Naturex S.A. GermanyLiquidiert

Naturex S.A. Germany

Bonn

Jahresabschluss zum Geschäftsjahr vom 01.01.2009 bis zum 31.12.2009

Balance Sheet

Assets

Income statement

Contents

Contents

Note 1 General information

Note 2 Tangible and intangible fixed assets

Note 3 Financial fixed assets

Note 4 Inventories and work in progress

Note 5 Accounts receivable

Note 6 Other receivables

Note 7 Investment securities

Note 8 Prepayments

Note 9 Shareholders' equity

Note 10 Provisions for risks and expenses

Note 11 Financial debt

Note 12 Trade and other accounts payable

Note 13 Other debt

Note 14 Revenue

Note 15 Exceptional income

Note 16 Average headcount

Note 17 Commitments

Note 18 Breakdown of capital

Note 19 Translation differences

Note 20 Financial income and expenses of related parties

Note 21 Compensation of senior management

Note 22 Deferred tax

Note 23 R&D expenses

Statutory Auditors' Report on the financial statements

Special report of the Statutory Auditors on regulated agreements

Note 1 General information

1.1 Highlights

Acquisition of the Ingredients Division of Spanish group : Natraceutical

On August 6, 2009, Naturex announced the signing of a Memorandum of Understanding for the integration of the Ingredients Division of Natraceutical group in Spain.

On September 30, 2009, it announced the signing of a Master agreement, then a contribution agreement governing the merger of the two groups.

Spanish multinational Natraceutical group is listed on the Spanish stock market and is a leading player in the research and development of naturally-sourced functional, active ingredients and nutritional supplements.

Following the approval of its Joint Shareholders' Meeting on December 30, 2009, Naturex completed the acquisition which it financed in cash and through the issue of new shares.

The Ingredients Division of Natraceutical group includes the following companies and/or assets:

Obipektin AG

Swiss company Obipektin AG is a recognized European leader in fruit and vegetable powders and specialty pectins with two major, fully-equipped production sites in Bischofszell and Bergdorf (German-speaking Switzerland).

Like Naturex, the company markets its natural ingredients to industrial groups, primarily within the food sector, particularly baby foods.

Obipektin reported yearly revenues of € 41 million and employed 137 people on December 31, 2009.

The company has a sales office in Bangkok, Thailand.

Overseal Natural Ingredients Ltd

English company Overseal Natural Ingredients Ltd is a leading European manufacturer and supplier of naturally-derived coloring agents, and also specializes in yeast and Talin - a naturally-strong sweetener which is principally used to mask bitterness.

Based in Birmingham, the company has its own manufacturing plant and reported yearly revenues of € 26 million and a payroll of 85 people on December 31, 2009.

Overseal Natural Ingredients Ltd also has 4 subsidiaries, including three which do not manufacture any products themselves (Overseal Colour Inc., Britannia Natural Product Limited, The Tallin Co Ltd) and Natraceutical Russia presented below.

Natraceutical Russia

Based in Moscow, this Overseal Natural Ingredients subsidiary is a distribution platform for Overseal Natural Ingredients and Obipektin products.

The entity reported yearly revenues of € 2.3 million and employs 5 people.

Kingfood Australia Pty Ltd

Based closed to Sydney, Kingfood is a bridgehead company for the development of group sales in the Asia/Pacific region. A distribution platform that covers the whole of the region, it also has its own industrial formulation facilities.

Kingfood reported yearly revenues of € 10 million and employs 27 people.

Extractos Naturais da Amazonia Ltda

Exnama is a company based in Manaus in Brazil which produces purified caffeine for the food industry as well as caffeine-enriched beverages.

The company reported yearly revenues of € 5 million and employs 26 people.

Production factory in Valencia, Spain

Naturex group has purchased an industrial production plant in Valencia (land and buildings are leased) with a major extraction capacity (solvent and water extraction, production of polyphenols).

Assets of Natraceutical Canada

The group has acquired registered brand, Viscofiber, along with a patent license for the production of beta glucans (dietary fibers).

Stake in Biopolis

Naturex has purchased a 24.9% stake in this R&D company which specializes in ingredients and is also based in Valencia, Spain.

The company's research focuses primarily on the production, design and purification of microorganisms (bacteria, yeasts and filamentous fungi) and microbial metabolites (by-products with a high value-added such as enzymes, proteins and nucleic acids).

Creation and contribution of Naturex shares

Following the approval by the Joint Shareholders' Meeting on December 30, 2009, Naturex issued 2,481,960 new shares in compensation for the shares contributed.

The shares issued are listed on two separate lines since only 961,557 have voting rights attached, and 1,520,403 are preferential shares that have no voting rights attached for as long as they are held by Natra group.

In accordance with the agreements signed with Natraceutical group (Master Agreement signed on September 30, 2009), these shares were valued at € 32 in exchange for the contributions defined in the Contribution Agreement.

Naturex SA's shareholders' equity increased € 79.2 million, including a € 3.7 million increase in share capital and an issue premium of € 75.7 million. € 170,000 in expenses linked to the capital increase (net of tax) was deducted from the issue premium.

Cash financing

In accordance with the terms of the agreements between the parties, only part of the cash payment due was made. Out of the € 15 million, only € 5 million was effectively paid to Natraceutical group, with the remaining € 10 million only falling due once the parties have reached a final agreement. Out of this € 10 million, € 8 million has been placed in escrow until the parties have signed an agreement.

At the time the accounts were closed, the calculations made by the companies indicate that this balance payment will not be made. In line with the agreements signed with the banking pool, the € 10 million will be directly repaid to the bank and therefore deducted from the financial debt and acquisition price reported in Naturex's financial statements.

The repayment will be made as soon as a formal agreement is reached between Natra and Natraceutical regarding the price adjustment. At the time this report was drawn up, no final agreement had been signed.

Restructuring of the group's financial debt

In order to finance the acquisition of the Ingredients Division of Natraceutical in cash, Naturex group has chosen to restructure its debt by repaying virtually all of its loans which it refinanced via a structured loan on Naturex SA of € 140 million set in place on December 30, 2009, and on which it had drawn down € 102 million on December 31, 2009.

This loan has been restated in the amount of € 92 million in the financial statements given the imminent early repayment of the € 10 million initially provided for as part of the price adjustment.

On December 30, 2009, three loans denominated in USD and CHF were signed with subsidiaries Naturex Inc. (€ 7.2 million), Naturex Holdings Inc. (€ 34.9 million) and Obipektin (€ 20 million). All three have the same repayment schedules and interest as the structured loan set in place on December 30, 2009.

Under the terms of the agreement, the loan covenants shall apply on a six-monthly basis as of June 30, 2010. As a result, at the close of financial year 2009, the company had no related commitments to report.

Capital increase in cash

On March 3, 2009, Naturex confirmed the success of its capital increase launched on February 5, 2009.

The prospectus for the operation was approved by AMF authorization No. 09-027 of February 4, 2009, and issued in accordance with Articles L.412-1 and L.621-8 of the French Monetary and Financial Code and the AMF's General Regulation, notably Articles 211-1 to 216-1.

Initially set at € 15 million, the capital increase was extended to € 17.1 million following the exercise of its extension clause and breaks down as follows: capital contribution of € 1.3 million and an issue premium of € 16 million, from which € 258,000 in related expenses (net of tax) were deducted.

Ongoing organic development

Growth in sales

Naturex's revenues increased 3.1% (€ 1.6 million) in 2009.

Net income after tax amounted to € 207,000.

Naturex's growth prospects have been further enhanced by the integration of the Ingredients Division of Natraceutical group.

New branches in Belgium and Japan

Naturex group opened a branch in Belgium on June 24, Naturex Benelux, and another in Tokyo Japan on October 9. Their remit is to develop and reinforce Naturex's local commercial presence and sales.

Other major events

Sanavie

Naturex SA acquired a 34.79% stake in Sanavie on January 1, 2007 for which it paid € 420,000. The Swiss company sells Naturex products on the Russian and Ukrainian markets.

The company is currently in severe financial difficulty and, at the close of the group accounts for 2009, was unable to produce any audited accounts for the year. As a result, the fair value of Naturex's equity stake has been reduced to zero and represents an expense of € 420,000.

1.2 Events occurring after closure

Naturex Middle East - RAKFTZ Branch was awarded its commercial license on January 6, 2010.

1.3 Accounting principles and methods

The annual financial statements are drawn up and presented in accordance with existing French regulations, resulting from the decrees of the French Accounting Regulations Committee (CRC).

Naturex SA made no changes to its accounting methods during financial year 2009.

Note 2 Tangible and intangible fixed assets

2.1 Acquisitions and disposals

2.2 Amortization of fixed assets

2.3 Amortization and depreciation

On December 31, 2009, amortization and depreciation on fixed assets break down as follows:

2.4 Leased assets

There were no lease finance contracts at December 31, 2009.

Note 3 Financial fixed assets

3.1 Acquisitions, provisions and disposals

As indicated in Note 1.1, Naturex SA acquired the Ingredients Division of Natraceutical group on December 30, 2009. The acquisition cost includes the shares in the following companies for a total € 83.3 million:

On the same date, Naturex SA transferred its shares in Naturex Inc. to Naturex Holdings Inc. for a total € 45.6 million, resulting in both a disposal and an acquisition since the € 45.6 million was added to the share capital of Naturex Holdings Inc.

US subsidiary, Naturex Holdings Inc., was set up for this very purpose and with a view to transferring to it part of the shares acquired on December 30, 2009.

The shares in Overseal, Kingfood and Exnama were transferred to Naturex Holdings Inc. for a total € 34.8 million on the same date, with Naturex SA also making over the full capital of its newly-created subsidiary, Naturex Trading Shanghai, for € 100,000 over the course of the financial year.

As reported in Note 1.1, the acquisition of the shares in the companies making up the Ingredients Division of Natraceutical group is subject to a price adjustment: the calculations made by the companies indicate that the balance of the cash payment due (€ 10 million) will not be made, but deducted from the value of the shares and debt acquired as provided for in the structured loan agreement.

Finally, a provision of € 420,000 has been booked to cover the assets of Sanavie (see Note 1.1).

3.2 Valuation of equity securities - Depreciation

Equity securities are recorded at their acquisition cost.

A depreciation expense is booked where the accounting value of a security is higher than its useful economic value. A security's useful economic value is determined according to the company's equity share ratio, its development prospects and revenues. A company's development prospects are based upon past experience and various other factors. As the sharp downturn in today's economic environment makes it difficult to forecast future activity, these criteria are taken into account in Naturex's prudent management strategy, even if the group expects the current financial crisis to have a very minor impact on its performance.

It is therefore possible that future results differ somewhat from the forecast appreciation in the value of the company's securities portfolio.

3.3 Table of subsidiaries and holdings

Note 4 Inventories and work in progress

4.1 Inventories

Inventories of raw materials and other supplies are valued by batch at their purchase cost using the FIFO (first-in first-out) method.

Finished or semi-finished goods are valued by batch and using the FIFO method at the cost price which deducts all production costs from the purchase price:

A provision for depreciation is booked when the purchase cost or cost price falls below the market price.

4.2 Breakdown by type of inventories

Note 5 Accounts receivable

Receivables are valued at their nominal value.

A provision for depreciation is made when there is a collection risk (even partial) on receivables.

All receivables relating to current assets are payable within a maximum of one year.

Foreign currency receivables amount to € 499,000.

Note 6 Other receivables

Note 7 Investment securities

7.1 Shares held by the company

The company owns 7,000 of its own shares which it acquired at an average price of € 28.72 and which now represent a total gross value of € 201,000, i.e. 0.11 % of its share capital.

Given the performance of the share price in the months following the end of the financial year, Naturex has booked a provision of € 11,000, i.e. a net value of € 190,000.

7.2 Marketable securities

At December 31, 2009, mutual fund investments amounted to € 408,000.

Note 8 Prepayments

(1) As part of the refinancing set in place on December 30, 2009, € 565,000 in costs linked to the setting up of the previous structured loan were removed from the balance sheet and booked to financial expenses. The costs linked to the setting up of the new structured loan will be spread over its full term, i.e. over seven years.

Note 9 Shareholders' equity

The capital is divided into 6,364,000 fully paid-up shares with a par value of € 1.50.

Changes in capital are set out in Note 1.1 - Creation and contribution of Naturex shares and capital increase in cash.

Note 10 Provisions for risks and expenses

(1) Unrealized losses following the revaluation of foreign currency debt and receivables.

Note 11 Financial debt

Variable rates apply to all financial debt, with the exception of € 33,000 to which a fixed rate applies.

Note 12 Trade and other accounts payable

Trade payables amounted to € 8,471,000 (including € 1,098,000 in foreign currency trade payables) at December 31, 2009, compared to € 10,907,000 at December 31, 2008.

Note 13 Other debt

Other debt has a maturity of less than one year and breaks down as follows:

(1) including € 1.2 million in the current accounts of Naturex Inc. in 2009.

Expenses booked on December 31, 2009 are as follows:

Note 14 Revenue

Revenue by geographic area breaks down as follows:

Note 15 Exceptional income

As indicated in Note 3.1, Naturex SA transferred the shares of Naturex Inc. to Naturex Holdings Inc. for a total € 45.6 million, as well as the shares of Overseal, Kingfood and Exnama for a total € 34.8 million. Their net accounting value amounts to € 80.4 million.

Note 16 Average headcount

Naturex's average headcount for 2009 was 186 employees.

At December 31, 2009, the company's headcount stood at 195 employees broken down as follows:

Note 17 Commitments

17.1 Commitments given

Provisions do not include an amount for retirement commitments or restructuring operations. Severance pay in respect of Naturex SA is insured with the company Predica. It is a defined benefit scheme, with no residual commitment for the group.

At December 31, 2009, the company's total commitment was valued at € 45,000, with no sums paid to Predica over the period.

There are no specific schemes for company directors.

17.2 Commitments received

Note 18 Breakdown of capital

Note 19 Translation differences

Note 20 Financial income and expenses of related parties

Note 21 Compensation of senior management

Gross compensation for the company's directors and officers amounted to € 294,000 in 2009, € 286,000 of which was paid over the course of the financial year.

Note 22 Deferred tax

Related tax receivables: € 589,000.

Note 23 R&D expenses

Research and development expenses booked over 2009 amount to € 1.7 million.

Statutory Auditors' Report on the financial statements

Year ended December 31, 2009 To the shareholders,

In compliance with the assignment entrusted to us by your shareholders' annual general meeting, we hereby report to you for the year ended December 31, 2009, on:

The financial statements have been approved by the Board of Directors. Our responsibility is to express an opinion on the statements based on our audit.

1 Opinion on the financial statements

We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan and perform the audit to obtain reasonable assurance that the yearly financial statements are free from material misstatement. An audit consists in examining, on a test basis or by means of another method, the evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall presentation of the financial statements. It is our belief that the information we have collected is sufficient and relevant as a basis for our opinion.

In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the company at December 31, 2009 and of the results of its operations for the year then ended in accordance with the accounting rules and principles applicable in France.

2 Justification of our assessments

In accordance with the provisions of Article L. 823-9 of the French Commercial Code relating to the justification of our assessments, we bring your attention to the following matters:

Note 3.2 sets out the accounting rules and principles relating to the valuation of equity securities. As part of our assessment of the accounting principles used by your company, we have verified the appropriate nature of these methods and the information provided in the notes to the financial statements and their correct application.

These assessments were made in the context of our audit of the financial statements taken as a whole, and therefore contributed to the opinion expressed in the first part of this report.

3 Specific verifications and information

We have also performed the specific verifications required by law, in accordance with the professional standards applied in France.

We have no matters to report regarding the fair presentation and the conformity with the financial statements of the information given in the Board of Directors' management report and in the documents sent to shareholders with respect to the financial position and the financial statements.

Regarding the information provided in accordance with Article L.225-102-1 of the French Commercial Code pertaining to the compensation and benefits paid to company directors as well as to the commitments made in their favor, we have verified its consistency with the accounts or the data on which the accounts are based and, where applicable, with the figures collected by your company from the companies that control it or that it controls. On the basis of this audit, we hereby certify that the information provided is both accurate and sincere.

In accordance with the law, we have verified that the various information relating to shareholdings and controlling stakes and the identity of shareholders has been communicated to you in the management report.