CONTENTS OF THE HALF YEARLY FINANCIAL REPORT

Half yearly business report of the Group                                                                           page 3

Summary half yearly consolidated financial statements                                                    page 10

Reports of the statutory auditors on the consolidated half year information                  page 35

Declaration of persons responsible for the half yearly financial report                           page 37

THE HALF YEARLY GROUP BUSINESS REPORT

I Key events that have occurred over the last six months and their impact on the financial statements

The scope of consolidation as of June 30, 2011 (identical to June 30, 2010)

100%

100 %

 


Summary consolidated half yearly financial statements

The summary half yearly financial statements of the Toupargel Group as of June 30, 2011 were approved by the Board of Directors meeting on July 27, 2011. Roland Tchenio, CEO of SAS Toupargel and Place du Marché approved the financial statements of these companies on July 27, 2011. The half yearly financial report was published on July 28, 2011 on the internet, after the Paris stock market closing, (websites: www.toupargelgroupe.fr, www.hugingroup.com).

Présentation des comptes semestriels consolidés résumés

The summary half yearly consolidated financial statements of the Toupargel Group and its subsidiaries, for the period from January 1 to June 30, 2011, should be read in conjunction with the audited consolidated financial statements for the financial period ending December 31, 2010 as described in the Reference Document filed with the Financial Markets Authority (AMF) on April 4, 2011 under number D.11- 0234.
Pursuant to European regulation 1606/2002 of July 19, 2002, the consolidated financial statements of the Toupargel Group have been drawn up on the basis of IFRS (International Financial Reporting Standards) as adopted by the European Union on June 30, 2011. IFRS standards can be consulted on the website of the European Commission (http://ec.europa.eu/internal_market/accounting/ias/).
The summary half yearly consolidated financial statements are presented and have been prepared on the basis of the provisions of IAS 34 "Interim financial information". Toupargel Group has applied the same accounting policies as it used for its consolidated financial statements for the year ended December 31, 2010.

Accounting treatment of the CVAE as from January 1, 2011
The business value added levy (Cotisation sur la Valeur Ajoutée des Entreprises: CVAE), a component of the Territorial Economic Contribution (Contribution économique territoriale: CET) which has replaced local business tax (Taxe professionnelle) and which is based on value added, is recognised in the income statement under income tax for the period, in line with usual practices of listed companies in the food and drink industry.

Sales of goods (in ?000s)

Consolidated sales excluding tax amounted to ?168,499,000 compared to ?174,804,000 as of June 30, 2011, a decrease of 3.6%.

Sales between the various business areas and sales methods can be broken down as follows:

Sales of the "Frozen Foods" business fell back by 4.0% to ?158,238,000, due to a dip in the number of new customers. The toupargel.fr e-business website accounted for over 1.1% of "Frozen Foods" business.
The "Fresh foods and Groceries" business saw sales grow by 2.5% to reach ?10,261,000, buoyed by a rise of 4.2% in the average shopping basket. The placedumarche.fr e-business website accounted for 3.5% of "Fresh Food and groceries" business.

Sales margin (in ?000s)

The sales margin fell back to ?100,717,000 compared to June 30, 2010. In terms of relative value, it moved down from 57.6% on June 30, 2010 to 57.3% on June 30, 2011.
The margin for the "Frozen Food" business rose from 58.3% to 58.1%, while "Fresh Food and Groceries" drop from 46.8% to 46.2%.

Operating income (in ?000s)

Operating income amounted to ?7,984,000 compared to ?9,822,000 at June 30, 2010.

"Frozen Food" operating income moved down from ?10,354,000 (6.3% of total sales) to ?8,344,000 (5.3% of sales), while "Fresh Food and Groceries" rose from - ?531,000 (-5.3% of sales) to
- ?359,000 (-3.5% of sales).

Staff costs went up from ?58,003,000 (33.2% of sales) to ?58,459,000 (33.7% of sales). Average headcount for the period (FTE) decreased from 3,438 at June 30, 2010 to 3,357 at June 30, 2011, due to a reduction in the number of sales people.

External expenses fell by ?23,902,000 to ?23,592,000 as of 30 June 2011. Fuel costs increased by ?3,604,000 (2.1% of net sales) to ?4,053,000 (2.4% of net sales) due to the rising cost of diesel. Communications fell by ?775,000 to ?224,000 due to lower TV advertising investments.

Taxes fell from ?5,295,000 as of 30 June 2010 to ?2,977,000 as of 30 June 2011. A tax adjustment made in 2010 concerning the contribution to sustainable fisheries for the years 2008 and 2009, was recognised as of June 30, 2010 in an amount of ?1,468,000. It was decided in 2010 to recognize the CVAE, a component of the CET, which has replaced the business tax, as a company tax.
Toupargel benefited from a favourable decision of the Court of Appeal of Lyon in the context of a request to the Tax Administration for a refund of the tax on meat purchases for the year 2001. The Tax Administration has not appealed to a higher court to date. The revenue, of a non-recurring nature, of ?1,134,000, was recorded on June 30, 2011 with corresponding moratorium interest (?536,000) as financial income (see below).

Amortisation and depreciation amounted to ?5,024,000 compared to ?4,843,000 as of June 30, 2010. Provisions amounted to ?26,000 against a writeback of ?1,292,000 as of June 30, 2010.

Fixed asset sales amounted to ?210,000 compared to ?78,000 as of June 30, 2010 (cession d'un bâtiment et de véhicules).
The operating margin (operating income/sales) fell from 5.6% at June 30, 2010 to 4.7% at June 30, 2011.

Net financial expenses

This item represented income of ?472,000 compared to a charge of ?79,000 as of 30 June 2010. ?536,000 was recorded as moratorium interest to be received as a result of the restitution of tax on meat purchases paid to the tax authorities in 2001.

Group share of net income (in ?000s)

Group share of net income fell back from ?5,639,000 to ?4,782,000. Net margin (net income/sales) fell from 3.2% to 2.8%.

Cash Flow (in ?000s)

Cash flow amounted to ?9,269,000 compared to ?9,310,000 as of June 30, 2010.

Shareholders equity (in ?000s)

Amounted to ?79,864,000 compared to ?73,713,000 as of June 30, 2010 (and ?80,710,000 on 31 December 2010), after payment of a dividend for 2010 in cash (?5,624,000) and securities (issuance of 280,025 new shares at a price of ?15.27) (dividend paid in 2009: ?9,903,000). The distribution in shares has no effect on the shareholders' equity position.

Net financial indebtedness (in ?000s)

Net indebtedness rose from ?12,263,000 as of December 31, 2010, to ?17,487,000 as of June 30, 2011 (compared to ?27,973,000 as of June 30, 2010). Finance leases totalled ?4,423,000 (?5,770,000 at December 31, 2010). The ratio of net debt to equity rose from 15% at December 31, 2010 to 22% at June 30, 2011 (compared to 38% as of June 30, 2010).

Investments

In ?000s 30/06/2010 30/06/2011 31/12/2010
Intangible fixed assets: 174 45 238
Tangible fixed assets (excluding lease reversals) 3 785 2 610 8 820
Total 3 959 2 655 9 058

Investments as of June 30, 2011 include the following:

  • the acquisition of motor vehicles for ?1,899,000,
  • buildings and fixtures for ?499,000,
  • the acquisition of IT equipment for ?212,000

Sales of fixed assets (mainly vehicles-fleet renewal) amounted to ?489,000 (net income of ?210,000) compared to ?422,000 as of June 30, 2010.

Legal and arbitration proceedings

Tax on meat purchases: a decision of the Administrative Court of Appeal of Lyon, dated June 30, 2011, ordered the state to return the tax on meat purchases made in 2001 to SAS Toupargel i.e. in an amount of ?1,134,000 (in addition to moratorium interest).This amount was recorded in the accounts on 30 June 2011. Other proceedings concerning the restitution of tax are still ongoing, but with a very low probability of success. They involve an amount of ?2,237,000 not recorded in the accounts.

Contribution to sustainable fisheries: an action for annulment of this contribution with the European authorities by the professional union is under consideration. The amount provisioned or paid since its inception until 30 June 2011 amounts to ?5,842,000.

There exists no governmental, judicial or arbitration procedure (including any procedure that the Group is aware of, is pending or is threatened), which could have or has recently had any significant impact on the financial situation or profitability of the Group.

Litigation identified on the closing date of the financial statements was provisioned on the basis of the method described in note 2.15 of the notes to the consolidated financial statements and details of which are included in note 14 of the same notes.
The Urssaf control that began in early 2011 concerning the three group companies has resulted in a credit of around ?100,000.

Events subsequent to closing
Toupargel SAS acquired, with effect from 1 July 2011, a frozen food home delivery business with annual sales of over the period 30 June 2010 to June 30, 2011 of ?1,030,000.
No other event material to the Group has occurred since closing.

Significant changes in the financial or business situation
No significant changes in the financial or commercial situation of the Group has occurred since 30 June 2011.

II Main risks and uncertainties over the next six months

The risk assessment concerning information previously published in the 2010 annual financial report (see page 78) is unchanged.

2011 Outlook

For 2011, the Group aims to achieve a return to growth during the fourth quarter for the frozen foods and fresh foods and groceries businesses, and to pursue growth and improve profitability.
The Group is pursuing its "Cap 2013" strategic plan with a commercial organization based on the following three major priorities:
- the "store concept": allocation of an exclusive trading area to a dedicated sales team (telesales and delivery),
- multi-channel product offering: offer customers a choice of order method (outgoing phone call by telemarketers, incoming customer service call, internet via an e-commerce site),
-the multi-product offering: expand "Fresh foods and groceries" and Place du Marché products to "Frozen food" customers. Over the first half of 2011, the "Fresh foods and Grocery" business has seen its catchment area expanded and has set up in seven additional agencies. The goal is to eventually provide a delivery service for delivery of fresh foods and groceries in the eastern half of France.

III Transactions with related parties

The transactions with related parties described in Note 30 of the notes to the 2010 consolidated accounts continued over the 1st half of 2011 (note 25 of this report).


SUMMARY HALF YEARLY CONSOLIDATED FINANCIAL STATEMENTS OF THE TOUPARGEL GROUP
From January 1, to June 30, 2011

Consolidated Statement of financial position

Consolidated Income Statement

Consolidated statement of global income

Cash flow statement

Statement of changes in capital and reserves

Notes to the consolidated financial accounts as of June 30, 2010

              Note on IFRS valuation methods and principles
Note 1        Main events during the financial period and events since financial year end
              Note 2        Accounting principles and valuation methods
   Note 3        Scope of consolidation
              Note 4        Sectoral information
              Note 5        Market risk management

              Note 6        Fixed assets
              Note 7        Details of deferred taxes
              Note 8        Stocks
              Note 9        Current receivables and assets expected to be sold
              Note 10      Depreciation of current assets
              Note 11      Cash and cash equivalents
              Note 12      Consolidated capital and reserves
              Note 13      Provisions for retirement benefits
              Note 14      Other non-current liabilities
              Note 15      Net financial indebtedness
              Note 16      Details of current indebtedness

Notes to the consolidated income statement
              Note 17      Breakdown of sales
              Note 18      Personnel costs:
              Note 19      External costs
              Note 20      Taxes and duties
              Note 21      Provisions
              Note 22      Other income / other charges
              Note 23      Net financial cost
              Note 24      Analysis of income tax expense
              Note 25      Net profit
              Note 26      Related entities

Parent company financial information (company accounts)

Statutory auditors report

Consolidated Statement of Financial Position

(1) Following the reclassification of CVAE in 2010 as company tax (cf. note 2.1 to the consolidated financial statements as of December 31, 2010), the position at 30 June 2010 has been restated at ?425,000.


Consolidated income statement

(a) following the change in the accounting treatment of partnership agreements in December 31, 2010 (cf. note 2.1 to the consolidated financial statements as of December 31, 2010), the position at 30 June 2010 has been restated at ?395,000.

Consolidated statement of global income


Consolidated cash flow statement

(1) The dividend paid for FY 2010 amounted to ?5,624,000 and 280,025 new shares were issued at a price of ?15.27 i.e. a dividend paid in shares for a total amount of ?4,275,000.
(2) Investments and financings include finance leases under the items "tangible fixed assets", "receipts from borrowings" and "subsidies received".

In 2010 and 2011, new vehicles were purchased using internal financing instead of finance lease contracts.


Statement of changes in consolidated shareholders' equity

Note : There are no minority interests.

(1) The dividend paid for FY 2010 amounted to ?5,624,000 with 280,025 new shares issued at a price of ?15.27 i.e. a dividend paid in shares for a total of ?4,275,000.


      
Notes to the consolidated financial statements as of June 30, 2011

Toupargel Group is a company operating under French law, subject to legislation covering commercial companies in France and in particular the provisions of the code of commerce. The company's head office is located at 13 Chemin des Prés secs at Civrieux d'Azergues (69380) and it is listed on the Paris stock market in compartment C of Nyse Euronext Paris.
The Toupargel Group is specialised in home delivery of frozen foods, fresh foods and groceries.
The financial statements and information are presented in thousands of euros (?000s), except for per share information presented in euros.
This note comprises information additional to that in the consolidated balance sheet indicating a total of ?167,756,000 and the consolidated income statement showing a net profit of ?4,782,000.
The Board of Directors approved the consolidated financial statements as of June 30, 2011 in its meeting of July 27, 2011.

Note on IFRS valuation methods and principles and general notes

NOTE 1 - Main events during the financial period and events since year-end

Key events during the period
The Urssaf control that began in early 2011 for the three group companies has resulted in a credit of around ?100,000.
A decision of the Administrative Court of Appeal of Lyon, dated June 30, 2011, ordered the state to return the tax on meat purchases made in 2001 to SAS Toupargel i.e. in an amount of ?1,134,000 (inclding moratorium interest in an amount of ?536,000). This amount was included in the accounts as of June 30, 2011.

Events subsequent to closing
Toupargel SAS acquired, with effect from 1 July 2011, a frozen foods home delivery business with annual sales over the period 1 July 2010 to June 30, 2011 of ?1,030,000.
No other significant event liable to affect the financial figures presented occurred between the date of closing of the accounts on June 30 2011 and the date of the Board Meeting approving these accounts (July 27 2011).

NOTE 2 - Accounting principles and methods of valuation

Accounting basis

Pursuant to European regulation no.1606/2002 of July 19, 2002 regarding international financial reporting standards, the consolidated half yearly financial statements of Toupargel Groupe have been drawn up on the basis of International financial reporting standards (IFRS), as adopted by the European Union as of June 30, 2011. The standards can be consulted on the website of the European (http://ec.europa.eu/internal_market/accounting/ias).

IFRS comprises standards issued by IFRS and IAS as well as IFRIC interpretations. The summary quarterly consolidated financial statements are presented on the basis of the IAS 34 standards, "Interim Financial Information", which allows a condensed presentation of the notes. They should be read in conjunction with the consolidated financial statements as of December 31, 2010 and in particular note 2, "consolidation principles and valuation methods" as described in the reference document filed with the French financial markets authority (AMF) on April 4, 2011 under the number D 11-0234 and available on the company's website, www.toupargelgroupe.fr.
Standards and interpretations retained in preparing the consolidated accounts as of June 30, 2011 and the 2010 comparative financial statements are those published in the Official Journal of the European Union prior to June 30, 2011 and which became compulsory on that date. No change in accounting policies occurred between 31 December 2010 and 30 June 2011.

New IFRS standards and interpretations

The standards and interpretations applicable as from January 1, 2011, in particular IFRS 3 revised , do not have any impact on the Group's consolidated financial statements.
Toupargel has opted not to apply the standards and interpretations adopted by the European Union before the closing date and which come into force after this date. Following ongoing analysis, the group does not expect the new standards to have any material impact on its shareholders' equity.

Seasonality of sales at the beginning of the year depends on whether Easter falls into the first quarter or second quarter. Summer weather conditions have an impact on Q3 sales, in particular ice cream sales. The fourth quarter is a busy period because of the end of year holiday period. Changes in the annual calendar also have an influence on the number of days worked each quarter. Over the past three years, sales during the first half of the year averaged 49.5% of annual sales.

  • Use of estimates and assumptions

Company tax for the half-year is calculated on the basis of an estimated average rate calculated on an annual basis. This estimate takes into account where appropriate the use of loss carryforwards.

In accordance with IAS 34, given the absence of significant change in market data (rates, value of assets) or any significant event (changes to or liquidation of regimes), changes in employee benefits are based on an annual actuarial projection as of December 31, 2011, estimated on December 31, 2010. The impact on the income statement has been estimated on a prorata temporis basis.

The economic and financial environment at the time of closing makes it difficult to establish estimates and assumptions.

  • Rules governing presentation of summary statement

The consolidated balance sheet has been presented as distinguishing "current" from "non-current" assets as defined on the basis of IAS 1. Accordingly, financial liabilities, provisions and financial assets have been broken down between those of more than one year included in "non-current" assets and those of less than one year in "current" assets. The consolidated income statement has been presented by type, based on one of the models put forward by the French national accounting committee (CNC) in its recommendation 2004-R-02.

The Group applies the indirect method of presentation for its cash flow statement, as provided for in the same recommendation.

NOTE 3 - Consolidation scope and closing date

The closing date is December 31.

The Consolidation scope as of June 30, 2011 comprises the following companies:
            ·         Toupargel Groupe SA, the holding company of the consolidated group,
·         The "Frozen foods" business, Toupargel SAS,
·         The "Fresh food and groceries" business, Place du Marché SAS.

The company financial statements used for the consolidation as of June 30, 2011, concern, for Toupargel Group, Toupargel SAS and Place du Marché SAS, for a period of six months.

Toupargel Place du Marché
Amount of capital 25 000 K? 100 K?
Number of shares 1 250 000 actions 100 000 actions
Shareholders' equity at 30.06.2011 55 732 K? 1 219 K?
Profit-sharing, net 83 438 K? -
Number of shares held 1 250 000 actions 100 000 actions
Percentage held 100 % 100 %
Consolidation method Intégration globale Intégration globale
Head office 13 chemin des Prés Secs
69380 CIVRIEUX D'AZERGUES
13 chemin des Prés Secs
69380 CIVRIEUX D'AZERGUES
SIREN Number 957 526 858 325 743 516
NAF Code 47 11 A 47 91 B

NOTE 4 - Sectoral information

NOTE 5 - Market risk management

- Financial instrument counterparty risk
The Group uses its overdraft authorisations and invests its surplus cash for periods not exceeding one week. As of June 30, 2011, the Group does not have any surplus cash.

- Equity market risk
No cash has been invested in equities. Available cash holdings have been invested in non-speculative investments (money market SICAVs) that can be mobilised at short notice. Toupargel Group exposure to market risk concerns Treasury shares held in the context of stock option plans and the liquidity contract. As of June 30, 2011, the group held 203,053 Treasury shares.

- Liquidity risk
The Toupargel Group has short and medium term credit lines (note 15) which are subject to covenants with leading banks, providing the group was flexibility in its financing sources.

- Currency risk
In view of the very limited number of transactions carried out in currencies other than the euro, currency risk can be considered negligible.

- Credit risk
In the context of its cash management activities, the Group is exposed to credit risk. Market transactions are effected within the limits of authorisations determined by the Finance Department for each counterparty. For the Group, financial instrument counterparties include:

  •  with regard to trade receivables, debtors (mainly business cooperation receivables vis-a-vis suppliers) for which the Group has as liabilities trade debt of at least an equivalent amount,
  •  with regard to cash and cash equivalents, leading banks and financial institutions.

-Interest-rate risk
Groupe Toupargel's interest rate risk management policy has the triple objective of prudence, liquidity and profitability, with risk management centralised, monitored and driven by the Group's Finance Department.

Consolidated statement of financial position

NOTE 6 - Fixed assets

a - Variation in gross fixed assets

(1) Intangible fixed assets correspond to software.

Investments as of June 30, 2011 include the following:

  • the acquisition of motor vehicles for ?1,899,000,
  • buildings and fixtures for ?499,000,
  • the acquisition of IT equipment for ?212,000

Sales of fixed assets (mainly vehicles-fleet renewal) amounted to ?489,000 (net income of ?210,000) compared to ?422,000 as of June 30, 2010.

b- Variation in depreciation/provisions

(1) Intangible fixed assets correspond to software.

Amortisation and depreciation of intangible assets and property plant and equipment is as follows:

c- Net Fixed assets

Goodwill is subject to an annual impairment test on the closing date of 31 December. The performances of the various cash flow generating entities during the first half of 2011 do not call into question the conclusions of the most recent impairment tests carried out on 31 December 2010.

d- Details of other non-current financial assets

NOTE 7 - Details of deferred taxes

NOTE 8 - Stocks

NOTE 9 - Current receivables and assets due to be sold

(1) : Assets held for sale relate to the real estate assets of Void, Raddon and Courtisols to Place du Marché and St Astier, La Haye du Puits, Crissey and Courtesoupe for Toupargel, as well as vehicles. As their market value is estimated to be higher than their book value, the amounts in the balance sheet have been entered at their net book value.

NOTE 10 - Depreciation of current assets

NOTE 11 - Cash and cash equivalents

The Toupargel Group invests its surplus cash in risk free short-term money market mutual funds.

- Breakdown

- Inventory

NOTE 12 - Consolidated shareholders'equity

- Composition of company capital

The capital comprises 10,383,310 shares with a nominal value of ?0.10.

- Reconciliation of company reserves with consolidated reserves

- Information on stock options

- Buyback of shares
As of 31 December 2010, the Toupargel Group held 200,000 treasury shares acquired for ?5,106,000 for the purpose of allocation to the stock option scheme approved by the General Meeting of 27 April 2007 and 1616 shares pertaining to the liquidity contract, valued at ?22,000.These amounts have been recorded as a reduction in shareholders' equity.
As of 30 June 2011, the Toupargel Group held 200,000 treasury shares acquired for ?5,106,000 for the purpose of allocation to the stock option scheme approved by the General Meeting of 27 April 2007 and 3053 shares pertaining to the liquidity contract, valued at ?42,000. These amounts have been recorded as a reduction in shareholders' equity.

- Allocation of 2010 result
The General Meeting of 22 February 2011 called to approve the accounts for financial year ending 31 December 2010 decided to distribute a dividend of ?1.00 per share in cash or securities for financial year 2010 (it being stipulated that Treasury shares are not entitled to dividends).  The amount distributed amounted to ?5,624,000 in cash and 280,025 new shares issued at a price of ?15.27 i.e. a dividend paid in shares amounting to ?4,275,000.

NOTE 13 - Provisions for retirement

§  as of June 30, 2011

§  as of June 30, 2010

- Details of increases

§  as of June 30, 2011

§  as of June 30, 2010

- Comments
In the absence of any specific events concerning headcount, significant changes in interest rates or assumptions concerning the calculation of commitments, costs incurred for the first six months of 2011 have been estimated on the basis of forecast commitments as of December 31, 2010.

NOTE 14 - Other non-current liabilities

- Summary

- Details of provisions

§  as of June 30, 2011

§  as of June 30, 2010

§    as of December 31, 2010

Labour Court litigation
Group companies are involved in various individual Labour Court litigations. Each litigation is subject to a risk evaluation and a provision is constituted on this basis. Provisions are revised as the cases advance and an evaluation of real risks run made at closing. At the time of writing this report, no significant event had occurred that made it necessary to modify existing provisions.

Seniority awards
Commitments have been provisioned in the individual accounts of each Group company. The assumptions used for the actuarial estimate of long-term commitments (turnover, rate of wage growth, discount rate...) are those set out in note 12.2 of the 2010 annual financial report relating to retirement benefits.

Provisions for taxes
- Contribution to sustainable fisheries:A tax audit for fiscal years 2008 and 2009 concerning this eco-tax in 2010 led to a restitution provisioned in the accounts of Toupargel for an amount of ?3,341,000. This ecotax is the subject of an appeal by our trade association Syndigel and the FCD with the European Commission. The adjustments are the subject of proceedings with the administration on the initiative of Toupargel SAS. For the years 2008, 2009, 2010 and the first half of 2011, the amount paid or provisioned for this contribution amounts to ?5,842,000.

- Property taxes, business taxes: Tax adjustments made in prior years concerning methods of calculating property bases (industrial method compared to commercial method) for the five logistics hubs of the Group, have been paid or provisioned. These adjustments are the subject of litigation initiated by the Group.

- Tax on meat purchases: Like most French food distribution companies, group companies have initiated litigation to demand restitution of the tax on meat purchases and the additional tax paid from 2001 to 2003. A decision of the Administrative Court of Appeal of Lyon, dated June 30, 2011, ordered the state to repay the 2010 tax of one of the companies comprising the Group in an amount of ?1,134,000 (including moratorium interest). This amount was recorded in the accounts on June 30, 2011. Other proceedings concerning the restitution of tax are still ongoing, but with a very low probability of success. They involve an amount of ?2,237,000 not recorded in the accounts.

- Deferred taxes concerning regulated provisions and capital gains on property plant and equipment and land have given rise to the establishment of tax provisions.

- Litigation: Summary of demands and provisions as of 30 June 2011 (excluding taxation)

NOTE 15 - Net Financial debt

- as of June 30, 2011

- as of June 30, 2010

Out of total borrowings of ? 20,423,000, ? 19,426,000 are indexed on Euribor.

As of June 30, 2011, the Group had three medium-term credit lines amounting to a usable total of ?36 million, of which ?16 million have been used.:

  • A credit line was put in place on August 1, 2007 by a bank in favour of Toupargel SAS in an amount of ?10 million for an indefinite period. Depending on the use of the facility, the applicable interest rate is based on Euribor for the drawdown period plus a margin of 0.40% . The credit facility is not subject to covenants. The loan facility is subject to an availability fee of 0.08%.
     
  • A credit facility was put in place by a bank pool for Toupargel Group SA in an amount of ?30 million from September 30, 2008 to December 30, 2013, repayable each half-year from March 31, 2009 in tranches of ?3 million.

As of February 20, 2009, the extension option was used by an additional bank in an amount of ?10 million bringing the credit facility to ?40 million, repayable half yearly from March 31, 2009 in tranches of ?4 million.

The applicable interest rate is Euribor at the time of drawdown plus a variable margin based on a consolidated leverage ratio. This ratio (R) corresponds to consolidated net financial indebtedness divided by gross operating profit, according to the following table:

Ratio Margin
1.90 <= R 0.85% per year
0.9 <= R <1.90 0.75% per year
0.5 0.65% per year
R <= 0.5 0.60% per year

Net consolidated financial indebtedness comprises the amount (excluding accrued interest) of short medium and long-term borrowings contracted with financial institutions plus the capital portion of property lease commitments, equipment lease commitments and lease financings with purchase options, less consolidated cash and investment securities. Consolidated gross operating profit is defined as consolidated operating profit (French standards), plus transfers to and less writebacks of amortisation and/or provisions of an operating nature (excluding employee profit-sharing) and after accounting for other income and charges. The variable margin is revised twice a year on March 31 and September 30. The loan facility includes an availability fee of 0.20%.

Covenants:
The credit facility is subject to respect of the following financial ratios, calculated half yearly on June 30 and December 31:

The ratio

must be < 1.0

0

Consolidated net financial indebtedness 
Consolidated net assets                

The ratio

must be < 2.5

 


Consolidated net financial indebtedness            
Consolidated gross operating profit

The definitions of consolidated financial indebtedness and consolidated gross operating profit are provided above. Consolidated net assets are equal to shareholders capital plus merger and acquisition issue premium plus reserves plus or minus net profit/loss for the financial year plus a credit balance carried forward and less debit balance carried forward.
Toupargel Group SA has the option of cancelling all or part of the credit facility in tranches of ?10 million in advance.
As of December 31, 2009, covenants had been respected.

  • A credit facility has been provided by a bank pool to Toupargel Group SA and/or Toupargel SAS in an amount of ?10 million covering the period June 26, 2009 to June 26, 2014, repayable each half-year from June 26, 2009 in tranches of ?2 million. The applicable interest rate is Euribor at the time of drawdown plus a variable margin based on a consolidated leverage ratio.

This ratio (R) corresponds to consolidated net financial indebtedness divided by gross operating profit, on the basis of the following table:

Ratio Margin
R > 1.50 1.30% per year
1.30 1.10% per year
1.10 0.90% per year
0.9 0.80% per year
R <= 0.9 0.65% per year

Consolidated net financial debt consists of outstanding capital plus interest on short, medium and long term borrowings and debt (including debt related to the consolidation restatement of leases and financial leases), including overdrafts and drawdowns on credit facilities, plus bond borrowings and/or shareholder current accounts to the extent that they have not been subordinated to credit facilities. Consolidated gross operating profit is defined as operating profit plus transfers to provisions net of reversals on operating assets and operating provisions for contingent liabilities.
The variable margin is revised once a year on the first day of the interest period following the submission to the bank of the financial ratios certificate. This must be drawn up within fifteen calendar days of approval of the consolidated annual accounts by the General Assembly, but no later than six months after the end of each financial year. The loan facility is subject to an availability fee of 0.30%.

Covenants:
The credit facility is subject to respect of the following financial ratios, calculated half yearly on December 31:

must be > 1.0

 


The ratio

Cash flow - dividends voted during the last financial year        
Debt service

The ratio

must be < 2.0

 


Consolidated net financial indebtedness            
Consolidated gross operating profit

The definitions of consolidated financial indebtedness and consolidated gross operating profit have been provided above. Debt service means net cash interest expense plus principal repayments of term debt (including bond debt and shareholder current accounts, excluding variations in fixed term bank credit facilities) during the year under consideration, excluding any early repayments.
Toupargel Group SA has the option to cancel all or part of the credit facility in advance. As of June 30, 2010, covenants had been respected.

Available amounts at the end of each financial year are as follows:

in ?000s 30/06/2010 31/12/2010 31/12/2011 31/12/2012 31/12/2013
Amount available 36 000 32 000 22 000 12 000 10 000

As of June 30, 2011, ?16,000,000 had been drawn down.

Debt related to restatement of finance leases as of June 30, 2011

Out of total borrowings of ?4,423,000 of outstanding leases as of June 30, 2011, ?3,426,000 are indexed on Euribor.

Debt related to restatement of finance leases as of June 30, 2010

The decline in debt leasing is related to self-financing of the vehicle fleet from 2009.

NOTE 16 - Details of current debt

Notes to the consolidated income statement

NOTE 17 - Breakdown of sales by business sector

NOTE 18 -Personnel charges

     - Detail

- Staff


NOTE 19 - Charges externes

NOTE 20 - Taxes

(1) including adjustment in 2008 and 2009 of ?1,468,000
(2) including restated adjustment in 2008 and 2009 of ?1,857,000

NOTE 21 - Provisions

NOTE 22 - Other charges - other income

(1) including restitution of the meat tax of ?1,134,000.

NOTE 23 - Net financial cost

(1) dont intérêts moratoires sur le dégrèvement obtenu sur la taxe sur les achats de viande : 536 K?

NOTE 24 - Analysis of income tax

At June 30, 2010, tax due included ?1.1 million for the new business value added levy (CVAE) arising from the French tax reform relating to local business taxes.

NOTE 25 - Net income

- Share of income of consolidated companies

- Consolidation restatements

NOTE 26 - Related parties

Details of transactions with related parties is consistent with that described in Note 30 of the notes to the consolidated financial statements as of December 31, 2010.


 

 

Parent company financial information

Consolidated Statement of global income

Société d'Audit Financier
et de Contrôle Interne

11 rue Auguste Lacroix
69003 LYON
Deloitte & Associes
Immeuble Park Avenue
81 boulevard de Stalingrad
69100 VILLEURBANNE

TOUPARGEL GROUP

French limited liability company (Société Anonyme)

13 Chemin des Prés Secs
69380 CIVRIEUX D'AZERGUES

Report of the Auditors

on the half yearly financial information

Period from January 1 to June 30 2011

To the Shareholders,

Pursuant to the mission entrusted to us by your general meeting, article L.451-1 of the commercial code and article L.451-1-2 of the financial and monetary code, we have carried out:

-    a limited examination of the summary half yearly consolidated accounts of the Toupargel Group for the period from January 1 to June 30, 2010 as presented in this report;

These consolidated half yearly financial statements have been drawn up under the responsibility of the Board of Directors. Our role is to express an opinion on the financial statements, based on a limited examination, and to express our opinion on these accounts.

1.  Opinion on the financial statements

We carried out our examination on the basis of professional standards applicable in France. A limited examination of interim accounts consists mainly in obtaining information from management responsible for accounting and financial matters and carrying out analytical procedures. These procedures are less extensive than those required for an audit based on professional standards applicable in France. Consequently, the assurance that the financial statements taken as a whole do not include any significant anomalies, obtained in the framework of a limited examination, is a relative assurance, less certain than that provided in the framework of an audit.

On the basis of our limited examination, we have not identified any significant anomalies likely to call into question the conformity of the summary half yearly consolidated accounts with standard IAS 34 - the IFRS standard adopted by the European union for interim financial information.

2.  Specific verifications

We have also verified, in accordance with professional standards applicable in France, the information provided in the summary half yearly consolidated financial statements which our limited examination concerned.
We have no comment to make concerning the fairness of the information or its consistency with the summary half yearly consolidated financial statements.

Lyon and Villeurbanne, July 28, 2011

The Statutory Auditors
Company Auditor and Internal Control - SAFICI

Jacques CONVERT
Deloitte & Associes

Alain DESCOINS

Declaration of persons responsible for the half yearly financial report

 

Roland Tchénio

Chief Executive officer

I certify that to the best of my knowledge the summary financial statements for the half year that has ended have been drawn up in conformity with applicable accounting standards and provide a faithful picture of the assets, the financial situation and results of the company and all companies included in the consolidation, and that the half yearly business report on page 3 and thereafter provides a faithful description of all major events that have occurred over the first six months of the financial year, the impact they have had on the financial statements, main transactions between related parties, as well as a description of the major risks and uncertainties for the remaining six months of the financial year.

Signed in Civrieux d'Azergues, on July 28, 2011

 

Roland Tchénio

Chief Executive Officer

www.toupargelgroupe.fr
13 chemin des Prés Secs
69380 CIVRIEUX D'AZERGUES
Tel 33 4 72 54 10 00 - Fax 33 4 72 54 10 30
infofinanciere@toupargel.fr
SA with a capital of ?1,038,330,70 - 325 307 098 RCS Lyon - Code NAF 64 30 Z

2011 HALF YEARLY FINANCIAL REPORT:
http://hugin.info/143601/R/1555425/479757.pdf



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