2008 ANNUAL REPORT
The specialist in home
delivery of food products to
individual customers
Content
Presentation of the Toupargel Group
History
p4
A business model unique in its market
p6
Leader in the home delivery of frozen foods products
p7
The Toupargel brand
p8
Place du Marche, a new way for home delivery of fresh foods & groceries p 9
The food market in France
p 10
The frozen food and ice cream market
p 15
Home delivery of food and grocery products, an evolving market
p 21
Financial section
Corporate governance and operations
p 25
Shareholder’s and investor’s information
p 40
Group management report, recent changes and risk factors
p 47
Consolidated financial statements
p 59
Statutory auditors report
p 118
Presentation of the Toupargel Group
History
A business model unique in its market
Leader in the home delivery of frozen foods products
The Toupargel brand
Place du Marche, a new way for home delivery of fresh foods & groceries
The food market in France
The frozen food and ice cream market
Home delivery of food and grocery products, an evolving market
History
From the outset, Toupargel has successfully dealt with its changing environment and ensured the
Group's sustainability. Today the Group's size has allowed to consolidate its performance, and in
2007 the Group will celebrate its 60th anniversary, the 25th anniversary of Toupargel SA (ToupargelAgrigel), the 10th anniversary of our IPO, and the 5th anniversary of the Place du Marché brand.
1947
Establishment of Toupargel Surgeles.
1969-1981
Since 1969, Toupargel Frozen Foods has developed the direct sale of frozen foods to individuals using
store vans.
1982
Establishment of Toupargel SA by Roland Tchenio, following the acquisition of Toupargel Surgeles.
1983-1997
A strategic change in operational focus is undertaken: to make Toupargel a specialist in sales to
individuals by phone, with order preparation in dedicated platforms and delivery within 48 to 72
hours, and to develop the Group through acquisitions. Toupargel acquires more than 40 French
frozen food distribution companies, and confirms its expertise in integrating companies and
businesses.
1997
Toupargel SA shares begin trading on the Second Marche in December. Total annual sales: €85 mn.
2000-2001
Establishment of the Fresh Foods & Groceries business with the construction of a call centre and
sales order preparation platform in Châlon sur Saone, with the objective of successfully applying the
Toupargel “Frozen Foods” business model to its “Fresh Foods and Groceries” one.
2002
Launching of Place du Marche and its home delivery of fresh foods and groceries business.
2003
Change in dimension: Toupargel SA acquires the Frigedoc company (Agrigel brand), the leading
distributor of frozen foods to individuals through home delivery service (€240 mn in sales).
This acquisition enables Toupargel, with total sales of €362 mn, to become the leading player in this
market segment with a 36% share, as well as covering all of France.
2004-2005
A period of convergence for Toupargel and Agrigel. Synergies between the companies enable the
optimisation of the Group's functional activities: purchasing, quality, marketing, logistics, IT... and
significantly improved earnings.
Two new order preparation platforms are commissioned (in Argentan and Montauban).
Launch of the Toupargel brand, with the ice cream product range.
2006
A single team, brand name, organisation and business model for the Group's Frozen Foods business.
End of the logistics re-organisation in mid-2006, resulting in lower costs. Standardisation of employee
compensation terms and Group agreements.
2007
Rollout of a new telesales software program and more efficient deliveries.
2008
Toupargel has initiated three major work programmes:
- to attract new clients, the Group is testing a "softer" method of prospection based on the
complementarity of telephone and door to door prospecting;
- to improve client loyalty, Toupargel has created a dedicated national team at Villeurbanne;
- to improve client service, a new delivery organisation.
A business model unique in its
market
From telephone order taking to home delivery - a fully-integrated operation
Selection on catalogue
Customers receive a magazine 15 times per year for frozen food products, twice a year for groceries,
and 13 times per year for fresh foods. It is delivered directly to their home or via the post office,
customers can look through at their leisure and select products for their next order.
Placement of order by phone
Telesales agents contact all customers to take their orders. They provide advice and assistance,
suggest new products and special promotions, etc. Customers are called about frozen food products
15 times per year, and once a week for fresh foods and groceries.
A sales application assists telesales agents in their commercial approach.
Transfer of orders to the logistics platforms
Orders are then transferred by computer to one of the four platforms dedicated to the "Frozen
Foods" business or to the Châlon sur Saône platform for the "Fresh Foods and Groceries" business.
Order picking in storage area
Ordered products are picked by order preparers in the temperature controlled storage area (the
picking areas), then dispatched to the packaging area.
Packaging
Ordered products are individually boxed by packagers using an IT system. Each product is controlled
by scanning a bar-code, just like at a supermarket. A series of checks ensure that customers receive
exactly what they ordered.
Forwarding to the delivery depot
Boxes, identified by bar-codes, are placed on a pallet according to delivery rounds before being
forwarded by lorry to the corresponding delivery depot.
Home delivery
Consumer Service Representatives deliver orders to the customer's home 72 hours after the
customer's call, without any interruption in refrigeration chain.
Payment
Payment is made when orders are delivered, and the customer is given the next sales catalogue.
Toupargel, leader in the home
delivery of frozen food products
Toupargel made a strategic choice to rely exclusively on internal resources. Thus it can control all its
business processes, from telemarketing to delivery.
Customised phone calls: a loyalty bonding tool
910 telesales agents based at 34 telesales call centres contact 1,350,000 customers 15 times a year in
order to record their sales orders. They systematically suggest attractive, targeted, adapted
commercial offers during these calls using a suitable IT tool in order to stimulate sales and promote
loyalty bonding.
An extensive quality frozen food product offering
Nearly 1,000 products from appetisers to desserts, with ready to serve and microwavable products
such as prepared dishes, are promoted in the catalogue sent or handed over to all customers at each
delivery. This broad product range includes both national and regional Distributor Brand products, as
well as those from the Toupargel brand.
The offer is built around four key values: quality, practicality, originality, and competitiveness.
Customised sales order preparation at four dedicated platforms
In 2008, four platforms dedicated to the "Frozen Foods" business located in Argentan (61),
Montauban (82), Poitiers (86), and Civrieux d’Azergues (69), prepared nearly 7 mn orders. Powerful
IT systems ensure total order traceability, so each customer order and each product can be identified
at any time.
Quick, free home delivery, without any interruption in refrigeration chain
Once an order has been prepared, it is delivered by lorry to one of the 113 delivery depots located
throughout France. This dense network of delivery depots means that customers receive their orders
72 hours after calling in their order, without any interruption in refrigeration chain.
Effective canvassing to create new customers
Canvassing for new customers is done either by phone (telemarketing) or directly in the field.
Toupargel Group employs 170 telemarketers working at 6 telemarketing centres, as well as 280 field
marketers.
The combination of these two systems enabled Toupargel to create 400,000 new customers in 2008.
A nationwide presence
The Toupargel Group's sales network and logistics and delivery infrastructures provide consistent
coverage throughout France.
The Toupargel brand
Products under the Toupargel label
A range of Distributor Brand products was launched in 2005 based on four 4 key values: originality,
quality, competitiveness, and practicality. The goal is to leverage the know-how of the Toupargel
brand, and to reinforce brand awareness by bringing it all the way to our customers' freezers. In the
long run, this policy is intended to standardize the Toupargel offer.
In 2008, the Distributor Brand was deployed across strategic product groups and applied to full
ranges. Nearly 100 new Toupargel products were launched during 2008. The Toupargel brand range
represented 22 % of Group sales in 2008, and included over 350 products.
In 2009, over 100 new Toupargel-branded products will be offered.
Place du Marché, a new way for
home delivery of fresh foods and
groceries
By copying the "Frozen Foods" know-how in telemarketing, Place du Marché attracted 45,000 new
customers in 2008. Thanks to its intensive telemarketing and field canvassing activities, the "Fresh
Foods and Groceries" business expanded its geographical coverage, developing its customer file in
the Clermont Ferrand, Saint Etienne, and Lyon regions.
A unique, strategic positioning
Place du Marché provides a new way for distributing fresh foods and groceries. By duplicating the
key success factors of the "Frozen Foods" sales system, Place du Marché is the first player to offer
home delivery of fresh foods, groceries, hygiene and pharmaceutical products with phone-in orders.
Thus Place du Marché has a different position than its main rivals, subsidiaries of supermarket
distribution firms which mainly sell over the Internet and focus on more urban customers.
A regional presence
Like the "Frozen Foods" business, Place du Marché focuses on communities with fewer than 10,000
inhabitants often not served by local food stores. The company addresses a significant demand. Its
sales network, call centre currently employing a workforce of 40, 17 delivery depots, and a 16,000 m²
sales orders preparation centre in Châlon sur Saone able to handle up to 8,000 orders per day,
enable Place du Marché to cover north-eastern France. Today Place du Marché delivers about 63,000
customers.
Over 3,200 quality products
A range of over 3,200 products, comprising fresh foods, groceries, pharmaceutical and hygiene
products, is offered customers each week by telesales agents via the Place du Marché catalogues. As
with the "Frozen Foods" business, products are selected for their quality and originality.
Active, effective canvassing
By copying the "Frozen Foods" know-how in telemarketing, Place du Marché attracted 45,000 new
customers in 2008. Thanks to its intensive telemarketing and field canvassing activities, the "Fresh
Foods and Groceries" business expanded its geographical coverage, developing its customer file in
the Clermont Ferrand, Saint Etienne, and Lyon regions.
The food market in France
French society continues to evolve with households becoming smaller and renewed population
growth in rural areas and big cities. French food consumption has been increasingly affected by
economic conditions. The food budget has shrunk, resulting in the need for modifications to
consumption patterns. At the same time, there has been renewed interest in the pleasures of
cooking and price factors have become increasingly decisive.
A changing population
On January 1, 2009, the population of metropolitan France and its overseas departments was
estimated at 64.3 million inhabitants. With 801,000 births, metropolitan France is once again at the
level it was in 1981. Life expectancy remained stable in 2008. The elderly are increasingly numerous:
5.6 million people aged 75 and over live in France, a third more than a decade ago. (Source: INSEE)
Households smaller
With an average of 2.3 persons per household, household numbers have continued to decline (they
were 2.4 in 1999). A third of all dwellings are occupied by one person, another third by households
with 2 persons. The number of families with children has stabilised thanks to the recent increase in
birth rates.
(Source: INSEE)
Renewed population growth in rural areas and large cities
While in the 80s and 90s the demographic dynamic of France mainly came from urban suburbs, the
rural population is now increasing at the same rate as the population of France as a whole. Although
the attractiveness of suburban areas remains intact, it is now accompanied by a significant rise in the
population of large rural areas.
At the same time, in large cities, population growth has shifted from the centre to the suburbs over
the past 30 years. This model is changing as many towns are now growing faster than their suburbs.
The new age pyramid and its consequences
In 2050, France is likely to have 70 million inhabitants with a life expectancy of up to 115 years.
However, thanks to the unexpected rise in birth rates, a stabilisation in the number of persons less
than 60 in the population is expected. This is contrary to forecasts made by INSEE in 2001:
researchers previously expected a decline in the overall population and a rise in the number of
seniors. Projections for future years are different: it is now expected that there will be a balance
between the young and those over 60 years of age.
(Source: RMC - January 16, 2008)
This scenario raises a number of issues:
•
the system of national solidarity will need to be redefined,
•
a home support policy for seniors will need to be introduced,
•
there will be a need to reintroduce local shops (currently almost one community in two has
no local shop).
• new needs for services for individuals will emerge.
(Source: Les Echos – June 9, 2006)
New spending patterns and high price sensitivity
Since the 1990s, food market growth has continued but at a slower pace. Since 1970, the position of
food in household budgets has continuously declined.
Given today's economic context, declining purchasing power has become a major concern and
prompted the French to adopt expenditure decisions detrimental to the food budget (for example, in
favour of new technology products or "essential" spending such as housing).
(Source: Crédoc - February 2008)
Price has become a dominant factor in consumer choice criteria
However, price sensitivity in the majority of the food market has been growing: 24.5% of households
report that they select cheap products compared to 23.8% the year before. Households are
becoming less interested in large food supermarkets and the frequency of visits has been falling,
resulting in greater competition.
(Sources: Toupargel Market review- March 13, 2007)
A return to the pleasure of cooking: conviviality and financial advantages
Rising food prices have affected the sales growth of processed products, considered too expensive.
The economic crisis has prompted consumers to cut back on superfluous expenditures and the
number of high added value products has fallen in volume terms (prepared meals, low fat products
etc.).
At the same time, there has been renewed interest in cooking, reflecting the desire for a varied diet.
Synonymous with a convivial atmosphere, cooking has become a new leisure activity. Cooking classes
have become more generally available and have grown, in particular thanks to widespread media
dissemination.
Preferred recipes are fast to prepare and made with products that are easy to use: quick, easy and
economical cooking.
In contrast, young people of 15 to 24 years of age, singles and smaller households, continue to
consider cooking as a chore and try to spend as little time as possible in the kitchen. A perception
often associated with related activities (dishwashing, shopping etc.).
They nevertheless remain interested in the economic advantages of cooking unprepared food
products.
(Source: Crédoc - December 2008)
Health and diet
Nutritional balance: an increasingly controlled market
Increasingly interested in questions of nutritional balance, the French are gradually beginning to
change their eating habits. However, although they have become very aware of the problems
associated with being overweight and its impact on health, they have difficulty in modifying their
nutrition. Only 26% of the French population claim they eat 5 fruits and vegetables per day, reflecting
a lack of choice and the high cost of such products. Since 1997, the French have gained 2.1 kg in
weight and the number of obese persons has increased 40% to reach 5.9 million. As a result,
nutritional issues have been gaining importance. In 2006, one product in three launched in France
claimed a health benefit. To clarify the product offering vis-a-vis consumers, new European
legislation, applicable since July 2007, concerning "claims on health or nutritional content", have set
guidelines for health claims. A list has been drawn up, with precise quantifiable values. Industrial
companies have to provide scientific proof of the virtues supposedly provided to the nutritional wellbeing of individuals. In addition, products have to comply with a nutritional profile, part of the
concept of "balanced nutrition". Products must neither be too fatty, nor too salty or sugary, if they
are to be able to claim a health benefit or simply make a nutritional claim.
(Sources: Linear-April 2007, LSA - May 2007)
Food Allergies
Food allergies affect between 2.1% and 3.8% of the French population, almost 600,000 people. This
figure is constantly increasing, and numerous cases remain undetected.
Food allergies mainly affect children, 8% are concerned. Children are most susceptible to allergies
between the age of 1 and 3 years.
There is a wide variety of allergens. Children are usually affected by allergies to egg white or peanuts.
Adults are more sensitive to drupacae* and umbelliferae*. There are many different symptoms of
food allergy. They can range from hives to eczema to stomach pains. However, the main fear in the
event of an allergy is anaphylactic shock, which can be fatal. In France, legislation requires that all
ingredients be listed on the packaging. However, brands offering specific products are still scarce,
making it difficult for people with allergies to find products that suit them.
*Drupacées: Apple, Hazelnut, Peach, Pear, Apricot, Plum, etc.
Umbelliferae: Celery, Carrot, Fennel, Parsley, Cumin, Anise, etc.. (Source: National Nutrition and
Health program).
Official quality labels have received a mixed reaction
Quality labels and information on the origin of food products have for some time provided greater
visibility on products, in particular during health crises.
Price concerns have however begun to take precedence over quality concerns. Since 2000, rising
sensitivity to prices has contrasted with a decline in concern over food safety issues.
However, in addition to changing consumption patterns, there has also been a decrease in perceived
health risks. This observation depends on several criteria:
• generation: the young are the least interested in buying a product with a quality label,
• type of products: in 2007, almost 6 out of 10 French consumers were willing to pay higher prices
for meat and poultry if they had an official quality label. For other products, fewer French consumers
are ready to pay more, just under half for fruits and vegetables and only 25% for prepared meals,
• the type of label: only 2 labels have maintained a good image with consumers: "Label Rouge"
(mainly for meat and poultry) a guarantee of good taste and food safety, and the "AB Agriculture
Biologique" label (associated with high perceived risk concerning the pesticide treatment of crops).
(Source: Credoc - December 2008)
Soaring agricultural prices
A dramatic increase in the price of agricultural commodities occurred in 2007 and 2008. According to
the FAO (Food and Agriculture Organisation), in one year, cereal prices increased by 131%. The price
increases were due to a combination of factors. In the first place, soaring oil prices increased the cost
of transportation and, de facto, costs throughout the food chain.
Growing global demand
Emerging countries' growth
The emergence of a middle class in India and China has boosted meat consumption to global levels
and at the same time increased demand for grain, the staple food. Exporting countries have become
importers. This situation has weighed on stocks and markets. For milk, Europe is no longer able to
meet its needs: although households drink less milk, they eat more cheese and fresh dairy products.
The biofuel boom
Biofuels, hitherto too expensive to produce, have become more profitable with rising oil prices.
However, the European Commission in Brussels has put the impact into perspective, indicating that
bioethanol produced from sugar cane has not resulted in higher sugar prices.
Adverse weather conditions
Many producing countries suffer from poor weather that has endangered crops (excess rain in
Europe and the United States, drought in Russia, Canada and Australia).
Commodity stocks lower
Low stocks have pushed certain countries to limit or halt their exports in the hope of providing
support for their domestic markets (including Egypt and Thailand for rice).
Difficult choices for farmers
The decline in milk prices between 2003 and 2006 discouraged many producers. The rising cost of
grain, the staple diet of cows in winter, has weighed on profitability and as a result dairy herds have
fallen in France. Choices have also had to be made between crops destined for food production and
those destined for energy production.
Speculation
Following the bursting of the US property bubble, investors turned to raw materials as a safer way of
investing. Raw materials have become a new investment haven.
(Sources: BBC News - April 2008, Libération - April 2008, 20 minutes - April 2008, Le Monde -2007, Les
Echos - 2007)
What are the consequences for food consumption ?
Against a background of rising general inflation, food prices reached an annual rate of price inflation
of 7% in July 2008. The realities of lower purchasing power has exacerbated the pessimistic attitude
of French consumers. However, over the last half of 2008 a decline in commodity prices occurred as a
result of the slowdown in the international economy. Over 2008 as a whole, food prices rose
(1)
3.10% . Consumers have changed their buying habits. Increasingly consumers seek promotions,
make fewer "spur of the moment" purchases and compare prices. A third of consumers say they
have moved into a lower product price range as a result of higher food prices. There has also been a
decline in the consumption of products with a high price image. In contrast, consumption of products
with a low per kilogram price has risen. Only products that offer pleasure or comfort have
maintained their position or grown: chocolate, pork products but also convenience products that
offer value for money.
(Source: Credoc - December 2008)
(1) Between December 2007 and December 2008 (Source: LSA – January 22, 2009)
Towards lower prices
Since 2008, agricultural raw materials prices and oil prices have fallen substantially. Cereal prices
halved in 2008 compared to 2007 and oil prices have fallen by two thirds since July 2008. Food prices
began to decline in late 2008 but the decline has been limited. In January 2009, it was only 0.1%
compared to December 2008.
(Source: INSEE)
The frozen foods and ice cream
market
Products and services adapted to new lifestyles
In 2007, the market for frozen foods consumed at home captured 98% of French households
(households that buy at least once in the year, all types of distribution channel combined). The
market grew 0.7% in 2007 and represented sales of around €5.7 billion. The rise in the consumption
of frozen food products over the last 10 years can be explained by changes in lifestyles (timesaving
and better quality foods) as well as improvements in the quality of equipment with deep freezers and
microwave ovens.
(99.1% of households have a refrigerator, 61.6% a deep freeze and 84.9% a microwave oven),
changes in the family structure (greater number of singles and couples without children), less time
for preparation of meals and meals that are increasingly flexible (nutritional nomadisme resulting
from professional and family constraints), a wider range of products with quality foods that combine
practicality and fast preparation.
(Source: TNS SECODIP, Gifam)
Movement in appliance sales in France
Thousands of appliances
Refrigerators
Freezers
Microwave ovens
(Source: Gifam)
2004
2 310
785
1 965
2005
2 330
770
1 925
2006
2 428
775
2 007
2007
2 330
730
2 010
2008
2 280
700
2 126
1990
98.0
44.0
20.0
2001
96.8
55.1
73.6
2003
98.3
58.0
77.9
2005
99.2
62.3
81.8
2007
99.1
61.6
84.9
Changes in the household equipment rate
As %
Refrigerators
Freezers
Microwaves
(Sources: INSEE, Sofres)
Home delivery of frozen foods: another way of consuming
With sales of around €1 billion and 4 million household consumers, home delivery of frozen foods is
the second largest distribution system for frozen foods after hypermarkets/supermarkets. It is a
market that cannot be compared to frozen food sales in traditional stores. Firstly, the motivations of
clients that purchase from home delivery companies are specific: they are looking for easy
purchasing (no need to travel), respect of the cold chain and, lastly, quality and choice of products
compared to traditional shops.
Home delivery of frozen foods mainly occurs in semi rural areas and is based on two different sales
approaches:
Immediate sales from store trucks:
In this case, salesmen make their rounds in a heavy truck, a travelling shop containing some 250 to
350 product references. In 2008, store truck sales represented more than €100 million, i.e. 10% of
the market.
(Internal sources)
Sales followed by delivery:
Orders are taken by itinerant salesmen or tele-salesmen. In this situation the sales, logistics and
delivery functions are separate. This requires call centres (to take orders by phone), industrial
resources (order preparation platforms) and delivery vehicles. Telephone selling is the main sales
method in this market; Toupargel was the precursor.
The French market for home consumption of frozen foods and ice cream in 2008
In 2008, despite the difficult consumption environment, the market for home consumption of frozen
foods and ice cream resisted. In value terms, it remained stable compared to 2007. However, trends
differed depending on the distribution channel. Hard discounters attracted a growing number of
consumers with referencing of national brand products, while hypermarkets and supermarkets
benefited from price inflation and a more favorable product mix. Specialised shops, practically
entirely dominated by Picard and Thiriet, remained buoyant as a result of the opening of new shops.
However, home delivery lost ground. The Syndigel panel (comprising Toupargel, Thiriet, Argel and
Picard for home delivery) suffered a decline in sales of 1.3% compared to 2007.
(Source: TNS Wolrdpanel, Syndigel)
The weight of the various distribution channels in the market for frozen foods for home delivery
(value)
Others
Home delivery
Specialised stores
Hard Discount
Hyper + supermarkets
(Source: TNS Worldpanel)
The French frozen food market in 2008
Value in €bn
Frozen foods
Ice creams
Total home consumption
4.70
1.01
5.71
Change
2007/2008
+0.0 %
+3.0 %
+0.7 %
Volume
1,060,000 tonnes
241 million liters
Change
2007/2008
-2.0 %
+0.5 %
A seasonal market
Sales of products are subject to a certain amount of seasonality throughout the year. The timing of
Easter in the calendar can affect sales at the beginning of the year.Summer weather has an impact on
sales in July and August, in particular ice cream sales. The month of December is a busy period
because of the end of year holiday period.
Players in the market for home delivery
In France, the market for home delivery of frozen foods to individuals is relatively concentrated.
Toupargel is the leader with a 35% market share.
(Source: Syndigel)
The three companies Thiriet, Maximo and Argel, represent more than 48% of the market. Regional
players (Croquegel, La Banquise, Bofrost, Eismann ...) share the remaining 17%.
Thiriet
This family group, based in Eloyes in the Vosges (3,000 employees), generated consolidated sales of
€391 million (+2.1% compared to 2006) in 2007, an operating profit of €21.2 million and consolidated
net income of €18.3 million. It is positioned in two complementary business areas:
- the manufacture of frozen pastries and ice cream, the historical business of the Group. Thiriet is
now the third largest manufacturer of ice cream (after Unilever and Nestlé) in France, with a
production plant based in Eloyes (Vosges),
- the distribution of frozen food products with two distinct sales channels:
• home delivery to individuals (61% of consolidated sales): employing a home sales delivery system
based on remote delivery, the company prepares and delivers orders to homes for more than one
million customers in France. 5 order preparation platforms (located in Eloy, Cherré, Rosieres,
Labastide Saint Pierre and Donzère), 90 distribution centers, a Call Center and 600 delivery trucks;
• distribution in stores under the Thiriet brand (22% of consolidated sales) through 170 stores
(France, French overseas territories).
Thiriet has also forged partnerships with foreign distributors
(Japan, Portugal, Switzerland, Netherlands, Korea and Morocco) and
continues to distribute frozen food products to professionals
(Sources: www.thiriet.com, Thiriet annual financial statements)
Maximo
This family group, based in Reims, achieved consolidated sales of €281 million in 2007 including 58%
for the home delivery of frozen food products (internal source with reserves). Historically positioned
in the delivery of dry goods, groceries and hardware to individuals, the group has been engaged in
home delivery of frozen foods since 1980. The company has 2,700 staff, 2 storage and preparation
platforms (Alençon, Verdun), 1,200 trucks and over 50 agencies. It has 600,000 customers in the
northern half of France using two sales systems (pre-ordering and telesales).
(Sources: www.maximo.fr, Maximo annual financial statements)
Argel
The 4th distributor of home delivery frozen foods is a subsidiary of Even, an agricultural cooperative
with more than 2,000 Brittany farmers which generates sales of around €900,000 from 4 distinct
activities (dairy products, meat and fresh cooked dishes, frozen foods, nutrition and distribution). In
2007, Argel generated sales of €76 million. The company 70 850 staff, 2 order preparation platforms
(Nimes and Landerneau) and 70 delivery agencies. The company generates more than 2 million
orders per year from telesales and delivers to 300,000 households throughout France, with the
exception of the eastern region.
(Sources: www.argel.fr, Argel, Even)
Distribution of the French market for home delivery of frozen foods in 2007
The European market for frozen products
European consumption of frozen foods and ice cream
The European market for the consumption of frozen foods was estimated to be 35.9 billion euros in
2005 including 23 billion euros for household consumption. The United Kingdom and Germany are
the main markets in Europe with sales estimated at 6 billion euros in 2005.
(Source: Datamonitor)
Per capita consumption of northern European countries is the highest in the world. It varies greatly
from one country to another throughout Europe. Sweden has the highest consumption of frozen
food products per capita.
Demographic and social trends accompanied by a shift in eating habits have greatly facilitated these
developments. The development of women's working, an aging population and single-parent
households have encouraged demand for convenience products which are ready to cook and which
require less preparation time.
Prospects for the European market
The European market for the consumption of frozen foods was estimated to be 41.1 billion euros in
2009 corresponding to an annual average growth rate of 3.4% between 2005 and 2009.
Belgium is likely to have had the fastest growth rate between 2005 and 2009 (average annual growth
of 4.5%) followed by Germany (average annual growth of 3.8%).
Movement in the consumption of frozen foods in Europe (billions of euros)
(e) Estimated (Source: Datamonitor)
Players in the home delivery of frozen food products in Europe
With respective sales of around 1.1 billion euros and 600 million euros, Bofrost and Eismann
(German companies) are the main players in the home delivery of frozen food products in Europe. In
Germany, a market equivalent to that of France with 1.1 billion euros, these two companies have
gained a dominant position with a 70% and 29% market share respectively. They are also located in a
number of European countries.
(Sources: Bofrost, Eismann).
Bofrost:
A leader in the direct distribution of frozen food products in Europe with 239 branches located in 12
countries (Belgium, Luxembourg, Italy, France, Slovenia, Croatia, Greece, Spain, Austria, Netherlands
and Switzerland). The group employs 9,600 persons and has over 3,000 store trucks which deliver to
4.2 million consumers. Positioned in France since 1995, the company generated sales of €30 million
from home delivery to individuals. Over 300 employees are spread over 11 agencies. The group seeks
to develop further in the North, East and South of Europe.
(Sources: Bofrost, Bofrost annual financial statements).
Eismann:
In April 2007, the company was sold to management and the Intermediate Capital Group plc. (leader
in Europe in independent mezzanine financing), formerly owned by the Scholler group from 1996 to
2002, and Nestlé from 2002 to 2004, the company is specialised in home delivery of frozen foods by
store trucks. Since its merger with Family Frost in December 2007, Eismann operates in 15 European
countries (mainly Eastern Europe). The company employs 6,500 persons. It delivers 1,350 products
under the Eismann brand (including 400 in Germany) to 3 million customers throughout Europe.
Eismann adapts its delivery and order taking system to the specificities of each country and town.
The group is structured as a network of franchisees and favours direct delivery, except in major
urban areas where telephone order taking is preferred. In 2007, Eismann acquired an ice cream
manufacturing plant in Hungary. In France, the company generated sales of €82 million in 2007, of
which 50% from home delivery to individuals. Eismann also has a unit specialised in corporate sales,
but only in France. With 27 depots and 300 trucks, Eismann delivers in Alsace, the Nord Pas de Calais,
Ile de France, Normandy, Pays de la Loire, Poitou-Charentes, Limousin and the South West. (Sources:
Eismann, www.eismann.de, Eismann annual financial statements
Country
Germany
Austria
Belgium
Major players in home delivery in Europe
Bofrost, Eismann
Bofrost, Eismann
Bofrost, Eismann, Ijsboerke, Ijspaleis
Spain
France
Italy
Netherlands
Bofrost, Eismann
Toupargel, Thiriet, Maximo, Argel, Bofrost, Eismann, Gimbert
Surgelés, Croquegel, Picard, La Ferme du Froid, La Banquise,
Maison Ricot, Frigedom
Bofrost, Eismann
Bofrost, Eismann, Fribo, Ijskoning, Ijspaleis De DiepVriesMan
Switzerland
Bofrost, Eismann
Home delivery of food and grocery
products: an evolving market
Home delivery: from the rural grocery shop to the e-marketplace
Home delivery of food products was revived in the mid 1990s, a trend that corresponded to the
growing role of services in retailer strategies, particularly local supermarkets. More recently, national
retailers have seized the opportunity offered by the Internet to launch e-marketplaces. The
population using these services is highly diversified, although the extent to which such services are
used rises sharply with income and the presence of children in the household.
(Source: Crédoc 2002)
The market can be classified as follows.
Rural grocery shops
These consist of fragmented companies with limited product lines and which generally make weekly
rounds.
Local urban stores
Home delivery is an additional service offered to customers.
E-marketplaces
In France, e-commerce sales have been estimated at €20 billion in 2008, up 29% compared to 2007.
22 million French people purchase from the internet, an increase of 2.5 million in one year.
(Source: FEVAD)
Among the fastest increases the Médiamétrie Observatory of Internet Use has noted is an influx of
new e-shoppers among pensioners (+58%). The share of e-shoppers in this category is now growing
seven times faster than among the 25-34 year age bracket. There has also been a significant increase
in provincial purchases (20%) and women (16%). Lastly, the increase has been higher among the
middle classes than the affluent where online buying has become an almost universal practice for
more than 80% of this population. In 2008, the average amount of a transaction remained stable at
91 euros, a result of the deteriorated economic situation coupled with the phenomenon of declining
prices that seems to have gathered pace in late 2008. E-markets have been profiting from the
growing maturity of e-commerce and e-purchasers. 11% of Internet users bought food products
online between December 2007 and May 2008. The e-market model is taking form with a larger
product offering, better control of logistics, improved service quality, more ergonomic websites and
more affordable delivery prices. Less than a dozen internet sites offer an e-commerce service in the
general food segment. The main ones are Ooshop (renamed carrefour.fr in 2009 - Carrefour Group),
Telemarket, Direct Auchan (Auchan Group) and Houra (Cora). In recent years, launches have
gathered pace. In April 2007, Franleader, the master franchisee of Franprix-Leaderprice and
Intermarche launched online sites, followed in September 2008 by Monoprix (Galeries Lafayette,
Casino). These companies accept orders by internet and to a lesser extent by telephone (incoming
calls). They mainly deliver in Paris and the Paris region but over the last three years have developed
in the major provincial cities. The overall market was worth more than €350 million in 2007.
(Source: LSA)
The average shopping basket of an e-marketplace buyer is between 160 and 170 euros (compared to
34.60 euros for an average trolley in a supermarket)
(Source: Distripédie).
Maximo
The company is positioned in the delivery of dry goods, groceries and frozen foods. Maximo achieved
sales around € 120 million in 2007 in the dry goods and groceries business.
(Internal source subject to reserves)
Its geographic coverage extends over the northern half of France. The product offering consists of
5,000 dry goods, grocery goods and hardware items. New orders are made by salesmen on the
ground in parallel with the "Frozen foods" business.
The main e-marketplaces in France
E-marketplaces
Sales (2007)
Auchan Direct
€77 million
Houra
€75 million
Ooshop
€73 million
Télémarket
€80 million
(Sources: company financial statements)
Movement
2006/2007
+ 35.9%
+ 12%
+ 8.0%
+ 38%
Operating income
2007
€0.4 million
€0.6 million
-€15.7 million
NC
E-marketplaces in Europe
Like the French market, the European market is shared among a number of local e-marketplaces.
Globally, Switzerland, after England, is in second position in terms of spending per capita in online
supermarkets, far ahead of France, Germany and the United States.
(Source: leshop.ch)
In Britain and Switzerland, two players dominate.
The British group Tesco
Through its subsidiary, Tesco.com, it is the world’s leading e-marketplace with a customer base of
one million. In Britain, the company prepares orders based on a system of store picking and each
week delivers 300,000 orders using a fleet of 1,900 vehicles. Drawing on its success, Tesco has
dedicated a warehouse in the south of London to relieve picking in stores. Sales from this activity
rose 31% to €1,606 million in 2007 (€1,800 million, EUR/GBP as of March 4, 2009). Profit before
exceptional costs increased by 49% to €124 million (€139 million EUR/GBP as of March 4, 2009).
Expansion has taken place in the US (where Tesco has 20 stores) and South Korea.
(Source: www.tesco.com)
In Switzerland, Leshop.ch
For a number of years, it experienced strong growth as a result of the strategic alliance it entered
into in 2003 with Migros, Switzerland's leading retailer. It now has a market share of 66% in
Switzerland and covers 90% of households. The company prepares nearly 30,000 orders per month
from its Bremgarten and Ecublens platforms and has subcontracted deliveries to its 46,000 regular
customers to PostLogistics. In 2008, Leshop.ch generated sales of 112 million CHF (€75.6 million,
EUR/CHF as of 4 March 2009), up 22% compared to 2007. The Migros Federation of Cooperatives
holds
90.5% of the capital of LeShop.ch SA. The remaining 9.5% is held by private investors.
To facilitate delivery of frozen food products to its customers, in March 2005 Leshop.ch entered into
a partnership with Eismann.
(Source: www.leshop.ch)
Financial Section
Corporate governance and operations
Shareholder’s and investor’s information
Group management report, recent changes and risk factors
Consolidated financial statements
Statutory auditors report
Corporate governance and operations
The Board of Directors
The Board of Directors helps define business strategy, monitors implementation, evaluates projects,
proposes the names of company directors to the General Meeting, overseas management control
and ensures the quality of information provided to shareholders is of a high standard.
Composition as of December 31, 2008
Messrs Roland Tchénio and Maurice Tchénio are brothers. Mr Maurice Sabah is the cousin of Messrs
Roland and Maurice Tchénio. There is no other family relationship between members of the Board of
Directors.
To the knowledge of the Company, no director has in the past been convicted for fraud, been
involved in a bankruptcy, receivership, liquidation, been incriminated or received an official public
sanction.
No member of the Board or management has, to the knowledge of the company, been prevented by
a court from acting as a member of an administrative, managerial or supervisory body of an issuer or
been prohibited from managing or supervising the business of an issuer over at least the last five
years.
Independent Directors
The Toupargel Group has two independent directors, Mr. Charles Waldman and Mr. Hartmut Kramer.
The proportion of independent directors is one third of the Board of Directors. A censor was
appointed in 2002. The entity in question is H & R Consulting, represented by Mr Paul Hurtut. The
directors and the censor have
been selected for their knowledge, judgement and experience. They have no relations of any sort
with the Company, Group or management which could compromise their freedom of judgement.
The Board does not have any Directors elected by employees. Members appointed by the Works
Committee attend meetings of the Board of Directors.
Access to Directors’ information
Prior to each Board of Directors meeting information is sent to members on the progress of the
group, its environment, and matters under discussion. A monthly report is sent to each member of
the Board of Directors.
Composition of the Board of Directors as of December 31, 2008
Function within
the Board; 1st
appointment –
term of office
expiry date
CEO
Roland Tchénio
65 years
1982 - 2012
French
Holds 5,377,442 shares of
which 2,877,844 shares via
the civil partnership TT
Investissements
Main position
Directorships held during past Biography
and other positions as of December five years which have expired
31, 2008
CEO Toupargel Group SA
Group Companies
Group Companies
 CEO
Agrigel:
merger in 2006
 Chairman: Toupargel SAS and
Place du Marché SAS
Listed company
HEC, MBA Harvard, 10-year
Toupargel career, from 1972 to 1982,
with
Schlumberger
and
Chargeurs, CEO Toupargel
Group since 1982.
 Vice Chairman of the Supervisory
Board of the VDI Group.
Unlisted companies
 Board member: Apax Partners &
Maurice Tchénio
Company
Director
66 years
French
Directly holds 129,000 1982 -2009
shares
and
indirectly
3,000,000 shares via
Apax Partners SNC
Maurice Sabah
64 years
French
Holds 4,000 shares
Charles Waldman
62 years,
French
Holds 50 shares
Company
Director
Hartmut Kramer
62 years,
German
Holds 400 shares
Company
Director
Cie Management, Apax Partners
SA, Financière Pierre Martinet and
Asvel Basket
 Manager: Société Civile TT
Investissements, SCI Mauryland,
Sarl Mauryland, and SCI Boulevard
Lannes
Chairman of Apax Partners SA
Listed companies
 Chairman: Apax Partners et Cie
Gérance SA, managing partner
of Altamir Amboise SCA
Unlisted companies
 Managing
partner:
Apax
Partners SNC
 CEO of Apax Partners SA
 Chairman: MMG SAS,
 Permanent representative of
Apax Partners SA within Morgan
International Participations
 Permanent representative of
Morgan
International
Participations within Morgan SA
 Permanent representative of
Apax SA within Rue du Commerce
 Manager
of
the
civil
partnerships: Galilée Partenaires,
Cimarosa, Lonchamp, Copernic
Partenaires, SE Wagram, SE Bizet,
Moussecarie, Etoile II
 Manager within Apax Partners of
the civil partnerships: Capri, Equa,
Firoki, Carmel.
 Permanent Representative
of Apax Partners & Cie.
Gérance
II
SAS,
management company of
Amboise Investments SCA:
term of office expired in
2005
 Chairman:
Société
Européenne Iéna SAS,
Apax
Partners
and
Compagnie Gérance II
SAS : term of office expired
in 2005
 Permanent Representative
of MMG SAS within Altium
Capital SA: term of office
expired in 2005 Permanent
Representative of Apax
Partners SA within Alain
Afflelou: term of office
expired in 2004
 Manager of the Civil
Partnership: Kleber (term
of office expired in 2004)
HEC, MBA Harvard, began his
career with IDI, then cofounded the Apax Partners
group in 1972. He is CEO of
Apax Partners SA (Private
Equity) and co-founder of
AFIC.
Unlisted companies
Board member: Coponat SA
Unlisted companies
EM Lyon, CEO of Roumi SA
Chairman: Roumi, Textim: term (import and export of textiles)
from 1970 to 2007.
of office expired in 2007
Professor at Insead
Unlisted companies
Director: Felix Solis Bodegas
(Spain): term of office expired in
2005
Listed companies
Listed companies
1982 - 2009
Company
Director
2001 - 2012
2002 - 2008
 Company director: Kingfisher plc  Director:
(UK), GSE SAS (France), Alfesca Ltd
(Iceland).

Herlitz
AG
(Germany): term of office
expired in 2005
Director: GSE SAS (France):
term of office expired in
2007
ESSEC, a masters degree in
economics, DBA Harvard
Business School, Professor of
Marketing at INSEAD since
1982,
specialised
in
distribution.
MBA Harvard, has exercised
the following functions: board
member of the Fissler Gruppe,
vice-chairman
of
the
Tengelmann
Gruppe,
managing partner of Peek &
Cloppenburg, chairman of the
Redcats group and member of
 Director:
Alfesca
(Iceland): term of
expired in 2006
Pierre Novarina
56 years,
French
Holds 15,658 shares
Company
Director
2004 - 2010
Deputy Chief Executive of the
Toupargel Group
Unlisted companies and organisations
 Company director: Fermob SA

Middlenext
(mid-cap
stocks
committee), Syndigel (professional
association).
Manager: SCI Mapahua
Ltd. the board of PPR.
office
Degree from ESCP and
chartered
accountant,
Deloitte from 1975 to 1985
(audits,
consulting
and
valuations), he joined the
Group in 1986 and is deputy
Chief Executive and Director
of Administration, Finance
and Communications.
The censor
H & R Consulting
Manager Paul Hurtut
64 years
French
Holds 1,000 shares
Censor
2003 - 2009
Consultant
 Director:
Longrine HEC, audit and consulting
Communication
and missions in Andersen France
 Member of the audit
Editions de l’Aube: term for the last 30 years;
and risk committees
of office expired in 2004 responsible for the food and
 Chairman of the Audit

Active
member of Apia, beverages sector. Resigned
Committee of Ferrero
Association
of from his position as senior
France
Independent Directors: partner in August 2001.
term of office expired in
2004
Operations
The Board of Directors has internal regulations (see below). These regulations describe the
responsibilities of the Board, its composition, its functioning (frequency, meeting place, in particular
for the board meeting). It recalls the duties of the Directors: compliance with laws and statutes and
company interest, independence, loyalty, professionalism, ownership of shares, transaction reporting
obligations.
The rules recall the necessity of a periodic evaluation of the Board with as objective a review of
Board operating procedures to ensure that important issues are suitably prepared and discussed and
to assess the contribution of each director in the work of the Board. A Board evaluation was initiated
at the Board of Directors meeting of October 28, 2008. A discussion has been placed on the agenda
of the Board of Directors meeting of April 28, 2009. The previous evaluation dates from November
14, 2006. To the knowledge of the company, there are no conflicts of interest between Board of
Directors and Officers’ duties to the Group (and/or other duties) and their private interests.
Board of Directors meetings held in 2008;
Four meetings of the Board of Directors were held during FY 2008, on February 15, April 25, July 29
and October 28, 2008. A meeting was also held on February 20, 2009. 100% of members attended
Board meetings held in 2008; The College of Statutory Auditors also attended the meetings. The
meetings were devoted to examining reports and projects, as well as the annual and periodic
company and consolidated financial statements and holding hearings with the Audit Committee.
Powers of the Managing Director
Following the decision of the Board of July 5, 2002 not to separate the functions of Chairman of the
Board from those of Managing Director, no formal restriction has been placed on the powers of the
Managing Director.
Agreements
Regulated agreements entered into during FY 2008 or prior years are the subject of a report of the
Auditors which is included in this report. Ordinary agreements entered into under normal conditions
are included in a list provided to the Board of Directors by the Statutory Auditors and available on
request to shareholders.
Directors' interests
• The Toupargel Group has no operating relationship and has not entered into any agreement or
arrangement with outside companies for whom members of the Board of Directors are company
directors or managers, with the exception of Asvel Basket, for which Mr. Roland is a director and for
which the Toupargel Group is a team sponsor, this being a regulated agreement (see the special
report of the Statutory Auditors).
• Toupargel Group SA and its subsidiaries have not granted any loans or guaranteed any debt of
members of any administrative bodies or external bodies of the Group with common directors.
As of December 31, 2008, shares held by members of the Board of Directors represented 84.41% of
the capital and 91.07% of the voting rights.
• A member of the Board, Mr Peter Novarina, has an employment contract with the Toupargel
Group. As Deputy Managing Director, he is not considered to be the chief executive. Mr. Roland
Tchénio, Chairman, receives a remuneration from the Toupargel Group.
• In February 2005, Mr Roland Tchénio contributed 2,800,000 shares of the Toupargel Group civil
partnership to TT Investments of which he is the managing partner. During Q1 2008, TT
Investissement acquired 975 shares, during Q2 2008 6700 shares and during Q3 6,800 shares, i.e. a
total of 14,475 shares in 2008. Mr Pierre Novarina sold 6,000 shares in July 2008. Finally, Mr. Paul
Hurtut, representative of H & R Consulting, censor, acquired 1,000 shares in December 2008.
Summary table of remuneration and options granted to directors
In €000s
Mr Roland Tchénio, CEO
Compensation due for the year
Value of options granted during the year
Value of options granted during the year
Total
Mr Pierre Novarina, Finance director
Compensation due for the year
Value of options granted during the year
Value of options granted during the year
Total
2007
2008
188
None
None
188
188
None
None
188
161
None
None
161
161
None
None
161
Summary of the remuneration of each company director
Name and position
Mr Roland Tchénio, CEO
Fixed remuneration
Variable remuneration
Exempt remuneration
Directors’ fees
Total
Mr Pierre Novarina, Deputy Managing
Director
Fixed remuneration
Variable remuneration
Exempt remuneration
Directors’ fees
Total
FY 2007
Amounts due and paid
in €000s
FY 2008
Amounts due and paid
in €000s
188
None
None
None
188
188
None
None
None
188
148
13
None
None
161
154
7
None
None
161
Mr. Pierre Novarina as an employee benefits from the profit sharing scheme.
Table of Directors' fees
Directors' fees are reserved for independent directors
Member of Board of Directors
Mr Hartmut Kramer (1)
Mr Charles Waldman
Total
(1) Includes fees paid for Audit Committee work.
Directors’ fees
paid in 2007 (€000s)
18
2
20
Directors’ fees
paid in 2008 (€000s)
20
12
32
Fees
paid in 2007 (€000s)
Fees
paid in 2008 (€000s)
Table of fees paid
Censor
H & R Consulting represented by Mr
Paul Hurtut (1)
10
26
(1) Includes participation in the Audit Committee, Risk Committee and a Working Group on the CNIL.
Stock options granted during the period to each company director
Name of Director
Plan
Date
Type
option
Mr Pierre Novarina
2008
Purchase
of
Value
options
€22,185
of
Number of
options
granted
15 000
Stock options exercised during the period by each company director
None
Exercise
Price
Exercise
period
€25.75
2010-2013
Stock granted during the period to each company director for performance
None
Stock that became available during the period to each company director for performance
None
Record of stock option grants
Date of Board of Directors meeting
2003 Plan
15 February
2002
June 28, 2003
Total number of shares that can be subscribed or purchased
185 900
- By Peter Novarina
Starting date for the exercise of options
20 000
June 28, 2005
Expiry date
June 28, 2009
Subscription or purchase price
Number of shares purchased
Stock options remaining at year end
€8.75
20 000
-
Information on stock options
Meeting dates (subscription scheme)
2008 Plan
April
27,
2007
April
25,
2008
200 000
15 000
April
2010
April
2013
€25.75
None
15 000
26,
25,
Stock options granted to top 10 employees not company directors and options exercised by them
Number of options
granted
Options granted during the financial
year
Options exercised during the
financial year
2003 Plan
2008 Plan
200 000
Weighted
average
price
€1.479
None
112 500
None
-
None
None
Additional information on the remuneration of company directors
•
There is no leaving bonus. The pension scheme is that in place for all executives in the
company
•
There is no arrival bonus in force in the Group. There is no specific pension plan for company
directors
• Company directors receive no compensation under a social clause. Neither Roland Tchénio nor
Pierre Novarina benefit from non-competition benefits, nor can they receive severance benefits.
Deferred Compensation
Director concerned Mr Pierre Novarina
Provision for pensions recognized
Provisions for seniority awards recognized
Total
(in €000s)
69
6
75
2008 (in €000s)
70
7
77
Other information on management compensation
In €000s
2007
11 persons
1 359
2008
10 persons (1)
1 343
Executive Committee Remuneration
(see composition page 28)
(1) : Mr Yves Lebastard, HRD, coming to the end of his term of office has not been taken into
account.
Compensation paid to the five and ten top highest-paid officers
In €000s
Toupargel Group (5 persons)
Toupargel SAS (10 persons)
Place du Marché (10 persons)
2006
632
1 236
385
2007
675
1 243
396
2008
675
1 183
360
Board Committees
The Strategy Committee
Chaired by Roland Tchénio, it includes Maurice Tchénio, Pierre Novarina (directors) and key
managers of the Toupargel Group. Its purpose is to discuss Group strategy after receiving full
information and prepare for implementation of policy decisions.
It met once in 2008. The attendance rate was 100%.
The Audit Committee
The committee is chaired by Mr Hartmut Kramer, independent director, assisted by H & R Consulting,
represented by Mr Paul Hurtut. An Audit Commitee charter has been drawn up as well as guidelines
and a detailed timetable. The charter sets out the mission of the committee (assist the Board of
Directors in its supervisory role), its composition, functioning, level of authority, responsibilities and
objectives. The Audit Committee met four times in 2008. The attendance rate was 100%. During its
meetings, the Audit Committee came to an opinion on the annual and periodic financial statements
and auditioned the Statutory Auditors. It obtained information on risk control and internal control
within the Group and auditioned several directors.
Members of the Audit Committee attended two meetings of the Risk Committee (see section on
functional organization).
The Remuneration Committee
The Remuneration Committee comprises Mr Maurice Tchénio, chairman, and Mr Maurice Sabah. It
met en December 4, 2008. The attendance rate was 100%. Its scope of action goes beyond work on
the remuneration of company directors (only one person is concerned, Mr. Roland Tchénio). It
defines the general remuneration policy of the management team. It gives advice and guidance on
the "incentive" system for sales executives. It gives advice and guidance on recruitment, training and
staff assessment.
Other Committees
The Board has not established a selection and appointments committee. The Board deals directly
with all questions normally the responsibility of this committee.
Control
The report of the Chairman on internal control
Pursuant to Article L. 235-37 of the Commercial Code and in accordance with the law of July 3, 2008
implementing the provisions of European law on corporate governance and internal control (4th and
7th EU directives), the report of the Chairman of the Board of Directors is designed to provide a
report to the shareholders on the conditions governing the preparation and organisation of the work
of the Board of Directors as well as procedures for internal control and risk management put in place
by the company.
This report was prepared by the Chairman with the assistance of the Group Finance Department. It
was reviewed by the Audit Committee on February 20, 2009 and approved by the Board of Directors
on February 20, 2009.
Given that various business activities of the company are carried out by subsidiaries, this report
covers all controlled companies included in the Group consolidation scope.
Toupargel has two business segments:
• the "Frozen foods" activity with Toupargel,
• the "Fresh foods and groceries" activity with Place du Marché.
This activity represents 5% of business volume. As of March 28, 2003, the Group changed
considerably in size with the acquisition of Agrigel, whose annual sales on an annual basis amounted
to nearly 2.5 times the sales of entities within the 2002 accounting scope. This led to changes in the
organisation and functioning of the Group. Since 2003, new structures have been put in place as
described in the "Corporate Governance" and "Operations" sections of the annual report.
Corporate governance
Reference Code
Toupargel Group has based its governance on the AFEP – MEDEF code of conduct (available on the
websites of AFEP and MEDEF) while awaiting a specific code for mid-cap stocks.
It is recalled that:
•
the functions of Chairman and Managing Director have not been separated in order to
ensure consist policy. There is no limitation of power for the latter function;
•
the company does not have a selection or appointments committee;
•
the remuneration committee does not include an independent director. Its responsibilities
were expanded to include executive remuneration policy in general as well as recruitment and
training policies;
•
only one director has an employment contract, Mr Peter Novarina, Deputy Managing
Director, not considered to be the Chief Executive;
terms of office are six years to ensure stability and continuity in carrying out the missions of the
Board.
Conditions governing the preparation and organisation of the work of the Board of Directors
The composition of the Board of Directors, its rules, tasks, methods of operation, are dealt with in
the "Corporate Governance" section of this report.
The Board of Directors comprises six members and a censor. Two directors and the censor are
considered as independent. The board has internal regulations (published in this report) which
outline the rights and duties of board members in addition to legal, statutory and regulatory
requirements.
The Board of Directors met four times in 2008. The attendance rate was 100%. Documents are sent
to members prior to each meeting to facilitate preparation of subjects for discussion. In addition,
directors receive a monthly report on the Group’s business. In 2008, the Board finalised the annual
and quarterly financial statements, reached decisions on documents to be sent to shareholders and
investors, the stock option plan and strategic projects.
The Board periodically conducts a self-evaluation. In 2008, a self-evaluation was launched during the
last meeting of the Board and its analysis has been placed on the agenda of the Board of Directors
meeting of April 2008, 2009.
The committees of the Board, namely for Toupargel Group, the strategy committee, audit committee
and remuneration committee. Their composition and missions are described in the "Corporate
Governance" section.
The Strategy Committee met once in 2008 and worked on major projects underway as well as future
projects. The Audit Committee met four times in 2008, prior to the Board of Directors meetings. The
Remuneration Committee met once in 2008. The attendance rate was 100%.
Remuneration paid to directors
•
Independent directors are paid attendance fees (€2,500 per session in 2008) for their
participation in Board meetings and specialised committee meetings (audit committee only).
•
The censor is paid attendance fees (€2,500 per meeting in 2008) for participating in Board
meetings and audit committee meetings.
•
Other directors receive no compensation for attending Board meetings or committees.
•
Mr Roland Tchénio, CEO, receives a remuneration (fixed only) from Toupargel Group,
determined in the framework of the remuneration committee.
•
Mr. Pierre Novarina, deputy managing director, receives a remuneration pursuant to his
employment contract with Toupargel Group which comprises a fixed element and a variable element
based on the achievement of the Group results objective and personal goals. He is a recipient of
stock options.
The summary tables of remuneration and related are included in the "Corporate Governance"
section.
Attendance at shareholders meetings
The way in which shareholders can participate in meetings are set out in the Articles of Association
(available from head office) and summarised in the "Legal Information" section of this report.
Internal control
Definition:
Internal controls in force in the company are designed:
•
to ensure that acts of management, execution of operations and conduct of staff fall within
the framework defined by the guidelines governing corporate activities, applicable laws and
regulations, and internal values, standards and rules of the company;
•
to analyse, prevent and control risks resulting from business activities as well as risks of
errors or fraud, in particular in the accounting and financial areas;
•
to safeguard assets;
to verify that accounting, financial and management information presented to corporate and
external entities fairly reflects the business situation of the company.
The control system cannot however provide an absolute guarantee that such risks have been entirely
eliminated.
Reference source used
The Group is progressively applying the reference framework and guidelines published by the
Financial Markets Authority.
Internal control processes
Control environment
Increasing awareness among staff: Group values, customer attention, operating excellence, ambition
and team spirit, are disseminated within the entities that comprise it when staff arrive as well as via
the integration process. The Group has drawn up a charter of ethics which was deployed at end 2007
at the beginning of 2008. The charter is based on five major principles, responsibility, respect,
transparency, trust and integrity. Similarly, delegations of authority have been put in place. An
internal "CNIL" commission has been set up (two meetings in 2008) to verify that recommendations
of the CNIL are respected, and if necessary make any changes that might be needed and increase
staff awareness.
Definition of functions and tasks: each item is described precisely and tasks and objectives are
reviewed regularly. Incentives are provided.
Delegations of authority: delegations of authority have been established in particular in the areas of
hygiene and safety, product quality, the environment, compliance with labour law and financial
legislation.
Staff Training: the training of staff in group businesses is designed to help staff carry out operations
within the Group.
Key Players
- The Board of Directors which helps define business strategy, monitors its implementation,
evaluates projects, proposes the names of company directors to the General Meeting, overseas
management control and ensures the quality of information provided to shareholders is of a high
standard. The Board of Directors has internal regulations (see below). A monthly reporting, put in
place in 2004, facilitates the monitoring of operations.
- The Audit Committee (see Corporate Governance), has a charter and guidelines.
- The remunerations Committee (see Corporate governance).
- The Risk Committee, responsible for mapping the risks that could affect the company and for
defining action plans.
- The internal "CNIL" commission (see above)
- The Executive Committee (its tasks are outlined in the "Operations" section
- The Departments
-Operational and functional managers including:
•
The Quality Department in charge of the quality management system, quality controls,
platform authorisations, consumer services and environmental standards;
•
The IT Department, responsible for the security and maintenance of information systems;
•
The Human Resources Department, responsible for enforcing laws, regulations and social
agreements and which implements human resources management policy;
•
The Finance Department and Management Control;
The Audit group, which has the dual task of monitoring the Quality Management System and Internal
Control.
Main references and actions
•
The identification of major risks: under the guidance of the Risk Committee, a mapping of
major risks has been carried out. The mapping is reviewed each year and recommendations
implemented. Risks associated with current projects are analysed more specifically. Risk analysis is
included in the risk factors section of this report.
The identification of occupational risks: under the guidance of the Human Resources Department, an
identification of occupational hazards has led to the creation of a "single document" for each entity,
and implementation of recommendations is monitored.
-The quality charter: The charter was drawn up in 2000 by working groups representing all business
units within Toupargel. It is one of the elements introduced in the context of the Quality
Management System development process which places customer satisfaction at the centre of the
concerns of the various departments.
•
The Quality Management System identifies corporate processes and describes them. It
assesses associated risks and determines how to control them, namely via control procedures
(manual and dissemination via the intranet), indicators and skills. Lastly, it sets action plans.
•
An environmental diagnosis was initiated in 2004. It aims to integrate environmental
concerns into our business practices.
- Procedures manuals: they describe procedures within each entity. They are also available through
the intranet.
Internal control processes relating to the preparation and processing of financial and accounting
information
Key Players
-The Group Financial Management Department in charge of consolidation, group reporting,
communications, financial planning and reporting to the Board of Directors.
-Management control (which reports to the Finance Department) and which produces financial
statements in liaison with the accounting Department, scorecards and budgets.
-The auditing of quality control is carried out by the Audit department.
Main references and actions
-Chart of accounts common to all Group entities.
-Cost accounting facilitating the monitoring of profit and cost centres.
-Consolidated and company financial statements process: planning of monthly, quarterly, yearly
financial closings.
- Revision manual facilitating the justification of the financial statements.
-Consolidation procedures: rules and accounting methods, consolidation documents and planning.
- Budget process and monthly monitoring.
- Procedures for identifying off-balance sheet items.
-Reporting: one format for internal reporting and documents for the Board of Directors.
- Financial communications: procedures, presentation and strict definition of roles.
The Group, the business of which is the distribution of food products to households, monitors the
following items:
- sales (daily, monthly, with detailed multi-criteria analysis),
- sales margin (daily, monthly with detailed analysis of components),
- physical inventories,
- staff costs: company reporting (monthly),
- vehicle costs (direct costs, claims)
- telephone costs (monthly).
The majority of costs are monitored in periodic indicator reports (monthly, quarterly and half yearly).
Accounting and management control items are reviewed and discussed in the Executive Committee
and by the Board of Directors.
Verification of the fairness and reliability of information
-As part of the audit plan, regular audits are carried out to ensure that procedures are followed by
sales agents with regard to cash receipts and at headquarters with regard to the commitment
process and approval of invoices.
-The accounts are reviewed both internally and by external auditors.
-The fairness of operations is reviewed by specialised outside firms (social matters, taxation and
auditing).
Action Plan 2009 - 2010
The main lines of the 2009 - 2010 Action Plan are as follows:
-implementation of the internal audit plan (in particular the review of the Human Resources
process);
-procedures: updates with the development of an alert procedure;
-contracts: identification of major contracts in force within the Group.
Signed in Civrieux d’Azergues, on April 20, 2009
The Chairman of the Board of Directors
Roland Tchénio
COMPANY AUDITOR AND INTERNAL CONTROL
11 rue Auguste Lacroix
69003 LYON
DELOITTE & ASSOCIES
Immeuble Park Avenue
81 boulevard de Stalingrad
69100 VILLEURBANNE
TOUPARGEL GROUP
French limited liability company (Société Anonyme)
13 chemin des Prés Secs - 69380 CIVRIEUX OF AZERGUES
Report of the Statutory Auditors, established pursuant to Article L.225235 of the Commercial Code, on the report of the Chairman of the Board
of Directors of theToupargel Group
Year ended December 31, 2008
To the Shareholders,
In our capacity as Statutory Auditors of the Toupargel Group, and pursuant to the provisions of
Article L.225-235 of the Commercial Code, we hereby present our report on the report prepared by
the Chairman of your company, in compliance with the provisions of Article L.225-37 of the Code of
Commerce for the year ended December 31, 2008.
It is the responsibility of the Chairman to prepare and submit for approval by the Board of Directors a
report commenting on internal control procedures and risk management in place within the
company and providing other information as required by section L.225-37 of the Commercial Code,
particularly with regard to corporate governance.
It is our responsibility:
-to present you with our observations on the information contained in the Chairman’s report on
internal control procedures as regards the preparation and processing of financial and accounting
information, and
-to certify that the report includes the other items of information as required by Article L.225-37 of
the Commercial Code, it being stipulated that it is not our responsibility to verify the sincerity of
these other items of information.
We conducted our work in accordance with professional standards applicable in France.
Information concerning internal control procedures relating to the preparation and processing of
financial and accounting information
Professional standards require that due diligence be exercised in order to appreciate the fairness of
information on internal control procedures relating to the preparation and processing of financial
and accounting information contained in the report of the Chairman. This due diligence consists in
particular in:
•
taking note of internal control procedures relating to the preparation and processing of
accounting and financial information underlying the information presented in the Chairman's report
and existing documentation;
taking note of the work involved in preparing such information and existing documentation;
-determining whether major deficiencies in internal control processes relating to the preparation and
processing of financial and accounting information encountered in the context of our mission require
appropriate information to be included in the report of the Chairman.
Based on this work, we have no comment to make on the information on internal control procedures
of the company relating to the preparation and processing of financial and accounting information
contained in the report of the Chairman of the Board of Directors, established pursuant to the
provisions of Article L.225-37 of the Commercial Code.
Other information
We confirm that the report of the Chairman of the Board of Directors includes the other items of
information required by Article L.225-37 of the Commercial Code.
Lyon and Villeurbanne, April 7, 2009
The Statutory Auditors
COMPANY AUDITOR AND INTERNAL CONTROL
Jacques CONVERT
Managing Partner
DELOITTE & ASSOCIES
Olivier ROSIER
External control
Statutory Auditors
Deloitte & Associes
81, boulevard de Stalingrad 69100 Villeurbanne represented by Mr Olivier Rosier, appointed by
The Combined General Meeting of May 12, 2006 for a term ending on the day of the General
Meeting held to approve the financial statements for the year ended December 31, 2011.
Company Auditor and Internal Control (SAFICI)
11, rue Auguste Lacroix 69003 Lyon Represented by Mr Jacques Convert, appointed by
the Combined General Meeting of April 27, 2007 for a term ending on the day of the General
Meeting held to approve the financial statements for the year ended December 31, 2012.
Alternate Auditors
Cabinet Beas
7-9, Villa Houssaye 92200 Neuilly-sur-Seine, appointed by the AGM of May 12, 2006 for
a term ending on the day of the General Meeting held to approve the financial statements for the
year ended December 31, 2011.
Jean Vuillermoz
1, avenue Félix Faure 69007 Lyon Appointed by the Ordinary General Meeting of April 27, 2007
for a period of six years, i.e. until the term of office expires after the Ordinary General Meeting called
to approve the accounts for financial year ending December 31, 2012.
Statutory Auditors' remuneration (excluding expenses)
(€thousands)
Safici
Amount
2008
2007
Percentage
2008
2007
Deloitte & Associés
Amount
Percentage
2008 2007
2008
2007
Audit
Statutory Audit of company and
consolidated
accounts
Issuer
25
Fully consolidated subsidiaries
Other procedures and services
directly related to the statutory
auditor's mission
Issuer
Fully consolidated subsidiaries
Sub-total
25
Other services rendered by the
networks to fully consolidated
subsidiaries
Legal, tax and corporate
Others
Total
25
24
100%
100%
32
86
31
83
27.1%
72.9%
26.7%
71.6%
24
100%
100%
118
2
116
100%
1.7%
100%
24
100%
100%
118
116
100%
100%
Shareholder's and investor's information
Stock market listing information
- Date listed on the Second Marché
- Listing price
- ISIN code
Bloomberg code
- Reuters code
- Index component
- Euronext Paris
- FTSE classification (ICB)
- Sub-sector
- Investment trust eligibility
- Middlenext
- Member share capital at 31 Dec. 2007
- Number of ordinary shares
- Par value
- Adjusted share price at 13 March 2009
- Percent of publicly held shares at 13 March 2009
- Value of publicly held shares at 13 March 2009
- Stock market capitalisation at 13 March 2009
3 December 1997
€3.81
FR0000039240
TOU
TPGEL.PA
CAC Small 90, SBF 250
C compartment
5330 (Food & Drugs Retailers),
5337 (Food Retailers & Wholesalers)
yes
yes
1,010,328 euros
10,103,282
0.10 €
€12.50
13.6%
€17.1 million
€126.3 million
Company shareholders
Free Float;
13.6%
Own shares;
2.0%
Others
Board; 0.2%
Roland
Tchénio
family Group;
53.2%
Maurice
Tchénio
Group; 31.0%
There were over 2,700 registered and bearer shareholders at 13 March 2009 (including 2,650
individuals), compared with 2,400 at 14 March 2008 and 2,600 at 14 March 2007. (Sources :
Euroclear and Caceis). Investment companies and institutional investors had shareholdings of 8,4%.
Share price and trading volume evolution
(Source : Euronext)
Period
(Source:
Euronext)
December 1997
Year 1998
Year 1999
Year 2000
Year 2001
Year 2002
Year 2003
Year 2004
Year 2005
Year 2006
Year 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2008
February 2008
High price (€)
3.81
4.61
4.50
4.95
4.31
4.42
10.34
32.80
33.47
43.78
26.90
27.20
22.00
21.59
20.90
19.49
19.05
17.10
16.90
15.70
14.30
12.90
14.60
15.94
14.00
Low price (€)
3.36
2.42
2.00
4.25
3.77
3.99
8.64
15.76
30.24
39.09
43.85
19.32
18.20
20.00
18.66
18.22
15.81
14.00
14.56
13.50
10.53
11.90
12.05
12.80
12.21
Trading volume
678 620
1 645 368
1 032 660
648 832
441 400
994 008
880 584
527 353
635 074
706 511
1 363 581
51 757
102 634
49 785
59 637
58 047
112 784
74 688
19 238
21 267
42 569
29 682
27 045
42 705
44 456
Trading
value
(€thousands)
2 512.65
6 460.39
3 463.91
3 197.04
1 831.26
1 731.48
7 969.07
12 693.00
19 870.00
29 164.69
52 301
1 206.38
2 097.03
1 026.47
1 142.19
1 097.95
2 063.10
1 186.27
302.14
315.52
511.20
362.04
346.45
612.38
599.62
Cash dividend distribution policy
For financial year 2008, a proposal will be made to the General Meeting of 28 April 2009 to distribute
€10,103,000 on 30 June 2009 (€1.0 per share), representing 69% of consolidated net profit. The
company intends to maintain a high distribution rate in future financial years.
Caption: Change in dividends per share (in €)
(p) proposed by the General Meeting at 28 April 2009
Financial advisor
Toupargel Groupe SA appointed Caceis as its financial advisor. For the management of registered
shares, please contact:
CACEIS
Head office
14 rue Rouget de Lisle 92130 Issy Les Moulineaux - France
Tel. : +33(0)1 58 32 32 19
Operating office
10 rue des Roquemonts 14000 Caen - France
Tel. : +33(0)2 31 45 18 90
Promoter ensuring the stock's liquidity
Oddo
12 boulevard de la Madeleine
75440 Paris Cedex 09 - France
Tel +33(0)1.44.51.85.00
In compliance with the provisions set forth in the AFEI (Association Française des Entreprises
d’Investissement) charter, a share promotion and liquidity contract was signed between Toupargel
Groupe SA and the Oddo brokerage firm at 1 January 2007. Toupargel Groupe deposited €100,000 on
the liquidity account when it was opened. As of 28 January 2008, an additional sum of €30,000 was
credited to the liquidity account.
Financial transparency and performance
2007: Prize for the best annual report in 2006 for listed companies outside the SBF 120 index, awarded by la Vie
Financière and les Echos
2007: 2nd prize for governance awarded by AGEFI
2005: Received the Midcaps Excellence Award from Euronext, Middlenext and Oddo & Cie based on the
company's overall performance
2005: Received the Midcaps Economic Performance Award from Euronext, Middlenext and Oddo & Cie based on
the company's growth and profitability
2005: French and Rhone Alps Region Entrepreneur of the Year award given to Roland Tchenio
2005: Selected third-best in financial communication by Boursorama
2004: Selected second-best financial site for 2004 by Boursorama
2004: French and Rhone Alps Region Performance award given by Le Nouvel Objectif Rhône Alpes and
Lyonnaise de Banque
2002: Received the 'Cristal Award for financial transparency' from Investir (Second Marche companies)
2000: Received the 'Second Marche Best Annual Report for 1999' award from Vie Financiere.
2008 publications for shareholders and analysts
Annual Report 2007: 1,600 copies distributed in French, with English version available online.
This report was sent upon request to analysis, funds managers, institutions, banks and individual
shareholders, and distributed via the web site.
Corporate Brochure produced in 3,500 copies
2007 Operations Report, distributed to shareholders attending the General Meeting of 30
April 2008
Press releases on sales and quarterly results in French and in English. A Boursorama campaign was
set up to publish the 2008 half-yearly results.
The budget
Direct expenses for stock market marketing amounted to €130,000 in 2008 (€150,000 in 2007).
Other documentation
- Legal documents (bylaws, Minutes of General Meetings, Statutory Auditors' Reports) and the list of
current agreements may be consulted at Toupargel Groupe's head office located at: 13 chemin des
Pres Sees 69380 Civrieux d'Azergues, France. The company makes available to any shareholder upon
request the social statement of Toupargel and Place du Marché, pursuant to articles L 438-1 and
following in the French labour work.
- Web site: www.toupargelgroupe.fr. For the past seven years Toupargel has made its Web site
available to the public in French and in English where its Annual Report may be downloaded. The site
also contains all regulatory information provided to AMF. Toupargel may also be accessed though
external Internet links, including NYSE Euronext, AMF and Hugingroup.
Actions for individual shareholders
Toupargel participated in 2008 at the Actionaria Trade Fair in Paris on Nov. 21 and 22. Over 800
people visited the booth.
Actions with analysts and fund managers
The Toupargel Group participated in 35 one-to-one or conference meetings with analysts and funds
managers. An SFAF meeting was held in February 2008 when the 2007 yearly results were published.
This meeting was broadcast live in an audio conference via the Toupargel Web site. The publication
of sales and half-year results in August 2008 was followed by a conference call with analysts.
Press relations
The Toupargel Group maintains regular relations with the financial and economic press,the regional
press, TV and radio through press releases and interviews, and held one press conference in 2008.
Analysts following the stock in 2008
Christophe Chaput Oddo Midcaps cchaput@oddo.fr
Jérôme Chosson IDMidcaps jchosson@idmidcaps.com
Christine Ropert Gilbert Dupont christine.ropert@gilbertdupont.fr
Caroline David-Tracaz Groupe Viel Tradition caroline.david-tracaz@viel.com
Séverine Blé Fortis severine.ble@fortis.com
Charles-H. de Mortemart Berenberg Bank charles-henri.mortemart@berenberg.de
Relations with shareholders, analysts and investors
•
Persons responsible for information
Roland Tchénio – Chairman and CEO
Pierre Novarina – Deputy Managing Director, in charge of financial communications
Karine Pareti – communication, relations with press
Cyril Tezenas du Montcel – Financial analyst, relations with analysts and shareholders
•
Contacts : Email: infofinanciere@toupargel.fr, Tel: +33 (0) 4 72 54 10 00
2009 events (*)
•9 January 2009
•25 February 2009
•26 February 2009
•28 April 2009
•30 June 2009
•30 July 2009
ending 30 June 2009
•29 October 2009
•20/21 November 2009
•12 January 2010
* Subject to change
Release of 2008 4th quarter sales, (after market close)
Press conference at 5.30 pm in Lyon
Publication of financial statements for the financial year ending
31 December 2008, (after market close)
Presentation of 2008 full year financial statements at 11.30 am,
in the Palais Brongniart, in Paris and at 5.30 pm, in Lyon
Release of 2009 1st quarter sales and results (after market close)
Annual General Meeting in Lyon
Dividend payable
Release of 2009 1st half year sales and results, (after market close)
Conference call at 5.45 pm on sales and results for 1st half year
Release of 2009 3rd quarter sales and results, (after market close)
Actionaria exhibition at the Palais des Congrès, in Paris
Release of 2009 4th quarter sales, (after market close)
KEYS FIGURES AND RATIOS
Income Statement
in €000s
2006
2007
2008
Change
2007/2008
Sales
379.5
363.5
365.9
0.7%
Ebitda
46.6
36.8
35.4
-3.6%
Operating income
37.8
28.5
24.1
-15.4%
Financial cost
-1.0
-1.4
-1.5
6.6%
Ordinary income before taxes
36.8
27.1
22.6
-16.5%
Taxes
-12.8
-9.4
-7.9
-16.2%
Net group profit share
24.0
17.7
14.7
-16.7%
Cash flow
35.2
28.9
27.9
-3.2%
Balance sheet
In €000s
Balance sheet total
Shareholders equity
Gross indebtedness
Net indebtedness
Non current assets
Industrial investments
Variation in working capital requirements
Working capital requirements
Variation in WCR
Cash position
Change in cash position
2006
173.7
78.0
2008
180.3
76.6
2008
172.5
75.5
18.7
34.8
25.0
16.0
29.0
24.4
151.3
151.4
150.9
11.3
-7.5
-48.2
4.9
11.2
15.7
-35.5
12.7
11.0
-7.4
-37.7
-2.2
2.8
5.8
0.6
-12.4
3.0
-5.2
Ratios
Net earnings per share (in €)
Cash flow per share (in €)
Net assets per share (in €)
Coverage of financial expense (1) (x times)
Leverage ratio (2) (x times)
Gearing (3)
Operating margin (4)
Net margin (5)
Return on equity (6)
Return on assets (7)
Asset turnover (8)(x times)
Return on capital employed (9) (ROCE)
2006
2.38
3.48
2008
1.76
2.87
2008
1.48
2.81
7.72
7.62
7.61
23.1
15.8
12.9
0.34
0.79
0.69
20 %
10.0 %
6.3 %
44.5 %
38 %
7.8 %
4.9 %
30.1 %
32 %
6.6 %
4.0 %
24.3 %
21.8 %
15.8 %
14.0 %
2.2
24.1 %
2.0
16.1 %
2.1
13.9 %
(1) Operating income/financial expenses
(2) Net bank debt/gross operating income
(3) Net debt/equity capital
(4) Operating income/sales
(5) Net income/sales
(6) Net income/equity capital (before result)
(7) Operating income/total assets
(8) Sales/total assets
(9) Operating income after tax/net fixed
assets + WCR
Investments
in €000s
2004
2005
2006
2007
2008
Industrial (CAPEX)
Financial
Total
CAF / CAPEX
19.9
28.9
11.3
11.3
11.0
19.9
1.5
28.9
1.2
11.3
3.1
11.3
2.5
11.0
2.5
CAF / Total investments
1.5
1.2
3.1
2.5
2.5
The Group invests exclusively in France. Investments amounted to €11,048,000 in 2008. Annual
normative investments by the Toupargel Group are in the range €10 million to €15 million. This
mainly represents renewal of vehicles over 5/6 years, acquisition of equipment to improve sales
agencies and acquisition of IT equipment.
In 2004 and 2005, investments were respectively €19,868,000 and €28,883,000. This high nonrecurrent level of investments resulted from the reorganisation of the "Frozen foods" business
(following the acquisition of Agrigel in 2003) with the construction of the logistics platforms of
Argentan and Montauban, the acquisition of equipment for these platforms and the transformation
of the fleet of Agrigel delivery vehicles.
Average full-time equivalent staff
2004
Average
full-time 3 520
equivalent staff
2005
3 640
2006
3 744
2008
3 628
2008
3 634
Report on the consolidated financial
statements
Structural Diagram - Scope
100%
100%
All assets required for operations are included in the consolidation scope.
Details
- Toupargel-Agrigel SA was renamed Toupargel Groupe at the General Meeting of April 27, 2008.
- Toupargel and Eismann (outside the Group) formed an economic grouping in 2008 for the purpose
of jointly negotiating purchases. This grouping did not record any income or expenses in 2008
Individual and consolidated financial statements
The individual and consolidated financial statements of Toupargel Groupe were approved at the
Board of Directors meeting on February 20, 2009. Roland Tchénio, Chairman of SAS Toupargel and
Place du Marché approved the financial statements of these companies on February 20, 2009. The
consolidated accounts were communicated on February 25, 2009 through meetings and the media.
Said financial statements were submitted to the General Meeting of Shareholders for approval on
April 28, 2009, in conformity with article L225-100 of the Commercial Code.
Presentation of the consolidated financial statements
The consolidated financial statements have been drawn up on the basis of IAS/IFRS international
accounting standards.
Sales of goods (in €000s)
The breakdown of sales between the various marketing methods and businesses is as follows:
31/12/2008
K€
31/12/2007
Répartition
K€
31/12/2006
Répartition
K€
Répartition
Activité «Surgelés»
Vente à distance
346 509
94.7%
346 077
95.2%
363 869
95.9%
Divers (1)
739
0.2%
748
0.2%
765
0.2%
Sous-total
347 248
346 825
364 634
Activité «Frais - Epicerie»
Vente à distance
Total
18 659
5.1%
16 715
4.6%
14 891
3.9%
365 907
100.0%
363 540
100.0%
379 525
100.0%
(1) represents sales of frozen food products to distributors with whom the Group has no capital
relationship.
The "Frozen foods" business generated sales of €347,248,000 mn in 2008, stable compared to
2007. On the basis of a constant number of days on sale, after a downturn of 4.1% in the first
half, sales rose by 1.0% in Q3 and 3.4% in Q4 2008. Over the course of 2008, the average
shopping basket rose 0.4% and the number of orders fell 0.2%. The number of active customers
at December 31, 2008 has risen, returning to the level of early 2007.
"Fresh foods and Groceries" sales rose from €16,715,000 in 2007 to €18,659,000 in 2008, an
increase of 11.6%, thanks to a sustained level of new client prospection and a higher average
shopping basket.
Seasonality of sales
Seasonality of sales at the beginning of the year depends on whether Easter falls into the first quarter
or second quarter. Summer weather conditions have an impact on Q3 sales, in particular ice cream
sales.
The fourth quarter is a busy period because of the end of year holiday period. Changes in the annual
calendar also have an influence on the number of days worked each quarter.
The number of sales per quarter and by business area can be broken down as follows:
(in €000s)
Worked
days in
2008 (2)
2006
(12 months)
2007
(12 months)
2008
(12 months)
Frozen Foods business
Q1
63
91 209 25.1%
89 574 25.9%
83 399 24.1%
Q2
65
91 594 25.2%
83 096 24.0%
84 756 24.5%
H1
128
182 803 50.2%
172 670 49.9%
168 155 48.5%
Q3
64
79 092 21.7%
73 744 21.3%
76 924 22.2%
Q4
64
101 974 28.0%
99 663 28.8%
101 430 29.3%
H2
128
181 066 49.8%
173 407 50.1%
178 354 51.5%
363 869 100.0%
346 077 100.0%
346 509 100.0%
Sub-total
Others (1)
Total Frozen Foods business
765
256
364 634
748
346 825 95.4%
739
347 248
Fresh Foods/Groceries business
Q1
64
3 686 24.7%
4 042 24.2%
4 579 24.5%
Q2
65
3 679 24.7%
4 128 24.7%
4 533 24.3%
H1
129
7 365 49.5%
8 170 48.9%
9 112 48.8%
Q3
66
3 561 23.9%
3 968 23.7%
4 414 23.7%
Q4
67
3 964 26.6%
4 577 27.4%
5 133 27.5%
H2
133
7 526 50.5%
8 545 51.1%
9 547 51.2%
Total Fresh Foods business
262
Total sales
14 891 100.0%
379 525
16 715 100.0%
363 540
18 659 100.0%
365 907
(1) represents sales of frozen food products to distributors with whom the Group has no capital relationship.
(2) number of working days in 2007 for the "Frozen foods" business: 253 and for the "Fresh foods and Groceries"
business: 261.
Sales margin (in €000s)
The sales margin increased from 57.0% in 2008 to 55.9% in 2008. This decrease can be explained by
several factors: the deliberate lack of a full pass on of price increases for certain products, the impact
of lower sales of ice cream during the summer, a reduction in packaging costs of certain products,
and a loyalty program which generated less margin. The margin from the "frozen foods" business at
€196,017,000 fell by 57.4% to 56.4%, and that of "Fresh foods and Groceries", €8,650,000, fell from
47.5% to 46.4%.
Operating income (in €000s)
Operating income amounted to €24,074,000 compared to €28,467,000 in 2008. The operating
margin (operating income/sales) fell from 7.8% to 6.6%. Operating income for the "Frozen foods"
business rose from €27,591,000 to €24,451,000 (ie an operating margin of 7.0% compared to 8.0% in
2008), and that of "Fresh foods and Groceries" improved from -€2,988,000 to -€2,503,000. The
operating income of the holding company fell from €3,864,000 to €2,126,000. Personnel expenses
were stable at €111,781,000 (30.5% compared to 30.7% of net sales in 2008). External charges
amounted to €49,498,000 compared to €50,451,000 in 2008. The main declines concerned leasing (€846,000), and maintenance and repairs items (-€727,000) (rationalisation of delivery agencies and
rental vehicle fleet). In addition, the fuel item rose 8.6% to €8,739,000, a consequence of rising fuel
prices over 2008. The media campaign had an impact of around €300,000 on external charges
compared to 2008. Taxes and duties rose from €7,103,000 in 2007 to €8,084,000 in 2008, mainly the
result of the introduction of an eco tax on fish products (€735,000). Depreciation amounted to
€10,591,000 compared to €10,349,000 in 2008. Transfers to provisions amounted to €1,316,000 of
which €1,007,000 representing a provision for company tax as a result of a contested tax
adjustments (business tax and property taxes). Sales of fixed assets (mainly vehicles) amounted to
€631,000 compared to €534,000 in 2008.
Financial expenses
Net financial expenses rose from €1,375,000 to €1,466,000 as of December 31, 2008, a result of
higher interest rates and larger outstandings.
Group share of net income (in €000s)
Group share of net income fell from €17,695,000 to €14,735,000. Net margin (net income/sales) fell
from 4.9% to 4.0%.
Cash flow (in €000s)
Cash flow amounted to €27,937,000 compared to €28,870,000 as of December 31, 2008. Cash flow
from the "frozen foods" business amounted to €28,033,000 (€28,786,000 as of December 31, 2008),
and that of "Fresh foods and Groceries" to -€1,858,000 (-€2,419,000 as of December 31, 2008). The
contribution of the holding company was €1,763,000 (€2,503,000 as of December 31, 2008).
Shareholders equity (in €000s)
Prior to distribution of income, shareholders equity amounted to €75,494,000 compared to
€76,573,000 in 2008. Dividends paid in 2008 for 2007 amounted to €14,851,000 (dividends paid in
2007 for 2006: €15,152,000). In addition, in 2008 the company acquired Treasury shares valued as of
December 31, 2008 at €976,000, resulting in a deduction from equity capital. The return on equity
(net income/shareholders' equity before distribution) fell from 30.1% to 24.3%. The return on capital
employed (operating profit after tax/net assets + WCR) fell from 15.9% in 2008 to 13.9% in 2008.
Gross financial indebtedness (in €000s)
Gross financial indebtedness amounted to €25,021,000 compared to €34,806,000 in 2008. As of
December 31, 2008, drawdowns on credit lines amounted to €10,000,000 compared to €18,000,000
as of December 31, 2008. The share of debt related to restatement of lease financing contracts fell
from €16,806,000 to €15,021,000 of which €6,977,000 corresponded to real estate leasing
(€8,571,000 in 2008) and €8,044,000 to equipment leases (€8,235,000 in 2008).
Net financial indebtedness (in €000s)
Net financial indebtedness fell from €28,978,000 to €24,376,000 as of December 31, 2008. The ratio
of net debt to equity stood at 32.3% as of December 31, 2008 compared to 37.8% as of December
31, 2007.
In addition to the two existing lines of credit, on September 30, 2008 the Group put in place a credit
line of €30 million with an extension option taken out in an amount of €10 million on February 20,
2009, bringing the total credit line to €40 million.
Available amounts for the three existing credit lines are as follows:
In €000s
Amount available
31/12/2009
42 000
31/12/2010
34 000
31/12/2011
26 000
31/12/2012
18 000
31/12/2013
10 000
Investments
Acquisitions of intangible fixed assets and property plant and equipment
Acquisitions amounted to €11,048,000 compared to €11,335,000 in 2007.
In €000s
Intangible fixed assets
Tangible fixed assets (excluding lease reversals)
Total
31/12/2006
362
10,935
11,297
31/12/2007
113
11,222
11,335
31/12/2008
286
10,762
11,048
Tangible fixed asset entries in 2008 corresponded in the main to:
 the acquisition of motor vehicles for €6,189,000, of which €5,869,000 financed by leases,
 various buildings and improvements for €2,400,000
 the acquisition of IT equipment for €2,006,000
Sales of fixed assets amounted to €1,419,000 (result: €631,000). They consisted mainly of income
from the sale of vehicles (fleet renewal).
Events subsequent to closing
No event of significance for the Group occurred subsequent to closing.
Legal and arbitration proceedings
There exists no governmental, judicial or arbitration procedure (including any procedure that the
Group is aware of, is pending or is threatened), which could have or has recently had any significant
impact on the financial situation or profitability of the Group, with the exception firstly of the
proceedings to obtain restitution of the meat purchase tax and the additional tax paid to the tax
administration between June 1, 2001 and December 31, 2003, which represent a potential income of
€4,672,000 (not provisioned in the financial statements), and secondly, a joint action with other
distributors to obtain cancellation vis-a-vis the European authorities of the eco-tax on seafood
products provisioned in the financial statements in an amount of €735,000.
Litigation identified on the closing date of the financial statements was provisioned on the basis of
the method described in note 2.15 of the notes to the consolidated financial statements and details
of which are included in note 14 of the same notes.
Significant change in the financial or business situation
No significant changes in the financial or commercial situation of the Group has occurred since the
end of the last financial year.
Outlook for 2009
In 2009, the Group’s goal is to attain sales growth of 2% to 3% and an operating margin of around
7%. The investment programme amounts to €10 million of which €4.8 mn for the vehicle fleet, €2.1
mn for buildings and improvements and €2.3 mn for IT equipment.
Taking into account expected changes in sales and various cost components, the Group intends to
generate the same operating margin (operating profit/sales) as it did in 2006, ie around 10%. This
should be possible in particular as a result of a rise in sales associated with an improvement in
delivery and order taking costs.
Risk factors
Preamble
Toupargel has established a policy of risk management which aims to respect the interests of
employees, consumers, the environment and which maintains the value of the assets of
stockholders.
A Risk Committee was established in 2002 to identify and prioritise risks. Alternative procedures have
been introduced based on the level of occurrence of risks and their financial impact on the Group
(see organisation section).
The Toupargel Group undertook a review of risks that could affect its operations and believes that
there are no other significant risks in addition to those presented below.
Specific risks related to business operations
Sensitivity to political risk: The Group operates exclusively in France.
Sensitivity to the economic situation: the Group's businesses are concentrated in the mature
food distribution sector where growth rates vary little. During periods of economic slowdown,
consumers’ purchase intentions may be dictated by specific considerations which are likely to
have an impact on sales.
Strategy Risk: various analyses (Secodip, INSEE) have found that the market share of home
delivery of frozen foods has remained stable from year to year. The population in communities of
less than 10,000 inhabitants has increased faster than the metropolitan population and the
changing age structure is pointing to an aging population in France. With regard to the Group’s
positioning for this type of population, it can be considered that there is no risk over the short or
medium term of any loss of business.
Competition: the "Frozen foods" business represents 95% of sales and all of the operating
income of the Group in 2008. Barriers to entry and competitive advantages preserve the Group
from any risk of a rapid decline in business volumes. Maintaining and increasing business
volumes depends on the ability to find new customers. To do this, the Group has a number of
marketing units.
The prices of products are equivalent to those of the Group's direct competitors. Prices
compared to supermarkets are about 15% to 20% higher for comparable frozen food products,
reflecting the integration of delivery costs.
Supply pressure: scarcities can occur periodically for certain products (in particular fish). Risk
exposure for Toupargel is equivalent to that of other distributors. In such situations,
consumption switches to other products.
Risks related to changes in the cost of goods: fluctuations in supply and demand on a global or
regional level and weather conditions can have a significant impact on the prices of the goods
concerned. The positioning of Toupargel at the end of the value chain of its business enables it to
delay passing on price increases to the end customer.
Risks related to changes in the cost of raw materials: the Group is sensitive to changes in fuel
prices. Fuel costs represented 2.4% of sales in 2008. The ongoing pooling of delivery rounds for
the "Frozen foods" business helps mitigate any increases in fuel prices over the short term.
Based on average volumes (7,378,000 liters) and prices of fuel consumed equivalent to 2008, a
10% increase in fuel prices would result in a €790,000 increase in fuel costs.
Risks related to seasonality and weather conditions: consumption cycles and seasonal variations
in weather can affect the Group’s sales. The position of Easter in the first or second quarter has
an impact on quarterly income. Relatively cool summer temperatures can result in lower sales of
ice cream.
Risks associated with equity investments: the business currently being developed by Place du
Marché, home delivery of food products (not frozen foods), is regarded as being in a start-up
phase. The business plan of the company foresees breakeven being achieved by 2011/ 2012.
Goodwill for Place du Marché amounts to €1,415,000. An "impairment test" conducted in late
2008 on the consolidated accounts in accordance with IAS 36 did not lead to a decision to
amortise goodwill. The net value of fixed assets was €5,929,000 as of December 31, 2008, of
which
€5,328,000 for the platform and logistics equipment of Chalon-sur-Saone. This platform was
financed by an amortising real estate lease of 12 years put in place in April 2002. The outstanding
amount was €1,773,000 (excluding interest) as of December 31, 2008.
General operating risks
 Supplier risks: in view of the large number of producers in the market, the failure of one of
them has a limited impact on supplies. The Group has entered into partnerships with more
than 200 suppliers for the "Frozen foods" business and 120 for the "Fresh foods and
groceries" business. The main supplier represented 4% of purchases of goods in 2008 (4% in
2007), the top five suppliers 16.4% (17.9% in 2007).
 Loss of clients: average annual sales excluding VAT for a repeat customer amounts to €350
in the "Frozen foods" business and €1,010 in the "Fresh foods and Groceries" business.
 Overdue amounts: the Group charges commercial cooperation expenses to certain national
brand suppliers. An analysis of the financial health of each supplier has been undertaken to
avoid insolvency risk. The individual customers post represents less than 3 days of sales and
unpaid amounts (checks without provision) are not significant.
 Postal risks (distribution of catalogues): Toupargel has introduced an alternative solution
involving delivery of catalogues by deliverymen.
 Risk of France Telecom telephone file attrition: prospecting for new customers is carried
out using the file provided by France Telecom. The generalisation of mobile phones and the
opening of the telecommunications market to new operators has contributed to an
attrition of the France Telecom landline file. The Toupargel Group invests in targeted phone
files and is also developing a prospection method combining door-to-door and phone
marketing.
 Risk of blocked roads: for supplies and deliveries, Toupargel is subject to the same risks as
any other food distribution company.
Industrial and environmental risks
Risks related to food security
 "Cold chain" risks: the Group has established procedures for monitoring the cold chain and
exceptional procedures to reduce the risk of a rupture. Preparation of frozen food products
orders can be switched from one platform to another within 72 hours. Each platform is equipped
with "cold" alarms and staff are on call weekends. In addition, "loss of cold" cover is included in
the insurance contract.
 Product risk: particular attention is paid to the main factor that could affect the ability of the
company to achieve its objectives, product risk. A bacteriological control plan has been
developed and implemented on the basis of product risk. Liability insurance cover supplements
this measure. Cover is €10 million civil liability before delivery and €8 million after delivery.
In addition, risks associated with products are limited because stocks are less than thirty
days of sales, and, for frozen products, because of the optimum utilisation limit of between
nine months and two years.
For frozen products, the Group has put in place an upstream and downstream traceability
system, enabling it to draw up a list of consumers for each product.
At the sales level, the Group can suffer from the consequences of crises (BSE, avian flu,
etc.). Like any retailer, the extent of the product range helps the company mitigate the
financial impact.
In the context of risk prevention and more specifically the management of food crises,
we arrange regular meetings for our suppliers to increase awareness of food crisis
management issues and help prepare them to manage product recalls and
communications during periods of crisis. On our side, we approached a communications
agency specialised in the management of food crises and with their assistance developed
our own set of tools: a crisis management manual and response cards covering each type
of potential risk capable of tarnishing our image and the products we distribute.
Risk of intrusion and fire: most sites are equipped with intrusion detection. Premises housing
sensitive computer systems are equipped with fire prevention equipment.
For warehouses with final risk from insulation panels, each year the company carries out controls
by external experts and implements any necessary measures to minimise risk.
Risk of road accidents: the Group operates over 1,600 vehicles and is subject to road accident
risk . For several years, a prevention program has been developed under the auspices of an
internal automotive safety committee in partnership with a specialist company.
Risks involved in dismantling industrial installations
In the event of a shutdown of the logistics platforms, the Group will have a legal requirement to
reprocess certain products and materials. Nevertheless, with no decision likely in the foreseeable
future to effect a shutdown and given the non-significant character of the potential reprocessing,
the Group does not consider that it is exposed to this risk.
IT risks have been listed. Protective measures have been put in place: redundancy of machines,
fire protection.
Environmental risks: the nature of the Group’s business is unlikely to result in significant
environmental risk. Liability insurance covers accidental pollution up to €1 million. An
environmental diagnosis was carried out in 2004 at various pilot sites, representative of our
various types of activity: an order preparation platform, an order taking and delivery agency and a
meat preparation workshop. The objective of this diagnosis was to draw up an environmental
audit questionnaire for use at sites during annual audits.
Legal and tax risks
Risks related to litigation (see Note 13 to the consolidated financial statements)
In the framework of its ordinary activities, the Group is involved in a certain number of lawsuits and
litigation. Probable costs have been provisioned and are summarised in note 13 of the notes to the
consolidated financial statements. Labour court litigation represents the majority of litigation: 52
files, representing total demands by adverse parties of €5,591,000, have been provisioned in an
amount of €820, 000. There exists no litigation or exceptional events likely to have or to have had in
the recent past a significant impact on the financial situation, business, or income of the Toupargel
Group. A URSSAF inspection of Place du Marché SAS resulted in a disputed adjustment for property
tax for the Saint Marcel logistics platform. The impact of the assessment has been provisioned
(€169,000). Another tax inspection is underway at the Toupargel SAS subsidiary. It resulted in a
contested adjustment for property and business taxes for the Argentan, Montauban and Poitiers
platforms. The impact of the assessment has been provisioned (€839,000).
Risks related to changes in legislation
In the context of its business development, the Group carries out telephone and door to door sales
prospection. This practice which is legal in France is governed by legislation in certain European
countries. Although the call centre activity represents a significant element of French economic life, it
is possible that the law will change. In this case, the Group will adjust its business development
strategy.
The Law on the Modernization of the Economy of August 4, 2008 introduced new regulations on
payment terms, applicable from January 1, 2009. Negotiations are underway with suppliers to obtain
compensation for this regulatory change.
Risks associated with financial investments
Risks (credit risk, liquidity risk and market and equity risk) have been dealt with in note 17 of the
appendix to the consolidated financial statements.
Other risks
- Dependence on key personnel: the company is dependent on its key executives whose
unavailability could affect the operations of the Group. The organisational structure limits the
impact.
- Social risks:
Social tensions: the Group’s situation does not call for any specific comments.
Insurance and risk coverage
Insurance policy
Insurance policies are designed to protect the Group’s assets, protect it from the consequences of
responsibility incurred vis-a-vis third parties and staff and minimise the impact of damage to the
balance sheet and income statement. Insurance policy consists in identifying and evaluating risks in
terms of exposure and insured capital, taking out damage insurance in the market through insurance
brokers or opting for a self-insurance solution for ordinary operating risks. In order to optimise
insurance costs, the Group has put in place a risk prevention programme (fire, machine breakage,
food risks, a vehicle damage etc.) under the authority of the Risk Committee. The Group has put in
place a reporting system for monitoring damage, in particular to vehicles, enabling it to manage
prevention and training measures.
The Group has taken out insurance contracts with companies that are financially solid for whom
brokerage is assured by AON and Filhet-Allard et Cie. The main guarantees are as follows:
Type of insurance
All Risks except
Main guarantees
Amount insured
Damage to property, rental risks, additional costs €130,000,000
with per claim deductible of €59,000
Indemnification limit per accident: €19,999
Civil Responsibility
Operations: all damages
€10,000,000
of which bodily injury
€10,000,000
of which pollution
€1,000,000
After delivery
€8,000,000
Responsibility of company Litigation
€4,000,000
directors
Automobile fleet
Auto-mission
Goods transport
Construction Damage
CR, bodily injury to third parties
CR, bodily injury to third parties
Without limitation
€100,000,000
Self-inflicted damage: self-insurance except for large
vehicles of less than 4 years
Employee professional travel
Only for vehicles over 15 tonnes
Chalon sur Saône, Argentan and Montauban
platforms
Value of asset less €15,000
deductible
Deductible €300
Contents
Total premiums in 2008 amounted to €798,000 inc. VAT, i.e. 0.21% of net sales. As of 31 December
2008 and the date of the writing of this report, no major and/or significant accident likely to modify
the future amount of insurance coverage or the global amount of insurance premiums and selfinsurance had occurred.
To the knowledge of the company there exists no significant risk that has not been insured.
Nevertheless, the Group cannot guarantee that it will not suffer an uninsured loss.
Self-insurance: The Group does not have any captive insurance company and uses classic selfinsurance solutions. For the "all risks except" cover, the deductible amounts to €59,000 per accident.
Over the last few financial years, the amount involved in this respect was not significant. For vehicle
risk, and in particular self-inflicted damage, the maximum risk (total destruction of the delivery fleet)
amounted to around €40 million at acquisition cost. This probability is not relevant as the vehicles
are spread throughout the country. The total cost of the vehicle fleet in terms of accidents insured
during the financial year amounted to €384,000, ie 0.10% of sales (compared to €410,000 in 2007, ie
0.12% of sales).
Social cover
The Group has put in place health cover contracts and a complementary retirement scheme for
Group employees and put in place a fund with an insurance company designed to cover contractual
retirement indemnities. A payment into the fund is made each year. The difference between the
value of retirement rights and the value of the fund is provisioned each year.
Consolidated Balance Sheet
* The consolidated 2006 and 2008 financial statements have been modified to take into account the impact of IFRIC 13 and the
reclassification of stock provisions.
in €000s
Note
Goodwill
Net intangible fixed assets
Net tangible fixed assets
Other non-current financial assets
Deferred tax assets
5.2
5.2
5.3
5.4
Total non-current assets
Stocks
Client receivables
Other receivables
Assets due to be sold
Cash and cash equivalent
7
8
8
8
10
Total current assets
TOTAL ASSETS
Capital
Consolidated reserves
Consolidated income
Group share of shareholder equity
11
31/12/2008
31/12/2007 (1)
31/12/2006 (1)
97 901
507
52 080
373
97 901
494
52 547
445
97 901
610
52 191
587
150 860
151 387
151 289
13 725
2 958
3 970
301
645
21 600
11 018
3 559
8 285
178
5 827
28 867
11 872
3 155
4 611
2 778
22 416
172 460
180 254
173 705
1 010
59 749
14 735
1 010
57 868
17 695
1 010
52 978
24 042
75 494
76 573
78 030
75 494
76 573
78 030
3 254
5 947
4 383
9 050
22 634
2 925
5 064
2 496
18 673
29 158
3 286
5 095
655
12 497
21 533
29 321
29 040
15 971
74 332
29 853
28 537
16 133
74 523
36 758
31 139
6 245
74 141
172 460
180 254
173 705
Minority interest
Total shareholders equity
Provision for staff benefits
Other non-current liabilities
Deferred tax liabilities
Long-term financial debt
12
13
6
14
Total non-current debt
Trade payables
Other current liabilities
Short-term financial debt
15
15
15
Total current debt
TOTAL LIABILITIES
Consolidated Income Statement
(p) Proposed to the General Meeting of 28 April 2009.
* The consolidated 2006 and 2008 financial statements have been modified to take into account the impact of IFRIC 13 and the
reclassification of stock provisions.
€000s
Note
Sale of goods (1)
Sale of services
Other income from ordinary business
Income from ordinary business
Purchase cost of goods sold (2)
Sales margin (1)-(2)
Personnel costs
External charges
Taxes and duties
Depreciation
Provisions
Other income / other charges
Income from sale of fixed assets
Operating income
Financial income
Gross financial costs
Net financial costs
Income before taxes
18
19
20
21
5.1 b
22
23
24
Corporate tax charge
25
Net income of the consolidated entity
26
2008
2007 (1)
2006 (1)
(12 months)
(12 months)
(12 months)
365 907
75
285
363 540
106
371
379 525
241
55
366 267
(161 240)
204 667
(111 781)
(49 498)
(8 084)
(10 591)
(1 316)
(313)
631
364 017
(156 495)
207 045
(111 781)
(50 451)
(7 103)
(10 349)
1 169
(1 074)
534
379 821
(162 916)
216 609
(108 386)
(54 310)
(6 597)
(9 481)
(375)
(422)
490
24 074
408
(1 873)
(1 466)
28 467
428
(1 803)
(1 375)
37 824
649
(1 637)
(988)
22 609
27 092
36 836
(7 873)
(9 397)
(12 794)
14 735
17 695
24 042
Minority share
Group share
26
14 735
17 695
24 042
Earnings per share (in euros)
Diluted earnings per share (in euros)
Dividend per share (in euros)
27
1.48
1.48
1.00 (p)
1.76
1.76
1.50
2.38
2.38
1.50
27
Cash Flow Statement
in €000s
2008
2007 (1)
2006 (1)
Business
14 735
13 202
17 695
11 175
24 042
11 110
11 857
1 924
84
(33)
(631)
27 937
(2 708)
9 982
1 757
9 683
1 913
4
(30)
(534)
28 870
854
(490)
35 152
2 996
4 915
(4 078)
1 962
(532)
503
2 179
(6 905)
(2 602)
(12 731)
(9 144)
(690)
(4 876)
30 116
16 139
30 276
Fixed assets acquisitions (2)
·
Intangible fixed assets
·
Tangible fixed assets
·
Variation in financial fixed assets
Fixed assets sales
(10 976)
(286)
(10 762)
72
1 419
(11 193)
(113)
(11 222)
142
1 102
(11 326)
(362)
(10 935)
(29)
1 326
Cash flow from investments operations
(9 556)
(10 091)
(10 000)
Dividends paid
Cash from borrowings (2)
Cash from subsidies
Cash received from capital increase
Variation in treasury shares (liquidity contract)
Repayment of borrowings and amortisation of subsidies
(14 851)
5 955
73
(976)
(15 943)
(15 152)
23 948
482
14
(4 174)
(8 117)
(15 149)
10 052
827
256
7
(28 665)
Cash flow from financing operations
(25 742)
(2 999)
(32 672)
Résultaneprdgo176952403
Activé
31/20765
enK€
Investments
10783564Elimnatodeschrgpu
Cash flow from operations
·Varitondesmpôfé175930
·Amortisenpv9503281
trésoeiunlà’xpa
Net group profit share
Elimination of income and charges without incidence on cash flow or
not related to operations
· Depreciation and provisions
· Deferred taxes change
· Remunerations paid in shares
· IFRS retraitment
· Capital gain on divestments
Cash flow of consolidated companies
· (Increase) Decrease in stocks
· (Increase) Decrease in clients receivables including
related accounts and others receivables
· Increase (decrease) in trade payables
· Other debt
Variations in working capital requirements
·Autresd(210)359
·Augmentaio(d)scpfr6905143
(Augmencopristahé
(4078)19623 ·(Augmentaio)Ddscply
·(Augmentaio)Ddsck8542960
Capcitéd’uofnemsgr284739
·Plus-vaedcion(534)906
·RetraimnIFSscdoé(30)
·RésultadecionALgq17
·Rémunratiospyec4218
Financing
Divdensré(152)49367
Finacemt
Fluxnetdrésoiap’vm(109)248
RemboursntcpaALgiq720
CesionALgtqu94
Cesiond’mblat1023687
·Varitonmblsfcèe142(9)7
·Imobilsatncrpe(12)09358
·Imobilsatncrpe(13)6249
Acquistond’mbla(193)268
Investim
Fluxnetdrésoipvac16390274 (Augmen
Varitondubesflm(1239)458·
(5 182)
3 049
(12 396)
Changes in cash position
Opening cash position
5 827
2 778
15 174
Closing cash position
645
5 827
2 778
(1) The consolidated 2006 and 2008 financial statements have been modified to take into account the impact
of IFRIC 13 and the reclassification of stock provisions.
(2) Investments and financing include finance leases under the items "tangible fixed assets" and "cash from
borrowings"and "cash from subsidies”.
Statement of changes in capital and reserves
Note : There are no minority interests.
in €000s
Shareholders equity
Number of
shares
10 072 382
Company capital
1 007
Consolidated
reserves
Net profit
Shareholders
equity
45 367
22 304
22 304
(22 304)
68 678
as of 31 December 2005
Allocation of 2006 profit
Treasury shares 2006 (liquidity contract)
11
11
191
191
Share premium
254
254
Dividends paid
(15 149)
Others (sorie)
Capital increase
29 300
3
3
Net profit as of 31 December 2006
(15 149)
24 042
24 042
52 978
24 042
78 030
Allocation of 2007 profit
24 042
(24 042)
Treasury shares 2007 (liquidity contract)
(4 174)
Shareholders equity
10 101 682
1 010
as of 31 December 2006
(4 174)
Others (sorie)
179
179
Liquidity contract
(19)
(19)
Capital increase
1 600
Share premium
14
14
Dividends paid
(15 152)
(15 152)
Net profit as of 31 December 2007
Shareholders equity
10 103 282
1 010
17 695
17 695
57 868
17 695
76 573
17 695
(17 695)
as of 31 December 2007
Allocation of 2007 profit
Treasury shares 2008 (liquidity contract)
(976)
(976)
Others (sorie)
(50)
(50)
Liquidity contract
(22)
(22)
84
84
Stock Options
Dividends paid
(14 851)
Net profit as of 31 December 2008
Shareholders equity
as of 31 December 2008
10 103 282
1 010
59 749
(14 851)
14 735
14 735
14 735
75 494
Notes to the consolidated accounts as of 31
December 2008
Toupargel Groupe operates under French law and is subject to legislation covering commercial
companies in France and in particular the provisions of the code of commerce. The company's head
office is located at 13 Chemin des Prés secs at Civrieux d’Azergues (69380) and is quoted on the Paris
stock market in compartment C of Euronext Paris. The Toupargel Group is specialised in home
delivery of frozen foods, fresh foods and groceries. The accounts and information are presented in
thousands of euros (€000s), except for per share information presented in euros. This note comprises
information additional to that in the consolidated balance sheet which amounts to €172,460,000 and
the consolidated income statement showing a net profit of €14,735,000. The Board of Directors
approved the consolidated financial statements as of 31 December 2008 in its meeting of 20
February 2009. The accounts will only be definitive after approval by the General Meeting of
shareholders which will be held on 28 April 2009.
Note on main accounting and valuation methods and general
notes
NOTE 1 – Main events during the financial period and events since closing
1.1 Main events during the financial period
• The Board of Directors meeting of April 25, 2008 granted 200,000 stock options.
•Tax inspections of Toupargel SAS and Place du Marché SAS are currently underway. The
consequences (business taxes and miscellaneous), which are already known and have been
contested, have been provisioned in the accounts.
• Verifications concerning payroll taxes for financial years 2005 to 2008 resulted in the recording of a
net profit of €820,000.
1.2. Events subsequent to closing
No significant event liable to modify the financial figures presented occurred between the date of
closing of the accounts on 31 December 2008 and the date of the Board Meeting approving the
accounts (20 February 2009).
NOTE 2 – Consolidation principles and valuation methods
2.1 Accounting system
Pursuant to European regulation 1606/2002 of July 19, 2002 on international accounting standards,
the consolidated financial statements of the Toupargel Group as of December 31, 2008 have been
drawn up in conformity with international standards on financial information "International Financial
Reporting Standards" (IFRS) as adopted by the European Union on December 31, 2008.These
accounting standards are available on the website of the European Commission
(http://ec.europa.eu/ internal_market / acounting / ias_fr)
The choices made by the Toupargel Group, in accordance with IFRS 1, in preparing its opening
balance sheet as of January 1, 2004 (date of transition to IFRS) are as follows:
• non-restatement of business groupings prior to transition date;
• non-revaluation of property assets at fair value as of the transition date;
• actuarial gains and losses for end of career termination benefits considered to be zero on the
transition date;
• Application of IFRS 2 only for equity plans granted after November 7, 2002.
New legislation, amendments and interpretations adopted by the European Union, which entered
into force on January 1, 2008, have no effect on the Group accounts.
With the exception of IFRIC 13 interpretation concerning customer loyalty programmes (see
paragraph 2.2), the Group has chosen not to apply standards, amendments to standards or
interpretations in advance, and in particular:
• IFRS 8 "operating segments" applicable on a compulsory basis for fiscal years beginning on or after
January 1, 2009;
• revised IAS 1 "Presentation of Financial Statements;
• Amendment to IAS 23 "Borrowing Costs". The company does not expect that these new rules will
have any significant impact on the content or presentation of its consolidated financial statements.
IFRIC 8 will not have any impact on the financial statements but will have an impact on sectoral
information presented in the appendices.
Rules governing presentation of summary statements
The consolidated balance sheet has been presented distinguishing "current" from "non-current"
assets as defined on the basis of IAS 1. Accordingly financial indebtedness, provisions and financial
assets have been broken down between those of more than one year included in "non-current"
assets and those of less than one year in "current" assets.
The consolidated income statement has been presented by type, based on one of the models
proposed by the National Accounting Committee (CNC) in its recommendation 2004-R-02. The Group
applies the indirect method of presentation for its cash flow statement as provided for in the same
recommendation.
2.2 Early application of IFRIC 13 and change in the method of presenting stock provisions
The group has decided to apply in advance, from January 1, 2008, IFRIC 13 interpretation concerning
"loyalty programmes" which sets forth the valuation methods and accounting principles applicable to
benefits granted customers in the framework of loyalty programmes and which will be compulsory
for all financial statements prepared after July 1, 2008. The application of IFRIC 13 only concerns the
method used to account for obligations arising from the award of loyalty points to customers at the
time they make purchases, the valuation of these benefits (as described in note 2.18) is already in
compliance with IFRIC 13. Until the end of fiscal year 2008, commitments for loyalty points awarded
but not yet used were the subject of a provision recorded in the operating result as a counterpart to
a non-current liability. From 2008, liabilities for such commitments are recorded as other current
liabilities with as counterpart a reduction in sales.
The presentation of financial statements for prior periods have also been amended on this point to
ensure comparability. In addition, stock provisions have been reclassified as variations in stocks. The
table below indicates the impact of the changes in presentation resulting from IFRIC 13:
in €000s
31/12/2008
31/12/2007
31/12/2006
Previous
Previous
Previous
Restated
Restated
Restated
presentatio
presentatio
presentatio
Accounts
Accounts
Accounts
n
n
n
Presentation of the Income Statement
Sales of goods
Income from ordinary business
Sales margin
Provisions
Operating income
365 116
365 476
203 488
(137)
24 074
365 907
366 267
204 667
(1 316)
24 074
363 148
363 625
206 703
1 511
28 467
363 540
364 017
207 045
1 169
28 467
379 170
379 466
216 017
217
37 824
379 525
379 821
216 609
(375)
37 824
7 024
5 947
6 932
5 064
7 355
5 095
Other current liabilities (deferred revenues)
Non-current indebtedness
Current indebtedness
27 963
23 711
73 255
29 040
22 634
74 332
26 669
31 026
72 655
28 537
29 158
74 523
28 879
23 793
71 881
31 139
21 533
74 141
Presentation of Cash flow
Eliminations income and expenses
Depreciation and provisions
Cash flow
Other debt
Variation in WCR
12 418
11 066
27 146
1 294
2 970
13 209
11 857
27 937
503
2 179
10 783
9 590
28 478
(2 210)
(12 339)
11 175
9 982
28 870
(2 602)
(12 731)
10 755
9 328
34 797
(335)
(4 521)
11 110
9 683
35 152
(690)
(4 876)
Presentation of the Balance sheet
Other non-current liabilities (provisions)
2.3 Valuation methods
The annual accounts of consolidated companies have been drawn up in conformity with accounting
principles and methods of valuation retained for the Group. They have been restated in order to be
in harmony with accounting principles retained for the establishment of consolidated accounts.
Management estimates
The establishment of consolidated accounts implies the use of estimates and assumptions having an
impact on the amounts entered for assets and liabilities. These estimates have been drawn up on the
basis of continuing operations based on information available at the time. The estimates can be
revised if the circumstances on which they were based change or if new information becomes
available which would modify or complete the estimates.
Accordingly, the consolidated financial statements for the financial year have been drawn up taking
into account the current context of economic and financial crisis and on the basis of financial market
information available on the closing date. The immediate effects of the crisis have been taken into
account, in particular in the valuation of assets and liabilities. With respect to longer-term assets, for
example intangible assets (goodwill), it has been assumed that the crisis will be limited in time. The
value of assets is assessed each year taking into account the long-term economic outlook and on the
basis of the best assessment of the Group's management given the context of limited visibility with
regard to future cash flow. Actual future results can differ from these estimates.
The main estimates made by Management when drawing up the financial statements concern:
• assumptions concerning certain provisions: provisions for loyalty points, retirement and seniority
awards;
• assumptions and estimates used for annual impairment tests on goodwill;
• amounts recorded for certain financial instruments and payments in equity.
Moreover, certain valuations that may have a direct impact on the financial statements or the
information provided in the appendices have been drawn up on the basis of data or values directly
taken from financial markets. The financial crisis has required a certain number of adjustments to
data or specific information provided in the appendix. The areas that are most sensitive for the
Group are the calculation of the weighted average cost of capital and the discount rate (notes 2.6.
and 2.15.).
The nature and amount of these estimates have been presented in the detailed notes to the
corresponding accounting items.
2.4 Consolidation method
All subsidiaries controlled by the Group are consolidated on the basis of full consolidation. Control is
considered as being the power, either direct or indirect, of managing the financial and operational
policies of the company in order to generate profit from its activities. It is presumed when the Group
holds more than 50% of voting rights. All intra-group transactions are eliminated on consolidation.
2.5 Conversion of transactions denominated in foreign currencies
Exceptionally, the Group may record transactions in foreign currencies. Transactions denominated in
foreign currencies are converted at exchange rates in force at the time of the transaction. At the end
of the financial year, monetary assets and liabilities denominated in foreign currencies are converted
at the closing exchange rate. Resulting conversion differences are recorded in the income statement
(item "financial income").
Non-current financial assets
2.6 Goodwill, tangible and intangible fixed assets
In conformity with standard IAS 16, "Tangible fixed assets" and standard IAS 38 "Intangible fixed
assets", only elements whose costs can be reliably determined and for which it is probable that
future economic benefits will be derived by the Group, are accounted for under fixed assets.
In conformity with standard IAS 36, "Depreciation of assets", when events or changes in market
situation indicate a risk of loss of value of tangible or intangible fixed assets whose useful lives have
been defined, a detailed review is carried out to determine if their net book value is lower than their
recoverable value, defined as the higher of fair value (less sale cost) and useful value. Useful value is
determined by discounting future cash flow from use of the asset and sale value.
In cases where the recoverable amount is less than net book value, a loss of value is accounted for
based on the difference between these two amounts.
For goodwill whose useful life has not been defined, the same depreciation test is carried out each
year.
Loss of value regarding tangible and intangible fixed assets with defined useful lives can be
recalculated later if recoverable value becomes higher than net book value (up to the amount of
depreciation initially accounted for); for goodwill, amortisation is irreversible.
Goodwill : Goodwill: goodwill has not undergone any changes since the transition to IFRS standards
on 1 January 2004, on this date, two categories of intangible assets were grouped together under
this accounting item :
• goodwill already identified under French standards which has not been changed under IFRS
standards is exclusively goodwill generated as a result of transactions that occured prior to the
transition date: : in conformity with the exemption provided for in IFRS 1 for IFRS 3 with respect to
retrospective restatement of corporate consolidations, the valuation of the assets and liabilities of
acquired companies under French standards have not been called into question.
• Business assets which do not correspond to the definition of an intangible asset identifiable in the
sense of IAS 38. IFRS standards require that goodwill no longer be amortised. As indicated above,
impairment tests have been introduced in conformity with IAS 36 at least once a year (generally at
the end of the year) for entities generating cash flow for whom goodwill was allocated at the time of
acquisition. The cash-generating units identified by the Group consist of two legal entities: Toupargel
and Place du Marché. It should be noted that following the merger in 2006 of Toupargel and Agrigel,
both of the former cash generating units , Toupargel and Agrigel, were consolidated.
The methodology followed consists mainly in comparing recoverable values for each of the Group
entities to the net book value of groups of corresponding assets (including goodwill and working
capital requirements). These recoverable values are mainly determined by calculating the discounted
cash flow from future operations over a period of seven years and an end value (discounted cash
flow method). The projected cash flows do not include increases in capacity or any future
restructuring. The discount rate is determined using the weighted average cost of capital (WACC).
This is an after-tax rate applied to future cash flows after tax. Use of this rate results in recoverable
values that are identical to those obtained from using pre-tax rates on future cash flows before tax as
required by IAS 36.
Intangible fixed assets: This mainly concerns software applications which are amortised on a straight
line basis over their estimated useful lives (1 to 5 years).
Tangible fixed assets: Tangible fixed assets are accounted for at their acquisition cost less cumulative
amortisation and loss of value. Borrowing costs are accounted for as charges. Depreciation is
generally based on normal useful lives. The depreciation method used by the Group is the straight
line or declining balance method, the latter being, for certain types of assets (vehicles), most
representative of their utilisation and the advantages obtained from such assets.
For newly acquired assets, the methods and periods of depreciation are as follows ::
Method
Straight line
Straight line
Period
7 to 15 years
7 to 25 years
3 to 10 years
4 to 10 years
1 to 6 years
Computer and office equipment
Straight line
Straight line
Linear/Reducing
balance
Straight line
Office furniture
Straight line
5 to 10 years
Land improvements
Buildings and improvements
Industrial equipment
Other improvements
Transport equipment
3 to 5 years
When significant, residual value is taken into account in the amount that is subject to depreciation.
The various components of tangible fixed assets are accounted for separately when their estimated
useful lives, and therefore their periods of depreciation, are significantly different.
Financing and simple lease contracts: Fixed assets that are the subject of a lease financing contract
which have the effect of transferring to the Group the benefits and risks inherent in ownership, are
dealt with as fixed assets acquired on credit terms and accounted for as tangible fixed assets (land,
buildings, rolling material), based on the present value of future lease payments. Such fixed assets
are depreciated on the basis of the methods and useful lives described above. Rental charges
concerning simple lease contracts which do not fulfil these criteria, are maintained in operating
charges.
Maintenance and repair expenses are recorded in charges except for those which extend the useful
life of the asset.
2.7 Non-current financial assets
In accordance with IAS 32, Financial Instruments, Disclosure and Presentation", non-current financial
assets mainly include loans and receivables (including the "restricted cash" elements of the liquidity
contract used to buy back the company's own shares). Loans and receivables comprise receivables
related to non consolidated investments, staff loans and deposits paid for commercial leases: they
have been accounted for using the method of depreciable cost considered equivalent to entry value.
They can be subject to a loss of value if there is an objective sign of depreciation. Loss of value is
accounted for in the income statement and is reversible if recoverable value moves favourably in the
future.
2.8 Deferred taxes
Deferred tax assets are recorded under non-current assets in the balance sheet in view of the fact
that it is more likely that they will be recovered after the current financial year.
Deferred tax assets and liabilities are offset within the tax consolidation group comprising:
Toupargel-Agrigel (controlling holding company), Toupargel and Place du Marché, the taxes being
collected by the same tax administration.
Deferred tax assets and liabilities are accounted for under non-current assets and liabilities.
In compliance with IAS 12, deferred tax calculated on these items directly recorded in shareholders
capital is accounted for under shareholders capital.
Deferred tax assets and liabilities (with the exception, indirectly, of deferred tax assets concerning
provisions for retirement), are not revalued in conformity with standard IAS 12.
Current assets
2.9 Stocks
In conformity with standard IAS 2, stocks are valued at the lower of cost and net realisable value.
a - Stocks of merchandise (frozen products, fresh food and groceries): Stocks of merchandise are
valued according to the average weighted cost method. The average weighted cost is calculated on
the basis of invoiced purchase prices plus transport costs less rebates and related.
b - Stocks of transformed products: Products that have been transformed into individual portions
after butchery and packing by Toupargel Production are valued at cost of production less the value of
waste and deferred rebates. These stocks are classed with stocks of merchandise.
c - Stocks of presents: Stocks of presents for commercial operations are valued at purchase cost.
d - Provisions: A provision is constituted to reduce the value of stock to its net realisable value in the
following way:
Stocks of merchandise and fresh food
100% provision:
- when on the inventory date the buy by date for frozen goods is less than three months
- when the product has been definitively removed from the sales catalogue. Provisions determined
on a case-by-case basis:
- when the product has a seasonal character and there are large stocks, particularly with regard to
expected sales,
- when the product has a low turnover.
Stocks of presents
100% provision when the marketing operation has ended.
2.10 Customer receivables and other current assets
The item “customer receivables and other current assets” comprises mainly:
• trade payables or loans maturing within one year which represent current financial assets; these
assets are recorded at fair market value when initiated and then at depreciated cost which is
assimilated to historic cost. They are discounted if they have been in the accounts for more than one
year. The difference between fair market value and book value is charged to the income statement in
the “Provisions” item. Cheques which are returned unpaid are depreciated for 100% of their value
excluding taxes. Other current receivables are dealt with individually and, if necessary, are subject to
a provision for depreciation to take into account collection difficulties which might occur.
• Financial derivative assets: The Group has recourse to financial instruments that hedge interest
rate risks to limit exposure to such risks. The Group does not apply hedge accounting and has chosen
to value, in conformity with IAS39, financial instruments at their fair value. This fair value when it is a
credit balance is presented under liabilities in the item “other current liabilities”. The company
continus to account for variations in the fair value of derivative instruments as a counterpart to the
income statement, under the item "gross financial costs".
• Social or tax receivables are valued at their nominal value.
2.11 Non-current assets due to be sold
In conformity with standard IFRS 5, fixed assets immediately available for sale for which a
programme of sale and required steps to find a client have begun, and whose sale within a year is
highly probable, are classified as being intended for sale under current assets. Such fixed assets are
valued at the lower of book value and fair value net of sale expenses, and if appropriate after
depreciation.
2.12 Cash and cash equivalents
Cash includes liquid assets in bank current accounts, money market mutual fund shares which can be
traded or sold at short notice and that have no significant risk of loss of value in the event of
fluctuations in interest rates. They are valued at fair value which is equal to the net asset value on
the closing date.
Group share of shareholders equity
2.13 Treasury shares
In conformity with IAS 32, Treasury shares held by the Group pursuant to the equity buyback
programme carried out under the liquidity contract, are recorded at their acquisition cost and result
in a reduction in shareholders equity. Income from the sale of Treasury shares is allocated to
shareholders equity less corporate tax and does not impact the profit or loss for the financial year.
The "restricted cash" part of the liquidity contract is recorded as a non-current financial asset.
Non-current and current indebtedness
2.14 Provisions and potential liabilities
In conformity with standard IAS 37 "Provisions, potential assets and liabilities", a provision is
constituted when there exists a legal or implicit obligation resulting from past events and it is
probable or certain that it will lead to a payment in favour of third parties without a counterpart at
least equivalent to that expected and when a reliable estimate of the amount can be made.
Provisions include in particular:
•
obligations for retirement benefits
•
obligations for service medals,
•
provisions for litigation
•
provisions for restructuring
•
provisions for tax or social adjustments. provisions are broken down between current and
non-current liabilities according to due dates. Information is provided in the detailed notes on
potential assets and liabilities if the impact is significant, except if the probability of occurrence is
low. When the impact is significant, provisions are updated.
2.15 Retirement commitments and other staff benefits
The staff of the Toupargel Group benefits from immediate advantages (paid holidays, end of year
bonus, profit sharing, reduced working time resulting from reduction in working time agreements…),
benefits after leaving (retirement benefits, Social Security and complementary retirement schemes)
and other long-term advantages (Seniority Awards).
Short-term advantages: Short-term advantages are recognised in the indebtedness of the Group and
are included in other current indebtedness.
Benefits after leaving:Benefits after leaving are subject to various methods of coverage as described
below:
Fixed contribution schemes: Fixed contribution schemes are characterised by payments to
organisations that free the employer from any subsequent commitment, the organisation assuming
the responsibility of paying amounts due to employees. For the Toupargel Group, this concerns
public retirement schemes (Social Security and complementary retirement schemes). By their nature,
defined contribution schemes do not require provisions in the accounts of the Group.
Defined benefits schemes: For defined benefit schemes, the employer has a commitment vis-a-vis
employees These schemes can :
•
Either be financed during the period of employment by payments to funds specialised in the
management of amounts received from employers, and by the payment by these funds of the
amounts due to beneficiaries subject to the amount available,
•
Or directly paid by the employer to beneficiaries when rights are exercised.
Within the Toupargel Group, defined benefit schemes concern retirement indemnities. Toupargel
possesses a guarantee fund (insurance contract) concerning retirement indemnity commitments
which receives funds from the employer on a regular basis although this does not free the employer
from its commitments to employees. The fund is accounted for as an asset dedicated to covering the
scheme. In view of the provisions of the insurers contract, the management company is not allowed
to invest available funds in Toupargel shares.
Based on the specific provisions of each defined benefits scheme (determined by legislation,
collective agreements or company agreements), an independent actuary calculates, at the closing of
each financial year, the present value of future commitments of the employer (projected benefits
obligations). This present value of commitments, valued scheme by scheme, results in the
constitution of a provision for the amount which exceeds the fair value of the corresponding
coverage assets, adjusted for non-recognised actuarial profits and losses and, if applicable, the cost
of unaccounted past services.
Recurrent factors
•
increases due to the acquisition of an additional year of rights (cost of services rendered
during the financial year)
•
increases due to "undiscounting" corresponding to a year less compared to the date on
which rights are paid (financial cost),
•
reductions related to the exercise of rights (benefits provided)
Specific factors
Variations (actuarial differences) caused by changes in long-term actuarial assumptions (inflation,
rate of salary increases, turnover, mortality, discount rates and retirement age etc …) and experience
(difference between expected and actual leaving dates.
• Variations caused by changes in benefits granted (reductions or liquidations of existing schemes).
The fair value of assets (Toupargel only) transferred to specialised management funds which collect,
invest and administer sums paid by the employer, vary depending on:
•
payments received from employers (contributions),
•
payments made to beneficiaries (benefits provided),
•
the yield on assets including changes in market value.
Actuarial assumptions, primarily the discount rate, the rate of growth of wages and staff turnover
rates, are reviewed annually by those in charge of employee benefits pursuant to existing internal
procedures and in consultation with the actuary.
With regard to recognising actuarial differences in the income statement (profits or losses) related to
benefits on leaving, the company opted, pursuant to IAS 19 as revised, for the direct and immediate
recognition of all actuarial differences. Previously the company used the so-called "corridor" method.
The impact of this change in method (Sorie), in a net amount of €191,000 (gross amount €292,000),
has been deducted from consolidated reserves.
Modifications to benefit schemes on leaving give rise to a spreading out of the cost of past services
(incidence of changes in rights for periods of work already completed) over the average probable
remaining period of active work of beneficiaries.
The reduction or liquidation of a benefit scheme after leaving results in an immediate reversal, in the
income statement, of previously accounted for commitments.
Note 12 provides details on:
• methods of granting benefits after leaving for defined contributions schemes
• actuarial assumptions used to calculate commitments for the last three financial years
• changes in the financial situation of defined benefits schemes
• and their impact on financial statements.
Long-term advantages during employment: For Toupargel Group, long-term advantages are Seniority
Awards (anniversary bonuses).
An independent actuary calculates, at the closing of each financial year, the present value of future
obligations of the employer for Seniority Awards (projected benefits obligations or PBO).
Seniority Awards do not have any sinking fund. The present value of commitments therefore results
in a non-current provision on the liabilities side of the balance sheet (other non-current liabilities).
Actuarial variances and the impact of modifications, reductions or liquidations of schemes related to
long-term benefits (Seniority Awards) are immediately and entirely taken account of in the income
statement.
2.16 Other provisions
a - Court litigation: with respect to Court litigation, an assessment of risks is made based on the
demands of the opposing side. The provision is adjusted as the court proceedings advance.
b - Provisions for restructuring: the provision is constituted if the restructuring has been announced
with a detailed plan and is due to occur in the near future or has begun. The provision corresponds
mainly to redundancy payments, early retirement, notice periods not carried out and training costs
of persons leaving as well as costs of closing down sites.
2.17 Financial debt
In conformity with IAS 39, financial debt which includes:
- borrowings and other financings, in particular lease financing borrowings,
- and bank overdrafts,
is broken down between non-current financial debt and current financial debt depending on
maturity (greater than or less than 12 months).
In the case of financings granted over a number of years, freely usable by the borrower and drawn
down in the form of short term notes, in conformity with IAS 1.60, it is the ability of the borrower to
renew the credit for a period in excess of 12 months after the closing date which determines
whether or not the financial debt is classified as non-current.
Financial debt is valued at its historic nominal value which is considered as close to depreciated cost
at the date of entry into the balance sheet.
2.18 Other non-current liabilities
In addition to the non-current element of provisions and liabilities described in note 2.14, other noncurrent liabilities comprise subsidies received.
Cash subsidies related to assets
Subsidies received and paid to property leasing organisations are restated as other non-current
liabilities. In conformity with the option available under IAS 20, these subsidies are recorded as
deferred income among other current or non-current indebtedness depending on their maturity
dates. They are included in the income statement on the same basis as the fixed asset depreciation
they helped finance. The share of subsidies included in the income statement is presented in the
item "other income from ordinary business".
Public subsidies associated with the result
Subsidies are recognised in the result whenever there exists a reasonable assurance that:
- the beneficiary in the Group complies with the conditions governing the subsidies,
- the subsidies will be received.
In conformity with the option provided by IAS 20, subsidies related to the income statement are
presented under operating income in the item "other income from ordinary business". Subsidies are
valued at their nominal value on the date they enter the balance sheet.
2.19 Trade payables and other current liabilities
The item “trade payables and other current assets” comprises mainly:
•
des dettes commerciales qui constituent des passifs financiers courants : ces passifs sont
enregistrés à leur juste valeur, lors de leur initiation puis au coût amorti qui est assimilé au coût
nominal. Ils font l’objet d’une actualisation lorsque leur échéance est supérieure à un an. L’écart
entre la juste valeur et le montant comptabilisé au bilan est imputé en compte de résultat,
•
des instruments financiers dérivés passifs tels que décrits en note 2.7,
•
des dettes fiscales et sociales évaluées à leur valeur nominale,
•
des produits comptabilisés d’avance relatifs aux points fidélité clients .
Deferred revenue concerning customer loyalty points
As part of the company's customer loyalty policy, Toupargel Group companies grant their customers
loyalty points. Customers are able to accumulate loyalty points on the basis of the purchases they
make. The points entitle them to a benefit (gifts, discounts on certain products in the catalogue,
etc..). The company recognises a deferred revenue in its accounts at closing corresponding to the
amount of benefits still due to customers: this is estimated on the basis of a percentage of the value
of points acquired as of December 31 and still unused. The percentage is determined on the basis of
the expected rate of transformation of the points. The expected conversion rate reflects the track
record and loyalty policy for the following year. Under IFRIC 13, applied for the 1st time in 2008, the
liability previously recorded as a provision is now presented in other current liabilities (see note 2.2.).
2.20 Off-balance sheet commitments
The Group has introduced a system designed to catalogue off-balance sheet commitments and
understand their nature and purpose. The process involves the centralisation, in the context of
consolidation procedures, of information relating to the following forms of commitment:
guarantees (guarantees and sureties),
collateral (mortgages, pledges),
simple leases, purchase and investment commitments
other commitments
2.21 Income from ordinary business
Income from ordinary business comprises sales of goods and services resulting from the main
business of the Group.
Business income is recorded, in conformity with IAS 18, on the basis of the method of accounting for
commitments.
•
Income resulting from the sale of goods is recognised as soon as the transfer to the
purchaser of the risks and advantages inherent in ownership of the goods has occurred and the costs
assumed or forthcoming related to the transaction can be measured reliably.
Reductions or rebates granted clients are accounted for as a reduction in income. Commercial
measures in the form of granting benefits to clients free of charge (loyalty programs) are accounted
for under operating charges and provisioned in conformity with the provisions of IAS 37 "provisions,
potential assets and liabilities". In 2008, the Group will take into account draft interpretation IFRIC 13
and will account for variations in provisions as a reduction in sales (see note 2.2).
•
Production The sale of transformed and packaged products by the Toupargel Production unit
is not dissociated from the sale of other goods. Consequently, the corresponding income is
accounted for as sales of goods. Similarly, purchases of unfinished products for transformation are
recorded under purchases of goods and stocks of materials and finished products as stocks of goods.
•
Income related to the sale of services is valued at the fair value of the counterpart received
or to be received. Income related to the sale of products is accounted for when the delivery has
occurred, the amount of income can be measured reliably and the economic benefits associated with
the transaction have been received by the Group.
2.22 Purchase cost of goods sold
This includes sales of goods, variations in stocks and reductions, rebates and similar regarding sales
of goods. Advertising expenses and other commercial cooperation agreements entered into and
invoiced by the Toupargel Group to its suppliers are not considered, according to IAS 18, as
representing remuneration for a real identifiable service rendered by Toupargel to its suppliers
whose fair value can be reliably estimated. Consequently, amounts accounted for in this respect do
not represent income but are taken into account as a reduction in the cost of goods sold. The share
of these sums related to non-consumed purchases at closing are recorded as a reduction in the value
of stocks. Similarly, stock depreciation has, since this year (see note 2.2.) been included in the cost of
purchasing goods sold.
2.23 Personnel costs: remuneration paid in shares
The fair value of stock options has been determined on the basis of the Black & Scholes model. This
model takes into account the characteristics of the scheme (exercise price, exercise period), market
information at the time of the grant (risk-free rate, share price, volatility, expected dividends) and
behaviour assumptions concerning beneficiaries.
Fair value is set on the grant date and accounted for as personnel costs over the acquisition period of
rights, with as counterparty a reserve account. The amount accounted for take into account the
number of beneficiaries and starting assumptions. At the end of the period of acquisition, the
cumulative amount of benefits accounted for remains in the reserves whether the options have been
exercised or not.
2.24 External charges
a - Research and development expenses: During its normal business, the company does not normally
need to assume research and development expenses. All expenses designed to develop and improve
client services are recorded.
b - Advertising, marketing and prospecting for new clients: Expenses engage to promote Group
brands and products with clients and consumers are recorded as charges for the for natural period
with the exception of presents which still have a commercial value which are valued as stocks and
catalogue expenses for future sales campaigns which are recorded on the asset side of the balance
sheet as prepaid expenses within the item "other current receivables". Similarly, expenses for
prospecting new clients are recorded as charges.
2.25 Operating income
The Group uses operating income as an indicator of performance. Operating income corresponds to
income for the whole of the consolidated entity after taking into account:
- capital gains or losses on sale of assets
- depreciation of assets,
- other operating income and charges which include in the main the impact of restructuring costs and
litigation or highly unusual events,
and before taking into account:
- the cost of net financial indebtedness,
- other financial income and expenses
- corporate tax
2.26 Net financial cost
Net financial cost comprises:
- the gross financial cost comprising interest charges on borrowings, lease financing contracts and
bank overdrafts,
- other financial income and charges comprising discounts, income on Cash and cash equivalent,
variation in financial provisions, dividends of non consolidated companies.
2.27 Corporate tax charge
a -Tax payable and deferred: Corporate tax comprises tax payable by each consolidated tax entity
corrected for deferred tax as determined as indicated in note 2.8.
b - Tax Consolidation: Toupargel Groupe, Toupargel and Place du Marché benefit from the Group of
companies tax regime based on the provisions of article 223 A to U of the C.G.I. Toupargel Groupe,
head of the consolidated Group accounts for tax payable in its consolidated income statement, in
conformity with the tax consolidation agreement it has entered into, tax economies or additional
potential charges resulting from tax consolidation. The agreement in force guarantees the tax
neutrality of the tax consolidation regime for each company forming part of the tax consolidation
group.
2.28 Earnings per share
Earnings per share are calculated by dividing the Group share of net income by the average weighted
number of shares comprising the capital in circulation during the financial year with the exception of
treasury shares. Diluted net income per share is calculated taking into account instruments providing
deferred access to capital (warrants), and the probability of subscription given market prices.
Diluted net income takes into account the number of shares to be created based on share prices as
of 31 December using the so-called "share buyback" method which assumes that the funds obtained
at the time the share options are exercised are allocated in priority to the buyback of shares at
market prices. A share acquisition scheme is considered as dilutive when it has as a consequence the
issue of ordinary shares at a share price less than the average stock market price over the period.
Stock options that enables shares to be acquired at a price that is less than the average stock market
price, are not taken into account in the calculation of diluted earnings per share
2.29 Sectoral information
An analysis of the criteria set out in standard IAS14 concerning business and sectoral sectors
(structure and autonomy of organisation, nature of products and processes, type of clients,
regulatory environment etc.) has enabled identification of the first layer of sectoral information
concerning business sectors, which can be broken down as follows:
- "Frozen foods" business: this represents the bulk of Group income and is carried out by the legal
entity Toupargel for which it is the only source of income;
- "Fresh food and groceries" business: this is carried out by the legal entity Place du Marché for which
it is the only source of income.
As the group carries out its business exclusively in France, presentation of income and earnings by
geographic sector is not relevant.
2.30 Cash flow statement
The cash flow statement has been drawn up in conformity with IAS 7 based on the indirect method.
It distinguishes revenues derived from business from those derived from investment and financing
operations.
The impact of variations in scope is presented as a net amount under investment flows. It
corresponds to the price effectively paid during the financial year, in the framework of acquisition
policy, adjusted by the asset/liability cash position acquired.
Cash flow from business is that which generates income and which does not correspond to the
criteria of investment flows or financing flows.
Cash flow is calculated by adjusting net income by amortisation and provisions (excluding variations
in provisions for current assets with the nature of cash charges), income from divestments, and
calculated charges (income and charges directly paid from reserves such as benefits related to
payment in shares which results in creation of shares).
Cash flow from investments are those resulting from acquisitions and sales of long-term assets and
other assets not classified as cash equivalents. Interest received is also included in these investment
flows. The Group includes finance leases in investment flows.
Financing operations are those which result in a modification in the amount or nature of
shareholders equity or corporate indebtedness. Increases in capital during the financial year,
dividends paid, as well as issues or repayments of borrowings, are included in this category.
The Group Cash position is defined as being the net balance of the following balance sheet items:
- cash and equivalent,
- current bank lines and credit balances.
NOTE 3 - Consolidation scope and closing date
The closing date is 31 December.
The Consolidation scope as of 31 December 2008 comprises the following companies:
- Toupargel Groupe SA, holding company of the consolidated group, "Frozen foods" business
- Toupargel SAS, "Fresh food and groceries" business: Place du Marché SAS
as well as 50% of the Eismann - Toupargel grouping created on 29 August 2007.
This grouping did not make any accounting entries during financial year 2008 (purchases have been
entered directly into the accounts of the member entities of the grouping).
The company accounts retained for the consolidation as of 31 December 2008, concerning Toupargel
Groupe SA, Toupargel SAS, and Place du Marché SAS, are for a period of 12 months corresponding to
the statutory accounting closings for these entities.
Amount of capital
Number of shares
Shareholders
equity
31/12/2008
Amount of investment
Number of shares held
Percentage held
Consolidation method
Head office
SIREN Code
NAF Code
as
of
Toupargel
25 000 K€
1 250 000 shares
57 962 K€
Place du Marché
100 K€
100 000 shares
(2207)K€
83 438 K€
1 250 000 shares
100 %
Full consolidation
13 chemin des Prés Secs
69380 CIVRIEUX D’AZERGUES
957 526 858
47 11 A
100 000 shares
100 %
Full consolidation
13 chemin des Prés Secs
69380 CIVRIEUX D’AZERGUES
325 743 516
47 91 B
NOTE 4 - Sectoral business information
in €000s
Frozen foods
2008
2007
Fresh food and groceries
2006
2008
2007
Holding company
2006
(12
months)
347 248
(12
months)
346 825
(12
months)
364 634
(12
months)
18 659
(12
months)
16 715
(12
months)
14 891
Income from ordinary business
347 476
347 181
364 876
18 791
16 836
14 914
Sales margin
196 017
199 109
209 638
8 650
7 936
6 971
24 451
27 591
36 548
(2 503)
(2 988)
(3 022)
476
473
422
155
61
67
Cash flow
28 033
28 786
34 356
(1 858)
(2 419)
(2 597)
Goodwill
95 915
95 915
95 915
1 986
1 986
463
461
606
43
33
46 150
46 192
45 054
5 930
6 355
Sales (non-Group)
Operating income
Income from divestments
Intangible fixed assets
Tangible fixed assets
Consolidated
2008
2007
2006
(12
months)
(12
months)
(12
months)
2008
2007
2006
(12
months)
365 907
(12
months)
363 540
(12
months)
379 525
366 267
364 017
379 821
204 667
207 045
216 609
24 074
28 467
37 824
631
534
489
27 937
28 870
35 153
1 986
97 901
97 901
97 901
4
507
494
610
7 137
52 080
52 547
52 191
Retirement
2 927
2 705
3 099
146
127
96
Investments
10 572
11 109
11 045
475
226
252
Depreciation
9 750
9 509
8 506
841
840
975
Worforce
3 367
3 366
3 504
258
252
231
31
2 126
1 763
105
9
3 864
2 503
93
10
4 298
3 394
91
9
3 178
2 925
3 286
11 048
11 335
11 297
10 591
10 349
9 481
3 634
3 628
3 744
Inter-sector sales are negligible.
Notes to the balance sheet
NOTE 5 – Fixed assets
5.1 Récapitulation
a - Variation in gross fixed assets
Intangible
fixed assets
in €000s
Goodwill
1er January 2006
97 901
Acquisitions
Sales / Divestments
31 December 2006
97 901
Acquisitions
Sales / Divestments
31 December 2007
97 901
Acquisitions
Transfer from account to account
Sales / Divestments
31 December 2008
97 901
(1)
2 639
362
25
2 976
113
132
2 957
286
3 243
Tangible
Marketable
fixed assets
shares
102 863
191
10 935
76
6 361
267
107 437
11 226
6 458
112 205
10 762
3 497
3 497
5 403
114 067
3 497
Other
financial
assets
634
69
116
587
83
225
445
71
Total
204 228
11 442
6 769
208 901
11 422
6 815
213 508
11 119
143
373
5 546
219 081
(1) Intangible fixed assets corresponds to software
Tangible fixed asset entries for 2008 correspond in the main to:
- the acquisition of motor vehicles for €6,189,000, of which €5,869,000 financed by a lease,
- various buildings and improvements for €2,400,000,
- the acquisition of IT equipment for €2,006,000
Sales of fixed assets amounted to €1,419,000 (result: €631,000). They mainly comprises sale of
vehicles (renewal of fleet).
b - Variation in depreciation / provisions
in €000s
Goodwill
31 December 2005
Depreciation
Writebacks
31 December 2006
Depreciation
Writebacks
31 December 2007
Depreciation
Transfer from account to account
Writebacks
31 December 2008
Other
financial
assets
Intangible Tangible fixed Marketable
fixed assets
assets
shares
2 206
51 742
185
9 296
25
5 792
2 366
55 246
229
10 120
132
5 886
2 463
59 480
273
10 318
3 196
3 196
0
4 615
2 736
61 988
3 196
Total
53 948
9 481
5 817
57 612
10 349
6 018
61 943
10 591
4 615
67 920
(1) Intangible fixed assets corresponds to software
Depreciation of intangible and tangible fixed assets can be broken down into :
in €000s
Amortisation of software
Other depreciation of tangible fixed assets
Property leases
Equipment leases
Total
31/12/2008
31/12/2007
31/12/2006
273
229
185
4 520
5 292
5 780
900
900
899
4 898
3 928
2 617
10 591
10 349
9 481
31/12/2008
97 901
507
52 080
373
150 860
31/12/2007
97 901
494
52 547
445
151 387
c – Net fixed assets
en K€
Goodwill
Intangible fixed assets
Tangible fixed assets
Other financial assets
Total
31/12/2006
97 901
610
52 191
587
151 289
5.2 Goodwill and intangible fixed assets
The €97,901,000 recorded as goodwill can be broken down into:
- intangible assets related to Toupargel i.e. €96,486,000,
- intangible assets related to Place du Marché i.e. €1,415,000,
resulting from previous acquisitions of companies or businesses.
Tests of possible loss of value are carried out at the end of the year based on 7 year plans approved
by the Board of Directors. The method employed is that of discounted cash flows (DCF) carried out at
the level of the units generating cash (UGC) as described in note 2.6.
The discount rates and growth rates used to estimate recoverable value for subsidiaries in the
"frozen food" business were 10.5% and 2% in 2008 (compared to 9.5% and 2.0% in 2008) and for the
subsidiary Place du Marché (fresh foods and groceries) 12.4% and 0.5% in 2008 (compared to 11.5%
and 0.5% in 2008). Rates for Place du Marché are more conservative as the business is in a
development phase and the risk premium is greater. Discount rates for the calculations correspond
to the average weighted cost of capital and are applied to cashflows after-tax. Their use results in the
determination of recoverable values that are identical to those obtained by using a pre-tax rate on
untaxed cash flow as required by IAS 36
Assumptions retained for sales and final values are, for the "frozen foods" business, in line with
available market information.
A business plan has been defined for the "Fresh foods and Groceries business, involving an
enlargement of the catchment area and a push on Internet sales via the website
www.placedumarche.fr.
It should be noted that the investment assumptions retained for the determination of final values of
cash flow include the impact of the growing integration of the frozen foods and fresh foods/groceries
business (combining of agencies).
Tests undertaken in 2008, 2008 and 2006 concerning goodwill for the UGCs (2 in 2006, 2008 and
2008: Toupargel and Place du Marché) did not result in any loss of value.
The sensitivity of recoverable value calculations to variations in discount rates and growth rates of
cash flow in the calculation of quarterly values is described in the table below.
In €00s
Sensivity
Sensivity to discount rate
+ 1.5%
Difference recoverable value – book
+ 3 850K€
value of assets of the cash flow unity
Sensivity to the infinite rate
- 0.5 %
Difference recoverable value – book
+ 4 885K€
value of assets of the cash flow unity
Book value includes tangible and intangible assets and WCR.
- 1.5%
+ 7 073K€
+ 0.5 %
+ 5 642 K€
5.3 Details of tangible fixed assets
a - Detail
b - Impact on the income statement of the restatement of lease finance contracts
in €000s
Property
leases
Leases
granted
Equipment
leases
Total
The restatement resulted in:
- a reduction in payments
- an increase in transfers to depreciation
2 033
(900)
6 367
(4 898)
8 400
(5 798)
- an increase in financial expenses
(440)
(351)
(791)
- a reduction in other income
175
(224)
(49)
Impact on income as of 31/12/2008
868
894
1 762
Impact on shareholders' equity as of 31/12/2008
4 968
7 581
12 550
Impact on income as of 31/12/2007
Impact on income as of 31/12/2006
950
1 142
1 528
2 780
2 478
3 923
1
Lease finance contracts include a purchase option at maturity at a price corresponding to:
- for the vehicle fleet, 1% of the original value of the assets,
in €000s
Gross
amount
Land acquired
land leases
Total land
Buildings acquired
Buildings leased
Total buildings
Technical installations acquired
Total technical installations and equipment
Other fixed assets acquired
Other leased fixed assets
Total other tangible fixed assets and leased
Fixed assets in process
Total
of which lease finance contracts
1 536
1 146
2 683
15 562
20 457
36 019
13 825
13 825
25 269
35 617
60 886
654
114 067
57 220
31/12/2008
Depr/Prov
170
170
8 217
7 801
16 018
8 711
8 711
12 198
24 891
37 089
61 987
32 692
Net amount
31/12/2007
Net amount
1 367
1 146
2 513
7 346
12 656
20 002
5 114
5 114
13 071
10 726
23 798
654
52 080
24 529
31/12/2006
Net amount
1 262
1 146
2 408
6 280
13 556
19 836
6 223
6 223
8 747
14 395
23 142
938
52 547
29 097
- for industrial assets, a symbolic value ranging from €1 to €139.
c - Use of fixed assets
All assets included as tangible fixed assets are used. Assets to be sold and which are not used are
included in "Assets held for sale". They amounted to €301,000 net as of 31/12/2008.
5.4 Details of other non-current financial assets
in €000s
31/12/2008
Gross
amount
31/12/2007
Depr.
Prov.
or Net amount Net amount
31/12/2006
Net
amount
Loans and other financial fixed assets
140
140
252
367
Deposit and guarantees
233
233
193
220
Total
373
373
445
587
1 368
1 136
2 504
5 477
14 467
19 944
6 514
6 514
8 975
13 980
22 955
274
52 191
29 583
NOTE 6 - Details of deferred taxes
in €000s
31/12/2008
31/12/2007
31/12/2006
· Provisions for retirement
1 120
1 007
1 131
· Organic
· Provision paid holidays
203
107
209
169
95
99
· Employee profit-sharing
1 204
1 247
1 680
2 634
2 632
3 005
· Restatement of equipment and financial leases
2 610
2 302
1 776
· Restatement of property leases
1 711
1 412
1 085
· Restatement of optional depreciation
1 519
1 107
609
· Provisions for price increases
62
8
10
· Financial instruments
875
111
(16)
Deferred tax assets
· Reclassification other taxes
34
· Deferred taxes on leases land
Deferred tax liabilities
240
7 017
188
5 128
162
3 660
Net total
(4 383)
(2 496)
(655)
NOTE 7 - Stocks
in €000s
31/12/2008
31/12/2007
31/12/2006
Cost value
Depreciation
Cost value or Cost value or Cost value or
net realisable net realisable net realisable
value
value
value
Fresh food and groceries
1 218
25
1 193
1218
1412
Frozen foods
10 006
68
9 938
8 422
8 779
Basic products (Toupargel Production)
Frozen food transformed products
1 587
Marketing income
1 182
176
1 587
1 007
679
699
47
1067
567
Total
268
13 725
11 018
11 872
13 993
NOTE 8 – Current receivables and assets due to be sold
8.1 Details of receivables
in €000s
Trade receivables
31/12/2008
2 958
31/12/2007
3 559
301
178
Other ordinary receivables
Debtors
3 970
8 285
4 611
767
683
864
Staff and related accounts
State and relatd accounts
115
1 594
191
5 514
151
1 130
Miscellaneous receivables
198
529
917
1 295
1 368
1 549
7 230
12 022
7 766
Assets due to be sold (1)
Prepaid expenses
Net total
31/12/2006
3 155
(1) Assets due to be sold concern the property assets of Jeuxey, Saint Dié (Place du Marché) and Aubière (Toupargel). As their market value
is estimated to be higher than their book value, the amounts in the balance sheet have been entered at their net book value.
8.2 Details of prepaid expenses
in €000s
Miscellaneous purchases
31/12/2008
271
31/12/2007
294
31/12/2006
301
External services
366
401
326
Other external services
658
657
880
Taxes and duties
1
Financial charges
16
Miscellaneous
41
Total net assets
1 295
1 368
1 549
NOTE 9 - Depreciation of current assets
9.1 As of 31 December 2008
in €000s
For current assets
31/12/2007
Increases
Decreases
31/12/2008
Clients receivables
519
572
513
578
Other current receivables
44
10
34
Total
563
572
523
612
in €000s
For current assets
31/12/2006
Increases
Decreases
31/12/2007
Clients receivables
1 364
327
1 172
519
Other current receivables
2
43
1
44
Total
1 366
370
1 173
563
in €000s
For current assets
31/12/2005
Increases
Decreases
31/12/2006
Clients receivables
1 257
221
114
1 364
Other current receivables
76
74
2
Total
1 333
188
1 366
9.2 As of 31 December 2008
9.3 As of 31 December 2006
221
NOTE 10 - Cash and cash equivalent
The Toupargel Group has invested excess cash positions in short-term money market mutual funds.
10.1 Décomposition
in €000s
31/12/2008
Other investment securities
31/12/2007
31/12/2006
518
Cash position
645
5 309
2 778
Total
645
5 827
2 778
31/12/2008
31/12/2007
31/12/2006
10.2 Inventory
in €000s
Poste monétaire
502
Poste Première Monétaire E
16
money market mutual funds
518
Treasury
Total
518
NOTE 11 - Consolidated shareholders equity
11.1 Composition of company capital
The capital comprises 10,103,282 shares with a nominal value of €0.10
11.2 Reconciliation of company reserves with consolidated reserves
In €000s
Toupargel
Groupe SA
Toupargel
Place
Marché
du Total
Company reserves as of 31/12/2008
40 832
28 286
(2 439)
66 679
4 462
133
4 594
(2 485)
(761)
(4 081)
Restatements of individual accounts
· Cancellation provisions with reserve character
· Deferred taxes
(835)
· Tax credits
70
(70)
· Property lease contracts
2 574
2 394
4 968
· Lease finance contracts
7 415
167
7 581
(109)
(3 001)
(144)
(3 254)
(15 000)
15 000
· Provisions for retirement
Consolidation restatements
· Cancellation of dividends
· Amortisation of purchase price discrepancy relative to buildings
(49)
(49)
· Amortisation of unallocated goodwill
(2 649)
(2 649)
· Cancellation depreciation for consolidated companies
8 697
0
8 697
IFRS restatements
· Cancellation goodwill amortisation
· Cancellation treasury shares
268
268
(5 150)
(5 150)
Permanent restatement of full consolidation
· Reserves prior to acquisition
(13 964)
(712)
(14 676)
18
(21)
769
· Cancellation of mergers
(922)
19
(903)
· Cancellation capital gains on property sales (goodwill)
(143)
· Increase in capital by incorporation
16 976
(5 143)
11 833
· Correction to acquisition cost of consolidated securities
772
(143)
Total restatements
(11 556)
23 499
(4 138)
7 805
Consolidated reserves as of 31/12/2008
29 276
51 785
(6 577)
74 484
Capital of Toupargel Groupe SA
1 010
Shareholders equity as of 31/12/2008
30 286
1 010
51 785
(6 577)
75 494
11.3 Information on stock options
Meeting dates (purchase scheme)
Plan 2003
15th
February
2002
15 May 2003
Date of Board of Directors meeting
28 June 2003
Meeting dates (subsciption scheme)
Total number of shares that could be suscribed or bought of which subscribed or 185 900
bought
- by company Directors
50 000
- by the top 10 salaried entitlements
118 000
Starting date for the exercise of options
28 June 2005
Expiry date
28 June 2009
Subscription or purchase price
Number of shares subscribed as of 31/03/2008
Number of shares subscribed as of 1Q 2008
Number of shares bought as of 31/03/2008
Number of shares bought as of 1Q 2008
Subscription or purchase options for shares cancelled during the financial period
8,75 €
103 282
None
81 418
None
None
Plan 2008
27
April
2007
27
April
2007
25
April
2008
200 000
15 000
112 500
26
April
2010
25
April
2013
25,75 €
None
None
None
None
None
Remaining share options
1 200
Remaining purchase options
None
Subscription or purchase options for shares granted to each company director None
remaining
Stock options exercised during the financial period by each company director
None
None
None
None
Stock options exercised during the financial period by the top 10 salaried entitlements None
None
None
The introduction of the 2008 stock option plan resulted in a charge of €42,000
11.4 Purchase of treasury shares
As of 31 December 2008, the Toupargel Group held 146,000 treasury shares acquired for €4,124,000
for the purpose of allocating them to the stock option scheme approved by the General Meeting of
27 April 2008 and 1,900 shares pertaining to the liquidity contract, valued at €50,000. On June 20,
2008, The Toupargel Group acquired 54,000 own shares at a cost of €18.20, ie €983,000. As of June
31, 2008, the Toupargel Group held 200,000 treasury shares acquired for €5,106,000 for the purpose
of allocation to the stock option scheme approved by the General Meeting of April 27, 2008 and
3,136 shares pertaining to the liquidity contract, valued at €56,000. These amounts have been
registered as a reduction in shareholders equity.
11.5 Allocation of 2008 profit
The Board of Directors proposed to the General Meeting of 28 April 2009 called to approve the
accounts for financial year ending 31 December 2008, the distribution of a dividend of €1.0 per share
(€9,903,000) for financial year 2008.
11.6 Management of shareholders capital
The company is not subject to any specific obligation of a regulatory or contractual nature with
regard to company capital. The Group does not have any specific policy for managing capital. Choices
between external financings and capital increases are determined on a case-by-case basis depending
on circumstances and needs. The company, in monitoring its equity capital, includes the same
elements as those that are included in consolidated equity capital.
NOTE 12 - Provision for benefits following employment (defined benefits
scheme)
Retirement provisions (benefits following employment in the context of defined benefits schemes)
evolved in the following way:
As of 31 December2008
In €000s
Provisions
indemnities
31/12/2007
for
retirement 2 925
Equity effect Increases
(SORIE)
76
353
Decreases
31/12/2008
100
3 254
Equity effect Increases
(SORIE)
(274)
353
Decreases
31/12/2007
440
2 925
Change
in Increases
method
revised IAS
19 (SORIE)
(291)
502
Decreases
31/12/2006
(605)
3 286
As of 31 December2007
In €000s
Provisions
indemnities
31/12/2006
for
retirement 3 286
As of 31 December2006
In €000s
Provisions
indemnities
31/12/2005
for
retirement 3 680
Retirement indemnities of companies in the Toupargel Group are determined by various collective
agreements.
The collective agreement applicable to the Group is the collective agreement governing wholesalers
(brochure JO 3044). The collective agreement concerning sales representatives governed employees
with this status.
12.1 Description of scheme
The Group pays an indemnity when an employee leaves on retirement. The indemnity paid is a
multiple of the monthly end of career salary. The number of months depends on how long the
employee has been in the Group when he takes his retirement, the collective agreement and status
of the employee. Rights are calculated on a straight line basis between the date on which the
services rendered by staff begin to generate rights to benefits pursuant to the scheme (generally
entry date into the Group) and the date on which additional services rendered by staff no longer
generate a significant level of rights to additional benefits pursuant to the scheme (generally leaving
date).
Calculations have been carried out individually and the results aggregated at the company and Group
level. New legislation on the financing of the social security regime prohibiting early retirement by
employers of employees aged less than 65 from 1 January 2010, and subjecting to the payment of a
tax all retirements prior to 65 years of age, has not had any impact on the valuation of provisions, to
the extent that it has been assumed that departures will be at the initiative of employees
12.2 Assumptions
Actuarial valuations are based on a certain number of long-term assumptions supplied by the
company. The rules assumptions are reviewed each year.
Assumptions retained for calculations
Increase in salaries (1)
Future inflation rate
Discount rate
Expected average remaining period of activity
Expected return on assets
Actual return on assets
Social charges rate (depending on category)
Leaving age (depending on category)
2008
3%
2%
5.50%
~7 years
4.5%
6.3%
47.5%
60/65 years
2007
3%
2%
5.25%
~ 8 years
4.5%
4.4%
46.2%
60/65 years
2006
2%
2%
4.50%
5 to 11 years
4.5%
4.5%
44 à 48 %
60/65 years
(1) including assumptions concerning career evolution, promotions, seniority and other factors throughout careers and inflation included
The method used to determine the discount rate has remained unchanged from previous years. The
rates are chosen using data from global data providers such as Reuters and Bloomberg, provided
they comply with the provisions of IAS 19 and the benchmarks of the group. In view of continued
volatility in financial markets, a number of these indicators have proven less reliable to the extent
that they might include bonds of lower quality than those required by IAS 19. The indices considered
of lesser quality have not been selected or have been averaged with other indices.
The expected rate of return on plan assets is determined by reference to information obtained from
financial institutions for similar investments and takes into account the guaranteed element of
performance.
12.3 Changes in the financial situation of defined benefits schemes
A summary table of changes in the financial situation of defined benefits schemes is presented below
:
In €000s
31/12/2008
31/12/2007
31/12/2006
Present value of obligations
(3 825)
(3 620)
(3 844)
Full value of assets in scheme
571
695
558
Balance entered into provisions for retirement
(3 254)
(2 925)
(3 286)
Adjustments based on experience expressed as
a%
-on plan liabilities
-0.47%
-1.49%
-3.88%
-on plan assets
-0.10%
-0.72%
2.10%
Details of changes in the financial situation of defined benefits schemes are as follows :
In €000s
31/12/2008
31/12/2007
31/12/2006
Balance at beginning of financial year
3 620
3 844
4 662
Cost of services rendered during year
197
212
251
Financial cost
187
165
184
(267)
(327)
(459)
Profits or losses on bonds
88
(274)
(794)
Balance at end of year
3 825
3 620
3 844
Balance at beginning of financial year
695
558
485
Expected return on assets in scheme
31
25
22
Contributions paid
100
200
105
Services provided by the fund
(267)
(87)
(50)
Actuarial Profits or losses on assets in the scheme
12
(1)
(4)
Balance at end of year
571
695
558
Present value of obligations
Cost of previous services
Services rendered
Reduction and liquidation
Discounted value of the fair value of assets in scheme
Actual differences and costs and charges in and non-recognized
schemes
Balance at beginning of financial year
(499)
Amortisation of unrecognized actuarial differences during year
499
Amortisation of unrecognized changes in costs
Net non-recognized actuarial differences during financial year
(790)
Non-recognized costs of changes during year
790
Solde non reconnu à la clôture de l'exercice
12.4 Impact of changes in defined benefits schemes on the financial statements
a – Balance sheet
in €000s
31/12/2008
31/12/2007 31/12/2006
Balance from previous year
2 925
3 286
3 680
Opening actuarial situation recorded in shareholders capital 0
(Sorie)
Charges during year
353
0
499
352
502
Services provided net of repayment received from the fund
(240)
(500)
Contributions paid into scheme (increase in assets)
(100)
(200)
(105)
Actuarial situation for financial year (Sorie)
76
(273)
(790)
Balance at end of year
3 254
2 925
3 286
b – Income Statement
in €000s
31/12/2008
31/12/2007
31/12/2006
Cost of services rendered by beneficiaries in activity
197
212
340
Financial cost
187
165
184
Estimated income from assets in sheme
(31)
(25)
(22)
353
352
502
Réductions / liquidation of sheme
Actuarial variances accounted for
Net charge (in operating income)
12.5. Analysis of interest-rate sensitivity
The discount rate and the rate of wage growth are two major assumptions used in assessing defined
benefit plan commitments and may have a significant impact on the amounts assessed.
The table below indicates the impact on the amount of the commitment of a variation (upwards or
downwards) of half a point in the discount rate and the expected increase in salaries.
€000s
Sensitivity to discount rate
Present value of commitment - discount rate 6.00%
Present value of commitment - discount rate 5.5% (rate used in
2008)
Present value of commitment - discount rate 5.00%
Sensitivity to the rate of salary increases
Present value of commitment - rate of increase 3.50%
Present value of commitment - rate of increase 3% (rate used in
2008)
Present value of commitment - rate of increase 2.50%
3 655
3 826
4 008
4 021
3 826
3 641
12.6. Assets available to cover commitments
Assets are placed in a life insurance policy of the insurance company ARIAL, denominated in euros,
offering a guaranteed minimum return. The Group is unable to determine the amount of payments
which will be made to the fund in 2009; a decision will be taken during the course of the year.
12.7. Amount of contributions charged in 2008 and 2007 for defined contribution plans.
The amount of employer payroll taxes paid by the Group in 2008 for defined contribution pension
plans was €4,871,000 compared to €4,733,000 in 2007.
NOTE 13 - Other non-current liabilities
13.1 Summary
in €000s
31/12/2008
31/12/2007
31/12/2006
Provisions
3 980
2 968
3 247
Subsidies
1 967
2 096
1 848
Total
5 947
5 064
5 095
13.2 Detail of provisions
As of 31 December 2008
in €000s
Amount as of Increases
31/12/2007
Writeback
(provisions
used)
Writebacks
(provisions
not used)
Amount as of
31/12/2008
Labour Court litigation
1 558
820
257
823
1 299
Litigation in others courts
27
365
27
365
Seniority awards
1 101
204
155
1 150
Miscellaneous risks
282
148
270
160
Tax and duties
1 007
Total
1 007
2 968
2 544
681
850
3 980
Amount as of
Increases
Writebacks
(provisions
used)
Writebacks
(provisions
not used)
Amount as of
31/12/2007
As of 31 December 2007
in €000s
31/12/2006
Labour Court litigation
1 461
1 049
339
613
1 558
Litigations in others courts
65
27
15
50
27
Seniority awards
1 244
6
149
Miscellaneous risks
477
176
348
23
282
3 247
1 258
851
686
2 968
Total
1 101
As of 31 December 2006
in €000s
Amounts as Increases
of
31/12/2005
Writeback
(provisions
used)
Writebacks
(provisions
not used)
Labour Court litigation
1 051
1 199
436
353
1 461
Litigation in others courts
133
15
32
51
65
Seniority awards
913
439
108
Miscellaneous risks
697
319
414
Provision for taxes
202
Total
5 611
Reclassification
Amount as of
31/12/2006
1 244
125
477
(202)
1 972
990
529
(202)
3 247
13.3 Comments
Labour Court litigation
Group companies are involved in various individual Labour Court litigations. As described in note
2.14, each litigation is subject to an evaluation of risk and a provision is accounted for in
consequence. Provisions are revised as the cases advance and an evaluation of real risks run made at
closing. On the date of writing this appendix, no significant element exists which would call into
question the provisions accounted for.
Seniority awards
Lease commitments have been provisioned in the individual accounts of each Group company
Miscellaneous risks
These are mainly provisions relating to the restructuring of the sales network.
Provisions for taxes
Tax inspections:
Place du Marché SAS: a tax inspection regarding property taxes payable and the St Marcel platform
began in 2008 and resulted in a €169,000 contested adjustment which has been provisioned in the
accounts.
Toupargel SAS: a tax inspection for the years 2005 to 2008 was in progress as of December 31, 2008.
Tax adjustments have already been made for property taxes and business taxes for three of the four
order preparation platforms. These adjustments, contested, amounting to €839,000, have been
provisioned in the accounts.
Meat tax - appeal underway : together with many other food distribution companies, Group
companies began proceedings to request the restitution of meat taxes and supplementary taxes paid
from 2001 to 2003. Their possible restitution (€4,672,000) by the Administration has not been
provisioned in the accounts.
Deferred tax liability : Future tax charges concerning regulated provisions and capital gains awaiting
taxation on depreciable items and land give rise to the establishment of provisions for taxation.
Litigation : Summary of demands and provisions as of 31 December 2008
in €000s
Number
files
Provision
of Demands from adverses parties
County
Court
Appeal
Court
2 786
Labour Court litigation
52
2 805
Commercial litigation
2
524
Meat tax
2
Higher
Appeal
Court
Total
5 591
1 299
524
365
Toupargel
Group
demands
(not
provisioned)
435
4 672
Other
Total
56
3 329
2 786
0
6 115
1 664
5 107
NOTE 14 - Net Financial debt
14.1 Net financial indebtedness as of 31 December 2008
Amount as Increases
of
31/12/2007
to 16 806
5 955
Indebtedness
related
retr.Lease finance
Lines of credit
Borrowings
from
institutions
Investment securities
Cash
18 000
credit 34 806
5 955
Repayments Amount as <1 year
of
31/12/2008
7 740
15 021
5 971
8 000
10 000
10 000
15 740
25 021
15 971
518
5 309
0
645
Cash and cash equivalents
5 827
645
Net indebtedness
28 979
24 377
Out of total borrowings of €25,021,000, €16,711,000 are indexed on Euribor.
From 1 >5 years
to
5
years
7 907
1 143
7 907
1 143
14.2 Net financial indebtedness as of 31 December 2007
Amount as Increases
of
31/12/2006
to 18 742
5 948
Indebtedness
related
retr.Lease finance
Lines of credit
Borrowings
from
institutions
Investment securities
Cash
Repayments Amount as <1 year
of
31/12/2007
7 884
16 806
6 133
18 000
credit 18 742
23 948
7 884
From 1 >5 years
to
5
years
8 637
2 036
18 000
10 000
8 000
34 806
16 133
16 637
2 778
518
5 309
Cash and cash equivalents
2 778
5 827
Net indebtedness
15 964
28 979
2 036
14.2 Net financial indebtedness as of 31 December 2006
Accrued interest
Borrowings Place du Marché
Lines of credit
Indebtedness
related
to
retr.Lease finance
Borrowings
from
credit
institutions
Amount as Increases
of
31/12/2005
Repayments Amount as <1 year
of
31/12/2006
From 1 >5 years
to
5
years
205
20 000
17 135
10 052
205
20 000
8 445
18 742
6 245
8 970
3 527
37 340
10 052
28 650
18 742
6 245
8 970
3 527
18 742
6 245
8 970
3 527
Investment securities
15
Cash
37 355
Cash and cash equivalents
Net indebtedness
11 972
3 202
2 778
from
credit 15 174
2 778
Investment securities
22 181
Borrowings
institutions
15
10 052
28 665
15 964
The Group has several medium-term lines of credit in a total usable amounts of €50,000,000 as of 31
December 2008 :
• A credit facility has been provided to Toupargel Groupe SA by a bank pool in an amount of €50
million, from 29 October 2004 to 31 December 2009, repayable each half-year from 30 June 2005 in
tranches of €5 million. The applicable interest rate is Euribor at the time of drawdown plus a variable
margin based on a consolidated leverage ratio.
This ratio (R) corresponds to consolidated net financial indebtedness divided by gross operating
profit, according to the following table :
Ratio
Spread
R > à 1.50
1.40 % per year
1.30 < R <= 1.50
1.20 % per year
1.10 < R <= 1.30
1.00 % per year
0.9 < R <= 1.10
0.85 % per year
0.8 < R <= 0.9
0.65 % per year
R <= 0.8
0.55 % per year
Net consolidated financial indebtedness comprises the amount (excluding accrued interest) of short
medium and long-term borrowings contracted with financial institutions plus the capital share of
property lease commitments, and equipment lease commitments and lease financings with purchase
options, less consolidated cash and investment securities. Consolidated gross operating profit is
defined as consolidated operating profit (French standards), plus transfers to and less writebacks of
amortisation and/or provisions of an operating nature (excluding employee profit-sharing) and after
accounting for other income and charges. The variable margin is revised twice a year on the 31
March and 30 September. The loan facility is subject to an availability fee of 0.20%.
Covenants :
The credit facility is subject to respect of the following financial ratios, calculated half yearly on 30
June and 31 December :
ratio :
Consolidated net financial indebtedness
Consolidated net assets
ratio :
Consolidated net financial indebtedness
Consolidated gross operating profit (1)
< 1.0
< 2.5
(1) consolidated gross operating profit: consolidated gross operating profit (French standards), plus transfers to
and less writebacks of amortisation and/or provisions of an operating nature (excluding employee profitsharing) and after accounting for other income and charges.
The definitions of consolidated financial indebtedness and consolidated gross operating profit are
detailed above. Consolidated net assets are equivalent to shareholders capital plus merger and
acquisition issue premium plus reserves plus or minus net profit/loss for the financial year plus a
credit balance carried forward and minus debit balance carried forward.
Toupargel Groupe SA has the option to cancel all or a part of the facility in tranches of €5 million.
The covenants were respected in 2006, 2008 and 2008.
•
A credit facility has been provided by a bank pool to Toupargel SAS in an amount of €10
million from 1 August 2008 for an indeterminate period. Depending on the use of the facility, the
applicable interest rate is based on Euribor for the period of drawdown plus an 0.30% margin. This
credit facility is not subject to financial ratios.
•
A credit facility was put in place by a bank pool for Toupargel Group SA and Toupargel SAS in
an amount of €30 million (with an option to increase the facility to €50 million) from September 30,
2008 to September 30, 2013, repayable each half-year from March 31, 2009 in tranches of €3 million.
On February 20, 2009, the increase option was used by an additional bank in an amount of €10
million bringing the total credit facility to €40 million, repayable half yearly from March 31, 2009 in
tranches of €4 million.
The applicable interest rate is Euribor at the time of drawdown plus a variable margin based on a
consolidated leverage ratio. This ratio (R) corresponds to consolidated net financial indebtedness
divided by gross operating profit, according to the following table :
Ratio
1.90 <= R
0.9 <= R < 1.90
0.5 < R < 0.9
R <= 0.5
Spread
0.85 % per year
0.75 % per year
0.65 % per year
0.60 % per year
The margin is 0.65% per year from September 30, 2008.
It will be revised on March 31, 2009 on the basis of the above conditions. Net consolidated financial
indebtedness comprises the amount (excluding accrued interest) of short medium and long-term
borrowings contracted with financial institutions plus the capital share of property lease
commitments, and equipment lease commitments and lease financings with purchase options, less
consolidated cash and investment securities. Consolidated gross operating profit is defined as
consolidated operating profit (French standards), plus transfers to and less writebacks of
amortisation and/or provisions of an operating nature (excluding employee profit-sharing) and after
accounting for other income and charges.
The variable margin is revised twice a year on the 31 March and 30 September. The loan facility is
subject to an availability fee of 0.20%
Covenants :
The credit facility is subject to respect of the following financial ratios, calculated half yearly on 30
June and 31 December:
ratio :
Consolidated net financial indebtedness
< à 1.0
Consolidated net assets
ratio :
Consolidated net financial indebtedness
Consolidated gross operating profit
< à 2.5
The definitions of consolidated financial indebtedness and consolidated gross operating profit are
detailed above. Consolidated net assets are equivalent to shareholders capital plus merger and
acquisition issue premium plus reserves plus or minus net profit/loss for the financial year plus a
credit balance carried forward and minus debit balance carried forward.
Toupargel Groupe SA can cancel some or all of the facility in advance in tranches of €10 million and
thereafter by tranches of €5 million.
Available amounts at the end of each financial year were as follows:
In €000s
31/12/2008
50 000
31/12/2009
42 000
31/12/2010
34 000
31/12/2011
26 000
31/12/2012
18 000
31/12/2013
10 000
As of 31 December 2008, €10, 000,000 have been made.
14.4 Indebtedness related to restatement of lease finance contracts
As of 31 December 2008
in €000s
31/12/2007
Increases
Repayments
31/12/2008
Property leases
Equipment leases
Total
8 571
8 235
16 806
5 955
5 955
1 593
6 147
7 740
6 978
8 043
15 021
The reduction in lease finance liabilities concerns vehicles (Toupargel). Of the €6,978,000 of
equipment leases remaining due as of 31 December 2008, €6,711,000 are indexed on Euribor.
As of 31 December 2007
in €000s
Property leases
31/12/2006
10 698
Increases
Repayments
2 127
31/12/2007
8 571
Equipment leases
8 044
5 948
5 757
8 235
Total
18 742
5 948
7 884
16 806
in €000s
Property leases
31/12/2005
8 269
Increases
5 004
Repayments
2 575
31/12/2006
10 698
Equipment leases
8 866
5 049
5 871
8 044
Total
17 135
10 053
8 446
18 742
As of 31 December 2006
14.5 Miscellaneous financial indebtedness
As of 31 December 2008
en K€
31/12/2008
Increases
Repayments
Deposits and guarantees received 0
31/12/2008
0
As of 31 December 2007
en K€
31/12/2006
Increases
Repayments
Deposits and guarantees received 0
31/12/200
8
0
As of 31 December 2006
en K€
31/12/2005
Deposits and guarantees received 15
Increases
Repayments
15
31/12/2006
14.6 Average cost of debt
The average cost of debt (before tax) was 4.9% in financial year 2008.
2008 (1)
2008 2006
Average cost of debt 4.9 %
4.5 % 3.6 %
In 2008, the average cost of debt was determined on the basis of average annual outstandings
excluding leases (cash position less drawdowns on lines of credit), average annual property and
equipment lease outstandings, net financial cost (restated for net income on investment securities)
and by weighting the gross financial cost of each type of indebtedness Using this method, the
average cost of debt amounted to 4.9% in 2008 and 4.6% in 2007.
In €000s
Lines of credit
Property leases
Toupargel
Place du Marché
Gross financial cost (on variable rate debt)
Equipment leases
Toupargel
Place du Marché
Gross financial cost (on fixed rate debt)
Gross financial cost
22 143
Average
Gross
Cost of debt cost
of
financial cost
debt
1 044
4.7 %
2.8 %
5 767
1 997
309
130
Average
annual debt
5.4 %
6.5 %
0.8 %
0.3 %
4.5 %
6.9 %
0.9 %
0.0 %
1 483
7 685
120
342
8
351
1 834
4.9 %
NOTE 15 – Details of current debt
in €000s
Trade payables
31/12/2008
29 321
31/12/2007
29 853
31/12/2006
36 758
Employees
11 790
11 875
13 153
Social security and social organisation
13 617
13 130
11 416
State and municipal authorities
2 082
1 227
3 501
Debt for fixed assets
354
419
793
Other debt
120
18
16
Current debt
1 077
1 868
2 260
Other debt
29 040
28 537
31 139
Short-term financial debt
15 971
16 133
6 245
Total
74 332
74 523
74 141
Note 16 – Financial instruments
16.1 Financial assets
in €000s
31/12/2008
Marketable
shares
Loans
and Financial assets Financial assets Balance
receivables
at fair value by at fair value by total
earnings
on earnings
options
sheet
Non current derivative
Other non-current financial
assets
Clients receivables and other
debtors
Current derivative instruments
Other current financial assets
233
233
4 064
4 064
Cash and cash equivalent
Total
645
645
645
4 942
0
4 297
Marketable
shares
Loans
and Financial assets Financial assets Balance
receivables
at fair value by at fair value by total
earnings
on earnings
options
in €000s
31/12/2007
sheet
Non current derivative
Other non-current financial
assets
Clients receivables and other
debtors
Current derivative instruments
Other current financial assets
213
213
5 004
5004
Cash and cash equivalent
Total
5 217
in €000s
5 827
5 827
5 827
11 044
31/12/2006
Marketable
shares
Loans
and Financial assets Financial assets Balance
receivables
at fair value by at fair value by total
earnings
on earnings
options
Non current derivative
Other non-current financial
assets
Clients receivables and other
debtors
Current derivative instruments
Other current financial assets
220
220
5 305
5 305
Cash and cash equivalent
Total
5 525
2 778
2 778
2 778
8 303
sheet
a - Marketable shares
No marketable shares were held by the Group as of 31 December 2008, 2008 and 2006.
b - Loans and receivables at depreciated cost
In €000s
31/12/2008
Gross Depreciation Net
Loans
and 140
receivables
at
depreciated cost
Client receivables 4 395
and other debtor
Total
4 535
31/12/2007
Gross Depreciation Net
31/12/2006
Gross Depreciation Net
140
233
233
368
613
3 831
5 336
564
4 772
6 303
1 366
4 937
613
3 971
5 569
564
5 005
6 671
1 366
5 305
368
Details of these items are provided in note 8.
Income and expenses on loans and receivables recorded in income are as follows:
In €000s
Net profit
In €000s
Net profit
In €000s
Net profit
31 décembre 2008
Interest
Subsequent valuation
Depreciation
354
31 décembre 2007
Interest
Subsequent valuation
Depreciation
302
31 décembre 2006
Interest
Subsequent valuation
Depreciation
(220)
c - Financial assets at fair value by earnings
Derivative instruments designed to hedge debt would put in place in the framework of the Groups
risk management policy and have been analysed in note 16.2.b and 17.1.
d - Cash and cash equivalent
Financial risk management policy is presented in note 17.
As of 31 December 2008, no cash investment was held. As of 31 December 2008, cash investments
amounted to €518,000. No cash investment was held as of 31 December 2006.
Cash surpluses are invested in money market mutual funds. In 2006, 2008 and 2008, the Group
invested its surpluses in risk-free short-term money market mutual funds. In 2008, the sub prime
financial crisis therefore had no direct impact on the Group’s cash investments.
Changes in the cash and cash equivalent position is provided in note 10.
Remuneration on cash investments is presented in note 24.
e - Fair value of financial assets
As the maturity of customer receivables is less than 6 months, the face value of financial assets has
been considered as equal to their fair value.
31 December 2008 (fair value)
In €000s
Quoted
price
Non current derivative
instruments
Other
non-current
financial assets
Client receivables and
others debtors
Current
derivative
instruments
Other current financial
assets
Cash and cash equivalent
0
Total
0
Models with Models with Total
observable
unobservable
data
data
Quoted
price
Non current derivative
instruments
Other non-current financial
assets
Client receivables and
others debtors
Current
derivative
instruments
Other current financial
assets
Cash and cash equivalent
518
Total
518
Balance sheet
value
Total
233
233
233
4 064
4 064
4 064
645
4 942
645
4 942
645
4 942
Fair value
Balance sheet
value
Total
31 December 2007 (fair value )
In €000s
Fair value
Models with Models with Total
observable
unobservable
data
data
213
213
213
5 004
5 004
5 004
5 309
10 526
5 827
11 044
5 827
11 044
31 December 2006 (fair value )
In €000s
Non current derivative
instruments
Other non-current financial
assets
Client receivables and
others debtors
Current
derivative
instruments
Other current financial
assets
Cash and cash equivalent
Total
Quoted
price
Fair value
Balance sheet
value
Total
Models with Models with Total
observable
unobservable
data
data
220
220
220
5 305
5 305
5 305
2 778
8 303
2 778
8 303
2 778
8 303
16.2 Financial liabilities
The various categories of financial liabilities as of 31 December 2008 as follows:
31/12/2008
31/12/2007
in €000s
Current Non current Total
Total
Financial indebtedness
15 971
9 050
25 021
34 806
Derivative
financial
instruments
Trade and other payables
29 795
29 795
30 289
Other financial liabilities
a - Financial indebtedness
Financial debt is analysed in note 14.
31/12/2008
in €000s
Current Non current
Drawdowns
on
credit 10 000
facilities
Lease finance borrowings
5 971
9 050
Other borrowings
Total borrowings
15 971
9 050
Bank overdrafts and current
accounts
Total financial indebtedness 15 971
9 050
31/12/2006
Total
18 742
47
37 566
Total
10 000
31/12/2007
Total
18 000
31/12/2006
Total
15 021
16 806
18 742
25 021
34 806
18 742
25 021
34 806
18 742
Profits and losses on financial debt, mainly comprising interest, are presented in note 24.
b - Derivative financial instruments
Derivative financial instruments included as liabilities and valued at their fair value can be analysed
as follows:
In €000s
Derivative financial
instruments on debt
Total
31/12/2008
Current
Non current
31/12/2007
31/12/2006
Total
47
47
Derivative instruments put in place in the framework of the Group’s risk management policy have
been analysed in note 17. Interest income on financial instruments which has not been revalued at
fair value based on income amounts to:
In €00s
31/12/2008
31/12/2007
31/12/2006
Impact of financial instruments on
(5)
(89)
earnings
c - Trade and other payables
In €000s
Trade and other debt
Advances and downpayments received
Debt for fixed assets
Trade and other payables
31/12/2008
29 441
31/12/2007
29 870
31/12/2006
36 773
354
29 795
419
30 289
793
37 566
d - Fair value of financial liabilities
31/12/2008
In €000s
Derivative
financial
instruments
Trade and other payables
Drawndowns
on
credit
facilities
Lease finance borrowings
- Fixed rate
- Floating rate
Other bank borrowings
Total financial indebtedness
Quoted
price
Fair value
Models with Models with Total
observable
unobservale
parameters
parameters
29 441
10 000
7 296
6 712
14 008
39 441
Balance sheet
outstandings
Total
29 441
10 000
29 441
10 000
7 296
6 712
8 309
6 712
53 449
54 462
31/12/2007
In €000s
Quoted
price
Derivative
financial
instruments
Trade and other payables
Drawndowns
on
credit
facilities
Lease finance borrowings
- Fixed rate
- Floating rate
Fair value
Models
with Models with Total
observable
unobservale
parameters
parameters
29 870
18 000
6 770
8 237
Other bank borrowings
Total financial indebtedness
15 007
47 870
Balance sheet
outstandings
Total
29 870
18 000
29 870
18 000
6 770
8 237
8 569
8 237
62 877
64 676
As the maturity of customer receivables is less than 6 months, the face value of financial assets has
been considered as equal to their fair value.
31/12/2006
In €000s
Derivative
financial
instruments
Trade and other payables
Drawndowns on credit
facilities
Lease finance borrowings
- Fixed rate
- Floating rate
Other bank borrowings
Total financial indebtedness
Quoted
price
Fair value
Models with Models
with Total
observable
unobservale
parameters
parameters
47
47
37 566
NA
10 280
NA
37 566
Balance sheet
outstandings
Total
47
37 566
37 566
NA
10 280
8 461
10 280
NA
54 554
NA: Not Available.
Note 17 – Management of risks on financial instruments
Management of credit, liquidity and market risks are centralised and monitored by the Finance
Department. Depending on how Group exposure evolves, decisions may be made to minimise such
risks.
17.1 Credit risk
In the context of its cash management activities, the Group is exposed to credit risk. Market
transactions are effected within the limits of the authorisations determined by the Finance
Department for each counterparty. For the Group, the counterparties with regard to financial
instruments are:
for trade receivables, debtors (mainly comprising commercial cooperation receivables with
suppliers) for which the Group has as liabilities commercial indebtedness of at least an equivalent
amount,
for cash and cash equivalents, first-rate banks with excellent ratings from rating agencies.
As of 31 December 2008, the Group had no investment securities.
Receivables in difficulty but not depreciated:
31 December 2008
In €000s
Assets in difficulty on the closing day
Depreciated Assets
Total
assets
neither
depreciated
nor
in
difficulty
0-3
3-6
6-12
More
Total
Total
Total
months months months than 1
year
Loans and receivables at
140
140
depreciated cost
Receivables and other 3 923
3 923
613
4 536
debtors
Total
3 923
3 923
613
140
4 676
In €000s
31 December 2007
Assets in difficulty on the closing day
Depreciat
ed assets
0-3
months
Loans and receivables at
depreciated cost
Receivables
and
other 4 771
debtors
Total
4 771
3-6
months
6-12
months
More
Total
than 1
year
Total
Assets
Total
neither
depreciat
ed nor in
difficulty
Total
233
4 771
564
4 771
564
233
5 335
233
5 568
31 December 2006
In €000s
Assets in difficulty on the closing day
0-3
months
3-6
months
6-12
months
More
than 1 Total
year
Loans and receivables at
depreciated cost
Receivables
and
other
4 936
debtors
Total
4 936
Depreciat
ed assets
Assets
neither
depreciate Total
d nor in
difficulty
Total
Total
368
4 936
1 366
4 936
1 366
368
6 302
368
6 670
17.2 Liquidity risk
Toupargel Group disposes of short and medium-term credit lines (see note 14) with first-rate banks
enabling it to ensure adequate flexibility in its financing sources. Based on an in-house analytical tool,
the Finance Department is responsible for maintaining sufficient liquidity at all times, by managing
Group cash and obtaining financings with appropriate terms and conditions and maturities.
As of 31 December 2008, credit lines had been mobilised in an amount of €10 million.
As of 31 December 2008, non-discounted principal and interest payments on outstanding financial
liabilities by maturity date were as follows:
As of 31 December 2008
2009
2010
2011
2012
2013
> 5 years Total
Total
balance
sheet
value
875
680
485
290
10 290
47 690
10 000
4 773
1 714
2 713
1 482
1 000
1 228
235
1 073
0
938
0
2 892
8 720
9 326
8 309
6 711
41 556
5 070
2 907
1 793
1 228 13 182
65 736
25 021
in €000s
Derivative
financial
instruments
Trade and other payables
Drawndowns
on
credit
facilities
35 070
Lease finance borrowings
- Fixed rate
- Floating rate
Other borrowings
Other debt
Other financial liabilities
Total
As of 31 December 2008
2008
2009
2010
2011
2012
> 5 ans
Total
Total
balance
sheet
value
459
459
459
459
10 459
21 140
18 000
4 787
1 923
2 586
1 701
1 111
1 613
225
1 224
2
1 088
2 099
8 711
9 648
8 569
8 237
15
556
4 746
3 183
1 908
1
549
12 558
39 499
34 806
in €000s
Derivative
financial
instruments
Trade and other payables
Drawndowns
on
credit
facilities
8 846
Lease finance borrowings
- Fixed rate
- Floating rate
Other borrowings
Other debt
Other financial liabilities
Total
As of 31 December 2006, information was unavailable.
17.3 Market risks
a - Currency risk
In view of the very limited number of transactions carried out in currencies other than the euro,
currency risk can be considered negligible.
b - Equity market risk
No cash has been invested in equities. Available cash holdings have been invested in non-speculative
investments (money market SICAVs) that can be mobilised at short notice.
Toupargel Group exposure to market risk concerns Treasury shares held in the context of stock
option plans and the liquidity contract. As of December 31, 2008, the Group held 203,136 Treasury
shares.
c - Interest-rate risk
The policy of the Toupargel Group in managing interest rate risk meets the three objectives of
security, liquidity and profitability. The management of interest rate risk has been centralised and is
monitored and controlled periodically by the Finance Department.
Consolidated debt of Toupargel Group SA is for the most part indexed on the variable interest-rate
Euribor. In its financial management, Toupargel SA utilises, based on an analysis of exposure to
interest-rate risks, a range of financial instruments designed to reduce such exposure and optimise
financing costs.
As of 31 December 2005, Toupargel had entered into the following hedging transactions:
- • Swap Euribor 6 M Post / Euribor 6 M
- Start: 30 June 2003, Maturity: 31 March 2010
Amortisation structure: see schedule below
Beginning of period
30 June 2003
30 September 2003
31 March 2004
30 September 2004
31 March 2005
30 September 2005
31 March 2006
29 September 2006
30 March 2007
28 September 2007
31 March 2008
30 September 2008
31 March 2009
30 September 2009
End of period
30 September 2003
31 March 2004
30 September 2004
31 March 2005
30 September 2005
31 March 2006
29 September 2006
30 March 2007
28 September 2007
31 March 2008
30 September 2008
31 March 2009
30 September 2009
31 March 2010
Nominal value
35 500 000
34 250 000
33 000 000
30 875 000
28 750 000
26 375 000
24 000 000
21 750 000
19 500 000
17 000 000
14 500 000
11 750 000
9 000 000
9 000 000
- Toupargel SA pays Euribor 6M Post (base act/360)
- Toupargel SA receives Euribor 6M (base act/360)
Payments are made on the 31 March and 30 September
- No premium channel
Start: 30 June 2003, Maturity: 31 March 2010
Amortisation structure: see schedule below
No premium channel against Euribor 6M Post (base act/360) with a gap between cap and floor
strikes of 2.20%. (Floor at 2.05% and cap at 4.25%)
These two financial instruments were restructured on 12 May 2006.
The element after 30 March 2007 was cancelled from a payment received from Toupargel SA of
€66,500. The restructured transaction resulted in a payment of €5,000 on 30 March 2007.
Details of commitments with an interest-rate risk
In €000s
2009
2010
2011
2012
2013
Interest-rate
Hedged
Lines of credit
42,000 (usables)
34,000 (usables )
26,000 (usables)
18,000 (usables)
10,000 (usables)
Euribor
no
Property leases
5,191
3,959
2,919
1,982
910
Euribor
no
Analysis of gross indebtedness by nature of interest rate
As of 31 December 2008, the net debt of the Group was indexed for 67% on floating interest rates
and 33% on fixed rates (mainly lease finance transactions for transport equipment).
Gross debt (floating rate)
Gross debt (fixed rate)
31/12/2008
67 %
33 %
31/12/2007
75 %
25 %
31/12/2006
55 %
45 %
Financial instruments exposed to interest-rate risk
The impact on financial assets and liabilities of interest rate risk hedging derivatives is as follows:
Gross debt
31/12/2008
After
hedging
Before
hedging
16 711
16 711
26 237
31/12/2007
Financial
After
instruments hedging
impact
26 237
8 309
8 309
8 569
8 569
8 461
25 020
25 020
34 806
34 806
18 741
In €000s
Before
hedging
Floating rate
(1)
Fixed rate
(2)
Total
Financial
instruments
impact
31/12/2006
Before
Financial
After
hedging instrument hedging
s impact
10 280
(10 280)
8 461
(10 280)
8 461
Reconciliation of Net debt with gross debt
In €000s
Floating rate (1)
Fixed rate (2)
Dette nette
25 020
644
24 376
31/12/2007
Before Financial
After
hedging instrumen hedging
ts impact
34 806
34 806
5 827
5 827
28 979
28 979
31/12/2006
Before
Financial
After
hedging instrument hedging
s impact
18 741
(10 280)
8 461
2 778
2 778
15 963
(7 502)
8 461
31/12/2008
Before
Financial
After
hedging instrument
hedging
s impact
16 067
16 067
8 309
8 309
24 376
24 376
31/12/2007
Before Financial
After
hedging instrumen hedging
ts impact
20 410
20 410
8 569
8 569
28 979
28 979
31/12/2006
Before
Financial
After
hedging instrument
hedging
s impact
7 502
(7 502)
8 461
8 461
15 963
(7 502)
8 461
Before
Financial
hedging instrument
s impact
25 020
644
24 376
31/12/2008
After
hedging
Net debt
In €000s
Floating rate (1)
Fixed rate (2)
Total
(1) : floating rate debt is exposed to the risk of fluctuations in cash position
(2) : fixed rate debt is exposed to the risk of changes in the fair value of the debt
Loans and receivables at depreciated cost
Loans and receivables have maturities of less than 6 months Consequently, the interest-rate risk
attached to these assets is limited.
Interest-rate hedging derivatives
Derivatives held for interest-rate hedging risk are presented below:
Interest-rate derivatives
31/12/2008
31/12/2006
31/12/2005
In €000s
Total market value Total market value Total market value
Fair value hedging
Cash
flow
hedging
instruments
Other hedging derivatives
47
89
Total
47
89
d - Analysis of duration: interest-rate hedging
Duration analysis is carried out on the basis of the situation of net financial floating rate
indebtedness on the closing date. No financial instrument had been employed on that date. For
interest-rate risk, duration corresponds to a variation in the yield curve of +1% and -1% compared to
the interest rate in force on the closing date.
As of 31 December 2008, the impact of a 1% increase in interest rates on all types of debt would
increase the financial cost for the Group by €167,000 (€262,000 in 2007). The negative impact on net
profit, taking into account actual tax rates, was €109,000 (€171,000 in 2007).
As of 31 December 2008, the impact of a 1% decrease in interest rates on all types of debt would
decrease the financial cost for the Group by €167,000 (€262,000 in 2007). The positive impact on net
profit, taking into account actual tax rates, was €109,000 (€171,000 in 2007).
Notes to the income statement
NOTE 18 – Sales
18.1 Analysis of sales by business sector
31/12/2008
31/12/2007
31/12/2006
€000s
Split
€000s
Split
€000s
Split
Distance sales
346 509
94.7%
346 077
95.2%
363 869
95.9%
Miscellaneous (1)
739
0.2%
748
0.2%
765
0.2%
Subtotal
347 248
Frozen foods business
346 825
364 634
Fresh food and groceries
Distance sales
18 659
5.1%
16 715
4.6%
14 891
3.9%
Total
365 907
100.0%
363 540
100.0%
379 525
100.0%
18.2 Toupargel Production
Toupargel sales of processed foods (meat) amounted to €3,257,000 compared to €4,132,000 in 2007,
corresponding purchases amounted to €2,867,000 compared to €3,043,000 in 2007. Stocks as of 31
December 2008 of finished products amounted to €1,478,000 compared to €679,000 as of 31
December 2007.
NOTE 19 – Personnel costs
19.1 Détail
in €000s
31/12/2008
31/12/2007
31/12/2006
Salaries
80 835
80 240
78 294
Stock-options
84
Social charges
27 085
27 598
24 908
Profit sharing
3 496
3 622
4 880
Other personnel costs
280
321
304
Total
111 781
111 781
108 386
19.2 Staff
Average
annual 31/12/2008
staff levels in
full-time
Toupargel
equivalent
Groupe SA
Executives
Supervisors
Reps
EmployeesWorkmen
8
1
Total
9
of which seconded
staff
2007
2006
Toupargel
Place
du Group total
Marché
Group total
Group total
166
250
64
2 887
5
25
194
237
184
203
184
651
228
179
276
64
3 115
3 367
39
258
5
3 634
44
3 013
3 628
43
2 706
3 744
82
NOTE 20 – External charges
in €000s
31/12/2008
31/12/2007
31/12/2006
Electricity
1 962
1 879
1 948
Fuel and lubricants
8 739
8 046
8 339
Other materials and supplies not stocked
974
1 381
1 865
Packaging
2 818
2 913
2 824
Subcontracting
2 204
1 490
1 478
Leases
2 887
3 733
4 458
Maintenance and repairs
5 751
6 478
5 948
Insurance
750
965
978
Studies, documentation
441
565
503
Fees
1 201
1 478
1 429
Temporary workers
1 522
1 322
3 622
Catalogues, routing and similar
9 262
8 989
8 295
Sponsoring and patronage
318
458
421
Transport and travel
6 308
6 426
8 018
Telecommunications
2 433
2 463
2 363
Postage
253
298
240
Bank services
1 090
1 023
1 045
Miscellaneous
586
544
536
Total
49 498
50 451
54 310
NOTE 21 – Taxes and duties
in €000s
31/12/2008
31/12/2007
31/12/2006
IFA
74
57
85
Professional tax
2 684
2 582
2 869
Property tax
324
297
262
Staff related taxes and charges
3 293
3 251
2 285
Vehicle related taxes and charges
356
288
453
Organic
574
607
634
Eco Taxes on seafood
735
Other taxes and duties
45
21
9
Total
8 084
7 103
6 597
NOTE 22 - Provision
in €000s
31/12/2008
31/12/2007
31/12/2006
Transfers
Writebacks
Net
Depreciation
572
523
(49)
803
(33)
Trade payables
572
523
(49)
845
(107)
(42)
74
- Miscellaneous debtors
Provisions
2 545
1 531
(1 013)
279
(444)
- Labour Court litigation
820
1 080
259
(97)
(409)
- Litigation in other courts
365
27
(338)
38
66
- Seniority awards
204
155
(49)
143
(330)
- Miscellaneous risks
148
270
122
195
229
- Provisions for taxes
1 007
(1 007)
253
(253)
87
102
(1 316)
1 169
(375)
Retirement
Total
3 370
2 054
NOTE 23 – Other income / other charges
in €000s
31/12/2008
Royalties
31/12/2007
31/12/2006
(4)
(17)
Board fees
(32)
(21)
(21)
Losses on receivables
(305)
(1 106)
(186)
Tax fines
(2)
(8)
(5)
(119)
(289)
PSE
Miscellaneous expenses
(178)
(140)
(317)
Other charges
(517)
(1 398)
(835)
Penalties received on purchases
132
15
27
Revenues from depreciated receivables
6
5
3
Repayments of VAT for motorway tolls
225
Share of depreciated subsidy
28
28
28
Miscellaneous incomes
37
51
355
Other income
204
324
413
Total
(313)
(1 074)
(422)
NOTE 24 – Net financial cost
in €000s
31/12/2008
31/12/2007
31/12/2006
Net income from investment securities
39
82
351
Discounts obtained
361
293
178
Other financial income
8
53
120
Financial income
408
428
649
Interest on debt
(1 873)
(1 803)
(1 637)
Gross financial cost
(1 873)
(1 803)
(1 637)
Net financial cost
(1 466)
(1 375)
(988)
NOTE 25– Corporate tax
25.1 Analysis of tax charge
in €000s
31/12/2008
31/12/2007
31/12/2006
Taxes dues
(5 949)
(7 659)
(10 881)
Deferred taxes
(1 924)
(1 738)
(1 913)
Net taxes
(7 873)
(9 397)
(12 794)
(245)
(329)
(55)
(62)
Tax reminders
Impact of tax contributions (permanent of 3% and
temporary of 3.30%)
Taxes payables
(169)
Deferred taxes
(63)
Tax Consolidation: Application of the tax regime for groups of companies (Note 2.27) had no impact
on the tax charge (compared to €0,000 in 2007).
Deferred taxes: Deferred tax rates amounted to 34.43% in 2008, 2007 and 2006.
25.2 Effective tax rate
The difference between the amount of tax resulting from application of the legal tax rate in force in
France and the amount of tax effectively paid can be analysed as follows:
in €000s
Profit or loss of consolidated companies before tax
Average tax rate in force
Theorical tax
Impacts :
- exceptional 3.3% allowance
- permanent differences between book profit or
loss and taxable profit or loss
- tax reminders
- other provisions
Effective tax
Effective tax rate
31/12/2008
22 608
34.43%
(7 784)
31/12/2007
27 092
34.43%
(9 328)
31/12/2006
36 836
34.43%
(12 682)
25
25
25
(111)
(73)
(141)
(3)
(7 873)
34.83%
(21)
(9 397)
34.68%
4
(12 794)
34.73%
in €000s
Deferred tax assets
31/12/2008
2 634
31/12/2007
2 632
31/12/2006
3 005
Deferred tax liabilities
7 017
5 128
3 660
Net differed tax
(4 383)
(2 496)
(655)
In view of the tax consolidation regime, there does not exist any tax loss carry forward for the whole
of the consolidation scope.
25.3 Analysis of deferred taxes by type of timing difference
31/12/2007
Impact on the Reclassification
result
31/12/2008
· Retirements commitments (1)
1 007
(7)
1 120
· Deferred deductibility charges
378
(68)
310
· Employee profit-sharing
1 247
(43)
1 204
2 632
(118)
· Tangible fixed assets (leases)
(3 714)
(606)
(4 320)
· Optional depreciation
(1 107)
(412)
(1 519)
· Miscellaneous
(111)
(795)
(906)
· Tax on provisions for price increases
(8)
(54)
(62)
· Corporate tax on leased land
(188)
(21)
(209)
consolidation (5 128)
(1 889)
(7 017)
(2 496)
(2 007)
in €000s
Timing differences
Timing
differences
restatements
concerning
Net deferred tax assets
120
120
120
2 634
(4 383)
(1) The €120,000 restated corresponds to the impact of applying IAS 19 as of 1 January 2006 (SORIE deferred
tax).
NOTE 26 – Net income
26.1 Share of income of consolidated companies
in €000s
Toupargel Groupe SA
Toupargel
Place du Marché
Total
Consolidated Income
31/12/2008 31/12/2007
975
1 357
16 615
18 474
(2 855)
(2 136)
14 735
17 695
Net profit
31/12/2006 31/12/2008
2 096
11 779
24 143
14 900
(2 197)
198
24 042
26 877
31/12/2007
13 551
16 310
(3 420)
26 441
31/12/2006
10 316
21 048
9 945
41 309
26.2 Consolidation restatements
in €000s
Toupargel
Groupe SA
Toupargel
Place
Marché
du Total
Net profit as of 31 December 2008
11 779
14 900
198
26 877
Deferred tax
(792)
(925)
(122)
(1 838)
Tax credit
10
(10)
0
Restatements
Cancellation regulated provisions
1 295
59
1 354
Property Lease finance contracts
661
207
868
Equipment lease finance contracts
968
(74)
894
(222)
(20)
(253)
Provisions for retirement
(12)
Cancellation of dividends
(15 000)
Reserves for remuneration paid in shares
(13)
Cancellation of depreciation
advances
Other financial instruments
of
(15 000)
(62)
shareholder 4 980
(10)
(84)
(3 085)
1 896
22
22
Total restatements
(10 804)
1 715
(3 053)
(12 142)
Net profit as of 31 December 2008
975
16 615
(2 855)
14 735
NOTE 27 : Calculation of ordinary and diluted earnings per share
a – Calculation of net income per share
31/12/2008
31/12/2007
31/12/2006
Net group profit per basic share (in €000s)
Number of shares (1)
14 735
9 925 458
17 695
10 053 260
24 042
10 101 682
Net earnings per share (in €)
1.48
1.76
2.38
(1) : See c) determination of number of shares below
b - Calculation of net income per diluted share
31/12/2008
31/12/2007
31/12/2006
Net group profit per basic share (in €000s)
Number of diluted shares (1)
14 735
9 926 040
17 695
10 054 155
24 042
10 103 892
Net earnings per diluted share (in
€)
1.48
1.76
2.38
(1) : See c) determination of number of shares below
c - Determination of number of shares
31/12/2008
10 103 282
-203 136
9 900 146
Number of ordinary shares issued (company capital)
Number of self-controlled shares (Treasury shares and liquidity contract)
(1) Number of shares in circulation
31/12/2007 31/12/2006
10 103 282 10 101 682
-147 900
9 955 382
10 101 682
(2) Impact of the weighing of shares issued for stock options and self-controlled
shares (average number compared to 31/12/2008)(2)
25 312
97 878
(3) Number of shares retained for the calculation of net profit per share (1)-(2)
Remaining share options
Exercise price for options (en €)
Funds received from subscriptions
Average share price (en €)
Number of shares theorically acquired with the funds received
(4) Number of theoretical additional shares
9 925 458
1 200
8.75
10 500
17
618
582
10 053 260
1 200
8.75
10 500
34.5
304
896
10 101 682
2 800
8.75
24 500
41.53
590
2 210
Average number of shares retained for the calculation of net diluted earnings per
share (3)-(4)
9 926 040
10 054 155
10 103 892
Note: The Board of Directors meeting of April 25, 2008 granted 200,000 stock options. As the
subscription or purchase price, exercisable from April 26, 2010, of €25.75 is greater than the average
current share price, these shares have not been taken into account in calculating the theoretical
number of shares.
Notes on commitments and other information
NOTE 28 – Off-balance sheet commitments related to ordinary business
a – Commitments provided
In €000s
Guaranted provided
31/12/2008
31/12/2008
31/12/2006
1 773
2 229
2 783
Guarantees provided: joint and several guarantee of Toupargel Groupe SA in an amount of
€1,773,000 vis-à-vis Place du Marché in the context of a property lease contract for Chalon sur
Saône. The contract has been restated in the consolidated accounts as borrowings and fixed assets.
b – Commitments received
in €000s
Unused available credit lines
Subsidies
Total
31/12/2008
40 000
4
40 004
31/12/2007
12 000
139
12 139
31/12/2006
37 000
621
37 621
Lines of credit: as of 31 December 2008, Toupargel Groupe SA had available a medium-term credit
line of €40 million unused on this date. In addition, its subsidiary Toupargel has a medium-term
credit line available for a total amount of €10 million, which has been entirely drawn down.
Subsidies
• Argentan-Toupargel platform: for the construction of the Argentan (61) platform, Toupargel
obtained subsidies for which it remained to receive as of 31 December 2008 :
- Regional Council €4,000,
Subsidies received at the time these platforms entered into service had as a condition maintenance
of employment created over a period :
- Châlon sur Saône (Place du Marché, 2002)
€1,454,000 (conditions: maintenance until 2009)
- Argentan (Toupargel, 2006) €900,000 (conditions: maintenance until 2011)
- Montauban (Toupargel, 2006) €392,000 (conditions: maintenance until 2011)
La Roche Blanche Agency - Toupargel: at the time of the enlargement of the La Roche Blanche (63)
agency, Toupargel was granted a subsidy of €150,000 provided it made an investment of €1,100,000
and created 50 jobs. It received a down payment of €53,000 in 2006. The amount has not been
recorded as a commitment received as it is subject to conditions.
c – Reciprocal commitments
Lease finance contracts : These are restated in the consolidated accounts (into borrowings, financial
expenses and fixed assets). Rental payments are as follows:
in €000s
Payments of
than one year
less Payments of more Payments of more Total
than one year and than five years
less than five years
Buildings
1 582
4 253
Vehicles
4 389
3 654
Total
5 971
7 907
1 143
6 977
8 044
1 143
15 021
The impact on the income statement of the restatement of lease finance contracts is provided in
note 5.3 b.
Leases
Future maturities in €000s
Total
2009
2010
2011
2012
Following
financial
years
Commercial leases
Transport equipment
2 994
31
1 664
27
885
4
364
74
7
Office equipment
2
2
Total
3 027
1 693
889
364
74
7
Commercial leases: The Group occupies leased land and buildings. Charges related to financial years
2008, 2008 and 2006 amount to respectively €2,405,000, €2,683,000 and €2,738,000.
Vehicles, office equipment: for part of its fleet of light vehicles, the group has entered into contracts
covering the leasing, maintenance and replacement of vehicles. These contracts have not been
restated as fixed assets and debt as they are considered as being service contracts. Similarly,
contracts for computer equipment also have a service character and have not been restated.
Other major reciprocal commitments
in €000s
Fixed asset orders
Goods' purchases commitments (short-term)
Sponsoring - Patronage
Total
31/12/2006
300
13 269
360
13 929
31/12/2007
1 942
19 890
160
21 992
31/12/2008
540
23 156
340
24 036
d – Complex commitments
- Commitments related to borrowings (guarantees, default clauses): see note 14
- Ad hoc entities: the Toupargel Groupe has no ad hoc entities
- Others : the Toupargel Group constituted, on 29 August 2008, an economic grouping with Eismann
for the purpose of jointly negotiating purchase conditions with suppliers, supplier orders being
managed separately from the grouping by each of the partner companies. Each member of the
grouping is jointly and severally responsible for the debt of the grouping. The grouping was not
consolidated as of 31 December 2008 as financial flows (limited to the cost of operations re-invoiced
without margin to the two member companies) were not significant.
- Securitisation transactions: the Group is not involved in any securitisation transactions.
NOTE 29 – Other commitments and other information
a – Individual training rights
The law of 4 May 2004 provides employees of French companies the right to training courses of 20
hours minimum per year, cumulative over a period of 6 years (ie a maximum of 120 hours per
employee).
Amendment 2 of 14 October 2004 to the "Wholesale Businesses" CCN increases this individual right
to training to 21 hours for a full-time employee (i.e. a maximum of 126 hours).
Rights not yet used as of 31 December 2008 representing a total of 239,130 hours (compared to
193,409 hours as of 31 December 2008 and 131,257 as of 31 December 2006), did not result in the
constitution of a provision as of 31 December 2008. Individual Training Rights are considered as a
possible liability; however, the history of the use of this right does not indicate any probable
significant additional cost for professional company training.
b – Capital gains on non-amortisable items
Successive mergers, carried out under a beneficial tax regime have resulted in, for Toupargel-Agrigel
SA, its subsidiaries, and absorbed companies, a tax deferral of capital gains for non amortisable items
and in particular business goodwill, investment certificates and land. Unrealised capital gains for land
have been provisioned for taxes. The other tax deferrals are all provisional in nature, as they
comprise constituent and significant elements of the group's business goodwill.
Revaluation gains arising from mergers (which are eliminated on consolidation and for which no
deferred tax is recognised) are as follows:
- Business goodwill
€26,857,000 (consolidated goodwill)
- Investment certificates
€3,681,000
(consolidated undistributed reserves)
Total
€30,538,000
Following the 2004 Revised Finance Law (article 39), a long-term capital gain will become
progressively exempt from tax: 15% taxation in 2005, 8% in 2006 and tax-free from 2008, with the
exception of a 5% charge. The impact on the Group comprises €3,681,000 in deferred taxation
relating to investments.
c – Pledge of registered shares
As of 31 December 2008, 41,200 shares of Toupargel Groupe SA were pledged.
NOTE 30 – Related parties
30.1 Board Directors and Executive Committee
a - Remuneration
Total remuneration comprises a fixed and a variable element. Total gross revenues in 2008 for
directors et Executive Committee amounts to :
- Fixed remuneration : €1,282,000
- Variable remuneration : €61,000
b – Directors fees
Directors fees paid in 2008 amounted to €32,000 (beneficiaries : independent directors).
c – Long-term benefits and post-employment benefits :
Provisions for seniority awards (Directors and Executive Committee) amounted to €50,000.
Retirement indemnities provisioned as of 31 December 2008 concerning directors and Executive
Committee amounted to €361,000.
d - Indemnity commitments
There is no commitment to pay non-competition indemnities to company directors or members of
the Executive Committee. One member of the Executive Committee is the beneficiary of a 12
months’ salary indemnity for dismissal in addition to indemnity payments due under the Collective
Agreement.
30.2 Other related parties
Toupargel Group has signed a sponsorship contract with Canal+ Events, organiser of the "Asvel
Basket" events. Roland Tchénio, CEO, is a director of Asvel Basket. In 2008, Toupargel Group
recorded €310,000 as an expense for sponsorship and Toupargel SAS €5,000 for the purchase of
tickets.
There exists no other transaction with other related parties within the meaning of standard IAS 24:
shareholders, associated companies and joint ventures.
30.3 Intra-group relations
List of subsidiaries and investments (in €000s).
Subsidiaries (>50%)
Name and head office
Capital
Share
Toupargel
€25,000,000
100 %
Place du Marché
Capital
Share
Gross value of Loans,
shares
advances
€83,438,000
Sales
€353,044,00
0
69380 Civrieux d’Azergues Shareholders’ Dividends
Net value of Guarantees Net profit
equity
received
shares.
provided
€57,962,000 €15,000,000 €83,438,000
€14,900,000
69380 Civrieux d’Azergues €100,000,000 100 %
Shareholders’ Dividends
equity
received
(€2,207,000)
Gross value of Loans,
Sales
shares
advances
€6,155,000
€20,650,000
Net value of Guarantees Net profit
shares.
provided
€198,000
COMPANY AUDITOR AND INTERNAL CONTROL
11 rue Auguste Lacroix
69003 LYON
DELOITTE & ASSOCIES
Immeuble Park Avenue
81 boulevard de Stalingrad
69100 VILLEURBANNE
TOUPARGEL GROUP
French limited liability company (Société Anonyme)
13 chemin des Prés Secs - 69380 CIVRIEUX D'AZERGUES
Report of the Statutory Auditors
on the annual financial statements
Year ended December 31, 2008
To the Shareholders,
Pursuant to the mission that was entrusted to us by your General Meeting, we hereby present our
report for the year ended December 31, 2008, concerning:
-the audit of the consolidated financial statements of the Toupargel Group, as they are attached to
this report;
- justification for our assessments;
-specific verifications required by legislation. The consolidated financial statements have been
approved by the Board of Directors. Our role is to express an opinion on these financial statements
based on our audit.
I. OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS
We conducted our audit in accordance with accepted professional standards in France. These
standards require that we carry out due diligence in order to obtain reasonable assurance that the
consolidated financial statements are free of material errors. An audit consists in verifying, through
sampling or other selection methods, items supporting the amounts and information contained in
the consolidated accounts. An audit also includes an assessment of accounting principles used,
significant estimates made and the overall presentation of the financial statements. We believe that
the information we have obtained is sufficient and represents an appropriate basis for our opinion.
We certify that the statements are, with regard to IFRS as adopted by the European Union, fair and
accurate and fairly present the assets, liabilities, financial position, as well as the results of the group
constituted by the persons and entities included in the consolidation.
Without calling into question the above conclusion, we draw your attention to note 2.2 concerning
accounting principles and valuation methods which describes the change in accounting method
adopted for "customer loyalty programmes" (early application of IFRIC 13).
II. JUSTIFICATION FOR ASSESSMENTS
The accounting estimates used in the preparation of the consolidated financial statements as of
December 31, 2008 were made in a context of considerable market volatility and a certain difficulty
in reaching an opinion on the economic outlook. These conditions are described in Note 2.3 of the
notes to the financial statements. It was in this context that, pursuant to Article L.823.9 of the
Commercial Code, we made our own assessments which we bring to your attention:
- Note 2.2 of the appendix describes the detailed rules governing early application in early 2008 of
IFRIC 13 relative to the accounting treatment of customer loyalty programs. We have audited the
appropriateness of the accounting policies referred to above as well as the information provided in
the appendix.
- The company conducts an annual impairment test on its goodwill as described in notes 2.5 and 6.2
of the consolidated financial statements. We reviewed the procedures governing this impairment
test, estimates of cash flows and assumptions used and verified that notes 2.5 and 6.2 provide
appropriate information.
- Your company constitutes provisions to cover contingent liabilities and social commitments as
described in notes 2.14, 2.15, 13 and 14 of the notes to the consolidated accounts. Our work consists
in particular in assessing the information and assumptions on which these estimates are made,
reviewing the calculations made by the company and examining management approval procedures
for the estimates. We have assessed the reasonable character of the estimates.
The assessments were made in the context of our audit of the consolidated financial statements
taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first
part of this report.
III. SPECIFIC VERIFICATION
We also verified the information contained in the report on the management of the group. We have
no comment to make concerning the fairness of the information and its consistency with the
consolidated financial statements.
Lyon and Villeurbanne, April 7, 2009
The Statutory Auditors
COMPANY AUDITOR AND INTERNAL CONTROL
Jacques CONVERT
Managing Partner
DELOITTE & ASSOCIES
Olivier ROSIER
13, chemin des Prés Secs 69380 Civrieux d’Azergues - France
Tel. 33 4 72 54 10 00 - Fax 33 4 72 54 10 30
Contact: infofinanciere@toupargel.fr