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CORPORATE STRATEGY

The Corona-Lotus Strategy is based onthe particular competences thatCorona-Lotus has earned through itsstaff and organisation. These compe-tences put Corona-Lotus in a positionto operate in specific markets withsatisfactory added value, to producespecialities at a cost price that is com-petitive on the market and to build up aworkable organisation that can adaptitself to the great diversity of marketsand products.

The field where this expertise has beenacquired and that will be further expan-ded in the future, is the production andsale of specialities in the biscuit sector,namely caramelised biscuits, cakesand waffles-galettes. Other related spe-cialities can also be included in thisfield. These products are dominatedabove all by regional differences intaste, which require a specific produc-tion organisation and market approach.

Corona-Lotus is following a brand poli-cy within these product groups so thatconsumers recognise the Corona-Lotusproducts as fulfilling their expectations.In the first place this is realised in thebasic market, namely Benelux andFrance.

In Germany and Great Britain, the fieldof action is in the retail trade and in thespecific markets (hotels, restaurantsand catering), while these are very parti-cular market segments in the otherexport countries.

Acquisitions, mainly realised within thebasic market, are strenghtening theexisting product and market positions,when the products are the same orsimilar to those of Corona-Lotus. Inaddition the Corona-Lotus range can besupplemented with complementary pro-ducts by acquisitions. Effective integra-tion within Corona-Lotus’ activities and–organisation is of crucial importance inthis respect.

In addition specific forms of coopera-tion are established in order to be ableto play a specific role in other marketsas well.

In this way Corona-Lotus seeks to crea-te sufficient margins so that it is able tocreate the product and market dyna-mism which is necessary for a substan-tial and healthy growth.

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TABLE OF CONTENTS

Corporate Strategy 1Table of contents 3Company profile 5

1. Products and markets 52. Sales organisations 63. Production sites 64. General organisation 7

Corporate Governance 9Consolidated key figures 12Major events 13Group Structure 14Report of the Board of Directors 15Changes in the structure of the Group 15Activities in 1999 19

Growth strategy 19Sales and sales promotion 20New products 21Investments and industrial operations 21Research and development 22Environment 22Personnel and organisation 22Information integration 23Euro and the Year 2000 problem 23Evolution of costs 23Profitability 24

Important facts since 31 December 1999 25Prospects for 2000 27Results and proposal for division of profits 29Stock market information 31Other company information 33Board of Directors and Statutory Auditor 35Group management 35Financial statements 37General information 67

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New logistics center in Lokeren

Production Frangipane inLembeke

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1. Products and Markets

• Cakes and pastry

The most important group of productsfor Corona-Lotus is cakes and pastry.This product group includes many pro-ducts with the characteristic of a highmoisture content (up to 16%) and, con-sequently, a short shelf life (eight to tenweeks). These products are regional inorigin and are only slowly becomingbetter known outside their originalregion.

In Belgium, under the Corona brand,Corona-Lotus is the undisputed marketleader with Madeleine, Amico, Bolo andCorine selling as classic cakes, decora-ted and filled cakes such as Zebra, Midiand Crembo and Strawberry cake, littletarts such as Frangipane, Tartelette andSnowcake, and snack cakes such asMarshmallow and Bimbo.

In The Netherlands, Glacé from DeBruin is a unique and ubiquitous pro-duct. Enkhuizer’s Battenbergs, Jumbosand Swiss Rolls reinforce the position inThe Netherlands. After these,Jodekoeken of Enkhuizer Banket aregenerally known, so that overall theCorona-Lotus Group occupies a leadingposition in the market segment of cakesand pastry.

In France, Le Glazik, a specialisedbrand of Breton butter pastry, holds astrong position in Brittany. This positionis being further strengthened by addingthe products of Petit Breton. In thenorth of France and Paris, especiallyCorona Frangipane is well-known.

In Germany, United Kingdom and theCzech Republic, several specialities areenjoying rising sales.

• Waffles and galettes

Waffles and galettes have become animportant group of products forCorona-Lotus. Waffles, like cakes, con-tain up to 16% moisture and also havea limited shelf life. Principal members ofthe group include Liege Waffles, VanillaWaffles, Softwaffles (Brussels Waffles),chocolate-coated waffles and filled waffles. Galettes contain less moisture

and can be kept for four to six months.Fine galettes, coffee waffles (a specialityof de Kempen/les Campines) and familywaffles make up this product group.

Through the integration of Cremers –and, recently, of the products of Suzy –Corona-Lotus has a leading position inBelgium in waffles and galettes. InFrance, The Netherlands and Germanyand a number of other export countries,there is a strongly growing market forwaffles. Corona-Lotus has gained inthese three countries in this market avery important position.

With the agreement made withNationale Portefeuillemaatschappij(NPM), Corona-Lotus itself will pursue abrand-policy with a broad range of pro-ducts, both in Belgium and in the othercountries.

In addition, Interwaffles N.V. – as a joint-venture between NPM and Corona-Lotus – will provide for the productionand sale of waffles and galettes underthe private labels of the distributionfirms.

This puts Corona-Lotus in a position toprovide vigorous international expansionfor this important product group.

• Caramelised biscuits

The caramelised biscuit is a biscuit thatowes its taste to caramelisation duringthe baking process. Like most biscuits,it keeps for longer (six to nine months).

Lotus is the undisputed market leader inBelgium with Lotus Original, 6 Grains,Spink (caramelised biscuits with choco-late) and Santacookies.

In France, Lotus Caramelised biscuitscould take over an important place innorthern France and the Paris region.

Lotus Caramelised biscuits do well inmany countries in serving individually-wrapped with a cup of tea or coffee:Belgium, France, Germany, TheNetherlands, United Kingdom, Austria,the Czech Republic and several coun-tries in the Far East. From these con-sumption moments, we are stimulatinghome consumption: in Germany, theUnited Kingdom, and by means of catalog sales in the U.S.

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The Netherlands

• Enkhuizen, West Friesland, producesBattenbergs, Jumbos, Swiss Rolls,Jodekoeken and Sponge Fingers.

• The Amsterdam establishment DeBruin specialises in Glacé Originals andGlacé Petits Fondants.

Czech Republic

• Lotus Delta is a joint venture situatedin Kladno in the vicinity of Prague. From1999, production of several productsbegan: these are destined for the Czechand Slovak markets and may also sup-plement the Benelux and French mar-kets. This is a fallback position if thevolume is otherwise too small for pro-duction in Benelux or France.

Interwaffles

• This joint-venture produces wafflesand galettes under private labels. Afterthe fire at the factory in Buizingen inNovember 1999, production wasmoved to the factories at Alken and LaPascalou (Charleroi). A new factory isbeing built at Courcelles (NorthCharleroi), and will be in operation atthe beginning of 2001. The factories atAlken and La Pascalou will then be clo-sed down.

• Others

Enkhuizer Banket also has a strongposition in Sponge Fingers, which areprincipally sold in The Netherlands,United Kingdom and Belgium.

2. Sales Organisations.

Corona-Lotus products are consumedboth at home and when people are out.In order to have intense market influen-ce, Corona-Lotus has specialised salesteams for each market: the retail, cate-ring (large-scale use in schools, clinics,canteens) and food service (hotels,restaurants, cafes and gasstations). Thissystem is fully developed in Belgium. InThe Netherlands, we are present mainlyin retail and the horeca sector. In theFrench retail industry and in catering,there is a strong accent on northernFrance, the Paris region and Brittany.

For the German and Austrian market,Corona-Lotus has its own sales organi-sation which is growing rapidly.Recently, the company started its ownsales organisation for the Swiss market.

In the UK, various import firms havebeen active and are making a conside-rable turnover with the sale of Corona-Lotus products. In Spain, Italy, Israel,Japan, Korea, etc., Corona-Lotus callson specialised companies that are veryactive in certain markets.

In addition to sales to airline companiesby a specialised American company,Corona-Lotus has a joint venture in theUS that is selling Corona-Lotus pro-ducts as a mail order company (catalogsales).

In the Czech Republic and Slovakia thejoint-venture, Lotus-Delta, is active,operating in some markets through spe-cialised dealers.

Harry’s Benelux is a joint-venture withHarry’s, market leader in France in pre-

packed bakery products. In the Beneluxcountries, the company markets arange of bread products with a shelf-lifeof 28 to 42 days.

3. Production Sites

Corona-Lotus’s wide range of productsmeans that very varied product techno-logies are used. Getting to know,mastering and further developing thesedifferent product technologies is a con-stant challenge for Corona-Lotus. Inaddition, it is necessary to restrict thenumber of products and technologiesper production unit. Therefore, it isnecessary to develop several speciali-sed factories. Product redistribution hasbeen achieved by take-overs, wheresmaller establishments have been clo-sed down, and making overall gains inefficiency and cost management.

An overview of the production sites isgiven below:

Belgium

• In Kaprijke (Lembeke), in EastFlanders, the complete range ofCaramelised biscuits is produced. Thesmall tarts are also produced there(Frangipane, Tartelette, Snowcake,Strawberry cake, jam tarts).

• In Ghent (Oostakker), in EastFlanders, Madeleine, Amico, Zebra, Midiand Crembo are produced. This pro-duction site is also specialised in snackcakes (Marshmallow, Bimbo).

• In Meise, in Flemish Brabant, andTurnhout, Antwerp, waffles and galettes,with the exception of filled waffles, areproduced.

France

• Comines, North France, specialises infilled waffles, coconut products andFrangipane under the Cremers brand-name and private labels.

• In Briec-de-l’Odet, Brittany, Le Glazikproduces the Breton butter specialities:4/4 bars, Mini 4/4, Madeleine, Gâteauxbretons, galettes and palets and panca-kes. The production of Petit Breton hasbeen transferred to Le Glazik.

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4. General Organisation.

As the products of Corona-Lotus arelocal or require a very different approachfor each country, the basic choice fororganisation is a national organisation.In Belgium, The Netherlands andFrance, which make up the basic mar-ket and where the production units arelocated, the decisions concerning pro-duction, sales, transport and admi-nistration are taken by the nationalorganisation.

At group level, there are specialisedteams (corporate departments) that canonly be sufficiently developed at thislevel: quality and research, central tech-nical service, purchasing, IT, legal affairsand finance.

Certain activities have to take place atgroup level: exports, certain administra-tive tasks, communication and certainmarketing tasks.

The policy is also defined at group level,establishing basic principles to whichthe national organisations have to ans-wer.

Assortment wafflesunder the brand Suzy

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anceCORPORATE GOVERNANCE

Good organisation and operation of theBoard of Directors and the manage-ment, correct information to sharehol-ders and, in general, a competentmanagement of the company havebeen a constant concern of Corona-Lotus’ shareholders and the Board ofDirectors. Based on this we would liketo reveal Corona-Lotus’ current policy.

1. Composition of the Board ofDirectors

The Board of Directors consists perDecember, 31, 1999 of nine members:six of them respresent the majority sha-reholder N.V. Bisinvest: Karel Boone,president and managing director,Matthieu Boone, managing director,Stanislas Boone, Johan Boone, PieterBoone and Antoine Stevens. Karel andMatthieu Boone are responsible for day-to-day management. Until the 31st ofDecember 1999, Pieter Boone was incharge of IT, but stepped down fromCorona’s management team on the 1stof January 2000. In addition there arethree independent directors: ChrisDewulf, Paul De Keersmaeker and PaulLippens. The responsibilities of the non-executive directors are mentioned on p. 35 in the composition of the Board ofDirectors.

The mandates of Karel, Matthieu,Stanislas, Johan en Pieter Boone, ChrisDewulf and Paul Lippens come to anend at the General Meeting in May2005. The mandate of Antoine Stevensends on the 10th of May 2002 and thatof Paul De Keersmaeker on the 12th ofMay 2000.

The company’s Articles of Associationstate only that directors may be nomi-nated by the General Shareholders’Meeting – for example, by simple majo-rity of votes. The independent directorsare proposed by the Board of Directorsat the General Meeting. In this respectthe Board of Directors employ a set ofcriteria which they draw up beforehand.

2. Function of the Board ofDirectors.

The normal number of meetings is sixper year. This was also the case in1999.

The Board of Directors has, exceptwhat is legally determined, the followingresponsibilities: determining strategy,annual and medium term planning,basic organisation, supervision ofmanagement, appointment of perma-nent members of the executive commit-tee, decisions regarding the salaries ofthe members of this executive commit-tee, determination of the results and thevaluation rules, long-term financial com-mittments, mergers, acquisitions, strate-gic alliancies and disinvestments, publicrelations policy, stock options and sha-res reserved for members of staff. TheBoard of Directors is also responsiblefor organising good external and inter-nal control of the company.

The statutes specify that decisions ofthe Board of Directors are to be takenby a majority of the votes returned. Ifthere is a tie in the votes, the chairmanof the Board of Directors does not havea casting vote and the decision is to berejected.

The Board of Directors periodicallyreceives information about sales results,costs and profits, investments and allrelevant matters that enable it to forman assessment of the company’s pro-gress.

In addition, the necessary information isprovided on individual matters so thatdecisions can be taken on strategy,organisation, important financial under-takings, takeovers, and so on. A proce-dure has been agreed among the Boardof Directors which provides for the pos-sibility of calling in independent expertsat the expense of the company. Internalinformation provision for all members ofthe Board is also provided for in a pro-cedure approved by the Board ofDirectors.

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The Board of Directors has approvedrules for the exercise of directors functi-ons. They include a description of thetasks, the minimum number of mee-tings, the possibility of organising addi-tional meetings, drawing up the “orderof the day”, the necessary informationto be provided, the manner of decision-making, the rules relating to possibleconflicts of interest, the report, thereporting of committees and the possi-bility of acquiring additional information.

The remuneration and/or other benefitsgranted to the members of the Board ofDirectors are determined by theRemuneration Committee. For the 1999financial year, the fees paid to all direc-tors comes to 90,000 EUR in total.There is only one fixed fee and there areno other benefits in kind or options.

The executive directors, from the 1st ofJanuary 2000 onwards only theManaging Directors, will receive – inaddition to their director’s fee – a remu-neration to be specified by theRemuneration Committee. The commit-tee bases its decisions on comparativestudies relating to job-content. The feesare partly variable. The variable part isbased on the company’s progress andresults, in accordance with specific cri-teria. They also benefit from an optionplan, as do all management membersof the Group (see further on point 4under Day-to-Day Management).

The chairman of the Board of Directors isalso managing director. The presence offour non-executive directors and threeindependent directors on the Board ofDirectors forms a sufficient counterweight.

The activities of the Corona-Lotusgroup belong to the same line of busi-ness and form one whole. The nationalorganisations define how group policy isimplemented in practice. The Board ofDirectors is involved in group policy andany practical actions at group level withthe specific results of the separatenational organisations.

3. Committees set up by theBoard of Directors

The Board of Directors handles all mat-ters under its competence itself, exceptthose entrusted to the remunerationcommittee. As the number of membersis restricted to nine, and given themedium size of the company, othersubjects can be dealt with by the fullBoard of Directors.

The remuneration committee consists ofthe three independent directors: theyasses the remuneration policy for allmanagement members and specify thesalary of the most senior managers. In1999, the committee held one meeting.

4. Day-to-day management

The executive committee of the Groupis composed of the two managingdirectors, the managing directors of anational organisation, the director cor-porate finance, the secretary-generaland the director(s) who is (are) directlyinvolved in the subject under discus-sion.

This executive committee determinespolicy decisions at a group level, is res-ponsible for coordination, lays downjoint policy, decides on priorities at agroup level and also takes charge ofcorporate functions. The committeemeets as a rule every two weeks.

At the discretion of the executive com-mittee, certain subjects will be handledby a specific steering group. The mana-gement must be sufficiently representedon this steering group.

In Benelux and France, which constituteCorona-Lotus’ home market and whereCorona-Lotus is involved in manufac-turing, marketing and sales, there is anational organisation for each countryleaded by a management committee. It is responsible for all business activitiestaking place in these particular coun-tries.

The remuneration of the management(managing directors, managing directorsin a particular country, directors, mana-gers, in total thirty persons) is determin-ed in accordance with a system appro-ved by the Remuneration Committee.

Total remunerations in 1999 came to2,525,000 EUR. Of this, 133,000 EURis variable. The variable part is based onspecific criteria, such as the company’sresults, objectives achieved and assess-ment of the department.

From the 28th of October 1999, theregulations on share options gave fullsecurity about the social security statusof the options, after which an optionplan came into operation at Corona-Lotus at the end of 1999. The numberof options allocated in 1999 came to5,854 in total.

5. Policy concerning appro-priation of profits

With regard to the apportionnement ofthe profits the current policy is thatapproximately 30% of the current netprofit will be paid out in the form of divi-dends.

Because net results in 1999 differedconsiderably from the current net profit– and this mainly because of the dioxincrisis – the Board of Directors havedecided to maintain the dividendunchanged.

6. Relations with the majority shareholders

As stated on page 31, Bisinvest N.V.has, according to the transparency-declarations, 60% of Corona-Lotus sha-res. Bisinvest’s shares are incorporatedin the Stichting Administratiekantoor vanAandelen Bisinvest in The Netherlands.This Institution has a Board of Directorscomposed of twelve members. ThisBoard of Directors deals with subjectsthat are of direct interest to theInstitution, such as, for example, exerci-sing option rights and rules about sharetransfers.

In addition, a group of natural personswho each hold less than 5% of thevoting rights, possesses, according tothe transparency declarations, 9.78% ofCorona-Lotus shares. They deal in con-sultation with Bisinvest N.V. This groupdoes not have an active committee.

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Savings campaigncaramelised biscuits

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Consolidated key figures of Corona-Lotus in millions of EUR

1999 1998 1997 1996 1995

Turnover 119.48 102.83 88.45 76.33 73.55Depreciation (1) 6.92 6.07 5.68 4.64 4.36Operating result 6.71 5.78 6.07 4.96 4.49Financial result (2) (2.02) (1.32) (1.46) (0.52) (0.53)Depreciation on consolidation differences (0.75) (0.23) (0.66) (0.48) (0.48)Result on ordinary activities 4.69 4.46 4.61 4.44 3.96Extraordinary result (1.13) 0.24 (0.03) (0.03) (0.09)Result before taxation 3.56 4.70 4.58 4.39 3.86Taxes (1.22) (1.46) (1.33) (1.45) (1.34)Result of equity method 0.05 0.02 - - -Net result 2.38 3.26 3.25 2.93 2.51- Group’s share 2.32 3.20 3.22 2.88 2.47- Minority interests 0.06 0.05 0.03 0.05 0.04Current net result (3) 4.26 3.25 3.34 3.00 2.65Current net cash flow (4) 12.02 9.25 9.74 9.14 7.09Investments (5) 11.60 4.71 5.13 5.85 5.92Number of persons employed 1012 948 796 678 680

Consolidated key figures per share in EUR

1999 1998 1997 1996 1995

Current net cash flow 16.01 12.37 13.04 12.24 9.49 Current net result (3) 5.68 4.36 4.49 4.02 3.57 Net result 3.17 4.36 4.36 3.92 3.37 Net dividend- Ordinary share 1.04 1.04 0.99 0.92 0.87 - AFV-share (6) - - - 0.98 0.93 TOTAL NUMBER OF SHARES 750 537 746 750 746 750 746 750 746 750

(1) Not included depreciations on consolidation differences

(2) Included depreciations on consolidation differences

(3) Prior to depreciations on consolidation differences and exceptional results

(4) Current net cash flow is defined as current net result + depreciations + provisions and amounts written off

(5) Only investmens in tangible assets

(6) The AFV-shares have been cancelled at the extra ordinary general meeting of May, 9, 1997 as the tax advantages are expired

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999MAJOR EVENTS

1999

Apriltakeover of Petit Breton S.A.

Maytakeover of Biscuiterie Andi N.V.

June-Augustdioxin crisis

Auguststart of the operational activities of thelogistics center in Lokeren

Novemberagreement in principle concerning theparticipation in Suzy/Interwaffles andthe takeover of the clientele and thebrand Suzy

Decemberagreement in principle about the joint-venture Harry’s Benelux N.V.

Corona-Lotus France S.A. (FR)•holding France•sales France (except Brittany)

Biscuiterie Vander S.A. (FR)•production filled waffles, frangipane Cremers and privatelabels, coconut products

Biscuiterie Le Glazik S.A. (FR)•production Breton specialities•sales Brittany

Petit Breton (FR)•activities integrated in Biscuiterie LeGlazik

Jeurgens Banket-, Biscuit- en Chocoladefabriek B.V. (NL)•production sponge fingers

Swart Vicomte Ltd (GB)•sales products Enkhuizer Banket in Great-Britain

Corona-Lotus, Inc. (US)•sales U.S.A.

Lotus-Delta a.s. (CZ)•production cakes•sales Czech Republik and Slovakia

Corona-Lotus Nederland B.V. (NL)•production: -glacé’s

-jodekoeken, battenbergs, jumbos, swiss rolls, sponge fingers

•sales Netherlands

Corona-Lotus GmbH (DE)•sales Germany and Austria

Corona-Lotus Schweiz A.G. (CH)•sales Switzerland

Cremers N.V. (BE)•production galettes and waffles

Biscuiterie Ribert N.V. (BE)•production waffles

Margarinerie Hinnekens N.V. (BE)•production margarines and specialized fats

Harry’s Benelux N.V. (BE)•sales pre-packed bakery products Benelux

Prilabis N.V. (BE)•sales specific markets

Corona-Lotus Réassurances S.A. (LU)•reinsurance company

Biscuiterie Andi N.V. (BE)•activities integrated in the Group

Corona-Lotus N.V. (BE)•parent company of the Group•production: -caramelised biscuits

-cake specialities-cakes

•sales Belgium•logistics center Belgium

99,9 %

99,6 %

99,9 %

33,25 %

100 %

50 %

100 %

100 %

100 %

50 %

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100 %

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35 % 20 %

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Group Structure

The structure of the Corona-Lotus Group at April15, 2000 is as follows:

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Changes in the structure of theGroup

In 1999

During the course of 1999 Corona-Lotus accomplished two takeovers(Petit Breton S.A. and Biscuiterie AndiN.V.), and the previously agreed jointventure, Lotus-Delta, was set up inCzechia.

In addition agreements in principle wereconcluded at the end of 1999 relatingto the participation in Suzy/Interwafflesand the takeover of the clientele andthe brand Suzy, as well as the establish-ment of a joint venture in Belgium,Harry’s Benelux N.V. These two agree-ments have no effect on the groupstructure as of the end of 1999.

April Takeover of Petit Breton S.A.

At the beginning of April 1999, Corona-Lotus, through its subsidiary BiscuiterieLe Glazik S.A., took over all the sharesof Petit Breton S.A. Petit Breton is situ-ated in Pont Aven (Brittany) and produ-ces typical Breton butter products likedemi-lune quatre quarts, gâteaux bre-tons, Kouign Amann and pancakes.The turnover in 1998 was 2.85 millionEUR and was mostly achieved inBrittany, the Paris region and Belgium.Petit Breton employed 31 people.

The Petit Breton products strengthenthe position of Corona-Lotus in Bretonbutter products. Through our own com-mercial organisations the growth of thesales of the Petit Breton products canbe developed both in Brittany as well asin the other regions of France and abroad.

The Petit Breton organisation was inte-grated into Biscuiterie Le Glazik. A pha-sed integration plan was set up for theproduction so that in the future allBreton products will be manufactured inthe Le Glazik factory.

May Takeover of Biscuiterie Andi N.V.

The end of May saw the takeover ofBiscuiterie Andi N.V., which is speciali-sed in frangipanes under private labeland situated in Erpe-Mere (EastFlanders, Belgium). The turnover in1998 was 1.93 million EUR and wasmainly achieved in Belgium. Andiemployed 17 people.

As a result of this takeover the frangipa-ne will become an even more importantproduct in the Corona-Lotus range. Themarket for frangipanes is growing inBelgium, whilst considerable increasescould still be achieved in France andEngland.

The organisation (sales and administra-tion) of Andi was integrated intoCorona-Lotus. The production wastransferred to Biscuiterie Vander inComines, where Cremers Frangipane isalready produced.

August Merger with Cardinael B.V.B.A.

In order to simplify the structure evenmore, a merger by acquisition tookplace of Biscuiterie Cardinael B.V.B.A.by Corona-Lotus N.V at the end ofAugust 1999, given that the activities ofBiscuiterie Cardinael B.V.B.A. have beenfully integrated into Corona-Lotus N.V.since December 1998.

November Lotus-Delta a.s. was set up (Czechia)

For administrative reasons the joint ven-ture company in Czechia was only esta-blished on 16 November 1999. Corona-Lotus N.V. and Delta Pekarny Kladnoa.s. each holds a 50% participation inLotus-Delta.

Corona-Lotus has chosen this strategicoption because it wants to be active inthe growth market offered by Centraland Eastern Europe, using local pro-duction of cakes and waffles and withthe aid of a good sales organisation asthe basis.

Production started in January 1999. Atthe end of April 2000 a second line willbe made operational.

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November Agreement in principle concerningSuzy N.V./joint venture InterwafflesN.V.

On 25 November 1999 Corona-Lotustook an important step in its expansionplans. On that day Corona-Lotus andthe Nationale PortefeuillemaatschappijN.V. (NPM) made an agreement in prin-ciple with respect to the activities of theSuzy and Interwaffels companies. Theimmediate cause for the discussionabout a possible collaboration was thefire on 10 November 1999, whichdestroyed the entire production site ofInterwaffles in Buizingen.

The agreement consisted of the follo-wing important points:

• Corona-Lotus will take a 50% partici-pation in Interwaffles N.V./ Suzy N.V..The joint venture will exploit a new fac-tory to be built at Courcelles (to thenorth of Charleroi). It will produce waf-fles and galettes under private labels.The takeover of half of Interwaffles’ sha-res will be effectuated in the second tri-mester of 2000.

• Corona-Lotus buys the clientele andthe name of Suzy. The production ofwaffles and galettes under the brandname Suzy moves to the Corona-Lotusfactories in Meise and Turnhout.

In the meantime as from 1 January2000, due to operational reasons, thesales and logistics of waffles/galettesunder the Suzy brand name have beenintegrated into that of Corona-Lotus.

December Agreement in principle about thejoint venture Harry’s Benelux N.V.

At the end of December 1999 Corona-Lotus reached an agreement withHarry’s (France) in relation to the esta-blishment of a joint venture, Harry’sBenelux. This joint venture will market arange of bakery products in theBenelux, with a shelf life between 28and 42 days.

Harry’s (France) is already market leaderin France and has seen a rapid growthin other European countries.

Corona-Lotus wishes through this parti-cipation to take a structural step in theshorter shelf life products segment thatstill has a strong growth potential in theBenelux.

Harry’s Benelux will draw up the com-mercial plan, decide about the range ofproducts and references, set publicitybudgets and such like. It will moreoveruse the Corona-Louts infrastructure inthe field of logistics, sales, invoicing andadministration.

Between 01/01/2000 and15/04/2000

February Establishment of Harry’s Benelux N.V.

The establishment of Harry’s BeneluxN.V. took place at the beginning ofFebruary 2000.Corona-Lotus and Harry’s each partici-pate for 50%. The company is nowoperational.

February Takeover of La Pascalou by the jointventure Interwaffles

The joint venture Interwaffles took overthe shares of La Pascalou at the begin-ning of February. La Pascalou is amanufacturer and distributor of wafflesand galettes, principally under privatelabels. The production is situated inCouillet (to the south of Charleroi), theturnover in 1999 was 6.69 million EURand about 50 people are employedthere.

The production of La Pascalou will beintegrated into the new Interwaffles fac-tory in Courcelles as soon as this beco-mes operational (beginning 2001). In theintervening period the production capa-city of La Pascalou will be used to sup-ply the clientele for the moment. Theadministration and sales of La Pascalouwill be integrated into Interwaffles assoon as possible.

With this takeover Corona-Lotus andthe Nationale Portefeuillemaatschappijwant to take a new step in further deve-loping the market for waffles in Belgiumand abroad.

17

March Establishment of Corona-LotusSchweiz AG

At the beginning of March 2000 a sepa-rate sales organisation was started inSwitzerland with the intention of gettingmore to grips with the Swiss retail andcatering markets. Corona-Lotus hasbeen selling a number of products forseveral years on the Swiss market (spe-culoos 1 piece and 250 gr., galettes,jam tartlets and several sorts of cake).

March Simplification of the legal structure inthe Netherlands

In order to simplify the complex legalstructure that arose within the Dutchnational organisation, after the takeoverof Vicomte at the end of 1998, it wasdecided to merge the companies com-prising Biscuitfabriek Vicomte B.V.,Swart Vicomte B.V., Enkhuizer BanketB.V. and De Bruin’s Banketfabriek B.V.with Corona-Lotus International B.V.and to change the name of the lastnamed into Corona-Lotus Nederland B.V.

Corona-Lotus Nederland B.V. will thenbe responsible for the production in twofactories of glacés, jodekoeken, batten-bergs, jumbos, swiss rolls and spongefingers in two factories, and in addition,will carry responsibility for the sales ofthe Corona-Lotus Group products inthe Netherlands.

Assortment prepackedbakery-products ofHarry’s Benelux

18

ACTIVITIES IN 1999

Growth strategy

Corona-Lotus has decided to maintaina brand policy in certain well definedproduct groups: caramelised bis-cuits, cakes (pastry) and waffles-galettes. To achieve this, a leadingposition is required in every product-group.

In speculoos this is achieved withoutacquisitions and this product is in-creasingly better known outsideBelgium.

Corona-Lotus has acquired a leadingposition in waffles-galettes in particularthrough the acquisitions of recent years:Cremers, Suzy and the joint ventureInterwaffles.

There are strong regional differences inthe use of cakes and pastry. This is whyit is necessary to build up for eachcountry, a range with as basis severalstrong products originating from thecountry or region. Through acquisitionsCorona-Lotus has expanded its productrange and the quantities per producthave increased dramatically. The strongbrand position in Belgium was improvedfurther through this. In the NetherlandsCorona-Lotus now plays a leading role,whilst in France a major step has beentaken in that direction. In sequence weare talking about the following acquisi-tions: De Bruin (Amsterdam), Le Glazik(Brittany), Vander (Northern France),Croquembouche (Brittany), Cremers(Belgium), Cardinael (Belgium),Enkhuizer Banket (The Netherlands),Petit Breton (Brittany) and Andi(Belgium).

This produces a strong growth in salesin the base countries. In the space ofthree years (from 1996 to 1999) thesales in Belgium rose by 37% to 49 mil-lion EUR, those in the Netherlands by134% to 24 million EUR and those inFrance by 31% to 23 million EUR.

The range is in the three productgroups fairly extensive so that, depen-ding on the consumer’s choice in eachcountry, apart from Belgium, theNetherlands and France, a stronggrowth in sales is achieved. In GreatBritain the sales rose between 1996

Production demi-lune quatre quarts in LeGlazik

19

Act

ivit

ies

in 1

999and 1999 by 70% to 11 million EUR

and in Germany by 231% to 5.3 millionEUR. In the other export countries 8million EUR was achieved which repre-sents a rise of 24%.

In that three-year period the totalturnover rose by 54% to 119.5 mil-lion EUR.

The sale of the products of the compa-nies taken over will be integrated intothe sales policy of Corona-Lotus. Therange that is to be carried under a realbrand name policy will be extendedafter some adjustments. This brandpolicy will be adjusted to the circum-stances applying to each sales organi-sation and will be supported by com-munications and promotion policy:direct marketing, catalog sales andmaking certain products well knownthrough a strong presence in the cate-ring and horeca.This integration is usually accompaniedwith the loss of part of the turnover ofthe company taken over, in part throughrationalisation of the number of productvarieties. This is however well compen-sated by the increase created throughthe dynamic sales strategy.

The growth policy is also accompaniedby better utilisation of production linesand factories. This is why it was neces-sary to close smaller production cen-tres: the Cremers factory in Lier,Cardinael, Petit Breton and Andi. Thesame will befall the factories of Alkenand La Pascalou whenever the newInterwaffles factory becomes operatio-nal in Courcelles. At the same time afterthe takeovers, the product range of cer-tain factories was rearranged.

This growth policy will be sustained sothat the position per market and thevolumes per product and for the wholegroup will continue to rise.

Quality management

As a producer of branded products it isessential that the quality of the productsis a cut above that of the market average and that the quality level isconstantly achieved.

Corona-Lotus has, to that end, set up asystem of quality management that isapplied in all production centres. Foreach topic clear guidelines have beenlaid down: • selection criteria for suppliers• specifications and control systems

for raw materials and packaging• description of the production

process • quality control of finished products• hygiene regulations• treatment of any complaints.

The entire system is subject to an inter-nal audit by our quality control depart-ment. In addition there is already anexternal certification system in place formost of the production sites. For theremainder a schedule will be set up inthe near future.

This quality system is also the bestapproach to ensuring the safety of theproducts. That is how we were able toestablish that not a single product ofours was contaminated with dioxin orPCB. Yet the experience of the dioxincrisis has encouraged us to includeeven more elements in our monitoringsystem. At the same time a completeplan was set up to be able to achievetraceability of all the ingredients used. In collaboration with the suppliers thesafety plan will continue to be improved.

20

Sales and sales promotion

The consolidated turnover of Corona-Lotus rose in 1999 by 16.2% to 119.48 million EUR. The growth hasbeen influenced by important eventsthat occurred in 1999.

The companies that were taken over in1998 and 1999 have now been inclu-ded in the consolidated turnover:Enkhuizer Banket (Vicomte) for twelvemonths instead of just three months in1998 and Petit Breton and Andi for thewhole of 1999. In addition the turnoverof the companies taken over has de-creased because as a consequence ofthe integration, certain products orvarieties have no longer been produced.

For the Belgian food in general and cer-tainly for foodstuffs containing, for exam-ple, eggs, 1999 was characterised bythe dioxin crisis. It has now been firmlyestablished, partly through more than300 laboratory analyses, that the pro-ducts made by Corona-Lotus were andare still safe. Nevertheless as a result of

the confusion and contradictory govern-ment regulations, both at the Belgianand European levels, turnover was lostand goods were destroyed and all sortsof costs were incurred. The loss in turn-over for Corona-Lotus can be estimatedat more than 5 million EUR.

In addition we can state that at the endof 1999 the normal level of turnover hadbeen regained in all markets. InBelgium, the Netherlands and France aswell as in the export markets the turn-over once again witnessed growth.

The result of all these elements providesthe following developments in turnover:

The turnover in Belgium in 1999amounted to 49 million EUR. In com-parison to 1998, this is an increase of2.9%.

The increase in turnover in theNetherlands is even more important,62% compared to 1998. The inclusionof Enkhuizer Banket for twelve monthsinstead of three months and the rise insales of Glacé have caused this growth.The sales organisations of De Bruin’sBanketfabriek, Enkhuizer Banket and ofCremers in the Netherlands were com-bined to form one single powerful orga-nisation with an important turnover.

The turnover evolution has also struckin France where the turnover has risenby 9% compared to 1998. The salesorganisation of Petit Breton was inte-grated into that of Biscuiterie Le Glazik.The level of turnover permits us tomake the sales organisation even morespecialised.

In Germany too, the turnover also rosestrongly so that the sales organisationwas able to be strengthened further.

In Great Britain, Corona-Lotus sellsthrough a network of different speciali-sed sales organisations. Turnover hascontinued to rise.

Sales in the USA, expressed in dollarshave risen by 19%. Given that this yearcertain costs, which have been chargedon, have not been included in the turn-over, a lower turnover is calculated intothe consolidated figures.

1995

1996

1997

1998

1999119.48

102.83

88.45

76.33

73.55

70 80 90 100 110 120

EVOLUTION OF SALES - in millions of EUR

België:

41,0

%

Nederland: 20,0 %Fr

ankr

ijk: 1

9,0

%

Duitsland: 4,4 %

UK: 9,1 %

USA: 3,8 %

Andere: 2,7 %

GEOGRAPHICAL SALESDISTRIBUTION

Production Madeleine inOostakker

Belgium: 41.0 %Others: 2.7 %USA: 3.8 %

UK: 9.1 %

Germany: 4.4 %

Fran

ce: 1

9.0

%

Netherlands: 20.0 %

21

In South-East Asia the sales havebeen slowly recovering after the econo-mic crisis in 1998 and at the beginningof 1999, and after the effects of thedioxin crisis that were also felt in thosecountries. At the end of 1999 the saleswere back to the level prior to thesetwo crises. Expectations are that vari-ous countries in this region have startedon a new period of growth which willprobably provide a more healthy basisthan was previously the case.

The remaining markets continue ingeneral to show positive development.

New products

Given that Corona-Lotus has, in the lastfew years, taken over quite a number ofcompanies, the range of products hasbeen greatly expanded and strengthe-ned (with Cremers galettes, jam tartlets,jodekoeken, jumbos, swiss rolls, spon-ge fingers, demi-lune quatre-quarts,pancakes, and various sorts of waffles).

This has resulted in a change ofemphasis in our policy concerning thedevelopment of new products. Corona-Lotus does want to develop new pro-ducts but should now be giving moreattention proportionally to the productsfrom the companies it has taken over.

In August 1999 the cake assortmentwas expanded with the strawberrycake. The new product consists of amoist, light sponge with a layer of finestrawberry jam.

Investments and industrial operations

The company’s investments in materialfixed assets reached in 1999 an histori-cally high sum: 11.3 million EUR asopposed to 4.71 million EUR in 1998.This important increase is principallydue to the construction of the logisticscenter in Lokeren, which became ope-rational in August 1999.

A few other important investment pro-jects involved:• the renewal of a production building inLembeke• a new manufacturing line for specu-loos• the construction of a warehouse andof a production line for demi-lune quatrequart products in Briec de l’Odet (LeGlazik)• the ERP project: mainly licences forsoftware, hardware and external consul-tancy • silos for flour and sugar in Meise• plots of land at the facilities inEnkhuizen and Oostakker.

In addition a large number of invest-ments were realised which were inten-ded to further modernise and automatethe production or which promoted thequality, hygiene and safety in the pro-duction facilities.As occurred in 1998, the following wasachieved in 1999, particularly as a con-sequence of takeovers, rearrangementof production lines and logistics:• closure of the production units of PetitBreton and transfer of the production toLe Glazik• closure of the Biscuiterie Andi factoryin Erpe-Mere and transfer of the pro-duction of frangipanes Andi to Comines• transfer of the production of Cremersbattenbergs to Enkhuizen• removal of the logistic activities fromOostakker and from Lembeke toLokeren• rearrangement of the production ofcake specialities in Lembeke.

After starting up at the end of 1998, themost important part of the constructionwork for the new logistics centre atLokeren (alongside the E17 motorway)took place in 1999. The operationalactivities of the logistics center startedat the beginning of August 1999. This

facility provides Corona-Lotus with aspacious modern distribution warehou-se from where the customers inBelgium and the export markets can besupplied in an efficient manner. Giventhat all finished products are now firstgrouped in one single location and thatat the beginning of 2000 the administra-tive staff whose activities are closelyrelated to the goods flows (especiallytaking orders), were also moved toLokeren, then the administrative sup-port will be simpler.

In the joint venture in formation Lotus-Delta in Czechia the necessary prepara-tions were being made especially in thesecond half of 1998 in order to start upproduction: an existing building wasrenovated and provided with newequipment and a first production line forcertain types of cakes was installed.Production started in January 1999. Inthe course of 1999 the construction ofa second line for the manufacture ofmini-frangipanes was started. This linewill become operational in April–May2000. In Lotus-Delta products will bemanufactured for the local market and

New product: strawberry cake

Some staff members logistics Lokeren

1995

1996

1997

1998

1999 11.3

4.71

5.13

5.85

5.92

0 5 10

INVESTMENTS - in millions of EUR

22

several products will be made for thebasic Corona-Lotus markets, of whichthe quantities are too small to be produ-ced competitively in the factories inBelgium, the Netherlands or France.

Research and Development

In two areas, Corona-Lotus is trying toplay a prominent role in its sector, byco-ordinating its expertise and targetingits projects: in investigating productimprovements / new products andtechnical applications.

In both domains, the emphasis is al-ways placed on the own responsibilityof the factory itself to manage andimprove technology and the techniques.Beside it, Corona-Lotus has an investi-gating department and a central techni-cal department that bring together theknowledge and experience present inthe various factories and add their ownknowledge and experience.This will make it possible to undertakelarge projects or projects requiring spe-cialising know-how.

Environment

Corona-Lotus’ activities affect the envi-ronment in mainly in two domains,these being packaging and the exploita-tion of the factories. In both domainsCorona-Lotus is continuing to work ondecreasing its environmental impact.

Environment and packaging

Corona-Lotus continues to seek oppor-tunities for limiting the amount of packa-ging and for materials that in addition tomeeting safety, reliability and consumerrequirements are also environmentallyfriendly. The responsibility for this lieswith the person responsible for marke-ting so that every endeavour will betake to achieve these goals when deve-loping or adapting products.

Corona-Lotus has always been infavour of creating workable systemsthrough collaboration between the diffe-rent actors so that the management ofthe packaging waste is part of goodenvironmental management. Corona-Lotus continues to actively work onachieving this. In Germany, Belgium andFrance the company is required to take

back the packaging waste. This isachieved through collaboration withmanufacturers of disposables, and thedistribution and packaging industries:Duales-System in Germany, Fost Plus inBelgium and Eco-Emballages in France.

The Dutch companies participate in theCovenant Packaging II, wherebythrough prevention attempts are madeto achieve certain objectives relating tore-use, recycling and energy generation.The obligation as a company to contri-bute to minimising the environmentaloverload caused by packaging wastewithin the Dutch marker fits into ourpolicy.

Environment and exploitation

In this domain various environmentalaspects come to light. These are syste-matically investigated and appropriatemeasures taken so that negative effectsare removed or can be reduced. The waste products are attacked accor-ding to sort. In most sites a water purifi-cation station is already in operation oran investigation is being carried out intothe best solutions so that considerationwill also be taken with the governmentrules applying to that country. A waterpurification station will be built in 2000for the site of Comines. For the otherwaste products maximum recovery isthe solution sought (eg paper, carton) orincineration in specialised centres (eg packaging foils).

Any possible nuisance for the local resi-dents is systematically investigated andany possible solutions are applied. Thechanges requested in the zoning plansin Oostakker and Lembeke could con-tribute to a reduction in the nuisancewhen both these sites are expandedfurther. As the logistics center inLokeren is now operational, the trafficnuisance in Lembeke and Oostakkerhas been considerable reduced.

Personnel and organisation

Personnel developments

At the end of 1999 the Corona-LotusGroup employed 1,012 members ofstaff. This is an increase of 64 personsin a single year. The takeovers in 1999are the most important cause of this

rise. The number of staff working part-time increased from 257 to 274.

The organisation is continuing to deve-lop dynamically. The many takeovers inthe last three years and those joint ven-tures that have been set up have resul-ted in many adjustments. This leads toan improved structure for the organisa-tion:• the organisations per country can beexpanded better• the corporate departments haveclearer functions and a better speciali-sation • the entire organisation has only grownslightly compared to the strong growthin turnover

Employee’s participation

Belgian legislation has produced twoimportant regulations for the benefit ofpersonnel participation. Corona-Lotushas thus been given sufficient opportu-nity to draw up concrete proposals withsufficient legal security so that all mem-bers of staff who wish to do so can beinvolved in the growth of the company.

All members of staff were offered theopportunity to subscribe to an increasein capital that was restricted to the per-sonnel. The registration price was 51.5EUR (20% lower than the stock exchan-ge share price). In total 3,787 new sha-res were issued which are blocked for aperiod of 5 years (from the date ofregistration).

In addition an option plan was drawnup for the management. A number ofshare options will be made available

Staff membersadministration France

23

1995

1996

1997

1998

1999 1012738

Full-time

274

948691

Part-time

257

796637159

678514164

680523157

600400200 800 1000 1200

PERSONNEL

each year on the basis of well-definedcriteria (company results and thedepartment results). The entire numberof options per year will be no higher onaverage than 1% of the total number ofshares. In 1999 a total of 5,854 optionswere issued.

Information integration and ERP

Corona-Lotus has, like every organisa-tion, a need to streamline its processesand to make data more uniform so thatadministrative back-up of all activitiesand unambiguous reporting of costs,incomes and results can be more effec-tive. This task was made more arduousthrough the increasing number of pro-duction sites and sales organisationsand through the fact that the compa-nies taken over each had their ownadministrative system, supported by itsown computer system.

On the basis of a preliminary study thedecision to adopt an ERP package(Enterprise Resource Planning) wasmade at the end of 1998, a systemsuch as used or planned for use inmany companies. The DirectorCorporate Finance, leads this sizeableproject with a team of employees whowere mostly freed from other duties forthis work. In each activity domain themethod of working is studied and adap-ted to the ERP approach. This is possi-ble through intensive collaboration be-tween the manager(s) responsible forthe domain and the ERP staff. To achie-ve a good integration of all countryorganisations, the ERP team also inclu-des a management member from theNetherlands and from France. Externalspecialists who, on the one hand, provi-

de the concept and on the other handensure the implementation together withthe internal team are advising on theentire project.

The entire investment is spread overthree years, 1999, 2000 and 2001, andin addition to the licences for the SAPpackages also consists of the purchaseof new hardware, the costs of the exter-nal consultancy and the cost of theteam freed from other duties.

Euro and the Year 2000 problem

Euro

Corona-Lotus has been preparing tho-roughly and pro-actively for the changeto the European single currency. Giventhe diversity of situations within theGroup it was decided that a gradualprocess of change was best.Several examples of applications in thevarious services: • clients who want to, can be invoicedand can pay in Euro • the accounts and the internal report-ing of the companies in the Group willbe changed over to the Euro on 31december 2000 • the employees and the employees’councils in the Corona-Lotus Groupsites were informed as from 5 October1998 and an update on the situationwas distributed through various chan-nels (internal communication systemsand in-house staff journal)• since 1 January 1999 the pay slips foremployees in Belgium have stated thenet amount of the wages in Euro as well • the Corona-Lotus shares have beenlisted on the Brussels Stock Exchangein Euro since 1 January 1999 • the 1998 annual report was still drawnup in Belgian franks. Key figures, con-solidated balance and income state-ment were also given in Euro for thefirst time • the current annual report for 1999 isthe first to be expressed solely in Euro.

Year 2000 problem

In the course of 1997 Corona-Lotushad drawn up a plan for inventorying allsystems that could be affected by theYear 2000 problem and for listing solu-tions to this problem. This inventory notonly looked at the classic computerapplications but also at a great manyapplications in the production processsuch as PLC controls.Thanks to very thorough preparationsand the intense efforts of a considerablenumber of employees we were able atthe start of January 2000 to concludethat the operation had passed without ahitch and that no faults had occurred inthe industrial processes.

Development of costs

The raw materials prices remained atthe same level as 1998 or showed aslight fall. The energy prices did riseconsiderably whilst the packagingmaterials showed price levels similar tothose of 1998.

Services and other goods rose slightlyfaster than the turnover. An importantcomponent in this is formed by themarketing costs for target-orientedcommunication, such as direct marke-ting and other sales campaigns.

The personnel costs showed a consi-derable rise, increasing a few percenta-ges above the increase in turnover. Thislarge increase can be attributed in full tothe dioxin crisis. This was responsible,on the one hand, for a large loss inturnover, whilst on the other hand, anumber of fixed personnel costs conti-nued to be incurred.

The depreciation in fixed assets rosefrom 6.07 million EUR to 6.92 millionEUR. This increase is especially relatedto the depreciations associated with thecompanies taken over at the end of1998 and in 1999.

The financial costs also rose strongly.This is principally because the compa-nies taken over were financed throughloans. On the other hand, there was afurther slight fall in the interest rates.The depreciation on the consolidationdifferences rose from 0.23 to 0.75 mil-lion EUR. The difference compared tothe previous year can be attributed tothe inclusion in the consolidation for afull year of Enkhuizer Banket and to thetakeovers of Petit Breton and BiscuiterieAndi.

The exceptional result is much affec-ted by the dioxin crisis and the obliga-tory repayment of Maribel.

All costs and compensation paymentslinked to the dioxin crisis were bookedas extraordinary charges and incomes.The specific dioxin-related costsamounted to about 3 million EUR.These were especially related to loss ofprofit margin, goods returned by clientswith return and destruction costs, costsof PCB and dioxin analyses. Thanks togood insurance contracts that coversuch circumstances, held with our ownre-insurance company, Corona-LotusRéassurances, about 2 million EUR wasable to be recuperated. We expect thatthe government will probably pay out

24

Current net profit

Depreciation + amounts written off + provisions forliabilities and charges

EVOLUTION OF CURRENT NET CASH FLOWin millions of EUR

1995

1996

1997

1998

1999 48.31

40.13

37.26

33.22

31.95

30 40 50

EVOLUTION OF ADDED VALUE in millions of EUR

Financial ratios In % of operating income

1999 1998 1997 1996 1995

Addes value 39.24 38.60 41.52 42.46 42.74Current net cash flow 9.76 8.90 10.85 11.68 9.48 Current net profit 3.46 3.13 3.73 3.85 3.56

Financial ratios In % of added value

Personnel expenses 67.86 68.51 63.96 63.78 69.70Depreciations 14.33 15.11 15.22 13.93 13.68Taxes 2.50 3.37 3.58 4.36 4.21Net financial charges 2.63 2.71 3.74 1.46 1.52Current net profit 8.83 8.10 8.98 9.06 8.32

very little in compensation, especiallybecause the Flemish government,empowered with respect to industry(the non-agricultural industries), doesnot wish to become involved in the con-sequences of the dioxin crisis.

A second important element in theextraordinary charges is the obligatoryrepayment to the government of theMaribel (involving the reduction of socialpremiums on the wages of workers inthe period between 1993 and 1997).The reason for this is the judgementmade against our federal governmentby the European Union ordering it toreclaim the awarded reduction in socialpremiums from the companies. Thecosts of this amounted to 300,000EUR. At the time of the announcementof the half-year results for 1999 on 21September 1999, this accounting obli-gation was not yet established.

Profitability

In 1999 the Corona-Lotus growth policywas continued through takeovers andthe integration of the companies takenover into the full organisation of Corona-Lotus.

Given that with a takeover some turn-over is generally lost through rationalisa-tion of the product range and as aresult of integration costs, then thebeneficial effects of a takeover usuallyonly show in the results a year or twolater. Notwithstanding these basicpoints, important increases are visible inthis field in 1999. The company resultsrose by 16% and showed a ratio of5.6% in relation to the operating inco-me.

1995

1996

1997

1998

1999 12.024.267.76

9.253.256.00

9.743.346.40

9.143.006.14

7.092.654.44

864 10 12

25

Imp

ort

ant

fact

s si

nce

31 D

ecem

ber

199

9IMPORTANT FACTS SINCE 31DECEMBER 1999

As from 1 January 2000 sales of wafflesproducts under the brand name of Suzywere included in the Corona-Lotusorganisation.

In February 2000 the joint ventureInterwaffles took over the company LaPascalou that is specialised in the pro-duction of waffles under private labels.

At the start of February 2000 the jointventure Harry’s Benelux N.V. was setup.

In March 2000 Corona-Lotus SchweizAG was set up in order to get a bettergrasp on the Swiss market.

In the second quarter of 2000 theagreement in principle made inNovember 1999 between Corona-Lotusand NPM relating to the participation inthe joint venture Interwaffles N.V./SuzyN.V. and the takeover of the clienteleand the brand Suzy, will be concretized.

In the second half of 2000 BiscuiterieRibert N.V. will merge with Cremers N.V.It is the intention that the structureshould be simplified and adjusted to theoperational production activities.

The 1999 results are obviously highlynegatively influenced by the dioxin cri-sis. In comparison to a turnover budge-ted in May 1999 at 125 million EUR, a 5 million EUR turnover loss was registe-red. Moreover the non-recoverable netcosts of the dioxin crisis amounted to 1million EUR and, as was already explai-ned above, this was included in theextraordinary results. The Maribel recla-mation by the government also raisedthe negative extraordinary result. Thecurrent net result rose from 3.25 to 4.26million EUR. This is a rise of 31.1%.Taking into account these exceptionalelements and the increased deprecia-tions on consolidation goodwill the netresult fell by 27% from 3.26 million EURto 2.38 million EUR.

The current net cash flow rose by 30%from 9.25 million EUR to 12.02 millionEUR. The former definition has beenadapted. Now a broad definition of cur-rent net cash flow is used, by includingthe post amounts written off on stocks,contracts in progress, as well as tradedebtors on the one hand and provisionsfor liabilities and charges on the otherhand. The percentage comparison be-tween the two years naturally comparesthe same conceptual content.

It can be stated categorically that if thedioxin crisis had not happened thenCorona-Lotus would have seen a consi-derable improvement in the net results.

26

New production line Liège Waffles inTurnhout

An additional production line for caramelisedbiscuits will be built in 2000 in Lembeke

27

Pro

spec

ts f

or

2000PROSPECTS FOR 2000

The consolidated turnover for 2000 isestimated at 135 million EUR. This is anincrease of 13%. The takeover of theclientele and the brand Suzy, togetherwith an increase in turnover in mostmarkets, will be mostly responsible forthe growth. The joint venturesInterwaffles, Harry’s Benelux and Lotus-Delta are semi-included in the consoli-dated figures and are responsible forthe remainder of the increase in turn-over.

Interwaffles will for the whole of theyear 2000 have too little productioncapacity and can therefore only achievea proportion of the normal turnover. TheBuizingen factory was destroyed by firein November 1999 and the Alken andLa Pascalou factories are unable to pro-vide sufficient capacity to compensate.

Harry’s Benelux is in its starting yearand therefore the increase in turnover,with respect to the sales, which werepreviously looked after by Corona-Lotusitself, is therefore still limited.

Lotus-Delta will be integrated in theconsolidated figures for the first timeand will see a further rise in turnover.

The investments in material fixedassets will, without Interwaffles, beabout 12.4 million EUR. The mostimportant are:• expansion of the production capacityof caramelised biscuits, waffles and bat-tenbergs • investment in all factories in packag-ing machines, various production instal-lations and automation• an additional production line in Lotus-Delta • in the year 2000 the most importantinvestments will also take place in con-nection with the ERP project (EnterpriseResource Planning) in hardware, soft-ware and in external advice • silos for flour and sugar in Le Glazik• water purification station at BiscuiterieVander in Comines

Interwaffles N.V. has bought an 8 hapiece of ground in Courcelles (to thenorth of Charleroi) and will build a newfactory with six production lines in thefirst phase. The total investment is esti-mated at 19.8 million EUR.

The prices of the raw materials will, onthe whole, not rise. However, those ofthe packaging materials will and thisapplies to both the plastic foils and car-ton.

Since the production per line and perfactory has risen, the new logistic cen-ter in Lokeren is operating well and theentire organisation in general is runningmore productively, then the post ofservices and other goods and thepersonnel costs will rise less sharplythan the turnover.

The sales prices of our products haveseen a slight rise, depending on thecost evolution per product.

Interwaffles will, in the interim year of2000, not yet contribute to the groupprofits. That is also the case for Harry’sBenelux and Lotus-Delta. These threejoint ventures could together result in aslight loss for the consolidated results ofCorona-Lotus.

Globally the current net profits andthe current net cash flow will rise byabout 10%. The net profits will riseby about 60% and amount to about4 million EUR.

29

Res

ults

and

pro

po

sal f

or

div

isio

n o

f p

rofit

sRESULTS AND PROPOSAL FOR DIVISION OF PROFITS

Consolidated

The consolidated current net profit of the year 1999 amounts to 4.26 million EUR as compared to 3.25 million EUR last year. Depreciations on consolidation differences amounted to 0.75 million EUR.

Taking into account exceptional results and depreciations on consolidation differences, the consolidated net profit amounted to 2.38 million EUR. The Group’s share in this figure amounts to 2.32 million EUR.

Statutory

The results of the year 1999 of the parent company Corona-Lotus N.V. are as follows: in EUR

• Profit of the financial year 2,036,794.41• Transfer from untaxed reserves 16,553.73• Transfer to untaxed reserves (47,282.58)

Profit for the year available for appropriation 2,006,065.56

The Board of Directors propose to appropriate the profit balance as follows:• Transfer from reserves available for distribution (1) (7,051.08)• Transfer to legal reserves 734.43• Transfer to reserves available for distribution 888,818.70• Transfer to reserves not available for distribution (1) 7,051.08• Distribution of a gross dividend of 1.3882 EUR to 746,750 shares (2) 1,036,641.14

The dividend is unchanged as compared to 1998• Distribution of emoluments to directors 79,871.29TOTAL 2,006,065.56

(1) Corresponds to the amount of purchased shares as of 31 December 1999(2) The 3,787 shares issued at the time of the increase of capital on 30 December 1999 reserved for staff, only qualify for dividend from the financial year 2000. The dividends on the purchased shares will be paid to Corona-Lotus N.V. and, as a consequence,will not be suspended.

In line with legal requirements, the balance presented for the approval of the share-holders has been drawn up based on this distribution.

If the Ordinary General Meeting of share-holders of 12 May 2000 accepts the Board of Directors’ proposal, the net dividend pershare will amount to 1.04 EUR, after deducting a withholding tax of 25%. This net dividend will be payable as from May 22, 2000 on surrender of coupon n°12 at the Bank Degroof, Fortis, BBL, KBC, Artesia and Société Générale. 1995

1996

1997

1998

1999 1.04

1.04

0.99

0.92

0.87

0.5 1 1.5

EVOLUTION NET DIVIDEND in EUR

30

Stockdata about the Corona-Lotus share In EUR

1999 1998 1997 1996 1995

Highest price 71.70 93.46 74.12 64.45 65.20 Lowest price 58.70 66.93 57.02 52.06 50.45 Price per 31/12 68.00 71.64 66.93 57.02 55.03

Market capitalisation per 31/12 in millions of EUR 51.04 53.50 49.98 42.56 41.10 Number of shares per 31/12 750,537 746,750 746,750 746,750 746,750

Ratio price/earning (PER) (1) 16.19 22.39 20.98 19.33 21.08 Ratio price/cash flow (PCF) (2) 5.69 7.79 6.89 6.27 7.81

(1) PER: Price Earnings Ratio: The price at the end of the year divided by current net result, share of the Group per share.(2) PCF: PER: Price Cashflow Ratio: The price at the end of the year divided by current net result, share of the Group + depreciations, amounts written off andprovisions, per share.

1989 1990

50

100

150

200

250

300

350

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Corona-LotusBASR-index

STOCK MARKET INFORMATION

Structure of shareholdings

Based on the transparency noticesreceived by Corona-Lotus, the share-holding in Corona-Lotus N.V. as of 15April 2000 is as follows:

Market capitalisation

The Corona-Lotus shares are trading onthe spot market with double fixing onthe Brussels Stock Market. On 31December 1999, the market capitalisa-tion amounted to 51.04 million EUR.

Evolution of the price of theCorona-Lotus share

The opposite graphic reflects the price-evolution of the Corona-Lotus share incomparison with the BASR (Brussels AllShare Return)-index. The BASR-indexreflects the price of the total Belgianmarket (shares of the Forward and SpotMarket).

Stockdata about the Corona-Lotusshare

A chart with key-figures per share ismentioned on p.12 of this annualreport.

31

Sto

ck m

arke

t in

form

atio

n

Bisinvest N.V. 60.00%Group of natural persons acting in concert with Bisinvest N.V. 9.78%Axa Royale Belge and affiliated companies 5.97%Own shares (1) 1.00%Public 23.25%

100.00%

(1) The voting rights associated with the sharesheld by Corona-Lotus N.V. have been suspended.The dividends have not been suspended and willbe paid out to Corona-Lotus N.V.

60.00 %

9.78 %

5.97 %

1.00 %

23.25 %

32

• Extraordinary General Meeting

1. Under the terms of the share optionplan as approved by the Board ofDirectors on 21 May 1999 and 2 July1999, a proposal to grant the Board ofDirectors the authority for a period of 18months to purchase a maximum of7,500 Corona-Lotus shares on theexchange-market against a minimumpayment of 50 EUR and a maximumpayment of 90 EUR for each share pur-chased.

2. Proposal to grant the Board ofDirectors the authority to transfer theshares mentioned below to holders ofoptions issued under the terms of theshare option plan at the moment whenthey exercise their options, providingthat the agreed strike price is paid:

• the shares bought in accordancewith the allocation by theExtraordinary General Meeting of16 December 1999• the shares that will be bought inaccordance with point 1

This does not adversely affect the gene-ral powers of the Board of Directors todispose of the shares involved, whollyor in part, at any moment in accordan-ce with article 18b of the Articles ofAssociation.

3. Proposal to renew the authorisationcontained in article 18bis of the Articlesof Association for a new period of threeyears, starting from the day the chan-ges to the Articles of Association deci-ded upon by the General Meeting aremade known. This authorisation investsthe Board of Directors with powers todecide on the purchase or disposal ofits own shares to prevent the companyfrom suffering a serious and threateningloss.

Financial calender

Friday May 12, 2000General Ordinary Meeting of sharehol-ders at the registered office at 16.30h

Extra-Ordinary Meeting of shareholdersat the registered office at 18h

Monday May 22, 2000Payment of dividend

Thursday September 21, 2000Announcement of the half year report2000

Thursday March 15, 2001Announcement of the year results 2000

Friday May 11, 2001General Ordinary Meeting of sharehol-ders.

Proposals to the General OrdinaryMeeting of May 12, 2000

• General Ordinary Meeting

1. Proposal to approve the financial sta-tements of Corona-Lotus N.V. datedDecember 31, 1999.2. Proposal to approve the proposeddistribution of profits.3. Proposal to discharge by separatevote the directors and the statutoryauditor from their mandate.4. Statutory appointmentProposal to appoint Mr Jean-LucDehaene, Minister of State and Senator,as director of the company for a periodof three years starting from the end ofthe Ordinary General Meeting of 12 May2000.

33

Oth

er C

om

pan

y In

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nOTHER COMPANYINFORMATION

Changes to the Capital

1. On 14 May 1999, the OrdinaryGeneral Meeting of shareholders deci-ded to express the capital in Euro. Thenew capital, expressed in Euro amoun-ted to 1,363,573.04 EUR.

2. The same Ordinary General Meetingof 14 May 1999 then decided, with aview to obtaining a round figure, toincrease the capital by a sum amoun-ting to 426.96 EUR by incorporatingreserves to bring it up to 1,364,000EUR without issuing any new shares.

3. On 30 December 1999 an increasein capital was implemented under theterms of the authorised capital expresslyreserved for the staff of the Corona-Lotus Group. Each member of staffcould subscribe to a maximum of 25shares. The result of this offer was thatthe capital was increased by 6,917.26EUR to 1,370,917.26 EUR by the issueof 3,787 new shares. This brought thetotal number of Corona-Lotus N.V. sha-res to 750,537 without stating thenominal value.

Purchase of Own Shares

The Extraordinary General Meeting of16 December 1999 granted the Boardof Directors of Corona-Lotus thepowers, for a period of 18 months, topurchase 7,500 Corona-Lotus shareson the stock market for a unit price ofbetween 5 and 90 EUR. The intentionof the purchase was to be able to deli-ver shares at the moment when theoption holder exercises his options. Thisis part of the Share Option Plan whoseprinciples were approved by the Boardof Directors on 21 May 1999 and 2 July1999.

During the course of 1999, Corona-Lotus bought 106 Corona-Lotus shareson the stock market with a total value of7,051 EUR, i.e. for an average price of66.52 EUR. This is 0.01% of the totalnumber of shares.

In the period between 1 January 2000and 6 April 2000, Corona-Lotus bought7,394 Corona-Lotus shares on the

34

members of staff), also applies to theexecutive directors, a conflict of interestoccurs as included in article 60 of theCompanies Act.

• The Board of Directors was informedof this conflict of interest by Messrs.Karel Boone, Matthieu Boone andPieter Boone, by letter dated 10 May1999. The statutory auditor was alsoinformed of this in writing.

• The Board of Directors, with theexception of Messrs. Karel Boone,Matthieu Boone and Pieter Boone, dis-cussed this conflict of interests andhave taken the following decision:

The Board of Directors declares itsapproval of the justification grounds putforward by the three executive directorsin their explanation.The share option plan provides forshare options to be offered to all execu-tive officials in the Corona-Lotus Group,i.e. the higher executives upwards. Theentire Corona-Lotus remuneration policyis based on the actual job carried outand is independent of the fact of whe-ther a person is a director or a share-holder. In view of the fact that the shareoption plan proposal will constitute anintegral part of the total remunerationpolicy, this option plan is consequentlycompletely unrelated to the fact of whe-ther a person is a director or a share-holder.

In view of the established form of annu-al allocation of options, the financialconsequences for the company areknown sufficiently to the Board ofDirectors.

stock market with a total value of499,581.15 EUR, i.e. for an averageprice of 67.57 EUR. This is 0.99% ofthe total number of shares.

All transactions on the stock marketwere carried out in accordance with theauthority conferred to the Board ofDirectors by the Extraordinary GeneralMeeting of shareholders on 16December 1999.

Conflict of Interests

(Article 60 of the co-ordinated acts governingtrading companies)

The legislation covering conflicts of inte-rest between a company and its direc-tors has been in force since 1 July1996. In accordance with the new arti-cle 60 of the co-ordinated acts gover-ning trading companies, in the case of aconflict of interests that is not part ofthe routine activities, the directors’report should contain the completeminutes of the Board of Directors.These minutes must describe the natureof the decision or operation, justify thedecision taken and mention the financialconsequences for the company.

In 1999, a situation covered by this pro-vision occurred on 21 May 1999 at theoccasion of the fundamental decisionon a share option plan in favour of themanagement of the Corona-LotusGroup, when three directors abstainedfrom taking part in the discussion andfrom voting.

Extract from the minutes of theBoard of Directors of 21/05/1999

Procedure taken from article 60 of theCompanies Act with regard to the shareoption plan.

• Given that the second part of the par-ticipation plan, in particular the shareoptions, as opposed to the first part(the increase in capital reserved for

Services Provided by theCompany Auditor

In line with article 64ter of the co-ordi-nated acts governing trading compa-nies, we are obliged to mention that ourstatutory auditor and the companieswith whom it co-operates, carried outassignments for us during the last yearfor a total sum of 57,827 EUR.

35

GROUP MANAGEMENT Situation April 15, 2000

Group management Karel Boone President Executive CommitteeMatthieu Boone Vice-Pres. Executive Committee

Corporate departmentsPurchase Karel Tack DirectorCentral Technical Services Dirk Verstraeten DirectorCorporate Marketing and International Dirk Jacxsens Director

Frank Cohnen Sales Manager GermanyBart Bauwens Export Manager

Finance Wilfried Deleye Director Corporate FinanceJoseph Bultynck Finance, Consolidation

and Risk ManagerLuc De Backer IT & Logistic Information

Systems ManagerPhilip Visser Management

Information Systems and Internal Audit Manager

Quality Katrien De Vos ManagerResearch and Development Etienne Geirnaert DirectorSecretariat-General Filip Standaert Secretary-General

Bo

ard

of

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nd s

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aud

ito

rG

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man

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ent

BOARD OF DIRECTORS AND STATUTORY AUDITOR

Composition of the board of directorsKarel Boone President

Managing directorMatthieu Boone Managing directorPieter Boone Executive director

IT Director Corona-Lotus till 31/12/1999Non-executive director from 01/01/2000Consultant

Stanislas Boone Non-executive director Consultant

Johan Boone Non-executive directorDentist

Baron Paul De Keersmaeker Independent director till 12/05/2000 (1)

President of the Board of Directors of InterbrewChris Dewulf Independent director

President and C.E.O. of Netherlands Car B.V. (NedCar)

Count Paul Lippens Independent directorPresident of the Board of Directors of Suikergroep N.V.

Antoine Stevens Non-executive directorRetired

Jean-Luc Dehaene Independent director from 12/05/2000 (2)

Senator

(1) Director Paul De Keersmaeker steps down at the Ordinary General Meeting on the 12th of May 2000, havingreached the official age limit. During his four years as an independent director, he has made a real contributionto the furtherance of corporate governance in the management of Corona Lotus. His wide experience and wis-dom have contributed significantly to the company’s further strategic dynamic. The Board of Directors aredeeply grateful to him. (2) Proposal to appointment at the Ordinary General Meeting on the 12th of May 2000.

Statutory auditorErnst & Young Reviseurs d’Entreprises S.C.C. (B160) represented by Mr. Erik De Lembre, part-ner. The statutory auditor has been appointed for a period of three years till the OrdinaryGeneral Meeting of shareholders of 2001, deciding over the annual accounts of the year 2000.

36

Belgium Matthieu Boone Managing DirectorAdministration Denis Pieters ManagerLogistics Johan Claerhout DirectorHuman resources (+ corporate) Rony Hoebeke DirectorProduction Bert De Wit Director

Eddy Thijs Technical Services ManagerJan Lievens Plant Manager LembekeEric Claeyssens Plant Manager Oostakker

Sales and Marketing William Du Pré Director

The Netherlands Tim de Vries Managing DirectorAdministration and Finance Jan Groenewoud ManagerProduction Eric Hottentot ManagerSales and Marketing Henk Onrust Director

France Jan Vander Stichele Managing DirectorAdministration Joseph Bultynck ManagerSales Régis Dutoit Manager

Joint-venturesMargarinerie Hinnekens N.V.

Board of Directors Stanislas Boone PresidentKarel BooneMatthieu BooneHervé HinnekensLuc Hinnekens

Production Manager Els Van Parijs

Corona-Lotus Incorporation (USA)Board of Directors Matthieu Boone Chairman

Michael W. Mc Guire President and C.E.O.Karel Boone Vice-President & TreasurerSandra E. Gale Vice-President & Secretary

Director Gary E. Payne

Lotus-Delta a.s. (Czech Republic)Board of Directors Marko Parik President

Karel Boone Matthieu BooneEdmond Müller

Director Viktor Sébik

Harry’s Benelux N.V.Board of Directors Alain Strasser President

Karel BooneMatthieu BooneChristian Roure

Brand Manager Magd Havermans

Interwaffles N.V. Board of Directors (1) Karel Boone

Matthieu BooneEmmanuel de Limburg-StirumGilles Samyn

General Manager Eric Taelemans

(1) Board of Directors to appoint

FINANCIAL STATEMENTS

Consolidated financial statements 38Balance after appropriation of profit 38Income statement 40Notes 42Comments 48Cash flow statement 50Auditor’s report 51

Financial statements of Corona-Lotus N.V. 52Balance sheet after appropriation 52Income statement 54Notes 55Social report 62Valuation rules 64Comments 65Auditor’s report 66

37

Fina

ncia

l sta

tem

ents

38

Consolidated financial statements

Consolidated balance after appropriation of profit

ASSETS in thousands of EUR 31-12-99 31-12-98

Fixed assets 49,903 39,748

I. Formation expenses 7 11

II. Intangible assets 6,005 3,530

III. Consolidation differences 2,573 2,418

IV. Tangible assets 38,834 32,324A. Land and buildings 16,234 12,025B. Plant, machinery and equipment 18,456 17,486C. Furniture and vehicles 2,750 2,688F. Assets under construction and advance payments 1,394 125

V. Financial assets 2,484 1,465A. Enterprises accounted for using the equity method 86 38

1. Participating interests 86 38B. Other enterprises 2,398 1,427

1. Participating interests and shares 1,390 162. Amounts receivable 1,008 1,411

Current Assets 35,909 33,577

VI. Amounts receivable after one year 13 16B. Other amounts receivable 13 16

VII. Stocks and contracts in progress 6,858 6,467A. Stocks 6,858 6,467

1. Raw materials and consumables 5,036 4,4532. Work in progress - 193. Finished goods 1,178 1,2874. Goods purchased for resale 644 708

VIII. Amounts receivable within one year 17,776 15,735A. Trade debtors 14,744 13,147B. Other amounts receivable 3,032 2,588

IX. Investments 4,177 4,326A. Own shares 7 -B. Other investments and deposits 4,170 4,326

X. Cash at bank and in hand 5,724 5,614

XI. Deferred charges and accrued income 1,361 1,419

TOTAL ASSETS 85,812 73,325

39

EQUITY AND LIABILITIES in thousands of EUR 31-12-99 31-12-98

Equity 24,071 22,665

I. Capital 1,371 1,364A. Issued capital 1,371 1,364

II. Share premium account 188 -

IV. Consolidated reserves 22,392 21,192

VI. Translation differences 99 82

VII. Investment grants 21 27

Minority interests

VIII. Minority interests 504 454

Provisions, deferred taxation 3,487 4,761

IX. A. Provisions for liabilities and charges 2,696 3,9431. Pensions and similar obligations 409 4012. Taxation - 63. Major repairs and maintenance 117 334. Other liabilities and charges 2,170 3,503

B. Deferred taxation 791 818

Creditors 57,750 45,445

X. Amounts payable after more than one year 8,965 7,815A. Financial debts 8,965 7,797

4. Credit institutions 8,965 7,797D. Other amounts payable - 18

XI. Amounts payable within one year 48,587 37,103A. Current portion of amounts payable after more than one year 2,993 3,013B. Financial debts 22,864 17,221

1. Credit institutions 22,864 17,221C. Trade debts 14,991 10,789

1. Suppliers 14,991 10,789E. Taxes, remuneration and social security 6,534 4,940

1. Taxes 1,745 1,4092. Remuneration and social security 4,789 3,531

F. Other amounts payable 1,205 1,140

XII. Accrued charges and deferred income 198 527

TOTAL EQUITY AND LIABILITIES 85,812 73,325

40

Consolidated income statement in thousands of EUR 1999 1998

I. Operating income 123,104 103,974

A. Turnover 119,477 102,832B. Increase; Decrease in stocks of finished goods, work and contracts in progress (171) (293)C. Fixed assets - own construction 1,081 210D. Other operating income 2,717 1,225

II. Operating charges (116,390) (98,191)

A. Raw materials, consumables and goods for resale 50,800 43,4711. Purchases 51,258 43,6462. Increase, decrease in stocks (458) (175)

B. Services and other goods 23,996 20,370C. Remuneration, social security costs and pensions 32,780 27,494D. Depreciation of and other amounts written off formation expenses, intangible and tangible fixed assets 6,923 6,066E. Increase; Decrease in amounts written off stocks, contracts in progress and trade debtors 162 80F. Increase; Decrease in provisions for liabilities and charges 658 (253)G. Other operating charges 1,071 963

III. Operating profit 6,714 5,783

IV. Financial income 392 581

B. Income from current assets 206 107C. Other financial income 186 474

V. Financial charges (2,416) (1,902)

A. Interest and other debt charges 1,413 1,002B. Amounts written on positive consolidation differences 752 231D. Other financial charges 251 669

VI. Profit on ordinary activities before taxes 4,690 4,462

VII. Extraordinary income 222 376

E. Gain on disposal of fixed assets 97 346F. Other extraordinary income 125 30

VIII. Extraordinary charges (1,353) (140)

A. Extraordinary depreciation of and amounts written off formation expenses, intangible and tangible fixed assets 9D. Provisions for extraordinary liabilities and charges (1,884) (1,068)E. Loss on disposal of fixed assets 21 121F. Other extraordinary charges 3,216 1,078

41

1999 1998

IX. Profit for the year before taxation 3,559 4,698

X. A. Transfer from deferred taxation 17 18

B. Transfer to deferred taxation (32) (127)

XI. Income taxes (1,209) (1,352)

A. Income taxes (1,221) (1,371)B. Adjustment of income taxes and write-back of tax provisions 12 19

XII. Profit for the year of the consolidated companies 2,335 3,237

XIII. Share in the result of the enterprises accounted for using the equity method 47 20

A. Profits 47 20

XIV. Consolidated profit 2,382 3,257

A. Share of third parties 59 53B. Share of the group 2,323 3,204

Appropriation account

A. Profit to be appropriated 2,323 3.204C. Transfer to equity (1,206) (2,083)F. Profit distribution Corona-Lotus N.V. (1,117) (1,121)

42

Notes on the consolidated financial statements

I. CONSOLIDATED COMPANIES AND COMPANIES ACCOUNTING FOR USING THE EQUITY METHOD

A. Consolidated companies

Proportion of capital held in %Corona-Lotus N.V. 100.00Biscuiterie Ribert N.V. 99.87Margarinerie Hinnekens N.V. 55.00Prilabis N.V. 99.52Corona-Lotus France S.A. 99.99Biscuiterie Vander S.A. 99.86Biscuiterie Le Glazik S.A. 99.96Corona-Lotus Réassurances S.A. 100.00Corona-Lotus International B.V. 100.00De Bruin’s Banketfabriek B.V. 100.00Corona-Lotus GmbH 100.00Corona-Lotus, Inc. 50.00Cremers N.V. 100.00Biscuitfabriek Vicomte B.V. 100.00Enkhuizer Banket B.V. 100.00Swart Vicomte B.V. 100.00Swart Vicomte Ltd. 100.00Biscuiterie Andi N.V. 100.00Petit Breton S.A. 100.00

B. Associated enterprise accounted for using the equity method

Jeurgens Banket-, Biscuit- en Chocoladefabriek B.V. 33.25

II. COMPANIES EXCLUSIVELY OR JOINTLY CONTROLLED NOT INCLUDED

Lotus-Delta a.s. 50.00

V. CONSOLIDATION PROCEDURES

• Consolidated companiesThe following companies were added tothe consolidation in 1999:from January 1, 1999:Biscuiterie Andi N.V. 100%Petit Breton S.A. 100%

All companies affiliated to the Corona-Lotus Group were included in the con-solidation, except for Lotus-Delta a.s. inwhich Corona-Lotus NV has a 50%share. Given that the company onlybecame operational from December1999, the Board of Directors decidedthat its inclusion was not relevant for theassessment of the consolidated result,the consolidated capital or the consoli-dated financial position.

• Consolidation methods

Full consolidationThe full consolidation method is usedfor companies which are directly or indi-rectly controlled by Corona-Lotus N.V.,either de facto or de jure. The consoli-dated financial statements are the resultof the individual financial statements ofall the companies in the Corona-LotusGroup that are included in the consoli-dation.

The headings of balance sheet andincome statements of consolidatedcompanies have been fully included inthe corresponding headings of the con-solidating company, with the exceptionof inter-company transactions and witha mention of the rights of third-party

shareholders and any consolidation dif-ference. Outside shareholder interestshave been identified in the balancesheets and income statements underthe heading of “minority interests”.

Equity methodCompanies in which no exclusive orjoint control can be exercised on thepolicy orientation, but where there is asignificant interest, qualify as affiliatedcompanies and are included in accor-dance with the equity method. Theseare companies in which at least 20%,but in principle not more than 50% ofthe voting rights are directly and indi-rectly retained.In this method, the book value that theaffiliated company has in the company,is replaced by the corresponding sharein the equity of the affiliated company,after separating the consolidation diffe-rences. The share in the results of theaffiliated company involved are mentio-ned separately in the consolidated profitand loss account.

• Balance sheet date

All the companies included in the con-solidation have 31 December as theirbalance sheet date.

VI. A. METHODS OF VALUATION

1. In general

The consolidation for 1999 is in accor-dance with the Royal Decree on theconsolidation of financial statements,dated March 6, 1990. The assets andliabilities of all the separate companieshave been restated on the basis ofstandard economic rules of valuation.Where necessary, the presentation ofthe financial statements of affiliatedcompanies abroad has been rearrangedin order to bring them into line with thegeneral accounting system as applied inBelgium.

43

2. In particular

2.1 Formation costs

Establishment costs are written off on alinear basis over a period of five years.

2.2 Intangible and tangible fixedassets

The intangible and tangible fixed assetsare valued at their purchase value andincluded in the balance sheet for thatamount, after the appropriate deprecia-tion has been deducted. Purchasevalue refers to the purchase price, themanufacturing price or the input price.

The depreciation and the net bookvalue of the fixed assets of the individu-al companies are reworked on the basisof economically sound group regula-tions. The assets are written off on alinear basis from the month they comeinto use.

For this purpose the following percenta-ges of depreciation have been applied.

Intangible fixed assets:• research and development 33%• licences 33%• clients 10%

Tangible fixed assets:• buildings 5%• installations and equipment 10%• basic machinery 10%• current machines, equipment, furniture 20%• equipment subject to fast wear andtear, software 33%• vehicles 20%

Assets under construction and advan-ce payments

Investments and advances on invest-ments that have been put forward butnot yet concluded are not written off.

2.3 Financial assets

Participating interests and social rightsThe shareholding is included in the con-solidated balance sheet as the amountthat corresponds to the share of equityof the company involved, including the

results for the accounting year that thisshareholding embodies.Social rights are valued at their purcha-se price.Depreciation is applied where the esti-mated value of the financial fixed assetsis less than the accounting value andwhere the loss of value so determined isof a lasting nature in the opinion of theBoard of Directors.Depreciations are taken back to thesum of the previously recorded depreci-ations where the valuation at the con-clusion of the accounting period con-cerned significantly exceeds the previ-ous valuation.

Amounts receivableReceivables are valued at their nominalvalue.Reduction in value is applied if there isuncertainty about full or part paymenton the due date.

Reduction in value is not enforced tothe extent that it is higher at the end ofthe accounting year than is requiredaccording to current rating.

2.4 Stocks

Finished products were valued at stan-dard production cost price.Raw materials, consumables and goodsfor resale were booked at the cost ofacquisition using the FIFO method.

For stocks, real depreciation wasapplied in the event that they had beco-me useless or if their practical value orrealisation value was lower than thecost price.

2.5 Amounts receivable

The receivables are booked at theirnominal value, after deducting the creditnotes still to be made.Receivables in foreign currencies wereconverted at the exchange rate apply-ing on the balance sheet date.Negative exchange rate differenceswere included in the income statement.The necessary depreciation has beenapplied for receivables the collection ofwhich is in doubt.

2.6 Investments & cash at bank andin hand

Company shares are valued at theirpurchase price.

Securities are valued at their purchaseprice.

Balances with financial institutions arevalued at their nominal value.

2.7 Investment grants

Investment grants are valued at theirnominal value after deducting the defer-red taxation.

Deferred taxation will be expressed inthe column deferred taxation.

2.8 Provisions for liabilities and char-ges

Provisions have been made for all nor-mally foreseeable liabilities and charges.

2.9 Amounts payable

Debts have been booked at their nomi-nal value.

Debts in foreign currencies have beenvalued at the rate of exchange on thebalance date. Negative exchange ratedifferences were included in the incomestatement. The anticipated debts with regard tosingle and double holiday allowances,redistribution of social security chargesand personnel insurance have beenbooked in full.

2.10 Positive consolidation differen-ces

The consolidation goodwill or positivedifference on consolidation defined asthe difference between the purchasevalue of the shares and the correspon-ding share in the adjusted equity capitalon the movement of acquisition, isdepreciated over a period of 5 years.

2.11 Negative consolidation differences

The maximum allocations to the indivi-dual assets and liabilities items wereused for the negative consolidation dif-ferences.

44

2.12 Conversion of currency

The financial statements of foreign com-panies have been translated intoBelgian francs at the rates of exchangeon the balance day as far as balancesheet accounts are concerned, and atthe average rates of exchange of thefinancial year for profit and lossaccounts. Historical exchange rateshave been applied for equity. Any trans-lation differences have been recordedunder a separate heading of equity cal-led “Translation differences”. From1995, the consolidated result has beenincluded in the consolidated reserves atthe average rate of exchange.

VI. B. FUTURE TAXATION AND DEFERRED TAXES in thousands of EUR 1999

Analysis of heading IX.B. of the liabilities 791• Future taxation 791

VII. STATEMENT OF FORMATION EXPENSES in thousands of EUR 1999

Net book value as at the end of the preceding year 11Movements during the year:• Depreciation (4)

Net book value at the end of the year 7of which:• Expenses of formation or capital increase, loan issue expenses, reimbursement premium and other formation costs 7

VIII. STATEMENT OF INTANGIBLE ASSETS in thousands of EUR

Research and Concessions, Goodwill AdvanceDevelopment Patents, payments

Expenses Licences, etc.a) ACQUISITION COSTAt the end of the preceding year 13 185 4,375Movements during the year: - - - -• Acquisition, including fixed assets, own production - - 2,479 -• Sales and disposals - - - -• Transfers from one heading to another - - - -• Translation differences - - - -• Other movements (1) - 65 317 -At the end of the year 13 250 7,171 -

c) DEPRECIATION AND AMOUNTS WRITTEN DOWNAt the end of the preceding year 13 126 904 -Movements during the year:• Recorded - 29 388 -• Written down after sales and disposals - - - -• Translation differences - - - -• Other movements (1) - 2 (33) -At the end of the year 13 157 1,259 -

d) NET BOOK VALUE AT THE END OF THE YEAR - 93 5,912 -

(1) Movements originating in changes of the consolidation scope

45

IX. STATEMENT OF TANGIBLE FIXED ASSETS in thousands of EUR

Land and Plant, Furniture Assets underbuildings machinery and construction

and vehicles and advanceequipment payments

a) ACQUISITION COSTAt the end of the preceding year 22,480 71,574 10,757 134Movements during the year:• Acquisitions including fixed assets, own production 3,701 5,298 1,213 1,393• Sales and disposals - (1,853) (670) (33)• Transfers from one heading to another - 100 - (100)• Translation differences - - 12 -• Other movements (1) 1,702 1,808 64 -At the end of the year 27,883 76,927 11,376 1,394

c) DEPRECIATION AND AMOUNTS WRITTEN DOWNAt the end of the preceding year 10,456 54,088 8,069 9Movements during the year:• Recorded 969 4,472 1,061 -• Written down after sales and disposals - (1,381) (557) (9)• Translation differences - - 7 -• Other movements (1) 224 1,292 46 -At the end of the year 11,649 58,471 8,626 -

d) NET BOOK VALUE AT THE END OF THE YEAR 16,234 18,456 2,750 1,394

(1) Movements originating in changes of the consolidation scope

X. STATEMENT OF FINANCIAL FIXED ASSETS in thousands of EUR

Enterprises Otheraccounted for enterprises

using the equity method

1. Participating interestsa) ACQUISITION COSTAt the end of the preceding year 38 53Movements during the year:• Acquisitions - 1,374At the end of the year 38 1,427

d) UNCALLED AMOUNTSAt the end of the preceding year - 37At the end of the year - 37

e) MOVEMENTS IN THE CAPITAL AND RESERVES OF THE ENTERPRISES ACCOUNTED FOR USING THE EQUITY METHOD 48 -• Share in the result for the financial period 48 -

NET BOOK VALUE AT THE END OF THE YEAR 86 1,390

2. Amounts receivableNET BOOK VALUE AT THE END OF THE PRECEDING YEAR - 1,411Movements during the year:• Additions - 972• Reimbursements - (2)• Other - (1,373)

NET BOOK VALUE AT THE END OF THE YEAR - 1,008

46

XI. STATEMENT OF CONSOLIDATED RESERVES in thousands of EUR 1999

Consolidated reserves at the end of the previous financial period 21,192Movements :

Shares of the group in the consolidated income 2,323Diminution due to distribution (1,117)Other modifications (investment grants, …) (6)

Consolidated reserves at the end of the financial period 22,392

XII. STATEMENT OF CONSOLIDATION DIFFERENCES AND DIFFERENCES RESULTING FROM THE APPLICATION OF THE EQUITY METHOD in thousands of EUR 1999

Consolidation Differencesdifferences resulting from

the applicationof the equity

methodpositive positive

Net book value at the end of the preceding year 2,418Movements during the year• Arising from an increase of the percentage held 846• Write-downs (752)• Other modifications 61Net book value at the end of the year 2,512 61

XIII. STATEMENT OF AMOUNTS PAYABLE in thousands of EUR

A. ANALYSIS OF THE AMOUNTS ORIGINALLY PAYABLE AFTER ONE YEAR ACCORDING TO THEIR RESIDUAL TERM 1999

Amounts payable with a residual term of: not more between 1 over 5 yearsthan 1 year and 5 years

Financial debts 2,993 8,178 7874. Credit institutions 2,993 8,178 787TOTAL 2,993 8,178 787

B. AMOUNTS PAYABLE, OR THE PORTION THEREOF, WHICH GUARANTEED BY REAL GUARANTEES GIVEN OR IRREVOCABLY PROMISED ON THE ASSETS OF THE COMPANIES INCLUDED IN THE CONSOLIDATION

Guaranteed amounts payable by real

guaranteesFinancial debts 2,0284. Credit institutions 2,028TOTAL 2,028

47

XIV. RESULT FOR THE FINANCIAL PERIOD AND THE PREVIOUS FINANCIAL PERIOD

A. NET TURNOVER in thousands of EUR period preceding periodA.2. Aggregate turnover of the group in Belgium 49,012 47,964

B. AVERAGE NUMBER OF PERSONS EMPLOYED in units

AND PERSONNEL CHARGES in thousands of EUR 1999 1998B.1. Average number of persons employed 1,018 925

Workers 721 665Employees 271 243Management personnel 26 17

B.2. Personnel chargesRemunerations and social charges 32,728 27,454Pension costs 52 16

B.3. Average number of persons employed in Belgium by companies of the group 672 634

C. EXTRAORDINARY RESULTS in thousands of EUR PeriodC.2. Analysis of the OTHER EXTRAORDINARY COSTS

dioxincrisis 2,889maribel 309

XV. RIGHTS AND COMMITMENTS NOT REFLECTED IN THE BALANCE SHEET1999

A.2. Amount of real guarantees, given or irrevocably promised by the enterprises included in the consolidation on their own assets, as security for debts and commitments:• of enterprises included in the consolidation 3,608A.5.b) Commitments from transactions• to exchange rates 196• to prices of raw materials or goods purchased for resale 4,834

XVI. RELATIONSHIPS WITH AFFILIATED ENTERPRISES AND ENTERPRISES LINKED BY PARTICIPATING INTERESTS BUT NOT INCLUDED IN THE CONSOLIDATION

Affiliated enterprisesPeriod

1. Financial fixed assetsParticipating interests and shares 1,373

2. Amounts receivable 403Within one year 403

4. Amounts payable 21Within one year 21

XVII. FINANCIAL RELATIONSHIPS WITH DIRECTORS OR MANAGERS OF THE CONSOLIDATION ENTERPRISE in thousands of EUR

1999A. Total amount of remuneration granted in respect of the period to the directors or managers of the consolidation company for their responsibilities in the consolidation company, its subsidiaries and its affiliated companies, including the amounts in respect of retirement pensions granted to former directors or managers 489

Additional information :Corona-Lotus N.V. bought 106 company shares in 1999. This package represents 0.014% of the total number of shares, which is 750,537.

48

Comments on the consolidatedfinancial statements

1. The consolidated accounts were cal-culated after the proposed Corona-Lotus N.V. profit sharing.

2. Assets

The intangible fixed assets rose by2.48 million EUR. The increase was pri-marily a result of the anticipated take-over of the Suzy N.V. clientele and theSuzy brand on the one hand, and theaddition of Biscuiterie Andi N.V. andPetit Breton S.A. to the scope of con-solidation on the other hand.

By the inclusion of Andi N.V. and PetitBreton S.A. in the scope of consolida-tion from 1999 the item consolidationdifferences increased. This positiveconsolidation difference, following maxi-mum allocation, amounted to 0.85 mil-lion EUR for these companies and willbe written off over five years in accor-dance with accounting rules.

The tangible fixed assets increased by6.51 million EUR due to the considera-ble increase in investments by 6.89 mil-lion EUR and through the expansion ofthe scope of consolidation. Theseinvestments mainly involved the con-struction and equipping of warehousespace in Lokeren and Briec, the moder-nising and expansion of the productionmachine and the first part of a comple-tely new information system.

The financial fixed assets principallycomprise:

• the Corona-Lotus N.V. participation inthe joint venture Lotus-Delta a.s. in theCzech Republic. This company onlybecame operational from Decemberand has, for that reason, not yet beenincluded in the 1999 scope of consoli-dation

• an advance to Delta Pekarny in theCzech Republic for starting up operatio-nal activities temporarily within the DeltaGroup in expectation of the establish-ment of the new Lotus-Delta companyand the take-over of these activities bythat company

• a minority shareholding of Biscuit-fabriek Vicomte B.V. in JeurgensBanket, Biscuit- en ChocoladefabriekB.V., to which the equity method wasapplied

The increase in stocks took placemainly in packaging materials. This canbe explained by the expansion of thescope of consolidation and the extensi-ve range of packaging references.

Trade debtors rose by 1.6 million EURas a result of the growth in turnover, theimportance of end of year sales and theaddition of Andi N.V. and Petit BretonS.A. The number of customer creditdays was reduced by 2 days to 45days.

The other accounts receivable mainlyrelate to indirect and direct taxation,which can be reclaimed.

Due to the substantial increase in boththe intangible and the tangible fixedassets and the financial fixed assets, thecurrent assets share of the total assetsdecreased by 3.94% to 41.85%

3. Liabilities

During 1999 the Corona-Lotus N.V.capital increased twofold.

• As part of the conversion to the Eurothe capital was increased for the firsttime by 426.96 EUR to bring it up to1.364 million EUR.

• Under the terms of the employee par-ticipation plan, an increase in capitalwas issued reserved exclusively formembers of staff. This raised the capitalby 6,917.28 EUR and a share premiumaccount of 188,113.24 EUR was recor-ded.

The provisions for liabilities and char-ges decreased by 1.25 million EUR. Asa consequence of the dioxin crisis, pro-visions, placed with Corona-LotusRéassurances to provide partial coverfor such risks, were used to compensa-te for certain recall charges and lossesof margins.

The take-overs of Andi N.V. and PetitBreton S.A. were financed from own

resources. The increase in amountspayable after more than one year canbe explained by the inclusion of thefinancial debts of these two companiesin the consolidation.

In 1999, too, short term financing wasused to a great extent because of thesignificant interest gain. The considera-ble expenses and losses resulting fromthe dioxin crisis, the sharp rise in invest-ments and the increase in activities cau-sed the short term financial debts torise by 5.64 million EUR. Because ofupward interest rate pressure, shortterm financing was partially convertedinto long term financing at the beginningof 2000 and the interest rate risk wascovered further in the long term byappropriate financial instruments.

The increase in financial debts causedthe solvency ratio to fall by 2.86% to28.05%. The liquidity ratio fell by 0.15% to 0.74%.

Statement of the Financial Debts ofthe Corona-Lotus Group itemised bydue date in thousands of EUR

Financial debtsYear Credit institutions2000 2,9932001 2,9982002 2,8872003 2,0862004 207later 787

The debts relating to remuneration andsocial security payments include theMaribel support in the period 1993 –1997, which has to be repaid.

4. Income statement

Operating income rose by 18.5% to123.10 million EUR. This rise can princi-pally be explained by the fact thatBiscuitfabriek Vicomte B.V. was takeninto consolidation for a full year in 1999and by the take-over of the companiesAndi N.V and Petit Breton S.A. Thefavourable evolution of sales of pro-ducts not targeted by the dioxin issue,mainly in France, Germany and TheNetherlands also contributed to theincrease in operating income. Thisincrease was, however, slowed down

49

by a loss in turnover of around 4 millionEUR as a result of this dioxin crisis.The gross operating margin rose by0.61% to 11.83% of operating income.Good management of the productrange and more efficient use of rawmaterials and consumables explain thisrise.

The activities in Andi N.V. were fully inte-grated within the Corona-Lotus Groupin 1999. The integration of Petit Bretonwill take place primarily in 2000 and willonly then contribute positively to theresults.

The demonstrable dioxin costs havebeen recorded not as operating costsbut as extraordinary charges.

The increase in the item services andother goods can be principally explai-ned by the expansion of the scope ofconsolidation as compared with lastyear.

The item remuneration and socialsecurity payments rose by 19.2%. Thepositive consequences of the integra-tion of Cremers were only gradually rea-lised in 1999. Moreover, moving thelogistics activities to the new distributioncenter in Lokeren brought significantcosts in 1999. These two elements,together with the expansion of thescope of consolidation, explain the sub-stantial increase for this item.

The provisions mainly involve the provi-sion of the assurance booked on theaccount of Corona-Lotus Réassurances.By the application of the provision forthe restructuring of Cremers in 1998,this costitem rose by 9 million EUR.

Despite the fact that the favourable evo-lution was curbed by the dioxin crisis,the operating results rose by 0.93 mil-lion EUR and amounted to 5.45% ofoperating income as opposed to 5.56%in 1998. The current net profit, too,rose by 1.01 million EUR and amountsto 3.46% of the operating income com-pared with 3.13% last year.

The results in France, in particular, sawa considerable improvement and conti-nue the positive trend that has beentaking shape for the last few years. The

results from the companies in Belgium,Germany and the United States alsoshowed an improvement. The Dutchcompanies made a significant contribu-tion to the positive result, comparedwith last year.

The current net cash flow, defined ascurrent net profit increased by thedepreciation, amounts written off andprovisions, amounts to 12.02 millionEUR. This signifies a rise of 2.77 millionEUR or 29.9%. Expressed in relation tothe operating income, the current netcash flow rose by 0.86% to 9.76%. Thecurrent net cash flow now amounts to48.23% of the net financial debts (defin-ed as the financial debts reduced byinvestments and cash at bank and inhand), which signifies a fall of 2.92% inrelation to 1998. As a result of this posi-tive trend in results, the current netcost-effectiveness has also risen incomparison to equity by 3.36% to17.71%.

The net financial charges, defined asfinancial result excluding depreciation ofconsolidation differences, rose by 0.18million EUR. This rise is explained bythe increase in financial debts as aresult of take-overs and investments onthe one hand, but was limited on theother hand by the lower interest rate in1999.

All the costs involved in the adjustmentto the year 2000 have been charged tothe financial year.

The depreciation on the positive con-solidation differences have been inclu-ded under the column financial chargesand amounted to 0.75 million EUR.

The extraordinary charges and income mainly comprised: • The established dioxin costs and thedamages to be received from the recallinsurance• The Maribel support for the period1993 – 1997, which has to be repaid.

5. Financing

The treasury resulting from operatingactivities rose by 11.88 million EURpartly due to a considerable increase inthe current net cash flow and the highertrade debts. The latter only gives a ran-dom indication of important invoicesreceived or to be received up to the endof the year. The higher investmentamount in tangible and intangible fixedassets in particular was partly financedby additional external funding.Because of this there was no apprecia-ble net change in the treasury. The pro-cessing of the take-over of Andi N.V.and Petit Breton S.A. in 1999 andBiscuitfabriek Vicomte in 1998 influen-ced the figures for 1999 and 1998.

FINANCIAL RATIOS1999 1998 1997 1996 1995

Days customer credit 45.00 47.00 47.00 37.00 40.00Solvency ratio (%) 28.05 30.91 33.94 40.88 38.30Liquidity ratio (Current ratio) 0.74 0.89 0.99 0.99 0.87Gross operating margin (%) 11.83 11.22 13.93 14.22 11.95Current net profit/Operating income (%) 3.46 3.13 3.73 3.85 3.56Current net cash flow/Operating income (%) 9.76 8.90 10.85 11.68 9.48Current net cash flow/Net financial debts (%) 48.23 51.15 106.80 197.41 73.17Current net cost-effectiveness of equity (%) 17.71 14.35 16.22 16.29 16.01

50

CASH FLOW STATEMENT in thousands of EUR 1999 1998

Operating activitiesCurrent net result 4,265 3,252Depreciation 6,923 6,066Depreciation of current assets 162 80Provisions for liabilities and charges 658 -253Transfer from deferred taxation -17 -18Transfer to deferred taxation 32 127

Current net cash flow 12,022 9,254Exceptional cash flow -1,130 246

Change in stocks -450 -1,218Change in trade debtors -1,700 -1,608Change in other debtors -444 -586Change in deferred charges and accrued income 58 -565Change in trade creditors 4,202 1,866Change in other creditors 1,659 -380Change in accrued charges and deferred income -329 -63Amounts receivable after one year 3 154Change in provisions -1,905 -672Change in deferred taxation -42 599

Change in operating net working capital 1,053 -2,473Gain on disposal of fixed assets -97 -346Loss on disposal of fixed assets 21 121Exchange translation differences from other items than from fixed assets 12 -11

Net cash provided by (used in) operating activities 11,879 6,789

Investing activitiesSale of intangible and tangible fixed assets 685 2,814Purchase of tangible fixed assets -13,617 -11,642Purchase of intangible fixed assets -2,892 -143Change in financial assets -1,019 -1,413Consolidated participating interests -916 -2,222

Net cash provided by (used in) investing activities -17,759 -12,606Free cash flow before financing activities -5,879 -5,817

Financing activitiesDividends to be paid -1,117 -1,121Increase of capital 195 0Change in long-term financial debt 4,143 3,845Repayment of current portion of amounts payble after one year -3,013 -1,971Change in short-term financial debt 5,643 7,422Investment grants -12 -15

Net cash provided by (used in) financing activities 5,840 8,161NET INCREASE IN CASH -39 2,344

at the beginning of the financial year 9,940 7,596at the end of the financial year 9,901 9,940

NET INCREASE IN CASH -39 2,344

51

Auditor’s report on the consoli-dated financial statements forthe year ended December 31,1999 to the shareholders’ mee-ting of Corona-Lotus N.V.

In accordance with legal and regulatoryrequirements, we are pleased to reportto you on the performance of the auditmandate which you have entrusted tous.

We have audited the consolidatedfinancial statements as of and for theyear ended December 31, 1999 whichhave been prepared under the respon-sibility of the board of directors andwhich show a balance sheet total of85.812 thousands of EUR and a profitfor the year of 2.382 thousands of EUR.We have also examined the consolida-ted directors’ report.

Unqualified audit opinion on the con-solidated financial statements

We conducted our audit in accordancewith the standards of the “Institut desReviseurs d’Entreprises/Instituut derBedrijfsrevisoren”. Those standardsrequire that we plan and perform theaudit to obtain reasonable assuranceabout whether the consolidated financi-al statements are free of material mis-statement, taking into account the legaland regulatory requirements applicableto consolidated financial statements inBelgium.

In accordance with those standards, weconsidered the group’s administrativeand accounting organisation, as well asits internal control procedures. We haveobtained explanations and informationrequired for our audit. We examined ona test basis, evidence supporting theamounts in the consolidated financialstatements. We have assessed the vali-dity of the accounting principles, theconsolidation policies and significantaccounting estimates made by thecompany, as well as the overall presen-tation of the consolidated financial sta-tement. We believe that those procedu-res provide a reasonable basis for ouropinion.

In our opinion the consolidated financialstatements give a true and fair view ofthe group’s assets, liabilities and conso-lidated financial position as of Decem-ber 31, 1999 and the consolidatedresults of the operations for the yearthen ended, in accordance with thelegal and regulatory requirements appli-cable in Belgium and the informationgiven in the notes to the consolidatedfinancial statements is adequate.

The consolidated directors’ report con-tains the information required by lawand is consistent with the consolidatedfinancial statements.

Ghent, April 14, 2000Ernst & Young Reviseurs d’EntreprisesS.C.C. (B 160)

Statutory auditorrepresented byERIK DE LEMBRE,Partner

52

Financial statements of Corona-Lotus N.V.Balance sheet after appropriation

ASSETS in thousands of EUR 31-12-99 31-12-98

Fixed Assets 44,224 38,516

II. Intangible assets 6,153 3,956

III. Tangible assets 11,752 8,395

A. Land and buildings 5,488 3,539B. Plant, machinery and equipment 4,244 3,701C. Furniture and vehicles 904 1,155F. Assets under construction and advance payments 1,116 0

IV. Financial assets 26,319 26,165

A. Affiliated enterprises 25,327 24,7441. Participating interests 22,796 21,4312. Amounts receivable 2,531 3,313

C. Other financial assets 992 1,4211. Shares 16 162. Amounts receivable and cash guarantees 976 1,405

Current Assets 22,092 17,093

VI. Stocks and contracts in progress 2,927 2,947

A. Stocks 2,927 2,9471. Raw materials and consumables 2,037 1,8282. Work in progress 0 193. Finished goods 471 6594. Goods purchased for resale 419 441

VII. Amounts receivable within one year 15,589 11,380

A. Trade debtors 12,366 10,080B. Other amounts receivable 3,223 1,300

VIII. Investments 7 0

A. Own shares 7 0B. Other investments and deposits 0 0

IX. Cash at bank and in hand 2,812 2,121

X. Deferred charges and accrued income 757 645

TOTAL ASSETS 66,316 55,609

53

EQUITY AND LIABILITIES in thousands of EUR 31-12-99 31-12-98

Equity 15,122 14,013

I. Capital 1,371 1,364A. Issued capital 1,371 1,364

II. Share premium account 188 0

IV. Reserves 13,542 12,622A. Legal reserve 137 136B. Reserves not available for distribution 79 72

1. In respect of own shares held 7 02. Other 72 72

C. Untaxed reserves 830 799D. Reserves available for distribution 12,496 11,615

VI. Investment grants 21 27

Provisions and deferred taxation 1,557 1,694

VII. A. Provisions for liabilities and charges 1,337 1,5701. Pensions and similar obligations 169 1393. Major repairs and maintenance 198 2114. Other liabilities and charges 970 1,220

B. Deferred taxation 220 124

Creditors 49,637 39,902

VIII. Amounts payable after more than one year 8,282 7,588A. Financial debts 7,230 6,845

4. Credit institutions 7,230 6,845D. Other amounts payable 1,052 743

IX. Amounts payable within one year 41,256 32,258A. Current portion of amounts payable after more than one year 2,589 2,741B. Financial debts 22,370 17,138

1. Credit institutions 22,370 17,138C. Trade debts 11,854 8,469

1. Suppliers 11,854 8,469E. Taxes, remuneration and social security 3,045 2,656

1. Taxes 616 6702. Remuneration and social security 2,429 1,986

F. Other amounts payable 1,398 1,254

X. Accrued charges and deferred income 99 56

TOTAL EQUITY AND LIABILITIES 66,316 55,609

54

Not-consolidated income statement in thousand of EUR 1999 1998

I. Operating income 79,645 74,404A. Turnover 75,023 71,036B. Increase, decrease in stocks of finished goods, work and contracts in progress (207) 63C. Own construction capitalised 453 83D. Other operating income 4,376 3,222

II. Operating charges (77,323) (72,376)A. Raw materials, consumables and goods for resale 43,920 39,499

1. Purchases 44,141 39,9852. Increase in stocks (221) (486)

B. Services and other goods 11,642 12,787C. Remuneration, social security costs and pensions 17,144 15,377D. Depreciation of and other amounts written off formation expenses, intangible and tangible fixed assets 4,484 4,256E. Increase in amounts written off stocks, contracts in progress and trade debtors 22 26F. Increase, decrease in provisions for liabilities and charges (233) 112G. Other operating charges 344 319

III. Operating profit 2,322 2,028

IV. Financial income 2,376 1,334A. Income from financial fixed assets 2,138 871B. Income from current assets 81 29C. Other financial income 157 434

V. Financial charges (1,591) (1,543)A. Interest and other debt charges 1,188 982C. Other financial charges 403 561

VI. Profit on ordinary activities before taxes 3,107 1,819

VII. Extraordinary income 766 137D. Gain on disposal of fixed assets 92 137E. Other extraordinary income 674 0

VIII. Extraordinary charges (1,591) (36)C. Provisions for extraordinary liabilities and charges 0 (525)D. Loss on disposal of fixed assets 1 0E. Other extraordinary charges 1,590 561

IX. Profit for the year before taxes 2,282 1,920

IXbisA. Transfer from deferred taxation 15 16B. Transfer to deferred taxation (32) (48)

X. Income taxes (228) (549)A. Income taxes (234) (549)B. Adjustment of income taxes and write-back of tax provisions 6 0

XI. Profit for the year 2,037 1,339

XII. Transfer from untaxed reserve 17 15Transfer from untaxed reserve (48) (70)

XIII. Profit for the year available for appropriation 2,006 1,284

55

APPROPRIATION ACCOUNT 1999 1998

A. Profit to be appropriated 2,006 1,2841. Profit for the year available for appropriation 2,006 1,284

B. Transfers from capital and reserves 7 02. From reserves 7 0

C. Transfer to equity (897) (163)2. To legal reserve 1 03. To other reserves 896 163

F. Distribution of profit (1,116) (1,121)1. Dividends 1,036 1,0372. Directors’ emoluments 80 84

Notes on the not-consolidated financial statements

II. STATEMENT OF INTANGIBLE ASSETS in thousands of EUR

Research and Concessions, Goodwill Advancedevelopment patents, payments

expenses licences, etc.

a) ACQUISITION COSTAt the end of the preceding year 13 186 4,792 0Movements during the year:• Acquisition, including produced fixed assets 0 0 2,736 0• Sales and disposals (-) - 0 - -• Transfers from one heading to another (+) (-) - 0 - 0At the end of the year 13 186 7,528 0

c) DEPRECIATION AND AMOUNTS WRITTEN DOWN At the end of the preceding year 13 134 887 0Movements during the year:• Recorded 0 35 505 0• Written down after sales and disposals - 0 - -At the end of the year 13 169 1,392 0

d) NET BOOK VALUE AT THE END OF THE YEAR (a)-(c) 0 17 6,136 0

56

III. STATEMENT OF TANGIBLE FIXED ASSETS in thousands of EUR

Land Plant, Furniture Assets underand machinery and construction

buildings and equipment vehicles and advancepayments

a) ACQUISITION COSTAt the end of the preceding year 8,310 39,732 7,958 0Movements during the year:• Acquisitions, including produced fixed assets 2,579 3,188 559 1,170• Sales and disposals 0 (292) (462) 0At the end of the year 10,889 42,628 8,055 1,170

c) DEPRECIATION AND AMOUNTS WRITTEN DOWNAt the end of the preceding year 4,771 36,032 6,803 0Movements during the year:• Recorded 630 2,474 786 54• Acquisations from third parties 0 169 0 0• Written down after sales and disposals 0 (291) (438) 0At the end of the year 5,401 38,384 7,151 54

d) NET BOOK VALUE AT THE END OF THE YEAR (a)-(c) 5,488 4,244 904 1,116

IV. STATEMENT OF FINANCIAL FIXED ASSETS in thousands of EUR

Affiliated Othersenterprises

1. Participating interests and sharesa) ACQUISITION COSTAt the end of the preceding year 21,430 53Movements during the year:• Acquisitions 1,862 0• Sales and disposals (496) 0At the end of the year 22,796 53

d) UNCALLED AMOUNTSAt the end of the preceding year 0 37At the end of the year 0 37NET BOOK VALUE AT THE END OF THE YEAR 22,796 16

2. Amounts receivableNET BOOK VALUE AT THE END OF THE PRECEDING YEAR 3,314 1,405Movements during the year:• Additions 1,168 944• Reimbursements (1,951) (1,373)

NET BOOK VALUE AT THE END OF THE YEAR 2,531 976

57

V. A. PARTICIPATING INTERESTS AND OTHER RIGHTS IN OTHER ENTERPRISES

Name and registered offices Rights held by % Subsidiariesand for an enterprise governed the enterpriseby Belgian Law, (directly)the VAT number number

Biscuiterie Ribert N.V.

Ossegemstraat 20, B-1860 Meise BE 419.494.712 4,644 99.87 -

Margarinerie Hinnekens N.V.

Kerkstraat 33 B, B-9971 Lembeke BE 421.694.038 3,500 35.00 20.00

Prilabis N.V.

Ossegemstraat 20, B-1860 Meise BE 429.881.828 1,244 99.52 -

Cremers N.V.

Gentstraat 52, B-9971 Lembeke BE 427.808.008 1,909,477 99.99 0.01

Biscuiterie Andi N.V.

Jozef Cardijnstraat 10, B-9420 Erpe-Mere BE 443.714.127 400 100.00 -

Corona-Lotus France S.A.

Place du Château BP 91, F-59560 Comines 43,434 99.99 -

Biscuiterie Vander S.A.

Place du Château BP 91, F-59560 Comines - - 99.86

Biscuiterie Le Glazik S.A.

Zone Industrielle 2, F-29510 Briec-de-l’Odet - - 99.96

Petit Breton S.A.

Z.A. De Kergazuel, F-29930 Pont-Aven - - 100.00

Corona-Lotus International B.V.

Elektronstraat 15, NL-1014 AP Amsterdam 2,000 100.00 -

De Bruin’s Banketfabriek B.V.

Elektronstraat 15, NL-1014 AP Amsterdam - - 100.00

Biscuitfabriek Vicomte B.V.

Oosterdijk 3E, NL-1601 DA Enkhuizen 1,010 100.00 -

Corona-Lotus Inc.

Green Street 465, San Francisco California 94133 U.S.A. - - 50.00

Corona-Lotus Gmbh

St. Jobser Strasse 47, D-52146 Würselen 10,000 100.00 -

Lotus-Delta a.s.

Bohunická 24, CZ-61900 Brno 500 50.00 -

Corona-Lotus Réassurances S.A.

Avenue de la Faîencerie 148, L-1511 Luxembourg 4,995 99.90 0.10

58

VI. INVESTMENTS: OTHER INVESTMENTS AND DEPOSITS in thousands of EUR 1999 1998

Fixed income securities 0 0

VIII. STATEMENT OF CAPITALAmounts Number of shares

A. CAPITAL1. Issued capitalAt the end of the preceding year 1,364Movements during the year:Capital increase 7 3,787At the end of the year 1,371

2. Structure of the capital2.1. Different categories of sharesOrdinary shares 1,371 750,5372.2. Registered shares and bearer sharesRegistered 383,933Bearer 366,604

C. OWN SHARES held bythe company itself 7 106

E. AMOUNTS OF AUTHORIZED CAPITAL, NOT ISSUED 1,356

G. STRUCTURE OF SHAREHOLDINGS OF THE ENTERPRISE : Situation at December 31, 1999

As applied by article 4 paragraph 2 of the Law of March 2, 1989, the following notifications of participation in the shares representing the capital of the company have been received.

Announcer Number Percentage of shares of total number

of shares

Bisinvest N.V. (*), Gentstraat 52, 9971 Lembeke 450,353 60.00%Group of natural persons who own each less than 5% of the voting rights and who act in concert with Bisinvest N.V. 73,397 9.78%Axa Royale Belge and affiliated enterprises 44,769 5.97%Total 568,519 75.75%(*) Bisinvest N.V. is controlled by “Stichting Administratiekantoor van Aandelen Bisinvest” in the Netherlands.

IX. PROVISIONS FOR OTHER LIABILITIES AND CHARGES in thousands of EUR 1999

Provision Artis-Historia points 971

X. STATEMENT OF AMOUNTS PAYABLE in thousands of EUR

A. ANALYSIS BY CURRENT PORTIONS OF AMOUNTS INITIALLY PAYABLE AFTER MORE THAN ONE YEARAmounts payable current portion not more than between one over five

one year and five yearsyears

Financial debts 2,589 7,094 1364. Credit institutions 2,589 7,094 136Other amounts payable 0 671 381TOTAL 2,589 7,765 517

59

C. AMOUNTS PAYABLE FOR TAXES, REMUNERATION AND SOCIAL SECURITY1999

1. Taxesb) Non expired taxes payable 512c) Estimated taxes payable 1042. Remuneration and social securityb) Other amounts payable relating to remuneration and social security 2,429

XII. OPERATING RESULTS in thousands of EUR except C1 and G 1999 1998

B. OTHER OPERATING INCOMEWhereof subsidies (other than investments grants) and compensatory amounts obtained from public authorities 314 223

C1. EMPLOYEES RECORDED IN THE PERSONNEL REGISTERa) Total number at closing date 528 493b) Average number of employees in full-time equivalents 469.0 439.3c) Number of actual working hours 710,204 690,831

C2. PERSONNEL CHARGESa) Remuneration and direct social benefits 11,757 10,831b) Employers’ contribution for social security 4,358 3,735c) Employers’ premium for extra statutory insurance 308 260d) Other personnel charges 684 515e) Pensions 37 36

C3. PROVISIONS FOR PENSIONSIncrease (+), decrease (-) 30 (3)

D. AMOUNTS WRITTEN OFF1) Stocks and contracts in progress

Recorded 155 121Write back (120) (113)

2) Trade debtorsRecorded 25 31Write back (38) (13)

E. PROVISIONS FOR LIABILITIES AND CHARGESIncreases 220 492Decreases (453) (380)

F. OTHER OPERATING CHARGESTaxes related to operations 290 288Other charges 54 31

G. TEMPORARY EMPLOYEES AND PERSONS PLACED AT THE DISPOSAL OF THE ENTERPRISE1) Total number at the closing date 13 282) Average number of employees in full-time equivalents 29.3 42.0Number of actual working hours 51,158 74,071Charges to the enterprise 999 1,396

XIII. FINANCIAL RESULTS in thousands of EUR 1999 1998

A. OTHER FINANCIAL INCOMEAmount of subsidies granted by public authorities: credited to income for the year:

Capital subsidies 6 9

60

XIV. EXTRAORDINARY RESULTS in thousands of EUR 1999

A. Analysis of OTHER EXTRAORDINARY INCOME, if material.

Extraordinary income: dioxinecrisis 673

B. Analysis of OTHER EXTRAORDINARY CHARGES, if material.

Extraordinary charges: dioxinecrisis 1,280Extraordinary charges: maribel 309

XV. INCOME TAXES in thousands of EUR 1999

A. ANALYSIS OF THE INCOME TAXES1. Income taxes of the current year: 230

a) Taxes and withholding taxes due or paid 868b) Excess of income tax prepayments and withholding taxes capitalised (638)

2. Income taxes on previous year 4a) Taxes and withholding taxes due or paid 4

B. IMPORTANT REASONS FOR DIFFERENCES BETWEEN THE PROFIT BEFORE TAXES AS STATED IN THE ANNUAL ACCOUNTS AND THE ESTIMATED TAXABLE PROFIT,Director’s emoluments 80

XVI. OTHER TAXES AND TAXES BORNE BY THIRD PARTIES in thousands of EUR

1999 1998A. The total amount of value added tax charged during the year:1. to the enterprise (deductible) 9,115 7,8582. by the enterprise 6,899 4,923

B. Amounts retained on behalf of third parties for:1. payroll withholding taxes 2,949 2,6542. withholding taxes on investment income 86 81

XVII. RIGHTS AND COMMITMENTS NOT ACCRUED IN THE BALANCE SHEET in thousands of EUR

1999Forward contracts:• Goods purchased (to be received) 2,349• Currencies sold (to be delivered) 1,963

61

XVIII. RELATIONSHIPS WITH AFFILIATED ENTERPRISES in thousands of EUR

1999 1998

1. FINANCIAL FIXED ASSETS 25,327 24,744Investments 22,796 21,431Other amounts receivable 2,531 3,313

2. AMOUNTS RECEIVABLE 5,035 3,926Within one year 5,035 3,926

4. AMOUNTS PAYABLE 4,083 4,829After one year 1,052 725Within one year 3,031 4,104

7. FINANCIAL RESULTSFrom financial fixed assets 2,138 872From interest and debts 31 20

8. DISPOSAL OF FIXED ASSETSRealised capital gains 8 18

XIX. FINANCIAL RELATIONS WITH DIRECTORS in thousands of EUR

19994. The amount of direct and indirect remuneration and pensions, included in the income statement, as long as this disclosure does not concern, exclusively or mainly, the situation of one single identifiable person:• To directors and managers 287

62

Social Report

I. STATEMENT OF THE PERSONS EMPLOYED

A. EMPLOYEES RECORDED IN THE PERSONNEL REGISTER1. During the financial period or the previous financial period Full-time Part-time Total (T) or Total (T) or

total of full-time total of full-timeequival. equival.

(FTE) (FTE)

1999 1999 1999 1998

Average number of employees 379.7 135.4 469.0 FTE 439.3 FTENumber of actual working hours 585,848 124,356 710,204 T 690,831 TPersonnel charges in thousands of EUR 14,621 2,523 17,144 T 15,377 T

2. As at the closing date of the financial period Full-time Part-time Total of full-time

equival. (FTE)

a) Number of employees recorded in the personnel register 395 133 483.1b) By nature of the employment contractContract of unlimited duration 354 128 439.0Contract of limited duration 39 3 40.9Contract regarding substitution 2 2 3.2c) By sexMale 242 6 246.2Female 153 127 236.9d) By professional categoryManagement personnel 17 1 17.9Employees 131 28 151.3Workers 247 104 313.9

B. TEMPORARY PERSONNEL AND PERSONS PLACED AT THE DISPOSAL OF THE ENTERPRISEDuring the financial period Temporary personnelAverage number of personnel employed 29.3Number of actual working hours 51,158Charges to the enterprise in thousands of EUR 999

II. LIST OF PERSONNEL MOVEMENTS DURING THE FINANCIAL PERIOD

A. ENTRANTSa) Number of employed persons recorded in the personnel register during the financial period 126 6 130.1

b) By nature of the employment contractContract of unlimited duration 45 5 48.5Contract of limited duration 80 0 80.0Contract of regarding substitution 1 1 1.6

c) By sex and level of educationMale: primary education 8 0 8.0

secondary education 55 0 55.0university education 1 0 1.0

Female: primary education 2 0 2.0secondary education 58 6 62.1higher non-university education 1 0 1.0university education 1 0 1.0

B. LEAVERS Full-time Part-time Total ofa) Number of employed persons of which the date of full-timetermination of the contracts has been recorded in the personnel equivalentsregister during the financial period 145 12 153.0

b) By nature of the employment contractContract of unlimited duration 83 11 90.6Contract of limited duration 60 0 60.0Contract regarding substitution 2 1 2.4

c) By sex and level of educationMale: primary education 11 0 11.0

secondary education 73 0 73.0higher non-university education 2 0 2.0university education 19 0 19.0

Female: primary education 1 3 3.0secondary education 34 7 38.8higher non-university education 3 1 3.4university education 2 1 2.8

d) By reason of termination of contractPension 1 1 1.7Prepension 0 0 0.0Dismissal 11 2 12.3Other reason 133 9 139.0

III. STATEMENT CONCERNING THE IMPLEMENTATION OF MEASURES STIMULATING EMPLOYMENT DURING THE FINANCIAL PERIOD

MEASURES STIMULATING EMPLOYMENT Number Number Financial profitof employed in thousands of EUR

persons involvedIn full-time equivalents

1. MEASURES GENERATING FINANCIAL PROFIT1.3. Low wages 112 93.5 111.6. Maribel 280 259.6 58

2. OTHER MEASURES2.1. Contract of first professional experience 0 0.02.3. Training period for junior employees 23 23.02.7. Conventional prepension 3 3.0

Number of employees involved within one or more measures stimulating employment:- Total for the financial period 324 297.4- Total for the previous financial period 367 331.1

IV. INFORMATION ON VOCATIONAL TRAINING FOR EMPLOYED PERSONS DURING THE FINANCIAL PERIOD

Number of Number of Charges toemployees training hours the enterprise

involved attended in thousands of EUR

Total of training initiatives at the expense of the employerMale 164 6,589 227Female 173 3,759 110

63

64

Valuation rules

1. Assets

1.1.Formation Expenses

Formation expenses were booked atpurchase price and depreciated at100%.

1.2. Intangible fixed assets

The intangible fixed assets were enteredat purchase or transfer price.The amortisation percentages appliedwere as follows:• research and development 33%• licensing 33%• clientele 10%• advances 0%

1.3.Tangible fixed assets

Tangible fixed assets, mentioned underheading III, were included at purchaseprice. Additional costs, included inassets under heading III were bookedseparately.

Beginning in 1993 assets under con-struction and advance payments weredepreciated according to their definitedestination, except if it concerns fixedassets which are depreciated overmaximum three years. These last menti-oned assets are depreciated as fromthe year of coming into operation.

Investments in office equipment weredepreciated over three years, beginning1994, instead of over five years.

Beginning in 1980 the degressivemethod was used wherever possible,applying the following depreciationrates:• Buildings 5%• Installations and equipment 10%• Machines, tools and furniture 20%• Office equipment 33%• Equipment subject to rapid wear and tear 33%• Software 33%• Vehicles 20%• Additional costs 100%• Advances on tangible fixed assets:according to their definite destination• Produced fixed assets: according totheir definite destination.

1.4.Financial fixed assets

Financial fixed assets are valued atacquisition price or contribution valuewithout supplementary costs.Depreciation is applied where the esti-mated value of the financial fixed assetsis less than the accounting value andwhere the loss of value so determined isof a lasting nature in the opinion of theBoard of Directors.The estimated value of the financialfixed assets is determined at the end ofthe accounting period based on themost recent available balance sheet andon one or more criteria.Depreciations are taken back to thesum of the previously recorded depreci-ations where the valuation at the closingdate of the accounting period concer-ned significantly exceeds the previousvaluation.

1.5.Stocks

Finished products were valued at stan-dard production costprice.Raw materials, consumables and goodsfor resale were booked at the cost ofacquistion using the FIFO method. Forstocks, real depreciation was applied inthe event that they had become uselessor if their practical value or realisationvalue was lower than the cost price.

1.6.Receivables

The necessary depreciation has beenapplied for receivables the collection ofwhich is in doubt. Receivables werebooked at their nominal value, less anycredit notes remaining to be drawn up.Receivables in foreign currencies wereconverted at the exchange rate apply-ing on the balance sheet date.Negative exchange rate differences onthe not-Euro currencies were includedin the income statement as in the past.

2. Liabilities

2.1. Provisions for liabilities andcharges

Provisions have been made for all nor-mally foreseeable liabilities and charges.

2.2. Amounts payable within oneyear

• Suppliers

Debts to suppliers have been booked attheir nominal value. Debts in foreigncurrencies have been valued at the rateof exchange on the balance date.Differences in the exchange rate havebeen booked as with “receivables”.

• Liabilities and provisions for taxes,remunerations and social security

The anticipated debts with regard tosingle and double holiday allowances,redistribution of social security charges,personnel insurances and the Maribelreimbursement have been booked infull.

65

Comments on the financial sta-tements of Corona-Lotus N.V.

Assets

The increase in intangible fixed assetsrefers primarily to the anticipated take-over of the clientele and brand nameSuzy.

Due to important investments in a newlogistics center in Lokeren, in extendingand renovating the machinery and in anew information system, the tangiblefixed assets rose by 3.36 million EUR.

The participating interests in BiscuiterieAndi N.V. has been added to the finan-cial fixed assets, but that of BiscuiterieCardinael B.V.B.A. has been withdrawnas a result of the merger by take-over ofthe company by Corona-Lotus N.V.

These companies, including Corona-Lotus N.V., represented a net result in1999 (in million EUR), expressed percountry and in terms of net assets, of:

Net NetAssets Profit

France 11.98 0.89The Netherlands 7.27 1.22Germany 0.54 0.13U.S.A. 0.20 0.04Belgium 18.47 2.34(incl. Corporate departments)

Current assets rose by 5 million EUR.This increase took place on the onehand mainly in the trade accounts recei-vable because of the important end-of-year sales and the take-over of the Andiand Cardinael sales, and on the otherhand in the other receivables includingamounts owed by the insurance com-pany as damages for the recall costs inthe dioxin file. Liquid assets rose by0.69 million EUR.

Liabilities

As part of the conversion to the Euro,the capital was raised within the legalboundaries by 426.96 EUR to bring itup to 1.364 million EUR.

Taking advantage of the opportunitiesoffered by the law on employee partici-pation, all members of staff were offeredthe opportunity of subscribing to a capi-tal increase exclusively for staff at anissue price 20% less than the shareprice applicable at that time. This gaverise to an increase in capital of 6,917.28EUR and a share premium account of188,193.24 EUR.

Beside this, an option plan was introdu-ced at the end of 1999 for the manage-ment with an issue price equal to thestock price applicable at that time.Corona-Lotus N.V. bought and is stillbuying its own shares under theseterms.

Amounts payable after more thanone year rose by 0.69 million EUR. Theincrease in financial debts is a conse-quence of the take-over of theCardinael B.V.B.A. financial debts resul-ting from its integration in Corona-LotusN.V. The other debts relate to inter-company loans.

Amounts payable within one yearrose by 5.2 million EUR. This is accoun-ted for by the high level of investmentsand more expenditure as a consequen-ce of the non-recoverable costs of thedioxin crisis.

The increase in trade debts mainly rela-tes to the purchase of the Suzy clienteleand brand Suzy at the end of 1999.

Debts relating to remunerations andsocial security costs contain the repay-ments for the Maribel support in theperiod 1993 – 1997.

Income statement

Turnover saw an increase of 5.61%.This increase was curbed to a majorextent by the dioxin crisis, which hadsignificant negative repercussions onsales both in Belgium and abroad.

The purchase of inter-company goodsfor resale increased by 5.6 million EUR.

The cost of remunerations and socialsecurity payments rose by 1.77 millionEUR, due in part to the further exten-sion of the organisational structure andto the cost of the changeover to thenew logistics center in Lokeren. Thisoperation will only have positive reper-cussions for the results after 2000.

Despite the difficult period of the dioxincrisis, earnings from operations roseby 0.29 million EUR.

The demonstrable dioxin costs and therecoverable recall costs have beenentered under extraordinary chargesand income.

The revenue from financial fixedassets relates primarily to dividendpayments from subsidiary companies.Due to the low interest rates and inspite of higher investments, the financi-al cost of debts rose by a very limitedamount.

Due to higher operating profit and thehigher financial revenue, net profitincreased by 0.70 million EUR to 2.04million EUR.

66

Statutory auditor’s report for theyear ended December 31, 1999to the shareholders’ meeting ofCorona-Lotus NV

In accordance with legal and statutoryrequirements we are pleased to reportto you on the performance of the auditmandate which you have entrusted tous.

We have audited the financial state-ments for the year ended December 31,1999 which have been prepared underthe responsibility of the board of direc-tors and which show a balance sheettotal of 66.316 thousands of EUR and aprofit for the year of 2.037 thousands ofEUR. We have also carried out the spe-cific additional audit procedures requi-red by law.

Unqualified audit opinion on thefinancial statements

Our examination has been conducted inaccordance with the auditing standardsof the “Institut des Reviseurs d’Entre-prises/Instituut der Bedrijfsrevisoren”.Those standards require that we planand perform the audit to obtain reaso-nable assurance about whether thefinancial statements are free of materialmisstatement, taking into account theBelgian legal and regulatory require-ments applicable to financial state-ments.

In accordance with those standards, weconsidered the company’s administrati-ve and accounting organisation, as wellas its internal control procedures.Company officials have responded cle-arly to our requests for information andexplanations. We have examined on atest basis, the evidence supporting theamounts and disclosures in the financialstatements. We have assessed theaccounting policies, the significantaccounting estimates made by the

company and the overall presentation ofthe financial statements. We believe thatour audit provides a reasonable basisfor our opinion.In our opinion, taking into account theapplicable legal and regulatory require-ments, the financial statements give atrue and fair view of the company’sassets, liabilities, financial position as ofDecember 31, 1999 and the results ofits operations for the year then endedand the information given in the notesto the financial statements is adequate.

Additional certifications and informa-tions

We supplement our report with the fol-lowing certifications and informationswhich do not modify our audit opinionon the financial statements:

- The directors’ report includes theinformation required by law and is con-sistent with the financial statements.

- The accounting records are main-tained and the financial statements havebeen prepared in accordance with thelegal and regulatory requirements appli-cable in Belgium.

- No transactions have been underta-ken or decisions taken in violation of thecompany’s statutes or Company Lawwhich we would have to report to you.The appropriation of results proposedto the General Meeting complies withthe legal and statutory provisions.

- In accordance with article 60 and arti-cle 60bis of Company Law, we are alsorequired to report to you on the follo-wing transaction:

Article 60As mentioned in the annual report, 3active directors has at the meeting ofthe Board of Directors held on May 21,1999, a conflict of interest with theintroduction of a stock option plan.The financial consequences for thecompany are not material.

Ghent, April 14, 2000Ernst & Young Reviseurs d’EntreprisesS.C.C. (B 160)

Statutory auditorrepresented byERIK DE LEMBRE,Partner

67

GENERAL INFORMATION

Registered OfficeCorona-Lotus N.V.Gentstraat 52B-9971 Lembeke

Tel.: +32(0)9/376.26.11Fax: +32(0)9/376.26.26Internet: http://www.corona-lotus.be

Commercial register Ghent 11.294

VAT numberBE 401.030.860

Annual reportThis annual report is also available onthe internetsite: http://www.corona-lotus.be

Dit jaarverslag is eveneens verkrijgbaarin het Nederlands. Ce rapport annuel est également dispo-nible en français. Dieser Geschäftsbericht ist auch aufDeutsch erhältlich.

Contact

For further information about the data ofthe annual report or more informationabout the Group Corona-Lotus, pleasecontact:

Filip StandaertSecretary-GeneralGentstraat 52B-9971 LembekeTel.: +32(0)9/376.26.11Fax: +32(0)9/376.26.04E-mail: filip_standaert@corona-lotus.be

Kolophon

Concept and realisation:Vandekerckhove & Devos

Photos:Benny De GroveLe CloarecVandekerckhove & Devos

Translation: Dekryptos S.A.

Print: Deckers Druk

Acknowledgement

We wish to thank all our cooperators.Their commitment in realizing the com-pany’s targets and their dynamism ena-ble us to reach the reported results andmake us feel confident of the future.

Gen

eral

info

rmat

ion

68

Notes