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Masterpieces We arepassionate about creating fine chocolates. And our technical advisers,all of them trained pastrychefs, takepride in sharing their extensive know-howand boundless creativity with our artisan customers at our 13 Chocolate Academies located around the world. Their masterpieces, adelightfor both the eyeand the palate,are showcased in this annual report.

I Brief

Strong year,dynamic growth: sales volume +7.6%, EBIT In +7.9%*, net proﬁt13.5%*

*inlocal currencies Brief Strengthening our global Gourmet leadership

Financial performance targets extended through 2012/13 2 BarryCallebaut at aglance

BarryCallebaut is organized into differentregions: Region Europe (incl. Western and Eastern Europe), Region Americas and Region Asia-Pacific. The globally managed Global Sourcing &Cocoa business is reported as aseparatesegmentlikearegion.Thereare four differentproductgroups: CocoaProducts,Food Manufacturers Products,Gourmet & Specialties Products and Consumer Products.

Europe Americas Asia-Paciﬁc Global Sourcing & Cocoa

Food Manufacturers, Food Manufacturers, Food Manufacturers, Cocoa Gourmet,Consumer Gourmet Gourmet

57.7%ofconsolidated 22.3% of consolidated 3.7% of consolidated 16.3% of consolidated sales volume sales volume sales volume sales volume

Volume growth vs. prior year +4.1% +15.6% +15.5% +8.2%

EBIT growth vs. prior year +8.3% +6.3% +87.6%1 +5.4% (in local currencies) 1Excluding one-oﬀ gain on the sale of the Asian Consumer business in the prior year. 3 Key ﬁgures BarryCallebaut Group

forthe fiscal year ended August ]×, Ùèèz/×è ÙèèR/èz Change(%) in local in reporting currencies currency Income statement Sales volume Tonnes h.F% ×,]èð,ÙRè ×,Ù×],F×è Sales revenue CHFm ××.]% F.R%ð,Ù×].R Ù,RRè.Ù EBITDA× CHFm ð.R% ].Ù%Ùhè.h ÙðF.× Operating profit(EBIT)CHF m h.z%ð.F%]hè.Ù ]ðè.R Net profitfor the year CHFm ×].ð% ×è.z% Ùð×.h ÙÙF.z Cash flowÙ CHFm z.ð% Ùðh.R Ù×R.× EBIT per tonne CHF è.]%(×.R%) ÙR].R ÙRz.×

Balancesheet Total assets CHFm ×.F% ],ðhè.R],ð×Ù.R Net working capital] CHFm (Ù.ð%) zFÙ.z ×,è×è.× Non-currentassets CHFm (×.R%) ×,Ùèð.R ×,Ù]Ù.Ù Net debt CHFm (h.F%) Rhè.R zÙÙ.h Shareholders’ equityÙ CHFm ].h% ×,]èÙ.] ×,Ùðð.F

Ratios Economic value added (EVA)CHF m ×].h% ×Ùh.h ×Ùz.z Return on invested capital (ROIC)ð % ×Ù.R% ×].z% Return on equity (ROE) % ×z.F% ×R.×% Debt to equity ratio % FF.z% hð.×%

Shares Shareprice at ﬁscal year end CHF ÙÙ.ð% hè] ðhÙ EBIT per share(issued)CHF ð.F% h×.FFh.R Basic earnings per shareF CHF ×è.ð% ÙR.F ÙÙ.è Cash earnings per shareh CHF z.]% RR.FR×.× Payout per shareR CHF ×Ù.è% ×Ù.è ×Ù.ð

Other Employees è.]% h,ððè h,ðÙð

× EBIT+depreciation of property,plantand equipment+amortization of intangible assets Ù Operating cash flow beforeworking capital changes ] Includes currentassets and liabilities related to commercial activities and currentprovisions Ù Total equity attributable to the shareholders of the parentcompany ð EBIT x(1–effectivetax rate)/average capital employed F Based on the net profitfor the year attributable to the shareholders of the parentcompany/ basic shares outstanding h Operating cash flow beforeworking capital changes/basic shares outstanding R Parvalue reduction instead of adividend; 2009/10 as proposed by the BoardofDirectors to the Annual General Meeting

Sharepricedevelopment Cocoaprice BarryCallebaut vs.indices London CocoaTerminal Market Rebased 6-month forwardprices in GBP/tonne Ù,ðèè

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BarryCallebaut AG SPI Small &Mid-Cap Index SPI Swiss PerformanceIndex DowJones Euro StoxxFood &BeverageIndex 4 Key ﬁgures by region and productgroup

Sales volume Sales revenue in tonnes in CHFmillion

×,Ùèè,èèè ð,èèè ×,Ùèè,èèè Ù,èèè ×,èèè,èèè Rèè,èèè ],èèè Fèè,èèè Ù,èèè Ùèè,èèè ×,èèè Ùèè,èèè è è èð/èF èF/èh èh/èR èR/èz èz/×è èð/èF èF/èh èh/èR èR/èz èz/×è

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By region Sales revovelumenuebybyreregiongion Sales revovelumenuebybyprproducoductgtgroroupup Europe #Æ¥,ë²² Tonnes foinrtofinnesrst 6months FY 2009/10 infortofinnesrst 6months FY 2009/10 Americas /²,¥// Tonnes ×F.R% Asia-Pacific Ð#,/êÐ Tonnes z.R% Global Sourcing &Cocoa ² ,êê( Tonnes ×F.]R% ×R.è% ×F.]% By productgroup ×è.Ù% ]..zh% CocoaProducts ² ,êê( Tonnes Food Manufacturers Products ê¥ë,êÐ/ Tonnes Gourmet &Specialties ×Ù.Ù% Products ²¥¥,ëÐê Tonnes ×h.]% ðè.R% Consumer Products ² ê,Ð/# Tonnes ÙÙ.]%

FðÙh..hè%% F].h% 5

Key ﬁgures by region forthe ﬁscal year ended August ]×, Ùèèz/×è ÙèèR/èz× Change(%) in local in reporting currencies currency Europe Sales volume Tonnes Ù.×% hð],è×× hÙ],èzz Sales revenue CHFm Ù.R%(è.ð%) ],èÙÙ.è ],èðF.] EBITDACHF m h.×%Ù.×%]ÙÙ.× ]××.Ù EBIT CHFm R.]% F.]% ÙFR.h ÙðÙ.h

Americas Sales volume Tonnes ×ð.F% Ùz×,]zz ÙðÙ,×ðz Sales revenue CHFm ×ð.h% ×è.R% zzR.Ù zè×.× EBITDACHF m h.è% h.×% ×èR.××èè.z EBIT CHFm F.]% h.Ù% zÙ.ð RF.]

Asia-Paciﬁc Sales volume Tonnes ×ð.ð% Ùh,zRÙÙ×,ðÙÙ Sales revenue CHFm Ù].Ù% Ù×.Ù% Ù××.××h].z EBITDACHF m(ÙF.]%) (Ùh.ð%) ÙF.Ù ]F.× EBIT CHFm (Ùh.Ù%)Ù (ÙR.Ù%)Ù Ùè.z Ùz.Ù

Global Sourcing &Cocoa Sales volume Tonnes R.Ù% Ù×Ù,RRF ×zF,RèR Sales revenue CHFm Ùz.z% ÙR.ð% zFÙ.ð hÙR.z EBITDACHF mð.R% ].F% hð.Ù hÙ.F EBIT CHFm ð.Ù% ].z%ðÙ.ð ðÙ.ð

Key ﬁgures by productgroup forthe ﬁscal year ended August ]×, Ùèèz/×è ÙèèR/èz× Change(%) in local in reporting currencies currency Industrial Products Sales volume Tonnes R.]% ×,èÙ],h]ð zF],RðR CocoaProducts Tonnes R.Ù% Ù×Ù,RRF ×zF,RèR Food Manufacturers Products Tonnes R.]% R]è,RÙz hFh,èðè Sales revenue CHFm ×Ù.×% z.h% ],Fhz.Ù ],]ðÙ.ð CocoaProducts CHFm Ùz.z% ÙR.ð% zFÙ.ð hÙR.z Food Manufacturers Products CHFm z.F%Ù.]%Ù,h×F.hÙ,Fèð.F EBITDACHF m F.×%Ù.Ù% ]ðè.ð ]]ð.R EBIT CHFm h.ð% F.]% Ùzè.F Ùh].ð

Food Service/Retail Products Sales volume Tonnes Ù.h% ÙF×,ðÙð ÙÙz,hðÙ Gourmet &Specialties Products Tonnes ×h.]% ×]],èÙR ××],ÙFF Consumer Products Tonnes (ð.h%) ×ÙR,Ùzh ×]F,ÙRF Sales revenue CHFm ð.×% è.F% ×,ð]Ù.F ×,ðÙð.h Gourmet &Specialties Products CHFm ×z.Ù% ×Ù.]% hèh.FF×z.è Consumer Products CHFm (Ù.F%) (R.R%) RÙh.èzèF.h EBITDACHF m ×.R%(×.×%) ×R].××Rð.Ù EBIT CHFm ×.z%] (è.R%)] ×ÙF.è ×Ùh.Ù

× Certain comparatives have been reclassified to conform with the currentperiod’spresentation Ù +87.6% in local currencies (+85.0% in CHF) excl. the one-off gain on the sale of the Asian Consumer business in prior year ] +16.0% in local currencies (+12.9% in CHF) excl. the one-off gain on the sale of the Asian Consumer business in prior year 6 Strategy

Based on BarryCallebaut’s ﬁnancial targets forthe period 2009/10 through 2012/131, the companyaims to signiﬁcantly outperform the global chocolate market.Barry Callebaut’s ambitious growth strategyisbased on three pillars: expansion,innovation and cost leadership.

Expansion BarryCallebaut intends to acceleratethe growth of its Gourmet business. With regard to the industrial customers,the companywants to strengthen its position in the maturemarkets of Western Europe and North America. In recentlyentered emerging marketslikeRussia, China, Japan,Mexicoand Brazil, Barry Callebaut aims to develop their full potential. Lastly,the companywill carefully evaluate howtoenter other emerging markets. Implementing existing outsourcing volumes and strategic partnerships as well as securing further outsourcing deals with regional and local food manufacturers will remain an essential partofthe business strategy.

Innovation BarryCallebaut is recognized as the reference forinnovation in the chocolate industry. Dedicated R&D teams around the world focus on twodiﬀerentareas: Fundamental research into the health-enhancing properties of the cocoabean and pro-activeresearch and developmentleading to cutting-edgecocoa and chocolate products such as the developmentofthe Controlled Fermentation technology. The applied R&D teams,onthe other hand, supportcustomers to improvetheir products and recipes as well as their production processes on their ownproduction lines. In total, BarryCallebaut’s R&D departmentmanages about 1,750projects,runs almost 7,600 trials and conducts morethan 400 technical visits with its customers everyyear.

Cost leadership Cost leadership is an importantreason whyfor example international customers out- source chocolate production to BarryCallebaut.The companyiscontinuously improving its operational efficiency by upgrading the technologyand achieving higher scale effects through better capacity utilization,byoptimizing product flows, logistics and inventory management, as well as by reducing energy consumption and lowering fixedcosts.In total, manufacturing costs per tonne in fiscal year 2009/10 were reduced by another 5% (in local currencies).

1These targets areonaverage 6–8% volume growth per annum and averageEBITgrowthinlocal currencies at least in line with volume growth – barring anymajor unforeseen events. 7 Highlights

BarryCallebaut has made signiﬁcantinvestments in building afoundation forcontinued success.This ﬁscal year wasmarked by milestones thatset the stagefor superior performanceand growth in the future.

December ëë/ March ë²ë August ë²ë BarryCallebaut BarryCallebaut and BarryCallebaut extend- completed the acqui- the Malaysian Cocoa ed the successful farmer sition of the Spanish Boardsigned aMem- program “Quality chocolate maker orandum of Under- Partner Program” (QPP) Chocovic,S.A., specializ- standing on acollabor- from IvoryCoast to ing in specialty products ativeresearch project cocoa-farming regions forindustrial and to increase the value of in Cameroon,the fourth artisanal customers. Malaysian cocoabeans largest cocoaproducer with the Controlled in Africa. January ë²ë Fermentation method. Launch of multiple- September ë²ë certification project – May ë²ë BarryCallebaut signed UTZ, Rainforest Alliance BarryCallebaut along-term global sup- and other product inaugurated anew ply agreementwith certification labels – chocolate factory KraftFoods Inc., making with cocoafarmer located in Extrema, BarryCallebaut the cooperatives in Ivory Minas Gerais,near keyglobal cocoaand Coast in response SãoPaulo,Brazil – the industrial chocolate to market needs and company’s first choc- supplier to the world’s trends. olate factoryinSouth second largest food America. company.

During the World Exhibition in Shanghai from Mayuntil October, BarryCallebaut acted as the unique supplier to Godiva, Neuhaus and Guylian at the Belgian Chocolate Corner. 8 Vision and values

Our vision BarryCallebaut is the heartand engine of the chocolate industry. Our goal is to be No.1inall attractivecustomer segments and in all major world markets. Our heritage, our knowledgeofthe chocolate business – from the cocoabean to the finest finished products – makeusthe business partner of choice forthe entirefood industry, from individual artisans to industrial manufacturers and global retailers. We seek to apply our constantly evolving expertise to helping our customers grow their businesses,and we arepassionate about creating and bringing to market new, healthyproducts thattaste good, delightall senses,and arefun to enjoy. Our strength comes from the passion and expertise of our people forwhom we strivetocreateanenvironmentwherelearning and personal developmentisongoing, entrepreneurship is encouraged, and creativity can flourish.

Our values Customer focus By anticipating market trends and investing time and efforttofully understand customer needs,wegotogreat lengths to provide products and solutions of superior value through abusiness partnership with everycustomer thatischaracterized by professionalism and mutual trust. Passion Our pride in whatour companydoes inspires and motivates us to giveour best at work.Weare eager to learn about our business and to shareour know-howand enthusiasm with others. Entrepreneurship With the goal to create superior customer value,weconstructively challengethe status quo and exploreopportunities to innovate: neweating trends,new markets,new ideas forproducts and services,and newwaysofdoing business.Weare willing to takecontrolled risksand aredetermined to persevere. Team spirit Whether in the field, on the shop floor or in administration – we areone team,sharing acommon purpose and common goals.All members of this team actively engageinopen communication and idea sharing and arecommitted to working together to achieve our common goals across the whole organization. Integrity We showrespectfor our fellowteam members and all our stakeholders and arehonest,trustworthy, and open-minded in all our business activities and relationships. We liveuptohigh ethical standards thatpromote fairness,equality,and diversity.

As afood manufacturer,BarryCallebaut has afunda- mental responsibility to ensurethe safety and quality of our products.Asaninternational companywith operations in 26 countries,werecognizethatour businesses have an inﬂuence on the livelihoods of manypeople around the world. Accordingly,we strivetocontribute responsibly to the communities [whereweoperate. ] 9 Companyhistory

BarryCallebaut,headquartered in Switzerland, resulted from the mergerbetween Belgian chocolate producer Callebaut and French chocolate maker Cacao Barryin1996. The mergercombined Cacao Barry’sknow-howinprocurementand initial processing of cocoabeans with Callebaut’s extensiveexperience in producing and marketing chocolate products.Since1998, BarryCallebaut has been listed on the SIX Swiss Exchange.

Today, the companyisafully integrated chocolate companywith aglobal presence. It provides comprehensivechocolate solutions to the entirefood industry. As the outsourcing partner of choice,BarryCallebaut has an estimated 40% shareofvolumes in the open market.Itispresentin26countries,currently operates 43 production facilities,employs about 7,500people and generated sales of CHF5.2 billion in ﬁscal year 2009/10.

1999 Acquisition of Carma AG in Switzerland 2002 Acquisition of the Stollwerck Group in Germany 2003 Acquisition of Dutch Group Graverboom B.V. (including LuijckxB.V.) 2003 Acquisition of Brach’s Confections Holding,Inc.inthe U.S. 2004 Acquisition of the vending mix business of AM Foods in Sweden 2005 Opening of achocolate factoryinCalifornia, U.S. 2007 Opening of achocolate factoryinChekhov, Russia 2007 DivestmentofBrach’s Confections Holding,Inc., U.S. 2007 Signing of major long-term outsourcing contractswith Nestlé, Hershey’sand Cadbury 2007 Acquisition of acocoa factoryinPennsylvania, U.S. 2008 Opening of achocolate factoryinSuzhou, China 2008 Opening of asales oﬃce and Chocolate AcademyinMumbai, India 2008 Acquisition of a60% stakeinKLK CocoainMalaysia 2008 Sale of African Consumer business 2008 Opening of four Chocolate Academies in Suzhou, China; Zundert, The Netherlands; Chekhov, Russia; and Chicago, U.S. 2008 Acquisition of IBC, specialist in decorations,inKortrijk-Heule, Belgium 2008 Outsourcing agreementwith MorinagainJapan and startof production in newfactory 2008 Acquisition of a49% stakeinBiolands,Tanzania 2009 Opening of achocolate factoryinMonterrey,Mexico 2009 Sale of Asian Consumer business to Hershey’s 2009 Distribution agreementsigned with BungeAlimentosinBrazil 2009 Acquisition of Danish vending mix companyEurogran 2009 Acquisition of Spanish chocolate maker Chocovic,S.A. 2010 Opening of achocolate factoryinExtrema, Brazil 2010 Signing of amajor global supply agreementwith KraftFoods Inc. Download “In Brief” www.barry-callebaut.com/documentation Contents

1 In Brief

12 Interviewwith the Chairman and the CEO 18 BoardofDirectors and Management 22 Region Europe 25 Region Americas 27 Region Asia-Paciﬁc 30 Global Sourcing &Cocoa 32 CorporateSocial Responsibility 36 Operations &Supply Chain OSCO 38 Customers and Business Units 42 Innovation 46 Employees

52 Interviewwith the CFO 54 Financial Review 56 Consolidated Financial Statements 114 5-Year Overview 116 Financial Statements of BarryCallebaut AG

124 CorporateGovernance

134 Glossary 136 Contacts,Financial calendar and Forward-looking statement 12 Interviewwith the Chairman and the CEO Strong year with dynamic top- and bottom-line growth

Market conditions in fiscal year 2009/10 were challenging with astill rather fragile world economy, a flat global chocolate market,high rawmaterial prices and important currency fluctuations.BarryCallebaut’s growth strategy, together with arobust business model, efficiency gains as well as tightcost controlallowedthe companytoachieve top results: sales volume up 7.6%, EBIT +7.9% and net profit+13.5% (both in local currencies). BarryCallebaut will further refine its existing growth strategyinorder to broaden as well as deepen the expansion of its business.

QThe global chocolate market declined forthe ﬁrst time in morethan adecade in the previous ﬁscal year.Has it returned to positivegrowthand howdid BarryCallebaut perform underthe givenmarket conditions? Andreas Jacobs,Chairman Until April 2010, the global chocolate confectionery market was flat in volume terms. Thereafter,itbegan to recover but, with aslight plus of 0.3%,1 it has still not returned to its previous long-term average growth rate of 2–3% per year.Our industry was faced with volatile and high rawmaterial prices.Barry Callebaut navigated very well through thesechallenges:At +7.6%, oursales volume again significantly outperformed the global chocolate market. Despite the continued pressurefromthe combined cocoa ratio2 on profitability,wegenerated astrong operating profitgrowth of 7. 9% in local currencies (+5.6% in CHF) and achieved an excellent net profitgrowth of 13.5% (+10.9% in CHF).

QWhatwerethe most importantfactors in reaching your targets amid such achallenging market environment? JuergenB.Steinemann,CEO First and foremost, we have astrong global footprint, which makes us an attractive partner for our international customers as we can serve them with acomprehensive range of products around the world. Besides that, we can offer abroad range of products to regional customers.Weclearly benefited from our targeted expansion to emerging chocolate markets,most of which performed very well. Emerging markets will become increasingly important in compensating for lower growth rates in moremature markets.Inour Gourmet business we have powerful international brands with Callebaut and Cacao Barry that offer great chocolate products with convenient applications.Last but not least, our cost leadership as well as our innovation power round offall these success factors.

QDoyou see anyneed to reprioritizeyour corporatestrategy? AJ Thepast two truly challenging years confirmed that our strategy has served us well in growing and developing our business.Therefore, we do not see the need for arevolu- tion but rather an evolution: One of our strategic pillars, “geographic expansion”,was in particular need of some fine-tuning because we also see opportunities to expand in scale,breadth and depth.We intend to accelerate the growth of our Gourmet business. With regardtoindustrial customers,wewant to strengthen our position in the mature markets of Western Europe and North America. In the emerging markets that we have recently entered, we aim to develop their full potential. Lastly,wewill carefully evaluate how to enter other emerging markets.Implementing existing outsourcing

1 Source: Nielsen,September 2009–August 2010 2 The (forward)combined cocoaratio is the combined sales price forcocoa butter and cocoapowder relativetothe cocoabean price. Interviewwith the 13 Chairman and the CEO

volumes and strategic partnerships as well as securing further outsourcing deals with local and regional food manufacturers will remain an essential part of our business strategy.

QYou mentioned Gourmet as one of your keygrowthareas.Can youtell us moreabout your strategygoing forward? JBS We intend to further strengthen the global leadership of our Gourmet &Specialties business.Itisvery different from our industrial business: We aretalking about different customers,needs,products,and market mechanisms.Weare now in the process of combining the best of both worlds,i.e.weare positioning our Gourmet business as “ independent from but interdependent” with our industrial business.This means that we have appointed dedicated management teams in Western Europe and North Amer- ica, our biggest markets,who will get their own profitand loss responsibility within the Region to even better steer the implementation of the Gourmet strategy.Wewill better segment the different customer groups and markets and adapt our product range to meet their needs.Atthe same time,Gourmet will remain interdependent with the Group’sindustrial factories and benefitfromtheir scope and manufacturing efficiency.Looking further ahead, we will develop Callebaut and Cacao Barry into global Gourmet brands and build our marketing activities around them.

QYou recently announced thatBarryCallebaut had become KraftFoods’ keycocoa and industrial chocolate supplier.Doyou still see outsourcing and strategic partnerships as atrend? JBS We arevery pleased about this major long-term partnership agreement with the world’s second largest food company.Itisour first global agreement and the first one that involves our entirevalue chain.We wereonly able to secureitbymaking acoordinat- ed team effort across all regions,functions and product groups – and because we are fully dedicated to cocoa and chocolate.This contract confirms the trend towards outsourcing and long-term partnership agreements.However,weare not only focusing on gaining large,global volumes; we arealso keen on securing long-term contracts with major local or regional food manufacturers.

“We do not see the need forarevolution but rather an evolution of our strategy. One of our strategic pillars, ‘geographic expansion’, wasinparticular need of some ﬁne-tuning because we also see opportunities to expand in scale,breadth and depth.”

Andreas Jacobs Chairman of the BoardofDirectors 14 Interviewwith the Chairman and the CEO

QThereisincreasing concern over insuﬃcientcocoa supplies.Doyou sharethese concerns? AJ We still see alot of unsustainable agricultural practices,mainly in West Africa, that have led to lower yields and quality.Toaddress this situation, we started working directly with cooperatives and aretraining cocoa farmers on how to improve crop yields and quality: We initiated our very own Quality Partner Program (QPP) in Ivory Coast in 2005 and recently extended it to Cameroon. We areamajor shareholder in some other farmer programs:Biolands in Tanzania and Bio United in SierraLeone.Beyond that, our new,unique Controlled Fermentation method will give us access to superior- quality cocoa beans and increase yields.

QYour activities seem to focus primarily on the quality of the cocoabeans – but not on working practices.Whatare youdoing to eliminate child labor on cocoafarms? AJ We do not own any cocoa farms but we fully acknowledge our responsibility.Westrong- ly condemn slavery and abusive labor practices that exploit children or put them in a hazardous or harmful work environment. We believe that poverty is the main reason why farmers resort to abusive child labor practices.Weare convinced that improving cocoa farmer livelihoods is imperative in the fight against poverty.For adecade, Barry Callebaut has been working in concert with other leading companies and independent organizations to improve the social conditions of cocoa farmers.Wewill not be able to end poverty in Africa by ourselves but we can contribute to abetterment of the situation – and with our active presence in these countries and our programs we will continue to do so.

QWhatkey trends do yousee in the chocolate market,and with whatkind of innovations will yourespond to them? JBS As many of our customers arecurrently struggling to pass the high rawmaterial costs on to retailers,wesee astrong move towards cost-efficient product solutions and a growing interest in compounds and fillings,areas wherewehaveexpanded our offering.Health-conscious consumers want morepermissibility when eating chocolate.For this growing group,weoffer applications that arefreefromallergens,for example,or that contain higher levels of cocoa flavanols as well as functional ingredients.Wehave afull range of rebalanced chocolate – alternatives with less fat, sugar and calories.We recently launched three innovations: Areformulated 100% dairy-free alternative to milk chocolate,the first chocolate with Stevia – anatural sugar substitute without alaxative effect –,aswell as the first batches of chocolate based on Controlled Fer- mentation for premium chocolatiers.

QWhatdoes BarryCallebaut do to attractand retain qualiﬁed employees to supportits growth ambitions? AJ Themost important resource we have in making high performance happen is our people. It is our aim to give all employees achance to realize their full potential by offering them opportunities to broaden their skills and experiences and by providing them struc- Interviewwith the 15 Chairman and the CEO

tured feedback on their performance.While we want to continue to attract talented people from outside to bring in new ideas,weare committed to developing moreof our futureleadership from within.

At this point, Iwould liketothank all our employees for their excellent work.Without their great dedication to our company,wewould not have been able to achieve these gratifying results.Sincerethanks also go to our highly esteemed customers and shareholders.

QWhatchallenges do yousee forthe coming ﬁscal year 2010/11, and can youconﬁrm your performancetargets? JBS We arecautiously optimistic with regardtothe economic situation. We believe that growth will continue to pick up even though the pace of recovery might vary geograph- ically.Asaconsequence,weassume that the global chocolate market will only grow approximately 1–2%, i.e.still below the long-term average of 2–3% per annum. We expect rawmaterial prices to stayabove the historical averages and to remain volatile.Our strategic priorities will be accelerating the growth of our Gourmet business, implementing recent outsourcing and strategic partnership agreements,setting the stage for the next wave of geographic growth in emerging markets,and enhancing our organizational structures for further successful growth.We will also focus on securing our long-term supply of cocoa beans,the foundation of our business.With our fine- tuned strategy,weare confident that we will be able to achieve our financial targets3 for the extended period 2009/10 through 2012/13.

] These targets areonaverage 6–8% volume growth per annum and averageEBITgrowthinlocal currencies at least in line with volume growth – barring anymajor unforeseen events.

“Our strategic priorities will be accelerating the growth of our Gourmet business,implementing recent outsourcing and strategic partnership agreements,setting the stagefor the next wave of geographic growth in emerging markets,and enhancing our organizational structures forfurther successful growth.”

JuergenB.Steinemann Chief ExecutiveOﬃcer Philippe Vancayseele,Master PastryChef,Chocolate AcademyWieze,Belgium: “Making pralines in the ‘Chocolate Corner’ of the Belgian pavilion at the World Expo 2010 in Shanghai, China, will remain alasting memoryfor me.Wereceived about 30,000 visitors everyday.Asians arecrazy about good quality chocolate; manycame just forone praline! The World Expo wasaunique opportunity forustodelight millions of Asian consumers with our ﬁne Belgian chocolates.”

18 BoardofDirectors and ExecutiveCommittee BoardofDirectors and ExecutiveCommittee

Additional information: www.barry-callebaut.com/organization and www.barry-callebaut.com/board BoardofDirectors

Andreas Jacobs,Chairman

Andreas Schmid, Vice Chairman

Rolando Benedick

James L. Donald

Markus Fiechter

Stefan Pfander

Urs Widmer

General Counsel &CorporateSecretary

Roland Maurhofer

The BoardofDirectors proposes to the Annual General Meeting of the Shareholders that Jakob Baer be elected as newmember of the BoardofDirectors.

( BoardofDirectors 19 and ExecutiveCommittee

Additional information: www.barry-callebaut.com/executivecommittee ExecutiveCommittee

× JuergenB.Steinemann,Chief ExecutiveOﬃcer ð Dirk Poelman,Chief Operations Oﬃcer

Ù Victor Balli, Chief Financial Oﬃcer F StevenRetzlaﬀ,Global Sourcing &Cocoa

] Massimo Garavaglia, Western Europe h Hans Vriens,Chief Innovation Oﬃcer

Ù David S. Johnson,Americas

Ð Æ

# Philippe Bertrand, Master PastryChef and decorated as “Meilleur Ouvrier de France”, Chocolate AcademyMeulan,France: “The latest trends arecrunchy, fondantand adash of ‘exotic’ingredients,such as Yusu, aJapanese citrus fruit,Matcha green tea or Wasabi. Iamsuretheywill be associated with speciality chocolates such as plantation and origin chocolates.Onthe other hand, chocolate products with along historyorthat areassociated with afamily of cocoagrowers arealso being discovered.”

22 ReportbyRegions Europe Europe – Strong performanceamidst challenging market conditions

Additional information: www.barry-callebaut.com/foodmanufacturers “After bottoming out by the end of calendar year 2009, the chocolate confectionery markets in Western Europe sawastagnating first semester followedbyasecond half with slightly increasing consumption – Eastern Europe still shows negativegrowth rates.Thankstoour strong footprintinmost of the European countries as well as our balanced portfolio ranging from artisanal Gourmet customers to large corporate accounts,weweathered the challenging economic environmentwith adverse currency effects and fierce competition in our Food Manufacturers business very well.”

In total, Barry Callebaut increased its sales volume in Region Europe by 4.1% to 753,011 tonnes.Inlocal currencies, sales revenue outperformed the volume growth (+4.8%), but was negatively affected by currencytranslation effects and decreased to CHF 3,042.0 million or by 0.5% in CHF. Operating profit (EBIT) in the region rose strongly to CHF 268.7 million, up 8.3% in local currencies (+6.3% in CHF), thanks to efficiencygains,slight margin improvements and strict cost control.

Overall, the major chocolate confectionery markets in Western Europe reported a0.9% growth rate led by Germany (+2.3%) and Italy (+1.6%), while the U.K. and France slightly contracted. Eastern Europe showed adropof5.3%, driven by declines in Russia (–7. 4%) and Ukraine (–10.7%).1

Western Europe – Particularly successful in specialties products In the Food Manufacturers business,wesaw very strong growth in our decorations business and increasing demand for nut and specialties products as well as for compounds and fillings.These areattractive market segments on which we will focus moreinthe near future. We experienced increasing demand for certified chocolate and growing interest in our own Quality Partner Program (QPP).Thelong-term global supply agreement we signed with Kraft Foods Inc.confirms the trend towards outsourcing and strategic partnerships.

In December 2009, Barry Callebaut closed the acquisition of Spanish chocolate maker Chocovic; the full integration was completed in July 2010. Chocovic significantly strengthened our market position with respect to compounds and fillings and made us the leader for industrial as well as artisanal products in Spain and Portugal. Choco- vic’sspecialties activities also contributed to the development of new business in other regions.

1 Source: Nielsen,September 2009–August 2010

Massimo Garavaglia PresidentWestern Europe ReportbyRegions 23 Europe

Additional information: www.barry-callebaut.com/gourmet and www.cacao-barry.comand www.chocolate-academy.comand www.barry-callebaut.com/beveragesand www.barry-callebaut.com/consumers Thecontribution from the Gourmet &Specialties Products business was particularly noteworthy.The European gourmet markets recovered after having been hit by the recession.Thebakery/pastry and confectionery segment showed astronger upturn than the HORECA(hotels,restaurants,catering) business.Our distributors and artisans maintained alow stock policydue to uncertainties about the strength of the recovery as wellasstill tight creditlines from their banks.Asaresult of the acquisition of Choco- vic,market sharegains,organizational optimization and astrong focus on both existing customers as well as new business opportunities,Barry Callebaut was able to achieve considerable growth in sales volume as well as revenue.

Following the trend towards the increasing popularity of at-home consumption, Barry Callebaut launched anew series of 13 ready-to-use Gourmet products under the Cacao Barry brand for the domestic kitchen. In partnership with Lenôtre, the ambas- sador of French gastronomy across the world, this “Home Cooking” product series was launched in France and will soon be launched in other European countries.

With the acquisition of Chocovic,wenow have anew Chocolate Academy in Spain, expanding the network to six representations all over Europe with atotal of 12 technical advisers and 100Ambassadors,who inspirethe 20,000 professionals attending the morethan 300demonstrations and 100training courses organized throughout the year.

Thesales volume of our Beverages division grew very strongly,driven by the acquisition of Eurogran. Thecompany has now been successfully integrated into Barry Callebaut within achallenging time schedule and is already exceeding the planned synergies. Beverages has proven to be ahighly attractive market – especially in Europe, where Barry Callebaut is now the market leader.Astrong trend during this fiscal year wasseeninthe growinginterestofour customers to developcocoa-based capsule solutions for tabletop coffee machines.

In line with itsstrategic objective, the Consumer Products business was able to increase itssales in majormarkets outsideGermany andimprovedits countryportfolio.We started aprocess of carving out our consumer business from our other activities in order to put it on astand-alone basis,which will facilitate the eventual divestment. Our plan remains unchanged to focus on our industrial and artisanal business and divest our consumer activities.

Key ﬁgures forRegion Europe

Change % Ùèèz/×è ÙèèR/èz* in local in reporting currencies currency

Sales volume Tonnes Ù.×% hð],è×× hÙ],èzz Sales revenue CHFm Ù.R%(è.ð%) ],èÙÙ.è ],èðF.] EBITDACHF m h.×% Ù.×% ]ÙÙ.× ]××.Ù EBIT CHFm R.]% F.]% ÙFR.h ÙðÙ.h *Restated ﬁgures due to ﬁrst-time application of IFRS 8. 24 ReportbyRegions Europe

Additional information: www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet Eastern Europe – Strong growth despite still challenging market conditions Overall, the economic environment in the Eastern Europe Region is improving,but stillbelow ourgrowthexpectations. Thechocolate confectionery market suffered much more than in Western Europe.1 In contrast, Barry Callebaut’soverall volume and sales revenue in the region grew at adouble-digit pace compared to the previous fiscal year. Thecombination of outsourcing,new business gains due to increased sales efforts in countries such as Turkey and the former Soviet countries (CIS) as well as the continued geographic expansion of our Gourmet &Specialties Products business led to this positive result. In addition, intensified sales efforts in the market of Hungary paid off in the form of double-digit volume growth. Themost important growth driver was – as in the last fiscal year – Poland, but even Russia managed to deliver positive growth despite the difficult conditions.

As the purchasing power of consumers is growing,demand for moreinnovative and premium products is also increasing.Wehavenoticed that new trends have not always originated from the big multinationals; sometimes they came from local, fast growing players.Tosupport this development, we will continue to invest in morelocal R&D people.

In our Food Manufacturers business,weachieved adouble-digit increase in volumes andprofits in an overalldeclining market thanks to more efficient operations and abetterproduct mix. With the market picking up in Russia in the last quarter of fiscal year 2009/10, Barry Callebaut generated slightly positive growth in an overall tough market. We noted additional business originating from the CIS countries,wherenew players have invested in high quality chocolate confectionery.Inthe ice cream business,wesee moreplayers using real chocolate instead of compound.

Russia and the CIS countries showed very strong volume growth in our Gourmet & Specialties Products business as we extended our product portfolio and further expanded our distribution network. Overall, Barry Callebaut increased volumes by double digits in this product group.While we achieved our ambitious growth targets in Turkey and Poland, Greece suffered from the country’s financial difficulties.

1 Source: Nielsen,September 2009–August 2010

Filip De Reymaeker PresidentEastern Europe ReportbyRegions 25 Americas Americas – Substantial growth in amixed market environment

Additional information: www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet “Despite aggressivecompetition and overall soft economic market conditions,Barry Callebaut achievedsolid results in Region Americas.Infiscal year 2009/10,werounded off our strong manufacturing footprintinthe region with capacity expansions at existing facilities and with the inauguration of our first chocolate factoryinSouth America in May2010.BarryCallebaut is nowinafavorable position to tap atremendous market potential – not only in Brazil but throughout the entireregion.”

Thematureeconomies of the United States and Canada slowly returned to positive GDP growth after being hit hardbythe financial crisis.However,consumer confidence softened and the economic recovery stalled in the second half of the fiscal year.Incon- trast, the developing regions of Brazil and Mexico showed consistent strength. Brazil navigated the crisis relatively well and its 2010 GDP growth is expected to accelerate to 6.4%. Mexico was strongly affected by the crisis,but is projected to rebound to agrowth rate of 4.3% for 2010.Growth potential in the Latin American region looks promising at an estimated 4.2% per annum over the 2011–2012 period,1 which bolsters our confidence in our recent expansions in Mexico and Brazil.

Chocolate consumption in the United States dipped to low levels in early 2010 but re- bounded strongly in the thirdquarter of our fiscal year; overall, the chocolate market in the United States grew by 2.7%. We also benefited from growth in the Brazilian chocolate market, wherevolumes increased by 3.5%.2

Region Americas achieved strong overall sales volume growth of 15.6% to 291,399 tonnes,driven by long-term outsourcing and supply agreements with keyCorporate Accounts as well as through broad-based growth in our Gourmet business.Regional sales revenue was just shy of the CHF 1billion mark at CHF 998.2 million, corresponding to an increase of 15.7% in local currencies (+10.8% in CHF) versus last year. Operating profit (EBIT) rose considerably by 6.3% in local currencies (+7.2% in CHF) and amounted to CHF 92.5 million, positively influenced by the volume growth in both the Food Manufacturers and the Gourmet &Specialties Products business,partly offset by infrastructureinvestments to support the ongoing growth, including the start- up costs for the new factory in Brazil.

Theinauguration of our new chocolate factory in Extrema, Minas Gerais,Brazil, on May27, 2010 marked another milestone in Barry Callebaut’sstrategy to selectively expand its geographic presence to those emerging markets that offer above-average growth opportunities.The combination of our new chocolate factory with our existing cocoafactory in Ilhéus,Bahia, rounds offour local, integrated footprint and we arenow

1 Source: The World Bank,summer 2010 2 Source: Nielsen,September 2009–August 2010

David S. Johnson CEO and PresidentAmericas 26 ReportbyRegions Americas

Additional information: www.chocolate-academy.comand www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet well positioned to become theNo. 1chocolate supplier to Brazil’sfast growing food service industry,which includes restaurants,fast food restaurants,bakeries,pastry shops,in-storebakeries,caterers,hotels,chocolatiers,hospitals and school canteens. These markets offer Barry Callebaut significant growth opportunities.

Thesuccess of our Chocolate Academy in Chicago continued. Our staffofprofession- al chefs and technical advisers conducted formal training courses for artisans,pastry chefs and other professional users,providing aforum to improve their skills and techniques while informing them of the latest chocolate-making trends.

The Food Manufacturers Products business volume grew by double-digits,driven by large keyaccounts,leading to an overall gain in market share. Barry Callebaut’sstrong global presence enabled us to win further business volume with customers based in Region Americas who werelooking to Barry Callebaut to meet their worldwide needs, of which our recently announced deal with Kraft Foods Inc.isagood example.In addition to base-business growth, our corporate innovations continue to drive specialties sales,strengthening our overall image as aleader in the cocoa and chocolate industry.One new launch this year was our ACTICOA™ chocolate,which provides high cocoa flavanol products for health-conscious consumers.

Over the period under review,the North American food service market served by our Gourmetteamexperienced an only modest recovery from the economic crisis in terms of overallvolume. However,the Gourmet &Specialties Products business clearly outperformed general economic trends thanks to substantial growth in higher-end import brands such as Callebaut and Cacao Barry.Moving forward, we areexpanding our Gourmet &Specialties business in Latin America with acombination of local brands and Callebaut and Cacao Barry imports.

Key ﬁgures forRegion Americas

Change % Ùèèz/×è ÙèèR/èz* in local in reporting currencies currency

Sales volume Tonnes ×ð.F% Ùz×,]zz ÙðÙ,×ðz Sales revenue CHFm ×ð.h% ×è.R% zzR.Ù zè×.× EBITDACHF m h.è% h.×% ×èR.× ×èè.z EBIT CHFm F.]% h.Ù% zÙ.ð RF.] *Restated figures due to first-time application of IFRS 8. ReportbyRegions 27 Asia-Pacific Asia-Pacific – Astrong growth storycontinues

Additional information: www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet “The general growth dynamics in Asia did not translate into higher chocolate consumption in all markets in fiscal year 2009/10: While some chocolate markets such as China, India, Indonesia and Malaysia showed significant growth, Japan – one of the major markets – was flat. Throughout the region, the market for compound is still growing faster than for chocolate. However, our Gourmet business will continue to benefitfrom demand for high-quality chocolate as more companies upgrade from compound to chocolate and from further expansion in the HORECA (hotels, restaurants, catering) sector.”

In 2009 economic growth rates in Asia-Pacificweremixed, ranging from aGDP decline of 5.2% in Japan to an impressively resilient growth rate of around 9% for China. In 2010, GDP growth in the region is expected to range between 4.5% and 9.5%.1 Theregional chocolate confectionery market grew by 4.0%,2 much faster than the global market, and we expect it to keep growing at the same pace.The launch of several innovative products such as rebalanced and ACTICOA™ chocolate strengthened our position in Asia-Pacificasinnovation leader.

In Region Asia-Pacific, Barry Callebaut increased its sales volume by 15.5% to 47,984 tonnes. Sales revenue went up by 23.2% in local currencies (+21.4% in CHF) and came in at CHF 211.1 million. Keydrivers for this strong growth wereahigher demand for qualitychocolate,including the company’simported European Gourmet products,and marketsharegains.Due to the disposal of the Asian consumer business in the previous fiscal year, operating profit(EBIT) decreased by 27.4% in local currencies (–28.4% in CHF) and amounted to CHF 20.9 million. Without this one-offeffect, EBIT grew 87.6% in local currencies (+85.0% in CHF).

Thevolumes in our Food Manufacturers business grew at double-digit rate.InChina, the economy is booming and so is the chocolate confectionery market, growing on average at 8.2%.2 Both our multinational as well as local customers showed avery good performance.The other main growth markets wereKorea, Malaysia and Australia.

In our Gourmet &Specialties Products business,wesaw strong demand for both European brands as well as for the local brands – both showed double-digit growth in almost every market.

1 Source: The World Bank,summer 2010 2 Source: Nielsen,September 2009–August 2010

Key ﬁgures forRegion Asia-Paciﬁc

Change% Ùèèz/×è ÙèèR/èz* in local in reporting currencies currency

Sales volume Tonnes ×ð.ð% Ùh,zRÙÙ×,ðÙÙ Sales revenue CHFm Ù].Ù% Ù×.Ù% Ù××.××h].z EBITDACHF m (ÙF.]%) (Ùh.ð%) ÙF.Ù ]F.× Maurizio Decio EBIT CHFm (Ùh.Ù%)× (ÙR.Ù%)× Ùè.z Ùz.Ù PresidentAsia-Pacific *Restated figures due to first-time application of IFRS 8. 1 +87.6% in local currencies (+85.0% in CHF) excluding the one-off gain on the sale of the Asian Consumer business in the prior year. Natascha Schwarzer, Master PastryChef,Chocolate AcademyZurich,Switzerland: “When Icreated this dessert, Iwas thinking about howthe differenttextures, flavors and colors Iwas putting together would blend and complementeach other,enhancing the final product; Iwas also thinking about the people who would actually be enjoying my composition.I’m hoping the patrons ordering this dessertare filled with eager anticipation and Iamdefinitely aiming fora‘wow’ effectwhen it is served.”

30 Global Sourcing &Cocoa Global Sourcing &Cocoa – Creating value through our core ingredients

“With our strong presence in cocoaorigin countries,wehavedirectaccess to our main rawmaterial: high-quality cocoabeans.Asinthe previous fiscal year,wesaw volatile cocoamarkets and newhistorical highs driven by fears of apoor crop and heavy specula- tivebuying.Having the adequate tools and teams in place,wedealt very well with this challenging situation.Interest in organic cocoaleveled off but demand from customers switching to certified products such as Rainforest Alliance,UTZ Certified or Fair Trade increased considerably.”

Theglobally managed Global Sourcing &Cocoa business is now reported as aseparate operating segment likeaRegion. On the one hand, the segment is responsible for the global procurement of our high-quality rawmaterials such as cocoa, sugar,dairy products,oils,fats,nuts and other ingredients as well as packaging material. On the other hand, Global Sourcing &Cocoa is the global cocoa production unit for semi- finished products such as cocoa liquor,cocoa butter and cocoa powder.Wesell about half of these products to our industrial customers,who use them in their products,and the other half is for our own use.

Global Sourcing &Cocoa strongly increased the volume of cocoa products sold to third-party customers by 8.2% to 212,886 tonnes.North and South America were the top performers,with both showing double-digit growth. Sales revenue came in at CHF 962.5million – asignificant increase in localcurrencies of 29.9%(+28.5% in CHF) – due to both higher cocoabean prices and higher volumes. Operatingprofit (EBIT) grew by 5.4% in local currencies (+3.9% in CHF) to CHF 54.5 million, positively influenced by the good management of our butter and powder activities.

Managing the volatile rawmaterial markets Cocoa prices werevery volatile this fiscal year.Jumping aggressively in the initial months,the terminal market price for cocoa in London reached a33-year high in July but then fell back to close at GBP 1,954 per tonne on August 31, 2010, around last year’s level. Themarkets wereconcerned about the size of the 2009/10 crop in Ivory Coast and Ghana, accountable for over 50% of the world’scocoa production.These concerns did not materialize and therewas even asmall surplus.The quality of this year’scrop was relatively good and did not significantly deviate from the 2008/09 crop.Thereis strong evidence that the crop in Ivory Coast will grow during the coming year and that the world crop for 2010/11 will close with asurplus.

Since rawmaterials account for about 70% of our costs,their market prices represent one of the major risks in our corebusiness.Barry Callebaut navigated its waythrough the volatile cocoa markets quite well and limited its exposuretoprice fluctuations by applying avariety of sourcing strategies and risk management tools,such as vendor assessment, price hedging through cocoa derivatives,futures and physical forward contracts as well as arbitrage management. Using aHistorical Value at Risk Engine Model, we also kept our overall financial risk exposuretocommodity price risks within the limits defined by the BoardofDirectors.

Steven Retzlaﬀ PresidentGlobal Sourcing &Cocoa Global Sourcing &Cocoa 31

Additional information: www.barry-callebaut.com/cocoa-to-chocolate and www.barry-callebaut.com/csr and www.qualitypartnerprogram.com Moving up the cocoasupply chain Barry Callebaut does not own any cocoa farms but it has intensified its efforts to move closer to the farmer.Direct sourcing puts us in the best position to control the quality of our beans.Itisour goal to move upstream in the cocoa supply chain and further increase the proportion of directly sourced cocoa. With our Quality Partner Program (QPP), for example,wenow work directly with 48 cooperatives representing some 40,000 cocoa farmers in Ivory Coast, the largest cocoa-producing country in the world. Since we started the program in 2005, we have morethan tripled the beans sourced from QPP cooperatives and this growth will accelerate in the coming fiscal year.In August 2010, we launched QPP in Cameroon. Another example is Biolands in Tanza- nia. Since 2008, we have held a49% stakeinthe company,one of the largest produc- ers of certified organic cocoa in Africa. Barry Callebaut has supported the expansion of Biolands’ farmer-centric model to SierraLeone.Biolands has registered several thousands of farmers under its direct sourcing model. During fiscal year 2009/10, Barry Callebaut directly sourced 65% of its cocoa beans from cooperatives,intermediaries and government bodies in the cocoa origin countries.

Powder and butter prices challenging forpressing margins We sawhigh demand for cocoa powder since the market segments using cocoa powder as an ingredient – mainly the bakery,ice cream and beverage industries – did not suffer as much from the global economic crisis as the chocolate confectionery market, wherecocoa butter is used to agreat extent. Duetothe stagnation in the global chocolate market, cocoa butter stocks further increased. As aresult, the combined cocoa ratio1 was under pressurebecause the high cocoa powder prices could not compensate or the low cocoa butter prices.The combined cocoa ratio showed arecent improvement but it is too early to saywhether this will last.

1 The (forward)combined cocoaratio is the combined sales price forcocoa butter and cocoapowder relativetothe cocoabean price.

Combined cocoaratio Key ﬁgures forGlobal Sourcing &Cocoa Factor × terminal market price 6-months forward Change% Ùèèz/×è ÙèèR/èz*

].z in local in reporting currencies currency ].h

].ð Sales volume Tonnes R.Ù% Ù×Ù,RRF ×zF,RèR ].] Sales revenue CHFm Ùz.z% ÙR.ð% zFÙ.ð hÙR.z

].× EBITDACHF m ð.R% ].F% hð.Ù hÙ.F

Ù.z EBIT CHFm ð.Ù% ].z%ðÙ.ð ðÙ.ð *Restated ﬁgures due to ﬁrst-time application of IFRS 8. Ù.h

Ù.ð Sept.èð èF èh èR èz ×è 32 CorporateSocial Responsibility Sharpening our focus,stepping up our commitment

Additional information: www.barry-callebaut.com/csr and www.qualitypartnerprogram.com “CorporateSocial Responsibility (CSR) or sustainability goes beyond making aprofit. It requires abalancebetween social, environmental and economic goals – or People, Planet,Profit. In alignmentwith our strategyand business objectives,our Executive Committee (ExCo) has made the strategic choice to focus on three spheres of activity: Cocoa, Environmentand Employees.Toensuremeasurable progress,the ExCo has defined so-called ‘signatureprograms’ foreach sphereand named an ExCo member to serve as each program’s champion.”

Cocoa – Empowering cocoafarmers to increase incomes and improvefamily livelihoods Cocoa is atypical product of the tropics and very labor-intensive: About 4.5 million smallholder cocoa farmers in about 30 countries situated around the equator produce morethan 3.5 million tonnes of cocoa every year.Without cocoa, thereisnochocolate. Therefore, helping to ensuresustainability in the cocoa sector is an imperative for us. This is why we work with cocoa farmers to improve crop yields and quality,thereby enhancing farmer incomes and improving family livelihoods.Itisawin-win business partnership: farmers can earn moreand improve their livelihoods through higher yields and better quality; we benefitbyhaving sufficient quantities of quality cocoa to meet our ambitious growth strategy; and consumers benefitfromsustainably produced chocolate.Improving farmer livelihoods is keyinthe fight against poverty; poverty is the main reason for unfair labor practices,including abusive child labor.Ensuring responsible labor practices is amajor concern of our industry and consumers worldwide.

SignatureProgram: Quality Partner Program (QPP) in IvoryCoast and Cameroon ExCo program champion: JuergenSteinemann,CEO

Environment – Conserving energy to reduceour impactonthe environment We shareone planet, and need to makewise use of its natural resources.Processing cocoa and making chocolate is energy-intensive and requires alot of transport. As aresponsible company,weneed to do our part to reduce overall energy consumption in our factories and facilities,reduce our carbon emissions and increase our use of “green” energy.

SignatureProgram: Energy management ExCo program champion: Dirk Poelman,Chief Operating Oﬃcer

GabyTschofen Vice PresidentCorporateCommunications &CSR CorporateSocial Responsibility 33

Employees – Developing our people to help our companycontinue to prosper and grow It is our people who makeBarry Callebaut competitive and successful. It is in our interest to give all our employees achance to realize their full potential by offering development and training opportunities and providing regular feedback on their performance.While we want to continue to attract talented people from the outside to gain new ideas,weare committed to developing moreofour futureleaders from within.

SignatureProgram: PerformanceManagement&DevelopmentProgram PMDP ExCo program champion: David S. Johnson,CEO and PresidentAmericas

As the heart and engine of the chocolate industry,weare committed to taking the lead in empoweringcocoa farmers to become moreproductive, in becoming as energy- efficient as possible as acompany,and in developing our people.This CSR roadmap will guide our actions so we can continue to grow responsibly.

Assuming responsibility – also in industrypartnerships As amemberofthe World Cocoa Foundation (WCF), we help fund research and developmentprogramsthat benefitfarmers in the cocoa-growing regions of Africa, SoutheastAsiaand theAmericas. We also support the Sustainable Tree Crops Program (STCP).Since 2000,STCP has been working to improve the economic and social well- being of tree crop farmers in West and Central Africa and the environmental sustainability of their agricultural systems.Barry Callebaut also joined with the World Cocoa Foundation and the Bill &Melinda Gates Foundation to improve the livelihoods of cocoa-farming households in Ivory Coast, Ghana, Nigeria, Cameroon and Liberia.

The keyelements of our CorporateSocial Responsibility (CSR) roadmap:

QPP – Qualitycocoa Committed to minimizing Employeedevelopment forabetter life the environmental impact BarryCallebaut is afascinating com- Our Quality Partner Program (QPP) BarryCallebaut strives to be as ener- panytowork for: Globally activeand workstoenable cocoafarmers to gy-efficientaspossible by conserving making adelicious producteverybody improvethe quality of their farms so energy,reducing carbon emissions likes – chocolate.Wewanttoengage theycan produce moreand better- and using more “green” energy.We our employees in contributing to our quality beans and therebyincrease seek to continuously improvethe company’shigh performance stan- their incomes and improvetheir live- performance in everyplant, create dards and offer developmentoppor- lihoods.Today, we work with 48 coop- awareness amongst our employees tunities to gain the necessaryskills eratives representing some 40,000 regarding our environmental foot- and experiences fortoday’sbusiness cocoafarmers in IvoryCoast.Our QPP printand comply with all relevant challenges,but also to prepareour targets are: laws,rules and regulations in the futureleaders.Our employeetargets countries whereweoperate. The tar- are: – Increase the number of QPP gets we want to reach by 2013: member cooperatives,aswell – 100% completion rate of as the volume and the quality – 20% reduction of energy Performance Management& of the beans theyharvest consumption per tonne DevelopmentProcess (PMDP) formanagementpositions by – Every QPP cooperativehas a – 20% reduction of carbon December 31, 2010 farmer field school by 2014 emissions per tonne – Filling 70%ofkey positions from – Every QPP cooperativehas its – 20% of energy to come from within ownnurseryinplace by 2015 renewable sources Abhiru Biswas, Master PastryChef,Chocolate AcademyMumbai, India: “Iwas inspired by aclass called ‘CreativeArt on the Plate’ during training at Hotel School. Ialso watched online demonstrations by French pastrychefswho had acquired the title of ‘Meilleur Ouvrier de France’ and Iadmired their skills.Myown passion wasenhanced by the expertise of these distinguished French pastrychefs, and Inow trytofuse French and Indian Patisserie.”

36 Operations &Supply Chain OSCO Expanding our footprintand increasing our operational eﬃciency

Additional information: www.barry-callebaut.com/quality “BarryCallebaut’s factorynetwork currently consists of 43 factories.Weextended our factorybase during this ﬁscal year in order to close some geographical gaps as well as to access new, emerging markets: The inauguration of our Brazilian chocolate factory in Extrema in May2010 puts us in abetter position to unlock the attractivegrowth potential of the South American chocolate market.Focused continuous improvement initiatives contributed to an increase in overall eﬃciency and areduction in manufacturing costs per tonne.”

In addition to building our firstchocolate factoryinSouth America, we increasedthe capacity of some of ourexisting plants: Forinstance,weadded aliquid chocolate line in Pennsauken, U.S.,aswell as in Lodz, Poland, and installed adrops line in Singapore.

In the course of this fiscal year,Barry Callebaut invested atotal of CHF 119.3 million in the extension, maintenance as well as optimization of the factory base.Byspeeding up our efficiency, we wereable to reduce manufacturing costs per tonne of activity by 5%1 in this fiscal year.

In ordertomakeour continuous improvement process moreeffective,webegan aproj- ectwithanexternalspecialisttoincreaseBarry Callebaut’smanufacturing efficiency and introduce standardized and uniformly structured work processes.This project is nowunderwayatselected pilot plants in each region. During the implementation, ateamoflocal Barry Callebaut employees at each site is being trained that will later implement this new wayofworking at the other plants in their region.

Four focus areas of our continuous improvementprogram First, Barry Callebaut is taking action to ensurethe continuous improvement of its quality standards.All our factories worldwide must fulfill BRCstandards by the end of 2011 – BRCstands for British Retail Consortium and is one of the five food safety standards recognized by the Global Food Safety Initiative,aplatform that regroups global retailers and alarge number of food manufacturers.Today, 60% of our factories have already achieved BRCGrade Acertification.Themajority of them arelocated in Europe.

1 In local currencies

Dirk Poelman Chief Operations Oﬃcer Operations &Supply Chain 37 OSCO

Rawmaterials represent about 70% of our total costs.Therefore, secondly,wehave initiatedspecial projects in the main regions in order to optimize the use of these materialsand to reduce waste.

Athirdfocus area of continuous improvement is energy and the reduction of carbon emissions: Processing cocoa and making chocolate is energy-intensive.Asaresponsible company,weaim to reduce Barry Callebaut’senergy consumption and increase our use of renewable energy.This will reduce overall carbon emissions originating from our activities.Three main targets weredefined, to be realized by the end of fiscal year 2013: 20% reduction of energy consumption per tonne 20% reduction of carbon emissions per tonne 20% of energy to come from renewable sources

With a4%reduction in our overall energy use per tonne at the end of year one,weare slightly behind our target of 5% yearly savings.However,since some of the energy efficiencyimprovements werenot realized until the second half of the year,weexpect to catch up in meeting our target in the coming months.This fiscal year,wewereable to reduce our carbon emissions by 4% per tonne,mainly from the reduction of energy consumption. By increasing the shareofrenewable energy sources,wewill be able to speed up the reduction in carbon emissions and reach our 4-year goals.For instance, we arealready using cocoa shells to produce steam. To extend this,weare optimizing the efficiencyofour shell burners,review the possibilities to extend our capacity to produce steam based on this bio mass and we aresetting up atest plant for the production of bio gas,based on the fermentation of cocoa shells.This will be tested in San PedroinIvory Coast.

The maintenance management system – our fourth focus area – which we began to implement this fiscal year,has already been rolled out at 12 sites in the Group.This tool will also allow us to improve the purchasing of our spareparts through volume pool- ing in the different regions.Compared to last year,wewereable to reduce our total maintenance costs by 4% per tonne.

Reducing energy Significantoutput Optimizing transport flows consumption and costs improvementinCameroon With the acquisition of the Chocovic with newtechnology We implemented aprojectinour fac- chocolatefactory,customers who had BarryCallebaut routinely invests in tory in Douala, Cameroon,toenhance previously been supplied from Bel- newtechnologytoreduce its energy productquality and output volume.It gium and France can nowbeserved needs.During this fiscal year,our led to anumber of improvements: The from Spain.This has reduced average team of process engineers success- implementation of preventivemain- transportdistances by 700kmper fully developed atotally newtech- tenance and operating procedures, tonne,improved service levels thanks nologyfor breaking cocoabeans that the upgrade and tuning of existing to reduced lead times – and produced can reduce the yearly gasconsump- factoryequipmentaswell as techni- 160 tonnes of CO2 emission savings. tion of asingle liquor-making line by cal training to increase knowledgeat Replacing conventional road trans- 1,830megawatt hours or an equiva- staff and operator level. Thankstothis portwith intermodal solutions – com- lentof340 tonnesofCO2.This appli- project, we were already able to in- bining road, rail and waterway net- cation has alreadybeensuccessfully crease output by 20% versus prior works – reduced the cost per km for introduced at our cocoafactory in year.Inaddition,new investments long distances and also enabled us Louviers,France,and the global roll- were recommended, which will be put to put in place moreenvironmentally out is planned forall our cocoafacto- in place in fiscal year 2010/11. friendly flows. ries over the next twoyears. 38 Customers and Business Units BarryCallebaut and its customers – Partnering forsuccess

Additional information: www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet and www.barry-callebaut.com/consumers BarryCallebaut worksinclose partnership with its approximately 6,000 industrial customers and tens of thousands of artisanal customers worldwide.Our ability to produceacomprehensiveand unique rangeofspecially tailored products – manufac- tured from almost 2,000 recipes – thatmeet our customers’ speciﬁcations truly sets us apartfromthe competition.

Of thelarge number of projects we hadthe pleasuretoconclude with our customers during this fiscal year,wewould liketohighlight some examples in each of the different product groups:

Food Manufacturers Products: Barry Callebaut’srole as chocolate supplier to the world-renowned Belgian chocolate makers Godiva, Guylian and Neuhaus during the World Expo in Shanghai from May until October 2010 generated much attention – both from customers and the media. Every day, 30,000 visitors at the Belgian pavilion weredelighted by the exquisite chocolate creations of Belgian artisanal chocolatiers.

Gourmet &Specialties Products: Hotel Chocolate is one of the fastest growing chocolate retail businesses in Europe and the world. Ever since it was founded 15 years ago,ithas been brazenly committed to bringing quality and innovation to the high street and is now present in the U.K., the U.S. and the Middle East. Barry Callebaut is proud to be Hotel Chocolate’s key supplier,fuelling its growth and helping it overcome many challenges from the supply chain to product development, in particular their change from solid to liquid supply.

Consumer Products: Käfer is an internationally acclaimed brand of premium products for connoisseurs and gourmets all over the world. Stollwerck is proud to be the sole licensee of the entire line of Käfer chocolate.Together with Käfer,itdeveloped an exquisite portfolio of pralines and truffles that is now being launched in the German food retail sector. Presented in an especially designed display, it enables retailers to expand their gourmet expertise and enhance their offering on the premium confectionery shelf. Customers and Business Units 39

We put customers first, which is why we arevery proud to serve some of the best-known names in the food industry:

ChocolatFrey(Switzerland) “Asthe No.1producer in the Swiss chocolate market, we don’t view Barry Callebaut as aconventional supplier but rather as abusiness partner – whichisalso whywedecided to become involved in Barry Callebaut’sQuality Partner Program. With this program, Barry Callebaut gives us precise information on the origin of the beans and we can be assured that the farmers receive afair price.”

Cacao Fine Chocolates (Australia) “Undoubtedly, Barry Callebaut is our preferred supplier of premium chocolate.With its Australian and international support team, we never have to go far for assistance and knowledge.The relationship between Barry Callebaut and us has been built on amutual understanding of the importance of quality and service,two priorities that very muchgohand in hand.”

J.CO Donuts &Coﬀee (Singapore) “Barry Callebautdeliversthe finest of their premium quality products with aconsistency that we can alwaystrust while providing excellent customer service for its clientele.Weare proud to have Barry Callebaut as our supplier.”

Magnat100% chocolate (Russia) “Asthe leading,most indulgent brand in the Russian ice cream market, we searched the world for the best chocolate for our ice cream. OnlyBarry Callebaut chocolate wasable to satisfy our needs and the tastes of Russian ice cream lovers.Barry Callebaut is our strategic and most valuable partner.”

To serve our customers most eﬀectively,BarryCallebaut is organized by region.Thereare four diﬀerentproductgroups: CocoaProducts,Food Manufacturers Products,Gourmet &Specialties Products and Consumer Products.

Business Segment Industrial Business Food Service/Retail Business

CocoaProducts Food Manufacturers Gourmet & Consumer Products ProductGroup Products Specialties Products

Activity Processing cocoaintosemi- Providing chocolate to Providing chocolate prod- Supplying global retailers finished goods thatare multinational and national ucts thatare specifically with privatelabel and partly sold to industrial branded consumer goods designed forartisanal and branded products.Inorder customers and partly used manufacturers who incor- professional users such to help bring innovations to forin-house needs. poratethese ingredients as chocolatiers,bakers and the market,BarryCallebaut in their consumer products. pastrychefsaswell as for also has its ownlocal con- the Food Service industry, sumer brands: Sarotti (Ger- which includes restaurants, many), Jacques (Belgium) in-storebakeries,caterers, and Alprose (Switzerland). hotels and canteens. Jérôme Landrieu, Master PastryChef,Chocolate AcademyChicago, Illinois,U.S.: “Isometimes feel thatchefslose sightofthe end consumer when making their chocolate creations.Itwas thereforeclear to me and my team thatwealso needed to offer non- professional-levelclasses to teach consumers about our premium chocolates.Local grocery stores and markets arenow carrying our Callebaut products,and we areoffering consumers courses to develop and refine their palates.”

42 Innovation Detecting trends and developing winning products forour customers

Additional information: www.barry-callebaut.com/innovation “At BarryCallebaut,wehavededicated innovation teams proactively developing and oﬀering innovativeproducts in response to emerging consumer trends.Thereare also regional Research &Development(R&D)teams thatfocus on the requests and inquiries of our severalthousand customers worldwide,addressing their needs as rapidly as possible.Wecall these applied R&D teams.Intotal, our R&D department manages about 1,750projects ayear and runs almost 7,600 trials in their quest forsuccess.Furthermore, we conductmorethan 400 technical visits to instructour customers on howtouse our products moreeﬃciently.”

Barry Callebaut is the only global cocoa and chocolate manufacturer with an integrated R&D network. We operate 15 R&D centers worldwide,whereweconduct applied R&D for our customers.The innovation and applied R&D teams use 14 pilot facilities and 15 application labs to conduct small-scale test runs producing high-quality cocoa and chocolate products,tomakeend applications,and to improve products and recipes for our customers and their production processes.

Keymarket trends thatdriveour R&D eﬀorts We expect cocoa rawmaterial prices to rise in the coming years.Because of this,we have to find new ways to manufactureproducts with the same quality,but at lower costs. Many of our customers areincreasingly moving towards cost-efficient product solutions and we see agrowing interest in compounds and fillings,wherewealready have thebroadestassortmentofproductsinthe industryfor everypossibleapplication. On the other hand, indulgence remains the best rationale for premium chocolate products.That is why we also notice that many of our keycustomers arefocusing on the development of “premium-praline-type” products with multiple ingredients for sale in mass retail. With our broad specialty assortment as well as our capabilities in fillings, inclusions,new textureelements and decorations,weare well positioned to successfully support our customers.

Although chocolate is the ultimate comfort food, consumers areinterested in health- ier alternatives to standardchocolate: Moreand more, they arechoosing products that arefreefromallergens or that have “cleaner labels”–likegluten-free,lactose-free,and without artificial colors and aromas.Alternatives also include chocolates with higher levels of cocoa flavanols or functional ingredients.Increasing obesity levels arean acknowledged health issue worldwide.Barry Callebaut needs to actively develop indulgent chocolate alternatives containing fewer calories,less fat and less sugar – we call these applications “rebalanced”.This fiscal year,weconducted morethan 200customer projects in this area.

Hans Vriens Chief Innovation Oﬃcer Innovation 43

Controlled Fermentation – Reinventing premium chocolate from the ground up Over the past few years,Barry Callebaut worked intensively on enhancing cocoa fermentation.This year,weintroduced arevolutionary new method under the banner of Controlled Fermentation aimed at producing chocolate with even moreauthentic and intense cocoa flavors.Through patented, unique fermentation techniques,Barry Callebaut manages to yield superior cocoa quality.Cocoa beans produced by Con- trolled Fermentation have afruitier,moreintense flavor pallet, can be tailored to deliver exclusive tastes – at customers’ requests – and can also have ahigher concentration of healthy,functional components such as cocoa flavanols.This new fermentation method also brings advantages to cocoa farmers themselves since better quality leads to lower rejection rates from bean processors and thus higher income for farmers.

Barry Callebaut has implemented the Controlled Fermentation process in anumber of plantations across Africa as part of our Quality Partner Program and our collabora- tionwithBiolands.Barry Callebaut also signed aMemorandum of Understanding withthe Malaysian Cocoa Board: Controlled Fermentation will allow us to match the taste of Indonesian cocoa with the taste of West African cocoa since many consumers in Europe and North America areused to the flavor of West African cocoa.

Further expanding our R&D resources We added four new pilot lines and application laboratories this year.Besides the new facilities in Extrema (Brazil), Port Klang (Malaysia) and Osaka (Japan), we opened anew cocoa-processing pilot line and an application laboratory in Louviers (France), making Barry Callebaut the only company worldwide to operate these facilities side by side.This gives us the possibility to create new prototypes and innovations for our customers,ranging from the processing of the cocoa beans to the finished chocolate.

We areveryproud to have launched severalmajor productinnovations exclusively for three Gourmet customers during the ﬁscal year:

Dairy-free alternativeto Premium chocolate for First chocolate sweetened milk chocolate premium confectioners with Stevia extract BarryCallebaut found an ideal part- The renowned Dutch premium choco- Stevia, aplantnativetosubtropical ner in Celtic Chocolates,one of late specialist Visser Chocolade is and tropical regions,iswidely known Ireland’sleading chocolatiers and BarryCallebaut’s first customer for forits sweet leaves, which can be used providers of gourmet chocolate for chocolate made with cocoabeans as anatural sugar substitute.Barry people with allergies and food in- especially treated with the com- Callebaut has been the first to launch tolerances,todevelop and launch a pany’sunique Controlled Fermenta- chocolate sweetened with Stevia 100% dairy-free alternativetomilk tion method. Chocolate made from extractwithout alaxativeeffecton chocolate.Itisthe perfect solution these specially cured cocoabeans is an industrial scale – aunique selling foradults and children with amilk the ideal ingredientfor demanding proposition. BarryCallebaut launched allergy or lactose intolerance who chocolate professionals likeVisser thechocolate exclusively with Cava- were unable to indulgeinmilk choc- Chocolade.The unique chocolate also lier,arenowned family-owned com- olate beforeaswell as forthe in- offers anew look forpremium choco- panyinBelgium thathas exclusively creasing number of people with food late,whereevendark,cocoa-rich produced chocolate products with no intolerances. chocolate has alighter color likemilk addedsugar since1996. chocolate. Marcin Pazdzior,Master PastryChef,Chocolate AcademyLodz, Poland: “Igraduated from the CulinarySchool in my hometownWroclaw, Poland; then Iacquired professional expertise in one of the best pastryshops and hotels in town. In the courses Iteach for our artisanal customers,Itry to emphasizethatthe most importantfactorwhen working with chocolate is devotion.Devotion alwaysleads to success.”

46 Employees Shaping careers and growing futureleaders

Additional information: www.barry-callebaut.com/careers and www.barry-callebaut.com/learning “BarryCallebaut’s business environmentconstantly demands higher performance. The most importantresource in making performance happen is our employees. As acompany, we want to help them to be prepared forthe increasing responsibilities thatare required of them as our business continues to grow.Thatiswhy we strengthened the currentperformance managementprocess by creating the newPerformance Management&DevelopmentProcess (PMDP), which gives us greater strategic control of our personnel developmentactivities and also servesasapowerful instrumentfor succession planning.”

It is ouremployees whomakeBarry Callebaut successful. To achieve our ambitious business goals,weneed to define clear targets for each employee and preparethem for the futurechallenges in our demanding business environment. With the new PMDP, we have developed abusiness tool that helps to align the efforts and targets of individuals with the strategic priorities and goals of our company.Westrongly believe that offering excellent personal development and career opportunities is the fuel for our futuresuccess.That is why the PMDP emphasizes the personal development and career aspirations of our bonus-eligible employees.Inaddition, it helps each employee to understand how his or her job fits within the broader mission of Barry Callebaut and how success is ultimately defined.

An importanttool forpersonal developmentand… ThePMDP is abusiness steering instrument for Barry Callebaut. It is closely tied to the business planning cycle and the company’soverall targets.Asoffiscal year 2010/11, the PMDP is initiated at the beginning of each fiscal year with aperformance review meeting between managers and employees.Inthis discussion, employee performance is assessed and the relevant targets for the new fiscal year aredefined.

Acentral aspect of the newly introduced PMDP is adiscussion of the employees’ development. Together with their manager,employees identify their talents,experiences and skills in order to determine appropriate development actions,including internal and external training.Targeted employee development supports our high-performance cultureand helps to determine what steps aretobetaken next in individual career planning.

…BarryCallebaut’s succession planning ThePMDP will also playanimportant role in Barry Callebaut’ssuccession planning as this input enables us to detect our high performing leaders.AtBarry Callebaut, we aim to grow the majority of our leaders from within. ThePMDP will support us in identifying and promoting outstanding people for management positions from within the company.

BarbaraBecker Head of Global Human Resources Employees 47

Additional information: www.barry-callebaut.com/trainees Yourfuture@BC: Starting achallenging career with the global market leader Barry Callebaut recently repositioned its trainee program [email protected] program offers talented university graduates the opportunity to workindifferent positions within Barry Callebaut in order to acquirebusiness knowhow and to prepare them for challenging international careers as functional specialists.Itisdivided into two to three assignments.Participants areoffered the opportunity to work abroad and in several positions within one of our five functional areas: Sales &Marketing,Finance &Controlling,Sourcing,Innovations and Operations.Yourfuture@BC also offers ex- cellentdevelopment opportunitiesthrough training coursesand feedback sessions with apersonal coach and amentor.

Twoformer trainees talk about the experience they gained in their specific field and what their next career steps after program completion will be:

Maa Adoma Addae-Afoakwa, Graduate Trainee,Ghana “Inever thought Iwould cut cocoa beans myself! Being in the program has helped me alot to understand Barry Callebaut’sbusiness – from the said cocoa beans to the finished product on retail shelves.While working in different countries likeGhana, Ivory Coast, France and the U.K., Ialso gained lots of insights with respect to the different cultures.Iam now looking forwardtocontinu- ing my career within Barry Callebaut in the area of project implementation in my home country Ghana.”

Frédéric De Wolf,Graduate Trainee,BarryCallebaut Belgium “Inow have avery good idea of how our company is organized. Theprogram also helped me to further develop my career visions.Inthe coming years,Iplan to focusonbuilding my commercial skills and becomingmorefamiliarwith our products from an applicationpoint of viewbyunderstanding our customers and markets better – whichIwill do in my new functionasProduct Manager for our Food Manufacturers business in Eastern Europe.Ithink this is an ideal starting point.”

Number of employees Number of employees Average seniority per geographic region per function in years

R% ×Ù% Europe +è.¹ h% Americas ê./ Asia-Pacific Æ.ë Africa 1.¹ ×z% ÙR% Personnel expenses Fè% in CHFmillion FF% ëë//²ë Ðêê.Æ ëëê/ë/ Ðê/.( ëë#/ëê Æ ë.¥ Europe Ð,/Æ/ Management / ( Americas +,k- Office staff ,ë/Ð Asia-Pacific k1- Factorystaff Ù,¹èO Africa è!

Number of employees: !,¹¹O 48 Employees ExcellenceAward 2010 – Rewarding peak performance

The Excellence Awardrecognizes managers and their teams who arewilling to gothe extramile,who areputting all their passion into their work and, thus,havemade apositiveimpactonthe companyinthe ﬁscal year.The sevenExcellence Award2010 winners were nominated by their Presidents.

Andthe winnersare:

BernardCastermant, PlantManager,Dijon – for successfully managing acomplex plant in difficult economic circumstances.

Alain Freymond, CocoaTrader,Zurich – for coming up with aspecificcocoa pricing solution that meets the expectationsofour customer Kraft and leverages Barry Calle- baut’sstrengths.

An Parrein,Manager Applied R&D Europe,Wieze – for implementing and bringing to market the complex project of certified cocoa and chocolate products with different internal and external stakeholders.

GabyTschofen, VP CorporateCommunications &CSR, Zurich – for having done an outstandingjob in developing Barry Callebaut’scommunications strategy and shaping the image and reputation of our company among our various stakeholders,both internal and external, in the past nine years.

Philippe Janvier,VicePresidentSales &Trade Marketing Gourmet Western Europe, Meulan – for successfullyturning around the Food Service business in Europe and thus increasing our Gourmet results.

Jean-Olivier Tasté,VicePresidentGlobal Accounts Food Manufacturers Europe, Wieze – for his remarkable contribution to the successful achievement of the global supply agreementwith Kraft.

Sarah O’Neil,DirectorofSales and Marketing CorporateAccounts Food Manufactur- ers North America, Chicago – for playing acritical supportrole in securing the Kraft deal, having alwaysbeen there with her knowledge and problem-solving skills.

The ExcellenceAward winners 2010 From left: BernardCastermant, Alain Freymond, An Parrein,GabyTschofen, Philippe Janvier,Jean-Olivier Tasté and Sarah O’Neil Employees 49 Chairman’s Award2010 Foroutstanding employeepersonalities

Additional information: www.barry-callebaut.com/awardand www.barry-callebaut.com/csr and www.barry-callebaut.com/codeofconduct The annual Chairman’s Awardrecognizes employees who have been with BarryCallebaut foranumber of years and have demonstrated outstanding performance at work,as well as astrong social commitmentintheir local communities.Theyare individuals who embody the BarryCallebaut values of customer focus,passion,entrepreneurship,team spirit and integrity.

TheChairman’s Awardwas inaugurated in 1995 by Klaus Jacobs,the former Chairman of Jacobs Holding AG and founder of Barry Callebaut. Since then, the Chairman’s Awardhas been given to aselected number of employees each year.

In 2010,fourteen Barry Callebaut employees from eleven countries received the award andwereinvited together with their spouses or partners to come to Switzerland to be given the awardbyChairman Andreas Jacobs and CEO Juergen Steinemann.

Customer focus.Passion.Entrepreneurship.Team spirit.Integrity.

Our companyvalues reﬂecthow we strivetointeractwith colleagues,with external business partners,with all our stakeholders. Theyreﬂecthow we believe business should be done – responsibly.Every BarryCallebaut employeeisanambassador of the company. We expectall employees to behave in ways that demonstrateour companyvalues and to showsocial responsibility and good citizenship in business dealings.The principles and guidelines forbehavior areset forthinour Code of Conduct.

The 2010 winners are: Back,fromleft: Christian Böcker (Sweden), JuergenSteinemann (CEO), Maciej Moritz (Poland), Rene Nkwamen (Cameroon), Hervé Raoul Koﬃ (IvoryCoast), Andreas Jacobs (Chairman), Michael Lohde (Germany), GeertBosteels (Belgium)

Front, from left: Esther Wälchli (Switzerland), Cristina Podico(Italy), Miriam Madrigal (U.S.), Elena Rossi (Italy), Ana Carolina BomﬁmSilva(Brazil), Anna Maria Lagrow (U.S.), Andrew Duong (U.S.). Not in the picture: Alicia Lim (Singapore)

Contents

52 Interviewwith the CFO 54 Financial Review 56 Consolidated Financial Statements 56 Consolidated Income Statement 57 Consolidated StatementofComprehensiveIncome 58 Consolidated BalanceSheet 59 Consolidated Cash FlowStatement 61 Consolidated StatementofChanges in Equity 62 SummaryofAccounting Policies 70 Notes to the Consolidated Financial Statements 113 Reportofthe StatutoryAuditor 114 5-Year Overview 52 KoIntenzrvernriewwechnungith the CFO The CFO’sview

QHow did BarryCallebaut managetoachieve double-digit net proﬁtgrowthdespite the relatively weak economic environment? Victor Balli Thekey is to generate top-line momentum and grow sales volumes much faster than the market. If we can continuously reduce manufacturing and logistics costs per tonne at the same time and keep overhead costs stable – both amajor focus of our company for years – we can create astrong basis for profitable growth.

QWith the leveloftop-line growth youhaveachieved, would it be possible to showaneven greateroperating leverage? VB If the Group continues to grow volumes at the current pace,itisdifficult to increase profits even faster.Weare constantly investing in new factories or expanding existing lines and operations.Asthe outsourcing partner of choice we cannot affordtomake any mistakes.Assuch we need to invest in quality and services as well. Over time, though, we should be able to further optimize current processes and achieve better leverage.

QHow do youmanagethe volatility of rawmaterial prices and other riskswithin the business? VB First of all, for about 80% of our sales we run abusiness model that allows us to pass on fluctuations in costs of rawmaterial prices to our customers.Wequote market prices to our customers and once we receive an order,wehedge the underlying rawmaterials needed. Similarly,weconstantly eliminate all transactional currencyexchange risks through our central treasury department. My risk department monitors commodity prices and currencyexposures on aregular basis using aValue at Risk (VaR) model.

QYour net ﬁnancial expenses aregoing down year by year.Will this continue? VB This fiscal year,webenefited from lower average interest rates,aflat net debt and our stable financing structure. This should continue for at least another year.While thereis no refinancing pressure, we constantly monitor the financial and capital markets to look forwindows of opportunitytofurther improveour capitalstructure andthe average term of our financing.

“Competitivefinancing and tax cost,focus on working capital plus daily management of risksare vital forour growth strategy.”

Victor Balli Chief Financial Oﬃcer KoIntenzrvernriewwechnungith the CFO5533

QFollowing areviewofBarryCallebaut’s annual accounts by SIX Swiss Exchange, youhave announced thatyou will modifythe company’saccounting model. Whateﬀectwill this have and when will it be applied? VB Thereview showed that thereare different expert views on how to best apply IFRSon our business model. While Barry Callebaut was cleared of all charges,wenonetheless decided to adapt aless controversial accounting model effective fiscal year 2010/11, in line with the Group’sstrategy of increased sourcing in the origin countries.Inthe new model, we will value inventories at the lower of cost and net realizable value.The cocoaprice risks related to inventories exceeding firm chocolate sales commitments will be hedged with cocoa futures in afair value hedge relationship.Iexpect the revised model to produce essentially the same result for the income statement as today.

QInformation Managementisalso under your responsibility.Whatcontribution did this departmentmaketothe overall Group? VB TheIT/IM department is an important pillar for the fast development of our business. Without the appropriate systems we would not be able to cope with the speed of our growth. Most of our factories and operations worldwide run on acommon SAPplat- form. This allows us to smoothly add new factories and create transparencyand trace- abilityalong theentiresupply chain.We have continuously increased IT/IM investments over thepastyears andtheynow runatabout CHF30million perannum;atthe same time,IToperating expenses werekept flat.

QWhatisyour main focus for ﬁscal year 2010/11? VB Besides achieving our guidance in terms of growth and profitability,wewill continue to closely monitor and reduce our working capital. At the same time,wewill try to simplify and centralize our support and overhead processes.Finally,securing long-term credit facilities at competitive terms,maintaining our attractive tax rate plus finding and keeping good talents areapermanent focus of my teams.

Newprogram “Capital Excellence” started In viewofour fast growth combined with the high volatility of rawmaterial prices,pressurefromcustomers paying later and attempts of suppliers to reduce credit terms,BarryCallebaut initiated aprogram called “Capital Excellence” this fiscal year.The objectiveistoreduce working capital by 20% over 3years on acomparable basis.The program is driven by financial controllers but operational business people arealso heavily involved. It is also partofthe bonus incentiveplan of most managers.Inthe first year,wemade good progress in inventoryand receivables managementwhile payables need further improvement. Specificactions and achievements a) Inventories (dayssales in inventory) Stocksweresignificantly reduced thankstoafocus on better planning and reviewofinventory levels needed. Therewas an overall reduction of 11.7daysofsales coverage. b) Receivables (dayssales outstanding) Averagedaysoutstanding were reduced by 1.4; therewas astrong focus on reducing overdues and optimizing the collection process including electronic invoicing/EDI. c) Payables (dayspayable outstanding,DPO) Despite asubstantial increase in awareness within our purchasing organization,weonly marginally improved DPOs. It wasdifficult to renegotiate existing contractsand paymentterms need to be benchmarked against potential increases in price.Weplan to introduce supply chain financing to improveour payable situation next year.

Overall “Capital Excellence” achieved apositiveimpactofCHF 114 million (or 11.3% of net working capital)onaverage over the past year,excluding ﬂuctuations of foreign exchangerates and rawmaterial prices. 54 KoFinancialnzernrechnungReview Financial Review

Consolidated Income Statement Other income in the amount of CHF 20.5 million was recorded Sales volume showed solid growth of 7. 6% from 1,213,610 tonnes to compared to CHF 34.4 million in prior year.Inboth years,this 1,305,280 tonnes,towhich all regions and both the Industrial and the position included operating but non-sales-related income items,such Food Service/Retail Products contributed. In the Food Service/ as gains on disposals of subsidiaries and assets,sales of waste pro- Retail Products,the growth recorded in Gourmet &Specialties Pro- ductsand income generated by the Group’sTraining Center,Schloss ducts morethan compensated for the decline in the Consumer Marbach. Prioryear’s figureincluded the gain on disposal of the Products business.The latter was affected by the disposal of our busi- Asian Consumer business. ness in Asia during the prior year.Additionally,therewas ashift of Other expenses amounted to CHF 16.6 million compared to volumes between the Product Groups (from Food Manufacturers to CHF 20.5 million in the prior year.This position comprises restruc- Consumer Products) due to restatements of prior year figures in line turing costs,litigation and severance payments,impairment charges with the segment reporting changes introduced in 2009/10. and losses on sales of property,plant and equipment and other non- Revenue from sales and services grew by 6.8% from CHF 4,880.2 recurring items. million to CHF 5,213.8 million. Thepositive impact of the high raw Operating profit (EBIT) increased by 5.6% to CHF 370.4 million, material prices,namely for cocoa, on revenue werelargely offset by compared to CHF 350.8 million in the prior year.Excluding the im- significant foreign currencytranslation effects.Adjusted for these pact from foreign currencytranslation, the EBIT growth amounted effects,revenues from sales and services grew by 6.5%, driven by the to 7. 9%.All regions and product groups made apositive contribution volume increase as pointed out above. to EBIT;also to EBIT growth all contributed except for Region Asia- Gross profit increased by 4.0% to CHF 736.2 million from Pacificand the Consumer Products Group,which benefited from the CHF 707.8 million in prior year.Gross profitwas negatively affected non-recurring gain on the sale of the Asian Consumer business in by translation effects and the low combined cocoa ratio throughout prior year. Thebiggest absolute contribution to EBIT came from the year but the volume growth, in particular the disproportionately Region Europe in terms of geography and from Food Manufacturers high growth of the higher margin Gourmet business,morethan com- in terms of product groups.The biggest contributions to EBIT growth pensated for these effects.Inlocal currencies,gross profitgrewby came from Region Europe and the Gourmet Product Group. 6.3%. EBIT per tonne receded slightly to CHF 283.8 from CHF 289.1 Gross profitinrelation to revenue from sales and services edged due to currencytranslation effects.The decline of EBIT per tonne down to 14.1% from 14.5% in the prior year.Gross profitper tonne in Global Sourcing &Cocoa (due to theeffects of thecombined receded slightly by 3.3% to CHF 564 from CHF 583 the year before. cocoa ratio development) and Asia (due to the non-recurring gain This is mainly due to translation effects as most currencies weakened on the sale of the Consumer business in prior year) werecompensa- against the Group’sreporting currency, the Swiss franc. ted for by ahigher EBIT per tonne in the other regions.This is the Marketing and sales expenses amounted to CHF 120.8 million, result of expenses growing at aslower rate than volume due to tight almost constant compared to prior year (CHF 120.3 million). Addi- cost control and scale effects on overhead costs.Inlocal currencies, tional costs coming from acquisitions and the growth in sales were EBIT per tonne edged up by 0.3%. partly compensated for by positive foreign currencyeffects and part- Financial income declined to CHF 2.0 million from CHF 5.9 mil- ly by cost-saving measures,without compromising on the Group’s lion in the preceding year as aresult of both lower interest income strategy to strengthen customer relationships. and the absenceofgains on derivative financial instruments thisyear. General and administration expenses decreased slightly to Financial expenses weresignificantly lower at CHF 83.1 million CHF 248.8 million from CHF 250.6 million.Theeffects from growth compared to CHF 97.5 million in the prior year.This decrease resul- and acquisitions wereoffset by cost savings and positive effects from ted mainly from lower average interest rates on the floating rate debt the currencytranslation. and currencytranslation effects,which, however,werepartly offset by losses on derivative financial instruments related to the hedging of interest rates. Result from investment in associates and joint ventures amounted to CHF –0.2 million compared to CHF 0.5 million in the year be- foreand contains the Group’sshareinequity movements of equity- accounted investees,i.e.participations in companies,over which the Group has significant influence but not control. KoFinancialnzernrechnungReview5555

Income taxes increased to CHF 37.3 million from CHF 32.7 mil- Consolidated Cash FlowStatement lion in prior year.This is mainly the result of ahigher profitbefore Operating cash flow beforeworking capital changes improved con- income taxes whereas the Group’seffective tax rate was almost considerably by 9.5% to CHF 457.8 million compared to CHF 418.1 mil- stant at 12.9% compared to 12.6% the year before. lion in the prior year. Net profitfor the year amounted to CHF 251.7 million, astrong Thecash outflow for working capital changes was significantly growth of 10.9% compared CHF 226.9 million in prior year.Inlocal higher mainly due to the higher cash outflow for inventories as are- currencies,the increase amounted to 13.5%. This is the result of the sult of the business growth and high rawmaterial prices,partly offset higher operating result and lower net financial expenses.Net profit by higher payables.Cash outflow for interest and taxes on the other for the year attributable to the shareholders of the parent company hand was lower than in prior year. amounted to CHF 251.2 million, compared to CHF 226.9 million in This resulted in an overall decline in the Net cash flow from the precedent year. operating activities (including working capital changes) to CHF 177. 7 Basic earnings per share increased by 10.5% to CHF 48.62, up million down from CHF 240.6 million the year before. from CHF 43.99 last year. Cash earnings per share, defined as ope- Net cash flow from investing activities amounted to CHF –156.1 rating cash flow beforeworking capital changes divided by basic million, compared to CHF –138.9 million in the preceding year.This shares outstanding,showed aconsiderable improvement of 9.3% to year’samount included the cashoutflow of CHF –36.2 millionfor the CHF 88.60 up from CHF 81.05 in prior year. acquisition of abusiness in Spain and deferred payments for earlier acquisitions (prior year CHF –16.9 million for acquisition and CHF 17.2 million from the disposal of subsidiaries). Thebiggest out- Consolidated BalanceSheet and ﬁnancing structure flow in both years,however,related to capital expenditures for oper- Total assets at the end of August 2010 stood at CHF 3,570.8 million, ations such as capacity expansions,replacements,modernizations and an increase of CHF 56.0 million or 1.6% compared to CHF 3,514.8 Information Technology (CHF –145.1 million in the current and millionone year before.This is mainly the result of higher assets CHF –144.4 million in the prior year).This position also includes pro- required due to the growth of the business,partly compensated for ceedsfromthe sale of assets (CHF 19.6 million in the current and by currencytranslation effects and operational improvements related CHF 2.4 million in the prior year) as well as some other minor items. to working capital management. Net cash flow from financing activities amounted to CHF –23.0 Net working capital was further reduced by CHF 45.2 million or million compared to CHF –78.1 million in prior year.This position 4.5% to CHF 964.9 million at the end of August 2010 compared to mainly includes the net proceeds from the issue of new debt in CHF 1,010.1 million at the end of the prior year.This is the result of the amount of CHF 47.4 million (in prior year repayment of the favorable impact from foreign currencytranslation and opera- CHF –10.1 million), the repayment of sharecapital of CHF –64.6 mil- tional improvements,partly offset by higher inventories,receivables lion (inprior year CHF –59.4 million) andthe netpurchase/sale of and other current assets resulting from the volume growth and by treasury shares in the amount of CHF –5.7 million (prior year higher net derivative financial assets and liabilities. CHF –8.8 million). Net debt at August 31, 2010 decreased by CHF 71.9 million to CHF 870.8 million from CHF 942.7 million in prior year,benefiting from currencyeffects due to the strong Swiss franc.The weighted average maturity of the Group’stotal debt portfolio including undrawn committed facilities decreased from 6to5years. Equity – including equity attributable to the shareholders of the parent company and non-controlling interests – increased by CHF 47.1 million or 3.7% to CHF 1,303.2 million from CHF 1,256.1 million at the end of August 2009. Equity attributable to the shareholders of the parent company amounted to CHF 1,302.3 million compared to last year’sCHF 1,255.6 million.Thedebt-to-equity ratio improved from 75.1% to 66.9% and the solvencyratio improved from 35.7% to 36.5%. Theincrease in equity and the improvement of the aforementioned key figures resulted from the positive impact of net profitonequity,although this was offset to alarge extent by signifi- cantforeigncurrencytranslationimpacts and the repayment of share capital in lieu of adividend. Thereturn on invested capital (ROIC) increased to 14.8% from 13.9% in the prior year. 56 KoConsolidanzernrechnungted Financial Statements Consolidated Income Statement

forthe ﬁscal year ended August ]×,Notes Ùèèz/×è ÙèèR/èz in thousands of CHF

Revenue from sales and services ð,Ù×],hhz Ù,RRè,×hh

Cost of goods sold (Ù,Ùhh,FèR)(Ù,×hÙ,]ðð)

Gross proﬁt h]F,×h× hèh,RÙÙ

Marketing and sales expenses (×Ùè,hR×)(×Ùè,]ÙÙ) General and administration expenses (ÙÙR,hzÙ) (Ùðè,FèR) Other income F Ùè,ÙðF]Ù,]ðh Other expenses h (×F,FÙ×)(Ùè,ÙzÙ)

Operating proﬁt(EBIT) ]hè,Ù×× ]ðè,hð]

Financial income R Ù,èÙ× ð,zèÙ Financial expenses z (R],×ÙÙ)(zh,Ùz]) Result from investments in associates and jointventures ×h (ÙÙð) ÙRÙ

Proﬁtbeforeincome taxes ÙRz,èRð Ùðz,FÙR

Income tax expenses ×è (]h,]ÙÙ)(]Ù,hÙ])

Net proﬁtfor the year Ùð×,hÙ] ÙÙF,zÙð of which attributable to: – shareholders of the parentcompany Ùð×,ÙÙF ÙÙF,zèh – non-controlling interest ð×h ×R

Earnings per share ××

Basic earnings per share(CHF/share) ÙR.FÙ Ù].zz Diluted earnings per share(CHF/share) ÙR.Ùh Ù].Rð Consolidated 57 Financial Statements Consolidated Statementof ComprehensiveIncome

forthe ﬁscal year ended August ]×,Notes Ùèèz/×è ÙèèR/èz in thousands of CHF

Net profitfor the year Ùð×,hÙ] ÙÙF,zÙð Cash flow hedges ×Ù(],ðRè)(F,]]z) Taxeffectoncash flow hedges ×,ðRð Ù,ðFF Currency translation differences (×]R,èÙF)(RF,z]è) Other comprehensiveincome forthe year,net of tax (×Ùè,èÙ×)(zè,hè])

Total comprehensiveincome forthe year ×××,hÙÙ ×]F,ÙÙÙ of which attributable to: – shareholders of the parentcompany ×××,]èz ×]F,Ùðh – non-controlling interest Ù×] (]ð) 58 Consolidated Financial Statements Consolidated BalanceSheet

Assets

as of August ]×,Notes Ùè×è Ùèèz in thousands of CHF

Currentassets Cash and cash equivalents ×h,]Fè ]],zz] Short-term deposits hðè Ù,×]h Trade receivables and other currentassets ×Ù ðRh,]Rè ðÙÙ,RÙh Inventories ×] ×,×RF,Ù]××,ÙzÙ,ðÙð Currentincome tax assets Ù,hFè ð,ÙRz Derivative ﬁnancial assets ×Ù ]hè,ðRè ÙÙ×,FÙz Total currentassets Ù,×Fð,èF×Ù,èRÙ,FFè

Non-currentassets Property,plantand equipment ×ð R]è,RFFRhÙ,ÙðR Investments in associates ×h],Ùhz Ù,è]R Intangible assets ×R ð×Ù,ÙzÙÙz],FRÙ Deferred income tax assets ×z ð×,]F× ð×,z×R Other non-currentassets h,ðRF ×è,èRz Total non-currentassets ×,Ùèð,hRF ×,Ù]Ù,×Rh Total assets ],ðhè,RÙh],ð×Ù,RÙh

Liabilitiesand equity

as of August ]×,Notes Ùè×è Ùèèz in thousands of CHF

Currentliabilities Bank overdrafts Ùè ×],ÙFF Ùz,]]R Short-term debt Ùè ×hð,z]R ÙÙÙ,RRð Trade payables and other currentliabilities Ù× hFz,ð]h R]Ù,ÙÙè Currentincome tax liabilities Ù×,zFR ]F,èÙF Derivative ﬁnancial liabilities ×Ù ]h×,èðz ×ð],zÙÙ Provisions ÙÙ ×ð,ððR ×F,hð× Total currentliabilities ×,]Rh,ðÙF ×,Ùz×,]FÙ

Non-currentliabilities Long-term debt Ù]Fzz,ð×FhÙR,Ùz] Employeebeneﬁtobligations ÙÙ ×èð,××Ù ×ÙÙ,hè× Provisions ÙÙ ð,RF× Ù,ÙèÙ Deferred income tax liabilities ×z ðR,hÙ× FR,Ùðð Other non-currentliabilities ×è,zÙF Ù],FRz Total non-currentliabilities RRè,×ðR zFh,]Ùè Total liabilities Ù,ÙFh,FRÙ Ù,ÙðR,hèÙ

Equity Ùð Sharecapital ×zh,ÙzÙ ÙFÙ,××z Retained earnings and other reserves ×,×èÙ,hRh zz],Ù]h Total equity attributable to the shareholders of the parentcompany ×,]èÙ,ÙR××,Ùðð,ððF Non-controlling interest RRÙ ðRz Total equity ×,]è],×F] ×,ÙðF,×Ùð Total liabilities and equity ],ðhè,RÙh],ð×Ù,RÙh Consolidated 59 Financial Statements Consolidated Cash Flow Statement

Cash ﬂowsfromoperating activities forthe ﬁscal year ended August ]×,Notes Ùèèz/×è ÙèèR/èz in thousands of CHF

Profitbeforeincome taxes ÙRz,èRð Ùðz,FÙR Adjustments for: Depreciation of property,plantand equipment ×ð hh,RF× RÙ,]èz Amortization of intangible assets ×R ÙÙ,ÙÙR Ù],èFð Impairmentofproperty,plantand equipment h, ×ð – ðFF Recognition of negativegoodwill on acquisitions × – (×,ðèÙ) (Gain) on disposal of property,plantand equipment, net (F,×ðÙ)(]è) (Gain) on sale of subsidiary Ù – (×h,zðè) Foreign exchange(gain) loss (×ð,RðÙ) ÙR,ÙèR Fair value (gain) loss on derivative financial instruments (ðR,è×F)(Ùh,×R]) Fair value (gain) loss on hedged firm commitments (RÙ,ðè])(hF,hÙ×) Fair value (gain) loss on inventories ×Fè,è]R ðh,zð× Write-down of inventories ×] Ù,hFR ð,ÙFÙ Increase (decrease) of allowance fordoubtful receivables (×,]RÙ) ],èÙÙ Increase (decrease) of provisions Ù,F×ð ×F,è]] Increase (decrease) of employeebenefitobligations (F,èhR)(R,Ùðð) Equity-settled share-based payments Ù, ÙÙð,h×F××,ðhh Result from investments in associates and jointventures ÙÙð(ÙRÙ) (Interest income) R (Ù,èÙ×)(],RR]) Interest expenses z Fh,èF× RF,ÙÙ] Operating cash flow beforeworking capital changes Ùðh,hz× Ù×R,èðR

(Increase) decrease in trade receivables and other currentassets (ÙÙ,ð×])(ÙÙ,×zz) (Increase) decrease in inventories (×Ù],]Rh)(z,]èh) Increase (decrease) in trade payables and other currentliabilities Ù,èÙð(×z,èèÙ) Use of provisions (××,×ð×)(Ù,Ù]×) Cash generated from operations ÙRè,hFð ]F×,]×h

(Interest paid)(FÙ,ÙÙ×)(hh,FèÙ) (Income taxes paid)(Ùè,Rèè)(Ù],èhè)

Net cash ﬂow from operating activities ×hh,hÙÙ ÙÙè,FÙ] 60 Consolidated Financial Statements Consolidated Cash Flow Statement

Cash ﬂowsfrominvesting activities

forthe ﬁscal year ended August ]×,Notes Ùèèz/×è ÙèèR/èz in thousands of CHF

Purchase of property,plantand equipment ×ð(××z,ÙðR)(××],]×Ù) Proceeds from sale of property,plantand equipment ×z,ðRè Ù,]hè Purchase of intangible assets ×R (Ùð,Rðè)(]×,×Ùz) Proceeds from sale of intangible assets –F× Acquisition of subsidiaries,net of cash acquired × (]F,×zz)(×F,z]R) Acquisition of associates and jointventures – (×FÙ) Proceeds from disposal of subsidiaries Ù – ×h,×zR Purchase of short-term deposits – (×,]zF) Proceeds from sale of short-term deposits ×,]èz ×hð Purchase of other non-currentassets (×Ù×)(ðRz) Proceeds from sale of other non-currentassets Ù,Ùð] Ù,èÙR Interest received ×,zRF Ù,hRh Net cash ﬂow from investing activities (×ðF,×Ùè)(×]R,Rz×)

Cash ﬂowsfrom ﬁnancing activities

forthe ﬁscal year ended August ]×, Ùèèz/×è ÙèèR/èz in thousands of CHF

Proceeds from the issue of short-term debt ××Ù,ðÙF zÙ,Ùz] Repaymentofshort-term debt (×]F,×zR)(ÙÙF,zÙF) Proceeds from the issue of long-term debt ×ð×,RÙè ×Ùz,èhh Repaymentoflong-term debt (Rè,hðè)(F,hÙR) Capital reduction and repayment Ùð(FÙ,F×z)(ðz,]zÙ) Purchase of treasuryshares Ùð(ð,zRR)(R,RèR) Sale of treasuryshares ]èh– Dividends paid to non-controlling interest Ùð(×Ùè)(FR) Effectofchangeinnon-controlling interest Ùð –]èè Net cash flow from financing activities (Ù],èèÙ)(hR,èzÙ)

Eﬀectofexchangeratechanges on cash and cash equivalents F×h ð,ððz Net increase (decrease) in cash and cash equivalents (hF×) Ùz,Ù×z

Cash and cash equivalents at the beginning of the ﬁscal year Ù,Fðð (ÙÙ,ðFÙ) Cash and cash equivalents at the end of the ﬁscal year ],RzÙÙ,Fðð Net increase (decrease) in cash and cash equivalents (hF×) Ùz,Ù×z

Cash and cash equivalents ×h,]Fè ]],zz] Bank overdrafts (×],ÙFF)(Ùz,]]R) Cash and cash equivalents as deﬁned forthe cash ﬂow statement ],RzÙÙ,Fðð Consolidated 61 Financial Statements Consolidated Statement of Changes in Equity

Attributable to the shareholders of the parentcompany

Share Treasury Retained Hedging Cumulative Total Non-con- Total capital shares earnings reserves translation trolling equity adjustments interest in thousands of CHF

As of August ]×, ÙèèR]Ù×,ðhÙ(×],FèÙ) zèR,]Ùè (×,Ù×z)(]z,×Ùz) ×,×hð,zÙÙ ]zÙ×,×hF,]×Ù Currency translation adjustments (RF,Rhh)(RF,Rhh)(ð])(RF,z]è) Effectofcash flow hedges (note ×Ù) (F,]]z)(F,]]z)(F,]]z) Taxesrecognized in equity (note ×Ù, ×z) Ù,ðFF Ù,ðFF Ù,ðFF Other comprehensiveincome,net of tax (],hh])(RF,Rhh)(zè,Fðè)(ð])(zè,hè]) Net profitfor the year ÙÙF,zèh ÙÙF,zèh ×R ÙÙF,zÙð Total comprehensiveincome forthe year ÙÙF,zèh (],hh])(RF,Rhh) ×]F,Ùðh (]ð) ×]F,ÙÙÙ Capital reduction and repayment(ðz,Ùðð) F] (ðz,]zÙ)(ðz,]zÙ) Movements of non-controlling interest (note Ùð) – Ù]ÙÙ]Ù Purchase of treasuryshares (R,RèR)(R,RèR)(R,RèR) Equity-settled share-based payments ×h,hzz (F,ÙÙÙ) ××,ðhh ××,ðhh As of August ]×, Ùèèz ÙFÙ,××z (Ù,F×]) ×,×Ùz,èFR (Ù,zzÙ)(×ÙF,èÙF) ×,Ùðð,ððF ðRz ×,ÙðF,×Ùð Currency translation adjustments (×]h,zÙÙ)(×]h,zÙÙ)(×èÙ) (×]R,èÙF) Effectofcash flow hedges (note ×Ù) (],ðRè)(],ðRè)(],ðRè) Taxesrecognized in equity (note ×Ù, ×z) ×,ðRð ×,ðRð ×,ðRð Other comprehensiveincome,net of tax (×,zzð) (×]h,zÙÙ)(×]z,z×h)(×èÙ) (×Ùè,èÙ×) Net profitfor the year Ùð×,ÙÙF Ùð×,ÙÙF ð×h Ùð×,hÙ] Total comprehensiveincome forthe year Ùð×,ÙÙF (×,zzð) (×]h,zÙÙ) ×××,]èz Ù×] ×××,hÙÙ Capital reduction and repayment(FÙ,FÙð) F (FÙ,F×z)(FÙ,F×z) Movements of non-controlling interest (note Ùð) – (×Ùè)(×Ùè) Purchase of treasuryshares (ð,zRR)(ð,zRR)(ð,zRR) Sale of treasuryshares ]Ùz (ÙÙ) ]èh]èh Equity-settled share-based payments h,èR× (×,]Fð) ð,h×F ð,h×F As of August ]×, Ùè×è ×zh,ÙzÙ(],×z×)×,]hR,z×] (F,zRh)(ÙF],zÙR) ×,]èÙ,ÙR× RRÙ×,]è],×F] 62 Consolidated Financial Statements Summaryof Accounting Policies

Organization and business activity Estimates and underlying assumptions arereviewed on an on- Barry Callebaut AG (“TheCompany”)was incorporated on Novem- going basis. Revisions to accounting estimates arerecognized in the ber 24, 1994 under Swiss law, having its head office in Zurich, Switzer- period in which the estimate is revised and in any futureperiods land, at Pfingstweidstrasse 60. Barry Callebaut AG is registered in affected. Switzerland and has been listed on the SIX Swiss Exchange (BARN, In particular,information about significant areas of estimation ISIN Number: CH0009002962) since 1998. As of August 31, 2010, uncertainty and critical judgments in applying accounting policies Barry Callebaut’smarket capitalization based on issued shares was that have the most significant effect on the amount recognized in the CHF 3,632 million (August 31, 2009: CHF 2,968 million).TheGroup’s financial statements aredescribed below: ultimate parent is Jacobs Holding AG with ashareof50.11% of the shares issued (August 31, 2009: 50.21%). Note × Acquisitions – Fair value measurement Barry Callebaut AG and its subsidiaries (“TheGroup”)isone of Note ×] Inventories – Application of broker-trader exemption the world’sleading cocoa and chocolate companies,serving the food Note ×ÙDerivative financial instruments and hedging activities – industry,fromfood manufacturers to professional users of chocolate Designation of inventoryasahedging instrument (such as chocolatiers,pastry chefs or bakers) to global retailers.The Note ×R Goodwill – Measurementofthe recoverable amounts of cash-generating units Group offers abroad and expanding range of chocolate and other Note ×z Deferred tax assets and liabilities – Utilization of tax losses cocoa-based products with numerous recipes.Italso provides acom- Note ÙÙEmployeebenefitobligation – Measurementofdefined prehensive range of services in the fields of product development, benefitobligations processing,training and marketing.The Group is fully vertically integrated along the entirevalue chain: from sourcing of rawmaterials Scope of consolidation/Subsidiaries to finished products on the shelf. Theconsolidated financial statements of the Group include all the Theprincipal brands under which the Group operates areBarry assets,liabilities,income and expenses of Barry Callebaut AG and Callebaut, Callebaut, CacaoBarry,Carma, Luijckx, VanLeer and the companies which it controls.Control is presumed to exist when VanHouten for chocolate products; Barry Callebaut, Bensdorp,Van acompany owns,either directly or indirectly,morethan 50% of the Houten and Chadler for cocoa powder; Bensdorp,Van Houten, voting rights of acompany’ssharecapital or otherwise has the Caprimo and Ögonblink for vending mixes; Sarotti, Alpia, Jacques power to exercise control over the financial and operating policies of and Alprose for consumer products. asubsidiary so as to obtain the benefits from its activities.Non-con- Theprincipal countries,inwhich the Group operates,include trolling interest areshown as acomponent of equity in the balance Belgium, Brazil,Cameroon, Canada, China, Côte d’Ivoire, France, sheet and the shareofthe net profitattributable to non-controlling Germany, Ghana, Italy,Japan, Malaysia, Mexico,the Netherlands, interest is shown as acomponent of the net profitfor the period in Poland, Russia, Singapore, Spain, Sweden, Switzerland, the United the Consolidated Income Statement. Newly acquired companies are Kingdom and the U.S. consolidated from the date control is transferred (the effective date of acquisition), using the purchase method. Subsidiaries disposed of Basis of presentation areincluded up to the effective date of disposal. Theconsolidated financial statements of the Group have been pre- All intragroup balances and unrealized gains and losses or pared in accordance withInternationalFinancial Reporting Stan- income and expenses arising from intragroup transactions areelimi- dards (IFRS)and comply with Swiss law. nated in preparing the consolidated financial statements.Unrealized Forconsolidation purposes,Barry Callebaut AG and its sub- gains arising from transactions with associates and jointly controlled sidiaries prepare financial statements using the historical cost basis entities areeliminated to the extent of the Group’sinterest in the as disclosed in the accounting policies below,except for the measure- entity.Unrealized losses areeliminated in the same wayasunrealized ment at fair value of derivative financial instruments,hedged firm gains, but only to the extent that thereisnoevidence of impairment. commitments and inventories and except for defined benefitobligation that is accounted for according to the projected unit credit Purchases and disposals of non-controlling interest in subsidiaries method. TheGroup applies the policyoftreating transactions with non- Theprior year’sConsolidated Balance Sheet has been reclassi- controlling interest equal to transactions with equity owners of the fied to conform with the current period’spresentation, whereas Group.For purchases from non-controlling interest, the difference financial assets of CHF 0.4 million (2009: CHF 0.5 million) have been between consideration paid and the relevant shareacquired of the combined withother non-current assets. carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposal to non-controlling interest arealso re- Managementassumptions and significantestimates corded in equity. Thepreparation of financial statements requires management to makejudgments,estimates and assumptions that affect the application of accountingpolicies and the reported amounts of assets, liabilities,income and expenses.Actual results maydiffer from these estimates. Consolidated 63 Financial Statements

Optionsoverexisting non-controlling interest Cash and cash equivalents TheGroup accounts for written put options over existing non-con- Cash and cash equivalents comprise of cash on hand, checks,bank trolling interest in derecognizing the non-controlling interest and balances and unrestricted bank deposit balances with an original records instead aliability to the extent of the put option exercise price, maturity of 90 days or less.Bank overdrafts that arerepayable on discounted to the balance sheet date.Should the option expirewith- demand and form an integral part of the Group’scash management outbeing exercisedbythe minority shareholders,the liability is derec- areincluded as acomponent of cash and cash equivalents for the ognizedand non-controlling interest is recorded. purpose of the Consolidated Cash Flow Statement.

Investments in associates and jointventures Trade receivables and other currentassets Associates arethose companies in which the Group has significant Trade receivables arestated at amortized cost, less anticipated influence but not control.This is normally presumed when the Group impairment losses.Impairment provision for receivables represent holds between 20% and 50% of the votingpower of another entity. the Group’sestimates of incurred losses arising from the failureor Joint ventures arethose entities over whose activities the Group has inability of customers to makepayments when due.These estimates joint control, established by contractual agreement and requiring areassessedonanindividualbasis,taking into account the aging unanimous consent for strategic financial and operating decisions. of customers’ balances,specificcredit circumstances and the Group’s Associates and joint ventures areaccounted for using the equity historical default experience.Ifthe Group is satisfied that no method (equity-accounted investees) and arerecognized initially at recovery of the amount owing is possible,the receivable is written off cost. TheGroup’sinvestment includes goodwill identified on acqui- and the provision related to it is reversed. sition, net of any impairment losses.The consolidated financial state- TheGroup maintains an asset-backed securitization program for ments include the Group’sshareofthe income and expenses and trade receivables,transferring the contractual rights to the cash flows equity movements of equity-accounted investees from the date that of third-party trade receivables at their nominal value minus a significant influence or joint control commences until the date discount.These receivables arederecognized from the balance sheet. significant influence or joint control ceases. Thenet amount reported under other current assets (see note 12) or other current liabilities (see note 21) is the amount of the discount Foreign currency transactions minus the receivables already collected at the balance sheet date but Thefunctional currencyofthe Group’sentities is the currencyoftheir not yet remitted to the asset-purchasing company. primary economic environment. In individual companies,transactions in foreign currencies arerecorded at the rate of exchange at Derivative ﬁnancial instruments and hedging activities the date of transaction. Monetary assets and liabilities denominated Thenatureofits business exposes the Group to avariety of risks.The in foreign currenciesare translatedinto respectivefunctional curren- Group’soverall risk management program acknowledges volatility of cies at the exchange rate prevailing at the year-end date.Any resul- markets and seeks to minimize the potential adverse effects on the ting exchange gains and losses aretaken to the income statement. financial performance of the Group in acost-efficient manner.Further If related to commercial transactions or to the measurement of finan- information on riskmanagement can be found under note 26. cialinstruments in coverage of commercialtransactions, such foreign TheGroup uses derivative financial instruments in accordance currencygains and losses areclassified as cost of goods sold. Other- with its risk management policies to hedge its exposuretochocolate wise,foreign currencygains and losses areclassified as financial sales (related commodity price risks), which consist of the price risk income and financial expense. of cocoa and other commodities such as dairy,sweeteners and nuts, foreign exchange risks and interest rate risks arising from opera- Foreign currency translation tional, financing and investment transactions. Forconsolidation purposes,assets and liabilities of subsidiaries TheGroup’spurchasing and sourcing center frequently buys and reporting in currencies other than Swiss francs aretranslated to sells cocoa beans and other chocolate ingredients for the purpose of Swiss francs using year-end rates of exchange.Income and expenses generating aprofitfromshort-term fluctuations in price or dealer’s aretranslated at the average rates of exchange for the year.Diffe- margin. Thepractice of net cash settlement of commodity purchase rences arising from the translation of financial statements using the and sale contracts results in these contracts qualifying as derivative above method arerecorded as cumulative translation adjustments financial instruments. in equity. Following the Group’srisk management policy, generally the operating group companies do not hold derivative financial instru- Major foreign exchangerates ments for trading purposes. Derivative financial instruments areaccounted for at fair value Closing rate AveragerateClosing rate Averagerate with fair value changes recognized in the income statement. Ùèèz/×è ÙèèR/èz EUR ×.ÙzÙð ×.ÙÙRÙ×.ðÙÙè ×.ð×Rz GBP ×.ðhÙè ×.FðF××.hÙRð ×.hðè× USD ×.èÙ×è ×.èðhR ×.èFFF ×.×Ùðè 64 Consolidated Financial Statements Accounting Policies

Hedgeaccounting thus calculated for the hedging instruments arerecorded under Formanufacturing and selling of their products,the operating com- the position “Derivative financial assets” or “Derivative financial panies requirecommodity rawmaterials such as cocoa beans and liabilities” depending on whether the resulting amount is positive or semi-finished cocoa products as well as non-cocoa components such negative. as dairy,sweeteners and nuts.The value of the Group’sopen sales and Forforeign currencyexchange risks related to the firm sales com- purchase commitments and inventory of rawmaterials changes con- mitments of industrial chocolate (Contract Business), fair value tinuously in line with price movements in the respective commodity hedge accounting is also applied. Thehedge relationship is between markets.The Group uses commodity futures,forwardcontracts the unrecognized firm sales commitment (hedged item) and the and inventory to manage price risks associated with the firm sales foreign currencyforwardsales contract (hedging instrument). The commitments of industrial chocolate (Contract Business – see risk changes in fair value of the hedging instrument arerecognized in management note 26). the income statement.Thecumulative change in the fair value of the TheGroup and its subsidiaries enter into sales and purchasing firm sales commitment attributable to the foreign currencyrisk is contracts denominated in various currencies and consequently are recognized as an asset or liability with acorresponding gain or loss exposed to foreign currencyrisks,which arehedged by the Group’s in the income statement. treasury department or – in case of legalrestrictions – with local banks. TheGroup’sinterest rate risk is managed with interest rate Cash ﬂow hedging – forinterest rate risks derivatives. In general, Barry Callebaut applies cash flow hedge accounting for Hedge accounting is applied to derivatives that areeffective in interest rate derivatives,converting aportion of floating rate borro- offsetting the changes in fair value or cash flows of the hedged items. wings to fixed rate borrowings. Thehedge relation is documented and the effectiveness of such Interest rate derivatives hedging exposures to variability in cash hedges is tested at regular intervals,atleast on asemi-annual basis. flows of highly probable forecasted transactions areclassified as cash flow hedges.For each cash flow hedge relationship,the effective part Fair value hedging – forcommodity price risksand foreign currency of any gain or loss on the derivative financial instrument is recognized exchangerisksrelated to the Contract Business directly in equity.Gains or losses that arerecognized in equity are Generally,fair value hedge accounting is applied to hedge the Group’s transferred to the income statement in the same period in which the exposuretochanges in fair value of arecognized asset or liability or hedged exposureaffects the income statement. Theineffective part an unrecognized firm commitment or an identified portion of such an of anygainorlossisrecognized immediately in the income statement asset, liability or firm commitment, that is attributable to aparticular at thetimehedge effectivenessistested. risk, e.g. commodity price risks,and that could affect profitorloss.For Hedgeaccounting is discontinued when the hedging instrument fair value hedges,the carrying amount of the hedged item is adjusted expires or is sold, terminated or exercised, or no longer qualifies for for gains and losses attributable to the risk being hedged, the deriva- hedge accounting.Atthat point in time,any cumulative gain or loss tive (hedging instrument) is remeasured at fair value and gains and on the hedging instrument recognized in equity is kept in equity losses from both aretaken to the income statement. When an unrec- until the forecasted transaction occurs.Ifahedged transaction is no ognized firm commitment is designated as ahedged item, the sub- longer expected to occur,the net cumulative gain or loss recognized sequent cumulative change in the fair value of the firm commitment in equity is immediately transferred to the income statement. attributable to the hedged risk is recognized as an asset or liability with acorresponding gain or loss in the income statement.Thechan- No hedgeaccounting designation ges in the fair value of the hedging instrument arealso recognized in TheGroup’spurchasing and sourcing center and the In-house Bank the income statement. of the Group fair value their derivative financial instruments without Forthe chocolate price risk related to the sales contract of in- applying hedge accounting. dustrial chocolate (Contract Business), the firm sales commitments, PriceList Business commodity risk hedging is based on fore- including cocoa and non-cocoa components,such as sweeteners,dairy casted sales volume and excluded from hedge accounting,asno and nuts,are designated as the hedged items while the forward derivatives can be clearly designated to the forecasted price list sales. purchase commitments and Contract Business inventories related to Therefore, these derivatives arecarried at fair value with fair value cocoa and non-cocoa components as well as cocoa futurecontracts changes recognized in the income statement. aredesignated as the hedging instruments.The hedging instruments In respect of the foreign exchange exposureofarecognized (purchase side) as well as the hedged items (sales side) aremeasured monetary asset or liability,nohedge accounting is applied.Any gain at fair value at the balance sheet date.The components of sales or loss on the financial derivative used to economically hedge this contracts represent commodities and arequoted in an active market risk is recognized in the income statement thus compensating the or arereliably determinable.The fair values thus calculated for the gains and losses that arise from the revaluation of the underlying hedged items arerecorded under the position “Fair value of hedged asset or liability. firm commitments” included in trade receivables and other current assets or trade payables and other current liabilities depending on whether the resulting amount is positive or negative.The fair values Consolidated 65 Financial Statements

Inventories All purchases and sales of financial assets arerecognized on the TheGroup principally acquires cocoa beans,any semi-finished pro- trade date.Financial assets arerecognized when the Group becomes ducts resulting from cocoa beans (such as cocoa liquor,butter,cake aparty to the contractual provisions and areinitially measured at fair or powder), other rawmaterials such as sweeteners,dairy and nuts value,which is the consideration given for them, plus transaction costs and has industrial chocolate inventories with the purpose of selling in the case of financial assets and liabilities not at fair value through them in the near futureand generating aprofitfrom fluctuations in profitorloss.Available-for-sale and fair value through profitorloss price or broker-traders’ margin. TheGroup thereforeacts as abro- investments aresubsequently carried at fair value by reference to ker-trader of such commodities and these inventories aremeasured their quoted market price at the balance sheet date,without any at fair value less costs to sell in accordance to the broker-trader deduction for transaction costs that the Group mayincur on their exemption per IAS2.5 (Inventories). sale or other disposal. Other inventories,such as finished consumer products and other Gainsorlossesonmeasurement to fair value of available-for-sale items related to the Price List Business arestated at the lower of cost investmentsare included directly in equity until the financial asset is and net realizable value.The cost of inventories comprises the costs sold, disposed of or impaired, at which time the gains or losses are of materials,direct production costs including labor costs and an recognized in net profitorloss for the period. appropriate proportion of production overheads and factory depre- Held-to-maturity investments and loans and receivables are ciation. Formovements in inventories,the average cost method is carried at amortized cost using the effective interest rate method. applied. Net realizable value is defined as the estimated selling price Financial assets arederecognized, using the weighted average less costs of completion and direct selling and distribution expenses. method, when the Group loses control of the contractual rights to the cash flowsofthe assets or when theGroup sellsorotherwise dis- Assets held forsale and liabilities directly associated with posesofthe contractual rights to the cash flows,including situations assets held forsale wherethe Group retains the contractual rights but assumes acon- Long-term assets and related liabilities areclassified as held for sale tractual obligation to paythe cash flows that comprise the financial and shown on the balance sheet in aseparate line as “Assets held for asset to athirdparty.Such control is lost when the rights and bene- sale” and “Liabilities directly associated with assets held for sale” if fits specified in the contract arerealized, expired, or aresurrendered. the carrying amount is to be realized by selling,rather than using,the assets.This is conditional upon the sale being highly probable to Intangible assets occur and the assets being ready for immediate sale.For asale to be Goodwill classified as highly probable,the following criteria must be met: Goodwill on acquisitions is the excess of acquisition-date fair value management is committed to aplan to sell the asset, the asset is mar- of total consideration transferred and the acquisition-date fair value keted for sale at aprice that is reasonable in relation with its current of assets,liabilities and contingent liabilities.Following initial recog- fair value and the completion of the sale is expected to occur within nition,goodwill is measured at cost less any accumulated impairment 12 months. losses.Goodwill is reviewed for impairment annually or more Assets held for sale aremeasured at the lower of their carrying frequently if events or changes in circumstances indicate that the amount or the fair value less costs to sell. From the time they are carrying value maybeimpaired. classified as “held for sale”,depreciable assets arenolonger depre- Negative goodwill is recognized directly in the income statement. ciated or amortized. At theacquisition date,any goodwill acquired is allocated to each of the cash-generating units expected to benefitfromthe combination’s Financial assets synergies. Financial assets areaccounted for in accordance with IAS39, Fin- Impairment is determined by assessing the recoverable amount ancial Instruments: Recognition and Measurement. Accordingly, of the cash-generating unit to which the goodwill relates.Wherethe financial assets areclassified into the following categories: held-to- recoverable amount of the cash-generating unit is less than the maturity,atfair value through profitorloss,loans and receivables and carrying amount, an impairment loss is recognized. Wheregoodwill available-for-sale.Financial assets with fixed or determinable pay- forms partofthe cash-generating unit and part of the operation with- ments and fixed maturity that the Group has the positive intent and in thatunitisdisposed of,the goodwill associated with the operation ability to hold to maturity except for loans and receivables originated disposed of is included in the carrying amount of the operation when by the Group areclassified as held-to-maturity investments.Financial determining the gain or loss on disposal of the operation. Goodwill assets acquired principally for the purpose of generating aprofitfrom disposed of in this circumstance is measured on the basis of the rela- short-term fluctuations in price areclassified as at fair value through tive values of the operation disposed of and the portion of the cash- profitorloss. All other financial assets,excluding loans and recei- generating unit retained. vables,are classified as available-for-sale. 66 Consolidated Financial Statements Accounting Policies

Research and developmentcosts Leases whereasignificant portion of the risks and rewards of Research costs areexpensed as incurred, whereas product develop- ownershipare retained by the lessor areclassified as operating ment costs areonly expensed as incurred when it is considered im- leases.Rentals payable under an operating lease arecharged to the possible to quantify the existence of amarket or futurecash flows for income statement on astraight-line basis over the term of the lease. the related products or processes with reasonable assurance. Developmentcosts for projects relate to software, recipes and Financial liabilities innovation and arecapitalized as an intangible asset if it can be de- Financial liabilities areinitially recognized at fair value,net of trans- monstrated that the project is expected to generate futureeconomic action costs,when the Group becomes aparty to the contractual benefits.Development costs previously recognized as an expense are provisions.They aresubsequently carried at amortized cost using the not recognized as an asset in asubsequent period. Development costs effective interest rate method. A financial liability is removed from that have been capitalized areamortized on astraight-line basis over the balance sheet when the obligation is discharged, cancelled, or the period of their expected useful life.The amortization periods expires. adopted do not exceed five years. Provisions Other intangible assets Provisions arerecognized when the Group has apresent legal or con- Other acquired intangible assets include patents,trademarks,brand structiveobligationasaresult of past events and it is probable that names and licenses.Patents and licenses areamortized over their an outflow of resources will be required to settle the obligation, and period of validity.All other intangible assets areamortized on a areliable estimate thereof can be made.Provisions arerecorded for straight-line basis over their anticipated usefullife not exceeding identifiable claims and restructuring costs.Restructuring provisions 20 years. mainly comprise employee termination payments.Specificprovisions for restructuring costs arerecorded at such time as the management Property,plantand equipment approves the decision to restructureand aformal plan for restructur- Property,plant and equipment aremeasured at the acquisition or ing is communicated. construction cost less accumulated depreciation and accumulated impairment losses.Astraight-line method of depreciation is applied Employeebenefitobligations/Post-employmentbenefits through the estimated useful life.Estimated useful lives of major Theliabilities of the Group arising from defined benefitobligations classes of depreciable assets are: and the related current service costs aredetermined on an actuarial basis using the projected unit credit method. Buildings (includingwarehouses and installations) Ùè to ðè years Actuarial gains and losses arerecognized in the income statement Plantand machinery ×è to Ùè years over the remaining working lives of the employees to the extent that Office equipment, furnitureand motor vehicles ] to ×è years their cumulative amount exceeds 10% of the greater of the present value of the obligation and of the fair value of plan assets. Maintenance and repair expenditures arecharged to the income Fordefined benefitplans,the actuarial costs charged to the statement as incurred. income statement consist of current service cost, interest cost, expec- Thecarrying amounts of property,plant and equipment are ted return on plan assets and past service cost, gains or losses related reviewed at least at each balance sheet date to assess whether they to curtailments or early settlements as well as actuarial gains or arerecoverable in the form of futureeconomic benefits.Ifthe re- losses to the extent they arerecognized.Thepast service cost for the coverable amount of an asset has declined below its carrying amount, enhancement of pension benefits is accounted for over the period an impairment loss is recognized to reduce the value of the assets to that such benefits vest. its recoverable amount. In determining the recoverable amount of Some benefits arealso provided by defined contribution plans; the assets,expected cash flows arediscounted to their present value. contributions to such plans arecharged to the income statement as incurred. Leased assets Leases areclassified as financeleaseswheneverthe termsofthe lease Post-retirementbenefits other than pensions transfer substantially all the risks and rewards of ownership to the Certain subsidiaries provide healthcareand insurance benefits for lessee. aportion of their retired employees and their eligible dependents. Assetsheldunder financeleases arestated as assets of the Group Thecost of these benefits is actuarially determined and included in at the lower of their fair value and the present value of the minimum the related function expenses over the employees’ working lives.The lease payments at inception of the lease,less accumulated deprecia- related liability is also included in the position Employee benefits. tion and impairment losses.The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Finance costs arecharged to the income statement over the term of the relevant lease so as to produce aconstant periodic interest charge on the remaining balance of the obligations for each accounting period. Consolidated 67 Financial Statements

Employee stock ownership program losses related to derivative financial instruments used for hedging Forthe employee stock ownership program, treasury shares areused. purposes arerecognized in revenues in accordance with the policies In accordance with IFRS2,the compensation costs in relation with set out in this section. shares grantedunder theemployeestock ownershipprogram are Revenues and costs related to trading of rawmaterials,which are recognized in the income statement over the vesting period at their fair valued, arenetted. Interest income is recognized as it accrues on fair value as of the grant date. an effective yield basis,when it is determined that such income will flow to the Group.Dividends arerecognized when the right to receive Other long-term employeebeneﬁts payment is established. Other long-term employee benefits represent amounts due to employees under deferred compensation arrangements mandatedby Governmentgrants certain jurisdictions in which the Group conducts its operations. Provided thereisreasonable assurance that they will be irrevocably Benefitcost is recognized on an actuarial basis in the income state- received, grants relating to capital expenditureare deducted from ment. Therelated liability is included in other long-term liabilities. the cost of property,plant and equipment and thus recognized in the income statement on astraight-line basis over the useful life of Sharecapital/Purchase of ownshares the asset. Wherethe Company or its subsidiaries purchase the Company’s Other grants that compensate the Group for expenses incurred shares,the consideration paid including any attributable transaction aredeferred and recognized in the income statement over the period costs is deducted from equity as treasury shares.Wheresuch shares necessary to match them with the costs they areintended to compen- aresubsequently sold or reissued, any consideration received is sate. included in equity. Segmentreporting Dividends Operating segments arereported in amanner consistent with the Dividends on ordinary shares arerecognized as aliability when they internal reporting provided to the chief operating decision-maker. areapproved by the shareholders. Thechief operating decision-maker,who is responsible for allocating resources and assessing performance of the operating segments,has Taxes been identified as the Group’sExecutive Committee. Current income taxes arerecognized based on taxable income, whereas other taxes such as non-recoverable taxes withheld on divi- Formoredetails refer to “Changes in accounting policies” – IFRS8. dends,management fees and royalties received or paid arereported under other expense.Non-recoverable withholding taxes areonly accrued if distribution by subsidiary companies is foreseen. Incometaxes arecalculated in accordance with the tax regulations in effect in each country. TheGroup recognizes deferred income taxes using the balance sheet liability method. Deferred income tax is recognized on all temporary differences arising between the tax values of assets and liabilities and their values in the consolidated financial statements. Deferred income taxassets arerecognized to the extent it is probable that future taxable profitwill be available against which the temporary differences can be utilized. Deferred income tax assets and liabilities arecalculated using tax rates that areexpected to apply to the period when the asset is realized or the liability is settled, based on tax rates and laws that have been enacted or substantively enacted at the balance sheet date.

Revenue recognition Revenues from sales and services consist of the net sales turnover of semi-processed and processed goods and services related to food- processing. Revenues from the sale of goods arerecognized when the significant risks and rewards of ownership of the goods have been trans- ferredtothe buyer,which is mainly upon shipment.Appropriate pro- visionsare made forall additional costs to be incurredinconnection with the sales including the cost of returns.Additionally,gains and 68 Consolidated Financial Statements Accounting Policies

Changes in accounting policies IAS27(Revised) – Consolidated and SeparateFinancial Statements (effectiveJuly 1, 2009) Amended International Financial Reporting Standards and Inter- Therevised standardrequires that effects of all transactions with non- pretations which became effectivefor this financial year controlling interest aretoberecorded in equity if thereisnochange in control.These transactions will no longer result in goodwill or gains IFRS 3(Revised) – Business Combinations (effectiveJuly 1, 2009) andlosses. Thestandardalso specifies the accounting treatment when Therevised standardhas been adopted for acquisitions after Septem- controlislost. Any remaining interest in the entity is remeasured to ber 1, 2009. Therefore, the Group has not included acquisition- fair value,and again or loss is recognized as aprofitorloss.The related expenses in the consideration paid. Forfurther details on busi- Group has changed its accounting policyaccordingly. ness combinations refer to note 1 “Acquisitions”. IFRIC18–Transfer of Assets from Customers (effectiveJuly 1, 2009) IFRS 7(Amendment) – Financial Instruments – This interpretation clarifies the circumstances in which the definition Disclosures (effectiveJanuary1,2009) of an asset within the scope of IFRIC 18 is met, and how to recognize Theamendments to IFRS7expand the disclosures required in the asset and measureits cost on initial recognition. TheGroup will respect of fair value measurements and liquidity risk.TheGroup has apply the interpretation to transactions which meet the respective elected not to provide comparative information for these expanded criteria. As of August 31, 2010, no such transaction exists. disclosures in the current year in accordance with the transitional reliefs offered in these amendments.Disclosures in these financial Improvements to IFRS (effectiveJanuary1/July 1, 2009) statements (note 26) have been modified to reflect the International Several standards have been modified on miscellaneous points.No Accounting Standards Board’sclarification (as part of Improvements material impacts on the Group’sconsolidated financial statements to IFRSs [2009]). wereidentified.

IFRS 8 – Operating Segments (effectiveJanuary1,2009) Thefollowing standards and interpretations that became effective in IFRS8supersedes IAS14“Segment Reporting”.The new standard fiscal year 2009/10 arenot relevant to the Group’soperations: requires that reportable segments areidentified consistent with the • IFRS2Amendment – Share-based payments,Vesting conditions internal information upon which the chief operating decision-maker and cancellation (CODM) is allocating the resources and assessing the performance • IAS32Amendment – Financial Instruments: Presentation and of the operating segments.The Group has identified the Executive IAS1PresentationofFinancial Statements,puttable financial Committee as the CODM. It reviews the segments Global Sourcing instruments and obligations arising on liquidation &Cocoa, Western Europe,Eastern Europe,Americas and Asia- • IAS39Amendment – Financial Instruments: Recognition and Pacific. Forthe purpose of the consolidated financial statements, measurement, Eligible hedged items Western Europe and Eastern Europe wereaggregated. Global • IFRIC 15 – Agreements for the construction of real estate Sourcing &Cocoa has in the old format of the segment reporting • IFRIC 16 – Hedges of anet investment in aforeign operation (IAS14) been allocated to the regions.The prior-year figures have • IFRIC 17 – Distributions of non-cash assets to owners been restated accordingly.Inaddition to the operating segments,in- • Improvements to IFRS2010 formation for the following product groups is also disclosed: Cocoa Products,Food Manufacturer Products,Gourmet &Specialties Amended International Financial Reporting Standards and Inter- Products and Consumer Products. pretations,not yeteffectivefor the Group and not early adopted Thefollowing standards and amendments to existing standards have IAS1(Revised) – Presentation of Financial Statements been published and aremandatory for the Group’saccounting (effectiveJanuary1,2009) periods beginning on or after September 1, 2010, but the Group has TheGroup has opted to present aseparate statement of compre- not early adopted them: hensive income in addition to the consolidated income statement. Furthermore, the standardincludes non-mandatory changes of the IFRS 9 – Financial Instruments (effectiveJanuary1,2013) titles of the financial statements.The Group has chosen the option This standardintroduces new requirements for the classification to maintain the existing titles. and measurement of financial assets.All recognized financial assets that arecurrently in the scope of IAS39will be measured at either IAS23(Revised) – Borrowing Costs (effectiveJanuary1,2009) amortized cost or fair value.The standardgives guidance on how to Therevised standardeliminates the option of recognizing borrowing apply the measurement principles.Afair value option is available as costs immediately as an expense,tothe extent that they aredirectly an alternative to amortized cost measurement.All equity investments attributable to the acquisition, construction or production of a within the scope of IFRS9are to be measured on the consolidated qualifying asset. Capitalization of such directly attributable costs is balance sheet at fair value with the default recognition of gains and now mandatory.This revised standardhad no material impact on the losses in profitorloss.Only if the equity instrument is not held for Group’sconsolidated financial statements. trading,anirrevocable election can be made at initial recognition to Consolidated 69 Financial Statements

measureitatfairvalue through other comprehensive income with IFRIC14–Prepayments of aminimum funding requirement only dividend income recognized in profitorloss.All derivatives (effectiveJanuary1,2011) within the scope of IFRS9are required to be measured at fair value. Underthe amendedIFRIC 14,ifthereisaminimum funding require- This includes derivatives that aresettled by the delivery of unquoted ment forcontributions relating to futureservice,the economic be- equity instruments,however,inlimited circumstances cost maybean nefitavailable as areduction in futurecontributions (and, therefore, appropriate estimate of fair value.The Group has not yet decided the surplus that should be recognized as an asset) is comprised of: whether or not it will early adopt the standard. Thus,potential (a) any amount that reduces futureminimum funding requirement impacts on the Group’sconsolidated financial statements werenot contributions for futureservices because the entity made aprepay- yet fully assessed. ment; and (b) the estimated futureservice cost in each period less the estimatedminimum funding requirement contributions that would Improvements forIFRS(effectiveJanuary1,2010) be required for futureservice in that period if therewerenoprepay- Several standards have been modified on miscellaneous points.They ment of those contributions as described in (a). arenot going to have amaterial impact to the Group’sconsolidated financial statements.The Group will apply these changes for the IFRIC19–Extinguishing financial liabilities with accounting period starting September 1, 2010. equity instruments (effectiveJuly 1, 2010) Theinterpretation addresses divergent accounting by entitiesissuing Interpretations and amendments to existing standards,not yet equity instruments in order to extinguish all or part of a financial effectiveand not relevant forthe Group’soperations liability(oftenreferred to as debt-for-equity swaps).An entity should IFRS 2 – Share-based payments (effectiveJanuary1,2010) measurethe equity instruments issued as extinguishment of the These amendments clarify the accounting for group-settled share- financial liability at their fair value on the date of extinguishment of based payment transactions.Inthese arrangements,the subsidiary the liability,unless the fair value is not reliably measureable. receives goods or services from employers or suppliers,but its parent or another entity in the group must paythose suppliers.Anentity that receives goods or services in ashare-based arrangement must account for those goods or services no matter which entity in the group settles the transaction and no matter whether the transaction is settled in shares or cash. TheIASBadditionally clarified that in IFRS2a“group” has the same meaning as in IAS27–Consolidated and Separate Financial Statements.

IAS32–Financial Instruments: Classiﬁcation of rights issued (eﬀectiveFebruary1,2010) Under the amendment rights,options and warrants otherwise meeting the definition of equity instruments in IAS32issued to acquire a fixed number of an entity’sown non-derivative equity instrumentsfor a fixed amountinany currencyare classified as equity instruments provided the offer is made pro-rata to all existing owners of the same class of the entity’sown non-derivative equity instruments.

IAS24–Related party disclosures (eﬀectiveJanuary1,2011) Therevised standardsimplifies the disclosures requirements for entities that arecontrolled, jointly controlled or significantly influenced by agovernment and clarifies the definition of arelated party. Areporting entity might be exempted from the general disclosure requirements set out in IAS24inrelation to related party transactions and outstanding balances (including commitments), if certain requirements aremet. 70 Consolidated Financial Statements Notes to the Consolidated Financial Statements

Changes in the scope of consolidation Thescope of consolidation has during the fiscal year 2009/10 changed as follows:

Acquisitions

Nameand location of companyacquired Date of ﬁrst consolidation Acquired stake Trade &Trade S.A.,Spain December Ù], Ùèèz ×èè%

Disposals

Nameand location of companydisposed Date of deconsolidation Disposed stake none

1. Acquisitions 2009/10

In fiscal year2009/10, the following acquisitions/business combinations tookplace:

On December 23, 2009, the Group obtained control of Chocovic Group,aSpanish chocolate manufacturing group,byacquiring 100% of the shares and voting interests of Trade &Trade,S.A, Chocovic Group’sultimate parent. As aresult of the acquisition, the Group is expected to further expand its core business with industrial and artisanal customers as well as its geographic presence,mainly in Southern Europe.

Thefollowing summarizes the major classes of consideration transferred:

in thousands of CHF Ùèèz/×è

Consideration Cash paid Ù],]hÙ Consideration oﬀset with receivables from seller ×F,Rhè Consideration deferred ×ð,R]ð Total consideration transferred ðF,èhz

Thedeferred payments arecontractually due at the first and fifth anniversary of the closing date.Most of the deferred payment is due short-term.Theconsideration due on the fifth anniversary of the closing shall be offset with indemnification claims by the Group.Nopre-existing relationships weresettled in this transaction.

Theagreements with the seller do not contain arrangements for contingent considerations.

TheGroup expensed acquisition-related costs,such as fees for due diligence work and lawyers,of CHF 1.1million over the course of the project immediately in the Consolidated Income Statement (included in General and administration expenses),ofwhich CHF 0.7 million was recognized in the prior fiscal year. Consolidated 71 Financial Statements

in thousandsofCHF Ùèèz/×è

Recognized amounts of identiﬁable assets acquired and liabilities assumed Cash and cash equivalents Ù,Ù×R Trade receivables and other assets ÙÙ,è]× Inventories R,FRÙ Property,plantand equipment F,hRF Intangible assets F,Ùz× Deferred income tax assets Ùzè Bank overdrafts (h,FÙð) Trade payables and other currentliabilities (Ùè,ÙÙh) Deferred income tax liabilities (×,è×Ù) Other non-currentliabilities (F,×FF) Total identiﬁable net assets ]×,Ùðè Goodwill ÙÙ,RÙz Total consideration at fair value ðF,èhz

Thegoodwill of CHF 24.8 million arising from the acquisition is attributable to the skills and technical talents of Chocovic work force,synergies expected to be achieved from integrating the company into the Group’sexisting business and economies of scale expected from combining the operations of the Group andChocovicGroup.Noneofthe goodwill recognizedisexpectedtobedeductible for income tax purposes.

Thefair value of trade receivables and other assets is CHF 42.0 million and includes trade receivables with afair value of CHF 18.3 million.Thegross contractual amount of trade receivables due is CHF 20.8 million, of which CHF 2.5 million is expected to be uncollectible.

TheGroup has not yet finished the valuation of the defined benefitobligations as the actuarial valuation reports werenot yet available.

Contingent liabilities of CHF 2.7 million have been recognized for potential outflow of resources embody- ing economic benefits arising from past events.The liabilities have not been discounted as the settlement is expected to takeplace within 12 months.AsofAugust 31, 2010, therehas been no change in the amounts recognized at the acquisition date,astherehas been no change in the range of outcomes or assumptions used to develop the estimates.

Theselling shareholders have contractually agreed to indemnify Barry Callebaut for amounts that may become payable in respect of certain above-mentioned past events.Anindemnification asset of CHF 0.8 million, equivalent to the fair value of the indemnified liability,has been recognized by the Group. Theindemnification asset is deducted from consideration transferredfor the business combination. As is thecasewiththe indemnified liability, therehas been no change in the amount recognized for the indemnification asset as at August 31, 2010, as therehas been no change in the range of outcomes or assumptions used to develop the estimate of the liability.

Therevenue included in the Consolidated Income Statement since December 23, 2009, contributed by Chocovic Group,was CHF 42.5 million. Chocovic Group has also contributed profitofCHF 3.1 million over the same period.

Had Chocovic Group been consolidated from September 1, 2009, it would have contributed revenue of CHF 72.1 million and net profitfor the year of CHF 4.4 million to the Consolidated Income Statement.

Theinitial accounting for the acquisitions of International Business Company (IBC) and the business from the Japanese confectionery Morinaga &Co. Ltd in the comparable period which weredetermined provisionally,havebeen completed in the meantime.The finalization of the purchase accounting of the Eurogran acquisition led to aminor adjustment of CHF 0.5 million from Goodwill to Brand names. 72 Consolidated Financial Statements Notes

2008/09 In fiscal year 2008/09, the following acquisitions/businesscombinations took place:

International Business Company(IBC) BVBA On October 1, 2008, the Group closed the transaction to acquire100%ofthe sharecapital in IBC,a Belgian company active in the chocolate decoration market. Thecompany mainly serves customers in the Group’sGourmet &Specialties business in Europe and was thereforeintegrated in the Food Service/Retail Business segment and the geographical Region Europe,respectively.Goodwill resulting from that transaction has also been allocated to those segments.

MorinagaTsukaguchi factory On December 1, 2008, the Group has acquired assets from the Japanese confectionary Morinaga &Co. Ltd and entered into along-term supply agreement with Morinaga &Co. Ltd. Duetothe substance of the acquisition agreement entered into with Morinaga, the Group has concluded that the acquisition qualifies as abusiness combination in the scope of IFRS3.The business was subsequently integrated in the Group’sIndustrial Business segment and the geographical Region Asia-Pacificsince the business does generate its sales solely in Asia. Theaccounting for the transaction has led to anegative goodwill which was immediately recognized in the Consolidated Income Statement.

Eurogran A/S On June 1, 2009, the Group has closed the acquisition of the Danish beverage company Eurogran A/S with asubsidiary in United Kingdom. TheDanish operations wereintegrated in the Group’sbeverage business.The business acquired serves customers in Europe,consequently it was integrated into the Group’sFood Service/Retail segment and the geographical Region Europe,respectively.Goodwill resulting from this acquisition was allocated to the same segments as well.

Acquisitions

Pre-acquisi- Fair value Recognized tion carrying adjustments values on amounts ÙèèR/èz acquisition in thousands of CHF ÙèèR/èz ÙèèR/èz

Inventories h,è×è (zRð) F,èÙð Trade receivables and other assets z,hðR (R×) z,Fhh Property,plantand equipment ×F,hzð ×,Ùèz ×R,èèÙ Intangible assets –],h]× ],h]× Other currentliabilities and deferred income (×Ù,]]×)(R×h)(×],×ÙR) Deferred tax,net (F×è)(×,RhÙ)(Ù,ÙRÙ) Other non-currentliabilities (F,ÙÙh)(ðh)(F,ÙRÙ)

Fair value of assets and liabilities acquired ×Ù,]zð ×,×ÙR ×ð,ðÙ]

Goodwill on acquisition ÙÙ,Rzè Negativegoodwill on acquisition (×,ðèÙ)

Consideration,recognized as currentand non-currentliability (×R,hÙÙ)

Consideration,paid in cash× Ùè,×Fz

Cash and cash equivalents less bank overdrafts (net) acquired (Ù,Fðh)

Cash outﬂow foracquisition of subsidiaries,net of cash and bank overdrafts acquired ×h,ð×Ù 1Includeslegal andconsultancy fees of CHF1.1 million Consolidated 73 Financial Statements

Thegoodwill amounting to CHF 24.9 million reflects the value of highly skilled staff, the immediate access to manufacturing resources,supply chain and profound knowledge of the regional market characteristics.The acquisitions allow the Group to leverage on these factors and use related synergies for its strategically targeted regional and business expansion path.

Thenegative goodwill recognized is related to the acquisition of the Tsukaguchi factory and is mainly the result of differences between the value at which property,plant and equipment wereacquired and their fair value assessed by the Group and reflecting the business plan underlying the acquisition.

Theeffect of last year’sacquisitions on the Group’ssales wereapproximately CHF 42 million on net sales revenue and CHF 5.3 million on net profitfromcontinuing operations.Had the acquisitions occurred on September 1, 2008, the Group’snet sales revenue would have been approximately CHF 4,923 million and the net profitfromcontinuing operations approximately CHF 229 million.

2. Disposals

Disposals in 2009/10

No subsidiaries weredisposed of in 2009/10.

Disposals in 2008/09

VanHouten (Singapore) PteLtd On February 28, 2009, Barry Callebaut has sold its Consumer Products subsidiary VanHouten (Singapore) Pte Ltd, domiciled in Singapore, to TheHershey Company and has also licensed the VanHouten brand name and trademarks to Hershey’sfor use in relation to the sale of consumer products in Asia-Pacific, the Middle East,and Australia/New Zealand.

Thetransaction resultedinatotal gain of CHF 17.9 million (net of transaction costs).

in thousands of CHF Ùèèz/×è ÙèèR/èz

Currentassets ],zèh Property,plantand equipmentð Financial liabilities (×,]èR) Other liabilities (Ù,ÙÙh) Net assets disposed of – ×ðh

Costs to sell (FÙR) Proﬁt/(loss)oncurrentyear’sdisposals ×h,zðè Total disposal consideration – ×h,Ùhz

Cash and cash equivalents and bank overdrafts (net) disposed of (ÙR×) Cash inﬂow on disposals – ×h,×zR 74 Consolidated Financial Statements Notes

3. Segmentinformation

External segment reporting is based on the internal organizational and management structure, as well as on the internal information reviewed regularly by the Chief Operating Decision Maker.Barry Callebaut’sChief Operating Decision Maker has been identified as the Executive Committee,consisting of the Group Chief Executive Officer,the Chief Financial Officer and the Presidents of the Regions Europe,Americas and Global Sourcing &Cocoa as well as the Chief Operating Officer and the Chief Innovation Officer.

Financial information by reportable segments

Global Sourcing &Cocoa Europe Americas in thousands of CHF Ùèèz/×è ÙèèR/èz× Ùèèz/×è ÙèèR/èz× Ùèèz/×è ÙèèR/èz×

Revenues from external customers zFÙ,ðzFhÙR,Rzz ],èÙ×,zÙ]],èðF,]×R zzR,×h] zè×,èhð Revenues from transactions with other operating segments of the Group Ù,×]R,R]] ×,zÙÙ,ðRððÙ,hhÙ ÙÙ,××z –– Net revenue ],×è×,ÙÙz Ù,Fz],ÙRÙ ],èzF,h×ð ],×èè,Ù]h zzR,×h] zè×,èhð Operating proﬁt(EBIT)ðÙ,ÙhF ðÙ,ð×F ÙFR,hFÙÙðÙ,ðhR zÙ,ÙðÙ RF,ÙRÙ

Depreciation and amortization (Ùè,hh])(Ùè,èèF)(ðð,]]×)(ðR,RÙ×)(×ð,FhF)(×Ù,F]F) Impairmentlosses – (Ù]h) – (]Ùz) ––

Total assets ×,ð]R,ÙRF ×,ÙÙF,F×Ù ×,ÙÙ],F×Ù ×,ðÙè,Fzh ðz],zÙ× ðhÙ,×Ù× Additions to property,plant, equipmentand intangible assets (Ùh,]Ùz)(]F,]]è)(ÙR,zzh)(]F,RzÙ)(Ù×,hèF)(ÙÙ,×Ùè) 1Certain comparatives have been reclassiﬁed to conform with the currentperiod’spresentation

TheExecutive Committee considers the business from ageographic view and, hence,Presidents were appointed for each region. Since the Group’ssourcing and cocoa activities operate independently of the regions,the Global Sourcing &Cocoa business is reviewed by the Chief Operating Decision Maker as an own segment in addition to the geographical Regions Western Europe,Eastern Europe,Americas and Asia-Pacific. Forthe purpose of the consolidated financial statements,the Regions Western Europe and Eastern Europe wereaggregated since the businesses aresimilar and meet the criteria for aggre- gation. Furthermore, the Executive Committee also views the Corporate function independently.The function Corporate consists mainly of headquarters services to other segments and does not generate revenues.Thus,the Group reports Corporate as areconciling item between the segments and the consolidated figures. Consolidated 75 Financial Statements

Thesegment Global Sourcing &Cocoa is responsible for the procurement of ingredients for chocolate production (mainly cocoa; sugar,dairy and nuts arealso common ingredients) and the Group’scocoa processing business.Most of the revenues of Global Sourcing &Cocoa aregenerated with the other segments of theGroup.The business conducted in the regions consists of chocolate production for industrial customers,hotel, restaurants and cafeterias (gourmet business) and to alesser extent, consumer products.

Therevenues generated by Global Sourcing &Cocoa with other segments areconducted on an arm’s length basis.For internal purposes,some of its operational profits areallocated to the regions which act as major customers of Global Sourcing &Cocoa.

Asia-PaciﬁcTotal Segments CorporateEliminations Group Ùèèz/×è ÙèèR/èz× Ùèèz/×è ÙèèR/èz× Ùèèz/×è ÙèèR/èz× Ùèèz/×è ÙèèR/èz× Ùèèz/×è ÙèèR/èz

Ù××,èFh ×h],RRðð,Ù×],hhz Ù,RRè,×hh ––––ð,Ù×],hhz Ù,RRè,×hh

––Ù,×z],Fèð×,zRR,hèÙ ––(Ù,×z],Fèð) (×,zRR,hèÙ) –– Ù××,èFh ×h],RRð h,Ùèh,]RÙ F,RFR,RR× ––(Ù,×z],Fèð) (×,zRR,hèÙ) ð,Ù×],hhz Ù,RRè,×hh Ùè,zèR Ùz,ÙÙh Ù]F,ðzR ÙÙè,Fè] (FF,×Rh)(Fz,Rðè) ––]hè,Ù×× ]ðè,hð]

(ð,ÙFÙ)(F,Rhè)(zh,èÙÙ)(×èè,]ðÙ)(],ÙÙh)(ð,èÙ×) ––(×èè,ÙRz)(×èð,]hÙ) –––(ðFF) –––––(ðFF)

××Ù,è]R ××F,èhh ],FRz,Rðh],F]h,ðÙhFF×,ðèÙ FÙF,ÙRÙ (hRè,ð×Ù)(hÙR,zFÙ)],ðhè,RÙh],ð×Ù,RÙh (Ù,ÙhÙ) (ð,hFF)(×ÙÙ,]ÙF)(×Ù],×èR)(ÙÙ,hR])(Ù×,]]ð) ––(×Ùð,×èR)(×ÙÙ,ÙÙ])

Segment revenue,segment results (operating profitEBIT) and segment assets correspond to the Group’s consolidated financial statements.Financial income and expense,the Group’sinterest in the profitof associates and joint ventures accounted by the equity method and income taxes arenot allocated to the respective segment for internal management purposes.These items can be found below in the reconciliation of the EBIT to the net profitfor the year.

Thefollowing table shows the reconciliation of EBIT to net income for the year as reported in the Consolidated Income Statement:

Reconciliation of EBIT to net proﬁtfor the year

in thousandsofCHF Ùèèz/×è ÙèèR/èz

Operating profit ]hè,Ù×× ]ðè,hð] Financial income Ù,èÙ× ð,zèÙ Financial expense (R],×ÙÙ)(zh,Ùz]) Result from investments in associates and jointventures (ÙÙð) ÙRÙ Profitbeforeincome taxes ÙRz,èRð Ùðz,FÙR Income taxes (]h,]ÙÙ)(]Ù,hÙ]) Net profitfor the year Ùð×,hÙ] ÙÙF,zÙð 76 Consolidated Financial Statements Notes

Additional entity-wide disclosures

Information on geographical regions Theentity is domiciled in Switzerland; however,its major revenues aregenerated in other countries. Thefollowing table shows revenues and non-current assets excluding deferred tax assets and pension assets allocated to the entity’scountry of domicile and the major countries wherethe Group is generating revenues and/or to those countries wherethe non-current assets as defined above arematerial.

Revenues Non-currentassets in thousands of CHF Ùèèz/×è ÙèèR/èz Ùèèz/×è ÙèèR/èz

United States RÙè,ðÙ]h×],ðèÙ ×RÙ,×è] ×RÙ,Ùèh Germany hÙ×,z]F hRh,ÙÙF ×Ùh,ÙFh ×ðz,RðÙ France Ùzz,×]Ù ðz],RÙÙ ×èè,h×Ù ××ð,èFè United Kingdom ÙzÙ,Ùè] ðèR,ðRR ]è,×Ùè ]],ÙÙð Italy ]ÙÙ,èÙð ]Ù×,RÙh ÙÙ,F]è Ùh,×zR Belgium ]]z,hÙz ]ðè,×RR ÙFz,hhè ÙRð,zzF Switzerland Ùz,hRF ðÙ,]]] hÙ,ðÙF ðÙ,FÙF Other ×,zÙR,ÙÙð ×,ð]Ù,ÙRz ð]Ù,è×è ðèz,zðF Total ð,Ù×],hhz Ù,RRè,×hh ×,]Ù],]Fè ×,]FF,×ÙÙ

Information on productgroups TheGroup has numerous products that aresold to external customers.Therefore, for internal review by the Chief Operating Decision Maker,information on products is aggregated on abusiness level. The following table breaks down external revenues into product groups:

Segmentinformation by productgroup

in thousandsofCHF Ùèèz/×è ÙèèR/èz

CocoaProducts zFÙ,ðzFhÙR,zè× Food Manufacturers Products Ù,h×F,ðèz Ù,Fèð,FèR Gourmet &Specialties Products hèh,F]FF×z,èÙR Consumer Products RÙh,è]R zèF,FÙè Revenues from external customers ð,Ù×],hhz Ù,RRè,×hh

No single external customer accounts for morethan 10% of total consolidated revenues. KoConsolidanzernrechnungted 77 Financial Statements

4. Personnel expenses

in thousandsofCHF Ùèèz/×è ÙèèR/èz

Wagesand salaries (]hF,]ðz)(]hÙ,èhÙ) Compulsorysocial security contributions (Rz,Fhz)(zÙ,Ù]è) Equity-settled share-based payments (ð,h×F)(××,ðhh) Expenses related to defined benefitplans (×ð,Fèh)(×Ù,Fh×) Contributions to defined contribution plans (×,èðR)(RÙð) Increase in liability forlong service leave (]F)(F×) Total personnel expenses (ÙRR,Ùðð) (ÙRz,F]R)

5. Research and developmentexpenses

in thousandsofCHF Ùèèz/×è ÙèèR/èz

Total research and developmentexpenses (×F,zzè)(×z,]hR)

Research and development costs not qualifying for capitalization aredirectly charged to the Consoli- dated Income Statement and arereported under Marketing and sales expenses and General and administration expenses.

6. Other income

in thousands of CHF Ùèèz/×è ÙèèR/èz

Gain on disposal of property,plantand equipment F,×hh ×,F×ð Group training centers,museums,outlets and rental income ],hzz ],ðÙÙ Sale of shells of cocoabeans and waste ],×zR],ÙRð Litigations,claims and insurance Ù,zèÙ×,zÙ] Release of unused provisions and accruals ×,FhRR]h Gain on disposal of subsidiaries (note Ù) – ×h,zðè Recognition of negativegoodwill on acquisitions (note ×) – ×,]Rð Other Ù,hèÙ ],RÙè Total other income Ùè,ÙðF]Ù,]ðh

7. Other expenses

in thousandsofCHF Ùèèz/×è ÙèèR/èz

Restructuring costs (R,z×F)(z,zÙh) Loss on sale of waste (Ù,èRR)(Ù,z×è) Litigations and claims (×,hÙ×)(×,ð×R) Costs related to chocolate museums (×,èÙÙ)(FzF) Loss on sale of property,plantand equipment(Ùð) (×,ðRð) Impairmentonproperty,plantand equipment(note ×ð) – (ðFF) Other (Ù,RÙz)(],ÙhÙ) Total other expenses (×F,FÙ×)(Ùè,ÙzÙ) 78 KoConsolidanzernrechnungted Financial Statements Notes

8. Financial income

in thousandsofCHF Ùèèz/×è ÙèèR/èz

Interest income Ù,èÙ× ],RR] Gains on derivative ﬁnancial instruments – Ù,èÙ× Total ﬁnancial income Ù,èÙ× ð,zèÙ

In prior year, gains on derivative financial instruments amounted to CHF 2.0 million and, among other, comprise the fair value change of the free-standing interest rate derivatives for 2008/09.

9. Financial expenses

in thousandsofCHF Ùèèz/×è ÙèèR/èz

Interest expenses (Fh,èF×)(RF,ÙÙ]) Loss on derivative financial instruments (F,FFÙ) – Structuring fees (×,ðFè)(×,Ùèh) Chargesonundrawnportion of committed credit facilities (×,ÙRð) (×,hèz) Total interest expenses (hF,hhè)(Rz,×]z) Bank chargesand other financial expenses (Ù,Ù×h)(ð,èhz) Foreign exchangelosses,net (×,z]ð) (],Ùhð) Total financial expenses (R],×ÙÙ)(zh,Ùz])

Interest expenses include the net cost of interest rate swaps and result from paying fixed interest rates in exchange for receiving floating interest rates.Interest expenses for 2009/10 also include interest paid under the asset-backed securitization program for trade receivables of an amount of CHF 3.5 million (2008/09: CHF 3.9 million).

Loss on derivative financial instruments amounted to CHF 6.7 million and, among other,comprise the fair value change of the free-standing interest rate derivatives for 2009/10.

Structuring fee expenses aremainly attributable to the EUR 850 million Revolving Credit Facility and the EUR 350 million Senior Bond (see note 23) and represent the related amortization charges.

Thecharges on the undrawnportion of the committed EUR 850 million Revolving Credit Facility amount to CHF 1.5million for 2009/10 (2008/09: CHF 1.7million). KoConsolidanzernrechnungted 79 Financial Statements

10.Income tax expenses

in thousandsofCHF Ùèèz/×è ÙèèR/èz

Currentincome tax expenses (ÙF,Rè×)(]Ù,]×Ù) Deferred income tax income/(expenses) z,Ùðz (Ù××) Total income tax expenses (]h,]ÙÙ)(]Ù,hÙ])

Reconciliation of income tax expenses

in thousandsofCHF Ùèèz/×è ÙèèR/èz

Proﬁtbeforeincome taxes ÙRz,èRð Ùðz,FÙR Expected income tax expenses at weighted averageapplicable tax rate (ÙR,zzF)(Ùz,hèð) Non-tax deductible expenses (],ÙzÙ)(],ððè) Taxdeductible items not qualifying as an expense under IFRS ×F,ÙFÙ×h,ðzÙ Taxexempt income Ù,]ðð Ù,hhè Income recognized fortax declarations purposes only (×,]zÙ)(×,FRÙ) Prior period related items (F,ÙðR) ×,Ù]z Changes in tax rates ×,è×Ù Ù,]ð× Losses carried forwardnot yetrecognized as deferred tax assets (ð,ÙÙ×)(h,zÙz) Taxrelief on losses carried forwardformerly not recognized as deferred tax assets R,ðRF ð,zz] Total income taxes (]h,]ÙÙ)(]Ù,hÙ])

Forthe reconciliation as above,the Group determines the expected income tax rate by weighting the applicable tax rates in the jurisdictions concerned based on the mix of the profitbeforetaxes per jurisdiction, resulting for 2009/10 in aweighted average applicable tax rate of 16.95% (2008/09 :19.14%).

Theapplicable expected tax rate per company is the domestic corporate income tax rate applicable to theprofitbeforetaxes of the company for fiscal year 2009/10.Thedecrease of the weighted average appli- cabletax rate is due to the morefavorable company mix of the profitbeforetaxes.

Thetax relief on tax losses carried forwardformerly not recognized as deferred tax assets amounts to CHF 8.6 million for the year 2009/10. Theamount consists of CHF 4.6 million utilization of tax losses carried forwardpreviously not recognized and CHF 4.0 million tax losses carried forwardrecognized as adeferred tax asset for the first time during the year 2009/10.

11. Earnings per share

in CHF Ùèèz/×è ÙèèR/èz

Basic earnings per share(CHF/share) ÙR.FÙ Ù].zz Diluted earnings per share(CHF/share) ÙR.Ùh Ù].Rð

Thefollowing amounts of earnings have been used as the numerator in the calculation of basic and diluted earnings per share:

in thousands of CHF Ùèèz/×è ÙèèR/èz

Net profitfor the year attributable to ordinaryshareholders, used as numerator forbasic earnings per share Ùð×,ÙÙF ÙÙF,zèh After-tax effectofincome and expenses on dilutivepotential ordinaryshares –– Adjusted net profitfor the year used as numerator fordiluted earnings per share Ùð×,ÙÙF ÙÙF,zèh 80 KoConsolidanzernrechnungted Financial Statements Notes

Thefollowing numbers of shares have been used as the denominator in the calculation of basic and diluted earnings per share:

Ùèèz/×è ÙèèR/èz

Weighted averagenumber of shares issued ð,×hè,èèè ð,×hè,èèè Weighted averagenumber of treasuryshares held Ù,zhR ××,zR× Weighted averagenumber of ordinaryshares outstanding,used as denominator forbasic earnings per share ð,×Fh,èÙÙ ð,×ðR,è×z Equity-settled share-based payments ×F,×zF ×F,zÙÙ Adjusted weighted averagenumber of ordinaryshares,used as denominator fordiluted earnings per share ð,×R],Ù×R ð,×hÙ,zF]

12. Trade receivables and other currentassets

as of August ]×, Ùè×è Ùèèz in thousands of CHF

Trade receivables ]×Ù,F]F]Ùz,Ù×F Fair values of hedged ﬁrm commitments zR,Fð× ÙÙ,ð]Ù Prepayments hÙ,èF] ÙR,h×] Other currentassets h,z×ð R,zFF Accrued income Ù,×Ù] Ù,hFè Receivables from related parties Ù×zÙ Other taxes and receivables from governmentðð,zzè FÙ,h×è Loans and other receivables ]Ù,èèè Ùz,ððF Total trade receivables and other currentassets ðRh,]Rè ðÙÙ,RÙh

TheGroup runs an asset-backed securitization program, whereby trade receivables aresold at their nominalvalue minus adiscount in exchange for cash.Thenet amount of the sold receivables is CHF 255.1 million as of August 31, 2010 (2009: CHF 262.4 million), and was derecognized from the balance sheet.

Aging of trade receivables

as of August ]×, Ùè×è Ùèèz in thousands of CHF

Total trade receivables ]]Ù,Fðè ]hÙ,èèR Less impairmentprovision fortrade receivables (Ùè,è×Ù) (ÙÙ,ðzÙ) Total trade receivables ]×Ù,F]F]Ùz,Ù×F

Of which: Not overdue ÙFz,èzÙÙhF,Ù]Ù Impairmentprovision fortrade receivables not overdue (×ÙÙ) (Fð]) Past due less than zè days ]ð,ÙÙh ðÙ,×hR Impairmentprovision fortrade receivables past due less than zè days (]Ùh)(]zF) Past due morethan zè days ]è,×]× Ù×,ðzR Impairmentprovision fortrade receivables past due morethan zè days (×z,ðÙ])(Ù×,ðÙ]) Total trade receivables ]×Ù,F]F]Ùz,Ù×F

Thetrade receivables arecontractually due within aperiod of one to 120 days.

Theindividually impaired receivables mainly relate to customers,which areindifficult economic situations. KoConsolidanzernrechnungted 81 Financial Statements

Movements in impairmentprovision fortrade receivables

in thousandsofCHF Ùèèz/×è ÙèèR/èz

as of September ×, ÙÙ,ðzÙÙè,ð×Ù Additions h,×h× h,hR] Amounts written of as uncollectible (],Rðè)(Ù,Ùhz) Unused amounts reversed (Ù,]]è)(Ùèz) Currency translation adjustment(],ðFz)(×,Ù×h)

as of August ]×, Ùè,è×Ù ÙÙ,ðzÙ

Based on historic impairment rates and expected performance of the customers’ payment behavior,the Group believes that the impairment provision for trade receivables sufficiently covers the risk of default. Based on an individual assessment on the credit risks related with other receivables,the Group identified no need for an impairment provision. Details on credit risks can be found in note 26.

13. Inventories

as of August ]×, Ùè×è Ùèèz in thousands of CHF

Cocoabean stocks ]Fz,hðR Ù]F,hðÙ Semi-ﬁnished and ﬁnished products FzR,ÙÙ]hÙÙ,zRF Other rawmaterials and packaging materials ××R,Ù]è ×]Ù,Rèð Total inventories ×,×RF,Ù]××,ÙzÙ,ðÙð

Thereofstockscarried at fair value less costs to sell Cocoabean stocks ]ð×,èFÙÙÙè,×hz Semi-ﬁnished and ﬁnished products ð]z,hðÙ ððð,ÙFh Other rawmaterials ðè,zzR ðR,Ù×z Total stockscarried at fair value less costs to sell zÙ×,R×Ù ×,è]],FFð

Barry Callebaut applies the broker-trader exemption in accordance with IAS2.5 for the Contract Business and thereforemeasures its Contract Business inventories at fair value less costs to sell. Barry Callebaut fulfills the requirement of abroker-trader as it holds inventories with the purpose of generating aprofitfromshort-term fluctuations in price or dealer’smargin. All commodities,including industrial chocolate,are valued based on the rawmaterial prices at the balance sheet date.

In the Price List Business Barry Callebaut is committed to sell its products at a fixed price over acertain period of time,i.e.the period of validity of the respective price list. Inventories dedicated to the Price List Business arethereforemeasured at the lower of cost or net realizable value.

As of August 31, 2010, inventories amounting to CHF 19.1 million (2009: CHF 5.8 million) arepledged as security for financial liabilities.

In fiscal year 2009/10, inventory write-downs of CHF 4.8 million wererecognized as expenses (2008/09: CHF 5.5 million). 82 KoConsolidanzernrechnungted Financial Statements Notes

14.Derivative ﬁnancial instruments and hedging activities

Derivative Derivative Derivative Derivative financial financial financial financial assets liabilities assets liabilities as of August ]×, Ùè×è Ùèèz in thousands of CHF

Cash FlowHedges Interest rate risk Swaps –h,è]è –h,h]× Fair Value Hedges Sales price risk (Cocoa/other ingredients) Forwardand futures contracts Ù×,×hð ×],Ùzè ×h,hRÙ Ùè,RðÙ Foreign exchangerisk Forwardand futures contracts Ù],]]Ù×F,×ÙzÙè,zhè×ð,RRè Other – no hedgeaccounting Rawmaterials Forwardand futures contractsand other derivatives ÙðF,ÙRð ÙFh,ÙÙè ×FÙ,]]ÙðR,ðÙR Foreign exchangerisk Forwardand futures contracts Ùz,hRRF],hÙÙ ×z,ÙzR]è,zÙR Interest rate risk Swaps –],ÙÙF ×,ÙFð ]

Total derivative ﬁnancial assets ]hè,ðRè ÙÙ×,FÙz Total derivative ﬁnancial liabilities ]h×,èðz ×ð],zÙÙ

Derivative financial instruments consist of items used in acash flow hedging model, items used in afair value hedging model and fair valued instruments,for which no hedge accounting is applied.

Fordetailed information on fair value measurement refer to note 26, Fair Value – Hierarchy. KoConsolidanzernrechnungted 83 Financial Statements

Eﬀectofcash ﬂow hedges on equity

Interest rate risk Total hedging reserve in thousands of CHF as of August ]×, ÙèèR (×,Ù×z)(×,Ù×z)

Movements in the period: Gains/(losses)taken into equity (F,]Rè) (F,]Rè) Transfer to the Consolidated Income Statementfor the period (ÙÙ) (ÙÙ) Taxes Ù,ðFF Ù,ðFF Currency translation adjustment F] F] as of August ]×, Ùèèz (Ù,zzÙ)(Ù,zzÙ)

Movements in the period: Gains/(losses)taken into equity (F,ÙFð) (F,ÙFð) Transfer to the Consolidated Income Statementfor the period ×,Rè× ×,Rè× Taxes ×,ðRð ×,ðRð Currency translation adjustment ×,èRÙ ×,èRÙ as of August ]×, Ùè×è (F,zRh)(F,zRh)

Cash ﬂow hedges In the course of fiscal year 2009/10, the Group entered into interest rate derivatives (exchanging floating into fixed interest rates) according to the guidelines stipulated in the Group’sTreasury Policy(refer to note 26). In order to avoid volatility in the income statement, the interest rate derivatives have been put in cash flow hedge relationship reflecting the underlying currencymix of the Group’sdebt portfolio.The following table provides an overview over the periods in which the cash flow hedges areexpected to impact the Consolidated Income Statement (beforetaxes):

First Second After Expect- First Second After Expect- year to fifth five ed cash year to fifth five ed cash year years flows year years flows as of August ]×, Ùè×è Ùèèz in thousands of CHF

Derivative ﬁnancial liabilities (],è]ð) (Ù,zÙ×)ððð (h,Ùè×) (ð,ðzR)(Ù,zFè) – (R,ððR) Total net (],è]ð) (Ù,zÙ×)ððð (h,Ùè×)(ð,ðzR)(Ù,zFè) – (R,ððR) 84 Consolidated Financial Statements Notes

Fair value hedges Fair value hedges include forwardpurchase commitments,cocoa futurecontracts and inventories at fair value less cost to sell designated as the hedging instruments for commodities related to firm sales commitments as well as in relation to foreign currencyrisks.

Forthe fair value hedge relationship of the Contract Business,the Group also considers its related inventories carried at fair value less costs to sell as hedging instruments.Inventories held in accordance with the broker-trader exemption have essentially similar characteristics to aderivative financial instrument on commodities and thereforequalify as hedging instrument in accordance with Barry Callebaut’s business model in the Contract Business.The amount of fair value adjustments to inventories on August 31, 2010, was CHF -78.1 million (2009: CHF 78.2 million).

All financial derivatives and the hedged items aremarked at fair value.For fair value hedges,the Group recorded aloss on hedging instruments of CHF 92.8 million for fiscal year 2009/10 (2008/09: loss of CHF 49.0 million) and again on hedged items of CHF 92.8 million (2008/09: gain of CHF 49.0 million). Thefair value at balance sheet date of the hedged firm commitments under the fair value hedge accounting model – being the related firm sales commitments in respect of sales price risk (including cocoa components and non-cocoa components,such as sweeteners,dairy and nuts) and the related sales and purchase contracts with respect to foreign currencyrisks – is outlined in the table hedged firm commitments below.The balance of these items at balance sheet date is presented under trade receivables and other current assets (see note 12) and trade payables and other current liabilities (see note 21), respectively.

Hedged ﬁrm commitments

in thousandsofCHF Assets Liabilities Assets Liabilities as of August ]×, Ùè×è Ùèèz

Commodity price risk (cocoa and other ingredients) – sales contracts z×,ÙèF Ù×,×hÙÙè,RðÙzð,zhz Foreign exchangerisk – sales and purchase contracts h,ÙÙð ðR××,FRÙ ð,ðz] Total fair value of hedged ﬁrm commitments zR,Fð× Ù×,hðð ÙÙ,ð]Ù ×è×,ðhÙ

Other – no hedgeaccounting This position contains the fair values of derivative financial instruments of the Group’spurchasing and sourcing center and the Group’sTreasury center,which arenot designated for hedge accounting. Consolidated 85 Financial Statements

15.Property,plantand equipment

Land and Plantand Oﬃce Under Total buildings machinery equipment, construction Ùèèz/×è furnitureand motor vehicles in thousands of CHF

At cost as of August ]×, Ùèèz FèF,Ùzè ×,ÙèR,èð××ÙÙ,èèÙ Ùè,ðÙF Ù,×zz,èRz ChangeinGroup structure – acquisitions Rè ð,ðzð Ùhð R]FF,hRF Additions ×Ù,ÙÙ× ðè,FÙÙ h,ð×h ÙR,RhF ××z,ÙðR Disposals (ÙF,ðÙè)(×h,×RR)(Ù,ÙÙ×) – (ÙF,×Ùz) Currency translation adjustments (F],Ù×])(×ÙF,èzR)(×h,]Ùh)(],h]])(Ù]è,]h×) Reclassiﬁcations from under construction Ù,×èè Ùè,hÙè ×,]F× (ÙÙ,×R×) – Other reclassiﬁcations ×Rz ]è (Ù×z) ––

as of August ]×, Ùè×è ð]×,]Fh ×,]Ù×,h]Ù ×]],×FR FÙ,]ÙÙ Ù,èÙR,F×]

Accumulated depreciation and impairmentlosses as of August ]×, Ùèèz ]×z,R]è RRR,××Ù ××R,FRh–×,]ÙF,F]× Depreciation charge ×Ù,zh] ðÙ,hRÙ R,×èF–hh,RF× Disposals (×z,FèR)(×è,Rzh)(Ù,Ù×F) – (]Ù,hÙ×) Currency translation adjustments (]R,]FÙ)(×è×,×Ùh)(×Ù,ð]ð) – (×ðÙ,èÙÙ) Other reclassiﬁcations RF× (hzR)(F]) ––

as of August ]×, Ùè×è Ùhh,FzÙ R]è,èhÙ ×èz,zhz – ×,Ù×h,hÙh

Net as of August ]×, Ùè×è Ùð],Fh] Ùz×,FFè Ù],×Rz FÙ,]ÙÙ R]è,RFF 86 Consolidated Financial Statements Notes

Land and Plantand Oﬃce Under Total buildings machinery equipment, construction ÙèèR/èz furnitureand motor vehicles in thousands of CHF

At cost as of August ]×, ÙèèRFÙ×,hÙh ×,]]R,RRð ×Ùh,××h ×Ùð,ð]ÙÙ,Ù]],ÙR× ChangeinGroup structure – acquisitions ×,RR] ×ð,zhÙ×Ùz–×R,èèÙ ChangeinGroup structure – disposals –– (Fh) – (Fh) Additions Ùè,ðRz ðR,zhF h,××× ÙF,F]R ××],]×Ù Disposals (×ðz)(×ð,FhF)(Ù,]ÙÙ)(z)(×R,×RF) Currency translation adjustments (Ù],R×R)(Rh,RÙÙ) (z,ÙÙ×)(F,×hÙ) (×Ùh,Ùðh) Reclassiﬁcations from under construction h,hÙh zh,ÙÙh ÙFh (×èð,ÙÙ×) – Other reclassiﬁcations (×,Ùzz) ]×× ×,×RR –

as of August ]×, Ùèèz FèF,Ùzè ×,ÙèR,èð××ÙÙ,èèÙ Ùè,ðÙF Ù,×zz,èRz

Accumulated depreciation and impairmentlosses as of August ]×, ÙèèR]ÙÙ,FRhRzh,zhð ××z,hèF–×,]ÙÙ,]FR ChangeinGroup structure – disposals –– (FÙ) –(FÙ) Depreciation charge ×ð,×ÙR ðz,×hR h,zR] –RÙ,]èz Impairmentlosses – ððz h–ðFF Disposals (h])(×],ðÙÙ) (Ù,ÙÙz) – (×ð,RÙF) Currency translation adjustments (×z,ÙèF)(ðF,Ùè×)(h,Ùzh) –(RÙ,hèÙ) Other reclassiﬁcations (hÙF) ×Ùh ðzz ––

as of August ]×, Ùèèz ]×z,R]è RRR,××Ù ××R,FRh–×,]ÙF,F]×

Net as of August ]×, Ùèèz ÙRF,FFè ð×z,z]h Ùð,]×ðÙè,ðÙFRhÙ,ÙðR

As required by the accounting standards,the Group periodically reviews the remaining useful lives of assets recognized in property,plant and equipment.

Therewas no impairment loss in property,plant and equipment in fiscal year 2009/10 (2008/09: CHF 0.6 million).

Repair and maintenance expenses for the fiscal year 2009/10 amounted to CHF 65.0 million (2008/09: CHF 61.9 million).

The fire insurance value of property,plant and equipment amounted to CHF 2,749.8 million as of August 31, 2010 (2009: CHF 2,866.9 million).

As of August 31, 2010, plant and equipment held under financial leases amounted to CHF 2.9 million (2009: CHF 0.2 million). Therelated liabilities arereported under short-term and long-term debt (see notes 20 and 23).

As of August 31, 2010, no financial liabilities weresecured by means of mortgages on properties (2009: none). Consolidated 87 Financial Statements

16.Obligations under ﬁnanceleases

Minimum leasepayments Presentvalue of minimum lease payments as of August ]×, Ùè×è Ùèèz Ùè×è Ùèèz in thousands of CHF

Amounts payable under finance leases within one year Fh] Ùè F]h]ð in the second to fifthyear inclusive ×,èÙhhÙRzð FR morethan five years Ùðh–]ðz – Total amountpayable under financeleases Ù,×ðh ××Ù ×,Rz××è] Less: future finance charges(ÙFF)(z) –– Presentvalue of lease obligations ×,Rz××è]×,Rz××è] Amountdue forsettlementnext ×Ù months (note Ùè) F]h]ð Amountdue forsettlementafter ×Ù months (note Ù]) ×,ÙðÙ FR

TheGroup entered into finance leasing arrangements for various assets.The weighted average term of finance leases entered into is 5.8 years (2008/09: 4.7 years). Theaverage effective interest rate was 4.7% (2008/09: 3.2%). Interest rates are fixed at the contract date.All leases areonafixed repayment basis and no arrangement has been entered into for contingent rental payment.

Net carrying amountof property,plantand equipmentunder ﬁnance lease as of August ]×, Ùè×è Ùèèz in thousands of CHF

Land and buildings ×,ÙRF – Plantand machinery z]F hÙ Furniture, equipmentand motor vehicles FzF ×hÙ Total assets under ﬁnancial lease Ù,z×R ÙÙF

17.Investments in associates and jointventures Thecarrying amount of investments in associates and joint ventures changed as follows:

in thousands of CHF Ùèèz/×è ÙèèR/èz

as of September × ,Ù,è]R ],ðÙR Acquisition of associates and jointventures – ×Fð Shareof(loss)/proﬁt(ÙÙð) ÙRÙ Exchangediﬀerences (]]Ù) (×]z) as of August ]×, ],Ùhz Ù,è]R

TheGroup’sinvestments in associates and joint ventures areattributable to the following companies:

Ownership in % Ùèèz/×è ÙèèR/èz

as of August ]×, African Organic Produce AG,Switzerland Ùz Ùz Biolands International Ltd, Tanzania Ùz Ùz Shanghai Le Jia Food Service Co.Ltd,China ðè ðè PasteleríaTotel, S.L.,Spain Ùè Ùè Bombones yChocolates Semar,S.L., Spain Ùè Ùè 88 Consolidated Financial Statements Notes

Summarized financialinformation in respect of the Group’sassociates and joint ventures is set out below.

in thousandsofCHF Ùè×è Ùèèz

Total currentassets ×Ù,ðRÙ ×h,×ðh Total non-currentassets F,]]Ù F,Ùz× Total currentliabilities ×],×Rh ×F,Ù]è Total non-currentliabilities Ù,zÙ] Ù,RÙð Net assets as of August ]×, Ù,hRR Ù,]h] Group’sshareofnet assets of associates and jointventures ],Ùhz Ù,è]R

in thousands of CHF Ùèèz/×è ÙèèR/èz

Total revenue ]Ù,×Ù]]],hzz Total proﬁtfor the period (Ùhh) hèR Group’sshareofproﬁts of associates and jointventures (ÙÙð) ÙRÙ

18. Intangible assets

Goodwill Brand Development Other Total Ùèèz/×è names costs in thousands of CHF

At cost as of August ]×, Ùèèz Ù××,RÙ]]R,×]Ù×zÙ,zFè ×Ù,ðRð Fðz,ðÙÙ ChangeinGroup structure – acquisitions ÙÙ,]hÙ F,hÙz ––]×,×Ù× Additions ––Ù],zhÙ×,RhF Ùð,Rðè Disposals ––(ðzR) – (ðzR) Currency translation adjustments (h,èhz)(RÙ×)(ÙF,F×Ù) (×,è××)(]ð,ðÙð)

as of August ]×, Ùè×è ÙÙz,×]F ÙÙ,èFÙ×z×,hÙÙ ×ð,Ùðè FRè,]hè

Accumulated amortization and impairmentlosses as of August ]×, Ùèèz – ÙF,]]ð ×]Ù,Rzz F,FèÙ ×Fð,R]R Amortization charge – Ù,×Rè ×z,]èÙ zÙF ÙÙ,ÙÙR Disposals ––(ðÙè) – (ðÙè) Currency translation adjustments – (]R)(×z,èèÙ)(R×è)(×z,Rðè)

as of August ]×, Ùè×è – ÙR,Ùhh ×]Ù,Fðz F,hÙè ×Fh,RhF

Net as of August ]×, Ùè×è ÙÙz,×]F ×ð,ðRððz,èF] R,h×è ð×Ù,ÙzÙ Consolidated 89 Financial Statements

Goodwill Brand Development Other Total ÙèèR/èz names costs in thousands of CHF

At cost as of August ]×, ÙèèR]zh,ÙÙF]F,Fz××hÙ,Ù×××],]è×FÙ×,FÙz ChangeinGroup structure – acquisitions ÙÙ,hzF],Ùð× ––ÙR,èÙh Additions ––]è,F×× ð×R]×,×Ùz Disposals ––(F×)(Ù]×)(ÙzÙ) Currency translation adjustments (×è,]zz) ×× (z,z]Ù) (FRz)(Ù×,è××) Other reclassiﬁcations – (×,R×z) ×]] ×,FRF– as of August ]×, Ùèèz Ù××,RÙ]]R,×]Ù×zÙ,zFè ×Ù,ðRð Fðz,ðÙÙ

Accumulated amortization and impairmentlosses as of August ]×, ÙèèR–ÙÙ,Fh××Ù×,èFR F,ðRè ×ðè,]×z Amortization charge –],RÙF ×R,hFz Ùðè Ù],èFð Disposals –– –(Ù]×)(Ù]×) Currency translation adjustments – (])(F,zzR)(]×Ù) (h,]×ð) Other reclassiﬁcations – (×hz) Fè ××z – as of August ]×, Ùèèz – ÙF,]]ð ×]Ù,Rzz F,FèÙ ×Fð,R]R

Net as of August ]×, Ùèèz Ù××,RÙ] ××,hzz FÙ,èF× h,zR× Ùz],FRÙ

Additions to development costs amount to CHF 24.0 million in fiscal year 2009/10 (2008/09: CHF 30.6 million). In both years additions mainly included costs related to various projects of internally generated software. Furthermore, costs related to recipes and innovations of CHF 2.5 million werecapitalized as development costs.

Theremaining amortization period for brand names varies between three and five years,for software between two and five years and for other including patents between four and fourteen years.The amortization charge is included in the position General and administration expenses in the Consolidated Income Statement.

Impairmenttestingfor cash-generatingunits containing goodwill Thecarryingamountofgoodwill for the Group amounts to CHF429.1 million (2008/09: CHF411.8 million). Theallocation to the segments is as follows: as of August ]×, Ùè×è in million of CHF

Global Sourcing &Cocoa ×Ùz.ð Western Europe ÙÙR.z Americas Ùð.Ù Asia-Paciﬁcð.ð Total ÙÙz.×

TheGroup has reorganized its internal reporting to better reflect its organizational structureand the Company’sstrategic goal to expand its activities in high-growth countries in order to increase its global presence.Asaresult, therehavebeen changes in the composition of cash-generating units (CGU) to which goodwill has been allocated and hence,tothe external segment reporting.Goodwill had to be reallocated to the newly determined CGUs at which goodwill is monitored for internal management purposes. 90 Consolidated Financial Statements Notes

Thegoodwill impairment testing was based on the new CGUs and the related assumptions.The testing for the previous year was not re-performed.Theallocation of goodwill had been made in respect of business segments in prior years and was as follows:

as of August ]×, Ùèèz in million of CHF

Cocoa ×Ùz.Ù Food Manufactures hh.z Gourmet &Specialties ×ÙR.F Consumer ðð.z Total Ù××.R

Goodwill acquired in abusiness combination is allocated to the respective segment that is expected to benefitfromthe synergies of the combination, at acquisition date.The segments represent the lowest level within the entity at which the goodwill is monitored for internal management purposes.Due to the Group’sfully integrated business in the regions,the segments areidentified as the lowest level of identifiable cash inflows.Thus,the impairment test is performed on asegment level.

Forthe impairment test, the recoverable amount of aCGU is based on its value in use and is compared to the carrying amount of the corresponding CGU.Futurecash flows arediscounted using apre-tax rate that reflects current market assessments based on the weighted average cost of capital (WACC).

TheGroup performs its impairment test during the fourth quarter of the fiscal year.This approach was chosen since the Mid-Term Plan covering the next three fiscal years is updated annually at the beginning of the fourth quarter.The Mid-Term Plan is based on the assumption that thereare no major changes to the Group’sorganization. Theresidual value is calculated from an estimated continuing value,which is primarily based on the thirdyear of the Mid-Term Plan. Theterminal growth rate used for determining the residual value does not exceed the expected long-term growth rate of the industry.

Keyassumptions used forvalue-in-use calculations

Ùè×è DiscountrateTerminal growth rate

Global Sourcing &Cocoa z.ð% ×.ð% Western Europe z.]% ×.è% Americas ×è.h% è.z% Asia-Paciﬁc z.ð% ].R%

Ùèèz DiscountrateTerminal growth rate

Cocoa ×è.è% Ù.è% Food Manufactures z.è% Ù.è% Gourmet &Specialties z.è% Ù.è% Consumer z.è% Ù.è%

Based on the impairment tests,noneed for recognition of impairment losses in fiscal year 2009/10 has been identified.

Thekey sensitivities in the impairment test arethe WACC as well as the terminal growth rate.Therefore, the Group has carried out asensitivity analysis,containing various scenarios.Taking reasonable possible changes in keyassumptions into account, no impairment losses have been revealed. KoConsolidanzernrechnungted 91 Financial Statements

19.Deferredtax assets and liabilities

Movementindeferred tax assets and liabilities

Invento- Property, Other Provisions Other Taxloss Total ries plant, assets liabilities carry- equipment/ forwards intangible assets in thousands of CHF

as of August ]×, ÙèèR (×è,ÙÙh)(]z,×ð])(h,z]è) ××× ],Fzè ]Ù,ÙèF (×z,×Ù]) Chargedtothe income statement Ù,ðÙè (R,zFh) ×,Ùhð(×],×Ù])Ù,ðÙð ×],×]z (Ù××) Chargedtoequity ––––Ù,ðFF – Ù,ðFF Effectofacquisitions – (Ù,ÙèF) – ×Ùz (Ùèð) – (Ù,ÙRÙ) Effectofdisposals –––––(ÙF)(ÙF) Currency translation effects ÙhÙ ð,èÙÙðÙR (ðh)(RFF)(Ù,×ÙÙ) Ù,zðz as of August ]×, Ùèèz (h,Ù]ð) (Ùð,ðèÙ)(ð,zÙh)(×Ù,zÙè) z,h×è Ùð,]ðh (×F,ð]h)

Chargedtothe income statementð,è]Ù (h,ÙFÙ)(F,ÙÙ×) ×],Ùè× (×,è]ð) ð,ðÙÙ z,Ùðz Chargedtoequity ––––×,ðRð – ×,ðRð Eﬀectofacquisitions – (×,Fzh)(××è) – ×,èRð – (hÙÙ) Currency translation eﬀects ×ðz ð,hÙÙ ×èz FRÙ(×,Rhh)(ð,zÙÙ)(×,×Ùð) as of August ]×, Ùè×è (Ù,èÙÙ) (ÙR,h]z)(×Ù,×Ùz) ×,×Ùð z,ÙFR ÙÙ,zðz (h,]Fè)

Theeffect of acquisitions for fiscal year 2009/10 is related to the fair value measurement at acquisition of Chocovic.

Recognized deferred tax assets and liabilities Therecognized deferred tax assets and liabilities,without taking into consideration the offsetting of balances within the same tax jurisdiction, areattributable to the following:

Assets Liabilities Net Assets Liabilities Net as of August ]×, Ùè×è Ùèèz in thousands of CHF

Inventories ð,èhh (h,×Ù×)(Ù,èÙÙ) ×,×Ùè (R,]hð) (h,Ù]ð) Property,plant&equipment/ intangible assets ×Ù,]ÙÙ (F],èR])(ÙR,h]z) ×h,]ÙÙ (FÙ,RÙF)(Ùð,ðèÙ) Other assets h,hÙF (×z,Rzð) (×Ù,×Ùz) ××,Fzz (×h,FÙF)(ð,zÙh) Provisions ×,×hF (]×) ×,×Ùð zRè (×],zÙè)(×Ù,zÙè) Other liabilities ×z,Fzè (×è,ÙÙÙ) z,ÙFR ×R,ðzÙ(R,RRð) z,h×è Taxloss carry-forwards ÙÙ,zðz – ÙÙ,zðz Ùð,]ðh – Ùð,]ðh

Taxassets/(liabilities) zÙ,zzÙ (×èè,]ðÙ)(h,]Fè) zð,××Ù(×××,FðÙ)(×F,ð]h) Set-oﬀ of tax (Ù×,F]×)Ù×,F]× – (Ù],×zF)Ù],×zF–

Reﬂected in the balancesheet ð×,]F× (ðR,hÙ×)ð×,z×R(FR,Ùðð) 92 KoConsolidanzernrechnungted Financial Statements Notes

Taxloss carry-forwards excluded from recognition of related deferred tax assets Taxloss carry-forwards not recognized as deferred tax assets have the following expiry dates:

as of August ]×, Ùè×è Ùèèz in thousands of CHF

Expiry Within × year ×Rz R,ÙhR After × up to Ù years ×,ðÙz Ù After Ù up to ] years Ù,]zF Ù After ] up to ×è years ðR,h×F ðF,zðð After × è years Ù×],]ð] ÙÙÙ,ðÙh Unlimited ÙRÙ,zR× ]Ùè,ðhh Total unrecognized tax losses carried forwardðF×,×RÙFÙR,]F×

Taxlosses carried forwardare assessed for futurerecoverability based on business plans and projections of the related companies.Those arecapitalized only if the usage within amedium period is probable.

Taxlosses carried forwardutilized during the year 2009/10 wereCHF 41.7 million (2008/09: CHF 28.5 million). Thetax relief hereon amounted to CHF 12.8 million, of which CHF 8.2 million werealready recognized as adeferred tax asset in the year before(2008/09: CHF 8.4 million of which CHF 4.0 million werealready recognized as adeferred tax asset in the year before).

As of August 31, 2010, the Group had unutilized tax losses carried forwardofapproximately CHF 711.5 million (August 31, 2009: CHF 775.0 million) that areavailable for offset against futuretaxable income.

Of the total tax losses carried forward, an amount of CHF 150.3 million has been recognized for deferred taxation purposes resulting in adeferred tax asset of CHF 45.0 million (2008/09: CHF 146.7 million recognized resulting in adeferred tax asset of CHF 45.4 million).

20.Bank overdrafts and short-term debt

Carrying amounts Fair values as of August ]×, Ùè×è Ùèèz Ùè×è Ùèèz in thousands of CHF

Bank overdrafts ×],ÙFF Ùz,]]R ×],ÙFF Ùz,]]R Commercial Paper Fz,ðhè ×zÙ,Fzz Fz,ðhè ×zÙ,Fzz Short-term bank debts ×èð,×ðh Ùh,hhð ×èð,×ðh Ùh,hhð Short-term portion of long-term bank debts (note Ù])ððÙ]ÙÙððÙ ]ÙÙ Interest-bearing loans from employees ÙÙ ]Ù ÙÙ ]Ù Finance lease obligations (note ×F) F]h]ðF]h]ð Short-term debt ×hð,z]R ÙÙÙ,RRð ×hð,z]R ÙÙÙ,RRð

Bank overdrafts and short-term debt ×Rz,ÙèÙ ÙðÙ,ÙÙ] ×Rz,ÙèÙ ÙðÙ,ÙÙ]

Thedecrease in the outstanding amount under the Group’sdomestic Commercial Paper Program is partially offset by an increase of the drawnamounts under the Revolving Credit Facility (note 23). KoConsolidanzernrechnungted 93 Financial Statements

Short-term financial liabilitiesare mainly denominated in EUR, XAF and BRL as shown in the table below:

Split per currency AmountInterest rangeAmountInterest range in thousands of CHFfromtofromto as of August ]×, Ùè×è Ùèèz×

EUR ×èÙ,]F] è.ðh%ð.zè% ÙèR,ÙÙh è.ðè% F.èè% GBP – n/an/a F,Ù×] è.Ùð% ×.]]% USD Ù,FRð è.ÙF% Ù.èè% ×Ù,ðÙ] è.Ù×% ].ÙF% BRL ×Ù,ð×R Ù.ðè%Ù.ðè% – n/an/a XAF F],zRè ð.èè% F.èè% ÙRè ð.èè% F.èè% MYR Ù,zÙ× ].FÙ%Ù.èè% ÙÙ,èhh Ù.]Ù% Ù.h]% Other Ù,z]h è.×]%ð.ðè% Ù,RR] è.×]% F.ðè% Total ×Rz,ÙèÙ è.×]% F.èè% ÙðÙ,ÙÙ] è.×]% F.ðè% 1Certain comparatives have been reclassiﬁed to conform with the currentperiod’spresentation.

as of August ]×, Ùè×è Ùèèz in thousands of CHF

Split ﬁxed/ﬂoating interest rate: Fixedrate ×,èè] ðÙz Floating rate ×RR,Ùè×Ùð×,FzÙ Total bank overdrafts and short-term debt ×Rz,ÙèÙ ÙðÙ,ÙÙ]

21. Trade payables and other currentliabilities

as of August ]×, Ùè×è Ùèèz× in thousands of CHF

Trade payables ÙFè,ÙÙÙ ÙÙh,]h× Fair value of hedged ﬁrm commitments (note ×Ù) Ù×,hðð ×è×,ðhÙ Related parties ],ð]×Ù,Fèz Accrued wagesand social security hð,RðÙ RR,]ð× Other taxes and payables to governmental authorities ×z,hðÙ×F,]FF Accrued expenses ðÙ,ðRF Fz,èR] Deferred income ],×Ù××è,RFR Liability put option over existing non-controlling interest ]×,×RR – Other payables R×,ÙRR ××F,ÙÙè Total trade payables and other currentliabilities hFz,ð]h R]Ù,ÙÙè 1Certain comparatives have been reclassiﬁed to conform with the currentperiod’s presentation. As disclosed in notes 9and 12, the Group participates in aprogram wherereceivables aresold to a financial institution and derecognized from the balance sheet. Amounts payable to the financial institution amounted as of August 31, 2010 to CHF 22.8 million (2009: CHF 32.9 million), consisting of the balance of receivables collected beforethe next roll-over date of CHF 44.2 million (2009: CHF 58.8 million), less discounts on receivables sold of CHF 21.4 million (2009: CHF 25.9 million). These amounts areincluded in other payables.

Other payables also consist of outstanding ledger balances with commodity brokers.

Theseller of the in 2007/08 acquired stakeinBarry Callebaut Malaysia Sdn Bhd (BCM), KL-Kepong Industrial Holdings Sdn Bhd, has aput option (CHF 31.2 million) exercisable between the second and the fifth anniversary of the closing of the acquisition of BCM (i.e.April 30, 2008), which, if exercised, would requireBarry Callebaut to purchase the remaining 40% of BCM. Theput exercise price is fixed in USD.The agreement gives Barry Callebaut acall option, exercisable in the identical time frame,to acquirethe remaining 40% of the shares at fair value.The call option has afair value close to zero. 94 KoConsolidanzernrechnungted Financial Statements Notes

22. Provisions

Ùèèz/×è Restruc- Litigation & Other Total turing claims in thousands of CHF

Balance as of August ]×, Ùèèz ×è,ÙFh ],R]Ù F,FðÙÙè,zð] ChangeinGroup structure-acquisition ðèè hhð ],Ù]z Ù,h×Ù Additions Ù,Ù]ððhÙÙ,FFF z,Fhð Usage(h,zÙè)(FÙR)(Ù,ðRÙ)(××,×ðè) Release of unused provisions (F×)(×Fð) – (ÙÙF) Currency translation adjustments (×,Ù]ð) (]Rð) (zÙh)(Ù,ðÙh) as of August ]×, Ùè×è F,×RF ],zRð ××,ÙÙR Ù×,Ù×z

of which: Currentð,RÙF],]zðF,]×h×ð,ððR Non-current ]Ùè ðzè Ù,z]× ð,RF×

ÙèèR/èz Restruc- Litigation & Other Total turing claims in thousands of CHF

Balance as of August ]×, ÙèèR ðÙðÙ,z]èÙ,èFF z,ðÙ× ChangeinGroup structure-acquisition ––ÙzÙÙzÙ Additions ×è,èhz ×,èh× ð,è]z ×F,×Rz Usage – (Ù,èh])(Ù,FðÙ)(Ù,hÙð) Release of unused provisions – (×ðF) – (×ðF) Reclassiﬁcation (×]]) ×]] –– Currency translation adjustments (Ù) (h×)(Ùzð) (]hè) as of August ]×, Ùèèz ×è,ÙFh ],R]Ù F,FðÙÙè,zð]

of which: Current ×è,ÙÙz ],×]ð ],]Fh ×F,hð× Non-current Ù×RFzz ],ÙRðÙ,ÙèÙ

Restructuring During fiscal year 2009/10, CHF 7. 9million of restructuring provisions have been used (2008/09: none).

Litigation &claims Theamount includes provisions for certain litigations and claims that have been set up to cover legal and administrative proceedings that arise in the ordinary course of business.Inmanagement’sopinion, after taking appropriate legal advice,the outcome of these legal claims will not give rise to any significant loss beyond the amounts provided as of August 31, 2010.

Other provisions Other provisions relate mainly to amounts that have been provided to cover the negative outcome of onerous contracts. KoConsolidanzernrechnungted 95 Financial Statements

23.Long-term debt

Carrying amounts Fair values as of August ]×, Ùè×è Ùèèz Ùè×è Ùèèz in thousands of CHF

Senior notes ÙÙÙ,]zÙð×z,zRh ÙF×,ðÙÙÙRÙ,Ù×Ù Long-term bank debts ÙðF,ÙèF Ùèh,hzè ÙðF,ÙèF Ùèh,hzè Less currentportion (note Ùè)(ððÙ)(]ÙÙ)(ððÙ)(]ÙÙ) Interest-bearing loans from employees ×Ù hzè ×Ù hzè Finance lease obligation (note ×F) ×,ÙðÙ FR ×,ÙðÙ FR

Total long-term debt Fzz,ð×FhÙR,Ùz]h×R,FÙFFzÙ,h×R

On July 13, 2007,the Group issued a6%Senior Note with maturity in 2017 for an amount of EUR 350 million. TheSenior Note has been issued at aprice of 99.005%, and include acoupon step-up clause of 0.25% (limited to 1.00%) per downgraded notch by one or morerating agencies.Itranks completely pari passu with the Group’sEUR 850 million Revolving Credit Facility.The Senior Notes being issued by Barry Callebaut Services NV areguaranteed by Barry Callebaut AG and certain of its subsidiaries.

On July 12, 2007,the Group amended and restructured the syndicated EUR 850 million Revolving Credit Facility,leading to a5-year multi-purpose single tranche facility with two extension options (in 2008 and 2009) to be agreed upon by the participating banks at their sole discretion.The first extension option has been exercised successfully for 83% of the total amount leading to aprolongation of the maturity date by one year to 2013, whereas the remaining 17%has been kept at the initial maturity date in 2012. TheGroup did refrain from exercising the second extension option in line with the prevailing market circumstances.The Revolving Credit Facility being issued by Barry Callebaut Services N.V. is guaran- teed by Barry Callebaut AG and certain of its subsidiaries.

As aresult, the maturity profile of the long-term debt can be summarized as follows:

as of August ]×, Ùè×è Ùèèz in thousands of CHF

Ùè×è/×× –],×èÙ Ùè××/×Ù ð,è×]],×Ùð Ùè×Ù/×] ÙÙh,Ù×] ×zF,R]] Ùè×]/×Ù ],]è]],Rzð Ùè×Ù/×ðand thereafter (for ÙèèR/èz) ]Ùz ðÙ×,]]R Ùè×ð/×F and thereafter (for Ùèèz/×è)ÙÙ],Ù]R – Total long-term debt Fzz,ð×FhÙR,Ùz]

Theweighted average maturity of the total debt decreased from 4.5 years to 3.5 years.Considering that the short-term debt is fully covered with the committed Revolving Credit Facility,the average maturity of the total debt stands at 4.9 years from aliquidity point of view. 96 KoConsolidanzernrechnungted Financial Statements Notes

Long-term financial liabilities aretoamajor extent denominated in EUR and at fixed interest rates. Thepart of the long-term debt reported at floating interest rates relates to the drawings on the syndicated facility in EUR and CAD.

Split per currency AmountInterest rangeAmountInterest range as of August ]×,fromtofromto in thousands of CHF Ùè×è Ùèèz

EURðhÙ,×ð×è,zh%F.×Ù% ðÙè,ÙRðÙ.èè% F.×Ù% CAD ××ð,ððÙ×.×è%×.ðR% ××F,hzÙ×.ÙF% ×.]è% MYR R,hF]].FÙ%Ù.èè% ×è,Rh×Ù.RR% ].Rð% USD – n/an/a hz,zzð è.zF% è.zF% BRL Ù,hèè Ù.ðè%Ù.ðè% – n/an/a Other ]ðè Ù.èè% F.Rè% ×ðè ð.èè% h.èè% Total long-term debt Fzz,ð×F è.zh% F.Rè% hÙR,Ùz] è.zF% h.èè%

as of August ]×, Ùè×è Ùèèz in thousands of CHF

Split ﬁxed/ﬂoating interest rate: FixedrateÙÙh,×ÙRðÙÙ,RÙÙ Floating rate ÙðÙ,]FR Ùèð,Ùð× Total long-term debt Fzz,ð×FhÙR,Ùz]

24.Employeebeneﬁtobligations

A. Pension and other long-term employmentbeneﬁtplans TheGroup has,apart from the legally required social security schemes,numerous independent pension plans.Inmost cases,these plans areexternally funded in vehicles that arelegally separate from the Group. Forcertain Group companies,however,noindependent assets exist for defined benefitpension plans and other long-term employment plans.Inthese cases,the related liability is included in the balance sheet.

Theamounts recognized in the balance sheet aredetermined as follows:

Defined benefitpension Other long-term plans employmentbenefitplans as of August ]×, Ùè×è Ùèèz Ùè×è Ùèèz in thousands of CHF

Presentvalue of funded obligations ÙÙz,F×è ÙèÙ,FFF –– Fair value of plan assets (×ÙÙ,×hh)(×ð×,h×z) –– Excess of liabilities (assets)offunded obligations Rð,Ù]] ðè,zÙh– –

Presentvalue of unfunded obligations FF,ð]R Fz,èRz ×z,]Ùð ×z,zRR

Net unrecognized actuarial gains (losses)(Fð,×]F)(×h,hzè)(×,Ù]×) ×èF

Net employeebeneﬁtobligations recognized in the balancesheet RF,R]ð ×èÙ,ÙÙF ×R,èzÙ Ùè,èzÙ thereofrecognized as an asset (×Rð) (]F×) –– thereofrecognized as aliability Rh,èÙè ×èÙ,Fèh ×R,èzÙ Ùè,èzÙ KoConsolidanzernrechnungted 97 Financial Statements

Thechanges in the present value of the defined benefitobligations areasfollows:

Defined benefitpension Other long-term plans employmentbenefitplans in thousands of CHF Ùèèz/×è ÙèèR/èz Ùèèz/×è ÙèèR/èz

Opening defined benefitobligation Ùh×,hðh Ùhz,]F] ×z,zRh Ù×,×RF Currentservice cost R,RÙèz,ÙèÙ hRRRR] Past service cost ]FR ÙRR –– Interest cost ×Ù,zhÙ×ð,ÙFh h]F FÙF Actuarial losses (gains)ÙÙ,zhR ð×Ù ],èhÙ RRÙ Losses (gains)oncurtailment(hðF)–(×è)(×hè) Exchangedifferences on foreign plans (Ùð,è×F)(×F,]×R)(Ù,zzÙ)(×,×hÙ) Benefits paid (×F,zhð) (×F,zF×)(Ù,ÙðR)(Ù,ÙÙR) Closing defined benefitobligation ÙzF,×ÙR Ùh×,hðh ×z,]Ùð ×z,zRh thereoffunded obligations ÙÙz,F×è ÙèÙ,FFF –– thereofunfunded obligations FF,ð]R Fz,èRz ×z,]Ùð ×z,zRh

Themovement in the fair value of plan assets is as follows:

Defined benefitpension Other long-term plans employmentbenefitplans in thousands of CHF Ùèèz/×è ÙèèR/èz Ùèèz/×è ÙèèR/èz

Opening fair value of plan assets ×ð×,h×z ×Fh,×Ù× –– Expected return R,ÙÙh ×è,èÙð –– Actuarial gains (losses)(F,ðÙh)(×R,×z×) –– Contributions by employer F,z×× h,Ù×Ù –– Contributions by employees ],ÙF× ],Ù]Ù –– Exchangediﬀerences on foreign plans (z,èzÙ) (h,ðzh) –– Beneﬁts paid (×è,ðÙè)(×è,èRð) –– Closing fair value of plan assets ×ÙÙ,×hh ×ð×,h×z ––

Composition of plan assets

Deﬁnedbeneﬁtpension plans as of August ]×, Ùè×è Ùèèz in thousands of CHF

Equities ð],èÙ× FF,ð×è Bonds Ùð,RR] ×R,zðh Cash and other assets Fð,Ùh] FF,ÙðÙ Total fair value of plan assets ×ÙÙ,×hh ×ð×,h×z

Theplan assets do not include ordinary shares issued by the Company nor any property occupied by the Group or one of its affiliates. 98 KoConsolidanzernrechnungted Financial Statements Notes

Theamounts recognized in profitorloss areasfollows:

Defined benefitpension Other long-term plans employmentbenefitplans in thousands of CHF Ùèèz/×è ÙèèR/èz Ùèèz/×è ÙèèR/èz

Currentservice costs R,RÙèz,ÙèÙ hRRRR] Interest on obligation ×Ù,zhÙ×ð,ÙFh h]F FÙF Expected return on plan assets (R,ÙÙh)(×è,èÙð) –– Net actuarial losses (gains)recognized in year ðhF (hÙè) ×,RÙ× ×hè Past service cost ]FR ÙRR –– Losses (gains)oncurtailments and settlements (hðF) – (×è)(×hè) Contributions by employees (],ÙF×)(],Ù]Ù) –– First-time recognition of pension assets ––– – Total deﬁned beneﬁtexpenses ×Ù,ÙhÙ××,×FÙ ],]]ð ×,ðèz

Actual return on plan assets ×,z×R (R,×Fh)

Theservice cost for 2010/11 areexpected to amount to CHF 8.3 million. Theexpected return on plan assets is based on market expectations and composition of plan assets.

in thousands of CHF Ùèèz/×è ÙèèR/èz

Total deﬁned contribution expenses ×,èðRRÙð

Thedefined benefitexpenses arerecognized in the following line items in the Consolidated Income Statement:

in thousands of CHF Ùèèz/×è ÙèèR/èz

Cost of goods sold (h,]Rè)(F,]èÙ) Marketing and sales expenses (×,Ùðð) (ðzÙ) General and administration expenses (ð,ÙzÙ) (Ù,×]è) Research and developmentexpenses (]Rz)(]×è) Other income (R) Fzh Other expenses (×,èR×)(Ù,è]Ù) Total deﬁned beneﬁtexpenses recognized in income statement(×ð,Fèh)(×Ù,Fh×)

Weighted averageassumptions used

Definedbenefitpension Otherlong-term plans employeebenefitplans in % Ùèèz/×è ÙèèR/èz Ùèèz/×è ÙèèR/èz

DiscountrateÙ.×%F.Ù%Ù.è% F.è% Expected return on plan assets ð.h%ð.z% –– Expected rate of salaryincrease ×.×% è.h% Ù.×% ×.ð% Medical cost trend rates ––ð.è%ð.è% KoConsolidanzernrechnungted 99 Financial Statements

Additional historical information

Deﬁnedbeneﬁtplans in thousandsofCHF Ùèèz/×è ÙèèR/èz Ùèèh/èR ÙèèF/èh

Presentvalue of defined benefitobligations ]×ð,Ùh] Ùz×,hÙÙ ]èè,ðÙz ]Ù],hÙè Fair value of plan assets (×ÙÙ,×hh)(×ð×,h×z)(×Fh,×Ù×)(×RÙ,èÙÙ) Funding deficit of the plans ×h×,ÙzF ×Ùè,èÙð ×]],ÙÙR ×Ù×,h×F

Experience adjustments arising from plan liabilities (×h,h×z)(z,ÙÙh) F,ðh] ð,×ð× Experience adjustments arising from plan assets (F,ðÙz)(×R,×z×)(×ð,è×R)(]]R)

Thesignificant increase of the funding deficit of the defined benefitplans has significantly been influenced by the sharp decrease of the discount rates used to determine the present value of the defined benefitobligations.The long-term interest rates for the local currencies in which the defined benefitplans areexpressed wereatahistorically low level on the closing date of the fiscal year 2009/10 and have recovered significantly afterwards.Therefore, the funding deficit as per August 31, 2010 and the movement in comparison to prior year 2008/09 should be interpreted with the necessary prudence.

B. Equity compensation beneﬁts EmployeeStock Ownership Program Shares aregranted to participants according to individual contracts and the current Employee Stock Ownership Program. TheNomination &Compensation Committee determines the number and price of shares granted at its discretion. In the past, the price for the granted shares has been zero. Theshares granted areentitled to full shareholders rights upon vesting.The vesting periods areranging between one and three years.Incase of resignation or dismissal, the initially granted but not yet vested shares become forfeited. TheGroup currently uses treasury shares for this program.

Thefair value of the shares granted is measured at the market price at grant date.15,260 shares were granted in fiscal year 2009/10 (15,007 shares in 2008/09). Thefair value of the shares at grant date is recognized over the vesting period as apersonnel expense.For 2009/10 the amount recognized (before taxes) was CHF 5.7 million with acorresponding increase in equity (2008/09: CHF 11.6 million). The average fair value for the shares granted during the fiscal year 2009/10 amounted to CHF 581 (2008/09: CHF 518).

25.Equity

Sharecapital

as of August ]×, Ùè×è Ùèèz ÙèèR in thousands of CHF

Sharecapital is represented by ð,×hè,èèè authorized and issued shares of each CHF ]R.Ùè fully paid in (in Ùèèz:ðè.hè;inÙèèR: FÙ.Ùè) ×zh,ÙzÙ ÙFÙ,××z ]Ù×,ðhÙ

Theissued sharecapital is divided into 5,170,000 registered shares with anominal value of CHF 38.20 each (CHF 50.70 as of August 31, 2009).All of the issued shares arefully paid and validly issued and are not subject to calls for additional payments of any kind.

Instead of adividend, the Annual General Meeting held on December 8, 2009, resolved asharecapital reduction and repayment of CHF 12.50 per shareresulting in atotal sharecapital reduction of CHF 64.6 million (December 2008: capital reduction and repayment of CHF 11.50 per shareresulting in atotal sharecapital reduction of CHF 59.5 million).Therespective repayment took place in March 2010.

TheCompany has one class of shares,which carries no right to a fixed dividend. 100 CoKonsolidanzernrechnungted Financial Statements Notes

Treasury shares arevalued at weighted average cost and, in accordance with IFRS, have been deducted from equity.The fair value of the treasury shares as of August 31, 2010, amounted to CHF 3.3 million (2009: CHF 4.0 million).

As of August 31, 2010, the number of outstanding shares amounted to 5,165,239 (2009: 5,163,068) and the number of treasury shares to 4,761 (2009: 6,932). During this fiscal year,9,174 shares have been purchased,10,845 transferred to employees under the Employee Stock Ownership Program and 500sold (2008/09: 14,212 purchased and 23,734 transferred). In prior year,notreasury shares have been sold.

Retained earnings As of August 31, 2010, retained earnings contain legal reserves of CHF 42.7 million (2009: CHF 57.0 million), which arenot distributable to the shareholders pursuant to Swiss law.

Hedging reserves comprise the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

Cumulative translation adjustments comprise all foreign currencydifferences arising from the translation of the financial statements of foreign operations.

Movements of non-controlling interest

in thousandsofCHF Ùèèz/×è ÙèèR/èz

as of September ×,ðRz]zÙ Non-controlling shareofproﬁts /(losses)ð×h×R Changes in ownership interest in subsidiaries SIC Cacaos SA –]èè Dividends paid to non-controlling shareholders (×Ùè)(FR) Currency translation adjustment(×èÙ) (ð])

as of August ]×, RRÙ ðRz

26. Financial risk management Thenatureofits business exposes the Group to avariety of financial risks including the effects of changesinmarketprices(commodityprices, foreign exchange rates,interest rates) as well as credit risks and liquidity risks.

TheGroup’soverall strategy for managing these risks is consistent with the Group’sobjectives to maintain cost leadership,reduce earnings volatility in acost-effective manner and minimize potential adverse effects of such market exposures on the financial performance of the Group.The Group’srisk management continuously monitors the entities’ exposures to commodity price risk, interest rate risk and foreign currencyrisk as well as the use of derivative instruments.

TheGroup manages its business based on the following two business models: – Contract Business: Sales contracts for industrial, gourmet or consumer chocolate,whereBarry Callebaut has entered into contracts with customers to deliver fixed quantities at fixed prices.These contractually fixed prices aregenerally based on the forwardmarket prices of the rawmaterial components valid at the contract date for the forwarddelivery date,atwhich the chocolate is planned to be delivered to the customers. – Price ListBusiness: Barry Callebaut sets price lists for certain gourmet and consumer products.These price lists arenormally updatedatintervals of six to twelve months.Customers buy products based on the issued price lists without fixed commitments on quantities. KoConsolidanzernrechnungted 101 Financial Statements

Commodity price risks TheGroup’spurchasing and sourcing center operates as an integral part of the Group but also acts as a broker-trader in the sense that it makes sourcing and risk management decisions for the rawmaterials based on market expectations,separate from the manufacturing business and its thirdparty sales commitments.Its objectives aretogenerate profits from fluctuations in commodity prices or broker-trader margins.Additionally,the manufacturing of the Group’sproducts requires rawmaterials such as cocoa beans,sweeteners,dairy,nuts,oil and fats.Therefore, the Group is exposed to price risks relating to the trading business as well as to the sale of chocolate.

Thevalue of the Group’sopen sales and purchase commitments and inventory of rawmaterials changes continuously in line with price movements in the respective commodity markets.

TheGroup’spolicyistohedge its chocolate price risk which consists of the price risk of cocoa and other commodities such as milk, sugar and nuts for open sales contracts of industrial chocolate (Contract Busi- ness). It uses commodity futures,commodity forwardcontracts and inventories to manage price risks associated with firm sales commitments of industrial chocolate (Contract Business).Therelated accoun- t-ing treatment is explained in the section “Summary of Accounting Policies” under the caption “Deriv- ative financial instruments and hedging activities”.

TheGroup Commodity Risk Committee (GCRC) is acommittee consisting of keyrisk management stakeholders of the Group who meet on aregular basis (at least every six weeks) to discuss Group Commodity Risk Management issues.The GCRCmonitors the Group’sCommodity Risk Management acti-vities and acts as the decision-taking body for the Group in this respect.Themembers of the GCRC include the Group’sChief Executive Officer (CEO), the Group’sChief Financial Officer (CFO) – acting as Chairman of the committee – the President of Global Sourcing &Cocoa and the Group’sHead of Risk Management (GRM).

TheGCRCreports via the GRM to the Group’sAudit, Finance,Risk, Quality &Compliance Committee (AFRQCC) and must inform the latter about keyGroup Commodity Risk issues and the keymitigation decisions taken. TheAFRQCC reviews and approves GCRCrequests and makes sure that the commodity risk management strategy is consistent with the Group’sobjectives.Italso sets the Group’sValue at Risk (VaR) limit.TheAFRQCC makes recommendations to the BoardofDirectors if deemed necessaryand advisesthe BoardofDirectors on importantrisk matters and/or asks for approval.

In order to quantify and manage the Group’sconsolidated exposuretocommodity price risks,the concept of historical VaRisapplied. TheVaR concept serves as the analytical instrument for assessing the Group’scommodity price risk incurred under normal market conditions.The VaRindicates the loss which, within atime horizon of 10 days for rawmaterials,will not be exceeded at aconfidence level of 95% using 7years of historical market prices for each major rawmaterial component. TheVaR is com- plemented through the calculation of the expected shortfall and worst cases as well as the use of stress testscenarios. However, liquidityand credit risksare not includedinthe calculation and the VaRisbased on astatic portfolio during the time horizonofthe analysis.The GCRCbreaks down the Group VaR limit into aVaR limit for the Sourcing unit as well as limits in metric tonnes for the other risk reporting units.The BoardofDirectors is the highest approval authority for all Group Commodity Risk Manage- ment (GCRM) matters and approves the GCRM Policyaswell as the Group VaRlimit.

TheVaR framework of the Group is based on the standardhistorical VaRmethodology; taking 2,000 days (equivalent to 7years) of the most recent prices,based on which the day-to-dayrelative price changes arecalculated. This simulation of past market conditions is not predicting the futuremovement in commodity prices. Therefore,itdoesnot represent actual losses.Itonlyrepresents an indication of thefuturecommodity price risks.AsofAugust 31, 2010, the Group had aVaR of CHF 10.8 million (2009: CHF 8.2 million) well within the Group limit. Thenominal exposuretocommodity price risks is shown under contractual maturities. 102 KoConsolidanzernrechnungted Financial Statements Notes

Foreign currency risks TheGroup operates across the world and consequently is exposed to multiple foreign currencyrisks, albeit primarily in EUR, GBP and USD.The Group actively monitors its transactional currencyexposures and consequently enters into currencyhedges with the aim of preserving the value of assets, commitments and anticipated transactions.The related accounting treatment is explained in the section “Summary of Accounting Policies” under the caption “Derivative financial instruments and hedging activities”.

All risks related to foreign currencyexposures of assets and liabilities,certain unrecognized firm commitments and highly probable forecasted purchases and sales arecentralized within the Group’s In-house Bank, wherethe hedging strategies aredefined.

Accordingly,the consolidated currencyexposures arehedged in compliance with the Group’sTreasury Policy, mainly by means of forwardcurrencycontracts entered into with high credit quality financial institutions.The Group’sTreasury Policyimposes adual risk control framework of both open position limits and near-time fair valuation of the net currencyexposures.Both levels of control aresubstantially interlinked, avoiding excessive net currencyexposures and substantial volatility in the income statement.

TheGroup’sTreasury department is supervised by the Group Finance Committee,which meets at least on amonthly basis,todiscuss Group Treasury risk management issues.The Group Finance Committee monitors the Group’sforeign currencyrisk position and acts as adecision-taking body for the Group in this respect. TheGroup Finance Committee consists of the Group’sCFO,the Group’sHead of Risk Management, the Group’sHead of Treasury,Tax, Insurance and Legal and other Group Finance stakeholders.

TheGroup’sTreasury Policygiving guidance on treasury risk management including foreign currency and interest rate risks is approved and annually reviewed by the AFRQCC.The Group’sRisk Manage- ment department reviews the consistencyofthe Group’streasury management strategy with the Group’s Treasury Policyand reports the status to the Group’sCFO periodically.The AFRQCC is informed by the CFO about the status and important matters in their quarterly meetings and approves requests of the Group’sFinance Committee on important treasury risk matters including foreign currencyrisks for recommendation to the BoardofDirectors.The BoardofDirectors is the highest approval authority for all Group Treasury Risk Management matters.

Thetable below provides an overview of the net exposureofEUR, GBP and USD against each functional currencyinthe Group.According to the Group’sTreasury Policy, foreign exchange exposures arehedged as from identification on an intra-daybasis in line with the approved exposurelimits.Incase of deviation from the agreed foreignexchange exposure limits,approval has to be sought from the Group’s Finance Committee.Companies with the same functional currencyare shown in one group.

Net foreign currency exposures

as of August ]×, Ùè×è Ùèèz Net exposureinthousands of EURGBP USD EURGBP USD Functional currency

EUR(×,ðÙÙ) (ÙÙF)(×Ù,èèð) F,]Ùè CHF(ð]])(ÙRF) ]èz (×,èèh)(×Ùð) ×,èzÙ CAD(zh)×,z]F USD ð(ÙhÙ) BRL ×,ÙFF (]ÙR) SGD ×ðÙ (ÙÙz) CNY(F×])(FR×)(ðhh) zz MYR(]×è)(]zè)ðFÙ(××h)(×,]×h)ð] RUB Fzz (×,]ÙF)(×èÙ) (Ù,]FÙ) Total (hðÙ)(Ù,Ùèè)(×RÙ)(Ù,]hÙ) (×],ÙFh) F,Fè] KoConsolidanzernrechnungted 103 Financial Statements

In ordertoquantify and manage the Group’s consolidated exposure to foreign currency risks, the concept of historical VaR has been implemented for 2009/10. The VaR concept serves as the analytical instrument for assessing the Group’s foreign currency risk incurred under normal market conditions. The VaR indicates the loss, which, within atime horizon of 1day, will not be exceeded at aconfidence level of 95% using 7years of historical market prices for each major currency pair. The VaR is comple- mented with the calculation of the expected shortfall and worst cases. The VaR is based on static exposures during the time horizon of the analysis. The simulation of past market conditions is not predicting the future movement in foreign currency rates. Therefore, it does not represent actual losses. It only represents an indication of future foreign currency risks. As of August 31, 2010, the Group had aVaR of CHF 0.1 million (2009: CHF 0.3 million). as of August ]×, Ùè×è Ùèèz Value at Risk on net exposures in thousands of CHF Total forthe Group and per main exposurecurrencies

Total Group zh]]]

CHF ×h ×zF EUR R] ×Ù] USD ÙÙ hR GBP ÙF ×ðR Others ]h z× Diversiﬁcation EﬀectÙR%ðè%

Interest rate risks TheGroup is exposed to changes in interest rates through its short- and long-term debt obligations mainly located in and centralized at the Group’sIn-house Bank. TheGroup’sIn-house Bank provides the necessary liquidity in the required functional currencytowards all companies of the Group.Consequently, the Group’sdebt obligations areadjusted with the real currencymix of the Group’sliabilities in order to reflect the correct exposuretointerest rates.

It is the Group’spolicytomanage its interest cost using an optimal mix of fixed and floating rate debt. This optimal mix is primarily determined by the level of the Group’sinterest cover ratio and is achieved by entering into interest rate derivative instruments,inwhich it exchanges fixed and floating interest rates.

As described in the caption “Foreign currencyrisks”,the Group’sFinance Committee,which meets on amonthly basis,monitors the Group’sinterest risk positions and acts as adecision-taking body for the Group in this respect.

TheGroup’sTreasury Policyalso covers the management of interest rate risks.Asfor foreign currency risks,the Group’sRisk Management department supervises the compliance of the treasury interest rate risk management strategy with the Group’sTreasury Policyand reports the status periodically to the Group’sCFO,who informs the AFRQCC in their quarterly meetings.The AFRQCC approves requests from the Group Finance Committee on important treasury matters including interest rate risks and provides recommendations thereon to the BoardofDirectors,which is the highest approval authority for all Group treasury matters. 104K4Consolidaonzernrechnungted Financial Statements Notes

Thefollowing schedule provides an overview of all interest-bearing items per year-end closing.

as of August ]×, Ùè×è Ùèèz in thousands of CHF

Fixedinterest bearing items Carrying amountoffinancial liabilities ÙÙR,×ð× ðÙ],]h× Reclassification due to interest rate derivative ÙÙð,ðhÙ ]×è,z]z Net fixedinterest position Fz],hÙ]R]Ù,]×è

Floating interest bearing items Carrying amountoffinancial assets (×R,××è)(]h,RFÙ) Carrying amountoffinancial liabilities ÙÙè,hFz Ùðh,×Ùð Reclassification due to interest rate derivative(ÙÙð,ðhÙ)(]×è,z]z) Net floating interest position ×hh,èRh ×èR,]ÙÙ

Sensitivity analysis on interest rate risks Thefollowing table shows the impact of aparallel shift of interest rates by 100basis points (BP) up and 25 BP down on the Group’sequity and income statement, net of tax. Duetolower interest rates,the underlying assumptions for the sensitivity analysis have been aligned with prevailing market circumstances.The calculation is performed on both, the portion of the outstanding debt (excluding the asset- backed securitization program; see notes 9and 12) at floating interest rates and the outstanding derivatives exchanging floating into fixed interest rates at the respective year-end.This sensitivity analysis only indicates the potential impact for the respective fiscal year at the prevailing conditions in the financial markets.Consequently,itdoes not represent actual or futuregains or losses,which arestrictly managed and controlled, as clearly indicated in the Group’sTreasury Policy.

as of August ]×, Ùè×è Ùèèz Impacton Income statementEquity Income statementEquity in thousands of CHF

×èè BP ÙðBP ×èè BP ÙðBP ×èè BP ÙðBP ×èè BP ÙðBP increase decrease increase decrease increase decrease increase decrease Floating rate bearing items (],èhF) hFz ––(],×Ùð) hRF– – Interest rate swaps Ù,]FF (FèR) R,è]z (Ù,×Ù]) ×,R]Ù(ÙhR)Ù,FÙF(×,ÙèÙ) Total interest rate sensitivity (h×è) ×F× R,è]z (Ù,×Ù])(×,]××) ]èR Ù,FÙF (×,ÙèÙ)

Credit risk and concentration of credit risk Credit risk, i.e.the risk of counterparties defaulting,iscontrolled by the application of credit approvals, limits and monitoringprocedures.AsofAugust 31, 2010, the largest customer represents 10% (2009: 4%) whereas the 10 biggest customers represent 26% (2009: 18%) of trade receivables.Due to the diverse geographic and large customer base,the Group has no material credit risk concentration.

Theextent of the Group’scredit risk exposureisrepresented by the aggregate balance of amounts receivable,reduced by the effects of netting arrangements,ifany,with counterparties.The maximum nominal credit risk exposureinthe event all other parties fail to perform their obligation was CHF 750.4 million as of August 31, 2010 (2009: CHF 649.3 million). TheGroup has insured certain credit risks through a credit insurance policy. Selected number of customers with significant outstanding amounts arecovered by that policy. KoConsolidanzernrechnungted 105 Financial Statements

Liquidityrisk Liquidity risk arises through asurplus of financial obligationsover available financial assets due at any point in time.The Group’sliquidity is ensured by means of regular Group-wide monitoring and planning of liquidity coordinated by the In-house Bank. Forextraordinary financing needs,adequate credit lines with financial institutions have been arranged (see note 23).

Contractual maturities Thetable below provides an overview of contractual maturities for financial liabilities and derivatives. as of August ]×, Ùè×è In the first year In the second to After five years Contractual the fifthyear amount in thousands of CHF

Non derivative financial liabilities Bank overdrafts (×],ÙFF) (×],ÙFF) Short-term debt (×hð,z]R) (×hð,z]R) Trade payables (ÙF],zh]) (ÙF],zh]) Long-term debt (]è,FÙF)(]hÙ,hRè)(ðèÙ,h]è) (zèR,×ðF) Other liabilities (ÙÙè,z×F) (ÙÙè,z×F) Derivatives Interest rate derivatives (Ù,RR])(F,RRh)ððð (××,Ù×ð) Currency derivatives Inflow ð,FÙè,]ðF ðF,RÙh ð,Fhh,Ùè] Outflow (ð,F]è,Rè×)(ðh,ð××) (ð,FRR,]×Ù) Commodity derivatives Inflow ×,]hÙ,èF××Ù,ÙÙè ×,]RÙ,ðè× Outflow (×,]ÙF,F]Ù)(×,]Rz) (×,]ÙR,èÙ×) Total net (z×Ù,R]R)(]Fz,ÙRè)(ðèÙ,×hð) (×,hRR,Ùz])

as of August ]×, Ùèèz In the first year In the second to After five years Contractual the fifthyear amount in thousands of CHF

Non derivative financial liabilities Bank overdrafts (Ùz,]]R) (Ùz,]]R) Short-term debt (ÙÙÙ,RRð) (ÙÙÙ,RRð) Trade payables (ÙÙz,zRè) (ÙÙz,zRè) Long-term debt (]],Fðè)(]ÙÙ,è]è)(FÙF,ÙhÙ)(×,èè×,zðÙ) Other liabilities (ÙFè,RÙR) (ÙFè,RÙR) Derivatives Interest rate derivatives (F,]ÙÙ)(×,zÙ]) (R,ÙÙð) Currency derivatives Inflow ],Fè],FðR ÙÙ,FFè ],FÙR,]×R Outflow (],Fèz,RÙF)(ÙÙ,RÙz) (],F]Ù,Fhð) Commodity derivatives Inflow ×,èhð,zèè Ù×Ù,hðè ×,ÙRR,Fðè Outflow (×,ÙÙÙ,ðF×)(×ÙÙ,×z]) (×,]FF,hðÙ) Total net (×,×ðh,RhÙ)(Ùð],ðFð) (FÙF,ÙhÙ)(Ù,è]h,hèz) 106 Consolidated Financial Statements Notes

Fair value of ﬁnancial instruments Carrying amount and fair value of each class of financial asset and liability arepresented in the table below.

as of August ]×, Ùè×è Loans and Fair value Financial Available Derivatives Total Fair value receivables through proﬁt liabilities at forsale used carrying and loss amortized in hedging amount – trading× cost in thousands of CHF

Cash equivalents ×h,]Fè ×h,]Fè ×h,]Fè Short-term deposits hðè hðè hðè Trade receivables ]×Ù,F]R]×Ù,F]R]×Ù,F]R Derivative financial assets ]èF,èh] FÙ,ðèh]hè,ðRè ]hè,ðRè Other assets ÙF,Fðè Ù]Ù Ùh,èRÙ Ùh,èRÙ Total Assets ]hz,]zR]èF,èh] Ù]Ù FÙ,ðèhhðè,Ù×è hðè,Ù×è Bank overdrafts ×],ÙFF ×],ÙFF ×],ÙFF Short-term debt ×hð,z]R ×hð,z]R ×hð,z]R Trade payables ÙF],zh] ÙF],zh] ÙF],zh] Derivative financial liabilities ]]Ù,ðzè ]F,ÙFz ]h×,èðz ]h×,èðz Long-term debt Fzz,ð×FFzz,ð×Fh×R,FÙF Other liabilities ÙÙè,z×F ÙÙè,z×F ÙÙè,z×F Total Liabilities ]]Ù,ðzè ×,ðz],Rèz ]F,ÙFz ×,zFÙ,RFR ×,zR],zzR 1The category “Fair value through profitand loss – trading” mainly includes derivatives held in subsidiaries with the broker/trader status and does not mean thattheyare held fortrading.

as of August ]×, Ùèèz Loans and Fair value Financial Available Derivatives Total Fair value receivables through proﬁt liabilities at forsale used carrying and loss amortized in hedging amount – trading× cost in thousands of CHF

Cash equivalents ]],zz]]],zz]]],zz] Short-term deposits Ù,×]h Ù,×]h Ù,×]h Trade receivables ]Ùz,FèR]Ùz,FèR]Ùz,FèR Derivative financial assets ×RÙ,Rzh]R,hðÙÙÙ×,FÙz ÙÙ×,FÙz Other assetsÙ Ù×,ÙÙè ð×Ù Ù×,zðÙ Ù×,zðÙ Total Assets ÙÙh,×hR ×RÙ,Rzh ð×Ù ]R,hðÙ FÙz,]]z FÙz,]]z Bank overdrafts Ùz,]]R Ùz,]]R Ùz,]]R Short-term debt ÙÙÙ,RRð ÙÙÙ,RRð ÙÙÙ,RRð Trade payables ÙÙz,zRè ÙÙz,zRè ÙÙz,zRè Derivative financial liabilities Rz,Ùðz FÙ,ÙF] ×ð],zÙÙ ×ð],zÙÙ Long-term debt hÙR,Ùz]hÙR,Ùz]FzÙ,h×R Other liabilitiesÙ ÙFè,RÙR ÙFè,RÙR ÙFè,RÙR Total Liabilities Rz,Ùðz ×,Fh×,]ÙÙ FÙ,ÙF] ×,RÙð,ÙFF ×,hRz,Fz× 1The category “Fair value through profitand loss – trading” mainly includes derivatives held in subsidiaries with the broker/trader status and does not mean thattheyare held fortrading. 2Certain comparatives have been reclassified to conform with the currentperiod’spresentation. Consolidated 107 Financial Statements

Fair Value – Hierarchy As of September1,2009, the fair value measurements of financial assets and liabilities areclassified using afair value hierarchy that reflects the significance of the inputs used in making the measurements. Thefair value hierarchy has the following levels:

Level 1: Thefair value is based on unadjusted, quoted prices in active markets which gives the best possible objective indication for the fair value of a financial asset or liability.The assets and liabilities included in this fair value hierarchy mainly consist of commodity futures.

Level 2: Theestimation of the fair value is based on the results of avaluation model.Thevaluation model for commodity derivatives includes quoted prices in active markets,recent arm’slength transactions or dealer and supplier quotes adjusted for the specificcharacteristics of the underlying commodities such as the cost of carry,differentials for the properties and conversion yields.Corroborated market data is used for the valuation of foreign exchange and interest rate derivatives.

Level 3: Thevaluation models used arebased on parameters and assumptions not observable on the market.

Thefollowing table summarizes the use of level with regardtofinancial assets and liabilities: as of August ]×, Ùè×è Level × Level Ù Level ] Total in thousands of CHF

Derivative ﬁnancial assets ×],×èè ]ðh,ÙRè – ]hè,ðRè

Derivative ﬁnancial liabilities ],]R]]Fh,FhF–]h×,èðz

Therehavebeen no transfers between the levels during the fiscal year 2009/2010. 108 Consolidated Financial Statements Notes

Capital management It is the Group’spolicytomaintain asound capital base to support the continued development of the business.The BoardofDirectors seeks to maintain aprudent balance between debt and equity.In compliance with bank covenants,the minimal target solvencyratio (equity in %oftotal assets,adjusted for derivative financial instruments on anetted basis) is set at 20%.

Thetarget payout ratio to shareholders currently amounts to approximately 30% of the net profitfor the year in the form of asharecapital reduction and repayment or dividend.Thetarget ratio and the form of the payout recommended by the Boardare reviewed on an annual basis and aresubject to the decision of the Annual General Meeting of Shareholders.

TheGroup’ssubsidiaries have complied with applicable local statutory capital requirements.

27.Related parties Thefollowing shareholders hold aparticipation of morethan 3% of the issued sharecapital of the Group’sultimate parent Barry Callebaut AG:

as of August ]×, Ùè×è Ùèèz

Jacobs Holding AG,Zurich,Switzerland ðè.××%ðè.Ù×% Renata Jacobs R.ÙR% R.ÙR% Nicolas and Philippe Jacobs× F.×Ù% F.×Ù% Nathalie Jacobs ].èh% ].èh% 1Form agroup of shareholders according to Swiss Stock exchangeregulations as published in the Swiss Oﬃcial Gazette of Commerce of February4,2008

Significant transactions and balances between the Group and related parties areasfollows:

in thousands of CHFNatureofcost/revenue Ùèèz/×è ÙèèR/èz

Sales to related parties ×h] ÙhF PasteleríaTotel, S.L. Revenue from sales and services ×h] ÙhF

Purchases from related parties (××,ÙÙÙ) (z,ððÙ) African Organic Produce AG Cost of goods sold (××,ÙÙÙ) (z,ððÙ)

Operating expenses chargedbyrelated parties (h,FzÙ)(R,hÙF) Jacobs Holding AG Managementservices (×,Fðè)(×,FhR) Adecco Group Human resources services (ð,zÙè)(F,RRF) PasteleríaTotel, S.L. Managementservices (×]) Biolands International LtdManagementservices (Fh) Other (×èÙ)(×èÙ)

Trade receivables from related parties Ù×zÙ Jacobs Holding AG ÙÙ Adecco Group – Ù PasteleríaTotel, S.L. – ×RF

Trade payables to related parties ],ð]×Ù,Fèz Jacobs Holding AG ]×è ]×F Adecco Group ×,ÙRÙ×,×ÙÙ African Organic Produce AG ×,RRÙ×,èzh Biolands International Ltd –]] Other ðh ×z

Transactions with related parties werecarried out on commercial terms and conditions at market prices. All receivables from related parties arenon-interest bearing and their collection is expected within the next twelve months. Consolidated 109 Financial Statements

Compensation of keymanagementpersonnel Thekey management personnel aredefined as the BoardofDirectors and the Executive Committee Keymanagement compensation consists of the following: in millionofCHF Ùèèz/×è ÙèèR/èz

Short-term employeebeneﬁts R.Ù h.× Post-employmentbeneﬁts ×.ð è.F Share-based payments Ù.Ù R.ð Total ×].z ×F.Ù

Further details related to the requirements of the Swiss Transparencylaw (Art. 663bbis and 663c Swiss Code of Obligations) aredisclosed in note 6inthe Financial Statements of Barry Callebaut AG.

28. Commitments and contingencies

Capital commitments as of August ]×, Ùè×è Ùèèz in thousands of CHF

Property,plantand equipment ×,èÙh ×ð] Intangible assets Ù,hÙh zFÙ Total capital commitments ],hzÙ ×,××h

Operating lease commitments Operating lease commitments represent rentals payable by the Group for certain vehicles,equipment, buildings and offices.Equipment and vehicle leases werenegotiated for an average term of 3.6 years (2008/09: 3.0 years).

Thefutureaggregate minimum lease payments under non-cancellable operating leases aredue as follows: as of August ]×, Ùè×è Ùèèz in thousands of CHF

In the first year ×],Fzh ×Ù,×h] In the second to the fifthyear ]h,èzF]h,Ù]h After five years ÙR,ð×h]],zRz Total futureoperating lease commitments hz,]×è Rð,]zz

in thousands of CHF Ùèèz/×è ÙèèR/èz

Lease expenditurechargedtothe income statement ×Ù,ÙhÙ ×],zÙ× 110 Consolidated Financial Statements Notes

Contingencies Group companies areinvolved in various legal actions and claims as they arise in the ordinary course of the business.Provisions have been made,wherequantifiable,for probable outflows.Inthe opinion of the management, after taking appropriate legal advice,the futuresettlements of such actions and claims will not have amaterial effect on the Group’s financial position.

29. Group companies Theprincipal subsidiaries of Barry Callebaut as of August 31, 2010, arethe following:

CountrySubsidiaryOwnership in %Currency Capital

Switzerland BarryCallebaut Sourcing AG ×èè CHF Ù,èèè,èèè BarryCallebaut Schweiz AG ×èè CHFÙ,Fèè,èèè ChocolatAlprose SA ×èè CHF h,èèè,èèè Belgium BarryCallebaut Services N.V. ×èè EUR F×ð,èèè,èèè BarryCallebaut Belgium N.V. ×èè EUR FÙ,hèè,èèè International Business CompanyBelgium BVBA ×èè EUR Fð,èèè PierreIserentantSA ×èè EUR ÙFè,zèR Brazil BarryCallebaut Brasil SA ×èè BRL ÙF,××Ù,zz] Cameroon Société Industrielle Camerounaise des Cacaos SA hR.]ðXAF ×,×Ùh,ðèè,èèè SEC Cacaos SA ×èè XAF ×è,èèè,èèè Canada BarryCallebaut Canada Inc. ×èè CAD Ù,èèè,èèè China BarryCallebaut Suzhou Chocolate Ltd ×èè USD Ùh,èèè,èèè BarryCallebaut Suzhou Chocolate R&D Center ×èè USD Ù,èèè,èèè Côte d’Ivoire Société Africaine de Cacao SACO SA ×èè XAF Ùð,Fzð,Fð×,]×F BarryCallebaut Négoce SA ×èè XAF ],hèè,èèè,èèè Czechia BarryCallebaut Czech Republic s.r.o. ×èè CZK Ùèè,èèè Denmark BarryCallebaut Danmark APS ×èè DKK ×Ùð,èèè Eurogran A/S ×èè DKK ],èèè,èèè Ecuador BarryCallebaut Ecuador SA ×èè USD ðè,èèè France BarryCallebaut Manufacturing France SAS ×èè EUR F,F]h,ðÙè BarryCallebaut France SAS ×èè EURðè,èèè,èèè BarryCallebaut Manufacturing Bourgogne SAS ×èè EUR Ù,èèè,èèè Germany BarryCallebaut Deutschland GmbH ×èè EURð×,×Ùz VanHouten GmbH &CoKG ×èè EUR ×ð,]]R,hðF C.J. vanHouten &Zoon Holding GmbH ×èè EUR hÙ,èzÙ,×ðð VanHouten Beteiligungs AG &CoKG ×èè EUR zz,zhð,èèè Stollwerck GmbH ×èè EUR Ùè,ðèè,èèè Stollwerck Schokoladenvertriebs GmbH ×èè EUR h,×RÙ,èèè VanHouten Beteiligungs GmbH ×èè EUR Ùð,èèè Schloss Marbach GmbH ×èè EUR ×,Fèè,èèè Ghana BarryCallebaut Ghana Ltd ×èè USD z,ÙèÙ,Ù×z GreatBritain BarryCallebaut Manufacturing (UK) Ltd ×èè GBP ×ð,ÙFh,RðÙ BarryCallebaut UK Ltd ×èè GBP ],Ùèè,èèè BarryCallebaut Vending UK Ltd ×èè GBPÙè,èèè Hong Kong VanHouten (Asia Paciﬁc) Ltd ×èè HKD Ù India BarryCallebaut India ×èè INR ×è,èèè,èèè Italy BarryCallebaut Italia S.p.A. ×èè EUR ×èÙ,èèè BarryCallebaut Manufacturing Italy Srl. ×èè EUR Ù,FÙF,RÙ× Dolphin Srl. ×èè EUR ××è,èèè Japan BarryCallebaut Japan Ltd ×èè JPY ×,ÙFè,èèè,èèè Malaysia BarryCallebaut Malaysia Sdn Bhd Fè MYR ]F,èèè,èèè Selbourne Food Services Sdn Bhd Fè MYR Ù,èèè,èèè Mexico BarryCallebaut MexicoDistributors SA de CV ×èè MXN ××h,×zF,ð]è BarryCallebaut Servicios SA de CV ×èè MXNðè,èèè BarryCallebaut Mexico, S. de RL de CV ×èè MXN ×],èÙh,Ùèè Consolidated 111 Financial Statements

CountrySubsidiaryOwnership in %Currency Capital

Poland BarryCallebaut Manufacturing PolskaSp. zo.o. ×èè PLN ×è,èèè,èèè BarryCallebaut PolskaSp. zo.o. ×èè PLN ðè,èèè Russia BarryCallebaut Netherlands Russia LLC ×èè RUB ×,èÙF,ÙF],ÙR× Gor Trade LLC ×èè RUB FRð,èèè,èèè Singapore BarryCallebaut Asia Paciﬁc(Singapore) Pte. Ltd ×èè SGD R],RðF,FFz Spain BarryCallebaut Ibérica SL ×èè EUR Ùð,èèè BarryCallebaut PastryManufacturing Ibérica SL Rè EUR ]èè,èèè Chocovic S.A. ×èè EUR zRh,Fèè Sweden BarryCallebaut Sweden AB ×èè SEK ×èè,èèè Eurogran Nordic AB ×èè SEK ×èè,èèè The Netherlands BarryCallebaut Nederland B.V. ×èè EUR Ù×,Ù]ð,èèè LuijckxB.V. ×èè EUR ×R,ÙÙÙ Hoogenboom Benelux BV ×èè EUR ×R,×ðÙ Dings DécorB.V. hè EUR ÙÙ,FRz Turkey BarryCallebaut Eurasia Gida Sanayi VE Ticaret LtdSti ×èè TRLÙè,èèè USA BarryCallebaut CocoaUSA Inc. ×èè USD h,FF] BarryCallebaut North America Holding Inc. ×èè USD ×èè,èè×,èèè BarryCallebaut USALLC. ×èè USD ×èè,×zè,Ù×× BarryCallebaut has some dormantcompanies which arenot enclosed as principal subsidiaries,for example BarryCallebaut Belgium Consumer NV, VanHouten Service AG,BarryCallebaut Holding (UK) Ltd, Adis Holding Inc., BarryCallebaut USAHolding,Inc., Omnigest SAS, Alliance Cacao SA 112 Consolidated Financial Statements Notes

30.Risk assessmentdisclosurerequired by Swiss Law

Group Risk Management Barry Callebaut’sGroup Risk Management (GRM) is acorporate function responsible for implementing and managing all Group Risk Functions including the Enterprise Risk Management (ERM) under the direction and as approved by theAudit,Finance,Risk,Quality and Compliance Committee (AFRQCC) of the BoardofDirectors.The Group’sERM Framework is designed to create an aggregate view on all existing major risks,enabling the Group to systematically evaluate,prioritize and control the Group’s risk portfolio.The ERM is based on the framework of the Committee for Sponsoring Organizations (COSO) and classifies risks into major five risk categories: Strategic,Market, Financial Reporting, Operating and Compliance/Legal Risks.The Group’sERM is multidimensional in the form, that risks areidentified, assessed and controlled not only directly from the legal entity but also from specialized CorporateFunctions such as Quality Assurance,Sourcing and Cocoa, Group Finance and Treasury, Operations &Supply Chain Organization (OSCO), Information Management, Global Human Resour- ces, Innovations and Research and Development and Group Insurance and supervised by the GRM. Risk assessments arethe responsibility of line management but overseen and controlled by GRM. Thus, issues andrisks on all levels can be identified, addressed and mitigated efficiently and effectively.

Theresults of the Group ERM arepresented to the AFRQCC quarterly or immediately in the event of an emergencyindividual risk issue.

Financial risk management is described in moredetail in note 26.

31. Subsequentevents

TheConsolidated Financial Statements wereauthorized for issue by the BoardofDirectors on November 2, 2010,and aresubject to approval by the Annual General Meeting of Shareholders on December 7, 2010. KoRepornzernrtoftechnunghe StatutoryAuditor 113113

KPMG AG Audit Badenerstrasse 172 P.O. BoxTelephone +4144249 31 31 CH-8004Zurich CH-8026 Zurich Fax+41 44 249 23 19 Internet www.kpmg.ch

Reportofthe StatutoryAuditor on the Consolidated Financial Statements to the General Meeting of Shareholders of BarryCallebaut AG,Zurich As statutory auditor,wehaveaudited the accompanying consolidated financial statements of Barry CallebautAG, which comprise the income statement, statement of comprehensive income,balance sheet, cash flow statement, statementofchanges in equity andnotes on page 56 to 112for theyearended August 31, 2010.

BoardofDirectors’ Responsibility Theboardofdirectors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and the requirements of Swiss law. This responsibility includes designing,implementing and maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that arefreefrommaterial misstatement, whether due to fraud or error.The boardofdirectors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that arereasonable in the circumstances.

Auditor’sResponsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss lawand Swiss Auditing Standards as well as Internation- al Standards on Auditing.Those standards requirethat we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements arefreefrommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whetherdue to fraud or error.Inmaking those risk assessments,the auditor considers the internal control system relevant to the entity’spreparation and fair presentation of the consolidated financial statements in order to design audit procedures that areappropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made,aswell as evaluating the overall presentation of the consolidated financial statements.Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

Opinion In our opinion, the consolidated financial statements for the year ended August 31, 2010 give atrue and fair view of the financial position, the results of operations and the cash flows in accordance with Inter- national Financial Reporting Standards (IFRS) and comply with Swiss law.

ReportonOther LegalRequirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA)and independence (article 728 CO and article 11 AOA)and that thereare no circumstances incompatible with our independence.

In accordance with article 728a paragraph 1item 3COand Swiss Auditing Standard890, we confirm that an internal control system exists,which has been designed for the preparation of consolidated financial statements according to the instructions of the boardofdirectors.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG

Roger Neininger MarcZiegler Licensed Audit Expert Licensed Audit Expert Auditor in Charge

Zurich, November 2, 2010

KPMG AG/SA, aSwiss corporation,isasubsidiaryofKPMGHolding AG/SA, Member of the Swiss Institute which is asubsidiaryofKPMGEurope LLP and amember of the KPMG net- of Certified Accountants and TaxConsultants work of independent firms affiliated with KPMG International Cooperative (“KPMG International”), aSwiss legal entity. 114 Ko5-YenzarernrOvechnungerview 5-Year Overview

KeyFigures BarryCallebaut Group CAGR(%)×Ù Ùèèz/×è ÙèèR/èz Ùèèh/èR ÙèèF/èh Ùèèð/èF×ð

Consolidated Income Statement Sales volume Tonnes h.ð% ×,]èð,ÙRè ×,Ù×],F×è ×,×FF,èèh ×,èðz,Ùèè zhF,FF× Sales revenue CHFm R.z%ð,Ù×].R Ù,RRè.Ù Ù,R×ð.ÙÙ,×èF.R],h×].Ù EBITDA× CHFm Ù.F%Ùhè.h ÙðF.× ÙÙ].h ÙÙh.× ]zÙ.ð Operating profit(EBIT)CHF mð.z%]hè.Ù ]ðè.R]Ù×.×]ÙÙ.è Ùzð.è Net profitfromcontinuing operationsÙ CHFm h.]% Ùð×.h ÙÙF.z Ùèz.×Ùèh.è ×Rz.h Net profitfor the year CHFm R.Ù% Ùð×.h ÙÙF.z Ùèð.ð ×ÙÙ.××R].ð Cash flow ] CHFm h.×%Ùðh.R Ù×R.×Ù]Ù.] ÙèF.R]Ùh.z EBIT/sales revenue % h.×% h.Ù% h.×% h.z% h.z% EBIT per tonne CHF(×.ð%) ÙR].R ÙRz.×ÙzÙ.ð ]èð.z ]èÙ.è

BalanceSheet Total assets CHFm F.Ù% ],ðhè.R],ð×Ù.R],hÙz.ð ],×RF.h Ù,R××.R Net working capitalÙ CHFm ×.Ù% zFÙ.z ×,è×è.××,è]h.× RR].zzÙè.z Non-currentassets CHFm Ù.Ù% ×,Ùèð.R ×,Ù]Ù.Ù×,ÙÙ].h ×,Ù××.] ×,×RÙ.z Net debt CHFm (×.è%) Rhè.R zÙÙ.h ×,èÙ×.Ù z]è.Ù zèF.z Shareholders’ equityð CHFm F.R% ×,]èÙ.] ×,Ùðð.F ×,×hð.z ×,èðz.× zzz.Ù Capital expenditureF CHFm F.×% ×Ùð.××ÙÙ.Ù ÙÙz.z ×ð].×××Ù.h

Ratios Economic Value Added (EVA)CHF m R.R% ×Ùh.h ×Ùz.z ×ÙF.] ×ÙÙ.z ×èð.Ù Return on invested capital (ROIC)h % ×Ù.R% ×].z% ×Ù.è% ×Ù.]% ×].h% Return on equity (ROE) % ×z.F% ×R.×% ×h.h% ×z.ð% ×z.è% Debt to equity ratio % FF.z% hð.×% RR.ð% Rh.R% zè.R% Solvency ratioR % ]F.ð% ]ð.h% ]×.ð% ]].Ù% ]ð.ð% Interest coverage ratioz Ù.]%ð.R ð.è Ù.R ð.× ð.] Net debt/EBITDA(Ù.h%) ×.z Ù.×Ù.]Ù.ÙÙ.] CAPEX/sales revenue % Ù.R% ].è%ð.Ù%].h% ].×%

Shares Shareprice at ﬁscal year-end CHF F.Ù% hè] ðhÙ hÙÙ Rh] ðÙR EBIT per share(issued)CHF ð.R% h×.FFh.RFF.è FÙ.h ðh.× Basic earnings per share×è CHF h.]%ÙR.F ÙÙ.è Ùè.Ù Ùè.Ù ]F.h Cash earnings per share×× CHF h.]% RR.FR×.×R].z hR.FFF.z Payout per share×Ù CHF h.ð% ×Ù.è ×Ù.ð ××.ð ××.ð ×è.ð Payout ratio % Ùz% ÙR% ÙR% Ùz% Ùz% Price-earnings ratio at year-end×] (è.R%) ×Ù.Ù ×].è ×h.z Ù×.h ×Ù.z Market capitalization at year-end CHFm F.Ù% ],F]×.z Ù,zFh.F],hÙ].×Ù,ð×è.R Ù,R]].Ù Number of shares issued è.è%ð,×hè,èèè ð,×hè,èèè ð,×hè,èèè ð,×hè,èèè ð,×hè,èèè Total capital repaymentCHF m ××.R% FÙ.F ðz.ð ðz.ð ðÙ.] Ù×.Ù

Other Employees ×.R% h,ððè h,ðÙð h,ÙR× h,ðzÙ h,èÙR Beans processed Tonnes F.z%ðFz,RhððÙ×,RÙhÙh×,×ÙzÙÙÙ,]hR Ù]ð,RÙð Chocolate &compound production Tonnes ð.z% ×,èð],zèF zh×,zð× zÙh,]RhRRð,]hÙ R]R,zÙè

× EBIT +depreciation of property,plantand equipment+ z EBITDA/net financial expense amortization of intangible assets ×è Based on the net profitfor the year attributable to the shareholders of the parentcompany/ Ù Net profitfromcontinuing operations (including non-controlling interest) basic shares outstanding ] Operating cash flow beforeworking capital changes ×× Operating cash flow beforeworking capital changes/basic shares outstanding Ù Includes currentassets and liabilities related to commercial activities ×Ù Parvalue reduction instead of adividend; Ùèèz/×è as proposed by the BoardofDirectors and currentprovisions to the Annual General Meeting ð Total equity attributable to the shareholders of the parentcompany ×] Shareprice at year-end/basic earnings per share F Capital expenditurefor property,plantand equipmentand intangible ×Ù Compound annual growth rate assets (excl. acquisitions) ×ð Certain comparatives have been restated or reclassified to conform to the currentperiod’s h EBIT x(1-effectivetax rate)/averagecapital employed presentation R Total equity attributable to the shareholders of the parentcompany/ total assets Contents

116 Financial Statements of BarryCallebaut AG

116 Income Statement 117 BalanceSheet 118 Notes to the Financial Statements 121 Reportofthe StatutoryAuditor 116 KoFinancialnzernrechnungStatements of BarryCallebaut AG Income Statement

forthe ﬁscal year ended August ]×, Ùèèz/×è ÙèèR/èz in CHF

Income Dividend income ×]è,Rhè,èèè ××è,èèè,èèè Financial income z,hFz,hhè h,FF×,×Ùè License income Ùè,Ùðz,ð]× ]R,ð×],]F] Managementfees Ù×,ððF,×RF ÙÙ,ð×è,RÙÙ Other income R,RRð,×hð ×ð,ÙFF,ðèz Total income Ù××,]Ùè,FFÙ×zÙ,×ð×,R×F

Expenses Personnel expenses (ÙR,×]z,ÙÙF)(]],ÙhR,Ùzh) Financial expenses (×Ù,Ù]Ù,ÙRz)(×],Ùzè,F]]) Depreciation of property,plantand equipment(ðRR,ð]R)(hhè,]FÙ) Amortization of intangible assets (],èðð,z]F)(×Ù,hèÙ,RR]) License expenses – (ðhè,zzè) Unrealized loss on treasuryshares (Ù,××z)(Ù]z,zFF) Other expenses (Ùð,zÙè,R]Ù) (ÙF,RRR,F]F) Total expenses (hÙ,×ðz,]ÙÙ)(RR,×Ù×,zFz)

Proﬁtbeforetaxes ×]z,×R×,]Ùè ×èF,èèz,RÙh

Income taxes (Ù,èzð,]hÙ) (zÙÙ,Ùzè)

Net proﬁtfor the year ×]h,èRð,zÙF ×èð,èRh,]ðh

Retained earnings

in CHF Ùèèz/×è ÙèèR/èz

Retained earnings as of September ×, zðF,èÙ],èÙÙ RÙ×,zèÙ,FèÙ (Increase) decrease of reserve fortreasuryshares ×,ÙÙÙ,×hÙ R,zzè,Ù]Ù Capital reduction on treasuryshares ð,hF]FÙ,FÙz Net proﬁt ×]h,èRð,zÙF ×èð,èRh,]ðh Retained earnings as of August ]×, ×,èzÙ,ððF,zèh zðF,èÙ],èÙÙ KoFinancialnzernrechnungStatements 117 of BarryCallebaut AG BalanceSheet

Assets as of August ]×, Ùè×è Ùèèz in CHF

Currentassets Cash and cash equivalents ]Ù,RÙ× ÙÙ,ðÙ] Treasuryshares ],×RR,ðhÙ Ù,×hÙ,Rzz Accounts receivable from Group companies ×F,×zF,Ù]R Ùð,zzè,èhð Short-term loans granted to Group companies ÙÙð,]èR ×z,]ðh Other currentassets Ù,RÙè,R×z Ù,ð]h,èz× Total currentassets ÙÙ,FF],zhR ]Ù,hF×,zÙð

Non-currentassets Property,plantand equipment ×,ÙÙ],h×F ×,ðFÙ,]Rz Financial assets Investments ×,Rð],hhÙ,h×ð ×,hÙ],×hh,zhR Intangible assets Trademarks h,hð],zÙFF,ð×Ù,FRh Patents/Productdevelopmentcosts Ù,RF×,h×è Ù,è×F,zRÙ Other z×Ù,×F] ðÙ],RèF Total non-currentassets ×,RFF,ðÙÙ,Ùðè ×,h]],R×ð,RÙÙ

Total assets ×,RRz,ÙèR,ÙÙR ×,hFF,ðhh,hRz

Liabilities and shareholders’ equity as of August ]×, Ùè×è Ùèèz in CHF

Currentliabilities Bank overdrafts ð,R]Ù – Accounts payable to thirdparties ×,zÙð,hR] ð,èðð,zÙ] Accounts payable to Group companies ×è,hzð,z]× ð,]Rð,Ùð× Accounts payable to shareholders ]èz,Fèð ]×F,è×× Short-term loans from Group companies Ùèð,RRh,Rèz ]ðz,×Ùz,zzF Accrued liabilities ×F,×z],zRF ×ð,ððz,Rhh Accrued taxes ×,RÙR,Ùz××,]×F,ÙÙz Total liabilities Ù]F,zÙh,Ù]h ]RF,hR],ðèh

Shareholders’ equity Sharecapital× ×zh,ÙzÙ,èèè ÙFÙ,××z,èèè Legalreserves ×ðh,è×z,]z] ×ðh,è×z,]z] Reserve fortreasuryshares ],×zè,Fz× Ù,F×Ù,RFð Retained earnings ×,èzÙ,ððF,zèh zðF,èÙ],èÙÙ Total shareholders’ equity ×,ÙðÙ,ÙFè,zz××,]hz,hzÙ,ÙRÙ

Total liabilities and shareholders’ equity ×,RRz,ÙèR,ÙÙR ×,hFF,ðhh,hRz 1The sharecapital as of August 31, 2010,consists of 5,170,000 fully paid-in shares at anominal value of CHF38.20 (August 31, 2009:CHF 50.70) 118 KoFinancialnzernrechnungStatements of BarryCallebaut AG Notes to the Financial Statements

1. Liens,guarantees and pledges in favorofthirdparties TheCompany is aco-debtor for bank loans of max. EUR 850 million (CHF 1,098.6 million; 2008/09: CHF 1,293.7 million) obtained by Barry Callebaut Services N.V.,Belgium, whereof the maximal liability is limited to the freely distributable retained earnings (CHF 1,094.6 million less 35% withholding tax). Furthermore, the Company is also aco-debtor for the Senior Notes of EUR 350 million (CHF 452.4 million; 2008/09: CHF 532.7 million) issued by Barry Callebaut Services N.V.,Belgium. Additionally, the Company issued several corporate guarantees for various credit facilities granted to direct and indirect subsidiaries for an amount of up to CHF 773.7 million (2008/09: CHF 713.9 million).

TheSwiss Barry Callebaut entities form aVAT subgroup and, hence,every company participating in the subgroup is liable for VATdebt of other subgroup participants.

2. Fire insurancevalue of property,plantand equipment

as of August ]×, Ùè×è Ùèèz in CHF

Fire insurance value of property,plantand equipment F,Rèè,èèè ð,Ùèè,èèè

3. Investments

Name and domicile Sharecapital Purpose Percentageofinvestment as of August ]×, Ùè×è Ùèèz

ADIS Holding Inc., Panama CHFÙ×,FÙÙ,]ÙÙ Dormant ×èè% ×èè% BarryCallebaut Belgium N.V.,EUR FÙ,hèè,èèè Production,Sales zz.zz% zz.zz% Belgium BarryCallebaut Nederland B.V.,EUR Ù×,Ù]ð,èèè Holding ×èè% ×èè% The Netherlands BarryCallebaut Nigeria Ltd, NGN ×è,èèè,èèè Sales ×% ×% Nigeria BarryCallebaut Schweiz AG,CHF Ù,Fèè,èèè Production,Sales ×èè% ×èè% Switzerland BarryCallebaut Services N.V.,× EUR F×ð,èèè,èèè In-house Bank zz.zz% zz.zz% Belgium BarryCallebaut Sourcing AG,CHF Ù,èèè,èèè Sourcing ×èè% ×èè% Switzerland BC Belgium Consumer N.V.,EUR F×,ðèè Dormant zz.zz% zz.zz% Belgium ChocolatAlprose SA,Switzerland CHF h,èèè,èèè Production,Sales ×èè% ×èè% C.J. VanHouten &Zoon Holding EUR hÙ,èzÙ,×ðð Holding ×èè% ×èè% GmbH, Germany LuijckxB.V., The Netherlands EUR ×R,ÙÙÙ Production,Sales ×èè% ×èè% Schloss Marbach GmbH EUR ×,Fèè,èèè Conference and ×èè% ×èè% GermanyTraining Center VanHouten Service AG,CHF ×èè,èèè Dormant ×èè% ×èè% Switzerland 1In2009/10 sharecapital wasincreased by EUR86,290,000.

Investments arestated at cost less any provision for impairment.

4. Treasuryshares TheCompany holds 4,761 treasury shares as of August 31, 2010 (2009: 6,932). In 2009/10, the Company bought 9,174 shares at an average price of CHF 652.65 per share(2008/09: 14,212 shares at an average price of CHF 619.80) and transferred 10,845 shares at an average price of CHF 652.91 per share(2008/09: 23,734 KoFinancialnzernrechnungStatements 119 of BarryCallebaut AG

shares transferred at an average price of CHF 749.94). Furthermore, the Company sold 500treasury shares at an average price of CHF 613.50 (2008/09: none). As of August 31, 2010, the treasury shares have been valued at average price of CHF 669.73 per share(2008/09: average price of CHF 601.98 per share).

5. Signiﬁcantshareholders

as of August ]×, Ùè×è Ùèèz

6. Disclosuresaccording to Art. 663bbis and 663c Code of Obligations

Remuneration of keymanagement1 for the fiscal year 2009/10

in thousands of CHF BoardofDirectors (BoD) Compen- Compen- Other Number Value of Total Total sation ﬁx sation compen- of shares] sharesÙ remunera- remunera- variable sationÙ tion èz/×è tion èR/èz Andreas Jacobs ]Ùð.è ––]Fè ÙèR.R ð]].R ÙRè.] Chairman/Delegate Andreas Schmid ×Fè.è – ð].ð ×Rè ×èÙ.Ù ]×h.z ]hF.h Vice Chairman Member of the AFRQCCð Rolando Benedick ×èð.è – Ù].R ×Rè ×èÙ.Ù Ù]].ÙÙèR.Ù Member of the NCCF James L. Donald ××Ù.ð ––×Rè×èÙ.Ù Ù×F.z ÙÙÙ.] Member of the NCC Markus Fiechterh ––––––-– Member of the AFRQCC Stefan Pfander ×]ð.è ––×Rè×èÙ.Ù Ù]z.Ù ÙèÙ.R Chairman of the NCC Urs Widmer ×Ùh.ð – Ù].Ù×Rè×èÙ.Ù Ùðð.×Ù×è.ð Chairman of the AFRQCC

Total remuneration BoardofDirectors zFð.è – ×èè.ð ×,ÙFè h]è.R ×,hzF.] ×,hèÙ.R

Remuneration ExecutiveCommitteeR ],ðÙR.× ],ÙhÙ.è ×,ððð.] ×è,×ðè ð,RRh.è ×Ù,ÙÙÙ.Ù ×F,××R.×

Total remuneration of keymanagementÙ,Ùz].× ],ÙhÙ.è ×,Fðð.R ××,Ù×è F,F×h.R ×F,ÙÙè.h ×h,RÙè.z

Highest individual remuneration within ExecutiveCommittee: JuergenB.Steinemann CEO BarryCallebaut Group ×,èèè.è ×,è××.× FRè.Ù ].hðè Ù,×hð.è Ù,RFF.ð n/a z

Therewerenotermination payments nor payments to former members of the BoardofDirectors or Executive Committee during the fiscal year.

As of August 31, 2010, no loans or credits to members of the BoardofDirectors or Executive Committee or parties closely related to them areoutstanding. 120 KoFinancialnzernrechnungStatements of BarryCallebaut AG Notes to the Financial Statements

Holdings of shares10

Number of Number of Shares Shares 2009/10 2008/09 BoardofDirectors Andreas Jacobs (Chairman) 11,12 Ù,]Ù××,Ùèè Andreas Schmid (Vice Chairman) ×Ù,]]è ×Ù,×ðè Rolando Benedick ×,ðèè ×,]Ùè James L. Donald ×Rè – Markus Fiechter –– Stefan Pfander hRè Fèè Urs Widmer zRè Rèè Senior ManagementTeam JuergenB.Steinemann,CEO BarryCallebaut Group z]– Victor Balli, CFO BarryCallebaut Group zèF]×è Massimo Garavaglia, PresidentWestern Europe Ù,]èè ],èèè David S. Johnson,PresidentAmericas Ù,]Ùè ×,Rèè StevenRetzlaff,PresidentGlobal Sourcing &Cocoa Fðè ×ðè Dirk Poelman,Chief Operations Officer Ù,ÙRè n/a Hans P. Vriens,Chief Innovation Officer Ù,Ùðè n/a

× Keymanagementisdefined as BoardofDirectors (BoD)and ExecutiveCommittee (since November ëë/,formerly Senior ManagementTeam [SMT]) Ù Including social security and pension contributions,aswell as other benefits ] Number of shares granted in relation to the fiscal year under review; vesting subjecttomeeting service and/or performance conditions Ù Value defined as closing shareprice at grantdate, which mightbehistorical rates before the fiscal year under review ð Audit,Finance,Risk,Quality &Compliance Committee F Nomination &Compensation Committee h No compensation paid. Services rendered by Markus Fiechter as amember of the BoD arecovered by the service feechargedbyJacobs Holding Ç: (see note # in the Consolidated Financial Statements of BarryCallebaut Group) R Disclosurerelates to the ExecutiveCommittee as in place on August ¥², ë²ë, i.e.Juergen B. Steinemann,VictorBalli, Massimo Garavaglia, StevenRetzlaff,Dirk Poelman,Hans Vriens and David S. Johnson.The prior year comparativenumber is related to the SMTand includes the remuneration forthe prior CEO Patrick De Maeseneirefor his services rendered in ëëê/ë/ as well as the remuneration paid to Andreas Jacobs forassuming the role of CEO a.i. The Executive Committee members Hans Vriens and Dirk Poelman were not members of the SMTinprior year z The highest individual remuneration in ëëê/ë/ wasrelated to the prior CEO Patrick De Maeseneireand amounted to CHF (. million. ×è Including shares of related parties to the individual BoD/ExecutiveCommittee member ×× Excluding the Æë.²²% participation held by Jacobs Holding AG ×Ù On August ¥², ëë/,arelated party to Andreas Jacobs held Æ,ëëë call options with astrikeprice of CHF ÆÐÆ and an expirydateofSeptember #, ëë/.

7. Risk assessmentdisclosures Barry Callebaut AG as the ultimate parent of the Barry Callebaut Group,isfully integrated into the Group-wide Risk Management (GRM)process andthe respectiveEnterprise RiskManagement Model. TheGRM process consists of reporting quarterly to the Audit, Finance,Risk, Quality and Compliance Committee (AFRQCC) on identified risks,events and respective response by the management. The processes and actions to identify the risks and remediation areidentified by specialized corporate functions (Commodity management, Treasury,Legal, Internal Audit, Quality,Operations and Supply Chain, etc.) under the GRM program, supported by the legal entities and divisions concerned. These Group function departments areresponsible to monitor those procedures and processes and ensure effective measures while Group risk manager oversee the global process. TheGroup’sgeneral Risk Management process and the Financial Risk Management in particular is described in the Group’sconsolidated financial statements in notes 30 and 26, respectively.

8. Subsequentevents Thereare no further events after the balance sheet date to be disclosed.

Appropriation of available earnings TheBoardofDirectors proposes to carry forwardthe balance of retained earnings of CHF 1,094,556,907. KoRepornzernrtoftechnunghe StatutoryAuditor 121

KPMG AG Audit Badenerstrasse 172 P.O. BoxTelephone +4144249 31 31 CH-8004Zurich CH-8026 Zurich Fax+41 44 249 23 19 Internet www.kpmg.ch

Reportofthe StatutoryAuditor on the Financial Statements to the General Meeting of Shareholders of BarryCallebaut AG,Zurich

As statutory auditor,wehaveaudited the accompanying financial statements of Barry Callebaut AG, which comprise the income statement, balance sheet and notes on pages 116to120 for the year ended August 31, 2010.

BoardofDirectors’ Responsibility Theboardofdirectors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss lawand the company’sarticles of incorporation. This responsibility includes designing,implementing and maintaining an internal control system relevant to the preparation of financial statements that arefreefrommaterial misstatement, whether due to fraud or error.The board of directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that arereasonable in the circumstances.

Auditor’sResponsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss lawand Swiss Auditing Standards.Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error.Inmaking those risk assessments,the auditor considers the internal control system relevant to the entity’spreparation of the financial statements in order to design audit procedures that areappropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control system.An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made,aswell as evaluating the overall presentation of the financial statements.Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

Opinion In our opinion, the financial statements for the year ended August 31, 2010 comply with Swiss lawand the company’sarticles of incorporation.

In accordance with article 728a paragraph 1item 3COand Swiss Auditing Standard890, we confirm that an internal control system exists,which has been designed for the preparation of financial statements according to the instructions of the boardofdirectors.

We further confirm that the proposed appropriation of available earnings complies with Swiss lawand the company’sarticles of incorporation. We recommend that the financial statements submitted to you be approved.

KPMG AG

Roger Neininger MarcZiegler Licensed Audit Expert Licensed Audit Expert Auditor in Charge

Zurich, November 2, 2010

Contents

124 CorporateGovernance

134 Glossary 136 Contacts,Financial calendar and Forward-looking statements 124 KoCorpornzernrateGechnungovernance CorporateGovernance

Additional information: www.barry-callebaut.com/corporate_governanceand www.barry-callebaut.com/organization The information thatfollows is provided in accordancewith the Directiveon Information Relating to CorporateGovernanceissued by the SIX Swiss Exchange. The principles and rules of CorporateGovernanceaspracticed by BarryCallebaut arelaid down in the Articles of Incorporation,the Regulations of the Boardand the Charters of the BoardCommittees.These arereviewedregularly by the Board of Directors and adapted as needed.

Group structureand shareholders reported as aseparate segment likearegion.Thereare four different Theorganization of the Barry Callebaut Group has astructure product groups: Cocoa Products,Food Manufacturers Products, which is divided into three different regions: Region Europe (incl. Gourmet &Specialties Products and Consumer Products.The follow- Western and Eastern Europe), Region Americas and Region Asia- ingchart provides an overview of theoperational Groupstructure Pacific. Theglobally managed Global Sourcing &Cocoa business is as of November 4, 2010:

BoardofDirectors Chairman Andreas Jacobs

AFRQCC** NCC*** AFRQCCChairman NCCChairman Urs Widmer Stefan Pfander

Internal Audit General Counsel & KarelDiepenhorst CorporateSecretary Roland Maurhofer

CEO JuergenB.Steinemann*

CFO CorporateCommunications &CSR Victor Balli* GabyTschofen

Chief Innovation Oﬃcer Head of Global Human Resources Hans P. Vriens* BarbaraBecker

Chief Operations Oﬃcer Quality Assurance Dirk Poelman* Willy Geeraerts

Gourmet Olivier Schucht

Western Europe Eastern Europe Americas Asia-Paciﬁc Global Sourcing &Cocoa Massimo Garavaglia* Filip De Reymaeker David S. Johnson* Maurizio Decio StevenRetzlaﬀ*

*Member of the ExecutiveCommittee ** AFRQCC: Audit,Finance,Risk,Quality &Compliance Committee (see page128) *** NCC: Nomination &Compensation Committee (see page128)

Information about the stocklisting,principalsubsidiariesand signif- Capital structure icant shareholders of Barry Callebaut is given on pages 62, 70, 108, Theinformation required by the SIX Corporate Governance Direc- 110 and 111 of the Consolidated Financial Statements and on pages tive regarding the capital structureisgiven in note 25 (sharecapital, 118, 119and 120 of the Financial Statements of Barry Callebaut AG. movements in the sharecapital) of the Consolidated Financial State- Thereare no cross-shareholdings equal to or higher than 5% of the ments.The company has no convertible bonds outstanding.Inthe issued sharecapital. past three years,the Group’scapital structurehas not changed. KoCorpornzernrateGechnungovernance112525

Additional information: www.barry-callebaut.com/boardand www.barry-callebaut.com/regulations

BoardofDirectors As of August 31, 2010, the BoardofDirectors consisted of seven non- TheBoardofDirectors is ultimately responsible for the policies and executive members.Each Director is elected by the shareholders management of Barry Callebaut.TheBoardestablishes the strategic, of Barry Callebaut AG at the General Meeting for aterm of office of accounting,organizational and financing policies to be followed, and one year and maybere-elected to successive terms. appoints the Executive Committee,towhich the BoardofDirectors has delegated the operational management of Barry Callebaut. Besides its non-transferable and inalienable duties,the Boardhas retained certain competencies as set forth in the Company’sInternal Regulations,which arepublicly accessible on the Barry Callebaut website.

NameNationality Function Member since

Andreas Jacobs German Chairman Ùèè] Andreas Schmid Swiss Vice Chairman ×zzh Rolando Benedick Swiss Director Ùèè× James L. Donald U.S. Director ÙèèR Markus Fiechter Swiss Director ÙèèÙ Stefan Pfander German Director Ùèèð Urs Widmer Swiss Director ÙèèÙ

AndreasJacobs Andreas Schmid Chairman of theBoardsince 2005,member of the Board Vice Chairman,memberofthe Boardsince 1997, since 2003, German national Swiss national

In December 2005, Andreas Jacobs (1963) was appointed Chairman Andreas Schmid(1957) was appointed CEO of Jacobs Holding AG of the BoardofBarry Callebaut AG.Hehad served as amember of in 1997.In1999, he became Chairman of the Boardand CEO of the Boardsince 2003. Barry Callebaut AG.InJune 2002, he handed over the CEO function Since 1992, Andreas Jacobs has been an independent entre- but continued to assume the responsibility of Chairman until Decem- preneur with astakeinseveral companies (Minibar AG,Baar; and ber 2005. Since then he has been Vice Chairman of the Board. Acentic GmbH) plus minority interests in several other companies. He started his career in 1984 at Union Bank of Switzerland. From 1991 to 1993,Andreas Jacobs worked as aconsultant and proj- Following aposition as assistant to aSwiss industrialist, he was CEO ect manager at TheBoston Consulting Group in Munich. He is also and Managing Director of Kopp Plastics (PTY) Ltd in South Africa Chairman of Jacobs Holding AG,Chairman of Infront Sports & from 1989 to 1992. He then worked for the Jacobs Group in various Media AG and member of the BoardofAdecco SA. staffand line functions until 1993. From 1993 to 1997,Andreas Schmid Andreas Jacobs studied lawatthe Universities of Freiburgim was President of the Mövenpick Consumer Goods Division and a Breisgau, Munich and Montpellier and subsequently obtained apost- member of the worldwide Group Executive BoardofManagement. graduate degree in European competition law(Dr.iur.) from the Uni- Between 2002 and 2006, he chaired the BoardofKuoni Travel Hold- versity of FreiburgimBreisgau.Afterwards,heobtained aMaster of ing AG.Hewas amember of the BoardofAdecco SA from 1999 to Business Administration from Insead in Fontainebleau. 2004 and amember of the Advisory Boardofthe Credit Suisse Group from 2001 to 2007,beforethe Advisory Boardwas dissolved. Andreas Schmid is Chairman of Oettinger DavidoffGroup and Flughafen Zürich AG.HeisChairman of the Supervisory Boardof Symrise AG,Chairman of the BoardofDirectors of gategroup HoldingAG and member of the BoardofDirectors of Karl SteinerAG. Andreas Schmid holds aMaster’sdegree in lawand studied economics at the University of Zurich. 126 CoKorpornzernrateGechnungovernance

Rolando Benedick James L. Donald Directorsince 2001, Swiss national Directorsince 2008, U.S. national

Rolando Benedick (1946) was appointed CEO of the Manor Group James “Jim” L. Donald (1954) has been President and CEO of in 1989, which includes Manor department stores,FLY Switzerland Haggen, Inc., a33-storePacificNorthwest grocery company based andAthleticumSportmarkets: threechains belonging to Maus Frères in Bellingham since September 2009. He also serves as aBoard Holding,aswell as China-based Herma Ltd. In 2000,hewas appoint- Member of Rite Aid Corporation, one of the leading drugstorechains ed Chairman of the Board. From 2006 to December 2007,heserved in the U.S. with morethan 4,900stores in 31 states. as Executive Chairman.InJanuary 2008, he passedonhis responsi- James Donald was President &Chief Executive Officer of bilities as Executive Chairman to his successor and continued to serve Starbucks Corporation from April 2005 to January 2008. From as Chairman of the Boarduntil the end of 2008. October 2002 to March 2005, James Donald served as President Rolando Benedick joined the Manor Group in 1970 after com- of Starbucks,North America. Under his leadership,Starbucks ex- pleting his secondary studies and various trainee programs at periencedstrong growth and performance.FromOctober 1996 to renowned retail groups in Germany,France and Switzerland. In 1970, October 2002, James Donald served as Chairman, President &Chief he was given responsibility for the planning and construction of the Executive Officer of Pathmark Stores,Inc., aUSD 4.6 billion regional newshoppingcenterinMonthey.Hethen became director of the Sion supermarket chain located in New York, New Jersey and Pennsylva- store. He was Chief Executive of the Innovazione chain in Ticino from nia. Prior to that time,heheld avariety of senior management posi- 1973 to 1989. tions with Albertson’s,Inc., Safeway, Inc.and Wal-Mart Stores,Inc. Rolando Benedick is Chairman of the Manor Sud SA and Execu- James L. Donald graduated with aBachelor’sdegree in Business tive Chairman of ValoraHolding AG.Heisamember of the Super- Administration from Century University,Albuquerque,New Mexico. visory Boardofthe Galfa Group (Galleries Lafayette,Monoprix, Laser). In addition, he serves as anon-executive Boardmember of “Messe Schweiz” MCH Group AG,the Gottlieb Duttweiler Insti- Markus Fiechter tute (GDI) and of the Chamber of Commerce “beider Basel”.Heis Directorsince 2004, Swiss national Chairman of the “LeopardClub” Locarno and of the “Freiwilliger Museumsverein Basel” (FMB). MarkusFiechter (1956) has been CEO of Jacobs Holding AG since September 2004. He started his career as Assistant Professor in Chemistry at the University of Applied Sciences in Horw,Lucerne.From1984 until 1991, he held various managerial positions at Mettler Toledo AG. From 1991 to 1994, he worked for TheBoston Consulting Group as aManager at the Zurich office.From1994 to 2004, he was CEO of the Minibar Group.Markus Fiechter is Vice President of the Board of Directors of ValoraHolding AG and amember of the Boardof Directors of Minibar AG. Markus Fiechter holds aMaster’sdegree in Chemical Engineer- ing from the Federal Institute of Technology in Zurich (ETH) and an MBAfromthe University of St. Gallen. CorporateGovernance127

Stefan Pfander Urs Widmer Directorsince 2005,German national Directorsince 2004, Swiss national

StefanPfander (1943) startedhis career in 1971 as Product Manager Urs Widmer (1941) is an attorney at lawwith apractice in Küsnacht, with General Foods GmbH in Elmshorn, Germany,and later worked Zurich. for Mars Inc.(as Marketing Manager for Effem GmbH, Verden, Urs Widmer’sprofessional career began as an assistant to the Germany,asMarketing Director for Kal Kan Foods Inc., Los Ange- Executive BoardofAlusuisse.In1974, he joined ATAGErnst & les,U.S.). In 1981 he joined the Wm.Wrigley Jr.Company as Manag- Young,whereheheld various positions.From1974to1980, he worked ing Director initially responsible for Germany later Europe,Middle in the legal department and was promoted to Department Head East,Africa and India building leading market positions for Wrigley in 1980. In 1984, he was appointed amember of the Executive Board in over 40 countries.Until January 2006, he was Chairman Europe of ATAGdebis Informatik AG.In1986, he was appointed General and Vice President of the Wm.Wrigley Jr.Company in Chicago,U.S. ManagerofATAGWirtschaftsinformation Holding AG and member Stefan Pfander is aSupervisory BoardMember of Maxingvest of theGroup ExecutiveBoard of ATAGErnst &Young AG.Hewas AG (Holding company,Beiersdorf AG,Tchibo GmbH), Deputy electedamember of the Board of Directors of ATAGErnst &Young Chairman of the Supervisory Boards of GfK SE (market research AG in 1988 and the Delegate of the BoardofDirectors in 1990. He institute) and Chairman of the advisory boardofTreofan GmbH. He joined the Executive BoardofErnst &Young Europe in Brussels in also serves as amember on the BoardofDirectors of Sweet Global 1991 and the Global Executive BoardofErnst &Young Internation- Network e.V. (international confectionery trade association). al, New York and London, in 1994. In 1995, he assumed the position Stefan Pfander holds adegree in Economics from the University of Delegate and Chairman of the BoardofDirectors of Ernst & of Hamburg. Young Holding AG.From1998 to 2002, Urs Widmer was Chairman of the BoardofDirectors of Ernst &Young AG. Urs Widmer has served as Chairman of the BoardofDirectors of Vontobel Holding AG and Bank Vontobel AG since 2005. He is also amember of the BoardofDirectors of Helvetia Holding AG. He is atrustee of various foundations such as Technopark Founda- tion and Zoo Zurich. Urs Widmer earned adoctorate from the Faculty of Lawat Zurich University. 128 CorporateGovernance

Functioning of the Board TheAudit, Finance,Risk, Quality &Compliance Committee TheBoardofDirectors constitutes itself at its first meeting sub- assists the BoardofDirectors in fulfilling its oversight responsibility sequent to the Ordinary General Meeting.The Boardelects its Chair- of the external auditors.The specificsteps involved in carrying out man and its Vice Chairman. It meets as often as business requires,but this responsibility include recommending the external auditors,re- at least fourtimes per fiscal year. Themeetings usually takeplace in viewing their qualifications and independence,approving the audit Zurich. If possible,the Boardmeets once per year at one of the fees,overseeing the external audit coverage,specifying how the Barry Callebaut production sites and combines this meeting with a external auditors report to the Boardand/or the Audit Committee, visit of the local operation. During this last fiscal year,the Boardof assessingadditional non-audit services,reviewing accounting policies Directors met six times for regular Boardmeetings.Four meetings andpolicydecisions,and reviewing the annual financial statements lasted approximately six hours,two meetings lasted three hours,one and related notes. of which took place in the form of aconference call. In the year un- Thescope of internal auditing encompasses the examination and der review the Boardheld one of the regular meetings in the context evaluation of the adequacyand effectiveness of the organization’s of atwo-dayvisit to the production sites in Pennsauken, New Jersey, system of internal control and the quality of performance in carrying and Eddystone,Pennsylvania, both in the U.S. out assigned responsibilities.The internal audit function reports to TheChairman invites the members to the meetings in writing, the Chairman of the AFRQCC.Significant findings of internal indicating the agenda and the motion for resolution thereto.The audits arepresented and reviewed in the meetings of the AFRQCC invitations aresent out at least ten business days prior to the meet- and of the BoardofDirectors.Inthe last fiscal year,nointernal ing.Each member of the Boardcan request the Chairman to call a audit task was carried out by athirdparty. meeting without undue delay. In addition to the materials for meet- Theexternal auditors attended one meeting of the Audit, Finance, ings,the Boardmembers receive monthly financial reports. Risk, Quality &Compliance Committee in fiscal year 2009/10. At the request of one member of the Board, members of the TheAFRQCC meets as often as business requires,but at least Executive Committee shall be invited to attendmeetings.The Board three times per fiscal year.The meetings usually takeplace in Zurich. of Directors can determine by majority vote that other thirdparties, In the last fiscal year,the committee met five times.The meetings for example external consultants,may attend part or all of the meet- lasted for approximately two hours.One of the meetings took place ing.Inthe past fiscal year,the CEO,the CFO and, depending on the in the context of the Board’svisit to the production sites in Pennsauken, agenda items,other members of the Executive Committee or man- New Jersey,and Eddystone,Pennsylvania, both in the U.S. One agement werepresent at all Boardand Committee meetings. meeting took place in the form of aconference call. Resolutions areadopted by asimple majority of the Boardmem- bers present or represented. Members mayonly be represented by Nomination &Compensation Committee afellow Boardmember.Inthe event of atie vote,the proposal is Stefan Pfander (Chairman), Rolando Benedick,James Donald deemed to be not resolved. Resolutions made at the Boardmeetings aredocumented through written minutes of the meeting. Theresponsibilities of the Nomination &Compensation Committee Directors mayrequest any information necessary to fulfill their (NCC) aretomakerecommendations to the Boardwith respect duties.Outside of meetings,any Director mayrequest information to the selection, nomination, compensation, evaluation, and, when from members of the Executive Committee concerning the Group’s necessary,the replacement of keyexecutives.The NCC establishes business development. Requests for information must be addressed jointlywiththe CEOageneral succession planning anddevelopment to the Chairman of the Board. policy.The committee also reviews remuneration paid to members of the BoardofDirectors,ensures atransparent Boardand Executive TheBoardofDirectors has formed the following committees: Committee nomination process,and is responsible for monitoring Audit,Finance, Risk,Quality &ComplianceCommittee and managing potential conflicts of interest involving executive Urs Widmer (Chairman), Andreas Schmid and Markus Fiechter management and Boardmembers. TheNCC meets as often as business requires,but at least three Theprimary task of the Audit, Finance,Risk, Quality &Compliance times per fiscal year.The meetings usually takeplace in Zurich. In Committee (AFRQCC) is to assist the Boardincarrying out its re- the last fiscal year,the committee met four times.The meetings lasted sponsibilities and makerecommendations for the Board’spolicyde- for approximately two hours.One of the meetings took place in the cisions as they relate to the company’saccounting policies, financial context of the Board’svisit to the production sites in Pennsauken, reporting,internal control system, legal and regulatory compliance New Jersey,and Eddystone,Pennsylvania, both in the U.S. functions and quality management. In addition, to ensure financial risk management, the AFRQCC reviews the basic risk management principles and guidelines,reviews the hedging and financing strategies,reviews the bases upon which the BoardofDirectors determines risk tolerance levels and trading limits,and reviews the appropriateness of the risk management instruments and techniques employed. CorporateGovernance129

Additional information: www.barry-callebaut.com/executivecommittee

ExecutiveCommittee As of November 2009,the former Senior Management Team has been extended by twoadditionalmembers andrenamed to Execu- tive Committee which is headed by the Chief Executive Officer.For external activities of the members of the Executive Committee see their curriculum vitae.

Name Function Nationality Member since

JuergenB.Steinemann Chief ExecutiveOfficer German Ùèèz Victor Balli Chief Financial Officer Swiss Ùèèh Massimo Garavaglia Western Europe Italian ÙèèÙ David S. Johnson Americas U.S. Ùèèz StevenRetzlaff Global Sourcing &Cocoa U.S./Swiss ÙèèR Dirk Poelman Chief Operations Officer Belgian Ùèèz Hans P. Vriens Chief Innovation Officer Dutch Ùèèz

JuergenB.Steinemann Victor Balli Chief ExecutiveOﬃcer,German national Chief Financial Oﬃcer,Swiss national

Juergen B. Steinemann (1958) was appointed Chief Executive Officer Victor Balli (1957) was appointed Chief Financial Officer and mem- of Barry Callebaut AG in August 2009. ber of the Executive Committee of Barry Callebaut AG in February Beforejoining Barry Callebaut, Juergen Steinemann served as a 2007. member of the Executive BoardofNutreco and as Chief Operating Beforejoining Barry Callebaut, Victor Balli was with Minibar Officer since October 2001.Nutreco,quoted on the Official Market since 1996. He began his career at Minibar as CFO and additionally of Euronext Amsterdam, is an international animal nutrition and held the position of CEO EMEA as of 2005. During this time he also fish feed company, headquartered in the Netherlands. served as executive director and boardmember of several group From 1999 to 2001,Juergen Steinemann served as CEO of Uni- companies of Niantic,afamily investment holding.From1991 to 1995, lever’sformer subsidiaryLoders Croklaan,which produced and mar- he worked as aPrincipal with Adinvest AG,acorporate finance keted specialty oils and fats for the chocolate,bakery and functional advisory company with offices in Zurich, San Francisco,New York, foodsindustry. Between 1990 and 1998, Juergen Steinemann was with and London. From 1989 to 1991, Victor Balli served as Director the former Eridania Beghin-Say Group,whereheheld various senior of Corporate Finance with MarcRich &Co. Holding in Zug.He positionsinbusiness-to-businessmarketing andsales,ultimately in startedhis professional career in 1985 working as aFinancial Analyst the “Corporate Plan et Stratégie” unit at the head office in Paris. &Business Development Manager with EniChem International SA Juergen Steinemann graduated from his economics/business in Zurich and Milan. studies at the European Business School in Wiesbaden, Germany, Victor Balli holds aMaster’sdegree in Economics from the Uni- London, and Paris in 1985. versity of St. Gallen and aMaster’sdegree as aChemical Engineer from the Swiss Federal Institute of Technology in Zurich. 130 CorporateGovernance

Massimo Garavaglia Dirk Poelman PresidentWestern Europe,Italian national Chief Operations Oﬃcer,Belgian national

Massimo Garavaglia (1966) was appointed President Western Europe Dirk Poelman (1961) was appointed Chief Operations Officer in Sep- in June 2009, and is amember of the Executive Committee of Barry tember 2006 and member of the Executive Committee in November Callebaut AG. 2009. Since 1984, he has been working with Callebaut – which merged From 1990 to 1992, Massimo Garavaglia was sales manager for with Cacao Barry in 1996 – in various positions and countries: first an Italian food products importer.Joining Callebaut Italia S.p.A. in as Engineering Manager,then as Production Manager,Operations 1992, he served as country manager for Italy.After the merger be- Director and Chief Manufacturing Officer. tween Callebaut and Cacao Barry in 1996, he was Barry Callebaut’s In 1997,Dirk Poelman became Executive Vice President Opera- country manager for Italyuntil 2003. From 2003 until September tions responsible for the operations of the total Group and amem- 2004, he was Manager MediterraneanCountries/Middle East/East- ber of the Senior Management Team. In 2004, he was appointed ern Europe.FromSeptember 2004 until 2006, he was President Food Vice President Operations and Research &Development. Manufacturers.FromSeptember 2006 to April 2009, he served as Dirk Poelman holds an industrial engineering degree in electro- President Americas. mechanics from the Catholic Industrial High School in Aalst, Belgium. Massimo Garavaglia holds aMaster’sdegree in Economics and Business Administration from Bocconi University,Milan. StevenRetzlaﬀ PresidentGlobal Sourcing &Cocoa, U.S. and Swiss national David S. Johnson CEO and PresidentAmericas,U.S.national StevenRetzlaff(1963) was appointed President Global Sourcing & Cocoa and member of the Executive Committee of Barry Callebaut David S. Johnson (1956) was appointed CEO and President Ameri- AG in January 2008. cas in May2009, and is amember of the Executive Committee of Steven Retzlaffstarted his career in 1987 at KPMG Peat Barry Callebaut AG. Marwick, San Francisco,asanauditor.From1990 to 1993, he worked Beforejoining Barry Callebaut, David Johnson served as CEO as aSupervising Audit Senior and Audit Manager for KPMG Fides, and member of the boardfor Michael Foods,Inc., afood processor Zurich. He then joined JMP Newcor AG,Zug,asDirector of Euro- and distributor headquartered in Minnetonka, Minn., U.S. pean Finance and Operations,whereheworked for three years. From 1986 to 2006, David Johnson was with Kraft Foods Global, Steven Retzlaffjoined Barry Callebaut as CFO of Barry Inc., the second largest food and beverage company in the world. Callebaut Sourcing AG in 1996. From 1999 to 2001,heserved as CFO At Kraft Foods,heheld several senior positionsindifferent divisions, Swiss Operations (BC Sourcing AG and BC Switzerland AG). From including marketing,strategy,operations,procurement and general 2001 to 2003, he was CFO of the business unit Cocoa, Sourcing & management. His last position was President Kraft North America Risk Management and from 2003 to 2004 he worked as the Cocoa and Corporate Officer Kraft Foods Global, Inc.Hestarted his career Division Head. In 2004, he was appointed President Sourcing & in 1980 at RJR Nabisco. Cocoa and member of the Senior Management Team in Zurich. From David Johnson is amember of the boardofdirectors of Arthur September2006until December 2007,hefocused on developing the J. Gallagher &Co, an international insurance brokerage and risk Group’sglobal compound business. management company with headquarters in Itasca, Ill., U.S. Steven RetzlaffisaCertified Public Accountant (CPA) and holds David Johnson holds both aBachelor’sand Master’sdegree in aBachelor of Arts in Economics from Whitman College.Healso business from the University of Wisconsin. studied at the Institute of European Studies in Madrid and at Insead in Fontainebleau. CorporateGovernance131

Hans P. Vriens Chief Innovation Oﬃcer,Dutch national

Hans P. Vriens (1965) was appointed to the position of Chief Inno- vation Officer and member of the Management Team in December 2005. Since November 2009, Hans Vriens has been amember of the Executive Committee. From 2001 to 2005, Hans Vriens was active as the owner of VF&CO.B.V.inAmsterdam, Netherlands,aholding company which invests in and develops new consumer brands for itself and for third- party customers.Activities include consulting for large multinational companies in functional foods,apartnership selling an energy drink in anew packaging concept, as well as the production and distribution of afunctional dairy product. Prior to this,Hans Vriens served as Executive BoardMember responsible for Sales,Marketing and Interactive at EM-TV&Mer- chandising AG in Munich, Germany,and was active in various non- executive boardpositions in related media companies. From 1994 to 1999, he held various functions with RedBull GmbH, among which Managing Director for RedBull North Amer- ica in Los Angeles,U.S.From1989 to 1994, Hans Vriens worked as Brand Manager for Procter &Gamble in Austria and in Germany. He started his career in brand management and marketing with Mars/ Effems in Spain and in the Netherlands. Hans Vriens holds aBBA in Marketing from the Nijenrode Business University in Breukelen,Netherlands,anMBA in Marketing/ International Business from the University of Oregon, U.S.,and received Post Graduate Education at StanfordUniversity,U.S. 132 CorporateGovernance

Compensation,shareholdings and loans Shareholders’ participation TheBoardofDirectors has the final responsibility for the remunera- Each shareofBarry Callebaut AG carries one vote at the General tion of the Directors and the Executive Committee.The Nomination Meeting.Voting rights maybeexercised only after ashareholder has &Compensation Committee assiststhe Boardinfulfilling its respon- been registered in the Barry Callebaut AG shareregister as ashare- sibility by evaluating the remuneration strategy and proposing indi- holder with voting rights. vidual compensation packages for the Executive Committee mem- No shareholder holding morethan 5% of the sharecapital may bers and other keymembers of the management. be registered as ashareholder with voting rights with respect to the TheNomination &Compensation Committee ensures that shares such shareholder holds in excess thereof.For purposes of the Barry Callebaut offers an overall remuneration package which is 5% rule,groups of companies and groups of shareholders acting in aligned with corporate and individual performance and market prac- concert or otherwise related areconsidered to be one shareholder. tice,inorder to attract and retain Directors and Executiveswith the Shareholders mayregister their shares in the name of anominee necessary skills.The current remuneration scheme is not linked to approved by Barry Callebaut AG and mayexercise their voting rights any external benchmarks. Forthe Boarditisbased on fixed directors’ by giving instructions to the nominee to vote on their behalf. feesand the granting of Barry Callebaut AG shares. However,anominee holding morethan 3% of the sharecapital Thetop management remuneration framework of Barry Callebaut willberegistered as nominee for shareholders with voting rights only consists of four elements: fixed base salary,short-term cash-based in- if it disclosesthe identity of each beneficialownerofshares claiming centives related to EBIT/EVA/Working Capital targets in the fiscal 0.5% or moreofthe sharecapital. No nominee holding morethan year under review (target incentive 50% to 100% of base salary), 8% of the sharecapital mayberegistered as ashareholder with long-term incentives in the form of shareallocations (valued at 70% respect to the excess shares.The BoardofDirectors may, however, to 125% of base salary) and benefits (valued at 10% to 20% of base on acase-by-case basis,permit some or all of the excess shares to be salary).Theshort-term bonus criteria for the members of the Execu- registeredwith votingrights. In fiscal year 2009/10,nosuch exception tive Committee arefor the CEO and CFO: Group EVA, Group EBIT, was granted by the BoardofDirectors. Working Capital and Earnings per Share(each weighted with 25%), Aresolution passed at the General Meeting with amajority of at and for the other members of the Executive Committee: Regional least two-thirds of the shares represented at such meeting is required EBIT or Group EBIT respectively for the corporate functions to lift the restrictions on the transferability of registered shares. (weighted with 50%), as well as Working Capital (weighted with Shareholders mayberepresented at the General Meeting by 25%) and Strategic Targets relating to the Region/Corporate Func- proxy.Proxy holders must themselves be shareholders,orbeappoint- tion (weighted with 25%). Thegranting of shares is based on a ed by Barry Callebaut, independent representatives nominated by deferred shareplan scheme.Participants aregranted anumber of Barry Callebaut AG,oradepository institution. shares,ofwhich 80% aregranted without being linked to perfor- TheArticles of Incorporation follow the majority rules and the mancecriteria. Theshares vest as follows in three tranches: 30% provisions on convocation prescribed by the Swiss lawconcerning after one year,30% after two years and 40% after three years, general meetings of shareholders. of which half of the thirdtranche (20%) aresubject to achieving the Shareholders with voting rights holding shares representing in performance criteria defined by the Nomination &Compensation total at least 0.25% of the sharecapital or the voting rights have the Committee.The performance criteria for the grants made in the right to request in writing – giving at least 60 days’ notice – that fiscal year under review arebased on the earnings per shareofBarry aspecificproposal be discussed and voted upon at the next General Callebaut shares. Meeting. On ayearly basis,usually at the November Boardmeeting,the Shareholders registered in the shareregister with voting rights Board, upon recommendation of the NCC,decides on the perfor- at the date specified in the invitation will receive an invitation to the mance-related cash bonuses relating to the previous fiscal year and Annual General Meeting. the compensation system for the coming calendar year. Fordetails regarding the compensation, shareholdings and loans Changeofcontrol and defense measures of the members of the BoardofDirectors and the Executive Com- An investor who acquires 331⁄3%ofall voting rights has to submit mittee during the last fiscal year see note 6inthe Financial State- atake-over offer for all shares outstanding,according to the Swiss ments of Barry Callebaut AG. Stock Exchange Law. Barry Callebaut has not elected to change or Barry Callebaut and Jacobs Holding AG,Zurich, have agreed to opt out of this rule. execute administrative service agreements,under which Jacobs Hold- Theemployment contracts of two members of the Executive ing AG offers to Barry Callebaut certain management and consul- Committee have a fixed minimum duration of three years,ending tancyservices.Inthe fiscal year 2009/10, the total compensation paid 2012 and 2013 respectively,while the employment contracts with the by Barry Callebaut under these agreements amounted to CHF 1.7 remaining members of the Executive Committee areopen-ended and million. Thecontract is yearly renewable. contain notice periods of 6to12months,during which they areentitled to full compensation. KoCorpornzernrateGechnungovernance113333

Additional information: www.barry-callebaut.com/documentation

External auditors At the Annual General Meeting of Barry Callebaut AG on Decem- ber 8, 2005, the shareholders voted to appoint KPMG AG,Zurich, as statutory auditors.The statutory auditors areappointed annually by the General Meeting for aone-year term of office.The current auditor in charge has exercised this function since fiscal year 2005/06. Forthe fiscal year 2009/10, the remuneration for the audit of the accounting records and the financial statements of Barry Callebaut AG,and the audit of the consolidated financial statements,amounted to CHF 2.6 million.This remuneration is evaluated by the AFRQCC in view of the scope and the complexity of the Group.The performance of the auditors is monitored by the AFRQCC,towhich they present adetailed report on the result of the audit of the Group. Prior to the presentation to the AFRQCC,the lead auditor reviews the audit findings with the Chairman of the AFRQCC without the presence of any members of the management. KPMG received atotal amount of CHF 0.2 million for additional services,i.e.for transaction and other advisory (incl. due diligence). Adequate measures for the avoidance of potential conflicts of interests between the different services provided by KPMG wereobserved.

Information policy Barry Callebaut is committed to continuous and open communication with its shareholders,potential investors and other stakeholders based on the principles of transparencyand equal treatment, i.e. simultaneous provision of price-sensitive information and no selec- tive disclosure. TheGroup provides detailed information on its business activi- tiesand financialperformance in its annual andhalf-year reports and press releases,atthe conferences for media and financial analysts as well as at the Annual General Meeting.Further,representatives of the Group regularly meet (potential) investors in personal meetings as well as present Barry Callebaut at industry events and investor conferences. Presentations arealso made available on the Group’swebsite, which is updated continuously.The financial calendar for the fiscal year 2010/11 and contacts aregiven on page 136. 134 KoGlossarnzernry echnung Glossary

A differentphysical and chemical cocoasolids aretreated with processes,necessaryfor the an alkaline solution to neutralize ACTICOA™ final taste and mouthfeel of the acidity.This process darkens Aprocess developed by Barry chocolate. the cocoaand develops amilder Callebaut which conservestoa chocolate flavor. very high degree the polyphenols Controlled Fermentation naturally presentinthe cocoa BarryCallebaut developed away bean,thatmay otherwize E to “control” and optimizecocoa destroyed during the chocolate EBIT fermentation.With the so-called production process. Operating profit(Earnings Before Controlled Fermentation method, Interest and Taxes). B defined micro-organisms provide aconsistent, predictable and EBITDA Biolands 100% “superior grade” cocoabean Operating profitbefore Biolands in Tanzania is the largest quality.This in turn leads to im- depreciation and amortization African exporter of certified organ- proved flavor characteristics,zero- (Earnings BeforeInterest,Taxes, ic cocoa. BarryCallebaut acquired default cocoabeans,enhanced Depreciation and Amortization). a49% stakeinBiolands in 2008. levels of functional components Biolands is working directly with (e.g. flavanols), and improved pro- F smallholders,inorder to guaran- cessability. tee them fair prices and to help Fairtrade them improvethe quality and Criollo The Fairtrade Labelling Organiza- value of their production.They Criollo is known as the prince tions International (FLO)arranges have another framer projectin among cocoatrees.This variety directcontracts with thousands SierraLeone. is fragile and produces small of small manufacturers,traders, harvests.Itgrows primarily in importers and exporters of food- Butter South and CentralAmerica, stuffs, and ensures thattheyare Refers to cocoabutter,the fat and accounts foronly 10% of the paid ahigher price fortheir prod- of the cocoabean. world crop.The cocoahas apale ucts.BarryCallebaut is certified color and aunique aroma. It is by the FLO-CERTtoproduce a C used in the production of high- rangeofFairtrade cocoaand choc- Cocoabutter ratio quality chocolate and forblending. olate products.These products Price of 1metric tonne of cocoa aremanufactured with rawmate- butter relativetothe price of D rials purchased from Fairtrade 1metric tonne of cocoabeans. Dark chocolate manufacturers. Dark chocolate is chocolate that Cocoapowder ratio contains morethan 43% cocoa Fermentation Price of 1metric tonne of cocoa solids coming from cocoaliquor, Fermentation is an essential and powder relativetothe price powder and/or butter.This is the delicate stageincocoa bean of 1metric tonne of cocoabeans. chocolate most often used for processing.Beans and pulp are premium chocolate confections. heaped in piles,covered with Combined cocoaratio Besides cocoaingredients it banana leavesorput in boxesand Combined sales prices forcocoa contains sugar,vanilla, and often lefttofermentfor severaldays. butter and cocoapowder relative lecithin. During fermentation the beans to the cocoabean price. lose their natural bitterness and Drying astringency. Compound After fermentation,the beans Consists of ablend of sugar,vege- still contain 60% moisture, which Flavanol table oil, cocoaliquor,powder must be reduced to 8% or less Aspecifictype of polyphenol, and/or butter and other products. in order to ensureoptimum con- known forits antioxidantactivity. Vegetable oil is substituted for servation during storageand cocoabutter to reduce the prod- transportation.Drying can either Forastero uctcost and to develop special be done by spreading the beans Forasteroare the most commonly melting profiles. out in the sun or by placing them grownand used cocoabeans. on aheated surface or by hot Compared to Criollo,Forasterois Conche air. Thorough drying avoids the astronger tree thatiseasier Alarge tank with apowerful formation of molds. to cultivateand produces larger stirring device inside thatkneads yields.Theymakeupabout 90% the chocolate mixtureslowly Dutching of the world’sproduction and are over along time.Contactwith air, Atreatmentused during the grownmainly in West Africa. heatand friction results in several making of cocoapowder in which The cocoahas apungentaroma. KoGlossarnzernry1echnung 13535

I effectiveness.Polyphenols are cocoabutter and cocoapowder. antioxidants.Byinhibiting oxida- Also called cocoaproducts. IndustryProtocol tion,theyprotectbody cells from Also known as Harkin-Engel damagecaused by the oxidative Stevia Protocol. The Protocol wassigned effects of free radicals,which con- Stevia is anatural sugar substi- in 2001 by cocoaand chocolate tribute to the aging process and to tute thatisobtained from the manufactuers,industryand trade certain heartand brain diseases. Stevia plant (Stevia Rebaudiana associations,governmentorgani- Bertoni) thatdoes not have alaxa- zations and NGOsinresponse to tiveeffect. When refined, Stevia reports of children working under Powder extracthas between 100 and 400 abusivelabor conditions on cocoa Refers to cocoapowder and is times the sweetness of ordinary farms in West Africa. The signers the productthatremains when a sugar while having zero calories. condemned abusivelabor practic- big partofthe cacao butter is es,inparticular the worst forms of removedfromthe cocoaliquor. Sugar child labor as defined by the Inter- Sugar is the largest commodity national Labor Organization (ILO), Q on the world market,followedby and committed to work together to Quality Partner program coffee and cocoa. It is used as address the issue.BarryCallebaut BarryCallebaut’s program with one of the main ingredients for is asigner of the Protocol. cocoacooperatives in Côte d’Ivoire. chocolate (up to 55%). The goal is to provide farmers with access to better training in L T agricultural techniques and Liquor howtomanagetheir business Trinitario Also known as cocoaliquor or and personal finances,aswell as Trinitario beans areacross of cocoamass.The thick liquid paste access to healthcarefor them- Criollo and Forasterococoa. It has thatisproduced in the grinding selves and their families,and sen- characteristics of both: the trees process. sitization about child labor issues areeasytocultivateand the cocoa beans have astrong,but relatively M and the importance of schooling fortheir children.The training refined aroma. Milk chocolate enables farmers to improvethe Chocolate with at least 25% cocoa quality of their farms and busi- U solids coming from cocoaliquor, ness practices and to deliver more UTZ powder and/or butter to which and better-quality cocoabeans UTZCERTIFIED Good Inside is powdered milk,sugar,vanilla, and forwhich theywill earn more. dedicated to creating an open and lecithin has been added. Good transparentmarketplace for milk chocolate contains 30% R agricultural products.Founded in chocolate liquor.Premium milk Rainforest Alliance 2002, UTZCERTIFIED has been a chocolate contains even more. The Rainforest Alliance worksto pioneer in the field of certification conserve biodiversity and ensure andtraceability of coffee supply Molding sustainable livelihoods by chains.Based on this success,itis The process of creating figures transforming land-use practices, developing sustainability models and shapes out of chocolate. business practices and consumer forother sectors,such as cocoa, Chocolate is melted to 45°C, then tea and palm oil. behavior. cooled belowits crystallization point, then heated again to 30°C. V Following this tempering process, Roasting Viscosity the chocolate is poured onto Roasting is aheating process The measureofthe flow charac- the inner surface of the molds, aimed at developing the chocolate teristics of amelted chocolate. also heated to 30° C. After cooling, aroma. Roasting certain foods not the final productisunmolded only makes them moredigestible, Vegetable fats to reveal aglossychocolate figure. but also morearomatic.Cocoa beans areroasted to agreater or Sometimes used as aless expen- lesser extentdepending on what sivealternativetococoa butter in N theyare being used for. Cocoa chocolate products. Nib powder needs moreintense roast- The center of the cocoabean. ing,whereas chocolate requires W finer roasting. White chocolate P White chocolate is made from Polyphenols S cocoabutter (atleast 20%), pow- Cocoabeans contain polyphenols Semi-finished products dered milk,sugar,and vanilla. It of unusually high quality and Examples include cocoaliquor, contains no cocoaliquor or powder. 136 KoContnzacernrts,Fechnunginancial calendar and Forward-looking statements

Contacts

BarryCallebaut head oﬃce Investor Relations Media BarryCallebaut AG Evelyn Nassar Raphael Wermuth West-Park Head of Investor Relations External Communications Pﬁngstweidstrasse 60 Phone +4143204 04 23 Manager 8005 Zurich,Switzerland Fax+41 43 2040419 Phone +4143204 04 58 Phone +4143204 04 04 investorrelations@ Fax+41 43 2040400 Fax+41 43 2040400 barry-callebaut.com [email protected] www.barry-callebaut.com Address changes Mailing address SIX SAGAktienregister AG BarryCallebaut AG P.O. Box P.O. Box 4609 Olten,Switzerland 8021 Zurich,Switzerland Phone +4162311 61 11 Fax+41 62 311 61 12

Financial calendar

Date

Annual General Meeting Ùèèz/×è,Zurich December h, Ùè×è ]-month keysales ﬁgures Ùè×è/×× January ×Ù, Ùè×× Half-year results Ùè×è/××,Zurich April ×, Ùè×× z-month keysales ﬁgures Ùè×è/×× June ]è, Ùè×× Year-end results Ùè×è/××,Zurich November ×è, Ùè×× Annual General Meeting Ùè×è/××,Zurich December R, Ùè××

Forward-looking statements

Certain statements in this Annual Report 2009/10 regarding the business of Barry Callebaut areofa forward-looking natureand arethereforebased on management’scurrent assumptions about future developments.Such forward-looking statements areintended to be identified by words such as “believe,” “estimate,” “intend,” “may,” “will,” “expect,” and “project” and similar expressions as they relate to the company.Forward-looking statements involve certain risks and uncertainties because they relate to future events.Actual results mayvary materially from those targeted, expected or projected due to several factors.The factors that mayaffect Barry Callebaut’sfuture financial results arediscussed in this Annual Report. Such factors are, among others,general economic conditions,foreign exchange fluctuations, competitive product and pricing pressures as well as changes in tax regimes and regulatory developments. Thereader is cautioned to not unduly rely on these forward-looking statements that areaccurate only as of November 4, 2010. Barry Callebaut does not undertaketopublish any update or revision of any forward-looking statements. Imprint Graphics: Luar,Zurich (CH) Photos: Marcel VanCoile,Zemst (B) Prepress/Press: Visiolink AG,Zurich (CH) è × / z èè

Ù Annual Report