fyffes plc annual report and accounts...

Fyffes plc Annual Report and Accounts 2004

Fyffes plc29 North Anne Street Tel: 353 1 887 2700Dublin 7 Fax: 353 1 887 2751Ireland Web: www.fyffes.com

Fyffes is one of the largest fresh produce distributors in Europe and among the five largest globally. The Groupoperates from approximately 75 locations in more than ten countries, mainly in Europe. The company is listedon the Irish and London Stock Exchanges.

The Group markets the widest selection of the finest fresh produce under some of the best known brandnames in the industry including Fyffes, Turbana, Coplaca, Cape and Outspan.

Fyffes and its joint venture operations employ almost 4,300 people. Total turnover in 2004 was over €2.1 billion.Shareholders’ funds exceed €350 million, including net cash balances of over €160 million.

Management’s continuing focus is to maximise the return on investment for the Group’s shareholders.

Our goal is to achieve this by:

● Consistently meeting and exceeding the requirements of our customers

● Sourcing the finest quality produce from the best suppliers

● Employing the most innovative and environmentally sound production practices

● Maintaining state-of-the-art facilities and logistical services

● Pursuing every possible efficiency and synergy in the supply chain

● Recruiting and developing the highest calibre personnel in the industry

● Expanding our business through strategic acquisitions and alliances

Our commitment to these principles ensures that the Group is uniquely placed to serve the requirements ofour customers with a complete basket of the finest quality fresh produce all year round, together with thenecessary support services.

It is our long-term strategic vision to develop Fyffes into the most successful operator in the global freshproduce industry.

Group Profile and Strategic Vision

design and production: www.thedesignconsultancy.ie

Fyffes plc Annual Report 2004 | Page 1

Contents Page

Shareholder Information 2

Chairman’s Statement 3

Financial Highlights and Five Year Summary 4

Growth Record 5

Directors and Secretary 6

Corporate Social Responsibility 9

Procurement and Distribution 11

Financial and Management Strengths 13

Review of Operations for 2004 14

Financial Review for 2004 17

Statutory Financial Statements 25

Notice of Annual General Meeting 86

Index to Annual Report 89


Shareholder Information

Share price (euro cent) High Low 31 December

2004 208 151 193

2003 167 116 165

Market CapitalisationThe market capitalisation of Fyffes plc at 31 December 2004 was €672 million. The share price at close ofbusiness on 2 March 2005 was €2.25, giving a market capitalisation at that date of €783 million.

Web Sitewww.fyffes.com contains a wide range of detailed information on the company’s activities and products,together with all the key financial data on the Group. It is updated on a continuing basis for all companyannouncements and other relevant developments, including share price movements.

Investor relations Registrar Investors requiring further information Administrative queries about holdings of Fyffes plc

on the Group are invited to contact: shares can be directed to the company registrar:

Seamus Keenan Computershare Services (Ireland) Limited Group Investor Relations Manager Heron House

Fyffes plc Corrig Road 29 North Anne Street Sandyford Industrial Estate

Dublin 7, Ireland. Dublin 18, Ireland. Telephone: +353 1 887 2700 Telephone: +353 1 216 3100

Fax: +353 1 887 2751 Fax: +353 1 216 3151 email: [email protected] email: [email protected]

Annual General MeetingThe Annual General Meeting of the company will take place at the Burlington Hotel, Ballsbridge, Dublin 4,Ireland on Tuesday 24 May 2005 at 10.30 a.m.. Notice of the meeting is set out on pages 86 to 88 and apersonalised proxy form was included in the mailing to shareholders of this annual report.

Amalgamation of AccountsShareholders receiving multiple copies of company mailings as a result of a number of accounts beingmaintained in their name should write to the company’s registrar, at the above address, to request that theiraccounts be amalgamated.

Payment of DividendsShareholders may elect to have future dividends paid directly into a nominated bank account by completingthe mandate form which accompanies each dividend payment or by writing to the company’s registrar, at theabove address, requesting a mandate form. Dividends are ordinarily paid in euro; however, for theconvenience of shareholders with addresses in the United Kingdom, such dividends are paid in Sterling unlessotherwise requested.


The Group was pleased to report record results for 2004, with profit beforetax, excluding goodwill amortisation, exceeding €100 million for the firsttime, helped by profits of €15 million from property activities. Strongperformances in Continental Europe, together with first time contributionsfrom acquisitions, have generated increases of more than 30% in adjustedprofit before tax and adjusted earnings per share.

In May 2004, the Group acquired Everfresh, which has its headquarters inHelsingborg in Sweden. We are pleased with this acquisition whichsignificantly increases the Group’s activities in Scandinavia. This market,including our existing operations in the region, now accounts forapproximately 20% of the Group’s total turnover, on a full year basis.

Successful acquisitions have always been a key driver of the development of Fyffes, contributing significantlyto the 8.3% annual compound growth in adjusted earnings per share over the past ten years. In addition tothe Everfresh deal, management invested considerable time and effort pursuing other acquisitionopportunities in 2004. We believe that investing the Group’s substantial resources in acquiring furtherattractive businesses is the best way to enhance shareholder value and we remain committed to this goal.

During 2004, the Group’s total capital outlay amounted to €84.9 million comprising acquisition expenditure of€45.2 million, including €14.2 million of debt acquired, and capital expenditure of €39.7 million, of which €30million related to property assets.

The Board is proposing an increase of 20.1% in the final dividend for 2004 to €5.20 cent per share. This willmake the total dividend for the year €6.73 cent, an increase of 17.7%, representing a yield of 3.8% based onthe average share price for last year.

On your behalf, the Group has made a donation of €0.5 million to a number of charities working in South EastAsia in the aftermath of the devastating tragedy there at the end of 2004 as a result of the tsunami.

The trial of the Group’s legal action against DCC plc and others is ongoing and is expected to continue for anumber of months.

The regulatory framework governing banana imports into the EU is scheduled to be changed by the end of2005. Further details on recent developments in relation to this matter are set out in the Review of Operationson page 16. A determination of the final outcome is unlikely to take place until close to the end of the year.It is Fyffes’ view that a continuation of the current system of import regulations is in the best interests of all thestakeholders in the industry.

Trading has been satisfactory in the first two months of 2005, particularly in Continental Europe. The Groupcontinues to pursue the price increases necessary to compensate for the significant increases that haveoccurred in shipping, transport and fuel costs.

Fyffes is fortunate to have the best people in the industry and we thank them for their continuing commitmentto the success of the business.

Carl McCannChairman2 March 2005

Chairman’s Statement

Carl McCann, Chairman


Financial Highlights2004 2003

€ € Increase

Turnover incl. share of joint ventures/associates 2,146m 1,925m 11.5%

Profit before tax* 102.8m 75.7m 35.9%

Profit before tax** 94.7m 71.6m 32.2%

Adjusted fully diluted earnings per share** 19.77 cent 14.95 cent 32.2%

Full year dividend per share 6.73 cent 5.72 cent 17.7%

Shareholders’ funds 353.4m 305.9m 15.5%

* Excludes goodwill amortisation** Excludes exceptional items and goodwill amortisation

Five Year Summary2004 2003 2002 2001 2000*€’000 €’000 €’000 €’000 €’000

Turnover incl. share of joint ventures/associates 2,145,735 1,924,624 1,836,547 1,995,283 2,251,732

Adjusted profit before taxation** 94,727 71,627 68,122 63,554 31,319

Profit on ordinary activities before taxation 96,289 71,798 63,074 57,653 7,563

Profit/(loss) ordinary activities after taxation 81,956 62,624 50,404 43,610 (1,315)

Adjusted fully diluted earnings per share (cent)** 19.77 14.95 14.17 12.56 5.15

Dividend per share (cent) 6.73 5.72 5.203 4.73 4.30

Shareholders' funds 353,414 305,889 293,375 279,086 253,478

* fourteen month period to 31 December 2000** excludes exceptional items, e-commerce costs and goodwill amortisation


Compound Growth Rates

3 Years 5 Years 10 Years

Turnover incl. share of joint ventures/associates 2.5% 2.6% 6.5%

Adjusted profit before taxation* 14.2% 3.0% 7.5%

Adjusted fully diluted earnings per share* 16.3% 3.4% 8.3%

Dividend per share 12.5% 9.4% 13.3%

* excludes exceptional items, e-commerce costs and goodwill amortisation

Growth Record

* excludes exceptional items, e-commerce costs and goodwill amortisation

Total shareholder returnAn investment of €1,000 in 1981, when the company was first listed in Dublin, would be worth €44,000 today.


Directors and Secretary

C.P. McCann Chairman, BBS, MA, FCA

Carl McCann was electedChairman in 2003. Hejoined the Group fromKPMG in 1980. He wasFinance Director from1983 to 1998 and hadbeen Vice Chairman since1988. He is a member ofthe nominationcommittee. He is an IrishGovernment nominee toInterTradeIreland, theTrade and DevelopmentBody established by theNorth-South MinisterialCouncil of Ireland.

J.F. GernonGroup Finance Director,FCCA

Frank Gernon joined theGroup in 1973. He hasheld various senioraccounting and financialpositions in the Group,including CompanySecretary and ChiefFinancial Officer. He wasappointed Group FinanceDirector in 1998. He isChairman of the riskcommittee.

J.D. McCourtNon-Executive, MA, MBA

Declan McCourt wasappointed to the Board in2003 and is a member ofthe compensation andnomination committees.He is chief executive ofautomobile distributor,the OHM Group. Hequalified as a barrister. Heis a member of the Courtof Bank of Ireland, adirector of DublinDocklands DevelopmentAuthority, Chairman of theMater HospitalFoundation and a directorof a number of othercompanies.

W.M. Walsh Non-Executive, MSc

Willie Walsh wasappointed to the Boardon 1 January 2004. Hewas recently appointedChief Executive designateof British Airways plc. Hewas previously ChiefExecutive of Aer LingusGroup plc, the Irishnational airline, havingjoined that company in1979, subsequentlyholding a number ofsenior managementpositions including ChiefOperations Officer.

D.V. McCann Chief Executive, BCL

David McCann joined theGroup in 1986, havingpreviously practised as apartner in a leadingDublin law firm. Hebecame Group ManagingDirector in 1989 withresponsibility for theGroup’s operations. Hewas appointed ChiefExecutive in 1995. He is amember of thenomination committee.

R.B. Hynes Non-Executive, BCL, AITI

Rose Hynes wasappointed to the Board in2003 and is a member ofthe audit and nominationcommittees. She becameChairman of the auditcommittee on 1 January2005. She was a non-executive director of AerLingus Group plc from1997 to 2002 andpreviously held a numberof senior executivepositions with GPA Groupplc and Debis AirFinance.She is a director ofShannon Airport Authorityplc and Bank of IrelandMortgage Bank plc.


N.V. McCannExecutive

Neil McCann retired asChairman in 2003. Hejoined the business in the1950’s and led it to stockmarket flotation in 1981.He oversaw thedevelopment of theGroup to its currentposition as one of thelargest fresh producecompanies in Europe andamong the leadingoperators in the globalfresh produce industry.

D.J. Bergin Non-Executive,BA, LLB

Denis Bergin wasappointed to the Board in1993. He is a member ofthe audit, compensationand risk committees. Hewas Chairman of the auditcommittee until 31December 2004. He is aformer partner in theleading Irish law firm,Arthur Cox. He is adirector of several othercompanies.

G.B. Scanlan Non-Executive, FIB

Gerry Scanlan wasappointed to the Board in1995. He is a member ofthe audit, nomination andrisk committees, Chairmanof the compensationcommittee and thenominated seniorindependent non-executive director. He is aformer Group ChiefExecutive of Allied IrishBanks plc and a formerChairman of the IrishStock Exchange.

J.P. Tolan Corporate DevelopmentDirector, B Comm, FCA

Jimmy Tolan joined Fyffesin 1990 from KPMG. Hehas managed the Group’sacquisitions team since1993. He was appointed tothe Board as CorporateDevelopment Director in1999.

Dr. P. F. deV. ClüverNon-Executive, MBChB, ChM, MD, PhD

Dr. Paul Clüver wasappointed to the Board in1999. He is Chairman ofCapespan Group HoldingsLimited in South Africa. Heis also Chairman ofUnifruco, Vinfruco andKromco in South Africa. Heis a trustee of theWorldwide Fund for NatureSA.

P.T. HalpennyCompany Secretary,BBS, FCA

Philip Halpenny joined theGroup in 1991 fromPricewaterhouseCoopers asSpecial Projects Manager.He became ManagingDirector Corporate Affairsin 1996 and was appointedCompany Secretary in 1998.


“Fyffes’ reputation is second to none”


Corporate Social Responsibility

Fyffes is aware of the social and environmental issues associated with the products that it sources and sells,particularly as a large proportion of its fresh produce supplies originate in developing countries. The Groupaddresses this aspect of its operations in a number of ways:

Codes of Best PracticeThe Group has established Codes of Best Practice with which it requires its direct banana and pineapplesuppliers to comply. These are designed to reduce the impact of agricultural production on the environmentand to ensure safe working conditions and fair treatment for workers, in compliance with internationallyaccepted labour standards. Compliance with the Codes is generally monitored on a six-monthly basis and ourinternal review procedures are subject to regular independent evaluation.

Ethical Trading InitiativeFyffes has been a member of the UK government-sponsored Ethical Trading Initiative (ETI) for four years now.The ETI is an alliance of companies, non-governmental organisations and labour representative bodies. Itspurpose is to promote and improve the conditions of workers worldwide who produce products for sale in theUK retail sector. All of the Group’s tropical management team and many of our banana and pineapplesuppliers have received formal training in this regard.

EUREP GAP AccreditationFyffes is a founder member of the European Retailers Environmental Protocol (EUREP) established by majorfood retailers and their suppliers across Europe to address consumer concerns about food safety,environmental protection and worker welfare and to promote safe and sustainable agriculture. EUREP hasadopted an extensive range of guidelines on these matters, resulting in the EUREP Good Agricultural Practice(EUREP GAP). This standard establishes the minimum requirements to be met by growers of fruit andvegetables that supply European retailers. Fyffes first achieved EUREP GAP accreditation in 2003, in respectof the majority of the banana and pineapple farms from which it takes direct supplies, and this is renewedannually.

Through these and other social responsibility measures, Fyffes aims to provide the finest quality produce,grown under the safest working conditions, following the fairest labour practices and with the minimumenvironmental impact. The Group is pro-active in these matters and actively participates in industry forums onsocial, ethical, health and safety and environmental issues. In addition, Fyffes is satisfied that it has appropriaterisk management procedures in place to ensure that it complies with the highest standards in relation to foodsafety regulations.


“Fyffes believes that there is no substitute for

expertise drawn from local knowledge”


Procurement and Distribution

BananasFyffes procures its bananas from a wide variety of sources, including Central and Latin American suppliers,principally in Colombia, Costa Rica and Ecuador, and EU and African, Caribbean and Pacific (ACP) producersincluding the Canary Islands, Belize and the Windward Islands. The Group typically operates through longterm supply contracts with the best local producers.

PineapplesThe development of the Group’s supersweet pineapple business is progressing satisfactorily. Fyffes is involvedin growing these pineapples on a number of large farms in Central America on a joint venture basis with localproducers. Production on these farms is increasing and we expect them to be at full production levels by theend of 2006.

General ProduceIn most cases, for other produce, the Group acts as marketer and distributor for the major internationalproducer organisations. This enables Fyffes to provide its customers with the finest brands in the industry, fromboth the Northern and Southern Hemispheres on a year round basis, including Cape, Outspan, Carmel, Enza,Jaffa, Maroc and Zespri.

Distribution NetworkOne of Fyffes’ key strengths is its first-class distribution network that ensures it can deliver produce tocustomers on a timely basis and in the optimum condition. The Group operates from approximately 75separate locations, comprising banana ripening centres, central distribution warehouses and traditionalwholesale markets. These state-of-the-art facilities are strategically located near large centres of populationand road networks to maximise the opportunities for market penetration.


“The Group has a management team with a range

of skills that surpasses any in the sector”


Financial and Management Strengths

Balance SheetFyffes has one of the strongest balance sheets in the international fresh produce sector. Shareholders’ fundsat 31 December 2004 amounted to €353.4 million, including net cash balances of €163.6 million. This leavesthe Group ideally placed to continue to pursue consolidation opportunities in the sector and is tangibleevidence of the quality of the management of the business over many years.

Cash GenerationOne of the very attractive features of our business is that profits turn into cash very quickly. During the pastthree years, the Group has generated free cash flow, after payment of dividends and tax, of almost €190million. Dividend payments to Group shareholders and minority interests amounted to €66 million during thatperiod. Of the remaining cash flow over that three year period, €61 million has been invested in capitalexpenditure and €112 million has been spent on acquisitions and investments in joint ventures, including netdebt acquired. Management remains focused on finding attractive acquisition opportunities in which to investthe Group’s cash resources.

Management and ControlOver many years, the Group has built up a management team with a range of skills, expertise and experiencethat surpasses any in the sector. Today, Fyffes is served by a dedicated and talented workforce of almost 4,300employees, including 1,300 in its joint venture operations. Management has developed comprehensive andexacting financial, operating and reporting controls that are applied consistently across the Group in order tomanage the business efficiently and to protect the interests of all stakeholders. The Board of Fyffes iscommitted to the highest standards of corporate governance, including the revised 2003 Combined Code onCorporate Governance, a report on which is set out on pages 29 to 32.


Review of Operations for 2004

Fyffes tropical produce divisionThis division comprises the Group’s procurement, farming and shipping activities in respect of bananas andpineapples. These products have similar, all year round, production and harvesting characteristics. They aregrown in broadly the same geographic regions, with Fyffes sourcing mainly in Central and South America andthe Caribbean. Consequently, the shipping logistics are similar and these activities can be combinedefficiently.

The Group’s tropical produce operations delivered a strong result in 2004, accounting for €14.6 million of the€21.5 million increase in total operating profit before exceptional items and goodwill amortisation. Thisincrease was achieved mainly in Continental Europe. Tropical produce operations accounted for 48.3% of totalprofit before tax, including property profits but excluding other exceptional items and goodwill amortisation,of €110 million in 2004.

Banana activitiesThe Group’s banana businesses performed well in 2004 with profits significantly ahead of the previous year,particularly in Continental Europe. The benefit of improved average exchange rates, due to the strength ofEuropean currencies against the US Dollar, exceeded the impact of higher operating costs, particularly inrelation to shipping and fuel. Market conditions in local currencies were less favourable in the first six monthsof the year but improved in the second half. Volumes were modestly ahead, year on year.

The Group’s Geest joint venture achieved a satisfactory result in 2004, helped by a €1.6 million gain arising fromchanges in the financing arrangements relating to its Island Class ships.

There had been some concern at the beginning of the year in relation to EU enlargement on 1 May 2004.Ultimately, the increase in the import quota to accommodate the ten accession states did not have anysignificant impact on the overall trading environment.

Pineapple activitiesFyffes continues to develop its super-sweet pineapple business under the "Fyffes Gold" label. The Group’sshare of the net operating losses in its pineapple production joint ventures, which continue through theirdevelopment phase, amounted to €2.1 million in 2004, compared to €2 million in the previous year.

Pineapple importing activities earned profits amounting to €2 million, on sales of 4.6 million boxes, resultingin a close to breakeven overall result in the year. The Group’s pineapple joint venture farms are planned toreach their full production levels towards the end of 2006.

Fyffes general produce divisionThe Group’s general produce division delivered a satisfactory result for the year with a €7 million increase inoperating profits. Volumes, before the impact of acquisitions, were modestly ahead of the previous year andmarket conditions were generally stable. There were good performances in a number of key markets andproducts. Apple and pear volumes were higher and the markets for citrus and stonefruit were strong. Thedivision also benefited from the Everfresh acquisition and a number of small transactions, mainly in the UK. TheGroup’s Capespan joint venture achieved an improved result as it benefited from the restructuring programmeundertaken in recent years and a broadening of its product range.

David McCann, Chief Executive


Everfresh in Sweden, in the eight months since its acquisition in May 2004, accounted for approximately 60%of the increase in operating profits, before exceptional items and goodwill amortisation, in this division. TheGroup paid €29.4 million, including costs, for 60% of Everfresh with a binding agreement to acquire theremaining 40% in 2007, the terms of which give Fyffes a beneficial entitlement to all of the earnings of Everfreshfrom the date of the initial acquisition. Consequently, the Group is accounting for 100% of the Everfreshactivities from the date of acquisition and has accrued an estimate of the deferred consideration which may bepayable in 2007. This transaction significantly increases Fyffes’ activities in Scandinavia and, combined with ourexisting operations in that region, it now accounts for approximately 20% of the Group’s full year turnover.

Total operating profitsTotal operating profit before exceptional items and goodwill amortisation for the year ended 31 December2004 was €89.2 million compared to €67.7 million in 2003, an increase of 31.8%. Operating margins increasedto 4.2%, from 3.5% in the previous year. The Group’s Continental European operations accounted for themajority of this improvement.

The following table analyses the geographic mix of our turnover and operating profits in 2004 and 2003. Thisshows that the Group has been earning an increasing portion of its profits in Continental Europe, growing to76% in 2004, consistent with the focus of the Group’s acquisition activities in recent years.

Ireland/UK Europe Total €‘m €‘m €‘m

2004 2003 2004 2003 2004 2003

Turnover 896.5 879.5 1,249.2 1,045.1 2,145.7 1,924.6

Operating profit* 21.5 18.2 67.7 49.5 89.2 67.7

* Operating profit is stated before goodwill amortisation and exceptional items

Property activitiesDuring the year, Fyffes realised profits before tax of €14.6 million on two significant property transactions, €12.7million from the disposal of the Group’s 50% interest in a joint venture which owned development lands inDundalk and €1.9 million from the disposal of a property in Kenmare, both in Ireland. Fyffes has earned pre-tax profits in excess of €30 million and realised cash of approximately €50 million in aggregate over the pastfour years from its property activities. The Group anticipates that it will continue to generate similar levels ofprofits and cash from these activities over the medium term.

The Group made further property investments in 2004 involving expenditure of close to €30 million. Theseincluded the acquisition of additional land and premises in Dublin and Dundalk, Ireland, and in Edinburgh,Scotland. In addition, the Group has committed €3.6 million to a joint venture with Lagan DevelopmentsLimited to acquire a property for retail development in Navan, Ireland, comprising a cash investment of €1.5million and a guarantee for €2.1 million in relation to bank borrowings in the joint venture.


EU banana import regulationsThe regulatory framework governing banana imports into the EU is scheduled to be changed by the end of2005. It is planned for the current system of tariff preferences and quota restrictions on imports to be replacedby a regime based solely on tariff preferences.

In line with the timetable laid down for the process, the EU Commission recently notified the World TradeOrganisation (WTO) of its intention to increase the duty on third country banana imports to €230 per tonnefrom 1 January 2006. At the same time, it reiterated its intention to maintain its protection for EU and African,Caribbean and Pacific (ACP) banana producers.

The proposed new tariff has been widely criticised by the majority of stakeholders in the global bananaindustry. Latin-American producers have rejected it as being unacceptably high, while EU and ACP producerssay that it is insufficient to maintain their place in the EU market.

Under arrangements negotiated previously, the Latin-American banana producing countries can call for theEU’s tariff proposal to be subjected to an arbitration process. While this procedure is likely to be invoked, themain Latin-American supplier countries have also stated their willingness to engage in fresh negotiations withthe Commission on the future regulation of the EU banana market, with a view to agreeing a sustainable longterm solution.

It is likely that such negotiations and the arbitration process will proceed in parallel throughout most of 2005.A determination of the final outcome is unlikely to take place until close to the end of the year. It is Fyffes’ viewthat a continuation of the current system of import regulations is in the best interests of all the stakeholders inthe industry.

Finally, the excellent performance of the Group in 2004 is, in no small way, due to the skill and dedication ofour staff. On your behalf, I would like to thank them for their constant hard work and commitment.

David McCannChief Executive2 March 2005

Review of Operations for 2004 continued


Financial Review for 2004

Summary profit and loss account

2004 2003 Change €’m €’m %

Turnover 2,145.7 1,924.6 +11.5

Total operating profit 89.2 67.7 +31.8Net interest income 5.5 4.0Adjusted profit before tax 94.7 71.6 +32.2Profits from property disposals 15.2 7.6Total profits including property activities 110.0 79.3 +38.7Other exceptional items (7.1) (3.6)Profit before goodwill amortisation 102.8 75.7 +35.9Goodwill amortisation (6.5) (3.8)Profit before tax 96.3 71.8 +34.1Tax charge (14.3) (9.2)Minority interest charge (11.6) (11.3)Profit attributable to ordinary shareholders 70.3 51.3 +37.0Dividends payable (23.4) (19.8)Retained profit for year 46.9 31.5

Adjusted fully diluted EPS – cent 19.77 14.95 +32.2

Turnover and operating profitAn analysis of the factors influencing the changes in turnover and operating profit is provided in the Review ofOperations for 2004 on pages 14 to 16.

Net interest incomeNet interest income, including the Group’s share of the net interest expense in its joint ventures, amounted to€5.5 million in 2004, an increase from €4 million in the previous year. This improvement resulted from higherSterling interest rates and higher average net cash balances during the year.

Goodwill amortisationThe goodwill amortisation charge increased to €6.5 million in 2004 from €3.8 million in the previous year,largely as a result of an amortisation charge of €2.4 million on the goodwill which arose on the acquisition ofEverfresh during the year.

Frank Gernon, Group Finance Director

Financial Review for 2004 continued


Exceptional itemsExceptional items gave rise to a net profit in 2004 of €8.1 million made up as follows:

€’m €’m

Profit on disposal of various tangible fixed assets 2.5Profit on disposal of property joint venture 12.7Total profits from tangible fixed asset disposals 15.2Net loss on other business disposals (0.5)Group development costs (2.5)Cost of litigation against DCC plc and others (4.1)Total other exceptional items (7.1)Net exceptional profit 8.1

Total net profits from tangible fixed asset disposals, mainly property transactions, during the year amounted to€15.2 million. This comprises €12.7 million from the disposal of the Group’s 50% interest in a joint ventureundertaking which owned a significant development property in Dundalk in the North East of Ireland, €1.9million from the disposal of a property in Kenmare in the South West of Ireland and €0.6 million from a numberof smaller disposals.

Towards the end of the year, the Group sold its 50% interest in a tropical farming joint venture in CentralAmerica, incurring a loss on disposal of €1.1 million. Termination of a number of small subsidiaries operations,together with the receipt of deferred consideration in respect of a subsidiary sold in a prior year, gave rise anet exceptional profit in the year of €0.6 million.

During the year, the Group incurred external costs, including advisory and professional fees, relating mainly toone large acquisition which was terminated at an advanced stage, amounting to €2.5 million. These costs areincluded in net operating expenses and highlighted as exceptional in the profit and loss account. Costsamounting to €4.1 million in relation to the Group’s ongoing legal action against DCC plc and others aresimilarly included in net operating expenses and highlighted as exceptional in the profit and loss account.

The net tax charge on exceptional items in the year was €0.5 million.

Profit before taxTotal profit before tax, including property profits of €15.2 million but excluding other exceptional items andgoodwill amortisation, amounted to €110 million in 2004, compared to €79.3 million in 2003, an increase of38.7%. Profit before tax, excluding goodwill amortisation of €6.5 million, amounted to €102.8 million for theyear compared to €75.7 million in 2003, an increase of 35.9%.

Excluding exceptional items of €8.1 million and goodwill amortisation, the underlying ‘adjusted’ profit beforetax amounted to €94.7 million, compared to €71.6 million in the previous year, an increase of 32.2%. Statutoryprofit before tax, after net exceptional items and goodwill amortisation, amounted to €96.3 million in 2004compared to €71.8 million in 2003, an increase of 34.1%.


Tax chargeThe Group’s tax rate for the year, excluding the impact of exceptional items, increased to 15.6% in 2004,compared to 12.8% in 2003. This reflects the increase in profits arising in Continental Europe, wherecorporation tax rates are higher, and the impact of acquisitions in the year. The charge for the year, excludingthe impact of exceptional items, was €13.8 million compared to €8.7 million in the previous year. Including thetax impact of exceptional items, the total charge for 2004 was €14.3 million, equivalent to a rate of 14.9%.

Minority interest chargeThe total charge for minority interests in the year amounted to €11.6 million compared to €11.3 million in 2003.The charge in the prior year included €0.5 million in relation to an exceptional profit on disposal of fixed assetsin one of the Group’s non-wholly owned subsidiaries.

DividendThe Board is proposing to pay a final dividend for the year ended 31 December 2004 of €5.20 cent per share,an increase of 20.1% on the previous year. The total dividend per share for the year will then amount to €6.73cent, an increase of 17.7% on 2003. The total dividend distributed to shareholders for 2004 will be €23.4 millioncompared to €19.8 million in 2003. The final dividend, which will be subject to Irish withholding tax rules, willbe paid on 25 May 2005 to shareholders on the register on 15 April 2005. The total dividend for the yearrepresents a return of 3.8%, based on the average share price for 2003 of €1.75 and 3.0% based on the shareprice at close of business on 2 March 2005. The dividend cover was 3.0 times in 2004, up from 2.6 times in2003.

Earnings per shareBasic earnings per share for the year amounted to €20.28 cent compared to €14.84 cent in the previous year,an increase of 36.7%. Adjusted fully diluted earnings per share, excluding the impact of exceptional items andgoodwill amortisation, amounted to €19.77 cent in 2004 compared to €14.95 cent in the previous year, anincrease of 32.2%.

Summary balance sheet

2004 2003 2002€’m €’m €’m

Intangible assets (mainly goodwill) 95.8 47.3 51.6

Tangible assets 169.2 130.1 135.8

Financial assets (including goodwill) 53.7 43.3 48.0

Working capital 20.0 32.5 7.6

Deferred acquisition consideration (31.3) (9.8) (13.5)

Taxation (32.5) (30.9) (29.0)

Proposed dividend (18.1) (15.0) (13.6)

Provisions for liabilities and charges (12.1) (14.5) (18.2)

Net cash 163.6 172.4 166.8

Net assets 408.3 355.4 335.5

Shareholders’ funds 353.4 305.9 293.4

Minority interests 54.9 49.5 42.1

Capital employed 408.3 355.4 335.5



Shareholders’ fundsShareholders’ funds at 31 December 2004 amounted to €353.4 million compared to €305.9 million at 31December 2003, up 15.5%, largely reflecting the increase in retained profits for the year. The movement inshareholders’ funds is analysed in the following table.

2004 2003 2002€’m €’m €’m

At beginning of year 305.9 293.4 279.1

Profits after tax and minority interests 70.3 51.3 44.0

Dividends (23.4) (19.8) (18.0)

Translation of non-euro denominated net assets (1.5) (19.6) (17.1)

Shares issued 2.1 0.6 0.2

Adjustments to historic goodwill - - 5.2

At end of year 353.4 305.9 293.4

The acquisition of Everfresh during the year gave rise to an increase in goodwill amounting to €53.4 million. Inaddition to the €29.4 million paid in 2004, Fyffes has accrued deferred consideration which may becomepayable for the remaining 40% in 2007. The estimate of deferred consideration payable is based on a multipleof average profits over the three years ending 31 December 2006. The fair value of the net liabilities acquired,excluding goodwill in its own balance sheet of €6 million, amounted to €1.1 million. Net debt in Everfresh atthe date of acquisition amounted to €14.2 million.

Return on capital employedReturn on capital employed, calculated by comparing total operating profit, excluding exceptional items andgoodwill amortisation, to average capital employed, was 19.1% in 2004, up from 16% in the previous year.Capital employed excludes net cash balances but includes historic goodwill which is set-off against reserves(amounting to approximately €217 million in 2004 and 2003). Excluding this goodwill from capital employedincreases the return on average capital to almost 36% for the year.

Retirement benefitsThe Group operates a number of externally funded defined benefit and defined contribution pensionschemes. While these continue to be accounted for under Statement of Standard Accounting Practice 24,Accounting for Pension Costs, the disclosure requirements of Financial Reporting Standard 17 – RetirementBenefits (FRS 17) in relation to the defined benefit schemes are set out in note 31 to the financial statementson pages 74 to 78. Under the measurement criteria in FRS 17, these schemes had an aggregate deficit (net ofdeferred tax) of €18.7 million at 31 December 2004, compared to a deficit of €9.5 million last year.Notwithstanding an increase in the year in the value of the schemes assets of €12.4 million, the deficit is higheras a result of the decrease in long term bond rates at the end of 2004.


Summary cash flow statementThe following table summarises the movement in the Group’s net cash balances over the last three years.

2004 2003 2002€’m €’m €’m

Total operating profit before exceptional items 82.7 63.8 61.3 Depreciation/amortisation 22.5 18.6 16.1

EBITDA excluding exceptional items 105.2 82.4 77.4

Exceptional items in operating profit (6.6) (3.7) -Deduct share of joint ventures operating profit (8.1) (4.7) (10.9) Dividends from joint ventures/associates 0.2 6.1 3.1 Net interest income 7.9 6.8 7.5 Working capital movements 12.2 (26.4) 4.3 Tax (paid) (15.9) (10.2) (8.8) Dividends paid (including minorities) (25.7) (21.6) (18.8)Capital expenditure (39.7) (9.3) (11.6)Proceeds from disposal of tangible assets 4.0 12.7 19.7

Free cash flow 33.5 32.1 61.9

Purchase/net investment in subsidiaries and joint ventures (46.7) (11.5) (49.2)Deferred consideration payments (1.4) (1.5) (1.5) Disposal of subsidiaries, joint ventures and investments 6.8 0.5 22.0Translation adjustment (1.0) (14.3) (13.4) Other - 0.3 (3.6)

Movement in net cash (8.8) 5.6 16.2

Opening net cash 172.4 166.8 150.6

Closing net cash 163.6 172.4 166.8

During the last three years, free cash flow generated by the Group, before capital expenditure and acquisitionsand investments in joint ventures, amounted to €188 million, averaging more than €62 million per annum. TheGroup spent €112 million investing in new subsidiaries and joint ventures in the past three years, including debtacquired. Capital expenditure amounted to €61 million in the same period.

Net cash balances at 31 December 2004 amounted to €163.6 million compared to €172.4 million at theprevious year end. EBITDA generated by the Group’s operations during the year, excluding exceptional itemsamounted to €105.2 million in 2004, including an improvement in working capital balances of €12.2 million.From the cash generated in the year, the Group made dividend and tax payments amounting to €41.6 million(including €5.4 million dividends to minority shareholders). In addition, capital outlay amounted to €84.9million, comprising acquisition spend, including net debt in the acquired subsidiaries of €45.2 million, mainlyin relation to Everfresh, and capital expenditure, mainly on property assets, of €39.7 million. Disposals ofproperties, subsidiaries and joint ventures realised net cash amounting to €10.8 million during the year.



Treasury activity and financial instrumentsThe Group finances its operations through a combination of retained profits and its own net cash resources.The financial instruments that arise from this activity comprise bank deposits, bank loans and, from time totime, certain financial assets such as government securities, commercial paper and other trade investments.Other financial instruments such as trade debtors and trade creditors arise directly from operations. Inaddition, the Group enters into derivative instruments with a view to managing the currency risk and, to a lesserextent, the interest rate risk arising from its operations.

The principal risks that arise from these financial instruments are foreign currency risk, interest rate risk andliquidity risk. The Board has determined the policies for managing these risks as set out below and theseremained unchanged throughout the year. It is Group policy to manage these risks in a non-speculativemanner.

While many of the Group’s operations are carried out in euro-zone economies, it also has significant activitiesin the UK, Sweden, Denmark and the Czech and Slovak Republics. As a result, the Group’s balance sheet isexposed to currency fluctuations, including in particular GBP/EUR movements. While the net investment inoverseas operations is initially hedged by foreign currency borrowings, going forward these businessesgenerally fund their operations locally. The Group also has large transactional currency exposures since asignificant portion of its costs, particularly produce purchases and shipping, are denominated in US Dollars.This transactional exposure is managed on a daily basis. Currency requirements are generally purchased on arelatively short term basis in the spot or forward markets. From time to time, the Group can take a longer termview on currency movements and enters derivative instruments such as options, cylinders, caps and floors tomanage its exposure.

In general, the approach employed by Fyffes to managing its exposure to interest rate fluctuations is tomaintain the majority of its deposit and loan portfolios on floating rates. Rates are usually fixed for relativelyshort periods in order to match funding requirements while being able to benefit from opportunities due tomovements in longer term rates. Derivative instruments, such as forward rate agreements and interest rateswaps, are used from time to time to further manage the exposure to interest rate fluctuations.

In relation to liquidity, the Group’s policy is to maintain the majority of its net cash balances on relatively shortterm maturities to match its funding requirements and to reflect the prudent approach of the Board to cashbalances. Net cash is invested with institutions of the highest credit rating, with limits on amounts held withindividual banks or institutions at any one time. It is also the policy of the Group to have adequate committedun-drawn facilities available at all times to cover unanticipated financing requirements.

The numerical disclosures required under Financial Reporting Standard 13, Derivatives and Other FinancialInstruments: Disclosures, in relation to the above risks are set out in Note 33 to the financial statements onpages 80 to 82.


Accounting policies and standardsThe Group remains committed to the adoption of best practice in the preparation of its financial statements.There were no changes in accounting policies during 2004 and no new accounting standards becameapplicable. However, the Group acquired a number of properties during the year that were not in use in thebusiness at 31 December 2004 and which have consequently been classified as investment properties. Theseproperties are carried at cost in the balance sheet which, given the proximity of their acquisition to the yearend, the Group believes is a reasonable estimate of their open market value.

Transition to International Financial Reporting Standards (IFRS)In 2005 the Group, like all other listed companies in the EU, will be required to prepare its consolidatedfinancial statements under International Financial Reporting Standards (IFRS). The existing Irish and UKstandard setter, the Accounting Standards Board (ASB), is in the process of a convergence project, the aim ofwhich is to move existing Irish/UK standards towards IFRS in advance of the transition. In addition, the IFRSstandard setter has updated many of its standards in advance of the changeover and this process is continuing.

The Group is satisfied that it is well prepared for the transition to reporting under IFRS and its accountingpolicies in this regard will be approved by the Board in the first half of 2005. Interim results for the first half of2005 will be presented in accordance with IFRS, which will include the restatement of the 2004 half year andfull year primary financial statements as comparatives.

The following are the most significant areas of difference under IFRS compared to existing Irish/UK GAAP, asapplicable to the Group’s circumstances:

Goodwill on acquisitionsThe Group’s current policy under FRS 10 Goodwill and Intangible Assets, is to capitalise goodwill on acquisitionand to amortise it over its estimated useful life, using in most cases the rebuttable assumption of twenty yearsallowed in the Standard. Under IFRS 3 Business Combinations, goodwill amortisation will not be charged inthe Group’s income statement. Rather, annual reviews will be performed to assess goodwill impairment.

Post-employment benefits schemesThe Group currently accounts for its defined benefit pension schemes in accordance with SSAP 24, Accountingfor Pension Costs. In addition, in note 31 on page 74 of the financial statements, the Group sets out the impactof FRS 17, Retirement Benefits, if it was required to be applied. The basis of calculating the value of definedbenefit scheme assets and liabilities in FRS 17 are substantially consistent with the requirements of IAS 19,Employee Benefits. Consequently, the details in note 31 give a good indication of the changes required underIFRS in respect of both the charge in the income statement and the impact on the balance sheet.


Share-based paymentsUnder IFRS 2, Share-based Payments, the Group will be required to measure the cost of all share optionsgranted to its employees since 7 November 2002, using an appropriate option pricing model. This will resultin an additional non-cash expense being recognised in the Group’s income statement.

Proposed dividendsUnder IAS 10, Events after the Balance Sheet Date, dividends are recognised in the period in which they aredeclared. Accordingly, the company will not recognise the accrual for its proposed final dividend for the yearin its IFRS balance sheet, but rather will include it as a movement in its statement of changes in equity in thefollowing year.

Deferred taxationUnder IAS 12, Income Taxes, certain temporary timing differences, such as in respect of rollover relief, that arenot recognised under FRS 19, Deferred Tax, may be recognised in the Group’s IFRS balance sheet.

Financial InstrumentsIAS 39, Financial Instruments: Recognition and Measurement, has given rise to considerable public debate andthe EU has now approved its delayed implementation date of 1 January 2005. The Group has reviewed theimplications of this new standard for its financial statements and is satisfied that it is not likely to have asignificant impact. Under IAS 39, all derivative instruments will be measured at fair value. The Group issatisfied that, where applicable, its foreign currency borrowings and derivative contracts will qualify as hedgesunder IAS 39. Going forward, the Group will be required to measure the effectiveness of such hedginginstruments.

Treatment of subsidiaries and joint venturesThe Group is reviewing the treatment of its non-wholly owned subsidiary companies in the context of thedefinition of subsidiaries in IAS 27, Consolidated and Separate Financial Statements. Any changes which mightbe required at the conclusion of this review will not impact the Group’s earnings per share. The Group is alsoconsidering whether it will account for its joint ventures in accordance with the proportionate basis ofconsolidation as allowed under IFRS or whether it will continue to apply the equity basis of accounting whichis also permitted.

Finally, IFRS compliance will result in additional disclosures and other changes in the presentation of certainitems.

LitigationThe trial of the Group’s legal action against DCC plc and others in relation to the sale of 31.2 million Fyffes’shares in February 2000 commenced in the High Court in Dublin on 2 December 2004. These proceedings areongoing and are expected to continue for a number of months.

Frank GernonGroup Finance Director2 March 2005



Contents Page

Directors and other information 26

Directors’ report 27

Corporate governance report 29

Audit committee report 33

Compensation committee report 35

Statement of directors’ responsibilities 40

Independent auditors’ report 41

Statement of accounting policies 42

Group profit and loss account 45

Other statements 46

Group balance sheet 47

Company balance sheet 48

Group cash flow statement 49

Notes forming part of the financial statements 50

Principal subsidiaries, joint ventures and associates 83

Notice of annual general meeting 86

Index to annual report 89


Fyffes plcCarl P. McCann ChairmanDavid V. McCann Chief ExecutiveNeil V. McCannJohn F. GernonJimmy P. TolanDenis J. BerginDr. Paul F. deV. ClüverRose B. HynesJ. Declan McCourtGerald B. ScanlanWilliam M. Walsh

Fyffes Group Ireland LimitedEugene J. Caulfield ChairmanMichael C. ClerkinFrank J. DavisDonal W. EarlsStephen J. McAdam Desmond G. McCoyFrancis G. McKernan Charles D. ShaughnessyThomas G. ShieldsLaurence P. Swan

Fyffes Group LimitedA. John Ellis CBE ChairmanCoen Bos Rory P. ByrneEugene J. CaulfieldTimothy D. ChambersFrank J. DavisAndrew H. Denham-SmithDavid J. FlynnMichael J. KeySeamus M. MulvennaThomas G. Murphy

Secretary and registered officePhilip T. Halpenny29 North Anne StreetDublin 7

AuditorsKPMGChartered Accountants1 Stokes PlaceSt. Stephen’s GreenDublin 2

SolicitorsArthur Cox S.J. Berwin & Co.Arthur Cox Building 222 Grays Inn RoadEarlsfort Terrace London WC1X 8HBDublin 2

Niles Barton & Wilmer111 S. Calvert StreetSuite 1400 Baltimore Maryland 21202-6185USA

BankersAllied Irish Banks plc Barclays Bank PLC Bankcentre Pall MallBallsbridge London SW1Y 5AXDublin 4

StockbrokersDavy49 Dawson StreetDublin 2

RegistrarsComputershare Services (Ireland) LimitedHeron HouseCorrig RoadSandyford Industrial EstateDublin 18

Directors and other information


Directors’ report

The directors present their report to the shareholders, together with the audited financial statements, for the year ended 31December 2004.

Principal activities and business reviewFyffes plc is a major distributor of fresh fruit and produce in Ireland, the UK and Continental Europe. A detailed business reviewis included on pages 3 to 24.

ProfitDetails of the profit and movements on the profit and loss account for the year ended 31 December 2004 are set out on pages45 and 46.

DividendsAn interim dividend of €1.53 cent (2003: €1.39 cent) per €6 cent ordinary share was paid on 4 October 2004. It is proposed topay a final ordinary dividend of €5.20 cent (2003: €4.33 cent) per ordinary share. The total dividend for the year will then be €6.73cent (2003: €5.72 cent).

Future developmentsA review of future developments of the business is included on pages 3 to 24.

Directors and secretaryOn 1 January 2004, W.M. Walsh was co-opted to the Board and he was elected at the Annual General Meeting (AGM) on 31 May2004. In accordance with the Articles of Association of the company, C.P. McCann, R.B. Hynes, J.D. McCourt and G.B. Scanlanretire from the Board and, being eligible, offer themselves for re-election. In addition, the 2003 Revised Combined Coderecommends that non-executive directors with more than nine years service should offer themselves for re-election annually.Accordingly, D.J. Bergin also retires from the Board and offers himself for re-election. None of these directors has a servicecontract with any Group company.

Directors’ and company secretary’s interestsDetails of the directors’ and company secretary’s share interests and interests in share options of the company and Groupcompanies are set out in the compensation committee report on pages 35 to 39.

Substantial holdingsThe directors have been notified of the following significant interests in the issued ordinary share capital of the company at 31December 2004:

Number ofOrdinary Shares Percentage

Balkan Investment Company and related parties 40,152,865 11.2%

The shares attributed to Balkan Investment Company and related parties include those shares owned by C.P. McCann, D.V.McCann and N.V. McCann, as shown on page 38, who are directors of Balkan Investment Company. N.V. McCann is deemed,within the meaning of the Companies Act, 1990, to have an interest in the shares owned by Balkan Investment Company andrelated companies. Tarncott Company, which is a related party of Balkan Investment Company, owns 5.6% of the issued sharecapital of the company.

Bank of Ireland Nominees Limited and Marathon Asset Management Limited have notified the directors that they each holdbetween 5% and 10% of the issued share capital of the company. Bank of Ireland Nominees Limited and Marathon AssetManagement Limited state that these shares are not beneficially owned by them. The Board has not been notified of any otherholdings of 3% or more of the issued ordinary share capital of the company.

Directors’ interests in contractsNone of the directors had a beneficial interest in any material contract to which the holding company or any subsidiaryundertaking was a party during the year.

Political donationsDuring the year, the Group and company made no political donations disclosable under The Electoral Act, 1997.

AuditorsIn accordance with Section 160 (2) of the Companies Act, 1963, the auditors, KPMG, Chartered Accountants, have expressedtheir willingness to continue in office.


Directors’ report continued

Treasury sharesAt 31 December 2004, the number of treasury shares held amounted to 9,021,610 ordinary €6 cent shares at a cost of €16,582,000(2003: 9,021,610 ordinary €6 cent shares at a cost of €16,582,000). These shares were delisted in 1999 and represent 2.5% (2003:2.5%) of the ordinary shares in issue at 31 December 2004.

Accounting recordsThe directors believe that they have complied with the requirements of section 202 of the Companies Act, 1990, with regard tobooks of account by employing accounting personnel with appropriate expertise and by providing adequate resources to thefinancial function. The books of account of the company are maintained at The Ramparts, Dundalk, Ireland.

Health and safetyFyffes plc is committed to complying with the Safety, Health and Welfare at Work Act, 1989. Safety statements are prepared forall relevant companies in the Group to assist in ensuring a safe place and system of work.

Subsidiary, joint venture and associated undertakingsInformation on the principal subsidiary, joint venture and associated undertakings of the Group is included on pages 83 to 85.

Special business at Annual General MeetingYour attention is drawn to the Notice of the Annual General Meeting (AGM) of the company on pages 86 to 88. In addition tothe usual business to be transacted at the AGM (as set out in resolutions 1 to 4 in the Notice of the meeting), there are a numberof items of special business which are described further below.

Under the first item of special business, shareholders are being asked to give the Board authority to allot and issue up to anaggregate amount of €6,969,279 in nominal value of new shares (116,154,648 shares), being equal to one third of the nominalvalue of the existing issued ordinary share capital of the company. While the directors do not have any current intention toexercise this power, this authority is being sought as it is common practice for public companies. In addition, the shareholdersare being asked under the second item of special business to renew, until the next AGM, the authority to disapply the strictstatutory pre-emption provisions in the event of a rights issue (subject to the limits in the authority referred to earlier) or in anyother issue up to an aggregate amount of €1,045,392 in nominal value of ordinary shares (17,423,197 shares), representing 5% ofthe nominal value of the company’s issued ordinary share capital for the time being. This authority will expire at the earlier ofthe close of business on the date of the AGM of the company in 2006 or 23 November 2006.

Under the third item of special business, shareholders are being asked to extend the authority granted at the last AGM to givethe company, or any of its subsidiaries, the authority to purchase up to 10% of its own shares (34,846,394 shares). If granted, thisauthority will expire at the earlier of the AGM in 2006 or 23 November 2006. Such purchases would be made only at price levelsat which it is considered to be in the best interests of the shareholders generally, after taking into account the company's overallfinancial position. Furthermore, the authority being sought from shareholders provides that the minimum price which may bepaid for such shares will not be less than the nominal value of the shares and the maximum price will be 105% of the averagemarket price of such shares over the preceding five business days. From time to time, the directors may consider exercising thispower to purchase the company's own shares so as to avoid any dilution from issuing new shares.

Shareholders are also being asked under the fourth item of special business to authorise the company to reissue any sharespurchased by the company which are not cancelled and have instead been held as treasury shares.

Under the final item of special business, shareholders are being asked to extend the Fyffes plc Revenue Approved Profit SharingScheme for a further period of ten years, so that it shall now not terminate until after the appropriation of shares in respect ofthe financial year ending in 2014. This share scheme is an all employee share scheme and has operated successfully over thelast ten years. The extension of the scheme will not alter the operation of the scheme in any other way. A copy of the Trust Deedand Rules, which govern the scheme, will be available for inspection at the AGM.

A Form of Proxy, in respect of all the resolutions to be voted on, has been posted to shareholders with this annual report.

On behalf of the Board

C.P. McCann J.F. GernonChairman Finance Director 2 March 2005


Corporate governance report

Application of the Combined Code principlesFyffes plc is firmly committed to business integrity, high ethical values and professionalism in all its activities and operations. Asan essential part of this commitment, the Board endorses the highest standards in corporate governance. This report describeshow Fyffes plc applies the principles and provisions of the Revised Combined Code on Corporate Governance of the Irish andLondon Stock Exchanges ("the 2003 Combined Code"). The provisions of the 2003 Combined Code became applicable toFyffes for the first time in the year ended 31 December 2004.

Compliance with the provisions of the 2003 Combined CodeThe directors confirm that, throughout the year ended 31 December 2004, Fyffes plc complied with the provisions of the 2003Combined Code with the exception that the company did not have a nomination committee until its establishment wasapproved by the Board on 7 January 2005.

The Board of DirectorsFyffes plc is led by a strong and effective Board of Directors (see biographical details set out on pages 6 and 7). Throughout theyear, the Board consisted of eleven directors, five executive directors and six non-executive directors, all of whom the Board hasdetermined to be independent. Both executive and non-executive directors have fiduciary responsibilities to the shareholders.In addition, the executive directors are responsible for the operation of the business, while the non-executive directors bringindependent, objective judgement to bear on Board decisions by constructively challenging management and helping todevelop the Group’s strategic objectives.

Each of the executive directors has extensive knowledge of the fresh produce industry, in addition to wide-ranging business skillsand commercial acumen. All of the directors bring an objective judgement to bear on issues of strategy, performance, resources(including key appointments) and standards of conduct. Board members are selected because of their pertinent experience andappropriate training is available to them whenever necessary. On appointment, new directors received a full, formal and tailoredinduction into the Group’s activities and into the operation and procedures of the Board.

Effective governance is achieved by the separation of the roles of the executive Chairman and Chief Executive, as this divisionof responsibilities at the head of the Group ensures a balance of power and authority. The Chairman has overall responsibilityfor ensuring that the Group achieves a satisfactory return on investment for shareholders; he oversees the orderly operation ofthe Board and ensures appropriate interaction between it and its shareholders. The Chief Executive is responsible fordeveloping and delivering the Group’s strategic plan and is accountable for its overall performance and day to day management.

Independence of non-executive directorsThe Board has evaluated the independence of each of its non-executive directors. Following this assessment, the Boardconcluded that, throughout the reporting period, all of its non-executive directors, who are appointed for specified terms ofoffice, were independent.

In arriving at its conclusion, the Board considered many factors including, inter alia, whether any of the non-executive directors:

• has been an employee of the Group within the last five years;• has, or had within the last three years, a material business relationship with the Group;• receives remuneration from the Group other than a directors’ fee;• has close family ties with any of the Group’s advisers, directors or senior employees;• holds cross-directorships or has significant links with other directors through involvement in other companies or bodies; or • represents a significant shareholder.

In particular, the Board reviewed the positions of three of its members in the context of the guidance in the 2003 Combined Codeand determined that, despite their length of tenure on the Board in the case of D.J. Bergin and G.B. Scanlan, and his businessrelationship with the company in the case of Dr. P.F. de V. Clüver, all three are independent. Like each of the other non-executivedirectors, these three discharge their duties in a proper and consistently independent manner and constructively andappropriately challenge the executive directors and the Board. All of the non-executive directors bring an unfetteredperspective to their advisory and monitoring roles. The terms and conditions of the appointment of the non-executive directorsare available from the registered office of the company.

Senior independent non-executive directorG.B. Scanlan continued to act in the capacity of the senior independent non-executive director throughout the year.

Corporate governance report continued

Operation of the BoardThe Board meets regularly throughout the year. There are six routinely scheduled Board meetings held annually, in addition towhich meetings are called as and when warranted by issues arising. The attendance of directors at Board and relevantcommittee meetings during the year was as follows:

Full Audit Risk CompensationBoard Committee Committee Committee

Number of meetings in 2004 6 4 1 1

C.P. McCann – Chairman 6 - - -D.V. McCann – Chief Executive 6 - - -N.V. McCann – Executive 6 - - -J.F. Gernon – Finance Director 6 4* 1 1*J.P. Tolan – Corporate Development Director 5 - - -D.J. Bergin – Non-executive 6 3 1 1R.B. Hynes – Non-executive 6 4 - -J.D. McCourt – Non-executive 6 - - 1G.B. Scanlan – Non-executive 6 4 1 1Dr. P.F. deV. Clüver – Non-executive 3 - - -W.M. Walsh – Non-executive 6 - - -

*In attendance only

In addition to the scheduled meetings above, there were eight other meetings of sub-committees specially appointed by theBoard during 2004 to deal with specified matters.

The Board and its committees are supplied with high quality, up-to-date information for review prior to each meeting to enablethem to discharge their duties. The Board has identified and formally adopted a schedule of key matters that are reserved forits decision, including the annual fiscal and capital budget, interim and preliminary results announcements, interim and finaldividends, the appointment of directors and the company secretary, circulars to shareholders, Group treasury policies, capitalexpenditure and acquisitions in excess of €5 million. Certain other matters are delegated to Board committees, the details ofwhich are set out below.

There is an agreed Board procedure enabling directors to take independent professional advice, as required, at the company’sexpense. The company maintained directors’ and officers’ liability insurance throughout 2004. Each Board member has accessto the impartial advice and services of the company secretary, who is responsible to the Board for ensuring that appropriateprocedures are followed. The appointment or removal of the company secretary is a matter reserved for the Board as a whole.

The Memorandum and Articles of Association of the company require that one third of the Board must, by rotation, seek re-election at the Annual General Meeting (AGM) each year, together with all new directors appointed since the previous AGM. Inaccordance with the guidance in the 2003 Combined Code, non-executive directors serving for more than nine years will seekre-election annually.

There is open communication between senior executive management and Board members.

Evaluation of the performance of the Board, its committees and individual directorsDuring January and February 2005, the Board undertook an evaluation of the performance of itself, its committees and eachindividual director in the previous financial year. In assessing the performance of the Board, the directors considered suchmatters as the appropriateness of its composition, its effectiveness in developing Group strategy, its contribution to managingthe Group’s business and operational risks, its response to developing issues and its communications with the Group’sstakeholders. In assessing the performance of the committees of the Board, the directors considered the appropriateness oftheir composition and terms of reference, their effectiveness in fulfiling their roles and their interaction with the Board. Theassessment of the performance of individual directors included consideration of their contribution to the effective functioning ofthe Board, the appropriateness of their knowledge, skill and experience levels and their commitment to their roles. TheChairman summarised the conclusions of these evaluation processes and reported them to the Board for its consideration.Further evaluations will take place on an annual basis. In addition, the non-executive directors met privately to evaluate theeffectiveness of the Chairman.



Board committeesThe composition and terms of reference of the committees of the Board are as follows:

Audit committee Full details of the composition, terms of reference and activities of the audit committee in 2004 are set out in the audit committeereport on pages 33 and 34.

Nomination committeeOn 7 January 2005, the Board agreed to the establishment of a committee of the Board called the nomination committee toconsider the composition of the Board and, when a need for new or additional directors is identified, to bring forward a list ofpotential candidates for consideration and approval by the Board. The initial members of the nomination committee are R.B.Hynes, J.D. McCourt, C.P. McCann (Chairman), D.V. McCann and G.B. Scanlan.

Compensation committeeDetails of the composition and terms of reference of the compensation committee, which has responsibility for remuneration ofthe executive directors are set out in the compensation committee report on pages 35 to 39.

Risk committeeThe risk committee assesses the key risks facing the Group and assists the Board in fulfilling its responsibility as to the mannerin which risk is recognised, assessed and managed on an on-going basis. The members of the committee, which meets at leastannually, are D.J. Bergin, J.F. Gernon (Chairman), G.B. Scanlan and P.T. Halpenny, the company secretary. C.P. McCann resignedfrom this committee during the year, following his appointment as Chairman of the Board of Directors. A senior member ofexecutive management is dedicated to executing the process of risk management under the direction of the committee.

Internal controls and the management of risk The Board is ultimately responsible for the overall system of internal controls for the company and its subsidiaries and forreviewing the effectiveness of these controls. The system is designed to manage risks that may impede the achievement of theGroup’s business objectives rather than to eliminate these risks. The internal controls system therefore provides reasonableassurance (but not absolute assurance) against material misstatement or loss.

Fyffes continues to operate a vigorous internal audit function under the direction of the audit committee. Both the internal auditand risk management functions facilitate each other and, together with divisional management, they provide the Board withdistinct sources of reasonable assurance as to the effectiveness of the system of internal controls that governs the Group’s controlenvironment.

Risk management within Fyffes is co-ordinated by the risk committee which governs the process consistently throughout theGroup and reviews findings. The committee periodically advises the Board of its conclusions, enabling corrective initiatives tobe undertaken where deemed appropriate.

The key risks that might impair the business from achieving its objectives are identified and assessed by conducting detailedreviews with executive managers at divisional level. Divisional management thereafter becomes charged with the cost efficientmitigation of the risks within their areas of responsibility. Risk evaluation and suggestions for strategic change are reviewed bythe risk committee, which in turn appraises the Board of its findings. In studying the report of the risk committee, the Board alsoconducts its own risk identification and assessment so that it becomes sufficiently aware of the principal threats to which theGroup may be exposed.

The Board, through its risk committee, has reviewed and updated the process for identifying and evaluating the significant risksaffecting the business and the policies and procedures by which these risks are managed effectively. The Board has embeddedthese structures and procedures throughout the Group and considers them to be a robust and efficient mechanism to create aculture of risk awareness at every level of management.

The directors regard the process of risk management as a positive medium for change, adding value in the interest ofshareholders by utilising sound and considered judgement, while simultaneously making the organisation alert to bestmanagement practices.




Communications with shareholdersCommunications with shareholders is given a high priority in Fyffes. There is regular dialogue with institutional shareholders aswell as general presentations at the time of the release of the annual and interim results. Feedback from contact withshareholders is given to the Board. In addition, the Group publishes its preliminary and interim results presentations on thecompany’s website (www.fyffes.com).

In accordance with the guidance in the 2003 Combined Code, the senior independent non-executive director is available tomeet shareholders on request, in particular to deal with queries on governance matters. In addition, he ordinarily attends theAGM where shareholders can question him.

There is a business presentation provided at the Group’s AGM followed by a question and answer forum which offersshareholders the opportunity to question the Board. The AGM is valued by the Board as an occasion where individualshareholders’ views and suggestions can be noted and considered by the directors.

Accountability and auditThe contents of the operating and financial reviews, the directors’ report and financial statements (in addition to official companypress releases, Stock Exchange announcements and interim results issued during the period) have been reviewed in order toensure a balanced presentation, so that the company’s position and prospects are properly appreciated by shareholders. Asummary of directors’ responsibilities in respect of the financial statements is given on page 40. The system of internal controlsand risk management established to safeguard shareholders’ investment and the company’s assets is set out above. The auditcommittee, whose composition and functions are described on pages 33 and 34, has considered, in conjunction with the externalauditors, the accounting policies adopted in the financial statements and has examined the internal controls that have beenestablished within the Group.

Companies (Auditing and Accounting) Act, 2003In December 2003, the Companies (Auditing and Accounting) Act, 2003 was passed into law in Ireland. The date from which itsprovisions will be applicable to the company and its Irish subsidiaries has not yet been announced.

Environmental management, corporate responsibility and ethical trading initiativesThe European Commission has previously published recommendations governing the recognition, measurement and disclosureof environmental issues in the annual reports of companies. Although the provisions of the recommendations are not bindingon Fyffes, in the conduct of its business across the world, the Group recognises its social responsibility and endorses the growingtrend towards environmental accountability.

The Group actively promotes best business practices and standards that seek to enhance the health, education and conditionsof workers and their families and to universally encourage the use of sustainable farming methods by its suppliers. Further detailsof the Group’s activities in this regard are set out on page 9.

Going concernAfter making enquiries, the directors have a reasonable expectation that the company, and the Group as a whole, has adequateresources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the goingconcern basis in preparing the financial statements.

Directors’ remunerationThe disclosures regarding directors’ remuneration have been drawn up in accordance with the Listing Rules of the Irish StockExchange and are set out on pages 35 to 39.

Annual general meeting (AGM)Details of proxy voting will be announced in respect of each resolution at the forthcoming AGM. The company has arranged forthe Notice of the 2005 AGM and related papers to be sent to shareholders at least 20 working days before the meeting. Therelevant papers were sent out in excess of 20 days before the 2004 AGM.

Audit committee report

Membership and responsibilitiesThe audit committee comprises three independent non-executive directors, D.J. Bergin, R.B. Hynes and G.B. Scanlan.Throughout 2004, D.J. Bergin was Chairman of this committee. With effect from 1 January 2005, R.B. Hynes has taken over therole of Chairman.

The Board believes that R.B. Hynes satisfies the recommendation in the 2003 Combined Code that at least one member of theaudit committee should have recent relevant financial experience. It is also satisfied that D.J. Bergin and G.B. Scanlan, inter aliathrough their membership of the committee and their wide previous business experience, are sufficiently knowledgeable inrelevant financial matters to enable them to fulfil their responsibilities on the committee.

These responsibilities, as set out in the terms of reference of the audit committee, are:

1. to approve the terms of engagement of the external auditors and their remuneration and to recommend to the Board, whenappropriate, any change in the external auditor;

2. to agree, in advance, with the external auditors the nature and scope of their audit as set out in their audit plan;

3. to review the Group’s interim and full year financial statements and to report to the Board on the outcome of this review. Aspart of this process, the committee shall consider:

• the appropriateness of the Group’s accounting policies, including any changes in these policies;• any significant judgemental matters; • any significant audit adjustments; • the continuing appropriateness of the going concern assumption; • compliance with relevant Financial Reporting Standards; and • compliance with legal and Stock Exchange requirements.

4. to review any issues raised by the external auditors during the conduct of their audit. As part of this review, the committeeshall consider any report from the external auditors on their findings in relation to the Group’s financial systems and controls,together with any management responses;

5. to assess and monitor the independence, objectivity and effectiveness of the external auditors. As part of this process, thecommittee reviews the implementation of its policy in relation to the provision of non-audit services by the external auditor,taking into account relevant ethical guidance;

6. to meet regularly with the Group’s head of internal audit in order to approve, in advance, his programme of work and toconsider his findings on completed audits. The committee shall also review the adequacy of the resources of the internalaudit team and the co-ordination between the internal and external auditors;

7. to address any other topics as requested by the Board including to consider the findings of any internal investigations andthe response of management.

In addition, the committee is available to meet any employees of the Group who wish to bring internal control issues to itsattention, which it will investigate as appropriate.

Scheduled meetingsThe audit committee normally meets four times annually. There is a formal agenda for all meetings, which follows the financialreporting cycle of the company. Broadly speaking the matters addressed at these meetings are as follows:

1. February meeting

• To review the draft statutory financial statements for the previous year (including the directors’ report, the Chairman’sstatement, the operating and financial review and the corporate governance report) together with the draft preliminaryannouncement statement.

• To review, with the external auditors, the outcome of their audit of these financial statements, including any significantaudit issues. This shall include a private meeting with the external auditors without management present.

• To approve any letter of representation required by the external auditors in connection with their audit.• If appropriate, to recommend the draft statutory financial statements to the Board.• To consider any observations or recommendations raised by the external auditors in their management letter, including

management responses.• Quarterly review with the head of internal audit.


Audit committee report continued

2. June meeting

• Quarterly review with the head of internal audit, including a private meeting with him without management present andapproval of internal audit plan for the year.

• To review the effectiveness of the internal audit function.• To consider the ongoing appropriateness of various matters including the committee’s own terms of reference, policies

in relation to matters such as the provision of non-audit services by the external auditors and the employment of formeremployees of the external auditors.

3. August meeting

• To review the draft interim financial statements for the first half of the year, together with the draft interim Stock Exchangeannouncement.

• To consider with the external auditors their review of the interim financial statements.• Quarterly review with the head of internal audit.

4. November meeting

• To review with the external auditors the nature and scope of their forthcoming audit as set out in their audit plan and toapprove their engagement letter.

• To consider and, if appropriate, approve the proposed audit fees for the year.• To consider the independence and objectivity of the external auditors including an assessment of the impact, in this

regard, of the non-audit services provided.• Quarterly review with the head of internal audit.

Meetings are attended as appropriate by the Group Finance Director, the Group Financial Controller, the Head of Internal Auditand representatives of the external auditors.

Activities during 2004As planned, the audit committee met four times during 2004 (see attendances in table on page 30), to consider the agendas asset out above. The audit committee continued to review the non-audit services being provided to the Group by its externalauditors and has developed a formal policy in relation to the approval of fees for such work in order to ensure that this does notimpair their independence or objectivity.

During the year, the committee formally reviewed the nature, extent and scope of non-audit services provided by the externalauditors to the Group and satisfied itself as to the independence of the external auditors. Four key principles underpin theprovision of non-audit services by the external auditors, namely that the auditor shall not:

• audit its own firm’s work;• make management decisions for the Group;• have a mutuality of financial interest with the Group; or• be put in the role of advocate for the Group.

The committee also reviewed the Group’s practices in respect of the hiring of former employees of the external auditors and willbe advised in advance of any such appointments which might be proposed.

During January and February 2005, the committee, as part of the overall evaluation of the Board and its directors, undertook aself-evaluation of its effectiveness. The outcome of this review was reported to, and considered by, the Board in February 2005.

During 2004, the committee was briefed by management regarding its plan for the transition to International Financial ReportingStandards. The committee intends, during the first half of 2005, to meet with management and the external auditors inconnection with this process. At that time, the committee will review, and if appropriate, approve the Group’s revised accountingpolicies and the restated 2004 primary financial statements. These statements will be presented as comparatives when reportingthe interim financial statements for 2005.



Compensation committee report

Throughout the year ended 31 December 2004, the company has complied with the provisions relating to directors’remuneration contained in the Listing Rules of the Irish Stock Exchange.

Composition and terms of reference of compensation committeeThe compensation committee is comprised solely of non-executive directors, namely G.B. Scanlan (Chairman), D.J. Bergin andJ.D. McCourt, with no financial interest other than as shareholders in the matters to be decided, no potential conflicts of interestarising from cross-directorships and no day to day involvement in the running of the business.

The terms of reference of the compensation committee are:

• to determine the executive directors’ remuneration and to approve the grant of share options;• to determine the service agreements (if any), remuneration packages and employment conditions of the executive directors;• if necessary to determine termination payments to be made to executive directors;• to report to shareholders on directors’ remuneration in accordance with the requirements of the Irish Stock Exchange; and• where appropriate, to recommend to shareholders the establishment of long-term incentive schemes, to set appropriate

targets for such schemes, to define the basis of participation in such schemes and to determine the grant of awards undersuch schemes.

The Chairman of Fyffes plc is consulted about the remuneration of other executive directors and the compensation committeeis authorised to obtain access to professional advice, if deemed appropriate.

The remuneration of the non-executive directors is approved by the Board.

Remuneration policyThe Group’s policy on executive directors’ remuneration recognises that employment and remuneration conditions for seniorexecutives must properly reward and motivate them to perform in the best interests of the shareholders.

The recurring elements of the remuneration package for executive directors are basic salary and benefits, annual incentivebonus, pensions and participation in the company’s share option scheme and profit sharing scheme. It is policy to grant optionsto key management to encourage identification with shareholders’ interests. Employees are encouraged to hold shares for afurther period after the exercise of their options, subject to the need to finance any cost of acquisition and associated tax liability.

Executive directors’ basic salary and benefitsBasic salaries of executive directors are reviewed annually with regard to personal performance, Group performance andcompetitive market practice.

Performance related bonusThe Group pays performance related annual bonuses to executive directors, as appropriate. The level earned in any one yeardepends on an assessment of individual performance and the overall performance of the Group.

PensionsPensions for executive directors are calculated on basic salary only and provide for two-thirds of salary for full service (40 years)at retirement.

Short term incentive planAs in 2003, the Group established a Short Term Incentive Plan ("STIP") for executive directors and senior management for thefinancial year ended 31 December 2004, in addition to the performance related bonus arrangements. Under the terms of thisSTIP, an incentive award may be payable in cash, subject to the achievement of a one year performance target based on theincrease in total shareholder return (as measured by the annual capital appreciation plus dividend yield), benchmarked againsta peer group of public companies and is payable within 30 days of the compensation committee determining that theperformance target had been achieved. Total payments amounting to €692,000 (2003: €Nil) have been made under the terms ofthis STIP, of which €361,000 was paid to the executive directors as analysed on page 37. A similar scheme (with a no less stringentperformance target) has been established for the financial year ending 31 December 2005.


Compensation committee report continued

Employee share option schemeIt is the Group’s policy to grant share options as an incentive to enhance performance and to encourage employee shareownership in the company. The current employee share option scheme was approved by shareholders in April 1997 to replacethe previous share option scheme, which had expired after ten years of operation. The percentage of share capital which canbe issued under the employee share option scheme and individual limits comply with institutional guidelines. The amount ofordinary share capital over which options may be granted in any ten year period is limited to 5% of the aggregate of the issuedordinary share capital. At 31 December 2004, options had been granted but not yet exercised over 13,200,250 (2003: 13,368,950)ordinary shares or 3.7% of the issued ordinary share capital (2003: 3.8%) at prices ranging from €0.85 to €2.70.

Employee profit sharing schemeThe company has an employee profit sharing scheme which appropriated shares at market value for directors and otheremployees of the Group during the year. Non-executive directors do not participate in this scheme. In January 2004, under thisscheme, the executive directors acquired 22,716 ordinary €6 cent shares and the company secretary accquired 7,572 ordinary €6cent shares in respect of 2003. In December 2004, the executive directors acquired 17,180 ordinary €6 cent shares and thecompany secretary accquired 6,163 ordinary €6 cent shares under this scheme in respect of 2004. Such shares held by thedirectors at the year end are included in the directors’ share interests disclosed on page 38.

Service contractsNo service contracts exist between the company or any of the Group’s subsidiary undertakings and any executive or non-executive directors.

Directors’ interests in contractsThere were no contracts at any stage during the year between the company or any of the Group’s subsidiary undertakings andany director of the company.

Directors’ remunerationAggregate directors remuneration charged in the profit and loss account in the year was as follows:

Executive directors Non-executive directors Total

2004 2003 2004 2003 2004 2003€’000 €’000 €’000 €’000 €’000 €’000

Basic salaries 1,494 1,714 - - 1,494 1,714Fees - - 282 193 282 193Performance bonuses 700 637 - - 700 637Short term incentive plan 361 - - - 361 -Benefits 80 80 - - 80 80Consultancy 200 - - - 200 -Pension contributions 215 205 - - 215 205

3,050 2,636 282 193 3,332 2,829Consultancy feesto past directors 276 87 - - 276 87

Total remuneration 3,326 2,723 282 193 3,608 2,916

Number of directors(average) 5 5 6 4.5 11 9.5



Directors’ remuneration (continued)This is analysed by individual director, in accordance with the rules of the Irish Stock Exchange, as follows:

2004 2003Short Term Other Other

Salary Incentive Benefits & Pension Total Salary Benefits & Pension Totalor Fees Bonus Plan Consultancy Contributions 2004 or fees Bonus Consultancy Contributions 2003€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000

Executives

C.P. McCann 443 190 111 21 66 831 429 173 21 63 686D.V. McCann 443 190 111 21 66 831 429 173 21 63 686N.V. McCann 50 - - 221 - 271 317 - 21 - 338J.F. Gernon 289 150 72 17 43 571 279 136 17 41 473J.P. Tolan 269 170 67 - 40 546 260 155 - 38 453

1,494 700 361 280 215 3,050 1,714 637 80 205 2,636

Non-executives

D.J. Bergin 57 - - - - 57 50 - - - 50Dr. P.F. deV. Clüver 38 - - - - 38 33 - - - 33R.B. Hynes 46 - - - - 46 30 - - - 30J.D. McCourt 46 - - - - 46 30 - - - 30G.B. Scanlan 57 - - - - 57 50 - - - 50W.M. Walsh 38 - - - - 38 - - - - -

282 - - - - 282 193 - - - 193

Consultancy fees to past directors - - - 276 - 276 - - 87 - 87

Total 1,776 700 361 556 215 3,608 1,907 637 167 205 2,916

Other benefits and consultancy for executive directors, except in the case of N.V. McCann, relate entirely to motor expenses.In 2004, N.V. McCann received €21,000 in respect of motor expenses and €200,000 in respect of consultancy services (2003:motor expenses €21,000, consultancy : €Nil).



Pension entitlements of executive directorsThe pension benefits attributable to the executive directors during the year and the total accrued pensions at the end of the yearwere as follows:

Increase in accrued Transfer Total accrued Total accruedpension during value of annual pension at annual pension at

year increase 31 December 2004 31 December 2003(a) (b) (c)

€’000 €’000 €’000 €’000

C.P. McCann 11 147 189 173D.V. McCann 10 106 138 124J.F. Gernon 8 105 151 139J.P. Tolan 5 45 65 58

Total 34 403 543 494

(a) The increase in accrued pension during the year excluding inflation.(b) The transfer value of the increase in accrued pension has been calculated based on actuarial advice. These transfer values

do not represent sums paid or due, but are the amounts that the pension scheme would transfer to another pension schemein relation to the benefits accrued in the year, in the event of a member of the scheme leaving service.

(c) This represents the pension which would be paid annually, on normal retirement date, based on service to the end of thisaccounting period.

Directors’ and company secretary’s share interestsThe interests of the directors in the issued share capital of the company are shown below.

At 31 December 2004 At 31 December 2003Beneficial number Beneficial number*

Fyffes plc Fyffes plcOrdinary shares Ordinary shares

of €6 cent of €6 cent

C.P. McCann 1,519,759 1,506,024D.V. McCann 594,546 580,811N.V. McCann 800,226 800,226J.F. Gernon 346,711 334,285J.P. Tolan 68,105 68,105D.J. Bergin 30,949 30,949Dr. P.F. deV. Clüver - -R.B. Hynes 50,000 -J.D. McCourt 50,000 -G.B. Scanlan 10,000 10,000W.M. Walsh - -

*or at date of appointment, if later.

N.V. McCann is deemed, within the meaning of the Companies Act, 1990, to have an interest in an additional 37,238,334 Fyffesplc ordinary €6 cent shares (2003: 37,238,334) held by Balkan Investment Company and related companies.

At 31 December 2004, the company secretary, P.T. Halpenny, held 181,178 Fyffes plc ordinary €6 cent shares (2003: 167,443).

There have been no movements in the share interests of the directors or company secretary between the year end and 2 March2005.

The market price of the shares at 31 December 2004 was €1.93 and the range during the year was €1.51 to €2.08.



Directors’ and company secretary’s interests in share optionsInformation on directors’ and company secretary’s share options to subscribe for ordinary shares of the company is set out below.

Options held at Options held at Date from31 December 31 December Exercise which Expiry

2003 Granted Exercised Lapsed 2004 price exercisable date

C.P. McCann 950,000 - - 950,000 €1.17 22/09/2000 21/09/2007265,000 - - - 265,000 €2.30 12/01/2002 11/01/2009200,000 - - - 200,000 €0.85 27/03/2004 25/03/2011

- 125,000 - - 125,000 €1.56 17/03/2007 15/03/2014

D.V. McCann 950,000 - - 950,000 €1.17 22/09/2000 21/09/2007265,000 - - - 265,000 €2.30 12/01/2002 11/01/2009200,000 - - - 200,000 €0.85 27/03/2004 25/03/2011

- 125,000 - - 125,000 €1.56 17/03/2007 15/03/2014

J.F. Gernon 350,000 - - - 350,000 €1.17 22/09/2000 21/09/2007100,000 - - - 100,000 €2.30 12/01/2002 11/01/2009130,000 - - - 130,000 €0.85 27/03/2004 25/03/2011

- 75,000 - - 75,000 €1.56 17/03/2007 15/03/2014

J.P. Tolan 300,000 - - - 300,000 €1.17 22/09/2000 21/09/2007131,250 - - 131,250 €2.30 12/01/2002 11/01/2009130,000 - - - 130,000 €0.85 27/03/2004 25/03/2011

- 75,000 - - 75,000 €1.56 17/03/2007 15/03/2014

P.T. Halpenny* 250,000 - - - 250,000 €1.17 22/09/2000 21/09/200750,000 - - - 50,000 €2.70 25/01/2003 24/01/2010

100,000 - - - 100,000 €0.85 27/03/2004 25/03/2011- 50,000 - - 50,000 €1.56 17/03/2007 15/03/2014

*Company secretary

Options granted on and subsequent to 22 September 1997 are only exercisable when the earnings per share figure, in respectof the third or any subsequent accounting period after the end of the basis year (i.e. accounting period preceding the date ofthe grant), is greater than the earnings per share figure for the basis year by a percentage which is not less than (on a year onyear basis) the annual percentage increase in the consumer price index plus 2% compounded during that period.

The directors and company secretary have not been granted, nor have they exercised, any options since the year end.


Statement of directors’ responsibilities

Irish company law requires the directors to prepare financial statements for each financial year which, in accordance withapplicable Irish law and accounting standards, give a true and fair view of the state of affairs of the Group and the company andof the profit for that period. In preparing those financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continuein business.

The directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time thefinancial position of the Group and the company and to enable them to ensure that the financial statements comply with theCompanies Acts, 1963 to 2003 and all Regulations to be construed as one with those Acts. They have general responsibility fortaking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud andother irregularities.

On behalf of the Board

C.P. McCann J.F. GernonChairman Finance Director


Independent auditors’ report to the members of Fyffes plc

We have audited the financial statements on pages 42 to 85.

This report is made solely to the company’s members, as a body, in accordance with section 193 of the Companies Act, 1990.Our audit work has been undertaken so that we might state to the company’s members those matters we are required to stateto them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company and the company’s members as a body for our audit work, for this report or forthe opinions we have formed.

Respective responsibilities of directors and auditors in relation to the annual reportThe directors are responsible for preparing the annual report. As described on page 40, this includes responsibility for preparingthe financial statements in accordance with applicable Irish laws and accounting standards. Our responsibilities, as independentauditors, are established in Ireland by statute, the Auditing Practices Board, the Listing Rules of the Irish Stock Exchange and byour profession’s ethical guidance.

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared inaccordance with the Companies Acts. As also required by the Acts, we state whether we have obtained all the information andexplanations we require for our audit, whether the company’s balance sheet is in agreement with the books of account and reportto you our opinion as to whether:• the company has kept proper books of account;• the directors’ report is consistent with the financial statements;• at the balance sheet date a financial situation existed that may require the company to hold an extraordinary general

meeting, on the grounds that the net assets of the company, as shown in the financial statements, are less than half of itsshare capital.

We also report to you if, in our opinion, information specified by law or the Listing Rules regarding directors’ remuneration andtransactions with the company is not disclosed.

We review whether the corporate governance statement on pages 29 to 32 reflects the company’s compliance with the nineprovisions of the 2003 Combined Code specified for our review by the Listing Rules, and we report if it does not. We are notrequired to form an opinion on the effectiveness of the company’s corporate governance procedures or its risk and controlprocedures.

We read the other information contained in the annual report, including the corporate governance statement, and considerwhether it is consistent with the audited financial statements. We consider the implications for our report if we become awareof any apparent misstatements or material inconsistencies with the financial statements.

Basis of opinionWe conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes anassessment of the significant estimates and judgements made by the directors in the preparation of the financial statements andof whether the accounting policies are appropriate to the Group's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary inorder to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from materialmisstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overalladequacy of the presentation of information in the financial statements.

OpinionIn our opinion, the financial statements give a true and fair view of the state of affairs of the Group and the company as at 31December 2004 and of the profit of the Group for the year then ended and have been properly prepared in accordance with theCompanies Acts, 1963 to 2003 and all Regulations to be construed as one with those Acts.

We have obtained all the information and explanations we considered necessary for the purposes of our audit. In our opinion,proper books of account have been kept by the company. The balance sheet of the company is in agreement with the books ofaccount.

In our opinion, the information given in the directors' report on pages 27 and 28 is consistent with the financial statements.

The net assets of the company, as stated in the balance sheet on page 48, are more than half of the amount of its called up sharecapital and, in our opinion, on that basis there did not exist at 31 December 2004 a financial situation which, under Section 40(1)of the Companies (Amendment) Act, 1983, would require the convening of an extraordinary general meeting of the company.

Chartered Accountants 2 March 2005

Registered Auditors


Statement of accounting policies for the year ended 31 December 2004

A summary of the principal Group accounting policies, all of which have been applied consistently throughout the year and inthe preceding year, are set out below. The financial statements are presented in euro.

Basis of accountingThe financial statements are prepared in accordance with generally accepted accounting principles under the historical costconvention and comply with financial reporting standards applicable in the Republic of Ireland and the United Kingdom.

Basis of consolidationThe Group financial statements consolidate the financial statements of the company and all of its subsidiary undertakingsprepared to the end of the financial year.

The results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss accountfrom the date of acquisition or up to the date of the disposal. Upon the acquisition of a business, fair values are attributed tothe identifiable net assets acquired. Goodwill arising on acquisitions is dealt with as set out below. Certain undertakings in whichthe Group has a 50% voting shareholding are treated as subsidiary undertakings where the directors are of the opinion that theGroup actually exercises dominant influence over the financial and operating policies of that undertaking. The Group also treatscertain limited partnerships, where there are elements of shared control, as subsidiary undertakings where it has a participatinginterest of more than 50% and those undertakings are managed on a unified basis with other subsidiary undertakings.

Where Group companies are parties to contractual arrangements where all significant matters of operational and financial policyare predetermined, the Group financial statements, in accordance with FRS 9 Associates and joint ventures, include thetransactions, assets, liabilities and cash flows of the Group companies measured according to the terms of the agreementgoverning the contractual arrangements. Where the relevant contractual arrangements involve a Group company entering intotransactions on behalf of another party to the agreement, the adjustments necessary to exclude the effect of those transactionsfrom the Group financial statements are made on consolidation in accordance with FRS 2 Accounting for subsidiary undertakings.

Joint venture undertakingsJoint venture undertakings (joint ventures) are those undertakings over which the Group exercises control jointly with one ormore parties. The Group’s share of the profits less losses of joint ventures is included in the consolidated profit and loss account.The Group’s interest in their net assets is included as a fixed asset investment in the consolidated balance sheet using the grossequity method at an amount representing the Group’s share of the fair value of the net assets at acquisition plus the Group’sshare of post acquisition retained profits or losses. Goodwill arising on the acquisition of joint ventures is dealt with as statedbelow.

The amounts included in the consolidated financial statements in respect of the post acquisition profits of joint ventures aretaken from their latest financial statements prepared up to their respective financial year ends together with managementaccounts for the intervening periods to 31 December 2004.

Associated undertakingsAssociated undertakings (associates) are those undertakings in which the Group has a participating interest in the equity capitaland over which it is able to exercise significant influence.

The Group’s share of the profits less losses of associates is included in the consolidated profit and loss account. The Group’sinterest in their net assets is included as a fixed asset investment in the consolidated balance sheet using the equity method atan amount representing the Group’s share of the fair value of the net assets at acquisition plus the Group’s share of postacquisition retained profits or losses. Goodwill arising on the acquisition of associates is dealt with as stated below.

The amounts included in the consolidated financial statements in respect of the post acquisition profits of associates are takenfrom their latest financial statements prepared up to their respective year ends together with management accounts for theintervening periods to 31 December 2004.


Statement of accounting policies for the year ended 31 December 2004 continued

GoodwillPurchased goodwill arising on the acquisition of a business represents the excess of the acquisition cost over the fair value ofthe identifiable net assets when they were acquired. Subsequent changes to the amount of deferred contingent considerationis adjusted for against goodwill. Any excess of the aggregate of the fair value of the identifiable net assets acquired over thefair value of the acquisition cost is negative goodwill.

Purchased goodwill arising on acquisitions prior to 1 November 1998 was eliminated against reserves on acquisition andnegative goodwill arising on such acquisitions was credited directly to reserves as a matter of accounting policy. On the disposalof a business, any goodwill so treated is included in determining the profit or loss on sale of the business.

Purchased goodwill arising on acquisitions after 1 November 1998 is capitalised in the balance sheet and amortised over theestimated economic life of the goodwill.

Negative goodwill arising on such acquisitions is also capitalised and shown separately in the balance sheet and credited to theprofit and loss account to match the periods in which the acquired non-monetary assets are recovered. Any excess over the non-monetary assets acquired is credited to the profit and loss account in the periods benefited.

Goodwill arising on the acquisition of subsidiaries is shown separately in the balance sheet in intangible assets. Goodwill arisingon the acquisition of joint ventures and associates is included in the carrying amount of the investments.

TurnoverTurnover represents the fair value of goods, excluding value added tax, delivered to or collected by third party customers in theaccounting period.

TaxationCurrent tax, including Irish corporation tax and foreign tax, is provided on the Group’s taxable profits, at amounts expected tobe paid using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.Provision is made at the rates expected to apply when the timing differences reverse. Timing differences are differencesbetween the Group’s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains andlosses in taxable profits in periods different from those in which they are recognised in the financial statements.

A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence,it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of theunderlying timing differences can be deducted.

Tangible fixed assets and depreciationTangible fixed assets, other than investment properties, are stated at historical cost less accumulated depreciation. Depreciationis calculated to write off the cost of tangible fixed assets, other than freehold land and investment properties, on a straight linebasis, by reference to the following estimated useful lives:-

Freehold properties 30 - 50 yearsLeasehold properties Over the lesser of 40 years or the unexpired portion of the leasePlant and equipment 5 - 20 yearsMotor vehicles 5 years

Provision is also made for any impairments of tangible fixed assets.

Investment propertiesInvestment properties are stated at open market value and are not depreciated.

This treatment is a departure from the requirements of the Companies Acts concerning depreciation of fixed assets. However,these properties are not held for consumption but for investment and the directors consider that systematic annual depreciationwould be inappropriate. The accounting policy adopted is therefore necessary for the financial statements to give a true andfair view. Depreciation is only one of the many factors reflected in the annual valuation and, the amount which might otherwisehave been shown, cannot be separately identified or quantified.

Where the valuation indicates a permanent impairment in the value of the property the permanent impairment is charged to theprofit and loss account. All other fluctuations in value are dealt with in a revaluation reserve.


Statement of accounting policies for the year ended 31 December 2004 continued

Profits on sale of propertiesProfits on sale of properties are recognised on the ultimate completion of sale.

Financial fixed assets

CompanyInvestments in subsidiaries, joint ventures and associated undertakings and other investments are stated at cost less anyprovision required for permanent diminutions in value. Income from financial fixed assets is recognised in the profit and lossaccount in the period in which it is receivable.

GroupOther investments are stated at cost less provision required for impairment in value, if any.

StocksStocks are valued at the lower of cost and estimated net realisable value. Cost is determined by reference to invoice price,together with the cost of delivery where appropriate. Net realisable value is the estimated proceeds of sale less all costs to beincurred in marketing, selling and distribution.

Leased assetsAssets held under leasing arrangements that transfer substantially all the risks and rewards of ownership (finance leases) to theGroup are included in the balance sheet as tangible fixed assets at cost less accumulated depreciation and the capital elementof future rentals is treated as a liability. The interest element is charged to the profit and loss account over the period of thefinance lease in proportion to the balance of capital repayments outstanding.

Rentals in respect of all other leases are charged to the profit and loss account as incurred.

PensionsThe Group makes contributions to independently administered pension funds. The regular cost of providing benefits is chargedto operating profit over the service lives of the members of the scheme on the basis of a constant percentage of pensionablepay. Variations from regular costs, arising from periodic valuations of the principal schemes, are allocated to operating profitover the expected remaining service lives of the members.

Foreign currenciesResults of subsidiaries, joint ventures and associates denominated in currencies other than the euro are translated at the averagerates of exchange which applied during the year. Balance sheet figures of such subsidiaries, joint ventures and associates aretranslated at the rates of exchange ruling at the balance sheet date. Exchange differences arising on the restatement of openingnet investments and results for the year to the balance sheet rate are taken directly to retained profits and reflected in thestatement of total recognised gains and losses.

Exchange gains or losses on foreign currency borrowings and long term intercompany loans, used to finance or provide a hedgeagainst Group equity investments in overseas subsidiaries, joint ventures and associates, are offset against retained profits to theextent of the exchange differences arising on the net investments.

Transactions denominated in foreign currencies are recorded at the rates of exchange ruling at the date of the transactions or atcontracted rates where matching contracts exist. All resulting monetary assets and liabilities denominated in foreign currenciesare translated into euro at the rates of exchange ruling at the balance sheet date or at the contracted rate. The resulting profitsor losses are dealt with in the profit and loss account. At the year end the euro/sterling exchange rate was Stg70.80p (2003:Stg70.46p). The average euro/sterling rate during the year was Stg67.92p (2003: Stg69.20p).

Derivative financial instrumentsThe Group is a party to derivative financial instruments (derivatives), primarily to manage its exposure to fluctuations in foreigncurrency exchange rates and interest rates.

Gains and losses on derivative contracts used to hedge foreign exchange exposures arising on future planned transactions arerecognised in the profit and loss account when the hedged transactions occur.

Interest rate swap agreements and similar contracts are used to manage interest rate exposures. Amounts payable or receivablein respect of these derivatives are recognised as adjustments to interest expense over the period of the contracts.

Liquid resourcesLiquid resources include current asset investments in government gilts, commercial paper, term deposits and monies held inescrow.


Group profit and loss account for the year ended 31 December 2004

Notes Pre - Exceptionalexceptional Acquisitions items Total Total

2004 2004 2004 2004 2003€’000 €’000 €’000 €’000 €’000

Turnover including Group share of joint ventures and associates 4 1,969,154 176,581 - 2,145,735 1,924,624Less: Share of joint ventures’ turnover (300,680) (316) - (300,996) (306,131)Less: Share of associates’ turnover (11,862) - - (11,862) (12,692)

Group turnover - continuing operations 1,656,612 176,265 - 1,832,877 1,605,801Cost of sales (1,363,384) (157,422) - (1,520,806) (1,341,962)

Gross profit - continuing operations 293,228 18,843 - 312,071 263,839Net operating expenses - continuing operations 5 (216,202) (14,745) (6,623) (237,570) (204,600)Goodwill amortisation - subsidiaries 14 (4,666) (841) - (5,507) (2,850)

Group operating profit - continuing operations 72,360 3,257 (6,623) 68,994 56,389Share of joint ventures’ goodwill amortisation 16 (1,004) - - (1,004) (1,004)Share of joint ventures’ operating profit 7,870 17 - 7,887 4,319Share of associates’ operating profit 188 - - 188 380

Operating profit - Group and its shareof joint ventures and associates 4 79,414 3,274 (6,623) 76,065 60,084

Exceptional items - GroupProfit on disposal of fixed assets 8 - - 14,114 14,114 7,775Profit on disposal and termination of subsidiaries 8 - - 582 582 511

- - 14,696 14,696 8,286

Share of joint ventures’ exceptional items 8 - - - - (544)

Profit on ordinary activities before interest 79,414 3,274 8,073 90,761 67,826Net interest receivable and income from financial assets - Group 6 6,361 (269) - 6,092 4,594Share of net interest payable - joint ventures 6 (559) - - (559) (611)Share of net interest payable - associates 6 (5) - - (5) (11)

Profit on ordinary activities before taxation 7 85,211 3,005 8,073 96,289 71,798Tax on profit on ordinary activities 9 (14,333) (9,174)

Profit on ordinary activities after taxation 81,956 62,624Minority interests - equity 28 (11,638) (11,309)

Profit for the financial year attributable to Group shareholders 70,318 51,315

Dividends - on equity shares - paid (5,304) (4,808)- proposed (18,100) (14,982)

10 (23,404) (19,790)

Retained profit for the financial year - Group and its share of joint ventures and associates 46,914 31,525

€ cent € centEarnings per ordinary share - basic 11 20.28 14.84

- fully diluted 11 20.06 14.71

Adjusted fully diluted earnings per share 11 19.77 14.95



Other statements for the year ended 31 December 2004

Movements on profit and loss account Notes 2004 2003€’000 €’000

At beginning of year 118,393 105,961Retained profit for the financial year 46,914 31,525Revaluation reserve realised on disposal - 503Goodwill adjustments - (24)Currency translation adjustment (1,462) (19,572)

At end of year 163,845 118,393

Group statement of total recognised gains and losses 2004 2003€’000 €’000

Profit for the financial year 70,318 51,315Currency translation adjustment (1,462) (19,572)

Total recognised gains and losses for the year 68,856 31,743

Note of historical cost profits and lossesThere is no material difference between the historical cost profit on ordinary activities before taxation and the reported profiton ordinary activities before taxation in either year.

Reconciliation of movements in shareholders' funds2004 2003€’000 €’000

Total recognised gains and losses for the year 68,856 31,743Transactions with shareholders:

Dividends on equity shares 10 (23,404) (19,790)Shares issued 24 2,073 585

Goodwill adjustments - (24)

Net increase in shareholders' funds 47,525 12,514

At beginning of year 305,889 293,375

At end of year 353,414 305,889


Group balance sheet for the year ended 31 December 2004

Notes 2004 2003€’000 €’000

Fixed assetsIntangible assets 13 2,313 2,319Goodwill 14 93,513 44,965Tangible assets 15 169,204 130,068Financial assets: 16

Joint ventures:Share of gross assets (including goodwill) 118,264 112,967Share of gross liabilities (including minority interests) (82,927) (87,781)

35,337 25,186Associates 363 389Other investments 18,018 17,742

318,748 220,669

Current assetsStocks 17 36,968 36,739Debtors 18 234,378 190,669Cash at bank and in hand 399,964 359,594

671,310 587,002Creditors: amounts falling due within oneyear (including convertible debt) 19 (420,423) (283,949)

Net current assets 250,887 303,053

Total assets less current liabilities 569,635 523,722

Creditors: amounts falling due after more than one year 20 (149,193) (153,808)

Provisions for liabilities and charges 23 (12,128) (14,467)

4 408,314 355,447

Capital and reservesCalled-up share capital 24 21,426 21,302Share premium 25 96,457 94,508Other reserves 26 71,686 71,686Profit and loss account 27 163,845 118,393

Shareholders’ funds - equity 353,414 305,889

Minority interests (including non-equity interests) 28 54,900 49,558

408,314 355,447



Company balance sheet for the year ended 31 December 2004

Notes 2004 2003€’000 €’000

Fixed assetsTangible assets 15 833 879Financial assets 16 351,307 331,775

352,140 332,654

Current assetsDebtors 18 168,096 132,827Cash at bank and in hand 9,059 12,124

177,155 144,951Creditors: amounts falling due within one year (including convertible debt) 19 (226,537) (166,068)

Net current (liabilities) (49,382) (21,117)

Total assets less current liabilities 302,758 311,537

Creditors: amounts falling due after more than one year 20 (31,383) (60,401)

271,375 251,136

Capital and reservesCalled-up share capital 24 21,426 21,302Share premium 25 96,457 94,508Other reserves 26 71,686 71,686Profit and loss account 27 81,806 63,640

Shareholders' funds - equity 271,375 251,136



Group cash flow statement for the year ended 31 December 2004

Notes 2004 2003€’000 €’000

Cash inflow from operating activities 1 102,225 47,039Dividends received from joint ventures 100 5,967Dividends received from associates 122 210Returns on investments and servicing of finance 2 1,413 3,610Corporation tax paid (15,897) (10,171)Capital expenditure and financial investments 2 (35,709) 3,413Acquisitions and disposals 2 (29,967) (12,487)Equity dividends paid (20,286) (18,414)

Cash inflow before management of liquid resources and financing 2,001 19,167

Financing 2 52,748 (28,217)(Increase) in liquid resources 2 (30,104) (3,256)

Increase/(decrease) in cash for the year 24,645 (12,306)

Reconciliation of net cash flow to movement in net funds

Increase/(decrease) in cash for the year 3 24,645 (12,306)Increase in liquid resources 3 30,104 3,256Net (increase)/decrease in debt 3 (51,007) 28,923

Changes in net funds resulting from cash flows 3,742 19,873

New finance leases 3 (304) (42)Loans acquired with subsidiary undertakings 29 (7,441) -Finance leases acquired with subsidiary undertakings 29 (3,846) -Translation adjustment 3 (963) (14,255)

Movement in net funds in the year (8,812) 5,576Net funds at beginning of year 172,373 166,797

Net funds at end of year 3 163,561 172,373


Notes for the year ended 31 December 2004

1 Reconciliation of operating profit to net cash inflow from operating activities

Notes 2004 2003€’000 €’000

Group operating profit 68,994 56,389Depreciation of tangible fixed assets 15 15,990 14,749Amortisation of goodwill 14 5,507 2,850(Increase) in operating debtors (8,433) (10,126)Increase/(decrease) in operating creditors 17,227 (15,880)Decrease/(increase) in stocks 3,376 (422)Amortisation of grants (436) (521)

Cash inflow from operating activities 102,225 47,039

2 Analysis of cash flows for headings netted in the cash flow statement

2004 2003€’000 €’000

Returns on investments and servicing of financeInterest received and income from financial assets 14,831 15,253Interest paid and similar financial costs (6,867) (8,336)Dividends paid to minority interests 28 (5,430) (3,184)Interest element of finance lease payments (121) (123)Redemption of minority interest shares 28 (1,000) -

Net cash inflow from returns on investments and servicing of finance 1,413 3,610

Capital expenditure and financial investmentsExpenditure on tangible fixed assets (39,711) (9,346)Proceeds on sale of tangible fixed assets 4,038 12,708Purchase of investments 16 (40) (75)Grants received 4 126

Net cash (outflow)/inflow from capital expenditure and financial investments (35,709) 3,413

Acquisitions and disposalsPurchase of subsidiary undertakings 29 (31,011) (5,704)Net cash acquired with subsidiary undertakings 29 947 1,512Overdrafts acquired with subsidiary undertakings 29 (3,833) -Investment in and purchase of joint ventures 16 (4,561) (7,339)Loans repaid by joint ventures 16 3,037 -Payments in respect of deferred consideration (1,355) (1,467)Disposal/termination of subsidiary undertakings 29 582 511Disposal of joint ventures 6,227 -

Net cash (outflow) from acquisitions and disposals (29,967) (12,487)



2 Analysis of cash flows for headings netted in the cash flow statement (continued)

Notes 2004 2003€’000 €’000

Management of liquid resources(Increase) in bank deposits (30,104) (3,256)

FinancingLoans due within one year - drawn down 26,089 6,152

- repaid (3,732) (33,672)Loans due after one year - drawn down 53,845 925

- repaid (23,464) (931)Capital element of finance lease payments (1,731) (1,397)

Net increase/(decrease) in debt 51,007 (28,923)

Issue of share capital (including premium thereon) 24 2,073 585(Repayment to)/investment by minority shareholder in subsidiary undertaking 28 (332) 121

Net cash inflow/(outflow) from financing 52,748 (28,217)

3 Analysis of net funds

AcquisitionsAt 31 and Disposals At 31

December Cash (Excl. cash and Non-cash Translation December2003 Flow overdrafts) Movement Adjustment 2004€’000 €’000 €’000 €’000 €’000 €’000

Cash in hand, at bank 39,748 12,161 - - 334 52,243Overdrafts (19,713) 12,484 - - (65) (7,294)

24,645

Bank deposits 319,846 30,104 - - (2,229) 347,721

Loans due within one year (24,750) (22,357) (394) (61,963) 135 (109,329)Loans due after one year (141,232) (30,381) (7,047) 61,963 881 (115,816)Finance leases (1,526) 1,731 (3,846) (304) (19) (3,964)

(51,007)

Net funds 172,373 3,742 (11,287) (304) (963) 163,561



4 Segmental analysis

Turnover, operating profit and net assets are analysed as follows by business activity and geographical market.

Total - Group including its share of joint ventures and associates

By activityOperating Net Operating Net

Turnover Profit Assets Turnover Profit Assets2004 2004 2004 2003 2003 2003€’000 €’000 €’000 €’000 €’000 €’000

Continuing operationsProduce 2,005,993 83,506 238,421 1,784,649 62,789 164,577Other activities 139,742 5,693 6,332 139,975 4,866 18,497

2,145,735 89,199 244,753 1,924,624 67,655 183,074

Exceptional items (note 5) - (6,623) - - (3,717) -Goodwill amortisation - (6,511) - - (3,854) -

2,145,735 76,065 244,753 1,924,624 60,084 183,074

Net cash 163,561 172,373

408,314 355,447

Total - Group including its share of joint ventures and associates

Geographical Market- by origin

Operating Net Operating NetTurnover Profit Assets Turnover Profit Assets

2004 2004 2004 2003 2003 2003€’000 €’000 €’000 €’000 €’000 €’000

Continuing operationsIreland, UK and other 896,467 21,472 148,047 879,471 18,167 109,327Continental Europe 1,249,268 67,727 96,706 1,045,153 49,488 73,747

2,145,735 89,199 244,753 1,924,624 67,655 183,074

Exceptional items (note 5) - (6,623) - - (3,717) -Goodwill amortisation - (6,511) - - (3,854) -

2,145,735 76,065 244,753 1,924,624 60,084 183,074

Net cash 163,561 172,373

408,314 355,447

The geographical analysis of turnover by destination is not materially different.

A segmental analysis of turnover, operating profit and net assets by geographical area and business activity is not providedseparately for the Group or for its joint ventures and associates as, in the opinion of the directors, the disclosure of suchinformation would be seriously prejudicial to the interests of the Group, its joint ventures and associates.



5 Net operating expenses2004 2003€’000 €’000

Group - continuing operationsDistribution costs 158,490 144,282Administrative expenses 75,471 60,381Other operating (income) (3,014) (3,780)Exceptional items 6,623 3,717

Net operating expenses 237,570 204,600

Exceptional items included in net operating expenses, amounting to a charge of €6,623,000, comprises €2,493,000 (2003:€3,717,000) which relates to external costs and advisory fees incurred on Group acquisition activity and €4,130,000 incurredin connection with the Group’s ongoing legal proceedings against DCC plc and others (note 34).

6 Net interest receivable and income from financial assets 2004 2003€’000 €’000

GroupInterest receivable 14,728 12,755Interest payable on bank loans and overdrafts repayable within five years (7,611) (7,452)Interest payable on other loans (59) (197)Finance lease interest (121) (119)Other interest costs (952) (395)

Net interest receivable 5,985 4,592Income from financial assets - unlisted 105 -Income from financial assets - listed 2 2

6,092 4,594

Joint venturesInterest receivable 422 582Interest payable on bank loans and overdrafts repayable within five years (309) (367)Interest payable on bank loans repayable after more than five years (41) (54)Finance lease interest (631) (761)Other interest payable - (11)

(559) (611)

Associates Interest payable on bank loans and overdrafts repayable within five years (5) (11)



7 Profit on ordinary activities before taxation 2004 2003€’000 €’000

This is arrived at after charging/(crediting):

Depreciation of tangible fixed assets 15,990 14,749

Auditors’ remuneration 1,073 992Auditors’ remuneration for non-audit services 2,242 1,192

Operating lease rentals: Plant and machinery 1,347 1,171Other 5,862 5,779

(Profit) on disposal of tangible fixed assets (2,505) (7,643)

Amortisation of grants (436) (521)

(Profit) on disposal or termination of operations of subsidiary undertakings (582) (511)

(Profit) on disposal or termination of activities of joint venture and associates (11,609) (132)

Amortisation of capitalised goodwill- subsidiaries 5,507 2,850- joint ventures 1,004 1,004

Details of directors’ remuneration, pension entitlements and interests in share options are set out in the compensationcommittee report on pages 35 to 39.

During the year, the Group increased its provisions against its trade and other receivables and similar exposures by €2.3million. In addition, the Group’s share of profit in the year from changes in the financing arrangements relating to the IslandClass ships leased by its Geest joint venture amounted to €1.6 million.



8 Exceptional items 2004 2003€’000 €’000

Profit on disposal of tangible fixed assets 2,525 7,896(Loss) on disposal of tangible fixed assets (20) (253)

Net profit on disposal of tangible fixed assets 2,505 7,643

Profit on disposal of joint ventures 12,744 132(Loss) on disposal of joint ventures (1,135) -

Net profit on disposal of joint ventures 11,609 132

Net profit on disposal of fixed assets 14,114 7,775

Profit on disposal or termination of subsidiary undertakings 853 511(Loss) on disposal or termination of subsidiary undertakings (271) -

Net profit on disposal or termination of subsidiary undertakings 582 511

Share of joint ventures’ exceptional item - (544)

Net exceptional profit 14,696 7,742

During 2004, the Group disposed of a number of properties and other tangible fixed assets, mainly in Ireland, giving rise toa net profit of €2,505,000. In addition, during the first half of the year, the Group sold its 50% interest in a joint ventureundertaking which owned a significant development property in Ireland. The Group realised a net profit on this disposalamounting to €12,744,000 (note 29). During the second half of the year, the Group completed the disposal of its 50%investment in a joint venture undertaking which was engaged in the production of tropical produce, incurring a loss ondisposal of €1,135,000. Towards the end of the year, the Group recovered deferred consideration of €853,000, net of costs,in respect of a subsidiary sold in 2001 (2003: €511,000). Post acquisition, the Group terminated the activities of Everfresh inFinland incurring closure costs of €271,000.

In 2003, the Group disposed of a number of non-core properties in Ireland, the UK and Continental Europe which realiseda net profit before tax of €7,643,000. The Group also disposed of a small joint venture undertaking in the Czech Republicwhich gave rise to a profit on disposal of €132,000. The Group’s share of losses in its Capespan joint venture in 2003 inrelation to the termination of certain activities of its UK subsidiaries amounted to €544,000.

These exceptional items gave rise to a tax charge of €1,315,000 in 2004 (2003: €490,000). Combined with the net tax crediton the exceptional items included in operating profits (note 5), the net tax charge on all exceptional items was €549,000(2003: €490,000).



9 Tax on profit on ordinary activities 2004 2003€’000 €’000

Ireland - corporation tax Current tax on profit for the year 6,272 3,681Adjustment in respect of prior year 352 (18)

6,624 3,663

Overseas - taxCurrent tax on profit for the year 11,652 9,362Adjustment in respect of prior year (2,464) (1,140)

9,188 8,222

Total current tax 15,812 11,885Deferred tax (credit) (2,837) (3,542)

Group tax charge 12,975 8,343Share of tax charge of joint ventures 1,271 688Share of tax charge of associates 87 143

14,333 9,174

Reconciliation of current corporation tax charge

Profit on ordinary activities before tax 96,289 71,798

Profit on ordinary activities multiplied by the standard rate of tax of 12.5% (2003: 12.5%) 12,036 8,975

Effects of:Expenses not deductible for tax purposes 2,403 446Depreciation in excess of capital allowances 284 (6)Unutilised tax losses 89 834Other timing differences 261 31Investment income not taxable (1,040) -Tax effect of profits on associates and joint ventures (940) (369)Difference in tax rates 4,831 3,132Adjustments to prior years (2,112) (1,158)

Current tax charge of the Group for the year 15,812 11,885



9 Tax on profit on ordinary activities (continued)

Factors that may affect future tax charges

In accordance with FRS 19 Deferred Tax, no deferred tax has been provided where taxable gains have been rolled over intoreplacement assets in the UK. Such tax would become payable only if the replacement assets were sold without furtherreplacement. The total amount unprovided in respect of rolled over gains is €2,750,000 (2003: €2,996,000). At present, it isnot envisaged that any tax will become payable in the foreseeable future.

No deferred tax asset is recognised in relation to certain losses incurred by the Group on the grounds that there is insufficientevidence that the assets will be recoverable. In the event that sufficient profits are generated in the relevant jurisdictions inthe future these assets may be recovered. The estimated unrecognised deferred tax asset at 31 December 2004 is€11,774,000 (2003: €8,931,000).

No deferred tax is recognised on the unremitted earning of overseas subsidiaries, associates and joint ventures as nocommitment has been made for the remittance of earnings. As the earnings are continually reinvested by the Group, no taxis expected to be payable on them in the foreseeable future.

No deferred tax asset is recognised in relation to certain capital losses incurred by the Group on the grounds that there isinsufficient evidence that the assets will be recoverable. In the event that plans are put in place for the sale of assets andthe resulting gains will be sheltered by these losses, the assets may be recovered. The estimated unrecognised deferred taxasset at 31 December 2004 is €6,668,000 (2003: €4,493,000).

10 Dividends - on equity shares 2004 2003€’000 €’000

Ordinary shares of €6 cent - equity

Interim dividend €1.53 cent (2003: €1.39 cent) paid on 4 October 2004 5,304 4,808Proposed final dividend €5.20 cent (2003: €4.33 cent) 18,100 14,982

23,404 19,790

At 31 December 2004, the company and subsidiary companies held 9,021,610 (2003: 9,021,610) ordinary shares of €6 cent inFyffes plc. The rights to dividends on these shares have been waived.



11 Earnings per ordinary share

The calculations of earnings per share are based on the following:2004 2003€’000 €’000

Basic

Profit after taxation and minority interests 70,318 51,315

Number Numberof shares of shares

(’000) (’000)

Weighted average number of ordinary shares outstanding 355,738 354,907Deduct weighted average number of own shares acquired (9,022) (9,022)

Weighted average number of ordinary shares for basic earnings per share calculation 346,716 345,885

€ cent € cent

Basic earnings per share 20.28 14.84

Fully diluted €’000 €’000

Profit after taxation and minority interests 70,318 51,315

Number Numberof shares of shares

(’000) (’000)

Weighted average number of ordinary shares outstanding 355,738 354,907Deduct weighted average number of own shares acquired (9,022) (9,022)Weighted average number of share options with dilutive effect 3,782 2,876

Weighted average number of shares for calculation of fully diluted earnings per share 350,498 348,761

€ cent € cent

Fully diluted earnings per share 20.06 14.71



11 Earnings per ordinary share (continued)2004 2003

Earnings Per share Earnings Per shareAdjusted fully diluted earnings per share €’000 € cent €’000 € cent

Basic earnings per share calculation 70,318 20.28 51,315 14.84Adjustments(Profit) on disposal of tangible fixed assets (2,505) (0.72) (7,643) (2.20)(Profit) on disposal of joint ventures (11,609) (3.35) (132) (0.04)(Profit) on disposal/termination of subsidiaries (582) (0.17) (511) (0.15)Goodwill amortisation 6,511 1.88 3,854 1.11Share of joint ventures’ exceptional item - - 544 0.16Minority share of exceptional items - - 497 0.14Exceptional items in operating profit 6,623 1.91 3,717 1.07Tax effect of exceptional items 549 0.16 490 0.14

Impact on earnings of share options with dilutive effect - (0.22) - (0.12)

Adjusted fully diluted earnings per share 69,305 19.77 52,131 14.95

Adjusted fully diluted earnings per share is calculated to adjust for exceptional items, goodwill amortisation and the impactof share options with dilutive effect.

12 Employees

The average weekly number of employees, including executive directors, during the year analysed by category, was asfollows:

2004 2003Number Number

Production 650 397Sales and distribution 1,670 1,704Administration 659 594

2,979 2,695

The aggregate payroll costs of these employees were as follows: €’000 €’000

Wages and salaries 101,798 86,013Social welfare costs 12,713 9,625Other pension costs 5,871 4,035

120,382 99,673

A further 1,300 personnel are employed in the Group’s joint venture and associated undertakings.



13 Intangible assets

GroupTrademark 2004 2003

€’000 €’000

At beginning of year 2,319 2,433Translation adjustment (6) (114)

At end of year 2,313 2,319

This represents the cost of acquiring the worldwide rights to the Fyffes trademark. The trademark is reviewed for impairmentat each balance sheet date. In the opinion of the directors, the value of the trademark is not less than cost and it does nothave a finite useful life.

14 Goodwill 2004€’000

Group

CostAt beginning of year 49,421Acquisitions in year (note 29) 54,020Adjustments to prior year acquisitions (note 29) (963)Exchange adjustment 1,075

At end of year 103,553

AmortisationAt beginning of year 4,456Amortised in year 5,507Exchange adjustment 77


Net book valueAt end of year 93,513

At beginning of year 44,965

Positive goodwill is amortised over the expected useful economic life of the business acquired. This amortisation periodranges from 3 to 20 years, depending on the nature of the business acquired.



15 Tangible assets Freeholdand leasehold Investment Plant and Motor

Group properties properties equipment vehicles Total€’000 €’000 €’000 €’000 €’000

CostAt beginning of year 99,920 - 82,611 7,737 190,268Additions 9,628 20,000 7,390 3,213 40,231Acquisition of business 8,543 - 7,272 196 16,011Disposals (399) - (4,444) (1,961) (6,804)Translation adjustment 446 - 324 296 1,066Reclassification 938 - (938) - -

At end of year 119,076 20,000 92,215 9,481 240,772

DepreciationAt beginning of year 11,015 - 47,263 1,922 60,200Charge for year 3,458 - 9,890 2,642 15,990Disposals (7) - (3,994) (1,270) (5,271)Translation adjustment 347 - 95 207 649Reclassification (136) - 136 - -

At end of year 14,677 - 53,390 3,501 71,568

Net book valueAt end of year 104,399 20,000 38,825 5,980 169,204

At beginning of year 88,905 - 35,348 5,815 130,068

During the year, the Group acquired a number of investment properties which were not in use in the business at 31December 2004. These properties are carried at cost, which is believed to be a fair estimate of current market value at thebalance sheet date, as they were purchased during the course of the year. €2,500,000 of the purchase price has beenallocated to the equipment acquired with these buildings.

The depreciable element of freehold and leasehold properties amounts to €91,433,000 (2003: €77,655,000). The net bookvalue of tangible assets includes an amount of €4,570,000 (2003: €2,340,000) in respect of assets held under finance leases.Depreciation charged during the year on such assets amounted to €1,452,000 (2003: €802,000).

Plant andCompany equipment

€’000CostAt beginning of year 2,029Additions 211


DepreciationAt beginning of year 1,150Charge for year 257


Net book valueAt end of year 833

At beginning of year 879



16 Financial assetsInterest in Interest in

joint ventures associatesGroup €’000 €’000

At beginning of year 25,186 389Translation adjustment (570) -Increased investment in year 2,341 -Loans advanced in year 2,220 -Loans repaid in year (3,037) -Disposals of businesses 4,064 -Retained profits/(losses) less dividends paid 5,957 (26)Goodwill amortised (1,004) -Joint venture undertaking acquired with subsidiary (note 29) 180 -

At end of year 35,337 363

The interest in joint ventures and associates at 31 December 2004 represents the Group’s share of the net assets of thoseundertakings including goodwill arising on acquisitions made since 1 November 1998 and loans advanced by other Groupentities.

The investment in joint ventures as stated above comprises of equity investments of €21,360,000 (2003: €20,451,000) andloans advanced by Group companies to those joint ventures of €13,977,000 (2003: €4,735,000). During the year, an equityinvestment in one joint venture amounting to €14.1 million was redeemed and loaned to the company. Other movementsin loans owed by joint ventures relate mainly to businesses disposed of during the year.

The following additional disclosures are given in relation to the Group’s share of the net assets of its joint ventures;

2004 2003€’000 €’000

Fixed assets 35,542 39,934Current assets 69,325 58,962Liabilities due within one year (55,227) (54,209)Liabilities due after one year (27,700) (33,085)Minority interest - (487)Elimination of fair value of Group share of assets previously owned* (1,611) (1,831)

20,329 9,284

Goodwill arising on acquisition net of amortisation 15,008 15,902

35,337 25,186

*In 2001, the Group disposed of certain produce operations in the UK to Capespan International Holdings Limited. 50% ofthe profit on disposal, €2,198,000, was eliminated on consolidation, being the fair value of the Group’s assets previouslyowned, which is amortised in line with the related goodwill on acquisition in Capespan.

The Group’s share of finance lease obligations included in the financial statements of two of its joint venture companies,Windward Isles Banana Company Holdings (Jersey) Limited and Windward Isles Banana Company (UK) Limited are set outbelow.

2004 2003€’000 €’000

Finance lease obligations:- due within one year 2,525 2,565- due after one year 18,273 22,452

Further details on these obligations are set out in note 30(c)(i).



16 Financial assets (continued)

Investments

Group €’000

At beginning of year 17,742Translation adjustment (10)Additions 40Write-off (169)Arising on acquisition of subsidiary (note 29) 415


Other investments includes the Group’s 10% investment in Capespan Group Holdings Limited, a company registered inSouth Africa. The main activities of Capespan Group Holdings Limited is the procurement and distribution of fresh produce.

In the opinion of the directors, the value of the unlisted investments is not less than the carrying value. During the year, theGroup wrote-off a small 5% holding in a company, realising no gain or loss.

Shares in Shares in subsidiary associates and

undertakings joint ventures Investments TotalCompany €’000 €’000 €’000 €’000

At beginning of year 281,493 32,898 17,384 331,775Additions in year 15,701 4,176 - 19,877Disposals (279) - - (279)Translation adjustment - (66) - (66)

At end of year 296,915 37,008 17,384 351,307

In the opinion of the directors, the value of these investments is not less than the carrying value.

The principal subsidiaries, joint ventures and associates are set out on pages 83 to 85.

17 Stocks2004 2003

Group €’000 €’000

Goods for resale 35,044 35,857Consumable stores 1,924 882

36,968 36,739

The replacement cost of stocks does not differ materially from the amount stated above.



18 Debtors2004 2003

Group €’000 €’000

Due within one year:Trade debtors 200,654 155,526Other debtors 17,367 17,934Prepayments and accrued income 8,856 5,504Amounts due from joint ventures (trading) 3,125 3,088Amounts due from joint ventures (non-trading) 1,797 6,184

231,799 188,236Due after one year:Other debtors 2,552 2,395Amounts due from joint ventures (non-trading) 27 38

234,378 190,669

Company

Amounts due from subsidiary undertakings 167,266 130,775Amounts due from joint ventures (non-trading) 520 1,901Other debtors 310 151

168,096 132,827

19 Creditors: amounts falling due within one year2004 2003

Group €’000 €’000

Trade creditors 166,367 126,840Bank loans and overdrafts (note 21) 116,623 44,463Accruals and deferred income 43,855 31,108Other creditors 27,002 22,141Corporation tax 32,510 30,945Proposed dividends 18,100 14,982Deferred acquisition consideration (note 20) 2,816 1,670Obligations under finance leases (note 22) 1,807 947Irish income tax and social welfare 1,586 1,514Irish value added tax 1,196 1,270Other tax 5,269 3,538Grants 455 704Amounts due to joint ventures (trading) 2,756 -Amounts due to joint ventures (non-trading) 81 3,527Convertible redeemable loan notes - 300

420,423 283,949



19 Creditors: amounts falling due within one year (continued)2004 2003€’000 €’000

Company

Bank loans and overdrafts (note 21) 38,330 17,799Amounts due to subsidiary undertakings 159,578 128,413Proposed dividends 18,100 14,982Accruals and deferred income 10,281 2,738Corporation tax 3 3Other creditors 245 90Amounts due to joint ventures (non-trading) - 1,743Convertible redeemable loan notes - 300

226,537 166,068

20 Creditors: amounts falling due after more than one year2004 2003

Group €’000 €’000

Bank loans (note 21) 115,816 141,232Deferred acquisition consideration 28,507 8,133Obligations under finance leases (note 22) 2,157 579Other creditors 620 1,588Grants 2,093 2,276

149,193 153,808

Company

Bank loans (note 21) 31,383 60,401

Total deferred acquisition consideration, due within and after more than one year, amounts to €31,323,000 (2003: €9,803,000)and represents full provision for the amounts expected to be payable. The increase during the year in this liability includesthe impact of the acquisition of the Everfresh Group in Sweden (note 29), together with revisions to previous estimates inrespect of other transactions, payments, currency movements and the discounting charge. Deferred acquisitionconsideration and other creditors are due entirely within five years.



21 Bank loans and overdrafts2004 2003

Group €’000 €’000

Repayable:Within one year 116,623 44,463After one year but within two years 48,641 68,685After two years but within five years 56,852 69,733After five years 10,323 2,814

232,439 185,695

At 31 December 2004, bank loans and overdrafts of €19,962,000 (2003: €11,786,000) were secured on the assets of subsidiaryundertakings.

Company

Repayable:Within one year 38,330 17,799After one year but within two years 31,383 30,025After two years but within five years - 30,376

69,713 78,200

22 Lease obligations

Finance leases 2004 2003€’000 €’000

Group

Due:Within one year 1,807 947After one year but within five years 2,157 579

3,964 1,526

Operating leases

The annual non-cancellable commitments under operating leases are as follows:

Land & buildings Other2004 2003 2004 2003

Group €’000 €’000 €’000 €’000

Operating leases which expire:Within one year 1,761 1,916 752 586After one year but within five years 1,284 1,648 790 842After five years 2,707 1,920 - -

5,752 5,484 1,542 1,428



23 Provisions for liabilities and chargesDeferredtaxation

Group €’000

At beginning of year 14,467(Credited) in year (note 9) (2,837)Acquired with subsidiary undertaking (note 29) 1,525Released on disposal of joint venture (note 29) (1,053)Translation adjustment 26


During the year, the Group disposed of its interest in a joint venture property company and included in the profit on thisdisposal is a deferred tax release of €1,053,000.

Deferred taxation

Deferred taxation liabilities represents provision for timing differences as follows:2004 2003

Group €’000 €’000

Accelerated capital allowances 2,598 2,441Other timing differences 10,087 12,757

12,685 15,198

Group

Deferred tax assets 557 731Deferred tax liabilities (12,685) (15,198)

Net deferred tax liabilities (12,128) (14,467)

Further details in respect of the Group’s deferred tax assets and liabilities are set out in note 9.



24 Called-up share capitalNumber

of shares 2004 2003Group and company (‘000) €’000 €’000

Authorised

Ordinary shares of €6 cent each 750,000 45,000 30,000

Allotted, called-up and fully paid

Ordinary shares of €6 cent each 357,106 21,426 21,302

Movements during the year Numberof shares

Ordinary shares of €6 cent each (‘000) €’000

At beginning of year 355,028 21,302Share options exercised 2,078 124

At end of year 357,106 21,426

On 31 May 2004, shareholders approved an increase in the authorised share capital of the company to €45,000,000,comprising 750,000,000 ordinary shares of €6 cent each.

At 31 December 2004, the total number of shares held by the company and a subsidiary company in Fyffes plc amounted to9,021,610 (2003: 9,021,610) ordinary shares of €6 cent each. These shares have been included in the total number of ordinaryshares of 357,106,000 at 31 December 2004 above. The rights to dividends on these shares have been waived and they arenot included in the calculation of earnings per share. All of these shares have been delisted by the company.

Under the company’s share option scheme, options have been granted to employees to purchase ordinary shares in thecompany at prices ranging from €0.85 to €2.70. The aggregate nominal value of the options granted but not exercised shallnot exceed 5% of the nominal value of the total allotted ordinary share capital of the company.

During the year, 2,078,000 options were exercised for a total consideration of €2,073,000 (net of expenses). During the year,options were granted over 2,230,000 shares and 321,000 options lapsed. At 31 December 2004, options over 13,200,000(2003: 13,369,000) ordinary shares had not yet been exercised.

25 Share premium account

Group and company 2004 2003€’000 €’000

At beginning of year 94,508 93,956Share options exercised 1,949 552

At end of year 96,457 94,508



26 Other capital reservesCapital Capital

redemption conversionreserve reserve

fund fund Total€’000 €’000 €’000

Group and company

At beginning and end of year 70,652 1,034 71,686

27 Profit and loss account

The profit attributable to Group shareholders dealt with in the financial statements of the holding company for the yearended 31 December 2004 was €41,582,000 (2003: €27,133,000). As permitted by Section 3(2) of the Companies(Amendment) Act, 1986, the profit and loss account of the company has not been separately presented in these financialstatements.

The Group's share of the post acquisition retained profits of associates and joint ventures at 31 December 2004 amountedto €30,814,000 (2003: €24,377,000).

Currency translation adjustments of €29,000 debit (2003: €3,399,000 credit) arising on the retranslation of foreign currencyborrowings have been netted against the currency movements arising on the retranslation of the net assets of overseassubsidiaries, joint ventures and associates.

The Group profit and loss account reserves of €163,845,000 (2003: €118,393,000) are stated after the deduction of€16,582,000 (2003: €16,582,000) relating to ordinary €6 cent shares in Fyffes plc held by the company and by a subsidiarycompany.

The cumulative amount of goodwill resulting from acquisitions and disposals, which has been set against revenue reservesat 31 December 2004, amounts to €216,891,000 (2003: €216,891,000).

28 Minority interestsEquity Non-equity Total€’000 €’000 €’000

Group

At beginning of year 49,553 5 49,558Share of profits for the year 11,638 - 11,638Arising on acquisition of minority interest (note 29) 195 - 195Dividends paid in year (5,430) - (5,430)Redemption of minority interest shares (1,000) - (1,000)Investment repaid to minority shareholders (332) - (332)Exchange difference 271 - 271

At end of year 54,895 5 54,900



29 Acquisitions, disposals and terminations

(a) Subsidiary undertakings

A summary of the effect of acquisitions during the year is as follows:

RevisionsBook value at Fair value Fair value to prior

acquisition adjustments to the Group acquisitions Total€’000 €’000 €’000 €’000 €’000

Tangible assets (note 15) 15,646 365 16,011 - 16,011Investment in joint ventures (note 16) 180 - 180 - 180Trade investments (note 16) 415 - 415 - 415Stock 3,525 - 3,525 - 3,525Debtors 35,497 (608) 34,889 - 34,889Creditors (38,712) - (38,712) 681 (38,031)Corporation tax (1,514) - (1,514) - (1,514)Deferred tax (note 23) (1,525) - (1,525) - (1,525)Minority interests (note 28) (148) - (148) (47) (195)

Net assets acquired 13,364 (243) 13,121 634 13,755

Goodwill capitalised (note 14) 53,777 243 54,020 (963) 53,057

67,141 - 67,141 (329) 66,812

Discharged by:Cash including fees 30,689 - 30,689 322 31,011Cash and cash equivalents acquired (947) - (947) - (947)Overdrafts acquired 3,833 - 3,833 - 3,833Bank loans acquired 7,441 - 7,441 - 7,441Finance lease liabilities acquired 3,846 - 3,846 - 3,846Deferred consideration 22,279 - 22,279 (651) 21,628

67,141 - 67,141 (329) 66,812



29 Acquisitions, disposals and terminations (continued)

(a) Subsidiary undertakings (continued)

During the first half of the year, the Group acquired the Everfresh Group which has its headquarters in Helsingborg inSweden. The Group paid €29,400,000 for an initial 60% of Everfresh and has entered a binding agreement to complete theacquisition of the remaining 40% in May 2007, the terms of which give Fyffes a beneficial entitlement to all of the earningsof Everfresh from the date of acquisition. Accordingly, the Group is accounting for 100% of the Everfresh activities from thedate of acquisition and has accrued an estimate of the deferred consideration which may become payable in 2007 (note 20).The consideration for the remaining shares is based on a multiple of average profits in the three years ending 31 December2006, less the initial payment, subject to a maximum remaining payment of €49,600,000. The book value of net liabilitiesacquired amounted to €1,123,000, excluding €5,999,000 of goodwill in Everfresh. Fair value adjustments have been madeto the assets and liabilities acquired of €608,000, principally in respect of the recoverability of certain receivables. Goodwillamounting to €53,405,000 arose on this acquisition.

The Group also completed the acquisition of a number of other smaller businesses, mainly in the UK, during the year givingrise to goodwill of €615,000. In the case one of these acquisitions, property acquired has been restated to fair value givingrise to an increase in the carrying value of that asset of €365,000.

During the year, the Group reassessed its estimate of deferred consideration payable in respect of acquisitions in previousyears. Combined with a number of minor adjustments to the assets and liabilities acquired, the net impact of these revisionswas to reduce goodwill by €963,000.

Towards the end of the year, the Group recovered of €853,000 (net of costs) in final settlement of amounts owed in respectof a subsidiary disposed of in 2001. This amount has been treated as an exceptional item (note 8).

The Group did not dispose of any subsidiaries in 2004. Following the acquisition of the Everfresh Group, a number of itsactivities have been terminated and costs amounting to €271,000 in this regard have been treated as exceptional items (note8).

(b) Joint venture undertakings

During the first half of the year, the Group, together with its partner, sold a joint venture undertaking which owned asignificant development property in the North East of Ireland. Fyffes had, a number of years ago, sold land to this jointventure, but in accordance with FRS 9 Joint Ventures and Associates, did not account for its profit of €4,964,000 on thistransaction at that time. Consequently, on disposal of the joint venture to a third party in 2004, this profit was realised,contributing to a total profit on disposal for the Group amounting to €12,744,000 (note 8). This includes the prior year profitreleased and the Group’s share of proceeds in the current year of €7,780,000, before a contribution to the purchaser for taxamounting to €1,053,000.

Towards the end of the year, the Group sold its 50% interest in a joint venture undertaking engaged in the production oftropical produce in Central America, incurring a loss on disposal amounting to €1,135,000 (note 8).



30 Commitments and contingencies

(a) Capital commitmentsThe directors have authorised capital expenditure of €10,000,000 at the balance sheet date (2003: €9,200,000). Capitalexpenditure contracted for at 31 December 2004 amounted to €529,000 (2003: €1,090,000).

(b) Subsidiary undertakingsIn order to avail of the exemption under Section 17 of the Companies (Amendment) Act, 1986 the holding company hasguaranteed the liabilities of certain of its subsidiary undertakings registered in Ireland. As a result, the following subsidiaryundertakings have been exempted from the provisions of Section 7 of the Companies (Amendment) Act, 1986:

Allegro Limited Helston Securities LimitedBolanpass Limited Humbolt LimitedBanana Importers of Ireland Limited Huntroyde LimitedBernard Dempsey & Co. Limited Jack Dolan LimitedBrinton Investments Limited J. Lightfoot & Son LimitedRichard Brierley & Company Limited Kinsealy Farms LimitedEbbtide Limited Lanpak Fruit LimitedElders & Fyffes Investments McCann Nurseries LimitedEverfresh Limited Motcombe LimitedFiacla Limited Melvich LimitedFII (Market) Limited Millerton LimitedFyffes Bananas North America Limited Munster Fruit & Produce LimitedFyffes Fruit Procurement Limited Negev LimitedFyffes Group Procurement Limited Optiplex LimitedFyffes Group Ireland Limited Southern Fruit Suppliers (Waterford) LimitedFyffes Banana Processing Limited Swords Business Park LimitedFyffes Personnel Services Limited Swords Property Investments LimitedFyffes Secretarial Services Limited Tropical Fruit Company (Cork) LimitedFyffes Investment Holdings Tropical Fruit Company (Ireland) LimitedGillespie Distribution Limited Uniplumo (Ireland) LimitedGivejoy Limited Waddel LimitedGreen Ace Producer Group Limited

The holding company has guaranteed the borrowings of subsidiary undertakings in the amount of €139,404,000 (2003:€92,337,000).



30 Commitments and contingencies (continued)

(c) Guarantees(i) Fyffes plc, together with the governments of the Windward Islands, has guaranteed the bank borrowings of WindwardIsland Banana Development and Export Company (Wibdeco) which were used to fund Wibdeco’s equity investment in thejoint venture companies set up by Fyffes plc and Wibdeco to acquire the banana business of Geest plc in January 1996. At31 December 2004, the amount of these borrowings was €3,531,000 (2003: €4,573,000).

Fyffes plc and Wibdeco have jointly and severally indemnified Geest plc against any one of the joint venture companiesfailing to meet its obligations under the bareboat charter agreements relating to the two Island Class ships, which were takenover under the acquisition. The total amount due under the bareboat charter agreements at 31 December 2004 wasUS$56,526,000 (€41,585,000) (2003: US$63,057,000, €49,994,000), 50% of which has been accounted for as part of the Group’sequity investment in the joint venture in these financial statements. Under the terms of the agreement between Geest plcand the financiers of these ships, they can be handed back to the financiers in 2009, at which point the obligation of the jointventure companies under the bareboat charter agreements will cease, as will Fyffes’ and Wibdeco’s obligations under theirindemnity to Geest plc. The two Island Class ships are currently bareboat chartered to a third party for the remainder of thefinance lease term.

(ii) Fyffes plc has issued counter indemnities in the amount of €501,000 (2003: €1,780,000) as security for bank guaranteesissued in respect of deferred consideration which may become payable in connection with the acquisition of certainsubsidiary undertakings and certain loan notes issued in respect of previous acquisitions.

(iii) Fyffes plc, together with its partner, Lagan Developments (Holdings) Limited, have each issued guarantees amounting to€2,100,000 in respect of bank borowings by its joint venture undertaking which is involved in developing a property in Navan,Ireland.

(d) ContingenciesFrom time to time, the Group is involved in other claims and legal actions, which arise in the normal course of business.Based on information currently available to the company, and legal advice, the directors believe such litigation will not,individually or in aggregate, have a material adverse effect on the financial statements and that the Group is adequatelypositioned to deal with the outcome of any such litigation.



31 PensionsThe Group has continued to account for its pension obligations in accordance with SSAP 24 Accounting for pension costsand the disclosures given in (a) below are those required by that standard. FRS 17 Retirement benefits will not be mandatoryfor the Group until the year ending 31 December 2005. Prior to this, phased transitional disclosures are required by thestandard and, to the extent not given in (a), these are set out below in (b).

(a) SSAP 24 disclosuresThe Group operates a number of externally funded defined benefit and defined contribution pension schemes. Theschemes are set up under trusts and the assets of the schemes are therefore held separately from those of the Group.

The pension cost charged to the profit and loss account for the year in respect of the Group’s defined benefit schemes was€3,597,000 (2003: €2,764,000) and €2,274,000 (2003: €1,271,000) in respect of the Group’s defined contribution schemes.Contributions to the defined benefit schemes are made in accordance with the actuaries’ recommended contribution ratesand are based on the most recent actuarial valuations. Full actuarial valuations were carried out on the main Irish pensionscheme at 31 December 2001 and on the UK pension scheme at 31 October 2003. The actuarial methods used were theattained age method and the projected unit credit method.

The assumptions which most significantly affect the incidence of pension costs are those relating to the rate of return on theinvestments of the schemes and the rate of increase in salaries and pensions. For the main Group schemes, the rate by whichthe long-term investment return is assumed to exceed the rate of increase in salaries is 1.5% per annum. In addition,appropriate allowance has been made for pension increases in accordance with the rules of the schemes.

At the dates of the most recent actuarial valuations, the market value of these schemes’ assets was €139,637,000 and thisamount was more than sufficient to meet the liability for benefits, under the valuation methods, for service to the valuationdate and based on salaries projected to retirement or earlier exit. The actuarial reports are not available for publicinspection. However, the results of valuations are advised to members of the schemes.

(b) FRS 17 Retirement benefitsFRS 17 Retirement benefits (‘FRS17’) will change fundamentally the calculation and reporting of the cost of retirementbenefits. The disclosures below relate to all of the Group’s defined benefit retirement plans in Ireland, the UK andContinental Europe.

The previous full actuarial valuations of these schemes, for the purposes of these disclosures, were updated to 31 December2004. All calculations were carried out by independent actuaries. The principal assumptions used by the actuaries as at 31December 2004 were:

ContinentalIreland UK Europe

2004 2003 2002 2004 2003 2002 2004 2003 2002

Rate of increase in salaries 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%Rate of increase in pensions 2.0% 2.0% 2.0% 2.7% 2.0% 2.0% 2.0% 2.0% 2.0%Inflation rate 2.0% 2.0% 2.0% 2.7% 2.0% 2.0% 2.0% 2.0% 2.0%Discount rate 4.9% 5.5% 5.5% 5.3% 5.5% 5.75% 4.9% 5.5% 5.5%

The long term expected rates of return as at 31 December 2004 were:Continental

Ireland UK Europe*2004 2003 2002 2004 2003 2002 2004 2003 2002

Equities 7.75% 8.25% 8.5% 7.55% 8.0% 7.5% n/a n/a n/aBonds 4.0% 5.0% 4.75% 4.55% 4.75% 4.5% n/a n/a n/aProperty 6.0% 7.0% 6.0% 6.55% 5.5% 5.5% n/a n/a n/aOther 2.0% 3.0% 3.0% 4.8% 4.0% 4.0% 4.0% 4.0% 4.0%

* The assets of the scheme in Continental Europe comprise of units in a fund managed by an insurance company and itwould be not be possible to analyse the units owned in terms of equities, bonds, properties etc.


31 Pensions (continued)

(b) FRS 17 Retirement benefits (continued)

The market value of the assets in the pension schemes were:

Ireland UK

€’000 €’000 €’000 €’000 €’000 €’0002004 2003 2002 2004 2003 2002

Equities 41,685 33,781 29,501 62,825 60,229 56,661Bonds 9,048 10,373 9,339 24,788 22,482 21,527Property 4,425 4,826 5,698 5,339 4,815 4,941Other 2,144 2,126 504 4,527 4,144 3,685

Total market value of scheme assets 57,302 51,106 45,042 97,479 91,670 86,814Actuarial value ofscheme liabilities (61,137) (48,195) (45,391) (118,999) (109,415) (104,141)

(Deficit)/surplus (3,835) 2,911 (349) (21,520) (17,745) (17,327)Deferred tax asset/(liability) 479 (364) 44 6,456 5,323 5,198

Net pension (liabilities)/assets (3,356) 2,547 (305) (15,064) (12,422) (12,129)

Continental Europe Total

€’000 €’000 €’000 €’000 €’000 €’0002004 2003 2002 2004 2003 2002

Equities - - - 104,510 94,010 86,162Bonds - - - 33,836 32,855 30,866Property - - - 9,764 9,641 10,639Other 7,720 7,365 7,061 14,391 13,635 11,250

Total market value of scheme assets 7,720 7,365 7,061 162,501 150,141 138,917Actuarial value ofscheme liabilities (8,127) (6,848) (6,619) (188,263) (164,458) (156,151)

(Deficit)/surplus (407) 517 442 (25,762) (14,317) (17,234)Deferred tax asset/(liability) 142 (178) (155) 7,077 4,781 5,087

Net pension (liabilities)/assets (265) 339 287 (18,685) (9,536) (12,147)






If FRS 17 had been adopted in the primary financial statements, the following are the amounts that would have been includedin the profit and loss account and the statement of total recognised gains and losses:

ContinentalIreland UK Europe Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’0002004 2003 2004 2003 2004 2003 2004 2003

Included in payroll costs:Current/past service costs (2,234) (1,930) (2,496) (2,623) (217) (214) (4,947) (4,767)

Included in finance costs:Expected return on pension fund assets 3,666 3,331 6,468 5,283 295 282 10,429 8,896Interest on pension fund liabilities (2,709) (2,520) (6,159) (5,610) (377) (356) (9,245) (8,486)

Net finance income/(cost) 957 811 309 (327) (82) (74) 1,184 410

Included in statement of totalrecognised gains and losses:Difference between expected and actual return on assets 1,020 2,150 2,439 7,539 (157) - 3,302 9,689Experience gains and losses on scheme liabilities (1,680) 161 8,185 - 53 50 6,558 211Effect of changes in actuarial assumptions (6,822) 552 (13,434) (7,055) (755) - (21,011) (6,503)

Net included in statement of total recognised gains and losses (7,482) 2,863 (2,810) 484 (859) 50 (11,151) 3,397





Analysis of the movement in fund during the year

ContinentalIreland UK Europe Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’0002004 2003 2004 2003 2004 2003 2004 2003

Net surplus in pension schemesat beginning of year before deferred tax 2,911 (349) (17,745) (17,327) 517 442 (14,317) (17,234)

Movements in yearCurrent service cost (2,097) (1,930) (2,496) (2,623) (217) (214) (4,810) (4,767)Past service cost (137) - - - - - (137) -Contributions paid 2,013 1,516 1,091 668 234 313 3,338 2,497Net finance income/(expense) 957 811 309 (327) (82) (74) 1,184 410Actuarial (losses)/gains (7,482) 2,863 (2,810) 484 (859) 50 (11,151) 3,397Exchange movement - - 131 1,380 - - 131 1,380

Net (deficit)/surplus in pensionschemes at end of year (3,835) 2,911 (21,520) (17,745) (407) 517 (25,762) (14,317)

Deferred tax asset/(liability) at end of year 479 (364) 6,456 5,323 142 (178) 7,077 4,781

Net pension (liability)/asset at end of year (3,356) 2,547 (15,064) (12,422) (265) 339 (18,685) (9,536)

During the year, the extent of losses on pension assets in the UK in the prior years was examined and these losses have beenreduced by additional contributions to the fund from interested parties other than Group companies.

If FRS 17 had been adopted in the primary financial statements, the Group’s net assets and profit and loss reserve at 31December 2004 would be as follows:

Group 2004 2003 2002€’000 €’000 €’000

Net assetsNet assets excluding pension (liability) 408,314 355,447 335,539Pension (liability) (18,685) (9,536) (12,147)

Net assets including pension assets and liabilities 389,629 345,911 323,392

ReservesProfit and loss reserve excluding pension (liability) 163,845 118,393 105,961Pension (liability) (18,685) (9,536) (12,147)

Profit and loss reserve including pension assets and liabilities 145,160 108,857 93,814



History of actuarial gains and losses

Ireland UK€’000 €’000 €’000 €’000 €’000 €’0002004 2003 2002 2004 2003 2002

Difference between expected and actual returns on assets 1,020 2,150 (13,015) 2,439 7,539 (24,015)

Experience gains and losses on schemes’ liabilities (1,680) 161 161 8,185 - -

Total actuarial gains and losses (7,482) 2,863 (17,208) (2,810) 484 (21,393)

Continental Europe Total€’000 €’000 €’000 €’000 €’000 €’0002004 2003 2002 2004 2003 2002

Difference between expected and actual returns on assets (157) - 18 3,302 9,689 (37,012)

Expressed as a percentage ofthe schemes’ assets 2.0% 6.5% (26.6%)

Experience gains and losses on schemes’ liabilities 53 50 262 6,558 211 423

Expressed as a percentage of scheme’s liabilities (3.5%) (0.1%) (0.3%)

Total actuarial gains and losses (859) 50 (364) (11,151) 3,397 (38,965)

Expressed as a percentage ofscheme’s liabilities 5.9% (2.1%) 25.0%




32 Related party transactions

Transactions with joint ventures and associates

The Group trades in the normal course of its business with its joint ventures and associates. A summary of transactions withthese related parties during the year ended 31 December 2004 is as follows:-

Sales Sales Purchases Purchases 2004 2003 2004 2003€’000 €’000 €’000 €’000

Joint ventures:Windward Isles Banana Company Holdings (Jersey) Ltd - 58 2,746 2,115Windward Isles Banana Company (UK) Limited 41 223 2,841 6,176Capespan International Holdings Ltd 14,721 16,001 11,786 13,089Other 20,784 25,502 5,810 3,006

Associates 5,483 2,818 12,106 8,501

41,029 44,602 35,289 32,887

The amounts due from and to joint ventures and associates at the year end are disclosed, in aggregate, in notes 18 and 19respectively.

CoplacaCoplaca is a co-operative of banana growers in the Canary Islands and owns 50% of the share capital of EurobananCanariasSA, the other 50% being owned by the Group. During the year, EurobananCanarias SA purchased goods and services fromCoplaca in the normal course of its business which are not material in relation to the sales and purchases of the Group. At31 December 2004, the net amount due to Coplaca by EurobananCanarias SA was €7,726,000 (2003: €6,505,000).

WibdecoWindward Isles Banana Development and Export Company (UK) Limited (Wibdeco) owns 50% of the Geest joint venture, theother 50% being owned by the Group. Fyffes Group Limited previously provided banana ripening and marketing services toWibdeco on an arms length basis. The total income from these services in the year was €Nil (2003: €9,237,000), whichincludes administration fees of €Nil (2003: €487,000).

Details of guarantees issued by the Group on behalf of Wibdeco are set out in note 30 (c) (i).

Bananas do Nordeste S.A. (Banesa)During the year, the Group entered into a long term supply agreement with its joint venture company, Banesa. Purchases bythe Group from Banesa are not material in relation to the overall purchases of the Group.

Pineapple Trading CorporationUnder the terms of a long term supply contract between Fyffes and its joint venture company, Pineapple TradingCorporation, all production from that joint venture that meets the Group’s quality standards shall be sold exclusively to Fyffesfor the duration of the agreement. During the year, Fyffes purchased goods from Pineapple Trading Corporation which arenot material in relation to the overall purchases of the Group.



33 Derivative and other financial instruments

The Group’s treasury activities are undertaken to finance its operations and reduce the various financial risks arising fromthose operations. The policies under which these activities are managed are set out on page 22. The numerical disclosuresrelated to the Group’s financial assets, liabilities and derivative instruments which may be entered into in connection with themanagement of these assets and liabilities are set out below under the relevant risk category or activity.

(a) Interest rate risk profile 2004 2004 2004 2003

Financial FinancialLiabilities Assets Net Net

€’000 €’000 €’000 €’000Denominated in euroInterest rate fixed (6,219) - (6,219) (4,213)Interest rate floating (95,400) 107,793 12,393 1,702Interest free (2,683) 18,703 16,020 16,843

Total (104,302) 126,496 22,194 14,332

Denominated in SterlingInterest rate fixed - - - (20)Interest rate floating (64,109) 272,019 207,910 191,271Interest free (141) 387 246 122

Total (64,250) 272,406 208,156 191,373

Denominated in US DollarsInterest rate fixed - - - -Interest rate floating (14,615) 887 (13,728) (8,084)Interest free - 592 592 566

Total (14,615) 1,479 (13,136) (7,518)

Denominated in other currenciesInterest rate fixed (197) - (197) (15,467)Interest rate floating (55,752) 18,517 (37,235) 3,745Interest free (28,507) 1,663 (26,844) (5,914)

Total (84,456) 20,180 (64,276) (17,636)

Grand Total (267,623) 420,561 152,938 180,551

In accordance with the definitions set out in FRS 13 Derivatives and other financial instruments: disclosures, financial liabilitiescomprise bank loans and overdrafts, finance lease liabilities and sundry creditors falling due after more than one year,including deferred acquisition consideration and government grants. Financial assets comprise cash at bank and bankdeposits together with trade investments and sundry debtors due after more than one year. Sundry debtors and creditorsfalling due within one year are not included.



33 Derivative and other financial instruments (continued)

(a) Interest rate risk profile (continued)

The Group’s floating rate financial assets and liabilities primarily bear interest rates based on EURIBOR rates fixed for periodsranging from one to twelve months and LIBOR rates ranging from one to twelve months.

The weighted average interest rates of fixed rate instruments are as follows:Liabilities

Euro 4.38%Other currencies 3.40%

The weighted average period for which these rates are fixed is as follows:

LiabilitiesEuro 2.63 yearsOther currencies 0.42 years

The non interest bearing financial assets and liabilities primarily comprise trade investments and certain sundry debtors andcreditors, due after more than one year, including, in particular, deferred acquisition consideration.

.The maturity profile of the Group’s financial liabilities, (consisting primarily of bank loans and overdrafts) is as follows:

2004 2003€’000 €’000

Within one year (or on demand) 118,430 45,409Between one and two years 55,090 72,484Between two and five years 82,798 77,789After five years 11,305 3,536

Total 267,623 199,218

At 31 December 2004, the Group had available undrawn committed banking facilities amounting to €69.3 million (2003: €70.1million), of which €65.8 million expire within one year, €2.9 million expire between one and two years and €0.6 million expirebetween two and five years.

(b) Currency analysis

The balance sheets of various subsidiary companies include monetary assets and liabilities denominated in currencies otherthan the operating currencies of those subsidiaries. After taking into account any currency hedges in place, these balancesheet currencies exposures at 31 December 2004 can be summarised as follows:

Currency of denomination of asset/liability2003

EUR GBP USD Other Total Total€’000 €’000 €‘000 €’000 €’000 €’000

Monetary assets 4,282 13,473 24,578 1,905 44,238 43,724Monetary liabilities (13,901) (10,454) (19,283) (5,806) (49,444) (44,614)

Net (9,619) 3,019 5,295 (3,901) (5,206) (890)



33 Derivative and other financial instruments (continued)

(c) Hedging activities

The Group enters a variety of derivative instruments on a non-speculative basis in order to manage its currency and interestrate risks. These instruments are predominately forward purchases and sales of foreign currency. Certain of these derivativeinstruments are accounted for under hedge accounting whereby changes in the fair value of these instruments are notrecognised in the financial statements until the hedged item is recognised. Unrecognised gains and losses on theinstruments can be summarised as follows:

Total netgains/

Gains Losses (losses)€’000 €’000 €’000

Unrecognised gains/(losses) on hedges at beginning of year 60 (49) 11Less (gains)/losses arising in previous years which were recognised in current year (58) 40 (18)

Gains/(losses) relating to previous years which were not recognised in the current year 2 (9) (7)

Gains/(losses) arising in the current year which were not recognised in the current year 43 (1,698) (1,655)

Unrecognised gains/(losses) on hedges at end of year 45 (1,707) (1,662)

Of which:Gains/(losses) expected to be recognised in the next financial year 45 (1,707) (1,662)

(d) Fair value adjustments

With the exception of the unrecognised gains/losses on hedges in note 33(c) above, the fair values of the Group’s financialassets and liabilities are not considered to be materially different to their book value.

34 Litigation

The trial of the Group’s legal action against DCC plc and others in relation to the sale of 31.2 million Fyffes’ shares in February2000 commenced in the High Court in Dublin on 2 December 2004. These proceedings are ongoing and are expected tocontinue for a number of months. Costs incurred in connection with these legal proceedings are set out in note 5.

35 Comparative amounts

Comparative amounts have been regrouped, where necessary, on the same basis as those for the current year.

36 Approval of financial statements

The directors approved the financial statements on 2 March 2005.


Principal subsidiaries, joint ventures and associatesfor the year ended 31 December 2004

The principal areas of operation are the countries of incorporation.

Subsidiaries Principal activity Group share %

Incorporated in Ireland

Fyffes Group Ireland Limited (1)* Fresh produce distributor 100Banana Importers of Ireland Limited (1)* Fresh produce distributor 95 Allegro Limited (3)* Consumer goods distributor 90 Fyffes International Holdings Limited (1)* Investment holding company 100Uniplumo (Ireland) Limited (3)* Cultivation and distribution

of houseplants 100Hugh McNulty (Wholesale) Limited (2)* Fresh produce distributor 50 (i)Fyffes International (1) Fresh produce procurement 100Fyffes Fruit Procurement Limited (1) Fresh produce procurement 76

The registered offices of the above are:

(1) 29 North Anne Street, Dublin 7.(2) 39/40 Upper Mount Street, Dublin 2.(3) 1 Beresford Street, Dublin 7.

Incorporated in the United Kingdom

Frank E Benner Limited (4) Fresh produce distributor 100Daniel P Hale and Co Limited (4) Fresh produce distributor 100Fyffes Group Limited (5) Fresh produce distributor 100Fyffes Scotland Limited (5) Fresh produce distributor 100FII Holdings Limited (5)* Investment holding company 100James Lindsay & Son plc (6) Fresh produce distributor 100


(4) Balmoral Market, Balmoral Road, Belfast BT12. (5) Houndmills Industrial Estate, Houndmills Road, Basingstoke, Hampshire RG21 6XL.(6) Fruit Market, Chesser Avenue, Edinburgh EH14 1TT.

Incorporated in the Netherlands

Fyffes B.V. (formerly Velleman & Tas International B.V.) (7) Fresh produce distributor 100Anaco Greeve International B.V. (8) Fresh produce distributor 50 (i)Fyffes Holdings B.V. (9) Investment holding company 100


(7) Marconistraat 19, 3029 AE Rotterdam. (8) Postbus 31, 2685 ZG Poeldijk.(9) Jogchem Van Der Houtweg 2, 2678 AG De Lier.


Principal subsidiaries, joint ventures and associates continuedfor the year ended 31 December 2004


Incorporated in Spain

EurobananCanarias S.A. (10) Fresh produce distributor 50 (i)Arc Eurobanan S.L. (11)** Fresh produce distributor 85 (i)Frutas IRU S.A. (12) *** Fresh produce distributor 50 (i)


(10) Avenida Francisco La Roche, 38801 Santa Cruz de Tenerife. (11) Mercamadrid, Nave D, Puestos 47 y 49, 28053 Madrid. (12) Puestos 326-328, Mercabilbao, 48970 Basauri, Vizcaya.** Owned by EurobananCanarias S.A.*** Owned by Arc Eurobanan S.L.

Incorporated in Denmark

Brdr Lembcke A.S. Fresh produce distributor 50 (i)

The registered office is Gronttorvet, 220, Copenhagen.

Incorporated in Germany

Fyffes GmbH* (13) Investment holding company 100 J.A. Kahl & Co. (14) Investment holding company 100International Fruchtimport Gesellschaft Weichert & Co. KG. (15) Fresh produce distributor 80 (ii)


(13) Bauernbrauweg 1, 8000 Munich.(14) Bauernbrauweg 1, 81369 Munich.(15) Banksstrabe 28, 20097 Hamburg.

Incorporated in Italy

Peviani SpA Fresh produce distributor 50 (i)

The registered office is Via Maspero, 20, 1 - 20137, Milan.

Incorporated in the Czech Republic

Hortim International s.r.o. Fresh produce distributor 70 (i)

The registered office is Breclao, ZIP 690 02, Haskova 18, ICO 47915528.

Incorporated in the United States of America

Fyffes Inc. Fresh produce distributor 100Cobalt LLC Fresh produce distributor 100

The registered offices of all the above is 10100 West Sample Road, Suite 405, Coral Springs, Florida, 33065 USA.


Principal subsidiaries, joint ventures and associates continuedfor the year ended 31 December 2004


Incorporated in Sweden

Everfresh Group AB Fresh produce distributor 100 (iii)

The registered office is Långebergavägen 190, 256 69 Helsingborg, Sweden.

Incorporated in Jersey

Fyffes Windward Holdings Limited* Investment holding company 100Fyffes Investments Limited* Investment holding company 100Kinlet Investments Limited Investment holding company 100Fyffes Treasury Services Limited* Investment holding company 100Fyffes International Fruit Traders Limited Investment holding company 100Fyffes Caribbean Limited Investment holding company 100

The registered offices of all of the above is Elizabeth Lane, St. Helier.

Joint ventures Principal activity Group share %

Incorporated in the United Kingdom

Windward Isles Banana Company (UK) Limited (16) Investment holding company 50Capespan International Holdings Limited (17) Fresh produce distribution 50

The registered offices of the above are: (16) The Windward Terminal, Herbert Walker Avenue, Southampton. (17) Moorebridge Court, 29-31 Moorebridge Road, Maidenhead, Berkshire, SL6 8LT.

Incorporated in Guatemala

Pineapple Trading Corporation Fresh produce producer 50

The registered office is Avenida Las Americas, 22-83, Zona 14, Guatemala City.

Incorporated in Jersey

Windward Isles Banana Company Holdings (Jersey) Limited Investment holding company 50

The registered office is Elizabeth Lane, St. Helier.

All shareholdings in subsidiaries, joint ventures and associates consist of ordinary shares.

* Subsidiary undertakings owned directly by Fyffes plc.

(i) Consolidated on the basis that the Group exercises dominant influence over the financial and operating policies of theundertaking.

(ii) This limited partnership is consolidated on the basis that whilst there are elements of shared control, the Group has aparticipating interest of 80% and the Group manages the undertaking on a unified basis with other subsidiary undertakings.

(iii) See note 29, Fyffes has acquired an initial 60% of Everfresh Group AB and has entered a binding agreement to acquire theremaining 40% in May 2007.


Notice of Annual General Meeting of Fyffes plc

NOTICE IS HEREBY GIVEN that the Annual General Meeting ("AGM") of Fyffes plc will be held at the Burlington Hotel,Dublin 4 on Tuesday, 24 May 2005 at 10.30 a.m. for the following purposes:-

1. To receive and consider statements of account for the year ended 31 December 2004 and the reports of the directorsand auditors thereon.

2. To confirm the interim dividend of €1.53 cent per share and declare a final dividend of €5.20 cent per share on theordinary shares for the year ended 31 December 2004.

3. By separate resolutions to re-elect as directors the following who retire in accordance with the Articles of Associationand the Combined Code on Corporate Governance and, being eligible, offer themselves for re-election:-

(A) C.P. McCann(B) R.B. Hynes(C) J.D. McCourt(D) D.J. Bergin(E) G.B. Scanlan

4. To authorise the directors to fix the remuneration of the auditors for the year ending 31 December 2005.

As special business, to consider and, if thought fit, pass the following resolutions:-

5. AS AN ORDINARY RESOLUTION:

"That the directors are hereby unconditionally authorised to exercise all the powers of the company to allot relevantsecurities (within the meaning of Section 20 of the Companies (Amendment) Act, 1983) up to an aggregate nominalamount of €6,969,279 (116,154,648 shares) provided that this authority shall expire at the earlier of the close ofbusiness on the date of the next AGM after the passing of this resolution or the day which is 18 calendar months afterthe date of passing of this resolution, provided however that the company may before such expiry make an offer oragreement which would or might require relevant securities to be allotted after such expiry and the directors may allotrelevant securities in pursuance of such offer or agreement as if the authority hereby conferred had not expired.”

6. AS SPECIAL RESOLUTIONS:

(A) "That pursuant to Article 6(d) of the Articles of Association and Section 24 of the Companies (Amendment) Act, 1983the directors are hereby empowered to allot equity securities (as defined by Section 23 of that Act) for cash pursuantto the authority to allot relevant securities conferred on the directors by resolution 5 above in the notice of thismeeting as if sub-section (1) of the said Section 23 did not apply to any such allotment provided that this power shallbe limited to the matters provided for in Article 6(d)(i) and (ii) of the Articles of Association and provided further thatthe aggregate nominal value of any shares which may be allotted pursuant to Article 6(d)(ii) may not exceed€1,045,392 (17,423,197 shares) representing 5% of the nominal value of the issued share capital.”

(B) "That the company and/or any subsidiary (as defined by Section 155 of the Companies Act, 1963) of the company ishereby generally authorised to make market purchases (as defined by Section 212 of the Companies Act, 1990) ofshares of any class in the company ("shares") on such terms and conditions and in such manner as the directors maydetermine from time to time but subject to the provisions of the Companies Act, 1990 and to the following restrictionsand provisions:-

(a) The maximum number of ordinary shares (as defined in the Articles of Association of the company) authorised tobe acquired pursuant to this resolution shall not exceed 34,846,394 (representing 10% of the issued share capital);

(b) the minimum price which may be paid for any share shall be an amount equal to the nominal value thereof;

(c) the maximum price which may be paid for any share (a "relevant share") shall be an amount equal to 105% of theaverage of the five amounts resulting from determining whichever of the following (i), (ii) or (iii) specified below inrelation to the shares of the same class as the relevant share shall be appropriate for each of the five business daysimmediately preceding the day on which the relevant share is purchased, as determined from the informationpublished in the Irish Stock Exchange Daily Official List reporting the business done on each of those five businessdays:


Notice of Annual General Meeting of Fyffes plc continued

(i) if there shall be more than one dealing reported for the day, the average of the prices at which such dealingstook place; or

(ii) if there shall be only one dealing reported for the day, the price at which such dealing took place; or(iii) if there shall not be any dealing reported for the day, the average of the high and low market guide prices

for that day;

and if there shall be only a high (but not a low) or a low (but not a high) market guide price reported, or ifthere shall not be any market guide price reported, for any particular day then that day shall not count as oneof the said five business days for the purposes of determining the maximum price. If the means of providingthe foregoing information as to dealings and prices by reference to which the maximum price is to bedetermined is altered or is replaced by some other means, then a maximum price shall be determined onthe basis of the equivalent information published by the relevant authority in relation to dealings on the IrishStock Exchange or its equivalent;

(d) the authority hereby granted shall expire at the close of business on the date of the next AGM of the company orthe day which is 18 calendar months after the date of passing of this resolution, whichever is the earlier, unlesspreviously varied, revoked or renewed by special resolution in accordance with the provisions of Section 215 ofthe Companies Act, 1990. The company or any such subsidiary may, before such expiry, enter into a contract forthe purchase of shares which would or might be executed wholly or partly after such expiry and may completeany such contract as if the authority conferred hereby had not expired.”

(C) "That, subject to the passing of resolution 6(B), for the purposes of Section 209 of the Companies Act, 1990, thereissue price range at which any treasury shares (as defined by the said Section 209) for the time being held by thecompany may be reissued off-market shall be as follows:-

(a) The maximum price at which a treasury share may be reissued off-market shall be an amount equal to 120 per centof the "appropriate price"; and

(b) the minimum price at which a treasury share may be re-issued off-market shall be the nominal value of the sharewhere such a share is required to satisfy an obligation under an employee share scheme (as defined in the ListingRules of The Irish Stock Exchange Limited) operated by the company or, in all other cases, an amount equal to95% of the appropriate price.

For the purposes of this resolution, the expression "appropriate price" shall mean the average of the five amountsresulting from determining whichever of the following (i), (ii) or (iii) specified below in relation to shares of the class ofwhich such treasury share is to be reissued shall be appropriate in respect of each of the five business daysimmediately preceding the day on which the treasury share is reissued, as determined from information published inthe Irish Stock Exchange Daily Official List reporting the business done in each of those five business days:-

(i) if there shall be more than one dealing reported for the day, the average of the prices at which such dealings tookplace; or

(ii) if there shall be only one dealing reported for the day, the price at which such dealing took place; or(iii) if there shall not be any dealing reported for the day, the average of the high or low market guide prices for the

day;

and if there shall be only a high (but not a low) or a low (but not a high) market guide price reported, or if there shallnot be any market guide price reported, for any particular day then that day shall not count as one of the said fivebusiness days for the purposes of determining the appropriate price. If the means of providing the foregoinginformation as to dealings and prices by reference to which the appropriate price is to be determined is altered or isreplaced by some other means, then the appropriate price shall be determined on the basis of the equivalentinformation published by the relevant authority in relation to dealings on the Irish Stock Exchange or its equivalent.

The authority hereby conferred shall expire at the close of business on the day of the next AGM of the company orthe day which is 18 calendar months after the date of passing of this resolution, whichever is the earlier, unlesspreviously varied or renewed in accordance with the provisions of Section 209 of the Companies Act, 1990.”


Notice of Annual General Meeting of Fyffes plc continued

7. AS AN ORDINARY RESOLUTION:

“That the Fyffes plc Revenue Approved Profit Sharing Scheme be and is hereby extended for a further period of tenyears so that it shall now not terminate until after the appropriation of shares in respect of the financial year ending in2014.”

P.T. Halpenny Secretary

29 North Anne Street, Dublin 7 1 April 2005

Notes:

1. Any member entitled to attend and vote at the meeting is entitled to appoint a proxy (who need not be amember of the company) to attend, speak and vote in his/her place. Completion of a form of proxy will notaffect the right of a member to attend, speak and vote at the meeting in person.

2. To be valid, forms of proxy duly signed together with the power of attorney or such other authority (if any)under which they are signed (or a certified copy of such power or authority) must be lodged with thecompany's registrar, Computershare Services (Ireland) Limited, P.O. Box 954, Sandyford, Dublin 18 by notlater than 10.30 a.m. on Sunday, 22 May 2005.

3. The company, pursuant to Regulation 14 of the Companies Act, 1990 (Uncertified Securities) Regulations,1996, specifies that only those shareholders registered in the register of members of the company as at6.00pm on Sunday, 22 May 2005 (or in the case of an adjournment as at 48 hours before the time of theadjourned meeting) shall be entitled to attend and vote at the meeting in respect of the number of sharesregistered in their names at the time. Changes to entries in the register after that time will be disregardedin determining the right of any person to attend and/or vote at the meeting.

4. As of 1 April 2005 (being the latest practicable date prior to the publication of this circular), the outstandingshare options issued by the company would result in the issue of 12,805,250 new ordinary shares if such shareoptions were to be exercised. Further the issue of all of these shares would represent approximately 3.5%of the enlarged equity or 4.1%, if the company were to exercise in full the proposed authority being soughtin resolution 6(B) above to purchase its own shares.

5. Biographical details for the directors standing for re-election at the AGM are set out on pages 6 and 7. Eachof these directors has been subject to the evaluation process recommended by the 2003 Combined Codeon Corporate Governance as detailed on page 30. On this basis the Chairman and the Board are pleasedto recommend the re-election of these directors.

Index to Annual Report

A Page

Accounting policies, statement of 42

Acquisitions, disposals and terminations 70

Annual general meeting, notice of 86

Approval of financial statements 82

Audit committee report 33

Auditors’ remuneration 54

B

Balance sheet

- Group 47

- Company 48

Bank loans and overdrafts 66

C

Cash flow statement, Group 49

Chairman’s statement 3

Commitments and contingencies 72

Compensation committee report 35

Corporate governance report 29

Corporate social responsibility 9

Creditors: amounts falling due

within one year 64

Creditors: amounts falling due

after more than one year 65

D

Debtors 64

Deferred consideration 65

Deferred taxation 67

Depreciation 61

Derivative and other financial instruments 80

Directors’ and company secretary’s

share interests 38

Directors and other information 26

Directors’ remuneration 36

Directors’ report 27

Dividends 57

E

Earnings per ordinary share 58

Employees 59

Exceptional items 55

F

Financial review for 2004 17

Funds, analysis of net 51

G Page

Goodwill 60

I

Independent auditors’ report 41

Intangible assets 60

Interest receivable and income from

financial assets, net 53

J

Joint ventures, investment in 62

L

Lease obligations 66

O

Operating expenses, net 53

P

Pensions 74

Profit and loss account, Group 45

R

Reconciliation of movements in

shareholders’ funds 46

Related party transactions 79

Review of operations for 2004 14

S

Segmental analysis 52

Share capital, called up 68

Share premium 68

Shareholder information 2

Statement of directors’ responsibilities 40

Statement of total recognised

gains and losses, Group 46

Stocks 63

Subsidiaries, principal 83

T

Tangible assets 61

Tax on profit on ordinary activities 56



Notes

fyffes plc annual report and accounts...

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