Excerpt of the Chairman's report at the Annual General Meeting on 20 August 2008

In his report at Danisco's Annual General Meeting, Chairman of the Board of
Directors, Anders Knutsen, said among other things: 

There is every reason to take an active interest in all that has happened since
last year's annual general meeting. This general meeting is special because
this is the day we decide on the future ownership of our sugar activities - an
important and necessary change - just as we promised last year! 

The past year has been extremely exciting and eventful for Danisco. When we met
here last year, I told you about a company steering successfully through major
changes. The last pieces of the puzzle are now falling into place - with the
sale of Sugar as the absolute main event. With a focused food ingredients
business and new and more long-term activities within biotech, we have brought
Danisco into a new reality. The reality of tomorrow. This means that we have
created a platform for growth opportunities and future earnings potential for
our company. 

It is all about exploiting Danisco's unique technology platform to an even
greater extent than before. And it is about being willing to run greater risks
than previously. We have chosen the name “Becoming first choice” for this new
strategy. This means that going forward we will aim to be the preferred
company. Whether by customers, suppliers, business partners or employees. 

Over the past 10-11 years we have seen one structural change after the other.
It has been a long, but necessary journey. Now we are done with the radical
changes, so the Danisco you see today after Sugar has been sold is the Danisco
we will build on for many years to come. 

In other words, we are done with selling off, and have put value-creating
growth on the agenda. 

Danisco Sugar
Last year, Danisco Sugar - and what was to become of it - was the
much-discussed topic of the general meeting. 

This year, I am pleased to say that we have found a good home for our sugar
business with Nordzucker, provided of course that the General Meeting
authorises the Board of Directors to close the sale. We managed to obtain an
attractive price, which means that we are well poised to reach the targets,
which the future Danisco will be pursuing. At the same time, I see Nordzucker
as a perfect match for Danisco Sugar, which is now joining one of the leading
companies in Sugar Europe. And I was pleased to hear Nordzucker's extremely
flattering remarks about Danisco Sugar. I am very pleased on behalf of the
shareholders and employees. 

This is a huge decision for Danisco. And for this reason, it is only natural
that the General Meeting gets the opportunity to discuss this historic step in
our continued development. The Board of Directors, of course, hopes that the
General Meeting will authorise us to close the sale. 

Danisco - Becoming first choice
With our new position after saying good-bye to Sugar our ambition is to become
the First choice in every context. We want to be an organisation that motivates
its employees and colleagues to do their best. And we want to be a business
that appreciates and rewards these efforts. Extensive work is taking place
internally and it is tied to at least four important targets: We want to be a
company which, when asked, potential employees choose as one of their favourite
places to work. 

We want to be our customers' preferred partner. That is why we are working hard
to become a market-driven organisation through-and-through by e.g. optimising
and motivating our sales force so that Danisco is at the top of relevant
customers' minds. We want to be the company with the strongest innovation team.
The innovative company which others want to cooperate with. And finally, we
want to be leading in sustainable production and products. 

When we succeed in all these areas I have no doubt that we will become the
first choice. In this respect, cooperation and partnerships with other
businesses are important factors for our success. 

The first major partnership we have entered into is with the listed US-based
company DuPont on turnkey solutions for bioethanol production. In two to three
years the target is to supply both the concept and the technology for finished
and competitive second-generation ethanol plants around the globe. DuPont has
the expertise, we don't have, and we have what DuPont doesn't have. Together,
we form a partnership that will end up in a sustainable product based on
residue from for instance agriculture or forestry. 

Each party is initially investing up to DKK 350 million over the next three
years. That is a lot of money, but just listen to this: We foresee a market for
second-generation bioethanol of at least USD 75 billion in 2020, corresponding
to around DKK 400 billion. We aim to be a key player in this market and to have
a big slice of the cake. 

We see our partnership with DuPont as an important signal to others who wish to
collaborate on sustainable products in the biochemical field. Naturally, we
also want partnerships and collaboration in the food area. Food continues to be
a highly important segment to Danisco. We will particularly be focusing on the
market for health-promoting food ingredients over the coming years as these are
in demand by our customers. We call this area Health & Nutrition. Our focus
areas are ingredients that have a positive effect on digestion, diabetes,
cardiovascular diseases, oral hygiene and immune response and can help
overweight people. We already have products in all those areas today, but we
want to be among the three largest and best in the world. This requires an
effort and could also involve acquisitions. We are determined to be in the top
three, because we know that it is a market with solid growth rates. 

Tomorrow's Danisco will be far more focused. Our enzymes and food ingredients
are based on the same technology platform and are used in several of the same
markets. We have therefore reached the point where all the Group's business
areas must grow by themselves, through partnership agreements and minor
acquisitions if the right opportunities arise. 

The mercury case - Grindstedværket
In my review of the development of the ingredients activities, I would like to
make a few comments on the possible mercury poisoning of employees at the
former Grindstedværket 30-40 years ago. There is no doubt that the Board of
Directors, the Executive Board and employees take the matter very seriously.
The media have presented the case from different angles. And I would like to
take this opportunity to emphasise the following: 

Firstly, it is impossible to judge yesterday's environmental requirements by
today's standards. Former production methods would not be accepted and approved
by the authorities today. 

Secondly, it has been claimed that the employees were not informed about their
mercury values at the time. We find that hard to understand since several
employees have informed us that the results were announced on the bulletin
board in the canteen. In any case, the employees whose values were too high
were informed about it in close collaboration with the public authorities.
According to the procedures agreed on with the authorities at the time, they
were transferred temporarily from their workplace until their test results
showed normal values again. 
Thirdly, it is incorrect when the media claim that we refuse to help mercury
victims. On the contrary, we do everything we can to provide relevant
information. As at 13 August, 70 claims had been reported to the National Board
of Industrial Injuries, and we have also replied to many requests from current
and former employees and given them access to the company's mercury
measurements, if any. We would like to stress that we are not in possession of
complete data material of mercury analyses and measurements made during the
period in question. The measurements were made as part of the industrial health
centre's service at Grindstedværket and were primarily carried out by the
occupational medical clinic in Copenhagen. When the industrial health centre (a
public institution) was closed down in the late 1990s, we were instructed to
send these measurements to the Directorate of the Danish Working Environment
Authority, so they are no longer in our possession. Our files only comprise the
measurements appearing from correspondence with the Danish Working Environment
Authority, and we know that the Directorate has more measurements which we do
not have access to. To get a correct and objective data basis for assessing the
individual cases, we maintain our view that persons who believe they may suffer
from injuries should contact their general practitioner or the National Board
of Industrial Injuries to go through the right channels. 

Finally, we have suspended the limitation period to make sure that persons who
believe they suffer from injuries have the time needed to report a claim. 

I am not saying this to explain away this unfortunate situation, but I believe
that the Annual General Meeting is entitled to get a more detailed picture of
this complicated situation than we have at the moment. 

In conclusion, I would like to say that this is a very unfortunate situation.
Back then the company followed the normal procedures that were accepted and
agreed with the public authorities. With today's knowledge, both Danisco and
the authorities would act differently than at that time. 

We fully support the Executive Board's handling of the matter, and we will now
await the results of the National Board of Industrial Injuries. When we have
been informed about the contents of the specific cases, we will find a solution
for those who suffer from permanent injuries which will reflect that we, the
Board of Directors, are aware of our ethical and social responsibility. 

The Board of Directors proposes to the Annual General Meeting

•That a dividend of DKK 7.50 per share be paid, which is unchanged from 2006/07
•Election of members to the Board of Directors
•That the company's share capital be reduced through the cancellation of
1,248,200 treasury shares, corresponding to 2.55% of the share capital. The
reduction concerns the share buyback programme of DKK 500 million introduced in
continuation of the divestment of Flavours 
•That in the period until next year's Annual General Meeting the Board of
Directors be authorised to allow the Company to purchase treasury shares up to
an amount of 10% of the share capital at market price at the time of purchase
with a deviation of up to 10% 
•Sale of Sugar
•Share option programme for the Executive Board and senior managers
•Electronic communication with shareholders
•Proposal from shareholder: “Danisco will ensure that workers at
Grindstedværket who have suffered injury because of mercury or other
substances, which the management of the company knew or ought to have known to
be hazardous to the employees, will receive damages irrespective of any time
limitation”. 

Composition of the Board of Directors and motivation for re-election
At the Annual General Meeting, the following Board members are up for
re-election in accordance with the Articles of Association: Jørgen Tandrup,
Håkan Björklund and Kirsten Drejer. I would like to present the Board of
Directors' motivation for proposing re-election of the above Board members.
Apart from their experience from serving on Danisco's Board of Directors, all
three Board members have valuable competencies that are considered an asset to
the Company. 

Sale of Sugar
First of all, allow me to emphasise that the Board of Directors considers the
sale of the sugar activities to be one of the most important decisions since
the formation of Danisco A/S in 1989. Today, we therefore need to discuss the
resolution proposed by the Board of Directors for approval by the Annual
General Meeting, to the effect that the Annual General Meeting grants the Board
of Directors a mandate to close the sale of the sugar activities to
German-based Nordzucker. 

For a long time, the Board of Directors has been aware that the two very
different business models of Ingredients and Sugar, respectively, were not an
optimal combination. But at the same time, the EU sugar regime was being
changed considerably, which meant major uncertainty about the valuation of
sugar activities across Europe. Against this background, we have not been ready
to negotiate until now that we have more clarity about the future development
of the EU sugar market. 

Since last year's annual general meeting, we have worked to find the most
optimal solution for our shareholders, customers, employees and beet growers.
We engaged an adviser, Deutsche Bank, to assist us in the process and ensure
that all options were examined. An auction process was carried out to give us
certainty about the value of our sugar activities which, among other things,
resulted in a DKK 600 million writedown of the goodwill value. This was
compared with the alternative of an independent stock exchange listing of
Danisco Sugar. The Board of Directors, the Executive Board and our external
advisers have assessed that selling the sugar activities to Nordzucker is the
best solution. This solution is optimal because, first of all, it provides the
best value creation for our shareholders. Secondly, with this agreement we
ensure our employees a new owner who focuses on production and sale of sugar in
Europe - in other words, our employees become part of Nordzucker, a very
well-functioning and professional sugar producer. Thirdly, we make sure that
our customer base will have a professional and competitive business partner in
future. And lastly, I have noticed statements from Nordzucker that in future
beet growers may become joint owners of the sugar production in Scandinavia.
This ownership structure is traditionally used throughout Europe and will put
Scandinavian beet growers on an equal footing with their European colleagues. 

With these words, the Board of Directors asks the Annual General Meeting for a
mandate to close the sale of Danisco Sugar to German-based Nordzucker. I would
like to add that the mandate, of course, will be subject to approval of the
sale by the competition authorities in the respective countries. 

Finally, I would like to point out that if the Annual General Meeting rejects
the proposal, the Board of Directors will consider it a mandate to work towards
an independent stock exchange listing or other alternatives. This also applies
if the sale is not approved by the authorities. 

Granting of share option programme of up to 600,000 share options
For some years, we have granted share option programmes to the Executive Board
and senior managers. In the opinion of the Board of Directors, the effect of
such programmes is that the Executive Board and senior managers share a common
objective with our shareholders, that is, to create value for the company. The
combined option programmes, including the proposed programme, account for 5.3%
of the total share capital. 

The Board of Directors is convinced that share option programmes offer one of
many important ways of being an attractive employer so that we are able to
retain and attract qualified staff in a global market. And let me add that we
use external market data to ensure that the parameters of the programme and the
individual allotments take place on market terms. 

The Board of Directors therefore proposes to the Annual General Meeting that
the Board be authorised to grant 600,000 share options on the terms and
conditions stated in the material to the Executive Board and senior managers,
about 200 persons in all. Finally, I can inform you that the value of this
programme at the present share price level is approx. DKK 32 million against
approx. DKK 31 million at the time of the release of last year's Annual Report
at the end of June. 

Electronic communication
As part of the process of making communication with the shareholders more
efficient and modern, the Board of Directors proposes that, in future,
electronic communication between the company and the shareholders should be
possible, cf. section 65(b) of the Danish Public Companies Act. 

Proposal from a shareholder: Danisco will ensure that workers at
Grindstedværket who have suffered injury because of mercury or other
substances, which the management of the company knew or ought to have known to
be hazardous to the employees, will receive damages irrespective of any time
limitation. 
As I mentioned previously in my speech, these cases took place around 40 years
ago when concepts such as pollution and production had an entirely different
meaning than today, and when the term sustainability was not in the dictionary.
Fortunately, we now know better. The production methods of that time would
never be used today. 

Basically, our view is that we need experts to consider each individual case.
We have therefore urged victims to report their claims through the ordinary
channel, which is the National Board of Industrial Injuries. And together with
the National Board of Industrial Injuries we will make efforts to ensure that
cases are dealt with fast. This is the only way to get an objective assessment
of the seriousness of the injuries and legal certainty for all parties. I can
inform you that as at 13 August 70 claims had been reported to the National
Board of Industrial Injuries. We have already suspended the limitation period
and we also have a good and constructive dialogue with the representatives of a
large number of the former and current employees - the two Danish trade unions
3F and Dansk Metal. 

When the results of the National Board of Industrial Injuries are available and
when we have been informed about the contents of the specific cases, we will
have an objective basis according to which we can act and find a solution for
those who suffer from permanent injuries which will reflect that we, the Board
of Directors, are aware of our ethical and social responsibility. Against this
background, the Board of Directors cannot approve the proposal at present. 

The Annual General Meeting can be followed live at www.danisco.com.
Subsequently, it will be possible to read the Chairman's report in its entirety
at the same Internet address. 

Yours faithfully



Tom Knutzen
CEO