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As filed with the Securities and Exchange Commission on June 20, 2006

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

¨    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)

OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

OR

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

¨    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-14734

GROUPE DANONE

(Exact name of registrant as specified in its charter)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

264,235,190 ordinary shares, nominal value € 0.50 per share at December 31, 2005

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes    x    No    ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes    ¨    No    x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Yes    x    No    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-acccelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark which financial statement item the registrant has elected to follow:

Item 17    ¨    Item 18    x

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes    ¨    No    x

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT TO APPLICATION OR REPORT

FILED PURSUANT TO SECTION 12, 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

GROUPE DANONE

AMENDMENT NO. 1 TO FORM 20-F

The undersigned registrant hereby amends the Annual Report on Form 20-F for the fiscal year ended December 31, 2005 filed by Groupe Danone, on April 20, 2006 (the “Form 20-F”).

This Amendment No. 1 makes the following amendment to the Form 20-F:

The financial statements are amended to add the consolidated financial statements of DS Waters, LP as of and for the periods ended November 14, 2005 and December 31, 2004.

Other than the foregoing item, this Amendment No. 1 does not amend, update or restate any other sections of the Form 20-F. This Amendment No. 1 does not reflect events occurring after the filing of the Form 20-F on April 20, 2006. The filing of this Amendment No. 1 should not be understood to mean that any other statements contained therein are true or complete as of any date subsequent to April 20, 2006. Investors should not rely upon this amendment as a reaffirmation or reiteration of forward-looking statements that were made in the original filing and are reprinted in this amendment.

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Item 19.    Exhibits

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SIGNATURES

The registrant certifies that it meets all of the requirements for filing on Form 20-F/A and has duly caused and authorized the undersigned to sign this annual report on its behalf.

Date: June 20, 2006

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GROUPE DANONE

INDEX TO THE FINANCIAL STATEMENTS

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2005

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders of GROUPE DANONE

We have audited the accompanying consolidated balance sheets of GROUPE DANONE and its subsidiaries (together, the “Group”) as of December 31, 2005 and 2004 and the related consolidated statements of income, of cash flows and of changes in stockholders’ equity for each of the two years in the period ended December 31, 2005, all expressed in Euro. These financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group at December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2005 in conformity with International Financial Reporting Standards as adopted by the European Union.

International Financial Reporting Standards as adopted by the European Union vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in Note 2 to the consolidated financial statements.

PRICEWATERHOUSECOOPERS AUDIT

Neuilly-sur-Seine, France

April 14, 2006

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME

PER SHARE INFORMATION (Note 1 and Note 14)

The notes on pages F-7 to F-72 are an integral part of the consolidated financial statements.

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

The notes on pages F-7 to F-72 are an integral part of the consolidated financial statements.

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CASH FLOWS

The notes on pages F-7 to F-72 are an integral part of the consolidated financial statements.

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

As of December 31, 2005, the number of treasury stock held by GROUPE DANONE and its subsidiaries amounted to 19,715,829 (17,328,719 as of December 31, 2004).

The notes on pages F-7 to F-72 are an integral part of the consolidated financial statements.

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—Accounting principles

The consolidated financial statements of GROUPE DANONE, its subsidiaries and affiliates (together, the “Group”) as of and for the year ended December 31, 2005 were prepared under International Financial Reporting Standards (“IFRS”) as adopted by the European Union. They were approved by the Board of Directors on February 14, 2006. Differences between accounting principles under IFRS and generally accepted accounting principles in the United States of America (“US GAAP”) are summarized in Note 2.

The consolidated financial statements as of and for the year ended December 31, 2004 were prepared based on accounting principles generally accepted in France (Rule 99-02 from the CRC relating to consolidated financial statements). In order to ensure comparability with the financial statements as of and for the year ended December 31, 2005, the financial statements as of and for the year ended December 31, 2004 have been restated to comply with IFRS. The main differences between accounting principles generally accepted in France and IFRS are presented in Note 32 below.

1—First application of new accounting rules

In 2004, IFRIC issued interpretation 4 (IFRIC 4)—Determining whether an arrangement contains a lease. This interpretation requires that agreements that do not take the legal form of a lease but convey a right to use an asset, be analyzed in order to determine whether they contain an implicit lease of that asset. When this is the case, such lease must be classified as an operating or a finance lease. This interpretation is effective from January 1, 2006 with early adoption possible. The application of this interpretation by the Group from January 1, 2006 should not have a significant impact on its consolidated income statement or financial position.

In August 2005, IASB issued IFRS 7—Financial instruments: Disclosures. This standard, which addresses disclosures on financial instruments, is effective from January 1, 2007, with early application encouraged. The Group has not anticipated the application of this standard in its consolidated financial statements as of and for the year ended December 31, 2005.

In April 2005, IASB issued an amendment to IAS 39—Financial instruments: Recognition and measurement, which addresses intra-group cash flow hedges. Under this amendment, certain highly probable intra-group transactions can be hedged. This amendment is effective from January 1, 2006, with early application encouraged. The application of this amendment by the Group from January 1, 2006 should not have a significant impact on its consolidated income statement or financial position.

In June 2005, IASB issued an amendment to IAS 39 on the fair value option. Under this amendment, some financial instruments may be measured at fair value with changes in fair value being recorded in the income statement. This amendment is effective from January 1, 2006 with early application encouraged. The application of this amendment by the Group from January 1, 2006 should not have a significant impact on its consolidated income statement or financial position.

2—Consolidation principles

All subsidiaries in which the Group holds, directly or indirectly, a controlling interest are consolidated. Control over an entity exists when the Group has the capacity to govern the operating and financial policies of such entity, regardless of its interest in the entity. Consequently, some entities in which the Group holds a percentage of control equal to or lower than 50% may be consolidated (see Note 33). All assets, liabilities and

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

income statement items relating to subsidiaries are reflected in the Group’s consolidated financial statements, after elimination of intercompany balances and transactions.

All companies in which the Group exercises, directly or indirectly, a significant influence or joint control are accounted for using the equity method. Under this method, the Group accounts for its proportionate share in the company’s net income and net assets.

Investments in companies that meet the above-mentioned criteria but are not included in the scope of consolidation are reflected as investments in non-consolidated companies. The inclusion of such companies in the scope of consolidation would not have a significant impact on the consolidated financial statements.

Net income of subsidiaries or equity affiliates acquired (disposed of) during the year is included in the consolidated income statement as from the acquisition date (up until the disposal date).

All significant intercompany balances and transactions between consolidated entities (including dividends) are eliminated in the consolidated financial statements.

3—Foreign currency translation

Transactions denominated in foreign currencies

Transactions denominated in foreign currencies are translated using the exchange rate prevailing on the date of the transaction. At period-end, accounts receivable and accounts payable denominated in foreign currencies are translated using period-end exchange rates. Foreign exchange gains and losses arising from transactions in foreign currencies are recorded under the line item “Other (expense) income” in the consolidated income statement, except those arising from (i) transactions of a long-term investment nature and (ii) financial liabilities denominated in foreign currencies that are used to hedge long-term investments denominated in the same currencies. Such unrealized gains and losses are reflected in stockholders’ equity, under the heading “Cumulative translation adjustments”.

Translation of financial statements of foreign operations

Financial statements of foreign operations are translated into euro as follows:

The resulting exchange differences, which are included in stockholders’ equity under the heading “Cumulative translation adjustments”, are recognized in the income statement when the related foreign operations are sold or liquidated.

4—Intangible assets

Goodwill

Upon acquisition of a subsidiary or an affiliate, the acquisition cost is allocated on a fair value basis to the identifiable assets and liabilities acquired. The difference between the cost of acquisition and the Group’s share

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

in the fair value of the assets and liabilities acquired is recorded under the heading “Goodwill, net” for consolidated entities and under the heading “Investments accounted for under the equity method” for equity affiliates.

Goodwill is not amortized but is tested for impairment at least annually (see below).

Goodwill arising from the acquisition of a foreign entity is recorded in the functional currency of the entity acquired.

Brands and other intangible assets

Acquired brands with a substantial and long-term sustainable value that are supported by advertising expenses and that have an indefinite useful life are recorded under the heading “Brand names” in the consolidated balance sheet. The valuation of these brands is generally determined with the assistance of valuation specialists, taking into account various factors, including brand awareness and earnings contribution. These brands, which are legally protected, are not amortized. Brand names that are determined to have a finite life are reflected under the heading “Other intangible assets, net” in the consolidated balance sheet. They are amortized over their estimated useful life, which does not exceed forty years.

Licenses, patents and other acquired intangible assets are recorded at acquisition cost under the heading “Other intangible assets, net” in the consolidated balance sheet. They are amortized on a straight-line basis over their estimated useful lives, not exceeding forty years.

Impairment reviews

Intangible assets (including goodwill) are reviewed for impairment at least annually and whenever events or circumstances indicate that they may be impaired. An impairment charge is recorded when the recoverable value of an intangible asset becomes durably lower than its carrying value.

The recoverable value of an intangible asset corresponds to the higher of market value and value in use. Value in use is assessed with reference to multiple of earnings or expected future discounted cash flows of the Cash Generating Unit (“CGU”) to which the asset belongs. CGUs correspond to subsidiaries or groups of subsidiaries that are included in a same reportable segment and that generate cash flows largely independent from those generated by other CGUs. Cash flows used to determine value in use are derived from the CGU’s business plans, which usually cover a period of five years. Future cash flows beyond that period are extrapolated using a perpetual growth rate that is specific to each CGU. Future cash flows are then discounted using a weighted average cost of capital that is specific to the countries where the CGU operates. Market value corresponds to the estimated net selling price that could be obtained by the Group in an arm’s length transaction.

5—Property, plant and equipment

Property, plant and equipment are recorded at cost of acquisition or at construction cost.

Leased assets are recorded as fixed assets in the consolidated balance sheet, when, in substance, the terms of the lease transfer to the Group the majority of the risks and rewards associated with the ownership of the asset. The asset is recorded for an amount that corresponds to the lower of fair value and the discounted value of future

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

lease payments. The assessment of the level of risks transferred is based on an analysis of the lease agreement. The financial debt associated with the leased asset is recorded as a liability in the consolidated balance sheet.

Interest relating to funds borrowed to finance the construction of property, plant and equipment is included in the cost of the asset during the construction period.

Depreciation

Depreciation of property, plant and equipment is calculated on a straight-line basis over the estimated useful lives as follows:

Impairment reviews

Property, plant and equipment are reviewed for impairment when events or circumstances indicate that they may be impaired. An impairment charge is recorded when the recoverable value of an asset (or group of assets) becomes durably lower than its carrying value. Recoverable value corresponds to the higher of value in use and market value. Value in use is estimated on the basis of the discounted cash flows the asset (or group of assets) is expected to generate over its estimated useful life. Market value corresponds to the estimated net selling price that could be obtained by the Group in an arm’s length transaction.

Refundable containers

Refundable containers are recorded at cost. They are depreciated on a straight-line basis, based on available statistics for each company, over the shortest of the following estimated useful lives:

Liabilities for deposits received are revalued when refundable rates per container change. Any loss arising from changes in refundable rates is charged to the income statement as incurred.

6—Investments in non-consolidated companies

Investments in non-consolidated companies are treated as available-for-sale investments. They are stated at fair value, with unrealized gains and temporary unrealized losses recorded directly in stockholders’ equity. Unrealized losses that are other than temporary are recorded directly in the income statement. For listed companies, fair value is assessed based on the stock price as of the end of the period. For non listed companies, fair value is assessed based on recent transactions entered into with third parties, put and/or call options negotiated with third parties or external appraisals. When such elements do not exist, fair value is determined to be equivalent to the carrying value. Impairment charges and gain or loss on disposal of non-consolidated investments are recorded under the line item “other financial (expense) income”.

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

7—Long-term loans and other long-term assets

Other long-term assets mainly comprise held-to-maturity assets. As with long-term loans, they are measured at amortized cost using the effective interest rate method.

8—Inventories

Inventories are stated at the lower of cost or market value. Cost is primarily determined using the weighted average method.

9—Marketable securities

Marketable securities are treated as trading securities. They are carried at market value, with changes in market value recorded in the income statement in the line item “Interest income”.

10—Cash and cash equivalents

Cash equivalents consist of highly liquid investments, debt instruments and deposits with a maturity of three months or less at the date of purchase. Cash equivalents are carried at market value.

11—Treasury stock

GROUPE DANONE’s capital stock held by the Company and its subsidiaries is reflected as a reduction in total stockholders’ equity, under the heading “Treasury stock”. Treasury stock is measured at historical cost.

12—Grants and subsidies

Investment subsidies are reflected in the balance sheet under the heading “Other non-current liabilities”. They are released to income (in the line item “Other (expense) income”) on a straight-line basis over the estimated useful lives of the related fixed assets.

Other grants and subsidies are recorded in the line “Other (expense) income” of the income statement in the year during which these grants are earned.

13—Income taxes

Deferred income taxes are recorded for all temporary differences between the tax bases of assets and liabilities and their carrying values for financial reporting purposes, except those differences that relate to goodwill. Deferred taxes are calculated using the liability method, applying the last enacted income tax rates expected to be applicable when the temporary differences will reverse. Deferred income taxes relating to the subsidiaries’ undistributed retained earnings are recorded when distribution of these retained earnings is expected in the foreseeable future.

Deferred tax assets are not recognized in the consolidated balance sheet when it is more likely than not that these taxes will not be recovered.

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

14—Retirement indemnities, pension costs and post-retirement healthcare benefits

The Group’s benefit obligations relating to defined benefit pension and retirement indemnity schemes are calculated using projected unit credit method actuarial valuations based on actuarial assumptions that take into account the economic situation of each country. These obligations are covered either through provisions recorded in the balance sheet over the period the rights are acquired by the employees or through assets held in externally managed funds to which the Group contributes.

The Group’s obligations relating to post-retirement benefits are recognized over the period during which the rights are acquired by the employees. Accrued obligations are based on projected unit credit method actuarial valuations that take into account assumptions regarding mortality and future healthcare cost trends.

Gains and losses resulting from changes in the actuarial assumptions that are used to calculate the obligations and estimated return on assets are recognized in the income statement over the estimated average residual active life of the employees, for the portion of the changes that exceeds 10% of the higher of the obligation and the plan assets.

15—Provision for risks and liabilities

Provisions for risks and liabilities are reflected under the line “Other non-current liabilities” in the consolidated balance sheet. Provisions for identified risks and liabilities of uncertain timing or amount are recorded when the Group has a present obligation to a third party as a result of a past event and it is certain or probable that this obligation will result in a net outflow of resources for the Group.

16—Convertible bonds

The nominal amount of convertible bonds is allocated at the issue date between its debt component and its equity component. The value of the equity component, which corresponds to the conversion option, is the difference between the total value of the instrument and the value of the debt component. At the issue date, the value of the debt component corresponds to the market value of a debt instrument having the same characteristics, but without a conversion option. The debt component is subsequently measured at its amortized cost, using the effective interest rate method.

17—Financial instruments

The Group uses derivative financial instruments, mainly through specialized subsidiaries, for the purpose of managing its exposure to currency fluctuations and interest rate risks. As a policy, the Group does not enter into speculative or leveraged transactions, nor does the Group hold or issue financial instruments for trading purposes.

In accordance with IAS 39, all derivative financial instruments must be recorded in the balance sheet at their fair value. When derivatives are designated as fair value hedges, changes in the fair value of both the derivatives and the hedged items are recognized in the income statement. When derivatives are designated as cash flow hedges, the effective portion of changes in their fair value is recorded in stockholders’ equity: this effective portion is recognized in the income statement when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are directly recognized in the income statement.

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Derivative financial instruments that are not classified as hedging instruments are recorded at fair value at year-end, with changes in fair value recorded directly in the income statement.

18—Put options granted to minority stockholders

In accordance with IAS 32—Financial instruments : Disclosure and Presentation, when minority stockholders hold put options that enable them to sell their investment to the Group, the minority’s share in the subsidiaries’ net assets is reflected as a financial liability in the consolidated balance sheet. This financial liability is measured at the exercise price of the option.

As of today, there remains some uncertainty regarding the treatment of the difference between the exercise price of the options and the carrying value of the minority interests that have to be reflected as financial liabilities. In the absence of guidance from IFRIC, the Group has chosen to present such a difference as additional goodwill. This goodwill is adjusted at period end to reflect changes in the exercise price of the options and in the carrying value of the minority interests to which they relate.

19—Net sales

Net sales are recognized when title and risk of loss pass to the customers in accordance with customer purchase orders or sales agreements.

Net sales are stated net of trade discounts, customer allowances and trade support actions that are generally invoiced by customers.

Uncollectible accounts receivable are estimated and reserved for when payment is not reasonably assured. The method used for determining such reserve has not changed over the last three years.

20—Advertising costs

Advertising costs are expensed as incurred.

21—Research and development costs

Research and development costs are expensed as incurred. Development costs are not capitalized as the recognition criteria set by IAS 38—Intangible assets, are usually not met before the products are launched on the market.

22—Other operating (expense) / income

Other operating income and expense comprise significant items that, because of their unusual nature, cannot be viewed as inherent to the current activities of the Group. They mainly include capital gains and losses on disposals of consolidated operations as well as impairment charges in relation to long-lived assets of subsidiaries.

23—Stock options

Stock options granted to employees are measured at their grant date fair value. Fair value is determined using the Black and Scholes valuation model, based on assumptions determined by management. Fair value is

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

expensed over the vesting period (two years), with a corresponding increase in stockholders’ equity. Prior period expense recorded in relation to options that lapse before they vest are reversed in the income statement in the period during which they lapse.

24—Earnings per share

Earnings per share is based on the weighted average number of shares outstanding during the year after deducting GROUPE DANONE’s treasury stock held by the Company and its subsidiaries.

Diluted earnings per share is calculated in a similar manner, except that the number of shares is increased to take into account shares that could potentially be issued (convertible bonds, options to subscribe or purchase shares) and net income is increased to take into account the related theoretical reduction in interest charges, net of tax.

25—Discontinued operations and assets & liabilities held for sale

Assets and liabilities held for sale are reflected in separate line items in the consolidated balance sheet of the period during which the decision to sell is made. Balance sheets of prior periods are not restated. In addition, net income and cash flows of discontinued operations are reflected in separate line items in the consolidated income statement and statement of cash flows, respectively, for all periods presented. IFRS 5 defines a discontinued operation as a component of an entity that (i) generates cash flows that are largely independent from cash flows generated by other components (ii) is held for sale or has been sold, and (iii) represents a separate major line of business or geographic area of operations. The Group has determined that, given the way it is organized, components correspond to its reportable segments and geographic areas.

26—Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures at the date of the financial statements, especially regarding the valuation of intangible assets, investments accounted for under the equity method, deferred tax assets, financial liabilities relating to put options granted to minority stockholders, provisions for risks and liabilities and provisions for commercial agreements. Actual amounts could differ from those estimates.

27—Reclassification

Certain amounts in prior periods’ financial statements may have been reclassified for comparability with the last period presented.

NOTE 2—Summary of differences between accounting principles followed by the Group and United States generally accepted accounting principles

The Group’s financial statements have been prepared in accordance with IFRS as adopted by the European Union. As they relate to the Group, there is no difference between IFRS as adopted by the European Union and IFRS as adopted by the IASB.

The IFRS, as they relate to the Group, differ in certain respects from accounting principles generally accepted in the United States (“US GAAP”).

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A.    Description of main differences

The main differences between IFRS and US GAAP, as they relate to the Group, are discussed in further detail below.

a—Presentation differences

1.    Net sales and selling expenses

In the consolidated financial statements, coupons granted by the Group to final consumers are reflected as promotional expenses within selling expenses. Under US GAAP, according to EITF 01-09—Accounting for Consideration given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products), coupons must be reflected as a reduction of net sales as they are presumed to be a reduction in selling prices. Had US GAAP been applied, net sales and selling expenses would have been reduced by € 43 million in 2005 (€ 41 million in 2004). This reclassification would have no impact on operating income or net income.

2.    Operating income

In the consolidated financial statements, certain non-current and unusual items are excluded from the trading operating income and are reflected on a separate line item in the income statement called “other operating (expense)/income”. This line item includes capital gains and losses on disposals of consolidated operations as well as impairment charges in relation to long-lived assets of subsidiaries.

Under US GAAP, there is no difference between trading operating income and total operating income. Consequently, had US GAAP been applied, the elements reflected under the line item “Other operating (expense)/income” would be reflected under the line item “Other (expense)/income” within operating income.

3.    Minority interests

In the consolidated financial statements, minority interests are included within stockholders’ equity. In addition, when minority stockholders hold put options that enable them to sell their investment to the Group, the minority’s share in the subsidiaries’ net assets is reflected as a financial liability in the consolidated balance sheet.

Under US GAAP, minority interests are excluded from stockholders’ equity. In addition, when minority stockholders hold put options that enable them to sell their investment to the Group, the minority’s share in the subsidiaries’ net assets is not reflected as a financial liability in the consolidated balance sheet.

4.    Deferred taxes

In the consolidated financial statements, deferred tax assets and liabilities are classified as non-current items and are presented on separate line items in the consolidated balance sheet.

Under US GAAP, deferred taxes are classified as current or non-current items consistently with the classification of the item to which they relate. Had US GAAP been applied, long-term deferred tax assets and liabilities would have been reduced by € 15 million and € 151 million, respectively, and short-term deferred tax assets and liabilities would have been increased by the same amount.

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GROUPE DANONE

CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

b—Other differences

1.    Amortization of brands and goodwill

In the consolidated financial statements, consistent with IFRS 3—Business Combinations, brand names with indefinite useful life are not amortized and goodwill has not been amortized since January 1, 2004, the transition date to IFRS. Brand names and goodwill are reviewed for impairment at least once a year. An impairment charge is recorded when their recoverable value appears to be durably less than their carrying value, where recoverable value corresponds to the higher of market value and value in use.

Effective January 1, 2002, the Group adopted SFAS 142—Goodwill and other intangible assets, for the purpose of this reconciliation. Similar to IFRS 3, SFAS 142 prohibits the amortization of goodwill and intangible assets with indefinite useful life and instead requires that they be tested for impairment at least annually. However, prior to the adoption of SFAS 142, the Group was applying APB 17—Intangible Assets, for the purpose of this reconciliation. Under APB 17, intangible assets such as brand names and goodwill had to be amortized over their estimated useful life, which could not exceed forty years. Prior to the adoption of SFAS 142, brand names were amortized over forty years for the purpose of this reconciliation.

Consequently, the net book value of goodwill and brand names under IFRS differs from the net book value of goodwill and brand names under US GAAP. Additionally, impairment charges and capital gains or losses resulting from disposals of operations may be different under IFRS and US GAAP. In 2005, had US GAAP been applied, the gain on disposal of the sauces activities in the United Kingdom and in the United States would have been increased by € 39 million. In addition, the gains on disposals of Italaquae (Beverages—Italy), Galletas Noël (Biscuits—Colombia) and Delta Dairy (Fresh Dairy Products—Greece) would have been reduced by approximately € 8 million in total. Finally, the impairment charges relating to Bakoma (Fresh Dairy Products—Poland) and to the goodwill of Danone Waters of Canada (HOD water—Canada) would have been increased by € 7 million in total. In 2004, had US GAAP been applied, the loss on disposal of the Biscuits activities in the United Kingdom and in Ireland would have been decreased by € 21 million.

2.    Deferred taxes on brand names

As part of the transition to IFRS on January 1, 2004, the Group recognized deferred tax liabilities on brand names against stockholders’ equity.

Under US GAAP, deferred tax liabilities relating to brand names acquired in business combinations must be recognized with a corresponding increase in goodwill. Had US GAAP been applied, as of December 31, 2005, stockholders’ equity would have been increased by € 327 million (€ 366 million as of December 31, 2004), goodwill would have been increased by € 203 million (€ 228 million as of December 31, 2004) and deferred taxes would have been decreased by € 124 million (€ 138 million as of December 31, 2004). In addition, in 2005 the gain on disposal of the sauces activities in the United Kingdom and in the United States would have been decreased by € 37 million and in 2004 the loss on disposal of the Biscuits activities in the United Kingdom and in Ireland would have been increased by € 34 million.

3.    Purchase accounting—Fair value

In the consolidated financial statements, upon acquisition of a less than 100% owned subsidiary, the identifiable assets and liabilities of the acquired entity are measured at their fair value and the minority interests are stated at the minority’s share in the fair value of the identifiable assets and liabilities.

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CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Under US GAAP, identifiable assets and liabilities are measured at their fair value at the date of acquisition to the extent of the Group’s share in the assets and liabilities. The minority’s share in the identifiable assets and liabilities is stated based on the pre-acquisition carrying amounts of these assets and liabilities. Consequently, had US GAAP been applied, brand names and minority interests would have been be reduced by € 131 million as of December 31, 2005 (€ 138 million as of December 31, 2004), without impacting stockholders’ equity. Revaluations of other assets are usually not significant.

4.    Stock options

In the consolidated financial statements, consistently with IFRS 2—Share-based payments, stock options granted to employees are measured at their fair value, which is expensed in the income statement over the vesting period of the options. The fair value of the options is calculated using the Black & Scholes valuation model, based on assumptions determined by management. As part of the transition to IFRS on January 1, 2004, the Group performed the valuation of all the unvested options as of that date, including those granted before November 7, 2002, the effective date of IFRS 2.

The Group applies FAS 123 (R)—Accounting for Share-Based Compensation, for the purpose of this reconciliation. Similar to IFRS 2, FAS 123 (R) requires that stock-options granted to employees be measured at their grant date fair value, with the fair value being recognized in the income statement over the vesting period. However, the effective date of FAS 123 (R) differs from the effective date of IFRS 2. FAS 123 (R) is effective from January 1, 2006, with early application encouraged for all the periods that have not been covered by published financial statements. The Group has decided to apply FAS 123 (R) from January 1, 2005, for the purpose of this reconciliation. Prior to January 1, 2005, the Group was applying APB Opinion N° 25—Accounting for Stock Issued to Employees for the purpose of this reconciliation and no stock-based compensation was recorded in 2004 under the provision of APB 25. Consequently, the stock-based compensation recognized in the 2004 income statement under IFRS has been reversed for the purpose of this reconciliation. This adjustment has no impact on stockholders’ equity.

5.    Cumulative translation adjustments

As part of the adoption of IFRS on January 1, 2004, the Group chose to apply the exemption offered by IFRS 1 regarding cumulative translation adjustments for foreign operations. These translation adjustments, which amounted to a negative value of € 1.9 billion as of January 1, 2004, were deemed to be zero at that date. This adjustment had no impact on stockholders’ equity.

Consequently, in the consolidated financial statements, the gain or loss on disposals of foreign operations exclude translation adjustments that arose prior to January 1, 2004. The gain or loss on disposal of foreign operations may therefore be different under IFRS and under US GAAP. In 2005, had US GAAP been applied, the net gain on disposal of operations would have been reduced by approximately € 58 million in total (the net loss on disposal of the Biscuits activities in the United Kingdom and in Ireland would have been increased by € 14 million), corresponding to the cumulative translation adjustments existing as of January 1, 2004 in relation to the disposed investments.

6.    Unrecognized gains and losses

As part of the adoption of IFRS on January 1, 2004, the Group chose to recognize all actuarial gains and losses in relation to defined benefit plans against stockholders’ equity.

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CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Under US GAAP, actuarial gains and losses that were generated before January 1, 2004 continue to be accounted for using the “corridor” approach. Consequently, had US GAAP been applied, stockholders’ equity attributable to the Group would have been increased by € 35 million (before tax) as of December 31, 2005 (€ 58 million as of December 31, 2004). In addition, in 2005 the net gain on disposal of HP Foods would have been decreased by € 25 million and in 2004 the net loss on disposal of the Biscuits activities in the United Kingdom and in Ireland would have been increased by € 36 million.

7.    Pension liability

Under US GAAP, SFAS 87—Employers Accounting for Pensions, requires that when the fair value of plan assets is lower than the Accumulated Benefit Obligation (“ABO”), the pension liability be adjusted to reflect the difference. An equal amount must be recorded as an intangible asset or as a reduction in stockholders’ equity for the portion that exceeds the amount of unrecognized prior service costs.

Had US GAAP been applied, pension liabilities would have been increased by € 72 million (before tax) as of December 31, 2005 (€ 67 million as of December 31, 2004) and stockholders’ equity would have been decreased by a similar amount.

8.    Put options granted to minority stockholders

As indicated in Notes 5 and 16 to the consolidated financial statements, the Group is committed to acquiring the minority shareholdings owned by third parties in some of the less than 100% owned subsidiaries, should these third parties wish to exercise their put options. IAS 32—Financial instruments: Disclosures and Presentation, requires that, when minority stockholders hold put options, their share in the net assets of the subsidiary be reclassified from “Minority interests” to financial liabilities in the consolidated balance sheet. This financial liability must be measured at the exercise price of the option.

Under US GAAP, the exercise price of put options granted to minority stockholders is not reflected as a financial liability. These options are treated as derivative instruments, which must be measured at fair value. Consequently, as of December 31, 2005, had US GAAP been applied, financial liabilities would have been reduced by € 2,626 million (€ 2,440 as of December 31, 2004), minority interests would have been increased by € 431 million (€ 422 million as of December 31, 2004), goodwill would have been decreased by € 2,179 million (€ 2,002 million as of December 31, 2004) and stockholders’ equity attributable to the Group would have been increased by € 16 million (€ 16 million as of December 31, 2004). This adjustment has no impact on net income.

9.    Securitization of receivables

In 2001, the Group entered into a securitization program with financial institutions to sell without recourse accounts receivable to a special purpose vehicle (“FCC—Fonds Commun de Créances”—see Note 16). The FCC must be consolidated in the Group’s financial statements as the Group retains a majority of the risks and rewards associated with the activities of the FCC. The consolidation results in the transferred receivables being kept in the consolidated balance sheet, with a financial liability being recognized for a similar amount.

Under US GAAP, insofar as the program meets the derecognition criteria of SFAS 140—Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities, the transferred receivables are derecognized from the balance sheet. Consequently, had US GAAP been applied, trade accounts receivable

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CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

would have been decreased by € 400 million as of December 31, 2005 (€ 703 million as of December 31, 2004) and financial liabilities would have been decreased by a similar amount. In addition, had US GAAP been applied, the cost of the securitization program would have been reflected within operating income. Consequently, expenses amounting to € 10 million (€ 15 million in 2004) would be reclassified from interest expense to operating expense.

10.    Convertible bonds

In the consolidated financial statements, when a financial instrument has several components (“hybrid” financial instrument), the debt components must be separated from the equity components. Accordingly, options that enable the holder to convert the financial instrument into equity of the issuer must be classified as equity in the consolidated balance sheet. The nominal amount of the instrument must be allocated between the different components, the value of the equity component being the residual value (difference between the total value of the instrument and the value of the debt component). The value of the debt component must correspond to the value of a debt instrument having the same characteristics, but without the conversion option.

Under US GAAP, convertible bonds are entirely reflected as financial liabilities and the interest expense is calculated based on the nominal interest rate. Consequently, had US GAAP been applied, stockholders’ equity would have been decreased by € 19 million as of December 31, 2004 (before tax) and the interest expense in 2005 would have been decreased by € 19 million.

11.    Discontinued operations

In the consolidated financial statements, a discontinued operation is defined as a component of an entity that (i) generates cash flows that are largely independent from cash flows generated by other components, (ii) is held for sale or has been sold and (iii) represents a separate major line of business or geographic area of operations.

Under US GAAP, a discontinued operation is also defined as a component of an entity that (i) generates cash flows that are largely independent from cash flows generated by other components and (ii) is held for sale or has been sold. However, this component does not necessarily have to represent a separate major line of business or geographic area. The component can be an operating segment, a reporting unit, a subsidiary or a group of assets. Griffins, a Group subsidiary that was held for sale as of December 31, 2005, meets the criteria of a discontinued operation under US GAAP. Consequently, had US GAAP been applied, Griffins’ net income would have been reflected on the line item “Discontinued operations” in the income statement for a total amount of € 8 million in 2005 (€ 11 million in 2004).

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CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

B.    Reconciling statements

Reconciliation of net income

The reconciliation of net income from IFRS to US GAAP is as follows: