1

Table of contents 1Consolidated key figures 2Notable events in 2001 31. MESSAGE FROM THE CHAIRMAN – CEO AND THE COO 52. CORPORATE STRATEGY 73. COMPANY PROFILE 9

Products and markets 9Sales organisations 11Production sites 11

4. CORPORATE GOVERNANCE 135. REPORT OF THE BOARD OF DIRECTORS 15

Changes in the group structure 15Legal structure 16Activities in 2001 17

Sales and sales promotion 17New products 19Investments and industrial operation 19Research and development 21Quality management 21Environment 21Personnel and organization 22Development of costs 22Profitability 23

Important facts after 31st December 2001 25Prospects for 2002 27Results and proposal for division of profits 29

6. STOCK MARKET INFORMATION 317. OTHER COMPANY INFORMATION 338. BOARD OF DIRECTORS, AUDITOR, 35

GROUP MANAGEMENT 369. FINANCIAL STATEMENTS 39

Consolidated financial statements 40Comments 51Cash flow statement 53Auditor’s report 54Five year financial summary 55

Financial statements of Lotus Bakeries NV 56Valuation rules 68Comments 69Auditor’s report 70

10.GENERAL INFORMATION 71

Table of contents

3

2001 2000 1999 1998 1997

INCOME STATEMENTTurnover 136.08 131.82 119.48 102.83 88.45Depreciation (1) (9.73) (8.06) (6.92) (6.07) (5.68)Operating result 2.21 7.01 6.71 5.78 6.07Financial result (2) (3.43) (2.83) (2.02) (1.32) (1.46)Depreciation on consolidation differences (0.80) (0.75) (0.75) (0.23) (0.66)Result on ordinary activities (1.23) 4.18 4.69 4.46 4.61Extraordinary result (2.50) (0.06) (1.13) 0.24 (0.03)Result before taxation (3.72) 4.12 3.56 4.70 4.58Taxes (0.77) (1.64) (1.22) (1.46) (1.33)Result of equity method 0.17 0.03 0.05 0.02 -Net result (4.32) 2.52 2.38 3.26 3.25- Minority interests 0.05 0.08 0.06 0.05 0.03- Group's share (4.37) 2.44 2.32 3.20 3.22Current net result (3) (1.02) 3.32 4.26 3.25 3.34

OWN FINANCING AND INVESTMENTSCurrent net cash flow (4) 9.27 11.60 12.02 9.25 9.74Net cash flow 9.13 11.89 8.96 8.53 9.79Investments (5) 9.65 18.68 14.08 4.79 5.13

BALANCEBalance total 97.43 103.39 85.81 73.32 60.74Equity 22.06 25.44 24.07 22.67 20.62Net financial debts (6) 37.89 37.99 24.92 18.09 9.12

NUMBER OF PERSONS EMPLOYED (7) 1,169 1,214 1,012 948 796

CONSOLIDATED KEY FIGURES PER SHARE in EUR

2001 2000 1999 1998 1997

Current net cash flow (4) 12.35 15.45 16.01 12.37 13.04Current net result (3) (1.36) 4.42 5.68 4.36 4.49Net result (5.76) 3.36 3.17 4.36 4.36Net dividend 0.52 1.04 1.04 1.04 0.99Total number of shares per 31 December 750,537 750,537 750,537 746,750 746,750

(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) Includes investments in tangible and intangible fixed assets.

(6) Net financial debts are defined as financial debts - investments - cash at bank and in hand.

(7) For the joint ventures Interwaffles and Lotus-Delta all members of personnel are taken into account for one hundred percent.

1. SINGLE BRAND NAME LOTUS

• March- Announcement of the switching of a number of locally important brand

names to the single brand name Lotus.

• April-May- change in the company name from Corona-Lotus to Lotus Bakeries.- change of the company names of the subsidiaries in France, the

Netherlands, Germany, Switzerland and Luxembourg to Lotus Bakeries.

• September- launch of the new TV commercial in support of the Lotus single brand name.

• Throughout 2001- stepwise change in packaging to the single brand name Lotus

from January onwards: caramelised biscuitsfrom May onwards: cakes and waffles

2. INTERWAFFLES

• January- new waffle factory goes into operation in Courcelles.

3. SAP

• January-March- effective switch to the SAP system of the domains: sales, logistics and finance.

4. GENERAL

• November- announcement of the new integrated organisation for the Lotus Bakeries

Group: stepwise realization in the course of 2002.

Notable events in 2001

2

Consolidated key figures of the Lotus Bakeries Group

in millions of EUR

5

The year 2001 proved to be a difficultyear for Lotus Bakeries, given that signifi-cant steps were taken to strengthen thestrategic position of the company. Thesewere accompanied by heavy investmentsand high costs. The concurrence of anumber of important strategic invest-ments with a few disappointing resultshas meant that the financial year has clo-sed with a current net loss of 1.02 millionEUR and a current net cash flow of 9.27million EUR.At the end of February 2002 the decisionwas also taken to close the waffle factoryin Turnhout and to transfer production toInterwaffles in Courcelles. The costs ofthis restructuring are estimated at 2.5 mil-lion EUR and were taken into account inthe exceptional result of 2001. As a con-sequence the net loss is 4.32 million EUR.In order to realize the restructuring, the50% participation of the NationalePortefeuille Maatschappij (NPM) inInterwaffles was taken over by LotusBakeries in March 2002.Thus 2001 can be regarded as the yearin which a number of important stepswere taken towards expanding of thebrand leadership of Lotus Bakeries incaramelised biscuits, cakes, and waffles& galettes.

SINGLE LOTUS BRAND NAMEThe development in turnover for LotusBakeries was strongly influenced by theconversion of the various specialised orlocal brands to the Lotus brand name.This switch has had a strong impact onall marketing and sales activities so that itwas not possible to be very active interms of promotional activities in 2001.The turnover figure consequently hardlyshowed any growth and the considerablecosts of photos, photo engravings, pac-kaging costs and all other costs associa-ted with the switch to the single Lotusbrand were taken into account in thefinancial year 2001.The Lotus brand name was well receivedby the clients and the consumers. LotusBakeries has thus achieved a very impor-tant step in a branding policy with a widerand more international appeal.

INFORMATION INTEGRATIONThe implementation of SAP, whichembraces all of the Lotus Bakeries activi-ties in an integrated software package,was achieved to a considerable extent in2001. That was true of the domains:

sales, logistics and finance. The use ofSAP for these domains in all sites is suc-cessful. The advantages of a uniformintegrated system for the entire group arealready apparent. SAP will be implemen-ted in production, product costing andpurchasing in 2002. The costs of preparation, training andactual application are very high. A signifi-cant portion has been included in thecosts of the current year. The portion thatis regarded as investment will be writtenoff over three years as from the date oftaking it into service.This new infrastructure will enable LotusBakeries to have information availablemore rapidly, more uniformly and in a cle-arer form.

WAFFLES & GALETTESIn 2001 an important step was takentowards growing the waffles sector tobecome a fully-fledged product group,alongside caramelised biscuits andcakes. The takeover of the Suzy brand atthe end of 1999 and the integration ofCorona, Cremers, Vander and Suzy intothe Lotus brand strengthens the brandleader position of Lotus in this market. In addition production started at thebeginning of 2001 in the new, highlyautomated Interwaffles factory inCourcelles. This was accompanied byconsiderable costs, but a reasonablelevel of production control was achievedin the course of 2001.Given that the factory in Turnhout was, inrespect of the production of waffles andgalettes, not competitive, in part as aconsequence of the undercapacity of thefactory, we decided at the end ofFebruary 2002 to close this factory andtransfer production to Courcelles. This willhave been achieved by June 2002. LotusBakeries will then have two waffles &galettes factories that will operate at agood capacity level and achieve competi-tive cost prices.

All of these investments and costshave equipped Lotus Bakeries with awell-performing single brand name, acompetitive industrial apparatus and amodern information system. Thisshould all support and promote thefurther growth and profitability of thecompany.

Matthieu Boone Karel BooneCOO Chairman-CEO

1 Message from theChairman – CEO and the COO

Matthieu Boone

COO

Karel Boone

Chairman-CEO4

The biscuit sector consists of a rich variety of product groups in which veryvaried technologies are used, different consumption moments exist and in whichin addition to a few truly international products, there are many local differences inpreferences.

Lotus Bakeries specialises in three product groups in the biscuit sector: carame-lised biscuits, waffles & galettes and locally important cakes.

Lotus Bakeries’ aim is to be the brand leader in these three product groups inthe Benelux and France, and to realize the important opportunities for furtherinternationalisation of caramelised biscuits and waffles in particular.

To achieve this objective Lotus Bakeries has the following essential resources:

• The various specialised and local brands (Corona, Suzy, Cremers, Le Glazik,Vander, De Bruin and Enkhuizer Banket) were combined to form a singlebrand: Lotus. The common brand content is expressed in the brand essence:"Deliciously cosy".

• Caramelised biscuits, cakes and waffles & galettes are consumed widely inBelgium by many people. They therefore together form a broad foundation fora strong Lotus brand. In the other countries the basis for the Lotus brand con-sists of a few locally important products and the growing interest seen incaramelised biscuits and waffles outside Belgium.

• The specialised production centres are able to apply the specific technolo-gies in such a way that the products are valued by the consumer whilst at thesame time achieving a competitive cost price.

• The commercial organisation has been expanded in depth so that in themost important markets specific segments can be reached. Retail is the primarysales market, but catering (wholesale) and food service (including hotels,restaurants and cafes) are growing in importance. The Lotus brand and salesare being stimulated in the most important markets through publicity and pro-motional activities.

Lotus Bakeries is thus looking to achieve further growth and profitability bystrengthening its market position and by expanding the further internatio-nalisation of its products.

2 Corporate strategy

76

Assortment caramelised biscuits, cakes, waffles and galettes under the Lotus brand in Belgium

PRODUCTS AND MARKETS

Lotus Bakeries has decided upon abrand name policy in well-defined pro-duct groups: caramelised biscuits,cakes, waffles & galettes. This will berealised by occupying a leading posi-tion in caramelised biscuits, waffles &galettes and in local important cakes(pastry) in the Benelux and France,and outside these countries, by reali-sing the internationalisation of cara-melised biscuits and waffles & galettes.

CAKES AND PASTRY

This product group consists of manyvarieties with as a common characte-ristic, a high moisture content (up to16%) and short shelf life (eight to tenweeks). The consumption of cakesvaries greatly regionally. This is why itis necessary to build up a range foreach country with several strong pro-ducts from the country or region asthe basis, supplemented with pro-ducts from the other countries.Through acquisitions Lotus Bakerieshas acquired an important numberlocally strong products.

In Belgium Lotus Bakeries is the mar-ket leader in the entire cake marketwith its principal products beingMadeleine, Frangipane, Zebra, Midiand Marshmallow.

In the Netherlands Glacés, Batten-bergs and Jodekoeken are the mainproducts in the branch and togetherwith a number of specialities from theother countries they ensure a leadingposition of Lotus Bakeries.

In France Lotus Bakeries has a verystrong position in Brittany with thebutter specialities from Lotus-LeGlazik. The same products are soldalong with some Belgian specialities

such as Frangipane, throughout thewhole of France.

Outside the Benelux and France, afew specialities are sold in particular inGreat Britain and Germany.

WAFFLES AND GALETTES

These products, which mostly origi-nate from Belgium, enjoy increasingpopularity outside Belgium. LotusBakeries is now already achieving themost important portion of the sales ofthese products outside Belgium.

Waffles like cakes contain up to 16%moisture and therefore have a limitedshelf life. In particular these are Liègewaffles, Vanilla waffles, Soft waffles(Brussels waffles), chocolate-coatedwaffles and filled waffles. Galettes arealso baked in a waffle iron, but theycontain little moisture so they can bekept for four to six months. FineGalettes, Family waffles and Parisettesare the principal products.

Lotus (and Lotus-Suzy) is the brandleader in this important product group,both in Belgium and in neighbouringcountries. A significant proportion ofthe waffle market consists of the pri-vate labels of distributors. Lotus playsa leading role in this field, especiallythrough the acquisition of Interwaffles.

Lotus Bakeries is, as a consequence,able to bring about a strong interna-tional expansion in this rapidly growingbranch.

CARAMELISED BISCUITS

Caramelised biscuits are originallyBelgian and owes its typical flavour tothe caramelisation of the sugar duringthe baking process. It can, like mostbiscuits, be kept for six to nine months.

3 Company profile

98

Staff members Salesteam Germany

1110

Lotus Bakeries has, for years, beenthe undisputed leader in that marketin Belgium and has also realised theinternationalisation of Lotus Carame-lised biscuits.

In Belgium Lotus Caramelised bis-cuits is a top product within the wholebiscuit market. But the growth is inparticular to be found in the othercountries so that already about halfof the production is sold outsideBelgium.

Given that France is still the largestmarket outside Belgium, thenGermany, the United States, theNetherlands, Great Britain, the FarEast and other countries are also reallyimportant. In many countries the reallybig success is the individually wrap-ped Lotus Caramelised biscuit offeredwith a cup of coffee or tea.

OTHER

Enkhuizer Banket, which was acqui-red in 1998, is a significant producerof Sponge Fingers, which are soldprincipally in the Netherlands, GreatBritain and Belgium.

SALES ORGANISATIONS

Lotus products are consumed both athome and when people are out. Inorder to have intense market influence,Lotus Bakeries has specialised salesteams for each market: the retail,catering (large-scale use in schools,clinics, canteens) and food service(hotels, restaurants, cafes and gas-stations).

This system is fully developed inBelgium. In the Netherlands, we arepresent mainly in retail and food ser-vice. In the French retail and in cate-ring, there is a strong accent on nor-thern France, the Paris region andBrittany.

Lotus Bakeries also has its own salesorganisation for the German andAustrian markets. This is also true forSwitzerland.

In the UK, various firms have beenactive and are making a considerableturnover with the sale of Lotus Bake-ries products.

In Spain, Italy, Israel, Japan, Korea,

etc., Lotus Bakeries makes an appealto specialised companies that are veryactive in certain markets.

In addition to sales to airline com-panies by a specialised Americancompany, Lotus Bakeries has a jointventure in the US that is selling LotusBakeries products as a mail ordercompany (catalog sales).

In the Czech Republic and Slovakiathe joint venture, Lotus-Delta, is ope-rating in retail and food service throughspecialised dealers.

Harry’s Benelux is a joint venturewith Harry’s, market leader in Francein prepacked bakery products. In theBenelux countries, the company mar-kets a range of bread products with ashelf life of 28 to 42 days.

PRODUCTION SITES

Lotus Bakeries’s wide range of pro-ducts means that very varied producttechnologies are used. Getting to know,mastering and further developing thesedifferent product technologies is aconstant challenge for Lotus Bakeries.In addition, it is necessary to restrictthe number of products and technolo-gies per production unit. Therefore, itis necessary to develop several speci-alised factories.

In case of take-overs, product redistri-bution has been realised and smallerestablishments have been closeddown. As a result the volume per pro-duct has risen, as well as the totalproduction per site.

In the waffle factory in Turnhout thecost price was not competitive andthe production volume was insufficientto cover the structural costs of thefactory. This is why the decision wastaken to close the factory as of June2002 and to transfer the production toInterwaffles (Courcelles), which is now100% owned by Lotus Bakeries.

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, Snowcake, Strawberrycake, Jam tarts).

In Ghent (Oostakker), in East Flanders,Madeleine, Amico, Zebra, Midi andCrembo are produced. This productionsite is also specialised in snack cakes(Marshmallow, Bimbo).

The waffles and galettes productionwill be split between Meise in Flemish-Brabant and Courcellesin Hainault. Both factories will therefore make good use of the production line capacity.

FRANCE

Comines, Le Nord, specialises in filledwaffles, coconut products andFrangipane under the Cremers brand-name and private labels.

In Briec-de-l’Odet, Brittany, Le Glazikproduces the Breton butter speciali-ties: 4/4 bars, Mini 4/4, Madeleine,Gâteaux bretons, galettes and palets.

THE NETHERLANDS

Enkhuizen, North Holland, producesBattenbergs, Jumbos, Swiss Rolls,Jodekoeken and Sponge Fingers.

Amsterdam specialises in GlacéOriginals and Glacé Petits Fondants.

CZECH REPUBLIC

Lotus-Delta is a joint venture situatedin Kladno in the vicinity of Prague.From 1999, production of severalcakes began: these are destined forthe Czech and Slovak markets andmay also supplement the Benelux andFrench markets. This is a fallbackposition if the volume is otherwise toosmall for production in Benelux orFrance.

In Milin (at the South of Prague) thefactory is specialized in swiss rolls andsome biscuits. This production is alsoaimed at the Central- and East-euro-pean market.

Catalog-sales USA

12 13

In this section we explain how LotusBakeries is organised so that the Boardof Directors and the management areable to execute a proper policy and howrelationships with shareholders are organised.

1. COMPOSITION OF THE BOARD OF DIRECTORSThe Board of Directors consists perDecember, 31, 2001 of nine members:six of them respresent the majorityshareholder Bisinvest NV: Karel Boone,chairman and CEO, Matthieu Boone,COO, Stanislas Boone, Johan Boone,Pieter Boone and Antoine Stevens. Kareland Matthieu Boone are responsible forday-to-day management. In addition thereare three independent directors: Jean-Luc Dehaene, Chris Dewulf and PaulLippens. The responsibilities of the non-executive directors are mentioned onpage 35 in the composition of the Boardof Directors.

The mandate granted to Karel, Matthieu,Stanislas, Johan en Pieter Boone, ChrisDewulf and Paul Lippens expires at theGeneral Shareholders Meeting in May2005. The mandate granted to Jean-LucDehaene expires in May 2003. The man-date granted to Antoine Stevens expiresin May 2002 on account of him reachingthe age limit. It will be proposed to theGeneral Shareholders Meeting of May2002 that his son, Anton Stevens, shouldbe appointed as his successor for a period of three years.

The company’s Articles of Associationstate only that directors may be nomina-ted by the General Shareholders’Meeting by simple majority of votes. Theindependent directors are proposed bythe Board of Directors to the GeneralMeeting. In this respect the Board ofDirectors employ a set of criteria whichthey draw up beforehand. The age limit isfixed on seventy years and comes intoeffect on the next General Shareholders’Meeting after the 70th birthday.

2. FUNCTION OF THE BOARD OFDIRECTORSThe normal number of meetings of theBoard of Directors is six per year. Thiswas also the case in 2001.

The Board of Directors has, except whatis legally determined, the followingresponsibilities: determining strategy,annual and medium term planning,basic organisation, supervision of mana-gement, appointment of permanentmembers of the executive committee,decisions regarding the salaries of themembers of this executive committee,determination of the results and thevaluation rules, long-term financial com-mitments, mergers, acquisitions, strate-gic alliancies and disinvestments, com-munication policy, stock options andshares reserved for members of staff.The Board of Directors is also responsi-ble for organising good external andinternal 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 form anassessment of the company’s progress.

In addition, the necessary informationis provided on individual matters sothat decisions can be taken on strategy,organisation, important financial underta-kings, 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 membersof the Board is also provided for in aprocedure, approved by the Board ofDirectors.

4 Corporate governance

1514

The Board of Directors has approvedrules for the exercise of directors func-tions. They include a description of thetasks, the minimum number of mee-tings, the possibility of organising addi-tional meetings, drawing up the "order ofthe day", the necessary information tobe provided, the manner of decisionma-king, the rules relating to possible con-flicts of interest, the report, the reportingof committees and the possibility ofacquiring additional information.

The remuneration and/or other bene-fits granted to the members of theBoard of Directors are determined bythe Remuneration Committee. For the2001 financial year, the fees paid to alldirectors comes to 100,000 EUR intotal. This solely consists of the remune-ration as a member of the Board ofDirectors and is not the remuneration inthe case of a management task beingallocated. There is only a fixed remune-ration and there are not other benefits inkind or options.

The executive directors, thus only theCEO and the COO, receive – in additionto their director’s fee – a remuneration tobe specified by the RemunerationCommittee. This commission will baseits considerations on comparative stu-dies in accordance with the job contentand the size of the company. The feesare partly variable. The variable part isbased on the company’s progress andresults, in accordance with specific crite-ria. They also benefit from an optionplan, as do all management members ofthe Group (see further on point 4 underDay-to-Day Management).

The chairman of the Board of Directorsis also CEO. The presence of four non-executive directors and three indepen-dent directors in the Board of Directorsforms a sufficient counterweight.

The activities of the Lotus BakeriesGroup belong to the same line of busi-ness and form one whole. The Board ofDirectors is involved in the group policyand any practical actions at group levelwith possibly the specific results of theseparate sales organisations or productgroups.

3. COMMITTEES SET UP BY THEBOARD OF DIRECTORSThe Board of Directors handles all mat-ters under its competence itself, exceptthose entrusted to the remuneration

committee. As the number of membersis restricted to nine, and given the mediumsize of the company, other subjectscan be dealt with by the full Board ofDirectors.

The remuneration committee consistsof the three independent directors: theyasses the remuneration policy for allmanagement members and specify thesalary of the most senior managers. Inprinciple, the policy is determined fortwo years. This happened in 1999 andat the beginning of 2001

4. DAY-TO-DAY MANAGEMENTAND GROUP MANAGEMENTAs is explained in more detail on page22 there will a change in the organisationin the course of 2002, whereby the indi-vidual country organisations will bereplaced by an organisation per acti-vity domain in the entire group.

The management committee will thenbe replaced by an executive commit-tee consisting of the CEO, the COO, thegeneral manager operations, the corpo-rate director finance, the director salesand marketing Eurozone, the secretarygeneral and the senior manager(s) whois(are) directly involved with the topicbeing discussed.

The executive committee defines thepolicy decisions at group level, ensuresthat there is coordination, draws upcommon policy and determines thepriorities at group level. The committeewill as a rule meet once every twoweeks.

For each important domain there is thusa committee that prepares the decisionsof the executive committee or that orga-nises the execution of these decisions:one for operations (production, logisticsand the associated services), one forsales and marketing, and one foradministration, finances and informa-tion technology.

The remuneration committee of theBoard of Directors defines the remune-rations of the executive committee andapproves the remuneration structurefor the senior managers, higher manage-ment staff and other management levels.Every two years an investigation will beconducted into remunerations in Belgiumand neighbouring countries in order tofacilitate an external comparison of themost important functions. When the

actual calculation per function is donethen account will be taken of the actualfunction content in Lotus Bakeries, sothat there is an internal logic betweenthe remuneration levels.

In addition to the fixed remunerationthere is a variable incentive paymentwhich for the CEO and the COOdepend on the results of Lotus Bakeriesand is subject to well-defined criteria.For the other members of managementthe variable component is based on theresults of Lotus Bakeries, the objectivesachieved in the department and the per-sonal assessment.

There is an accompanying pension planprovided on the basis of a pre-definedcontribution. This pension scheme hasbeen placed with an insurance company.

The senior managers of Lotus Bakeries,which in 2001 totals 15 persons, togetherreceived a gross salary of 1,604,000 EURas a fixed remuneration and a variablesalary of 94,000 EUR which was basedon the results of 2000. They togetherreceived 3,649 share options.

5. POLICY CONCERNING APPROPRIATION OF PROFITSWith regard to the allocation of theprofits, the current policy is thatapproximately 30% of the current netprofit will be paid out in the form of divi-dends.

6. RELATIONS WITH THE MAJORITY SHAREHOLDERSAs stated on page 31, Bisinvest NVhas, according to the transparency-declarations, 57.34% of the LotusBakeries shares. Bisinvest’s shares areincorporated in the Stichting Admini-stratiekantoor van Aandelen Bisinvestin The Netherlands. This Institution has aBoard of Directors composed of twelvemembers. This Board of Directors dealswith subjects that are of direct interest tothe Institution, such as, for example,exercising pre-emption rights and rulesabout share transfers.

In addition, a group of natural personswho each hold less than 5% of thevoting rights, possesses, according tothe transparency declarations, 8.75% ofLotus Bakeries shares. They deal in con-sultation with Bisinvest NV. This groupdoes not have a committee.

IN 2001

APRIL-MAY

Change of company name toLotus Bakeries

At the beginning of April the companyname of the parent company Corona-Lotus was changed to Lotus Bakeries.

In the course of April and May thename of the subsidiaries in France,the Netherlands, Germany, Switzer-land and Luxembourg were changedrespectively to Lotus Bakeries France,Lotus Bakeries Nederland, LotusBakeries (GmbH), Lotus BakeriesSchweiz and Lotus BakeriesRéassurances.

SEPTEMBER

New joint venture agreementmade relating to Harry’s Benelux

At the end of September a new jointventure agreement was made betweenthe two partners of Harry’s Benelux,namely Lotus Bakeries and Harry’s(France). Through this Harry’s (France) increasedits participation in Harry’s Beneluxfrom 50% to 60% whilst LotusBakeries retained the remaining 40%.At the same time Harry’s France tookover the expenditure of a significantportion of the marketing investmentsof Harry’s Benelux.

IN 2002

MARCH

Lotus Bakeries acquires 100% ofInterwaffles

To make a restructuring of the pro-duction of waffles & galettes possible,an agreement was reached betweenthe two partners of Interwaffles, namelyLotus Bakeries and the NationalePortefeuille Maatschappij (NPM). As aresult of this, Lotus Bakeries tookover the 50% participation of NPM inInterwaffles in return for 52,500 newLotus Bakeries shares.

5 Report of the Board of DirectorsChanges in the group structure

SALES AND SALES PROMOTION

The consolidated turnover of theLotus Bakeries Group rose in 2001 by3.2% to 136.1 million EUR. Internalgrowth has been very limited as aconsequence of Interwaffles beingincluded in the consolidation for twelvemonths (compared to six months in2000) and through the change in theconsolidation method with respect toHarry’s Benelux. The switchover of thevarious local brands to the singlebrand name of Lotus was the reasonthat little commercial drive could bedeveloped. This has resulted in theturnover figure showing only a slightincrease. In the last five years (1996-2001) the consolidated turnover hasincreased by 78%.

The turnover developments in the vari-ous geographical markets are as follows:

BELGIUMTurnover in Belgium in 2001 amountedto 58.8 million EUR. With respect to2000 this represents an increase of8.4%. A significant portion of thisincrease is the result of externalgrowth, as was already stated above.

The switchover from a number oflocally important brand names tothe single Lotus brand name hasbeen positively received by clients andconsumers and sales developmentsunder the Lotus brand were favoura-ble. Switching the various wrappersfor the three product groups to thesingle brand Lotus has absorbed a lotof time and resources.

There was a market-specific infor-mation and communication cam-paign. The new TV commercial waslaunched in the autumn as an impor-tant component of this. This was

transmitted in the period betweenSeptember – November on all Belgiancommercial TV stations and its objec-tive is to communicate the content ofthe brand Lotus. It is expressed in theslogan "Lotus, deliciously cosy" andreflects what thorough research in thevarious markets and into the variousproduct groups has demonstrated forthe Lotus products:• Lotus products are unique, high

quality and delicious products• which moreover, can make any

moment wherever in the world a littlericher, a little more complete and alittle more cosy.

The increase in sales in Belgium in thelast five years amounts to 64.2%.

Harry’s Benelux, which launched thename Harry’s as a new brand name forpre-packed bread products in Belgium,showed very favourable turnoverdevelopment in 2001. Turnover increa-sed by 63%. The Harry’s Benelux pro-duct range has been taken up bypractically all important retail distribu-tion chains in Belgium. The furtherpromotion and support of the Harry’sbrand name in Belgium will require fur-ther considerable commercial invest-ments in the coming years. A signifi-cant proportion of these marketingcosts have been covered by Harry’sFrance since 2001.

THE NETHERLANDSIn the Netherlands the turnover fellslightly by 0.8% to 24.6 million EUR.Despite the strong products such asGlacés, Battenbergs and Jodekoekenwhich showed a favourable evolution,these products were unable to fullycompensate the turnover losses ari-sing from product rationalisations. Inthe last five years sales have risen by141%.

50 60 70 80 90 100 110 120 130 140

1997

1998

1999

2000

2001

119.48

131.82

136.08

88.45

102.83

EVOLUTION OF SALES in millions of EUR

17

Biscuiterie Vander SA (FR)• production filled waffles, frangipane Cremers and private

labels, coconut products

Biscuiterie Le Glazik SA (FR)• production Breton specialities• sales Brittany

Petit Breton SA (FR)• activities integrated in Biscuiterie

Le Glazik

Jeurgens Banket-, Biscuit- en Chocoladefabriek BV (NL)• production and sales sponge fingers

Swart Vicomte Ltd (GB)• activities integrated in the Group

Corona-Lotus, Inc. (US)• sales U.S.A

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

Lotus Bakeries GmbH (DE)• sales Germany and Austria

Lotus Bakeries Schweiz AG (CH)• sales Switzerland

Cremers-Ribert NV (BE) • production of waffles and galettes

Biscuiterie Andi NV (BE)• activities integrated in the Group

Margarinerie Hinnekens NV (BE)• production margarines and specialized fats

Harry’s Benelux NV (BE)• sales pre-packed bakery products Benelux

Prilabis NV (BE)• sales specific markets

Lotus Bakeries Réassurances SA (LU)• reinsurance company

Interwaffles NV (BE)• production and sales of waffles

Lotus Bakeries NV (BE)• parent company of the Group• production - caramelised biscuits

- cake specialities- cakes

• sales Belgium• logistics center Belgium

99.9 %

99.8 %

99.9 %

33.25 %

100 %

50 %

99.9 %

100 %

99 %

50 %

99.9 %

100%

98.7 %

35 % 20 %

40 %

99.7 %

99.9 %

100 %

The structure of the Lotus Bakeries Group at April 15, 2002 is as follows:

Kelsen Bakery s.r.o. (CZ)• activities integrated in Lotus-Delta

100 %

Lotus Bakeries France SA (FR)• holding France• sales France (except Brittany)

Lotus Bakeries Nederland BV (NL)• production - glacé's

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

• sales Netherlands

Legal structure of the Lotus Bakeries Group Activities in 2001

16

FRANCEIn France too there was a slight dropin turnover, namely 1.5%. Turnover in2001 amounted to 23.1 million EUR.Sales have increased by 43% since1996.

GERMANYIn contrast to previous years turnoverin Germany fell, specifically by 6.6%and amounted to 6.4 million EUR.Nevertheless the turnover develop-ment continues to be very positiveand with turnover almost quadruplingsince 1996.

GREAT BRITAINIn Great Britain Lotus Bakeries sellsthrough a network of various speciali-sed sales organisations. Turnover hereshowed a rise of 4.8% and amountedto 12.9 million EUR. This is 95% morethan in 1996.

USAIn the USA the turnover fell by 12% to4.8 million EUR. The turnover sufferedfrom the difficult conjuncture in the airtransport sector.

OTHERSales in the other markets developedin a highly positive manner. The incre-ase in turnover amounted to 16%. Inparticular sales in South-East Asia de-veloped in a very favourable manner.

NEW PRODUCTS

Given that Lotus Bakeries has, in thelast few years, taken over quite anumber of companies, the range ofproducts has been greatly expandedand strengthened with Cremers galet-tes, jam tartlets, jodekoeken, batten-

bergs, jumbos, swiss rolls, spongefingers, demi-lune quatre-quarts andvarious sorts of waffles.

This has resulted in a change ofemphasis in our policy concerning thedevelopment of new products. LotusBakeries does want to develop newproducts but should now be givingmore attention proportionally to theproducts from the companies it hastaken over.

In May 2001 a completely new jamtart was launched as part of therange of shorter shelf-life products.This product consists of a light, crispyflaky pastry shell filled with apricotjam.

Given that the consumer wants moreand more variety when it comes tobuying cookies and biscuits, LotusBakeries has developed a number ofnew packaging forms that capitalizeon this trend. Thus some family packsare combinations of individually wrap-ped caramelised biscuits, cakes andwaffles. This development has alsoseen the launch of the Cake Assort-ment, the Waffle Assortment andBakers Choice. A new variant wasintroduced to the market at the begin-ning of 2002: "28 moments". Thesales of these products are very successful.

INVESTMENTS AND INDUSTRIAL OPERATION

Investments in tangible and intangiblefixed assets (excluding acquisitions) bythe Lotus Bakeries Group amountedto 9.7 million EUR in 2001 comparedto 18.7 million EUR in 2000. This lat-ter amount was in 2000 strongly influ-enced by the construction of the newInterwaffles factory in Courcelles(taken into account for 50%).

The most important investment pro-jects concerned:• the construction of a new manufac-

turing line for the new jam tart inLembeke

• reorganisation and modifications toa production line in the factory inEnkhuizen

• packaging installation for 6-cerealcaramelised biscuits

• the construction of a new produc-tion line for waffles

• new crystallisor for the margarine

factory• ERP project: mainly the implemen-

tation of the SAP system• Single brand name Lotus: develop-

ment of the new TV commercial.

In addition a large number of invest-ments were once again made thatwere intended to further moderniseand automate the production, or toimprove quality, hygiene and safety inthe production sites.

In the Turnhout waffle factory thecost price is not competitive and theproduction volume is too low to coverthe structural costs. This factory thusran at a loss in 2001. Given thenecessity of producing important pro-ducts fully automatically and achievinga significant volume per factory, andthe fact that this is not the case atpresent in the Turnhout factory, wehave decided to close the Turnhoutfactory and to transfer production tothe new factory at Courcelles. Thismove will be completed by the end ofJune 2002.

Interwaffles built a new modern fac-tory in 2000, for the production ofwaffles under private labels. In thatperiod production had to be continuedin Alken and in Couillet (La Pascalou).These two factories failed to performproperly, resulting in heavy losses. Atthe end of December 2000 the newbuilding in Courcelles became opera-tional and the administrative offices inBuizingen were also closed. The firstthree lines of waffles went into opera-tion at the beginning of 2001, with theother three production lines beinginstalled and coming into productionin the course of the first six months of2001. The factory at Couillet was clo-sed in July.

Interwaffles now has a modernproduction facility that manufactureswaffles in a highly rational manner and

1918

Belgium 43.2%

Net

herl

and

s18

.1%

France 17.0%

Germany 4.7%

UK 9.4%

US

A 3.5%

Others 4.1%

New TV commercial to support the brand Lotus

New family pack with assortment of individually wrapped Lotus-products: "28 moments"

GEOGRAPHICAL SALES DISTRIBUTION

1997

1998

1999

2000

2001 9.65

14.08

4.79

5.13

0 5 10 15 20

18.68

INVESTMENTS in millions of EUR

20 21

at a high quality level. The factory isnow achieving good levels of efficien-cy but the quantities being producedare still too low. Through the restructu-ring of the production of waffles andgalettes within the Lotus BakeriesGroup the quantities produced atInterwaffles will rise considerably.

RESEARCH & DEVELOPMENT

The leadership of Lotus Bakeries setshigh standards in its three productgroups when it comes to productquality and places high demands inrespect of a very competitive costprice. Continual improvement of everyproduct is always being sought sothat it remains the user’s preferredproduct. If this is a task for every fac-tory, then it is also a task for the spe-cialised R&D department. After all, wewant to combine the experience andknowledge gained in the various pro-duct groups and factories, to classifyit and to expand it into more in-depthknowledge that can be used every-where.

The R&D department itself developsnew combinations, or develops themin collaboration with a factory. In addi-tion the department has a teachingfunction so that in every factory thereis sufficient knowledge present tokeep the quality optimal and so thatefforts are made to achieve perma-nent improvements.

The same policy is carried through inthe technical field, with tasks beingassigned to the factory and to theCentral technical service.

This system of combining and colla-borating makes the rapid applicationof new techniques possible, as well asthe realization of major automations orthe development of our own applica-tions.

QUALITY MANAGEMENT

As a producer of branded products itis essential that the quality of the pro-ducts is a cut above that of the mar-ket average and that the quality levelis constantly achieved.

Lotus Bakeries has, to that end, setup a system of quality managementthat is applied in all production cen-tres. For each topic clear guidelines

have been laid down:

• selection criteria for suppliers: thesuppliers will be approved on the basisof structured suppliers’ audits and onthe basis of the assessment of theperformance delivered in the year.

• specifications and controlsystems for raw materials andpackaging: in addition to the esta-blished specification for all rawmaterials and packaging detailedspecifications were drawn up forproduct safety. The incoming rawmaterials are inspected on thatbasis. In all production sites asystem is in place through which foreach lot of finished products theused lots of raw materials can beidentified (traceability).

• process description of the pro-duction: all production processeshave a complete description for thebenefit of the production so that aconstant quality can be obtained.

• quality of the finished products: inthe production a systematic qualityassessment has been introduced. Inaddition there is a central qualityassessment with a quality figure.

• quality and relationship with theclients: the complaints are dealtwith systematically and followed upfurther if necessary. In addition thereare procedures for dealing withserious complaints or a crisis.

• hygiene scheme: for all productionprocesses there are HACCP plansper production line. Systematicaudits will then be carried out on thebasis of hygiene checklists.

In addition to the internal audit of allthese aspects, external certification isalready in place or is planned for theimmediate future. Depending on thestage this relates to HACCP certifica-tion, BRC or ISO 9002.

To be able to guarantee the supply ofquality products, which arise as by-products of the production process,to the agricultural industry, the Belgiananimal fodder industry (in consultationwith the Dutch sector where a similarsystem had already been started) tookthe initiative to establish a quality gua-rantee system for animal feedstuffs.

This system is called the GMP animalfeedstuffs.

What this, in fact, means for LotusBakeries is that the waste flow of ani-mal feedstuffs is included in theexisting quality systems and the exter-nal auditors can verify this. For theDutch site this external inspectionround has been completed and thecertificate awarded. This will be achie-ved for the Belgian and French sitesprior to 30th June 2002.

ENVIRONMENT

Lotus Bakeries’ activities affect theenvironment in mainly two domains,these being packaging and the exploi-tation of the factories. In both domainsLotus Bakeries is continuing to workon decreasing its environmental impact.

ENVIRONMENT AND PACKAGINGLotus Bakeries continues to seekopportunities for limiting the amount ofpackaging and for materials that inaddition to meeting safety, reliabilityand consumer requirements are alsoenvironmentally friendly. The responsi-bility for this lies with the person res-ponsible for marketing so that everyendeavour will be taken to achievethese goals when developing or adap-ting products.

Lotus Bakeries has always been infavour of creating workable systemsthrough collaboration between the dif-ferent actors so that the managementof the packaging waste is part ofgood environmental management.Lotus Bakeries continues to activelywork on achieving this. In Germany,Belgium and France the company isrequired to take back the packagingwaste. This is achieved through colla-boration with manufacturers of dispo-sables, and the distribution and pac-kaging industries: Duales-System inGermany, Fost Plus in Belgium andEco-Emballages in France.

The Dutch companies participate inthe Covenant Packaging II, wherebythrough prevention attempts are madeto achieve certain objectives relatingto reuse, recycling and energy genera-tion. The obligation as a company tocontribute to minimising the environ-mental overload caused by packagingwaste within the Dutch marker fits intoour policy.

Staff members corporate department Quality

New automation packaging line caramelised biscuits (10x2 pieces)

ENVIRONMENT AND EXPLOITATIONIn this domain various environmentalaspects come to light. These aresystematically investigated and appro-priate measures taken so that negati-ve effects are removed or can bereduced. The waste products areattacked according to sort. In mostsites a water purification station isalready in operation or an investigationis being carried out into the best solu-tions so that consideration will also betaken with the government rulesapplying to that country. For the otherwaste products maximum recovery isthe solution sought (eg paper, carton)or incineration in specialised centres(eg packaging foils).

PERSONNEL AND ORGANIZATION

DEVELOPMENTS AMONG THEPERSONNELAt the end of 2001 Lotus BakeriesGroup employed a total of 1,169 per-sonnel. This is a fall of 45 personscompared to the end of 2000. A sig-nificant portion of this drop can beattributed to the closure of the Inter-waffles factory in Couillet, where anumber of the personnel did not acceptthe company’s offer of employment inthe new factory in Courcelles.

In contrast to all other figures relatingto the joint ventures Interwaffles andLotus-Delta whereby the LotusBakeries share, being the half, is takeninto consideration, these personnelfigures represent 100% of the person-nel in these joint ventures..

The number of personnel that workpart-time has risen by 12 persons to289 whilst the number of full-timeemployees has fallen by 57 personsto 880. This means that 25% of thepersonnel works in a part-time roster.

EVOLUTION OF THE ORGANIZATIONThe most important markets in whichLotus Bakeries is active, demonstratea greater unity through the internatio-nalisation of distribution. This unityhas been strengthened by the switchmade by the entire group to the singleLotus brand name. Greater commer-cial integration was thus inevitable.This is also true of the application ofthe SAP system in all sites and acrossall domains. In the production andtechnical fields too, Lotus Bakeries isstriving to spread the use of experienceand resources throughout the entiregroup.

A decision was taken to modify theorganization and to replace the natio-nal organizational structures withan organization per activity field:production and technique, sales andmarketing, administration and finan-ces,… This does not however preventthe actual commercial activity remai-ning as closely harmonised as possi-ble to the needs and possibilities ofeach market.

Alongside the executive committeethat fulfils the duties of the manage-ment committee, three committeeshave been set up that prepare or exe-cute the decisions of the executivecommittee. These committees areOperations (production, logistics andassociated services), Sales & Marke-ting, and Finance (administration,finances and information technology).

The day-to-day management is car-ried out on the one hand, by the CEO(chief executive officer) whose princi-pal duties encompass strategy, finance,human resources, public affairs andexternal communications, and on theother hand by the COO (chief opera-tional officer) who is responsible forproduction and technique, logistics,and sales & marketing.

DEVELOPMENT OF COSTS

The prices of raw materials showeda slight increase in 2001. After thevery sharp rise in energy prices seenin 2000, these stabilised in 2001 toreflect a slight increase. Packagingmaterials did show a significant incre-ase in price compared to the prices in2000.

The post, services and variousgoods, showed a considerable incre-ase. This was particularly related tothe high costs involved in switching anumber of locally important brands tothe single Lotus brand name. In addi-tion media costs of marketing andsupporting the new single brandname were also incurred.

The personnel costs showed anincrease that was slightly higher thanthe turnover development. As theInterwaffles factory in Couillet couldonly be closed in July 2001 and thenew Interwaffles factory in Courcellesincurred high personnel costs duringits first six months of operation, highpersonnel costs were also posted. Inthe factory in Turnhout, the relativepersonnel costs were high due to totalproduction volume being too low.

The depreciations on fixed assetsrose from 8.06 million EUR to 9.73million EUR in 2001. This increaserelates to the depreciations atInterwaffles, the increase in invest-ments in general and the investmentsmade in the ERP project and especi-ally in the Lotus brand name.

The financial costs once again roseconsiderably, as a consequence ofhigh investment costs in Interwaffles,higher interest rates than those of2000 and the less favourable resultsin general.

The depreciations on consolidationdifferences remained almost unchan-ged.

The exceptional result is almost enti-rely influenced by the costs of restruc-turing the production of waffles andgalettes, which is included as a provi-sion in the exceptional charges for2001. The planned restructuring costsinclude the costs of the social plan

Financial ratios in % of operating income2001 2000 1999 1998 1997

Added value 37.05 38.21 39.24 38.60 41.52Current net cash flow 6.68 8.43 9.76 8.90 10.85Current net profit (0.74) 2.42 3.46 3.13 3.73

Financial ratios in % of added value

Personnel expenses 73.60 68.64 67.86 68.51 63.96Depreciations (1) 18.92 15.34 14.33 15.11 15.22Taxes 1.50 3.13 2.50 3.37 3.58Net financial charges (2) 5.11 3.96 2.63 2.71 3.74Current net profit (1.99) 6.32 8.83 8.10 8.98

2322

(1) Not included depreciations on consolidation differences.

(2) Net financial charges is defined as financial result excluding depreciations on consolidation differences.Full-time

Part-timePERSONNEL

1997

1998

1999

2000

2001 51.44

52.54

48.31

40.13

37.26

30 40 50

1997

1998

1999

2000

2001 1169880289

1214937277

1012738274

948691257

796637159

600400200 800 1000 1200 1300

associated with the closure of theTurnhout factory, the costs of movingthe production lines and extraordinarydepreciations. This provision will beused in 2002 to cover the costs ofrealizing the restructuring in the first sixmonths of 2002 in the Turnhout factory.

A second important element of theexceptional charges is the provision ofa second repayment of the Maribel(this related to the reduction of socialcharges on the wages of workers inthe period between 1993 and 1997which as a consequence of a govern-ment decision has to be repaid). Thecost amounts to 124,000 EUR. A firstrepayment of the Maribel amountingto 300,000 EUR was noted as anexceptional charge in 1999.

PROFITABILITY

The year 2001 was primarily characte-rised by a number of strategicinvestments that incurred high costsbut which form the basis for furthergrowth in turnover and profitability inthe coming years.

The current results for 2001 were cha-racterised by a net loss that was cau-sed by various factors:

• The consolidated turnover onlyshowed a slight increase. The switch-over to the single Lotus brand namehas temporarily restricted the possi-bilities for a commercial push interms of activities and promotions.The switch has been positivelyreceived by clients and consumersand the development of sales underthe single Lotus brand is positive.

• Interwaffles had significant lossesin the first half year due to the start

of operations in the new factory inCourcelles and also due to the factthat the closure of the Couillet facto-ry could only be achieved in July.The factory is now achieving goodoutputs but the quantities beingproduced are still too low. This hasmeant that Interwaffles continued tomake significant losses in thesecond half of the year.

• The production volume in the fac-tory in Turnhout is too low to coverthe structural costs. This factoryconsequently suffered losses in2001.

• The implementation of the SAPinformation system throughout theLotus Bakeries Group is going well.The costs of transferring, trainingand settling in were taken intoaccount in financial year 2001.

Our joint venture in Czechia, Lotus-Delta, was still running at a loss in2001. The production is running welland following a reorganization whichincluded sales, better results werebeing achieved as from the end of2001.

Harry’s Benelux achieved a slightlypositive net result in 2001. This is dueto the strong increase in turnover andto the fact that Harry’s France coversa significant part of the marketingcosts of Harry’s Benelux.

As a result of these developments theoperating profit fell by 68.5% to 2.2million EUR. The ratio of operatingprofit to turnover was thus only 1.62%compared to 5.32% in 2000.

Because of a higher negative financialresult and a strongly negative excep-

tional result the results before taxesfell from 4.12 million EUR in 2000 to-3.72 million EUR in 2001. This resultwas greatly influenced by the costs ofrestructuring the production of wafflesand galettes which was included as aprovision of 2.5 million EUR in theexceptional charges in 2001.

The current net results show a lossof 1 million EUR compared to a profitof 3.3 million EUR in 2000. The netresults amounted to -4.32 million EURcompared to a net profit of 2.52 mil-lion EUR in 2000.

With the sharply increased deprecia-tions, the fall in the current net cashflow remained limited to 20% andamounted to 9.27 million EUR. Thenet cash flow fell from 11.89 millionEUR to 9.13 million EUR in 2001.

9,27

1997

1998

1999

2000

2001 10,29

3,328,28

12,024,267,76

9,253,256,00

9,743,346,40

864 10 12

(1,02)

11,60

Depreciation + amounts written off + provisionsfor liabilities and charges

Current net profit

EVOLUTION OF CURRENT NET CASH FLOW in millions of EUR

EVOLUTION OF ADDED VALUE in millions of EUR

2524

1. RESTRUCTURING OF THEPRODUCTION OF WAFFLES AND GALETTES On 14th February 2002 LotusBakeries made a proposal to theworks council of Cremers-Ribert NVfor the restructuring of its waffles andgalettes production.

A restructuring of the production ofwaffles and galettes is necessary inorder to achieve a competitive costprice within this product group that isimportant to Lotus Bakeries and thusto continue the internationalisation ofthis product group. Given the strongcompetition the company is facing inthe waffle market it is necessary toproduce the important products in afully automated manner and to achie-ve a high volume per factory. This iscurrently not the case in the Turnhoutfactory.

Following the necessary social consul-tations, the management of LotusBakeries decided to close theTurnhout factory and to transfer pro-duction to the new Interwaffles factoryin Courcelles, where production star-ted at the beginning of 2001.

Negotiations were subsequently con-ducted in respect of a social plan withthe representatives of the Turnhoutfactory personnel. These negotiationswere duly completed with the appro-val of a social plan for the workers

and office staff. These agreementswere reached in a constructive spiriton the part of all parties.

As a result of this reorganization theentire Lotus Bakeries waffles andgalettes production will be concentra-ted in two factories (Meise andCourcelles), which will make good useof production capacity and achieve acompetitive cost price.

The costs of the restructuring are esti-mated to be 2.5 million EUR and havebeen included as a provision in theresults of 2001. This provision will beused in 2002 in order to cover thecosts of realizing the restructuring inthe first half year of 2002 in the factoryin Turnhout.

2. AGREEMENT WITH NPM FORTHE TAKEOVER OF THE REMAI-NING 50% INTEREST ININTERWAFFLES To make the reorganization of wafflesand galettes production possible,Lotus Bakeries on 14th March 2002took over the 50% participation heldby the Nationale PortefeuilleMaatschappij in Interwaffles and thisfor a payment of 52,500 new LotusBakeries shares. Lotus Bakeries as aresult now has 100% participation inInterwaffles.The new Lotus Bakeries shares werecreated by an increase in capital ofLotus Bakeries.

Important facts after 31st December 2001

New factory of Interwaffles at Courcelles

2726

The internal growth of the consoli-dated turnover is estimated at 5%for 2002. This growth will be achievedthrough an increase in most marketsfor practically all significant products.The positive effect of the Lotus brandand the dynamic effects of publicityand promotional activities have amajor role to play in this. The integra-tion of Interwaffles for 100% as from1January 2002 will result in theconsolidated turnover growth risingto 8 to 9%.

Investments in fixed assets is esti-mated at 8 million EUR.In addition to a series of smallerinvestments in all sites, this consistsin particular of:• automation of a packaging line in

the caramelised biscuits factory• sprinkler system in Lembeke• automation of a packaging line in

Meise• investment in the Frangipane pro-

duction line in Comines• automation of a packaging system

in Briec-de-l’Odet• automation of the production of

Jumbos (giant Battenbergs) inEnkhuizen

• additional climate-controlled ware-house in the MargarinerieHinnekens

• investment in the second phase ofSAP: production, product costingand purchase.

The prices of a few important rawmaterials are rising: to a limitedextent for flour and sugar, but moresignificantly for eggs, fats and for chocolate. The prices of packagingmaterials are showing a slight increase.

The investments in the market,namely in terms of marketing and pro-motional costs will rise significantly in2002. In addition to an active promo-tional plan in all markets, further trans-mission of the TV commercial for thesingle brand name Lotus is expected.

Personnel costs, apart from thoselinked to the restructuring of the waffleproduction, will rise less rapidly thanthe turnover due to improvementshaving been made in the operation invarious fields.

Depreciations will show an increasedue to Interwaffles now being inclu-ded for 100% in the consolidation.

The restructuring costs, consistingof the costs for the social plan inTurnhout, the costs of moving theproduction lines and additional write-offs, are estimated at 2.5 million EURand are provided for as an extraordi-nary cost in 2001. The losses incurredduring the first half year of Interwafflesand the erection and operationalisa-tion at Interwaffles of the productionlines moved from Turnhout are com-pensated by the negative consolida-tion difference that arises from thetakeover of the 50% participation ofNPM in Interwaffles. Consequentlythese elements will not affect the2002 results. The losses incurred inTurnhout in the first half year will,however, have an impact and thepositive effect of the restructuring willonly be evident at the end of 2002.

For 2002 an increase in turnover of 8 to 9% is therefore expected, with anet profit of 3 million EUR and a netcash flow of 12.5 million EUR.

Prospects for 2002

Promotional campaign in 2002 with "Monsters" of Disney

29

CONSOLIDATED

The consolidated current net profit of the year 2001 shows a loss of 1.02 mil-lion EUR as compared to a profit of 3.32 million EUR last year. Depreciations onconsolidation differences amounted to 0.80 million EUR.

Taking into account exceptional results and depreciations on consolidation diffe-rences, the consolidated net loss amounted to 4.32 million EUR. The Group’sshare in this figure amounts to 4.37 million EUR.

STATUTORY

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

If the Ordinary General Meeting of shareholders of 10 May 2002 accepts theBoard of Directors’ proposal, the net dividend per share will amount to 0.52 EUR,after deducting a withholding tax of 25%. This net dividend will be payable asfrom May 21, 2002 on surrender of coupon n°14 at the Bank Degroof, Fortis,BBL, KBC, Artesia and Société Générale.

Results and proposal for division of profits

The results of the year 2001 of the parent company Lotus Bakeries NV are as follows: in EUR

• Profit of the financial year 612,643.12• Transfer from untaxed reserves 28,954.53• Transfer to untaxed reserves (25,605.47)Profit for the year available for appropriation 615,992.18

The Board of Directors proposes to appropriate the profit balance as follows:

• Transfer from reserves available for distribution (3,512.53)• Distribution of a gross dividend of 0.6933 EUR

to 750,537 shares (1) 520,347.30The dividend amounts to the half of that of 2000

• Distribution of emoluments to directors 99,157.41TOTAL 615,992.18

(1) The dividends on the purchased shares will be paid to Lotus Bakeries NV and,

as a consequence, will not be suspended.

EVOLUTION NET DIVIDEND in EUR

0,52

1,04

1,04

1,04

0,99

0,5 1 1,5

2001

2000

1999

1998

1997

28

NUMBER OF SHARES

• On 31 December 2001 there were750,537 shares of Lotus BakeriesNV. As per 15 April 2002 the num-ber of shares was 803,037 and thiswas after an increase in capital asper 14 March 2002 whereby 52,500new Lotus Bakeries shares werecreated.

• The shares are either nominal orbearer shares in denominations of1-10-50. To switch from nominalshares to bearer shares or vice-versa, the Secretariat-Generalshould be contacted.

STOCK MARKET LISTING

The Lotus Bakeries shares have beenlisted since the beginning of January2002 on the continuous market ofEuronext (Brussels). Previously, theshares have been listed on the spotmarket with double fixing. The sharecode is LOTB (ISIN code 0003604155).

LIQUIDITY AND VISIBILITY OFTHE SHARE

In order to increase the liquidity andvisibility of the Lotus Bakeries share,Lotus Bakeries obtained the NextPrime-label from Euronext at thebeginning of 2002.

In this context Lotus Bakeries hasalso appointed the stock market com-pany, Petercam NV, as "liquidity provi-der". The liquidity and market activa-

tion agreement that was agreed withPetercam, lies within the context ofthe care taken by Lotus Bakeries toensure a sufficiently active market inthe share so that in normal circum-stances adequate liquidity can bemaintained.

STRUCTURE OF SHAREHOLDINGS

Based on the transparency noticesreceived by Lotus Bakeries, the share-holding in Lotus Bakeries NV as of 15April 2001 is as follows:

• Bisinvest NV 57.34%• Group of natural persons

acting in concert with Bisinvest 8.75%

• NPM 6.54%• Own shares (1) 1.57%• Public 25.80%TOTAL 100.00%

(1) The voting rights associated with the shares

held by Lotus Bakeries NV have been suspen-

ded. The dividends have not been suspended

and will be paid out to Lotus Bakeries NV.

31

6 Stock market information

57.34%1.57%

8.75

%

6.54%

25.80%

Stock data about the Lotus Bakeries share in EUR

2001 2000 1999 1998 1997

Highest price 57.40 71.00 71.70 93.46 74.12 Lowest price 37.48 54.00 58.70 66.93 57.02Price per 31/12 42.80 56.00 68.00 71.64 66.93Market capitalisation per 31/12 32.12 42.03 51.04 53.50 49.98 in millions of EUR

Number of shares per 31/12 750,537 750,537 750,537 746,750 746,750Ratio price/earning (PER) (1) - 12.67 11.97 16.43 14.90Ratio price/cash flow (PCF) (2) 3.47 3.62 4.25 5.79 5.13

30

(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: Price Cash flow Ratio: The price at the end of the year divided by current net result, share of the Group + depreciations, amounts written off and

provisions, per share.

Lotus BakeriesBASR-Index

32

MARKET CAPITALISATION

On 31 December 2001, the marketcapitalisation amounted to 32.12 mil-lion EUR.

EVOLUTION OF THE PRICE OFTHE LOTUS BAKERIES SHARE

The graphic on page 30 reflects theprice-evolution of the Lotus Bakeriesshare in comparison with the BASR(Brussels All Share Return)-index. TheBASR-index reflects the price of thetotal Belgian market.

STOCKDATA ABOUT THE LOTUSBAKERIES SHARE

The charts with the consolidated keyfigures per share, respectively thestockdata of the Lotus Bakeriesshare, are mentioned on pages 2 and30 of this annual report.

FINANCIAL CALENDER

Friday May 10, 2002• Press conference presentation

annual report 2001• Ordinary General Meeting and

Extra-Ordinary General Meeting ofShareholders at the registered officeat 16.30h and 18.00h

Tuesday May 21, 2002Payment of dividend

Wednesday September 18, 2002Announcement of the half year report2002

Thursday March 13, 2003Announcement of the year results2002

Friday May 9, 2003General Ordinary Meeting ofShareholders

PROPOSALS TO THE GENERALORDINARY MEETING OF MAY 10, 2002

1. Proposal to approve the financialstatements dated December 31,2001.

2. Proposal to approve the proposeddistribution of profits which is detailedon page 29.

3. Proposal to discharge by separatevote the directors and the auditor fromtheir mandate during the year 2001.

4. Proposal for the appointment of MrAnton Stevens as a director of LotusBakeries NV for a period of threeyears. The mandate will lapse immedi-ately after the Ordinary GeneralMeeting of Shareholders in 2005.

CHANGES IN THE CAPITAL

In the financial year 2001 there havebeen no changes in the companycapital.

On 14 March 2002 the capital was in-creased by the amount of 95,895.55EUR, in order to raise it from1,370,917.26 EUR to 1,466,812.81EUR, by means of a share issue of52,500 shares with voting rights,which will enjoy the same rights andbenefits as the shares already inexistence as from 1 January 2002.The total number of shares issued byLotus Bakeries thereby amounts to803,037.

These new shares were allocated toNPM in compensation for bringing50% of the shares of Interwaffles intoLotus Bakeries. In addition an amountof 2,110,356.45 EUR was depositedon a non-accessible account "sharepremium account". Through theacquisition of 100% in Interwaffles itwas possible to restructure the waffle production.

PURCHASE OF OWN SHARES

The Extraordinary General Meeting on16 December 1999 granted theBoard of Directors of Lotus Bakeriesthe mandate, for a period of 18months, to purchase maximally 7,500Lotus Bakeries shares via the stockmarket at a unit price of between 5and 90 EUR.

The Extraordinary General Meeting of12 May 2000 once again granted theBoard of Directors a new mandate, fora period of 18 months, to purchasemaximally 7,500 Lotus Bakeries sharesvia the stock market at a unit price ofbetween 50 and 90 EUR.

A similar new mandate on the sameconditions as on 12 May 2000 wasgranted as a result of the ExtraordinaryGeneral Meeting held on 10 April 2001.

The purchases are intended, within thecontext of the share option scheme,the principles of which were approvedby the Board of Directors on 21 May1999 and 2 July 1999, to be able tosupply shares at the time at which theoption holder exercises his options.

In the course of 2001 no own shareswere purchased by Lotus Bakeries.The total number of shares purchasedsince 1999 up to 15 April 2002 num-bers to 12,659 and represents 1.57%of the total number of shares issued(as per 15 April 2002).

All stock market transactions wereexecuted in accordance with the vari-ous mandates granted by the Extraor-dinary General Meetings of sharehol-ders to the Board of Directors.

CONFLICT OF INTERESTS

(Articles 523 and 524 of the Compa-nies Code)

No situations arose in 2001 in which aconflict of interests occurred that wouldhave fallen under the applicability ofArticles 523 and 524 of theCompanies Code.

SERVICES PROVIDED BY THECOMPANY AUDITOR

In accordance with Article 134 of theCompanies Code we are obliged tostate that in the last financial year ourAuditor and the companies with whichit collaborated, carried out commis-sions for a total sum of 116,291 EUR.

33

7 Other company information

34

BOARD OF DIRECTORS AND AUDITOR

Composition of the Board of Directors

Baron Karel Boone Chairman and CEOMatthieu Boone COOPieter Boone Non-executive director

ConsultantStanislas Boone Non-executive director

ConsultantJohan Boone Non-executive director

DentistJean-Luc Dehaene Independent director

Director of companies Chris Dewulf Independent director

President and CEO of Netherlands Car BV (NedCar)Count Paul Lippens Independent director

Chairman of the Board of Directors of Suikergroep NVAntoine Stevens Non-executive director till 10/05/2002

RetiredAnton Stevens Non-executive director from 10/05/2002 (1)

Master in Law(1) Proposal for the appointment on the Ordinary General Meeting of May 10, 2002.

Auditor Ernst & Young Reviseurs d'Entreprises B.C.V. (B160) represented by Mr. Erik De Lembre, partner (till May 10, 2002) and Mrs. Rosita Van Maele, partner. The auditor has been appointed for a period of three years till the Ordinary General Meeting of shareholders of 2004, deciding over the annual accounts of the year 2003.

About Antoine StevensAs a consequence of reaching the age limit the mandate granted to Antoine Stevens will terminate at the Ordinary General Meeting on 10 May 2002. Antoine Stevens started his career at a young age in the cake factory run by his father Marcel Stevens. Later he took over the company from his father and became chairman of the Board of Directors upon the merger of Corona with Lotus. At the age of 60 he became a director and was not longer involved in the day-to-day management. The company owes a lot to Antoine Stevens, especially his positive attitude towards ensuring that the merger was successful and his enduring concern for quality and product improvement. The Board of Directors is highly appreciative of his contribution during a long and significant career in the Lotus Bakeries Group.

About Erik De LembreDue to reaching the age limit with Ernst & Young the work carried out by Erik De Lembre as the representative of Ernst & Young Reviseurs d’Entreprises in the capacity of Auditor with Lotus Bakeries will terminate as of 10 May 2002.Lotus Bakeries is very grateful to Erik De Lembre for the many years that he has served as the Auditor of Lotus Bakeries. His broad experience, knowledgeand insight have been very useful to Lotus Bakeries over the years.

8 Board of Directors, Auditor,Group management

35

GROUP MANAGEMENT Situation April 15, 2002 or in implementation

Group managementChief executive officer (CEO) Karel BooneChief operational officer (COO) Matthieu Boone

OperationsOperations Jan Vander Stichele General manager operations Production Lembeke Bert De Wit Director production LembekeProduction Lembeke Eddy Thijs Deputy-Director production LembekeProduction Oostakker Erik Claeyssens Plant manager OostakkerProduction Meise Toon Hubrechts Plant manager MeiseProduction Courcelles Frans Stevens Director production Courcelles Production Courcelles Guy Snackaert Deputy-Director production Courcelles Production Netherlands Hans Reints Plant manager Netherlands Production Comines Vincent Vigarié Plant manager CominesLogistics Johan Claerhout Director logisticsPurchase Karel Tack Director purchaseCentral technical services Dirk Verstraeten Director central technical servicesQuality Katrien De Vos Director qualityR&D Etienne Geirnaert Director R&D

Sales en Marketing (S&M)S&M Eurozone William Du Pré Director S&M EurozoneS&M Belgium Geert Verkinderen Director S&M BelgiumS&M Netherlands Henk Onrust Director S&M NetherlandsSales France Régis Dutoit Sales manager FranceSales Germany Frank Cohnen Sales manager GermanyExport Bart Bauwens Export manager

FinanceCorporate finance Wilfried Deleye Corporate Director financeFinance, consolidation, Joseph Bultynck Finance, consolidation andrisk and administration risk managerFranceIT and logistic information Luc De Backer IT and logistic information systems systems managerManagement information Philip Visser MIS and internal audit managersystems and internal auditAdministration Belgium Denis Pieters Manager administration BelgiumAdministration Netherlands Jan Groenewoud Manager administration Netherlands

GeneralHuman resources Belgium Rony Hoebeke Director human resources BelgiumSecretariat-General Filip Standaert Secretary-GeneralInterwaffles Erik Taelemans General manager Interwaffles

Netherlands (till 30 June, 2002) Tim de Vries General manager Netherlands

36

JOINT VENTURES

Margarinerie Hinnekens NVBoard of Directors Stanislas Boone Chairman

Karel BooneMatthieu BooneHervé HinnekensLuc Hinnekens

Production manager Els Van Parijs

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

Michael W. Mc Guire President & CEOKarel Boone Vice-President & TreasurerSandra E. Gale Vice-President & Secretary

Director Gary E. Payne

Lotus-Delta a.s. (Czechia)Board of Directors Marko Parik Chairman

Karel BooneMatthieu BooneEdmond Müller

Director Josef Polansky

Harry's Benelux NV (Belgium)Board of Directors Alain Strasser Chairman

Karel BooneMatthieu BooneBernard Dufayard

Brand Manager Magd Havermans

37

9 Financial statements

38

FINANCIAL STATEMENTS

Consolidated financial statements 40Balance after appropriation of profit 40Income statement 42Notes 43Comments 51Cash flow statement 53Auditor’s report 54Five year financial summary 55

Financial statements of Lotus Bakeries NV 56Balance sheet after appropriation 56Income statement 58Notes 59Social report 66Valuation rules 68Comments 69Auditor’s report 70

39

ASSETS in thousands of EUR 31-12-01 31-12-00

Fixed assets 60,273 60,862

I. Formation expenses 20 26

II. Intangible assets 7,362 7,364

III. Consolidation differences 1,494 2,244

IV. Tangible assets 50,344 50,737A. Land and buildings 20,253 16,602B. Plant, machinery and equipment 24,705 18,518C. Furniture and vehicles 4,043 3,055D. Leasing and other similar rights 388 393F. Assets under construction and advance payments 955 12,169

V. Financial assets 1,053 491A. Enterprises accounted for using the equity method 612 120

1. Participating interests 612 120B. Other enterprises 441 371

1. Participating interests and shares 33 262. Amounts receivable 408 345

Current Assets 37,153 42,529

VI. Amounts receivable after one year 6 10B. Other amounts receivable 6 10

VII.Stocks and contracts in progress 6,699 7,712A. Stocks 6,699 7,712

1. Raw materials and consumables 5,056 5,4642. Work in progress - 93. Finished goods 1,573 2,0724. Goods purchased for resale 70 167

VIII. Amounts receivable within one year 22,928 20,459A. Trade debtors 18,453 16,047B. Other amounts receivable 4,475 4,412

IX. Investments 847 847A. Own shares 847 847

X. Cash at bank and in hand 5,017 11,321

XI. Deferred charges and accrued income 1,656 2,180

TOTAL ASSETS 97,426 103,391

EQUITY AND LIABILITIES in thousands of EUR 31-12-01 31-12-00

Equity 22,061 25,443

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

II. Share premium account 188 188

IV. Consolidated reserves 18,884 23,684

VI. Translation differences 401 184

VII. Investment grants 1,217 16

Minority interests

VIII. Minority interests 611 574

Provisions, deferred taxation 6,932 4,027

IX. A. Provisions for liabilities and charges 6,173 3,2701. Pensions and similar obligations 349 4273. Major repairs and maintenance 120 1074. Other liabilities and charges 5,704 2,736

B. Deferred taxation 759 757

Creditors 67,822 73,347

X. Amounts payable after more than one year 20,239 22,930A. Financial debts 19,853 22,645

3. Leasing and other similar obligations 258 3144. Credit institutions 19,485 22,2885. Other loans 110 43

D. Other amounts payable 386 285

XI. Amounts payable within one year 47,033 50,332A. Current portion of amounts payable after more than one year 8,869 8,389B. Financial debts 15,028 19,102

1. Credit institutions 15,028 19,102C. Trade debts 15,237 15,834

1. Suppliers 15,237 15,6662. Bills of exchange payable - 168

E. Taxes, remuneration and social security 7,127 5,8201. Taxes 1,142 1,1452. Remuneration and social security 5,985 4,675

F. Other amounts payable 772 1,187

XII. Accrued charges and deferred income 550 85

TOTAL EQUITY AND LIABILITIES 97,426 103,391

Consolidated financial statementsCONSOLIDATED BALANCE AFTER APPROPRIATION OF PROFIT

40 41

2001 2000

I. Operating income 138,831 137,508A. Turnover 136,078 131,819B. Increase; Decrease in stocks of finished goods, (507) 783

work and contracts in progressC. Fixed assets - own construction 971 1,189D. Other operating income 2,289 3,717

II. Operating charges (136,624) (130,500)A. Raw materials, consumables and goods for resale 54,664 56,291

1. Purchases 54,159 56,8642. Increase, decrease in stocks 505 (573)

B. Services and other goods 32,726 28,677C. Remuneration, social security costs and pensions 37,863 36,065D. Depreciation of and other amounts written off formation

expenses, intangible and tangible fixed assets 9,733 8,058E. Increase; Decrease in amounts written off stocks, contracts in progress and trade debtors 159 156F. Increase; Decrease in provisions for liabilities and charges 399 69G. Other operating charges 1,080 1,184

III. Operating profit 2,207 7,008

IV. Financial income 683 446B. Income from current assets 230 241C. Other financial income 453 205

V. Financial charges (4,116) (3,272)A. Interest and other debt charges 2,759 2,109B. Amounts written on positive consolidation differences 803 746D. Other financial charges 554 417

VI. Profit on ordinary activities before taxes - 4,182Loss on ordinary activities before taxes (1,226) -

VII.Extraordinary income 482 527E. Gain on disposal of fixed assets 312 197F. Other extraordinary income 170 330

VIII. Extraordinary charges (2,978) (585)A. Extraordinary depreciation of and amounts written off formation expenses,

intangible and tangible fixed assets - 327C. Amounts written off financial fixed assets - 1D. Provisions for extraordinary liabilities and charges 2,500 -E. Loss on disposal of fixed assets 31 54F. Other extraordinary charges 447 203

IX. Profit for the year before taxation - 4,124Loss for the year before taxation (3,722) -

X.A. Transfer from deferred taxation 24 21

X.B. Transfer to deferred taxation (25) (14)

XI. Income taxes (771) (1,648)A. Income taxes (855) (1,665)B. Adjustment of income taxes and write-back of tax provisions 84 17

XII.Profit for the year of the consolidated companies - 2,483Loss for the year of the consolidated companies (4,494) -

XIII. Share in the result of the enterprises accounted 172 35for using the equity method

A. Profits 172 35

XIV. Consolidated profit - 2,518Consolidated loss (4,322) -

A. Share of third parties 45 80B. Share of the group (4,367) 2,438

Appropriation account

A. Profit to be appropriated (4,367) 2,438B. Transfer from reserves 4,987 -C. Transfer to equity - (1,297)F. Profit distribution Lotus Bakeries NV (620) (1,141)

NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS

I. CONSOLIDATED COMPANIES AND COMPANIES ACCOUNTING FOR USING THE EQUITY METHODOn page 61 the addresses of the companies named below can be found in point V.A. of the explanation of the non-consolidated financial statements.

A. Full consolidationProportion of capital held in %

Lotus Bakeries NV 100.00Margarinerie Hinnekens NV 55.00Prilabis NV 99.66Lotus Bakeries France SA 99.99Biscuiterie Vander SA 99.87Biscuiterie Le Glazik SA 99.96Lotus Bakeries Réassurances SA 100.00Lotus Bakeries GmbH 100.00Corona-Lotus, Inc. 50.00Cremers-Ribert NV 99.97Lotus Bakeries Nederland BV 100.00Swart Vicomte Ltd. 100.00Biscuiterie Andi NV 100.00Petit Breton SA 99.94Lotus Bakeries Schweiz AG 99.00

B. Proportional consolidationInterwaffles NV 50.00Lotus-Delta a.s. 50.00Kelsen Bakery s.r.o. 50.00

C. Associated enterprises accounted for using the equity methodJeurgens Banket-, Biscuit- en Chocoladefabriek BV 33.25Harry's Benelux NV 40.00

CONSOLIDATED INCOME STATEMENT in thousands of EUR

42 43

4544

Assets under construction andadvance paymentsInvestments and advances oninvestments that have been put for-ward but not yet concluded are notwritten off.

2.3 Financial assets

Participating interests and socialrightsThe shareholding is included in theconsolidated balance sheet as theamount that corresponds to theshare of equity of the company invol-ved, including the results for theaccounting year that this sharehol-ding embodies.

Social rights are valued at their pur-chase price.

Depreciation is applied where theestimated value of the financial fixedassets is less than the accountingvalue and where the loss of value sodetermined is of a lasting nature inthe opinion of the Board of Directors.Depreciations are taken back to thesum of the previously recordeddepreciations where the valuation atthe conclusion of the accountingperiod concerned significantlyexceeds the previous valuation.

Amounts receivable Receivables are valued at their nomi-nal value.

Reduction in value is applied if there isuncertainty about full or part paymenton the due date. Reduction in value isnot enforced to the extent that it ishigher at the end of the accountingyear than is required according tocurrent rating.

2.4 Stocks

Finished products were valued atstandard production cost price.Raw materials, consumables andgoods for resale were booked at thecost of acquisition using the FIFOmethod.For stocks, real depreciation wasapplied in the event that they had

become useless or if their practicalvalue or realisation value was lowerthan the cost price.

2.5 Amounts receivable

The receivables are booked at theirnominal value, after deducting thecredit notes still to be made.Receivables in foreign currencies wereconverted at the exchange rateapplying on the balance sheet date.Negative exchange rate differenceswere included in the income state-ment. The necessary depreciationhas been applied for receivables thecollection of which is in doubt.

2.6 Investments & cash at bankand in hand

Company shares are valued at theirpurchase price. Securities are valuedat their purchase price. Balanceswith financial institutions are valuedat their nominal value.

2.7 Investment grants

Capital subsidies are valued at theirnominal value after deducting thedeferred taxation.Deferred taxation will be expressedin the column deferred taxation.

2.8 Provisions for liabilities andcharges

Provisions have been made for allnormally foreseeable liabilities andcharges.

2.9 Amounts payable

Debts have been booked at theirnominal value.Debts in foreign currencies havebeen valued at the rate of exchangeon the balance date. Negativeexchange rate differences wereincluded in the income statement.The anticipated debts with regard tosingle and double holiday allowan-ces, redistribution of social securitycharges and personnel insurancehave been booked in full.

2.10 Positive consolidationdifferences

The consolidation goodwill or positivedifference on consolidation definedas the difference between the pur-chase value of the shares and thecorresponding share in the adjustedequity capital on the movement ofacquisition, is depreciated over aperiod of 5 years.

2.11 Negative consolidationdifferences

The maximum allocations to theindividual assets and liabilities itemswere used for the negative consoli-dation differences.

2.12 Conversion of currency

The financial statements of foreigncompanies have been translated intoBelgian francs at the rates of exchan-ge on the balance day as far asbalance sheet accounts are concer-ned, and at the average rates ofexchange of the financial year forprofit and loss accounts. Historicalexchange rates have been appliedfor equity. Any translation differenceshave been recorded under a separateheading of equity called "Translationdifferences".From 1995, the consolidated resulthas been included in the consolida-ted reserves at the average rate ofexchange.

V. CONSOLIDATION PROCEDURES

1. Consolidated companies

Has been excluded from the consoli-dation:from January 1, 2001: Harry's Benelux NV

All companies affiliated to the LotusBakeries Group were included in theconsolidation.

2. Consolidation methods

Full consolidation

The full consolidation method is usedfor companies which are directly orindirectly controlled by Lotus BakeriesNV, either de facto or de jure. Theconsolidated financial statements arethe result of the individual financialstatements of all the companies inthe Lotus Bakeries Group that areincluded in the consolidation.

The headings of balance sheet andincome statements of consolidatedcompanies have been fully includedin the corresponding headings of theconsolidating company, with theexception of inter-company transac-tions and with a mention of the rightsof third-party shareholders and anyconsolidation difference. Outsideshareholder interests have beenidentified in the balance sheets andincome statements under the hea-ding of "minority interests".

Proportional consolidation

The proportional method is applied tothe joint ventures, except for the salesorganisations that only sell productsfrom the Lotus Bakeries Group, whichdetermined the policy implemented.These companies are consolidatedaccording to the full consolidationmethod. The headings of the balancesheet and the income statement ofthe consolidated companies will beincluded according to the share ofthe group in the capital and addedto the identical headings of the con-

solidating company. The inter-com-pany transactions will be eliminatedaccording to the share of the groupin these transactions. Any consolida-tion difference will be expressed.

3. Equity method

Companies in which no exclusive orjoint control can be exercised on thepolicy orientation, but where there isa significant interest, qualify as affilia-ted companies and are included inaccordance with the equity method.These are companies in which at least20%, but in principle not more than50% of the voting rights are directlyand indirectly retained.

In this method, the book value thatthe affiliated company has in thecompany, is replaced by the corres-ponding share in the equity of theaffiliated company, after separatingthe consolidation differences. Theshare in the results of the affiliatedcompany involved are mentionedseparately in the consolidated profitand loss account.

4. Balance sheet date

All the companies included in theconsolidation have 31 December astheir balance sheet date.

VI. A. METHODS OF VALUATION

1. In general

The consolidation for 2001 is in accor-dance with the Royal Decree on theconsolidation of financial statements,dated March 6, 1990. The assetsand liabilities of all the separate com-panies have been restated on thebasis of standard economic rules ofvaluation.

Where necessary, the presentation ofthe financial statements of affiliatedcompanies abroad has been rearran-ged in order to bring them into linewith the general accounting systemas applied in Belgium.

2. In particular

2.1 Formation costs

Establishment costs are written offon a linear basis over a period of fiveyears.

2.2 Intangible and tangible fixedassets

The intangible and tangible fixedassets are valued at their purchasevalue and included in the balancesheet for that amount, after theappropriate depreciation has beendeducted. Purchase value refers tothe purchase price, the manufactu-ring price or the input price.

The depreciation and the net bookvalue of the fixed assets of the indivi-dual companies are reworked on thebasis of economically sound groupregulations.

The assets are written off on a linearbasis from the month they come intouse.

For this purpose the following per-centages of depreciation have beenapplied.

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

The depreciation of clients over tenyears is justified by the stable clientrelationships that have been realizedthrough the brands Lotus, Corona,Cremers and Suzy and which arenow housed under the single brandLotus.

Tangible fixed assets:• buildings 5%• installations and equipment 10%• basic machinery 10%• current machines,

equipment, furniture 20%• equipment subject to fast

wear and tear, software 33%• vehicles 20%

IX. STATEMENT OF TANGIBLE FIXED ASSETS in thousands of EUR

Land Plant, Furniture Leasing Other Assetsand machinery and and tangible under

buildings and vehicles other assets constructionequipment similar and advance

rights payments

a) ACQUISITION COSTAt the end of the preceding year 29,113 82,005 12,488 393 4 12,169Movements during the year:

• Acquisitions including fixed assets, own production 406 5,234 568 - - 2,410

• Sales and disposals (411) (1,072) (340) - - (2)• Transfers from one

heading to another 4,713 6,924 1,986 - - (13,623)• Translation differences 172 116 11 38 - 1

At the end of the year 33,993 93,207 14,713 431 4 955

c) DEPRECIATION AND AMOUNTSWRITTEN DOWNAt the end of the preceding year 12,511 63,487 9,432 - 4 -Movements during the year:

• Recorded 1,259 5,850 1,529 41 - -• Sales and disposals (47) (878) (295) - - -• Transfers from

one heading to another - 3 (3) - - -• Translation differences 17 40 7 2 - -

At the end of the year 13,740 68,502 10,670 43 4 -

d) NET BOOK VALUE ATTHE END OF THE YEAR 20,253 24,705 4,043 388 - 955

of which: plant, machinery and equipment 388

VI.B. FUTURE TAXATION AND DEFERRED TAXES in thousands of EUR 2001

Analysis of heading IX.B. of the liabilities 759• Future taxation 759

VII. STATEMENT OF FORMATION EXPENSES in thousands of EUR 2001

Net book value as at the end of the preceding year 26Movements during the year:• New expense incurred 5• Depreciation (10)• Other (1)Net book value at the end of the year 20of which:• Expenses of formation or capital increase,

loan issue expenses, reimbursement premium and other formation costs 20

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 19 256 9,073 179Movements during the year:

• Acquisition, including fixed assets, own production - 1,030 - -• Transfers from one heading to another - 303 (124) (179)• Translation differences - - 14 -

At the end of the year 19 1,589 8,963 -c) DEPRECIATION AND AMOUNTS WRITTEN DOWN

At the end of the preceding year 19 190 1,953 -Movements during the year:

• Recorded - 168 876 -• Translation differences - - 3 -

At the end of the year 19 358 2,832 -

d) NET BOOK VALUE AT THE END OF THE YEAR - 1,231 6,131 -

46 47

XII. STATEMENT OF CONSOLIDATION DIFFERENCES AND DIFFERENCES RESULTING FROM THE APPLICATION OF THE EQUITY METHOD in thousands of EUR 2001

Consolidation Differences differences resulting from the

application of theequity method

positive positiveNet book value at the end of the preceding year 2,224 20

Movements during the year:• Write-downs (783) (20)• Other modifications 53 -

NET BOOK VALUE AT THE END OF THE YEAR 1,494 -

XIII. STATEMENT OF AMOUNTS PAYABLE in thousands of EUR 2001

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

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

1 year years

Financial debts 8,869 16,938 2,9153. Leasing and other similar obligations 86 258 -4. Credit institutions 8,783 16,570 2,9155. Other loans - 110 -

Other amounts payable - 386 -

TOTAL 8,869 17,324 2,915

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

Guaranteed amounts payable by real guarantees

Financial debts 4,9894. Credit institutions 4,989

TOTAL 4,989

X. STATEMENT OF FINANCIAL FIXED ASSETS in thousands of EUR

Enterprises Other accounted enterprises

for usingthe equity

method

1. Participating interestsa) ACQUISITION COST

At the end of the preceding year 120 73Movements during the year:

• Sales and disposals - (3)• Transfers from one heading to another 320 -

At the end of the year 440 70c) AMOUNTS WRITTEN DOWN

At the end of the preceding year - 1Movements during the year:

• Written down after sales and disposals - (1)At the end of the year - -

d) UNCALLED AMOUNTSAt the end of the preceding year - 47Movements during the year: - (10)At the end of the year - 37

e) MOVEMENTS IN THE CAPITAL AND RESERVES OF THE ENTERPRISES ACCOUNTED FOR USING THE EQUITY METHOD 172 -

• Share in the result for the financial period 172 -

NET BOOK VALUE AT THE END OF THE YEAR 612 33

2. Amounts receivableNET BOOK VALUE AT THE END OF THE PRECEDING YEAR - 345

Movements during the year:• Additions - 33• Reimbursements - (1)• Translation differences - 31

NET BOOK VALUE AT THE END OF THE YEAR - 408

XI. STATEMENT OF CONSOLIDATED RESERVES in thousands of EUR 2001

Consolidated reserves at the end of the previous financial period 23,684Movements:

• Shares of the group in the consolidated income (4,367)• Diminution due to distribution (620)• Other modifications (investment grants, …) (1)• Change in consolidation scope 188Consolidated reserves at the end of the financial period 18,884

48 49

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 58,816 54,243

B. AVERAGE NUMBER OF PERSONS EMPLOYED in units 2001 2000AND PERSONNEL CHARGES in thousands of EUR

B. 1. Fully consolidated enterprisesB.11. Average number of persons employed 1,043 1,048Workers 728 761Employees 284 258Management personnel 31 29B.12. Personnel chargesRemunerations and social charges 36,136 35,003Pension costs 130 53B.13. Average number of persons employed in Belgium by companies of the group 697 699

B. 2. Proportionnally consolidated enterprisesB.21. Average number of persons employed 133 155Workers 96 118Employees 36 35Management personnel 1 2B.22. Personnel chargesRemunerations and social charges 1,461 1,003Pension costs 135 6B.23. Average number of persons employed in Belgium by companies of the group 75 93

XV. RIGHTS AND COMMITMENTS NOT REFLECTED IN THE BALANCE SHEET in thousands of EUR 2001

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 6,135

A.5. b) Commitments from transactions• to exchange rates 3,645• to prices of raw materials or goods purchased for resale 7,725

XVII. FINANCIAL RELATIONSHIPS WITH DIRECTORS OR MANAGERS OFTHE CONSOLIDATION ENTERPRISE in thousands of EUR 2001

A. 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 415

Additional informationThe total package of own shares amounts to 12,659 and represents 1,7% of the total number of shares,which is 750,537 as per December 31, 2001. Lotus Bakeries NV did not buy any own company shares in 2001.

50

COMMENTS ON THE CONSOLI-DATED FINANCIAL STATEMENTS

1. The consolidated accounts werecalculated after the proposed LotusBakeries NV profit distribution

2. ASSETS

The intangible fixed assets consis-ted at the end of 2001, in addition toclientele and brands, the investmentsin 2001 in licences and developmentof the SAP information system. As aresult the net book value remainedalmost unchanged at 7.36 million EUR.

The positive consolidation differen-ces will be written off in 5 years, as aconsequence of which these fell by0.75 million EUR to 1.49 million.

The net book value of the tangiblefixed assets fell slightly. The invest-ments in tangible fixed assets in 2001amounted to 8.62 million EUR com-pared to 18.10 million EUR in 2000.This latter was a consequence of theinvestments made in the new wafflefactory in Courcelles, on which therewere write-offs as from 2001. The 2001investments were mainly related toproduction equipment.

Via an agreement with Harry's(France) the participation of LotusBakeries NV in Harry's Benelux, a jointventure for the sale of prepackedbakery-products in the Benelux wasreduced in 2001 from 50% to 40%.Consequently Harry's Benelux will becalculated in the consolidation as from2001 via the equity method. Thisexplains the principal points of theincrease in the financial fixed assets.

The stocks fell by 1.01 million EUR.This drop related to both the stocks of

raw materials and packaging as wellas finished goods.

The trade debts rose by 2.4 millionEUR. The increase in the share takenby exports to the other countries inthe turnover figure and a temporarilydelayed follow-through as a conse-quence of the implementation of SAPrepresent the main causes behind thisincrease as per 31 December 2001.The average number of days of clientcredit rose as a result by 5 days to 49days.

The other debts remained almostunchanged. At the end of 2001 thispost consisted, to a significant extent,of reclaimable indirect and directtaxes, in addition to capital subsidiesto be received by Interwaffles as wellas compensation still to be receivedfrom the insurance company as aresult of the fire in the Interwaffles factory in Buizingen.

The cash at bank and in hand fell by6.3 million EUR in part through theapplication of a better cash manage-ment method.

The share of the current assets in thetotal of the assets fell slightly by 3% to38.1%, principally as a result of a dropin the stocks and the liquid assets.

3. LIABILITIES

The reserves shrank by 4.8 millionEUR due to the negative result in2001, in which the restructuring costsfor the closure of our factory inTurnhout amounting to 2.5 millionEUR are fully taken into account, andthe dividend payment.

The investment grants post includessubsidies awarded to Interwaffles for

the construction and bringing intooperation of the new factory inCourcelles.

The provisions for risks and costsrose by 2.9 million EUR, principallythrough the provision made for therestructuring of the production of waf-fles and galettes. This provision inclu-des all estimated costs relating to thesocial plan for closure, the exceptionalwrite-offs and the costs of moving theproduction lines to Courcelles. Thispost also includes the provision crea-ted by Lotus Bakeries Réassurancesto cover risks that are difficult to insure.

Financial debts payable after morethan one year reduced by 2.8 millionEUR through capital repayments onthe long term credits.

Short-term financial debts also fell,and by 4.1 million EUR, in part as aconsequence of the application of abetter cash management method. Asa result of the lower short-term inte-rest rate a significant portion of thefinancing was retained in short-termcredits. The interest rate risk of theseis covered in the long term by options.

The greater than commensuratereduction of equity as a consequenceof the provision for restructuring resul-ted in solvability being reduced by1.97% to 22.64%. The liquidity ratioalso fell through this by 0.06 to 0.78.The positive effects of the restructu-ring and the expected improvement inresults in 2002 should push both thesolvability ratio and the liquidity ratioback up in 2002.

4. INCOME STATEMENT

The operating income rose only byapproximately 1% to 138.83 million

Statement of the financial debts originally payable after one year of the Lotus Bakeries Group itemised by due date in thousands of EUR

Debts falling 2002 2003 2004 2005 2006 later Total

Financial debts• Leasing debts and

similar debts 86 86 86 86 - - 344• Credit institutions 8,783 7,060 5,145 3,757 608 2,914 28,267• Other loans - 27 27 27 27 - 108TOTAL 8,869 7,173 5,258 3,870 635 2,914 28,719

51

2001 2000

Net cash flow 9,133 11,887Change in stocks 866 (880)Change in trade debtors (2,418) (1,433)Change in other debtors (63) (1,380)Change in deferred charges and accrued income 524 (820)Change in trade creditors (597) 844Change in other creditors 892 (731)Change in accrued charges and deferred income 465 (114)Change in receivable after one year 4 3Change in provisions - 506Change in deferred taxation - (28)

Change in operating net working capital (327) (4,032)Gain on disposal of fixed assets (312) (197)Exchange translation differences from other items than from fixed assets (102) 85

Increase in cash provided (used in) operating activities 8,392 7,744

Investing activitiesSale of intangible and tangible fixed assets 886 1,865Purchase of tangible fixed assets (8,618) (21,276)Purchase of intangible fixed assets (1,030) (2,084)Purchase of formation expenses (4) (28)Change in financial assets (39) 2,027Consolidated participating interests (185) (432)

Decrease in cash provided by (used in) investing activities (8,990) (19,928)Free cash flow for financing activities (598) (12,184)

Financing activitiesDividends and director's emoluments to be paid (620) (1,141)Increase of capital - -Change in long-term financial debt 6,178 22,353Repayment of current portion of amounts payable after one year (8,389) (2,993)Change in short-term financial debt (4,075) (3,762)Investment grants 1,200 (6)

Increase of cash provided by (used in) financing activities (5,706) 14,451

Net increase in cash (6,304) 2,267at the beginning of the financial year 12,168 9,901at the end of the financial year 5,864 12,168

Change in cash (6,304) 2,267

CASH FLOW STATEMENT in thousands of EUR

Financial ratios in % of operating income

2001 2000 1999 1998 1997

• Days customer credit 49.00 44.00 45.00 47.00 47.00• Solvency ratio (%) 22.64 24.61 28.05 30.91 33.94• Liquidity ratio (Current ratio) 0.78 0.84 0.74 0.89 0.99• Gross operating margin (%) 9.03 11.28 11.83 11.22 13.93• Current net profit/

Operating income (%) - 2.42 3.46 3.13 3.73• Current net cash flow/

Operating income (%) 6.68 8.43 9.76 8.90 10.85• Current net cash flow/

Net financial debts (%) 24.47 30.55 48.23 51.15 106.80• Current net cost-effectiveness

of equity (%) - 13.06 17.71 14.35 16.22

5352

EUR. The increase in turnover fellshort of expectations and amountedto 3.23%. This increase in turnover isin part attributable to Interwafflesbeing included in the consolidation forthe full year, compared to a half yearin 2000. Internal turnover growthhowever remained restricted.

Services and various goods rose by40.5 million EUR. The introduction ofthe single brand name Lotus in 2001caused significant external costs inthe domain of alterations to packa-ging, communication and publicitysupport. The inclusion in 2001 ofInterwaffles in the consolidation meantthis increase was even more sharp.The added value fell slightly throughthese elements by 1.1 million EUR.

In 2001 significant internal performan-ces were delivered in the context ofthe operational implementation of theSAP system. Together with the inclu-sion of Interwaffles in the consolidationfor a full period this explained theincrease seen in personnel costs of5%, which was higher than the increa-se seen in operating income. Theshare of personnel costs in theadded value rose as a result by4.96% to 73.60%.

Provisions for risks and costs roseby 0.33 million EUR. In 2000 provi-sions were used in the Netherlands toaccount for costs incurred.

The high investments made in 2000 inthe new Interwaffles factory, whichcame into operation in January 2001,will be written off as from 2001. At thesame time the investments made in

the SAP project will be written off asfrom the operational start at the begin-ning of 2001. This explains the increa-se of 1.68 million EUR in write-offs.Write-offs now represent 18.92% ofthe added value, or an increase of3.58%.

The operating profit fell throughthese developments by 4.8 millionEUR, mainly as a result of the lossesat Interwaffles and Turnhout, throughthe high costs of the introduction ofthe single brand name Lotus, and theimplementation of the first importantphase of the SAP information project.

The gross operational cash flowamounted to 12.5 million EUR, a fall of18.26%. The gross sales marginreduced as a result by 2.25% andamounted to 9.03% for 2001.Bringing the new factory in Courcellesinto operation and the losses atInterwaffles and Turnhout are the mostimportant explanations for this. In res-pect of the other activities the marginremained at the level seen in 2000.

Through the lower operating profit andcash flow the financial debts fell lessrapidly. Together with the on averagehigher interest rates in 2001 and thefinancing of Interwaffles for a full yearthe financial cost of debts rose by0.65 million EUR. The net financial charges, defined asfinancial result excluding depreciationson consolidation differences, amoun-ted to 5.11% of the added value com-pared to 3.96% in 2000.

Due to the lower operating profit andthe higher net financial charges the

negative current net result in 2001was 1.02 million EUR compared to apositive current net result of 3.32 mil-lion EUR in 2000.

The current net cash flow, definedas current net result increased by thewrite-offs, provisions and deprecia-tions amounted to 9.27 million EUR.In relation to the operating income thecurrent net cash flow represented6.68% compared to 8.43% in 2000.In relation to the net financial debts(defined as the financial debts redu-ced by the investments and the cashat bank and in hand) the current netcash flow amounted to 24.47 compa-red to 30.55% in 2000.

The write-offs on the positive con-solidation differences are included inthe financial costs and amounted to0.80 million EUR.

The other exceptional costs con-sisted of the provision for restructuringcosts for the closure of the Turnhoutfactory and also the additional taxesto be repaid in connection with theMaribel support during the period ’93-’97. The exceptional incomerelated mainly to proceeds from thesale of tangible fixed assets.

The net result was -4.32 million EUR.The net cash flow amounted to 9.13million EUR compared to 11.89 millionEUR in 2000, which represents adecrease of 23.2%.

5. FINANCING

Through the relatively good net cashflow the increase in cash provided by

operating activities amounted to8.39 million EUR compared to 7.74million EUR in 2000. The investments,particularly in tangible and intangiblefixed assets absorbed 8.99 millionEUR in financial resources, as a resultof which the free cash flow for finan-cing operations was slightly negativeat -0.60 million EUR.

On balance the financial debts redu-ced by 6.29 million EUR. Both thefinancial debts in the long term as wellas in the short term reduced througha better cash management system.Short-term financial debts fell the

most. As a consequence mainly of areduction in the cash at bank and inhand, the net cash position (cash atbank and in hand and investmentsminus financial debts in the shortterm) reduced by 2.23 million EURand amounted at the end of 2001 to -9.16 million EUR. Through this nega-tive result the net working capital atthe end of 2001 amounted to -10.44million EUR compared to -7.90 millionEUR at the end of 2000. The net wor-king capital requirement amounted to-1.27 million EUR.

As a consequence of the lower inte-

rest rate the financing in the shortterm was retained. The interest risk iscovered by long-term interest options.

31-12-01 31-12-00 31-12-99 31-12-98 31-12-97

Fixed assets 60,273 60,862 49,903 39,748 33,248Intangible assets 7,362 7,364 6,005 3,530 3,887Tangible assets 50,344 50,737 38,834 32,324 28,849Financial assets 1,053 491 2,484 1,465 53Current Assets 37,153 42,529 35,909 33,577 27,491Stocks and contracts in progress 6,699 7,712 6,858 6,467 5,270Amounts receivable within one year 22,928 20,459 17,776 15,735 13,601Investments 847 847 4,177 4,326 2,586Cash at bank and in hand 5,017 11,321 5,724 5,614 5,010

TOTAL ASSETS 97,426 103,391 85,812 73,325 60,739

Equity 22,061 25,443 24,071 22,665 20,617

Provisions and deferred taxation 6,932 4,027 3,487 4,761 4,978

Creditors 67,822 73,347 57,750 45,445 34,726Amounts payable after more than one year 20,239 22,930 8,965 7,815 7,049Financial debts 19,853 22,645 8,965 7,797 5,014Amounts payable within one year 47,033 50,332 48,587 37,103 27,086Financial debts 23,897 27,491 25,857 20,234 11,703

TOTAL EQUITY AND LIABILITIES 97,426 103,391 85,812 73,325 60,739

CONSOLIDATED INCOME STATEMENT in thousands of EUR 2001 2000 1999 1998 1997

Operating income 138,831 137,508 123,104 103,974 89,742Turnover 136,078 131,819 119,477 102,832 88,450

Operating charges (136,624) (130,500) (116,390) (98,191) (83,674)

Operating profit 2,207 7,008 6,714 5,783 6,068

Financial income 683 446 392 581 851

Financial charges (4,116) (3,272) (2,416) (1,902) (2,309)Amounts written on positive consolidation differences 803 746 752 231 66

Profit (Loss) on ordinary activities before taxes (1,226) 4,182 4,690 4,462 4,610

Extraordinary income 482 527 222 376 93

Extraordinary charges (2,978) (585) (1,353) (140) (119)

Profit (loss) for the year before taxation (3,722) 4,124 3,559 4,698 4,584

Income taxes and deferred income (772) (1,641) (1,224) (1,461) (1,331)

Profit (loss) for the year of the consolidated companies (4,494) 2,483 2,335 3,237 3,253

Consolidated profit (loss) (4,322) 2,518 2,382 3,257 3,253Consolidated profit (loss) share of the group (4,367) 2,438 2,323 3,204 3,221

55

Five year financial summary Lotus Bakeries group

CONSOLIDATED BALANCE AFTER APPROPRIATION OF PROFIT in thousands of EUR

54

AUDITOR’S REPORT ON THECONSOLIDATED FINANCIAL STA-TEMENTS FOR THE YEAR ENDEDDECEMBER 31, 2001

To the shareholders’ meeting ofLotus Bakeries NV

In accordance with legal and regula-tory requirements, we are pleased toreport to you on the performance ofthe audit mandate which you haveentrusted to us.

We have audited the consolidatedfinancial statements as of and for theyear ended December 31, 2001which have been prepared under theresponsibility of the board of directorsand which show a balance sheet totalof 97,426 thousands of EUR and aconsolidated loss of 4,322 thousandsof EUR. We have also examined theconsolidated directors’ report.

Unqualified audit opinion on theconsolidated financial statements

We conducted our audit in accordan-ce with the standards of the "Institutdes Reviseurs d’Entreprises/Instituutder Bedrijfsrevisoren". Those stan-dards require that we plan and per-form the audit to obtain reasonableassurance about whether the consoli-dated financial statements are free ofmaterial misstatement, taking intoaccount the legal and regulatory requi-rements applicable to consolidatedfinancial statements in Belgium.

In accordance with those standards,we considered the group’s administra-tive and accounting organisation, aswell as its internal control procedures.We have obtained explanations and

information required for our audit. Weexamined on a test basis, evidencesupporting the amounts in the consoli-dated financial statements. We haveassessed the validity of the accountingprinciples, the consolidation policiesand significant accounting estimatesmade by the company, as well as theoverall presentation of the consolida-ted financial statement. We believethat those procedures provide a rea-sonable basis for our opinion.

In our opinion the consolidated finan-cial statements give a true and fairview of the group’s assets, liabilitiesand consolidated financial position asof December 31, 2001 and the con-solidated results of the operations forthe year then ended, in accordancewith the legal and regulatory require-ments applicable in Belgium and theinformation given in the notes to theconsolidated financial statements isadequate.

The consolidated directors’ reportcontains the information required bylaw and is consistent with the consoli-dated financial statements.

Ghent, April 19, 2002Ernst & Young Reviseurs d'EntreprisesS.C.C. (B 160)

Statutory auditorrepresented by

Erik De Lembre, Rosita Van Maele,Partner Partner

ASSETS in thousands of EUR 31-12-01 31-12-00

Fixed Assets 52,061 53,555

II. Intangible assets 5,553 5,785

III. Tangible assets 10,929 12,884A. Land and buildings 4,756 5,179B. Plant, machinery and equipment 3,971 3,448C. Furniture and vehicles 1,857 1,029F. Assets under construction and advance payments 345 3,228

IV. Financial assets 35,579 34,886A. Affiliated enterprises 35,155 34,792

1. Participating interests 31,903 31,9802. Amounts receivable 3,252 2,812

B. Other enterprises linked by participating interests 320 -1. Participating interests 320 -

C. Other financial assets 104 941. Shares 33 262. Amounts receivable and cash guarantees 71 68

Current Assets 21,290 21,604

VI. Stocks and contracts in progress 2,889 3,199A. Stocks 2,889 3,199

1. Raw materials and consumables 1,920 1,9042. Work in progress - 93. Finished goods 440 7114. Goods purchased for resale 529 575

VII. Amounts receivable within one year 16,207 15,114A. Trade debtors 14,894 13,744B. Other amounts receivable 1,313 1,370

VIII. Investments 847 847A. Own shares 847 847B. Other investments and deposits - -

IX. Cash at bank and in hand 777 1,638

X. Deferred charges and accrued income 570 806

TOTAL ASSETS 73,351 75,159

LIABILITIES in thousands of EUR 31-12-01 31-12-00

Capital and reserves 15,894 15,905

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

II. Share premium account 188 188

IV. Reserves 14,324 14,330A. Legal reserve 137 137B. Reserves not available for distribution 918 918

1. In respect of own shares held 846 8462. Other 72 72

C. Untaxed reserves 823 826D. Reserves available for distribution 12,446 12,449

VI. Investment grants 11 16

Provisions and deferred taxation 1,621 1,637

VII. A. Provisions for liabilities and charges 1,412 1,4231. Pensions and similar obligations 189 1953. Major repairs and maintenance 178 1924. Other liabilities and charges 1,045 1,036

B. Deferred taxation 209 214

Creditors 55,836 57,617

VIII. Amounts payable after more than one year 18,847 22,228A. Financial debts 14,839 21,988

4. Credit institutions 14,839 21,988D. Other amounts payable 4,008 240

IX. Amounts payable within one year 36,739 35,212A. Current portion of amounts payable after more than one year 8,140 8,152B. Financial debts 13,227 14,949

1. Credit institutions 13,227 14,949C. Trade debts 10,932 8,054

1. Suppliers 10,932 8,054E. Taxes, remuneration and social security 3,602 2,820

1. Taxes 818 5792. Remuneration and social security 2,784 2,241

F. Other amounts payable 838 1,237

X. Accrued charges and deferred income 250 177

TOTAL LIABILITIES 73,351 75,159

Financial statements of Lotus Bakeries NVBALANCE SHEET AFTER APPROPRIATION

56 57

2001 2000

I. Operating income 90,483 91,356A. Turnover 87,242 84,253B. Increase; Decrease in stocks of finished goods,

work and contracts in progress (214) 250C. Own construction capitalised 613 658D. Other operating income 2,842 6,195

II. Operating charges (88,671) (88,192)A. Raw materials, consumables and goods for resale 49,925 50,604

1. Purchases 49,836 50,6302. Increase, decrease in stocks 89 (26)

B. Services and other goods 14,291 14,477C. Remuneration, social security costs and pensions 18,282 17,605D. Depreciation of and other amounts written off formation expenses,

intangible and tangible fixed assets 5,760 4,946E. Increase; Decrease in amounts written off stocks,

contracts in progress and trade debtors 43 63F. Increase; Decrease in provisions for liabilities and charges (12) 86G. Other operating charges 382 411

III. Operating profit 1,812 3,164

IV. Financial income 1,609 1,200A. Income from financial fixed assets 1,232 1,021B. Income from current assets 80 41C. Other financial income 297 138

V. Financial charges (2,806) (2,290)A. Interest and other debt charges 2,349 1,888C. Other financial charges 457 402

VI. Profit on ordinary activities before taxes 615 2,074

VII. Extraordinary income 164 636D. Gain on disposal of fixed assets 164 40E. Other extraordinary income - 596

VIII. Extraordinary charges (146) (19)C. Provisions for extraordinary liabilities and charges - -D. Loss on disposal of fixed assets 2 3E. Other extraordinary charges 144 16

IX. Profit for the year before taxes 633 2,691

IX. BisA. Transfer from deferred taxation 23 19B. Transfer to deferred taxation (17) (13)

2001 2000

X. Income taxes (26) (767)A. Income taxes (110) (767)B. Adjustment of income taxes and write-back

of tax provisions 84 -

XI. Profit for the year 613 1,930

XII. Transfer from untaxed reserve 29 22Transfer from untaxed reserve (26) (19)

XIII. Profit for the year available for appropriation 616 1,933

APPROPRIATION ACCOUNT in thousands of EUR

A. Profit to be appropriated 616 1,9331. Profit for the year available for appropriation 616 1,933

B. Transfers from capital and reserves 4 8402. From reserves 4 840

C. Transfer to capital and reserves - (1,632)3. To other reserves - 1,632

F. Distribution of profit (620) (1,141)1. Dividends 521 1,0422. Directors' emoluments 99 99

NOTES ON THE NOT-CONSOLIDATED FINANCIAL STATEMENTS

II. STATEMENT OF INTANGIBLE ASSETS in thousands of EUR

Research Concessions, Goodwill Advanceand Patents, payments

Development Licences, Expenses etc.

a) ACQUISITION COSTAt the end of the preceding year 13 186 7,776 179Movements during the year:

• Acquisition, including produced fixed assets - 1,030 - -

• Transfers from one heading to another - 179 - (179)At the end of the year 13 1,395 7,776 -

c) DEPRECIATION AND AMOUNTS WRITTEN DOWNAt the end of the preceding year 13 186 2,170 -Movements during the year:

• Recorded - 484 778 -At the end of the year 13 670 2,948 -

d) NET BOOK VALUE AT THE END OF THE YEAR - 725 4,828 -

NOT-CONSOLIDATED INCOME STATEMENT in thousand of EUR

58 59

III. STATEMENT OF TANGIBLE FIXED ASSETS in thousands of EUR

Land Plant, Furniture Assets and machinery and under

buildings and vehicles construction equipment and advance

paymentsa) ACQUISITION COST

At the end of the preceding year 11,069 43,948 8,751 3,939Movements during the year:

• Acquisitions, including produced fixed assets 19 2,198 414 -• Sales and disposals - (247) (165) -• Transfers from one heading to another - 1,698 1,896 (3,594)

At the end of the year 11,088 47,597 10,896 345

c) DEPRECIATION AND AMOUNTS WRITTEN DOWNAt the end of the preceding year 5,890 40,500 7,722 711Movements during the year:

• Recorded 442 2,186 1,468 402• Written down after sales and disposals - (173) (151) -• Transfers from one heading to another - 1,113 - (1,113)

At the end of the year 6,332 43,626 9,039 -

d) NET BOOK VALUE AT THE END OF THE YEAR 4,756 3,971 1,857 345

IV. STATEMENT OF FINANCIAL FIXED ASSETS in thousands of EUR

Affiliated Other Others enterprises entreprises

linked byparticipating

interests1. Participating interests and sharesa) ACQUISITION COST

At the end of the preceding year 31,980 - 73Movements during the year:

• Acquisitions 323 - -• Sales and disposals (80) - (3)• Transfers from one heading to another (320) 320 -

At the end of the year 31,903 320 70

d) UNCALLED AMOUNTSAt the end of the preceding year - - 47Movements during the year - - (10)At the end of the year - - 37

NET BOOK VALUE AT THE END OF THE YEAR 31,903 320 33

2. Amounts receivableNET BOOK VALUE AT THE END OF THE PRECEDING YEAR 2,812 - 68

Movements during the year:• Additions 559 - -• Reimbursements (175) - -

Exchange differences 56 - 3

NET BOOK VALUE AT THE END OF THE YEAR 3,252 - 71

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

Cremers-Ribert NVGentstraat 52, B-9971 Lembeke BE 427.808.008 3,008,453 99.97 0.01

Margarinerie Hinnekens NVKerkstraat 33 B, B-9971 Lembeke BE 421.694.038 3,500 35.00 20.00

Prilabis NVOssegemstraat 20, B-1860 Meise BE 429.881.828 1,738 99.66 -

Biscuiterie Andi NVGentstraat 52, B-9971 Lembeke BE 443.714.127 395 98.75 1.25

Harry's Benelux NVGentstraat 52, B-9971 Lembeke BE 470.995.079 2,000 40.00 -

Interwaffles NVRue de Liège, B-6180 Courcelles BE 439.312.406 3,396 50.00 -

Lotus Bakeries France SAPlace du Château BP 91, F-59560 Comines 43,434 99.99 -

Biscuiterie Vander SAPlace du Château BP 91, F-59560 Comines - - 99.86

Biscuiterie Le Glazik SAZone Industrielle 2, F-29510 Briec-de-l'Odet - - 99.96

Petit Breton SAZ.A. De Kergazuel, F-29930 Pont-Aven - - 99.94

Lotus Bakeries Nederland BVElektronstraat 15, NL-1014 AP Amsterdam 2,000 100.00 -

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

Lotus Bakeries GmbHSchumanstrasse 33, D-52146 Würselen 10,000 100.00 -

Lotus Bakeries Réassurances SAAvenue de la Faïencerie 148, L-1511 Luxembourg 4,995 99.90 0.10

Lotus-Delta a.s.Bohunická 24, CZ-61900 Brno 835 50.00 -

Kelsen Bakery s.r.o.Bohunická 24, CZ-61900 Brno - 100.00 -

Lotus Bakeries Schweiz AGBahnhofstrasse 276, CH-4563 Gerlafingen 198 99.00 -

Swart Vicomte Ltd.Dudley House, Kings Road, Fleet, GB-GU13 9AA Hampshire - 100.00 -

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

60 61

VIII. STATEMENT OF CAPITAL

A. STATEMENT OF CAPITAL Amounts Number in thousands of EUR of shares

1. Issued capitalAt the end of the preceding year 1,371At the end of the year 1,371

2. Structure of the capital2.1. Different categories of sharesOrdinary shares 1,371 750,537

2.2. Registered shares and bearer sharesRegistered 383,908Bearer 366,629

C. OWN SHARES held by:- the company itself 23 12,659

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

G. STRUCTURE OF SHAREHOLDINGS OF THE ENTERPRISE: Situation at December 31, 2001As applied by article 4 paragraph 2 of the Law of March 2, 1989, the following notifications of participation in the shares representingthe capital of the company have been received.

Announcer Number Percentage of shares of total

number of shares

• Bisinvest NV (*), 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 NV 73,397 9.78%TOTAL 523,750 69.78%(*) Bisinvest NV is controlled by "Stichting Administratiekantoor van Aandelen Bisinvest" in the Netherlands.

IX. PROVISIONS FOR OTHER LIABILITIES AND CHARGES in thousands of EUR 2001

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 YEAR

Amounts payable current portion not more between over than one and five

one year five years years

Financial debts 8,140 14,767 724. Credit institutions 8,140 14,767 72

Other amounts payable - 4,008 -

TOTAL 8,140 18,775 72

C. AMOUNTS PAYABLE FOR TAXES,REMUNERATION AND SOCIAL SECURITY 2001

1. Taxesb) Non expired taxes payable 602c) Estimated taxes payable 216

2. Remuneration and social securityb) Other amounts payable relating to remuneration and social security 2,784

XII. OPERATING RESULTS in thousands of EUR except C1 and G 2001 2000

B. OTHER OPERATING INCOMEWhereof subsidies (other than investments grants) and compensatory amounts obtained from public authorities 270 351

C1.EMPLOYEES RECORDED IN THE PERSONNEL REGISTERa) Total number at closing date 525 549b) Average number of employees in full-time equivalents 469.7 477.2c) Number of actual working hours 713,586 725,476

C2.PERSONNEL CHARGESa) Remuneration and direct social benefits 12,708 12,290b) Employers' contribution for social security 4,055 3,941c) Employers' premium for extra statutory insurance 471 513d) Other personnel charges 988 824e) Pensions 60 37

C3.PROVISIONS FOR PENSIONSIncrease, decrease (5) 26

D. AMOUNTS WRITTEN OFF1) Stocks and contracts in progress

Recorded 142 141Write back (135) (139)

2) Trade debtorsRecorded 69 78Write back (33) (17)

E. PROVISIONS FOR LIABILITIES AND CHARGESIncreases 316 303Decreases (328) (217)

62 63

2001 2000

F. OTHER OPERATING CHARGESTaxes related to operations 340 339Other charges 42 72

G. TEMPORARY EMPLOYEES AND PERSONS PLACED AT THE DISPOSAL OF THE ENTERPRISE1) Total number at the closing date 9 112) Average number of employees in full-time equivalents 22.3 18.8

Number of actual working hours 47,454 37,072Charges to the enterprise 932 753

XIII. FINANCIAL RESULTS in thousands of EUR 2001 2000

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

• Capital subsidies 5 6

XIV. EXTRAORDINARY RESULTS in thousands of EUR 2001

B. Analysis of OTHER EXTRAORDINARY CHARGES,if material.Extraordinary charges: maribel 124

XV. INCOME TAXES in thousands of EUR 2001

A. ANALYSIS OF THE INCOME TAXES1. Income taxes of the current year: 104a) Taxes and withholding taxes due or paid 210b) Excess of income tax prepayments and withholding taxes capitalised (106)c) Estimated additional charges for income taxes -

2. Income taxes on previous year 6a) Taxes and withholding taxes due or paid 6

B. IMPORTANT REASONS FOR DIFFERENCES BETWEEN THE PROFIT BEFORE TAXES AS STATED IN THE ANNUAL ACCOUNTS AND THE ESTIMATED TAXABLE PROFIT, Director's emoluments 99

XVI. OTHER TAXES AND TAXES BORNE BY 2001 2000 THIRD PARTIES in thousands of EUR

A. The total amount of value added tax charged during the year:1. to the enterprise (deductible) 9,240 8,9112. by the enterprise 7,207 6,006

B. Amounts retained on behalf of third parties for:1. payroll withholding taxes 3,129 3,0022. withholding taxes on investment income 93 91

XVII. RIGHTS AND COMMITMENTS NOT ACCRUED IN THE BALANCE SHEET in thousands of EUR 2001

Amount of forward contracts:• Goods purchased (to be received) 1,792• Currencies sold (to be delivered) 3,645

XVIII. RELATIONSHIPS WITH AFFILIATED ENTERPRISES AND ENTERPRISES LINKED BY PARTICIPATING INTERESTS in thousand of EUR

Affiliated Enterprisesenterprises linked by

participatinginterests

2001 2000 2001 2000

1. FINANCIAL FIXED ASSETS 35,155 34,792 320 -Investments 31,903 31,980 320 -Other amounts receivable 3,252 2,812 - -

2. AMOUNTS RECEIVABLE 3,658 6,402 935 -Within one year 3,658 6,402 935 -

4. AMOUNTS PAYABLE 7,197 3,804 1,195 -After one year 4,008 240 - -Within one year 3,189 3,564 1,195 -

7. FINANCIAL RESULTSFrom financial fixed assets 1,232 1,021From interest and debts 140 23

8. DISPOSAL OF FIXED ASSETSRealised capital gains 69 -

XIX. FINANCIAL RELATIONS WITHDIRECTORS in thousands of EUR 2001

4. 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 153

64 65

I. STATEMENT OF THE PERSONS EMPLOYED

A. EMPLOYEES RECORDED IN THE PERSONNEL REGISTER

1. During the financial period or Full-time Part-time Total (T) or total Total (T) or total the previous financial period of full-time of full-time

equival. (FTE) equival. (FTE)2001 2001 2001 2000

Average number of employees 372.1 147.9 469.7 FTE 477.2 FTENumber of actual working hours 577,209 136,377 713,586 T 725,476 TPersonnel charges (in thousands of EUR)) 15,302 2,980 18,282 T 17,605 T

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

a) Number of employees recorded in the personnel register 375 150 474.6

b) By nature of the employment contractContract of unlimited duration 343 147 440.6Contract of limited duration 29 2 30.4Contract regarding substitution 3 1 3.6

c) By sexMale 220 10 227.2Female 155 140 247.4

d) By professional categoryManagement personnel 21 2 22.4Employees 111 37 138.8Workers 242 111 312.4Other 1 - 1.0

B. TEMPORARY PERSONNEL AND PERSONS PLACED AT THE DISPOSAL OF THE ENTERPRISEDuring the financial period Temporary personnelAverage number of personnel employed 22.3Number of actual working hours 47,454.0Charges to the enterprise (in thousands of EUR) 932.0

II. LIST OF PERSONNEL MOVEMENTS DURING THE FINANCIAL PERIOD

A. ENTRANTS Full-time Part-time Total of full-time equivalents

a) Number of employed persons recorded in the personnel register during the financial period 36 4 38.8

b) By nature of the employment contractContract of unlimited duration 17 4 19.8Contract of limited duration 17 - 17.0Contract of regarding substitution 2 - 2.0

c) By sex and level of educationMale: primary education - - -

secondary education 20 - 20.0higher non-university education 2 - 2.0university education 1 - 1.0

Female: primary education - 2 1.3secondary education 6 1 6.6higher non-university education 5 - 5.0university education 2 1 2.9

B. LEAVERS Full-time Part-time Total of full- time equivalents

a) Number of employed persons of which the date of termination of the contracts has been recorded in the personnel register during the financial period 57 7 61.2

b) By nature of the employment contractContract of unlimited duration 39 6 42.6Contract of limited duration 16 1 16.6Contract regarding substitution 2 - 2.0

c) By sex and level of educationMale: primary education 4 - 4.0

secondary education 20 1 20.8higher non-university education 1 - 1.0university education 3 - 3.0

Female: primary education - - -secondary education 22 5 24.9higher non-university education 4 1 4.5university education 3 - 3.0

d) By reason of termination of contractPension 1 - 1.0Prepension 2 - 2.0Dismissal 1 1 1.4Other reason 53 6 56.8

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

MEASURES STIMULATING EMPLOYMENTNumber of employed persons involved

Number In full-time equivalents

1. MEASURES GENERATING FINANCIAL PROFIT1.9. Full career interruption 1 1.0

2. OTHER MEASURES2.1. Contract of first professional experience 16 16.02.3. Training period for junior employees 3 3.02.7. Conventional prepension 4 4.0

Number of employees involved within one or more measures stimulating employment:• Total for the financial period 23 23.0• Total for the previous financial period 22 22.0

IV. INFORMATION ON VOCATIONAL TRAINING FOR EMPLOYEDPERSONS DURING THE FINANCIAL PERIOD

Number of Number of Charges to theemployees training hours enterprise

involved attended in thousands of EUR

Total of training initiatives at the expenseof the employerMale 136 4,398 196Female 161 3,415 116

SOCIAL REPORT

66 67

6968

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 ente-red at purchase or transfer price.The amortisation percentages appliedwere as follows:• research and development 33%• licensing 33%• clientele 10%• advances 0%

The depreciation of the clientele overten years is justified by the stable clientrelationships that have been realizedthrough the brands Lotus, Corona,Cremers and Suzy and which are nowhoused under the single brand Lotus.

1.3. Tangible fixed assets

Tangible fixed assets, mentionedunder heading III, were included atpurchase price. Additional costs,included in assets under heading IIIwere booked separately.

Beginning in 1993 assets under con-struction and advance payments weredepreciated according to their definitedestination, except if it is concerningabout fixed assets which are depreci-ated over maximum three years.These last mentioned assets aredepreciated as from the year ofcoming into operation.

Investments in office equipment weredepreciated over three years, begin-ning 1994, 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 fixedassets is less than the accountingvalue and where the loss of value sodetermined is of a lasting nature in theopinion of the Board of Directors.

The estimated value of the financialfixed assets is determined at the endof the accounting period based on themost recent available balance sheetand on one or more criteria.

Depreciations are taken back to thesum of the previously recorded depre-ciations where the valuation at the clo-sing date of the accounting periodconcerned significantly exceeds theprevious valuation.

1.5. Stocks

Finished products were valued atstandard production cost price.

Raw materials, consumables andgoods for resale were booked at thecost of acquistion using the FIFOmethod.

For stocks, real depreciation wasapplied in the event that they hadbecome useless or if their practicalvalue or realisation value was lowerthan the cost price.

1.6. Receivables

The necessary depreciation has beenapplied for receivables the collectionof which is in doubt. Receivables werebooked at their nominal value, lessany credit notes remaining to bedrawn 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 and charges

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

2.2. Amounts payable within one year

• Suppliers

Debts to suppliers have been bookedat their nominal value. Debts in foreigncurrencies have been valued at therate of 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 char-ges, personnel insurances and theMaribel reimbursement have beenbooked in full.

COMMENTS ON THE ANNUALACCOUNTS OF LOTUSBAKERIES NV

ASSETS

The intangible fixed assets includethe investments made in 2001 in theSAP information system, which werewritten down as from 2001. Throughthe investments made principally inproduction equipment, the net balan-ce sheet value of the installations,machines and equipment rose by0.52 million EUR. Due to the rapidwrite-offs the tangible fixed assetsfell as a whole by 1.96 million EUR.

The increase in the financial fixedassets related mainly to loans to sub-sidiary companies. Due to the reduc-tion in the participation in Harry’sBenelux NV from 50% to 40%, thisparticipation was transferred to thecategory of "other enterprises linkedby participating interests".

The current assets fell slightly by0.31 million EUR, principally throughthe fall in stocks of finished goods andthrough a reduction of the cash atbank and in hand.

LIABILITIES

The reserves not available for distri-bution consists of the own sharesbought in the context of share optionplans.

The amounts payable after morethan one year reduced by 3.38 mil-lion EUR. The financial debts payableafter more than one year to creditinstitutions fell by 7.15 million EUR.The remaining debts relate to loans ofsubsidiary companies of the Group.

The amounts payable within oneyear rose slightly by 1.53 million EUR,principally due to an increase in thetrade debts and the amounts owed inrelation to taxes, salaries and socialcharges. This is however only an indi-cation at a given point in time. Theinterest risk for the financial debts pay-able within one year is covered viaoptions. The other debts consist ofthe repayable sum of the taxes on theMaribel support in the period ’93-’97.

INCOME STATEMENT

Turnover increased by 3.5%, in partthrough a rise in sales to the otherexport countries. The other operatingincome fell by 3.35 million EUR. Thispost consists principally of varioussales to subsidiaries.

Goods for resale, raw materials andconsumables fell slightly by 0.68 mil-lion EUR. The prices of raw materialsdid show a slight increase, and signifi-cant increases were seen in the pricesof packaging.

Personnel costs showed an increaseof 0.68 million EUR. This includes thetemporary higher personnel costsincurred in the operational introductionof SAP.

Depreciations rose by 0.81 millionEUR in part as a consequence of theinvestments made in the SAP informa-tion project, in the single brand nameLotus, and through the rapid write-offs.

Operating profit fell by 1.35 millionEUR to 1.81 million EUR, which repre-sents a fall of 42.7%

The financial income related mainlyto dividend income from subsidiarycompanies. Due to the higher financialdebts in the course of the year 2001and the higher interest rates, thefinancial costs rose by 0.52 millionEUR.

The other exceptional charges prin-cipally concerned the cost relating tothe portion of the Maribel supportfrom the period ’93-’97 that is to berepaid.

Through the lower operating profit andthe higher financial costs, profit beforetaxes fell by 2.06 million EUR.

Profit after taxes showed a fall of1.32 million EUR.

Registered OfficeLotus Bakeries NVGentstraat 52B- 9971 Lembeke

Tel.: +32 (0) 9/ 376.26.11Fax: +32 (0) 9/ 376.26.26www.lotusbakeries.com

Commercial registerGhent 11.294

VAT numberBE 401.030.860

Annual reportThis annual report 2001 is also availableon the internetsite: www.lotusbakeries.com

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

ContactFor further information about the dataof the annual report or more informa-tion about the Group Lotus Bakeries,please contact:

Filip StandaertSecretary-GeneralGentstraat 529971 LembekeTel.: +32 (0) 9/ 376.26.11Fax: +32 (0) 9/ 376.26.04filip.standaert@lotusbakeries.com

KolophonConcept and realisation:Vandekerckhove & Devos

PhotosBenny De Grove (p.20 and 24)Leo Burnett (p.18)Vandekerckhove & Devos (p.1,3,4,5,6,7,8,9,10,13,15,17,18,20,25,26,27,29,31,33,35,71)

Translation Dekryptos SA

PrintDemaertelaere

Acknowledgement to the personnelWe wish to thank all our cooperators.Their commitment in realizing thecompany’s targets and their dynamismenable us to reach the reported resultsand make us feel confident of the future.

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10 General information

70

STATUTORY AUDITOR’S REPORTFOR THE YEAR ENDED DECEM-BER 31, 2001

To the shareholders’ meeting ofLotus Bakeries 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 December31, 2001 which have been preparedunder the responsibility of the board ofdirectors and which show a balancesheet total of 73,351 thousands ofEUR and a profit for the year of 613thousands of EUR. We have also car-ried out the specific additional auditprocedures required by law.

Unqualified audit opinion on thefinancial statements

Our examination has been conductedin accordance with the auditing stan-dards of the "Institut des Reviseursd'Entreprises/Instituut der Bedrijfs-revisoren". Those standards requirethat we plan and perform the audit toobtain reasonable assurance aboutwhether the financial statements arefree of material misstatement, takinginto account the Belgian legal andregulatory requirements applicable tofinancial statements.

In accordance with those standards,we considered the company’s admini-strative and accounting organisation,as well as its internal control procedu-res. Company officials have respondedclearly to our requests for informationand explanations. We have examinedon a test basis, the evidence suppor-ting the amounts and disclosures inthe financial statements. We haveassessed the accounting policies, thesignificant accounting estimates made

by the company and the overall pre-sentation of the financial statements.We believe that our audit provides areasonable basis for 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 asof December 31, 2001 and the resultsof its operations for the year thenended and the information given in thenotes to the financial statements isadequate.

Additional certifications and infor-mations

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

information required by law and isconsistent with the financial state-ments.

• The accounting records are maintai-ned and the financial statementshave been prepared in accordancewith the legal and regulatory require-ments applicable in Belgium.

• No transactions have been underta-ken or decisions taken in violation ofthe company’s statutes or CompanyLaw which we would have to reportto you. The appropriation of resultsproposed to the General Meetingcomplies with the legal and statutoryprovisions.

Ghent, April 19, 2002Ernst & Young Reviseurs d'EntreprisesS.C.C. (B 160)

Statutory auditorrepresented by

Erik De Lembre, Rosita Van Maele,Partner Partner

72

Notes