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(a public limited liability company under Belgian law, with registered office at Romenstraat 3, 8840 Westrozebeke, Belgium

)

Pinguin NV

PUBLIC OFFERING OF NEW SHARES
WITH VVPR STRIPS WITHIN THE FRAMEWORK OF A CAPITAL INCREASE IN CASH WITH PREFERENTIAL RIGHTS, FOR AN AMOUNT OF UP TO 46 MILLION EURO
Pinguin NV offers New Shares without nominal value with VVPR Strips within the framework of a capital increase in cash with Preferential Rights. The intention of the public offering is to finance part of the acquisition price of the Lutosa Group by Pinguin NV as explained in the Prospectus. The subscription to the New Shares is, in accordance with conditions specified in the Prospectus, reserved to the Existing Shareholders and holders of Preferential Rights at an Issue Price and at a subscription ratio, which will be made public, in principle on 26 October 2007, in the form of a supplement to the Prospectus. The Preferential Rights attached to the Existing Shares will be separated after closing of the stock exchange on 26 October 2007 and will be separately negotiable throughout the Subscription Period. Shareholders and holders of Preferential Rights who have not exercised their Preferential Rights at the latest on 12 November 2007 can no longer do so after this date. Unexercised Preferential Rights will be automatically converted at the end of the Subscription Period into so-called Scrips and placed with Food Invest International NV as explained in this Prospectus.

WARNING
Investment in the Shares involves substantial risks. Investors should have regard to the risks described in the chapter “Risk Factors”.

ADMISSION TO EUROLIST BY EURONEXT OF EURONEXT BRUSSELS OF THESE NEW SHARES AND VVPR STRIPS ADMISSION TO EUROLIST BY EURONEXT OF EURONEXT BRUSSELS OF 1,682,368 EXISTING SHARES ISSUED WITHIN THE FRAMEWORK OF A PRIVATE PLACEMENT ON 26 OCTOBER 2006 ADMISSION TO EUROLIST BY EURONEXT OF EURONEXT BRUSSELS OF 1.176.470 SHARES AND VVPR STRIPS ISSUED WITHIN THE FRAMEWORK OF A CAPITAL INCREASE IN CASH WITHIN THE AUTHORISED CAPITAL FOR AN AMOUNT OF 19.999.990 EURO

Joint Lead Managers

Selling agents

Prospectus 18 October 2007

Table of Contents
I A B C D E F G II A B III A. B. C. D. E. F. 1. 1.1 1.2 1.3. 1.4. 2. SUMMARY OF THE PROSPECTUS............................................................................................... 1 INFORMATION ABOUT THE ISSUER ............................................................................................. 1 DEFINITION OF THE MOST IMPORTANT TERMS OF THE PROSPECTUS ................................ 2 CORE DETAILS OF THE OFFERING ................................................................................................ 5 SELECTED FINANCIAL INFORMATION AND MD&A ................................................................. 9 KEY DATA REGARDING THE APPLICATION FOR ADMISSION TO TRADING ON EUROLIST BY EURONEXT BRUSSELS OF THE SHARES ISSUED ON 26 OCTOBER 2006 .... 20 KEY DATA REGARDING THE APPLICATION FOR ADMISSION TO TRADING ON EUROLIST BY EURONEXT BRUSSELS OF THE G&L SHARES................................................. 22 DILUTION.......................................................................................................................................... 23 RISK FACTORS ............................................................................................................................... 25 RISK FACTORS ASSOCIATED WITH THE ISSUER ..................................................................... 25 RISK FACTORS ASSOCIATED WITH THE NEW SHARES.......................................................... 32 GENERAL COMMUNICATIONS ................................................................................................. 33 APPROVAL BY THE BANKING, FINANCE AND INSURANCE COMMISSION........................ 33 PRELIMINARY WARNING ............................................................................................................. 33 RESTRICTIONS ON THE OFFERING AND ON THE DISTRIBUTION OF THE PROSPECTUS.................................................................................................................................... 33 FORWARD LOOKING STATEMENTS ........................................................................................... 36 SECTOR INFORMATION, MARKET SHARE, RANKING AND OTHER DATA ......................... 36 ROUNDING OFF FINANCIAL AND STATISTICAL DATA.......................................................... 36 GENERAL INFORMATION AND INFORMATION CONCERNING RESPONSIBILITY FOR THE PROSPECTUS AND FOR AUDITING THE ACCOUNTS....................................... 37 RESPONSIBILITY FOR THE CONTENT OF THE PROSPECTUS................................................. 37 RESPONSIBILITY FOR AUDITING THE ACCOUNTS ................................................................. 37 AVAILABLE INFORMATION ......................................................................................................... 38 COMPANY DOCUMENTS AND OTHER INFORMATION ........................................................... 38 GENERAL INFORMATION REGARDING THE OFFER, THE PRIVATE PLACEMENTS AND THE ADMISSION TO LISTING ON EUROLIST BY EURONEXT BRUSSELS ........................................................................................................................................ 39 BASIC INFORMATION .................................................................................................................... 39
Operating capital ..................................................................................................................................................39 Equity capital and net financial debt.....................................................................................................................39

2.1
2.1.1 2.1.2

2.2
2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.2.6 2.2.7 2.2.8 2.2.9 2.2.10 2.2.11 2.2.12 2.2.13 2.2.14 2.2.15 2.2.16 2.2.17

INFORMATION ABOUT THE OFFER............................................................................................. 40
Motives for the Offer and use of proceeds from the issue......................................................................................40 Conditions governing the Offer.............................................................................................................................40 Value of the Offering .............................................................................................................................................40 Subscription Procedure.........................................................................................................................................40 Withdrawal and Suspension of the Offering..........................................................................................................41 Offer Price for New Shares ...................................................................................................................................41 Allocation of Shares ..............................................................................................................................................41 Withdrawal of Subscription...................................................................................................................................41 Payment and Delivery of the New Shares .............................................................................................................42 Publication of Results............................................................................................................................................42 Procedure for exercising and tradability of the Preferential Rights .....................................................................42 Calendar ...............................................................................................................................................................42 Plan for the distribution and allocation of the Shares...........................................................................................42 Determination of the price ....................................................................................................................................43 Placement and guarantee of the successful outcome.............................................................................................43 Interest of natural and legal persons involved in the Offering ..............................................................................43 Underwriting Agreement.......................................................................................................................................44

2.3
2.3.1 2.3.2 2.3.3

PRIVATE PLACEMENT OF 26 OCTOBER 2006 – ISSUE OF 1,682,368 SHARES ....................... 44
Capital increase by contribution in cash...............................................................................................................44 Objective of the action...........................................................................................................................................45 Changes of control after the extraordinary general shareholder’s meeting of 26 October 2006: transactions at 21 December 2006 and 30 August 2007............................................................................................................45

2.4
2.4.1 2.4.2

PRIVATE PLACEMENT OF G&L SHARES .................................................................................... 49
Capital increase as a result of contribution in cash..............................................................................................49 Purpose of the act..................................................................................................................................................49

2.4.3

Results of the afore-mentioned capital increase....................................................................................................49

2.5
2.5.1 2.5.2 2.5.3 2.5.4 2.5.5

INFORMATION ABOUT THE EFFECTS THAT WILL BE OFFERED AND/OR ADMITTED AS SHARES FOR TRADE ON EUROLIST BY EURONEXT BRUSSELS ..................................... 49
Nature and form of the New Shares ......................................................................................................................49 Rights that are attached to the Shares...................................................................................................................50 Disclosure of significant participations ................................................................................................................56 Regulations concerning obligatory disclosure of takeover and buy-out bids ........................................................56 Belgian tax system.................................................................................................................................................57

2.6.
2.6.1. 2.6.2. 2.6.3. 2.6.4. 2.6.5.

ADMISSION TO TRADING AND TRADING PROVISIONS.......................................................... 61
Admission to trading .............................................................................................................................................61 Listing location......................................................................................................................................................61 Simultaneous applications for listing ....................................................................................................................61 Liquidity contract ..................................................................................................................................................61 Stabilisation – Interventions on the market ...........................................................................................................62

2.7. 2.8. 2.9. 3. 3.1. 3.2.
3.2.1. 3.2.2. 3.2.3. 3.2.4. 3.2.5. 3.2.6. 3.2.7.

HOLDERS OF SHARES WHO WISH TO SELL THEM................................................................... 62 EXPENSES RELATED TO THE ISSUE AND/OR TO THE OFFERING......................................... 62 DILUTION.......................................................................................................................................... 63 GENERAL INFORMATION ABOUT THE COMPANY AND ITS SHARE CAPITAL.......... 65 HISTORY AND KEY EVENTS IN THE DEVELOPMENT OF PINGUIN’S ACTIVITIES ............ 65 GENERAL INFORMATION ............................................................................................................. 66
Corporate name ....................................................................................................................................................66 Registered office....................................................................................................................................................66 Founding, amending the bylaws and term.............................................................................................................66 Register of Legal Entities ......................................................................................................................................67 Legal Form............................................................................................................................................................67 Financial Year.......................................................................................................................................................67 Corporate purpose ................................................................................................................................................67

3.3. 3.4.
3.4.1. 3.4.2. 3.4.3. 3.4.4. 3.4.5. 3.4.6. 3.4.7. 3.4.8. 3.4.9. 3.4.10. 3.4.11.

GROUP STRUCTURE ....................................................................................................................... 68 THE COMPANY’S CAPITAL ........................................................................................................... 68
Authorized capital .................................................................................................................................................68 Authorized share capital .......................................................................................................................................68 Adjustments to capital ...........................................................................................................................................69 Shareholders .........................................................................................................................................................70 Identification of the holding company that acquired control de jure of Pinguin NV.............................................71 Voting rights of key Shareholders .........................................................................................................................72 Shareholder agreements........................................................................................................................................72 Shares held by company in its own capital............................................................................................................73 Employee share option plans ................................................................................................................................73 Bonds with warrants..............................................................................................................................................73 Share Price History...............................................................................................................................................75

4. 4.1.
4.1.1. 4.1.2. 4.1.3. 4.1.4.

CORPORATE GOVERNANCE ..................................................................................................... 76 BOARD OF DIRECTORS.................................................................................................................. 76
General provisions concerning the Board of Directors ........................................................................................76 Composition of the Board of Directors .................................................................................................................76 Committees............................................................................................................................................................80 Remuneration of the Board of Directors ...............................................................................................................81

4.2.
4.2.1.

MANAGEMENT COMMITTEE ....................................................................................................... 81
Compensation of members of the Management Committee...................................................................................82

4.3.
4.3.1. 4.3.2.

COMPENSATION POLICY OF THE COMPANY ........................................................................... 82
Compensation policy for directors ........................................................................................................................82 Compensation policy for members of the Management Committee.......................................................................83

4.4.
4.4.1. 4.4.2.

SHARES AND WARRANTS OF DIRECTORS AND MEMBERS OF THE EXECUTIVE MANAGEMENT................................................................................................................................ 83
Shares and warrants held by directors..................................................................................................................83 Shares held by executive management ..................................................................................................................84

4.5. 4.6.
4.6.1. 4.6.2. 4.6.3.

STATUTORY AUDITOR .................................................................................................................. 84 TRANSACTIONS WITH AFFILIATED COMPANIES.................................................................... 85
General .................................................................................................................................................................85 Directors conflicts of interest ................................................................................................................................85 Transactions with affiliated corporations .............................................................................................................86

4.7.
4.7.1. 4.7.2.

RELATIONS WITH KEY SHAREHOLDERS .................................................................................. 86
The mediation of Food Invest International NV in the takeover of the Lutosa Group...........................................86 Property transaction, management agreements, lease agreements, debts.............................................................87

5. 5.1.
5.1.1. 5.1.2.

PINGUIN ACTIVITIES................................................................................................................... 89 COMPANY PROFILE........................................................................................................................ 89
Pinguin - Vegetable specialist ...............................................................................................................................90 Lutosa – Potato specialist .....................................................................................................................................90

5.2.
5.2.1. 5.2.2. 5.2.3. 5.2.4. 5.2.5. 5.2.6. 5.2.7.

PINGUIN - VEGETABLE SPECIALIST ........................................................................................... 91
Product line...........................................................................................................................................................91 Purchasing ............................................................................................................................................................92 Production processes and facilities.......................................................................................................................93 Quality...................................................................................................................................................................95 Sales organization.................................................................................................................................................95 Customers..............................................................................................................................................................96 Market description ................................................................................................................................................97

5.3.
5.3.1. 5.3.2. 5.3.3. 5.3.4. 5.3.5. 5.3.6. 5.3.7.

LUTOSA -POTATO SPECIALIST .................................................................................................. 101
Product line.........................................................................................................................................................101 Purchasing ..........................................................................................................................................................103 Production process and facilities ........................................................................................................................103 Quality.................................................................................................................................................................106 Sales organization...............................................................................................................................................106 Customer portfolio ..............................................................................................................................................107 Description of the market....................................................................................................................................108

5.4.
5.4.1. 5.4.2. 5.4.3.

EMPLOYEES ................................................................................................................................... 110
Vegetable division ...............................................................................................................................................110 Potato division ....................................................................................................................................................110 Management: Pinguin .........................................................................................................................................111

5.5. 6. 6.1
6.1.1. 6.1.2.

STRATEGY...................................................................................................................................... 113 DISCUSSION AND ANALYSIS OF THE FINANCIAL SITUATION AND OPERATING RESULT BY THE MANAGEMENT............................................................................................ 115 INCOME STATEMENT AND BALANCE SHEET OF PINGUIN ................................................. 115
Income statement of Pinguin NV .........................................................................................................................116 Balance sheet of Pinguin NV...............................................................................................................................121

6.2
6.2.1. 6.2.2.

PRO FORMA FINANCIAL STATEMENTS OF PINGUIN NV + LUTOSA .................................. 125
Income statement in accordance with IFRS ........................................................................................................126 Balance sheet in accordance with IFRS ..............................................................................................................130

6.3
6.3.1. 6.3.2. 6.3.3.

ACQUISITIONS OF PADLEY AND SALVESEN.......................................................................... 135
Acquisition of certain activities and assets of Padley Vegetables on 1 June 2007 ..............................................135 Acquisition of certain activities of Christian Salvesen’s segment “Salvesen Food”...........................................136 Pro forma consolidated financial information for Pinguin and Lutosa in 2006, with additional estimates relating to the impact of the recent acquisitions of part of the activities of Padley Vegetables and Christian Salvesen Foods....................................................................................................................................................136 Additional comments with regard to the inclusion of the acquired assets of Padley Vegetables and Salvesen in the context of the abovementioned asset deals in the pro forma figures..........................................................139

6.3.4

6.4 7. 7.1.
7.1.1. 7.1.2. 7.1.3. 7.1.4.

SIGNIFICANT EVENTS SINCE 1 JULY 2007 AND OUTLOOK FOR 2007 AND BEYOND ...... 140 FINANCIAL INFORMATION ..................................................................................................... 144 CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL YEARS 2004/2005, 2005/2006 AND 2006/2007 ................................................................................................................................ 144
Consolidated Income Statement Pinguin NV.......................................................................................................144 Consolidated balance sheet.................................................................................................................................145 Consolidated Equity Statement Pinguin NV ........................................................................................................146 Consolidated cash flow statement Pinguin NV....................................................................................................147

7.2.
7.2.1. 7.2.2. 7.2.3. 7.2.4. 7.2.5. 7.2.6. 7.2.7. 7.2.8. 7.2.9. 7.2.10. 7.2.11. 7.2.12. 7.2.13.

FINANCIAL REPORTING PRINCIPLES ....................................................................................... 148
Declaration of conformity ...................................................................................................................................148 Consolidation principles .....................................................................................................................................149 Conversion of foreign currencies ........................................................................................................................150 Segmented information........................................................................................................................................151 Non-current assets held for sale and discontinued operations............................................................................151 Intangible assets..................................................................................................................................................151 Goodwill..............................................................................................................................................................152 Property, plant and equipment ............................................................................................................................152 Leasing................................................................................................................................................................153 Impairment of tangible and intangible fixed assets .............................................................................................154 Inventories...........................................................................................................................................................154 Financial assets...................................................................................................................................................154 Trade and other receivables................................................................................................................................155

7.2.14. 7.2.15. 7.2.16. 7.2.17. 7.2.18. 7.2.19. 7.2.20. 7.2.21. 7.2.22. 7.2.23. 7.2.24. 7.2.25. 7.2.26. 7.2.27.

Cash and cash equivalents ..................................................................................................................................155 Equity instruments...............................................................................................................................................155 Provisions............................................................................................................................................................155 Employee benefits................................................................................................................................................156 Equity instruments and interest-bearing liabilities: the distinction.....................................................................157 Bank loans...........................................................................................................................................................157 Subordinated bond loans.....................................................................................................................................157 Trade and other payables....................................................................................................................................157 Derivatives ..........................................................................................................................................................158 Income taxes........................................................................................................................................................158 Revenue ...............................................................................................................................................................159 Financing costs ...................................................................................................................................................159 Post-balance sheet events....................................................................................................................................159 Use of estimates...................................................................................................................................................159

7.3.
7.3.1. 7.3.2. 7.3.3. 7.3.4. 7.3.5. 7.3.6. 7.3.7. 7.3.8. 7.3.9. 7.3.10.

NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS 2005/2006 AND 2004/2005............. 160
Segment reporting ...............................................................................................................................................160 Discontinued reporting .......................................................................................................................................163 Income statement items .......................................................................................................................................164 Balance sheet items .............................................................................................................................................168 Other elements ....................................................................................................................................................180 Pending disputes .................................................................................................................................................181 Commitments.......................................................................................................................................................182 Related parties ....................................................................................................................................................183 Events since the balance sheet date.....................................................................................................................185 Non-audit missions undertaken by the statutory auditor + related parties .........................................................185

7.4.
7.4.1. 7.4.2. 7.4.3. 7.4.4. 7.4.5. 7.4.6. 7.4.7. 7.4.8. 7.4.9. 7.4.10. 7.4.11. 7.4.12. 7.4.13. 7.4.14. 7.4.15. 7.4.16. 7.4.17. 7.4.18. 7.4.19. 7.4.20. 7.4.21. 7.4.22. 7.4.23. 7.4.24. 7.4.25. 7.4.26. 7.4.27. 7.4.28. 7.4.29. 7.4.30. 7.4.31. 7.4.32. 7.4.33. 7.4.34.

NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS 2005/2006 AND 2006/2007 ........... 188
Fully consolidated subsidiaries...........................................................................................................................188 Segmented information........................................................................................................................................189 Discontinued operations .....................................................................................................................................193 Sales, negative goodwill recognised in the income statement and other operating income ................................194 Operating Charges..............................................................................................................................................195 Operating result (EBIT) ......................................................................................................................................196 Financial income and expenses...........................................................................................................................196 Income taxes........................................................................................................................................................197 Earnings per share ..............................................................................................................................................198 Intangible assets..................................................................................................................................................198 Tangible fixed assets ...........................................................................................................................................199 Inventories...........................................................................................................................................................202 Available-for-sale financial assets ......................................................................................................................202 Long term receivables (> 1 year)........................................................................................................................203 Deferred tax assets (liabilities): ..........................................................................................................................203 Trade and other receivables................................................................................................................................204 Cash and cash equivalents ..................................................................................................................................205 Deferred charges and accrued income................................................................................................................205 Subscribed capital ...............................................................................................................................................205 Own shares..........................................................................................................................................................206 Dividends ............................................................................................................................................................207 Stock option and warrant plans...........................................................................................................................207 Minority interests ................................................................................................................................................207 Provisions............................................................................................................................................................208 Pension obligations .............................................................................................................................................208 Interest-bearing liabilities...................................................................................................................................208 Trade and other payables (short-term) ...............................................................................................................210 Accrued charges and deferred income ................................................................................................................211 Pending Obligations............................................................................................................................................211 Commitments.......................................................................................................................................................212 Related parties ....................................................................................................................................................213 Event after the balance sheet date.......................................................................................................................215 Non-audit tasks undertaken by the statutory auditor + related parties...............................................................215 Risk Management Policy .....................................................................................................................................215

7.5.
7.5.1. 7.5.2. 7.5.3.

STATUTORY AUDITOR’S REPORT............................................................................................. 218
Statutory auditor’s report on the consolidated statements for the year ending 30 June 2007.............................218 Statutory auditor’s report on the consolidated financial statements for the year ended 30 June 2006 ...............219 Explanatory note of the auditor with respect to the comparative figures per June 30, 2005 ..............................220

7.6.
7.6.1. 7.6.2.

RESTATEMENT OF PINGUIN’S AND LUTOSA’S FINANCIAL STATEMENTS ...................... 222
Restatement of Pinguin’s financial statements by calendar year instead of by financial year ............................222 Recalculation of Lutosa’s financial statements based on IFRS instead of BE GAAP..........................................223

............ ...............................................................................................9.........................244 ........................................2.............................. 230 General .......................2........234 7....... 7.... ................... PRO FORMA CONSOLIDATED FINANCIAL INFORMATION 2006/2007...........................................................................9.......................... REPORT OF THE STATURORY AUDITOR’S REPORT ON THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION ...242 Financial Data Padley Vegetables ......................................... PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR PINGUIN AND LUTOSA IN 2006 SUPPLEMENTED WITH ESTIMATES RELATING TO THE IMPACT OF THE RECENT ACQUISITIONS OF PART OF THE ACTIVITIES OF PADLEY VEGETABLES AND CHRISTIAN SALVESEN FOODS............................. 7.......9.............. 7..............................9.........................................7.....................9..............7............1........................................ 241 242 7...............230 Pro forma consolidated balance sheet of the Pinguin Group (including acquisition of the Lutosa Group) at 31 December 2006 and at 30 June 2007 ............................4............ 7..............242 Financial Data Christian Salvesen Foods.....................243 Evolution of the various balance sheet items .............. 7...............7... 7.....8....1........................ The financial data relating to the acquired activities of Padley Vegetables and Christian Salvesen Foods..7.........3............

.

customer care and service.I SUMMARY OF THE PROSPECTUS This summary must be read as an introduction to the Prospectus. Following those acquisitions. To differentiate Pinguin clearly from its competitors more and more was invested in quality control. non-audited turnover of 330 million Euros (excluding Salvesen Foods and Padley Vegetables). incorrect or contradictory with other statements in the Prospectus. In 2007. A INFORMATION ABOUT THE ISSUER General description Pinguin is in the first place a vegetable specialist. it is possible that the investor as a claimant must pay the cost of the translation of this Prospectus under the appropriate legislation of the Member State in which the claim is filed before the legal action is started. Salvesen. and to continue to play a leading role in a European consolidation movement that is in progress. To be able to take advantage of new takeover opportunities. If in connection with the information in this Prospectus a claim is filed with a court in a Member State of the European Economic Area. ranging from basic fresh frozen vegetables in all possible forms to culinary. Pinguin completed a number of acquisitions including Padley Vegetables. its geographical distribution. In this summary and elsewhere in the Prospectus certain terms and expressions are used. its know-how and its production resources. it is a suitable partner to offer a complete solution to the vegetable and potato market. In the 2006 calendar year. After its successful restructuring. Pinguin is convinced that because of its extensive product range. automation and modernization was instigated. they must be read and understood as under section B of this summary. The transaction created a new dynamic within Pinguin and allowed it to increase carefully the level of investment in new infrastructure over the following years. which has set itself the goal of offering a range of quality vegetable solutions (“Vegetable Solutions”) to several types of customer. Founded in 1968 in Westrozebeke. it does not contain all the information that can be important for investors and must therefore be read with the more detailed information and the appendices of this Prospectus. It includes certain essential information of this Prospectus. and the Lutosa Group. A decade of optimization. The vegetable group has more than 2. the Company was given a new élan as from 1990 with the new generation of the family Dejonghe which took over the management of the Company and profoundly changed the strategy.000 product specifications. The deep freezing process is thereby the underlying production technique. the group realized a pro forma. The Company cannot be held civilly liable for the contents of the summary or its translation unless these contents or the summary would be misleading. 1 . The production-oriented policy was transformed into a customer-oriented policy. France and the United Kingdom. Unless the context in which these terms and expressions are used does not allow it or unless these terms or expressions are defined otherwise. Pinguin wishes to play a further leading role. Investors must base their decision to subscribe to the New Shares on a thorough review of the Prospectus and not only on this summary. as the first within the sector in Belgium to gather fresh capital on the Brussels stock exchange. Pinguin also shifted its emphasis from volume production to more quality and profitability. ready-to-eat vegetable preparation and ready-to-eat meals (“Convenience Cuisine”). in 1999 the management of Pinguin NV decided. However. Pinguin has 12 facilities spread over Belgium. Pinguin has been well placed to benefit from this momentum in order to lay the foundation for a stable and more profitable growth.

The current 6. the majority shareholder. representative of STAK.. non-executive.676. a company under the laws of England and Wales. represented Herwig Dejonghe. non-executive director. • Vijverbos NV. directors of the Company The Board of Directors of Pinguin NV consists of: • The Marble BVBA. non-executive. CFO.O. represented by Herwig Dejonghe.95. • Olivier Gemin. • Management Deprez BVBA. BVBA.S. represented by Koen Dejonghe. • Fortis Private Equity Belgium NV. auditor. • M.2. CEO.Share capital Before the decision to increase the capital. represented by Frank Meysman. non-executive director. B DEFINITION OF THE MOST IMPORTANT TERMS OF THE PROSPECTUS Calendar Indicative timetable for the offering. the majority shareholder.Structure The Company is a public limited liability company. • The New mile BVBA. The statutory auditor of the company is Deloitte Bedrijfsrevisoren BV o.12. the majority shareholder. executive director. represented by 6.T. represented by Peter Ohms.v.676. described in point 2. this date is according to the calendar 12 November 2007. The management committee consists of the following persons: • Vijverbos NV. . • Peca Management BVBA.855.085 shares with voting right and without designation of nominal value. adjustable to unforeseen circumstances. non-executive director.935. represented by Mr Mario Dekeyser. with registered offices at Salvesen House. represented by Veerle Deprez. independent director.085 shares (issued including the shares on the Christian Salvesen Foods/Salvesen Closing date of the Offering Existing Shareholders Existing shares 2 . non-executive director. Last day on which the Existing Shareholders and other investors with Preferential rights can submit their subscription orders for the New Shares. .General information .e. CVBA. President/non-executive. represented by Steven D’haene. • Jo Breesch. independent director.v. independent director. representative of STAK. COO. representative of STAK. Christian Salvesen Foods was a division of Salvesen Logistics Limited. under registry number 346268. represented by Jan Bergers. • Patrick Moermans. the share capital of Pinguin NV amounted to EUR 48.Board of Directors. • Kofa BVBA. Managing Director. New Duston Northampton NN5 7 SL (United Kingdom). The holders of Existing Shares. represented by Luc Van Nevel. Lodge Way.

in the register of legal entities of the Kruispuntbank van Ondernemingen under company number 0402.297. and with VAT number BE-0446. a company under the laws of England and Wales. formerly registered in the trade register in Brussels under number 360. with registered office at 1080 Brussels.226. and its branches and subsidiaries.occasion of the private placement of 26 October 2006 and excluding the G&L shares). Holders of Shares have a Preferential right that allows them to subscribe to the New Shares on a capital increase in cash in proportion to that part of the capital which is represented by their G&L shares Issue price Joint Lead Managers KBC PE Lur Berri Lutosa Group or Lutosa New Shares Offering Opening date of the Offering Padley Vegetables Pinguin. The 1. private and institutional. The group of companies consisting of G&L Van den Broeke NV. in the register of legal entities of the Kruispuntbank van Ondernemingen under company number 0446.782. 80 Mount Street. The Shares that are issued within the framework of this Offering. Drevendaal 1.157. Pinguin NV. The public limited liability company named Pinguin registered under Belgian law.228. Nottingham NG1 6HH (United Kingdom).729.176. company or Issuer Preferential rights 3 .184. The Société Agricole à Capital Variable Lur Berri. Vanelo NV.738. in the register of legal entities of the Kruispuntbank van Ondernemingen under company number 0403. with its registered offices at Cumberland Court. a company under French law. 8840 Westrozebeke. according to the calendar this is 29 October 2007. Food Invest International NV A public limited liability company registered under Belgian law. with registered office at Romenstraat 3.409.729. Date from when the Existing Shareholders and other investors with preferential rights can submit their subscription orders for the New Shares. in the trade register at Bayonne under number D. ING Belgium NV. and with VAT number BE-0403.470 shares that will be issued as part of a private placement and will be underwritten by the Van den Broeke family or a company controlled by them. with registered office at F-64120 Aicirits (French Republic). Route de Sauveterre. KBC Private Equity.777. with registered office at 1000 Brussels. This public offering for subscription for New Shares within the framework of a capital increase of the Company. Havenlaan 12. Sint-Goedeleplein 19.226. and will be announced in the form of a supplement to the Prospectus at the latest on the trading day before the Opening date of the offering. This price applies for all investors. Lutosa Sarl. Lutosa Express NV. The price at which each New Share is offered. a company registered under Belgian law. with registered office seat at 2860 Sint-Katelijne-Waver.369. Marnixlaan 24 and Petercam NV. with registered office at 1000 Brussels.738.228. GW Padley Vegetables Ltd. formerly registered in the trade register at Mechelen under number 80.. under registry number 679178. Moerbos NV.

Scrips Shares STAK Subscription period Syndicate Underwriting Agreement Van den Broeke family VVPR Strips 4 . will be divided proportionally between all Existing Shareholders who have not exercised their Preferential rights. The Preferential rights that were not exercised during the Subscription period. VVPR strips can be traded separately.4 infra. 9870 Zulte. as approved by the CBFA on 18 October 2007. and that in accordance with the Underwriting Agreement will be bought and exercised by Food Invest International NV and for which the net proceeds from the sale. Food Invest International NV and the Joint Lead Managers. Prospectus This document. KBC Securities and Bank Degroof.2. ING Belgium. VVPR strips give certain holders the right to a reduced withholding tax on dividends (15% instead of 25%). Petercam. after deducting expenses. Preferential rights.17. a foundation under Dutch law. The Stichting Administratiekantoor Pinguin. with registered office at NL-1183 DJ Amstelveen (the Netherlands) and at NL-1105 BH Amsterdam Zuidoost (the Netherlands). The period from 29 October 2007 to and including 12 November 2007 in which the subscription for the New Shares is reserved for Existing Shareholders and investors who have acquired Preferential rights on Eurolist by Euronext Brussels.Existing Shares: x existing shares give the right to subscribe to y New Shares within the framework of this Offering. as described in point 2. 8500 Kortrijk and Grote Steenweg 139. drafted with a view to this Offering and on the admission of the New Shares. The shares that represent the capital. the G&L Shares. This ratio will be published at the latest on the trading day before the Opening date of the Offering in the form of a supplement to the Prospectus. VVPR strips and Shares created within the framework of a private placement on 26 October 2006 on Eurolist by Euronext Brussels. Paasheuvelweg 16. with voting rights and without designation of nominal value. The contents of this agreement are discussed in point 2.2. registered in the trade register of the Kamer van Koophandel en Fabrieken (Chamber of Commerce and Factories) for Amsterdam under number 34116253. The New Shares and the G&L shares will issued with a VVPR strip. On the basis of the Underwriting Agreement. charges and all forms of expenditure which the Company had had to incur for this. issued by Pinguin NV. Food Invest International NV undertakes on the closure of the Offering to purchase all non-exercised preferential rights that are represented by Scrips and to exercise them. Messrs Guy and Luc Van den Broeke resided respectively at Leonard Vandorpestraat 15. The agreement between the Company.

and Guy and Luc Van den Broeke each hold 25% (in accordance with the procedure provided by Article 523 and 524 of the Belgian Companies Code). The majority shareholder STAK has undertaken to exercise its Preferential rights. The balance of the takeover price will be financed with a combination of long-term credit. prescribed by Article 593 of the Belgian Companies Code Determination of the Issue price Publication of the Prospectus and the supplement to the Prospectus (with the Issue price) Opening of the subscription with Preferential rights Closure of the subscription with Preferential rights Accelerated private placement of the non-exercised preferential rights in the form of Scrips Allocation of the Scrips and subscription on the basis thereof Publication of the results of the subscription with Preferential rights and with Scrips and of the results of the sale of Scrips Payment by the subscribers of the subscription price Determination of the capital increase Delivery of the New Shares to the subscribers Admission to trading of the New Shares on Eurolist by Euronext Brussels 4 October 2007 18 October 2007 26 October 2007 26 October 2007 29 October 2007 12 November 2007 13 November 2007 13 November 2007 16 November 2007 16 November 2007 16 November 2007 16 November 2007 16 November 2007 Price of the Offering The price at which the New Shares will be offered is the Issue price. the expenses for printing and translating the Prospectus. a company in which Food Invest International holds 50% of the shares. Pinguin takes a major step forwards and widens its range with chilled and deep frozen potato products. The remuneration of the Joint Lead Managers has been fixed at EUR 650. legal and administrative expenses and publication expenses. reinforces the Pinguin organization even further. The purchase of all the shares of the Lutosa Group will financed partly by the capital increase by EUR 20 million to the benefit of the Van den Broeke family at a price of EUR 17 per share. Pinguin NV is paying EUR 175 million for all shares of the Lutosa Group. technology. the securitization of trade receivables and the sale and rent-back of the real estate of the Lutosa Group by a banking consortium to Les Pres Sales. and R&D. The expenses associated with this Prospectus (and the private placings described in it and the Offering) are estimated at EUR 1 million and include among other things the compensations liable to CBFA and Euronext Brussels. Calendar of the offering Decision by the Extraordinary General Meeting of Shareholders to increase the capital Publication in the press of the announcement. This transaction was completed on 28 September 2007. the remuneration of the financial intermediaries. 5 . and partly the capital increase of maximum EUR 46 million which will be offered to all shareholders. Food Invest International NV guarantees the successful completion of this capital increase. and its extensive commercial network. The financial resources from the sale and rent back transaction amount to EUR 45 million.C CORE DETAILS OF THE OFFERING Purpose of the offering On 26 June 2007 Pinguin NV reached an agreement with the Van den Broeke family concerning the purchase of all the shares of the Lutosa Group. production. The competencies of Lutosa in the area of agronomy. Through the acquisition.000.

The Company will apply the proceeds from the sale of these Scrips for the benefit of the Existing Shareholders who have neither exercised their rights nor transferred them during the subscription period. 6 . The preferential right will be materialized by coupon no. 4 of the Shares. in principle on 13 November 2007. Proceeds of the Offering The issue amount amounts to a maximum of EUR 46 million. The selling price of the Scrips will be determined in consultation between the Company and the Joint Lead Managers based on the theoretical value of the subscription rights calculated on the basis of the Issue price and the average of the daily weighed average value (“VWAP”) of the Share on Eurolist by Euronext Brussels during the Subscription period divided by the number of Existing Shares necessary to be able to subscribe for one New Share1. the net proceeds of the Offering can be estimated at an amount in the order of EUR 45 million. Food Invest International NV and the Joint Lead Managers. in principle on 26 October 2007. Payment will be made upon the tender or surrender of Coupon no. 4. 4 of the Shares. at the latest on the trading day that immediately precedes the opening of the subscription. concluded between the Company. The VWAP of the Share will be limited to the average value of the Share during the thirty days before the day of purchase of the Scrips. For costs and procedures concerning these payments. in the form of coupon no. Duration of the Offering The Offering will remain open from 29 October 2007 up to and including 12 November 2007. can no longer exercise them after that date. Conditions of the Offering The subscription for New Shares is preferably reserved to the holders of the Existing Shares. Those Shareholders who have not exercised their Preferential right. After deducting the commissions and the expenses of the Offering for which the Company is liable. Food Invest International NV has undertaken to purchase after closing of the Offering all non-exercised preferential rights that will be represented by Scrips and to exercise them. will be removed on 26 October 2007 after the closure of Euronext Brussels and can be traded on Euronext Brussels throughout the entire Subscription period.The Issue price will be determined by the Company in consultation between the Joint Lead Managers. The Preferential right. as a function of the stock price of the Share on Eurolist by Euronext of Euronext Brussels (“Eurolist by Euronext Brussels”). determined according to market customs and depending on the circumstances and market conditions then applicable. The issue of New Shares is the subject of an Underwriting Agreement. A discount will be applied on this as is usual for this type of transaction. They can subscribe preferentially according to a subscription proportion that will be announced in the form of a supplement to the Prospectus. and other holders of a Preferential right who have not exercised this at the latest on 12 November 2007. which is in principle on 26 October 2007. please consult your financial intermediary. The Issue price will be published in principle on 26 October 2007 in the form of a supplement to the Prospectus. issue premium included. The non-exercised Preferential rights will be represented by Scrips and on the day after the closure of the Subscription period and in principle on 13 November 2007 will be purchased by Food Invest International NV with the obligation to exercise them at the same conditions. 1 (VWAP-Issue price)/ Number of Existing Shares for 1 New Share.

7 . the result of the subscription with Preferential rights and with Scrips. amend its dividend policy in the future. Stabilization No stabilization is contracted on the initiative of the Company. The directors propose not to pay a dividend for the past accounting year. the Preferential rights and the VVPR Strips on the regulated market Eurolist by Euronext Brussels has been submitted. the Shares issued on 26 October 2006. The admission of the Preferential rights takes place in principle on 29 October 2007. Dividend policy No dividend was paid during the last 2 years. Lock-up No shareholder has committed itself to a lock-up of its Shares for this offering. No over-allocation option is foreseen. All payments of dividends will be dependent on the Company’s profits. the G&L shares. Counter banks The applications for subscription can be submitted free of charge to the Syndicate or at these institutions through any other financial intermediary. Financial service The financial service for the Shares is provided by the Joint Lead Managers and Bank Degroof. Investors are requested to enquire about any expenses that could be charged by those other intermediaries. In the future realized profits will in the first instance be retained in the Company and employed for the development of the Company. The admission of the New Shares. For the shareholders this is free of charge. The Company can. Admittance to Eurolist by Euronext Brussels The application for trading of the New Shares. the number and price of the Scrips. Right to dividends The New Shares give where appropriate right to participate in profit as from 1 July 2007 and are consequently (where appropriate) entitled to dividend for the shortened accounting year ending on 31 December 2007. the G&L shares.Disclosure of the results of the Offering Within five working days after the closure of the Offering and in principle on 16 November 2007 the following data will be announced by inclusion in the Belgian financial press and in electronic form on the Company website: • • • the total number of New Shares allocated. however. the Shares issued on 26 October 2006 and the VVPR strips takes place in principle on 16 November 2007. its capital needs and other factors that are considered as important by the Company. Settlement of the price of the New Shares The payment for the subscriptions through Preferential rights or Scrips is made by debitting the account of the subscriber as of the value date of 16 November 2007. its financial status.

lawsuits and/or other procedures Pinguin has been involved in a limited number of disputes and lawsuits. These risks and uncertainties are possibly however not the only ones that are related to the Issuer. Pinguin’s debt position has greatly increased over the past months. Any judgment to the disadvantage of Pinguin can have a substantial impact on the results of the Company. and the order in which they are presented is not intended as a supposed order of importance. this is nevertheless not excluded. The success of the integration depends on the speed with which the integration is finalized and the degree to which the intended savings can be realized. Although the Pinguin management considers it unlikely that the disputes or the judgments of the lawsuits will be to the detriment of Pinguin. In certain countries the distribution of this Prospectus and the Offering can be subject to special regulation. Summary of the most important risk factors associated with the Issuer and the securities offered The attention of the subscribers is drawn to the fact that the following list of risks is incomplete. Risks associated with the Issuer and its activities Indebtness As a result of recent acquisitions. Although the Company is convinced that its financing structure is adapted to its needs. Agriculture area Due to the demographic ageing of the agricultural population and the pressure on agriculture areas caused by the demand for (grain) crops for bio energy. Integration The recent takeovers of the activities and the staff of Padley Vegetables and Christian Salvesen Foods will be assimilated as quickly as possible in the Pinguin-Lutosa organization and must reach the expected Pinguin-Lutosa standards as quickly as possible. the Company must always be watchful to maintain sufficient supply certainty. or risks that on the date of this Prospectus were not considered liable to have an unfavourable influence on the Company. Risk concerning disputes. 8 . the Company must generate sufficient cash flows to pay back its debt and interest charges. financed by temporary bridge financing facilities. There may be unknown or unlikely risks. Environment The local environmental standards have an important impact on the production process.Restrictions on application on the Offering The Offering is only open to the public in Belgium. Each person who is in the possession of this Prospectus must ascertain the existence of such restrictions and observe them. its activity or financial situation. climatological conditions can cause considerable fluctuations in production and the price of the raw materials. Pinguin has taken over part of the activities of Christian Salvensen’s Food division and Lutosa Group. Changes to legislation and standardization have an effect on the production process and the capacity of the production facilities. Pinguin is currently busy refinancing this debt. The risk and uncertainties that in the judgment of the Company are substantial are described below. Climate Because the Company is dependent on nature for its raw materials. The authorized intermediaries cannot accept any subscription for New Shares from investors who are located in a country where this Offering would be illegal.

• Pro forma consolidated income statement.Risks associated with offered securities Liquidity of the Share: the Share offers a relatively limited liquidity. balance sheet notes of Pinguin NV for the first six months of 2007 ending on 30 June 2007. including the takeover of the Lutosa Group as if it had occurred on 1st January 2006. The following consolidated annual accounts are discussed and were drawn up in accordance with the IFRS: • Audited consolidated balance sheet and income statement. For further information on the assumptions used in drawing up the pro forma financial information. we refer to Chapter 7. • Audited consolidated balance sheet. including the takeover of the Lutosa Group as if it had occurred on 1st January 2007. Low liquidity on the market for Preferential rights and the VVPR Strips: the Preferential rights and the VVPR Strips can only offer a limited liquidity. can have an unfavourable effect on the price of the Share or the value of the Preferential right. 9 . excluding the Lutosa Group acquisition. The factors that determine the price of the Shares can also have an effect on the market for the VVPR Strips. excluding the Lutosa Group acquisition. • Pro forma consolidated income statement. Within the framework of the takeover of the Lutosa Group. • Audited consolidated balance sheet. of Pinguin NV as of 30 June 2005. income statement and notes of Pinguin NV as of 30 June 2006.7 (“Pro Forma Consolidated Financial Information 2006/2007”). Some developments concerning the Company or macro-economic factors can cause the price of the Shares to fluctuate. - - - D SELECTED FINANCIAL INFORMATION AND MD&A In the tables below the selected financial information described is based on the audited consolidated annual accounts and which must be read together with the audited consolidated annual accounts that were produced in compliance with the International Financial Reporting Standards (IFRS) and are included elsewhere in the Prospectus (see Chapter 7). and with the “Discussion and analysis of the financial situation and the Company’s results by the management” (see Chapter 6). income statement and notes of Pinguin NV as of 30 June 2007. balance sheet and notes of Pinguin NV for the calendar year ending on 31 December 2006. the Company has established consolidated pro forma financial information drafted for the period running from 1 January 2006 up to and including 31 December 2006 (12 months) and for the period from 1 January 2007 up to and including 30 June 2007 (6 months). Dilution: the Existing Shareholders who do not exercise their Preferential rights or who transfer them would experience a dilution. Price decrease: the sale of a certain number of Shares or Preferential rights on the market. excluding the Lutosa Group acquisition. Volatility of the price of the Share and the VVPR Strips: the Issue price of the New Shares can only be considered as an indication of the market price of the Shares after the Offering. or even the feeling that such sales can take place.

72% -35.94% 0. Year ending 30 June (in thousands of EUR) CONTINUED OPERATIONS Sales Increase/decrease in inventory Negative goodwill recognised in income statement Other operating income Raw materials.69% n/m n/m n/m n/m 2.80% -410 -410 -7.628 -799 -2.755 -1.834 0. plant and equipment .546 653 n/m n/m n/m n/m 24. ASSETS (IN THOUSANDS OF EUR) 30/06/2007 Growth (%) 11.65% n/m n/m 45.283 6.136 821 58. 30 June 2006 and 30 June 2007 for Pinguin NV according to IFRS and is discussed in section 6.950 -609 -2. consumables and goods for resale Gross profit Margin Services and other goods Personnel costs Depreciation and amortization Reversal of impairment losses on assets Impairments.748 7.837 28.89% 28.22% -426.00% 147.183 -1.72% 880 -3.968 -81.441 -19.455 30/06/2007 Growth (%) 30/06/2006 Growth (%) 30/06/2005 121.061 77.523 8.242 5.23% 9.226 615 54.14% -35. 30 June 2006 and 30 June 2007 for Pinguin NV according to the IFRS and is discussed in section 6.1. write-offs and provisions Other operating charges Operating result (EBIT) Margin EBITDA Margin Financial income Financial expenses Operating result after net finance costs Taxes NET RESULT FROM CONTINUED OPERATIONS Margin DISCONTINUED OPERATIONS Total result from discontinued operations NET RESULT OF THE GROUP Share of the Group Minority interests 6.559 207.893 -3.742 887 -86 -1.00% 126.Under construction and advance payments 60.179 1.591 -22.98% 3.15% -0.86% 1037.00% 30/06/2006 Growth (%) 30/06/2005 FIXED ASSETS Intangible assets Property.75% 725 -3.Land and buildings .07% 1.172 31.252 -1.020 -6.62% 44.54% 149.63% 13.703 10.1 of this Prospectus.441 6.94% 0.14% -4.62% 7.2.141 20.188 -948 -1.67% n/m 4.70% 286 -5.683 -83.68% n/m -90.514 -24.Other .455 12.463 -1.292 19.096 4.1.84% 1.868 32 147.732 -4.506 -8.00% -100.19% 209.Plant.71% -334 -334 -2.00% -100.Audited consolidated Financial Information Pinguin NV The table below contains the consolidated income statements of the accounting years as of 30 June 2005.21% 66.36% -4.19% 34.61% n/m n/m 110.624 925 0.10% 18.00% n/m n/m -95.10% -1.058 -1.558 -5.916 606 164 345 0.695 47.175 -921 -7.586 1.678 29.900 6.01% -12.586 4.986 8.032 526 The tables below contain the consolidated balance sheet as of 30 June 2005.49% -100.878 96.Furniture and vehicles .847 -5.02% 10.085 265 53.95% 1.54% 0.55% -38.59% 2.645 32.56% 6.35% -100.81% 10.235 -1.68% -35.697 413 52.00% -3.900 -17.90% 66.567 470 164 152 10 .110 -82.97% 53.070 75.22% n/m 12.93% 4.22% 2. of this Prospectus. machinery and equipment .065 8.

40% -2.158 -19.162 86 86 6.Credit institutions .Available-for-sale financial assets Deferred tax assets Long-term receivables (> 1 year) .62% -33.79% 18.393 27.37% -11.233 27.56% 9.Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable Accrued charges and deferred income TOTAL EQUITY AND LIABILITIES 46.99% 18.16% 33.02% -65.101 23.45% -30.054 6.344 -321 1.476 1.332 27.29% -1.705 714 2.85% -1.21% -55.479 EQUITY AND LIABILITIES (IN THOUSANDS OF EUR) 30/06/2007 Growth (%) 68.479 11 .595 4.456 30.Subscribed capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions for pensions and similar rights Other provisions Financial liabilities .111 113.026 65.052 3.89% 117.162 2.735 633 113.002 31.91% n/m -1170.94% -32.888 -138 354 23.698 274 283 112.65% 18.966 21.63% 5.00% 3.411 7.17% 6.80% -1.929 25.458 3.204 1.073 28.435 3.090 -6.90% 15.46% -20.66% 34.Trade receivables .039 16.963 975 133.390 66.223 3.518 6.66% 220 220 103.762 26.676 27.806 354 89 133.007 18.018 26.205 30 1.461 -13.782 31.260 26.795 2.Current portion of non current financial liabilities .86% -4.86% 26.70% 103.00% 29.229 -2.34% -36.38% 3.91% 34.835 4.05% -25.09% -9.74% 184.635 70.Credit institutions .090 -100.158 4.Derivatives .76% 9.302 7.94% 25.954 33.046 112.62% 4.50% -6.40% -19.Other receivables Financial assets .348 -29.28% -3.214 24.296 600 6.Other Other amounts payable Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities .76% 21 440 18.785 32.03% -33.897 2.610 -19.603 48.62% 18.765 1.229 48.879 681 2.96% 34.539 6.75% n/m n/m 6.62% 6.70% 108 108 428 428 58.98% -4.81% 17.22% 17 328 12.66% 22.43% -12.461 36.936 7.561 1.081 829 1.570 1.00% 26.24% -25.Bond loans .Short term deposits Cash and cash equivalents Deferred charges and accrued income TOTAL ASSETS 350 287 287 72.094 3.18% -14.719 5.750 -9.419 81 81 1.750 35.95% n/m -121.603 25.66% -63.82% -19.35% -84.789 36.472 29.Work in progress and finished products Amounts receivable .16% 531 531 59.95% -1.Financial fixed assets .86% -13.37% -5.936 33.41% -82.20% -68.10% 11.637 808 2.03% -1.00% n/m -32.21% -10.55% 18.17% 343.139 27.864 2.Raw materials and consumables .905 12 57 8.310 2.26% 3.91% 30/06/2006 Growth (%) 30/06/2005 SHAREHOLDERS’ EQUITY Share capital .Financial leases .86% -9.70% 7.00% -100.582 35.63% -39.Other CURRENT ASSETS Inventories .11% 4.

LUTOSA GROUP) Intercompany elimination Fair value adjustment Acquisition Sale of real estate CONTINUED OPERATIONS Sales Increase/decrease in inventory Negative goodwill recognised in income statement Other operating income Raw materials.446 4.95% 562 -3.176 -5.469 -98.725 156. write-offs and provisions Other operating charges Operating result (EBIT) Margin EBITDA Margin Financial income Financial expenses Operating result after net finance costs Taxes CY 2006 (12m) 147.097 6.221 2.708 -8.83% 1.15% 23.246 -976 -6.48% -0.261 -15.98% 754 -2.770 -3.Pro forma financial status Pinguin NV including Lutosa This information is drawn up for illustrative purposes only.837 -5.320 1. this pro forma information illustrates a hypothetical situation and is consequently not representative of the actual financial position or the financial achievements of the Pinguin Group.731 89.037 8. consumables and goods for resale Gross profit Margin Services and other goods Personnel costs Depreciation and amortization Reversal of impairment losses on assets Impairments.317 -182.147 CY 2006 (12m) 183.33% 2.246 -219 -3.79% 10.777 330.584 1.16% -82.2.349 -3.43% 20.421 360 -1.282 47.1 of this Prospectus.770 -4.39% -35.000 2.061 1.499 66.975 1.069 -44.475 46.154 6.895 -25.714 4.58% 12 .156 4.085 -12.886 -1.456 44.915 3. All amounts in thousands of EUR Pro forma Income statement 31/12/2006 Pinguin Group Pro forma Income statement 31/12/2006 Lutosa Group CONSOLIDATED PRO FORMA Income statement 31/12/2006 PINGUIN GROUP (INCL.924 1.693 7.316 -8.349 -4.699 10.005 4.156 -966 -1.198 -10 -2.953 -19.500 -5.755 NET RESULT FROM CONTINUED OPERATIONS Margin 2.006 7. The tables below contain the pro forma consolidated income statement of the Pinguin group and the Lutosa Group according to the IFRS as of 31 December 2006 and 30 June 2007 and is discussed in section 6.848 -83.770 306 -2.56% -41. By its nature.301 2.676 -3.394 3.

813 -9.404 47.394 6.448 -34.893 -10.885 -1.081 1.500 -4.64% 334 -1.163 -12.023 -1.488 12.670 3.229 12.27% 24.73% 456 -952 19.586 933 -64.94% -16.301 16 4.548 NET RESULT FROM CONTINUED OPERATIONS Margin 1.16% 9.62% -39.576 -5.88% -20.389 16.725 -3.885 -1.88% 3.094 4.344 59.110 1.586 3.All amounts in thousands of EUR Pro forma Income statement 30/06/2007 Pinguin Group Pro forma Income statement 30/06/2007 Lutosa Group Intercompany elimination Fair value adjustment Acquisition Sale of real estate CONSOLIDATED PRO FORMA Income statement 30/06/2007 PINGUIN GROUP (INCL.568 15.551 1.606 -7. consumables and goods for resale Gross profit Margin Services and other goods Personnel costs Depreciation and amortization Reversal of impairment losses on assets Impairments. LUTOSA GROUP) CONTINUED OPERATIONS Sales Increase/decrease in inventory Negative goodwill recognised in income statement Other operating income Raw materials.203 -3.221 48.036 68 -8.40% 4.014 887 377 -1.527 19.068 20.166 -22.419 49.470 -16 196.075 93.817 -2.321 7.70% 790 -4.89% 13 .422 1 half 2007 (6m) 123.610 887 -34 -933 19.99% 25.193 -1.381 -98.750 10.885 -4. write-offs and provisions Other operating charges Operating result (EBIT) Margin EBITDA Margin Financial income Financial expenses Operating result after net finance costs Taxes 1 half 2007 (6m) 72.710 -10.740 6.403 -5.475 2.389 343 -5.580 -7.507 -4.707 34.913 -1.

096 48.116 113.416 573 67.617 113 2.Amounts receivable Deferred tax assets Long-term receivables (> 1 year) .Other receivables Financial assets .250 113.022 43.338 2.500 2.250 14 .082 2.800 All amounts in thousands of EUR Pro forma balance sheet 31/12/2006 Pro forma balance sheet 31/12/2006 Pinguin Group Lutosa Group Intercom pany eliminati on Fair value adjustment Acquisition Sale of real estate SHAREHOLDERS’ EQUITY Share capital .Work in progress and finished products .918 62.613 113 2.367 1.430 1.326 26.266 52.520 15.250 48.Other .337 356.638 30.917 1.564 58.962 8 47.869 30 6.886 CONSOLIDA TED PRO FORMA BALANCE SHEET 31/12/2006 PINGUIN GROUP (INCL.496 -46.Assets under construction and advance payments .315 98.2.315 -38.131 -3.282 19.594 4 4 13.Trade receivables .907 2.205 349 30 6. LUTOSA GROUP) 106.000 134.Land and buildings .894 2.The tables below contain the pro forma consolidated balance sheet of the Pinguin Group and the Lutosa Group according to the IFRS as of 31 December 2006 and 30 June 2007 and is discussed in section 6.Subscribed capital Share premiums 45.266 -38. LUTOSA GROUP) 200.139 75.282 38.337 -38.501 44.337 102.770 -8.042 15.119 3.300 2.Raw materials and consumables .Available for sale .801 15.284 155.Other CURRENT ASSETS Inventories .266 97.225 1.2.109 -11.461 573 102.Derivatives .799 8 80. of this Prospectus.295 Pinguin Group Lutosa Group Intercom pany eliminati on Fair value adjustment Acquisition Sale of real estate FIXED ASSETS 53.918 -4.868 42.Plant.770 -8.339 68.245 4.771 23.315 102.082 10.504 3.364 2. All amounts in thousands of EUR Pro forma balance sheet 31/12/2006 Pro forma balance sheet 31/12/2006 CONSOLIDA TED PRO FORMA BALANCE SHEET 31/12/2006 PINGUIN GROUP (INCL. machinery and equipment .062 155 125 30 0 392 392 80.241 26.371 9.320 164 -3.Furniture and vehicles .337 Intangible assets Goodwill Property.684 19. plant and equipment .058 125 125 4 30 30 67.837 87.Finished products Amounts receivable .Short term deposits Cash and cash equivalents Deferred charges and accrued revenues TOTAL ASSETS 32.000 392 392 156.Leasing and similar rights Financial fixed assets .567 62.315 15.684 62.075 26.250 67.252 6.

Leasing and similar rights 95.participating interests .Assets under construction and advance payments .000 283 76.510 -325 1.890 1.506 19. in this Prospectus.387 18.126 37.434 3.337 356.Bond loans .000 -4.274 2 3.683 74.Credit institutions .275 18.receivables Deferred tax assets Long-term receivables (> 1 year) .284 155.591 CONSOLIDA TED PRO FORMA BALANCE SHEET 30/06/2007 PINGUIN GROUP (INCL.156 5.407 7.Furniture and vehicles .828 4.063 -1.582 1.248 67.560 144.275 95.111 4.Other Other amounts payable Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities .530 594 2.424 2.591 -39.332 402 5.621 41 62.960 7.837 4.000 109.272 109.315 98.837 28.042 15.705 50.Consolidated reserves Cumulative translation adjustments Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions for pensions and similar rights Other provisions Financial liabilities .732 -39.2.490 -325 1.332 402 29.206 0 1.889 21.817 65.496 -46.782 4.800 The tables below provide the pro forma consolidated balance sheet of the Pinguin Group and the Lutosa Group according to the IFRS as of 30 June 2007 and is discussed in section 6.732 100.471 821 Intangible assets Goodwill Property.189 5.678 29.182 1.206 -43.110 1.837 68.2. machinery and equipment .470 12 -27 109.000 -45.226 615 62.384 3.275 -39.063 1.681 105.109 -74.591 95.576 14 14 283 8.408 2.720 41 32.886 -8.Land and buildings .162 1.909 134.316 40.716 17.919 18.Other .528 545 214 27. All amounts in thousands of EUR Pro forma balance sheet 30/06/2007 Pro forma balance sheet 30/06/2007 Pinguin Group Lutosa Group Intercom pany eliminati on Fair value adjustment Acquisition Sale of real estate FIXED ASSETS 60.000 -45.732 58.Current portion of non current financial liabilities .Financial leases .002 0 4 30 30 350 287 287 4 30 0 30 350 287 287 Financial fixed assets .283 261 1.245 6.Plant.215 70.367 14.901 29. plant and equipment .371 3.267 -12 27 20.213 2.681 14.251 29.783 65.522 10.968 5. LUTOSA GROUP) 197.Credit institutions .Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable Accrued charges and deferred revenues TOTAL EQUITY AND LIABILITIES -4.136 821 62.199 30.Other 15 .

321 12.002 97.162 86 86 6.Issued capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions for pensions and similar rights Other provisions Financial liabilities .750 133.229 48.000 -45.081 58.885 -5.635 70.682 Pro forma balance sheet 30/06/2007 -1 18.236 0 55.629 2 1.Raw materials and consumables .000 -4.682 -1 18.085 597 4.847 -45.Bond loans .492 59.341 360.918 -4.Work in progress and finished products .432 -1 6.431 136.390 20.000 109.283 90 86 4 23.061 4.Credit institutions .936 33.527 4.113 12 -33 109.519 7.000 57 74.247 706 -1 -1.216 62.064 3.090 160.575 1.627 109.456 30.590 81 47.435 3.847 -45.556 32.576 12 12 57 8.039 16.302 7.552 16 .821 10.160 62.Short term deposits Cash and cash equivalents Deferred charges and accrued revenues TOTAL ASSETS All amounts in thousands of EUR 72.300 20.082 2.643 -321 1.Credit institutions .624 2.603 25.229 Pinguin Group Lutosa Group Intercom pany eliminati on Fair value adjustment Acquisition Sale of real estate SHAREHOLDERS’ EQUITY Share capital .212 1.321 3.941 3.399 21.238 12.461 2.879 681 2.000 -45.708 829 1.846 50.590 113.302 32.880 10.081 829 1.592 81 79.090 Pro forma balance sheet 30/06/2007 160.Other Other amounts payable Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities .806 354 89 26.Financial leases .Current portion of non current liabilities .348 1.Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable Accrued charges and deferred revenues TOTAL EQUITY AND LIABILITIES 46.212 -43.885 -5.963 975 -1 -1 -1.121 4 4 24.002 47.699 5.745 45.750 163.789 12.063 -79.Trade receivables .216 74.225 68.275 93.Other receivables Financial assets .063 -1.552 CONSOLIDA TED PRO FORMA BALANCE SHEET 30/06/2007 PINGUIN GROUP (INCL.063 -16.048 133.681 31.344 -321 1.139 79.539 6.279 243 390 -1 1.082 77.223 3.229 113.458 3.398 17.564 6.603 48. LUTOSA GROUP) 117.954 33.CURRENT ASSETS Inventories .063 1.039 106.341 360.763 25.358 -12 33 18.229 -2.918 62.933 4.275 93.Derivatives .Finished products Amounts receivable .310 2.472 29.424 2.130 6.

116 113.Issued capital Share premiums Consolidated reserves Cumulative translation adjustments -1.570 2.Plant.504 3.3.022 18. The tables below provide the pro forma consolidated balance sheet of Pinguin and Lutosa supplemented by an estimate of the impact of the takeovers of part of the activities of Padley Vegetables and Salvesen Foods and is discussed in section 6.139 75.062 155 125 30 0 392 392 156.684 62.800 CS Foods UK GAAP based Padley Vegetables UK GAAP based FIXED ASSETS Intangible assets Goodwill Tangible fixed assets .430 1.570 19.Goods for resale Receivables .564 58.Leasing and similar rights Financial fixed assets .Other receivables CURRENT ASSETS Inventories .Assets under construction and advance payments .371 9.461 573 102.075 26.490 -325 CS Foods UK GAAP based Padley Vegetables UK GAAP based SHAREHOLDERS’ EQUITY Capital .Investments Cash and cash equivalents Deferred charges and accrued revenues TOTAL ASSETS 5.266 97.245 4.Raw materials and consumables .079 -1.Furniture and vehicles .Receivables Deferred tax assets Long-term receivables .Other tangible fixed assets . machinery and equipment .339 68.Pro forma consolidated financial information Pinguin and Lutosa 2006 supplemented with an estimate concerning the impact of the recent takeovers of a part of the activities of Padley Vegetables and Christian Salvesen Foods The information below is drawn up for illustrative purposes only and is consequently not representative of the actual financial position and achievements of the acquired Padley Vegetables and Christian Salvesen Foods.768 2.617 113 2.894 2.832 1.250 113.600 2.799 8 80.250 -8.768 5.810 25.917 1.570 5.147 1.Work in progress and finished products .768 2. Pinguin Group including Lutosa Group All amounts in thousands of EUR IFRS CONSOLIDATED PRO FORMA BALANCE SHEET 31/12/2006 200.570 All amounts in thousands of EUR Pinguin Group including Lutosa Group IFRS CONSOLIDATED PRO FORMA BALANCE SHEET 31/12/2006 106.Derivatives .Other receivables Financial assets .147 1.Trade receivables .Land and buildings .295 356.832 19.079 17 .Participating interests .869 30 6.

138 353 353 26.747 353 Accrued charges and deferred revenues TOTAL LIABILITIES 2.138 14 283 76.716 65.Current portion of non-current financial liabilities . .800 25.586 18 .968 1.828 4.384 356.Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable 1.782 4.654 46.Financial leases .Other Other liabilities Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities . Pinguin Group including Lutosa Group IFRS CONSOLIDATED PRO FORMA INCOME STATEMENT 31/12/2006 All amounts in thousands of EUR CS Foods UK GAAP based Padley Vegetables UK GAAP based CONTINUED ACTIVITIES Revenues Operating result (EBIT) Of which: a) depreciation and amortization b) negative goodwill included in result 330.138 1.600 26.681 105.301 65.Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions relating to pensions and similar rights Other provisions Financial debts .111 4.367 14.570 The table below contains the pro forma summary income statement of Pinguin and Lutosa supplemented by an estimate of the impact of the takeovers of part of the activities of Padley Vegetables and Salvesen Foods and is discussed in section 6.747 26.3.162 1.747 1.560 144.215 70.705 50.332 402 29.Bond loans .245 6.073 -15.961 1.156 -1.110 1.Credit institutions .621 41 62.714 7.Credit institutions .153 1.147 -514 1.

KBC and Fortis (the “Consortium”) concerning the sale of the buildings and land in the three Lutosa sites. On the basis of the agreement in principle. The takeover was finalized on 28 September 2007. This division consists of the processing. Accounting year change The Pinguin accounting year runs from 1 July to 30 June. located in Bourne. Securitization transaction receivables A securitization transaction with receivables will provide an additional EUR 45 million in financial resources.Lutosa grants (i) a long-term lease (“erfpacht”) to the Consortium for a period of 99 years in exchange for a one-off payment of EUR 42.2 of this Prospectus for a description of the impact of this transaction on the consolidated income statement and balance sheet. the transaction will be structured as follows: .500. Vanelo NV. Pinguin is currently working on a club deal where its bankers will provide the full credit requirement.Les Pres Sales NV rents the buildings to the concerned Lutosa companies for an amount of EUR 4.250. A credit facility of EUR 140 million is currently being negotiated.000 per annum (indexed annually) for a period lasting 15 years. .000. We refer to Section 6. Pinguin will change its accounting year to let it run from 1st January to 31st December. to take over a part of the activities of the Christian Salvesen Foods’ segment for a total amount of EUR 26. packaging and storage of deep frozen vegetables in the facilities in Lincolnshire. We refer to Section 6. Refinancing of the debt Pinguin financed the takeovers of certain activities of the Christian Salvesens Foods’ division and the Lutosa Group with temporary bridge financing facilities. The proceeds of the sale will be used to finance a part of the takeover price for Lutosa. Pinguin is currently working on refinancing this debt. The intention is that Pinguin’s existing loans and new debt from the takeover will be refinanced as a package. Takeover of certain activities of the Salvesen Food segment On 17 August 2007 Pinguin reached an agreement with Salvesen Logistics Ltd. with a purchase option for Les Pres Sales at the end of the lease for a sum of EUR 1. After the takeover of the Lutosa Group.000 and (ii) sells the ground itself to Dreefvelden NV for an amount of EUR 2. Moerbos NV and Van den Broeke-Lutosa NV. Consequently Pinguin has chosen to close the first accounting year of 2007 early on 31 December 2007.750. Pinguin has opted for both groups to uniformize as far as accounting years are concerned. Les Pres Sales NV (a company controlled by Food Invest International NV and the Van den Broeke family) and Dreefvelden NV (a company controlled by Veerle Deprez) have reached an agreement in principle with a consortium of banks consisting of ING.3 of this Prospectus for a description of the impact of this transaction on the consolidated income statement and balance sheet.The Consortium leases the buildings for a period of 15 years to Les Pres Sales NV. To this end. The current accounting year 19 .Important developments since 1 July 2007 and prospects for 2007 and beyond The following important developments have occurred since 1 July 2007: Lutosa On 26 June 2007 Pinguin NV reached an agreement with the Van den Broeke family concerning the purchase of all the shares of the Lutosa Group. .500.282.7 million. The total takeover price amounted to EUR 175 million. North Thoresby and Easton. Sale and rent-back operation of Lutosa real estate Primeur NV.

Pinguin assumes that it will be able to maintain the same percentage gross margin.999. will be supplemented by additional selling price increases to customers to cover for the expected raw material price increases. that must ensure an increased profitability. These will however lay the foundation for further success in the UK.499. Pinguin expects that for the accounting year ending 31 December 2007 in the deep frozen vegetables sector (including 3. E KEY DATA REGARDING THE APPLICATION FOR ADMISSION TO TRADING ON EUROLIST BY EURONEXT BRUSSELS OF THE SHARES ISSUED ON 26 OCTOBER 2006 Context of the application for admission to trading on Eurolist by Euronext Brussels As a result of a decision by the Extraordinary General Meeting of Pinguin NV of 26 October 2006 to increase the registered capital by EUR 12.682. In the area of gross profit it should be stated once again that for the potato segment the volatility of potato prices is higher than the volatility of deep frozen vegetables. They were subscribed as follows after cancellation of the preferential subscription right pursuant to articles 596 and 598 of the Belgium Company Code in the framework of the private placement: (a) 1.345. Prospects for 2007 and beyond The current accounting year will be closed on 31 December 2007 and will show consolidated results for Pinguin NV consisting of (i) 6 months Pinguin (before Lutosa and Salvesen takeovers but including 6 months Padley Vegetables) (ii) Salvesen results since acquisition on 10 September 2007 and (iii) 3 months results for Lutosa since acquisition on 28 September 2007. The accounting year which will run from 1 January 2008 to 31 December 2008 will give a normal picture for the first time of the consolidated results of the Pinguin Group including recent takeovers for a period of 12 months. Nevertheless.996. and 20 . Pinguin will carry out and finalize the necessary restructuring and rationalizations in its recent English acquisitions as soon as possible.24. Pinguin has a structure that must enable it to operate in a very competitive environment. The consolidated net margin in 2007 will be negatively influenced by the one-off charges related to the refinancing of the debt and the recent takeovers. In the area of profitability it is expected that the gross profit and EBITDA margins in 2007 and 2008 and after the restructuring of the UK will remain relatively stable: • • The figures that Pinguin has published for the year 2006/2007 prove that the negative spiral has stopped and the historical losses have been converted into profit figures.994.368 ordinary shares of Pinguin NV were issued. After the restructuring abroad. One cannot therefore assume that the very good first six months can be simply extrapolated into the second half or into the future. which can be accompanied by a pressure on the selling prices.85.589 ordinary shares of Pinguin NV by KBC PE in exchange for a cash contribution of EUR 999. This will create a number of one-off expenses. Because of the good potato harvest it is expected for the second half year that potato prices will drop. 1. In addition.895 ordinary shares of Pinguin NV by STAK in exchange for a cash contribution of EUR 9. (b) 134.5 months of Salvesen and 6 months of Padley) it must be able to achieve a turnover of more than EUR 110 million.will comprise therefore only 6 months. Pinguin expects that these one-off expenses will be mainly borne in the 2007 accounting year.999.27. The first accounting year that will comprise 12 months will run from 1 January 2008 to 31 December 2008. Pinguin trusts that the investments made. For the potato segment the turnover between October and December 2007 is estimated at more than EUR 45 million.

682.2% of the registered capital of Pinguin NV on 26 October 2006.368 shares with no stated par value and of the same category as the shares issued prior to this private placement. Form of the shares All 1.998. KBC PE and Lur Berri will be made to Euronext Brussels. Number of shares for which admission to trading on Eurolist by Euronext Brussels is being applied for 1.479.682. thereby strengthening the Company’s competitive market position. Application for admission to listing The application for admission to trading of the shares subscribed by STAK. such as the possibility to acquire a company. Use of proceeds Pinguin intended to use the additional financial resources resulting from this private placement for strengthening the Company’s shareholders’ equity: (a) in order to finance the growth of the Company by means of additional investments both in Belgium and abroad.499. No VVPR Strips are associated with these shares. 21 .682.368 shares are entitled to dividends as from 1 July 2006. Net proceeds The net proceeds of the private placement amounted to EUR 12.43 per share. Date of dividend entitlement of the shares All 1. Percentage represented by the shares The 1. Issue price of the shares for which admission to trading on Eurolist by Euronext Brussels is being applied for The issue price of the 1.884 ordinary shares of Pinguin NV by Lur Berri in exchange for a cash contribution of EUR 1.994. Currency unit in which the shares were issued The 1. (b) in order to exploit commercial opportunities for the Company.12.24.368 shares to Eurolist by Euronext Brussels is expected to take place on or around 16 November 2007. and (d) in order to reduce the debt burden. business or a business division.682. (c) in order to attract new financial resources without entering into new loans and without providing security.368 shares issued as a result of the decision of the Extraordinary General Meeting of 26 October 2006 amounts to EUR 7.368 shares represented 25.682.682.368 shares were issued in Euros.682.(c) 201.368 shares are in registered form. The inclusion of all 1.

The issue price was set in accordance with the relevant provisions of the Companies’ Code at EUR 17 per share. 22 .00 per share. Application for admission to listing The application for admission to trading of the G&L Shares which will be subscribed and of the VVPR Strips will be made to Euronext Brussels. the issue price corresponds to the average price of the Share on Euronext Brussels in the 30 days preceding the date of the meeting of the Board of Directors.990.176. Currency unit in which the G&L Shares were issued The G&L Shares will be issued in Euros. Date of dividend entitlement of the G&L Shares All G&L Shares will be entitled to dividend as from 1 July 2007.98% of the registered capital of Pinguin NV before the capital increase with Preferential rights described above.990 and will be used to co-finance the purchase of all the shares of the Lutosa Group.470 G&L Shares with no stated par value and of the same category as the Existing Shares. The G&L Shares will enjoy VVPR benefits. Use of proceeds The proceeds of this private placement amount to EUR 19.176.F KEY DATA REGARDING THE APPLICATION FOR ADMISSION TO TRADING ON EUROLIST BY EURONEXT BRUSSELS OF THE G&L SHARES Context of the application for admission to trading on Eurolist by Euronext Brussels On 28 September 2007 the Board of Directors of the Company resolved to carry out a capital increase within the authorized capital and with the cancellation of preferential subscription rights in favour of Messrs Guy and Luc Van den Broeke. Issue price of the G&L Shares for which admission to trading on Eurolist by Euronext Brussels is being applied for The issue price of the G&L Shares amounts to EUR 17. Percentage represented by the shares The G&L Shares will represent 14. Number of G&L Shares for which admission to trading on Eurolist by Euronext Brussels is being applied for 1. 1.999. The capital increase is taking place under the suspensive condition of subscription and payment in full by cash contribution. In accordance with article 598 of the Companies’ Code.999.470 G&L Shares with VVPR Strips are to be issued in exchange for a total cash contribution of EUR 19. which took place on 28 September 2007. the realization of which will be determined on 16 November 2007. Form of the G&L Shares All G&L Shares will be in registered form.

367 1.70% 0.676.411.45% 0.412 29.38% 0.34% 0.234 30.176.90% 1.70% 0.462 90.37% 15.986 261.152 7.555 100.197 55.00% 740.152 6.82% 0.986 261. 23 .29% 99.00% 40.15% 0.00% STAK Pinguin Guy & Luc Van den Broeke KBC Private Equity Lur Berri Degroof Corporate Finance Primco SILL Personnel Volys Star Vijverbos NV Demafin BVBA Kofa BVBA Public TOTAL Warrants (private investor) TOTAL (fully diluted) 2 3.48% 1.412 29.228.462 90.74% 1. Shareholder structure after capital increase of 26/10/2006 Shares % based % based on on total total number number of of shares shares (fully diluted) 51.48% 1.37% 0.412 29.412 1.852.79% Shareholder structure after private placement of G&L Shares Shares % based % based on total on total number number of of shares shares (fully diluted) 3.64% 43.356 7.29% 3.37% 0.37% 0.990.45% 0.The admission of all the G&L Shares and the VVPR Strips to Eurolist by Euronext Brussels is expected to take place on or around 16 November 2007.40% 0.51% 100.22% 14.44% 14.44% 0.92% 1.40% 100.33% 3.834 116.60% 100.14% 0.37% 0.441 11.43% 8.234 30.83% 0.589 653.412 29.44% 18.03% 9.74% 3.892.028 29.412 1.44% 18.38% 8. Proceeds associated with the private placement and issuance of G&L Shares The proceeds of the private placement of the G&L Shares which will be subscribed amount to EUR 19.49% 0.32% 1.834 116.228.91% 9.589 653.999.33% 1.80% 3.56% 99.98% 9.44% 0.44% 0.411.470 43.085 40.38% 0.00% 11.367 740.911 2 These warrants were not yet exercised at the time this Prospectus was approved. G DILUTION Amount and percentage of the dilution resulting immediately from the private placement of G&L Shares The effect of the private placement of G&L Shares on a shareholder’s holding in the capital after the private placement on 26 October 2006 is shown in the table below.73% 1.10% 50.197 55.028 29.09% 9.37% 15.356 6.35% 0.44% 0.716.

Participation in the capital in % based on the total number of shares completely diluted 1.470 G&L Shares and.176.470 G&L Shares After issuance of 1.470 G&L Shares After issuance of 1.470 G&L Shares and New Shares if Preferential right is exercised Participation in the capital in % based on total number of shares fully diluted 1.470 G&L Shares After issuance of 1.176.176.63% Before issuance of 1.85% 0. Before issuance of 1.85% 0.470 G&L Shares After issuance of the 1. Before issuance of 1.176.176. 2.705.882 New Shares (based on a price per share of EUR 17.470 G&L Shares Participation in the capital in % based on total number of shares fully diluted 1. Since the G&L Shares have not yet been created.470 G&L Shares After issuance of 1.Impact of the issuance of the G&L Shares on the Existing Shareholders The impact of the private placement of G&L Shares on an Existing Shareholder who holds 1% of the registered capital of the Company prior to issuance is shown below. a private placement of 1.176.89% The repercussions of the Offering on an Existing Shareholder who holds 1% of the registered capital of the Company prior to the private placement of G&L Shares and who does not exercise his Preferential rights is shown below: The calculation was carried out on the basis of the same assumptions as in the calculation above. hypothetically.00% 0.176.00 and a capital increase of EUR 46 million).85% Impact of the issuance of New Shares on the Existing Shareholders The impact of the Offering on an Existing Shareholder who holds 1% of the registered capital of the Company prior to the private placement of G&L Shares and who exercises his Preferential rights is shown below: The calculation was carried out on the basis of the number of shares representing the registered capital prior to the private placement of the G&L Shares.470 G&L Shares and New Shares if preferential subscription right is not exercised 24 .176.00% 0. the dilution resulting from the ultimatel issuance of the G&L Shares will be lower for the Existing Shareholder who exercises his Preferential rights.176.00% 0.

its activity or its financial situation. Availability of raw materials Pinguin obtains supplies of fresh vegetables mainly from 800 farmers in West Flanders. Pinguin operates in principle on the basis of fixed annual contracts. Nevertheless. The substantial storage capacity for both raw materials and finished products and the long-term relationships with farmers and potato dealers also offset the consequences of fluctuations in potato prices. This section explains certain risks relating to the Company and the New Shares. its profitability is determined mainly by the difference between the prices which it can negotiate with the purchasers for its finished products and on the one hand the price at which Lutosa has concluded its potato purchasing contracts and on the other hand the price at which Lutosa purchases its non-contract potatoes (approximately 50%) in the open market. climate conditions and exchange rates. The underlying production technology is the freezing process. as at the date of the present Prospectus. Lutosa’s core activities comprise the production and supply of a wide range of high quality deep frozen. However. The enterprise’s profitability is determined mainly by fluctuations in the selling prices of the finished products and by fluctuations in the purchase price of potatoes based on the level of availability and climate conditions. this takes place through some 15 agricultural cooperatives and various dealers. the availability of raw materials. The negative impact of the potato price on Lutosa’s profitability is surmounted partly by focusing on the brand segment. and northern France. At Pinguin UK and Pinguin Aquitaine. the less pricedriven customer segment and on potato products with a higher added value or a stronger innovative character. and the order in which they are presented is not intended to be an assumed order of importance. Lutosa’s profitability likewise is determined by the selling prices which it is able to achieve for its products in the market. Its presence in France and the United Kingdom. it is still possible that in certain cases. Belgium. On 26 June 2007 Pinguin concluded an agreement to acquire all the shares of the Lutosa Group. continuing internationalization of the market and marketing campaigns. The supply is mainly influenced by the availability of raw materials. This transaction was completed on 28 September 2007. The profitability of the Company is determined mainly by fluctuations in demand and the supply of its products. The risks and uncertainties which are material in the judgment of the Issuer are described below. The price fluctuations in past years are explained mainly by fluctuations in the price of fresh vegetables. limit its dependence on supplies from the area around the parent company. A General RISK FACTORS ASSOCIATED WITH THE ISSUER Pinguin’s core activities comprise the production and supply of a wide range of high-quality vegetable solutions for various types of clientele. Demand is mainly influenced by climate effects. and the conclusion of cooperation agreements with a number of foreign frozen vegetable producers. Fluctuations in selling prices Pinguin’s profitability is determined by the selling prices which it is able to obtain for its products in the market. Selling prices are determined by changes in demand and supply. The price of potatoes in the open market can fluctuate widely as a result of variations in supply (mainly influenced by weather conditions and the quality and shelf life of the potatoes) or speculation. fresh chilled and dehydrated potato products for various types of customers. with any shortages in the market being made up by purchases of frozen products in the open market. In particular. are not deemed liable to have an unfavourable impact on the Company. for example because of climate conditions (cf.II RISK FACTORS By definition. any investment in securities involves risks. “Climate conditions” risk factor) or soil exhaustion in 25 . or risks which. these risks and uncertainties may not be the only ones which relate to the Issuer. There may be other unknown or unlikely risks.

Seasonality The frozen vegetable sector is heavily dependent on the supply of vegetables from farming. Moreover. leading to pressure on selling prices or losses of productivity. Lutosa has endeavoured to limit the risks relating to the availability of potatoes by means of: • substantial storage capacity for potatoes (100. which have to be financed. France and Germany) in order to obtain certain other potato varieties and to provide additional purchasing possibilities abroad if the Belgian potato supply is insufficient or too expensive. The dependence on Belgian potatoes is a logical consequence of the fact that Lutosa’s products are mainly produced using the Bintje potato variety. This can give rise to surpluses or shortages. Pinguin makes up for seasonal shortages by means of additional purchases of frozen vegetables frozen in other plants. Italy. Since most vegetables are harvested in the period from July to November. production remains dependent on temporary weather phenomena. Lutosa can expand its procurement area by means of the extensive range of different potato varieties which each have their own region. demand for frozen vegetables continues throughout the year and the vegetables must therefore be ready for delivery permanently. Lutosa mainly obtains supplies of potatoes in Belgium (approximately 85% of the processed potatoes comes from Belgium). On the basis of this and other considerations. • good contacts with growers abroad (the Netherlands. Climate conditions The changing weather conditions have an extremely strong influence on supplies of vegetables and potatoes. The value of the inventories is determined by fixed contract prices which do not fluctuate over the year and also by purchases in the spot market. as it will allow relations with Belgian farmers to be further developed. Like other companies in the sector. The availability of these potatoes is closely related to factors such as weather conditions. The capacity must therefore be adapted to the output during this period. potato diseases or rotting during storage and in the long term the yield which is achieved by the farmer from potato cultivation compared to the cultivation of other crops. In order to guarantee the freshness of the products. This storage capacity must be sufficient to make up for delivery shortages. Germany. Pinguin is therefore also characterized by the holding of substantial inventories. In addition. However. compel Pinguin and Lutosa to reduce their dependence on the harvest in a specific region as far as possible. the supplied vegetables must be processed and frozen as rapidly as possible. and weather conditions. Pinguin would not be able to guarantee the supply of the quantities and quality required by the customers. In spite of the great care devoted to these aspects. Harvest yields can vary widely as a function of weather conditions. production reaches a peak around this period. which vary throughout the year. from more than 350 farmers and over 50 specialist potato dealers. 26 . as Lutosa has acquired considerable know-how in the storage of potatoes. Hungary. With regard to availability for the agricultural land used for vegetables and potatoes. Along with other factors such as soil exhaustion in fields for certain crops. and in particular the recent rise of bio energy crops. Poland.000 tonnes) at its production site. Pinguin has been able to expand its procurement of vegetables in past years from a limited area around the parent company in West Flanders to a larger area around the acquired subsidiaries in southern France and the United Kingdom (Norfolk).fields for certain crops. and climate conditions can affect procurement and raw material prices. Pinguin’s acquisition of Lutosa offers major synergies. Pinguin has expanded the procurement area even further by means of co-operation agreements with a number of frozen vegetable groups in Spain. Turkey and other countries. This storage capacity is considered by Lutosa management to be a competitive advantage. This also enables the shelf life of the potatoes to be optimized.

moreover. Furthermore. Certain breaches of environmental standards have been recorded in the past at both Pinguin and Lutosa. Lutosa is less seasonal in the production area than the vegetable sector. In addition. Fluctuations in energy prices thus have a considerable influence on profitability.The seasonal effect also has an impact on the results. There is no guarantee that this insurance will be sufficient to cover any losses which may arise. Consequently. in spite of the strict quality controls and the application of HACCP and ISO standards. production decreases in June. etc. board and paper. scrap metals. The fact that environmental regulations differ in each country and that. the relevant legislation changes rapidly may pose a threat to some of Pinguin’s operations. Pinguin and Lutosa may continue to be impeded by differences in environmental legislation applicable to Pinguin. this disadvantage will diminish as a result of European harmonization. Pinguin and Lutosa are covered by a product liability insurance which includes product recalls. but from July it is possible to begin processing early potatoes. This means that quality problems can give rise to losses leading to financial claims. Oil prices also have an indirect impact on profitability through the price of various packaging materials and transport. Exchange rates The Company is subject to fluctuations in exchange rates which can lead to a profit or loss in currency transactions. Pinguin and Lutosa have invested heavily in past years in order to optimize water supplies and energy recovery. environmental nuisance (noise and odour nuisance resulting from the processing of vegetables and potatoes and waste). since potatoes – according to availability and shelf life – can be processed throughout the year. On the other hand. plastic and residual waste). release of steam. since the production and the building of inventories (representing revenues in accounting terms) mainly take place in the second half of the year. Eastern European producers. 27 . Evolution of oil and energy prices The production processes used by Pinguin and Lutosa are fairly energy-intensive – mainly gas (for the fried product lines) and electricity. Product liability Pinguin and Lutosa both operate in the food industry. In general. On the other hand. Environmental issues The processing of fresh vegetables and potatoes is an activity which impacts the environment with very high consumption of water and energy. The results for the first half of the year (January – June) are generally considerably weaker than the results for the second half. Pinguin and Lutosa also have to contend with competitiveness disadvantages as a result of the differing environmental legislation in various countries and regions. will lose competitiveness in this area. Lutosa and their competitors. the occurrence of quality problems and complaints cannot be completely ruled out. the differing legislation in Europe with regard to crop protection products constitutes a specific risk. having recently joined the EU. solid and viscous waste. Lutosa has to contend with competitiveness disadvantages as a result of the different energy prices in various countries and regions. The products produced by Pinguin and Lutosa fall within the scope of Belgian legislation on product liability. Pinguin and Lutosa use the best possible techniques to offer their customers a maximum quality guarantee. CO2 emissions. wood. The environmental issues include the control of various waste streams (effluent. Nevertheless. this disadvantage will diminish as a result of European harmonization. hazards for employees and nearby residents (storage of ammonia and chemicals). Inventories of finished product fluctuate over the year and depend on Lutosa’s management estimates with regard to the shelf life and availability of potatoes. In particular.

any decrease in the value of Pound Sterling has a negative impact on the result..000 (over a certain period). Pound Sterling is not hedged systematically but rather on an ad hoc basis depending on the contract size and market conditions. There is no certainty that the hedging strategy of Pinguin and Lutosa will adequately protect their operating results against the consequences of exchange rate fluctuations. Part of the working capital requirement of Pinguin Foods UK is financed in Pounds Sterling by the parent company from Belgium. 28 . for example be £1. Since prices in the United Kingdom are set in Pounds Sterling. food service and food industry. The impact of Pounds Sterling on the results of Pinguin can be found at three different levels: − The most important is the inclusion of the Pinguin Foods UK figures. The ten largest customers represented: In 2006-2007: 41% In 2005-2006: 41% In 2004 (18 months) 33% of total sales (Continent and United Kingdom). sales in the United Kingdom amounted to respectively 32. − In addition. through the amounts receivable in Euros from Pinguin Foods UK. The functional currency of Pinguin Foods UK Ltd. which falls under the rubric “equity capital”. − In addition. an average increase of Pound Sterling by. when payment is done in Pounds Sterling. the food industry and the food service sector. When the exchange rate changes. the difference between the closing rate on a given date and the historical rate is entered as translation difference. In addition. The cash flows resulting from day-to-day sales from the United Kingdom to the Continent take place in Pounds Sterling and are 50% to 75% hedged by means of forward contracts or derivative instruments. Dependence on large customers Pinguin strives for a balanced distribution of its sales among the three segments of the retail sector: retail.000. This means that if the result would. In spite of this diversification. balance sheet and income statement. in each of these segments Pinguin has to contend with a more limited number of larger customers as a result of the concentration in retailing. 2005/2006 and 2004/2005. Sales outside the Eurozone (approximately 10%) are mainly invoiced in USD. can lead to a situation where a realized added or decreased value will deviate according to the daily rate at the moment the payment is received from the entered rate at the time the receivable was registered. The purchases of Chinese and other exotic products are invoiced in USD. This currency is not hedged systematically but rather on an ad hoc basis depending on the contract size and market conditions. it generates approximately 20% in the United Kingdom. when Pound Sterling decreases with respect to the Euro.4%. These currencies are not systematically hedged.Pinguin generates a substantial part of its sales revenues outside the Euro zone. The cash flows resulting from day-to-day sales to the United Kingdom in Pounds Sterling are partly hedged by means of forward contracts. 38. However. In accordance with the consolidation rules. since part of the vegetables processed at Pinguin Foods UK for the UK market are supplied from Belgium.5% of total sales in 2006/2007.8% and 37. Lutosa’s sales are mainly focused on the Eurozone (approximately 70% of its sales in 2006). A book loss must be recorded in respect of such receivables in the event of a decrease in the value of Pound Sterling. In the past three financial years. The impact of the exchange rates in £ primarily plays a role with respect to the inclusion of the Pinguin Foods UK Ltd. nor have any write downs been required with an impact in excess of EUR 10. is Pounds Sterling. There is no certainty that Pinguin’s hedging strategy will adequately protect its operating results against the consequences of exchange rate fluctuations. the exchange rate also affects the reserves and the value of the participating interest Pinguin NV maintains in the capital of Pinguin Foods UK Ltd. for example 5% (in the same period) the result in Euros would likewise increase by 5% and the other way around too. No significant bankruptcies have been recorded in the past 12 months. mainly in the United Kingdom. the capital and the reserves are converted according to historical exchange rates. It is expected that the proportion of sales outside the Eurozone will increase overall in the future. there are also the receivables in Euros that.

It is also present in the fast food sector and in the food industry. the food industry and the food service sector. knowledge and skills as limited as possible without hindering mutual best practices. By means of accelerated integration. In addition. In order to expand its product range. Pinguin NV reached agreement with the Van den Broeke family on 28 September 2007 on the purchase of all the shares of the Lutosa Group. Certain branches (Euragra) were closed. Pinguin is endeavouring to keep the differences in culture. and Pinguin also uses the payment terms granted by its suppliers to finance its working capital requirements. From a company with two sites in Belgium (Westrozebeke and Langemark). Lutosa’s current management team will remain largely unchanged and thus ensure continuity. certain activities were discontinued (Pinguin Salads BVBA) and the workforce was reduced at all sites.66%. largely as a result of strategic acquisitions. This indebtedness is based on the consolidated figures as discussed in section 6. since the Pinguin management intends to manage Lutosa as an independent entity. there is no certainty that the restructurings and the integration will always deliver the intended results. Pinguin has experienced substantial growth. were made in 2007. principally in order to achieve the critical mass which is necessary to succeed as a producer in the United Kingdom and to operate efficiently. In this context.2. the ten largest customers represented 16. the customer size in the food service segment is smaller than in the retail segment. in each of these segments Lutosa has to contend with a more limited number of larger customers as a result of the concentration in the retail sector. In 2007 Pinguin concentrated on strengthening its position in the United Kingdom. those of Padley Vegetables and Christian Salvesen Foods. Pinguin has the necessary knowledge and management skills in house for its restructurings in the United Kingdom. the combination provides critical mass to ensure a constant. France and the United Kingdom. there are a limited number of investment credits and a number of financial and operating leases. In general. In 2006. The Company’s debts consist mainly of short-term commercial credits from credit institutions (straight loans). The integration risks relating to the acquisition of the Lutosa Group are limited. in 2005 18.86% and in 2004 19. Together with the advantages of improved processing principles. both in the production division and in the transport and logistics division. high-quality supply of peas and improved capacity utilization by no longer focusing solely on peas. In spite of this diversification.04%. Some of the acquisitions proved to be insufficiently profitable and could not be easily integrated. two major acquisitions. The management is expecting to make substantial savings. Integration of acquisitions Since its initial public offering in 1999. the main challenge from 2003 onwards was one of integration.Lutosa’s main customer segment is food service (more than 50% of sales) and (specialist) retail. 29 .1. Risks associated with indebtedness The trend in indebtedness is shown in the table below: Indebtedness 65% 75% 80% 2006-2007 2005-2006 2004-2005 The indebtedness is calculated by dividing debt total by the balance sheet total. The integration cost was underestimated and restructurings proved necessary. Following the strategic acquisitions in 2002.000 tonnes after restructuring. Pinguin has grown into a group with various sites in Belgium. whereby Pinguin’s total production capacity in the UK will reach 90. Nevertheless.

It is expected that this credit facility of EUR 140 million will consist of (i) a term loan of EUR 75 million repaid in half-yearly instalments over a period of five years. Pinguin is currently engaged in refinancing this debt.7 million. (ii) a revolving credit facility of EUR 50 million and a line for future investments of EUR 15 million with the same maturity date as the loan of EUR 75 million. Pinguin has financed the acquisitions of the activities of Christian Salvesen Foods’ division and the Lutosa Group by means of temporary bridging loans. Pinguin makes use of various bank derivatives. A EUR 140 million credit facility is currently being negotiated. The Company takes the view that the acquisition of asset components results in no substantial reduction of the competition in the relevant market.000. the 25% threshold may well have been exceeded as a result of the acquisition of certain asset components of Salvesen Logistics Limited.2 million of this was taken up. Although the Company is convinced that its financing structure is appropriate for its requirements. Competition risk in relation to acquisitions of asset components of Padley Vegetables and Salvesen Logistics Limited The competition regulations in the United Kingdom assess whether the acquisition substantially reduces the competition in a specific market. and despite the hedging strategy based on bank derivatives. An acquisition may potentially be subject to an investigation by the Office of Fair Trading (OFT) if it leads to the acquisition of a market share of 25% or more in the United Kingdom (or a substantial part thereof) or if an existing 25% market share is increased. As at 30 June 2007. the market values of these instruments are stated in the balance sheet and the income statement. the possibility cannot be excluded that Pinguin’s net result may be affected by interest rate fluctuations in future. In addition. In spite of Pinguin’s intention to reduce its indebtedness and consequently the sensitivity of the net result to interest rate fluctuations. 2007 EUR 2. 30 . Pinguin is covered against interest rate rises within the margins set for it. machinery. • Acquisition of the storage sheds. Pinguin had interest-bearing liabilities amounting to EUR 40. the Company must generate sufficient cash flows in order to repay its debt and pay the interest charges. In accordance with IFRS. As a result of the recent acquisitions.97 million. the value of these instruments was EUR 86. These recent transactions comprise: • Acquisition of the Lutosa Group for a price of EUR 175 million. The 25% threshold has most probably not been exceeded as a result of the acquisition of asset components of Padley Vegetables. The planned capital increases of a maximum of EUR 66 million will be used in part to repay the bridging finance which was granted to Pinguin in the context of these acquisitions. trade creditors amounted to EUR 33. In June 30th. In the 2006-2007 financial year a number of additional investment credits were granted.As at 30 June 2007. However.9 million. The Company is working on a club deal in which its bankers will fulfil the entire credit requirement. The intention is to refinance Pinguin’s existing loans and the acquisition debts together. personnel and contracts of the vegetable processor Christian Salvesen Foods in the United Kingdom for a price of EUR 26. the Pinguin Group’s debt position has increased sharply over the past months. Interest risk Pinguin’s relatively high indebtedness and the associated interest expenses have in the past had a substantial influence on the net result of the Pinguin Group. Drawings are made as a function of the completion of investments. In order to hedge against fluctuations in interest rates.

Primeur NV. The maximum risk is estimated at EUR 382.000. the parties decided to appeal. a company in the Lutosa Group.000. which was sold by Pinguin in 2002. within the framework of the Belgian or European competition regulations. was summoned before the Court of First Instance in Kortrijk by Eddy Van den Broeke. Eddy Van den Broeke asserts principally that he is the undivided co-owner of 15% to 20% of all shares of Van den Broeke .Lutosa NV and alternately that he is the undivided co-owner of 15% to 20% of 1. Bledina dispute In the summer of 2003.871 shares of Van den Broeke . Techno-Food is the former subsidiary of VDI (later renamed Pinguin Salads). No provision has been recognised. On the basis of the documents currently at its disposal. Maxwell Technologies dispute At the petition of the American company Maxwell Chase Technologies LLC. lawsuits and/or other procedures Pinguin is involved in a number of disputes and lawsuits. No provision has been recognised in respect of this dispute.124. the GMB trade union has filed a collective claim with the industrial tribunal against Padley Vegetables and Pinguin Foods UK Ltd on the grounds that they were not consulted on the intended change before the personnel were made redundant. No judgment is expected before 2008.000. GMB Trade Union dispute On behalf of the remaining 112 employees. Maxwell Chase Technologies LLC is also demanding statutory penalty interest from 22 October 2003 and demanding that all defendants be severally ordered to pay the costs of the proceedings. the management believes it is unlikely that Pinguin will be held solely liable. After a first instance judgment in 2007. 31 .The takeover of the Lutosa Group did not. Pinguin NV was summoned to appear before the Commercial Court in Kortrijk. in which the latter is demanding compensation for pieces of hardened particles found in carrots supplied to Bledina. Any judgment against Pinguin could have a material impact on the Company’s results. since there is insurance cover of EUR 300. The total damage claimed was set at EUR 682. The above facts date from the period after the sale of Techno-Food by Pinguin. The above facts date from the period prior to the acquisition of the Lutosa Group and form part of an inheritance dispute between Eddy Van den Broeke on the one hand and his brothers Guy. A timetable has been determined for the proceedings and the case is due to be heard by the Court of First Instance in Ghent on 4 June 2008.Lutosa NV shares On 10 September 2007. Since this dispute involves four parties. Although the Pinguin management considers it unlikely that the disputes or judgments in the legal cases will go against Pinguin.000 on the assumption that Pinguin Aquitaine SA is held solely liable. The claim is disputed by Pinguin Foods UK Limited. Maxwell Chase Technologies LLC is claiming compensation severally from all defendants for the termination of a distribution agreement between Maxwell Chase Technologies and Techno-Food NV of approximately USD 16.Lutosa NV. Luc and Yves Van den Broeke and sister Yanick Van den Broeke on the other hand. the management considers it unlikely that Pinguin will be ordered to pay compensation to Maxwell Chase Technologies. this possibility cannot be excluded. Dispute concerning ownership rights in respect of Van den Broeke . the proceedings were referred to the Court of First Instance in Ghent. in which the four parties were held liable. a dispute arose between Pinguin Aquitaine and Bledina. Risks associated with disputes. The claim is disputed by Primeur NV. have to be registered. In a judgment by the Commercial Court in Kortrijk.

4 below. Decrease in Share price or the price of the Preferential rights A future sale of a significant number of Shares or Preferential Rights on the stock market. Existing Shareholders who do not exercise their Preferential rights or who do not transfer them could be exposed to dilution. This represents a significant increase in the number of listed Shares. As part of the present Offering. or while or after the realization of the Offering. The Price of the Offering may not be indicative of the price of the Shares on the stock exchange after the Offering. which may also be influenced by the fact that VVPR Strips have no intrinsic value for institutional investors. could adversely affect the Share price or the price of the Preferential rights. The Share price would drop considerably if the Shareholders of the Company were to sell substantial numbers of Shares at the same time.176.470 Shares in connection with the private placement with the Van den Broeke family.368 Existing Shares in connection with the private placement on 26 October 2006. as far as the Preferential Rights are concerned. monetary and financial factors. and 1. If such a liquid market for the Shares fails to develop. this could influence the price of the Shares. Dilution of Existing Shareholders not exercising their Preferential rights Within the framework of the planned issue of New Shares. Volatility of the Share price Over the past few years. The Company cannot make any predictions about the Share price after the Shares are issued as per the present Offering. or the perception that such a sale could occur during the Offering. as per section 2. developments or publications concerning the Company.3 and 2. The Company cannot predict the effect on the Share price or the price of the Preferential rights if the Shareholders were to decide to sell their shares. These factors could also have an impact on the market price for VVPR Strips. Such volatility can significantly affect the share price of many companies. Note that the Company cannot guarantee the extent to which a liquid market for the Shares will develop or be sustained.10 below. The trading price of the Shares could be subject to fluctuations in response to changes. as far as the Shares are concerned. Limited liquidity on the market for the Preferential rights and VVPR Strips It is possible that the market for Preferential rights and for VVPR Strips will offer limited liquidity. the Company has requested permission to have listed on Eurolist by Euronext Brussels: theNew Shares 1.682. affecting the supply of VVPR Strips as well. as per sections 2. regardless of their actual performance.B RISK FACTORS ASSOCIATED WITH THE NEW SHARES Share Liquidity The market for the Shares offers rather limited liquidity. 32 . In addition. Fluctuations in the stock markets. Such sales could make it more difficult for the Company in the future to issue or sell Shares at a certain point in time and at a price that it finds appropriate. the stock markets have been subject to wide price variations which are not always an accurate reflection of financial performance of the companies which shares are traded. stock market prices and trading volumes could be materially impacted by economic. economic cycles and ongoing financial transactions can increase the volatility of the price of the Shares.

only the Dutch version is legally binding. potential investors must contact an authorised person or a person who is specialized in advice concerning the acquisition of financial instruments. APPROVAL BY THE BANKING. economic. FINANCE AND INSURANCE COMMISSION This Prospectus (the “Prospectus”) was approved in its Dutch version on 18 October 2007. These are invited to consult their own advisers concerning the legal. With respect to the Offering in Belgium. Those who may subscribe to the New Shares are the initial holders of Preferential rights and the holders of Preferential rights or of Scrips that have been acquired on Euronext Brussels or elsewhere. purchase or sale of the New Shares. Restrictions on the Offering The distribution of this Prospectus. statutory or other provisions in this Prospectus are provided purely for information and cannot be interpreted as investment.III GENERAL COMMUNICATIONS A. nor concerning the situation of the Issuer. can be restricted in certain countries by legal or statutory provisions. or by a regulating authority in Belgium or a foreign country. Finance and Insurance Commission (“CBFA”). tax. This approval implies absolutely no judgment by the CBFA concerning the opportunity and the quality of the transaction. Each summary and description of legal. The Offering and the Prospectus were not submitted for approval to supervisory bodies or any governments outside Belgium. Dutch and English versions of the summary of the Prospectus. Preferential rights and Scrips within the framework of this Prospectus. legal or tax advice for potential investors. Each person who is in the possession of this Prospectus must 33 . Countries in which the Offering is open The public Offering is valid solely in Belgium. the subscription. RESTRICTIONS ON THE OFFERING AND ON THE DISTRIBUTION OF THE PROSPECTUS Potential investors The issue of New Shares is accompanied by Preferential right for the Existing Shareholders. financial and other aspects of subscribing to the New Shares. B. PRELIMINARY WARNING Potential investors are invited to form their own opinion concerning the Issuer and the conditions of the Offering and the associated chances and risk. The Company is responsible for verifying the consistency between the Dutch and English versions of the Prospectus and between the French. The investors alone are responsible for the analysis and evaluation of the advantages and risks that are associated with subscribing to the Shares. The Prospectus has been drawn up in Dutch only and has been translated into English. in accordance with Article 23 of the law of 16 June 2006 on the public offering of investment instruments and the admission of investments instruments to the trading on a regulated market (the “Law of 16 June 2006”). The Shares were not recommended by any federal or local authority that is authorized concerning securities. by the Banking. If there are any doubts concerning the contents or the meaning of information in this Prospectus. as well as the Offering. C. the summary has also been translated into French. In conformity with article 31 of the Law of 16 June 2006.

or. any person who acquires New Shares or Preferential rights or exercises Preferential rights outside Belgium must ascertain for him/herself that the trading does not contravene the applicable legislation or regulations.000. to any legal entity which satisfies at least two of the following criteria: (i) an average number of employees of at least 250 persons during the last financial year. this Prospectus or allows its distribution must draw the attention of the recipient to the provisions of this section. (b) (c) (d) With a view to this provision. Preferential rights and Scrips in all countries where they should be listed. and may not constitute an offering for subscription in those countries where such an offering would violate the applicable legislation or regulations. purchase or sell New Shares. intended in article 3(2) of the Prospectus Directive. and may not under any circumstances be used with such an intention or within such a context. purchase or sale of New Shares. in as far as such an Offering of New Shares. unless the offering can be made in a Member State under one of the following exemptions specified by European Directive 2003/71/EC concerning the Prospectus to be published in case of a public offering or the admission of shares for trading (the “Prospectus Directive” including any transposition of it in each Member State). by the expression “Public offering for New Shares. Under no circumstances does this Prospectus constitute an offering or invitation to subscribe. or in any other case. even those not recognized or not regulated.411-1 of the “Code monétaire et financier” (Monetary and Financial Code) and 34 . to less than 100 physical persons or legal entities (other than qualified investors as defined in the Prospectus Directive).000. (ii) a balance total of at least 43.establish for him/herself the existence of such restrictions and observe them. The members of the Syndicate commit themselves to observe the legal and statutory provisions that apply for the Offering and the subscription. as shown in their last individual or consolidated annual reports. This Prospectus or any other document concerning the offering may not be distributed outside Belgium. Preferential rights or Scrips in any other Member State imposes no obligation on the Issuer to publish a prospectus in accordance with article 3 of the Prospectus Directive. whose sole corporate purpose is investment in shares. Member States of the European Economic Area No public offering concerning New Shares. where this definition in the Member State concerned can be changed by any measure that transposes the Prospectus Directive in this Member State.000 EUR and (iii) a net annual turnover of at least 50. Preferential rights or Scrips in a Member State” is meant a communication in whatever form and by any medium that gives information concerning the conditions of the Offering and concerning the New Shares. unless in accordance with the applicable legislation or regulations. Any person who distributes. Preferential rights or Scrips has been made or will be made in any Member State of the European Economic Area (“Member State”) other than Belgium. and to entities. for whatever reason. nor exercise of Preferential rights from investors who are themselves in a country where such offering or invitation would be illegal.000 EUR. The members of the Syndicate may not receive any subscription. Preferential rights or Scrips in countries where such offerings or invitations would be illegal. In general. Any person (including trustees and nominees) who receives this Prospectus may only distribute it in or send it to such countries in accordance with the laws and regulations that apply there. Preferential rights or Scrips offered that enable an investor to decide whether to subscribe. in so far as these exemptions are transposed in the Member State concerned: (a) to legal entities who are recognized or regulated as operators on the financial markets. purchase or sale of Shares. France The Prospectus is not drawn up within the framework of a public offering for shares in France within the meaning of article L. Preferential rights and Scrips.

and (b) that he/she in not associated as a person with the Issuer. The New Shares will not be offered to persons in the United Kingdom. Switzerland No public offering concerning the New Shares. as well as any other third party can rely on the authenticity and correctness of said acknowledgements. pledge or relinquish these shares in any way unless outside the United States and in accordance with Rule 903 or Rule 904 of Regulation S. Preferential rights or Scrips was made or will be made in Switzerland. they will also not be offered. by acceptance of this Prospectus and provision of the New Shares. and the investors cannot appeal to the advantage of this legislation. Unless stated otherwise. the New Shares. sell. an offer of sale. declared. Subject to what will be permitted by the Underwriting Agreement. United Kingdom Pinguin NV has not permitted any offering of shares to the public of the United Kingdom within the meaning of the Financial Services and Markets Act 2000 (“FSMA”).article 211-1 and following of the “Règles Générales de l’Autorité des marchés financiers” (General rules governing the authority of financial markets). Subject to certain exceptions. Subject to certain exceptions. or will become this in circumstances that do not lead and will not lead to a public offering in the United Kingdom for which the availability of an approved Prospectus is required in accordance with Article 85 of the FSMA. The Prospectus and any other document concerning the New Shares. Preferential rights and Scrips are not registered and will not be registered within the meaning of the US Securities Act of 1933 (“Securities Act”) or any other administrative government of shares of the American States or any other regulatory government of the United States. and will not be submitted to the “Autorité des marchés financiers”. the Joint Lead Managers may not at any time offer or sell the New Shares. in accordance with Article 652a par. except to persons who are defined in accordance with Article 86 (7) of the FSMA as ‘qualified investors’. sale or transfer of New Shares. as a result of which it would be required to make an approved Prospectus available in accordance with Article 85 of the FSMA. the terms that are used in this section have the same meaning as that which they have acquired in Regulation S of the Securities Act. registered. II of the “Code des Obligations suisse” (Swiss code on obligations). Preferential rights or Scrips on the territory of the United States or to US persons or to persons who act on behalf of or to the advantage of such US persons. declarations and guarantees. The Issuer is not and has not been registered in the sense of the US Investment Company Act of 1940. The Joint Lead Managers may not directly or indirectly invite or exhort to proceed with investment activities (within the meaning of Article 21 of the FSMA) concerning the issue or sale of shares in circumstances in which Article 21 (1) of 35 . Preferential rights and Scrips. the Issuer. Preferential rights or Scrips were not or will not be registered in the sense of the Securities Act and undertakes that he/she will not offer. guaranteed and acknowledged that: (a) he/she on date of provision or acquisition is or will be the effective beneficiary of such shares and that (a) he/she is not a US person and is outside the territory of the United States. (b) (c) Until the end of a period of 40 days as from the commencement of the Offering. the Joint Lead Managers and persons associated with them. United States The New Shares. bought or sold on the territory of the United States or to any US persons or to persons who act on behalf of or to the advantage of such US persons. Preferential rights or Scrips in the United States by a financial agent (irrespective of whether he/she participates in this offering) can be a violation of the registration obligations pursuant to the Securities Act. each acquirer of New Shares. Preferential rights or Scrips have consequently not been submitted. Preferential rights or Scrips will be considered to have. nor acts on behalf of such person.

may differ substantially from the future results. those that are described in the section “Risk Factors”. the randomness of the data collection process and other restrictions and uncertainties which are inherent to any statistic study of market data. 36 . financial situation. may be unreliable. This Prospectus or any other document concerning this offering may not be distributed on or sent to these countries. Any claimed acceptance of the offering resulting from a direct or indirect contravention of these restrictions will be considered to be null and void. RANKING AND OTHER DATA Unless specified otherwise in this Prospectus. the Prospectus refers to such independent sources. expectations and forecasts have been based on various assumptions and estimates of known and unknown risks. Australia and Japan The New Shares. as well as the estimations and convictions that are based on such data. The Company and the Joint Lead Managers and their respective consultants have not verified any of the aforementioned information independently. on reports of market research companies and other independent sources or on the own estimates and assumptions of the Company. uncertainties and other factors. The Joint Lead Managers must comply with all applicable rules of the FSMA concerning everything they do concerning the shares in the United Kingdom. expectations and forecasts concerning the future which were made by the management of the Company concerning the expected future performance of the Pinguin Group and the markets in which it is active. It is consequently possible that the real results. but are not limited to. Such declarations. about which the management is of the opinion that they are reasonable. SECTOR INFORMATION. F. that were considered reasonable at the time at which they were made. MARKET SHARE. Canada.the FSMA would not be applicable. D. from this country or what is related in another way to this country. performance or realizations that are described or suggested in such declarations. insofar as the Company knows and has been able to check. market information is liable to change and is not always verifiable with complete certainty because of restrictions on the availability and reliability of basic information. sold or acquired in Canada. Moreover. but which may or may not prove to be correct. Preferential rights and Scrips cannot be offered. Factors that can cause such a difference include. If information was inferred from independent sources. FORWARD LOOKING STATEMENTS This Prospectus contains declarations. ranking and other similar data in this Prospectus. The information that comes from third-party organizations is accurately represented and. Because of this the sum of certain data can differ from the total shown. performance or realizations of the Pinguin Group or the results of the sector. ROUNDING OFF FINANCIAL AND STATISTICAL DATA Certain financial and statistical information in this Prospectus was subject to rounding-off and changes in the exchange rate conversions. Australia or Japan. certain information has been incorporated in this Prospectus based on independent publications by authoritative organizations. Moreover these provisions and forecasts apply only on the date of the Prospectus. no facts as a result of which the information given would be inaccurate or misleading have been omitted. expectations and forecasts. Future investors must for this reason be aware that the data concerning the market share. E.

statutory auditor based at 8A President Kennedy Park. As far as the financial years ending on 30 June 2005 and 30 June 2006 are concerned. 1. having its registered office at 240 avenue Louise. GENERAL INFORMATION AND INFORMATION CONCERNING RESPONSIBILITY FOR THE PROSPECTUS AND FOR AUDITING THE ACCOUNTS 1. an unreserved declaration on the consolidated annual account with an explanatory paragraph was provided. The individual financial statements of Pinguin Foods UK Limited have been audited by Deloitte & Touche LLP. to the best of its knowledge. The Joint Lead Managers make no representation or warranty. It contains selected and summarized information.1. has been re-elected at the general Shareholders’ meeting in 2006 as statutory auditor for the Company for a period of three years. a company incorporated under Belgian law. or shall be relied upon as.v.1 RESPONSIBILITY FOR THE CONTENT OF THE PROSPECTUS The Company. The respective consolidated financial statements as of 30 June 2007 and 30 June 2006 have been prepared in accordance with International Financial Reporting Standards adopted within the EU and subject to applicable Belgian legal and governmental regulations. in accordance with the legal requirements and generally accepted auditing practices in Belgium. an unreserved declaration on the consolidated annual account was provided. and nothing in this Prospectus is. The auditor’s reports can be found in paragraph 7. having its registered office at 240 avenue Louise. of the market practices or of contracts entered into by Pinguin. the information contained in this Prospectus is. Cambridge. Chartered Accountants and Registered Auditors. This Prospectus is intended to provide information to potential investors in the context of and for the sole purpose of evaluating a possible investment in the New Shares. 30 June 2006 and 30 June 2005 have been prepared in accordance with the legal requirements and generally accepted auditing practices in Belgium.e. as laid out by the Institute of Company Auditors. Pinguin Salads BVBA and Pinguin Langemark NV have also been prepared by Deloitte Bedrijfsrevisoren BV/Réviseurs d’Entreprise BV o.5. toward anyone other than a potential investor.e. 8500 Kortrijk. as to the accuracy or completeness of the information in this Prospectus. As far as the financial year ending on 30 June 2007 is concerned. It cannot be used except in connection with the Offering. statutory auditor based at 8A President Kennedy Park. The individual financial statements of Pinguin NV. represented by Mr Richard Knights. in accordance with the facts and contains no omission likely to affect its import.v. assumes responsibility for the content of this Prospectus. express or implied. CPBA. CPBA is a member of the Instituut der Bedrijfsrevisoren (membership number B-00025). 1050 Brussels. 1050 Brussels. The Company declares that. does not express any commitment or acknowledgement or waiver and does not create any right.v. a promise or representation by the Joint Lead Managers. represented by its Board of Directors. Deloitte Bedrijfsrevisoren BV/Réviseurs d’Entreprise BV o. expressed or implied. UK. as laid out by the Instituut der Bedrijfsrevisoren.v.v.e. represented by Mr Mario Dekeyser. the auditor only delivered an unreserved 37 . 8500 Kortrijk.2 RESPONSIBILITY FOR AUDITING THE ACCOUNTS Deloitte Bedrijfsrevisoren BV/Réviseurs d’Entreprise BV o.v. a company incorporated under Belgian law. having taken all reasonable care to ensure that such is the case. The content of this Prospectus is not to be construed as an interpretation of the rights and obligations of Pinguin. CPBA. The statutory auditor unreservedly approved the individual annual accounts for Pinguin Foods UK Limited for the periods ending 30 June 2005 and 30 June 2006 as well as the individual annual accounts for Pinguin Langemark NV for the period ending 30 June 2005. The consolidated financial statements of Pinguin NV and its subsidiaries as of 30 June 2007. As for the individual annual account for Pinguin Langemark for the period ending 30 June 2006 and the individual annual account for Pinguin Salads for the period from 1 January 2005 to 30 November 2006. represented by Mr Mario Dekeyser.

Posting this Prospectus on the Internet does not constitute an offer to sell or a solicitation of an offer to buy any of the Shares to any person in any jurisdiction in which it is unlawful to make such offer or solicitation to such person. French and English). for information purposes only.pinguin.petercam. 8840 Westrozebeke. where they are available to the public. at telephone number +32 (0)2 464 60 01 (Dutch). 1000 Brussels. In accordance with the Belgian Royal Decree of 31 March 2003 (as amended) relating to the obligations of issuers of financial instruments admitting to trading on a Belgian regulated market.ing. the Prospectus and the summaries can also be obtained by investors at no cost from ING Belgium.be.e. the Company must prepare annual audited individual and consolidated financial statements. A copy of the latest articles of incorporation and corporate governance charter will also be available on the Company’s website. www. the Company will have to publish annual and semi-annual financial releases as well as a report including the annual financial statements. information about its shareholding structure and certain other information to the public. The Company will also have to disclose price sensitive information. English and French.pinguin. 19 place Ste-Gudule. Belgium.be.3. With respect to the individual annual accounts for Pinguin NV for the periods ending 30 June 2005 and 30 June 2006. The annual audited individual and consolidated financial statements and the annual reports of the Board of Directors and statutory auditor relating thereto are filed with the National Bank of Belgium. Other information on the website of the Company or any other website does not form part of this Prospectus. Summarized versions of this Prospectus are available in Dutch. In accordance with Belgian law. The Prospectus and the summaries will be made available to investors at no cost at the registered office of the Company at 3 Romenstraat. as a listed company. telephone number +32 (0)2 229 63 95 (Dutch. where they are available to the public.v. this Prospectus and the summaries are also available.report with an explanatory paragraph. 38 . Furthermore. made available or printed for distribution. from Bank Degroof +32 (0) 2 287 94 59. such information or documentation will be made available through press releases. In Belgium. the Company’s website (on the condition that all requirements pertaining to Article 14 of the Belgian Royal Decree of 31 March 2003 have been met) and the communication channels of Euronext Brussels or a combination of these media. The Company’s website is www. COMPANY DOCUMENTS AND OTHER INFORMATION The Company must file its (restated and amended) articles of association and all other deeds that are to be published in the annexes to the Belgian State Gazette with the clerk’s office of the Commercial Court of Ieper (Belgium).be. AVAILABLE INFORMATION This Prospectus is available in Dutch and English. the accounts were approved with a report with reservations and an explanatory paragraph. 24 avenue Marnix. on the Internet at the following websites: www. from Petercam. These releases will generally be published in the Belgian financial press in the form of a press release. Deloitte Bedrijfsrevisoren BV/Réviseurs d’Entreprise BV o.be. 1. CPBA also delivered an unqualified opinion on the pro forma consolidated balance sheet and income statement for Pinguin NV for the period ending 31 December 2006 and on the interim financial statements for the period ending 30 June 2007 (integrating the takeover of Lutosa Group as though it had occurred on 1 January 2006 and 1 January 2007). +32 (0)2 464 60 02 (French) or +32 (0)2 464 60 03 (English). www.v. Subject to certain conditions. The reservation relates to the recoverability of a receivable at Pinguin Foods UK Limited. the Belgian financial press. the auditor’s statutory report and the report of the Board of Directors of the Company. 1. Copies thereof and the annual report will also be available on the Company’s website. 1000 Brussels.4. and from KBC +32 (0) 3 283 2970. The electronic version may not be copied.

866.229.2.038.498.590. GENERAL INFORMATION REGARDING THE OFFER.603.716.344.021 217. taking into consideration its available cash and cash equivalents.398 1.968 6.524 (1) This amount does not take into account the capital increase on 28 September 2007 by the Board of Directors within the authorized share capital and the cancellation of the Preferential rights in favour of Messrs Guy and Luc Van den Broeke.1 2. Capital (1) Issue premiums Reserves (per 30 June 2007) Results (per 30 June 2007) Cumulative translation differences (per 30 June 2007) Minority interests(per 30 June 2007) Total Shareholders’ equity 48.818 46. The capital increase took place under the suspensory condition of subscription and payment in full of the cash contribution.171 39 .312 0 -2.549.446 0 1.1. 2.000 217.456.887.396. This net financial debt did not take into account (i) the capital increase of up to maximum EUR 66 million (ii) the proceeds associated with the sale and rent-back operation for EUR 45 million (before taxes and expenses) and (iii) the securitization of customer receivables in the amount of EUR 45 million. the realization of which will be determined on 16 November 2007.850 0 152.2 Equity capital and net financial debt Equity capital on 30 September 2007 On 30 September 2007 Shareholders’ equity was EUR 46.1 As of the date of this Prospectus the Issuer is of the opinion that. Pinguin Total long term debt -guaranteed -securitized -not guaranteed / not securitized Total short term portion of long term debt -guaranteed -securitized -not guaranteed / not securitized Total short term financial debt (without short term portion of long term debt) -guaranteed (1) -securitized -not guaranteed / not securitized 12.524. it has sufficient operating capital to satisfy its current requirements and to cover operating capital requirements for at least 12 months from the date of this Prospectus.603.656.527 11.559 0 828.446 4. Net Financial Debt on 30 September 2007 On 30 September 2007 the net financial debt amounted to EUR 212.208 -320. THE PRIVATE PLACEMENTS AND THE ADMISSION TO LISTING ON EUROLIST BY EURONEXT BRUSSELS BASIC INFORMATION Operating capital 2.1.

Total financial debt Liquid Assets Total net financial debt Pinguin (A) Lutosa Total financial debt Lutosa Liquid Assets Lutosa Total net financial debt Lutosa (B) Total net financial debt Pinguin + Lutosa (A+B)

236,721,994 5,213,378 231,508,616

4,861,610 23,713,728 -18,852,118 212,656,498

(1) This amount includes primarily the bridge financing that was entered into in the context of the takeover of Salvesen on 10 September 2007 and Lutosa on 28 September 2007. This amounts to EUR 202 million of which EUR 175 million for Lutosa and EUR 26,7 million for Salvesen.

2.2
2.2.1

INFORMATION ABOUT THE OFFER
Motives for the Offer and use of proceeds from the issue

On 26 June 2007 Pinguin NV reached agreement with the Van den Broeke family about the purchase of all shares of the Lutosa Group. This transaction was completed on 28 September 2007. Pinguin NV pays EUR 175 million for the shares of the Lutosa Group. Pinguin has right to the results of the Lutosa Group from 1 January 2007. The purchase of all shares of the Lutosa Group will be financed in part by EUR 20 million of the capital increase in favour of the Van den Broeke family, as the public capital increase with expected net proceeds of EUR 45 million that will be offered to all Shareholders. Food Invest International NV guarantees the successful outcome of this capital increase. The majority shareholder STAK has committed to exercising all of its Preferential rights. Pinguin NV will finance the balance of the acquisition price through a combination of long term loans, sale of receivables, and the sale and rent-back of the Lutosa Group’s real estate holdings to a corporation jointly controlled by Guy and Luc Van den Broeke and Hein and Veerle Deprez (in accordance with the procedure provided by article 523 and 524 of the Company Code). 2.2.2 Conditions governing the Offer

The capital increase of the Company will be realised with the Existing Shareholders’ Preferential Rights in the ratio of x New Shares for y Existing Shares held in possession. This ratio, as well the Issue Price per New Share will be published no later than the Opening Date of the Offer in the form of a Supplement to the Prospectus. All New Shares will give the right to reduced withholding tax known as VVPR. This right will be represented by a separate VVPR Strip. Each new share will have one VVPR Strip that will be listed and traded independently. 2.2.3 Value of the Offering

The total value of the Offering will not exceed EUR 46 million, issuance premiums included.

2.2.4

Subscription Procedure

The Offering Period will be open from 29 October up to and including 12 November 2007. Applications to subscribe for New Shares will be initially reserved for Existing Shareholders or acquirers of Preferential Rights during the Offering Period. Under these terms, they can subscribe to the New Share issue at a rate of x New Shares for y Existing Shares held. The Subscription ratio will be published as an addendum to this Prospectus no later than the start of the Offering Period.

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The Preferential Rights will be represented by coupon no. 4 of the Existing Shares. Holders of registered shares will receive bearer coupons representing the Preferential Rights that go along with the Existing Shares held. The Preferential Rights, in the form of share coupon no. 4, will be separated from the underlying shares on 26 October 2007 at the close of Euronext Brussels and will be separately tradable during the entire Offering Period on Eurolist by Euronext Brussels. During the Offering Period, Shareholders who own fewer Preferential Rights than the minimum quantity required for subscription to New Shares will be able to purchase their “missing” Preferential Rights to subscribe to an extra New Share or sell their “extra” Preferential Rights. An undivided subscription is not possible; the Company only recognizes one owner per Share. Shareholders, who have not exercised their Preferential Rights by the end of the Offering Period, or by 12 November at the latest, may no longer do so after this date. Preferential Rights that have not been exercised by the closing of the period for subscription with Preferential Rights will be represented by Scrips which will be sold to Food Invest International NV. Food Invest International NV will subscribe to the remaining New Shares at the same price and ratio as the Shareholders with Preferential Rights. The private placement of Scrips with Food Invest International NV will take place as soon as possible after the closing of the Offering Period, in principle on 13 November 2007. The selling price of the Scrips will be jointly determined by the Company and the Joint Lead Managers according to the theoretical value of the subscription rights, calculated based on the Offer Price and the Volume Weighted Average Price (“VWAP”) of the Share on Eurolist by Euronext during the Offering Period, divided by the number of Existing Shares required to subscribe for one New Share3. The VWAP of the Share will be limited to the average price of the Share in the 30-day period preceding the sale of the Scrips, in principle on 13 November 2007. The Company will make the proceeds from the sale of the Scrips, minus all related costs and expenses, available to Existing Shareholders who did not exercise or transfer their Preferential Rights by the closing of the Offering Period. The net proceeds of the sale of Preferential Rights sold in this way will be made available to Shareholders upon presentation of coupon no. 4. If you have any questions regarding this payment, please consult your financial intermediary. The results of the subscriptions with Preferential Rights and with Scrips will be published in the Belgian financial press on 16 November 2007. 2.2.5 Withdrawal and Suspension of the Offering

The Company reserves the right to withdraw from or suspend the Offering upon the occurrence of an event which enables the Joint Lead Managers to terminate their commitment. The Company also reserves the right to withdraw from or suspend the Offering by terminating the Underwriting Agreement with the Joint Lead Managers. The events giving rise to termination are stated in section 2.2.17 below. 2.2.6 Offer Price for New Shares

Shares will be acquired by Preferential Rights at the rate of x New Shares for y Existing Shares. 2.2.7 Allocation of Shares

Investors should be aware that all Shares they have subscribed to by exercising Preferential Rights will be fully allocated to them. 2.2.8 Withdrawal of Subscription

All subscriptions are binding on subscribers and may not be revoked by them.
3

VWAP Offer Price / Number of Existing Shares for each New Share.

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2.2.9

Payment and Delivery of the New Shares

Subscriptions by means of Preferential Rights or Scrips will be paid for by debiting the subscriber’s account, with value date 16 November 2007. The New Shares will be available in the form of dematerialised securities booked in the securities account of the beneficiary, or as registered shares recorded in the Company’s shareholder register, according to the shareholder’s preference. 2.2.10 Publication of Results

The results of the Offering with Preferential Rights and with Scrips will be published in the Belgian financial press on 16 November 2007. The amount of non-exercised Preferential Rights will also be published in the Belgian financial press on 16 November 2007. 2.2.11 Procedure for exercising and tradability of the Preferential Rights

The Preferential Right will be materialized via coupon no. 4. During the Subscription Period this right will be tradable on Eurolist by Euronext Brussels. For the procedure for exercising the Preferential Right, we refer to item 2.2.4 above. 2.2.12 Calendar

Decision of the Extraordinary General Meeting of Shareholders for a capital increase Publication of the announcement in the press, required by article 593 of the Belgian Company Code Determination of the Issue Price Availability to the public of the Prospectus and of the Supplement with the Prospectus (with the Issue Price) Opening of the subscription with Preferential Rights Closing of the subscription with Preferential Rights Accelerated private placement of the non-exercised Preferential Rights in the form of Scrips Allocation of the Scrips and subscription based on this Publication of the results of the subscription with Preferential Rights and with Scrips and the results of the sales of Scrips Payment of the price of the subscription for New Shares by the subscribers Determination of the capital increase Delivery of the New Shares to the subscribers Admission to trading of the New Shares on Eurolist by Euronext Brussels

4 October 2007 18 October 2007 26 October 2007 26 October 2007 29 October 2007 12 November 2007 13 November 2007 13 November 2007 16 November 2007 16 November 2007 16 November 2007 16 November 2007 16 November 2007

2.2.13

Plan for the distribution and allocation of the Shares

Categories of potential investors The issue is on the basis of Preferential Rights. The Preferential Rights are allocated to all Existing Shareholders of the Company. Able to subscribe to the New Shares: (i) the initial owners of Preferential Rights; (ii) those who have acquired Preferential Rights on Eurolist by Euronext Brussels; or (iii) Food Invest International NV that has acquired Scrips via the private placement described above. The public offering is only opened in Belgium.

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Intentions of the main Shareholders of the Issuer STAK, which owns 51.1% of the Shares, has irrevocably committed to exercise all its Preferential Rights. Until today, the company does not have any insight into the intentions of the other major Shareholders, nor any indication that certain major Shareholders will not participate. Pre-allocation information Not applicable. Notification to the subscribers We refer to item 2.2.10. above. Over-allocation and “green shoe” Not applicable. 2.2.14 Determination of the price

Determination of the price at which the New Shares are offered The Issue Price will be determined by the Company in consultation with the Joint Lead Managers, and at the latest on the day that immediately precedes the opening of the subscription, namely in principle on 26 October 2007, in relation to the share price of the Share on Eurolist by Euronext of Euronext Brussels (“Eurolist by Euronext Brussels”). A discount will be applied as is customary for these types of transactions, determined in accordance with market practices and depending on the then current circumstances and market conditions.

Procedure for the publication of the Price of the Offering The Price of the Offering, the subscription ratio and the final number of New Shares will be published, in the form of a supplement with the Prospectus, at the latest on the trading day before the Opening Date of the Offering. 2.2.15 Placement and guarantee of the successful outcome

Counter banks The requests to subscription can be submitted free of charge with the Syndicate or at these institutions through any other financial agent. The Shareholders are requested to inform themselves about any costs charged by these other agents. Financial service The financial service of the Shares is managed in Belgium by the Joint Lead Managers and Bank Degroof. This is free of charge for the Shareholders. If the Company should amend its policy with regard to this, they will report this in the Belgian financial press. 2.2.16 Interest of natural and legal persons involved in the Offering

The Joint Lead Managers have signed an Engagement Letter with the Company for the Offering and shall, in principle, enter into an Underwriting Agreement before the opening of the Offering. Furthermore:

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they have provided, and they will in the future provide, various banking services, investment services, commercial and other services to the Company or its Shareholders and to the Lutosa Group or its Shareholders within the scope of which they can collect remuneration; one of the Joint Lead Managers (ING) has agreed financing contracts and hedging instruments with the Company;

Furthermore Food Invest International NV has the right and the obligation to purchase the non-exercised Preferential Rights in the form of Scrips and therefore possibly subscribe for a proportionally larger part of the New Shares. 2.2.17 Underwriting Agreement

Except for the right of the parties involved by the Underwriting Agreement not to sign such an agreement, it is expected that the Company, Food Invest International and the Joint Lead Managers will sign an underwriting and warranty agreement at the latest on the trading day before the Opening Date of the Offering, which is expected to take place on 26 October 2007. Entering into this agreement can be dependent on various factors but mainly on the market conditions. It is expected that the Company will make specific statements in the Underwriting Agreement, will give warranties and will indemnify the Joint Lead Managers from certain liabilities. With due regard to the general terms and conditions and terms of the Underwriting Agreement, the Joint Lead Managers shall severally commit in their own name but on the account of the existing and new, private individual and institutional investors to subscribe on the following percentage of the offered shares and VVPR Strips in the offering, with a view to the immediate distribution of these shares and VVPR Strips to the investors involved: - ING België NV/SA - Petercam NV 50% 50%

The members of the syndicate shall transfer the shares and the VVPR Strips to investors, on condition of the prior issue of the required comfort letters sent by the statutory auditor of the Company and legal opinions sent by its legal advisor of the Company under a form and content that is acceptable for the Joint Lead Managers. Expectations are that the Underwriting Agreement will also determine that, as specific events take place, such as the suspension of trade on Eurolist by Euronext Brussels or a substantial and adverse change in the financial situation or business activities of the Company or in the financial markets, or other cases of force majeure, the Joint Lead Managers shall have the right under certain conditions and after consultation with the Company to withdraw from the Offering before the delivery of the Shares and the VVPR Strips has taken place. When this situation arises, the investors shall be informed by a publication in the Belgian financial press. Furthermore, Food Invest International or an associated company commits themselves after the Closing Date of the Offering, to purchase all non-exercised Preferential Rights that will be represented by Scrips and to exercise these. The subscription price of the New Shares of the Company will be the same for Food Invest International as those published in the supplement with the prospectus on 26 October 2007.

2.3 PRIVATE PLACEMENT OF 26 OCTOBER 2006 – ISSUE OF 1,682,368 SHARES
2.3.1 Capital increase by contribution in cash

On 26 October 2006 the Extraordinary General Shareholder’s Meeting of Pinguin NV decided to increase the share capital by EUR 12,499,994.24 to bring the share capital from EUR 36,453,861.71 to EUR 48,935,855.95.

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24 of new financial resources that incur no interest and that as operating capital greatly improve the liquidity and solvency ratio.680 (“2D”).24) by the obtained issue price. The average closing price amounted to EUR 7. and (c) to the amount of 201. This was the issue price.717 to 6. The necessary financial resources were made available to STAK by 2 D NV (previously called International Food Development NV) in exchange for which she has received 1.43.The issue price was determined as the average closing price of the Pinguin NV share on Euronext Brussels during the thirty days that preceded the Extraordinary General Meeting of 26 October 2006.3.589 Shares by the Public Limited Company KBC PE. 2 D NV is a limited company organised and existing under Belgian law. in exchange for its contribution in cash of EUR 999. a company organised and existing under Belgian law. With this. in exchange for her contribution in cash of EUR 1. which will benefit the profit of the Company.345. The number of Shares amounted to 1. The office is registered at Drevendaal 1 in 2860 Sint-Katelijne-Waver registered with the register of legal entities of the Crossroads Bank of Enterprises under company number 0457. 2.884 Shares by Lur Berri. and (d) to reduce the burden of debt.1 Identification of the companies involved with the changes of control. including three directors: (a) Management Deprez NV.368. by which the result is rounded off downwards. With these additional financial resources Pinguin NV wishes to strengthen the equity of the Company: (a) to finance the growth of the Company through additional investments both domestically as well as abroad to strengthen the competitive market position of the Company.895 ordinary Shares by STAK in exchange for its contribution in cash of EUR 9.499.3. of the Belgian Company Code.3.499.999.3. The company is managed by the Board of Directors. The number of Shares was then obtained by dividing the amount of the capital increase (EUR 12.12.3 Changes of control after the extraordinary general shareholder’s meeting of 26 October 2006: transactions at 21 December 2006 and 30 August 2007 2.2 Objective of the action During the past financial year Pinguin NV has suffered significant losses which had a negative influence on the financial structure of the Company and which have negatively influenced the Company’s level of debt. After the cancellation of the Preferential Right of the Existing Shareholders in application of articles 596 and 598 of the Belgian Company Code the afore-mentioned capital increase within the scope of a private placement was underwritten by means of a contribution in cash: (a) to the amount of 1.895 certificates of Pinguin NV shares. Veerle Deprez in her capacity of permanent representative ex article 61. or an exploitation or a branch. represented by Ms. As a result of this private placement the total number of Shares is brought from 4.424.27.345.994.85.682.499.993. (b) to exploit commercial opportunities for the Company.994. 45 .676.998. the Company will have available an amount of EUR 12. 2. (c) to attract new financial resources without entering into new loans and without granting guarantees. 1.999. § 1. without taking account with the figures after the decimal point. such as the possibility of the acquisition of a company.085. (b) to the amount of 134.996.

(b) Deprez Invest NV. All of Extremax’s shares are held by the Hein Deprez family. registered with the register of legal entities of the Crossroads Bank of Enterprises under company number 0442. being 43.71% of the share capital. Veerle Deprez.896.80% of the share capital. After the change of control of 21 December 2006 the Shareholders of 2 D NV are: (a) Management Deprez BVBA: 143. a company organised and existing under Belgian law. Since the transactions of 30 August 2007 the shares are indirectly held by the family of Hein Deprez and Veerle Deprez. of the Belgian Company Code.16% of the share capital.544. and (c) Extremax NV: 715 of the in total 763 shares. that represents 10.535. and (b) Tosalu NV to the amount of 33. represented by Mr. Veerle Deprez. of the Belgian Company Code. Lucie Desimpel in her capacity of permanent representative ex article 61.21% of the share capital. represented by Ms.99% of the share capital. being 45.13% of the share capital. Until 30 August 2007 all shares were held indirectly via the holding companies Extremax NV and Deprez Invest NV by the family of Hein Deprez.611 shares. Hein Deprez. that represent 89. § 1.535. The company is managed by a Board of Directors.738. It has its registered office at Drevendaal 1 in 2860 Sint-Katelijne-Waver. § 1. registered with the register of legal entities of the Crossroads Bank of Enterprises under company number: 0446.444 shares. In other words the family of Hein Deprez indirectly still has the exclusive control over Food Invest International NV.80% of the share capital. Food Invest International NV is a limited company organised and existing under Belgian law. (b) Deprez Invest NV: 1 of the in total 763 shares. director. being 6. 46 . Extremax NV is a public limited company under Belgian law. The company is managed by one non-statutory business manager: Ms. § 1. a company organised and existing under Belgian law. of the Belgian Company Code. Veronique Leterme in her capacity of permanent representative ex article 61. being 10.122. It has its registered office at Drevendaal 1 in 2860 Sint-Katelijne-Waver. 2.802. and (c) Tosalu NV. represented by Ms. being 93. 3. All shares are held by the last mentioned.729.143 shares are held by: (a) Food Invest International NV to the amount of 277. and then as follows: (a) Management Deprez BVBA: 47 of the in total 763 shares. and (c) Tosalu NV: 33. Since the transactions of 30 August 2007 the 311. being 0. (b) Food Invest International NV: 134.20% of the share capital. It has its registered office at Ellestraat 16 in 8610 Kortemark.532 shares. and (c) Marc Ooms BVBA. a company organised and existing under Belgian law. registered at Weistraat 17B in 9750 Zingem and it is registered in the register of legal entities of the Crossroads Bank of Enterprises under company number 0881. 4. Management Deprez BVBA is a private limited company with limited liability organised and existing under Belgian law. Marc Ooms in his capacity of permanent representative ex article 61. Tosalu NV is a limited company organised and existing under Belgian law. (b) Ms. registered with the register of legal entities of the Crossroads Bank of Enterprises under company number 0454. including three directors: (a) Mr. senior executive.611 shares.088 shares.

After the afore-mentioned transactions all shares of 2 D NV. Luc Desimpel. Before-mentioned capital increase was immediately followed by a transfer of 85.3. Samuel Desimpel. They represent 89. are held by 2 D NV.484.20% of the share capital of 2 D NV. Jose Devolder. by which the balance sheet item “financial assets” (being 1. 2. senior executive.367 certificates of shares of Pinguin NV. 5. In exchange Management Deprez BVBA acquired 141. After both actions all certificates of shares of Pinguin NV that are neither directly nor indirectly held by the Dejonghe family.776 of the 143. Thomas Desimpel. The value of the certificates of Shares paid was determined at the closing price of the Pinguin NV share on Eurolist by Euronext Brussels on the date of the contribution. This means that Food Invest International NV has acquired the exclusive control de jure over 2 D NV. 7.483 of the 1. In exchange for this contribution Management Deprez BVBA acquired 47 new shares of Food Invest International NV.83% of all issued certificates of shares of Pinguin NV.088 shares that they held in 2 D NV to Food Invest International NV. being 2. and (e. will be held by Food Invest International NV. The transfer price that was paid to Management Deprez BVBA by Food Invest International NV was equal to the issue price of the newly created shares of 2 D NV. that are not held by Tosalu NV.378 of the in total 3. by which a correction is carried out on the financial assets of 2 D NV: the certificates of Shares were valued at the average of the closing price of the Pinguin NV share on Eurolist by Euronext Brussels during a period of thirty days prior to the date of transfer. divided by the total number of issued 2 D NV shares. The contribution value of the 2 D NV shares brought in were determined in the manner determined under margin number 5. senior executive. They represent 72. on the understanding that the value of afore-mentioned certificates may never be higher than that of the closing price of the Pinguin NV share on the date of transfer.) Mr.2 History of the changes of control on 21 December 2006 and 30 August 2007 1. On 30 August 2007 Management Deprez BVBA has transferred 46. was revalued taking into account the closing price of the Pinguin NV share on Eurolist by Euronext Brussels on the date of the contribution.312 shares that Management Deprez BVBA held in 2 D NV. All shares are held by the family of the late Mr.000 new shares of 2 D NV by Management Deprez BVBA to Food Invest International NV. Food Invest International NV and Tosalu NV acquire the joint control de jure.150.138. 6. (d) Ms.411. Bernadette Debruyne. 4.345.086 certificates of Shares that they held directly. director. 2. The sales price of the 2 D NV shares were valued as follows: the corrected equity of 2 D NV as at 31 December 2006. After both transactions Pinguin NV was controlled by the family Deprez. (b) Mr. As a result of both actions Management Deprez BVBA. in the sense of article 9 of the Belgian Company Code. Management Deprez BVBA brought into 2 D NV 1. 3. On 30 August 2007 the remaining 96.895 certificates of Shares).17% of all certificates issued by the foundation. Management Deprez BVBA had the exclusive legal control over Pinguin NV. director. At the Extraordinary General Shareholder’s Meeting of 2 D NV of 21 December 2006. Since the Extraordinary General Shareholder’s Meeting of Pinguin NV on 26 October 2006.3. The issue price of the newly created 2 D NV shares was equal to the corrected equity of 2 D NV as at 30 November 2006 divided by the total number of existing shares. over 2 D NV and therefore indirectly over Pinguin NV. including five directors: (a) Mr. were also brought into Food Invest International NV. Lucie Desimpel. 8.977 new shares of 2 D NV. (c) Ms. 47 .The company is managed by a Board of Directors. The Dejonghe family holds directly or indirectly the remaining 27. senior executive.

2 D NV is entitled in accordance with article 3.3.367 of the 6. in conjunction with article 3. 48 . of the articles of association to appoint one director C. In particular it should be pointed out that within the scope of the transactions. Food Invest International NV has acquired the exclusive control de jure over Pinguin NV.676. Herwig Dejonghe.3. that represent 51.3. This actually means that since 30 August 2007 Food Invest International NV determines the voting behaviour of STAK at the general meeting of Pinguin NV. Mr. since 30 August 2007. of the articles of association to appoint one director B. or a company or a branch. and (c) by further reducing the burden of debt of Pinguin NV. 4 5 As holder of A certificates of shares of Pinguin NV. 2 D NV is also entitled to appoint at most three directors D.3. After the capital increase of 26 October 2006 the Stichting Administratiekantoor is holder of 3.09% of the share capital. In accordance with article 41 of the since abolished Royal Decree of 8 November 1989 on public transfer offerings and the changes in the control of companies the acquirer of a controlling participation in a listed company should only undertake a public offer on all shares of that company to the extent that he paid a control premium for the acquisition of the control. the Civil Company Dejonghe .Dejonckheere are entitled in accordance with article 3.Food Invest International NV is indirectly controlled via the holding companies Extremax NV and Deprez Invest NV by the family of Hein Deprez. Food Invest International NV itself has the exclusive control de jure over 2 D NV. In the short and medium term.1. As holder of the majority of the certificates of shares of Pinguin NV issued by the Pinguin Stichting Administratiekantoor and in accordance with article 3. in conjunction with article 3. Herwig Dejonghe and the Civil Company Dejonghe . Mr. of the articles of association to appoint one director B. on the understanding that the value of afore-mentioned certificates was not higher than that of the closing price of the Pinguin NV share.3. the certificates of shares of Pinguin NV were valued at the average of the closing price of the Pinguin NV share on Eurolist by Euronext Brussels during a period of thirty days prior to the date of both transactions.411. Mr. 2.Dejonckheere. the changes in control over Pinguin NV shall have no influence on the policy of the Board of Directors of Pinguin NV. Consequences of the changes of control at 21 December 2006 and 30 August 2007 on the policy within Pinguin NV and non-relevance of the article 41 of the Royal Decree of 8 November 1989 at that time 1. Koen Dejonghe is entitled in accordance with article 3. of the articles of association. Thereby. (b) by looking for commercial opportunities for Pinguin NV.085 shares of Pinguin NV.1. As holder of B certificates of shares of Pinguin NV. whilst 2 D NV can appoint at most four of the six directors 5. There were no reasons present to assume that the share price of the Pinguin NV share was not meaningful at that time.1. in conjunction with article 3.3. According to the articles of association of STAK. As a result of both transactions there was no control premium paid in the sense of aforesaid article 41g. According to bylaws the Dejonghe family (being Mr. in conjunction with article 3. It was in any case the intention to support and promote the policy at that time.1. Koen Dejonghe and Pinguin Invest NV) can only appoint two of the six directors 4. As holder of C certificates of shares of Pinguin NV. 2 D NV has the right to appoint the majority of the directors of the Stichting Administratiekantoor.3. such as the possibility of the acquisition of a Company. being: (a) by ensuring a growth of Pinguin NV through additional investments both domestically as well as abroad to strengthen in this way the competitive market position of Pinguin NV. 2.

This pertains to regular shares that represent capital (in euro).5 INFORMATION ABOUT THE EFFECTS THAT WILL BE OFFERED AND/OR ADMITTED AS SHARES FOR TRADE ON EUROLIST BY EURONEXT BRUSSELS Nature and form of the New Shares 2.4.3 Results of the afore-mentioned capital increase As a result of the afore-mentioned capital increase.1 PRIVATE PLACEMENT OF G&L SHARES Capital increase as a result of contribution in cash On 28 September 2007 the Board of Directors of Pinguin NV decided to increase the share capital within the authorised capital by a maximum amount of EUR 20.000. The G&L Shares will be issued with VVPR Strips. rounding the result down.2 Purpose of the act Pinguin NV reached an agreement with the Van den Broeke Family on 26 June 2007 regarding the purchase of all the shares of the Lutosa Group.00. 2. production. They will have the same corresponding rights as the Existing Shares.49% of the Shares for the current transaction. Pinguin NV paid EUR 175 million for the Lutosa Group shares. without indication of nominal value.2. which becomes the issuing price.1.4.4 2. 2.470. In this way.1 2. The issue price of the G&L Shares was determined by the average closing price of a Pinguin NV share on the Euronext Brussels during the thirty days preceding the Board of Directors meeting on 28 September 2007.5. and expands its assortment by frozen potato products.4. Pinguin takes a giant step forward by this acquisition. Guy Van den Broeke and Mr. This transaction was completed on 28 September 2007.5. R&D and the extensive commercial network strengthen the Pinguin organization even further. The achievements by Lutosa in the area of agronomy. 2. of the same category. Luc Van den Broeke will each be the owner of 7. Pinguin has right to the results of the Lutosa Group as of 1 January 2007. of which the realisation is determined on 16 November 2007. The number of G&L Shares was then attained by dividing the amount of the capital increase (EUR 20. by the Van den Broeke Family. completely freely tradable. with voting rights. technology. The average closing price was EUR 17.1 Nature All the New Shares will be issued in conformance with Belgian law. 49 . The purchase of all the Shares of the Lutosa Group will be partially financed by both the capital increase by EUR 20 million for the benefit of the Van den Broeke Family.000 by cancelling the Preferential Right of the Existing Shareholders by the application of Articles 596 and 598 of the Belgian Company Code in favour of the Van den Broeke family.176. without taking account with the figures after the decimal pount. The afore-mentioned capital increase will be subscribed in the scope of a private placement through a contribution in cash. Mr. as well as the public capital increase to the maximum amount of EUR 46 million which will be offered to all Shareholders.000.000) by the determined issue prices. the number of G&L Shares becomes 1.

2.5. The New Shares will be issued with VVPR Strips.5. the Shares are registered in the register of Shareholders of the Corporation.5. for which the conversion is requested. notwithstanding a request to this effect by the Board of Directors of the Company. but must pay a fine of 10% of the exchange value of the securities per delayed year from 31 December 2015. The request for conversion to dematerialized securities must be submitted by a recognized account holder or by a settlement institution selected by the issuer of the securities. will be converted by right by the issuing company into dematerialized shares. In conformance with the Act of 14 December 2005 containing the abolition of bearer securities. Shareholders can vote by proxy.2 Form The New Shares will be represented by one or more global certificates. will be converted to dematerialized securities by right. However. the New Shares will be registered at issuance through Euroclear Belgium on the securities account of the investor.2. The proceeds of the sale (after the deduction of certain costs of the issuing company) will be deposited at the Deposit and Consignment Office until a person has demonstrated his rights to the sold securities and demands repayment. this request will only be admissible if the securities. The owners of bearer shares which would not be converted by right must request conversion to securities in name or dematerialized securities at the latest on 31 December 2013. For the Shareholders who select a registration on account. the issuing companies must offer all shares that do not have a known owner by that date for sale. 50 . The involved companies must modify their bylaws before 31 December 2007. For the Shareholders who select the form of nominative Shares. the bearer shares noted on a regulated market. the bearer shares for which no conversion was requested. 2. The conversion will take place by registration of the securities on a securities account by the recognized account holder or the settlement institution. are turned over to the recognized account holder or settlement institution.5.Which are not fully-paid. The VVPR Strips will be assigned the code ISIN BE0005618898 and symbol PINS.2 Rights that are attached to the Shares 2. and be registered on the credit of a securities account under the name of the issuing company. On that date. 2.1. The rights associated with these shares will be deferred.1 Voting rights Each shareholder of the Company has the right to one vote per share. securities issued after 1 January 2008 can only be nominative or dematerialized.1. registered on a securities account. The voting rights can be suspended in regard to Shares: . This person can have his rights be applicable to the proceeds of the sale of his securities or to the unsold shares. until the titleholder makes itself known. As of 1 January 2015 and after the publication of an announcement in the Annexes to the Belgian Official Gazette and in the Belgian financial papers. The investors are requested to note on their registration form whether they want to receive the New Shares on which they are subscribing (i) in the form of a registration on account or (ii) in the form of a nominative registration in the register of the Shareholders of the Corporation.The New Shares will participate in the results as of 1 July 2007.3 Act of 14 December 2005 containing the abolition of the bearer securities The following summary rests on the acts and regulations in effect on 31 August 2007. The New Shares are assigned the code ISIN BE0003765790. On the expiration date of the above-mentioned term.

. At the ordinary General Meeting the Board of Directors presents the audited statutory and consolidated annual accounts and reports of the Board of Directors and the statutory auditor with regard to the annual accounts to the Shareholders. If this day is a legal holiday.Determine the remuneration of the directors and the statutory auditor for the performance of their mandate. The invitations to attend have to be sent to the holders of registered shares..Appoint and discharge directors and the commissioner of the Company. The meeting is organized annually on the third Friday of May at 14:00 hour (Central European Time.Decisions with regard to the dissolution.Approve the annual financial statements of the Company. the date and the time of the meeting and the items on the agenda which need to be discussed and provide the proposals to be decided upon. The invitation to attend must also be published in a national newspaper at least 24 days prior to the meeting. date and time stated in the bylaws of the Company and at which the agenda is restricted to the presentation of the annual accounts.2 Right to attend and vote at General Meetings Annual General Meeting of Shareholders The ordinary General Meeting is held at the registered office of the Company or at the location that is indicated in the invitation to attend the general meeting. unless the meeting concerns an ordinary General Meeting. the meeting is held on the next working day.Assign acquittal to the directors and statutory auditor.5. 51 . which is held in the municipality and at the location. and . . .Of which the voting right was suspended by an authorized court or the CBFA. the annual report of the Board of Directors and the report from the statutory auditor with regard to the annual accounts and the discharge of the directors and the statutory auditor. explicitly and in writing to receive the invitation to attend via another means of communication. 2. the discharge of the directors and the statutory auditor and.Bringing a claim for liability against the directors. the proposed appropriation of the result of the Company. Such General Meetings must also be convened whenever requested by the Shareholders who together represent a fifth of the subscribed capital.2. This communication takes place via an ordinary exchange of letters unless the addressees have agreed individually. Special and Extraordinary Meetings of Shareholders The Board of Directors or the statutory auditor (or. . the holders of registered certificates issued with the cooperation of the Company. In general. and to the directors and the statutory auditor of the Company 15 days prior to the General Meeting. GMT +1). unless the shareholder of the Company and the CBFA have been informed at least 20 days prior to the date of the relevant General Meeting of Shareholders in correspondence to Article 545 of the Belgian Company Code. The annual accounts and the reports of the Board of Directors and the statutory auditor with regard to the annual accounts must also be made available to the public and this at least 15 days prior to the day of the ordinary General Meeting.The approval of amendments to the bylaws. . without having to present proof of the fulfilment of such formalities. The invitation to attend must be published at least 24 days prior to the meeting in the Belgian Official Gazette. .To which more than one person is legally entitled. . . The General Meeting then decides on the approval of the statutory annual accounts. as the occasion arises.Distribute the profits. merger and certain other reorganisations of the Company. the General Meeting is exclusively authorized to: . Invitations to attend the General Meeting of Shareholders The invitation to attend the General Meeting must state the location. the (re)appointment or the dismissal of the statutory auditor and/or of some or all of the directors. except if a sole representative was designated only for the execution of the voting right. the holders of registered warrants. as the occasion arises. the holders of registered bonds.That give their holder the right to voting rights above the 5% threshold or a multiple of 5% of the total number of voting rights that are linked to the shares of Company on the date of the relevant General Meeting of Shareholders. the liquidators) can convene a Special or Extraordinary General Shareholder’s Meeting at any time when the interest of the Company requires it.

decide on the profit appropriation by a simple majority of votes at the ordinary General Meeting. only Shareholders can vote at the General Meetings. Power of attorney Every shareholder can give power of attorney by letter.2. within the same period of time. warrants and certificates. Quorum and majority In general. Dividends All shares participate in equal amounts in the profit of the Company (if there is any). In order to be admitted to the General Meeting the owners of registered shares must inform the Board of Directors of their intention to attend the General Meeting at least four working days prior to the meeting. The bylaws of the 52 . The owners of dematerialised shares must deposit. The change of the corporate purpose of the Company requires the approval of at least 80% of the votes cast at a General Meeting that. Pursuant to the Belgian Company Code the Shareholders can. at the organisations indicated by the Board of Directors. 2. division and certain other reorganisations of the Company. should there be any. decisions with regard to the dissolution. merger. are registered. They will be admitted to the General Meeting on presentation of their identity document and of the attestation from which it appears that their bearer securities were deposited on time. telex. unless the addressees have agreed individually. 2. the communication can be restricted to sending the invitations to attend by registered letter. If the quorum requirements are not satisfied during the first meeting.3 Formalities to attend the meeting of Shareholders All holders of shares.When all shares. The representative must not be a shareholder. an attestation drawn up by either the recognized account holder or by the settlement agency. in principle. The Board of Directors may determine the form of the powers of attorney in the invitation to attend and demand that they are deposited at least four working days prior to the General Meeting at the location indicated in the invitation to attend. in principle. a second General Meeting must be convened by means of a new invitation to attend. warrants or bonds (if in existence) that were issued by the Company and all holders of certificates that were issued with the cooperation of the Company (if in existence) may attend the General Meetings. Capital increases which were not decided by the Board of Directors within the scope of the authorised share capital. The holders of bonds. if the Board of Directors demands this in the invitation to attend. However. but also the approval of at least 75% of the votes cast.5. issued with the cooperation of the Company. warrants or certificates that were issued with the cooperation of the Company may attend the General Meeting provided there is compliance of the admission conditions provided for the Shareholders. The New Shares and G&L Shares give right to dividend payments (if there are any) starting from and for the entire financial year that begins on 1 July 2007 and every subsequent financial year. and this on the basis of the most recently audited annual accounts that were drawn up in accordance with the generally accepted accounting principles in Belgium and on the basis of a (non-obligatory) proposal from the Board of Directors of the Company. by which the unavailability of these shares to the General Meeting is determined.4. The holders of bearer securities must deposit their titles within the same period of time at the location indicated in the invitation to attend. there is no quorum requirement for the General Meeting and the decisions are taken with a simple majority of the votes of the attending or represented shares. telegram. can only validly make this decision if at least 50% of the share capital of the Company and at least 50% of the profit-participating certificates. amendments to the bylaws (other than a change of the corporate purpose) and certain other decisions foreseen by the Belgian Company Code require not only the presence or representation of at least 50% of the share capital of the Company. bonds. explicitly and in writing to receive the invitation to attend via another means of communication. telefax or in another manner in writing to be represented at the General Meeting. The second General Meeting can validly discuss and decide irrespective of the number of shares that are in attendance or represented. are in attendance or represented.2.5.

within two months following the date on which the said under-capitalisation was detected or should have been detected. after which the dividends become the property of the Belgian State.5. the Board of Directors must submit steps for the recovery of the Company’s financial condition. if it is adopted by 25% of votes cast at the Meeting. the same procedure must be followed.5. the liquidation must be carried out by one or more liquidators appointed by the General Meeting and whose appointment has been ratified by the Commercial Court. 2. shall be entitled to dissolve the Company. Furthermore. decreased by provisions and debts. does not fall beneath the amount of the paid in capital (or. whereupon the Company is no longer obliged to pay out such dividends. The said resolution must meet the quorum and majority requirements governing an amendment of the Articles of Association. if this is higher. costs of the liquidation and taxes shall be repaid to Shareholders on the same basis. This is the so-called authorised capital. on the understanding that the motion for the dissolution can be implemented. 2.6. if the dividend payment on bearer shares was not claimed by the legal holder of these shares. with at least 50% of the issued company capital present or represented. the Board of Directors shall either propose the dissolution of the Company or its continuation. In the latter event.5.2. For registered shares the right to payment of each dividend expires 5 years after the declaration of the Board of Directors that this dividend is payable. Modifications of company capital Modifications of share capital by resolution of Shareholders The General Meeting can at any time decide to increase or decrease the company capital. an Extraordinary General Shareholder’s Meeting. During the said Meeting. determined in accordance with Belgian accounting rules). prior to the dividend payment.e.500 (the minimum share capital of limited liability companies) any competent Court shall be able to be requested by each party concerned to dissolve the Company.Company also authorize the Board of Directors to pay out interim dividends on the profit of the current financial year in accordance with the conditions and provision of the Belgian Company Code. If as a result of accrued losses. 5% of the net profit must be allocated to the legal reserve until this legal reserve amounts to 10% of the share capital. If the net assets of the Company are below EUR 61. the ratio of net assets of the Company (determined in accordance with Belgian legal and accountancy rules) to the company capital is less than 50%. Rights at dissolution The Company shall only be able to be dissolved by a resolution of the General Meeting adopted by at least 75% of the votes issued at the Extraordinary General Shareholder’s Meeting. If as a result of accrued losses the ratio of the net assets of the Company to company capital is less than 25%. The Court can order the dissolution of the Company. with at least 50% of the capital present or represented. The assets or receipts of the sale of assets remaining after the payment of all debts. The right to claim the so deposited dividend payment expires after thirty years. the Company has the right to deposit these dividends with the Deposit and Consignment Office. Shareholders representing at least 75% of valid votes. Capital increases by the Board of Directors The General Meeting can authorise the Board of Directors by the same quorum and the same majority of votes to increase the company capital within set limits without the approval of Shareholders being required. the amount of the assets as stated on the balance sheet. With regard to bearer shares the Act of 24 July 1921 determines that. Dividends may only be paid out if after the announcement and the payment of the dividends the amount of the net assets of the Company on the closing date of the last financial year according to the annual accounts (i.2. of the called up capital) increased by the amount of the non-distributable reserves. the Board of Directors must call. On 4 October 2007 the Extraordinary General Shareholder’s Meeting 53 . The said authorisation must be limited as to time (that is to say that it can only be granted for a renewable period of no longer than five years) and as to scope (that is to say that the sum of the authorised capital must not exceed the sum of share capital of the Company at the time of the authorisation). decreased by any still not deducted amount of establishment and expansion costs and any still not deducted amount of research and development costs. or grant to the Company a space of time for regularising its condition. If the Company is dissolved.

7. Type and Transferability of Shares The Shares are registered or dematerialized. The Company will be able to issue dematerialized Shares either by increase of capital. the Company can issue bearer shares through 31 December 2007 and the possibility exists that bearer Shares of the Company will be in circulation through 31 December 2007. in the proportion of the company capital represented by their existing shareholding. After registering in the register. The same quorum and majority requirements apply to such a resolution as to a resolution of capital increase. Venn the granted authority is valid for a period of three years. The Share entered to the Account will be transferred by transfer from account to account. The Shares are always registered if so required by law. and can no longer issue any vote-granting securities which do or do not represent company capital.2.5. the shareholder will be provided with a certificate as evidence. Transfer Conditions: In accordance with the conditions of the Law of 14 December 2005 relating to the abolition of bearer securities. convertible debentures or warrants. Bearer shares that are not in a securities account will be converted to dematerialized Shares as of 1 January 2008 as soon as they are placed in a securities account. if the said securities are not offered preferentially to existing Shareholders in the proportion to their existing shareholdings. by means of compliance with the conditions laid down in the Company Code (see the section “Authorised capital”). 2. The General Meeting can resolve to limit the said preferential right depending on circumstances.authorised the Board of Directors to increase the company capital in the context of the authorised capital.8. 54 . Normally.5. 2. starting from the General Meeting that granted the aforementioned mandate. All Shares have a serial number. (b) the issue price of the shares is not less than the bid price and (c) the number of issued shares does not exceed 10% of the capital of the Company at the time of the public takeover bid. This preferential right is transferable during the period of subscription and within the limits of transferability of the effects to which they are linked. the (existing) Shareholders shall have the preferential right on the acquisition of the said new shares. Bearer shares that are in a securities account will exist in dematerialized form as of 1 January 2008. or by converting existing Shares into dematerialized Shares.2. From the time of the said communication until the end of the bid. bearing his own costs. Preferential right In the event of an increase of capital in cash through the issue of new shares. This prohibition does not apply to obligations the company validly undertook prior to the receipt of the CBFA communication in compliance with article 607 Belgian Companies Code. depending on the preference of the shareholder. Conversion of dematerialized Shares into registered Shares will be done by entering them in the related Register of registered Shares. Every shareholder will be able to request conversion of his Shares. which Shareholders may consult. either into registered Shares. or into dematerialized Shares. In accordance with article 607 W. registers of Shares are kept. the authorisation of the Board of Directors to increase the capital of the Company in cash with the cancellation or restriction of the preferential right of existing Shareholders suspended since the communication of the CBFA to the Company in compliance with article 607 Belgian Companies Code. The dematerialized Share is represented by an entry in the name of the owner or holder with an approved account holder or the settlement agency. The Shareholders may also decide to authorise the Board of Directors to restrict or cancel the preferential right in the context of the authorised capital. of a public takeover bid concerning the securities of the Company. The General Meeting can also expressly and previously authorise the Board of Directors to nevertheless increase the company capital after the CBFA communication in compliance with article 607 Belgian Company Code. On 4 October 2007 such an authorisation of the Board of Directors was renewed by the General Meeting. if (a) the shares are fully paid up immediately on their issue. This authorisation and power are set out in greater detail below. At the seat of the Company. The number of dematerialized Shares in circulation at any given time will be registered in the related register of Shares in the name of the settlement agency. the Board of Directors can no longer increase the company capital in compliance with article 607 Belgian Companies Code by way of a contribution in cash coupled with the cancellation or the restriction of the Shareholders’ preferential right. or rights which confer the right of subscription for the acquisition of such securities. The register of registered Shares may also be maintained electronically if the law permits. or in the case of the issue of convertible debentures or warrants.

or to issue other securities. the Extraordinary General Shareholder’s Meeting authorized the Board of Directors to increase the Corporation’s authorized capital in one or more operations to a maximum of EUR 60 million. must be present or represented. under the suspensory condition of the determination fo the capital increase approved. The Board of Directors’ authority applies to a capital increase in cash or in kind or through the conversion of reserves or issue premiums. Such prior approval by Shareholders is not required if the Corporation purchases the shares in order to offer them to employees of the Corporation. This authority is granted for a period of three years from the date of the publication of the resolutions of the Extraordinary General Shareholder’s Meeting in the Annexes of the Belgian Official Gazette. holders of bearer Shares can request conversion of these Shares into dematerialized Shares.2. The authority of the Board of Directors in the framework of the authorized capital is valid for a period of five years from the date of publication of the deed containing the amendment to the articles association of 4 October 2007 in the annexes of the Belgian Official Gazette.Until 31 December 2013 at the latest. within the limits of the authorized capital. The Shares. This authority expires on 2 December 2008.at the extraordinary general shareholders’ meeting. have been paid in full. and be registered in a securities account by the Board of Directors in name of the Company until the owner has made himself known. For the concrete execution of the conversion procedure and the determination of related modalities.5. including shares at issuance. within the limits of the authorized capital to issue convertible debentures. or registered Shares according to the procedure described in Article 7 or the previously mentioned law concerning the abolition of bearer securities. the Corporation can purchase and sell its own shares pursuant to an extraordinary resolution of the General Meeting that is ratified by at least 80% of validly cast votes at a General Meeting at which at least 50% of authorized capital and at least 50% of profit-sharing certificates. 55 . The total number of purchased shares held by the Corporation may not be at any given time more than 10% of authorized capital.2. an offer to purchase shares must be made to all Shareholders under the same conditions. the three types of Shares can coexist. the unconverted bearer Shares will be converted by right into dematerialized Shares. When increasing the capital within the limits of authorized capital. and at latest until the legal limit time has been reached. and can be transferred freely. any rights related to it are suspended. If the Board of Directors so decides. 2. Authorized Capital Stock On 4 October 2007. to restrict or cancel the preferential rights of existing Shareholders if in so doing it is acting in the interests of the Corporation and in accordance with article 596 et seq. if any. the Board of Directors has the authority to request an issue premium. with or without the issue or new shares. of the Company Code.9 Purchase and sale of the company’s shares In accordance with the Corporation’s bylaws and the Company Code. The Board of Directors is authorized. As long as all shares have not been converted to dematerialized or nominative Shares. the Board of Directors will inform Shareholders of the required instructions according to the Law of 14 December 2005 and implementing decrees. all of this in agreement with the Law of 14 December 2005. the Shares will be sold on the regulated market and the net proceeds will be deposited with the Deposit and Consignment Office. Up until then. In accordance with the Company Code. The Board of Directors is authorized to acquire the company’s own shares for the Corporation’s account when such acquisition is necessary to prevent the Corporation from suffering a serious and threatening loss. Shares can be purchased only using resources that would otherwise be available to pay a dividend to Shareholders. The Board of Directors is authorized to restrict or cancel the pre-emptive rights to the benefit of one or more persons.10. this issue premium must be booked to a blocked reserve account that can be reduced or removed from the books only by resolution of the General Meeting taken in a manner required for the provisions of the bylaws.5. The Board of Directors is authorized. warrants or combinations of these. even if such restriction or cancellation is in favour of persons who are not employees of the Corporation or of its subsidiaries. 2. If the owner remains unknown after 1 January 2015. After the previously mentioned period. This does not apply to the acquisition of shares through a regulated market or the acquisition of shares with the unanimous approval of Shareholders during a meeting at which all Shareholders are present or represented.

and to confirm that the Board of Directors is also authorised to incorporate issue premiums into the capital in the event of a capital increase related to the permitted capital. dated 15 December 2004 concerning the transparency requirements applicable to information on issuing institutions whose securities are permitted for trading on a regulated market. A public takeover bid must be made for all the Corporation’s shares conveying the right to vote and to all other securities giving their holders rights to a subscription for or acquisition of or conversion to securities conveying the right to vote. a court order to sell the shares to a third party and/or criminal liability.5.5. which took effect on 1 September 2007 pursuant to Royal Decree of 27 April 2007 on public takeover bids of (published in the Belgian Official Gazette of 25 May 2007). The Belgian Law on public takeover bids further provides that another or additional threshold percentage for shares with voting rights can be determined by Royal Decree in order to take account of changes in financial markets and that. This law is not yet in force. together with article 14 of the Corporation’s bylaws.In the convocation for the Extraordinary General Shareholders’ Meeting of 9 November 2007. transitional measures can be taken. alone or in combination with others.3 Disclosure of significant participations In the matter of the publication of significant participating interests. Belgian legislation. Public takeover bid Each public takeover bid for the Company’s shares and other securities conveying the right to vote (such as any warrants or convertible debentures) is subject to the supervision of the CBFA. of the total number of voting rights associated with the Corporation’s shares. in such a case.5. Prior to such a bid. The forms for such disclosure and additional explanation are available on the CBFA’s website (www. and must report such disclosure in the notes to its annual accounts.cbfa. alone or in combination with others. impose disclosure requirements upon each individual or each entity acquiring or transferring securities conveying the right to vote or securities that give rights to securities conveying the right to vote.be).1. which was published on 16 October 2007 in accordance with Article 533 of the Code of Corporations. provides that an obligatory bid must be made if a natural person or a legal entity. 2. Article 74 of the Belgian law on public takeover bids provides for an exemption to the 56 . 2. directly or indirectly holds more than 30% of shares with voting rights in a company with its registered office in Belgium and of which at least a portion of the shares with voting rights are traded on a regulated market or in a multilateral trading system referred to in a Royal Decree. The documents by which the acquisition is completed must be submitted to the CBFA. the General Meeting is asked to clarify the provisions in the Articles of Association related to the permitted capital. and the amendment of EU Directive 2001/34/EU. The simple exceeding of the applicable threshold value will bring about an obligatory bid. that exceed or fall below the threshold value of 5%. and the implementation decrees have not yet been published in the Belgian Official Gazette. Belgian legislation has recently been amended by the Act of 2 May 2007 with respect to the shares of issuers that have been allowed to trading on a regulated market and containing various provisions. Euronext Brussels will publish details of the disclosure. Such disclosure is also required if an individual or entity acquires or transfers control (direct or indirect. de jure or de facto) of a company that holds 5% of the Corporation’s voting rights. the bidder must issue and distribute a Prospective approved by the CBFA. without regard for prices paid in the relevant acquisition being greater than the market price. disclosure must include a statement of the strategy to which the acquisition or transfer applies. The bidder must also obtain the approval of the relevant competitive authorities when the law prescribes such approval for the takeover of the Company. The Act of 2 May 2007 is a partial conversion of EU Directive 2004/109/EU by the European Parliament and the Council of Europe. The Belgian law on public takeover bids of 1 April 2007 (published in the Belgian Official Gazette of 26 April 2007). The Company is required to make known to the public the business day following receipt of each disclosure about an increase or decrease in a shareholder’s ownership of the Company’s shares.4 Regulations concerning obligatory disclosure of takeover and buy-out bids 2. or each multiple of 5%. held directly or indirectly by this individual or entity.4. The CBFA may also impose administrative sanctions. When a shareholder’s participation amounts to 20%. One shareholder whose participation exceeds or falls below this threshold value must make this known each time to the CBFA and to the Company. how many shares were acquired during the period of 12 months prior to disclosure and in what way these shares were acquired. Violation of the disclosure requirement can results in suspension of voting rights.

(a Belgian Resident Company). Neither are the individual circumstances of each investor taken into account in the summary. or (iii) a legal entity subject to Belgian tax on legal entities. with their request for acquisition of their shares at the bid price. such as the requirement on disclosure of large shareholdings (see sub section 2.5.2. as of the effective date of the provision containing such a bid requirement. pursuant to a public offer or the reopening thereof. For the purposes of this summary. through accepting the bid.7. holds 95% of the capital to which voting rights are connected and 95% of the securities that provide voting rights . or other change in control over the Company. It is based on Belgian tax law regulations and administrative interpretations in effect on the date of this Prospectus.5. has acquired securities that present at least 90% of the capital covered by the bid and to which voting rights are attached.5. These provisions could discourage certain potential takeover attempts that some Shareholders may think in their interest. 2. The Board of Directors has received such authority from the Corporation (see also Section 2. ownership and disposal of Shares in the Issuer. has acquired securities that present at least 90% of the capital covered by the bid and to which voting rights are bound. the holders of securities concerned must notify the bidder or the person appointed by him by registered mail.5 Belgian tax system The following is a general summary of the Belgian tax treatment of the acquisition. Normally.3) and merger controls. The following summary does not take into account or discuss the tax laws of any other country than Belgium. an individual whose domicile is in Belgium or whose “seat of wealth” (zetel van fortuin) is in Belgium. or a person assimilated to a Belgian resident (a Belgian Resident Individual). i.4. i. the securities in the possession of the holder of securities who decide in consultation. Preferential Right). The CBFA will be notified by the bidder about the requests. These provisions could also result in removing the opportunity for Shareholders to sell their shares at a premium.in accordance with Article 513 of the Belgian Company Code on public takeover bids. regulations and administrative interpretations. Any changes to Belgian tax law. i. change in the Board. in accordance with Article 513 of the Belgian Company Code on public takeover bids. on the condition that the bidder. hold at least 30% of the shares with voting rights on condition that proper disclosure of this shareholding was made to the CBFA within 120 business days after the effective date of the provision containing such a bid requirement. The General meeting can however authorize the Board of Directors to increase capital by issuing shares in an amount no more than 10% of the Company’s existing shares at the moment of the public takeover bid. through accepting the bid. 2. and could have a negative effect on the Corporation’s share price. a Belgian resident is: (i) an individual subject to Belgian personal income tax. each holder of securities can request the acquisition of their shares at the bid price.4. Prospective investors should consult their own advisors as to the Belgian and foreign tax consequences of the acquisition of ownership and disposal of the shares.2.obligatory takeover bid for persons who either alone or in combination with others. a legal entity other than a company subject to 57 .e.3 Squeeze-out If. including the purchases and the price. that possibly could apply to the Company and that make difficult a hostile takeover. including changes that could have a retrospective effect may influence the validity of this summary. merger. are put on a par with the securities the bidder himself holds. For the implementation of the 1e section of Article 513. are put on a par with the securites the bidder himself holds. within 3 months after the period of acceptance of the bid. There are various provisions with Belgian company law and a few other provisions within Belgian law. pursuant to a public offer or the reopening thereof. If the 1e section is applicable. the authority for the Board of Directors to increase the Company’s authorized capital in cash with restriction or cancellation of the pre-emptive right of existing Shareholders is suspended upon the CBFA’s announcement to the Company of a public takeover bid for the Company’s shares. For the implementation of the 1e section of Article 513.5. Sell-out If . (ii) a company subject to Belgian corporate income tax. holds 95% of the capital to which voting rights are connected and 95% of the securities that provide voting rights. a company that has its registered office. its main establishment or its effective place of management in Belgium. on the condition that the bidder.e. each holder of securities can request the acquisition of their securities at the bid price. the shares in the possession of the persons who decide in consultation.5. 2.e.

In principle. its main establishment or its effective place of management in Belgium (a Belgian Resident Legal Entity). Condition (1) is not applicable to dividends received by credit institutions referred to in Article 56 §1 of the Belgian Income Tax Code 1992 (“ITC 1992”) by insurance companies referred to in Article 56. However. By way of exception. provided that the dividend distribution does not entail a reduction in value of. this “fiscal” capital includes the actual paid-up capital and.5. for SMEs which meet certain conditions).e. In certain circumstances lower tax rates may apply (i. In both cases. Normally 25% withholding tax is owed on dividends in Belgium. in principle.corporate income tax. the repayment of capital carried out in accordance with the Belgian Company Code is not treated as a dividend distribution to the extent that such repayment is imputed on “fiscal” capital. Belgian Resident Individuals and Belgian Resident Legal Entities For Belgian Resident Individuals and Belgian Resident Legal Entities.2° of the ITC 1992 and by broker dealers referred to in Article 47 of the Law of 6 April 1995. If a Belgian Resident Individual elects to report the dividend income in his or her personal income tax return. or capital loss on. In both cases the Belgian withholding tax paid can be credited against the final income tax liability of the investor. then this income will be taxed at the special rate of 25% (or 15% for New Shares with VVPR strips) or at the progressive rate of personal income tax applicable to the tax payer’s overall declared income. the gross amount of all distributions made by the Issuer to its Shareholders will be taxed as a dividend distribution.99%. in certain circumstances.000. Under certain circumstances the rate for certain qualifying shares (VVPR shares) will be reduced from 25% to 15%. Belgian resident companies Corporate income tax For Belgian resident companies. provided that at the time of a dividend payment or attribution : (1) the Belgian Resident Company holds Shares in the capital of the Issuer for at least 10% or with an acquisition value of at least EUR 1. whichever rate is lower. the amount of income tax to be paid will be increased by local surcharges (which vary as a rule from 6% to 9% of the individual’s income tax liability). may be subject to Belgian withholding tax of 10% unless this acquisition is carried out on a stock exchange and meets certain conditions.5. (2) the Shares qualify and are recorded as a “fixed financial assets” under Belgian GAAP (Generally Accepted Accounting Principles). The reduction in value/capital loss restriction is not applicable if the Belgian individual shows that he had full ownership of the Shares during an uninterrupted period of twelve months prior to the attribution of the dividends. For the purposes of this summary. the Shares. subject to certain conditions.200. and this amount may also be refunded to the extent it exceeds the final income tax liability. Dividends For Belgian income tax purposes. the paid issue premiums and the amounts subscribed to at the time of issue of profit sharing certificates. the gross dividend income (including the withholding tax) is normally taxable at (currently) 33. 2. and (3) the Shares were in full ownership or were held for an uninterrupted period of at least one year. that has its registered office.1. the purchase price (after deduction of the part of the revalorised paid up capital represented by the Shares redeemed) will be treated as a dividend which. 95% of the gross dividend received can (although subject to certain limitations) be deducted from the taxable income (“definitive taxed income (DTI) deduction”). Conditions 58 . a Belgian non-resident is any person who is not a Belgian resident. The New Shares will benefit from the 15% withholding tax since the Issuer has decided to issue VVPR strips in relation to these New Shares. In case of an acquisition of own Shares. §2. In the event of liquidation of the Issuer. a withholding tax of 10% will be levied on any distributed amount exceeding the fully paid up fiscal capital. Belgian withholding tax generally constitutes the final tax in Belgium on their dividend income and the dividends do not have to be reported in their annual income tax return.

if during that period. Condition (ii) is not applicable if the investor proves that it has been the full legal owner of the Shares for an uninterrupted period of twelve months prior to the attribution of the dividends or if. No withholding tax will be due on dividends which are paid to a Belgian Resident Company if at the time of distribution of the dividend. With regard to non-resident individual investors who acquire the Shares for professional purposes or nonresident companies. and. the Issuer will pay the withheld amount to it. provided that: (i) the tax payer is the full legal owner of the shares at the time of payment or attribution of the shares. A non-resident shareholder. who does not hold Shares through a permanent establishment in Belgium. Exemption from withholding tax on Belgian dividends is available to: (1) European Union resident companies that qualify under the EU Parent-Subsidiary Directive 90/435/EEC of the Council of 23 July 1990 as amended by Directive 2003/123/EC on 22 December 2003. with regard to non-resident companies only. For non-resident companies the DTI deduction applies under the same conditions as for Belgian resident companies. If the investor certifies its resident status and the date on which it acquired the shareholding. the Issuer will retain an amount equal to the withholding tax. or (ii). the Shares have never belonged to a tax payer other than a resident company or a non-resident company holding shares through a permanent establishment in Belgium.(1). Belgian non-residents If the Shares are held by a non-resident in relation to a company in Belgium. A shareholder that holds an interest in the Issuer of 15% or more. but that has not held such interest for the minimum one year period at the time the dividends are attributed. provided that the dividend distribution does not give rise to a write-off or a capital loss on the shares. the Issuer will not transfer this amount to the Belgian Treasury. For those investors who have held the minimum participation in the Issuer for less than one year. the withholding tax may be offset against the corporate income tax and be reimbursable to the extent that it exceeds the corporate income tax payable. during this period. which will be subject to non-resident individual or corporate income tax. may benefit from the exemption if 59 . (2) and (3) are not applicable to dividends received by investment companies as defined in Article 2. the Shares have never belonged to a tax payer other than a resident company or a non-resident company holding shares through a permanent establishment in Belgium. subject to certain formalities. the withholding tax may be offset against non-resident individual or corporate income tax and is reimbursable to the extent that it exceeds the actual tax payable. and (ii) the dividend distribution does not give rise to a write-off or a capital loss on the Shares. provided that they have owned at least a 15% interest in the Issuer (10% after 1 January 2009) for an uninterrupted period of at least one year and subject to certain formalities. and (2) certain qualifying companies that are subject to corporate tax or a similar tax and that are tax resident of a State with which Belgium has concluded a double tax treaty and with which Belgium has agreed terms for the exchange of information necessary to enable the respective enforcement of each State’s tax laws. the tax payer must fully own the Shares at the time that the dividends are made available for payment or attributed in order for the withholding tax to be creditable against non-resident individual or corporate income tax. As soon as the investor has owned the shares for one year. This condition is not applicable if (i) the non-resident individual or the non-resident company can prove that he/it has been the full legal owner of the Shares for an uninterrupted period of twelve months prior to the attribution of the dividends.5°. the Belgian Resident Company has owned at least 15% of the Shares for an uninterrupted period of at least one year. will not be subject to any Belgian income tax other than the dividend withholding tax. In principle. the non-resident must report any dividends received. f of the ITC 1992. which usually constitutes the only and final Belgian income tax due. Withholding tax In principle. Note that the 15% minimum participation requirement will be reduced to 10% for dividends attributed or paid after 1 January 2009.

60 . Capital losses are generally not tax deductible under Belgian tax law. redemption or other transfer of Shares are in principle not tax deductible under Belgian tax law. Capital losses realised upon the sale. Prospective Shareholders should consult their own tax advisors to determine whether they qualify for a reduction in the withholding tax rate and. as appropriate. However: • capital gains realised by a private individual are taxable at 33% (plus local surcharges) if these gains are the result of speculation or if they cannot be characterised as being the result of normal management of a private estate.2. Non-resident companies holding Shares through a permanent establishment in Belgium are generally subject to the same regime as Belgian resident companies. reducing the dividend withholding tax rate to 15%. Capital gains and losses Belgian Resident Individuals and Belgian Resident Legal Entities Belgian Resident Individuals and Belgian Resident Legal Entities are generally not subject to Belgian income tax on capital gains realised upon the sale. Belgian resident companies Belgian resident companies are generally not subject to Belgian income tax on capital gains realised from the sale. 2. Belgian Resident Individuals who hold shares for professional purposes are taxed at the ordinary progressive income tax rates increased by the applicable local surcharges on any capital gains realised upon the disposal of Shares. depending on terms and conditions relating to the significance of the shareholding and certain identification formalities.5. the capital gains tax would be levied at a reduced rate of 16. The Belgian tax authorities have announced that they will comply with the ECJ decision. 10%. If the Shares were held for at least five years prior to such disposal. The European Court of Justice ruled on 8 June 2004 that the Belgian legal provision stipulating that such gain is taxable. the procedural requirements for obtaining such a reduction or claiming any reimbursement. Belgium has concluded tax treaties with more than 80 countries. Losses on Shares realised by such an investor are tax deductible.it undertakes to continue to hold the Shares until the period of one year has expired and to notify the Issuer immediately if the one year period has expired or if its shareholding falls below 15%. the Belgian dividend withholding tax may be reduced for investors who are non-residents pursuant to the treaties for the avoidance of double taxation concluded between the Belgian State and the state of residence of the non-resident shareholder. in principle. losses from speculative transactions or transactions outside the framework of normal management are. to certain nonresident companies or legal entities are taxable at 16. if this gain is realised upon a sale to a resident of the European Economic Area. If no exemption is available under Belgian domestic tax law.5% (plus local surcharges). exchange. Losses incurred by a Belgian Resident Legal Entity upon disposal of Shares are generally not tax deductible. The Issuer will hold an amount equal to the withholding tax until the end of the one-year holding period and will then either pay it back to the shareholder or to the Belgian Treasury. tax deductible from the income received pursuant to similar transactions. and • capital gains realised by a Belgian Resident Individual or a Belgium resident legal entity upon the transfer of Shares belonging to a substantial shareholding of 25% of more in the Issuer. exchange or other transfer of Shares.5%. 5% or 0% for residents of those countries. However. except possibly at the time of liquidation up to the amount of the fiscal capital represented by those Shares. it will not be taxed.5. However. Non-residents Non-residents are generally not taxable on capital gains realised upon the sale. exchange or other transfer of Shares. is incompatible with the free movement of capital and the freedom of establishment set forth in the EC Treaty. Any losses suffered by private Belgian Resident Individuals upon the disposal of the Shares are generally not tax deductible. exchange or other transfer of Shares. if so.

proposals and distribution of its comments and conclusions. An application will be made for the tradability of the New Shares on the regulated market Eurolist by Euronext Brussels. 4) will be discontinued on 26 October 2007 after the stock exchange closes and will be tradable on Eurolist by Euronext Brussels during the Subscription Period. Within the framework of this contract. (iv) collective investment institutions acting for their own account. and (v) non-residents (provided they submit a certificate certifying their non-residency in Belgium).3. 2. In any event. 2. capped at EUR 500 per transaction and per party. 1º of the Law of 27 October 2006 concerning the supervision on institutions for occupational pensions acting for their own account. exchange or other transfer of Shares.368 Shares issued as part of a private placement on 26 October 2006 on Euronext by Eurolist of Euronext Brussels was filed simultaneously with the application to list the New Shares.e. i. 2. Simultaneous applications for listing An application to allow trading of G&L Shares and of 1.6.6. 2. Petercam provides the following services: financial analysis of the company and its stock exchange achievements. Liquidity contract Pinguin has concluded a liquidity contract with Petercam.6. no tax on stock exchange transactions is due.5. An application has been filed for official listing of all VVPR Strips of the Company on the Eurolist by Euronext Brussels. will generally not be subject to Belgian income tax on capital gains realised upon the sale. intervention in market 61 .4. from 29 October until 12 November 2007.5. The VVPR Strips are expected to be listed on the Eurolist by Euronext Brussels under the international code number BE0005618898 and symbol PINS. if necessary. 2. Listing location The Shares shall be listed on the regulated market Eurolist by Euronext Brussels.3.1.A non-resident company which does not hold Shares through a permanent establishment in Belgium. ADMISSION TO TRADING AND TRADING PROVISIONS Admission to trading The Pre-emptive rights (coupon no.6. supervision of the movements in the market and. no tax is owed on stock exchange transactions by (i) professional intermediaries within the meaning of Articles 2. The Existing Shares will therefore be traded ex coupon from 29 October 2007. 9º and 10º of the Law of 2 August 2002 acting for their own account.17% of the purchase price. Upon the issue of the New Shares (primary market). The New Shares will be listed with ISIN code BE0003765790. currently at 0.2. Tax on stock exchange activities The purchase and sale and any other acquisition or transfer for consideration of the Existing Shares (secondary market) in Belgium through a “professional intermediary” is subject to the tax on stock exchange transactions. 2. (iii) professional retirement institutions referred to in Article 2.6.682. (ii) insurance undertakings within the meaning of Article 2 §1 of the Law of 9 July 1975 acting for their own account.

Stabilisation – Interventions on the market Not applicable.999. as buyer or seller of Pinguin securities. legal and administrative and publication costs.8.000. HOLDERS OF SHARES WHO WISH TO SELL THEM Not applicable. 2. 2.5. 62 . 2. The remuneration for the Joint Lead Managers has been determined at EUR 650. The net proceeds of the Offering and the G&L Shares may therefore be estimated at a maximum of EUR 65 million. EXPENSES RELATED TO THE ISSUE AND/OR TO THE OFFERING If the Offering is subscribed to for the maximum amount.990. the latter in order to realize that under normal circumstances sufficient liquidity can be maintained. costs for printing and translating the Prospectus.6.transactions. The costs related to this Prospectus (and the private placements and the Offering referred to in it) have been estimated at EUR 1 million and include among other things the owed reimbursements to CBFA and Euronext Brussels. the reimbursement of the financial intermediaries. The gross proceeds of the G&L Shares consist of EUR 19.7. the gross proceeds of the Offering (the Issue price multiplied by the number of New Shares) will be a maximum of EUR 46 million.

37% 0.412 29.82% 0.48% 1.45% 0.91% 9.37% 0.234 30.00% 7 These warrants had not yet been exercised at the time this Prospectus was approved.22% 4.70% 0.33% 1.35% 0.92% 1.356 6.228.29% 3.34% 0.09% 9.79% 11.90% 1.49% 0.44% 14.00% Shareholder structure after private placement G& L Shares Shares % based on total number of shares % based on total number of shares (fully diluted) 43.14% 0.38% 0.74% 3.44% 0.00% 50.33% 3.852.44% 0.892.411.152 6.03% 9.028 29.589 653.10% 11.197 55.367 1.412 1.986 261.37% 0.716.51% 100.441 3.48% 1.44% 18.986 261.38% 8.37% 0.9.834 116.176.74% 1. DILUTION Amount and percentage of dilution which immediately results from the private placement of G&L Shares The influence of the private placement of G&L Shares on a shareholder’s participation in the capital after the private placement on 26 October 2006 is shown in the table here below.085 40.60% 100.834 116.462 90.43% 8.197 55.70% 0.38% 0. 63 .555 40.80% 3.234 30.37% 15.15% 0.64% 100.412 29.412 29.32% 1.589 653.028 29.44% 0. Shareholder structure after capital increase of 26/10/2006 Shares % based % based on on total total number number of shares of shares (fully diluted) 51.676.2.228.44% 0.00% STAK Pinguin Guy & Luc Van den Broeke KBC Private Equity Lur Berri Degroof Corporate Finance Primco SILL Employees Volys Star Vijverbos NV Demafin BVBA Kofa BVBA Public TOTAL Warrants private investor TOTAL (fully diluted) 6 3.98% 9.356 7.45% 0.470 740.152 7.462 90.40% 100.29% 99.73% 1.911 43.37% 15.412 29.411.44% 18.367 740.40% 0.412 1.56% 99.83% 0.

00% 0. Participation in the capital in % based on the total number of shares completely diluted 1. 1.176.470 G&L Shares and New Shares provided pre-emptive right is exercised.470 G& L Shares Participation in the capital in % based on total number of shares.176.89% The repercussions of the Offering for an Existing Shareholder who owns 1% of the authorised capital in the Company before the private placement of G&L Shares and who does not exercise his preferential right follow hereafter: The calculation is made based on the same assumptions as the calculation here above.85% Repercussions of the issue of the New Shares on the Existing Shareholders The repercussions of the Offering for an Existing Shareholder who owns 1% of the authorised capital of the Company before the private issue of G&L Shares and who exercises his preferential right follow hereafter: The calculation is carried out based on the number of shares representing the authorised capital for the private placement of the G&L Shares. of 2.176.176.470 G& L Shares After issue of 1.470 G& L Shares After issue of 1.Repercussions of the issue of the G&L Shares on the Existing Shareholders The repercussions of the private placement of G&L Shares on an Existing Shareholder who owns 1% of the authorised capital of the company before issue are shown here below: Before issue of 1. 64 .470 G& L Shares After issue of 1. and a capital increase of EUR 46 million).705.176.882 New Shares (based on a price per Share of EUR 17.176. 1.176.176. the dilution as a result of the issue of the G&L shares shall be less for the Existing Shareholder who exercises his preferential right.00% 0. fully diluted.176.470 G& L Shares After issue of 1.85% 0.85% 0. Before issue of 1. fully diluted.63% Before issue of 1.470 G&L Shares and New Share without exercising preferential right. Considering that the G&L Shares have not yet been created.470 G&L Shares and hypothetically.00% 0.470 G& L Shares After issue of 1. a private placement of 1. Participation in the capital in % based on total number of shares.00.

000 product specifications that run the gamut from fresh frozen basic vegetables in all possible forms to culinary. Following its pioneering stage. That operation created a new dynamic within Pinguin and led to a sensible increase in the level of investment in new infrastructure in the years that followed. In 2003 the French joint venture was renamed Pinguin Aquitaine. 65 . GENERAL INFORMATION ABOUT THE COMPANY AND ITS SHARE CAPITAL 3. the company added vegetable purees. as complementary products and components for new dishes and preparations with greater added value. In early 2000. so therefore Pinguin reduced its investment in Bio de Bergerac to 6%. Pinguin also shifted its emphasis from volume production to greater quality and profitability. Pinguin was founded in 1968 in Westrozebeke. vegetable preparations (“Convenience Cuisine”). After the original expansion phase. This gave Pinguin NV a controlling interest of 52%.3. and sauces in mini-tablet form to its “Convenience Cuisine” line. The vegetable group has more than 2. The next step in further internationalization came when Albert Fisher Ltd was declared bankrupt in May of 2002. After that the southern France agricultural cooperative Lur Berri began to invest and Pinguin took over Fisher’s interest. easy to use. more and more was invested in quality assurance. In 2005 Euragra was liquidated and production equipment transferred to Westrozebeke. automation and modernization followed. To differentiate Pinguin clearly from its competitors. A production oriented policy was transformed into one of customer orientation. Pinguin acquired VDI in order to create a platform for an expansion in “chilled fresh” vegetables as an addition to the line of “fresh frozen” vegetables. Rather than expanding its own production capacity. customer care. the company went through a difficult period in which a number of locations were closed or scaled down. The supply of organic vegetables was in general insufficiently stable to achieve profitability. in a joint venture with the British company Fisher Frozen Foods and the French company Agralco. the Pinguin NV’s management decided in 1999 as first player in the sector to go to the Brussels stock market to raise capital for opportunities in the sector in Belgium. in southern France (Ychoux). and service. With the takeover of Euragra in Brittany (St. Because of VDI’s limited size. The deep freeze process is the chief underlying production technology. a niche player in organic vegetables that had a production location in south-west France. no benefits of scale could be created in order to reach profitability. Its production unit in Kings Lynn (United Kingdom) became the registered office of Pinguin Foods UK. Devy) in June 2002. and Pinguin took over the assets of the Fisher Frozen Foods unit. A decade of optimization. the company caught a new wave of vigor in 1990 when the new generation of the Dejonghe family took over its management and fundamentally changed its strategy. It first began production outside the Belgian home territory in 1996. soups. the Pinguin Group made a strategic decision to take over Bio de Bergerac. In order to respond to new takeover opportunities. Therefore.1. the decision was made in December 2005 to end these activities in chilled fresh vegetables. HISTORY AND KEY PINGUIN’S ACTIVITIES EVENTS IN THE DEVELOPMENT OF Pinguin is foremost a specialist in vegetables that has made its goal to provide a range of high-quality vegetable solutions to various types of customers.

2 million with some two hundred employees. In 2007 it was decided once again to expand capacity in the United Kingdom in order to gain sufficient critical and profitable ground more quickly.2. Belgium. Telephone: 057/48. it was decided to expand its capacity and to process peas and beans in addition to corn and carrots. Padley Vegetables realized sales on the English market of approximately EUR 31.. The Board of Directors is authorized to move the registered office to any other place in Belgium. 3.3. New measures were required. As a result.2.2. Pinguin took a great step forward with this acquisition that expanded its line with frozen potato products. Founding. Pinguin reached agreement on 17 August 2007 to take over certain activities of Christian Salvesen Foods. These measures resulted in Pinguin Foods UK once again making a positive contribution to group profits starting in the 2006-2007 financial year. The bylaws have been amended on numerous occasions and most recently by the Extraordinary General Shareholder’s Meeting 4 October 2007. R&D and its extensive commercial network further strengthened the Pinguin organization. subsidiaries. 3. on 1 June 2007 Pinguin decided to take over certain activities and assets of Padley Vegetables.1.The takeover of Pinguin Foods UK did not make the anticipated positive contribution. by resolution of the Board of Directors. Registered office The Corporation’s registered office is in Romenstraat 3.2. managing offices. 66 . Pinguin then reached agreement on 26 June 2007 with the Van den Broeke Family for the purchase of all shares in the Lutosa Group. This transaction was completed on 28 September 2007. a segment of Christian Salvesen plc. To improve the profitability of Pinguin Aquitaine. 3. production. technology. The Company may. A representation office was also opened in Shangai in order to further map out the Chinese and Asian markets. Lutosa’s competence in agronomy. set up branch offices.7 million. 3. employees.72. as a result of which Pinguin UK was completely restructured in 2006 so that all logistics management was taken in house. GENERAL INFORMATION Corporate name The Corporation is named Pinguin.2. The takeover was finalized on 10 September 2007. comprising storage facilities. machinery. and even produced heavy losses. amending the bylaws and term The Corporation was founded on 16 May 1968 in accordance with a deed published in the Annexes of the Belgian Official Gazette of 30 May 1968 under number 1303-14. stock and contracts for a total price of EUR 26.22. In the last financial year closed. The Corporation was founded for an indefinite term. 8840 Westrozebeke (Staden). and agencies at any place in Belgium and abroad. The transfer of the registered office will be made public by the Board of Directors in the Annexes of the Belgian Official Gazette.

6.2. the purchase.2. manufacture. Corporate purpose Article 3 of the bylaws reads as follows: “The Company has as its purpose.777. The purchase. subscription.4. and treatment for storage of these goods and products. furthermore. It was decided at the Extraordinary General Shareholder’s Meeting of 4 October 2007 that the current financial year 2007 will run from 1 July 2007 through 31 December 2007 and that subsequent financial years will run from 1 January through 31 December. Register of Legal Entities Pinguin is registered in the Register of Legal Entities under number BE-0402. including subcontracting in general and the exploitation of all intellectual rights and industrial or commercial possessions related thereunto. The Company may acquire. undertake everything that directly or indirectly can contribute to the realization of its purposes in the broadest sense. the corporate purpose of which is identical. a public company with limited liability under the laws of Belgium. financial mediation. Financial Year The financial year for 2006-2007 now closed runs from 1 July 2006 through 30 June 2007. wholesale and retail. merger. 3. household products including the freezing. as well as the renting of deep freezers to third parties. sale. transfer or trade in all moveable or real property. in Belgium and abroad. or in some other manner.3.157 3. This list is exemplary and non limitative. participation. Legal Form Pinguin is an NV.7. wholesale and retail and manufacture of any type of food product. whether through contribution in cash or kind. It may take a participation in all present or future corporations or companies in Belgium and abroad.5. similar. and in general conduct all commercial industrial or financial transactions related directly or indirectly to its purpose. sale. import and export of all seeds and the performance of agricultural work for third parties. or related to its own or is of such a nature as to promote its own goal. The Company can. equipment and required materials.2.” 67 . It has the capacity of a corporation that makes a public request for savings.2. 3. canning. even if these are neither directly nor indirectly related to its purpose. The Company may exercise the management and supervision and control of all related companies with which there exists some association through investment. and may make loans of any form and term to the latter. It may acquire any moveable property as investments. lease or let for lease.

revaluation reserves and transferred profits. such as shares in the framework of a share option plan. in the framework of the authorized share capital.4. This capital increase can be made in accordance with terms and conditions set by the Board of Directors. Authorized share capital Pursuant to article 7 of the Company’s bylaws.95. 3.935. as decided by the Extraordinary General Shareholder’s Meeting. as well as through the conversion of reserves.3. A unanimous vote of all directors is required for a capital increase through in kind contribution. issue premiums. The Board of Directors can do this 68 . The Board of Directors is authorized. THE COMPANY’S CAPITAL Authorized capital Following the private placement of 26 October 2006. the Company’s issued authorized capital amounts to EUR 48. The Board of Directors’ authorization can be renewed in accordance with the provisions of law. such as. under the suspensive condition of the determination of the realisation of the capital increase.4.085 fully paid-in shares of no par value.676. 3. with or without the issue of new shares with or without voting rights or through the issue of warrants or of debt securities to which warrants or other securities are attached. this issue premium must be booked to a blocked reserve account that can be reduced or removed from the books only by resolution of the General Meeting taken in a manner required for the amendment of the bylaws. provided that the provisions in article 595 et seq.4. the Board of Directors has the authority to request an issue premium.2. the Board of Directors can increase the issued capital one or more times to an amount no greater than EUR 60 million. each representing an equal share of the capital. for example. to restrict or end the preferential rights accorded Shareholders by law in the interest of the Company. When increasing issued authorized capital within the limits of authorized share capital.855. If the Board of Directors so decides.1. or other securities. through contributions in cash or in kind within legal limits. for a period of 5 years from the date of publication of the deed containing the amendment of the bylaws of 4 October 2007. of the Company Code are observed.3. It is represented by 6. GROUP STRUCTURE Figure 1: The Pinguin Group (after acquisition of the Lutosa Group) Source: Pinguin 3.

also in favour of one or more private persons, even if they are not employees of the Company or its subsidiaries. In the absence of the General Meeting’s express authorization of the Board of Directors, from the date of the CBFA’s notification to the Corporation of a public takeover bid for the shares of the Company, the authority of the Board of Directors to increase issued capital by cash contribution with specific cancellation or restriction of the preferential rights of Existing Shareholders or contributions in kind is suspended. This authority takes effect once again immediately upon the conclusion of such a takeover bid. The Extraordinary General Shareholder’s Meeting of 4 October 2007 did, however, expressly grant the Board of Directors the authority to increase issued capital in one or more exercises from the date of the CBFA’s notification to the Company of a public takeover bid for the shares of the Company, and the authority to increase issued capital by cash contribution with specific cancellation or restriction of the preferential rights of Existing Shareholders or contributions in kind, in accordance with article 607, 2°, of the Company Code. This authority was granted for a period of three years from the date of the publication of the determination of the realisation of the capital increase, as decided by the Extraordinary General Shareholder’s Meeting of 4 October 2007, and can be renewed. The Board of Directors is authorized, with the power of substitution, to amend the Company’s bylaws to bring them into agreement with the capital increase decided within the framework of its authority. In the convocation for the Extraordinary General Shareholders’ Meeting of 9 November 2007, which was published on 16 October 2007 in accordance with Article 533 of the Company Code, the General Meeting is asked to clarify the provisions in the bylaws related to the permitted capital, and to confirm that the Board of Directors is also authorised to incorporate issue premiums into the capital in the event of a capital increase related to the authorised capital. 3.4.3. Adjustments to capital

Since going public in 1999, Pinguin has adjusted the Company’s authorized capital as depicted below : Date Amount of the operation
(in EUR x 1,000)

Issued capital
(in EUR x 1,000)

Nature of the operation

Number of Number of shares outstanding created shares 619,734 2,123,596

17/6/1999

16,113

20,435

17/6/1999

122

20,557

6/6/2002

1,560

22,117

8/10/2004

14,999

37,117

25/11/2005

-8,213

28,904

25/11/2005

4,999

33,904

10/05/2006

2,150

36,054

10/05/2006

381

36,435

Capital increase in cash in the framework of a public offer (IPO) Capital increase in cash in the framework of of the Employee tranche Capital increase through private placement underwritten by Lur Berri and SILL Capital increase in cash in the framework of a secondary public offer (SPO) Capital decrease through settlement of losses incurred Capital increase through private placement underwritten by STAK Pinguin Capital increase through private placement underwritten by Lur Berri and Primco Capital increase

5,880

2,129,476

109,184

2,238,660

1,764,705

4,003,365

0

4,003,365

692,520

4,695,885

297,832

4,993,717

0

4,993,717

69

26/10/2006

12,499

48,935

through incorporation of issue premium Capital increase through private placement underwritten by STAK Pinguin, KBC Private Equity and Lur Berri

1,682,368

6,676,085

3.4.4.

Shareholders

The following table depicts a summary of Shareholders:

SHAREHOLDING AFTER CAPITAL INCREASE OF 26/10/2006
Shares % based on total shares 51.10% 11.09% 9.80% 3.92% 1.74% 1.35% 0.83% 0.45% 0.44% 0.44% 0.44% 18.40% 100.00% % based on total shares (fully diluted) 50.79% 11.03% 9.74% 3.90% 1.73% 1.34% 0.82% 0.45% 0.44% 0.44% 0.44% 18.29% 99.40% 0.60% 100.00%

SHAREHOLDING AFTER PRIVATE PLACEMENT OF G&L SHARES
Shares % based on total shares 43.44% 14.98% 9.43% 8.33% 3.33% 1.48% 1.15% 0.70% 0.38% 0.37% 0.37% 0.37% 15.64% 100.00% % based on total shares (fully diluted) 43.22% 14.91% 9.38% 8.29% 3.32% 1.48% 1.14% 0.70% 0.38% 0.37% 0.37% 0.37% 15.56% 99.49% 0.51% 100.00%

STAK Pinguin Guy & Luc Van den Broeke KBC Private Equity Lur Berri Degroof Corporate Finance Primco SILL Employees Volys Star Vijverbos NV Demafin BVBA Kofa BVBA Public TOTAL Warrants private investor TOTAL (fully diluted)
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3,411,367 740,589 653,986 261,834 116,462 90,197 55,234 30,028 29,412 29,412 29,412 1,228,152 6,676,085 40,356 6,716,441

3,411,367 1,176,470 740,589 653,986 261,834 116,462 90,197 55,234 30,028 29,412 29,412 29,412 1,228,152 7,852,555 40,356 7,892,911

STAK is the Dutch Stichting in which the Hein and Veerle Deprez families, Tosalu (controlled by the Luc Desimpel family), and the Dejonghe family have placed their interests in Pinguin NV. Guy and Luc Van den Broeke are the selling Shareholders of the Lutosa Group who will be reinvesting a portion of the proceeds of the sale in Pinguin. KBC Private Equity NV is an investment fund that holds a direct interest in Pinguin NV. Mr. Jo Breech represents KBC Private Equity (in the Board of Directors) in his own name. Lur Berri is a French agricultural cooperative in the French Pyrennes and chief supplier of sweet corn to Pinguin Aquitaine. Lur Berri is also one of the two joint Shareholders in Pinguin Aquitaine SAS with Primco.

7

These warrants were not yet exercised at the time this Prospectus was approved.

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Degroof Corporate Finance is an investment fund that keeps a direct interest in Pinguin since the listing of Pinguin on the Brussels stock exchange in 1999. Degroof Corporate Finance does not have a director’s mandate in Pinguin NV. Primco, is a French agricultural cooperative in the south-west of France. Primco is the chief supplier of carrots to Pinguin Aquitaine SAS. In addition to a direct interest in Pinguin NV, Primco is also one of the two joint Shareholders in Pinguin Aquitaine SAS, with Lur Berri. Sill was Pinguin’s French partner that financed the takeover of the French Euragra through an investment in D’lis. Volys Star NV is the partner that founded, with Pinguin NV, the company D’lis. D’lis NV was involved in the commercialization of the preparation of ready-to-eat frozen meals. D’Lis was divided into Pinguin Ieper and Pinguin R&D, after which the assets of Pinguin R&D were sold to Pinguin. Ultimately, D’Lis was liquidated on 24 June 2005. The D’lis brand name was sold. Vijverbos NV is a management company with Mr Herwig Dejonghe as its permanent representative. Vijverbos NV holds both direct and indirect interest in Pinguin through its shareholding in the Stichting. Demafin is the management company with Mr Jan Dejonghe as its permanent representative, and was the previous CFO of Pinguin. The contract with Demafin was terminated in May 2006. Kofa NV is a management company with Mr Koen Dejonghe as its permanent representative. Kofa NV holds both direct and indirect interest in Pinguin through its shareholding in the Foundation. 3.4.5. Identification of the holding company that acquired control de jure of Pinguin NV

Food Invest International NV is a public limited liability corporation under the laws of Belgium. It has its registered office at 2860 Sint-Katelijne-Waver, Drevendaal 1, registered in the register of legal entities of the Crossroads Bank for Enterprises under company number 0446.729.738, previously registered in the Mechelen Commercial Register under number 80.184, and with VAT number BE0446.729.738. It was founded by notaries deed before Civil Law Notary Paul Lammens, with office at Melsele, on 27 February 1992, of which the memorandum of incorporation was published in the Annexes of the Government Gazette of 19 March 1992 under number 92.03.19-179. Food Invest International NV’s corporate purpose is: Either for its own account or the account of others or through investment of any type in Belgium or abroad: 1. Provide services and recommendations in the broadest sense of the word to the liberal professions, companies and businesses of any nature, including in the areas of administration, management, organization, promotion, and information; 2. Hold the position of director, manager, or authorized representative in companies and corporations; 3. Take and manage interests and investments in companies and corporations; 4. The acquisition, alienation, and management of investments of all sorts, both moveables and real; 5. The import, export, processing, and trade of all consumer goods, semi finished and raw materials; The Company can, furthermore, undertake everything that directly or indirectly can contribute to the realization of its corporate purpose in the broadest sense. It may invest directly or indirectly in all present or future corporations or companies in Belgium and abroad which have an equivalent corporate purpose or an intrinsic relationship with its own. The Company is managed by a board of directors comprising the following physical or legal persons: (a) Mr. Hein Deprez, delegated director; (b) Mrs. Veerle Deprez, director; and, (c) Marc Ooms BVBA, a corporation under the law of Belgium with its registered office in the Gent Court District at 9000 Gent, Hofbouwlaan 3, registered in the register of legal entities of the Crossroad Bank of Enterprises under number 0478.085.581, previously registered in the Brussels Commercial

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Register under number 121.783, and with VAT number BE-0478.085.581, represented by Mr. Marc Ooms in his capacity as its permanent representative pursuant to article 61, § 1, of the Company Code. Since the transactions of 30 August 2007 the shares are held directly by the family of Hein Deprez and the family of Veerle Deprez, as follows: (a) Management Deprez BVBA: 47 of the total of 763 shares, being 6.16% of the share capital; (b) Deprez Invest NV: 1 of the total of 763 shares, being 0.13% of the share capital; and (c) Extremax NV: 715 of the total of 763 shares, being 93.71% of the share capital. Management Deprez BVBA is controlled exclusively by the Veerle Deprez family. Deprez Invest NV and Extremax NV are controlled exclusively by the Hein Deprez family. This means that the Hein Deprez family has, indirectly, sole control of Food Invest International NV. 3.4.6. Voting rights of key Shareholders

All Shareholders have the same voting rights. Each Share has 1 vote. 3.4.7. Shareholder agreements

A number of agreements have been concluded between the controlling Shareholders and other Shareholders and holders of bonds: Volys Star/SILL Shares held by Volys Star NV and SILL SA are subject to the following restrictions on transfer: Pre-emptive right in favour of Pinguin Invest NV through 31 December 2013; Volys Star NV and SILL SA have through 31 December 2013 a tag-along right if the controlling Shareholders (=STAK Pinguin & the Dejonghe family) offer all or the majority of their shares to a third party; Volys Star NV is the partner that founded D’lis with Pinguin NV. D’lis NV was active in the assembly of ready-to-eat meals. Pinguin no longer holds any shares in D’lis NV; Sill was Pinguin’s French partner that co-financed the takeover of the French Euragra through an investment in D’lis. Lur Berri Lur Berri is a French Agricultural Cooperative. The shares held by Lur Berri are subject to the following restrictions on transfer: Pre-emptive right in favour of Pinguin Invest NV through 31 December 2013; Lur Berri has through 31 December 2013 a tag-along right if the controlling Shareholders (=STAK Pinguin & the Dejonghe family) offer all or the majority of their shares to a third party; An anti-dilution clause is included in the shareholder agreement with Lur Berri. To the degree that if Lur Berri will not be able to exercise its Preferential Right to maintain its investment at its present level, there is provided: o a re-determination of the Shareholders, or in absence of which; o a transfer of the Preferential Rights to Lur Berri by the controlling Shareholders or an additional issue in favour of Lur Berri. KBC PE The shares held by KBC Private Equity are subject to the following restrictions on transfer: Pre-emptive right in favour of STAK; KBC Private Equity has a tag-along right if the controlling Shareholders offer 15% or more of their shares to third parties; The STAK has a tag-along right if KBC Private Equity offers its shares to an industrial partner; The agreement was valid initially for 5 years from 17 September 2003 and will be tacitly renewed for 5 years. In addition to a pre-emptive right and a right of resale, the following agreements were also concluded regarding Pinguin’s board:

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(a) Composition of the Board of Directors: four directors will be appointed from a list of candidates proposed by the STAK, two directors will be appointed from a list of candidates proposed by Pinguin NV’s institutional Shareholders, one director will be appointed from a list of candidates proposed by Fortis Private Equity Expansion Belgium NV, as long as Fortis Private Equity Expansion Belgium NV holds bonds or warrants for at least 5% of the shares of Pinguin NV (on a fully diluted basis), and one director will be appointed from a list of candidates proposed by KBC PE, as long as KBC PE NV holds 5% of the shares of Pinguin NV (on a fully diluted basis ), and three independent directors; (b) The Chairman of the Board of Directors will be elected from among the independent directors; (c) The Board of Directors will appoint an Audit Committee and a Nominations and Compensation Committee. The Nominations and Compensation Committee will include only independent directors. 3.4.8. Shares held by company in its own capital

Article 12 of the bylaws provides for this as follows: “The General Meeting can resolve that the Company acquire shares in its own capital or can so acquire or hold these in accordance with article 620 of the Company Code. The Board of Directors is authorized, in accordance with the provisions of the Company Code, to acquire shares for the Company’s account when such acquisition is necessary to prevent the Corporation from suffering a serious and threatening loss. This authorization is granted for a period of three years from the date of publication of the resolution of the Extraordinary General Shareholder’s Meeting of 14 November 2005 in the Annexes to the Belgian Official Gazette. This authorization can be extended for periods of three years. The General Meeting of 14 November 2005 also granted the Board of Directors the authority in accordance with article 620 of the Company Code to acquire the maximum number of shares permitted by this Code, by purchase or exchange for a price equal to the price at which these shares are quoted on an exchange in the European Union at the moment of such purchase or exchange. This authorization is valid for a period of eighteen months from the date of this General Meeting and can be extended in accordance with article 620 of the Company Code. The Board of Directors can alienate shares of the Company that are included in the official listing of a regulated market located within a Member State of the European Union without the prior permission of the General Meeting. The Board of Directors is authorized to convert shares.” 3.4.9. Employee share option plans

There are no employee share option plans at this time. 3.4.10. Bonds with warrants

On 30 December 2002, 441,893 bonds with warrants were created in connection with the issue of a subordinated debenture loan in the amount of EUR 5,475,054.27, with a term of 6 years. At the time of the Prospectus, outstanding debt was EUR 2,419,000. Each warrant includes the subscription right to one new share. The following subscribers to the subordinated debenture loan received the following warrants in proportion to their share in the loan: ISEP NV: Gilbert Pieters: Herwig Dejonghe: Vijverbos NV: Jan Dejonghe: Demafin BVBA: 363, 197 bonds / 363,197 warrants 40,356 bonds / 40,356 warrants 6,054 bonds / 6,054 warrants 14,125 bonds / 14,125 warrants 10,089 bonds / 10,089 warrants 8,072 bonds / 8,072 warrants

The loan has a term of 6 years. The Company will repay the principal of the subordinated debenture loan above par at 120% on the following due dates: - on the fourth anniversary of the date of subscription: per bond one third of principal, increased by an amount equal to 20% of the loan principal,

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089 warrants that he held to the civil partnership Dejonghe-Provoost.054 warrants held by the Burgerlijke Maatschap Dejonghe-Dejonckheere. which is the average price of the Company’s shares during the thirty days prior to their date of issue.000 certificates of shares in Pinguin NV issued by the Stichting Administratiekantoor Pinguin. increased by an amount equal to 20% of the loan principal. On 28 October 2004 Pinguin Invest purchased 363. the option to purchase 232. The Dejonghe cousins in turn sold an option to purchase to Fortis Private Equity Expansion NV to purchase 232. This option was issued privately on shares in their possession.000 certificates for shares in Pinguin NV that was issued by Pinguin Invest NV. increased by an amount equal to 20% of the loan principal.000 existing shares of Pinguin NV was replaced on 30 September 2005 by an option to purchase 232.054 warrants that he held to the civil partnership Dejonghe-Dejonckheere. on any working day during the period of 15 days from the date of the General Meeting and (ii) or. The 363. The warrants can be separated at any time from the bonds and are freely marketable.39.000 shares in Pinguin NV for which Fortis Private Equity Expansion NV held the option to purchase.on the sixth anniversary of the date of subscription: per bond one third of principal.054 subordinated bonds and the 6. On 30 September 2005 the 232.089 subordinated bonds and the 10. The warrants may also be exercised (i) on the date of the company’s merger. . were converted into certficates in exchange for which the cousins Dejonghe received 232. the 6. The warrants can be exercised in whole or in part only twice each year: (i) either.356 warrants held by a private investor. On 17 May 2005 Jan Dejonghe contributed both the 10. dated 28 October 2004. This option was issued privately on certificates of shares in Pinguin NV in their possession.on the fifth anniversary of the date of subscription: per bond one third of principal.089 warrants held by the Burgerlijke Maatschap Dejonghe-Provoost and the 8. This option to purchase has an exercise price of EUR 10 per share and a term of 5 years that expires on 28 October 2009. A fixed rate of interest of 8% per annum will be paid on the balance of the debenture loan not yet repaid. There remain only the 40.. The Company has no knowledge with respect to the possible exercising of these warrants. the 10. These warrants have not yet been exercised. On 18 August 2005 Herwig Dejonghe contributed both the 6.000 existing shares in Pinguin NV. Their exercise price is EUR 12. The warrants can be exercised for a period of 5 years. 74 . The warrants expire on the fifth anniversary of their date of issue. As a result of this conversion to certificates. division or public offer for sale. This option has an exercise price of EUR 10 per certificate for shares in Pinguin NV and a term that expires on 28 October 2009. the 14. Herwig Dejonghe and Koen Dejonghe in favour of Fortis Private Equity Expansion NV. and (ii) on any working day during a period of 15 days prior to the fifth anniversary of their date of issue.125 warrants held by Vijverbos NV. namely 30 December 2007.197 warrants held by Pinguin Invest NV.072 warrants held by Demafin BVBA were voided on 30 September 2005.197 warrants back from FPE (Fortis Private Equity Expansion NV) (previously ISEP) in the framework of an agreement to accelerated repayment of the subordinated debenture loan. on any working day during the period of 15 days from the disclosure of the semi-annual results.

238.21 18. The Share closed at EUR 16.52 6.4.90 6.000 20 15 100.695.65 7.809 2006 7.885 35.000 120.676.2 6.564 8 Period from January 2007 to 12 October 2007 75 .57 4.000 80.000 40.90 9.47 6. The share’s offering price on 24 June 1999 was EUR 26.365 36.000 180.40 7.660 24. (mln EUR) Average daily volume Source: Bloomberg 2003 10.000 140.10 4.000 5 0 1999 0 2000 2001 2002 2003 2004 2005 2006 2007 Source: Bloomberg EUR Close 31/12 Low High Number of shares Market cap.3 2.000 10 60.7 1217 20078 16.76 11.000 20.3.79 13.0 879 2005 7.085 48. Just like the price per Share.676.000 25 160.65 on 12 October 2007.70 9.0 126 2004 8. Prijs (EUR) 30 Volume 200. Share Price History The graph below depicts the Pinguin Share’s price history and volume traded since its initial public offering.003.96 2.11. the trading volume increased greatly last year.30 6.99 6.085 111.

the Company will be duly represented in all capacities. Its decisions in principle are passed by a simple majority of votes cast. the interests of the thirdparty shareholder. along with the valuable characteristics of a properly transparent management. In the convocation for the Extraordinary General Shareholders’ Meeting of 9 November. are safeguarded. The Board of Directors has drawn up a “Corporate Governance 76 . for whatever reason. In addition. the directors whose term expired. there are at least two independent directors to provide balance. which are characterized by a flexible and rapid decision process. however. The General Meeting ratifies directors’ remuneration. and to do so beyond mere compliance with legal and regulatory requirements. As long as the General Meeting does not provide for a vacancy. but can be renewed. the general meeting is invited to amend the provisions in the bylaws related to the representation of the Company.1. CORPORATE GOVERNANCE 4. The executive directors must provide the independent directors regularly with information on the Company’s state of affairs so that all directors have sufficient knowledge to be able to perform their duties.4. The directors may not hold any position in other corporations that have a conflict of interest with the Pinguin group. sales figures. A director’s term ends at the close of the annual meeting until which he was appointed. The Board of Directors determines the group’s strategy and provides for daily management through its members who are also part of the management team. by two directors acting jointly. If the general meeting approves the proposed amendment to the bylaws. regular reports are provided on market changes and the situation among the various subsidiaries. provided an internal rule that requires a special majority for specific transactions or decisions. BOARD OF DIRECTORS General provisions concerning the Board of Directors The bylaws provide for a board of directors of up to 10 members. The Company is represented within and outside the law by one delegated director.1. The directors’ annual remuneration is adopted by the Board of Directors at the recommendation of the Compensation Committee. including at law.2. who provides daily management. one of whom is an independent director. Their term of office runs up to 6 years. The Board of Directors has.1. The Corporation’s corporate governance charter complies with the rules of the Belgian Corporate Governance Code. the public in particular. No changes have been made since the last General Meeting of Shareholders on 9 November 2006. Composition of the Board of Directors The Board of Directors has 9 members. The daily management provides the members of the Board of Directors each month with statistical summaries.1. who acts jointly with an independent director. In this way. Directors may be reappointed at the end of their term. The Compensation Committee is created by the Board of Directors. Members are appointed by the ordinary General Meeting. This gives scope to the advantages of the still strong family nature of the Pinguin group. There is no age limit for directors’ terms in office within Pinguin. 4. The Board of Directors undertakes to adhere to high standards of proper management (corporate governance). The Board of Directors meets at least six times each year. The Board also provides for the appointment and compensation of managing directors (delegated directors). Outside counsel at the Company’s requires the prior approval of the Board. Directors can be dismissed at any time by the General Meeting. and interim financial reports. shall remain in their position. 4. published on 16 October 2007 in compliance with Article 533 of the Companies Code. In addition to the chairman and the delegated director.

independent director Luc Van Nevel was appointed director by resolution of the annual General Meeting of 14 May 2004 to replace Mr. In 1986 he became sales director and from 1992 delegated director and director general (CEO). with the Samsonite Corporation. Luc Van Nevel graduated in 1970 with a Master’s degree in Economics at the RUG and in 1984 received a diploma in Strategic Marketing from Northwestern University in Chicago. Rogiest. Jensen Group and Orbid. then assuming the top position in Denver. IL. Within the European division. 77 . where he worked for nearly 20 years within Samsonite Europe in Oudenaarde. for more than seven years. The Board of Directors of 1 July 2004 adopted a motion for the dismissal of Luc Van Nevel as director and as Chairman of the Board of Directors and provided for his replacement through cooption by appointing as independent director The Marble BVBA. Luc Van Nevel is member of the Boards of Directors of various corporations. board management and corporate governance. Within Samsonite Corporation he held the position of President International and Chairman & CEO until his retirement. Luc Van Nevel is especially qualified in the areas of general management. from the UFSIA and began his career with Pinguin in 1982 as marketing director. Vice President. In 1990 Luc Van Nevel was selected as Manager of the Year by Trends Magazine. the Flemish employers association. he was successively Assistant and European Controller. permanent representative Non-executive. represented by Luc Van Nevel. The Board of Directors appointed him Chairman of the Board of Directors on that same date. such as Vanobake NV (as permanent representative of The Marble BVBA). An updated version of this corporate governance charter was published on the website on 7 September 2007. The mandate as director expires during the 2007 Annual General Meeting. He is member of the national board and until June 2007 was Chairman of UNIZO International. and by decision of the following Board of Directors the appointment of The Marble BVBA as Chairman of the Board of Directors was ratified. Herwig Dejonghe is also a consular commercial judge with the Commercial Court in Kortrijk. having been appointed in May 2000 as delegated director. It may be expected that the composition of the Board of Directors will be changed then. Luc Van Nevel began his career with Touche Ross & Co and transferred in 1975 to Samsonite. permanent representative. Vijverbos NV. Herwig Dejonghe earned a degree as commercial engineer. delegated director. Picanol. The convocation of the Annual General Meeting will be published on 16 October 2007. Vijverbos NV is Director General (CEO) of Pinguin. and President & Managing Director. The term of his mandate is three years. The terms of office of the Corporation’s Board of Directors expire immediately after the General Meeting of 9 November 2007. The Term of his mandate is three years. The current Board of Directors includes: The Marble BVBA. Herwig Dejonghe has been active since 1999 with UNIZO. Handelsingenieur. the Union of Independent Entrepreneurs. represented by Herwig Dejonghe (age 48 years). representative of the majority Shareholders Herwig Dejonghe serves in his capacity as permanent representative of Vijverbos NV. financial and marketing management. He was Vice Chairman of the Vlaams Economisch Verbond. permanent representative Executive. represented by Luc Van Nevel (age 60 years). in accordance with Article 533 Belgian Company Code. The succeeding annual General Meeting ratified the appointment of The Marble BVBA as independent director until the annual General Meeting of 2007. Elia. mergers and acquisitions.Charter” that has been available for review on the website since 14 November 2005. Chairman.

director. Koen Dejonghe is head of Pinguin Belgium. In early 2004 he exchanged the position of CTO for that of operations manager of Pinguin Belgium. permanent representative Non-executive. Patrick Moermans earned his degree in Applied Economics from the KUL and received a Master’s Degree from the London School of Economics and Political Sciences. He then transferred to Gevaert. The term of his mandate is two years. from the Roeselare Educational Institution and began his career with Pinguin in 1990 as production manager of the Westrozebeke location. He has worked as senior investment manager for KBC PE (previously Gevaert) since 2001. Patrick Moermans (age 43 years). Frank Claeys. together with her brother Hein Deprez. After the merger of Gevaert and KBC Investco. Fortis Private Equity Belgium NV.Management Deprez BVBA. represented by Koen Dejonghe (age 38 years). laid the foundations for what would later become the Univeg group in 1987. The term of his mandate is three years. The term of his mandate is three years. He is now director with Degroof Corporate Finance. The mandate as director expires during the 2007 Annual General Meeting. The mandate as director expires during the 2007 Annual General Meeting. Egemin and Boma. as its permanent representative. The mandate as director expires during the 2007 Annual General Meeting. Jan Bergers replaced Frank 78 . In 1992 he was appointed delegated director and technical director of the Group. independent director Patrick Moermans has been a director of Pinguin since 1999 and was reappointed at the General Meeting of 14 May 2004 for a three-year term as director. director Non-executive. among others. Jo Breesch (age 35 years). permanent representative Non-executive director The company NV Fortis Private Equity Belgium was appointed as director on 30 December 2002 and designated its director. Bedrijfsbeheer. representative of the majority Shareholders Koen Dejonghe represents Kofa BVBA. director. represented by Veerle Deprez (age 47 years). which was given a mandate and of which he is business manager and permanent representative. Jo Breesch is a Civil Chemical Engineer (KUL 1995) and also has training in Business Management (UCL 1996). Veerle Deprez is also on various boards of harbour-related companies. director. Koen Dejonghe received his degree in business management. the investment company. representative of the majority Shareholders Veerle Deprez launched her career at Alcatel Bell in 1980 and. Since then she has been active in Univeg and is on the Boards of Directors of various companies in Univeg. Kofa BVBA. The term of his mandate is two years. he began work with KBC Private Equity NV. The mandate as director expires during the 2007 Annual General Meeting. permanent representative Executive. In 2005 Management Deprez BVBA was appointed as director of Pinguin N. director Non-executive director Jo Breesch began his career with KBC Bank. represented by Jan Bergers (age 52 years). In that same capacity he is a director of.V. He is senior investment manager there and in this capacity represents KBC PE in Pinguin’s Board of Directors. Mr.

Mr Guy Van Den Broeke. (v) three independent directors will be appointed in accordance with article 524 of the Company Code. De Kaasbrik. Mr. including Picanol.Claeys on 23 January 2006 and since then has represented Fortis Private Equity Belgium NV as director. (iv) one director will be appointed from a list of candidates proposed by KBC Private Equity NV on the condition that KBC represents at least 5% of authorized capital (fully diluted).Mr Jo Breesch. He was appointed as a director by the annual General Meeting of 14 November 2005 until the annual General Meeting of 2007. He is member of the Board of Directors of various corporations. the general meeting is invited to appoint the following candidates as directors. Antilope and Conticlima. residing at Leonard Vandorpestraat 15. (a) list of candidates for the position of non-independent director: . The term of his mandate it three years. having its registered office at Vijverbosstraat 8. having its registered office at Ommegang Oost 6. to the extent that Fortis holds shares or other securities. residing at Vijverbosstraat 8 8840 Staden (Westrozebeke).T. and end immediately after the AGM of 2011. residing at Consciencelaan 13.BVBA Management Deprez. Spadel. residing at Terlinckstraat 14. His current term of office runs until the end of the normal General Meeting of 2007. Toxi Test. Sint-Katelijne-Waver. . WDP. Westrozebeke.S. .O. whose mandate will commence immediately after the AGM of 9 November 2007. on the condition that Lur Berri represents at least 5% of authorized capital (fully diluted). GIMV. BVBA. Liefmans Breweries.de BVBA Kofa. residing at Ommegang Oost 6. having its registered office at Drevendaal 1. . Olivier Gemin (age 49 years). which was published on 16 October 2007 in compliance with Article 533 of the Company Code. Vanerum. M. or warrants that represent at least 5% of authorized capital (fully diluted). director Non-executive director Olivier Gemin is director general of the agricultural cooperative Lur Berri in southern France. (i) 79 .S. The General Meeting of Shareholders will appoint the directors in accordance with the following distribution: four directors will be appointed from a list of candidates proposed by the reference shareholder (STAK Pinguin). Boortmeerbeek. 8500 Kortrijk. Berchem. was appointed director at the General Meeting of 25 May 2005. BVBA. The mandate as director expires during the 2007 Annual General Meeting. The term of his mandate is two years. Frank Meysman is the former Chairman of Sara Lee/Douwe Egberts. 8840 Staden (Westrozebeke). permanent representative Non-executive. Meroso.. Packing Creative Systems. He occupies a chair on the Boards of Directors of Grupo Bodegas Vinartis SA.T. Bexco. as stipulated in Article 524 of the Company Code. independent director M. represented by its permanent representative : Mr Herwig Dejonghe. In the convocation for the Annual General Meeting of 9 November 2007. represented by its permanent representative : Ms Veerle Deprez. (ii) one director will be selected from a list of candidates proposed by Fortis Private Equity Belgium NV.NV Vijverbos. The term of his mandate is three years. . Jan Bergers trained as a civil engineer at the University of Ghent and received an MBA from Fordham University New York and IMI Dublin.O. represented by Frank Meysman (age 55 years). (iii) one director will be appointed from a list of candidates proposed by Lur Berri. represented by its permanent representative. options. Frank Meysman. director. to include at least three independent directors. Pinguin. represented by its permanent representative : Mr Koen Dejonghe. 8840 Westrozebeke.

A least a majority of its members is independent.S. but will be no fewer than two per financial year.Mr Patrick Moermans. Their knowledge and experience will be a significant contribution to the management of the Company. In exercising this right.Mr Luc Van Nevel. The Audit Committee has right of access to all levels of management. 80 . . The Audit Committee comprises three non-executive directors. The Nomination and Compensation Committee comprises no fewer than three directors. BVBA. The Chairman of the Committee reports to the Board of Directors after each meeting of the Committee. The Chairman of the Committee makes an annual report to the Board of Directors on the work of the Audit Committee. The Board of Directors sets the brief for each committee with respect to its organization. 9000 Gent. Motivation for the independent directors or their permanent representatives : These nominees for the position of director satisfy all the conditions of independence in accordance with Article 524.Mr Luc Vandewalle. . The Chairman of the Board of Directors is not Chairman of the Audit Committee.2.T. procedures.1. residing at Dewittelaan 19/0402. of the Company Code.BVBA The Marble.1. Audit Committee The Board of Directors appointed an Audit Committee. The Committees have a purely advisory role. represented by Luc Van Nevel. The Audit Committee comprises the following directors: The Marble BVBA. The Board of Directors has created an Audit Committee and a Nominations and Compensation Committee. permanent representative of the BVBA The Marble has years of industrial and economic experience. Any decision remains the joint responsibility of the Board of Directors.Mr Patrick Moermans has broad knowledge and experience in the corporate finance sector. The role of the Nominations and Compensation Committee is to support the Board of Directors in all matters related to the appointment and payment of members of the Board and members of the Management Committee. and M.O. residing at Berchemweg 131. The Audit Committee supports the Board of Directors in its supervision of (i) the integrity of the Company’s financial statements. 9700 Oudenaarde. 4. represented by Jan Bergers. 9700 Oudenaarde. 9000 Gent.Mr Luc Vandewalle has years of experience in the financial sector. whose permanent representative is : Mr Luc Van Nevel.3. (b) list of candidates for the position of independent director : . 8670 Koksijde. they use their own power of judgement to assure that such contact does not disrupt Pinguin NV’s business operations. residing at Schapenbaan 1. The number of meetings is set by the Chairman of the Committee to permit the Audit Committee to meet its obligations. Committees The Board of Directors can create specialized committees to analyze specific issues and make recommendations about these issues to the Board of Directors. residing at Hofbouwlaan 3. (ii) the Corporation’s compliance with legal and regulatory requirements.3. and (iv) the exercise of internal controls and risk management of the Company and of the statutory auditor. 1860 Meise. Patrick Moermans. . 4. Members of the Audit Committee appoint one of their number as Chairman of the Committee. The Marble BVBA is Chairman of the Nomination and Compensation Committee. Fortis Private Equity Belgium. (iii) the qualifications and independence of statutory auditors. . having its registered office at Berchemweg 131. Nominations and Compensation Committee The Board of Directors appointed a Nominations and Compensation Committee. Patrick Moermans is Chairman of the Audit Committee. policy and activities.3. whose permanent representative is: Mr Marc Ooms.1. 4.. .BVBA Marc Ooms.1. having its registered office at Hofbouwlaan 3. represented by Frank Meysman. § 4.

represented by Luc Van Nevel. he received an MBA from the Vlerick management school as well as a Master’s degree in IAS IFRS from the EHSAL as well as doing post-graduate work in taxation with VPOO/VLEKHO.T. they use their own power of judgment to assure that such contact does not disrupt Pinguin NV’s business operations. The Management Committee is jointly responsible for the Corporation’s policy. plans. 4.1. In the exercise of its role the Management Committee is responsible for compliance with all relevant laws and regulations. 4. MANAGEMENT COMMITTEE The Board of Directors has not established an Executive Committee within the meaning of article 524bis of the Company Code. strategies. The Chairman of the Board of Directors is the Chairman of the Nominations and Compensation Committee. He was active in banking and auditing and with various international production companies. nor when it is dealing with his or her own compensation package. BVBA.O.S. and budgets established by the Board of Directors.000 in the previous financial year. The role of the Management Committee is to guide the management of Pinguin NV and to carry out other responsibilities delegated to the Management Committee by the Board of Directors in accordance with the values. Peter Ohms graduated in 1983 as a Mechanical Engineer from Delft University. He has been Chief 81 . The Management Committee comprises the following persons: Vijverbos NV represented by Herwig Dejonghe (age 48 years) Delegated director. product and time management. The Nominations and Compensation Committee comprises the following directors: The Marble. with IPSO LSG and as CFO of Vitalo Industries and Retail Estate. Jo Breesch and M. Executive directors receive no remuneration. he worked as corporate controller. but the number will be no fewer than one per annum.All its members are non-executive directors. The Chairman of the Committee reports annually to the Board of Directors regarding the work of the Nominations and Compensation Committee.4.2. In exercising this right. Remuneration of the Board of Directors Remuneration for non-executive directors was EUR 111. The majority of Committee members is independent directors. represented by Frank Meysman. the company or Corporation’s affairs. He does not chair the Committee when it is dealing with the appointment of his or her successor. Peca Management BVBA represented by Peter Ohms (age 47 years) COO On 1 January 2005 Peter Ohms was hired as “Industrial Director”. finance and production systems excellence. and the affairs of group companies affiliated with Pinguin NV. Management is represented by the members of the “Corporate Executive Meeting” (CEM) or the Management Committee. policies. Before he was employed at Pinguin. The Chairman of the Committee determines the number of meetings required to permit the Nominations and Compensation Committee to meet its obligations. CEO The New Mile BVBA represented by Steven D’haene (age 36 years) CFO After his studies in Applied Economics at the Universiteit van Gent. Steven D’haene does not currently have a mandate as a director outside of the Pinguin Group. No special severance payment is made at the end of the terms of office of directors or managers apart from any severance payment provided by law. He then followed a number of post-graduate programs in project. The Nominations and Compensation Committee has right of access to all levels of management.

management. or winding up. COMPENSATION POLICY OF THE COMPANY Compensation policy for directors The compensation of members of the Board of Directors is in accordance with their general and specific responsibilities and with general international market practice. or supervisory body.3. Non-executive / non-independent 82 .1. Peter Ohms does not hold a position as director at this time. Taking into account the Corporation’s values.000 in the last financial year. the Management Committee has sufficient scope to put forth and implement the Corporation’s strategy. No director or member of the management has held within the past 5 years an executive position as senior management or member of an administrative. This can be done on an individual basis.Design and Chief Repair & Maintenance Engineer for Philips Roeselare. and non-executive / non-independent directors. This includes reimbursement of expenses incurred by the group’s management on behalf of the Pinguin Group. 4.3. No director or member of the management has been sentenced within the past 5 years for criminal fraud. Executive directors The directors who perform an executive function within the Company or within one of its subsidiaries will not receive additional compensation for their term as director. nor has any been the subject of an official complaint and/or sanction by any public or regulatory body. Compensation for other members of the management (CFO and COO) was EUR 441. The Chairman of the Board of Directors receives only a fixed fee paid quarterly. There are no conflicts of interest between the Corporation and its directors and management. or supervisory body of a corporation at the time of or prior to its being declared bankrupt. being placed under guardianship. as managing director for Ieper Industries and COO for Advantra International and Plant Manager for SAS/Faurecia in Gent. Compensation of members of the Management Committee The remuneration of the CEO was EUR 288. They receive a management compensation as members of the Management Committee. independent directors. The Board of Directors authorizes the Management Committee to undertake activities that are part of daily management. management. No director or member of the management within the past 5 years has been declared incompetent as member of any board. The Nominations and Compensation Committee can decide to grant additional compensation to one or more independent directors.1.000. Independent directors Compensation of the independent directors includes attendance and directors fees for their attendance at meetings of the Board of Directors and of the Committees of the Board of Directors (including through video or teleconferencing). its tolerance for risk. 4. and the key elements of its policy.2. Pinguin NV’s compensation policy distinguishes three types of directors: executive directors. He is not entitled to attendance and directors fees for meetings of the Board of Directors or of the Committees of the Board of Directors on which he sits. 4.

the interests of the members of the Management Committee are aligned to a significant degree with those of the Company and its Shareholders. Such compensation is intended to attract highly qualified and potentially highly promising management talent. Together.3. on qualitative parameters that take into account individual performance. to motivate them. Members of the Management Committee are not compensated for their presence at meetings of the Committee. A few executive directors hold shares (see below at item 4. 83 .The non-independent directors who have no executive tasks are entitled only to an attendance and directors fee for each meeting they attend. if these meetings do not coincide with a meeting of the Board of Directors. The amount and structure of such compensation are subject to annual review and analysis in accordance with market practice.1. 4. and to retain them. For the compensation of members of the Management committee.2. see section 4. is the managing company of Veerle Deprez. on the one hand. is entitled to an attendance and directors fee per meeting attended. SHARES AND WARRANTS OF DIRECTORS AND MEMBERS OF THE EXECUTIVE MANAGEMENT Shares and warrants held by directors The directors hold no warrants. Payment is made at the recommendation of the Company’s Secretary based on meetings attended.2. and to align the interests of managers and all interested parties.). Attendance and directors fees are paid semi-annually.2. The Chairman of the Audit Committee. The variable compensation or the bonus is based.4. In this way. 4.4. The Nominations and Compensation Committee can decide to grant additional compensation to one or more non-executive / non-independent directors. This can be done on an individual basis. Compensation policy for members of the Management Committee Members of the Management Committee receive a fixed fee and variable compensation in the form of an annual bonus.4. as are members of the Audit Committee and the Nominations and Compensation Committee. Management Deprez BVBA holds 47 of the 763 shares in Food Invest International NV (holding company having sole control of Pinguin NV). Management Deprez BVBA. Compensation of members of the Management Committee is set by the Board of Directors at the recommendation of the Nominations and Compensation Committee.1. non-executive director and representative of the majority Shareholders. on quantitative parameters that take into account the performance of the Pinguin Group and a whole and. 4. such variable compensation is limited to 40% of fixed remuneration. on the other.

During the accounting year from 1 July 2006 to 30 June 2007. which holds 175. C.412 5. director and head of Pinguin Belgium. holder of 175. 4. himself.4.310 depositary receipts for shares in Pinguin NV. 84 .000).v.412 0. His spouse is full owner of 11 shares of the civil partnership and the usufructuary of 15.e.5.. which is. whether or not through companies. o. and Mr. and holder of 3. taxation and legal counsel (EUR 59. issued by the Stichting Administratiekantoor Pinguin.V.v. The Dejonghe-Dejonckheere marriage community of property is usufructuary of 11. and of 3. delegated director and CEO of Pinguin NV. C.44% 0. Shares held by executive management Based on the transparency statement and the recorded positions of management. Kofa NV. the statutory auditor and the persons working with him in professional association conducted special assignments to the amount of EUR 145.000).B. here below is a summary (as of the date of this Prospectus) of the shares held by members of the executive management (or. Herwig Dejonghe.925 certificates of shares in Pinguin NV.v.09% 0. the following indirect interests in Pinguin. including the executive directors.000 shares of Pinguin Invest NV. o. These assignments essentially concerned additional legal audit tasks (for EUR 5.806 0. that itself holds 175. Herwig Dejonghe holds in his own name 45. Pinguin Langemark NV. is partner in the civil partnership DejongheDejonckheere that holds 330.A. Herwig Dejonghe.V. The external audit includes the audit of the statutory annual accounts of Pinguin NV. and directly holds 378 shares of Pinguin Invest NV (a holding company controlled by Herwig Dejonghe and Koen Dejonghe). represented by Mr. Herwig Dejonghe and Koen Dejonghe hold. together with his spouse. is the management company of Herwig Dejonghe. with its registered office at 1050 Brussel. auditor.410 shares of the civil partnership. President Kennedypark 8 A.97% Vijverbos NV.V. in case of management companies. Mario Dekeyser are both members of the IBR (Institute of company auditors).882 100 64.000.A.925 depositary receipts for shares in Pinguin NV. Aside from the abovementioned direct interest in Pinguin. is the management company of Koen Dejonghe. issued by the Stichting Administratiekantoor Pinguin.719 shares of the civil Company. by their permanent representatives).2.532 certificates of shares in Pinguin NV. Mario Dekeyser.378 shares of Pinguin Invest NV.222 certificates of shares in Pinguin NV. is full owner of 11 shares of the civil partnership and the usufructuary of 15.e. Deloitte Bedrijfsrevisoren / Réviseurs d’Entreprise B.B. itself. Koen Dejonghe holds in his own name 375.4.719 shares of the civil partnership. Vijverbos NV Kofa NV Peter Ohms Steven D’haene Total Shares Number of Shares % based on the number of Existing Shares 29.44% 29. Pinguin Salads BVBA and Pinguin Foods UK Ltd as well as the audit of the consolidated annual account of Pinguin NV. with his office at 8500 Kortrijk.000) and other assurance services (EUR 81.00% 0.925 certificates of shares in Pinguin NV. issued by the Stichting Administratiekantoor Pinguin. STATUTORY AUDITOR External audits are performed within the Pinguin Group by Deloitte Bedrijfsrevisoren / Réviseurs d’Entreprise B. Louizalaan 240.v. Additionally.V.

2.Both Pinguin and Deloitte have paid sufficient attention. controlled by Veerle Deprez. The director with the conflicting interest must also inform the statutory auditor of the conflict. Directors conflicts of interest Article 523 of the Company Code provides for a special procedure within the Board of Directors for the case that one or more directors have a possible economic interest that is in conflict with one or more decisions or transactions that belong to the authority of the Board of Directors. In the financial year 2006/2007. whereby the additional activities of Deloitte Bedrijfsrevisoren (auditors) as well as the accompanying legal and fiscal activities carried out by companies connected to it. the Company foresees no potential conflicts of interest in the near future. In case of noncompliance with the foregoing. Moreover. The minutes of the meeting of the Board of Directors must include the declarations by the director with the conflicting economic interest as well as a description by the Board of Directors of the conflicting interest and the nature of the decision or operation involved. The minutes concerned must be included in the annual report (with the individual accounts) of the Board of Directors. If such a conflict arises.6. the director concerned must so notify the other directors prior to the Board of Director’s conferring and making a decision on the item in question. the Company can declare invalid the decision or operation that took place in violation of these provisions if the counterparty was aware of the violation upon such a decision or operation. 4. It is also not applicable to decisions or transactions that arose between corporations of which the one. or as the case may be between companies of which at least 95% of the votes associated with the whole of the securities issued by each that are. Article 524ter of the Company Code provides for a similar procedure for conflicts of interest among members of the Management Committee. whether or not such a transaction is subject to applicable legal rules. At present the directors have no conflict of interest within the meaning of article 523 of the Belgian Company Code that has not been made known to the Board of Directors. 4. In case of a conflict of interest.6. Except for the decision to ratify the takeover of all shares of the Lutosa Group and the decision to approve the sale and rent back of the Lutosa Group’s real properties to corporations jointly controlled by Guy and Luc Van den Broeke and Food Invest International. there were no known conflicts of interest within the meaning of article 523 of the Belgian Company Code. The statutory auditor must describe in his annual report (with the individual accounts) the financial consequences of the decision that gave rise to the potential conflict of interest. Furthermore. holds at least 95% of the votes associated with the whole of the securities issued by the other. The Pinguin audit committee has decided in the affirmative with respect to this expansion. The executive management of the Company is not a Management Committee within the meaning of article 524bis of the Company Code. only the Board of Directors is authorized to make the decision that gave rise to the conflict of interest.1. held by another company. directly or indirectly. 4. were submitted to the audit committee beforehand for approval. TRANSACTIONS WITH AFFILIATED COMPANIES General Each director and each member of the executive management is encouraged to so arrange his personal and business interests that there is no direct or indirect conflict of interest with the Company. Such a transaction can be made only on the basis of conditions in line with the market. The procedure is not applicable when the decisions or transactions are related to the usual transactions that are made under the conditions and under the securities that usually apply in the market for such transactions. The Company’s corporate governance charter further provides that each transaction between the Company or its subsidiary and any director or executive manager must be approved in advance by the 85 . The Corporation’s corporate governance charter provides that every transaction between the Company or any of its subsidiaries with any director or executive manager must be approved in advance by the Board of Directors. the director with the conflicting economic interest cannot participate in the discussion and vote by the Board on the item that gave rise to the potential conflict of interest. the minutes must include a justification of the decision or operation of the Board and a description of its financial consequences for the Company. directly or indirectly.6.

Such a transaction can be made only on the basis of conditions in line with the market. Moerbos NV. the share transfer agreement to be concluded. the Corporation foresees no potential conflicts of interest in the near future within the meaning of article 524 of the Belgian Company Code. but believes it will be to the Company’s disadvantage. Any deviation from the Committee’s recommendation must be justified. it must clarify what benefits the decision or transaction will provide to compensate for the stated loss. 4. This Committee must determine the commercial advantages and disadvantages of the decision or transaction for the Corporation and its Shareholders. provides for a special procedure applicable to intragroup transactions or transactions with affiliated companies. If the Committee does not find the decision or transaction to be wrong. the Board of Directors of Pinguin NV was informed of the results of the legal. This procedure does not apply to normal decisions or transactions made or occurring under the conditions and against the securities normally applying to the market for similar transactions. if any.7. Vanelo NV. in its annual report the Company must report the material restrictions or obligations.2 above). that the parent company took on. accounting and financial due diligence investigation conducted at the request of Food Invest International NV on the Lutosa Group.Express NV. Prior to such decisions or transactions the Board of Directors of the Company must appoint a special Committee of three independent directors. or requested continuation of. in the previous financial year. All these elements must be explained in the Committee’s recommendation. Lutosa France SARL and Lutosa .1. Pinguin NV gave its proxy to Food Invest International NV to negotiate further and to reach a final agreement with the Shareholders of the Lutosa Group. which must issue a separate opinion.6. 4.7. supported by one or more independent experts. Apart from the procedure described above. social.6.Express NV on the 86 . Lutosa France SARL and Lutosa . whether or not such a transaction is subject to applicable statutory regulations. which will apply to the Company.3. The mediation of Food Invest International NV in the takeover of the Lutosa Group On 15 June 2007. Moerbos NV. The Board of Directors then shall make a decision. Vanelo NV. The procedure applies to decisions and transactions between the Corporation and affiliated companies of the Corporation that are not subsidiaries. taking into account the Committee’s recommendation.Olsene NV. Food Invest International NV reached an agreement in principle with the Shareholders of G&L Van den Broeke . It had the opportunity to transfer all rights and obligations in the framework of the aforesaid binding offer. and the additional agreements to be concluded with an affiliated or associated company. Except for the decision to ratify the takeover of all shares of the Lutosa Group and the decision to approve the sale and rent back of the Lutosa Group’s real properties to corporations jointly controlled by Guy and Luc Van den Broeke and Food Invest International NV. that is evidently wrong in light of the policy pursued by the Company. include the following: 4. In the financial year 2006/2007 there were no conflicts of interest within the meaning of article 524 of the Belgian Company Code made known. It must also calculate and establish the economic consequences of the decision or transaction. Transactions with affiliated corporations Article 524 of the Belgian Company Code. as well as the Corporation and its subsidiaries. fiscal. The recommendation of the Committee and the decision of the Board of Directors must be communicated to the Company’s statutory auditor. After learning the results. Food Invest International NV made a binding offer on 21 June 2007 for all shares of G&L Van den Broeke . whether or not it is of such a nature as to involve the Company in a loss. The decision of the Committee. controlled by Veerle Deprez. RELATIONS WITH KEY SHAREHOLDERS The present business and commercial relations between the Shareholders and their associated companies. and discussion of how the takeover could be financed. Directors with a conflict of interest may not participate in the discussion and vote (as provided in section 4. an excerpt from the minutes of the Board of Directors and the opinion of the statutory auditor must be included in the annual report (with the individual accounts) of the Board of Directors. nor to decisions or transactions that represent less than 1% of the Corporation’s consolidated net assets.Board of Directors.Olsene NV.

Property transaction Primeur NV.282. Both lease agreements relate to a parcel of land located at 8840 StadenWestrozebeke.2. above.7.4.893 bonds with warrants for a total amount of EUR 5.054. The final share transfer agreement for all shares of G&L Van den Broeke .Olsene NV.000 and (ii) sells the ground itself to Dreefvelden NV for an amount of EUR 2. The Board of Directors stated on 2 July 2007 that it agreed in principle with the terms and conditions of the takeover of the Lutosa group. The transaction was approved by Pinguin Board of Directors and the concerned Lutosa companies subject to compliance with the procedure provided by Article 523 and 524 of the Belgian Company Code and the banks of the Consortium. .7. KBC and Fortis (the “Consortium”) concerning the sale of the buildings and grounds in the three Lutosa sites. Provinciebaan.2. were also entered into directly by Pinguin NV.7. Property transaction. lease agreements. .Les Pres Sales NV rents the buildings to the concerned Lutosa companies for an amount of EUR 4.2. with the option of acquisition by Les Pres Sales at the end of the lease for an amount of EUR 1. Moerbos NV and Van den Broeke-Lutosa NV. Both lease agreements had as their purpose the confirmation of the terms and conditions of the existing oral lease agreement.10.000 for Vijverbos NV.2.2. Vanelo NV.250. On the basis of the agreement in principle.Express NV. the transaction will be structured as follows. the Extraordinary General Shareholder’s Meeting of Pinguin NV resolved on 30 December 2002 to issue 441.1.4 Debenture loan with warrants As previously set forth in Section 3. with the provision that the lease price can be adjusted annually to the healthcare index. Les Pres Sales NV (a company controlled by Food Invest International NV and the Van den Broeke family) and Dreefvelden NV (a company controlled by Veerle Deprez) have reached an agreement in principle with a consortium of banks consisting of ING.terms and conditions of the share transfer agreement to be concluded and the additional agreements to be concluded.7. The yield of the sale will be used to finance a part of the takeover price for Lutosa. respectively.500.500. 4.000 per annum (indexed annually) for a period of 15 years. that has been in use since 1 January 2000 by Pinguin NV. The takeover of these rights and obligations was ratified in accordance with articles 523 and 524 of the Belgian Company Code. management agreements. The principle agreement must still be further elaborated. Each party has the right to terminate the lease agreement at any time with 12 months notice. 4.750.The Consortium leases the buildings for a period of 15 years to Les Pres Sales NV.2. Management agreements Pinguin NV concluded a management agreement on 31 March 2005 with both Vijverbos NV and Kofa BVBA.7.000.27. Moerbos NV.Lutosa grants (i) a long-term lease to the Consortium for a period of 99 years in exchange for a one-off payment for ground rent of EUR 42. Vanelo NV.3 Lease agreements with Vijverbos NV and Kofa BVBA Pinguin NV entered into a lease agreement on 20 March 2002 with both Vijverbos NV and Kofa BVBA. and COO Belgium. as well as all additional agreements. 87 . The annual rent amounts to EUR 8. 4. debts 4. Lutosa France SARL and Lutosa . Aforesaid agreements contain the conditions and terms under which Vijverbos NV and Kofa BVBA would perform the duties of CEO / CCO. 4. . for Kofa BVBA and EUR 14.457. The lease agreements were concluded for an indefinite term.000.

125 bonds with warrants.In addition to 363.5 Debt / claim between Pinguin Invest NV and the Pinguin Group Pinguin Invest NV has a claim on Pinguin NV (account 415 “other claims”) and a debt with respect to Pinguin Langemark NV (account 489 “other debts”) of EUR 235.775.256 The warrants of the aforesaid holders of certificates of shares/Shareholders were voided on 30 September 2005 as set forth in Section 3. 88 .4.10.7. who were associated with Pinguin NV as director and/or member of the executive management team: (a) Herwig Dejonghe: 6. 4.054 bonds with warrants.008 93.842 and EUR 565. As of this date Pinguin NV still has a debt with respect to the aforesaid holders of certificates: Holders of Certificates of Shares / Shareholder Demafin Civil partnership Dejonghe Provoost Vijverbos Civil partnership Dejonghe Dejonckheere Outstanding debt (EUR) 75. respectively.197 bonds with warrants underwritten by ISEP NV (Fortis Private Equity Expansion NV) and 40. the other bonds with warrants were underwritten by the natural or legal persons given below. The bonds with warrants underwritten by Jan Dejonghe were contributed on 17 May 2005 to the civil partnership Dejonghe-Provoost.760 131.089 bonds with warrants. The bonds with warrants underwritten by Herwig Dejonghe were contributed on 18 August 2005 to the civil partnership Dejonghe-Dejonckheere. (c) Jan Dejonghe: 10. (b) Vijverbos NV: 14.072 bonds with warrants.2.356 bonds with warrants underwritten by a third investor (Gilbert Pieters).264 56. and (d) Demafin BVBA: 8.

45% from vegetable products and 55% from potato products. Pinguin. Pinguin took a giant step forward with the acquisition of Lutosa. Figure 2: Pro-forma distribution of sales for calendar year 2006 Sales Frozen Vegetables 45% Sales Potato Products 55% Source: Pinguin After the acquisition of the activities of Christian Salvesen Foods (3). PINGUIN ACTIVITIES COMPANY PROFILE In recent years Pinguin has evolved into a leading European frozen vegetables specialist.5. generated total pro forma sales for calendar year 2006 of EUR 331 million. take into account the recent acquisitions of the activities of Padley Vegetables and those of Christian Salvesen Foods. including Lutosa. 5. 89 . Pinguin now operates at 12 production sites.1. These sales do not. Padley Vegetables (1) and Lutosa (3). Pinguin has set for itself the goal of offering a broad range of high quality vegetable and potato solutions (“Vegetable Solutions”) to various types of customers whereby the deep freeze process is the main supporting production technology. however. and its extensive commercial network further strengthen the Pinguin organization. also becoming a key player in the potato processing industry. technology. Lutosa’s competencies in the areas of agronomy. research and development (“R&D”). production.

000 tons of frozen.Figure 3: Overview of production sites Source: Pinguin 5. Lutosa – Potato specialist Lutosa is one of the major European producers of potato products. completed in September 2007.000 tons of frozen vegetables and vegetable preparations on an annual basis. Lutosa produced 287. ready to use vegetable preparations (“Convenience Cuisine”) in 40 countries. Lutosa’s products are now sold in 70 countries. Lutosa sells its product range to the food service industry. Pinguin . Its customer base can be divided into three types of customers: food distribution chains or retail.Vegetable specialist Prior to the takeover of Christian Salvesen Foods. 5.1. chilled and dehydrated potato products in 3 Belgian production sites. food service and the food industry. In 2006. the food industry and to Fast Food chains.1.1. Pinguin realized an annual production of approximately 150.000 tons of frozen vegetables and vegetable preparations in the 2006/2007 financial year. The takeovers of Padley Vegetables and Christian Salvesen Foods will add an estimated annual production of 60. 90 .2. Pinguin sells its broad line of vegetable solutions ranging from fresh frozen basic vegetables in all possible forms to culinary. food distribution chains.

pineapple. onions.5. mushrooms. cabbage varieties at the Belgian location at Westrozebeke and leaf vegetables at the Belgian location at Langemark.2. carrots at the Belgian location at Langemark and at Pinguin Aquitaine. at times.1. depending on which vegetables are grown locally. In the United Kingdom.VEGETABLE SPECIALIST Product line Pinguin’s vegetable division has more than 2.1. sweet corn by Pinguin Aquitaine.2. Classic basic vegetables Within the core activity of frozen basic vegetables. PINGUIN . The main product for both companies remains peas. leeks. soya bean sprouts. In addition. Pinguin also prepares “Mixes” that can be used for specific dishes.000 product specifications. beans and peas can be obtained in various forms and weights. such as carrots. celeriac. The most important vegetables. eggplants. olives. Peas are produced largely by Pinguin Foods UK. where Pinguin offers a very extensive range of products. chervil. asparagus. couscous vegetables. among others. Pinguin 2006/2007 Organic & integrated cultivation Convenience 1% 6% Peas 15% Carrots 9% Other basic vegetables 32% Mixes 17% Corn 7% Cabbage varieties 3% Beans 10% Source: Pinguin Note: These sales include 1 month of Padley and excludes Salvesen. as described in section 6. black salsify. such as soup vegetables. ranging from fresh frozen basic vegetables in all possible forms to culinary. carrots. turnips and potato products. Since acquiring the assets of Padley Vegetables and Christian Salvesen Foods. Pinguin now has its own production platform for broccoli. The production of each vegetable is concentrated in one or. sweet peppers. and a wild fruits mix. The category “Other basic vegetables” includes. ready to use vegetable preparations (“Convenience Cuisine”). spinach. the traditional vegetables such as peas. vegetables for mussel dishes and a wok mix. such as strawberries. zucchinis. beans and all types of cabbages continue to make up the bulk of business. Pinguin’s vegetable product line covers the following product categories Figure 3: Distribution of sales per product category. a few fruits are also offered. celery. two sites. 91 . corn also represents a large share of sales. 5.

this sector only contributes to a limited degree to Pinguin’s sales. in higher volumes. to serve these classic sauced vegetables. or oven. and fish. The second category of Convenience products includes the more complete dishes that include other food products. The terms of these contracts are set in accordance with existing sector practice. Pinguin also purchases fresh vegetables abroad for a variety of reasons. Pinguin remains convinced that this niche market will develop further and it will continue to take a pioneering role in this segment by offering a sufficiently large product range that meets the consumer’s price and quality expectations.“Convenience” products The first of three categories of Convenience products includes pre-cooked vegetables and vegetable mixes. but expectations for its growth are high. Although sales in the last four years have increased five-fold. The agreements were made in this spirit with various foreign frozen vegetable producers. pan. these are quick dishes to be heated at high temperatures in the pan or wok. − “Grill Cuisine”: grilled vegetables that retain their original crunchiness. such as broccoli and sweet peppers. these have a natural. Thanks to cooperative agreements with a number of foreign frozen vegetable groups to deal with surpluses or shortages. lead to a growth in group profitability. meat. pan. as much as possible. oils. The high added value of these products as well as their margins must. including lower prices or the unsuitability or exhaustion of local land for certain types of vegetables. The final category includes soups. Pinguin distinguishes five major categories herein: − “Al Dente Cuisine”: both single vegetables and vegetable mixes. they are ready to serve after heating in a wok. however. these products can also be served cold. while Pinguin UK and Pinguin Aquitaine (France) are supplied by a limited number of agricultural cooperatives and a variety of dealers. have so far been slow to redeem themselves (sales + 60% since 2002). that are easily measured out thanks to their presentation. fine-grilled flavour and are ready to serve after heating in wok. sauces. The geographic distribution of purchases with foreign frozen vegetable groups varies from year to year. Purchasing Pinguin is supplied with fresh vegetables by some 800 farmers in West Flanders and northern France. once thawed. or oven. A large part of the purchasing of fresh vegetables make up the object of annual contracts that are negotiated between VEGEBE (Verbond van de Groenteverwerkende Bedrijven . which affect the quality of the vegetables supplied. The high expectations. its dependence on a harvest in a particular region. depending on price and availability. 5. often combined with a number of other ingredients such as sauces. merely heat them in the microwave or a pan. − “Wok Cuisine”: classic and exotic vegetable recipes that are ready to serve. Fields can also exhibit soil exhaustion with respect to particular crops. These contracts set the quantity and price for fresh vegetables for the next season and are usually concluded in January. − “Fry Cuisine”: deep-fried vegetables that retain their original crunchiness.2. − “Sauce Cuisine”: each vegetable piece is covered in seasoned sauce. These two elements compel Pinguin to reduce. seasoned and precooked. such as rice. ready to season and to cook to taste. Organic vegetables The niche market for organic frozen vegetables at first showed a steep growth pattern and expectations were quite high.Federation of Vegetable Processing Companies) and the farmers via the Farmer’s Union. Changing weather conditions exert considerable effect on the supply of vegetables to the frozen vegetable sector.2. and herbs. and purees in tablet form. 92 . Pinguin has spread its supply risk in guaranteeing delivery of the quantities demanded by its customers.

puree. they are often cut into pieces. which are then also automatically measured into the mixer. The freezing point for vegetables. Thanks to the extremely cold temperature of the vegetable particles. This yields a product that can be perfectly portioned thanks to the individual coating. Most vegetables (such as carrots.) are frozen individually (I. and the continuous mixing.5. cauliflower. the vegetables usually are blanched.3. After this preparatory processing is completed. colour and/or size. In the main supply line the already frozen loose vegetables are. lies between -0. Some vegetables (such as carrots. The powders are weighed according to the recipe.3. 1) Preparatory processing When the vegetables arrive a few hours after being harvested. 2) Quick freezing Freezing is an excellent way to preserve foodstuffs. strips. chemically. Dirt and foreign objects are removed from the vegetables and the vegetables are washed. This product is then discharged in bulk for later packaging. endives. after which a sauce (or herb solution in oil) is injected. while the quantity of ice increases minimally at temperatures below -18°C. Production processes and facilities 5.2. flavour. which indicates the start of ice formation. This preserves their original colour. mixing and coating of the vegetables. Brussels sprouts. etc.2. Increasingly. after taking measurements. automatically weighed in the mixer. discs. 3) Preparation This concerns the production process for Pinguin Convenience Foods in particular. mixed. This can be done three ways: mechanically.) are “block” frozen. are removed. and dissolved in water. Pinguin uses the steam process since it is environmentally friendly. It is very important for product quality that this process takes as little time as possible. All vegetables that enter the factory are first cleaned.8 and -2. with the proviso that these sauces are made only minutes prior to their use. etc. 93 . or cubes. all vegetables that do not match the reception standard in terms of shape. with the possibility of adding other vegetables or other foodstuffs such as fish and meat manually. the delivery is weighed and assigned a lot number. onions) must then be peeled.F. peas. black salsify. preserving their natural flavour and colour and allowing them to be stored longer. It is particularly important that the product remains in the critical ice formation zone as briefly as possible. The vegetables are exposed to extremely high temperatures in this process.Q. frozen vegetables often contain more vitamins than the fresh products that the consumer finds in shops. the sauce freezes immediately around the individual vegetable pieces. The vegetables are then cooled prior to being frozen.8°C. either by plunging the vegetables into boiling water or subjecting them to a stream treatment. and can be divided into three stages: sauce preparation. = Individual Quick Frozen). It is important that the cutting process yields a uniform product.1. Other vegetables (such as spinach. To make the vegetables more marketable and commercially more attractive. But the speed at which food is frozen has a great influence on quality of the product. At the final processing stage prior to freezing. The formation of ice is greatest in the zone from -2°C to -12°C. This vegetable mix is then sprayed with liquid nitrogen (-200°C) so that it is further chilled to approximately -40°C. Sauces are prepared from dried herbs and powder mixes that are made to measure by the suppliers. This is called the “Pello Freez” technique. homogenized and pumped into a “buffer tank” until they are used. or with steam. and the specific packaging of the prepared dishes. the vegetables can be frozen. The production process Vegetables are processed into frozen vegetables within a few hours of being harvested. if necessary directly in small portions. so that throughout the production process the delivered vegetables can be tracked all the way back to the farmer. In this preparatory phase. and vitamin content.

600 pallets and 16.000 tons 2 Pello Freez lines for leaf vegetables. sauces. vegetable purees soups and sauces Storage capacity: 15.The soups. beans. mixing with sauces.000 tons 6 packaging lines for frozen vegetables Storage capacity: 26. and the quality of the raw materials.2. 5. Since the system uses EAN coding. A computer program is used that allows for an exact calculation of which quantity/quality is located where in the facility. it can even be ensure that quantities/qualities prepared for a particular purpose for a particular customer are reserved. The group’s distribution and packaging centre is also nearby. Pinguin Westrozebeke: 4 production lines & 6 packaging lines Production capacity: 65. mixes Employees: 106 Pinguin Foods UK: Boston Site (former Padley Vegetables) 3 production lines for frozen vegetables Production capacity: 40. Vegetable preparations as well as vegetables that are frozen individually or in small blocks are usually packaged after freezing. or they are stored in bulk packaging in large freeze rooms while awaiting final packaging upon delivery to the customer. cauliflower. Norfolk) 3 production lines for frozen vegetables Production capacity: 50. Thick liquid products (such as chopped spinach or vegetable puree) or fragile products (such as asparagus) are frequently packaged before freezing. rice. which means that these products are of the highest quality to be found on the market.3.000 tons 6 packaging lines for frozen vegetables and 2 packaging lines for ‘Convenience’ frozen products (Mix to pack) Storage capacity: 50. 4) Packaging Depending on the nature of the processed product.000 pallets Specialities: peas.000 bulk storage containers Specialities: root and tuber crops. mixes Employees: 225 Pinguin Langemark: 2 production lines & 3 large packaging lines. carrots. so it can be precisely known when the various lot numbers were loaded and to which customer they were destined. it is packaged either before or after being frozen. or additional processing. All trucks are loaded at negative temperatures. Aquitaine in France and Norfolk and Lincolnshire in the United Kingdom. rice Employees: 189 Pinguin Foods UK: Bourne Site (former Salvesen) 94 .000 bulk storage containers Specialities: peas. meat or other vegetables. spinach Employees: 100 Pinguin Convenience Foods (Langemark): Pinguin Foods UK (Kings Lynn. cauliflower. how the product was processed. This proximity to the most important suppliers ensures that vegetables are frozen within a few hours of being harvested. Production capacity: 35. broccoli. These sites are located in the most fertile region of Europe: West Flanders. which means that the FIFO (first in first out) system can be employed. They are prepared from genuine natural products and not from powdered essences. The vegetables are either packaged in their final packaging. the Pinguin Group now has nine production sites active in vegetable processing and packaging.000 pallets and 35.000 tons Storage capacity: 3. Products are also stored in mobile storage racks. Packaging and storage are also very important.000 pallets Specialities: peas. avoiding unnecessary transport and contributing to profitability. 5) Storage The shelf life of frozen vegetables depends on the type of vegetable. and purees to be sold as end products in tablet form are prepared in-house and frozen using the “Pello Freez” technique. beans. Records are maintained of all the production codes that are loaded onto each vehicle. Production facilities Following the takeover of the activities of Padley Vegetables and Christian Salvesen Foods. 6) Transport The transport of finished products is contracted to external international transporters.2. The temperature in the large warehouses is approximately -20°C and temperature variations during storage must be kept to a minimum.

issued by the eponymous inspection service for the production of organic products (www. it is actually decentralized as far as the major national markets are concerned.000 tons Storage capacity: 3. Employees: 103 Pinguin Foods UK: North Thoresby Site (former Salvesen) 3 production lines for frozen vegetables and no packaging lines Production capacity: 26.000 tons 1 large packaging line Storage capacity: 8. in 1996 Pinguin obtained the “BRC Higher Level” (British Retail Consortium. An optical inspection line allows for the fully automatic sorting out of vegetables of lesser quality during the production process. a renowned British inspection service.efsis.000 pallets Specialities: peas. it was also awarded the ISO 9001:2000 certificate granted in January 2002.com).blik. This is the highest level of quality in the area of food safety and hygiene that can be attained in Europe.be) recognized by the Belgian Ministry of Agriculture.brc. www. the Group had itself audited by the EFSIS (European Food Safety Inspection Service. cauliflower. which also serves as a purchase platform for components for exotic dishes and wok dishes prepared by the Company. Sales organization While the sales organization is coordinated from Belgium. for example.000 pallets Specialities: peas.uk) quality certification for foodstuffs.000 tons 1 small packaging line steam bags Storage capacity: 16. an important market for Pinguin. www. beans. cauliflower.4. Pinguin Foods UK Ltd (United Kingdom). This new standard places greater emphasis on insight and less on procedures.1 mixture and coating line 2 small packaging lines Storage capacity: 650 pallets Specialities: mixing. broccoli. Pinguin has 4 key sales platforms: Pinguin NV (Belgium). 9 Source: Vegebe: 2005 95 . SARL (France). beans. focussing on sometimes minimum colour differences by comparison with the good product. mixes Employees: 103 Pinguin Foods UK: Easton Site (former Salvesen) No production lines 7 packaging lines Storage capacity: 3.C.000 pallets Specialities: peas.2. − EFSIS: In order to meet UK requirements. Pinguin holds various certificates. including: − ISO Certificate: After the Group became the first of the nine frozen vegetable producers9 in Belgium to successfully pass the quality test to obtain ISO 9002 certification in 1995. The fact that Pinguin is permanently investing in quality management is evident from its major investments in recent years in.5. carrots Employees: 63 5.A. an optical inspection system for all its production and packaging lines. coating and preparing ‘convenience’ products Employees: 24 Pinguin Aquitaine (Ychoux): 2 production lines Production capacity: 40.org. As a result. − Blik certificate: All Belgian locations hold the “Blik” certificate. The underlying standard sets the requirements for the supply of products under the house brand of distribution groups and for processed or prepared foods or ingredients intended for the “food service” and the food industry.2. peas Employees: 65 3 production lines for frozen vegetables Production capacity: 33. corn.000 pallets Specialities: carrots. Other countries are served through contracts and cooperative agreements with local agents. Pinguin Deutschland Gmbh (Germany) and M. 5. Pinguin has established a representative office in China for the penetration of the Asian market. Quality The top priority of Pinguin is continual and rigorous quality control.

Because of these takeovers. The category ‘Outside EU’ represents Australia. the importance of the United Kingdom will rise sharply and sales in the United Kingdom will amount to more than 50% of total sales of the frozen vegetable segment. Canada.Figure 5: Geographic distribution of sales: Pinguin 2006/2007 Outside EU 3% Other Eu countries 14% United Kingdom 33% Belgium 16% Germany 16% France 18% Source: Pinguin Note: These sales include 1 month of Padley and excludes Salvesen. the Scandinavian region and Portugal.6. in particular. The most important markets for frozen vegetables are the United Kingdom and France. Spain.2. and China. 96 . In 2006/07 these markets provided half of sales. as described in section 6. Pinguin’s goal is to maintain a balanced distribution among these three segments of the food market. Because of the takeover of Christian Salvesen Foods and Padley Vegetables.1. retail. Customers The customer base can be divided into three categories.000 tons. 5. Greece. Pinguin’s sales in the United Kingdom will rise from 52. as described in section 6. Figure 6: Sales distribution per type of customer Retail 24% Food industry 39% Food service 37% Source: Pinguin Note: These sales include 1 month of Padley and excludes Salvesen.1. after their integration and restructuring.000 tons in 2006/07 to 130. The ‘Other EU countries’ include Italy. The Netherlands. approximately 16% of sales will be generated in Belgium and some 16% in Germany. In addition. food service and the food industry.

1 million tons.494 727.000 200. In 2005 the share of frozen vegetables amounted to 12%.500 81. Finland. The base of potential customers is constantly shrinking but their size is increasing due to concentration in the retail. mostly as a result of increased purchasing power in those countries.000 107. unprocessed vegetables in favour of processed vegetables (canned.000 284. and fresh-chilled). This growth was driven by.541 109. After the recent takeover of Padley’s and Salvesen’s assets. Belgium’s market share in Europe was 25%. the growing interest in health.2 billion.4% (2005) respectively. In 1985 the share of processed vegetables was only 16%. Volume of the European market11 Total European production of frozen vegetables in 2006 is estimated at 3. frozen.000 81. Vegetable consumption has increased in Central and Eastern Europe since 1999 by more than 50% to EUR 6. among other things. the market shares of fresh-chilled and frozen are increasing faster by comparison with canned vegetables and this is due especially to the interest in freshness that is contributing to both the purchase decision as well as the dramatically changing frozen vegetable production processes through which freshness has been improved.000 2004 736.000 UK 270.000 395.2. 5. especially as a result of the growing interest in ready-touse and demographic changes. as opposed to 25% in 2005.2.2.7.7. which represented an increase of 25% over 1999. as products supplied to the retail sector are sold under a private label or a house brand. Volume of vegetable consumption in Europe10 The value of total consumption of vegetables in Western Europe was estimated in 2005 at EUR 61.000 210.000 10 11 Based on data from Bonduelle annual report and Food for thought Source: OEITFL 5/10/2007. Pinguin owns the Pinguin brand name that is used primarily for supplies to the food service and the food industry. CEE Food Industry 23/02/2006. Vegebe. seeing that both companies are primarily active in the retail and food service segment. Denmark 69. The total market for frozen vegetables in Europe increased over the last two years by 2.000 385.1 billion.000 Sweden. Market description 5. The number of Pinguin’s customers has remained quite stable to increasing over past years. European production of frozen vegetables (in tons) 2006 2005 Belgium 782. In general.Pinguin has customers in 40 countries. to families.2.083 France 413. food industry and the food service sector. Belgium produced 782.330 The Netherlands 109.3% (2006) and 1. The 10 largest customers represent some 41% of sales. the importance of the foodstuffs industry will decrease.7. This share rose sharply over the past two decades (in 1985 the share was 7%).685 411.000 Germany 200. The Pinguin brand is less well-known to retail customers. In general we note a decrease in the share of fresh.085 397. Pinguin 97 .000 Spain 420.1. taking first place among producers.494 tons in 2006. 5.000 284.

This French group is firstly a producer of vegetables in cans and jars (48% of sales in 2005/2006). This trend is confirmed by the 2006 results.6%.000 25. Carrots. After the takeover of Globus in Hungary and Poland.000 tons of frozen vegetables.000 Portugal 72. The Netherlands.000 tons. These players are more likely to be Pinguin’s customers than its competitors. southern Europe (24%). France. fruit and snacks.2.200 Greece 30.000 395. It focuses on the food service market in particular. This Spanish producer is the “private label” market leader in its home market. when production increased by 7. Its annual sales are estimated at 100.200 68. Germany (12%).058.000 Poland 440. Bonduelle France UnifrostDujardin Belgium D’Aucy France Virto D’Arta Spain Belgium DicogelBegro Belgium 12 Source: Vegebe. Spain and Portugal.000 66. Nestlé. Through its two production sites (Ardooie and Moeskroen) it freezes some 90.000 tons. it is also involved in frozen vegetables and vegetable mixes. these are the key groups active in the Western European market: Name Ardo Country Belgium Description This West Flanders group produces frozen vegetables. Germany.004 3.000 tons of frozen vegetables annually.7. Bonduelle and Frosta). company websites 98 . focused on marketing and distribution. vegetable mixes and prepared vegetable meals through two Belgian sites (Ardooie and Bavikhove) and one in Portugal.000 60. and (2) in Hungary.300 Hungary 41.130. Its most important markets are France (42%). vegetable mixes to which sauces and seasoning may be added. d’Aucy is also a major producer of preserves. In addition to its private label. vegetable mixes to which sauces and seasoning may be added.000 Total 3.000 30. d’Aucy sold a volume of 134.000 tons. This West Flanders group produces frozen vegetables. peas and green beans made up the lion’s share of Belgian production.3. Canada (15%).000 30.000 3. This West Flanders group produces frozen vegetables. In order of market share. (4) in Poland. A part of the CECAB group. annual production of frozen vegetables in Belgium has increased every year since 1995. Pinguin.Italy 252. all types of cabbages. There is a group of companies.000 236. 5. Bonduelle sells 360. Denmark. the United Kingdom. Ardo is the absolute market leader with an annual production estimated at 450. Annual tonnage sold is estimated at 180. mostly major multinationals. These companies focus on the family market with brands. Key players in the European frozen vegetable market12 There are two major groups on the supply side of the market.913 Source: OEITFL Market situation 5th conference 20 April 2007 adapted by Pinguin 223.226 Except for 2001 and 2005. It has branches in Belgium. the group is also represented through the “Dujardin” brand. at times in combination with in-house production (former Unilever with brands such as Iglo and Birds Eye.000 445. Then there is a group of companies that primarily present themselves as “manufacturers”. Its annual production is estimated at 130.000 tons. It also has lines of (chilled) fresh vegetables. amounting to 23% of its group sales.016.725 58.000 Austria 30.000 30. Pinguin seeks to position itself as one of the most important European players in this latter group. Ireland. prepared meals and fruit.500 tons in 2006 on the basis of on nine production sites: (3) in France. This West Flanders producer of frozen vegetables is focused in particular on the French and German food service market and food industry.

the house brands have a great influence upon the distributor’s reputation.4. there are some 15 smaller players with capacities ranging between 20.In addition. The second biggest Eastern European producer is the Polish company Hortex. clearly plays an important role here.000 tons. Given the conclusions reached by Pinguin’s management. Tesco. company restaurants and hotels. such as families and the catering and group institutions. Globus produces circa 90. Iglo Birds Eye (former Unilever) was not included in the above ranking. among others. there are also customers that prefer mid-size distributors (AD Delhaize.000 tons. In addition to price differences. according to management’s estimates. schools and universities.2. On the other hand. including Pinguin. such as pet food. 99 . which has an estimated production in Poland of 70. Aldi). There are also some 40 Polish and Hungarian players with annual capacities between 5. Sainsbury) and the hard discounters (Lidl. with sales of about 200. and reliability of service. the food service industry share in food consumption is growing by 5% per annum. Pinguin’s management has identified that wholesalers are seeing the market share for house brands increase at the cost of the market share of branded products. influenced by changes in lifestyles and habits. with brands such as Iglo and Birds Eye (former Unilever) being the absolute market leaders both in frozen vegetables and frozen prepared meals.000 and 20.7. On the one hand there are customers who immediately consume the purchased vegetables. this contributes in large measure to the increasing success of house brands. are the French Bonduelle (with the brand of the same name) and the German Frosta group (with various brands including Frosta). etc. Provided that pricing remains an important factor in food purchases. Within this group of buyers. again according to its own conclusions. pizza. At present. vegetables are sold to the food industry that processes them further as an intermediate product. Pinguin holds third place in the above ranking.000 tons of frozen vegetables and fruit. is between 6% and 7%.). Its market share. a further differentiation can be made between the ordinary supermarkets and the hard discounters. Households via food retail Branded products hold a significant portion of the market for households. Belgian frozen food producers. as a result of which they are paying greater attention to quality and packaging. The trend toward more complete animal feed. while. The growth in this segment of prepared meals (complete meals.000 tons and a production of 150. Delhaize. The food industry primarily attaches importance to price. Other important players.000 and 80. Food service The food service catering segment and the group institutions or industrial kitchens include. have a particularly strong position in this segment.000 tons. through which an ever-decreasing amount of time is devoted to the preparation of meals. 5. Europe’s food consumption is growing at a rate of 1% per annum. restaurants and cafes. is also a supporting factor. with their own branded products aimed at the family market. soup. O’Cool or Picard). This places Pinguin – in terms of sales and capacity – in an estimated third place in Western Europe. Contact GB) or specialized shops (in the case of frozen products. there remains a great deal of growth potential for frozen vegetable products. for which ease of preparation and the price-quality relationship are decisive. The Hungarian company Globus is the biggest player in the Central and Eastern European market. In addition to mass distribution through hyper/supermarkets (Carrefour. hospitals. It produces exclusively for its own brand.000 tons. Customers Producers of frozen vegetables sell their products to three types of customers. Within mid-sized distributors. After getting into financial difficulties. it was taken over by the French group CECAB in early 2006. that supply the market mainly through private labels. quality. Food industry The food industry (human and animal) has shown sharply increased demand for frozen vegetable components. after its regional neighbour Ardo and the French Bonduelle group. clearly depicting the potential of this segment of customers.

AC Nielsen. provided they take large quantities and in so doing create competition among suppliers. market shares vary from 16. Good relationships with suppliers One could say there is an “agricultural peace” between the agricultural unions and the frozen food companies. but also specific know-how and access to the distribution channels. Because most vegetables are harvested in the period between August and November. In order to guarantee product freshness.7. The sales agreements and consequently 13 Source: De Tijd. However. price differences between brands and private labels can be up to 50%. there is demand for frozen vegetables throughout the year and they must be available at all times. Because of a rather homogenous customer demand for vegetables. Euragra. VDI and the assets of Padley Vegetables and Christian Salvesen Foods. Entering the market requires not only large investment and adequate capacity. frozen vegetables are available throughout the year at stable prices. There is also often good cooperation with the farmers on quality management and product traceability. According to research by AC Nielsen13 the market share in Belgium in the frozen food segment for house brands was 49. Within Europe. on the other. Trends The following trends can be distinguished in the frozen vegetables market: High concentration of producers The market is controlled by a relatively small number of major players. such as the increase in single-parent households. the delivered vegetables must be processed and frozen as quickly as possible.7% in Portugal. In general.1%. while the frozen segment is 49. The sector is therefore characterized by the presence of considerable stock. Seasonal sensitivity The frozen vegetable sector is strongly dependent on the supply of vegetables by agriculture sector. depending on the type of product and the country in question. Other sources even speak of market shares in the UK of 72%14 in the area of purchase expenses. On the other hand. fresh vegetables. and. Moreover. In recent years. the increased number of women in the labour market and an increased workload. Brussels 20 April 2007. Favourable developments with respect to substitutes The direct substitutes for frozen vegetables are. The average rate of growth of the private labels varies from 1% in Belgium to 11. A number of socio-demographic trends. With respect to vegetables in cans and jars.5. house brands have a market share of only 20.2. Legum’ Land Surgelés. frozen vegetables have the advantage of being able to be held in portions more easily and that their nutritional value and flavour can be better maintained. European Trends in Vegetable Retail Sales as presented at Conference of European Vegetable Processors. it is not so easy for large customers to suddenly change suppliers with respect to these large volumes. 31/08/2007. Capacity therefore must also be adjusted to the seasonal flow.5. Pinguin has actively participated in this trend toward concentration through its takeovers. Relatively high barriers to entry Existing companies within the frozen vegetables sector can enjoy a high structural accession threshold that deters potential entrants. The relatively strong position of private labels Private labels represent a significant market share within the frozen foods sector. vegetables from can and jar. on the one hand. in particular the acquisitions of Fisher Frozen Foods. production reaches its peak around this time. which contributes to that concentration.1%). a similar product line can be offered in various countries.2% in Austria to 56% in Denmark. 14 TNS Worldpanel 2006 as per Salvesen Dataroom 100 . the aging of the population. lead to ever fewer family meals and people having less time to cook elaborately with fresh vegetables.1% in 2006. Frozen products is the product category in which house brands in Belgium have the largest market share (example: in sweets and confectionery. Great power of the customers The frozen foods companies’ direct customers wield great power.

Sustainable agriculture concentrates in particular upon the environment and working conditions. The rapid development of the organic market stagnated somewhat in recent years and “organic” has a number of disadvantages in comparison to standard vegetables. Pinguin has once again seen a positive demand in recent years and remains convinced that this niche market will develop sufficiently.sustainable agriculture. The Lutosa Group grew organically and its production rose over the last decade from 150. Over the years.3. Through sustainable agriculture one seeks to approach the present yields of normal agriculture while using minimum input from outside the farm.the quantities available for the upcoming year are usually fixed for most producers. 5. LUTOSA -POTATO SPECIALIST Product line Lutosa was founded in 1978 by the Van den Broeke family. so that the company was able to respond to new market trends. 5.1. There continues to be growing interest in switching to an alternative agricultural system . investing significantly in its production and storage facilities. and health. The small and non-uniform lots and the fact that production is not continuous are causes of low productivity and higher production costs. and it will continue to play a pioneering role in this segment by offering a sufficiently large supply that meets the consumers price and quality expectations. The organic frozen vegetable niche The organic frozen vegetable niche market has not fulfilled past high expectations entirely. such as pesticides. such as tailor-made products and factors such as ready-to-use. Lutosa’s sales are generated nearly exclusively through the sale of self-produced potato products. Lutosa has systematically extended its product line from pre-cooked deep-frozen French fries and dehydrated/dried potato flakes to frozen and chilled potato products with a higher added value.000 tons to 287. Lutosa expanded its product offer through internal and external growth. and by setting up sales offices both in Europe and far beyond. so that suppliers can only be changed in a case of oversupply on the part of a producer in the middle of a year. freshness. Lutosa’s product line includes the following product categories: Figure 7: Sales per product category 2006 (Calendar year) Potato flakes 8% Chilled French fries 12% Organic products 1% Frozen French fries 55% Frozen potato specialities 24% Source: Lutosa Since the 1980s.000 tons in 2006.3. artificial fertilizer and energy. This family has been active in the potato sector since 1935. 101 .

These products were produced using the Agria variety of potato. The industrial applications are more varied. including gratin dauphinois or vegetables au gratin. The products were pre-cooked using high quality organic sunflower oil. The chilled French fries packed in vacuum packaging can be stored at temperatures between 0°C and +4°C for three weeks. Diversification and quality are particularly valued by the food service industry while large and smaller retailers base their purchase decisions in particular on the purchase price or brand name rather than on quality. cut. Organic pre-cooked deep-frozen French fries and potato specialities Lutosa added a line of organic products in 2000 to meet the increasing consumer demand for organic products. Other products Lutosa expanded its product offer in 2006 with pasteurized potato products and organic frozen vegetables. grown without pesticides or chemical fertilizers and processed as soon as they are harvested. Lutosa differentiates itself from its competitors with respect to quality and the diversification of its product line. Chilled French fries The product line was expanded in the late 1990s with pre-cooked chilled French fries. − Potato specialities based on mashed potatoes including Pom’Pin. potato strips.600 tons of fresh-chilled French fries. The deep-frozen French fries made up 55% of these sales in 2006. Lutosa has become one of the important players in this segment in Western Europe.000 tons of organic products. including potato cubes. soups and so on. − Crumbed products. − Specialities for children. 102 . both in terms of production capacity as well as sales volume. The organic products were sold at a premium by comparison with normal deep-frozen French fries. in particular potato flakes. These products were produced between late August and early September on production lines temporarily used exclusively for the production of organic products to avoid cross-contamination. storage and preparation. and include biscuits. These products offered the advantage that they were quicker to prepare and required less energy. and the Fast Food industry. Deep-frozen French fries In 2006 Lutosa sold 173. Lutosa is one of Europe’s major producers of potato flakes.000 tons of deep-frozen. and realized a total turnover of EUR 183 million. potato croquettes. These products were sold exclusively to the food service segment. Lutosa offers a broad range of pre-cooked deep-frozen French fries. Lutosa also makes dehydrated potato products. This product category chiefly includes: − Potato specialities based on cut potatoes. oven croquettes and mini croquettes. Potato flakes In addition to frozen and chilled potato products. In 2006 Lutosa sold 37. Frozen potato specialities Lutosa has produced and sold frozen potato specialities since 1981. − Mashed potatoes including frozen Bintje mashed potatoes and “Gourmande” mashed potatoes. The deep-frozen French fries are sold to the food service industry.000 tons of pre-cooked deep-frozen French fries. In very short time.In 2006 Lutosa sold 284. − Potato specialities based on grated potatoes. meaning that this remains the company’s core activity. The chilled French fries made up 12% of sales in 2006. since they need not be frozen. including Hash Browns and Röstis. dehydrated and chilled potato products. wedges. retail (whether specialized or not).000 tons. The deep-frozen potato specialities made up 24% of the sales in 2006. In 2006 Lutosa sold 2. No additives were used in the production process. the flakes are used chiefly to prepare instant puree. Lutosa has a great deal of experience in the production and sale of deep-frozen French fries. With an annual production capacity of 20. length and colour. These products vary in form. These products were differentiated primarily by ease of use. The intention was to strengthen relations with existing customers and to offer a “one stop shopping” concept to new customers. gnocchi. In commercial and institutional catering.

As is depicted in figure 8.2. specialities. the volume of potatoes processed by Lutosa increased from 493. Purchasing The purchase. The production process then goes through the following phases: 103 .3.000 tons in 2006.000 300. selection. Production process Production process for frozen pre-cooked French fries Upon arrival.352 493.777 538. The potatoes are washed in running water and the stones are removed.123 524. Thanks to its long experience as a potato wholesaler.5.3. Figure 8: Potato processing: Lutosa (in tons) 700. other types of potatoes are also processed and tested. the Netherlands and France.000 100.794 592.000 tons of potatoes – about 17% of the quantity needed – Lutosa succeeded in working out a purchasing strategy that absorbs some price volatility and guarantees a high quality supply of raw materials throughout the entire year. Potatoes are also purchased in the Netherlands. They then go to the sorting centre. France and Germany.000 516. Potato prices are closely linked to harvest conditions (largely the weather conditions during the growing and harvesting seasons). flakes.000 400. This potato variety is grown chiefly in Belgium. the potatoes first go to the agricultural (agronomic) service that inspects them. 5. Innovator.107 600.000 200. Asterix and Fontane varieties for making food service and Fast Food French fries. Lutosa used the Agria variety for processing in its organic products.3.3.000 tons in 2001 to 597.000 0 2001 2002 2003 2004 2005 2006 Source: Lutosa While the Bintje variety is used for the most part. which makes Lutosa by far the largest potato processor in Belgium. Lutosa obtains its raw materials from the Belgian provinces of Flanders and Henegouwen in particular. and storage of potatoes is a very important element in the realization of Lutosa’s strategy. Having access to the best quality raw materials is the basis for the production of high quality end products.153 500. Mainly (about 80%). combined with a strong network of local farmers. its large purchasing power and its large on-site storage facilities that can hold up to 100. About 85% of the product that Lutosa used for production is cultivated in Belgium.1.000 597. Lutosa uses the Bintje variety which distinguishes itself by its fine yellow flesh that is ideal for processing by freezing or for dried products and results in a good taste experience. and the Russet Burbank.3. where they are graded and sorted in order to reserve the most appropriate quality and sizes for each type of production: French fries. which means potato spot prices fluctuate widely over time. Production process and facilities 5.

Wrapping . 104 . Damaged potatoes or foreign objects can be removed by using compressed air.. This: . foliage. − an automatic box filler. 4) Blanching Blanching is done in a hot water bath with steam injection. Bad products are immediately removed from the production line using compressed air.1) Peeling – washing – first optical sorting The potatoes are peeled using steam (the peeler loosens the peel which then is removed by brushes). and . wrapped in plastic film and labelled. The products are weighed once again before being packaged. 2) Cutting . The French fries are packaged in polyethylene bags. 7) Cooking .Labelling The pallets are then built up. . the French fries are then degreased with hot air or hot water.makes the colour uniform through the extraction of reducing sugars. dry air to limit fat absorption and improve crunchiness. − an automatic filler.Homogenization The French fries are then dried in a stream of hot. the products undergo a final laser inspection and are sized for a last time to guarantee that they are correct in every way.sizing The tubers are then cut. They are then sized by thickness and length. This step includes a cooling period for the homogenization of the remaining moisture within the product.changes the structure through the partial freezing of the starch.Flavouring This phase is optional: the products are plunged into a starch solution with or without seasoning to create such products as the Spicy Wedges or coated French fries.Weighing Before being packaged. the peeled potatoes are checked for subsurface defects and foreign matter such as splinters. which are powerful pumps that thrust the potato at high speed against a grill which has openings of the size desired. 9) Third optical inspection – Final sizing .Degreasing The French fries are cooked for between 60 and 90 seconds in non-hydrogenated vegetable oil without GMOs at a temperature of between 160°C to 170°C. 3) Second optical sorting The French fries. 6) Coating. slices or cubes are examined by cameras that are able determine the sequence of removal as soon as they detect suspicious spots (black dots).Freezing The French fries then pass through successive chill zones until they reach a temperature of 0°C. − a high definition inkjet printer. At the subsequent optical laser sorting. 8) Chilling . these are placed automatically in cartons of recyclable cardboard. or into slices or cubes using rotating cutters. Sorting is done automatically with an optical sorter fitted with cameras and a laser system. − a metal detector. A barcode is applied to each pallet so that it can be traced automatically through scanning. Then they pass through a freezer tunnel at -40°C that freezes the product to -18°C. Any French fries that do not meet the desired thickness or length are eliminated. The peels are used as animal feed. 5) Drying. 11) Palletizing . Each line can package the full range of weights (from 400 g to 5 kg). − a detection system to remove incorrectly sealed bags. − a weight control system (pouch and carton). Each package line has: − a multi-head weighing apparatus.deactivates the enzymes. either into French fries using water knives. 10) Packaging Packaging is fully automated. Then they are washed in water. etc. is removed.

12) Storage of finished products The pallets of finished products are then stored in freezers at a temperature of -20°C. Production process for potato specialities The production process is the same as that for French fries, from storing to blanching and chilling. After that, they follow these steps: 1) Cooking: after chilling, the optically rejected French fries are steam cooked and ground to a puree 2) Chilling and freezing: the puree passes through the freezer tunnel 3) Shaping: the puree is seasoned/shaped as required (croquettes, nuts, duchesse, etc.) 4) Cooking: The shaped potatoes are cooked using one of two different methods: - in vegetable oil (palm oil or sunflower oil) for 60 and 90 seconds at a temperature ranging from 160°C to 170°C, after which the fat is removed using hot air or hot water; or - in a tunnel oven on natural gas. After that, the process continues as for French fries. Production process for potato flakes Once the steps for cutting and cooking are completed, the potatoes go through a puree press. Ingredients to improve colour, stability and preservation are added there. The puree is then distributed on chrome-plated drying rollers through which steam is passed. It is then dried and then spread out into a uniform thin layer to achieve the density desired. Any impurities (any that did not adhere to the drum) are eliminated by an Archimedes screw. Control of roller speed and steam pressure yields potato flakes of exceptional quality. The dehydrated potato layer goes into a drying drum where the layer is cut and flaked to reach the final product, potato flakes. The product is visually inspected with an optical camera to remove any remaining impurities. Microflakes can be made through additional cutting. Packaging the flakes is done fully automatically. The flakes are packed in bags of between 1 to 25 kg. There are also big bags up to 1,100 kg. The flakes are stacked on pallets at room temperature in dry storage. 5.3.3.2. Production facilities Lutosa has three production sites at two locations in Belgium. A first production site is located in Leuze-en-Hainaut and has a total production area of 21 hectar 50a, of which 110,000 m² contains buildings. The site is easily accessible and is divided into storage space for raw materials, production buildings, office buildings, and storage for finished product. Most of Lutosa’s storage space is found on this site. The production buildings have 8 lines for the production of frozen products: three production lines for deep-frozen French fries and five for frozen potato specialities. The production buildings also provide space for six dehydration drums for the production of potato flakes. Each production building is fitted with a separate packaging unit that can package the full range of weights from 400 grams to 5 kg. There are 33 packaging lines in total. A second production site is located in Sint-Eloois-Vijve (Waregem), consisting of a total area of 6 hectar 48a of which 35,000 m² contains buildings. There are two production sites at this location. The first production site has one production line for deep-frozen French fries, which is used chiefly for production of “private label” deep-frozen French fries and has three dehydration drums for the production of potato flakes. The second production site at this location has one production line that processes potatoes into fresh-chilled French fries. Lutosa has a total production capacity of 325,000 tons of finished products, 88% of which was used in 2006. The storage spaces for raw materials are fitted with the latest technology, such as automatic temperature and climate control.

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5.3.4.

Quality

Lutosa attaches a great deal of importance to quality. Its customers appreciate the constant focus on high quality raw materials and finished product. Lutosa holds a number of certificates, including the following: − All production sites (except for the Primeur potato flake section) have been granted “British Retail Consortium” and IFS (International Food Standard) certification; − All production sites hold an ISO 9001 certificate; − The laboratory at the Leuze site is Standard ISO 17025 accredited. This accreditation is an important element of quality management; − Various production lines at the Leuze site hold the Biogarantie (guaranteed organic) certificate. Lutosa also holds a JAS (Japanese Agricultural Standard) certificate for organic products. Lutosa was also granted the “soil association label” for the United Kingdom and the “Naturland” label for Germany for organic products. Finally, Lutosa can also produce kosher products. Each production site has its own quality laboratory. During the production process, production samples are regularly examined for their physical, chemical, and bacteriological properties. Furthermore, the raw materials are subjected to strict quality control. 5.3.5. Sales organization

The Lutosa sales organization comprises: − A sales organization for frozen potato products and potato flakes: Lutosa’s frozen potato products are presently sold in 70 countries. The international sales organization consists largely of the company’s own sales teams, supplemented to only a limited degree by cooperative agreements with local agents. There are more than 50 employees active in the sales organization. This strong internationalization is also evidenced by the opening of sales offices in Japan and China to serve these markets. Potato flakes are sold in over 10 countries; and − A sales organization for chilled and pasteurized potato products: chilled and pasteurized potato products are served by a separate, internal sales service. However, both at home and abroad, these products are sold through commercial staff that sells frozen potato products. The chilled products are today sold from Belgium in 6 European countries. Given the product characteristics (short shelf-life), the neighbouring countries are the main targets. In past years, however, Lutosa has also had success in South European markets. While Lutosa is a Belgian producer, more than 90% of its production is exported. The most important market remains Europe, but exports beyond Europe are growing. Recent years Lutosa has seen a strong internationalization of the sales of frozen potato products. Since 2002, the share of the ‘historic home markets’ (United Kingdom, France and Benelux) for the sale of frozen potato products has dropped from 75% to 54%.

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Figure 9: Sales 2006 – Geographic distribution of Lutosa sales
South America 3.3% Asia 3.8% Other Countries 6.0% France 26.3%

Scandinavian countries 0.9% Greece 3.1% Italy 8.8% Germany 6.1%

Spain, Portugal, Canary Islands 11.5%

UK 19.1% Benelux 11.3%

Source: Lutosa Lutosa’s biggest markets are France, the United Kingdom, Ireland, Spain, Portugal, the Canary Islands, the Benelux, Italy and Germany. These countries represent more than 80% of total sales expressed in value. Lutosa has been present in these countries for decades now, and is considered to be among the market leaders in the food service, food industry as well as the retail sectors. In addition to continuous growth in the European markets, Lutosa has explored active opportunities in new markets. Lutosa has moved to the attractive and rapidly growing markets in Asia, South America and Africa. 5.3.6. Customer portfolio

Over the years, Lutosa has built up a customer base of more than 1,000 customers that is extensive and diversified both in terms of customer type as well as geographic distribution. The portfolio is balanced among various categories to prevent Lutosa being dependent on a single category of customer. For reasons of profitability, in past years the retail sector was reduced in favour of the food service sector. Lutosa’s customer profile is highly diversified and can be divided among the following categories: − Retail: Hypermarkets and supermarkets: Lutosa sells both under its own brand as well as under “private label”. It also sells through specialized frozen food retailers such as Picard and O’Cool; − Food service: Lutosa sells its products both to commercial and institutional catering services; − The food industry (producers of ready-to-eat meals, pasta products, baked goods, etc. ); and − Fast Food.

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Figure 10: Sales for calendar year 2006 per customer type

Fast Food 4%

Food industry 8%

Retail 30%

Food service 58%

Source: Lutosa Note: Percentages based on volume sold Its largest 10 customers represent 16.6% of sales for the 2006 financial year (Jan-Dec). 5.3.7. Description of the market

5.3.7.1. Size of the international market for frozen potato products Worldwide production of frozen potato products is estimated by Lutosa’s management15 at more than 10 million tons, with the United States and Canada as the largest producers. Their total production is estimated at 5.0 million tons. The US and Canada are followed by The Netherlands, with an estimated total production of approximately 1.4 million tons, and Belgium at 1 million tons. The worldwide production of frozen potato products is dominated by Canadian and North American companies (McCain, Lamb Weston and Simplot) that account for about 60% of total production. After these companies, Aviko, Farm Frites and Lutosa are among the leading producers of French fries. The growth in worldwide consumption of frozen potato products was driven, among other factors, by the global expansion of quick service restaurants (QSR’s) over the last decades. In recent years, the most important consumer markets for frozen potato products (the US, Canada, Western Europe and Japan) have gradually become saturated (partly explained by the slower growth of QSR’s). Although the US, Canada, Western Europe and Japan clearly remain the key markets for frozen potato products, the countries with greatest growth potential for frozen potato products are likely those countries in which the presence of QSR’s is still limited. Asia and South America in particular are experiencing strong economic growth. On a world scale, Lutosa represents about 3% of total production and thus occupies a place in the Top 10 producers worldwide. The annual volume can vary from year to year as a result of availability and the price of potatoes. 5.3.7.2. Size of the European market for frozen potato products in terms of consumption and production

15

Based on information from UIETP, USDA Foreign Agricultural Service, trade publications

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European consumption16 of frozen potato products is estimated at EUR 2.7 billion (at producer prices) in 2005 and has seen historic growth averaging more than 3% per annum, whereby: − The United Kingdom, France, the Scandinavian countries, the Netherlands, Spain and Germany are the largest markets; and − The total share of deep-frozen French fries is estimated at approximately 75%. Innovation is also a key driver for demand for potato specialities that distinguish themselves through flavour, form, ease of use and the like. Through its channels, Lutosa supplies approximately 6% of total European consumption. In the coming years, a sharp growth is expected by Lutosa management, especially in South and Eastern European countries. Lutosa is also active in these markets. At the European level, the production of frozen potato products occurs chiefly in the Benelux region: − The leading players are found in the Netherlands, including Aviko, Lamb-Weston Meijer, Farm Frites and McCain; and − In the Belgian market, where Lutosa is far and away the market leader, there are a number of other important players operating (such as Clarebout, Mydibel, Eurofreez, Agristo, Ecofrost, Willequet and Gerona) of which most remain in family hands. Lutosa clearly distinguishes itself from other Belgian players in terms of production volume, customer portfolio and geographic reach. 5.3.7.3. The non-European market for frozen potato products in terms of consumption and production In years past, interest by overseas markets such as Asia, South America and Africa in the Western lifestyle has grown due to increasing purchasing power and tourism. The demand for variety in diet and significant population increases have seen to it that demand for frozen potato products has increased significantly in the last years. While this considerable growth in demand has been largely met by local production, it has also seen a significant rise in demand for European producers. Lutosa’s management expects that in the future there will be significant potential to develop these markets further and also hopes to maintain its strategy to further develop its existing international sales organization. 5.3.7.4. Market for chilled potato products In years past, demand for chilled potato products has increased considerably due to out-of-home consumption and the number of restaurants in Europe. These restaurants wanted a product that was easy to store, use, and prepare. The fresh-chilled French fry met these customer requirements. Given the product’s limited shelf-life, which means that the product cannot travel very far, this is a much more local market than that for frozen products. Lutosa is one of the market leaders in Western Europe, along with Aviko, Mydibel and Farm Frites. The market contains a number of significant opportunities for Lutosa, given that: − Management expects further increase in demand; − The product line can be expanded with potato specialities; − In the past, Lutosa’s management elected not to be active in the chilled retail segment, given the opinion that the total market was still too small to make it profitable. However, Lutosa’s management has been closely following developments in this sector, opting to become active in it if it is deemed to be a profitable course of action. 5.3.7.5. Trends The market for (frozen) potato products has been characterized by a number of trends that are comparable, in part, to the market for frozen vegetables. On the supply side: − High concentration of producers: Production is dominated by large Canadian, American, Dutch or Belgian groups. Over the past decades, the market has been consolidating through takeovers or cooperative agreements;
16

Source: Based on the Datamonitor database concerning ‘Europe frozen potato products’

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110 . − Relatively high barriers to entry (in terms of production technology and contacts with suppliers and customers) reduce the opportunity for newcomers to become active in potato processing.Good relationships with suppliers: There is a general “agricultural peace” between the agricultural unions and the frozen food companies. and on the other. The sharp drop in employment at Pinguin Foods UK is due.4. Potato division At the close of 2006 Lutosa employed 589 people at its three production sites in Belgium and 30 people in the foreign sales offices or trading companies. begun in January 2004. on the one hand. − The European market for food products is generally characterized by growing demand for convenience.4.1. Pinguin Foods UK has completed a restructuring at its Boston site (formerly Padley Vegetables) where there are now only 90 people employed. − Fluctuations on price level and of availability of raw materials. In addition to its permanent workforce. There is often good cooperation with farmers on quality management and tracing of products. EMPLOYEES Vegetable division At the close of June 2007 Pinguin employed 813 people. 5. The table below depicts the average annual employment in full time equivalents. 5. especially in the months from September to November. the table above incorporates in 30/06/2007 – next to the contractual empoyees – ‘seasonal and temporary’ employees (accounted for in the line item ‘seasonal and temporary’ in 30/06/2005 and 30/06/2006). 2004 and 2005 resulted in a sharp drop in employment at these locations. however.4. The retrenchment in staff at Pinguin Aquitaine under its redundancy plan. vary widely from day to day in accordance with the season and supply. Pinguin frequently works with seasonal and temporary workers in order to absorb production peaks. The number of employees can.2. to the dismissal of 40 employees. − 5. making it more difficult to switch. The table below reflects average employment for the year in full time equivalents. innovative and/or healthy products. to a significant reduction in the hours worked by seasonal labour. For Pinguin Aquitaine. to handle the intake and storage of potatoes. On the demand side: − Significant power among buyers is the result of consolidation in both retail and food service industries. This trend is also detectable for potato products. The total number of employees (contractual employees and ‘seasonal and temporary’ employees) decreases in 30/06/2007. Lutosa calls on temporary workers during the peaks. This consolidation also leads to required volumes and the product and logistics demands increase per customer. 30/06/2005 Pinguin Westrozebeke Pinguin Langemark 240 127 30/06/2006 248 113 30/06/2007 242 108 Pinguin Salads Pinguin Foods UK Pinguin Foods UK Boston Pinguin Aquitaine Pinguin Germany MAC Seasonal and temporary Total 16 201 18 3 2 57 666 18 2 1 149 617 84 95 189 28 2 1 146 811 The restructuring of Pinguin Aquitaine and Pinguin Foods UK in 2003.

3. − The Group Product Supply Manager.4. 111 . is responsible for the total supply and management of convenience products as well as packaging. − The Group Product Supply Manager. Each country is under the leadership of an Operations manager/director who. “Convenience”. The CEO is the Managing Director and provides overall leadership as well as being responsible for all commercial activities. Managers who are responsible within the various specialities for one country or location support the operations managers in turn. is responsible for the total supply and management of fresh vegetables. The COO is responsible for all operational activities in the various locations. − The Logistics Manager is responsible for internal and external storage facilities as well as transport management. supported by group management. − The Group Controller and Consolidation Manager is responsible for reporting and the compliance of the various entities as well as for cost price calculations. Management: Pinguin Pinguin has a horizontal group structure in which local autonomy is supported by a number of services at the group level: − The IT Manager is responsible for all IT activities and ERP implementation.Van den Broeke – Lutosa (Leuze) Primeur frozen (Sint-Eloois-Vijve) Vanelo fresh (Sint-Eloois-Vijve) Seasonal and temporary Total 31/12/2004 391 90 51 25 557 31/12/2005 402 89 55 36 582 31/12/2006 424 90 59 32 605 5. The CFO is responsible for all financial/administrative management in the various locations. as well as for the most important supply chain projects. − The Group Quality Manager is responsible for the quality of all products. “Vegetables”. is responsible for the daily leadership of the location.

Pinguin-Lutosa Herwig Dejonghe. except for fresh French fries.5. a Technical Executive Manager. with the exception of a number of companies in which they are supported by executive managers who report directly to them. an HR Executive Manager. an HR Executive Manager and a General Service & Safety Executive Manager. as shareholder and executive director. 5. Herwig Dejonghe will continue to provide leadership for the Pinguin division as well as general leadership of the group. − The Technical Executive Manager is responsible for the purchase and management of spare parts. each of whom is an expert in his area of specialization. At Leuze there is also a Production & Environmental Executive Manager. supports the executive directors: − The Finance and Administration Executive Manager is responsible for accounting. the main raw material. Management: Lutosa Mr. In addition to group management. there are also a number of executive managers responsible for a site. − The Agronomics Executive Manager is responsible for everything involving potatoes.4.4. − The Cost Account Executive Manager is responsible for the cost price calculation of the various products and lines. At the Sint-Eloois-Vijve site.4. Guy Van den Broeke and Steven D’haene will provide leadership of the new group. − The Sales Marketing and Logistics Executive Manager is responsible for all sales of the group. Both Lutosa and Pinguin will continue to have sufficient operational autonomy: − Guy Van den Broeke will continue to provide leadership for the Lutosa division. Luc Van den Broeke. provide total day-to-day management of the Lutosa group.5. − The Quality Assurance and R&D Executive Manager is responsible for the quality of all products of the group. Guy and Mr. A team of executive managers. − Mr. a Safety Executive Manager and a Commercial and Logistics Executive Manager who is also responsible for the sales of fresh-chilled French fries. a Quality Executive Manager. there is a Production Executive Manager. administration and the tax department. 112 .

Through its passion for quality vegetables. Pinguin is perfectly placed for this. Motivated. − Commercial approach: both Pinguin and Lutosa have extensive customer portfolios in which the products offered are complementary. Our frozen vegetables are also the answer for groups and caterers who want to provide stable quality all year round. Guy Van den Broeke will be nominated as a director at the General Meeting. together with high-tech equipment. frozen vegetables and frozen potato products are complementary. The integration of new branches is geared towards further increasing the efficiency of the whole. Moreover. − Lutosa also wants to increase its name-recognition and to develop in such a way that its branded products fulfil customer demand.− − − − Steven D’haene. Pinguin will continue to play a pioneering role in the future and. every consumer can place a delicious and high-value meal on the table in next to no time at all. using a well-planned acquisition strategy Pinguin acquires the necessary critical volumes that allows it to satisfy customer demand in the most efficient and profitable manner. − Lutosa wants to build strong and long-lasting relationships with its suppliers. − Efficiency: Continuous investment is being made in the best performing and most innovative machines and equipment. well-trained people who guarantee control of the freshness and quality of raw materials as well as all quality controls throughout the entire production process form. synergies with respect to management (of investment programs) and maintenance of the production equipment are possible. will provide leadership for all the financial and administrative management of the new group. as Chief Financial Officer. food service as well as food retail customers. As a leading European vegetable and potato specialist. Herwig Dejonghe is the Managing Director through his management company. through constant innovation and development. − Innovation: Pinguin offers its customers a total solution. which can lead to faster growth in sales than is the case 113 . the basis for the highly valued Pinguin stamp: “Appellation Pinguin Contrôlée”. quality and efficiency: − Internationalization: Pinguin develops the ideal vegetable solution for and together with its customers for every requirement. With Pinguin frozen vegetables. a rich range of regional vegetables can be offered. customers and employees. Like Pinguin. Through the geographic distribution of Pinguin’s locations and cooperative agreements with producers worldwide. Lutosa always takes its strategic objectives into account in all its activities: − In the continuous improvement of its products. Vijverbos NV. Pinguin’s and Lutosa’s products can be sold through existing Pinguin and Lutosa channels. Pinguin’s third important strategic pillar. 5. − Exchange of knowhow and best practices: while vegetables and potato products are produced in different production lines. quality comes first in each activity. always keeping in mind its effect on the environment and employees. STRATEGY Pinguin’s strategy rests on four important pillars: internationalization. procedure and investment. Lutosa attaches great importance to quality management. innovation. for food industry. recent product developments often combine vegetables and potatoes. training and technology in order to guarantee our customers optimum quality. occupies the primary place in all the organization’s sections. − Quality: Continuous quality management. Along with its own commercial efforts. − Lutosa strives for profitable growth based on high quality and innovative products in which the relationship between the organisation and its environment is important. products are developed and offered to enable them to react to rapidly changing consumer behaviour. Pinguin endeavours to maintain its leading place and to remain successful through paying constant attention to improving and increasing efficiency. and that correspond perfectly to new culinary trends and today’s styles in food consumption. The corporate Pinguin-Lutosa team will report to the Board of Directors of Pinguin NV.5. offer frozen vegetables as examples of a healthy and delicious food component. Pinguin is convinced that the combination with Lutosa will result in the following synergies: − Expansion of the product line: from the customer’s perspective. There is constant investment in people. both in terms of its products and its employees. The industry relies on our high value and consistent quality for further processing into a wide range of end products.

joint . Agronomy and purchasing: Pinguin and Lutosa both process cultivated products that are purchased largely from Belgian farmers. Product complementarities will allow for international growth to be speeded up. The wider product line will also permit a better distribution of commercial. Quality: Lutosa has a very strong image as a provider of potato solutions and Pinguin is known as the vegetable specialist. and to achieve critical mass as well as spreading initial investments across greater sales.customers. two companies that satisfy the high demands and expectations of our . International expansion: Pinguin and Lutosa are both active worldwide. The combination of the cultivated products will guarantee future supply and also strengthen recurrent contacts with the farmer. In the same way. given the broader range of products.− − − when customers are approached separately. 114 . logistics and marketing expenses. it should be easier in the future to penetrate new markets.

115 . This ‘discussion and analysis of the financial situation and the operating result by the management’ must also be read in conjunction with the matters described in the part entitled “Risk factors”. excluding the acquisition of the Lutosa Group. The following consolidated financial statements are discussed in this chapter and have been prepared in accordance with International Financial Reporting Standards (IFRS): − Audited consolidated balance sheet and income statement of Pinguin NV as at 30 June 2005. including the acquisition of the Lutosa Group as if it had taken place on 1 January 2007. income statement and notes of Pinguin NV as at 30 June 2006. − Pro forma consolidated income statement. − Audited consolidated balance sheet.1 The following discussion and analysis must be read in conjunction with (i) the section entitled “financial information” and (ii) the company’s audited consolidated financial statements with accompanying notes. excluding the acquisition of the Lutosa Group. Further information on the assumptions used in the preparation of the pro forma financial information can be found in Chapter 7: “Financial Information”. excluding the acquisition of the Lutosa Group. − Pro forma consolidated income statement. In the context of the acquisition of the Lutosa Group. income statement and notes of Pinguin NV as at 30 June 2007. − Audited consolidated balance sheet. the company has prepared pro forma consolidated financial information for the period from 1 January 2006 to 31 December 2006 (12 months) and for the period from 1 January 2007 to 30 June 2007 (six months).6. including the acquisition of the Lutosa Group as if it had taken place on 1 January 2006. balance sheet and notes of Pinguin NV for the calendar year to 31 December 2006. Certain statements in this section contain “forward-looking statements” and must be read in conjunction with the disclaimer entitled “forward-looking information”. DISCUSSION AND ANALYSIS OF THE FINANCIAL SITUATION AND OPERATING RESULT BY THE MANAGEMENT INCOME STATEMENT AND BALANCE SHEET OF PINGUIN 6. balance sheet and notes of Pinguin NV for the first half of 2007 as at 30 June 2007. which are included elsewhere in this Prospectus.

868 32 147.900 6.252 -1.441 -19.94% 0.020 -6.63% 13.847 -5.032 526 6. Year ending 30 June (in thousands of EUR) CONTINUED OPERATIONS Sales Increase/decrease in inventory Negative goodwill recognised in income statement Other operating income Raw materials.096 4.62% 7.54% 0.900 -17.69% n/m n/m n/m n/m 2.455 12.10% 18.703 10.628 -799 -2.950 -609 -2. Consequently.23% 9. The percentage of sales increase achieved between the 2004/2005 116 . since everything is within the frozen vegetable segment.683 -83. The business segment reporting will include a breakdown between the frozen vegetable segment and the potato segment.463 -1.70% 286 -5.591 -22.00% n/m n/m -95.455 30/06/2007 Growth (%) 30/06/2006 Growth (%) 30/06/2005 121.732 -4.35% -100.183 -1.02% 10.22% n/m 12.01% -12.110 -82.624 925 0.1.514 -24.986 8.61% n/m n/m 110.75% 725 -3. consumables and goods for resale Gross profit Margin Services and other goods Personnel costs Depreciation and amortization Reversal of impairment losses on assets Impairments.559 207.058 -1.1.523 8.6.1 million.14% -4.93% 4.878 96. 30 June 2006 and 30 June 2007 of Pinguin NV in accordance with IFRS.21% 66.506 -8. in which consolidated sales amounted to EUR 149.242 5.22% 2.586 1.00% 147.188 -948 -1.14% -35.90% 66. Pinguin recorded consolidated sales of EUR 147.441 6.62% 44.00% -100. write-offs and provisions Other operating charges Operating result (EBIT) Margin EBITDA Margin Financial income Financial expenses Operating result after net finance costs Taxes NET RESULT FROM CONTINUED OPERATIONS Margin DISCONTINUED OPERATIONS Total result from discontinued operations NET RESULT OF THE GROUP Share of the Group Minority interests 6. the Group has hitherto opted for geographically based segment reporting.695 47.59% 2.558 -5.22% -426.1.80% -410 -410 -7.68% n/m -90.742 887 -86 -1.065 8.15% -0.86% 1037.061 77.546 653 n/m n/m n/m n/m 24. In the full financial year 2006/2007.893 -3.748 7. This represents a slight decrease of 1.755 -1.71% -334 -334 -2.2 million.586 4.72% 880 -3.283 6.235 -1.1.54% 149. Sales The sales of the Pinguin Group consist of products which are all within the frozen vegetable segment.2% compared to the 2005/2006 financial year.98% 3. Income statement of Pinguin NV The table below contains the consolidated income statements for the financial years to 30 June 2005.834 0.55% -38.968 -81. The intention is that following the acquisition of the Lutosa Group business segment reporting will be used in addition to the geographical segmentation.179 1.175 -921 -7.10% -1.68% -35.070 75.65% n/m n/m 45.67% n/m 4.07% 1.1.

147 4.254 29.010 30. The importance of sales in the UK decreased dramatically during the 2006/2007 financial year.85% 30/06/2005 18.2%.371 21. A description of the impact of this transaction on the consolidated income statement and balance sheet can be found in section 6.058 100% 147.255 13.965 55.05% 14.252 100.492 4.547 19.776 29.459 21.640 116.42% 2.00% Pinguin sells its products in more than 40 countries.42% 18. This decrease was largely offset by the higher selling prices and the increase in sales volumes in Belgium.88% 37.3 of this Prospectus.10% 30/06/2006 19.456 172.52% 20.263 9.5 million through its British subsidiary Pinguin Foods UK.810 17.225 72.290 26.737 30/06/2006 32. the changes in the relative importance of the various countries from one year to the next are explained by changes in the customer portfolio. it was decided to reduce the unprofitable customers following the restructuring in the UK in the previous financial year.26% 13.505 21.693 59. As a result of supply problems.5 million.354 112. The additional turnover resulting from this acquisition in the 2006/2007 financial year amounted to EUR 3.and 2005/2006 financial years amounted to 1. the management opted for a margin strategy rather than the previous volume strategy.975 18.811 115. These activities are therefore included in the consolidation for one month.567 16.756 24.739 27.531 20. Hence there is no difference between the current level of sales (2006/2007 financial year) and the level two years ago. The decrease in sales was due to lower sales volumes in the UK and the loss of custom work for third parties in the UK.36% 1.14% 38.004 33. Geographic sales breakdown: Sales (in thousands of EUR) Belgium UK France Germany Other EU countries Other 30/06/2007 23.512 188.830 12.92% Total sales 147.149 % top 5 in total 62% 60% 65% 117 .996 19. the majority of sales continue to be made in Belgium and neighbouring countries. On 1 June 2007 Pinguin acquired the activities of Padleys Vegetables Ltd for the sum of EUR 1.015 21.253 12.75% 16.242 100% 149.48% 15.63% 14.591 57.695 30/06/2005 27. Nevertheless.972 191.204 23.01% 32.36% 3. The importance of the UK is set to increase in the future. In addition.44% 14. as sale contracts have to be renegotiated each year. Product breakdown Sales (in thousands of tonnes) Peas Carrots Mixtures Beans Corn Top 5 (subtotal) Other products Total tonnage sold 30/06/2007 24.570 47.976 31.562 9. since Salvesen and Padley sell almost exclusively in the United Kingdom.723 75.676 2. This decrease was due to the discontinuation of custom work for third parties and the decision to reduce the unprofitable UK customers.40% 14. In addition.

g. Change of inventories Due to the specific nature of the production process and climate conditions. there was a sharp fall (-66. 6.3. the storage activity has been managed internally.1.1 million) and the actual purchase price paid (EUR 1. This has led to a large decrease in external storage costs. as a result of which more had to be purchased in order to meet demand.5 million). It is true that inventories rose by EUR 5.286k compared to 2004/2005 relating to the purchase of fresh vegetables in spite of exceptionally low production in the respective period. In 2005/2006. In the 2006/2007 financial year.1.2%) is explained by a significant increase of own production in Belgium and France. 6. frozen) immediately after harvest and consequently the harvest season for vegetables coincides with the company’s production season. beans and corn. Since midJune 2006.1 million was realised. there was a decrease of EUR 1. compared to 60% in 2005/2006 and 65% in 2004/2005. the management and operation of the cold stores (at the King’s Lynn site) was in the hands of Celsius First Ltd.1. Increases were recorded in purchases of frozen products (+15.5. In addition. In the 2005/2006 financial year. work carried out by third parties (e. this related mainly to lower own production. In the past.6 million. custom work) and the on-charging of transport costs for purchases. This was mainly due to the sale of the site at Ypres. Pinguin is continuing to work on the optimisation of inventory levels. carrots. The relative importance of these five main product groups varies. Costs of raw materials. which resulted in the recognition of negative goodwill in the profit and loss accounts amounting to EUR 1.4. an external company.1. but that was mainly due to the acquisition of part of the inventories when the activities of Padley were acquired in June 2007 (+EUR 3.1. Details of this cost item are provided in section 7. This is because the raw materials have to be processed (i. packaging materials as well as external storage. more carrots were purchased and processed in 2006/07. 118 .3% compared to 2005/06) in the ‘storage and work carried out by third parties’ cost category. This relates to the difference between the fair value (EUR 3. The increase in purchases of fresh vegetables in 2006/2007 (+10.1.e. Negative goodwill recognised in income statement and other operating income The acquired assets of Padley Vegetables were valued at fair value in accordance with IFRS. Pinguin generates a large proportion of its turnover from the sale of mixtures. The other components of operating income are mainly transport costs invoiced to customers. The decrease in the volume of peas sold in 2006/07 was due to the deliberate reduction of some less profitable customers in the UK and temporary shortages of supplies from the producers. on which a capital gain of EUR 2. Inventories have to be built up during this period in order to meet demand for a full year.3 million during the last financial year. In order to fully utilise the available production capacity at Pinguin Aquitaine.2 million). We also store less externally in France.2. The conditions in the market for corn recovered in 2006/07 and the purchasing conditions were also revised. and in 2006/2007 accounted for 62% of the total tonnage sold.3%) in both the 2006/2007 and 2005/2006 financial years. other operating income was much higher than in previous financial years. as a result of which profitability on these products was restored.The main basic vegetables for Pinguin are peas. purchases of frozen vegetables. In the 2006/2007 financial year. The increase in purchases of frozen products in the last financial year is explained partly by the acquisition of the inventory of the former Padley Vegetables and partly by the rise in purchase prices.4. In the previous financial years the inventories were reduced in order to minimise the working capital requirement. 6. Pinguin has to have substantial inventories at its disposal. consumables and goods for resale These costs comprise purchases of fresh vegetables. Operating expenses.

Costs of services and other goods Overhead costs (services and other goods) rose by EUR 2. 119 . the permanent nature of some temporary functions.7.2 million (-8.41% and 2.7 million) is mainly due to the successful restructuring carried out last year in the UK. This decrease in personnel expenses (EUR 2.87% respectively and now amounts to 47. This is the combined effect of a rise in energy costs in the UK as a result of bringing cold stores under internal management (albeit offset by the decrease in external storage costs recorded on purchases). Furthermore. increased production. The decrease in the 2005/2006 financial year is explained by the poor situation with regard to corn prices.6 million in 2006/2007.4.5. After a decrease of EUR 2.8%) in 2005/2006. and the restructuring at Pinguin Aquitaine in the previous year. Operating expenses.1. From September 2005 the Euragra activities were continued at the Belgian site at Westrozebeke with a substantially more favourable cost structure. 6.8%) in 2005/2006 is mainly due to the closure and transfer of the activities of the former Euragra operation in Brittany.55% of the operating income. In spite of the extreme climate conditions in 2006/2007. due to the existing infrastructure. Gross profit The gross margin has improved in comparison with the previous two years by 2. A large number of employees were made redundant at the British subsidiary. It is true that the decrease in personnel expenses is partly offset by the temporary employment costs. At the end of the 2006/2007 financial year.9 million in 2006/2007 compared to 2005/2006. The impact of the restructuring of Padley Vegetables in the 2006/2007 financial year is limited. The decrease of EUR 2. Personnel expenses Personnel expenses have fallen considerably in the past two financial years. 6. benefiting its gross margin. strong competition. as a result of which the assumed own production volumes in Belgium and the UK could not be achieved in full (and consequently a greater call was made on purchases of frozen products from third parties). Details of these cost items are provided in section 7. Compared to 2004/2005. technology and know-how.1.2 million (-8. involving 43 redundancies.5.7 million (-12. The bulk of the restructuring costs will follow in the 2007/2008 financial year.6. personnel expenses in 2006/2007 fell again by EUR 2. the company policy of integrating people’s experience more effectively into the business and the changes made to the administration in France and the UK. which can now be included for a full year. services and other goods remained stable in 2005/2006. Pinguin succeeded in increasing own production. Pinguin converted a number of the temporary and seasonal contracts into indefinite term contracts. since it only began in June 2007. which rose by EUR 1.1.0%) compared to the previous year. This took place in the context of the continuing favourable outlook. additional costs for temporary personnel and seasonal workers and a decrease in the costs of external consultancy. the Group put a stop to the negative price spiral during the past year and price rises were recorded in Belgium and in the UK.1. price pressure in the UK and lower supplies of fresh vegetables.1.6.1.

Depreciation and amortization The rise in depreciation and amortisation is due to the additional depreciation of investments (see tangible fixed assets in discussion 6.7%. the operating result is EUR 6.2. This decrease is mainly due to the positive effects of exchange rate fluctuations. 6. A positive operating result (continued activities) of EUR 0.0 million on the operating result.1 million before tax) and a writeback of the impairment loss amounting to EUR 0. Impairments. with Pinguin always giving precedence to the customer’s interests with regard to quality and food safety.1 million) and the restructuring of Boston (EUR -0.1. the EBIT margin is 1.11.6. mainly as a result of the 120 .1.1.1.1. EBITDA The EBITDA of the continued business activities improved by EUR 6. 6.12. write-offs and provisions Impairments.9 million was recorded in the 2005/2006 financial year. 6. Financial income/expenses The financial result rose by EUR 0. these non-recurring events had a positive impact of EUR 4. An initial restructuring of the company management was immediately carried out. The results in the 2006/2007 financial year were positively impacted by a number of non-recurring events.1.10.5 million compared to 2005/2006. In the previous financial year the EBITDA margin was 4. This represents 8.8.1.0 million. Pinguin has not had to write off any appreciable amounts in the past two years. If these are excluded. write-offs and provisions (in thousands of EUR) 30/06/2007 30/06/2006 30/06/2005 Impairments of inventory Impairments of trade receivables Provisions Amounts written off and provisions 619 -259 -274 86 663 401 -116 948 754 -13 58 799 As a result of extensive credit management combined with substantial credit insurance. Pinguin Foods UK acquired the assets and activities of Padley Vegetables. The sale of the business (and site) at Ypres (EUR 2.2 million.7%. at a cost of EUR 0.9 million.6 million being included in the result.1.8 million compared to the previous financial year and now amounts to EUR 13.2 million. A negative operating result was recorded in 2004/2005. EBITDA is EUR 12.1. The operating result for the 2005/2006 financial year includes non-recurring restructuring costs of EUR 1.6 million and amounted to EUR 10. This corresponds to an EBIT margin on operating income of 4. Operating result EBIT improved considerably by EUR 9.8% of operating income. resulting in negative goodwill of EUR 1.1. These concerned a capital gain on the sale of the Ypres site (EUR 2. on 1 June 2007. offset by a decrease of EUR 690k in financial expenses.5 million. If these nonrecurring events are excluded. If the non-recurring events are excluded.2 million) are non-recurring events which affect EBITDA in an amount of EUR 1. In total.1. Balance sheet of Pinguin NV). In addition.9.5 million. 6.6 million. The activities acquired at Boston (formerly Padley) were valued at fair value on the basis of IFRS.9 million.1%. Write-offs or Impairments of inventories are recorded on the basis of strict criteria with regard to shelf life.5 million due to the improved outlook at Pinguin Foods UK. This is the combined effect of a decrease in financial income of EUR 0.

1. on a prudent basis.70% 103.00% 30/06/2006 Growth (%) 30/06/2005 FIXED ASSETS Intangible assets Property. The pre-tax result now amounts to EUR 8. This further reduction of debt was made possible in part by the capital increases of EUR 5 million in November 2005 and EUR 2. The company has always created deferred tax liabilities. there was a negative pre-tax result of EUR 2. mainly due to positive exchange rate differences. 2006 and 2007 in accordance with IFRS.19% 34.1.9 million.085 265 53.9 million compared to 2004/2005. If the discontinued business activities are included. Income tax There is no tax consolidation at the level of the Pinguin Group.697 413 52.71% in 2005/2006 and -4. Pinguin terminated this co-operation due to the limited results.8% in 2004/2005. 6.0 million.trend in the pound sterling against the Euro and falling interest charges for leasing liabilities due to the continued repayment of leasing liabilities.5 million in May 2006.00% 126. No deferred tax assets were recorded.56% 6. and a decrease in financial expenses.9 million in the previous financial year.35% compared to -1. In comparison with the consolidated loss of EUR -2.226 615 54. 6.Plant.Furniture and vehicles .8 million. Starbrand Polska was a marketing agency in which Pinguin was one of the six partners.72% -35.Under construction and advance payments Financial fixed assets .89% 28. resulting in an additional expense of EUR 0.1 million. ASSETS (IN THOUSANDS OF EUR) 30/06/2007 Growth (%) 11. a deferred tax asset was created for the first time for an amount of EUR 0.292 19.678 29. the company recognised no deferred tax assets up to and including the 2005/2006 financial year. 6. The financial result in the 2005/2006 financial year amounted to EUR -2. the remaining shares of Tomates d’Aquitaine were written down. The impact of the non-recurring events on the 2006/2007 net profit amounted to EUR 4.1. In addition. 6. Net profit The profit after tax now amounts to EUR +6.00% -100. That concerns Pinguin NV and relates to the one-year outlook.1. Balance sheet of Pinguin NV The table below contains the company’s balance sheets as at 30 June 2005.172 31.141 20.19% 209. because.916 606 164 345 0. In the 2006/2007 financial year.00% 350 n/m 220 220 103.3 million in the previous financial year.84% 1.15.00% -100.97% 53.1.70% 108 108 121 .1 million in the pre-tax result. there was insufficient certainty that these losses could be offset against future profits within the foreseeable future. the financial expenses were negatively impacted by the impairment of the shares of Starbrand Polska and Tomates d’Aquitaine. In addition.2 million.36% -4.1.645 32.13.Available-for-sale financial assets Deferred tax assets 60.2.14. machinery and equipment .4 million. In addition. plant and equipment .567 470 164 152 -100. The latter fell by EUR 1.6 million.Land and buildings .136 821 58.95% 1. The net margin now amounts to 4. Pre-tax result The measures taken in the past financial year and the increase in activities resulted in an improvement of EUR 10. This was the combined effect of a rise in financial income of EUR 0. in view of the successful turnaround.9 million.00% -3. which represents an improvement of EUR 1.Other .3 million in 2005/2006 due to the further reduction of debt and the decrease in working capital.1.81% 10. this is an improvement of EUR 9.49% -100.94% 0.837 28.

intangible assets amounted to EUR 0.2.1.Other CURRENT ASSETS Inventories .897 2. Financial fixed assets The decrease in the financial fixed assets is explained by the impairment loss in respect of the participation in Starbrand Polska and Tomates d’Aquitaine. Taking into account these changes and the changes in net investment grants.233 27. The transfers and withdrawals amounting to EUR 1.090 -32.65% 18.43% -12.472 29.204 1.158 -19.1.2.81% 17. the optimisation of the existing machinery at Pinguin NV.3 million). The depreciation in the various entities (+EUR 5. In addition there were a number of important investments in machinery.40% -2.1. Starbrand Polska was a marketing agency for Eastern and Central Europe.458 3. the sale of the French fries line at Pinguin Foods UK and the sale of the Ypres site jointly resulted in a net removal of assets amounting to EUR 3.09% -9. the installation of the soup and sauce line at Pinguin NV with the necessary expansion of the machine rooms.456 30.2.310 2.Trade receivables .21% -10.419 81 81 1.162 2.62% 18.Short term deposits Cash and cash equivalents Deferred charges and accrued income TOTAL ASSETS 287 287 72.570 1.1. in which Pinguin was one of the six partners. entailing an additional expense of EUR 125k.954 33.2. additional investments in refrigerating plant and machinery rooms at Pinguin Langemark.5 million is recorded in the 2006/07 financial year.479 6.332 27.94% 25.8 million.50% -6. net growth of EUR 5. In addition.62% 6.08 million).Derivatives .Long-term receivables (> 1 year) . The transfers and withdrawals as at 30 June 2007 amounted to EUR 5.2. The main investments as at 30 June 2006 related to the acquisition of more efficient packing machines at Pinguin NV with a view to the modernisation of the packing department. the establishment of a bean line at Pinguin Aquitaine and the waste water treatment project in the United Kingdom.073 28.Work in progress and finished products Amounts receivable . it is considered sufficiently certain that 122 .094 3.795 2.162 86 86 6.1. 6.76% 9.17% 343.85% -1.75% n/m n/m 6.26% 3.101 23.3. where a deferred tax asset was created in an amount of EUR 350k.11% 4.046 112. compared to EUR 0.476 1. including a multi-line palletiser. 6.782 31.37% -5. Deferred tax assets As at 30 June 2007.3 million) and the inclusion of the assets of Padley (EUR +3.9 million as at 30 June 2006 related mainly to the sale of the tangible fixed assets of Pinguin Salads.90% 15. The other transfers and withdrawals consist mainly of the sale of the French fries line at Pinguin Foods UK.8 million. Pinguin discontinued this operation due to the limited results.17% 6.99% 18.3 million as at 30 June 2006.16% 531 531 59.86% -9. The main investments as at 30 June 2007 relate to the construction of a new mixing and packing area and the construction of an automated cold store.66% 428 428 58.002 31.79% 18.94% -32. which were sold to an external party. the Pinguin Group has not recognised any deferred tax assets in respect of deductible temporary differences except for Pinguin NV. 6. packing lines and digital sorting machines. Intangible assets As at 30 June 2007.Raw materials and consumables .40% -19. Tangible fixed assets Tangible fixed assets rose last year as a result of the investments made (+EUR 10. As a result of better budgeted results at Pinguin NV.4. The rise in intangible fixed assets is due to the implementation of a new ERP package in Belgium.929 25.214 24. which were sold at their net carrying value to a third party. the remaining shares of Tomates d’Aquitaine were written down.963 975 133.Other receivables Financial assets .762 26.111 113.2 million and related mainly to the sale of land and buildings including the tangible fixed assets of Pinguin Ypres.

95% -1.603 48. The number of days of customer credit rose from 49 in 2004/2005 to 60 in 2006/2007.3 million higher. but this is mainly due to the inclusion of part of the inventories on the acquisition of the Padley activities in June 2007 (+3.5. the customer requirements and the supply conditions.91% n/m -1170.461 -13.966 Growth (%) 21. so this ratio gives a somewhat distorted picture.74% 184. As stated.3 million as at 30 June 2007. In addition. 6.461 36.91% 30/06/2006 27.139 Growth (%) 68.905 SHAREHOLDERS’ EQUITY Share capital . with the subcontractors bearing the bulk of the inventory risk. No payments had been received in respect of these sales as at 30 June 2007.344 -321 1.789 36.750 35.1.46% -20.039 16. This site and its activities were sold on 30 June 2007.8.5.1.3 million this year. 6.41% 17 -19. 6.95% n/m -121.6.229 48. Inventories Pinguin has continued to work on the optimisation of inventory levels.96% 34.4 million as at 30 June 2006.888 -138 354 23. compared to EUR 1.007 18. Pinguin has an efficient credit management policy. If these transactions are excluded. inventories reach their lowest point in May/June of each year and peak traditionally in November/December. Padley’s sales in June 2007 are consequently included in the revenues.05% 21 123 .66% 30/06/2005 22. This involves strict control and monitoring of the receivables and credit insurance is used in respect of all trade receivables. Because of the seasonal character of the company. This increase is mainly related to the proceeds of the sale of the Ypres site.229 -2. These are covered to the extent of approximately 85%. the inventory reaches its low point in June. This rise is due to the change in the customer portfolio.2.2.Subscribed capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions for pensions and similar rights 12 -29.582 35.00% 3. The rise in 2006/2007 can be explained by the acquisition of the Padley activities on 1 June 2007.2. Pinguin limits its inventories of packaged goods to a certain buffer level as a function of the capacity of the packaging machines.2. the pea season in the UK began earlier.18% -14. which now includes more customers with longer payment terms.205 30 1.750 -9.1. Cash and cash equivalents As at 30 June 2007. Long-term receivables Amounts receivable after one year amount to EUR 0.2 million).03% -1. EQUITY AND LIABILITIES (IN THOUSANDS OF EUR) 30/06/2007 46. The number of days of inventory rose from 77 as at 30 June 2005 to 83 as at 30 June 2007.6 million as at 30 June 2005. as a result of which the processing of peas began in June this year.7. Pinguin had EUR 7 million in cash. The inventories are EUR 5. the number of days of customer credit rose from 59 to 65.there will be sufficient taxable profit available in the forthcoming financial year against which to offset this recognised tax asset. 6. These concern guarantees which are issued as a function of the repayment of certain credits. compared to EUR 0.9 million as at 30 June 2005 to EUR 29.91% 34.1. Trade receivables Trade receivables rose from EUR 23.

86% 26.895 shares).2.054 6.539 6.Other provisions Financial liabilities . Subscribed capital On 25 November 2005 the share capital was reduced by EUR 8.38% 3. the capital was reduced by negative reserves in an amount of EUR 8.1.213k in respect of past losses.00% 26.635 70.63% -39.936 33.500k. These liabilities amounted to EUR 6. No dividend has been paid in the past two years. Lur Berri (201.1.589 shares).Current portion of non current financial liabilities .698 274 283 112.435 3.835 4.10% 11. as a result of the incorporation of profit. the issued share capital in accordance with IFRS amounted to EUR 35.66% -63.29% -1.2 million in 2005/2006. which were issued after cancellation of the preferential subscription right pursuant to articles 596 and 598 of the Belgian Company Code by decision of the extraordinary general meeting of Pinguin NV on 25 November 2005 and which were subscribed in full by STAK.2.393 27.28% -3.936 7.Other Other amounts payable Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities .3 million. a company registered in France (96. This subsidiary reported a net profit of EUR 67k for the year ending on 30 June 2007. compared to EUR -9.884 shares) and STAK (1.86% -13. The losses from 2005/2006 and 2004/2005 were incorporated in the reserves. The issued share capital according to IFRS then amounts to EUR 48.34% -36.89% 117.2.302 7.Credit institutions .Financial leases .37% -11. 6.55% 18.750k.081 829 1.9.56% 9.158 4.806 354 89 133.705 714 2.62% 4.662 shares).348 -82.090 -6.479 6.00% 29.223 3.45% -30. Bank loans and leases Pinguin uses long-term investment credits and leases to finance its investments. Pinguin has a 52% participating interest in Pinguin Aquitaine. This was followed on the same day by a first private placement of 692.296 600 6.864 2.229k.345.02% -65.785 32.62% -33.35% -84. Following these operations.603 25.66% 34.052 3.20% -68.1.24% -25.637 808 2.018 26.11.699k in the previous year.2 million as at 30 June 2006. The costs in respect of the capital increases were deducted from the capital in accordance with IAS 32.Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable Accrued charges and deferred income TOTAL EQUITY AND LIABILITIES 57 8. 6.Credit institutions . On 26 October 2006 the extraordinary general meeting of Pinguin NV resolved to increase the capital by EUR 12.10. 6.22% 328 12.Bond loans .411 7.70% 7.610 -25.719 5.304k as at 30 June 2007.03% -33. This capital increase was subscribed by KBC PE (134.676 27.1.260 26.879 681 2.170 shares) and by Société Par Actions Simplifiée Primco. In the 124 .21% -55.98% -4.026 65. 48% of this result has therefore been stated under minority interests.390 66.735 633 113.595 4.16% 33. Minority interests As in the previous year.63% 5.76% 440 18.2. a company registered in France (201. These shares were subscribed by Lur Berri. compared to EUR 9. As described above.561 1.80% -1.765 1.82% -19.518 6.520 shares. On 10 May 2006 there followed a second private placement of 297.832 shares within the framework of the authorised capital.12.86% -4. Reserves The consolidated reserves as at 30 June 2007 amounted to EUR -2.

The loan is being repaid above par.16.31 December 2006 (12 months)) and for the first half of the 2007 calendar year (1 January 2007 .879k.637k in the previous year.15. amounting to EUR 387k as at 30 June 2007 (30 June 2006: EUR 600k). The decrease of EUR 2. In addition. compared to EUR 26. Bond loan The bond has a term to 31 December 2008 and carries a coupon of 8%.2. a pro forma consolidated profit and loss account was drawn up in accordance with IFRS for the 2006 calendar year (1 January 2006 .30 June 2007 (6 months)) as if these transactions had taken place on 1 January 2006 and 1 January 2007. No early redemptions have taken place.14. receivables and the company’s cash situation. Deferred tax liabilities Deferred tax liabilities are mainly related to the differences between IFRS and the local accounting rules with regard to depreciation of tangible fixed assets and amortisation of intangible fixed assets.2. as a result of the capital increase of EUR 2. no new long-term interest-bearing liabilities to credit institutions were entered into in 2005/2006. The increase last year is largely due to the purchase of the consumed inventories of Padley Vegetables at the end of June 2007. Other loans The other long-term loans consist of a loan entered into in respect of Agence d’eau. 6. the supply of fresh vegetables.1. This was made possible in part by the various capital increases. The remaining amount is the outstanding liability in respect of the asset deal with Padley Vegetables Ltd. EUR 2. 6. New investment credits were planned for 2006/2007.2. In past years Pinguin has opted to consistently reduce its debt position. Pinguin hedges against interest rate rises to a large extent.2 million of which had already been drawn as at 30 June 2007. 125 .context of the continued reduction of debt.705k as at 30 June 2006 and EUR 27. 6.1. 6. as this item fluctuates as a function of inventory levels.067k in the subordinated bond loan compared to 30 June 2006 is entirely due to the normal contractual redemptions. Other payables The considerable decrease in other payables in 2005/2006 compared to 2004/2005 is due to the repayment of certain liabilities in respect of the shareholders Lur Berri and Primco at Pinguin Aquitaine. These short-term liabilities have a variable interest rate (Euribor + margin).1. 6. the company has prepared a pro forma consolidated balance sheet in accordance with IFRS as at 31 December 2006 (12 months) and 30 June 2007 (six months) as if these transactions had taken place on 1 January 2006 and 1 January 2007. Short-term liabilities Short-term interest-bearing loans The fall in short term liabilities to credit institutions reflects a momentary situation. The interest is payable annually in arrears.532k on 10 May 2006.2 PRO FORMA FINANCIAL STATEMENTS OF PINGUIN NV + LUTOSA In view of the fact that the Pinguin Group acquired the Lutosa Group in September 2007 and carried out a sale-and rent-back operation relating to the real estate of the Lutosa Group in October.13.1. The other amount which was still recorded as at 30 June 2005 consists of the current account in respect of Lur Berri and Primco. Trade payables Trade payables as at 30 June 2007 amounted to EUR 33. at Pinguin Aquitaine.2.

320 1. in which the pro forma financial information is discussed in detail.349 -3.708 -8.499 66.156 -966 -1.2.156 4.000 2. Income statement in accordance with IFRS The table below contains the pro forma consolidated profit and loss account of the Pinguin Group and the Lutosa Group in accordance with IFRS as at 31 December 2006 and 30 June 2007.725 156.037 8.848 -83.584 1.777 330.475 46.198 -10 -2.693 7.261 -15. which can be found elsewhere in this prospectus.924 1.282 47. relate to: − The valuation at fair value of the Lutosa brand name and any amortisation thereof − The valuation at fair value of Lutosa’s customer relations and any amortisation thereof − The valuation at fair value of Lutosa’s machines and any depreciation thereof − The valuation at fair value of Lutosa’s inventories − The valuation of Lutosa’s potato contracts and any amortisation thereof − The deferred taxes on the above adjustments − The adjustment of the pro forma goodwill as a result of the above adjustments The following discussion and analysis must be read in conjunction with (i) the section entitled ‘Pro forma financial information of Pinguin Group after the acquisition of the Lutosa Group’ and (ii) the audited consolidated financial statements and accompanying notes.915 3.39% -35.394 3.79% 10.349 -4.221 2. this pro forma information illustrates a hypothetical situation and consequently does not represent the actual financial position and financial performance of the Pinguin Group.895 -25.953 -19.154 6.176 -5.98% 6.43% 20.456 44.469 -98. consumables and goods for resale Gross profit Margin Services and other goods Personnel costs Depreciation and amortization Reversal of impairment losses on assets Impairments. also including the sale and rent-back operation relating to the real estate of the Lutosa Group as if these transactions had taken place on 1 January 2006 and 1 January 2007. 6.500 -5.147 CY 2006 (12m) 183.56% -41.301 2.This information is only provided for illustration purposes.714 4. LUTOSA GROUP) Intercompany elimination Fair value adjustment Acquisition Sale of real estate CONTINUED OPERATIONS Sales Increase/decrease in inventory Negative goodwill recognised in income statement Other operating income Raw materials.95% 10.83% 126 . due to the lack of factual figures on the date of issue of this prospectus.246 -976 -6. By its nature.16% -82.731 89. Further information on the revision and assumptions used in the preparation of the pro forma financial information can be found in sections 7.317 -182. write-offs and provisions Other operating charges Operating result (EBIT) Margin EBITDA Margin CY 2006 (12m) 147.15% 23.446 4.7. The main elements not taken into account in these pro forma figures.085 -12.6 and 7.069 -44.1. All amounts in thousands of EUR Pro forma Income statement 31/12/2006 Pinguin Group Pro forma Income statement 31/12/2006 Lutosa Group CONSOLIDATED PRO FORMA Income statement 31/12/2006 PINGUIN GROUP (INCL.

975 1.586 933 -64.817 -2.58% CONSOLIDATED PRO FORMA Income statement 30/06/2007 PINGUIN GROUP (INCL.316 -8.081 1.64% 334 -1.036 68 -8.394 6.221 48.488 12.62% -39.707 34.421 360 -1.27% 24.99% 25.89% 127 .73% 456 -952 19.246 1.110 1.203 -3.403 -5.94% -16. LUTOSA GROUP) Intercompany elimination Fair value adjustm ent Acquisition Sale of real estate CONTINUED OPERATIONS Sales Increase/decrease in inventory Negative goodwill recognised in income statement Other operating income Raw materials.166 -22.70% 790 -4.576 -5.005 4.770 -3.419 49.344 59.886 -1.670 3.750 10.229 12.770 -5.16% 9.404 47.163 -12.193 -1. write-offs and provisions Other operating charges Operating result (EBIT) Margin EBITDA Margin Financial income Financial expenses Operating result after net finance costs Taxes 1 half 2007 (6m) 72.885 -1.381 -98.610 887 -34 -933 19.755 NET RESULT FROM CONTINUED OPERATIONS Margin All amounts in thousands of EUR 2.837 -219 306 -2.470 -16 196.40% 4.527 19.321 7. consumables and goods for resale Gross profit Margin Services and other goods Personnel costs Depreciation and amortization Reversal of impairment losses on assets Impairments.006 7.500 -4.740 6.475 2.Financial income Financial expenses Operating result after net finance costs Taxes 562 -3.893 -10.725 -3.770 -4.580 -7.913 -1.507 -4.448 -34.699 754 -2.023 -1.422 1 half 2007 (6m) 123.551 1.885 -4.88% -20.389 16.097 -3.33% Pro forma Income statement 30/06/2007 Pinguin Group 2.586 3.094 4.548 NET RESULT FROM CONTINUED OPERATIONS Margin 1.014 887 377 -1.606 -7.061 1.568 15.676 -3.813 -9.075 93.88% 3.068 20.389 343 -5.885 -1.301 16 4.710 -10.48% Pro forma Income statement 30/06/2007 Lutosa Group -0.

The Lutosa Group’s share amounted to 55. The capital gain of EUR 2.128k realised on this transaction was recorded under other operating income.848k.1. Negative goodwill recognised in the income statement On 1 June 2007 Pinguin acquired the assets and activities of Padley Vegetables through Pinguin Foods UK. 6.6 million.2. leading to the inclusion of negative goodwill of EUR 1. 6. 6.7 of this prospectus.1. however. − − Inventories of frozen vegetables reached their lowest level in May-June (just before the production season) and reach their peak after the vegetable season. particularly in December. The rise in Lutosa’s share of consolidated sales in the first half of 2007 is due entirely to the fact that in the first six months of the 2007 calendar year the Lutosa Group was able to increase the prices of its products substantially. since the poor potato harvest threatened to lead to a shortage of potato products. pro forma consolidated sales amounted to EUR 330. exceptionally high in the first half of 2007 and forms the basis for the high profitability. The other operating income of the Lutosa Group partially comprised the income related to the cogeneration plant on the production site.2. in contrast to the first half of 2007. 6. inventories rose by EUR 4. Lutosa succeeded in keeping its gross profit margin fairly stable. Other operating income The other operating income of the Pinguin Group (before the acquisition of the Lutosa Group) for the 2006 calendar year amounted to EUR 1.1.1.2.4.6 million in the result. Gross profit/gross margin In the first half of 2007.924k. Increase/decrease in inventories For the period from 1 January 2006 to 31 December 2006 inclusive. It rose further to 62. 6. when inventories decreased by EUR 10. In the first half of the year the other operating income of the Pinguin Group (before the acquisition of the Lutosa Group) rose to EUR 3.99% in the first half of 2007. Supplies of potatoes are expected to return to a normal level in the second half of 2007. The gross profit in absolute figures was. This large increase is explained by the sale of the land and buildings and the business at Ypres.2. Sales Sales can be divided into the sale of frozen vegetables (Pinguin Group) and the sale of potato products (Lutosa Group). This is most marked in the frozen vegetable sector (potato production is less seasonal).45% during the 2006 calendar year. The acquired assets were valued at fair value in accordance with IFRS.5. As a result. since there are only limited fluctuations between the various months with regard to the volumes sold. 128 . Although potato prices rose sharply.3. The large increase between the two periods is due to the seasonal nature of the companies.448k. The decrease at Lutosa is due among other things to the shortage of potatoes as a result of the poor harvest in the previous year.1.A description of the various adjustments to the consolidated pro forma profit and loss accounts as at 31 December 2006 and 30 June 2007 can be found in section 7.2. It should be stated that these price rises are fairly exceptional and result from the rise in raw materials prices due to the shortage in 2006 and the first half of 2007. Normally – on the basis of constant selling prices – the sales would be spread relatively evenly over the entire financial year. and for the first half of 2007 EUR 196. Lutosa was able to pass on this rise in its selling prices (this rise amounted to 50% in the case of frozen French fries). For the 2006 calendar year.2. we do not expect that it will be possible to extrapolate Lutosa’s half-year figures for the full year.1.714k.710k.

6. This is other operating income.1.740k. 6.2. pro forma consolidated EBITDA amounted to EUR 23.1.2. This is an IFRS presentation based on an acquisition price for the Lutosa Group of EUR 175 million and a capital increase of at most EUR 66 million and cash income from the sale and rent-back operation relating to the real estate of the Lutosa Group amounting to 129 .7% of those of the previous calendar year.1 million before tax) and a writeback of an impairment loss amounting to EUR +0. since an additional loan is being entered into in an amount of EUR 64 million. Of this.568k in the first half of 2007.7%. personnel expenses amounted to 51. In total.2 million. In the first half of 2007. expenses for services and other goods amounted to 47. It should be stated that the largest rise with regard to the 12-month figures was caused by Lutosa.301k.6.6 million being included in the result. on 1 June 2007. The amount in the first six months of 2007 is EUR 19.5% and the Lutosa Group 42.7. this was exceptional and cannot be extrapolated for the full year and the future for Lutosa. In addition.1% of those of the previous calendar year. The spectacular improvement in the EBIT margin is due mainly to the price rises which were implemented in the potato and frozen vegetable sector and which were mainly evident in the first half of the 2007 calendar year. An initial restructuring of the company management was immediately carried out. Most expenses for services and other goods are related to the production volumes or volumes sold.3% and Lutosa Group 77.5 million due to the improved outlook at Pinguin Foods UK.394k.154k. The Pinguin Group generated EBITDA of EUR 4. which has a positive effect on the operating result. Similarly. The personnel expenses are normally spread fairly evenly over the two halves of the year. The results in this financial year were positively impacted by a number of non-recurring events. Financial result The financial expenses are increasing considerably due to the acquisition. at a cost of EUR 0. Pinguin Foods UK acquired the assets and activities of Padley Vegetables.1. The activities acquired at Boston (formerly Padley) were valued at fair value in accordance with IFRS. with a slightly higher weight for the second half of the year in view of the fact that production is somewhat higher in the months from October to September inclusive. Operating result The pro forma operating result of the Pinguin-Lutosa Group for the 2006 calendar year amounted to EUR 7. However. as a result of which prices at Lutosa in the second half of 2007 will be markedly lower than in the first half of the year. These concerned a capital gain on the sale of the Ypres site (EUR 2. Pinguin-Lutosa already achieved an EBITDA of EUR 24. In the first half of 2007. these non-recurring events had a positive impact of EUR 4. This price rise was the most marked in the potato sector. Prices are expected to normalise again. In the 2006 calendar year. resulting in negative goodwill of EUR 1.5%. EBITDA For the 2006 calendar year. during October to December.8. Pinguin Group contributed 57. the management expects prices to fall from October.576k as a result of the exceptional circumstances in the potato sector.7% of the previous calendar year.9. Pinguin Group contributed 22.1.0 million. In the first half of 2007 an impairment loss amounting to EUR 887k in relation to the assets of Pinguin Foods UK was reversed. the production volume in the first six months amounted to 49. Operating expenses In the first half of 2007.2. greater use is made of temporary employment in order to store the harvested potatoes. as it is non-cash income. The gross profit margin will be determined by the potato price from October to December inclusive.Since Lutosa normally enters into contracts for the period October to the end of September and the potato harvest is expected to be normal. The Lutosa Group was able to generate EBITDA of EUR 25. 6. The negative goodwill included in the result is not included in the calculations of the EBITDA. 6. The production volumes at Lutosa are normally spread fairly evenly over the two halves of the year.2.

800 130 .907 2.241 26. also including the sale and rent-back operation relating to the real estate of the Lutosa Group as if these transactions had taken place on 1 January 2006 and 1 January 2007. Pinguin is also currently working on a restructuring of the entire credit portfolio.Land and buildings .315 102.837 87.326 26.284 155.461 573 102.Derivatives . Balance sheet in accordance with IFRS The table below contains the pro forma consolidated assets of the Pinguin Group and the Lutosa Group in accordance with IFRS as at 31 December 2006 and 30 June 2007.416 573 67.2.504 3.Raw materials and consumables .564 58.315 -38.594 4 4 13.337 102.320 164 -3.638 30.Other CURRENT ASSETS Inventories .500 2.770 -8.Plant.282 19.1.520 15.770 -8.Trade receivables .Other .367 1.Furniture and vehicles .337 Intangible assets Goodwill Property.Finished products Amounts receivable .Short term deposits Cash and cash equivalents Deferred charges and accrued revenues TOTAL ASSETS 32.617 113 2.119 3.315 98.430 1.799 8 80. Taxes The rise in the tax expense in the first half of 2007 is due to the positive results of the Lutosa Group during that period.2.062 155 125 30 0 392 392 80.131 -3.075 26. machinery and equipment . The pro forma figures are based on an interest rate of 5.496 -46.962 8 47.205 349 30 6.501 44.371 9. 6. The pro forma figures do not take account of the planned securitisation of trade receivables.295 Pinguin Group Lutosa Group Intercom pany eliminati on Fair value adjustment Acquisition Sale of real estate FIXED ASSETS 53.868 42.252 6.894 2.Amounts receivable Deferred tax assets Long-term receivables (> 1 year) .613 113 2.EUR 45 million.266 52. All amounts in thousands of EUR Pro forma balance sheet 31/12/2006 Pro forma balance sheet 31/12/2006 CONSOLIDA TED PRO FORMA BALANCE SHEET 31/12/2006 PINGUIN GROUP (INCL.266 97.2.10.000 134.022 43.337 -38.300 2.684 62.Other receivables Financial assets .Assets under construction and advance payments . see 6.917 1.225 1. LUTOSA GROUP) 200. It should be emphasised again that the first half of the year was extremely favourable for the Lutosa Group and that the expectations for the second half are based on a markedly lower result.058 125 125 4 30 30 67.000 392 392 156.684 19.869 30 6.89% on this additional financing.4 ‘Outlook’.139 75. 6.Work in progress and finished products .042 15.315 15.Leasing and similar rights Financial fixed assets .Available for sale .337 356.266 -38.771 23.801 15.338 2. plant and equipment .245 4.282 38.339 68.

Trade receivables .121 4 4 24.390 20.002 97. The reason for the decrease was the positive result of the Lutosa Group in the first half of 2007.750 4 30 0 30 350 287 287 163.408 2.081 58.2.732 58.2.456 30.591 -39.681 Financial fixed assets .472 29.552 A discussion of the various adjustments to the consolidated pro forma balance sheets as at 31 December 2006 and 30 June 2007 can be found in section 7. 6. amounted to EUR 102.885 -5.954 33. Further details of the calculation of the goodwill can be found in section 7.Plant.Work in progress and finished products .2. which increased as a result of the acquisition of the Lutosa Group.061 4.receivables Deferred tax assets Long-term receivables (> 1 year) .591 CONSOLIDA TED PRO FORMA BALANCE SHEET 30/06/2007 PINGUIN GROUP (INCL.Raw materials and consumables .919 18. As at 30 June 2007. it decreased to EUR 95.Land and buildings .837 28. LUTOSA GROUP) 197. 6.283 90 86 4 23.341 360.Furniture and vehicles . plant and equipment .275 -39.090 160.2.Other CURRENT ASSETS Inventories .1.590 81 47.002 0 4 30 30 350 287 287 72.All amounts in thousands of EUR Pro forma balance sheet 30/06/2007 Pro forma balance sheet 30/06/2007 Pinguin Group Lutosa Group Intercom pany eliminati on Fair value adjustment Acquisition Sale of real estate FIXED ASSETS 60.participating interests . Intangible fixed assets The intangible fixed assets belong entirely to the Pinguin Group (prior to the acquisition of the Lutosa Group).846 50.Derivatives .732 -39.678 29.226 615 62.182 1.750 133.591 95.Assets under construction and advance payments . Goodwill Pro forma goodwill.136 821 62.575 1.266k as at 31 December 2006.Other .963 975 -1 -1 -1.Short term deposits Cash and cash equivalents Deferred charges and accrued revenues TOTAL ASSETS 31.247 706 -1 -1.275 93.763 25.889 21.732k.458 3.275 95.933 4.732 100. The increase between the two periods can be explained by the investments in software.885 -5.275 18.2.251 29.847 -45.7 ‘Pro forma consolidated financial information 2006/2007’ in chapter 7. which consist mainly of the acquisition and implementation of a new ERP software package (SAP) which was introduced in the Belgian units in June 2007.837 68.519 7.682 -1 18. 131 .216 74.387 18. machinery and equipment .316 40.745 45.Leasing and similar rights 95.162 86 86 6.624 2.310 2.592 81 79.Finished products Amounts receivable .7 of this prospectus.Other receivables Financial assets .471 821 Intangible assets Goodwill Property.

9 million) is due to the sharp rise in selling prices and a strong operating cash flow in the first half of 2007.2. Of this.3. whereas the annual sales revenues do not fully reflect this.8% was held by Lutosa.2.2.2. The Lutosa Group share is slightly more than half of the net carrying value.2. Deferred tax assets As at 30 June 2007. This relative change is due to the seasonal nature of the frozen vegetable sector. since the higher selling prices were only introduced from October 2006 and therefore only affected the annual sales for a period of three months. 6.2. Cash and cash equivalents As a result of the acquisition. 6. Lutosa held 38. 6. Financial fixed assets As at 31 December 2006.2. 6. The interest rate used in the pro forma figures is 5.2.9.7. The remaining amount consists mainly of guarantees for car leases and pallets.4.2. The EUR 2. 6. This positive trend (+EUR 10. The calculated number of days of customer credit is relatively high because the outstanding receivables at the end of 2006 reflect the sharp rise in selling prices. In the ‘Acquisition’ column.5 million as at 31 December 2006 was a short-term investment which was possible due to a prior capital increase.4%.2 million at the end of June 2007. machinery and equipment. Inventories As stated previously. down EUR 101k compared to 31 December 2006 (EUR 272k).2.139k. 6. Lutosa’s cash rose sharply compared to the situation as at 31 December 2006. Receivables The pro forma consolidated receivables as at 31 December 2006 amounted to EUR 80. The credit guarantee (‘gage espèce’) paid by Pinguin Aquitaine amounted to EUR 171k at 30 June 2007.216k). this heading for Pinguin Group contained the participating interest in Tomates d’Aquitaine in an amount of EUR 125k. Long-term receivables Amounts receivable after one year at Pinguin Group consist mainly of cash guarantees.8% of this. standing at EUR 24. Tangible fixed assets The amount of tangible fixed assets in both periods is mainly related to plant. Due to better budgeted results at Pinguin NV.6. These figures were largely unchanged on 30 June 2007 (EUR 79. This participating interest was written off in full on 30 June 2007.2. Pinguin NV created a deferred tax asset of EUR 350k.2.2.2. it is considered sufficiently certain that there will be sufficient taxable profit available in the forthcoming financial year against which to offset this recognised tax asset. The total inventory position as at 30 June 2007 amounted to EUR 58.6.2. Further information can be found in note 7.4.10. after deduction of the cash income resulting from the sale and rent-back operation relating to the real estate of the Lutosa Group amounting to EUR 45 million. an additional financial loan of EUR 64 million will be entered into. 132 .5. 6. At the end of the 2006 calendar year. the higher inventory level as at 31 December 2006 is due to the seasonal nature of the company. 42.2. Financial assets The financial assets are mainly attributable to Pinguin NV. The average number of days of customer credit at Lutosa at the end of 2006 was 73 (adjusted to take account of VAT payable).8.5 million. Amounts receivable by Lutosa account for 60.89%.17 of the consolidated financial statements. the interest charges for the respective period are deducted from the ‘cash and cash equivalents’ heading.

496 -46.116 113.215 70.621 41 62.Credit institutions .901 29.817 67.250 113.716 17.The table below contains the pro forma consolidated liabilities of the Pinguin Group according to IFRS as at 31 December and 30 June 2007.082 65.109 -74.206 0 1.384 3.250 -4.720 41 32.000 109.800 133 .560 144.042 15.367 14.250 -4.705 50.522 10.315 98.837 4.407 7.890 1.782 4.681 14.Current portion of non current financial liabilities .909 134.528 545 214 27. LUTOSA GROUP) 106.886 10.371 3.364 2.250 48.490 -325 1.110 1.424 2.126 37.283 261 1.681 105.683 74.248 67.582 1.245 6.968 Pinguin Group Lutosa Group Intercom pany eliminati on Fair value adjustment Acquisition Sale of real estate SHAREHOLDERS’ EQUITY Share capital .206 -43.470 12 -27 109.Bond loans .096 48.Credit institutions .063 1.567 62.510 -325 1.162 1. also including the sale and rent-back operation relating to the real estate of the Lutosa Group as if these transactions had taken place on 1 January 2006 and 1 January 2007.828 4.063 -1.337 356.Subscribed capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions for pensions and similar rights Other provisions Financial liabilities . All amounts in thousands of EUR Pro forma balance sheet 31/12/2006 Pro forma balance sheet 31/12/2006 CONSOLIDA TED PRO FORMA BALANCE SHEET 31/12/2006 PINGUIN GROUP (INCL.213 2.918 -4.272 109.434 3.960 7.783 65.000 283 76.111 4.199 30.576 14 14 283 8.506 19.284 155.Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable Accrued charges and deferred revenues TOTAL EQUITY AND LIABILITIES 45.918 62.267 -12 27 20.000 -45.156 5.082 2.332 402 5.000 5.000 -45.109 -11.530 594 2.Other Other amounts payable Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities .189 5.Financial leases .332 402 29.886 -8.274 2 3.

643 -321 1.7 of this prospectus.All amounts in thousands of EUR Pro forma balance sheet 30/06/2007 Pro forma balance sheet 30/06/2007 Pinguin Group Lutosa Group Intercom pany eliminati on Fair value adjustment Acquisition Sale of real estate SHAREHOLDERS’ EQUITY Share capital .300 20.229 48.000 -45.039 106.Credit institutions .348 1.627 109.629 2 1.2.236 0 55.238 12. These are the result of the 52% participating interest in Pinguin Aquitaine.229 -2.048 133.002 47.708 829 1. 134 .160 62.212 1. 6.039 16.216 62.789 12.424 2.082 2.Financial leases .603 25.229 113.302 7.821 10.321 3.682 -1 18.Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable Accrued charges and deferred revenues TOTAL EQUITY AND LIABILITIES 46.229 12.063 1. Minority interests The pro forma consolidated minority interests amount to EUR 1.2.Bond loans .Current portion of non current liabilities .Other Other amounts payable Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities .435 3.063 -1.431 136.880 10.603 48.941 3.399 21.492 59.556 32.000 -4.302 32.68 million as at 31 December 2006 and EUR 1.590 113.085 597 4.223 3.321 CONSOLIDA TED PRO FORMA BALANCE SHEET 30/06/2007 PINGUIN GROUP (INCL.564 6.879 681 2.11.2.12.000 57 74.358 -12 33 18.539 6.081 829 1.699 5.000 109.635 70.275 93. LUTOSA GROUP) 117.063 -79.552 A discussion of the various adjustments to the consolidated pro forma balance sheets as at 31 December 2006 and 30 June 2007 can be found in section 7.Credit institutions .2.113 12 -33 109.936 33.918 62.064 3.432 -1 6.344 -321 1.225 68. 6.130 6.279 243 390 -1 1. Subscribed capital The pro forma consolidated subscribed capital comprises on the one hand the issued capital of the parent company Pinguin NV and on the other hand the planned capital increase of at most EUR 66 million less the costs related to this operation (EUR 1000k).082 77.139 79.461 2.918 -4.04 million as at 30 June 2007.398 17.341 360.212 -43.806 354 89 26.000 -45.847 -45.063 -16.527 4.576 12 12 57 8.090 160.Issued capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions for pensions and similar rights Other provisions Financial liabilities .

as a result of which Pinguin could achieve accelerated and more profitable growth in its activities in the United Kingdom.3. 6. Pinguin expects that the debt position will increase considerably as a result of the acquisition finance for Lutosa and Salvesen. the debt position and the classification may change further.431k.3 ACQUISITIONS OF PADLEY AND SALVESEN Treatment of the acquisitions of the assets and liabilities resulting from the asset deals with Padley Vegetables and Salvesen Foods 6.6. is the additional loan which. The annual repayments including interest amount to EUR 228k.960k). This acquisition is being financed by means of vendor financing repayable over a period of six years.2 million respectively (including negative goodwill).2 million at 30 June 2007 were also taken over after the acquisition. The financing of the acquisition of the assets and the inventories is 135 .5 million and EUR 1.5% of this heading. production systems and sites. this was a first step towards the achievement of critical mass and the achievement of synergies with regard to customers. EUR 64 million.6 million.2. The largest part.5% of the total deferred tax liabilities.560k. This was made possible in part by the various capital increases. Pinguin Foods UK acquired the assets for an amount of EUR 1. At the end of June they rose to EUR 32.2. Following the successful turnaround at Pinguin Foods UK. Amounts payable in more than one year Financial liabilities make up more than 69. The reduction in the financial debts and trade payables was partly offset by the increase in the tax liability due to the very positive results of the Lutosa Group in the first half of the 2007 calendar year. 6. The deferred tax liabilities of Pinguin Group as at 30 June 2007 make up 23.2. Padley Vegetables is a producer of frozen vegetables operating in the UK market.129k) and the decrease in trade payables (EUR 6. In this regard. The deferred tax liabilities at Lutosa relate mainly to the valuation and tangible fixed assets according to the IFRS valuation rules.13. The consolidated financial statements of the Pinguin Group as at 30 June 2007 and the pro forma figures as at 30 June 2007 (6m) contain one month of sales and results in respect of these acquired activities. The impact on the sales and the positive contribution to the net profit amounted to EUR 3. As a result. in addition to the capital increase.2. Additional inventories of Padley Vegetables with a value of EUR 3. negative goodwill was included in the result in an amount of EUR 1. The main causes of this were as follows: the further reduction in financial debts as a result of normal repayments of the existing credits (EUR 6. Acquisition of certain activities and assets of Padley Vegetables on 1 June 2007 On 1 June 2007. In past years Pinguin has opted to consistently reduce its debt position. Amounts payable in one year or less The amounts payable in one year or less fell by EUR 8. This loan amount does not take into account the securitisation of trade receivables.608k as at the end of June 2007. The latter decrease is most marked at the Lutosa Group because of the large cash position resulting from the favourable market conditions since the second half of 2006. The deferred tax liabilities at the end of December amounted to EUR 29. Pinguin is currently negotiating with its bank consortium in order to also refinance the existing credits. is being entered into to finance the acquisition. This increase is due mainly to the inclusion of a deferred tax liability on the capital gain realised on the sale of the Ypres site and an additional deferred tax liability at Pinguin Aquitaine calculated on the difference in depreciation with regard to the fixed assets and related grants.5 million (accounted for at EUR 3. The acquired activities of Padley Vegetables have formed part of the consolidated group since 1 June 2007.1. Pinguin Foods UK acquired part of the assets and activities of Padley Vegetables Ltd in the form of an asset deal.1 million in the context of acquisition accounting) As a result of the acquisition accounting with regard to the acquired assets.14. These are being financed through trade payables.

136 . since the transaction did not take place until June 2007. those in Grimsby and Lowestoft were not acquired and the packing activities (part of the activities of the Easton site) were not acquired. The estimated impact of this restructuring on the Group will be approximately EUR 0. The impact of this amounted to EUR 0. It was carried out in part before 30 June 2007.2 million. In view of the fact that the above acquisition was signed on 17 August 2007 and completed on 10 September 2007. management reporting data are available for a period of nine months. Pinguin Group only acquired part of the activities. with additional estimates relating to the impact of the recent acquisitions of part of the activities of Padley Vegetables and Christian Salvesen Foods. In addition to the acquisition of certain assets.2. for Christian Salvesen Foods. For information.3. situated at Bourne. by no longer focusing solely on peas.The reported periods do not coincide with the 2006 calendar year: for Padley vegetables. These financial data have not been prepared in accordance with the accounting and valuation rules which are applied to the consolidated financial statements of the Pinguin Group or which will be applied in the subsequent consolidated financial statements of the Pinguin Group for these items and valuation rules which are specific to the acquired activities of Padley Vegetables and Christian Salvesen Foods. or in the pro forma consolidated figures of Pinguin Group (including Lutosa) as at 30 June 2007 (6m). This segment carries out the processing. the pro forma consolidated financial information of Pinguin and Lutosa is provided below.UK GAAP accounting and valuation rules were applied to the management reports of these activities before they were acquired by the Pinguin Group. Acquisition of certain activities of Christian Salvesen’s segment “Salvesen Food” On 10 September 2007.7 million. and this was included in the consolidated financial statements as at 30 June 2007 and the pro forma figures as at 30 June 2007 (6m). a restructuring was carried out. the site at North Thoresby has currently been shut down. from August 2006 to April 2007. The impact of the restructuring carried out after 30 June 2007 amounted to approximately EUR 1 million and was not included in the consolidated financial statements of Pinguin Group as at 30 June 2007 and the pro forma figures as at 30 June 2007 (6m). This transaction is currently being financed by means of bridge loans. This means among other things that this information has the following limitations: . the combination provides a critical size in order to ensure a constant high-quality supply of peas and improved capacity utilisation.included in the consolidated financial statements of Pinguin Group as at 30 June 2007 and the pro forma figures as at 30 June 2007 (6m) and not as at 31 December 2006. management reporting data are available for a period of 12 months. 6. As a result of the acquisition of the activities of Christian Salvesen Foods. As a result of the acquisition of these activities. Pro forma consolidated financial information for Pinguin and Lutosa in 2006. and are extrapolated over a period of 12 months. In addition to the advantages of improved processing principles.3. Pinguin Group completed the acquisition of certain activities of Christian Salvesen’s segment “Salvesen Food” for a total of EUR 26. The pro forma consolidated financial information for Pinguin and Lutosa for 2006 is supplemented with financial data relating to the acquired activities of Padley Vegetables and Christian Salvesen Foods. from April 2006 to March 2007.6 million. this acquisition was not included in the consolidated figures of Pinguin Group as at 30 June 2007. This information has been prepared for illustration purposes only and consequently does not represent the actual financial position and performance of the acquired Padley Vegetables and Christian Salvesen Foods. packing and storage of frozen vegetables at the sites in Lincolnshire.3. with additional estimates relating to the impact of the acquisitions of the activities of Padley Vegetables and Christian Salvesen Foods. The management expects to achieve substantial savings both in the production division and in the transport and logistics division. An agreement has been reached in this context with the 63 employees. North Thoresby and Easton. 6. . it also took over 259 employees as well as the bulk of the contracts relating to these activities.

Since the profit and loss account relates only to the operating result. On the basis of an estimated economic life of the material of six years. This adjustment has been made in the balance sheet and in the profit and loss account. In the case of the acquisition of Padley. The Pinguin Group has no access to these encryption mechanisms from the past. the full result has not been included in consolidated reserves. This bridge loan is included as a short-term liability. Christian Salvesen Foods All items are included as if the acquisition had taken place at the beginning of the 2006 calendar year. Revenues relate to sales from the acquired sites of Christian Salvesen Foods for the period April 2006 to March 2007. These balance sheet data do not yet include any adjustments for possible effects of the inclusion of identifiable assets. The tangible fixed assets were recorded at acquisition value of EUR 6. a depreciation charge is included in an annual amount of EUR 1.1 million. The consolidated reserves include only the depreciation charge for the year as well as the negative goodwill in the result. Padley Vegetables All items have been included as if the acquisition had taken place at the beginning of the 2006 calendar year. The consolidated reserves include only the depreciation charge in respect of the year. Since the profit and loss account relates only to the operating result. no inventories have been acquired at acquisition date.- - - The acquired assets of Christian Salvesen Foods are not valued at fair value. The acquired inventories were included at the acquisition value of EUR 19. The operating result has been adjusted only in respect of the depreciation on the basis of the acquisition value and the economic life. The acquisition of the activities of Padley Vegetables has been financed by means of vendor financing repayable over a period of six years. Moreover. On the basis of an estimated economic life of the material of six years. The acquired activities of Christian Salvesen Foods concern an asset deal relating to a division of the Christian Salvesen Foods Group whereby the Pinguin Group has not acquired the whole of the division. whereas the available data relate to the division in which the acquisition has taken place and in which the specific part of the acquired activities cannot be differentiated. pending the outcome of the discussions on the partial conversion of this bridge loan into long-term loans.2 million (including interest). liabilities and contingent liabilities at fair value in the context of acquisition accounting (cf. an initial repayment of EUR 0. The historical financial data contain a number of intragroup charges because some activities were carried out and managed at group level. The acquired tangible fixed assets have been included at the fair value of EUR 3.7 million.8 million. a depreciation charge is included in an annual amount of EUR 0. consequently no deferred taxes are recorded and no adjustment has been made to the goodwill as a result of the fair value adjustments. IFRS 3 – Business Combinations).5 million. The acquisition of the activities of Christian Salvesen Foods has been financed by means of a bridge loan in an amount of EUR 26. Thereafter the annual repayments amount to EUR 0. 137 .1 million has already been made. these on-charged costs may differ considerably from the real costs within the Pinguin structure. With regard to this financing.9 million. the full result is not included in consolidated reserves. This adjustment has been made in the balance sheet and in the profit and loss account.1 million. A rent contract is being entered into in respect of the buildings.

The revenue figure has been arrived at on the basis of a linear extrapolation of financial data for a period of nine months from August 2006 to April 2007.832 1.Goods for resale Receivables .810 CS Foods UK GAAP based Padley Vegetables UK GAAP based FIXED ASSETS Intangible assets Goodwill Tangible fixed assets .147 1.570 5.Investments Cash and cash equivalents Deferred charges and accrued revenues TOTAL ASSETS 5.768 2.Participating interests . The table below provides a pro forma balance sheet of Pinguin and Lutosa. in order to arrive at a period of 12 months. machinery and equipment .139 75.869 30 6.570 2.266 97.894 2.062 155 125 30 0 392 392 156.295 356.245 4. Pinguin Group including Lutosa Group All amounts in thousands of EUR IFRS CONSOLIDATED PRO FORMA BALANCE SHEET 31/12/2006 200. with additional estimates relating to the impact of the acquisitions of the activities of Padley Vegetables and Christian Salvesen Foods.Furniture and vehicles .Leasing and similar rights Financial fixed assets .079 138 . The operating result has been adjusted only to take into account the depreciation based on the fair value and economic life (EUR 0.5 million) and the negative goodwill included in the result (EUR 1.684 62.Other receivables Financial assets .5 million).Other tangible fixed assets .Land and buildings .Derivatives .339 68.Assets under construction and advance payments .430 1.570 All amounts in thousands of EUR Pinguin Group including Lutosa Group IFRS CONSOLIDATED PRO FORMA BALANCE SHEET 31/12/2006 106.504 3.6 million).Work in progress and finished products .917 1.Trade receivables . the additional contractual rental charges (EUR 0.832 19.075 26.600 2.022 18.768 2.768 5.800 19.799 8 80.570 25.Raw materials and consumables .461 573 102.371 9.Other receivables CURRENT ASSETS Inventories .Receivables Deferred tax assets Long-term receivables .617 113 2.116 CS Foods UK GAAP based Padley Vegetables UK GAAP based SHAREHOLDERS’ EQUITY -1.Plant.564 58.

The past figures therefore present a picture of a weaker cost structure which does not correspond to the current operations.111 4.250 -8.782 4.828 4. Pinguin has decided to restructure the activities.714 7.560 144.Issued capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions relating to pensions and similar rights Other provisions Financial debts .747 353 Accrued charges and deferred revenues TOTAL LIABILITIES 2.138 1.490 -325 1.138 14 283 76.250 113.162 1.800 25.705 50. with additional estimates relating to the impact of the acquisitions of the activities of Padley Vegetables and Christian Salvesen Foods.4 Additional comments with regard to the inclusion of the acquired assets of Padley Vegetables and Salvesen in the context of the abovementioned asset deals in the pro forma figures The operations acquired in the UK also recorded very weak performances in the past.586 6.Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable 113.301 65.Bond loans .110 1.716 65.747 26.245 6. as a result of which margins were under pressure and investments were low.156 -1.Financial leases .747 1.079 105.961 1.147 1.600 26.215 70. Pinguin Group including Lutosa Group IFRS CONSOLIDATED PRO FORMA INCOME STATEMENT 31/12/2006 All amounts in thousands of EUR CS Foods UK GAAP based Padley Vegetables UK GAAP based CONTINUED ACTIVITIES Revenues Operating result (EBIT) Of which: a) depreciation and amortization b) negative goodwill included in result 330.968 1. A number of these cost-saving initiatives are as follows: − Since the acquisition of Padley Vegetables. Pinguin is acquiring these activities with its own cost structure and with the intention of intervening rapidly in the costs of the acquired activities in order to raise these activities as rapidly as possible to the Pinguin level.621 41 62.Current portion of non-current financial liabilities .570 The table below provides a limited pro forma income statement of Pinguin and Lutosa.681 -1.153 1. it has already been announced that the number of employees at the Boston 139 . More particularly.Capital .Other Other liabilities Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities .367 14.384 356.Credit institutions . partly due to the competitive environment.138 353 353 26.3.654 46.073 -15.147 -514 1.332 402 29.Credit institutions .

7 million. 6. Pinguin is currently engaged in refinancing this debt. Pinguin NV is paying EUR 175 million for the shares of the Lutosa Group. A description of the impact of this transaction on the consolidated income statement and balance sheet can be found in section 6.6 million and has not yet been included in the consolidated financial statements of Pinguin Group or in the pro forma figures as at 30 June 2007 (6m).4 million and EBITDA amounted to EUR 20. Acquisition of Salvesen On 10 September 2007 Pinguin completed the acquisition of part of Christian Salvesen. the expected sales on an annualised basis are EUR 62 million (12 months). (ii) a revolving credit facility of EUR 50 million and a line for future investments of EUR 15 million with the same maturity date as the loan of EUR 75 million. It is currently working on a club deal in which its bankers will meet the entire credit requirement. the company’s contractual commitment to its bankers to repay 50% of the surplus cash flow whenever the leverage ratio is higher than 2. In the event of a dividend payment. namely the Christian Salvesen Foods segment for a total of EUR 26. if important assets are sold or if 140 . Debt refinancing Pinguin has financed the acquisitions of certain activities of Salvesen Food and the Lutosa Group by means of bridge loans. The club deal also provides for a partial early repayment obligation in a number of cases. More particularly. An agreement has been reached with the personnel in this context. A EUR 140 million credit facility is currently being negotiated.1.5 times EBITDA). This credit facility of EUR 140 million consists of (i) a term loan of EUR 75 million repaid in half-yearly instalments over a period of five years. At Salvesen. of which EUR 0.2 of this prospectus. R&D and its extensive commercial network further strengthen the Pinguin organisation. A description of the impact of this transaction on the consolidated income statement and balance sheet can be found in section 6.4 SIGNIFICANT EVENTS SINCE 1 JULY 2007 AND OUTLOOK FOR 2007 AND BEYOND The following significant developments have occurred since 1 July 2007: 6. the company must take into account the amount of the surplus cash flows after carrying out the cash sweep (i. Lutosa’s competences in the field of agriculture. This restructuring led to a claim as discussed in the Risk factors section. Lutosa Group On 26 June 2007.e. Pinguin NV reached an agreement with the Van den Broeke family concerning the purchase of all shares of the Lutosa Group.1.1. the site at North Thoresby has currently been shut down.2 million has already been included in the consolidated profit and loss account for the period to 30 June 2007. production.2.4. The management estimates the total restructuring cost to be EUR 1. Pinguin Group has decided to restructure the activities.− production site has been reduced from 189 to 90. which may give rise to a decrease in annual sales in future. Since the acquisition of certain activities of Salvesen Foods. The revenues of the Lutosa Group in the 2006 financial year amounted to EUR 183.4.3. Pinguin is taking a major step forward and widening its range of frozen potato products. technology. 6. It should also be noted that the Pinguin Group management has decided to rationalise the customer portfolios of both Padley and Salvesen.1. As a result of the acquisition.7 million.3 of this prospectus. The estimated impact of this restructuring is EUR 0.4.2 million. The intention is that Pinguin’s existing loans and the acquisition liabilities will be refinanced jointly. 6. The main circumstances are if the Deprez family no longer controlled Pinguin. The acquisition was completed on 28 September 2007.

the transaction will be structured as follows.000 and (ii) sells the ground itself to Dreefvelden NV for an amount of EUR 2. The IFRS valuation rules allow this form of financing to be kept off the balance sheet. Securitisation of trade receivables Primeur NV.6. These EUR 65 million will come from two transactions. Lutosa’s acquisition price takes account of the fact that the land and buildings are being converted into cash.1. On the basis of the agreement in principle. namely a securitisation of trade receivables and the disposal of Lutosa’s real estate. The cost of this operation is a financing cost (Euribor + margin).1. − The Consortium leases the buildings for a period of 15 years to Les Pres Sales NV. • Interest charges on EUR 64 million of credits for the acquisition of Lutosa are already included in the pro forma figures and amounted to EUR 3.5. these are compensated for by the fact that the margin on the financing is lower than the margin on the financial credits.4.4.8 million on a 12 month basis. 6. Pinguin will then have immediate access to the cash. with the option of acquisition by Les Pres Sales at the end of the lease for an amount of EUR 1. 6.500.4. The intention is that an amount of approximately EUR 45 million will be transferred in this way to a specialised financial institution. The impact on the balance sheet is that receivables would decrease by at least EUR 45 million and be replaced by cash on the balance sheet. Change of financial year 141 . In that case the company would have to repay part of the corresponding outstanding debt.4. Financing transactions Lutosa has sold its real estate by means of a sale and rent-back transaction. The only additional costs are the factoring fee and the risk premium. − Lutosa grants (i) a long-term lease to the Consortium for a period of 99 years in exchange for a one-off payment for ground rent of EUR 42. − Les Pres Sales NV rents the buildings to the concerned Lutosa companies for an amount of EUR 4. Vanelo NV. The income of the sale will be used to finance a part of the takeover price for Lutosa.1.250.7. In exchange. Pinguin has taken account of a liquidity position of EUR 65 million. In its acquisition price of EUR 175 million.4.Pinguin no longer controls the Lutosa Group. However.000. Moerbos NV and Van den Broeke-Lutosa NV. The intention is that the funds can be used immediately rather than waiting until payment is made by the customers.500. Securitisation of trade receivables Pinguin wishes to realise part of its receivables and part of the receivables of the Lutosa Group early. since it will only be finally decided on and concluded after the closing of the acquisition. This facility is not included in the pro forma figures.000 per annum (indexed annually) for a period of 15 years. Les Pres Sales NV (a company controlled by Food Invest International NV and the Van den Broeke family) and Dreefvelden NV (a company controlled by Veerle Deprez) have reached an agreement in principle with a consortium of banks consisting of ING. The company expects to refinance the debt by 15 November 2007. 6. in view of the fact that it involves a sale of receivables rather than an advance facility.750. a factoring fee and a premium as a percentage of the assigned revenues as compensation for the full transfer of the credit risk.282.1. Pinguin also transfers all of the remaining risk which is not covered by the credit insurance. 6. As a result of this transfer. There is a dual impact on the income statement: • Non-recurring structuring costs amounting to EUR 1 million. The impact on the income statement is limited due to the fact that Pinguin currently finances its working capital requirements through short-term credits with financial institutions. KBC and Fortis (the “Consortium”) concerning the sale of the buildings and grounds in the three Lutosa sites.

partly by adding products with higher added value. This growth will result from the introduction of its range of frozen meals in a large retail chain in Belgium (Delhaize) and co-operation which will be further expanded with a major French producer of frozen ready meals. Pinguin faces rising pressure on its raw material prices. it is expected that the gross profit and EBITDA margins will remain relatively stable in 2007 and 2008 and after the restructuring in the UK in comparison with the recently closed financial year: − The figures which Pinguin has published for the 2006/2007 year show that the negative spiral has been stopped and the past losses have been turned into profit. particularly in Central and Eastern Europe and Asia and by expanding its own sales organisation. Pinguin’s expectations are based on a further increase in the rationalisation of the customer portfolios at Padley and Salvesen. frozen ready meals are set to grow considerably from October 2007. Consequently. Here it will rely on the Lutosa Group’s well-spread network to achieve easier market entry in certain countries and with certain customers. With regard to profitability. but that instead of volume growth at the expense of margins the aim will be to achieve profitable retention. after a shortened accounting period on 31 December 2007. Outlook for 2007 and beyond The current financial year will be closed on 31 December 2007 and will comprise only six months of consolidated results for Pinguin NV. The financial year from 1 January 2008 to 31 December 2008 will be the first to provide a normal picture of the consolidated results of the Pinguin Group including recent acquisitions for a period of 12 months. Within the convenience products segment.1. Pinguin will do this by expanding its range. so that they fulfil Pinguin’s expectations as soon as possible. Pinguin will strive in the years ahead to expand the commercial area of operation by adding new countries. 142 . Frozen vegetables Pinguin expects to be able to generate revenues in excess of EUR 110 million in the frozen vegetable segment in the financial year to 31 December 2007 (including 3. Pinguin will change its financial year so that it will run from 1 January to 31 December. The sector has also had to contend with the rise of biodiesel and grain crops. It is possible that the aim will no longer be to achieve past levels of revenues.8. Pinguin also wishes to successfully implement the rationalisation of its most important geographic market – the United Kingdom – by rapidly restructuring and integrating its recent acquisitions in the UK.Pinguin’s financial year runs from 1 July to 30 June. In addition.5 months of Salvesen and six months of Padley). Pinguin has decided to close the first financial year. comprising (i) six months of Pinguin (prior to acquisitions of Lutosa and Salvesen but including six months of Padley Vegetables) (ii) the results of Salvesen since the acquisition on 10 September 2007 and (iii) three months of results for Lutosa since the acquisition on 28 September 2007. An important factor here is that due to the extreme weather conditions. This may have a negative impact on margins and results in 2008. The current financial year will thus only contain six months. Pinguin has decided to standardise the financial years of both groups. The farming organisations predict a price rise of 35% for 2008 compared to 2007. To that end.4. Following the restructuring abroad. Following the acquisition of the Lutosa Group. 2007. The first financial year to contain 12 months will run from 1 January 2008 to 31 December 2008. 6. Pinguin has a structure which must be reinforced in order to operate in a highly competitive environment. The raw material cost is an important component of the cost structure and is therefore very important in estimating profitability. the agriculture sector has faced difficult times in the past two years.

it was announced that Pinguin would centralise its packaging activities at the Westrozebeke site. On the basis of the fundamentals for the market and the competitive position of the company (further strengthened by the acquisition of Lutosa). it should be stated once again that in the potato segment the volatility of potato prices is higher than the volatility of frozen vegetables. Potato products For the potato segment. In the years ahead. revenues between October and December 2007 are estimated at over EUR 45 million. however. Pinguin will concentrate on integrating the activities in the United Kingdom. In addition. the management expects a sharp rise in the inventory position at the end of the financial year as a result of the seasonality of frozen vegetable production. Hence it is not possible to assume that the very good first half can be simply extrapolated into the second half of the year or into the future. With regard to gross profit. Pinguin Group (including Lutosa and Salvesen acquisition) The consolidated net margin in the current financial year (July 07 – December 07) will be negatively impacted by the non-recurring expenses related to the debt refinancing and the recent acquisitions. 143 . it is expected that potato prices will fall in the second half of the year. possibly accompanied by pressure on selling prices. these will form the basis for further success in the United Kingdom. the investments will focus primarily on replacement investments (estimated at around 2% of revenues) and a number of investment projects which have already been announced. Pinguin will implement and finalise the necessary restructurings and rationalisations in its British acquisitions as rapidly as possible. These investments are currently being implemented and should be fully operational within a few months. As a result of the forecast good potato harvest.− Pinguin relies on the fact that the investments made to ensure an increased return can be supplemented by additional rises in selling prices to customers in order to offset the expected rises in raw material prices. Pinguin is nevertheless assuming that it can maintain the same percentage of gross margin. On the publication of the 2005/2006 annual results on 22 September 2006. However. This will lead to a number of non-recurring expenses. Pinguin’s strategy is to concentrate on identifying additional opportunities for sustainable profitable growth. Since the subsequent financial years will close at the end of December. where it would also invest in the automation of the production flow and in the construction of an automated warehouse. In addition. Pinguin expects that these non-recurring costs will mainly be borne in the 2007 financial year.

80 -2.1.283 6.242 5.72 -0.441 -19.900 6.188 1.514 -24.703 10.683 -83.847 -5.900 -948 -1.110 -82.624 925 880 -3.628 149.455 144 . 2005/2006 AND 2006/2007 7. consumables and goods for resale Services and other goods Personnel costs Depreciation and amortization Reversal of impairment losses on assets Impairments.950 -609 -2.507 -8.441 286 -5.058 -1.065 8.546 653 30/06/2006 -410 -7.868 32 -334 -2.7.070 -35.742 887 -86 -1.16 -2.1.12 1.559 -799 -2.523 725 -3.463 -1.032 525 30/06/2005 147.235 -38.11 -0.12 1.1. CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL YEARS 2004/2005.586 147. write-offs and provisions Other operating expenses Operating results (EBIT) Financial income Financial expenses Operating results after net finance costs Taxes NET RESULTS FROM CONTINUING OPERATIONS DISCONTINUED OPERATIONS Total results from discontinued operations NET PROFIT OF THE CONSOLIDATED COMPANIES Share of the Group Minority interests Earnings per share (in € per share) Continuing and discontinued operations Basic Diluted Continuing operations only Basic Diluted 1.28 30/06/2007 6.558 -5.591 -22.968 -81.020 -6.096 2.748 -35.893 -3. Consolidated Income Statement Pinguin NV 30/06/2007 30/06/2006 30/06/2005 Year ended 30 June (in thousands of €) CONTINUING OPERATIONS Sales Increase/decrease in inventories Negative goodwill recognised in income statement Other operating income Raw materials.755 -1. FINANCIAL INFORMATION 7.252 -1.28 -2.11 -0.72 -2.175 -921 -7.732 -4.586 4.179 1.80 -0.183 -1.16 1.

073 28. of this Prospectus for the notes to the consolidated financial statements 2005/2006 and 2006/2007.Subscribed capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests NON-CURRENT LIABILITIES 145 .697 413 52.094 3.603 48.789 36.162 2.1.479 30/06/2005 22.750 35.233 27.158 30/06/2006 27.2.046 112.458 3.419 81 81 0 1.Furniture and vehicles .214 24.Under construction and advance payments Financial fixed assets .966 30/06/2005 53.101 23.Short term deposits Cash and cash equivalents Deferred charges and accrued income TOTAL ASSETS EQUITY AND LIABILITIES (in thousands of €) EQUITY Share capital .226 615 30/06/2006 54.3 of this Prospectus for the notes to the consolidated financial statements 2004/2005 and 2005/2006 and to section 7.897 2.141 20.4.139 0 428 428 58.136 821 58.007 18.292 19.582 35. Consolidated balance sheet 30/06/2007 60.570 1.472 29.750 0 -9.229 48.476 1.762 26.645 32.461 0 -13.Available-for-sale financial assets Deferred tax assets Long term receivables (over 1 year) .039 16.We refer to section 7. 7.162 86 86 6.Work in progress and finished goods Amounts receivable .567 470 164 152 108 108 0 531 531 59.204 0 0 0 1.111 113.Raw materials and consumables . machinery and equipment .456 30.Plant.963 975 133.954 33.461 36.Other CURRENT ASSETS Inventories .090 30/06/2007 46.Trade receivables .Other receivables Financial assets .085 265 53.678 29.795 2.344 -321 1.172 31.837 28.929 25.205 30 1.310 2.Derivatives .Land and buildings .Other tangible fixed assets .002 31.332 27.782 31.905 ASSETS (in thousands of €) NON_CURRENT ASSETS Intangible assets Tangible fixed assets .888 -138 354 23.229 -2.916 606 164 345 220 220 350 287 287 72.

500 -21 48.864 2.3 of this Prospectus for the notes to the consolidated financial statements 2004/2005 and 2005/2006 and to section 7.893 - 146 .Finance leases .205 6.785 33.806 354 89 133.705 0 714 2.054 6.302 0 7.936 33.223 3.039 Minority interests -351 12.637 0 808 2.546 - 354 653 - 22.1.393 0 27.461 Capitalreserves 0 -321 Hedging / Translation differences 0 -138 -7 -2.539 6. 7.007 32 27.229 Capital / Sharepremiums 36.575 6.900 -351 12.595 4.750 Capitalreserves Hedging / Translation differences 0 30 Retained earnings Attributable to equity holders of the parent 26.260 0 26.789 -2.936 7.026 65.868 Minority interests Total equity Consolidated of equity statement (in thousands of €) Balance as at 30 June 2006 Profit for the financial year Dividend payments Acquisition of own shares Translation differences Cash flow hedges Capital increase Capital decrease Other Balance as at 30 June 2007 Consolidated of equity statement (in thousands of €) Balance as at 30 June 2005 Profit for the financial year Dividend payments -9.018 26.719 0 5.Credit institutions .735 633 113. of this Prospectus for the notes to the consolidated financial statements 2005/2006 and 2006/2007.Bonds .835 4.435 -3.564 Attributable to equity holders of the parent 22.868 1.3.411 7.Provisions for pensions and similar rights Other provisions Financial liabilities .518 6.Other Trade payables Advances received on contracts Taxes payable Remuneration and social security Other amounts payable Accrued charges and deferred income TOTAL LIABILITIES 12 57 8.296 600 0 6.888 -3.344 Retained Earnings -351 12.879 681 2.561 1.603 Total equity -13.090 17 328 12.158 21 440 18.Credit institutions .546 1.635 70.500 -28 46.Current portion of non-current financial liabilities .348 32.052 3.435 3.390 66. Consolidated Equity Statement Pinguin NV Capital / Sharepremiums 35.582 6.479 We refer to section 7.676 27.698 274 283 112.081 829 1.603 25.Other Other amounts payable Deferred tax liabilities CURRENT LIABILITIES (> 1 year) Financial liabilities .610 34.765 1.500 -28 45.4.

152 208 1.205 Retained Earnings 168 7.679 184 741 58 505 0 564 8.188 -7.007 Minority interests 168 7.344 22 36.110 8.789 7.621 Consolidated cash flow statement (in thousands of €) CASH AND CASH EQUIVALENTS.183 -29 2.502 16 27.502 16 26.329 -58 -8.213 35.845 9.916 -3.243 -2.283 -20 6.258 175 -526 -274 -124 -1.062 -116 -284 0 -9 -1.012 1.461 0 -138 -13.414 -2.476 2.270 -1.173 5.502 -8.521 147 .629 -5.032 -171 525 16.731 5.351 28 -5.984 7.4.507 -138 14.570 8.296 2.585 5.750 Capital / Sharepremiums 22.239 -8.916 -7.Acquisition of own shares Translation differences Cash flow hedges Capital increase Capital decrease Other Balance as at 30 June 2006 Consolidated of equity statement (in thousands of €) Balance as at 30 June 2004 Profit for the financial year Dividend payments Acquisition of own shares Translation differences Cash flow hedges Capital increase Capital decrease Other Balance as at 30 June 2005 7. STARTING BALANCE CASH FLOW FROM OPERATING ACTIVITIES Operating result after net finance costs Income taxes Adjustments for non-cash items Depreciation of tangible fixed assets Amortisation of intangible fixed assets Increase/decrease (-) in special write-offs Increase/decrease (-) in provisions Increase/decrease in deferred charges and accrued income Negative goodwill recognised in income statement Other non-cash items (income) Increase/decrease in working capital Increase (-)/decrease in inventories Increase (-)/decrease in trade and other receivables Increase/decrease (-) in trade and other payables Other CASH FLOW FROM INVESTMENT ACTIVITIES Acquisitions (-) 1.878 -8.344 22 22.648 Financial year 2004/2005 (30/06/2005) 2.435 354 -138 14.013 5.304 -6.344 22 22.339 1.117 Capitalreserves 0 168 30 Hedging / Translation differences 8.642 -12.862 -40 -7. Consolidated cash flow statement Pinguin NV Financial year 2006/2007 (30/06/2007) Financial year 2005/2006 (30/06/2006) 1.585 -338 -2.575 Attributable to equity holders of the parent 16.1.213 16 -9.582 Total equity 0 0 -5.032 1.888 -138 14.590 -10 7.068 -7.

IFRIC 11 “IFRS 2 . which will become applicable in 2009.Capital Disclosures” (applicable to financial years beginning on or after 1 January 2007). as approved by the European Union. IFRIC 13 “Customer Loyalty Programmes” (applicable to financial years beginning on or after 1 July 2008).485 15.963 -55 -7.370 1. IFRS 8 “Operating Segments” (applicable to financial years beginning on or after 1 January 2009).787 3.554 12.596 -3.879 5. Amendment to IAS 23 “Borrowing Costs” (applicable to financial years beginning on or after 1 January 2007).476 7. • • • • • • • • • IFRS 7 “Financial instruments: Disclosures” (applicable to financial years beginning on or after 1 January 2007).Acquisition of intangible fixed assets Acquisition of tangible fixed assets Disposals Disposal of intangible fixed assets Disposal of tangible fixed assets CASH FLOW FROM FINANCING ACTIVITIES Reimbursement of long and short term funding (-) Capital increase NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS.479 5. 148 . IAS 1. Amendment to IAS 1 “Presentation of Financial Statements .879 0 3.532 95 1.570 -113 -7. subject to confirmation by the EU).1.Group and Treasury share Transactions” (applicable to financial years beginning on or after 1 March 2007). The presentation of the segment information might be influenced by IFRS 8 “Operating Segments”.593 1732 3 1. IFRIC 10 “Interim Financial Reporting and Impairment” (applicable to financial years beginning on or after 1 November 2006). Minimum Funding Requirements and their Interaction” (applicable to financial years beginning on or after 1 January 2008.485 -18.729 3.936 7.393 6.508 433 433 -3. The Group did not opt for early application of the following new standards and interpretations which were issued at the date of approval of these financial statements but were not yet effective on the balance sheet date.925 -6.000 -1. IFRIC 12 “Service Concession Arrangements” (applicable to financial years beginning on or after 1 January 2008).2.2. IFRIC 14 “IAS 19 – The Limit on a Defined Benefit Asset. FINANCIAL REPORTING PRINCIPLES Declaration of conformity The present consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRSs) published by the International Accounting Standards Board (IASB) and the interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC). 7. ENDING BALANCE -734 -11. At the present time the Group does not expect that the first-time adoption of these standards and interpretation will significantly affect the annual financial statements of the Group during the first application period.

The financial statements of subsidiaries and joint ventures are drawn up for the same financial year as that of the parent company. i.2. regardless of the existence of any minority interest. which are measured at fair value minus the cost of selling them. significant influence.e. investments in associated companies are initially recognised at cost and then adjusted to 149 .7. and • Minority interests’ share in changes in capital since the acquisition date. the power to direct the financial and operating policy of a company in order to benefit from its activities. after eliminating all material transactions within the Group. financial and operating decisions relating to this activity require the unanimous agreement of the parties sharing control. The financial statements of joint ventures are included in the consolidated financial statements from the date that the parent company gains joint control until the date that it loses this joint control. except where the minority interests have a binding obligation to make additional investments in order to offset the losses. its subsidiaries. but has no control over the entity's financial and operating policy. The cost of a business combination is measured as the total fair value. the difference must be recognised in the income statement immediately after revaluation. These companies are accounted for by the proportional consolidation method. of relinquished assets. Acquisitions of subsidiaries and joint ventures are recognised by the acquisition method. The financial statements of subsidiaries are included in the consolidated financial statements from the date that parent company gains control until the date that it loses control. i. Subsidiaries Subsidiaries are those companies over which the parent company has control. At 30 June 2006 and 30 June 2007 the Group had no interests in joint ventures.e. The difference between the cost of the business combination and the Group’s interest in the net fair value of the identifiable net asset is recorded as goodwill.e. Where the cost of the business combination is less than the Group’s interest in the net fair value of the identifiable net asset of the purchased subsidiary. Business combinations Business combinations are entered into the accounts using the takeover method.2. with the exception of fixed assets held for sale in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”. The balance and any further losses applicable to the minority interest are deducted from the Group’s own interest. The losses in a consolidated subsidiary attributable to the minority interests may be greater than the minority interest in the equity of a subsidiary. Minority interests Minority interests in the net assets of consolidated subsidiaries are identified and presented in a separate line under Group capital. at the date of exchange. i. Joint ventures Joint ventures are enterprises in which the Group enters into a contractual agreement with one or more parties to undertake an economic activity over which they have joint control. directly or indirectly. based on uniform financial reporting principles for comparable transactions and other occurrences in similar circumstances. that the strategic. Identifiable acquired assets. issued ‘equity instruments’ and liabilities entered into or taken over. Consolidation principles The consolidated annual financial statements consolidate the financial data of Pinguin NV and the enterprises over which it has control. along with certain costs directly attributable to the business combination. Investments in associated companies Associated companies are companies in which the Group exercises. measured in accordance with IFRS 3 – Business Combinations – see below in these notes. and assets and liabilities of associated companies are recorded in the consolidated financial statements by the equity method. Under the equity method. Subsidiaries are fully consolidated. except where the investment is classified as held for sale and then needs to be accounted for in accordance with IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations. Minority interests in net assets consist of: • The amount of minority interests at the time of the original business combination. This situation is assumed to exist when Group holds 20% or more of the companies’ voting rights. The results. liabilities taken over and conditional liabilities which are part of a business combination are initially measured at their fair value at acquisition date.

Foreign exchange differences resulting from the settlement of monetary items or from the conversion of monetary items at exchange rates that differ from those at which they were translated when first recognised are recognised in the income statement in the period in which they occur as realised or unrealised translation gains or losses. are eliminated when preparing the consolidated financial statements. Consolidation eliminations All intra-group balances and transactions with subsidiaries. Unrealised gains on transactions with associated companies are eliminated in the amount of the Group's interest in the entity. is recorded by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency on the date of the transaction.reflect changes in the investor’s share in the net assets of the company subsequent to acquisition. with the difference that they are eliminated only where there is no indication for recording an impairment.44730 € Average rate 30 June 2006 1. The Group enters into term contracts to hedge against exposure to certain exchange rate differences.48043 € Closing rate 30 June 2006 1. For the purpose of drawing up the consolidated annual accounts. The benefits and charges in each income statement (including the comparative figures) are translated at the average exchange rate. Non-monetary assets and liabilities are converted at the exchange rate on the transaction date.3 – Risk Management Policy. Realised or unrealised translation gains and losses are recognised in the financial result. the results and the financial position of each entity are expressed in Euros. Transactions in foreign currencies A transaction undertaken in a foreign currency. the functional currency of the parent company. 150 . 7.3. At 30 June 2006 and 30 June 2007 there were no associated companies.48720 € Average rate 30 June 2007 1. including unrealised gains on intra-group transactions. Conversion of foreign currencies The individual financial statements of each group member are presented in the currency of the primary economic environment in which the entity is active (its functional currency). less any impairment in the value of individual investments.46934 € The average rate has been calculated over the past twelve months. Losses of an associated company that exceed the Group’s interests in the associated company (also including all long-term interests which are in essence part of the Group's investments in this associated company) are not recorded. and that in which the consolidated financial statements are presented. non-monetary assets and liabilities of foreign entities having a functional currency other than the Euro are translated at the closing exchange rate at the balance sheet date.49630 € Average rate 30 June 2005 1. when first recorded in the functional currency.46149 € Closing rate 30 June 2005 1. See note (u) on the measurement rules for this type of financial instrument and to note 7. The following exchange rates were used in preparing the financial statements: 1 Euro is equal to GBP 1 Euro is equal to GBP Closing rate 30 June 2007 1. On every balance sheet date. where this type of instrument is analysed more closely. Financial statements of foreign entities Monetary assets.2. The same elimination rules apply to unrealised losses as for unrealised gains. monetary items in a foreign currency are converted on the basis of the closing rate. All resulting translation differences are recognised in a separate equity line. Unrealised profits on transactions with associated enterprises are eliminated against the participating interest in these entities.

Intangible assets having a limited useful life are amortised over their expected useful life by the straight-line method from the date on which the asset was available. licenses and ownership and similar rights acquired from third parties or acquired by contribution. when first recognised as held for sale. Intangible assets Intangible assets consist of titles.4.2. less the cost of sale. are measured at the lower of carrying amount and fair value. The following useful lives are applied: Software Development costs Licences and ownership rights 5 years 5 years 5 years Where the fair value is lower than the carrying amount calculated in this way. software. Given that it is geographic elements that determine the Group’s risks and returns. based on the location of the assets. an impairment loss will be recorded in the income statement. Intangible assets with unlimited useful life Intangible assets with unlimited useful life are recorded at cost. but these will be assessed annually to determine whether any impairment has taken place. The Group classifies a non-current asset (or a group of assets being disposed of) as held for sale when its carrying amount will be realised mainly in a sales transaction and not through the continued used of the same. Where the recoverable value of these intangible assets is lower than their book value. which is expected to be recognised as a completed sale within one year of the classification date. Intangible assets with limited useful life Intangible assets with limited useful life are recorded at cost less accumulated amortisation and any accumulated impairments. 7.6. No amortisation is taken on intangible assets with unlimited useful life.2. Non-current assets and groups of assets to be disposed of.7. Immediately before the asset is classified for the first time as held for sale the Group will measure the carrying amount of the asset (or of all assets and liabilities in the Group) in accordance with the applicable IFRS standards. Impairment losses are recorded in the event of any initial or later write-down of an asset (or group of assets to be disposed of) to the fair value minus the costs of selling it. Management must have committed to a plan for selling the asset (or group of assets being disposed of). which represents a separate significant operating activity and is part of a single co-ordinated plan to be disposed of as a separate significant business activity. Segmented information IAS 14 defines a business segment as a clearly distinguishable part of the Group providing individual goods or services within a specific economic environment and which has a different return and risk profile from the other business segments. its primary segmentation basis is geographic. 7. This condition is fulfilled only when the sale is highly probable and the asset (or the group of assets being disposed of) is immediately available for sale in its present state.5.2. 151 . impairment losses will be recorded in the income statement. Non-current assets held for sale and discontinued operations A discontinued operation is a component of the Group that has either been disposed of or is classified as held for sale. The division by business activities as a secondary segmentation basis is irrelevant given that all products are deep-frozen products. along with internally generated software. The remaining useful life and the amortisation method are assessed annually during the financial year end closing. At the balance sheet date no intangible assets with unlimited useful life were identified. Non-current assets held for sale are no longer depreciated.

Capitalised development costs are written off on a straight-line basis over the expected useful life. and then against the other assets of the unit in proportion to the book value of each asset in the unit. Property. The cost consists of the initial purchase price together with all directly attributable costs incurred in order to make the asset able to function in the intended manner (non-refundable taxes. and also whenever an indication exists that the unit may have undergone an impairment. When a subsidiary. transport). plant and equipment Owned assets Property. financial and other resources to complete the development and to use or sell the intangible asset. Where the Group’s interest in the net fair value of the identifiable assets. 7. on the other hand. The cash generating unit to which goodwill is attributed is tested annually for impairment. the remaining surplus will be taken directly into the income statement upon revaluation. and subsequently measured at cost less any accumulated impairments. is included in the balance sheet only if: • • • • • • the product or process is technically or commercially realisable. the Group intends to complete the intangible asset and either use it or sell it. the Group can reliably assess the expenditure allocated to the intangible asset during its development in a reliable way. plant and equipment are measured at cost less accumulated depreciation and any accumulated impairments. 152 . Where the recoverable value of the unit is lower than its book value. The recoverable value is the higher of. direct wage costs and a proportionate share of the production overhead. from the time that the product or process is ready for use. the Group’s interest in the net fair value of the identifiable assets. where the results are applied to a plan or a design for producing new or significantly improved products and processes.Research and development Research expenditure undertaken with a view to acquiring new scientific or technical knowledge and insights is charged to the income statement when incurred. at acquisition date. on the one hand. the assets are demonstrably likely to generate future economic benefits. 7. joint venture or associated company is sold. liabilities and conditional liabilities of the acquired party. An impairment recognised against goodwill may not be reversed at a later date. Development expenditure. the goodwill attributed to it will be taken into account when determining the gain or loss on the sale. of it value in use.8.2. by comparing the book value with its recoverable value. so that it can function in the way intended by management. Goodwill Goodwill occurs whenever the cost of a business combination exceeds.7. Financing costs are not capitalised. the Group has adequate technical. The capitalised amount contains all costs that are directly attributable to the bringing into being and production of the asset. liabilities and conditional liabilities exceeds the cost of the business combination.2. an impairment will first be recognised against the book value of the goodwill attributed to the unit. The cost of self-produced assets includes the cost of the materials. the fair value minus sales costs and. Goodwill is initially recognised as an asset at cost. the product or process can be used or sold.

Depreciation Depreciation is recorded by the straight-line method over the expected useful life of the asset. Finance leases At the beginning of the lease period.Subsequent costs Subsequent costs are included in the carrying amount of the asset or recognised as a separate asset. Changes in Accounting Estimates and Errors”. finance leases are recognised as assets and liabilities at amounts equal to the fair value of the leased asset or. The depreciation amount is charged to the income statement. Initially the following expected useful lives are applied: • • Buildings Plant. 153 . the expected period of use is equal to the useful life of the asset. The minimum lease payments are recorded partly as financing costs and partly as repayment of the outstanding obligation. The depreciable amount of a leased asset is systematically attributed to each reporting period during the period of expected use.2. on a basis consistent with the depreciation principles applied by the lessee to its directly owned assets. Otherwise the asset is depreciated over the shorter of lease period or the useful life. The remaining value and the useful life of an asset are reviewed at least at the end of every financial year. the change(s) are treated administratively as a change in estimate in accordance with IAS 8 “Accounting Policies. except where another systematic form of allocation is more representative for the time pattern of the user’s benefit. Benefits (to be) received as an incentive to conclude an operating lease agreement are also spread pro rata temporis over the lease period. The corresponding liability towards the lessor is recorded in the balance sheet as a liability under a finance lease. Operating leases Lease payments on operating leases must be charged to income pro rata temporis during the lease period.9. are recognised in the income statement. where lower. which are the difference between the sales price and the carrying amount of the assets being disposed of. and where expectations differ from previous estimates. machinery and equipment o Production o Packaging o Energy o Other Furniture and vehicles Other equipment 18 years 13 years 12 years 13 years 12 years 6 years 5 years • • Gains and losses on the disposal of fixed assets. 7. All other forms of leases are regarded as operating leases. at the present value of the minimum lease payments. When it is reasonably certain that the lessee will acquire ownership at the end of the lease period. All other repair and maintenance costs are recognised in the income state when incurred. Leasing A leasing agreement is classified as a finance lease when almost all the risks and benefits of ownership are transferred to the lessee. The depreciation of an asset begins as soon as it is ready for its intended use. Financing costs are allocated to each period of the total lease period in such a way as to give a constant periodic rate of interest over the remaining balance of the obligation. No depreciation is taken on land and on properties under construction. but only when it is probable that the future economic benefit linked to the item will flow to the Group and when the cost of the item can be reliably assessed. Conditional lease payments are charged to income in the periods in which they are made.

(b) Financial assets for trading purposes. Inventory is written-down monthly on the basis of its market value. Impairment losses are recognised directly in the income statement. The recoverable value is the estimated sales price in the ordinary course of business. as to whether there are indications that impairment loss needs to be recognised for a particular asset. an assessment is made. and where subsequent changes in fair value are passed through the income statement. This includes derivatives that do not serve to hedge a specific transaction. 7.2. the carrying amount of the asset is increased up to the revised estimate of its recoverable amount. the transaction costs must be charged to income immediately. Grants related to income are presented as Other Operating Income. but in such a way that the increased carrying amount is no higher than the carrying amount that would have been determined if no impairment had been recognised on the asset in earlier years. including transaction costs. An impairment loss is recognised whenever the carrying amount of an asset.2. The average stock price of each subgroup is compared with the average open contract price for the same sub-group. in respect of the Group’s tangible and intangible assets. Reduction in value – writing down of the inventory based on the recoverable value When the open contract price is not known. The purchase and sale of financial assets are recognised at completion date. Impairment of tangible and intangible fixed assets In accordance with IAS 36. which is equal to the fair value of the purchase price.Government grants Government grants are recognised at the time when reasonable certainty exists that the Group will fulfill the conditions attached to the grants and the grants will be received. Whenever an impairment is reversed. The costs of conversion include all direct and indirect costs that are necessarily incurred in bringing the inventories to their present location and situation. Grants related to assets are deducted from the carrying amount of the assets concerned. The recoverable value of an asset or a cash flow-generating unit is the fair value after deducting the cost of selling it or its value in use. Criteria for the valuation of financial assets Financial assets are initially measured at cost. Financial assets measured at fair value via the income statement These include: (a) Financial assets which are initially recognised and measured at fair value. 154 . is higher than the recoverable amount. A government grant received by way of compensation for costs or losses already incurred or with a view to granting immediate financial support to the Group with no future related costs. Government grants are systematically recorded as income over the periods needed in order to attribute these grants to the related costs that they are intended to offset. This means that an asset is recognised on the date that it is received by the Group. or the cash flow generating unit to which the asset belongs. the recoverable value of the asset is estimated. we take the average sales price of the past 12 months. or net recoverable value. A reversal of an impairment loss is recognised directly in the income statement.10. at each balance sheet date. Financial assets Criteria for the first-time recognition and for the de-recognition of financial assets. Where an indication exists of such impairment.12. To determine the value in use. first-out) method. and that it is de-recognised on the date that the Group disposes of it. Inventories Inventories are measured at the lower of cost (cost of purchase or costs of conversion) by the FIFO (firstin.11. the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the specific risks attached to the asset. 7. For derivatives. 7. less the estimated costs of completion and the necessary costs of sale.2. is recorded as income for the period in which it is received.

Both these categories are measured on recognition at their fair value. the accumulated profit (or loss) previously included in equity is transferred to the income statement. and the fair value of which cannot be reliably determined.14. sale. short-term (< 3 months) investments. with subsequent changes in this fair value passed through the income statement. When the participating interest is sold. 7. 7. Loans and receivables include here trade receivables. Provisions Provisions are set up in the balance sheet whenever the Group has an existing (legally enforceable or de facto) obligation deriving from a past event and it is probable that an outflow of resources representing economic benefits will be necessary in order to complete the transaction.2. Based on an examination of all amounts outstanding at balance sheet date.15. doubtful receivables are estimated based on an assessment of all outstanding amounts. Trade and other receivables Short-term trade receivables and other receivables are initially measured at fair value. or when the carrying amount of the participating interest is written down owing to an impairment. An impairment loss is recognised in the income statement in the amount of the difference between the carrying amount of the receivables and the current value of the estimated future cash flows. 7. Own shares Own shares are deducted from equity and reported in the statement of changes in equity. Dividends Dividends are recognised as amounts payable in the period in which they are formally allotted.13.2. No gain or loss is recognised on the purchase.2. Financial assets available for sale are classified under the participating interests heading of financial fixed assets. after initial recognition at fair value in the balance sheet. Available-for-sale financial assets Assets available for sale are measured. are recognised at their historical cost minus any impairments. Cash and cash equivalents Cash and cash equivalents consist of cash and call deposits. issue or cancellation of own shares. Investments in equities that are classified as financial assets available for sale but for which no price quotation on an active market is available. an estimate is made of all loans and receivables of which the collection is doubtful. amortised using the 'effective interest method' minus any impairments. At the end of the financial year.2. the amount of which is known and which contain no material risk of reduction in value. Gains and losses deriving from changes in the fair value of assets available for sale are recorded directly to equity. cash and cash equivalents. 7. Loans and receivables Loans and receivables are measured at amortised cost less impairments. Valuation allowances are recognised in the income statement whenever an objective proof exists that the asset has reduced in value.16. and the amount of the obligation 155 . other receivables. Transaction costs directly attributable to the acquisition of treasury shares (after deducting any taxes) are also deducted from the equity attributable to the shareholders of the company. received or otherwise disposed of. short-term financial assets. The amount of the valuation allowance is determined as the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the original effective interest rate at the time of first recognition. cheques and highly-liquid short-term investments that can be immediately converted into cash. Equity instruments Equity instruments of the Group are not revalued. Financial fixed assets held until maturity Assets held until maturity are measured at cost.

are spread over the expected average remaining careers of the entitled employees. This bandwidth is determined separately for each defined pension obligation. or in the recognition of a loss only as the result of an actuarial gain in the present financial year. In this case the actuarial gains and losses are recognised directly whenever the deferral of the same would result in the recognition of a gain only as the result of an actuarial loss in the present financial year. Actuarial gains and losses consist of experience adjustments (resulting from differences between the previous actuarial assumptions and what has actually occurred) and of the results of changes in actuarial assumptions. The present value of the gross obligation and the pension costs relating to the year of service and any pension costs for past service are calculated by a qualified actuary using the ‘projected unit credit’ method. any recognised past service pension costs. Obligations relating to these plans are recognised directly in the income statement at the time incurred. of the expected future payments that will be necessary to fulfill the obligation resulting from the employee’s service during the current period and in past periods. The discount rate used is equal to the return. Reorganisation or restructuring A provision for reorganisation costs is recorded where the Group has approved a detailed formal reorganisation plan and has created a valid expectation among those involved that the reorganisation will be carried out by beginning to implement the plan or by informing the parties involved of the key features of the same prior to the balance sheet date. the past service pension costs are charged directly to income. 7. In such schemes the actuarial risk and the investment risk are borne entirely by the employee. eventually discounted where the time value of money is a relevant factor. Where benefit rights can be regarded as vested as the result of new rules or changes in existing rules. In the case of defined pension obligations the amount shown in the balance sheet (the net obligation) corresponds to the present value of the gross obligation less the fair value of the fund investments. past service pension costs are also recognised immediately whenever the deferral of the same would result in the recognition of a gain only as a result of an increase of past service pension costs during the current financial year. at the balance sheet date. In this case.2. an asset item is recognised only to the extent that this is not higher than the total of the unrecognised accumulated actuarial net losses and past service pension costs and the present value of future repayments from the scheme or reductions in future contributions to the scheme (the ‘asset ceiling’ principle).17. and which derive in the current period from the introduction of. of first class industrial bonds having a remaining life comparable to that of the Group’s obligations.can be reliably estimated. but to the extent that their cumulative amount falls outside a predetermined ‘bandwidth’. and has a lower and upper limit of 90% and 110% respectively of the greater of the current value of the gross obligations and the fair value of the fund investments. Defined pension schemes Defined pension schemes are dependent on the number of years’ service and the remuneration level. the recognised actuarial gains and losses and the effect of changes in the ‘asset ceiling’. spread on a straight-line basis over the average period remaining until the rights to the benefits are vested. 156 . The amount recognised as a provision is the best estimate at the balance sheet date of the outflow needed in order to fulfill the existing obligation. or other long-term employee benefits. Where the obligation to be recorded in the balance sheet is negative. Employee benefits Pension obligations Pension obligations Employee pension plans at Pinguin take the form in Belgium of ‘defined contribution’ schemes. the expected return on fund investments. Actuarial gains and losses are in principle not recognised at the time they occur. The present value of a gross defined benefit obligation is the present value. prior to deduction of fund investments. In the income statement the pension costs attributed to the present year of service and the recognised past service pension costs are taken into the operating result and the other elements into interest income and costs. adjusted for non-recognised actuarial gains and losses and for any unrecognised past service pension costs. Past service pension costs refer to the increase in the present value of the gross obligation in respect of services rendered by employees in past years. Past service pension costs are charged gradually to income. The amount recognised in the income statement consists of the following elements: the pension costs attributed to the present year of service. or changes in post-retirement benefits.

The Group has no defined pension schemes. after deducting all liabilities.2. The difference between the income (net of transaction costs) and the redemption value is recognised in the income statement over the life of the loan by the effective interest method. Interest-bearing liabilities Interest-bearing liabilities are measured initially at fair value. Other long-term employee benefits Other long-term employee benefits consist of future remuneration to which employees are entitled based on services rendered during the present or previous periods. Subordinated bond loans Loans are initially recorded in the financial statements at fair value. net of transaction costs. Equity instruments and interest-bearing liabilities: the distinction Equity instruments and interest-bearing liabilities issued by the Group are classified on the basis of the economic reality of the contractual agreements and the definitions of the interest-bearing instrument and the equity instrument. not taking into account the impact of market price-unrelated conditions. An equity instrument issued by the Group is recognised under equity on the basis of the income received less direct transaction costs. 157 .2. no bandwidth is applied and all past service costs are recognised immediately. The Group has no other long-term employee benefits. equity is increased by the amount of the monies received. interest-bearing liabilities are recognised at their amortised cost.2.19. except that all actuarial gains and losses are recognised immediately. After initial measurement. the impact of the revision of the original estimates is recognised in the income statement with a corresponding entry to equity over the remainder of the vesting period. Bank loans Interest-bearing bank loans and overdrafts are measured initially at fair value after deduction of transaction costs. These benefits are treated in the same way as defined pension schemes. If and when the options are exercised. and are subsequently measured at their amortised cost calculated according to the effective interest method. 7. Trade and other payables Trade and other payables are measured at amortised cost. with the difference between the initial amount and the redemption value amount taken into the income statement pro rata temporis based on the ‘effective interest’ method. The fair value of the services received from employees is recognised as an expense. 7.2. Share-based payments Share option programmes and warrant plans enable employees and senior management to acquire shares in the company. less attributable transaction costs. At each balance sheet date the Group revises its estimates of the numbers of share options that will become unconditional. Equity instrument An equity instrument is any contract that consists of a remaining interest in the Group's assets. 7. and then at amortised cost. 7.21.20. Account is taken of market price-unrelated conditions in the assumptions concerning the expected number of share options that will become unconditional. Where applicable. The total amount to be recognised as an expense during the vesting period is determined on the basis of the fair value of the share options granted.18.

Credit risk Credit risk is the risk of a counterparty or its bank being unable to fulfil its contractual obligations. Hedging instruments The Group has opted not to apply hedge accounting. financial and investment activities. In addition. These agreements are concluded in order to minimize the Group’s foreign exchange risk. These instruments reflect the way the company finances its credit needs with short-term fixed-rate borrowings. The current tax liability is based on the fiscal profit for the year. Income taxes Income taxes consist of current and deferred taxes. interest rate swaps and other derivative instruments to control the impact of foreign currency and interest rate fluctuations. Combinations of call and put options are used to minimize the hedging costs. Interest rate risk For managing interest rate risk the Group makes limited use of financial instruments with a view to reducing the impact of any interest rate rises. the balance is recorded as an asset. The current tax is the amount of income tax owed on the taxable profit for the period. for all temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding fiscal carrying amount used in calculating the fiscal profit. This amount is calculated based on local tax rates (or tax rates for which the legislative process is essentially completed) at balance sheet date. with changes in value being passed through the income statement. It is Group policy not to speculate in financial derivatives.7. These financial instruments are used solely to hedge exposure to currency and interest rate risks.2. to purchase (call option) or sell (put option) a specified quantity of foreign currency (GBP) at an agreed price during a specified period or at a specified date. or part of the period of a borrowing. formulating collection procedures and setting credit limits. in so far as not already paid.23. In general deferred tax liabilities are recognised for all taxable temporary differences.22. are treated for accounting purposes as financial assets or financial liabilities measured at fair value. The Group uses foreign currency buy and sell options. Current taxes for the current and prior periods are. Where the amount already paid in respect of the current and prior periods is greater than the amount due in respect of this period. Should the Group decide in the future to apply hedge accounting. but not the obligation. recognised as a liability. Derivatives Financial risk factors The Group uses derivatives to limit risks relating to unfavourable foreign currency and interest rate fluctuations arising out of operating. An interest rate cap protects the holder of this financial instrument against interest rates rising above a predetermined level. Foreign exchange risk The Group concludes agreements giving it the right to purchase (forward purchase) or sell (forward sell) a specified quantity of foreign currency. together with any adjustments relating to prior periods. the Group concludes agreements giving it the right. An interest rate swap involves swapping interest rate conditions during the period. 7. The option-holder pays the seller a premium as compensation for the risk during the life of the agreement. mainly in respect of a significant portion of the activities undertaken with countries outside the Eurozone (UK). a formal documentation system would then be implemented in order to identify the underlying transaction as fast as possible when entering into new contracts. Derivatives that represent economic hedging but do not fulfill the strict hedge accounting criteria as prescribed in IAS 39 “Financial Instruments: Recognition and measurement. whilst an interest rate floor protects against interest rates falling below a pre-determined level. Such liabilities and receivables are not recognised when the temporary differences result from the first-time recognition of 158 . and deferred tax assets are recognised to the extent that taxable profits are available for offsetting against deductible temporary differences. in order to establish whether the hedging instrument squares with the Group’s risk management and to test the appropriateness of the hedging instrument on a permanent basis.2. The Group reduces this risk by means of an active debtor policy including such steps as formulating payment conditions. Deferred taxes are recognised based on the ‘liability’ or balance method.

goodwill or from the first-time recognition (other than in a business combination) of other assets or liabilities in a transaction that has no effect whatsoever on the pre-tax profit. unless the Group is able to determine when the temporary difference reverses and it is likely that the temporary difference will not reverse in the near future. Deferred tax assets and liabilities are measured at the tax rates that are expected to be applicable to the period when the asset is recovered or the liability is settled. the costs already or still to be incurred in respect of the transaction can be reliably measured. nor on the fiscal profit. The main temporary differences relate to the depreciation of tangible fixed assets. the effect of changes in the way value adjustments are recognised on inventories. Post-balance sheet events that refer back to situations that existed at the balance sheet date are incorporated into the financial statements.27. e. income and costs. or to recover the asset at the same time as settling the liability.2. Post-balance sheet events Post-balance sheet events concern the period between the balance sheet date and the date of approval of the publication of the financial statements. Revenue is measured at the fair value of the compensation received or to which entitlement is obtained. to the benefit of the deferred tax asset. estimates and assumptions that can have an impact on the reported amounts of assets and liabilities. conditional liabilities and assets. the Group retains no de facto control or involvement which normally belong to the owner. b.26. The carrying amount of a deferred tax liability must be assessed at every balance sheet date. it is probable that the economic benefits relating to the transaction will flow to the Group. 7. 7. taking into account the amount of any trade. financial or volume discounts given by the Group. 159 .2. branches. unless they refer to elements recognised directly to equity. The Group will lower the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient fiscal profit will be available to permit its application. and represents the amounts due and payable for goods and services delivered in the normal course of business. in part or in whole. c. Use of estimates Preparing the financial statements in accordance with IFRS requires management to make judgements. d. the recognition of grants and the booking out of the seasonal correction. Dividend income from investments is recognised whenever the shareholders' rights to payment have been acquired. Interest is recognised by the ‘effective interest method’ as specified under IAS 39 – “Financial Instruments: Recognition and Measurement”. Deferred taxes must be taken as income or expenses into the income statement of the period. the essential risks and benefits of ownership are transferred. the amount of the revenue can be reliably determined.2.2. Post-balance sheet events that refer to situations arising only after the balance sheet date are mentioned in the notes only if they can have a significant impact. Revenue Revenue from the sale of goods is recognised when: a. Deferred tax liabilities are recognised for all taxable temporary differences relating to investments in subsidiaries.25. and elements thereof that are mentioned in the notes. associated companies and interests in joint ventures. Financing costs Financing costs are recognised as an expense in the period in which they are incurred. 7. Current tax assets and liabilities are offset only if the entity has a legally enforceable right to offset the recognised amounts and intends to settle the liability on a net basis. 7.24. in which case the deferred tax is also recognised directly to equity.

As at 30 June 2005 Euragra SA was included under France and Pinguin Salads BVBA under Belgium. including portion of the general income and costs that can be reasonably allocated to the segment. NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS 2005/2006 and 2004/2005 7. At every reporting date the group examines whether any indication exists that an impairment recorded on an asset in a previous reporting period has reduced or no longer exists. the Group takes into account elements such as budgets and long-term strategies.1 Primary reporting Segment (Geographical Segment) For both production and internal reporting purposes Group is organized into geographic regions: Belgium. • • • The estimates. It has therefore opted for geographically segmented reporting. this activity having been transferred to the Belgian entity after the closure of Euragra. judgements and underlying assumptions relate primarily to determining impairments of the tangible fixed assets. taking advice in particular from outside experts. We refer to note 5 for more detailed information.1. The closure of Pinguin Salads BVBA. Pinguin Aquitaine SAS : consists of the production entity at Kings Lynn (Norfolk). In estimating this. The actual outcomes can differ from these estimates. The recording and calculation of provisions for tax and environmental risks and for restructurings. Segment reporting 7. Nor can it be regarded as a discontinued activity as Euragra was not viewed as a separate ‘business’ prior to closure. Pinguin Foods UK Ltd : consists of the MAC Sarl and Pinguin Deutschland GmbH sales offices. Deferred tax assets: Deferred tax assets relating to deferred tax losses are recognised only to the extent that is probable that sufficient taxable profit will exist in the future in order to recover the carried-forward tax losses. The Pinguin Group has its production facilities in the most fertile regions of these three countries. IFRS 5 – “Fixed Assets Held for Sale and Discontinued Activities” does not apply to Euragra’s assets.3.The estimates made on the reporting date reflect conditions as they existed on that date. Management believes that a reasonable basis exists for the estimates and assumptions and that these reflect in the best possible way the outlook for Pinguin. is viewed as a discontinued activity and its activities are therefore included separately within the Belgium segment. The geographic segments are based on the location of the assets and form the basis on which the “Pinguin Group” reports its primary segment information. 160 .3. via: • Belgium : consists of Pinguin Westrozebeke NV. The main estimates. 7. The estimates and underlying assumptions are constantly reassessed. as the entire production apparatus has been physically transferred to Belgium.1. judgements and related assumptions as described above are based on past experience and on various other factors that are considered reasonable in the given circumstances. As at 30 June 2006 the entire operations of the former Euragra were included in the segment reporting for Belgium. on the other hand. deferred tax assets and provisions: • Impairment losses (or reversal of impairment losses) on tangible fixed assets: At every reporting date the group examines whether any indication exists of a possible impairment of tangible fixed assets. The result of a segment contains the income and costs generated directly by a segment. Provisions: At every year end the Group estimates the future risks and costs of pending disputes. Pinguin Langemark NV and Pinguin Salads BVBA • France • UK • Other : consists of the production facility in Ychoux (Aquitaine).3. France and the United Kingdom.

344 13.158 112.049 56.402 -14 661 2.880 2.679 93.037 111.451 2.313 93. As the segment reporting is structured according to the geographic location of the assets.284 -609 -2.080 -32.362 708 654 2.824 55 5.946 1.722 137 13. Market conditions are taken as the basis for inter-segment transfer pricing.483 -609 -2.968 -2. it was easy to attribute the balance sheet items to the respective segments.592 -30.783 1.912 13.037 111.558 12.092 -2.062 617 Consolidated 150.Share of the Group .600 2.Intangible fixed assets Depreciation Write-downs Number of employees (year end) 106.853 7.080 -32.037 705 705 705 705 18. United Kingdom Eliminations 30/06/2006 (in 000 Euro) Continuing Discontinued operations operations REVENUE Sales .446 13.121 18.121 18.260 699 139 820 France 16.022 0 587 0 158 990 0 645 -3 41 14 0 10 28 5 consolidated 684 -2.783 -1.Minority interest EBITDA ASSETS AND LIABILITIES Segment assets TOTAL ASSETS Segment liabilities TOTAL LIABILITIES OTHER SEGMENT INFORMATION Capital expenditure: .755 -1.774 51 3.080 112.912 13.158 112.624 -1.intersegment sales Increase/decrease in inventories Other operating income (third parties) Other intersegment operating income Total revenue RESULTS Operating result (EBIT) Net finance costs Result before taxes Income taxes Net result .474 -1.546 653 6.585 -797 79 412 13.080 -32.428 -50 4 -46 0 -46 -46 4.362 0 1.782 0 -1.624 150.441 869 208 6 922 57.893 -3.089 1.402 1.460 -28.626 -271 266 431 -27.sales to external customers .intersegment sales Increase/decrease in inventories Other operating income (third parties) Other intersegment operating income 106.310 55.092 -241 -93 -334 0 -334 -334 -903 -880 -1.475 564 54.121 13.565 -1.960 -208 -316 -11 111.Tangible fixed assets .912 463 463 463 463 -32. Capital expenditure per segment consists of the cost of acquired assets with an expected useful live greater than one year.066 3.908 Belgium (subconsolidated) France Belgium (subconsolidated) United Kingdom Other 979 134 845 0 29 125 Eliminations Other 30/06/2005 (in 000 Euro) REVENUE Sales .416 820 135 685 0 10 0 830 150.037 111.766 82 -1.796 -434 1.158 112.sales to external customers .486 -1.491 1.912 13.751 53.460 150.039 413 24 4 35 -2 0 1.The assets and liabilities of a segment consist of the assets and liabilities belonging directly to it.121 18.066 151.440 12. Assets and liabilities per segment are presented before elimination of inter-segment positions.223 1.906 -1.940 161 .335 -997 2.158 5. The same valuation rules are used in this segment reporting as in the consolidated financial statements.149 258 108.

472 56.Share of the Group .929 0 537 0 201 388 0 775 -44 18 0 0 12 0 7 7.050 37 108.567 27 -65 -38 -5 -43 -43 -1.457 17.811 -6. the majority of sales continue to be made in Belgium and neighbouring countries. The increase under ‘other’ is due entirely to our additional sales in Canada (day packs).081 1.254 29.42% 2.507 -8.479 113.588 -870 -6.252 12. For this reason business segment reporting is not applied.848 -996 852 -4 848 323 525 2.656 18.36% 1.591 57.479 113. what caused an increase inter-segment sales.457 108.531 20.40% 14. Nevertheless. The restructuring at Pinguin Foods UK has already begin to yield a profit.26% 13.2.479 4.458 11 -6. Secondary reporting segment (Business segment) The Pinguin Group’s sales are centred on products that all belong to the deep-frozen vegetable segment.Total revenue RESULTS Operating result (EBIT) Net finance costs Result before taxes Income taxes Net result . Sales to external customers in France have fallen dramatically with the loss of Euragra sales.674 17.864 -1.879 -946 -918 -1. This is due mainly to the termination of our cooperation with one of our former major French customers.14% 38.492 1. 162 .Minority interest EBITDA ASSETS AND LIABILITIES Segment assets TOTAL ASSETS Segment liabilities TOTAL LIABILITIES OTHER SEGMENT INFORMATION Capital expenditure: . despite the EUR 1.951 -31. The table below gives an overview of sales broken down geographically by customer location.996 19.505 21.492 4.92% 100% Sales in France have fallen by 17% compared with the previous year.1. now that this business is run out of Belgium.058 13.674 17.951 113.409 16.951 -31.Tangible fixed assets .255 149.85% 100% 18. Sales (in 000 Euro) 30/06/2006 30/06/2005 Belgium UK France Germany Other EU-countries Other Total sales 19.674 18.264 -5.304 785 440 2.818 6.965 55.590 -917 -7.Intangible fixed assets Depreciation Write-downs Number of employees (year end) 107.508 113 4.447 1.032 525 3.830 147.133 -29.191 113 3. In France the loss-making Euragra operation was closed (1 half of the 2005 calendar year) and Pinguin Aquitaine was able to bring down the production cost of sweet-corn by increasing the production yield.756 24.628 741 666 Earnings have improved markedly in the United Kingdom and France. Pinguin Aquitaine’s entire inventory was sold on during the financial year to Belgium.656 18.674 17.457 108. 7.779 -4.426 152.88% 37.06% 14.656 18.447 -6.933 -2.479 113.3.864 -5.75% 16.951 -31.44% 14. Sales Pinguin sells its products in 49 countries around the world.52% 20.459 21.676 2.64 million of non-recurring costs included in the net result.656 643 643 643 643 -31.457 108.

728 -1. consumables and goods for resale Services and other goods Personnel costs Depreciation and amortization Write-downs Provisions Other operating charges Operating result (EBIT) Net finance costs Result before taxes Income taxes Net Result 2.290 -1.402 1. which produced fresh-cut and chilled vegetables.555 -2.7.3.2.217 3.intersegment sales Increase/decrease in stock Other operating income (third parties) Other intersegment operating income OPERATING CHARGES Raw materials. The company employed 19 people and represented around 2. Despite heavy investments the hoped-for sales growth failed to materialize.) 205 143 -334 98 379 635 -28 663 -964 -964 78 337 -410 173 574 -242 -242 0 32 -69 163 .049 1. Discontinued reporting On 1 December 2005 we announced the closure of BVBA Pinguin Salads.sales to external customers .372 3.023 -612 -169 -2 -21 -338 -77 -415 5 -410 Cash flow statement discontinued operations Cash flow statement Pinguin Salads (in 000 Euro) 30/06/2006 30/06/2005 CASH AND CASH EQUIVALENTS.) Disposals CASH FLOW FROM FINANCING ACTIVITIES Reimbursement of long and short term funding ( . Discontinued operations (Pinguin Salads) (in 000 Euro) 30/06/2006 30/06/2005 REVENUE Sales . BEGINNING BALANCE CASH FLOW FROM OPERATING ACTIVITIES Net result Non-cash items Increase/decrease in working capital CASH FLOW FROM INVESTING ACTIVITIES Acquisitions ( .5% of ‘Pinguin Group’ sales.372 0 4 841 -2. This decision was taken in the light of the continuing losses of this 100% subsidiary.402 0 -14 661 4.061 -503 -393 -35 2 -300 -241 -93 -334 0 -334 -4.

118 3.887 31. buildings (UK)…) Interims Insurance External advisory Costs related to sales and administration Cost effluent Pinguin UK Other Personnel costs Depreciation and amortization 82.673 2.732 4.008 2.330 8.053 243 67 5 742 2. Sales of fresh-chilled products by Pinguin Salads BVBA were.191 1.558 5.271 1.608 5.841 24. Sales (in 000 Euro) Sales “Frozen” (continuing operations) % of total turnover 30/06/2006 149.514 8.3.628 164 .76% Other operating income (in 000 Euro) 30/06/2006 30/06/2005 Invoiced transport costs to customers Compensatory amounts Operating subsidies Rentals Other Total: 1.110 813 801 49 0 305 1. hardware. Sale and other operating income Group sales consist mainly of fresh-frozen vegetable products.3. The fresh cut and chilled vegetables were distributed by Pinguin Salads.996 2.252 97.070 29. Income statement items 7.173 24.037 2.466 2.3.067 2. discontinued on 1 December 2005 and can therefore be regarded as a discontinued activity.167 752 35.2.025 1.738 1.376 3.951 1.286 808 35.07 % 30/06/2005 147. Operating Charges Operating charges (in 000 Euro) 30/06/2006 30/06/2005 Raw materials.275 3.746 7. 7. See also note 7.3. consumables and goods for resale Purchase of fresh vegetables Purchase of frozen vegetables Purchase of packing materials Storage and work for third parties Transport costs related to purchasing activities Purchase of ingredients Purchase of seeds Other Services and other goods Transport Energy Maintenance + IT Rent (forklifts.568 11.568 1. ENDING BALANCE -186 19 101 127 205 7.591 9.968 The “other” item above consists primarily of packaging materials invoiced to customers. however.3.058 99.916 7.748 27.950 22.Receivings of short and long term funding ( + ) NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS.414 978 2.898 1.1.004 7.3.2 on discontinued operations.188 81.332 7.3.850 429 2.226 5.

000) compared with last year can be explained by a number of operating cost savings resulting from the restructuring at our British subsidiary.366.253 -3.3.Other financial income Non-operating financial income . Financial Income and Expenses The financial income and expenses of the Pinguin Group can be broken down as follows: Financial income and expenses (in 000 Euro) 30/06/2006 30/06/2005 FINANCIAL INCOME Operating financial income .3.658 149.Interest income .624 799 0 754 -13 58 2. As at 30 June 2005 an additional write-down of EUR 1.441 164% The rise in operating result (EUR 2. The non-recurring costs include mainly severance payments. The operating result of continuing operations also includes for the present financial year EUR 1.3.3.103.3. Operating result incl.755 -5.000 of non-recurring costs.Valuation to fair value of the financial instruments .020 -2.Write-downs and provisions Write-down of fixed assets Write-down of inventories Write-down of trade debtors Provisions Other operating charges 948 0 663 401 -116 1.144 165 .000 was recorded on an amount receivable from Euragra. Operating Result (EBIT) Operating result of continuing operations Operating result (in 000 Euro) 30/06/2006 30/06/2005 % Operating result (EBIT) 925 -1.206 Other operating charges relate primarily to property taxes and environmental levies.4.779 138% 7.Conversion differences 880 286 85 76 22 18 396 323 0 246 FINANCIAL EXPENSES Operating financial expenses .639. 7.Interest charges on interest-bearing liabilities -3.463 Total: 148. discontinued operations Operating result (in 000 Euro) 30/06/2006 30/06/2005 % Operating result (EBIT) 684 -1.

5.3.848 29. The revaluation amounted to EUR 364.99% French tax rate: 33.00% German tax rate: 39.Non-deductible items .Valuation to fair value of the financial instruments .93% -192 0 -133 6 166 .Adjustment to deferred taxes in respect of prior periods TOTAL TAX EXPENSE REPORTED IN THE INCOME STATEMENT -20 0 -589 0 -15 6 -912 0 -609 -921 The following tax rates were applied at both 30 June 2006 and 30 June 2005: • • • • Belgian tax rate: 33. Income Taxes Tax expense reported in the income statement (in 000 Euro) 30/06/2006 30/06/2005 .Other interest expenses Non-operating financial expenses .175 33.Unrealized exchange results .Losses on disposal of financial assets . The application of the exemption rule means that as at 30 June 2005 no revaluation of financial instruments was recognised in the result.Write-downs of financial assets .875 -4. This is due to the accelerated repayment of interest-bearing liabilities. First-time adopters are exempted from applying IAS 32 and IAS 39 to the preparation of comparative information.99% 663 -66 597 30.Current tax adjustments relating to prior periods -1.3.Deferred taxes for the year .000 at 30 June 2006..33% United Kingdom tax rate: 30.950 33.000 compared with the previous financial year.Current taxes for the year .Realized exchange results .58% Relationship between tax expense and accounting profit (in 000 Euro) 30/06/2006 30/06/2005 Result before taxes Theoretical tax rate Tax (expense)/income at the Belgian tax rate Effect of different tax rates in other countries Theoretical tax expense Average theoretical tax rate Tax effect of: . 7.099 -251 1.99% 2.734 Interest charges on interest-bearing liabilities were down by EUR 891. The Group decided to initially measure these financial instruments as at 1 July 2005 and to recognize changes in the fair value of these instruments in the result for the year ending on 30 June 2006.Other -527 -270 -595 -342 -315 -358 0 -32 -374 -62 0 0 -255 -248 FINANCIAL RESULT -2.Interest on leasing .62% -6.Adjustment to current taxes in respect of prior periods .

23% 0 -2.Other Effective tax expense Effective tax rate 0 -1.6. Earning s per share Earnings per share is calculated by dividing the Group’s share in net income by the weighted average number of shares outstanding during the year (total number of shares – own shares).3.72 Per 30 June 2005 Basic Diluted Weighted average number of ordinary shares Dilution effect of warrants Weighted average number of ordinary shares (diluted) Including discontinued operations Net income attributable to ordinary shareholders (in 000 Euro) Earnings per share (in Euro) Basic 3.459.80 Basic -3. This restructuring was completed by 30 June 2006 and is regarded as a nonrecurring event.3.411 Diluted -3.2.80 Diluted -3.9 million was recorded for the closure of the French subsidiary Euragra.546 -0.459. in this Prospectus dealing with discontinued operations.3.524.719 Diluted -8. IFRS 5 “Discontinued Activities” has been applied retroactively to the previous financial year. at a cost of EUR 1.Non-recognition of deferred tax assets on tax losses .28 -8. 7.411 0 4.719 0 3.212 -0.6 million.72 -3. We also mention here the ending of the business activities of Pinguin Salads during the 2005/2006 financial year.032 -2.719 3.524.3.459. We refer to 7.033 19 -609 31. Per 30 June 2006 Basic Diluted Weighted average number of ordinary shares Dilution effect of warrants Weighted average number of ordinary shares (diluted) Including discontinued operations Net income attributable to ordinary shareholders (in 000 Euro) Earnings per share (in Euro) Continuing operations only Net income attributable to ordinary shareholders (in 000 Euro) Earnings per share (in Euro) Basic 4.546 -0.Deferred tax adjustments relating to prior periods .032 -2. Non recurring events In the year ending on 30 June 2006 a major restructuring plan was carried out at Pinguin Foods UK.524.635 -7 -921 14.92% 7.28 167 ..411 4.212 -0.7. In the financial year ending on 30 June 2005 a non-recurring cost of EUR 0.3. To permit a better comparison of the Group’s result with that of the previous year 30 June 2005.

given the decision to apply a single software system Group-wide from 1 January 2007 onwards.621 -2. Balance sheet items 7. Intangible Fixed Assets Software (in 000 Euro) 30/06/2006 30/06/2005 AT COST BALANCE AT THE END OF THE PRECEDING PERIOD Acquisitions Acquisitions through business combinations Sales and disposals Transfer from one heading to another Translation differences Other BALANCE AT THE END OF THE PERIOD DEPRECIATIONS AND AMOUNTS WRITTEN DOWN BALANCE AT THE END OF THE PRECEDING PERIOD Depreciations Withdrawals Write-downs Withdrawals after sales and disposals Transfer from one heading to another Translation differences Other BALANCE AT THE END OF THE PERIOD NET CARRYING AMOUNT BEFOR INVESTMENT GRANTS Net investment grants NET CARRYING AMOUNT AT THE END OF THE PERIOD 183 208 -26 3 368 268 -3 265 0 184 -1 183 413 413 596 55 -29 14 636 483 113 596 Investments in existing software were down at 30 June 2006 compared with the previous financial year.4.3. The investments in the new software package are planned to take place primarily in the second half of the 2006 calendar year (2006/2007 financial year).16 7. 168 .4.3.Continuing operations only Net income attributable to ordinary shareholders (in 000 Euro) Earnings per share (in Euro) Basic Diluted -7.1.621 -2.16 -7.

834 2.139 87 87 -26 148 1.845 -96 1 -4 5.232 -16 -193 -3 -64 -4 10.079 0 53.822 20.3.292 20.727 20.054 7.443 1.462 5.7.473 -1.493 686 -510 785 -167 8.440 -49 2.893 -576 3. estimates of remaining value.922 -65 -231 4 65.592 -1.224 244 -741 30. useful life and depreciation methods are reviewed every year and any significant changes in estimates have to be mentioned. additional investment in cooling installations and machine rooms at Pinguin Langemark (EUR 576.2.824 31.054 1.680 -1 -217 5.414 0 5.000). the setting up of the soup and sauce line at Pinguin NV with the necessary extension of the machine rooms (EUR 1.292 5 -5 0 0 0 5.379 1.567 381 -10 235 606 470 5.508 -650 -1 60.881 0 0 345 345 152 164 164 164 55.000). Furniture Land and machinery and buildings and vehicles equipment Leasing Assets and under similar constructi rights on 30/06/2006 (in 000 Euro) Other 30/06/06 30/06/05 BALANCE AT THE END OF THE PRECEDING PERIOD Acquisitions Acquisitions through business combinations Sales and disposals Transfers from one heading to another Translation differences Other BALANCE AT THE END OF THE PERIOD DEPRECIATIONS AND AMOUNTS WRITTEN DOWN BALANCE AT THE END OF THE PRECEDING PERIOD Depreciations Withdrawals Write-downs Withdrawals after sales and disposals Transfers from one heading to another Translation differences Other BALANCE AT THE END OF THE PERIOD NET CARRYING AMOUNT BEFORE INVESTMENT GRANTS AND RECLASS LEASING Net investment grants Reclass leasing NET CARRYING AMOUNT AT THE END OF THE PERIOD (30 June 2006) NET CARRYING AMOUNT AT THE END OF THE PRECEDING PERIOD (30 June 2005) 31.947 52.141 32.645 The most important investments in the year to 30 June 2006 were the acquisition of more efficient packaging machinery at Pinguin NV (EUR 1.000 increase in sales and disposals in the year to 30 June 2006 compared with the year before relates mainly to the sale of the tangible fixed assets of Pinguin Salads to an external party at net carrying value.4.612 476 197 -152 8 529 7. Tangible Assets Plant.000).995 -114 -5. The EUR 1.000) with a view to modernizing the packaging division.260 578 -64 25.000).197 7. the optimization of existing machinery at Pinguin NV (EUR 1.867. The value of the land amounted to EUR 6.824 -1.462 27. the introduction of a bean line at Pinguin Aquitaine (EUR 578.000 at 30 June 2006 (30 June 2005: EUR 6. In the light of this 169 .867.533 860 -16 -71 50 -60 -42.251 -2.172 - 54.346.272.000).818 -1.052.916 19.540 5.000) and the waste water processing project in the United Kingdom (EUR 469.393 2.802. In accordance with IAS 16.287 157 879 -695 4 345 164 164 60.664 53.

Available for sale financial assets Available-for-sale financial assets (in 000 Euro) BALANCE AT THE END OF THE PRECEDING PERIOD Acquisitions Disposals and closures (Write-downs)/ reversal write-downs Transfers Exchange gains /(losses) Balance at the end of the period 30/06/2006 01/07/2005 108 112 0 0 0 0 220 296 67 0 -255 0 0 108 First-time adopters are exempted from applying IAS 32 and IAS 39 when producing comparative information.28%).000 at 30 June 2006 and EUR 1. The LOCOM provision in respect of these amounts was EUR 1.699.000). Pinguin also has a participating interest in Starbrand Spolka (12.e. The total gross amount of inventory eligible for LOCOM write-down amounted at 30 June 2006 to EUR 9.3. slow-moving.000) exists in respect of trade receivables and the inventories.55%) worth EUR 11. At 30 June 2005 the total gross amount was EUR 9. The write-down resulting from the LOCOM test is taken against income as a change in inventory.762 31.753.332 27.000. inventory.4. with the changes in fair value being passed to equity.3.000.414.000 (30 June 2005: EUR 3.952.233 28. The Group owns (via MAC sarl) EUR 380. but these will be reviewed every year and kept up-to-date. A write-down is also recorded for obsolete.000 at 30 June 2005. along with the mandate in an amount of EUR 4. it was opted to apply the historical cost (net of any reductions in value).000. i. in which the average inventory price for each sub-group is compared with the average outstanding contract price for the same sub-group.000 (30 June 2005: EUR 9. These financial assets have therefore been treated according to the BE GAAP method. 7.094 Inventories are subject to a ‘lower of cost or market’ (LOCOM) test. Following this the participating interest in Tomate d'Aquitaine was increased.419.requirement the Group tested the useful life of the tangible fixed assets for under and over-measurement. Inventories Inventories (in 000 Euro) 30/06/2006 30/06/2005 Raw materials and consumables Finished goods Total inventory 2. on which a reduction in value of EUR 255. Pinguin China was set up effective 30 June 2006 (75%) and the Group purchased shares for EUR 84.000). The writedown for slow-moving stock is recorded as a write-down in the income statement and is therefore included in the calculation of EBITDA.929 25.000).162 3. From 1 July 2005 these standards become applicable to the Group and these investments were indicated as financial assets available for sale. 7.676.000. whereby financial fixed assets are valued at historical cost.4.000 (30 June 2005: EUR 33. • Mortgage mandates: EUR 487. A lien on the company’s business assets in the amount of EUR 26. As it was impossible to reliably determine the fair value of these assets.4.214.000).000 was recorded at the end of June 2005.030.586.342. 170 .3. The write-down for slow-moving inventory amounted to EUR 670.000 (30 June 2005 : EUR 38.000 at the end of the financial year (30 June 2005: EUR 199. less any reductions in value.792.000 of shares in Tomate d'Aquitaine SAS (14. At 30 June 2006 the Group’s fixed assets were encumbered as follows: • Mortgages: EUR 11. The review did not reveal any need to adjust useful lives for the present period.

000 on the previous year (30 June 2005: EUR 441.445 0 3.246 0 0 0 0 -1.995 0 0 -1.203 0 0 0 3 -1.246 5.000 at 30 June 2006.776.026 -1.385 -84 -2183 0 0 -2183 6.3.860 -1. 7. Long Term Receivables Long term receivables (in 000 Euro) 30/06/2006 30/06/2005 Receivables > 1 year 428 531 Amounts receivable after one year consist mainly of cash guarantees.860.026 0 1.4.5. The decrease (EUR 1.390 30/06/2006 Deferred taxes (attribution) (in 000 Euro) Deferred tax assets Deferred tax liabilities 30/06/2005 Deferred tax assets Deferred tax liabilities Formation expenses Intangible assets Tangible fixed assets Financial fixed assets Bond loan Inventories Trade and other receivables TOTAL DEFERRED TAXES RELATED TO TEMPORARY DIFFERENCES Unrecognised deferred tax assets in respect of deductible temporary differences Set-off of assets and liabilities NET DEFERRED TAX ASSETS / LIABILITIES 41 1 1.390 -183 47 0 0 -2 774 6.208 47 6 2. The credit guarantee (‘gage espèce’) paid by Pinguin Aquitaine amounted to EUR 306.268 0 2 8. The remaining amount consists mainly of car leases and pallet guarantees.4.995 5. Deferred Tax assets and Liabilities 30/06/2006 Deferred taxes (net carrying amount) (in 000 Euro) Deferred tax assets Deferred tax liabilities 30/06/2005 Deferred tax assets Deferred tax liabilities BALANCE AT THE END OF THE PRECEDING PERIOD Increase/(decrease) via income Increase/(decrease) via equity New consolidations Deconsolidations Translation differences Set-off of assets and liabilities BALANCE AT THE END OF THE PERIOD 0 -774 0 0 0 0 774 0 5. it is considered insufficiently certain that sufficient deductible fiscal profit will be available to offset these non-recognised tax assets.357 0 0 1.7. Despite the improved results budgeted for the coming financial years.246 0 4.3.430 2.000).6.855 0 2 7.151 27 25 0 3 8. down EUR 135.000) in these non-recognised deferred tax assets on deductible temporary differences compared with last year is due to a change in the statutory valuation rules at Pinguin Foods 171 .843 1 0 382 0 2.382 0 0 0 1 7.000 (30 June 2005: EUR 1.390 At 30 June 2006 the Pinguin Group had non-recognised deferred tax assets on temporary deductible differences amounting to EUR 84.000).

but against which future taxable profits can be offset.000).342.000 (30 June 2005: EUR 1. This reduced the deferred taxation effect to almost zero.9.000 exists in respect of trade receivables and the inventories (30 June 2005: EUR 18.476 0 1.263 -152 0 0 0 1.8.3.3. interest receivable from Pinguin Invest of EUR 46.476 7.000).419 27.463 33. A lien on the company’s business assets in an amount of EUR 26.030.000).476 There is no time limit on the above-mentioned unrecognised tax assets.101 Other receivables at 30 June 2006 consist primarily of VAT reimbursements.570 0 1. 7.4.000 (30 June 2005: EUR 33. Nor are deferred tax assets recognised on tax loss carryforwards. It was decided to bring the useful life used in the company statutory figures in line with the IFRS valuation rules as at 1 July 2005.753. The following table sets out the deductible elements on which no deferred taxes were recognised. along with a mandate in an amount of EUR 4.204 26.046 1. Trade and other Receivables Trade and other receivables (in 000 Euro) 30/06/2006 30/06/2005 Trade receivables Other receivables Total 24.4.UK Ltd. totalling EUR 1. Deferred Charges and Accrued Revenues Deferred charges and accrued revenues (in 000 Euro) BALANCE AT THE END OF THE PRECEDING PERIOD Increase / (decrease) New consolidations Deconsolidations Translation differences BALANCE AT THE END OF THE PERIOD 30/06/2006 30/06/2005 1.000).111 172 .013 27.214 23.000).298 35.000 (30 June 2005: EUR 110. a current account with Pinguin Invest in an amount of EUR 509.691. The figures given are gross amounts. 7.000 (30 June 2005: EUR 380. Cash and Cash Equivalents Cash and cash equivalents (in 000 Euro) 30/06/2006 30/06/2005 Short term financial assets Cash Other Total 0 1.586.4.541 6.000 (30 June 2005: EUR 30.3.406.570 0 1.7. Unrecognised deferred tax assets(in 000 Euro) 30/06/2006 30/06/2005 Deductible temporary differences Operational losses Total 243 35.000) and investment grants receivable of EUR 180.111 -65 0 0 0 1.795 2.897 2.

3. issued after lifting the right of pre-emption by way of application of Articles 596 and 598 of the Belgian Company Code by decision of the extraordinary general meeting of Pinguin NV of 25 November 2005. Evolution of subscribed capital (Euro) 30/06/2006 30/06/2005 BALANCE AT THE END OF THE PRECEDING PERIOD Capital increase of 8 October 2004 Capital decrease of 25th November 2005 Capital increase of 25th November 2005 Capital increase of 10 May 2006 Costs related to capital increases (IAS 32) BALANCE AT THE END OF THE PERIOD 36. 7. during a five-year period from the publication of the deed of amendment to the Articles of Association of 14 November 2005.531. This was followed on the same date by a first private placement of 692.784 Ordinary shares. The costs relating to the capital increases (EUR 30.000.678 36.460.469 14.572 -29.520 new Pinguin shares. increase the subscribed capital in one or more instalments up to a maximum amount of EUR 20.170 shares and by Société Par Actions Simplifiée Primco.660 1.764.749.10 in respect of past losses.784 0 -8.003. a French company 201. On 10 May 2006 there followed a second private placement of 297.992.662 shares.832 4.213.4.992. issued after lifting of the right of pre-emption by way of application of Articles 596 and 598 of the Belgian Company Code by decision of the Board of Directors of Pinguin NV on 10 May 2006 within the framework of the authorized capital.166 4. Subscribed Capital Financial year 2004 / 2005 On 8 October 2004 a capital increase in cash took place in the framework of a secondary public offering (SPO) in which capital was increased by EUR 14.000. Financial year 2005 / 2006 On 25 November 2005 the extraordinary general meeting of Pinguin NV first decided by way of application of Article 614 of the Belgian Company Code to reduce the capital of the company by an amount of EUR 8.717 2.705 0 0 4.000) were deducted from capital as at 30 June 2006 in accordance with IAS 32.705 new shares.Deferred charges related in particular to insurance premiums. The Board of Directors may. The costs related to this transaction amounted at 30 June 2005 to EUR 657.999.993. issued and fully paid (number) 30/06/2006 30/06/2005 BALANCE AT THE END OF THE PRECEDING PERIOD Capital increase of 8 October 2004 Capital increase of 25th November 2005 Capital increase of 10 May 2006 BALANCE AT THE END OF THE PERIOD 4.764.117.50 through the creation of 1.166.10. a French company 96.832 new Pinguin shares.507 35.677 22.50 0 0 0 -656.460.365 0 692.994 2.000.999.213.238.999. In accordance with IAS 32 these have been deducted from capital. subscription and rental costs.520 297.365 173 .003. These new shares were subscribed by Société Coopérative Agricole à Capital Variable Lur Berri. All these new shares were subscribed by Stichting Administratiekantoor Pinguin. costs related to maintenance contracts.

3.13. Each warrant entitles its holder to subscribe to one new share. These own shares were reported in MAC’s financial statements at a value of EUR 2. 174 .4.475.000.000. Evolution own shares (number) 30/06/2006 30/06/2005 BALANCE AT THE END OF THE PRECEDING PERIOD Purchased during the year Sold during the year BALANCE AT THE END OF THE PERIOD 334 0 -334 0 334 0 0 334 7. Warrants may also be exercised upon any merger. 441.27. the Group’s French sales office.3.39. concluding that from 1 July 2005 the warrants represented a component of equity with an initial value of zero. in whole or in part. The directors propose that no dividend be paid in respect of the current year.468. were sold on Euronext on 28.4.03.06 per share. were cancelled.428 20. No warrants have been exercised until now.000 0 20.531.000 7.11. the first time on any working day during the two weeks following the annual general meeting. We refer also to the consolidated statement of equity. 7. Stock Option and Warrant Plans Option plans There are currently no option plans outstanding for members of the management committee or senior management.197 warrants from FPE (Fortis Private Equity Expansion NV) (formerly ISEP) in the context of an agreement for the prepayment of the subordinated bond loan. For the treatment of the non-equity element we refer to note 7.Interest-bearing liabilities. along with those already in the possession of the Dejonghe family.000.3.4. Own Shares The remaining 334 own shares of Pinguin NV held by M.356 with an outside investor. Warrants can be exercised twice a year.000 -2.4. SARL. Warrant plans On 30 December 2002.054. The exercise price is EUR 12. Dividends No dividends were declared during the past two years.12. There are no more own shares held by Pinguin NV or its subsidiaries.C. leaving just 40. split or public bid for the company.Authorised capital(Euro) 30/06/2006 30/06/2005 BALANCE AT THE END OF THE PRECEDING PERIOD Capital increase of 10 May 2006 BALANCE AT THE END OF THE PERIOD 20. 28 October 2004 Pinguin Invest NV bought back 363. As a ‘first time adopter’ the Group applied the exemption provisions of IAS 32 – IAS 39.17 . and on any working day during the two weeks prior to the fifth anniversary of the issue date.000. As at 30 June 2004 and 30 June 2005 these shares were deducted from equity in an amount of EUR 3. Warrants expire no later on the fifth anniversary of the issue date.000 in accordance with IFRS 1.572 17. These warrants.493 warrants were created in connection with the issue of a 6-year subordinated bond loan of EUR 5.3.A. Warrants can be separated from the bonds at any time and are freely negotiable.2006 at a price of EUR 7. and the second time on any working day during the two weeks following the announcement of the half-yearly results.

000 compared with 30 June 2005.007 -171 0 525 0 0 0 354 Like last year Pinguin has a 52% shareholding in Pinguin Aquitaine.000 (30 June 2005: EUR 63.362.39 441. This subsidiary reported a net profit of EUR 1.39 12.4. 7.4. managers or members of the Management Committee. The other provisions are primarily for environmental damage. The reversals are explained by the fact that in certain legal disputes it was decided not to appeal but to pay the disputed sums.3. The provision for “pensions and similar rights” relates to an agreed early retirement pension settlement in an amount of EUR 17. 175 .Warrants Date offered Number Exercise price Outstanding at the end of (in Euro) the period Issue BUY BACK – ANNULMENT 30/12/2002 28/10/2004 441.000 as at 30 June 2006 (30 June 2005: EUR 21.893 401.000).000). 48% of this profit was therefore placed under minority interests. 7.14.893 40.15.356 Right now there are no new share option or warrant plans for employees.000) and a provision for redundancy benefits of EUR 41.3. excess noise and soil decontamination totalling EUR 287.357 12. For further information concerning pending disputes reference is made to note 7. Minority Interests Minority interests (in 000 Euro) BALANCE AT THE END OF THE PRECEDING PERIOD Decrease/increase in ownership Share of net profit of subsidiaries Dividend pay-out Capital increases Translation differences BALANCE AT THE END OF THE PERIOD 30/06/2006 30/06/2005 354 0 653 0 0 0 1. Provisions Provisions for Provisions for other pensions and similar liabilities and charges rights 23 0 0 -2 21 303 210 0 -73 440 Provisions (in 000 Euro) Total BALANCE AT THE BEGINNING OF THE PRECEDING PERIOD Additional provisions Reversal of unutilized provisions Amounts utilized during the year BALANCE AT THE END OF THE PRECEDING PERIOD 326 210 0 -75 461 BALANCE AT THE END OF THE PRECEDING PERIOD Additional provisions Reversal of unutilized provisions Amounts utilized during the year BALANCE AT THE END OF THE PERIOD 21 0 0 -4 17 440 24 -2 -134 328 461 24 -2 -138 345 Provisions at 30 June 2006 are down EUR 116.6.3.000 (30 June 2005: EUR 377.000 at 30 June 2006.

719 345 3.411 17.296 4.393 51.531 Due between 1 and Due after 5 years 5 years Total: Interest-bearing liabilities > 1 year . 30 June 2006 (in 000 Euro) Due within 1 year Due between 1 and 5 years Due after 5 years Total: Interest-bearing liabilities > 1 year .864 600 34.Subordinated bond loan .173 6.176 50 27.4.260 2. Interest Baring Liabilities This note provides information on the contractual conditions governing the Group’s interest-bearing liabilities.398 124 26.200 2.260 3.Other Interest-bearing liabilities < 1 year .176 50 27.Credit institutions .052 1.518 6.Finance leases .052 1.765 6. Pension obligations Defined contribution plans The Pinguin Group’s pension plans provide for the payment of clearly determined amounts to pension institutions.Finance leases .260 2.719 176 .570 4.398 124 26.Subordinated bond loan . Defined benefit plans There are no defined benefit plans within the Pinguin Group.16.17.765 6.Credit institutions .Credit institutions .Other Interest-bearing liabilities < 1 year .393 33.190 2.7.3.Subordinated bond loan . Since 1 January 2004 Belgian legislation requires a minimum return to be guaranteed on contributions paid into a defined contribution plan.Other .465 3.330 265 47.190 2.296 3.260 3.Short term liabilities (credit institutions) Total 1. These employer’s contributions are charged against income in the year to which they relate.Subordinated bond loan .709 345 1.Credit institutions . Given that this minimum return is guaranteed essentially by the insurance institution.Other .296 4.Finance leases .Finance leases .200 2.Short term liabilities (credit institutions) Total 30 June 2005 Due within 1 year (in 000 Euro) 2. the pension cost is the same as the employer contributions.864 600 265 2.296 3.3.4. It covers the financial debts (both an overview of the long-term liabilities and those maturing within the year).835 4. 7.936 12.

200.937. 30 June 2005: EUR 990.13%. The average interest rate at 30 June 2006 for the outstanding long-term debts with financial institutions was 5. The long-term loans all have a fixed interest rate. The average repayment term at Pinguin UK is 2. Total interest-bearing liabilities in GBP amounted at 30 June 2006 to GBP 2.902 335 7.000 at 30 June 2006. All interest-bearing liabilities are concluded at market conditions.814 The largest interest-bearing liabilities are the finance lease agreements for parts of the sweet-corn and carrot line in Aquitaine.68 % (30 June 2005: 5. and plant. on both the asset and liabilities side of the balance sheet.Subordinated bond loan On 30 December 2002. The average repayment term at Pinguin Aquitaine is 5.211.000 (30 June 2005: GBP 2.658 501 9.576 6.3. Credit institutions The long-term interest-bearing bank debts were down by EUR 1. with EUR 1..47 % (30 June 2005: 10.474. the short-term credit lines were fully drawn. All interest-bearing liabilities are expressed in EUR or GBP. 441.83 %). The sale-and-leaseback agreement with Sud Quest Bail for the fixed assets estate (structural alterations and waste water processing) at Aquitaine was recognised. machinery and equipment at Pinguin UK such as the potato line.735 2.13 .000). After the first recognition in the financial statements.4. with fixed 3-monthly instalments. On 1 October 2005 the contract was extended to July 2012.000 is due to the accelerated repayment of the bond loan. Finance leases (in 000 Euro) Minimum lease payments 30/06/2006 30/06/2005 Present value minimum lease payments 30/06/2006 30/06/2005 Within 1 year Between 1 and 5 years After 5 years Total: 2. At both 30 June 2006 and 30 June 2005.000 in the previous financial period to 30 June 2005. for which we refer to the transitional arrangement in note 7.4. All long-term credits have fixed interest rates.13.000) coincides with the end of the financial year.893 warrants were created in connection with the issuing of a subordinated bond loan in an amount of EUR 5. The Group’s short-term interest-bearing liabilities were drawn down mainly in the form of fixed-term advances at fixed margins over floating Euribor rates.13.188. The average effective interest rate at 30 June 2006 was 5. 177 .570 265 7. The effective interest rate at 30 June 2006 is 12.296 6.4. The remaining EUR 330.3.898 2. The rise (30 June 2006 vs.054.Option and Warrant Plans.19 years. in accordance with IAS 17 “Recognition and Measurement”. no new long-term interestbearing liabilities were entered into with credit institutions.27.10 %).260 4. Interest is payable post numerando each quarter. As already mentioned in note 7. For a further discussion of the warrants we refer to note 7.04%.000 repaid during the year to 30 June 2006 compared with EUR 1.06 years. The bond has a term of 6 years and carries a coupon of 11.000) in the short-term interest-bearing liabilities relating to the bond loan is due to the fact that the maturity date of the last capital instalment (EUR 600. the bond loan is treated at amortized cost using the effective interest method.3. The average effective interest rate at 30 June 2006 was 4.86 % (30 June 2005: 6.45 %).53%.661 4. The initial recognition at fair value took place via equity.095 2. The average effective interest rate at 30 June 2006 was 5. Availability under these credit lines is seasonally adjusted. in accordance with the capital repayment schedule.173 345 8.590. In the context of further debt reduction. the Group applies IAS 32 and IAS 39 only from 1 July 2005.

18. these option contracts were not classified as cash flow hedges.000 from the Agence d'eau as at 30 June 2006 (30 June 2005: EUR 714. mainly in pound sterling.741 In total. the Group has subscribed a number of call options in an amount of GBP 1. The financial derivatives were initially recognised at fair value. a number of Floor contracts with Knock-Ins have been concluded simultaneously. 7. In order to limit the cost of these instruments. Right now the Group has a small number of option contracts in order to limit its exposure to the pound sterling. Interest rate risk The Group has used financial instruments to cover risks relating to unfavourable interest rate fluctuations.000. At 30 June 2005 it had option contracts of GBP 1. The derivatives are intended to hedge the Group’s exposure to currency risks in GBP until the end of 2006. The derivatives used consist primarily of “over-the-counter” financial instruments.350.000 at 30 June 2006. Foreign exchange risk The foreign exchange risk relates to possible fluctuations in the value of financial instruments as a result of exchange rate fluctuations.000 to cover the currency risk in Euros.735 32. For a more detailed overview we refer to the fair value balance sheet.200. In order to create a “zero cost” effect.000). Risk Management Policy The Group is exposed to currency.000. The Group is exposed to foreign exchange risks from the fact that a considerable portion of its activities (buying and selling) are undertaken outside the Eurozone. The other amount still on the books at 30 June 2005 consists of current account outstandings to Lur Berri and Primco.Other loans The other long-term loans consist of a loan of EUR 600.532.000. The total fair value (marked to market value) amounted at 30 June 2006 to EUR 10.4. At the first-time application of IAS 39.000. in an amount of GBP 600.391 27. Hedge accounting under the strict application conditions of the IFRS is not applied at this moment.19.000 (1 July 2005: EUR –90. Trade and Other Payables (short term) Trade and other payables (in 000 Euro) 30/06/2006 30/06/2005 Trade payables Tax payable Remuneration and social security payable Other Total 26. The considerable reduction in other payables is explained by the repayment of certain debts of Pinguin Aquitaine to shareholders Luc Berri and Primco following the capital increase of 10 May 2006 in an amount of EUR 2.637 808 2. To achieve this a number of IRS (Interest Rate Swaps) and interest rate caps with Knock-Outs have been concluded with major Belgian banks.000 to cover the currency risk in pounds sterling and an amount of EUR 550. in particular option contracts and interest rate swaps concluded with first-class banks.705 714 2. The Group wishes to keep its net interest cost as low as possible and does not want to be confronted with uncontrollable fluctuations in interest rates. and with subsequent changes in fair value recognised in the income statement.698 274 30.000 compared with the situation at 30 June 2005.3. interest rate and credit risks in exercising its business activity. 178 . 7.000) to Pinguin Aquitaine. The short-term trade payables have fallen by EUR 902. short-term trade and other payables are down EUR 2. It is Group policy not to undertake speculative transactions. All hedging instruments used during the financial year ending on 30 June 2006 mature within the year or expired during the financial year.4.3. Derivatives are used to reduce the risk attached to exchange rate fluctuations. The use of variable interest rate credits carries this risk of major changes in cash flow owing to rising interest rates. as at 1 July 2005.561 1.

500. 7.20.000). At the balance sheet date there were no significant concentrations of credit risk.The total fair value (marked to market value) amounted at 30 June 2006 to EUR 69.000 (1 July 2005: EUR – 194. In the area of interest rate risk Pinguin is covered as at 30 June 2006 via various instruments in a notional amount of EUR 18. Accrued Charges and Deferred Revenues Accrued charges and deferred revenues (in 000 Euro) 30/06/2006 30/06/2005 BALANCE AT THE END OF THE PRECEDING PERIOD Increase / (decrease) New consolidations Transfers Deconsolidations Translation differences BALANCE AT THE END OF THE PERIOD 633 -350 0 0 0 0 283 280 353 0 0 0 0 633 The accrued charges and deferred income items consists essentially of accrued interests. They were therefore valued at fair value with changes in fair value.000. Broken down by maturity this gives: .500.000.000 at 30 June 2006.000).500.000. included in the income statement. 179 . The longest coverage term of these instruments runs to October 2008.Maturing within one year: EUR 3. In its first-time application of IAS 39 the Group classified its financial instruments used to cover the interest rate risk as economic hedges that do not fulfil the requirements for hedge accounting.000 (30 June 2005: EUR 26. Fair value Fair value by type of financial instrument (in 000 Euro) Financial instruments Option contracts IRS + interest-rate caps 12 69 45 7 -2 0 -135 -201 10 69 -90 -194 Assets 30/06/06 01/07/05 Liabilities 30/06/06 01/07/05 Net Position 30/06/06 01/07/05 Net assets/ liabilities 81 52 -2 -336 79 -284 This table has been prepared with comparative information as at 1 July 2005. These represented a nominal amount of EUR 16.3. To protect itself against customer defaults and bankruptcies the Group uses the services of an international credit insurance company. Management has developed a credit policy and credit risk exposure is continuously monitored. Maturing after 1 year but within 5 years: EUR 15. Credit risk The Group has a diversified customer portfolio. In order to limit the cost of these instruments.500. resulting from the effect of the interest rate difference. and also applies internal customer credit limits. Any customer whose credit exceeds a specified amount is subjected to a credit check. a number of Floor contracts with Knock-Ins have been concluded simultaneously. as the Group has opted to apply the exemption role concerning IAS 32 and IAS 39.4.

00% 8840 Westrozebeke (Staden) BE 402.00% 40160 Ychoux France Pinguin Foods UK LTD Scania Way Kings Lynn GB-PE30 4LR Norfolk Vereningd Koninkrijk 100.5.00% 52.00% 100.00% 0. the VAT number or the national number Pinguin NV Romenstraat 3 100. included in the consolidated annual accounts using the integrated consolidation method.793 M.00% 100.777.5.7. there were 6 subsidiaries.557. full address of registered office and for companies governed by Belgian law. As of 30 June 2006. Belgium.00% 0.00% Change of percentage of capital held (as compared to the previous period) Proportion of capital held (in %) Voting rights (%) Change in the consolidation scope The following changes occurred in the consolidation scope during the financial year: Pinguin Convenience Foods NV and Pinguin Ieper NV were acquired by and merged into “Pinguin Langemark NV” at 30 December 2005.80% 75008 Paris France Pinguin Deutschland GMBH Kirchweg 78 99.99% 8920 Langemark BE 427.1. Subsidiaries The parent company of the Group is Pinguin NV.3.99% 0. 180 .90% 24558 Henstedt – Ulzburg Germany Pinguin Aquitaine SAS Avenue Bremontier 52.99% 0.A.00% 100. Westrozebeke.00% 0. Other elements 7.00% 99.768.00% 0. Name.C. with retroactive effect to 1 July 2005.00% 8860 Lendelede BE 437.00% 99.317 Pinguin Salads BVBA Sneppestraat 11 Bus A 100. SARL Rue Jean Goujon 8 99.3.80% 0.00% 99.157 Pinguin Langemark NV Poelkapellestraat 47 bus B 99.

The provision amounts as at 30 June 2006 to EUR 218. The parties to the dispute are Blédina. Pinguin NV. management deems it very unlikely that the Group will be condemned to pay compensation to Maxwell Chase Technologies. as management believes the complaint to be unjustified.000 for the destruction of Bledichef. These specifications were neither confirmed nor approved by the Group. full address of registered office and for enterprises governed by Belgian law. the VAT number or the national number Pinguin China Xinling Road 18 Waigaoqiao Tax Free Zone Shanghai China Share in the capital (in %) Data from the most recent period of which annual accounts are available Currency code Capital and reserves Net result 75. The liability of the various parties has not yet been determined by the Court. The Group has taken the matter to the Belgian Supreme Court. Name. If it is decided that liability is shared by the parties involved.3. Blédina launched a recall programme at the end of 2003. the maximum cost becomes EUR 40. As the Board of Directors considers it very likely that the damage will be divided between three parties. including EUR 500. No judgement is expected in 2006. Following complaints.S. Techno-Food is the former subsidiary of VDI (later renamed Pinguin Salads). its subsidiary Pinguin Aquitaine SAS and the farmer. In the event that Pinguin Aquitaine were to be judged fully liable. This company is claiming damages of around 16 million dollars for the termination of a distribution agreement between Maxwell Chase Technologies and Techno-Food NV.6.000. because the Group does not have the power to beneficially control its financial and operational policy. EUR 4.28 % 47300 Bias France EURO 849.000 and covers the maximum risk. No provision has been set up. company Maxwell Chase Technologies LLC. it believes that no provision needs to be set up. the VAT number or the national number Tomate d’ Aquitaine Souillès 14.Companies that are neither subsidiaries nor associated companies The companies below are not included in the consolidation scope. Pending disputes Pending disputes at 30 June 2006 BLEDINA DISPUTE The Group has a major pending dispute with its customer Blédina concerning the delivery of goods which purportedly failed to meet the customer’s product specifications.000 for the removal of the products and EUR 200. DISPUTE OVER NOISE NUISANCE Proceedings have been instigated against the Langemark plant by a neighbour for noise nuisance. DISPUTE WITH MAXWELL TECHNOLOGIES Various Group companies have been summonsed before the Kortrijk Commercial Tribunal at the request of the U. In appeal the Group was condemned to pay damages.000. full address of registered office and for enterprises governed by Belgian law. which was sold by the Group in 2002.000.000 Not available – first financial year not yet closed 7.000 of mailing costs. the maximum damage would amount to EUR 380. nor does it have significant direct or indirect influence on the company. 181 . including delayed payment interest.954 -217.249 Share in the capital (in %) Data from the most recent period of which annual accounts are available (30-06-2005) Currency code Capital and reserves Net result Name. The claimed damage was set by a team of experts at a total amount of EUR 683.00 % USD 135. The facts mentioned above post-date the sale of Techno-Food by the Group. Based on the evidence available to it at the moment.

000).916 7. Contracts totalling EUR 19. guaranteed a credit line made available to its French subsidiary Euragra S.586 26.419 7.000).354 The Group is working on the assumption that these contracts will be renewed or replaced at term.A.342 18.000.000) and the acquisition of new mixing installations (EUR 552.7. Operating leases The Group has concluded rental and lease contracts.3. the company opted after 30 June 2006 to introduce warrantage on inventories. by the French bank NCME in an amount of EUR 480. Bank covenants A number of credit agreements with the Group's major creditors contain various covenants covering solvency ratios (25% to 30%).465 72. Bank guarantees There is one bank guarantee outstanding in an amount of EUR 163.753 3.000 until 2013 in favour of OVAM (Flemish Public Waste Company) to guarantee the decontamination of polluted soil. Off-balance-sheet commitments Off-balance-sheet commitments Guarantees (in 000 Euro) 30/06/2006 30/06/2005 Mandate on general assets Registered lien on general assets Mortgage mandate Registered mortgage Joint guarantee Total 4.259 0 2. mainly for transport vehicles.000 have been concluded for the procurement of fresh vegetables.000. the amount of capital (EUR 25 million). Between 1 and 5 years (in 000 Euro) Within 1 year After 5 years Total: Rent and operating leases 1. the portion of own funds in the payment of future investments. Euragra guarantee Pinguin has.000.7. Warrantage on inventories As part of the extension of the credit facilities (in an amount of EUR 3.575 182 . and the minimum account turnover.030 487 11. together with the other shareholder SILL SA. Procurement of fresh vegetables Pinguin has concluded sowing and purchase contracts with a number of farmers for the procurement of fresh vegetables harvested during the 2006-2007 financial year. The French subsidiary was liquidated in 2005. This amount is subject to fluctuation as a function of climate conditions and market prices for fresh vegetables.000 and serves as a guarantee for credit facilities. These are the acquisition and implementation of an ERP SAP package (EUR 448.000.095 1. This warrantage is limited to a maximum threshold inventory of EUR 25.010 33.488 50.000.099 9.000. Commitments Commitments concerning investments in tangible fixed assets As at 30 June 2006 the Group had commitments to acquire assets in an amount of EUR 1. The liquidation balance should suffice to pay off the remaining debts.

as there have been no further transactions beyond the taking of the interest. with Mr Jan Dejonghe as its permanent representative. but are not included in this note. termination benefits or benefits in shares paid out to the directors during the financial year. The Group does have a participating interest in Tomates d’Aquitaine and a few shares in Starbrand Spolka.Variable remuneration .7. CEO remuneration 30 June 2006 Fixed remuneration (in 000 Euro) Variable remuneration Other contractual Total: Vijverbos NV 186 0 39 225 Executive directors (excluding CEO) (in 000 Euro) 30/06/2006 30/06/2005 Number of persons at year-end . was replaced as Chief Financial Officer (CFO) by BVBA The New Mile with Mr Steven D’haene as its permanent representative.3. Related parties Transactions between the company and its subsidiaries.Basic remuneration . Gemin Management Deprez BVBA Total 54 0 0 0 0 0 0 15 0 0 69 0 0 0 0 0 0 0 30 0 0 30 54 0 0 0 0 0 0 45 0 0 99 There are no directors’ pension plans.Remuneration as directors of subsidiaries .8.Termination benefits 1 448 0 0 0 3 417 0 0 0 183 . have been eliminated in the consolidation and are therefore not included in this note. On 10 April 2006 Demafin BVBA. These fall under the IAS 24 definition of related parties. As he resigned as a director of Pinguin NV only on 8 June 2006. The Group has no participating interests in joint ventures. Ltd. nor were long-term remuneration. which are related parties. Pinguin Foods UK. Mr Nigel Terry is now responsible exclusively for Sales and Marketing of the Pinguin Group’s British facility. he is included in the list of executive directors in the present 2005-2006 financial year. nor in associated enterprises which could therefore be classified as related parties. Directors’ remuneration 30 June 2006 Fixed remuneration (in 000 Euro) Variable remuneration Total: The Marble BVBA Vijverbos NV Kofa BVBA Nigel Terry Patrick Moermans Fortis Private Equity NV Jo Breesch MOST BVBA O.

Purchase of goods .00.057. being EUR 1. These assets were taken over at same amount as the acquisition value of the transferred assets. Peca Management has been part of the Group executive management since 01 January 2005. These assets were taken over at the acquisition value of the transferred assets.Other benefits 78 71 Total: 526 488 Executive management – Group (in 000 Euro) 30/06/2006 30/06/2005 Number of persons at year-end . Pinguin Langemark NV and Pinguin Convenience NV sold investment goods to Pinguin Invest NV on 21 June 2005 and 30 June 2005.077.Remuneration as directors of subsidiaries . this transaction is regarded as a related party transaction within the framework of Article 523 of the Belgian Belgian Company Code.Outstanding payables 556 221 1.627 1. but also a director of Pinguin Invest NV and a director of Pinguin Langemark NV.Outstanding receivables .Sales of goods . rental costs passed on to the Group and interest. The other benefits consist mainly of reimbursement of expenses incurred by Group executives on behalf of Pinguin Group: business expenses.077 1. each as the permanent representative of one of the management companies of Pinguin NV. The abovementioned amounts are therefore ex-VAT.Termination benefits .267 184 .00 were invoiced.077. In all EUR 1.077 1.Variable remuneration . As Group executives operate on a self-employed basis. Related parties (in 000 Euro) 30/06/2006 30/06/2005 Transactions and outstanding balances with related parties Pinguin Invest NV .Basic remuneration . Given that Koen Dejonghe and Herwig Dejonghe. Kofa BVBA and Vijverbos NV respectively.057. The above transaction was ultimately reversed in that Pinguin Invest NV also sold back all investment goods as at 21 June 2005 and 30 June 2005 to Pinguin NV. their services are invoiced to Pinguin NV. were not only permanent representatives of one of the management companies of Pinguin NV. No capital gains or losses were recorded on these deals..Other Benefits 2 185 50 1 63 19 4 Total: 254 67 BVBA The New Mile has been part of the Group executive management since 10 April 2006.

7. This will take the form of converting GBP 7.10.3. IFRS 3 “Business Combinations” has not been applied retroactively to business combinations that took place prior to the IFRS transition date. Because the Group is reporting for the first time in accordance with IFRS. At the same time the Board of Directors approved on the same date the capital increase by Pinguin NV in Pinguin Foods UK. assignments in an amount of EUR 415. Non-audit missions undertaken by the statutory auditor + related parties During the financial year from 1 July 2005 to 30 June 2006. Under Belgian legislation the used derivatives were not required to be recognised on the balance sheet. The valuation rules used differ from those previously applied under Belgian accounting law. and not yet sufficiently worked out for it to be possible to estimate the impact on the future activities and results of Pinguin Langemark NV. • • • • 185 . The consolidated financial statements presented in this Annual Report have been prepared in accordance with the International Financial Reporting Standards as accepted within the European Union.3. Cumulative translation differences. IFRS 1 allows a first-time starter not to provide the comparative information in accordance with IAS 32 and IAS 39. been formally approved. Note on the transition to IFRS Until 30 June 2005 the Pinguin Group prepared up its official financial reporting and consolidated annual financial statements in accordance with the prevailing Belgian legal and regulatory provisions concerning financial reporting.000 were undertaken by the statutory auditor and persons working under cooperative arrangements with him. IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” has been applied only from 1 July 2005 onwards. On 22 September 2006 the Group announced that was going to centralize its Belgian packaging activities at Westrozebeke and that Group was planning a major logistics investment at its Westrozebeke site. A number of exemptions to this principle are provided for in IFRS 1. Assets classified as held for sale and discontinued operations. Business combinations.7. however. IFRS 1 allows tangible fixed assets to be valued at transition date at fair value.000) and other further insurance-related assignments (EUR 232. 7.3. This capital increase is planned to take place at the Extraordinary General Meeting of 26 October 2006. Events since the balance sheet date On 30 August 2006 the Board of Directors decided to carry out a capital increase in cash of EUR 12.9. In accordance with IFRS 1. Fair value or revalued amount as the assumed cost. it has applied IFRS 1 “Firsttime Adoption of International Financial Reporting Standards”. This exemption has been used for a limited number of tangible fixed asset categories (land and buildings). tax and legal advice (EUR 170. Application of this exemption means that the comparative information for the 2004 financial year for financial instruments is still given according to Belgian accounting principles. with this fair value applied as the cost at that point in time.11. This plan has not yet. These assignments consisted essentially of further legal audit assignments (EUR 13. IFRS 1 requires the company to apply retroactively each IFRS that was applicable at the reporting date of the company’s first IFRS consolidated financial statements to the IFRS opening balance and to all periods reported on in the first IFRS financial statements. all cumulative foreign currency translation differences were deemed to be zero at the IFRS transition date.000). The Pinguin Group has made use of the following exemptions: • Application of IAS 32 “Financial Instruments: Disclosure and Presentation” and IAS 39 “Financial Instruments: Recognition and Measurement”.000). In accordance with IFRS 1.000 of trade debts into capital.5 million.500.

460 -2.009 -2. In 000 Euro Total equity attributable to the shareholders of the parent according to Belgian GAAP for a period of 12 months Notes 1/7/2004 30/6/2005 19.789 In 000 Euro Profit / (loss) attributable to the shareholders of the parent according Belgian GAAP for a period of 12 months Notes 30/6/2005 -9.945 248 -189 -211 -5 -76 158 Profit/ (loss) attributable to the equity holders of the parent according IFRSs -7.481 -176 -926 354 12.902 Restatements Reclass 'Minority Interests' Restatement tangible fixed assets Not recording amortization on goodwill Impact of IFRS-restatement on capital grants Impact of IFRS-restatement on stock value Not recording seasonal adjustments Deferred taxes Other adjustments (1) (2) (5) (6) (7) (8) (9) (10) 2.Impact of the transition from GAAP to IFRS The impact on equity and on the Group’s share in net profit of the changes in the recognition and valuation rules of the Pinguin Group following the switch from the previously used Belgian accounting standards to IFRS is shown below.159 -2.465 -2.059 -2. 2.500 -248 248 -961 -3.068 22. Tangible fixed assets The direct impact on equity and net profit (loss) is the outcome of four elements: • • The application of the components approach The revision of the estimated useful life of a number of tangible fixed assets based on independent experts’ reports 186 .560 -662 Total equity attributable to the equity holders according IFRSs 16.112 23.044 -171 10.500 -248 -1.715 Restatements Reclass ‘Minority Interests’ Restatement tangible fixed assets Exceptional write-down related to Pinguin Foods UK Ltd Exceptional write-down of goodwill Not recording amortization on goodwill Impact of IFRS-restatement on capital grants Impact of IFRS-restatement on stock value Not recording seasonal adjustments Deferred taxes Other adjustments (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) -3.395 525 1.140 -3. Minority interests In accordance with IFRS minority interests are recorded under equity.507 1.908 -3.

this ‘seasonal adjustment’ is not longer applied. 187 . 10. In accordance with IFRS principles. Capital grants In accordance with IFRS. 7. goodwill is no longer amortized but is tested annually for impairment.• The measurement at fair value at transition date of certain of the Group’s land and buildings. Deferred taxes The impact on deferred taxes is due essentially to the temporary differences resulting from the corrections mentioned above. employee benefits and general costs) were transferred to the second half of the calendar year. the amortization recorded under Belgian financial reporting standards has been reversed. These fair values have been ascertained by independent consultants. owing to a loss-making activity and falling market competitiveness a special impairment loss was recorded at the transition date on the plant and equipment of Pinguin Foods US Ltd in an amount of EUR 2. capital grants have been deducted from the tangible fixed assets to which they refer. Impairment loss on the goodwill of Pinguin Salads In accordance with IAS 36 “Impairment of Assets”. The revision of the estimated useful life of certain tangible fixed assets under IFRS has also impacted the recognition in income of these capital grants.5 million.4 million o Pinguin Salads: KEUR . 4. Seasonal adjustments Under Belgian GAAP. Other The other adjustments deriving from the restatements of the assets and liabilities of the Pinguin Group according to IFRS standards resulted in a negative impact of EUR 176. This revaluation amounting to € 17.000. The vegetable season starts only at the end of May. every June a considerable portion of costs (depreciation. with 75% of the busy harvest season in the second half of the calendar year. 6.1 million at the transition date can be summarized as follows: o Pinguin Westrozebeke: EUR 11. Impairment loss Pinguin Foods UK Ltd In accordance with IAS 36 “Impairment of Assets”. Inventories The lower depreciation on certain tangible fixed assets as a result of the revision of the useful economic life on transition to IFRS (see item 2) has also affected the valuation of inventory under IFRS. 8.7 million o Pinguin Langemark: EUR 4. and not from equity as in Belgian financial reporting principles. 9. 5. These adjustments relate among other things to car leases and revenue recognition. This relates to land and buildings of the Belgian (with the exception of Ieper) and French facilities. an impairment loss was recorded at the transition date on the remaining goodwill in respect of Pinguin Salads.2 million 3. As a result of this. Goodwill amortization Under IFRS.170 o Pinguin Convenience : KEUR -16 o Pinguin Aquitaine : EUR 1. This impairment loss was recorded based on an estimate of the fair value less the costs of sale.

00 99.00% 99.00 99. 188 .00% Change in the consolidation scope No changes occurred in the consolidation scope during the financial year.80% 99.1.00 100.00% 100.00 100.768.00% 0.557.00 99.90% 0. Fully consolidated subsidiaries The parent company of the Group is Pinguin NV.99% 0. SARL Rue Jean Goujon 8 75008 Paris France Pinguin Deutschland GMBH Oststrasse 122b 22844 Norderstedt Germany Pinguin Aquitaine SAS Avenue Bremontier 40160 Ychoux France Pinguin Foods UK LTD Scania Way Kings Lynn GB-PE30 4LR Norfolk United Kingdom Change of percentage of capital held (as compared to the previous period) Proportion of capital held (in %) Voting rights (%) 100.157 Pinguin Langemark NV Poelkapellestraat 47 bus B 8920 Langemark BE 427.317 Pinguin Salads BVBA Sneppestraat 11 Bus A 8860 Lendelede BE 437. the VAT number or the national number Pinguin NV Romenstraat 3 8840 Westrozebeke (Staden) BE 402. NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS 2005/2006 AND 2006/2007 7.7.80% 0.99% 52. Westrozebeke. for companies governed by Belgian law.00% 0.777.A.00 52. full address of registered office and. At 30 June 2007 there were 6 subsidiaries included in the consolidated financial statements by the full consolidation method. nor does it have significant direct or indirect influence on them.00 100. Name.4.00% 99.00% 0.4. Companies that are neither subsidiaries nor associated companies The companies below are not included in the consolidation scope.793 M. Belgium.00% 0.C. because the Group does not have the power to beneficially control their financial and operational policy.99% 100.

it was easy to attribute the balance sheet 189 . The result of a segment contains the income and costs generated directly by that segment. for companies governed by Belgian law. The sale price was equal to the initial capital investment.4. the VAT number or the national number Tomates d’ Aquitaine Souillès 47300 Bias France Proportion of capital held (in %) 14.676 Net result -1. full address of registered office and. The assets and liabilities of a segment are those belonging directly to it.00% HKD Share capital 1 Net result Not available first financial year not yet closed 7. the VAT number or the national number Pinguin Hong Kong 25/F One Capital Place 18 Luard Road Wanchai Hong Kong Proportion of capital held (in %) Data from the most recent period of which annual accounts are available Currency 100. In July 2007 a new representative office was opened in Hong Kong for the Asian market. Segmented information 7.2. France and the United Kingdom. full address of registered office and. Unlike in the last financial year.1.28% Data from the most recent period for which annual accounts are available (30-06-2006) Currency EURO Capital -330.4. in Kings Lynn (Norfolk) and Boston consists of the sales offices MAC Sarl and Pinguin Deutschland GmbH. including the portion of the general income and costs that can reasonably be attributed to the segment.00% Data from the most recent period of which annual accounts are available Currency USD Share capital 0 Net result The shares in Pinguin China were sold in the first half of the financial year to the Chinese partner and joint shareholder. there are no discontinued operations.: • • • • Belgium: France: SAS UK: Other: consists of Pinguin Westrozebeke NV. for companies governed by Belgian law.630 Name. The Pinguin group has its production facilities in the most fertile regions of these three countries. It has therefore opted for geographically segmented reporting. for companies governed by Belgian law. Primary reporting (geographic segment) For both production and internal reporting purposes the Group is organised into geographic regions: Belgium. the VAT number or the national number Pinguin China Xinling Road 18 Waigaoqiao Tax Free Zone Shanghai China Proportion of capital held (in %) 0.2. viz. Name. full address of registered office and. Pinguin Aquitaine consists of Pinguin Foods UK Ltd.Name. Pinguin Langemark NV consists of the production facility in Ychoux (Aquitaine).380. The geographic segments are based on the location of the assets and form the basis on which the “Pinguin Group” reports its primary segment information. With the segment reporting structured according to the geographic location of the assets.

183 -1.374 1 484 0 -50 65 1 0 6 0 0 3 13.261 30.593 361 361 361 361 -29.242 147.Mintority Interests EBITDA* ASSETS AND LIABILITIES Segment assets Total assets Segment liabilities Total liabilities OTHER INFORMATION Capital expenditure .629 101.152 2.019 0 112 120 0 333 1.593 10.523 -2.967 -1.inter-segment sales Increase/decrease in inventories Negative goodwill recognised in income statement Other operating income (third parties) Other inter-segment operating income Total operating income RESULTS Operating results (EBIT) Net finance costs Results before taxes Income taxes Net results .371 733 4.143 -25. Capital expenditure per segment consists of the cost of acquired assets with an expected useful life of more than one year.602 0 11.444 133.236 2.845 11.551 4.444 -29. The same valuation rules are used in this segment reporting as in the consolidated financial statements.414 373 118. Inter-segment transfer pricing is based on market conditions.319 121.Tangible fixed assets .340 8.586 4.319 30.602 4.513 5.778 0 0 164 366 12.934 156 11.items to the respective segments.261 10.661 1.319 121.261 30.593 10.152 0 1.868 32 13.335 856 0 4.242 0 5.261 30.090 133.319 121.158 172 -63 109 -30 79 79 0 178 10.520 -25.Intangible fixed assets Depreciation Write-downs in P&L-account Provisions Number of employees (year end) 7.900 6. Income statement per segment Belgium (sub-consolidated) United Kingdom 30/06/2007 (in thousands of €) INCOME Sales .152 0 2.444 -29.464 611 132 479 0 0 18 0 629 -1.090 133.Share of the Group .306 724 -256 468 -401 67 35 32 1. Assets and liabilities per segment are presented before elimination of inter-segment positions.323 1.977 732 4.855 360 -274 813 121.090 6.212 45.690 190 Consolidated Eliminations France Other .253 240 -224 342 4.Sales to external customers .660 -508 2.377 -26.586 86 638 53.444 -29.143 147.294 11.090 133.454 -852 4.878 112.683 0 158.272 47.283 6.593 10.179 1.

092 -241 -93 -334 0 -334 -334 -903 -880 -1.080 112.460 150.878 United Kingdom 30/06/2007 (in thousands of €) Continuing Discontinued operations operations INCOME Sales .inter-segment sales Increase/decrease in inventories Other operating income (third parties) Other inter-segment operating income Total operating income RESULTS Operating results (EBIT) Net finance costs Results before taxes Income taxes Net results .546 653 6.Sales to external customers .121 13.585 -797 79 412 13.428 -11 -50 4 -46 0 -46 -46 684 -2.062 -116 617 111.460 191 Consolidated Belgium (subconsolidated) Eliminations France Other .037 111.310 55.121 18.Minority interests EBITDA ASSETS AND LIABILITIES Segment assets Total assets Segment liabilities Total liabilities OTHER INFORMATION Investment expenditure .855 360 -274 -1.586 EBITDA 13.441 869 208 6 922 57.335 -997 2.774 51 3.783 -1.906 150.223 1.158 112.149 258 108.912 463 463 463 463 -32.600 2.523 4.Intangible assets Depreciation Write-downs Provisions Number of employees (year end) 5.158 4.783 0 -1.824 55 5.592 -30.Tangible fixed assets .446 13.022 0 587 0 0 158 990 0 645 -3 -9 41 14 0 10 28 0 5 7.158 112.037 111.158 112.284 -609 -2.416 820 135 685 0 10 0 830 -1.402 56.Negative goodwill recognised in income statement 10.344 13.912 13.362 0 1.092 -2.049 -14 661 1.402 1.722 137 13.037 705 705 705 705 18.483 -609 -2.Share of the Group .080 -32.565 -1.912 13.679 93.968 -2.089 2.912 13.080 -32.766 -28.037 111.796 -434 1.* Calculation EBITDA 30/06/2007 (in thousands of €) Consolidated EBIT + Depreciation and reversal of impairment losses on assets + Write-downs + Provisions .362 709 653 2.121 18.893 -3.066 151.853 106.946 1.121 18.783 1.080 -32.960 -208 -316 82 -1.039 -107 413 24 4 35 -2 0 0 1.474 -1.

058 13.591 57. Sales Pinguin sells its products in over 40 countries around the world.061 EBITDA discontinued operations -208 EBITDA.255 149.505 21. The lower buy-in price of maize (at market conditions) following a change in the shareholder agreement (Pinguin Aquitaine) positively affected the operating results in Belgium.01% 32.218K of non-recurrent income from the sale of our storage facility at Ieper.40% 14. This. this produced a significant improvement in the operating results. 192 .75% 16.42% 18. Including this negative goodwill and the restructuring costs.242 16.064 -116 EBITDA (continuing operations) 7.756 24. in turn. High sales volumes and higher sales prices explain the higher sales in Belgium. France and other EU countries. a negative impact on the results of Pinguin Aquitaine.459 21. Together with higher sales prices (+ 2.13%) for deep-frozen vegetables.188 1.147 4.* Calculation EBITDA 30/06/2007 (in thousands of €) Consolidated EBIT + Depreciation and reversal of impairment losses on assets + Write-downs + Provisions 925 5.739 27. higher sales prices and the almost total absence of non-recurring restructuring costs. Sales (in thousands of €) Belgium UK France Germany Other EU countries Other Total Sales 30/06/2007 23.492 4.36% 3. On 1 June 2007.63% 14. the Boston site contributed € 1.14% 38. the assets acquired in this way were valued at fair value. Results from the Kings Lynn site also improved significantly despite lower sales.48% 15.10% 100% 30/06/2006 19. together with lower sales by the French subsidiary. discontinued operations included 6. This change on the inter-company buying price for maize had.015 21. which were more than offset by efficiency improvements. Initial restructuring was undertaken immediately.6 million being taken into income. Higher production and sales volumes in Belgium provided a wider base for absorbing fixed costs. The table below gives an overview of sales by customer location. In accordance with IFRS. at a cost of EUR 0.204 23. Pinguin acquired the assets and activities of Padley Vegetables (in Boston) via Pinguin Foods UK. are the main reasons for the lower operating results at Pinguin Aquitaine.567 147.44% 14.85% 100% Lower production and the curtailing of unprofitable customer relationships in England explain the lower sales in the UK.570 47.2 million.2 million to the UK operating results.42% 2. with negative goodwill of € 1.853 The significant increase in the results in Belgium is explained by a number of operational improvements and by € 2. Even so the vast majority of sales are made in Belgium and neighbouring countries. own-management of the cold storage facilities.

The company employed 19 people and represented around 2.(in thousands of €) INCOME Sales .2. Despite heavy investment.7.4. Secondary reporting segment (by business segment) The Pinguin Group’s sales are centred on products that all belong to the deep-frozen vegetable segment.3.049 1.Sales to external customers . For this reason. This year the Group had no discontinued operations.. This decision was taken in the light of the continuing losses of this 100% subsidiary.4. Discontinued operations On 1 December 2005 we announced the closure of bvba Pinguin Salads.inter-segment sales Increase/decrease in inventory Other operating income (third parties) Other inter-segment operating income OPERATING CHARGES Purchases Services and other goods Personnel costs Depreciation Write-downs Provisions Other operating charges Operating results (EBIT) Net finance costs Results before taxes Income taxes Net results 0 0 0 0 0 0 -300 -241 -93 -334 0 -334 0 0 0 0 0 0 0 0 0 0 0 0 0 2. the hoped-for sales growth had failed to materialise.402 1. business segment reporting is not applied. a producer of fresh-cut and chilled vegetables.402 0 -14 661 0 -2.5% of “Pinguin Group” sales.061 -503 -393 -35 2 30/06/2007 30/06/2006 Cash flow statement Cash flow statement Pinguin Salads (in thousands of €) CASH AND CASH EQUIVALENTS STARTING BALANCE CASH FLOW FROM OPERATING ACTIVITIES Net results Adjustments for non-cash items Increase/decrease in working capital CASH FLOW FROM INVESTING ACTIVITIES Acquisitions (-) Disposals 0 0 0 205 143 -334 98 379 635 -28 663 30/06/2007 30/06/2006 193 .2. Discontinued operations Pinguin Salads . 7.290 -1.

It was also decided.110 30/06/2007 30/06/2006 Other operating income rose by EUR 2.CASH FLOW FROM FINANCING ACTIVITIES Reimbursement of long and short term funding (-) Short and long term funding received ( + ) NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS.192 1. The remaining other operating income consists mainly of packaging materials costs passed on to customers.683 67 5 243 0 1. negative goodwill recognised in the income statement and other operating income Group sales consist entirely of the sale of fresh-frozen vegetable products.128 1.058 The lower sales figure reflects lower sales volumes in the UK and the ending of third party contract work in the UK.053 742 2. 194 . Sales.586 0 30/06/2007 30/06/2006 This item refers to the negative goodwill recognised in the income statement following the takeover of the operating activities of Padley Vegetables Ltd.4. Negative goodwill recognised in income statement (in thousands of €) Negative goodwill recognised in income statement 1. This fall was largely compensated by higher sale prices and increased sale volumes in Belgium. following the restructuring in the UK during the 2005/2006 financial year. to end commercial relationships with unprofitable customers. Most of this rise reflects the capital gain on the sale of the buildings and the business branch in Ieper (EUR 2.246 4. ENDING BALANCE 0 0 0 -964 -964 -186 19 7.218K).242 149. Sales (in thousands of €) Sales "Frozen" (continuing operations) 30/06/2007 30/06/2006 147.573K. Other operating income (in thousands of €) Operating subsidies Rentals Insurance compensation received Realised capital gain Transport costs invoiced to customers Other Total 24 32 61 2.4.

the costs of external storage and work by third parties fell by € 4. The fall in personnel costs is. The rise in fresh vegetable purchases is explained by a significant increase in production volume. Operating Charges 30/06/2007 83.733 36. With the reduction in external storage and the corresponding increase in internal storage.811 1.898 1. consumables and goods for resale”.951 1.850 429 2.258 880 1.498 4. consumables and goods for resale Purchase of fresh vegetables Purchase of frozen vegetables Purchase of packing materials Storage and work by third parties Transport costs related to purchasing activities Purchase of ingredients Purchase of seeds Other Services and other goods Transport Energy Maintenance + IT Rent (forklifts.889K.069 2.037 2.004 7. The reduction in personnel costs (EUR 2.703 148.608 5. In earlier years the cold storage facilities at the Kings Lynn site were managed by an outside firm.182 2.181 -72 38.345 9.916 7.7%.235 30. hardware.7.950 22.748 27. admittedly.118 3.167 30/06/2006 82. buildings (UK)…) Interims Insurance External advisory Costs related to sales and administration Cost effluent Pinguin UK Other Personnel costs Depreciation and reversal of impairment losses on assets Write-downs and provisions Write-down of tangible fixed assets Write-down of inventories Write-down of trade receivables Provisions Other operating charges Total A number of changes took place under “raw materials.807 19. 195 .112 6. The increase in frozen vegetable purchases is partly explained by the takeover of the inventory of the former Padley Vegetables and partly by higher purchase prices.847 4. Celsius First Ltd. In all.5.622 1. The cost item ‘storage and work by third parties’ fell sharply.4.558 5..286 808 35.657 Operating charges (in thousands of €) Raw materials. energy costs rose by 19. We are also stocking less with outside parties in France.025 1. Since mid-June 2006 Pinguin has been managing its own storage activities in the UK.591 9.671K increase in interim labour costs.332 7. This has sharply reduced external storage costs.624 148.673 2. on its own account. partially offset by a EUR 1.441 9.376 3.487 1.137 8.188 948 0 663 401 -116 1.537 313 2.887 31.711K) is due primarily to last year’s successful restructuring in the UK.855 86 0 619 -259 -274 1. A large number of the British subsidiary’s employees were made redundant and replaced with temporary labour.191 1.776 2.

6.4.Other TOTAL FINANCIAL RESULT -2.755 396 323 141 51 85 76 30/06/2007 30/06/2006 725 880 196 .Realised exchange results .Conversion differences . 7. Operating result (EBIT) The operating results from continuing operations improved from € 925K to € 10.The fall in external advisory services is explained by the fact that few capital operations and share transactions took place and a reduction in the use of external consulting and services (2005/2006: conversion to IFRS.Valuation to fair value of the financial instruments .340 -2.Other operating financial expenses Non-operating financial expenses .4.523K.).875 0 0 0 -36 -136 -315 -358 0 -32 0 -2. Financial income and expenses The financial income and expenses of the Pinguin Group break down as follows: Financial income and expenses (in thousands of €) FINANCIAL INCOME Operating financial income .7. including the effect of discontinued operations Operating results (in thousands of €) 30/06/2007 30/06/2006 % Operating result (EBIT) 10.213 -337 -343 -2.253 -527 -270 44 468 21 -3.065 -3.Interest on leasing .Unrealised exchange results .Interest charges on interest-bearing liabilities .Write-downs of financial assets . Other operating expenses relate primarily to property taxes and environmental levies. Please see the consolidated annual report of the Board of Directors in this annual brochure for a more detailed discussion of the operating results.Interest income . new business plan. The increase is explained by a number of operational improvements and several non-recurrent income items.438% 7. Operating results.Other operating financial income Non-operating financial income .523 684 1.Realised exchange results FINANCIAL EXPENSES Operating financial expenses .Losses/ gains on disposal of financial assets .Valuation to fair value of the financial instruments . etc.

99% -2.Adjustments to current taxes relating to prior periods .253 0 -20 0 -589 0 -1.00% 39.781 91 -2.Adjustment to current taxes in respect to prior periods .Non-recognition of deferred tax assets on tax losses . This latter reflects primarily the positive effects of exchange rate fluctuations.Recognition of a deferred tax asset not previously recognised .Adjustments to deferred taxes relating to prior periods .283 -609 The following tax rates were applied at both 30 June 2006 and 30 June 2007: • • • • Belgian tax rate: French tax rate: United Kingdom tax rate: German tax rate: 33. Income taxes 30/06/2007 30/06/2006 Tax expenses reported in the income statement (in thousands of €) .58% 30/06/2007 30/06/2006 Relationship between tax expense and accounting profit (in thousands of €) Result before taxes Theoretical tax rate Tax (expense)/income at the Belgian tax rate Effect of different tax rates in other countries Theoretical tax expense Average theoretical tax rate Tax effect of: .33% 30.690 32. Pinguin ended its co-operation because of the limited results.68% -192 0 0 0 -1.183 33.Utilisation of deferred tax assets not previously Recognised .4.Deferred taxes for the year .87% -1.950 33. Starbrand Polska was a marketing bureau in which Pinguin was one of the six partners. and in particular that of the GBP against the EUR.62% -124 296 0 0 -104 932 350 57 -1.Other Effective tax expense Effective tax rate 8.99% 33. The write-downs of financial assets relate to Starbrand Polska and Tomates d’Aquitaine. 7.Non-deductible items . and falling interest charges with the further repayment of leasing debts.Adjustment to deferred taxes in respect to prior periods TOTAL TAX EXPENSE REPORTED IN THE INCOME STATEMENT -30 0 -1.Current taxes for the year .23% 197 .283 15.The EUR 535K rise in financial results is the combined outcome of a EUR 155K fall in financial income and a EUR 690K fall in financial expenses.8.033 0 19 -609 31.99% 663 -66 597 30.Notional Deduction of risk capital . The remaining shares in Tomates d’Aquitaine also were written off at an additional cost of EUR 125K.

411 Basic Diluted -3.212 -0.80 Diluted -3.411 4.4.212 -0.4.4. Earnings per share Earnings per share is calculated by dividing the Group’s share in the net result by the weighted average number of shares outstanding during the year (total number of shares less own shares).805 6.546 -0.365 636 -29 14 636 733 596 55 198 . Software Intangible assets 30/06/2007 30/06/2006 (in thousands of €) AT COST BALANCE AT THE END OF THE PRECEDING PERIOD Acquisitions Acquisitions through business combinations Sales and disposals Transfer from one heading to another Translation differences Other BALANCE AT THE END OF THE PERIOD DEPRECIATIONS AND WRITE-DOWNS -4 1.459.10.7.3.356 6.12 6.546 -0.4.459.3.868 1.80 Basic -3.72 7.411 4.459.805 40.136.9.868 Diluted 6.177.136.13) Weighted average number of ordinary shares (diluted) Including discontinued operations Net income attributable to ordinary shareholders (in thousands of €) Earnings per share (in €) Continuing operations only Net income attributable to ordinary shareholders (in thousands of €) Earnings per share (in €) 4.13) Weighted average number of ordinary shares (diluted) 6. Per 30 June 2007 Basic Diluted Weighted average number of ordinary shares Dilution effect of warrants (note 7.11 Per 30 June 2006 Basic Diluted Weighted average number of ordinary shares Dilution effect of warrants (note 7.72 -3.161 Basic Net income attributable to ordinary shareholders (in thousands of €) Earnings per share (in €) 1.

820 3.834 1.431 199 .312 0 44 0 30/06/2006 5.457 0 0 73.11.664 -164 -5.517 26.783 27.191 0 107 -4 30.459 -4 164 65.BALANCE AT THE END OF THE PRECEDING PERIOD Depreciation Impairment losses Write-downs Withdrawals after sales and disposals Transfer from one heading to another Translation differences Other BALANCE AT THE END OF THE PERIOD NET CARRYING AMOUNT BEFORE INVESTMENT GRANTS Net investment grants NET CARRYING AMOUNT AT THE END OF THE PERIOD 368 175 183 208 -26 3 543 822 -1 821 368 268 -3 265 Software investments consist mainly of the acquisition and implementation of a new software package (SAP) which went into operation in the Belgian entities in June 2007.504 0 Other 0 13.824 0 -1.462 5.947 2.414 55.287 3.953 0 0 60.612 3.216 0 -193 -3 -64 -4 10.084 60. Tangible fixed assets Assets under construction Furniture and vehicles Plant. 7.287 715 -1.4.664 10.126 -8 -5.258 -887 -1.463 -486 5.139 3.727 428 -2.594 35.551 59 529 198 -149 8.414 5.084 -808 3.327 1.171 -313 5 148 76 -25 2.922 -65 -231 4 65.735 142 48 345 5.766 25.251 Leasing 3.054 7. machinery and equipment Land and buildings 30/06/2007 30/06/2007 (in thousands of €) BALANCE AT THE END OF THE PRECEDING PERIOD Acquisitions Acquisitions through business combinations Sales and disposals Transfer from one heading to another Translation differences Other BALANCE AT THE END OF THE PERIOD DEPRECIATIONS AND WRITE-DOWNS BALANCE AT THE END OF THE PRECEDING PERIOD Depreciation and withdrawals on depreciation Reversal of impairment losses Withdrawals after sales and disposals Transfer from one heading to another Translation differences Other BALANCE AT THE END OF THE PERIOD NET CARRYING AMOUNT BEFORE INVESTMENT GRANTS AND RECLASS LEASING 30.318 578 7.316 379 5.002 199 1.811 8.292 548 -887 -488 39 0 0 10.

Pinguin Foods UK has also taken over £ 1.084K of machinery was acquired with the takeover of Padley Vegetables Ltd. At the balance sheet date the acquired fixed assets were valued on the basis of an independent valuation.60% and a growth rate of 3% had been applied.Net investment grants Reclass leasing -512 3. This reflects an improvement in the realisable value and the updating of the discount rate and growth percentages.490K) of assets.566 -1. a discount rate of 7. In accordance with IAS 16. Note on Padley: On 1 June 2007 Pinguin reached an agreement with the Padley family to acquire the assets and activities of Padley Vegetables Ltd.954 -10 246 -187 -5. 200 . The sharp increase in transfers and withdrawals (EUR 3.867K).044 1.269K) in the year to 30 June 2007 compared with the year before relates mainly to the sale of the land. At 30 June 2007 the Group’s fixed assets were encumbered as follows: .419K). The review did not reveal any need to adapt useful lives for the present period. EUR 3. £ 918K (EUR 1. At 30 June 2007 an impairment loss recognised earlier in relation to tangible fixed assets was reversed in an amount of EUR 887K.916 615 606 0 0 0 345 0 164 58. The other transfers and withdrawals consist mainly of the sale of Pinguin UK’s chip line. which is when Pinguin Foods UK took over management control. At the time of reversal. buildings and other tangible fixed assets of Pinguin Ieper to an external party. In the light of this requirement the Group tested the useful life of the tangible fixed assets for under and over-valuation.360K) of this amount is repayable at a rate of £ 153K (EUR 228K) a year under a sixyear interest-free vendor financing arrangement. the discount rate was updated to 7.079 0 NET CARRYING AMOUNT AT THE END OF THE PERIOD (30 June 2007) NET CARRYING AMOUNT AT THE END OF THE PRECEDING PERIOD (30 June 2006) 29. packaging lines (EUR 585K). The main investments at Pinguin Aquitaine were hoists and conveyor belts (EUR 281K).226 20.Mortgage mandates: EUR 487K (30 June 2006: EUR 487K). . but these will be reviewed every year and kept up-to-date. These activities are being continued out of Pinguin Foods UK.172 The main investments in the year to 30 June 2007 were the building of a new mixing and packaging area (EUR 831K) and an automated cold storage warehouse (EUR 935K) at Pinguin NV. Pinguin Langemark invested in a spinach reception line (EUR 142K). The recoverable value is based on the value in use or the present value of the future cash flows expected to derive from an asset or a cash flow generating unit.753 0 -2. The land was worth EUR 6. while the growth percentage remained unchanged.069K). Pinguin UK Foods invested in 15 domino printers (EUR 353K) and goods hoists (EUR 277K). The impairment loss had been recognised previously because the recoverable value of the cash generating unit Pinguin Foods UK had been lower than the carrying amount. condensers (EUR 126K) and a packaging line (EUR 90K). When recognising the impairment loss.002K (EUR 1. estimates of remaining value. useful life and depreciation methods are reviewed every year and any significant changes in estimates have to be mentioned. a digital sorter (EUR 324K).141 28. The new activities have been consolidated from 1 June 2007. Pinguin NV also invested in the following machines: multi-line palletiser (EUR 1.52%.837 31.228K at 30 June 2007 (30 June 2006: EUR 6. an automatic mixing installation (EUR 50K) and a new high voltage cabinet (EUR 96K).692K (30 June 2006: EUR 11.678 53.Mortgages: EUR 8.766 -1. The improvement in the estimated value of future cash flows from this cash generating unit reflects the strengthening of the market position in the UK and better budgeted results.

plant and equipment Current assets Inventories Deferred tax liabilities Net assets and liabilities identified Goodwill/(negative goodwill) Fair value 1. In this way no additional liabilities arise under IAS 19. however.The net fair value of the identifiable assets. No value has been attributed to these brands: Pinguin's focus for deep-frozen vegetables is primarily the private label market. These pro forma figures reflect the depreciation and value of the machinery obtained after the fair value valuation and not the depreciation recorded during the pre-acquisition phase. An estimate of what the impact would have been had Padley's activities been included since the start of the financial year (1 July 2006) gives an operating income of £ 33. no value was attributed to these. No existing receivables and liabilities were taken over. 190 persons were taken over at acquisition date. A part of the loss (EUR 1.164K). so as to estimate the income statement effect for a full financial year.483 201 . The cost of these together amounted to EUR 158K.835K) is explained by non-recurring costs incurred in the pre-acquisition period. A monthly settlement will take place based on effective processing and the quantities used and sold. These figures have been converted to cover 11 months.229K since the acquisition date. The Group has also taken over Padley Vegetables’ existing customer contracts and relations.685K (EUR 49.491 3. These consist primarily of start-up losses associated with a new product line and the bankruptcy of a major customer. The initial results from Padley were also negatively impacted by a number of start-up expenses and the costs of an initial restructuring plan in June 2007. The positive impact on the result of the recognition of negative goodwill of € 1. Pinguin has not acquired any brands in this asset deal. Certain brands may be used on a temporary basis. Padley concluded an agreement with Padley’s owners for processing and selling the remaining inventories. The existence of negative goodwill on this transaction relates mainly to the costs of an imminent personnel restructuring.868K) and a net loss of £ 786K (EUR 1. The results from the Padley activities taken over amounts (1 June 2007) to EUR 1. liabilities and contingent liabilities acquired from Padley exceeded the cost price of the business combination by € 1.586K.For this reason no value was attributed to intellectual property. These cover a period of 9 months and are the figures used for the due diligence. At the sale time. Under Group rules. Asset acquisition (in thousands of €) Book value Non-current assets Property. to which have been added the figures for June 2007 under Pinguin NV management.586K is not.069 3. and there is no certainty of commercial success. It should be pointed out that this positive result is obtained solely by the recognition of negative goodwill in the income statement.069 -1. requiring open receivables to be written off. This surplus (negative goodwill) was immediately recognised in the income statement as “recognition of negative goodwill” under other operating income.586 1. sufficient to offset these losses. The due diligence was also based on these figures. These pro forma figures are based on Padley’s reported figures at 30 April 2007. The table below summarises the impact of the takeover on the Group's financial position. against payment of a royalty. given the annual nature of the customer contracts and their volatility. Employees were taken over with retention of their social security charges.

Inventories Inventories 30/06/2007 30/06/2006 (in thousands of €) Raw materials and consumables Finished goods Total 3. the additional production in 2006/2007 and the higher buy-in prices for deep-frozen vegetables. these amounted at the end of the year to EUR 590K (30 June 2006: EUR 670K).539 Cash acquired Net cash outflow -1.458 2. Starting in the 2006/2007 financial year.456 30. Write-downs are also recorded for obsolete. The write-down for slow-moving stock is recorded as a write-down in the income statement and is therefore included in the calculation of EBITDA.952K at 30 June 2006. The increase in inventory value is explained mainly by the takeover of the inventory of Padley Vegetables (raw materials and consumables: € 658K.257 56 1.539 7.4. given the Group's much improved liquidity position. i.233 28. The write-down resulting from the LOCOM test is taken against income as a change in inventory.162 Inventories are subject to a ‘lower of cost or market’ (LOCOM) test.249K. Available-for-sale financial assets 30/06/2007 30/06/2006 Available-for-sale financial assets (in thousands of €) BALANCE AT THE END OF THE PRECEDING PERIOD Acquisitions Disposals and closures (Write-downs)/ reversal write-downs Transfers Exchange gains/(losses) BALANCE AT THE END OF THE PERIOD 220 0 -84 -136 0 0 0 108 112 0 0 0 0 220 202 .13. inventory.Remuneration in cash Remuneration payable Direct costs of acquisition 226 1. The total gross amount of inventory eligible for LOCOM write-down amounted at 30 June 2007 to EUR 6. The sharp fall relates primarily to maize.510K). At 30 June 2007 there are no longer any liens on vegetables. Lur Berri and Primco. finished products: € 2.12.676K.e. At 30 June 2006 the total gross amount was EUR 9.002 33. in which the average inventory price for each vegetable sub-group is compared with the average outstanding contract price for the same subgroup. The LOCOM provision for these amounts was EUR 839K at 30 June 2007 and EUR 1. due in part to the capital increase in late October 2006. 7.929 25.4. The warranting introduced last year as an additional guarantee for the extension of credit facilities was terminated at the end of December 2006. slow-moving. the buying price for maize has been being adjusted by an amendment to the shareholder agreement between Pinguin.

In the past financial assets were accounted for using the BE GAAP method. which was also written down to zero in the past financial year. 7.048 0 0 0 0 -439 7. The credit guarantee (‘gage espèce’) paid by Pinguin Aquitaine amounted to EUR 171K at 30 June 2007.208 203 . These were sold at their net carrying amount during the past financial year.14.844 1 0 382 0 Deferred tax liabilities 0 8.15.026 30/06/2007 Deferred taxes (allocation) (in thousands of €) Deferred tax assets Set up costs Tangible fixed assets Financial fixed assets Bond loan Inventories Trade and other receivables 0 486 0 0 171 12 Deferred tax liabilities 0 7. less any reductions in value. Pinguin also had a EUR 11K (12.390 -183 47 0 0 -2 774 6. the decision was made to apply the historical cost (less any reductions in value).026 2. Pinguin China was set up effective 30 June 2006 (75%) and the Group purchased shares for EUR 84K.153 27 25 0 3 TOTAL DEFERRED TAXES RELATED TO TEMPORARY DIFFERENCES 669 7.4.635 Deferred tax assets 0 -774 0 0 0 0 774 0 Deferred tax liabilities 5. in the absence of recent cash flow tables and a view of future cash flows.28%). 7. The remaining amount consists mainly of guarantees for car leases and pallets.4. From 1 July 2005 these investments have been recorded as available-for-sale financial assets. down EUR 135K on the previous year (30 June 2006: EUR 306K). At 30 June 2006. Deferred tax assets (liabilities): 30/06/2007 30/06/2006 Deferred taxes (net carrying amount) (in thousands of €) Deferred tax assets BALANCE AT THE END OF THE PRECEDING PERIOD Increase/(decrease) via income Increase/(decrease) via equity New consolidations Deconsolidations Translation differences Set-off of assets and liabilities BALANCE AT THE END OF THE PERIOD 0 789 0 0 0 0 -439 350 Deferred tax liabilities 6.818 2.268 8. As it was impossible to reliably determine the fair value of these assets. Long term receivables (> 1 year) 30/06/2007 287 30/06/2006 428 Receivables > 1 year (in thousands of €) Receivables > 1 year Amounts receivable after one year consist mainly of cash guarantees.55%) participating interest in Starbrand Spolka. with financial fixed assets valued at historical value.762 29 27 0 0 30/06/2006 Deferred tax assets 41 1. These were written down to zero in the 2006/2007 financial year. The Group owns (via MAC sarl) EUR 380K of shares in Tomates d'Aquitaine SAS (14.

where the improved profit outlook suggests that sufficient taxable profit will be available during the coming financial year for this recognised tax asset to be offset.030K). The main explanations for the increase/decrease in the results are: . but against which future taxable profits can be offset. This year there are no more investment grants receivable (30 June 2006: EUR 180K). Trade and other receivables 30/06/2007 29.298 30/06/2007 30/06/2006 Total 32. 204 . Management is of the opinion that the fair value of trade and other receivables does not differ significantly from the carrying value.Recording of a deferred tax liability of € 725K on the capital gain on the Ieper site.026 At 30 June 2007 the Pinguin Group opted not to recognise deferred tax assets in relation to deductible timing differences of € 136K at Pinguin Foods UK.419 27. given the current budget situation.110 243 35. . Unrecognised deferred tax assets (in thousands of €) Deductible temporary differences Operational losses 470 32.16. and interest receivable from Pinguin Invest of EUR 26K (30 June 2006: EUR 46K). the tax charge on which is being staggered in the unconsolidated accounts. a current account with Pinguin Invest in an amount of EUR 539K (30 June 2006: EUR 509K). A deferred tax asset of € 350K was.Unrecognised deferred tax assets in relation to deductible temporary differences Set-off of assets and liabilities NET DEFERRED TAX ASSETS / LIABILITIES -136 -183 350 0 -183 7. The figures are gross amounts. . however. No deferred tax assets are recognised on the tax loss carry forwards mentioned below.580 35.795 2.With the lower inventory write-down.310 2.214 Trade and other receivables (in thousands of €) Trade receivables Other receivables Total Other receivables at 30 June 2007 consisted primarily of VAT reimbursements still owing to various companies. set up for Pinguin NV.586K).691K).162 31. the Group's deferred tax asset fell by € 210K.509K (30 June 2006: EUR 26.635 -84 -2.472 30/06/2006 24.341K (30 June 2006: EUR 1.4. totalling EUR 1.Recording of an additional € 350K deferred tax liability at Pinguin Aquitaine calculated on the depreciation differences relating to the fixed assets and related subsidies. At 30 June 2007 there was a pledge on the company’s business assets in an amount of EUR 28. The following table sets out the deductible elements in respect of which no deferred taxes have been recognised.183 0 0 -2.541 There is no time limit on the above-mentioned unrecognised tax assets.183 6. The mandate on the company’s business assets was released during the 2006/2007 financial year (30 June 2006: EUR 4. 7.

18. maintenance contracts.166. the extraordinary general meeting of Pinguin NV first decided in application of Article 614 of the Company Code to reduce the share capital of the company by an amount of EUR 8. issued after lifting the right of pre-emption by application of Articles 596 and 598 of the Company Code by a decision of the extraordinary general meeting of Pinguin NV on 25 November 2005.213. Cash and cash equivalents 30/06/2007 0 6. rental costs. 7. a French company (96. The costs relating to the capital increases (€ 30K) were deducted from capital as at 30 June 2006 in accordance with IAS 32. after lifting the right of pre-emption by application of Articles 596 and 598 of the Company Code by a decision of the Board of Directors of Pinguin NV on 4 October 2006.832 new Pinguin shares.884 shares) and the Stichting Administratiekantoor Pinguin (1. Deferred charges and accrued income 30/06/2007 975 30/06/2006 1. On 10 May 2006 there followed a second private placement of 297. Subscribed capital Financial year 1 July 2006 – 30 June 2007 On 26 October 2006. This capital increase was subscribed by KBC Private Equity (134. 205 . This was followed on the same day by a first private placement of 692.24. The Board of Directors may.994.4.589 shares) Lur Berri (201. All these shares were subscribed by Stichting Administratiekantoor Pinguin. issued after lifting of the right of pre-emption by application of Articles 596 and 598 of the Company Code by decision of the Board of Directors of Pinguin NV on 10 May 2006 within the framework of the authorised capital. a French company (201. These new shares were subscribed by Société Coopérative Agricole à Capital Variable Lur Berri.345.662 shares).7.000. increase the subscribed capital in one or more instalments up to a maximum amount of € 20. The costs relating to the capital increase (€ 20K) were deducted from capital as at 30 June 2007 in accordance with IAS 32.963 1.4.570 7.499. prepayments of IT costs and cliché costs for packaging.046 Deferred charges and accrued income (in thousands of €) TOTAL Deferred charges relate in particular to insurance premiums. Financial year 1 July 2005 – 30 June 2006 On 25 November 2005.895 shares).570 0 Cash and cash equivalents (in thousands of €) Short term financial assets Cash Other Total 6.000.17. during a five-year period from the publication of the deed of amendment to the Articles of Association of 14 November 2005.10 for past losses.19.520 new Pinguin shares. the extraordinary general meeting of Pinguin NV decided to increase the share capital by € 12.4.170 shares) and by Société Par Actions Simplifiée Primco.963 0 30/06/2006 0 1.

468 7. These treasury shares were reported in MAC’s financial statements at a value of € 2K. were sold on Euronext on 28/03/2006 at a price of EUR 7.468 17. It held none of its own shares at that date.4.468 4.Evolution of subscribed capital (in thousands of €) BALANCE AT THE END OF THE PRECEDING PERIOD Capital increase of 8 October 2004 Capital decrease of 25 November 2005 Capital increase of 25 November 2005 Capital increase of 10 May 2006 Costs related to capital increases (IAS 32) Capital increase of 26 October 2006 Costs related to capital increases (IAS 32) BALANCE AT THE END OF THE PERIOD Ordinary shares.993.000 2.368 6. issued and fully paid (number) BALANCE AT THE END OF THE PRECEDING PERIOD Capital increase of 8 October 2004 Capital increase of 25 November 2005 Capital increase of 10 May 2006 Capital increase of 26 October 2006 BALANCE AT THE END OF THE PERIOD Authorised capital (in thousands of €) BALANCE AT THE END OF THE PRECEDING PERIOD Capital increase of 10 May 2006 Capital increase of 26 October 2006 BALANCE AT THE END OF THE PERIOD 30/06/2007 35.500 -21 48.750 30/06/2006 4.520 297.003.717 1.532 -30 12. There were no more treasury shares held by Pinguin NV or its subsidiaries at the end of the 2005/2006 financial year.365 0 692.461 0 -8. Financial year 1 July 2005 – 30 June 2006 The remaining 334 treasury shares of Pinguin NV held by M.085 30/06/2007 17.20.676. Own shares Financial year 1 July 2006 – 30 June 2007 The company did not trade any of its own shares in the financial year ending on 30 June 2007. SARL. the Group’s French sales office.750 30/06/2006 36.532 17.229 35.A. Changes in treasury shares (number) BALANCE AT THE END OF THE PRECEDING PERIOD Purchased during the year Sold during the year BALANCE AT THE END OF THE PERIOD 30/06/2007 0 0 0 0 30/06/2006 334 0 -334 0 206 .213 5.C.993.832 30/06/2007 4.682.717 30/06/2006 20.000 -2.06 per share.

leaving just 40. The directors propose that no dividends be declared in respect of the current year.4.054. 441. Warrants can be exercised twice a year. The exercise price is € 12. Warrants can be separated from the bonds at any time and are freely negotiable. 7. managers or members of the Management Committee.007 Like last year Pinguin has a 52% shareholding in Pinguin Aquitaine. Dividends No dividends were declared during the past two years.356 with an outside investor. For the recording of the non-equity element please see note 7.893 40. in whole or in part. concluding that from 1 July 2005 the warrants represented a component of equity with an initial value of zero. Stock option and warrant plans Option plans There are currently no option plans outstanding for members of the Management Committee or senior management.27. On 28 October 2004 Pinguin Invest NV bought back 363.Interest-bearing liabilities. and the second on any working day during the two weeks following the announcement of the half-yearly results.21. split or public bid on the company.357 12. 48% of this result has therefore been recorded under minority interests. Warrants Issue Offering Date Number Exercise price (in €) Issue Buy back – annulment 30/12/2002 28/10/2004 441. along with those already in the possession of the Dejonghe family (38. were cancelled.356 Currently there are no new stock option or warrant plans for employees. the first time on any working day during the two weeks following the annual general meeting. the Group applied the exemption provisions of IAS 32 – IAS 39. As a ‘first time adopter’.22.26 .39.4.23. This subsidiary reported a net profit of € 67K for the year ending on 30 June 2007.340 warrants).4. Warrants may also be exercised at the date of any merger.039 354 0 653 0 0 0 1. Warrants expire no later than the fifth anniversary of the issue date.39 Outstanding at the end of the period 441.893 401. Each warrant entitles its holder to subscribe to one new share.007 0 32 0 0 0 1. No warrants have been exercised until now.39 12. 7. Minority interests 30/06/2007 30/06/2006 Minority interests (in thousands of €) BALANCE AT THE END OF THE PRECEDING PERIOD Decrease / increase in ownership Share of net profit of subsidiaries Dividend pay-out Capital increases Translation differences BALANCE AT THE END OF THE PERIOD 1.4. Warrant plans On 30 December 2002.197 warrants from FPE (Fortis Private Equity Expansion NV) (formerly ISEP) in the context of an agreement for the pre-payment of the subordinated bond loan. 207 .475.493 warrants were created in relation to the issue of a 6-year subordinated bond loan of € 5. These warrants.7. and on any working day during the two weeks prior to the fifth anniversary of the issue date.

26. Pension obligations Defined contribution plans The Pinguin group’s pension plans provide for the payment of clearly determined amounts to pension institutions.4. 7.223 3. Defined benefit plans There are no defined benefit plans within the Pinguin Group. Since 1 January 2004 Belgian legislation has required a minimum return to be guaranteed on contributions paid into a defined contribution plan.159 3.4. the pension cost is the same as the employer contributions.24.Finance leases . It covers the financial debts (both an overview of the long-term liabilities and those maturing with the period). The provision for “pensions and similar rights” relates to an agreed early retirement pension settlement amounting to € 12K at 30 June 2007 (30 June 2006: € 17K). Interest-bearing liabilities This note provides information on the contractual conditions governing the Group’s interest-bearing liabilities. 7.Subordinated bond loan . Given that this minimum return is guaranteed essentially by the insurance institution.435 829 3.7.4. The other provisions of € 57K (30 June 2006: € 287K) relate this year primarily to soil decontamination.25.Credit institutions Due within 1 Due between 1 year and 5 years Due after 5 years Total 8.014 131 64 67 8. Provisions Provisions (in thousands of €) Provisions for pensions and similar rights Provisions for other liabilities and charges Total BALANCE AT THE BEGINNING OF THE PRECEDING PERIOD Additional provisions Reversal of unutilised provisions Amounts utilised during the year Changes due to the passage of time and change in the discount rate applied BALANCE AT THE END OF THE PRECEDING PERIOD 21 0 0 -4 0 17 440 24 -2 -134 461 24 -2 -138 0 345 0 328 BALANCE AT THE END OF THE PRECEDING PERIOD Additional provisions Reversal of unutilised provisions Amounts utilised during the year Changes due to the passage of time and change in the discount rate applied BALANCE AT THE END OF THE PERIOD 17 0 0 -5 0 12 328 0 -12 -259 0 57 345 0 -12 -264 0 0 69 Provisions at 30 June 2007 are down € 276K compared to 30 June 2006.304 829 3. 30 June 2007 (in thousands of €) Interest-bearing liabilities > 1 year .081 208 . These employer’s contributions are charged against income in the year to which they relate.

531 Subordinated bond loan On 30 December 2002.864 600 34.260 34. The bond has a term of 6 years and carries a coupon of 8%.021 79 25. 209 .190 2. The € 2.Credit institutions .304 131 40.936 8..539 1. as this item fluctuates as a function of inventory levels. 441.054.Other .974 The interest-bearing liabilities can be broken down as follows: Interest-bearing liabilities (in thousands of €) TOTAL Fixed 15.974 Due after 5 years Total 30 June 2006 (in thousands of €) Interest-bearing liabilities > 1 year .Credit institutions . please see note 7.Subordinated bond loan .356 of these warrants were cancelled in October 2004.Finance leases .913 3.067K reduction in the subordinated bond loan can be explained entirely by the normal contractual repayments.Credit institutions . No accelerated repayments have been made.Other Interest-bearing liabilities < 1 year .260 3.570 4.595 2.835 4.590 1.936 2.539 1.864 600 34.539 1.27. 401.974 Interest-bearing liabilities (in thousands of €) TOTAL Secured 38.913 3.Subordinated bond loan .021 79 25.Other Interest-bearing liabilities < 1 year .190 2.893 warrants were created in connection with the issue of a subordinated bond loan in an amount of EUR 5.330 265 265 12.53%.3. After the first recognition in the financial statements.Short term liabilities (credit institutions) Total 32.176 50 27.Other .302 1.Subordinated bond loan .296 4.590 1.260 3.302 32. For a further discussion of the warrants.252 Non-secured 2.296 4. the bond loan is recorded at amortised cost using the effective interest method.608 Total 40.936 12. receivables via a borrowing base and the company’s cash situation.4.Short term liabilities (credit institutions) Total Due within 1 Due between 1 year and 5 years 12.260 265 47.722 Total 40.Finance leases .176 50 27.Option and Warrant Plans.936 2.Finance leases . The effective interest rate at 30 June 2007 was 12.474.936 32.366 Variable 25. The fall in short term liabilities to lending institutions is a reflects a temporary situation.330 2.13 . Interest is payable annually in arrears.

Trade and other payables (short-term) 30/06/2007 30/06/2006 Trade and other payables (in thousands of €) Trade payables Tax payable Remuneration and social security payable Other amounts payable Total 33..68%) Total outstanding debts at PUK amounted at 30 June 2007 to € 1.570 265 7.879 681 2.705 714 2.898 Present value minimum lease payments 30/06/2007 1. in accordance with the capital repayment schedule.136 30/06/2006 2.415K (30 June 2006: £ 2. At 30 June 2007 new revolving credits were drawn in an amount of € 2.913 3.30 for further information on banking covenants and rights and commitments not included in the balance sheet.286 67 5. The average repayment term at Pinguin Aquitaine is 4. In the past financial year a new finance lease agreement was concluded at Pinguin Aquitaine for plant and equipment in an amount of € 281K.650K). The remaining amount is the outstanding debt on the asset deal with Padley Vegetables Ltd. the short-term credit lines were fully drawn down. The average effective interest rate at 30 June 2007 was 4.552K (30 June 2006: € 3. The average interest rate at 30 June 2007 for the outstanding loans from financial institutions was 5.720 26.470 30/06/2006 2.23 years. The average effective interest rate at 30 June 2007 was 5.28 % (30 June 2006: 5.806 354 37.321K (30 June 2006: € 3.4.159 64 5.Finance leases Finance leases (in thousands of €) Within 1 year Between 1 and 5 years After 5 years Total Minimum lease payments 30/06/2007 2.04%). Please see note 7. All interest-bearing liabilities are concluded at market conditions.783K at 30 June 2007. Other loans The other long-term loans consist of a loan from the Agence d'eau.73 years. Lending institutions The long-term interest-bearing bank debts were down by € 1. Total outstanding debts at Pinguin Aquitaine amounted at 30 June 2007 to € 3.902 335 7.4.84 % (30 June 2006: 4.391 210 .86 %). At Pinguin foods UK a new financial lease was concluded for plant in an amount of £ 186K. standing at € 387K as at 30 June 2007 (30 June 2006: € 600K) to Pinguin Aquitaine.117 3.211K). 7. Total interest-bearing liabilities in pounds sterling amounted at 30 June 2007 to £ 4.19% (30 June 2006: 5.661 4. All interest-bearing liabilities are expressed in Euros or pounds sterling. The average repayment term at Pinguin UK (PUK) is 1.260 4.27. At both 30 June 2007 and 30 June 2006.095 The largest interest-bearing liabilities are the finance lease agreements for components of the sweet-corn and carrot line in Aquitaine and plant and equipment at Pinguin UK.698 274 30.200K). Availability under these credit lines is seasonally adjusted.200K. The Group’s short-term interest-bearing liabilities were drawn down mainly in the form of fixed-term advances at fixed margins over floating Euribor rates.

Management found this claim unjust. Accrued charges and deferred income 30/06/2007 89 30/06/2006 283 Accrued charges and deferred income (in thousands of €) TOTAL The accrued charges and deferred income item consists essentially of accrued interest and charges. the parties decided to appeal. No provision has been set up. 211 . Believing the complaint to be unjustified. No judgement is expected in 2007.115K. including € 500K of mailing costs. In appeal the Group was sentenced to pay damages. DISPUTE OVER THE TERMINATION OF EXCLUSIVE DISTRIBUTION CONTRACT Court proceedings are under way with the party that acquired a previous subsidiary in connection with the termination of an exclusive distribution agreement for fruit and vegetable cutting machinery. This company is claiming damages of around USD16 million for the termination of a distribution agreement between Maxwell Chase Technologies and Techno-food NV. These specifications were neither confirmed nor approved by the Group. Following complaints. The two parties reached an out-of-court settlement in 2007. in which all four parties were found liable. LAWSUIT WITH MAXWELL TECHNOLOGIES Various Group companies have been summonsed by the Kortrijk Business Court at the request of the U. short-term trade and other payables are up € 7. In the event that Pinguin Aquitaine were to be found fully liable. The liability of the various parties has not yet been finally determined in court.28.4.329K. No judgement is expected in 2007. DISPUTE OVER NOISE NUISANCE Proceedings were instigated against the Langemark plant by a neighbour for noise nuisance. Given that the Board of Directors considers it very likely that the damages will be divided between four parties. At 30 June 2007 the trade debts to the former owners amounted to € 5. Based on the evidence available to it at the moment. This significant increase is almost entirely attributable to the rise in trade payables (€ 7. Pinguin was held responsible. After a judgement in the district court in 2007. The provision amounted at 30 June 2006 to € 218K and covered the maximum risk. in turn ascribable mainly to the inventory taken over from the former Padley Vegetables under the asset deal. With this the dispute was definitively terminated. including delayed payment interest. 7. Blédina launched a recall programme at the end of 2003. With this the dispute was definitively terminated. If it is decided that liability is shared by the parties involved. the maximum cost becomes € 40K. company Maxwell Chase Technologies LLC. The claimed damage was set by a team of experts at a total amount of € 683K. the Group took the matter to the Belgian Supreme Court.174K).S. its subsidiary Pinguin Aquitaine SARL and the farmer.4. The facts mentioned above post-date the sale of Techno-Food by the Group. Pending Obligations Pending lawsuits at 30 June 2007 BLEDINA DISPUTE The Group has a major pending dispute with its customer Blédina concerning the delivery of goods which purportedly failed to meet the customer’s product specifications. The compensation demanded was € 45K. Pinguin NV. The total cost of € 20K was booked and paid in the current financial year. it believes that no provision needs to be set up. the maximum damages would amount to € 380K. € 4K for the removal of the products and € 200K for the destruction of Bledichef. Techno-Food is the former subsidiary of VDI (later renamed Pinguin Salads). Final judgement was handed down by the Supreme Court in 2007.29. Compensation of € 229k was paid in 2007. management deems it very unlikely that the Group will be condemned to pay compensation to Maxwell Chase Technologies. The parties to the dispute are Blédina. 7. which was sold by the Group in 2002.In total. and the matter is currently pending in district court.

Off-balance-sheet commitments Off-balance-sheet commitments Guarantees (in thousands of €) Mandate on general assets 0 4. The liquidation balance should suffice to pay off the remaining debts. Operating leases The Group has concluded rental and lease contracts.472K.586 30/06/2007 30/06/2006 212 . The French subsidiary was liquidated in 2005. the portion of own funds in the payment of future investments and minimum account turnover.4. At 30 June 2007 contracts totalling € 21. by the French bank NCME in an amount of € 480K.A.30. As at 30 June 2007 Pinguin met all the different covenants of its various credit providers. Bank covenants A number of credit agreements with the group's major creditors contain various covenants covering solvency ratios (25% to 30%). Euragra guarantee Pinguin has.152K had been concluded for the procurement of fresh vegetables (30 June 2006: € 19 million). These relate to the building and equipping of a new packaging hall.354 The Group is working on the assumption that these contracts will be renewed or replaced at term. guaranteed a credit line made available to its French subsidiary Euragra S. together with the other shareholder SILL SA. the acquisition of optical sorters and the building of a fully automated buffer warehouse in Westrozebeke. and the extension of the convenience foods department in Langemark.259 0 2. Option The Group has an option to acquire the land and buildings of the former Padley Vegetables (now integrated into Pinguin Foods UK) for £ 6 million.490 Due within 1 year Between 1 and 5 years 2.824 Due after 5 years 0 Total 4. minimum EBITDA (€ 10. This amount is subject to fluctuation as a function of climate conditions and market prices for fresh vegetables. Bank guarantees There is a bank guarantee outstanding in an amount of € 163K until 2013 in favour of OVAM (Flemish Public Waste Company) to guarantee the decontamination of polluted soil. the amount of consolidated equity (€ 40 million).5 million). 30/06/2007 (in thousands of €) Due within 1 year Between 1 and 5 years Due after 5 years Total Rent and operating leases 30/06/2006 (in thousands of €) 1. Commitments Commitments concerning investments in tangible fixed assets As at 30 June 2007 the Group had commitments to acquire assets in an amount of € 9. and a bank guarantee of € 149K in favour of the Roeselare Customs and Excise office. mainly for buildings and transport vehicles. Procurement of fresh vegetables Pinguin has concluded sowing and purchase contracts with a number of farmers for the procurement of fresh vegetables harvested during the 2007/2008 financial year.314 Rent and operating leases 1.095 1.7.

with Mr. nor in associated enterprises which could therefore be classified as related parties. The Group does have a participating interest in Tomates d’Aquitaine and a few shares in Starbrand Spolka.188 51.010 7. CEO remuneration CEO remuneration 30/06/2007 (in thousands of €) Fixed remuneration Variable remuneration Other contractual Total NV Vijverbos 175 83 30 288 213 . The Group has no participating interests in joint ventures. Jan Dejonghe as its permanent representative was replaced as Chief Financial Officer (CFO) by BVBA The New Mile with Mr.876 26.509 487 8.030 487 11. Gemin Management Deprez BVBA Total 50 0 0 0 0 0 0 15 0 0 65 0 0 0 0 13 14 0 9 0 10 46 50 0 0 0 13 14 0 24 0 10 0 111 Fixed remuneration Variable remuneration Total There are no directors’ pension plans.4. as there have been no further transactions beyond the acquisition of the interest.692 14.Registered lien on general assets Mortgage mandate Registered mortgage Joint guarantee Total 28. have been eliminated in the consolidation and are therefore not included in this note. which are related parties. but are not included in this note. These fall under the IAS 24 definition of related parties. Directors’ remuneration Directors’ remuneration 30/06/2007 (in thousands of €) The Marble BVBA Vijverbos NV Kofa BVBA Nigel Terry Patrick Moermans Fortis private Equity NV Jo Breesch MOST BVBA O.31.488 50. termination benefits or benefits in shares paid out to the directors during the financial year. Steven D’haene as its permanent representative. On 10 April 2006 Demafin BVBA.419 7. Related parties Transactions between the company and its subsidiaries. nor were long-term remuneration.

The other benefits consist mainly of reimbursement of expenses incurred by Group directors on behalf of Pinguin group: business expenses.Basic remuneration . The shareholders in Pinguin Invest NV are the cousins Herwig Dejonghe and Koen Dejonghe.Other benefits Total 1 129 49 0 0 0 14 192 1 448 0 0 0 0 78 526 30/06/2007 30/06/2006 Executive management – Group Executive management – Group (in thousands of €) Number of persons at year-end . There are no other shareholders. to the shareholder agreements with Sill. 214 . As a shareholder in Pinguin NV. along with the STAK (Stichting Administratiekantoor). Nigel Terry was an executive director until 8 June 2006. Interest is paid/charged at market rates on the current account that Pinguin Invest NV holds with Pinguin NV.Variable remuneration .Termination benefits . Each owns 50% of the shares. their services are invoiced to Pinguin NV. Volystar and Lur Berri.Unpaid debt .Basic remuneration . It is also an involved party in the framework agreement between KBC Private Equity and STAK. BVBA The New Mile has been part of the group executive management since 10 April 2006.Executive directors (excluding CEO) Executive directors (excluding CEO) (in thousands of €) Number of persons at year-end . Pinguin Invest is a party.Unpaid debt .Remunerationas director of subsidiaries . As Group executives operate on a self-employed basis. The above-mentioned amounts are therefore ex-VAT.Remunerations director of subsidiaries . Peca Management has been part of the group executive management since 1 January 2005.Termination benefits .Variable remuneration . rental costs passed on to the Group and interest.Other benefits Total 2 290 110 0 0 0 41 441 2 185 50 0 0 0 19 254 30/06/2007 30/06/2006 BVBA Demafin was an executive director until 31 May 2006. Pinguin Invest NV Pinguin Invest NV is a family company that has been left outside the consolidation scope as it has no operating connection with Pinguin NV.

on September 10. interest rate and credit risks in exercising its business activity. after consultation with personnel.Related parties (in thousands of €) Transactions and outstanding balances with related parties Pinguin Invest NV .03 ( 44. in particular option contracts and interest rate swaps concluded with first-class banks. Risk Management Policy Financial risk factors The Group is exposed to currency. Event after the balance sheet date Lutosa On 26 June 2007 Pinguin NV reached an agreement with the Van den Broeke family to purchase all the shares of the Lutosa Group. assignments in an amount of € 145K were undertaken by the statutory auditor and persons working under co-operative arrangements with him.04 million ( 0. This division processes packages and stores deepfrozen vegetables at facilities at Bourne. production. The Lutosa Group’s net book value under IFRS amounted to € 67 million at 30 June 2007. The derivatives used consist primarily of “over-the-counter” financial instruments. 2007.Outstanding receivables . Derivatives are used to reduce the risk attached to exchange rate fluctuations. The net result under IFRS for the 2006 calendar year was € 4. The Group audit fees for the financial year ending at 30 June 2007 amounted to € 109K. Hedge accounting under the strict application conditions of the IFRS is not applied at this moment.2 million for the first six months of 2007. tax and legal advice (€ 59K) and other further insurance-related assignments (€ 81K).Outstanding payables 30/06/2007 30/06/2006 566 236 556 221 7. R&D and its extensive commercial network will strengthen Pinguin’s own organisation. extending its product range with deep-frozen potato products.7 million.34. The combination provides critical mass for ensuring a constant. 215 .33. Additional tasks regarding tax and legal advisory have been submitted for approval to the audit committee.6 million) of revenue (UK GAAP) and an operating result of € 1. Not being listed on an active market. The closing of the takeover has been realised. The IFRS figures given differ from Lutosa's published accounts with the restatement of tangible fixed assets and inventories to IFRS. It is Group policy not to undertake speculative transactions. Salvesen On 17 August 2007 Pinguin reached agreement with Salvesen Logistics Ltd to acquire Christian Salvesen's Food division for a total of € 26. these derivatives are valued on the basis of a valuation model. This acquisition represents a major step forward for Pinguin. The audit committee of Pinguin has decided positively to this extension. 7. In the year ended on 31 March 2007.4. technology. The takeover closing is expected within 3 months. These figures are as yet unaudited.4. Management expects to be able to make substantial savings both in the production and transport and logistics departments. high quality supply of peas and improved capacity usage by no longer focusing solely on peas. Non-audit tasks undertaken by the statutory auditor + related parties During the financial year from 1 July 2006 to 30 June 2007.32. and do not include the effects of the restatement of tangible fixed assets at fair value.4.Sales of goods . North Thoresby and Easton in Lincolnshire.7 million and € 12. Lutosa’s strengths in agro. Pinguin NV is paying € 175 million for the shares of the Lutosa Group.7 million).Purchase of goods . this department reported € 66. 7. These assignments consisted essentially of further legal control of assignments (€ 5K). These figures are not yet audited or adjusted to IFRS valuation rules.

The Group is exposed to exchange risks due to the fact that a considerable portion of its activities (buying and selling) is undertaken outside the Eurozone. The expiry date of the current loan contracts matches the date of the next interest-rate revision. The financial derivatives were initially recognised at fair value.5 million). The derivatives are intended to hedge the Group’s exposure to currency risks in GBP. The total fair value (marked to market value) amounted at 30 June 2007 to € 86K (30 June 2006: € 69K). All longterm loans carry fixed interest rates. To limit the cost of these instruments. These contracts. In its first-time application of IAS 39 the Group classified the financial instruments used to cover its interest rate risk as economic hedges that do not fulfil the requirements for hedge accounting. Fair value Fair value by type of Per type of financial instrument (in thousands of €) Financial instruments Option contracts IRS + interest-rate caps 0 86 12 69 0 0 -2 0 0 86 10 69 30/06/2007 30/06/2006 30/06/2007 30/06/2006 30/06/2007 30/06/2006 Assets Liabilities Net Position Net assets/ liabilities 86 81 0 -2 86 79 216 . These represented a nominal amount of € 13. were not classified as cash flow hedges. mainly in pounds sterling. In the area of interest rate risk. The longest coverage term of these instruments runs to October 2008. By maturity this gives: . .Maturing within one year: € 12 million. resulting from the effect of the interest rate difference. Interest rate risk The group has used financial instruments to cover risks relating to unfavourable interest rate fluctuations. with subsequent changes in fair value recognised in the income statement. At 30 June 2007 the Group had no open contracts. At 30 June 2006 the group had a number of option contracts outstanding to limit its exposure to the pound sterling.5 million). All hedging instruments used during the financial year ending on 30 June 2007 matured within the financial year.Maturing after 1 year but within 5 years: € 3 million. The use of variable interest rate credits carries with it the risk of is major changes in cash flows. a number of Floor contracts with Knock-Ins have been concluded simultaneously. The total fair value (marked to market value) amounted at 30 June 2006 to € 10K. Short-term loans have floating interest rates. and aims to hedge 75% of its monthly GBP income. Pinguin is covered as at 30 June 2007 via various instruments in a notional amount of € 15 million (30 June 2006: € 18. To achieve this. in an amount of £ 600K. To limit the cost of these instruments. The Group works with futures contracts. The Group wishes to keep its net interest cost as low as possible and does not want to be confronted with uncontrollable fluctuations in interest rates. These instruments were therefore valued at fair value with changes in fair value.5 million at 30 June 2007 (June 30 2006: € 15. recognised in the income statement. a number of Floor contracts with Knock-Ins have been concluded simultaneously.Foreign exchange risk The foreign exchange risk relates to possible variations in the value of financial instruments as a result of exchange rate fluctuations. a number of IRS (Interest Rate Swaps) and interest rate caps with Knock-Outs have been concluded with major Belgian banks.

Any customer whose credit exceeds a specified amount is subjected to a credit check. Management has developed a credit policy. To protect itself against customer defaults and bankruptcies. the Group uses the services of an international credit insurance company. and credit risk exposure is continuously monitored. At the balance sheet date there were no significant concentrations of credit risk.Credit risk The Group has a diversified customer portfolio. 217 . and also applies internal customer credit limits.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. This responsibility includes among other things: designing.5. taken as a whole. the reasonableness of accounting estimates made by the company and the presentation of the consolidated financial statements. we have performed procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.1. prepared in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. in accordance with International Financial Reporting Standards as adopted by the EU and with the legal and regulatory requirements applicable in Belgium. Our responsibility is to include in our report the following additional comment which does not change the scope of our audit opinion on the consolidated financial statements: 218 . Additional comment The preparation and the assessment of the information that should be included in the directors’ report on the consolidated financial statements are the responsibility of the board of directors. We believe that the audit evidence we have obtained. as issued by the “Institut des Reviseurs d’Entreprises/Instituut der Bedrijfsrevisoren”. whether due to fraud or error. whether due to fraud or error. 2007 Statutory auditor’s report on the consolidated statements for the year ending 30 June PINGUIN NV STATUTORY AUDITOR’S REPORT TO THE SHAREHOLDERS’ MEETING ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 To the shareholders As required by law and the company’s articles of association. the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended. as well as the summary of significant accounting policies and other explanatory notes.868 (000) EUR. The consolidated balance sheet shows total assets of 133. the consolidated financial statements give a true and fair view of the group’s financial position as of 30 June 2007. The board of directors of the company is responsible for the preparation of the consolidated financial statements. Those consolidated financial statements comprise the consolidated balance sheet as at 30 June 2007. and of its results and its cash flows for the year then ended.7. the consolidated income statement. In making those risk assessments. The procedures selected depend on our judgment.5. implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement. we have considered internal control relevant to the group’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control. We have assessed the basis of the accounting policies used. We conducted our audit in accordance with legal requirements and auditing standards applicable in Belgium. STATUTORY AUDITOR’S REPORT 7. selecting and applying appropriate accounting policies. provides a reasonable basis for our opinion. In our opinion. This report includes our opinion on the consolidated financial statements together with the required additional comment. Finally. including the assessment of the risks of material misstatement of the consolidated financial statements.090 (000) EUR and a consolidated profit (group share) for the year then ended of 6. the board of directors and responsible officers of the company have replied to all our requests for explanations and information. Unqualified audit opinion on the consolidated financial statements We have audited the accompanying consolidated financial statements of PINGUIN NV (“the company”) and its subsidiaries (jointly “the group”). In accordance with these standards. and making accounting estimates that are reasonable in the circumstances. we are pleased to report to you on the audit assignment which you have entrusted to us. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

We have assessed the basis of the accounting methods used. We have also performed those specific additional audit procedures required by the Companies Code. We have audited the accompanying consolidated financial statements of PINGUIN NV (“the company”) and its subsidiaries (jointly “the group”). The Board of Directors of the company is responsible for the preparation of the consolidated financial statements and the directors’ report on the consolidated financial statements. Unqualified audit opinion on the consolidated financial statements with emphasis of matter paragraph The aforementioned auditing standards require that we plan and perform our audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.v. We can.f. In accordance with these standards. The consolidated balance sheet shows total assets of 112. the consolidation policies and significant estimates made by management as well as evaluating the presentation of the consolidated financial statements taken as a whole. Our audit of the consolidated financial statements was conducted in accordance with legal requirements and auditing standards applicable in Belgium. the consolidated income statement. we considered the group's administrative and accounting organization as well as its internal control processes. on a test basis. SCRL Represented by Mario Dekeyser • 7. Statutory auditor’s report on the consolidated financial statements for the year ended 30 June 2006 PINGUIN NV STATUTORY AUDITOR’S REPORT TO THE SHAREHOLDERS’ MEETING ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 To the shareholders As required by law and the company’s articles of association. for the assessment of the information that should be included in the directors’ report on the consolidated financial statements.e. prepared in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium.2.158 (000) EUR and a consolidated loss (group share) for the year then ended of 3. Kortrijk. as well as the summary of significant accounting policies and other explanatory notes. CVBA / SC s. the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended. future evolution.The directors’ report on the consolidated financial statements includes the information required by law and is in agreement with the consolidated financial statements. we are pleased to report to you on the audit assignment which you have entrusted to us. as issued by the “Institut des Reviseurs d’Entreprises/Instituut der Bedrijfsrevisoren”. nevertheless. or on the status. We have obtained the explanations and information required for our audit.5. the evidence supporting the amounts in the consolidated financial statements.546 (000) EUR. 31 August 2007 The statutory auditor DELOITTE Bedrijfsrevisoren / Reviseurs d’Entreprises BV o.d. and for the company’s compliance with the requirements of the Companies Code and the articles of association. However. confirm that the information given is not in obvious contradiction with any information obtained in the context of our appointment. we are unable to express an opinion on the description of the principal risks and uncertainties confronting the group. We have examined.v. Those consolidated financial statements comprise the consolidated balance sheet as at 30 June 2006. 219 . or significant influence of certain factors on its future development. We believe that our audit provides a reasonable basis for our opinion.

In our opinion. “IFRS 1 – First-time Adoption of international Financial Reporting Standards” has been applied. 2006. 2006 are the first consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRSs) issued by International Accounting Standards Board (IASB). 2006 relate to the accounting year starting July 1.3. 2005.v. We can. 2004 and ending June 30.5. The impact of the transition of the IFRSs on the group’s financial position and of its results is explained in point 7.5 mio EUR. future evolution.3. However. confirm that the information given is not in obvious contradiction with any information obtained in the context of our appointment. 2006. 2005 and ending June 30. For the preparation of these financial statements. the consolidated financial statements give a true and fair view of the group’s financial position as of 30 June 2006. was recorded. we refer to the directors’ report wherein the Board of Directors has justified the application of the valuation rules under the assumption of going concern with an explication of the investment programme and a commentary on the planned capital increase of 12.11.f. SCRL Represented by Mario Dekeyser 7. 220 . we are unable to express an opinion on the description of the principle risks and uncertainties confronting the group. This is different from the statutory accounting year that covers the period starting January 1. 17 October 2006 The Statutory Auditor DELOITTE Bedrijfsrevisoren / Reviseurs d’Entreprises BV o. 2005 the Consolidated Financial Statements were prepared in accordance with the Belgian accounting standards. the opening balance sheet has been set at July 1. The comparative figures that are included in these financial statements relate to a period of 12 months starting July 1. 2005 The consolidated financial statements of the Pinguin group per June 30. information related to the impact of the IFRSs on the group’s financial position and of its results as represented in point 7.e.d. 2005. and of its results and its cash flows for the year then ended. or significant influence of certain factors on its future development. In the notes to the financial statements per June 30. For the first application of International reporting Standards for the preparation of the consolidated financial statements per June 30. Explanatory note of the auditor with respect to the comparative figures per June 30. Additional attestations We supplement our report with the following attestations which do not modify our audit opinion on the consolidated financial statements: • The directors’ report on the consolidated financial statements includes the information required by law and is in agreement with the consolidated financial statements. Without modifying our unqualified opinion. 2004. Also. in accordance with International Financial Reporting Standards as adopted by the EU and with the legal and regulatory requirements applicable in Belgium. This assumption is only valid to the extent the group will be able on the one hand to benefit from the continued financial support from its shareholders or from other ways of funding and on the other hand to improve profitability. nevertheless. expressed in the preceding paragraph.v. which have influenced the financial situation of the group. the financial statements included the comparative figures of a twelve month period per June 30. 2005.11. This implies that the financial statements per June 30. Until June 30. These accounting standards differ from the IFRS-standards in certain areas. and with the interpretations issued by the International Reporting interpretations Committee (IFRIC) as adopted by the European Union. 2004 and ending June 30. the consolidated financial statements have been prepared assuming that the company will continue as a going concern. Notwithstanding the significant losses. thus covering a period of 18 months. or on the status.3. 2006. CVBA / SC s.

2005 in accordance with Belgian GAAP and balance sheet total of 113. 2006 prepared in accordance with International Financial Reporting Standards. the opinion covers the comparative figures unless the auditor clearly indicates the contrary.4.5. This auditor’s opinion does not include a paragraph which states that this opinion does not cover the comparative figures and thus includes consequentially an opinion on the comparative figures for the twelve month period ending June 30. when the consolidated financial statements contains figures related to the prior accounting year. The explanatory note relates to the justification of the Board of Directors with respect to the application of the valuation rules in the assumption that the company will continue as a going concern. 221 .2. of the General Accepted Auditing Standards states clearly that. The emphasis of matter paragraph relates to the justification of the Board of Directors with respect to the application of the valuation rules in the assumption that the company will continue as a going concern. which is included in section 7. an unqualified audit opinion with emphasis of matter paragraph was delivered.063 (000) EUR and a consolidated loss of 12. Paragraph 3. 2005 in accordance with IFRS. an audit opinion has been issued.4.172 (000) EUR is an unqualified opinion with explanatory note.With respect to the consolidated financial statements per June 30. 2006 prepared in accordance with International Financial Reporting Standards (IFRSs). The auditor’s report on the consolidated financial statements on the statutory accounting period of 18 months ending June 30. On the consolidated financial statements per June 30.

068 -1.448 -34. showing the impact of the acquisition of the Lutosa Group. as if the Lutosa Group had been acquired on 1 January 2006.089 1.591 -22.235 -38.260 1.670 3.061 1.113 613 -34.283 6.026 -2.634 -445 -1.742 887 -86 -1. 1) Col. For a detailed overview of the structure of the Lutosa Group.198 562 -3.167 11.077 2.156 4. This change was approved by the Extraordinary General Meeting held on 4 October 2007.728 -463 -609 6.3.405 -9. These recalculations have been undertaken for the 2006 calendar year (12 months) and the first six months of the 2007 calendar year.058 -1. We show below how the recalculations by calendar year have been made. 2006 (12 mths) 149.7.548 -9. year OF PINGUIN’S AND LUTOSA’S FINANCIAL Restatement of Pinguin’s financial statements by calendar year instead of by financial The unaudited consolidated pro forma income statement of the Pinguin Group (pre-acquisition) at 31 December 2006 (12-month calendar year) and at 30 June 2007 (first six months of the 2007 calendar year).950 -609 -2.703 10.554 -503 -547 -1. write-offs and provisions Other operating income and charges Operating results (EBIT) Financial income Financial expenses Operating results after net finance costs Taxes NET RESULTS FROM CONTINUING OPERATIONS 76.624 925 880 -3.699 306 2.977 -21.848 -83.235 -48.644 -2.081 1.416 9 -3.748 -35.412 147.176 -5. Moerbos NV and Lutosa France Sarl. consumables and goods for resale Services and other goods Personnel costs Depreciation Reversal of impairment losses on assets Impairments.188 -948 -1.527 222 .119 391 -1.846 709 -2.014 887 377 -1.404 334 -1.429 14. 6 Dec 2006 Jun 2007 Col.891 -13.441 -19.183 -1.532 -2.586 2.813 -9.488 CONTINUING OPERATIONS Sales Increase/decrease in inventories Negative goodwill recognised in income statement Other operating income Raw materials. Van den Broeke-Lutosa NV and its sales offices) and the companies Vanelo NV.3 + = (Col.203 -3.586 3. Income statement Pinguin Group per 31 December 2006 and 30 June 2007 Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 All Amounts in '000 € Dec 2005 Jun 2006 2nd half 2005 (6 mths) 2nd half 2005 + 1st part. 2 = (Col. consisting of G&L Van De Broeke NV (including its subsidiaries Primeur NV.179 1.395 5. 4) Col. 4) 2nd half st nd 2 half 1 half 1st half CY 2006 2006 + 1st 2006 (6 2006 (6 2007 (6 (12 mths) half 2007 mths) mths) mths) (12 mths) 72.586 1.6.893 -10.6.497 -47. The previous two annual reporting periods of the Pinguin Group ended on 30 June 2006 and 30 June 2007.755 -1.110 -82. In anticipation of this change in reporting period and in order to be able to present a pro forma consolidated income statement.559 = (Col. of this prospectus.242 5.921 171 -1.1.953 -19.558 -5.900 72. it was necessary to recalculate the results on a calendar year basis.523 725 -3.422 -16.466 -618 848 4.847 -5. we refer to section 3.580 1.320 1.282 -966 -1.771 -14.407 74. Lutosa Express NV.186 -13. RESTATEMENT STATEMENTS 7.065 8. management intends to align the annual reporting period once again with the calendar year.813 -21.005 147. all of whose shares were acquired effective at 28 September 2007.584 -35.683 -83.115 297 5. Following the acquisition of the Lutosa Group.094 4.147 1.666 -3.

2.714 -24.508 -47.307 90 112 5 0 15.348 0 -10 -2.434 4.748 16.469 0 -98.085 -6.155 0 -98. write-offs and provisions Other operating income and charges Operating results (EBIT) Financial income Financial expenses Operating results after net finance costs 189.545 0 -1.921 0 -5.766 0 1.056 0 0 0 0 0 0 0 0 -98. consumables and goods for resale Services and other goods Personnel costs Depreciation Reversal of impairment losses on assets Impairments.041 -989 0 314 183. Recalculation of Lutosa’s financial statements based on IFRS instead of BE GAAP 7.777 0 1.766 0 1.490 -1. A limited audit of this information was undertaken by the statutory auditor.349 754 -2.886 754 -2.6. 7.679 753 -2.056 0 0 0 189.098 223 .508 -48.464 -6. Column 5 (= column 3 + column 4): The pro forma unaudited consolidated income statement of the Pinguin Group for the 2006 calendar year (12 months).536 0 120 -6.433 4.June 06). Column 6: The audited consolidated income statement of the Pinguin Group at 30 June 2007 (annual figures for July 06 – June 07).895 -25.416 7. Column 2: The audited consolidated income statement of the Pinguin Group at 30 June 2006 (annual figures for July 05 – June 06).916 -41.804 0 1.125 -408 5. Column 7 (= column 6 – column 4): The pro forma unaudited consolidated income statement for the first half of the 2007 calendar year (6 months).738 0 1.153 277 0 0 0 117 0 0 0 662 0 0 1 -1.126 0 -48 -93 -41 0 0 -5 90 0 0 0 -1 0 -3 0 0 -2 111 1 0 0 -109 -528 -21 0 0 0 5 0 0 0 1.741 16.393 3. Column 3 (= column 2 – column 1): The pro forma unaudited consolidated income statement for the first half of the 2006 calendar year (Jan 06 .515 -8.005 15.816 -25. Column 4: The unaudited consolidated income statement of the Pinguin Group at 31 December 2006 (half-year figures for July 06 – Dec 06).6.2.037 8.490 -1. A limited audit of this information was undertaken by the statutory auditor. Pro forma restated consolidated income statement of the Lutosa Group 31 December 2006 Column 1 Column 2 Column 3 G&L Lutosa Lutosa Intercompany Total IFRSTotal Consol Moerbos Express France elimination consolidation adjustment consolidation stat BE GAAP BE IFRS All Amounts in '000 € CONTINUING OPERATIONS Sales Increase/decrease in inventories Negative goodwill recognised in income statement Other operating income Raw materials.085 -12.500 -289 -8.Notes Column 1: The unaudited consolidated income statement of the Pinguin Group at 31 December 2005 (half-yearly figures for July 05 – Dec 05).1.

036 224 .499 -12.465 0 -34 -929 20.607 4.070 456 -1.513 10 111 0 -60 12.284 -5.302 -20.399 -23.990 456 -1.205 0 0 -25 47 0 -46 7 -6 0 0 0 0 334 -289 -5.500 209 -4 -7.913 -1.421 10.099 65 113 6 0 30/June2007 10.420 208 -4 -7.026 0 -4 19 0 0 0 -2 121 0 0 0 0 0 0 0 -60 0 0 127.337 -1.855 -1 0 -2.403 -4.230 0 0 -7.470 0 934 -66.163 -12.577 -977 0 131 123.399 -23.276 -335 289 2.465 0 -25 -23 0 0 0 0 0 0 0 0 0 60 -66.417 -493 0 802 71 0 0 0 122 0 0 0 0 0 0 0 -120 0 0 0 127.677 All Amounts in '000 € Column 1 Column 2 Column 3 G&L Lutosa Lutosa Intercompany Total IFRSTotal Consol Moerbos Express France elimination consolidation adjustment consolidation stat BE GAAP BE IFRS CONTINUING OPERATIONS Sales Increase/decrease in inventories Negative goodwill recognised in income statement Other operating income Raw materials.026 2.534 -12.194 -34 -924 19.817 0 -34 -4 -345 0 74 -933 19.111 19 1 0 -10 121 0 0 -10 0 0 0 0 -60 0 0 19.352 -64.098 3.403 -5.Extraordinary income Extraordinary charges Taxes NET RESULTS FROM CONTINUING OPERATIONS 280 -283 -5.380 -4.131 -271 -209 4 95 19. consumables and goods for resale Services and other goods Personnel costs Depreciation Reversal of impairment losses on assets Impairments.574 -380 12. write-offs and provisions Other operating income and charges Operating results (EBIT) Financial income Financial expenses Operating results after net finance costs Extraordinary income Extraordinary charges Taxes NET RESULTS FROM CONTINUING OPERATIONS 12.490 -493 0 802 -3.725 456 -951 19.

Short term deposits Cash and cash equivalents Deferred charges and accrued income TOTAL ASSETS All Amounts in '000 € EQUITY 225 .241 26.065 42 0 206 32 3 28 0 0 0 79.Assets under construction and advance payments . Pro forma restated consolidated balance sheet of the Lutosa Group 31/December/2006 Column 1 Column 2 Column 3 G&L Lutosa Lutosa Intercompany Total IFRSTotal Consol Moerbos Express France elimination consolidation adjustment consolidation stat BE GAAP BE IFRS 27.125 1.237 42 0 206 30 0 30 0 0 0 79.880 9.578 38.Other tangible fixed assets .594 4 0 4 13.813 8 47.225 1.Raw materials and consumables .2.Goods purchased for resale Amounts receivable .043 All Amounts in '000 € FIXED ASSETS Intangible assets Goodwill Tangible fixed assets .802 0 0 67.465 0 0 8.850 0 0 0 0 0 0 0 0 0 0 0 73 0 0 0 0 0 0 0 0 0 0 72 0 1.429 4.102 6.320 164 108.Work in progress and finished goods .568 44.320 164 155.349 0 0 27.923 68 0 0 66 0 0 66 0 0 0 2 0 2 0 0 0 194 0 0 0 0 162 111 52 0 0 0 31 1 262 0 0 0 3 3 0 0 0 0 0 -3 -3 0 0 0 0 -1.289 34.257 31/December/2006 Column 1 Column 2 Column 3 G&L Lutosa Lutosa Intercompany Total IFRSTotal Moerbos Consol Express France elimination consolidation adjustment consolidation stat BE GAAP BE IFRS 36.230 0 0 0 0 0 -1.150 8.282 19.501 44.Other receivables Financial assets .813 8 48.2.Amounts receivable Deferred tax assets Long term receivables (> 1 year) .317 16.7.678 18.282 11.Leasing and similar rights Financial fixed assets .850 1.429 0 0 38.095 29.850 0 0 1.269 67.027 106 0 0 106 0 0 106 0 0 0 0 0 0 0 0 0 404 0 0 0 0 27 27 0 0 0 0 369 7 510 1.733 9.Other receivables CURRENT ASSETS Inventories .848 156 107.6.257 0 0 0 0 -1.257 -27 -1.771 23.091 18.Available-for-sale financial assets .Land and buildings .282 11.252 6.343 18.373 0 0 29.907 2.Trade receivables .100 283 -42 0 -202 0 0 0 67.125 1.520 0 0 4 30 0 30 0 0 0 87.907 2.Derivatives .Plant.150 0 8.Furniture and vehicles .796 3.812 484 687 113 0 38.962 8 47.102 6.772 4 0 4 12. machinery and equipment .594 4 0 4 13.364 29.150 0 0 0 0 0 0 0 0 0 46.501 44.022 43.

494 203 -40 62.850 0 0 1.506 19.688 1.157 27.911 0 0 23.075 7.Bonds .048 27.407 7.322 0 2.272 0 0 0 47 67.Other tangible fixed assets 226 .919 0 0 62.901 0 29.201 109 0 0 0 0 0 0 0 0 0 109 46.905 16.583 1.983 0 0 36.927 -12 72 27 3.407 7.Plant.925 7. BE BE GAAP IFRS 23.465 0 0 0 0 0 0 0 0 17.578 0 0 3.230 0 1.391 32.407 7.082 2.184 40 36.894 27. machinery and equipment .283 261 155.283 152 108.189 0 5.012 40 106 0 0 106 0 0 106 0 1.043 All Amounts in '000 € Column 1 Column 2 Column 3 G&L Inter Lutosa Lutosa Total IFRSTotal Consol company Moerbos Express France stat elimination consolidation adjustment consol.522 0 0 3.923 0 0 0 0 0 0 0 0 0 149 0 0 0 0 12 0 4 130 3 0 262 0 0 0 0 0 0 0 0 0 -1.200 0 5.Credit institutions .883 15.Furniture and vehicles .417 3.341 -72 65.082 2.888 21.936 0 0 25.775 -12 72 27 3.Other Trade payables Advances received on contracts Tax payable Compensation and social security payable Other amounts payable Deferred charges and accrued income TOTAL LIABILITIES 1.280 152 107.438 1.Credit institutions .Subscribed capital Share premiums Consolidated reserves Cumulative translation adjustments Capital grants Minority interests NON-CURRENT LIABILITIES (< 1 year) Provisions for pensions and similar rights Other provisions Financial liabilities .850 0 0 0 68 0 0 66 0 0 66 0 0 0 0 0 0 0 0 0 25.230 0 -1.901 0 29.950 1.Current portion of non-current financial liabilities .434 3.387 0 FIXED ASSETS Intangible assets Goodwill Tangible fixed assets .274 2 3.257 30/June/2007 0 0 3.Finance leases .Other Other amounts payable Deferred tax liabilities CURRENT LIABILITIES Financial liabilities .082 0 29.Share capital .506 19.950 0 34.201 20.235 0 0 0 0 0 0 5 0 1.267 -12 0 27 17.316 40.082 0 35.901 0 29.272 0 0 0 17.182 1.274 2 3.434 3.257 0 0 0 0 -27 0 0 0 -1.583 1.688 1.272 0 0 0 47 66.189 0 5.983 4.506 19.248 67.322 62 62 0 422 0 0 0 0 62 62 0 625 0 0 0 0 8 8 0 105 0 0 0 0 0 0 0 0 0 0 0 0 2.Land and buildings .027 0 0 0 0 0 0 0 0 0 26 0 0 0 0 4 0 8 15 0 0 510 0 0 0 0 0 0 0 0 0 1.274 2 3.850 1.

016 15.627 227 .Other receivables CURRENT ASSETS Inventories .199 1.628 2 1.Amounts receivable Deferred tax assets Long term receivables (> 1 year) .Raw materials and consumables .320 81 47.763 25.390 20.106 79.Finance leases .247 706 114.918 0 0 0 28.128 -28 -1.082 0 48.Leasing and similar rights Financial fixed assets .082 0 77.398 -12 42 33 1.682 All Amounts in '000 € Column 1 Column 2 Column 3 G&L Lutosa Moer.121 4 0 4 24.188 30/June/2007 0 68 30 0 30 0 0 0 88.Trade receivables .628 2 1.960 0 -42 0 17.628 2 1.590 81 47.624 2.358 -12 0 33 18.188 0 0 0 0 -1.082 2.513 3. Consol Express bos France y elimination consolidation adjustment BE IFRS stat BE GAAP 49.169 4 0 4 23.Work in progress and finished goods .Lutosa Intercompan Total IFRS.253 0 4 30 0 30 0 0 0 97.428 -64 0 0 0 0 0 0 9.270 0 9.186 -12 42 33 1.100 0 0 0 0 -60 -1.791 4.247 706 160.788 EQUITY Share capital .745 45.Derivatives .927 0 0 0 0 0 0 0 0 407 0 0 0 0 28 28 1 0 0 0 378 1 513 0 0 0 0 0 0 0 0 64 0 0 0 0 0 0 0 0 0 0 64 0 1.390 11.543 2.Credit institutions 0 0 1.Subscribed capital Share premiums Consolidated reserves Cumulative translation adjustments Capital grants Minority interests NON-CURRENT LIABILITIES (< 1 year) Provisions for pensions and similar rights Other provisions Financial liabilities .624 2.Under construction and advance payments .627 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1.121 4 0 4 24.082 2..061 4.682 28.Other receivables Financial assets .791 4.270 0 0 0 0 0 0 0 0 0 46.Available-for-sale financial assets .461 2.493 15.682 494 62 62 0 432 0 0 0 0 798 62 62 0 736 0 0 0 0 112 8 8 0 105 0 0 0 0 -60 0 0 0 -60 0 0 0 0 50.627 0 0 0 0 0 0 0 1.Total consol.390 11.950 0 47.774 765 112.Goods purchased for resale Amounts receivable .914 0 0 2 0 2 0 0 0 194 0 0 0 0 162 111 52 0 0 0 31 1 262 0 0 0 0 0 0 0 0 -1.270 9.950 1.745 45.682 45.320 81 48.Short term deposits Cash and cash equivalents Deferred charges and accrued income TOTAL ASSETS 0 68 28 0 28 0 0 0 89.

Tangible fixed assets (IAS 16): depreciation recorded essentially for tax reasons has been recalculated retroactively in order to ensure that the depreciation method mirrors the pattern according to which the future economic benefits of the assets are expected to be consumed.700 5.941 3. and the unaudited consolidated interim balance sheet and income statement for the period ending on 30 June 2007.682 7.880 0 10.128 0 0 0 0 -28 0 0 0 -1.399 21. The following adjustments were made to bring these figures into line with the recognition and valuation rules as applied in the consolidated financial statements of the Pinguin Group at 30 June 2007: - The consolidated and statutory annual account (IAS 27): Under IAS 27 the consolidated annual account must include all subsidiaries of the parent company. In preparing these pro forma figures for the purposes of restating the tangible fixed assets. Moerbos NV and Lutosa France Sarl at 31 December 2006.930 3.941 3.106 229 0 0 0 0 0 0 0 0 166 63 46. consisting of G&L Van Den Broeke NV (this holding company encompassed Van Den Broeke – Lutosa SA. Notes to the pro forma Lutosa Group’s restated consolidated balance sheet and income statement 1) Reporting bases The above-mentioned pro forma consolidated unaudited balance sheets and income statements have been prepared in accordance with the recognition and valuation rules as applied in the consolidated financial statements of the Pinguin Group at 30 June 2007 and as will be applied to these items and valuation rules applying to Lutosa’s activities in the next consolidated financial statements.Credit institutions .433 26.399 21.880 0 10. On the basis of this principle Lutosa Express NV. liabilities and conditional liabilities for their fair value within the framework of acquisition accounting.Other Trade payables Advances received on contracts Tax payable Remuneration and social security Other amounts payable Deferred charges and accrued income TOTAL LIABILITIES 0 0 0 54 62.203 26.914 0 0 0 0 149 0 0 0 0 12 0 4 130 3 0 262 0 0 0 0 -1.279 77 327 114.147 64 327 112.Bonds .110 0 1.Current portion of non-current financial liabilities .300 0 20.428 0 0 0 17.700 5.Other Other amounts payable Deferred tax liabilities CURRENT LIABILITIES Financial liabilities .100 0 -1.6. depreciation was calculated on their economic life instead of their fiscal value.879 0 10. 2) Financial information for the Lutosa Group The financial information on the balance sheets and income statements relating to the Lutosa Group is taken from the consolidated financial statements (Belgian GAAP) of the Lutosa Group. drawn up according to Belgian recognition and valuation rules.279 243 390 160. Moerbos NV and Lutosa France Sarl companies were incorporated into the consolidation.253 0 0 0 17.188 0 0 0 54 62.300 0 20.699 5.2.160 62..116 0 0 0 0 1 0 5 0 1.300 0 20. Vanelo NV and Primeur NV).927 0 0 0 0 19 0 0 0 0 15 0 2 2 0 0 513 0 0 0 0 1. liabilities and conditional liabilities for their fair value within the framework of acquisition accounting.046 26.399 21. These figures are not restated for the possible effect of including the tangible fixed assets. - 228 . These figures are not restated for the possible effect of including the tangible fixed assets.3. Lutosa Express NV.

- Investment grants (IAS 20): in accordance with IFRS. Effect on ‘Increase/decrease in inventories’ mainly as a consequence of the valuation against full cost in the IFRS statements compared to direct cost in the statutory accounts as well as the effect of the amended depreciation of the valuation of the inventory. Investment grants are taken into income pari passu with the depreciation of these assets. these are deducted from the tangible fixed assets to which they apply. Inventories (IAS 2): these are valued at cost (costs of purchase or costs of conversion) by the FIFO (first-in. The following adjustments were made to the income statement: o Adjustments not effecting the results (reclassifications): discounts are deducted from sales. and contingent liabilities at the fair value within the framework of IFRS 3 Business combinations (acquisition accounting). Contingent Liabilities and Contingent Assets. less the estimated costs of completion and the necessary costs of making the sale. The cost of conversion includes all direct and indirect costs that are necessarily incurred in bringing the inventories to their present location and state. or net realisable value. The realisable value is the estimated sales price in the ordinary course of business. 229 . whichever is lower. Adjustments effecting the results: Effect on the depreciation of the tangible fixed assets based on their economic life. Provisions: a provision recognised for maintenance costs did not meet the recognition criteria of IAS 37 Provisions. Under BE GAAP raw materials are valued at average contract price and the stocks produced are valued at direct cost. deferred tax assets and liabilities are calculated on temporary differences between carrying value of the assets in the statutory accounts and in the IFRS accounts. Capital grants are included in the results in proportion to the IFRS depreciation. - - - - - o The effect of the above-mentioned adjustments affecting the pro forma restated income statement and balance sheet or not. Minority interests included in the BE GAAP consolidated balance sheet and income statement no longer apply as the entire Group has been taken over by the Pinguin Group. liabilities. first-out) method. exclusive of the possible effects of including Lutosa Group’s identifiable assets. is permanent. The effect of the provision made with respect to the maintenance costs in the statutory accounts which does not comply with the requirements of IAS 37 in the IFRS statements. Deferred tax receivables are recognised only where it is likely that future taxable profit will be available against which these temporary differences can be offset. The change to full cost accounting for inventory has the effect of raising the book value of inventories in accordance with IFRS standards. Deferred taxes in accordance with IAS 12. The effect on deferred taxes of the above mentioned adaptations affecting the results. however. Extraordinary income and charges in the statutory financial statements are reclassified as operating charges and income in the IFRS statements. transport charges passed on to clients are offset by the inclusion of transport charges under ‘Services and other goods’. charges for marketing costs of retailers not receiving an identifiable benefit or who do receive such benefit but the value cannot be reasonably established are deducted from sales. These figures are.

584 -35.176 -5.317 -83.475 -4.282 -98. The most significant real value adaptations in these pro forma figures which were not taken into account due to lack of tangible figures as of the issue date of this Prospectus relate to: • • • • • • • The acquisition of the brand name Lutosa and possible depreciation of such The acquisition of the customer relations of Lutosa and possible depreciation of such The acquisition of the machines of Lutosa and possible depreciation of such The acquisition of the stocks of Lutosa The acquisition of the potato contracts of Lutosa and possible depreciation of such The deferred taxes on the above-mentioned adaptations The adaptation of the pro forma goodwill related to the above mentioned adaptations 7.714 4. By its nature this pro forma information illustrates a hypothetical situation and is not representative of the actual financial position and financial performance of Pinguin Group. all of whose shares will be acquired at 28 September 2007 and the sale and rent-back transaction of the real estate.069 -44.7.895 -25.915 -41.221 -182. liabilities and contingent liabilities of the Lutosa Group and fair value as required under IFRS 3 Business Combinations.469 3.085 -12. the impact of the acquisition of the Lutosa Group.1.777 330.261 -15.349 2.147 183.394 3.499 -82.7. these figures do not include the possible effect of profit and loss related to the acquisition of the identifiable assets.953 -19.037 -3.7. PRO 2006/2007 FORMA CONSOLIDATED FINANCIAL INFORMATION 7. General This pro forma information is presented for illustrative purposes only.1. in the form of an unaudited pro forma consolidated income statement for a 12-month period. With the exception of the lands and buildings of the Lutosa Group. acquisition fair value Sales LUTOSA GROUP) Note B Note C Note D Amounts in '000 € Note A Pinguin Group Lutosa Group Intercompany eliminatie CONTINUING OPERATIONS Sales Increase/decrease in inventories Negative goodwill recognised in income statement Other operating income Raw materials.1.693 230 .500 -976 -6. write-offs and provisions Other operating income and charges CY 2006 (12 CY 2006 (12 mths) mths) 147. as if the Lutosa Group had been acquired on 1 January 2006. Pro forma unaudited consolidated income statement at 31 December 2006 (in thousands of €) Pinguin’s management presents below.156 -10 -2. consumables and goods for resale Services and other goods Personnel costs Depreciation Reversal of impairment losses on assets Impairments.924 1.7.848 1. whose valuation report as of the date of this Prospectus included the real value of these assets.156 -966 -1.320 1. Pro forma Consolidate Consolidate d restated d CONSOLIDAT ED PRO FORMA P&L 31/12/2006 PINGUIN GROUP Adjt tot Real Estate (INCL.

610 887 -34 -933 19.527 19. fair value CONTINUING OPERATIONS Sales Increase/decrease in inventories Negative goodwill recognised in income statement Other operating income Raw materials.676 -3.349 754 -2.005 -2.7. all of whose shares have been acquired at 28 September 2007.470 -16 196.068 -64.203 -3.229 -1.488 12. the impact of the acquisition of the Lutosa Group.817 16 -2.094 4.036 68 -8.389 343 -5. acquisition Sales LUTOSA GROUP) Amounts in '000 € Note A Note B Pinguin Group Lutosa Group Inter company eliminatie Adj.770 -5.081 1586 3.166 -22.061 1.422 -16.381 -34.770 360 -4.755 -1.301 -20. and the impact of the sale and rent-back of the real estate of Lutosa as if this transaction had taken place by 1 January 2007.097 -3.707 -39. write-offs and provisions Other operating income and charges Operating results (EBIT) Financial income Financial expenses Operating results after net finance costs Taxes NET RESULTS FROM CONTINUING OPERATIONS First half 2007 (6 First half mths) 2007 (6 mths 72.404 334 -1.421 4.893 -10.813 -9. as if the Lutosa Group had been acquired on 1 January 2007.885 -4.023 -1580 -7.886 -1.110 1. consumables and goods for resale Services and other goods Personnel costs Depreciation Reversal of impairment losses on assets Impairments.710 -10. in the form of an unaudited pro forma income statement for a 6month period.885 -1.551 1.2.389 -3.221 -98.837 -5.006 7.586 4. Pro forma unaudited consolidated income statement at 30 June 2007 (in thousands of €) Pinguin’s management presents below. Consolidate Pro forma d restated Consolidate 30/06/2007 d 30/06/2007 CONSOLIDA TED PRO Note C Note D FORMA P&L 30/06/2007 PiNGUIN GROUP Real Estate (INCL.975 7.321 7.548 1.725 456 -952 19.246 -219 306 2.699 8.014 887 377 -1.246 7.913 -1.606 -7.163 -12.403 -5.193 -1.316 -8.448 933 123.1.301 1.507 16.885 -4.670 3.Operating results (EBIT) Financial income Financial expenses Operating results after net finance costs Taxes NET RESULTS FROM CONTINUING OPERATIONS 4.198 562 -3.770 -3.740 790 -4.500 -4.475 231 .

The effect of the restructuring undertaken after 30 June 2007 amounts to € 1 million approximately and is not included in the restated income statement referred to above. Notes to the pro forma consolidated income statement of Pinguin including Lutosa 1 Reporting bases This financial information is prepared in a manner consistent with the recognition and valuation rules as applied by the Pinguin Group in its consolidated financial statements for the years ending 31 December 2006 and at 30 June 2007 and as will be applied in the next consolidated financial statements for these items and valuation rules specifically applying to Lutosa’s activities. The financing of the acquisition of the assets and inventories is included in Pinguin's restated balance sheet and income statement at 30 June 2007 (6m) and not per 31 December 2006 (12m) as the transaction was not retroactively included in the financial information.2 million and is included in the restated income statement at 30 June 2007 (6m).2 million. The takeover was finalised on 10 September 2007. The effect on sales and the positive contribution towards the net profit amounted to € 3. a restructuring was undertaken. As a consequence of the acquisition of these activities.490K of assets. The restructuring was partially concluded before 30 June 2007.1. Pinguin Group’s income statement at 30 June 2007 (6m) includes one month of sales and results for the acquired activities. Please see section 7.7 million under an asset deal. under the form of an asset deal. The effects of the acquisition of these activities were not retroactively included in the income statement as at 31 December 2006 (12m). The annual repayment under this financing is € 228K. On 17 August 2007 Pinguin reached an agreement with Salvesen Logistics Ltd to acquire Christian Salvesen's Food division for a total of € 26. The cost hereof was € 0.6. Pinguin Foods UK acquired the assets and activities of Padley Vegetables Ltd. 3 Financial information for the Lutosa Group The financial information with respect to Lutosa Group’s income statement is taken from the pro forma restated consolidated income statement of the Lutosa Group as reflected in paragraph 7. On 1 June 2007.3. At present Pinguin is negotiating a credit facility for the amount of € 140 million intended for the refinancing of Pinguin’s existing credit facilities and takeover debts. for further information on the refinancing of the Group’s debts.4. In addition Padley Vegetables’ inventories were acquired for an amount of € 3.3. This acquisition is financed with a six-year vendor financing arrangement. These activities are consolidated as of 1 June 2007.2 million.11 for a further explanation with respect to the acquisition of the assets and activities of Padley Vegetables Ltd.1. columns 5 and 7 respectively. Above-mentioned effects of the takeover of these activities have a permanent impact on the financial information although that the nature of restructuring costs is one-off and impacts the income statement at 30 June 2007 (6m).7. We refer to section 6. 2 Financial information for the Pinguin Group The financial information in the income statement which relates to the Pinguin Group is taken from the unaudited consolidated pro forma income statement of the Pinguin Group (pre-acquisition) at 31 December 2006 (12 month calendar year) and at 30 June 2007 (first six months of the 2007 calendar year) as reflected in paragraph 7.4. Pinguin Foods UK has also taken over € 1. 232 . These acquisitions were financed with temporary bridging credit facilities and as such are not included in capital increase for the financing of the acquisition of the Lutosa Group.2.5 million and € 1.6.7. These are financed with suppliers’’ credit.1.1.

89% 3.770K (at 31 December 2006) and € 1.000 Interest rate: 5.The Consortium leases the buildings for 15 years to Les Pres Sales NV.89%. (= (average of OLE – five years and IRS – five years) + margin 1. amounts to 5.885 Explanation C: Interest charges financing Lutosa takeover The interest charges relating to the financing of the Lutosa takeover amount.Lutosa grants (i) a 99-year long lease to the consortium in exchange for the payment of a single instalment of € 42.500. Based on the framework agreement.Les Pres Sales NV rents the buildings to the Lutosa companies in question at a rent of € 4.500.250. In the pro forma statements.282.000 and (ii) sells the land to Dreefvelden NV for € 2.000 a year (indexed annually) for the duration of minimum of 15 years.000. The interest rate.770 233 .000 (45.000) 64. .750. as no inter-company transactions took place during this period.000 5. abstraction was made of the capital reimbursements. Explanation D: Sale and Rent-back Operation of Lutosa real estate Les Pres Sales NV (a company controlled by Food Invest International NV and the Van den Broeke Family) and Dreefvelden NV (a company controlled by Veerle Deprez) have reached a framework agreement with a bank consortium consisting of ING. At 31 December 2006 (in ‘000 Euros): Loan: Financing sale and rent-back Interest rate: Interest rate for CY 2006: At 30 June 2007 (in ‘000 Euros): Loan: Financing sale and rent-back 109. Explanation B: additional interest charges resulting from the financing of the takeover of the Lutosa Group In respect of the takeover an additional credit facility will be entered into for the amount of € 64 million (loan € 109 million – financing sale and rent-back € 45 million).250) 109.885K (at 30 June 2007).500) 30/6/07 (2. The income from the sale will be used to finance a portion of the takeover price of Lutosa. we used.000 (45. The impact of this sale and rent-back operation can be summarised as follows: 31/12/06 Services and other goods Annual rental charge Surplus value realised on (4.89% Interest charge first half year 2007: 1. with an option for Les Pres Sales to buy at the end of the lease for EUR 1. after the sale and rent-back operation. . to € 3.4 Pro forma information Pinguin Group Explanation A: elimination of I/C-transactions Intra-group sales between the Pinguin Group and the Lutosa Group during the six months to 30 June 2007 have been eliminated. No eliminations have been made in the income statement for the 2006 calendar year.000) 64. KBC and Fortis (the “Consortium”) relating to the sale of the buildings and land located on Lutosa's three sites. the transaction will be structured as follows: .5%).

416 573 30 6. Pro forma consolidated balance sheet of the Pinguin Group (including acquisition of the Lutosa Group) at 31 December 2006 and at 30 June 2007 7.2.520 15. machinery and equipment . which all shares will be acquired at 28 September 2007.266 97.684 19.Amounts receivable Deferred tax assets Long term receivables (> 1 year) .337 102. All Amounts in '000 € CONSOLIDATED Consolidated Consolidated Explanation Explanation Explanation Explanation PRO FORMA restated restated BALANCE PER A B C D 31 Dec.315 -38.266 52.339 234 .241 -3.022 43.disposals and spread recognised in income statement Depreciation Elimination of depreciations for buildings Other operating income and charges VAT revision as a result of this transaction Taxes Full effect on the taxes including deferred taxes Net impact on results 279 140 2.Other CURRENT ASSETS 53.Plant.500) 360 (4.337 200.500) (3.075 26.315 102.Land and buildings .Assets under construction and advance payments . 2006.684 62.000 392 392 156.7.058 125 125 30 4 30 30 6.869 PINGUIN GROUP FIXED ASSETS Intangible assets Goodwill Tangible fixed assets .886) 68 (4.225 1.205 349 67.430 1. acquisition GROUP elimination fair value Sales LUTOSA GROUP) 67. Pro forma unaudited consolidated balance sheet at 31 December 2006 (in thousands of €) Pinguin’s management presents below.1.266 -38.Other tangible fixed assets .771 23. the impact of the acquisition of the Lutosa Group.062 155 125 30 0 392 392 80.461 573 102.337 -38.315 15.868 87.7.221 (3.475 1. and the impact of the Lutosa assets sale and rent-back as if this transaction had taken place by January 1.Leasing and similar rights Financial fixed assets . 2006 31 Dec.321) 7. 2006 31 DEC 2006 PINGUIN LUTOSA Intercompany Adjustment Real Estate GROUP (INCL.Available-for-sale fixed assets .326 26.801 15. in the form of an unaudited pro forma consolidated balance sheet at 31 December 2006.Furniture and vehicles .2.770 -8.

300 2.800 All Amounts in '000 € CONSOLIDATED Consolidated Consolidated Explanation Explanation Explanation Explanation PRO FORMA restated restated A B C D BALANCE PER 31 Dec.510 -325 1.894 2.371 37.720 17.000 -43.284 26.213 2.096 48.799 8 80.282 38.506 19.837 32.000 109.282 19.576 -4.000 68.470 12 -27 109.817 2.886 106.338 2.504 3.000 -45.367 1.Goods purchased for resale Amounts receivable .716 65.613 113 2.000 14 283 76.250 113. 2006 31 Dec.683 74.206 10.Raw materials and consumables .199 30.332 402 29.063 1.131 134.126 3.886 113.119 3.162 1.567 -4.Credit institutions 45.560 144.109 62.522 5.962 8 47.250 48.250 -4.564 58.000 -45.Credit institutions .960 7.042 15.638 30.901 5.315 98.367 14.Other receivables Financial assets .111 4.917 1.705 50.500 2.Trade receivables .890 1.Bonds .594 4 4 13.407 7.968 14 283 8.681 105.245 4. 2006 31 DEC 2006 PINGUIN LUTOSA Intercompany Adjustment Real Estate GROUP (INCL.Subscribed capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests NON-CURRENT LIABILITIES Provisions for pensions and similar rights Other provisions Financial liabilities .215 70.Work in progress and finished goods .Derivatives .907 2.621 235 .Other Other amounts payable Deferred tax liabilities CURRENT LIABILITIES Financial liabilities .206 0 1.332 402 5.274 2 3.109 -11.Finance leases .770 -8.295 356.617 113 2.248 67.681 14.918 62.337 -3.116 PINGUIN GROUP SHAREHOLDERS’ EQUITY Share capital .252 6.320 164 155.Short term deposits Cash and cash equivalents Deferred charges and accrued income TOTAL ASSETS 42.082 65.082 2.490 -325 1.272 109.496 -46.267 -12 27 20.250 -8.Inventories .371 9.424 2.156 27.Current portion of noncurrent financial liabilities .501 44. acquisition LUTOSA GROUP elimination fair value Sales GROUP) 67.364 10.139 75.918 -74.837 4.

337 4.110 1.002 0 4 4 Financial fixed assets -Available-for-sale financial asset .061 58.783 4.Plant.387 18.275 95.Other Trade payables Advances received on contracts Tax payable Remuneration and social security Other amounts payable Accrued charges and deferred income TOTAL LIABILITIES 41 32.591 100.251 29.384 356.2.582 1.530 29.275 -39.189 1.732 Tangible fixed assets .Other tangible fixed assets .136 PINGUIN GROUP LUTOSA Intercompan Adjustment Real Estate (INCL.284 5.275 18.909 -46.Under construction and advance payments .2.Other 350 350 287 287 287 287 CURRENT ASSETS 72.732 95.889 21.519 236 . Pro forma unaudited consolidated balance sheet at 30 June 2007 (in thousands of €) Pinguin’s management presents below.678 29.Amounts receivable 30 30 0 30 30 Deferred tax assets Long term receivables (> 1 year) .800 7.315 98.885 -5.528 545 214 134. LUTOSA acquisition GROUP y elimination fair value Sales GROUP) 62. All Amounts in '000 € CONSOLIDATED Consolidate Consolidate Explanation Explanation Explanation Explanation PRO FORMA d restated d restated A B C D BALANCE PER 30 June 2007 30 June 2007 30 June 2007 PINGUIN GROUP FIXED ASSETS 60.837 68.919 18.434 3.750 163. in the form of an unaudited pro forma consolidated balance sheet at 30 June 2007.316 40.828 3.Land and buildings .182 1.Leasing and similar rights 58.471 Intangible assets 821 821 Goodwill 95.063 41 62.. the impact of the acquisition of the Lutosa Group.283 261 155.245 6. of which all shares will be acquired by 28 September 2007 and the impact of the Lutosa assets sale and rent-back as if this transaction had taken place by 1 January 2007.591 -39.226 615 62.Furniture and vehicles .081 Inventories 33.7.954 97.458 25.837 28.042 15.763 -1 -1. machinery and equipment .782 594 2.732 -39.496 -1.591 197.408 2.

162 86 86 47.885 -5.082 2.Derivatives .592 81 -1 -1 79.121 4 4 6.Trade receivables .603 79.002 4.039 6.603 26.629 2 1.472 29.643 -321 1.000 109.216 74.321 117.082 62.745 45.113 12 -33 -4.344 -321 1.000 57 74.Subscribed capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests NON-CURRENT LIABILITIES 48.552 All Amounts in '000 € CONSOLIDATED Consolidate Consolidate Explanation Explanation Explanation Explanation PRO FORMA d restated d restated A B C D BALANCE PER 30 June 2007 30 June 2007 30 June 2007 PINGUIN GROUP LUTOSA GROUP Intercompan PINGUIN GROUP Adjustment Real Estate (INCL.539 6.564 Provisions for pensions and similar rights Other provisions Financial liabilities .435 3.708 829 1.090 160.575 1.847 -45.063 -79.590 SHAREHOLDERS’ EQUITY 46.229 113.000 -45.081 829 1.576 106.963 975 24.699 5.229 48.229 -2.399 59.216 -4.Goods purchased for resale Amounts receivable .Raw materials and consumables .064 3.846 50.212 1.681 TOTAL ASSETS 133.000 -43.302 7.Other Other amounts payable Deferred tax liabilities CURRENT LIABILITIES 12 12 57 8.Current portion of non- 32.Bonds ..682 -1 18.624 2.461 Share capital .750 4 23.556 136.Work in progress and finished goods .390 20.310 2.229 2.160 6.238 12.063 -16.Short term deposits Cash and cash equivalents Deferred charges and accrued income 3.Other receivables Financial assets .002 237 .321 3.Finance leases .432 -1 1.431 70.398 Financial liabilities .789 12.348 62.212 109.302 1.635 17.456 30.918 62.039 16.933 4.275 93.223 3. LUTOSA y acquisition fair value Sales GROUP) elimination 12.063 2.139 77.358 -12 33 18.Credit institutions .000 -45.341 360.225 68.424 32.590 81 7.283 90 86 31.247 706 -1.627 109.918 113.

Above-mentioned effects of the takeover of these activities have a permanent impact on the financial information although that the nature of restructuring costs is one-off and impacts the income statement as at 30 June 2007 (6m).279 243 390 160.300 47. Please see section 7.2. The restructuring was partially concluded before 30 June 2007.941 3.821 681 2.236 0 55. 2. These are financed with suppliers’ credit.936 21. The effect on sales and the positive contribution towards the net profit amounted to € 3. Notes to the pro forma consolidated balance sheet of Pinguin including Lutosa 1.048 -45.492 10.4. The effect of the restructuring undertaken after 30 June 2007 amounts to € 1 million approximately and is not included in the restated income statement referred to above. Reporting bases This financial information is prepared in a manner consistent with the recognition and valuation rules as applied by the Pinguin Group in its consolidated financial statements for the years ending on 31 December 2006 and 30 June 2007 and as will be applied in the next consolidated financial statements for these items and valuation rules specifically applying to Lutosa’s activities.880 -1 1.806 354 89 133. 238 .275 93.847 -1.7.2 million.552 7. The annual repayment under this financing is € 228K.current financial liabilities .084K.2. The cost hereof was € 0.063 25. In addition Padley Vegetables’ inventories were acquired for an amount of € 3. Financial information for the Pinguin Group The financial information referring to the Pinguin Group at 30 June 2007 is taken from the audited consolidated financial statements at 30 June 2007 see section 7.Other Trade payables Advances received on contracts Tax payable Remuneration and social security Other amounts payable Accrued charges and deferred income TOTAL LIABILITIES 33. On 1 June 2007.879 20. Pinguin Group’s income statement at 30 June 2007 (6m) includes one month of sales and results for the acquired activities. was undertaken.11 for a further explanation with respect to the acquisition of the assets and activities of Padley Vegetables Ltd.1. The financing of the acquisition of the assets and inventories is included in Pinguin's restated balance sheet and income statement at 30 June 2007 (6m) and not at 31 December 2006 (12m) as the transaction was not retroactively included in the financial information. Pinguin Foods UK acquired the assets and activities of Padley Vegetables Ltd.682 -1 18.2 million.5 million and € 1. The effects of the acquisition of these activities were not retroactively included in the income statement as at 31 December 2006 (12m). These activities are consolidated as of 1 June 2007.130 6. As a consequence of the acquisition of these activities a restructuring.2 million and is included in the restated income statement as at 30 June 2007 (6m).3. Pinguin Foods UK has also taken over € 1.090 10.490K of assets and after application of the acquisition accounting method the fair value of the pro forma consolidated balance of Pinguin as per 30 June 2007 is € 3. The balance sheet at 31 December 2006 is taken from the published interim financial information at 31 December 2006 and has undergone only a limited audit by the statutory auditor. under the form of an asset deal.527 360.Credit institutions .341 4. This acquisition is financed with a six-year vendor financing arrangement.085 597 4.

We assume that these costs will be financed out of internally generated funds. Charges of net assets on pro forma figures Note A: Elimination of the I/C transactions Intra-group receivables and debts which amount to € 1.89% has been used in the pro formas.3.412 as of 30 June 2007 have been eliminated (was not applicable as of 31 December 2006). for further information on the refinancing of the Group’s debts.4. The acquisition was completed on 10 September 2007.885 (by 30 June 2007). Financial information for the Lutosa Group The financial information relating to the income statement referring to the Lutosa Group is taken from the pro forma consolidated income statement of the Lutosa Group as given in point 7. As a consequence of these interest charges.2.732 239 . The full consolidation method requires the equity of an acquired company to be eliminated on the date of acquisition. Note C: Takeover operation and financing To fund the acquisition an additional € 66 million of capital will be subscribed. This acquisition was financed with temporary bridging credit facilities and was as such not included in the capital increase for the financing of the acquisition of the Lutosa Group.266 The costs directly attributable to the business combination are estimated at € 63K.770K (by 31 December 2006) and 1.2. the financial resources will decrease by € 3. 3.000 63 (73.On 17 August 2007 Pinguin reached an agreement with Salvesen Logistics Ltd to acquire Christian Salvesen's Food division under an assets deal for a total of EUR 26. 4. The direct transaction costs of this capital increase are estimated at € 1 million. At 1 January 2007 (in ‘000 Euros ): Acquisition price: Transaction costs: Net assets of the Lutosa Group at 1 January 2007: Pro forma goodwill at 1 January: 175.331) 95.000 63 (72. Goodwill arising from the acquisition of the Lutosa Group is calculated as follows: At 1 January 2006 (in ‘000 Euros): Acquisition price: Transaction costs: Net assets of the Lutosa Group at 1 January 2006: Pro forma goodwill at 1 January 2006: 175.6. For the remaining € 64 million (€ 109 million – Financing sale and rent-back € 45 million) an additional financial loan will be subscribed. Please see section 6.1. At present Pinguin is negotiating a credit facility for the amount of € 140 million intended for the refinancing of Pinguin’s existing credit facilities and takeover debts. For these adjustments income taxes were recognised in conformity with IAS 12 Income taxes. Note B: Fair value adjustment The book value of lands and buildings was adjusted to their real value in conformity with IFRS 3 Business Combinations on the basis of independent expert reports. An interest rate of 5. In accordance with IFRS these will be deducted from capital.797) 102.7 million.

811 (1.The other debts increase by € 1.188) 140 (4.886) 68 (4.750) Credit institution lower financing charge from the sale and rent-back operation Accrued charges and deferred income Spread surplus value on sale and rent-back operation Spread surplus value recognised in income statement 45.811 (2.500) (2.337) 30/06/2007 40.500) (8.250) (5.220) (39.048) Effect of taxes on adjustments above 360 Net adjustment on equity (4. 063K including the direct transactional costs of the capital increase (€ 1 million) and directly attributable costs of the business combination (€ 63K).000) (3.909) (4.475) (38. Note D: Sale and rent-back transaction 31/12/2006 40.500) (4.000 45.188) 279 (3.321) 240 .591) Disposal of lands and buildings Correction of earlier depreciation on buildings Cash and cash equivalents VAT revision Rental paid (3.000 (4.

In accordance with these standards.1 and 7. Basis of Opinion We conducted our work in accordance with the applicable professional standards of the Institute of Company Auditors in Belgium.v. The work that we performed for the purpose of making this report. to provide information about how the Lutosatransaction might have affected the pro forma financial information as if this transaction had occurred per January 1. October 18. CVBA Represented by Mario Dekeyser 241 . In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro forma financial information. we have performed procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial information.v. consisted primarily of comparing the unadjusted financial information with the consolidated IFRS financial statements of the Pinguin Group and the consolidated BE GAAP financial statements of the Lutosa Group. which has been prepared on the basis described in note 7.8.2. This report is required by Annex II item 7 of Commission Regulation (EC) No 809/2004 (the “Prospectus Regulation”) and is given for the purpose of complying with that requirement and for no other purpose. Kortrijk. Opinion In our opinion: (a) (b) the Pro forma financial information has been properly compiled on the basis stated.. Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside Belgium. 2007 (the “Prospectus”). 2007.e. 2006 and per January 1.2 and Annex II items 1 to 6 of the Prospectus Regulation. It is our responsibility to form an opinion. 2007 DELOITTE Bedrijfsrevisoren BV o. REPORT OF THE STATURORY AUDITOR’S REPORT ON THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION To the shareholders and the Board of Directors of Pinguin NV We report on the pro forma financial income statement and pro forma balance sheet (the “Pro forma financial information”) set out in chapter 7.7. as to the proper compilation of the Pro forma financial information based on the accounting policies adopted by the Company in preparing the financial statements. considering the evidence supporting the adjustments and discussing the Pro forma financial information with the Directors. Responsibilities It is the responsibility of the directors of the Company (the “Directors”) to prepare the Pro forma financial information in accordance with Annex I item 20. and accordingly should not be relied upon as if it had been carried out in accordance with those standards or practices.7.7. including the United States of America. and such basis is consistent with the accounting policies of the Company which were applied in the last consolidated annual accounts or as they will be applied in the following consolidated annual accounts for those items and valuation rules which are specific for the Lutosa activities.7 Pro Forma Consolidated Financial Information 2006/2007 of the Prospectus dated October 18. for illustrative purposes only.

these charged costs may differ considerably from the real costs within the Pinguin structure. and are extrapolated over a period of 12 months. . Moreover. consequently no deferred taxes are recorded and no adjustment has been made to the goodwill as a result of the fair value adjustments. Additionally the historical financial data contain a number of intragroup charges because some activities were carried out and managed at group level. respectively. This means. The figures relate to the entire Christian Salvesen Foods business segment while the Pinguin Group only acquired a number of sites. With this asset deal the management of the Pinguin Group aims to obtain additional critical mass and achieve operational synergies in the area of customers. from April 2006 up to and including March 2007. product lines. these charged costs may differ considerably from the real costs within the Pinguin structure.In both cases the acquired activities of Padley Vegetables and Christian Salvesen Foods concern asset deals relating to divisions of Padley Vegetables and the Christian Salvesen Foods Group. 7. The Pinguin Group has no access to these charge mechanisms from the past. The Pinguin Group has no access to these charge mechanisms from the past. The financial data relating to the acquired activities of Padley Vegetables and Christian Salvesen Foods. These limitations are mainly caused by the lack of historical financial data that only relate to the activities acquired by the Pinguin Group.The acquired assets of Christian Salvesen Foods are not valued at fair value. The 242 .The reported periods do not coincide with the 2006 calendar year: for Padley vegetables. . . Financial Data Christian Salvesen Foods This information has been prepared for illustration purposes only and consequently does not represent the actual financial position and performance of the acquired activities of Christian Salvesen Foods. The available figures contain a number of intragroup charges because some activities were carried out and managed at group level.9.The accounting and valuation rules comply with UK GAAP as being applied to the management reports of these activities before they were acquired by the Pinguin Group. These financial data have not been prepared in accordance with the accounting and valuation rules which are applied to the consolidated financial statements of the Pinguin Group or which will be applied in the subsequent consolidated financial statements of the Pinguin Group for these items and valuation rules which are specific to the acquired activities of Padley Vegetables and Christian Salvesen Foods. for Christian Salvesen Foods. This information has been prepared for illustration purposes only and consequently does not represent the actual financial position and performance of the acquired Padley Vegetables and Christian Salvesen Foods. The pro forma consolidated financial information for Pinguin and Lutosa for the calendar year 2006 is supplemented with financial data relating to the acquired activities of Padley Vegetables and Christian Salvesen Foods. management reporting data are available for a period of 12 months. whereas the available data relate more to the division in which the acquisition has taken place and in which the specific part of the acquired activities cannot be entirely differentiated. that this information has the following limitations: . packaging and sites in order to thus accelerate the growth and profitability of its activities in the United Kingdom. PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR PINGUIN AND LUTOSA IN 2006 SUPPLEMENTED WITH ESTIMATES RELATING TO THE IMPACT OF THE RECENT ACQUISITIONS OF PART OF THE ACTIVITIES OF PADLEY VEGETABLES AND CHRISTIAN SALVESEN FOODS. from August 2006 up to and including April 2007.1. on the available management reporting of the acquired sites. management reporting data are available for a period of nine months. among other things.9. For this reason the data is based. As the Pinguin Group does not acquire the entire division the existing information at the level of division is not relevant for the activities that only relate to the acquired assets. 7. logistics. whereby the Pinguin Group has not acquired the whole of the division. Reporting within the Christian Salvesen Group was after all at a global level and not at the level of the activities acquired by the Pinguin Group. as far as turnover and EBIT are concerned.7. Moreover.9. The transaction whereby the activities of Christian Salvesen Foods were acquired by the Pinguin Group concerns an asset deal within a division of the Christian Salvesen Group.2.

Considering that Pinguin has no information available on the financial year of 22 months of Padley Vegetables Ltd. The last closed financial year of Padley Vegetables Ltd. This exercise could lead to important savings as a result of the synergies between the various sites. On the basis of an estimated economic life of the material of six years. 2007.9 million EUR as if the acquisition occurred at the beginning of the calendar year 2006. The Pinguin Group has no access to these charge mechanisms from the past. Financial Data Padley Vegetables This information has been prepared for illustration purposes only and consequently does not represent the actual financial position and performance of the acquired activities of Padley Vegetables. a depreciation charge is included at an annual amount of EUR 1. The revenues relate to sales from the acquired sites of Christian Salvesen Foods for the period April 2006 up to and including March 2007. With this asset deal the management of the Pinguin Group aims to obtain additional critical mass and achieve operational synergies in the area of customers. The transaction in which the activities of Christian Salvesen Foods were acquired by the Pinguin Group concerns an asset deal within a division of the Padley Group. product lines. Considering that sales of frozen vegetables is relatively constant on a monthly basis and is therefore independent of the seasonal character of the production activities. this assumption did not appear illogical to management. these charged costs may differ considerably from the real costs within the Pinguin structure. 243 . The restructuring exercise that this involves could have a resultant material impact on the organisation and operations of the various sites and therefore also have an impact on the financial structure and costs. 7. The acquisition of the activities of Christian Salvesen Foods was financed by means of a bridging credit for an amount of EUR 26. pending the outcome of the discussions on the partial conversion of this bridging credit into long-term credits. liabilities and contingent liabilities at fair value in the context of acquisition accounting (cf. 2005 (12 months).9. the profit and loss account was based on historical data based on the management reporting on the 9 months from August 2006 up to and including April 2007. This bridging credit is included as a short-term liability.7 million. the entire result has not been included in the consolidated reserves. This adjustment has been made in the balance sheet and in the profit and loss account. The consolidated reserves only include the annual depreciation charges. packaging and sites in order to thus accelerate the growth and profitability of its activities in the United Kingdom. Moreover. ended at July 30. Because the items included in the profit and loss account only relate to the operating results. The available figures contain a number of intragroup charges because some activities were carried out and managed at group level. Other headings in the balance that will be influenced by the acquisition of the activities of Christian Salvesen Foods will be mentioned under point 7. The impact hereof is not included in the financial figures below.9. IFRS 3 – Business Combinations). Abovementioned balance-sheet data do not yet include any adjustments for possible effects of the inclusion of identifiable assets. The tangible fixed assets were included in the balance below against an acquisition value of 6. the interest costs are not included in the balance or profit and loss account.4.3. This exercise could lead to important savings as a result of the synergies between the various sites. Since the profit and loss account only relates to the operating result. The impact hereof is not included in the financial figures below. The acquired inventories were included at an acquisition value of EUR 19. that ended on May 31.restructuring exercise that this involves could have a resultant material impact on the organisation and operations of the various sites and therefore also have an impact on the financial structure and costs.1 million.8 million. The operating result has been adjusted only in respect of the depreciation on the basis of the acquisition value and the economic life. logistics.

Other headings in the balance that will be influenced by the acquisition of the activities of Padley Vegetables will be mentioned under point 7. In the balance sheet presented above. Inventories The inventories of Salvesen Foods were acquired on the basis of actual inventory present on September 10. this assumption did not appear illogical to management. The acquisition of the activities of Padley Vegetables has been financed by means of vendor financing repayable over a period of six years. IFRS 3 – Business Combinations).9. respectively.5 million. Since the acquisitions on June 4 and September 10.1 million has already been made. Receivables No unsettled trade receivables were included for either of the asset deals. 7. Because the items included in the profit and loss account only relate to the operating results the interest costs are not included in the balance or profit and loss account.6 million EUR). Fixed assets The fixed assets may vary due to the possible effects of the inclusion of identifiable assets. The consolidated reserves include only the depreciation charge for the year as well as the negative goodwill in the result.2 million (including interest). This adjustment has been made in the balance sheet and in the profit and loss account. Considering that the sales of frozen vegetables is relatively constant on a monthly basis and is therefore independent of the seasonal character of the production activities. The inclusion of the acquisition price is one of these assumptions. Evolution of the various balance sheet items As sketched above a number of assumptions are suppressed in this estimate of the balance sheet and profit and loss account. The seasonal character of the vegetable industry caused by climatological patterns explains why inventory levels are the highest in November and December and at the lowest in May and June of every year. This is not the case for the acquired assets of Salvesen Foods.4. A rental contract is being concluded for the buildings.1 million EUR as if the acquisition occurred at the beginning of the calendar year 2006.5 million EUR). the sales of the former Padley Vegetables and Salvesen Foods are now completely through Pinguin Foods UK Ltd. based on the accepted terms for payment in the United Kingdom and in the sector. no inventories were acquired on the date of the acquisition. the contractual additional rent charges (0. an initial repayment of EUR 0. Thereafter the annual repayments amount to EUR 0. in order to arrive at a period of 12 months. On the basis of an estimated economic life of the material of six years.The acquired tangible fixed assets were included in the balance below at a fair value of 3. a depreciation charge is included at an annual amount of EUR 0. The revenue figure has been arrived at on the basis of a linear extrapolation of financial data for a period of nine months from August 2006 up to and including April 2007. With regard to this financing. 244 . Due to Padley remaining active as supplier of vegetables Pinguin concluded an agreement in which the vegetables used will be invoiced against normal supplier terms on a monthly basis. It should be noted that a number of items can vary significantly with respect to the acquisition balance in the course of the year. 2007. liabilities and contingent liabilities at fair value in the context of acquisition accounting (cf.9. Since the profit and loss account only relates to the operating result. With the Padley acquisition.4. the fair value for the acquired assets of Padley Vegetables was already included. the entire result has not been included in the consolidated reserves. It can therefore be expected that the accounts receivable will increase considerably due to the extra sales.5 million EUR) and the negative goodwill included in the result (1. The operational result was only adapted with regards to the depreciation based on fair value and the economic life (0.

The following table contains the pro forma consolidated balance sheet of the Pinguin Group and the Lutosa Group supplemented with estimates relating to the impact of the acquisitions of the activities of Padley Vegetables and Salvesen Foods.In the case of the acquisition of Padley Vegetable no inventories were acquired on the date of the acquisition. After the acquisition the purchases are now invoiced to Pinguin Foods UK Ltd.869 30 6.832 19.245 4. As mentioned above Pinguin is currently negotiating refinancing of its existing loans and acquisition liabilities for a credit volume of 140 million Euros.430 1.139 75.684 62.371 9.Other receivables Financial assets 5. The purchased vegetables from the new season will also result in raised trade payables because of the extra activities via Pinguin Foods UK Ltd.Receivables Deferred tax assets Long-term receivables .768 2.Land and buildings .062 155 125 30 0 392 392 156.570 5.570 2.Raw materials and consumables .Participating interests .266 97.617 19.075 26.Leasing and similar rights Financial fixed assets .810 CS Foods UK GAAP based Padley Vegetables UK GAAP based FIXED ASSETS Intangible assets Goodwill Tangible fixed assets .Assets under construction and advance payments . Financial liabilities As stated the financial liabilities will change as a function of the increased demand for working capital.570 245 .768 5. Reserves The reserves will change as a function of the results of the operations with the understanding that a number of one-off restructuring efforts will be carried out in order to bring these activities as quickly as possible up to the level of the Pinguin standards. due to which Pinguin expects that these extra activities will generate a noticeable increase of the trade payables.Other receivables CURRENT ASSETS Inventories .832 1.Furniture and vehicles . It must also be mentioned this year that due to the extreme weather conditions the yield of the fields are considerably lower than in a normal year.Trade receivables . However the use up to and including September is invoiced as a function of actually consumed amounts. Trade payables No unsettled trade payables were included for either of the deals.022 18. machinery and equipment .461 573 102. Pinguin Group including Lutosa Group All amounts in thousands of EUR IFRS CONSOLIDATED PRO FORMA BALANCE SHEET 31/12/2006 200. As a function of this the trade payables can change considerably.799 8 80. based on the accepted terms of payment in the United Kingdom and in the sector.Goods for resale Receivables .Work in progress and finished products .768 2.564 58. which also means that the inventories are at a lower level than normal.Plant.339 68.894 2.Other tangible fixed assets .

.681 105.Other Other liabilities Deferred tax liabilities AMOUNTS PAYABLE IN ONE YEAR OR LESS Financial liabilities .800 Pinguin Group including Lutosa Group IFRS CONSOLIDATED PRO FORMA BALANCE SHEET 31/12/2006 106.162 1.110 1.116 113.245 6.Current portion of non-current financial liabilities .490 -325 1.570 26.295 356.705 50.747 353 353 -1.Credit institutions .138 1.147 1.250 -8.917 1.384 356.621 41 62.600 2.138 1.Bond loans .968 14 283 76. 246 .Credit institutions .Derivatives .Others Trade payables Advances received on contracts Tax payables Remuneration and social security Other amounts payable Accrued charges and deferred revenues TOTAL LIABILITIES -1.079 1.716 65.570 All amounts in thousands of EUR CS Foods UK GAAP based Padley Vegetables UK GAAP based SHAREHOLDERS’ EQUITY Capital .138 26.332 402 29.747 26.250 113.Investments Cash and cash equivalents Deferred charges and accrued revenues TOTAL ASSETS 113 2.782 4.079 25.747 353 The following table contains the pro forma summary income statement of Pinguin and Lutosa supplemented with estimates relating to the impact of the acquisitions of the activities of Padley Vegetables and Salvesen Foods.800 25.Issued capital Share premiums Consolidated reserves Cumulative translation adjustments Minority interests AMOUNTS PAYABLE IN MORE THAN ONE YEAR Provisions relating to pensions and similar rights Other provisions Financial debts .504 3.111 4.828 4.215 70.367 14.560 144.147 1.Financial leases .600 2.

586 On the assumption that the turnover of the acquired activities of Padley Vegetables and of Salvesen Foods under IFRS are at the same level as under UK GAAP then the turnover of the pro forma consolidation of Pinguin and of Lutosa has been raised by the acquired activities from Padeley Vegetables and from Salvesen Foods by an amount of 442.301 -15.All amounts in thousands of EUR Pinguin Group including Lutosa Group IFRS CONSOLIDATED PRO FORMA INCOME STATEMENT 31/12/2006 CS Foods UK GAAP based Padley Vegetables UK GAAP based CONTINUED ACTIVITIES Revenues Operating result (EBIT) Of which: a) depreciation and amortization b) negative goodwill included in result 330.1 must be taken into account.828 thousand euro.156 65. When interpreting this amount the limitations described under 7.153 1.073 -514 1. 247 .147 46.714 7.961 1.9.654 -1.