fyffes plc annual report and accounts...

Fyffes plc A

nnual Rep

ort and A

ccounts 2003

Fyffes plc1 Beresford Street Tel: 353 1 887 2700Dublin 7 Fax: 353 1 887 2751Ireland Web: www.fyffes.com

Fyffes plc Annual Report 2003 | Page 1

Contents Page

Group Profile and Strategic Vision 2

Shareholder Information 3

Chairman’s Statement 4

Financial Highlights and Five Year Summary 5

Directors and Secretary 6

Corporate Social Responsibility 9

Procurement and Distribution 11

Financial and Management Strengths 13

Review of Operations for 2003 14

Financial Review for 2003 16

Statutory Financial Statements 23

Index to Annual Report 80


Group Profile and Strategic Vision | Fyffes |

Fyffes is one of the largest fresh produce distributors in Europe and among the five largest globally. The Groupoperates from approximately 75 locations in more than ten countries, mainly in Europe. The company is listed onthe Irish and London Stock Exchanges.

The Group markets the widest selection of the finest fresh produce under some of the best known brand namesin the industry including Fyffes, Turbana, Coplaca, Cape and Outspan.

Fyffes employs almost 2,700 people. Total turnover in 2003 was over €1.9 billion. Shareholders’ funds exceed€305 million including net cash balances of €172 million.

Management’s continuing focus is to maximise the return on investment for the company’s Shareholders.

Our goal is to achieve this by:

● Consistently meeting and exceeding the requirements of our customers● Sourcing the finest quality produce from the best suppliers● Employing the most innovative and environmentally sound production practices● Maintaining state-of-the-art facilities and logistical services● Pursuing every possible efficiency and synergy in the supply chain● Recruiting and developing the highest calibre personnel in the industry● Expanding our business through strategic acquisitions and alliances

Our dedication to these principles will ensure that the Group is uniquely placed to serve the requirements of ourcustomers with a complete basket of the finest quality fresh produce all year round, together with the necessarysupport services.

It is our long-term strategic vision to develop Fyffes into the most successful operator in the global fresh produceindustry.


Shareholder Information | Fyffes |

Share price (cent) High Low 31 December

2003 167 116 165

2002 157 110 132

Market CapitalisationThe market capitalisation of Fyffes plc at 31 December 2003 was €571 million. The ordinary share price at closeof business on 2 April 2004 was €1.59, giving a market capitalisation at that date of €550 million.

Web Sitewww.fyffes.com contains a wide range of detailed information on the company’s activities and products, togetherwith all the key financial data on the Group. It is updated on a continuing basis for all company announcementsand other relevant developments, including share price movements.

Investor relations RegistrarInvestors requiring further information Administrative queries about holdings of Fyffes plc

on the Group are invited to contact: shares can be directed to the company registrar:

Seamus Keenan Computershare Services (Ireland) Limited Group Investor Relations Manager Heron House

Fyffes plc Corrig Road 1 Beresford Street Sandyford Industrial Estate Dublin 7, Ireland. Dublin 18, Ireland.

Telephone: +353 1 887 2700 Telephone: +353 1 216 3100 Fax: +353 1 887 2751 Fax: +353 1 216 3151

email: [email protected] email: [email protected]

Annual General MeetingThe Annual General Meeting of the company will take place at the Burlington Hotel, Ballsbridge, Dublin 4, Irelandon Monday 31 May 2004 at 10.30 a.m. Notice of the meeting and related documentation will be posted toShareholders with the annual report.

Amalgamation of AccountsShareholders receiving multiple copies of company mailings as a result of a number of accounts being maintainedin their name should write to the company’s registrar, at the above address, to request that their accounts beamalgamated.

Payment of DividendsShareholders may elect to have future dividends paid directly into a nominated bank account by completing themandate form which accompanies each dividend payment or by writing to or emailing the company’s registrar, atthe above address, requesting a mandate form. Dividends are ordinarily paid in euro; however, for theconvenience of Shareholders with addresses in the United Kingdom, such dividends are paid in Sterling unlessrequested otherwise.


On 10 December 2003, Neil McCann retired as Chairman of the Group. We wish, on your behalf and on behalf ofeveryone in Fyffes, to pay tribute to his leadership, vision and skill, which has shaped the Group for over 50 years.He has led its development from a small Irish business to its present position as a global company with salesapproaching €2 billion. I am very happy to have been elected to succeed him and will make every effort tomaintain the same high standards.

We are very pleased to welcome Willie Walsh, Chief Executive of Aer Lingus Group plc, the Irish national airline,who joined the Board as a non-executive director on 1 January 2004. Willie has led Aer Lingus through a recentperiod of change and has succeeded in restoring it to a position of financial strength and profitability.

The 2003 financial year presented a number of challenges and opportunities. Continental Europe experienced aprolonged period of exceptionally hot weather, with record temperatures in many countries. This had a significantimpact on the consumption of, and the demand for, some of our tropical produce during that time. As aconsequence, in September, we indicated that we anticipated that the full year result would be significantly belowexpectations.

However, the market returned to normal rapidly in the Autumn and we achieved a strong finish to the year. As aresult, the Group has delivered a satisfactory performance in 2003, with profits and earnings marginally ahead oforiginal expectations at the beginning of the year. Adjusted profit before tax was up 5.1% at €71.6 million andadjusted fully diluted earnings per share amounted to €14.95 cent, up 5.5%.

Fyffes has a long track record of successful growth by acquisition. The two businesses that we purchased in 2002,Hortim in the Czech Republic and Interfrucht in Germany, both performed well in 2003. Your Board believes thatthe most effective way to enhance Shareholder value is to continue to invest the Group’s substantial resources innew acquisitions. Management devoted considerable time and energy in 2003 negotiating one large acquisitionthat terminated ultimately, at an advanced stage. However, we are confident that the Group remains well placedto expand its operations through further transactions.

Trading results in the early part of 2004 are in line with expectations. In addition, we have recently completed thedisposal of two property assets which will realise further exceptional profits for the Group, in 2004, in excess of €14million.

We believe that Fyffes has the best team of people in our industry and we would like to thank them for theirconstant dedication and hard work for the Group.

Carl McCannChairman2 April 2004

Chairman’s Statement

Carl McCann, Chairman


Financial Highlights | Fyffes |

2003 2002€ € Increase

Turnover 1,924.6m 1,836.5m 4.8%

EBITDA * 82.4m 77.4m 6.5%

Profit before tax ** 71.6m 68.1m 5.1%

Adjusted fully diluted earnings per share ** 14.95 cent 14.17 cent 5.5%

Full year dividend per share 5.72 cent 5.203 cent 9.9%

Shareholders’ funds 305.9m 293.4m 4.3%

* Before exceptional items** Before exceptional items and goodwill amortisation

Five Year Summary | Fyffes |

2003 2002 2001 2000* 1999€’000 €’000 €’000 €’000 €’000

Turnover 1,924,624 1,836,547 1,995,283 2,251,732 1,886,450

Adjusted profit before taxation ** 71,627 68,122 63,554 31,319 81,775

Profit on ordinary activities before taxation 71,798 63,074 57,653 7,563 82,586

Profit/(loss) on ordinary activities after taxation 62,624 50,404 43,610 (1,315) 64,539

Adjusted fully diluted earnings per share (cent)** 14.95 14.17 12.56 5.15 16.71

Dividend per ordinary share (cent) 5.72 5.203 4.730 4.300 4.300

Shareholders' funds 305,889 293,375 279,086 253,478 283,025

* fourteen month period to 31 December 2000** before exceptional items, e-commerce costs and goodwill amortisation


Directors and Secretary | Fyffes |

C.P. McCann Chairman, BBS, MA, FCA

Carl McCann was electedChairman on 10 December2003. He joined the Groupfrom KPMG in 1980. He wasFinance Director from 1983to 1998 and had been ViceChairman since 1988. He isa member of the RiskCommittee. He is an IrishGovernment nominee toInterTradeIreland, the Tradeand Development Bodyestablished by the North -South Ministerial Council ofIreland.

J.F. Gernon Group Finance Director,FCCA

Frank Gernon joined theGroup in 1973. He has heldvarious senior accountingand financial positions inthe Group, includingCompany Secretary andChief Financial Officer. Hewas appointed GroupFinance Director in 1998.He is Chairman of the RiskCommittee.

J.D. McCourt Non-Executive, MA, MBA

Declan McCourt joined theBoard on 2 April 2003 andwas appointed to thecompensation committeeon the same date. He ischief executive ofautomobile distributor, theOHM Group. He holds anM.A. in Economics andobtained an MBA from theHarvard Business School.He also qualified as abarrister. He is chairman ofthe Mater HospitalFoundation, a director ofthe Dublin DocklandsDevelopment Authority anda number of othercompanies.

W.M. WalshNon-Executive

Willie Walsh was co-optedto the Board on 1 January2004. He is Chief Executiveof Aer Lingus Group plc,the Irish national airline. Hejoined Aer Lingus in 1979 asa cadet pilot andsubsequently held anumber of seniormanagement positionsincluding Chief OperationsOfficer and Chief Executiveof its Futura subsidiary.

D.V. McCann Chief Executive, BCL

David McCann joined theGroup in 1986, havingpreviously practised as apartner in a leading Dublinlaw firm. He became GroupManaging Director in 1989with responsibility for theGroup’s operations. He wasappointed Chief Executivein 1995.

R.B. Hynes Non-Executive, BCL, AITI

Rose Hynes joined theBoard on 2 April 2003 andwas appointed to the auditcommittee on the samedate. She is a solicitor andholds a number of non-executive directorships.She was a non-executivedirector of Aer LingusGroup plc from 1997 to2002 and previously held anumber of senior executivepositions with GPA Groupplc and Debis AirFinance.


N.V. McCannExecutive

Neil McCann retired asChairman on 10 December2003. He joined thebusiness in the 1950’s andled it to stock marketflotation in 1981. Heoversaw the developmentof the Group to its currentposition as one of thelargest fresh producecompanies in Europe andamong the leadingoperators in the globalfresh produce industry.

D.J. Bergin Non-Executive,BA, LLB

Denis Bergin is Chairman ofthe audit committee and amember of thecompensation and riskcommittees. He is a formerpartner in the leading Irishlaw firm, Arthur Cox. He is adirector of several othercompanies.

G.B. Scanlan Non-Executive, FIB

Gerry Scanlan is a memberof the audit and riskcommittees, Chairman ofthe compensationcommittee and thenominated seniorindependent non-executivedirector. He is a formerGroup Chief Executive ofAllied Irish Banks plc and aformer Chairman of the IrishStock Exchange.

J.P. TolanCorporate DevelopmentDirector, B Comm, FCA

Jimmy Tolan joined Fyffes in1990 from KPMG. He hasmanaged the Group’sacquisitions team since 1993.He was appointed to theBoard as CorporateDevelopment Director in 1999.

Dr. P. F. deV. Clüver Non-Executive

Dr. Paul Clüver wasappointed to the Board in1999. He is Chairman ofCapespan Group HoldingsLimited in South Africa. Heis also Chairman of Unifruco,Vinfruco and Kromco inSouth Africa. He is a trusteeof the Worldwide Fund forNature SA.

P.T. Halpenny Company Secretary,BBS, FCA

Philip Halpenny joined theGroup in 1991 fromPricewaterhouseCoopers asSpecial Projects Manager. Hebecame Managing DirectorCorporate Affairs in 1996 andwas appointed CompanySecretary in 1998.


It takes a long time...


Corporate Social Responsibility

Fyffes is aware of the social and environmental issues associated with the products that it sources and sells,particularly as a large proportion of its fresh produce supplies originate in developing countries. TheGroup addresses this aspect of its operations in a number of ways:

Codes of Best PracticeThe Group has established Codes of Best Practice with which it requires its direct suppliers to comply.These are designed to reduce the impact of agricultural production on the environment and to ensure safeworking conditions and fair treatment for workers in compliance with internationally accepted labourstandards. Compliance with the Codes is monitored on a six-monthly basis and our internal reviewprocedures are subject to regular independent evaluation.

Ethical Trading InitiativeFyffes is a member of the UK government-sponsored Ethical Trading Initiative (ETI). The ETI is an allianceof companies, non-governmental organisations and labour representative bodies. Its purpose is topromote and improve the conditions of workers worldwide who produce products for sale in the UKmarket.

EUREP GAP AccreditationEarly in 2004, Fyffes announced that it had achieved EUREP GAP accreditation in respect of the majority ofthe banana and pineapple farms from which it takes direct supplies. Fyffes is a founder member of theEuropean Retailers Environmental Protocol (EUREP) established by major food retailers and their suppliersacross Europe to address consumer concerns about food safety, environmental protection and workerwelfare and to promote safe and sustainable agriculture. EUREP has adopted an extensive range ofguidelines on these matters, resulting in the EUREP Good Agricultural Practice (EUREP GAP). Thisstandard establishes the minimum requirements to be met by growers of fruit and vegetables that supplyEuropean retailers.

Through these and other social responsibility measures, Fyffes aims to provide the finest quality produce,produced under the safest working conditions, following the fairest labour practices and with the minimumenvironmental impact.


...to find and then deliver the best...


Procurement and Distribution

BananasThe Group sources its bananas from wide variety of sources including Central and Latin Americansuppliers, principally in Colombia, Costa Rica and Ecuador, and from EU and African, Caribbean and Pacific(ACP) producers in the Canary Islands, Belize and the Windward Islands. The Group typically operatesthrough long term supply contracts with the best local producers.

PineapplesThe development of the Group’s supersweet pineapple business is progressing satisfactorily. Fyffes is nowinvolved in growing these pineapples on a number of large farms in Central America on a joint venturebasis with local producers. Our investment to date in these projects amounts to US$15 million, which hasbeen matched by our partners. These projects are mainly in the pre-production stage and we expect theseactivities to contribute to profits by 2005.

General ProduceIn general, in the case of other produce, the Group acts as marketer and distributor for the majorinternational producer organisations. This enables Fyffes to provide its customers with the finest brands inthe industry, from both the Northern and Southern Hemisphere on a year round basis, including Cape,Outspan, Carmel, Enza, Jaffa, Maroc and Zespri.

Distribution NetworkOne of Fyffes’ key strengths is its first-class distribution network that ensures we can deliver produce to ourcustomers in the optimum condition. The Group operates from approximately 75 separate locations,comprising banana ripening centres, central distribution warehouses and traditional wholesale markets.These state-of-the-art facilities are strategically located near large centres of population and road networksto maximise the opportunities for market penetration.


...in no time at all


Financial and Management Strengths

Balance SheetFyffes has one of the strongest balance sheets in the international fresh produce sector. Shareholders’funds at 31 December 2003 amounted to almost €306 million, including net cash balances of €172 million.This leaves the Group ideally placed to continue to pursue the consolidation opportunities in the sectorand is tangible proof of the quality of the management of the business over many years.

Cash GenerationOne of the very attractive features of our business is that profits are quickly converted into cash. Duringthe past three years, the Group has generated free cash flow, after payment of dividends and tax, of over€150 million. Dividend payments to Shareholders and minority interests amounted to €63 million duringthat period. Over €90 million of the available free cash flow has been invested in new acquisitions and jointventures, including deferred acquisition payments, during the past three years. Management remains veryfocused on finding attractive acquisition opportunities in which to invest the Group’s cash resources.

Management and ControlOver many years, the Group has built up a management team with a range of skills, expertise andexperience that, we believe, surpasses any in the sector. Today, Fyffes is served by a dedicated andtalented workforce of almost 2,700 employees. Management has developed comprehensive and exactingfinancial, operating and reporting controls that are applied consistently across the Group in order tomanage the business efficiently and to protect the interests of all stakeholders. The Board of Fyffes iscommitted to the highest standards of corporate governance.


Review of Operations for 2003

Fyffes tropical produce divisionDuring 2003, we combined the Group’s banana and pineapple operations under one management structure.These products have similar, all year round, production and harvesting characteristics. They are grown in the samegeographic regions, mainly in Central America. Consequently, the shipping logistics are similar and can becombined efficiently.

Banana activitiesThe Group’s banana businesses produced an overall result in 2003 that was similar to the previous year. The resultincluded a first time contribution from Interfrucht, in Hamburg, in which we acquired our interest in December2002. We are very pleased with the performance of this business, which is working well with our ContinentalEuropean banana operations.

Market conditions were generally less favourable for bananas throughout 2003 compared to the previous year.This was particularly so during the third quarter when Europe experienced an extended period of exceptionalweather, with record high temperatures adversely affecting demand. However, trading returned to normal veryrapidly at the end of the heat wave and this division performed well in the final quarter of the year.

Supply costs, primarily the purchase price of the fruit and shipping and fuel costs, all of which are denominated inUS Dollars, were higher in 2003. The Group’s share of profits from its Geest Bananas joint venture was lower thanthe previous year largely due to a reduction in volumes from its supply source in the Windward Islands. Offsettingthese factors was an improvement in average exchange rates, as a result of the weakening of the US Dollar againstthe euro and Sterling during the year.

Following EU enlargement in May 2004, the banana import quota will be increased to accommodate the demandin the ten new member states. The amount of the increase has not yet been announced. However, the EU hasannounced certain safeguards in relation to the manner in which the quota increase will be administered. Thesesafeguards will help maintain traditional trade flows and we welcome them.

Pineapple activitiesThe new super sweet pineapple is a very exciting development in the fresh produce industry. The supply of thishugely popular fruit is still limited and it is a difficult product to grow. We have invested in a number of new farmsin Guatemala and Costa Rica on a joint venture basis with experienced local producers. Fyffes’ total investmentto date in these operations amounts to US$15 million.

There is a pre-production period of up to eighteen months before a new pineapple farm is fully developed. Ourcurrent operations are mainly in that phase and the Group’s share of the net operating costs of these joint venturesin 2003 amounted to €2 million, compared to €0.7 million in the previous year. These activities are expected tocontribute to operating profits by 2005.

Fyffes general produce divisionThe Group’s general produce division achieved a very good result in 2003, particularly in Continental Europe.Overall, volumes were up on the previous year and market conditions were generally favourable. In contrast toour banana activities, the heat wave on the Continent in the late summer was positive for other produce. Demandfor citrus fruits, in particular, was strong. In addition, drought conditions in some countries reduced the supply ofcertain products.

David McCann, Chief Executive


Hortim, based in the Czech Republic, delivered a much improved result in 2003. The Group acquired this businessin July 2002 and, very shortly afterwards, the Czech Republic suffered severe flooding, resulting in Hortim incurringlosses in the six months to 31 December 2002. Profits recovered well in 2003 and were in line with the Group’sexpectations at the time of acquisition.

The Group’s share of the result of our Capespan joint venture was lower than the previous year as that businessundertook a significant re-organisation of its activities, particularly in the UK.

On 1 May 2004 the EU will expand from fifteen to twenty-five member states. We already operate successfully inthe Czech Republic and Slovakia through the Hortim business. We also sell fresh produce into many of the otheracceding countries from our businesses in the existing fifteen member states, particularly from the strategic portsof Rotterdam and Hamburg. Enlargement can create opportunities for us to further expand our activities in theten new member states.

Total operating profitTotal operating profit for the year ended 31 December 2003, before exceptional items and goodwill amortisation,was €67.7 million compared to €63.3 million in the previous year. This is an increase of 6.8% and represents a verysatisfactory outcome. Operating margins increased slightly in the year, from 3.4% to 3.5%.

The following table analyses the geographic mix of our turnover and operating profits in 2003 and 2002. Thisshows that the Group has been earning an increasing portion of its profits in Continental Europe, growing to 73%in 2003. This is consistent with the concentration of the Group’s acquisition activities in recent years.

Ireland/UK Europe Total €‘m €‘m €‘m

2003 2002 2003 2002 2003 2002

Turnover 879.5 823.9 1,045.1 1,012.6 1,924.6 1,836.5

Operating profit* 18.2 26.8 49.5 36.5 67.7 63.3

* Operating profit is stated before goodwill amortisation and exceptional items

Finally, I would like to pay tribute to all the dedicated and hard-working people throughout the organisation fortheir contribution to the performance of the Group in 2003.

David McCannChief Executive2 April 2004


Financial Review for 2003

Summary profit and loss account

2003 2002 Change €’m €’m %

Turnover 1,924.6 1,836.5 +4.8

Total operating profit 67.7 63.3 +6.8Net interest income 3.9 4.8Adjusted profit before tax 71.6 68.1 +5.1Goodwill amortisation (3.8) (2.0)Exceptional items 4.0 (3.0)Profit before tax 71.8 63.1 +13.8Tax charge (9.2) (12.7)Minority interest charge (11.3) (6.4)Profit attributable to Shareholders 51.3 44.0 +16.7Dividends payable (19.8) (18.0)Retained profit for year 31.5 26.0

Adjusted fully diluted EPS – cent 14.95 14.17 +5.5

Turnover and operating profitAn analysis of the factors influencing the changes in turnover and operating profit is provided in the Review ofOperations for 2003 on pages 14 and 15.

Net interest incomeNet interest income was lower in 2003 than in the previous year due to the impact of lower interest rates. AverageSterling and euro interest rates fell by approximately 1% during 2003. Average net cash balances were similar inboth years.

Goodwill amortisationThe goodwill amortisation charge increased in 2003 as it was the first full year in which goodwill capitalised on theacquisitions of Hortim (July 2002) and Interfrucht (December 2002) was amortised.

Exceptional itemsExceptional items gave rise to a net profit in 2003 of €4 million made up as follows:

€’mProfit on disposal of various properties 7.6Profit on disposal of subsidiaries and joint ventures 0.6Group development costs (3.7)Share of joint ventures’ exceptional item (0.5)

Net exceptional profit 4.0

During 2003, the Group disposed of a number of properties including, in particular, its former head office inDublin, an office building in Milan and a depot in the UK Midlands. In aggregate, property disposals in the yeargenerated cash of €12.7 million and profits of €7.6 million.

Frank Gernon, Group Finance Director


Disposal and termination of subsidiaries and joint ventures during the year generated a small net profit amountingto €0.1 million. This included the recovery of €0.5 million in relation to a subsidiary sold in previous years. It alsoincluded a profit of €0.1 million in relation to the disposal of a small under-performing joint venture operation inthe Czech Republic which had been acquired as part of Hortim in 2002. The final element was the Group’s €0.5mshare of a loss in its Capespan joint venture relating to the closure of one of its operations in the UK as part of asignificant restructuring of its activities there.

During the second half of the year, the Group incurred external costs, including advisory and professional fees,amounting to €3.7 million attempting to complete one large acquisition which was terminated at an advancedstage. These costs are separately presented as a charge within operating profits in the statutory profit and lossaccount.

Profit before taxProfit before tax, excluding goodwill amortisation and exceptional items, amounted to €71.6 million in 2003, anincrease of 5.1%. Including the impact of goodwill amortisation and exceptional items, profit before tax amountedto €71.8 million, compared to €63.1 million in 2002, an increase of 13.8%. This represents a satisfactoryperformance for the year.

Tax chargeAs anticipated, the Group’s tax rate for the year, excluding the impact of exceptional items, fell to 12.8% in 2003reflecting reduced corporation tax charges in a number of locations in which the Group operates. The charge forthe year, excluding the impact of exceptional items, was €8.7 million compared to €12.7 million in 2002. Includingthe tax effect of exceptional items, the total charge for 2003 was €9.2 million.

Minority interest chargeThe total charge for minority interests in the year amounted to €11.3 million compared to €6.4 million in 2002.Excluding the impact of exceptional items, the charge amounted to €10.8 million compared to €6.1 million in theprevious year. The increase in this charge mainly reflects the impact of the acquisitions of Hortim and Interfruchtin the second half of 2002, which are owned 70% and 80% respectively by the Group. Strong performances by anumber of the Group’s other non-wholly owned businesses in Continental Europe and lower tax charges alsocontributed to the higher minority interest charge.

DividendThe Board is proposing to pay a final dividend for the year ended 31 December 2003 of €4.33 cent per share. Thetotal dividend per share for the year will amount to €5.72 cent, an increase of 9.9% on 2002. The total dividenddistributed to Shareholders for 2003 is €19.8 million compared to €18 million in 2002. The final dividend, whichwill be subject to Irish withholding tax rules, will be paid on 2 June 2004 to Shareholders on the register at 7 May2004. The total dividend for the year represents a return of 3.5%, based on the share price at 31 December 2003.The dividend cover was 2.6 times in 2003, up from 2.4 times in 2002.

Earnings per shareAdjusted fully diluted earnings per share, which excludes the impact of goodwill amortisation and exceptionalitems, amounted to €14.95 cent in 2003 compared to €14.17 cent in the previous year, an increase of 5.5%.


Summary balance sheet

2003 2002 2001€’m €’m €’m

Intangible assets (mainly goodwill) 47.3 51.6 9.5

Tangible assets 130.1 135.8 139.3

Financial assets (including goodwill) 43.3 48.0 57.3

Working capital 32.5 7.6 21.0

Deferred acquisition consideration (9.8) (13.5) (3.2)

Taxation (30.9) (29.0) (24.4)

Dividends (15.0) (13.6) (10.9)

Provision for liabilities and charges (14.5) (18.2) (21.6)

Net cash 172.4 166.8 150.6

Net assets 355.4 335.5 317.6

Shareholders’ funds 305.9 293.4 279.1

Minority interests 49.5 42.1 38.5

Net assets 355.4 335.5 317.6

Shareholders’ fundsShareholders’ funds at 31 December 2003 amounted to €305.9 million compared to €293.4 million at 31December 2002. This figure includes a €19.6 million reduction in the euro equivalent of the Group’s non-eurodenominated net assets, mainly due to the depreciation of Sterling against the euro since the previous year end.This and the other movements in Shareholders’ funds are analysed in the following table. Shareholders’ funds haveincreased by €52.4 million over the past three years even after dividend payments of €56.5 million and cumulativetranslation reductions amounting to €29.3 million during that period.

Financial Review for 2003 continued


Movement in Shareholders’ funds

2003 2002 2001€’m €’m €’m

At beginning of year 293.4 279.1 253.5

Profits after tax and minority interests 51.3 44.0 36.9

Dividends payable (19.8) (18.0) (18.7)

Translation of non-euro denominated net assets (19.6) (17.1) 7.4

Shares issued 0.6 0.2 -

Adjustments to historic goodwill - 5.2 -

At end of year 305.9 293.4 279.1

Return on capital employedReturn on capital employed, calculated by comparing EBITA to average capital employed, was 16% in 2003,almost 1% up on the previous year. Capital employed excludes net cash balances but includes historic goodwillwhich is set-off against reserves (amounting to approximately €217 million in 2003 and 2002). Excluding thisgoodwill from capital employed increases the return on average capital to almost 33% for the year.

Retirement benefitsThe Group operates a number of externally funded defined benefit and defined contribution pension schemes.While these continue to be accounted for under Statement of Standard Accounting Practice No. 24, thedisclosure requirements of Financial Reporting Standard No. 17 (FRS 17) in relation to the defined benefitschemes is set out in note 32 to the financial statements on pages 68 to 73. Under the measurement criteria inFRS 17, these schemes had a deficit (net of deferred tax) of €9.5 million at 31 December 2003. This deficit hasdecreased from €12.1 million at 31 December 2002, mainly as a result of the increase in the value of schemeassets due to the improvement in world equity markets during 2003.

Summary cash flow statementThe table on the following page shows the movement in the Group’s net cash balances over the last three years.

During that time, free cash flow generated by the Group amounted to €152.1 million, averaging more than €50million per annum. The Group spent in excess of €90 million investing in new subsidiaries and joint ventures inthe past three years, including deferred acquisition payments.

A significant portion of the Group’s cash balances have been accumulated in Sterling over the years. The euroequivalent of this element of the Group’s cash has been reduced by €14.3 million in 2003 and by €24.2 millionover the past three years due mainly to the strengthening of the euro against Sterling. Over the medium term,this translation adjustment has been broadly neutral.


Working capital balances were €26.4 million higher at 31 December 2003 than at the previous year end. Therewere a number of factors that contributed to this increase. Trade debtors were higher, partly as a result ofincreased sales in the final weeks of the year. Trade creditor balances were lower than at the previous year end,partly due to an acceleration during 2003 in the supplier payment arrangements in Interfrucht following itsacquisition by the Group in December 2002.

Summary cash flow statement

2003 2002 2001€’m €’m €’m

Total operating profit before exceptional items 63.8 61.3 58.3 Depreciation/amortisation 18.6 16.1 15.1

EBITDA excluding exceptional items 82.4 77.4 73.4

Exceptional items in operating profit (3.7) - -Deduct share of joint ventures operating profit (4.7) (10.9) (8.0)Dividends from joint ventures 6.1 3.1 9.2 Net interest income 6.8 7.5 1.8 Working capital movements (26.4) 4.3 12.7 Tax (paid)/recovered (10.2) (8.8) 1.6 Dividends paid (incl minorities) (21.6) (18.8) (22.7) Capital expenditure (9.3) (11.6) (16.5) Proceeds from disposal of tangible assets 12.7 19.7 6.6

Free cash flow 32.1 61.9 58.1

Purchase/investment in subsidiaries and joint ventures (11.5) (49.2) (20.9) Deferred consideration payments (1.5) (1.5) (7.2) Disposal of subsidiaries, joint ventures and investments 0.5 22.0 27.4 Translation adjustment (14.3) (13.4) 3.5 Other 0.3 (3.6) 2.2

Movement in net cash 5.6 16.2 63.1

Opening net cash 166.8 150.6 87.5

Closing net cash 172.4 166.8 150.6



Treasury activity and financial instrumentsThe Group finances its operations through a combination of retained profits and its own net cash resources. Thefinancial instruments that arise from this activity comprise bank deposits, bank loans and, from time to time, certainfinancial assets such as government securities, commercial paper and other trade investments. Other financialinstruments such as trade debtors and trade creditors arise directly from operations. In addition, the Group entersinto derivative instruments with a view to managing currency risk and, to a lesser extent, the interest rate riskarising from its operations.

The principal risks that arise from these financial instruments are foreign currency risk, interest rate risk and liquidityrisk. The Board has determined the policies for managing these risks as set out below and these remainedunchanged throughout the year. It is Group policy to manage these risks in a non-speculative manner.

While many of the Group’s operations are carried out in euro-zone economies, it also has significant activities inthe UK, Denmark and the Czech Republic. As a result, the Group’s balance sheet is exposed to currencyfluctuations, including in particular, GBP/EUR movements. While the net investment in overseas operations isinitially hedged by foreign currency borrowings, going forward these businesses generally fund their operationslocally. The Group also has large transactional currency exposures since a significant portion of its costs,particularly produce purchases and shipping, are denominated in US Dollars.

In general, the approach employed by Fyffes to managing its exposure to interest rate fluctuations is to maintainthe majority of its deposit and loan portfolios on floating rates. Rates are usually fixed for relatively short periodsin order to match funding requirements while being able to benefit from opportunities due to movements inlonger term rates. Derivative instruments, such as forward rate agreements and interest rate swaps, are used fromtime to time to further manage the exposure to interest rate fluctuations.

In relation to liquidity, the Group’s policy is to maintain the majority of its net cash balances on relatively short termmaturities to match its funding requirements and to reflect the prudent approach of the Board to cash balances.Net cash is invested with institutions of the highest credit rating, with limits on amounts held with individual banksor institutions at any one time. It is also the policy of the Group to have adequate committed un-drawn facilitiesavailable at all times to cover unanticipated financing requirements.

The numerical disclosures required under Financial Reporting Standard No. 13 in relation to the above risks areset out in Note 34 to the financial statements on pages 74 to 76.


Accounting policies and standardsThe Group remains committed to the adoption of best practice in the preparation of its financial statements.There were no changes in accounting policies during 2003 and no new accounting standards became applicable.An amendment to Financial Reporting Standard No. 5 was issued in November 2003 that set out the basicprinciples of revenue recognition. The application of this amended standard had no significant impact on theGroup, although the Group’s share of the turnover of one of its joint ventures would have been approximately €27million higher but for its introduction.

In 2005, the Group, like all other listed companies in the EU, will be required to prepare its consolidated financialstatements under International Financial Reporting Standards (IFRS). The 2004 comparative figures, in the 2005financial statements, will be restated under IFRS and consequently it will also be necessary to prepare an openingbalance sheet as at 1 January 2004 under IFRS.

The existing Irish and UK standard setter, the Accounting Standards Board (ASB), is in the process of aconvergence project, the aim of which is to move existing Irish/UK standards towards IFRS in advance of the 2005deadline. In addition, the IFRS standard setters are updating many of their standards in advance of thechangeover. Consequently, there is not yet available a stable platform of standards under which an opening IFRS2004 balance sheet could be prepared. It is expected that this process will be completed soon and thereafter theGroup will prepare its opening IFRS balance sheet. The Group is confident that it has the resources necessary tomanage the changeover to IFRS in an effective and efficient manner.

LitigationIn January 2002, Fyffes plc initiated proceedings in the High Court in Dublin against DCC plc, and others, inrelation to the sale of 31.2 million Fyffes ordinary shares in February 2000. A number of other parties includingEagle Star Life Assurance Company, Dreyfus Founders Funds, Hibernian Investment Managers and PutnamInvestment Managers, who purchased part of the block of Fyffes shares, have also instituted proceedings againstthose defendants.

These proceedings are primarily based on the plaintiffs’ contention that this sale constituted an unlawful dealingin shares contrary to the insider dealing provisions of the Irish Companies Act, 1990. Among other things, the Actprovides that parties who engage in insider dealing must account to the entity in whose shares the trading tookplace for any profit made. Accordingly, Fyffes is seeking, in its proceedings, the full profits made by thedefendants from this sale.

These proceedings are being actively pursued by Fyffes and affidavits of discovery have recently been exchanged.The proceedings are anticipated to move to trial phase before the end of 2004.

Post balance sheet eventsThe Group has recently announced that it has completed the disposal of its property joint venture in Dundalk,Ireland. The Group has also recently entered an agreement to sell its lands in Kenmare, in the south west ofIreland. These transactions are expected to generate, in aggregate, exceptional profits for the Group in 2004 inexcess of €14 million.

Frank GernonFinance Director2 April 2004



Contents Page

Directors and other information 24

Directors’ report 25

Corporate governance report 27

Compensation committee report 30

Statement of directors’ responsibilities 35

Independent auditors’ report 36

Statement of accounting policies 37

Group profit and loss account 40

Other statements 41

Group balance sheet 42

Company balance sheet 43

Group cash flow statement 44

Notes forming part of the financial statements 45

Principal subsidiaries, joint ventures and associates 77

Index to annual report 80


Fyffes plcCarl P. McCann ChairmanDavid V. McCann Chief ExecutiveNeil V. McCannJohn F. GernonJimmy P. TolanDenis J. BerginDr. Paul F. deV. ClüverRose B. HynesJ. Declan McCourtGerald B. ScanlanWilliam M. Walsh

Fyffes Group Ireland LimitedEugene J. Caulfield ChairmanMichael C. ClerkinFrank J. DavisDonal W. EarlsStephen J. McAdam Francis G. McKernan Charles D. ShaughnessyThomas G. ShieldsLaurence P. Swan

Fyffes Group LimitedA. John Ellis CBE ChairmanCoen Bos Rory P. ByrneEugene J. CaulfieldTimothy D. ChambersFrank J. DavisAndrew H. Denham-SmithDavid J. FlynnMichael J. KeySeamus MulvennaThomas G. Murphy

Secretary and registered officePhilip T. Halpenny1 Beresford StreetDublin 7

AuditorsKPMGChartered Accountants1 Stokes PlaceSt. Stephen’s GreenDublin 2

SolicitorsArthur Cox S.J. Berwin & Co.Arthur Cox Building 222 Grays Inn RoadEarlsfort Terrace London WC1X 8HBDublin 2

Niles Barton & Wilmer111 S. Calvert StreetSuite 1400 Baltimore Maryland 21202-6185U. S. A.

BankersAllied Irish Banks plc Barclays Bank PLC Bankcentre Pall MallBallsbridge London SW1Y 5AXDublin 4

StockbrokersJ. & E. Davy49 Dawson StreetDublin 2

RegistrarsComputershare Services (Ireland) LimitedHeron HouseCorrig RoadSandyford Industrial EstateDublin 18

Directors and other information

Directors’ report

The directors present their report to the Shareholders, together with the audited financial statements, for the year ended 31December 2003.

Principal activities and business reviewFyffes plc is a major distributor of fresh fruit and produce in Ireland, the UK and Continental Europe. A detailed business reviewis included on pages 2 to 22.

ProfitDetails of the profit and movements on the profit and loss account for the year ended 31 December 2003 are set out on pages40 and 41.

DividendsAn interim dividend of €1.39 cent (2002: €1.2646 cent) per €6 cent ordinary share was paid on 6 October 2003. It is proposed topay a final ordinary dividend of €4.33 cent (2002: €3.9384 cent) per ordinary share. The total ordinary dividend for the year willbe €5.72 cent (2002: €5.203 cent).

Future developmentsA review of future developments of the business is included on pages 2 to 22.

Directors and secretaryOn 2 April 2003, R.B. Hynes and J.D. McCourt were co-opted to the Board and were elected at the A.G.M on 30 May 2003. On1 January 2004, W.M. Walsh was co-opted to the Board. On 10 December 2003, N.V. McCann retired as Chairman of the Group,remaining on as an executive director, and was succeeded as Chairman by C.P. McCann.

In accordance with the Articles of Association of the company, D.J. Bergin, N.V. McCann, J.P. Tolan and Dr. P.F. deV. Clüver retirefrom the Board and, being eligible, offer themselves for re-election. W.M. Walsh offers himself for election at the Annual GeneralMeeting (AGM). None of these directors has a service contract with any Group company.

Directors’ and company secretary’s interestsDetails of the directors’ and company secretary’s share interests and interests in share options of the company and Groupcompanies are set out in the compensation committee report on pages 30 to 34.

Substantial holdingsThe directors have been notified of the following significant interests in the issued ordinary share capital of the company at 31December 2003:

Number ofOrdinary Shares Percentage

Balkan Investment Company and related parties 40,125,395 11.3%

The shares attributed to Balkan Investment Company and related parties include those shares owned by C.P. McCann, D.V.McCann and N.V. McCann as shown on page 33, who are directors of Balkan Investment Company. N.V. McCann is deemed,within the meaning of the Irish Companies Act, 1990, to have an interest in the shares owned by Balkan Investment Companyand related companies. Tarncott Company, a related party of Balkan Investment Company, owns 5.6% of the issued share capitalof the company.

In addition, Bank of Ireland Nominees Limited has notified the directors that it holds between 10% and 15% of the issued ordinaryshare capital of the company. Fidelity Investments and Marathon Asset Management have notified the directors that they holdbetween 5% and 10% of the issued share capital of the company. Bank of Ireland Nominees Limited, Fidelity Investments andMarathon Asset Management state that these shares are not beneficially owned by them. The Board has not been notified ofany other holdings of 3% or more of the issued ordinary share capital of the company.

Directors’ interests in contractsNone of the directors had a beneficial interest in any material contract to which the holding company or any subsidiaryundertaking was a party during the year.


Directors’ report continued

Treasury sharesAt 31 December 2003, the number of treasury shares held amounted to 9,021,610 ordinary €6 cent shares at a cost of €16,582,000(2002: 9,021,610 ordinary €6 cent shares at a cost of €16,582,000). These shares were delisted in 1999. These shares represent2.5% (2002: 2.5%) of the ordinary shares in issue at 31 December 2003.

Accounting recordsThe directors believe that they have complied with the requirements of section 202 of the Irish Companies Act, 1990 with regardto books of account by employing accounting personnel with appropriate expertise and by providing adequate resources to thefinancial function. The books of account of the company are maintained at The Ramparts, Dundalk, Ireland.

Political donationsDuring the year, the Group and company did not make any donations in Ireland disclosable in accordance with The Electoral Act,1997.

Health and safetyFyffes plc is committed to complying with the Safety, Health and Welfare at Work Act, 1989. Safety statements are prepared forall relevant companies in the Group to assist in ensuring a safe place and system of work.

AuditorsIn accordance with Section 160 (2) of the Irish Companies Act, 1963, the auditors, KPMG, Chartered Accountants have expressedtheir willingness to continue in office.

Subsidiary, joint venture and associated undertakingsInformation on the principal subsidiary, joint venture and associated undertakings is included on pages 77 to 79.

On behalf of the Board

C.P. McCann J.F. GernonChairman Finance Director 1 March 2004



Corporate governance report

Application of the Combined Code principlesFyffes plc is firmly committed to business integrity, high ethical values and professionalism in all its activities and operations. Asan essential part of this commitment, the Board endorses the highest standards in corporate governance. This report describeshow Fyffes plc applies the principles and provisions of the Combined Code on Corporate Governance of the London and IrishStock Exchanges ("the 1998 Combined Code"). A new Combined Code was published in 2003, incorporating revisions arisingfrom the recommendations of the Higgs and Smith reviews. The provisions of the new Code will be applicable for the Group’sreporting year ending 31 December 2004. In the meantime, the Board is addressing the new requirements to ensure that theGroup continues to comply with the highest standards in corporate governance.

Compliance with the 1998 Combined Code provisions The directors confirm that Fyffes plc has complied, throughout the year ended 31 December 2003, with the provisions of the 1998Combined Code except for the requirement that the audit committee should comprise at least three non-executive directors,the majority of whom should be independent. From 1 January 2003 until the appointment of R.B. Hynes on 2 April 2003, theaudit committee comprised two independent non-executive directors.

The Board of directorsFyffes plc is led by a strong and effective Board of directors (see biographical details set out on pages 6 and 7). The Boardcurrently consists of eleven directors. There were five executive directors throughout 2003. From 1 January 2003 to 1 April 2003,there were three non-executive directors. Following the appointment of R.B. Hynes and J.D. McCourt on 2 April 2003, there werefive non-executive directors from that date until 31 December 2003. W.M. Walsh was co-opted to the Board on 1 January 2004,increasing the total number of non-executive directors to six from that date.

Each of the executive directors has extensive knowledge of the fresh produce industry, in addition to wide-ranging business skillsand commercial acumen. All of the directors bring an objective judgement to bear on issues of strategy, performance, resources(including key appointments) and standards of conduct. Board members are selected because of their pertinent experience andappropriate training is available to them whenever necessary.

Effective governance is achieved by the separation of the roles of chairman and chief executive, as this division of responsibilitiesat the head of the company ensures a balance of power and authority.

The Board of Fyffes considers that, throughout the reporting period, all of its non-executive directors were independent. TheBoard believes all of its non-executive directors, who are appointed for specified terms of office, are independent in approachand that they bring an unfettered perspective to their advisory and monitoring roles.

The Board meets regularly throughout the year. There are six routinely scheduled Board meetings held annually, in addition towhich meetings are called as and when issues arising warrant. The Board and its committees are supplied with high quality, up-to-date information for review prior to each meeting to enable them to discharge their duties. The Board has identified andformally adopted a schedule of key matters that are reserved for its decision, with certain other matters delegated to Boardcommittees, the details of which are set out below. There is an agreed Board procedure enabling directors to take independentprofessional advice, as required, at the company's expense.

There is open communication between senior executive management and Board members.

Each Board member has access to the advice and services of the company secretary, who is responsible to the Board for ensuringthat appropriate procedures are followed and that applicable regulations are complied with. The appointment and removal ofthe company secretary is specifically reserved for the approval of the Board.

The Memorandum and Articles of Association require that one third of the Board must go forward, by rotation, for re-election atthe Annual General Meeting (AGM) each year, together with all new directors appointed since the previous AGM.

Corporate governance report continued

Details of the subcommittees appointed by the Board are as follows:

Audit committee This committee, which has comprised three non-executive directors since 2 April 2003, namely D.J. Bergin (Chairman), R.B. Hynesand G.B. Scanlan meets four times each year. It reviews internal control matters and the planning, scope and effectiveness ofinternal and external audit. It also reviews the draft interim and annual financial statements of the Group. The finance director,the head of internal audit and a representative of the external auditors normally attend its meetings. During the year, the auditcommittee formally reviewed the nature, extent and scope of non-audit services provided by the external auditors to thecompany and the Group.

Risk committeeThe terms of reference of the risk committee are to assess the key risks facing the Group and to assist the Board in fulfilling itsresponsibility as to the manner in which risk is recognised, assessed and managed on an on-going basis. The members of thecommittee, which meets at least annually, are D.J. Bergin, J.F. Gernon (Chairman), C.P. McCann, G.B. Scanlan and P.T. Halpenny,the company secretary. A senior member of executive management is dedicated to executing the process of risk managementunder the direction of the committee.

Compensation committeeThe compensation committee, which has responsibility for remuneration of the executive directors, has comprised three non-executive directors since 2 April 2003, namely D.J. Bergin, J.D. McCourt and G.B. Scanlan (Chairman). The detailedresponsibilities of the committee are set out in the compensation committee report on pages 30 to 34.

Nomination committeeThe Board has not established a separate nomination committee, believing that the entire Board of directors more appropriatelyundertakes to nominate candidates in addition to ratifying their appointment.

Internal controls and the management of risk The Board is ultimately responsible for the overall system of internal controls for the company and its subsidiaries and forreviewing the effectiveness of these controls. The system is designed to manage risks that may impede the achievement of theGroup's business objectives rather than to eliminate these risks. The internal controls system therefore provides reasonableassurance (but not absolute assurance) against material misstatement or loss.

Fyffes continues to operate a vigorous internal audit function under the direction of the audit committee. Both the internal auditand risk management functions facilitate each other and, together with divisional management, they provide the Board withdistinct sources of reasonable assurance as to the effectiveness of the system of internal controls that governs the Group's controlenvironment.

Risk management within Fyffes is co-ordinated by the risk committee which governs the process consistently throughout theGroup and reviews findings. The committee periodically advises the Board of its conclusions, enabling corrective initiatives tobe undertaken where deemed appropriate.

The key risks which might impair the business from achieving its objectives are identified and assessed by conducting detailedreviews with executive managers at divisional level. Divisional management thereafter becomes charged with the cost efficientmitigation of the risks within their areas of responsibility. Evaluation and suggestions for strategic change are reviewed by therisk committee, which in turn appraises the Board of its findings. In studying the report of the risk committee, the Board alsoconducts its own risk identification and assessment so that it becomes sufficiently aware of the principal threats to which theGroup may be exposed.

The Board, through its risk committee, has reviewed and updated the process for identifying and evaluating the significant risksaffecting the business and the policies and procedures by which these risks are managed effectively. The Board has embeddedthese structures and procedures throughout the Group and considers them to be a robust and efficient mechanism to create aculture of risk awareness at every level of management.

The directors regard the process of risk management as a positive medium for change, adding value in the interests ofShareholders by utilising sound and considered judgement, while simultaneously making the organisation alert to bestmanagement practices.


Corporate governance report continued

Communications with ShareholdersCommunications with Shareholders is given a high priority in Fyffes and there is regular dialogue with institutional Shareholdersas well as general presentations at the time of the release of the annual and interim results. In addition, the Group publishes itspreliminary and interim results presentations on the company’s website (www.fyffes.com).

There is a business presentation provided at the Group's AGM followed by a question and answer forum which offersShareholders the opportunity to question the Board. The AGM is valued by the Board as an occasion where individualShareholders' views and suggestions can be noted and considered by the directors.

Accountability and auditThe contents of the operating and financial reviews, the directors' report and financial statements (in addition to official companypress releases, Stock Exchange announcements and interim results issued during the period) have been reviewed in order toensure a balanced presentation, so that the company's position and prospects are properly appreciated by Shareholders.

A summary of directors' responsibilities in respect of the financial statements is given on page 35. The system of internal controlsand risk management established to safeguard Shareholders' investment and the company's assets is set out above. The auditcommittee, whose composition and functions are described above, has considered, in conjunction with the external auditors, theaccounting policies adopted in the financial statements and has examined the internal controls that have been established withinthe Group.

Environmental management, corporate responsibility and ethical trading initiativesIn 2001, the European Commission published recommendations governing the recognition, measurement and disclosure ofenvironmental issues in the annual reports of companies. Although the provisions of the recommendations are not binding onFyffes, in the conduct of its business across the world, the Group recognises its social responsibility and endorses the growingtrend towards environmental accountability.

The Group actively promotes best business practices and standards that seek to enhance the health, education and conditionsof workers and their families and to universally encourage the use of sustainable farming methods.

Going concernAfter making enquiries, the directors have a reasonable expectation that the company, and the Group as a whole, have adequateresources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the goingconcern basis in preparing the financial statements.

Senior non-executive directorG.B. Scanlan continued to act in the capacity of the senior independent non-executive director throughout the year.

Directors’ remunerationThe disclosures regarding directors' remuneration have been drawn up in accordance with the Listing Rules of the Irish StockExchange and are set out on pages 30 to 34.

Annual general meeting (AGM)Details of proxy voting will be announced in respect of each resolution at the forthcoming AGM. The company has arranged forthe Notice of the 2004 AGM and related papers to be sent to Shareholders at least 20 working days before the meeting. Therelevant papers were sent out in excess of 20 days before the 2003 AGM.


Compensation committee report

Throughout the year ended 31 December 2003, the company has complied with the provisions relating to directors’remuneration contained in the 1998 Combined Code, as applicable to Irish Listed companies.

Composition and terms of reference of compensation committeeThe compensation committee is comprised solely of non-executive directors, namely G.B. Scanlan (Chairman), D.J. Bergin and,since 2 April 2003, J.D. McCourt, with no financial interest other than as Shareholders in the matters to be decided, no potentialconflicts of interest arising from cross-directorships and no day to day involvement in the running of the business.

The terms of reference of the compensation committee are:

● to determine the executive directors’ remuneration and to approve the grant of share options;● to determine the service agreements (if any), remuneration packages and employment conditions of the executive directors;● if necessary to determine termination payments to be made to executive directors;● to report to Shareholders on directors’ remuneration in accordance with the requirements of the Irish Stock Exchange; and● where appropriate, to recommend to Shareholders the establishment of short and long-term incentive schemes, to set

appropriate targets for such schemes, to define the basis of participation in such schemes and to determine the grant ofawards under such schemes.

The Chairman of Fyffes plc is consulted about the remuneration of other executive directors and the compensation committeeis authorised to obtain access to professional advice, if deemed appropriate.

The remuneration of the non-executive directors is approved by the Board.

Remuneration policyThe Group’s policy on executive directors’ remuneration recognises that employment and remuneration conditions for seniorexecutives must properly reward and motivate them to perform in the best interests of the Shareholders.

The elements of the remuneration package for executive directors are basic salary and benefits, annual incentive bonus, pensionsand participation in the company’s share option scheme and profit sharing scheme. It is the policy to grant options to keymanagement to encourage identification with Shareholders’ interests. Employees are encouraged to hold shares for a furtherperiod after exercise of the options subject to the need to finance any cost of acquisition and associated tax liability.

Executive directors’ basic salary and benefitsBasic salary of executive directors is reviewed annually with regard to personal performance, Group performance andcompetitive market practice.

Performance related bonusThe Group pays performance related annual bonuses to executive directors. The level earned in any one year depends on anassessment of individual performance and the overall performance of the Group.

PensionsPensions for executive directors are calculated on basic salary only and provide for two-thirds of salary for full service (40 years)at retirement.

Short term incentive planThe Group established a Short Term Incentive Plan ("STIP") for executive directors for the financial year ended 31 December2003. Under the terms of this STIP, an incentive award may be payable as non pensionable remuneration subject to theachievement of a one year performance target based on the increase in total Shareholder return (as measured by the annualcapital appreciation plus dividend), benchmarked against a peer group of public companies and is payable within 30 days of thecompensation committee determining that the performance target had been achieved. No payments accrued under the termsof this STIP in respect of the financial year ended 31 December 2003. A similar scheme (with no less stringent performancetargets) has been established for the financial year ended 31 December 2004.


Compensation committee report continued

Employee share option schemeIt is the Group’s policy to grant share options as an incentive to enhance performance and to encourage employee shareownership in the company. A new employee share option scheme was approved by Shareholders in April 1997 to replace theprevious share option scheme, which had expired after ten years of operation. The percentage of share capital which can beissued under the employee share option scheme and individual limits comply with institutional guidelines. The amount ofordinary share capital over which options may be granted in any ten year period is limited to 5% of the aggregate of the issuedordinary share capital. At 31 December 2003, options had been granted but not yet exercised over 13,368,950 (2002: 14,667,695)ordinary shares at prices ranging from €0.85 to €2.70 or 3.8% of the issued ordinary share capital (2002: 4.1%).

Employee profit sharing schemeThe company has an employee profit sharing scheme which appropriated shares at market value for directors and otheremployees of the Group during the year. There were no shares issued to executive directors during the year. On 8 January 2004,30,288 ordinary €6 cent shares were issued to executive directors and the company secretary under this scheme. Non executivedirectors do not participate in this scheme. Such shares held by the directors at the year end are included in the directors’ shareinterests disclosed on page 33.

Service contractsNo service contracts exist between the company or any of the Group’s subsidiary undertakings and any executive or non-executive directors.

Directors’ interests in contractsThere were no contracts at any stage during the year between the company or any of the Group’s subsidiary undertakings andany director of the company.

Directors’ remunerationAggregate directors’ remuneration charged in the profit and loss account in the year was as follows:

Executive directors Non-executive directors Total

2003 2002 2003 2002 2003 2002€’000 €’000 €’000 €’000 €’000 €’000

Basic salaries 1,714 1,682 - - 1,714 1,682Fees - - 193 120 193 120Performance bonuses 637 601 - - 637 601Benefits 80 80 - - 80 80Pension contributions 205 202 - - 205 202

2,636 2,565 193 120 2,829 2,685Consultancy fees paidto past directors 87 130 - - 87 130

Total remuneration 2,723 2,695 193 120 2,916 2,815

Number of directors(average) 5 5 4.5 3 9.5 8



Directors’ remuneration (continued)This is analysed by individual director, in accordance with the rules of the Irish Stock Exchange, as follows:

2003 2002Other Other

Salary Benefits & Pension Total Salary Benefits & Pension Totalor Fees Bonus Consultancy Contributions 2003 or fees Bonus Consultancy Contributions 2002€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000

Executives

C.P. McCann 429 173 21 63 686 419 165 21 62 667D.V. McCann 429 173 21 63 686 419 165 21 62 667N.V. McCann 317 - 21 - 338 317 - 21 - 338J.F. Gernon 279 136 17 41 473 273 125 17 40 455J.P. Tolan 260 155 - 38 453 254 146 - 38 438

1,714 637 80 205 2,636 1,682 601 80 202 2,565

Non-executives

D.J. Bergin 50 - - - 50 45 - - - 45Dr. P.F. deV. Clüver 33 - - - 33 30 - - - 30R.B. Hynes 30 - - - 30 - - - - -J.D. McCourt 30 - - - 30 - - - - -G.B. Scanlan 50 - - - 50 45 - - - 45

193 - - - 193 120 - - - 120

Payments topast directors - - 87 - 87 - - 130 - 130

Total 1,907 637 167 205 2,916 1,802 601 210 202 2,815

Other benefits for executive directors relate entirely to motor expenses.

Pension entitlements of executive directorsThe pension benefits attributable to the executive directors during the year and the total accrued pensions at the end of the yearwere as follows:

Increase in accrued Transfer Total accrued Total accruedpension during value of pension at pension at

year increase 31 December 2003 31 December 2002(a) (b) (c)

€’000 €’000 €’000 €’000

C.P. McCann 8 89 173 160D.V. McCann 7 69 124 113J.F. Gernon 5 59 139 130J.P. Tolan 5 38 58 51

Total 25 255 494 454

(a) The increase in accrued pension during the year excluding inflation.(b) The transfer value of the increase in accrued pension has been calculated based on actuarial advice. These transfer values

do not represent sums paid or due, but are the amounts that the pension scheme would transfer to another pension schemein relation to the benefits accrued in the year, in the event of a member of the scheme leaving service.

(c) This represents the pension which would be paid annually, on normal retirement date, based on service to the end of thisaccounting period.



Directors’ and company secretary’s share interestsThe interests of the directors in the issued share capital of the company are shown below.

At 31 December 2003 At 31 December 2002Beneficial number Beneficial number*

Fyffes plc Fyffes plcOrdinary shares Ordinary shares

of €6 cent of €6 cent

C.P. McCann 1,506,024 1,506,024D.V. McCann 580,811 580,811N.V. McCann 800,226 800,226 J.F. Gernon 334,285 334,285J.P. Tolan 68,105 68,105D.J. Bergin 30,949 30,949Dr. P.F. deV. Clüver - -R.B. Hynes - -J.D. McCourt - -G.B. Scanlan 10,000 10,000

*or at date of appointment, if later.

N.V. McCann is deemed, within the meaning of the Irish Companies Act, 1990 to have an interest in an additional 37,238,334Fyffes plc ordinary €6 cent shares (2002: 37,238,334) held by Balkan Investment Company and related companies.

At 31 December 2003, the company secretary, P.T. Halpenny, held 167,443 Fyffes plc ordinary €6 cent shares (2002: 167,443).

On 8 January 2004, the following directors and the company secretary purchased ordinary €6 cent shares under the company’semployee profit sharing scheme at a price of €1.677:

C.P. McCann 7,572D.V. McCann 7,572J.F. Gernon 7,572P.T. Halpenny* 7,572

* Company secretary

On 8 March 2004, R.B. Hynes and J.D. McCourt each purchased 50,000 Fyffes plc ordinary €6 cent shares, in the market, at a priceof €1.59 each. Otherwise, there have been no movements in the share interests of the directors or company secretary betweenthe year end and 2 April 2004.

The market price of the shares at 31 December 2003 was €1.65 and the range during the year was €1.16 to €1.67.



Directors’ and company secretary’s interests in share optionsInformation on directors’ and company secretary’s share options to subscribe for ordinary shares of the company is set out below.

Options held at Options held at Date from31 December 31 December Exercise which Expiry

2002 Granted Exercised Lapsed 2003 price exercisable date

C.P. McCann 950,000 - - - 950,000 €1.17 22/09/2000 21/09/2007265,000 - - - 265,000 €2.30 12/01/2002 11/01/2009200,000 - - - 200,000 €0.85 27/03/2004 25/03/2011

D.V. McCann 950,000 - - - 950,000 €1.17 22/09/2000 21/09/2007265,000 - - - 265,000 €2.30 12/01/2002 11/01/2009200,000 - - - 200,000 €0.85 27/03/2004 25/03/2011

J.F. Gernon 35,000 - - 35,000 - €1.02 12/02/1993 11/02/200325,000 - - 25,000 - €1.32 27/07/1993 26/07/2003

350,000 - - - 350,000 €1.17 22/09/2000 21/09/2007100,000 - - - 100,000 €2.30 12/01/2002 11/01/2009130,000 - - - 130,000 €0.85 27/03/2004 25/03/2011

J.P. Tolan 20,000 - - 20,000 - €1.02 12/02/1993 11/02/200325,000 - - 25,000 - €1.32 27/07/1993 26/07/2003

300,000 - - - 300,000 €1.17 22/09/2000 21/09/2007131,250 - - 131,250 €2.30 12/01/2002 11/01/2009130,000 - - - 130,000 €0.85 27/03/2004 25/03/2011

P.T. Halpenny* 75,000 - - 75,000 - €1.32 27/07/1993 26/07/2003250,000 - - - 250,000 €1.17 22/09/2000 21/09/200750,000 - - - 50,000 €2.70 25/01/2003 24/01/2010

100,000 - - - 100,000 €0.85 27/03/2004 25/03/2011

*Company secretary

Options granted on and subsequent to 22 September 1997 are only exercisable when the earnings per share figure, in respectof the third or any subsequent accounting period after the end of the basis year (i.e. accounting period preceding the date ofthe grant), is greater than the earnings per share figure for the basis year by a percentage which is not less than (on a year onyear basis) the annual percentage increase in the consumer price index plus 2% compounded during that period.

On 16 March 2004, the executive directors and company secretary were issued the following share options at an exercise priceof €1.56:

C.P. McCann 125,000D.V. McCann 125,000J.F. Gernon 75,000J.P. Tolan 75,000P.T. Halpenny* 50,000

*Company secretary

These share options are excerisable from 17 March 2007 and expire on 15 March 2014.


Statement of directors’ responsibilities

Irish company law requires the directors to prepare financial statements for each financial year which, in accordance withapplicable Irish law and accounting standards, give a true and fair view of the state of affairs of the Group and the company andof the profit for that period. In preparing those financial statements, the directors are required to:

● select suitable accounting policies and then apply them consistently;

● make judgements and estimates that are reasonable and prudent;

● prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continuein business.

The directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time thefinancial position of the Group and the company and to enable them to ensure that the financial statements comply with the IrishCompanies Acts, 1963 to 2001 and all Regulations to be construed as one with those Acts. They have general responsibility fortaking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud andother irregularities.

On behalf of the Board

C.P. McCann J.F. GernonChairman Finance Director


Independent auditors’ report to the members of Fyffes plcWe have audited the financial statements on pages 37 to 79.

This report is made solely to the company’s members, as a body, in accordance with section 193 of the Irish Companies Act, 1990.Our audit work has been undertaken so that we might state to the company’s members those matters we are required to stateto them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company and the company’s members as a body for our audit work, for this report or forthe opinions we have formed.

Respective responsibilities of directors and auditors in relation to the annual reportThe directors are responsible for preparing the annual report. As described on page 35, this includes responsibility for preparingthe financial statements in accordance with applicable Irish laws and accounting standards. Our responsibilities, as independentauditors, are established in Ireland by statute, the Auditing Practices Board, the Listing Rules of the Irish Stock Exchange and byour profession’s ethical guidance.

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared inaccordance with the Irish Companies Acts. As also required by the Acts, we state whether we have obtained all the informationand explanations we require for our audit, whether the company’s balance sheet is in agreement with the books of account andreport to you our opinion as to whether:

● the company has kept proper books of account;● the directors’ report is consistent with the financial statements;● at the balance sheet date a financial situation existed that may require the company to hold an extraordinary general

meeting, on the grounds that the net assets of the company, as shown in the financial statements, are less than half of itsshare capital.

We also report to you if, in our opinion, information specified by law or the Listing Rules regarding directors’ remuneration andtransactions with the company is not disclosed.

We review whether the statement on pages 27 to 29 reflects the company’s compliance with the seven provisions of the 1998Combined Code specified for our review by the Listing Rules, and we report if it does not. We are not required to form anopinion on the effectiveness of the company’s corporate governance procedures or its risk and control procedures.

We read the other information contained in the annual report, including the corporate governance statement, and considerwhether it is consistent with the audited financial statements. We consider the implications for our report if we become awareof any apparent misstatements or material inconsistencies with the financial statements.

Basis of opinionWe conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes anassessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, andof whether the accounting policies are appropriate to the Group’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary inorder to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from materialmisstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overalladequacy of the presentation of information in the financial statements.

OpinionIn our opinion, the financial statements give a true and fair view of the state of affairs of the Group and the company as at 31December 2003 and of the profit of the Group for the year then ended and have been properly prepared in accordance with theIrish Companies Acts, 1963 to 2001 and all Regulations to be construed as one with those Acts.

We have obtained all the information and explanations we considered necessary for the purposes of our audit. In our opinion,proper books of account have been kept by the company. The balance sheet of the company is in agreement with the books ofaccount.

In our opinion, the information given in the directors’ report on pages 25 and 26 is consistent with the financial statements.

The net assets of the company, as stated in the balance sheet on page 43, are more than half of the amount of its called up sharecapital and, in our opinion, on that basis there did not exist at 31 December 2003 a financial situation which, under Section 40(1)of the Companies (Amendment) Act, 1983, would require the convening of an extraordinary general meeting of the company.

Chartered AccountantsRegistered Auditors 1 March 2004



Statement of accounting policies for the year ended 31 December 2003

A summary of the Group’s principal accounting policies, all of which have been applied consistently throughout the year and inthe preceding year, are set out below. The financial statements are presented in euro.

Basis of accountingThe financial statements are prepared in accordance with generally accepted accounting principles under the historical costconvention, as modified to include the revaluation of certain of the Group's tangible fixed assets, and comply with financialreporting standards applicable in the Republic of Ireland and the United Kingdom.

Basis of consolidationThe Group financial statements consolidate the financial statements of the company and all of its subsidiary undertakingsprepared to the end of the financial year.

The results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss accountfrom the date of acquisition or up to the date of the disposal. Upon the acquisition of a business, fair values are attributed tothe identifiable net assets acquired. Goodwill arising on acquisitions is dealt with as set out below. Certain undertakings in whichthe Group has a 50% voting shareholding are treated as subsidiary undertakings where the directors are of the opinion that theGroup actually exercises dominant influence over the financial and operating policies of that undertaking. The Group also treatscertain limited partnerships, where there are elements of shared control, as subsidiary undertakings where it has a participatinginterest of more than 50% and those undertakings are managed on a unified basis with other subsidiary undertakings.

Where Group companies are parties to contractual arrangements where all significant matters of operational and financial policyare predetermined, the Group financial statements, in accordance with FRS 9 Associates and joint ventures, include thetransactions, assets, liabilities and cash flows of the Group companies measured according to the terms of the agreementgoverning the contractual arrangements. Where the relevant contractual arrangements involve a Group company entering intotransactions on behalf of another party to the agreement, the adjustments necessary to exclude the effect of those transactionsfrom the Group financial statements are made on consolidation in accordance with FRS 2 Accounting for subsidiary undertakings.

Joint venture undertakingsJoint venture undertakings (joint ventures) are those undertakings over which the Group exercises control jointly with one ormore parties. The Group’s share of the profits less losses of joint ventures is included in the consolidated profit and loss account.The Group’s interest in their net assets is included as a fixed asset investment in the consolidated balance sheet using the grossequity method at an amount representing the Group’s share of the fair value of the net assets at acquisition plus the Group’sshare of post acquisition retained profits or losses. Goodwill arising on the acquisition of joint ventures is dealt with as statedbelow.

The amounts included in the consolidated financial statements in respect of the post acquisition profits of joint ventures aretaken from their latest financial statements prepared up to their respective financial year ends together with managementaccounts for the intervening periods to 31 December 2003.

Associated undertakingsAssociated undertakings (associates) are those undertakings in which the Group has a participating interest in the equity capitaland over which it is able to exercise significant influence.

The Group’s share of the profits less losses of associates is included in the consolidated profit and loss account. The Group’sinterest in their net assets is included as a fixed asset investment in the consolidated balance sheet using the equity method atan amount representing the Group’s share of the fair value of the net assets at acquisition plus the Group’s share of postacquisition retained profits or losses. Goodwill arising on the acquisition of associates is dealt with as stated below.

The amounts included in the consolidated financial statements in respect of the post acquisition profits of associates are takenfrom their latest financial statements prepared up to their respective financial year ends together with management accounts forthe intervening periods to 31 December 2003.

Statement of accounting policies for the year ended 31 December 2003 continued

GoodwillPurchased goodwill arising on the acquisition of a business represents the excess of the acquisition cost over the fair value of theidentifiable net assets when they were acquired. Subsequent changes to the amount of deferred contingent consideration isadjusted for against goodwill. Any excess of the aggregate of the fair value of the identifiable net assets acquired over the fairvalue of the acquisition cost is negative goodwill.

Purchased goodwill arising on acquisitions prior to 1 November 1998 was eliminated against reserves on acquisition andnegative goodwill arising on such acquisitions was credited directly to reserves as a matter of accounting policy. On the disposalof a business, any goodwill so treated is included in determining the profit or loss on sale of the business.

Purchased goodwill arising on acquisitions after 1 November 1998 is capitalised in the balance sheet and amortised over theestimated economic life of the goodwill.

Negative goodwill arising on such acquisitions is also capitalised and shown separately in the balance sheet and credited to theprofit and loss account to match the periods in which the acquired non-monetary assets are recovered. Any excess over the non-monetary assets acquired is credited to the profit and loss account in the periods benefited.

Goodwill arising on the acquisition of subsidiaries is shown separately in the balance sheet in intangible assets. Goodwill arisingon the acquisition of joint ventures and associates is included in the carrying amount of the investments.

TurnoverTurnover represents the fair value of goods, excluding value added tax, delivered to or collected by third party customers in theaccounting period.

TaxationCurrent tax, including Irish corporation tax and foreign tax, is provided on the Group’s taxable profits, at amounts expected tobe paid using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.Provision is made at the rates expected to apply when the timing differences reverse. Timing differences are differences betweenthe Group’s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses intaxable profits in periods different from those in which they are recognised in the financial statements.

A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence,it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of theunderlying timing differences can be deducted.

Tangible fixed assets and depreciationTangible fixed assets are stated at historical cost less accumulated depreciation except for certain items of land and buildingswhich were carried at revalued amount less accumulated depreciation. The Group availed of the transitional provisions of FRS15 Tangible fixed assets in continuing to carry such assets at their previously revalued amount. All such revalued assets were soldin 2003. Depreciation is calculated to write off the cost or valuation of tangible fixed assets, other than freehold land, on astraight line basis, by reference to the following estimated useful lives:-

Freehold properties 30 - 50 yearsLeasehold properties Over the lesser of 40 years or the unexpired portion of the leasePlant and equipment 5 - 20 yearsMotor vehicles 5 years

Provision is also made for any impairments of tangible fixed assets.

Profits on sale of propertiesProfits on sale of properties are recognised on the completion of sale and receipt of cash.

StocksStocks are valued at the lower of cost and estimated net realisable value. Cost is determined by reference to invoice price,together with the cost of delivery where appropriate. Net realisable value is the estimated proceeds of sale less all costs to beincurred in marketing, selling and distribution.


Statement of accounting policies for the year ended 31 December 2003 continued

Leased assetsAssets held under leasing arrangements that transfer substantially all the risks and rewards of ownership (finance leases) to theGroup are included in the balance sheet as tangible fixed assets at cost less accumulated depreciation and the capital elementof future rentals is treated as a liability. The interest element is charged to the profit and loss account over the period of thefinance lease in proportion to the balance of capital repayments outstanding.

Rentals in respect of all other leases are charged to the profit and loss account as incurred.

PensionsThe Group makes contributions to independently administered pension funds. The regular cost of providing benefits is chargedto operating profit over the service lives of the members of the scheme on the basis of a constant percentage of pensionablepay. Variations from regular costs, arising from periodic valuations of the principal schemes, are allocated to operating profitover the expected remaining service lives of the members.

Foreign currenciesResults of subsidiaries, joint ventures and associates denominated in currencies other than the euro are translated at the averagerates of exchange which applied during the year. Balance sheet figures of such subsidiaries, joint ventures and associates aretranslated at the rates of exchange ruling at the balance sheet date. Exchange differences arising on the restatement of openingnet investments and results for the year to the balance sheet rate are taken directly to retained profits and reflected in thestatement of total recognised gains and losses.

Exchange gains or losses on foreign currency borrowings and long term intercompany loans, used to finance or provide a hedgeagainst Group equity investments in overseas subsidiaries, joint ventures and associates, are offset against retained profits to theextent of the exchange differences arising on the net investments.

Transactions denominated in foreign currencies are recorded at the rates of exchange ruling at the date of the transactions or atcontracted rates where matching contracts exist. All resulting monetary assets and liabilities denominated in foreign currenciesare translated into euro at the rates of exchange ruling at the balance sheet date or at the contracted rate. The resulting profitsor losses are dealt with in the profit and loss account. At the year end the euro/Sterling exchange rate was Stg70.46p (2002:Stg64.98p). The average euro/Sterling rate during the year was Stg69.20p (2002: Stg62.60p).

Derivative financial instrumentsThe Group is a party to derivative financial instruments (derivatives), primarily to manage its exposure to fluctuations in foreigncurrency exchange rates and interest rates.

Gains and losses on derivative contracts used to hedge foreign exchange exposures arising on future planned transactions arerecognised in the profit and loss account when the hedged transactions occur.

Interest rate swap agreements and similar contracts are used to manage interest rate exposures. Amounts payable or receivablein respect of these derivatives are recognised as adjustments to interest expense over the period of the contracts.

Liquid resourcesLiquid resources include current asset investments in government gilts, commercial paper, term deposits and monies held inescrow.

Financial fixed assets

CompanyInvestments in subsidiaries, joint ventures and associated undertakings and other investments are stated at cost less anyprovision required for permanent diminutions in value. Income from financial fixed assets is recognised in the profit and lossaccount in the period in which it is receivable.

GroupOther investments are stated at cost less provisions required for impairment in value, if any, with the exception of governmentsecurities which are marked to market.



Group profit and loss account for the year ended 31 December 2003

Notes Pre - Exceptionalexceptional items Total Total

2003 2003 2003 2002€’000 €’000 €’000 €’000

Turnover including Group share of joint ventures and associates 4 1,924,624 - 1,924,624 1,836,547Less: Share of joint ventures’ turnover (306,131) - (306,131) (323,070)Less: Share of associates’ turnover (12,692) - (12,692) (17,865)

Group turnover – continuing operations 1,605,801 - 1,605,801 1,495,612Cost of sales (1,341,962) - (1,341,962) (1,247,651)

Gross profit – continuing operations 263,839 - 263,839 247,961Net operating expenses – continuing operations 5 (200,883) (3,717) (204,600) (195,598)Goodwill amortisation - subsidiaries 14 (2,850) - (2,850) (1,059)

Group operating profit – continuing operations 60,106 (3,717) 56,389 51,304

Share of joint ventures’ goodwill amortisation (1,004) - (1,004) (1,004)Share of joint ventures’ operating profit 4,319 - 4,319 9,846Share of associates’ operating profit 380 - 380 1,129

Operating profit - Group and its shareof joint ventures and associates 4 63,801 (3,717) 60,084 61,275

Exceptional items - GroupProfit on disposal of fixed assets 8 - 7,775 7,775 8,066Profit/(loss) on disposal and termination of subsidiaries 8 - 511 511 (11,051)

- 8,286 8,286 (2,985)

Share of joint ventures’ exceptional items 8 - (544) (544) -

Profit on ordinary activities before interest 63,801 4,025 67,826 58,290

Net interest receivable and income from financial assets - Group 6 4,594 - 4,594 6,014Share of net interest payable - joint ventures 6 (611) - (611) (1,202)Share of net interest payable - associates 6 (11) - (11) (28)

Profit on ordinary activities before taxation 7 67,773 4,025 71,798 63,074

Tax on profit on ordinary activities 9 (8,684) (490) (9,174) (12,670)

Profit on ordinary activities after taxation 59,089 3,535 62,624 50,404

Minority interests - equity 29 (10,812) (497) (11,309) (6,423)

Profit for the financial year attributable to Group shareholders 48,277 3,038 51,315 43,981

Dividends - on equity shares 10- paid (4,808) - (4,808) (4,367)- proposed/provided (14,982) - (14,982) (13,606)

(19,790) - (19,790) (17,973)

Retained profit for the financial year- Group and its share of joint ventures and associates 28,487 3,038 31,525 26,008

€ cent € centEarnings per ordinary share

- basic 11 14.84 12.73

- fully diluted 11 14.71 12.64

Adjusted fully diluted earnings per share 11 14.95 14.17


Other statements for the year ended 31 December 2003

Movements on profit and loss account Notes 2003 2002€’000 €’000

At beginning of year 105,961 91,841Retained profit for the financial year 31,525 26,008Revaluation reserve realised on disposal 27 503 -Goodwill:

Adjustments to prior period acquisitions (24) (126)On disposal of subsidiary undertakings - 5,340

Currency translation adjustment (19,572) (17,102)

At end of year 118,393 105,961

Group statement of total recognised gains and losses

Profit for the financial year 51,315 43,981Currency translation adjustment (19,572) (17,102)

Total recognised gains and losses for the year 31,743 26,879

Note of historical cost profits and losses

There is no material difference between the historical cost profit on ordinary activities before taxation and the reported profit onordinary activities before taxation in either year.

Reconciliation of movements in Shareholders' funds2003 2002

€’000 €’000Total recognised gains and losses for the year 31,743 26,879Transactions with shareholders:

Dividends on equity shares 10 (19,790) (17,973)Shares issued 585 169

Net goodwill adjustment 28 (24) 5,214

Net increase in shareholders' funds 12,514 14,289

At beginning of year 293,375 279,086

At end of year 305,889 293,375


Group balance sheet at 31 December 2003

Notes 2003 2002€’000 €’000

Fixed assetsIntangible assets 13 2,319 2,433Goodwill 14 44,965 49,139Tangible assets 15 130,068 135,817Financial assets: 16

Joint ventures:Share of gross assets (including goodwill) 112,967 134,019Share of gross liabilities (including minority interests) (87,781) (109,706)

25,186 24,313Associates 389 372Other investments 17,742 23,313

220,669 235,387

Current assetsStocks 17 36,739 37,484Debtors 18 190,669 183,633Cash at bank and in hand 359,594 384,198

587,002 605,315Creditors: amounts falling due within one year (including convertible debt) 19 (283,949) (417,477)

Net current assets 303,053 187,838

Total assets less current liabilities 523,722 423,225

Creditors: amounts falling due after more than one year (including convertible debt) 20 (153,808) (69,503)

Provisions for liabilities and charges 23 (14,467) (18,183)

4 355,447 335,539

Capital and reservesCalled-up share capital 24 21,302 21,269Share premium 25 94,508 93,956Other reserves 26 71,686 71,686Revaluation reserve 27 - 503Profit and loss account 28 118,393 105,961

Shareholders’ funds - equity 305,889 293,375

Minority interests (including non-equity interests) 29 49,558 42,164

355,447 335,539



Company balance sheet at 31 December 2003

Notes 2003 2002€’000 €’000

Fixed assetsTangible assets 15 879 921Financial assets 16 331,775 310,129

332,654 311,050

Current assetsDebtors 18 132,827 138,282Cash at bank and in hand 12,124 967

144,951 139,249Creditors: amounts falling due within one year (including convertible debt) 19 (166,068) (172,636)

Net current (liabilities) (21,117) (33,387)

Total assets less current liabilities 311,537 277,663

Creditors: amounts falling due after more than one year (including convertible debt) 20 (60,401) (34,230)

251,136 243,433

Capital and reservesCalled-up share capital 24 21,302 21,269Share premium 25 94,508 93,956Other reserves 26 71,686 71,686Revaluation reserve 27 - 503Profit and loss account 28 63,640 56,019

Shareholders' funds - equity 251,136 243,433



Group cash flow statement for the year ended 31 December 2003

Notes 2003 2002€’000 €’000

Cash inflow from operating activities 1 47,039 68,158Dividends received from joint ventures 5,967 2,514Dividends received from associates 210 558Returns on investments and servicing of finance 2 3,610 4,026Corporation tax paid (10,171) (8,814)Capital expenditure and financial investments 2 3,413 23,327Acquisitions and disposals 2 (12,487) (40,389)Equity dividends paid (18,414) (15,313)

Cash inflow before management of liquid resources and financing 19,167 34,067

Financing 2 (28,217) (6,387)(Increase) in liquid resources 2 (3,256) (45,389)

(Decrease) in cash for the year (12,306) (17,709)

Reconciliation of net cash flow to movement in net funds

(Decrease) in cash for the year 3 (12,306) (17,709)Increase in liquid resources 3 3,256 45,389Net decrease in debt 3 28,923 6,875

Changes in net funds resulting from cash flows 19,873 34,555

New finance leases 3 (42) (2,330)Reclassification from trade investments - 659Loans acquired with subsidiary undertakings - (2,801)Finance leases acquired with subsidiary undertakings - (618)Loans disposed of with subsidiary undertakings - 123Translation adjustment 3 (14,255) (13,417)

Movement in net funds in the year 5,576 16,171Net funds at beginning of year 166,797 150,626

Net funds at end of year 3 172,373 166,797


Notes for the year ended 31 December 2003

1 Reconciliation of operating profit to net cash inflow from operating activities

2003 2002€’000 €’000

Group operating profit 56,389 51,304Depreciation of tangible fixed assets 14,749 14,014Amortisation of goodwill 2,850 1,059(Increase)/decrease in operating debtors (10,126) 13,174(Decrease) in operating creditors (15,880) (4,979)(Increase) in stocks (422) (3,850)Amortisation of grants (521) (571)Provision for liabilities and charges - (1,993)

Cash inflow from operating activities 47,039 68,158

2 Analysis of cash flows for headings netted in the cash flow statement

Notes 2003 2002€’000 €’000

Returns on investments and servicing of financeInterest received and income received on financial assets 15,253 16,649Interest paid (8,336) (9,063)Dividends paid to minority interests 29 (3,184) (3,460)Interest element of finance lease payments (123) (100)

Net cash inflow from returns on investments and servicing of finance 3,610 4,026

Capital expenditure and financial investmentsExpenditure on tangible fixed assets (9,346) (11,583)Proceeds on sale of tangible fixed assets 12,708 19,748Proceeds on sale of investments and government securities - 15,028Purchase of investments and government securities 16 (75) -Grants received 126 134

Net cash inflow from capital expenditure and financial investments 3,413 23,327

Acquisitions and disposalsPurchase of subsidiary undertakings 30 (5,704) (45,408)Net cash acquired with subsidiary undertakings 30 1,512 3,367Investment in and purchase of joint ventures 16 (7,339) (3,749)Payments in respect of deferred consideration (1,467) (1,458)Disposal/termination of subsidiary undertakings 30 511 8,773Net cash disposed - (4,511)Disposal of associates/joint ventures - 2,597

Net cash (outflow) from acquisitions and disposals (12,487) (40,389)



2 Analysis of cash flows for headings netted in the cash flow statement (continued)

Notes 2003 2002€’000 €’000

Management of liquid resources(Increase) in bank deposits (3,256) (45,389)

FinancingLoans due within one year - drawn down 6,152 62,398

- repaid (33,672) (67,113)Loans due after one year - drawn down 925 22,050

- repaid (931) (23,620)Capital element of finance lease payments (1,397) (590)

Net (decrease) in debt (28,923) (6,875)

Issue of share capital (including premium thereon) 585 169Investment by minority shareholder in subsidiary undertaking 29 121 319

Net cash (outflow) from financing (28,217) (6,387)

3 Analysis of net funds

At 31 At 31December Cash Non-cash Translation December

2002 Flow Movement Adjustment 2003€’000 €’000 €’000 €’000 €’000

Cash in hand, at bank 47,511 (6,966) - (797) 39,748Overdrafts (14,551) (5,340) - 178 (19,713)

(12,306)

Bank deposits 336,687 3,256 - (20,097) 319,846

Loans due within one year (148,238) 27,520 91,736 4,232 (24,750)Loans due after one year (51,702) 6 (91,736) 2,200 (141,232)Finance leases (2,910) 1,397 (42) 29 (1,526)

28,923

Net funds 166,797 19,873 (42) (14,255) 172,373

A number of the Group’s bank facilities were renewed during the year with extended maturity dates.



4 Segmental analysis

Turnover, operating profit and net assets are analysed as follows by business activity and geographical market.

Total - Group including its share of joint ventures and associates

By activityOperating Net Operating Net

Turnover Profit Assets Turnover Profit Assets2003 2003 2003 2002 2002 2002

€’000 €’000 €’000 €’000 €’000 €’000

Continuing operationsProduce 1,784,649 62,789 164,577 1,693,428 57,356 163,124Other activities 139,975 4,866 18,497 143,119 5,982 5,618

Sub total 1,924,624 67,655 183,074 1,836,547 63,338 168,742

Exceptional items - (3,717) - - - -Goodwill amortisation - (3,854) - - (2,063) -

1,924,624 60,084 183,074 1,836,547 61,275 168,742

Net cash 172,373 166,797

355,447 335,539

Total - Group including its share of joint ventures and associates

Geographical Market- by origin

Operating Net Operating NetTurnover Profit Assets Turnover Profit Assets

2003 2003 2003 2002 2002 2002€’000 €’000 €’000 €’000 €’000 €’000

Continuing operationsIreland, UK and other 879,471 18,167 109,327 823,888 26,804 134,908Continental Europe 1,045,153 49,488 73,747 1,012,659 36,534 33,834

Sub total 1,924,624 67,655 183,074 1,836,547 63,338 168,742

Exceptional items - (3,717) - - - -Goodwill amortisation - (3,854) - - (2,063) -

1,924,624 60,084 183,074 1,836,547 61,275 168,742

Net cash 172,373 166,797

355,447 335,539

The geographical analysis of turnover by destination is not materially different.

A segmental analysis of turnover, operating profit and net assets by geographical area and business activity is not providedseparately for the Group or for its joint ventures and associates as, in the opinion of the directors, the disclosure of suchinformation would be seriously prejudicial to the interests of the Group, its joint ventures and associates.



5 Net operating expenses2003 2002

€’000 €’000Group - continuing operationsDistribution costs 144,282 134,891Administrative expenses 60,381 63,102Other operating (income) (3,780) (2,395)Exceptional items 3,717 -

Net operating expenses 204,600 195,598

Net operating expenses include a charge of €3,717,000 relating to external costs and advisory fees incurred in the second half of the year on Group acquisition activity.

6 Net interest receivable and income from financial assets 2003 2002€’000 €’000

GroupInterest receivable 12,755 14,768Interest payable on bank loans and overdrafts repayable within five years (7,452) (8,298)Interest payable on other loans (197) (406)Finance lease interest (119) (100)Other interest costs (395) (265)

Net interest receivable 4,592 5,699Income from financial assets - unlisted - 12Income from financial assets - listed 2 303

4,594 6,014

Joint venturesInterest receivable 582 643Interest payable on bank loans and overdrafts repayable within five years (367) (438)Interest payable on bank loans repayable after more than five years (54) (67)Finance lease interest (761) (1,320)Other interest payable (11) (20)

(611) (1,202)

Associates Interest payable on bank loans and overdrafts repayable within five years (11) (28)

(11) (28)



7 Profit on ordinary activities before taxation 2003 2002€’000 €’000

This is arrived at after charging/(crediting):

Depreciation of tangible fixed assets 14,749 14,014

Auditors' remuneration 992 1,142Auditors’ remuneration for non audit services 1,192 896

Operating lease rentals: Plant and machinery 1,171 1,146Other 5,779 3,143

(Profit) on disposal of tangible fixed assets (7,643) (8,784)

Amortisation of grants (521) (571)

(Profit)/loss on disposal or termination of operations of subsidiary undertakings (511) 11,051

(Profit)/loss on disposal or termination of activities of joint venture and associates (132) 719

Amortisation of capitalised goodwill- subsidiaries 2,850 1,059- joint ventures 1,004 1,004

Details of directors’ remuneration, pension entitlements and interests in share options are set out in the compensationcommittee report on pages 30 to 34.

During the prior year, the Group wrote back an accrual of €2.1 million which was no longer required, following the settlementof liabilities in relation to certain discontinued activities.

The Group increased its provision for doubtful debts in the prior year by €2.0 million, due mainly to continuing expansionof the Group. In addition, the Group incurred a number of once-off charges in certain subsidiaries, mainly in ContinentalEurope, during the prior year which amounted to €1.3 million.



8 Exceptional items 2003 2002€’000 €’000

Profit on disposal of tangible fixed assets 7,896 9,601(Loss) on disposal of tangible fixed assets (253) (817)

Net profit on disposal of tangible fixed assets 7,643 8,784

Profit/(loss) on disposal or termination of activities of joint ventures and associates 132 (719)

Profit on disposal of trade investments - 1

Net profit on disposal of fixed assets 7,775 8,066

Profit on disposal or termination of subsidiary undertakings 511 -(Loss) on disposal or termination of subsidiary undertakings - (11,051)

Net profit/(loss) on disposal or termination of subsidiary undertakings 511 (11,051)

Share of joint ventures’ exceptional item (544) -

Net exceptional profit/(loss) 7,742 (2,985)

During the year, the Group disposed of a number of non-core properties in Ireland, the UK and Continental Europe whichrealised a net profit before tax of €7,643,000. The Group also disposed of a small joint venture undertaking in the CzechRepublic which gave rise to a profit on disposal of €132,000. Towards the end of the year, the Group recovered a further€511,000 in relation to a subsidiary sold in 2001.

The Group’s share of losses in its Capespan joint venture, in relation to the termination of certain activities of its UKsubsidiaries, amounted to €544,000 during the year.

During the previous year, the Group disposed of a number of non-core properties, mainly in Ireland and the UK which realiseda net profit of €8,784,000. The Group also sold its interest in an associated undertaking which was involved in port operationsin Central America which realised a loss of €719,000. In addition, the Group sold or terminated the activities of a number ofsubsidiary undertakings giving rise to net losses of €11,051,000. The loss on disposal in 2002 included a charge of €5,340,000in relation to the write off of goodwill previously eliminated against reserves and €1,881,000 of capitalised goodwill on twoof the subsidiaries sold in that year. In addition, the Group incurred costs of €2,185,000 in relation to the termination ofcertain banana procurement activities in the Americas and terminated the activities of a number of other small operations.

The exceptional items gave rise to a tax charge of €490,000 in 2003 (2002: €Nil)..



9 Tax on profit on ordinary activities 2003 2002€’000 €’000

Current tax:

Ireland Current tax on profit for the year 3,681 2,637Adjustment in respect of prior year (18) 61

3,663 2,698

OverseasCurrent tax on profit for the year 9,362 10,978Adjustment in respect of prior year (1,140) 186

8,222 11,164

Total corporation tax 11,885 13,862Deferred tax (credit) (3,542) (1,069)

Group tax charge 8,343 12,793Share of tax charge/(credit) of joint ventures 688 (416)Share of tax charge of associates 143 293

9,174 12,670

Reconciliation of current corporation tax charge

Profit on ordinary activities before tax 71,798 63,074

Profit on ordinary activities multiplied by the standard rate of tax of 12.5% (2002: 16%) 8,975 10,092

Effects of:Expenses not deductible for tax purposes 446 532Depreciation in excess of capital allowances (6) 337Utilisation of tax losses forward in period/unutilised tax losses 834 (808)Other timing differences 31 905Tax incentive reliefs - (1,116)Tax effect of profits on associates and joint ventures (369) (1,559)Difference in tax rates 3,132 5,232Adjustments to prior years (1,158) 247

Current tax charge of the Group for the year 11,885 13,862



9 Tax on profit on ordinary activities (continued)

Factors that may affect future tax charges

In accordance with FRS 19, no deferred tax has been provided where taxable gains have been rolled over into replacementassets in the UK. Such tax would become payable only if the replacement assets were sold without further replacement. Thetotal amount unprovided in respect of rolled over gains is €2,996,000 (2002: €2,996,000). At present, it is not envisaged thatany tax will become payable in the foreseeable future.

No deferred tax asset is recognised in relation to certain losses incurred by the Group on the grounds that there is insufficientevidence that the assets will be recoverable. In the event that sufficient profits are generated in the relevant jurisdictions inthe future, these assets may be recovered. The estimated unrecognised deferred tax asset at 31 December 2003 is€8,931,000 (2002: €6,173,000).

No deferred tax is recognised on the unremitted earning of overseas subsidiaries, associates and joint ventures as nocommitment has been made for the remittance of earnings. As the earnings are continually reinvested by the Group, no taxis expected to be payable on them in the foreseeable future.

No deferred tax asset is recognised in relation to certain capital losses incurred by the Group on the grounds that there isinsufficient evidence that the assets will be recoverable. In the event that plans are put in place for the sale of assets andthe resulting gains will be sheltered by these losses, the assets may be recovered. The estimated unrecognised deferred taxasset at 31 December 2003 is €4,493,000 (2002: €4,975,000).

10 Dividends - on equity shares 2003 2002€’000 €’000

Ordinary shares of €6 cent - equity

Interim dividend €1.39 cent (2002: €1.2646 cent) paid on 6 October 2003 4,808 4,367Proposed final dividend €4.33 cent (2002: €3.9384 cent) 14,982 13,606

19,790 17,973

At 31 December 2003, the company and subsidiary companies held 9,021,610 (2002: 9,021,610) ordinary shares of €6 cent inFyffes plc. The rights to dividends on these shares have been waived.



11 Earnings per ordinary share

The calculations of earnings per share are based on the following:2003 2002

€’000 €’000Basic

Profit after taxation and minority interests 51,315 43,981

Number Numberof shares of shares

(’000) (’000)

Weighted average number of ordinary shares outstanding 354,907 354,401Deduct weighted average number of own shares acquired (9,022) (9,022)

Weighted average number of ordinary shares for basic earnings per share calculation 345,885 345,379

€ cent € cent

Basic earnings per share 14.84 12.73

€’000 €’000Fully diluted

Profit after taxation and minority interests 51,315 43,981

Number Numberof shares of shares

(’000) (’000)

Weighted average number of ordinary shares outstanding 354,907 354,401Deduct weighted average number of own shares acquired (9,022) (9,022)Weighted average number of share options with a dilutive effect 2,876 2,629

Weighted average number of shares for calculation of fully diluted earnings per share 348,761 348,008

€ cent € cent

Fully diluted earnings per share 14.71 12.64



11 Earnings per ordinary share (continued)2003 2002

Earnings Per share Earnings Per shareAdjusted fully diluted earnings per share €’000 € cent €’000 € cent

Basic earnings per share calculation 51,315 14.84 43,981 12.73Adjustments(Profit) on disposal of tangible fixed assets and investments (7,643) (2.20) (8,785) (2.54)(Profit)/loss on disposal/termination of associates and joint ventures (132) (0.04) 719 0.20(Profit)/loss on disposal of subsidiaries (511) (0.15) 11,051 3.20Tax effect of exceptional items 490 0.14 - -Goodwill amortisation 3,854 1.11 2,063 0.60Share of joint ventures’ exceptional item 544 0.16 - -Minority share of exceptional items 497 0.14 281 0.08Exceptional items – operating profit 3,717 1.07 - -

Impact on earnings of share options with a dilutive effect - (0.12) - (0.10)

Adjusted fully diluted earnings per share 52,131 14.95 49,310 14.17

Adjusted fully diluted earnings per share is calculated to adjust for the impact of exceptional items, goodwill amortisationand the impact on earnings of share options with a dilutive effect.

12 Employees

The average weekly number of employees, including executive directors, during the year analysed by category, was asfollows:

2003 2002Number Number

Production 397 475Sales and distribution 1,704 1,534Administration 594 527

2,695 2,536

The aggregate payroll costs of these employees were as follows: €’000 €’000

Wages and salaries 86,013 83,699Social welfare costs 9,625 8,842Other pension costs 4,035 4,298

99,673 96,839



13 Intangible assets

GroupTrademark 2003 2002

€’000 €’000

At beginning of year 2,433 2,532Translation adjustment (114) (99)

At end of year 2,319 2,433

This represents the cost of acquiring the worldwide rights to the Fyffes trademark. The trademark is reviewed for impairmentat each balance sheet date. In the opinion of the directors, the value of the trademark is not less than cost and it does nothave a finite useful life.

14 Goodwill

Group €’000

CostAt beginning of year 50,751Acquisitions in year (note 30) 1,426Adjustments to prior year acquisitions (note 30) (2,101)Disposals in year (note 30) (556)Exchange adjustment (16)Reclassification to tangible fixed assets (note 15) (83)

At end of year 49,421

AmortisationAt beginning of year 1,612Amortised in year 2,850Exchange adjustment (6)


Net book valueAt end of year 44,965

At beginning of year 49,139

Positive goodwill is amortised over the expected useful economic life of the business acquired. This amortisation periodranges from 5 to 20 years, depending on the nature of the business acquired.



15 Tangible assets Freeholdand leasehold Plant and Motor

Group properties equipment vehicles Total€’000 €’000 €’000 €’000

Cost or valuationAt beginning of year 99,019 82,573 7,995 189,587Additions 951 5,677 2,200 8,828Acquisition of business 8,455 12 42 8,509Disposals (5,363) (3,863) (2,226) (11,452)Translation adjustment (2,835) (2,059) (393) (5,287)Reclassification (307) 271 119 83

At end of year 99,920 82,611 7,737 190,268

DepreciationAt beginning of year 10,106 42,675 989 53,770Charge for year 3,101 9,010 2,638 14,749Disposals (1,831) (3,003) (1,553) (6,387)Translation adjustment (491) (1,261) (180) (1,932)Reclassification 130 (158) 28 -

At end of year 11,015 47,263 1,922 60,200

Net book valueAt end of year 88,905 35,348 5,815 130,068

At beginning of year 88,913 39,898 7,006 135,817

The depreciable element of freehold and leasehold properties amounts to €77,655,000 (2002: €83,034,000).

The net book value of tangible assets includes an amount of €2,340,000 (2002: €3,040,000) in respect of assets held underfinance leases. Depreciation charged during the year on such assets amounted to €802,000 (2002: €545,000).

The freehold and leasehold properties in the United Kingdom and Ireland were valued on an open market basis for theirexisting use at 31 October 1988 and 1989 by professional valuers. During 2003, all such tangible fixed assets have been sold.All tangible fixed assets acquired since that date are recorded at cost less accumulated depreciation. In accordance withFRS 15 Tangible Fixed Assets the Group had opted to retain the net book value of those assets rather than restate them tohistorical cost. At 31 December 2003, all assets are held at cost less accumulated depreciation.

Plant andCompany equipment

€’000CostAt beginning of year 1,830Additions 199


DepreciationAt beginning of year 909Charge for year 241


Net book valueAt end of year 879

At beginning of year 921



16 Financial assetsInterest in Interest in

joint ventures associatesGroup €’000 €’000

At beginning of year 24,313 372Translation adjustment (585) 1Increased investment in year 4,814 -Loans advanced in year 2,525 -Disposals of business (note 30) (583) -Retained (losses)/profits less dividends paid (3,491) 16Goodwill amortised (1,004) -Joint venture undertaking becoming a subsidiary (note 30) (803) -

At end of year 25,186 389

The interest in joint ventures and associates at 31 December 2003 represents the Group’s share of the net assets of thoseundertakings including goodwill arising on acquisitions made since 1 November 1998 and loans advanced by other Groupentities.

The investment in joint ventures as stated above comprises of equity investments of €20,451,000 (2002: €19,820,000) andloans advanced by Group companies to those joint ventures of €4,735,000 (2002: €4,493,000).

The following additional disclosures are given in relation to the Group’s share of the net assets of its joint ventures;

2003 2002€’000 €’000

Fixed assets 39,934 42,700Current assets 58,962 76,529Liabilities due within one year (54,209) (67,032)Liabilities due after one year (33,085) (42,149)Minority interest (487) (525)Elimination of fair value of Group share of assets previously owned* (1,831) (2,051)

9,284 7,472

Goodwill arising on acquisition net of amortisation 15,902 16,841

25,186 24,313

* In 2001, the Group disposed of certain produce operations in the UK to its joint venture undertaking, CapespanInternational Holdings Limited. 50% of the profit on disposal, €2,198,000, was eliminated on consolidation, being the fairvalue of the Group’s assets previously owned, which is amortised in line with the related goodwill on accquisition inCapespan.

The Group’s share of finance lease obligations included in the financial statements of two of its joint venture companies,Windward Isles Banana Company Holdings (Jersey) Limited and Windward Isles Banana Company (UK) Limited are set outbelow. Other bank borrowings in these joint venture companies were fully repaid in 2001.

2003 2002€’000 €’000

Finance lease obligations:- due within one year 2,565 2,586- due after one year 22,452 30,343

Further details on these obligations are set out in note 31(c)(i).



16 Financial assets (continued)

Other investments

Group €’000

At beginning of year 23,313Translation adjustment (379)Additions 75Trade investment becoming a subsidiary (note 30) (5,267)


In the opinion of the directors, the value of the investments is not less than the carrying value.

Shares in Shares in subsidiary associates and

undertakings joint ventures Investments TotalCompany €’000 €’000 €’000 €’000

At beginning of year 266,482 26,263 17,384 310,129Additions in year 15,011 6,755 - 21,766Translation adjustment - (120) - (120)

At end of year 281,493 32,898 17,384 331,775

In the opinion of the directors, the value of the investments is not less than the carrying value.

The principal subsidiaries, joint ventures and associates are set out on pages 77 to 79.

17 Stocks2003 2002

Group €’000 €’000

Goods for resale 35,857 35,948Consumable stores 882 1,536

36,739 37,484

The replacement cost of stocks does not differ materially from the amount stated above.



18 Debtors

Group 2003 2002€’000 €’000

Due within one year:Trade debtors 155,526 148,784Other debtors 17,934 17,163Prepayments and accrued income 5,504 10,629Amounts due from joint ventures (trading) 3,088 2,483Amounts due from joint ventures (non-trading) 6,184 3,041

188,236 182,100Due after one year:Other debtors 2,395 1,495Amounts due from joint ventures (non-trading) 38 38

190,669 183,633

Company

Amounts due from subsidiary undertakings 130,775 136,378Amounts due from joint ventures (non-trading) 1,901 1,726Other debtors 151 178

132,827 138,282

19 Creditors: amounts falling due within one year2003 2002

Group €’000 €’000

Trade creditors 126,840 136,396Bank loans and overdrafts (note 21) 44,463 162,789Accruals and deferred income 31,108 38,683Other creditors 22,141 24,389Corporation tax 30,945 29,013Proposed dividends 14,982 13,606Deferred acquisition consideration (note 20) 1,670 1,831Obligations under finance leases (note 22) 947 1,042Irish income tax and social welfare 1,514 1,597Irish value added tax 1,270 1,674Other tax 3,538 5,070Grants 704 599Amounts due to joint ventures (non-trading) 3,527 788Convertible redeemable loan notes 300 -

283,949 417,477



19 Creditors: amounts falling due within one year (continued)2003 2002

Company €’000 €’0000

Bank loans and overdrafts (note 21) 17,799 61,448Amounts due to subsidiary undertakings 128,413 94,907Proposed dividends 14,982 13,606Accruals and deferred income 2,738 2,673Corporation tax 3 2Other creditors 90 -Amounts due to joint ventures (non-trading) 1,743 -Convertible redeemable loan notes 300 -

166,068 172,636

The loan notes are redeemable on six months notice in writing by the holder. Otherwise, these loan notes are convertible atvarious dates in 2004.

20 Creditors: amounts falling due after more than one year2003 2002

Group €’000 €’000

Bank loans (note 21) 141,232 51,702Deferred acquisition consideration 8,133 11,688Obligations under finance leases (note 22) 579 1,868Other creditors 1,588 1,130Grants 2,276 2,775Convertible redeemable loan notes - 340

153,808 69,503

Company

Bank loans (note 21) 60,401 33,890Convertible redeemable loan notes - 340

60,401 34,230

Total deferred acquisition consideration, due within and after more than one year, amounts to €9,803,000 (2002: €13,519,000)and represents full provision for the amounts expected to be payable. Deferred acquisition consideration and othercreditors are due entirely within five years. See also note 30.



21 Bank loans and overdrafts

Group 2003 2002€’000 €’000

Repayable:Within one year 44,463 162,789After one year but within two years 68,685 6,976After two years but within five years 69,733 40,608After five years 2,814 4,118

185,695 214,491

At 31 December 2003, bank loans and overdrafts of €11,786,000 (2002: €14,573,000) were secured on the assets of subsidiaryundertakings.

Company

Repayable:Within one year 17,799 61,448After one year but within two years 30,025 2,402After two years but within five years 30,376 31,488

78,200 95,338

22 Lease obligations

Finance leases

Group 2003 2002€’000 €’000

Due:Within one year 947 1,042After one year but within five years 579 1,868

1,526 2,910

Operating leases

The annual non-cancellable commitments under operating leases are as follows:

Land & buildings OtherGroup 2003 2002 2003 2002

€’000 €’000 €’000 €’000Operating leases which expire:Within one year 1,916 1,674 586 870After one year but within five years 1,648 1,721 842 433After five years 1,920 1,882 - -

5,484 5,277 1,428 1,303



23 Provisions for liabilities and chargesDeferredtaxation

Group €’000

At beginning of year 18,183(Credited) in year (3,542)Translation adjustment (174)


Deferred taxation liabilities represents provision for timing differences as follows:2003 2002

€’000 €’000Group

Accelerated capital allowances 2,441 4,850Other timing differences 12,757 13,900

15,198 18,750

Group

Deferred tax assets 731 567Deferred tax liabilities (15,198) (18,750)

Net deferred tax liabilities (14,467) (18,183)

Discussion in respect of the Group’s deferred tax assets and liabilities is set out in note 9.

24 Called-up share capitalNumber

of shares 2003 2002Group and company (‘000) €’000 €’000

Authorised

Ordinary shares of €6 cent each 500,000 30,000 30,000

Allotted, called-up and fully paid

Ordinary shares of €6 cent each 355,028 21,302 21,269

Movements during the year Numberof shares

(‘000) €’000Ordinary shares of €6 cent each

At beginning of year 354,484 21,269Share options exercised 544 33

At end of year 355,028 21,302



24 Called-up share capital (continued)

At 31 December 2003, the total number of shares acquired by the company and subsidiary companies in Fyffes plc amountedto 9,021,610 (2002: 9,021,610) ordinary shares of €6 cent each. These shares have been included in the total number ofordinary shares of 355,028,000 at 31 December 2003. The rights to dividends on these shares have been waived and theyare not included in the calculation of earnings per share. All of these shares have been delisted by the company.

Under the company’s share option scheme, options have been granted to employees to purchase ordinary shares in thecompany at prices ranging from €0.85 to €2.70. The aggregate nominal value of the options granted but not exercised shallnot exceed 5% of the nominal value of the total allotted ordinary share capital of the company.

During the year, 544,000 options were exercised for a total consideration of €585,000. No options were granted and 755,000options lapsed in the year. At 31 December 2003, options over 13,369,000 (2002: 14,668,000) ordinary shares had not yetbeen exercised.

25 Share premium account

Group and company 2003 2002€’000 €’000

At beginning of year 93,956 93,796Share options exercised 552 160

At end of year 94,508 93,956

26 Other capital reservesCapital Capital

redemption conversionreserve reserve

fund fund Total€’000 €’000 €’000

Group and company

At beginning and end of year 70,652 1,034 71,686

27 Revaluation reserve

Group and company €’000

At beginning of year 503Transferred to profit and loss account on disposal of related tangible fixed assets (503)

At end of year -



28 Profit and loss account

The profit attributable to Group Shareholders dealt with in the financial statements of the holding company for the yearended 31 December 2003 was €27,133,000 (2002: €62,633,000).

As permitted by Section 3(2) of the Irish Companies (Amendment) Act, 1986, the profit and loss account of the company hasnot been separately presented in these financial statements.

The Group's share of the post acquisition retained profits of associates and joint ventures at 31 December 2003 amountedto €24,377,000 (2002: €29,427,000).

Currency translation adjustments of €3,399,000 credit (2002: €2,593,000 credit) arising on the retranslation of foreign currencyborrowings have been netted against the currency movements arising on the retranslation of the net assets of overseassubsidiaries, joint ventures and associates during the year.

The Group profit and loss account reserves of €118,393,000 (2002: €105,961,000) are stated after the deduction of€16,582,000 (2002: €16,582,000) relating to ordinary €6 cent shares in Fyffes plc held by the company and by a subsidiarycompany.

The cumulative amount of goodwill resulting from acquisitions and disposals, which has been set against revenue reservesat 31 December 2003, amounts to €216,891,000 (2002: €216,867,000). The total movement on goodwill set off againstrevenue reserves during the year amounts to €24,000 debit.

29 Minority interestsEquity Non-equity Total€’000 €’000 €’000

Group

At beginning of year 42,159 5 42,164Share of profits for the year 11,309 - 11,309Arising on acquisition of minority interest (note 30) (646) - (646)Dividends paid in year (3,184) - (3,184)Cash contributed by minority shareholders 121 - 121Exchange differences (167) - (167)Other (39) - (39)

At end of year 49,553 5 49,558



30 Acquisitions and disposals/terminations

(a) Subsidiary undertakings

A summary of the effect of acquisitions during the year is as follows:

2003 Revisionsacquisitions to prior yearat fair value acquisitions Total

€’000 €’000 €’000

Tangible assets (note 15) 8,509 - 8,509Joint venture undertaking becoming a subsidiary (note 16) (803) - (803)Trade investment becoming a subsidiary (note 16) (5,267) - (5,267)Stock 22 (420) (398)Debtors 1,884 (217) 1,667Creditors (1,564) (105) (1,669)Corporation tax (216) - (216)Minority interests (note 29) 273 373 646

Net assets acquired 2,838 (369) 2,469

Goodwill capitalised (note 14) 1,426 (2,101) (675)

4,264 (2,470) 1,794

Discharged by:Cash including fees 5,704 - 5,704Cash and cash equivalents acquired (1,512) - (1,512)Deferred consideration 72 (2,470) (2,398)

4,264 (2,470) 1,794



30 Acquisitions and disposals/terminations (continued)

(a) Subsidiary undertakings (continued)

During the year, the Group bought the remaining 50% of a small joint venture undertaking in the UK it did not already own.It also bought out the minority share of a small subsidiary in Ireland. In addition, the Group acquired a number of small tradesin Ireland and the UK. The Group also acquired a further stake in a property company in the UK, giving it 100% control ofthat entity. This investment had previously been accounted for as a trade investment, as the Group had no effective control.The main property acquired with this entity was restated to fair value on acquisition, giving rise to an increase of €7,847,000in the carrying amount of this asset. Other than this, there were no fair value adjustments to the assets and liabilitiesacquired.

In 2003, the Group re-assessed the fair values of certain assets and liabilities in subsidiaries it acquired in the second half of2002. In addition, it has been able to make a better estimate of the likely deferred consideration payable on certain of thoseacquisitions.

The Group did not dispose of or terminate the activities of any significant subsidiaries during the year. Towards the end ofthe year, the Group recovered €511,000 in respect of a subsidiary disposed of in 2001. This amount has been treated as anexceptional item (note 8).

The Group’s joint venture undertaking, Capespan International plc, terminated the activities of an operation in the UK in thesecond half of the year. The Group’s share of loss in relation to this amounted to €544,000. This amount has been treatedas an exceptional item (note 8).

The movement on goodwill set off against revenue reserves in the year, amounting to €24,000, relates principally to revisionsto goodwill on past acquisitions due, mainly, due to deferred consideration adjustments.

(b) Joint venture undertakings €’000

Deferred consideration receivable on disposal of joint venture undertakings 1,271Book value of joint venture sold (583)Capitalised goodwill written off on disposal (556)

Profit on disposal 132

In December 2003, the Group disposed of its investment in a joint venture undertaking which was engaged in farming in theCzech Republic. The subsidiary holding the interest in the joint venture was acquired in 2002 and goodwill relating to theacquisition was included in note 14, a portion of which was attributable to the joint venture.



31 Commitments and contingencies

(a) Capital commitmentsThe directors have authorised capital expenditure of €9,200,000 at the balance sheet date (2002: €11,600,000). Capitalexpenditure contracted for at 31 December 2003 amounted to €1,090,000 (2002: €417,000).

(b) Subsidiary undertakingsIn order to avail of the exemption under Section 17 of the Irish Companies (Amendment) Act, 1986, the holding companyhas guaranteed the liabilities of certain of its subsidiary undertakings registered in Ireland. As a result, the followingsubsidiary undertakings have been exempted from the provisions of Section 7 of that Act:

Allegro Limited Helston Securities LimitedBolanpass Limited Humbolt LimitedBackhouse Supermarkets Limited Huntroyde LimitedBanana Importers of Ireland Limited Irish Elk Products (1975) LimitedBernard Dempsey & Co. Limited Jack Dolan LimitedBrinton Investments Limited Jahno LimitedRichard Brierley & Company Limited J. Lightfoot & Son LimitedCharles McCann Group Limited J. Lightfoot (Market) LimitedEbbtide Limited Kinsealy Farms LimitedElders & Fyffes Investments Lanpak Fruit LimitedElk Products (1975) Limited McCann Nurseries LimitedEverfresh Limited Motcombe LimitedFiacla Limited Melvich LimitedFlorexport (Ireland) Limited Millerton LimitedFII (Market) Limited Munster Fruit & Produce LimitedFII (Export) Limited Negev LimitedFII Fruit Importers of Ireland Limited Old Kinsealy LimitedFII Banana Processing Limited Optiplex LimitedFyffes Bananas North America Limited Philip Lenehan LimitedFyffes Fruit Procurement Limited Premier Fruit Company LimitedFyffes Group Procurement Limited Shiel & Byrne LimitedFyffes Group Ireland Limited Southern Fruit Suppliers (Waterford) LimitedFyffes Banana Processing Limited Spilsby LimitedFyffes Personnel Services Limited Swords Business Park LimitedFyffes Secretarial Services Limited Tropical Fruit Company (Cork) LtdFyffes Investment Holdings Tropical Fruit Company (Ireland) LtdGillespie (Chilled Foods) Limited Uniplumo (Ireland) LimitedGillespie & Company Limited United Fruit Importers (1975) LimitedGillespie Distribution Limited Valleygold (Ireland) LimitedGivejoy Limited Waddel LimitedGreen Ace Producer Group Limited Waterford Fruit (Wholesale) Limited

The holding company has guaranteed the borrowings of subsidiary undertakings in the amount of €92,337,000 (2002:€98,249,000).



31 Commitments and contingencies (continued)

(c) Guarantees(i) Fyffes plc, together with the governments of the Windward Islands, has guaranteed the bank borrowings of WindwardIsland Banana Development and Export Company (Wibdeco) which were used to fund Wibdeco’s equity investment in thejoint venture companies set up by Fyffes plc and Wibdeco to acquire the banana business of Geest plc in January 1996. At31 December 2003, the amount of these borrowings was €4,573,000 (2002: €4,959,000).

In addition, in 2001, Fyffes plc issued a guarantee as security for a bank loan obtained by Wibdeco for working capitalpurposes. The amount outstanding on this loan at 31 December 2003 was €Nil (2002: €3,078,000).

Fyffes plc and Wibdeco have jointly and severally indemnified Geest plc against any one of the joint venture companiesfailing to meet its obligations under the bareboat charter agreements relating to the two island class ships, which were takenover under the acquisition. The total amount due under the bareboat charter agreements at 31 December 2003 wasUS$63,057,000 (€49,994,000) (2002: US$68,419,000, €65,742,000) 50% of which has been accounted for as part of the Group’sequity investment in the joint venture in these financial statements. Under the terms of the agreement between Geest plcand the financiers of these ships, they can be handed back to the financiers in 2009, at which point the obligation of the jointventure companies under the bareboat charter agreements will cease, as will Fyffes’ and Wibdeco’s obligations under theirindemnity to Geest plc. The two island class ships are currently time chartered to a third party.

(ii) Fyffes plc has issued counter indemnities in the amount of €1,780,000 (2002: €1,850,000) as security for bank guaranteesissued in respect of deferred consideration which may become payable in connection with the acquisition of certainsubsidiary undertakings and certain loan notes issued in respect of previous acquisitions.

(d) ContingenciesFrom time to time, the Group is involved in claims and legal actions, which arise in the normal course of business. Based oninformation currently available to the company and legal advice, the directors believe such litigation will not, individually orin the aggregate, have a material adverse effect on the financial statements and that the Group is adequately positioned todeal with the outcome of any such litigation.

32 PensionsThe Group has continued to account for pensions in accordance with SSAP 24 Accounting for pension costs and thedisclosures given in (a) are those required by that standard. FRS 17 Retirement benefits will not be mandatory for the Groupuntil the year ending 31 December 2005. Prior to this, phased transitional disclosures are required by the standard and, tothe extent not given in (a), these are set out below in (b).

(a) SSAP 24 disclosuresThe Group operates a number of externally funded defined benefit and defined contribution pension schemes. Theschemes are set up under trusts and the assets of the schemes are therefore held separately from those of the Group.

The pension cost charged to the profit and loss account for the year in respect of the Group’s defined benefit schemes was€2,764,000 (2002: €2,525,000) and €1,271,000 (2002: €1,773,000) in respect of the Group’s defined contribution schemes.Contributions to the defined benefit schemes are made in accordance with the actuaries’ recommended contribution ratesand are based on the most recent actuarial valuations. Full actuarial valuations were carried out on the main Irish pensionscheme at 31 December 2001 and on the UK pension scheme at 31 October 2000. The actuarial methods used were theattained age method and the projected unit credit method. An actuarial valuation of the UK pension scheme as at 31October 2003 is presently ongoing.

The assumptions which most significantly affect the incidence of pension costs are those relating to the rate of return on theinvestments of the schemes and the rate of increase in salaries and pensions. For the main Group schemes, the rate by whichthe long-term investment return is assumed to exceed the rate of increase in salaries is 1.5% per annum. In addition,appropriate allowance has been made for pension increases in accordance with the rules of the schemes.

At the dates of the most recent actuarial valuations, the market value of these schemes’ assets was €190,452,000 and thisamount was more than sufficient to meet the liability for benefits, under the valuation methods, for service to the valuationdate and based on salaries projected to retirement or earlier exit. The actuarial reports are not available for publicinspection. However, the results of valuations are advised to members of the schemes.

.



32 Pensions (continued)

(b) FRS 17 Retirement benefitsFRS 17 Retirement benefits (FRS 17) will change fundamentally the calculation and reporting of the cost of retirement benefits.The disclosures below relate to all defined benefit retirement plans in Ireland, the UK and Continental Europe.

The previous full actuarial valuations of these schemes, for the purposes of these disclosures, were updated to 31 December2003. All calculations were carried out by independent actuaries. The principal assumptions used by the actuaries as at 31December 2003 were:

ContinentalIreland UK Europe

2003 2002 2001 2003 2002 2001 2003 2002 2001

Rate of increase in salaries 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%Rate of increase in pensions 2.0% 2.0% 2.0% 2.0% 2.0% 2.5% 2.0% 2.0% 2.0%Inflation rate 2.0% 2.0% 2.0% 2.0% 2.0% 2.4% 2.0% 2.0% 2.0%Discount rate 5.5% 5.5% 6.0% 5.5% 5.75% 5.9% 5.5% 5.5% 6.0%

The long term expected rates of return as at 31 December 2003 were:

ContinentalIreland schemes U.K schemes Europe scheme*

2003 2002 2001 2003 2002 2001 2003 2002 2001

Equities 8.25% 8.5% 8.0% 8.0% 7.5% 8.0% n/a n/a n/aBonds 5.0% 4.75% 5.5% 4.75% 4.5% 5.0% n/a n/a n/aProperty 7.0% 6.0% 7.0% 5.5% 5.5% 7.0% n/a n/a n/aOther 3.0% 3.0% 3.0% 4.0% 4.0% 3.0% 4.0% 4.0% 4.0%

* The assets of the scheme in Continental Europe comprise units in a fund managed by an insurance company. The fund ismade up of a bundle of assets and it is impossible to analyse the units owned in terms of equities, bonds, properties etc.





(b) FRS 17 Retirement benefits (continued)

The market value of the assets in the pension schemes were:

Ireland UK

€’000 €’000 €’000 €’000 €’000 €’0002003 2002 2001 2003 2002 2001

Equities 33,781 29,501 39,061 60,229 56,661 81,866Bonds 10,373 9,339 9,980 22,482 21,527 23,193Property 4,826 5,698 4,322 4,815 4,941 5,240Other 2,126 504 789 4,144 3,685 3,532

Total market value of scheme assets 51,106 45,042 54,152 91,670 86,814 113,831Actuarial value ofscheme liabilities (48,195) (45,391) (38,643) (109,415) (104,141) (109,725)

Surplus/(deficit) 2,911 (349) 15,509 (17,745) (17,327) 4,106Deferred tax (liability)/asset (364) 44 (1,939) 5,323 5,198 (1,232)

Pension asset/(liability) 2,547 (305) 13,570 (12,422) (12,129) 2,874

Continental Europe Total

€’000 €’000 €’000 €’000 €’000 €’0002003 2002 2001 2003 2002 2001

Equities - - - 94,010 86,162 120,927Bonds - - - 32,855 30,866 33,173Property - - - 9,641 10,639 9,562Other 7,365 7,061 6,779 13,635 11,250 11,100

Total market value of scheme assets 7,365 7,061 6,779 150,141 138,917 174,762Actuarial value ofscheme liabilities (6,848) (6,619) (5,975) (164,458) (156,151) (154,343)

Surplus/(deficit) 517 442 804 (14,317) (17,234) 20,419Deferred tax (liability)/asset (178) (155) (281) 4,781 5,087 (3,452)

Pension asset/(liability) 339 287 523 (9,536) (12,147) 16,967




If FRS 17 had been adopted in the primary financial statements, the following are the amounts that would have been includedin the profit and loss account and the statement of total recognised gains and losses:

ContinentalIreland UK Europe Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’0002003 2002 2003 2002 2003 2002 2003 2002

Included in payroll costs:Current service costs (1,930) (1,709) (2,623) (3,035) (214) (188) (4,767) (4,932)

Included in finance costs:Expected return on pension fund assets 3,331 3,994 5,283 7,958 282 271 8,896 12,223Interest on pension fund liabilities (2,520) (2,325) (5,610) (6,296) (356) (350) (8,486) (8,971)

Net finance income/(cost) 811 1,669 (327) 1,662 (74) (79) 410 3,252

Included in statement of totalrecognised gains and losses:Difference between expected and actual return on assets 2,150 (13,015) 7,539 (24,015) - 18 9,689 (37,012)Experience gains and losses on scheme liabilities 161 161 - - 50 262 211 423Effect of changes in actuarial assumptions 552 (4,354) (7,055) 2,622 - (644) (6,503) (2,376)

Net included in statement of total recognised gains and losses 2,863 (17,208) 484 (21,393) 50 (364) 3,397 (38,965)






Analysis of the movement in fund during the yearContinental

Ireland UK Europe Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’0002003 2002 2003 2002 2003 2002 2003 2002

Net surplus in pension schemesat beginning of year before deferred tax (349) 15,509 (17,327) 4,106 442 804 (17,234) 20,419

Movements in yearCurrent service cost (1,930) (1,709) (2,623) (3,035) (214) (188) (4,767) (4,932)Contributions paid 1,516 1,390 668 784 313 269 2,497 2,443Net finance income 811 1,669 (327) 1,662 (74) (79) 410 3,252Actuarial gains/(losses) 2,863 (17,208) 484 (21,393) 50 (364) 3,397 (38,965)Exchange movement - - 1,380 549 - - 1,380 549

Net (deficit)/surplus in pensionschemes at end of year 2,911 (349) (17,745) (17,327) 517 442 (14,317) (17,234)

Deferred tax (liability)/asset at end of year (364) 44 5,323 5,198 (178) (155) 4,781 5,087

Net pension asset/(liability) at end of year 2,547 (305) (12,422) (12,129) 339 287 (9,536) (12,147)

If FRS 17 had been adopted in the primary financial statements, the Group’s net assets and profit and loss reserves would beas follows:

Group 2003 2002 2001€’000 €’000 €’000

Net assetsNet assets excluding pension (liability)/asset 355,447 335,539 317,570Pension (liability)/asset (9,536) (12,147) 16,967

Net assets including pension assets and liabilities 345,911 323,392 334,537

ReservesProfit and loss reserve excluding pension (liability)/asset 118,393 105,961 91,841Pension (liability)/asset (9,536) (12,147) 16,967

Profit and loss reserve including pension assets and liabilities 108,857 93,814 108,808




History of actuarial gains and lossesContinental

Ireland UK Europe Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’0002003 2002 2003 2002 2003 2002 2003 2002

Difference between expected and actuarial returns on assets 2,150 (13,015) 7,539 (24,015) - 18 9,689 (37,012)

Experience gains and losses on schemes’ liabilities 161 161 - - 50 262 211 423

Total actuarial gains and losses 2,863 (17,208) 484 (21,393) 50 (364) 3,397 (38,965)

The expression of these figures as a percentage of the related pension scheme net assets would not be meaningful.

33 Related party transactions

Transactions with joint ventures and associatesThe Group trades in the normal course of business with its joint ventures and associates. A summary of transactions withthese related parties during the year ended 31 December 2003 is as follows:-

Sales Sales Purchases Purchases 2003 2002 2003 2002

€’000 €’000 €’000 €’000Joint ventures:

Windward Isles Banana Company Holdings (Jersey) Ltd 58 6,927 2,115 10,358Windward Isles Banana Company (UK) Limited 223 18 6,176 15,036Capespan International Holdings Limited 16,001 14,479 13,089 30,689Other 25,502 20,580 3,006 4,950

Associates 2,818 1,096 8,501 13,698

44,602 43,100 32,887 74,731

The amounts due from and to joint ventures and associates at the year end are disclosed in notes 18 and 19 respectively.

CoplacaCoplaca is a co-operative of banana growers in the Canary Islands and owns 50% of the share capital of EurobananCanariasS.A., the other 50% being owned by the Group. During the year, EurobananCanarias S.A. purchased goods and services fromCoplaca in the normal course of business which are not material in relation to the sales and purchases of the Group. At 31December 2003, the net amount due to Coplaca by EurobananCanarias S.A. was €6,505,000 (2002: €7,333,000).

WibdecoWindward Isles Banana Development and Export Company (UK) Limited (Wibdeco) owns 50% of the Geest joint venture, theother 50% being owned by the Group. Fyffes Group Limited provides banana ripening and marketing services to Wibdecoon an arms length basis. The total income from these services in the year was €9,237,000 (2002: €22,648,000), which includesadministration fees of €487,000 (2002: €1,586,000). Details of guarantees issued by the Group on behalf of Wibdeco are setout in note 31(c) (i) on page 68.

Pineapple Trading CorporationUnder the terms of a long term supply contract between Fyffes and its joint venture company, Pineapple TradingCorporation, all production from that joint venture that meets the Group’s quality standards shall be sold exclusively to Fyffesfor the duration of the agreement. During the year, Fyffes purchased goods from Pineapple Trading Corporation which arenot material in relation to the purchases of the Group.



34 Derivative and other financial instruments

The Group’s treasury activities are undertaken to finance its operations and reduce the various financial risks arising fromthose operations. The policies under which these activities are managed are set out on page 21. The numerical disclosuresrelated to the Group’s financial assets, liabilities and derivative instruments which may be entered into in connection with themanagement of these assets and liabilities are set out below under the relevant risk category or activity.

(a) Interest rate risk profile 2003 2003 2003 2002

Financial FinancialLiabilities Assets Net Net

€’000 €’000 €’000 €’000Denominated in euroInterest rate fixed (4,213) - (4,213) (7,630)Interest rate floating (91,913) 93,615 1,702 (3,733)Interest free (2,915) 19,758 16,843 2,707

Total (99,041) 113,373 14,332 (8,656)

Denominated in SterlingInterest rate fixed (20) - (20) (52)Interest rate floating (64,247) 255,518 191,271 178,653Interest free - 122 122 5,642

Total (64,267) 255,640 191,373 184,243

Denominated in US DollarsInterest rate fixed - - - -Interest rate floating (9,867) 1,783 (8,084) 6,434Interest free - 566 566 204

Total (9,867) 2,349 (7,518) 6,638

Denominated in other currenciesInterest rate fixed (15,467) - (15,467) (934)Interest rate floating (2,443) 6,188 3,745 (6,379)Interest free (8,133) 2,219 (5,914) 798

Total (26,043) 8,407 (17,636) (6,515)

Grand Total (199,218) 379,769 180,551 175,710

In accordance with the definitions set out in FRS 13 Derivatives and other financial instruments: disclosures, financial liabilitiescomprise bank loans and overdrafts, finance lease liabilities and sundry creditors falling due after more than one year,including deferred acquisition consideration and government grants. Financial assets comprise cash at bank and bankdeposits together with trade investments and sundry debtors due after more than one year. Sundry debtors and creditorsfalling due within one year are not included.



34 Derivative and other financial instruments (continued)

(a) Interest rate risk profile (continued)

The Group’s floating rate financial assets and liabilities primarily bear interest rates based on EURIBOR rates fixed for periodsranging from one to twelve months and LIBOR rates ranging from one to twelve months.

The weighted average interest rates of fixed rate liabilities (mainly leases) are as follows:Liabilities

Euro 5.19%Sterling NMUS Dollar NMOther currencies 3.10%

The weighted average period for which these rates are fixed is as follows:Liabilities

Euro 4.4 yearsSterling NMUS Dollar NMOther currencies 1.3 years

NM - Not sufficiently material

The non interest bearing financial assets and liabilities primarily comprise trade investments and certain sundry debtors andcreditors, due after more than one year, including, in particular, deferred acquisition consideration.

The maturity profile of the Group’s financial liabilities (consisting primarily of bank loans and overdrafts) is as follows:

2003 2002€’000 €’000

Within one year (or on demand) 45,409 163,831Between one and two years 72,484 11,822Between two and five years 77,789 51,658After five years 3,536 6,023

Total 199,218 233,334

At 31 December 2003, the Group had available undrawn committed banking facilities amounting to €70.1 million (2002: €40.8million), of which €36.9 million expire within one year, €19.3 million expire between one and two years and €13.9 millionexpire between two and five years.

(b) Currency analysis

The balance sheets of various subsidiary companies include monetary assets and liabilities denominated in currencies otherthan the operating currencies of those subsidiaries. After taking into account any currency hedges in place, these balancesheet currencies exposures at 31 December 2003 can be summarised as follows:

Currency of denomination of asset/liability EUR GBP USD Other Total

€’000 €’000 €‘000 €’000 €’000

Monetary assets 3,334 11,978 25,824 2,588 43,724Monetary liabilities (10,262) (10,822) (18,159) (5,371) (44,614)

Net (6,928) 1,156 7,665 (2,783) (890)



34 Derivative and other financial instruments (continued)

(c) Hedging activities

The Group enters a variety of derivative instruments on a non-speculative basis in order to manage its currency and interestrate risks. These instruments are predominately forward purchases and sales of foreign currency. Certain of these derivativeinstruments are accounted for under hedge accounting whereby changes in the fair value of these instruments are notrecognised in the financial statements until the hedged item is recognised. Unrecognised gains and losses on theinstruments can be summarised as follows:

Total netgains/

Gains Losses (losses)€’000 €’000 €’000

Unrecognised gains/(losses) on hedges at beginning of year 4 (52) (48)Less (gains)/losses arising in previous years which were recognised in current year (3) 44 41

Gains/(losses) relating to previous years which were not recognised in the current year 1 (8) (7)

Gains/(losses) arising in the current year which were not recognised in the current year 59 (41) 18

Unrecognised gains/(losses) on hedges at end of year 60 (49) 11

Of which:Gains/(losses) expected to be recognised in the next financial year 60 (49) 11

(d) Fair value adjustments

With the exception of the unrecognised gains/losses on hedges in note 34(c) above, the fair values of the Group’s financialassets and liabilities are not considered to be materially different to their book value.

35 Comparative amounts

Comparative amounts have been regrouped, where necessary, on the same basis as those for the current year.

36 Approval of financial statements

The directors approved the financial statements on 1 March 2004.



Principal subsidiaries, joint ventures and associatesfor the year ended 31 December 2003

The principal areas of operation are the countries of incorporation.

Subsidiaries Principal activity Group share %

Incorporated in Ireland

Fyffes Group Ireland Limited (1)* Fresh produce distributor 100Banana Importers of Ireland Limited (1)* Fresh produce distributor 95 Green Ace Producer Group Limited (1) Fresh produce distributor 92 Kinsealy Farms Limited (1)* Fresh produce distributor 100Allegro Limited (1)* Consumer goods distributor 90 Fyffes International Holdings Limited (1)* Investment holding company 100Uniplumo (Ireland) Limited (2)* Cultivation and distribution

of houseplants 100Sunpak & Mayfield Fresh Produce Limited (3)* Fresh produce distributor 100Hugh McNulty (Wholesale) Limited (4)* Fresh produce distributor 50 (i)Fyffes International (formerly Universal Fruit) (5) Fresh produce procurement 100Fyffes Fruit Procurement Limited (1) Fresh produce procurement 76

The registered offices of the above are:

(1) 1 Beresford Street, Dublin 7.(2) Kenmare, Co. Kerry. (3) 90 South Mall, Cork. (4) 39/40 Upper Mount Street, Dublin 2.(5) 29 North Anne Street, Dublin 7.

Incorporated in the United Kingdom

Frank E Benner Limited (6) Fresh produce distributor 100Daniel P Hale and Co Limited (6) Fresh produce distributor 100Fyffes Group Limited (7) Fresh produce distributor 100Fyffes Scotland Limited (7) Fresh produce distributor 100FII Holdings Limited (7)* Investment holding company 100James Lindsay & Son plc (8) Fresh produce distributor 100


(6) Balmoral Market, Balmoral Road, Belfast BT12. (7) Houndmills Industrial Estate, Houndmills Road, Basingstoke, Hampshire RG21 6XL.(8) Fruit Market, Chesser Avenue, Edinburgh EH14 1TT.

Incorporated in the Netherlands

Fyffes B.V. (formerly Velleman & Tas International B.V.) (9) Fresh produce distributor 100Anaco & Greeve International B.V. (10) Fresh produce distributor 50 (i)Fyffes Holdings B.V. (11) Investment holding company 100


(9) Marconistraat 19, 3029 AE Rotterdam. (10) Postbus 31, 2685 ZG Poeldijk.(11) Jogchem Van Der Houtweg 2, 2678 AG De Lier.

Principal subsidiaries, joint ventures and associates continuedfor the year ended 31 December 2003


Incorporated in Spain

EurobananCanarias S.A. (12) Fresh produce distributor 50 (i)Arc Eurobanan S.L. (13)** Fresh produce distributor 85 (i)Frutas IRU S.A. (14) *** Fresh produce distributor 50 (i)


(12) Avenida Francisco La Roche, 38801 Santa Cruz de Tenerife. (13) Mercamadrid, Nave D, Puestos 47 y 49, 28053 Madrid. (14) Puestos 326-328, Mercabilbao, 48970 Basauri, Vizcaya.** Owned by EurobananCanarias S.A.*** Owned by Arc Eurobanan S.L.

Incorporated in Denmark

Brdr Lembcke A.S. Fresh produce distributor 50 (i)

The registered office is Gronttorvet, 220, Copenhagen.

Incorporated in Germany

Fyffes GmbH* (15) Investment holding company 100 J.A. Kahl & Co. (16) Investment holding company 100Internationale Fruchtimport Gesellschaft Weichert & Co. KG. (17) Fresh produce distributor 80 (ii)


(15) Bauernbrauweg 1, 8000 Munich.(16) Bauernbrauweg 1, 81369 Munich.(17) Banksstrabe 28, 20097 Hamburg.

Incorporated in Italy

Peviani SpA Fresh produce distributor 50 (i)

The registered office is Via Maspero, 20, 1 - 20137, Milan.

Incorporated in the Czech Republic

Hortim International s.r.o. Fresh produce distributor 70 (i)

The registered office is Breclao, ZIP 690 02, Haskova 18, ICO 47915528.


Principal subsidiaries, joint ventures and associates continuedfor the year ended 31 December 2003


Incorporated in Jersey

Fyffes Windward Holdings Limited* Investment holding company 100Fyffes Investments Limited* Investment holding company 100Kinlet Investments Limited Investment holding company 100Fyffes Treasury Services Limited* Investment holding company 100Fyffes International Fruit Traders Limited Investment holding company 100Fyffes Caribbean Limited Investment holding company 100

The registered offices of all of the above is Elizabeth Lane, St. Helier.

Incorporated in the United States of America

Fyffes Inc. Fresh produce distributor 100Cobalt LLC Fresh produce distributor 100

The registered offices of all the above is 10100 West Sample Road, Suite 405, Coral Springs, Florida, 33065 USA.

Joint Ventures Principal activity Group share %

Incorporated in the United Kingdom

Windward Isles Banana Company (UK) Limited (18) Investment holding company 50Capespan International Holdings Limited (19) Fresh produce distribution 50

The registered office of the above are: (18) The Windward Terminal, Herbert Walker Avenue, Southampton. (19) Moorebridge Court, 29-31 Moorebridge Road, Maidenhead, Berkshire, SL6 8LT.

Incorporated in Guatemala

Pineapple Trading Corporation Fresh produce producer 50

The registered office is Avenida Las Americas, 22-83, Zona 14, Guatemala City.

Incorporated in Jersey

Windward Isles Banana Company Holdings (Jersey) Limited Investment holding company 50

The registered office is Elizabeth Lane, St. Helier.

All shareholdings in subsidiaries, joint ventures and associates consist of ordinary shares.

* Subsidiary undertakings owned directly by Fyffes plc.

(i) Consolidated on the basis that the Group exercises dominant influence over the financial and operating policies of theundertaking.

(ii) This limited partnership is consolidated on the basis that whilst there are elements of shared control, the Group has aparticipating interest of 80% and the Group manages the undertaking on a unified basis with other subsidiary undertakings.


Index to Annual Report

Page

A

Accounting policies, statement of 37

Acquisitions and disposals/terminations 65

Approval of financial statements 76

Audit committee 28

Auditors’ remuneration 49

B

Balance sheet

- Group 42

- Company 43

Bank loans and overdrafts 61

C

Cash flow statement, Group 44

Chairman’s statement 4

Commitments and contingencies 67

Compensation committee report 30

Corporate governance report 27

Corporate social responsibility 9

Creditors: amounts falling

due within one year 59

Creditors: amounts falling due

after more than one year 60

D

Debtors 59

Deferred taxation 62

Depreciation 56

Derivative and other financial instruments 74

Directors’ and company secretary’s

share interests 33

Directors and secretary 6

Directors’ remuneration 31

Directors’ report 25

Dividends 52

E

Earnings per ordinary share 53

Employees 54

Exceptional items 50

F

Financial Review for 2003 16

Financial assets 57

Funds, analysis of net 46

Page

G

Goodwill 55

I

Independent auditors’ report 36

Intangible assets 55

Interest receivable and income from

financial assets, net 48

J

Joint ventures, investment in 57

L

Lease obligations 61

O

Operating expenses, net 48

P

Pensions 68

Profit and loss account, Group 40

R

Reconciliation of movements in

shareholders’ funds 41

Related party transactions 73

Review of Operations for 2003 14

S

Segmental analysis 47

Share capital, called up 62

Share premium 63

Shareholder information 3

Statement of directors’ responsibilities 35

Statement of total recognised

gains and losses, Group 41

Stocks 58

Subsidiaries, principal 77

T

Tangible assets 56

Tax on profit on ordinary activities 51


Fyffes plc A

nnual Rep

ort and A

ccounts 2003

Fyffes plc1 Beresford Street Tel: 353 1 887 2700Dublin 7 Fax: 353 1 887 2751Ireland Web: www.fyffes.com

fyffes plc annual report and accounts...

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