**United StatesSecurities and Exchange Commission**

**Washington, D.C. 20549**

** **

**FORM 20-F**

 

**(Mark One)**

 

| **o**      | ** ** | **Registration statement pursuant to Section 12(b)  or 12(g) of the Securities Exchange Act of 1934** | ** ** |
|------------|------------|-----------------------------------------------------------------------------------------------------------------|------------|
|       |       |                                                                                                            |       |
| ** ** | ** ** | **or**                                                                                                          | ** ** |
|       |       |                                                                                                            |       |
| **ý** | ** ** | **Annual report pursuant to  Section 13 or 15(d)  of the Securities Exchange Act of 1934**                 | ** ** |
| ** ** | ** ** | **For the fiscal year ended  December 31, 2004**                                                           | ** ** |
| ** ** | ** ** | ** **                                                                                                      | ** ** |
|       |       | **or**                                                                                                          | ** ** |
|       |       |                                                                                                            |       |
| **o**      | ** ** | **Transition report pursuant to  Section 13  or 15(d) of the Securities Exchange Act of 1934**        | ** ** |
| ** ** | ** ** | **For the transition period from           to**                         | ** ** |

 

**Commission file number: 000-27346**

 

**Triple P N.V.**

(Exact Name of Registrant as Specified in Its Charter)

 

**The Netherlands**

(Jurisdiction of Incorporation or Organization)

 

**Ir. D.S. Tuynmanweg 104131 PN Vianen,The Netherlands**(Addressof Principal Executive Offices)

 

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

 
| **Title of each class** | ** ** | **Name of each exchange on which registered** |
|-------------------------|------------|-----------------------------------------------|
| Common Shares           |       | Nasdaq Small Cap Market                       |

 

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

 

The number of outstanding shares of each of the issuer’sclasses of capital or common stock as of December 31, 2004 was 30,469,345common shares, EUR 0.04 par value per share.

 

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months

(or for such shorter period that the registrantwas required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

 

Yes ý         Noo

 

Indicate by check mark which financial statement itemthe Registrant has elected to follow.Item 17 o         Item18 ý

 

 

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Unless the contextotherwise requires, references herein to the “Company” or to “Triple P” are toTriple P N.V. and its consolidated subsidiaries. Triple P is a registeredtrademark of Triple P N.V. This Annual Report on Form 20-F also containstrademarks of other companies.

 

Our ConsolidatedFinancial Statements are prepared in accordance with accounting principlesgenerally accepted in the United States of America. Our Consolidated FinancialStatements are expressed in euros. In this Annual Report on Form 20-F,references to “euros”, “EUR” and “€” are to European Monetary Union euros andreferences to “U.S. dollars”, “USD” and “$” are to United States dollars.

 

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| **Table of contents**                                                                   |   |
|-----------------------------------------------------------------------------------------|--------|
|                                                                                    |   |
| Part I                                                                             |   |
| Item 1 - Identity of Directors, Senior  Management and Advisers                         |   |
| Item 2 - Offer Statistics and Expected  Timetable                                       |   |
| Item 3 - Key Information                                                                |   |
| Item 4 - Information on the Company                                                     |   |
| Item 5 - Operating and Financial Review and  Prospects                                  |   |
| Item 6 - Directors, Senior Management and  Employees                                    |   |
| Item 7 - Major Shareholders and Related  Party Transactions                             |   |
| Item 8 - Financial Information                                                          |   |
| Item 9 - The Offering and Listing                                                       |   |
| Item 10 - Additional Information                                                        |   |
| Item 11 - Quantitative and Qualitative  Disclosure about Market Risk                    |   |
| Item 12 - Description of Securities Other  than Equity Securities                       |   |
|                                                                                    |   |
| Part II                                                                            |   |
| Item 13 - Defaults, Dividend Arrearages and  Delinquencies                              |   |
| Item 14 - Material Modifications to the  Rights of Security Holders and Use of Proceeds |   |
| Item 15 - Controls and Procedures                                                       |   |
| Item 16 - [Reserved]                                                                    |   |
| Item 16A - Audit Committee Financial Expert                                             |   |
| Item 16B - Code Of Ethics                                                               |   |
| Item 16C - Principal Accountant Fees and  Services                                      |   |
| Item 16D - Exemptions from the Listing  Standards for Audit Committees                  |   |
| Item 16E - Purchases of Equity Securities  by the Issuer and Related Purchasers         |   |
|                                                                                    |   |
| Part III                                                                           |   |
| Item 17 - Financial Statements                                                          |   |
| Item 18 - Financial Statements                                                          |   |
| Item 18A - Financial Statement Schedule                                                 |   |
| Item 19 - Exhibits                                                                      |   |

 

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Part I

 

Item 1 - Identity of Directors, Senior Management andAdvisers

 

Not applicable

 

Item 2 - Offer Statistics and Expected Timetable

 

Not applicable

 

Item3 - Key Information

 

**Selected Financial Data**

 

The following selectedfinancial data should be read in conjunction with the Consolidated FinancialStatements and related notes thereto, included in this Annual Report on Form 20-F.The selected Statements of Operations data for the years ended December 31,2002, 2003 and 2004, and the Balance Sheet data at December 31, 2003 and2004 have been derived from the Consolidated Financial Statements of theCompany, which have been prepared in accordance with accounting principlesgenerally accepted in the United States (U.S. GAAP), and are included herein.The selected Statements of Operations data for the year ended December 31,2000 and 2001 and the Balance Sheet data at December 31, 2000, 2001 and2002 are derived from audited financial statements not included herein.

 

The summary financial data should be read inconjunction with our Consolidated Financial Statements included elsewhere inthis document, “Risk Factors” and “Item 5 -Operating and Financial Review andProspects”.

 

**Statement of Operations Data**

(in thousands)

 
| ** **                                                | ** ** | **Year Ended December 31,** | ** ** |
|-----------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                | ** ** | **2000**                         | ** ** | **2001** | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                                                | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** | **EUR** | ** ** | **EUR** | ** ** |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Net revenues                                              |       | 122,353                          |       | 110,874 |   | 96,373 |   | 80,371 |   | 74,265 |   |
| Cost of revenues                                          |       | 100,252                          |       | 91,793 |   | 79,438 |   | 66,261 |   | 62,858 |   |
| Gross profit                                              |       | 22,101                           |       | 19,081 |   | 16,935 |   | 14,110 |   | 11,407 |   |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Sales and marketing expense                               |       | 10,227                           |       | 9,743 |   | 9,777 |   | 8,550 |   | 7,215 |   |
| Research and development  expense                         |       | 661                              |       | — |   | — |   | — |   | — |   |
| General and administrative  expense                       |       | 5,770                            |       | 4,658 |   | 5,660 |   | 3,654 |   | 4,137 |   |
| Goodwill amortization                                     |       | 191                              |       | 189 |   | — |   | — |   | — |   |
| Restructuring charge                                      |       | —                           |       | — |   | 1,370 |   | 1,281 |   | 1,750 |   |
| Total operating expenses                                  |       | 16,849                           |       | 14,590 |   | 16,807 |   | 13,485 |   | 13,102 |   |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Operating income from  continuing operations              |       | 5,252                            |       | 4,491 |   | 128 |   | 625 |   | (1,695 | ) |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Other expense, net                                        |       | (517                             | )          | (245 | ) | (648 | ) | (183 | ) | (140 | ) |
| Income (loss) before income  taxes                        |       | 4,735                            |       | 4,246 |   | (520 | ) | 442 |   | (1,835 | ) |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Loss from income taxes                                    |       | —                           |       | — |   | — |   | — |   | (212 | ) |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Net income (loss) from  continuing operations             |       | 4,735                            |       | 4,246 |   | (520 | ) | 442 |   | (2,047 | ) |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Profit (loss) from  discontinued operations               |       | 326                              |       | (377 | ) | — |   | — |   | — |   |
| Loss on disposal of  discontinued operations              |       | —                           |       | (628 | ) | — |   | — |   | — |   |
| Net income (loss) from  discontinued operations  (1) |       | 326                              |       | (1,005 | ) | — |   | — |   | — |   |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Net income (loss)                                         |       | 5,061                            |       | 3,241 |   | (520 | ) | 442 |   | (2,047 | ) |
|                                                      |       |                             |       |   |   |   |   |   |   |   |   |
| Preferred stock dividend                                  |       | 980                              |       | 572 |   | — |   | — |   | — |   |
| Preferred stock withdrawal  premium                       |       | —                           |       | 454 |   | — |   | — |   | — |   |
| Net income (loss) available to  common shareholders       |       | 4,081                            |       | 2,215 |   | (520 | ) | 442 |   | (2,047 | ) |

 

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(1)              DiscontinuedOperations include (see item 4 for more information): Triple P BelgiumN.V./S.A., Software and Services Solutions Business, Belgium.

 

1

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| ** **                                                   | ** ** | **Year Ended December 31,** | ** ** |
|--------------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                   | ** ** | **2000**                         | ** ** | **2001** | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                                                   | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** | **EUR** | ** ** | **EUR** | ** ** |
|                                                         |       |                             |       |   |   |   |   |   |   |   |   |
| Basic and diluted earnings per  share(1)                     |       |                             |       |   |   |   |   |   |   |   |   |
| Net income (loss) per share  from continued operations       |       | 0.12                             |       | 0.10 |   | (0.02 | ) | 0.01 |   | (0.07 | ) |
| Net income (loss) per share  from discontinued operations(2) |       | 0.01                             |       | (0.03 | ) | — |   | — |   | — |   |
| Net income (loss) per share                                  |       | 0.13                             |       | 0.07 |   | (0.02 | ) | 0.01 |   | (0.07 | ) |
|                                                         |       |                             |       |   |   |   |   |   |   |   |   |
| Weighted average shares  outstanding                         |       |                             |       |   |   |   |   |   |   |   |   |
| Basic                                                        |       | 30,469                           |       | 30,469 |   | 30,469 |   | 30,469 |   | 30,469 |   |
| Diluted                                                      |       | 30,469                           |       | 30,469 |   | 30,469 |   | 30,479 |   | 30,469 |   |

 

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(1)  Options to purchase 906,627, 1,203,387and 1,657,084 shares of common stock were outstanding as of December 31,2002, 2003 and 2004, respectively. From these shares, only 10,000 were includedin the computation of diluted earnings per share in 2003 as the optionsexercise price was below the common shares average market price. As a result ofthe losses incurred by the Company in the years 2002 and 2004, there is nodifference between basic and diluted earnings per share because the assumedconversion of stock options would have been anti-dilutive.

 

(2)  Discontinued Operations include:Triple P Belgium N.V./S.A., Software and Services Solutions Business, Belgium.

 
| **Balance Sheet Data** |
|------------------------|
| (in  thousands)        |

 
| ** **                | ** ** | **Year Ended December 31,** | ** ** |
|---------------------------|------------|----------------------------------|------------|
| ** **                | ** ** | **2000**                         | ** ** | **2001** | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** | **EUR** | ** ** | **EUR** | ** ** |
|                      |       |                             |       |   |   |   |   |   |   |   |   |
| Cash and cash equivalents |       | 9,342                            |       | 1,010 |   | 4,207 |   | 5,732 |   | 6,495 |   |
| Working capital(1)        |       | 11,262                           |       | 2,909 |   | 1,874 |   | 1,995 |   | 656 |   |
| Total debt                |       | 459                              |       | 1,163 |   | 1,022 |   | 442 |   | 119 |   |
| Total assets              |       | 39,953                           |       | 27,875 |   | 23,641 |   | 21,116 |   | 21,359 |   |
| Shareholders’ equity |       | 12,576                           |       | 3,492 |   | 2,514 |   | 2,727 |   | 642 |   |

 

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(1) Current assets minus current liabilities.

 

## **Exchange Rate Information**

We publish ourConsolidated Financial Statements in euros. The exchange rate of euros per U.S.dollar as of April 29, 2005 was 0.7741.

 

2

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**Average exchange rates of euros per U.S. dollar are asfollows**

 

(EUR per $ 1.00)

 
| **Calendar  period** | ** ** | **Period  End** | ** ** | **Average  Rate****(1)** | ** ** | **High** | ** ** | **Low** | ** ** |
|----------------------|------------|-----------------|------------|--------------------------|------------|----------|------------|---------|------------|
| 2000                 |       | 1.07            |       | 1.09                     |       | 1.21     |       | 0.97    |       |
| 2001                 |       | 1.12            |       | 1.12                     |       | 1.19     |       | 1.05    |       |
| 2002                 |       | 0.95            |       | 1.06                     |       | 1.16     |       | 0.95    |       |
| 2003                 |       | 0.79            |       | 0.88                     |       | 0.97     |       | 0.79    |       |
| 2004                 |       | 0.74            |       | 0.80                     |       | 0.85     |       | 0.73    |       |

 

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(1)                                  The average of theNoon Buying Rates on the last business day of each full calendar month duringthe period.

 
| **Calendar  period** | ** ** | **High** | ** ** | **Low** | ** ** |
|----------------------|------------|----------|------------|---------|------------|
| December 2004   |       | 0.76     |       | 0.73    |       |
| January 2005    |       | 0.77     |       | 0.74    |       |
| February 2005   |       | 0.78     |       | 0.75    |       |
| March 2005      |       | 0.78     |       | 0.74    |       |
| April 2005      |       | 0.78     |       | 0.76    |       |
| May 2005        |       | 0.81     |       | 0.77    |       |

 

**Risk Factors**

The followingimportant factors, among others, could cause the Company’s actual results todiffer materially from those contained in forward-looking statements made inthis Annual Report on Form 20-F or presented from time to time elsewhereby management.

 

**Our quarterly sales and operating results fluctuatesignificantly**

The Company hasexperienced fluctuations in annual and quarterly operating results andanticipates that these fluctuations will continue. The fluctuations are causedby a number of factors, including the level and timing of customer orders, theability to adjust expense levels to revenue levels, and seasonality.

 

The level and timingof orders placed by customers vary because of changes in customer strategy andvariation in demand for the Company’s products due to, among other things,product life cycles, competitive conditions and general economic conditions. Inthe past, these changes in the level and timing of orders from customers havehad a significant effect on results of operations due to the correspondingchanges in the level of overhead absorption.

 

The Company’s expenselevels are based in significant part on its expectations regarding futurerevenues and are fixed to a large extent in the short term. The time betweenthe initial contact with the customer and final delivery and acceptance of theCompany’s products and services range from one to nine months, making it evenmore difficult to forecast the precise timing of sales. Accordingly, theCompany may be unable to adjust spending in a timely manner to compensate forany unexpected revenue shortfall. Any significant revenue shortfall wouldtherefore have a material adverse effect on the Company’s results of operationsand financial condition.

 

In the past theCompany has realized higher revenues and net income in the fourth quarter ofthe year than in any other quarter. The Company believes that this trend is dueprimarily to the calendar year budgeting cycles and purchasing patterns of itscustomers.

 

Other factorsaffecting the Company’s annual and quarterly operating results include pricecompetition, the mix of products and services sold, the level of experience andefficiency achieved in installing a particular product, the efficiency achievedin managing inventories and fixed assets, the availability of qualifiedtechnical personnel, exchange rate fluctuations and the introduction of newsolutions by the Company and its competitors. Any of these factors or acombination thereof could adversely affect the Company’s annual and quarterlyresults of operations and financial condition in the future.

 

**Triple P has a history of net losses and a substantialaccumulated deficit**

Triple P has had netlosses of EUR 2.0 million for the year ended December 31, 2004 and EUR 0.5million for the year ended December 31, 2002.  Triple P had net income of EUR 0.4 millionfor the year ended December 31, 2003. In addition, Triple P had anaccumulated deficit of EUR 53.6 million as of December 31, 2004. Triple Pmay not be able to achieve or maintain profitability.

 

Because of the losses, total shareholders’equity has decreased substantially. Further losses could lead to a negativetotal shareholders’ equity if the Company fails to attain profitability orobtain additional equity financing. A negative equity position can be viewedadversely by customers and otherwise have an adverse effect on the Company’sbusiness, future results of 

 

3

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operations orfinancial conditions.

 

**Our sales are concentrated inThe Netherlands and we are dependent on economic conditions in The Netherlands**

From 2001 onwards theCompany derived substantially all of its net revenues from sales in TheNetherlands. Accordingly, the Company’s results of operations may be moreaffected by adverse economic conditions in The Netherlands than the results ofmore geographically diversified companies.

 

**The Department of Justice inThe Netherlands accounts for a significant portion of our sales and our futurenet sales could decline if we are unable to maintain this customer relationship**

The Department ofJustice in The Netherlands accounted for approximately EUR 21.2 million or28.5% of consolidated net revenues in the year ended December 31, 2004,approximately EUR 17.3 million or 22% of consolidated net revenues in the yearended December 31, 2003 and approximately EUR 30.7 million or 32% ofconsolidated net revenues in the year ended December 31, 2002.Accordingly, the Company’s results of operations may be more dependent on asingle customer than the results of other companies with a larger base ofsmaller customers. If the Department of Justice in The Netherlands for anyreason determined to cease or significantly decrease the levels of products andservices that it historically has purchased from the Company, it would have a materialadverse effect on the Company’s financial condition and results of operations.The Company has a master-agreement with the Department of Justice in TheNetherlands based on which more than one hundred separate entities orderInformation and Communication Technology Systems (“ICT-systems”). Themaster-agreement expired in September 2004 and has temporarily beencontinued in part until July 1, 2005. The Company is in negotiations withthe Department of Justice in The Netherlands for a partial renewal of thecontract. The original master-contract has been split into six separate smallercontracts. Management expects that it may not be able to compete successfullyon all contracts.

 

**If we fail to attract andretain qualified personnel our business could be harmed**

The Company’s businessand future operating results depend in large part upon its ability to attractand retain qualified management, technical, sales and support personnel for itsoperations. There can be no assurance that the Company will be able to attractand retain such personnel. The inability to attract and retain skilledpersonnel as needed could adversely affect the Company’s business, financialcondition and results of operations.

 

**Because of Labor Laws andPractices, any workforce reductions that we may wish to implement in order toreduce costs may be delayed or suspended**

The ICT market ishighly competitive, and as a consequence, we may need to implement workforcereductions in case of a downturn in order to adapt to such market changes. Inaccordance with labor laws and practices applicable in The Netherlands, areduction of any significance may be subject to certain formal procedures,which can delay or may result in the modification of our planned workforcereductions. Civil court judgments subsequent to appeal proceedings may resultin payments of higher post employment benefits than originally taken in therestructuring charge and therefore affect our financial condition and resultsof operations adversely in the future.

 

**We may fail to competeeffectively in our markets**

The Company encounterscompetition from a broad range of firms in the markets in which it competes.Competitors include computer hardware manufacturers, systems integrators andconsulting organizations, many of which possess greater resources than theCompany, and small independent firms which compete primarily on the basis ofcost of services provided and knowledge of local geographic markets. Finally,the Company faces competition from in-house ICT-staffs of large organizations.The Company believes that its ability to differentiate its product and serviceofferings from those which its potential customers can provide in-house iscritical to its future success.

 

The principal factorsaffecting the competitiveness of the Company’s services and products includequality and availability of personnel, product functionality, flexibility,portability, integration, reliability, performance, product availability, speedof implementation, quality of customer service and support and userdocumentation, vendor reputation, experience, financial stability and costeffectiveness. While the Company believes that it compares favorably withrespect to each of these factors, there can be no assurance that it willcontinue to do so. There can be no assurance that the Company will have thefinancial resources, technical expertise or marketing, distribution and supportcapabilities and availability to compete successfully in the future.

 

**We must introduce new productsand services in a timely fashion and are dependent on market acceptance of newproducts and services**

The market for theCompany’s products and services is characterized by rapidly changingtechnology, evolving industry standards, changes in customer needs and frequentnew product introductions. The Company’s future success will depend on itsability to enhance its current solutions, develop new solutions that meetchanging customer needs, advertise and market its solutions and respond toemerging industry standards and other technological changes on a timely andcost-effective basis. There can be no assurance that the Company will besuccessful in developing new solutions or enhancing its existing solutions on atimely basis, or that such new solutions or enhancements will achieve marketacceptance. The development of new technologically advanced solutions is acomplex and uncertain process requiring high levels of innovation as well asthe accurate anticipation of technological and market trends. If the Companyfails to anticipate or respond adequately to changes in technology and customerpreferences, the introduction of new solutions or enhancement of existingsolutions or any significant delays in their development or introduction couldhave a material adverse effect on the Company’s business, results of operationsand financial condition.

 

**Compliance with InternalControls Evaluations and Attestation Requirements**

Pursuant to Section 404of the Sarbanes-Oxley Act of 2002, Triple P will be required, as a foreignprivate issuer, beginning in fiscal 2006, to perform an evaluation of itsinternal controls over financial reporting and have its auditor publicly attestto such evaluation. We have prepared an internal plan of action for compliance,which includes a timeline and scheduled activities, although as of the date ofthis filling we have not yet finalized the evaluation. Compliance with theserequirements is expected to

 

4

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be expensive andtime-consuming. If we fail to complete this evaluation in a timely manner, orif our independent auditor cannot attest to our evaluation in a timely manner,we could be subject to regulatory scrutiny and a loss of public confidence inour internal controls with a corresponding adverse effect on our share price.

 

**Ourbusiness affects the core activities of our customers, therefore failure tocomplete customer projects on a timely and correct manner could lead tolitigation.**

The Company’s business consists of resellingsystem and network products, ICT-infrastructure management consulting includingsystem and network integration consulting, project management andimplementation services as well as operational ICT-infrastructure managementand maintenance services. Because this business influences the core activitiesof our customers, failure to complete projects in a timely and correct mannercould result in potential claims against the Company.

 

The Company is engaged as plaintiff or defendantin several lawsuits in The Netherlands and Belgium, each originating before2002. The Company has established reserves relating to specific lawsuits, whichrepresent estimates of the Company’s expected liabilities with respect to thesespecific claims. As this litigation may take several years to complete, future eventscould require management to make significant adjustments for revisions to theseestimates. Although the Company believes, based on its current judgments andestimates, that it has sufficient reserves with respect to these contingentliabilities, the amount of damages awarded could differ from such estimates. Inthat case, we may be required to make payments of amounts exceeding theseestablished reserves, which could have a material adverse effect on the Company’sbusiness, future results of operations or financial condition.

 

Item 4 - Information on the Company

 

## **History and Development of the Company**

 

Triple P N.V. wasincorporated in The Netherlands on August 28, 1995 and completed itsinitial public offering on December 15, 1995. The Company is the successorof Triple P Management B.V., which was founded in 1989. Its registered officesare located at Ir. D.S.Tuynmanweg 10, 4131 PN Vianen, The Netherlands (phone+31 347 353 650; fax +31 347 353 666). The Company’s transfer agent andregistrar in the United States is the Bank of New York.

 

During 2000, theCompany divested its minority interest in Media Systems LTD. in the UnitedKingdom. The divestiture had no significant impact on the results ofoperations.

 

During the year 2001,the Company divested its ITC independent training center business. Thisdivestiture had no significant impact on the results of operations. At the sametime the Company committed to discontinue its U.S. subsidiary, Triple P USAInc.

 

During 2002, theCompany ceased operations of Triple P USA Inc. and began the process of legallydissolving the subsidiary, which was finalized in 2003. This liquidation had nosignificant impact on the results of operations in 2002 or 2003.

 

Also during 2002, theCompany sold its Belgian subsidiary, Triple P Belgium N.V./S.A., after thedecision in December 2001 to discontinue the services and softwaresolutions businesses in Belgium, which was based in part on reported operatinglosses in 2001 and the estimated operating losses in 2002, which materializedin 2002. As a result of this decision, the Company no longer serves anycustomers in the Belgian Healthcare market. In 2001, Triple P Belgium N.V./S.A.had net revenues and operating results of approximately EUR 8.0 million and EUR(0.4 million), respectively. The Consolidated Financial Statements of theCompany for the fiscal years 1999 through 2001 have been restated to reflectthe effects to account for the disposal of the Belgian subsidiary asdiscontinued operations in December 2001. Accordingly, the net revenues,costs and expenses, assets and liabilities and cash flows associated with thediscontinued operations have been excluded from the respective captions in theaccompanying Statements of Operations and Statements of Cash Flows and reflectedunder captions identifying them as discontinued operations.

 

During 2004,Mediasystemen B.V. transferred substantially all of its assets and liabilitiesto Triple P Nederland B.V. in order to realize synergy-effects including costreduction and additional growth due to a larger economy of scale. As of July 1,2004, Mediasystemen B.V. is an inactive legal entity of Triple P N.V..

 

During 2002, 2003 and2004, the Company’s capital expenditures for fixed assets were EUR 1.4 million,EUR 0.3 million and EUR 0.2 million respectively. Capital expenditures consistmainly of ICT-infrastructure products for internal use. The higher level ofcapital expenditures for fixed assets in 2002 was mainly related to investmentsin a ERP-software solution, One World of JD Edwards. The Company capitalizedexpenses under fixed assets to an amount of EUR 1.1 million in the year 2002,in implementing this technology.

 

###### **Business Overview**

######  

**TheCompany**

** **

**Introduction**

Triple P is a providerof high quality Information and Communication Technology (“ICT”) infrastructureenterprise solutions to medium and large businesses in The Netherlands. Thesesolutions include ICT-consultancy, ICT-infrastructure systems delivery, projectmanagement and implementation services, and operational ICT-infrastructuremanagement and maintenance

 

5

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services. The Company’ssolutions are compatible with the established products of leading hardwaremanufacturers, including Cisco, Citrix, Hewlett Packard, IBM, Microsoft, Mitel,Novell, Oracle and Sun Microsystems. The Company generated net revenues of EUR74.3 million in 2004 and employed 262 employees at April 29, 2005.

 

Prior to December 31,2002, Triple P organized its business into three divisions: Systems & Networks,Services, and Software & Systems Integration. As of January 1,2003, these three divisions were integrated into a single organization with aSystems and Services business.

 

The Company’s Systemsbusiness (“Systems”) consists of reselling system and network products. TheCompany’s Services business (“Services”) consists of ICT-infrastructuremanagement consulting including system and network integration consulting,project management and implementation services as well as operationalICT-infrastructure management and maintenance services. The Company’s Servicesbusiness in the publishing market also includes standard softwareimplementation, customization and maintenance services.

 

**Market background**

The Company derivessubstantially all of its net revenues from sales in The Netherlands andcurrently has approximately 1,000 customers served through the Company’s directsales channel. Many customers are medium to large sized corporations orgovernment agencies with more than 50 employees. In 2004, the Company finalizedits account management strategy for approximately 250 of its larger clients, aprocess which was started in 2003. The 250 larger clients are assigned to adedicated account manager who is responsible for the sale of the total Systemsand Services portfolio of the Company to those clients.

 

In the third quarterof 2004, the Company decided to accelerate its long-term strategy. Thisstrategy focuses on performing services with a high added value. The Companyhas identified four areas in which it will intensify its efforts:

 

*Mission Critical*

Consulting, design anddelivery of ICT-solutions with high availability and reliability, such asclustered systems, security solutions, storage architectures and consolidationprojects.

 

*IP & Wireless*

Consulting, design anddelivery of advanced ICT-networks, such as wireless voice anddata-communication, IP-based voice and multimedia (VoIP) and telecommunicationsystems.

 

*Managed Services*

Services based onlong-term contracts, such as system management for total ICT-infrastructuresand outsourcing of ICT-systems, including the transfer of ICT-assets andemployees.

 

*Systems*

Selling ICT systemsand performing procurement outsourcing services for ICT-assets based on servicelevel agreements, such as volume procurement for hardware and softwarelicenses, contract management, logistics and administration.

 

The Company’s approachis to work with customers to analyze their current ICT-infrastructures, definetheir ICT-objectives and functional requirements, and determine their systemsand software requirements. The Company can also provide a customer with adetailed plan for the operational ICT-infrastructure management and maintenanceincluding, where relevant, an implementation plan for the required migrationfrom an existing ICT-infrastructure.

 

The costs involved incontracts vary greatly depending on the size, scope and complexity of theproject concerned. For the Systems business, the contracts range from EUR25,000 for reselling a small PC-based network to more than EUR 1 million forreselling a large network employing Internet gateway, remote-accesscapabilities and with one or more high availability clusters. A typicalpurchase order ranges from EUR 25,000 to EUR 250,000. Customers frequentlypurchase hardware upgrades and increased network capacity subsequent to theinitial sale, which provides additional revenues. For the Services business,consulting, project management and implementation contracts range from EUR2,500 for the design and implementation of a small PC-based network to morethan EUR 100,000 for the design and implementation of a complex networkincluding complex storage or security issues. Recurring contracts range fromEUR 1,000 a year for maintenance of a small PC-based network to more than EUR250,000 a year for operational ICT-infrastructure management and maintenance oflarger networks including one or more high availability clusters.

 

**Systems business**

The Companyspecializes in front to back-office solutions comprised of multi-vendor products.The Company’s strategic relationships with leading suppliers enable it to offercustomers both one-stop shopping and independent consultancy services. Systemsofferings include highly functional front-office solutions and solutions forback-office environments focused on high-availability clustering, reliable datastorage, mission-critical local area network (“LAN”) backbones andinterconnects, bandwidth management, and security and directory services. TheCompany resells personal computers, servers, network components and telephoneswitches manufactured by companies such as Cisco, Citrix, Hewlett Packard, IBM,Mitel and Sun Microsystems. The Company markets complete networks, Intranetsand Internet gateways based on Gigabit Ethernet, Switched Ethernet, virtualLANs and LAN switching technologies, among others, supplied by leading vendorsin the industry such as Cisco, Mitel and Hewlett Packard. The Company alsosells, as necessary, third-party software, including networking and enterprisemanagement software from providers such as Microsoft, Novell and Oracle. TheCompany’s solutions can be configured using a variety of network operatingsystems, including Microsoft Windows, Linux, Sun Microsystems’ Unix and Novell’sNetware.

 

**Services business**

The Companyspecializes in independent system and network integration consulting servicesand provides a customer a

 

6

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detailed networkinfrastructure design and, where relevant, an implementation plan for therequired migration from an existing network configuration. The Company’sproject management and implementation services is designed to ensure that thenetwork infrastructure concepts work as designed. Once the new systems havebeen brought online, the Company’s certified specialists assist customers bymanaging the ICT-infrastructure or co-managing the ICT-environments with them.The Company’s Services business is focused on the continuing task of ensuringlong-term reliable performance of ICT-infrastructure environments, with astrong emphasis on control of the total cost of ownership.

 

Service levelagreements provide customers with access to the Company’s specializedconsulting, project management and operational ICT-infrastructure managementservices. These services include, among other things, selective outsourcing,on-site and remote support as well as installation, implementation andmaintenance services. This approach enables the Company to control virtuallyany given ICT-infrastructure environment. The Company has developed specialistconsulting and engineering services that enable customers to build individualstate-of-the-art management services systems and methods. The Company’sapproach to operational services, such as repairs and systems recovery, enablesit to respond to customers’ problems 24 hours a day, seven days a week, 52weeks a year and to achieve response times as fast as two hours, depending onthe service level agreement.

 

The Company operatesan IT-Management Center to monitor customers’ configurations and to coordinatenecessary systems and network services. This enables the Company’s engineers toprovide both on-site and remote assistance to customers. The Company’s hardwaremaintenance agreements are usually for a one year term and renew automatically,unless notice of termination is submitted at least 90 days prior to expiration.However, following the trend in the industry, an increasing percentage of theCompany’s new maintenance business is on a time-and-materials basis. TheCompany’s high availability server and networking support agreements areusually for a one to three year term.

 

In the publishingmarket, the Company’s Services business focuses on work flow management andmulti-media content management based on standardized third party softwarecomponents. For several years, the Company has been a leading provider ofnewspaper publishing software in The Netherlands. In order to achieve a moreefficient market approach and to bring synergy between this activity and theinfrastructure activities of Triple P Nederland B.V.,  the activities of Mediasystemen B.V. havebeen integrated with the activities of Triple P Nederland B.V.

 

**Seasonalityof the business**

The Company hasexperienced fluctuations in annual and quarterly operating results andanticipates that these fluctuations will continue. The fluctuations are causedby a number of factors, including the level and timing of customer orders, theability to adjust expense levels to revenue levels, and seasonality. The leveland timing of orders placed by customers vary because of changes in customerstrategy and variation in demand for the Company’s products due to, among otherthings, product life cycles, competitive conditions and general economicconditions.

 

**Competition**

Competition is fiercein all segments of the worldwide ICT-market. The Company’s competitors arenumerous and vary widely in size and resources, depending upon the market,customer and geographic area involved. The Company faces competition fromsystems integrators, consulting organizations, telecommunications companies,hardware manufacturers and information technology solution providers. TheCompany’s primary competitors in the Systems business include Simac,Fujitsu-Siemens, PQR, IBM, Hewlett Packard and Dell. In the Services business,the Company’s primary competitors include Atos Origin, Getronics, IBM, Imtech,and Simac.

 

7

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**Organizational Structure**

 

The following tablesets forth the legal structure of Triple P N.V. as of April 29, 2005.

 
|   |   | Triple  P N.V.               |   |   |
|--------|--------|------------------------------|--------|--------|
|   |   | The  Netherlands             |   |
|   |   |                         |   |   |
|   |   | 100%                         |   |   |
|   |   |                         |   |   |
|   |   | Triple  P Management B.V.    |   |
|   |   | The  Netherlands             |   |
|   |   |                         |   |   |
|   |   |                         |   |   |
| 100%   |   | Triple P Nederland B.V.      |   |
|   |   | The  Netherlands             |   |
|   |   |                         |   |   |
|   |   |                         |   |   |
| 100%   |   | Triple  P eActivity B.V.     |   |
|   |   | The  Netherlands             |   |
|   |   |                         |   |   |
|   |   |                         |   |   |
| 100%   |   | Inactive  legal entities (1) |   |
|   |   | The  Netherlands / Belgium   |   |

 

----

(1)          Contains several inactive legal entities in TheNetherlands and Belgium each of which is wholly owned by either Triple PManagement B.V. or Triple P N.V. (see Exhibit 8 included in Item 19 ofthis Annual Report on Form 20-F).

 

**Property andEquipment**

 

The Company leasesoffice space primarily in Vianen, The Netherlands. The location, itsapproximate size used by the Company and date of lease expiration are set forthbelow.

 
| **Location**            | ** ** | **Size (sq meters)** | ** ** | **Function**                           | ** ** | **Lease expiration** |
|-------------------------|------------|----------------------|------------|----------------------------------------|------------|----------------------|
| Vianen, The Netherlands |       | 9,500                |       | Headquarters, Sales, Operations, Staff |       | 2014                 |

 

The Company alsoleases 6,000 square meters in a building next to the Company’s headquarters inVianen, of which 5,000 square meters has been subleased until 2007, the end ofthe lease contract. For the expected losses related to the remaining 1,000square meters, a reserve has been included in the consolidated financialstatements for 2004.

 

For the Servicesbusiness, the Company leases other small locations in The Netherlandsaggregating approximately 330 square meters. The Company’s net rental expensefor the year ended December 31, 2004, was approximately EUR 1.3 milliondue to subrental income of approximately EUR 0.5 million.

 

Item 5 - Operating and Financial Review and Prospects

 

**Management’s Discussion and Analysis of Financial Conditionsand Results of Operations**

 

**Introduction**

 

**Forward looking statements**

This section containsforward-looking statements within the meaning of the U.S. Private SecuritiesLitigation Reform Act of 1995 concerning the Company’s business, operations andfinancial condition. All statements other than statements of historical factsincluded in this Annual Report on Form 20-F regarding the Company’sstrategy, future operations, financial position, costs, prospects, plans andobjectives of management are forward-looking statements. When used in thisAnnual Report on Form 20-F

 

8

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the words “expect”, “anticipate”,“intend”, “plan”, “believe”, “seek”, “estimate”, and similar expressions areintended to identify forward-looking statements, although not allforward-looking statements contain these identifying words. Because theseforward-looking statements involve risks and uncertainties, actual resultscould differ materially from those expressed or implied by theseforward-looking statements for a number of important reasons, including thosediscussed under “Risk Factors” and elsewhere in this Annual Report on Form 20-F.

 

The Company cannotguarantee any future results, levels of activity, performance or achievements.The forward-looking statements contained in this Annual Report on Form 20-Frepresent management’s expectations as of the date of this Annual Report on Form 20-Fand should not be relied upon as representing the Company’s expectations as ofany other date. Subsequent events and developments will cause management’sexpectations to change. However, while the Company may elect to update theseforward-looking statements, the Company specifically disclaims any obligationto do so, even if its expectations change.

 

**Critical Accounting Policies**

A critical accountingpolicy is an accounting policy that is both material to the presentation of theCompany’s financial statements and requires management to make difficult,subjective or complex judgments that could have a material effect on theCompany’s financial condition and results of operations. Specifically, criticalaccounting estimates have the following attributes: (i) management isrequired to make assumptions about matters that are uncertain at the time ofthe estimate; and (ii) different estimates that management couldreasonably have used, or changes in the estimate that are reasonably likely tooccur, would have a material effect on the Company’s financial condition orresults of operations.

 

Estimates andassumptions about future events and their effects cannot be determined withcertainty. The Company bases its estimates on historical experience and onvarious other assumptions believed to be applicable and reasonable under thecircumstances. These estimates may change as new events occur, as additionalinformation is obtained and as the Company’s operating environment changes.

 

The Company’sConsolidated Financial Statements are prepared in conformity with accountingprinciples generally accepted in the United States. For a comprehensivediscussion of the Company’s accounting policies, see note 2 in the accompanyingConsolidated Financial Statements included in Item 18 of this Annual Report on Form 20-F.The Company does not have any ownership interest in any special purposeentities.

 

The preparation offinancial statements in conformity with generally accepted accountingprinciples requires management to adopt critical accounting policies, asdescribed above, and therefore to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting periods. These estimates,particularly estimates relating to revenue recognition, allowances for doubtfulaccounts, litigation and contingencies, deferred taxes, long-lived assets,restructuring and impairment charges, post employment benefits and leases havea material impact on the Company’s financial statements, and are discussed indetail throughout management’s analysis of the results of operations asdiscussed below. The Company bases its estimates on historical experience andon various other assumptions that it believes are reasonable under thecircumstances, the results of which form the basis for making judgments aboutthe carrying value of assets and liabilities that are not readily apparent fromother sources. Actual results and outcomes could differ from these estimatesand assumptions. Additional information regarding risk factors that may impactthe Company’s estimates is included in “Item 3 - Risk Factors” in this AnnualReport on Form 20-F.

 

The Company appliesthe following critical accounting policies in the preparation of itsConsolidated Financial Statements:

 

*Revenue recognition*

Systems revenuesconsist of revenues from the sale of ICT-infrastructure systems of third partyhardware and third party software. For arrangements where the Company does notinstall the systems, or installation is deemed to be inconsequential orperfunctory, revenues are recognized upon delivery when evidence of anarrangement exists, title and risk of loss have been transferred for both thethird party hardware and third party software, amounts are fixed anddeterminable and collection is deemed probable. For arrangements where theCompany installs the systems and installation is not deemed to beinconsequential or perfunctory, revenue is deferred until all obligations arefulfilled and all other revenue recognition criteria are met. If thearrangement includes a customer acceptance provision, or if there isuncertainty about customer acceptance of products sold or services rendered,revenue is deferred until evidence of customer acceptance is received.

 

Services revenuesconsist of revenues from maintenance and management service arrangements andconsulting and implementation services. Revenues from maintenance andmanagement service arrangements are recognized ratably over the term of thecontract period once evidence of an arrangement exists, amounts are fixed anddeterminable and collection is deemed probable. Revenues from consulting and implementation services are recognized on atime and materials basis as services are being performed, when all otherrevenue recognition criteria are met.

 

When elements such asthe sale of systems, maintenance and management service arrangements andconsulting and implementation services are contained in a single arrangement,or in related arrangements with the same customer, the Company allocatesrevenues to each element based on its relative fair value, provided that suchelement meets the criteria for treatment as a separate unit of accounting. Theprice charged when an element is sold separately generally determines fairvalue. In the absence of fair value for undelivered elements, the arrangementis accounted for as a single unit of accounting, resulting in delay of revenuerecognition for all elements until all systems and services are delivered andall other obligations are fulfilled.

 

Shipping and handlingcosts are included in cost of sales.

 

9

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Customer depositsrepresent cash received from customers in advance of fulfilling customerpurchase orders. Revenues related to such transactions are recognized when allrevenue recognition criteria are met and other obligations fulfilled. Aprovision for warranty costs is recorded upon revenue recognition whenappropriate.

 

Deferred revenueprimarily consists of revenue deferred under maintenance and managementcontracts. The Company generally invoices its customers in advance and, asdiscussed above, recognizes revenues on a pro rata basis over the term of thecontract.

 

*Allowance for DoubtfulAccounts*

The Company providesan allowance for possible doubtful accounts for estimated losses resulting fromthe inability of its customers to make required payments. The allowance fordoubtful accounts is based on management’s periodic review of accounts,including the aging of accounts receivable, making use of past experience withsimilar accounts receivable. Based on current judgments and estimatesmanagement believes the allowance for doubtful accounts to be adequate.However, if the financial condition of the Company’s customers were todeteriorate, resulting in an impairment of their ability to make payments, oractual defaults were higher than the Company’s historical experience,management’s estimates of the recoverability of amounts due to the Companycould be overstated, which could have an adverse impact on the Company’soperations. As of December 31, 2004, the Company had an allowance fordoubtful accounts of EUR 1.1 million.

 

*Litigation and Contingencies*

The Company is subjectto the possibility of various loss contingencies arising in the ordinary courseof business. The Company considers the likelihood of loss or impairment of anasset or the incurrence of a liability, as well as its ability to reasonablyestimate the amount of loss in determining loss contingencies. An estimatedloss contingency is accrued when it is probable that an asset has been impairedor a liability has been incurred and the amount of loss can be reasonablyestimated. Management regularly evaluates current information available to theCompany to determine whether such accruals should be adjusted.

 

The Company is engagedas plaintiff or defendant in several lawsuits in The Netherlands and Belgium,each originating prior to 2002. The Company has established reserves ofapproximately EUR 0.8 million relating to specific lawsuits, which representestimates of its probable liabilities with respect to these specific claims. Asthis litigation may take several years to complete, future events could requiremanagement to make significant adjustments for revisions to these estimates.The Company does not believe that based on current judgments and estimates theoutcome in any of these lawsuits individually or in the aggregate would have amaterial adverse impact on the Company’s business, future results of operationsor financial condition.

 

*Deferred Taxes*

The Company records avaluation allowance to reduce its deferred tax assets to the amount that ismore likely than not to be realized. As of December 31, 2004, the netdeferred tax asset was EUR 0.4 million after deduction of a valuation allowanceamounting to EUR 8.3 million. While management has considered future taxableincome and ongoing prudent and feasible tax planning strategies in assessingthe need for a valuation allowance, if management were to subsequentlydetermine that the Company would be able to realize deferred tax assets in thefuture in excess of its net recorded amount, an adjustment to deferred taxassets would increase income in the period such determination was made.Similarly, should management determine that the Company would not be able torealize all or part of net deferred tax assets in the future, an adjustment todeferred tax assets would reduce income in the period such determination wasmade. In determining net deferred tax assets and valuation allowances,management is required to make judgments and estimates related to projections ofprofitability, the timing and extent of the utilization of net operating losscarry forwards, applicable tax rates, transfer pricing methodologies andprudent and feasible tax planning strategies.

 

*Long-lived Assets*

The Company evaluatesthe carrying value of all long-lived assets whenever events or circumstancesindicate the carrying value of assets may exceed their recoverable amounts. Animpairment loss is recognized when the estimated future cash flows(undiscounted and without interest) expected to result from the use of an assetare less than the carrying amount of the asset. Measurement of an impairmentloss is based on fair value of the asset computed using discounted cash flow ifthe asset is expected to be held and used. Measurement of an impairment lossfor an asset held for sale would be based on fair market value less estimatedcosts to sell. Significant management judgment is required in the forecastingof future operating results and proceeds from disposition which are used in thepreparation of projected cash flows and, should different conditions prevail orjudgments be made, material impairment charges could be necessary.

 

*Restructuring and ImpairmentCharges*

Triple P applies thecriteria defined in SFAS No. 146, “Accounting for Costs Associated withExit or Disposal Activities” and SFAS No. 112, “Employers’ Accounting forPost Employment Benefits,” in order to determine when a liability forrestructuring or exit costs should be recognized.

 

With respect toemployee termination costs, we apply SFAS No. 146 (effective sinceJanuary, 2003) in the case of benefit arrangements that, in substance, do notconstitute an ongoing benefit arrangement. Triple P applies SFAS No. 112when termination benefits are provided under an ongoing benefit arrangement.SFAS No. 146 provides that a liability for a cost associated with an exitor disposal activity that does not constitute an ongoing benefit arrangementshall be recognized and measured initially at its fair value in the period inwhich the liability is incurred; that is when a detailed exit or disposal planexists, has been committed to by management and has been communicated to theemployees. SFAS No. 112 provides that a liability for termination benefitsprovided under an ongoing benefit arrangement covered by SFAS No. 112shall be recognized when the likelihood of future settlement is probable andcan be reasonably estimated. As a result, whether an employee termination planconstitutes an ongoing benefit arrangement or not, and accordingly, whether SFASNo. 146 or SFAS No. 112 is applied, will affect the timing ofrecognition of employee termination costs, as well as the amounts recognized.

 

10

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During the secondquarter of 2003, the Company implemented measures to reduce its costs inanticipation of lower revenues. The Company terminated 43 of its 373 employeesand, as a result, incurred a restructuring charge of EUR 1.3 million inconnection with related expenses in the second quarter of 2003. At December 31,2003, the remaining restructuring provision was EUR 0.2 million which has beenpaid during 2004.

 

In the third quarterof 2004, the Company decided to accelerate its long-term strategy. Thisstrategy focuses on performing services with a high added value. The Companyhas identified four areas in which it will intensify its efforts: MissionCritical, IP & Wireless, Managed Services and Systems.

 

Additionally, Triple Phas decided to accelerate its plan to phase out low margin activities due tothe weakness in the IT services market. Consequently, Triple P has implementeda restructuring to eliminate positions that do not directly contribute to thesuccess of the four focus areas.  Thisrestructuring has resulted in a reduction of 75 positions and an involuntarylay off for 62 employees. As a result, the Company incurred a restructuringcharge of EUR 1.8 million in connection with related expenses in 2004 and 2005.At December 31, 2004, the remaining restructuring provision was EUR 1.0million which is expected to be paid during 2005.

 

*Postemployment benefits*

We sponsor severaldefined benefit plans and contribution plans for employees. Effective in 2002,we adopted SFAS No. 87, Employers’ Accounting for Pensions (“SFAS No. 87”),and related accounting standards of the FASB.

 

The defined benefitpension plans pay benefits to employees at retirement using formulas based onparticipants’ years of service and compensation. We also contribute to variousmulti-employer pension plans. The amount that we are obligated to contribute toeach such plan and the timing of our contributions is determined under theterms of the applicable collective bargaining agreements.

 

Recorded pensionsreflect our best estimate of the future cost of honoring our obligations underthese benefit plans. We believe the accounting estimate relating to costs forpensions is a critical accounting estimate because changes in it can materiallyaffect the projected benefit obligations and net periodic pension costs.

 

In accounting fordefined benefit plans, actuarial calculations are made. These calculationscontain key assumptions, which include: employee turnover, mortality andretirement ages, discount rates, expected returns on assets, future salary andbenefit levels. The assumptions for the calculations are highly uncertain andrequire a large degree of judgement. Each year we review the key assumptionsused in the determination of the pension obligation plan assets and netperiodic pension cost as prescribed by SFAS No. 87.

 

In accordance withU.S. GAAP, the net periodic benefit cost is determined at the beginning of theyear based on applicable assumptions at that time. For 2004 the net periodicbenefit cost was EUR 0.1 million.

 

The pensionobligations are determined at measurement date of the plans. The measurementdate is December 31. The discount rate has been determined on the basis ofthe current government bond yield curve in combination with a credit spreadreflecting the current difference in yield rates between government bonds andhigh-quality corporate bonds. The discount rate thus determined is a weightedaverage interest rate reflecting the timing and amounts of the projectedpension payments. High-quality bonds are bonds with one of the two highestratings issued by a major rating agency (S&P: AA or higher).

 

*Lease*

The Company and itssubsidiaries lease their current facilities under operating leases that expireat various dates through the year 2014. At December 31, 2004, the Companyhas permanently vacated a portion of its leased facilities in Vianen; for theportion management expects not to be able to sublease the facilities to others,for the period of one year management has recorded a reserve of approximatelyEUR 0.2 million related to anticipated sublease losses for the facility basedon our estimate of sublease rental income.

 

**Discussion and analysis ofresults of operations: key figures**

 

**Summary financial and otheroperating data**

(in thousands)

 
| ** **                          | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|
| **Activity**                        | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                          | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** |
|                                |       |                             |       |   |   |   |   |
| Net revenues                        |       | 96,373                           |       | 80,371 |   | 74,265 |   |
| Gross profit                        |       | 16,935                           |       | 14,110 |   | 11,407 |   |
|                                |       |                             |       |   |   |   |   |
| Sales and marketing expense         |       | 9,777                            |       | 8,550 |   | 7,215 |   |
| General and administrative  expense |       | 5,660                            |       | 3,654 |   | 4,137 |   |
| Restructuring charge                |       | 1,370                            |       | 1,281 |   | 1,750 |   |
| Total operating expenses            |       | 16,807                           |       | 13,485 |   | 13,102 |   |
|                                |       |                             |       |   |   |   |   |
| Operating income (loss)             |       | 128                              |       | 625 |   | (1,695 | ) |
|                                |       |                             |       |   |   |   |   |
| Net income (loss)                   |       | (520                             | )          | 442 |   | (2,047 | ) |
|                                |       |                             |       |   |   |   |   |
| Net income (loss) per share         |       | (0.02                            | )          | 0.01 |   | (0.07 | ) |

 

11

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**Summary financial data as a percentage of total net revenues**

(in percentages)

 
| ** **                          | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|
| ** **                          | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                          | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** |
|                                |       |                             |       |   |   |   |   |
| Net revenues                        |       | 100.0                            | %          | 100.0 | % | 100.0 | % |
| Gross profit                        |       | 17.6                             | %          | 17.6 | % | 15.4 | % |
|                                |       |                             |       |   |   |   |   |
| Sales and marketing expense         |       | 10.1                             | %          | 10.6 | % | 9.7 | % |
| General and administrative  expense |       | 5.9                              | %          | 4.5 | % | 5.6 | % |
| Restructuring charge                |       | 1.4                              | %          | 1.6 | % | 2.3 | % |
| Total operating expenses            |       | 17.4                             | %          | 16.7 | % | 17.6 | % |
|                                |       |                             |       |   |   |   |   |
| Operating income (loss)             |       | 0.1                              | %          | 0.8 | % | (2.3 | )% |
|                                |       |                             |       |   |   |   |   |
| Net income (loss)                   |       | (0.5                             | )%         | 0.5 | % | (2.8 | )% |

 

**Results of operations in 2004**

The Company’sconsolidated statement of operations in 2004 reflected net revenues of EUR 74.3million, operating loss of EUR 1.7 million and a net loss of EUR 2.0 million.

 

Due to the weakness ofthe IT services market, the Company decided to accelerate its long-termstrategy by adoption of a restructuring plan in 2004. As a result, the 2004results included a restructuring charge of EUR 1.8 million relating to thetermination of employee contracts, of which EUR 0.8 million in cashexpenditures were made in 2004. The Company expects to make additional cashpayments of approximately EUR 1.0 million in 2005. The Company expects annualfixed costs to decrease by approximately EUR 3.2 million as a result of thedecrease in head count.

 

Further, 2004 resultsincluded a EUR 0.2 million charge for expected future losses related toleasehold facilities permanently vacated. This charge was reflected in 2004 asgeneral and administrative expense.

 

As a result of theCompany’s positive cash flow of EUR 0.8 million in 2004, Triple P had a cashbalance of EUR 6.5 million as of December 31, 2004. The December 31,2004 Balance Sheet showed shareholders’ equity of EUR 0.6 million, or 3% oftotal assets.

 

**Results of operations in 2003**

The Company’sconsolidated statement of operations in 2003 reflected net revenues of EUR 80.4million, operating income of EUR 0.6 million and a net income of EUR 0.4million.

 

The Companyimplemented additional cost reduction measures in the second quarter of 2003 inresponse to lower than expected levels of net revenues in the first half of2003. As a result, the 2003 results included a restructuring charge of EUR 1.3million relating to the termination of employee contracts, of which EUR 1.1million was paid in 2003. The Company made additional payments of the remainingapproximately EUR 0.2 million in the first half of 2004. The Company’s annualfixed costs decreased by approximately EUR 2.5 million as a result of thisrestructuring, which was reflected in operating results starting in the secondquarter of 2004.

 

As a result of theCompany’s positive cash flow of EUR 1.9 million in 2003, the Company’s cashbalance increased to EUR 6.2 million at December 31, 2003. The December 31,2003 Balance Sheet showed shareholders’ equity of EUR 2.7 million, or 13% oftotal assets.

 

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**Discussion and analysis of results of operations: 2004 compared with2003**

 

**Results of operations**

 

**Net revenues**

(in millions)

 
| ** ** | ** ** | **Year Ended December 31,** | ** ** |
|------------|------------|----------------------------------|------------|
| ** ** | ** ** | **2003  EUR**                    | ** ** | **%** | ** ** | **2004  EUR** | ** ** | **%** | ** ** |
| Systems    |       | 53.4                             |       | 66.4 |   | 51.9 |   | 69.9 |   |
| Services   |       | 27.0                             |       | 33.6 |   | 22.4 |   | 30.1 |   |
| Total      |       | 80.4                             |       | 100.0 |   | 74.3 |   | 100.0 |   |

 

**Gross profit / gross margin**

(inmillions)

 
| ** ** | ** ** | **Year Ended December 31,** | ** ** |
|------------|------------|----------------------------------|------------|
| ** ** | ** ** | **2003  EUR**                    | ** ** | **%** | ** ** | **2004  EUR** | ** ** | **%** | ** ** |
| Systems    |       | 5.8                              |       | 10.9 |   | 4.9 |   | 9.4 |   |
| Services   |       | 8.3                              |       | 30.8 |   | 6.5 |   | 29.0 |   |
| Total      |       | 14.1                             |       | 17.6 |   | 11.4 |   | 15.4 |   |

 

*Net revenues*

Net revenues in 2004were EUR 74.3 million compared to EUR 80.4 million in 2003, a decrease of EUR6.1 million, or 7.6 %.

Systems revenuesdecreased approximately EUR 1.5 million, or 2.8%. This decrease, which was aresult of price pressure and price erosion, was offset in part higher salesvolumes to the Department of Justice in The Netherlands, which accounted in2004 for net revenue of approximately EUR 21.2 million compared to EUR 17.3million in 2003.

 

Services revenuesdecreased approximately EUR 4.6 million or 17% due to the continued difficulteconomic climate in which clients have postponed major investments inICT-infrastructure. As a result, revenues from design services, delivery andrelated project management and installation services of ICT-infrastructuresystems decreased substantially. Moreover, these conditions and the fiercecompetition have led to severe price-cutting which was an important cause ofthe decrease in revenues.

 

*Gross margin*

Total gross margin in2004 decreased from 17.6% to 15.4%. The main reasons for this decrease were:

 

• continued pricepressure resulting from competition and weak demand;

• a change in the mixof products and services sold; and

• the inability torapidly reduce operating costs.

 

Due to competition,the Company lowered its sales prices in order to prevent a more significantdecrease in revenues. The drop in gross margin occurred both in Systems andServices revenues but was more pronounced with respect to Systemsrevenues.  Services revenues decreasedmore than Systems revenues. Because the Services business has a higher marginthan the Systems business, this change in sales mix caused a decrease inoverall gross margin. The gross margin on Services revenues decreased as aresult of lower revenues and the fact that the operating costs were not reducedas quickly as the decrease of the level of sales.

 

**Operating expenses**

(in millions)

 
| ** **                          | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|
| ** **                          | ** ** | **2003**                         | ** ** | **2004** | ** ** |
| ** **                          | ** ** | **EUR**                          | ** ** | **EUR** | ** ** |
| Sales and marketing expense         |       | 8.6                              |       | 7.2 |   |
| General and administrative  expense |       | 3.6                              |       | 4.1 |   |
| Restructuring charge                |       | 1.3                              |       | 1.8 |   |
| Total operating expenses            |       | 13.5                             |       | 13.1 |   |

 

13

----

 

**Operating expenses**

(as percentage of revenues)

 
| ** **                          | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|
| ** **                          | ** ** | **2003**                         | ** ** | **2004** | ** ** |
| ** **                          | ** ** | **%**                            | ** ** | **%** | ** ** |
| Sales and marketing expense         |       | 10.6                             |       | 9.7 |   |
| General and administrative  expense |       | 4.5                              |       | 5.6 |   |
| Restructuring charge                |       | 1.6                              |       | 2.3 |   |
| Total operating expenses            |       | 16.7                             |       | 17.6 |   |

 

 

*Sales and marketing expense*

Sales and marketingexpense was EUR 7.2 million in 2004 compared to EUR 8.6 million in 2003, adecrease of 16.3%. This decrease was partially the result of the decrease inthe number of employees resulting from the implementation of the 2003 and 2004restructuring program. However, as a percentage of net revenues, sales andmarketing expense only decreased from 10.6% to 9.7%, primarily due to thedecrease in overall revenues.

 

*General and administrativeexpense*

General andadministrative expense was EUR 4.1 million in 2004 compared to EUR 3.6 millionin 2003, an increase of 13.8%. This increase is primarily a result of EUR 0.3million in additional charges in 2004 related to the elimination of positionsother than those included under a restructuring program. As a percentage of netrevenues, general and administrative expense increased from 4.5% to 5.6%.

 

*Restructuring charge*

In the third quarterof 2004, the Company decided to accelerate the implementation of its strategyof focusing on performing services with a high added value and phasing out lowmargin activities. Consequently, Triple P has implemented a restructuring planto eliminate positions that do not directly contribute to its target markets.This restructuring has resulted in a reduction of 75 positions and aninvoluntary lay off of 62 employees. The Company incurred a restructuringcharge of EUR 1.8 million in connection with this restructuring. At December 31,2004, the remaining restructuring provision was EUR 1.0 million, all of whichis expected to be paid during 2005. As a result of these additional measures,the Company’s annual expenses are expected to decrease by approximately EUR 3.2million, which is expected to be fully reflected in operating resultscommencing in the third quarter of 2005.

 

*Total Other expense, net*

Total other expense, net decreased from EUR 0.2million in 2003 to EUR 0.1 million in 2004 due primarily to decreased interestexpense and higher interest income in 2004. This was due to the positive cashposition during 2004.

 

*Provision for income taxes*

Due to theavailability of net operating losses (“NOL’s”), the Company incurred no incometax expense in 2003. As of December 31, 2004, the Company has total NOL’sof approximately EUR 27.1 million. The Company has recorded a deferred taxasset of EUR 0.4 million net of allowances as it expects that it is more likelythan not that this portion of the NOL’s will be realized. This is a decrease ofEUR 0.2 million compared to 2003, with the increase in the tax allowancereflected as a charge in 2004. The reduction in the statuary tax rate resultedin a change in valuation allowance of EUR 10,000 in 2004.

 

**Cash flows**

Net cash provided bycontinuing operations was EUR 2.7 million and EUR 0.7 million in 2003 and 2004,respectively. Net cash provided by continuing operations was impacted by adecrease in net income of EUR 2.5 million but offset by an increase of non cashexpenses by EUR 2.0 million and a decrease of cash flow from working capitalmanagement by EUR 1.5 million compared to 2003.

 

Non cash expensesincluded in net income increased from EUR 0.0 million in 2003 to EUR 2.0million in 2004. This increase was attributable to an increase of EUR 1.3million in the restructuring reserve and EUR 0.7 million in long termliabilities. The restructuring reserve decreased in 2003 by EUR 0.5 million,while the restructuring reserve increased in 2004 by EUR 0.8 million due to theimplementation of the restructuring plan in September 2004. Long termliabilities decreased in 2003 by EUR 0.3 million, while the long termliabilities increased in 2004 by EUR 0.4 million due to the deferred leaseexpense with respect to the head office of EUR 0.5 million offset by therepayment made on the Company’s long term loan of EUR 0.1 million.

 

The cash flowgenerated by working capital management decreased by EUR 1.5 million in 2004compared to 2003. Working capital management in 2003 led to a reduction inworking capital, which generated cash of EUR 2.2 million. In 2004, workingcapital management was able to further reduce working capital by EUR 0.7million. This was mainly realized by an increase in accrued taxes and customerdeposits, offset by a decrease in deferred revenues.

 

Net cash used ininvesting activities of continuing operations was EUR 0.7 million in 2003,while in 2004, EUR 0.3 million cash

 

14

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was generated by investingactivities. This is mainly caused by the release of deposits at banks relatingto the bank guarantees issued for ICT projects which were in progress at theend of 2003 and were finalized in 2004.

 

Net cash used infinancing activities of continuing operations was EUR 0.5 million and EUR 0.2million in 2003 and 2004, respectively. The reduction in cash used in financingactivities in 2004 was primarily related to a decline in paid leaseobligations.

 

**Discussion and analysis of results of operations: 2003 compared with2002**

 

**Results of operations**

 

**Net revenues**

(in millions)

 
| ** ** | ** ** | **Year Ended December 31,** | ** ** |
|------------|------------|----------------------------------|------------|
| ** ** | ** ** | **EUR**                          | ** ** | **2002** | ** ** | **EUR** | ** ** | **2003** | ** ** |
|       |       |                             |       | **%** |   |   |   | **%** |   |
| Systems    |       | 67.6                             |       | 70.2 |   | 53.4 |   | 66.4 |   |
| Services   |       | 28.8                             |       | 29.8 |   | 27.0 |   | 33.6 |   |
| Total      |       | 96.4                             |       | 100 |   | 80.4 |   | 100.0 |   |

 

## **Gross profit / gross margin**

(in millions)

 
| ** ** | ** ** | **Year Ended December 31,** | ** ** |
|------------|------------|----------------------------------|------------|
| ** ** | ** ** | **EUR**                          | ** ** | **2002** | ** ** | **EUR** | ** ** | **2003** | ** ** |
|       |       |                             |       | **%** |   |   |   | **%** |   |
| Systems    |       | 8.1                              |       | 12.0 |   | 5.8 |   | 10.9 |   |
| Services   |       | 8.8                              |       | 30.7 |   | 8.3 |   | 30.8 |   |
| Total      |       | 16.9                             |       | 17.6 |   | 14.1 |   | 17.6 |   |

 

*Net revenues*

Net revenues in 2003 wereEUR 80.4 million compared to EUR 96.4 million in 2002, a decrease of EUR 16.0million or 17 %. This decrease in net revenue was primarily due to a decreasein net revenues by EUR 13.4 million from the Dutch Department of Justice, oneof the Company’s major customers. The continued difficult economic climateforced the Dutch government to implement a cost reduction program at theDepartment of Justice in 2003 that has led to postponement or cancellation ofmajor investments in ICT-infrastructure. As a result, revenues from designservices, delivery and related project management and installation services ofICT-infrastructure systems decreased substantially. However, revenues frommanagement and maintenance services (approximately 21% of total revenue) increasedby 4%.

 

*Gross margin*

Despite continuedprice pressure resulting from weak demand, the Company was able to maintain grossmargin from 17.6% in 2003 (17.6% in 2002). The decreased gross margin onSystems revenues was offset by a change in Systems and Services sales mix.Furthermore, gross margin on Services revenues increased slightly due to theCompany’s ability to reduce operating costs, mainly by decreasing the number ofsubcontracted and fixed personnel utilized at a faster rate than the decrease inrevenues. The Company used on average 13 subcontractors in 2003 compared to 32in 2002.

 

**Operating expenses**

(in millions)

 
| ** **                          | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|
| ** **                          | ** ** | **2002**                         | ** ** | **2003** | ** ** |
| ** **                          | ** ** | **EUR**                          | ** ** | **EUR** | ** ** |
| Sales and marketing expense         |       | 9.8                              |       | 8.6 |   |
| General and administrative  expense |       | 5.6                              |       | 3.6 |   |
| Restructuring charge                |       | 1.4                              |       | 1.3 |   |
| Total operating expenses            |       | 16.8                             |       | 13.5 |   |

 

15

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**Operating expenses as apercentage of revenues**

(in percentages)

 
| ** **                          | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|
| ** **                          | ** ** | **2002**                         | ** ** | **2003** | ** ** |
| ** **                          | ** ** | **%**                            | ** ** | **%** | ** ** |
| Sales and marketing expense         |       | 10.1                             |       | 10.6 |   |
| General and administrative  expense |       | 5.9                              |       | 4.5 |   |
| Restructuring charge                |       | 1.4                              |       | 1.6 |   |
| Total operating expenses            |       | 17.4                             |       | 16.7 |   |

 

*Sales and marketing expense*

Sales and marketingexpense was EUR 8.6 million in 2003. In 2002 this expense was EUR 9.8 million.This decrease is primarily due to a decrease in the number of employeesresulting from the implementation of the 2003 restructuring program. As apercentage of net revenues, sales and marketing expense increased from 10.1% to10.6% due primarily to the decrease in overall revenues.

 

*General and administrativeexpense*

General andadministrative expense was EUR 3.6 million in 2003. In 2002 this expense wasEUR 5.6 million. This decrease is primarily a result of EUR 0.9 million chargesin 2002 related to leasehold facilities permanently vacated and an additionalprovision relating to two legal proceedings originating before 2002. Thisdecrease was also due to a decrease in the number of employees resulting from theimplementation of the 2003 restructuring program. As a percentage of netrevenues, general and administrative expense decreased from 5.9% to 4.5%.

 

*Restructuring charge*

In the second quarterof 2003, the Company implemented additional cost reduction measures in responseto lower than expected levels of net revenues in the first half of 2003. In thesecond quarter of 2003, the Company terminated the employment of 43 of its 373employees and, as a result, recorded EUR 1.3 million restructuring expense, ofwhich EUR 1.1 million has been paid in 2003. As a result of these additionalmeasures, the Company’s annual expenses are expected to decrease byapproximately EUR 2.5 million which is expected to be fully reflected inoperating results commencing in the second quarter of 2004. The implementationof the second quarter 2003 restructuring was mainly completed at year end 2003.The Company made additional payments of approximately EUR 0.2 million in thefirst half year of 2004 relating to this restructuring plan.

 

*Other expense, net*

Net other expensedecreased from EUR 0.6 million in 2002 to EUR 0.2 million in 2003 due primarilyto decreased interest expense in 2003. This was due primarily to the positivecash flows of EUR 3.2 million in 2002 (mainly in the last quarter) and EUR 1.9million in 2003 which led to repayment of short term credit facilities.

 

*Provision for income taxes*

Due to theavailability of NOL’s, the Company incurred no income tax expense in either2002 or 2003. As of December 31, 2003, the Company has total NOL’s ofapproximately EUR 25.3 million. The Company recorded a deferred tax asset ofEUR 0.6 million net of allowances as it expects that it is more likely than notthat this portion of the NOL’s will be realized.

 

**Cash flows**

Net cash provided bycontinuing operations was EUR 5.3 million and EUR 2.7 million in 2002 and 2003,respectively. Net cash provided by continuing operations was impacted by anincrease in net income of EUR 1.0 million but offset by a decrease of non cashexpenses by EUR 2.9 million and a decrease of cash flow from working capitalmanagement by EUR 0.7 million compared to 2002.

 

Net cash used ininvesting activities of continuing operations was EUR 1.4 million and EUR 0.7million in 2002 and 2003, respectively. The lower cash used in investingactivities is primarily due to a decrease in net investments in property andequipment as a result of the fact that a major portion of 2002 investments wererelated to an ERP-project that was completed in 2002.

 

Net cash used in financingactivities of continuing operations was EUR 1.0 million and EUR 0.5 million in2002 and 2003, respectively. The higher cash used in financing activities in2002 was primarily related to the payment of the final installment of a 2001preferred dividend to the holders of then outstanding preferred shares.

 

Net cash flow ofdiscontinued operations was EUR 0.4 million and EUR 0.0 million in 2002 and2003, respectively. The 2002 cash flow from discontinued operations wasprimarily related to the sale in 2002 of assets and liabilities related todiscontinued operations.

 

16

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**Liquidity and Capital Resources**

 

The following discussion and analysis of financialcondition should also be viewed in the context of the risks affecting ourbusiness strategy, described in Item 3 “Risk Factors.”

 

Triple P’s balance of cash, cash equivalents andrestricted cash amounted to EUR 6.2 million and EUR 6.5 million as of December 31,2003 and 2004, respectively. Net cash flows provided by operating activitieswere EUR 2.7 million and EUR 0.7 million in 2003 and 2004,respectively. Cash provided by operating activities in 2004 was primarilyderived from Triple P’s net loss for the year partially offset by an increasein accrued liabilities and customer deposits. As Triple P has deferred taxassets resulting from net operating losses carried forward, the tax charge ofEUR 0.2 million as included in the loss of the year did not result in cashoutflow. Net cash flows provided by operating activities includes EUR 0.6million of depreciation and amortization charges and EUR 0.3 million inprovision for doubtful accounts, which do not impact the cash flow. Triple Pimplemented a restructuring charge of EUR 1.8 million in the third quarter of 2004which resulted in a cash outflow of EUR 0.8 million in the third and fourthquarter of 2004 (the remaining reserve was EUR 1.0 million at December 31,2004). Furthermore, the Company recorded EUR 0.3 million in rent expenses whichdid not result in a cash outflow due to a rent free period.

 

Triple P used EUR 0.7 million of cash to increaseinventories in 2004, primarily due to an increase in trade goods for specificbusiness lines. Furthermore, EUR 0.2 million of cash was used for other currentassets. These cash outflows were more than offset by an increase of short-termliabilities of EUR 1.4 million.

 

Net cash used in investing activities was EUR 0.3million in 2003 and EUR 0.2 million in 2004. The 2004 and 2003 figuresmainly relate to investments in information technology and office equipment.Furthermore the cash outflow relating to deposits for EUR 0.4 million in 2003was reversed in 2004 for EUR 0.5 million.

 

Net cash used for financing activities was EUR 0.2million in 2004 compared to EUR 0.5 million in 2003 and relate to paymentsfor capital lease obligations.

 

Our principal sources of liquidity consist of EUR 6.5million of cash, cash equivalents and restricted cash and available creditfacilities as of December 31, 2004. Our credit facilities exist pursuantto an agreement with IFN Finance B.V. (ABN-AMRO) whereby the Company may borrowup to 60% of eligible accounts receivable to a maximum of EUR 6 million.Borrowings under this facility are secured by the Company’s accountsreceivable. The agreement with IFN Finance B.V. was renewed in March 2005for a period of 2 years.

 

The Company had noshort-term borrowings at December 31, 2002, 2003 and 2004.

 

The Company does notengage in hedging activities nor has it entered into any off-balance-sheettransactions, arrangements or other relationships with unconsolidated entitiesor persons.

 

At the annualshareholders meeting to be held in June 2005, we will request that theshareholders approve a proposed subordinated loan of approximately EUR 1.5 million,repayable in 20 quarterly installments. It is expected that shareholders thatare not U.S. persons will be provided the right to participate in any suchfinancing.

 

We expect capital expenditures in 2005 to rangebetween EUR 0.1 million and EUR 0.3 million. In addition, for the next twelvemonths, we have operating lease commitments of approximately EUR 2.1 millionafter sublease income. Furthermore, we expect cash outflows relating to our2004 restructuring of EUR 1.0 million in the first and second quarter of 2005.

 

Our contractual obligations and commercial commitmentsare disclosed in the following table and Note 7 to our Consolidated FinancialStatements.

 

# **Contractual Obligations Due byPeriod at December 31, 2004**

(in thousands ofeuros)

 
| **Contractual  Obligations**  | ** ** | **Total** | ** ** | **<1 years** | ** ** | **1-3 years** | ** ** | **3-5 years** | ** ** | **>5 years** | ** ** |
|-------------------------------|------------|-----------|------------|-----------------|------------|---------------|------------|---------------|------------|-----------------|------------|
| Loan                          |       | 119       |       | 119             |       | —        |       | —        |       | —          |       |
| Pension obligations(1)        |       | 5,200     |       | 123             |       | 263           |       | 387           |       | 4,427           |       |
| Operating leases (2)          |       | 12,677    |       | 2,759           |       | 3,809         |       | 1,902         |       | 4,207           |       |
| Total Contractual Obligations |       | 17,996    |       | 3,001           |       | 4,072         |       | 2,289         |       | 8,634           |       |

 

----

(1) Pensionobligations represent the projected benefit obligation for our defined benefitplans. In addition to this obligation, we also had related plan assets with afair value of EUR 4.9 million at year end 2004. As a result, our unfundedobligation was EUR 0.3 million as of year end. For more information onpensions, see Note 8 of our Consolidated Financial Statements included in thisannual report.

(2) Operatingleases relate to the Company’s building lease and car lease contracts.

 

17

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The following tablesummarizes the Company’s bank guarantees and their expiration dates:

 

# **Amount of Bank Guarantees byExpiration Period at December 31, 2004**

(in thousands ofeuros)

 
| ** **      | ** ** | **Total** | ** ** | **<1 year** | ** ** | **1-3 years** | ** ** | **3-5 years** | ** ** | **>5 years** | ** ** |
|-----------------|------------|-----------|------------|----------------|------------|---------------|------------|---------------|------------|-----------------|------------|
| Bank Guarantees |       | 473       |       | 298            |       | 175           |       | —        |       | —          |       |

 

The bank guaranteesprovided by the Company’s bank on behalf of the Company and its subsidiaries tothird parties relate to bank guarantees issued to the lessor of the Company’sleasehold facilities. In connection with these bank guarantees amounting to EUR473,000, the Company holds restricted cash to an amount of EUR 12,000 at thebank. No liability is accrued in connection with these bank guarantees.

 

In addition to cash and available credit facilities,we may from time to time raise additional capital in debt and equity markets.Our liquidity needs are affected by many factors, some of which are based onthe normal ongoing operations of the business, and others of which relate tothe uncertainties of the Dutch economy and the development of the ICT sector inthe Netherlands. Although our cash requirements will fluctuate based on thetiming and extent of these factors, we believe that existing cash balances togetherwith our credit facilities will be sufficient to satisfy our liquidityrequirements for the next twelve months.

 

The Company may fromtime to time consider acquisitions of complementary businesses, products ortechnologies, which may require additional financing. In addition, continuedgrowth in the Company’s business or the occurrence of additional operatinglosses may require the Company to raise additional capital. Additional capitalmay not be available to the Company if and when needed or on acceptable terms.

 

The Company is a partyto certain legal proceedings, none of which the Company believes will have amaterial impact on the Company’s business or future results of operations orfinancial condition. Management has established a reserve for these legalproceedings. See “Legal Proceedings” in item 8 and note 7 of “Notes toConsolidated Financial Statements” in item 18 of this Annual Report on Form 20-F.

 

**Trend Information**

 

The ICT-industry hasexperienced a global recession during the last three to four years. This wasalso the case in the Dutch ICT-business market and as such had its effect onTriple P’s business in ICT-infrastructure solutions. Most research analystshowever expect a return to structural growth for this market. One of the importantfactors of the return of structural growth of the ICT-market in The Netherlandsis the general economic climate in The Netherlands. If the general economicclimate improves over the coming months, the ICT-market will grow faster thanif the climate remains uncertain. Currently, we expect improvements of thegeneral economic climate in The Netherlands.

 

The second factor inthe structural growth for the ICT-market relates to emerging technologies andassociated new ICT-applications. We believe that IP-convergence, outsourcing,wireless, security and enterprise application integration are among suchpromising new technologies and applications. IP-convergence is the general termfor voice, data and video over internet protocol (“IP”). Outsourcing is slowlyreaching maturity. Lastly, we see the market moving away from softwaresolutions that cover the total business processes or all encompassingERP-applications to the integration of multiple software applications.Consequently, we expect enterprise application integration will become a majorissue in the coming years.

 

In the third quarterof 2004, the Company decided to accelerate its long-term strategy. Thisstrategy focuses on performing services with a high added value and the phasingout of low margin activities. In conformity with the announced restructuringprogram, the employee contracts of 75 employees were terminated and the Company’sannual expenses as a result of this reduction of head count are expected todecrease by approximately EUR 3.2 million per year. This decrease will beoffset in part by hiring expenses and other investments in the identified fourareas in which the Company will intensify its efforts: Mission Critical, IP &Wireless, Managed Services and Systems.

 

As Triple P refocusestowards those four high margin activities, the Company has employed itsresources in portfolio and delivery projects. As a result and in combinationwith the above mentioned investments, management expects that gross margin onServices will decrease in 2005. Because this decrease in gross margin onServices will be offset by the targeted higher margin activities, the Companycannot provide any specific guidance as to the total gross margin and resultsfor 2005.

 

A corporate income taxrate reduction in The Netherlands was enacted in the fourth quarter of 2004.This enactment will lead to a decrease of the statutory future tax rate of theCompany. Consequently, the realization of our tax loss carry forward position,if any, will be at this lower rate.

 

**Recent accounting pronouncements**

 

In December 2003,the Financial Accounting Standard Board (“FASB”) issued Interpretation Number46 Revised, “Consolidation of Variable Interest Entities” (“FIN 46R”). AnInterpretation of Accounting Research Bulletin No. 51, which requires theconsolidation by a business enterprise of variable interest entities if thebusiness enterprise is the primary beneficiary. The requirements of FIN 46R areeffective for fiscal periods beginning after December 15, 2003. Theadoption of FIN 46R did not have a material impact on the company’sconsolidated results of operations, financial condition or liquidity.

 

18

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In March 2004,the Emerging Issues Task Force (“EITF”) reached a consensus on recognition andmeasurement guidance previously discussed under EITF Issue No. 03-01, “The Meaning of Other-Than-Temporary Impairment and Its Application to CertainInvestments” (“EITF 03-01”). The consensus clarifies the meaning ofother-than-temporary impairment and its application to investments in debt andequity securities, in particular investments within the scope of FASB StatementNo. 115, “Accounting for Certain Investments in Debt and Equity Securities”,and investments accounted for under the cost method. The adoption of thisstandard will not have a material impact on the Company’s financial position,result of operations or cash flows.

 

In November 2004,the EITF reached a consensus on EITF Issue No. 03-13, “Applying theconditions in paragraph 42 of SFAS No. 144, Accounting for the Impairmentor Disposal of Long-Lived Assets in determining whether to report discontinuedoperations”. The consensus reached clarifies the approach for evaluatingwhether the criteria in paragraph 42 of SFAS No.144 have been met for purposesof classifying the results of operations of a component of an entity thateither has been disposed of or is classified as held for sale as discontinuedoperations. The task force also reached a consensus that the guidance would beapplied to a component of an enterprise that is either disposed of orclassified as held for sale in fiscal periods beginning after December 31,2004. The adoption of this standard did not have a material impact on theCompany’s financial position, result of operations or cash flows.

 

In December 2004,the FASB issued a revision of FASB Statement No. 123, Accounting forStock-Based Compensation (“SFAS No. 123 I”). This statement supersedes APBOpinion No. 25, Accounting for Stock Issued to Employees, and its relatedimplementation guidance. SFAS No. 123 I addresses the accounting forshare-based payment transactions in which a company receives employee servicesin exchange for either equity instruments of the company or liabilities thatare based on the fair value of the company’s equity instruments or that may besettled by the issuance of such equity instruments. SFAS No. 123 Ieliminates the ability to account for share-based compensation transactionsusing the intrinsic method and generally requires that such transactions beaccounted for using a “fair-value”-based method and recognized as expense inthe statement of operations. SFAS No. 123 I is effective as of thebeginning of the first interim or annual reporting period that begins after January 1,2006. SFAS No. 123 I is anticipated to have a significant effect on ourconsolidated statement of operations. See also Note 9 and the paragraph onstock options.

 

SFAS No. 151amends APB No. 43 such that it clarifies that  “abnormal” amounts of idle facility expense,freight, handling costs etc. should be recognized as current-period charges,while wording of APB No. 43 could have led to an inconsistent applicationof this requirement. The guidance is effective for inventory costs incurredduring fiscal years beginning after June 15, 2005 (January 1, 2006for Triple P). Triple P believes that the adoption of this standard will haveno impact on its consolidated results of operations.

 

SFAS No. 153amends the guidance in APB Opinion No. 29 (“APB 29”) regarding accountingfor non-monetary transactions, and is effective for non-monetary assetexchanges occurring in fiscal periods beginning after June 15, 2005 (January 1,2006 for Triple P). APB 29 included an exception to the basic measurementprinciple (fair value) for exchanges of similar productive assets. Thisstatement eliminates this exception, and replaces it with a general exceptionfor exchange transactions that do not have commercial substance. Impact of thisaccounting pronouncement on Triple P’s future consolidated financial positiondepends on the nature and size of such transactions entered into by Triple P.

 

Item 6 - Directors, Officers, Senior Management andEmployees

 

**Directors, Officers and SeniorManagement**

 

The Directors and Senior Management of the Companyin 2004 and 2005 until April 29, and their ages (as of December 31,2004), are as follows:

 
| **Name**            | ** ** | **Age** | ** ** | **Position(s)**                                                | ** ** |
|---------------------|------------|---------|------------|----------------------------------------------------------------|------------|
| A.H.M. Stam(1)      |       | 60      |       | Chairman Supervisory Board                                     |       |
| H.C.A. Groenen(1)   |       | 60      |       | Member Supervisory Board                                       |       |
| F. Khaleghi Yazdi   |       | 52      |       | Member Supervisory Board                                       |       |
| H. Crijns           |       | 61      |       | Interim Chief Executive Officer and  Director of Services      |       |
| M.P.J. van den Oord |       | 36      |       | Chief Financial Officer (until  April 1, 2004)            |       |
| P. Blokhuis         |       | 36      |       | Concern Controller                                             |       |
| W.J. Scholten       |       | 44      |       | Director of Sales (until November 1,  2004)               |       |
| R. L. Azimullah     |       | 38      |       | Director of Sales and Marketing (as of  November 1, 2004) |       |

 

----

(1) Member of Audit Committee

 

A.H.M. Stam wasappointed as Chairman of the Supervisory Board in May 2002. From 1972 to1984, Mr. Stam held various executive management positions at SHV, aninternational wholesale company in The Netherlands. From 1984 to 1990, Mr. Stamheld subsequent board positions at NMB, a Dutch Bank, Lease Plan, a Dutch carlease company and Newtron Holding, a Dutch holding company. From 1991 to 1993, Mr. Stamworked as interim manager for various companies. From 1993 to 2003, Mr. Stamhas served as Chief Executive Officer of Arboned, a Dutch company in thehealthcare market; he retired in 2003. Until January 1, 2004, Mr. Stamheld Board positions at VNO/NCW and BOA as well as Advisory Board positions atCap Gemini Ernst & Young and TNO. Furthermore, Mr. Stam holdsvarious Supervisory Board positions at Bouwcenter Organisatie B.V. (Woerden),Leeuwendael B.V. (Rijswijk), Utrechtse Juristen Groep B.V. (Utrecht), CycloMedia International N.V. (Waardenburg), Ormeon Group B.V. (Leewarden), andTwijnstra Gudde Holding B.V. (Amersfoort).

 

19

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H.C.A. Groenen wasappointed as Supervisory Board member in May 2002. Since 1967, Mr. Groenenhas held various positions at NMB-Heller, a Dutch bank. From 1973 to 1998, Mr. Groenenwas Chief Executive Officer of NMB-Heller, and from 1990 to 2003, he has beenChief Executive Officer of NMB-Heller Holding N.V.; he retired in 2003. Mr. Groenenholds Board positions at PL & Partners Beheer (Doorn), HerbelBeleggingen N.V. (Rotterdam), and R.S.D.B N.V. (Hilversum).

 

F. Khaleghi Yazdi wasappointed as Supervisory Board member in July 2003. From 1983 to 1987, Mr. KhaleghiYazdi was Director at HCS Technology B.V. From 1989 to 1997, Mr. KhaleghiYazdi was Chief Executive Officer of Triple P N.V. Since 1997, Mr. KhaleghiYazdi has worked as a private investor and held several advisorships. Mr. KhaleghiYazdi is Managing Director of TPM Europe Holding B.V., his personal holdingcompany and does not hold any other directorships.

 

H. Crijns joined theCompany in November 1999 as Director of the Services Division and wasappointed Director of Services in 2003. The Supervisory Board appointed himinterim Chief Executive Officer in 2003, after Mr. Pijselman left theCompany. From 1970 to 1985, Mr. Crijns worked for Xerox Corporation, andfrom 1985 to 1999, he worked for Digital Equipment Corporation where he heldvarious management positions.

 

M.P.J. van den Oordjoined the Company in 1997 as Controller of Triple P Nederland B.V. and wassubsequently appointed Concern Controller in 1999 and Chief Financial Officerin 2002. From 1992 to 1997, Mr. van den Oord worked as a public accountantfor Arthur Andersen. Mr. van den Oord is a certified public accountant. Mr. Vanden Oord left the Company on April 1, 2004.

 

P. Blokhuis joined theCompany in 2000 as Manager of the IT- Management Center, one of the Company’sServices units, and was subsequently appointed Controller in 2002 and ConcernController in 2004 and is acting as the principal financial officer of theCompany. From 1995 to 2000, Mr. Blokhuis held various management positionsat Euroveen B.V., a production and wholesale company.

 

W.J. Scholten joinedthe Company in 2004 as Director of Sales. From 1997 to 2004, Mr. Scholtenworked as general manager at Business Objects B.V., a software company in TheNetherlands. Previously, Mr. Scholten worked for Digital Equipment B.V. wherehe held various sales and sales management positions. Mr. Scholten leftthe Company on November 1, 2004.

 

R.L. Azimullah joinedthe Company in 2004 as Sales and Marketing Director. Previously, Mr. Azimullahheld various management positions responsible for strategy and changemanagement at K.P.N. N.V.

 

At the Annual GeneralMeeting to be held on June 16, 2005, shareholders will be asked to appointMr. F. Khaleghi Yazdi as Chief Executive Officer of the Board ofManagement by means of a binding proposal compiled by the Board of SupervisoryDirectors. At the same meeting, Mr. H. Crijns will resign as interim ChiefExecutive Officer.

 

**Compensation**

 

The amounts of cashcompensation of the Supervisory Board members are determined and approved bythe shareholders at the General Meeting of Shareholders. The remunerations on ayearly basis are EUR 22,689 for the chairman and EUR 13,613 for other members.These remunerations have accordingly been paid in cash to the Supervisory Boardmembers for the year ended December 31, 2004, except for Mr. KhaleghiYazdi. Mr. Khaleghi Yazdi provides advisory and management services at arate of EUR 2,000 per day to strengthen the Company’s Management Board on aninterim basis. The amount of cash compensation paid to Mr. Khaleghi Yazdiand accrued for services in all capacities for the year ending December 31,2004 was approximately EUR 440,000.

 

The aggregate amountof cash compensation of the Chief Executive Officer, Officers and SeniorManagement, including former (interim) Chief Executive Officer, of the Companyas a group paid or accrued for services in all capacities for the year ended December 31,2004, was approximately EUR 427,000, excluding advisory and management servicesprovided by Mr. Khaleghi Yazdi. As of December 31, 2004, this groupheld options to purchase 336,500 common shares. Certain executive officers areeligible to receive bonuses pursuant to a plan which establishes bonus targetsbased upon the Company’s sales, gross margin, operating income and accounts receivablebalances.

 

The Company set asidean aggregate of EUR 37,300 in 2004 to provide pension, retirement or otherbenefits for these officers as a group.

 

**Board Practices**

 

General

We endorse theimportance of good corporate governance, in which independent oversight,accountability and transparency are the most significant elements. Within theframework of corporate governance, it is important that a relationship of trustexists between the Board of Management, the Supervisory Board, Triple P’semployees and the shareholders.

 

In addition to theexchange of ideas at the General Meeting of Shareholders, other important formsof communication include the publication of our annual and quarterly financialresults as well as press releases and publications posted on our web site. Inaddition, we pursue a policy of active communication with our shareholders. Ourcorporate governance structure is intended to:

•                  provide shareholders with regular, reliable andrelevant transparent information;

•                  apply high quality standards for disclosure,accounting and auditing; and

•                  apply stringent rules with regard to insidersecurities trading.

 

20

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Two-tierstructure

Triple P isincorporated under Netherlands law and has a two-tier board structure.Responsibility for the management of Triple P lies with the Board ofManagement. Except Mr. Khaleghi Yazdi, independent, non-executive membersserve on the Supervisory Board, which supervises and advises the members of theBoard of Management in performing their management tasks. The Board ofManagement has the duty to keep the Supervisory Board informed, consult withthe Supervisory Board on important matters and submit certain importantdecisions to the Supervisory Board for his prior approval.  The supervision of the Board of Management bythe Supervisory Board includes (i) achievement of the Company’sobjectives, (ii) corporate strategy and management of risks inherent tothe business activities, (iii) the structure and operation of the internalrisk management and control systems, (iv) the financial reporting processand (v) compliance with the legislation and regulations.

 

Supervisory Boardmembers are prohibited from serving as officers or employees of Triple P, andmembers of the Board of Management cannot serve on the Supervisory Board.

 

The following tablesets forth information regarding the incumbency of the members of the Company’sSupervisory Board.

 
| **Name**          | ** ** | **Period of Services**      | ** ** | **Expiration of Current Term** | ** ** |
|-------------------|------------|-----------------------------|------------|--------------------------------|------------|
| A.H.M. Stam       |       | May 16, 2002 - present |       | May 16, 2006              |       |
| H.C.A. Groenen    |       | May 16, 2002 - present |       | May 16, 2006              |       |
| F. Khaleghi Yazdi |       | July 9, 2003 - present |       | July 9, 2007              |       |

 

Mr. Stam and Mr. Groenen,as independent non-executive members of the Supervisory Board, together undertakethe function of an Audit Committee and Remuneration Committee. The AuditCommittee currently includes only two Supervisory Board members rather thanthree members as required by Nasdaq rules. This Nasdaq requirement does nottake effect until July 31, 2005 for foreign private issuers.

 

At the AnnualGeneral Meeting to be held on June 16, 2005, shareholders will be asked toappoint Mr. H.J. IJsendoorn as a member of the Board of SupervisoryDirectors and a member of the Audit Committee; he is a certified publicaccountant and will undertake the function of audit committee financial expert.

 

The Audit Committeeresponsibilities are to be formalized in an Audit Committee Charter which willbe reviewed and adjusted in accordance with the requirements of Nasdaq before July 31,2005.

 

Nasdaq rules providethat Nasdaq may provide exemptions from the Nasdaq corporate governancestandards to a foreign issuer when those standards are contrary to a law, rule orregulation of any public authority exercising jurisdiction over such issuer orcontrary to generally accepted business practices in the issuer’s country ofdomicile. Tripe P has received from Nasdaq exemptions from certain Nasdaqcorporate governance standards that are contrary to the laws, rules,regulations or generally accepted business practices of The Netherlands. Theseexemptions and the practices followed by Triple P are described below:

 

•                  Triple P is exempt from Nasdaq’s requirementsregarding the solicitation of proxies and provision of proxy statements formeetings of shareholders. Triple P does not solicit proxies or prepare proxystatements for General Meetings of Shareholders. Netherlands law does not havea regulatory regime for the solicitation of proxies and the solicitation ofproxies is not a generally accepted business practice in The Netherlands.

•                  Triple P is exempt from Nasdaq’s requirementsregarding shareholder approval requirements because public companies in TheNetherlands generally do not require shareholder approval for specific actionsby a company’s Board of Management.

 

The Company has noservice contracts with its Supervisory Board Members, except for Mr. KhaleghiYazdi as disclosed under “Compensation” above.

 

The Company hasentered into indemnification agreements with its directors and officers whichprovide for indemnification by the Company against any liability to which adirector or executive officer may be subject for judgments, settlements,penalties, fines and expenses of defense (including attorneys’ fees, bonds andcosts of investigation), arising out of or in any way related to acts oromissions as a director, officer or in any other capacity in which services arerendered to the Company or its subsidiaries. The Company believes that theindemnification agreements will assist the Company in attracting and retainingqualified individuals to serve as directors and executive officers. Theagreements provide that a director or officer is not entitled toindemnification under such agreements (i) if indemnification is expresslyprohibited under applicable law, (ii) for certain violations of securitieslaws or (iii) for certain claims initiated by the officer or director.Generally, under Netherlands law a director will not be held personally liablefor decisions made with reasonable business judgment absent self-dealing. Inaddition, indemnification may not be available to directors or officers underNetherlands law if any act or omission by a director or officer qualifies aswillful misconduct or gross negligence. Due to the lack of applicable case law,it is not clear whether indemnification is available where there has been abreach of U.S. securities laws.

 

**Employees**

 

On December 31, 2002, 2003 and 2004, theCompany employed 402, 330 and 299 full time employees, respectively. On December 31,2002, 2003 and 2004, the Company employed 17, 16 and 19 temporary employees.

 

Thefollowing table sets forth the decrease in the number of employees in 2004compared with 2003.

 

21

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Personnel (FTE)

 
| Number as at January 1,  2004                       |   |   |   | 330    |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|
|                                                     |   |   |   |   |   |
| Announced reorganization in  Q3, 2004                    | 75     |   |   |   |   |   |
| of which to leave voluntarily                            | 13     |   | 13     |   |   |   |
|                                                     | 62     |   |   |   |   |   |
| another voluntarily reduction  during Q4                 | 10     |   | 10     |   |   |   |
| to be terminated in 2005 due  to the reorganization      | 52     |   |   |   |   |   |
| other people that left in 2004  by mutual consent        |   |   | 8      |   |   |   |
| Total number of employees that  left the Company in 2004 |   |   |   | 31     |   |
| Number as at December 31,  2004                     |   |   |   | 299    |   |

 

The following table sets forth the number ofemployees in each department on December 31, 2002, 2003 and 2004.

 

Full-Time Equivalent Employees by Department

 
| ** **                         | ** ** | **Year Ended December 31,** | ** ** |
|------------------------------------|------------|----------------------------------|------------|
| ** **                         | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| Operations                         |       | 249                              |       | 222 |   | 198 |   |
| Sales & Marketing         |       | 105                              |       | 69 |   | 64 |   |
| General &  Administrative |       | 48                               |       | 39 |   | 37 |   |
| Company Total                      |       | 402                              |       | 330 |   | 299 |   |

 

The decrease in thenumber of full time employees by 72 in 2003 is primarily due to implementationof two formal restructuring programs, one in the fourth quarter of 2002 and onein the second quarter of 2003, due to lower than expected revenues. Theserestructuring programs included a detailed plan to terminate 29 and 43 employeecontracts respectively. These employees left the Company in 2003.

 

In the third quarterof 2004, the Company decided to accelerate the implementation of its strategyof focusing on performing services with a high added value and phasing out lowmargin activities. In accordance with the announced restructuring program, 75employees were terminated, 13 of the terminations were voluntary, and withrespect to 62 employees, we asked permission of the authorities to terminatetheir contracts.

 

Ten additionalemployees left voluntarily before December 31, 2004, in accordance withthe restructuring. The restructuring process will be completed in 2005 with thetermination of the remaining 52 employees. During 2004, eight persons left theCompany based upon mutual consent. Thus, the total decrease in the number offull-time employees in 2004 is 31.

 

Under Dutch labor law,a period of notice has to be observed before the employee contract can actuallybe terminated. The period of notice correlates to the number of years ofemployment with the Company. For this reason, 52 contracts have not yet beenterminated as of December 31, 2004, although the employees are no longeractive with the Company. The decrease in the number of -full time- employees asa result of the restructuring will therefore be affected in 2005.

 

Under Dutch law,employee membership in trade unions is confidential. The Company has never beenthe subject of a grievance filed by a trade union, nor has the Company eversuffered a work stoppage. Pursuant to the requirements of Dutch law, we have anemployee works council. Certain corporate decisions that would have a materialeffect on its revenue are subject to prior consent or advice from the WorksCouncil.  The works council has the rightto be informed by and/or to advise management on specific matters in accordancewith the Dutch Works Council Act.  Inaddition, the Works Council Act provides that various decisions with respect toemployment conditions of general application require the works council’sconsent. If withheld, such consent may be replaced with a judgment from thecantonal court. The Company considers its employee relations to be excellent.

 

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**Share Ownership**

 

# **Securities and options held byDirectors and Officers**

# ** **

The following tables set forth the number ofcommon shares and options to purchase common shares held by directors andofficers on April 29, 2005.

 

**Securities**

 
| **Name**                               | ** ** | **Securities Held(2)** | ** ** | **Percentage of Class** | ** ** |
|----------------------------------------|------------|------------------------|------------|-------------------------|------------|
| A.H.M. Stam                            |       | 35,000                 |       |                    | (1)        |
| H.C.A. Groenen                         |       | 35,000                 |       |                    | (1)        |
| F. Khaleghi Yazdi                      |       | 11,635,043             | (3)        | 38.2                    | %          |
| R.L. Azimullah                         |       | 50,000                 |       |                    | (1)        |
| P. Blokhuis                            |       | 236,500                |       |                    | (1)        |
| H. Crijns                              |       | —                 |       | —                  |       |
| All directors and officers as  a group |       | 11,991,543             |       | 39.4                    | %          |

 

----

(1)              Less than 1%.

(2)              Shares beneficiallyowned including shares underlying exercisable options.

(3)              Mr. KhaleghiYazdi’s holdings consist of 11,635,043 common shares owned by TPM EuropeHolding B.V. which is wholly owned by Mr. Khaleghi Yazdi.

 

**Options**

 
| **Name**                               | ** ** | **Underlying securities** | ** ** | **Exercise Price USD** | ** ** | **Expiration  Date** | ** ** |
|----------------------------------------|------------|---------------------------|------------|------------------------|------------|----------------------|------------|
| A.H.M. Stam                            |       | 5,000                     |       | 0.9880                 |       | 05/2007              |       |
|                                   |       | 10,000                    |       | 0.3510                 |       | 01/2008              |       |
|                                   |       | 10.000                    |       | 0.6300                 |       | 01/2009              |       |
|                                   |       | 10,000                    |       | 0,6500                 |       | 01/2010              |       |
|                                   |       |                      |       |                   |       |                 |       |
| H.C.A. Groenen                         |       | 5,000                     |       | 0.7600                 |       | 05/2007              |       |
|                                   |       | 10,000                    |       | 0.3510                 |       | 01/2008              |       |
|                                   |       | 10.000                    |       | 0.6300                 |       | 01/2009              |       |
|                                   |       | 10,000                    |       | 0,6500                 |       | 01/2010              |       |
|                                   |       |                      |       |                   |       |                 |       |
| R.L. Azimullah                         |       | 50,000                    |       | 0.5220                 |       | 12/2009              |       |
|                                   |       |                      |       |                   |       |                 |       |
| P. Blokhuis                            |       | 3,500                     |       | 1.1760                 |       | 07/2005              |       |
|                                   |       | 40,000                    |       | 1.5220                 |       | 03/2009              |       |
|                                   |       | 3,000                     |       | 0.8880                 |       | 07/2009              |       |
|                                   |       | 40,000                    |       | 0.5220                 |       | 12/2009              |       |
|                                   |       | 150.000                   |       | 0.5960                 |       | 03/2010              |       |
| H. Crijns                              |       | —                    |       | —                 |       | —               |       |
| All directors and officers as  a group |       | 356,500                   |       |                   |       |                 |       |

 

**Stock compensation plans**

 

**1996 Stock Plan**

The 1996 Stock Planprovides for the grant of options to employees and consultants (includingofficers) of the Company and its affiliates. When adopted by the shareholdersof the Company in September 1995, 1,500,000 common shares were issuableunder the 1996 Stock Plan. At the 1998 General Meeting of Shareholders, theshareholders voted to increase the number of common shares issuable under the1996 Stock Plan by 1,000,000, bringing the total common shares available forstock option grants to 2,500,000. The 1996 Stock Plan will terminate in September 2005unless terminated earlier by the Management Board upon approval of the SupervisoryBoard. The 1996 Stock Plan may be administered by the Management Board orSupervisory Board, or both, or by a committee appointed by either or bothBoards in a manner that satisfies the legal requirements relating to theadministration of stock plans under all applicable laws. The 1996 Stock Plan iscurrently administered by the Management Board, subject to Supervisory Boardapproval.

 

The 1996 Stock Planincludes provisions governing options intended to qualify as incentive stockoptions within the meaning of Section 422 of the U.S. Internal RevenueCode of 1986, as amended.

 

The 1996 Stock Planprovides that the exercise price of options granted under the Plan shall be100% of the average fair

 

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market value of thecommon shares during a period of five trading days prior to the date of grantplus 0%, 10%, 20% or 30% at the optionee’s choice. This choice is granted tothe employee because of the tax treatment for stock options (i.e. lower taxrates upon exercise of the average fair market value plus 30% compared toaverage fair market value plus 0%). The exercise price is determined at the dateof grant. All options under the plan are immediately exercisable. The maximumterm of an option granted under the 1996 Stock Plan is five years from the dateof grant. Resale to third parties of shares purchased through exercise of anoption granted under the 1996 Stock Plan is restricted. Only 25% of such sharesmay be sold in the year following the date the option was granted and in eachof the three years following the first anniversary of the date of grant theoptionee gains the right to sell an additional 25% of the shares covered by theoption.

 

In the event oftermination of an optionee’s employment or consulting arrangement, all optionsthat have not been exercised terminate. In the event of termination of anoptionee’s status as an employee as a result of death or disability, the optionmay be exercised at any time within twelve months following the date of deathor disability but in no event later than the expiration date of such option andonly to the extent that the optionee had the right to exercise the option onthe date of death or disability. In the case of death, the option may beexercised by the optionee’s estate or by a person who has acquired the right toexercise the option by bequest or inheritance. Rights may not be sold, pledged,assigned, hypothecated, or disposed of in any manner other than by will or bythe laws of descent or distribution and may be exercised, during the lifetimeof the optionee, only by the optionee. Options to purchase an aggregate of1,607,084 common shares under the 1996 Stock Plan were outstanding on December 31,2004.

 

**1995 Director Option Plan**

The 1995 DirectorOption Plan provides for automatic grants of stock options to SupervisoryDirectors of the Company. When adopted by the shareholders of the Company in September 1995,100,000 common shares were issuable under the Director Plan. At the 1998General Meeting of Shareholders, the shareholders voted to increase the numberof shares issuable under the Director Plan by 100,000, bringing the totalnumber of common shares issuable under the Director Plan to 200,000. Eachperson who becomes a Supervisory Director after September 1995, other thanindividuals who immediately prior thereto served as a Chief Executive Officerof the Company automatically are granted an option to purchase 5,000 commonshares of the Company upon their appointment to the Supervisory Board (a “FirstOption”).

 

In addition, eachSupervisory Director is automatically granted an option to purchase 5,000common shares (a “Subsequent Option”) on January 1 of each year, providedthat he or she has served on the Board for at least three months as of thatdate. At the General Meeting of Shareholders on May 23, 2001, theshareholders voted to increase the number of automatically granted options to 10,000a year starting on January 1, 2002. All options granted under the DirectorPlan are exercisable immediately. Under the terms of the Director Plan, theexercise price of options granted to Supervisory Directors is 100% of theaverage fair market value of the common shares on the date of grant. Sharespurchased upon exercise of a Subsequent Option are subject to a repurchaseright. The Company may repurchase at the exercise price of the SubsequentOption any shares purchased by the optionee pursuant to the Subsequent Optionif the optionee ceases to be a Supervisory Director of the Company. Thisrepurchase right lapses as to one twelfth of the shares subject to theSubsequent Option for each month that passes after the date of grant of theSubsequent Option so long as the optionee remains a Director. All optionsgranted under the Director Plan have a term of five years. In the event oftermination of an optionee’s status as a Director, the optionee may exercisehis or her remaining options within 90 days of the termination date (or 12months in the case of termination as a result of death or disability), but inno event later than the expiration date of any such option. Options may not besold or transferred other than by will or the laws of descent and distribution,and may be exercised during the life of the optionee only by the optionee. Inthe event of any merger, sale of assets or other transaction involving a changein control of the Company, all repurchase rights with respect to optionsoutstanding under the Director Plan will immediately lapse, and such optionswill remain exercisable for a period of 90 days from the date of change incontrol. Options to purchase 50,000 common shares were outstanding under theDirector Plan on December 31, 2003. The Director Plan will terminate in September 2005.

 

The following tablesets forth, as of December 31, 2004, (i) the total number of optionsto purchase common shares outstanding under the 1995 and 1996 Plans (ii) theexpiration dates of such options and (iii) the prices, in U.S.$, at whichsuch options may be exercised.

 

**Options summary at December 31,2004**

 
| ** **         | ** ** | **Options  Available** | ** ** | **Options  Outstanding** | ** ** | **Exercise price  of shares USD** | ** ** | **Expiration  Dates**  | ** ** |
|--------------------|------------|------------------------|------------|--------------------------|------------|-----------------------------------|------------|------------------------|------------|
| 1996 Employee Plan |       | 2,500,000              |       | 1,607,084                |       | 0.5220 – 2.3197              |       | 02/2005 – 12/2009 |       |
| 1995 Director Plan |       | 200,000                |       | 50,000                   |       | 0.3510 – 0.9880              |       | 05/2007 – 01/2008 |       |

 

Item 7 - Major Shareholders and Related Party Transactions

 

**Major Shareholders**

 

The following tableshows to the best of the Company’s knowledge the beneficial ownership of commonshares by any person known to the Company to be the owner of more than fivepercent of the common shares, as of April 29, 2005:

 

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| **Identity  of person** | ** ** | **Shares Beneficially owned** | ** ** | **Percent** | ** ** |
|-------------------------|------------|-------------------------------|------------|-------------|------------|
| F. Khaleghi Yazdi (1)   |       | 11,635,043                    |       | 38.2        | %          |
| Orange Fund             |       | 2,815,600                     |       | 9.2         | %          |
| S. Nadjafi              |       | 2,296,370                     |       | 7.5         | %          |

 

----

(1)     Mr. Khaleghi Yazdi’s holdings consist of 11,635,043 common sharesowned by TPM Europe Holding B.V. which is wholly owned by Mr. KhaleghiYazdi.

 

The major shareholdersdo not have voting rights that are different from the rights of othershareholders.

 

To the best of theCompany’s knowledge Mr. Khaleghi Yazdi increased its holdings from7,818,424 common shares at December 31, 2001, to 7,823,424 common sharesat December 31, 2002, to 11,635,043 common shares at December 31,2003.

 

To the best of theCompany’s knowledge, Orange Fund decreased its holding from 4,500,000 commonshares at December 31, 2001 and 2002 to 2,815,600 common shares at December 31,2003.

 

**Related Party Transactions**

 

Except as describedbelow, none of the members of the Company’s directors or officers has or hashad since January 1, 2004, any interest in any transaction which is or was(i) material to such affiliated party or (ii) material to thebusiness of the Company. No loan is outstanding from the Company to anyManagement Board member or Supervisory Board member and the Company has notprovided any guarantee for the benefit of any such person.

 

Mr. KhaleghiYazdi provides advisory and management services at a rate of EUR 2,000 per dayto strengthen the Company’s Management Board on an interim basis. The amount ofcash compensation of Mr. Khaleghi Yazdi paid and accrued for services inall capacities for the year ending December 31, 2004 was approximately EUR440,000.

 

At the Annual GeneralMeeting to be held on June 16, 2005, shareholders will be asked to appointMr. F. Khaleghi Yazdi as Chief Executive Officer of the Board ofManagement by means of a binding proposal compiled by the Board of SupervisoryDirectors. At the same meeting, Mr. H. Crijns will resign as interim ChiefExecutive Officer.

 

Item 8 - Financial Information

 

**Consolidated Statements andother Financial Information**

 

**Consolidated Statements**

See pages F-1 through F-23 incorporatedherein by reference.

 

**Legal Proceedings**

The Company is engagedas plaintiff or defendant in several lawsuits in The Netherlands and Belgium,originating before 2002. The Company has established reserves of approximatelyEUR 0.8 million relating to specific lawsuits, which represent estimates of itsprobable liabilities with respect to these specific claims. As this litigationmay take several years to complete, future events could require management tomake significant adjustments for revisions to these estimates. The Company doesnot believe that based on current judgments and estimates the outcome in any ofthese lawsuits individually or in the aggregate would have a material adverseimpact on the Company’s business, future results of operations or financialcondition.

** **

**Dividend Distributions**

The Company has neverpaid or declared any cash dividends on its common shares and does notanticipate paying cash dividends in the foreseeable future. Any futuredetermination to pay cash dividends will be at the discretion of theSupervisory Board and will depend on the Company’s financial condition, resultsof operations, capital requirements, general business condition and such otherfactors as the Supervisory Board may deem relevant.

 

The Company has paidcash dividends to the holders of its preferred shares as required by itsArticles of Association, as amended from time to time. The last payment was in2002 being the final installment of a 2001 preferred dividend to the holders ofthen outstanding Preferred Shares. As of December 31, 2003 and 2004 noPreferred Shares were outstanding.

 

**Significant Changes**

 

There have been nosignificant changes in the Company’s business since December 31, 2004.

 

Item 9 - The Offering and Listing

 

The Company’s commonshares are issuable in either registered or bearer form as the holder mayelect. Registered shares may consist of either shares registered with the Bankof New York, the Company’s transfer agent and registrar in New York

 

25

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(respectively, the “NewYork Registered Shares” and the “New York Transfer Agent”), or sharesregistered at the Company’s offices in Vianen, The Netherlands (the “VianenRegistered Shares”). New York Registered Shares and Vianen Registered Sharesmay be evidenced by certificates printed in English and are registered inbook-entry form. Bearer shares may be evidenced by certificates printed inDutch “k Certificates” or “cf Certificates”.

 

The transfer ofregistered shares requires (i) an instrument intended for such purpose, (ii) exceptwhen the Company itself is a party to such legal act, the writtenacknowledgment of the transfer by the Company or, in the case of New YorkRegistered Shares, the New York Transfer Agent on behalf of the Company and (iii) deliveryof the share certificates, if any, to the Company or the New York TransferAgent.

 

The Company’s commonshares are quoted on the Nasdaq Small Cap Market. Effective March 16,1999, the Company’s stock ticker symbol changed from “TPPPF” to “TPPP”.

 

The following tablesets forth, for the years indicated, the high and low sale prices per commonshare during each year, as reported on the Nasdaq Small Cap Market for thefiscal years ending December 31, 2000, 2001, 2002, 2003 and 2004.

 
| **Year**   | ** ** | **High**  | ** ** | **Low**   | ** ** |
|------------|------------|-----------|------------|-----------|------------|
| ** ** | ** ** | **U.S.$** | ** ** | **U.S.$** | ** ** |
| 2000       |       | 2.8750    |       | 0.7031    |       |
| 2001       |       | 1.4100    |       | 0.4500    |       |
| 2002       |       | 1.1000    |       | 0.0500    |       |
| 2003       |       | 1.0500    |       | 0.1100    |       |
| 2004       |       | 1.9700    |       | 0.3300    |       |

 

The following tablesets forth, for the periods indicated, the high and low sale prices per commonshare during each of the quarters as reported on the Nasdaq Small Cap Market.

 
| **Quarter**    | ** ** | **High**  | ** ** | **Low**   | ** ** |
|----------------|------------|-----------|------------|-----------|------------|
| ** **     | ** ** | **U.S.$** | ** ** | **U.S.$** | ** ** |
| 2003           |       |      |       |      |       |
| First quarter  |       | 0.30      |       | 0.11      |       |
| Second quarter |       | 0.52      |       | 0.12      |       |
| Third quarter  |       | 0.65      |       | 0.13      |       |
| Fourth quarter |       | 1.05      |       | 0.38      |       |
|           |       |      |       |      |       |
| 2004           |       |      |       |      |       |
| First quarter  |       | 1.97      |       | 0.57      |       |
| Second quarter |       | 1.42      |       | 0.73      |       |
| Third quarter  |       | 1.00      |       | 0.36      |       |
| Fourth quarter |       | 0.74      |       | 0.33      |       |
|           |       |      |       |      |       |
| 2005           |       |      |       |      |       |
| First quarter  |       | 0.74      |       | 0.35      |       |

 

The following tablesets forth, for the periods indicated, the high and low sale prices per commonshare during each of the months set forth below as reported on the Nasdaq SmallCap Market.

 

26

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| **Year**           | ** ** | **High**  | ** ** | **Low**   | ** ** |
|--------------------|------------|-----------|------------|-----------|------------|
| ** **         | ** ** | **U.S.$** | ** ** | **U.S.$** | ** ** |
| December 2004 |       | 0.74      |       | 0.36      |       |
| January 2005  |       | 0.74      |       | 0.50      |       |
| February 2005 |       | 0.54      |       | 0.41      |       |
| March 2005    |       | 0.66      |       | 0.35      |       |
| April 2005    |       | 0.73      |       | 0.52      |       |
| May 2005      |       | 0.65      |       | 0.38      |       |

 

Item 10 - Additional Information

 

**Memorandum and Articles ofAssociation**

 

**Introduction**

An English translationof the Company’s articles of association, as amended on August 1, 2001, isattached to this Annual Report on Form 20-F. The material provisions ofthe Company’s Articles of Association are summarized below. Such summaries donot purport to be complete statements of these provisions and are qualified intheir entirety by reference to such exhibit. The Company was established inVianen, The Netherlands as number N.V. 538.177. The objectives of the Companyare generally to manage and finance businesses, extend loans and invest capitalas described in greater detail in Article 2 of the Company’s Articles ofAssociation.

 

**Shares**

The Company’sauthorized share capital is currently divided into 43,750,000 common shares,nominal value EUR 0.04 per common share and 19,750,000 preferred shares,nominal value EUR 0.04 per preferred share. The common shares may be in beareror registered form.

 

**Dividends**

Dividends on commonshares may be paid out of annual profits shown in the Company’s annualaccounts, which must be adopted by the Company’s Supervisory Board and approvedby the Company’s shareholders at the general meeting. Any holder of outstandingpreferred shares is entitled to an annual dividend equal to the paid-in capitalon such shares multiplied by such rate as is determined by the Board ofManagement on the first date on which a preferred share is issued and approvedby the Supervisory Board, provided that such rate shall be within threepercentage points of the average deposit rate of the European Central Bank. Suchdividends on preferred shares are cumulative.

 

The Board ofManagement, with the prior approval of the Supervisory Board, may decide thatall or part of the Company’s profits should be retained and not be madeavailable for distribution to shareholders. Those profits that are not retainedshall be distributed to holders of common shares, subject to the rights of theholders of outstanding preferred shares, if any, described above, provided thatthe distribution does not reduce shareholders’ equity below the nominal valueof the issued share capital increased by the amount of reserves required byNetherlands law. At its discretion, subject to statutory provisions, the Boardof Management may, with the prior approval of the Supervisory Board, distributeone or more interim dividends on the common shares before the annual accountshave been approved by the Company’s shareholders. Existing reserves that aredistributable in accordance with Netherlands law may be made available fordistribution upon proposal by the Board of Management, subject to priorapproval by the Supervisory Board. With respect to cash payments, the rights todividends and distributions shall lapse if such dividends or distributions arenot claimed within five years following the day after the date on which theywere made available.

 

**Voting Rights**

Members of the Company’sSupervisory Board are appointed by shareholders at the General Meeting ofShareholders. The Company’s Articles of Association provide that the term ofoffice of each Supervisory Director will expire no later than the earlier ofthe first General Meeting of Shareholders after the fourth anniversary of hisor her appointment and the date on which the General Meeting of Shareholders isheld in the calendar year in which he or she attains the age of 72. Members ofthe Supervisory Board may be re-appointed. Members of the Board of Managementare appointed by shareholders at the General Meeting of Shareholders voting ona proposal by the Supervisory Board.

 

**General Meetings of Shareholders**

The Company’s generalmeetings of shareholders will be held at least once a year, not later than sixmonths after the end of the fiscal year. Notices convening a general meetingwill be mailed to holders of registered shares at least 15 days before thegeneral meeting and will be published in national newspapers in The Netherlandsand abroad in countries where the Company’s bearer shares are admitted forofficial quotation. In order to attend, address and vote at the General Meetingof Shareholders, the holders of the Company’s registered shares must notify theCompany in writing of their intention to attend the meeting and holders of theCompany’s bearer shares must direct the depository to their bearer shares, eachas specified in the published notice. The Company currently does not solicitfrom or nominate proxies for its shareholders and is exempt from the proxy rules ofthe United States Securities Exchange Act. However, shareholders and otherpersons entitled to attend the general meetings

 

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of shareholders may berepresented by proxies with written authority.

 

Other general meetingsof shareholders may be held as often as deemed necessary by the SupervisoryBoard or the Board of Management and must be held if one or more shareholdersor other persons entitled to attend the General Meeting of Shareholders jointlyrepresenting at least 10% of the Company’s issued share capital make a writtenrequest to the Supervisory Board or the Board of Management that a meeting mustbe held and specifying in detail the business to be dealt with at such meeting.Resolutions are adopted at general meetings of shareholders by a majority ofthe votes cast, except where a different proportion of votes is required by theArticles of Association or Netherlands law, in a meeting in which holders of atleast one-third of the outstanding common shares are represented. Each sharecarries one vote.

 

**Amendment of Articles ofAssociation and Winding Up**

A resolution presentedto the General Meeting of Shareholders amending the Company’s Articles ofAssociation or winding up the Company may only be taken after a proposal madeby the Board of Management and approved by the Supervisory Board. A resolutionto dissolve the Company must be approved at general meetings of shareholders byat least a three-fourths majority of the votes cast.

 

**Approval of Annual Accounts**

The Company’s annualNetherlands statutory accounts, together with a certificate of its auditors,will be submitted to the shareholders at the General Meeting of Shareholdersfor approval. Consistent with business practice in The Netherlands and asprovided by the Company’s Articles of Association, approval of the annualaccounts by the shareholders discharges the Board of Management and theSupervisory Board from liability for the performance of their respective dutiesfor the past financial year. Under Netherlands law, this discharge is notabsolute and will not be effective with respect to matters which are not disclosedto the shareholders.

 

**Liquidation Rights**

In the event of theCompany’s dissolution and liquidation, the assets remaining after payment ofall debts and liquidation expenses are to be distributed (a) first, to thepreferred shareholders in an amount equal to the paid-in capital on such sharesplus any declared but unpaid cumulative dividends and (b) second, anyremaining assets will be divided proportionately among the holders of thecommon shares.

 

**Issues of Shares; Pre-emptiveRights**

The Company’s Board ofManagement has the power to issue shares if the Board of Management has beendesignated by the shareholders at the General Meeting of Shareholders (whetherby means of an authorizing resolution or by an amendment to the Company’sArticles of Association) as the authorized body for this purpose. The number ofshares the Board of Management is authorized to issue must be set at the timeof appointment and in the case of common shares may not exceed 20% of thecommon shares then outstanding. Pursuant to a shareholders’ resolution dated June 11,1999, the Board of Management is authorized to issue up to 43,750,000 commonshares and 19,750,000 preferred shares or rights thereto through June 11,2004. The Board of Management may, however, authorize an issuance of sharesonly after obtaining the approval of the Supervisory Board. A designation ofthe Board of Management may be effective for a specified period of up to fiveyears and may be renewed. In the absence of such designation, the shareholdersat the General Meeting of Shareholders have the power to authorize the issuanceof shares. The Shareholders did not renew the designation at the GeneralMeeting of Shareholders on June 11, 2004.

 

Shareholders have apro rata pre-emptive right of subscription to any common shares issued for thepurpose of raising capital, which right may be limited or eliminated. Ifdesignated for this purpose by the shareholders at the General Meeting ofShareholders (whether by means of any authorizing resolution or an amendment tothe Company’s Articles of Association), the Board of Management has the power,subject to approval of the Supervisory Board, to limit or eliminate shareholderpre-emptive rights through June 11, 2004. A designation may be effectivefor up to five years and may be renewed. In the absence of such designation,the shareholders at the General Meeting of Shareholders has the power to limitor eliminate such rights. The foregoing provisions apply equally to theissuance of rights to subscribe for common shares. The Shareholders did notrenew the designation at the General Meeting of Shareholders on June 11,2004.

 

**Preferred Shares**

The provisions for theissuance of preferred shares are similar to the provisions for the issuance ofcommon shares described above. However, an issuance of preferred shares willrequire prior approval of the shareholders at the General Meeting ofShareholders if (a) the Company’s shares are subsequently listed byEuronext Amsterdam N.V., (b) the proposed issuance of preferred shareswould result in an outstanding amount of cumulative preferred shares exceeding100% of the outstanding common shares and (c) the issuance is effectedpursuant to a resolution of a corporate body other than the Company’s GeneralMeeting of Shareholders, such as the Board of Management.

 

If the Company’s stockis subsequently listed by Euronext Amsterdam N.V., then the followingprovisions will apply. If the issuance of preferred shares is effected pursuantto a resolution of a corporate body other than the shareholders at the GeneralMeeting of Shareholders, but the amount of preferred shares to be issued wouldnot exceed 100% of the number of outstanding common shares, then prior approvalof the shareholders at the General Meeting of Shareholders is not required, butthe reasons for the issuance must be explained at an extraordinary GeneralMeeting of Shareholders to be held within four weeks after such issue.Subsequently, within two years after the first issuance of preferred shares, aGeneral Meeting of Shareholders will be held to resolve to repurchase or cancelthe preferred shares. If no such resolution is adopted, subsequent generalmeetings of shareholders for the same purpose must be convened, each of whichmust be held within two years following the preceding meeting, until nopreferred shares remain outstanding. This procedure does not apply to preferredshares that have been issued pursuant to a resolution by, or with the priorapproval of, the shareholders at the General Meeting of Shareholders. In connectionwith the issuance of preferred shares it may be stipulated that an amount notexceeding 75% of the nominal amount may be paid only if the Company requestspayment. A decision of the Board of Management for further payment

 

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requires priorapproval of the Supervisory Board.

 

**Repurchase and Cancellation ofShares**

The Company mayrepurchase up to a maximum of 10% of its common shares, subject to compliancewith the requirements of certain laws of The Netherlands. Common shares ownedby the Company may not be voted or counted for quorum purposes. Any suchpurchases are subject to the approval of the Supervisory Board and theauthorization of the shareholders at the General Meeting of Shareholders. Authorizationis not effective for more than 18 months. The Company may resell shares itpurchases. Upon a proposal of the Board of Management and approval of theSupervisory Board, the Company’s shareholders at the general meeting shall havethe power to decide to cancel shares acquired by the Company or to reduce thenominal value of the common shares. Any such proposal is subject to generalrequirements of Netherlands law with respect to reduction of share capital.

 

Shares may only becancelled by vote of the shareholders at the general meeting. Only shares whichthe Company holds or for which it holds the depository receipts may becancelled. However, an entire class may be cancelled provided the Companyrepays the paid-in capital to the holders of such shares. In the case ofpreferred shares, such repayment includes any declared but unpaid dividends.

 

**Material Contracts**

In 2001, TheDepartment of Justice again appointed Triple P as one of four preferredsuppliers for systems delivery for a maximum of four years commencing October 1,2001. Under these contracts the Company recorded a net revenue of approximatelyEUR 30.7 million in 2002, EUR 17.3 million in 2003 and EUR 21.2 million in2004. The Company has a master-agreement with the Department of Justice in TheNetherlands based on which more than one hundred separate entities orderInformation and Communication Technology Systems (“ICT-systems”). Themaster-agreement expired in September 2004 and has temporarily beencontinued in part until July 1, 2005. The Company is in negotiations for apartial renewal of the contract. The original master-contract has been splitinto six separate smaller contracts. Management expects that the Company maynot be able to compete successfully on all contracts.

 

See the description ofthe Vianen lease above under “Item 4 - Information on the Company - Propertyand Equipment,” the description of the stock compensation plans above under “Item6 - Directors, Officers, Senior Management and Employees - Stock CompensationPlans” and the description of the IFN Finance, B.V. contract above under “Item5 - Operating and Financial Review and Prospects - Management’s Discussion andAnalysis of Financial Conditions and Results of Operations - Liquidity andCapital Resources”.

 

**Exchange controls**

There are currently nolimitations on the rights of shareholders from outside The Netherlands to holdor vote common shares either under the laws of The Netherlands or in theCompany’s Articles of Association. Cash distributions payable in euros, if any,may be officially transferred from and to The Netherlands and converted intoany other currency without Netherlands legal restrictions. However, forstatistical purposes such payments and transactions must be reported to theDutch Central Bank. We have no current intention to pay dividends on our commonshares.

 

**Taxation**

** **

**Introduction**

The following is onlya summary of the material anticipated tax consequences of an investment incommon shares under U.S. federal income tax and Netherlands tax laws. The discussiondoes not propose to deal with all possible tax consequences relating to aninvestment in common shares. In particular, the discussion does not address thetax consequences under state, local and other (e.g., non-U.S. ornon-Netherlands) tax laws, nor does it address special circumstances that mayapply to individual investors. Accordingly, each shareholder is advised toconsult its tax adviser regarding the tax consequences of its investment incommon shares. This summary is based on the U.S. Internal Revenue Code of 1986,the Regulations as amended thereunder, current case law, published rulings, andNetherlands tax laws and regulations.

 

The anticipated taxconsequences are subject to change, and such change may be retroactivelyeffective. If so, the following summary may be affected and therefore shouldnot be relied upon. Further, any variation or differences from the facts orrepresentations recited herein might, for any reason, affect the followingdiscussion, perhaps in an adverse manner. In addition, the Company’s U.S. andNetherlands tax advisers have not undertaken any obligation to update thisdiscussion for changes in facts or laws occurring subsequent to the datehereof.

 

The following summarysolely represents the views of the U.S. and Netherlands tax advisers of theCompany regarding interpretation of existing law and, accordingly, no assurancecan be given that the tax authorities or courts in the U.S. or The Netherlandswill agree with this summary.

 

**Netherlands Taxes**

The following is onlya summary of Netherlands tax consequences for an owner of common shares who isnot, and is not deemed to be, a resident of The Netherlands for purpose of therelevant tax codes (a “non-resident shareholder”). The summary does not addresstaxes imposed by The Netherlands and its political subdivisions, other than thedividend withholding tax, personal income tax, corporate income tax, net wealthtax, and gift and inheritance tax.

 

**Netherlands Dividend Withholding Tax**

To the extent thatdividends are distributed by the Company, such dividends are subject underNetherlands tax law to a 25% withholding tax. Dividends include dividends incash or in kind, constructive dividends, repayment of paid-in capital not

 

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recognized forNetherlands tax purposes and liquidation proceeds in excess of, for Netherlandstax purposes, recognized paid-in capital. Stock dividends are also subject towithholding tax unless distributed out of the Company’s additional paid-in capitalas recognized for Netherlands tax purposes.

 

A non-residentshareholder can be eligible for a reduction or a refund of Netherlands dividendwithholding tax under a tax treaty which is in effect between the country ofresidence of the shareholder and The Netherlands. The Netherlands has concludedsuch treaties with, among others, the U.S., almost all European Unioncountries, Canada, Switzerland and Japan. Under most of these treaties,Netherlands dividend withholding tax is reduced to a rate of 15% or less unlessthe recipient shareholder has a permanent establishment in The Netherlands.

 

Under the Tax Treatyof December 18, 1992, between The Netherlands and the United States,together with the related Protocol (the “U.S. Tax Treaty”), Dutch dividend withholdingtax may be reduced. Reduction to 15% is possible if the dividends are paid by aDutch company to a resident of the United States, other than an exemptorganization or exempt pension trust, as discussed below. Reduction to 5% ispossible in the case of certain U.S. corporate shareholders who own directly atleast 10% of the voting power in the Company (“qualified shareholding”),provided such shareholder does not have an enterprise or an interest in anenterprise that is, in whole or in part, carried on through a permanentestablishment or permanent representative or fixed base in The Netherlands andto which enterprise or part of an enterprise the shares are attributable.Provided certain formalities have been fulfilled, the U.S. Tax Treaty allows acomplete exemption from Dutch withholding tax for dividends received by exemptpension trusts and exempt organizations, as defined therein. As of February 1,2005 the dividend withholding tax may be reduced to nil, based on the newprotocol to the tax treaty between The Netherlands and The United States (seebelow).

 

Except in the case ofexempt organizations other than pension funds, such reduced dividendwithholding rate (or exemption from withholding) can be applied at the sourceupon payment of dividends, other than dividends stemming from a qualifyingshareholding, provided Form IB 92 USA has been properly filed with theDutch tax authority in advance of the payment; a copy should be filed with theU.S. tax authority. If certain conditions are met, one Form IB 92 USA canbe filed by all the U.S. shareholders together. Form IB 92 USA is alsorequired for a refund of Dutch dividend withholding tax. Exempt organizationsand exempt pension funds which are not able to fulfill the formalities requiredto claim a full exemption at source remain subject to Dutch dividendwithholding tax at the statutory rate of 25% and are required to properly file Form IB95 USA and Form IB 96 USA, respectively for a refund of such withholdingwith the Dutch tax authority; a copy should be filed with the U.S. taxauthority. These Forms are available for dividends other than any dividendspaid in connection with a qualified shareholding.

 

A person may not claimthe benefits of the U.S. Tax Treaty unless (i) such person is a residentof the United States as defined therein and (ii) such person’s entitlementto such benefits is not limited by the provisions of Article 26 (“limitationon benefits”) of the U.S. Tax Treaty. Furthermore, a reduction of Dutchdividend withholding tax may be refused by the Dutch tax authorities ifso-called “dividend stripping” has occurred. Dividend stripping is assumed ifthe recipient of the dividend is not the beneficial owner of the dividend. Ifas a result of transactions the dividend is for the account of another personwhile another person directly or indirectly remains the beneficial owner of theshares, through for example a deep in the money put option, and the recipientof the dividend is entitled to a further reduction than the beneficial owner, areduction will be denied. In this scenario, the 25% Dutch dividend withholdingtax will not be reduced.

 

No withholding taxapplies to the sale or disposition of shares to persons other than the companyor companies in which the Company has a direct or indirect interest and on thesale or disposition of shares other than by persons holding or deemed to hold asubstantial interest in the Company.

 

Under certainconditions, the Company may reduce the remittance of the dividend tax withheld.The reduction applies to the distribution of dividends received relating toshares and profit sharing bonds in a foreign subsidiary resident in TheNetherlands Antilles, Aruba or a treaty country, provided the Company –together with its Dutch resident affiliated companies – holds an interest of atleast 25% in that subsidiary and provided a withholding tax of at least 5% wasdue on the profit distribution. The reduction is the lower of 3% of the grossdividend paid by the Company or 3% of the dividends received relating to thementioned shares and profit sharing bonds received in the current or twoprevious calendar years. The reduction is a benefit to the Company itself andmay not be distributed without further Dutch dividend withholding tax on thatdistribution.

 

The U.S. and TheNetherlands have negotiated a revised tax treaty for the avoidance of doubletaxation. In this respect it is noted that on March 8, 2004 the UnitedStates and The Netherlands agreed on a new protocol to the tax treaty concludedbetween parties. The new protocol introduces, among others a 0% dividendwithholding tax rate on dividends, provided certain requirements are met. Thefollowing requirements have to be met:

 

The person who is thebeneficial owner of the dividend is a company that is a resident of the otherstate that has owned directly shares representing 80 percent or more of thevoting power in the company paying the dividends for a 12-month period endingon the date the dividend is declared and:

 

(a) owned,directly or indirectly, shares representing at least 80 percent of the votingpower in the company paying the dividends prior to October 1st, 1998;

 

(b) is aqualified person by reason of subparagraph c of paragraph 7 of article 26(limitation of benefits);

 

(c) is entitledto benefits with respect to the dividends under paragraph 3 of article 26;or

 

(d) has receiveda determination pursuant to paragraph 7 of article 26 with respect to thisparagraph.

 

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In addition, abovementioned in article 26 (limitation on benefits) is adjusted. Somerequirements to the various tests mentioned in article 26 is adjusted.Some requirements to the various tests mentioned in article 26 will becomemore severe and others will be moderated. The protocol enters into effect as ofFebruary 1, 2005 as far as it concerns withholding taxes. For other taxesthe protocol enters into effect January 1, 2005.

 

**Netherlands Personal Income Tax and Corporate Income Tax**

A non-residentshareholder will not be subject to Netherlands personal or corporate income taxwith respect to dividends distributed by the Company on the common shares orwith respect to capital gains derived from the sale or disposal of commonshares in the Company, provided:

 

(a)     the non-resident shareholder does not carry on a business in TheNetherlands through a permanent establishment or a permanent representative towhich or to whom the common shares are attributable;

 

(b) the non-resident shareholder does not have adirect or indirect substantial interest in the share capital of the Company asdefined in The Netherlands tax code or, in the event the non-residentshareholder does have such a substantial interest, such interest is a businessasset, provided that such business asset is not held by a permanentestablishment or permanent representative in The Netherlands; and

 

(c) the non-resident shareholder is not entitledto a share in the profits of an enterprise effectively managed in TheNetherlands other than by way of securities or through an employment contractto which enterprise the shares are attributable.

 

In general terms, tohave a substantial interest in the share capital of the Company thenon-resident shareholder must, alone or together with certain close relatives,hold directly or indirectly 5% or more of the subscribed capital of any classof shares in the Company, or a right to acquire at least 5% of the issued sharecapital in any class of shares of the Company. The Netherlands imposes incometax at the rate of 25% on the capital gain realized upon the sale of shares ina Dutch registered company in which the taxpayer has a substantial interest andalso on dividends received by a taxpayer from a Netherlands company in whichthe taxpayer has a substantial interest.

 

Notwithstanding theabove, under most tax treaties, The Netherlands may not impose tax on capitalgains realized upon the sale or disposition of shares by shareholders entitledto treaty benefits unless certain additional conditions are met. In particular,under the U.S. Tax Treaty, The Netherlands may not impose tax on capital gainsrealized by a shareholder that is a treaty beneficiary unless:

•                  theshareholder alone or together with certain relatives owns at least 25% of anyclass of shares; and

•                  theshareholder has, at any time during the five-year period preceding thedisposition, been a resident of The Netherlands.

 

**Deemed Capital Net Assets Tax (formerly “Net Wealth Tax”)**

As of January 1,2001, The Netherlands net wealth tax has been abolished and replaced by a deemedcapital net assets tax, i.e. “forfaitaire vermogens rendementsheffing”, whichis included in Netherlands personal income tax legislation. A non-residentshareholder who is an individual is not subject to Netherlands deemed capitalnet assets tax with respect to the common shares, provided the non-residentshareholder is not and is not deemed to be entitled to a share in the profitsof an enterprise effectively managed in The Netherlands, other than by way ofshares (“effectenbezit”) or employment.

 

Corporations are notsubject to Netherlands deemed capital net assets tax.

 

**Netherlands Gift and Inheritance Tax**

A gift or inheritanceof shares from a non-resident shareholder will not be subject to Netherlandsgift and inheritance tax, provided:

•             the non-resident shareholder does not haveand is not deemed to have an enterprise or an interest in an enterprise thatis, in whole or in part, carried on through a permanent establishment, a fixedbase or a dependent agent in The Netherlands; and

•             the non-resident shareholder is not and isnot deemed to be entitled to a share in the profits of an enterpriseeffectively managed in The Netherlands, other than by way of shares (“effectenbezit”)or employment.

 

For purposes ofNetherlands gift and inheritance tax, a Dutch citizen is deemed to be aresident of The Netherlands if he has been a resident thereof at any timeduring the ten years preceding the date of the gift or death. For purposes ofNetherlands gift tax, a non-Dutch citizen is deemed to be a resident of TheNetherlands if he has resided therein at any time in the twelve monthspreceding the date of the gift. A gift or inheritance of shares from a residentor deemed resident as defined in The Netherlands tax code will be subject toNetherlands gift or inheritance tax. In order to avoid double taxation, if theUnited States also has a taxation right based on its national tax law, TheNetherlands and the United States have concluded a special tax treaty forinheritance tax. Based on the treaty, however, both states may be entitled tolevy taxes on the estate on the basis of the citizenship and residency of aperson. The treaty provides for a tax credit in such case to be granted,partially by both countries, in order to avoid full double taxation.

 

In December 2002,a lower Dutch tax court ruled that the deemed residency criterion is inconflict with European law. The Dutch State-Secretary of Finance requested theDutch Supreme Court to reexamine the decision of the lower court. In July 2004,the Advocate General concluded that the Dutch regime is incompatible with theEU-treaty. The Supreme Court, however, has not yet decided on this matter.

 

In November 2003,a lower Dutch tax court asked the European court to decide whether the deemedresidence criterion is in conflict with European tax law. The outcome of thisprocedure is not expected in the near future.

 

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**United States Taxes**

The following discussion summarizes the material U.S.federal income tax consequences relating to the acquisition, ownership anddisposition of common shares by a U.S. holder as defined below. This summarydeals only with common shares held as capital assets and does not deal with thetax consequences applicable to all categories of investors some of which, suchas tax-exempt entities, banks, broker-dealers, investors who hold common sharesas part of hedging or conversion transactions and investors whose functionalcurrency is not the U.S. dollar, may be subject to special rules. The followingsummary also does not address special issues relevant to persons who own,directly or by attribution, 10% or more of our outstanding voting sharecapital. Shareholders are advised to consult their own tax advisers withrespect to their particular circumstances and with respect to the effects ofU.S. federal, state, local, or other laws to which they may be subject.

 

As used herein, a U.S. holder means a beneficial ownerof common shares that for U.S. federal income tax purposes is (i) acitizen or resident of the United States, (ii) a United States domesticcorporation or entity taxable as a corporation, or (iii) otherwise subjectto U.S. federal income taxation on net income regardless of its source.

 

**Taxation of Dividends**

Subject to the discussion below under “Passive ForeignInvestment Company Considerations”, for U.S. federal income tax purposes, thegross amount of cash distributions (including the amount of foreign taxes, ifany, withheld therefrom) paid out of our current or accumulated earnings andprofits (as determined for U.S. federal income tax purposes) will be includiblein the gross income of a U.S. holder as dividend income on the date of receipt.Dividends paid by us generally will be treated as foreign source income andwill not be eligible for the dividends received deduction generally allowed tocorporate shareholders under U.S. federal income tax law. Distributions inexcess of our earnings and profits will be treated, for U.S. federal income taxpurposes, first as a nontaxable return of capital to the extent of the U.S.holder’s tax basis in the common shares and thereafter as capital gain. Theamount of any dividend paid in a non-U.S. currency will be equal to the U.S.dollar value of the non-U.S. currency on the date of receipt, regardless ofwhether the U.S. holder converts the payment into U.S. dollars. A U.S. holderwill have a tax basis in the non-U.S. currency distributed equal to such U.S.dollar amount. Gain or loss, if any, recognized by a U.S. holder on the sale ordisposition of the non-U.S. currency generally will be U.S. source ordinaryincome or loss.

 

Dividend income is generally taxed as ordinary income.However, a maximum U.S. federal income tax rate of 15% will apply to “qualifieddividend income” received by individuals (as well as certain trusts andestates) in taxable years beginning before January 1, 2009, provided thatcertain holding period requirements are met. “Qualified dividend income”includes dividends paid on shares of U.S. corporations as well as dividendspaid on shares of “qualified foreign corporations” if, among other things: (i) theshares of the foreign corporation are readily tradable on an establishedsecurities market in the U.S.; or (ii) the foreign corporation is eligiblewith respect to substantially all of its income for the benefits of acomprehensive income tax treaty with the U.S. which contains an exchange ofinformation program (a “qualifying treaty”). Our common shares are readilytradable on The NASDAQ National Market. In addition, the U.S. Tax Treaty is aqualifying treaty. Accordingly, we believe that dividends paid by us withrespect to our common shares should constitute “qualified dividend income” forU.S. federal income tax purposes, provided that the holding period requirementsare satisfied and none of the other special exceptions applies. However, if weare a “passive foreign investment company” (as discussed below) in the year inwhich a dividend is paid or the preceding year, we will not be a “qualifiedforeign corporation” and the dividend will not qualify for the reduced rate oftax.

 

Foreign taxes withheld from a distribution willgenerally be treated as a foreign income tax that U.S. holders may elect todeduct in computing their U.S. federal taxable income. Alternatively, U.S.holders may be eligible for a credit against their U.S. federal income taxliability for non-refundable amounts that are withheld pursuant to the U.S. TaxTreaty, subject to certain complex conditions and limitations that must bedetermined on an individual basis by each U.S. holder. These limitationsinclude, among others, rules that may limit foreign tax credits allowablewith respect to specific classes of income to the U.S. federal income taxesotherwise payable with respect to each such class of income. Dividends paid byus generally will be foreign source “passive income” or “financial servicesincome” for U.S. foreign tax credit purposes.

 

**Taxation on Sale, Exchange or Other Disposition of Common Shares**

Unless a nonrecognition provision applies, U.S.holders will generally recognize gain or loss for U.S. federal income taxpurposes on the sale, exchange or other disposition of common shares in anamount equal to the difference between the U.S. dollar value of the amountrealized and the U.S. holder’s adjusted tax basis in the common shares. Ingeneral, a U.S. holder’s tax basis in the common shares will be equal to theamount paid by the U.S. holder for the common shares. Subject to the discussionbelow under “Passive Foreign Investment Company Considerations”, such gain orloss will generally be U.S. source capital gain or loss, and will be long-termcapital gain or loss if the common shares have been held for more than oneyear. If a U.S. holder is an individual, trust or estate, long-term capitalgain realized upon a disposition of a common share before the end of a taxableyear which begins before January 1, 2009 generally will be subject to a maximumU.S. federal income tax rate of 15%. Gains on the sale of common shares heldfor one year or less will be treated as short-term capital gain and taxed asordinary income at the U.S. holder’s marginal income tax rate. Capital lossesmay only be used to offset capital gains, except that U.S. individuals maydeduct up to $3,000 of net capital losses against ordinary income. U.S. holdersshould consult their own tax advisers regarding the availability of thisoffset.

 

**Passive Foreign Investment Company Considerations**

If, during any taxable year, 75% or more of our grossincome consists of certain types of passive income, or the average value duringa taxable year of our passive assets (generally assets that generate passiveincome) is 50% or more of the average value of all of our assets, we will betreated as a “passive foreign investment company”, or PFIC, under U.S. federalincome tax law for such year and succeeding years. Based on an analysis of ourfinancial position, including an estimate of the value of our assets, webelieve that we have not been a PFIC for U.S. federal income tax purposes forany preceding taxable year and expect that we will not become a PFIC during thecurrent taxable year. Our determination of PFIC status for any particular yearmay be challenged by the Internal Revenue Service. We intend to use reasonableefforts to avoid becoming a PFIC, but can give no assurance that we will besuccessful. If we determine that we are a PFIC, we will take reasonable stepsto notify U.S. holders.

 

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If we are classified as a PFIC, unless a U.S. holdertimely makes one of the elections described below, a special tax regime wouldapply to both:

 

•                  any “excessdistribution”, which would be such holder’s share of distributions in any yearthat are greater than 125% of the average annual distributions received by suchholder in the three preceding years or such holder’s holding period, ifshorter; and

•                  any gain realized onthe sale or other disposition of the common shares.

 

Under this regime, any excess distribution andrealized gain would be treated as ordinary income and would be subject to taxas if the excess distribution or gain had been realized ratably over the U.S.holder’s holding period for the common shares. As a result of this treatment:

 

•                  the amount allocatedto the taxable year in which the holder realizes the excess distribution orgain would be taxed as ordinary income;

•                  the amount allocatedto each prior year, with certain exceptions, would be taxed as ordinary incomeat the highest applicable tax rate in effect for that year; and

•                  the interest chargegenerally applicable to underpayments of tax would be imposed on the taxesdeemed to have been payable in those previous years.

 

If a U.S. holder makes a mark-to-market election withrespect to such holder’s common shares, the holder will not be subject to thePFIC rules described above. Instead, in general, such U.S. holder willinclude as ordinary income each year the excess, if any, of the fair marketvalue of such holder’s common shares at the end of the taxable year over theholder’s adjusted tax basis in those shares. Such U.S. holder will also beallowed to take an ordinary loss in respect of the excess, if any, of theadjusted tax basis of the holder’s common shares over their fair market valueat the end of the taxable year, but only to the extent of the net amount ofincome previously included as a result of the mark-to-market election. The U.S.holder’s tax basis in the shares will be adjusted to reflect any such income orloss amounts. Any gain realized upon disposition of such U.S. holder’s commonshares also will be taxed as ordinary income. The mark-to-market election willbe available only if the common shares are regularly traded on a qualifiedexchange. The NASDAQ National Market is a qualified exchange.

 

The special PFIC tax rules described above alsowill not apply to a U.S. holder if the holder makes a QEF election, that is,the holder elects to have us treated as a qualified electing fund for U.S.federal income tax purposes. If we determine that we are a PFIC, we willprovide U.S. holders with such information as they may require from us in orderto make an effective QEF election. If a U.S. holder makes a QEF election, theholder will be required to include in gross income for U.S. federal income taxpurposes such holder’s pro rata share of our ordinary earnings and net capitalgain for each of our taxable years that we are a PFIC, regardless of whether ornot the holder receives any distributions from us. Such U.S. holder’s tax basisin the common shares will be increased to reflect undistributed amounts thatare included in such holder’s gross income. Distributions of previouslyincludible income will result in a corresponding reduction of basis in thecommon shares and will not be taxed again as a distribution to such holder. Anygain realized upon disposition of such holder’s shares generally will be taxedas capital gain.

 

U.S. holders are urged to consult their own taxadvisers concerning the potential application of the PFIC rules to theownership and disposition of common shares, including as to the advisability ofmaking either a mark-to-market or QEF election.

 

**Gift and Estate Taxes**

An individual U.S. holder generally will be subject toU.S. gift and estate taxes with respect to common shares in the same manner andto the same extent as with respect to other types of personal property.

 

**Information Reporting and Backup Withholding**

Dividend payments with respect to common shares andproceeds from the sale, exchange or other disposition of common shares may besubject to information reporting to the Internal Revenue Service and possiblebackup withholding at a 28% rate. Backup withholding will generally not apply toa U.S. holder, however, if the holder furnishes a correct taxpayeridentification number and makes any other required certification or if theholder is otherwise exempt from backup withholding. If the U.S. holder isrequired to establish the holder’s exempt status the holder generally mustprovide such certification on Internal Revenue Service Form W-9.

 

Backup withholding is not an additional tax. Amountswithheld as backup withholding may be credited against a U.S. holder’s U.S.federal income tax liability, and the holder may obtain a refund of any excessamounts withheld under the backup withholding rules by filing theappropriate claim for refund with the Internal Revenue Service and furnishingany required information.

 

**Documents on Display**

The Company is subject to the informationalrequirements of the Securities Exchange Act of 1934, as amended. In accordancewith these requirements, the Company files reports and other information withthe United States Securities and Exchange Commission (“SEC”). These materialsmay be inspected at the Company’s office in Vianen, The Netherlands. TheCompany’s Investor Relations Department may be reached at +31 347 353 650.Documents filed with the SEC may also be read and copied at the SEC’s publicreference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549 and atthe regional offices of the SEC located at 500 West Madison Street, Suite 1400,Chicago, IL 60661. Please call the SEC at 1-800-SEC-0330 for furtherinformation on the public reference rooms. The SEC also maintains a web site athttp://www.sec.gov that contains reports, proxy statements and otherinformation regarding registrants that file electronically with the SEC.

 

33

----

 

Item 11 - Quantitative and Qualitative Disclosure aboutMarket Risk

 

The Company’s market exposure is primarily interestrate risk on short-term borrowings and, to a limited extent, foreign currencyexposure on operational transactions. The Company has no formal risk managementpolicy to reduce potential negative earnings effects from changes in interestand foreign exchange rates. The Company does not use financial instruments forhedging, trading or other speculative purposes.

 

**Interest Rate Risk**

At December 31, 2004, the Company had (i) noshort-term borrowings outstanding and (ii) an EUR 119,000 interest-bearingloan – 4% - outstanding from Nationale Nederlanden, a Dutch pension company. Animmediate 10% change in interest rates would not have a material effect on theCompany’s results of operations over the next fiscal year.

 

**Foreign currency exchange rate risk**

The Company has no material exposure to foreigncurrency exchange rate risk as both its revenues and expenses are mainlydenominated in euro. In addition, no significant firmly committed sales orpurchase contracts in foreign currencies are outstanding.

 

No foreign currency denominated debts are outstanding.As a consequence, management believes that a 10% adverse movement in foreigncurrency rates will not have a significant effect on the Company’s consolidatedfinancial position and results of operations over the next fiscal year.

 

Item 12 - Description of Securities Other than EquitySecurities

 

Not applicable.

 

34

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Part II

 

Item 13 - Defaults, Dividend Arrearages and Delinquencies

 

Notapplicable.

 

Item 14 - Material Modifications to the Rights of SecurityHolders and Use of Proceeds

 

Not applicable.

 

Item 15 - Controls and Procedures

 

**Disclosure Controls and Procedures**

 

Our management, with the participation of ourprincipal executive officer and principal financial officer, evaluated theeffectiveness of our disclosure controls and procedures as of December 31,2004. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and15d-15(e) under the Exchange Act, means controls and otherprocedures of a company that are designed to ensure that information requiredto be disclosed by us in the reports that we file or submit under the ExchangeAct is recorded, processed, summarized and reported, within the time periodsspecified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controlsand procedures designed to ensure that information required to be disclosed bya company in the reports that it files or submits under the Exchange Act isaccumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allowtimely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter howwell designed and operated, can provide only reasonable assurance of achievingtheir objectives and management necessarily applies its judgment in evaluatingthe cost-benefit relationship of possible controls and procedures.  Based on this evaluation of our disclosurecontrols and procedures as of December 31, 2004, our principal executiveofficer and principal financial officer concluded that, as of such date, ourdisclosure controls and procedures were effective at the reasonable assurancelevel.

 

**Changes in Internal Control OverFinancial Reporting**

 

No change in our internal control over financialreporting occurred during the fiscal year ended December 31, 2004 that hasmaterially affected, or is reasonably likely to materially affect, the Company’sinternal control over financial reporting.

 

Item 16 - [Reserved]

 

Item 16A - Audit Committee Financial Expert

 

The Board of Supervisory Directors has determined thatthe Company does not have an Audit Committee financial expert serving on itsAudit Committee. The Board of Supervisory Directors believes that the membersof the Audit Committee, Mr. A.H.M. Stam and Mr. H.C.A. Groenen,collectively possess the knowledge and experience to oversee and assess theperformance of our management and auditors, the quality of our disclosurecontrols, the preparation and evaluation of our financial statements and ourfinancial reporting as well as the necessary understanding of Audit Committeefunctions to diligently execute their responsibilities. Biographicalinformation on each member of the Audit Committee is available in Item 6 ofthis Annual Report on Form 20-F. At the Annual General Meeting to beheld on June 16, 2005, shareholders will be asked to appoint Mr. H.J.IJsendoorn as a member of the Board of Supervisory Directors and the AuditCommittee; he is a certified public accountant and will undertake the functionof audit committee financial expert.

 

Item 16B - Code Of Ethics

 

The Company has adopted a written code of ethics thatapplies to all Company employees, including the Company’s principal executiveofficer, principal financial officer and principal accounting officer.

 

You may request a copy of our code of ethics, at nocost, by writing to or telephoning us as follows:

 

35

----

 

Triple P N.V.

IR. D.S. Tuynmanweg 10

4131 PN Vianen

The Netherlands

Telephone: +31 347 353 650

 

Item 16C - Principal Accountant Fees and Services

 

On December 17, 2004, the Company’s AuditCommittee of the Supervisory Board dismissed Ernst & Young Accountantsand engaged Deloitte Accountants B.V. to audit and report on the ConsolidatedFinancial Statements of the Company for the year ended December 31, 2004.

 

During 2002 and 2003, Ernst & YoungAccountants acted as the Company’s independent auditors.

 

**Audit Fees**

The aggregate fees for 2004 for audit servicesprovided by Deloitte Accountants B.V. were EUR 125,000 which included feesassociated with the annual audit, consultations on various accounting issuesand performance of local statutory audits.

 

The aggregate fees for 2003 audit services provided byErnst & Young were EUR 132,500 which included fees associated with theannual audit, consultations on various accounting issues and performance oflocal statutory audits.

 

**Audit-Related Fees**

Deloitte Accountants B.V. billed the Company no feesfor audit related services for 2004.

 

Ernst & Young billed the Company no fees foraudit-related services for 2003.

 

**Tax Fees**

Deloitte Accountants B.V. billed the Company no feesfor tax advice, including fees associated with tax compliance services, taxplanning services and other tax consulting services for 2004.

 

Ernst & Young billed the Company no fees fortax advice, including fees associated with tax compliance services, taxplanning services and other tax consulting services for 2003.

 

**All Other Fees**

Deloitte Accountants B.V. billed the Company no feesfor services other than Audit Fees described above for 2004.

 

Ernst & Young billed the Company no fees forservices other than Audit Fees described above for 2003.

 

**Pre-Approval Policies For Non-Audit Services**

Prior to the engagement of Deloitte Accountants B.V.,each year the engagement is approved by the Audit Committee of the Board ofSupervisory Directors and by vote of the Company’s shareholders at the Company’sAnnual General Meeting of Shareholders. The Company’s Audit Committee does nothave pre-approval policies, but non-audit services are not performed unless pre-approvedby the Audit Committee. In 2004, the Company’s Audit Committee approved all ofthe services provided by Deloitte Accountants B.V.

 

Item 16D - Exemptions from the Listing Standards for AuditCommittees

 

Not applicable.

 

Item 16E - Purchases of Equity Securities by the Issuer andRelated Purchasers

 

Not applicable.

 

36

----

 

Part III

 

Item 17 - Financial Statements

 

Notapplicable.

 

Item 18 - Financial Statements

 

The following Consolidated Financial Statements,together with the reports of our independent auditors therein, appearing on pages F-1through F-23 are filed as part of this report on Form 20-F.

 

37

----

 

**Triple P N.V. Consolidated Financial Statements**

 
| **Contents**                                          | ** ** |
|-------------------------------------------------------|------------|
|                                                  |       |
| Report  of Independent Registered Accounting Firm     |       |
|                                                  |       |
| Consolidated Balance  Sheets                          |       |
|                                                  |       |
| Consolidated  Statements of Operations                |       |
|                                                  |       |
| Consolidated  Statements of Shareholders’ Equity |       |
|                                                  |       |
| Consolidated  Statements of Cash Flows                |       |
|                                                  |       |
| Notes  to Consolidated Financial Statements           |       |

 

----

 

Triple P N.V.

 

**Report of Independent Registered Public Accounting Firm**

 

**To the Supervisory Board and Board of Management of Triple PN.V.**

 

We have audited the accompanying consolidated balancesheet of Triple P N.V. and subsidiaries as of December 31, 2004 and therelated consolidated statement of operations, shareholders’ equity, and cashflow for the year then ended (all expressed in Euro). Our audit also includedthe financial statement schedule listed in the Index at Item 18A. Thesefinancial statements and financial statement schedule are theresponsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements and financial statement schedule based on our audit. Thefinancial statements and financial statement schedules of the Company for theyears ended December 31, 2003 and 2002 were audited by other auditorswhose report, dated March 24, 2004, expressed an unqualified opinion onthese statements.

 

We conducted our audit in accordance with the standardsof the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. The Company is not required to have, nor were we engaged toperform, an audit of its internal control over financial reporting.  An audit includes consideration of internalcontrol over financial reporting as a basis for designing audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control over financialreporting. Accordingly, we express no such opinion.  An audit also includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements, assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation.  We believe that our auditprovides a reasonable basis for our opinion.

 

In our opinion, such consolidated financial statementspresent fairly, in all material respects, the financial position of Triple PN.V. and subsidiaries as of December 31, 2004, and the result of itsoperations and its cash flow for the year then ended in conformity withaccounting principles generally accepted in the United States of America. Also,in our opinion, such financial statement schedule, when considered in relationto the basic consolidated financial statements taken as a whole, present fairlyin all material respects the information set forth therein.

 

 
|                        | /s/ Deloitte Accountants B.V. |
|-----------------------------|-------------------------------|
|                        |
| Eindhoven,  The Netherlands |
| May 24,  2005          |

 

F-1

----

 

Triple P N.V.

 

**Report of Independent Registered Public Accounting Firm**

 

**To the Shareholders and Supervisory Board of Triple P N.V.,**

 

We have audited the accompanying consolidated balancesheet of Triple P N.V. and subsidiaries as of December 31, 2003, and therelated consolidated statements of operations, shareholders’ equity, and cashflows for each of the two years in the period ended December 31, 2003. Ouraudits also included the financial statement schedule for 2002 and 2003listed in the Index at Item 18A. These financial statements and schedule arethe responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements and schedule based on ouraudits.

 

We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 financial statements referred toabove present fairly, in all material respects, the consolidated financialposition of Triple P N.V. and subsidiaries at December 31, 2003, and theconsolidated results of their operations and their cash flows for each of thetwo years in the period ended December 31, 2003, in conformity with U.S.generally accepted accounting principles. Also, in our opinion, the relatedfinancial statement schedule for 2002 and 2003, when considered inrelation to the basic financial statements taken as a whole, present fairly inall material respects the information set forth therein.

 
|                       | /s/ Ernst & Young Accountants |
|----------------------------|----------------------------------------|
|                       |
| Eindhoven, The Netherlands |
| March 24, 2004        |

 

F-2

----

 

Triple P NV

**Consolidated Balance Sheets**

(in thousands exceptshare and per share amounts)

 
| ** **                                                                                                | ** ** | ** ** | ** ** | **At December 31,** | ** ** |
|-----------------------------------------------------------------------------------------------------------|------------|------------|------------|--------------------------|------------|
| ** **                                                                                                | ** ** | **Notes**  | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| ** **                                                                                                | ** ** | ** ** | ** ** | **EUR**                  | ** ** | **EUR** | ** ** |
| **Assets**                                                                                                |       |       |       |                     |       |   |   |
| Current  Assets:                                                                                          |       |       |       |                     |       |   |   |
| Cash and  cash equivalents                                                                                |       |       |       | 5,732                    |       | 6,495 |   |
| Restricted  cash                                                                                          |       | 7          |       | 462                      |       | 12 |   |
| Accounts  receivable, net of an allowance for doubtful accounts of EUR 860 in 2003 and  EUR 1,084 in 2004 |       |       |       | 10,182                   |       | 9,706 |   |
| Inventories                                                                                               |       | 3.2        |       | 1,255                    |       | 1,948 |   |
| Prepaid  expenses and other current assets                                                                |       | 3.3        |       | 2,186                    |       | 2,317 |   |
| Total  current assets                                                                                     |       |       |       | 19,817                   |       | 20,478 |   |
|                                                                                                      |       |       |       |                     |       |   |   |
| Non-Current  Assets:                                                                                      |       |       |       |                     |       |   |   |
| Property and  equipment, at cost                                                                          |       |       |       | 2,564                    |       | 2,326 |   |
| Less:  accumulated depreciation and amortization                                                          |       |       |       | 1,265                    |       | 1,445 |   |
| Net property  and equipment                                                                               |       | 3.1        |       | 1,299                    |       | 881 |   |
| Total  non-current assets                                                                                 |       |       |       | 1,299                    |       | 881 |   |
| Total assets                                                                                              |       |       |       | 21,116                   |       | 21,359 |   |
|                                                                                                      |       |       |       |                     |       |   |   |
| **Liabilities and Shareholders’ Equity**                                                             |       |       |       |                     |       |   |   |
| Current  liabilities:                                                                                     |       |       |       |                     |       |   |   |
| Short-term  portion of long-term liabilities                                                              |       |       |       | 322                      |       | 119 |   |
| Accounts  payable                                                                                         |       |       |       | 7,470                    |       | 8,105 |   |
| Accrued  liabilities                                                                                      |       | 3.4        |       | 5,436                    |       | 6,446 |   |
| Customer  deposits                                                                                        |       |       |       | 622                      |       | 1,154 |   |
| Deferred  revenue                                                                                         |       |       |       | 3,767                    |       | 3,034 |   |
| Restructuring  reserve                                                                                    |       | 4          |       | 205                      |       | 964 |   |
| Total  current liabilities                                                                                |       |       |       | 17,822                   |       | 19,822 |   |
|                                                                                                      |       |       |       |                     |       |   |   |
| Long-term  liabilities:                                                                                   |       |       |       |                     |       |   |   |
| Pension  obligations                                                                                      |       | 8          |       | 424                      |       | 434 |   |
| Other  long-term liabilities                                                                              |       | 3.5        |       | 143                      |       | 461 |   |
| Total  long-term liabilities                                                                              |       |       |       | 567                      |       | 895 |   |
| Total  liabilities                                                                                        |       |       |       | 18,389                   |       | 20,717 |   |
|                                                                                                      |       |       |       |                     |       |   |   |
| Commitments  and Contingencies (Note 7)                                                                   |       |       |       |                     |       |   |   |
| Shareholders’  Equity:                                                                               |       |       |       |                     |       |   |   |
| Preferred  Shares, EUR 0.04 par value per share;                                                          |       |       |       |                     |       |   |   |
| Authorized –  19,750,000 shares;                                                                     |       |       |       |                     |       |   |   |
| Outstanding –  0 shares;                                                                             |       |       |       | 0                        |       | 0 |   |
| Common  Shares, EUR 0.04 par value per share;                                                             |       |       |       |                     |       |   |   |
| Authorized –  43,750,000 shares;                                                                     |       |       |       |                     |       |   |   |
| Outstanding –  30,469,345 shares                                                                     |       |       |       | 1,219                    |       | 1,219 |   |
| Additional  paid-in capital                                                                               |       |       |       | 53,293                   |       | 53,293 |   |
| Accumulated  deficit                                                                                      |       |       |       | (51,556                  | )          | (53,603 | ) |
| Accumulated  other comprehensive loss                                                                     |       |       |       | (229                     | )          | (267 | ) |
| Total shareholders’  equity                                                                          |       |       |       | 2,727                    |       | 642 |   |
| Total  liabilities and shareholders’ equity                                                          |       |       |       | 21,116                   |       | 21,359 |   |

 

The accompanying notes are anintegral part of these Consolidated Financial Statements.

 

F-3

----

 

Triple P NV

**Consolidated Statements of Operations**

(in thousands, exceptshare and per share amounts)

 
| ** **                                                      | ** ** | ** ** | ** ** | **Year Ended December 31,** | ** ** |
|-----------------------------------------------------------------|------------|------------|------------|----------------------------------|------------|
| ** **                                                      | ** ** | **Notes**  | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                                                      | ** ** | ** ** | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** |
| Net revenues                                                    |       | 13         |       | 96,373                           |       | 80,371 |   | 74,265 |   |
| Cost of  revenues                                               |       |       |       | 79,438                           |       | 66,261 |   | 62,858 |   |
| Gross profit                                                    |       | 13         |       | 16,935                           |       | 14,110 |   | 11,407 |   |
|                                                            |       |       |       |                             |       |   |   |   |   |
| Sales and  marketing expense                                    |       |       |       | 9,777                            |       | 8,550 |   | 7,215 |   |
| General and  administrative expense                             |       |       |       | 5,660                            |       | 3,654 |   | 4,137 |   |
| Restructuring  charge                                           |       | 4          |       | 1,370                            |       | 1,281 |   | 1,750 |   |
| Total  operating expenses                                       |       |       |       | 16,807                           |       | 13,485 |   | 13,102 |   |
|                                                            |       |       |       |                             |       |   |   |   |   |
| Operating  income (loss)                                        |       |       |       | 128                              |       | 625 |   | (1,695 | ) |
|                                                            |       |       |       |                             |       |   |   |   |   |
| Interest  income                                                |       |       |       | —                           |       | 3 |   | 46 |   |
| Interest  expense                                               |       |       |       | (417                             | )          | (72 | ) | (41 | ) |
| Other  expense, net                                             |       |       |       | (231                             | )          | (114 | ) | (145 | ) |
| Total other  expense, net                                       |       |       |       | (648                             | )          | (183 | ) | (140 | ) |
|                                                            |       |       |       |                             |       |   |   |   |   |
| Income  (loss) before income taxes                              |       |       |       | (520                             | )          | 442 |   | (1,835 | ) |
|                                                            |       |       |       |                             |       |   |   |   |   |
| Loss from  income taxes                                         |       | 10         |       | —                           |       | — |   | (212 | ) |
|                                                            |       |       |       |                             |       |   |   |   |   |
| Net income  (loss)                                              |       |       |       | (520                             | )          | 442 |   | (2,047 | ) |
|                                                            |       |       |       |                             |       |   |   |   |   |
| Basic and  diluted net income (loss) per share:                 |       |       |       | (0.02                            | )          | 0.01 |   | (0.07 | ) |
|                                                            |       |       |       |                             |       |   |   |   |   |
| Number of  shares in computing per share amount (in thousands): |       |       |       |                             |       |   |   |   |   |
| Basic                                                           |       |       |       | 30,469                           |       | 30,469 |   | 30,469 |   |
| Diluted                                                         |       |       |       | 30,469                           |       | 30,479 |   | 30,469 |   |

 

The accompanying notes are anintegral part of these Consolidated Financial Statements.

 

F-4

----

 

Triple P NV

**Consolidated Statements ofShareholders’ Equity**

(in thousands of euros, except share amounts)

 
| ** **                               | ** ** | ** **        | ** ** | ** **  | ** ** | ** **      | ** ** | ** **        | ** ** | **Accumulated**        | ** ** | ** ** | ** ** |
|------------------------------------------|------------|-------------------|------------|-------------|------------|-----------------|------------|-------------------|------------|------------------------|------------|------------|------------|
| ** **                               | ** ** | ** **        | ** ** | ** **  | ** ** | **Additional**  | ** ** | ** **        | ** ** | **Other**              | ** ** | **Total**  | ** ** |
| ** **                               | ** ** | **Common Shares** | ** ** | **Paid-in** | ** ** | **Accumulated** | ** ** | **Comprehensive** | ** ** | **Shareholders’** | ** ** |
| ** **                               | ** ** | **Number**        | ** ** | **Amount**  | ** ** | **Capital**     | ** ** | **Deficit**       | ** ** | **Loss**               | ** ** | **Equity** | ** ** |
| Balance at 1-1-2002                      |       | 30,469,345        |       | 1,219       |       | 53,293          |       | (50,906           | )          | (114                   | )          | 3,492      |       |
|                                     |       |              |       |        |       |            |       |              |       |                   |       |       |       |
| Net loss                                 |       | —            |       | —      |       | —          |       | (520              | )          | —                 |       | (520       | )          |
| Translation  adjustment                  |       | —            |       | —      |       | —          |       | —            |       | 114                    |       | 114        |       |
| Comprehensive  income                    |       |              |       |        |       |            |       |              |       |                   |       | (406       | )          |
| Preferred  dividend                      |       | —            |       | —      |       | —          |       | (572              | )          | —                 |       | (572       | )          |
|                                     |       |              |       |        |       |            |       |              |       |                   |       |       |       |
| Balance at 31-12-2002                    |       | 30,469,345        |       | 1,219       |       | 53,293          |       | (51,998           | )          | —                 |       | 2,514      |       |
|                                     |       |              |       |        |       |            |       |              |       |                   |       |       |       |
| Net Income                               |       | —            |       | —      |       | —          |       | 442               |       | —                 |       | 442        |       |
| Minimum  pension liability, net of taxes |       | —            |       | —      |       | —          |       | —            |       | (229                   | )          | (229       | )          |
| Comprehensive  income                    |       |              |       |        |       |            |       |              |       |                   |       | 213        |       |
|                                     |       |              |       |        |       |            |       |              |       |                   |       |       |       |
| Balance at 31-12-2003                    |       | 30,469,345        |       | 1,219       |       | 53,293          |       | (51,556           | )          | (229                   | )          | 2,727      |       |
|                                     |       |              |       |        |       |            |       |              |       |                   |       |       |       |
| Net loss                                 |       |              |       |        |       |            |       | (2,047            | )          |                   |       | (2,047     | )          |
| Minimum  pension liability, net of taxes |       | —            |       | —      |       | —          |       | —            |       | (38                    | )          | (38        | )          |
| Comprehensive  income                    |       |              |       |        |       |            |       |              |       |                   |       | (2,085     | )          |
|                                     |       |              |       |        |       |            |       |              |       |                   |       |       |       |
| Balance at 31-12-2004                    |       | 30,469,345        |       | 1,219       |       | 53,293          |       | (53,603           | )          | (267                   | )          | 642        |       |

 

The accompanying notes are an integral part of theseConsolidated Financial Statements.

 

F-5

----

 

Triple P N.V.

### **Consolidated Statements of Cash Flows**

(in thousands)

 
| ** **                                                                                            | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------------------------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                                                            | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                                                                                            | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** |
| **Cash  flow from operating activities**                                                              |       |                             |       |   |   |   |   |
|                                                                                                  |       |                             |       |   |   |   |   |
| Net income  (loss) from continuing operations                                                         |       | (520                             | )          | 442 |   | (2,047 | ) |
|                                                                                                  |       |                             |       |   |   |   |   |
| Adjustments  to reconcile net income (loss) to net cash provided by (used in) continuing  operations: |       |                             |       |   |   |   |   |
| Depreciation  and amortization                                                                        |       | 1,022                            |       | 614 |   | 571 |   |
| Impairment  of fixed assets                                                                           |       | 1,019                            |       | — |   | — |   |
| Provision  for doubtful accounts                                                                      |       | 268                              |       | 247 |   | 324 |   |
| Restructuring  reserve                                                                                |       | 715                              |       | (510 | ) | 759 |   |
| Reserve for  losses of discontinued operations                                                        |       | (628                             | )          | — |   | — |   |
| Other  long-term liabilities                                                                          |       | 262                              |       | (324 | ) | 328 |   |
| Currency  translation adjustment                                                                      |       | 114                              |       | — |   | — |   |
|                                                                                                  |       |                             |       |   |   |   |   |
| Changes in  operating assets and liabilities from continuing operations:                              |       |                             |       |   |   |   |   |
| Accounts  receivable                                                                                  |       | 2,732                            |       | 1,862 |   | 157 |   |
| Inventories                                                                                           |       | 780                              |       | 1,881 |   | (693 | ) |
| Other  current assets                                                                                 |       | 1,012                            |       | 138 |   | (169 | ) |
| Accounts  payable                                                                                     |       | 810                              |       | (1,175 | ) | 635 |   |
| Accrued  liabilities                                                                                  |       | (1,480                           | )          | (231 | ) | 1,010 |   |
| Customer  deposits                                                                                    |       | (704                             | )          | (43 | ) | 532 |   |
| Deferred  revenue                                                                                     |       | (103                             | )          | (214 | ) | (733 | ) |
| ** **                                                                                            | ** ** | ** **                       | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net cash  provided by continuing operations                                                           |       | 5,299                            |       | 2,687 |   | 674 |   |
|                                                                                                  |       |                             |       |   |   |   |   |
| Changes in  operating assets and liabilities from discontinued operations:                            |       |                             |       |   |   |   |   |
|                                                                                                  |       |                             |       |   |   |   |   |
| Accounts  receivable                                                                                  |       | 597                              |       | — |   | — |   |
| Inventories                                                                                           |       | 155                              |       | — |   | — |   |
| Other  current assets                                                                                 |       | 288                              |       | — |   | — |   |
| Accounts  payable                                                                                     |       | (421                             | )          | — |   | — |   |
| Accrued  liabilities                                                                                  |       | (788                             | )          | — |   | — |   |
| Deferred  revenue                                                                                     |       | (434                             | )          | — |   | — |   |
|                                                                                                  |       |                             |       |   |   |   |   |
| Net cash  used in discontinued operations                                                             |       | (603                             | )          | — |   | — |   |

 

F-6

----

 
| ** **                                                                    | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                                    | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                                                                    | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** |
| **Cash  flow from investing activities**                                      |       |                             |       |   |   |   |   |
|                                                                          |       |                             |       |   |   |   |   |
| Property and  equipment purchased                                             |       | (1,427                           | )          | (289 | ) | (153 | ) |
| Deposits (1)                                                                  |       | —                           |       | (403 | ) | 450 |   |
|                                                                          |       |                             |       |   |   |   |   |
| Net cash  provided by (used in) investing activities of continuing operations |       | (1,427                           | )          | (692 | ) | 297 |   |
|                                                                          |       |                             |       |   |   |   |   |
| Net cash  used in investing activities of discontinued operations             |       | 165                              |       | — |   | — |   |
|                                                                          |       |                             |       |   |   |   |   |
| **Cash  flow from financing activities**                                      |       |                             |       |   |   |   |   |
|                                                                          |       |                             |       |   |   |   |   |
| Borrowings  under short-term credit facilities                                |       | 6,541                            |       | 1,665 |   | — |   |
| Repayments  under short-term credit facilities                                |       | (6,541                           | )          | (1,665 | ) | — |   |
| Paid lease  obligation                                                        |       | (485                             | )          | (470 | ) | (208 | ) |
| Preferred  stock dividend                                                     |       | (572                             | )          | — |   | — |   |
| ** **                                                                    | ** ** | ** **                       | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net cash  used in financing activities of continuing operations               |       | (1,057                           | )          | (470 | ) | (208 | ) |
|                                                                          |       |                             |       |   |   |   |   |
| (Increase)  decrease cash position of discontinued operations                 |       | 820                              |       | — |   | — |   |
|                                                                          |       |                             |       |   |   |   |   |
| Increase  (decrease) in cash and cash equivalents of continued operations     |       | 3,197                            |       | 1,525 |   | 763 |   |
|                                                                          |       |                             |       |   |   |   |   |
| Cash and  cash equivalents at beginning of year                               |       | 1,010                            |       | 4,207 |   | 5,732 |   |
| Cash and cash equivalents at  end of year                                     |       | 4,207                            |       | 5,732 |   | 6,495 |   |
|                                                                          |       |                             |       |   |   |   |   |
| **Supplemental cash flow information**                                        |       |                             |       |   |   |   |   |
| Cash paid  for interest                                                       |       | 417                              |       | 72 |   | 41 |   |

 

----

(1)  included in the balance sheet underrestricted cash.

 

The accompanying notes are anintegral part of these Consolidated Financial Statements.

 

F-7

----

 

Triple P N.V.

**Notes to the Consolidated FinancialStatements**

 

**1**

**Organization and operations**

 

Triple P N.V. is a provider of high-qualityInformation and Communication Technology (“ICT”) infrastructure enterprisesolutions to medium and large businesses and governmental agencies in TheNetherlands. These solutions include ICT-consultancy, ICT-infrastructuresystems delivery, project management and implementation services, andoperational ICT-infrastructure management and maintenance services. The Company’ssolutions are compatible with the established products of leading hardwaremanufacturers, including Hewlett Packard, IBM, Sun Microsystems, Citrix, Cisco,Mitel, Microsoft, Novell and Oracle.

 

The Company’s Systems business comprises of resellingsystem and network products. The Company’s Services business comprises ofinfrastructure management consulting including system and network integrationconsulting, project management and implementation services as well asoperational infrastructure management services and maintenance services. In thepublishing market, the Company’s Services business also includes standardsoftware implementation, customization and maintenance services.

 

**2**

**Basis of presentation and summary of significant accountingpolicies**

 

**Basis of Presentation**

The Consolidated Financial Statements are prepared inaccordance with accounting principles generally accepted in the United Statesof America (“U.S. GAAP”).

 

**Use of Estimates**

The preparation of Triple P’s Consolidated FinancialStatements in conformity with U.S. GAAP requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities on the balance sheet dates andthe reported amounts of revenues and expenses during the reported periods.Actual results could differ from those estimates.

 

**Foreign currency translation**

Assets and liabilities denominated in foreigncurrencies are translated into euros at the year-end exchange rate.Transactions in foreign currencies are translated at the exchange rate ineffect at the time of the transaction. The exchange results are recorded underother income and expense in the statement of operations.

 

The Company has no derivative instruments.

 

**Principles of Consolidation**

All significant intercompany profit, balances andtransactions have been eliminated in consolidation. The Consolidated FinancialStatements include the financial statements of Triple P N.V. and the followingsubsidiaries:

 
| **Name**                              | ** ** | **Legal Seat**            | ** ** | **Ownership %** |
|---------------------------------------|------------|---------------------------|------------|-----------------|
| *Active*                              |       |                      |       |            |
| Triple P Management B.V.              |       | Vianen - The Netherlands  |       | 100%            |
| Triple P Nederland B.V.               |       | Vianen - The Netherlands  |       | 100%            |
| Triple P eActivity B.V.               |       | Zeist - The Netherlands   |       | 100%            |
|                                  |       |                      |       |            |
| *Inactive*                            |       |                      |       |            |
| Triple P Services / B-Catel B.V.      |       | Vianen - The Netherlands  |       | 100%            |
| Telesystems Europe B.V.               |       | Vianen - The Netherlands  |       | 100%            |
| Triple P Healthcare B.V.              |       | Vianen - The Netherlands  |       | 100%            |
| Triple P Intellectual Properties B.V. |       | Vianen - The Netherlands  |       | 100%            |
| Triple P Lab Info Systems B.V.        |       | Vianen - The Netherlands  |       | 100%            |
| F.W. Salomons Holding B.V.            |       | Vianen - The Netherlands  |       | 100%            |
| Omega N.V./S.A.                       |       | Mechelen - Belgium        |       | 100%            |
| Mediasystemen B.V.                    |       | Haarlem - The Netherlands |       | 100%            |

 

As of July 1, 2004, Mediasystemen B.V. was aninactive legal entity of Triple P N.V., due to the transfer of substantiallyall of its assets and liabilities to Triple P Nederland B.V..

 

The Company has a minority interest of 41% in Es@sN.V./S.A., a Belgian ICT-company. The investment is accounted for

 

F-8

----

 

under the equity method of accounting.

 

The Company dissolved the Triple P USA Inc. subsidiaryin 2003. This liquidation had no material impact on the results of operationsin 2002 or 2003.

 

**Cash and cash equivalents**

Cash and cash equivalents consist primarily of highlyliquid investments, such as bank deposits, with insignificant interest raterisk and remaining maturities of three months or less at the date ofacquisition.

 

**Restricted cash**

All cash not directly accessible (legally restricted)is considered to be restricted cash. As of December 31, 2004, restrictedcash relates primarily to bank guarantees issued for lease commitments andrental contracts.

 

**Accounts receivable**

Accounts receivable are stated at face value, less anallowance for doubtful accounts. The Company provides an allowance for doubtfulaccounts based on management’s periodic review of accounts, including thedelinquency of account balances. Accounts are considered delinquent whenpayments had not been received within agreed upon terms and are written offwhen management determined that collection is not probable.

 

**Inventories**

Inventories are stated at the lower of cost (first-in,first-out method) or market value. Cost includes net prices paid for hardware(for resale and spare parts) and charges for freight and import duties.Allowances are made for slow moving, obsolete or unsalable inventory.

 

**Property and equipment**

Property and equipment is stated at cost lessaccumulated depreciation. Depreciation is calculated using the straight-line methodbased on the estimated useful lives of the related assets. The following tablepresents the assigned economic lives of Triple P’s property and equipment:

 
| Office  equipment | 2-10  years |
|-------------------|-------------|
| ERP-software      | 5  years    |

 

Maintenance and repairs are charged to expense asincurred. Major improvements which extend the useful life of the item arecapitalized and depreciated over the remaining useful life of the asset. Thecost and accumulated depreciation of property, plant and equipment retired orotherwise disposed of are removed from the related accounts, and any residualvalues are charged or credited to expense or income.

 

**Evaluation of long-lived assets**

The Company evaluates its long-lived assets, whichinclude property, plant and equipment, for impairment whenever events or changein circumstances indicate that the carrying value of assets may not berecoverable. Recoverability of these assets is measured by a comparison of thecarrying amount of the asset future undiscounted net cash flows expected to begenerated by the asset. If these assets are considered to be impaired, theimpairment to be recognized is measured by the amount by which the carryingamount of the assets exceed the fair value of the asset.

 

**Capital Leases**

The Company recognizes capital leases as assets andliabilities in the Balance Sheet at amounts equal at the inception of the leaseto the fair value of the leased property or, if lower, at the present value ofthe minimum lease payments. Lease payments are apportioned between the financecharge and the reduction of the outstanding liability. The finance charge isallocated to periods during the lease term so as to produce a constant periodicrate of interest on the remaining balance of the liability for each period.

 

A capital lease gives rise to amortization expense forthe asset (included in depreciation expense) as well as a finance expense(included in other income and expenses, net) for each accounting period. Thedepreciation policy for leased assets is consistent with that for depreciable assetsthat are owned.

 

**Revenue recognition**

Systems revenues consist of revenues from the sale ofICT-infrastructure systems of third party hardware and third party software.For arrangements where the Company does not install the systems, orinstallation is deemed to be inconsequential or perfunctory, revenues arerecognized upon delivery when evidence of an arrangement exists, title and riskof loss have been transferred for both the third party hardware and third partysoftware, amounts are fixed and determinable and collection is deemed probable.For arrangements where the Company installs the systems and installation is notdeemed to be inconsequential or perfunctory, revenue is deferred until allobligations are fulfilled and all other revenue recognition criteria are met.If the arrangement includes a customer acceptance provision, or if there isuncertainty about customer acceptance of products sold or services rendered,revenue is deferred until evidence of customer acceptance is received.

 

Services revenues consist of revenues from maintenanceand management service arrangements and consulting and implementation services.Revenues from maintenance and management service arrangements are recognizedratably over the term of the contract period once evidence of an arrangementexists, amounts are fixed and determinable and collection is deemedprobable.  Revenues from consulting andimplementation services are recognized on a time and materials basis asservices are being performed, when all other revenue recognition criteria aremet.

 

When elements such as the sale of systems, maintenanceand management service arrangements and consulting and

 

F-9

----

 

implementation services are contained in a singlearrangement, or in related arrangements with the same customer, the Companyallocates revenues to each element based on its relative fair value, providedthat such element meets the criteria for treatment as a separate unit ofaccounting. The price charged when an element is sold separately generallydetermines fair value. In the absence of fair value for undelivered elements,the arrangement is accounted for as a single unit of accounting, resulting indelay of revenue recognition for all elements until all systems and servicesare delivered and all other obligations are fulfilled.

 

Shipping and handling costs are included in cost ofsales.

 

Customer deposits represent cash received fromcustomers in advance of fulfilling customer purchase orders. Revenues relatedto such transactions are recognized when all revenue recognition criteria aremet and other obligations fulfilled. A provision for warranty costs is recordedupon revenue recognition when appropriate.

 

Deferred revenue primarily consists of revenuedeferred under maintenance and management contracts. The Company generallyinvoices its customers in advance and, as discussed above, recognizes revenueson a pro rata basis over the term of the contract.

 

**Stock Option Plan**

The Company applies Accounting Principles BoardOpinion (“APB”) 25, Accounting for Stock Issued to Employees, and relatedinterpretations in accounting for its stock option plans. SFAS No. 123, “Accountingfor Stock-Based Compensation,” amended by SFAS No. 148, “Accounting forStock-Based Compensation – Transition and Disclosure” allows companies to electto recognize the fair value of the stock options granted to employees as anexpense, or to account for stock option plans using the intrinsic value methodunder APB 25 and provide pro forma disclosure of the impact of the fair valuemethod on net income and earnings per share. Under the provisions of APB 25, nosignificant compensation expense was recorded for the Company’s stock-basedcompensation plans for the years ended December 31, 2002, 2003 and 2004.Had compensation cost been determined based upon the fair value at the grantdate for awards under the plan consistent with the methodology prescribed underSFAS No. 148, the Company’s net income (loss) and calculation for netincome (loss) per ordinary share would have been as follows (net of related taxeffects).

 
| ** **                                                                                  | ** ** | **Year Ended December 31,** | ** ** |
|---------------------------------------------------------------------------------------------|------------|----------------------------------|------------|
| **Net Income****(in thousands)**                                                            | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                                                                                  | ** ** | **EUR**                          | ** ** | **EUR** | ** ** | **EUR** | ** ** |
| As reported                                                                                 |       | (520                             | )          | 442 |   | (2,047 | ) |
| Deduct:  Total stock based compensation expense under the fair value method for all  awards |       | (144                             | )          | (217 | ) | (293 | ) |
| Pro Forma                                                                                   |       | (664                             | )          | 225 |   | (2,340 | ) |
| Basic and  diluted as reported                                                              |       | (0.02                            | )          | 0.01 |   | (0.07 | ) |
| Basic and  diluted Pro Forma                                                                |       | (0.02                            | )          | 0.01 |   | (0.08 | ) |

 

**Net income (loss) per share**

Basic net income (loss) per share is computed bydividing net income (loss) available to common stockholders by the weightedaverage common shares outstanding during the period. Diluted net income (loss)per share reflects the potential dilution that could occur if options issued underthe Company’s stock compensation plan were exercised, unless the exercise ofthe stock options would have an antidilutive effect. A summary of the basic anddiluted weighted average number of shares and net income (loss) is as follows:

 

(in thousands of euros, except per share amounts)

 
| ** **                                                                                   | ** ** | **Year Ended December 31,** | ** ** |
|----------------------------------------------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                                                   | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| Weighted  average common shares outstanding                                                  |       | 30,469                           |       | 30,469 |   | 30,469 |   |
| Dilutive  stock options(1)                                                                   |       | —                           |       | 10 |   | — |   |
| Diluted  number of shares                                                                    |       | 30,469                           |       | 30,479 |   | 30,469 |   |
|                                                                                         |       |                             |       |   |   |   |   |
| Net income  (loss)                                                                           |       | (520                             | )          | 442 |   | (2,047 | ) |
|                                                                                         |       |                             |       |   |   |   |   |
| Net income  (loss) per share available to common  stockholders – basic and diluted |       | (0.02                            | )          | 0.01 |   | (0.07 | ) |

 

----

(1)                                  Options topurchase  906,627, 1,203,387 and1,657,084 shares of common stock were outstanding as of December 31,

 

F-10

----

 

2002, 2003 and 2004, respectively. From these shares,only 10,000 were included in the computation of diluted earnings per share in2003 as the options’ exercise price was below the common shares’ average marketprice. As a result of the losses incurred by the Company in the years 2002 and2004, there is no difference between basic and diluted earnings per sharebecause the assumed conversion of stock options would have been anti-dilutive.

 

**Income Taxes**

The asset and liability method is used in accountingfor income taxes. Under this method, deferred tax assets and liabilities arerecognized for the tax effect of incurred net operating losses and for taxconsequences attributable to differences between the balance sheet carryingamounts of existing assets and liabilities and their respective tax bases. Ifit is more likely than not that the carrying amounts of deferred tax assetswill not be realized, a valuation allowance will be recorded to reduce thecarrying amounts of those assets.

 

Deferred tax assets and liabilities are measured usingenacted tax rates expected to apply to taxable income in the years in whichthose temporary differences are expected to be recovered or settled. The effecton deferred tax assets and liabilities of a change in tax rates is recognizedin the results of operations in the period that includes the enactment date.

 

**Fair Value of Financial Instruments**

The Company considers its cash and cash equivalents,restricted cash, accounts receivable, accounts payable and liabilities to beits only significant financial instruments and believes that the carryingamounts approximates fair value because of the short maturity of theseinstruments.

 

**Concentration of credit risk**

The Department of Justice in The Netherlands accountedfor approximately EUR 30.7 million or 32%, EUR 17.3 million or 22% and EUR 21.1million or 28.5% of consolidated net revenues in the years ended December 31,2002, 2003 and 2004, respectively. The Company has a master-agreement with theDepartment of Justice in The Netherlands based on which more than one hundredseparate entities order Information and Communication Technology Systems (“ICT-systems”).The master-agreement expired in September 2004 and has temporarily beencontinued in part until July 1, 2005. The Company is in negotiations withthe Department of Justice in The Netherlands for a partial renewal of thecontract. The original master-contract was split into six separate smallercontracts. Management expects that the Company may not be able to competesuccessfully on all contracts.

 

**Comprehensive income (loss)**

Comprehensive income (loss) consists of net income(loss) and other comprehensive income (loss), recorded directly in shareholders’equity. For the years ended December 31, 2002, 2003, and 2004,comprehensive income consists of net income (loss), foreign currencytranslation adjustments and adjustments for minimum pension liabilities, net oftax.

 

**Restructuring**

The Company applies the criteria defined in SFAS No. 146,“Accounting for Costs Associated with Exit or Disposal Activities” and SFAS No. 112,“Employers’ Accounting for Post Employment Benefits”, in order to determinewhen a liability for restructuring or exit costs should be recognized. Withrespect to employee termination costs, the Company applies SFAS No. 146(effective since January 1, 2003) in case of benefit arrangements that donot constitute an ongoing benefit arrangement. SFAS No. 112 is appliedwhen termination benefits are provided under an ongoing benefit arrangement.SFAS No. 146 establishes that a liability for costs associated with anexit or disposal activity shall be recognized and measured initially at itsfair value in the period in which the liability is incurred; that is, when adetailed plan exists, has been committed to by management and communicated toemployees. SFAS No. 112 establishes that a liability for terminationbenefits provided under an ongoing benefit arrangement is recognized when thelikelihood of future settlement is probable and can be reasonably estimated.

 

**Recent accounting pronouncements**

In December 2003, the Financial AccountingStandard Board (“FASB”) issued Interpretation Number 46 Revised, “Consolidationof Variable Interest Entities” (“FIN 46R”). An Interpretation of AccountingResearch Bulletin No. 51, which requires the consolidation by a businessenterprise of variable interest entities if the business enterprise is theprimary beneficiary. The requirements of FIN 46R are effective for fiscalperiods beginning after December 15, 2003. The adoption of FIN 46R did nothave a material impact on the company’s consolidated results of operations,financial condition or liquidity.

 

In March 2004, the Emerging Issues Task Force (“EITF”)reached a consensus on recognition and measurement guidance previouslydiscussed under EITF Issue No. 03-01, “ The Meaning ofOther-Than-Temporary Impairment and Its Application to Certain Investments” (“EITF03-01”). The consensus clarifies the meaning of other-than-temporaryimpairment and its application to investments in debt and equity securities, inparticular investments within the scope of FASB Statement No. 115, “Accountingfor Certain Investments in Debt and Equity Securities”, and investmentsaccounted for under the cost method. The adoption of this standard will nothave a material impact on the Company’s financial position, result ofoperations or cash flows.

 

In November 2004, the EITF reached a consensus onEITF Issue No. 03-13, “Applying the conditions in paragraph 42 ofSFAS No. 144, Accounting for the Impairment or Disposal of Long-LivedAssets in determining whether to report discontinued operations”. The consensusreached clarifies the approach for evaluating whether the criteria in paragraph42 of SFAS No.144 have been met for purposes of classifying the results ofoperations of a component of an entity that either has been disposed of or isclassified as held for sale as discontinued operations. The task force alsoreached a consensus that the guidance would be applied to a component of anenterprise that is either disposed of or classified as held for sale in fiscalperiods beginning after December 31, 2004. The adoption of this standarddid not have a material impact on the Company’s financial position, result ofoperations or cash flows.

 

In December 2004, the FASB issued a revision ofFASB Statement No. 123, Accounting for Stock-Based Compensation (“SFAS 

 

F-11

----

 

No. 123”). This statement supersedes APB Opinion No. 25,Accounting for Stock Issued to Employees, and its related implementationguidance. SFAS No. 123 addresses the accounting for share-based paymenttransactions in which a company receives employee services in exchange foreither equity instruments of the company or liabilities that are based on thefair value of the company’s equity instruments or that may be settled by theissuance of such equity instruments. SFAS No. 123 eliminates the abilityto account for share-based compensation transactions using the intrinsic methodand generally requires that such transactions be accounted for using a “fair-value”-basedmethod and recognized as expense in the statement of operations. SFAS No. 123is effective as of the beginning of the first interim or annual reportingperiod that begins after January 1, 2006. SFAS No. 123 is anticipatedto have a significant effect on our consolidated statement of operations. Seealso Note 9 and the paragraph on stock options.

 

SFAS No. 151 amends APB No. 43 such that itclarifies that  “abnormal” amounts ofidle facility expense, freight, handling costs etc. should be recognized ascurrent-period charges, while wording of APB No. 43 could have led to aninconsistent application of this requirement. The guidance is effective forinventory costs incurred during fiscal years beginning after June 15, 2005(January 1, 2006 for Triple P). Triple P believes that the adoption ofthis standard will have no impact on its consolidated results of operations.

 

SFAS No. 153 amends the guidance in APB Opinion No. 29(“APB 29”) regarding accounting for non-monetary transactions, and is effectivefor non-monetary asset exchanges occurring in fiscal periods beginning after June 15,2005 (January 1, 2006 for Triple P). APB 29 included an exception to thebasic measurement principle (fair value) for exchanges of similar productiveassets. This statement eliminates this exception, and replaces it with ageneral exception for exchange transactions that do not have commercialsubstance. Impact of this accounting pronouncement on Triple P’s futureconsolidated financial position depends on the nature and size of suchtransactions entered into by Triple P.

 

**3**

**Balance sheet data**

 

**3.1 Property and equipment consist ofthe following:**

(in thousands of euros)

 
| ** **                    | ** ** | **At December 31,** | ** ** |
|-------------------------------|------------|--------------------------|------------|
| ** **                    | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Office  equipment             |       | 493                      |       | 353 |   |
| ERP-software                  |       | 806                      |       | 528 |   |
| Total  property and equipment |       | 1,299                    |       | 881 |   |

 

**Changes in property andequipment are as follows:**

(in thousands of euros)

 
| ** **                         | ** ** | **Office**    | ** ** | **ERP**      | ** ** | ** ** | ** ** |
|------------------------------------|------------|---------------|------------|--------------|------------|------------|------------|
| ** **                         | ** ** | **Equipment** | ** ** | **Software** | ** ** | **Total**  | ** ** |
|                               |       |          |       |         |       |       |       |
| Book value January 1,  2003   |       | 540           |       | 1,084        |       | 1,624      |       |
|                               |       |          |       |         |       |       |       |
| Additions                          |       | 289           |       | —       |       | 289        |       |
| Depreciation                       |       | (336          | )          | (278         | )          | (614       | )          |
| Book value January 1,  2004   |       | 493           |       | 806          |       | 1,299      |       |
|                               |       |          |       |         |       |       |       |
| Additions                          |       | 153           |       | —       |       | 153        |       |
| Depreciation                       |       | (293          | )          | (278         | )          | (571       | )          |
| Book value December 31,  2004 |       | 353           |       | 528          |       | 881        |       |
|                               |       |          |       |         |       |       |       |
| Cost value                         |       | 941           |       | 1,385        |       | 2,326      |       |
| Accumulated  depreciation          |       | (588          | )          | (857         | )          | (1,445     | )          |
| Book value December 31,  2004 |       | 353           |       | 528          |       | 881        |       |

 

F-12

----

 

**3.2 Inventory consist of thefollowing:**

(in thousands of euros)

 
| ** **                         | ** ** | **At December 31,** | ** ** |
|------------------------------------|------------|--------------------------|------------|
| ** **                         | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Trade goods                        |       | 859                      |       | 1,334 |   |
| Spare parts  and other inventories |       | 307                      |       | 362 |   |
| Work in  progress                  |       | 89                       |       | 252 |   |
| Total inventories                  |       | 1,255                    |       | 1,948 |   |

 

**3.3 Prepaid expenses and othercurrent assets consists of the following:**

(in thousands of euros)

 
| ** **                                       | ** ** | **At December 31,** | ** ** |
|--------------------------------------------------|------------|--------------------------|------------|
| ** **                                       | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Prepaid  Pension (see Note 8)                    |       | 263                      |       | 253 |   |
| Prepaid  expenses                                |       | 232                      |       | 429 |   |
| Deferred tax  asset                              |       | 571                      |       | 359 |   |
| Other  receivables                               |       | 1,120                    |       | 1,276 |   |
| Total  prepaid expenses and other current assets |       | 2,186                    |       | 2,317 |   |

 

**3.4 Accrued liabilities consist ofthe following:**

(in thousands of euros)

 
| ** **                                  | ** ** | **At December 31,** | ** ** |
|---------------------------------------------|------------|--------------------------|------------|
| ** **                                  | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Accrued  payroll                            |       | 1,830                    |       | 1,607 |   |
| Accrued  taxes and social security premiums |       | 1,310                    |       | 2,193 |   |
| Accrued  claims                             |       | 720                      |       | 792 |   |
| Other  accrued liabilities                  |       | 1,576                    |       | 1,854 |   |
| Total  accrued liabilities                  |       | 5,436                    |       | 6,446 |   |

 

**3.5 Other long-term liabilities:**

(in thousands of euros)

 
| ** **                         | ** ** | **At December 31,** | ** ** |
|------------------------------------|------------|--------------------------|------------|
| ** **                         | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Deferred  gain on sale             |       | 23                       |       | 0 |   |
| Deferred  lease of building        |       | 0                        |       | 461 |   |
| Long-term  loan                    |       | 120                      |       | — |   |
| Total other  long-term liabilities |       | 143                      |       | 461 |   |

 

In 1994, the Company sold a building in a saleleaseback transaction. The deferred gain represents the difference between thesale price as agreed upon by the Company with a third party and the acquisitionprice of the building. The deferred gain is being amortized over thecontractual lease term of the building (10 years). The lease contract wasrenewed for a new period of 10 years, starting July 1, 2004. Payment onthe contract is not required in the first year. The resulting cost savingamounting to EUR 461,000 at year-end will be amortized over the remaining termof the lease contract.

 

The Company entered into a loan agreement withNationale Nederlanden N.V. Repayment of the loan is in three annualinstallments ending on January 1, 2005. Interest on the loan accrues at4%. The short-term portion of the loan is presented under the current liabilities.

 

**4**

##### **Restructuring**

#####  

In 2002, restructuring and impairment charges wererecorded in accordance with EITF (Emerging Issues Task Force) Issue 94-3,“Liability Recognition for Certain Employee Termination Benefits and OtherCosts to Exit an Activity (including Certain Costs Incurred in aRestructuring),” SFAS 144, “Accounting for the Impairment or Disposal ofLong-Lived Assets” and SFAS 112, “Employers’ Accounting for PostemploymentBenefits.”

 

F-13

----

 

In 2003, the Company applied SFAS 146, “Accounting forCosts Associated with Exit or Disposal Activities” for restructuring chargesand SFAS 112, “Employers’ Accounting for Postemployment Benefits.” SFAS 146supersedes EITF Issue 94-3 for plans approved after December 31,2002.

 

In 2004, the Company applied SFAS 146, “Accounting forCosts Associated with Exit or Disposal Activities” for restructuring charges.

 

**2002 restructuring**

The Management Board, with the approval of theSupervisory Board, further streamlined and restructured the Company in the lastquarter of 2002. Legally, financially and organizationally, the Company’s threeformer divisions were integrated into a single organization. As a result ofthis restructuring, the Company incurred a restructuring charge of EUR1,370,000 for the impairment of certain unused assets, the termination ofemployee contracts and permanently vacated leasehold facilities. As a result ofthese measures, the Company’s annual fixed costs decreased by about EUR1,500,000 commencing in the 2003 fiscal year. A discussion of the components ofthe 2002 restructuring charge follows.

 

*Impairment of certain assets*

The Company’s three former divisions have beenintegrated into a single organization with one software system. As a result theCompany has written off certain separately identifiable elements of the ERPsystem that will no longer be used. Total losses incurred in 2002 in connectionwith the write off of assets as a direct result of the restructuring were EUR655,000.

 

*Employee contract termination*

In connection with the 2002 restructuring, the Companydecided to terminate 29 employee contracts. The total amount provided for andcharged to expense in 2002 with respect to this reduction in workforce forcewas EUR 550,000 which is included in the restructuring reserve at December 31,2002. Payments related to employee contract termination were EUR 550,000 in2003.

 

*Permanently vacated leasehold facilities*

As a result of the reduction in workforce in December 2002,the Company permanently vacated certain office space in its main building.Accordingly, management provided for the associated remaining lease obligationsof EUR 165,000, which is net of expected sub leases. Payment relating topermanently vacated leasehold facilities were EUR 165,000 in 2003.

 

**2003 restructuring**

During the second quarter of 2003, the Companyimplemented additional cost reduction measures in response to lower thanexpected levels of net revenues in the first half of 2003. In the secondquarter of 2003 the Company terminated the employment of 43 of its 373employees and, as a result, recorded a EUR 1,281,000 restructuring expense ofwhich EUR 1,075,000 has been paid in 2003. As a result of these additionalmeasures, the Company’s annual expenses are expected to decrease byapproximately EUR 2,500,000 which is expected to be fully reflected inoperating results commencing in the second quarter of 2004. The implementationof the second quarter 2003 restructuring was mainly completed at year end 2003.The Company made additional payments of approximately EUR 205,000 in the firsthalf of 2004 relating to this restructuring plan.

 

**2004 restructuring**

In the third quarter of 2004, the Company was forcedto restructure its business due to continuing unfavorable market conditions andin order to start a strategy which will increase the focus on new business withhigher added value. The termination of 75 employee contracts was approved bymanagement. As a result, the Company incurred a restructuring charge of EUR 1,750,000,of which EUR 785,000 was paid in 2004. Management expects to make additionalpayments of approximately EUR 964,000 in 2005 related to this restructuringplan.

 

Under Dutch labor law, a period of notice has to beobserved before the employee contract can actually be terminated. The period ofnotice correlates to the number of years of employment with the Company. Forthis reason, 52 contracts have not yet been terminated as of December 31,2004, although the employees are no longer active with the Company. Thedecrease in the number of (full time) employees as a result of therestructuring will therefore be effected in 2005.

 

As a result of these additional measures, the Company’sannual expenses are expected to decrease by approximately EUR 3.2 million whichis expected to be fully reflected in operating results commencing in the secondquarter of 2005.

 

**5**

**Discontinued operations and liquidation of U.S. subsidiary**

 

**Discontinued operations**

In December 2001, the Company decided todiscontinue operations of its Belgian subsidiary, Triple P Belgium N.V./SA. Asa result of this decision, the Company no longer serves any customer in theBelgian healthcare market. The Company provided for the estimated loss ondisposal of the discontinued Belgian operations an amount of EUR 628,000representing EUR 578,000 net asset value of the Belgian subsidiary and EUR50,000 estimated disposal expense. On February 11, 2002, the Company soldits Belgian subsidiary to the Belgian management. The actual loss on disposalin the first quarter of 2002 did not differ from the amount provided for in2001. As of December 31, 2002, there were no remaining assets orliabilities for discontinued operations.

 

**Liquidation of U.S. subsidiary**

Also during 2001, the Company decided to stopfinancing its U.S. subsidiary, Triple P USA Inc. In July 2002, the Companyceased operations and began the process to legally dissolve the subsidiarywhich has been finalized in 2003. This liquidation had no material impact onthe results of operations in 2002 or 2003.

 

F-14

----

 

**6**

**Borrowing arrangements**

 

**Short-term borrowings**

The Company has a euro denominated revolving creditfacility agreement with IFN Finance B.V. (ABN-AMRO) whereby the Company mayborrow up to 60% of eligible accounts receivable to a maximum of EUR 6 millionless bank guarantees issued (see note 7). Borrowings under this facility aresecured by the Company’s accounts receivable. Interest on such borrowingsaccrues at the European Central Bank’s discount rate plus 1.5% with a minimumof 4.25% and is payable monthly. In addition, the Company pays a basic fee of0.04% of total net revenues including VAT. This credit agreement, which tookeffect May 18, 2000, was renewed in May 2001 for a two year periodwith an automatic renewal for an additional two year period. The current periodends in May 2005. The agreement may be terminated at the end of eachperiod by either party upon expiration of a 90-day notice period.

 

As of March 1, 2005 the Company reached anagreement with IFN Finance B.V. on the extension for a two-year period. As longas the Company is not using the credit facility, the basic fee will decrease to0.035% of total net revenues including VAT with a minimum of EUR 25,000. If theCompany is borrowing under the available facility, the basic fee will increaseto 0.04%. As of December 31, 2003 and 2004, no amounts were outstandingunder this facility with IFN Finance B.V.

 

**7**

**Commitments and contingencies**

 

**Capital leases**

The Company and its subsidiaries leased ERP-softwareincluding implementation expenses under a capital lease with a lease term ofthree years that expired in 2004. At the end of the contract the Company boughtthe related assets. Interest on the capital leases accrued between 5.8% and7.7%.

 

**Analysis of assets under capital lease**

(inthousands of euros)

 
| ** **                | ** ** | **At December 31,** | ** ** |
|---------------------------|------------|--------------------------|------------|
| ** **                | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Property at  cost         |       | 1,497                    |       | 1,497 |   |
| Accumulated  depreciation |       | (969                     | )          | (1,167 | ) |
| Net book  value           |       | 528                      |       | 330 |   |

 

**Future minimum lease payments forthe above capital leases**

(in thousands of euros)

 
| ** **                            | ** ** | **At December 31,** | ** ** |
|---------------------------------------|------------|--------------------------|------------|
| ** **                            | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| 2004                                  |       | 214                      |       | — |   |
| 2005                                  |       | —                   |       | — |   |
| Total  minimum lease obligations      |       | 214                      |       | — |   |
|                                  |       |                     |       |   |   |
| Interest                              |       | (6                       | )          | — |   |
| Present  value of minimum obligations |       | 208                      |       | — |   |
|                                  |       |                     |       |   |   |
| Capital  lease obligations            |       | 208                      |       | — |   |
| Non-current                           |       | —                   |       | — |   |
| Total                                 |       | 208                      |       | — |   |

 

**Operating leases**

The Company and its subsidiaries lease their currentfacilities and automobiles under various non-cancelable operating leases thatexpire at various dates through the year 2014. A portion of the leaseholdfacilities are subleased. Operating leases are charged to expense on astraight-line basis.

 

The total gross lease expenses for the years ended December 31,2002, 2003 and 2004 was approximately EUR 4,365,000, EUR 3,962,000 and EUR3,749,000, respectively. Total income from sub-leases for the years ended December 31,2002, 2003 and 2004 were approximately EUR 373,000, EUR 506,000 and EUR 475,000respectively. Total net lease expenses for the years ended December 31, 2002,2003 and 2004 were approximately EUR 3,993,000, EUR 3,456,000 and EUR3,274,000.

 

F-15

----

 

**Future minimumannual rental payments under non-cancelable operating leases as of December 31,2004**

(in thousands of euros):

 
| ** ** | ** ** | **Gross** | ** ** | **Sub-leased** | ** ** | **Net** | ** ** |
|------------|------------|-----------|------------|----------------|------------|---------|------------|
| 2005       |       | 2,759     |       | 662            |       | 2,097   |       |
| 2006       |       | 2,227     |       | 508            |       | 1,719   |       |
| 2007       |       | 1,582     |       | 232            |       | 1,350   |       |
| 2008       |       | 967       |       | —         |       | 967     |       |
| 2009       |       | 935       |       | —         |       | 935     |       |
| Thereafter |       | 4,207     |       | —         |       | 4,207   |       |
|       |       | 12,677    |       | 1,402          |       | 11,275  |       |

 

**Bank guarantees**

The bank guarantees provided by the Company’s bank onbehalf of the Company and its subsidiaries to third parties amount to EUR473,000 and relate to bank guarantees issued for lease commitments and rentalcontracts.

 

**Bank guarantees and its expiration dates**

(in thousands ofeuros):

 
| ** **       | ** ** | **At December 31, 2003** | ** ** |
|------------------|------------|-------------------------------|------------|
| ** **       | ** ** | **Total**                     | ** ** | **<1 year** | ** ** | **1-3 years** | ** ** | **3-5 years** | ** ** | **>5 years** | ** ** |
|             |       |                          |       |   |   |   |   |   |   |   |   |
| Bank  guarantees |       | 473                           |       | 298 |   | 175 |   | — |   | — |   |

 

In connection with these bank guarantees amounting toEUR 473,000, the Company holds restricted cash of an amount of EUR 12,000 atthe bank. The remaining amount of EUR 461,000 is deducted from the maximumborrowings under the Company’s credit facilities at the bank (see note 6).

 

**Litigation**

The Company is engaged as plaintiff or defendant inseveral lawsuits in The Netherlands and Belgium originating before 2002. Theselawsuits relate primarily to disputed contracts and a Belgian income tax claim.Although the Company is vigorously defending against these claims, it hasestablished reserves as of December 31, 2004 to an amount of approximatelyEUR 792,000 relating to specific lawsuits, which represent estimates of itsprobable liabilities with respect to these specific claims. As this litigationmay take several years to complete, future events could require management tomake significant adjustments for revisions to these estimates.

 

**8**

**Employee benefit plans**

 

The Company hasdefined benefit pension plans and defined contribution pension plans.

 

**Defined Benefit Plans**

Under the Company’s plans, employee benefits are basedon length of service and final yearly pay reduced by government providedretirement benefits. The weighted average discount rate used in determining theactuarial present value of projected benefit obligations was 5.25%, 5.00% and4.50% for 2002, 2003 and 2004, respectively. The assumed long-term rate ofreturn on assets was 5% for 2002 and 2003 and 4.5% for 2004. The estimatedfuture salary increase was on average 3% for 2002, 2003 and 2004.  The pension obligations are determined at measurementdate of the plans. The measurement date is December 31.

 

The Company has no risk relating to the return on planassets as this risk is transferred to a pension insurance company (third party)that guarantees return on plan assets.

 

**Funded status of the Company’s defined benefit plans is asfollows:**

(in thousands ofeuros)

 
| ** **                                                   | ** ** | **At December 31,** | ** ** |
|--------------------------------------------------------------|------------|--------------------------|------------|
| ** **                                                   | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Vested  benefit obligations                                  |       | 4,504                    |       | 5,080 |   |
| Non-vested  benefit obligations                              |       | —                   |       | — |   |
| Accumulated  benefit obligations                             |       | 4,504                    |       | 5,080 |   |
|                                                         |       |                     |       |   |   |
| Projected  benefit obligations for services rendered to date |       | 4,634                    |       | 5,200 |   |
| Less: Plan  assets at fair value, primarily debt-securities  |       | 4,343                    |       | 4,899 |   |
| Projected  benefit obligations in excess of plan assets      |       | 291                      |       | 301 |   |
| Unrecognized  transition loss                                |       | (67                      | )          | (45 | ) |
| Unrecognized  actuarial gain (loss)                          |       | (487                     | )          | (509 | ) |
| Accrued  (prepaid) pension cost                              |       | (263                     | )          | (253 | ) |

 

F-16

----

 

SFAS 87 provides that a minimum liability should berecorded as the accumulated benefit obligations exceed plan assets in case of aprepaid pension cost.

 

**Additional minimum liability of theCompany’s defined benefit plans is as follows:**

(in thousands of euros)

 
| ** **                                                  | ** ** | **At December 31,** | ** ** |
|-------------------------------------------------------------|------------|--------------------------|------------|
| ** **                                                  | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Accumulated  benefit obligations                            |       | 4,504                    |       | 5,080 |   |
| Less: Plan  assets at fair value, primarily debt-securities |       | 4,343                    |       | 4,899 |   |
| Accumulated  benefit obligations in excess of plan assets   |       | 161                      |       | 181 |   |
|                                                        |       |                     |       |   |   |
| Minimum  liability                                          |       | 161                      |       | 181 |   |
| Prepaid  pension cost                                       |       | 263                      |       | 253 |   |
| Additional  minimum liability                               |       | 424                      |       | 434 |   |
|                                                        |       |                     |       |   |   |
| Additional  minimum liability                               |       | 424                      |       | 434 |   |
| Intangible  asset                                           |       | (67                      | )          | (45 | ) |
| Charge to  other comprehensive income before income taxes   |       | 357                      |       | 389 |   |
| Income tax  benefit                                         |       | (128                     | )          | (122 | ) |
| Charge to  other comprehensive income after income taxes    |       | 229                      |       | 267 |   |

 

**Net pension plan costs are asfollows:**

(in thousands of euros) 

 
| ** **                                      | ** ** | **At December 31,** | ** ** |
|-------------------------------------------------|------------|--------------------------|------------|
| ** **                                      | ** ** | **2002**                 | ** ** | **2003** | ** ** | **2004** | ** ** |
| Net service  cost                               |       | 40                       |       | 50 |   | 57 |   |
| Interest  cost on projected benefit obligations |       | 201                      |       | 218 |   | 234 |   |
| Expected  return on plan assets                 |       | (182                     | )          | (197 | ) | (219 | ) |
| Other, net                                      |       | 9                        |       | 16 |   | 18 |   |
| Net pension  cost                               |       | 68                       |       | 87 |   | 90 |   |

 

**Changes in projected benefit obligations are as follows:**

(in thousands ofeuros)

 
| ** **                                          | ** ** | **At December 31,** | ** ** |
|-----------------------------------------------------|------------|--------------------------|------------|
| ** **                                          | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Projected  benefit obligations at beginning of year |       | 4,064                    |       | 4,634 |   |
| Service cost                                        |       | 85                       |       | 86 |   |
| Interest  cost                                      |       | 218                      |       | 234 |   |
| Actuarial  losses                                   |       | 346                      |       | 402 |   |
| Benefits  paid                                      |       | (79                      | )          | (111 | ) |
| Curtailment  (1)                                    |       | —                   |       | (45 | ) |
| Projected  benefit obligations at end of year       |       | 4,634                    |       | 5,200 |   |

 

----

(1)  A number of employees left the Companyas a result of the restructuring measures. This resulted in a reduction of theestimated remaining future years of service. Based on FAS 87, Triple Paccounted for this as a curtailment.

 

F-17

----

 

## **Changes in plan assets are asfollows:**

(in thousands of euros)

 
| ** **                                        | ** ** | **At December 31,** | ** ** |
|---------------------------------------------------|------------|--------------------------|------------|
| ** **                                        | ** ** | **2003**                 | ** ** | **2004** | ** ** |
| Market value  of plan assets at beginning of year |       | 3,813                    |       | 4,343 |   |
| Actual  return on plan assets                     |       | (35                      | )          | 552 |   |
| Employer  contributions                           |       | 609                      |       | 86 |   |
| Plan  participants contributions                  |       | 35                       |       | 29 |   |
| Benefits  paid                                    |       | (79                      | )          | (111 | ) |
| Plan assets  at end of year                       |       | 4,343                    |       | 4,899 |   |

 

**Expected contributions in 2005**

The expected contributions to the pension plan in 2005are estimated as the contributions to the plan in 2004 increased with 2.00%. Asa result, expected contributions and estimated future benefit payments are asfollows:

 

**Expected contributions**

(in thousands of euros)

 
| Employer  |   | 88  |   |
|-----------|--------|-----|--------|
| Employees |   | 30  |   |
| Total     |   | 118 |   |

 

 

**Estimated future benefit payments**Thefollowing benefit payments are expected to be paid:

(in thousands of euros)

 
| ** **     | ** ** | **Pension**  | ** ** |
|----------------|------------|--------------|------------|
| ** **     | ** ** | **Benefits** | ** ** |
| Year 2005      |       | 123          |       |
| Year 2006      |       | 124          |       |
| Year 2007      |       | 139          |       |
| Year 2008      |       | 173          |       |
| Year 2009      |       | 214          |       |
| Year 2010-2014 |       | 1,239        |       |

 

**Defined contribution plans**

Under the Company’s defined contribution plans, theemployers contribution is based on the age of employees and final yearly payreduced by government provided retirement benefits (gross pension salary). Theemployers contribution varies between 5.5% and 9.0% of gross pension salaries,increasing with the age of employees.

 

Under this plan the Company paid EUR 658,000, EUR675,000 and EUR 702,000 in 2002, 2003 and 2004, respectively.

 

**9**

**Stock option plans**

 

The Company has reserved an aggregate of 2,500,000common shares for issuance under its 1996 Stock Option Plan for employees (the “EmployeePlan”). The Employee Plan provides for the grant of options to employees(including officers) of the Company and its affiliates. The Employee Planprovides that the exercise price of options granted under the Plan shall be100% of the average fair market value of the common shares during a period offive trading days prior to the date of grant plus 0%, 10%, 20% or 30% at theoptionee’s choice. This choice is granted to the employee because of the taxtreatment for stock options (i.e. lower tax rates upon exercise of the averagefair market value plus 30% compared to average fair market value plus 0%). Theexercise price is determined at the date of grant. All options under the planare immediately exercisable. The maximum term of an option granted under theEmployee Plan is five years from the date of grant. Resale to third parties ofshares purchased through exercise of an option granted under the Employee Planis restricted. Only 25% of such shares may be sold in the year following thedate the option was granted and in each of the three years following the firstanniversary of the date of grant the optionee gains the right to sell anadditional 25% of the shares covered by the option. In the event of terminationof an optionee’s employment or consulting arrangement, all options that havenot been exercised terminate. The Employee Plan will terminate in September 2005.

 

The Company has reserved 200,000 common shares forissuance under its 1995 Director Option Plan (the “Director Plan”). TheDirector Plan provides for automatic grants of stock options to SupervisoryDirectors of the Company. Each person who becomes a Supervisory Director after September 1995,other than individuals who immediately prior thereto served as a ChiefExecutive Officer of the Company automatically are granted an option topurchase 5,000 common shares of the Company (a

 

F-18

----

 

“First Option”). In addition, each Supervisory Directoris automatically granted an option to purchase 10,000 common shares (a “SubsequentOption”) on January 1 of each year, provided that he or she has served onthe Board for at least three months as of that date. All options granted underthe Director Plan are exercisable immediately. Under the terms of the DirectorPlan, the exercise price of options granted to Supervisory Directors is 100% ofthe average fair market value of the common shares on the date of grant. Sharespurchased upon exercise of a Subsequent Option are subject to a repurchaseright. The Company may repurchase at the exercise price of the SubsequentOption any shares purchased by the optionee pursuant to the Subsequent Optionif the optionee ceases to be a Supervisory Director of the Company. Thisrepurchase right lapses as to one twelfth of the shares subject to thesubsequent Option for each month that passes after the date of grant of theSubsequent Option so long as the optionee remains a Director. All optionsgranted under the Director Plan have a term of five years. In the event oftermination of an optionee’s status as a Director, the optionee may exercisehis or her remaining options within 90 days of the termination date (or 12months in the case of termination as a result of death or disability), but inno event later than the expiration date of any such option. The Director Planwill terminate in September 2005.

 

At December 31, 2004, options to purchase1,657,084 common shares are outstanding, comprising 1,607,084 options under theEmployee Plan and 50,000 options under the Director Plan.

 

**Option activity under both Plans is as follows:**

 
| ** **                            | ** ** | **Number of Shares** | ** ** | **Outstanding Options  Weighted Average  Exercise Price U.S. $** | ** ** |
|---------------------------------------|------------|----------------------|------------|------------------------------------------------------------------|------------|
| Balance as  of January 1, 2002   |       | 976,725              |       | 1.87                                                             |       |
| Exercised                             |       | —               |       | —                                                           |       |
| Forfeited                             |       | (416,798             | )          | 1.77                                                             |       |
| Expired                               |       | (216,325             | )          | 2.11                                                             |       |
| Granted                               |       | 563,025              |       | 0.82                                                             |       |
| Balance as  of December 31, 2002 |       | 906,627              |       | 1.21                                                             |       |
| Exercised                             |       | —               |       | —                                                           |       |
| Forfeited                             |       | (233,240             | )          | 1.36                                                             |       |
| Expired                               |       | —               |       | —                                                           |       |
| Granted                               |       | 530,000              |       | 0.81                                                             |       |
| Balance as  of December 31, 2003 |       | 1,203,387            |       | 1.01                                                             |       |
| Exercised                             |       | —               |       | —                                                           |       |
| Forfeited                             |       | (988,583             | )          | 1.21                                                             |       |
| Expired                               |       | (105,720             | )          | 2.25                                                             |       |
| Granted                               |       | 1,548,000            |       | 1.26                                                             |       |
| Balance as  of December 31, 2004 |       | 1,657,084            |       | 1.14                                                             |       |

 
| **Range of**** ****Exercise  Prices U.S. $** | ** ** | **Number  Outstanding at  December 31, 2004** | ** ** | **Weighted  Average  Remaining Life** | ** ** | **Weighted  Exercise  Price U.S. $** | ** ** |
|---------------------------------------------------|------------|----------------------------------------------------|------------|---------------------------------------|------------|--------------------------------------|------------|
| 0.35       - 0.99        |       | 875,250                                            |       | 3.90                                  |       | 0.75                                 |       |
| 1.00       - 1.49        |       | 142,414                                            |       | 1.91                                  |       | 1.12                                 |       |
| 1.50       - 1.99        |       | 579,420                                            |       | 3.79                                  |       | 1.60                                 |       |
| 2.00       - 2.32        |       | 60,000                                             |       | 0.13                                  |       | 2.31                                 |       |
| 0.27       - 2.32        |       | 1,657,084                                          |       | 3.55                                  |       | 1.14                                 |       |

 

All options granted under the plans are exercisableimmediately.

 

As permitted under SFAS 123, the Company has electedto follow APB Opinion 25 and related interpretations in accounting forstock-based awards to employees. Under APB 25, the Company has recorded nocompensation expense because at the grant date of the option the fair value ofthe underlying shares is equal to or less than the exercise price. Pro formainformation regarding net income and net income per share is required by SFAS123 for awards granted after June 30, 1995, as if the Company hadaccounted for its stock-based awards to employees under the fair value methodof SFAS 123. The Company’s net income and net income per share would havedecreased to the following pro forma amounts if compensation cost for stockoptions granted under the Employee Plan had been recorded based on the fairvalue method at the grant dates.

 

F-19

----

 

## **Net Income**

(in thousands of euros)

 
| ** **                                                                                  | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** |
|---------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| ** **                                                                                  | ** ** | **EUR**  | ** ** | **EUR**  | ** ** | **EUR**  | ** ** |
| As reported                                                                                 |       | (520     | )          | 442      |       | (2,047   | )          |
| Deduct:  Total stock based compensation expense under the fair value method for all  awards |       | (144     | )          | (217     | )          | (293     | )          |
| Pro Forma                                                                                   |       | (664     | )          | 225      |       | (2,340   | )          |

 

**Net income per share**

 
| ** **                             | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** |
|----------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| ** **                             | ** ** | **EUR**  | ** ** | **EUR**  | ** ** | **EUR**  | ** ** |
| Basic and  diluted(1) as reported |       | (0.02    | )          | 0.01     |       | (0.07    | )          |
| Basic and  diluted(1) Pro Forma   |       | (0.02    | )          | 0.01     |       | (0.08    | )          |

 

----

(1)                                  Optionsto purchase 906,627,  1,203,387 and1,657,084 shares of common stock were outstanding as of December 31, 2002,2003 and 2004 respectively. From these shares, only 10,000 were included in thecomputation of diluted earnings per share in 2003 as the options’ exerciseprice was below the common shares’ average market price. As a result of the lossesincurred by the Company in the years 2002 and 2004, there is no differencebetween basic and diluted earnings per share because the assumed conversion ofstock options would have been anti-dilutive.

 

The fair value of the Company’s stock option awards toemployees was estimated using the Black-Scholes option-pricing model assumingno dividends and the following weighted-average assumptions:

 
| ** **                            | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** |
|---------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Expected  life (in years)             |       | 4.03     |       | 4.25     |       | 4.25     |       |
| Expected  stock price volatility rate |       | 77       | %          | 93       | %          | 101      | %          |
| Risk-free  interest rate              |       | 4.50     | %          | 3.26     | %          | 3.11     | %          |

 

For options granted in the twelve months ended December 31,2004 with an exercise price greater than the market price of the shares at thegrant date, the weighted average exercise price and fair value at the grantdate were estimated at U.S.$ 1.25 and U.S. $ 0.55, respectively. In thetwelve months ended December 31, 2004, no options have been granted withan exercise price less than the market price of the shares at the grant date.

 

**10**

**Income Taxes**

 

**The effective tax rate is as follows:**

(in thousands ofeuros)

 
| ** **                                        | ** ** | **At December 31,** | ** ** |
|---------------------------------------------------|------------|--------------------------|------------|
| ** **                                        | ** ** | **2002**                 | ** ** | **2003** | ** ** | **2004** | ** ** |
| Pretax  income (loss)                             |       | (520                     | )          | 442 |   | (2,047 | ) |
| Statutory  tax rate                               |       | 34.5                     | %          | 34.5 | % | 34.5 | % |
| Expected tax  expense (benefit) at statutory rate |       | (179                     | )          | 152 |   | (706 | ) |
| Tax benefit  on liquidation of Triple P USA       |       | —                   |       | (380 | ) | — |   |
| Change in  valuation allowance                    |       | 179                      |       | 228 |   | 918 |   |
| Tax expense                                       |       | —                   |       | — |   | 212 |   |
| Effective  tax rate                               |       | 0                        | %          | 0 | % | n.a. |   |

 

The domestic statutory tax rate in The Netherlands is34.5 %. At the end of 2004, the Dutch Government has enacted a tax ratereduction for the coming years. As a result, the statutory tax rate will bereduced in steps to 30% in the year 2007. For the year 2005, the applicable taxrate will be 31.5%. The reduction in the statutory tax rate has been includedin the tax effect of net operating loss carry forward and the change invaluation allowance and amounted EUR 10,000 in 2004.

 

**Deferred tax assets are as follows:**

(in thousands of euros)

 
| ** **                                      | ** ** | **At December 31,** | ** ** |
|-------------------------------------------------|------------|--------------------------|------------|
| ** **                                      | ** ** | **2002**                 | ** ** | **2003** | ** ** | **2004** | ** ** |
| Tax effect  of net operating loss carry forward |       | 8,370                    |       | 8,730 |   | 8,549 |   |
| Other net  deferred tax assets                  |       | 1                        |       | 120 |   | 122 |   |
| Less:  Valuation allowance                      |       | (7,917                   | )          | (8,279 | ) | (8,312 | ) |
| Net deferred  tax assets                        |       | 454                      |       | 571 |   | 359 |   |

 

The provision for income taxes is calculated based onthe statutory tax rate of the applicable fiscal entities for the years ended December 31,2002, 2003 and 2004. These calculations consider the relevant local regulationsfor non-tax deductible items.

 

The operating loss carry forwards available at December 31,2004 relate to entities in The Netherlands. The statutory tax rate in

 

F-20

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the year 2004 for The Netherlands is 34.5%. For theyear 2005, the applicable tax rate will be 31.5%. The reduction in thestatutory tax rate has been included in the effect of net operating loss carryforwards. In 2002 and 2004, the difference between the statutory rate and theeffective tax rate was caused by the establishment of additional tax loss carryforwards. In 2003, the differences between the statutory rate and the effectiverate was primarily due to fiscal losses in connection with the liquidation ofthe subsidiary Triple P USA Inc.

 

Deferred tax assets and liabilities determined inaccordance with FASB Statement No. 109, Accounting for Income Taxes,reflect the impact of temporary differences between amounts of assets andliabilities for tax and financial reporting purposes.  Tax laws measure such amounts and theexpected future tax consequences of net operating loss carry forwards.  Temporary differences and net operating losscarry forwards, which give rise to deferred tax assets and liabilitiesrecognized in the Balance Sheet are as shown above.

 

The utilization of the Company’s tax loss carryforwards is subject to various local conditions and regulations including, inmany cases, the requirement that the entity utilizing the tax loss carryforwards be the entity that incurred the tax losses. The net operating losscarry forwards have no expiration date.

 

Management has evaluated evidence impacting therealizability of its deferred tax assets, which primarily consists of netoperating loss carry forwards. Management has considered the Company’s historyand forecasts for the future and concluded that it is more likely than not thatbenefits of these tax loss carry forwards exceeding EUR 359,000 will not berealized. As a result, the Company recorded a valuation allowance for thedeferred tax assets exceeding EUR 359,000. The deferred tax asset is accountedfor under prepaid expenses and other current assets. Since all active entitiesform a tax group for income tax purposes, they are jointly and severally liablefor the total tax liability of the tax group.

 

**11**

**Capital stock and preferred dividend**

 

At December 31, 2002, 2003 and 2004, 43,750,000Common Shares and 19,750,000 Preferred Shares were authorized, and as of thosedates, 30,469,345 Common Shares and no Preferred Shares were outstanding. TheCompany has never paid or declared any cash dividends on its Common Shares.

 

At December 31, 2000, there were 24,000,000Preferred Shares outstanding with no stated term.

 

In 2001 Triple P N.V. effected a financialrestructuring. The Company withdrew all outstanding Preferred Shares on August 1,2001. As of December 31, 2001, the Company had the obligation to pay apreferred dividend of EUR 572,000. This preferred dividend was included inshareholders’ equity at December 31, 2001.

 

During 2002, the Company paid the final installment ofthe preferred dividend of EUR 572,000 to the former holders of PreferredShares.

 

**12**

**Related Party Transactions**

 

Except as described below, none of the members of theCompany’s directors or officers has or has had since January 1, 2004, anyinterest in any transaction which is or was (i) material to suchaffiliated party or (ii) material to the business of the Company. No loanis outstanding from the Company to any Board member or Supervisory Board memberand the Company has not provided any guarantee for the benefit of any suchperson.

 

Mr. Khaleghi Yazdi provides advisory andmanagement services at a rate of EUR 2,000 per day to strengthen the Company’sManagement Board on an interim basis. The amount of cash compensation paid to Mr. KhaleghiYazdi and accrued for services in all capacities for the year ended December 31,2004 was EUR 440,000.

 

**13**

**Segment information**

 

The Company operates in the Information andCommunication Technology (“ICT”) industry offering computing and networkproducts (“Systems”) and providing consulting, project management andimplementation services as well as operational management and maintenanceservices (“Services”) primarily in The Netherlands. As of January 1, 2003,the Company reorganized from three divisions into a single organization with Systemsand Services business lines, which have been determined to be reportablesegments. As a result of this restructuring, the Company restated its segmentinformation for all years presented.

 

The Company evaluates performance based on severalfactors. Primary financial measures are net revenues and gross profit bybusiness line. Assets are not separated by business lines. The accountingpolicies of the business lines are the same as those described in the summaryof significant accounting policies in Note 2 of the Notes to the ConsolidatedFinancial Statements. There are no sales between business lines of the Company.

 

F-21

----

 

**Summarized financialinformation concerning the Company’s reportable segments is as follows:**

(in millions of euros)

 
| ** **    | ** ** | **Year Ended December 31,** | ** ** |
|---------------|------------|----------------------------------|------------|
| ** **    | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| Net Revenues  |       |                             |       |   |   |   |   |
| Systems       |       | 67.6                             |       | 53.4 |   | 51.9 |   |
| Services      |       | 28.8                             |       | 27.0 |   | 22.4 |   |
| Total Company |       | 96.4                             |       | 80.4 |   | 74.3 |   |
|          |       |                             |       |   |   |   |   |
| Gross Profit  |       |                             |       |   |   |   |   |
| Systems       |       | 8.1                              |       | 5.8 |   | 4.9 |   |
| Services      |       | 8.8                              |       | 8.3 |   | 6.5 |   |
| Total Company |       | 16.9                             |       | 14.1 |   | 11.4 |   |

 

The Company onlyoperates in the geographical area of The Netherlands.

 

**14 Board of Management and Supervisory Board remuneration**

 

**Board of Management**

 

The remuneration of themembers of the Board of Management is determined by the Supervisory Board. Theremuneration policy is such that Triple P will continue to attract, reward andretain qualified professionals in the labor market. The remuneration structureand levels will be determined by referencing to the appropriate local executivepay market practices by benchmarking positions on the basis of jobresponsibilities. The total remuneration consists of base salary, a short-termperformance cash bonus, stock options and benefits.

 

The remuneration in thousands of euros of the membersof the Board of Management was as follows: 

 
| ** **                  | ** ** | **Year Ended December 31,** | ** ** |
|-----------------------------|------------|----------------------------------|------------|
| **(in thousands of euros)** | ** ** | **2002**                         | ** ** | **2003** | ** ** | **2004** | ** ** |
| Salaries                    |       | 312                              |       | 188 |   | 106 |   |
| Bonuses                     |       | 81                               |       | 81 |   | 41 |   |
| Pension Cost                |       | 237                              |       | 39 |   | 22 |   |
| Other  benefits             |       | —                           |       | 375 |   | 30 |   |
| Total Company               |       | 630                              |       | 683 |   | 199 |   |

 

The 2004 remuneration in euros of the individualmembers of the Board of Management was as follows:

 
| **(in thousands of euros)** | ** ** | **Base**** ****salary** | ** ** | **Bonus** | ** ** | **Pension**** ****Cost** | ** ** | **Other**** ****Benefits** | ** ** | **Total** | ** ** |
|-----------------------------|------------|------------------------------|------------|-----------|------------|-------------------------------|------------|---------------------------------|------------|-----------|------------|
| H. Crijns                   |       | 106                          |       | 41        |       | 22                            |       | 30                              |       | 199       |       |

 

**Supervisory Board**

 

The annualremuneration for Supervisory Board members covers the period from one annualGeneral Meeting of Shareholders to the next one. This annual remuneration ispaid out over the past period after the annual General Meeting of Shareholders.The amounts of cash compensation of the Supervisory Board members aredetermined and approved by the shareholders at the General Meeting ofShareholders. The remunerations on a yearly basis are EUR 22,689 for thechairman and EUR 13,613 for other members. These remunerations have accordinglybeen paid in cash to the Supervisory Board members for the year ended 31, 2003and 2004, except for Mr. Khaleghi Yazdi. Mr. Khaleghi Yazdi providesadvisory and management services at a rate of EUR 2,000 per day to strengthenthe Company’s Management Board on an interim basis. The amount of cashcompensation of Mr. Khaleghi Yazdi paid and accrued for services in allcapacities for the year ended December 31, 2003 and 2004 was respectivelyapproximately EUR 279,000 and EUR 440,000.

 

During 2003 and 2004, Triple P paid out the followingamounts to the individual members of the Supervisory Board (in euros):

 
| ** **      | ** ** | **Year ended December 31,** | ** ** |
|-----------------|------------|----------------------------------|------------|
| **Name**        | ** ** | **2003**                         | ** ** | **2004** | ** ** |
| A.H.M. Stam     |       | 22,689                           |       | 22,689 |   |
| H.C.A.  Groenen |       | 13,613                           |       | 13,613 |   |

 

The number of options held by members of theSupervisory Board is set forth below:

 

F-22

----

 
| ** **      | ** ** | **Year ended December 31,** | ** ** |
|-----------------|------------|----------------------------------|------------|
| **Name**        | ** ** | **2003**                         | ** ** | **2004** | ** ** |
| A.H.M. Stam     |       | 15,000                           |       | 25,000 |   |
| H.C.A.  Groenen |       | 15,000                           |       | 25,000 |   |

 

F-23

----

 

Item 18A - FinancialStatement Schedule

 

**Valuation and Qualifying Accounts**

 
| **(in thousands of euros)**                 | ** ** | **Balance at beginning  of period** | ** ** | **Charged to cost  and expenses** | ** ** | **Deductions and  write-offs** | ** ** | **Balance at  end  of period** | ** ** |
|---------------------------------------------|------------|-------------------------------------|------------|-----------------------------------|------------|--------------------------------|------------|--------------------------------|------------|
| Year ended December 31,  2002          |       |                                |       |                              |       |                           |       |                           |       |
| Allowances  for doubtful receivables, trade |       | 1,155                               |       | 268                               |       | (422                           | )          | 1,001                          |       |
| Year ended December 31,  2003          |       |                                |       |                              |       |                           |       |                           |       |
| Allowances  for doubtful receivables, trade |       | 1,001                               |       | 247                               |       | (388                           | )          | 860                            |       |
| Year ended December 31,  2004          |       |                                |       |                              |       |                           |       |                           |       |
| Allowances  for doubtful receivables, trade |       | 860                                 |       | 324                               |       | (100                           | )          | 1,084                          |       |

 

38

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Item 19 - Exhibits

 
| **Exhibit Index** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 1         |       | An  English translation of the Company’s Articles of Association, as amended on August 1,  2001, as filed with the Company’s Form 20-F for the fiscal year  ended December 31, 2002 filed with the Securities and Exchange  Commission on June 3, 2003, is incorporated herein by reference.                                                                                                                                     |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 4.1       |       | An  English translation of the Master contract – Supplying Personal Computers and  Hardware Components (No 5078710/07/DBOB)- between Triple P N.V. and the  Ministry of Justice of The Netherlands dated September 2001, as amended,  as filed with the Company’s Form 20-F for the fiscal year ended December 31,  2003 filed with the Securities and Exchange Commission on May 26, 2004  is incorporated herein by reference. |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 4.2       |       | 1996  Stock Plan, as filed with the Company’s Form 20-F for the fiscal  year ended December 31, 2003 filed with the Securities and Exchange  Commission on May 26, 2004 is incorporated herein by reference.                                                                                                                                                                                                                               |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 4.3       |       | 1995  Director Option Plan, as filed with the Company’s Form 20-F for  the fiscal year ended December 31, 2003 filed with the Securities and  Exchange Commission on May 26, 2004 is incorporated herein by reference.                                                                                                                                                                                                                     |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 4.4       |       | An  English translation of the Rental Agreements between Triple P Management B.V.  and De Elf Provinciën B.V. dated October 19, 1994, as amended and October  2, 1996.                                                                                                                                                                                                                                                                               |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 4.5       |       | An  English summary of the Financial Service Agreement between Triple P Nederland  B.V. and IFN Finance B.V. (ABN-AMRO) dated May 18, 2000, as amended.                                                                                                                                                                                                                                                                                                   |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 8         |       | Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 12.1      |       | Certification  by the Registrant’s Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a)                                                                                                                                                                                                                                                                                                                                                   |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 12.2      |       | Certification  by the Registrant’s Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a)                                                                                                                                                                                                                                                                                                                                                   |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 13.1      |       | Certification  by the Registrant’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350,  as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                            |
|                   |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Exhibit 13.2      |       | Certification  by the Registrant’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350,  as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                            |

 

39

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**Signatures**

 

The registrant hereby certifies that it meets all ofthe requirements for filing on Form 20-F and that it has duly causedand authorized the undersigned to sign this Annual Report on its behalf.

 
| June 3,  2005 Vianen, The Netherlands Triple P N.V. |
|----------------------------------------------------------|
|                                                     |
| By                                                       |
|                                                     |
|                                                     |
| /s/ Huub Crijns                                          |   |
|                                                     |
| H.  Crijns                                               |
| Interim  Chief Executive Officer                         |
|                                                     |
| and                                                      |
|                                                     |
|                                                     |
| /s/ Peter Blokhuis                                       |   |
|                                                     |
| P.  Blokhuis                                             |
| Concern Controller                                       |
|                                                          |  |  |

 

40

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