**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, 2003** |                                                                                                                                                             |
|   |                                                 |                                                                                                                                                             |
|   | **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: 0-27298**

 

**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**(Address of PrincipalExecutive Offices)

 

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

Securities registered or to be registered 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 which there is a reporting obligation pursuant toSection 15(d) of the Act:**None**

 

The number of outstanding shares of each of the issuer’s classes ofcapital or common stock as of December 31, 2003 was 30,469,345 commonshares, EUR 0.04 par value per share.

 

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

 

Yes ý     No o

 

Indicate by check mark which financial statement item the Registrant haselected to follow.

 

Item 17 o        Item18 ý

 

 

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Unlessthe context otherwise requires, references herein to the ‘Company’ or to‘Triple P’ are to Triple P N.V. and its consolidated subsidiaries. Triple P isa registered trademark of Triple P N.V. This Annual Report on Form 20-F alsocontains trademarks of other companies.

 

Ourconsolidated financial statements are prepared in accordance with accountingprinciples generally accepted in the United States. 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 ‘US dollars’, ‘USD’ and ‘$’ are to United States dollars.

 

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**Table of contents**

 
|         |                                                                          | **Page** |
|--------------|-------------------------------------------------------------------------------|----------|
| **Part I**   |                                                                          | 2        |
| Item  1      | Identity of Directors, Senior  Management and Advisers                        | 2        |
| Item  2      | Offer Statistics and Expected  Timetable                                      | 2        |
| Item 3       | Key Information                                                               | 2        |
| Item 4       | Information on the Company                                                    | 9        |
| Item 5       | Operating and Financial Review  and Prospects                                 | 14       |
| Item 6       | Directors, Senior Management and  Employees                                   | 33       |
| Item 7       | Major Shareholders and Related  Party Transactions                            | 41       |
| Item 8       | Financial Information                                                         | 42       |
| Item 9       | The Offering and Listing                                                      | 43       |
| Item 10      | Additional Information                                                        | 45       |
| Item 11      | Quantitative and Qualitative  Disclosures about Market Risk                   | 58       |
| Item 12      | Description of Securities other  than Equity Securities                       | 58       |
|         |                                                                          |     |
| **Part II**  |                                                                          | 59       |
| Item 13      | Defaults, Dividend Arrearages  and Delinquencies                              | 59       |
| Item 14      | Material Modifications to the  Rights of Security Holders and Use of Proceeds | 59       |
| Item 15      | Controls and Procedures                                                       | 59       |
| Item 16      | [Reserved]                                                                    | 59       |
| Item 16A     | Audit Committee Financial  Expert                                             | 60       |
| Item 16B     | Code of Ethics                                                                | 60       |
| Item 16C     | Principal Accountant Fees and  Services                                       | 60       |
| Item 16D     | Exemptions from the Listing  Standards for Audit Committees                   | 61       |
| Item 16E     | Purchases of Equity  Securities by the Issuer and Affiliated Purchasers       | 61       |
|         |                                                                          |     |
| **Part III** |                                                                          | 62       |
| Item 17      | Financial Statements                                                          | 62       |
| Item 18      | Financial Statements                                                          | 62       |
| Item 18A     | Financial Statement Schedule                                                  | 63       |
| Item 19      | Exhibits                                                                      | 64       |

 

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Part I

 

 

Item 1

#### **Identity of Directors, Senior Management andAdvisers**

 

Notapplicable

 

 

Item 2

### **Offer Statistics and Expected Timetable**

 

Notapplicable

 

 

Item 3

**Key Information**

 

**Selected Financial Data**

 

Thefollowing selected financial data should be read in conjunction with theConsolidated Financial Statements and related notes thereto, included in thisAnnual Report on Form 20-F. The selected statements of operations data for theyears ended December 31, 2001, 2002 and 2003, and the balance sheet dataat December 31, 2002 and 2003 have been derived from the ConsolidatedFinancial Statements of the Company, which have been prepared in accordancewith accounting principles generally accepted in the United States (US GAAP),and are included herein. The selected statements of operations data for theyear ended December 31, 1999 and 2000 and the balance sheet data atDecember 31, 1999, 2000 and 2001 are derived from audited financialstatements not included herein.

 

Beginning January 1, 2000, the Company changed its reportingcurrency from Dutch guilders into European Monetary Union euros. All prior yearfigures in Dutch guilders have been restated in euros using the exchange rate as of January 1,1999, of Dutch guilder 2.20371 to EUR 1.00. For more backgroundinformation reference is made to ‘Item 3 - Exchange Rate Information’ includedherein.

 

2

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**Statement of Operations Data**

(inthousands)

 
|                                                |   | **Year Ended  December 31,** |   |
|-----------------------------------------------------|--------|-----------------------------------|--------|
|                                                |   | **1999**                          |   | **2000** |   | **2001** |   | **2002** |   | **2003** |   |
|                                                |   | **EUR**                           |   | **EUR** |   | **EUR** |   | **EUR** |   | **EUR** |   |
|                                                |   |                              |   |   |   |   |   |   |   |   |   |
| Net revenues                                        |   | 112,812                           |   | 122,353 |   | 110,874 |   | 96,373 |   | 80,371 |   |
| Cost of revenues                                    |   | 88,474                            |   | 100,252 |   | 91,793 |   | 79,438 |   | 66,261 |   |
| Gross profit                                        |   | 24,338                            |   | 22,101 |   | 19,081 |   | 16,935 |   | 14,110 |   |
|                                                |   |                              |   |   |   |   |   |   |   |   |   |
| Sales and marketing expense                         |   | 10,932                            |   | 10,227 |   | 9,743 |   | 9,777 |   | 8,550 |   |
| Research and development expense                    |   | 2,408                             |   | 661 |   | — |   | — |   | — |   |
| General and administrative expense                  |   | 6,607                             |   | 5,770 |   | 4,658 |   | 5,660 |   | 3,654 |   |
| Goodwill amortization                               |   | 255                               |   | 191 |   | 189 |   | — |   | — |   |
| Restructuring charge                                |   | —                            |   | — |   | — |   | 1,370 |   | 1,281 |   |
| Total operating expenses                            |   | 20,202                            |   | 16,849 |   | 14,590 |   | 16,807 |   | 13,485 |   |
|                                                |   |                              |   |   |   |   |   |   |   |   |   |
| Operating income from continuing operations         |   | 4,136                             |   | 5,252 |   | 4,491 |   | 128 |   | 625 |   |
|                                                |   |                              |   |   |   |   |   |   |   |   |   |
| Other expense, net                                  |   | (851                              | )      | (517 | ) | (245 | ) | (648 | ) | (183 | ) |
| Income (loss) before income taxes                   |   | 3,285                             |   | 4,735 |   | 4,246 |   | (520 | ) | 442 |   |
|                                                |   |                              |   |   |   |   |   |   |   |   |   |
| Income taxes                                        |   | —                            |   | — |   | — |   | — |   | — |   |
| Net income (loss) from continuing  operations       |   | 3,285                             |   | 4,735 |   | 4,246 |   | (520 | ) | 442 |   |
|                                                |   |                              |   |   |   |   |   |   |   |   |   |
| Profit (loss) from discontinued operations          |   | (823                              | )      | 326 |   | (377 | ) | — |   | — |   |
| Loss on disposal of discontinued operations         |   | —                            |   | — |   | (628 | ) | — |   | — |   |
| Net income (loss) from discontinued  operations(1)  |   | (823                              | )      | 326 |   | (1,005 | ) | — |   | — |   |
|                                                |   |                              |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                   |   | 2,462                             |   | 5,061 |   | 3,241 |   | (520 | ) | 442 |   |
|                                                |   |                              |   |   |   |   |   |   |   |   |   |
| Preferred stock dividend                            |   | 980                               |   | 980 |   | 572 |   | — |   | — |   |
| Preferred stock withdrawal premium                  |   | —                            |   | — |   | 454 |   | — |   | — |   |
| Net income (loss) available to common  shareholders |   | 1,482                             |   | 4,081 |   | 2,215 |   | (520 | ) | 442 |   |

 

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(1)          Discontinued Operations include (see item 4for more information): Triple P Belgium N.V./S.A., Software and Services SolutionsBusiness, Belgium.

 

3

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**Statement of Operations Data (continued)**(in thousands except share and per share data)

 
|                                                         |   | **Year Ended  December 31,** |   |
|--------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                         |   | **1999**                          |   | **2000** |   | **2001** |   | **2002** |   | **2003** |   |
|                                                         |   | **EUR**                           |   | **EUR** |   | **EUR** |   | **EUR** |   | **EUR** |   |
|                                                         |   |                              |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings per share:                        |   |                              |   |   |   |   |   |   |   |   |   |
| Net income (loss) per share from continued  operations       |   | 0.08                              |   | 0.12 |   | 0.10 |   | (0.02 | ) | 0.01 |   |
| Net income (loss) per share from  discontinued operations(1) |   | (0.03                             | )      | 0.01 |   | (0.03 | ) | — |   | — |   |
| Net income (loss) per share                                  |   | 0.05                              |   | 0.13 |   | 0.07 |   | (0.02 | ) | 0.01 |   |
|                                                         |   |                              |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding:                         |   |                              |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   | 30,469                            |   | 30,469 |   | 30,469 |   | 30,469 |   | 30,469 |   |
| Diluted                                                      |   | 30,763                            |   | 30,469 |   | 30,469 |   | 30,469 |   | 30,479 |   |

 

**Balance Sheet Data**

(inthousands)

 
|                                       |   | **Year Ended  December 31,** |   |
|--------------------------------------------|--------|-----------------------------------|--------|
|                                       |   | **1999**                          |   | **2000** |   | **2001** |   | **2002** |   | **2003** |   |
|                                       |   | **EUR**                           |   | **EUR** |   | **EUR** |   | **EUR** |   | **EUR** |   |
|                                       |   |                              |   |   |   |   |   |   |   |   |   |
| Cash, cash equivalents and restricted cash |   | 2,600                             |   | 9,673 |   | 1,069 |   | 4,266 |   | 6,194 |   |
| Working capital                            |   | 6,359                             |   | 11,262 |   | 2,909 |   | 1,874 |   | 1,995 |   |
| Total debt                                 |   | —                            |   | 459 |   | 1,163 |   | 1,022 |   | 442 |   |
| Total assets                               |   | 36,006                            |   | 39,953 |   | 27,875 |   | 23,641 |   | 21,116 |   |
| Shareholders’ equity                  |   | 8,502                             |   | 12,576 |   | 3,492 |   | 2,514 |   | 2,727 |   |

 

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

 

4

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## **Exchange Rate Information**

 

EffectiveJanuary 1, 1999, the European Monetary Union created a single currency(the euro) for its member countries. On that date, the exchange rates betweennational currencies of the participating countries, including The Netherlands,were fixed against the euro. As of January 1, 2000, Triple P changed itsreporting currency from Dutch guilders into European Monetary Union euros. Inthis Annual Report on Form 20-F all figures previously reported in Dutchguilders have been restated in euros using the exchange rate as ofJanuary 1, 1999, of Dutch guilder 2.20371 to EUR 1.00. The exchange rateof euros per US dollar as of April 29, 2004 was 0.8372.

 

**Average exchange rates of euros per US dollar are as follows**

(EURper $ 1.00)

 
| **Calendar period** |   | **Period  End** |   | **Average  Rate(1)** |   | **High** |   | **Low** |   |
|---------------------|--------|-----------------|--------|----------------------|--------|----------|--------|---------|--------|
| 1999                |   | 0.99            |   | 0.94                 |   | 1.00     |   | 0.85    |   |
| 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    |   |

 

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(1)                                  The average of the Noon Buying Rates on thelast business day of each full calendar month during the period.

 
| **Calendar period** |   | **High** |   | **Low** |   |
|---------------------|--------|----------|--------|---------|--------|
| November 2003  |   | 0.88     |   | 0.83    |   |
| December 2003  |   | 0.84     |   | 0.79    |   |
| January 2004   |   | 0.81     |   | 0.78    |   |
| February 2004  |   | 0.81     |   | 0.78    |   |
| March 2004     |   | 0.83     |   | 0.80    |   |
| April 2004     |   | 0.85     |   | 0.81    |   |

 

**Risk Factors**

 

Thefollowing important factors, among others, could cause the Company’s actualresults to differ materially from those contained in forward-looking statementsmade in this Annual Report on Form 20-F or presented from time to timeelsewhere by management.

 

**Our quarterly sales and operating results fluctuatesignificantly**

 

TheCompany has experienced fluctuations in annual and quarterly operating resultsand anticipates that these fluctuations will continue. The fluctuations arecaused by a number of factors, including the level and timing of customerorders, the ability to adjust expense levels to revenue levels, andseasonality.

 

5

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Thelevel and timing of orders placed by customers vary because of changes incustomer strategy and variation in demand for the Company’s products due to,among other things, product life cycles, competitive conditions and generaleconomic conditions. In the past, these changes in the level and timing oforders from customers have had a significant effect on results of operationsdue to the corresponding changes in the level of overhead absorption.

 

TheCompany’s expense levels are based in significant part on its expectationsregarding future revenues and are fixed to a large extent in the short term.The time between the initial contact with the customer and final delivery andacceptance of the Company’s products and services range from one to ninemonths, making it even more difficult to forecast the precise timing of sales.Accordingly, the Company may be unable to adjust spending in a timely manner tocompensate for any unexpected revenue shortfall. Any significant revenueshortfall would therefore have a material adverse effect on the Company’sresults of operations and financial condition.

 

Inthe past the Company has realized higher revenues and net income in the fourthquarter of the year than in any other quarter. The Company believes that thistrend is due primarily to the calendar year budgeting cycles and purchasingpatterns of its customers.

 

Otherfactors affecting the Company’s annual and quarterly operating results includeprice competition, the mix of products and services sold, the level ofexperience and efficiency achieved in installing a particular product, theefficiency achieved in managing inventories and fixed assets, the availabilityof qualified technical personnel, exchange rate fluctuations and theintroduction of new solutions by the Company and its competitors. Any of thesefactors or a combination thereof could adversely affect the Company’s annualand quarterly results of operations and financial condition in the future.

 

**Our sales are concentrated in The Netherlands and we aredependent on economic condition in The Netherlands**

 

TheCompany derived substantially all of its net revenues from sales in TheNetherlands in 2001, 2002 and 2003. Accordingly, the Company’s results ofoperations may be more affected by adverse economic conditions in TheNetherlands than the results of more geographically diversified companies.

 

**The Department of Justice in The Netherlands accounts for asignificant portion of our sales and our future net sales could decline if weare unable to maintain this customer relationship**

 

TheDepartment of Justice in The Netherlands accounted for approximately EUR 17.3million or 22% of consolidated net revenues in the year ended December 31,2003, approximately EUR 30.7 million or 32% of consolidated net revenues in theyear ended December 31, 2002 and approximately EUR 32.5 million or 29% ofconsolidated net revenues in the year ended December 31, 2001.Accordingly, the Company’s results of operations may be more dependent on onecustomer than the results of other companies with a larger base of smallercustomers. If the Department of Justice in The Netherlands for any reason

 

6

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determinedto cease or significantly decrease the levels of products and services that ithistorically has purchased from the Company, it would have a material adverseeffect on the Company’s financial condition and results of operations. TheCompany 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 expires in September 2004 and may be renewed for anotherperiod of 2 to 4 years based on a European tender procedure in 2004.

 

**If we fail to attract and retain qualified personnel ourbusiness could be harmed**

 

TheCompany’s business and future operating results depend in large part upon itsability to attract and retain qualified management, technical, sales andsupport personnel for its operations. There can be no assurance that theCompany will be able to attract and retain such personnel. The inability toattract and retain skilled personnel as needed could adversely affect theCompany’s business, financial condition and results of operations.

 

**We may fail to compete effectively in our markets**

 

The Company encounters competition from a broad range of firms in themarkets in which it competes. Competitors include computer hardwaremanufacturers, systems integrators and consulting organizations, many of whichpossess greater resources than the Company, and small independent firms whichcompete primarily on the basis of cost of services provided and knowledge oflocal geographic markets. Finally, the Company faces competition from in-houseICT-staffs of large organizations. The Company believes that its ability todifferentiate its product and service offerings from those which its potentialcustomers can provide in-house is critical to its future success.

 

Theprincipal factors affecting the competitiveness of the Company’s services andproducts include quality and availability of personnel, product functionality,flexibility, portability, integration, reliability, performance, productavailability, speed of implementation, quality of customer service and supportand user documentation, vendor reputation, experience, financial stability andcost effectiveness. 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 products and services in a timelyfashion and are dependent on market acceptance of new products and services**

 

Themarket for the Company’s products and services is characterized by rapidlychanging technology, evolving industry standards, changes in customer needs andfrequent new product introductions. The Company’s future success will depend onits ability 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

 

7

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solutionson a timely basis, or that such new solutions or enhancements will achievemarket acceptance. The development of new technologically advanced solutions isa complex 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.

 

8

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Item 4

## **Information on the Company**

 

## **History and Development ofthe Company**

 

TripleP N.V. was incorporated in The Netherlands on August 28, 1995 andcompleted its initial public offering on December 15, 1995. The Company isthe successor of Triple P Management B.V., which was founded in 1989. Itsregistered offices are located at Ir. D.S.Tuynmanweg 10, 4131 PN Vianen, TheNetherlands (phone +31 347 353 650; fax +31 347 353 666). The Company’stransfer agent and registrar in the United States is the Bank of New York.

 

During1999 the Company divested its minority interest in Siennax B.V. and its Datacomcabling business. Neither divestiture had a significant impact on the Company’sconsolidated operating income.

 

Duringthe year 2000, the Company divested its minority interest in Media Systems LTD.in the United Kingdom. The divestiture had no significant impact on the resultsof operations.

 

Duringthe year 2001, the Company divested its ITC independent training centerbusiness. This divestiture had no significant impact on the results ofoperations. At the same time the Company committed to discontinue its USsubsidiary, Triple P USA Inc.

 

During2002, the Company ceased operations of Triple P USA Inc and began the processto legally dissolve the subsidiary which was finalized in 2003. Thisliquidation had no significant impact on the results of operations in 2002 or2003.

 

During2002, the Company sold its Belgian subsidiary, Triple P Belgium N.V./S.A.,after the decision in December 2001 to discontinue the services andsoftware solutions businesses in Belgium, which was based in part on reportedoperating losses in 2001 and the estimated operating losses in 2002, whichmaterialized in 2002. As a result of this decision, the Company no longerserves any customers in the Belgian Healthcare market. In 2001 Triple P BelgiumN.V./S.A. had net revenues and operating results of approximately EUR 8.0million and EUR (0.4 million), respectively. The consolidated financialstatements of the Company for the fiscal years 1999 through 2001 have beenrestated to reflect the effects to account for the disposal of the Belgiansubsidiary as discontinued operations in December 2001. Accordingly, thenet revenues, costs and expenses, assets and liabilities and cash flowsassociated with the discontinued operations have been excluded from therespective captions in the accompanying statements of operations and statementsof cash flows and reflected under captions identifying them as discontinuedoperations.

 

During2001, 2002 and 2003, the Company’s capital expenditures for fixed assets wereEUR 1,354,000, EUR 1,427,000 and EUR 289,000, respectively. Capitalexpenditures consist mainly of ICT-infrastructure

 

9

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productsforinternal use. Thehigher levels of capital expenditures for fixed assets in 2001 and 2002 weremainly related to investments in a ERP-software solution, One World of JDEdwards. The Company capitalized expenses under fixed assets to anamount of EUR 1,001,000 and EUR 1,116,000 in the years 2001 and 2002,respectively, in implementing this technology.

###### ** **

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

 

##### **The Company**

 

**Introduction**

 

TripleP is a provider of high quality Information and Communication Technology(‘ICT’) infrastructure enterprise solutions to medium and large businesses inThe Netherlands. These solutions include ICT-consultancy, ICT-infrastructuresystems delivery, project management and implementation services, andoperational ICT-infrastructure management and maintenance services. TheCompany’s solutions are compatible with the established products of leadinghardware manufacturers, including Hewlett Packard, Toshiba, IBM, SunMicrosystems, Citrix, Cisco, Mitel, Microsoft, Novell and Oracle. The Companygenerated net revenues of EUR 80.4 million in 2003 and employed 330 employeesat December 31, 2003.

 

Priorto December 31, 2002, Triple P organized its business into threedivisions: Systems & Networks, Services, and Software & SystemsIntegration. As of January 1, 2003 these three divisions were integratedinto a single organization with a Systems and Services business.

 

TheCompany’s Systems business (“Systems”) consists of reselling system and networkproducts. The Company’s Services business (“Services”) consists ofICT-infrastructure management consulting including system and networkintegration consulting, project management and implementation services as wellas operational ICT-infrastructure management and maintenance services. TheCompany’s Services business in the home-care and publishing markets alsoincludes standard software implementation, customization and maintenanceservices.

 

**Market approach**

 

TheCompany currently has approximately 1,000 customers which are being served bythe Company’s direct sales channel. Many customers are medium to large sizedcorporations or government agencies with more than 50 employees. In 2003, theCompany started to implement an account management strategy for approximately250 of its larger clients which it expects to finalize in 2004. During theimplementation process these clients will be assigned to a dedicated accountmanager who is responsible for the sale of the total Systems and Servicesportfolio of the Company at this client.

 

TheCompany’s approach is to work together with customers to analyze their currentICT-infrastructures, define their ICT-objectives and functional requirements,and determine their systems and software requirements. The Company can alsoprovide a customer with a detailed plan for the operational ICT-

 

10

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infrastructuremanagement and maintenance including, where relevant, an implementation planfor the required migration from an existing ICT-infrastructure.

 

Thecosts involved in contracts vary greatly depending on the size, scope andcomplexity of the project concerned. For the Systems business, the contractsrange from EUR 25,000 for reselling a small PC-based network to more than EUR 1million for reselling 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 andimplementation contracts range from EUR 2,500 for the design and implementationof a small PC-based network to more than EUR 100,000 for the design and implementationof a complex network including complex storage or security issues. Recurringcontracts range from EUR 1,000 a year for maintenance of a small PC-basednetwork to more than EUR 250,000 a year for operational ICT-infrastructuremanagement and maintenance of larger networks including one or more highavailability clusters.

 

**Systems business**

 

TheCompany specializes in front to back-office solutions comprising multi-vendorproducts. The Company’s strategic relationships with leading suppliers enableit to offer customers both one-stop shopping and independent consultancyservices. Systems offerings include highly functional front-office solutionsand solutions for back-office environments focused on high-availabilityclustering, reliable data storage, mission-critical local area network (‘LAN’)backbones and interconnects, bandwidth management, and security and directoryservices. The Company resells personal computers, servers, network componentsand telephone switches manufactured by companies such as Toshiba, IBM, SunMicrosystems, Hewlett Packard, Citrix, Cisco and Mitel. The Company marketscomplete networks, Intranets and Internet gateways based on Gigabit Ethernet,Switched Ethernet, virtual LANs and LAN switching technologies, among others,supplied by leading vendors in the industry such as Cisco, Mitel and HewlettPackard. The Company also sells, as necessary, third-party software, includingnetworking and enterprise management software from providers such as Microsoft,Novell and Oracle. The Company’s solutions can be configured using a variety ofnetwork operating systems, including Microsoft Windows, Linux, SunMicrosystems’s Unix and Novell’s Netware.

 

**Services business**

 

TheCompany specializes in independent system and network integration consultingservices and provides a customer a detailed network infrastructure design and,where relevant, an implementation plan for the required migration from anexisting network configuration. The Company’s project management andimplementation services is designed to ensure that the network infrastructureconcepts work as designed. Once the new systems have been brought online, theCompany’s certified specialists assist customers by managing theICT-infrastructure or co-managing the ICT-environments with them. The Company’sServices business is focused on the continuing task of ensuring long-termreliable performance of ICT-

 

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infrastructureenvironments, with a strong emphasis on control of the total cost of ownership.

 

Servicelevel agreements 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.

 

TheCompany operates a network control center to monitor customers’ configurationsand to coordinate necessary systems and network services. This enables theCompany’s engineers to provide both on-site and remote assistance to customers.The Company’s hardware maintenance agreements are usually for a one year termand renew automatically, unless notice of termination is submitted at least 90days prior to expiration. However, following the trend in the industry, anincreasing percentage of the Company’s new maintenance business are on atime-and-materials basis. The Company’s high availability server and networkingsupport agreements are usually for a one to three year term.

 

Inthe home-care market, the Company’s Services business focuses on automation ofbusiness processes within home-care organizations based on standardized thirdparty software. For several years the Company has been a leading provider ofhome-care software in The Netherlands in collaboration with 36 home-careinstitutions united in the user group TCM. In 2000, the Company sold the sourcecode of this home-care software to TCM effective January 1, 2002.

 

Inthe publishing market, the Company’s Services business focuses on work flowmanagement and multi-media content management based on standardized third partysoftware components. For several years, the Company has been a leading providerof newspaper publishing software in The Netherlands.

 

**Competition**

 

Competitionis fierce in all segments of the worldwide ICT-market. The Company’scompetitors are numerous and vary widely in size and resources, depending uponthe market, customer and geographic area involved. The Company facescompetition from systems integrators, consulting organizations,telecommunications companies, hardware manufacturers and information technologysolution providers. The Company’s primary competitors in the Systems businessinclude Simac, Van den Berg & Peeters, IBM, Hewlett Packard and Dell. Inthe Services business, the Company’s primary competitors include Atos Origin,Getronics, IBM, Imtech, Pink Roccade and Simac.

 

12

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**Organizational Structure**

 

Thefollowing table sets forth the legal structure of Triple P N.V. as ofFebruary 29, 2004.

 
|             | Triple P N.V.                |   |
|------------------|------------------------------|--------|
|             | The Netherlands              |   |
|             |                         |   |   |
|             | 100%                         |   |   |
|             |                         |   |   |
|             | Triple P Management  B.V.    |   |
|             | The Netherlands              |   |
|             |                         |   |
|   100% | Triple P Nederland B.V.      |   |
|             | The Netherlands              |   |
|             |                         |   |
|   100% | Mediasystemen 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 inThe Netherlands 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 of thisAnnual Report on Form 20-F).

## ** **

## **Property and Equipment**

 

The Company leases office space in several locations. The location ofeach significant operation, its approximate size used by the Company and dateof lease expiration are set forth below.

 
| **Location**             |   | **Size (sq  meters)** |   | **Function**                           |   | **Lease  expiration** |   |
|--------------------------|--------|-----------------------|--------|----------------------------------------|--------|-----------------------|--------|
| Vianen, The Netherlands  |   | 8,500                 |   | Headquarters, Sales, Operations, Staff |   | 2004                  |   |
| Haarlem, the Netherlands |   | 800                   |   | Mediasystemen BV                       |   | 2004                  |   |

 

The Company also leases other small service locations in TheNetherlands aggregating approximately 330 square meters. The Company’s netrental expense for the year ended December 31, 2003, was approximately EUR1.3 million.

 

13

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Item 5

 

**Operating and Financial Review and Prospects**

 

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

 

**Introduction**

 

**Forward looking statements**

 

Thissection contains forward-looking statements within the meaning of the USPrivate Securities Litigation Reform Act of 1995 concerning the Company’sbusiness, operations and financial condition. All statements other thanstatements of historical facts included in this annual report on Form 20-Fregarding the Company’s strategy, future operations, financial position, costs,prospects, plans and objectives of management are forward-looking statements.When used in this annual report on Form 20-F the words “expect”, “anticipate”,“intend”, “plan”, “believe”, “seek”, “estimate”, and similar expressions areintended to identify forwardlooking 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 Form20-F.

 

TheCompany cannot guarantee any future results, levels of activity, performance orachievements. The forward-looking statements contained in this annual report onForm 20-F represent management’s expectations as of the date of this annualreport on Form 20-F and should not be relied upon as representing the Company’sexpectations as of any other date. Subsequent events and developments willcause management’s expectations to change. However, while the Company may electto update these forward-looking statements, the Company specifically disclaimsany obligation to do so, even if its expectations change.

 

**Reporting Currency**

 

EffectiveJanuary 1, 1999, the European Monetary Union created a single currency(the euro) for its member countries. On that date, the exchange rates betweennational currencies of the participating countries, including The Netherlands,were fixed against the euro. As of January 1, 2000, Triple P changed itsreporting currency from Dutch guilders into European Monetary Union euros. Inthis Annual Report on Form 20-F all figures previously reported in Dutchguilders have been restated in euros using the exchange rate as ofJanuary 1, 1999, of Dutch guilder 2.20371 to EUR 1.00.

 

**Critical Accounting Policies**

 

Acritical accounting policy is an accounting policy that is both material to thepresentation of the Company’s financial statements and requires management tomake difficult, subjective or complex judgements that could have a materialeffect on the Company’s financial condition and results of

 

14

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operations.Specifically, critical accounting estimates have the following attributes: (i)management is required to make assumptions about matters that are uncertain atthe time of the 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.

 

Estimatesand assumptions 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.

 

TheCompany’s consolidated financial statements are prepared in conformity withaccounting principles generally accepted in the United States. For acomprehensive discussion of the Company’s accounting policies, see note 2 inthe accompanying consolidated financial statements included in Item 18 of thisAnnual Report on Form 20-F. The Company does not have any ownership interest inany special purpose entities.

 

Thepreparation of financial statements in conformity with generally acceptedaccounting principles requires management to adopt critical accountingpolicies, as described above, and therefore to make estimates and assumptionsthat affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenses during the reporting periods.These estimates, particularly estimates relating to revenue recognition,allowances for doubtful accounts, litigation and contingencies, deferred taxes,long-lived assets, discontinued operations and restructuring and impairmentcharges, have a material impact on the Company’s financial statements, and arediscussed in detail throughout management’s analysis of the results ofoperations as discussed below. The Company bases its estimates on historicalexperience and on various other assumptions that it believes are reasonableunder the circumstances, the results of which form the basis for makingjudgements about the carrying value of assets and liabilities that are notreadily apparent from other sources. Actual results and outcomes could differfrom these estimates and assumptions. Additional information regarding riskfactors that may impact the Company’s estimates is included in “Item 3 - RiskFactors” in this Annual Report on Form 20-F.

 

TheCompany applies the following critical accounting policies in the preparationof its consolidated financial statements:

 

*Revenue recognition*

 

Systemsrevenues consist of revenues from the sale of ICT-infrastructure systems ofthird party hardware and third party software. For arrangements where theCompany does not install the systems, or installation is deemed to beinconsequential or perfunctory, revenues are recognized upon delivery whenevidence of an arrangement exists, title and risk of loss have been transferredfor both the third party

 

15

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hardwareand third party software, amounts are fixed and determinable and collection isdeemed probable. For arrangements where the Company installs the systems andinstallation is not deemed to be inconsequential or perfunctory, revenue isdeferred until all obligations are fulfilled and all other revenue recognitioncriteria are met. If the arrangement includes a customer acceptance provision,or if there is uncertainty about customer acceptance of products sold orservices rendered, revenue is deferred until evidence of customer acceptance isreceived.

 

Services revenues consist of revenues from maintenance and managementservice arrangements and consulting and implementation services. Revenues frommaintenance and management service arrangements are recognized ratably over theterm of the contract period once evidence of an arrangement exists, amounts arefixed and determinable and collection is deemed probable.  Revenues from consulting and implementationservices are recognized on a time and materials basis as services are beingperformed, when all other revenue recognition criteria are met.

 

Whenelements such as the sale of systems, maintenance and management servicearrangements and consulting and implementation services are contained in asingle arrangement, or in related arrangements with the same customer, theCompany allocates revenues to each element based on its relative fair value,provided that such element meets the criteria for treatment as a separate unitof accounting. 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.

 

Shippingand handling costs are included in cost of sales.

 

Customerdeposits represent cash received from customers in advance of fulfillingcustomer purchase orders. Revenues related to such transactions are recognizedwhen all revenue recognition criteria are met and other obligations fulfilled.A provision for warranty costs is recorded upon revenue recognition whenappropriate.

 

Deferredrevenue primarily 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 Doubtful Accounts*

 

TheCompany provides an allowance for possible doubtful accounts for estimatedlosses resulting from the inability of its customers to make required payments.The allowance for doubtful accounts is based on management’s periodic review ofaccounts, including the aging of accounts receivable, making use of pastexperience with similar accounts receivable. Based on current judgements andestimates management believes the allowance for doubtful accounts to beadequate. However, if the financial condition of the

 

16

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Company’scustomers were to deteriorate, resulting in an impairment of their ability tomake payments, or actual defaults were higher than the Company’s historicalexperience, management’s estimates of the recoverability of amounts due to theCompany could be overstated, which could have an adverse impact on theCompany’s operations. As of December 31, 2003, the Company had anallowance for doubtful accounts of EUR 860,000.

 

*Litigation and Contingencies*

 

TheCompany is subject to the possibility of various loss contingencies arising inthe ordinary course of business. The Company considers the likelihood of lossor impairment of an asset or the incurrence of a liability, as well as itsability to reasonably estimate the amount of loss in determining losscontingencies. An estimated loss contingency is accrued when it is probablethat an asset has been impaired or a liability has been incurred and the amountof loss can be reasonably estimated. Management regularly evaluates currentinformation available to the Company to determine whether such accruals shouldbe adjusted.

 

TheCompany is engaged as plaintiff or defendant in several lawsuits in TheNetherlands and Belgium, originating before 2002. The Company has establishedreserves of approximately EUR 850,000 relating to specific lawsuits, whichrepresent estimates of its probable liabilities with respect to these specificclaims. As this litigation may take several years to complete, future eventscould require management to make significant adjustments for revisions to theseestimates. The Company does not believe that based on current judgements andestimates the outcome in any of these lawsuits individually or in the aggregatewould have a material adverse impact on the Company’s business, future resultsof operations or financial condition.

 

*Deferred Taxes*

 

TheCompany records a valuation allowance to reduce its deferred tax assets to theamount that is more likely than not to be realized. As of December 31,2003, the net deferred tax asset was approximately EUR 571,000. Whilemanagement has considered future taxable income and ongoing prudent andfeasible tax planning strategies in assessing the need for a valuationallowance, if management were to subsequently determine that the Company wouldbe able to realize deferred tax assets in the future in excess of its netrecorded amount, an adjustment to deferred tax assets would increase income inthe period such determination was made. Similarly, should management determinethat the Company would not be able to realize all or part of net deferred taxassets in the future, an adjustment to deferred tax assets would reduce incomein the period such determination was made. In determining net deferredtax assets and valuation allowances, management is required to make judgmentsand estimates related to projections of profitability, the timing and extent ofthe utilization of net operating loss carryforwards, applicable tax rates,transfer pricing methodologies and prudent and feasible tax planningstrategies.

 

*Long-lived Assets*

 

TheCompany evaluates the carrying value of all long-lived assets whenever eventsor circumstances indicate the carrying value of assets may exceed theirrecoverable amounts. An impairment loss is

 

17

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recognizedwhen the estimated future cash flows (undiscounted and without interest)expected to result from the use of an asset are less than the carrying amountof the asset. Measurement of an impairment loss is based on fair value of theasset computed using discounted cash flow if the asset is expected to be heldand used. Measurement of an impairment loss for an asset held for sale would bebased on fair market value less estimated costs to sell. Significant managementjudgment is required in the forecasting of future operating results andproceeds from disposition which are used in the preparation of projected cashflows and, should different conditions prevail or judgements be made, materialimpairment charges could be necessary.

 

*Restructuring and Impairment Charges*

 

In2002, restructuring and impairment charges were recorded in accordance withEITF (Emerging Issues Task Force) Issue 94-3, “Liability Recognition forCertain Employee Termination Benefits and Other Costs to Exit an Activity(including Certain Costs Incurred in a Restructuring),” SFAS 144, “Accountingfor the Impairment or Disposal of Long-Lived Assets” and SFAS 112, “Employers’Accounting for Postemployment Benefits.”

 

In2003, the Company applied SFAS 146, “Accounting for Costs Associated with Exitor Disposal Activities” for restructuring charges and SFAS 112, “Employers’Accounting for Postemployment Benefits”. SFAS 146 superseded EITF Issue 94-3for plans approved after December 31, 2002.

 

Duringthe fourth quarter of 2002 the Company decided to further streamline andrestructure its business. The Company incurred a restructuring charge of EUR1,370,000 representing EUR 655,000 for the abandonment of certain long-livedassets, EUR 550,000 for the termination of employee contracts and EUR 165,000for permanently vacated leasehold facilities. During the fourth quarter of 2002the Company recorded an impairment related to certain components of itsERP-software solution primarily as a result of the streamlining andrestructuring of the Company. Total losses incurred in connection with thewrite down of assets were EUR 1,019,000 of which EUR 655,000 is included in therestructuring charge.

 

Duringthe second quarter of 2003 the Company implemented additional measures toreduce its costs in anticipation of lower revenues. The Company terminated 43of its 373 employees and, as a result, incurred a restructuring charge of EUR1,281,000 in connection with related expenses in the second quarter of 2003. AtDecember 31, 2003, the remaining restructuring provision was EUR 205,000which is expected to be paid during 2004.

 

TheCompany and its subsidiaries lease their current facilities under operatingleases that expire at various dates through the year 2007. At December 31,2003, the Company has permanently vacated a portion of its leased facilities inVianen, for which management has recorded a reserve of approximately EUR485,000.

 

18

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

 

Theconsolidated financial statements of the Company for fiscal year 2001 have beenreclassified to reflect the effects of the disposal of the Belgian subsidiaryas a discontinued operation. Net revenues, costs and expenses, assets andliabilities and cash flows associated with the discontinued operations havebeen excluded from the respective captions in the accompanying consolidatedbalance sheets, statements of operations and statements of cash flows.

 

**Summary financial and other operating data**

(inthousands)

 
|                                                      |   | **Year Ended  December 31,** |   |
|-----------------------------------------------------------|--------|-----------------------------------|--------|
|                                                      |   | **2001**                          |   | **2002** |   | **2003** |   |
|                                                      |   | **EUR**                           |   | **EUR** |   | **EUR** |   |
|                                                      |   |                              |   |   |   |   |   |
| Net revenues                                              |   | 110,874                           |   | 96,373 |   | 80,371 |   |
| Gross profit                                              |   | 19,081                            |   | 16,935 |   | 14,110 |   |
|                                                      |   |                              |   |   |   |   |   |
| Sales and marketing expense                               |   | 9,743                             |   | 9,777 |   | 8,550 |   |
| General and administrative expense                        |   | 4,658                             |   | 5,660 |   | 3,654 |   |
| Goodwill amortization                                     |   | 189                               |   | — |   | — |   |
| Restructuring charge                                      |   | —                            |   | 1,370 |   | 1,281 |   |
| Total operating expenses                                  |   | 14,590                            |   | 16,807 |   | 13,485 |   |
|                                                      |   |                              |   |   |   |   |   |
| Operating income from continuing operations               |   | 4,491                             |   | 128 |   | 625 |   |
|                                                      |   |                              |   |   |   |   |   |
| Net income (loss) from continuing  operations             |   | 4,246                             |   | (520 | ) | 442 |   |
|                                                      |   |                              |   |   |   |   |   |
| Net income (loss) from discontinued  operations           |   | (1,005                            | )      | — |   | — |   |
|                                                      |   |                              |   |   |   |   |   |
| Net income (loss)                                         |   | 3,241                             |   | (520 | ) | 442 |   |
|                                                      |   |                              |   |   |   |   |   |
| Net income (loss) per share from continuing  operations   |   | 0.10                              |   | (0.02 | ) | 0.01 |   |
| Net income (loss) per share from  discontinued operations |   | (0.03                             | )      | — |   | — |   |
| Total net income (loss) per share                         |   | 0.07                              |   | (0.02 | ) | 0.01 |   |

 

19

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**Summary financial data as a percentage of total netrevenues**

(inpercentages)

 
|                                            |   | **Year Ended  December 31,** |   |
|-------------------------------------------------|--------|-----------------------------------|--------|
|                                            |   | **2001**                          |   | **2002** |   | **2003** |   |
|                                            |   | **EUR**                           |   | **EUR** |   | **EUR** |   |
|                                            |   |                              |   |   |   |   |   |
| Net revenues                                    |   | 100.0                             | %      | 100.0 | % | 100.0 | % |
| Gross profit                                    |   | 17.2                              | %      | 17.6 | % | 17.6 | % |
|                                            |   |                              |   |   |   |   |   |
| Sales and marketing expense                     |   | 8.8                               | %      | 10.1 | % | 10.6 | % |
| General and administrative expense              |   | 4.2                               | %      | 5.9 | % | 4.5 | % |
| Goodwill amortization                           |   | 0.2                               | %      | — |   | — |   |
| Restructuring charge                            |   | —                            |   | 1.4 | % | 1.6 | % |
| Total operating expenses                        |   | 13.2                              | %      | 17.4 | % | 16.7 | % |
|                                            |   |                              |   |   |   |   |   |
| Operating income from continuing operations     |   | 4.0                               | %      | 0.1 | % | 0.8 | % |
|                                            |   |                              |   |   |   |   |   |
| Net income (loss) from continuing  operations   |   | 3.8                               | %      | (0.5 | )% | 0.5 | % |
|                                            |   |                              |   |   |   |   |   |
| Net income (loss) from discontinued  operations |   | (0.9                              | )%     | — |   | — |   |
|                                            |   |                              |   |   |   |   |   |
| Net income (loss)                               |   | 2.9                               | %      | (0.5 | )% | 0.5 | % |

 

20

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**Results of operations in 2003**

 

TheCompany’s consolidated statement of operations in 2003 reflected net revenuesof EUR 80.4 million, operating income of EUR 0.6 million and a net income ofEUR 0.4 million.

 

The2003 results included a restructuring charge of EUR 1.3 million relating to thetermination of employee contracts, of which EUR 1.1 million was paid in 2003.The Company expects to make additional payments of approximately EUR 0.2million in the first half of 2004. The Company implemented additional costreduction measures in the second quarter of 2003 in response to lower thanexpected levels of net revenues in the first half of 2003. As a result of thisrestructuring, the Company’s annual fixed costs 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.

 

Asa result of the Company’s positive cash flow of EUR 1.9 million in 2003, theCompany’s cash balance increased to EUR 6.2 million at December 31, 2003.The December 31, 2003 balance sheet shows shareholders’ equity of EUR 2.7million, or 13% of total assets.

 

**Results of operations in 2002**

 

TheCompany’s consolidated statement of operations in 2002 reflected net revenuesof EUR 96.4 million, operating income of EUR 0.1 million and a net loss of EUR0.5 million.

 

The2002 results included a EUR 450,000 charge for expected future losses relatedto leasehold facilities permanently vacated and a EUR 400,000 provision for twolegal claims against the Company. These charges were reflected in 2002 generaland administrative expense.

 

Furthermorethe Company incurred a restructuring charge of EUR 1,370,000 to furtherstreamline and restructure the Company. Legally, financially andorganizationally, the Company’s three former divisions (Systems & Networks,Services and Software & Systems Integration) were integrated into oneorganization with a Systems business and Services business.

 

Therestructuring charge of EUR 1,370,000 represents:

 

(i)                                     EUR 655,000 relating to the abandonment ofcertain long-lived assets (at net book value upon abandonment),

 

(ii)                                  EUR 165,000 relating to leasehold facilitiespermanently vacated and

 

(iii)                               EUR 550,000 relating to the termination ofemployee contracts.

 

Therestructuring charges incurred in 2002 were financed out of working capital in2003.

 

Asa result of the Company’s positive cash flow of EUR 3.2 million in 2002, TripleP had a cash balance of EUR 4.3 million as of December 31, 2002. TheDecember 31, 2002 balance sheet showed shareholders’ equity of EUR 2.5million, or 11% of total assets.

 

21

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**Discussion and analysis of results of operations: 2003compared with 2002**

 

**Results of operations**

 

**Net revenues**

(inmillions)

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

 

## **Gross profit / gross margin**

(inmillions)

 
|         |   | **Year Ended  December 31,** |   |
|--------------|--------|-----------------------------------|--------|
| **Activity** |   | **2002**                          |   | **2003** |   |
|         |   | **EUR**                           |   | **%** |   | **EUR** | ** ** | **%** | ** ** |
| 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*

 

Netrevenues in 2003 were EUR 80.4 million compared to EUR 96.4 million in 2002, adecrease of EUR 16.0 million or 17%. This decrease in net revenue was primarilydue to a decrease in net revenues by EUR 13.4 million from the Dutch Departmentof Justice, one of the Company’s major customers. The continued difficulteconomic climate forced the Dutch government to implement a cost reductionprogram at the Department of Justice in 2003 that has led to postponement orcancellation of major investments in ICT-infrastructure. As a result, revenuesfrom design services, delivery and related project management and installationservices of ICT-infrastructure systems decreased substantially. However,revenues from management and maintenance services (approximately 21% of totalrevenue) increased by 4%.

 

*Gross margin*

 

Despitecontinued price pressure resulting from weak demand, the Company was able tomaintain gross margins at 17.6% in 2003 (17.6% in 2002). The decreased grossmargin on Systems revenues was offset by a change in the Systems and Servicessales mix. Furthermore, gross margin on Services revenues increased slightlydue to the Company’s ability to reduce operating costs, mainly by decreasingthe number of subcontracted and fixed personnel utilized at a faster rate thanthe decrease in revenues. The Company used on average 13 subcontractors in 2003compared to 32 in 2002.

 

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**Operating expenses**

(inmillions)

 
|                               |   | **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 |   |

 

**Operating expense as percentage of revenues**

(inpercentages)

 
|                               |   | **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*

 

Salesand marketing expense was EUR 8.6 million in 2003. In 2002 this expense was EUR9.8 million. This decrease is primarily due to a decrease in the number ofemployees resulting from the implementation of the 2003 restructuring program.As a percentage of net revenues, sales and marketing expense increased from10.1% to 10.6% due primarily to the decrease in overall revenues.

 

*General and administrative expense*

 

Generaland administrative expense was EUR 3.6 million in 2003. In 2002 this expensewas EUR 5.6 million. This decrease is primarily a result of EUR 0.9 millioncharges in 2002 related to leasehold facilities permanently vacated and anadditional provision relating to two legal proceedings originating before 2002.This decrease was also due to a decrease in the number of employees resultingfrom the implementation of the 2003 restructuring program. As a percentage ofnet revenues, general and administrative expense decreased from 5.9% to 4.5%.

 

*Restructuring charge*

 

Inthe second quarter of 2003, the Company implemented additional cost reductionmeasures in response to lower than expected levels of net revenues in the firsthalf of 2003. In the second quarter of 2003 the Company terminated theemployment of 43 of its 373 employees and, as a result, recorded EUR 1.3million restructuring expense of which EUR 1.1 million has been paid in 2003.As a result of these additional measures, the Company’s annual expenses areexpected to decrease by approximately EUR 2.5 million which is expected to befully reflected in operating results commencing in the second quarter of 2004.The implementation of the second quarter 2003 restructuring was mainlycompleted at year end 2003. The

 

23

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Companyexpects to make additional payments of approximately EUR 0.2 million in thefirst half of 2004 relating to this restructuring plan.

 

*Other expense, net*

 

Netother expense decreased from EUR 0.6 million in 2002 to EUR 0.2 million in 2003due primarily to decreased interest expense in 2003. This was due primarily tothe positive cash flows of EUR 3.2 million in 2002 (mainly in the last quarter)and EUR 1.9 million in 2003 which led to repayment of short term creditfacilities.

 

*Provision for income taxes*

 

Dueto the availability of net operating losses (‘NOL’s’), the Company incurred noincome tax expense in either 2002 or 2003. As of December 31, 2003, theCompany has total NOL’s of approximately EUR 25.3 million (tax effect EUR 8.7million). The Company recorded a deferred tax asset of EUR 0.6 million as itexpects that it is more likely than not that this portion of the NOL’s will berealized.

 

**Cash flows**

 

Netcash provided by continuing operations was EUR 5.3 million and EUR 2.7 millionin 2002 and 2003, respectively. Net cash provided by continuing operations wasimpacted by an increase in net income of EUR 1.0 million but offset by adecrease of non cash expenses by EUR 2.9 million and a decrease of cash flowfrom working capital management by EUR 0.7 million compared to 2002.

 

Netcash used in investing activities of continuing operations was EUR 1.4 millionand EUR 0.7 million in 2002 and 2003, respectively. The lower cash used ininvesting activities is primarily due to a decrease in net investments inproperty and equipment as a result of the fact that a major portion of 2002investments were related to an ERP-project that was completed in 2002.

 

Netcash used in financing activities of continuing operations was EUR 1.0 millionand EUR 0.5 million in 2002 and 2003, respectively. The higher cash used infinancing activities in 2002 was primarily related to the payment of the finalinstallment of a 2001 preferred dividend to the holders of then outstandingpreferred shares.

 

Netcash flow of discontinued operations was EUR 0.4 million and EUR 0.0 million in2002 and 2003, respectively. The 2002 cash flow from discontinued operationswas primarily related to the sale in 2002 of assets and liabilities related todiscontinued operations.

 

24

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**Discussion and analysis of results of operations: 2002compared with 2001**

 

**Overview of results of operations by division**

 

UntilDecember 31, 2002, Triple P organized its business in three divisions:Systems & Networks, Services, and Software & Systems Integration. As ofJanuary 1, 2003 these three divisions were integrated into a singleorganization with a Systems and Services business.

 

Thefollowing tables illustrate the net revenues and operating income of theCompany’s divisions for 2002 and 2001.

 

## **Net revenues**

(inmillions)

 
|                               |   | **Year Ended  December 31,** |   |
|------------------------------------|--------|-----------------------------------|--------|
| **Division**                       |   | **2001**                          |   | **2002** |   |
|                               |   | **EUR**                           |   | **EUR** |   |
| Systems & Networks             |   | 79.1                              |   | 66.4 |   |
| Services                           |   | 26.0                              |   | 24.9 |   |
| Software & Systems Integration |   | 5.8                               |   | 5.1 |   |
| Total Company                      |   | 110.9                             |   | 96.4 |   |

 

**Operating income (loss)**

(inmillions)

 
|                               |   | **Year Ended  December 31,** |   |
|------------------------------------|--------|-----------------------------------|--------|
| **Division**                       |   | **2001**                          |   | **2002** |   |
|                               |   | **EUR**                           |   | **EUR** |   |
| Systems & Networks             |   | 1.4                               |   | 0.3 |   |
| Services                           |   | 3.3                               |   | 3.0 |   |
| Software & Systems Integration |   | 0.2                               |   | (0.2 | ) |
| Other                              |   | (0.4                              | )      | (3.0 | ) |
| Total Company                      |   | 4.5                               |   | 0.1 |   |

 

Operatingincome of the Systems & Networks Division dropped from EUR 1.4 million in2001 to EUR 0.3 million in 2002, a decrease of EUR 1.1 million. This decreasein operating income was primarily due to the difficult overall marketconditions during 2002 that have led many companies, based on their own disappointingprofits, to postpone or cancel major investments in ICT-infrastructure. As aresult, revenues and gross profit from the design services and delivery ofICT-infrastructure systems decreased substantially.

 

Operatingincome of the Services Division decreased from EUR 3.3 million in 2001 to EUR3.0 million in 2002. This decrease in operating income was primarily due to adecrease in revenues from the installation and project management servicesclosely related to the decrease in delivery of ICT-

 

25

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infrastructuresystems by the Systems & Networks Division. However, revenue frommanagement and maintenance contracts remained relatively stable.

 

Operatingincome of the Software & Systems Integration Division decreased from anincome of EUR 0.2 million in 2001 to a loss of EUR 0.2 million in 2002. Thisdecrease in operating income was primarily due to a decrease in softwareconsulting revenue in the home-care market. The Division has not succeeded inoffsetting the cancellation of the software development contract with the TCMgroup of 36 home-care institutions in 2002 by development of new business underdifficult market conditions. In 2000 the Company sold the source code of itssoftware to TCM effective January 1, 2002. In addition the developmentcontract with TCM had been terminated per January 1, 2002.

 

**Overview of results of operations by activity**

 

*Net revenues and gross profits*

 

Thefollowing tables illustrate the net revenues and gross profit contribution ofthe Company’s principal activities for 2002 and 2001.

 

## **Net revenues**

(inmillions)

 
|         |   | **Year Ended  December 31,** |   |
|--------------|--------|-----------------------------------|--------|
| **Activity** |   | **2001**                          |   | **2002** |   |
|         |   | **EUR**                           |   | **%** |   | **EUR** |   | **%** |   |
| Systems      |   | 77.4                              |   | 69.8 |   | 67.6 |   | 70.2 |   |
| Services     |   | 33.4                              |   | 30.1 |   | 28.8 |   | 29.8 |   |
| Software     |   | 0.1                               |   | 0.1 |   | — |   | — |   |
| Total        |   | 110.9                             |   | 100.0 |   | 96.4 |   | 100.0 |   |

 

## **Gross profit / gross margin**

(inmillions)

 
|         |   | **Year Ended  December 31,** |   |
|--------------|--------|-----------------------------------|--------|
| **Activity** |   | **2001**                          |   | **2002** |   |
|         |   | **EUR**                           |   | **%** |   | **EUR** |   | **%** |   |
| Systems      |   | 9.1                               |   | 11.8 |   | 8.1 |   | 12.0 |   |
| Services     |   | 10.0                              |   | 29.9 |   | 8.8 |   | 30.7 |   |
| Software     |   | 0.0                               |   | 85.9 |   | — |   | — |   |
| Total        |   | 19.1                              |   | 17.2 |   | 16.9 |   | 17.6 |   |

 

*Net revenues*

 

Netrevenues in 2002 were EUR 96.4 million compared to EUR 110.9 million in 2001, adecrease of EUR 14.5 million or 13%. This decrease in net revenue was primarilydue to the current difficult market conditions that have led many companies,based on their own disappointing profits, to postpone or cancel majorinvestments in ICT infrastructure. As a result, revenues from design services,delivery and related project management and installation services ofICT-infrastructure systems decreased substantially.

 

26

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However,revenues from management and maintenance services (approximately 16% of totalrevenue) remained relatively stable.

 

*Gross margin*

 

Grossmargin in 2002 was 17.6% compared to 17.2% in 2001.The Company was able toincrease its gross margin on Systems as well as Services revenues despitecontinued price pressure resulting from weak demand. This was due to theCompany’s ability to reduce its operating costs, mainly by reducing the numberof subcontracted and fixed personnel utilized, at a faster rate than thedecrease in revenues. In 2002 the Company used on average 32 subcontractorscompared to 70 in 2001.

 

**Operating expenses**

(inmillions)

 
|                               |   | **Year Ended  December 31,** |   |
|------------------------------------|--------|-----------------------------------|--------|
|                               |   | **2001**                          |   | **2002** |   |
|                               |   | **EUR**                           |   | **EUR** |   |
| Sales and marketing expense        |   | 9.7                               |   | 9.8 |   |
| General and administrative expense |   | 4.7                               |   | 5.6 |   |
| Goodwill amortisation              |   | 0.2                               |   | — |   |
| Restructuring charge               |   | —                            |   | 1.4 |   |
| Total operating expense            |   | 14.6                              |   | 16.8 |   |

 

**Operating expenses as percentage of revenues**

(inpercentages)

 
|                               |   | **Year Ended  December 31,** |   |
|------------------------------------|--------|-----------------------------------|--------|
|                               |   | **2001**                          |   | **2002** |   |
|                               |   | **%**                             |   | **%** |   |
| Sales and marketing expense        |   | 8.8                               |   | 10.1 |   |
| General and administrative expense |   | 4.2                               |   | 5.9 |   |
| Goodwill amortization              |   | 0.2                               |   | — |   |
| Restructuring charge               |   | —                            |   | 1.4 |   |
| Total operating expense            |   | 13.2                              |   | 17.4 |   |

 

*Sales and marketing expense*

 

Salesand marketing expense remained largely unchanged at EUR 9.8 million in 2002. In2001 this expense was EUR 9.7 million. As a percentage of net revenues, salesand marketing expense increased from 8.8% to 10.1% due primarily to thedecrease in overall revenues.

 

*General and administrative expense*

 

Generaland administrative expense was EUR 5.6 million in 2002. In 2001 this expensewas EUR 4.7 million. This increase is primarily a result of EUR 0.9 millioncharges in 2002 related to leasehold facilities permanently vacated and theadditional provisions relating to two legal proceedings originating before2002. As a percentage of net revenues, general and administrative expenseincreased from 4.2% to 5.9% (4.9% adjusted for one time items).

 

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*Goodwill*

 

Allgoodwill of the Company had been fully amortized by the end of 2001.

 

*Restructuring charge*

 

Managementfurther streamlined and restructured the Company in the last quarter of 2002.Legally, financially and organizationally, the Company’s three former divisionswere integrated into one organization, Triple P Nederland B.V.. As a result ofthis restructuring, the Company incurred a restructuring charge of EUR 1.4million representing EUR 0.7 million for the write down of unused assets, EUR0.5 million for the termination of employee contracts and EUR 0.2 million forleasehold facilities permanently vacated. As a result of these measures, theCompany’s annual expenses decreased by approximately EUR 1.5 million commencingin fiscal year 2003.

 

*Other expense, net*

 

Netother expense increased from EUR 0.2 million in 2001 to EUR 0.6 million in 2002due primarily to increased interest expense in the first seven months of 2002compared to 2001. This was due primarily to the financial restructuring inAugust 2001, in particular the withdrawal of all outstanding preferredshares for an aggregate EUR 11.8 million and the corresponding decrease in cashbalances and increase in net interest expense. The Company financed thiswithdrawal with available surplus cash and by borrowings from its revolvingcredit facilities.

 

*Provision for income taxes*

 

Dueto the availability of net operating losses (‘NOL’s’), the Company incurred noincome tax expense in either 2001 or 2002.

 

**Cash flows**

 

Netcash provided by continuing operations was EUR 4.9 million and EUR 5.3 millionin 2001 and 2002, respectively. Net cash provided by continuing operations wasimpacted by a decrease in net income of EUR 4.8 million but partially offset bya decrease of investments in net working capital by EUR 3.9 million, inparticular accounts payable and to a lesser extent accounts receivable. Inaddition non-cash expenses increased by EUR 1.3 million.

 

Netcash provided by (used in) investing activities of continuing operations wasEUR 0.4 million and EUR (1.4) million in 2001 and 2002, respectively. Theincrease in net cash used in investing activities is primarily due to anincrease in net investments in property and equipment as a result the fact thata major portion of 2001 investments were financed by a capital lease. TheCompany did not enter into any such financing in 2002. Gross investments inproperty and equipment were EUR 1.4 million in both 2001 and 2002.

 

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Netcash used in financing activities of continuing operations was EUR 12.6 millionand EUR 1.1 million in 2001 and 2002, respectively. The higher cash used infinancing activities in 2001 was primarily related to the Company’s financialrestructuring, particularly the withdrawal of all outstanding preferred sharesfor EUR 11.3 million cash.

 

Netcash flow of discontinued operations was EUR (1.0) million and EUR 0.4 millionin 2001 and 2002, respectively. The increased cash flow from discontinuedoperations was primarily related to the sale in 2002 of assets and liabilitiesrelated to discontinued operations.

 

**Liquidity and Capital Resources**

 

TheCompany had cash and cash equivalents (including restricted cash) of EUR 1.1million, EUR 4.3 million and EUR 6.2 million at December 31, 2001, 2002and 2003, respectively, and working capital of EUR 2.9 million, EUR 1.9 millionand EUR 2.0 million at December 31, 2001, 2002 and 2003, respectively.

 

Theincrease in the Company’s cash position in 2003 is primarily due to positiveoperating profits and related positive cash flow, as well as working capitalmanagement.

 

TheCompany had no short-term borrowings at December 31, 2001, 2002 and 2003.

 

TheCompany has a euro denominated revolving credit facility agreement with IFNFinance B.V. (ABN-AMRO) whereby the Company may borrow up to 60% of eligibleaccounts receivable with a maximum of EUR 6 million. Borrowings under thisfacility are secured by the Company’s accounts receivable. Furthermore theCompany agreed on a restriction of dividend distributions to the holders ofcommon stock when equity is less than 15% of total assets. Interest on suchborrowings accrues at the European Central Bank’s discount rate plus 1.5% witha minimum of 4.25% and is payable monthly. In addition, the Company pays abasic fee of 0.04% of total net revenues including VAT. This credit agreement,which took effect May 18, 2000, was renewed in May 2001 for a period of twoyears with an automatic renewal for a period of two years. The agreement may beterminated at the end of each period by either party upon expiration of a90-day notice period. The current period ends at May 2005. As of December 31,2003 no amounts were outstanding under this facility.

 

TheCompany does not engage in hedging activities nor has it entered into anyoff-balance-sheet transactions, arrangements or other relationships withunconsolidated entities or persons.

 

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Thefollowing table summarizes the Company’s obligations to make future paymentsunder contracts:

 

# **ContractualObligations Due by Period at December 31, 2003**

(in thousands of euros)

 
| **Contractual Obligations**        |   | **Total** |   | **<1 year** |   | **1-5 year** |   | **>5 year** |   |
|------------------------------------|--------|-----------|--------|----------------|--------|--------------|--------|----------------|--------|
| Loan                               |   | 234       |   | 114            |   | 120          |   | —         |   |
| Capital leases (1)                 |   | 208       |   | 208            |   | —       |   | —         |   |
| Operating leases (2)               |   | 6,222     |   | 3,021          |   | 3,201        |   | —         |   |
| Total Contractual Cash Obligations |   | 6,664     |   | 3,343          |   | 3,321        |   | —         |   |

 

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(1)Capital leases relate to the Company’s ERP-system.

(2)Operating leases relate to the Company’s building lease and car leasecontracts.

 

Thefollowing table summarizes the Company’s bank guarantees and their expirationdates:

 

# **Amountof Bank Guarantees by Expiration Period at December 31, 2003**

(in thousands of euros)

 
|            |   | **Total** |   | **<1 year** |   | **1-5 year** |   | **>5 year** |   |
|-----------------|--------|-----------|--------|----------------|--------|--------------|--------|----------------|--------|
| Bank Guarantees |   | 947       |   | 741            |   | 196          |   | 10             |   |

 

Thebank guarantees provided by the Company’s bank on behalf of the Company and itssubsidiaries to third parties relate to bank guarantees issued to the lessor ofthe Company’s leasehold facilities and a bank guarantee issued to a customer tosecure amounts prepaid to the Company. In connection with these bank guaranteesamounting to EUR 947,000, the Company holds restricted cash to an amount of EUR462,000 at the bank and the remaining amount of EUR 485,000 is deducted fromthe maximum borrowings under the Company’s credit facilities at the bank. Noliability is accrued in connection with these bank guarantees as none aredeemed probable.

 

TheCompany believes that its cash position at December 31, 2003, itsinternally generated cash flow in 2004 and its available bank borrowings willbe adequate to satisfy its capital needs for at least the next twelve months.If internally generated cash is not sufficient to capital needs, management ofthe Company believes it is possible to reduce operating expenses and capitalexpenditures to compensate for this cash shortfall and to draw amounts underthe existing credit facility agreement.

 

TheCompany may from time to time consider acquisitions of complementarybusinesses, products or technologies, which may require additional financing.In addition, continued growth in the Company’s business or the occurrence ofadditional operating losses may require the Company to raise additionalcapital. Additional capital may not be available to the Company if and whenneeded or on acceptable terms.

 

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TheCompany plans limited capital expenditures for 2004.

 

TheCompany is party to certain legal proceedings, none of which the Companybelieves will have a material impact on the Company’s business or futureresults of operations or financial condition. Management has established areserve for these legal proceedings. See ‘Legal Proceedings’ in item 8 and note6 of ‘Notes to Consolidated Financial Statements’ in item 18 of this AnnualReport on Form 20-F.

 

## **Trend Information**

 

TripleP is focused on marketing systems and network products and consulting, projectmanagement and implementation services as well as operationalICT-infrastructure management and maintenance services to the DutchICT-business market. Most research analysts expect these market segments togrow structurally in the coming years. We believe that the Dutch ICT-businessmarket will continue to be difficult, particularly in the first half of 2004.The difficult and uncertain economic climate generally and continueddifficulties in the ICT-market are such that the Company cannot provide anyspecific guidance as to future results.

 

**Recent Accounting Pronouncements**

 

InJune 2002, the FASB issued SFAS 146, “Accounting for Costs Associated withExit or Disposal Activities.” This statement defines the accounting andreporting for costs associated with exit or disposal activities and iseffective for exit or disposal activities that are initiated afterDecember 31, 2002, with early application encouraged. SFAS 146 supersedesEmerging Issues Task Force (EITF) Issue 94-3, “Liability Recognition forCertain Employee Termination Benefits and Other Costs to Exit an Activity.” Theadoption of this standard did not have a material impact on the Company’sfinancial position, result of operations or cash flows.

 

InNovember 2002, the FASB issued FAS Interpretation No. 45 (“FIN 45”),“Guarantor’s Accounting and Disclosure Requirements for Guarantees, IncludingIndirect Guarantees of Indebtedness of Others.” The disclosure provisions ofFIN 45 are effective for financial statements of interim or annual periods thatend after December 15, 2002. The provisions for initial recognition andmeasurement are effective on a prospective basis for guarantees that are issuedor modified after December 31, 2002, irrespective of a guarantor’syear-end. The adoption of this standard did not have an impact on the Company’sfinancial position, result of operations or cash flows.

 

InNovember 2002, the Emerging Issues Task Force (“EITF”) reached a consensuson Issue 00-21, “Revenue Arrangements with Multiple Elements.” The provisionsof EITF issue 00-21 addresses certain aspects of accounting for arrangementsthat include multiple products or services. Accordingly, the application ofEITF 00-21 may impact the timing of revenue recognition as well as theallocation of revenues between products and services. The adoption of EITFissue 00-21 for transactions entered into

 

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afterJuly 1, 2003 did not have a material impact on the Company’sfinancial position, result of operations or cash flows as the Companypreviously accounted for individual units of its multiple element arrangementsat their respective fair values.

 

In May 2003, the Emerging Issues Task Force (‘EITF”) reached aconsensus on Issue 03-5, “Applicability of AICPA Statement of Position 97-2,Software Revenue Recognition to Non-Software Deliverables in an ArrangementContaining More-Than-Incidental Software.” The FASB ratified this consensus inAugust 2003. EITF Issue 03-5 affirms that AICPA Statement of Position 97-2applies to non-software deliverables, such as hardware, in an arrangement ifsoftware is essential to the functionality of the non-software deliverables.The adoption of EITF Issue 03-5 did not have a material impact on the Company’sfinancial position, result of operations and cash flows.

 

In January 2003, the FASB issued Interpretation No. 46,‘‘Consolidation of Variable Interest Entities” (FIN 46 or Interpretation),which was subsequently revised in December 2003.  Among other things, FIN 46, as revised, clarifies existing accountingrules governing the circumstances under which a company should consolidateanother entity. FIN 46, as revised, requires “variable interest entities”, asdefined, to be consolidated by a company if that company is subject to amajority of expected losses of the entity or is entitled to receive a majorityof expected residual returns of the entity, or both. The company that isrequired to consolidate a variable interest entity is referred to as theentity’s primary beneficiary. The Interpretation also requires certaindisclosures about variable interest entities that a company is not required toconsolidate, but in which it has a significant variable interest.

 

The consolidation and disclosure requirements apply immediately tovariable interest entities created after January 31, 2003. For allvariable interest entities created prior to February 1, 2003, FIN 46, asrevised, is effective for periods ending after March 15, 2004, except forentities that are considered special purpose entities, to which the provisionsapply as of December 31, 2003.

 

The Company does not have any special purpose entities within the scopeof FIN 46, as revised. The Company is not the primary beneficiary of anyvariable interest entities created after January 31, 2003, nor does theCompany expect the final adoption of the Interpretation to have a materialimpact on its financial position, cash flows, or results of operations.

 

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Item 6

**Directors, Senior Management and Employees**

 

**Directors and Officers**

 

TheDirectors and Senior Management of the Company in 2003 and 2004 untilFebruary 29, and their ages (as of December 31, 2003), are asfollows:

 
| **Name**             |   | **Age** |   | **Position(s)**                                                                      |
|----------------------|--------|---------|--------|--------------------------------------------------------------------------------------|
| A.H.M.  Stam(1)      |   | 59      |   | Chairman  Supervisory Board                                                          |
| H.C.A.  Groenen(1)   |   | 59      |   | Member  Supervisory Board                                                            |
| F.  Khaleghi Yazdi   |   | 51      |   | Member  Supervisory Board (as of July 9, 2003)                                  |
|                 |   |    |   |                                                                                 |
| R.E.  Pijselman      |   | 36      |   | Chief  Executive Officer (until July 1, 2003)                                   |
| H.  Crijns           |   | 60      |   | Interim  Chief Executive Officer (as of June 18, 2003) and Director of Services |
| M.P.J.  van den Oord |   | 35      |   | Chief  Financial Officer (until April 1, 2004)                                  |
| P.  Blokhuis         |   | 35      |   | Concern  Controller (as of January 5, 2004)                                     |
| R.P.  van den Bunt   |   | 54      |   | Director  of Sales (until October 30, 2003)                                     |
| W.J.  Scholten       |   | 43      |   | Director  of Sales (as of February 1, 2004)                                     |

 

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(1)Member of Audit Committee

 

A.H.M.Stam was appointed as Chairman of the Supervisory Board in May 2002. From 1972to 1984, 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. Stam worked as interim manager for various companies. From 1993 to2003, Mr. Stam has served as Chief Executive Officer of Arboned, a Dutchcompany in the healthcare market. Until January 1, 2004 Mr. Stam heldBoard positions at VNO/NCW and BOA as well as Advisory Board positions at CapGemini Ernst & Young and TNO. Furthermore, Mr. Stam holds variousSupervisory Board positions at Bouwcenter Organisatie B.V. (Woerden), SyntecB.V. (Almere), BMG B.V. (Tilburg), Leeuwendael B.V. (Rijswijk), UtrechtseJuristen Groep B.V. (Utrecht) and Cyclo Media International N.V. (Waardenburg).

 

H.C.A.Groenen was appointed as Supervisory Board member in May 2002. Since 1967, Mr.Groenen has held various positions at NMB-Heller, a Dutch bank. From 1973 to1998, Mr. Groenen was Chief Executive Officer of NMB-Heller, and from 1990 to2003, he has been Chief Executive Officer of NMB-Heller Holding N.V. Mr.Groenen holds Board positions at PL & Partners Beheer (Doorn, TheNetherlands) and Herbel Beleggingen N.V. (Rotterdam, The Netherlands).

 

F.Khaleghi Yazdi was appointed as Supervisory Board member in July 2003.From 1983 to 1987, Mr. Khaleghi was Director at HCS Technology B.V. From1989 to 1997, Mr. Khaleghi was Chief Executive Officer of Triple P N.V. Since1997, Mr. Khaleghi worked as a private investor and held several

 

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advisorships.Mr. Khaleghi is Managing Director of TPM Europe Holding B.V., his personalholding company and does not hold any other directorships.

 

R.E.Pijselman joined the Company in 2002 as Chief Executive Officer. Previously Mr.Pijselman served as Vice President for Active Voice, a subsidiary of NEC, wherehe was responsible for all activities in Europe, Middle East and Asia. WithActive Voice Mr. Pijselman held several management positions since 1994. Mr.Pijselman left the Company on July 1, 2003.

 

H.Crijns joined the Company in November 1999 as Director of the ServicesDivision and was appointed Director of Services in 2003. The Supervisory Boardappointed him interim Chief Executive Officer in 2003, after Mr. Pijselman leftthe Company. 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 Oord joined the Company in 1997 as Controller of Triple P NederlandB.V. and was subsequently appointed Concern Controller in 1999 and ChiefFinancial Officer in 2002. From 1992 to 1997, Mr. van den Oord worked as apublic accountant for Arthur Andersen. Mr. van den Oord is a certified publicaccountant. Mr. Van den Oord left the Company on April 1, 2004.

 

P.Blokhuis joined the Company in 2000 as Manager of the IT- Management Center,one of the Company’s Services units, and was subsequently appointed Controllerin 2002 and Concern Controller in 2004. From 1995 to 2000, Mr. Blokhuis heldvarious management positions at Euroveen B.V., a production and wholesalecompany.

 

R.P.van den Bunt joined the Company in 1989 as Director of the Office Solutionsbusiness unit and was appointed Director of the Systems & Networks Divisionin 1999 and Director of Sales in 2003. From 1976 to 1989, Mr. van den Bunt heldvarious sales management positions at Wang Nederland B.V.

 

W.J.Scholten joined the Company in 2004 as Director of Sales. From 1997 to 2004 Mr.Schloten worked as general manager at Business Objects B.V., a software companyin the Netherlands. Previously, Mr. Scholten worked for Digital Equipment B.V.where he held various sales and sales management positions.

 

**Compensation**

 

Theamounts of cash compensation of the Supervisory Board members are determinedand approved by the shareholders at the general meeting of shareholders. Theremunerations on a yearly basis are EUR 22,689 for the chairman and EUR 13,613for other members. These remunerations have accordingly been paid in cash tothe Supervisory Board members for the year ended December 31, 2003, exceptfor Mr. Khaleghi. Mr. Khaleghi provides advisory and management services at arate of EUR 2,000 per day to

 

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strengthenthe Company’s Management Board on an interim basis. The amount of cashcompensation of Mr. Khaleghi paid and accrued for services in allcapacities for the year ending December 31, 2003 was EUR 279,000.

 

Theaggregate amount of cash compensation of the Chief Executive Officer and theofficers, including former (interim) Chief Executive Officer and officers, ofthe Company as a group paid or accrued for services in all capacities for theyear ended December 31, 2003, was approximately EUR 1,210,000 includingcontract termination benefits of approximately EUR 629,000. As ofDecember 31, 2003, the Chief Executive Officer and the officers as a groupheld options to purchase 288,037 common shares. Certain executive officers are eligibleto receive bonuses pursuant to a plan which establishes bonus targets basedupon the Company’s sales, gross margin, operating income and accountsreceivable balances.

 

TheCompany set aside an aggregate of EUR 134,000 in 2003 to provide pension, retirementor other benefits for these officers as a group.

 

**Board Practices**

 

Thefollowing table sets forth information regarding the incumbency of the membersof the Company’s Supervisory 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,  2006 |

 

TheCompany’s Supervisory Board members Mr. Stam and Mr. Groenen 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, and theCompany is currently conducting a search for an additional member of the AuditCommittee.

 

TheAudit Committee responsibilities are formalized in an Audit Committee Charterwhich will be reviewed and adjusted in accordance with the requirements ofNasdaq before July 31, 2005.

 

Nasdaqrules provide that Nasdaq may provide exemptions from the Nasdaq corporategovernance standards to a foreign issuer when those standards are contrary to alaw, rule or regulation of any public authority exercising jurisdiction oversuch issuer or contrary to generally accepted business practices in theissuer’s country of domicile. Tripe P has received from Nasdaq exemptions fromcertain Nasdaq corporate governance standards that are contrary to the laws,rules, regulations or generally accepted

 

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businesspractices of The Netherlands. These exemptions and the practices followed byTriple 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.

 

TheCompany has no service contracts with its Supervisory Board Members.

 

TheCompany has entered into indemnification agreements with its directors andofficers which provide for indemnification by the Company against any liabilityto which a director or executive officer may be subject for judgements,settlements, penalties, fines and expenses of defense (including attorneys’fees, bonds and costs of investigation), arising out of or in any way relatedto acts or omissions as a director, officer or in any other capacity in whichservices are rendered to the Company or its subsidiaries. The Company believesthat the indemnification agreements will assist the Company in attracting andretaining qualified individuals to serve as directors and executive officers.The agreements 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 securities lawsor (iii) for certain claims initiated by the officer or director. Generally,under Netherlands law a director will not be held personally liable fordecisions made with reasonable business judgement 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 US securities laws.

 

**Employees**

 

OnDecember 31, 2001, 2002 and 2003, the Company employed 446, 402 and 330full time employees, respectively. On December 31, 2002 and 2003, theCompany employed 17 and 16 temporary employees.

 

Thefollowing table sets forth the number of employees in each department onDecember 31, 2001, 2002 and 2003.

 

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**Full-TimeEquivalent Employees by Department**

 
|                         |   | **Year Ended  December 31,** |   |
|------------------------------|--------|-----------------------------------|--------|
|                         |   | **2001**                          |   | **2002** |   | **2003** |   |
| Operations                   |   | 277                               |   | 249 |   | 222 |   |
| Sales & Marketing Softwa |   | 114                               |   | 105 |   | 69 |   |
| General & Administrative |   | 55                                |   | 48 |   | 39 |   |
| Company Total                |   | 446                               |   | 402 |   | 330 |   |

 

Thedecrease in the number of full time employees by 44 in 2002 is primarily due tostreamlining of the Company to better align its expenses with anticipatedrevenue.

 

Thedecrease in the number of full time employees by 72 in 2003 is primarily due toimplementation of two formal restructuring programs, one in the fourth quarterof 2002 and one in the second quarter of 2003, due to lower than expectedrevenues. These restructuring programs included a detailed plan to terminate 29and 43 employee contracts respectively. These employees left the Company in2003.

 

UnderDutch law, employee membership in trade unions is confidential. The Company hasnever been the subject of a grievance filed by a trade union, nor has theCompany ever suffered a work stoppage. Certain corporate decisions that wouldhave a material effect on Triple P’s Dutch subsidiaries, which generatesubstantially all of its revenue, are subject to prior consent or advice fromthe Combined Works Council. The Company considers its employee relations to beexcellent.

 

**Share Ownership**

 

# **Securitiesand options held by Directors and Officers**

 

Thefollowing tables set forth the number of common shares and options to purchasecommon shares held by directors and officers on February 29, 2004.

 

**Securities**

 
| **Name**                              |   | **Securities  Held (2)** |   | **Percentage  of Class** |   |
|---------------------------------------|--------|--------------------------|--------|--------------------------|--------|
| A.H.M. Stam                           |   | 15,000                   |   | (1                       | )      |
| H.C.A. Groenen                        |   | 15,000                   |   | (1                       | )      |
| F. Khaleghi                           |   | 11,635,043               |   | 38.2                     | %      |
|                                  |   |                     |   |                     |   |
| H. Crijns                             |   | 249,537                  |   | (1                       | )      |
| M.P.J. van den Oord                   |   | 10,601                   |   | (1                       | )      |
| P. Blokhuis                           |   | 3,500                    |   | (1                       | )      |
| W.J. Scholten                         |   | 0                        |   | (1                       | )      |
| All directors and officers as a group |   | 11,928,681               |   | 39.1                     | %      |

 

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(1)                                  Less than 1%

(2)                                  Shares beneficially owned including sharesunderlying exercisable options.

 

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**Options**

 
| **Name**                              |   | **Underlying securities** |   | **Exercise  Price USD** |   | **Expiration  Date** |   |
|---------------------------------------|--------|---------------------------|--------|-------------------------|--------|----------------------|--------|
| A.H.M. Stam                           |   | 5,000                     |   | 0.7600                  |   | 05/2007              |   |
|                                  |   | 10,000                    |   | 0.3510                  |   | 01/2008              |   |
| H.C.A. Groenen                        |   | 5,000                     |   | 0.9880                  |   | 05/2007              |   |
|                                  |   | 10,000                    |   | 0.3510                  |   | 01/2008              |   |
| F. Khaleghi                           |   | —                    |   | —                  |   | —               |   |
|                                  |   |                      |   |                    |   |                 |   |
| H. Crijns                             |   | 30,000                    |   | 2.1413                  |   | 02/2004              |   |
|                                  |   | 7,500                     |   | 1.1760                  |   | 07/2005              |   |
|                                  |   | 132,037                   |   | 1.0080                  |   | 01/2006              |   |
|                                  |   | 80,000                    |   | 0.8040                  |   | 11/2007              |   |
| M.P.J. van den Oord                   |   | 5,000                     |   | 2.6650                  |   | 09/2004              |   |
| P. Blokhuis                           |   | 3,500                     |   | 1.1760                  |   | 07/2005              |   |
| W.J. Scholten                         |   | —                    |   | —                  |   | —               |   |
| All directors and officers as a group |   | 288,037                   |   |                    |   |                 |   |

 

**Stock compensation plan**

 

**1996 Stock Plan**

 

The1996 Stock Plan provides for the grant of options to employees and consultants(including officers) of the Company and its affiliates. When adopted by theshareholders of the Company in September 1995, 1,500,000 common shareswere issuable under the 1996 Stock Plan. At the 1998 general meeting ofshareholders, the shareholders voted to increase the number of common sharesissuable under the 1996 Stock Plan by 1,000,000, bringing the total common sharesavailable for stock option grants to 2,500,000. The 1996 Stock Plan willterminate in September 2005 unless terminated earlier by the ManagementBoard upon approval of the Supervisory Board. The 1996 Stock Plan may beadministered by the Management Board or Supervisory Board, or both, or by acommittee appointed by either or both Boards in a manner that satisfies thelegal requirements relating to the administration of stock plans under allapplicable laws. The 1996 Stock Plan is currently administered by theManagement Board, subject to Supervisory Board approval.

 

The1996 Stock Plan includes provisions governing options intended to qualify asincentive stock options within the meaning of Section 422 of the USInternal Revenue Code of 1986, as amended.

 

The1996 Stock Plan provides that the exercise price of options granted under thePlan shall be 100% of the average fair market value of the common shares duringa period of five trading days prior to the date of grant plus 0%, 10%, 20% or30% at the optionee’s choice. The exercise price is determined at the date ofgrant. All options under the plan are immediately exercisable. The maximum termof an option granted under the 1996 Stock Plan is five years from the date ofgrant. Resale to third parties of shares purchased

 

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throughexercise of an option granted under the 1996 Stock Plan is restricted. Only 25%of such shares may be sold in the year following the date the option wasgranted and in each of the three years following the first anniversary of thedate of grant the optionee gains the right to sell an additional 25% of theshares covered by the option.

 

Inthe event of termination of an optionee’s employment or consulting arrangement,all options that have not been exercised terminate. In the event of terminationof an optionee’s status as an employee as a result of death or disability, theoption may be exercised at any time within twelve months following the date ofdeath or disability but in no event later than the expiration date of suchoption and only to the extent that the optionee had the right to exercise theoption on the date of death or disability. In the case of death, the option maybe exercised by the optionee’s estate or by a person who has acquired the rightto exercise the option by bequest or inheritance. Rights may not be sold,pledged, assigned, hypothecated, or disposed of in any manner other than bywill or by the laws of descent or distribution and may be exercised, during thelifetime of the optionee, only by the optionee. Options to purchase anaggregate of 1,173,387 common shares under the 1996 Stock Plan were outstandingon December 31, 2003.

 

**1995 Director Option Plan**

 

The1995 Director Option Plan provides for automatic grants of stock options toSupervisory Directors of the Company. When adopted by the shareholders of theCompany in September 1995, 100,000 common shares were issuable under theDirector Plan. At the 1998 general meeting of shareholders, the shareholders votedto increase the number of shares issuable under the Director Plan by 100,000,bringing the total number of common shares issuable under the Director Plan to200,000. Each person who becomes a Supervisory Director afterSeptember 1995, other than individuals who immediately prior theretoserved as a Chief Executive Officer of the Company automatically are granted anoption to purchase 5,000 common shares of the Company upon their appointment tothe Supervisory Board (a ‘First Option’).

 

Inaddition, each Supervisory Director is automatically granted an option topurchase 5,000 common shares (a ‘Subsequent Option’) on January 1 of eachyear, provided that he or she has served on the Board for at least three monthsas of that date. At the general meeting of shareholders on May 23, 2001, theshareholders voted to increase the number of automatically granted options to10,000 a year starting on January 1, 2002. All options granted under theDirector 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

 

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optioneemay exercise his or her remaining options within 90 days of the terminationdate (or 12 months in the case of termination as a result of death ordisability), but in no event later than the expiration date of any such option.Options may not be sold or transferred other than by will or the laws ofdescent and distribution, and may be exercised during the life of the optioneeonly by the optionee. In the event of any merger, sale of assets or othertransaction involving a change in control of the Company, all repurchase rightswith respect to options outstanding under the Director Plan will immediatelylapse, and such options will remain exercisable for a period of 90 days fromthe date of change in control. Options to purchase 30,000 common shares wereoutstanding under the Director Plan on December 31, 2003. The DirectorPlan will terminate in September 2005.

 

Thefollowing table sets forth, as of December 31, 2003, (i) the total numberof options to purchase common shares outstanding under the 1995 and 1996 Plans(ii) the expiration dates of such options and (iii) the prices, in US$, atwhich such options may be exercised.

 

**Options summary at December 31, 2003**

 
|               |   | **Options  Available** |   | **Options  Outstanding** |   | **Exercise  price  of shares USD** |   | **Expiration  Dates**  |   |
|--------------------|--------|------------------------|--------|--------------------------|--------|------------------------------------|--------|------------------------|--------|
| 1996 Employee Plan |   | 2,500,000              |   | 1,173,387                |   | 0.8040 – 3.3125               |   | 01/2004 – 11/2008 |   |
| 1995 Director Plan |   | 200,000                |   | 30,000                   |   | 0.3510 – 0.9880               |   | 05/2007 – 01/2008 |   |

 

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Item 7

**Major Shareholders and Related Party Transactions**

 

**Major Shareholders**

 

Thefollowing table shows to the best of the Company’s knowledge the beneficialownership of common shares by any person known to the Company to be the ownerof more than five percent of the common shares, as of December 31, 2003:

 
| **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         | %      |

 

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

 

Themajor shareholders do not have voting rights that are different from the rightsof other shareholders.

 

Tothe best of the Company’s knowledge Mr. Khaleghi 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.

 

Tothe best of the Company’s knowledge Orange Fund decreased its holdings from4,500,000 common shares at December 31,2001 and 2002 to 2,815,600 commonshares at December 31, 2003.

 

**Related Party Transactions**

 

Exceptas described below, none of the members of the Company’s directors or officershas or has had since January 1, 2003, any interest in any transactionwhich 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 any ManagementBoard member or Supervisory Board member and the Company has not provided anyguarantee for the benefit of any such person.

 

Mr.Khaleghi provides advisory and management services at a rate of EUR 2,000 perday to strengthen the Company’s Board of Directors on an interim basis. Theamount of cash compensation of Mr. Khaleghi paid and accrued for servicesin all capacities for the year ending December 31, 2003 was EUR 279,000.

 

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Item 8

**Financial Information**

 

**Consolidated Statements and other Financial Information**

 

**Consolidated Statements**

 

Seepages F-1 through F-33 incorporated herein by reference.

 

**Legal Proceedings**

 

TheCompany is engaged as plaintiff or defendant in several lawsuits in TheNetherlands and Belgium, originating before 2002. The Company has establishedreserves of approximately EUR 850,000 relating to specific lawsuits, whichrepresent estimates of its probable liabilities with respect to these specificclaims. As this litigation may take several years to complete, future eventscould require management to make significant adjustments for revisions to theseestimates. The Company does not believe that based on current judgements andestimates the outcome in any of these lawsuits individually or in the aggregatewould have a material adverse impact on the Company’s business, future resultsof operations or financial condition.

 

**Dividend Distributions**

 

TheCompany has never paid or declared any cash dividends on its common shares anddoes not anticipate 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 agreed with theprovider of its borrowing arangements on a restriction of dividenddistributions as long as equity is less than 15% of total assets.

 

TheCompany has paid cash dividends to the holders of its preferred shares asrequired by its Articles of Association, as amended from time to time.

 

**Significant Changes**

 

Therehave been no significant changes in the Company’s business sinceDecember 31, 2003.

 

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Item 9

**The Offering and Listing**

 

TheCompany’s common shares are issuable in either registered or bearer form as theholder may elect. Registered shares may consist of either shares registeredwith the Bank of New York, the Company’s transfer agent and registrar in NewYork (respectively, the ‘New York Registered Shares’ and the ‘New York TransferAgent’), or shares registered at the Company’s offices in Vianen, TheNetherlands (the ‘Vianen Registered Shares’). New York Registered Shares andVianen Registered Shares may be evidenced by certificates printed in Englishand are registered in book-entry form. Bearer shares may be evidenced bycertificates printed in Dutch ‘k Certificates’ or ‘cf Certificates’.

 

Thetransfer of registered shares requires (i) an instrument intended for suchpurpose, (ii) except when the Company itself is a party to such legal act, thewritten acknowledgment of the transfer by the Company or, in the case of NewYork Registered Shares, the New York Transfer Agent on behalf of the Companyand (iii) delivery of the share certificates, if any, to the Company or the NewYork Transfer Agent.

 

TheCompany’s common shares are quoted on the Nasdaq Small Cap Market. EffectiveMarch 16, 1999, the Company’s stock ticker symbol changed from ‘TPPPF’ to‘TPPP’.

 

Thefollowing table sets forth, for the years indicated, the high and low saleprices per common share during each year, as reported on the Nasdaq Small CapMarket for the fiscal years ending December 31, 1999, 2000, 2001, 2002 and2003.

 
| **Year** |   | **High** |   | **Low** |   |
|----------|--------|----------|--------|---------|--------|
|     |   | **US$**  |   | **US$** |   |
| 1999     |   | 3.3750   |   | 1.3750  |   |
| 2000     |   | 2.8750   |   | 0.7031  |   |
| 2001     |   | 1.4100   |   | 0.4500  |   |
| 2002     |   | 1.1000   |   | 0.0500  |   |
| 2003     |   | 1.0500   |   | 0.1100  |   |

 

Thefollowing table sets forth, for the periods indicated, the high and low saleprices per common share during each of the quarters as reported on the NasdaqSmall Cap Market.

 

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| **Quarter**    |   | **High** |   | **Low** |   |
|----------------|--------|----------|--------|---------|--------|
|           |   | **US$**  |   | **US$** |   |
| 2002           |   |     |   |    |   |
| First quarter  |   | 1.05     |   | 0.75    |   |
| Second quarter |   | 1.10     |   | 0.45    |   |
| Third quarter  |   | 0.64     |   | 0.05    |   |
| Fourth quarter |   | 0.39     |   | 0.20    |   |
|           |   |     |   |    |   |
| 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    |   |

 

Thefollowing table sets forth, for the periods indicated, the high and low saleprices per common share during each of the months set forth below as reportedon the Nasdaq Small Cap Market.

 
| **Year**           |   | **High** |   | **Low** |   |
|--------------------|--------|----------|--------|---------|--------|
|               |   | **US$**  |   | **US$** |   |
| November 2003 |   | 0.82     |   | 0.50    |   |
| December 2003 |   | 1.05     |   | 0.51    |   |
| January 2004  |   | 1.49     |   | 0.57    |   |
| February 2004 |   | 1.87     |   | 1.06    |   |
| March 2004    |   | 1.97     |   | 1.02    |   |
| April 2004    |   | 1.42     |   | 0.87    |   |

 

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Item 10

**Additional Information**

 

**Memorandum and Articles of Association**

 

**Introduction**

 

AnEnglish translation of the Company’s articles of association, as amended onAugust 1, 2001, is attached to this Annual Report on Form 20-F. Thematerial provisions of the Company’s Articles of Association are summarizedbelow. Such summaries do not purport to be complete statements of theseprovisions and are qualified in their entirety by reference to such exhibit.The Company was established by the Department of Justice at Vianen, The Netherlandsas number N.V. 538.177 and provide for full application of the large companyregime (*structuurregime*), thespecial statutory regime for large Netherlands companies. The objectives of theCompany are generally to manage and finance businesses, extend loans and investcapital as described in greater detail in Article 2 of the Company’sArticles of Association.

 

**Shares**

 

TheCompany’s authorized share capital is currently divided into 43,750,000 commonshares, nominal value EUR 0.04 per common share and 19,750,000 preferredshares, nominal value EUR 0.04 per preferred share. The common shares may be inbearer or registered form.

 

**Dividends**

 

Dividendson common shares may be paid out of annual profits shown in the Company’sannual accounts, which must be adopted by the Company’s Supervisory Board andapproved by the Company’s shareholders at the general meeting. Any holder ofoutstanding preferred shares is entitled to an annual dividend equal to thepaid-in capital on such shares multiplied by such rate as is determined by theBoard of Management on the first date on which a preferred share is issued andapproved by the Supervisory Board, provided that such rate shall be withinthree percentage points of the average deposit rate of the European Central Bank.Such dividends on preferred shares are cumulative.

 

TheBoard of Management, with the prior approval of the Supervisory Board, maydecide that all or part of the Company’s profits should be retained and not bemade available for distribution to shareholders. Those profits that are notretained shall be distributed to holders of common shares, subject to therights of the holders of outstanding preferred shares, if any, described above,provided that the distribution does not reduce shareholders’ equity below thenominal value of the issued share capital increased by the amount of reservesrequired by Netherlands law. At its discretion, subject to statutoryprovisions, the Board of Management may, with the prior approval of theSupervisory Board, distribute one or more interim dividends on the commonshares before the annual accounts have been approved by the Company’sshareholders. Existing reserves that are distributable in accordance withNetherlands law may be made available for distribution upon proposal by theBoard of Management, subject to prior approval

 

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bythe Supervisory Board. With respect to cash payments, the rights to dividendsand distributions shall lapse if such dividends or distributions are notclaimed within five years following the day after the date on which they weremade available.

 

**Voting Rights**

 

Membersof the Company’s Supervisory Board are appointed by shareholders at the generalmeeting of shareholders. The Company’s Articles of Association provide that theterm of office of each Supervisory Director will expire no later than theearlier of the first general meeting of shareholders after the fourthanniversary of his or her appointment and the date on which the general meetingof shareholders is held in the calendar year in which he or she attains the ageof 72. Members of the Supervisory Board may be re-appointed. Members of theBoard of Management are appointed by shareholders at the general meeting ofshareholders voting on a proposal by the Supervisory Board.

 

**General Meetings of Shareholders**

 

TheCompany’s general meetings of shareholders will be held at least once a year,not later than six months after the end of the fiscal year. Notices convening ageneral meeting will be mailed to holders of registered shares at least 15 daysbefore the general meeting and will be published in national newspapers in TheNetherlands and abroad in countries where the Company’s bearer shares areadmitted for official quotation. In order to attend, address and vote at thegeneral meeting of shareholders, the holders of the Company’s registered sharesmust notify the Company in writing of their intention to attend the meeting andholders of the Company’s bearer shares must direct the depository to theirbearer shares, each as specified in the published notice. The Company currentlydoes not solicit from or nominate proxies for its shareholders and is exemptfrom the proxy rules of the United States Securities Exchange Act. However,shareholders and other persons entitled to attend the general meetings ofshareholders may be represented by proxies with written authority.

 

Othergeneral meetings of shareholders may be held as often as deemed necessary bythe Supervisory Board or the Board of Management and must be held if one ormore shareholders or other persons entitled to attend the general meeting ofshareholders jointly representing at least 10% of the Company’s issued sharecapital make a written request to the Supervisory Board or the Board ofManagement that a meeting must be held and specifying in detail the business tobe dealt with at such meeting. Resolutions are adopted at general meetings ofshareholders by a majority of the votes cast, except where a differentproportion of votes is required by the Articles of Association or Netherlandslaw, in a meeting in which holders of at least one-third of the outstandingcommon shares are represented. Each share carries one vote.

 

**Amendment of Articles of Association and Winding Up**

 

Aresolution presented to the general meeting of shareholders amending theCompany’s Articles of Association or winding up the Company may only be takenafter a proposal made by the Board of Management and approved by theSupervisory Board. A resolution to dissolve the Company must be

 

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approvedat general meetings of shareholders by at least a three-fourths majority of thevotes cast.

 

**Approval of Annual Accounts**

 

TheCompany’s annual Netherlands statutory accounts, together with a certificate ofits auditors, will be submitted to the shareholders at the general meeting ofshareholders for approval. Consistent with business practice in The Netherlandsand as provided by the Company’s Articles of Association, approval of theannual accounts 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 notdisclosed to the shareholders.

 

**Liquidation Rights**

 

Inthe event of the Company’s dissolution and liquidation, the assets remainingafter payment of all debts and liquidation expenses are to be distributed (a)first, to the preferred shareholders in an amount equal to the paid-in capitalon such shares plus any declared but unpaid cumulative dividends and (b)second, any remaining assets will be divided proportionately among the holdersof the common shares.

 

**Issues of Shares; Pre-emptive Rights**

 

TheCompany’s Board of Management has the power to issue shares if the Board ofManagement has been designated by the shareholders at the general meeting ofshareholders (whether by means of an authorizing resolution or by an amendmentto the Company’s Articles of Association) as the authorized body for thispurpose. The number of shares the Board of Management is authorized to issuemust be set at the time of appointment and in the case of common shares may notexceed 20% of the common shares then outstanding. Pursuant to a shareholders’resolution dated 11 June 1999, the Board of Management is authorized toissue up to 43,750,000 common shares and 19,750,000 preferred shares or rightsthereto through 11 June 2004. The Board of Management may, however,authorize an issuance of shares only after obtaining the approval of theSupervisory Board. A designation of the Board of Management may be effectivefor a specified period of up to five years and may be renewed. In the absenceof such designation, the shareholders at the general meeting of shareholdershave the power to authorize the issuance of shares.

 

Shareholdershave a pro rata pre-emptive right of subscription to any common shares issuedfor the purpose of raising capital, which right may be limited or eliminated.If designated 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 11 June 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.

 

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**Preferred Shares**

 

Theprovisions for the issuance of preferred shares are similar to the provisionsfor the issuance of common shares described above. However, an issuance ofpreferred shares will require prior approval of the shareholders at the generalmeeting of shareholders if (a) the Company’s shares are subsequently listed byEuronext Amsterdam N.V., (b) the proposed issuance of preferred shares wouldresult in an outstanding amount of cumulative preferred shares exceeding 100%of the outstanding common shares and (c) the issuance is effected pursuant to aresolution of a corporate body other than the Company’s general meeting ofshareholders, such as the Board of Management.

 

Ifthe Company’s stock is subsequently listed by Euronext Amsterdam N.V., then thefollowing provisions will apply. If the issuance of preferred shares iseffected pursuant to a resolution of a corporate body other than theshareholders at the general meeting of shareholders, but the amount ofpreferred shares to be issued would not exceed 100% of the number ofoutstanding common shares, then prior approval of the shareholders at thegeneral meeting of shareholders is not required, but the reasons for theissuance must be explained at an extraordinary general meeting of shareholdersto be held within four weeks after such issue. Subsequently, within two yearsafter the first issuance of preferred shares, a general meeting of shareholderswill be held to resolve to repurchase or cancel the preferred shares. If nosuch resolution is adopted, subsequent general meetings of shareholders for thesame purpose must be convened, each of which must be held within two yearsfollowing the preceding meeting, until no preferred shares remain outstanding.This procedure does not apply to preferred shares that have been issuedpursuant to a resolution by, or with the prior approval of, the shareholders atthe general meeting of shareholders.

 

Inconnection with the issuance of preferred shares it may be stipulated that anamount not exceeding 75% of the nominal amount may be paid only if the Companyrequests payment. A decision of the Board of Management for further paymentrequires prior approval of the Supervisory Board.

 

**Repurchase and Cancellation of Shares**

 

TheCompany may repurchase up to a maximum of 10% of its common shares, subject tocompliance with the requirements of certain laws of The Netherlands. Commonshares owned by the Company may not be voted or counted for quorum purposes.Any such purchases are subject to the approval of the Supervisory Board and theauthorization of the shareholders at the general meeting of shareholders.Authorization is not effective for more than 18 months. The Company may resellshares it purchases. Upon a proposal of the Board of Management and approval ofthe Supervisory Board, the Company’s shareholders at the general meeting shallhave the power to decide to cancel shares acquired by the Company or to reducethe nominal value of the common shares. Any such proposal is subject to generalrequirements of Netherlands law with respect to reduction of share capital.

 

Sharesmay only be cancelled by vote of the shareholders at the general meeting. Onlyshares which the

 

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Companyholds or for which it holds the depository receipts may be cancelled. However,an entire class may be cancelled provided the Company repays the paid-incapital to the holders of such shares. In the case of preferred shares, suchrepayment includes any declared but unpaid dividends.

 

**Material Contracts**

 

In2001, The Department of Justice again appointed Triple P as one of fourpreferred suppliers for systems delivery for a maximum of four years commencingOctober 1, 2001. Under these contracts the company recorded a net revenue ofapproximately EUR 32.5 million in 2001, EUR 30.7 million in 2002 and EUR 17.3million in 2003. The Company agreed upon a master-contract with the Departmentof Justice in The Netherlands under which more than one hundred separatepurchasing units within the Department of Justice order ICT-systems.

 

**Exchange controls**

 

Thereare currently no limitations on the rights of shareholders from outside TheNetherlands to hold or vote common shares either under the laws of TheNetherlands or in the Company’s Articles of Association. Cash distributionspayable in euros, if any, may be officially transferred from and to TheNetherlands and converted into any other currency without Netherlands legalrestrictions. However, for statistical purposes such payments and transactionsmust be reported to the Dutch Central Bank. We have no current intention to paydividends on our common shares.

 

**Taxation**

 

**Introduction**

 

Thefollowing is only a summary of the material anticipated tax consequences of aninvestment in common shares under US federal income tax and Netherlands taxlaws. The discussion does not propose to deal with all possible taxconsequences relating to an investment in common shares. In particular, thediscussion does not address the tax consequences under state, local and other(e.g., non-US or nonNetherlands) tax laws, nor does it address specialcircumstances that may apply to individual investors. Accordingly, eachshareholder is advised to consult its tax adviser regarding the taxconsequences of its investment in common shares. This summary is based on theUS Internal Revenue Code of 1986, the Regulations as amended thereunder,current case law, published rulings, and Netherlands tax laws and regulations.

 

Theanticipated tax consequences are subject to change, and such change may beretroactively effective. If so, the following summary may be affected andtherefore should not be relied upon. Further, any variation or differences fromthe facts or representations recited herein might, for any reason, affect thefollowing discussion, perhaps in an adverse manner. In addition, the Company’sUS and Netherlands tax advisers have not undertaken any obligation to updatethis discussion for changes in facts or laws

 

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occurringsubsequent to the date hereof.

 

Thefollowing summary solely represents the views of the US and Netherlands taxadvisers of the Company regarding interpretation of existing law and,accordingly, no assurance can be given that the tax authorities or courts inthe US or The Netherlands will agree with this summary.

 

**Netherlands Taxes**

 

Thefollowing is only a summary of Netherlands tax consequences for an owner ofcommon shares who is not, and is not deemed to be, a resident of TheNetherlands for purpose of the relevant tax codes (a ‘non-residentshareholder’). The summary does not address taxes imposed by The Netherlandsand its political subdivisions, other than the dividend withholding tax,personal income tax, corporate income tax, net wealth tax, and gift andinheritance tax.

 

**Netherlands Dividend Withholding Tax**

 

Tothe extent that dividends are distributed by the Company, such dividends aresubject under Netherlands tax law to a 25% withholding tax. Dividends includedividends in cash or in kind, constructive dividends, repayment of paid-incapital not recognized for Netherlands tax purposes and liquidation proceeds inexcess of, for Netherlands tax purposes, recognized paid-in capital. Stockdividends are also subject to withholding tax unless distributed out of theCompany’s additional paid-in capital as recognized for Netherlands taxpurposes.

 

Anon-resident shareholder can be eligible for a reduction or a refund ofNetherlands dividend withholding tax under a tax treaty which is in effect betweenthe country of residence of the shareholder and The Netherlands. TheNetherlands has concluded such treaties with, among others, the US, allEuropean Union countries, Canada, Switzerland and Japan. Under most of thesetreaties, Netherlands dividend withholding tax is reduced to a rate of 15% orless unless the recipient shareholder has a permanent establishment in TheNetherlands.

 

Underthe Tax Treaty of December 18, 1992, between The Netherlands and theUnited States, together with the related Protocol (the ‘US Tax Treaty’), Dutchdividend withholding tax may be reduced. Reduction to 15% is possible if thedividends are paid by a Dutch company to a resident of the United States (otherthan an exempt organization or exempt pension trust, as discussed below).Reduction to 5% is possible in the case of certain US corporate shareholderswho own directly at least 10% of the voting power in the Company (‘qualifiedshareholding’), provided such shareholder does not have an enterprise or aninterest in an enterprise that is, in whole or in part, carried on through apermanent establishment or permanent representative or fixed base in TheNetherlands and to which enterprise or part of an enterprise the shares areattributable. Provided certain formalities have been fulfilled, the US TaxTreaty allows a complete exemption from Dutch withholding tax for dividendsreceived by exempt pension trusts and exempt organizations, as defined therein.

 

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Exceptin the case of exempt organizations other than pension funds, such reduceddividend withholding rate (or exemption from withholding) can be applied at thesource upon payment of dividends (other than dividends stemming from aqualifying shareholding) provided Form IB 92 USA has been properly filed withthe Dutch tax authority in advance of the payment; a copy should be filed withthe US tax authority. If certain conditions are met, one Form IB 92 USA can befiled by all the US shareholders together. Form IB 92 USA is also required fora refund of Dutch dividend withholding tax. Exempt organizations and exemptpension funds which are not able to fulfill the formalities required to claim afull exemption at source remain subject to Dutch dividend withholding tax atthe statutory rate of 25% and are required to properly file Form IB 95 USA andForm IB 96 USA, respectively for a refund of such withholding with the Dutchtax authority; a copy should be filed with the US tax authority. These Formsare available for dividends other than any dividends paid in connection with aqualified shareholding.

 

Aperson may not claim the benefits of the US Tax Treaty unless (i) such personis a resident of the United States as defined therein and (ii) such person’sentitlement to such benefits is not limited by the provisions ofArticle 26 (‘limitation on benefits’) of the US Tax Treaty. Furthermore, areduction of Dutch dividend withholding tax may be refused by the Dutch taxauthorities if so-called ‘dividend stripping’ has occurred. Dividend strippingis assumed if the recipient of the dividend is not the beneficial owner of thedividend. If as a result of transactions the dividend is for the account ofanother person while another person directly or indirectly remains thebeneficial owner of the shares, through for example a deep in the money putoption, and the recipient of the dividend is entitled to a further reductionthan the beneficial owner, a reduction will be denied. In this scenario, the25% Dutch dividend withholding tax will not be reduced.

 

Nowithholding tax applies to the sale or disposition of shares to persons otherthan the company or companies in which the Company has a direct or indirectinterest and on the sale or disposition of shares other than by persons holdingor deemed to hold a substantial interest in the Company.

 

Undercertain conditions, the Company may reduce the remittance of the dividend taxwithheld. The reduction applies to the distribution of dividends receivedrelating to shares and profit sharing bonds in a foreign subsidiary resident inThe Netherlands 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.

 

Forcompleteness sake we mention that the US and The Netherlands have negotiated arevised tax treaty for the avoidance of double taxation. It is anticipated thatthis tax treaty will enter into force in 2004 or early 2005. Based on therevised treaty the dividend witholding tax rate will under circumstances be

 

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reducedto 0%. Moreover, the provisions of Article 26 (“Limitation on benefits”)of the US tax treaty will be amended.

 

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

 

Anon-resident shareholder will not be subject to Netherlands personal orcorporate income tax with respect to dividends distributed by the Company onthe common shares or with respect to capital gains derived from the sale ordisposal of common shares in the Company, provided:

 

(a)          the non-resident shareholder does not carry ona business in The Netherlands through a permanent establishment or a permanentrepresentative to which 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 permanent establishmentor 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.

 

Ingeneral terms, to have a substantial interest in the share capital of theCompany the non-resident shareholder must, alone or together with certain closerelatives, hold directly or indirectly 5% or more of the subscribed capital ofany class of shares in the Company, or a right to acquire at least 5% of theissued share capital in any class of shares of the Company. The Netherlandsimposes income tax at the rate of 25% on the capital gain realized upon thesale of shares in a Dutch registered company in which the taxpayer has asubstantial interest and also on dividends received by a taxpayer from aNetherlands company in which the taxpayer has a substantial interest.

 

Notwithstandingthe above, under most tax treaties, The Netherlands may not impose tax oncapital gains realized upon the sale or disposition of shares by shareholdersentitled to treaty benefits unless certain additional conditions are met. Inparticular, under the US Tax Treaty, The Netherlands may not impose tax oncapital gains realized by a shareholder that is a treaty beneficiary unless:

 

•                  the shareholder alone or together with certainrelatives owns at least 25% of any class of shares; and

 

•                  the shareholder has, at any time during thefive-year period preceding the disposition, been a resident of The Netherlands.

 

**Deemed Capital Net Assets Tax (formerly ‘Net Wealth Tax’)**

 

Asper January 1, 2001, The Netherlands net wealth tax has been abolished andreplaced by a deemed capital net assets tax (i.e. ‘forfaitaire vermogensrendementsheffing’) which is included in Netherlands

 

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personalincome tax legislation. A non-resident shareholder who is an individual is notsubject to Netherlands deemed capital net assets tax with respect to the commonshares, provided the non-resident shareholder is not and is not deemed to beentitled to a share in the profits of an enterprise effectively managed in TheNetherlands, other than by way of shares (‘effectenbezit’) or employment.

 

Corporationsare not subject to Netherlands deemed capital net assets tax.

 

**Netherlands Gift and Inheritance Tax**

 

Agift or inheritance of shares from a non-resident shareholder will not besubject to Netherlands gift and inheritance tax, provided:

 

•             the non-residentshareholder does not have and is not deemed to have an enterprise or aninterest in an enterprise that is, in whole or in part, carried on through apermanent establishment, a fixed base or a dependent agent in The Netherlands;and

 

•             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.

 

Forpurposes of Netherlands gift and inheritance tax, a Dutch citizen is deemed tobe a resident 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.

 

InDecember 2002, a lower Dutch tax court ruled that the deemed residencycriterion is in conflict with European tax law. The Dutch Under-Minister ofFinance requested the Dutch Supreme Court to reexamine the decision of the lowercourt. The outcome of this procedure is expected in 2004.

 

InNovember 2003 a lower Dutch tax court asked the European court to decidewhether the deemed residence criterion is in conflict with European tax law.The outcome of this procedure is not expected in near future.

 

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**United States Taxes**

 

The following discussion summarizes the material U.S. federal incometax consequences relating to the acquisition, ownership and disposition ofcommon shares by a U.S. holder as defined below. This summary deals only withcommon shares held as capital assets and does not deal with the taxconsequences applicable to all categories of investors some of which (such astax-exempt entities, banks, broker-dealers, investors who hold common shares aspart 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 owner of common sharesthat for U.S. federal income tax purposes is (i) a citizen or resident of theUnited States, (ii) a United States domestic corporation or entity taxable as acorporation, or (iii) otherwise subject to U.S. federal income taxation on netincome regardless of its source.

 

**Taxation of Dividends**

 

Subject to the discussion below under “Passive Foreign InvestmentCompany Considerations”, for U.S. federal income tax purposes, the gross amountof distributions made by us 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,but will not be eligible for the dividends received deduction generally allowedto corporations. Distributions in excess of our earnings and profits will betreated, for U.S. federal income tax purposes, first as a nontaxable return ofcapital to the extent of the U.S. holder’s basis in the common shares and thenas a gain from the sale or exchange of the common shares. The amount of anydividend paid in a non-U.S. currency will be equal to the U.S. dollar value ofthe non-U.S. currency on the date of receipt, regardless of whether the U.S.holder converts the payment into U.S. dollars. Gain or loss, if any, recognizedby a U.S. holder on the sale or disposition of the non-U.S. currency generallywill be U.S. source ordinary income or loss.

 

Subject to certain conditions and limitations, any Netherlands taxeswithheld from a distribution will generally be treated as a foreign income taxthat U.S. holders may elect to deduct in computing their U.S. federal taxableincome or credit against their U.S. federal income tax liability. For foreigntax credit purposes, dividends paid by us generally will be foreign source“passive income” or, in the case of certain U.S. holders, “financial servicesincome.”

 

**Taxation on Sale orDisposition of Common Shares**

 

U.S. holders will generally recognize gain or loss for U.S. federalincome tax purposes on the sale 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.

 

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holder’s adjusted tax basis in the common shares will be equal to theamount paid by the U.S. holder for such common shares. Subject to thediscussion below under “Passive Foreign Investment Company Considerations”,such gain or loss will generally be U.S. source capital gain or loss, and willbe long-term capital gain or loss if the common shares have been held for morethan one year.

 

**Passive ForeignInvestment Company Considerations**

 

If, during any taxable year, 75% or more of our gross income consistsof certain types of passive income, or the average value during a taxable yearof our passive assets (generally assets that generate passive income) is 50% ormore of the average value of all of our assets, we will be treated as a“passive foreign investment company”, or PFIC, under U.S. federal income taxlaw for such year and succeeding years. Based on an analysis of our financialposition, including an estimate of the value of our assets, we believe that wehave not been a PFIC for any preceding taxable year and expect that we will notbecome a PFIC during the current taxable year. Our determination of PFIC statusmay 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 you.

 

If we were classified as a PFIC, unless you timely made one of theelections described below, a special tax regime would apply to both:

 

•             any “excessdistribution”, which would be your share of distributions in any year that aregreater than 125% of the average annual distributions received by you in thethree preceding years or your holding period, if shorter; and

 

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

 

Under this regime, any excess distribution and realized gain would betreated as ordinary income and would be subject to tax as if the excessdistribution or gain had been realized rateably over your holding period forthe common shares. As a result of this treatment:

 

•             the amount allocatedto the taxable year in which you realize the excess distribution or gain wouldbe 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 you make a mark-to-market election with respect to your shares, youwill not be subject to the PFIC rules described above. Instead, in general, youwill include as ordinary income each year the excess, if any, of the fairmarket value of your shares at the end of the taxable year over your adjustedbasis in your shares. You will also be allowed to take an ordinary loss inrespect of the excess, if any, of the adjusted

 

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basis of your shares over their fair market value at the end of thetaxable year, but only to the extent of the net amount of income previouslyincluded as a result of the mark-to-market election. Your basis in the shareswill be adjusted to reflect any such income or loss amounts. Any gain realizedupon disposition of your shares will also be taxed as ordinary income.

 

The special PFIC tax rules described above also will not apply to youif you make a QEF election, that is, you elect to have us treated as aqualified electing fund for U.S. federal income tax purposes. If we determinethat we are a PFIC, we will provide you with such information as you mayrequire from us in order to make an effective QEF election.

 

If you make a QEF election, you will be required to include in yourgross income for U.S. federal income tax purposes your pro rata share of ourordinary earnings and net capital gain for each of our taxable years that weare a PFIC, regardless of whether or not you receive any distributions from us.Your basis in your common shares will be increased to reflect undistributedamounts which are included in your 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 you.

 

You are urged to consult your own tax adviser concerning the potentialapplication of the PFIC rules to your ownership and disposition of commonshares.

 

**Backup Withholding**

 

Dividend payments with respect to common shares and proceeds from thesale, exchange or redemption of common shares may be subject to informationreporting to the Internal Revenue Service and possible backup withholding at a30% rate. Backup withholding will generally not apply to you, however, if youfurnish a correct taxpayer identification number or certificate of foreignstatus and make any other required certification or if you are otherwise exemptfrom backup withholding. If you are required to establish your exempt statusyou generally must provide such certification on Internal Revenue Service FormW-9 in the case of U.S. persons and on Internal Revenue Service Form W-8BEN inthe case of non-U.S. persons.

 

Amounts withheld as backup withholding may be credited against yourU.S. federal income tax liability, and you may obtain a refund of any excessamounts withheld under the backup withholding rules by filing the appropriateclaim for refund with the Internal Revenue Service and furnishing any requiredinformation.

 

**Documents on Display**

 

TheCompany is subject to the informational requirements of the Securities ExchangeAct of 1934, as amended. In accordance with these requirements, the Companyfiles reports and other information with the United States Securities andExchange Commission (‘SEC’). These materials may be inspected at the

 

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Company’soffice in Vianen, The Netherlands. The Company’s Investor Relations Departmentmay be reached at +31 347 353 650. Documents filed with the SEC may also beread and copied at the SEC’s public reference room at Room 1024, JudiciaryPlaza Building, 450 Fifth Street N.W., Washington, D.C. 20549 and at theregional 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.

 

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Item 11

**Quantitative and Qualitative Disclosure about Market Risk**

 

TheCompany’s market exposure is primarily interest rate risk on short-termborrowings and, to a limited extent, foreign currency exposure on operationaltransactions. The Company has no formal risk management policy to reducepotential negative earnings effects from changes in interest and foreignexchange rates. The Company does not use financial instruments for hedging,trading or other speculative purposes.

 

**Interest Rate Risk**

 

AtDecember 31, 2003, the Company had (i) no short-term borrowingsoutstanding, (ii) an EUR 234,000 interest-bearing loan – 4% - outstanding fromNationale Nederlanden, a Dutch pension company and (iii) EUR 208,000interest-bearing financial lease installments – between 5.8% and 7.7% -outstanding from Hewlett Packard. An immediate 10% change in interest rateswould not have a material effect on the Company’s results of operations overthe next fiscal year.

 

**Foreign currency exchange rate risk**

 

TheCompany has no material exposure to foreign currency exchange rate risk as bothits revenues and expenses are mainly denominated in euro. In addition, nosignificant firmly committed sales or purchase contracts in foreign currenciesare outstanding.

 

Noforeign currency denominated debts are outstanding. As a consequence,management believes that a 10% adverse movement in foreign currency rates willnot have a significant effect on the Company’s consolidated financial positionand results of operations over the next fiscal year.

 

Item 12

**Description of Securities Other than Equity Securities**

 

Notapplicable.

 

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Part II

 

 

Item 13

**Defaults, Dividend Arrearages and Delinquencies**

 

Notapplicable.

 

Item 14

**Material Modifications to the Right of Security Holders andUse of Proceeds**

 

Notapplicable.

 

Item 15

**Controls and Procedures**

 

Our management, with the participation of our principal executiveofficer and principal financial officer, evaluated the effectiveness of ourdisclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)under the Exchange Act) as of December 31, 2003. Based on this evaluation,our principal executive officer and principal financial officer concluded that,as of December 31, 2003, our disclosure controls and procedures were (1)designed to ensure that material information relating to Triple P N.V.,including our consolidated subsidiaries, is made known to our principalexecutive officer and principal financial officer by others within thoseentities, particularly during the period in which this report was beingprepared and (2) effective, in that they provide reasonable assurance thatinformation required to be disclosed by us in the reports that we file orsubmit under the Exchange Act is recorded, processed, summarized and reportedwithin the time periods specified in the SEC’s rules and forms.

 

No change in our internal control over financial reporting (as definedin Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during thefiscal quarter ended December 31, 2003 that has materially affected, or isreasonably likely to materially affect, the Company’s internal control overfinancial reporting.

 

 

Item 16

**[Reserved]**

 

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Item 16A

## **Audit Committee FinancialExpert**

 

The Board of Supervisory Directors has determined that the Company doesnot have an Audit Committee financial expert serving on its Audit Committee.The Board of Supervisory Directors believes that the members of the AuditCommittee, Mr. A.H.M. Stam and Mr. H.C.A. Groenen, collectively possess theknowledge and experience to oversee and assess the performance of ourmanagement and auditors, the quality of our disclosure controls, thepreparation and evaluation of our financial statements and our financialreporting as well as the necessary understanding of Audit Committee functionsto diligently execute their responsibilities. Biographical information on eachmember of the Audit Committee is available in Item 6 of this Annual Report onForm 20-F. The Board of Supervisory Directors is currently conducting a searchfor an additional member of the Audit Committee who qualifies as an AuditCommittee financial expert.

 

 

Item 16B

## **Code Of Ethics**

 

The Company has adopted a written code of ethics that applies to allCompany employees, including the Company’s principal executive officer, principalfinancial officer and principal accounting officer.

 

You may request a copy of our code of ethics, at no cost, by writing toor telephoning us as follows:

 
| 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**

 

During each of the last two fiscal years, Ernst & Young Accountantshas acted as the Company’s independent auditors.

 

**Audit Fees**

 

The aggregate fees for 2003 and 2002 audit services provided by Ernst& Young were EUR 132,500 and EUR 176,500 respectively, which included feesassociated with the annual audit, consultations on various accounting issuesand performance of local statutory audits.

 

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**Audit-Related Fees**

 

Ernst & Young billed the Company no fees for audit-related servicesfor fiscal 2003 and 2002.

 

**Tax Fees**

 

Ernst & Young billed the Company no fees for tax advice, includingfees associated with tax compliance services, tax planning services and othertax consulting services for fiscal 2003 and 2002.

 

**All Other Fees**

 

Ernst & Young billed the Company no fees for services other thanAudit Fees, Audit-Related Fees and Tax Fees described above for fiscal 2003 and2002.

 

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

 

Prior to the engagement of Ernst & Young each year, the engagementis approved by the Audit Committee of the Board of Supervisory Directors and byvote of the Company’s shareholders at the Company’s Annual General Meeting ofShareholders. The Company’s Audit Committee does not have pre-approvalpolicies, but non-audit services are not performed unless pre-approved by theAudit Committee. In fiscal 2003, the Company’s Audit Committee approved all ofthe services provided by Ernst & Young.

 

 

Item 16D

**Exemption From the Listing Standards forAudit Committees**

 

Not applicable.

 

 

Item 16E

**Purchases of Equity Securities By the Issuer and RelatedPurchasers**

 

Notapplicable.

 

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Part III

 

 

Item 17

**Financial Statements**

 

Notapplicable.

 

Item 18

**Financial Statements**

 

Thefollowing Consolidated Financial Statements, together with the reports of ourindependent auditors therein, appearing on pages F-1 through F-33 are filed aspart of this report on Form 20-F.

 

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** **

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

 

**Contents**

 
|                                                  | **Page** |
|-------------------------------------------------------|----------|
| Report  of Independent Auditors                       | F-2      |
| Consolidated Balance Sheets                           | F-4      |
| Consolidated  Statements of Operations                | F-5      |
| Consolidated  Statements of Shareholders’ Equity | F-6      |
| Consolidated  Statements of Cash Flows                | F-7      |
| Notes to  Consolidated Financial Statements           | F-9      |

 

F-1

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TripleP N.V.

 

**Report of Independent Auditors**

 

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

 

Wehave audited the accompanying consolidated balance sheets of Triple P N.V. andsubsidiaries as of December 31, 2002 and 2003, and the relatedconsolidated statements of operations, shareholders’ equity, and cash flows forthe years then ended. Our audits also included the financial statementschedule listed in the Index at Item 18A. These financial statements andschedule are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements andschedule based on our audits. The financial statements and financialstatement schedule of Triple P N.V. for the year ended December 31,2001 were audited by other auditors who have ceased operations. Those auditorsexpressed an unqualified opinion on those statements in their report datedFebruary 7, 2002.

 

Weconducted our audits in accordance with auditing standards of the PublicCompany Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

Inour opinion, the financial statements referred to above present fairly, in allmaterial respects, the consolidated financial position of Triple P N.V. andsubsidiaries at December 31, 2002 and 2003, and the consolidated resultsof their operations and their cash flows for the years then ended, inconformity with U. S. generally accepted accounting principles. Also, in ouropinion, the related financial statement schedule, when considered in relationto the basic financial statements taken as a whole, present fairly in allmaterial respects the information set forth therein.

 

Asdiscussed above, the financial statements of Triple P N.V. and subsidiaries asof December 31, 2001, and for the year then ended were audited by otherauditors who have ceased operations. As described in Note 13, the Companychanged the composition of its reportable segments in 2003, and the amounts inthe 2001 financial statements relating to reportable segments have beenrestated to conform to the 2003 composition of reportable segments. We auditedthe adjustments that were applied to restate the disclosures for reportablesegments reflected in the 2001 financial statements. Our procedures includedagreeing the adjusted amounts of segment revenues and gross profit to theCompany’s underlying records obtained from management. In our opinion, suchadjustments are appropriate and have been properly applied. However, we werenot engaged to audit, review, or apply anyprocedures to the 2001 financial statements ofthe Company other than with respect to such adjustments and, accordingly, we donot express an opinion or any other form of assurance on the 2001 financialstatements taken as a whole.

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

 

F-2

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TripleP N.V.

 

**Report ofIndependent Auditors (former Auditor)**

 

**This report is a copy of a report previously issued by ArthurAndersen in connection with Triple P N.V.’s filing on Form 20-F for the yearended December 31, 2001. The report has not been re-issued by ArthurAndersen nor has Arthur Andersen provided a consent to the inclusion of itsreport in this Form 20-F.**

 

**To Triple P N.V.**

 

Wehave audited the accompanying consolidated balance sheets of Triple P N.V. andsubsidiaries as of December 31, 2000 and 2001, and the relatedconsolidated statements of operations, shareholders’ equity and cash flows foreach of the three years in the period ended December 31, 2001. Thesefinancial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

Weconducted our audits in accordance with auditing standards generally acceptedin the United States. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

Inour opinion, the financial statements referred to above present fairly, in allmaterial respects, the consolidated financial position of Triple P N.V. andsubsidiaries at December 31, 2000 and 2001, and the consolidated resultsof their operations and their cash flows for each of the three years in theperiod ended at December 31, 2001 in conformity with accounting principlesgenerally accepted in the United States.

 

Ouraudit was made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The schedule listed in the index of financialstatements is presented for purposes of complying with the Securities andExchange Commissions rules and is not part of the basic financial statements.This schedule has been subjected to the auditing procedures applied in theaudit of the basic financial statements and, in our opinion, fairly states inall material respects the financial data required to be set forth therein inrelation to the basic financial statements taken as a whole.

 

February 7,2002

Eindhoven,The Netherlands

ArthurAndersen

 

F-3

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TripleP NV

**ConsolidatedBalance Sheets**

(inthousands except shares and per share amounts)

 
|                                                                                                     |   | **At  December 31,** |   |
|----------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                                                     |   | **2002**                  |   | **2003** |   |
|                                                                                                     |   | **EUR**                   |   | **EUR** |   |
| **Assets**                                                                                               |   |                      |   |   |   |
| Current Assets:                                                                                          |   |                      |   |   |   |
| Cash and cash equivalents                                                                                |   | 4,207                     |   | 5,732 |   |
| Restricted cash                                                                                          |   | 59                        |   | 462 |   |
| Accounts receivable, net of an allowance  for doubtful accounts of EUR 1,001 in 2002 and EUR 860 in 2003 |   | 12,291                    |   | 10,182 |   |
| Inventories                                                                                              |   | 3,136                     |   | 1,255 |   |
| Prepaid expenses and other current assets                                                                |   | 2,324                     |   | 2,186 |   |
| Total current assets                                                                                     |   | 22,017                    |   | 19,817 |   |
|                                                                                                     |   |                      |   |   |   |
| Non-Current Assets:                                                                                      |   |                      |   |   |   |
| Property and equipment, at cost                                                                          |   | 3,999                     |   | 2,564 |   |
| Less: accumulated depreciation and  amortization                                                         |   | 2,375                     |   | 1,265 |   |
| Net property and equipment                                                                               |   | 1,624                     |   | 1,299 |   |
| Total non-current assets                                                                                 |   | 1,624                     |   | 1,299 |   |
| Total assets                                                                                             |   | 23,641                    |   | 21,116 |   |
|                                                                                                     |   |                      |   |   |   |
| **Liabilities and  Shareholders’ Equity**                                                           |   |                      |   |   |   |
| Current liabilities:                                                                                     |   |                      |   |   |   |
| Short-term portion of long-term liabilities                                                              |   | 470                       |   | 322 |   |
| Accounts payable                                                                                         |   | 8,645                     |   | 7,470 |   |
| Accrued liabilities                                                                                      |   | 5,667                     |   | 5,436 |   |
| Customer deposits                                                                                        |   | 665                       |   | 622 |   |
| Deferred revenue                                                                                         |   | 3,981                     |   | 3,767 |   |
| Restructuring reserve                                                                                    |   | 715                       |   | 205 |   |
| Total current liabilities                                                                                |   | 20,143                    |   | 17,822 |   |
|                                                                                                     |   |                      |   |   |   |
| Long-term liabilities:                                                                                   |   |                      |   |   |   |
| Pension obligations                                                                                      |   | 259                       |   | 424 |   |
| Other long-term liabilities                                                                              |   | 725                       |   | 143 |   |
| Total long-term liabilities                                                                              |   | 984                       |   | 567 |   |
| Total liabilities                                                                                        |   | 21,127                    |   | 18,389 |   |
|                                                                                                     |   |                      |   |   |   |
| Commitments and Contingencies (Note 7)                                                                   |   |                      |   |   |   |
|                                                                                                     |   |                      |   |   |   |
| Shareholders’ Equity:                                                                               |   |                      |   |   |   |
| 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                                                                                      |   | (51,998                   | )      | (51,556 | ) |
| Accumulated other comprehensive loss                                                                     |   | —                    |   | (229 | ) |
| Total shareholders’ equity                                                                          |   | 2,514                     |   | 2,727 |   |
| Total liabilities and shareholders’ equity                                                          |   | 23,641                    |   | 21,116 |   |

 

Theaccompanying notes are an integral part of these consolidated financialstatements.

 

F-4

----

 

TripleP NV

**ConsolidatedStatements of Operations**

(inthousands, except shares and per share amounts)

 
|                                                                                                                       |   | **Year Ended  December 31,** |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                                                       |   | **2001**                          |   | **2002** |   | **2003** |   |
|                                                                                                                       |   | **EUR**                           |   | **EUR** |   | **EUR** |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Net revenues                                                                                                               |   | 110,874                           |   | 96,373 |   | 80,371 |   |
| Cost of revenues                                                                                                           |   | 91,793                            |   | 79,438 |   | 66,261 |   |
| Gross profit                                                                                                               |   | 19,081                            |   | 16,935 |   | 14,110 |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Sales and marketing expense                                                                                                |   | 9,743                             |   | 9,777 |   | 8,550 |   |
| General and administrative expense                                                                                         |   | 4,658                             |   | 5,660 |   | 3,654 |   |
| Goodwill amortization                                                                                                      |   | 189                               |   | — |   | — |   |
| Restructuring charge                                                                                                       |   | —                            |   | 1,370 |   | 1,281 |   |
| Total operating expenses                                                                                                   |   | 14,590                            |   | 16,807 |   | 13,485 |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Operating income from continuing operations                                                                                |   | 4,491                             |   | 128 |   | 625 |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Interest income                                                                                                            |   | 197                               |   | — |   | 3 |   |
| Interest expense                                                                                                           |   | (360                              | )      | (417 | ) | (72 | ) |
| Other expense, net                                                                                                         |   | (82                               | )      | (231 | ) | (114 | ) |
| Total other expense, net                                                                                                   |   | (245                              | )      | (648 | ) | (183 | ) |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Net income (loss) from continuing  operations                                                                              |   | 4,246                             |   | (520 | ) | 442 |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Loss from discontinued operations                                                                                          |   | (377                              | )      | — |   | — |   |
| Loss on disposal of discontinued  operations, including a provision for estimated operating losses during  disposal period |   | (628                              | )      | — |   | — |   |
| Loss from discontinued operations                                                                                          |   | (1,005                            | )      | — |   | — |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Net income (loss)                                                                                                          |   | 3,241                             |   | (520 | ) | 442 |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Preferred stock dividend                                                                                                   |   | 572                               |   | — |   | — |   |
| Preferred stock withdrawal premium                                                                                         |   | 454                               |   | — |   | — |   |
| Net income (loss) available to common  stockholders                                                                        |   | 2,215                             |   | (520 | ) | 442 |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Basic and diluted earnings per share:                                                                                      |   |                              |   |   |   |   |   |
| Net income (loss) per share from continuing  operations                                                                    |   | 0.10                              |   | (0.02 | ) | 0.01 |   |
| Loss per share from discontinued operations                                                                                |   | (0.03                             | )      | — |   | — |   |
| Total net income (loss) per share                                                                                          |   | 0.07                              |   | (0.02 | ) | 0.01 |   |
|                                                                                                                       |   |                              |   |   |   |   |   |
| Basic and diluted weighted average shares  outstanding:                                                                    |   |                              |   |   |   |   |   |
| Basic                                                                                                                      |   | 30,469                            |   | 30,469 |   | 30,469 |   |
| Diluted                                                                                                                    |   | 30,469                            |   | 30,469 |   | 30,479 |   |

 

Theaccompanying notes are an integral part of these consolidated financialstatements.

 

F-5

----

 

TripleP NV

**ConsolidatedStatements of Shareholders’ Equity**

(inthousands of euros except share amounts)

 
|                                                  |   |                  |   |                   |   |        |   |            |   |              |   |             |   | **Accumulated** |   |       |   |
|-------------------------------------------------------|--------|-----------------------|--------|------------------------|--------|-------------|--------|-----------------|--------|-------------------|--------|------------------|--------|-----------------|--------|------------|--------|
|                                                  |   |                  |   |                   |   |        |   |            |   | **Additional**    |   |             |   | **Other**       |   | **Total**  |   |
|                                                  |   | **Preferred  Shares** |   | **Common  Shares (1)** |   | **Paid-in** |   | **Accumulated** |   | **Comprehensive** |   | **Shareholders** |   |
|                                                  |   | **Number**            |   | **Amount**             |   | **Number**  |   | **Amount**      |   | **Capital (1)**   |   | **Deficit**      |   | **Loss**        |   | **Equity** |   |
|                                                  |   |                  |   |                   |   |        |   |            |   |              |   |             |   |            |   |       |   |
| Balance at 01-01-2001                                 |   | 24,000,000            |   | 2,178                  |   | 30,469,345  |   | 1,219           |   | 62,005            |   | (52,713          | )      | (113            | )      | 12,576     |   |
|                                                  |   |                  |   |                   |   |        |   |            |   |              |   |             |   |            |   |       |   |
| Net Income                                            |   | —                |   | —                 |   | —      |   | —          |   | —            |   | 3,241            |   | —          |   | 3,241      |   |
| Translation adjustment                                |   | —                |   | —                 |   | —      |   | —          |   | —            |   | —           |   | (1              | )      | (1         | )      |
| Comprehensive income                                  |   |                  |   |                   |   |        |   |            |   |              |   |             |   |            |   | 3,240      |   |
| Preferred dividend                                    |   | —                |   | —                 |   | —      |   | —          |   | —            |   | (980             | )      | —          |   | (980       | )      |
| Withdrawal preferred shares                           |   | (24,000,000           | )      | (2,178                 | )      | —      |   | —          |   | (8,712            | )      | (454             | )      | —          |   | (11,344    | )      |
|                                                  |   |                  |   |                   |   |        |   |            |   |              |   |             |   |            |   |       |   |
| Balance at 31-12-2001                                 |   | —                |   | —                 |   | 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 deferred taxes  (2) |   | —                |   | —                 |   | —      |   | —          |   | —            |   | —           |   | (229            | )      | (229       | )      |
| Comprehensive income                                  |   |                  |   |                   |   |        |   |            |   |              |   |             |   |            |   | 213        |   |
|                                                  |   |                  |   |                   |   |        |   |            |   |              |   |             |   |            |   |       |   |
| Balance at 31-12-2003                                 |   | —                |   | —                 |   | 30,469,345  |   | 1,219           |   | 53,293            |   | (51,556          | )      | (229            | )      | 2,727      |   |

 

----

(1) Thecommon shares and additional paid-in capital have been restated for all periodspresented to reflect the revision of the par value from Dutch guilders 0.20 pershare to EUR 0.04 per share, which occurred during 2001.

(2) Theminimum pension liability adjustment made in 2003 is related to the Company’sdefined benefit plan (Note 8).

 

Theaccompanying notes are an integral part of these consolidated financialstatements.

 

F-6

----

 

TripleP N.V.

### **ConsolidatedStatements of Cash Flows**

(inthousands)

 
|                                                                                                          |   | **Year Ended December 31,** |       |
|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|
|                                                                                                          |   | **2001**                         |       | **2002** |   | **2003** |   |
|                                                                                                          |   | **EUR**                          |       | **EUR** |   | **EUR** |   |
|                                                                                                          |   |                             |       |   |   |   |   |
| **Cash flow from  operating activities**                                                                      |   |                             |       |   |   |   |   |
|                                                                                                          |   |                             |       |   |   |   |   |
| Net income (loss) from continuing  operations                                                                 |   | 4,246                            |       | (520 | ) | 442 |   |
|                                                                                                          |   |                             |       |   |   |   |   |
| Adjustments to reconcile net income (loss)  to net cash provided by (used in) continuing operations:          |   |                             |       |   |   |   |   |
| Depreciation and amortization                                                                                 |   | 1,524                            |       | 1,022 |   | 614 |   |
| Impairment of fixed assets                                                                                    |   | —                           |       | 1,019 |   | — |   |
| Provision for doubtful accounts                                                                               |   | 316                              |       | 268 |   | 247 |   |
| Provision for inventories                                                                                     |   | 104                              |       | 142 |   | — |   |
| Restructuring reserve                                                                                         |   | —                           |       | 715 |   | (510 | ) |
| Reserve for losses of discontinued  operations                                                                |   | 628                              |       | (628 | ) | — |   |
| Other long-term liabilities                                                                                   |   | (943                             | )          | 262 |   | (324 | ) |
| Currency translation adjustment                                                                               |   | —                           |       | 114 |   | — |   |
|                                                                                                          |   |                             |       |   |   |   |   |
| Changes in operating assets and liabilities  from continuing operations:                                      |   |                             |       |   |   |   |   |
| Accounts receivable                                                                                           |   | 1,492                            |       | 2,732 |   | 1,862 |   |
| Inventories                                                                                                   |   | 288                              |       | 638 |   | 1,881 |   |
| Other current assets                                                                                          |   | (4                               | )          | 1,012 |   | 138 |   |
| Accounts payable                                                                                              |   | (2,674                           | )          | 810 |   | (1,175 | ) |
| Accrued liabilities                                                                                           |   | 546                              |       | (1,480 | ) | (231 | ) |
| Customer deposits                                                                                             |   | (1,129                           | )          | (704 | ) | (43 | ) |
| Deferred revenue                                                                                              |   | 509                              |       | (103 | ) | (214 | ) |
|                                                                                                          |   |                             | ** ** |   | ** ** |   | ** ** |
| Net cash provided by continuing operations                                                                    |   | 4,903                            |       | 5,299 |   | 2,687 |   |
|                                                                                                          |   |                             |       |   |   |   |   |
| Net loss from discontinued operations                                                                         |   | (1,005                           | )          | — |   | — |   |
|                                                                                                          |   |                             |       |   |   |   |   |
| Adjustments to reconcile net income (loss)  to net cash  provided by (used in)  discontinued operations: |   |                             |       |   |   |   |   |
| Depreciation and amortization                                                                                 |   | 135                              |       | — |   | — |   |
|                                                                                                          |   |                             |       |   |   |   |   |
| Changes in operating assets and liabilities  from discontinued operations:                                    |   |                             |       |   |   |   |   |
| Accounts receivable                                                                                           |   | 1,147                            |       | 597 |   | — |   |
| Inventories                                                                                                   |   | 38                               |       | 155 |   | — |   |
| Other current assets                                                                                          |   | 182                              |       | 288 |   | — |   |
| Accounts payable                                                                                              |   | (516                             | )          | (421 | ) | — |   |
| Accrued liabilities                                                                                           |   | (93                              | )          | (788 | ) | — |   |
| Customer deposits                                                                                             |   | (15                              | )          | — |   | — |   |
| Deferred revenue                                                                                              |   | (11                              | )          | (434 | ) | — |   |
|                                                                                                          |   |                             |       |   |   |   |   |
| Net cash used in discontinued operations                                                                      |   | (138                             | )          | (603 | ) | — |   |

 

F-7

----

 
|                                                                          |   | **Year Ended  December 31,** |       |
|-------------------------------------------------------------------------------|--------|-----------------------------------|------------|
|                                                                          |   | **2001**                          |       | **2002** |   | **2003** |   |
|                                                                          |   | **EUR**                           |       | **EUR** |   | **EUR** |   |
| **Cash flow from  investing activities**                                      |   |                              |       |   |   |   |   |
|                                                                          |   |                              |       |   |   |   |   |
| Property and equipment purchased, net                                         |   | 58                                |       | (1,427 | ) | (289 | ) |
| Restricted cash                                                               |   | 329                               |       | — |   | (403 | ) |
|                                                                          |   |                              |       |   |   |   |   |
| Net cash provided by (used in) investing activities  of continuing operations |   | 387                               |       | (1,427 | ) | (692 | ) |
|                                                                          |   |                              |       |   |   |   |   |
| Property and equipment purchased, net                                         |   | (50                               | )          | 165 |   | — |   |
|                                                                          |   |                              |       |   |   |   |   |
| Net cash used in investing activities of  discontinued operations             |   | (50                               | )          | 165 |   | — |   |
|                                                                          |   |                              |       |   |   |   |   |
| **Cash flow from  financing activities**                                      |   |                              |       |   |   |   |   |
|                                                                          |   |                              |       |   |   |   |   |
| Borrowings under short-term credit facilities                                 |   | 9,687                             |       | 6,541 |   | 1,665 |   |
| Repayments under short-term credit facilities                                 |   | (9,687                            | )          | (6,541 | ) | (1,665 | ) |
| Paid lease obligation                                                         |   | (289                              | )          | (485 | ) | (470 | ) |
| Preferred stock dividend                                                      |   | (980                              | )          | (572 | ) | — |   |
| Preferred stock withdrawal                                                    |   | (11,344                           | )          | — |   | — |   |
|                                                                          |   |                              | ** ** |   | ** ** |   | ** ** |
| Net cash used in financing activities of continuing  operations               |   | (12,613                           | )          | (1,057 | ) | (470 | ) |
|                                                                          |   |                              |       |   |   |   |   |
| (Increase) decrease cash position of discontinued  operations                 |   | (763                              | )          | 820 |   | — |   |
|                                                                          |   |                              |       |   |   |   |   |
| Impact of exchange rate on cash                                               |   | (1                                | )          | — |   | — |   |
|                                                                          |   |                              |       |   |   |   |   |
| Increase (decrease) in cash and cash equivalents of  continued operations     |   | (8,275                            | )          | 3,197 |   | 1,525 |   |
|                                                                          |   |                              |       |   |   |   |   |
| Cash and cash equivalents at beginning of year                                |   | 9,285                             |       | 1,010 |   | 4,207 |   |
| Cash and cash equivalents at end of year                                      |   | 1,010                             |       | 4,207 |   | 5,732 |   |
|                                                                          |   |                              |       |   |   |   |   |
| **Supplemental cash flow information**                                        |   |                              |       |   |   |   |   |
| Cash paid for interest                                                        |   | 163                               |       | 417 |   | 72 |   |

 

Theaccompanying notes are an integral part of these consolidated financialstatements.

 

F-8

----

 

TripleP N.V.

**Notes toConsolidated Financial Statements**

December 31,2003

 

**1**

**Organization and operations**

 

TripleP N.V. is a provider of high quality Information and Communication Technology(‘ICT’) infrastructure enterprise solutions to medium and large businesses andgovernmental agencies in The Netherlands. These solutions includeICT-consultancy, ICT-infrastructure systems delivery, project management andimplementation services, and operational ICT-infrastructure management andmaintenance services. The Company’s solutions are compatible with theestablished products of leading hardware manufacturers, including HewlettPackard, Toshiba, IBM, Sun Microsystems, Citrix, Cisco, Mitel, Microsoft,Novell and Oracle.

 

TheCompany’s Systems business comprises of reselling system and network products.The Company’s Services business comprises of infrastructure managementconsulting including system and network integration consulting, projectmanagement and implementation services as well as operational infrastructuremanagement services and maintenance services. In the home-care and publishingmarkets, the Company’s Services business also includes standard softwareimplementation, customization and maintenance services.

 

**2**

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

 

**Basis of Presentation**

 

Theconsolidated financial statements are prepared in accordance with accountingprinciples generally accepted in the United States (US GAAP).

 

Theconsolidated financial statements are prepared using discontinued operationsaccounting for the Belgian subsidiary, Triple P Belgium N.V./S.A., as theCompany decided to discontinue these operations in 2001 and no longer serve anycustomer in the Belgian healthcare market. Further reference is made to Note 5.

 

Unlessindicated otherwise, all financial information in the notes to the consolidatedfinancial statements exclude discontinued operations.

 

F-9

----

 

**Use of Estimates**

 

Thepreparation of financial statements in conformity with generally acceptedaccounting principles requires management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenses during the reporting periods.Actual results could differ from those estimates.

 

**Foreign currency translation**

 

Assetsand liabilities denominated in foreign currencies are translated into euros atthe year-end exchange rate. Transactions in foreign currencies are translatedat the exchange rate in effect at the time of the transaction. The exchange resultsare recorded under other income and expense in the statement of operations andwere insignificant for all periods presented.

 

TheCompany has no derivative instruments.

 

**Principles of Consolidation**

 

Allsignificant intercompany balances and transactions have been eliminated inconsolidation. The Company has no unconsolidated subsidiaries. The consolidatedfinancial statements include the financial statements of Triple P N.V. and thefollowing subsidiaries:

 
| **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              | %      |
| Mediasystemen B.V.                    |   | Haarlem - 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              | %      |

 

TheCompany has a minority interest of 41% in Es@s N.V./S.A., a Belgian ICT-company.The investment is accounted for under the equity method of accounting.

 

F-10

----

 

TheCompany dissolved the Triple P USA Inc subsidiary in 2003. This liquidation hadno material impact on the results of operations in 2002 or 2003.

 

**Cash and cash equivalents**

 

TheCompany considers investments in highly liquid debt instruments with originalmaturities of 90 days or less at the date of purchase to be cash equivalents.

 

**Restricted cash**

 

Allcash not directly accessible (legally restricted) is considered to berestricted cash. As of December 31, 2003, restricted cash relatesprimarily to bank guarantees issued for lease commitments and rental contractsand a bank guarantee issued to a customer in connection with the customer’sprepayment for services to be rendered during 2004.

 

**Accounts receivable**

 

Accountsreceivable are stated at face value, less an allowance for doubtful accounts.The Company provides an allowance for doubtful accounts based on management’speriodic review of accounts, including the delinquency of account balances.Accounts are considered delinquent when payments had not been received withinagreed upon terms and are written off when management determined thatcollection is not probable.

 

**Inventories**

 

Inventoriesare stated at the lower of cost (first-in, first-out) or market value andconsist principally of hardware purchased for resale and spare parts, less aprovision for obsolete and slow-moving inventories.

 

**Property and equipment**

 

Propertyand equipment is stated at the acquisition cost less straightline depreciation.The depreciation is calculated on the basis of acquisition cost less residualvalue and the estimated useful life of the related asset. The estimated usefullives are:

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

 

Maintenanceand repairs are charged to expense as incurred. Major betterments andimprovements which extend the useful life of the item are capitalized anddepreciated over the remaining useful life of the asset. The cost andaccumulated depreciation of property, plant and equipment retired or otherwisedisposed of are removed from the related accounts, and any residual values arecharged or credited to expense or income.

 

F-11

----

 

**Recoverability of long-lived assets**

 

TheCompany evaluates the carrying value of all long-lived assets whenever eventsor circumstances indicate the carrying value of assets may exceed theirrecoverable amounts. An impairment loss is recognized when the estimated futurecash flows (undiscounted and without interest) expected to result from the useof an asset are less than the carrying amount of the asset. Measurement of animpairment loss is based on fair value of the asset computed using discountedcash flow if the asset is expected to be held and used. Measurement of animpairment loss for an asset held for sale would be based on fair market valueless estimated costs to sell.

 

**Capital Leases**

 

TheCompany recognizes capital leases as assets and liabilities in the balancesheet at amounts equal at the inception of the lease to the fair value of theleased property or, if lower, at the present value of the minimum leasepayments. Lease payments are apportioned between the finance charge and thereduction of the outstanding liability. The finance charge is allocated toperiods during the lease term so as to produce a constant periodic rate ofinterest on the remaining balance of the liability for each period.

 

Acapital lease gives rise to amortization expense for the asset (included indepreciation expense) as well as a finance expense (included in other incomeand expenses, net) for each accounting period. The depreciation policy forleased assets is consistent with that for depreciable assets that are owned.

 

**Revenue recognition**

 

Systemsrevenues consist of revenues from the sale of ICT-infrastructure systems ofthird party hardware and third party software. For arrangements where theCompany does not install the systems, or installation is deemed to beinconsequential or perfunctory, revenues are recognized upon delivery whenevidence of an arrangement exists, title and risk of loss have been transferredfor both the third 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 revenues consist of revenues from maintenance and managementservice arrangements and consulting and implementation services. Revenues frommaintenance and management service arrangements are recognized ratably over theterm of the contract period once evidence of an arrangement exists, amounts arefixed and determinable and collection is deemed probable.  Revenues from consulting and implementationservices are recognized on a time and materials basis as services are beingperformed, when all other revenue recognition criteria are met.

 

F-12

----

 

Whenelements such as the sale of systems, maintenance and management servicearrangements and consulting and implementation services are contained in asingle arrangement, or in related arrangements with the same customer, theCompany allocates revenues to each element based on its relative fair value,provided that such element meets the criteria for treatment as a separate unitof accounting. 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.

 

Shippingand handling costs are included in cost of sales.

 

Customerdeposits represent cash received from customers in advance of fulfillingcustomer purchase orders. Revenues related to such transactions are recognizedwhen all revenue recognition criteria are met and other obligations fulfilled.A provision for warranty costs is recorded upon revenue recognition whenappropriate.

 

Deferredrevenue primarily 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.

 

**Stock Option Plan**

 

TheCompany applies the intrinsic value-based method of accounting prescribed byAccounting Principles Board (“APB”) Opinion 25, “Accounting for Stock Issued toEmployees”, and related interpretations, in accounting for its fixed plan stockoptions. Generally, compensation expense is only recorded on the date of grantif the current market price of the underlying stock exceeds the exercise price.Pro forma information regarding net income and net income per share is requiredby SFAS 123 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.

 
| **Net Income****(in thousands)**                                                           |   | **2001** |   | **2002** |   | **2003** |   |
|--------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                                                       |   | **EUR**  |   | **EUR**  |   | **EUR**  |   |
| As reported                                                                                |   | 2,215    |   | (520     | )      | 442      |   |
| Deduct: Total stock based compensation  expense under the fair value method for all awards |   | (146     | )      | (144     | )      | (217     | )      |
| Pro Forma                                                                                  |   | 2,069    |   | (664     | )      | 225      |   |

 
| **Net income per share**      |   | **2001** |   | **2002** |   | **2003** | ** ** |
|-------------------------------|--------|----------|--------|----------|--------|----------|------------|
|                          |   | **EUR**  |   | **EUR**  |   | **EUR**  |       |
| Basic and diluted as reported |   | 0.07     |   | (0.02    | )      | 0.01     |       |
| Basic and diluted Pro Forma   |   | 0.07     |   | (0.02    | )      | 0.01     |       |

 

F-13

----

 

**Income Taxes**

 

TheCompany accounts for income taxes following the asset and liability method,which requires recognition of deferred tax assets and liabilities for theexpected future tax consequences of events that have been included in thefinancial statements or tax returns. Under this method, deferred tax assets andliabilities are determined based on the difference between the financialstatements and tax bases of assets and liabilities using currently enacted taxrates.

 

**Fair Value of Financial Instruments**

 

TheCompany considers its cash and cash equivalents, restricted cash, accountsreceivable, accounts payable, leases and debt to be its only significantfinancial instruments and believes that the carrying amounts approximates fairvalue because of the short maturity of these instruments.

 

**Concentration of credit risk**

 

TheDepartment of Justice in The Netherlands accounted for approximately EUR 32.5million or 29%, EUR 30.7 million or 32% and EUR 17.3 million or 22% ofconsolidated net revenues in the years ended December 31, 2001, 2002 and2003, respectively. The Company has a master-contract with the Department ofJustice in The Netherlands based on which more than one hundred separatepurchasing units order ICT-systems.

 

**Comprehensive income (loss)**

 

Comprehensiveincome (loss) represents net income (loss) as well as additional othercomprehensive income (loss) consisting of translation adjustments andadjustments for minimum pension liabilities, net of tax.

 

**Net income (loss) per share**

 

Basicearnings per share are computed by dividing income available to commonstockholders by the weighted average number of common shares outstanding duringthe period.

 

Dilutedearnings per share have been adjusted for the assumed conversion of allpotentially dilutive securities. Potentially dilutive securities are those thatdo not have a current right to participate fully in earnings but could do so inthe future by virtue of their option or conversion rights. The exercise ofoptions or conversion of convertible securities is not assumed if the resultwould be antidilutive for the period being calculated.

 

F-14

----

 

**Net income (loss) per share:**

(in thousands of euros, except per shareamounts)

 
|                                                                                         |   | **Year Ended  December 31,** |   |
|----------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                         |   | **2001**                          |   | **2002** |   | **2003** |   |
| Weighted average common shares outstanding                                                   |   | 30,469                            |   | 30,469 |   | 30,469 |   |
| Dilutive stock options(1)                                                                    |   | —                            |   | — |   | 10 |   |
| Diluted number of shares                                                                     |   | 30,469                            |   | 30,469 |   | 30,479 |   |
|                                                                                         |   |                              |   |   |   |   |   |
| Net income (loss) from continuing  operations                                                |   | 4,246                             |   | (520 | ) | 442 |   |
| Loss from discontinued operations                                                            |   | (1,005                            | )      | — |   | — |   |
| Net income (loss)                                                                            |   | 3,241                             |   | (520 | ) | 442 |   |
| Preferred stock dividend                                                                     |   | (572                              | )      | — |   | — |   |
| Preferred stock withdrawal premium                                                           |   | (454                              | )      | — |   | — |   |
| Net income (loss) available to common  stockholders                                          |   | 2,215                             |   | (520 | ) | 442 |   |
|                                                                                         |   |                              |   |   |   |   |   |
| Net income (loss) per share from continuing  operations – basic and diluted             |   | 0.10                              |   | (0.02 | ) | 0.01 |   |
| Net income (loss) per share from  discontinued operations – basic and diluted           |   | (0.03                             | )      | — |   | — |   |
| Total net income (loss) per share available  to common stockholders – basic and diluted |   | 0.07                              |   | (0.02 | ) | 0.01 |   |

 

----

(1)          Options to purchase 976,725, 906,627 and1,203,387 shares of common stock were outstanding as of December 31, 2001,2002 and 2003, respectively. From these shares, only 10,000 were included inthe computation of diluted earnings per share in 2003 as the options’ exerciseprice was below the common shares’ average market price.

 

## **Reclassifications**

## ** **

Certainprior year balances have been reclassified to conform with current yearpresentation.

 

**Recent accounting pronouncements**

 

InJune 2002, the FASB issued SFAS 146, “Accounting for Costs Associated withExit or Disposal Activities.” This statement defines the accounting and reportingfor costs associated with exit or disposal activities and is effective for exitor disposal activities that are initiated after December 31, 2002, withearly application encouraged. SFAS 146 supersedes Emerging Issues Task Force(EITF) Issue 94-3, “Liability Recognition for Certain Employee TerminationBenefits and Other Costs to Exit an Activity.” The adoption of this standarddid not have a material impact on the Company’s financial position, result ofoperations or cash flows.

 

InNovember 2002, the FASB issued FAS Interpretation 45 (“FIN 45”),“Guarantor’s Accounting and Disclosure Requirements for Guarantees, IncludingIndirect Guarantees of Indebtedness of Others.” The disclosure provisions ofFIN 45 are effective for financial statements of interim or annual periods thatend after December 15, 2002. The provisions for initial recognition andmeasurement are effective on a prospective basis for guarantees that are issuedor modified after December 31, 2002, irrespective of a

 

F-15

----

 

guarantor’syear-end. The adoption of this standard did not have an impact on the Company’sfinancial position, result of operations or cash flows.

 

InNovember 2002, the Emerging Issues Task Force (“EITF”) reached a consensuson Issue 00-21, “Revenue Arrangements with Multiple Elements.” The provisionsof EITF issue 00-21 addresses certain aspects of accounting for arrangementsthat include multiple products or services. Accordingly, the application ofEITF 00-21 may impact the timing of revenue recognition as well as theallocation of revenues between products and services. The adoption of EITFissue 00-21 for transactions entered into after July 1, 2003 did not havea material impact on the Company’s financial position, result ofoperations or cash flows as the Company previously accounted for individualunits of its multiple element arrangements at their respective fair values.

 

In May 2003, the Emerging Issues Task Force (‘EITF”) reached aconsensus on Issue 03-5, “Applicability of AICPA Statement of Position 97-2,Software Revenue Recognition to Non-Software Deliverables in an ArrangementContaining More-Than-Incidental Software.” The FASB ratified this consensus inAugust 2003. EITF Issue 03-5 affirms that AICPA Statement of Position 97-2applies to non-software deliverables, such as hardware, in an arrangement ifsoftware is essential to the functionality of the non-software deliverables.The adoption of EITF Issue 03-5 did not have a material impact on the Company’sfinancial position, result of operations and cash flows.

 

 In January 2003, the FASBissued Interpretation No. 46, ‘‘Consolidation of Variable Interest Entities”(FIN 46 or Interpretation), which was subsequently revised inDecember 2003.  Among other things,FIN 46, as revised, clarifies existing accounting rules governing thecircumstances under which a company should consolidate another entity. FIN 46,as revised, requires “variable interest entities”, as defined, to beconsolidated by a company if that company is subject to a majority of expectedlosses of the entity or is entitled to receive a majority of expected residualreturns of the entity, or both. The company that is required to consolidate avariable interest entity is referred to as the entity’s primary beneficiary.The Interpretation also requires certain disclosures about variable interestentities that a company is not required to consolidate, but in which it has asignificant variable interest.

 

The consolidation and disclosure requirements apply immediately tovariable interest entities created after January 31, 2003. For allvariable interest entities created prior to February 1, 2003, FIN 46, asrevised, is effective for periods ending after March 15, 2004, except forentities that are considered special purpose entities, to which the provisionsapply as of December 31, 2003.

 

The Company does not have any special purpose entities within the scopeof FIN 46, as revised. The Company is not the primary beneficiary of anyvariable interest entities created after January 31, 2003, nor does theCompany expect the final adoption of the Interpretation to have a materialimpact on its financial position, cash flows, or results of operations.

 

F-16

----

 

**3**

**Balance sheet data**

 

**Property and equipment consist of the following:**

(in thousands of euros)

 
|                         |   | **At  December 31,** |   |
|------------------------------|--------|---------------------------|--------|
|                         |   | **2002**                  |   | **2003** |   |
| Office equipment             |   | 540                       |   | 493 |   |
| ERP-software                 |   | 1,084                     |   | 806 |   |
| Total property and equipment |   | 1,624                     |   | 1,299 |   |

 

**Changes in property and equipment are asfollows:**

(in thousands of euros)

 
|                              |   | **Office  Equipment** |   | **ERP  Software** |   | **Total** |   |
|-----------------------------------|--------|-----------------------|--------|-------------------|--------|-----------|--------|
|                              |   |                  |   |              |   |      |   |
| Book value January 1, 2002   |   | 803                   |   | 1,435             |   | 2,238     |   |
|                              |   |                  |   |              |   |      |   |
| Additions, net                    |   | 311                   |   | 1,116             |   | 1,427     |   |
| Depreciation                      |   | (574                  | )      | (448              | )      | (1,022    | )      |
| Write down                        |   | —                |   | (1,019            | )      | (1,019    | )      |
| Book value January 1, 2003   |   | 540                   |   | 1,084             |   | 1,624     |   |
|                              |   |                  |   |              |   |      |   |
| Additions, net                    |   | 289                   |   | —            |   | 289       |   |
| Depreciation                      |   | (336                  | )      | (278              | )      | (614      | )      |
| Book value December 31, 2003 |   | 493                   |   | 806               |   | 1,299     |   |
|                              |   |                  |   |              |   |      |   |
| Cost value                        |   | 1,179                 |   | 1,385             |   | 2,564     |   |
| Accumulated depreciation          |   | (686                  | )      | (579              | )      | (1,265    | )      |
| Book value December 31, 2003 |   | 493                   |   | 806               |   | 1,299     |   |

 

In2000, the Company selected an ERP-software solution.The latest phase of theimplementation was completed on May 1, 2002. The Company invested EUR 496,000,EUR 1,001,000 and EUR 1,116,000 in the years 2000, 2001 and 2002, respectively,for this technology.

 

Duringthe last quarter of 2002, certain separately identifiable components of theERP-software solution were written off as such components were abandoned by theCompany. This write off was a direct result of the streamlining andrestructuring of the Company through which the Company’s three former divisionswere integrated into a single organization with one software system. Totalimpairment recorded in 2002 in connection with the write off of assets in thisrespect was EUR 1,019,000 of which EUR 655,000 was recorded as a restructuringcharge. The remaining EUR 364,000 was recorded as a general and administrativeexpense (see note 4).

 

F-17

----

 

**Inventory consist ofthe following:**

(in thousands of euros)

 
|                              |   | **At  December 31,** |   |
|-----------------------------------|--------|---------------------------|--------|
|                              |   | **2002**                  |   | **2003** | ** ** |
| Trade goods                       |   | 2,603                     |   | 917 |   |
| Spare parts and other inventories |   | 533                       |   | 338 |   |
| Total inventories                 |   | 3,136                     |   | 1,255 |   |

 

**Prepaid expenses and other current assets consists of thefollowing:**

(inthousands of euros)

 
|                                            |   | **At  December 31,** |   |
|-------------------------------------------------|--------|---------------------------|--------|
|                                            |   | **2002**                  |   | **2003** |   |
| Prepaid Pension (see Note 8)                    |   | —                    |   | 263 |   |
| Prepaid expenses                                |   | 283                       |   | 232 |   |
| Deferred tax asset                              |   | 454                       |   | 571 |   |
| Other receivables                               |   | 1,587                     |   | 1,120 |   |
| Total prepaid expenses and other current assets |   | 2,324                     |   | 2,186 |   |

 

**Accrued liabilities consist of the following:**

(inthousands of euros)

 
|                                         |   | **At  December 31,** |   |
|----------------------------------------------|--------|---------------------------|--------|
|                                         |   | **2002**                  |   | **2003** |   |
| Accrued payroll (bonus, vacation allowances) |   | 1,791                     |   | 1,830 |   |
| Accrued taxes and social security premiums   |   | 1,806                     |   | 1,310 |   |
| Other accrued liabilities                    |   | 2,070                     |   | 2,296 |   |
| Total accrued liabilities                    |   | 5,667                     |   | 5,436 |   |

 

**Other long-term liabilities:**

(inthousands of euros)

 
|                              |   | **At  December 31,** |   |
|-----------------------------------|--------|---------------------------|--------|
|                              |   | **2002**                  |   | **2003** |   |
| Deferred gain on sale of building |   | 173                       |   | 23 |   |
| Financial lease obligation        |   | 208                       |   | — |   |
| Long-term loan                    |   | 344                       |   | 120 |   |
| Total other long-term liabilities |   | 725                       |   | 143 |   |

 

In1994, the Company sold a building in a sale leaseback transaction. The deferredgain represents the difference between the sale price as agreed upon by theCompany with a third party and the acquisition price of the building. Thedeferred gain is being amortized over the contractual lease term of thebuilding (10 years). The lease contract expires in September 2004.

 

TheCompany entered into a loan agreement with Nationale Nederlanden. Repayment ofthe loan is in three annual installments ending on January 1, 2005.Interest on the loan accrues 4%.

 

F-18

----

 

**4**

##### **Restructuring**

##### ** **

In2002, restructuring and impairment charges were recorded in accordance withEITF (Emerging Issues Task Force) Issue 94-3, “Liability Recognition forCertain Employee Termination Benefits and Other Costs to Exit an Activity(including Certain Costs Incurred in a Restructuring),” SFAS 144, “Accountingfor the Impairment or Disposal of Long-Lived Assets” and SFAS 112, “Employers’Accounting for Postemployment Benefits.”

 

In2003, the Company applied SFAS 146, “Accounting for Costs Associated with Exitor Disposal Activities” for restructuring charges and SFAS 112, “Employers’Accounting for Postemployment Benefits.” SFAS 146 supercedes EITF Issue 94-3for plans approved after December 31, 2002.

 

**2002 restructuring**

 

TheManagement Board, with the approval of the Supervisory Board, furtherstreamlined and restructured the Company in the last quarter of 2002. Legally,financially and organizationally, the Company’s three former divisions wereintegrated into a single organization. As a result of this restructuring, theCompany incurred a restructuring charge of EUR 1,370,000 for the impairment ofcertain unused assets, the termination of employee contracts and permanentlyvacated leasehold facilities. As a result of these measures, the Company’sannual fixed costs decreased by about EUR 1.5 million commencing in the 2003fiscal year. A discussion of the components of 2002 restructuring chargefollows.

 

*Impairment of certain assets*

 

TheCompany’s three former divisions have been integrated into a singleorganization with one software system. As a result the Company has written offcertain separately identifiable elements of the ERPsystem that will no longerbe used. Total losses incurred in 2002 in connection with the write off ofassets as a direct result of the restructuring were EUR 655,000.

 

*Employee contract termination*

 

Inconnection with the 2002 restructuring the Company decided to terminate 29employee contracts. The total amount provided for and charged to expense in2002 with respect to this reduction in workforce force was EUR 550,000 which isincluded in the restructuring reserve at December 31, 2002. Paymentsrelated to employee contract termination were EUR 550,000 in 2003.

 

*Permanently vacated leasehold facilities*

 

Asa result of the reduction in workforce in December 2002, the Companypermanently vacated certain office space in its main building. Accordingly,management provided for the associated remaining lease obligations of EUR165,000, which is net of expected sub leases. Payment relating to permanentlyvacated leasehold facilities were EUR 165,000 in 2003.

 

F-19

----

 

**2003 restructuring**

 

Duringthe second quarter of 2003, the Company implemented additional cost reductionmeasures in response to lower than expected levels of net revenues in the firsthalf of 2003. In the second quarter of 2003 the Company terminated theemployment of 43 of its 373 employees and, as a result, recorded a EUR1,281,000 restructuring expense of which EUR 1,075,000 has been paid in 2003.As a result of these additional measures, the Company’s annual expenses areexpected to decrease by approximately EUR 2.5 million which is expected to befully reflected in operating results commencing in the second quarter of 2004.The implementation of the second quarter 2003 restructuring was mainlycompleted at year end 2003. The Company expects to make additional payments ofapproximately EUR 205,000 in the first half of 2004 relating to thisrestructuring plan.

 

**5**

**Divestitures, discontinued operations and liquidation of USsubsidiary**

 

**Divestitures and discontinued operations**

 

Duringthe year 2001, the Company divested its ITC independent training centerbusiness. This divestiture had no significant impact on the results ofoperations.

 

InDecember 2001, the Company decided to discontinue operations of itsBelgian subsidiary, Triple P Belgium N.V./SA. As a result of this decision thecompany no longer serves any customer in the Belgian healthcare market. TheCompany provided for the estimated loss on disposal of the discontinued Belgianoperations an amount of EUR 628,000 representing EUR 578,000 net asset value ofthe Belgian subsidiary and EUR 50,000 estimated disposal expense. OnFebruary 11, 2002 the Company sold its Belgian subsidiary to the Belgianmanagement. The actual loss on disposal in 2002 did not differ from the amountprovided for in 2001.

 

Theconsolidated financial statements of the Company for fiscal year 2001 have beenreclassified to account for the disposal of the Belgian subsidiary as adiscontinued operation. Accordingly, the net revenues, costs and expenses,assets and liabilities and cash flows associated with the Belgium subsidiaryhave been excluded from the respective captions in the accompanyingconsolidated balance sheet, statement of operations and statement of cashflows.

 

Total net sales and operating results of the Belgian subsidiary priorto the date of discontinuance were EUR 8.0 million and EUR (0.4 million)respectively for the year ended December 31, 2001.

 

Inthe first quarter of 2002 the Company disposed of its interest in the Belgiansubsidiary. No expenses were incurred other than the expenses accrued for atDecember 31, 2001. As of December 31, 2002 there were no remainingassets or liabilities for discontinued operations.

 

F-20

----

 

**Liquidation of US subsidiary**

 

Alsoduring 2003, the Company decided to stop financing its US subsidiary, Triple PUSA Inc. In July 2002, the Company ceased operations and began the processto legally dissolve the subsidiary which has been finalized in 2003. Thisliquidation had no material impact on the results of operations in 2002 or2003.

 

**6**

**Borrowing arrangements**

 

**Short-term borrowings**

 

TheCompany has a euro denominated revolving credit facility agreement with IFNFinance B.V. (ABN-AMRO) whereby the Company may borrow up to 60% of eligibleaccounts receivable to a maximum of EUR 6 million. Borrowings under thisfacility are secured by the Company’s accounts receivable. Furthermore theCompany agreed on a restriction of dividend distributions to the holders ofcommon stock when equity is less than 15% of total assets. Interest on suchborrowings accrues at the European Central Bank’s discount rate plus 1.5% witha minimum of 4.25% and is payable monthly. In addition, the Company pays abasic fee of 0.04% of total net revenues including VAT. This credit agreement,which took effect 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 May, 2005. The agreement may be terminated at the end of each period byeither party upon expiration of a 90-day notice period.

 

Asof December 31, 2002 and 2003, no amounts were outstanding under thisfacility with IFN Finance B.V.

 

F-21

----

 

**7**

**Commitments and contingencies**

 

**Capital leases**

 

TheCompany and its subsidiaries lease ERP-software including implementationexpenses under a capital lease with a lease term of three years that willexpire in 2004. Interest on the capital leases accrues between 5.809% and7.695%.

 

**Analysis of assets under capital lease**

(inthousands of euros)

 
|                     |   | **At  December 31,** |   |
|--------------------------|--------|---------------------------|--------|
|                     |   | **2002**                  |   | **2003** |   |
| Property at cost         |   | 1,497                     |   | 1,497 |   |
| Accumulated depreciation |   | (772                      | )      | (969 | ) |
| Net book value           |   | 725                       |   | 528 |   |

 

**Future minimum lease payments for the above capital leases**

(inthousands of euros)

 
|                                    |   | **At  December 31,** |   |
|-----------------------------------------|--------|---------------------------|--------|
|                                    |   | **2002**                  |   | **2003** |   |
| 2003                                    |   | 501                       |   | — |   |
| 2004                                    |   | 214                       |   | 214 |   |
| Total minimum lease obligations         |   | 715                       |   | 214 |   |
|                                    |   |                      |   |   |   |
| Interest                                |   | (37                       | )      | (6 | ) |
| Present value of minimum obligations    |   | 678                       |   | 208 |   |
|                                    |   |                      |   |   |   |
| Capital lease obligations  Current |   | 470                       |   | 208 |   |
| Non-current                             |   | 208                       |   | — |   |
| Total                                   |   | 678                       |   | 208 |   |

 

**Operating leases**

 

TheCompany and its subsidiaries lease their current facilities and automobilesunder operating leases that expire at various dates through the year 2007. Aportion of the leasehold facilities are subleased.

 

Totalgross rent expense for the years ended December 31, 2001, 2002 and 2003was approximately EUR 3,727,000, EUR 4,365,000 and EUR 3,962,000, respectively.Total income from sub-leases for the years ended December 31, 2001, 2002and 2003 were approximately EUR 422,000, EUR 373,000 and EUR 506,000respectively. Total net rent expense for the years ended December 31,2001, 2002 and 2003 were approximately EUR 3,305,000, EUR 3,993,000 and EUR3,456,000.

 

F-22

----

 

**Future minimum annual rental payments undernon-cancelable operating leases as of December 31, 2003**

(inthousands of euros):

 
|       |   | **Gross** |   | **Sub-leased** |   | **Net** |   |
|------------|--------|-----------|--------|----------------|--------|---------|--------|
| 2004       |   | 3,021     |   | 360            |   | 2,661   |   |
| 2005       |   | 1,591     |   | 416            |   | 1,175   |   |
| 2006       |   | 1,112     |   | 424            |   | 688     |   |
| 2007       |   | 498       |   | 253            |   | 245     |   |
| 2008       |   | —    |   | —         |   | —  |   |
| Thereafter |   | —    |   | —         |   | —  |   |
|       |   | 6,222     |   | 1,453          |   | 4,769   |   |

 

**Bank guarantees**

 

Thebank guarantees provided by the Company’s bank on behalf of the Company and itssubsidiaries to third parties amount to EUR 947,000 and relate to bankguarantees issued for lease commitments and rental contracts and a bankguarantee from a customer to secure a prepaid amount.

 

**Bank guarantees and its expiration dates**

(inthousands of euros):

 
|            |   | **At  December 31, 2003** |   |
|-----------------|--------|--------------------------------|--------|
|            |   | **Total**                      |   | **<1 year** |   | **1-5 year** |   | **>5 year** |   |
|            |   |                           |   |   |   |   |   |   |   |
| Bank guarantees |   | 947                            |   | 741 |   | 196 |   | 10 |   |

 

Inconnection with these bank guarantees amounting to EUR 947,000, the Companyholds restricted cash of an amount of EUR 462,000 at the bank. The remainingamount of EUR 485,000 is deducted from the maximum borrowings under theCompany’s credit facilities at the bank.

 

**Litigation**

 

TheCompany is engaged as plaintiff or defendant in several lawsuits in TheNetherlands and Belgium originating before 2002. These lawsuits relateprimarily to disputed contracts and a Belgian income tax claim. Although theCompany is vigorously defending against these claims it has establishedreserves to an amount of approximately EUR 850,000 relating to specificlawsuits, which represent estimates of its probable liabilities with respect tothese specific claims. As this litigation may take several years to complete,future events could require management to make significant adjustments forrevisions to these estimates. The Company does not believe that based oncurrent judgment and estimates the outcome in any of these lawsuitsindividually or in the aggregate would have a material adverse impact on theCompany’s business, results of operations or financial condition.

 

F-23

----

 

**8**

**Employee benefit plans**

 

TheCompany has a defined benefit pension plan and a defined contribution pensionplan.

 

**Defined Benefit Plan**

 

Underthe Company’s plan, employee benefits are based on length of service and finalyearly pay reduced by government provided retirement benefits. The weightedaverage discount rate used in determining the actuarial present value of projectedbenefit obligations was 5.75%, 5.25% and 5.00% for 2001, 2002 and 2003,respectively. The assumed long-term rate of return on assets was 5% for 2001,2002 and 2003. The estimated future salary increase was on average 3% for 2001,2002 and 2003.  The Company has no riskrelating to the return on plan assets as this risk is transferred to a pensioncompany (third party) that guarantees return on plan assets.

 

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

(inthousands of euros)

 
|                                                         |   | **At  December 31,** |   |
|--------------------------------------------------------------|--------|---------------------------|--------|
|                                                         |   | **2002**                  |   | **2003** |   |
| Vested benefit obligations                                   |   | 3,841                     |   | 4,504 |   |
| Non-vested benefit obligations                               |   | —                    |   | — |   |
| Accumulated benefit obligations                              |   | 3,841                     |   | 4,504 |   |
|                                                         |   |                      |   |   |   |
| Projected benefit obligations for services rendered  to date |   | 4,064                     |   | 4,634 |   |
| Less: Plan assets at fair value, primarily  debt-securities  |   | 3,813                     |   | 4,343 |   |
| Projected benefit obligations in excess of plan  assets      |   | 251                       |   | 291 |   |
| Unrecognized transition loss                                 |   | (83                       | )      | (67 | ) |
| Unrecognized actuarial gain (loss)                           |   | 91                        |   | (487 | ) |
| Accrued (prepaid) pension cost                               |   | 259                       |   | (263 | ) |

 

SFAS 87 provides that a minimum liability should be recorded as theaccumulated benefit obligations exceed plan assets in case of a prepaid pensioncost.

 

F-24

----

 

**Additional minimum liability of the Company’sdefined benefit plan is as follows**

(in thousands of euros)

 
|                                                       |   | **At  December 31,****2003** |   |
|------------------------------------------------------------|--------|-----------------------------------|--------|
| Accumulated benefit obligations                            |   | 4,504                             |   |
| Less: Plan assets at fair value, primarily debt-securities |   | 4,343                             |   |
| Accumulated benefit obligations in excess of plan assets   |   | 161                               |   |
|                                                       |   |                              |   |
| Minimum liability                                          |   | 161                               |   |
| Accrued (prepaid) pension cost                             |   | (263                              | )      |
| Additional minimum liability                               |   | 424                               |   |
|                                                       |   |                              |   |
| Additional minimum liability                               |   | 424                               |   |
| Intangible asset                                           |   | (67                               | )      |
| Charge to other comprehensive income before  income taxes  |   | 357                               |   |
| Income tax benefit                                         |   | (128                              | )      |
| Charge to other comprehensive income after  income taxes   |   | 229                               |   |

 

**Net pension plan costs are as follows**

(inthousands of euros)

 
|                                           |   | **Year Ended  December 31,** |   |
|------------------------------------------------|--------|-----------------------------------|--------|
|                                           |   | **2001**                          |   | **2002** |   | **2003** |   |
| Service cost                                   |   | 36                                |   | 40 |   | 50 |   |
| Interest cost on projected benefit obligations |   | 183                               |   | 201 |   | 218 |   |
| Expected return on plan assets                 |   | (159                              | )      | (182 | ) | (197 | ) |
| Other, net                                     |   | (12                               | )      | 9 |   | 16 |   |
| Net pension cost                               |   | 48                                |   | 68 |   | 87 |   |

 

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

(inthousands of euros)

 
|                                               |   | **At  December 31,** |   |
|----------------------------------------------------|--------|---------------------------|--------|
|                                               |   | **2002**                  |   | **2003** |   |
| Projected benefit obligations at beginning of year |   | 3,433                     |   | 4,064 |   |
| Service cost                                       |   | 79                        |   | 85 |   |
| Interest cost                                      |   | 201                       |   | 218 |   |
| Actuarial losses                                   |   | 351                       |   | 346 |   |
| Benefits paid                                      |   | —                    |   | (79 | ) |
| Projected benefit obligations at end of year       |   | 4,064                     |   | 4,634 |   |

 

F-25

----

 

## **Changes in plan assets are as follows**

(inthousands of euros)

 
|                             |   | **At  December 31,** |   |
|----------------------------------|--------|---------------------------|--------|
|                             |   | **2002**                  |   | **2003** |   |
| Plan assets at beginning of year |   | 3,592                     |   | 3,813 |   |
| Actual return on plan assets     |   | 182                       |   | (35 | ) |
| Employer contributions           |   | —                    |   | 609 |   |
| Plan participants contributions  |   | 39                        |   | 35 |   |
| Benefits paid                    |   | —                    |   | (79 | ) |
| Plan assets at end of year       |   | 3,813                     |   | 4,343 |   |

 

**Defined contribution plan**

 

Underthe Company’s defined contribution plan the employer contribution is based onthe age of employees and final yearly pay reduced by government providedretirement benefits (gross pension salary). The employers contribution variesbetween 5.5% and 19.5% of gross pension salaries, increasing with the age of employees.

 

Underthis plan the Company contributed EUR 491,000, EUR 658,000 and EUR 675,000 in2001, 2002 and 2003, respectively.

 

**9**

**Stock option plans**

 

TheCompany has reserved an aggregate of 2,500,000 common shares for issuance underits 1996 Stock Option Plan for employees (the ‘Employee Plan’). The EmployeePlan provides for the grant of options to employees (including officers) andconsultants of the Company and its affiliates. The Employee Plan provides thatthe exercise price of options granted under the Plan shall be 100% of theaverage fair market value of the common shares during a period of five tradingdays prior to the date of grant plus 0%, 10%, 20% or 30% at the optionee’schoice. The exercise price is determined at date of grant. All options underthe plan are immediately exercisable. The maximum term of an option grantedunder the Employee Plan is five years from the date of grant. Resale to thirdparties of shares purchased through exercise of an option granted under theEmployee Plan is restricted. Only 25% of such shares may be sold in the yearfollowing the date the option was granted and in each of the three yearsfollowing the first anniversary of the date of grant the optionee gains theright to sell an additional 25% of the shares covered by the option. In theevent of termination of an optionee’s employment or consulting arrangement, alloptions that have not been exercised terminate. The Employee Plan willterminate in September 2005.

 

TheCompany has reserved 200,000 common shares for issuance under its 1995 DirectorOption Plan (the

 

F-26

----

 

‘DirectorPlan’). The  Director Plan provides forautomatic grants of stock options to Supervisory Directors of the Company. 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 (a ‘First Option’). In addition, each SupervisoryDirector is automatically granted an option to purchase 10,000 common shares (a‘Subsequent Option’) on January 1 of each year, provided that he or shehas served on the Board for at least three months as of that date. All optionsgranted under the Director Plan are exercisable immediately. Under the terms ofthe Director Plan, the exercise price of options granted to SupervisoryDirectors is 100% of the average fair market value of the common shares on thedate of grant. Shares purchased upon exercise of a Subsequent Option aresubject to a repurchase right. The Company may repurchase at the exercise priceof the Subsequent Option any shares purchased by the optionee pursuant to theSubsequent Option if the optionee ceases to be a Supervisory Director of theCompany. This repurchase right lapses as to one twelfth of the shares subjectto the subsequent Option for each month that passes after 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.

 

AtDecember 31, 2003, options to purchase 1,203,387 common shares areoutstanding, comprising 1,173,387 options under the Employee Plan and 30,000options under the Director Plan.

 

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

 
|                                |   | **Number of  Shares** |   | **Outstanding  Options  Weighted Average  Exercise Price US$** |   |
|-------------------------------------|--------|-----------------------|--------|----------------------------------------------------------------|--------|
| Balance as of 1 January 2001   |   | 1,690,138             |   | 2.25                                                           |   |
| Exercised                           |   | —                |   | —                                                         |   |
| Forfeited                           |   | (939,913              | )      | 2.33                                                           |   |
| Expired                             |   | —                |   | —                                                         |   |
| Granted                             |   | 226,500               |   | 0.98                                                           |   |
| Balance as of 31 December 2001 |   | 976,725               |   | 1.87                                                           |   |
| Exercised                           |   | —                |   | —                                                         |   |
| Forfeited                           |   | (416,798              | )      | 1.77                                                           |   |
| Expired                             |   | (216,325              | )      | 2.11                                                           |   |
| Granted                             |   | 563,025               |   | 0.82                                                           |   |
| Balance as of 31 December 2002 |   | 906,627               |   | 1.21                                                           |   |
| Exercised                           |   | —                |   | —                                                         |   |
| Forfeited                           |   | (233,240              | )      | 1.36                                                           |   |
| Expired                             |   | —                |   | —                                                         |   |
| Granted                             |   | 530,000               |   | 0.81                                                           |   |
| Balance as of 31 December 2003 |   | 1,203,387             |   | 1.01                                                           |   |

 

F-27

----

 
| **Range of  Exercise  Prices US$** |   | **Number  Outstanding at  31 December 2003** |      | **Weighted  Average  Remaining Life** |   | **Weighted  Exercise  Price US$** |   |
|------------------------------------|--------|---------------------------------------------------|-----------|---------------------------------------|--------|-----------------------------------|--------|
| 0.35                               | - 0.99 |                                              | 1,001,747 |                                  | 3.12   |                              | 0.85   |   |
| 1.00                               | - 1.49 |                                              | —    |                                  | — |                              | — |   |
| 1.50                               | - 1.99 |                                              | 187,640   |                                  | 0.64   |                              | 1.80   |   |
| 2.00                               | - 2.49 |                                              | 12,000    |                                  | 0.56   |                              | 2.29   |   |
| 2.50                               | - 2.99 |                                              | —    |                                  | — |                              | — |   |
| 3.00                               | - 3.99 |                                              | 2,000     |                                  | 0.03   |                              | 3.31   |   |
| 0.50                               | - 3.99 |                                              | 1,203,387 |                                  | 2.71   |                              | 1.01   |   |

 

Alloptions granted under the plans are exercisable immediately.

 

Aspermitted under SFAS 123, the Company has elected to follow APB Opinion 25 andrelated interpretations in accounting for stock-based awards to employees.Under APB 25, the Company has recorded no compensation expense because at thegrant date of the option the fair value of the underlying shares is equal to orless than the exercise price. Pro forma information regarding net income andnet income per share is required by SFAS 123 for awards grantedafter June 30, 1995, as if the Company had accounted for its stock-basedawards to employees under the fair value method of 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.

 
| **Net Income  (in thousands)**                                                                    |   | **2001** |   | **2002** |   | **2003** |   |
|---------------------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                                                              |   | **EUR**  |   | **EUR**  |   | **EUR**  |   |
| As reported                                                                                       |   | 2,215    |   | (520     | )      | 442      |   |
| Deduct: Total stock based compensation  expense  under the fair value method  for all awards |   | (146     | )      | (144     | )      | (217     | )      |
| Pro Forma                                                                                         |   | 2,069    |   | (664     | )      | 225      |   |

 
| **Net income per share**         |   | **2001** |   | **2002** |   | **2003** |   |
|----------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                             |   | **EUR**  |   | **EUR**  |   | **EUR**  |   |
| Basic and diluted(1) as reported |   | 0.07     |   | (0.02    | )      | 0.01     |   |
| Basic and diluted(1) Pro Forma   |   | 0.07     |   | (0.02    | )      | 0.01     |   |

 

----

(1)                                  Options to purchase976,725, 906,627 and 1,203,387 shares of common stock were outstanding as ofDecember 31, 2001, 2002 and 2003 respectively. From these shares, only10,000 were included in the computation of diluted earnings per share in 2003as the options’ exercise price was below the common shares’ average marketprice.

 

F-28

----

 

Thefair value of the Company’s stock option awards to employees was estimatedusing the Black-Scholes option-pricing model assuming no dividends and thefollowing weighted-average assumptions:

 
|                                 |   | **2001** |   | **2002** |   | **2003** |   |
|--------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Expected life (in years)             |   | 4.40     |   | 4.03     |   | 4.25     |   |
| Expected stock price volatility rate |   | 80       | %      | 77       | %      | 93       | %      |
| Risk-free interest rate              |   | 4.50     | %      | 4.50     | %      | 3.26     | %      |

 

Foroptions granted in the twelve months ended December 31, 2003 with anexercise price greater than the market price of the shares at grant date, theweighted average exercise price and fair value at grant date were estimated atUS$ 0.81 and US$ 0.41, respectively. In the twelve months endedDecember 31, 2003 no options have been granted with an exercise priceequal to market price of the shares at the grant date.

 

**10**

**Income Taxes**

 

**Income (loss) from continuing operations before income taxesis as follows:**

(inthousands of euros)

 
|                              |   | **At  December 31,** |   |
|-----------------------------------|--------|---------------------------|--------|
|                              |   | **2001**                  |   | **2002** |   | **2003** |   |
| The Netherlands                   |   | 4,266                     |   | (520 | ) | 442 |   |
| Rest of world                     |   | (20                       | )      | — |   | — |   |
| Income (loss) before income taxes |   | 4,246                     |   | (520 | ) | 442 |   |

 

**Effective tax rate of continuing operations is as follows:**

(inthousands of euros)

 
|                                             |   | **At  December 31,** |   |
|--------------------------------------------------|--------|---------------------------|--------|
|                                             |   | **2001**                  |   | **2002** |   | **2003** |   |
| Pretax income (loss) from continuing operations  |   | 4,246                     |   | (520 | ) | 442 |   |
| Statutory tax rate                               |   | 35.0                      | %      | 34.5 | % | 34.5 | % |
| Expected tax expense (benefit) at statutory rate |   | 1,486                     |   | (179 | ) | 152 |   |
| Tax benefit on liquidation of Triple P USA       |   |                      |   |   |   | (380 | ) |
| Change in valuation allowance                    |   | (1,486                    | )      | 179 |   | 228 |   |
| Tax expense from continuing operations           |   | —                    |   | — |   | — |   |
| Effective tax rate                               |   | 0                         | %      | 0 | % | 0 | % |

 

F-29

----

 

**Deferred tax assets are as follows:**

(inthousands of euros)

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

 

Theprovision for income taxes is calculated based on the statutory tax rate of theapplicable fiscal entities for the years ended December 31, 2001, 2002 and2003. These calculations consider the relevant local regulations for non-taxdeductible items.

 

Theoperating loss carry forwards available at December 31, 2003 relate to entitiesin The Netherlands. The statutory tax rate for The Netherlands is 34.5%. Theeffective tax rate for the Company is 0%. In 2001, the difference between thestatutory tax rate and the effective tax rate is primarily caused byutilization of tax loss carry forwards. In 2002, the difference between thestatutory rate and the effective tax rate was caused by the establishment ofadditional tax loss carryforwards. In 2003, the differences between thestatutory rate and the effective rate was primarily due to fiscal losses inconnection with liquidation of the subsidiary Triple P USA Inc.

 

Deferredtax assets and liabilities determined in accordance with FASB Statement No.109, Accounting for Income Taxes, reflect the impact of temporary differencesbetween amounts of assets and liabilities for tax and financial reportingpurposes.  Tax laws measure such amountsand the expected future tax consequences of net operating loss carryforwards.  Temporary differences and net operating losscarryforwards, which give rise to deferred tax assets and liabilitiesrecognized in balance sheet are as shown above.

 

Theutilization of the Company’s tax loss carryforwards is subject to various localconditions and regulations including, in many cases, the requirement that the entityutilizing the tax loss carry forwards be the entity that incurred the taxlosses. The net operating loss carry forwards have no expiration date.

 

Managementhas evaluated evidence impacting the realizability of its deferred tax assets,which primarily consists of net operating loss carryforwards. Management hasconsidered the Company’s history and forecasts for the future and concludedthat it is more likely than not that benefits of these tax loss carry forwardsexceeding EUR 571,000 will not be realized in the near term. As a result thecompany recorded a valuation allowance for the deferred tax assets exceedingEUR 571,000. The deferred tax asset is accounted for under prepaid expenses andother current assets.

 

F-30

----

 

**11**

**Capital stock withdrawal**

 

AtDecember 31, 2001, there were 24,000,000 Preferred shares outstanding withno stated term. Each Preferred Share was entitled to a cumulative annualdividend of approximately EUR 0.04 and was entitled to cast one vote atmeetings of the Company’s shareholders. The holders of the Preferred Shares hadno right to require redemption of such shares. Subsequent to the issuance ofthe Preferred Shares the Company was granted an irrevocable offer by theholders of the Preferred Shares to withdraw the Preferred Shares at any timefor an amount equal to EUR 10.9 million plus (i) accrued and unpaid dividendsto the date of withdrawal, and (ii) a withdrawal premium of EUR 0.45 million.Upon redemption of the Preferred Shares, the Investor Call Option, as definedbelow, would have been terminated upon payment of EUR 0.45 million. Inaddition, the Company issued to the investor purchasing the Preferred Shares anoption (the ‘Investor Call Option’) to purchase 360,000 shares of newly issuedcommon stock, representing 90% of the outstanding shares of common stock of theCompany’s Triple P Nederland B.V. subsidiary (‘TPN’). The option would haveexpired August 26, 2002. TPN owns a substantial majority of the assets ofthe Company and generates a substantial portion of the Company’s net revenuesand net income. The Investor Call Option provided that the investor had theright to purchase such 360,000 shares of TPN for an aggregate purchase price ofEUR 1.8 million. The Investor Call Option could have been exercised in full atany time without restrictions upon observance of the three months noticeperiod. In addition, if the investor exercised the Investor Call Option, theinvestor had the right to sell all shares of TPN. In such event, the Companyhad the option (the ‘Put Option’) to require the investor to purchase theremaining 10% of the shares of TPN held by the Company. The aggregate purchaseprice that the investor was obligated to pay under the Put Option would bedetermined pursuant to a formula based upon the proceeds of the sale of all TPNshares.

 

In2001 Triple P N.V. effected a financial restructuring. The Company withdrew alloutstanding Preferred Shares on August 1, 2001 for an aggregate EUR 11.8million, representing paid-in capital of EUR 10.9 million, an agreed uponwithdrawal premium of EUR 0.45 million and EUR 0.45 million for thecancellation of the Investor Call Option. The Company financed this withdrawalwith available surplus cash and by borrowings from its revolving creditfacility. By withdrawing these Preferred Shares Triple P N.V. eliminated itsobligation to pay a yearly dividend of EUR 1.0 million on the Preferred Shares.As of December 31, 2001, the Company had the obligation to pay a preferreddividend of EUR 572,000 related to the year 2001. This preferred dividend wasincluded in shareholders’ equity as per December 31, 2001.

 

During2002 the Company paid the final installment of preferred dividend related to2001 of EUR 572,000 to the former holders of Preferred Shares.

 

Asof December 31, 2003 the Company had authorized 43,750,000 Common Sharesand 19,750,000 Preferred Shares and as of that date 30,469,345 Common Sharesand no Preferred Shares were outstanding.

 

F-31

----

 

**12**

**Related Party Transactions**

 

Exceptas described below, none of the members of the Company’s directors or officershas or has had since January 1, 2003, any interest in any transactionwhich 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 any Boardmember or Supervisory Board member and the Company has not provided anyguarantee for the benefit of any such person.

 

Mr.Khaleghi provides advisory and management services at a rate of EUR 2,000 perday to strengthen the Company’s Board of Directors on an interim basis. Theamount of cash compensation of Mr. Khaleghi paid and accrued for servicesin all capacities for the year ending December 31, 2003 was EUR 279,000.

 

**13**

**Segment information**

 

TheCompany operates in the Information and Communication Technology (‘ICT’)industry offering computing and network products (‘Systems’) and providingconsulting, project management and implementation services as well asoperational management and maintenance services (‘Services’) primarily in TheNetherlands. As of January 1, 2003, the Company reorganized from threedivisions into a single organization with Systems and Services business lines,which have been determined to be reportable segments. As a result of thisrestructuring, the Company restated its segment information for all yearspresented.

 

TheCompany evaluates performance based on several factors. Primary financialmeasures are net revenues and gross profit by business line. Assets are notseparated by business lines. The accounting policies of the business lines arethe same as those described in the summary of significant accounting policiesin Note 2 of the Notes to the Consolidated Financial Statements. There are nosales between business lines of the Company.

 

F-32

----

 

**Summarized financial information concerning the Company’sreportable segments is as follows:**

(inmillions of euros)

 
|         |   | **Year Ended  December 31,** |   |
|--------------|--------|-----------------------------------|--------|
|         |   | **2001**                          |   | **2002** |   | **2003** |   |
| Net Revenues |   |                              |   |   |   |   |   |
| Systems      |   | 77.4                              |   | 67.6 |   | 53.4 |   |
| Services     |   | 33.5                              |   | 28.8 |   | 27.0 |   |
| Total        |   | 110.9                             |   | 96.4 |   | 80.4 |   |
|         |   |                              |   |   |   |   |   |
| Gross Profit |   |                              |   |   |   |   |   |
| Systems      |   | 9.1                               |   | 8.1 |   | 5.8 |   |
| Services     |   | 10.0                              |   | 8.8 |   | 8.3 |   |
| Total        |   | 19.1                              |   | 16.9 |   | 14.1 |   |

 

TheCompany only operates in the geographical area of the Netherlands.

 

F-33

----

 

Item 18A

**Financial Statement 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, 2001          |   |                                 |   |                               |   |                           |   |                           |   |
| Allowances for doubtful receivables, trade |   | 1,737                                |   | 316                                |   | (898                           | )      | 1,155                          |   |
| 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                            |   |

 

 

63

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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  |   | Master  contract – Supplying Personnal 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.                                                                                                     |
|          |   |                                                                                                                                                                                                                                                                                                                  |
| Exhibit  4.2  |   | 1996  Stock Plan                                                                                                                                                                                                                                                                                                      |
|          |   |                                                                                                                                                                                                                                                                                                                  |
| Exhibit  4.3  |   | 1995  Director Option Plan                                                                                                                                                                                                                                                                                            |
|          |   |                                                                                                                                                                                                                                                                                                                  |
| 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                                                                                                                                  |

 

 

64

----

 

**Signatures**

 

Theregistrant hereby certifies that it meets all of the requirements for filing onForm 20-F and that it has duly caused and authorized the undersigned to signthis Annual Report on its behalf.

 

May26, 2004 Vianen, The Netherlands Triple P N.V.

 
| By                               |
|----------------------------------|
|                             |
| /s/ H.  Crijns                   |   |
| H.  Crijns                       |
| Interim  Chief Executive Officer |
|                             |
| and                              |
|                             |
| /s/  P. Blokhuis                 |   |
| P.  Blokhuis                     |
| Concern  Controller              |
|                                  |  |  |

 

 

----