RIBER GROUP. 133 boulevard National RUEIL-MALMAISON, France R.C.S. Nanterre B CONSOLIDATED FINANCIAL STATEMENTS

Transcription

1 RIBER GROUP 133 boulevard National RUEIL-MALMAISON, France R.C.S. Nanterre B CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2003

2 Page 2 of 19 INDEX CONSOLIDATED BALANCE SHEET Page CONSOLIDATED INCOME STATEMENT...3 CONSOLIDATED CASH FLOW STATEMENT...4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY...5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 Page 3 of 19 Consolidated Balance Sheet Assets Notes Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2001 NON-CURRENT ASSETS Intangible assets (4) Property, plant and equipment Land (5) 5,734 5,734 5,734 Buildings (5) 3,418 3,612 3,805 Machinery and industrial equipment (5) 2,470 2,361 2,304 Motor vehicles (5) Office equipment and furniture (5) Other non-current assets (5) 1,035 1,120 1,261 Assets under construction (5) ,972 13,140 13,453 Investments (6) TOTAL NON-CURENT ASSETS 13,105 13,417 13,903 CURRENT ASSETS Inventories (7) 14,714 18,552 28,903 Advances and prepayments on orders Trade receivables (8) 6,123 4,322 7,808 Other receivables and deferred tax assets (9) 4,812 5,386 2,278 Cash and marketable securities (11) 9,765 16,733 9,613 TOTAL CURRENT ASSETS 35,422 45,184 49,135 TOTAL ASSETS 48,527 58,601 63,038 3

4 Page 4 of 19 Consolidated Balance Sheet Equity and Liabilities Note Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2001 EQUITY Share capital 3,036 3,012 3,012 Share premiums 33,555 33,555 33,555 Reserves 1,556 10,841 7,672 Translation adjustments profit/loss (3,808) (9,284) 3,167 GROUP EQUITY (20) 34,416 38,154 47,415 MINORITY INTERESTS TOTAL EQUITY 34,416 38,154 47,415 Provisions for liabilities and charges (12) LIABILITIES Borrowings Bank loans and debts (11) 0 0 Other borrowings (13) 9,527 10, Operating liabilities Advances and prepayments on orders 273 2,764 5,546 Trade liabilities (8) 1,968 4,264 7,042 Other liabilities (10) 1,725 2,706 2,485 TOTAL LIABILITIES 13,494 19,835 15,113 TOTAL EQUITY AND LIABILITIES 48,527 58,601 63,038 4

5 Page 5 of 19 Consolidated Income Statement Note (12 months) (12 months) (12 months) Sales (17) 17,228 18,634 34,240 Cost of sales (13,564) (11,903) (19,970) GROSS PROFIT 3,663 6,731 14,270 Inventory writedown (409) (9,980) (1,681) Sales and marketing expenses (2,997) (3,501) (3,801) Research and Development expens es (3,126) (2,281) (1,961) Administrative expenses (1,563) (1,766) (2,156) other operating revenues/(expenses) (23) 193 (1,199) 263 OPERATING PROFIT/(LOSS) (4,239) (11,997) 4,933 finance income/(cost) (24) (41) PROFIT/(LOSS) BEFORE TAX (3,979) (11,955) 4,892 Income tax credit/(expense)) (14) 170 2,672 (1,725) GROUP PROFIT/LOSS) (3,808) (9,284) (3,167) PROFIT/(LOSS) BEFORE MINORITY INTERESTS (3,808) (9,284) (3,167) Minority interest NET PROFIT/(LOSS) (3,808) (9,284) 3,167 Basic Earnings/(Loss) Per Share (2.15) (0.21) (0.50) 0.17 Diluted Earnings/(Loss) Per Share (2.15) (0.20) (0.48)

6 Page 6 of 19 Consolidated Cash Flow Statement Cash flows from/(used in) operating activities profit/(loss) (3,808) (9,284) 3,167 Elimination of items not having an impact on cash flow Depreciation/amortization and provision charges 1,358 2,880 (22) Deferred tax movements 0 (1,022) 378 Government grants allocation to income Capital gains on disposals, net of taxes Cash flow from/(used in) operations before working capital (2,423) (7,424) (3,527) Working capital movements Inventories 3,838 10,351 (12,214) Receivables (1,503) 827 9,590 Liabilities (5,309) (5,798) (13,834) Sub total (2,974) 5,380 (16,458) cash from/(used in) operating activities (5,396) (2,044) (12,931) Cash flows used in investing activities Non-current assets acquisitions Intangible assets (96) (180) (259) Property, plant and equipment (973) (720) (11,783) Non-current assets disposals movement in borrowings and financial receivables 3 (57) 78 cash used in investing activities (1,067) (944) (11,964) Cash flows from/(used in) financing activities Proceeds from borrowings ,114 3 Borrowings repayments (684) (54) (52) Treasury shares disposal/(acquisition) 0 2 (1,325) Proceeds from share capital increases and share premiums cash from/(used in) investing activities (551) (10,063) (1,374) Translation differences (180 Change in Group structure 0 0 (3) increase/(decrease) in cash and cash equivalents (6,968) 7,119 (26,290) Cash and cash equivalents beginning of the year 16,733 9,613 35,903 Cash and cash equivalents end of the year 9,765 16,733 9,613 (1) excluding current asset writedown provisions 6

7 Page 7 of 19 Consolidated Statement of Changes in Equity Share Capital Share Premium Group Reserves N et Profit (Loss) Translation Adjustment Other Treasury Total Shares Total Equity December 31, ,010 33,555 1,984 7,042 (10) 0 (10) 45,582 Allocation of 2000 net profit 7,042 (7,042) net profit 3,167 3,167 Share capital increase 2 2 Treasury share acquisitions/disposals (1,325) (1,325) (1,325) Translation adjustment (28) (9) Other movements (1) (1) December 31, ,012 33,555 8,997 3,167 9 (1,325) (1,316) 47,415 Allocation of 2001 net profit 3,167 (3,167) net loss (9,284) 0 (9,284) Share capital increase Treasury share acquisitions/disposals Translation adjustment Other movements December 31, ,012 33,555 12,164 (9,284) 30 (1,323) (1,293) 38,154 Allocation of 2002 net loss (9,284) 9, net loss (3,808) 0 (3,808) Share capital increase 23 (1) 0 22 Treasury share acquisitions/disposals 0 0 Translation adjustment Other movements 0 0 December 31, ,036 33,555 2,879 (3,808) 78 (1,323) 91, ,416 7

8 Page 8 of 19 NOTES TO THE DECEMBER 31, 2003 CONSOLIDATED FINANCIAL STATEMENTS 1. BUSINESS OVERVIEW AND ACCOUNTING PRINCIPLES 1.1 Business overview and company background RIBER SA and its subsidiaries ( the Group ) are engaged in the development, manufacture and sale of epitaxial machines and related components for the compound semiconductor industry, using molecular beam epitaxy (MBE) technology. 1.2 Consolidation principles The consolidated financial statements have been prepared in accordance with French legal requirements, particularly Accounting Regulatory Committee Regulation dated April 29, Subsidiaries in which RIBER SA exercises exclusive control are consolidated using the full consolidation method. From January 1, 2001, RIBER SA consolidates its only sales subsidiary, Riber Inc, using the full consolidation method. The financial statements of those companies included in the consolidation have been prepared in accordance with the accounting principles and methods in force for those countries, and, where necessary, have been restated in order to apply the Group accounting principles and methods. All Group companies have a December 31 fiscal year-end. 1.3 Translation of foreign currency denominated financial statements The financial statements of the US subsidiary Riber Inc. have been translated as follows: - Income Statement items were translated at the average rate for the fiscal year, - Balance Sheet assets and liabilities were translated at the closing rate, - Translation differences arising have been recorded as a Translation Adjustment in the Equity section of the Balance Sheet 8

9 Page 9 of VALUATION PRINCIPLES AND METHODS 2.1 Revenue recognition System sales are recognized as realized at the moment when risk and ownership are transferred to the customer, which is generally at the time of shipping. Subsequent to shipping, the Group bears installation and guarantee costs. All of these costs are provided for, either as expense payable or provisions for liabilities and charges at the moment of revenue recognition. 2.2 Research and Development costs Research and development costs are expensed as they are incurred ( millions) Gross costs Costs allocated to machine production costs Other intangible assets Other intangible assets relate primarily to acquired software amortized on a 1-year or 3-year basis. 2.4 Property, plant and equipment Property, plant and equipment items are carried on the Balance Sheet at their acquisition cost or production cost. Depreciation is calculated using the straight-line or declining balance method, based on the estimated useful life of the asset. Estimated Life Method Buildings 20 years Straight-line Machinery and industrial equipment 3 to 10 years 5 to 10 years Straight-line Declining balance Improvements and fittings 10 years Straight-line Motor Vehicles 5 years Straight-line Computer equipment 3 to 5 years Straight-line or Declining balance Furniture 10 years Straight-line 2.5 Finance leases When the Group is the lessee of an asset pursuant to a long-term lease contract or a finance lease contract whose features are similar to those of a purchase, the fair market value of the asset is capitalized and depreciated in accordance with the above-described method(s), with the offsetting debt recorded as a liability. 2.6 Inventories Manufactured products, whether in a finished or semi-finished state, are valued at their manufacturing cost, comprising the cost of materials used, direct and indirect manufacturing costs, and the allocation of depreciation expenses of equipment and machines used during the manufacturing process. A provision for write-downs is established when their gross book value exceeds their net realizable value. The gross book value of materials and components includes the purchase price and related costs. The Group uses the weighted average cost method. A provision for write-downs is established for materials and components to take into account their value in use, determined in particular by their consumption. RIBER SA held an inventory of metals (tantalum and molybdenum) at December 31, 2003 amounting to 5 million. This inventory represents several years supply, and has not been written down due to its strategic importance to RIBER SA s manufacturing activities. An 2.8 million exceptional provision, established in 2002 in order to provide for the risk of postponed sales of certain production machines, was retained at December 31,

10 Page 10 of Foreign currency denominated transactions Foreign currency denominated transactions are translated at their transaction date rate. Assets and liabilities balances denominated in foreign currencies are translated at the closing rate, with any unrealized foreign exchange gains or losses arising recorded in the Income Statement. The Group realized a net foreign exchange gain of 361 thousand for Trade receivables Trade receivables are valued at their net realizable value. A provision for write-downs is established for doubtful accounts and those that are the subject of litigation, in the amount of the estimated loss. 2.9 Provisions for liabilities and charges Provisions for liabilities and charges at the year end cover liabilities and charges whose amount and subject are clearly identifiable, that events in the process of occurring or having occurred have rendered probable. Provisions for guarantees Systems sold benefit from a one-year guarantee from the date of their effective commissioning. In this regard, the Group recognizes an estimated liability on all products covered by a guarantee at the end of the fiscal year. This estimated liability is determined in the following manner: a coefficient, corresponding to the ratio of fiscal year guarantee costs to sales that generated these expenses, is applied to sales covered by the guarantee at fiscal year-end. Provision for litigation The Company and its subsidiary may be a party to certain contentious procedures that are the subject of a provision based on the estimated risk involved. The Group considers that the outcome of such litigation and procedures, when it occurs, will have no impact on the Group s financial situation, its net profit and its financing Deferred taxes Deferred taxes are calculated using the liability method for all temporary differences arising from the difference between the tax and accounting treatment of assets and liabilities. Tax rates enshrined in law are used in the calculation of deferred taxes. A provision for deferred tax liabilities has been established for an amount equal to deferred tax assets in application of the prudence concept. The main temporary differences arise from non-tax-deductible provisions, primarily comprising pension benefit provisions and other employment benefit provisions, as well as tax losses carried forward Pension benefits and other employee commitments The Group s commitments in the areas of pensions, supplementary pension benefits, and retirement indemnities are accounted for as provisions whose value is estimated on the basis of actuarial valuations. Benefits arising from these provisions are payable at the time an employee retires, on condition that he/she was employed within the Group on his/her retirement date. Commitments are calculated in accordance with the retrospective method, using the following actuarial assumptions and salary projections: - Retirement benefits discount rate 5.00% - Médailles discount rate 4.20% - Inflation rate 2.00% - Annual salary inflation rate 3.50% The following table enables a reconciliation of the valuation of commitments and the provision accrued in the provision for liabilities and charges section of the December 31, 2003 financial statements: 10

11 Page 11 of 19 Present value of Transition and deferred future commitments actuarial differences Accrued provision December 31, (32) 425 Cost of services Interest expenses Transition difference amortization actuarial gain amortization (3) - (3) Benefits paid (3) (3) Actuarial losses (22) (22) - December 31, (54) 487 Cost of services Interest expenses Transition difference amortization - (19) 19 actuarial gain amortization - (1) 1 Benefits paid Actuarial losses December 31, (70) 577 Cost of services Interest expenses Transition difference amortization - - actuarial gain amortization - 3 (3) Benefits paid (63) - (63) Actuarial losses - (7) 7 December 31, (74) Employee profit sharing and employee savings plan The application of the legal formula for the incentive remuneration resulted in a liability of 22,575 at December 31, 2001, and no liability for 2002 and Riber Inc. has instituted a savings plan for its full-time employees. This plan offers eligible employees the possibility of saving part of their remuneration, to which Riber Inc contributes. On an annual basis, Riber Inc s Board of Directors sets the amount of its contribution, which for the 2003 fiscal year was insignificant Estimates The consolidated financial statements are prepared in accordance with French Generally Accepted Accounting Principles, which require that management make estimates that will impact on the value of some Balance Sheet assets and liabilities and some Income Statement items, as well as on the value of some items disclosed in the Notes. It is possible that actual outcomes could differ from these estimates Exceptional items Items not relating to the ordinary activities of the Group are treated as exceptional items. Items relating to ordinary activities that are exceptional by their frequency or amount are included in the results from ordinary activities. 11

12 Page 12 of Earnings per share Basic earnings per share are calculated by dividing the net income by the weighted average number of common shares outstanding during the fiscal year. Diluted earnings per share is calculated using the weighted average number of common shares outstanding, adjusted to take into account the conversion into potentially dilutive common shares of options that have been granted. Weighted average number of common shares outstanding used to compute basic earnings per share Potential common shares, assuming the complete exercise of share subscription warrants/options Weighted average number of common shares, including those arising from the exercise of warrants/options, used to calculate the diluted earnings per share figure December 31, 2003 December 31, 2002 December 31, ,623,869 18,519,999 18,523, ,813 19,417,682 ======== 831,540 19,351,539 ========= 566,937 19,090,646 ========= Treasury shares deducted from consolidated equity have been excluded from the weighted average number of common shares outstanding at December 31, 2003, that is 284,073 shares, as well as 19,864 treasury shares held through a liquidity contract. This calculation is based on the assumption that funds were collected on the date of issuance of share subscription warrants and are assumed to be allocated to the purchase of shares at market price. 3. CONSOLIDATION SCOPE INFORMATION Companies consolidated using the full consolidation method Company Registered office % share capital owned % voting interest owned Riber SA Riber Inc 133 boulevard National RUEIL MALMAISON France 3880 Park Avenue, Edison NJ USA New address from January 19, 2004: 15 Liberty Street, Metuchen NJ USA Parent Parent

13 Page 13 of INTANGIBLE ASSETS Intangible assets solely comprise software. Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2001 Gross book value at January, 1 1,207 1, Accumulated amortization at January 1 (968) (629) (237) book value at January, Change in group structure 0 0 (1) Additions Disposals 0 0 (1) Amortization charges (236) (339) (394) Amortization reversals Gross book value at December, 31 1,303 1,207 1,027 book value at December PROPERTY, PLANT AND EQUIPMENT Land & Machinery & Fittings & Motor Office Total Buildings (1) ind. equip. fixtures vehicles equipment Jan. 1, 2001 gross book value 0 1,013 2, ,023 Jan. 1, 2001 acc. depreciation (0) (598) (1,130) (24) (169) (1,920) Jan. 1, net book value , ,103 Translation differences Additions 9,604 1, ,784 Disposals (0) (148) (15) (0) (20) (183) Depreciation charges (65) (94) (155) (14) (101) (429) Depreciation reversals Dec. 31, net book value 9,539 2,303 1, ,453 Dec. 31, 2001 gross book value 9,604 2,844 2, ,621 Dec. 31, 2001 acc. depreciation (65) (541) (1,270) (38) (254) (2,168) Dec. 31, net book value 9,539 2,303 1, ,453 Translation differences (2) (2) Additions Disposals (0) (0) (0) (25) (5) (30) Depreciation charges (193) (535) (159) (15) (115) (1,017) Depreciation reversals Dec. 31, net book value 9,346 2,361 1, ,140 Dec. 31, 2003 gross book value 9,604 3,437 2, ,305 Dec. 31, 2003 acc. Depreciation (258) (1,076) (1,429) (42) (360) (3,165) Dec. 31, net book value 9,346 2,361 1, ,140 Translation differences (1) (1) Additions Disposals 0 (18) 0 (25) (42) (85) Depreciation charges (194) (628) (164) (10) (118) (1.114) Depreciation reversals Dec. 31, net book value Dec. 31, 2003 gross book value Dec. 31, 2003 acc. depreciation (452) (1.694) (1.593) (27) (452) (4.217) Dec. 31, net book value 9,152 2,470 1, ,972 Including finance leases Dec. 31, 2001 gross book value Dec. 31, 2001 acc. Depreciation (26) (20) (46) Dec. 31, 2002 gross book value Dec. 31, 2002 acc. Depreciation (33) (28) (61) Dec. 31, 2003 gross book value Dec. 31, 2003 acc. Depreciation (14) (18) (32) (1) acquisition of Rueil-Malmaison site in August

14 Page 14 of INVESTMENTS Financial investment Deposits and guarantees Provision for write-downs 0 (250) (178) TOTAL At December 31, 2003, Riber SA held 19,864 treasury shares and cash, pursuant to an existing stock liquidity contract, with a gross value of 450 thousand. These treasury shares and cash were recorded as other receivables, having been recorded in previous years as a financial investment of 250 thousand. 7. INVENTORIES Finished goods 4,836 5,199 3,749 Provision for write-downs (2,811) (2,666) (592) 2,025 2,533 3,157 Work in process 9,743 11,893 12,599 Provision for write-downs (2,838) (2,838) 0 6,905 9,055 12,599 Materials and components 12,993 14,000 15,694 Provision for write-downs (7,209) (7,036) (2,547) 5,784 6,964 13,147 Total Gross 27,572 31,092 32,042 Total Provisions (12,858) (12,540) (3,139) Total - 14,714 18,552 28, TRADE RECEIVABLES AND TRADE PAYABLES Trade Receivables Gross book value 7,343 5,494 7,966 Write-down provisions (1,220) (1,172) (158) Total 6,123 4,322 7,808 Trade Payables Trade payables - operations 1,968 4,264 7,042 Total 1,968 4,264 7, OTHER RECEIVABLES AND PREPAID EXPENSES State receivables VAT Deferred tax assets 2,969 1, Deferred tax liabilities (1) (407) - - Deferred tax assets provision (2,562) (1,352) 0 Prepaid expenses State receivables income tax 3,150 3, Other TOTAL 4,812 5,386 2,278 (1) At December 31, 2003, deferred tax liabilities amounting to 407 thousand were netted against deferred tax assets. 14

15 Page 15 of OTHER OPERATING LIABILITIES Personnel remuneration and benefits Social security Deferred tax liabilities Grants State VAT and related taxes State income tax Commissions payable to agents Other liabilities and accruals Total 1,725 2,706 2, CASH AND MARKETABLE SECURITIES Cash ,587 Marketable securities 9,213 15,992 7,026 Bank overdraft (6) (0) (0) Total 9,765 16,733 9,613 The Group invests its surplus cash balances in highly liquid marketable securities (SICAV). These securities are valued at acquisition cost, reduced as need be by a provision representing the difference between acquisition cost and fair market value. 12. PROVISIONS FOR LIABILITIES AND CHARGES Pension benefits provision Guarantee provision Doubtful accounts provision Other provisions TOTAL December 31, Charges Reversals provision used 0 (48) 0 0 (48) Reversals provision not required 0 0 (112) (762) (874) December 31, Charges Reversals provision used 0 (11) 0 (3) (14) Reversals provision not required December 31, Charges Reversals provision used (65) (25) 0 0 (90) Reversals provision not required December 31, OTHER BORROWINGS Other financial Finance Guarantee loans and debts leases deposits Total December 31, Less than 1 year From 1 to 5 years More than 5 years December 31, , ,100 Less than 1 year From 1 to 5 years 2, ,528 More than 5 years 6, ,838 December 31, , ,527 Less than 1 year From 1 to 5 years 2, ,663 More than 5 years 6, ,140 In July 2002, RIBER SA obtained a 10 million variable-rate mortgage, repayable over 15 years. This financing follows the purchase of an industrial site in August

16 Page 16 of INCOME TAXES AND DEFERRED TAXES Analysis of fiscal year tax credit/(charge) Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2001 Income taxes 163 3,002 (1,348) Deferred taxes 1,227 1,022 (377) Total 1,390 4,024 (1,725) Deferred tax provision (1,220) (1,352) 0 Total Income Statement Amount 170 2,672 (1,725) Analysis of deferred tax balance Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2001 Pension benefit commitments Tax loss carrybacks 1, Non-deductible provisions 1,414 1,409 0 Other deferred tax assets Other deferred tax liabilities (407) (459) 0 Total Gross Deferred Tax 2,562 1, Deferred tax asset provision (2,562) (1,352) 0 Total Balance Sheet Amount Deferred tax assets provided for do not exceed deferred tax liabilities, in application of the prudence principle. Reconciliation of theoretical income tax expense and Income Statement income tax expense Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2001 (Loss)/profit before tax (3,979) (11,955) 4,895 Theoretical income tax expense (using applicable rate for consolidating 1,410 4,236 (1,783) company) Differences between the income tax rates 2 (211) (6) Other differences (22) (1) 64 Sub total 1,390 4,024 (1,725) Provision for deferred tax assets (1,220) (1,352) 0 TOTAL 170 2,672 (1,725) 15. FINANCIAL INSTRUMENTS A significant portion of international sales is realized in US dollars, whereas the majority of the costs incurred are in Euros. In order to shield itself from foreign exchange rate movements, the Group avails itself of foreign exchange futures hedge contracts, whose details are listed in the table below These agreements are concluded at the moment a system sales order is received, based on the payment timetable specified in the sales contract. The resultant guaranteed rate is used to value the system sale and its corresponding receivable Notional value 2,386 3,435 6,571 Market value at exchange rate on December 31, 2,571 3,645 6, Latent position at December (28) 16

17 Page 17 of OTHER COMMITMENTS Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2001 Guarantees granted to customers ,927 Miscellaneous banking guarantees Guarantee for the benefit of ISA Inc Futures hedge commitments 2,386 3,435 0 Mortgage 9,343 9,961 0 Other 689 1,161 0 Materials purchasing commitments 0 0 1, SEGMENT INFORMATION 17.1 Significant events arisen during the fiscal year $US/ exchange rates fluctuations reduced sales, and similarly net profitability, by 1 million Segment and geographic information The Group operates in a single business segment. Therefore, sales and profitability information by business segment is not applicable. However, the following analyses of sales by product line and geographic region is of relevance: Analysis of sales by product line Production machines 3,680 10,208 25,913 Research and development machines 9,903 3,373 2,594 Accessories and components 3,645 5,053 5,733 Total 17,228 18,634 34,240 Analysis of sales by geographic region North America 4,200 6,189 19,539 Asia 6,423 4,989 3,950 Europe 6,422 6,843 10,203 Others TOTAL 17,228 18,634 34, WORKFORCE SIZE AND PERSONNEL COSTS Analysis of workforce size by position Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2001 Managers and engineers Supervisors Employees and technicians Operatives TOTAL Group personnel costs for 2003 amounted to 6,629 thousand, compared with 6,827 thousand for 2002, excluding mandatory contributions to employees incentive remuneration plans. 17

18 Page 18 of REMUNERATION OF EXECUTIVE BOARD AND SUPERVISORY BOARD 920,099 in remuneration was paid to members of the Executive Board and senior management, comprising ten individuals, for services rendered in 2003, compared with 845,095 for 2002 and 859,115 for Members of the Supervisory Board received no remuneration for the years 2003, 2002 and Members of the Executive Board do not benefit from a specific pension scheme different from the statutory management pension plan. 20. SHARE CAPITAL On March 14, 2000, the parent company converted the par value of its shares into Euros, resulting in an increase in share capital of 113,250. On May 24, 2000, the parent company issued 3,720,930 shares with a par value each of 0.16 at a price of 10 per share, within the framework of an international private share placement and the listing of its share on the Nouveau Marché. The new share issuance transaction resulted in proceeds of 37,209,300 (including 595,348.8 allocated to share capital), less 3,517,375 in after-tax transaction costs incurred. During 2001, the Company s share capital increased by 1,517 following the issue of 9,480 new shares arising from the exercise of subscription warrants relating to the first plan. During 2002, the Company s share capital increased by 379 following the issue of 2,370 new shares arising from the exercise of subscription warrants relating to the first plan. During 2003, the Company s share capital increased by 23,274 following the issue of 145,460 new shares arising from the exercise of subscription warrants relating to the first plan. 21. SHARE SUBSCRIPTION WARRANTS AND OPTIONS The timetable at December 31, 2003 of share subscription warrants granted by the Combined Meeting of June 29, 1998 is as follows: Share subscription warrants Total number June 1998 to June 1999 June 1999 to June June 2000 to June 2001 June 2001 to June 2002 June 2002 to June 2003 Issued 630, , , , , ,051 Exercised (251,090) (50,218) (50,218) (50,218) (50,218) (50,218) Cancelled (379,165) (75,833) (75,833) (75,833) (75,833) (75,833) Total Each warrant grants a subscription right to one (1) new share, pursuant to the payment of a price equal to one French Franc (FRF 1) or 0.15 per share. These warrants expired on June 29, During 2003, the Company received 22,175 from the exercise of these warrants. The timetable at December 31, 2003 of share subscription warrants granted by the Combined Meeting of March 14, 2000 is as follows: Share subscription warrants Total number May 2000 to March 2001 March 2001 to March 2002 March 2002 to March 2003 March 2003 to March 2004 March 2004 to March 2005 Issued 350, , ,000 38,000 38,000 23,000 Exercised Total 350, , ,000 38,000 38,000 23,000 Each warrant grants a subscription right to one (1) new share with a par value each of 0.16, pursuant to the payment of a price equal to ten euros ( 10) per share, with these warrants expiring on March 14, The Company s share capital was increased in 2003 by 56,000, pursuant to the exercise of some of these warrants, which resulted in the issuance of 350,000 shares with a par value each of The 300,000 stock subscription options allocated by the Executive Board on October 19, 2001 at an exercise price of 3.08 may only be exercised in three equal instalments four years after their allocation,

19 Page 19 of 19 which is with effect from October The Company s share capital was increased in 2003 by 48,000, pursuant to the exercise of these warrants, which resulted in the issuance of 300,000 shares with a par value each of The Executive Board allocated 100,000 subscription warrants on August 26, 2002 at an exercise price of A third of these warrants may be exercised each year, starting four years after they were granted, that is from August 2006 to August 25, The maximum share capital increase arising from the exercise of these warrants is 16,000, consisting of 100,000 shares with a par value each of No new subscription warrants were allocated during the 2003 fiscal year. 22. TREASURY SHARES A share buyback plan was established by the Executive Board pursuant to the authorization granted to it by the Combined General Meeting of June 13, 2002, confirmed by the Combined General Meeting of June 13, Information note describing this share buyback plan was approved on May 26, 2003 by the Commission des Opérations de Bourse. At December 31, 2003, a 870,698 writedown provision was established, based on the Company s holding of 284,073 treasury shares on that date valued at 1.61, equivalent to its December 2003 average share price. These treasury shares were recorded as Company investments at December 31, 2003, with a gross value of 1,328,056. In addition, Riber SA also owns, within the framework of a share liquidity contract, 203,534 in treasury shares (19,864), for which a writedown provision of 216,424 was established, based on the December 31 share price of Taking into account the large number of transactions carried out with these shares and the objective of the contract, these treasury shares were recorded as other receivables at their net book value of 233,576 (gross book value: 450,000). 23. NET OTHER OPERATING REVENUES/(EXPENSES) The Group realized net other operating revenues of 193 thousand for 2003, compared to net other operating expenses of 1,199 thousand for 2002 and net other operating revenues of 263 thousand for NET FINANCE INCOME(COST) Marketable securities income ,039 Interest expenses (349) (216) 0 Other financial expenses (105) (201) (495) exchange gain/loss (585) Total (41) 25. POST-BALANCE SHEET EVENTS No post-balance Sheet event occurred having a significant impact on the financial statements for the fiscal year ending December 31,