Annual Report2006

Royal CosunCosunpark 1P.O. Box 34114800 MG BredaThe NetherlandsTelephone +31 76 530 33 22Fax +31 76 530 33 03Internet www.cosun.comE-mail infocosun@cosun.com

Suiker UnieP.O. Box 100 4750 AC Oud-GastelThe NetherlandsTelephone +31 165 52 52 52 Fax +31 165 52 52 55 Internet www.suikerunie.nlE-mail suiker.info@suikerunie.com

Cosun Food Technology CentreP.O. Box 1308 4700 BH RoosendaalThe NetherlandsTelephone +31 165 58 28 10 Fax +31 165 55 13 52 Internet www.cosun.com

SVZP.O. Box 27 4870 AA Etten-LeurThe NetherlandsTelephone +31 76 504 94 94 Fax +31 76 504 94 00 Internet www.svz.comE-mail info@svz-nl.com

Unifine Sauces & SpicesP.O. Box 56523297 ZG PuttershoekThe NetherlandsTelephone +31 78 676 23 44 Fax +31 78 676 52 53 Internet www.unifine.comE-mail info@unifine.com

SensusP.O. Box 13084700 BH RoosendaalThe NetherlandsTelephone +31 165 58 25 00Fax +31 165 54 60 83Internet www.sensus.nlE-mail info.sensus@sensus.nl

Royal NedalcoP.O. Box 64600 AA Bergen op ZoomThe NetherlandsTelephone +31 164 21 34 00Fax +31 164 21 34 01Internet www.nedalco. comE-mail info@nedalco. com

AvikoP.O. Box 87220 AA SteenderenThe NetherlandsTelephone +31 575 45 82 00Fax +31 575 45 83 80Internet www.aviko. comE-mail info@aviko. com

Unifine Food & Bake IngredientsP.O. Box 93944801 LJ BredaThe NetherlandsTelephone +31 76 572 41 40Fax +31 76 572 41 50Internet www.unifine-fbi. comE-mail information@unifine.com

Addresses

Colophon

Advice, text & coordination Jonkergouw & van den Akker B.V., Amsterdam Graphic design Louise Stavast, Hilversum Printing NPN drukkers, Breda

Annual Report2006

In addition to this Annual Report 2006, Cosun also publishes a 2006 Annual Review. In the event of textual inconsistencies between the English and the Dutch versions, the latter shall prevail. The Annual Report 2006 and Annual Review 2006 have also been published on the internet at: www.cosun.com.

Royal CosunCosunpark 1P.O. Box 3411 4800 MG BREDAThe NetherlandsTelephone +31 76 530 33 22Fax +31 76 530 33 03Internet www.cosun.comE-mail infocosun@cosun.com

Entered in the Trade Register of the Chamber of Commerce in Breda under number 20028699

Profile 3Keyfigures 4

ReportoftheBoardandtheExecutiveBoard 6Strategic framework 8

Financial performance 9

Prospects 10

Know-how,people & theenvironment 11• Research & development 11

• Staff & organisation 11

• The environment 12

Operations 15• Suiker Unie 15

• Sensus 15

• Nedalco 16

• Aviko 17

• Unifine Food & Bake Ingredients 17

• Unifine Sauces & Spices 18

• SVZ 19

Risk profile and risk management 21

Cooperative issues 22

Members and shares per district 24

Members of the Board, Supervisory Board,

Executive Board and Central Works Council 25

ReportoftheSupervisoryBoard 26

AnnualAccounts 27Consolidated balance sheet 28

Consolidated profit and loss account 29

Consolidated cash flow statement 30

Notes to the consolidated annual accounts 31

Cooperative balance sheet 47

Cooperative profit and loss account 48

Notes to the cooperative accounts 48

Otherinformation 56Auditors’ statement 56

Provisions of the articles of association on profit appropriation 56

Proposed profit appropriation 56

Post-balance sheet events 56

Contents

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Royal Cosun, at home in foodRoyalCosunprocessesandprepareschieflyagriculturalrawmaterialsanddevelopsinnovativefoodstuffsandingredientsthatcomplementahealthylifestyle,offerfunctionaladdedvalueandareappetisingandsafe.

The Cosun businesses source the best raw materials and process them efficiently into intermediate products for the international food and drink industry, into specialities for the foodservice channel (restaurants, caterers and wholesalers) or into end products that are sold to consumers through retail outlets. Cosun is also engaged in a series of non-food activities such as the production of animal feed (from sugar beet pulp and potato peelings) and bioethanol as an environmentally-friendly additive to car fuels.

The activities are organised into four groups: • Basic ingredients, including sugar and inulin

(Suiker Unie and Sensus).• Industrial alcohol and bioethanol (Royal Nedalco).• Potato products, including chilled, frozen and

dried potato products and a wide range of other prepared potato specialities (Aviko).

• Compound ingredients, including fine bakery specialities, sauces, marinades, dressings, mixes, spices and fruit & vegetable applications (Unifine Food & Bake Ingredients, Unifine Sauces & Spices and SVZ).

The Cosun businesses carry out their own product development, research and quality control and can draw on the resources of the joint research and development centre, the Cosun Food Technology Centre.

Cosun’s home market is Europe. The group as a whole achieves a turnover of EUR 1.5 billion and has an average workforce of about 4,200 FTEs. Cosun was established as a cooperative of Dutch sugar beet growers in 1899. Cooperation has remained the group’s driving force.

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Key figuresinEURmillions 2006 2005 2004 2003 2002

Consolidated net turnover 1,469 1,339 1,317 1,321 1,104

Operating profit 111 53 -/- 25 31 55

Operating profit before goodwill amortisation and incidental items * 72 61 51 62 50

Result for the year 66 24 92 29 38

Cash flow from operating activities 178 10 106 84 77

Depreciation of tangible fixed assets 55 51 57 59 48

Capital expenditure on tangible fixed assets 95 90 63 50 60

Capital and reserves 607 546 539 448 430

Group equity as a percentage oftotal assets 45 45 45 37 37

Total assets 1,385 1,259 1,245 1,283 1,238

Average number of employees in FTEs 4,210 4,194 3,993 4,325 3,783

Sugar beet price ** 49.05 51.72 59.14 59.60 52.17

Sugar beet purchases from members 173 177 202 200 182

* Incidental items consist of impairments in the value of fixed assets, quota surrender revenues, reorganisation provisions and gains on the sale of participating interests and tangible fixed assets.

** Price in EUR per tonne of beet with average sugar content and average extractability.

Report of the Board and the Executive Board

Towards a European sugar companyThe bid we made for CSM’s sugar division in mid-2006 represents a milestone in the history of our cooperative. The acquisition will permit a significant reduction in the cost of sugar production and thus bring forward our ambition of remaining a key producer in the European sugar market. In mid-March 2007, when this report went to press, the Netherlands Competition Authority (NMa) still had to give the green light for the acquisition of CSM Suiker.

The impact of the new sugar market organisation is already being felt. The industry needs time to adapt to the new situation. Sugar production is still exceeding internal European consumption while exports to the world market have been made unattractive or even impossible. Prices in Europe are coming under pressure and results will be lower in the years ahead. Only the strongest players will survive. We therefore foresee further consolidation in the European market, in part through mergers, acquisitions and strategic alliances. It is our ambition to grow at at least the same pace as the European markets in which we operate. Through cooperation, we can continue to serve our international customers at European level.

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Kees MenkhorstPresident & CEO

Investing in a promising future

Royal Cosun can look back on an eventful year. Introduction of the new European regime forthe sugar market in mid-2006 left a deep impression on our activities. Yet we also took stepsforward in several areas to strengthen our base and position with a view to the future. Turnoverincreased by nearly 10% to EUR 1,469 million while the result for the year rose sharply toEUR66million.Inlinewithexpectations,Cosun’sincomefromsugarfellsharplyonaccountofthenewsugarmarketorganisation.Inourotheractivities,werealisedgrowthinbothturnoverandresultseventhoughAvikowasfacedwithadisappointingharvest.

Wider product rangeOur preparations for the new market organisation, including continuous efficiency gains at the sugar factories and the development of new core activities, have proved both effective and timely. Bioethanol has the potential to become a new pillar under the group. To be a serious player in this market, we are drawing up investment plans for new production facilities in Sas van Gent and Groningen. Bioethanol production promotes sustainability in two ways. Firstly, as an additive to car fuels, it will reduce CO2 emissions and, secondly, its production in a new combined sugar/bioethanol configuration in Groningen will be significantly more energy efficient. These new developments are consistent with our profile. We have the know-how and expertise necessary to help growers, to receive and process vegetable materials on a large scale and to develop applications for the ingredients. We have won our spurs in these areas and are anchoring Cosun’s future to them. By diversifying our product/market combinations, such as food, animal feed, bio-fuel and fine bio-chemicals, we are building strong foundations for the group’s further growth.

Outlook for membersDespite all these changes, our members still come first. Their interests are our primary motivation. And Cosun must remain interesting to them. Should growers who had previously supplied CSM Suiker join our cooperative, the number of members will initially increase but it will subsequently fall in step with the decline in the number of arable farms in the Netherlands. Those who continue must increase their scale and therefore purchase growing rights. The relationship between members and the cooperative will become more business-like, with the farms’ profitability being reflected in the bonus distributed to members in addition to the price paid for the raw materials they supply.

Building the future of our cooperative with the help of our members and all our staff and partners is an exciting challenge. We would like to thank them all for their confidence and commitment.

Breda, 15 March 2007

J.E.M. van Campen C.J. Menkhorst

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Jos van CampenChairman of the Board

Report of the Board and the Executive Board

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Strategic framework

Strategic goals

• Continuity of cooperative sugar beet growing and the sugar industry in the Netherlands

• Maintaining the members’ profit share

• Profitability above turnover growth

Policy principles

• Food quality, food safety, efficient production and innovation as critical success factors

• Corporate sustainability

• Focus on customer success

• Cooperation in the food chain

• Efficient organisation with attractive staff development opportunities

• Dedicated knowledge-sharing in Centres of Excellence in the fields of product development, process engineering, R&D, human resources, food safety, financing and ICT

Main points of strategy

• Maintain the position in the European sugar market

• Achieve further cost reductions and efficiency gains in the chain

• Grow in those activities and products (product innovation and concept development) that have the greatest profit potential owing to their focus on greater added value

• Develop new growth opportunities in non-food products based on natural ingredients, such as bioethanol

Growth in allnon-sugar activities

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ResultsCosun’s consolidated turnover for 2006 increased by nearly 10% to EUR 1,469 million (2005: EUR 1,339 million). Organic growth amounted to 8%. On balance, the newly consolidated activities and divestments also contributed to the growth. The sugar activities (Suiker Unie in the Netherlands and TSO in Slovenia) reported lower turnover and their turnover will continue to decline in the years ahead owing to the fall in sugar prices brought about by the new market organisation and the termination of beet processing in Slovenia in 2007. The expected acquisition of CSM’s sugar activities will lead to a one-off increase in sugar turnover. The other activities reported higher turnover in 2006, with SVZ and Aviko achieving the greatest increases.

Operating profit rose by EUR 58 million to EUR 111 million. This was due largely to non-recurring items such as the gain on the sale of Custom Industries (the American arm of Unifine Food & Bake Ingredients) and EU compensation for Sensus’ surrender of fructose quota.

Suiker Unie’s operating profit fell sharply owing to the rapid increase in pressure on prices ahead of the new sugar market organisation. The fall in results would have been even greater if the EU had not decided to refund part of the production levy from the previous sugar campaign. The fall in Suiker Unie’s results, however, was more than made up for by improvements on all other activities. The greatest increases in results were achieved by Aviko, Unifine Food & Bake Ingredients and Nedalco.

For the first time, Sensus conducted only an inulin campaign in 2006. Despite the campaign being much smaller than in the previous year owing to the surrender of fructose quota, Sensus turned in a higher result. Nedalco profited from higher alcohol prices and from its new factory in Sas van Gent, which has now been open for just over a year. Aviko had a mixed year. Margins came under fierce pressure. 2006 saw a dry and hot July followed by record precipitation in August. The potato harvest suffered significantly. Total European production was the lowest for ten years.

Furthermore, the quality of the harvest left a lot to be desired. As a result, potato prices rose sharply and the poor quality increased processing costs. For Aviko, this meant a disappointing first half was followed by poor results at the beginning of the new harvest. It was not until the fourth quarter that higher prices for end products led to firmer margins. On balance, Aviko turned in a higher operating profit as cost reduction programmes (including lower pension costs) more than made up for the effects on the raw material and customer sides. Unifine Food & Bake Ingredients saw the improvement in the results of its European activities accelerate in 2006. Unifine Sauces & Spices was again exceedingly successful in the foodservice and retail channels with the Wyko brand and contract production in 2006. Finally, SVZ combined strong growth in sales with an increase in results.

Owing to investments and growth at Aviko, Nedalco and SVZ, the average financing requirement was higher in 2006 than in 2005. Financial expense was accordingly slightly higher. The sharp increase in the result for the year led to a corresponding increase in taxation. The effective tax rate was slightly lower than the standard tax rate. On balance, the improvement in the results of all activities with the exception of Suiker Unie in combination with non-recurring income triggered a sharp rise in net profit: EUR 66 million, an increase of EUR 42 million on 2005.

Balance sheetConsiderable investments in capacity expansion (Nedalco and SVZ) and efficiency improvements (Aviko) led to a further increase in tangible fixed assets in 2006. In the final quarter of the year, working capital fell in comparison with previous years, chiefly because of the lower cost of sugar stocks. This lower cost, brought about by the absence of production levies on the one hand and lower beet costs on the other, was a direct consequence of the new EU sugar market organisation. Other movements in working capital were also due chiefly to EU measures.

Financial performance

Theanticipatedimpactofthenewsugarmarketorganisationwasmorethanmadeupforbythegrowthandimprovedresultsoftheotheractivities.

The movements included an increase in debtors following the surrender of fructose quota, an increase in current liabilities for the remittance of restructuring levies and the refund of production levies to beet growers.

Thanks to the good profitability in combination with the decline in working capital, Cosun was

more than able to meet its year-end financing requirements from long-term financing facilities. The surplus funds were placed on deposit. This was an important factor in the EUR 126 million increase in total assets. Capital

and reserves increased by EUR 61 million. Despite the rise in total assets, there was a modest increase in group equity as a percentage of total assets, up from 44.6% at 31 December 2005 to 45.1% at 31 December 2006.

Cash flowCash flow from operating activities amounted to EUR 178 million. In comparison with 2005, this EUR 168 million increase is attributable chiefly to the higher operating profit and lower working capital. Cash flow from investing activities totalled EUR 87 million negative. This figure includes the gain on the sale of Custom Industries’ activities and expenditure on the businesses acquired. The cash outflow from financing activities was EUR 6 million. On balance, these cash flows increased the cash position by EUR 85 million.

Beet priceThe 2006 beet growing season was characterised by extremes: very high summer temperatures and excessive rainfall in August. Healthy growth in the autumn resulted in an average sugar yield of 11.1 tonnes per hectare (2005: 11.2 tonnes).

The price for quota beet from the 2006 campaign was set at EUR 49.05 per tonne excluding VAT for beet with average extractability and average sugar content (previous year: EUR 51.72). The lower beet price was due to a reduction in the minimum EU beet price, which was in turn a direct consequence of the new EU sugar market organisation. The partial refund of production levies from the previous sugar campaign largely compensated the beet growers for the lower price in 2006. The lower beet price was also attributable to the lower average sugar content and extractability of the quota beet supplied and to a lower pulp payment.

Thanks to the good market prices for surplus sugar in the EU, the price for surplus beet came to EUR 19.38. These sugar yields and beet prices produced an average financial yield for the growers of EUR 3,117 per hectare, excluding the decoupled aid per hectare (2005: EUR 3,172).

Prospects

The new sugar market organisation came into force on 1 July 2006. It became clear from the end of 2004 that competition in the sugar market would increase in the run-up to the new market regime: sales areas were enlarged, market prices weakened, and suppliers sought efficiency gains and higher market shares. The European scheme to purchase sugar quota has not yet proved a success. A preventive quota reduction has been announced for 2007 of 13.5% and EU levies will be very high in 2007. In consequence, the result on sugar activities will again be lower in 2007. The planned acquisition of CSM’s sugar activities will contribute to the result. Only limited synergy gains will be realised in the first year of the acquisition, however, while financing and amortisation charges will be higher. As in 2006, the results of the other activities are expected to be higher but they will not be able to compensate in full for the decline in the sugar result. Non-recurring income is also expected to be lower than in 2006. The overall result for 2007 will therefore not reach the level of that for 2006.

No significant changes are expected in the number of staff in 2007. If the decision to expand in bioethanol goes ahead, capital expenditure will exceed depreciation. The acquisition of CSM’s sugar activities will increase the overall financing requirement. Cosun has already made preparations for this increase by contracting an additional financing facility.

Results on sugarwill decline, those on

the other activitieswill grow further

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Innovation calls for a vision of the market in which our businesses are active and a great deal of time and patience. The businesses themselves must set their own innovation policies and goals. And to maximise the success rate of their innovative new concepts they must make optimal use of all the know-how and expertise available within Cosun. CFTC plays a pivotal role as an internal knowledge broker and internal centre of expertise. It has a good overview of the know-how and expertise available within Cosun and mobilises them for the benefit of the Cosun businesses.

CFTC’s contribution to innovation complements the business groups’ activities and is directed at:- Accumulating, disseminating and applying

know-how and expertise that is new or relevant to more than one business. Examples of such Cosun-wide competences include energy management in production processes, preserving techniques and the hygienic production and pre-processing of vegetable flows.

- Carrying out innovative medium and long-term projects using all relevant competences available within Cosun.

- Alerting the businesses to promising new developments and carrying out feasibility studies where appropriate.

The business’s R&D efforts tend to focus on short-term challenges such as solving customers’ questions, tackling quality issues, supporting applications and improving existing products and processes.

Staff & organisation

Cosun operates as a strategic holding company in which operations are decentralised to business groups that have their own responsibilities for personnel policy. At central level, the group P&O department concentrates on a series of core tasks such as management development, education & training, management terms of employment and the internal labour market. It supports the business groups’ P&O departments and the P&O professionals work together on, for example, the P&O Platform to exchange know-how and experience, to match supply and demand on the internal labour market and to purchase services jointly where possible, for example from temporary employment agencies.

Cosun’s total workforce, measured in full-time equivalents, is about 4,200 and on balance has shown few fluctuations in recent years. This apparent stability conceals underlying movements. Suiker Unie, for example, closed its sugar factory in Puttershoek at the end of 2004 and SVZ closed its facility at Hien-Dodewaard in mid-2006, both of which involved job losses. Growth at Unifine in Nijkerk and at Aviko in Cuijk, by contrast, increased the number of staff. This dynamism also introduces new know-how and experience from outside the organisation.

A considerable proportion of the staff follow a course and/or a training programme each year. The courses can range from technical training and safety at work for process operators to learning to work with a new automated system and personal development.

CFTC plays a pivotal role as a knowledge broker and centre of expertise

Know-how, people and the environmentResearch & development

The Cosun Food Technology Centre (CFTC) is the shared R&D, knowledge and expertise facility for the business groups. It specialises in process technology, product & application development, analysis and highly specialised disciplines such as microbiology. Most of the business groups also have their own R&D departments that work on quality assurance and optimising existing products and processes and on the development of new products.

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Know-how and qualitySecuring our know-how and optimising its use remain top priorities. Education, training and back-up systems are investments in the future of our business. Having fewer and fewer people do

the work makes greater demands on everyone’s contribution and responsibility.

Quality assurance, environmental management systems and structured business processes provide reference points but integrated methods go a significant step further. Experience has already been gained within Cosun of Total Productive Maintenance (TPM). Nedalco is pioneering this method for Cosun. The results so far have been so impressive and sustainable that it has been decided to introduce TPM at the other companies. With the support of the Cosun corporate staff, the business groups will launch one or more pilot projects in 2007 to gain experience in TPM.

Pensions and other staff schemesMany statutory staff regulations took effect or were amended in 2006. Regulations seem to be mounting up in the Netherlands and imposing an ever greater burden on business. A great deal of attention had to be paid to the new care system. The group care insurance scheme offered by Cosun seems to have met a need given the large number of participants among the staff and retired employees. The staff made far less use of a life-course savings scheme Cosun offered during the year.

An insurance scheme for partially disabled persons to resume work was prepared for introduction in 2007. The amended rules on pensions and early retirement had the most far-reaching effects. Cosun was obliged to put a great deal of energy and working hours – and therefore money – into introducing, modifying and winding up pension, early retirement and life-course schemes. Anticipating the new legislation on pensions will again demand a great deal of effort in 2007. All the changes caused by the new legislation will also place additional pressure on the orderliness, stability and regularity necessary for the healthy development of pension schemes.

The environment

Cosun is an advocate of sustainable production methods that cause the least harm to the environment and natural habitats. Cosun processes natural materials into foodstuffs and ingredients. The residues are often processed into animal feed but also into non-food products. This is an example of how Cosun minimises waste. In monetary terms, it feeds through into lower operating expenses and in environmental terms into a lower environmental impact. As well as in our food activities, we are investing in the production of bioethanol, a green additive for petrol engines. By doing so Cosun is also working on energy sustainability, in this case for mobility and transport. Emissions tradingThe trade in CO2 emission rights demanded a great deal of attention in 2006. We not only considered the trading system and the associated clerical work but also actively discussed and participated in the allocation of the rights. The final allocation of emission rights to Cosun is expected in the course of 2007. It is already known that the allocation will not be generous and further energy savings will remain a key priority.

All the locations in the Netherlands are now working with environmental management systems. This is not yet the case at the foreign locations, where registration and administrative methods are not yet adequate. We are working on the further rollout.

Environmental managementAviko is having to overcome the consequences of a very poor potato harvest. Processing these potatoes leads to higher energy and water consumption, an undesirable but unfortunately unavoidable consequence of the extreme weather in 2006. Aviko Nijmidon extracts starch from potato waste and processes it into a raw material for technical applications such as environmentally-friendly adhesives.

Education andtraining are

investments inthe future

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At Suiker Unie energy saving in all its forms remains high on the agenda. At the sugar factory in Dinteloord, preparations have started for the construction of a biogas extraction facility. The environmental management systems are operating effectively and are designed with a view to controlling risks. The plans for an innovative business park at the Dinteloord sugar factory in the form of an agro-industrial complex are taking more definite shape. The environmental assessment procedure will start in early 2007. Actual development and construction will begin in several years.

Strict noise limits had prevented the further development of the industrial estate in Etten-Leur where SVZ is located. SVZ has invested in new facilities and already operated within the noise limits. This ‘spare’ capacity has been recognised and development of the site can go ahead.

A welcome side effect of the TPM management system at Nedalco is that it effectively reduces waste. Equipment and manpower are put to better use and energy consumption and waste production are better managed.

Water is an important factor at both Unifine Sauces & Spices and Unifine Food & Bake Ingredients. Wastewater from the Unifine Nijkerk factory actually improves the operation of the public water purification system. The composition is an important factor. The production location that Unifine F&Bi acquired in Portugal in 2006 does not yet have a good wastewater drainage system. A solution has been found and will be introduced in 2007.

Cosun’s environmental reports for 2006 and previous years can be found on the website at www.cosun.com.

All businesses in the Netherlandshave environmental management systems

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The volume of sales was good but did not make up for the deterioration in margins caused by the unrelenting pressure on selling prices. This was due chiefly to the new regime and the outcome of the WTO panel, hidden sugar imports (mixes) from outside the EU and the good harvest in the 2005 campaign. In line with expectations, Suiker Unie reported a lower operating profit for 2006.

Preventive sugar withdrawalThe harvest in 2005 contributed to the imposition of a preventive sugar withdrawal at the beginning of 2006 for the 2006 campaign. The quota was cut by 6.77% in comparison with an average of 15% in Europe as a whole. The reduction for the Netherlands was lower because Sensus surrendered quota for chicory fructose. However, about 10% less land was sown. As a result, production of white sugar amounted to 537,000 tonnes (2005: 599,000 tonnes). The average length of the campaign for the two factories was 100 days (2005: 112). The price paid to members for beet with an average sugar content of 16.38 and average extractability of 90.1 was EUR 49.05 per tonne of quota beet (2005: EUR 51.72).

Improved cost structureTo compete at European level, Suiker Unie must seek further cost savings and efficiency gains. The acquisition of CSM Suiker, which is expected to be finalised in the coming months, will be an important step. A considerable saving on transport costs was again achieved through the exchange of beet supplies. Beet were also processed outside the Netherlands. Whether they will be processed abroad again in the future will depend on the conditions. Further savings were made through strict process monitoring, which also reduced the number of product complaints. Investments will be made in energy reduction and energy management projects in 2007 that combine cost efficiency with sustainability.

Changed market conditionsIn the retail market, the impact of the supermarket price war is clearly making itself felt. It is being fed largely by cheap European supplies. In the light of the new market organisation, organic beet sugar is no longer a feasible option. Demand for organic sugar is not growing and the premium in the supermarket is too small to justify continued organic beet cultivation. Suiker Unie will import organic sugar to meet the demand. Sensus has stopped producing chicory fructose following the surrender of quota to the European Union. Other compositions are available for specific mixes.

TSO, the Slovenian sugar factory in which Suiker Unie has a majority interest, held its last sugar campaign in 2006. Its quota for the year had already been reduced by 15%. A restructuring plan has been submitted to the Slovenian government. The growers and contract workers will receive compensation in addition to area aid as part of the restructuring of the EU sugar regime. A redundancy plan has been agreed for the staff and alternative employment will be found wherever possible.

For Limako, too, the new sugar regime has led to many changes. Opportunities to export sugar from the EU have been significantly curtailed. The company performed well in the circumstances in 2006. In a period of favourable world market prices for white sugar, Limako was able to export a large volume of C sugar in eight months’ time.

Sensus

For Sensus, 2006 was an excellent year with higher inulin sales and a sharp increase in results. Sales are increasing steadily, particularly in the United States and Asia, and even faster than the market average.

Suiker Unie mustseek further cost savings and efficiency gains

OperationsSuiker Unie

2006 was the first year in which Suiker Unie had to cope with the far-reaching consequences of the new sugar market organisation. Under the new regime, the reference price for sugar will gradually be reduced by 36% and the minimum guarantee price for beet by 39% over a period of four years, with the intervention mechanism practically being abolished. Production volume must be slashed – by 5 million tonnes – and exports must be reduced in favour of imports. In the light of these radical changes, Suiker Unie’s performance in 2006 was excellent.

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Fructose production was ended during the year because the quota was surrendered to the European Union. Sensus has fully committed itself to the production of a complete range of inulins and commands a solid second position in this market. The challenge is to grow further with the market.

Inulin as a functionalityAs a soluble food fibre, inulin is an ingredient that is in step with the growing health awareness in the market. To inform both customers in the

food industry and consumers, Sensus operates a special portal on inulin, www.inulinplaza.com. In the years ahead, Sensus will concentrate more on exploiting inulin’s functional features

(prebiotic properties) and will work with its customers on substantiating the claims made for new products. Sensus is developing these product concepts in cooperation with customers by tailoring the inulin as closely as possible to their wishes. Helping its customers develop products and formulate recipes is all part of the job. Inulin derivatives have been developed for use in both food applications and non-food applications such as environmentally friendly soaps and dishwasher detergents.

Towards a year-round companyAs well as excellent customer service, further improvements in production efficiency are a precondition for healthy margins in this growing but highly competitive market. Against this background, Sensus has joined forces with the Cosun Food Technology Centre to study ways to increase its production capacity. Its ambition is to operate the current production facilities all year round. To facilitate future growth of inulin sales, adequate supplies of high quality chicory roots are essential. Owing to the planned phasing out of fructose production, the area of chicory under cultivation has been reduced in recent years. It will gradually increase again as inulin sales rise.

Nedalco

Alcohol producer Nedalco can look back on a good year. The European alcohol market developed favourably and saw a sharp recovery in selling prices. Supply and demand were in better balance

than in previous years. Nedalco’s turnover increased further and its result was boosted by larger sales volumes and efficiency gains. In the drinks sector, the

increase was attributable chiefly to the growing popularity of vodka in mixed drinks. Nedalco also sold substantial volumes of bioethanol for the first time. The factory in Sas van Gent made a good contribution to the result after coming into operation in 2005.

BioethanolDemand for bioethanol is growing steadily. The use of this green petrol additive has been compulsory in the Netherlands, Germany and France since 1 January 2007. There are unmistakable signs that this market will have a decisive impact on the overall European alcohol market in the years ahead. Nedalco is currently producing bioethanol in Bergen op Zoom. Studies were started during the year on the construction of additional bioethanol production capacity in Sas van Gent and Groningen (the latter in cooperation with Suiker Unie and using molasses or sugar juice as a raw material). A final decision will be taken on both projects in 2007.

The bioethanol market is fundamentally different from the traditional alcohol market. Enormous volumes have to be produced for just a handful of customers. Management, risk exposure and positioning are different from those of the traditional business and therefore require different competences. Nedalco accordingly invested in new staff with specific know-how and experience in this new market in 2006.

Investing in process innovationTo produce bioethanol cost efficiently, Nedalco is investing in second generation technology that emits even less CO2 and uses alternative high-cellulose raw materials (agro-industrial and other organic residues). The company is a pioneer in this area. Nedalco is making substantial investments in research and development and is working in partnership with several knowledge centres, such as Delft University and Wageningen University, and with a series of foreign players.

Investment in the traditional marketThe further development of the bioethanol market will not weaken Nedalco’s focus on the traditional alcohol market. During the year, it started construction of a new alcohol factory in Manchester (UK). The factory is planned to come on stream in June 2007. Sales opportunities in the UK are excellent owing to the presence of many international drink producers. The factory’s design and the capacity are comparable with those of the Sas van Gent factory. The raw materials will be sourced from a local starch factory.

Sensus is concentratingon the functionalqualities of inulin

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Nedalco keeps itsfocus also on the

traditional market

Aviko

Aviko, a manufacturer of prepared potato products, again had a difficult year. Pressure on selling prices and margins continued unabated in 2006. At the same time, the adverse effects of the very poor potato harvest led to a sharp hike in raw material costs. Through cost reductions (including lower pension costs), Aviko managed to make up for these setbacks. On balance, the result for the year was substantially better than that for 2005 but still far from satisfactory. Aviko also consolidated its market share in Europe by focusing on innovation and developing new products.

Poor harvests curb growthThroughout Europe, the processing industry was affected by poor harvests. Owing to the quality of the potatoes supplied, the yield was also lower than normal. Furthermore, the potatoes had to be processed faster than usual to prevent a further deterioration in quality. The use of salt baths to separate potatoes on the basis of their specific gravity increased costs. Frozen products can be kept for longer than a year but chilled products cannot be.

In the chipped potato market, the downward trend seen in western Europe in recent years seems to be levelling out. The volume of consumption was at virtually the same level in 2006 as in 2005. In eastern Europe the market is still growing but the growth rate has been restrained somewhat by the cost of raw materials. Aviko Rixona, a producer of potato granules and flakes, was also affected by the poor potato harvest. Sales in the first half of 2006 were lower than budgeted but recovered from the summer onwards.

A healthy pleasureThe trend towards healthy, convenient, enjoyable and good food continued during the year. Growth in the chilled sector remained as strong as in previous years; steamed potato products were particularly successful. During the year, the Netherlands Nutrition Centre recognised that a healthy diet does not necessarily exclude chips by awarding the annual Good Food Award to Fridéale, the chip with more than 30% less fat than traditional pre-fried chips.

New production linesThe market for chilled products is still growing, especially in the foodservice sector. To keep pace, Aviko has made significant investments. In Cuijk, it brought a new chilled line and a new packing line into operation. Major investments were also made in the factory in Steenderen to increase production using fewer people and less

energy. Staff numbers are being reduced gradually as planned and the desired result will be achieved through natural wastage. At one of Aviko Rixona’s two factories, the one in Venray, a new production and packing line for consumer products was built and taken into operation.

Further advances in EuropeAviko’s strategy remains directed at profitable growth and a stronger position in the European market. With this goal in mind, Aviko is actively seeking suitable partners and acquisitions. In mid-2006 it took a 70% interest in Algen AB in the south of Sweden. This company packs chilled potato products for the local market. Its excellent distribution network has now successfully introduced products from the Aviko range to the Swedish market. Later in the year, a letter of intent was signed with the Spanish company Eurofrits. Aviko will use its very extensive distribution network to further increase sales of its products in the Spanish market.

Forage and potato purchasingDuynie, an animal feed specialist, had a good year in 2006. Sales of Suiker Unie’s beet pulp is now part of its overall service package. Nijmidon also turned in a good result with the sale of dried starch for non-food applications. Korteweg, which sources a large proportion of Aviko’s potato requirements, saw its activities integrated into those of Aviko’s raw materials purchasing department.

Unifine Food & Bake Ingredients

Unifine Food & Bake Ingredients (Unifine F&Bi) again made progress in 2006 and booked a sharp increase in its result. The measures taken in recent years to improve the organisation’s focus on its main markets and enhance the efficiency of its factories are paying dividends. The sales targets were not achieved in full but profitability is showing clear growth. The east European market, and especially Russia, saw strong growth during the year. The combination of cost control and a higher margin per unit sold led to a better result for 2006.

Steamed potato products were particularlysuccessful

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Unifine F&Bi wants to grow further and gainleadership in the European market

The result was achieved without the incidental income realised on the sale of Custom Industries in March 2006.

Strong growth ambitionUnifine F&Bi wants to grow further and gain leadership in the European market. The company

ranks among the top three European suppliers of compound bakery ingredients. Its range is broad and closely tailored to the demands of industrial and artisan bakers. Pressure on selling

prices is increasing, especially for commodities. Furthermore, new suppliers are entering the market. Unifine F&Bi has identified new products and applications that will add value to its customers’ products. The company expects this approach to provide some protection from price erosion in the market for more standard products. Its strategy is already bearing fruit in a number of areas, such as wrapable icing, the well-known icing on cakes and pastries that does not stick to the packing, and the line of speciality decorative products for baked goods.

Iberian marketUnifine F&Bi strengthened its leadership in the Iberian market during the year through the acquisition of Mundipam Produtos Alimentares SA (Portugal). Mundipam is a specialist in powdered products such as pastry mixes and custard mixes. The company realises an annual turnover of about EUR 3.5 million.

Sharing best practices Unifine F&Bi thinks and operates as a European network organisation. It has a flat organisation and its competences are spread among the various companies. One company’s specialists in a specific discipline support and assist the other companies when they need to. The know-how and experience are shared to make optimal use of them. Such cooperation is not only of benefit to the company’s professionalism, customer focus and marketing but also improves the working climate across national borders.

New working methodsA great deal of attention was paid to logistics in 2006. The production companies are working with each other more intelligently and have improved their internal logistics and stock management.

Unifine Sauces & Spices

Unifine Sauces & Spices reported a higher turnover and higher result for the year in

comparison with 2005. In particular, co-packing (contract production and packing) and the processing of single spices contributed to the higher turnover. The improvement in the result was also due to the organisation’s sharper focus on the market in combination with thorough modernisation and investments in production facilities in recent years.

The satay sauce market is continuing to grow. Sales of the Wyko own brand and the private labels produced in Nijkerk are increasing. The WykoMatic hot and cold sauce dispensers are performing well in the foodservice channel and are winning loyal customers. Retail sales at petrol stations have a great deal of potential. In the international fast food sector, too, Unifine Sauces & Spices realised further growth. Only Degens, the brand for traditional butchers, suffered from a decline in the market. In the Benelux Degens is seeking to maintain its market share. The cost base will have to be further adapted to the volume of activities in the coming year.

Growth strategyUnifine works in the following segments: single herbs and spices; meat and convenience food mixes and mixes for the snack industry and traditional butchers; Benelux foodservice; European foodservice and co-packing/private labels. Each of these segments calls for its own strategy and product range. Unifine knows how to put this to its advantage and intends to grow faster than the sales market. In co-packaging and European foodservice (especially sauces), Unifine Sauces & Spices has identified interesting growth opportunities. Unifine wants to grow in mixed spices through the acquisition of blenders from food manufacturers. Unifine would then manage the recipes, maintain raw material stocks and attend to the timely delivery of customer-specific mixes. This form of long-term partnership in the food chain is to everyone’s advantage.

Co-packing underpins capacity utilisation at the factories. Economies of scale and optimal production processes are necessary to keep the return at an acceptable level. A TPM pilot project was launched at the Nijkerk factory to adapt the organisation to a lower fixed cost structure through efficiency improvements.

Restrictive regulationsThe impact of EU policy on foodstuffs is growing ever stronger. Limits introduced for a number of spices are restricting their use in recipes.

Co-packing underpins capacity utilisation at

the factories

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Unifine wants to play an active role in both the Dutch and the European lobby to avoid overly restrictive and unworkable regulations. It is also a firm supporter of a quality standard for spices because they are still adulterated too often.

Know-how and qualityUnifine developed its own training centre during the year: the Spice School. Commercial and technical staff learn from and with each other about the properties and qualities of all Unifine products and share their knowledge of customers, markets and segments. In 2007 the company will pay extra attention to ensuring an even better match between its organisation on the one hand and the markets and customer demands on the other.

Unifine guarantees the quality of its products and responds quickly to quality issues. Both factories, in Puttershoek and Nijkerk, are fully certified and have recall procedures should a product not comply with applicable standards. During the year, both factories received BCR-A certification. Calamities, however, cannot always be prevented. At the beginning of 2007, Unifine had to deal with a customer recall of articles produced under contract.

SVZ

SVZ, a supplier of fruit and vegetable ingredients to the food industry, can again look back on a good year. In all regions, its turnover increased by far more than the market average. Total profit was also markedly higher, although the result in Europe was slightly lower owing to the cost of relocating production and implementing SAP systems. On the supply side, SVZ was faced with a difficult harvest and strong prices.

Health trendSVZ’s growth is being driven largely by the trend towards healthy lifestyles. In the fruit segment, SVZ again realised healthy growth through a further increase in the number of contracts for Verifruit®. Dry applications for cereals and fruit snacks are growing steadily. In the drinks industry, there was a marked increase in functional fruit and vegetable drinks. Sales of smoothie ingredients rose sharply, particularly in the United Kingdom. SVZ achieved a sharp increase in sales in eastern Europe and Russia, where a new sales office was opened in Moscow. In Japan, too, SVZ again performed well. Netra Agro’s trading activities also turned in sound results. The location in the United States, which is engaged chiefly in the production and sale of concentrates, realised both a higher

turnover and a sharp increase in the result. Growth was underpinned by the introduction of vegetable concentrates to the range in combination with the further consolidation of the industry. In South America, SVZ strengthened its partnership with a producer of concentrates. SVZ sells the partner’s products chiefly in the North American market, which also gives it better access to the South American raw materials market.

Both producers and customers are continuing to consolidate. Many customers are screening their suppliers very strictly in order to reduce the number they work with. SVZ is one of the larger players and has made substantial investments in recent years both in product development and quality control and in production. With its state-of-the-art production facilities, SVZ can guarantee food safety and traceability. Partly for this reason, SVZ has earned itself the position of preferred supplier to several large companies. Sales are increasingly being driven by partnership with multinational customers and the integrated coordination of product specifications and logistics. New developments SVZ’s strategy is to strengthen and enlarge its position in the fruit market. SVZ anticipated the health trend several years ago and its early action is now bearing fruit. Developing product concepts such as compounds and Verifruit® in cooperation with customers generates added value. A further increase in the number of contracts has strengthened SVZ’s position in this market. A new development, one that offers SVZ interesting opportunities, is derived components that make use of the natural functionalities of fruit and vegetables such as fibres, natural colourings and aromas. European production infrastructureAll compound and aseptic activities were transferred according to plan from Hien-Dodewaard to the new production site in Etten-Leur during the year. This was part of the final phase of a project to transform the European production infrastructure in order to maintain and strengthen SVZ’s competitiveness by carrying out primary fruit processing directly in the fruit growing areas and to develop new product applications close to the customer. Good use was made of the new concentrate factory in Poland in 2006 and capacity was increased further with a vegetable concentrate line.

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SVZ’s growth is beingdriven largely by the trend towards healthy lifestyles

Developing product concepts in cooperation with customers generates added value

Commercial risksSugar market Changes in the EU sugar market organisation will result in a sharp fall in beet and sugar prices and quotas as from mid-2006. The changes in the market organisation will accelerate the existing trends of greater competition and deregionalisation in the EU sugar market.

Consumer behaviourConsumer expenditure patterns are still being driven by price awareness. As a result, margins in the chain are under pressure. Greater awareness of obesity and health concerns are changing consumer preferences. Cosun is responding by extending its product range and participating in public information campaigns.

Technical risksWeather influencesOwing to the nature and location of production, Cosun’s results are determined largely by the weather. Cosun matches its operations to climate conditions and spreads the harvests over as many different countries and regions as possible. Contracts with growers take account of the risk of poor harvests where necessary. Owing to the limited geographical spread, this harvesting risk is particularly relevant to potatoes, sugar beet and chicory.

Raw materialsThe quality of raw materials, principally sugar beet, chicory, spices, fruit, vegetables and potatoes, has a significant influence on Cosun’s processing and production operations. Informing and advising potato, sugar beet and chicory growers in detail about efficient production methods and basing the payment system on quality improves the standard of the raw materials and maximises the return. All beet growers that supply Suiker Unie are now certified.

All Cosun businesses that produce food ingredients and foodstuffs work in accordance with HACCP procedures. Industrial customers are making increasingly stricter demands on the traceability of their ingredients. This means more

attention has to be paid to the upstream end of the chain and the links are becoming more intertwined. Financial risksPosition riskThe purchase of many farm products directly from the source in a short period of time might create a mismatch between the purchasing position and the selling position, especially at Aviko and SVZ. Where possible, Aviko and SVZ balance their purchasing and selling positions in raw materials and end products. Nevertheless, there is an exposure to price risk, particularly at Aviko, where low potato prices eventually have a delayed adverse impact on margins. The attendant risks are controlled by means of good reporting and control procedures and the direct involvement of senior group management.

Financing and interest rate risksThe structural financing requirement is covered by long-term fixed-rate loans with terms of between about four and twelve years. To meet the sugar campaign’s cyclical financing requirement and the other financing requirements, Cosun has concluded several special financing arrangements.

Exchange rate risksAlthough Cosun is active chiefly in the euro region, as an international business it is exposed to exchange rate risks. These risks are concentrated around the US dollar and the pound sterling. In principle, exchange rate risks arising on operating and financing activities are hedged.

Product liabilityAs a producer of food ingredients, Cosun recognises the risks of product liability. An integrated framework of quality control, safety and traceability systems is in place to limit the risks. Procedures have been introduced within the organisation to ensure a fast and appropriate response when circumstances require. Adequate insurance has been taken out to cover the risk of product liability.

Risk profile and risk management

Likeeveryotherbusiness,Cosunisexposedtoarangeofcommercial,technicalandfinancialrisksthatare inherent in its activities.Cosun’spolicy is tomitigate these risksbymeansof targetedproduct/marketcombinations,aflatorganisationalstructureandasharpfocusoncooperationwithcustomersandsuppliersandamongtheCosunbusinessesthemselves.

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Internal control systemCosun has an internal control system to control the risks attaching to the business activities and to monitor the efficiency and effectiveness of business processes, including administrative processes. The business groups themselves have primary responsibility for the control system. Group responsibility is laid down in the following framework:• All business groups draw up three-year

operating plans. The plan for the next year is used to test actual monthly and quarterly results. The results are discussed on a monthly basis at Executive Board level and on a quarterly basis at Board and Supervisory Board level.

• Detecting and pro-actively responding to risks is part of the operational planning procedure, The main risks and action plans are identified and reported upon every five years or so. The last time that this was done was in 2004.

• The business groups’ financial managers report functionally to the finance & control director. Cosun’s risk management policy is implemented by the Executive Board.

• Cosun’s finance & control manual includes detailed guidelines on financial reporting that incorporates a section on risk control.

• The external auditor conducts an annual audit in order to express an opinion on the annual accounts. The external auditor is appointed by and reports to the Supervisory Board. The audit scope and depth are determined annually in consultation with the Executive Board, whereby the minimum work required for the audit opinion is extended to cover specific risks, business processes or locations that the Supervisory Board or the Executive Board believes should receive additional attention.

• Recommendations arising at every level from the external audit are reported to and followed up by the Executive Board. The Executive Board subsequently reports to the Board and the Supervisory Board.

Cooperative issues

2006 was dominated by the proposed acquisition of CSM Suiker and its consequences for the cooperative. In tandem with the talks with CSM on the possible purchase of its sugar division, Cosun consulted the NBF, the body that represents CSM’s growers, to discuss the conditions under which the growers could join the cooperative. Cosun will invite the CSM growers to become members of Cosun. In the longer term, there will be no difference between the ‘old’ and the ‘new’ members. It is important to Cosun that the cooperative can be strengthened by the CSM growers. In the difficult circumstances of the new European sugar market organisation, the interests of all beet growers must coincide with each other. The acquisition of CSM Suiker must also benefit Cosun’s existing members and recognise their contribution to the cooperative’s capital. Agreement was ultimately reached with the NBF on the conditions for membership. Both parties signed a heads of agreement on 2 August 2006.

The CSM growers will be offered one opportunity to join Cosun. They must make an additional contribution to the cooperative’s capital in exchange for the inclusion of a guarantee in the sugar beet payment regulations that they may exercise after a period of ten years. Furthermore, beet that are supplied in respect of shares issued after 31 December 2006 will qualify in the initial years for a member’s bonus based on the sugar activities only. The new shares will gradually share in the results of the other activities. As from 2018, there will be no differences between ‘old’ and ‘new’ shares. The agreement with the NBF also included agreements on the representation of new members in the management bodies. The heads of agreement will be worked out in a proposal to alter the articles of association and in a new share payment regulation. The Members’ Council agreed to the proposal on 29 November. All the changes, however, are subject to the actual acquisition of CSM Suiker.

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Administrative affairsOn the proposal of the West Brabant district committee, this district’s two sections were merged in 2006. No changes occurred elsewhere in the districts.

The Members’ Council met on five occasions during the year. In addition to three scheduled meetings, two meetings were convened to discuss the acquisition of CSM Suiker and the membership conditions for the CSM growers.

The Members’ Council regretfully bade farewell to one of its members, J.B.M. Drummen, who died unexpectedly on 19 April. Messrs J.M. Klompe and T. van der Torren were re-elected as members of the Board. The Chairman of the Supervisory Board, Mr B.G.W. Vervoort, stood down after nearly 30 years’ involvement with Cosun. The position of Chairman was assumed by Mr W. van der Zee. Mr J.F. Botma was appointed member of the Supervisory Board.

In addition to the acquisition of CSM Suiker and the membership conditions for the CSM growers, the Members’ Council considered such important matters as the regulation on the transfer of surplus sugar, the delivery conditions for 2006 and 2007 and the trading conditions for reference sugar.

The Youth Council held several small-scale ‘street meetings’ and discussed non-food applications of agricultural raw materials and the membership conditions for the CSM growers at two national meetings. The Youth Council’s chairman, J.D. Tonkes, stood down during the year and was succeeded by J. Stroo as of 1 December.

On behalf of the Board On behalf of the Executive Board

J.E.M. van Campen, Chairman C.J. Menkhorst, President & CEO

Breda, 15 March 2007

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Members and shares per district

31 December 2006 31 December 2005

Section/District Members* Shares Members* Shares

Zeeuwsch-Vlaanderen 714 6,487 741 6,537

Zeeland-Midden 583 5,642 590 5,589

Zeeland Noord 354 3,935 372 4,010

Goeree-Overflakkee 266 3,015 275 2,967

West Brabant 917 8,190 977 8,304

Zuid-Hollandse Eilanden 359 4,137 364 4,080

Holland-Midden 243 3,930 260 4,064

Kop van Noord-Holland 460 7,034 477 7,144

Oostelijk Flevoland 408 8,514 420 8,659

Noordoostpolder 483 6,765 505 6,881

Friesland 268 3,415 269 3,349

Groningen 702 9,541 720 9,589

Drenthe/Overijssel-Noord 643 9,475 650 9,375

Overijssel-Zuid Gelderland 448 3,889 481 3,954

Limburg (COVAS) 1 20,000 1 20,000

Oost Brabant (CSV) 1 10,082 1 10,082

Zuidelijk Flevoland 125 3,738 126 3,663

6,975 117,789 7,229 118,247

* A and C members as defined in Article 4 of the Articles of Association.The number of B members in 2006 was 2,945 (2005: 3,181).

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As at 31 December 2006

BoardChairman J.E.M. van Campen, KraggenburgVice-Chairman G.M. van Tilburg, BantDeputy Vice-Chairman I.L.G. van Melle, Schoten (B)Members J.M. Klompe, Wolphaartsdijk D.H. de Lugt, De Cocksdorp J.M.M. Megens, Driebergen Ms G. Prins, Nieuwkoop J.A. Smid, Dalerpeel T. van der Torren, WaddinxveenSecretary J.W.M.J. van Roessel

Supervisory BoardChairman W. van der Zee, ZaamslagSecretary C.E.M. de Waal, RoermondMembers J.F. Botma, Oosternijkerk N.H. van Halder, Tilburg C. van Hilten, Zoelen F. Wiersema, Spijk

Executive BoardPresident & CEO C.J. Menkhorst Members S.A. Brandsma, group director Unifine F&Bi J.W. Gerritsen, group director Aviko W.C.J. van Noort, group director Unifine Sauces & Spices G.H. de Raaff, group director Corporate Development A. Roberti, group director Suiker Unie R.P. Smith, group director Finance & Control M.J.M. van de Ven, group director SVZSecretary Ms M.J.C.W. van den Maagdenberg

Central Works Council Chairman P. Hen Aviko (Lomm)Secretary Ms I. Raven Unifine Sauces & SpicesMembers J.P. Blaauwhoed Cosun (CFTC) A.C.J. van der Borst Suiker Unie (Specialities) Ms J. Goosen – Cazemier Aviko (Rixona) P. Izelaar Unifine Sauces & Spices A. Jansen Suiker Unie R. Kalwij Cosun W. Kooiman Suiker Unie C.J. Rommers SVZ Vacancy SVZ

Members of the Board, Supervisory Board, Executive Board and Central Works Council

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Members and shares per district

The Supervisory Board met on eight occasions in 2006. A joint meeting was also held with the Board to consider the annual accounts for 2005. The Supervisory Board also attended the five meetings convened by the Members’ Council in 2006 and the members’ meetings held throughout the country. The Supervisory Board devoted a great deal of attention to financial reporting and the development of the activities. Issues discussed included investments and divestments, acquisitions, financing, business risks and the strategy. In-depth talks were held on the acquisition of CSM Suiker. The Supervisory Board approved the acquisition of CSM Suiker and the associated consequences for the articles of association. The Chairman, Mr B.G.M. Vervoort, stood down in 2006. The Members’ Council elected Mr J.F. Botma to the Supervisory Board. Mr W. van der Zee was appointed Chairman.

The Supervisory Board met the external auditor, KPMG Accountants N.V., on two occasions to discuss the findings of the audit of the 2005 accounts, the accounting system and internal controls, the scope and depth of the audit for 2006 and matters of special interest. The findings of the audit of the 2006 accounts were discussed with the auditor in March 2007.

Pursuant to Article 31, paragraph 4, of the Articles of Association, the Supervisory Board has examined the annual accounts of Koninklijke Coöperatie Cosun U.A. for 2006. In this examination, the Supervisory Board was assisted by the auditors appointed by it, whose report on the accounts is reproduced in the section Other information.

The Supervisory Board recommends that the Members’ Council approve the accounts.

On behalf of the Supervisory Board,

W. van der ZeeC.E.M. de Waal

Breda, 15 March 2007

Report of theSupervisory Board

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Annual Accounts2006

2 8

Consolidated balance sheet(before profit appropriation; in EUR millions)

At year-end Notes 2006 2005

ASSETS

FixedassetsIntangible fixed assets (1)Tangible fixed assets (2)Financial fixed assets (3)

CurrentassetsStocks (4)Debtors, prepayments and accrued income (5)Cash (6)

Totalassets

EQUITY AND LIABILITIES

Groupequity�Capital and reserves (7)Minority interests (8)

Provisions� (9)

Non-currentliabilities� (10)

Currentliabilities� (11)Credit institutions and liabilities with a financing characterCurrent liabilities, accruals and deferred liabilities

Totalequityandliabilities

71.6458.5

51.5

581.6

381.2283.6139.0

803.8

1,385.4

607.117.7

624.8

108.6

256.1

41.6354.3

395.9

1,385.4

65.2408.782.5

556.4

423.3227.052.3

702.6

1,259.0

545.615.3

560.9

126.9

254.9

42.8273.5

316.3

1,259.0

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Consolidated profit and loss account(in EUR millions)

For the financial year Notes 2006 2005

Netturnover (14)

Movements in stocks of finished goodsOther operating income (15)

Totaloperatingincome

EU levies (16)Cost of raw materials and consumables (17)Cost of work subcontracted and other external charges (18)Staff costs (19)Depreciation and amortisationImpairments in value of intangible and tangible fixed assets (21)Other operating expenses

Totaloperatingexpenses

Operatingprofit

Interest and similar incomeInterest and similar charges

Financialincomeandexpense (22)

ResultonordinaryactivitiesbeforetaxationTaxation (23)Share in results from participating interests

ResultonordinaryactivitiesaftertaxationMinority interests

Resultfortheyear

1,468.7

-/- 60.763.1

1,471.1

0.3898.4224.5165.564.93.03.7

1,360.3

110.8

11.4-/- 22.8

-/-11.4

99.4-/- 26.2-/- 5.5

67.7-/- 1.8

65.9

1,338.5

-/- 3.212.6

1,347.9

36.5789.9229.3184.557.43.4

-/- 6.4

1,294.6

53.3

12.1-/- 22.0

-/-9.9

43.4-/- 12.1-/- 7.5

23.80.2

24.0A

nn

ua

l

Ac

co

un

ts

2

00

6

3 0

Consolidated cash flow statement(in EUR millions)

2006 2005

Operating profitDepreciation and amortisationImpairmentsMovement in provisionsResult on sale of participating interests and tangible fixed assetsOther movements in participating interestsMovement in working capital (excluding cash and short-term bank credit)

Cashflowfrombusinessoperations

Dividends receivedNet interest paid Taxation on profit received/paid Other movements

Cashflowfromoperatingactivities

Investments in intangible and tangible fixed assetsProceeds from the sale of tangible fixed assetsOther movements in financial fixed assetsDivestment of participating interests and acquisitions

Cashflowfrominvestingactivities

Share movementsGross distribution under the Sugar Beet Delivery Payment RegulationsMovements in minority interestsIncrease in long-term receivablesDecrease/increase in short-term interest-bearing debtors Increase in non-current liabilitiesDecrease/increase in short-term liabilities to credit institutionsand liabilities with a financing character

Cashflowfromfinancingactivities

Netdecrease/increaseincash

Cash at beginning of year Cash at participating interests acquired

Cashatendofyear

110.864.93.0

-/- 19.4-/- 15.7-/- 1.6

34.3

176.3

0.2-/- 11.4

13.1-/- 0.1

1.8

178.1

-/- 105.48.2

-10.6

-/- 86.6

-/- 0.1-/- 3.5-/- 0.1-/- 0.6

7.6-/- 2.9

-/- 6.5

-/-6.1

85.4

52.31.3

139.0

53.357.42.65.5

-/- 0.4-/- 6.9-/- 76.0

35.5

--/- 9.9-/- 15.1-/- 0.5

-/- 25.5

10.0

-/- 93.03.5

-/- 0.4-/- 10.7

-/-100.6

--/- 3.1

--/- 0.5-/- 7.6-/- 10.2

21.2

-/-0.2

-/-90.8

143.1-

52.3

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General

Koninklijke Coöperatie Cosun U.A. (‘Cosun’), registered in Breda, the Netherlands, processes and prepares chiefly agricultural raw materials into intermediate products for the international food and drink indus-try, the foodservice channel (restaurants, caterers and wholesalers) or into end products that are sold to consumers through retail outlets. The group also processes organic residues into, for example, bioethanol and animal feed.

The activities are organised into four groups:

• Basic ingredients, such as sugar and inulin (Suiker Unie and Sensus).• Industrial alcohol and bioethanol (Nedalco).• Potato products, including chilled, frozen and dried potato products and a wide range of other pre-

pared potato specialities (Aviko).• Compound ingredients, including fine bakery specialities, sauces, marinades, dressings, toppings,

spices, mixes and fruit & vegetable applications (Unifine Food & Bake Ingredients, Unifine Sauces & Spices and SVZ).

Applicable standardsThe annual accounts have been prepared in accordance with the legal requirements as set out in Part 9, Book 2, of the Dutch Civil Code. The cooperative profit and loss account is prepared in accordance with the exemption permitted under Article 402, Book 2, of the Dutch Civil Code.

Consolidation principlesThe consolidated accounts comprise the financial information of Cosun and the group companies over which it can exercise direct and indirect control or that it manages on a unified basis. Group companies acquired during the year are included as from the date upon which significant influence can be exercised over business and financial policy. The results of group companies sold during the year are recognised up to the date of divestment. Intercompany payables, receivables and transactions, as well as profits made within the group, are eliminated in the consolidated accounts. Group companies are consolidated in full, with minority interests held by third parties being disclosed separately. Joint ventures are consolidated on a proportional basis.In accordance with Articles 379 and 414, Book 2, of the Dutch Civil Code, a list of group companies and other participating interests has been filed with the Chamber of Commerce in Breda, the Netherlands. That list forms part of these annual accounts.

Acquisitions and divestments

On 3 March 2006, Cosun sold the American and Canadian activities of Custom Industries (part of Unifine Food & Bake Ingredients), realising a gain of EUR 13.1 million. At the end of May, Unifine Food & Bake Ingredients acquired 100% of the shares in Mundipam Produtos Alimentares, S.A. (‘Mundipam’). Mundipam is a Portuguese company that produces bakery ingredients. At the beginning of July 2006, Aviko acquired a 70% interest in Investmentaktiebolaget Algen AB (‘Algen’). Algen is active in the Swedish market for chilled potato products.

Notes to the consolidated annual accounts(in EUR millions)

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Accounting policies

GeneralThe annual accounts have been prepared under the historical cost convention. All assets and liabilities are stated at face value unless indicated otherwise. Income and expense items are recognised in the year in which they are earned or incurred.

Translation of foreign currenciesThe reporting currency for Cosun’s annual accounts is the euro (EUR). Income and expense items ari-sing from transactions in foreign currencies and the non-monetary balance sheet items and monetary amounts payable and receivable of foreign participating interests are translated at the rates of exchange ruling at transaction date or balance sheet date respectively. Exchange gains and losses are taken to the profit and loss account.All balance sheet items of foreign participating interests denominated in foreign currencies are translated at the rates ruling at balance sheet date. Items in the profit and loss accounts of foreign participating interests are translated at the rates ruling at transaction date. Translation gains and losses are taken directly to the legal reserve for exchange differences in Cosun’s capital and reserves, net of taxation where applicable. Exchange differences on the long-term financing of foreign participating interests and on financial instruments contracted to hedge their exchange rate risks are treated in a similar manner. Intangible fixed assetsGoodwill arising on the acquisition of participating interests (share or asset/liability transactions) repre-sents the positive difference between acquisition cost and net asset value based on Cosun’s accounting policies at the date of acquisition. Goodwill purchased on the acquisition of foreign group companies and participating interests is translated at the rates ruling at the date of acquisition. Capitalised goodwill is amortised on a straight-line basis over expected useful life, with a maximum of 20 years.

Tangible fixed assetsLand and buildings, machinery and equipment, other tangible fixed assets, prepayments on tangible fixed assets and tangible fixed assets in production are stated at cost of acquisition or manufacture less accu-mulated depreciation. Subsidies and investment grants are deducted from the cost of the assets to which they relate. Depreciation is charged as a percentage of cost of acquisition or manufacture on a straight-line basis over the assets’ economic lives. Land, prepayments and work in progress are not depreciated. Maintenance expenditure is capitalised only insofar as it increases the life of the asset. Financial fixed assetsWhere significant influence is exercised over business and financial policy, participating interests are stated at net asset value calculated in accordance with Cosun’s accounting policies. Where no significant influence is exercised, participating interests are stated at the lower of cost and sustainable realisable value.Deferred tax assets, including carry-forward losses, are recognised in so far as they may reasonably be considered realisable in due course.

Other debtors are stated at face value net of a provision for doubtful debts where necessary.

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Impairment of fixed assetsCosun accounts for intangible, tangible and financial fixed assets in accordance with accounting policies generally accepted in the Netherlands. In accordance with these policies, assets with a long life are reviewed as to their impairment if changes or circumstances indicate that their book value will not be recovered. The recoverable amount of an asset used in the production process is determined by comparing its book value with the present value of the future net cash flows the asset is expected to generate. If the asset’s book value is higher than the present value of estimated future cash flows, the difference is charged to the profit and loss account as an impairment.

StocksRaw materials and consumables are stated at the lower of cost on a first-in, first-out basis (FIFO) and market value. Finished goods are stated at cost of manufacture including the cost of raw materials and consumables used and other direct manufacturing costs. Part of the indirect manufacturing cost is recognised in cost of manufacture. Trading stocks are stated at historical cost. Historical cost includes purchase price and related costs.

DebtorsDebtors are stated at face value net of a provision for doubtful debts where necessary. Provisions are formed on the basis of an individual assessment of the debt’s collectability.

Minority interestsMinority interests are stated at the third party’s share in net asset value.

ProvisionfordeferredtaxationInsofar as there are differences between fiscal valuations and valuations based on these accounting poli-cies, a provision is formed for the resultant deferred tax liabilities, calculated using the tax rate applicable at the date of expected realisation.

Pensions and other deferred employee benefits Defined contribution plans Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account as incurred. Also obligations for defined benefit plans administrated within indu-stry pension funds are accounted for as defined contribution plans on account of their compliance with the provisions of Dutch accounting and reporting guideline RJ 271.

Defined benefit plansCosun’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods. This benefit is discounted to determine its present value, and the fair value of the plan assets is deducted. The discount rate is the yield at the balance sheet on AA credit rated bonds that have maturity dates approximating to the terms of Cosun’s obligations. The calculation is performed by a qualified actuary using the projected unit credit method.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in the profit and loss account on a straight-line basis over the average period until the benefits become unconditional. To the extent that the benefits become uncon-ditional immediately, the expense is recognised immediately in the profit and loss account.

In respect of actuarial gains and losses in calculating Cosun’s obligation in respect of a plan, to the extent that any cumulative unrecognised actuarial gain or loss exceeds 10% of the greater of the present value of the defined benefit obligation and the fair value of plan assets, that portion is recognised in the profit and loss account over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised.

Where the calculation results in a benefit to Cosun, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

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Other deferred employee benefitsThe obligations in respect of other deferred employee benefits are treated in the same manner as the defined benefit pension plans with the exception of actuarial gains and losses, which are taken directly to the profit and loss account.

Profit recognitionCosun recognises sales proceeds in net turnover when delivery has taken place. Net turnover represents the amount receivable from the sale and delivery of goods and services net of discounts, bonuses and taxes on turnover. The share in the results of participating interests represents Cosun’s share in the results of those participating interests. Taxes on the result for the year comprise both taxes payable in the near future and deferred taxes, with due account being taken of tax facilities and non-deductible costs. Profits are not taxed if and insofar as they can be set off against losses incurred in previous years and a deferred tax asset had not been recognised. Tax credits on losses are recognised if they can be set off against profits earned in previous years. Tax credits on losses are also recognised if they can be set off against expected future profits.

Cash flow statementThe consolidated cash flow statement is prepared in accordance with the indirect method. The amounts in the cash flow statement comprise cash and cash equivalents. Cash flows denominated in foreign currencies are translated into euros at average rates. The consideration received or paid for group companies acquired or sold is recognised in cash flow from investing activities.

Use of estimatesIn accordance with generally accepted accounting policies, the amounts disclosed in these annual accounts are based in part on estimates and assumptions. Actual results may differ from these estimates.

Financial instrumentsCosun and its group companies use derivative financial instruments to hedge exchange rate risks and interest rate risks arising from operating, financing and investing activities. The outstanding financing commitments for which the exchange rate risks have been hedged are valued at the hedge rate. Derivative instruments used to hedge exchange rate risks on permanent group financing and other assets and liabilities denominated in foreign currency at balance sheet date are stated at fair market value and presented as current debtors or liabilities. The fair market value of derivative instruments used to hedge the exchange rate risks on expected future cash flows and interest rate derivative instruments are not valued.

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( 1 ) I N TA N G I B L E F I x E d A S S E T SMovements in intangible fixed assets were as follows:

Goodwill Otherintangible

fixed assets

Total

Book value at 1 January 2006 57.3 7.9 65.2

Movements:- New in consolidation 1.8 - 1.8- Investments 8.3 8.2 16.5- Amortisation -/- 5.7 -/- 4.5 -/- 10.2- Impairments in value -/- 1.7 - -/- 1.7

B O O K V A L U E AT31 d E C E M B E R 2 0 0 6 60.0 11.6 71.6

Accumulated amortisation and impairments in value of other intangible fixed assets at 31 December 2006 amounted to EUR 10.2 million (2005: EUR 7.3 million).

GoodwillAbout 75% of the goodwill relates to the purchase of potato activities and is being amortised over 20 years on account of its strategic nature. Goodwill relating to the 39% interest acquired in Koninklijke Nedalco B.V. at the end of December 2004 will be amortised over five years at most.

Other intangible fixed assetsOther intangible fixed assets, including software and licence expenditure, are amortised over a period of 3 to 5 years. Cosun received CO2

emission rights free of charge. The net surplus balance at year-end is not valued.

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( 2 ) TA N G I B L E F I x E d A S S E T SMovements in tangible fixed assets were as follows:

Land and buildings

Machinery and

equipment

Othertangible

fixed assets

Prepayments and in

production

Not used in production

process

Total

Book value at 1 January 2006

120.8 208.2 15.2 50.0 14.5 408.7

Movements:- Investments 15.6 59.4 9.2 11.1 0.1 95.4- Disposals -/- 3.2 -/- 1.9 -/- 0.2 -/- 0.9 -/- 2.5 -/- 8.7- New in consolidation 14.0 5.7 0.9 0.1 - 20.7- Depreciation -/- 9.0 -/- 39.0 -/- 6.4 - -/- 0.3 -/- 54.7- Impairments in value - -/- 1.3 - - - -/- 1.3- Other movements 0.4 -/- 1.4 - - - -/- 1.0- Reclassification 0.1 27.1 - -/- 29.7 2.5 -- Exchange differences -/- 0.3 -/- 0.2 -/- 0.1 - - -/- 0.6

B O O K V A L U E AT31 d E C E M B E R 2 0 0 6

Accumulated depreciation andimpairments in value at

138.4 256.6 18.6 30.6 14.3 458.5

31 December 2006 150.3 512.0 56.0 - 7.9 726.2

The expected economic lives and the depreciation terms based thereon are 10 to 40 years for buildings, 10 to 20 years for machinery and equipment and an average of 4 years for other tangible fixed assets. The insured value of buildings, machinery, equipment fixtures and fittings was approximately EUR 2 billion (2005: EUR 2 billion).

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( 3 ) F I N A N C I A L F I x E d A S S E T SMovements in financial fixed assets were as follows:

Participating interests

Receivables from

participating interests

Deferredtax assets

Otherreceivables

Total

At 1 January 2006 15.0 1.4 45.8 20.3 82.5

Movements:- Investments and issuances - - 4.7 0.4 5.1- Repayments and releases - - -/- 13.2 -/- 0.1 -/- 13.3- Revaluation of deferred taxes - - -/- 8.5 - -/- 8.5- New in consolidation -/- 14.5 -/- 1.3 - - -/- 15.8- Share in results of participating interest -/- 0.2 - - - -/- 0.2- Dividends received and other movements 1.4 - - 0.3 1.7

AT 31 dECEMBER 2006 1.7 0.1 28.8 20.9 51.5

Participating interestsParticipating interests relates in part to unconsolidated indirect interests in Eemshaven Sugar Terminal C.V., Eemshaven, the Netherlands, (41.7%). The joint venture Central European Potato Ventures B.V., Oudenhoorn, the Netherlands, (50%) was consolidated as from 2006.

Deferred tax assetsDeferred tax assets relates to the valuation of available carry-forward losses and timing differences between fiscal and commercial valu-ations. Of these assets, EUR 7.7 million (2005: EUR 4.7 million) will probably be realised within one year.

Carry-forward losses not recognised in deferred tax assets in the balance sheet amounted to EUR 25.9 million (2005: EUR 20.8 million).

Other receivablesCosun and the co-seller, joint venture partner AstraZeneca Holdings B.V., have accepted joint and several liability for possible claims following the sale of Advanta B.V. in 2004. Other receivables accordingly include an escrow of EUR 20.0 million that is not available on demand.

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( 4 ) S TO C K S

2006 2005

Raw materials and consumables 76.3 69.6Finished goods and trading stocks 304.9 353.7

381.2 423.3

Of the stocks, EUR 3.1 million (2005: EUR 1.8 million) is stated at lower market value. The provision for obsolete stocks amounts to EUR 5.2 million (2005: EUR 6.5 million).

( 5 ) d E BTO R S , P R E PAY M E N T S A N d A C C R U E d I N C O M E

2006 2005

Trade debtors 183.2 155.8Receivables from participating interests and joint ventures 0.2 0.8Corporation tax recoverable 2.1 15.8Other tax assets 22.6 21.9Other debtors, prepayments and accrued income 75.5 32.7

283.6 227.0

The item other debtors includes fructose restructuring aid receivable to an amount of EUR 44.3 million. In the comparative figures for 2005, the item other debtors includes an interest-bearing receivable of EUR 7.6 million payable by Stichting Pensioenfonds Koninklijke Cosun. This amount was received in full in 2006.

( 6 ) C A S hCash includes deposits of EUR 83.6 million (2005: EUR 5.0 million) that mature in 2007. Of the cash, EUR 3.2 million (2005: EUR 4.2 million) is not available on demand.

( 7 ) C A P I TA L A N d R E S E R V E SFor a breakdown of capital and reserves, reference is made to the notes to the cooperative accounts.The consolidated statement of total recognised gains and losses is as follows:

2006 2005

R E S U LT F O R T h E Y E A R 65.9 24.0

Change in accounting for pensions and other deferred employee benefits - -/- 22.0

Totalaccumulatedeffectofchangesinaccountingpolicies - -/-22.0

Translation differences on foreign participating interests -/- 0.4 3.2Revaluation reserve - 5.4Release revaluation reserve to profit and loss account -/- 1.1 -/- 1.7

Totaldirectmovementsincapitalandreserves -/-1.5 6.9

TOTA L R E S U LT R E C O G N I S E d BY C O S U N 64.4 8.9

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( 8 ) M I N O R I T Y I N T E R E S T S

2006 2005

At 1 January 15.3 15.5

Movements:- Share in results 1.8 -/- 0.2- Movements in consolidation and capital contributions 0.9 -- Dividend -/- 0.4 -/- 0.2- Exchange differences and other movements 0.1 0.2

AT 31 d E C E M B E R 17.7 15.3

Minority interests consist chiefly of the third-party interests in the Slovenian sugar factory, Tovarna Sladkorja Ormoz dd, in the trading house, Limako B.V. and in the company acquired in 2006 Algen.

( 9 ) P R O V I S I O N S

2006 2005

Deferred taxation 16.7 21.7Restructuring and reorganisation 21.5 20.3Other 38.6 30.8

76.8 72.8Pensions and other deferred employee benefits 31.8 54.1

108.6 126.9

Approximately EUR 87,7 million (2005: EUR 109,0 million) of the provisions is long-term in nature.

Movements in provisions other than the provision for pensions and other deferred employee benefits were as follows:

Deferredtaxation

Restructuring and

reorganisation

Other Total

At 1 January 2006 21.7 20.3 30.8 72.8

Movements:- Additions charged to the profit and loss

account - 10.8 9.8 20.6- New in consolidation 0.3 - - 0.3- Withdrawals -/- 2.6 -/- 4.2 -/- 0.6 -/- 7.4- Release to profit and loss account -/- 2.7 -/- 4.7 -/- 1.4 -/- 8.8- Reclassification - -/- 0.7 - -/- 0.7

AT 31 d E C E M B E R 2 0 0 6 16.7 21.5 38.6 76.8

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Provision for restructuring and reorganisationThe provision for restructuring and reorganisation relates to payments and other expenses in respect of reorganisations announced and commenced at balance sheet date. The increase in 2006 was attributable largely to the restructuring of Sensus on account of the termi-nation of fructose production.

Other provisionsOther provisions have been formed in respect of contract risks, claims and fines to an amount of EUR 23.9 million (2005: 16.0 million) Other provisions have also been formed for environmental risk, asset demolition risks and other risks to an amount of EUR 14.7 million (2005: 14.8 million).

Pensions and other deferred employee benefits Several employee benefits and pension plans apply within Cosun. The life-long pension plans for employees of the business groups Suiker Unie, Nedalco, Aviko and Unifine Sauces & Spices are administered separately by the business groups’ own pension funds. Several other pension plans, including the transitional early retirement plan at Suiker Unie and the life-long pension plan at SVZ, are administered by insurance companies. A number of plans are administered by an industry pension fund or are self-administered (jubilee and payments by death). Administration of the plans takes account of local statutory frameworks and terms of employment. The net obligation for pensions and other deferred employee benefits can be broken down as follows:

31 December 2006

31 December 2005

Present value of funded obligations 570.1 623.1Present value of unfunded obligations 3.4 3.8Present value of other deferred employee benefits 4.9 5.1Fair value of plan assets -/- 607.3 -/- 556.7

Present value of net obligations -/- 28.9 75.3

Unrecognised actuarial gains and losses 70.0 -/- 10.5Unrecognised past service costs for conditional pension benefits -/- 9.3 -/- 10.7

N E T O B L I G AT I O N 31.8 54.1

Movements in the net obligation disclosed in the balance sheet for pensions and other deferred employee benefits granted can be broken down as follows:

2006 2005

At 1 January 54.1 54.2

Movements:- New in consolidation - 5.3- Contributions paid -/- 19.4 -/- 19.0- Charged to profit and loss account (see next page) -/- 2.9 13.6

AT 31 d E C E M B E R 31.8 54.1

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The result disclosed in the profit and loss account in respect of defined benefit pension plans can be broken down as follows:

2006 2005

Current service cost 18.7 18.9Employee contributions -/- 1.5 -/- 1.3Interest on obligations 24.7 25.5Expected return on plan assets -/- 28.5 -/- 26.5Curtailment or settlement result -/- 18.0 -/- 10.3Actuarial results 0.3 0.4Past service costs 1.4 6.9

TOTA L -/-2.9 13.6

The income is included under staff costs in the profit and loss account. The income for the 2006 financial year was impacted in part by the recognition of changes in the pension plans of Aviko en Unifine Sauces & Spices. The expense for the 2005 financial year had been impacted by the recognition of changes in the pension plans of Suiker Unie, Nedalco, Aviko and Unifine Sauces & Spices. The actual return on plan assets was EUR 47,8 million (2005: EUR 44,4 million).

The main actuarial assumptions were:

2006 2005

Discount rate 4.5 % 4.0 %Expected return on shares 7.0 % 7.0 %Expected return on bonds 4.0 % 4.0 %General salary increases 2.0 % 2.0 %Inflation rate medical costs 4.0 % 4.0 %Future pension increases 1.0 - 2.0 % 2.0 %

The mortality table used was the GBM/V 1995-2000, with an adjustment of two years for men and one year for women.In a limited number of specific cases, exceptions are made from the assumptions above only insofar as the conditions of the insurance contract or the financial policy of the company pension fund gave cause to do so.

( 10 ) N O N - C U R R E N T L I A B I L I T I E S

2006 Effectiveinterest rate 2005 Effective

interest rate

Payable to credit institutions 16.5 4.9 % 15.3 4.7 %Payable to institutional investors 239.6 4.9 % 239.6 4.9 %

256.1 254.9

Payable to credit institutions Long-term liabilities payable to credit institutions have a remaining term of between 1 and 5 years. EUR 5.6 million carries variable interest. EUR 5.0 million relates to a sale and lease back agreement in respect of tangible fixed assets.

At year-end 2006, Cosun contracted a new five-year EUR 150 million financing facility. The facility was not drawn upon during the year.

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Payable to institutional investorsDe schulden aan institutionele beleggers bestaan volledig uit bij Engelse en Amerikaanse instituten geplaatste leningen met een aflossing Amounts payable to institutional investors relate entirely to loans issued by British and American institutional investors repayable in full on maturity after 4, 7, 9 and 12 years. EUR 74.7 million has a remaining term of between 1 and 5 years. The loans are denominated in euros (EUR 56 million) and in US dollars (USD 207.5 million). The entire currency risk on the principal and interest payments of the non-euro loans has been hedged by means of financial instruments for the term of the loans. The funds have been granted to the group on condition that it satisfies certain financial ratios. All these conditions were satisfied during the year.

( 11 ) C U R R E N T L I A B I L I T I E S

2006 2005

Payable to credit institutions 37.0 22.2Liabilities with a financing character 4.6 20.6

Total credit institutions and liabilities with a financing character 41.6 42.8

Payable to members 83.6 58.4Payable to suppliers and trade creditors 105.6 92.0Corporation tax payable 13.8 0.9Other taxes and social security contributions payable 11.1 6.7Pension liabilities 0.2 0.4Other current liabilities, accruals and deferred income 140.0 115.1

Total current liabilities, accruals and deferred liabilities 354.3 273.5

Other liabilities, accruals and deferred income relate to production levies, restructuring levies, interest, holiday allowance and holidays and other expenses payable. At year-end 2006 no use had been made of an agreement for the sale and repurchase of sugar. This agree-ment ends in September 2007.

Restructuring leviesIn the current sugar market regime, Cosun is obliged to pay a restructuring levy. At year-end 2006, this obligation was EUR 76.5 million. Of this amount, EUR 30.6 million has been recognised as periodic costs in the 2006 financial year and recorded as other current liabilities, accruals and deferred income.

( 1 2 ) F I N A N C I A L I N S T R U M E N T S In accordance with the treasury policy, Cosun does not hold derivative instruments for trading purposes, nor does it issue such instru-ments.

Exchange rate riskThere is a limited exposure in the operating profit to fluctuations in foreign exchange rates. Treasury policy is to hedge such risks as fully as possible. The exchange rate risk on expected future cash flows is hedged by means of forward exchange contracts and other derivative instruments. The exchange rate risk on the translation of financing contracts for group companies denominated in foreign currency are hedged by means of exchange rate swaps.

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The following table shows the contract volumes and fair market value of the contracts outstanding at 31 December (excluding the contracts for amounts payable to institutional investors), all of which have been concluded with respected financial institutions:

Contract volume

2006

Fairmarket

value 2006

Contract volume

2005

Fairmarket

value 2005

Forward exchange contracts and exchange rate swaps:US dollar 5.6 - 61.8 -/- 0.1Pound sterling 42.3 -/- 0.4 41.7 0.1Hungarian forint 0.2 - 0.2 -Polish zloty 0.4 - - -Australian dollar 0.8 - - -

TOTA L 49.3 -/-0.4 103.7 -

The forward exchange contracts and exchange rate swaps have a term of less than one year. In 2005, EUR 5.8 million had a term of more than one year.

Credit riskCredit risks differ by country and individual counterparty. They are managed by means of credit limits per country and per counterparty, The credit risk relating to derivatives and other financial instruments is managed by concluding contracts with respected financial insti-tutions and counterparties only.

Interest rate riskTo manage interest rate risks, between 50% and 100% of the interest payable on the long-term financing requirement is hedged by means of financial instruments.

Fair market valueThe estimated fair market value of the individual financial assets and liabilities, given their nature and term, does not differ materially from their book value at balance sheet date.

( 1 3 ) O F F - B A L A N C E S h E E T A S S E T S A N d C O M M I T M E N T S

SecuritiesFinancing agreements include negative pledges with pari passu clauses. A number of group companies have given security to credit insti-tutions and tax authorities in the form of non-possessory pledges on stock, machinery and business equipment, silent pledges on debtors and mortgages on a number of properties.

ClaimsCosun and/or its group companies are involved in a number of legal cases in connection with the group’s ordinary activities. Although the outcome of these claims cannot be predicted with certainty, Cosun does not expect the total obligations arising from them to be of material importance to the consolidated financial position. Provisions have been formed for all third-party claims that might be upheld and that can be reasonably estimated.

GuaranteesCosun has given guarantees to third parties to an amount of approximately EUR 43.8 million (2005: EUR 34.0 million).

Long-term financial commitmentsLong-tem unconditional commitments have been assumed in respect of rentals and operating leases. The related instalments for 2006 amounted to EUR 10.3 million (2005: EUR 10.6 million). The rental and lease instalments payable within one year amount to approxima-tely EUR 3.1 million (2005: EUR 3.7 million). Instalments payable after five years amount to approximately EUR 0.2 million (2005: EUR 0.6 million). Contingent investment liabilities amount to EUR 15.6 million (2005: EUR 27.1 million).

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( 1 4 ) N E T T U R N O V E RNet turnover can be broken down by group as follows:

2006 2005

Basic ingredients 588.9 596,4Industrial alcohol and bioethanol 108.2 103.3Potato products 453.0 371.0Compound ingredients 389.7 357.7

Total 1,539.8 1,428.4

Intercompany supplies -/- 71.1 -/- 89.9

1,468.7 1,338.5

Net turnover by geographical region can be broken down as follows:

2006 2005

The Netherlands 561.0 515.2Rest of the EU 724.5 656.0Rest of Europe 48.8 31.4North and South America 51.2 73.5Rest of the world 83.2 62.4

1,468.7 1,338.5

( 1 5 ) OT h E R O P E R AT I N G I N C O M EOther operating income includes profits on assets and CO2 rights, insurance benefits received, subsidies, income received in respect of services rendered to third parties, rental income and a reversal of an impairment in value in 2005 (EUR 0.8 million). The increase in com-parison with the previous year is due chiefly to the net EU aid for the surrender of fructose quota by Sensus (EUR 34.5 million) and the gain on the sale of Custom Industries’ activities (EUR 13.1 million).

( 1 6 ) E U L E V I E S This item relates to the balance of restructuring levies payable, the release from reserved levies on B sugar and the release from the basic levy. This item also includes export refunds.

( 1 7 ) C O S T O F R Aw M AT E R I A L S A N d C O N S U M A B L E SThis item includes the cost of raw materials and consumables, purchased finished goods and production-related energy costs. Purchases from members amounted to approximately EUR 173 million (2005: EUR 177 million).

( 1 8 ) C O S T O F w O R K S U B C O N T R A C T E d A N d OT h E R E x T E R N A L C h A R G E SThis item includes rental costs, research costs, repair and maintenance costs, indirect energy costs, transport costs, office expenses, selling expenses, insurance costs and IT costs.

Total research & development costs, including staff costs, amounted to EUR 7.5 million (the comparative amount for 2005 is: EUR 7.9 million).

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( 1 9 ) S TA F F C O S T S

2006 2005

Wages and salaries 139.6 141.5Social security contributions 28.2 22.2Pension costs -/- 2.3 20.8

165.5 184.5

For an explanation of the results of pensions plans included in staff costs, see note 9.

( 2 0 ) N U M B E R O F E M P L OY E E S Expressed in full-time equivalents, the average number of employees at Cosun during the 2006 financial year was 4,210 (2005: 4,194). The employees were engaged in the following activities (average number of employees):

2006 2005

Basic ingredients 890 1,000Industrial alcohol and bioethanol 110 120Potato products 1,441 1,280Compound ingredients 1,680 1,702Other 89 92

4,210 4,194

Of whom, employed outside the Netherlands 1,687 1,522

( 21 ) I M PA I R M E N T S I N V A L U E O F I N TA N G I B L E A N d TA N G I B L E F I x E d A S S E T SImpairments in value in 2006 amounted to EUR 3.0 million and related chiefly to a direct write-down of a subsequent payment due on shares, recognised as goodwill at Unifine Sauces & Spices.

In 2005, impairments in value totalled EUR 3.4 million. They related chiefly to the downward revaluation of buildings and machinery not used in the production process.

( 2 2 ) F I N A N C I A L I N C O M E A N d E x P E N S EFinancial income and expense includes interest on loans, interest-bearing amounts receivable and other debts.

( 2 3 ) TA x AT I O N The corporation tax disclosed in the profit and loss account comprises an expense of EUR 26.2 million on a result of EUR 99.4 million. The effective tax rate was 26% (2005: 28%). The difference from the nominal tax rate (29.6% in the Netherlands) is attributable to deductible liquidation losses, non-deductible expenses (including goodwill), the write-down of carry-over losses, prior-year losses and the recalculation of deferred taxes owing to a future reduction in the tax rate.

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( 2 4 ) C A S h F L O w S TAT E M E N T Movements in the cash flow statement can be derived largely from the movements in the relevant balance sheet items. The balance sheet movement and the cash flow statement movement of certain items are reconciled below:

Workingcapital

Provisions Non-current liabilities debt

At year-end 2005 369.2 -/- 126.9 -/- 254.9At year-end 2006 310.5 -/- 108.6 -/- 256.1

Balance sheet movement 58.7 -/- 18.3 1.2

Adjusted for:- Changes in the consolidation and sale of participating interests 2.2 -/- 6.1 -/- 4.1- Changes in corporation tax positions -/- 26.6 5.0 -

C A S h F L O w M O V E M E N T 34.3 -/-19.4 -/-2.9

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Cooperative balance sheet (before profit appropriation; in EUR millions)

At year-end Notes 2006 2005

ASSETS

FixedassetsIntangible fixed assets (25) 48.1 48.4Tangible fixed assets (26) 92.4 93.7Financial fixed assets (27) 206.1 421.5

346.6 563.6

CurrentassetsStocks (28) 181.6 254.1Debtors, prepayments and accrued income (29) 675.3 373.3Cash 89.5 8.9

946.4 636.3

Totalassets 1,293.0 1,199.9

EQUITYANdLIABILITIES

Capitalandreserves (30) 607.1 545.6

Provisions (31) 48.0 57.2

Non-currentliabilities (32) 239.6 239.6

Currentliabilities (33)Credit institutions and liabilities with a financing character 10.4 28.0Other current liabilities, accruals and deferred income 387.9 329.5

398.3 357.5

Totalequityandliabilities 1,293.0 1,199.9

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Cooperative profit and loss account (in EUR millions)

For the financial year 2006 2005

Cooperative result after taxation 39.2 25.2Profit of participating interests after taxation 26.7 -/- 1.2

R E S U LT F O R T h E Y E A R 65.9 24.0

R E S U LT A L L O C AT I O N I N A C C O R d A N C E w I T h A R T I C L E 1O F T h E S U G A R B E E T d E L I V E R Y PAY M E N T R E G U L AT I O N S

Result of participating interests less dividends paid 10.5 -/- 4.3Cooperative result including dividends received from participating interests 55.4 28.3

Notes to the cooperative accounts(in EUR millions)

GeneralInsofar as notes on items in the cooperative balance sheet and profit and loss account are not provided below, reference is made to the notes to the consolidated balance sheet and profit and loss account.

Accounting policiesThe cooperative balance sheet and profit and loss account are prepared using the same accounting policies as applied for the consolidated balance sheet and profit and loss account.

( 2 5 ) I N TA N G I B L E F I x E d A S S E T SMovements in intangible fixed assets were as follows:

GoodwillOther

intangiblefixed assets

Total

Book value at 1 January 2006 48.2 0.2 48.4

Movements:- Investments - 4.6 4.6- Amortisation -/- 4.2 -/- 0.7 -/- 4.9

B O O K V A L U EAT 31 d E C E M B E R 2 0 0 6 44.0 4.1 48.1

The accumulated amortisation and impairments in value of other intangible fixed assets at 31 December 2006 amounted to EUR 2.0 million (2005: EUR 1.2 million). Investments in other intangible fixed assets related to the purchase of 12,000 tonnes of sugar quota, which will be amortised over four years.

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( 2 6 ) TA N G I B L E F I x E d A S S E T S Movements in tangible fixed assets were as follows:

Landand

buildings

Machinery and

equipment

Othertangible

fixed assets

Prepay-mentsand in

production

Not used in production

process

Total

Book value at 1 January 2006 21.7 57.8 3.0 0.4 10.8 93.7

Movements:- Investments 3.1 12.7 1.3 -/- 0.3 - 16.8- Depreciation -/- 2.2 -/- 14.0 -/- 1.5 - - -/- 17.7- Other movements -/- 0.5 0.1 - - - -/- 0.4

BOOKVALUEATdECEMBER2006 22.1 56.6 2.8 0.1 10.8 92.4

Accumulated depreciation and impairments in value at31 December 2006 44.9 124.2 17.2 - - 186.3

( 2 7 ) F I N A N C I A L F I x E d A S S E T S

2006 2005

Participating interests in group companies 186.7 400.7Receivables from group companies 12.6 9.4Deferred tax assets 5.9 11.4Other receivables 0.9 -

206.1 421.5

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Movements in financial fixed assets were as follows:

Participating interestsin group

companies

Receivables from group companies

Deferredtax

assets

Other receivables

Total

At 1 January 2006 400.7 9.4 11.4 - 421.5

Movements:- Share in result of participating

interests 26.7 - - - 26.7 - Capital contribution and new loans 94.7 6.0 - 0.4 101.1- Repayments and releases - -/- 2.8 -/- 5.5 - -/- 8.3- Divestment of interests -/- 317.9 - - - -/- 317.9- Exchange differences -/- 0.3 - - - -/- 0.3- Dividends received -/- 16.2 - - - -/- 16.2- Other movements -/- 1.0 - - 0.5 -/- 0.5

AT 31 dECEMBER 2006 186.7 12.6 5.9 0.9 206.1

Participating interests in group companiesThe group company Wagenberg Breda B.V. became a direct participating interest of the cooperative at the end of 2006 and subsequently acquired from the cooperative the 100% interests in Cosun Holding B.V., Koninklijke Nedalco B.V. and Van Wagenberg Holding B.V. at their net asset value of EUR 317.9 million. For this transaction, the cooperative contributed EUR 67.9 million in capital to Wagenberg Breda B.V and granted it a loan of EUR 250.0 million. The remainder of the capital contribution relates to a capital increase in the Aviko group.

Receivables from group companiesReceivables from group companies include a subordinated EUR 5.0 million loan granted to Koninklijke Nedalco B.V. This loan is subordinate to amounts payable by this group company to credit institutions.

( 2 8 ) S TO C K S

2006 2005

Raw materials and consumables 4.7 5.3Finished goods and trading stocks 176.9 248.8

181.6 254.1

The provision for obsolete stock amounts to EUR 3.2 million (2005: 4.3 million).

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( 2 9 ) d E BTO R S , P R E PAY M E N T S A N d A C C R U E d I N C O M E

2006 2005

Trade debtors 31.8 29.7Receivables from group companies 569.8 311.6Corporation tax recoverable - 5.9Other tax assets 9.2 9.3Other debtors, prepayments and accrued income 64.5 16.8

675.3 373.3

The item other debtors includes fructose restructuring aid receivable to an amount of EUR 44.3 million.

( 3 0 ) C A P I TA L A N d R E S E R V E S

2006 2005

Paid-up share capital and premium 15.4 15.5

Revaluation reserve - 3.7Participating interests reserve 10.1 -Exchange differences reserve -/- 7.5 -/- 11.2

Total legal reserves 2.6 -/- 7.5

Other reserves 523.2 513.6Undistributed result 65.9 24.0

Other reserves and undistributed result 589.1 537.6

607.1 545.6

Paid-up share capital and premium

Share capital

Sharepremium

reserve

Non-paid capital and

premiumTotal 2006

Total 2005

At 1 January 5.3 16.1 -/- 5.9 15.5 15.5

Movements:- Shares issued 0.3 0.8 -/- 1.1 - -/- 0.1- Shares repurchased -/- 0.3 -/- 0.9 0.2 -/- 1.0 -/- 1.0- Payable on shares - - 0.9 0.9 1.1

AT 31 d E C E M B E R 5.3 16.0 -/-5.9 15.4 15.5

The total number of shares issued was 117,789 (2005: 118,247), the nominal value is EUR 45.40 per share.

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Legal reserves, other reserves and undistributed earnings

Revaluation reserve

Participating interests

reserve

Exchange differences

reserve

Otherreserves

Undistributedresult

Total2006

Total2005

At 1 January 3.7 - -/- 11.2 513.6 24.0 530.1 501.7

Movements:- Profit appropriation - - - 24.0 -/- 24.0 - -- Result for the year - - - - 65.9 65.9 24.0- Distribution to members - - - -/- 2.8 - -/- 2.8 -/- 2.5- Exchange differences - - -/- 0.4 - - -/- 0.4 3.2- Reclassification -/- 3.7 11.2 - -/- 7.5 - - -- Negative goodwill - - - - - - 5.4- Release to profit and

loss account - -/- 1.1 - - - -/- 1.1 -/- 1.7- Transfer - - 4.1 -/- 4.1 - - -

AT 31 d E C E M B E R - 10.1 -/-7.5 523.2 65.9 591.7 530.1

Under Article 46 of the Articles of Association, payments are made to members and contracting parties. With effect from January 2000, these payments are made in accordance with the Sugar Beet Delivery Payment Regulations; previously the Cessation of Business Regulations had been applicable. The amount of the payment is determined by the average number of tonnes of sugar beet delivered, the cooperative’s average net result, including dividends received from participating interests, per tonne of sugar beet delivered in the three previous financial years and a factor per campaign.During a transitional period, payments will also be made in accordance with the Cessation of Business Regulations and will be determined by the number of shares held, the number of years that the member has held the shares and the cooperative’s average net result, inclu-ding dividends received from participating interests, per share in the three previous financial years. Payment may be claimed as from the moment that business activities cease or after a delivery period of at least 15 consecutive campaigns. If all members had been entitled to a payment at 31 December 2006, the aggregate net payment would have amounted to EUR 38.4 million (2005: EUR 28.7 million). Distributions are made from other reserves.

Participating interests reserveThe participating interests reserve comprises the reserves held by participating interests that are subject to legal restrictions or restrictions in the articles of association. They include the negative goodwill (badwill) recognised by Aviko, which is released to the profit and loss account on the basis of the weighted average remaining life of the depreciable assets acquired.

Undistributed resultIn accordance with the Board’s resolution of 15 March 2006, the result after taxation for 2005 has been added to other reserves.

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( 31 ) P R O V I S I O N S

2006 2005

Deferred taxation 11.8 15.9Restructuring and reorganisation 20.4 16.0Other 13.6 13.4

45.8 45.3Pensions and other deferred employee benefits 2.2 11.9

48.0 57.2

Approximately EUR 32.2 million (2005: EUR 52.2 million) of the provisions are long-term in nature.

Movements in provision, other than the provision for pensions and other deferred employee benefits were as follows:

Deferredtaxation

Restructuringand

reorganisation

Other Total

At 1 January 2006 15.9 16.0 13.4 45.3

Movements:- Additions charged to the profit and loss

account - 10.5 1.0 11.5- Withdrawals -/- 2.6 -/- 4.3 -/- 0.8 -/- 7.7- Release to the profit and loss account -/- 1.5 -/- 1.8 - -/- 3.3

AT 31 d E C E M B E R 2 0 0 6 11.8 20.4 13.6 45.8

Pensions and other deferred employee benefits

2006 2005

Present value of funded obligations 348.0 371.7Present value of unfunded obligations 1.8 2.0Present value of other deferred employee benefits 1.9 2.2Fair value of plan assets -/- 389.9 -/- 360.3

Present value of net obligations -/- 38.2 15.6

Unrecognised actuarial gains and losses 44.6 0.9Unrecognised past service costs for conditional pension benefits -/- 4.2 -/- 4.6

TOTA L 2.2 11.9

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Movements in the net commitments in respect of pension rights granted and other deferred employee benefits disclosed in the balance sheet were as follows:

2006 2005

At 1 January 11.9 21.5

Movements:- Contributions paid -/- 11.5 -/- 9.3- Charged to profit and loss account (see below) 1.8 -/- 0.3

AT 31 d E C E M B E R 2.2 11.9

The expense recognised in the profit and loss account in respect of defined benefit schemes can be broken down as follows:

2006 2005

Current service cost 5.8 7.4Employee contributions -/- 0.1 -/- 0.1Interest on the obligations 14.6 15.7Expected return on plan assets -/- 18.8 -/- 17.6Curtailment or settlement result - -/- 7.7Actuarial results -/- 0.1 0.3Past service costs 0.4 1.7

TOTA L 1.8 -/-0.3

The actual return on plan assets was EUR 34.2 million (2005: 29.6 million). The actuarial assumptions are provided in the notes to the consolidated accounts.

( 3 2 ) N O N - C U R R E N T L I A B I L I T I E S

2006 Effectiveinterest

rate2005 Effective

interestrate

Payable to institutional investors 239.6 4.9 % 239.6 4.9 %

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( 3 3 ) C U R R E N T L I A B I L I T I E S

2006 2005

Payable to credit institutions 5.8 7.5Liabilities with a financing character 4.6 20.5

Total credit institutions and liabilities with a financing character 10.4 28.0

Payable to group companies 201.2 176.1Payable to members 83.4 57.4Payable to suppliers and trade creditors 11.3 24.5Corporation tax payable 11.1 -Other taxes and social security contributions payable 1.5 -Other current liabilities, accruals and deferred income 79.4 71.5

Total current liabilities, accruals and deferred income 387.9 329.5

( 3 4 ) O F F - B A L A N C E S h E E T C O M M I T M E N T S

Joint and several liability and guaranteesThe cooperative has given guarantees to third parties to an amount of EUR 20,0 million (2005: EUR 12,3 million).

( 3 5 ) OT h E R I N F O R M AT I O N

The remuneration, including pension costs as referred to in article 383 (1), Book 2, of the Dutch Civil Code, of current and former members of the Board amounted to EUR 0.4 million (2005: EUR 0.6 million) and that of current and former members of the Supervisory Board to EUR 0.1 million (2005: EUR 0.1 million). The remuneration was charged to the profit and loss account.

Board Supervisory Board

J.E.M. van Campen W. van der Zee G.M. van Tilburg J.F. BotmaI.L.G. van Melle C.E.M. de Waal J.M. Klompe N.H. van HalderD. H. de Lugt C. van HiltenJ.M.M. Megens F. WiersemaMs. G. PrinsJ.A. SmidT. van der Torren

Breda, 15 March 2007

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Other information A U D I TO R ’ S R E P O R T

To: the Supervisory Board of Koninklijke Coöperatie Cosun U.A.

Report on the financial statementsWe have audited the financial statements 2006 of Koninklijke Coöperatie Cosun U.A. (Breda, the Netherlands) on page 27 to 56 of this annual report which comprise the consolidated and cooperative balance sheet as at 31 December 2006, the consolidated and cooperative profit and loss account for the year then ended and the notes.

Management’s responsibility Management is responsible for the preparation and fair presentation of the financial statements and for the preparation of the annual report, both in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstan-ces, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evalu-ating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements give a true and fair view of the financial position of Koninklijke Coöperatie Cosun U.A. as at 31 December 2006, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

Report on other legal and regulatory requirementsPursuant to the legal requirement under 2:393 sub 5 part e of the Netherlands Civil Code, we report, to the extent of our competence, that the annual report is consistent with the financial statements as required by 2:391 sub 4 of the Netherlands Civil Code.

Eindhoven, 15 March 2007

KPMG ACCOUNTANTS N.V.E.H.W. Weusten RA

P R O V I S I O N S O F T H E A R T I C L E S O F A S S O C I AT I O N O N P R O F I T A P P R O P R I AT I O N The appropriation of the profit for the year is laid down in the Articles of Association (Article 42, paragraphs 1 and 2) as follows: the Board shall determine what proportion of the cooperative’s profit for the year shall be added to reserves. Unless the Members’ Council resolves otherwise on the Boards’ recommendation, the amount remaining after the above addition shall be distributed among those members who were A members or B members at the end of the financial year in question, or who had ceased to be A members or B members during or at the end of that financial year; with regard to B members, the distribution shall be made with due regard for the Membership Agreement and at the direction of the relevant C members in accordance with the quantity of produce supplied to the cooperative in that financial year and in accordance with the method of payment stipulated in the Sugar Beet Regulations.

P R O P O S E D P R O F I T A P P R O P R I AT I O N The result after taxation for 2005 was added to other reserves in accordance with the Board’s resolution of 15 March 2006.

The result after taxation for the 2006 financial year is included in capital and reserves under undistributed results. The Board resolved to add the result after taxation for the 2006 financial year to other reserves.

P O S T- B A L A N C E S H E E T E V E N T S A bid was made for the sugar division of CSM in mid-2006. The Dutch competition authority (NMa) had not approved the acquisition when these annual accounts were prepared. TSO, the Slovenian sugar factory in which Cosun holds a majority interest, submitted a restructuring plan to the Slovenian government in 2007, with TSO opting for the EU aid receivable for the surrender of sugar quota.A

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Royal CosunCosunpark 1P.O. Box 34114800 MG BredaThe NetherlandsTelephone +31 76 530 33 22Fax +31 76 530 33 03Internet www.cosun.comE-mail infocosun@cosun.com

Suiker UnieP.O. Box 100 4750 AC Oud-GastelThe NetherlandsTelephone +31 165 52 52 52 Fax +31 165 52 52 55 Internet www.suikerunie.nlE-mail suiker.info@suikerunie.com

Cosun Food Technology CentreP.O. Box 1308 4700 BH RoosendaalThe NetherlandsTelephone +31 165 58 28 10 Fax +31 165 55 13 52 Internet www.cosun.com

SVZP.O. Box 27 4870 AA Etten-LeurThe NetherlandsTelephone +31 76 504 94 94 Fax +31 76 504 94 00 Internet www.svz.comE-mail info@svz-nl.com

Unifine Sauces & SpicesP.O. Box 56523297 ZG PuttershoekThe NetherlandsTelephone +31 78 676 23 44 Fax +31 78 676 52 53 Internet www.unifine.comE-mail info@unifine.com

SensusP.O. Box 13084700 BH RoosendaalThe NetherlandsTelephone +31 165 58 25 00Fax +31 165 54 60 83Internet www.sensus.nlE-mail info.sensus@sensus.nl

Royal NedalcoP.O. Box 64600 AA Bergen op ZoomThe NetherlandsTelephone +31 164 21 34 00Fax +31 164 21 34 01Internet www.nedalco. comE-mail info@nedalco. com

AvikoP.O. Box 87220 AA SteenderenThe NetherlandsTelephone +31 575 45 82 00Fax +31 575 45 83 80Internet www.aviko. comE-mail info@aviko. com

Unifine Food & Bake IngredientsP.O. Box 93944801 LJ BredaThe NetherlandsTelephone +31 76 572 41 40Fax +31 76 572 41 50Internet www.unifine-fbi. comE-mail information@unifine.com

Addresses

Colophon

Advice, text & coordination Jonkergouw & van den Akker B.V., Amsterdam Graphic design Louise Stavast, Hilversum Printing NPN drukkers, Breda

Annual Report2006