Annua l fin a nci a l r e p o r t

CONSOLIDATED K E Y FIGURE S

Consolidated key figures: IFRS income statement (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)
Sales	832,812	483,564
Operating income	859,094	473,968
Operating cash flow (EBITDA)	39,234	26,167
Operating profit (EBIT)	3,349	7,323
Recurring EBITDA (REBITDA)	53,288	24,985
Recurring EBIT (REBIT)	20,023	6,436
Financial income	2,156	2,708
Financial charges	-26,804	-7,388
Net profit after taxes	-14,055	2,755
Earnings per share: part of the Group (in €)	-1.14	0.26
Earnings per share (diluted): part of the Group (in €)	-1.14	0.26
Ratios
EBITDA / Operating income	4.6%	5.5%
EBIT / Operating income	0.4%	1.5%
Consolidated key figures: IFRS statement of financial position (in thousands of €)	31/03/2012	31/12/2010
Fixed assets	279,867	188,301
Current assets	398,978	231,936
Statement of financial position total	678,845	420,237
Equity (incl. non-controlling interests)	171,400	138,714
Non-controlling interests	1,819	1,960
Liabilities	507,445	281,523
Statement of financial position total	678,845	420,237
Working capital	179,235	100,053
Net financial debt	198,891	66,796
Ratios
ROE	-8.2%	2.0%
Liquidity	94.9%	117.9%
Solvency	25.2%	33.0%

1 Amended presentation of the write-off on stocks as a result of the NRV test: we refer to note "2.3. Valuation rules".

We refer to the financial definitions at the end of this annual financial report

In order to allow comparison on an annual basis in future years, the following table shows the non-audited figures per 31 March 2012, which contain 12 months activities of PinguinLutosa, 12 months activities of the CECAB Activity and 12 months activities of Scana Noliko Group. However, in the consolidated financial statements Scana Noliko Group was only on 1/07/2011 and the CECAB Activity was only on 1/9/2011 included in the consolidation scope.

01/04/2011 - 31/03/2012 (12 months)
Sales (in millions of €)	841.2
REBITDA (in millions of €)	59.1
Net Financial debt/EBITDA	4.7

Preface 2
Outlook 2012 6
Operational developments 8
PinguinLutosa product portfolio 18
Sustainability 22
Human resources: people 26

Consolidated annual report of the Board of Directors 32
Corporate Governance statement * 46
Information for shareholders 78
Consolidated financial statements 86
Notes to the consolidated financial statements 93
Statement from the responsible persons 182
Statutory auditor's report on the consolidated financial statements 184
Condensed statutory accounts of the parent company PinguinLutosa NV, according to Belgian accounting standards 188
Financial definitions 198

Preface

2011 was a truly transitional year for PinguinLutosa, a year in which it underwent a genuine metamorphosis. The Group was substantially expanded through the acquisition of the Scana Noliko Group in July 2011 and the acquisition of the deep-frozen vegetable activities of CECAB (´CECAB Activity´) in September 2011. The shareholder structure was further strengthened by the arrival of Gimv and Agri Investment Fund (AIF). A new divisional structure was introduced featuring three full-fledged divisions, so that now there is a canning division alongside the earlier deep-frozen vegetable and potato divisions. In order to allow all of the divisions to operate in parallel, the 2011 financial year was exceptionally extended to 15 months, so that henceforth the Group´s financial year will run from April 1st to March 31st.

The consolidated sales amounted to €832.8 million over this period.

The past financial year was one with 2 faces. In the first half of the year, the potato division was confronted with sharply-increased raw material costs. Customers were reluctant to accept the unavoidable rise in sale prices, resulting in volume loss and insufficient fixed cost coverage. Then, with the arrival of the new harvest, the situation changed completely - in the positive sense. It proved to be an excellent harvest of high quality, so that raw material prices fell significantly and the margins recovered strongly.

During the first 9 months, the deep-frozen vegetable division was confronted with excessively low sale prices at the same time that raw material costs had increased. Another problem in the first half of the year was that there was insufficient availability for certain vegetables due to the previous year´s limited harvest. A normal harvest and the start of the new selling season in October provided for a recovery, because the downward price spiral could be reversed.

Within the deep-frozen vegetable division, it was above all the results from operations in the United Kingdom that proved disappointing. To respond to this it was decided to introduce a restructuring plan, to make changes in the management and to accelerate the closure of one of the sites. These steps should be enough in order to become profitable once again in the current financial year.

It was also a year that had significant non-recurrent expenses with in addition to the restructuring costs for the factories in the United Kingdom - the accounting treatment of the acquisitions and the acquisition costs.

The reduction in the operating result is primarily attributable to the weak first three quarters and the non-recurrent expenses. Pinguin-Lutosa saw the results rise in each of its three divisions since the fourth quarter of 2011, thanks to more favourable market conditions for both purchasing and sales as well as the good operating returns in the factories.

The acquired activities have done well since forming part of the Group and they constitute a true strengthening for PinguinLutosa in terms of the results and their stability.

The financial result was very hard-hit by the financing costs for the acquisition of the Scana Noliko Group, the refinancing in July as well as by negative results of the valuation of our interest and exchange rate hedgings.

Over the past financial year €36.4 million were invested, including €10.2 million in the expansion of capacity, in quality and innovation. At the same time further work was done on comprehensive cost control and cost reduction in all sites.

More work was also done in 2012 on bolstering the Group's profitability. Quality, sustainability and operational efficiency are and will remain the strategic pillars.

In the coming 18 to 24 months, the highest priority will continue to be placed on integrating the CECAB Activity into the deep-frozen vegetable division so as to bring about an improvement of the margins. In addition, the measures taken for better profitability in the United Kingdom will continue to be implemented, with a strict focus on cost control.

As a result of the acquisition of the Scana Noliko Group, further work is being done to achieve synergies and exchange the best implementation practices.

2012 will therefore be a normalised year in which each of the acquired activities will contribute positively for a full year to the results.

Outlook 2012

The past year was a transitional year. The deep-frozen vegetable division was substantially expanded through the acquisition of the deep-frozen vegetable activities of the CECAB Group. Moreover, a whole new division was created through the acquisition of the Scana Noliko Group, so now there are three rather than two divisions.

Many projects were launched over the past financial year and the organisation and management structure was adapted to accommodate them. For 2012 PinguinLutosa wishes to build further on this basis. Synergies and cost savings are being sought and will be closely monitored, without however restricting the dynamics and the independence of each division or site.

Deep-frozen vegetables

2011 was a weak year in which above all of the performances of the deep-frozen vegetable division were below par. However, the necessary measures were taken in order to restore the results once again.

The necessary price increases were obtained in 2011 for the new selling season which runs until the third quarter of 2012. In 2011 the world was once again confronted with a financial crisis that even further undermined the general economic situation. Consumers are paying greater attention to an optimal price-quality ratio, and deep-frozen vegetables are a perfect response to this demand.

At present no forecast can be given for the period after October 2012, since it is still too early to concretely assess how the harvests will turn out, and the evolution of the sales margins largely depends on the sowing and harvesting yields. PinguinLutosa is striving to further restore and maintain the margins. Given that the cost basis remains stable to increasing, the current sale price levels must at least be retained.

PinguinLutosa is proceeding on the assumption of rising sales volumes. Because the greatest share of the sales is exported, Pinguin-Lutosa is naturally subject to exchange rate fluctuations. The weakening of the euro compared to the British pound (GBP) and the American dollar (USD) can open up opportunities for further export growth. On the other hand, this also means that PinguinLutosa will be confronted from continental Europe with added competition for its operations in the United Kingdom.

In the deep-frozen vegetable division a joint production plan was drawn up under which productions were assigned to the best site in light of the "full cost" and the "cost to serve" of the customers of this division. A number of products will therefore no longer be produced in our sites in the United Kingdom, but instead will be processed and supplied from other sites, such as Poland. This requires careful follow-up and will be favourable for the results of the entire division.

Potatoes

The outlook is good for the potato division as well. In contrast to the deep-frozen vegetable and canning divisions, in the new selling season as of October the sector was confronted with falling sale prices. This was the consequence of the substantial decrease in raw material costs (potato prices) as of June 2011. However, it proved possible to maintain the margins.

The evolution in potato prices will be decisive for the pricing of the new contracts in September/October 2012. The decline in the volumes sold as a result of the pricing policy used by PinguinLutosa has stopped and the sales volumes are rising once again, indeed to such an extent that it is expected that the lost volumes will be completely recuperated in 2012.

Production is being maximised so as to draw full benefit from the low potato prices. This will remain the case until the new harvest in June 2012 and will continue to contribute positively to the results.

The size of the harvest and its quality determine the evolution in the price of potatoes, which in turn is decisive for the pricing of the new contracts in September/October 2012. No firm predictions can be offered about this yet.

Canning

For the canning division, a stable year is expected during which the production and storage capacity will be further expanded in order to meet customer needs and be able to respond to specific market opportunities.

Also in the future certain productions will be exchanged between the canning division and the deep-frozen vegetable division in order to further increase efficiency and optimise capacity utilisation. Such cooperation between the divisions will make it easier to deal with supply shortages or surpluses within the Group, which will further improve relations with the farmers.

Operational developments

Deep- frozen vegetable and convenie nce activities in Belgiu m

The harvest and the production.

For most products, the harvest in 2011 was normal, and so no shortages are expected for most vegetables. The capacity within the industry was significantly expanded, with PinguinLutosa investing in a new spinach and bean line in Belgium, which was commissioned as of the start of the new production season.

The production (over 15 months) in the Belgian sites amounted to 97,028 tonnes. This is 16.0% more than the comparable period in the previous year. This rise can be explained by the increased production quantities as a result of the normal harvest and by the higher quantities that were supplied by the CECAB Activity.

The move of the deep-frozen vegetables production activity from Langemark to Westrozebeke went smoothly. Langemark is now a site solely for convenience activities and is also used as a bulk warehouse for frozen vegetables awaiting packaging.

This decision allows PinguinLutosa to exercise even better quality control, it avoids investments in Langemark and permits savings to be achieved on overhead costs because certain duplicated costs can now be avoided.

For 2012 a common production budget was drawn up with the sites of CECAB in Comines (France), whose activities were completely taken over as of 1 September 2011. This will permit PinguinLutosa to further optimise the lines at the Westrozebeke and Comines sites because each site can specialise in certain products. At each of the sites a significant increase in the produced quantities is foreseen for 2012, and the necessary investments were made for this.

The convenience activities enjoyed strong growth over the past financial year, which meant a sudden and rapid evolution towards virtually full capacity utilisation. It is expected that this excellent utilisation will continue throughout 2012, with the product mix continuing to change. A strategic reorientation of the convenience activities led to the decision to discontinue ready-to-eat dishes. These products did not generate the desired margins and they made the production and planning very complex. The focus will therefore be entirely oriented on the other convenience activities, i.e. the coated products (e.g. pan vegetables, stir-fries, etc.), vegetables with sauces and purées for soups and sauces. The layout and the size of the production lines will be adapted in order to further expand the available capacity and thus facilitate the expected growth.

The weather conditions in the spring of 2012 were unstable and cold. That was good for the consumption of deep-frozen vegetables, but also had a negative impact on the supply of fresh vegetables.

The cold dry winter was followed by a very wet period. This made the sowing of the vegetables significantly more difficult. The consequence can be that certain vegetables now follow faster after one another or even that different vegetables will have to be processed at the same time in the summer, which might cause capacity problems.

The price negotiations for the vegetables for the new season were concluded at the beginning of 2012 and proceed on the assumption of stable prices for most vegetables, with an increase in the purchase price for beans and carrots.

Supply chain

An optimal supply chain is required in the highly competitive deepfrozen vegetables market. In Belgium PinguinLutosa uses a fullyautomated warehouse for the finished goods. The overflows are received in external warehouses.

Over the past year, the cost structure and the level of service were further optimised by our own internal specialists.

In 2011 important steps were taken to optimise and further centralise the internal supply chain. As of 2011, all warehouses of the division and the supply chain are centrally managed from the Westrozebeke site. This centralisation results in a better utilisation of the warehouses and the production, so that the amount of external storage can be reduced.

Packaging activities

136,141 tonnes were packaged over the past financial year (15 months). In 2011 (12 months), the packaging activities were 5.3% lower than in the comparable period of 2010. This decline is explained by the fact that the volumes sold in that period were lower for Belgium. The expected increase in 2012 of the volumes sold and further optimisations will lead to a sharp rise in 2012. In the first 3 months the packaging activity was 3.1% higher than last year.

Internal organisation and integration

The necessary attention was devoted last year to the further integration of the commercial activities of ´Pinguin´ and ´Lutosa´. The focus here lies primarily on logistical operations and ´cross selling´ opportunities, especially for the distant export regions. Each division has its own commercial structure with professional specialists who can best maintain and expand the segmented commercial relations. For Europe one can therefore say that the sales of both divisions are handled by their own specialists. The foreign sales offices, by contrast, offer the complete range. There work is done in a fullyintegrated manner, so that the representatives sell both potatoes and vegetables and so there is no segmentation. The departments of the deep-frozen vegetable and the potato divisions responsible for credit control were centralised and integrated.

The transfer to SAP® in Lutosa in 2011 means that Pinguin and Lutosa are now working with a single common IT platform, which makes exchanging information a great deal easier and further increases the efficiency of the operations.

Deep- frozen vegetable activities in t h e Unit ed Kin gdo m

The harvest and the production

Climatological conditions in the United Kingdom during the past year ensured that normal harvest yields could be achieved, yet the supply was capricious and irregular. As a result there was a long production season with lower yields, which had a negative impact on the results in the period.

Due to the weak results it was decided to close the Bourne site sooner than initially planned and to consolidate the operations on the sites in King´s Lynn and Boston.

The anticipated production in the United Kingdom in the past year was not in equilibrium with the local demand specifications. The demand pattern, in part due to the economic situation in the United Kingdom, has changed, with more consumer attention being paid to a good price/quality ratio, whereas in the past the primary orientation was on the British origin of the products.

As a result of closing the site in Bourne and reallocating certain vegetable types to other sites in Europe, the production in the current financial year will be less than in the past years. The cost structure was adapted to this reality.

An important investment programme was completed in 2011, under which a new 16 tonnes/hour line was installed for peas, beans, root vegetables and rice. This line was commissioned at the start of the new pea season in 2011.

The climatological conditions were comparable to those of Belgium, so that the pea harvest this year will begin significantly later than in 2011.

Supply chain

In 2011 the focus continued to be placed on operational improvements and savings in the logistical operations, above all in the fully-automated warehouse in Wisbech. Along with operational improvement, greater attention was also paid to the control environment of the logistical operations. In the past year, own storage of deep-freeze warehouses on the King´s Lynn site was significantly reduced as a result of starting the activities for building a supermarket on a part of the grounds that were formerly rented by us. Offsetting this, PinguinLutosa in 2010 received a compensation that was booked under extraordinary income. These storage facilities had to be emptied. Some of these stocks are now being kept in the fully-automated warehouse in Wisbech that is operated by Partner Logistics.

As of 1 April 2012 the site in Bourne is completely closed, so the bulk stocks that were stored at that site are now located in King´s Lynn. These stocks will be completely sold off by the start of the new season.

Packaging activities

The packaging activities were at the same level as in 2010, in line with the ´third party´ sales that also remained stable. The packaging investments are being centralised at the King´s Lynn site, where PinguinLutosa has a modern, high-performance packaging hall that is supplied entirely automatically.

Internal organisation and integration

The 2 remaining factories (Boston and King´s Lynn) are completely focused on the production of deep-frozen vegetables. In the United Kingdom, PinguinLutosa does not have a production facility for potatoes, but the United Kingdom is a very important market for both the deep-frozen vegetable and the potato divisions.

Until the end of 2011 the sales teams of both divisions worked from the same location in the United Kingdom, although the British potato division retained its sales office in St Ives. Most of the internal sales and administrative activities were also centralised and integrated in King´s Lynn. Given their nature, the differences in market approach and commercial strategy, it was decided in 2012 to once again allow the sales teams to pursue their own path according to product specialisation.

In 2012 more work will be done on further optimising and making more intensive use of the possibilities of the existing ERP package in Belgium, and one has begun with the implementation phase so that the same platform can be used in the United Kingdom as well.

Exchange rates

A weak pound/strong euro ratio is good for the competitive position of the deep-frozen vegetable division in the United Kingdom and bad for importing potatoes and ready-to-eat dishes from the continent. In 2011, however, the euro weakened further relative to the British pound, and this trend is continuing in 2012, thus putting pressure on the sales prices for deep-frozen vegetables in the United Kingdom. The continuation of a weak euro/strong pound ratio (primarily as a result of the problems in the eurozone) can have a negative impact on our competitive position in the United Kingdom. PinguinLutosa has chosen to remain focused on products of British origin as a response to the import of deep-frozen vegetables from the continent.

Deep- frozen vegetable and convenie nce activities of CECAB (´CECAB Activity´)

Through the acquisition of the activities, the Group expanded by a total of 7 factories, including:

• 2 in France
• 4 in Poland
• 1 in Hungary

As of 1 September 2011, these activities were added to the deepfrozen vegetable division. The seasonality is similar to that of the deep-frozen vegetable division, so that the focus lies on the period May-November. The past production season was therefore partly implemented under CECAB and partly under PinguinLutosa.

The harvest and the production

The weather conditions in Moréac over the past year were comparable to those of Belgium. The weather conditions in Poland and in Hungary were good to normal.

Thanks to the favourable climatological conditions in Poland and Hungary in 2011, both countries saw a substantial increase in the processed quantities. These processed quantities are being marketed by the PinguinLutosa Group.

The production plan for 2012 was drawn up as a single whole from the central sales budget for all sites of the deep-frozen vegetable division. The production is assigned on the basis of the comparative cost prices of each site.

Thanks to the favourable cost structure in Poland and Hungary in terms of wage and raw material costs, production will be significantly expanded there in 2012 as well. The production budget for broccoli and peas will be further expanded in Poland, with a part of the production being shifted from the UK and Belgium to Poland. For this a spinach line was moved within the group to the site in Baja and a deep-freeze tunnel was moved within the group to the site in Elk for peas. The Dabrova site will see a substantial increase for broccoli.

The production of corn will also be further expanded in Hungary, which - along with the factory in Aquitaine - will assure the complete supply for the entire PinguinLutosa Group.

With the acquisition of the 4 factories in Poland, PinguinLutosa above all succeeded in making itself a great deal less dependent in sourcing, given that a number of products (such as broccoli and onions) are processed in Poland. It should be especially noted that, through the deal with CECAB, PinguinLutosa is now becoming a major fruit producer.

The CECAB Activity in 2010 represented around 150,000 tonnes. In 2011 this was 172,000 tonnes over the full calendar year, whereby it should be noted that the CECAB Activity forms part of the Pinguin-Lutosa Group only as of 1 September 2011.

The increased production will be marketed primarily on the German and the Eastern European markets. In addition there will be replacement of existing sales which in the past were purchased from third parties.

In the spring of 2012 Poland was struck by a very late frost wave that destroyed a part of the fruit harvest. The weather conditions in Moréac are comparable to those in Belgium. The conditions in Hungary in 2012 have been normal until now.

The price negotiations for the French operations were concluded with a result that is comparable to that in Belgium, with carrots and cauliflower becoming more expensive.

The Polish price negotiations have also led to stable prices for the procurement of vegetables.

In Hungary price increases had to be accepted above all for corn and peas. These increases are mainly prompted by the increased energy prices and wage costs resulting from the government policy conducted in Hungary.

Supply chain

The Polish factories are a good base of operations for Poland, the Scandinavian countries, Russia and the Baltic States. The Polish production is today largely attuned to the demand from Germany. For this since 2012 a rack-storage has been rented and operated by the site´s own personnel in Manschnow, along the border between Germany and Poland.

Through the acquisition of the factory in Hungary, the Group´s presence here opens up primarily commercial prospects to countries of Central Europe, Romania, Bulgaria and the countries of the former Yugoslavia. The factory possesses sufficient owned and leased storage.

In 2011 a new bulk storage facility was commissioned on the Moréac site, expanding the site´s own storage capacity by 10,000 pallet places.

Packaging activities

Each of the countries (Poland, Hungary and France) has its own packaging capacity, with differing levels of automation. The sites in Poland and Hungary require more manual work. In the past year the packaging activities were significantly expanded with the purchase of the packaging installations in Oderland (Germany). As a result, the packaging capacity can be expanded by 20,000 tonnes on an annual basis. This will make possible the planned increase in production (and sales) during the current financial year.

Internal organisation and integration

In 2012, attention will above all be focused on further optimising the spread of the production amongst the different sites, the allocation of the investment budgets amongst the sites and the further standardisation of the KPI and the management reporting for the various sites.

The Group holds significant stocks in each of the countries, so it is very important to have a central coordination and monitoring in order to thus link group sales to available stocks in individual countries. Major improvement projects were launched on this level over the past financial year.

Potato activities

The harvest and the production

A potato season, just like a vegetable season, always straddles two financial years. The season begins in July with the early potatoes, which are processed immediately after harvesting. Then comes the harvest of ware potatoes in September. Some of the ware potato harvest is immediately processed. The rest is kept in storage silos and, using those stored potatoes, the production continues until June of the following calendar year. The early potatoes are planted in March and April and are dug up from the end of June. This is done primarily on fields controlled and managed by the potato division. The ware potatoes are planted in the same period, but have a longer growing period (150 days) and are dug up as of September.

The potatoes processed during the first six months of 2012 thus came from the 2011 harvest. It was characteristic of the year that there were enough potatoes and that the harvest consisted above all of larger potatoes of good quality. The preceding potato season had been characterised by the fact that the harvest primarily consisted of small potatoes of lesser quality and lower yield in the factory.

The past year was one that saw both historically high and historically low purchase prices for potatoes. The prices of potatoes on the free market peaked at the start of the new season, in order to subsequently evolve towards rock-bottom prices thanks to the good harvest. It is expected that this situation will continue until June 2012.

The planting period in March-April 2012 wasn´t a good one for potatoes, with the weather conditions being too wet and too cold. This means that the planting had to be done over a longer period. The first finding is that the growth pattern is irregular.

Another phenomenon is that, in general, the cultivated area within the EU was reduced by several percent, which will also limit the oversupply. On the international market, palm oil and sunflower oil also remain expensive. This could only be partly offset via long-term contracts for both types of oil. During the past year PinguinLutosa joined the RSPO (Roundtable Sustainable Palm Oil), which gives a guarantee that the palm oil comes from sustainable agriculture.

An important trend is the finding that the Belgian retail sector would like to see a complete switch from cooking in palm oil to cooking in sunflower oil. A 100% changeover is not possible. Sunflower oil is more expensive than palm oil. The magnitude of the price difference depends on the sunflower harvest.

The production in 2011 was lower than in 2010. In response to the very expensive raw material in the first half of the year, the sale prices were raised substantially, which led to a number of contracts not being renewed. This explains the decrease in the produced quantities. The lost contracts were won back in 2012, so that the production will once again rise to 350,000 tonnes on an annual basis.

Impact of the harvest on the margins

Given the inferior weather conditions during the planting period in 2012 and the reduction of the European area in compensation for the very inexpensive potatoes of the past season, one can proceed on the assumption that the raw material cost will rise as of September/October 2012.

This means that the expectations for the sale prices for the new selling season are rising once again, although the price increases will likely not be of the same magnitude as 2 years ago.

We are striving for an ideal mix of contract purchases and purchases on the free market.

Supply Chain

In order to meet the increasing overseas demand, at the end of 2010 a night shift was introduced in the loading department at the Leuze-en-Hainaut site. This led to a higher level of service to the customers, faster response times and it is also producing further optimisations of the container loads and the container traffic. These are necessary in order to permit overseas sales to further increase smoothly.

In the past year we stopped using the traditional method of working via freight forwarders, and began working directly with the shipping companies, with whom - given the rising volumes - partnerships can be initiated. On the basis of the expected sales and the destinations, the volumes (number of containers) and the shipment routes are established for the entire year. This ensures that better prices are received and that any price increases are only implemented later.

This in-depth knowledge possessed by all of the logistical ´back office´ employees constitutes a competitive advantage. Along with the excellent quality of the products, we are striving for top quality in the provision of services, and this ´added value´ will also be used as a sales argument in the future.

Internal organisation & integration

The shift to SAP® in the potato division, which was intensively prepared in 2010 and was operational by the beginning of 2011, has increased efficiency, since all PinguinLutosa companies in Belgium are now running on one and the same IT platform. The implementation of the SAP® system in the potato division was made possible in part by the ´key users´ from the deep-frozen vegetable division, who helped train their colleagues and came to their aid where necessary. This common platform increases the visibility.

A ´shared service center´ was implemented with which the accounting is now centrally administered by a single team for the two divisions jointly.

For both the potato and the deep-frozen vegetable divisions, 2012 will see the implementation of an ´automatic scanning´ project. In addition, the IT services were further expanded and an attempt is being made to guarantee in-house support for the most important sub-areas. This will reduce dependency on the external partners and generate savings.

The canning activities

The harvest and the production

The past year's harvest was normal, so that the programme could be almost fully achieved. In agricultural terms, last year was a good one. The new production season began as usual in May-June with the processing of peas, followed by carrots, broad beans,… For the 2012 harvest, the weather conditions in the second quarter of the calendar year are important because that is where the planting and sowing period is situated. The constant rain primarily led to a delay in the sowing of common beans, which will lead to a shortage in the early harvest of beans. On an annual basis, however, it is still too early to draw any conclusions, given that we will be striving to process more in the post-harvest (November) in order to still attain the annual production target.

In the April-June period, the processed quantities are the result of the end of the previous season and the start of the new one. An early start to the new season and a late conclusion of the previous one lead to a good utilisation and spread in this period. Due to the climatological conditions, the new season began later this year than it did last year, which means that less was produced in the April/June period than had been forecasted. This will shift the centre of gravity of the production to later quarters.

For most vegetables, the negotiations with the farmers have led to a stabilisation of the raw material prices at their current levels. The primary packaging concerns glass jars and cans, both of which are demonstrating rising prices in the international markets.

Supply chain

The Scana Noliko Group works primarily with small to mediumsized transporters. Given that the transport of canned goods is a complex activity, the transporters are trained by our own logistical specialists.

In recent years, the Scana Noliko Group has regularly invested in the construction of its own storage facilities on the sites in Bree and Rijkevorsel. The Scana Noliko Group is currently studying the construction of an extra storage space for 14,800 pallet places. This move is prompted by the rising demand. The philosophy of the Scana Noliko Group has always been to temporarily compensate for storage shortages through external storage. When the shortages become continuous, it invests in its own storage capacity.

The Scana Noliko Group also regularly examines the possibility via a collaboration with its can suppliers - of having the cans welded on the Bree site, and thus bringing the cans directly into production. This would make it possible to reduce the storage space for cans, because storing empty cans takes up an enormous amount of room.

Packaging activities

The Scana Noliko Group has flexible automated packaging lines. As part of its strategy the division wishes to be a "cost differentiator". This entails a high degree of flexibility. Thus on an annual basis the Scana Noliko Group has to make over 40,000 changes in the packages. These involve the form, content, volume, labels,… of the glass and tin packages. This is only possible if it is done at the lowest cost and with maximum automation. Therefore, each of the 7 packaging lines is equipped with the best available technology for packaging and quality control.

The packaging is not done immediately after the filling but only at the moment when the end customer is known. This substantially increases the flexibility, but also makes it possible to perform an additional quality control via gamma bridges and X-rays, because in its packaging activities as well the Scana Noliko Group strives for perfect quality.

Almost all sales are made in Europe. In addition there are a limited number of customers in Canada and the USA, primarily for vegetables. The geographic range in terms of sales territory is roughly a radius of 750 km around the company. The Scana Noliko Group is forecasting a further increase in the sales volumes. Within Europe the Scana Noliko Group expects stable to slight growth for Southern Europe and the Benelux.

In Germany and France the Scana Noliko Group currently sees itself confronted with somewhat less favourable market conditions and intense competition. Further growth is expected in Scandinavia and the United Kingdom. The latter is partly determined by the exchange rate between euro and British pound. As an exporter, the canning division - unlike the deep-frozen vegetable division - benefits from a weaker euro.

Internal organisation and integration

While it is true that the Scana Noliko Group is directed as a separate division, many integration projects have already been launched. On the production level, the deep-frozen vegetable and canning divisions work together in order to eliminate surpluses and shortages. A large share of the supply of spinach in the deep-frozen vegetable division came from the farmers of the Scana Noliko Group. Salsify is another vegetable on which the divisions work together, and where for almost the entire requirement of PinguinLutosa the first processing step takes place at the Scana Noliko Group, after which the deep-freezing is done at PinguinLutosa.

Another successfully concluded integration project involved the purchase of intermediate raw materials (vegetables) for the convenience activities of the Scana Noliko Group. Instead of 5 external suppliers as were used in the past, the supply is now almost entirely assured by PinguinLutosa.

Sales are completely directed from the headquarters in Bree for the entire export, with the exception of the sales office in the United Kingdom.

Commercial selling of canned goods requires its own special approach, demanding very thorough product knowledge as well as commercial knowledge but - more than in the other divisions - also a very good mastery of the technological characteristics and possibilities.

The collaboration with the PinguinLutosa Group began immediately after the acquisition. In a first phase, exchanges of commercial contacts began. The actual sales process takes place via the canning division´s own employees, given the above-mentioned complexity. This approach has already led to the start-up of a number of canning projects at customers of the other divisions.

Sales network and marke ts

Further integration of Pinguin & Lutosa

The further integration of the sales teams of Pinguin and Lutosa was rolled out in 2011 and is still going on, so that today the sales offices are being fully integrated. PinguinLutosa is thus now active in 110 countries via 18 sales offices. Both deep-frozen vegetable and potato products are sold in each zone.

In addition to the important sales office in the United Kingdom, the Scana Noliko Group works primarily from the headquarters in Bree. Questions of customers from the other divisions are constantly being exchanged and further followed up and handled by the divisions.

The integration within the CECAB Activity was fully underway as of day 1; this was also necessary, because the deep-frozen vegetable division has a centralised sales and production planning. The CECAB Activity constitutes an integral part of the deep-frozen vegetable division. The results of the CECAB Activity are thus largely determined by the activities of the other sites of the division and cannot be interpreted separately.

During the past year, a new sales office was opened up in Indonesia and the presence in Australia was further strengthened. In the current financial year the Middle East will be the focus of intense activity by staff from the Cyprus office.

As a result of the acquisition of the CECAB Activity, the group now also possesses a large sales subsidiary in Brazil (Sao Paulo) that is entirely focused on vegetables. This office has succeeded in building up a very solid market share with primarily retail clients, with the added value being generated above all in the area of logistics and supply chain.

Traditionally, the canning and deep-frozen vegetable divisions are primarily oriented on the European markets, while the potato division in addition also scores strongly in Latin America, Africa, Australia, Japan and Southeast Asia. The further retention and strengthening of the relations with the customers in these zones thus forms an important action item for 2012.

The potato division expects strong growth in the BRIC countries over the coming years. The expectations for Europe are more stable.

The deep-frozen vegetable division will also further internationalise itself via the joint deep-freeze transports, where a container can be optimally used for a combination of vegetables and potato products. The French deep-frozen vegetable market had a difficult time last year, due to the more intense competition on the French market, which automatically generates margin pressures. For this reason, a number of contracts could not be renewed.

In the past financial year, southern Europe was confronted with dwindling numbers of tourists and a financial crisis that flared up once again, resulting in falling demand.

Central and Eastern Europe, on the other hand, enjoyed excellent development.

PinguinLutosa is active in Africa where it has developed a solid foothold, thanks to a targeted policy of supplying deep-frozen vegetables together with potato products. Some of the countries are handled from Belgium, while others are handled by the sales alliance of the Group in South Africa. After an initial drop in volumes after the World Championship football, they are now rising again in the potato division.

Over the years Japan has developed into an important territory for PinguinLutosa, whose stringent quality policy hasn´t done it any harm there. Responding in a targeted way to the very high quality requirements has not only made it possible to develop an enviable position in Japan, with PinguinLutosa remaining the largest European importer of potato products. These exports have also signified a constant challenge to further perfect its own quality systems. This exporting success hasn´t escaped the notice of other competitors, and so last year saw greater competition than in the past. However, PinguinLutosa is in a good position to respond to this effectively.

PinguinLutosa is active with a number of niche products and specialities on the North American market, where convenience products score particularly well. The evolution of the dollar vis-à-vis the euro plays a role in determining the success of this market, and this is also true for the other countries in North and South America.

Contrary to what many might think, traditional canned goods cannot simply be exported to Africa, South America or Asia just like that. For these regions one must engage in tropical canning, which requires a different sterilisation process. Another frequent obstacle to long-distance exporting is the local food safety legislation. Scana is a company that orients itself on the European regulations and hence is perfectly positioned to supply the European market, an area where PinguinLutosa has extensive experience and expertise. This knowledge and expertise will continue to be exchanged and shared with the Scana Noliko Group, so that the sales region can be further expanded in the future.

1 8 PinguinLutosa ANNUAL REPORT

C ustomers

Traditionally, PinguinLutosa has been active in 3 market segments: ´Food Retail´, ´Foodservice´ and ´Food Industry´.

While the deep-frozen vegetable division is more oriented on ´Food Retail´ private label, ´Foodservice´, primarily under the ´Pinguin´ brand, and an important component as specialised supplier to the ´Food Industry´, the profile of the potato division is somewhat different: a much larger share of ´Foodservice´, under its own ´Lutosa´ brand, and a smaller share in ´Food Industry´.

Like the other divisions, the canning division is also active in these 3 segments. The emphasis of this division lies overwhelmingly on the retail segment. This segment, just like the deep-frozen vegetable division, is primarily processed via private labels.

Food Retail

With its organisation, market knowledge, image, cost consciousness and commercial relations, PinguinLutosa remains a major player on the European level. In the deep-frozen vegetable and canning divisions this takes place primarily as a private label partner for the retailers.

Given that the position of the Lutosa brand in the Belgian ´Food Retail´ is not insignificant, here too more investments were made in promotional support and radio advertising. With the slogan "Schatjes van Patatjes" ('Darling Chips') Lutosa is a well-established brand throughout Flanders. This promotional support will be further extended during the current year.

In several emerging markets outside Europe, PinguinLutosa made some selective advances in expanding the ´Pinguin´ and ´Lutosa´ brands, often in combination with the collaboration of local Foodservice distributors who also deliver to smaller, independent supermarkets. This is being continued in 2012.

PinguinLutosa is well-positioned to offer both products with higher added value and "value" products. It cannot be denied that customers are modifying their spending patterns to keep up with the economic situation. PinguinLutosa can offer the complete range and thus respond to these changing trends in the retail sector.

More and more retailers are attaching importance to innovation in the range that is offered. Private label suppliers also have to play a role as innovators. Retailers not only want to sell their private labels on the basis of price differences, but also to compete with the known brands in terms of innovation. This is a good evolution for an innovative company like PinguinLutosa.

Foodservice

Both the deep-frozen vegetable division and the potato division have a strong presence in this segment. Even more than in the deep-frozen vegetable division, this is the segment that the potato division focuses on, and where the Lutosa brand will be further developed. In addition to price and quality, what is important here is that the customer can also be helped with regard to marketing and offered logistical solutions. Working together to make profitable growth possible is an important element. The collaboration often goes farther than the mere production and sale of the product. Due to the economic situation, this segment had some difficulty maintaining its position.

Food Industry

For an industrial purchaser PinguinLutosa is an attractive party because of the very broad range offered, the technical competencies of the sales teams and the possibilities for optimising the ´supply chain´. Important here is the constant quality guarantee that must be offered throughout the year.

PINGUINLUTOSA product portfolio

PinguinLutosa today offers a very broad portfolio of products:

Vegetables and vegetable mixes

The delicious vegetables, bursting with vitamins and taste, are easy to prepare and available throughout the year. The vegetable mixes of PinguinLutosa can be used to serve hearty and colourful creations in no time at all. The range goes from traditional vegetables and mixes such as peas, beans, cauliflower, soup vegetables, broccoli mix, etc., to more exotic and sometimes less familiar varieties: lotus root, rapeseed salad, baby corn cobs, king hua mix, etc. Most of the vegetables are available in different sizes and cuts (cubes, slices, slivers, etc.) depending on what they are to be used for. For the preparation of frozen vegetables, a variety of cooking methods are available, such as steaming, simmering, stir-frying, etc.

Aromatic herbs

Individually Quickly Frozen (IQF) herbs can be used to add taste to all of your dishes. In hot dishes, the soft-leaf herbs are only added at the end of the preparation. Other, woodier herbs are perfect taste-enhancers in stews. In cold dishes, the herbs are added during preparation, thus giving the aromas time to blend with the other ingredients. A sample of the range: parsley, chives, shallots, basil, etc.

Organic vegetables and vegetable mixes

PinguinLutosa offers an extensive range of organic vegetables to meet the demand for organic vegetables and environmentallyfriendly crops. These vegetables are primarily sold to industrial customers for further processing, for example to produce baby foods.

Fruit

PinguinLutosa does not process fruits at its own sites, but instead works with carefully selected partners. The selection and the harvest of the best varieties are done when the fruits are sweetest. Fruit from around the world, stored with care for the enjoyment. A sample of the range: strawberries, raspberries, blueberries, blackberries and red currants, berry mix, exotic fruit salad, etc.

Pasta and rice

IQF al dente pasta only needs to be defrosted or regenerated. They are ideal in combination with PinguinLutosa vegetable mixes or finished with the mini-portion sauces. A sample of the range: spaghetti, penne, farfalle, fusilli, etc.

White and yellow rice form part of the Group´s standard line. These ready-to-use products are always ready in just a few seconds.

Convenience cuisine

Convenience offers a wide variety of vegetable recipes and applications. There is an extensive selection of al dente vegetables, prefried and grilled vegetables, spiced vegetables or vegetables with sauce. The Convenience range also includes soups, sauces and prepared vegetables in mini-portions (such as red cabbage with apple or creamed spinach), prepared dishes in trays, vegetable mixes in steam pouches (for steaming in the microwave). In close collaboration with the customer, the R&D team creates all kinds of preparations to fulfil the customer´s taste requirements and preferences.

PinguinLutosa also offers a wide selection of potato products, ranging from the traditional chips to the most diverse specialities:

Frozen chips

These are pre-fried chips in various lengths and cuts, with or without the peel, with the possibility of a coating and suitable for Food Retail (e.g. the ´Belgian´ chips, Patat´Kids, crinkle cut, etc.), Foodservice and Fast Food Industry.

The different production methods (the potato division uses various types of oil: vegetable oil for the traditional products, sunflower oil for the oven products) make different ways of preparation possible: traditional-style in the deep-fryer, baked to be crunchy and healthy in the oven or heated up under the grill or in the microwave.

Potato specialities

These include an extensive range of specialities based on cut or grated potatoes or mashed potatoes:

• Pre-fried specialities based on cut potatoes (with or without the peel): cubes, slices, potato sections, Parisian potatoes, roast potatoes, etc.
• Pre-fried specialities based on cut potatoes with a coating of herbs (spicy and garden wedges).
• Mashed potatoes: natural or spiced, finished with olive oil, butter, cheese or herbs, ideal for retail, restaurants or the production of prepared meals.
• Specialities based on mashed potatoes: croquettes, duchesse, Pom´Pin, noisettes, etc. Nor have we forgotten the children, with fun potato shapes ('Alphabet letters', animals) or potato waffles.
• Pre-fried specialities based on grated potatoes such as the rösti with different ingredients (onions, bacon, vegetables, cheese, etc.).
• Potato gratins, pure potato slices with a creamy sauce or in combination with vegetables (gratin dauphinois or Tartiflette).

2 2 PinguinLutosa ANNUAL REPORT

Fresh refrigerated chips

In addition to frozen chips, the pre-fried refrigerated range is also growing strongly: here, too, there are various cuts and sizes available.

Flakes

PinguinLutosa produces potato flakes primarily for the Food Industry and Foodservice. The flakes are used in the production of instant mashed potatoes, gnocchi, as a stabiliser or as an ingredient for biscuits.

Organic potato products

In potato products PinguinLutosa also has a range of frozen organic chips and organic specialities: potato sections and natural mashed potatoes. In addition, organic potato flakes are also supplied primarily for industrial uses.

Over the past year the range was extended even further with the product line of the Scana Noliko Group, namely vegetables, fruit, potatoes and a sizeable offer of convenience products:

Vegetables

For years now the Scana Noliko Group has had an extensive range of carefully-selected quality vegetables. Freshness comes first: virtually year round fresh vegetables supply the production lines. The harvest period starts at the beginning of May with the first summer vegetables. In the following summer months and autumn the different harvests succeed one another, in order to bring the cycle to a close only in the early spring with the winter vegetables.

Fruit

The central location of the Scana Noliko Group is a major advantage not only in terms of logistics. The company also lies close to Haspengouw, one of the finest fruit-growing regions in Europe with an exceptional offer of apples and cherries. Apples form the basis for the fruit compotes and fruit purée variations, possibly supplemented with other types of fruit. Cherries in syrup and a wide offer of exotic fruits complete the range.

Potatoes

The Scana Noliko Group processes exclusively small, waxy potato varieties which are carefully-selected for their quality. A staggered supply ensures a constant offer of fresh potatoes virtually throughout the year. Almost all conceivable combinations are possible: peeled or unpeeled, in slices, in cubes or as whole potatoes. This is offered in several packaging options, such as glass jars and tin cans, all in a variety of sizes.

Convenience

The Scana Noliko Group has an extensive range of convenience products, including ready-to-use vegetable preparations, soups, dip sauces, cooking sauces and pastas. It keeps up with the most recent culinary and demographic trends in terms of taste and packaging.

Organic

The Scana Noliko Group is also actively responding to the increasing trend towards the use of organic products. For example, the majority of the range of vegetable, fruit and potato products are also offered in an organic variant. In addition, the Scana Noliko Group also offers a wide choice of organic dishes: organic soups, various ravioli and other pasta preparations and a number of sauces.

Sustainability

In addition to efficiency and an absolute focus on quality, sustainability and corporate social responsibility are important pillars on which the strategy of the PinguinLutosa Group rests. Corporate sustainability itself is defined as the art of harmoniously combining the three elements of people, planet and profit.

The Group's loyal participation in the Sustainable Entrepreneurship Charter (an initiative of the Flemish Government, Voka and the Provincial Development Agency) is used internally as a catalyst in order to draw up an overall action plan that is also subject to an external audit and commentary each year. In this way a contribution is made to a social environment that will offer coming generations the necessary opportunities and possibilities as well.

A number of concrete current action items are presented below:

Sustainable agriculture

For PinguinLutosa, everything begins with agriculture. Sustainable agriculture is therefore one of the most important pillars in our sustainability policy. Sustainable growing means engaging in practices that are economical, efficient, ecological and socially acceptable.

The Group´s agronomists immerse themselves in this professional area via projects with customers, suppliers and organisations within the sector. By disseminating their knowledge to the growers, they encourage and motivate the growers to incorporate sustainability in all aspects of their policy. Central aspects in this respect include: limiting the negative impact on the environment - such as nutrient and pesticide residues -, care for biodiversity and sustainable use of water and energy.

The exchange of knowledge amongst the agronomists from the different sites of the Group throughout Europe and an international network of growers allow the Group to disseminate information, so that successful and sustainable ideas can find fertile ground everywhere.

Water

Given the Group´s extremely intensive water consumption in the production processes, all of the production units have been equipped since day one with an optimal water purification installation and purified recovered water is used as much as possible within the limits of food safety and quality. In order to minimise the pressure exercised on the ground water by the production units in West Flanders, these sites increasingly use delivered drinking-quality water supplied from the potable water system (in collaboration with the Flemish Water Agency). Associated with this, in 2012 a practical study will be conducted at one of the production units in order to identify the possibilities for maximum re-use of the waste water from the water purification as drinking water, through the use of techniques such as ultrafiltration and reverse osmosis.

Energy

Given the nature of the Group´s production processes, all production units are major consumers of energy, and energy savings are very important not just in ecological but also in economic terms. In addition to the investments of the past few years in purchasing 100% green electricity and the optimisation of our own biogasfuelled motors with the CHP that is connected to it, in 2011 4,521 photovoltaic solar panels were commissioned at the production unit in Westrozebeke. With a total installed power of 1,031.75 kW peak, an annual average of 890,000 kWh is produced, which corresponds to the annual energy consumption of around 255 families!

Packaging materials

In close consultation with the Group´s suppliers of packaging materials, wherever possible actions are taken to change packaging material and reduce the quantity while maintaining optimal assurances of quality. For example, the packing film is being adapted per product line on the basis of the parameters of ink reduction and film thickness. Through a well-chosen layout and a thorough knowledge of the product application, the amount of ink used is being substantially reduced. These are important but essential steps towards a more environmental as well as a more cost-price efficient use of packaging materials. Also, the applicability of bioplastics for a number of product references within the group is being further studied within the context of an IWT project.

Carbon footprint

By studying the flow of goods and through collaboration with other frozen logistics companies, the Group is searching for ways to avoid unnecessary transport movements. The partnership of the Group with Partner Logistics Europe is a start for substantial CO2 reduction in goods distribution.

The processing of seasonal vegetables in the open air or fieldgrown vegetables from our own region also make a major contribution to CO2 reduction via the food chain. These vegetables are grown outdoors (no greenhouses), in the most fertile soils and in a naturally mild and precipitation-rich climate.

Since 2011 PinguinLutosa has engaged itself, together with 2 other companies from the sector, in a pilot project on ´multimodal´ transport. Specifically this involves the bundling of export flows in the direction of Northern Italy by rail. The logistical process within PinguinLutosa thus receives, alongside the conventional road and maritime transport, a third branch: train transport. This innovative logistical collaboration creates not just a costefficient solution, but also increases the service to the customers (punctual service) and on top of that results in a substantial improvement in the sustainability of the logistical processes (the carbon footprint of this route falls by +/- 50%).

Company strategy on the use of palm oil

In 2011 Lutosa (the potato division) became a member of the Roundtable on Sustainable Palm Oil (RSPO). Through its active membership, PinguinLutosa wishes to support the sustainable cultivation of palm oil, because Lutosa is convinced that sustainably-grown palm oil with the current demographic evolution will retain its place in future world food production thanks to the high yield per hectare. Lutosa has set as its goal to make maximum use of RSPO palm oil in potato products by the end of 2015, depending on its availability at a justified cost price. Through this project Lutosa wishes to take a clear and sustainable step forward together with its stakeholders.

Valorisation of secondary flows

A team of environmental experts is at work daily to devise ways to process the remainders of waste and secondary flows from the various production processes as ecologically and economically responsibly as possible. They are constantly on the lookout for new recovery methods and new sales markets. By sorting the various secondary flows very precisely, the remaining waste is reduced to a minimum and the flow for recycle or reuse increases. Wood, cardboard, metals, plastics, waste of vegetables, glass, etc. are collected separately by the personnel of PinguinLutosa.

human resources: people

PinguinLutosa is proud of the commitment of its employees. PinguinLutosa tries to create a healthy, green and safe working environment where the employees can develop, wish to give the best of themselves and where their contribution is appreciated and recognised. A process-driven approach with regard to ´continuous improvement´, guaranteed by means of well-functioning quality programmes active in the different sites, is continuously supplied with new ideas and/or proposals that focus on hygiene, efficiency, work safety, energy savings and ergonomics.

At the base of all this lies an oriented training programme devised by the management. In 2011 the primary focus was placed on the further development of a structured reception policy including the establishment of one mentor per position. Moreover, specific attention was devoted to the social skills of the managers and the experienced employees.

For the development of its dynamic prevention policy, PinguinLutosa involves all employees via participatory management and via an extensive communication on the floor. In 2011 this was further supported with a targeted awareness-raising and training plan that takes account not only of pure safety but also of the other facets of well-being in the workplace.

FINANCIAL REPORT 2011-2012

SUBJECT TO THE APPROVAL OF THE GENERAL MEETING OF SHAREHOLDERS OF THE 21ST OF SEPTEMBER 2012

AUDIT COMMITTEE 53
NOMINATION AND REMUNERATION COMMITTEE 54
ATTENDANCE 54
MANAGEMENT COMMITTEE 54
STATUTORY AUDITOR 55
REMUNERATION REPORT 55
TRANSACTIONS WITH RELATED PARTIES 58
INTERNAL CONTROL AND RISK MANAGEMENT 75
INFORMATION FOR SHAREHOLDERS 78
SHARES 78
SHARE TRADING EVOLUTION 78
TRADING VOLUME 80
CAPITAL STRUCTURE 80
SHAREHOLDER STRUCTURE 80
MAJOR CHANGES IN SHAREHOLDER STRUCTURE 81
ELEMENTS WHICH MIGHT HAVE AN IMPACT IN CASE OF
A PUBLIC TAKEOVER BID 82
CONTACTS 85

CONSO LIDATED FINAN CIAL STAT EMENTS 86
Consolidated income statement 86
Consolidated statement of comprehensive income 87
Consolidated statement of financial position 88
Consolidated statement of changes in equity 90
Consolidated statement of cash flows 92

1. G	ENERAL INFORMATION 93
2.	FINAN CIAL REPORTING PRINCIPLES93
2.1.	DECLARATION OF CONFORMITY 93
2.2.	NEWLY PUBLISHED STANDARDS AND INTERPRETATIONS WHICH ARE NOT
	YET APPLICABLE 93
2.3.	VALUATION RULES 94
	a) Consolidation principles 94
	(b) Foreign currencies 97
	(c) Segmented information 98
	(d) Non-current assets held for sale and discontinued operations 98
	(e) Intangible fixed assets 98
	(f) Goodwill 99
	(g) Tangible fixed assets 99
	(h) Leasing 100
	(i) Impairment of tangible and intangible fixed assets 101
	(j) Inventories 101
	(k) Financial assets 101
	(l) Trade and other receivables 102
	(m) Cash and cash equivalents 102
	(n) Equity instruments and interest-bearing liabilities: distinction 102
	(o) Equity instruments 102
	(p) Provisions 103
	(q) Employee benefits 103
	(r) Other financial liabilities: bank loans 103
	(s) Other financial liabilities: subordinated loans 103
	(t) Other financial liabilities: trade and other payables 103
	(u) Financial assets and liabilities: derivatives 104
	(v) Income taxes 104
	(w) Revenue 105
	(x) Finance income and costs 105
	(y) Non-recurring income and charges 106
	(Z) Events after balance sheet date 106
2.4.	CHANGES TO THE CONSOLIDATION SCOPE 106
	2.4.1. Changes to the consolidation scope: accounting year ending on 31
	March 2012 106
	2.4.2. Changes to the consolidation scope: 2010 113

4. S	EGMENT REPORTING 114
5. NOT	ES TO THE CONSO LIDATED INCOME STAT EMENT	120
5.1.	SALES 122
5.2.	OTHER OPERATING INCOME 123
5.3.	OPERATING CHARGES 124
5.4.	OPERATING RESULT (EBIT) 125
5.5.	FINANCIAL INCOME AND EXPENSES 128
5.6.	INCOME TAXES 129
5.7.	EARNINGS PER SHARE 130

ISSUED CAPITAL, SHARE PREMIUMS AND












	INTANGIBLE FIXED ASSETS 131 GOODWILL 133 TANGIBLE FIXED ASSETS 135 OTHER NON-CURRENT FINANCIAL ASSETS 139 INVENTORIES 139 LONG-TERM RECEIVABLES 140 FIXED ASSETS HELD FOR SALE 141 DEFERRED TAX ASSETS AND LIABILITIES 142 TRADE AND OTHER RECEIVABLES 143 CASH AND CASH EQUIVALENTS 145 OTHER CAPITAL INSTRUMENTS 145 OWN SHARES 147 DIVIDENDS 147 STOCK OPTION AND WARRANT PLANS 147 NON-CONTROLLING INTERESTS 148 PROVISIONS 149 PENSION OBLIGATIONS 150 INTEREST-BEARING LIABILITIES 150 TRADE AND OTHER PAYABLES (SHORT-TERM) 154 RISK MANAGEMENT POLICY 154 1. Market risk 155 1.a.1. Foreign exchange risk 156

	1.a.2. Foreign exchange sensitivity 157
	1.b.1. Interest-rate risk 159
	1.b.2 Interest-rate risk: interest-rate sensitivity 159
	1.b.3 Interest-rate risk: maturity of financial instruments 160
	1.c. Foreign exchange risk and interest-rate risk: financial instruments
	(derivatives) 161
	1.d. Other market risks 164
	2. Credit risk 165
	2.a.1 Exposure to credit risk 165
	2.a.2 Impairment losses 166
	3. Share price risk 167
	4. Liquidity risk 167
	5. Financial instruments by class and category 168
	6. Capital structure 171
7. OT	HER ELEMENTS 172
	SUBSIDIARIES 172
	PENDING DISPUTES 175
	COMMITMENTS 175
	RELATED PARTIES 178
	EVENTS AFTER THE BALANCE SHEET DATE 181
	NON-AUDIT MISSIONS UNDERTAKEN BY THE STATUTORY AUDITOR +

STAT EMENT FROM THE RESPONSI BLE PERSONS	182
STATUTO RY AUDITO R'S REPORT ON THE CONSO LIDATED FINAN CIAL STAT EMENTS 184
CON DENSED STATUTO RY ACCOUNTS OF THE PARENT COMPANY PINGUIN LUTOSA NV, ACCORDING TO BELGIAN ACCOUNTING STAN DARDS 188

CONSOLIDATED ANNUAL REPORT OF THE BOARD OF DIRECTORS

Dear Shareholders,

This annual report should be read in conjunction with the consolidated annual financial statements of PinguinLutosa NV and the related notes. These consolidated financial statements were approved for publication by the Board of Directors on 24 July 2012.

Key operating facts in 2011-2012

Introduction

The past year was one of transition, during which the Group underwent a veritable metamorphosis with regard to consolidation scope, organisation and shareholder structure, with the financial year being extended to 31 March 2012, so that the past financial year in fact covered a total of 15 months.

Acquisition of Scana Noliko Group

On 19 July 2011 the acquisition of the Scana Noliko Group was formally completed. Scana Noliko Group (www.Scana-Noliko.be) is an internationally active food products company that is growing rapidly and includes the companies Scana Noliko Holding NV, Scana Noliko NV, Scana Noliko Ltd, Scana Noliko Real Estate NV and the participation in BND CVBA. Besides the processing of harvest-fresh vegetables and fruit, it is also active in the preparation of convenience food products such as soups, sauces, dips and pasta dishes. This is being commercialised under private label and own brand in cans, glass jars or flexible packaging. There are 2 establishments in Bree and Rijkevorsel, employing 563 people in total. The figures of Scana Noliko Group will be included in the consolidation scope of PinguinLutosa as of 1 July 2011.

This acquisition again represents a major step forward for Pinguin-Lutosa, extending its product range with high quality preserved foods in can or glass jars. The strengths of Scana Noliko Group in agro, production, technology and R&D, in combination with the extensive commercial network of PinguinLutosa, complement each other perfectly and strengthen the organisation of PinguinLutosa even further. The acquisition of Scana Noliko Group further strengthens the profitability of PinguinLutosa, and consequently lays a strong base for the future.

PinguinLutosa has paid €117.4 million for all the shares in the companies mentioned above.

Acquisition of CECAB Activity

On 1 September 2011 the acquisition of the CECAB Activity was completed for a total amount of €5.7 million.

This amount includes on the one hand an amount of €2.4 million for the entire acquisition of 100% of the shares of the companies in France (CGS SAS and CGB SAS) and Brasil (D'Aucy do Brazil Ltda). PinguinLutosa additionally acquired for an amount of €3.3 million a number of non-controlling participations in several CECAB Group companies that hold the production infrastructure and rent the land and buildings to local subsidiaries of PinguinLutosa. In addition, both parties have agreed upon a result-driven acquisition price (earn-out) of the business and the commercial fund which starts as from 2012 onwards and can amount to a maximum of €6.0 million. This earn-out arrangement has no time limit and depends on the EBITDA to be attained by the deep-frozen vegetable division.

Entrance of Agri Investment Fund

On 6 October 2011 Agri Investment Fund acquired the share package of KBC Private Equity NV, more specifically a package of 1,057,983 PinguinLutosa shares. The mandate of director Gert van Huffel consequently came to an end. The representative of Agri Investment Fund in the Board of Directors is Mr Jozef Marc Rossiers.

Capital increase

On 15 February 2012, Gimv-XL Partners Comm. VA, Gimv NV, Adviesbeheer Gimv-XL NV, Food Invest International NV and Agri Investment Fund CVBA joined the community of shareholders of PinguinLutosa via a private placement for an amount of €44.0 million. This was done at a share price of €9.0. The capital increase of €44,000,001 served to repay the bridge financing that was granted to PinguinLutosa within the framework of the acquisition of Scana Noliko Group under the bridging credit and the club deal financing. The entry of these new shareholders further strengthens our capital base, and 4,888,889 new shares were created.

Strategic repositioning of the convenience activities

During the previous year the strategic focus of Convenience Cuisine, the collective name for our convenience activities: soups and sauces, preparations and ready-to-eat dishes has been revised. As a result, the strategic focus in 2012 will shift from the ready-to-eat meals in dishes to the coated products. This shift is prompted by the better growth prospects of these products in both the overseas markets and Europe.

Harvests

After a difficult start due to the extremely dry spring, last year produced a normal to good harvest, so that normally for most vegetables there will be no shortages. In the potato segment there was a significant shortage of chip potatoes, however. That is primarily due to the heat wave at the end of June 2010, the high levels of rain in the fall and the early frost that led to the 2010 potato harvest consisting primarily of small potatoes. This led to very expensive raw material costs in the first half of 2011. With the new harvest, however, this situation turned around completely as of June 2011, because there are now more than enough large, good-quality potatoes, and this has had a positive impact on both the capacity utilisation and the results of this division since the fourth quarter of 2011.

Production and market conditions

Over the past financial year the deep-frozen vegetable division was able to substantially expand its production, with total production of deep-frozen vegetables amounting to 386,000 tonnes. All countries noticed an increase, but the increase was primarily located in Poland and Hungary and was also the result of favourable weather conditions in those countries, as well as being a consequence of the decision to significantly expand the production programme.

In the past financial year (15 months), the potato division achieved a production volume of 435,000 tonnes. Initially the supply problems and the expensive raw material costs led to a reduction in the produced volumes. With the new harvest, however, this changed completely, and as of the fourth quarter of 2011 the production increased sharply. Wishing to take maximal advantage of the large supply and the good quality, the potato division therefore expanded the production considerably - even if this should lead to a temporary stock build-up.

The total production of the canning division amounted to 119,000 tonnes last year (12 months). This was in line with the previouslyestablished production budget.

The deep-frozen vegetable division had a difficult start as a result of the unfavourable market conditions with pressure on the prices. That situation corrected itself as of September with the start of the new selling season, where the necessary price corrections could be obtained. Due to the mediocre harvest of 2010, during the first half of 2011 the deep-frozen vegetable industry was confronted with a number of shortages, so that certain sales could not be implemented.

The potato division was faced with a sharp and very significant increase in raw material prices, which persisted until well into the third quarter of 2011. PinguinLutosa responded to this by adapting its pricing policy. However, the price increases that were introduced could not offset the increased raw material costs. As of the start of the new season, the market conditions fully recovered, primarily as a result of the substantial decline in the raw material prices on the free market. As a result, volumes also once again increased.

For the canning division, the market conditions were stable over the past financial year.

Busin ess cycl e

Purchase and processing of vegetables: deep-frozen vegetable division

As a result of climatological seasonality, the processing season starts in May/June and ends in December. The vegetables processed were entirely based on contract purchases since spot purchasing is not possible in this market. After all, vegetables do not have the same storage properties that potatoes do. The delivery and processing of the vegetables in the period May/June 2011 to December 2011 were based on the negotiations from the December 2010-February 2011 period. Those negotiations led to stable purchase prices for most vegetables.

The negotiations for the deliveries commencing in June 2012 were completed successfully in February 2012, which saw the prices for most raw materials remaining stable.

Purchase and processing of potatoes

During the first 5 months of 2011, the processing and acquisition of potatoes were based on the negotiations carried out in 2010. The negotiations for the purchased contract volumes that were delivered and processed starting in June 2011 were completed in January 2011.

Those contract purchases constitute approximately 50% of our requirements. The remaining requirements are met through purchases on the free market. The prices of potatoes on the free market showed a huge increase starting up till May. Afterwards, the potato prices got back to their normal level. The negotiations for the harvest of 2012 were completed in February 2012 with an increase of more than 10%.

Potatoes are processed almost throughout the entire year.

Purchase and processing of vegetables: canning division

Given that the climatological seasonality of the canned goods supply shows great similarities with the deep-frozen vegetable division, their business cycles are partially similar. The difference resides primarily in the fact that the canning division is less seasonal, since during the winter months the canning division can process winter vegetables. By contrast, given the market and supply conditions, the processing of winter vegetables in the deep-frozen vegetable industry is neither feasible nor profitable. The processing of winter vegetables together with the high activity level in soups and sauces all year round ensures that the results remain stable throughout the year.

Vegetables sales cycle

The sales up to and including September 2011 were based on the sales negotiations in the period July to September 2010. That period was characterised by downward pressures on sales prices.

The sales and sales prices in the period September 2011-December 2012 were negotiated in July-August 2011. That was accompanied by increasing sales prices in our industry, which again normalize the market circumstances.

Potato sales cycle

The sales for the January-September 2011 period were based on the sales negotiations in the period September-October 2010. Confronted with the very high raw material prices, that period was characterised by strongly increased sales prices. This price increase was necessary but, given the fact that raw material prices tripled on the free market, it was not enough to offset this. In a number of cases it was decided to depart from the normal practice of annual contracts and instead enter into shorter sales contracts until February 2011. This was done in order to enable PinguinLutosa - via targeted price increases - to respond to the rapidly-changing market conditions during the course of 2011.

The negotiations for the sales commencing in October 2011 were completed successfully in October 2011. In view of the wide supply, the decreases in cost prices and the good qualities and yields, there was a moderate downward pressure on sales prices.

Canned sales cycl e

The sales cycle is comparable to the cycle and periodicity of the deep-frozen vegetables. In the canning division as well it was possible to conclude the sales negotiations for the new season with increases in sales prices.

P osition of the Company – risks and uncertain ties

The most important market risks for the Group are the availability of the raw materials, the fluctuations in prices of raw materials, in interest rates and in foreign exchange rates. The market risks are determined by the fluctuations in the sale prices and weather conditions. The sales conditions are determined by changes in supply and demand. Demand is mainly influenced by climatological effects, further internationalisation of the market and marketing campaigns. Supply is mainly influenced by the availability of raw materials.

Availability of raw materials

In the deep-frozen vegetable division, the climatic conditions have an impact on demand in two ways. If there's a hard winter and a bad summer, more deep-frozen vegetables will be eaten. If there's a warm summer, fewer deep-frozen vegetables are eaten. Climatic conditions can also lead to an oversupply of fresh vegetables. This then leads to very inexpensive fresh vegetables, so that people buy fewer deep-frozen ones (and this also applies in reverse). Demand is less climate-dependent in the potato division than it is in the deepfrozen vegetable division.

Along with other elements, such as soil fatigue in fields for specific crops, the weather conditions are a compelling reason for Pinguin-Lutosa to reduce its dependency on the harvest in a specific region as much as possible. This is being achieved by expanding the supply region further and by concluding cooperative agreements with other companies in alternative regions.

Prices of raw materials

The deep-frozen vegetable division and the canning division work in principle with fixed annual contracts, where the price per vegetable is set for the entire season before the vegetables are sown or planted. Possible shortfalls in the market can be compensated by purchasing deep-frozen products on the free market.

The potato division works partly with annual contracts, in which the prices are set in advance, and buys its non-contracted potatoes (approximately 50%) in the free market. The price of the potatoes on the free market can fluctuate significantly as a result of supply fluctuations (primarily influenced by weather conditions and the quality and the storage life of the potatoes) or speculation. Unlike the situation with fresh vegetables, fresh potatoes can be stored, with storage capacity and speculation having an effect on the price.

Despite the high level of attention dedicated to these aspects, the production of the divisions of PinguinLutosa depends on temporary weather phenomena, while climatological circumstances can influence supplies and raw materials prices. Harvest yields can fluctuate sharply depending on the weather conditions. This can lead to surpluses or deficits, which in turn leads to pressure on sales prices or a loss of productivity.

Exchange rate risk

The Group is subject to fluctuations in exchange rates which could lead to a profit or loss in currency transactions. Like any company with non-euro sales, the Group is subject to the normal exchange rate risks.

The Group realizes a significant portion of its turnover outside the Eurozone, mainly in the United Kingdom. Our British subsidiary PinguinLutosa Foods UK Ltd., where the activities are performed in British pound, represents 17% of total sales of the Group. The British pound is the most important non-euro currency for the Group. In addition, there are also purchase and sales contracts in American dollar (USD) and Australian dollar (AUD). These are limited and the Group strives for a natural hedging. Through the acquisition of the CECAB Activity, the Polish zloty, the Hungarian forint and the Brazilian real are also currencies that are used.

PinguinLutosa makes use of forward contracts as a function of the expected sales in order to partially hedge itself against negative exchange rate evolutions.

As per 31 March 2012 there are several hedging instruments for exchange rate risk outstanding. The total net fair value ('Marked to market value') amounted to €-0.4 million as per 31 March 2012.

Risks related to the financing structure

Due to the debt level, the company must generate sufficient cashflows in order to pay back its debt as well as paying the interest costs. The company's debt position increased sharply in recent months, in part because of the acquisition of the Scana Noliko Group. On the other hand, the acquisition also led to a significant improvement and stabilisation of the REBITDA that serve to cover these costs.

Within the framework of the club deal financing, a change of control clause was included that provides for the credits immediately falling due in the following cases: (a) Hein Deprez no longer has control over Food Invest International NV; (b) Food Invest International NV no longer possesses (directly or indirectly) at least 30% of the share capital of PinguinLutosa; (c) PinguinLutosa no longer has control over certain of its subsidiaries or (d) the shares of a subsidiary of PinguinLutosa are listed on a regulated market.

If the company does not reach an agreement with its banks on the breach of a financial covenant within the framework of the club deal financing, this can lead to the accelerated maturity of all outstanding amounts under the club deal financing. Therefore PinguinLutosa has decided to record the complete club deal financing as short term debts in accordance with IFRS. PinguinLutosa expects to finalize an agreement in the coming months.

Interest-rate risk

Due to the Group's financing structure through short-term loans at variable interest rates (straight loans), the Group wishes to hedge against interest-rate hikes in floating interest rates. A number of IRS's (Interest-Rate Swaps) were concluded for this. The total fair value ('marked to market value') is €-6.1 million on 31 March 2012.

The maximum hedging period for these instruments continues to run until July 2016.

Liquidity risk

The liquidity risk with respect to clients is limited by following strict procedures. In addition, credit insurance is also taken out.

R ese arch and Development, Innovatio n a nd sustainabi l it y

Innovation and product development

Quality assurance is more important than it has ever been in all PinguinLutosa activities. All employees are involved in the continuous effort to improve product and process quality. Within a naturally growing frozen-products market, driven by increased demand for healthy, natural and balanced nutrition. PinguinLutosa is giving innovation pride of place.

Investments in the best-performing and innovative machines and installations are continuous and on-going. The Group develops products at a quick pace, in step with rapidly changing market trends. In product development the Group is constantly taking account of market trends and consumer needs like globalization, a concern for healthy eating, ease of use, etc. The Group wants to remain a leading product innovator in each of the different divisions. In 2011-2012, as well in previous years, many new products, product varieties, dishes and packaging were developed and marketed.

To achieve this an international group like PinguinLutosa can also cooperate closely with specialists at home and abroad. The Group has its own R&D teams per division to transform all of this into ecologically responsible, hygienic and profitable products. The team which deals specifically with product development comprises 5 permanent employees for the deep-frozen vegetable division, 3 people for the potato division and 6 people for the canning division. Development quality and the circulation of information throughout the organization is monitored throughout the process by the Group's own R&D department.

Sustainability

Sustainability and good corporate governance, in addition to operational efficiency and absolute focus on quality, are important pillars on which the strategy of PinguinLutosa is based. Sustainability itself is defined as the art to combine the 3 Ps – People, Planet (environment) and Profit – in a harmonious way.

Our loyal participation in the Sustainable Entrepreneurship Charter (an initiative of the Flemish Government, Voka and the Provincial Development Agency) is used internally as a catalyst in order to draw up an overall action plan that is also subject to an external audit and commentary each year. In this way we are contributing to a social environment that will offer coming generations the necessary opportunities and possibilities as well.

Scope of co nso l idation and period

With some acquisitions made by the Group during the last year, the consolidation scope has since been changed further.

PinguinLutosa has changed its closing date to 31 March. Hence the accounting periods of each of the three divisions have now been aligned. In addition this closing date is more in line with the operational activity cycle (start of the production of the new season).

The results as per 31 March 2012 include the consolidated results for PinguinLutosa NV, consisting of:

(i) 15 months of results of PinguinLutosa (before the acquisitions of the CECAB Activity and the Scana Noliko Group), and
(ii) 9 months of results of Scana Noliko Group (included as from 1 July 2011 onwards) and
(iii) 7 months of results of the CECAB Activity (acquisition effective as from 1 September 2011 onwards). The results of the CECAB Activity are included in the deep-frozen vegetable segment.

In the comparative figures as per 31 December 2010 (12 months results of PinguinLutosa) these acquisitions were consequently not yet included.

The financial year that ended on 31 March 2012 had 15 months, whereas the previous financial year had 12 months. The financial year running from 1 April 2012 to 31 March 2013 will for the first time give a normal view of the consolidated results of the Pinguin-Lutosa Group including recent acquisitions for a 12-month period.

Commentary on the co nso l idated financial statements

The consolidated financial statements are prepared in conformity with the International Financial Reporting Standards (IFRS) published by the International Accounting Standard Board (IASB) and the interpretations issued by the IASB's International Financial Reporting Interpretation Committee (IFRIC, previously SIC), which have been approved by the European Commission.

The consolidated financial statements provide a general overview of the Group's activities and the results achieved. They give a true and fair view of the entity's financial position, its financial performance and cash flows on a going concern basis.

The Board of Directors believes that the application of the valuation rules on a going concern basis is justified. It is basing its view on the positive figures which the divisions can present and on the positive prospects.

The Board of Directors is also convinced that the planned activity increases and acquisitions will allow profit to evolve positively.

When comparing the consolidated income statement one needs to remark that the past accounting period (closing per 31 March 2012) includes a period of 15 months whereas the accounting period that ended as per 31 December 2010 included a period of 12 months. In addition, the accounting period that ended per 31 March 2012 now includes 15 months of consolidated results for PinguinLutosa NV, consisting of:

(i) 15 months of results of PinguinLutosa (before the acquisitions of the CECAB Activity and Scana Noliko Group), and
(ii) 9 months of results of Scana Noliko Group (included as from 1 July 2011 onwards) and
(iii) 7 months of results of the CECAB Activity (acquisition effective as from 1 September 2011 onwards). The results of the CECAB Activity are included in the deep-frozen vegetable segment.

Sales

During the prolonged accounting year ending 31 March 2012 the Group's consolidated sales increased by 72.2% from €483.6 million at 31 December 2010 (12 months) to €832.8 million at 31 March 2012 (15 months). This is an increase of €349.2 million. €141.9 million of this increase is related to the acquisition of Scana Noliko Group whereas €96.6 million of this increase is related to the acquisition of the CECAB Activity.

Sales of the deep-frozen vegetable division amounted to €392.2 million for the accounting year ending as per 31 March 2012. The potato division was responsible for €298.7 million of the sales, whereas the canning division was responsible for €141.9 million of the sales in the same period.

Sales in the deep-frozen vegetable division amounted to €392.2 million for the period ending 31 March 2012 (15 months) and represents 47.1% of total sales. The increase of sales by 60.0% in this segment compared to last year is mainly due to the impact of the inclusion of the CECAB Activity for an amount of €96.6 million. The volumes sold within the deep-frozen vegetable division (excluding CECAB Activity) decreased by 8.9% in the previous accounting year. This decrease can be explained partly by the lack of certain vegetables in the first half of 2011 which made that a number of sales could not be realized and by the unfavourable market conditions prior to the start of the new sales season.

Sales in the potato division amount to €298.7 million for the period ending 31 March 2012 (15 months), representing 35.9% of total sales. The sales of the potato division increase by 25.3% compared to 2010. The increase is mainly due to the combined effect of the increased sales prices (+18.3%) which were applied as a reaction to the strongly increased raw material prices in the first half of 2011 and the planned organic volume increase of 5.9%.

Sales in the canning division amount to €141.9 million for the period ending 31 March 2012 (9 months), representing 17.0% of total sales.

The Group sells its products worldwide in more than 110 countries. The share of the British market is 14% in the potato division, 9% in the canning division and rising to 34% in the deep-frozen vegetable division.

Result

The EBIT (operating result) for the period ending as per 31 March 2012 (15 months) amounts to €3.3 million, which represents a decrease by €-4.0 million compared to the accounting year ending as per 31 December 2010 (12 months). The EBIT-margin (compared to the operating income) now amounts to 0.4%, compared to 1.5% in December 2010.

The decrease of the EBIT is the combined effect of, on the one hand a decrease within the deep-frozen vegetable division of €-21.0 million and on the other hand an increase of the EBIT within the potato division of €12.7 million, whereas the impact of Scana Noliko Group on the EBIT amounts to €4.3 million. For the explanation of these evolutions we refer to the comments mentioned at the evolution of the EBITDA.

The results of the previous accounting year were significantly influenced by a number of one-off charges. The corrections from the one-off elements mainly relate to the deep-frozen vegetable and canning activities and are commented separately in this annual report.

The EBITDA (operating cash flow) for the period ending as per 31 March 2012 (15 months) amounts to €39.2 million, which represents an increase by €13.1 million compared to the accounting year ending as per 31 December 2010 (12 months). The EBITDA-margin (compared to the operating income) now amounts to 4.6%, compared to 5.5% in December 2010.

The EBITDA in the deep-frozen vegetable segment amounted to €2.2 million in the period ending as per 31 March 2012 (15 months), compared to €15.5 million the year before. This result can be mainly explained by the results in the United Kingdom which were below expectations. This is attributable to decreasing sales volumes combined with decreasing sales prices, production inefficiencies, the loss of rental income from the leasing out of deep-freeze units and a general cost structure which is too heavy. Therefore the necessary restructuring measures have been taken, including changes in the management structure, commercial management and savings with regard to personnel costs. The impact of these measures on the ongoing results is already visible and will be closely monitored. A second explanation of the disappointing results in the deep-frozen vegetable division was also the difficult market circumstances during the first 9 months of 2011. As from the fourth quarter of 2011 onwards the new sales negotiations have led to a gradual improvement of the results. Over a period of 7 months the CECAB Activity positively contributed to the EBITDA of the deep-frozen vegetable segment.

The EBITDA of the potato division amounts to €26.7 million for the period ending as per 31 March 2012 (15 months), which was then a strong increase compared to the previous year. Despite of the difficult market circumstances in the first half of the year with very high raw material prices, the potato division obtained a satisfying result for the whole period. This can be largely explained by the decrease of the raw material prices as from August 2011 onwards and the good production efficiencies. This has led to a significant improvement of the results during the last quarter of 2011 and the first quarter of 2012.

The EBITDA of the canning division contributed €10.3 million to the EBITDA result of the group for the period ending as per 31 March 2012 (9 months), which is in line with the expectations.

Consolidated EBITDA was influenced in a negative way by a number of significant one-off events on the result with a total negative impact on the EBITDA of €14.1 million. The most important one-off elements are the application of IFRS 3 to the acquisition of Scana Noliko Group and the CECAB Activity, the acquisition costs for both transactions and the restructuring costs in the United Kingdom and Belgium. These are explained in a separate section.

The REBITDA (cash flow before one-off elements) amounts to €53.3 million for the period ending as per 31 March 2012 (15 months), which represents a significant increase compared to the previous accounting year. A comparison with the same period of 15 months ending as per 31 March 2011 shows an increase of REBITDA by € 29.8 million or 126.6%.

As per 31 March 2012 (15 months), the recurring operating cash flow (REBITDA) of the deep-frozen vegetable division amounted to €10.4 million, which is a decrease of €3.9 million compared to the previous accounting year. The decrease in recurring operating cash flow can mainly be ascribed to the same reasons as discussed for the evolution of the EBITDA of this division. The CECAB Activity had a positive contribution to the REBITDA of 6.5 million over a period of 7 months.

As per 31 March 2012 (15 months), the recurring operating cash flow (REBITDA) of the potato division amounted to €25.7 million compared to €10.6 million during the previous year (an increase of €15.1 million). The increase in REBITDA within the potato division can mainly be ascribed to the same reasons as discussed for the evolution of the EBITDA.

The canning division contributes €17.2 million REBITDA to the consolidated REBITDA, this over a period of 9 months.

The one-off costs that have been incorporated in the operating profit per 31 March 2012 (15 months) amount to €-16.7 million. The results were mainly influenced in a negative way by one-off accounting events.

Following the application of IFRS 3 "business combinations" the opening stock needed to be valued at fair value less costs to sell, which implies that the margin to be realized on the sale of the acquired stock is included in the opening equity so no margin can be realised anymore in the income statement. This has a one-off negative impact on the EBITDA of €6.8 million for the Scana Noliko Group and €2.9 million for the CECAB Activity.

Important as well are the transaction costs for both acquisitions. These have a one-off charge of €1.4 million.

In addition the one-off elements include a total charge of €-4.5 million within the British subsidiary and €-0.4 million within the Belgian subsidiaries. The one-off elements within the British subsidiaries mainly relate to a restructuring cost of €-2.3 million for the site in King's Lynn, €-1.2 million charges related to the closure of the sites in Bourne and Easton and a number of provisions for the sites in Bourne and Grimsby in an amount of €-0.5 million. The one-off elements within the Belgian companies mainly relate to an impairment loss which has been booked on partially disposed machinery in an amount of €-1.6 million. This cost was partially compensated by a positive one-off refund of property tax over the accounting period 2002 till 2006 in an amount of €1.0 million.

In the French subsidiary Pinguin Aquitaine S.A.S. a one-off provision has been recorded in an amount of €-0.5 million relating to a dispute over rightly or wrongly received subsidies.

A net one-off income of €0.9 million was included in the operating results for the 2010 financial year (12 months), primarily related to the deep-frozen vegetable division in Belgium, United Kingdom and Pinguin Aquitaine SAS, whereas this year (15 months), as referred to previously, a net one-time cost of €-16.7 million has been included.

The REBIT (operating result before one-off elements) increases from €6.4 million per 31 December 2010 (12 months) to €20.0 million per 31 March 2012 (15 months). As a percentage of the operating revenues, the REBIT amounted to 2.3% as per 31 March 2012, compared to 1.4% in December 2010.

At the end of March 2012 the net financial result amounts to €-24.6 million (15 months) compared to €-4.7 million last year (12 months). During the past accounting year the financial result was negatively influenced by a number of one-off or non-operating financial charges following the acquisitions and the refinancing operation following the acquisition of the CECAB Activity and Scana Noliko Group.

Net interest charges for the period ending as per 31 March 2012 amount to €-16.1 million, which is an increase by €10.5 million compared to previous accounting year (15 months compared to 12 months). This is mainly due to the increase of the drawn financing for the acquisition of Scana Noliko Group, the bridge financing preceding the €44 million capital increase and the financing costs for the increased working capital following the acquisition of the CECAB Activity.

The other financial results amounted to €-8.6 million, a decrease of €9.7 million compared to the same period of previous accounting year (15 months compared to 12 months). This is mainly the result of an increase in fair value (marked-to-market value) of financial instruments in an amount of €5.5 million compared to a positive impact of €1.1 million last year. These concern the interest rate swaps (IRS) that needed to be concluded for the new club deal financing. By these IRS PinguinLutosa hedges against a possible increase in interest rates on the drawn financing. In addition there were one-off costs related to the renewal of the club deal financing which were included in the financial result in an amount of €2.0 million.

Many non-recurrent charges were taken as a result of, amongst other things, the acquisitions and the refinancing operation associated with them in such a way that the prolonged accounting year was closed with a pre-tax result which now stands at €-21.3 million negative compared with €2.6 million positive for the period to 31 December 2010.

The taxes expressed in the income statement arise from the results of the financial year. Differences in the results reported under local and IFRS valuation rules give rise to deferred taxes. In addition to the income taxes on the results for the current financial year of €5.5 million (15 months), deferred tax assets of €12.8 million were recorded. This had a total positive effect of €7.3 million. Last year this had a total positive effect of €0.1 million (12 months).

The consolidated result after tax is now €-14.1 million (15 months). The Group's share in the net result is €-13.8 million. Earnings per share (share of the Group) amount to €-1.14 in 2012 compared to €0.26 in 2010.

Statement of financial position

The intangible fixed assets comprise primarily the valuation of the brand and the client relationships of the potato division that was acquired ("Lutosa Group"), the client relationships of the canning division that was acquired ("Scana Noliko Group"), as well as software licences. The increase per 31 March 2012 by €23.6 is mainly due to the impact of the inclusion of the client relationships of the acquired canning division (€25.0 million), the investments of €1.3 million (mainly in software), which were only partially offset by write-offs during the financial year (€2.9 million).

The goodwill shown contains the goodwill from the acquisition of Salvesen (€1.2 million), the acquisition of the Lutosa Group (€51.6 million), the acquisition of the CECAB Activity (€2.9 million) and the acquisition of Scana Noliko Group (€6.0 million).

The tangible fixed assets increase from €131.1 million per 31 December 2010 to €185.7 million per 31 March 2012. The inclusion at "fair value' of the acquired assets of the Scana Noliko Group (€52 million), the acquisitions in the accounting year (€35.2 million), the depreciation charges and the write-offs in the various entities (€30.8 million) and the remaining combined impact of the disposals and the foreign exchange rate fluctuations (-€1.7 million) resulted in a net increase of €54.6 million compared to 31 December 2010.

The financial fixed assets in an amount of €3.4 million include the 10% minority participations in the real estate companies of the acquired CECAB Activity.

The working capital and managing the working capital financing has already been one of the major points of attention of the Group and the sector for some time now. The acquisition of the CECAB Activity and the acquisition of the Scana Noliko Group make the working capital to increase by €100.1 million per 31 December 2010 to €179.2 million per 31 March 2012.

Inventories increased from €112.6 million per 31 December 2010 to €236.8 million per 31 March 2012. The increase of inventories by €124.3 million is mainly explained by the acquisition of the canning division ("Scana Noliko Group") (€74.6 million) and the CECAB Activity (€50.7 million).

Although the strong increase in sales did lead to an increase in trade receivables by €56.2 million, this was completely offset by the increase in trade debts by €72.2 million. That led to an increase in the working capital requirement (excluding cash) of the deepfrozen vegetable division by €1.6 million and this of the potato division by €6.2 million. The inclusion of the canning division in the figures led to an additional need of €67.5 million.

At year-end, the cash position was €22.9 million, up from €54.9 million a year earlier.

Also in 2012, additional efforts will be made to further optimize working capital and the related financing needs. This will be done in the context of the expected sales forecasts and should make it possible to respond flexibly to certain market conditions. Stock is a key element in the commercial policy we conduct and it must be high enough so as to be able to respond to market conditions.

Equity (including non-controlling interests) increases by €32.7 million and amounts to €171.4 million per 31 March 2012 compared to €138.7 million per 31 December 2010. Equity was positively influenced on the one hand by the private capital increase of €44.0 million, the valuation of the warrants in accordance with IFRS (€2.9 million) and on the other hand negatively by the inclusion of the results for the prolonged accounting year in an amount of €-14.1 million. On 15 February 2011, a private capital increase, within the framework of authorized capital of €44.0 million was approved and established by the Board of Directors. In accordance with IFRS Standards the costs of the capital increase were deducted from the capital (€0.6 million). The impact of the first inclusion of the non-controlling interests of the acquired CECAB Activity and the canning division amounts to €0.2 million. Furthermore, the strengthening of the British Pound had a positive impact on consolidated equity by translation differences relating to the shareholdings in PinguinLutosa Foods UK Ltd. and the Salvesen goodwill. The overall impact of the translation differences (including translation differences on sales offices) amounts to €+0.3 million at 31 March 2012. Shareholders' equity at 31 March 2012 amounts to 25.2% of the statement of financial position total.

The net financial debts increased by €132.1 million, from €66.8 million per 31 December 2010 to €198.9 million per 31 March 2012, mainly resulting from the debts of the renewed club deal financing and the subordinated loans. The subordinated loans amount to €38.5 million. The renewed club deal financing amounted to €184.9 million as per 31 March 2012.

Cash flow

The REBITDA amounted to €53.3 million in the past prolonged year (15 months). That is an increase of €27.4 million in comparison with the previous financial year 2010 (12 months), when the REBITDA was €25.0 million. The non-recurring elements had an impact on the operating cash flow in 2012 as was described above. The recurrent EBITDA therefore amounted to 6.2% of the operating revenues. At 31 December 2010, that figure was 5.3%.

Divide nds

The Board of Directors has proposed to the Annual General Meeting of Shareholders that no dividend will be paid. The results have indeed improved considerably, but any dividends in the longer term will depend on the net unconsolidated results of PinguinLutosa NV, the company's financial situation, its legal reserves and other factors that the Board of Directors or the Annual Meeting consider important.

Investments and disinvestments

In the extended 2012 financial year ending as of 31 March 2012 the total investments in intangible fixed assets amounted to €1.2 million. The most important investments in intangible fixed assets are explained by the valuation of the customer portfolio of the Scana Noliko Group for an amount of €25.0 million. In the Belgian deepfrozen vegetable and potato divisions investments were made in intangible fixed assets for an amount of €1.0 million, primarily in the further optimisation of the ERP package. The software of the Scana Noliko Group was taken over for €0.2 million on the acquisition date and during the current financial year there was an additional investment in software for an amount of €0.2 million.

The investments in tangible fixed assets amount to €35.3 million per 31 March 2012 and consist of investments in 'land and buildings' (€3.5 million), in 'plant, machinery and equipment' (€29.6 million), in 'furniture and vehicles' (€0.8 million) and 'other tangible fixed assets' (€1.4 million). The acquisition of plant, machinery and equipment as a consequence of business combinations through the takeover of the Scana Noliko Group in Belgium accounted for a growth of €79.8 million.

The investments in 'Land and buildings' relate primarily to the deep-frozen vegetable division in Belgium (€1.8 million) and the potato division (€1.6 million). In the deep-frozen vegetable division this includes primarily the construction of a plant hall within the framework of the installation of a new spinach and beans line. In the potato division, this primarily includes the investment project to purchase a receiving, sorting and storage building on the site in Leuze-en-Hainaut.

The investments in 'plant, machinery and equipment' relate primarily to the deep-frozen vegetable division in Belgium (€12.8 million), Pinguin Aquitaine SAS (€0.7 million), PinguinLutosa Foods UK Ltd. (€9.7 million), the potato division (€3.6 million) and the canning division (€1.9 million).

The main 'plant, machinery and equipment' investments at 31 March 2012 in the deep-frozen vegetable division relate to:

• Investments in a new spinach and bean line;
• Optimisation investments in existing production lines;
• Elaboration of packing and storage activities in Germany (Oderland);
• New processing line including freezer, compressors, blanching and sorting machines in King's Lynn in the United Kingdom;
• Optimisation investments in the packing hall and the loading bays in the United Kingdom,

In the prolonged financial year ending 31 March 2012, the potato division invested in the Leuze-en-Hainaut site in the heading 'Installations, Machinery and Equipment', primarily in machines for receipt and sorting of potatoes, the replacement of batteries and power cables of high voltage lines and various optimization investments. In addition, the potato division invested at the site at Sint-Eloois-Vijve, primarily in a French fries oven and a degreasing installation.

In the prolonged financial year ending 31 March 2012, the canning division invested in the Bree site in the heading 'Installations, Machinery and Equipment', primarily optimization investments in the vegetables hall, the packing hall and the convenience activities and in fire protection. In addition, the potato division invested at the site at Rijkevorsel, primarily in cherry stoners and a pasteurisation tunnel.

Last year, the Group had sales and disposals for an amount of €0.6 million. This year the disposals amount to €30.0 million. This is largely explained by the sale and rent back of the property of the Scana Noliko Group. The proceedings from the sale of the grounds and buildings of the Scana Noliko Group sites for an amount of €30.0 million were used to finance a part of the acquisition of the Scana Noliko Group.

Ba nk covenants

On 19 July 2011, PinguinLutosa concluded an agreement with a consortium of Belgian and international banks to refinance the existing credit with an additional credit facility for working capital and investments for a period of 5 years. The total amount of the agreement was €250 million.

PinguinLutosa reports to the providers of finance on a quarterly basis. Per 31 December 2011 the Company breached the covenant relating to cash flow cover (the 'cash flow cover'). This breach was caused by the build up of stock due to a good production season with an expected increase in sales in 2012. PinguinLutosa has obtained an agreement with its banks for the situation per 31 December 2011. For the period up till 30 June 2012 a temporarily adjusted cash flow cover covenant has been agreed on (from 1 to -1.35).

Per 31 March 2012 PinguinLutosa complies with this adjusted covenant, as well as with the other existing covenants. In expectation of an agreement with the banks on the adjusted covenants in the light of the nature and the activities of the company and the recent acquisitions and related financing structure it has been temporarily decided to record the complete club deal financing as short term debts in accordance with IFRS. Due to this reclass the liquidity ratio is 94.8% instead of 133.2% in the case that the loans would be recorded as long term debts. The management expects to finalise such an agreement in the coming months. Pursuant to this agreement the bank debts will be partially recorded as long term and partially as short term debt.

Hedging and use of financial instruments

The Group uses derivative financial instruments to cover risks related to unfavourable fluctuations in foreign exchange rates and interest rates. No derivates were used for commercial purposes. Derivative instruments are initially valued at cost price and only afterwards at their fair value. The on-going contracts do not satisfy the conditions of hedge accounting (see IAS 39). The changes in fair value are included in the statement of comprehensive income.

At year-end 31 March 2012, both currency derivatives and interest derivates were open. The maximum hedging period of those instruments runs until July 2016.

Issuance of financial instruments

The Group has not issued any securities with rights and obligations that differ from those attached to the other shares. There are no employee share plans. All shares carry the same rights.

There are no legal or statutory restrictions on the transfer of shares.

In accordance with the articles of association, the Board of Directors has been authorised to issue shares within the authorised capital which has been raised to €157.5 million. The Board of Directors is authorised to purchase shares.

The Group has not concluded any special agreements with its directors or employees which stipulate payments when the directors resign or have to leave without a valid reason or the employees' employment is terminated, due to a public takeover bid.

Employees

The table below gives the average personnel count for the year in full-time equivalents. The number of employees can, however, vary sharply from one day to the other depending on the season and supply.

On 31 March 2012 the Group had 3,416 employees. This is an increase of 1,720 full-time equivalents compared to the previous financial year. The increase in full-time equivalents is attributable primarily to the acquisition of the canning division ('Scana Noliko Group') and the CECAB Activity.

Average personnel in full-time equivalents 31/03/2012 31/12/2010

Total PinguinLutosa	3,416	1,696
CANN ING DIVISION	766	0
Seasonal and temporary	137	0
Scana Noliko Group (production sites and sales offices)	629
POTATO DIVISION	740	726
Seasonal and temporary	66	73
Lutosa Group sales offices	25	25
Lutosa Group (production sites)	649	628
DEEP-FROZEN VEGETABLE S DIVISION	1,910	970
Seasonal and temporary	532	332
PinguinLutosa Polska Sp. Z.o.o.	342
PinguinLutosa Hungary Kft	91
CGB S.A.S.
CGS S.A.S.	171
Pinguin Comines S.A.S.	118
D'aucy do Brazil Ltda	16
MAC Sarl
PinguinLutosa CEE Gmbh	1
PinguinLutosa Deutschland Gmbh	5	6
Pinguin Aquitaine S.A.S.	40	39
PinguinLutosa Foods UK Ltd.	261	259
Pinguin Langemark NV	85	89
PinguinLutosa NV	247	245

I mportant events af t er balance sh e e t dat e

As per 1 April 2012 the UK site in Bourne has been completely closed down, which means that the number of production sites in the UK is now limited to King's Lynn and Boston.

As of 1 April 2012 the Group also applies factoring to the Belgian companies of the canning division. This was already the case for the potato and deep-frozen vegetable division. For this purpose the group has extended its existing factoring lines of €50.0 million so that the Group now disposes of factoring lines without recourse in an amount of €70.0 million. The amount of factoring drawn without recourse is recorded off-balance.

On 15 February 2012, the certificate holders of STAK Pinguin decided to convert their share certificates into shares of Pinguin-Lutosa NV and to dissolve STAK Pinguin. This also means that the 5,351,554 shares of PinguinLutosa NV held by STAK Pinguin were distributed over the certificate holders: (i) to Koen Dejonghe 375,532 shares, (ii) to Herwig Dejonghe 45,222 shares, (iii) to Pinguin Invest NV 202,925 shares, (iv) to Korfima NV 566,037 shares, (v) to 2 D NV 3,243,293 shares, (vi) to the Civil Partnership Dejonghe-Dejonckheere 330,310 shares, and (vii) to Food Invest International NV 588,235 shares.

Due to the dissolution of STAK Pinguin on the one hand and the shareholders´ agreements that were made between Food Invest International NV and Gimv-XL within the framework of the acquisition of the Scana Noliko Group after capital increase on the other, Food Invest International NV no longer has directly or indirectly the right to appoint or to dismiss a majority of the directors of PinguinLutosa, and thus it no longer has de jure control over the Company as understood in articles 5 and following of the Company Code. The Stichting Administratiekantoor Pinguin was successfully dissolved effective 29 March 2012. The registration of the dissolution was officially completed on 24 May 2012.

There are no other major events subsequent to the balance sheet date which have a major impact on the further evolution of the company.

Corporate Governance

For the required legal information with respect to Corporate Governance in accordance with article 119, §2, 7° of the Company Code, please refer to paragraph 'internal control and risk management' of the "Corporate Governance" section of PinguinLutosa's annual report.

CORPORATE GOVERNANCE STATEMENT

The general principles regarding the role and responsibilities, nomination procedures and the organization of the Board of Directors are set out in PinguinLutosa Group's Corporate Governance Charter. PinguinLutosa (hereafter: 'the Group') uses the Belgian Corporate Governance Code of 2009 as a reference. This Charter can be consulted on the website (www.pinguinlutosa.com).

The Group closely follows developments in this area and adapts its corporate governance structure if necessary. The Board of Directors regularly reviews the Corporate Governance Charter and adapts it where necessary. The Charter has been reviewed in 2009 following the changes in the Corporate Governance Code. In the past financial year the Charter has been reviewed as well but according to PinguinLutosa no substantial adjustments were necessary.

In accordance with the Corporate Governance Code, this chapter mentions the relevant events that have taken place during the past financial year. Where there has been a deviation from the Corporate Governance Code, this is explained.

Board of Directors

The Board of Directors defines the strategy of the Group and supervises the day-to-day management of the Group through its members who belong to the Management Committee. The Board of Directors meets at least six times a year. Decisions are taken in principle by a simple majority of votes. The company is represented legally and otherwise by one managing and one independent director acting jointly.

Next to the managing directors who handle the day-to-day business of the company, there are at least three independent directors, including the chairman, to ensure an adequate balance. The Chief Financial Officer (BVBA The New Mile represented by Steven D'haene) is invited to attend meetings of the Board of Directors as secretary.

In addition to the Chief Financial Officer, the division managers of the deep-frozen vegetable, potato and canning divisions were also invited to the Board of Directors´ meeting.

Composition

At 31 March 2012 the Board of Directors consisted of 9 non-executive and 2 executive members. 3 directors are independent within the meaning of article 526ter of the Company Code.

Director's name	Date of appointment	Term of office ends on	Executive / non-executive	Independent / non-independent
BVBA The Marble p.r. by Mr Luc Van Nevel	1/07/2004	AGM 2015	Non-executive	Independent
NV Deprez Invest p.r. by Mr Hein Deprez	1/01/2010	AGM 2015	Executive	Non-independent
NV Vijverbos p.r. by Mr Herwig Dejonghe	12/01/2000	AGM 2015	Executive	Non-independent
BVBA Management Deprez p.r. by Mrs Veerle Deprez	9/11/2005	AGM 2015	Non-executive	Non-independent
BVBA Bonem p.r. by Mr Marc Ooms	9/11/2007	AGM 2015	Non-executive	Non-independent
Frank Donck	20/05/2011	AGM 2015	Non-executive	Independent
BVBA Ardiego p.r. by Mr Arthur Goethals	20/05/2011	AGM 2015	Non-executive	Independent
Jean-Michel Jannez	20/05/2011	AGM 2015	Non-executive	Non-independent
Jozef Marc Rosiers	2/12/2011	AGM 2015	Non-executive	Non-independent
Peter Maenhout	15/02/2012	AGM 2015	Non-executive	Non-independent
Alain Keppens	15/02/2012	AGM 2015	Non-executive	Non-independent

Mr Luc Vandewalle resigned from his mandate effective 26 April 2011. The mandate of Mr Patrick Moermans came to an end on 20 May 2011. Mr Gert van Huffel resigned from his mandate effective 1 September 2011.

Through their experience and involvement in the company, Mr Gert van Huffel, Mr Luc Vandewalle and Mr Patrick Moermans each contributed positively to the proper functioning of the Board of Directors and the growth of the company. The Board of Directors would like to thank them for this.

As a result of the acquisition of the participation of KBC Private Equity NV by Agri Investment Fund NV on 6 October 2011, the mandate of Mr Gert van Huffel that became open was filled, as a result of the Extraordinary General Meeting of 2 December 2011 by Mr Jozef Marc Rosiers, whose mandate will expire at the close of the Annual General Meeting of 2015.

As a result of the capital increase of 15 February 2012 by the Gimv companies, Messrs Alain Keppens and Peter Maenhout were appointed by the Extraordinary General Meeting as directors of the company for a term that will also end at the close of the Annual General Meeting of 2015.

A number of members of the Board of Directors exercise their office through a registered company:

• The Marble BVBA is permanently represented by Mr Luc Van Nevel;
• Deprez Invest NV is permanently represented by Mr Hein Deprez.
• Vijverbos NV is permanently represented by Mr Herwig Dejonghe;
• Management Deprez BVBA is permanently represented by Mrs Veerle Deprez;
• Bonem BVBA is permanently represented by Mr Marc Ooms;
• Ardiego BVBA is permanently represented by Mr Arthur Goethals

The present Board of Directors is composed of:

The Marble BVBA, chairman, represented by Luc Van Nevel (64 years old), permanent representative

Non-executive, independent director

Luc Van Nevel was appointed as director as a result of the decision of the Annual General Meeting of 14 May 2004. The Board of Directors´ meeting of the same date appointed him chairman of the Board of Directors.

At the Board of Directors´ meeting of 1 July 2004, note was taken of the resignation of Luc Van Nevel as director and as chairman of the Board of Directors and via cooptation he was replaced by the appointment as independent director of The Marble BVBA, represented by Luc Van Nevel, permanent representative. During the following Annual General Meeting of 14 November 2005 the appointment of The Marble BVBA as an independent director was ratified, and by decision of the following Board of Directors´ meeting the appointment of The Marble BVBA as chairman of the Board of Directors was ratified.

The Marble BVBA was reappointed as non-executive independent director at the Annual General Meeting of 20 May 2011, and the mandate as director will expire at the close of the Annual General Meeting of 2015. Its mandate has a term of 5 years.

The strengths of Luc Van Nevel are especially situated in the areas of general management, financial and marketing management, mergers and acquisitions, board management and corporate governance.

Luc Van Nevel graduated from the RUG in 1970 with a licentiate degree in Economics and in 1984 earned a degree in Strategic Marketing at Northwestern University of Chicago.

Luc Van Nevel began his career at Touche Ross & Co and in 1975 moved to Samsonite, where he first worked within Samsonite Europe in Oudenaarde for almost 20 years, after which he became head of the Samsonite Corporation in its Denver headquarters. Within the European division he was successively Assistant and European Controller, Vice-President, and President & Managing Director. Within the Samsonite Corporation he held the position of President International and Chairman & CEO until his retirement.

Luc Van Nevel is a member of the Board of Directors of several companies, including: Vanobake NV (as permanent representative of The Marble BVBA), Hevebra NV (as permanent representative of The Marble BVBA), Elia Asset NV, Elia System Operator NV, Picanol NV (as permanent representative of The Marble BVBA), Jensen Group NV (as permanent representative of The Marble BVBA), Berry Floor NV (as permanent representative of The Marble BVBA), VNVDB Invest NV, Industrial Wood Flooring NV (as permanent representative of The Marble BVBA), Vandewalle Bouwgroep NV (as permanent representative of VNVDB Invest NV), Van Welden NV, Algemeen Ziekenhuis Oudenaarde VZW, Bedrijvencentrum Vlaamse Ardennen NV and Vlaamse Federatie van Beschutte Werkplaatsen VZW. In 1990 Luc Van Nevel was named Manager of the Year by Trends Magazine.

Frank Donck (47 years old), director

Non-executive, independent director

Frank Donck was appointed as non-executive independent director at the Annual General Meeting of 20 May 2011, and his mandate as director will expire at the close of the Annual General Meeting of 2015. His mandate has a term of 5 years.

Frank Donck earned a Licentiate degree in Law at the University of Ghent and a special licence in Financial Management at the Vlerick Leuven Gent Management School. He is also a member of the Belgian Corporate Governance Commission. Frank Donck is managing director of 3D NV. He is chairman of Atenor Group NV and Telenet Group Holding NV.

Frank Donck is also a member of the Board of Directors of several companies, including: Aspel Polyform NV, Zenitel NV, KBC Bank NV, KBC Verzekeringen NV, J Zinner NV, Ter Wyndt CVBA, Ibervest NV, Hof Het Lindeken CVBA, Iberimmo NV, Huon & Kauri NV, Tris NV, Telenet Vlaanderen NV, Iberanfra BVBA, Vlerick Research NV, 3D Private Equity NV, Anchorage NV and Le Concert Olympique VZW.

Ardiego BVBA, director, represented by Arthur Goethals (65 years old), permanent representative

Non-executive, independent director

Arthur Goethals represents Ardiego BVBA in his capacity of permanent representative.

Ardiego BVBA was appointed as non-executive independent director at the Annual General Meeting of 20 May 2011, and the mandate as director will expire at the close of the Annual General Meeting of 2015. Its mandate has a term of 5 years.

Arthur Goethals has many years of knowledge and experience in the retail sector, among others as CEO of Delhaize Belgium NV.

Arthur Goethals is also a member of the Board of Directors of

several companies, including: Amadine Fund NV, Sleuyter Arena Oostende CVBA, Bouchard NV (as permanent representative of Ardiego BVBA), Matexi Group NV (as permanent representative of Ardiego BVBA), Hubisco NV (as permanent representative of Ardiego BVBA), Gault Millau Benelux NV (as permanent representative of Ardiego BVBA), Dinelli BVBA (as permanent representative of Ardiego BVBA), De Weide Blik NV (as permanent representative of Ardiego BVBA) and Basket Club Oostende VZW.

Deprez Invest NV, Managing Director, represented by Hein Deprez (50 years old), permanent representative

Executive, non-independent director, representative of the majority shareholder

In his capacity of permanent representative, Hein Deprez represents Deprez Invest NV, which was appointed via cooptation as director to replace Kofa BVBA by the Board of Directors´ meeting of 9 December 2009. The appointment of Deprez Invest NV as executing, non-independent director was ratified during the following Annual General Meeting of 20 May 2010.

Deprez Invest NV was reappointed as executive non-independent director at the Annual General Meeting of 20 May 2011, and the mandate as director will expire at the close of the Annual General Meeting of 2015. Its mandate has a term of 5 years.

Hein Deprez is - via Deprez Holding NV, Food Invest International NV and 2 D NV - the controlling shareholder of PinguinLutosa NV.

Hein Deprez has been CEO of the PinguinLutosa Group via Deprez invest NV since 14 July 2011.

Hein Deprez is a member of the Board of Directors of several companies belonging to the PinguinLutosa Group: Scana Noliko Holding NV, Scana Noliko NV (as permanent representative of Deprez Invest NV), and Scana Noliko Rijkevorsel NV (as permanent representative of Deprez Invest NV). In addition, he is also a member of the Board of Directors of various other companies, including 2 D NV (as permanent representative of Food Invest International NV), De Binnenakkers NV, Scana Noliko Real Estate NV (as permanent representative of Food Invest International NV), De Weide Blik NV (as permanent representative of Food Invest International NV), Reuver NV (as permanent representative of Food Invest International NV), Peatinvest NV (as permanent representative of Food Invest International NV), Deprez Immo NV (as permanent representative of Food Invest International NV), Peltracom NV (as permanent representative of Deprez Invest NV), Mc Three NV (as permanent representative of Deprez Invest NV), Agrofino Transport NV (as permanent representative of Deprez Invest NV), Food Invest International NV (as permanent representative of Deprez Invest NV) and Les Pres Sales NV (as permanent representative of Deprez Invest NV).

Vijverbos NV, Managing Director, represented by Herwig Dejonghe (52 years old), permanent representative

Executive, non-independent director, representative of the majority shareholder

In his capacity of permanent representative, Herwig Dejonghe represents Vijverbos NV, which was appointed Managing Director since May 2000.

Since 14 July 2011 Herwig Dejonghe has been COO of the Pinguin-Lutosa Group and in that capacity is primarily responsible for the commercial operational management and for the market intelligence for the strategic projects in the three divisions.

Vijverbos was reappointed as executive, non-independent director at the Annual General Meeting of 20 May 2011, and the mandate as director will expire at the close of the Annual General Meeting of 2015. Its mandate has a term of 5 years.

Herwig Dejonghe graduated as a Commercial Engineer from UF-SIA and began his career at PinguinLutosa in 1982 as marketing director. In 1986 he became sales director and as of 1992 Managing Director and General Manager (CEO). Herwig Dejonghe is also a consular commercial judge at the Commercial Court of Kortrijk. Herwig Dejonghe has been active in UNIZO since 1999. He is a member of the national executive committee and until June 2007 was chairman of UNIZO International.

Herwig Dejonghe is a member of the Board of Directors of several companies belonging to the PinguinLutosa Group : Pinguin Salads BVBA, PinguinLutosa Foods SA (as permanent representative of Vijverbos NV), G&L Vandenbroeke Olsene NV (as permanent representative of Vijverbos NV), Pinguin Langemark NV, Pinguin-Lutosa UK Ltd and Vanelo NV (as permanent representative of Vijverbos NV). In addition, he is also a member of the Board of Directors of various other companies and organisations, including Unizo Diensten Roeselare Izegem VZW, Midcentrum CVBA, Unizo Vorming VZW, Sociaal Bureau Middenstand VZW, Centrum voor Accountancy Unizo Roeselare Izegem VZW, Vlaamse Vereniging voor Watersport Nieuwpoort VZW, De Boskant VZW, Stop aux Dechets VZW, Unie van Zelfstandige Ondernemers Regio Midden West Vlaanderen VZW, and Pinguin Invest NV.

Management Deprez BVBA, director, represented by Veerle Deprez (51 years old), permanent representative

Non-executive, non-independent director, representative of the majority shareholder

In her capacity of permanent representative, Veerle Deprez represents Management Deprez BVBA, which was appointed by the Board of Directors´ meeting of 9 November 2005 via cooptation as director to replace Demafin BVBA. The appointment of Management Deprez BVBA as non-executive, non-independent director was ratified during the Annual General Meeting of 10 November 2006.

Management Deprez BVBA was reappointed as non-executive, non-independent director at the Annual General Meeting of 20 May 2011, and the mandate as director will expire at the close of the Annual General Meeting of 2015. Its mandate has a term of 6 years.

Veerle Deprez began her career at Alcatel Bell in 1980 and in 1987, together with her brother Hein Deprez, laid the foundations for what would later become the Univeg group. Veerle Deprez also holds several director´s mandates in port-related companies.

Veerle Deprez is also a member of the Board of Directors of several companies, including: Shipex NV (as permanent representative of Management Deprez BVBA), DS Consult NV, Nova Holding NV, IFW NV, Scana Noliko Real Estate NV, De Binnenakkers NV, Ruris NV, Dreefvelden NV (as permanent representative of Deprez Invest NV), Deprez Immo NV (as permanent representative of Management Deprez BVBA), Nova Natie Logistics NV (as permanent representative of Management Deprez BVBA), Peltracom NV (as permanent representative of Management Deprez BVBA), Novatrans NV (as permanent representative of Management Deprez BVBA), Deprez Invest NV (as permanent representative of Management Deprez BVBA), Agrofino Transport BVBA (as permanent representative of Management Deprez BVBA), Food Invest International NV (as permanent representative of Management Deprez BVBA), 2 D NV (as permanent representative of Management Deprez BVBA), Peatinvest NV (as permanent representative of Management Deprez BVBA), Nova Holding NV (as permanent representative of Management Deprez BVBA), IFW NV (as permanent representative of Management Deprez BVBA), Deprez Holding NV (as permanent representative of Management Deprez BVBA), Reuver NV (as permanent representative of Management Deprez BVBA) and Les Pres Sales NV (as permanent representative of IFW NV).

Gert van Huffel (39 years old), director

Non-executive, non-independent director

Gert van Huffel is Senior Investment Manager at KBC Private Equity NV, for which he holds numerous mandates as director in various companies from a wide range of sectors.

He earned a licentiate degree in Applied Economics in Ghent and completed a special licence in Financial Management at Vlerick Leuven Ghent Management School.

Gert van Huffel was appointed via cooptation as director to replace Jo Breesch by the Board of Directors´ meeting of 12 October 2010. He was reappointed as non-executive, non-independent director at the Annual General Meeting of 20 May 2011, and the mandate as director will expire at the close of the Annual General Meeting of 2015. His mandate has a term of 6 years.

Gert van Huffel is also a member of the Board of Directors of several companies, including: Descar NV, Wever en Ducré NV, Allbox NV, Verkoopkantoor Allbox en Desouter NV, Degen Emballages NV, Lunch Garden NV, Ipcos NV, Dark NV, Limis Beyond Light NV, Lunch Garden Holding NV, Lunch Garden Services NV, Boxco NV, Lunch Garden Management NV and 2 B Delighted NV.

Bonem BVBA, director, represented by Marc Ooms (59 years old), permanent representative

Non-executive, non-independent director

Marc Ooms represents Bonem BVBA in his capacity of permanent representative.

It was appointed as non-executive, non-independent director by the Annual General Meeting of 9 November 2007.

Bonem BVBA was reappointed as non-executive non-independent director at the Annual General Meeting of 20 May 2011, and the mandate as director will expire at the close of the Annual General Meeting of 2015. Its mandate has a term of 5 years.

Marc Ooms has many years of experience in the financial sector, among others as managing director of Petercam.

Marc Ooms is also a member of the Board of Directors of several companies, including: BMT NV (as permanent representative of Bonem BVBA), Food Invest International NV (as permanent representative of Bonem BVBA), European Bulk Terminals NV (as permanent representative of Bonem BVBA), Regima Europe BVBA (as permanent representative of Bonem BVBA), IVC NV (as permanent representative of Bonem BVBA), Deprez Holding NV (as permanent representative of Bonem BVBA), Financiere Sainte Gudule CVBA, Phalenes NV, and Kaaitheater VZW.

Jean-Michel Jannez (50 years old), director

Non-executive, non-independent director

Jean-Michel Jannez was appointed as non-executive non-independent director at the Annual General Meeting of 20 May 2011, and the mandate as director will expire at the close of the Annual General Meeting of 2015. His mandate has a term of 5 years.

He is chief executive officer of Union Fermière Morbihannaise, which holds a major participating interest in Food Invest International NV.

Jean-Michel Jannez is also a member of the Board of Directors of several companies, including : Food Invest International NV, Les Fils de Armand Depenne SAS, Conserverie Morbihannaise Dumenil et Cie SA, Etablissements Rene Maingourd SCA, Société Conserves du Blaisois SICA SA, Hofice SAS, Moreac Surgeles SAS, Coopérative Agricole de Broons SCA, Ovociel SA, SARL Du Jarlot, G.I.E., Informatique du Groupe Cecab GIE, SCI La Rochoise SCI, Eurocopa SAS, Volailles de l´Odet SAS, Centrale Cooperative Agricole Bretonne SCA, Union de Coopératives Agricole Aliouest SCA, Union Fermière Morbihannaise SCA, Compagnie Générale de Surgélation Bretagne Surgel SAS, Val d´Aucy SA, JAP SAS, C.G.B. SAS, Financière du Fromeur SAS, Tremorel Conditionnement SAS, Les Fermiers de Bretagne SA, SCI du Lomogan SCI, Financière du Forest SA, Compagnie Générale de Conserve SICA SCA, Avicole Bretonne Cecab Distribution SAS, Compagnie Générale de Produits Alimentaires Peny SAS, Boutet Nicolas SAS, Société de Gestion Industrielle et Commerciale Sogeico Sarl, C.G.P.E. SAS, Groupe Cecab GIE, Société Houel SA, Elévage de Saint Cheron des Champs SA, De la Vallée de la Lys SAS, Matines SAS, HBC SAS and PEP SAS.

Peter Maenhout (46 years old), director

Non-executive, non-independent director

As Executive Vice President, Peter Maenhout is responsible for the Gimv-XL fund and the Belgian buyout and growth capital activities. Before this he headed the Benelux office of the investment advisor Amber Capital. Previously he was active in mergers and acquisitions and capital market transactions at Petercam and Generale Bank.

Peter Maenhout holds master degrees in International Relations (UG) and Finance (Vlerick) and an MBA from the University of Chicago.

Peter Maenhout was appointed as director by the General Meeting of 15 February 2012. The mandate will expire at the close of the Annual General Meeting of 2015.

Alain Keppens (44 years old), director

Non-executive, non-independent director

Alain Keppens began his career at Gimv as a financial analyst in 1992. Over the years he was promoted to investment manager and investment director.

At present Alain is the head of Buyouts and Growth Belgium, and thus responsible for a team of 7 private equity professionals (and support personnel) that invests in small and medium-sized MBO´s and growth capital transactions. The team manages a portfolio of around €200-€250 million that includes approximately 25 companies.

He is also involved in the Gimv XL fund, a private equity fund of €609 million, with a focus on larger transactions.

Alain Keppens exercises a part of his responsibilities as a member of the Board of Directors of several companies in which participating interests are held.

Alain Keppens has a Master in Applied Economics (University of Antwerp) and a Master of Business Administration (University of Antwerp + Marquette University - Milwaukee USA).

Alain Keppens was appointed as director by the General Meeting of 15 February 2012. The mandate will expire at the close of the Annual General Meeting of 2015.

During the past year the Board of Directors has been engaged with:

• The annual results, the annual financial statements and the annual report;
• Convening and setting the agenda of the General Meeting;
• Approval of budgets and investment projects;
• Regular assessment of activities;
• Approval of press releases;
• Reporting by the committee chairmen;
• Claims and litigations;
• Strategy of the company;
• Financing and optimisation of the financial structure and club deal financing;
• Operational organisation;
• Reorganizations and changes in group structure and organisation chart;
• Capital increase;
• Mergers and acquisitions.

The terms of office of all Board members expire after the Annual General Meeting to be held in 2015.

Evaluation

Under the direction of the Chairman, the Board of Directors reviews its size, composition and functioning bi-annually, as well as the size, composition and functioning of the Committees and the interaction with the management team. This self-assessment is prepared by the Appointment and Remuneration Committee.

The non-executive directors regularly evaluate their interaction with the executive management. To do so they meet at least once a year in the absence of the CEO and the other executive directors.

The task fulfilment as well as the role and the responsibilities of each individual director are periodically evaluated. This evaluation focuses on adapting the composition of the Board of Directors in order to take account of changed circumstances.

On the occasion of reappointments, the commitment and effectiveness of the directors involved are assessed in conformity with a previously-established procedure.

The Board of Directors acts on the basis of the results of the evaluation by addressing its strengths and weaknesses. If applicable, this entails that new members are proposed for appointment, that it is proposed not to reappoint existing members, or that steps are taken which are deemed useful for the effective functioning of the Board of Directors.

Audit Committee

The Audit Committee has been set up to assist the Board of Directors in reviewing the company's financial statements. It also helps the Board to check compliance with legal and judicial regulations, and to assess the competence and independence of the statutory auditor.

The Audit Committee has 4 members:

• Mr Frank Donck;
• The Marble BVBA, permanently represented by Mr Luc Van Nevel;
• Management Deprez BVBA, permanently represented by Mrs Veerle Deprez.
• Mr Alain Keppens

In accordance with article 526bis of the Company Code, the Group declares that the president of the Audit Committee, Mr Frank Donck, complies with the independence principles and disposes of the sufficient aptitudes with regard to accounting and auditing matters.

The Chief Financial Officer is invited to the Audit Committee meetings.

The Audit Committee has engaged with the following subjects throughout the financial year ending 31 March 2012:

• The half year and annual results and reviewing the consistent application and any changes in valuation and accounting principles;
• The course and evaluation of the external audit;
• Evaluation and control of the one-to-one rules;
• The course and evaluation of the internal audit;
• Internal control;
• Various items of attention.

After every meeting the chairman of the Audit Committee reports to the Board of Directors on these items. The Audit Committee advises the Board of Directors on these items

The Audit Committee met on 5 occasions over the past financial year. The statutory auditor was invited to and attended 3 meetings.

No mination and Remuneration committee

A Nomination & Remuneration Committee has also been established within the Board of Directors. The Nomination & Remuneration Committee supports the Board of Directors in the execution of its task in the preparation of the (re-)appointment of directors and appointments of the Members of the Management Committee, and in the execution of its tasks with respect to the remuneration policy and the individual compensation of Directors and Members of the Management Committee.

The Nomination and Remuneration committee has 3 members:

• The Marble BVBA, permanently represented by Mr Luc Van Nevel;
• Ardiego BVBA, permanently represented by Mr Arthur Goethals;
• Management Deprez BVBA, permanently represented by Mrs Veerle Deprez;

Mr. Peter Maenhout is also invited to the meetings of the Nomination and Remuneration Committee as an observer.

The Chief Financial Officer and the Chief Executive Officer are also invited to the meeting. The CEO takes part with an advisory vote in the meetings of the Nomination and Remuneration Committee when it discusses the remuneration of the other executive directors. The CFO and the CEO do not take part in the discussions on their own remuneration.

The Nomination and Remuneration Committee met on 3 occasions on the past financial years to discuss, among other things:

• Determination of the variable remuneration for the executive directors;
• Discussion on the composition of the Board of Directors and the expired mandates or the vacancies to be filled in;
• Proposal of new directors;
• Remuneration of the corporate management team and other key managers.

Attenda nce

01/2011 – 03/2012 (15 months)	Board of Directors	Audit Committee	Nomination and Remuneration Committee
Total number
BVBA The Marble	18/18	5/5	3/3
NV Deprez Invest	16/18
NV Vijverbos	17/18
BVBA Management Deprez	18/18	4/5	3/3
BVBA Bonem	16/18
Frank Donck	11/11	4/4
BVBA Ardiego	9/11		1/2
Jean-Michel Jannez	6/11
Jozef Marc Rosiers	5/7
Peter Maenhout	2/2
Alain Keppens	2/2
Patrick Moermans	3/7	1/1
Gert Vanhuffel	8/11	1/2
Luc Vandewalle	18/18	5/5	3/3

Management Commit t e e

The Group invests not only in machines, but more importantly in people. Continuing expansion, automation and optimisation require a strong team of motivated and competent people. People are central to the company. A strong group spirit is nourished by a dynamic management team. Experience and new ideas need to go hand in hand.

The Management Committee consists per 31 March 2012 of:

• Deprez Invest NV, permanently represented by Mr. Hein Deprez, CEO;
• The New Mile BVBA, permanently represented by Mr. Steven D'haene, CFO;
• Vijverbos NV, permanently represented by Mr. Herwig Dejonghe, COO;
• Haluvan BVBA, permanently represented by Mr. Hans Luts, responsible for the Deep-frozen Vegetable division;
• Dynobryon BVBA, permanently represented by Mr. Erwin Wuyts, responsible for Potato division; and
• Mr. Dominiek Stinckens, responsible for the Canning division.

The Board of Directors has mandated the Management Committee to undertake the day-to-day activities of the company. In the light of the company's values, its approach to risk and the key elements of its policy, the Management Committee has sufficient leeway to present and implement the company strategy.

Statutory auditor

The auditing of the company's annual accounts has been entrusted to Deloitte Bedrijfsrevisoren BV under the form of a CBVA, whose registered office is at Berkenlaan 8B, 1831 Diegem, represented by Mr Kurt Dehoorne, auditor, whose office is at 8500 Kortrijk, President Kennedypark 8A.

This involves auditing the statutory annual financial statements of PinguinLutosa NV, Pinguin Langemark NV, Pinguin Salads BVBA, PinguinLutosa Foods NV, Vanelo NV and G&L Van Den Broeke-Olsene NV, as well as the consolidated financial statements of PinguinLutosa NV. As part of the consolidation exercise, partial audits were undertaken of the foreign subsidiaries Pinguin Aquitaine SAS, D'aucy do Brasil Ltda, PinguinLutosa Deutschland Gmbh, M.A.C. Sarl, Lutosa France Sarl, Lutosa UK Ltd., Lutosa España SA, Lutosa América Latina Ltda, PinguinLutosa Japan K.K., PinguinLutosa Foods Shanghai Ltd., PinguinLutosa Italia Srl., PinguinLutosa CEE Gmbh, Compagnie Générale de Surgélation – Bretagne Surgel S.A.S., CGB S.A.S., Pinguin Comines S.A.S., PinguinLutosa Foods Polska Sp. Z.o.o., PinguinLutosa Foods Hungary Kft.

The auditing of the statutory annual accounts of PinguinLutosa Foods UK Limited has been entrusted to Deloitte & Touche LLP, Chartered Accountants and Registered Auditors, Cambridge, UK, represented by Mr Richard Knight.

The auditing of the statutory annual accounts of Scana Noliko Holding NV, Scana Noliko NV, Scana Noliko Rijkevorsel NV, en B.N.D. Internationale Telersvereniging CVBA has been entrusted to Deloitte Bedrijfsrevisoren / Réviseurs d'Entreprise B.V. under the form of a C.V.B.A., represented by Mr. Dominique Roux, auditor.

Remuneration report

Description of the procedure used during the past financial year in order (i) to develop a remuneration policy for the non-executive directors and members of the executive management and (ii) to set the remuneration of the individual non-executive directors and members of the executive management

The remuneration policy and annual fees for attending the meeting for non-executive directors is set by the Board of Directors at the proposal of the Nomination and Remuneration Committee, thereby taking into account market standards, the listed character and the scope of the company and the industry of PinguinLutosa. The remuneration policy set by the Board of Directors and the attendance fees are subsequently approved by the General Meeting.

The remuneration policy for the members of the Management committee is set by the Board of Directors at the recommendation of the Nomination and Remuneration Committee. This procedure takes place in absence of the members of the Management committee. The remuneration is set to attract, motivate and retain highly qualified and promising management talent, and to ensure that the interests of managers and all stakeholders of PinguinLutosa are aligned. This is done according to available benchmarking studies.

Statement of the remuneration policy for non-executive directors and executive management, as applicable for the past financial year

The remuneration of the independent and the other non-executive directors is made up of a fixed remuneration and a fee for attending the meetings of the Board and the Committees within the Board (including attendance by video conferencing or telephone conferencing), payable semi-annually. The remuneration also pays due regard to a director's specific role, i.e. as Chairman of the Board of Directors, Chairman or member of a Committee and the associated responsibilities and expenditure of time.

On the proposal of the Nomination and Remuneration Committee, the General Meeting may further decide to grant a fixed remuneration to one or more independent or other non-executive directors.

The directors that have executive functions within PinguinLutosa NV or in one of its subsidiaries do not receive an additional compensation for their mandate as director. They do receive a management remuneration as members of the Management committee.

Deprez Invest NV was appointed CEO by the Board of Directors on 14 July 2011. Deprez Invest NV receives a fixed remuneration as CEO. Deprez Invest NV does not receive any other additional compensation such as attendance fees for the Board of Directors.

The remuneration of the CEO and the members of the Management committee is set by the Board of Directors at the recommendation of the Nomination and Remuneration Committee and consists of a fixed part and a variable part. The variable part always relates to performance of the past financial year. The variable part depends on the function and varies from 0 to 50% of the annual remuneration.

There are no performance bonuses in shares, options or other rights to acquire shares. The remuneration policy followed was not significantly adapted after the end of the financial year.

The remuneration policy is evaluated annually by the Nomination and Remuneration Committee. The Company has not decided to make major changes to its remuneration policy over the next two financial years.

Remuneration of the non-executive directors

The Chairman of the Board of Directors receives a fixed remuneration of €90,000 a year. He receives no additional remuneration such as fees for attending the Board of Directors or committee meetings.

The independent non-executive directors receive a remuneration that depends on their presence at board and committee meetings. This remuneration amounts to €1,500 per meeting. The non-executive directors receive in addition a fixed remuneration of €15,000 a year.

No variable remuneration was awarded to directors for performance with respect to their mandate for the financial year ending 31 March 2012.

There are no pension plans for directors, nor was there any longterm remuneration, severance pay or remuneration in shares paid out to the directors in the past financial year

The total remuneration of Board members for the exercise of their mandate amounts to €0.4 million.

Directors' remuneration 01/01/2011 - 31/03/2012 (15 months) (in thousands of €)	remuneration Fixed	Attendance fees	Total

BVBA The Marble	112.5		112.5
NV Deprez Invest
NV Vijverbos
BVBA Management Deprez	18.75	37.5	56.25
Gert Vanhuffel	11.25	13.5	24.75
Luc Vandewalle	3.75	6.0	9.75
Patrick Moermans	7.5	6.0	13.5
BVBA Bonem	18.75	24.0	42.75
Frank Donck	11.25	22.5	33.75
BVBA Ardiego	11.25	15.0	26.25
Jean-Michel Jannez	11.25	9.0	20.25
Jozef Marc Rosiers	7.5	7.5	15.00
Peter Maenhout	3.75	3.0	6.75
Alain Keppens	3.75	1.5	5.25
Total	221.25	145.5	366.75

Remuneration of the CEO and the COO

The CEO and the COO have a management contract and receive a fixed remuneration that includes social security charges, taxes and group insurance.

The variable remunerations are linked to the achievement of qualitative criteria, taking into account the individual performance, and quantitative criteria, taking into account the results of the Pinguin-Lutosa Group.

Following a management change Deprez Invest NV was appointed on 14 July 2011 by the Board of Directors as CEO. On the same date Vijverbos NV was appointed as COO.

The annual remuneration of Deprez Invest NV in the capacity of CEO amounted to €120,000 for the financial year 2011-2012. No variable remuneration was awarded.

The remuneration received by Vijverbos NV for its performance as CEO and subsequently as COO amounted to €0.4 million. No variable remuneration was awarded.

No additional bonuses were paid in the framework of a pension plan. No non-statutory were paid out, not in cash, nor in the form of share options or warrants.

Remuneration CEO and COO 01/01/2011 - 31/03/2012 (15 months) (in thousands of €)	remuneration Fixed	Total
Deprez Invest NV	120	120
Vijverbos NV	375	375

Remuneration of the members of the Management committee

In 2011-2012, members of the Management committee (excluding the CEO and COO) received a remuneration of €0.9 million. This included a variable remuneration of €0.1 million. The variable compensation was linked to the achievement of both qualitative criteria, taking into account individual performance, and quantitative criteria, taking into account the results.

A number of the Management committee members have a selfemployed status, and receive a fixed remuneration which includes all social security charges, taxes, pension savings and a company car.

For the members of the Management Committee who exercise their task as employees the gross wages were included.

With respect to the members of the Management committee that only were members of the management or of the Group during a part of the year, only the relevant amounts were included. It should be noted that the composition was changed during the past financial year.

The increase in the past financial year compared to 2010 is due to the fact that there are now 5 members (in addition to the CEO) included in the committee for a full year, while last year there were 2 members, although a number of persons were only included for part of the year in the committee.

No non-statutory benefits were paid out, either in cash or in the form of share options or warrants.

No share options or other rights have expired or were exercised by the members of the Management committee during the financial year.

Remuneration Management commit tee members 01/01/2011 – 31/03/2012 (15 months) (in thousands of €)	31/03/2012	31/12/2010
Number of persons at year end	6	3
- Basic remuneration	766	329
- Variable remuneration	83	16
- Remuneration as director of subsidiaries
- Unpaid debt
- Severance pay
- Other benefits	79	25
Total	928	370

The other benefits consist mainly of the reimbursement of expenses incurred by members who operate on a self-employed basis on behalf of the PinguinLutosa Group: travel and accommodation expenses, etc. For the members who operate as employees, the other compensations concern the fringe benefits such as pension plan on the basis of a defined contribution from the employer or the reimbursement of incurred travel and accommodation expenses. For the Group executives operating on a self-employed basis, their services are invoiced to PinguinLutosa NV. The above-mentioned amounts are therefore VAT exclusive. For members who operate as employees the gross annual remuneration is included. During the financial year, "fixed" employer contributions were made in an amount of 6,315 euros.

Evaluation criteria for the remuneration of the executive directors and members of the Management committee

The members of the management team (including CEO and COO) receive a variable remuneration in addition to the fixed remuneration. This bonus plan is 75% based on quantitative REBITDA targets and 25% on qualitative personal objectives related to the exercise of the job. This can involve the efficiency of certain processes, the delivery of a number of projects, HR-related matters, etc.

The REBITDA targets are a combination of, firstly, the REBITDA target of the PinguinLutosa group and, secondly, the REBITDA targets of the respective divisions. Each division manager is evaluated in function of the group REBITDA and of his own division REBITDA on the basis of individual targets which are set at the beginning of the financial year in consultation with the CEO.

For the division manager, the division REBITDA has priority, but also the group REBITDA is taken into account. The CFO and COO are exclusively evaluated on the group REBITDA. Deprez Invest NV only receives a fixed annual remuneration in his role of CEO and does not receive a variable remuneration.

The evaluation period corresponds to the financial year of the company. The payment takes place in the following year. The quantitative calculation is performed on the basis of audited figures by the CFO. The evaluation of the personal qualitative objectives is done by the CEO and the COO in consultation with the Nomination and Remuneration Committee and the Board of Directors.

The bonus plan is submitted each year to the Nomination and Remuneration Committee. Payments are not deferred over several years. The bonuses are definitively acquired.

Article 520ter, 2nd paragraph, Company Code is clear on the subject: "(…) Unless there are provisions of the articles of association to the contrary or there has been express approval by the General Meeting of Shareholders, at least one-fourth of the variable remuneration for an executive director in a company whose shares are admitted for trading on a market as intended in article 4 must be based on performance criteria that are established in advance and objectively measurable over a period of at least two years, and at least another fourth must be based on performance criteria that are established in advance and objectively measurable over a period of at least three years. The obligation set forth in the preceding paragraph does not apply if the variable remuneration concerns one-fourth or less of the annual remuneration. (…)"

PinguinLutosa opts to always have the variable compensations of the executive directors approved by the General Meeting, irrespective of the size of such variable compensation.

In addition to the annual bonus plan, the Nomination and Remuneration Committee can decide ad hoc to award an exceptional bonus of at most 25% of the annual compensation when exceptional events have occurred or when special services were provided that were not planned at the beginning of the financial year concerned.

Declaration on an individual basis of the main provisions of the contractual relationship concerning severance pay with the CEO and with each of the executive managers.

Number of months contractually stipulated

Severance pay (in number of months)	Number of months
Deprez Invest NV	3
Vijverbos NV	18
The New Mile BVBA	6
Dynobryon BVBA	6
Haluvan BVBA	3
Dominiek Stinckens	25

In the event of departure of an executive manager (including the CEO), the Board of Directors justifies and decides, at the proposal of the Remuneration Committee, whether the parties involved qualify for the departure compensation, and the basis on which it is calculated. No executive managers left during the past year..

Recovery provision

The company does not dispose of recovery rights with regard to the variable remuneration of the executive managers or the CEO, should it be awarded on the basis of incorrect financial data.

Tra nsactio ns with related parties

Pursuant to the Corporate Governance Code, the Board of Directors has developed a policy with respect to transactions with related parties that do not fall under the conflict of interest regulations. Under this regime, all Directors, their permanent representatives and all members of the Management Committee shall give prior notice to the Board of Directors of all proposed transactions between them and PinguinLutosa or one of its subsidiaries. Only the Board of Directors is authorised to decide whether PinguinLutosa or the subsidiary concerned may enter into such a transaction. The Board of Directors will provide the reasons for its decision in its minutes and, in particular, will ensure that the transaction takes place at market terms. By way of exception, this prior approval by the PinguinLutosa Board of Directors is not required if the transaction concerned fits within the normal business activities of Pinguin-Lutosa or its subsidiary. In that case, the Board of Directors shall approve all transactions annually.

Application Art. 523 of the Company Code

Article 523 of the Company Code provides for a special procedure within the Board of Directors in the event that one or more directors or one or more permanent representatives of a directorcompany have a possible financial interest that conflicts with one or more decisions or transactions falling within the Board of Directors´ scope of authority. This procedure was applied four times in the past financial year.

Board of Directors´ meeting of 14 July 2011

On 14 July 2011, the Board of Directors had to decide on the approval (i) of the acquisition of the Scana Noliko Group and the subsequent real-estate transaction and (ii) the club deal financing. Vijverbos NV, Management Deprez BVBA, Deprez Invest NV, Bonem BVBA and Jean-Michel Jannez as director and Herwig Dejonghe, Veerle Deprez, Hein Deprez and Marc Ooms as permanent representative of a director-company had a potential conflict of interest in relation to those decisions.

This application was recorded as follows:

"The Chairman explained that the Board of Directors had been convened in order to deliberate and decide within the framework of the planned acquisition of 100 % of the shares of Scana Noliko Holding NV by the Company from Gimv NV, Adviesbeheer Gimv Buyouts & Growth 2004 NV (hereafter jointly Gimv) and EFICO BVBA (EFICO BVBA) and a number of other shareholders for a total amount of €117,360,000, whereby Gimv NV, Gimv-XL Partners Comm.VA and Adviesbeheer Gimv-XL NV (hereafter jointly Gimv-XL) will provide a subordinated loan to the Company for an amount of €36,000,000 and the Company later this year will implement a capital increase of a minimum of €44,000,000 (the Capital Increase), a part of which will be subscribed by Gimv-XL (in the amount of around €24,000,000) and by Food Invest International NV (Food Invest International) (in the amount of around €8,484,000) and for which in part a call will be made on public savings (in the amount of a minimum of €11,516,000) (the Scana Noliko Transaction).

Within this framework, the original Senior Multicurrency Term and Revolving Facilities Agreement (Original Facilities Agreement) and the original Intercreditor Agreement (Original Intercreditor Agreement) of 8 January 2008 must be amended.

I. PRELIMINARY: APPLICATION OF ARTICLE 523 OF THE COM-PANY CODE.

1. Before proceeding to deal with the various agenda items, Vijverbos NV, Management Deprez BVBA, Deprez Invest NV, Bonem BVBA and Jean-Michel Jannez in their capacity as director of the Company, and Herwig Dejonghe, Veerle Deprez, Hein Deprez and Marc Ooms in their capacity of permanent representative under article 61, § 2 of the Company Code of the following director-companies, Vijverbos NV, Management Deprez BVBA, Deprez Invest NV respectively Bonem BVBA, asked to make a declaration in application of article 523 of the Company Code.

2. They requested that their statement in application of article 523 of the Company Code be included in the minutes of the Board of Directors´ meeting.

Vijverbos NV and Herwig Dejonghe declared that they, in application of article 523, §1, paragraph 4 of the Company Code, will not participate in the deliberation and the voting on all of the agenda items, as set forth under sub IV, which will be dealt with within the framework of the deliberations and the decisions concerning the refinancing (Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and to the original Intercreditor Agreement and the additional finance documents).

Management Deprez BVBA, Deprez Invest NV, Bonem BVBA, Jean-Michel Jannez, Veerle Deprez, Hein Deprez and Marc Ooms declared that, in application of article 523, §1, paragraph 4 of the Company Code, they will not participate in the deliberation and the voting on all agenda items, as set forth under sub III and sub IV, which will be dealt with within the framework of the deliberations and the decisions concerning the Scana Noliko Transaction respectively with regard to the refinancing (Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and to the original Intercreditor Agreement and the additional finance documents).

They undertook to inform the statutory auditor of the Company of the application of article 523 of the Company Code immediately after the Board of Directors´ meeting.

3. They made the following declaration concerning the consequences of the transactions that will be decided on by the Board of Directors: (a) The Board of Directors of the Company will ratify the binding term sheet of 11 March 2011 and approve the agreement to transfer shares of Scana Noliko Holding NV, as well as the related Subordinated Loan with additional issue of warrants and the Investment and Shareholders´ Agreement.

Management Deprez BVBA, Deprez Invest NV, Bonem BVBA and Jean-Michel Jannez in their capacity as director of the Company and Veerle Deprez, Hein Deprez and Marc Ooms in their capacity of permanent representative under article 61, § 2 of the Company Code of the following director-companies, Management Deprez BVBA, Deprez Invest NV respectively Bonem BVBA, declared that they have a functional financial conflict of interest in the ratification respectively the approval of the above-mentioned agreements: they are not only director respectively permanent representative under article 61, § 2 of the Company Code of a director-company of the Company, but also director respectively permanent representative under article 61, § 2 of the Company Code of a director-company of Food Invest International NV respectively also the controlling shareholder of Food Invest International NV, i.e. one of the contracting parties of the binding term sheet of 11 March 2011, the agreement to transfer shares of Scana Noliko Holding NV, the related Subordinated Loan with additional issue of warrants and the Investment and Shareholders´ Agreement.

The Company will, as a result of the Scana Noliko Transaction, be able to (i) reinforce its market position and become active in a new market segment, i.e. the sector of high-quality preserved foods in glass jars and cans, (ii) combine the competencies of the Scana Noliko group with regard to agriculture, production, technology and R&D with the extensive commercial network of the PinguinLutosa group, (iii) facilitate the relationship with the farmers in one of the most important agricultural regions, namely Limburg-Haspengouw, and (iv) further profile itself as an international food group with Flemish anchoring that strives for optimisation and stabilisation of the results. The Board of Directors concluded that the binding term sheet is in the interest of the Company.

(b) The Board of Directors of the Company will approve the transfer of the real properties in Rijkevorsel, owned by Scana Noliko Rijkevorsel NV, the lease, to be concluded between De Binnenakkers NV as lessor and Scana Noliko Rijkevorsel NV as lessee, and the agreement to transfer the shares of Scana Noliko Real Estate NV and the agreement to amend the lease, concluded on 16 December 2010 between Scana Noliko Real Estate NV as lessor and Scana Noliko NV as lessee.

Management Deprez BVBA, Deprez Invest NV, Bonem BVBA and Jean-Michel Jannez in their capacity as director of the Company and Veerle Deprez, Hein Deprez and Marc Ooms in their capacity of permanent representative under article 61, § 2 of the Company Code of the following director-companies, Management Deprez BVBA, Deprez Invest NV respectively Bonem BVBA, declared that they have a functional financial conflict of interest in the approval of the above-mentioned real-estate transaction and the above-mentioned leases: they are not only director respectively permanent representative under article 61, § 2 of the Company Code of a director-company of the Company, but also director respectively permanent representative under article 61, § 2 of the Company Code of a director-company of Food Invest In- ternational NV respectively also the controlling shareholder of Food Invest International NV, i.e. the prospective buyer of all of the shares of Scana Noliko Real Estate NV and the controlling shareholder of the companies that will acquire the real properties from the companies of the Scana Noliko Group.

In this connection the Company will also authorise its subsidiaries in application of article 524, § 5 of the Company Code to approve the above-mentioned real-estate transaction and the above-mentioned agreements.

The Scana Noliko real estate transaction is a part of the Scana Noliko Transaction, whose importance for the PinguinLutosa group was demonstrated in sub (a) above. Moreover the Scana Noliko real-estate transaction reduces the financing burden for the company through the acquisition of the shares of Scana Noliko Holding NV.

(c) The Board of Directors of the Company will approve the Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and to the original Intercreditor Agreement, and the additional finance documents, and thereby the following transactions: (i) the refinancing of the existing financings that are running at the PinguinLutosa group, (ii) the financing of the expansion plans within the PinguinLutosa group, (iii) the financing of the acquisition of the Scana Noliko Holding NV and its subsidiaries, and (iv) the refinancing of the existing financings that are running at the Scana Noliko Group. In the adapted credit facility the existing securities are confirmed and new securities are established.

Vijverbos NV, Management Deprez BVBA, Deprez Invest NV, Bonem BVBA, Jean-Michel Jannez, Herwig Dejonghe, Veerle Deprez, Hein Deprez and Marc Ooms declared that they have a functional financial conflict of interest in the approval of the Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and to the original Intercreditor Agreement, as well as the additional Finance Documents: they are not only director respectively permanent representative under article 61, § 2 of the Company Code of a director-company of the Company, but also director respectively permanent representative under article 61, § 2 of the Company Code of a director-company of several subsidiaries of the Company which as Original Obligors respectively as Original Guarantors are party to the Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and to the original Intercreditor Agreement and to the additional finance documents, respectively of Food Invest International NV respectively also the controlling shareholder of Food Invest International NV.

4. After having made the above-mentioned declarations, the other directors declared that:

(a) Vijverbos NV and Herwig Dejonghe in application of article 523, §1, paragraph 4 of the Company Code did not participate in the deliberation and the voting on all agenda items, as set forth under sub IV, which are dealt with within the framework of the deliberations and the decisions concerning the refinancing (Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and to the original Intercreditor Agreement and the additional finance documents), and

(b) Management Deprez BVBA, Deprez Invest NV, Bonem BVBA, Jean-Michel Jannez, Veerle Deprez, Hein Deprez and Marc Ooms in application of article 523, §1, paragraph 4 of the Company Code did not participate in the deliberation and the voting on all agenda items, as set forth under sub III, sub IV and sub V, which are dealt with within the framework of the deliberations and the decisions concerning the Scana Noliko Transaction respectively with regard to the refinancing (Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and to the original Intercreditor Agreement and the additional finance documents).

The other directors declared that the above-mentioned directors respectively the above-mentioned permanent representatives under article 61, § 2 of the Company Code of a director-company left the meeting prior to dealing with the respective agenda items and did not participate in the deliberation and the voting.

II. DELIBERATION AND RESOLUTIONS CONCERNING THE SCANA NOLIKO TRANSACTION

II.1. Confirmation of the binding term sheet of 11 March 2011.

1. The Chairman stated that on 11 March 2011 a binding term sheet concerning the purchase of shares in Scana Noliko Holding NV and the investment of Gimv-XL in the Company was signed between the Company, Gimv NV, Adviesbeheer Gimv Buyouts & Growth 2004 NV, Gimv-XL Partners Comm.VA, Adviesbeheer Gimv-XL NV, Food Invest International NV, Deprez Holding NV and Hein Deprez, in which the main conditions were stipulated for the various transactions that will take place within the framework of the Scana Noliko Transaction (the Term Sheet).

The members of the Board of Directors took note of the content of the Term Sheet and considered that the Scana Noliko Transaction, whose most important conditions are contained in the Term Sheet, will enable the Company to (i) reinforce its market position and become active in a new market segment, i.e. the sector of high-quality preserved foods in glass jars and cans, (ii) combine the competencies of the Scana Noliko group with regard to agriculture, production, technology and R&D with the extensive commercial network of the Company, (iii) facilitate the relationship with the farmers in one of the most important agricultural regions, namely Limburg-Haspengouw and (iv) further profile itself as an international food group with Flemish anchoring that strives for optimisation and stabilisation of the results. The Board of Directors concluded that the Term Sheet is in the interest of the Company and its subsidiaries.

2. The Chairman proceeded to a discussion of the conditions and modalities of the Term Sheet. None of the directors had any comments.

3. Resolution: All directors who are entitled to participate in the voting unanimously decide to ratify the Term Sheet. Mr Frank Donck and Ardiego bvba with permanent representative Mr Arthur Goethals notified the Board of Directors that they were appointed as independent director only after the signing of the binding term sheet and ask that this be mentioned in these minutes.

II.2. Approval of the agreements to transfer the shares in Scana Noliko Holding NV.

1. The Chairman stated that the Company within the framework of the Scana Noliko Transaction will acquire 100% of the shares in Scana Noliko Holding NV (SN Holding) from the current shareholders of SN Holding for a total purchase price of €117,360,000, and this in the following way:

• 1,015,950 Class A shares from EFICO BVBA (the EFICO Shares);
• 18,603,530 Class B shares from Gimv NV (the Gimv Shares);
• 663,925 class C shares from various individual shareholders (the C Shares).

2. The Chairman stated that the Company as buyer and Gimv NV as seller had agreed to conclude, on or around 18 July 2011, a purchase agreement with regard to the transfer of the Gimv Shares (the Gimv SPA).

The Chairman stated that the Company as buyer and EFICO BVBA as seller had agreed to conclude, on or around 18 July 2011, a separate purchase agreement with regard to the transfer of the EFICO Shares (the EFICO SPA).

The Chairman stated that Gimv is assuming a best efforts obligation in order to ensure that the C Shares will be transferred by their holders to the Company in conformity with a share transfer agreement to be concluded with each of the holders of the C Shares individually (the C SPA). The Gimv SPA provides that, if the holders of the C Shares refuse to sign and execute the C SPA, the Company will make application of art. 12.D of the articles of association of SN Holding that provides for a tag-along obligation. If the Company then is still not in possession of all C Shares, it will, in accordance with article 513 of the Company Code, initiate a squeeze-out procedure in order ultimately to acquire all C Shares.

3. The Chairman proceeded to a discussion of the conditions and modalities of the Gimv SPA and the EFICO SPA. None of the directors had any comments.

With reference to the considerations under agenda item III.1., the Board of Directors concluded that the Gimv SPA and the EFICO SPA are in the interest of the Company. The Board of Directors declared that it had taken note of the final drafts of the Gimv SPA and the EFI-CO SPA.

4. Resolution: All directors who are entitled to participate in the voting unanimously decide to approve the Gimv SPA and the EFICO SPA.

II.3. Approval of the Subordinated Loan.

1. The Chairman stated that Gimv-XL and the Company have agreed, in order to provide for a part of the financing of the Scana Noliko Transaction, to conclude an agreement on the basis of which Gimv-XL at the time of the transfer of the shares in SN Holding, will provide to the Company a subordinated loan for an amount of €36,000,000, with an annual interest rate of 6.75% (5% payable per quarter and 1.75% capitalised annually in conformity with article 1154 of the Civil Code) and with a term of 7 years (the Subordinated Loan).

2. The Chairman proceeded to a discussion of the conditions and modalities of the Subordinated Loan. None of the directors had any comments.

Taking into account the considerations for the Scana Noliko Transaction, as set forth under agenda item III.1., and considering the fact that the Subordinated Loan enables the Company to obtain, at reasonable market conditions, (a part of) the necessary financing for the Scana Noliko Transaction, the Board of Directors decided that the Subordinated Loan is in the interest of the Company. The Board of Directors took note of the final draft of the Subordinated Loan.

3. Resolution: All directors who are entitled to participate in the voting unanimously decide to approve the Subordinated Loan.

II.4. Approval of the Investment and Shareholders´ Agreement.

1. The Chairman stated that Gimv-XL had undertaken vis-à-vis the Company to subscribe to the Capital increase in an amount of €24,000,008.52 with a view to obtaining sufficient financial resources in order to finance the Scana Noliko Transaction (the Gimv Capital Increase).

Moreover the Company will at the latest on 31 December 2011 issue warrants to Gimv-XL NV on condition that the Subordinated Loan was made available to the company by Gimv-XL NV (the Warrants). As a result of the Gimv Capital Increase and the Warrants, Gimv-XL NV will become a shareholder of PinguinLutosa NV.

In this respect PinguinLutosa NV, Gimv-XL NV, Food Invest International NV, and Mr Hein Deprez agreed to conclude, on or around 18 July 2011, an investment and shareholders´ agreement pursuant to which:

(i) Gimv-XL NV undertakes to subscribe to the Gimv Capital Increase in the amount of €24,000,008.52 for the issue of 2,056,556 shares at an issue price of €11.67 per share, distributed as follows:

	Capital	shares
a. Gimv-XL Partners:	€14,124,130.98	1,210,294
b. Gimv:	€8,641,389.93	740,479
c. Adviesbeheer Gimv-XL:	€1,234,487.61	105,783

(ii) the Company undertakes to issue a total number of Warrants equal to €36,000,000 (the amount of the Subordinated Loan) divided by the issue price, whereby the issue price is equal to either a minimum of €12.75 or the thirty-day average stock exchange price of the shares of the Company on Euronext Brussels prior to the issue of the Warrants, if this should be higher than €12.75;

(iii) Gimv-XL, Food Invest International NV, and Mr Hein Deprez make agreements with regard to their mutual relationship as (indirect) shareholders of the Company and the management of the Company,

hereafter the Investment and Shareholders´ Agreement.

2. The Chairman proceeded to a discussion of the conditions and modalities of the Investment and Shareholders´ Agreement. None of the directors had any comments.

The members of the Board of Directors took note of the final draft of the Investment and Shareholders´ Agreement.

The members of the Board of Directors considered that the Gimv Capital Increase will provide the Company with (a part) of the necessary financing for the Scana Noliko Transaction and that Gimv-XL NV, thanks to its extensive experience and expertise in the field of investments in and the management of companies, in its capacity of shareholder can signify a great added value for the PinguinLutosa group and the Company in particular. Moreover, the members of the Board of Directors considered that the issue of the Warrants forms part of what was agreed in the Term Sheet with regard to the Subordinated Loan and that the possible exercise of the warrants by Gimv-XL will provide the Company with fresh capital. The Board of Directors concluded that the Investment and Shareholders´ Agreement is in the interest of the Company.

3. Resolution: All directors who are entitled to participate in the voting unanimously decide to approve the Investment and Shareholders´ Agreement.

III. DELIBERATION AND RESOLUTIONS CONCERNING THE RE-FINANCING (AMENDMENT AND RESTATEMENT AGREEMENT TO THE ORIGINAL SENIOR MULTICURRENCY TERM AND RE-VOLVING FACILITIES AGREEMENT AND THE ORIGINAL INTER-CREDITOR AGREEMENT AND THE ADDITIONAL FINANCE DO-CUMENTS).

II.1. Approval of the Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and the original Intercreditor Agreement and the additional finance documents.

1. The Chairman stated that the Company on 8 January 2008 concluded a Senior Multicurrency Term and Revolving Facilities Agreement in the amount of €140,000,000 within the framework of a refinancing of the then-existing credit facility, after the acquisition by the Company of the shares of the companies of the Lutosa group (the Credit Facility).

The Credit Facility was entered into between (i) the Company (formerly Pinguin NV), PinguinLutosa Foods SA (formerly Van den Broeke-Lutosa SA) and PinguinLutosa Foods UK Ltd. (formerly Pinguin Foods UK Ltd.) as original borrowers, (ii) the Company, Vanelo NV, G&L Van den Broeke-Olsene NV, Primeur NV (merged with Vanelo NV), Moerbos NV (merged with Vanelo NV), PinguinLutosa Foods SA, Pinguin Langemark NV and PinguinLutosa Foods UK Ltd. as original guarantors and (iii) a syndicate of banks led by ING Belgium NV as arranger and consisting of Fortis Bank NV, KBC Bank NV, Dexia Bank NV, Rabobank and Landbouwkrediet Bank NV. The entry into this Cre- dit Facility and the provision of a guarantee and certain securities was approved in principle by the Board of Directors of the Company on 7 December 2007 and ratified in compliance with art. 524 of the Company Code on 3 June 2008.

2. The Chairman stated that the PinguinLutosa group is negotiating an Amendment and Restatement Agreement within the framework of a proposed refinancing and of the financing of the Scana Noliko Transaction (the Amendment and Restatement Agreement) with the aim of amending and expanding the existing Credit Facility.

As an annex to the Amendment and Restatement Agreement, a restated facilities agreement will be attached that will represent the Credit Facility as amended and expanded by the Amendment and Restatement Agreement (the Restated Facilities Agreement).

The Amendment and Restatement Agreement provides for the following changes:

(i) Accession of new parties:

Pursuant to the Amendment and Restatement Agreement, the following parties will accede to the Restated Facilities Agreement: Scana Noliko Holding NV and Scana Noliko NV as new borrowers (Borrowers), Scana Noliko Holding NV, Scana Noliko NV and Scana Noliko Rijkevorsel NV as new guarantors (Guarantors) and ING Belgium NV/ SA, Banque LBLux SA and LCL Le Crédit Lyonnais as new banks (Lenders).

(ii) Rescheduling of loans:

Pursuant to the Amendment and Restatement Agreement, the loans provided under the Credit Facility are rescheduled as explained below and increased to a total amount of €250,000,000:

Facility A, Tranche 1:	a multicurrency term loan facility that will be applied for the refinancing of the price for the acquisition of the shares in the companies that form part of the Lutosa group and the related acquisition costs;
Facility A, Tranche 2:	a multicurrency term loan facility that will be applied for the financing of (a part of) the price of the shares of SN Holding and the acquisition costs associated with the Scana Noliko Transaction;
Facility A, Tranche 3:	a multicurrency term loan facility that will be used as bridging credit for the period until the capital increase for the part for which a call will be made on public savings;
Facility B, Tranche 1:	a multicurrency term loan facility that will be applied for the refinancing of (i) the existing debts of the Pin guinLutosa group and (ii) the existing debts of the Scana Noliko Group;
Facility B, Tranche 2:	a multicurrency term loan facility that will be used for the financing of the planned investments and capital expenditure;
RC facility:	a multicurrency revolving credit facility that will be applied for the general operating funds of the group.

(iii) Additional securities:

Pursuant to the Amendment and Restatement Agreement, the Company will provide the following additional guarantee and additional securities for its obligations and for the obligations of the other debtors under the Restated Facilities Agreement:

- a share pledging agreement between the Company as pledgor and ING Bank N.V. as security agent, relating to 100 % of the shares in Scana Noliko Holding NV.

- an agreement to pledge all rights and claims against the sellers under the Scana Noliko Transaction documents between the Company and ING Bank N.V., as security agent.

3. Otherwise, the Amendment and Restatement Agreement provides that the guarantees and securities granted under the Credit Facility are maintained and are extended to the amended Credit Facility. In addition, the validity of all existing documentation regarding the amended Credit Facility is confirmed.

The hereafter mentioned guarantees and securities that were already granted under the original Senior Multicurrency Term and Revolving Facilities Agreement are also regarded as a security for the amended Credit Facility under the Amendment and Restatement Agreement:

(a). in Belgium:

- the share pledging agreement of 8 January 2008 between the Company as pledgor and ING Bank N.V. as security agent, relating to 100 % of the shares in G&L Van den Broeke-Olsene NV, Vanelo NV and Moerbos NV (which was absorbed by Vanelo NV on 31 December 2008).

- the supplementary agreement of 23 January 2009 between the Company as original pledgor, Vanelo NV as first additional pledgor, G&L Van den Broeke-Olsene NV as second additional pledgor and ING Bank N.V. as security agent, as supplement to the pledging agreement of 8 January 2008 relating to 100 % of the shares in G&L Van den Broeke-Olsene NV, Vanelo NV and Moerbos NV (which was absorbed by Vanelo NV on 31 December 2008).

- the share pledging agreement of 8 January 2008 between Pinguin-Lutosa Foods SA (formerly Van den Broeke-Lutosa SA) and Herwig Dejonghe as pledgors and ING Bank N.V. as security agent relating to 100 % of the shares in Pinguin Langemark NV.

- the share pledging agreement of 8 January 2008 between G&L Van den Broeke-Olsene NV as pledgor and ING Bank N.V. as security agent relating to 100 % of the shares in Primeur NV.

- the share pledging agreement of 8 January 2008 between Primeur NV (which was absorbed by Vanelo NV on 31 December 2008) as pledgor and ING Bank N.V. as security agent relating to 100 % of the shares in PinguinLutosa Foods SA (formerly Van den Broeke-Lutosa SA).

- the supplementary agreement of 23 January 2009 between Vanelo NV as successor of Primeur NV as original pledgor, the Company as additional pledgor and ING Bank N.V. as security agent as supplement to the share pledging agreement of 8 January 2008 relating to 100 % of the shares in PinguinLutosa Foods SA (formerly Van den Broeke-Lutosa SA).

- the trade receivables pledging agreement of 8 January 2008 between the Company, G&L Van den Broeke-Olsene NV, Pinguin-Lutosa Foods SA (formerly Van den Broeke-Lutosa SA), Vanelo NV, Moerbos NV (which was absorbed by Vanelo NV on 31 December 2008), Pinguin Langemark nv and Primeur NV (which was absorbed by Vanelo NV on 31 December 2008) as pledgors and ING Bank N.V. as security agent on all receivables of the pledgors, including bank accounts and rights and claims against the sellers under the original acquisition documents.

- the pledge on the business of the Company of 8 January 2008 between the Company as pledgor and ING Bank N.V. as security agent, for an amount of €5,000,000 in principal amount, increased by 10 % in accessories and the interest over 3 years.

- the pledge mandate on the business of the Company of 8 January 2008 between the Company as pledgor and ING Bank N.V. as security agent and certain banks listed therein as beneficiaries for an amount of €75,000,000 in principal amount, increased by 10 % in accessories and the interest over 3 years.

- the mortgage on the real property of the Company of 8 January 2008 between the Company as mortgage debtor and ING Bank N.V. and certain banks as listed therein as mortgage creditors for an amount of €1,000,000 in principal amount, increased by 10 % in accessories and the interest over 3 years.

- the mortgage mandate on the current and future real property of the Company of 8 January 2008 between the Company as principal and ING Bank N.V. and certain banks as listed therein as beneficiaries for an amount of €9,000,000 in principal amount, increased by 10 % in accessories and the interest over 3 years.

- the mortgage on the real property of Pinguin Langemark NV of 8 January 2008 between Pinguin Langemark NV as mortgage debtor and ING Bank N.V. and the original banks as mortgage creditors for an amount of €1,000,000 in principal amount, increased by 10 % in accessories and the interest over 3 years.

- the mortgage mandate on the real property of Pinguin Langemark NV of 8 January 2008 between Pinguin Langemark NV as mortgage debtor and ING Bank N.V. and the original banks as mortgage creditors for an amount of €9,000,000 in principal amount, increased by 10 % in accessories and the interest over 3 years.

- the pledge on the business of PinguinLutosa Foods SA of 22 April 2010 between PinguinLutosa Foods SA as pledgor and ING Bank N.V. and the original banks as beneficiaries for an amount of €5,000,000 in principal amount, increased by 10 % in accessories and the interest over 3 years.

- the pledge mandate on the business of PinguinLutosa Foods SA of 22 April 2010 between PinguinLutosa Foods SA as pledgor and ING Bank N.V. and the original banks as beneficiaries, for an amount of €75,000,000 in principal amount, increased by 10 % in accessories and the interest over 3 years.

(b). in England and Wales:

- the share pledging agreement under English law of 8 January 2008 between the Company as pledgor and ING Bank N.V. as pledgee, relating to 100 % of the shares in PinguinLutosa Foods UK Limited (formerly Pinguin Foods UK Limited).

- the fixed and floating security under English law on all current and future assets of PinguinLutosa Foods UK Limited (formerly Pinguin Foods UK Limited) of 8 January 2008 between PinguinLutosa Foods UK Limited as pledgor and ING Bank N.V. as pledgee.

4. The Board of Directors noted that the change-of-control clause that is contained in the Restated Facilities Agreement must be approved by the General Meeting of the Company.

5. The Chairman proceeded to a discussion of the draft Amendment and Restatement Agreement and the additional finance documents, as defined in article 1.1. of the Restated Facilities Agreement (the Finance Documents). None of the directors had any comments.

The Board of Directors considered that the Amendment and Restatement Agreement enables the Company to provide for the financing, at market conditions, of the Scana Noliko Transaction and the refinancing of the existing Credit Facility. The Board of Directors thus came to the conclusion that the proposed transactions and the grant of a guarantee and securities for its own obligations and for the obligations of its subsidiaries as provided for in the Finance Documents including the Amendment and Restatement Agreement are to the benefit and in the interest of the Company.

6. Resolution: All directors who are entitled to participate in the voting unanimously decide to approve all finance documents, including the Finance Documents themselves, as well as all other agreements, documents, declarations, certificates, notifications or actions that the Company must enter into, execute or deliver relating to, or which are useful or serviceable for the Finance Documents, or the signing and execution of the Finance Documents.

III.2. Approval of the Equity Bridge I Loan Agreement.

1. The Chairman stated that a part of the financing of the Scana Noliko Transaction will take place by means of the Capital Increase of a minimum of €44,000,000. Gimv-XL and Food Invest International NV have undertaken vis-à-vis the Company to subscribe to the Capital Increase in the amount of around €32,484,000 (the Subscribed Tranche) as follows: €24,000,000 by Gimv-XL and €8,484,000 by Food Invest International NV. For the remaining part of the Capital Increase, i.e. a minimum of €11,516,000, a call will be made on public savings (the Public Tranche).

Because the Capital Increase will not yet be implemented at the time when the price for the shares of SN Holding must be paid by the Company, namely on or around 18 July 2011, it is the intention of the Company to enter into a bridging credit for this.

For the amount of the Public Tranche room is provided under the Restated Facilities Agreement, more specifically under Facility B.

For the Subscribed Tranche it is the intention of the Company to conclude an equity bridge agreement with ING Belgium NV, in the amount of €32,484,000, repayable 9 months after signing, and with a guarantee (cash collateral) by Food Invest International NV and Gimv-XL (the Equity Bridge Agreement).

2. The Board of Directors noted that the change-of-control clause that is contained in the Equity Bridge Agreement must be approved by the next General Meeting of the Company.

3. The Chairman proceeded to a discussion of the draft Equity Bridge I Loan Agreement and the additional finance documents. None of the directors had any comments.

Taking into account the considerations under agenda item III.1. and considering the fact that the Equity Bridge Agreement enables the Company to obtain at reasonable market conditions (a part of) the necessary financing for the Scana Noliko Transaction, the Board of Directors concluded that the Equity Bridge I Loan Agreement is in the interest of the Company. The Board of Directors took note of the final draft of the Equity Bridge Agreement.

4. Resolution: All directors who are entitled to participate in the voting unanimously decide to approve the Equity Bridge Agreement and the additional finance documents, as well as all other agreements, documents, declarations, certificates, notifications or actions which the Company must enter into, execute or deliver relating to, or which are useful or serviceable for the Finance Documents, or the signing and execution of the Equity Bridge documents."

Board of Directors´ meeting of 4 October 2011

On 4 October 2011, the Board of Directors had to pronounce on the approval of the agreement in principle between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV and Gimv-XL (composed of Gimv-XL Partners Comm.Vennootschap, Gimv NV and Adviesbeheer Gimv-XL NV). In this connection, Management Deprez BVBA, Deprez Invest NV, Bonem BVBA, Vijverbos NV, Gert van Huffel and Jean-Michel Jannez as director and Veerle Deprez, Hein Deprez, Marc Ooms and Herwig Dejonghe as permanent representative of a director-company had a potential conflict of interest.

This application was recorded as follows:

1. Before proceeding to deal with the agenda items, Management Deprez BVBA, Deprez Invest NV, Bonem BVBA and Vijverbos NV in their capacity as director of the Company on the one hand and Veerle Deprez, Hein Deprez, Marc Ooms and Herwig Dejonghe as permanent representative under article 61, § 2 of the Company Code of a director-legal entity of the Company on the other, asked to make a declaration in application of article 523 of the Company Code and they asked that their declaration, in application of article 523 of the Company Code, be included in the minutes of the Board of Directors´ meeting.

Prior to the Board of Directors´ meeting Mr Gert van Huffel and Mr Jean-Michel Jannez in their capacity as directors of the Company also made a declaration in application of article 523 of the Company Code and asked that this declaration, in application of article 523 of the Company Code, be included in the minutes of the Board of Directors´ meeting.

2. Management Deprez BVBA, Deprez Invest NV and Jean-Michel Jannez declared that they sit in the Board of Directors of the Company as representative of STAK Pinguin (and indirectly of Food Invest International NV), shareholder of the Company, and that they are directors of STAK Pinguin and/or Food Invest International NV and are related to one of the two shareholders of Food Invest International NV. They consequently have a functional financial conflict of interest in the approval of the transaction mentioned under agenda item II within the framework of which an agreement in principle will be concluded between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV.

Veerle Deprez and Hein Deprez declared that they are the permanent representative under article 61, § 2 of the Company Code of a director-legal entity of the Company which represents STAK Pinguin (and indirectly Food Invest International NV), shareholder of the Company, in the Board of Directors of the Company, that they are the represen- tative of a director of STAK Pinguin and the permanent representative under article 61, § 2 of the Company Code of a director-legal entity of Food Invest International NV and that they are related to one of the two shareholders of Food Invest International NV. They consequently have a functional financial conflict of interest in the approval of the transaction mentioned under agenda item II within the framework of which an agreement in principle will be concluded between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV.

Bonem BVBA declared that it sits in the Board of Directors of the Company as representative of STAK Pinguin (and indirectly of Food Invest International NV), shareholder of the Company, and that it is a director of Food Invest International NV and is related to one of the directors of STAK Pinguin and of Food Invest International NV. It consequently has a functional financial conflict of interest in the approval of the transaction mentioned under agenda item II within the framework of which an agreement in principle will be concluded between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV.

Marc Ooms declared that he is the permanent representative under article 61, § 2 of the Company Code of a director-legal entity of the Company which represents STAK Pinguin (and indirectly Food Invest International NV), shareholder of the Company, in the Board of Directors of the Company, that he is a director of STAK Pinguin and the permanent representative under article 61, § 2 of the Company Code of a director-legal entity of Food Invest International NV. He consequently has a functional financial conflict of interest in the approval of the transaction mentioned under agenda item II within the framework of which an agreement in principle will be concluded between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV.

Gert van Huffel declared that he sits in the Board of Directors of the Company as representative of KBC Private Equity NV, shareholder of the Company, and that he consequently has a functional financial conflict of interest in the approval of the agreement in principle mentioned under agenda item II which will be concluded between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV, because the above-mentioned agreement in principle is being concluded within the framework of the acquisition by Maatschappij Voor Roerend Bezit Van De Boerenbond CVBA, and this indirectly via Agri Investment Fund CVBA, of the 1,057,983 shares in PinguinLutosa NV that are held by KBC Private Equity NV.

Vijverbos NV declared that it sits in the Board of Directors of the Company as representative of STAK Pinguin (and indirectly of Food Invest International NV), shareholder of the Company, and that it is related to one of the directors of STAK Pinguin. It consequently has a functional financial conflict of interest in the approval of the transaction mentioned under agenda item II within the framework of which an agreement in principle will be concluded between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV.

Herwig Dejonghe declared that he is the permanent representative under article 61, § 2 of the Company Code of a director-legal entity of the Company which represents STAK Pinguin (and indirectly Food Invest International NV), shareholder of the Company, in the Board of Directors of the Company, that he is a director of STAK Pinguin. He consequently has a functional financial conflict of interest in the approval of the transaction mentioned under agenda item II within the framework of which an agreement in principle will be concluded between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV.

3. Management Deprez BVBA, Deprez Invest NV, Bonem BVBA, Jean-Michel Jannez and Vijverbos NV as director of the Company on the one hand and Veerle Deprez, Hein Deprez, Marc Ooms and Herwig Dejonghe as permanent representative under article 61, § 2 of the Company Code of a director-legal entity of the Company on the other, declared that they, in application of article 523, §1, paragraph 4 of the Company Code, will not participate in the deliberation and the voting on agenda item II. Given their absences during the meeting of the Board of Directors, Gert van Huffel and Jean-Michel Jannez will also not participate in the deliberation and the voting on agenda item II. Immediately after the meeting of the Board of Directors they will inform the statutory auditor of the Company of the application of article 523 of the Company Code.

4. They made the following declaration concerning the consequences of the transaction mentioned under agenda item II: as a result of the accession via its subsidiary Agri Investment Fund CVBA of MRBB CVBA, a global agreement will be concluded between Food Invest International NV, Gimv NV, Gimv-XL Partners Comm.VA, Adviesbeheer Gimv-XL NV, PinguinLutosa NV and MRBB with regard to the planned capital increase of €44,000,000, composed of a private placement in favour of Gimv-XL in the amount of €24,000,000.00 and of an issue with reservation of preferential purchase right in the amount of €20,000,000.00.

Within this framework it will be decided to do an issue at €9 per share instead of the earlier-planned €11.67. Agri Investment Fund CVBA, Food Invest International NV and Gimv-XL (i.e. Gimv NV, Gimv-XL Partners Comm.VA and Adviesbeheer Gimv-XL NV) undertake to grant a "backstop" for any part of the capital increase that should not be placed within the framework of the public offer amongst the existing shareholders, and this in the amount of a maximum of €9,687,299.38, and indeed as follows: (i) a "first-line backstop" from Agri Investment Fund CVBA for an amount of €3,649,449.00 and (ii) a "second-line backstop" from Agri Investment Fund CVBA, Food Invest International NV and Gimv-XL after complete exhaustion of the "first-line backstop" for the possible balance, and indeed as follows: Food Invest International NV will subscribe in the amount of 57.5 %, Gimv-XL Partners Comm.VA in the amount of 15.4 %, Gimv NV in the amount of 9.4 %, Adviesbeheer Gimv-XL NV in the amount of 1.3 % and Agri Investment Fund CVBA in the amount of 16.4 %. If and to the extent that no call can be made on the "first-line backstop" by Agri Investment Fund CVBA within the framework of the capital increase, Agri Investment Fund CVBA will via a private placement be able to subscribe to the part that could not be subscribed via the "first-line backstop". The amount of this private placement is equal to €3,649,499.00, minus the amount paid by Agri Investment Fund CVBA within the framework of the "first-line backstop".

As a result of the adaptation of the conditions of the capital increase, the Company can be confident that the entire capital increase of €44,000,000 is assured by the backstop.

5.. After having made the above-mentioned declaration, the other directors declared that Management Deprez BVBA, Deprez Invest NV, Bonem BVBA, Jean-Michel Jannez, Vijverbos NV, Veerle Deprez, Hein Deprez, Marc Ooms, Herwig Dejonghe and Gert van Huffel in application of article 523, §1, paragraph 4 of the Company Code did not participate in the deliberation and the voting on agenda item II.

I. Approval of the agreement in principle between the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV

1. The Chairman stated that the Maatschappij Voor Roerend Bezit Van De Boerenbond CVBA (hereafter MRBB) has the intention to invest indirectly via Agri Investment Fund CVBA in PinguinLutosa NV in the following way:

- acquisition of 1,057,983 shares in PinguinLutosa NV of KBC Private Equity NV (the Acquisition);

- subscription to 608,684 shares in PinguinLutosa NV for an amount of €5,478,153 (€9 per share) within the framework of a capital increase of PinguinLutosa NV for a total maximum nominal amount of €44,000,000 (the Capital Increase).

The planned capital increase of €44,000,000 is composed of a private placement in favour of Gimv-XL (i.e. Gimv NV, Gimv-XL Partners Comm.VA and Adviesbeheer Gimv-XL NV) in the amount of €24,000,000.00 and an issue with reservation of preferential subscription right in the amount of €20,000,000.00.

2. The Board of Directors took note of the fact that Agri Investment Fund CVBA, Food Invest International NV and Gimv-XL (i.e. Gimv NV, Gimv-XL Partners Comm.VA, Adviesbeheer Gimv-XL NV) undertook to grant a "backstop" for the part of the capital increase that might not be placed within the framework of the public offer amongst the existing shareholders, and this in the amount of a maximum of €9,687,299.38, and indeed as follows: (i) a "first-line backstop" from Agri Investment Fund CVBA for an amount of €3,649,449.00 and (ii) a "second-line backstop" from Agri Investment Fund CVBA, Food Invest International NV and Gimv-XL after complete exhaustion of the "first-line backstop" for the possible balance, and indeed as follows: Food Invest International NV will subscribe in the amount of 57.5 %, Gimv-XL Partners Comm.VA in the amount of 15.4 %, Gimv NV in the amount of 9.4 %, Adviesbeheer Gimv-XL NV in the amount of 1.3 % and Agri Investment Fund CVBA in the amount of 16.4 %. If and to the extent that no call can be made on the "first-line backstop" by Agri Investment Fund CVBA within the framework of the capital increase, Agri Investment Fund CVBA will via a private placement be able to subscribe to the part that could not be subscribed via the "first-line backstop". The amount of this private placement is equal to €3,649,499.00, minus the amount paid by Agri Investment Fund CVBA within the framework of the "first-line backstop".

As a result of the adaptation of the conditions of the capital increase, the Company can be confident that the entire capital increase of €44,000,000 is assured by the backstop.

3. To establish the leading principles, it is the intention of the Company, Agri Investment Fund CVBA, STAK Pinguin, Food Invest International NV, Gimv NV, Gimv-XL Partners Comm. VA and Adviesbeheer Gimv-XL NV to conclude, on or around 4 October 2011, an agreement in principle (the Agreement in Principle).

4. The Board of Directors took note of the provisions of the draft Agreement in Principle and considered that the conclusion of the Agreement in Principle is in the interest of the company.

The Board of Directors also took note of the adaptation of the issue price of the capital increase from €11.67 (to which Gimv-XL and Food Invest International NV had earlier bound themselves) to €9.00. The Board of Directors believes that the reduction of the issue price is in the interest of the Company. As a result of the adaptation of the conditions of the capital increase, the Company can be confident that the entire capital increase of €44,000,000.00 is assured by the backstop. Under the original agreement, the capital increase was only assured in the amount of €32,484,000.00 by a backstop. The above-mentioned reduction of the issue price is also justified, given the pressure on the financial markets and the recent share price evolution on Euronext. This was also confirmed by our financial advisors, who tested the market for private placement where €9 is the maximum strike price.

The Board of Directors weighed the pros and cons between the promise of €32.48 million at €11.67 per share compared to the complete subscription at €9. The question was posed whether giving up this €11.67 and the €32.48 million is in fact sufficiently in the interest of the Company and whether the parties who initially committed themselves at €11.67 are now not getting a benefit.

The management responded to this that, given the evolution and the turmoil on the international financial markets, and given the evolution of the stock exchange price of the PinguinLutosa share, it was unlikely that the remaining tranche would be subscribed by the public at €11.67. From the perspective of the interest of the Company, which needs to raise €44 million, this subscription guarantee takes priority.

5. Resolution: All directors who are entitled to participate in the voting unanimously decide to approve the Agreement in Principle and the transactions contained herein."

Board of Directors´ meeting of 20 December 2011

On 20 December 2011, the Board of Directors had to pronounce on the approval of the establishment of the annual compensation of Deprez Invest NV (CEO and Managing Director). In this connection Deprez Invest NV as director and Hein Deprez as permanent representative of a director-company had a potential conflict of interest.

This application was recorded as follows:

"Deprez Invest NV, as director of the Company on the one hand and Hein Deprez as permanent representative under article 61, § 2 of the Company Code of a director-legal entity of the Company on the other declared that he, in application of article 523, §1, paragraph 4 of the Company Code, will not participate in the deliberation and the voting on the agenda item concerning the compensation of the CEO. Immediately after the meeting of the Board of Directors he will inform the statutory auditor of the Company of the application of article 523 of the Company Code.

Deprez Invest, permanently represented by Mr Hein Deprez, left the meeting before this agenda point was dealt with.

Resolution:

The Board of Directors ratifies with application of article 523, the fixed compensation of €90,000 per year."

The Company is currently considering whether to conclude a lease with De Buitenakkers NV, a subsidiary of Food Invest International and Scana Noliko Real Estate NV, with regard to an industrial production site located in Manschnow, Germany. Under this lease, buildings and grounds with a total surface area of 23,689 m² would be rented out to the company by De Buitenakkers NV.

This could lead to a potential conflict of interest on the part of Management Deprez BVBA, Deprez Invest NV, Bonem BVBA and Jean-Michel Jannez as director and Veerle Deprez, Hein Deprez and Marc Ooms as permanent representative of a director-company. Veerle Deprez, permanent representative of Management Deprez BVBA and Hein Deprez, permanent representative of Deprez Invest NV, also sit in the Board of Directors of De Buitenakkers NV. Management Deprez BVBA (Veerle Deprez), Deprez Invest NV (Hein Deprez) and Jean-Michel Jannez also sit in the Board of Directors of Food Invest International NV.

However, the ultimate rent or purchase decision has not yet been taken. When a decision is reached, Art. 523 will be applied if necessary.

Application of art. 524 of the Company Code

Article 524 of the Company Code provides for a special procedure that applies to certain intra-group transactions or transactions between PinguinLutosa and related companies that are not subsidiaries of the former. This procedure was applied one time in the past financial year.

On 14 July 2011, the Board of Directors approved (i) the real-estate transaction within the framework of the acquisition of Scana Noliko Group and (ii) the club deal financing with application of article 524 of the Company Code.

This application was recorded as follows:

I. PRELIMINARY: APPLICATION OF ARTICLE 524 OF THE COM-PANY CODE.

1. The Chairman stated that, for dealing with the agenda items III.1, III.2, III.5, III.6, III.7, III.8, IV.1, IV.2, and IV.3, application was made of article 524 of the Company Code.

2. Assisted by the independent expert within the meaning of article 524, § 2 of the Company Code, i.e. Vander Donckt - Roobrouck - Christiaens Bedrijfsrevisoren, represented by Mr Bart Roobrouck, company auditor, the Committee of Independent Directors in its opinion stated that:

"(…) 5. Resolution: assisted by the independent expert within the meaning of article 524, § 2, Company Code., i.e. Vander Donckt - Roobrouck - Christiaens Bedrijfsrevisoren, represented by Mr Bart Roobrouck, company auditor, the Committee of Independent Directors gies the following opinion with regard to the following transactions that must be approved with application of article 524 of the Company Code:

(a) the confirmation in compliance with article 524 of the Company Code of the binding term sheet of 11 March 2011 within the framework of the acquisition by PinguinLutosa NV of the shares of Scana Noliko Holding NV, having regard to the real-estate transaction provided for herein, as described hereafter,

(b) the approval of the agreement to transfer shares of Scana Noliko Holding NV, having regard to the real-estate transaction provided for herein, as described hereafter,

(c) the authorisation in application of article 524, § 5 of the Company Code of Scana Noliko Holding NV and Scana Noliko NV to approve the transfer of all of the shares of Scana Noliko Real Estate NV,

(d) the authorisation in application of article 524, § 5 of the Company Code of Scana Noliko Rijkevorsel NV to approve the transfer of the real properties in Rijkevorsel,

(e) the authorisation in application of article 524, § 5 of the Company Code of Scana Noliko Rijkevorsel NV to approve the triple net lease, to be concluded between Scana Noliko Rijkevorsel NV and De Binnenakkers NV,

(f) the authorisation in application of article 524, § 5 of the Company Code of Scana Noliko NV to approve the agreement to amend the existing triple net lease of 16 December 2010, to be concluded between Scana Noliko NV and Scana Noliko Real Estate NV,

(g) the approval of the Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and the original Intercreditor Agreement and the additional finance documents,

(h) the approval of the Equity Bridge I Loan Agreement and the additional finance documents, and

(i) the authorisation in application of article 524, § 5 of the Company Code of PinguinLutosa Foods SA, G&L Van den Broeke-Olsene NV, Vanelo NV, Pinguin Langemark NV, Scana Noliko Holding NV, Scana Noliko NV and Scana Noliko Rijkevorsel NV as Borrower and/or as Guarantor to approve the Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and the original Intercreditor Agreement and the additional finance documents.

Taking into account the memorandum of the independent expert ex article 524 of the Company Code, the Committee of Independent Directors states that the transactions cause no harm to PinguinLutosa NV and its subsidiaries considering the policy that is conducted by the PinguinLutosa group, and the fact that the transactions are lawful. (…)"

They declared that the transactions cause no harm to PinguinLutosa NV and its subsidiaries, considering the policy that is conducted by the PinguinLutosa group, and the fact that the transactions are lawful.

3. After having taken note of the opinion of the Committee of Independent Directors, all directors who were entitled to participate in the voting decided that they concurred with the opinion of the Committee of Independent Directors.

I.1. Authorisation in application of article 524, § 5 of the Company Code of Scana Noliko Holding NV and Scana Noliko NV to approve the transfer of all of the shares of Scana Noliko Real Estate NV.

1. The Chairman stated that Food Invest International NV within the framework of the binding Term Sheet concerning the purchase of shares in SN Holding and the investment of Gimv-XL in the Company, concluded on 11 March 2011 between the Company, Gimv NV, Adviesbeheer Gimv Buyouts & Growth 2004 NV, Gimv-XL Partners Comm.VA, Adviesbeheer Gimv-XL NV, Food Invest International NV, Deprez Holding NV and Hein Deprez, undertook to purchase all of the shares in Scana Noliko Real Estate NV, and this in exchange for the payment of an overall acquisition price of €27,500,000.

The 139,058 shares of Scana Noliko Real Estate NV are held (i) by Scana Noliko Holding NV, in the amount of 139,057 shares, and (ii) by Scana Noliko NV, in the amount of 1 share.

2. The Chairman stated that De Binnenakkers NV had taken over a part of the rights and obligations of Food Invest International NV within the framework of the binding Term Sheet of 11 March 2011 and will acquire one of the 139,058 shares of Scana Noliko Real Estate NV in exchange for the payment of an acquisition price of €197.76.

3. The Chairman proceeded to a discussion of the conditions and modalities of the acquisition of all of the shares of Scana Noliko Real Estate NV. None of the directors had any comments. Taking account of the considerations for the Scana Noliko Transaction, as set forth under agenda item III.1., and considering the fact that the property transaction is a part of the Scana Noliko Transaction, the Board of Directors decided that the draft agreement to transfer all of the shares of Scana Noliko Real Estate NV is in the interest of the Pinguin Lutosa group and of SN Holding and Scana Noliko NV in particular. The Board of Directors took note of the final draft of the agreement to transfer all of the shares of Scana Noliko Real Estate NV.

4. Resolution: All directors who are entitled to participate in the voting, in application of article 524, § 5 of the Company Code, grant authorisation to Scana Noliko Holding NV and Scana Noliko NV (i) to transfer all of the shares of Scana Noliko Real Estate NV to Food Invest International NV and De Binnenakkers NV, in exchange for the payment of an overall acquisition price of €27,500,000, and (ii) to approve the conditions and modalities, as provided in the agreement, to transfer all of the shares of Scana Noliko Real Estate NV.

I.2. Authorisation in application of article 524, § 5 of the Company Code of Scana Noliko Rijkevorsel NV to approve the real properties in Rijkevorsel.

1. The Chairman stated that Food Invest International NV within the framework of the binding Term Sheet concerning the purchase of shares in SN Holding and the investment of Gimv-XL in the Company of 11 March 2011 undertook to purchase the real properties in Rijkevorsel, owned by Scana Noliko Rijkevorsel NV, in exchange for the payment of a purchase price of €2,500,000.

The real properties belonging to the site of Scana Noliko Rijkevorsel NV are:

- an industrial building, with land and appurtenances, in 2310 Rijkevorsel, Gammel 84/86, entered in the land register (or having been so) 1° department section A number 249/L, for a surface area of 21,252 m²;

- a plot of land, in 2310 Rijkevorsel, locally known under the name "De Binnenakkers", entered in the land register (or having been so) 1° department section A number 196/A, for a surface area of 2,115 m²;

- a plot of land, in 2310 Rijkevorsel, locally known under the name "De Binnenakkers", entered in the land register (or having been so) 1° department section A number 195/D, for a surface area of 6,112 m², and

- a plot of land, in 2310 Rijkevorsel, locally known under the name "De Wilders", entered in the land register (or having been so) 1° department section A number 250/A, for a surface area of 604 m².

2. The chairman stated that the rights and obligations of Food Invest International NV within the framework of the binding Term Sheet of 11 March 2011 will be taken over by De Binnenakkers NV and that thus the above-mentioned real properties in Rijkevorsel, owned by Scana Noliko Rijkevorsel NV, will be acquired by De Binnenakkers NV in exchange for the payment of a purchase price of €2,500,000.

He declared that the economic value of the above-mentioned real properties in Rijkevorsel was estimated at €2,500,000. Taking into account the registration fees and the costs of the Notary Public, the total acquisition price, including expenses, is estimated at €2,800,000.

3. The Chairman proceeded to a discussion of the draft agreement containing a temporary purchase and sale promise, in which the rights and obligations of De Binnenakkers NV and Scana Noliko Rijkevorsel NV are established.

4. Resolution: All directors who are entitled to participate in the voting, in application of article 524, § 5 of the Company Code, grant authorisation to Scana Noliko Rijkevorsel NV (i) to approve the transfer of the above-listed real properties in Rijkevorsel to De Binnenakkers NV in exchange for the payment of a purchase price of €2,500,000, with it being understood that the transfer will only be able to take place after the accession by De Binnenakkers NV to the VAT grouping between Scana Noliko NV and Scana Noliko Real Estate NV.

I.3. Authorisation in application of article 524, § 5 of the Company Code of Scana Noliko Rijkevorsel NV to approve the triple net lease, to be concluded between Scana Noliko Rijkevorsel NV and De Binnenakkers NV.

1. The Chairman stated that Food Invest International NV, within the framework of the binding Term Sheet concerning the purchase of shares in Scana Noliko Holding NV and the investment of Gimv-XL in the Company of 11 March 2011, undertook to rent out the real properties in Rijkevorsel immediately after the purchase once again to Scana Noliko Rijkevorsel NV via a triple net lease for a period of fifteen years and in exchange for an annual rent of €300,000, linked to the health index and increased by the costs.

2. The Chairman said that the above-mentioned rights and obligations of Food Invest International NV within the framework of the Term sheet were taken over by De Binnenakkers NV and that thus the real properties in Rijkevorsel immediately after the execution of the deed of purchase will once again be rented out to Scana Noliko Rijkevorsel NV under the above-mentioned conditions and modalities, as provided in a triple net lease.

3. The Chairman proceeded to a discussion of the draft triple net lease, to be concluded between De Binnenakkers NV as lessor and Scana Noliko Rijkevorsel NV as lessee. None of the directors had any comments.

4. Resolution: All directors who are entitled to participate in the voting, in application of article 524, § 5 of the Company Code, grant authorisation to Scana Noliko Rijkevorsel NV (i) to rent once again from De Binnenakkers NV the purchased real properties in Rijkevorsel immediately after the execution of the deed of purchase, and this via a triple net lease for a period of fifteen years that ends on 1 July 2026, and in exchange for the payment of an annual rent of €300,000, linked to the health index and increased by the costs, and (ii) to approve the conditions and modalities, as provided in the draft triple net lease to be concluded between De Binnenakkers NV as lessor and Scana Noliko Rijkevorsel NV as lessee.

I.4. Authorisation in application of article 524, § 5 of the Company Code of Scana Noliko NV to approve the agreement to amend the existing triple net lease of 16 December 2010, to be concluded between Scana Noliko NV and Scana Noliko Real Estate NV.

1. The Chairman stated that Scana Noliko NV and Scana Noliko Real Estate NV within the framework of the binding Term Sheet concerning the purchase of shares in SN Holding and the investment of Gimv-XL in the Company of 11 March 2011 declared their agreement to amend the conditions and modalities of the existing triple net lease of 16 December 2010, and this on the following points: (i) the term is extended until 1 July 2026, (ii) the total rent is established at €3,000,000, increased by the reservation rent of €165,000, and (iii) the right of first refusal in favour of Scana Noliko NV, as provided in the articles 10, 18 and 20, is eliminated. All other conditions and modalities remain in full effect.

2. The Chairman proceeded to a discussion of the draft agreement to amend the existing triple net lease of 16 December 2010, to be concluded between Scana Noliko Real Estate NV as lessor and Scana Noliko NV as lessee. None of the directors had any comments.

3. Resolution: All directors who are entitled to participate in the voting, in application of article 524, § 5 of the Company Code, grant authorisation to Scana Noliko NV (i) to approve the agreement to amend the existing lease of 16 December 2010, to be concluded between Scana Noliko Real Estate NV as lessor and Scana Noliko NV as lessee, and (ii) to approve the amended conditions and modalities of the existing triple net lease of 16 December 2010 with regard to the term and the amount of the total rent, as described above.

I.5. Authorisation in application of article 524, § 5 of the Company Code of PinguinLutosa Foods SA, G&L Van den Broeke – Olsene NV, Vanelo NV, Pinguin Langemark NV, Scana Noliko Holding NV, Scana Noliko NV and Scana Noliko Rijkevorsel NV as Original Borrower and/or as Original Guarantor to approve the Amendment and

Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and the original Intercreditor Agreement and the additional finance documents.

1. The Chairman stated that the subsidiaries of the PinguinLutosa group are party to the Senior Multicurrency Term and Revolving Facilities Agreement of 8 January 2008, concluded within the framework of a refinancing of the then-existing credit facility, after the acquisition by the Company of the shares of the companies of the Lutosa group (the Credit Facility).

The Credit Facility was entered into between (i) the Company (formerly Pinguin NV), PinguinLutosa Foods SA (formerly Van den Broeke-Lutosa SA) and PinguinLutosa Foods UK Ltd. (formerly Pinguin Foods UK Ltd.) as original borrowers, (ii) the Company, Vanelo NV, G&L Van den Broeke-Olsene NV, Primeur NV (merged with Vanelo NV), Moerbos NV (merged with Vanelo NV), PinguinLutosa Foods SA, Pinguin Langemark NV and PinguinLutosa Foods UK Ltd. as original guarantors and (iii) a syndicate of banks led by ING Belgium NV as arranger and consisting of Fortis Bank NV, KBC Bank NV, Dexia Bank NV, Rabobank and Landbouwkrediet Bank NV. The entry into this Credit Facility and the provision of a guarantee and certain securities was approved in principle by the Board of Directors of the Company on 7 December 2007 and ratified in compliance with art. 524 of the Company Code on 3 June 2008.

He referred to the agenda item IV.1. for an overview of the conditions and modalities of the Amendment and Restatement Agreement, under which the original Credit Facility is being amended and expanded.

3. The chairman proposed to authorise the Belgian subsidiaries of the Company with application of article 524, § 5 of the Company Code to approve the Amendment and Restatement Agreement.

4. Resolution: all directors who are entitled to vote unanimously decide to authorise the Belgian subsidiaries of the Company, i.e. PinguinLutosa Foods SA, G&L Van den Broeke – Olsene NV, Vanelo NV, Pinguin Langemark NV, Scana Noliko Holding NV, Scana Noliko NV, and Scana Noliko Rijkevorsel NV as Borrower and/or as Guarantor, to approve the Amendment and Restatement Agreement to the original Senior Multicurrency Term and Revolving Facilities Agreement and the original Intercreditor Agreement and the additional finance documents."

More detailed information on the subject of the transactions with the related parties is given in the section « 7.4. Related Parties » of the annexes to the Financial Report.

Measures for the prevention of market abuse

In compliance with provision 3.7 of the Corporate Governance Code, a dealing code was included in the Company's Corporate Governance Charter. In accordance with this dealing code, the Board of Directors keeps a list of insiders who could have regular or ad hoc access to inside information.

The dealing code imposes limitations on insiders with regard to transactions in PinguinLutosa securities during closed periods. The code also contains rules regarding the reporting duty of insiders concerning proposed transactions and the disclosure of implemented transactions via a report to the FSMA.

Internal control and risk management

The Board of Directors of PinguinLutosa is responsible for estimating the risks that are specific to the Company and for the evaluation of the effectiveness of the internal control.

PinguinLutosa has an internal control system based on the COSO model. The following pillars are discussed below: 'control environment', 'risk management systems and internal control', 'financial reporting and communication', and, to conclude, 'oversight and monitoring'.

The management has implemented a variety of controls to manage the risks that could undermine the achievement of the strategic spearheads and axes.

Control environment

General

PinguinLutosa is dedicated to conscious risk management based on a strong and comprehensive internal control system achieved by encouraging a company culture in which all personnel is empowered to fulfil their roles and responsibilities in accordance with the highest standards of integrity and professionalism.

PinguinLutosa's internal control system is structured to contribute to achieving the strategic spearheads (operational efficiency, quality guarantee, and sustainable development) and axes (clientspersonnel-supplier satisfaction, innovation, internationalisation, growth and brand awareness).

Audit Committee

The Audit Committee investigates the system for internal control and risk management set up by the management of PinguinLutosa in order to confirm that the principle risks (including those related to compliance with legislation and regulations) are identified, managed and brought to the notice of the responsible individuals, in accordance with the framework established by the Board of Directors.

The Audit Committee investigates the specific regulations by which personnel of PinguinLutosa are able to express in confidence any concerns they have about possible irregularities concerning financial reporting or other matters. If it is considered to be necessary, arrangements will be made for an independent investigation and a suitable monitoring of these matters, in proportion to the alleged seriousness of the matter. Procedures are also being implemented by which personnel can inform the Chairman of the Audit Committee directly.

At least twice per year, the Audit Committee meets the auditor in the presence of the Management Committee to discuss with the auditor the subjects that fall under his remit and all matters that arise from the auditing process.

In addition, the management team is given a regular update on the pending disputes. In that respect, a quantified risk assessment and classification is always carried out.

Internal audit

The mission of internal audit is, along with the external auditor, to create an independent and objective evaluation of the risks and the internal control systems of the Group. The internal auditor formulates recommendations to the management for improving internal controls in terms of both efficiency and effectiveness. Functionally, the internal auditor reports to the Audit Committee. The Chairman of the Board of Directors also serves as a direct point of contract for the internal auditor. A conscious effort has been made to guarantee the independence of the internal auditor.

If necessary, the internal auditor calls on the support of a specialised external consultancy firm for the performance of his responsibilities. This makes it possible to place even higher demands and, at the same time, also stay up to date with respect to common practices within the internal auditing environment.

Risk management systems and internal control

The most important aspects of the risk management and internal control process can be summarised as follows:

• the risk position of the company, the possible financial impact and the required action points are evaluated regularly by the management and by the Board of Directors, advised by the Audit Committee;
• when the Board of Directors discusses the strategy and investment projects, an evaluation is also made of the asso-

ciated risks. Where needed, appropriate measures are taken;

• The legal disputes that could have a material financial impact on the company are discussed quarterly in the Audit Committee;
• The internal audit reports are always discussed with local management and a summary is discussed with the Audit Committee every half year.

For a discussion of the principal risks and the associated control activities, please see explanation "6.20. Risk management policy" of the Financial Report.

Financial reporting and communication

PinguinLutosa's financial reporting and communication process can be summarised as follows:

A closing plan with checklist is drawn up with the tasks that must be accomplished by the quarterly, semi-annually, and annual closing of PinguinLutosa and its subsidiaries. The financial department provides the accounting figures under the supervision of the chief accountant. The controllers verify the validity of those figures and issue a report. Both coherence testing by making comparisons with historical or budgetary figures and transaction controls using random samples are performed.

The Audit Committee supports the Board of Directors in overseeing the integrity of the financial information provided by PinguinLutosa. In particular, it confirms the relevance and the consistency of the application of the accounting standards used within the PinguinLutosa Group and 'inter alia' on the criteria for the consolidation of the accounts of the companies of the PinguinLutosa Group. The oversight covers the periodic information before it is published and is based on the audit program used by the Audit Committee. Management informs the Audit Committee about the methods that are used for to account for significant and unusual transactions of which the accounting treatment could be open to a variety of interpretations. The Audit Committee discusses the financial reporting methods with both the Management Committee and the external auditor.

Oversight and monitoring

Oversight of the internal controls is exercised by the Board of Directors, supported by the activities of the Audit Committee.

The external auditor carries out an annual evaluation of the internal controls related to the risk associated with the financial statements of PinguinLutosa. In that regard, the external auditor of Pinguin-Lutosa has made several recommendations concerning the internal control and risk management systems. The recommendations were contained in a management letter that was discussed with the management. The management has undertaken action points to handle the findings and thereby achieve an even better control environment. Those points are being followed up by management as well as the internal audit function.

For monitoring the effectiveness and efficiency of the internal control system at the group level, a risk universe and audit plan has been defined and validated by the Audit Committee. The internal auditor assesses the effectiveness and efficiency of the internal control structure on the basis of the audit plan and reports to the Audit Committee.

INFORMATION FOR SHAREHOLDERS

PinguinLutosa's shares have been listed on Euronext Brussels (stock code: PIN) since 1 March 2005. The PinguinLutosa share was introduced onto the Brussels Stock Exchange in June 1999. PinguinLutosa has liquidity maintenance agreements with Bank Degroof and with Petercam.

The capital was represented by 16,459,520 shares which have the same rights on 31 March 2012. All shares are listed on the continuous market of Euronext Brussels, more specifically in the compartment C (small caps) of this market.

Market capitalization on 31 March 2012 was €134.3 million.

In order to finance part of the acquisition price of the Scana Noliko Group (see note '2.4. Changes in consolidation scope'), on 19 July 2011 PinguinLutosa reached an agreement with Gimv-XL whereby a subordinate loan with warrants for €36.0 million was granted to PinguinLutosa.

On 2 December 2011 the General Assembly of PinguinLutosa issued 2,400,000 warrants for a total amount of €30.6 million (85% of the amount of the subordinate loan) with an initial exercise price of €12.75 which are subscribed by Gimv-XL (see note '6.14. Options and warrant plans').

Share trading evolutio n

The table below shows the key figures of the PinguinLutosa share:

	Financial year 2011-2012		Date Financial year 2010	Date
Highest price	10.45 €	24/03/2012	10.70 €	28/05/2010
Lowest price	7.10 €	23/01/2012	8.54 €	29/01/2010
Opening price	9.67 €	3/01/2011	8.99 €	4/01/2010
Closing price	8.16 €	30/03/2012	9.67 €	31/12/2010
Average daily trading volume	2,531		2,474
Total number of shares	16,459,520		11,570,631
Market capitalization	134,309,683 €		111,888,002 €

The graph below shows the PinguinLutosa share price evolution during the 2011-2012 financial year:

Trading volume

The graph below shows the trading volume of PinguinLutosa shares by month:

Monthly trading volume	Financial year 2011-2012	Financial year 2010
January	62,574	14,532
February	33,354	40,982
March	110,243	61,644
April	24,826	73,423
May	46,220	139,454
June	283,757	59,049
July	20,234	20,440
August	51,783	34,946
September	16,266	41,719
October	13,689	58,902
November	21,093	43,715
December	10,402	49,377
January	28,186
February	71,802
March	20,501

The average trading volume in 2011-12 (15 months) was 2,531 shares compared to 2,474 shares the year before (12 months).

C apital struct ure

On 31 March 2012 the capital was represented by 16,459,520 shares, which have the same rights.

Shareholder struct ure

Every shareholder with at least 5% of the voting rights is required to comply with the act of 2 May 2007 concerning the disclosure of the major holdings, the Royal Decree of 14 February 2008 and the Company Code.

The legal thresholds of 5% apply. The people concerned are required to send a notification to the Commission for the Banking, Finance and Insurance Commission and to the company.

Based on the latest transparency declarations received by Pinguin-Lutosa NV on 23/02/2012 and 27/02/2012, the company's shareholder structure is as follows:

Shareholder structure 31/03/2012	Number of shares	%
Food Invest International NV	3,377,461	20.52%
2 D NV	3,243,293	19.70%
Agri Investment Fund	1,776,393	10.79%
Familie Dejonghe**	1,015,057	6.17%
Lur Berri SCA	934,264	5.68%
Sill SA	90,197	0.55%
Volys Star NV	42,894	0.26%
Gimv-XL***	2,842,228	17.27%
Public*	3,137,733	19.06%
TOTAL	16,459,520	100.00%

* including shares at Primco, Degroof Corporate Finance and employees

** includes following shareholders: Vijverbos NV, Kofa BVBA, Koen

Dejonghe, Herwig Dejonghe, Pinguin Invest NV and Burgerlijke Maatschap Dejonghe-Dejonckheere

*** includes following shareholders: Gimv-XL Partners Comm,Vennootschap, Gimv NV and Adviesbeheer Gimv-XL NV

PinguinLutosa received five notifications of participation on 23 February 2012 and one notification of participation on 27 February 2012. This concerned notifications of participation on behalf of Gimv-XL (*), Food Invest International NV, Mr. Hein Deprez and 2D NV and a notification of participation on behalf of Agri Investment Fund CVBA, M.R.B.B. CVBA, Food Invest International NV, Mr. Hein Deprez and 2D NV. In addition, updated joint notifications of participation were received from Mr. Hein Deprez, Food Invest International NV and 2D NV with respectively Société Industrielle Laitière du Leon SA, Volys Star NV and Lur Berri SCA. Finally, a notification of participation was received on behalf of the Dejonghe family.

An overview of all current notifications received by PinguinLutosa, and the corresponding shareholder structure, is available on our website www.pinguinlutosa.com under the heading "Financial information > Information for the shareholders > shareholder structure and transparency". The last transparency notification is published in the annual report of the company and on the website.

(*): Gimv-XL Partners Comm,Vennootschap, Gimv NV and Adviesbeheer Gimv-XL NV.

Major changes in sh areholder struct ure

On 6 October 2011 Agri Investment Fund CVBA acquired a package of PinguinLutosa shares (1.057.983 shares) from KBC Private Equity NV.

On 15 February 2012, Gimv (*), Food Invest International NV and Agri Investment Fund CVBA subscribed via a private placement for a €44.0 million share in the capital of the Group. 4,888,889 new shares were created at an issue price of €9.0 per share and these shares have been subscribed as follows:

GIMV (*)	:	2,842,228 shares
AIF CVBA :		718,410 shares
FII NV	:	1,328,251 shares

(*): Gimv-XL Partners Comm,Vennootschap, Gimv NV and Adviesbeheer Gimv-XL NV.

Due to the dissolution of STAK Pinguin on the one hand and the shareholders´ agreements that were made between Food Invest International NV and Gimv-XL within the framework of the acquisition of the Scana Noliko Group after capital increase on the other, Food Invest International NV no longer has directly or indirectly the right to appoint or to dismiss a majority of the directors of Pinguin-Lutosa, and thus it no longer has de jure control over the company as understood in articles 5 and following of the Company Code.

In the prolonged accounting year that closed on 31 March 2012 (15 months) there were no other major changes in shareholder structure.

Elements which might have an impact in case of a publ ic takeover bid

Pursuant to Article 34 of the Royal Decree of 14 November 2007 concerning the obligations of issuers of financial instruments admitted to trading on a regulated market, an overview of elements that could have an impact in the event of a public takeover bid for the shares of PinguinLutosa is shown below.

Statutory limitation to the exercise of voting rights

Article 8 of the Articles of Association of PinguinLutosa states that, if a shareholder has not fully paid up his shares as requested by the Board of Directors within the period stated by the Board of Directors, the exercise of the voting rights associated with the shares concerned will be legally suspended until such time as the payment has been completed. On 31 December 2010, however, the capital was fully paid up.

Shareholders' agreements that are known to the issuer and that could give rise to share transfer restrictions and/or limitations to the exercise of the voting rights.

The Board of Directors has no knowledge of shareholder agreements that could give rise to share transfer restrictions or to limitations to the exercise of the voting right, except for the following agreements:

• agreement of 1 September 2003 and September 2003, respectively, between STAK Pinguin and Volys Star NV and between STAK Pinguin and Société Industrielle Laitière du Leon SA (SILL);
• agreement of 17 September 2003 between STAK Pinguin and Lur Berri SCA
• agreement of 15 February 2012 between Food Invest International NV, Agri Investment Fund CVBA (AIF) and Pinguin-Lutosa NV.
• agreement of 15 February 2012 between Gimv NV, Gimv-XL Partners Comm. VA, Adviesbeheer Gimv-XL NV (together Gimv XL), Food Invest International NV, PinguinLutosa NV and Hein Deprez.

These shareholders agreements were originally entered into by STAK Pinguin. However, following the decertification of all certificates issued by STAK Pinguin the rights and obligations of STAK Pinguin were transferred to Food Invest International.

Agreement of 1 September 2003 and September 2003, respectively, between STAK Pinguin and Volys Star NV and between STAK Pinguin and Société Industrielle Laitière du Leon SA (SILL).

Those agreements do not provide for special control rights for the parties. The parties have not made any voting agreements.

The shareholders' agreements include both a right of first refusal in favour of STAK Pinguin and a tag-along right in favour of Volys Star NV and SILL, respectively:

(a) on the basis of the right of first refusal, Volys Star NV and SILL, respectively, commit to first offer their shares in PinguinLutosa to STAK Pinguin, if they wish to transfer all or some of their shares in PinguinLutosa. The exercise period of the right of first refusal expires on 31 December 2013. The price at which the right of first refusal can be exercised is equal to the price offered by the prospective buyer to the perspective seller.

(b) on the basis of the tag-along right, Volys Star NV and SILL, respectively, have the right to sell their shares in PinguinLutosa to a third party who acquires all or a majority of the shares that STAK Pinguin holds in PinguinLutosa. The tag-along right can be exercised at the same price, conditions and modalities as those offered by the third party. The exercise period of the tag-along right expires on 31 December 2013.

Agreement of 17 September 2003 between STAK Pinguin and Lur Berri SCA

STAK Pinguin and Lur Berri SCA have entered into a shareholders' agreement. The agreement does not provide for special control rights for the parties. The parties have not made any voting agreements.

The shareholders' agreement comprises both a right of first refusal and a tag-along right:

(a) On the basis of the right of first refusal, each shareholder (STAK Pinguin or Lur Berri SCA) that wants to transfer all of its shares in PinguinLutosa, commits to offer them first to the other shareholder (Lur Berri SCA or STAK Pinguin). The exercise period of the right of first refusal expires on 31 December 2013. The price at which the right of first refusal can be exercised is equal to the price offered by the prospective buyer to the prospective seller.

(b) on the basis of the tag-along right, Lur Berri SCA, to the extent that it does not exercise its right of first refusal, has the right to sell its shares in PinguinLutosa to a third party who acquires all or a majority of the shares that STAK Pinguin holds in PinguinLutosa. The tag-along right can be exercised at the same price, conditions and modalities as those offered by the third party. The exercise period of the tag-along right expires on 31 December 2013.

An anti-dilution clause has been included in the shareholders' agreement with Lur Berri SCA. To the degree that Lur Berri SCA would not be able to exercise its preferential rights to maintain the level of its participation in the event of a capital increase, a shareholders realignment or in absence thereof a transfer of preferential rights to Lur Berri SCA by STAK Pinguin or an additional issue of shares in favour of Lur Berri SCA has been provided for.

Agreement of 15 February 2012 between Food Invest International NV, Agri Investment Fund CVBA (AIF) and PinguinLutosa NV.

This agreement does not provide for special control rights for the parties. The parties have not made any voting agreements.

The shareholders´ agreement contains both a right of first refusal in favour of Food Invest International NV and AIF and a tag-along right in favour of AIF:

(a) On the basis of the right of first refusal, each shareholder (Food Invest International NV, or AIF) that wishes to transfer all of its shares in PinguinLutosa NV, undertakes to first offer them to the other shareholder (either Food Invest International NV, or AIF). The exercise period of the right of first refusal will expire on 15 February 2022. The price at which the right of first refusal can be exercised is equal to the price offered by the prospective buyer to the prospective seller.

(b) On the basis of the tag-along right, AIF, in so far as it does not exercise its right of first refusal, has the right to sell its shares in PinguinLutosa NV to the third party who acquires all or a majority of the shares that Food Invest International NV holds in Pinguin-Lutosa NV. The tag-along right can be exercised at the same price, conditions and terms as those offered by the third party. The exercise period of the tag-along right will expire on 15 February 2022.

The shareholders´ agreement provides for a standstill period on the part of AIF that will expire on 1 December 2017.

Agreement of 15 February 2012 between Gimv NV, Gimv-XL Partners Comm. VA, Adviesbeheer Gimv-XL NV (together Gimv XL), Food Invest International NV, PinguinLutosa NV and Hein Deprez.

These agreements do not provide for special control rights for the parties. The parties have not made any voting agreements.

The shareholders´ agreement contains a right of first refusal in favour of Food Invest International NV and a tag-along right in favour of Gimv-XL:

(a) On the basis of the right of first refusal, Gimv-XL undertakes, if it wishes to transfer at least 5% of the PinguinLutosa NV shares and in so far as Food Invest International directly or indirectly still holds at least 30% of the PinguinLutosa NV shares, to first offer them to Food Invest International NV. The exercise period of the right of first refusal will expire on 15 February 2022. The price at which the right of first refusal can be exercised is equal to the price offered by the prospective buyer to the prospective seller.

(b) On the basis of the tag-along right, Gimv-XL, in so far as it does not exercise its right of first refusal, has the right to sell its shares in PinguinLutosa NV to the third party who acquires all or a majority of the shares that Food Invest International holds in PinguinLutosa NV. The tag-along right can be exercised at the same price, conditions and terms as those offered by the third party. The exercise period of the tag-along right will expire on 15 December 2022.

The shareholders´ agreement provides for a standstill period on the part of Food Invest International NV until the earliest of (i) 31 December 2016 or (ii) the day that Gimv-XL holds less than 10% of the outstanding capital of PinguinLutosa NV. A standstill period is also provided for on the part of Gimv-XL which will expire on 1 January 2015.

Authority of the Board of Directors to issue or purchase own shares

In accordance with article 7 of the articles of association, the Board of Directors is authorised to increase the subscribed capital one or more times, as of the date of the notification by the FSMA to the company of a public takeover bid on the shares of the company, by contribution in cash with suspension or limitation of the preferential right of the existing shareholders or by contribution in kind in conformity with article 607, 2° of the Company Code. This authority was granted for a period of three years counting from the publication of the determination of the implementation of the capital increase that was decided at the Extraordinary General Meeting of 15 February 2012 and can be renewed.

Furthermore, in accordance with article 12 of the articles of association, the Board of Directors is expressly authorised, in compliance with the provisions of the Company Code, to acquire by purchase or exchange or to alienate its own shares, without a preliminary resolution of the General Meeting being required, directly or via a person acting in his own name, but for the account of the company, or via a direct subsidiary within the meaning of article 627 of the Company Code, if this acquisition or alienation is necessary in order to avoid an imminent serious disadvantage for the company. This authorisation applies for a period of three years counting from the publication of the authorisation resolution of the Extraordinary General Meeting of 2 December 2011. This authorisation can be renewed in accordance with article 620 of the Company Code.

Important agreements that take effect, undergo changes or expire in the event of changes of control of the company

In the context of the club deal financing, a 'Change of Control' clause has been included in the '€250,000,000 Senior Multicurrency Term and Revolving Facilities Agreement', as amended on 19 July 2011 between the PinguinLutosa Group and the bank syndicate with ING Belgium NV as Lead Arranger, providing for the bank to demand repayment of the credit in the event of a change of control over the capital of PinguinLutosa.

Contacts

The investor relations team is available to answer shareholder and investor questions about the Group's activities,

shares and other information requests (annual report, detailed accounts of PinguinLutosa NV):

For the attention of Mr Steven D'haene PinguinLutosa NV Romenstraat 3 B-8840 Westrozebeke (Staden) Or by e-mail: [email protected]

Financial calendar

• Trading update first quarter 2012: 25 July 2012 (17:45 hrs)
• General Meeting: 21 September 2012 at 14:00 hrs at Langemark, Poelkapellestraat 71
• Announcement 2012 half year results of the PinguinLutosa Group (01/04/2012-30/09/2012):

15 November 2012 (17:45 hrs)

• Trading update third quarter 2012:

25 January 2013 (17:45 hrs)

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved for publication by the Board of Directors on 24 July 2012.

CONSOLIDATED INCOME STATEMENT

Consolidated income statement (in thousands of €)	Note (*)	31/03/2012 (15 months)	31/12/2010 (12 months)4
Sales	5.1.	832,812	483,564
Increase/decrease (-) in inventories: finished goods and work in progress		13,670	-16,153
Other operating income	5.2.	12,612	6,557
Raw materials, consumables and goods for resale	5.3.	-500,643	-264,797
Services and other goods	5.3.	-201,023	-121,811
Personnel costs	5.3.	-111,421	-58,253
Depreciation and amortization	5.3.	-31,753	-18,912
Impairment losses on assets	5.3.	-1,898	-382
Impairments, write-offs	5.3.	-1,784	386
Provisions	5.3.	-450	65
Other operating charges	5.3.	-6,773	-2,940
Operating result (EBIT)	5.4.	3,349	7,323
Non-recurring income	5.4.	1,289	2,774
Non-recurring expenses	5.4.	-17,963	-1,887
Operating result before non-recurrings (REBIT)	5.4.	20,023	6,436
Financial income	5.5.	2,156	2,708
Financial expenses	5.5.	-26,804	-7,388
Operating profit after net finance costs		21,299	2,643
Taxes	5.6.	7,244	112
PROFIT (LOSS) OF THE PERIOD		-14,055	2,755
Attributable to:
- The shareholders of PinguinLutosa (the 'Group'))		-13,763	2,813
- Non-controlling interests		-292	-58
Earnings per share (in € per share)	Note (*)	31/03/20125	31/12/2010
Basic	5.7.	-1.14	0.26
Diluted	5.7.	-1.14	0.26

(*) The attached notes form an integral part of this income statement.

4 Amended presentation of the write-off on stocks as a result of the NRV test: we refer to note "2.3. Valuation rules".

5 The diluted earnings per share equals the basic earnings per share following the anti-dilutive character of the warrants cfr. IAS 33.41.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Consolidated statement of comprehensive income (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)
Profit (loss) of the period	-14,055	2,755
Other comprehensive income of the period
Foreign currency translation differences for foreign operations	345	878
Other comprehensive income of the period
Income tax relating to components of other comprehensive income
Other comprehensive income (net of tax)	345	878
Total comprehensive income of the period	-13,710	3,633
Attributable to:
- The shareholders of PinguinLutosa (the 'Group')	-13,418	3,691
- Non-controlling interests	-292	-58

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS (in thousands of €)	Note (*)	31/03/2012	31/12/2010

NON -CURRENT ASSETS		279,867	188,301
Intangible fixed assets	6.1.	27,813	4,206
Goodwill	6.2.	61,790	52,832
Tangible fixed assets	6.3.	185,734	131,120
- Land and buildings	6.3.	29,863	28,789
- Plant, machinery and equipment	6.3.	150,031	98,572
- Furniture and vehicles	6.3.	3,359	2,706
- Other	6.3.	2,481	1,053
Financial fixed assets	6.4.	3,350
- Other non-current financial assets	6.4.	3,350
Deferred tax assets	6.8.	475
Long-term receivables (> 1 year)	6.6.	705	143
- Other receivables	6.6.	705	143
CURRENT ASSETS		398,978	231,936
Assets held for sale	6.7.
Inventories	6.5.	236,836	112,566
- Raw materials and consumables	6.5.	27,433	15,648
- Work in progress and finished goods	6.5.	209,403	96,918
Amounts receivable	6.9.	123,708	64,380
- Trade receivables	6.9.	98,796	51,182
- Other receivables	6.9.	24,912	13,198
Other financial assets	6.20.	78
- Derivatives	6.20.	78
Cash and cash equivalents	6.10.	38,356	54,990
TOTAL ASSETS		678,845	420,237

(*) The attached notes form an integral part of this statement of financial position.

9 0 PinguinLutosa financia L REPORT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

EQUITY AND LIABILITIES
(in thousands of €)	Note (*)	31/03/2012	31/12/2010
EQUITY		171,400	138,714
Share capital	6.11.	154,810	111,013
- Issued capital	6.11.	154,810	111,013
Share premium and other capital instruments	6.11.	14,309	11,376
Consolidated reserves		3,512	17,759
Cumulative translation adjustments		-3,049	-3,394
Non-controlling interests	6.15.	1,818	1,960
NON -CURRENT OBL IGAT IONS		87,074	84,743
Provisions for pensions and similar rights	6.16./6.17.	1,046	26
Other provisions	6.16.	1,694	1,257
Financial debts at credit institutions	6.18.	2,485	56,031
- Finance leases	6.18.	22	476
- Bank loans	6.18.	195	53,055
- Other financial debts	6.18.	2,268	2,500
Interest-bearing liabilities	6.18.	38,519
- Convertible bond loans	6.18.	38,519
Other amounts payable	6.18.	3,128
Deferred tax liabilities	6.8.	40,202	27,429
CURRENT LIABILITIES		420,371	196,780
Financial debts at credit institutions	6.18.	193,115	65,755
- Finance leases	6.18.	364	629
- Bank loans: debts > 1 year payable within current year	6.18.	133,772	12,781
- Bank loans	6.18.	50,447	51,516
- Derivatives	6.20.	6,592	594
- Other financial debts	6.18.	1,940	235
Trade payables	6.19.	196,819	116,679
Advances received on contracts	6.19.	1	61
Tax payable	6.19.	7,086	6,763
Remuneration and social security	6.19.	18,975	6,876
Other amounts payable	6.19.	4,375	646
TOTAL EQUITY AND LIABILITIES		678,845	420,237

(*) The attached notes form an integral part of this statement of financial position.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

The table below summarizes the changes in equity in 2011-2012 and 2010:

Consolidated statement of changes in equity

(in thousands of €)

	Capital	Share premium	Treasury shares	Translation difference
Balance as at 1 January 2011	111,013	11,376	0	-3,394
Profit (loss) of the period
Other comprehensive income				345
Total comprehensive income	0	0	0	345
Dividend payments
Capital increase6	43,797
Capital decrease from incorporating reserves
Changes in consolidation scope
Others		2,9337

Balance as at 31 March 2012	154,810	14,309	0	-3,049

Balance as at 1 January 2010	101,028	11,376	0	-4,272

Profit (loss) of the period
Other comprehensive income				878

Total comprehensive income	0	0	0	878
Dividend payments
Capital increase	9,985
Capital decrease from incorporating reserves
Changes in consolidation scope
Others

Balance as at 31 December 2010	111,013	11,376	0	-3,394

6 See note "6.11. Share capital, share premiums and other capital instruments'.

7 This share premium is related to the subordinated loan with warrants as shown in note"6.14. Options and warrant plans'.

Total equity	Non-controlling interests	Attributable to the shareholders of PinguinLutosa
			Retained	Other
		Total share of the Group	earnings	reserve
138,714	1,960	136,754	10,299	7,460
-14,055	-292	-13,763	-13,763
345		345

-13,710	-292	-13,418	-13,763	0

43,349		43,349		-448

3,047	150	2,897	-36

171,400	1,818	169,582	-3,500	7,012
125,148	2,019	123,129	7,537	7,460

2,755 878	-58	2,813	2,813
		878
3,633	-58	3,691	2,813	0

9,985		9,985

	-1	-51	-51

138,714	1,960	136,754	10,299	7,460

CONSOLIDATED STATEMENT OF CASH FLOWS

Consolidated statement of cash flows

(in thousands of €)	Note (*)	31/03/2012	31/12/2010
CASH AND CASH EQUIVALENTS, OPENING BALANCE	6.10.	54,989	37,988
CASH FLOW FROM OPERATING ACTIVITIES (A)		21,696	34,106
Operating profit (EBIT)	5.4.	3,349	7,323
Income taxes	5.6.	-7,985	-1,915
Adjustments for non-cash items		45,382	20,002
Depreciation of tangible fixed assets	6.3.	28,901	18,091
Amortization of intangible fixed assets	6.1.	2,852	1,001
Increase/decrease (-) in amounts written off		1,898	936
Write-off on stock/trade receivables		1,784
Increase/decrease (-) in provisions	6.16.	450	-26
Fair value adjustment included in income statement (stock)	5.4.	9,754
Gain (-)/ loss on disposal of fixed assets		-257
Increase/decrease (-) in working capital		-19,050	8,696
Increase (-)/decrease in inventories		2,610	9,194
Increase (-)/decrease in trade and other receivables	6.9.	4,008	-16,073
Increase/decrease (-) in trade and other payables		-25,528	14,055
Effect of exchange rate on working capital		-140	1,520
CASH FLOW FROM INVE STING ACTIVITIES (B)		-120,314	-12,290
Acquisitions (-)		-147,381	-12,714
Acquisition of intangible fixed assets		-1,189	-523
Acquisition of tangible fixed assets		-28,714	-12,191
Acquisition of subsidiaries	2.4.1.	-114,925
Acquisition of CECAB Activity		-2,554
Disposals		27,067	424
Disposal of tangible fixed assets		290	424
Disposal of subsidiaries	2.4.1.	26,777
CASH FLOW FROM FINAN CING ACTIVITIES (C)		81,575	-4,633
Capital increase	6.11.	46,730	9,985
Increase long- and short-term funding		102,498	7,226
Decrease (-) long- and short-term funding		-49,473	-14,571
Net interests paid		-14,604	-5,750
Other financial charges		-3,576	-1,523
NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C)		-17,043	17,183
Effect of exchange rate fluctuations		410	-182
CASH AND CASH EQUIVALENTS, CLOSING BALANCE	6.10.	38,356	54,989

(*) The attached notes form an integral part of this consolidated statement of cash flows.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

PinguinLutosa NV is a company established in Belgium. Its legal address is Romenstraat 3, 8840 Westrozebeke. The consolidated financial statements of PinguinLutosa NV for the prolonged financial year (15 months) ending on 31 March 2012 cover PinguinLutosa NV and its subsidiaries ('the Group') and PinguinLutosa NV's interests in associated companies and entities over which joint control is exercised.

The Group is active predominantly in three segments, deep-frozen vegetables, potatoes and canned goods. Within the deep-frozen vegetable segment, the production of deep-frozen culinary vegetable preparations and dishes ('convenience') forms an extension of the basic activity whereas within the canning segment the preparation of ready-to-eat food such as soups, sauces, dips and pasta dishes constitutes a broadening of the basic activity (processing of harvest-fresh fruit and vegetables).

The consolidated financial statements provide a general overview of the Group's activities and the results achieved. They give a true and fair view of the entity's financial position, financial performance and cash flows on a going concern basis.

On 24 July 2012 the consolidated financial statements were approved for publication by the Board of Directors.

2. FINANCIAL REPORTING PRINCIPLES

2.1 DECLARATION OF CONFORMITY

The present consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) and the interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC), as approved by the European Union.

2.2 NEWLY PUBLISHED STANDARDS AND INTERPRETATIONS WHICH ARE NOT YET APPLICABLE

The impact on the consolidated financial statements of the Group of new Standards and Interpretations that came into application as from 1st of January 2011 onwards is presented below:

• Amendment to IAS 24 "Related Party Disclosures" (applicable for annual periods beginning on or after 1 January 2011).

This Standard supersedes IAS 24 "Related Party Disclosures" as issued in 2003. The application of which can significantly affect the related party disclosures in future accounting periods because some counterparties that did not previously meet the definition of a related party may come within the scope of the revised Standard.

• Improvements to IFRS (2009-2010) These improvements comprise several adjustments to different Standards and Interpretations, most of which clarify the accounting basis and have resulted in several changes in the details of the Group's valuation rules. Applying these "improvements to IFRS (2009-2010)" has no significant impact on the Group's reported results or financial position.

The following (other) new Standards and Interpretations that came into application as from the period of 1st of January 2011 to 31st of March 2012 onwards have no or limited impact on the consolidated financial statements of the Group:

• Amendments to IAS 32 "Financial Instruments: Presentation – Classification of Rights Issues" (applicable for annual periods beginning on or after 1 January 2011);
• IFRIC 19 "Extinguishing Financial Liabilities with Equity Instruments" (applicable for annual periods beginning on or after 1 July 2010);
• Amendment to IFRIC 14/IAS 19 "The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their

Interaction – Prepayments of a Minimum Funding Requirement" (applicable for annual periods beginning on or after 1 January 2011);

• Amendment to IFRS 1 "First Time Adoption of International Financial Reporting Standards – IFRS 7 exemptions" (applicable for annual periods beginning on or after 1 July 2010);

The Group did not apply prospectively to the 2011-2012 financial year the following new Standards and Interpretations, which had been issued but had not yet come into effect at the date of approval of this annual report:

• IFRS 9 "Financial Instruments" (applicable for annual periods beginning on or after 1 January 2013);
• IFRS 10 "Consolidated Financial Statements" (applicable for annual periods beginning on or after 1 January 2013);
• IFRS 11 "Joint Arrangements" (applicable for annual periods beginning on or after 1 January 2013);
• IFRS 12 "Disclosures of Interests in Other Entities" (applicable for annual periods beginning on or after 1 January 2013);
• IFRS 13 "Fair Value Measurement" (applicable for annual periods beginning on or after 1 January 2013);
• Amendment to IFRS 1 "First Time Adoption of International Financial Reporting Standards – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters" (applicable for annual periods beginning on or after 1 July 2011);
• Amendment to IFRS 1 "First Time Adoption of International Financial Reporting Standards – Loans received from governments at a below market rate of interest" (applicable for annual periods beginning on or after 1 January 2013);
• Amendment to IFRS 7 "Disclosures Transfers of Financial Assets" (applicable for annual periods beginning on or after 1 July 2011),
• Amendment to IAS 1 "Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income" (applicable for annual periods beginning on or after 1 July 2012);
• Amendment to IAS 12 "Income Taxes Deferred Tax: Recovery of Underlying Assets" (applicable for annual periods beginning on or after 1 January 2012);
• Amendments to IAS 19 "Employee Benefits" (applicable for annual periods beginning on or after 1 January 2013);
• Amendments to IAS 27 "Separate Financial Statements" (applicable for annual periods beginning on or after 1 January 2013);
• Amendments to IAS 28 "Investments in Associates and Joint Ventures" (applicable for annual periods beginning on or after 1 January 2013);
• IFRIC 20 "Stripping Costs in the Production Phase of a Surface Mine" (applicable for annual periods beginning on or after 1 January 2013).

At the present time the Group does not expect that the first-time application of these standards and interpretations will significantly affect the financial statements of the Group during the period of first-time application, with the exception of:

• IFRS 9 "Financial Instruments" (applicable for annual periods beginning on or after 1 January 2013), the application of which can significantly affect the classification and measurement of financial assets;

2.3 VALUATION RULES

In the prolonged accounting year 2011-2012 no major changes took place in the valuation rules compared with the previous reporting period apart from the application of the revised Standard IAS 24 "Related Party Disclosures" and the amended presentation of the write-offs recorded on the inventories resulting from the NRV test ('net realizable value' test). In accordance with IFRS Standards, these write-offs (and reversals of write-offs) on inventories resulting from the NRV test in 2011-2012 (reversal of write-offs on inventory with a negative impact on EBITDA of €-0.7 million) and in 2010 (reversal of write-offs on inventory with a negative impact on EBITDA of €-1.0 million) were no longer presented under the heading 'changes in inventory: finished goods and work in progress' but were now presented under the heading 'impairment losses' in the income statement.

(a) Conso l idation principl es

The consolidated annual financial statements consolidate the financial data of PinguinLutosa NV and the enterprises over which it has control, i.e. its subsidiaries, after eliminating all material transactions within the Group.

Subsidiaries

Subsidiaries are those companies over which the parent company has control, i.e. the power to direct the financial and operating policy of a company in order to benefit from its activities. In assessing whether control exists, account is taken of potential voting rights that are exercisable or convertible at that time. Subsidiaries are those companies in which PinguinLutosa NV has, directly or indirectly, over 50% of the voting rights or in which PinguinLutosa NV can exercise, directly or indirectly, a decisive influence on policy.

Subsidiaries are fully consolidated. The financial statements of subsidiaries are included in the consolidated financial statements from the date that the parent company gains control until the date that it loses control. Equity and net result attributable to minority shareholders are shown separately in the statement of financial position and income statement, respectively.

The financial statements of subsidiaries and joint ventures are drawn up for the same financial year as that of the parent company, based on uniform financial reporting principles for comparable transactions and other occurrences in similar circumstances.

Non-controlling interests

Non-controlling interests represent the shares of minority shareholders in the equity of subsidiaries which are not fully owned by the Group.

Non-controlling interests in the net assets of consolidated subsidiaries are identified and presented in a separate line under the equity of the Group. The book value of non-controlling interests in net assets consists of:

• On the one hand, the amount of the non-controlling interests at the time of the original business combination, measured in accordance with IFRS 3 "Business Combinations(2008)". The revised Standard allows a choice of measurement: initial valuation at fair value or initial valuation at the minority shareholders' proportion of the fair values of net assets recognized on acquisition of a subsidiary (business combination) (see below in these notes under the heading 'business combinations'). The choice ('full goodwill'-option) can be made on a transaction-by-transaction basis.
• On the other hand, non-controlling interests' share in changes in equity since the acquisition date.

The losses in a consolidated subsidiary attributable to the non-controlling interests may be greater than the non-controlling interest in the equity of a subsidiary. Any such excess and any further losses applicable to the non-controlling interest are deducted from the non-controlling interests which makes it possible to have a negative amount under the revised Standard.

Business combinations

As from 1 January 2010 onwards, business combinations and acquisitions are accounted for using the purchase method in accordance with the revised Standard IFRS 3 "Business combinations (2008)".

For each acquisition the cost, in order to obtain control over an entity, is measured as the total fair value, at the date of exchange, of relinquished assets, issued 'equity instruments' and liabilities entered into or taken over. The consideration transferred in a business combination includes the fair value, at the date of exchange, of the assets and liabilities resulting from a contingent consideration arrangement. The costs made by the acquirer that are directly attributable to the business combination are recognised as an expense in profit and loss as incurred, except for the costs of the issue of bonds or shares and similar instruments that are handled in accordance with IAS 32 and IAS 39.

Identifiable acquired assets, liabilities taken over and contingent liabilities which are part of a business combination are initially measured at their fair value at acquisition date, with the exception of fixed assets held for sale in accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations", which are measured at fair value minus the cost of selling them, regardless of the existence of any non-controlling interest.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Subsequent changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments are recognized in accordance with the relevant IFRS Standards (in equity or in profit or loss).

The 'full goodwill' option, which can be elected on a case by case basis, allows the acquirer to measure the non-controlling interest in the acquiree either at fair value or at its proportionate share of the acquiree's net assets.

In accordance with IFRS 3, the purchase of a non-controlling interest after control is obtained cannot be accounted for as a business combination but an appropriate accounting treatment is not foreseen in the current standard. As a consequence, the Group has decided to apply the accounting principles set out in IAS 27 (revised January 2008), "Consolidated and Separate Financial Statements", in this respect. Consequently, a purchase of a non-controlling interest after control is obtained is accounted for as a transaction between equity holders in that capacity. As such, the purchase of a non-controlling interest cannot give rise to goodwill or to a gain or loss in the income statement. Any difference between the fair value of the acquired non-controlling interest and the purchase consideration is recognized directly in equity. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any noncontrolling interests. The amounts previously recognised in other comprehensive income and accumulated in equity are accounted for as if the Company had directly disposed of the relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as specified by applicable IFRSs). If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-forsale financial asset depending on the level of influence retained.

Investments in joint ventures and associated companies

Joint ventures are enterprises in which the Group enters into a contractual agreement with one or more parties to undertake, directly or indirectly, an economic activity over which they have joint control, i.e. that the strategic, financial and operating decisions on this activity require the unanimous agreement of the parties sharing control.

Associated companies are companies in which the Group exercises, directly or indirectly, significant influence, but has no control over the entity's financial and operating policy and which are neither subsidiaries nor joint ventures. This is presumed if the Group holds at least 20% or more of the companies' voting rights.

The consolidated financial statements include the Group's share of the results of joint ventures and associates accounted for using the equity method from the date when joint control or significant influence commences until the date when joint control or significant influence ceases, 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".

The financial information included for these companies is prepared using the accounting policies of the Group. Under the equity method investments in associated companies and joint ventures are initially recognized at cost and then adjusted to reflect changes in the investor's share in the net assets of the company subsequent to acquisition, less any impairment in the value of individual investments. 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, except to the extent that the Group has incurred obligations in respect of that associate.

The carrying amounts of investments in joint ventures and associates are reassessed if there are indications that the asset has been impaired or that impairment losses recognized in prior years have ceased to apply.

Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognised at the date of acquisition is recognised as goodwill, which is included within the carrying amount of the investment. The investments in joint ventures and associates in the balance sheet include the carrying amount of any related goodwill, which is assessed for possible impairment as part of this investment.

Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss ('badwill').

At 31 December 2010 and 31 March 2012 the Group had no interests in joint ventures and there were no associated companies.

Consolidation eliminations

All intra-group balances and transactions with subsidiaries, including unrealized gains on intra-group transactions, are eliminated when preparing the consolidated financial statements. Unrealized losses are also eliminated unless the impairment is permanent.

Unrealized gains on transactions with associated companies and joint ventures are eliminated in the amount of the Group's interest in the entity. The same elimination rules apply to unrealized losses as for unrealized gains, with the difference that they are eliminated only where there is no indication for recording an impairment.

Finally, we would refer the reader to our consolidation scope, as mentioned in note "7.1. Subsidiaries".

(b) Foreign curre ncies

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). For the purpose of drawing up the consolidated annual accounts, the results and the financial position of each entity are expressed in euros, which is the functional currency of the parent company, and that in which the consolidated financial statements are presented.

Transactions in foreign currencies

A transaction undertaken in a foreign currency, when first recorded in the functional currency, 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. On every balance sheet date monetary items in a foreign currency are converted on the basis of the closing rate. Non-monetary assets and liabilities are converted at the exchange rate on the transaction 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. Realised or unrealised translation gains and losses are recognised in the financial result.

The Group enters into term contracts to hedge against exposure to certain exchange rate differences. We refer here to note "(u) derivatives" on the measurement rules for this type of financial instrument and to note "6.20. Risk Management Policy", where this type of instrument is analyzed more closely.

Financial statements of foreign entities

Monetary assets, 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. The benefits and charges in each income statement (including the comparative figures) are translated at the average exchange rate. All resulting translation differences are recognized in a separate equity line, more specifically 'translation differences'. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests.

The following exchange rates were used in preparing the financial statements:

			Closing rates
		31 March 2012 31 December 2010	Change %
1 GBP =	1.20020 €	1.16750 €	2.8%
1 USD =	0.74920 €	0.75460 €	-0.7%
1 PLN =	0.23940 €	0.25230 €	-5.1%
1 HUF =	0.00340 €	0.00357 €	-4.8%
1 BRL =	0.40960 €	0.45300 €	-9.6%
1 JPY =	0.00900 €	0.00926 €	-2.8%
1 CNY =	0.11810 €	0.11450 €	3.1%

			Average rate
		31 March 2012 31 December 2010	Change %
1 GBP =	1.16150 €	1.16605 €	-0.4%
1 USD =	0.72760 €	0.75488 €	-3.6%
1 PLN =	0.24150 €	0.25103 €	-3.8%
1 HUF =	0.00350 €	0.00360 €	-2.8%
1 BRL =	0.42990 €	0.43072 €	-0.2%
1 JPY =	0.00910 €	0.00861 €	5.7%
1 CNY =	0.11300 €	0.11166 €	1.2%

The average rate has been calculated over the past fifteen months (2010: past twelve months).

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. The cumulative amount of translation differences that were previously allocated to the non-controlling interests are taken out of consolidation, but are not reclassified to profit or loss.

When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount of translation differences is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture which includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount of translation differences is reclassified to profit or loss.

Goodwill and fair value adjustments on identifiable assets and liabilities acquired arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period.

(c) Segmented informatio n

IFRS 8 "Operating segments" requires disclosure of information about the Group's operating segments and requires a 'management approach', so that the segment information is presented on the same basis as for internal reporting purposes. Additional explanation about each of the operating segments is given in explanatory note "4. Segmented information".

(d) Non-current assets held for sale and discont inued operations

A discontinued operation is a component of the Group that has either been disposed of or is classified as held for sale, which represents a separate significant operating activity or geographical area of operations, is part of a coordinated plan to be disposed of as a separate significant business activity and which can be distinguished operationally and for financial reporting purposes.

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 realized mainly in a sales transaction and not through the continued used of the same. 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.

For a sale to be highly probable, management must have committed itself to a plan for selling the asset (or group of assets being disposed of), which is expected to be recognized as a completed sale within one year of the classification date, and an active program to locate a buyer and complete the plan should be initiated. In addition the asset (or disposal group) should be actively marketed at a price which is reasonable in relation to its current fair value.

Immediately before the asset is classified for the first time as held for sale the Group measures the carrying amount of the asset (or of all assets and liabilities in the Group) in accordance with the applicable IFRSs. Non-current assets and groups of assets to be disposed of, when first recognized as held for sale, are measured at the lower of carrying amount and fair value less the cost of selling them, 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 fair value minus the cost of selling it. Depreciation of such assets is discontinued as from their classification as held for sale. Comparative balance sheet information for prior periods is not restated to reflect the new classification in the balance sheet.

(e) Intangible fix ed asse ts

Intangible fixed assets consist of titles, brand names, customer portfolios, software, licences and ownership and similar rights acquired from third parties or acquired by contribution, along with internally generated software. Intangible assets acquired in a business combination are initially measured at fair value which thus becomes its deemed cost; intangible assets acquired separately are initially measured at cost.

Intangible fixed assets with unlimited useful life

Intangible fixed assets with unlimited useful life are recorded at cost. No amortization is taken on intangible fixed assets with unlimited useful life, but these will be assessed annually to determine whether any impairment has taken place. Where the realizable value of these intangible fixed assets is lower than their carrying amount, an impairment loss will be recorded in the income statement. At the balance sheet data no intangible fixed assets with unlimited useful life were identified.

Intangible fixed assets with limited useful life

Intangible fixed assets with limited useful life are recorded at cost less accumulated amortization and any accumulated impairments. Intangible fixed assets having a limited useful life are amortized over their expected useful life by the straight-line method from the date on which the asset was available. The remaining useful life and the amortization method are assessed annually during the financial year end closing. A change in the useful life of an intangible asset is accounted for prospectively as a change in estimate.

The following useful lives are applied by the Group:

•	Software	5 years
•	Development costs	5 years
•	Licences and ownership rights	5 years
•	Lutosa brand name	10 years
•	Customer portfolio Lutosa (Retail)	10 years
•	Customer portfolio Lutosa (Food service)	7 years
•	Customer portfolio Lutosa (Private label)	2 years
•	Customer portfolio Scana Noliko Group	15 years

Where the fair value is lower than the carrying amount calculated in this way, impairments losses will be recorded in the income statement.

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.

Development expenditure, where the results are applied to a plan or a design for producing new or significantly improved products and processes, prior to commercial production or use is capitalized if, and only if, all of the recognition criteria set out below are met:

• 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 product or process can be used or sold;
• the assets are demonstrably likely to generate future economic benefits;
• the Group has adequate technical, financial and other resources to complete the development and to use or sell the intangible asset;
• the Group can reliably assess the expenditure allocated to the intangible asset during its development.

The capitalized amount contains all costs that are directly attributable to the bringing into being and production of the asset, so that it can function in the way intended by management. An in-process research and development project acquired in a business combination is recognized as an asset separately from goodwill if its fair value can be measured reliably.

Capitalized development costs are written off on a straight-line basis over the period during which benefits are expected to accrue, from the time that the product or process is ready for use.

(f) Go odwi l l

Goodwill that arises upon a business combination is initially recorded as an asset on the day control is obtained ('acquisition date').

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill is initially recognized as an asset at cost, and subsequently measured at cost less any accumulated impairments.

If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

The cash generating unit to which goodwill is attributed is tested annually for impairment, and also whenever an indication exists that the unit may have undergone an impairment, by comparing the carrying amount with its realizable value. The realizable value is the higher of the fair value minus costs to sell and value in use.

Where the realizable value of the cash generating unit is lower than its carrying amount, an impairment will first be recognized against the carrying amount of the goodwill attributed to the unit, and then against the other assets of the unit pro rata to the carrying amount of each asset in the unit. An impairment recognized on goodwill may not be reversed at a later date.

When a subsidiary, joint venture or associated company is sold, the goodwill attributed to it is taken into account in determining the gain or loss on the sale.

The Group policy with regard to the determination of goodwill on the acquisition of an associate is discussed above under the heading "a) consolidation principles".

(g)Tangible fix ed asse ts

Owned assets

The Group has opted for the historical cost model and not for the revaluation model. Property, plant and equipment acquired separately is initially measured at cost. Property, plant and equipment acquired in a business combination is initially measured at fair value, which thus becomes its deemed cost. After initial recognition, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairments.

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, transport, etc.). The cost of a self-produced asset includes the cost of the materials, direct wage costs and a proportionate share of the production overhead.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. A qualifying asset is one that takes a substantial period of time to get ready for use or sale.

Subsequent costs

Subsequent costs are included in the carrying amount of the asset or recognized as a separate asset, 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. All other repair and maintenance costs are recognized in the income statement when incurred.

Depreciation

Depreciation is recorded by the straight-line method over the expected useful life of the asset. The depreciation of an asset begins as soon as it is ready for its intended use. The depreciation amount is charged to the income statement, No depreciation is taken on land and on properties under construction.

The remaining value and the useful life of an asset are reviewed at least at the end of every financial year, and where expectations differ from previous estimates, the change(s) are treated administratively as a change in estimate in accordance with IAS 8 "Changes in Accounting Estimates and Errors".

Initially the following average useful lives are applied:

•	Buildings	18 years
•	Plant, machinery and equipment
	Production	13 - 16 years
	Packing	12 - 16 years
	Energy	13 - 20 years
	Other	12 - 15 years

•	Furniture and vehicles	6 years
•	Other equipment	5 years

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount (see section on "i) Impairment of assets" below). Gains and losses on the disposal of fixed assets, being the difference between the sales price and the carrying amount of the assets being disposed of, are recognized in the income statement.

Government grants

Government grants relating to the purchase of property, plant and equipment are deducted from the cost of those assets. They are recognized in the balance sheet at their expected value at the time of initial government approval and corrected, if necessary, after final approval. The grant is amortized over the depreciation period of the underlying assets.

(h) Le asin g

A leasing agreement is classified as a finance lease when almost all the risks and benefits of ownership are transferred to the lessee. All other forms of leases are regarded as operating leases.

Finance leases

At the beginning of the lease period finance leases are recognized as assets and liabilities at amounts equal to the fair value of the leased asset or, where lower, at the present value of the minimum lease payments. The corresponding liability towards the lessor is recorded in the balance sheet as a liability under a finance lease. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine it; otherwise the Company's incremental borrowing rate is used.

The minimum lease payments are recorded partly as financing costs and partly as repayment of the outstanding obligation. 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. Conditional lease payments are charged to income in the periods in which they are made.

The depreciable amount of a leased asset is systematically attributed to each reporting period during the period of expected use, on a basis consistent with the depreciation principles applied by the lessee to its directly owned assets. When it is reasonably certain that the lessee will acquire ownership at the end of the lease period, the expected period of use is equal to the useful life of the asset. Otherwise the asset is depreciated over the shorter of the lease period or the useful life.

Operating leases

Lease payments on operating leases must be charged to income pro rata temporis during the lease period, 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.

Improvements to buildings held under operating leases are depreciated over their expected useful lives, or, where shorter, the term of the relevant lease.

(i) Impairment of tangible and intangib l e fix ed asse ts

In accordance with IAS 36, an assessment is made, at each balance sheet date, in respect of the Group's tangible and intangible assets, as to whether there are indications that an impairment loss needs to be recognized on a particular asset. Where an indication exists of such impairment, the realizable value of the asset is estimated. The realizable value of an asset or a cash flow-generating unit is the higher of the fair value after deducting the cost of selling it and its value in use. To determine the value in use, 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.

An impairment loss is recognized whenever the carrying amount of an asset, or the cash flow generating unit to which the asset belongs, is higher than the realizable amount. Impairment losses are recognized directly to the income statement.

Reversal of impairment losses recognized in prior years is included as income when there is an indication that the impairment losses recognized for the asset are no longer needed or the need has decreased. Whenever an impairment is reversed, the carrying amount of the asset is increased up to the revised estimate of its realizable amount, 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 recognized on the asset in earlier years.

(j) Inventories

Inventories are measured at the lower of cost (purchase costs or costs of conversion) by the FIFO (first-in, first-out) method and realizable value. The costs of conversion include all direct and indirect costs that are necessarily incurred in bringing the inventories to their present location and state. The net realizable value is the estimated sales price in the ordinary course of business, less the estimated costs of completion and the necessary costs of making the sale. Inventory is written down monthly on the basis of its market value. We refer to note "6.5. Inventories" for further information on the valuation of inventories.

According to IAS 41 "Agriculture", own vegetables which are grown on rented land should be measured on initial recognition until the moment they are harvested at fair value minus costs to sell.

(k) Financial asse ts

The Group classifies its financial assets in the following categories: 'at fair value through profit or loss' (FaAFVTPL/FaHT), 'availablefor-sale' (FaAFS), 'held-to-maturity' (Htm) and 'loans and receivables' (L&R). The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Criteria for the first-time recognition and for the derecognition of financial assets

The purchase and sale of financial assets are recognized at completion date. This means that an asset is recognized on the date that it is received by the Group, and that it is derecognized on the date that the Group disposes of it.

Criteria for the valuation of financial assets

Financial assets are initially measured at cost, which is equal to the fair value of the purchase price, including transaction costs. For derivatives, transaction costs should be charged to income immediately. Financial assets, other than those at fair value through profit or loss, are tested for impairment when there is objective evidence that they could be impaired. An impairment loss is directly recognized in the income statement.

• Financial assets at fair value through the income statement (FaAFVTPL/FaHT)

These include:

(a) Financial assets which are initially recognized and measured at fair value, and where subsequent changes in fair value are passed through the income statement;
(b) Financial assets held for trading purposes. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. This includes derivatives that do not serve to hedge a specific transaction.

Both these categories are measured on recognition at their fair value, with subsequent changes in this fair value passed through the income statement.

• Available-for-sale financial assets (FaAFS)

Non-current available-for-sale assets include investments in entities which were not acquired principally for the purpose of selling in the short-term, and which are neither consolidated nor accounted for using the equity method. Available-for-sale financial assets are classified under the 'other non-current financial assets' heading of financial fixed assets. Availablefor-sale financial assets are measured, after initial recognition, at fair value in the balance sheet. Investments in equities that are classified as available-for-sale financial assets but for which no price quotation on an active market is available, and the fair value of which cannot be reliably determined, are recognised at their historical cost less any impairments. Gains and losses deriving from changes in the fair value of available-for-sale assets are recorded directly to equity. When the participating interest is sold, received or otherwise disposed off, or when the carrying value of the participating interest is written down owing to an impairment, the accumulated profit (or loss) previously included in equity is transferred to the income statement.

Held-to-maturity investments (Htm)

Held-to-maturity investments are measured at cost, amortized using the 'effective interest method' less any impairments.

• Loans and receivables (L&R)

Loans and receivables are measured at amortized cost less any impairments. Based on an examination of all amounts outstanding at balance sheet date, an estimate is made of all loans and receivables of which the ability to collect is in doubt. An impairment loss is recognized 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. Loans and receivables include here trade receivables, other receivables, short-term financial assets, cash and cash equivalents.

(l) Trade and other receivables

Short-term trade receivables and other receivables are initially measured at fair value. At the end of the financial year, doubtful receivables are estimated based on an assessment of all outstanding amounts. Valuation allowances are recognized in the income statement whenever an objective proof exists that the asset has reduced in value.

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. No valuation allowances are taken by the Group for overdue amounts where collection is still deemed probable, for example because outstanding amounts are recoverable from the tax authorities or because the Group holds sufficient security. We refer to note "6.9. Trade and other receivables" for more information with regard to the accounting of write-offs.

(m) Cash and cash equivalents

Cash and cash equivalents consist of cash and call deposits, shortterm (< 3 months) investments, cheques and highly liquid shortterm investments that can be immediately converted into cash, of which the amount is known and which contain no material risk of reduction in value.

(n) Equity instruments and interest-bearing l ia bi l ities: distinctio n

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.

Equity instruments

An equity instrument is any contract that consists of a remaining interest in the Group's assets, after deducting all liabilities. An equity instrument issued by the Group is recognized under equity on the basis of the income received less direct transaction costs.

Interest-bearing liabilities

Interest-bearing liabilities are measured initially at fair value, less attributable transaction costs. After initial valuation interest-bearing liabilities are recognized at their amortized cost price, with the difference between the initial amount and the redemption value taken into the income statement pro rata temporis based on the 'effective interest' method.

(o) Equity instruments

Equity instruments of the Group are not revalued.

Own shares

Own shares are deducted from equity and reported in the statement of changes in equity. No gain or loss is recognized on the purchase, sale, issue or cancellation of own shares. Transaction costs directly attributable to the acquisition of own shares (after deducting any taxes) are also deducted from the equity attributable to the shareholders of the company. The result on the disposal of treasury shares sold or cancelled is recognized in retained earnings.

Dividends

Dividends are recognized as amounts payable in the period in which they are formally allotted, after approval by the General Meeting of Shareholders. Until such formal approval, the proposed dividends are included in the Group's consolidated equity.

(p) Provisio ns

Provisions are set up in the statement of financial position 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, and the amount of the obligation can be reliably estimated. The amount recognized as a provision is the best estimate at the balance sheet date of the outflow needed in order to fulfil the existing obligation, eventually discounted where the time value of money is a relevant factor.

Reorganization or restructuring

A provision for reorganization costs is recorded in those cases where the Group has approved a detailed formal reorganization plan and has created a valid expectation among those involved that the reorganization 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. Restructuring provisions include only the direct expenditure arising from the restructuring which is necessarily incurred on the restructuring and is not associated with the ongoing activities of the entity.

Environmental provisions

Environmental provisions are booked in accordance with applicable statutory duties on one hand and environmental policy developed by the Group on the other.

(q) Employee benefits

Pension obligations ('defined contribution plans')

Employee pension plans in the Group take the form in Belgium of 'defined contribution' schemes as the legally required return is basically guaranteed by the insurance company. In such schemes the actuarial risk and the investment risk are borne entirely by the employee. Obligations relating to these plans are recognized directly in the income statement at the time incurred.

Defined pension schemes ('defined benefit plans')

The Group has no defined pension schemes, except for the ones in the acquired French subisidiaries of the CECAB Activity.

Share-based payments

Share option programs and warrant plans enable employees and senior management to acquire shares in the company. The fair value of the services received from employees is recognized as an expense. The total amount to be recognized as an expense during the vesting period is determined on the basis of the fair value of the share options granted, not taking into account the impact of market price-unrelated conditions. Account is taken of market price-related conditions in the assumptions concerning the expected number of share options that will become unconditional. At each balance sheet date the Group revises its estimates of the numbers of share options that will become unconditional. Where applicable, the impact of the revision of the original estimates is recognized in the income statement with a corresponding entry to equity over the remainder of the vesting period. If and when the options are exercised, equity is increased by the amount of the monies received.

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. These benefits are treated in the same way as defined pension schemes, except that all actuarial gains and losses are recognized immediately, no bandwidth is applied and all past service costs are recognized immediately.

The Group has no other long-term employee benefits.

(r) Other financial l ia bi l ities: bank loans

Interest-bearing bank loans and overdrafts are measured initially at fair value after deduction of transaction costs, and are subsequently measured at their amortized cost calculated according to the effective interest method.

(s) Other financial l ia bi l ities: subordinated loans

Loans are initially recorded in the financial statements at fair value, net of transaction costs, and then at amortized cost. The difference between the income (net of transaction costs) and the redemption value is recognized in the income statement over the life of the loan by the effective interest method.

(t) Other financial l ia bi l ities: trade and other payables

Trade and other payables are measured at amortized cost.

(u) Financial asse ts and l ia bi l ities: derivativ es

The Group uses derivatives to limit risks relating to unfavorable foreign currency and interest-rate fluctuations arising out of operating, financial and investment activities. It is the Group's policy not to speculate in financial derivatives. The Group uses foreign currency buy and sell options, interest-rate swaps and other derivative instruments to control the impact of foreign currency and interest-rate fluctuations. These financial instruments are used solely to hedge exposure to currency and interest-rate risks.

Hedging instruments

The Group has opted not to apply hedge accounting. Should the Group decide in the future to apply hedge accounting, a formal documentation system would then be implemented in order to identify the underlying transaction as fast as possible when entering into new contracts, 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.

Valuation

Derivatives that represent economic hedging but do not fulfil the strict hedge accounting criteria as prescribed in IAS 39 "Financial Instruments: Recognition and measurement", are treated for accounting purposes as financial assets or financial liabilities measured at fair value (FaAFVPL/FlFVPL), with changes in value being passed through the income statement. The fair value of traded derivatives is equal to their market value. If no market value is available, the fair value is calculated using standard financial valuation models, based upon the relevant market rates at the reporting date, In the case of interest-bearing derivatives, the fair values correspond to the clean price, excluding interest accrued.

(v) Income taxes

Income taxes consist of current and deferred taxes.

The current tax liability is based on the fiscal profit for the year. The current tax is the amount of the income tax owed with respect to the fiscal profit of the period, together with any adjustments relating to prior periods. This amount is calculated based on local tax rates (or tax rates for which the legislative process is essentially completed) at balance sheet date. Current taxes for the current and prior periods are, in so far as not already paid, recognized as a liability. Where the amount already paid in respect of the current and prior periods is greater than the amount due in respect of this period, the balance is recorded as an asset.

Deferred taxes are recognized based on the 'liability' or balance method, 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. In general deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that taxable profits are available for offsetting against deductible temporary differences. Such liabilities and receivables are not recognized when the temporary differences result from the first-time recognition of 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, nor on the fiscal profit. The main temporary differences relate to the depreciation of tangible fixed assets, the effect of changed depreciations on the inventory valuation, the effect of changes in the inventory valuation method (full cost instead of direct cost) at the potato division and the canning division, the recognition of grants and the impact of the acquisitions.

Deferred tax liabilities are recognized for all taxable temporary differences relating to investments in subsidiaries, branches, associated companies and interests in joint ventures, 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.

The carrying amount of a deferred tax liability should be assessed at every balance sheet date. The Group will reduce 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, in part or in whole, to the benefit of the deferred tax asset.

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. Deferred taxes must be taken as income or expenses into the income statement of the period, unless they refer to elements recognized directly to equity, in which case the deferred tax is also recognized directly to equity.

Current tax assets and liabilities are offset only if the entity has a legally enforceable right to offset the recognized amounts and intends to settle the liability on a net basis, or to recover the asset at the same time as settling the liability.

(w) Revenue

Revenue from the sale of goods

Revenue from the sale of goods is recognised when:

(a) the essential risks and benefits of ownership are transferred;
(b) the Group retains no de facto control or involvement which normally belongs to the owner;
(c) the amount of the revenue can be reliably determined;
(d) it is probable that the economic benefits relating to the transaction will flow to the Group;
(e) the costs already or still to be incurred in respect of the transaction can be reliably measured,

Revenue is measured at the fair value of the remuneration received or to which entitlement is obtained, and represents the amounts due and payable for goods and services delivered in the normal course of business, taking into account the amount of any trade, financial or volume discounts given by the Group.

In accordance with the IFRS standards, the transport costs charged on to customers are included under the heading 'sales'.

Government grants

Government grants are recognized at the time that reasonable certainty exists that the Group will fulfil the conditions attached to the grants and the grants will be received. 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 compensate. 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, is recorded as income of the period in which it is received.

Grants related to income

Grants related to income are presented as 'Other Operating Income'.

(x) Finance income and costs

Finance income

Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, fair value gains on financial assets at fair value through profit or loss, gains on the remeasurement to fair value of any pre-existing interest in an acquiree, Interest is recognized by the 'effective interest method' as specified under IAS 39 "Financial Instruments: Recognition and Measurement". Dividend income from investments is recognized whenever the shareholders' rights to payment have been acquired.

Finance costs

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and contingent consideration, losses on disposal of available-for-sale financial assets, dividends on preference shares classified as liabilities, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables). All financial expenses are recognised at the time at which they arise. Financing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset (see heading "g) tangible fixed assets") are spread as an expense over the financing period using the effective interest method.

Foreign currency gains and losses

Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

(y) Non-recurring income and ch arg es

Operating income and expenses that are related to restructuring programs, impairment losses, environmental provisions or other events and transactions that are clearly distinct from the normal activities of the Group are presented on the face of the income statement as non-recurring items.

(Z) Events af t er balance sheet date

Events after balance sheet date concern the period between the balance sheet date and the date of the approval for publication of the financial statements.

Events after balance sheet date that refer back to situations that existed at the balance sheet date are incorporated into the financial statements. Events after balance sheet date that refer to situations arising only after the balance sheet date are mentioned in the notes only if they can have a significant impact.

2.4 CHANGES TO THE CONSOLIDATION SCOPE

2.4.1 Changes to the consolidation scope: accounting year ending on 31 March 2012

The following changes in the consolidation scope occurred during the financial year ending on 31 March 2012:

Business combination Scana Noliko Group

On 19 July 2011 the acquisition of the shares of Scana Noliko Group was closed formally. Scana Noliko Group (www.Scana-Noliko.be) is a strongly growing, internationally active food products company and comprises the companies Scana Noliko Holding NV, Scana Noliko NV, Scana Noliko Ltd., Scana Noliko Real Estate NV and BND CVBA. Besides the processing of harvest-fresh vegetables and fruit, it is also active in the preparation of convenience food products such as soups, sauces, dips and pasta dishes. This is being commercialised under private label and own brand in cans, glass jars or flexible packaging. There are 2 establishments in Bree and Rijkevorsel, employing 563 people in total as per 19 July 2011.

The figures of Scana Noliko Group were included in the consolidation scope of PinguinLutosa as from 1 July 2011 onwards, the moment that PinguinLutosa acquired control and management. The activities of Scana Noliko Group are included in the canning segment (see note '4. Segment information').

This acquisition again represents a major step forward for Pinguin-Lutosa, extending its product range with high quality preserved foods in can or glass jars. The strengths of Scana Noliko Group in agro, production, technology and R&D, in combination with the extensive commercial network of PinguinLutosa, complement each other per-fectly and strengthen the organisation of PinguinLutosa even further. The acquisition of Scana Noliko Group further strengthens the profitability of PinguinLutosa, and consequently lays a strong base for the future.

PinguinLutosa has paid €117.4 million for all the shares in the companies mentioned above. This amount includes a deferred payment in an amount of €1.8 million at an interest rate of 6%, payable end of July 2012. This transac-tion was financed as follows:

Partly by a private capital increase of €44.0 million which was fully subscribed on 15 February 2012 by the Gimv-XL fund, Food Invest International NV and Agri Investment Fund CVBA. 4,888,889 new shares were created at an issue price of €9.0 per share.
Partly by a subordinated loan with warrants for an amount of €36.0 million issued by Gimv-XL fund, repayable after 7 years at an interest rate of 6.8%.
The realisation of the real estate of Scana Noliko Group in an

amount of €30.0 million via Food Invest International NV (including a deferred payment of €1.8 million).

The balance will be realised from part of the trade receivables.

The costs related to the acquisition of Scana Noliko Group are taken directly in the income statement as per 31 March 2012 under the heading 'services and other goods: external advisory' and amount to €0.8 million (see note '5.4. Non-recurring costs and income).

The identifiable assets, liabilities and contingent liabilities and contingent liabilities of the Scana Noliko Group that meet all the criteria of IFRS "Business combinations" are taken into accounts at fair value on the acquisition date with the exception of all the shares of Scana Noliko Real Estate NV and the real estate classified as held for sale in accordance with IFRS 5 "Non-current assets held for sale and discontinued operations", which are recorded at fair value less costs to sell. However the real estate company Scana Noliko Real Estate NV was directly sold through to Food Invest International NV on 19 July 2011 in an amount of €27.5 million and the real estate from the site in Rijkevorsel was at its turn sold in the autumn of 2011 by Scana Noliko Rijkevorsel NV (asset deal) to De Binnenakkers NV (founded by Food Invest International NV and Scana Noliko Real Estate NV) in an amount of €2.5 million.

On acquisition-date the excess of the sum of i)+ii)+iii) (where i) the consideration transferred to obtain control, ii) the amount of any non-controlling interests in the acquiree, and iii) the fair value of the acquirer's previously held equity interest in the acquiree (if any)) over the net amounts of the identifiable assets acquired and the liabilities assumed of Scana Noliko Group amounted to €6.0 million.

The table below shows a calculation of the consolidation goodwill at acquisition date:

Consolidation goodwill Scana Noliko Group (in thousands of €)	Net fair value per 30/06/2011
Total consideration transferred Non-controlling interests Fair value of the previously held equity interest	117,360
Acquisition price	117,360
Fair value of acquired assets and liabilities	111,373
Fair value acquired assets and liabilities	111,373
Goodwill on acquisition date	5,987

The table below shows the opening balance of Scana Noliko Holding NV:

ASSETS (in thousands of €)	CONSOLIDATED IFRS balance sheet (net fair value) 30/06/2011
	SCANA NOLIKO HOLDING NV (CONSO)
NON -CURRENT ASSETS	77,822
Intangible fixed assets	25,239

Goodwill

Tangible fixed assets	51,563
- Land and buildings
- Plant, machinery and equipment	49,497
- Furniture and vehicles - Other	1,302 164
- Assets under construction and prepayments	599

Financial fixed assets
- Other non-current financial assets

Deferred tax assets	1,011

Long-term receivables (> 1 year)	9
- Other receivables	9

CURRENT ASSETS	134,531
Assets held for sale	30,893
Inventories	75,616
- Raw materials and consumables	10,901
- Work in progress and finished goods	64,716
Amounts receivable	27,337
- Trade receivables	24,116
- Other receivables	3,221
Other financial assets
- Derivatives
- Term accounts
Cash and cash equivalents	685

ACQUIRED ASSETS	212,353

LIABILITIES (in thousands of €)	CONSOLIDATED IFRS balance sheet (net fair value) 30/06/2011
	SCANA NOLIKO HOLDING NV (CONSO)
NON -CURRENT OBL IGAT IONS	44,503
Provisions for pensions and similar rights	428
Other provisions
Financial debts at credit institutions	18,863
- Finance leases
- Bank loans	18,863
- Bond loans
- Other financial debts
Other amounts payable
Deferred tax liabilities	25,213

CURRENT LIABILITIES	56,477
Financial debts at credit institutions	25,052
- Finance leases
- Bank loans: debts > 1 year payable within current year	4,802
- Bank loans	8,641
- Derivatives	11,048
- Other financial debts	561
Financial debts at credit institutions
Trade payables	23,130
Advances received on contracts
Tax payable	1,794
Remuneration and social security	4,786
Other amounts payable	611
Liabilities held for sale	1,104

ACQUIRED LIABILITIES	100,980

The financial information concerning the balance sheets and income statements, prepared on the basis of Belgian recognition and valuation rules, relating to Scana Noliko Holding NV per 30 June 2011 was transformed into the IFRS-recognition and valuation principles of the Group ('fair value' exercise IFRS 3 for the opening balance sheet per 1 July 2011). Reporting within Scana Noliko Holding NV was based on Belgian recognition and valuation rules and not the IFRS recognition and valuation principles as applied by the Group.

The gross contractual value of the trade and other receivables amounted to €27.3 million per 30 June 2011.

Given the planned real estate transaction the assets and liabilities of the company Scana Noliko Real Estate NV (including land an buildings at Bree) and the land and buildings of Scana Noliko Rijkevorsel NV were presented as assets available for sale (IFRS 5) in a total amount of €30.9 million and as liabilities available for sale (IFRS 5) in a total amount of €1.1 million. The assets and liabilities of the company Scana Noliko Real Estate NV and the land and buildings held for sale of Scana Noliko Rijkevorsel NV were valued, upon their initial classification in the opening balance sheet, at fair value (€30.0 million: global acquisition price of €27.5 million for all the shares of Scana Noliko Real Estate NV (including land and buildings at Bree) and €2.5 million for the land and buildings of Scana Noliko Rijkevorsel NV)) and were sold as per 19 July 2011 (all the shares of Scana Noliko Real Estate NV) and as per 19 December 2011 (sale 'tréfonds' buildings Scana Noliko Rijkevorsel NV). We refer to note '6.3. Tangible fixed assets' for more information with regard to the sale and rent-back transaction.

The table below shows the main categories of assets and liabilities of the Group that were sold and were classified as held for sale at the acquisition per 30 June 2011:

CONSOLIDATED IFRS balance sheet

Assets held for sale

(in thousands of €)	(net fair value)

Fair value of land and buildings Scana Noliko Group	27,812
(at Rijkevorsel & Bree (Scana Noliko Real Estate))
Other assets Scana Noliko Real Estate NV:
- Other financial assets: participation in de Binnenakkers NV	99
- Trade receivables	2,978
- Other receivables	4
- Cash and cash equivalents	1

AMOUNT AS PER 30 JUNE 2011	30,893

Liabilities held for sale (in thousands of €)	CONSOLIDATE D IFRS balance sheet (net fair value)

- Deferred taxes	706
- Trade payables	59
- Tax payable	298
- Remuneration and social security	41

AMOUNT AS PER 30 JUNE 2011	1,104

We note that in preparing this interim consolidated balance sheet, no account was taken of the valuation of the stocks under IAS 41 'Agriculture´, given that its character was too negligible.

The sales and net result of the activities of Scana Noliko Group from their acquisition date (1 July 2011) to 31 March 2012 amounted to €141.9 million and €1.1 million respectively. For further comments we refer to the annual report of the Board of Directors as per 31 March 2012.

An estimate for the accounting period of 15 months ending as per 31 March 2012 of the impact as if the Scana Noliko Group activities had been included in the Group's results from the start of the financial year (1 January 2011) gives sales of €234.2 million and a net result of €5.6 million respectively.

Business combination deep-frozen vegetable division of the French CECAB ('CECAB Activity')

On 1 September 2011 PinguinLutosa finalised the acquisition of the CECAB Activity. The deal includes 7 produc-tion sites: 2 sites in France (Moréac and Comines), 1 site in Hungary (Baja) and 4 sites in Poland (Lipno, Ada-mow, Elk and Dabrova). Apart from the entire acquisition of 100% of the shares of the sales companies of the CECAB Activity, in France (CGS SAS and CGB SAS) and Brazil (D'Aucy do Brazil Ltda), PinguinLutosa additionally acquired a number of non-controlling participations (10.0%) in the CECAB companies that hold the production infrastructure and rent the land and buildings to PinguinLutosa ('CECAB Entities': see below). The value of these participations was determined on the basis of the share in the statutory equity on the acquisition date (see note "6.4. Other Financial investments"). It was decided to have the acquisition coincide with the start of the new sales season as at 1 September 2011, which means that as of that moment the operational and commercial activities were entirely in the hands of PinguinLutosa.

Together these 7 sites have a production capacity of 150,000 tonnes per year. Together with the production capacity of the deepfrozen vegetable division of PinguinLutosa, the total capacity then amounts to 420,000 tonnes. The sales of the CECAB Activity amounted to €145.4 million in 2010, whereas sales of the deepfrozen vegetable division of PinguinLutosa in 2010 amounted to €233.2 million.

The investment for the acquisition of the above-mentioned participations for PinguinLutosa amounts to €5.7 million. In addition, both parties have agreed upon a result-driven acquisition price (earn-out) of the business and the commercial fund which starts as from 2012 onwards and can amount to a maximum of €6.0 million. This earn-out arrangement has no time limit and depends on the attainment of a target EBITDA. This earn-out was discounted and was included as goodwill for an amount of €3.1 million.

The costs related to the acquisition of the CECAB Activity are taken directly in the income statement as per 31 March 2012 under the heading 'services and other goods: external advisory' and amount to €0.6 million, whereas these amounted to €0.4 million as per 31 December 2010 (see note '5.4. Non-recurring costs and income).

The CECAB Activity provides economies of scale, competences in terms of agronomy, additional growing areas, additional production techniques and a strong market position in certain countries. The ambition for the CECAB Group is to ally itself with a wellknown player in the sector, in order to thus become an even more major Europe-an player in the deep-frozen vegetable sector. For PinguinLutosa, this approach signified yet another important step in the Group's continued development, since it expanded the deepfrozen vegetable activities by over 50%. The production sites and the markets of the CECAB Group (d´Aucy Frozen Foods) are highly complementary with those of PinguinLutosa´s deep-frozen vegetable division. The synergy of means of production and geographic markets will lead to a further optimal development of the strengths of both groups.

The CECAB Group and PinguinLutosa are convinced that the combination of the expertise regarding production, logistics, agronomy and sales, combined with the very strong focus on efficiency and cost awareness will be the basis for good profitability in the future. The CECAB Group will remain closely involved with the operations and will manage the financing of working capital for the activities that have been transferred. It will also continue to manage the financing of future investments at the sites (see below).

Within the framework of the acquisition of the CECAB Activity, in 2011 PinguinLutosa set up in France, Poland and Hungary a number of operational subsidiaries, namely PinguinLutosa Foods Polska Sp. Z.o.o. (Poland), PinguinLutosa Foods Hungary Kft. (Hungary) and Pinguin Comines SAS (France). These subsidiaries concluded with the local entities belonging to the CECAB Activity (namely D´Aucy Polska Sp. Z.o.o. (Poland), Bajaj Hutoipari Zrt. (Hungary), D´Aucy Frozen Foods Hungary (Hungary), Sica Vallee de la Lys SAS (France) and Moréac Sur-gélés SAS (France) (the CECAB Entities)) the following bilateral agreements with regard to the activities on the production sites of the CECAB Activity:

• 6-year leases under which the buildings and machinery on the production sites are leased by the CECAB Entities to the subsidiaries of PinguinLutosa;
• Supply and financing agreements where in each case:
* the CECAB Entity is given responsibility for supplying the raw materials to the production site in the quantities and types as defined by PinguinLutosa;
* the CECAB Entity finances the cost price of the raw materials by means of a supplier credit;
* the subsidiary of PinguinLutosa is put in charge of the production, the deep-freeze process and the storage of the vegetables and fruit that were delivered by the CE-CAB Entity;

* the subsidiary of PinguinLutosa may at any time purchase the products at the production cost price by submitting a purchase order and undertakes to purchase the products entirely at the latest one year after production.

Finally, PinguinLutosa and the CECAB Group also concluded a "transition services agreement" for the provision of services within the framework of the transfer of the IT systems, invoice collection systems, human resources management, marketing and administration.

The identifiable assets, liabilities and contingent liablities of the Scana Noliko Group that meet all the criteria of IFRS "Business combinations" are taken into accounts at fair value on the acquisition date.

The table below shows the impact on the consolidated balance sheet at acquisition date:

ASSETS (in thousands of €)	Net fair value Subconsolidated CECAB Activity 31/08/2011
FIXED ASSETS	342
Intangible fixed assets	32
Tangible fixed assets	73
Financial fixed assets	96
Deferred tax assets	141

CURRENT ASSETS	101,893
Inventory	65,716
Accounts receivable	33,030
Cash and cash equivalents	3,146

ACQUIRED ASSETS	102,235

LIABILITIES (in thousands of €)	Net fair value Subconsolidated CECAB Activity 31/08/2011
NON -CURRENT OBL IGAT IONS	11,192
Provisions	566
Other payables	9,741
Deferred tax liabilities	886
CURRENT LIABILITIES	88,934
Trade payables	85,842
Tax payable	2,144
Remuneration and social security	948
ACQUIRED LIABILITIES	100,126

On acquisition-date 1 September 2011 the excess of the sum of i)+ii)+iii) (whereby i) the consideration transferred to obtain control, including the result-driven earn-out, ii) the amount of any non-controlling interests in the acquiree, and iii) the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net amounts of the identifiable assets acquired and the liabilities assumed of the CECAB Activity amounted to €2.9 million.

The table below shows a calculation of the consolidation goodwill at acquisition date:

Consolidation goodwill CECAB Activity* (in thousands of €)	Net fair value per 31/08/2011
Total consideration transferred*	1,918
Earn-out	3,127
Non-controlling interests
Fair value of the previously held equity interest
Acquisition price	5,045
Fair value of acquired assets and liabilities	2,108
Fair value of acquired assets and liabilities	2,108
Goodwill on acquisition date	2,937

* for a 100% participation in the companies CGS S.A.S., CGB S.A.S. and D'aucy do Brasil Ltda.

The tangible fixed assets are situated in the CECAB Entity in which as of 1 September 2011 PinguinLutosa NV holds a participating interest of 10%. It is these last-mentioned companies which in turn lease the tangible fixed assets to the PinguinLutosa entities. The Group did not take over any brands in this asset deal, thus no value was assigned to the intellectual property. The brand ´d´Aucy´ can be used temporarily, in exchange for a royalty. No value was assigned to this brand due to the fact that the focus of the Group for deep-frozen vegetables is primarily oriented on the private label market and because of the uncertainty of commercial success.

The stocks of the CECAB Activity were taken over on the basis of the stocks actually present on 31 August 2011. On the takeover date in the subsidiaries of PinguinLutosa a value adjustment was booked on the stock of €64.7 million, firstly the upward adjustment to the fair value of the stock of the subsidiaries of PinguinLutosa for an amount of €2.9 million, and secondly the booking of the repurchase obligation of €61.8 million for the stock of the CECAB Entity (see above) which under IFRS must be fully included on the balance sheet of the subsidiaries of PinguinLutosa. In addition, under IFRS standards as of the takeover date of 31 August 2011 provisions for pen-sions were booked for a total amount of €0.4 million.

Following this asset deal, the existing trade receivables and payables were acquired. Employees were transferred over, together with the attendant social security obligations. No additional liabilities arose at the acquisition date from this operation within the meaning of IAS 19. 666 people were transferred over at acquisition date. The Group also took over the existing customer contracts and customer relations for the CECAB Activity. Given the annual character of the customer contracts and their volatility, it was decided not to assign any value to them.

The sales and net result of the activities of the CECAB Activity from their acquisition date (1 September 2011) to 31 March 2011 amounted to €96.6 million and €1.0 million respectively. For further comments we refer to the an-nual report of the Board of Directors as per 31 March 2012.

An estimate for the accounting period of 15 months ending 31 March 2012 of the impact as if the CECAB Activity had been included in the Group's results from the start of the financial year (1 January 2011) gives sales of €172.0 million. An estimate of the impact as if the CECAB Activity had been included in the Group's results from the start of the financial year (1 January 2011) on the net result can not be provided since the internal management figures up till the result after taxes as in the new business model were not available for the period preceding the acquisition by PinguinLutosa.

New companies

In 2011 a number of new companies were established following the acquisition of the CECAB Activity (01/09/2011: see 'business combination deep-frozen vegetable division CECAB' above), more specifically 'Pinguin Comines SAS', 'PinguinLutosa Foods Polska Sp. Z o.o.' and 'PinguinLutosa Hungary Foods Kft.'. These companies, which are 100% owned by the Group, were fully consolidated for the last 7 months of the financial year ending 31 March 2012.

The sales, operating result and net result of the activities of these companies from their date of foundation to 31 March 2012 amounted to €28.0 million, €0.4 million and €-0.5 million respectively.

Mergers

On 31 March 2012, in Belgium a silent merger was undertaken of Scana Noliko NV and Scana Noliko Rijkevorsel NV, with a retroactive accounting effect as from 1 January 2012 onwards. This merger was part of the plan to simplify the group structure.

Dissolution and liquidation

Effective 16 September 2011 the company Pinguin Hong Kong Ltd. was dissolved and liquidated. This liquidation also fits within the aim of simplifying the group structure.

2.4.2 Changes to the consolidation scope: 2010

The following changes in the consolidation scope occurred during the 2010 financial year:

Other changes

In 2010 the name of several subsidiaries has changed: 'Lutosa Italia Srl' has been renamed 'PinguinLutosa Italia Srl'; 'Lutosa Shanghai Ltd.' has been renamed 'PinguinLutosa Foods Shanghai Ltd.'; and 'Pinguin Foods UK Ltd.' has been renamed 'PinguinLutosa Foods UK Ltd.'.

3. USE OF ESTIMATES

Preparing the financial statements in accordance with the IFRS Standards requires management to make judgements, estimates and assumptions that can have an impact on the reported amounts of assets and liabilities, contingent liabilities and assets, income and costs, and elements thereof that are mentioned in the notes.

The estimates made on the reporting date reflect conditions as they existed on that date. The main estimates, judgments and underlying assumptions relate primarily to determining impairments of goodwill, the intangible and tangible fixed assets, deferred tax assets and provisions:

• Impairment losses on goodwill:

The Group tests goodwill and cash generating units annually for impairment where indications exist that goodwill and cash generating units may have fallen in value. This analysis is based on assumptions such as market evolution and market share, evolution of the margins, EBITDA/sales ratio, discount rates and working capital/sales ratio;

• Impairment losses (or reversal of impairment losses) on (in) tangible fixed assets:
At every reporting date the Group examines whether any indication exists of a possible impairment of (in)tangible fixed assets;
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 recording and calculation of provisions for tax and environmental risks and for restructurings;
• Deferred tax assets:

Deferred tax assets relating to carried-forward tax losses are recognized 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. In estimating this, the Group takes into account elements such as budgets, long-term strategies and tax planning opportunities;

• Provisions:

At every year end the Group estimates the future risks and costs of pending disputes, taking advice in particular from outside experts.

The estimates, 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. The actual outcomes can differ from these estimates. The estimates and underlying assumptions are constantly reassessed.

Management believes that a reasonable basis exists for the estimates and assumptions and that these reflect in the best possible way the outlook for the Group.

4. SEGMENT REPORTING

The information that is reported for PinguinLutosa to the Group's 'chief operating decision makers' with a view to assessing the results and allocating resources, is based on three operating segments, which are further broken down by geographic location. This segmentation basis is employed to allocate resources to the different segments and enables the performance of those segments to be assessed. The management team judges the results of the segments based on the net result after taxes. The assets and liabilities per segment are those belonging directly to it, including the elements that can reasonably be attributed to the segment (tax assets and tax liabilities are included in segment assets and segment obligations).

For internal 'management reporting' the Group is therefore divided into three segments based on products belonging either to the deep-frozen vegetable segment, to the potato segment or to the canning segment where the geographic location is an additional segmentation basis per operating segment.

The Group's various companies are included in the following segments:

• Deep-frozen vegetable segment:
includes the companies PinguinLutosa NV, Pinguin Langemark NV, Pinguin Aquitaine SAS, PinguinLutosa Foods UK Ltd, Pinguin Salads BVBA, and the sales offices MAC Sarl, Pinguin-Lutosa Deutschland GmbH, PinguinLutosa CEE Gmbh, CGS S.A.S., CGB S.A.S., Pinguin Comines S.A.S., PinguinLutosa Polska Sp. Z.o.o., PinguinLutosa Hungary Kft and D'aucy do Brazil Ltda.
• Potato segment:

includes the companies PinguinLutosa Foods NV, G&L Van den Broeke-Olsene NV, Vanelo NV and the sales offices Lutosa France Sarl, Lutosa UK Ltd,, Lutosa España SA, Lutosa América Latina Ltda, PinguinLutosa Japan K.K. PinguinLutosa Foods Shanghai Ltd and PinguinLutosa Italia Srl.

• Canning segment:i

includes the companies Scana Noliko Holding NV, Scana Noliko NV, Scana Noliko Rijkevorsel NV, Scana Noliko Ltd and BND CVBA.

The distribution of the turnover was allocated to the different countries based on the place where the sales occur, this means on the level of the legal entity that performs the sale.

The same valuation rules are used in this segment reporting as in the consolidated financial statements.

The result of a segment contains the income and costs generated directly by that segment, including the portion of the general income and costs that can reasonably be attributed to the segment. For a further explanation of the one-off income and one-off charges we refer to note "5.4. Operating result (EBIT)". The negative net result in Belgium in the deep-frozen vegetable segment can be mainly explained by the fact that the financing costs are booked on the level of the parent company.

The assets and liabilities of a segment are those belonging directly to it. With primary segment reporting structured according to the geographic location of the assets, it was easy to attribute the balance sheet items to the respective segments. Assets and liabilities per segment are presented before elimination of intersegment positions. Intersegment transfer pricing is based on market conditions.

Information about major customers

Sales of the Group out of transactions with external customers do not include individual customers that represent 10% or more of sales of the Group. This is the case for current accounting year and previous accounting year.

The Group sells its products in more than 110 countries across the world. The table below gives an overview of sales by customer location.

Sales (in thousands of €)		31/03/2012 (15 months)		31/12/2010 (12 months)
United Kingdom	190,264	22.85%	144,782	29.94%
France	166,130	19.95%	73,847	15.27%
Belgium	84,202	10.11%	54,277	11.22%
Germany	84,107	10.10%	50,276	10.40%
Other EU-countries	205,086	24.63%	99,644	20.61%
Other	103,023	12.36%	60,738	12.56%
Total sales	832,812	100%	483,564	100%

The United Kingdom represents 14.4% of the sales of the potato division, as opposed to 34.4% (44.2% in accounting year 2010) in the deep-frozen vegetable sector and amounts to 8.6% in the canning division (9 months of contribution of Scana Noliko Group). The percentage decrease compared to 2010 in the deep-frozen vegetable division can be explained by the acquisition of the CECAB Activity which caused a number of new sales markets to increasing their share within the deep-frozen vegetable sector, including France, Poland, Hungary and a series of other countries both inside and outside the EU.

In the accounting year ending 31 March 2012 sales to the 5 largest customers amounted to 15.1% of consolidated sales (2010 accounting year: 18.1%). The acquisition of Scana Noliko Group and the CECAB Activity in the 2011/2012 financial year resulted in a greater degree of customer diversity compared to the previous financial year, leading to a lower share being accounted for by the largest customers.

The tables below provide a summary of the performance of each operating business segment, for the twelve month period ended 31 December 2010 and the fifteen month period ended 31 March 2012.

A more detailed discussion of the segment information is provided in the report of the Board of Directors.

The column 'others' of the deep-frozen vegetable division comprises the production companies in the United Kingdom, France, Poland and Hungary and the sales offices of this division, whereas the column 'others' of the potato division comprises the sales offices of this division. Segmented information per operating segment at 31 March 2012 is given in the table below:

				Deep-frozen vegetable segment
31/03/2012 (15 months) (In thousands of €)	(subconsolidated) elgium B	Others	Eliminations	Subconsolidation

RESULT S
Sales	196,462	271,764	-72,989	395,237
- sales to external customers	155,137	237,076		392,213
- intersegment sales	41,325	34,688	-72,989	3,024
Total operating income	204,428	276,914	-77,317	404,025

Operating result (EBIT)	-6,836	-7,807		-14,643
Depreciation and impairment losses on assets	9,948	4,348		14,296
Write-offs recognized in comprehensive income	702	1,388		2,090
Provisions	8	471		479
Operating cash flow (EBITDA)	3,822	-1,600		2,222

Financial income	564	612	-204	972
- Interest charges	71	14		85
Financial expenses	-17,095	-4,189	204	-21,080
- Interest income	-10,111	-2,374		-12,485
Result before taxes	-23,367	-11,386		-34,751
Income taxes	9,215	2,417		11,632
Net result	-14,152	-8,967		-23,119

Non-recurring income	257			257
Non-recurring expenses	-3,144	-7,927		-11,071
Operating result before
non-recurrings (REBIT)	-3,949	120		-3,829

ASSETS AND LIABILITIES
Segment assets	371,945	193,426	-99,841	465,530
Segment obligations	267,432	173,193	-70,778	369,847
Segment non-current assets (**)	267,094	31,805	-29,063	269,836

OTHE R INFORMAT ION
Number of interim employees (year end)*	82	282		364
Number of employees (year end)*	445	935		1,380

(*) In number of full-time equivalents

(**) The table above shows the geographical spread of fixed assets in accordance with IFRS 8.33 by means of exceedances a materiality of 10%

	Canning segment		Potato segment




859,094




















	604	604	677	25	652

The column 'others' of the deep-frozen vegetable division comprises the production companies in the United Kingdom and France and the sales offices of this division, whereas the column 'others' of the potato division comprises the sales offices of this division.

			Deep-frozen vegetable segment
31/12/2010 (12 months) (In thousands of €)	(subconsolidated) elgium B	Others	Eliminations	Subconsolidated
RESULT S
Sales	140,916	137,157	-32,665	245,408
- sales to external customers	126,745	118,401		245,146
- intersegment sales	14,171	18,756	-32,665	262
Total operating income	131,868	141,877	-34,501	239,244

Operating result (EBIT)	-871	7,237		6,366
Depreciation and impairment losses on assets	6,376	3,323		9,699
Write-offs recognized in comprehensive income	-737	277		-460
Provisions	-33	-32		-65
Operating cash flow (EBITDA)	4,735	10,805		15,540

Financial income	1,759	372	-481	1,650
Financial expenses	-4,570	-1,882	481	-5,971
Result before taxes	-3,682	5,727		2,045
Income taxes	223	-1,794		-1,571
Net result	-3,459	3,933		474

Non-recurring income	150	2,624		2,774
Non-recurring expenses	-402	-1,485		-1,887
Operating result before non-recurrings (REBIT)	-619	6,098		5,479

ASSETS AND LIABILITIES
Segment assets	212,983	104,672	-46,932	270,723
Segment obligations	144,854	79,049	-19,371	204,532
Segment non-current assets (**)	131,158	24,870	-27,561	128,467
OTHE R INFORMAT ION
Number of interim employees (year end)*		170		170
Number of employees (year end)*	330	307		637

(*) In number of full-time equivalents

(**) The table above shows the geographical spread of fixed assets in accordance with IFRS 8.33 by means of exceedances a materiality of 10%T

Potato segment
Subconsolidated Eliminations Eliminations	Others	(subconsolidated) Belgium


-2,597 240,018 -1,862	3,330	239,285
238,418	811	237,607
-2,597 1,600 -1,862 -2,795 238,668 -3,944	2,519 3,748	1,678 237,715

957	228	729

9,595	55	9,540
75		75

10,627	283	10,344

1,072 -14	6	1,066
-1,431 14	-9	-1,422
598	226	371
1,683	-67	1,750
2,281	159	2,121



957	228	729

-1,112 159,217 -9,703	1,590	158,739
-250 86,694 -9,703	701	86,243
-386 113,033 -53,199	174	113,245

77		77
646	25	621

5. NOTES TO THE CONSOLIDATED INCOME STATEMENT

When comparing consolidated income statements it should be noted that the past financial year (ended on 31 March 2012) covers a period of 15 months. The financial year ending on 31 December 2010, on the other hand, covered a period of 12 months. In addition the accounting period ending as per 31 March 2012 now includes the consolidated results of 15 months for PinguinLutosa NV, consisting of:

(i) 15 months of results of PinguinLutosa (before the acquisitions of the CECAB Activity and Scana Noliko Group), and
(ii) 9 months of results of Scana Noliko Group (included as from 19 July 2011 onwards). These results are included in the canning segment.
(iii) 7 months of results of the CECAB Activity (acquisition effective as from 1 September 2011 onwards). These results are included in the deep-frozen vegetable segment.

The financial year running from 1 April 2012 to 31 March 2013 will for the first time give a normal view of the consolidated results of the PinguinLutosa Group including recent acquisitions for a period of 12 months.

In order to give a better objective picture, the impact of the acquisition of the CECAB Activity and the Scana Noliko Group are shown seperately. At the same time:

• In column 2 the non-audited management figures per 31/12/2011 are added in order to allow comparison with the audited figures per 31/12/2010.
• In column 4 the non-audited management figures per 31/03/2011 are added in order to allow comparison with the audited figures per 31/03/2012. These figures do not take account the acquisition of Scana Noliko Group and the CECAB Activity, since these occurred later.
• In column 5 the figures of the CECAB Activity are added in order to show the impact of the acquisition of the CECAB Activity in the accounting year. The financing costs for the acquisition and the acquisition costs are not included in these figures.
• In column 6 the figures of Scana Noliko Group are added in order to show the impact of the acquisition of Scana Noliko Group in the accounting year. The financing costs for the acquisition and the acquisition costs are not included in these figures.

Consolidated income statement (in thousands of €)	01/01/2011- 31/03/2012	01/01/2011- 31/12/2011	01/01/2010- 31/12/20108	01/01/2010- 31/03/2011	01/09/2011- 31/03/2012	01/07/2011- 31/03/2012
	Pinguin Lutosa Group	Pinguin Lutosa Group	Pinguin Lutosa Group	Pinguin Lutosa Group	Subconsolida tion of CECAB activity 9	Subconsolida tion of can ning division 10
	(15 months)	(12 months)	(12 months)	(15 months)	(7 months)	(9 months)
Sales	832,812	622,142	483,564	602,145	96,594	141,880
Increase/decrease (-) in inventories: finished goods and work in progress	13,670	13,233	-16,153	-11,254	12,599	-243
Other operating income	12,612	10,671	6,557	6,977	993	5,105

Raw materials, consumables and goods for resale	-500,643	-368,908	-264,797	-342,676	-75,570	-82,168
Services and other goods	-201,024	-161,591	-121,811	-152,844	-22,543	-28,047
Personnel costs	-111,421	-81,655	-58,253	-72,955	-13,191	-21,870
Depreciation and amortization	-31,753	-24,376	-18,912	-24,060	-18	-6,587
Impairment losses on assets	-1,898		-382
Impairments, write-offs	-1,784	-1,008	386	-645	-489	595
Provisions	-450	213	65	67	-83	29
Other operating charges	-6,773	-6,193	-2,940	-3,864	-458	-1,540
Operating result (EBIT)	3,349	2,528	7,323	891	2,968	4,356
Operating cash flow (EBITDA)	39,234	27,699	26,167	24,591	3,558	10,321
Non-recurring income	1,289	1,289	2,774	2,774
Non-recurring expenses	-17,963	-10,486	-1,887	-1,990	-2,914	-6,892

Operating result before non-recurrings (REBIT)	20,023	11,725	6,436	107	5,881	11,246
Operating cash flow before non-recurrings (REBITDA)	53,288	37,446	24,985	23,512	6,471	17,211
Financial income	2,157	2,191	2,708	3,460	409	127
Financial expenses	-26,804	-21,274	-7,388	-11,252	-2,094	-3,342

Operating profit after net finance costs	-21,299	-16,556	2,643	-6,901	1,283	1,130
Taxes	7,244	4,132	112	1,735	-314	-40
PROFIT (LOSS) OF THE PERIOD	-14,055	-12,424	2,755	-5,166	968	1,090

Attributable to: - The shareholders of PinguinLutosa (the 'Group')	-13,763	-12,751	2,813	-4,661	968	1,039
- Non-controlling interests	-292	328	-58	-505		52

8 Amended presentation of the write-off on stocks as a result of the NRV test: see note "2.3. Change in valuation rules".

9 The amounts presented include the net contribution (figures after elimination of intercompany amounts on the level of PinguinLutosa Group) of the subconsolidated CECAB Activity to the consolidated figures

10 The amounts presented include the net contribution (figures after elimination of intercompany amounts on the level of PinguinLutosa Group) of the subconsolidated canning division to the consolidated figures.

5.1 SALES

The Group's sales consist mainly of the sale of deep-frozen vegetable and potato products. In addition the Group's activities focus as well on the processing of harvest-fresh fruit and vegetables and the preparation of ready-to-eat food such as soups, sauces, dips and pasta dishes, mainly in glass and canned (Scana Noliko Group). Scana Noliko Group was acquired as per 1 July 2011, which makes that the sales of canned goods represent a period of 9 months in the consolidated sales. The Group also sells, through PinguinLutosa Foods NV and Vanelo NV, chilled potato products (7.6% of total sales).

31/03/2012 (15 months)	31/12/2010 (12 months)

627,366	435,429
63,566	48,135
141,880

832,812	483,564

During the period of 15 months the Group's consolidated sales increased by 72.2% compared to prior year (12 months). This increase is largely the direct consequence of the two acquisitions that took place in the past financial year: the turnover of the CECAB Activity is included in the figures for 7 months (impact on deep-frozen vegetable segment: €96.6 million) and the sales of Scana Noliko Group are included in the group sales for 9 months (impact of canning segment: €141.9 million). These factors make an accurate, objective comparison of the sales more difficult.

The deep-frozen segment represents 47.1% of the consolidated sales of the Group (31 December 2010: 50.7%), but represents 56.8% of the sales in case only the deep-frozen vegetable and potato segment would be taken into account. The increase of sales in this segment (+60.0%) compared to prior year is mainly due to the fact that on the one hand the current financial year now includes 15 months and on the other hand the impact of the inclusion of 7 months of sales of the CECAB Activity for an amount of €96.6 million. During the previous financial year, volumes sold within the existing deep-frozen vegetable division decreased by 8.9%.

In the prolonged accounting year ending per 31 March 2012 sales in the potato division amount to €298.7 million (35.9% of total sales) whereas €63.6 million is related to the chilled sector (mainly French fries and potato flakes). Last accounting year (12 months) the share of the potato division amounted to 49.3% (€238.4 million), of which €48.1 million in the chilled sector. The sales of the potato division increase by 25.3% compared to 2010. The increase is mainly due to the combined effect of the increased sales prices (+18.3%) which were applied as a reaction to the strongly increased raw material prices in the first half of 2011 and the planned organic volume increase of 5.9%.

Sales in the canning division represent 17.0% of total consolidated sales (9 months contribution).

5.2 OTHER OPERATING INCOME

Other operating income (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)

Operating subsidies	561	22
Rentals	13	478
Refund of property tax	2,824
Costs passed on to growers (canning division)	2,648
Costs passed on in the context of storage	525
Sale of waste	1,458	600
Compensation for the partial vacation of part of the site at King's Lynn (construction of a supermarket)		2,624
Signing fee: green energy project		150
Insurance compensation received	311	158
Realised capital gain	595	16
Costs passed on in the context of the delivery of green energy	1,226	355
Other	2,449	2,154
Total	12,612	6,557

The increase in other operating income during the financial year 2011/2012 (15 months) compared to the financial year 2010 (12 months) is partially attributable to re-billings to growers from Scana Noliko Group for an amount of €2.6 million (such as seeds, cultivation and harvesting works, transport, etc.). Scana Noliko Group was included in the consolidation scope of PinguinLutosa as from July 2011 onwards.

In addition there was a return of withholding tax on income derived from real estate of €2.8 million in the financial year 2011/2012, with an amount of €1.0 million being included in non-recurring income. The return of withholding tax on income derived from real estate included in the non-recurring income concerns recovered withholding tax received with regard to the period preceding the acquisition.

The leasing contract which was attributable to the leasing out of deep-freeze units at the King's Lynn site (United Kingdom) came to an end in mid-2010; the revenues are therefore substantially lower in accounting year 2011/2012 than last year (2010).

In 2010, other operating income includes a compensation amounting to €2.6 million that the Group receives for the vacation of part of the site at King's Lynn for the construction of a supermarket (for further explanation we refer to note "5.4. Operating result (EBIT)").

The inclusion in consolidation of Scana Noliko Group for a period of 9 months and of the CECAB Activity for 7 months results in generally increasing other operating income. The extended financial year 2011/2012 (15 months) compared to the financial year 2010 (12 months) also has an effect of increasing the other operating income.

The 'other' item above consists primarily of packaging materials invoiced to customers (mainly pallets), the sale of used cooking fats and the invoicing of diverse costs.

5.3 OPERATING CHARGES

The Group's operating charges can be broken down as follows:

Operating charges (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)
Raw materials, consumables and goods for resale	-500,643	-264,797
Purchase of fresh vegetables, fruits and potatoes and ingredients	-210,773	-137,268
Purchase of frozen vegetables of external parties	-137,041	-62,158
Purchase of packing materials	-86,614	-35,642
Storage and work by third parties	-31,118	-11,584
Other	-35,096	-18,145
Services and other goods	-201,024	-121,811
Transport	-49,223	-32,295
Energy	-53,652	-31,919
Maintenance + IT	-29,275	-16,264
Rent (forklifts, hardware, buildings, …)	-21,976	-10,185
Interim wages	-22,786	-12,755
Other	-24,110	-18,393
Personnel costs	-111,421	-58,253
Depreciation and (reversal of (-)) impairment losses on assets	-33,651	-19,294
Depreciation	-31,753	-18,912
Impairment losses on assets	-1,898	-382
Write-downs and provisions	-2,234	451
Write-down of inventories	-928	586
Write-down of trade debtors	-856	-200
Provisions	-450	65
Other operating charges	-6,773	-2,940
Total	-855,746	-466,644

As already indicated above, when comparing the operating costs it must also be noted that two acquisitions took place in the past financial year: the costs of the CECAB Activity are included in the figures for 7 months and the costs of Scana Noliko Group are included for 9 months. In practice, these factors make an accurate, objective comparison of the operating costs more difficult.

During the prolonged financial year ending as per 31 March 2012, €60.7 million of fresh vegetables (2010: €43.0 million) and €99.8 million of fresh potatoes were purchased (2010: €85.0 million). The canning division takes total purchases of fresh vegetables for its account of €16.9 million during the financial year 2011/2012. If the 15 months of the 2011/2012 financial year are compared with the same period last year (15 months in 2010/2011), an increase of €14.2 million is seen (2010/2011: €46.5 million) in purchases of fresh vegetables in the deep-frozen vegetable division, which is explained by a higher activity in the vegetable division compared to the previous year. If the same comparison is made within the potato division, these purchases fall by €20.8 million relative to the same period last year (2010/2011: €120.6 million). The large decrease of the purchases of potatoes in the potato division is due to the strongly decreased raw material prices of potatoes in accounting period 2011/2012 compared to the previous period.

The purchases of deep-frozen goods from external parties rose in the financial year 2011/2012 by €44.7 million compared to the previous financial year, but they rose by €28.6 million if compared with a comparable period of 15 months (2010/2011). The substantial increase in these purchases is also explained by the higher activity within the vegetable division.

The purchases from the CECAB Group for an amount of €30.2 million within the financial year include the purchases of goods by the CECAB Activity. The CECAB Activity made total purchases of goods worth €30.2 million for the financial year ending as at 31 March 2012 and with an inclusion in consolidation of 7 months.

The purchases of fresh fruit for an amount of €5.0 million in the financial year 2011/2012 are a consequence of the inclusion in consolidation of the canning division and represent a period of 9 months.

Energy costs make up 26.7% of the heading 'services and other goods' and increase by €21.7 million compared to prior year. The canning division takes an amount of €4.4 million for its account (9 months´ contribution) and the CECAB Activity a total amount of €5.8 million (7 months´ contribution). The energy costs rise by €3.5 million if the previous period is included on a comparable basis of 15 months (2010/2011: €39.9 million) and if the canning division and CECAB Activity are ignored.

Transport costs total €49.2 million per 31 March 2012. Of this amount, €20.9 million can be allocated to the deep-frozen vegetable division and €22.8 million to the potato division and €5.6 million to the canning division. The transport costs rise by €1.6 million if the previous period is included on a comparable basis of 15 months (2010/2011: €39.8 million) and if the canning division and the CE-CAB Activity are ignored. This increase is on the one hand due to the increase of sales and on the other hand due to the increasing volume of flows of goods between group companies following a growing number of sites within the deep-frozen vegetable division.

The personnel costs amount to €111.4 million and rose by €53.2 million compared to the previous financial year. The deep-frozen vegetable division represents €51.4 million of the personnel costs, the potato division an amount of €38.1 million, and the canning division €21.9 million (9 months). The CECAB Activity, with a 7-month contribution, accounts for an amount of €13.2 million of the consolidated personnel costs as at 31 March 2012.

The heading 'write-downs and provisions' contains both in 2011/2012 and 2010 a number of non-recurring events. For a detailed discussion the reader is referred to note "5.4. Operating result (EBIT)".

The heading 'other operating charges' mainly contains losses on disposal of fixed assets, property tax and other operating taxes (non-income related taxes).

5.4 OPERATING RESULT (EBIT)

The operating profit from continuing activities amounts to €3.3 million per 31 March 2012 (15 months), versus €7.3 million per 31 December 2010 (12 months). We refer to the consolidated annual report of the Board of Directors for a more detailed discussion of the operating profit.

Operating result, including effect of non-recurring events

Operating result (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)

Operating result (EBIT)	3,349	7,323

Effect of non-recurring events

Non-recurring costs and income (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)
Operating result before non-recurring costs and income (REBIT)	20,023	6,436

Non-recurring costs	-17,963	-1,887
Impact acquisition accounting on inventory valuation Scana Noliko Group	-6,841
Impact acquisition accounting on inventory valuation CECAB Activity	-2,914
Restructuring costs King's Lynn site	-2,303
Impairment loss on disposal of machinery in Belgium	-1,626
Costs related to closing of site in Bourne	-960
Costs related to the acquisition of Scana Noliko Group	-829
Costs related to the acquisition of CECAB Activity	-606	-402
Provision for claim with respect to the Pinguin Aquitaine SAS subsidies	-463
Provision for claim relating to clearing and repair costs when the rented site in Bourne was vacated	-348
Costs related to closing of site in Easton	-289	-211
Claim related to a tax issue	-231
Provision for claim relating to clearing and repair costs when the rented site in Grimsby was vacated	-116
Provision for compensation for damages related to cleaning and repair works on the property and water-purification installation of third parties at Ychoux	-26	-300
Costs related to the relocation on the site at King's Lynn (including impairment losses on tangible fixed assets)		-732
Others	-411	-241
Non-recurring income	1,289	2,774
Refund of property tax over the accounting period 2002-2006	1,032
Gain on disposal of tangible fixed assets	257
Signing fee related to the green energy project in Belgium		150
Compensation for the vacation of part of the site at King's Lynn		2,624
Net non-recurring costs (-) / income	-16,674	887
Operating result (EBIT)	3,349	7,323

The one-off expenses included in the operating result at 31 March 2012 in an amount of €18.0 million relate on the one hand to the deep-frozen vegetable division (€10.3 million) and on the other hand to the canning division (€7.7 million).

Within the deep-frozen vegetable division the one-of expenses related to the British subsidiaries amount to €-4.6 million. These mainly include a restructuring cost of €-2.3 million for the site in King's Lynn, €-1.2 million costs related to the closure of the sites in Bourne and Easton and a number of provisions for the sites in Bourne and Grimsby in an amount of €-0.5 million. The one-off elements within the Belgian companies mainly relate to an impairment loss which has been booked on parts of disposed machinery in an amount of €-1.6 million. In the French subsidiary Pinguin Aquitaine S.A.S. a one-off provision has been recorded in an amount of €-0.5 million relating to a dispute over rightly or wrongly received subsidies.

The results of the deep-frozen vegetable division are influenced as well by one-of expenses within the CECAB Activity in an amount of €-3.5 million. Following the application of IFRS 3 at the acquisition of the CECAB Activity, the acquired stock needs to be valued at fair value less costs to sell, which means no margin is realized on the sale of the acquired stock. This negative effect on the EBITDA amounted to €-2.9 million. The one-off expenses are influenced as well in a negative way by the acquisition costs of the CECAB Activity in an amount of €-0.6 million.

The one-off expenses included in the canning division amount to €-7.7 million and include as well mainly the application of IFRS 3 on the stock that has been acquired with a negative effect on the result of €-6.8 million. The one-off expenses are influenced as well in a negative way by the acquisition costs of Scana Noliko Group in an amount of €-0.8 million.

The one-off profits included in the operating result amount to €1.3 million and mainly relate to a positive one-off refund of property tax within the potato division over the accounting period 2002 till 2006 in an amount of €1.0 million.

The non-recurring costs included in the operating profit for the year to 31 December 2010 relate on the one hand to the booking of additional costs in an amount of €0.2 million when the rented site in Easton (United Kingdom) was vacated. In addition, in the United Kingdom also a number of works have been performed in order to make possible the vacation of part of the site at King's Lynn (€0.4 million). Following this removal, an impairment loss on fixed assets has been booked in an amount of €0.4 million. In Pinguin Aquitaine SAS an additional provision has been recorded for the claim received related to cleaning and repair works on the property and water-purification installation of third parties. In the Belgian deepfrozen vegetable division, the operating result has been negatively influenced by non-recurring acquisition costs related to the CECAB Activity, which is part of the Group as from 1 May 2011 onwards. The heading 'others' includes costs that are mainly related to a fire on the site at King's Lynn and the evacuation of a number of cold stores because of danger of collapse on the site at King's Lynn.

The non-recurring income items included in the operating result for the year to 31 December 2010 relate to a compensation that the Group has received for the vacation of part of the site at King's Lynn for the construction of a supermarket and on the other hand a signing fee related to a green energy project in Belgium.

The 2010 financial year includes a net non-recurring income of €0.9 million. For the accounting period ending as per 31 March 2012 this figure is a net non-recurring cost of €16.7 million (difference of €-17.6 million).

5.5 FINANCIAL INCOME AND EXPENSES

The financial income and expenses of the Group can be broken down as follows:

Financial income and expenses (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)
FINAN CIAL INCOME	2,156	2,708
Operating financial income
- Interest income on loans granted	185	27
- Other operating financial income	543	35
Non-operating financial income
- Valuation to fair value of derivatives	117	1,073
- (Un)realized exchange results and conver sion differences	1,311	1,573
FINAN CIAL EXPENSES	-26,804	-7,388
Operating financial expenses
- Interest charges on interest-bearing liabilities	-16,127	-5,675
- Interest on leasing	-110	-103
Non-operating financial expenses
- (Un)realized exchange results and transla tion differences	-1,452	-52
- Valuation to fair value of derivatives	-5,475
- Other	-3,640	-1,558
FINAN CIAL RESULT	-24,647	-4,680

The financial result in the past financial year (15 months) decreased significantly compared to previous financial year (12 months). This decrease by €20.0 million is the combined effect of higher interest charges, a negative change in the fair value of financial instruments (IRS) and a number of one-off or non-operating financial charges following the acquisitions and the refinancing operation following the acquisition of the CECAB Activity and Scana Noliko Group and the refinancing operation.

Net interest charges for the period of 15 months ending as per 31 March 2012 increase by €10.3 million compared to previous accounting year (€-5.8 million as per 31 December 2010 compared to €-16.1 million as per 31 March 2012). This is mainly due to the increase of the drawn financing for the acquisition of Scana Noliko Group, the bridge financing preceding the €44.0 million capital increase and the financing costs for the increased working capital following the acquisition of the CECAB Activity. The interest charges as a result of the financing of Scana Noliko Group are primarily included in the Belgian parent company. The net interest charges also include non-recurring interest costs for an amount of €0.5 million.

The non-operating financial result for the period ending as per 31 March 2012 decreased by €10.2 million compared to the same period of previous accounting year (€1.0 million per 31 December 2010 compared to €-9.1 million per 31 March 2012). This decrease is mainly the result of a decrease in fair value (marked-to-market value) of financial instruments in an amount of €-5.4 million per 31 March 2012 compared to a positive impact of €1.1 million as per 31 December 2010. These concern the interest rate swaps (IRS) that were concluded for the adjusted club deal financing and include hedges against a possible increase in interest rates. The lowered Euribor had a negative impact on the valuation of the interest-hedging instruments. The non-operating profit is also influenced by a net exchange rate loss of €-0.1 million as at 31 March 2012 vis-à-vis a net exchange rate gain of €1.5 million as at 31 December 2010, primarily caused by the higher valuation of the British pound in the financial year 2011-2012.

The other financial expenses of €-3.6 million consist on the one hand of bank charges and the operating costs related to the invoice discounting facility in the Belgian deep-frozen vegetable division and potato division and in the United Kingdom. On the other hand this category also includes the costs of the club deal financing which are taken into the income statement over the course of the financing term (€0.5 million per 31 March 2012). This decrease is also the consequence of the immediate inclusion in the result (nonrecurrent effect) under IFRS of the remaining capitalised costs with regard to the existing club deal financing of 8 January 2008 (€-1.3 million per 31 March 2012). Finally, a waiver fee was included in the other financial costs for an amount of €0.3 million as at 31 March 2012. Taking into account the non-recurrent elements, the normalised other financial costs amount to €2.1 million as at 31 March 2012.

We refer to note "7.3. Commitments" for a further explanation of the club deal financing.

5.6 INCOME TAXES

Tax charges recorded in the income statement (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)

- Current taxes for the year	-7,086	-1,688
- Adjustment to current taxes in respect of prior periods	1,554	-227
- Deferred taxes	12,776	2,027
TOTAL TAX CHARGE REPORTED IN THE INCOME STATEMENT	7,244	112
Relationship between tax charge and accounting profit (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)
Result before taxes (profit/loss (-))	-21,299	2,643
Theoretical tax rate	33.99%	33.99%
Tax expense (-)/income at the Belgian tax rate	7,239	-898
Effect of different tax rates in other countries	-928	403
Theoretical tax charge	6,311	-495
Average theoretical tax rate	29.63%	18.74%
Tax effect of:
- Non-deductible expenses	-873	-337
- Deduction of risk capital	1,697	1,135
- Current tax adjustments relating to prior periods	1,554	-227
- Movement of taxed reserves	212	81
- Non-recognised deferred tax assets on tax losses	-226	-27
- Utilization of deferred tax assets non previously recognized	8	162
- Recognition of deferred tax assets previously recognized	-745
- Other	-695	-180
Effective tax charge	7,244	112
Effective tax rate	-34.01%	-4.23%

For the reporting period ending on 31 December 2010, the tax rate used in the United Kingdom amounted to 27.0%. As from April 2011 onwards and for the reporting period which ended on 31 March 2012 a different tax rate of 26.0% is used. This change in tax rate had no significant impact on the calculation of the deferred tax liabilities in PinguinLutosa Foods UK Ltd..

For a detailed discussion the reader is referred to note "6.8. Deferred tax assets and deferred tax liabilities".

5.7 EARNINGS PER SHARE

net result by the weighted average number of shares outstanding during the year (total number of shares – own shares).

Earnings per share is calculated by dividing the Group's share in the

Earnings per share (in € per share)	31/03/2012 (15 months) Basic	31/03/2012 (15 months) Diluted 11
Weighted average number of ordinary shares (in numbers)	12,053,087	12,053,087
Dilution effect of warrants (in numbers: note 6.14)		2,400,000
Weighted average number of ordinary shares (in numbers)	12,053,087	12,684,666
Net profit (loss) attributable to ordinary shareholders (in thousands of €)	-13,763	-13,763
- Net profit (loss) from continuing operations	-13,763	-13,763
- Net profit (loss) from discontinuing operations
Earnings per share (in € per share)	-1.14	-1.14
- Earnings per share from continuing operations	-1.14	-1.14
- Earnings per share from discontinuing operations

Earnings per share (in € per share)	31/12/2010 (12 months) Basic	31/12/2010 (12 months) Diluted
Weighted average number of ordinary shares (in numbers)	10,863,984	10,863,984
Dilution effect of warrants (in numbers: note 6.14)
Weighted average number of ordinary shares (in numbers)	10,863,984	10,863,984
Net profit (loss) attributable to ordinary shareholders (in thousands of €)	2,813	2,813
- Net profit (loss) from continuing operations	2,813	2,813
- Net profit (loss) from discontinuing operations
Earnings per share (in € per share)	0.26	0.26
- Earnings per share from continuing operations	0.26	0.26
- Earnings per share from discontinuing operations

In the absence of warrants or option plans in 2010, there is no dilution effect in calculating earnings per share. When calculating the profit (loss) per share as at 31 March 2012, account was taken firstly of the creation of 4,888,889 new shares during the capital increase of 15 February 2012 and, secondly, 2,400,000 warrants that were allocated on 2 December 2011 to Gimv-XL (conversion ratio of 1 share per allocated warrant).

11 The diluted earnings per share equals the basic earnings per share following the anti-dilutive character of the war-rants cfr. IAS 33.41.

6. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

6.1 INTANGIBLE FIXED ASSETS

Software, brand name and customer base (in thousands of €)	31/03/2012 Software	31/03/2012 Commercial fund	31/03/2012 Brand name Lutosa	31/03/2012 Customer base Lutosa	31/03/2012 Customer base Scana Noliko	31/03/2012 TOTAL
ACQUISITION VALUE
BALAN CE AT THE END OF THE PRECEDING PERIOD	3,687	0	654	4,497	0	8,838
Additions	1,169					1,169
Acquisitions through business combinations	247	23			25,000	25,270
Changes in consolidation scope
Sales and disposals
Transfer from one heading to another
Translation differences
Other movements
BALAN CE AT THE END OF THE PERIOD	5,103	23	654	4,497	25,000	35,277
DEPRECIATIONS AND IMPAIRMENT LOSSES
BALAN CE AT THE END OF THE PRECEDING PERIOD	1,888	0	212	2,532	0	4,632
Depreciation	850		82	650	1,250	2,833
Impairment losses
Reversals
Withdrawals after sales and disposals
Transfer from one heading to another
Translation differences
Other movements
BALAN CE AT THE END OF THE PERIOD	2,738	0	294	3,182	1,250	7,464
NET CARRYING AMOUNT BEFORE INVE STMENT GRANT S	2,366	23	360	1,315	23,750	27,813
Net investment grants
NET CARRYING AMOUNT AT THE END OF THE PERIOD	2,366	23	360	1,315	23,750	27,813

Investments in intangible fixed assets consist primarily of the valuation of the brand and client relationships of the acquired potato division ("Lutosa Group") and the acquired canning division ("Scana Noliko Group") as well of software licences. The increase as per 31 March 2012 by €23.6 million is mainly explained by on the one hand the impact of the inclusion of the client relationships (€25.0 million) and the software (€0.2 million) of the acquired canning division of Scana Noliko Group and on the other hand the investments of €1.2 million (software, more precisely licences for SAP®), which are only partially compensated by the depreciation charges of the year (€2.8 million).

Software, brand name and customer base ((in thousands of €)	31/12/2010 Software	31/12/2010 Brand name Lutosa	31/12/2010 Customer base Lutosa	31/12/2010 TOTAL
ACQUISITION VALUE
BALAN CE AT THE END OF THE PRECEDING PERIOD	2,963	654	4,497	8,114
Additions	723			723
Acquisitions through business combinations
Changes in consolidation scope
Sales and disposals
Transfer from one heading to another
Translation differences	1			1
Other movements
BALAN CE AT THE END OF THE PERIOD	3,687	654	4,497	8,838
DEPRECIATIONS AND IMPAIRMENT LOSSES
BALAN CE AT THE END OF THE PRECEDING PERIOD	1,472	147	2,012	3,631
Depreciation	416	65	520	1,001
Impairment losses
Reversals
Withdrawals after sales and disposals
Transfer from one heading to another
Translation differences
Other movements
BALAN CE AT THE END OF THE PERIOD	1,888	212	2,532	4,632
NET CARRYING AMOUNT BEFORE INVE STMENT GRANT S	1,799	442	1,965	4,206
Net investment grants
NET CARRYING AMOUNT AT THE END OF THE PERIOD	1,799	442	1,965	4,206

6.2 GOODWILL

This note relates to the goodwill upon the consolidation of subsidiaries. The principal movements in goodwill are the following::

Goodwill (in thousands of €)	31/03/2012	31/12/2010
ACQUISITION VALUE

BALAN CE AT THE END OF THE PRECEDING PERIOD	52,832	52,773
Additions	8,924
Deconsolidations
Translation differences	34	59
Transfers
Elimination of goodwill on the purchase of non-controlling interests
Restatements
BALAN CE AT THE END OF THE PERIOD	61,790	52,832
IMPAIRMENT LOSSES
BALAN CE AT THE END OF THE PRECEDING PERIOD	0	0
Impairment losses: addition
Sales and disposals
Translation differences
BALAN CE AT THE END OF THE PERIOD	0	0
NET CARRYING AMOUNT AT THE END OF THE PRIOR PERIOD	52,832	52,773
NET CARRYING AMOUNT AT THE END OF THE PERIOD	61,790	52,832

The additional goodwill that is booked as an asset on the balance sheet at March 2012 is on the one hand related to the acquisition of Scana Noliko Group by €117.3 million and on the other hand the acquisition of the CECAB Activity for €5.7 million. The goodwill related to the acquisition of Scana Noliko Group amounts to €6.0 million. The goodwill related to the acquisition of the CECAB Activity amounts to €2.9 million. For further information we refer to note '2.4. Changes in consolidation scope'.

IAS 36 requires the carrying value of goodwill acquired in a business combination to be allocated in a reasonable and consistent basis to each cash flow generating unit or smallest group of cash flow generation units. The goodwill on a cash flow generating unit acquired over the course of the financial year is tested at the time of acquisition.

The Group tests the goodwill for impairment annually and at intervals when there are indications that the value of goodwill may have dropped.

Assumptions related to the impairment tests at 31 March 2012

The goodwill related to the acquisition of the potato division (Lutosa Group) in 2007 amounts to €51.6 million and is fully attributed to the potato segment. The realisable value of the cash flow generating unit is determined on the basis of the value in use. The 20 year cash flow forecasts are for the first year based on the financial budget of 2012/2013 which has been approved by management and the Board of Directors. The following 4 years up till accounting year 2016/2017 are based on an internally generated financial plan. The remaining 15 years have been extrapolated based on this internally generated financial plan for the accounting years 2013-2017. The value in use is based on cash flow forecasts over a period of 20 years and as well on a perpetuity of cash flows for 20 years with a growth rate of 1.5%. The EBITDA margin that is applied is equal to the EBITDA margin that is planned in the financial plan over the period 2013 till 2017. Cash flows are discounted at an after-tax discount rate of 8.1%. The results of this test have shown that the value in use exceeds the carrying value of the cash flow generating unit (the 'headroom') by €10.6 million. The major sensitivities for the impairment tests are the EBITDA margin and the discount rate. This 'headroom' would reduce to zero if as from the first year onwards the EBITDA margin which is applied in calculating the value in use were to fall by 45 base points or if the after-tax discount rate were to rise by 60 base points. Based on the above assumptions the Group has decided that no impairment losses need to be recorded at 31 March 2012 on the goodwill of the potato segment.

The goodwill related to the deep-frozen vegetable segment (on the one hand related to the acquisition of the CECAB Activity in 2011 (€ 2.9 million) and on the other hand the acquisition of the segment 'Christian Salvesen Foods' in 2007 (€1.2 million)). An impairment test has been made for the entire deep-frozen vegetable division. The 20-year cash flow forecasts for the deep-frozen vegetable division are for the first year based on the financial budget of 2012/2013 which has been approved by management and the Board of Directors. The following 19 years have been extrapolated based on this budget 2012/2013. The value in use is based on cash flow forecasts over a period of 20 years and as well on a perpetuity of cash flows for 20 years with a growth rate of 1.5%. The EBITDA margin that is applied is equal to the EBITDA margin that is planned for accounting year 2012/2013, taking into account a growing profitability over the coming years. This increase of the EBITDA margin over the coming years is fully allocated to the UK activities, as is described in the impairment test of the Salvesen activities. Cash flows are discounted at an after-tax discount rate of 8.1%. The results of this test have shown that the value in use exceeds the carrying value of the cash flow generating unit (the 'headroom') by €12.9 million. The major sensitivities for the impairment tests are the EBITDA margin and the discount rate. This 'headroom' would reduce to zero if as from the first year onwards the EBITDA margin which is applied in calculating the value in use were to fall by 110 base points or if the after-tax discount rate were to rise by 63 base points. Based on the above assumptions the Group has decided that no impairment losses need to be recorded at 31 March 2012 on the goodwill of the CECAB Activity as part of the deep-frozen vegetable segment.

The goodwill related to the acquisition of the canning division in 2011 amounts to €6.0 million and is fully attributed to the canning segment. The 20-year cash flow forecasts are for the first year based on the financial budget of 2012/2013 which has been approved by management and the Board of Directors. The following 4 years up till accounting year 2016/2017 are based on an internally generated financial plan. The remaining 15 years have been extrapolated based on this internally generated financial plan for the accounting years 2013-2017. The value in use is based on cash flow forecasts over a period of 20 years and as well on a perpetuity of cash flows for 20 years with a growth rate of 1.5%. Cash flows are discounted at an after-tax discount rate of 8.1%. The results of this test have shown that the value in use exceeds the carrying value of the cash flow generating unit (the 'headroom') by €49.2 million. The major sensitivities for the impairment tests are the EBITDA margin and the discount rate. This 'headroom' would reduce to zero if as from the first year onwards the EBITDA margin which is applied in calculating the value in use were to fall by 288 base points or if the after-tax discount rate were to rise by 208 base points. Based on the above assumptions the Group has decided that no impairment losses need to be recorded at 31 March 2012 on the goodwill of the canning segment.

Methodology related to the tests on impairment losses per 31 December 2010

The carrying amount of goodwill and related impairment losses have been allocated as follows:

The methodology is identical to the one discussed above.

Goodwill per cash generating unit

31/03/2012 Net carrying amount	31/12/2010 Net carrying amount
51,622	51,622
1,244	1,210
2,937
5,987
61,790	52,832

6.3 TANGIBLE FIXED ASSETS

The investments in tangible fixed assets amount to €35.3 million per 31 March 2012 and mainly consist of investments in 'land and buildings' (€3.5 million), in 'plant, machinery and equipment' (€29.6 million), in 'furniture and vehicles' (€0.8 million) and in 'other tangible fixed assets' (€1.4 million).

The investments in the heading 'land and buildings' (€3.5 million) relate primarily to the deep-frozen vegetable division in Belgium (€1.8 million), Pinguin Aquitaine SAS (€0.1 million) and the potato division (€1.6 million):

• In the accounting year 2011-2012 the deep-frozen vegetable division invested in the heading 'land and buildings' on the site in Westrozebeke (€1.8 million), mainly in a plant hall within the framework of the installation of a new spinach and beans line.
• In the accounting year 2011-2012 the potato division invested in the heading 'land and buildings' on the site in Leuzeen-Hainaut (€1.6 million), mainly in the investment project to purchase a receiving, sorting and storage building.

The investments in the heading 'plant, machinery and equipment' relate primarily to the deep-frozen vegetable division in Belgium (€12.8 million), Pinguin Aquitaine SAS (€0.7 million), PinguinLutosa Foods UK Ltd. (€9.7 million), the potato division (€3.6 million) and the canning division (€1.9 million):

• The major 'plant, machinery and equipment' investments at 31 March 2012 at PinguinLutosa NV (€12.3 million) relate to investments a new spinach and bean line (€8.6 million), the elaboration of the packing and storage activities following the vegetable project in Germany (€1.6 million) and the optimisation investments in existing production lines (€1.1 million). During the 2011-2012 financial year, Pinguin Langemark NV invested €0.5 million under 'plant, machinery and equipment', mainly in optimisation investments in the existing production lines (€0.3 million).

• The major investments at 31 March 2012 at PinguinLutosa Foods UK Ltd relate to a new processing line including freezer, compressors, blancher and sorter (€4.5 million), optimisation investments in weighers, bulk line and sorters in the packaging halls (€2.5 million) and other optimisation investments (€1.5 million) at the King's Lynn site.
• During the 2011-2012 financial year the potato division invested in the heading 'plant, machinery and equipment' at the Leuze-en-Hainaut site (€3.0 million), mainly in machines for receipt and sorting of potatoes (€1.0 million), the replacement of batteries in freezers (€0.3 million) and power cables of high voltage lines (€0.3 million), an oxygen reduction system (€0.2 million) and various optimisation investments in packaging machines (€0.3 million), a specialty line (€0.1 million) and the laboratories (€0.1 million). In addition, the potato division invested in 'plant, machinery and equipment' at the site at Sint-Eloois-Vijve for an amount of €0.6 million, mainly in a French fries oven (€0.2 million) and a degreasing installation (€0.2 million).
• During the 9 months that were included in the consolidation for the accounting year ending 31 March 2012 the canning division invested in the heading 'plant, machinery and equipment' at the Bree site (€1.4 million), mainly in optimization investments in the vegetables hall (€0.5 million), the packaging hall (€0.1 million), the convenience activities (€0.5 million) and fire protection (€0.3 million). In addition, the canning division invested in 'plant, machinery and equipment' at the site at Rijkevorsel for an amount of €0.4 million, mainly in cherry stoners (€0.2 million) and a pasteurisation tunnel (€0.2 million).

The investments in 'other tangible fixed assets' (€1.4 million) relate primarily to the potato division (€0.8 million) and the canning division (€0.6 million):

• During the 2011-2012 financial year the potato division invested in the heading 'other tangible fixed assets' at the Leuzeen-Hainaut site (€0.7 million), mainly in the replacement of walls and roofs (€0.5 million). In addition, the potato division invested at the site at Sint-Eloois-Vijve for an amount of €0.1million in various other tangible fixed assets.
• During the 9 months that were included in the consolidation for the accounting year ending as per 31 March 2012 the canning division invested in the heading 'other tangible fixed assets' at the Bree site (€0.6 million), mainly in various renovation activities on walls and roofs (€0.4 million) and the elaboration of loading docks (€0.1 million).

The increase of the heading 'acquisition through business combinations' by €79.8 million is mainly related to the acquisition of Scana Noliko Group in Belgium (see note '2.4. Changes in consolidation scope).

The heading 'disposals' (€-30.0 million) is on the one hand related to the sale and rent-back operation of the real estate of Scana Noliko Group (€-27.8 million) and includes on the other hand mainly the disposals of a packing hall infeedl system on the site in King's Lynn (€-1.2 million) and various disposals following the ceasing of activities on the site in Bourne (€-0.7 million) in the United Kingdom.

The sale and rent-back operation of the real estate of Scana Noliko Group was structured as follows:

• On 19 July 2011, Food Invest International NV and De Binnenakkers NV (a company controlled by Scana Noliko Real Estate NV) together acquired all of the shares of Scana Noliko Real Estate NV (company that includes the land and buildings located on the site in Bree) in exchange for the payment of an overall acquisition price of €27.5 million. As a result of the acquisition of the shares of Scana Noliko Real Estate NV, Scana Noliko NV and Scana Noliko Real Estate NV agreed to change the conditions and terms of the existing triple net lease of 16 December 2010 on the following points: (i) the term is extended until 1 July 2026, (ii) the total rent is set at €3.0 million, increased by the reservation rent of €0.2 million, and (iii) the right of first refusal in favour of Scana Noliko NV is eliminated. All other conditions and terms remain in full effect.
• At the end of December 2011, Food Invest International NV acquired all real properties in Rijkevorsel, property of Scana Noliko Rijkevorsel NV, in exchange for the payment of a purchase price of €2.5 million. After the execution of the deed of purchase for the land and buildings on the site in Rijkevorsel, De Binnenakkers NV once again rented out this immovable property as of 22 November 2011 to Scana Noliko Rijkevorsel NV via a triple net lease for a period of fifteen years and for a nominal annual rent of €0.3 million, to be increased by the health index plus the costs.

In the accounting year 2011-2012, no financing costs were attributed directly to the acquisition, construction or production of an eligible asset and activated in accordance with IAS 23 as part of the cost price of that asset.

Tangible fixed assets at 31 March 2012 (in thousands of €)	Land and buildings	Plant, machinery and equip ment	Furniture and vehicles	Leasing	Assets under construction	Other	31/03/2012
ACQUISITION VALUE
BALAN CE AT THE END OF THE PRECEDING PERIOD	36,137	157,049	4,602	2,775	0	1,223	201,786
Additions	1,925	26,513	795		4,624	1,410	35,267
Acquisitions through business combinations	27,812	49,919	1,337		599	172	79,839
Sales and disposals	-27,844	-4,470	-313	-306			-32,933
Reclassification as assets held for sale
Transfers from one heading to another	1,577	3,488		128	-5,223	30
Translation differences		889		5		-1	893
Other
BALAN CE AT THE END OF THE PERIOD	39,607	233,388	6,421	2,602	0	2,834	284,852
DEPRECIATIONS AND IMPAIRMENT LOSSES
BALAN CE AT THE END OF THE PRECEDING PERIOD	9,492	59,270	2,023	-1,264	0	170	69,691
Depreciation and reversal of depreciation (-)	2,298	24,430	1,331	604		183	28,846
Impairment losses		1,914					1,914
Reversal after sales and disposals	-98	-2,293	-248	-293			-2,932
Reclassification as assets held for sale
Transfers from one heading to another		-127		127
Translation differences		494	3	3			500
Other
BALAN CE AT THE END OF THE PERIOD	11,692	83,688	3,109	-823	0	353	98,019
NET CARRYING AMOUNT BEFORE INVE ST MENT GRANT S AND RECLASS LEA SING	27,915	149,700	3,312	3,425	0	2,481	186,833
Net investment grants	-363	-735	-1				-1,099
Reclass leasing	2,311	1,066	48	-3,425
NET CARRYING AMOUNT AT THE END OF THE PERIOD (31 MARCH 2012)	29,863	150,031	3,359	0	0	2,481	185,734

Tangible fixed assets at 31 December 2010 (in thousands of €)	TLand and buildings	Plant, machinery and equipment	Furniture and vehicles	Leasing	Assets under construction	Other	31/12/2010
ACQUISITION VALUE
BALAN CE AT THE END OF THE PRECEDING PERIOD	35,607	142,735	3,862	2,793	250	1,201	186,448
Additions	530	13,191	785			21	14,527
Acquisitions through business combinations
Sales and disposals		-481	-56	-43			-580
Reclassification as assets held for sale
Transfers from one heading to another		250			-250
Translation differences		1,371	11	8		1	1,391
Other		-17		17
BALAN CE AT THE END OF THE PERIOD	36,137	157,049	4,602	2,775	0	1,223	201,786
DEPRECIATIONS AND IMPAIRMENT LOSSES
BALAN CE AT THE END OF THE PRECEDING PERIOD	7,786	43,074	1,406	-1,769	0	90	50,587
Depreciation and reversal of depreciation (-)	1,706	15,114	665	526		80	18,091
Impairment losses		382					382
Reversal after sales and disposals		-73	-52	-28			-153
Reclassification as assets held for sale
Transfers from one heading to another
Translation differences		777	4	3			784
Other		-4		4
BALAN CE AT THE END OF THE PERIOD	9,492	59,270	2,023	-1,264	0	170	69,691
NET CARRYING AMOUNT BEFORE INVE ST MENT GRANT S AND RECLASS LEA SING	26,645	97,779	2,579	4,039	0	1,053	132,095
Net investment grants	-386	-586	-3				-975
Reclass leasing	2,530	1,379	130	-4,039
NET CARRYING AMOUNT AT THE END OF THE PERIOD (31 DECEMBE R 2010)	28,789	98,572	2,706	0	0	1,053	131,120

In accordance with IAS 16, estimates with regard to residual value, useful life and depreciation methods are reviewed annually and any significant changes in estimates have to be notified. As such, the Group tested the useful life of the tangible fixed assets for underand overvaluation. The review did not reveal any need to adapt useful lives for the present period, but these will be reviewed annually and will be kept up-to-date.

At 31 March 2012 the Group's fixed assets were encumbered as follows:

• Subscription on mortgages: €2.0 million (31 December 2010: €2.0 million)
• Mortgage mandates: €18.0 million (31 December 2010: €18.0 million)

6.4 OTHER NON-CURRENT FINANCIAL ASSE

(in thousands of €)	31/03/2012	31/12/2010
ACQUISITION VALUE

BALAN CE AT THE END OF THE PRECE DING PERIOD	380	380
Additions
Acquisitions through business combi nations	3,350
Disposals and closures
Translation differences
Transfers
Changes in the consolidation method
BALAN CE AT THE END OF THE PERIOD	3,730	380
IMPAIRMENT LOSSES
BALAN CE AT THE END OF THE PRECE DING PERIOD	-380	-380
Impairment losses: addition
Impairment losses: reversal
Translation differences
Transfers
Changes in the consolidation method
BALAN CE AT THE END OF THE PERIOD	-380	-380
NET CARRYING AMOUNT AT THE END OF THE PRIOR PERIOD	0	0
NET CARRYING AMOUNT AT THE END

OF THE PERIOD 3,350 ⁰

This heading covers all unconsolidated investments. In addition, these are investments in unlisted entities and these investments are not significant in the context of the consolidated Group. As no reliable estimate can be made of the fair value of the other participating interests, financial assets for which no active market exists are valued at cost less any impairments.

Following the acquisition of the CECAB Activity on 1 September 2011, PinguinLutosa additionally acquired a number of non-controlling participations (each time 10%) in the CECAB-Entities that hold the production infrastructure and the land and buildings and rent these to PinguinLutosa (see note "2.4. Changes in consolidation scope", more specifically the companies D'aucy Polska Sp. Z.o.o., Bajaj Hutoipari Zrt, S.A.S. Vallée de la Lys and S.A.S. Moréac Surgelés. The total net book value of these participations amounts to €3.3 million per 31 March 2012.

6.5 INVENTORIES

Inventories
(in thousands of €)	31/03/2012	31/12/2010
Raw materials and consumables (deep-frozen vegetable segment)	9,359	5,810
Raw materials and consumables (potato segment)	7,704	9,838
Raw materials and consumables (canning segment)	10,370
Finished goods (deep-frozen vegetable segment)	116,288	79,455
Finished goods (potato segment)	28,858	17,462
Finished goods (canning segment)	64,257
Total inventories	236,836	112,566

Inventories are subject to a 'Net Realizable Value' (NRV) principle, in which the average inventory price for each vegetable sub-group is compared with the average outstanding contract price for the same subgroup. Write-downs are also recorded for obsolete, i.e. slow-moving, inventory. The write-down for slow-moving stock and the write-down resulting from the NRV test are recorded in the income statement as write-off and are as such included in the calcula-tion of EBITDA.

Inventories of the deep-frozen vegetable segment

The total stock of the vegetable division amounts to €74.8 million as at 31 March 2012, excluding the CECAB Activity, vis-à-vis €85.3 million as at 31 December 2010. Stocks of deep-frozen vegetables hit their lowest point in May-June (right before the production season) and reach their peak after the vegetable season, i.e. in December. At the British subsidiary the inventory volume at 31 March 2012 amounted to 57,106 tons, which is 20,300 tons less than at 31 December 2010. In Belgium the inventory volume amounted to 60,271 tons at 31 March 2012, which is in line compared to the situation at the end of prior accounting year (31 December 2010: 59,861 tons). In Belgium the seasonal effect is partially offset by a higher production compared to the previous financial year.

The stocks of the CECAB Activity include on 31 March 2012 the stock of the subsidiaries of PinguinLutosa for an amount of €21.4 million and, on the other hand, the booking of the repurchase obligation of €29.4 million of the stock from the CECAB Entity (see notes "2.4. Business combinations") which under IFRS must be fully included on the balance sheet of the subsidiaries of PinguinLutosa.

The total gross amount of inventory which is eligible for NRV write-down at 31 March 2012 was €23.1 million (31 December 2010: €16.9 million). The NRV provision at 31 March 2012 amounts to €2.3 million (31 December 2010: €2.2 million). The write-down for slow-moving stock amounted to €2.7 million at year-end (31 December 2010: €1.6 million).

Inventories of the potato segment

A specific characteristic of the potato sector is that fresh raw materials are also held in inventory, unlike in the deep-frozen vegetable sector. At 31 March 2012, the potato division had €3.4 million of fresh potatoes, additives and frying oils in stock (31 December 2010: €5.7 million). The decrease of this inventory value is on the one hand related to the lower inventory volume (-70.0%) of fresh potatoes and on the other hand the lower average inventory price (purchase price decrease of -35.1%) of potatoes.

The inventory of consumables consists mainly of foil and cardboard packaging in an amount of €4.2 million (31 December 2010: €4.2 million). According to IFRS, finished products are valued at 'full cost', giving an inventory value of €28.8 million (31 December 2010: €17.5 million). The increase in the inventory value of processed frozen potato products is explained by the higher volume per 31 March 2012 (57,450 tons compared with 29,235 tons at year- end 2010). These higher stock volumes as at 31 March 2012 compared to 31 December 2010 are nevertheless partly off-set by lower average stock values per kilo compared to the previous financial year. This effect is also the consequence of a significantly lower potato price as at 31 March.

In March 2012 a write-off of €0.3 million (31 December 2010: €0.2 million) was recorded for slow-moving inventory and the provision set up following the NRV test amounted to €0.7 million (31 December 2010: €0.1 million). The total gross value eligible for the NRV write-down as per 31 March 2012 equals the provision that was recorded for NRV, since it is related to products that are considered as second choice as from the accounting period 2011/2012 onwards.

Inventories of the canning segment

In the canned foods sector, the peak of the summer season falls in the months of July till September. During the winter months there are - as far as vegetables are concerned - major productions primarily in salsify, potatoes, legumes and market carrots. Overall, of course, the production of convenience products (sauces and pastas) is important, constituting approximately 25% of the total production of Scana Noliko Group, and it is distributed very uniformly over the year, so that seasonal dependency plays absolutely no role here.

The total contribution of the inventory of the canning division to the consolidated inventory as per 31 March 2012 amounts to €74.6 million, which represents an inventory volume of 106,305 tons. The write-down for slow-moving stock amounted to €0.2 million as per 31 March 2012 and the NRV provision amounts to €0.7 million.

6.6 LONG-TERM RECEIVABLES

Long-term receivables (in thousands of €)	31/03/2012	31/12/2010
Trade receivables	0	0
Trade receivables	99	99
Valuation allowances on trade receivables	-99	-99
Other receivables	705	143
Other receivables	748	186
Valuation allowances on other receivables	-43	-43
Total	705	143

Long-term receivables as per 31 March 2012 mainly consist of an amount of €0.6 million which includes a long term receivable towards the CECAB Group relating to a recovery of a defined benefit plan. It relates to a defined benefit plan which is included in the books of an ex-CECAB entity for which the CECAB Group has committed itself to take care of this plan. This receivable was not yet outstanding as per 31 December 2010 due to the fact that the CECAB Activity was only acquired in September 2011. In addition long-term receivables mainly consist of cash guarantees and bails. The outstanding amount of long-term receivables slightly increased compared to previous year and consists of a lot of minor amounts.

Valuation allowances on long-term receivables		31/03/2012	31/12/2010
(in thousands of €)	Trade receivables > 1 year	Other receivables > 1 year	Trade receivables > 1 year	Other receivables > 1 year
BALAN CE AT THE END OF THE PRECEDING PERIOD	-99	-43	-99	-43
Addition
Non-recoverable amounts
Reversal
Translation differences
Changes in the consolidation scope
BALAN CE AT THE END OF THE PERIOD	-99	-43	-99	-43

6.7 FIXED ASSETS HELD FOR SALE

Fixed assets held for sale (in thousands of €)	31/03/2012	31/12/2010
BALAN CE AT THE END OF THE PRECEDING PERIOD	0	0
Increase
Decrease
Translation differences
BALAN CE AT THE END OF THE PERIOD	0	0

IFRS requires fixed assets to be transferred to this heading when the Board of Directors has passed a resolution to sell assets and sufficient certainty exists that the assets in question will be effectively disposed off within a foreseeable period (generally 1 year). As per 31 March 2012 there were no fixed assets held for sale.

6.8 DEFERRED TAX ASSETS AND LIABILITIES

Deferred taxes (net carrying amount)		31/03/2012
(in thousands of €)	Deferred tax assets	Deferred tax liabilities	Deferred tax assets	Deferred tax liabilities
BALAN CE AT THE END OF THE PRECEDING PERIOD	0	27,429	0	29,406
Increase/decrease (-) via income statement	4,485	-8,291	-1,063	-3,100
Increase/decrease (-) via equity	11,306	11,151	12,234	12,234
First consolidation	1,011	26,309
Deconsolidations
Translation differences	49	-20	-5	55
Set-off of assets and liabilities	-16,376	-16,376	-11,166	-11,166
BALAN CE AT THE END OF THE PERIOD	475	40,202	0	27,429

Deferred taxes (allocation)	31/03/2012 31/12/2010
(in thousands of €)	Deferred tax assets	Deferred tax liabilities	Deferred tax assets	Deferred tax liabilities
Intangible and tangible fixed assets	8,224	50,107	9,361	35,767
Financial fixed assets (derivatives)	2,251		202
Bond loan
Inventories	218	5,278	162	1,762
Trade and other receivables	19			709
Provisions	385	23	100
Other financial debts		1,170		357
Fiscal losses	5,803		1,388
TOTAL DEFERRED TAXE S RELATE D TO TEM PORARY DIFFERENCES	16,900	56,578	11,213	38,595
Unrecognised deferred tax assets in respect
of deductible temporary differences	-49		-47
Set-off of assets and liabilities	-16,376	-16,376	-11,166	-11,166
NET DEFERRED TAX ASSETS / LIABILITIES	475	40,202	0	27,429

The changes in deferred tax liabilities (€12.8 million) and deferred tax assets (€0.5 million) originate mainly in:

• The IFRS corrections following the acquisition of Scana Noliko Group: deferred taxes were recorded in the opening balance sheet with regard to the fair value adjustment of the tangible and intangible fixed assets (€19.4 million) and the stock of finished goods (€3.3 million). This increase of the deferred tax liabilities related to intangible and tangible fixed assets and stocks was partially compensated throughout the accounting year (€3.8 million) as a result of the different treatment between local and IFRS accounting rules.
• This increase of the deferred tax liabilities was as well partially compensated by on the one hand additional deferred tax assets on tax losses carried forward in the deep-frozen vegetable division in Belgium and the United Kingdom in a total amount of €4.4 million per 31 March 2012 and on the other hand additional deferred tax assets were recorded (€2.0 million) as a result of the different treatment between local and IFRS accounting rules for the financial derivatives.

At 31 March 2012 the Group had not recognized any other deferred tax assets on deductible temporary differences on the basis of its budget forecasts.

No deferred tax assets are recognized on the tax losses carried forward as mentioned below. The following table sets out the deductible elements for which no deferred taxes have been recognized, but against which future taxable profits can be offset. The figures given are gross amounts.

Unrecognised deferred
tax assets (in thousands of €)	31/03/2012	31/12/2010
Deductible temporary differences	144	140
Losses carried forward and other recoverable tax amounts	15,579	10,631
Total	15,723	10,771

There is no limitation in time on the above-mentioned unrecognized tax assets.

6.9 TRADE AND OTHER RECEIVABLE

Trade and other receivables (in thousands of €)	31/03/2012	31/12/2010
Trade receivables	98,796	51,182
Trade receivables	99,242	51,384
Doubtful trade receivables	1,214	894
Valuation allowances on trade receivables	-1,660	-1,096
Other receivables	24,912	13,198
Other receivables	17,763	9,286
Valuation allowances on other receivables
Prepaid expenses and accrued income	7,149	3,912
Total	123,708	64,380

In total, short-term trade and other receivables have increased by €59.3 million. This considerable increase is mainly due to the acquisition of Scana Noliko Group (€30.3 million) and the CECAB Activity (€36.5 million).

The other receivables mainly relate to VAT recoverable.

Deferred charges mainly relate to insurance premiums, expenses related to maintenance contracts, rent, prepayments of IT costs and cliché costs for packaging

Aging analysis of trade receivables

An analysis is provided below, which shows the aging of the invoiced sales and of the credits extended to customers, including impairments on these amounts.

			31/03/2012			31/12/2010
Aging of trade receivables (in thousands of €)	Gross	Valuation allowances	Net	Gross	Valuation allowances	Net
Not overdue	78,927		78,927	39,825		39,825
Overdue less than 30 days	13,739		13,739	7,787		7,787
Overdue between 30 and 60 days	3,078		3,078	2,020	-4	2,016
Overdue more than 60 days	4,712	-1,660	3,052	2,646	-1,092	1,554
Net book value of trade receivables	100,456	-1,660	98,796	52,278	-1,096	51,182

At the end of March 2012 the valuation allowance on trade and other receivables amounted to €1.7 million (31 December 2010: €1.1 million). The valuation allowances on trade and other receivables are determined by the management: when amounts are more than 30 days overdue, then for the part that is not covered by a credit insurance an estimation is made with regard to the recoverability and in such an event (bankruptcy, etc.) a 50% or 100% provision is recorded. No valuation allowances are taken by the Group for overdue amounts where collection is still deemed probable, for example because outstanding amounts are recoverable from the tax authorities or because the Group holds sufficient security. The table below gives the movements of valuation allowances on trade and other receivables.

		31/03/2012		31/12/2010
Valuation allowances on receivables < 1 year (in thousands of €)	Trade receivables < 1 year	Other receivables < 1 year	Trade receivables < 1 year	Other receivables < 1 year
BALAN CE AT THE END OF THE PRECEDING PERIOD	-1,096	0	-927	0
Addition	-271		-276
Non-recoverable amounts			30
Reversal/use			77
Translation differences
Changes in the consolidation scope	-293
BALAN CE AT THE END OF THE PERIOD	-1,660	0	-1,096	0

Management believes that the fair value does not differ significantly from the carrying value.

Factoring

Factoring is used only with customers accepted for credit insurance by the factor and excludes intra-Group receivables.

The Group has been making use of factoring for the Belgian group companies since November 2007 and as from 2009 onwards, there was a partial off-balance sheet financing of the receivables of the British affiliate PinguinLutosa Foods UK Ltd..

In this way the Group immediately and definitively receives 90% of the value of sold receivables. The balance is received upon payment by the customer to the financial institution. This is a partial off-balance-sheet financing of the receivables of the Belgian and British group companies. This sale is with partial recourse. In this way no credit risk remains in respect of the sold receivables other than the credit risk on 10% of the value of the sold receivables.

The financial institution purchasing the receivable charges an interest cost for the period between the sale of the receivables and final payment by the customer. This margin is substantially lower than the prevailing margin on working capital credit lines with financial institutions. The late payment risk retained by the Group is limited in time. The continuing involvement of the Group in the transferred receivables is limited in this way to 10% of the value of the receivables and the maximum amount of the late payment risk.

The portion of the sold receivables (at 31 March 2012: €80.5 million - at 31 December 2010: €89.3 million) which remains on the balance sheet amounts to €33.3 million (31 December 2010: €43.5 million). This includes an amount for the maximum risk of late payment at 31 March 2012 of €0.5 million (at 31 December 2010: €0.6 million). The corresponding financial obligation amounts to €0.5 million (at 31 December 2010: €0.6 million).

The Group's exposure to credit, exchange rate and interest-rate risks is further described in greater detail in note "6.20. Risk Management Policy".

For the factoring there is no pledge mandate.

6.10 CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of liquid assets held by the Group in the form of cash and of deposit accounts with original maturities of no more than three months. The carrying value of these assets is approximately equivalent to their fair value.

Cash and cash equivalents (in thousands of €)	31/03/2012	31/12/2010
Banks	38,356	44,990
Short-term bank deposits		10,000
Total	38,356	54,990

6.11 ISSUED CAPITAL, SHARE PREMIUMS AND OTHER CAPITAL INSTRUMENTS

Management aims to provide a solid capital base. This capital base allows a large confidence of investors, suppliers and the market to establish and to have a solid base for the future development of the Group. Management aims to obtain financial stability in both the short and long-term. This strong policy guarantees a financially strong Group with solid financial ratios, which lead to a maximisation of the value of the share of the Group. There were no changes in capital management during 2011-2012. The Group is not exposed to external requirements with regard to capital.

Evolution of issued capital (in thousands of €)	31/03/2012	31/12/2010
BALAN CE AT THE END OF THE PRECEDING PERIOD	111,013	101,028
Capital increase of 28 October 2010: Private		10,000
Capital increase of 12 February 2012: Private	44,000
Incorporation of available reserves without issuance of new shares (15 February 2012)	448
Costs related to capital increase (IAS 32)	-651	-15
BALAN CE AT THE END OF THE PERIOD	154,810	111,013
Ordinary shares, issued and fully paid (number)	31/03/2012	31/12/2010
BALAN CE AT THE END OF THE PRECEDING PERIOD	11,570,631	10,713,733
Capital increase of 28 October 2010: Private		856,898
Capital increase of 15 February 2012: private	4,888,889
BALAN CE AT THE END OF THE PERIOD	16,459,520	11,570,631
Authorized capital (in thousands of €)	31/03/2012	31/12/2010
BALAN CE AT THE END OF THE PRECEDING PERIOD	50,000	60,000
Capital increase of 28 October 2010: Private		-10,000
Extraordinary General Meeting of 15 February 2012	107,500
BALAN CE AT THE END OF THE PERIOD	157,500	50,000

The Board of Directors is authorized, for a period of 5 years from the publication of the deed in the annexes to the Belgian Official Journal (2 March 2012), to increase the capital of the company in one or more instalments up to a maximum amount of €157.5 million.

Financial year 1 January 2011 – 31 March 2012

On 15 February 2012 the Board of Directors of PinguinLutosa decided to undertake a capital increase within the authorized capital and with suspension of the right of pre-emption, in favour of Gimv-XL Partners Comm. VA, Gimv NV, Adviesbeheer Gimv-XL NV, Food Invest International NV and Agri Investment Fund CVBA. The capital increase of €44.0 million took place, subject to subscription and full payment by contribution in cash, which was established on 15 February 2012.

In addition the capital was increased by means of incorporation of the available reserves of €0.4 million without issuance of new shares.

Prior to the above decision, the capital amounted to €111.0 million. The capital increase brought the capital to €154.8 million. The capital of the Group consisted at 31 March 2012 of 16,459,520 shares without nominal value. In accordance with IFRS standards, the costs of the capital increase (€0.7 million) were deducted from capital at 31 March 2012.

There were no other changes in issued capital during the financial year ending as per 31 March 2012.

Financial year 1 January 2010 – 31 December 2010

On 12 October 2010 the Board of Directors of PinguinLutosa decided to undertake a capital increase within the authorized capital and with suspension of the right of pre-emption, in favour of Union Fermière Morbihannaise SCA (UFM). The capital increase of €10.0 million took place, subject to subscription and full payment by contribution in cash, which was established on 28 October 2010.

Prior to the above decision, the capital amounted to €101.0 million. The capital increase brought the capital to €111.0 million. The capital of the Group consisted at 31 December 2010 of 11,570,631 shares without nominal value. In accordance with IFRS standards, the costs of the capital increase (€0.02 million) were deducted from capital at 31 December 2010.

There were no other changes in issued capital during 2010.

In accordance with IAS 32 the warrants of the subordinated loan of €36.0 million granted by Gimv-XL (see note "6.14. Stock options and warrant plans" and "6.18. Interest-bearing liabilities") are valued (€2.9 million) and presented as a component of equity under the heading 'share premiums and other capital instruments'.

6.12 OWN SHARES

				Number of treasury shares (b)
	Number of ordi nary shares	Number of shares issued (a)	Held by parent	Held by subsidiaries	Total number of shares outstan ding (a) - (b)
As at 1 January 2011	11,570,631	11,570,631	0	0	11,570,631
Capital increase	4,888,889	4,888,889			4,888,889
Purchase/sale of treasury shares
As at 31 March 2012	16,459,520	16,459,520	0	0	16,459,520

Financial year 1 January 2011 – 31 March 2012

The company did not trade any of its own shares in the financial year ending on 31 March 2012. It held none of its own shares at that date.

Financial year 1 January 2010 – 31 December 2010

The company did not trade any of its own shares in the financial year ending on 31 December 2010. It held none of its own shares at that date.

6.13 DIVIDENDS

No dividends were declared during the past three financial years. The directors propose that no dividends be declared in respect of the current year (see note "7.3. Commitments").

6.14 STOCK OPTION AND WARRANT PLANS

Option plans

There are currently no option plans outstanding for members of the Management Committee or senior management.

Warrant plans

In order to finance part of the acquisition price of Scana Noliko Group (see note '2.4. Changes in consolidation scope', on 19 July 2011 PinguinLutosa reached an agreement with Gimv-XL whereby a subordinate loan with warrants for €36.0 million was granted to PinguinLutosa as described:

•	Gimv-XL Partners Comm,VA:	€ 21,186,193.24

• Gimv NV: € 12,962,080.92
• Adviesbeheer Gimv-XL NV: € 1,851,725.84

On 2 December 2011 the General Assembly of PinguinLutosa has issued 2,400,000 warrants for a total amount of €30.6 million (85% of the amount of the subordinate loan) with an initial exercise price of €12.75 which are subscribed by Gimv-XL.

Gimv-XL subscribed the following number of warrants:

• Gimv-XL Partners Comm,VA: 1,412,413
• Gimv NV: 864,139
• Adviesbeheer Gimv-XL NV: 123,448

Each warrant initially entitles its holder to subscribe to one new share when paying the exercise price. However there are several anti-dilution mechanisms foreseen, whereby the issue price an the number of shares to which each warrant is entitled can be adjusted in case of a change of the par value of the shares following a split of shares, consolidation, requalification of categories of shares etc., in case of a merger, split, merger purchase of own shares, capital decrease diluting issuance of shares, etc..

The warrants have a term of five years as from the date of issuance and they can be exercised at any moment during this period. In case of a partial exercise at least 25% of the warrants need to be exercised together. Up until the 1st of January 2015 the payment of the exercise price of the warrants can only occur by Gimv-XL following a contribution in kind of the debt receivables that Gimv-XL has towards PinguinLutosa under the loan agreement.

Warrants	Date of issuance	Number	Exercise price (in €)	Outstanding at the end of the period
Issue Buy back - annulment Expiry	2/12/2011	2,400,000	12.75	2,400,000

The warrants expire on 02/12/2016. No warrants were exercised for the period ending 31 March 2012. Consequently there is a possible dilutive effect.

At this moment, in the Group there are no share option plans or warrant plans for employees, managers or members of the Management Committee.

6.15 NON-CONTROLLING INTERESTS

Non-controlling interests (in thousands of €)	31/03/2012	31/12/2010
BALAN CE AT THE END OF THE PRECE DING PERIOD	1,960	2,019
Increase/decrease (-) in ownership
Share of net profit of subsidiaries	-292	-58
Dividend pay-out
Capital increases
Changes in the consolidation scope	151
Translation differences
Other		-1
BALAN CE AT THE END OF THE PERIOD	1,819	1,960

As last year, the Group has a 99.99% shareholding in Pinguin Langemark NV, a 98.1% shareholding in PinguinLutosa América Latina Ltda, a 99.9% shareholding in PinguinLutosa Deutschland Gmbh, a 99.8% shareholding in M.A.C. Sarl, a 90.0% shareholding in Lutosa España SA and a 52.0% shareholding in Pinguin Aquitaine S.A.S..

Following the acquisition of Scana Noliko Group, as from 1 July 2011 the Group now has a 25.0% percentage in BND CVBA and has as from 1 September 2011 a percentage of 99.99% in D'aucy do Brazil Ltda following the acquisition of the CECAB Activity (see note "4.2. Business combinations").

Pinguin Aquitaine SAS reported a net loss of €-0.7 million for the period to 31 march 2012. 48.0% of this result has therefore been included under the heading 'non-controlling interests'. BND CVBA reported a net gain of €0.1 million for the period to 31 March 2012. 75.0% of this result has therefore been included under the heading 'non-controlling interests'.

6.16 PROVISIONS

Provisions (in thousands of €)	Provisions for pensions and similar rights	Provisions for other liabilities and charges	Total

BALAN CE AT THE BEG INNING OF THE PRECEDING PERIOD	57	1,252	1,309
Translation differences		44	44
Additional provisions		300	300
Reversal of unutilized provisions
Provisions utilized during the year	-31	-339	-370
Changes due to the passage of time and
change in the discount rate applied
BALAN CE AT THE END OF THE PRECEDING PERIOD	26	1,257	1,283
BALAN CE AT THE END OF THE PRECEDING PERIOD	26	1,257	1,283
Translation differences		16	16
Additional provisions	1,028	973	2,001
Reversal of unutilized provisions
Provisions utilized during the year	-8	-553	-561
Changes due to the passage of time and
change in the discount rate applied
BALAN CE AT THE END OF THE PERIOD	1,046	1,694	2,740

The provisions at 31 march 2012 increased by €1.5 million compared to the situation as per 31 December 2010.

At 31 March 2012 the provision for 'pensions and similar rights' relates to an agreed early retirement pension settlement in an amount of €0.4 million (per 31 December 2010: €0.03 million) and a defined benefit plan in an amount of €0.6 million, which is fully due to the acquired French divisions of the CECAB Activity. The increase in the provisions agreed for early retirement pension settlement is mainly due to the impact of the acquired canning division (€0.4 million).

The 'provisions for other liabilities and charges' amounted as per 31 March 2012 to €1.7 million (per 31 December 2010: €1.3 million) and increase by €0.4 million compared to prior year. This increase is the combined effect of on the one hand the booking in PinguinLutosa Foods UK Ltd. of a provision for a claim related to clearing and repair costs of the leased site at Bourne (€0.4 million) and Grimsby (€0.1 million) and a claim related to taxes (€0.03 million). On the other hand in Pinguin Aquitaine S.A.S. the provision of €0.6 million related to the pending dispute related to cleaning and repair work on a property and the water-purification installation was used and an additional provision of €0.5 million has been booked related to a subsidy matter (total provision of €0.6 million). Similar to last year, the 'provisions for other liabilities and charges' contain a provision for soil decontamination (€0.03 million), a provision related to a subsidy matter in Pinguin Aquitaine SAS (€0.1 million), a provision for a claim related to clearing and repair costs of the leased site at Easton (€0.4 million) and a provision for a claim relating to a tax issue in the United Kingdom (€0.2 million).

For further information concerning pending disputes we refer to note "7.2. Pending Disputes".

6.17 PENSION OBLIGATIONS

Defined contribution plans

The Group's pension plans provide for the payment of clearly determined amounts to pension institutions. These employer's contributions are charged against income in the year to which they relate. Since 1 January 2004 Belgian legislation has required a minimum return to be guaranteed on contributions paid into a defined contribution plan. Given that this minimum return is guaranteed essentially by the insurance institution, the pension cost is the same as the contributions due by the employer.

During the prolonged financial year ending as per 31 March 2012 (15 months) the Group made payments of €0.6 million under defined contribution schemes (2010 financial year (12 months): €0.3 million).

Defined benefit plans

There are no defined benefit plans within the Group, except within the acquired French subsidiaries of the CECAB Activity. As per 31 March 2012 a provision has been recorded for a total amount of €0.6 million.

6.18 INTEREST-BEARING LIABILITIES

This note provides information on the contractual conditions governing the Group's interest-bearing liabilities. It covers the financial debts. The present note gives an overview of the long-term liabilities and those maturing within the period. This note does not cover the MTM ('marked to market') values of the financial instruments.

The interest-bearing liabilities (short-term and long-term) increased from €121.2 million at 31 December 2010 to €227.5 million at 31 March 2012.

These movements are mainly explained by:

• The refinancing on 19 July 2011 of the debts of Scana Noliko Group and the existing debts of the club deal financing of PinguinLutosa following the financing of the acquisition of Scana Noliko Group (see note "7.3 Commitments"). In addition contractual repayments of the investment credits of the club deal financing have been done.
• Following the acquisition of Scana Noliko Group the subordinated loan of Scana Noliko Group towards LRM (Limburgse Reconversie Maatschappij) (€4.8 million) was converted into a subordinated loan towards De Mijnen NV that becomes due as per 31 December 2016.
• As a result of the financing of the acquisition of Scana Noliko Group a subordinated loan with warrants granted by Gimv-XL was recorded in order to finance the acquisition in an

amount of €36.0 million minus the warrants that were valued in accordance with IAS 32 (€2.9 million) that are presented as a component of equity ('share premiums and other capital instruments') (see notes '6.14. Option plans and warrants' and '6.11. Issued capital, share premiums and other capital instruments').

• an increase of the short-term portion of working capital financing. No significant new loans or leasings were concluded.

Financial debts due after one year fell from €56.0 million at 31 December 2010 to €41.0 million at 31 March 2012, while financial debts due within one year rose from €65.2 million at 31 December 2010 to €186.5 million at 31 March 2012.

The interest-bearing liabilities at 31 March 2012 can be broken down as follows:

Interest-bearing liabilities at 31 March 2012 (in thousands of €)	Due within 1 year	Due between 1 and 5 years	Due after 5 years	Total
Interest-bearing liabilities > 1 year		5,447	35,557	41,004
- Finance leases		22		22
- Bank loans (credit institutions)		195		195
- Subordinated bond loan		4,402	34,117	38,519
- Other financial debts		828	1,440	2,268
Interest-bearing liabilities < 1 year	186,523			186,523
- Finance leases	364			364
- Bank loans (credit institutions): debts > 1 year due within current year	133,772			133,772
- Bank loans (credit institutions)	50,447			50,447
- Subordinated bond loan
- Other financial debts	1,940			1,940
Total	186,523	5,447	35,557	227,527

Interest-bearing liabilities (in thousands of €)	Fixed	Variable	Total
Total	40,581	186,946	227,527
Interest-bearing liabilities (in thousands of €)	Secured	Non-secured	Total

Total 225,691 1,836 227,527

The interest-bearing liabilities at 31 December 2010 can be broken down as follows:

Interest-bearing liabilities at 31 December 2010 (in thousands of €)	Due within 1 year	Due between 1 and 5 years	Due after 5 years	Total
Interest-bearing liabilities > 1 year		54,326	1,705	56,031
- Finance leases		476		476
- Bank loans (credit institutions)		53,055		53,055
- Subordinated bond loan
- Other financial debts		795	1,705	2,500
Interest-bearing liabilities < 1 year	65,161			65,161
- Finance leases	629			629
- Bank loans (credit institutions): debts > 1 year due within current year	12,781			12,781
- Bank loans (credit institutions)	51,516			51,516
- Subordinated bond loan
- Other financial debts	235			235
Total	65,161	54,326	1,705	121,192

Interest-bearing

liabilities (in thousands of €)	Fixed	Variable	Total
Total	6,004	115,188	121,192
Interest-bearing liabilities (in thousands of €)	Secured	Secured	Total
Total	119,297	1,895	121,192

Subordinated bond loans

On 2 December 2011 2,400,000 warrants were created in connection with the issuing of a subordinated bond loan by Gimv-XL in an amount of €36.0 million, minus the warrants which have been valued in accordance with IAS 32 (€2.9 million) which were issued as a component of equity ('share premiums and other capital instruments'). For a further discussion of the warrants we refer to note '6.14. Stock option plans and warrant plans'. The warrants have a term of 5 years. Interest amounts to 6.8% of which 1.8% is capitalised. Interests are payable per quarter at the end of the tem. After the first recognition in the financial statements, the bond loan is treated at amortized cost using the effective interest method. The effective interest rate at 31 March 2012 was 8.4%. The €0.6 million increase in the subordinated bond loan with Gimv-XL as per 31 March 2012 is fully explained by the normal contractual repayments that are compensated by the capitalisation of the interests. No accelerated repayments have been made.

The subordinated loan of Scana Noliko Group towards De Mijnen NV becomes due at 31 December 2016. The capital repayment has been postponed until 31 December 2013, after that period the borrowed amount of €4.8 million needs to be repaid over a period of three years and payable per quarter as from 31 March 2014 onwards. The effective interest rate amounts to 8.0% per 31 March 2012.

Bank loans

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. Short-term bank loans rose from €64.3 million to €184.2 million at 31 March 2012.

The evolution of short-term bank loans recorded in the financial statements is the situation at a particular point in time. Short-term bank debt varies in function of inventories, the factoring of receivables via an invoice discounting facility, and available cash. In expectation of an agreement with the banks on the adjusted covenants in the light of the nature and the activities of the company and the recent acquisitions and related financing structure (see note '7.3. Commitments') it has been temporarily decided to record the complete club deal financing as short term debts in ac-cordance with IFRS. Due to this reclass (€121.3 million) the liquidity ratio is 94.8% instead of 133.2% in the case that the loans would be recorded as long term debts. The management expects to finalize such an agreement in the coming months. Pursuant to this agreement the bank debts will be partially recorded as long term and partially as short term debt. In addition, capital repayments are due on investment credit used (capex line from the club deal fi-nancing), leading to an increase in the heading 'credit institutions: debts > 1 year due within current year'.

All interest-bearing liabilities are expressed in euros or pounds sterling. The total interest-bearing liabilities in pounds sterling amounted at 31 March 2012 to £11.3 million (31 December 2010: £13.1 million). This decrease can be ex-plained by the normal repayment of the credits from the club deal financing and the financial leasing.

All interest-bearing liabilities are concluded at market conditions. The average interest rate for outstanding debts with financial institutions amounted at 31 March 2012 to 4.6% (at 31 December 2010: 4.1%).

For the loans outstanding at 31 December 2010 and 31 March 2012, no defaults or violations were established with regard to redemption payments and the provisions relating to principal and interest. The total amount of such loans with anomalies at 31 December 2010 and 31 March 2012 is nil. For this reason no regularisation of any defaults was required prior to the publication date of the approved annual accounts.

Supported by the banking syndicate, the reference shareholders of PinguinLutosa and the previous shareholders of Scana Noliko Group, PinguinLutosa has managed on 19 July 2011 to replace and extend the existing financing of PinguinLutosa as well as that of Scana Noliko Group. In total a credit facility of €250.0 million has been negotiated (club deal financing). We refer to note "7.3. Commitments" for further information on bank covenants and potential breaches on covenants and the rights and commitments not included in the balance sheet.

Finance leases

Finance leases	Minimum lease payments	Present value minimum lease payments
(in thousands of €)	31/03/2012	31/12/2010	31/03/2012	31/12/2010
Due within 1 year	371	608	364	629
Due between 1 and 5 years	23	638	22	476
Due after 5 years
Total	394	1,246	386	1,105

The largest interest-bearing liabilities are the finance lease agreements for the buildings, plant, machinery and equipment at Pinguin Aquitaine SAS and plant, machinery and equipment at PinguinLutosa Foods UK Ltd..

The average repayment term at Pinguin Aquitaine SAS is 6 months. The average effective interest rate at 31 March 2012 was 4.1% (31 December 2010: 4.2%). Total outstanding debts at Pinguin Aquitaine SAS amounted at 31 March 2012 to €0.2 million (31 December 2010: €0.6 million).

The average repayment term at PinguinLutosa Foods UK Ltd. is 12 months. The average effective interest rate at 31 March 2012 was 5.2% (31 December 2010: 5.8%). Total outstanding debts at PinguinLutosa Foods UK Ltd. amounted at 31 March 2012 to €0.2 million (31 December 2010: €0.4 million).

Other financial debts

The other financial debts consist per 31 March 2012 on the one hand of a loan of €0.1 million from the Agence d'Eau to Pinguin Aquitaine SAS (31 December 2010: €0.2 million), a deferred payment following the sale and rent back transaction relating to the property of the potato division ('Lutosa Group') in an amount of €2.4 million (31 December 2010: €2.6 million) and on the other hand the inclusion of a vendor loan towards Gimv-XL in order to finance the acquisitions in an amount of €1.8 million, repayable within one year. This increase was thus partially compensated by the fall in other financial debts due to the normal contractual repayments in Pinguin Aquitaine SAS and the reduction of the deferred payment due to the sale and rent back transaction.

6.19 TRADE AND OTHER PAYABLES (SHORT-TERM)

Short-term trade and other payables (in thousands of €)	31/03/2012	31/12/2010
Trade payables and accrued expenses	196,819	116,679
Tax payable	7,086	6,763
Remuneration and social security payable	18,975	6,876
Advances received	1	61
Other amounts payable	3,721	505
Deferred income	654	141
Total	227,256	131,025

In all, short-term trade and other payables as per 31 March 2012 rose by €96.2 million compared to previous financial year. This considerable increase is on the one hand largely attributable to the acquisition of Scana Noliko Group (€32.6 million) and the CECAB Activity (€91.0 million) but this increase was partially compensated by a decrease of the short-term and trade payables of the 'old' PinguinLutosa Group (€-27.4 million).

The increase in trade payables (€80.1 million) is fully explained by the acquisition of Scana Noliko Group (€25.1 million) and the CECAB Activity (€83.3 million). Trade payables decrease by €28.3 million in case one would let out Scana Noliko Group and the CE-

CAB Activity. This decline is attributable firstly to the seasonal effect for the vegetable division, so that each year a lower balance of trade liabilities is open on 31 March compared to 31 December. Secondly, the lower balance of outstanding trade debts is explained by the significantly lower potato price in March 2012 compared to December 2010, resulting in lower outstanding trade debts in the potato division.

The increase in remuneration and social security payable (€12.1 million) is caused as well mainly by the acquisition of Scana Noliko Group (€5.7 million) and the CECAB Activity (€3.9 million).

The other amounts payable and tax payables are influenced to a lesser extent by the acquisition of Scana Noliko Group and the CE-CAB Activity compared to prior year.

6.20 RISK MANAGEMENT POLICY

In exercising its business activity, the Group is exposed to market risks (currency, interest-rate and other risks) and to credit and liquidity risks. Derivatives are used to reduce the risk attached to exchange rate and interest-rate fluctuations. The derivatives used consist primarily of "over-the-counter" financial instruments, in particular option contracts and interest-rate swaps concluded with first-class banks. Not being listed on an active market, these derivatives are valued on the basis of a valuation model. It is Group policy not to undertake speculative transactions. 'Hedge accounting' under the strict application conditions of the IFRS is not applied at this moment.

This note places the users of the Group's financial statements in a position to judge the nature and extent of the abovementioned risks arising out of financial instruments, to which the Group is exposed at the reporting date. It also sets out the Group's objectives, principles and procedures for managing risk and the methods used for measuring this risk. Further quantitative information is provided throughout these consolidated financial statements.

• Market risk: foreign exchange risks

Like any company with non-euro sales, the Group runs the usual exchange rate risks. The Group is subject to fluctuations in the exchange rates that could lead to profit or loss in foreign exchange transactions. The British pound is the most important non-euro currency for the group. In addition, there are also purchase and sale contracts in USD. This is limited and the Group strives for a natural hedging. Through the acquisition of the CECAB Activity, the Polish zloty, the Hungarian forint and the Brazilian real are also currencies that are used.The Group concludes foreign exchange contracts that entitle it in each case to buy (forward purchases) or sell (forward sales) a certain quantity of foreign currency. The Group also concludes agreements giving it the right, but not the obligation, to sell (put option) a specified quantity of foreign currency (GBP) at an agreed price during a specified period or at a specified date. The option-holder pays the seller a premium as remuneration for the risk during the life of the agreement. Combinations of call and put options are used in order to keep hedging costs as low as possible. These agreements are concluded in order to minimize the Group's foreign exchange risk, mainly in respect of a significant portion of the activities undertaken with countries outside the Eurozone (the chief example being the UK).

• Market risk: interest-rate risk

For managing interest-rate risk the Group makes limited use of financial instruments with a view to reduce the impact of any interest-rate rises. These instruments match the way the company finances its credit needs with short-term fixed-rate borrowings. An interest-rate swap involves swapping interest-rate conditions during the period, or part of the period of a borrowing. An interestrate cap protects the holder of this financial instrument against interest rates rising above a predetermined level, whilst an interest-rate floor protects against interest rates falling below a predetermined level.

• Credit risk

Credit risk is the risk of a counterparty or its bank being unable to fulfil its contractual obligations. The Group reduces this risk by means of an active debtor policy including such steps as formulating payment conditions, formulating collection procedures, credit insurance and setting internal limits. We refer also to note "6.9. Trade and other receivables" for further information on the factoring agreements.

• Liquidity risk

Liquidity risk is the risk of having insufficient resources in order to fulfil direct obligations, which are settled in cash or other financial assets. The Group's approach to liquidity is to ensure, as far as possible, that sufficient liquidity is available at all times to meet liabilities as these fall due, under both normal and abnormal circumstances, without exposing itself to unacceptable losses or damaging the Group's reputation. We refer as well to note "7.3. Commitments" for further information on the bank covenants.

Within the Group the Board of Directors carries total responsibility for supervising the Group's risk management structure. Financial management describes and names the risks and is tasked with developing and controlling the Group's risk management policy. Financial management reports on a regular basis to the Board of Directors.

The first task of the Group's risk management policy is to identify the risks to which the Group is exposed. Analysis of these risks then leads to an appropriate structure of risk limitation and control. The risk management policy and risk management system are regularly reviewed to reflect changes in market conditions and in the Group's activities. The Group also seeks to develop a disciplined, constructive and controlled environment by means of training, standards and procedures, in such a way that every employee knows his role, obligations and responsibilities.

The Board of Directors assesses the application of the risk management policy and the prescribed procedures and reviews the appropriateness of the risk management structure in relation to the risks to which the Group is exposed.

A number of risks are managed with the help of derivatives. The Group limits itself here to forward contracts and interest-rate swaps (IRS).

1. Market risk

The market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will influence Group income or the value of its financial instruments. The objective is to control and manage this market risk within the limits of acceptable parameters, whilst optimizing the 'return on risk'.

The Group buys and sells derivatives in the normal course of business, and also uses financial instruments in order to manage the market risk. All these transactions are carried out under the guidelines set by the Audit Committee. The Group does not, however, use 'hedge accounting'.

In its application of IAS 39 "Financial instruments" the Group has classified the financial instruments used to cover its interest-rate risk as economic hedges that do not fulfil the requirements for 'hedge accounting'. They are therefore valued at fair value with changes in fair value, as a result of the effect of the interest-rate difference, recognized in the income statement.

1.a.1. Foreign exchange risk

The foreign exchange risk relates to possible variations in the value of financial instruments as a result of exchange rate fluctuations. The Group is exposed to exchange risks from the fact that a considerable portion of its activities (buying and selling) are undertaken outside the Eurozone, mainly in pounds sterling and US dollars. The derivatives are intended to hedge the Group's exposure to currency risks in GBP and the USD (see note "1.c. Foreign exchange risk and interest-rate risk: financial instruments (derivatives)").

Outstanding foreign currency receivables and liabilities at balance sheet date at Group level break down as follows:

Outstanding amounts in foreign

currencies exposed to foreign exchange risk (in thousands of €)	31/03/2012	31/12/2010
Amounts receivable
GBP (in € terms)	32,284	20,390
USD (in € terms)	2,101	1,318
Liabilities
GBP (in € terms)	907	2,991
USD (in € terms)	345	490

These amounts relate to both receivables and liabilities from/to third parties and to intra-Group receivables and liabilities which represent a foreign exchange risk at balance sheet date. In other words these amounts consist only of receivables and payables in a currency other than the functional currency of the entity holding them.

The receivables in GBP have increased due to an increase of the open position of PinguinLutosa NV with PinguinLutosa Foods UK Ltd..

The Group realizes a substantial portion of its sales outside the Eurozone, mainly in the United Kingdom.

Deep-frozen vegetable division

The sales of the deep-frozen vegetable division are directed primarily at the Eurozone (approx. 56% of 2011-2012 sales; approx. 51% of 2010 sales). In addition, the deep-frozen vegetable division realizes around 34% of its sales in the UK, whereas only 10% is exported to the rest of the world.

A portion of the working capital needs of PinguinLutosa Foods UK Ltd. are financed under the club deal financing in GBP by loans made directly to PinguinLutosa Foods UK Ltd.. The remaining needs are financed by the parent company. In the past the entire needs were financed by the parent company.

Potato division

The sales of the potato division are directed primarily at the Eurozone (approx. 60% of 2011-2012 sales; approx. 64% of 2010 sales). In addition, the potato division realizes around 14% of its sales in the UK, and another 26% is exported to the rest of the world. Given that prices in the UK are set in GBP and the receivables in GBP are converted into EUR, a reduction in value of the GBP negatively impacts net profit. The cash flows from on-going sales to the UK in GBP are partially hedged by forward contracts. The GBP is not systematically hedged, but rather on an ad hoc basis depending on contract size and market circumstances. Sales outside Europe (around 21%) are invoiced mainly in EUR and to a lesser extent in USD. These currencies are not systematically hedged, but rather on an ad hoc basis depending on contract size and market circumstances. The overall portion of sales undertaken outside the Eurozone can be expected to rise in the future.

Canning division

The sales of the canning division are directed primarily at the Eurozone (approx. 83% of July 2011-March 2012 sales). In addition, the canning division realizes around 9% of its sales in the UK, and another 8% is exported to the rest of the world. Given that prices in the UK are set in GBP, a reduction in value of the GBP negatively impacts net profit. The cash flows from on-going sales to the UK in GBP are fully hedged by forward contracts. Sales outside Europe are fully invoiced in EUR.

The impact of the pound sterling, Polish zloty and Hungarian forint on the Group's results is to be found at two levels: transaction risk and translation risk.

An additional impact is that of the sales offices that report in foreign currencies (Lutosa UK Ltd., Lutosa América Latina Ltda, PinguinLutosa Japan K.K., PinguinLutosa Foods Shanghai Ltd, Scana Noliko UK Ltd and D'aucy do Brazil Ltda). This risk is situated at the translation risk level.

a) Transaction risk with respect to outstanding receivables and liabilities

The receivables and liabilities in pound sterling, Polish zloty and Hungarian forint can, upon payment in euro, give rise to a realized gain or loss depending on whether the daily exchange rate at the time of receipt and payment differs from the exchange rate at the time the receivable or payable is recorded.

We point out that a transaction risk also affects outstanding receivables and liabilities in USD.

b) Translation risk in relation to the income statement

This translational risk relates mainly to the inclusion of the figures of PinguinLutosa Foods UK Ltd., PinguinLutosa Polska Sp.z.o.o. and PinguinLutosa Foods Hungary Kft., but also applies to the sales offices that report in foreign currencies (Lutosa UK Ltd., Lutosa América Latina Ltda, PinguinLutosa Japan K.K. and PinguinLutosa Foods Shanghai Ltd., Scana Noliko UK Ltd and D'aucy do Brazil Ltda) (see note "7.1. Subsidiaries").

The impact of the GBP exchange rate concerns primarily the recognition of the statement of financial position and the income statement of PinguinLutosa Foods UK Ltd, PinguinLutosa Polska Sp.z.o.o. and PinguinLutosa Foods Hungary Kft. The related functional currencies are the pound sterling, Polish zloty and Hungarian forint. This means that, in the case of a net profit of for example GBP 1,000 (over a certain period), an average rise/fall of the GBP against the euro of for example 10% (over the same period) will also increase/decrease the euro net profit by 10%.

c) Translation risk in relation to equity

In addition the exchange rate also affects the reserves and the value of the participating interest that PinguinLutosa NV holds in the capital of PinguinLutosa Foods UK Ltd., PinguinLutosa Polska Sp.z.o.o and PinguinLutosa Foods Hungary Kft. and the sales offices Lutosa UK Ltd,, Lutosa América Latina Ltda, PinguinLutosa Japan K.K., PinguinLutosa Foods Shanghai Ltd., Scana Noliko UK Ltd. and D'aucy do Brazil Ltda.. Under the consolidation rules, capital and reserves are converted at the historical exchange rate. Whenever the exchange rate changes, the difference between the closing rate at a particular date and the historical rate will be recorded as a translation difference under the heading "equity".

1.a.2. Foreign exchange sensitivity

A sensitivity percentage of 10% is taken in determining the foreign exchange risk, In reality the fluctuations, as in 2011-2012, can be greater than 10%, which can change the sensitivity proportionally.

March 2012 Closing rate 31	Average rate 2011-2012	Possible closing rate March 2012 31	Possible average rate 2011-2012	Possible exchange expressed in % rate volatility
0.83	0.86	0.75 - 0.92	0.77 - 0.95	10%
1.33	1.37	1.20 - 1.47	1.24 - 1.51	10%
4.18	4.14	3.76 - 4.59	3.73 - 4.55	10%
294.12	285.71	264.71 - 323.53	257.14 - 314.29	10%

2011-2012

			2010
1 € =	31 Decem-ber 2010 Closing rate	Average rate 2010	Possible closing rate 31 December 2010	Possible average rate 2010	Possible exchange expressed in % rate volatility
Pound sterling	0.86	0.86	0.77 – 0.94	0.77 – 0.94	10%
US dollar	1.33	1.32	1.19 – 1.46	1.19 – 1.46	10%

The sensitivity analysis is applied only to outstanding monetary business in foreign currencies. It covers both external loans and intra-Group loans and receivables in foreign currency, as well as trade receivables and liabilities, in so far as the foreign currency differs from the functional currency of the entity holding them.

a) Transaction risk with respect to outstanding receivables and payables

Based on the average volatility of the GBP and USD against the euro during the past financial year, we have made a reasonable estimate, as follows, of the effect of a potential variation of the GBP and USD exchange rates against the euro:

Foreign exchange sensitivity on outstanding receivables and payables (in thousands of €)	Net balance sheet position March 2012 per 31	euro compared to foreign currency on open position Impact 10 % increase of	euro compared to foreign currency on open position Impact 10 % decrease of	Net balance sheet position per 31 December 2010	euro compared to foreign currency on open position Impact 10 % increase of	euro compared to foreign currency on open position Impact 10 % decrease of
Pound sterling	31,377	-3,138	3,138	17,399	-1,740	1,740
US dollar	1,756	-176	176	828	-83	83

b) Translation risk in relation to income statement

As per 31 march 2012 17% of the Group's sales are realized by PinguinLutosa Foods UK Ltd. (at 31 December 2010: 24%), which operates in pounds sterling. These results are converted into the Group's functional currency, which is the euro. Based on an analysis of exchange rate developments over the past financial year, we have made a reasonable estimate of an effect of a potential variation in the GBP against the euro, and the same has been done for the Polish zloty and the Hungarian forint following the acquisition of the CECAB Activity:

• If the euro had risen/fallen by 10% against the GBP, and all other variables remaining constant, the net result would have been €0.9 million higher/lower at 31 March 2012 (at 31 December 2010: €0.4 million lower/higher),

c) Translation risk in relation to equity

If the euro had risen/fallen by 10% against the GBP, and all other variables remaining constant, the translation differences in equity would have been €2.1 million lower/higher at 31 March 2012 (at 31 December 2010: €1.7 million lower/higher).

The impact of exchange rate fluctuations in respect of PinguinLutosa Foods Hungary Kft., PinguinLutosa Polska Sp.z.o.o and the sales offices that report in foreign currencies (Lutosa UK Ltd., Lutosa América Latina Ltda, PinguinLutosa Japan K.K. and PinguinLutosa Foods Shanghai Ltd., Scana Noliko UK Ltd. and D'aucy do Brazil Ltda.) on the Group's shareholders' equity at 31 March 2012 is €0.4 million (at 31 December 2010: €0.03 million). This increase compared to previous year is mainly attributable to the impact of the business combination that occurred during the prolonged financial year (see note "2.4. Changes in consolidation scope").

1.b.1. Interest-rate risk

The Group has credit outstanding in GBP and euro. The distribution by currency is given below:

Financial liabilities		31/03/2012		31/12/2010
	In thousands of €	Interest rate	In thousands of €	Interest rate
Floating interest rate
EUR	180,164	2.96%	100,888	3.08%
GBP (in EUR terms)	13,374	2.62%	14,894	2.54%
Fixed interest rate
EUR	40,398	4.81%	5,557	4.64%
GBP (in EUR terms)	183	5.20%	447	5.77%
Total	234,119		121,786

At 31 March 2012, 82.7% of the outstanding financial debt of the Group was at variable interest rates (at 31 December 2010: 95.1%). The increase of the instruments with a fixed interest rate compared to prior period is mainly attributable to the inclusion of the bond loans (see note "6.18. Interest-bearing liabilities"). Under the club deal financing the Group has opted to finance itself mainly at floating interest rates (straight loans). To hedge against interest-rate changes, the Group proceeded to conclude a number of IRS contracts. These contracts hedge 67% of the acquisition financing.

1.b.2 Interest-rate risk: interest-rate sensitivity

Had interest rates in GBP (Libor) risen/fallen by 50 basis points, and with all other parameters remaining constant, this would have had a negative/positive impact on the financial results, for the credits with a floating interest rate, of €0.1 million for the period to 31 March 2012 (€0.1 million for the period to 31 December 2010).

Had interest rates in EUR (Euribor) risen/fallen by 50 basis points, and with all other parameters remaining constant, this would have had a negative/positive impact on the financial results, for the EUR credits with a floating interest rate, of €0.9 million for the period to 31 March 2012 (€0.5 million for the period to 31 December 2010).

Despite the Group's intention to reduce the level of indebtedness, and hence the sensitivity of net result to interest-rate fluctuations, and despite the hedging strategy on the basis of bank derivatives, it cannot be excluded that the Group's net result will in future be subject to interest-rate fluctuations.

1.b.3 Interest-rate risk: maturity of financial instruments

The table below gives an overview of the average effective interest rates and remaining terms at balance sheet date for the different types of financial instruments:

						31/03/2012
Remaining terms of financial instruments (in thousands of €)	Category of instru ments	Average effec tive interest rate %	Total carrying value	< 1 year	1- 5 year	> 5 year
Instruments with fixed interest rates			82,287	37,933	5,447	38,907
Other financial assets	FaAFS		3,350			3,350
Held-to-maturity investments	Htm
Cash and cash equivalents	L&R		38,356	38,356
Guaranteed bank loans	FLmaAC	5.28%	298	103	195
Financial lease obligations	n/a	4.84%	386	364	22
Unguaranteed bank facilities	FLmaAC
Liabilities to credit institutions	FLmaAC
Bond loans	FLmaAC	7.58%	38,519		4,402	34,117
Other guaranteed financial liabilities	FLmaAC	0,00%	71	22	49
Other non-guaranteed financial liabilities	FLmaAC	3.61%	1,307	-912	779	1,440

Instruments with variable interest rates			186,946	186,946
Guaranteed GBP bank loan	FLmaAC	4.74%	13,148	13,148
Guaranteed EUR bank loan	FLmaAC	3.89%	173,269	173,269
Other guaranteed loans	FLmaAC
Other unguaranteed loans	FLmaAC	0.98%	529	529

Category of instruments

L&R: Loans and receivables
FaHT: Financial asset Held for Trading
FaAFS: Available-For-Sale Financial assets
Htm: Held-to-maturity investments
FLmaAC: Financial Liabilities measured at amortised cost

FlHT: Financial Liabilities Held for Trading

162 PinguinLutosa financia L REPORT

Remaining terms of financial instruments (in thousands of €)	Category of instru ments	Average effec tive interest rate %	Total carrying value	< 1 year	1- 5 year	> 5 year
Instruments with fixed interest rates			60,995	55,307	3,983	1,705
Other financial assets	FaAFS
Held-to-maturity investments	Htm
Cash and cash equivalents	L&R		54,990	54,990
Guaranteed bank loans	FLmaAC	5.35%	3,460	100	3,360
Financial lease obligations	n/a	6.03%	1,105	629	476
Unguaranteed bank facilities	FLmaAC
Liabilities to credit institutions	FLmaAC
Other guaranteed financial liabilities	FLmaAC	0.00%	150	79	71
Other non-guaranteed financial liabilities	FLmaAC	3.02%	1,289	-492	76	1,705
Instruments with variable interest rates			115,188	64,845	50,343	0
Guaranteed GBP bank loan	FLmaAC	4.59%	14,556	7,598	6,958
Guaranteed EUR bank loan	FLmaAC	4.00%	100,026	56,641	43,385
Other guaranteed loans	FLmaAC
Other unguaranteed loans	FLmaAC	0.98%	606	606

Category of instruments

L&R: Loans and receivables

FaHT: Financial asset Held for Trading

FaAFS: Available-For-Sale Financial assets

Htm: Held-to-maturity investments

FLmaAC: Financial Liabilities measured at amortised cost

FlHT: Financial Liabilities Held for Trading

1.c. Foreign exchange risk and interest-rate risk: financial instruments (derivatives)

In its application of IAS 39 "Financial instruments" the Group has classified the financial instruments used to cover its interest-rate risk and foreign exchange rate risk as economic hedges that do not fulfil the requirements for 'hedge accounting'. They are therefore valued at fair value with changes in fair value, as a result of the effect of the interest-rate difference, recognized in the profit and loss account.

Foreign exchange risk

For hedging foreign exchange risks the Group works with forward contracts, whereby it seeks to hedge 50% to 75% of its monthly GBP income. There is no certainty that the Group's hedging strategy can sufficiently protect its operating results against the consequences of exchange rate fluctuations.

During the past year the company concluded new hedging contracts to protect it against a fall in the GBP and USD. The Group is covered as at 31 March 2012 via various instruments in a notional amount of €25.0 million (31 December 2010: €0.0 million).

31/12/2010

Interest-rate risk

The Group has used financial instruments to hedge the risks of unfavourable interest-rate fluctuations. 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. The use of variable interest-rate credits carries with it the risk of major changes in cash flows in case of rising interest rates.

To this end a number of Interest-Rate Swaps (IRS) and interest-rate caps with Knock-Outs have been concluded with a number of Belgian banks. In an interest-rate swap the Group commits to paying or receiving the difference between the interest amount at fixed and floating interest rates calculated on a nominal amount. This type of agreement allows the Group to absorb fluctuations due to changes in the market value of the fixed interest-rate debt. To limit the cost of these instruments, a number of Floor contracts with Knock-Ins have been concluded simultaneously.

To manage the interest-rate risk the Group is covered as at 31 March 2012 via various instruments in a notional amount of €198.4 million (31 December 2010: €34.9 million).

Nominal amounts per maturity date

The following table gives an overview of the outstanding derivatives on the basis of the nominal amounts per maturity date.

	31/03/2012
Outstanding derivatives: nominal amounts per maturity date (in thousands of €)	Due within 1 year	Due between 1 and 5 years	Due after 5 years	Due within 1 year	Due between 1 and 5 years	Due after 5 years
Foreign exchange risk
Term contracts	25,024
Options
Interest-rate risk
IRS	27,364	166,000		23,243	11,646
Caps		5,000
Total	52,388	171,000	0	23,243	11,646	0

The maximum hedging term for these instruments runs until July 2016.

The increase in notional hedging amounts and the number of instruments is explained by the repayment scheme of the renegotiated club deal financing as from July 2011 onwards. At the end of March 2012, the remaining term is thus between 1 and 5 years.

Fair value by type of derivative

The fair value of derivatives is based on the (available) market price. This information is provided by the Group's financial institutions with which the financial instruments have been concluded. Where the market price is not available, the fair value is estimated. The intrinsic or fair value of an option consists out of the intrinsic value and the time value. The fair value of the interest-rate swap is determined by discounting expected future cash flows using current market interest rates and yield curve over the remaining term of the instrument.

The open instruments at balance sheet date have a total fair value ('marked to market value') of €-6.5 million at 31 March 2012 (31 December 2010: €-0.6 million). The net result in the financial year ending on 31 March 2012 on the financial assets and liabilities valued at fair value is €-5.4 million (31 December 2010: €1.1 million).

164 PinguinLutosa financia L REPORT

Fair value by type of derivative		Assets	Liabilities		Net Position			Recorded in profit and loss accounts
(in thousands of €)	31/03/2012	31/12/2010	31/03/2012	31/12/2010	31/03/2012	31/12/2010	31/03/2012	31/12/2010
Foreign exchange risk
Term contracts	78		462		-384		-384
Options
Interest-rate risk
IRS			6,130	594	-6,130	-594	-4,974	1,073
Interest-rate caps
Net assets/liabilities	78	0	6,592	594	-6,514	-594	-5,358	1,073

Fair value hierarchy included in the statement of financial position

The table below analyses financial instruments of the Group initially measured at fair value, sorted by valuation method. The different levels have been defined as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices);
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Assets and liabilities at fair value				31/03/2012
(in thousands of €)	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit and loss
- derivatives		78		78
Total assets at fair value		78		78
Financial liabilities at fair value through profit and loss
- derivatives		6,592		6,592
Total liabilities at fair value		6,592		6,592

Assets and liabilities at fair value				31/12/2010
(in thousands of €)	Level 1	Level 2	Level 3	Total
Financial liabilities at fair value through profit and loss
- derivatives
Total assets at fair value
Financial liabilities at fair value through profit and loss
- derivatives		594		594
Total liabilities at fair value		594		594

During the past financial year, there were no transfers of financial assets or liabilities between levels 1 and 2.

1.d. Other market risks

Other market risks that are unrelated to risks in relation to financial instruments are determined by fluctuations in sales prices and weather conditions.

Sales prices are defined by changes in supply and demand. Demand is affected primarily by climate, increased internationalization of the market, and marketing campaigns. Supply is influenced mainly by availability of raw materials.

Changing weather conditions have an extremely large impact on the availability of vegetables and potatoes. Along with other elements like soil fatigue for certain crops, weather conditions force the PinguinLutosa Group to reduce as far as possible their dependence on the harvest in a particular region.

The deep-frozen vegetable division and the canning division work in principle with fixed annual contracts, where the purchase price per vegetable is fixed for the entire season before the vegetables are sown or planted. Within the deep-frozen vegetable division any shortfalls can be compensated by purchases of frozen products on the free market. The price fluctuations of recent years are explained in particular by fluctuations in the price of fresh vegetables.

The supply of raw materials is guaranteed by a limited number of suppliers. The deep-frozen vegetable division procures fresh vegetables mainly from over 800 farmers located in the area around the parent company in West Flanders and Northern France. At PinguinLutosa Foods UK Ltd and Pinguin Aquitaine, this takes place via about 15 agricultural cooperatives and various dealers. The provisioning for the CECAB Activity comes from local farmers in France, Poland and Hungary. The deep-frozen vegetable division has further extended its procurement possibilities by concluding cooperation agreements with a number of deep-frozen vegetable groups in Spain, Germany, Italy, Hungary and other countries. The provisioning of the canning division comes from around 4,500 ha of agricultural land, within a radius of 100 km around Bree.

The profitability of the potato division is also determined by the sales prices it can achieve for its products on the market. In particular its profitability is determined by the difference between the price that it can negotiate for its finished products with buyers and the prices at which the potato division has concluded its potato purchasing contracts and at which it buys non-contracted potatoes (around 50%) on the free market.

Free market potato prices can fluctuate sharply due to variations in supply (mainly due to weather conditions and the quality and storability of potatoes) and to speculation. The negative impact of potato prices on the potato division's profitability is partially cushioned by the focus on the brands segment, on the less pricedriven customer segment and on potato products with a higher added value or a strong innovative character. Extensive storage capacity for both raw materials and finished products and longstanding relationships with growers and potato dealers cushion the effects of fluctuating potato prices.

The potato division has sought to limit the risks of potato availability by:

• having a large potato storage capacity (100,000 tons) at its production sites. This storage capacity provides a cushion against supply shortages. It also serves to optimize the storage life of potatoes, an area in which the potato division has built up considerable expertise. Management in the potato division sees this storage capacity as a competitive advantage;
• good contacts with foreign growers (Netherlands, France and Germany) to obtain certain other potato varieties and in order to have additional purchasing possibilities abroad should the Belgian potato supply be insufficient or too expensive.

In addition, the potato division can extend its supply region with the wide range of different potato varieties, each of which has its own region.

Despite the great care devoted to these aspects, production remains dependent on temporary weather phenomena. Climate conditions can influence supplies and raw materials prices. Harvest yields can fluctuate greatly as a function of weather conditions. These can lead to surpluses or shortages with pressure on sales prices or loss of productivity.

2. Credit risk

Credit risk is the risk of financial loss to the Group through a customer or a financial instrument counterparty being unable to fulfil its contractual obligations. This risk originates in most cases from the Group's customer receivables and investments.

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group has a diversified customer portfolio. To protect itself against customer defaults and bankruptcies the Group uses the services of an international credit insurance company, and also applies internal customer credit limits. Management has developed a credit policy and credit risk exposure is continuously monitored. Any customer whose credit exceeds a specified amount is subjected to a credit check. Following credit checking these customers are subdivided into categories. Customers who represent a high risk factor are treated according to the credit policy that the Group has developed. Credit risk covers only the instrument class of 'loans and receivables' (L&R).

To further limit the credit risk of customers failing to meet their payment obligations, the Group has implemented some time ago credit insurance with an international credit insurance company for all customers. The Group has an invoice discounting facility, whereby the Group sells a portion of its receivables to a financial institution, which enables it to turn receivables into cash more quickly. We refer to note "6.9. Trade and other receivables" for further information on invoice discounting.

For the other instrument classes the credit risk is limited or nonexistent, given that counterparties are banks with a high creditworthiness.

2.a.1 Exposure to credit risk

The carrying amount of the financial assets represents the Group's maximum exposure to credit risk. The carrying amount is reported including impairments. The maximum exposure to credit risk at the balance sheet date is given in the tables below:

Net carrying amount of financial as sets 31/03/2012 (in thousands of €)	Category of instruments in accordance with IAS 39	Gross value 31/03/2012	Impairment losses 31/03/2012	Net carrying amount 31/03/2012
Other financial fixed assets	FaAFS	3,350		3,350
Long-term receivables (> 1 year)	L&R	847	-142	705
Trade receivables	L&R	100,456	-1,660	98,796
Other receivables	L&R	24,912		24,912
Derivatives	FaHT	78		78
Short-term deposits	L&R
Cash and cash equivalents	L&R	38,356		38,356
Total		164,649	-1,802	162,847

Net carrying amount of financial assets 31/12/2010 (in thousands of €)	Category of instruments in accordance with IAS 39	Gross value 31/12/2010	Impairment losses 31/12/2010	Net carrying amount 31/12/2010
Long-term receivables (> 1 year)	L&R	285	-142	143
Trade receivables	L&R	52,278	-1,096	51,182
Other receivables	L&R	13,198		13,198
Derivatives	FaHT
Short-term deposits	L&R
Cash and cash equivalents	L&R	54,990		54,990
Total		120,751	-1,238	119,513

At balance sheet date there were no noteworthy concentrations of credit risk. The reader is referred here to note "6.9. Trade and other receivables".

2.a.2 Impairment losses

The contribution of impairment losses recognized during the financial year has been presented by its financial asset category under the specific headings of the statement of financial position.

The total amount of interest on financial assets subject to impairment was nil at 31 March 2012 (nil at 31 December 2010). The net result on loans and receivables (> 1 year) was nil for the financial year ending on 31 March 2012 (nil at 31 December 2010).

3. Share price risk

During the financial year the Group did not hold any investments in shares classified as available for sale. The Group was not exposed to any major share price risk. The net result on the available-for-sale financial assets is nil.

4. Liquidity risk

Liquidity risk is the risk of having insufficient resources in order to fulfil direct obligations which are settled in cash or other financial assets. The Group's approach to liquidity is to ensure, as far as possible, that sufficient liquidity is available at all times to meet liabilities as these fall due, under both normal and abnormal circumstances, without exposing itself to unacceptable losses or damaging the Group's reputation.

The Group uses the 'Activity Based Costing' (ABC) cost price model to estimate the cost price of its products. This helps ensure better management of cash flow requirements. The Group makes sure that it has sufficient available liquidity to meet expected operating costs for a 60 day period, including meeting its financial obligations. This excludes, however, the potential impact of extreme, unforeseeable circumstances, such as a natural disaster.

At 31 March 2012 the Group had €65.1 million of unused available lines (at 31 December 2010: €0.5 million).

In today's economic and banking climate, the company keeps strict watch on its financing structure and is constantly analysing the existing and required amounts and types of financing.

For a discussion of the existing lines and their terms and conditions the reader is referred to the analyses of the inter-est-rate risks (note "6.20.1.b. Interest-rate risk") and the interest-bearing liabilities (note "6.18. Interest-bearing liabilities").

The following table shows the Group's contractually agreed (undiscounted) outflows in relation to financial liabilities. Only net interest payments and principal repayments are included. The contractual maturity is based on the earliest date on which the Group is required to pay.

Remaining terms of financial debts		Contractually agreed undiscounted cash flows
(in thousands of €)	Category of instruments	due within 6 months	due between 6 months and 1 year	due between 1 and 5 years	due after 5 year	Total
Financial lease obligations	n/a	228	142	23		393
Unguaranteed bank facilities	FLmaAC
Liabilities to credit institutions	FLmaAC
Other guaranteed financial liabilities	FLmaAC	11	12	48		71
Other non-guaranteed financial liabilities	FLmaAC	1,831	194	1,545	1,490	5,060
Guaranteed GBP bank loan	FLmaAC	525	6,163	8,485		15,173
Guaranteed EUR bank loan	FLmaAC	53,745	8,657	129,455		191,857
Convertible bond loans with warrants	FLmaAC	986	990	14,843	41,837	58,656
Other guaranteed loans	FLmaAC
Other unguaranteed loans	FLmaAC
Trade debts	FLmaAC	196,819				196,819
Other debts	FLmaAC	3,721				3,721
Financial debts: non-derivatives		257,865	16,158	154,399	43,327	471,749
IRS	FlHT	1,925	1,907	9,209	704	13,745
Options	FlHT	18,744	6,281			25,025
Financial debts: derivatives		20,669	8,188	9,209	704	38,770
Total undiscounted cash flows		278,534	24,346	163,608	44,031	510,519

31/03/2012

Remaining terms of financial debts				Contractually agreed undiscounted cash flows
(in thousands of €)	Category of instruments	due within 6 months	due between 6 months and 1 year	due between 1 and 5 years	due after 5 year	Total
Financial lease obligations	n/a	355	285	511		1,151
Unguaranteed bank facilities	FLmaAC
Liabilities to credit institutions	FLmaAC
Other guaranteed financial liabilities	FLmaAC	8	71	71		150
Other non-guaranteed financial liabilities	FLmaAC	78	234	634	2,746	3,692
Guaranteed GBP bank loan	FLmaAC	1,560	9,547	4,450		15,557
Guaranteed EUR bank loan	FLmaAC	9,311	51,675	49,049		110,035
Other guaranteed loans	FLmaAC
Other unguaranteed loans	FLmaAC
Trade debts	FLmaAC	116,679				116,679
Other debts	FLmaAC	505				505
Financial debts: non-derivatives		128,496	61,812	54,715	2,746	247,769
IRS	FlHT	482	219	461		1,162
Options	FlHT
Financial debts: derivatives		482	219	461	0	1,162
Total undiscounted cash flows		128,978	62,031	55,176	2,746	248,931

All instruments held at the reporting date and for which payments had been contractually agreed are included. Forecasted data relating to future, new liabilities are not included. Amounts in foreign currencies have been translated at the closing rate at the reporting date. The variable interest payments arising from the financial instruments were calculated using the applicable forward interest rates.

5. Financial instruments by class and category

The table below gives an overview of the various classes of financial assets and liabilities with their respective net balance sheet carrying amounts and their respective fair values and analysed by their measurement category in accordance with IAS 39 "Financial Instruments: Recognition and Measurement" or IAS 17 "Leases".

Cash and equivalents, other financial investments, treasury investments, trade and other receivables, loans and receivables have mostly short maturities. For this reason the net carrying amount at closing date approximates the fair value. Trade payables have in general also short maturities and for this reason the net carrying amounts at maturity approximate their fair value. The fair value of interest-bearing liabilities is calculated as the present value of the future cash flows. The fair value of the derivatives is calculated using standard financial valuation models using market data.

31/03/2012				Amounts recognised in balance sheet in accordance with IAS 39
(in thousands of €)	Category in accordance with IAS 39	Net carrying amount 31/03/2012	mortized cost A	recognized in Fair value equity	recognized in profit or loss Fair value	in accordance with IAS 17 Amounts recognised in balance sheet	Fair value 31/03/2012
ASSETS
NON-CURRENT ASSETS
Other financial fixed assets	FaAFS	3,350	3,350				n.a.*
Other non-current receivables	L&R	705	705				705
CURRENT ASSETS
Trade receivables	L&R	98,796	98,796				98,796
Other receivables	L&R	24,912	24,912				24,912
Derivatives	FaHT	78			78		78
Short-term deposits	L&R
Cash and cash equivalents	L&R	38,356	38,356				38,356
LIABILITIES
NON-CURRENT LIABILITIES
Financial debts at credit institutions
- Finance leases	n.a.	22				22	22
- Bank loans	FLmaAC	195	195				193
- Bonds	FLmaAC
- Other financial debts	FLmaAC	2,268	2,268				2,531
Interest-bearing liabilities
- Convertible bond loans	FLmaAC	38,519	38,519				48,814
Other amounts payable	FLmaAC
CURRENT LIABILITIES
Financial debts at credit institutions
- Finance leases	n.a.	364				364	364
- Bank loans: debts > 1 year payable within current year	FLmaAC	133,772	133,772				137,669
- Bank loans	FLmaAC	50,447	50,447				50,876
- Derivatives	FlHT	6,592			6,592		6,592
- Other financial debts	FLmaAC	1,940	1,940				2,016
Trade payables	FLmaAC	196,819	196,819				196,819
Other amounts payable	FLmaAC	4,375	4,375				4,375
Total by category in accordance with IAS 39
Loans and receivables	L&R	162,769	162,769				162,769
Financial assets Held for Trading	FaHT	78			78		78
Financial liabilities Held for Trading	FlHT	6,592			6,592		6,592
Available-for-sale financial assets	FaAFS	3,350	3,350				n.a.*
Held-to-maturity investments	Htm
Financial liabilities measured at amortised cost	FLmaAC	428,336	428,336				443,293

* As no reliable estimate can be made of the fair value of the other participating interests, financial assets for which no active market exists are valued at cost less any impairments..

			Amounts recognised in balance sheet in accordance with IAS 39
31/12/2010 (in thousands of €)	Category in accordance with IAS 39	Net carrying amount 31/12/2010	mortized cost A	recognized in Fair value equity	recognized in profit or loss Fair value	in balance sheet in accordance Amounts recognised with IAS 17	31/12/2010 Fair value
ASSETS
NON-CURRENT ASSETS
Other financial fixed assets	FaAFS						n.a.*
Other non-current receivables	L&R	143	143				143
CURRENT ASSETS
Trade receivables	L&R	51,182	51,182				51,182
Other receivables	L&R	13,198	13,198				13,198
Derivatives	FaHT
Short-term deposits	L&R
Cash and cash equivalents	L&R	54,990	54,990				54,990
LIABILITIES
NON-CURRENT LIABILITIES
Financial debts at credit institutions
- Finance leases	n.a.	476				476	476
- Bank loans	FLmaAC	53,055	53,055				53,044
- Bonds	FLmaAC
- Other financial debts Interest-bearing liabilities	FLmaAC	2,500	2,500				3,018
- Convertible bond loans Other amounts payable	FLmaAC
CURRENT LIABILITIES
Financial debts at credit institutions
- Finance leases	n.a.	629				629	629
- Bank loans: debts > 1 year payable within current year	FLmaAC	12,781	12,781				15,802
- Bank loans	FLmaAC	51,516	51,516				51,620
- Derivatives	FlHT	594			594		594
- Other financial debts	FLmaAC	235	235				218
Trade payables	FLmaAC	116,679	116,679				116,679
Other amounts payable	FLmaAC	646	646				646
Total by category in accordance with IAS 39
Loans and receivables	L&R	119,513	119,513				119,513
Financial assets Held for Trading	FaHT
Financial liabilities Held for Trading	FlHT	594			594		594
Available-for-sale financial assets	FaAFS						n.a.*
Held-to-maturity investments	Htm
Financial liabilities measured at amortised cost	FLmaAC	237,412	237,412				241,026

* As no reliable estimate can be made of the fair value of the other participating interests, financial assets for which no active market exists are valued at cost less any impairments..

During the present financial year the Group has not used financial assets as security for liabilities or contingent liabilities, and it is not required to meet contractual obligations in this respect. The shares of the subsidiaries have been pledged to guarantee the club deal financing.

6. Capital structure

The Group constantly seeks to optimize its capital structure (balance between debts and equity) with a view to maximize shareholder value. The Group strives for a flexible structure in terms of periodicity and credit type, which enables it to grab potential opportunities. The various capital components are discussed in the note on equity and in note "6.18. Interest-bearing liabilities".

There are no target ratios set for solvency or gearing. The Group seeks to follow the prevailing norms for the market and sector. The capital structure is presented at regular intervals to the Audit Committee and the Board of Directors.

7. OTHER ELEMENTS

7.1 SUBSIDIARIES

The parent company of the Group is PinguinLutosa NV, Westrozebeke, Belgium. At 31 March 2012 there were 28 subsidiaries included in the consolidated financial statements by the full consolidation method.

Name, full address of the registered office and, for companies governed by Belgian law, the VAT or national number	Proportion of the capital held (in %)	Change of percentage of capital held (as compared to previous period)	Voting rights (%)
PinguinLutosa NV Romenstraat 3 8840 Westrozebeke (Staden) BE 0402.777.157	100.00%	0.00%	100.00%
Pinguin Langemark NV Poelkapellestraat 71 8920 Langemark BE 0427.768.317	99.99%	0.00%	99.99%
Pinguin Salads BVBA Sneppestraat 11 A 8860 Lendelede BE 0437.557.793	100.00%	0.00%	100.00%
M.A.C. SARL Rue Jean Goujon 8 75008 Paris France	99.80%	0.00%	99.80%
PinguinLutosa Deutschland GMBH Dorfplatz 20 50129 Bergheim Germany	99.90%	0.00%	99.90%
Pinguin Aquitaine S.A.S. Avenue Bremontier 40160 Ychoux France	52.00%	0.00%	52.00%
PinguinLutosa Foods UK Ltd Scania Way King's Lynn GB-PE30 4LR Norfolk United Kingdom	100.00%	0.00%	100.00%
PinguinLutosa Foods NV Zone industrielle du Vieux-Pont 5 7900 Leuze-en-Hainaut BE 0418.162.347	100.00%	0.00%	100.00%
G&LVan den Broeke - Olsene NV Schoendalestraat 221 8793 St.-Eloois-Vijve (Waregem) BE 0420.902.202	100.00%	0.00%	100.00%
Vanelo NV Moerbosstraat 50 8793 St.-Eloois-Vijve (Waregem) BE 0458.234.829	100.00%	0.00%	100.00%

Lutosa UK Ltd PO BOX 83 St Ives Cambridgeshire PE27 5PD United Kingdom	100.00%	0.00%	100.00%
Lutosa España SA C/ Diego Ayllon, 8 - 3°B 28043 Madrid Spain	90.00%	0.00%	90.00%
Lutosa América Latina Ltda Av. das Americas, 500 - bl. 4 - Cob 317 CEP22640-100 Rio de Janeiro / RJ Spain	98.12%	0.00%	98.12%
PinguinLutosa Japan K.K. 208 Palais Royal Rokubancho 6-1 Rokubancho Chiyoda ku Tokyo 102-0085 Japan	100.00%	0.00%	100.00%
PinguinLutosa Foods Shanghai Ltd 7-B, Orient International Science & Technology Palace No.58 XiangCheng Road 200122 Shanghai China	100.00%	0.00%	100.00%
Lutosa France SARL Rue du Président Roosevelt 26 59150 Wattrelos France	100.00%	0.00%	100.00%
PinguinLutosa Italia SRL Via Zara 45 20013 Magenta (MI) Italy	100.00%	0.00%	100.00%
PinguinLutosa CEE GMBH Franzosengraben 20 1030 Wien Austria	100.00%	0.00%	100.00%
CGS S.A.S. ZA Le Barderff - Moréac - BP 20227 56502 Locminé Cedex France	100.00%	+100.00%	100.00%
CGB S.A.S. ZA Le Barderff - Moréac - BP 20227 56502 Locminé Cedex France	100.00%	+100.00%	100.00%
Pinguin Comines S.A.S. Chemin des Rabis - BP 97 59560 Comines (Sainte Marguerite) France	100.00%	+100.00%	100.00%
PinguinLutosa Foods Polska Sp. z o.o. ul. Tytoniowa 22 04-228 Warszawa Poland	100.00%	+100.00%	100.00%
PinguinLutosa Foods Hungary Kft. Nagy Istvan ut 36 6500 Baja Hungary	100.00%	+100.00%	100.00%

D'aucy do Brasil Ltda Rua Alvarenga 1422 – Butantã 05509-003 São Paulo - SP Brazil	100.00%	+100.00%	100.00%
Scana Noliko Holding NV Kanaal-Noord 2002 3960 Bree BE 0865.259.301	100.00%	+100.00%	100.00%
Scana Noliko NV 11 Kanaal-Noord 2002 3960 Bree BE 0437.126.936	100.00%	+100.00%	100.00%
Scana Noliko Ltd. Kennel Ride SL5 7NT ASCOT Berkshire United Kingdom	100.00%	+100.00%	100.00%
BND CVBA Kanaal-Noord 2002 3960 Bree BE 0462.012.681	25.00%	+25.00%	25.00%
Changes in the consolidation scope We refer to note "2.4. Changes in the consolidation scope" for a discussion of: • the changes in the consolidation scope for the financial year	•	ending on 31 March 2012 the changes in the consolidation scope for the financial year ending on 31 December 2010

Name, full address of the registered office and, for companies governed by Belgian law,	Proportion of the capi	Data from the most recent period of which annual accounts are available 30-06-2011
the VAT or national number	tal held (in %)	Currency unit	Equity	Net result
Tomates d' Aquitaine S.A.S.
35, rue Pierre Pinson	14.28%		623,930
24100 Bergerac		EUR		-54,950
France

Name, full address of the registered office and, for companies governed by Belgian law,	Proportion of the	Data from the most recent period of which annual accounts are available 31-12-2011
the VAT or national number	capital held (in %)	Currency unit	Equity	Net result
D'aucy Polska Z.o.o. ul. Tytoniowa 22 04-228 Warszawa Poland	10.00%	PLN	-10,732,087	-14,907,045
Bajaj Hutoipari Zrt Nagy Istvàn ut 36 6500 Baja Hongary	10.00%	HUF	2,062,287	-106,416
S.A.S. Vallée de la Lys Rue de la distillerie - BP97 59560 Comines (Sainte Marguerite) France	10.00%	EUR	5,833,683	976,455
Moréac Surgelés S.A.S. ZA Le Barderff - Moréac - BP 20227 56502 Locminé Cedex France	10.00%	EUR	19,609,109	152,410

12 On 31 March 2012, in Belgium a silent merger was undertaken of Scana Noliko NV and Scana Noliko Rijkevorsel NV, with a retroactive accounting effect as from 1 January 2012 onwards: see note "2.4. Changes in consolidation scope").

Companies that are neither subsidiaries nor associated companies

The companies Tomates d'Aquitaine SAS, D'aucy Polska Z.o.o., Bajaj Hutoipari Zrt, Vallée de la Lys S.A.S. and Moréac Surgelés S.A.S. are not included in the consolidation scope, because the Group does not have the power to beneficially control their financial and operational policy, nor does it have significant direct or indirect influence on these companies.

7.2 PENDING DISPUTES

Pending disputes at 31 March 2012

DISPUTE WITH MAXWELL CHASE TECHNOLOGIES

Various Group companies have been summonsed before the Kortrijk Commercial Tribunal at the request of the U.S. company Maxwell Chase Technologies LLC. This company is claiming damages of around 16 million US dollars for the termination of a distribution agreement between Maxwell Chase Technologies and Techno-Food NV. Techno-Food NV is the former subsidiary of VDI (later renamed Pinguin Salads BVBA), which was sold by the PinguinLutosa Group in 2002. The facts mentioned above post-date the sale of Techno-Food NV by the Group. Based on the evidence available to it at the moment, management deems it very unlikely that the Group will be condemned to pay compensation to Maxwell Chase Technologies LLC. No provision has been set up.

DISPUTE PINGUIN AQUITAINE SAS

This relates to a dispute with the French Ministry of the Economy with regard to conditions for granting agricultural subsidies in the period 2000-2002. As a precaution and without including any admission of guilt, the existing provision of €0.1 million has been increased up till €0.5 million.

In another dispute with regard to clean-up of land there was a final judgement. In 2011 PinguinLutosa has paid the entire amount of these clean-up costs (€0.4 million) and the provision which was established in the past has been reversed. Hence this case is closed.

DISPUTE PINGUINLUTOSA FOODS UK LTD, (EASTON)

In PinguinLutosa Foods UK Ltd there is a dispute with the owners of the rented site in Easton (United Kingdom) related to clearing and repair costs when the rented site in Easton was vacated. The maximum claim amounts to £1.2 million but PinguinLutosa considers this amount to be exaggerated. By way of precaution and without including any admission of guilt, a partial provision has been made of £0.3 million (Easton site). During the past financial year this provision has been increased to £0.7 million (Easton, Bourne and Grimsby sites).

DISPUTE PINGUIN SALADS BVBA

With respect to an occupational accident, there is a dispute with regard to a compensation for damages not covered by the occupational health insurer The potential financial impact is estimated at €0.2 million.

7.3 COMMITMENTS

Commitments concerning investments in tangible fixed assets

At 31 March 2012 the deep-frozen vegetable division had commitments to acquire fixed assets in an amount of €3.5 million (at 31 December 2010: €2.5 million). This mainly relates to investments in Belgium for the project related to the bean and spinach line in an amount of €1.4 million, whereas in the United Kingdom the commitments mainly relate to a mixing line, sorters, weighers and the relocation and optimising of the water purification installation in a total amount of €2.1 million.

At 31 March 2012 the potato division had commitments to acquire fixed assets in an amount of €3.0 million related to a building for the reception, sorting and storage of potatoes and the related machinery at the site in Leuze-en-Hainaut (at 31 December 2010: €0.6 million).

At 31 March 2012 the canning division had commitments to acquire fixed assets in an amount of €1.4 million. This mainly relates to an upgrade of the production lines in the vegetables hall (€0.2 million), a pasteurisation tunnel (€0.1 million), sprinkler systems (€0.1 million), cherry stoners (€0.1 million), a volumetric dosing system (€0.1 million), renovation works in the production halls (€0.2 million), metal detectors (€0.1 million) and various smaller replacement and optimisation projects.

Procurement of fresh vegetables and potatoes

The deep-frozen vegetable division has concluded sowing and purchase contracts with a number of farmers for the procurement of fresh vegetables from the harvests in the financial year 2012- 2013. Contracts totaling €51.3 million (together with the United Kingdom, Poland, Hungary and France), for the procurement of fresh vegetables, had been concluded at 31 March 2012 (at 31 December 2010: €21.7 million). This amount can fluctuate as a function of climate conditions and market prices for fresh vegetables.

The potato division has concluded a number of purchase contracts with farmers and dealers for potatoes from the 2012-2013 harvests. Calculation of the total value is not possible given that contract values can fluctuate as a function of quality and spot prices.

The canning division has concluded sowing and purchase contracts with a number of farmers for the procurement of fresh vegetables from the harvests in the financial year 2012-2013. Contracts totaling €0.3 million for the procurement of fresh vegetables had been concluded at 31 March 2012. This amount can fluctuate as a function of climate conditions and market prices for fresh vegetables.

Rent and operating leases

The Group has concluded rental and lease contracts, mainly for buildings and vehicles. The tables below give an overview of the current value of rental and lease contracts by maturity period.

Rent and operating leases: future payments (in thousands of €)	31/03/2012	31/12/2010
Within 1 year	25,305	12,911
Between 1 and 5 years	89,403	38,503
After 5 years	107,189	57,116
Total	221,898	108,530

The increase at 31 March 2012 is mainly due on the one hand following the acquisition of the CECAB Activity and the canning division of Scana Noliko Group (see note "2.4. Changes in consolidation scope") and on the other hand the prolongation of the contract to the rental of external storage in Ieper and the conclusion of a similar contract in Comines for a 16 year term at a common nominal annual cost of €3.0 million.

The amount of rent and leasing debts of the deep-frozen vegetable division and the potato division amounted to €108.5 million as per 31 December 2010 and did not change significantly for the 'old' PinguinLutosa Group for the period between 1 January 2011 and 31 March 2012 except for those changes mentioned above. The amount as per 31 December 2010 mainly included the rental of external storage in Wisbech for a 12 year term with a nominal annual cost of €2.4 million and as well the sale and rent back transaction involving the potato division real estate. In 2007 a rental contract has been concluded for a 15 year term at a nominal annual cost of €4.2 million.

In the deep-frozen vegetable division, the CECAB Group will retain the production infrastructure and the land and buildings and rent them out to PinguinLutosa. A lease was concluded for a period of 6 years commencing on 1 September 2011 with a nominal annual cost of €5.2 million (see note "2.4. Changes in the consolidation scope").

Through the acquisition of the canning division ('Scana Noliko Group') on 19 July 2011, the PinguinLutosa Group must also include as at 31 March 2012 the operational lease obligations for the canning division for an amount of €45.8 million. This amount for the canning division primarily includes €45.1 million in future lease obligations as a result of the Sale and Rent Back Operation on the property of the sites in Bree and Rijkevorsel, while the remaining amount includes rental obligations for forklift trucks. For further information with regard to the leases between, on the one hand, Scana Noliko NV and Scana Noliko Real Estate NV and, on the other, Scana Noliko Rijkevorsel NV and De Binnenakkers NV, we refer to note "6.3. Tangible Fixed Assets".

The expenses included in the statement of comprehensive income are included in table below:

Rent and operating leases: expenses (in thousands of €)	31/03/2012	31/12/2010
Expenses included in statement of comprehensive income (for klifts, hardware, buildings, …)	21,976	10,185
Total	21,976	10,185

Option

The Group has an option to purchase the land and buildings of the former Padley Vegetables Ltd. (now integrated into PinguinLutosa Foods UK Ltd.) within 2 years for £6.0 million.

PinguinLutosa has a right of first refusal to purchase the production infrastructure and the land and buildings that are currently leased by the CECAB Group to PinguinLutosa, with exclusion of the site in Moréac, and this after the period of 6 years commencing on 1 September 2011.

Bank guarantees

There is a bank guarantee outstanding in an amount of €0.2 million until 2013 in favour of OVAM (Flemish Public Waste Company) to guarantee the decontamination of polluted soil, and a bank guarantee of €0.1 million in favour of the Roeselare Customs and Excise office.

Bank covenants / Refinancing of the debt

Supported by the banking syndicate, the reference shareholders of PinguinLutosa and the previous shareholders of Scana Noliko Group, PinguinLutosa has managed on July 19 2011 to replace and extend the existing financing of PinguinLutosa as well as that of Scana Noliko Group. In total a credit facility of €250.0 million (club deal financing), has been negotiated, which consists of:

(i) A €130.0 million term loan. This loan is repayable in periodical instalments, with the largest instalment (60% of the loan) at final maturity at the end of the five year term. The term loan has been drawn partly in pounds sterling and partly in euros.
(ii) A €60.0 million revolving credit facility during the same five year term. This loan is repayable in periodical instalments.
(iii) A €60.0 million line for future investments during the same five year term. This line is repayable in periodical instalments, with the largest instalment (70% of the outstanding aggregate amount) at final maturity at the end of the five year term.

The applicable interest rate on the various tranches of the club deal financing amounts to ´euribor + margin´, where this additional margin can amount to a maximum of 3% and depends on the ´leverage ratio´. In order to cover for the variability of the euribor, the company hedged in 2011 and concluded a number of new IRS´s for a nominal value of €161.0 million. The maximum hedging term for these instruments runs until July 2016.

The existing guarantees of Scana Noliko Group have been released and replaced by a guarantee structure based primarily on limited power of attorney to pledges on general business assets and pledges on general business assets, limited power of attorney to pledge on general business assets and a pledge on the general business assets. The agreement includes a change of control clause that in case of a change of control an early repayment of the facilities is foreseen.

In accordance with IAS 39.43, the transaction costs related to the renegotiation of the club deal for a total amount of €3.3 million are recorded as a deduction of the interest-bearing liabilities and are taken into result over the term of the financing. The arrangement fees associated with the previous debt financing (in the amount of €1.3 million as at 31 December 2010) were taken in costs in the extended financial year ending on 31 March 2012 as a result of the refinancing within the framework of the club deal financing.

Within the framework of the club deal financing that was renegotiated on 19 July 2011, several restrictions were also imposed in connection with the dividend policy to be employed. Specifically, in the event of a possible dividend payment, account is to be taken of the outstanding financial debt as a result of the club deal financing and a part is reserved for continuing to scale down debt.

The club deal financing also provides an early repayment obligation in a number of cases such as: (a) Hein Deprez no longer has control over Food Invest International NV; (b) Food Invest International NV no longer possesses (directly or indirectly) at least 30% of the share capital of PinguinLutosa; (c) PinguinLutosa no longer has control over certain of its subsidiaries or (d) the shares of a subsidiary of PinguinLutosa are listed on a regulated market. In such cases the company needs to fully repay the outstanding debts.

Following the renegotiation of the covenant package in March 2012 as from the first quarter of 2012 a number of changed covenants have been included:

(i) net financial debt /REBITDA ratio (≤ 3.75 at 31 March 2012)
(ii) EBITDA/interest payments ratio (≥ 3.70 at 31 March 2012)
(iii) cash flow/capital and interest repayments ratio (≥ 1.35)
(iv) the extent of investments (for calendar year ending as per 31 December 2011 fixed at maximum €28.0 million)
(v) the extent of invoice discounting (for calendar year ending as per 31 March 2012 fixed at €70.0 million)

The margin applicable on the credits is dependent on performance against these covenants. For a calculation of the ratios under items (i),(ii) and (iii) a period of 12 months preceding the date of the examination must be taken into account. These covenants must be fulfilled on a quarterly basis, and reporting to the credit providers is therefore also made on a quarterly basis.

The first testing of the covenants occurred on 31 December 2011. Per 31 December 2011 the company breached the covenant relating to the cash flow cover. This breach was caused by the built up of stock due to a good production season with an expected increase in sales in 2012. PinguinLutosa has obtained an agreement with its banks for the situation per 31 December 2011. For the period up till 30 June 2012 a temporarily adjusted cash flow cover covenant has been agreed on (from 1 to -1.35).

Per 31 March 2012 PinguinLutosa complies with this new covenant, as well as with the existing covenants.

The 'net financial debt /REBITDA' ratio amounted to 2.66 at 31 March 2012 compared to a maximum covenant value of 3.75 at 31 March 2012.

The 'interest cover' ratio or 'EBITDA/interest payments' ratio amounted to 3.95 at 31 March 2012 compared to a minimum covenant value of 3.70 at 31 March 2012.

The 'cash flow cover' ratio or 'cash flow/capital and interest repayments' ratio amounted to 0.52 at 31 March 2012 compared to a minimum covenant value of -1.35 at 31 March 2012.

The extent of investment amounted to €26.7 million at 31 March 2012 compared to a covenant value for calendar year ending as per 31 December 2011 fixed at maximum €28.0 million.

The extent of invoice discounting amounted to €47.7 million (offbalance) at 31 March 2012 compared to a covenant value for accounting year ending as per 31 March 2012 fixed at maximum €70.0 million.

In expectation of an agreement with the banks on the adjusted covenants in the light of the nature and the activities of the company and the recent acquisitions and related financing structure it has been temporarily decided to record the complete club deal financing as short-term debts in accordance with IFRS. Due to this reclass the liquidity ratio is 94.8% instead of 133.2% in the case that the loans would be recorded as long term debts. The management expects to finalize such an agreement in the coming months. Pursuant to this agreement the bank debts will be partially recorded as long-term and partially as short-term debt.

Restrictions on dividend

The terms of the club deal financing impose a number of restrictions relating to the dividend distribution by PinguinLutosa NV. As a function of the leverage ratio, the amount that can be paid out as a dividend is limited to a maximum of 40% of the cash flow. If the leverage falls below a specific limit (1.5 times the cash flow), the limitation is lifted.

Off-balance sheet commitments

Off-balance sheet commitments:

guarantees (in thousands of €)	31/03/2012	31/12/2010
Registered lien on general assets	15,000	5,000
Mandate on general assets	237,477	88,418
Mortgage mandate	18,000	9,000
Registered mortgage	2,000	1,000
Joint guarantee	3,204	2,671
Total	275,681	106,089

7.4 RELATED PARTIES

Transactions between PinguinLutosa NV and its subsidiaries, which are related parties, have been eliminated in the consolidation and are therefore not included in this note. The Group has no participating interests in joint ventures, nor in associated enterprises which could therefore not be classified as related parties. The Group does have a participating interest in Tomates d'Aquitaine SAS. This falls under the IAS 24 definition of related parties, but is not included in this note, as there have been no further transactions beyond the taking of the interest.

For an overview of the application of articles 523 and 524 of the Company Code, we refer to the chapter ´Corporate Governance´ in the Annual Report.

European Food Transport (EFT) NV

EFT NV is a company that is part of the Univeg Group and, as such, is partially controlled, directly or indirectly, by Mr Hein Deprez (permanent representative of Deprez Invest NV and indirectly via Deprez Holding NV the controlling shareholder of Food Invest International NV). EFT NV is active as a transport company for the national and international transport and distribution of food products. In that capacity, PinguinLutosa sometimes uses the services of EFT NV.

Shipex NV

Shipex NV is a company that is partially controlled by Ms Veerle Deprez (permanent representative of Management Deprez BVBA). Shipex NV is a major 'freight forwarder' (sea and air freight; containers). In that capacity, PinguinLutosa sometimes uses the services of Shipex NV.

Les Prés Salés NV

Les Prés Salés NV is a real estate company which has acted as a party in the sale and rent back of the real estate of the Lutosa Group. Les Prés Salés NV's shareholders are Food Invest International NV and Deprez Holding NV. There are no other shareholders.

Union Fermière Morbihannaise SCA

Union Fermière Morbihannaise SCA is a French agricultural cooperative with its origin in Bretagne. The company is active in livestock, grain production, vegetable production and in several sub-sectors that process and market agricultural produce. UFM SCA is the owner of CECAB Group. The CECAB Activity was integrated with PinguinLutosa on 1 September 2011 (see note "2.4. Business combinations").

CECAB Entity

Within the framework of the acquisition of the CECAB Activity (see note "2.4. Changes in consolidation scope"), in 2011 PinguinLutosa set up in France, Poland and Hungary a number of operational subsidiaries, namely PinguinLutosa Foods Polska Sp. Z.o.o. (Poland), PinguinLutosa Foods Hungary Kft. (Hungary) and Pinguin Comines SAS (France). These subsidiaries concluded with the local entities belonging to the CECAB Activity (namely D´Aucy Polska Sp. Z.o.o. (Poland), Bajaj Hutoipari Zrt. (Hungary), D´Aucy Frozen Foods Hungary (Hungary), Sica Vallée de la Lys SAS (France) and Moréac Surgélés SAS (France) (the CECAB Entities)) the following bilateral agreements with regard to the activities on the production sites of the CECAB Activity:

• 6-year leases under which the buildings and machinery on the production sites are leased by the CECAB Entities to the subsidiaries of PinguinLutosa;
• Supply and financing agreements where in each case:
* the CECAB Entity is given responsibility for supplying the raw materials to the production site in the quantities and types as defined by PinguinLutosa;
* the CECAB Entity finances the cost price of the raw materials by means of a supplier credit;
* the subsidiary of PinguinLutosa is put in charge of the production, the deep-freeze process and the storage of the vegetables and fruit that were delivered by the CE-CAB Entity;
* the subsidiary of PinguinLutosa may at any time purchase the products at the production cost price by submitting a purchase order and undertakes to purchase the products entirely at the latest one year after production.

Scana Noliko Real Estate NV

Scana Noliko Real Estate NV is a real estate company which has acted as a party in the sale and rent back of the real estate of the Scana Noliko Group in Bree. Scana Noliko Real Estate NV's shareholders are Food Invest International NV and De Binnenakkers NV. There are no other shareholders.

Food Invest International NV

Food Invest International NV is a holding company which is directly controlled by Deprez Holding NV and where Union Fermière Morbihannaise SCA is the second shareholder. There are no other shareholders. Food Invest International NV acted as party in the Scana Noliko Transaction.

Fomaco NV

Fomaco NV is a management company. The shareholders are the 5 members of the management team of Scana Noliko Group. There are no other shareholders. Fomaco NV delivers specialised management advice.

Gimv XL and related companies

Gimv XL is the global name for funds that were founded by GIMV as core shareholder together with the Vlaamse Participatiemaatschappij (VPM). Following the acquisition of Scana Noliko Group it has become a shareholder of PinguinLutosa NV and in addition it granted a subordinated convertible bond loan.

Related parties (in thousands of €)	31/03/2012 (15 months)	31/12/2010 (12 months)
Transactions and outstanding balances with related parties:

Univeg and associated companies
- Purchase of products, services and other goods	67	390
- Sales of products, services and other goods	1,299	1,436
- Outstanding receivables	8	224
- Outstanding payables	67	79
Shipex NV
- Purchase of services and other goods	7,259	389
- Outstanding payables	1,699	321
Les Prés Salés NV
- Purchase of goods and services (rent and property tax)	7,286	5,996
- Advance payment of goods and services (rent)		401
Union Fermière Morbihannaise SCA and related companies
- Purchase of products, services and other goods	3,031	468
- Sales of products, services and other goods	1,877	8,489
- Outstanding receivables	859	481
- Outstanding payables	762	145
CECAB-entity (D'Aucy Polska Sp. Z.o.o., Bajaj Hutoipari Kft., D'aucy Frozen Foods Hungary Kft., Sica Vallée de la Lys S.A.S., Moréac Surgelés S.A.S.)
- Purchase of products, services and other goods (rent)	88,020
- Sales of products, services and other goods	45,029
- Outstanding receivables	2,513
- Outstanding payables	38,797
Scana Noliko Real Estate NV
- Purchase of goods and services (rent)	3,266
- Outstanding receivables	9
- Outstanding payables	115
Food Invest International NV
- Financial revenue	74
- Outstanding receivables	1,824
Fomaco NV
- Purchase of goods and services	78
- Advance payment of goods and services
Gimv-XL and related companies
- Financial charges	2,048
- Outstanding payables	35,541

7.5 EVENTS AFTER THE BALANCE SHEET DATE

As per 1 April 2012 the UK site in Bourne has been completely closed down, which means that the number of production sites in the UK is now limited to King's Lynn and Boston.

As of 1 April 2012 the Group also applies factoring to the Belgian companies of the canning division. This was already the case for the potato and deep-frozen vegetable division. For this purpose the group has extended its existing factoring lines of €50.0 million with a new factoring line so that the group now disposes of factoring lines without recourse in an amount of €70.0 million. The amount of factoring drawn without recourse is recorded off-balance.

On 23 April 2012 the company name PinguinLutosa Foods UK Ltd. changed its name to Pinguin Foods UK Ltd..

There are no other major events subsequent to the balance sheet date which have a major impact on the further evolution of the company.

7.6 NON-AUDIT MISSIONS UNDERTAKEN BY THE STATUTORY AUDITOR + RELATED PARTIES

During the financial year from 1 January 2011 to 31 March 2012, assignments in an amount of €1.1 million were undertaken by the statutory auditor and persons working under cooperative arrangements with him. These assignments consisted of supplementary audit services, tax and legal advisory services.

The audit fees charged to the Group for the financial year ending 31 March 2012 amounted to €0.3 million.

Additional tax and legal advisory activities were presented in advance to the Audit Committee for approval. The Group's Audit Committee gave a positive decision on this extension.

STATEMENT FROM THE RESPONSIBLE PERSONS

Declaration regarding the information given in this annual report for the 15 months period ended 31 March 2012.

The undersigned, in the name and on behalf of PinguinLutosa NV, declare that, as far as they are aware:

• The financial statements, established in conformity with the applicable accounting standards, give a true and fair view of the equity, the financial position and the results of PinguinLutosa NV, including its consolidated subsidiaries;
• The annual report for the 15 months period ended 31 March 2012 contains a true and fair statement of the important events, the results and the position of PinguinLutosa NV, including its consolidated subsidiaries, as well as a comment on the principal risks and uncertainties confronting the Group.

Deprez Invest NV, represented by Mr Hein Deprez, CEO The New Mile BVBA, represented by Mr Steven D'haene, CFO The Marble BVBA, represented by Mr Luc Van Nevel, president of the Board of Directors

STATUTORY AUDITOR'S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED STATUTORY ACCOUNTS OF THE PARENT COMPANY PINGUINLUTOSA NV, ACCORDING TO BELGIAN ACCOUNTING STANDARDS

Parent company statutory accounts

The financial statements of the parent company, PinguinLutosa NV, are presented below in a condensed form. The statutory auditor issued an unqualified report on the financial statements of PinguinLutosa NV. In accordance with Belgian company law, the directors' report and financial statements of the parent company, PinguinLutosa NV, together with the statutory auditor's report, will be deposited with the National Bank of Belgium as provided by law.

They are available on our website www.pinguinlutosa.com and on request from:

PinguinLutosa NV Romenstraat 3 BE - 8840 Westrozebeke (Staden) Belgium www.pinguinlutosa.com

Condensed statutory accounts of PinguinLutosa NV

ASSETS

	ASSETS (in thousands of €)	Codes	31/03/2012	31/12/2010
	FIXED ASSETS	20/28	348,797	214,849
I.	Formation expenses	20	3,658	1,795
II.	Intangible assets	21	208	514
III.	Tangible assets	22/27	32.635	23.392
	A. Land and buildings	22	5.108	5.275
	B. Plant, machinery and equipment	23	15.096	17.334
	C. Furniture and vehicles	24	197	237
	D. Leasing and other similar rights	25
	E. Other tangible assets	26
	F. Assets under construction and advance payments	27	12.233	546
IV.	Financial assets	28	312.296	189.148
	A. Affiliated enterprises	280/1	308.957	189.130
	1. Participating interests	280	306.478	186.651
	2. Amounts receivable	281	2.479	2.479
	B. Other enterprises linked by participating interests	282/3	3.321
	1. Participating interests	282	3.321
	2. Amounts receivable	283
	C. Other financial assets	284/8	18	18
	1. Shares	284
	2. Amounts receivable and cash guarantees	285/8	18	18
	CURRENT ASSETS	29/58	107.644	74.020
V.	Amounts receivable after more than one year	29
	A. Trade debtors	290
	B. Other amounts receivable	291

	ASSETS (in thousands of €)
VI.	Stocks and contracts in progress	3	34,021	34,546
	A. Stocks	30/36	34,021	34,546
	1. Raw materials and consumables	30/31	1,787	2,297
	2. Work in progress	32
	3. Finished goods	33	32,233	32,249
	4. Goods purchased for resale	34
	5. Immovable property acquired or constructed for resale	35
	6. Advance payments	36
	B. Contracts in progress	37
VII.	Amounts receivable within one year	40/41 67,230		17,426
	A. Trade debtors	40	49,575	9,718
	B. Other amounts receivable	41	17,655	7,708
VIII.	Investments	50/53	0	10,000
	A. Own shares	50
	B. Other investments and deposits	51/53		10,000
IX.	Cash at bank and in hand	54/58	6,100	11,984
X.	Deferred charges and accrued income	490/1	293	64
	TOTAL ASSETS	20/58	456,441	288.869

LIABILITIES

	LIABILITIES (in thousands of €)	Codes	31/03/2012	31/12/2010
	CAPITAL AND RESERVES	10/15	167,081	129,532
I.	Capital	10	157,500	113,052
	A. Issued capital	100	157,500	113,052
	B. Uncalled capital	101
II.	Share premium acount	11	11,376	11,376
III.	Revaluation surplus	12
IV.	Reserves	13	7,013	7,461
	A. Legal reserve	130	285	285
	B. Reserves not available for distribution	131	25	25
	1. In respect of own shares held	1310
	2. Other	1311	25	25
	C. Untaxed reserves	132	1,477	1,477
	D. Reserves available for distribution	133	5,226	5,674
V.	Profit carried forward	140
	Loss carried forward (-)	141	-8,845	-2,422
VI.	Investment grants	15	37	65
	PROVISIONS AND DEFERRED TAXAT ION	16	64	91
VII.	Provisions and deferred taxation	16	64	91
	A. Provisions for liabilities and charges	160/5	48
	1. Pensions and similar obligations	160 18		25
	2. Taxation	161
	3. Major repairs and maintenance	162
	4. Other liabilities and charges	163/5	30	32
	B. Deferred taxation	168	16	34
	CREDITORS	17/49	289,296	159,246

	LIABILITIES (in thousands of €)	Codes	31/03/2012	31/12/2010
VIII.	Amounts payable after more than one year	17	38,668	45,814
	A. Financial debts	170/4	38,668	45,814
	1. Subordinated loans	170	36,448
	2. Unsubordinated debentures	171
	3. Leasing and other similar obligations	172
	4. Credit institutions	173		43,385
	5. Other loans	174	2,220	2,429
	B. Trade debts	175
	1. Suppliers	1750
	2. Bills of exchange payable	1751
	C. Advances received on contracts in progress	176
	D. Other amounts payable	178/9
IX.	Amounts payable within one year	42/48	248,983	113,106
	A. Current portion of amounts payable	42	86,335	10,976
	after more than one year
	B. Financial debts	43	41,918	18,633
	1. Credit institutions	430/8	40,000	16,655
	2. Other loans	439	1,918	1,978
	C. Trade debts	44	33,174	32,463
	1. Suppliers	440/4	33,174	32,463
	2. Bills of exchange payable	441
	D. Advances received on contracts in progress	46		60
	E. Taxes, remuneration and social security	45	2,089	1,759
	1. Taxes	450/3	133	231
	2. Remuneration and social security	454/9	1,955	1,528
	F. Other amounts payable	47/48	85,468	49,215
X.	Accrued charges and deferred income	492/3	1,645	326
	TOTAL LIABILITIES	10/49	456,441	288,869

INCOME STATEMENT

	INCOME STATEMENT (in thousands of €)	Codes	31/03/2012	31/12/2010
I.	Operating income	70/74	163,541	120,445
	A. Turnover	70	159,235	127,307
	B. Increase (+) ; Decrease (-) in stocks of finished goods. work and contracts in progress	71	-14	-10,913
	C. Own construction capitalised	72
	D. Other operating income	74	4,321	4,051
II.	Operating charges (-)	60/64	-154,860	-114,708
	A. Raw materials. consumables and goods for resale	60	117,434	84,611
	1. Purchases	600/8	116,924	85,377
	2. Increase (-) ; Decrease in stocks (+)	609	510	-766
	B. Services and other goods	61	15,894	13,277
	C. Remuneration, social security costs and pensions	62 13,407		10,261
	D. Depreciation of and other amounts written off formation expenses. intangible and tangible fixed assets	630	5,654	4,410
	E. Increase (+) ; Decrease (-) in amounts written off stocks. contracts in progress and trade debtors	631/4	14	195
	F. Increase (+) ; Decrease (-) in provisions for liabilities and charges	635/7	-10	-30
	G. Other operating charges	640/8	2,467	1,984
	H. Operating charges capitalised as reorganization
	costs (-)	649
III.	Operating profit (+)	70/64	8,682	5,737
	Operating loss (-)	64/70
IV.	Financial income	75	673	506
	A. Income from financial fixed assets	750
	B. Income from current assets	751	643	294
	C. Other financial income	752/9	30	212

	INCOME STATEMENT (in thousands of €)	Codes	31/03/2012	31/12/2010
V.	Financial charges (-)	65	-14,639	-6,023
	A. Interest and other debts charges	650	14,032	4,869
	B. Increase (+) ; Decrease (-) in amounts written off current assets other than mentioned under II	651	-500	40
	C. Other financial charges	652/9	1,107	1,114
VI.	Profit on ordinary activities before taxes (+)	70/65		220
	Loss on ordinary activities before taxes (-)	65/70	-5,284
VII.	Extraordinary income	76	281	29
	A. Adjustments to depreciation of and to other amounts written off intangible and tangible fixed assets	760
	B. Adjustments to amounts written of financial fixed assets	761
	C. Adjustments to provisions for extraordinary liabilities and charges	762
	D. Gain on disposal of fixed assets	763	281	29
	E. Other extraordinary income	764/9
VIII.	Extraordinary charges (-)	66	-1,435	-33
	A. Extraordinary depreciation of and extraordinary amounts written off formation expenses. intangible and tangible fixed assets	660
	B. Amounts written off financial fixed assets	661
	C. Provisions for extraordinary liabilities and charges	662
	D. Loss on disposal of fixed assets	663
	E. Other extraordinary charges	664/8	1,435	33
	F. Extraordinary charges capitalised as reorganization costs (-)	669

	INCOME STATEMENT (in thousands of €)	Codes	31/03/2012	31/12/2010
IX.	Profit for the period before taxes (+)	70/66		216
	Loss for the period before taxes (-)	66/70	-6,439
IX bis.	A. Transfer from deferred taxation (+)	780	17	17
	B. Transfer to deferred taxation (-)	680
X.	Income taxes (-)/(+)	67/77	-1	8
	A. Income taxes	670/3	3
	B. Adjustment of income taxes and write-back of tax provisions	77	2	8
XI.	Profit of the period (+)	70/67		241
	Loss of the period (-)	67/70	-6,423
XII.	Transfer from untaxed reserve (+)	789
	Transfer to untaxed reserve (-)	689
XIII.	Profit for the period available for appropriation (+)	70/68		241
	Loss for the period available for appropriation (-)	68/70	-6,423

APPROPRIATION ACCOUNT

	APPROPRIATION ACCOUNT (in thousands of €)	Codes	31/03/2012	31/12/2010
A.	Profit to be appropriated	70/69
	Loss to be appropriated (-)	69/70	-8,845	-2,422
	1. Profit for the period available for appropriation	70/68		241
	Loss for the period available for appropriation (-)	68/70	-6,423
	2. Profit brought forward	790
	Loss brought forward (-)	690	-2,422	-2,663
B.	Transfers from capital and reserves	791/2	0	0
	1. From capital and share premium account	791
	2. From reserves	792
C.	Transfers to capital and reserves (-)	691/2	0
	1. To capital and share premium account	691
	2. To legal reserve	6920
	3. To other reserves	6921
D.	Result to be carried forward	14	-8,845	-2,422
	1. Profit to be carried forward	693
	2. Loss to be carried forward (-)	793	-8,845	-2,422
E.	Shareholders' contribution in respect of losses	794	0	0
F.	Distribution of profit (-)	694/6	0	0
	1. Dividends	694
	2. Directors' emoluments	694
	3. Other allocations	696

Going concern

The company suffered a substantial loss over the last two financial years, which resulted in carried-forward losses as at 31 December 2010 and as at 31 March 2012. The Board of Directors drew up the accounts in continuity and justifies this on the basis of the proposed budgets and future plans. The Board of Directors is convinced that, after the capital increase, the equity is sufficiently high as to allow the activities to be organised in such a way that the profita-bility can be maintained in the future. In addition, it is convinced that the negotiations with the banks about the amendments to the covenants will be concluded successfully.

Auditors opinion:

The auditor has issued an unqualified audit opinion with an emphasis of matter paragraph on the statutory accounts of PinguinLutosa: "Without modifying the above opinion, we would like to draw your attention to the director's report, in which the board of directors discloses the ongoing negotiations with the bank consortium relative to the requested amendments to the existing financing agreement. Awaiting a final agreement with the banks consortium, the entire club deal financing is classified as short term debts. The board of directors expects to finalize such an agreement in the coming months. The financial statements have been established under the going concern assumption. This assumption to continue as a going concern is only valid in case the group successfully finalizes the ongoing negations and continues to have access to the required financing resources. Except for the classification of the club deal financing debts as short term debts, no adaptations have been made to the financial state- ments as to the valuation or the classification of certain balance sheet items which would be necessary if the company were no longer able to continue its activities".

FINANCIAL DEFINITIONS

Operating income	The sum of the categories 'sales', 'increase/decrease (-) in inventories work in progress and goods for resale' and 'other operating income'.
Cashflow	REBITDA – Capital investments + evolution working capital – income taxes
Cashflow Cover	Cashflow over the last 12 months / (net interest charges + capital payments of bank loans over the last 12 months).
EBIT	Result from operating activities.
EBITDA	Result before interests, taxes, depreciation charges and write-offs = Result from operating activities + write-offs + depreciation charges + write-offs on stock and commercial receivables + other receivables + non-recurring result (part related to the provisions)
Interest Cover	REBITDA over the last 12 months/ net interest charges over the last 12 months
Leverage	Net financial debt / REBITDA over the last 12 months.
Liquidity	Current assets / current liabilities.
Margin on operating income	Margin of the related category compared to operating income.
Non-recurring elements	Operating charges and revenu that are related to restructuring programs, impairment losses, environmen tal provisions or other events and transactions that are clearly distinct from the normal activities of the Group.
REBIT	EBIT + non-recurring result.
REBITDA	EBITDA + non-recurring result.
ROE	Return on equity (share of the Group + non-controlling interests). Result of the Group / equity (share of the Group + non-controlling interests).
Solvability	Equity (share of the Group + non-controlling interests) / balance sheet total.
Free operating cash flow	Cash flow from operating activities – cash flow from investing activities.

The photography of the Annual Financial Report.

Continuing from its introduction last year, the Annual Financial Report of PinguinLutosa again offers a platform to a renowned Belgian photographer to give a personal interpretation to a facet of our activities. In the previous edition the main suppliers, the growers, were portrayed by Michiel Hendryckx. This year Jimmy Kets brings our production staff into the picture.

Design and printing: www.colorstudio.be

Publisher: The New Mile BVBA

PinguinLutosa NV Romenstraat 3 Westrozebeke (Staden) Tel. +32 (051) 788 200 Fax +32 (051) 778 382

Website: www.pinguinlutosa.com

E-mail: [email protected]

Contact: Steven D'haene +32 (0)56/ 62 27 85

Only the Dutch version is the official version. The French and English versions are translations of the original Dutch version. The consolidated financial statements for the prolonged financial year ending as per 31 March 2012 are as well available in Dutch and French on our website www.pinguinlutosa.com.

AI assistant

Greenyard NV — Annual Report 2012

3957_10-k_2012-07-25_d99f1eaa-6cfc-4d07-90df-55f355c92b6b.pdf

Annua l fin a nci a l r e p o r t

CONSOLIDATED K E Y FIGURE S

Preface

Outlook 2012

Deep-frozen vegetables

Potatoes

Canning

Operational developments

Deep- frozen vegetable and convenie nce activities in Belgiu m

The harvest and the production.

Supply chain

Packaging activities

Internal organisation and integration

Deep- frozen vegetable activities in t h e Unit ed Kin gdo m

The harvest and the production

Supply chain

Packaging activities

Internal organisation and integration

Exchange rates

Deep- frozen vegetable and convenie nce activities of CECAB (´CECAB Activity´)

The harvest and the production

Supply chain

Packaging activities

Internal organisation and integration

Potato activities

The harvest and the production

Impact of the harvest on the margins

Supply Chain

Internal organisation & integration

The canning activities

The harvest and the production

Supply chain

Packaging activities

Internal organisation and integration

Sales network and marke ts

Further integration of Pinguin & Lutosa

C ustomers

Food Retail

Foodservice

Food Industry

PINGUINLUTOSA product portfolio

Vegetables and vegetable mixes

Aromatic herbs

Organic vegetables and vegetable mixes

Fruit

Pasta and rice

Convenience cuisine

Frozen chips

Potato specialities

Fresh refrigerated chips

Flakes

Organic potato products

Vegetables

Fruit

Potatoes

Convenience

Organic

Sustainability

Sustainable agriculture

Water

Energy

Packaging materials

Carbon footprint

Company strategy on the use of palm oil

Valorisation of secondary flows

human resources: people

FINANCIAL REPORT 2011-2012

CONSOLIDATED ANNUAL REPORT OF THE BOARD OF DIRECTORS

Key operating facts in 2011-2012

Introduction

Acquisition of Scana Noliko Group

Acquisition of CECAB Activity

Entrance of Agri Investment Fund

Capital increase

Strategic repositioning of the convenience activities

Harvests

Production and market conditions

Greenyard NV Annual Report 2012