash flow 33,900 58,756Change in trade and other receivables 59,339 (34,737)Change in provisions for risks and charges (3,384) 161Change in trade and other payables 11,010 (14,013)Change in interest accrued on loans (23) (18)Change in working capital requirements 66,942 (48,607)Net cash flow provided by operating activities 100,842 10,149Investing activitiesAcquisition of investments and other non-current assets (89,272) (16,005)Proceeds from the sale of fixed assets - Net cash flow provided by operating activities 5,738 15,350Net cash flow used in investing activities (83,534) (655)Financing activitiesDividends (10,028) (9,313)Dividends payableIncrease in shareholders’ equity (1,264) 154Proceeds from new loans (including current bank lines)Repayment of loans (7,662) 436Net cash provided by financing activities (18,954) (8,723)Change in cash and cash equivalents (1,646) 771Cash and cash equivalents at year end 5,604 6,375Cash and cash equivalents at beginning of year 7,250 5,604

NET CHANGE IN CASH AND CASH EQUIVALENTS (1,646) 771

Note 1 – Methods used in preparingthe financial statements

A) Company activities

Bonduelle is a financial holding company, the corporate purpose of which is to acquire and manage all securities, acquire equity or other interests in commercial, industrial, financial, investment and agricultural companies and busi-nesses.

B) Significant accounting policies

The balance sheet and income statement have been prepared in compliance with the provisions of French law.

General accounting methods have been applied in compliance with the conservatism principle and the following underlying assumptions:

- going concern concept,

- consistency principle,

- time period concept,

and in compliance with general rules governing the preparation and presentation of annual financial statements.

Since 1 January 2002, the company has applied the provi-sions of CRC (Comité de la Réglementation Comptable) regulation 2000.06 governing liabilities.

As from this year, it will be applying the provisions of CRC regulations 2004-06 of 23 November 2004 governingthe definition, accounting and valuation of assets as well as CRC 2002-10 of 12 December 2002 governing the amortisation of assets. The application of these regulationshas had no impact on the year’s financial statements.

The historical cost method was used as the basic methodfor assessing the elements recorded in the financial statements.

The main accounting principles and methods used are asfollows:

1. Plant, property and equipment

Property, plant and equipment are recorded at acquisitionor contribution costs.

Depreciation is calculated using the straight-line method based. The normal useful life retained for buildings is 10 years.

2. Long-term investments

Equity interests and other long-term investment debt securities are recorded at acquisition cost.

A provision is recorded when the value in use is less than the carrying value. Value in use of such investments is determined on the basis of different items such as networth, the existence of unrealised capital gains and the forecasted earnings prospects approved by theManagement.

3. Receivables

Receivables are recorded under assets at face value. A provision is recorded, when necessary, to cover eventualcollection risks.

4. Contingent liability

Contingent liability is assessed by the Management to meetthe group’s current obligations (legal or implicit), in compliance with French accounting standards. Provisionsfor lawsuit contingencies are assessed on the basis of claims by third parties and revised when applicable accor-ding to the company’s legal defence.

A provision for risk is created for treasury shares owned under stock option plans if the price at which they are allocated to employees is lower than the purchase price ofthe shares.

5. Translation of foreign currency items

Receivables and payables in foreign currency are trans-lated at the year-end exchange rate. Resulting translationdifferences are recorded in the balance sheet under translation adjustments.

6. Marketable securities

Marketable securities are recorded at their acquisition cost.

A provision is recorded when the value in use is less thanthe carrying value.


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Notes to the individual financial statements


Note 2 – Plant, property and equipment

Changes in gross values and accumulated depreciation break down as follows:

Acquisition Merger and Disposals(in thousands of euros) As at 30/06/05 or allowance contribution or reversals As at 30/06/06

GROSS VALUESLand 12 12Buildings 30 30

42 42DEPRECIATIONLandBuildings 30 30

30 30NET VALUESLand 12 12Buildings

12 12

Note 3 – Long-term investments

Changes in gross values and provisions break down as follows:

Gross values Reimbursement Gross values(in thousands of euros) as at 30/06/05 Acquisition Disposal and other changes (1) as at 30/06/06

Equity interests 207,797 (30) 207,767Bonduelle SA 207,770 207,770Bonduelle Investment Company (BIC) 22 (22) 0Other group securities 4 (4) 0Other capitalised accounts receivable 143 143Other long-term investments 23 (19) 4Participex 4 (4)Loans 19 (19)Treasury shares held under a liquidity contract 1,176 16,005 (14,146) (1,454) 405

208,996 16,005 (14,176) (1,330) 208,319

Gross values Provision Net values(in thousands of euros) as at 30/06/06 as at 30/06/2005 Provision Write-back as at 30/06/06

Equity interests 207,771 207,771Other capitalised accounts receivable 143 143Other long-term investmentsTreasury shares held under a liquidity contract 1,581 240 240 1,581(1)

209,495 240 240 209,495Value at year end:Treasury shares 1,747

(1) Treasury shares that are not held under stock options and classified as marketable securities as at 30 June 2005 were reclassified as long-term assets as at 30 June 2006.


Note 4 – Statement of receivables

(in thousands of euros) Gross amount 1 year +1 year

Fixed assetsAdvances to subsidiariesCurrent assetsOther accounts receivables 8,980 8,980including accrued income

Group and shareholders 28,195 28,195including accrued income

Other 22 22

37,197 37,197

Note 5 – Marketable securities

As at 30/06/05 As at 30/06/06

Other treasury shares(1) 82Treasury shares held under stock option plans 5,017 6,358Depreciation of treasury shares held under stock option plans (257)

4,842 6,358Value at year end:Of treasury shares held under stock option plans 7,096 9,052

(1) Treasury shares that are not held under stock options and classified as marketable securities as at 30 June 2005 were reclassified as long-term assets as at 30 June 2006.

(in number of shares) As at 30/06/05 Increase Decrease As at 30/06/06

Treasury shares held under stock option plans 121,500 45,000 32,401 134,099Treasury shares held under a liquidity contract 17,669 261,022 252,799 25,892

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Note 6 – Shareholders’ equity

Appropriation(in thousands of euros) As at 30/06/05 Profit for 2004/2005 Change As at 30/06/06

Share capital 56,000 56,000Share premium 22,545 22,545Revaluation surplus 947 947Legal reserve 5,600 5,600Statutory reserves 46,702 (46,702)Other reserves 3,651 46,702 50,353Retained earnings 22,625 26,010 154 48,789Profit for the year30/06/05 35,323 (35,323)30/06/06 57,189 57,189

193,393 (9,313) 57,343 241,423

Dividends paid stood at €8,960,000 for shareholders and €353,000 for the general partner.

SHARE CAPITAL

As at 30 June 2006, share capital comprised 8 million shares with a nominal value of €7.

Note 7 – Contingent liability

As at 30/06/05 Provision Write-back As at 30/06/06

Provision for risk on treasury shares held under stock option plans 161 161Provision for tax liabilities 4,363 2,158 274 6,247

4,363 2,319 274 6,408

The provision for tax liabilities concerns the use of tax losses of companies included in the tax group.

Amounts written back for the period correspond to the use of deficits by companies included in the tax consolidation group.

Note 8 – Debts/payables

(in thousands of euros) Gross amount 1 year +1 year

BorrowingBank loans and overdrafts 1,807 1,807Trade notes and accounts payable 145 145Tax and social security payables 2 2Other debts 3,271 3,271

5,225 5,225


Note 9 – Net financial income (expense)


Financial incomeFinancial income from affiliatesBonduelle SA 29,480 49,364Income from loans

29,480 49,364Income from other marketable securities and fixed asset receivables Write-back on provisions and expense transfers 685 347Other interest and similar income 1,302 534Net income from the sale of marketable investment securities 1,645

33,112 50,245Financial expensesFinancial amortisation and provisions 239 80Interest expenses 451 321

690 401

FINANCIAL INCOME 32,422 49,844

Note 10 – Extraordinary income


Extraordinary income on management operationsExtraordinary income on capital transactions- Income from the sale of property, plant and equipment- Income from the sale of long-term investments 4,088 106Write-back of contingent liability 3,384 87

TOTAL EXTRAORDINARY INCOME 7,472 193

Note 11 – Extraordinary expenses


Extraordinary expenses on management operations 41 30Extraordinary expenses on capital transactions - Write-off of property, plant and equipment - Write-off of long-term investments 3,713 55

TOTAL EXTRAORDINARY EXPENSES 3,754 85

TOTAL EXTRAORDINARY PROFIT (LOSS) 3,718 108

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Note 12 – Information concerning affiliates and equity interests

(in thousands of euros) Amount concerning the companies

Undertakings in which the companyItems Affiliates has a participating interest

Equity interests:- gross value 207,770 - net value 207,770Advances to subsidiariesOther receivables 28,195Other payables 3,208Trade payablesFinancial income from affiliates 49,365Financial income 534Financial expenses 93

Note 13 – Breakdown of tax

(in thousands of euros) Pre-tax profit on ordinary items Extraordinary profit or loss Total

Income before tax 48,476 108 48,584Theoretical tax 291 40 331Tax credit

TOTAL THEORETICAL TAX 331Tax consolidation impact (8,936)

TOTAL TAX (8,605)

Note 14 – Tax consolidation

BSCA is the parent company in a French tax consolidation group composed of the following:

Corporate name Address

Bonduelle SA La Woestyne - 59173 RenescureBonduelle Conserve International La Woestyne - 59173 RenescureBonduelle Surgelé International La Woestyne - 59173 RenescureBonduelle Development SAS La Woestyne - 59173 RenescureDuvet SARL Rue Nicolas Appert - 59650 Villeneuve-d’AscqBonduelle Frais International La Woestyne - 59173 RenescureBonduelle Frais France 90, rue André Citroën - 69740 Genas

According to the tax sharing agreement, income of all consolidated companies is allocated as follows:

The companies pay BSCA an amount equal to the tax they would have pay on their earnings and/or long-term capitalgains if they were taxed on a stand-alone basis, after deducting all tax credits that the consolidated companies would havebeen entitled to if they were not consolidated.



Note 15 – Deferred taxes

Expenses that are temporarily not deductible (in thousands of euros)

Type Amount Income tax

Provision for stock options 161 54(rate applied 33.33%)

Note 16 – Off-balance sheet commitmentsAs at 30/06/06

none

Note 17 – Stock options plans


Date of Shareholders’ Meeting 26/05/98 26/05/98 26/05/98 26/05/98Date of Management Board meeting: 27/05/98 09/04/99 31/03/00 02/10/00Initial number of shares allocated 65,000 3,800 58,734 2,000Number of cancelled shares(1) 0 0 0 0Total number of shares available for subscription or purchase 65,000 3,800 58,734 2,000Effective date of exercise period 27/05/03 09/04/04 31/05/05 02/10/05Expiry date 27/05/04 09/04/05 31/03/06 02/10/06Subscription price 15.25 15.48 15.16 18.30Number of shares subscribed as at 30 June 2006 65,000 3,800 58,734 0


Date of Shareholders’ Meeting 26/05/98 12/12/01 12/12/01 12/12/01Date of Management Board meeting: 01/03/01 24/04/02 28/03/03 05/05/04Initial number of shares allocated 14,150 17,415 29,445 30,850Number of cancelled shares (1) (300) 0 (6,615) (8,730)Total number of shares available for subscription or purchase 13,850 17,415 22,830 22,120Effective date of exercise period 01/03/06 25/04/06 29/03/07 06/05/08Expiry date 01/03/07 25/04/07 29/03/08 06/05/09Subscription price 35.00 57.37 52.30 71.40Number of shares subscribed as at 30 June 2006 5,586 0 0 0

Plan no. 9 Plan no. 10

Date of Shareholders’ Meeting 09/06/05 09/05/06Date of Management Board meeting: 09/06/05 09/05/06Initial number of shares allocated 23,250 45,000Number of cancelled shares (1) (6,780) 0Total number of shares available for subscription or purchase 16,470 45,000Effective date of exercise period 09/06/05 09/05/06Expiry date 09/06/10 09/05/11Subscription price 61.50 62.52Number of shares subscribed as at 30 June 2006 0 0

(1) Cancellations correspond to shares attributed to those who have departed the group prior to the period of exercise.

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Information concerning subsidiaries and holdings

Company Number Propor- Advances of Share- tionate Current granted Revenue Profit

shares holders’ interest value of by the Guarantees for the for the Dividends(in thousands of euros) held Currency equity (1) (%) securities(2) company given period period received

A. Securities with a gross value higher than 1% of the parent’s share capital

1. Subsidiaries in which the parent has an interest of more than 50%

Bonduelle SA 1,204,048 EURO 142,275 100 207,770 34,727 31,184 49,365

2. Firms in which the parent has an interest of between 10 and 50%

B. Securities with a gross value that does not exceed 1% of the parent’s share capital1. French subsidiarySoléal 3 EURO 17,951 5.5 0.10 77,885 30Bonduelle Frais Investissement 3 EURO 85,153 0.1 0.05 1,269 (2,428)2. Foreign subsidiariesZAO Moscou 1 RUR 0.2Bonduelle SA de CV 1 MXN 0.13. Investments in French companies

(1) In the company’s local currency excluding profit for the year (thousands of currency units)

(2) Gross value.

All the Bonduelle Investment Company securities have been fully provisioned.



Five-year financial summary

(in thousands of euros) 30/06/02 30/06/03 30/06/04 30/06/05 30/06/06

Financial position at year-endShare capital 56,000 56,000 56,000 56,000 56,000Number of shares issued in units 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000Total income from operationsRevenue from subsidiaries 11,390 5,025 23,718 29,481 49,365Revenue ex-VAT Income before taxes, employee profit-sharing,depreciation and amortisation 11,805 5,186 25,726 30,826 48,252Income tax (307) (109) 452 (667) (8,605)Employee profit-sharing scheme Income after taxes, employee profit-sharing,depreciation and amortisation 19,828 4,773 26,156 35,323 57,189Amount of distributed earnings 8,960 10,047 10,000 8,960Income from operations reducedto a single share (in euros)Income after taxes, employee profit-sharing,but before depreciation and amortisation 1.51 0.66 3.16 3.94 7.11Income after taxes, employee profit-sharing,depreciation and amortisation 2.48 0.60 3.27 4.42 7.15Dividend paid to each share 1.12 1.25 1.25 1.12 1.25(1)

(1) Proposed dividend submitted shareholders’ meeting.

Appropriation of income

The General Meeting decides to allocate the profit for the year, being €57,188,705.64 as follows:

• Profit for the year €57,188,705.64 • Retained earnings €48,789,884.78 Distributable profit €105,978,590.42 Appropriation to the general partner €571,887 Dividends paid to shareholders €10,000,000 Retained earnings €95,406,703.42

The General Meeting also approves the distribution of a dividend for the 2005/2006 fiscal year, of €1.25 per share, withthe understanding that the entire amount thus distributed qualifies for the 40% reduction mentioned in article 158-3-2°ofthe French General Tax Code.

The dividend will be paid on 5 January 2007.

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Resolutions

For the Ordinary General Meeting:

First resolution

The General Meeting, after hearing the reports of theManaging Partner, the Supervisory Board, the Chairman ofthe Supervisory Board and the Statutory Auditors for thefiscal year ended 30 June 2006, approves the annual financial statements and the balance sheet of said fiscalyear, showing a profit of €57,188,705.64 as well as the transactions described in the accounts and summarized inthese reports.

Second resolution

The General Meeting, after hearing the Managing Partnerand Statutory Auditor’s report on the consolidated financial statements as at 30 June 2006, approves these financial statements as they have been presented to it, showing a consolidated group profit of €39,227,697.

Consequently, it discharges the Managing Partner and theSupervisory Board for the performance of their duties forthe year under review.

It also discharges the Statutory Auditors for their audit.

Third resolution

The General Meeting, after hearing the Statutory Auditor’sspecial report on the agreements referred to in article L. 226-10 of the French Commercial Code approves thetransactions and agreements mentioned therein.

Fourth resolution

The General Meeting decides to allocate the profit for theyear of €57,188,705.64 as follows:

• Profit for the year €57,188,705.64

• Retained earnings €48,789,884.78

DISTRIBUTABLE INCOME €105,978,590.42

Appropriation to the general partner €571,887.00

Dividends paid to shareholders €10,000,000.00

RETAINED EARNINGS €95,406,703.42

The General Meeting also approves the distribution of adividend for the 2005/2006 fiscal year, of €1.25 per share,with the understanding that the entire amount thus distri-buted qualifies for the 40% reduction mentioned in article158-3-2°of the French General Tax Code.

The dividend will be paid on 5 January 2007.

It is specified that if at the time of payment of dividends,the company owns some of its own shares, the sums corresponding to the dividends that is not paid as a resultof these shares will be allocated to retained earnings.

In accordance with the provisions of article 243 bis of theGeneral Tax Code, the General Meeting notes that it hasbeen reminded that the following sums were distributedas dividends for the three previous years:

2002/ 2003/ 2004/(in euros) 2003 2004 2005

Dividend distributed 1.25 1.25 1.12

Tax credit 0.62 - -

Actual income 1.87 - -Income eligible for the deduction:Dividends - 1.25 1.25

Fifth resolution

The General Meeting, after hearing the report of theManaging Partner, authorizes it, for a period of eighteenmonths, pursuant to articles L. 225-209 et seq. of theCommercial Code, to buy in one or more transactions, at theperiods that it shall define, treasury shares not exceeding 10%of the number of shares making up the share capital stock oron the basis of the current capital, 800,000 shares.

This authorization cancels the one given to the ManagingPartner by the Ordinary General Meeting of 9 June 2005.

The shares may be bought to:

- ensure share liquidity on the secondary market or the liquidity of BONDUELLE shares through an investment service provider in a liquidity contract that complies withthe ethics charter of the French association of investmentcompanies (AFEI) admitted by the Autorité des MarchésFinanciers (AMF),

- keep the shares bought and deliver them later in exchange or in payment for any external growth operationsthat may so require, with the understanding that theshares acquired for this purpose may not exceed 5% of the company’s capital.


Combined General Meeting of 7 December 2006

- ensure that stock option plans and other forms of shareallotments to employees and/or managers are coveredunder the conditions and according to procedures specified by law, in particular as part of employee profit-sharing, company savings plan or a bonus issue,

- ensure that marketable securities that entitle holders tothe allotment of the company’s shares are covered in accordance with applicable regulations,

- cancel acquired shares, if necessary, on condition that authorization has been granted by the fifteenth resolutionof the Extraordinary General Meeting.

These share purchases may be made by all means, includingby block sales, and at the times that the Managing Partnermay deem necessary, including during a public offering within the limits of stock market regulations. However, the company does not intend to resort to using spin-offs.

The maximum purchase price was fixed at €110 per share.In the event of an operation on the capital, in particular, a share split, a reverse share split or a bonus issue, the foregoing amounts will be adjusted in the same proportions(multiplier coefficient equal to the ratio between the numberof shares comprising the capital before the operation andthe number after the operation).

The maximum amount for the operation is thus set at€88,000,000.

The General Meeting grants all powers to the ManagingPartner to carry out these operations, to define their conditions and procedures, to enter into all agreementsand to carry out all the formalities.

Sixth resolution

The General Meeting, upon a motion by the general partner, allocates €30,000 to the Supervisory Board, as directors’ fees for the 2006/2007 fiscal period.

Seventh resolution

The General Meeting notes that Daniel Bracquart has cometo the end of his term as member of the Supervisory Boardand therefore renews his term for a period of three (3) yearsthat will expire at the end of the General Meeting convenedto approve the financial statements of the year ended 30 June 2009.

Eighth resolution

The General Meeting notes that André Crespel has cometo the end of his term as member of the Supervisory Boardand therefore renews his term for a period of three (3) years

that will expire at the end of the General Meeting convenedto approve the financial statements of the year ended 30 June 2009.

Ninth resolution

The General Meeting notes that Stanislas Dalle has cometo the end of his term as member of the Supervisory Boardand therefore renews his term for a period of two (2) yearsthat will expire at the end of the General Meeting convenedto approve the financial statements of the year ended 30 June 2008.

Tenth resolution

The General Meeting notes that Jean Guéguen has cometo the end of his term as member of the Supervisory Boardand therefore renews his term for a period of two (2) yearsthat will expire at the end of the General Meeting convenedto approve the financial statements of the year ended 30 June 2008.

Eleventh resolution

The General Meeting notes that Francis Danjou has cometo the end of his term as member of the Supervisory Boardand therefore resolves to replace him by appointing IsabelleDanjou as member of the Supervisory Board for a periodof three (3) years that will expire at the end of the GeneralMeeting convened to approve the financial statements ofthe year ended 30 June 2009.

Twelfth resolution

Upon a motion by the Supervisory Board, the GeneralMeeting renews, as Statutory Auditor, Mazars et Guérard,39, rue de Wattignies - 75012 Paris, and as AlternateAuditor, Denis Grison, Immeuble Exaltis - 61, rue HenriRegnault - 92075 La Défense, for a term of six years thatwill expire at the end of the General Meeting convened to approve the financial statements of the year ended 30 June 2012.

Thirteenth resolution

Upon a motion by the Supervisory Board, the GeneralMeeting renews, as Statutory Auditor, Deloitte & Associés,67, rue de Luxembourg – 59777 Euralille, and as AlternateAuditor, BEAS 7/9, Villa Houssay – 92200 Neuilly-sur-Seine,for a term of six years that will expire at the end of theGeneral Meeting convened to approve the financial state-ments of the year ended 30 June 2012.


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In the last two years, Deloitte has not audited any spin-offor merger in the company and the companies that it audits within the meaning of article L. 233-16 of the FrenchCommercial Code, and declares that it is accepting thesefunctions.

For the Combined General Meeting:

Fourteenth resolution

The General Meeting, after having been notified of the re-ports of the Managing Partner and the special report of theStatutory Auditors and in accordance with the provisionsof articles L. 225-129-6 and L. 225-138 of the CommercialCode and articles L. 443-1 of the Labor Code:

1. Authorizes the Managing Partner, if it deems it necessary,at its own discretion, to increase the share capital on oneor more occasions by issuing common cash shares and,if necessary, by a bonus issue of common shares or othersecurities that give access to the company’s capital, toemployees who participate in an employee savings plan.

2. Waives the pre-emptive rights to shares that may be issued under this authorization.

3. Sets the validity of this authorization at twenty-sixmonths, as from the day of this Meeting.

4. Limits the maximum nominal amount of the capital increase or increases that may be carried out with thisauthorization at 3% of the share capital reached at thetime of the Managing Partner’s decision to carry out thecapital increase.

5. Resolves that the issue price of the shares to be issuedin accordance with this delegation may not be lower bymore than 20% (or 30%, when the freeze period specifiedby the plan in accordance with article L. 443-6 is higherthan or equal to ten years) than the average of the firststock quote of the share during the twenty trading preceding the Managing Partner’s decision to carry outthe capital issue and to issue the corresponding shares.The issue price may also not be higher than the fore-going average.

6. Grants the Managing Partner full powers to implementthis authorization, take all measures and carry out all thenecessary formalities.

Fifteenth resolution

The General Meeting, after hearing the Managing Partner’sreport and the report of the Statutory Auditors:

1. Authorizes the Managing Partner, at its discretion aloneand in one or more transactions, to cancel shares not exceeding 10% of share capital, i.e. 800,000 shares,

that the company owns or may own in the future after takeovers carried out in accordance with article L. 225-209 of the French Commercial Code. It alsoauthorizes the Managing Partner to carry out a reduc-tion in shares accordingly, compliance with laws and regulations.

2. Sets the validity of this authorization at twenty-fourmonths as from the day of this meeting, i.e. up to 7 December 2008.

3. Grants full powers to the Managing Partner to carry outthe operations required for these cancellations and reductions of share, amend the company’s articles of association accordingly and to carry out all the neces-sary formalities.

Sixteenth resolution

The General Meeting after hearing the Managing Partner’sreport and the Statutory Auditor’s special report and in accordance with the provisions of the French CommercialCode and, in particular, article L. 225-129-2:

1. Delegates to the Managing Partner its authority to carry out a capital increase, on one or more occasions,in the proportions and at the times that it will deem necessary:

a. by issuing, either in euros, foreign currency or in anyother accounting unit established with reference to agroup of currencies, common shares and/or marke-table securities that give immediate or future access,at all times or at a set date, to common shares of thecompany or, pursuant to article L. 228-93 of the FrenchCommercial Code, of any company in which it holdsmore than half the capital either directly or indirectly.This may be done by subscription, conversion, swap,redemption, presentation of a coupon or by any othermeans;

b. and/or by capitalization of premiums, reserves, profits or other means in the form of a bonus issue orincreasing the nominal value of existing shares.

2. Sets the validity of this delegation at twenty-six months,as from the day of this meeting.

3. Resolves to set, as follows, the limits of the amounts ofauthorized issues in the event of the use of this delegationof authority by the Managing Partner:

The total nominal amount of shares liable to be issued pursuant to the present delegation may not exceed €17,500,000.

This ceiling includes the total nominal value of additionalshares that may be issued, if necessary, to preserve therights of holders of investment securities that grant access to share capital, in accordance with the law.


This ceiling will also include the total nominal amountof shares issued directly or indirectly, by virtue of the resolution hereafter.

4. Should the Managing Partner use this delegation of autho-rity for the issues mentioned in paragraph 1.a. above:

a. the General Meeting resolves that the issue or issueswill be first reserved to shareholders who can subscribe to them as of right,

b. resolves that in the event that subscriptions as of right,and where applicable, subscriptions for excess shares,do not completely absorb an issue, the ManagingPartner may use the options provided by law, and inparticular, offer the public all or part of unsubscribedsecurities.

c. with respect to capitalization of premiums, reserves,profits or other means, resolves that, if necessary, fractional entitlements will not be tradable and thecorresponding shares will be sold and the proceedsof the sale will be allotted to bearers of rights withinthe legal time frame.

5. Resolves that the Managing Partner will, within the limitsdefined above, have the powers necessary, in particular,

- to set the terms of issue(s), ascertain that the resultingcapital issue have been carried out,

- amend the articles of association accordingly,

- charge the capital issue expenses to the amount of related premiums at its discretion,

- and deduct from this amount, the sums required tobring the legal reserve up to a tenth of the new capitalafter each increase,

and more generally do all that is necessary in such circumstances.

6. Notes that this delegation nullifies all prior delegationswith a similar object.

Seventeenth resolution

The General Meeting after hearing the Managing Partner’sreport and the Statutory Auditor’s special report, and in accordance with the provisions of the French CommercialCode and, in particular, article L. 225-129-2:

1. Delegates to the Managing Partner its authority to carryout a capital increase, on one or more occasions, in theproportions and at the times that it will deem necessary,on the French and/or international market, through a public issue, in euros, foreign currency or in any otheraccounting unit established with reference to a group ofcurrencies, common shares and/or transferable securities

that give immediate or future access, at any time or ata given time, to the company’s common shares subscription, conversion, swap, redemption, presentationof a coupon or in any other manner, with the under-standing that these securities may be issued to in consideration for securities contributed to an exchangeoffer that meets the conditions specified by article L. 225-148 of the French Commercial Code.

Pursuant to article L. 228-93 of said Code, the transferablesecurities to be issued may entitle the owner to the com-mon shares of any company of which it directly or indirectlyholds more than half the capital.

2. Sets the validity of this delegation at twenty-six months,as from the day of this meeting.

3. Resolves to set, as follows, the limits of the amounts ofauthorized issues in the event of the use of this delegationof powers by the Managing Partner:

The total nominal amount of common shares liable tobe issued pursuant to the present delegation may notexceed €17,500,000.

This ceiling will also include the total nominal amountof shares issued by virtue of the foregoing resolution.

4. Resolves to waive the pre-emptive right of shareholdersto the securities concerned by this resolution, neverthe-less leaving the Managing Partner the option of grantinga priority right to shareholders in accordance with the law.

5. Resolves that the amount due to or supposed to be dueto the company for each of the shares issued under thisdelegation of authority, after taking into account, in theevent of the issue of autonomous warrants, of the issueprice of these warrants, will be at least equal to the minimum amount required by legal and regulatory provisions that will apply when the Managing Partner implements the delegation.

6. Resolves, in the event of the issue of shares intended asconsideration for securities contributed to a takeover offer, that the Managing Partner will, within the limits defined above, have the powers required to define thelist of securities contributed to the exchange, set theterms and conditions of the issue, the exchange ratio aswell as any cash balance to be paid, and determine theissue procedure.

7. Resolves that the Management will, within the limits defined above, have the powers necessary, in particular,to set the terms of issue(s), ascertain that the resultingcapital issue have been carried out, amend the articlesof association accordingly, charge the capital issue expenses to the amount of related premiums at its discretion and deduct from this amount, the sums


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required to bring the legal reserve up to a tenth of thenew capital after each increase, and more generally doall this is necessary in such circumstances.

8. Notes that this delegation nullifies all prior delegationswith a similar object.

Eighteenth resolution

For each of the issues decided pursuant to resolutions 16and 17, should the Managing Partner observe an excessdemand, the number of securities to issue may be increasedunder the conditions set out in article L. 225-135-1 of theFrench Commercial Code up to the maximum limit definedby the General Meeting.

Nineteenth resolution

The General Meeting, after having heard the ManagingPartner’s report and pursuant to article L. 225-147 of theFrench Commercial Code:

1. Authorizes the Managing Partner to carry out, based ona report by the expert appraiser, a capital increase intended to pay for contributions in kind granted to thecompany that are made up of equity securities or trans-ferable securities that grant access to capital when theprovisions of article L. 225-148 of the French CommercialCode do not apply.

2. Sets the validity of this delegation at twenty-four months,as from the day of this meeting.

3. Resolves that the total nominal amount of commonshares liable to be issued pursuant to the present dele-gation may not exceed 10% of share capital.

This ceiling is irrespective of all the ceilings set out inthe other resolutions of this General Meeting.

4. Delegates all powers to the Managing Partner to approve the valuation of contributions, decide on thecapital issue resulting therefrom, ascertain that it hasbeen carried out, charge any expenses and fees resultingfrom the capital increase to the share premium, deductfrom this premium the sums required to bring the legalreserve to a tenth of the new capital after each increase,amend the articles of association accordingly and takethe necessary measures.

Twentieth resolution

The General Meeting, after acknowledging the ManagingPartner’s report resolves:

- to bring the company’s articles of association into compliance with the provisions of the order of 24 June2004 that reformed the transferable security system;

- amend articles 6 and 7 of the articles of association accordingly as follows:

6. Creation of capital - Share capital

Article 6 is henceforth written as follows:

“Share capital is fixed at fifty-six (56,000,000) million euros. It is divided into eight million (8,000,000) commonshares with a par value of seven (7) euros each, all fully paidup and divided among shareholders in proportion to theirrights in the company.”

7. Capital increase and decrease

The last paragraph of article 7.3 is henceforth written asfollows:

“The General Meeting may grant the Board of Directorsthe powers necessary to carry out capital increases on oneor more occasion, set the terms thereof and establish thatthey have been implemented. It may also delegate theGeneral Partner with the authority to decide on a capitalincrease under the conditions and limits provided by law.”

Twenty-first resolution

The General Meeting, after having heard the ManagingPartner’s report, resolves to update article 9 of the articlesof association and consequently, resolves to amend saidarticle as follows:

9. Form of shares

Paragraph 9.2 is henceforth written as follows:

“The company may at any time, in accordance with legaland regulatory provisions, ask the central depository of financial instruments for information that will enable it toidentify holders of bearer securities that give, immediatelyor at a future date, to voting rights at its General Meetings,and also find out the number of securities held by each ofthem and, where applicable, the restrictions which may ap-ply to the said securities.”

Twenty-second resolution

The General Meeting, after having heard the ManagingPartner’s report, resolves to specify, as may be necessary,article 11 of the articles of association and consequently,resolves to amend said article as follows:

11. Shareholder disclosure requirements

Article 11 is henceforth amended as follows:

“Any natural person or legal entity acting alone or inconcert, who comes to own a number of shares or voting


rights representing more than one of the disclosure thresholds stipulated by law must comply with the disclosureobligations specified by the law within the given time limit.The same information is also provided when the equity interest or voting rights falls below the legal thresholds.

Furthermore, all natural persons or legal entities who, either alone or acting in concert, come to own or cease toown, in any manner whatsoever, a fraction equal to 2% or4% of the company’s capital or voting rights, are obligedto inform the company within 15 days after exceeding oneof these thresholds of the number of shares, transferablesecurities that give access to capital and related votingrights that they hold. For the application of this statutoryrequirement, the shareholding thresholds are determinedunder the same conditions as legal shareholding thresholds.

If this statutory requirement is not met, the shares in excess of the undeclared fraction are deprived of votingrights for all shareholders’ meetings held for a period oftwo years following the date of regularization.”

Twenty-third resolution

The General Meeting, after having heard the ManagingPartner’s report, resolves to update article 14 of the articlesof association and consequently, resolves to amend saidarticle as follows:

14. Responsibilities and powers of the general partner

The terms “Pierre et Benoît Bonduelle sarl” in the first sub-paragraph of paragraph 14.3 are replaced by the terms“Pierre et Benoît Bonduelle SAS”.

Twenty-fourth resolution

The General Meeting, after having heard the ManagingPartner’s report, resolves to include in the articles of asso-ciation the option of using videoconferencing and tele-communications resources for Supervisory Board meetingsand consequently, resolves to amend article 19 of the articles of association as follows:

19. Deliberation of the Supervisory Board


“The Supervisory Board meets as often as the company’s interests may so require and at least twice a year, when it isconvened by its Chairman or by the Managing Partner, eitherat the registered office or at a venue indicated in the notice.

Notices are sent by all means that may serve as commercialproof, at least seven business days before the meeting.

This period may be reduced if the Chairman or Vice-Chairman of the Supervisory Boards agrees to it with thegeneral partner and the Managing Partner.

All members of the Supervisory Board may grant a proxyto one of their co-members by all means that are consideredas commercial proof to represent them at a Board meeting.Each member of the Supervisory Board may have only oneproxy per meeting. These provisions apply to the permanentrepresentative of a legal entity who is a member of theSupervisory Board.

The Supervisory Board may commence valid proceedingsonly if at least half of its members are present or repre-sented.

Decisions are adopted by the majority of votes of members present or represented. Nevertheless, theSupervisory Board may approve or reject any proposal to rewrite certain clauses of the general partner’s articlesof association by a majority of three-quarters of its members presents or represented, in compliance with the provisions of article entitled “Responsibility and powers of the general partner”.

The rules of procedure may provide that members if theSupervisory Board who take part in meetings through videoconferencing or telecommunication means under theconditions stipulated by applicable laws and regulationsshall be considered to be present in the calculation of thequorum and majority.

The Managing Partner must be called to attend and mayattend Supervisory Board Meetings, but will have no rightto participate in discussion and to vote.”

Twenty-fifth resolution


- to update article 23 of the articles of association,

- allow the participation of shareholders at the GeneralMeeting by videoconferencing or telecommunicationsmeans,

- amend articles 23 of the articles of association accordinglyas follows:

23. Shareholders’ meetings


“Shareholders will be entitled to attend General Meetingsif they are registered in the company’s accounts, or if theshares are registered in the regulated market of a stock


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exchange in France or outside France, and if they have deposited in the place indicated in the notice of meeting,a certificate ascertaining that the bearer shares are unavailable.

This must be done at least five days before the meeting.

Any persons invited by the Managing Partner or theChairman of the Supervisory Board may attend the meetings.

The general partner is represented by one of its legal representatives or by any person, whether or not a share-holder, that may be appointed by one of them.

Shareholders who take part in the Meeting by video-conference or by telecommunication means that enabletheir identification and comply with applicable regulations,when the Management decides to use such means of participation prior to the notice of the General Meeting,are deemed to be present for the calculation of the quorum and majority”.

Twenty-sixth resolution


- to bring the company’s articles of association in compliancewith the provisions of the corrective Finance Law for 2004,which removes the obligation to create a long-term capital gains special reserve for capital gains made during the fiscal years open as from 1 January 2004;

- amend articles 25 of the articles of association accordinglyas follows:

25. Appropriation and distribution of profits

Sub-paragraphs 5 and 6 of article 25 have been removed.

Twenty-seventh resolution

The General Meeting grants full powers to the bearer ofan original, copy or excerpt of the minutes of this Meetingto carry out all legal formalities of registration and disclo-sure required by law.



Dear Shareholders,

In performing the duty entrusted to us by your GeneralMeeting, we present our report with regard to the year ended 30 June 2006 concerning:

• the audit of the annual financial statements of BonduelleSCA as appended to this report,

• the justification of our assessment,

• the specific verifications and disclosures required by law.

The annual financial statements were prepared by yourManagement Board and it is our duty to express an opinion thereon based on our audit.

1. Opinion on the annual financialstatements

We conducted our audit according to professional standards applicable in France. Those standards requirethat we plan and perform the audit to obtain reasonableassurance that the annual financial statements are free ofmaterial misstatements. An audit entails examining, on atest basis, evidence supporting the amounts and disclo-sures of these financial statements.

An audit also entails assessing the accounting principlesused and significant estimates made in preparing the financial statements, as well as evaluating the overall presentation. We believe that our audit provides a reasonablebasis for the opinion expressed hereafter.

We certify that the financial statements are, in accordancewith French accounting rules and principles, honest andsincere and give a true view of the results of the operationsof the year under review as well as of the financial situationand assets of the company at the end of the financial year.

Without challenging the opinion expressed above, we wouldlike to draw your attention to the following point in note 1of the financial statements setting out the change in method resulting from the first-time application, as from 1 July 2005, of CRC regulations 2004-06 and CRC 2002-10.

2. Justification of assessmentsPursuant to the provisions of article L. 823-9 of the FrenchCommercial Code on the justification of our assessments,we draw your attention to the following:

• As part of our assessment of the accounting rules andprinciples followed by your company, we verified whether

the change in accounting method mentioned above wasjustified as well as the presentation of this change.

• Note 1 to the financial statements presents the company’smethod for valuing long-term assets, which involves theuse of estimates.

We checked the appropriateness of this method, and asrequired, evaluated the data and assumptions on whichthese estimates are based, reviewed calculations made bythe company and examined the procedures by which theManagement approved the estimates.

• Note 1 to the financial statements presents the company’smethod for measuring contingent liabilities, which involves the use of estimates.

Our audit consisted in assessing the data and assumptionson which these estimates are based, reviewing the calcu-lations made by the company, comparing the accountingestimates of prior periods with the actual figures and examining the procedures by which the Management approved the estimates.

Our assessments therefore fall within the scope of our audit approach for annual financial statements, taken as awhole, and therefore contributed to the creation of the opinion stated in the first part of our report.

3. Specific verification and informationWe also conducted, in accordance with the standards ofthe profession applied in France, special audits prescribedby law.

We have no observations to make concerning the sincerityof this information and the consistency of the annual financial statements with the information provided in theManagement’s management report and the documentssent to shareholders concerning the financial situation andthe annual financial statements.

Pursuant to the law, we ascertained that the different itemsof information regarding acquisitions and takeovers, as wellas the identity of the holders of capital (or voting rights)were submitted to you in the annual report.






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General Report of Statutory Auditors

Special Report of the Statutory Auditors on regulated agreements

92 BONDUELLE - 2005/2006 Financial report


Dear Shareholders,

In our capacity as Statutory Auditors for your company, weare bound to present you with a report on the regulatedagreements of which we have been advised.

Agreements authorized during the fiscal year

Our duties do not include the searching of the existenceof such agreements, but to inform you, on the basis of theinformation at our disposal, of the characteristics and essential terms of the agreements of which we have beeninformed, without expressing an opinion concerning theirusefulness and validity. It is your duty, according to theterms of article 92 of the decree of 23 March 1967, to assess the advantages of concluding these agreements inview of their approval.

We inform you that we have received no notice of an agreement mentioned in article L. 226-10 of the law of theFrench Commercial Code.

Agreements approved in prior yearsthat continued to be implementedduring the year under review

Furthermore, in application of the decree of 23 March 1967,we were informed that the execution of the agreements below, approved during the previous fiscal years, continuedduring the year under review.

Advance granted to Bonduelle SA

Nature and purpose

The advance to the partner’s current account made toBonduelle SA stood at €20,125,656.29 as at 30 June 2006.

Terms

Net financial income for the period ended 30 June 2006stood at €406,463.83.

We carried out our audit in accordance with professionalstandards applicable in France. These standards requirethat we conduct proceedings with due care intended toverify that the information given to us is consistent with thebasic documents from which they were created.






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Company name

BONDUELLE

Registered office

“La Woestyne” – 59173 Renescure – France

Administrative head office

rue Nicolas Appert

BP 30173 – 59653 Villeneuve-d’Ascq – France

Legal form

Bonduelle is a French partnership limited by shares (sociétéen commandite par actions) governed by the French Commercial Code.

Date of incorporation and term

The company was incorporated on 3 January 1972 for aduration of 99 years expiring on 18 January 2071, exceptfor early liquidation or extension.

Identification number

The company is registered with the Hazebrouck Trade andCompany register under number B 447 250 044.

APE Code: 652 E

Fiscal year

From 1 July to 30 June each year.

Corporate object

The object of the company, in France and in all countriesis:

- ownership and management of securities and ownershiprights issued by all French and foreign companies,

- all financial and industrial investments,

- administration of undertakings and,

- and generally, all transactions that may contribute to itsdevelopment.

The company may undertake all transactions compatiblewith, related to or which contribute to the above purposes.

Corporate documents concerning the last threefinancial periods

The memorandum and articles of association, financial statements, minutes of General Meetings and other corporate documents may be consulted at the Company’sregistered office and head office.

Distribution of earnings as per the articles of association

The General Meeting approves the financial statements forthe period ended, and when applicable, the consolidatedfinancial statements, and determines the existence of income available for distribution.

Within the limit of its distributable income, the companypays the general partner 1% of the net income of the year.

If income available for distribution for a period is not sufficient to pay of all or part of the above percentage ofearnings to be paid to the general partner, this amount willbe carried forward and payable the following year or in future years until fully paid off.

Amounts payable to the general partner will be paid attimes and locations indicated by the Management Board within nine months following the close of the financial period.

In the event of long-term capital gains, the General Meetingwill consider the appropriation of this amount to specialreserves.

If such reserves are set aside, the share of net capital gainsreverting to the general partner shall be deducted from either the balance of income available for distribution ordistributable reserves.

Other statutory information

General information on the company


When it is not possible to deduct such amounts, a specialreserve is set aside corresponding to the share of net capital gains reverting to the general partner (1%) that willbe distributed to the general partner as soon as possible.

After payment of amounts reverting to the general partner,shareholders are entitled to the balance of income availablefor distribution.

The appropriation of this income is decided by the OrdinaryGeneral Meeting upon a motion by the general partner.

Upon a motion by the Supervisory Board, the GeneralMeeting may grant shareholders the choice of receiving allor part of the dividends or interim dividends in cash orshares, as provided for under law.

Upon a motion by the Supervisory Board, the GeneralMeeting may elect to deduct amounts it deems appropriatefrom the balance of the income reverting to shareholders asretained earnings for shareholders or allocate to one ormore non-interest-bearing extraordinary, general or specialreserves, to which the general partners, in this capacity,shall have no rights.

Upon a motion by the general partner, this reserve or reserves may, by a decision of the Ordinary GeneralMeeting, may be distributed to shareholders or allocatedto fully or partially redeem the shares. Fully redeemedshares are replaced by dividend-bearing shares that conferthe same rights as existing shares except the right to redemption of capital.

These reserves may also be capitalized.

Dividends are payable at the times and in the places determined by the Management Board, within a maximumperiod of nine months from the end of the fiscal year, except where this period is extended by court order.

General Meetings

General Meetings are called according to the conditions,procedures and within the periods fixed by law.

The right to participate in the Meetings is subject to thefollowing requirements:

- owners of registered shares must be listed in the company’s shareholder register,

- owners of bearer shares must be file a document at theaddress indicated in the meeting notice issued by an ac-credited financial intermediary certifying that these sharesare held in account.

These formalities must be accomplished within five daysprior to the Meeting.

Ordinary and Extraordinary General Meetings, ruling under the conditions specified by the law, exercise theirfunctions in accordance with the law.

Except for the appointment and dismissal of members ofthe Supervisory Board, the appointment and dismissal ofStatutory Auditors and the approval of agreements subjectto authorization, no decision of the Meetings will be validunless it is approved in writing by the general partner nolater than the end of the Meeting in which said decisionwas voted.

Each share entitles the owner to one voting right atShareholders’ Meetings. However, voting rights double tothose conferred on other shares in relation to thepercentage of capital they represent, are attributed toshares which have been registered in the name of the sameshareholder for at least three years.

Disclosure of holdings exceeding specific thresholds

“Any natural or legal person, acting alone or in concert,who directly or indirectly acquires, within the meaning ofarticles L. 233-7 et seq. of the French Commercial Code,a number of shares representing more than 2% of the sharecapital or any multiple thereof, is required to notify theCompany, by registered letter with acknowledgement ofreceipt, of the total number of shares held, within fifteendays after having exceeded each of the aforementionedthresholds.”

This requirement also applies in the same conditions asthose specified above each time the fraction of share social capital and/or voting rights owned falls below oneof the above-mentioned thresholds.

Failure to comply with the above obligations will be sanc-tioned by the loss of voting rights for the shares exceedingthe fraction that was not reported, in accordance with applicable law.

Identification of bearer securities

The company is authorized to have recourse to the provisions of articles L. 228-2 and L. 228-3 of the FrenchCommercial Code governing commercial partnershipsconcerning the identity of holders of shares conferring present or future voting rights at shareholders’ meetings.

Group timeline and history

1853-1926: Origins: the birth of a legend

The company had two founders: Louis Bonduelle-Dalle(1802-1880) and Louis Lesaffre-Roussel (1802-1869) whowere both born into families of farmers in the North ofFrance.

In 1853, the two men decided to create a grain and juniperdistillery at Marquette-lez-Lille.

In 1862, they bought a farm at Renescure which theyconverted into a grain alcohol distillery.

1926-1946: The canning business takes off

In 1926, they installed their first pea sheller and autoclavesin the family farm at Woestyne.

Bonduelle started canning 20 hectares of peas, corres-ponding to an annual production of approximately 120 tonnes.

In 1936, they expanded the farm to 230 hectares and thecanning plant also developed significantly.

1947-1962: From cottage industry to thrivingindustry: A brand attentive to the needs of its consumers

Business quickly resumed after the war. Bonduelle struckout on its own. It broke away from the sales network of La Rochefortaise who had been marketing its products untilthen and launched its own brand.

In 1957, Bonduelle decided to create a can that combinedpeas and carrots. This was a first in the canning industry andthe exploit consolidated the company’s commercial success.

1963-1974: A period of strong expansion

In 1968, the company carried off another technological exploit: vegetable freezing. This was immediately an unqualified success.

At the end of the 1960s and in the early 1970s, the com-pany created European subsidiaries: Germany (1969), Italy(1972) and England (1973). Other countries soon followed.

In 1973, Bonduelle generated more than half its revenuesfrom sales outside France.

1975-1984: The era of redeployment: Beyond Picardy

Bonduelle embarked on a business development drive thattook it to the South-West of France, the Oise departmentnorth of Paris and then Belgium. This geographical expansion led the company to invest in two new sectors:corn and mushrooms.

In 1980, Bonduelle acquired Marie-Thumas, the leadingBelgian vegetable canning company, which was also a leading brand that had been on this market for a hundredyears.

In 1983, it optimized its production capacity with 350,000tonnes of canned foods and 9,000 tonnes of frozen foods.Bonduelle had really confirmed its position as the leadingEuropean company in the processed vegetable sector!

1985-1993: Conquering Europe

Creation of a Spanish subsidiary in 1986, followed byPortugal in 1988.

At the end of 1989, Bonduelle acquired Cassegrain.

The group started pushing out to Eastern Europe: the former GDR, the Czech Republic, and Poland in 1992 joined the growing club of countries where Bonduelle products are sold.

In 1986, the Renescure and Bordères plant obtained ISO 9002 certification. The group’s other production sitessoon followed.

1994-1999: Growth

In 1995, the brand chose a new visual identity that was asymbol of renewal: a shining sun and a band of greenerythat conjured up nature, pleasure and well-being.

After the opening of a sales subsidiary in Brazil in 1994, it was Argentina’s turn to discover Bonduelle products in 1996.

Bonduelle extended its expertise to a new technology: processed fresh vegetables. It acquired a major stake inSalade Minute.

In 1998, the Bonduelle brand was launched into the freshfoods market in France and signed a partnership agreementwith Cielo e Campo, Italy’s number 2 of the fourth range.In June 1999, Bonduelle’s fourth range vegetables appearedon Italian shop shelves.

In the spring of 1998, the group was listed on the SecondMarché of the Paris Stock Exchange.

In November 1999, Bonduelle took part in the restructuringprocess for the vegetable canning industry in France andacquired the assets of Avril/Cirio France (French own-labelbrands).

To sharpen its profile, in October 1999, Bonduelle decidedto build a multi-hull yacht and choose Jean Le Cam, theskipper from Brittany, to compete in sailing races. This is auniverse with values in phase with Bonduelle’s values: naturalness, well-being, technology and dynamism.


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2000 to present date: A new era begins

2000

- Organization of the group into a federation of five subsidiaries.

- Takeover of Cielo e Campo (Fresh foods, Italy), already apartner since 1998.

- Creation of Bonduelle Frische (Fresh foods, Germany).

2001

- Takeover of Frudesa and its frozen foods plant inBenimodo (Spain).

- Merger between Cielo e Campo/Ortobell (No.1 on theItalian fresh foods market) which contributes its two plantsin San Paolo d’Argon (Bergame) and Battipaglia (Salerno)under construction.

2003

- Takeover of Vita, the market leader in fourth range freshvegetables in Germany and its plants at Reutlingen andWanzleben.

- 150th anniversary.

- Acquisition of the Bekescsaba plant in Hungary.

- Acquisition of Michel Caugant - Creation of a sixth subsidiary.

- Sports sponsorship: launch of the programme to build asingle-hull boat for competing in the Vendée GlobeChallenge in 2004.

2004

- The Krasnodar plant in Russia opens.

2005

- Reorganization of the group on 1 July 2005New subsidiary for the canning business = “Bonduelle Conserve International BCI”.New subsidiary for the frozen business = “BonduelleSurgelé International BSI”.

Other subsidiaries:- Bonduelle Traiteur = Catering.- Bonduelle Frais = Fourth range fresh foods.- Bonduelle Food Service = Marketing and sales in RHF.- Bonduelle Development = All technologies / CEEC,

MERCOSUR, export markets.- Bonduelle SA = Central services and support.

2006

- Acquisition of a stake in Aliments Carrière, in Canada

In June 2006, the Bonduelle Group acquired a minority interest in its counterpart Aliments Carrière, a leadingCanadian company in canned vegetables and frozen vegetables with a market share of over 70%.

The private company, Aliments Carrière, which employs800 employees and is headquartered in Saint-Denis-sur-Richelieu in Quebec, operates seven vegetable processing plants, four of which are based in Quebec andthree in Ontario.

Its sales for fiscal 2005/2006 (closed at the end of April)was nearly CAD 300 million (€210 million), broken downinto 40% of canned foods (Canada) and 60% of frozenfoods (Canada and the United States).

Most of its sales (60%) were in retail circuits.

Bonduelle will gradually raise its interest to 25% betweenJune and October 2006.

- Bonduelle Surgelé International (BSI), the group’s subsidiary specializing in frozen vegetables in Europe,acquired Unilever’s frozen food business (excluding icecream) in Spain.

This transaction becomes effective on 1 July 2006. It mainlyconcerns the Salto brand which will bring Bonduelle an additional annual revenue of €10 million.


Company history

Situation before 24 October 1997

Situation after 24 October 1997

Current situation

100%

99.98%

27.5%

3 families

Bonduelle SA

Other families InstitutionnelsPublic

Bonduelle SCA

Pierre and BenoîtBonduelle SAS

Statutory general partner

Employees + treasury shares

43.7%

Chairman:Christophe Bonduelle

interest

24.3%

4.5%

Managing Partner:Pierre and Benoît Bonduelle SAS

General Management:Christophe BonduellePierre Deloffre

5.74% 69.53%

99.99%

24.73%

Bonduelle SA

Employee investment funds and others

InstitutionnelsFamily shareholders

Institutional investors

Bonduelle SCAPierre and BenoîtBonduelle SARL

61.10% 17.67%

95%

21,23%

5%Bonduelle SA

FinancièreBonduelle Dalle

InstitutionnelsOther family shareholders

Institutional investors

BonduelleDalle SCA

Pierre and BenoîtBonduelle SARL

Employee investment funds and others


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Change in share capital

Successive CumulatedNominal amounts number

Year Transaction amount Premium of capital of shares

As at 01/01/1993 307,392,400 439,132

(in French francs)

1995 Buy-back of 68,068 shares (47,467,600) (95,295,200) 259,744,800 371,0641997 Capitalization of reserves

and raising of the nominal value from FRF 700 to FRF 760 22,263,840 282,008,640 371,064Division of the nominal value from FRF 760 to FRF 40 282,008,640 7,050,216Acquisition merger of FinancièreBonduelle Dalle and creation of 146,325 shares 5,853,000 6,303,103 287,861,640 7,196,541Contribution of Bonduelle SAshares by FCP Bonduelle Valeurs 10,372,880 14,938,800 298,234,520 7,455,863Contribution of Bonduelle SA shares by employees and others 7,142,720 10,675,640 305,647,240 7,641,181

1998 Issue of 358,819 shares 14,352,760 30,499,615 320,000,000 8,000,000(in euros)

2001 Capitalization of FRF 47,335,920 deductedfrom the share premium account in view of conversion into euros 56,000,000 8,000,000

2005 Capital increase followingthe merger with Montecourt 2,068,948 17,269,806 58,068,948 8,295,564Cancellation of shares received by the company during its mergerwith Montecourt (2,068,948) (17,269,806) 56,000,000 8,000,000


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Statutory Auditors’ fees

Fees paid to Statutory Auditors

French law requires a permanent legal control by two independent Statutory Auditors. The main objective of this audit isto check that the financial statements are consistent, sincere and give a true picture.

The Statutory Auditors are appointed by the General Meeting of Shareholders for a renewable period of six financial years.

The Statutory Auditors of Bonduelle SCA are:

Mazars & Guérard

Represented by Philippe Bouillet 39, rue de Wattignies – 75012 Paris

Alternate Auditor: M. Denis Grison, Immeuble Exaltis – 61, rue Henri Regnault – 92075 Paris-La Défense

KPMG Audit – Division of KPMG S.A.

Represented by Christian de Brianson 159, avenue de la Marne – 59705 Marcq-en–Barœul Cedex

Alternate Auditor: M. Guy Carton 159, avenue de la Marne – 59705 Marcq-en–Barœul Cedex

There is no legal or economic dependence between the two auditors.

They were appointed by the Ordinary General Meeting of 13 December 2000 and their terms will continue until the GeneralMeeting to approve the accounts of the year ended 30 June 2006.

The following table breaks down the total fees paid by Bonduelle Group to its Statutory Auditors and external auditors in2005/2006. It must be pointed out that Bonduelle SCA consolidates 43 subsidiaries in 18 countries. The financial statementsof each subsidiary are audited in their country by external auditors who belong to major audit networks.

Table of fees paid to the group’s Statutory Auditors

Fiscal 2005/2006 (in thousands of euros) Mazars KPMG Others Total

1) Audit servicesa) Statutory Auditors

France 364 428 41 832Outside France 468 68 536

b) Other additional assignments - 9 9Sub-total of audit services 831 505 41 1,377* 2) Consulting services a) Legal, fiscal and labor-related 15 - - 15Sub-total of consulting services 15 - - 15

GRAND TOTAL 847 505 41 1,393

* Of which €175,000 for the adoption of IFRS.

Notes


“Vegetables for healthy living”

Financial report 2005/2006

Rue Nicolas Appert - BP 3017359653 Villeneuve-d’Ascq Cedex France

Tel.: +33 (0)3 20 43 60 60Fax: +33 (0)3 20 43 60 00

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"Vegetables for healthy living"

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Transcript of "Vegetables for healthy living"