THE SUPERVISORY BOARD’S REPORT AT EAC’s ANNUAL GENERAL MEETING 2008, 3 APRIL

2007 was a good year for EAC. Due to our good earnings progress, 2007 was the best year in EAC’s recent history when we disregard extraordinary revenue from divestments - particularly the divestment of Nutrition.

Growth rates of 29% in Foods, 19% in Industrial Ingredients, 7% in Moving and Relocation Services and 23% in the entire Group speak clearly of progress at a higher level than we expected. Also, EAC’s growth stands out relative to exchange rate developments. In round figures, the US dollar depreciation against the Danish krone equalled a drop in revenue of about DKK 277m and DKK 42m in Group earnings.

During the past five years, our three businesses have grown an average of 19% annually, and for the past two years, we have seen even higher annual growth rates of 30% measured in fixed exchange rates. This growth underlines the strength and potential of our businesses, and it is extremely satisfying to see an increase in these growth rates, following our decision last year to focus on the businesses that make up EAC today.

We are pleased to see that the expansion of our operations – the expansion that makes up the core of our strategy – has affected all three businesses.

Through an acquisition, Industrial Ingredients entered the new and exiting market of Bangladesh, while acquisitions in Malaysia and the Philippines strengthened the existing operations in those countries. In India, Changidarh was added to our network of offices and warehouses.

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Through acquisitions and new establishments, Moving and Relocation Services (Santa Fe) added five new countries to the areas in which the business itself provides international moving and relocation services to companies’ relocated employees: India, Vietnam, Macau, South Korea and Taiwan. At the same time, Santa Fe expanded its operations in records management to Malaysia and Singapore.

Naturally, supplementing EAC’s business in terms of operations and geography takes time. However, we have embarked on a process that forms an important basis for continued growth, and we intend to continue that process in a controlled manner. Although EAC operates today in 15 countries in Asia, there are white spots on the map which we need to cover, just as a strengthening of operations in our existing markets is also necessary.

This could happen through acquisitions or organic growth. I will return to this matter later.

We must not forget Foods. Although Foods did not enter new markets, we are investing heavily in its value chain. I will return to this matter as well.

Some EAC highlights: - Revenue increased 23% to DKK 4.4bn.

- Operating profit before financials increased 93% to DKK 603 million. Foods was the main driver of this development, but also Industrial Ingredients and Santa Fe contributed. These earnings resulted in an operating margin – earnings per krone of revenue - of 13.7% for EAC.

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- Net financials amounted to a charge of DKK 37m. This item has been in the black for some years, but after recent years' massive dividend payments and share buybacks, EAC no longer has very much interest-bearing cash. In return, we saw increasing interest rate expenses last year. So, this expenditure actually reflects our movement towards a slightly more efficient capital structure.

- Associates contributed a total of DKK 42m. The main contributor was EAC’s share of our Thai joint-ventures, ICI paints, as well as some minor profits from divestments.

- Tax expenses amounted to DKK 139m at a tax rate of 22%. This totals a net profit of DKK 473 million. Our minority shareholders in Moving & Relocation in China and the pig farms in Venezuela, get a slice of the cake, which leaves DKK 430m for EAC shareholders.

We have not seen such strong earnings for many years. Only a small part of the net profit was generated by divestment of assets and interests in non-strategic businesses. The rest was generated by our three businesses.

Despite strong earnings, our equity capital has dropped to DKK 1.53bn, which is only natural. The profit for the year has a positive impact, but the buyback of own shares, dividends paid out, and exchange rate effects must be deducted from the profit.

EAC has become slimmer and fitter. Its capital structure has become more efficient, a fact reflected in our solvency ratio. This ratio was 60-65% for several years – and even higher in 2005 following the divestment of Nutrition – but has now been reduced to the more suitable level of 57%.

A reasonable capital structure involves introducing debt in our businesses where and when reasonable. To the extent possible, the businesses should be able to finance their own growth through their own means and through external financing.

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But it should be noted that since EAC operates in countries where sudden exchange- rate and interest-rate movements occur from time to time, the business should be equipped to withstand unexpected developments. Many of you present have probably been shareholders in a company where capital was a scarce resource, which was also the case for EAC ten years ago. We don’t want to go down that road again. Hence, the solvency ratios of our businesses should be slightly higher than standard ratios, and the listed parent EAC should be strong enough to withstand more turbulent conditions if and when required.

But there is scope for a further reduction in the solvency ratio.

The Supervisory Board proposes dividend payments of DKK 10 per share. This amounts to DKK 150m in total, or 35% of the net profit, which is in line with our policy of distributing about one-third of the profit for the year as dividends. In a few cases, following special events such as the divestment of Nutrition, we have paid out more. However, one-third is a good guideline.

EAC bought back own shares again in 2007. From August until November, we bought 1,280,275 shares from the market at a total price of approximately DKK 500m. EAC now holds slightly more than 8.5% of its own shares and, since the idea of buying back shares is to channel money to the owners and achieve a more efficient capital structure, this holding of treasury shares must be reduced. For this reason, the Supervisory Board proposes a write-down of the share capital by roughly 6% of the 8.5%, but we will get back to this later on in the agenda.

Following this write-down, EAC will hold enough treasury shares to cover options programmes for the executive board and other key staff – I will return to this programme later.

The third component of value creation is the share price. Also last year, the EAC share performed very well on the OMX in Copenhagen, so the share has performed well relative to the market as well as its peers since the equity turmoil began last autumn. The EAC share has been a good investment in recent years: over the past three years,

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EAC shareholders have achieved an annual return of 61%. Seen in a long-term perspective, however, EAC did owe its shareholders something.

The Supervisory Board has had a strong focus on the question of the Group capital structure. Right now, the market seems to be focusing on short-term results, and both analysts and aggressive activist funds are chasing high dividend payments, buybacks and high gearing.

The Supervisory Board has a strong urge to balance this trend with the desire for long-term business development, which requires sufficient capital adequacy. To us, creating value for our shareholders is very important. We wish to continue the Group’s dividend policy and retain the ability to buy back treasury shares. However, this should go hand-in-hand with a shared desire for a reasonable share price improvement for the EAC share to reflect the long-term solid development of our company.

And now a few words about the composition, work and remuneration of the Supervisory Board.

Over the past few years, we have conducted a generational change on the Supervisory Board. We have made this change smoothly and brought in new blood and new competencies without compromising continuity.

Last year, Mr Preben Sunke and Ms Connie Astrup-Larsen were elected to the Board, and I took over as Chairman after Mr Jan Erlund. As the next step in this generational change process, Mr Kaare Vagner will resign today, and we propose no substitution, since we elected two new members last year and five seems to be a good size. Five members is enough to allow us to view things from different angles and offer different competencies but not too many to convene quickly and form a quorum.

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Last year, the Board held five meetings in Copenhagen, one three-day seminar in Venezuela and two conference calls. We regularly discussed our rules of procedure and work methods and have agreed to make more conference calls in the future: it is an efficient way to work when it comes to making decisions on certain subjects or getting a quick update on developments.

The remuneration paid to the Supervisory Board appears from the annual report. We propose DKK 250,000 be paid to ordinary Board members, DKK 400,000 to the Vice Chairman and DKK 550,000 to the Chairman: all of these amounts are the same as last year.

Let us take a look at the major issues that we dealt with last year. Yes, we have implemented the strategic decisions that we made at the beginning of the year. We supported our strong growth. We considered acquisitions and possible takeovers. We have lived up to our duty to supervise and, as two main general issues, we considered EAC’s further development and its risks. I would like to elaborate on these last two issues.

The high level of profit that we have seen in recent years should also – not only, but also – be seen in relation to the calculated risk that we are taking in Venezuela. Conditions in Venezuela are unusual, as we saw with our own eyes during our visit in November. We were there when the president lost the referendum that could have given him far-reaching authority; seeing tens of thousands of people in the streets was a strong experience in itself.

It is sometimes discussed whether there is a substantial risk of EAC’s business in Venezuela being nationalised.

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It is a fact that the Venezuelan government has declared a wish to gain majority control of specific areas, such as oil exploration, telecommunications, etc. There has however, not been talk about nationalisation in the form of expropriation, but rather of forced sales on market terms.

As we see it, the likelihood of the government wishing to acquire EAC Plumrose is extremely small. On the contrary, we are experiencing strong support from the authorities as a result of our current investments throughout the value chain and our strong focus on employees' conditions and welfare.

Moreover, we operate the business very efficiently and generally make an effort to act as an integrated part of the Venezuelan society, so we are very confident that the risk of a forced government takeover is very low.

But there are other risks.

There is the country’s quite unbalanced dependence on oil. There is the risk of increasing raw materials prices or rising interest rates. As in other South American countries, there is the risk of devaluations that could have a short-term negative impact on Foods’ revenue and earnings until the company has had a chance to adjust its sales prices. And there is, of course, some uncertainty related to other political measures.

The close correlation between gains and risks should be emphasised in this connection. Too much greed often implies substantial risk, and the Supervisory Board attaches a great deal of importance to striking the right balance between our current high level of earnings and the risks of operating a business in Venezuela.

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We monitor developments in the country closely and maintain ongoing dialogue with the political system and various interest groups in the country. We profit on our experience and the network that we have established in our more than 50 years of presence in the country.

We take many things into consideration when we make decisions on what we see as necessary investments in the continued expansion of the business, but let us not hide the fact that conditions in South America in general and Venezuela in particular have our special attention.

The political rhetoric is often overwhelming and often front-page material, but at EAC, we focus on remembering and respecting the fact that the country has done a great deal to improve people’s standard of living and increase their purchasing power, which is essential to our business.

So, Foods forms part of the basis for our strategy, just as Industrial Ingredients and Santa Fe do. We took these three businesses off the market in 2006, and they will not be offered for sale again as long as we are the best owners for these three businesses and as long as they are more valuable to EAC shareholders than they are to others.

Some maintain that EAC is a conglomerate that lacks cohesion. That may well be true, although both Industrial Ingredients and Santa Fe build high-margin services on top of logistics services, and although they share other features as well. But yes, we are basically a conglomerate, and you have to remember how we constantly hear how conglomerates are doomed one year and glorified the next.

However, that discussion is actually irrelevant, because conglomerates are like anything else in the world: there are good apples and bad apples. What counts is whether EAC is run efficiently and performing well. For this reason, we will continue to own the three businesses, because they offer a great deal of still unexploited potential and because the revitalisation of EAC requires a certain volume and more than one leg to stand on.

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In our operations, EAC may resemble an equity fund which also owns operations with no greater cohesion. But there are important differences between EAC and an equity fund.

We do not develop our businesses with a view to selling them, but with a view to creating long-term value to our owners. Our approach is both financial and industrial : our management knows every corner of our businesses and contributes to their development.

Our strategy is to develop the three businesses: make them larger and stronger. I have asked our CEO, Mr Niels Henrik Jensen, to talk about this approach and introduce us to the businesses.

I will provide an overview of the results of the three businesses in 2007, their strategies and the outlook for 2008.

Foods had an unusually good year. Based on the peaking oil prices – and because it was an election year – the government in Venezuela pumped a great deal of money into the domestic economy. This resulted in an increase in people’s purchasing power and a strong appetite for premium products such as hams, sausages, chicken and deviled ham products. When it comes to these products, Foods’ brands like Plumrose and Oscar Mayer are among the consumers’ first choice.

Growth was mainly generated by products with high sales prices and high margins and, for this reason, revenue was up 29% in Danish kroner and 41% in US dollars, and earnings more than doubled. It could have been even better, but Foods lacked raw materials and production capacity to meet demand all year. Hence, we were only able to squeeze an extra 1% volume out of the factory.

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Capacity is a problem. Foods lacks production lines to produce all the goods that can be sold, a problem we are working to solve. The first step in this process is to install new machinery and production lines in the factory in 2008, which will enable us to increase production of own goods from slightly more than 62,000 tonnes last year to 94,000 tonnes by the end of 2009, which will allow us to operate at full capacity from 2010.

We invested in this equipment last year, when Venezuela accounted for most of EAC’s total investment of roughly DKK 234m. This year, EAC total investments will be slightly higher. All in all , we expect to invest USD 120m, or about DKK 600m, between 2008 and 2012 in an extensive renovation and expansion of the facilities in Venezuela, including land, buildings and equipment.

Foods will be financing this investment on its own. For this kind of money, we can more than almost double Foods’ production of finished goods, as well as enhance efficiency and automate processes. And we can create better conditions for both employees and the outdoor environment.

Foods is the market leader in processed meat in Venezuela. Foods dominates the premium segment of highly processed products sold at good prices. On the other hand, Foods has lost ground to competitors in the medium- and low-priced segments because it lacked capacity and for this reason prioritised the premium segment.

This lost ground in the medium-priced segment must be recovered. We must invest more funds in marketing and sales promotion; we need to concentrate on innovation, and we must produce more products for the lower-priced segments. Foods is planning the introduction of six new products in 2008 alone, and this will necessitate some cost-heavy campaigns.

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Foods has a strong basis in its involvement in the entire value chain: Foods manufactures its own feedstuff for its pig-breeding operations and, on a smaller scale, its cow-breeding farms. The farms produce an annual 250,000 pigs, covering about one-third of our consumption. The animals are sent to Foods’ abattoir and then to processing, and the finished products are distributed to thousands of stores. Investment in this value chain will continue so that all the links in the chain will be strong enough to support the expected growth. To provide an example, Foods has also engaged itself in chicken breeding: we now receive meat of the finest quality for our production. Sourcing of meat outside Venezuela is also an option that we are looking into.

Foods’ refrigerated trucks and warehouses handle other producers’ goods already – e.g. cheese, chips and tuna – and it would be natural to carry even more freight on the trucks, which could be more products from third parties. But there could also be one or more complementary food products with a strong brand that Foods could buy to further increase its value and generate distribution and sales synergies.

Enough about our growth plans. As previously mentioned, market conditions were rather unusual in 2007, with surging demand and a local shortage of meat. This year, we foresee a certain normalisation of the market, with Foods only gradually profiting from its increase in capacity. For this reason, we foresee an increase in revenue of about 30% measured in US dollars and an operating margin of about 13%.

Industrial Ingredients achieved an increase in revenue of 19% in Danish kroner and local currencies. Thailand is the main driver of this business, but momentum was lost due to political uncertainty in the country that also dampened demand for industrial ingredients and special chemicals. Nevertheless, sales were up 9% in Thailand. The rest of South East Asia achieved growth of 30% – mainly driven by Indonesia, the Philippines, Vietnam and Malaysia – and India recorded growth of almost 20%.

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The operating profit excluding non-recurring items and operating margin grew to a highly satisfactory 8.1%.

Industrial Ingredients aims to become the leading supplier of industrial ingredients in both South-east Asia and South Asia. Its acquisitions in India and Bangladesh marked the beginning of a strategy for South Asia, i.e. the countries on the Indian subcontinent, and our expansion in these two countries continues. If the opportunity arises, our next step in South Asia could be to set up businesses in Pakistan and Sri Lanka, countries that are perhaps mostly known for the internal unrest focused on by the media, but they are also achieving economic growth, and their industrial sectors are growing.

In South-east Asia, Industrial Ingredients will grow organically and through acquisitions. The sector is a fragmented one, and it will for this reason be possible to continue acquiring minor companies at reasonable prices. Outside South-east Asia and South Asia, there are a few countries – including, of course, China – that could be of interest, either because they could provide Industrial Ingredients’ suppliers with a wider geographical coverage, or because Industrial Ingredients could procure products that would complement its current supply. Our ambition is to achieve wider and deeper market coverage in Asia so that Industrial Ingredients can increase revenue to roughly DKK 2bn before 2010.

The business should also be able to attract new agencies with new products. Additionally, we intend to build up on the systems and services side, because Industrial Ingredients’ success is not just about moving a product from A to B, but also about offering broader and better services than its local competitors. Industrial Ingredients offers technical services such as formulation of products, laboratory test, documentation and approvals by authorities; Industrial Ingredients also offers commercial services focusing on creating contact with clients in selected industries. Lastly, Industrial Ingredients offers supply chain services, providing manufacturers access to the important markets in South-east Asia and South Asia and ensuring just- in-time distribution to local clients.

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Because these services are so important, Industrial Ingredients intends to strengthen its supply chain, tailor more commercial solutions and invest more in business systems, know-how and quality.

In 2008, we expect to see a rise in revenue of about 22% in local currencies. Because acquired companies must be lifted to EAC standard and because there have been changes in the product mix, the operating margin will fall slightly. However, +7% is still a high level for a distribution and service company.

Moving and Relocation Services, which operates under the name of Santa Fe, grew 7% in Danish kroner last year and 13% in local currencies. Revenue is actually a poor yardstick, because freight expenses for flights and vessels are included in revenue without affecting earnings, and, as you know, freight rates do go up and down. Thus, earnings would be a better guideline: they went up to a highly satisfactory DKK 60m, equivalent to an operating margin of 10.1%.

With 25,000 relocations handled last year, Santa Fe’s largest operation is moving and relocation, as well as services to relocated employees of multinational companies and organisations. These relocation services include assistance in connection with immigration and obtaining visas, home and school search, language and cultural training, and administration of tenancies. Large corporate groups are increasingly outsourcing such jobs, and Santa Fe is now the market leader in Asia. This has strengthened Santa Fe's growth and earnings and this growth must be maintained.

Santa Fe offers moving and relocation services from 36 offices in 13 markets. The many new units that were added last year must be consolidated; at the same time, Santa Fe intends to enter new markets step by step with its own offices or acquisitions of existing companies, preferably companies offering complementary services. It is very much the clients who determine where we go, because when large groups ask Santa Fe to take care of their employees, we must be where the clients are.

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Also, Santa Fe has introduced new important technologies to improve its client services and enhance efficiency. One example is the ReloAssist software, which Santa Fe implemented last year. The ReloAssist allows all parties involved in a relocation access to expenses and the status of the relocation: where is the shipment, when will it arrive, what is happening with visa and immigration status, etc. Santa Fe will be introducing more innovative solutions to make its services even more transparent and is also working on expanding its product range to include even more outsourcing services to our major clients.

The other large operation in this business is Records Management. This operation has now been rolled out in 11 cities in which office space per square metre is priced so high that it makes sense for companies to relocate their records. Santa Fe continues its expansion in Records Management and will be investing in new warehouse facilities in new cities while also continuing to improve services, security and Web-enabled access to records. We believe in continued attractive growth rates for Records Management as the commercial city centres in Asia continue to grow.

Lastly, the business offers general Freight Forwarding in Hong Kong and China, an operation we also expect to grow.

The outlook for Moving and Relocation is positive as well. We expect growth of roughly 16% in local currencies, also in the two Indian companies we acquired in January this year. The operating margin is expected to remain at last year’s level of about 10%.

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As Niels Henrik said, we have many plans for the three businesses: acquisitions, organic growth, geographical expansion, extensions, investments in new facilities, innovation in products and services – and so much more.

With respect to acquisitions, we will not be just aiming at anything that moves. The companies we acquire must fit in well with our products, geography, strategy and required return.

For this reason we must adopt a highly selective approach. One year, we may buy six companies – which we did last year – and the next we may buy eight, and then the next year, maybe none. The number is not important; what is important is buying the right companies.

EAC must grow by doing more of what we are already doing, and we must grow by expanding into operations that are natural continuations of our present business. However, it is also the duty of the Supervisory and Management Boards to look even further into the future and consider whether an entirely new business segment could fit into EAC and meet our requirements as to return, risk and ethics. We have no current plans. But of course, it should be on our minds – and we have to think carefully.

Let us take a look at our financial targets for the coming four years. We are aiming at annual double-digit organic growth in revenue, measured in local currencies. This may sound like a lot, considering that the USA – which accounts for one-third of the world’s GDP – seems somewhat weakened. But the American flu has not spread to Asia, at least not yet. Considering the businesses that we run and the growth markets that we operate in, our target of double-digit growth is definitely within reach. EAC is a growth company, and it should continue to be a growth company.

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Another target is an average annual return of roughly 30% of invested capital, i.e. what we call ROIC. In 2006, ROIC stood at 32% excluding items related to the divestment of Nutrition, and last year it exceeded 50%. An average return of 30% is still within reach, even if we have to invest more heavily, among other things due to the construction project we have in Venezuela.

Our financial target is also to distribute one-third of the annual profit as dividends, just as we will continue to buy back our own shares in the market.

We need the right people and the right structures to develop EAC and manage growth. Our organisation has been strengthened, both centrally and locally in the businesses, and we intend to continue along this path. Also, we must focus on utilising the potential across the Group; the Management Board is doing a great job of infusing 'vitamins' into the EAC community. For example, the entire strategy process was a common cause for managers in the three businesses. They have shared analyses and tools; they have exchanged ideas and targets; they have discussed how to handle common challenges. And they have inspired each other over a one-month process, thus far culminating in a gathering of 40 managers at the IMD business school in Switzerland last month under the heading ”Taking EAC to the Next Level”.

I say ‘ thus far culminating’ because the managers took home tools from the IMD to roll them out locally. This includes tools for organisational development, change processes, growth management and implementation of strategies, all to ensure that the ideas are anchored in the organisations and that all employees know what to contribute in the effort to meet our targets.

Finally, let us take a look ahead into 2008 and see what we can expect in our main markets.

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I don’t think anyone would disagree that considering the recession threat in the USA, the very volatile equity markets and the sometimes almost chaotic conditions in the financial markets, we are heading for difficult times. If, when and how much these uncertainties will affect our domestic markets is difficult to say. But we are seeing a pretty clear picture of underlying economic growth rates that are substantially higher than those currently seen in Europe and the USA.

In China, Vietnam and India, we expect GDP growth in 2008 of as high as 8-10%, but also in our main market in Venezuela and in the important markets in Indonesia, the Philippines and India, we foresee good growth rates between 4.5 and 6%.

We feel confident that these growth scenarios can be fulfilled and that of course provides a good basis for the EAC businesses in 2008.

The slide behind me shows our expectations for growth and operating margins in our three businesses:

- About 30% growth in Foods in USD-terms and an operating margin of roughly 13% - About 22% growth in Industrial Ingredients in local currency and a margin above 7% - About 16% growth in Santa Fe in local currency and a margin of roughly 10%.

For the entire Group, we foresee double-digit growth in revenue in local currencies and Danish kroner, whereas we expect an operating profit of roughly DKK 540m, compared to 603m last year. We should keep in mind, of course, that 2007 was an exceptionally outstanding year in Foods. For this reason, maintaining a high level of earnings under more normal conditions would be satisfactory.

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This outlook is based on the operations that we have today. If we acquire companies during the year, it could affect the outlook. We already know the results for the first two months of the financial year and have an indication of the results for March; so far developments are in line with expectations. We will update our expectations in connection with the release of our first-quarter results.

With this review of our results for 2007 and the presentation of the current state of EAC, I hope we have been able to give you a good description of our company.

Everywhere in the company, strong efforts have been made to document that the decision that EAC should continue its operations was the right one.

In conclusion, I would like to thank the Management Board in Copenhagen as well as the managements of our three operative units for their committed efforts in 2007 and also for a very satisfactory start to 2008.

Thank you for your attention.

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